Sen. Elizabeth Warren (D-Mass.) and other progressive lawmakers are maintaining pressure on Raimondo in letters criticizing her employment of big technology alumni at Commerce and her remarks on tech regulation, among other complaints. Warren’s allies said they expect public sector labor unions, some of which have clashed with Raimondo for years, to try to steer the president away from her for the Treasury job once Yellen’s fate becomes clearer.
Progressives say they don’t want a return to fights over Wall Street regulation and stimulus-spending policies that prevailed during the Obama administration — and where liberals were often on the losing side.
“The Obama economic team focused too much on trying to placate elites and too little on trying to understand the economic pain and anger coursing through the country, and that combination helped fuel right-wing populism,” said Dan Geldon, a consultant and former chief of staff to Warren. “A lot of insiders like Raimondo. But putting her at Treasury risks that same dynamic heading into 2024.”
The possible choice of a new Treasury secretary poses a major dilemma for the White House, which has maintained detente with the Warren-led progressive wing. With a possible recession looming and the GOP ready to make gains on Capitol Hill, choosing Raimondo — a former Rhode Island governor and venture capitalist — could signal that Biden wants a moderate, politically minded Treasury boss with ties to both Republicans and Wall Street.
Yellen, a preeminent academic economist and onetime Federal Reserve chair, has not relished being pressed into the political arena, where she has drawn flak from Republicans over spiraling inflation and Biden’s spending policies. But she says she plans to stay on as secretary.
Raimondo, despite criticism from the left, has championed Biden’s new industrial policies like the CHIPS for America Act and Inflation Reduction Act. Together, those laws contain hundreds of billions of dollars in incentives for domestic manufacturing, a progressive priority.
Said a Commerce Department spokesperson: “She negotiated bipartisan provisions to expand affordable internet to all households, she was an essential negotiator for the bipartisan CHIPS bill” and is “a forceful proponent of President Biden’s message against trickle-down economics.”
But some progressives say Raimondo is too close to corporate leaders and helps them shape policies in forums like the Indo-Pacific Economic Framework, a pact that Biden founded as a counterweight to China where they fear she will try to curb efforts to regulate American tech giants. They distrust her on tariffs, saying she failed to do more to prevent Biden from waiving penalties on solar imports in June, even though that undermined her own agency’s trade authority. And they object to her track record in Rhode Island, where they say she moved to cut the pensions guaranteed to public employees like firefighters and teachers to pay for other programs.
“I don’t buy it,” Lori Wallach, a trade activist, said of Raimondo’s progressive economic rhetoric.
“In numerous forums, Secretary Raimondo and her staff pushed the agenda of big tech to rig trade agreements in their favor,” Wallach said.
Jeff Hauser, executive director of the Revolving Door Project, a group that seeks to expose corporate influence in government, and author of a recent blog post attacking the former governor’s policies, said: “Raimondo’s record as a financier and in Rhode Island politics is very much at odds with the modern Democratic Party. On issues such as trade, financial regulation, and tax collection, key elements of the Democratic coalition are likely to balk at the idea of a Treasury Secretary Raimondo.”
Raimondo, Yellen and Warren all declined to comment for this story.
Yellen has surprised supporters by wielding less clout in the West Wing than her recent predecessors did, according to people familiar with the matter. In key areas — domestic tax policy, the debt ceiling, China — her department has often taken a back seat to White House or other administration officials, according to current and former administration people, those close to the White House and others who know her.
A year ago, for example, the White House asked Raimondo to make calls to top CEOs to offer reassurance on a potential deal in Congress to raise the debt limit, according to a former Treasury official.
“That is 100 percent a Treasury Department piece of business,” the former official said.
Other candidates mentioned for the job include Deputy Treasury Secretary Wally Adeyemo; former White House Covid-19 response coordinator Jeff Zients; onetime Deputy Treasury Secretary and ex-Fed Governor Sarah Bloom Raskin; current Fed Vice Chair Lael Brainard; and even Warren herself, who wanted the job in the past.
Adeyemo, while not a hyper-progressive himself, is friendly with Warren and would be preferable to Raimondo for many on the left. But he is just 41 and, while widely liked, is not viewed inside the White House as a probable successor.
