Federal Reserve Governor Lael Brainard has been floated as a possible Treasury Secretary if former Vice President Joe Biden wins the presidency next month. If chosen and confirmed by the Senate, she would be the first woman to lead the Treasury Department — a symbolically significant appointment analysts say would put a veteran Beltway economist with centrist views and recession-honed crisis management skills in a critical Cabinet position.
“I think Biden wants diversity reflective of America, and I think they’re going to want to break some glass ceilings, leading me to think you could see the first female Treasury Secretary,” said Stephen Myrow, managing partner at Beacon Policy Advisors, a policy research consulting firm.
Brainard’s career includes an earlier stint at the Treasury, to which she was confirmed with bipartisan Senate support in 2010 on a 78-19 vote. There, Brainard helmed the department’s international affairs division and gained a reputation for navigating the intersection of finance and diplomacy with acumen. After leaving the Treasury in late 2013, she moved to the Fed, also with bipartisan backing — she was confirmed in June 2014 by a 61-31 vote.
Brainard would be a palatable choice who would appeal to — or at least not face stiff resistance from — the Democratic Party’s left wing, while not ruffling feathers on Wall Street the way a more progressive figure like Elizabeth Warren certainly would.
That support from both sides of the aisle will be important. A Beacon Policy Advisors analysis of the Biden campaign’s economic advisers noted that many of those perceived to have the former vice president’s ear on economic issues — as well as his vice presidential nominee, Sen. Kamala Harris — are grouped farther left on the political spectrum than the candidate himself.
“This group includes a surprisingly high number of progressives for a candidate who ran as a center-of-the-party moderate,” the report said. “While we do not view it as likely that the Biden administration will promote policies as progressive as Harris’s or Warren’s voting records in the Senate, it will certainly influence the direction Biden takes on some economic policies.”
Some of Biden’s other top financial advisers are drawn from the ranks of left-leaning think tanks: Jared Bernstein was Biden’s chief economist and economic adviser during the Obama administration from 2009 to 2011, after which he took a position with his current employer, the Center on Budget and Policy Priorities. Nobel Prize-winning economist Paul Krugman wrote in 2009 that the advisory board on which Bernstein served was “a very good place to give progressive economists a voice.”
Heather Boushey, a top economist with Hillary Clinton’s 2016 transition team, currently helms the Washington Center for Equitable Growth and has worked for the left-leaning think tanks Center for American Progress and Economic Policy Institute (Bernstein also did a stint at the latter).
Brainard is perceived as being less hostile to Wall Street while — critically — remaining at a professional distance from the financial services industry. “The candidates the progressives are going to be pushing are most likely not coming from the private sector — it’s academia, it’s think tanks. Progressives are concerned that people deemed moderates are going to have ties too close to industry,” Myrow said.
“The knock on her would be the left saying they want somebody with more clear progressive bona fides, someone who is going to be a more strong proponent of deficit financing who’s going to focus not just on economic recovery, but also economic recovery in a way that promotes equality,” Myrow said.
Brainard would likely have an easier time obtaining confirmation if Biden wins the presidency but the Senate remains under Republican control. “A GOP-controlled Senate will of course require considerably more consensus on Cabinet-level officials that will enhance centrist candidates,” said Karen Shaw Petrou, co-founder of Federal Financial Analytics, a financial-policy consulting and analysis firm.
“I think a Biden administration will look for centrist candidates on key economic and financial posts in any case, but a GOP Senate makes this still more likely,” she said.
Myrow said Brainard also could appeal to Biden because she is well-versed in crisis policymaking thanks to her current work at the Fed — for which she has orchestrated much of the central bank’s emergency lending program response to the pandemic — as well as her earlier role at the Treasury Department in the wake of the financial crisis and Great Recession. “She’s not just a senior governor at the Fed, but [Federal Reserve Chairman Jerome] Powell is seen as relying heavily on her… She understands the situation, she doesn’t need to be brought up to speed, she knows a lot of the career players,” Myrow said. “If you look back to 2008 and 2009, part of the reason Obama went with Timothy Geithner was because Geithner was familiar with the crisis. That’s a strong argument for Brainard.”