Obama bolsters economic team

obama_maryland.gi.top.jpgPresident Obama named Gene Sperling and Katharine Abraham to his economic team on Friday. By CNN Wire and CNNMoney staff


WASHINGTON (CNNMoney) -- President Obama announced key members of his economic team Friday as the administration tries to nudge the U.S. economy into a higher gear.

The announcement came on the same day the nation's unemployment rate took a surprising dive, and while Obama touted the news as a sign the economy is clearly on the track to recovery, he noted there is still much work to be done.

"Standing with me here today are men and women who will help America fulfill [that] mission," Obama said.

Gene Sperling, currently a counselor to Treasury Secretary Timothy Geithner, was named as the director of National Economic Council, a key policy post that he held during the final years of the Clinton administration.

Obama also announced Jason Furman as the principal deputy director of the NEC and assistant to the president for economic policy. Furman is already on the council.

The president also announced his intent to nominate Katharine Abraham as member of the Council of Economic Advisers and Heather Higginbottom as deputy director of the Office of Management and Budget.

On Thursday, the president named former Commerce Secretary William Daley, scion of a venerable Chicago political family, as chief of staff.

The announcements come at a time when Americans are deeply concerned over the high unemployment rate, which has been hovering just below 10%.

At times, Republicans have called the administration's economic plan for the country nonexistent.

Sperling returns to the job he held during the final two years of the Clinton administration, a period that coincided with the greatest strength the U.S. economy and job market had seen in many decades. Unemployment reached a 30-year low in March 2000, and the federal government was running surpluses rather than deficits.

"One of the reasons why I selected Gene is he has done this before," Obama said, making the announcement before workers at a window plant in Landover, Md. "In his tenure in the Clinton administration during the late nineties, he helped formulate the policies that contributed turning deficits to surpluses."

But Sperling takes the job in a much different environment, with record federal deficits and unemployment above 9% for the longest stretch since the Great Depression.

And some of the blame for the financial meltdown that led to the Great Recession has been laid on decisions Sperling oversaw in the Clinton years, most notably the deregulation of Wall Street that allowed the combination of commercial and investment banking operations.

Sperling is likely to be criticized by those on the left who believe he is too close to Wall Street. Bloomberg News reported in October 2009 that Sperling, in 2008, received $887,727 from Goldman Sachs for consulting work he did for the firm and $158,000 for speeches mostly made to financial companies, including the firm run by accused Ponzi scheme mastermind R. Allen Stanford.

On Friday, a White House spokesman said the work Sperling performed for Goldman was on the creation and implementation of a $100 million philanthropic venture to support girls' education.

Sperling has been serving as an adviser to Geithner since the start of the Obama administration. He won high marks inside the Obama White House for his negotiating skills with congressional Republicans that helped seal the tax deal during the lame-duck session of Congress in late December.

But his appointment also will renew criticism that the administration is not bringing in fresh voices when it has an opening in the inner circle that needs to be filled.

Jeff Sessions, the top Republican on the Senate Budget Committee, expressed reservations about Sperling's appointment, saying he doubts Sperling will be able to lower the deficit.

The other key economic position in the administration, the chairman of the Council of Economic Advisors, is held by long-time Obama friend and adviser Austan Goolsbee. He was promoted to chairman from a seat on that council when Christina Romer left the administration last year.

Furman has served as deputy director of the NEC since the start of the Obama administration. He also served as an economic adviser to Obama during the 2008 campaign, although he did not come aboard until after Hillary Clinton had conceded the Democratic nomination to Obama.

On Friday, Obama praised Furman for his work on the tax cut compromise passed during the lame-duck session of Congress, and his efforts during the financial crisis that gripped the nation during the beginning of Obama's term.

Furman worked previously as a staff economist at the Council of Economic Advisers and as a special assistant at the NEC during the Clinton administration. He was seen as particularly close to Clinton Treasury Secretary Robert Rubin. Together, they helped found the Hamilton Project, a think tank at the Brookings Institute. Furman served as the director of the project before he left to join the Obama team.

Furman's ties to Rubin, who went on to become a top executive at Citigroup (C, Fortune 500), could be a source of controversy. It is also likely to renew criticism of Obama from those on the left who argue the administration is already too close to Wall Street.

-- CNN Senior White House Correspondent Ed Henry and CNNMoney's Chris Isidore and Charles Riley contributed to this report. To top of page

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