Obama taps Krueger for economic post

WASHINGTON (AP) ? President Barack Obama has chosen labor economist Alan Krueger for a top administration post as the White House scrambles for solutions to boost a fragile economy with the 2012 election looming.

The White House said Monday that Obama is nominating Krueger to head the White House Council of Economic Advisers. If confirmed by the Senate, he would replace Austan Goolsbee, who left the administration earlier this month.

“Alan understands the difficult challenges our country faces, and I have confidence that he will help us meet those challenges as one of the leaders on my economic team,” Obama said in a statement.

That team looks far different now than the one Obama first brought with him to the White House over three years ago. Advisers Larry Summers, Christina Romer and Goolsbee have now all departed, as Obama continues to struggle with perceptions the economy is stuck in low gear on his watch.

Treasury Secretary Timothy Geithner is the only remaining top official from Obama’s original economics team. Last month, the Treasury Department announced that Geithner would stay on, ending speculation he would leave the administration.

Krueger spent the first two years of the Obama administration as an assistant Treasury secretary for economic policy. In 2010, he returned to Princeton University, where he has served on the faculty for more than 20 years.

While at Treasury, Krueger worked on the popular “Cash for Clunkers” program that gave people rebates for buying new, more fuel-efficient vehicles and the HIRE Act, which gave businesses tax incentives to give jobs to the unemployed.

Krueger is likely to become an important public face for the administration on the economy. Both Roemer and Goolsbee, Obama’s two previous CEA chairs, were frequent spokesmen for the president, appearing on television and at White House events to promote the president’s policies.

That role could be even more important in the coming months, as a host of would-be Republican successors travel around the country, campaigning hard for the GOP presidential nomination by focusing, in no small part, on Obama’s handling of the economy.

The national unemployment rate remains at 9.1 percent and has shown little improvement over the past year, despite the more than $800 billion stimulus program that Obama got Congress to pass not long after he took office. The economy also has been on a dual track of slow growth and ballooning deficits, and Obama saw the nation’s credit rating downgraded by Standard & Poor’s earlier this year as he fought congressional Republicans for weeks for a program to slow the flow of red ink.

The White House and Republican congressional leaders ultimately agreed to a compromise deal to increase the government’s borrowing authority in early August, on the cusp of default, but the S&P credit rating was lowered from AAA to AA+, nevertheless.

Obama took to the road for a series of town-hall style meetings just before he went on vacation, seeking to explain his efforts to promote economic growth and attack the stubborn high joblessness. He and his aides have suggested he’ll bring forth a new jobs plan when Congress returns after the Labor Day recess.

Appearing Monday on MSNBC, Goolsbee said that “we’re still in a pretty tough spot” on the economy.

“When you come out of a recession, especially one as deep as we were in, you can’t just go back to do what you were doing before,” he said. He said growth had picked up in 2010 but “this year we’ve taken some heavy blows.”

He said that investing and focusing on the “industries of the future” are the kinds of policy directions the country needs to pursue.

Goolsbee said he doesn’t think that bringing another stimulus program forward is necessarily a good idea, and maybe there should be some kind of tax incentives for companies to hire.

Goolsbee left the administration to return to the University of Chicago, but is expected to play an informal role in Obama’s re-election campaign.

Krueger’s appointment was first reported by the Wall Street Journal.