Raskin, a leader on climate issues, is popular among progressives. But the White House is not likely to turn to either Warren, who would face a wall of opposition from Republicans for confirmation, or to Raskin, who was forced to withdraw her nomination for a Fed seat in March after facing a backlash from GOP lawmakers and Sen. Joe Manchin (D-W.Va.).
Yellen has generally enjoyed a good relationship with progressives. They supported her appointment as the first female Treasury secretary, and she spoke often with Warren when she was Fed chair. While some on the left view her as overly concerned with fiscal deficits, she’s an academic who specializes in labor issues and has rarely drawn much blowback from them.
The Warren-Raimondo rivalry, however, has sometimes spilled out into the public. During a Senate Finance Committee hearing this spring, Warren took issue with Raimondo’s priorities in negotiating the administration’s Indo-Pacific trade initiative, saying the Commerce secretary would look to “boost profits for giant corporations.”
After the hearing, Warren told POLITICO that the Biden administration should strip Raimondo of her negotiating authority in the trade talks and hand the entire operation over to U.S. Trade Representative Katherine Tai, a progressive favorite. Tai said she was happy to work with Raimondo, though the two have also clashed behind the scenes.
Raimondo’s staff and supporters bristle at those criticisms, pointing to her leading role in getting the CHIPS Act — and its $52 billion in semiconductor subsidies — passed. And they say she wants the government to go even further, making investments in child care, education and health care that were left out of legislation over the summer.
Americans have experienced “a long time of prioritizing shareholder value, profitability and ruthless efficiency and disinvesting” in schools and other social services, Raimondo said in comments last month at the Brookings Institution. “It’s been nothing but decline for decades.”
Commerce officials say Raimondo “shares President Biden’s philosophy on Big Tech” that leading companies need to be more heavily regulated. “There isn’t an inch of daylight between his agenda and her work to implement it,” the agency spokesperson said.
Raimondo emerged as a Biden favorite early on and was vetted as a possible running mate in the 2020 campaign. The president and his transition advisers then considered her for several Cabinet jobs including Treasury and Health and Human Services. In nominating her for Commerce last year, Biden called Raimondo one of the “most effective, forward-thinking governors in America.”
Raimondo’s position could be bolstered by her personal relationship with Biden. When the president asked her to take the Commerce job, he spoke by phone for five minutes to Raimondo — and for 20 minutes to her school-aged son, Tommy, to reassure him about the move to Washington, according to a person close to Raimondo.
Senior aides viewed the call as a signal of just how highly Biden thinks of Raimondo and how much he wants to see her in a number of senior roles, including potentially Treasury secretary.
She is also highly thought of in Biden’s inner circle, which includes chief of staff Ron Klain and National Economic Council Director Brian Deese, who speak of her strong communications skills and ability to get things done.
Inside the White House, the betting remains about even money that Yellen will ultimately decide to leave after the midterms.
A Treasury spokesperson noted that the secretary has repeatedly said she intends to remain, including during a recent MSNBC interview. “I plan to stay,” Yellen said. “I am very excited about the president’s economic program. There is a lot to implement.”
Still, three people in the administration who are admirers of Yellen said the 76-year-old secretary may decide to depart, especially if Republicans take control of at least one side of Capitol Hill, promising a parade of investigations and oversight hearings.
“Janet is making plans to stay and has plenty of big stuff to work on,” said one person close to her. “But she doesn’t love the idea of being shit on by a Republican House or Senate. She doesn’t want to be bullied out, but she could also change her mind and go.”
If Yellen does go, progressive groups are not confident they could convince the White House to back away from Raimondo. Nor do they believe they could forestall confirmation, given that she would likely win a number of GOP votes.
Their larger point is that while the White House has kept Warren on its side and picked several important financial services regulators and senior White House staff from her world, choosing Raimondo for Treasury would be seen as a shift to the middle.
Raimondo’s record, while troubling to the left, has earned her high praise among business executives.
“Secretary Raimondo has a passion for achieving results,” Goldman Sachs CEO David Solomon said in an interview. “Working with her on small business initiatives, before and during the pandemic, I am always struck by her relentless drive, her thoughtful pragmatism and skill in working with people.”
Yet Helen Brosnan, executive director of Fight Corporate Monopolies, another group that monitors corporate influence in government, argued that Raimondo has often given priority to “powerful CEOs over working people.”
Brosnan said her group was not pushing any specific alternative to Raimondo should Yellen leave. “We are just on high alert to be in opposition to any folks like her.”