WASHINGTON — President Barack Obama said Monday he’s nominating Alan Krueger, a labor economist who has advocated for a hiring tax credit for businesses and increased infrastructure spending, to lead the White House Council of Economic Advisers.
In making the announcement at the White House, Obama said Krueger will play a central role in developing policies to spur faster economic growth, which he called “our great ongoing challenge as a nation.”
Obama said he will announce a package of proposals next week to boost hiring.
Krueger, 50, would replace Austan Goolsbee, who left the administration earlier this month to return to teaching at the University of Chicago. Krueger, who received his doctorate from Harvard in 1987, has been at Princeton University since last November after serving as the Treasury Department’s chief economist for two years.
The nomination is subject to Senate confirmation.
Krueger would help remake Obama’s economic team ahead of next year’s re-election campaign as the president seeks to lower the 9.1 percent unemployment rate.
“I favor the idea of having a new jobs tax credit,” he said in a July 1 interview with Bloomberg radio. “If companies increase their payroll by an employee, they could get a $5,000 tax cut to offset their additional hiring costs.”
“Eventually, companies reach a point where they are so lean they do need to hire more,” he said. “But they also need to be more confident that demand will be there for their goods and services.”
Cecilia Rouse, a Princeton economist and former member of Obama’s economic advisers’ council, called Krueger “an inspired choice” by the president.
“Alan is a brilliant economist who is creative and insightful, and dedicated to better understanding the labor market to help improve people’s lives,” Rouse said.
Krueger would be Obama’s third CEA chairman in as many years, joining an economic team that has been almost entirely revamped in Obama’s first term. Treasury Secretary Timothy Geithner is the only member of Obama’s original core economic advisers who remains in the administration.
The president’s first council leader, Christina Romer, returned to teaching at the University of California at Berkeley last September. National Economic Council Director Lawrence Summers and Office of Management and Budget Director Peter Orszag left the administration last year. Summers returned to Harvard University and Orszag is now vice chairman of global banking at Citigroup Inc.
As chairman of the Council of Economic Advisers, Krueger’s salary would be $191,300 a year. In his last full year as a professor at Princeton, Krueger made $369,807, according to his financial disclosure report.