Voice

The Next Appointments

Obama is about to name a new international economic team. Will he use this opportunity wisely?

About a year into Barack Obama's first term, I remember having a conversation with Larry Summers, then the president's top economic advisor. He observed that one clear difference between the Obama era and the time he and I had served together during the Clinton administration, when he was at Treasury in various roles and I was at the Commerce Department, was the amount of time and attention international economic issues received.

The early Clinton years saw a kind of golden moment for international economic policymakers. Later this year, we will mark the 20th anniversary of one of that administration's notable achievements, the passage of the NAFTA deal. But on the trade front, the Clinton era also saw the passage of the Uruguay Round, the admission of China to the WTO, a major focus on trade cases with countries like Japan and on trade enforcement generally, an unprecedented focus on trade promotion, especially with what we called back then Big Emerging Markets (BEMs), and a host of smaller deals. In addition, with the Tequila Crisis (Mexico's 1994 currency meltdown) early in the administration and the Russian and Asian crises of the second term, emergency economic intervention also took precedence in top-level administration meetings. The National Economic Council was established under Clinton and immediately, with Bob Rubin at its helm, achieved the greatest influence it has enjoyed during its history. And with Rubin and later Summers at Treasury, maintaining the good will of international financial (especially bond) markets was also seen as vitally important.

Of course, a large part of the reason the Obama team has focused heavily on domestic economic concerns is the crisis the president inherited -- one that was, in fact, the most pressing international economic issue of its day. But as the crisis was brought under control, the administration's approach grew more balanced. In fact, the Obama team has achieved more internationally than most observers have noted. Among the most important contributions of outgoing Treasury Secretary Tim Geithner, a Clinton-era veteran who grew greatly throughout his tenure in Alexander Hamilton's old job, was his willingness to candidly and actively participate in discussions surrounding the euro crisis and his efforts at building critical economic relationships with emerging powers both through the G-20 and through mechanisms like the Strategic and Economic Dialogue with China, which he co-chaired. What is more, Obama's promise to double exports within five years has been among the administration's most successful job-creation efforts, with early growth on the ambitious trajectory set by the president and overall performance approaching his targets. Meanwhile, the State Department and the White House have worked to put together support programs for countries like Egypt in order to help with the growth and job creation that are so important to stability.

Given the prospect of gradually accelerating growth at home and an extensive roster of opportunities and challenges abroad, the years ahead may create an opportunity for even more emphasis being given to international economic initiatives.

With Geithner's departure as well as that of U.S. Trade Representative (USTR) Ron Kirk and Labor Secretary Hilda Solis, the longstanding opening atop the Commerce Department, and the expected departure of Energy Secretary Steven Chu, the president faces in the next few weeks a series of personnel decisions that will say a great deal about the role international economics will play over the next four years.

The nomination of outgoing White House Chief of Staff Jack Lew to succeed Geithner sends an early signal that the president will continue to prioritize domestic economic issues, including fiscal questions. Lew, a former head of the Office of Management and Budget, is widely respected but is seen by those who have worked with him in Washington as a pick calculated to help work issues with Capitol Hill more than on the international economic stage. That said, the decision to replace Lew with Denis McDonough, the former deputy national security advisor, will place someone with acute awareness of the importance of international economic issues (especially in places where national security concerns are in play, such as the Middle East) in an even more prominent spot. Which is saying something, considering how influential the effective and smart McDonough was during the first term.

But the world will be watching for signals from the other appointments the president makes. Will USTR remain a backwater, as it has been for much of the past four years, or will it perhaps take the lead in pursuing a more activist trade agenda, perhaps including as a centerpiece initial work on a U.S.-EU trade deal? Will Commerce be at the center of the long-promised reorganization proposed by the president and championed by acting-OMB director Jeff Zients, one of Obama's most talented advisors and someone who also happens to be one of the few senior officials with real business experience? Will the administration continue to champion commercial interests overseas and the economic ties that are our most important link to most countries? Will it be able to put together international aid packages that can make a difference in stabilizing Egypt and other vital and fragile states?

