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In an administration that burned through barrels of midnight oil, Gene Sperling stood out as an extreme workaholic.His nighttime calls during the Clinton years were almost as legendary as those from the President himself. Sperling would often call domestic policy adviser Bruce Reed when Reed was reading his young daughter a bedtime story.
“In those days, a call with Gene was never short,” Reed recalls. “So sometimes I’d just hold the phone up to her ear and she’d listen to Gene talk” as she grew drowsy.
Those long hours definitely paid off: The 24/7 Sperling emerged as an architect of Clinton’s economic policies, later served as director of the National Economic Council, and was pivotal in hammering out budget deals in the late 1990s that led to the last federal budget surpluses in modern times. Yet when President Obama was searching for a replacement for Lawrence Summers to head the National Economic Council early this year, Sperling seemed very much the dark-horse candidate to return to a post he helped to invent.
With his economic team in disarray and under fire for being out of touch with average Americans suffering from massive unemployment, Obama was reported to be looking for a government outsider – probably someone from the business world who had enough stature to succeed Summers, a former Treasury Secretary, president of Harvard, and respected economics professor. Would Sperling, an unimposing, bespectacled Midwesterner who seems more comfortable behind the scenes than in front of a TV camera, fit the bill?
Apparently, Obama thought so. In early January he named Sperling as his new NEC director. Those who know Sperling say the choice was spot-on– exactly the right person Obama needed at this point in his presidency. And as a government shutdown looms, having a veteran of the 1995 face-off just steps from the Oval Office could also be a plus for the President.
Back to the Future
Sperling is a pragmatist with a social conscience–not unlike Obama— according to associates and budget experts. He’s doggedly inclusive, someone who will likely avoid the kind of frayed relations that existed among the White House’s previous economic gurus, including Summers, budget chief Peter Orszag, and Christina Romer, former head of the Council of Economic Advisers. Sperling is a skilled political and policy strategist and communicator. And he’s tenacious, but knows how to cut a deal – important traits at a time of mounting tensions over spending between the White House and the Republican-controlled House.
“Gene’s best and highest talent, I think, is an extraordinary ability to make the substantive policy arguments in a way that makes them intelligible and convincing to the message people and to the legislative people,” says Brad DeLong, an economics professor at the University of California-Berkeley who was a Treasury Department official under Clinton. “It is amazing to watch.”
“Gene has a full memory bank of what works and what doesn’t, lessons learned, and friends and allies he’s made along the way,” says Reed. Those skills came in handy for Obama last December in hammering out spending and tax deals with the Republicans. And they could help seal any deal reached in the jockeying over spending levels this year and long-term plans to bring down the deficit.
Sperling, 52, occupies the same West Wing real estate – second-floor office overlooking the Rose Garden – that he did in the Clinton administration. Some of his former comrades are around again, too. Sperling came to the White House the first time in 1993 with Jacob (Jack) Lew, who succeeded Orszag as head of the Office of Management and Budget, and Reed, who recently became Vice-President Joe Biden’s chief of staff after serving as staff director of the President’s fiscal commission. They were thirtysomethings then; now, they’re the graybeards of the place.
His Road to the White House
Sperling was raised in Ann Arbor, Michigan, where his tennis game– not his academic prowess-helped win a scholarship to the University of Minnesota. From there he went to Yale Law School, then to Wharton, which he abandoned without getting his MBA so he could dive into Democratic politics, first with the unsuccessful presidential campaign of Michael Dukakis in 1988. When ’92 came around, Sperling was offered a job as candidate Bill Clinton’s economic policy advisor. He hopped a jet to Little Rock and co-wrote Clinton’s manifesto, “Putting People First,” in a matter of gruelling days.
Clinton created the NEC by executive order less than a week after taking office. The council advises the President on U.S. and global economic policy. Robert Rubin was its first director, with Sperling serving as a deputy. He stayed when Laura Tyson took over. Early on, Sperling earned a reputation as determined, committed, and persuasive, recalls DeLong, a prominent blogger on economic policy. Case in point: his success in getting more people covered by a tax credit for the working poor in Clinton’s ’93 economic plan.
“The way he got the [Earned Income Tax Credit expansion] into the 1993 legislation,” says DeLong, “over some resistance from [then-Treasury Secretary] Lloyd Bentsen, who thought it was too expensive, was very impressive.”
Sperling won the top slot in 1997, elevating his role in that year’s monster piece of legislation, the Balanced Budget Act. The final product was indeed a bill to eliminate the deficit. But it also included a child tax credit, the State Child Health Insurance Program, and other initiatives liberal Democrats could feel good about – thanks in no small part to Sperling’s persistence.
