Senate GOP squeezes a top Biden economic aide over early inflation missteps

Jared Bernstein faced spirited pushback Tuesday from GOP senators as the progressive economist appeared for his nomination hearing to head President Biden’s Council of Economic Advisors (CEA).

The hearing touched on a range of subjects from energy to tax policy, but most often turned to the Biden administration’s record on inflation — and the central role Bernstein, who is currently a member of the White House advisory group, played in shaping and communicating that policy in recent years.

“It is mind boggling to me that inflation is at a 40-year high and yet the person who advised the president that inflation would be transitory is the very same person the president has nominated to be the chair of the CEA,” said Ranking Member Tim Scott (R-SC) as the hearing kicked off.

“It just doesn't make sense,” the senator, and possible presidential candidate, added.

The contentious back and forth over inflation — which came up repeatedly during the two-hour session — is just the latest example of the bumpy ride that Biden’s nominees have faced in recent weeks as the president seeks to fill out his administration for the last 20 months of his term.

While Bernstein is still seen as likely to eventually win confirmation, another Biden nominee is expected to be under an even bigger microscope later this week when Julie Su, Biden’s nominee for Labor Secretary, appears before another Senate panel.

A focus on the word ‘transitory’

Bernstein appeared on Tuesday alongside three additional Biden nominees who faced their own critical questioning, including Ron Borzekowski, nominated to be Director Of Financial Research at Treasury, and two nominees for posts at the Department of Housing and Urban Development.

The questioning for Bernstein often focused on officials use of the word "transitory" and what is seen as a downplaying of the threat in recent years as inflation shot up.

“That was an ambiguous and unclear word that was poorly chosen,” Bernstein acknowledged Tuesday under questioning from Sen. John Kennedy (R-LA), adding that it was “temporally ambiguous.”

Later in the hearing, Sen. Katie Britt (R-AL) followed up on the issue further telling Bernstein that “for many, the word transitory means temporary: it means it would be short lived. That certainly is not what we’ve seen.”

In April 2021, Bernstein used the term repeatedly in a blog post and often underestimated the staying power of inflation.

For example, during a Yahoo Finance Live appearance in December 2021, he cited outside models to note "they all have inflation growing about half as fast a year from now.” But in fact, inflation continued to rise in the months that followed, peaking at over 9% in 2022.

“Would you agree it’s lasted longer than you anticipated since you first used that term?” Britt asked Tuesday.

“Yes," Bernstein said.

A defense from Democrats

President Joe Biden announced earlier this year that Bernstein was his pick to chair the advisory group. If confirmed, Bernstein would replace outgoing chair Cecilia Rouse.

A well known figure in Washington who has been a top Biden economic advisor stretching back to the Obama administration, Bernstein is still seen as likely to be confirmed.

Democrats on the panel strongly defended him Tuesday, often citing a letter from seven former CEA chairs — from both Republican and Democratic administrations — who supported Bernstein.

The panel’s chairman, Sen. Sherrod Brown (D-OH), also seemed to allude to the debate over inflation when he opened the hearing by touting Bernstein’s willingness to change his mind.

"That kind of openness to ideas from anyone, of any party or point of view, is what we should all want in an economic leader," he said.

Su, meanwhile, is facing much longer odds ahead of her hearing on Thursday with Sen. Joe Manchin (D-WV) already expressing doubts about her.

Ben Werschkul is Washington correspondent for Yahoo Finance.

Click here for politics news related to business and money

Read the latest financial and business news from Yahoo Finance

Download the Yahoo Finance app for Apple or Android

Follow Yahoo Finance on Twitter, Facebook, Instagram, Flipboard, LinkedIn, and YouTube