Kudlow emerges as leading candidate to replace Cohn—at least for now

- Maret 12, 2018

Donald Trump’s search for a new top economic policy adviser is playing out the way most things do in this White House – with the president sending mixed signals, leaving those around him struggling to keep up.

By Monday afternoon, at least two candidates to take over for Gary Cohn as director of the National Economic Council – deputy NEC director Shahira Knight and White House director of strategic initiatives Chris Liddell – appeared to be out of the running entirely, while outside adviser Larry Kudlow’s prospects had greatly improved.

After souring on Kudlow because he publicly criticized the president’s decision to impose steep tariffs on steel and aluminum imports, Trump is now leaning heavily toward choosing the economic analyst and former Reagan administration official, according to two people familiar with the situation. One person said Trump was close to settling on Kudlow, but another cautioned that the situation could turn on a dime.

A White House spokeswoman did not respond to a request for comment on Monday night.

Meanwhile, some White House officials said they were unsure as of Monday afternoon exactly what the president would decide – or when. Aides have grown accustomed to working for a president who often makes decisions without warning. Trump abruptly announced that former Homeland Security Secretary John Kelly would become his chief staff via Twitter last summer.

The president’s revived interest in Kudlow to some extent reflects the White House’s limited options. Economists have widely panned Trump’s tariff decision and some potential picks are hesitant to join an administration defined by chaos and facing an expanding special counsel investigation.

In the end, people close to both men said the final decision could come down to chemistry, a factor that bodes well for Kudlow. Trump feels comfortable with Kudlow, a CNBC contributor whom Trump has known for years. One person familiar with the issue said the president could simply call Kudlow and offer him the job, without bothering to go through a formal interview process.

“He brings a couple big assets to the table,” said conservative economist Stephen Moore. “One, he is a great communicator of economics, one of the best in the country, especially for the free market ideas that Trump is mostly espousing. And two, Larry has really great relationships with members of Congress certainly on the Republican side but also among Democrats who may disagree with him but like him.”

Moore added that even though Kudlow has argued against tariffs and other protectionist policies, he would back the president’s policies once they are finalized. “That’s certainly a condition of the job,” Moore said. “If you work for the president you have to stand by him.”

But Kudlow has detractors in the administration. One White House official noted that if Kudlow didn’t have a personal relationship with the president, he likely wouldn’t get past the administration’s informal personnel vetting standards, which have been used to sideline potential nominees who have been critical of Trump in the past.

Kudlow knocked Trump in 2016 after an audio recording was released in which Trump bragged about groping women during an appearance on “Access Hollywood.”

“The ‘vile’ tape, as I call it, is inexcusable. I was absolutely furious,” Kudlow said on CNBC at the time. He went on, “I hope Mr. Trump gets his act together. But if he continues to drop into these rabbit holes, I’ll write in Mr. Pence.”

People close to Kudlow said he’s interested in succeeding Cohn and would accept the job. Kudlow declined to comment.

Unlike Cohn, who took the job with the task of pulling off tax reform and with the widespread presumption that he would be named chair of the Federal Reserve, the next NEC director won’t have a clear policy goal or an obvious promotion on the horizon.

Instead, it appears Trump’s focus is shifting toward policies backed by his trade adviser Peter Navarro — who himself wanted the NEC job — and Commerce Secretary Wilbur Ross.

In the coming weeks, Trump is expected to announce the results of the administration’s probe into allegations that China does not adequately protect intellectual property rights. Administration officials and others closely tracking the issue said the administration is weighing tariffs on more than 100 Chinese products, in addition to possible investment restrictions.

A free-trader like Kudlow at the NEC would also have to fight to protect the North American Free Trade Agreement and possibly try and find a way for the administration to slip back into the giant Trans-Pacific Partnership trade deal.

But NEC staffers have made it clear that they would revolt – and even quit – if Trump taps White House trade adviser Navarro, an avowed trade hawk who has clashed with Cohn, for the job. And Navarro is no longer considered a top candidate.

Cohn announced his resignation on March 6 amid the fight over the steel and aluminum tariffs. He was supportive of promoting Knight, a former lobbyist who played a central role in writing Trump’s tax plan, but she has since told friends she’s not interested in the job and may leave White House altogether in the coming months. Cohn has also been supportive of Kudlow getting the job.

Aides said Monday that Liddell, a White House aide and ally of Trump’s son-in-law Jared Kushner, was no longer a leading candidate for the position, even though the president was eyeing him for the role as recently as this weekend. His standing fell rapidly after the Wall Street Journal published a scathing editorial about him on Sunday.

Liddell’s candidacy was also poorly received by some inside the administration who feared he wouldn’t be a formidable enough foil for Navarro. “He’s just a wild card,” one senior administration official said of Liddell. “I really don’t know what to expect.”

So on Monday the spotlight returned to Kudlow, who has many of the attributes Trump likes. He’s well-known, smooth on television -- and, for now at least, his sharp criticism of Trump’s policies in recent weeks appears to be a side note.

“This is someone who the president really trusts” despite his criticism of some of Trump’s policies, said FreedomWorks president Adam Brandon. “He’s a person who can get out on television and explain pro-growth economics. Larry is the absolute perfect person to deliver that message.”


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