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Economic Adviser Pick Is Known as Labor Expert

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WASHINGTON — In tapping Alan B. Krueger on Monday to lead the Council of Economic Advisers, President Obama has picked an economist well known for his studies of labor markets just as the president is about to announce a renewed push for job creation policies as early as next week.

Doug Mills/The New York Times

President Obama with his nominee for Council of Economic Advisers, Alan B. Krueger, during a Rose Garden announcement, on Monday.

Among the stimulus policies Mr. Obama is considering is a temporary tax credit for employers adding to their work force, an idea that Mr. Krueger championed in his earlier stint in the administration. Mr. Krueger was an assistant secretary and chief economist at the Treasury Department for 17 months, before he returned to teaching at Princeton in 2010.

A more modest version of the hiring credit became law, but Congressional Republicans blocked its extension last year.

Mr. Krueger, if confirmed by the Senate, will find Republicans a force to be reckoned with against the sorts of ideas he is associated with, including a higher minimum wage. Republicans have taken control of the House since he left Washington, and party leaders say they will oppose further stimulus measures. Their focus is on spending cuts, despite widespread calls from economists, including the chairman of Federal Reserve, Ben S. Bernanke, for a more expansive fiscal policy in a period of weak economic growth and stubbornly high unemployment.

Mr. Obama, in a speech planned for next week, will call for both temporary tax cuts and spending measures to spur hiring in the short term, and also long-term steps to reduce spending and raise revenue once the economy fully recovers. But in nominating Mr. Krueger, with his expertise in policies that affect job creation, Mr. Obama passed over some economists better known for deficit reduction policies, including Alan J. Auerbach of the University of California, Berkeley.

The choice of Mr. Krueger more broadly reflects Mr. Obama’s desire to strike a balance between job creation and deficit reduction after months in which Congressional Republicans successfully forced action only on spending cuts. Mr. Krueger, who first joined the administration amid the recession, helped design other early stimulus proposals, including the “cash for clunkers” rebate for new-car purchasers, the Build America Bonds program to finance infrastructure projects and a credit fund for small businesses.

“As one of this country’s leading economists, Alan has been a key voice on a vast array of economic issues for more than two decades,” Mr. Obama said. “Alan understands the difficult challenges our country faces, and I have confidence that he will help us meet those challenges as one of the leaders on my economic team.”

The ability to win confirmation in the Senate was a consideration; Mr. Krueger was confirmed for his prior post with the Treasury. But the chairmanship of the Council of Economic Advisers is a higher position, and Republicans have become more aggressive about blocking nominees to demonstrate their opposition to White House policies generally. Mr. Obama’s pick for the commerce secretary, John E. Bryson, remains in limbo three months after his nomination.

If confirmed, Mr. Krueger, who turns 51 next month, would replace a longtime Obama adviser, Austan Goolsbee, who returned to the University of Chicago for the academic year. Mr. Krueger “is going to be able to hit the ground running immediately,” Mr. Goolsbee said. “And B, he’s a world-class, respected researcher on job market policies, job creation and things of that nature. So in that sense he’s a perfect match to the moment,” Mr. Goolsbee said.

Mr. Krueger would be the second former adviser to the Treasury secretary, Timothy F. Geithner, to take one of the four positions at the core of Mr. Obama’s economic circle; the other is Gene B. Sperling, a former Treasury counselor who replaced Lawrence H. Summers as director of the National Economic Council at the White House. That Mr. Geithner has two former underlings on Mr. Obama’s economic team is further evidence of his influence as the sole remaining member of the president’s original economic team.

It also reflects Mr. Obama wish for a collegial economic team after the fractiousness in his first two years, which were marked by tension especially between Mr. Summers and the former White House budget director, Peter R. Orszag. Then, Mr. Summers questioned the likely effectiveness and cost of the job credit proposal associated with Mr. Krueger, administration officials say.

Mr. Orszag was a student of Mr. Krueger’s at Princeton, where Mr. Krueger began teaching in 1987.

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