That was his world view in action: “I think of myself as a progressive who’s a realist about the importance of fiscal discipline,” Sperling says, which prompts a lot of angst on his part. “If you’re not deeply agonized about both the danger of excessive debt and the risk of hurting millions of people by cutting the debt in the wrong way, then you’re not doing your job.”
Never Really Unplugged
An alliance with Goldman Sachs was the closest Sperling came to making real money in the post-Clinton years. It wasn’t the usual investment banking job: Goldman wanted him to help direct its charitable giving, which led to a project providing job training for poor women around the globe (he made nearly $900,000 in a year for that effort). Separately, he founded and directed the centre for Universal Education, which focuses on educating children in developing or war-torn countries. Sperling’s 2005 book, The Pro-Growth Progressive, chided some liberal economists for not being attuned enough to the adverse impact of large deficits, while also proposing initiatives to help workers at risk of being displaced by global economic forces.
Sperling never really unplugged from public service, though.
“For all the years we did not control the White House, lots of Gene’s colleagues went into the private sector and did very well for themselves,” says a high-ranking House Democratic aide who works on budget matters. “Gene, to his credit, was a very frequent resource for us, we tapped his skills and his knowledge a lot.” Along the way he also got married, to a writer he met while consulting for the TV show The West Wing; he and his wife now have two children.
When presidential politics beckoned again, Sperling signed up with Hillary Clinton’s 2008 campaign and then shifted to Obama’s camp after the primaries. Partly because he didn’t have a long history with Obama, he found in January 2009 that all the best seats at the table of the new administration were taken. Instead he accepted an untitled position as a senior advisor to Treasury Secretary Timothy Geithner. He came aboard amid the worst recession–and banking and housing crisis–of modern times, with unemployment hovering near 10 per cent and a deficit well above $1 trillion annually.
“If your life is devoted to economic policy, you don’t want to be sitting on the sidelines during the worst economic crisis in generations,” Sperling told The Fiscal Times. “It was an extraordinary moment,” and it put him in the centre of efforts to stabilise the economy, bail out the auto industry, and create a stimulus package.
“We thought we’d inherited a very bad hand in ’93,” Sperling adds. “But what felt like a pair of deuces then feels more like three kings looking back. What President Obama inherited in 2009 was just extraordinary.”
The announcement of Sperling’s name in January as new head of the NEC brought mostly positive comments, including from Republicans who have worked with him over the years. “People here on our side feel they can talk with him and he’ll hear us out,” says a longtime GOP Senate staffer. “He has an easygoing personality, he tries to reach out.”
He also “thinks outside the box a bit,” the staffer adds. “And he’s quietly persistent.” Example: the passage last year of a $30 billion fund for community banks to lend to small businesses. “That really happened because of Gene, he was pushing it for months,” says the staffer. “He worked it and found dance partners” — two Republicans who gave Democrats the votes they needed.
Another example: Sperling’s role in difficult negotiations over the package to extend the Bush-era tax cuts late last year. Sperling pushed hard for the deal to include a “stimulus” package of sorts, including (to name the two items Sperling is most enthused about) a year-long Social Security payroll tax cut and a provision that allows, in 2011, the 100 per cent write-off of certain newly purchased business assets.
“We felt strongly that was our shot to do something for the economy,” says Sperling., who had been advocating the payroll-tax cut at the White House for months. He jokes that the tax-cut talks, led by Biden, may have been his “tryout for the NEC job.” He got the offer despite grumblings from some in his own party over the administration’s decision to give in to the GOP on extending cuts for upper-income taxpayers.
Sperling brings a different set of attributes to the job than his predecessor. Summers is a bigger presence, a renowned economist who has the gravitas that comes from having had held major positions in academia and the Cabinet. Sperling’s credentials as an economist don’t even include the requisite PhD.
Another difference, DeLong says: “Gene is a consensus-builder. Larry is someone who will try to get to the right answer without really caring whether others are brought along.” A Senate Democratic aide agrees, saying: “Gene is probably more likely to find a path to agreement” than Summers.
It would be no surprise to see Sperling’s knack for bridging differences deployed as the tough budget talks between the White House and congressional leaders draw toward a finale. Of course, it’s sort of déjà vu all over again for him. “It does have a little bit of that 1995 feeling,” he says, when the Clinton White House’s talks with the new Republican House majority hit a wall, causing a shutdown.