Krueger mounts case to become top Obama economic adviser

Princeton economist Alan Krueger faced some pointed questions from Republican lawmakers Thursday but did not face strong headwinds in his bid to become one of President Obama’s top economic advisers.

The man the president has tapped to be the next chairman of his Council of Economic Advisers mounted a full-throated defense of government attempts to stimulate the economy, telling the Senate Banking Committee that there is still more the government can do.

{mosads}”While time may heal many of the wounds in the economy, applying the proper medicine will help those wounds heal more quickly,” he said.

Krueger’s selection comes at a crucial time for the Obama administration. With unemployment stuck above 9 percent and the economic recovery losing steam, the nation’s continued doldrums pose a growing threat to the president’s reelection campaign. If confirmed, the labor economist would play a major role in crafting and touting the president’s economic policies.

The ranking Republican on the panel, Sen. Richard Shelby (R-Ala.), said after the hearing that he would not block Krueger’s nomination. But it was also clear he had major reservations about the selection, in particular Krueger’s continued support for the economic stimulus pushed by the Obama administration.

The lawmaker asked Krueger during the hearing if he believes the stimulus worked, and was incredulous when the nominee did not hesitate to back it.

“You’d be in the minority in this country,” Shelby said.

Krueger argued that while the president’s 2009 stimulus plan failed to lower unemployment and boost the economy by the original projected levels, that was because of the underestimated depth of the nation’s struggles, not the failure of the stimulus.

“The economy was contracting much more rapidly than anyone appreciated back in 2008,” he told Shelby, adding that the stimulus “seemed to have broken the back of the recession.”

Shelby, who was the lone Republican at the nomination hearing, also pressed Krueger on the chances the president’s new jobs plan could become law, which he dubbed the “son of stimulus.”

But the nominee demurred, saying, “I try to analyze the economics of proposals. I leave the politics of the proposal to those who do the politics.”

Despite those probing queries and the tough confirmation battles the administration has waged against Republicans in recent months, Krueger is not expected to face stiff opposition. For one, lawmakers generally grant more deference to the president in choosing his own advisers, and Krueger has already been confirmed by the Senate once before, in 2009 when he joined the Treasury Department as its assistant secretary for economic policy.

{mossecondads}In his testimony, Krueger touted his emphasis on objective data in guiding his recommendations, adding that he tries “not to be tied to a particular doctrine of economic thought.”

But Shelby said after the hearing that he is “obviously a Keynesian, a stimulus guy.”

Senate Banking Committee Chairman Tim Johnson (D-S.D.) vowed to move Krueger’s nomination as quickly as possible, saying he has a vital role to play in the White House.

“At this point in the economic recovery, the administration’s economic team must have ‘all hands on deck,'” he said.

Obama nominated Krueger in August to replace former CEA chairman Austan Goolsbee, who returned to academic work at the University of Chicago.