The Troika Strikes Back

With a raging virus holding back the economic recovery and a return to normalcy, much attention has focused on President Biden’s pick for his core economic team. Janet Yellen, former chair of the Federal Reserve, is slated to be the U.S. Treasury Secretary. The Treasury Secretary is a prominent cabinet member who is typically seen as the president’s economic spokesperson. Cecilia Rouse, a Princeton labor economist, would become head of the President’s Council of Economic advisers (CEA). The CEA is akin to the White House’s internal think tank, often filled with PhD-trained economists who take temporary leave from academia to work at the White House. Their responsibilities include combing through policy proposals, crunching large datasets, and briefing the president on an array of topics ranging from economic stimulus to education programs and healthcare reform options. Lastly, Neera Tanden, currently head of a DC-based think tank, is the nominee for the Director of the Office of Management and Budget. The OMB helps shape the president’s budget priorities, and, by extension, administers the budget across the massive U.S. federal government, including investments in vaccine research and public health programs. In some ways President Biden’s choice for his team is groundbreaking while in other ways it’s rooted in tradition.

The Troika: Heads of the US Treasury Secretary, Council of Economic Advisers, Office of Management & Budget

No doubt the pandemic and the economy are top of mind for the new administration. That’s part of the decision to nominate these three candidates with gravitas, knowledge and policy experience. It would be the first time that a woman or a minority would hold any of those positions. But it’s no coincidence that these three roles are mentioned in the same breadth. The U.S. Treasury Secretary, the chair of the Council of Economic Advisers and the OMB director make up the Troika, a body of advisers who help the president plan, formulate and execute their economic agenda.

A loosely defined group, the Troika was likely introduced during the Bill Clinton White House, when the group of advisers closely coordinated on important issues such as debt reduction, healthcare reform, global trade, and financial crises in emerging markets like Southeast Asia and Latin America. How impactful the Troika is depends on their relationship with the president, their personality, and the events facing the country.

This is the theme of my research from the past few years which informs my book, “The President’s Brain Trust. It’s a fascinating look at presidential advisers as core components to any White House, from George Washington’s cabinet to Franklin Delano Roosevelt’s network of law professors. Each president picks their own team that would serve as an extension of the White House brain. The makeup and demographic of the chief executive’s advisers have evolve remarkably since George Washington’s first cabinet, evident by the recent selection by President Biden. Under George Washington, Alexander Hamilton was the sole member of the White House economic team who performed the work of a full size team, just as the new country emerged from a revolution. There was no Troika. A formal federal budget did not exist nor was there a central bank. There were no P.h.d economists who crunched forecasts and complex scenarios like the impact of vaccines on a global pandemic. What a remarkable change!

Alexander Hamilton, U.S. Secretary of Treasury under George Washington, was the ‘original member’ of the Troika