Romer to Leave Council of Economic Advisors
On Thursday night, the White House announced that Dr. Christina Romer, chair of the Council of Economic Advisors, will leave September 3rd to return to the University of California at Berkley. Some are speculating Friday’s announcement of the 9.5% July unemployment rate may have contributed to her resignation since Romer predicted the 2009 stimulus bill would help keep the unemployment rate under 8 percent. Sources indicate that Council of Economic Advisors member Austan Goolsbee appears to be the front-runner to succeed Romer as Chairman. There is also speculation that Romer is under consideration to replace Janet Yellen as president of the Federal Reserve Bank of San Francisco. Yellen was recently nominated to be Vice Chairman of the Federal Reserve.
July Jobs Report Released
On Friday, the Department of Labor released the July jobs report showing that nonfarm payrolls declined by 131,000 jobs and the unemployment rate remained steady at 9.5 percent. 71,000 private-sector jobs were added last month while 143,000 temporary workers on the 2010 census were let go. The June data were revised down significantly showing that payrolls fell by 221,000, more than the 125,000 drop previously reported, as only 31,000 jobs were added in the private sector. Taking into account revisions to prior months this year, the U.S. economy added an average of less than 100,000 jobs a month in the first seven months of 2010.
Tax Cut Showdown In September
On Wednesday, Senate Majority Leader Harry Reid (D-NV) announced that the Senate would vote on a package of expiring tax cuts when the Senate returns in September. It remains unclear whether Senate Finance Committee Chairman Max Baucus (D-MT) will hold a committee markup on the bill or it will be brought directly to the floor. Moderate Democratic Senators Kent Conrad (D-ND) and Evan Bayh (D-IN) have called for an extension of all the “Bush” tax cuts, including those benefiting individuals earning more than $200,000 and families earning over $250,000 annually. If the Senate passes such an extension, it would likely set up a showdown with the House where a majority of Democrats do not want to extend tax cuts for all individuals. Some Democrats on the Ways and Means Committee have discussed a proposal to repeal the Bush tax cuts for the top tax brackets but delay the collection of those revenues until 2012.