Cabinet confidential: Who will Joe Biden pick as the next US Secretary of the Treasury?
President-elect Joe Biden has made it clear he wants his government to “actually look like America”, with pundits expecting the most diverse cabinet ever assembled.
Speculation is rife Biden will appoint female and Bame candidates to top cabinet roles, including to Secretary of the Treasury and Secretary of State.
The former Vice President will have to balance these considerations with how much opportunity he gives to Democrats from the left of the party who stood by him through the election campaign.
This is particularly important when it comes to the Treasury as Biden’s cabinet will have to implement a clear economic plan to navigate the country’s worst recession in almost 100 years.
A source close to Biden’s economic transition team said the President-elect was now considering just three candidates for the top Treasury role, all of them female.
No woman has ever controlled the nation’s finances, with Biden tipped to appoint someone that will shatter this glass ceiling.
Lael Brainard
Lael Brainard is a current member of the US Federal Reserve Board of Governors and previously served in a top role at the Treasury during the Barack Obama administration.
The moderate Democrat has been touted as the frontrunner to be Biden’s Secretary of the Treasury and to oversee his expansive economic plan.
Former US treasury official Mark Sobel told the Financial Times that her experience over the past decade “checks all the boxes”.
“She knows the international side of the Treasury – she knows all the players internationally, be it on the regulatory side, the monetary policy side and the diplomatic side,” he said.
Brainard has been criticised by some Democrats in the past for not taking a tough stance on China’s currency manipulation and for being too wrapped up in the globalist economic orthodoxy that dominated US politics prior to Donald Trump.
Since starting at the Fed she has made something of a leftward turn and has pushed the need for greater regulatory protection for American workers.
Sarah Bloom Raskin
Sarah Bloom Raskin served as Deputy Secretary of the Treasury in the Obama administration and has also previously served on the US Federal Reserve Board of Governors.
She is currently a director with Vanguard, an investment giant with $6 trillion in assets under management.
Bloom Raskin became the preferred Treasury candidate for the Democrats’ progressive wing, after she last year called for the US to implement stricter environmental disclosure rules for large companies.
She has also written about the need for the US government to go big on infrastructure spending in order to stoke the economy and help transition to a greener future.
This would fit nicely with Biden’s commitment to spend $2 trillion on infrastructure as a part of his post-Covid “Build Back Better” pledge.
However, with a likely divided Congress it is hard to see how much of Biden’s spending plan will pass through the Senate.
Cornell professor, and former Bernie Sanders adviser, Robert Hockett told City PM that Bloom Raskin was a “stealth lefty”.
“I don’t think she has been so grandstanding-ly, fire brading-ly left as to terrify Wall Street,” he said.
“I don’t think she would frighten off the right like [Senator] Elizabeth Warren would.”
Janet Yellen
A late entrant into the race for the position has been former Federal Reserve chair Janet Yellen.
Another Obama appointee, Yellen served as boss of the central bank from 2014 to 2018 and is now senior fellow at the liberal-leaning Brookings Institution think tank.
Her tenure as Fed chair was widely regarded as a success, with a Wall Street Journal poll showing 60 per cent of economists gave her an “A” for her role.
Yellen would also be a welcome pick for left-wing Democrats, with the famed economist in favour of implementing a carbon tax.
Speaking to Reuters in October, Yellen said: “There really is a new kind of recognition that you’ve got a society where capitalism is beginning to run amok and needs to be readjusted in order to make sure that what we’re doing is sustainable and the benefits of growth are widely shared in ways they haven’t been.
“What I see is a growing recognition on both sides of the aisle that climate change is a very serious concern and that action needs to occur.”