Fortunately, in addition to the likes of Lew, McDonough, and Zients, the president has a very talented team already on board and capable of stepping into many of the open roles. Michael Froman, a friend of Obama from his law school days but also a former top aide to Bob Rubin, has been the president's international economic quarterback and, although behind the scenes, is recognized in capitals around the world and in business headquarters as the man to see on their most important issues. The question that has been hanging over Froman for a long time is whether he would get a cabinet post, such as USTR. Right now, the view among many of Froman's colleagues in the administration is that the job is his for the asking but that frankly, taking it might be a step down from the absolutely central role he plays on the whole range of issues in his current portfolio.

If Froman declines, current Treasury Under Secretary Lael Brainard and current Commerce Under Secretary Francisco Sánchez are reportedly in line for the USTR job. Both would bring needed diversity to the cabinet. But more importantly, both have been extremely valuable players -- Brainard running Treasury's entire international portfolio and the well-liked Sánchez, now one of the administration's top ranking Latino officials, recently having been cited by the members of the Washington International Trade Association as the trade official who deserves more recognition for his efforts on behalf of the president's export initiative. Both deserve promotions, and given Lew's need for strong international support, perhaps the best approach would be for Brainard to become deputy secretary at Treasury with Sánchez stepping in at USTR. (Please note: As of this hour, especially after my recent New York Times article suggesting the president could be a better manager than he has been by making better use of his strong team across the administration, I have yet to receive a call asking for my opinion.)

At Commerce, while Xerox CEO Ursula Burns is reportedly the leading candidate, contenders include Rebecca Blank, one of the most respected economists in the administration and someone who has developed legions of supporters for the job in her extended tenure in the "acting" secretary role. Sánchez is also seen as a contender for this job, as is Export-Import Bank CEO Fred Hochberg, who has overseen revolutionary growth at Exim, doubling loan figures and setting records throughout his tenure. (Blank, I'm told, has indicated to her team that no decisions on these key posts ought to be expected for a couple of weeks.)

I've included the Department of Energy in the list because nothing is more important to both America's economic recovery and to the world's shifting geopolitics than how the country manages the current paradigm shift in our energy supplies, available technologies, and demand, and in how they intersect with our concerns about climate. Chu was underappreciated in Washington because he was not a political animal, but no energy secretary in history has been so respected for his intellect or vision. The president is likely to replace him with a retired politician like Byron Dorgan, Jeff Bingaman, or Jennifer Granholm. But within the agency, he also has some terrific talent like Deputy Secretary Dan Poneman or, holding the international portfolio there, David Sandalow, who might also be seen as a successor to Poneman were he to move on. (Poneman, like Assistant Defense Secretary Derek Chollet, might be a solid replacement for McDonough at the NSC.)

Another key post in this mix is at the State Department, where Under Secretary for Economics Bob Hormats, who was recently described to me by a top business activist as "the one official in the administration who understands business better than any other," has led the department's efforts on initiatives from the Middle East to promoting investment in the United States. Rumor has it that incoming Secretary of State John Kerry has asked Hormats to stay on for a while. The two have a longstanding relationship, and the secretary is likely to find Hormats an exceptional asset.

Re-reading this, I'm struck by the fact that it is so broadly positive about the members of this team -- though, like any other self-respecting inside-the-Beltway commentator, I would really prefer to be more cynical and snarky. After all, beating up on the talented people who submit to the long hours and low pay of government work is our bread and butter. But the reality is that if he chooses to tap into it, the president has a first-rate group of experienced senior economic officials who are ready to help energize his international economic agenda. Now that America's domestic crisis is receding, it's time to develop the better connections to the global marketplace that will be so important to sustaining the country's growth and influence in the years ahead.

Update: Between the time this article was written and when it was posted, Anthony Blinken was named to replace Denis McDonough as deputy national security advisor. I have known Blinken, most recently Vice President Biden's top national security aide, for a long time and believe there is no one who could be picked for the job who would be a better choice.

