Well-positioned for a starring role

Having the admiration of a former U.S. Treasury secretary is a feather in any economist’s cap. Jason Furman has the glowing esteem of two.

Robert Rubin tapped him to lead the Hamilton Project, an initiative the Clinton Treasury secretary began to promote centrist Democratic policy ideas. Lawrence Summers, Rubin’s successor at Treasury and not one to coo over another’s intellect, calls Furman “really smart” and a “first-rate economist.”  

{mosads}Both men got to know him while he was in his 20s working as an economist in the Clinton White House.

Since then, Furman’s profile has risen. He was the top economic adviser to Sen. John Kerry’s (D-Mass.) presidential campaign in 2004. In 2005, he helped torpedo President Bush’s plan to replace part of Social Security with private accounts, serving as the proposal’s most dogged critic while working at the Center on Budget and Policy Priorities , a liberal research group.

Now 37, Furman is out of the glare of presidential politics as the Hamilton Project’s second director. But he may not be for long. Summers, Rubin and others say he is on the short list of bright young economists to oversee economic policy should a Democrat win the White House.

“He is very well-positioned,” Rubin says.

 Since they regained control of Congress, Democrats have turned repeatedly to Furman for advice on economic issues. He testified four times on the Hill last year and, along with his Hamilton colleague Doug Elmendorf, played a key role nudging economists, lawmakers and administration officials toward consensus on a package of measures to stimulate the economy earlier this year.

“We were pretty pleased how our role in that worked,” he said. “Now on housing, we’re trying to play a similar role.”

 At the Hamilton Project, Furman spends most of his time dwelling on the gritty long-term problems, such as healthcare, energy policy and income inequality, that are sure to dominate the domestic agenda of a would-be Democratic administration. A sort of virtual think tank that relies heavily on the work of outside economists, it was launched in 2006 partly to combat the notion that Democrats suffered from a paucity of new ideas.

 According to Furman, “The project is for people who believe two things — that the government can play a constructive role in promoting shared growth and that markets have to play a central role in the process.”

An affable guy who tends to downplay his accomplishments, Furman describes his progression from academia to the center of Washington policy circles as “a self-reinforcing accident.”

While earning his doctorate in economics at Harvard, one of his advisers got a call from Joseph Stiglitz, who had an opening for an economist at Clinton’s Council of Economic Advisers. The professor suggested Furman, who decided to head to Washington for what he thought would be only a brief stint in public policy. But he was soon hooked.

Furman followed Stiglitz to the World Bank when Clinton tapped Stiglitz to be its president. Then, after resuming his Ph.D. at Harvard, he was lured back to the Clinton White House by Gene Sperling, then head of the National Economic Council.

There he wowed Cabinet members like Summers with his strong grasp of policy issues and a knack for explaining them to non-economists.

Sperling recalls one Cabinet-level meeting on the budget when Clinton was grilling Furman about the subtleties of net debt versus gross debt. Furman rattled off a textbook explanation. “I’ve seen quite a few experienced people not perform as well under questioning by the president. Jason didn’t really flinch,” Sperling says.

Peter Orszag, the head of the Congressional Budget Office and Furman’s predecessor at the Hamilton Project, says, “Jason is one of the few people who can hold their own with illustrious economist X and then explain their view to senator Y.”

Furman first showed an interest in policy as a kid growing up in New York’s Greenwich Village, where his family shared a backyard with Bob Dylan. He loved math, but by age 13, he was devouring The Economist magazine, the policy junkie’s bible. As an undergraduate at Harvard, he majored in social studies, not economics.

Furman fits squarely in the pro-business camp of the Democratic Party, a group that favors free trade and combining government intervention with market incentives to cure social ills. On a few policy points, such as changing the tax treatment of healthcare, he agrees with Republicans. He notes that Sen. John McCain (Ariz.), the Republican nominee for president, has adopted several ideas promoted by the Hamilton Project for reforming healthcare.

Yet Furman prefers a far more interventionist government than most Republicans could swallow, arguing that a more progressive tax code and policies such as wage insurance and universal healthcare are necessary for free trade to survive politically.

“[Over the last seven years] we haven’t seen either in substance of economic policy or even in sort of a tone of compassion and understanding the right type of complements to make trade work for people,” he says.

As an analyst at the Center on Budget and Policy Priorities in 2005, Furman started churning out sharp critiques of Bush’s plan to replace Social Security with private accounts. His boss at the center, Robert Greenstein, marveled at the strength of his analyses. Furman would often produce them overnight to immediately counter the batches of details released by the administration.

One of the policy’s architects in the administration, Charles Blauhaus, calls Furman “an incredibly smart guy.” He acknowledges that he put the administration on the defensive during the private-accounts debate: “We were often in the mode that we were having to respond to things he was saying.”

Furman is staying on the sidelines in the presidential race, though he talks to people from both Democratic campaigns. After advising Kerry and former Vice President Al Gore (D) on their White House runs, he concluded that campaigns “are a much more political environment than I’m most happy in.”

But advising a president is a different matter. “I felt that by the middle of 2000 [when I left the Clinton White House], I actually knew what I was doing for the first time. I’d like the opportunity to continue it,” he says.