Obama’s Economy Team Lacks Top Aides as Senate Delays (Update1)

March 2 (Bloomberg) -- President Barack Obama’s economic advisers are increasingly concerned about the U.S. Senate’s delay in confirming the nominations of Austan Goolsbee and Cecilia Rouse to the White House Council of Economic Advisers.

Without Senate confirmation, the two economists are barred from advising the president as the administration tackles the worst financial crisis in 70 years and tries to advance the spending plan Obama submitted to Congress last week.

“It’s frustrating,” said Christina Romer, who heads the three-member CEA. “These are hard economic times and we desperately want to get them through the Senate and definitely on the job.”

“They are both superb economists,” she said. “I can’t imagine what the holdup is.”

Goolsbee and Rouse appeared before the Senate Banking Committee on Jan. 15 and were slated for a full Senate confirmation on Inauguration Day, Jan. 20, according to a senior administration official. Instead, they were approved by the panel Feb. 10.

They weren’t placed on the confirmation slate for the full chamber, leading some administration officials to conclude that Senate Republicans were retaliating against the Democrats because President George W. Bush’s nominations for the same slots languished in the Senate for months at the end of his second term.

‘Above My Pay Grade’

Asked why the Senate has failed to hold a confirmation vote, Romer said, “That’s above my pay grade.”

Their stalled nominations serve as another reminder that Obama may find it difficult to live up to his campaign promise of changing the partisan culture in Washington.

Democratic Senate Majority Leader Harry Reid of Nevada “was outrageous in abusing the Senate’s advise and consent powers,” said Tony Fratto, a former Bush spokesman. “So no one should be surprised if Senate Republicans follow the precedent he set.”

Goolsbee, 39, a University of Chicago economist who advised Obama during the campaign, also serves on the president’s Economic Recovery Advisory Board, headed by former Federal Reserve Chairman Paul Volcker. Still, the delay in the confirmation means Goolsbee and Rouse -- a Princeton University economist who specializes in educational investments -- are limited in the interaction they can have with the president and other advisers.

Middle-Class Task Force

For example, Rouse’s uncertain status precluded her from traveling with Vice President Joe Biden to participate in a task force on the middle class in Philadelphia on Feb. 27, according to a senior administration official. Neither has been able to do media interviews or otherwise promote Obama’s $787 billion economic-stimulus package.

A Senate Democratic aide said Republicans had relayed some concerns about the nominations that the administration and party lawmakers are working to address. Under Senate rules, any senator can block consideration of a nominee.

“There are some objections on the Republican side that we are trying to deal with,” said Jim Manley, a spokesman for Reid.

Still, there is some confusion, both in Congress and the White House, as to why the two nominees have been delayed.

Arizona Senator Jon Kyl, the second-ranking Republican leader, said in an interview he hadn’t “heard one way or another” if one of his colleagues had placed an official “hold” on their nomination, which would prevent them from receiving a floor vote.

‘I Know Nothing’

“I know nothing,” he said.

Utah Senator Orrin Hatch, a senior member of the Finance Committee, was also unaware of any holds. “I hope they don’t have any on them,” he said.

The Senate’s Republican leader, Kentucky’s Mitch McConnell, declined to respond when asked about Goolsbee and Rouse. His spokesman, Robert Steurer, also declined to comment.

Bush’s last CEA chairman, Edward Lazear, lacked a fully operational council for most of his tenure, as the confirmation of his two deputies got bogged down in Senate politics.

“This was nothing personal, it was tit-for-tat,” said Lazear in an interview. “One of the R’s held one of their guys, so the D’s held some of our guys.”

Running a one-man CEA was “difficult, especially at a time when the economy was at a pretty hot issue,” he said. “It was not a good situation and I am sure it’s not a good situation for Austan or Ceci Rouse, either.”

One of his delayed deputies, Donald Marron, said he sympathized with Goolsbee and Rouse.

‘Doubly Frustrating’

“It’s doubly frustrating to be held up when we face such major economic challenges,” he said.

Goolsbee and Rouse shouldn’t “take it personally,” said Marron, who was eventually confirmed, 364 days after his nomination.

“You’ve already done your part, demonstrating that you are highly qualified to become CEA members,” said Marron, a former deputy director of the Congressional Budget Office. “Everything else is just politics.”

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To contact the reporters on this story: Hans Nichols in Washington at hnichols2@bloomberg.net; Lizzie O’Leary in Washington at loleary2@bloomberg.net;

To contact the editor responsible for this story: Jim Kirk at jkirk12@bloomberg.net