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David Rothkopf

The Bidenization of America

The veep is no joke -- and he's making a serious play for 2016.

Forget Dick Cheney: Joe Biden is the most influential vice president in American history.  He is poised for a role in the Obama administration's second term that seems sure to make Cheney look like a shrinking violet, and Al Gore look like little more than a spear-carrier for Bill Clinton.

Consider this: The veep has thus far taken the point role in the two most important initiatives of this year for the Obama administration: the fiscal cliff battle and gun control. He is perhaps the president's single most influential foreign policy advisor. Obama's incoming national security team is Biden's favorite players from his days as chairman of the Senate Foreign Relations Committee. John Kerry and Chuck Hagel are seen as far closer to him than to the president. Tom Donilon, the president's national security advisor, is also seen as close to the vice president, which should come as a surprise to no one since his wife, Catherine Russell, is the vice president's current chief of staff. Biden's previous chief of staff, Ron Klain, is one of two men considered likely to replace Jack Lew as Obama's chief of staff. Biden's top national security advisor, Tony Blinken, is seen as heading for a promotion (if moving away from this particular vice president could be seen as a step up), either stepping in for U.S. U.N. ambassador Susan Rice should she someday become national security advisor or moving over to a top job in Kerry's State Department.

In terms of day-to-day foreign policy decision-making, Biden is a regular at the morning meeting at which the president, Donilon, outgoing White House counterterrorism chief John Brennan, Donilon deputy Denis McDonough, and Blinken review the latest intelligence and make the big decisions that are passed along to the other arms of the administration to execute. Obama consults Biden regularly, and is known to respect his opinion greatly. This was sometimes a bone of contention for officials like Bob Gates and Hillary Clinton, who often sought a tougher line on key issues than the generally more dovish team led by Biden. But those officials are gone or leaving now.

The goofy Uncle Veep persona that follows Biden around like a stray dog, largely thanks to his garrulousness and occasional slips of the tongue, could not be farther from the reality of the role this seasoned Washington insider is playing. Washington is a town in which relationships are currency, and given the fact that the president is both relatively new to the city and not exactly a social animal, it is Biden's ties that are often critical to helping the White House advance its goals. This was never clearer than at the turn of the New Year, when it took Biden's personal intervention with Senate Minority Leader Mitch McConnell to broker the deal that saved America -- for a while at least -- from going over the fiscal cliff.

While the role Biden is playing may come as a surprise to outsiders, it is not the one for which he has been preparing his whole life. I vividly remember a story told to me by my former boss, the late Rep. Steve Solarz, who, upon arriving in Congress in 1978, discovered he was also allowed on the floor of the Senate. So he walked over one night and discovered, pacing the floor and orating remarks into the Congressional Record, young Senator Joe Biden. The chamber was empty save for a tired-looking gentleman sitting at the chair, but Biden was gesticulating and emoting as though he were speaking to a stadium. At that moment, Solarz used to say, it was clear to him that this was a guy who was planning on a run to the top.

Insiders say that Biden, who would be 74 come the 2016 election, is intent on succeeding Obama in the Oval Office. Further, there are clearly some around Obama who see him as a more desirable choice than Clinton. Indeed, there are rumblings that the old Obama-Clinton divide -- never far beneath the surface -- may widen again as a White House camp dominated by Biden tees things up for the next presidential season.

Unlike Cheney, however, who wore his influence like the Star Wars character he evoked wore his helmet and cape, Biden remains one of the few Washington figures who can actually be described as beloved by many. It might seem that it is his humor or his million-dollar smile that have earned him that affection. But in reality, to those on the inside in this administration it has been his loyalty, his tirelessness in pursuit of some very tough goals, his willingness to speak candidly to the president, and his special combination of experience and intelligence that have put him in this unique role.

No one saw it coming. Except, of course, the people who have been paying attention to his steady (or is it relentless?) ascent for the past three and a half decades.

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