Krueger to be new face of White House economics team

Neil Munro White House Correspondent
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President Barack Obama has tagged Alan Krueger to lead the top-level Council of Economic Advisors, a high-profile appointment considering Gallup’s August 17 report that only 26 percent of the public thinks Obama is doing a good job on the economy.

The appointment will likely make Krueger the the administration’s leading voice on the economy, replacing Austan Goolsbee, a University of Chicago who recently returned to academia. (RELATED: Obama’s disapproval rating hits all time high)

Krueger is an economics professor at Princeton University, and is a co-founder of the Princeton University Survey Research Center.

“As one of this country’s leading economists, Alan has been a key voice on a vast array of economic issues for more than two decades,” Obama said in a morning statement.  “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.”

Republican Party researchers promptly pushed back against Krueger. They highlighted his 2009 call for a national 5 percent sales tax, despite its greater impact on low-income Americans.

Krueger has also suggested ending the oil sector’s use of routine tax exemptions for investment, and raising the unemployment insurance tax paid by employers.

While working at the Treasury Department in 2009, he also promoted the ”cap and trade” bill to regulate and tax carbon dioxide. A national “cap-and-trade program would be one of the most important and substantial pieces of environmental legislation in our nation’s history,” he said at a May 2009 hearing.

That September he told Congress that “the proposed cap-and-trade program holds the promise of creating new industries and jobs; decreasing our dependence on oil; and limiting the release of pollutants that threaten the health of families and communities and the planet itself.”

Krueger worked at the Treasury Department as Assistant Secretary for Economic Policy and Chief Economist during the first two years of the Obama administration. While at Treasury, he helped develop several administration initiatives, including the “Build America” Bonds and the Car Allowance Rebate System, also known as “Cash for Clunkers.”

Back at Princeton in March of this year, Krueger continued to boost the administration’s economic policies. “I’m going on record as a contrarian,” he told Bloomberg news. “I suspect we’re going to see a continuing decline in the unemployment rate, though there surely will be some blips along the way,” he said.

Since mid-March, the official unemployment rate has nudged up from 8.9 percent to 9.1 percent.

Nearly all of Obama’s economic team has changed since his inauguration. His initial advisers included Harvard’s Larry Summers, Berkeley professor Christina Romer, and the University of Chicago’s Goolsbee, all of whom departed as the economy stalled.

Treasury Secretary Timothy Geithner announced in July that he would stay in the administration, damping speculation about his departure.