Joe Biden's economic team faces tough pushback from Republicans

Republicans draw red lines as arguments over the scale of economic stimulus continue

US Speaker of the House, Nancy Pelosi walks to her weekly press briefing on Capitol Hill in Washington, DC. AFP 

With unemployment still high and the pandemic threatening yet another economic slump, US President-elect Joe Biden is assembling a team of liberal advisers who have long focused on workers and government efforts to address economic inequality.

Janet Yellen, Mr Biden's nominee for treasury secretary, served as head of the Federal Reserve from 2014 to 2018, when she placed greater emphasis than her predecessors on maximising employment and less focus on price inflation.

Mr Biden also named Cecilia Rouse as head of his Council of Economic Advisers. Heather Boushey and Jared Bernstein were selected as members of the council.

All are outspoken supporters of more government stimulus spending to boost growth, a major issue with the pandemic cramping the US economy.

Those choices “signal the desire of Mr Biden's administration to take the CEA in a direction that really centres on working people and raising wages", said Heidi Shierholz, senior economist at the Economic Policy Institute and former Labor Department chief economist during the Obama administration.

A progressive cast

Mr Biden's nominees are also a more diverse group than those of previous presidents.

Ms Yellen, if confirmed by the Senate, would be the first woman to serve as treasury secretary, after breaking ground as the first woman to lead the Fed.

Ms Rouse would be the first black woman to lead the council in its 74 years of existence, while Neera Tanden, Mr Biden's pick for director of the Office of Management and Budget, would be the first South-Asian American in that job.

Wally Adeyemo could also become the first black deputy treasury secretary.

Ms Rouse, Ms Tanden and Mr Adeyemo will all require Senate confirmation and Ms Tanden, in particular, is already drawing heavy Republican criticism.

Along with its progressive cast, Mr Biden's team has years of experience in government and policymaking.

That is earning plaudits from some conservatives who say the nominees are not a far-left group bent on strangling the economy, as President Donald Trump repeatedly warned during the election campaign.

“They are intellectual liberals, but not burn-it-all-down socialists. They’re fairly conventional liberal economists and experts,” said Brian Riedl, senior fellow at the Manhattan Institute and an adviser to Mitt Romney’s 2012 presidential campaign.

Still, the Biden administration has ambitious goals and will face solid opposition from Republicans in Congress.

The party needs to win one of two Georgia seats in a January 5 special election to retain control of the Senate and Republicans have made major inroads in the Democrats' majority in the House of Representatives.

“Most of the policies that Biden ran on will not survive a Republican Senate,” Mr Riedl said.

Those include proposals to raise the minimum wage to $15 an hour and significantly increase taxes on wealthy Americans.

Mr Biden could secure another round of stimulus spending early next year, particularly if the recent sharp increases in virus cases push the economy into recession again.

But such a package will probably have to come in under $1 trillion to receive Republican support in the Senate, Mr Riedl said, rather than the higher figure House Speaker Nancy Pelosi seeks.