Clinton Expected to Announce Cabinet, Economic Posts

Pressing on with the delicate business of naming his Cabinet, President Clinton today is expected to nominate White House aide Alexis Herman to serve as Labor secretary and appoint Janet L. Yellen, a member of the Federal Reserve Board and a former UC Berkeley professor, as chairwoman of the White House Council of Economic Advisers, sources said late Thursday.

The selection of Herman, 49, an African American who was an initial favorite for the Labor post, would conclude a furious, behind-the-scenes struggle over the job that many had believed would go to Rep. Esteban E. Torres, a Democrat from Pico Rivera.

“The secretary of Labor’s main job is to protect and promote the interest of American workers,” said Ray Marshall, a former Labor secretary who named Herman to a job overseeing women’s issues during the Carter administration. “She knows how to do that and will hit the ground running.”

Yellen, a friendly and soft-spoken economist who generally has agreed with the interest-rate policies of Federal Reserve Chairman Alan Greenspan, would replace Joseph E. Stiglitz, a former Stanford University professor who will become chief economist at the World Bank. Clinton met with Yellen earlier this week and Thursday asked if she would be available for today’s announcements.

“She’s a very good economist and a good choice,” said Robert Pollin, an economist at UC Riverside, noting that Yellen’s expertise in labor and other issues would be a valuable tool in her new role advising the White House.

The president also is expected to announce a continuing White House role for his boyhood friend and former chief of staff, Thomas “Mack” McLarty, who had expressed interest in leaving for the private sector. McLarty, who has been serving as counselor to the president, will take on the new role of special envoy for Latin American affairs. He also will get a seat on the National Economic Council inside the White House.

Other announcements expected today are Clinton’s choice for secretaries of Transportation--with Rodney Slater, head of the Federal Highway Administration, said to be the front-runner--and Housing and Urban Development, a job believed likely to go to Andrew Cuomo, an official in the department who is a son of former New York Gov. Mario M. Cuomo.

In addition, Clinton is nearing decisions on Energy secretary, with Elizabeth Moler, head of the Federal Energy Regulatory Commission, mentioned most frequently. However, the Associated Press reported Thursday night that outgoing Transportation Secretary Federico Pena was getting the energy post.

The president may also announce other appointments within the White House, such as the expected promotion of aide Bruce Reed to the top role in domestic policymaking.

Of all the openings Clinton has had to fill since winning reelection, none has sparked as much competition among Democratic constituencies as the vacancy created by the departure of Labor Secretary Robert B. Reich.

For days, Torres has awaited word on whether he would get the call, his hopes backed by Latino groups. As Torres’ star seemed to rise, meanwhile, African American groups lobbied vigorously for Herman, director of the office of public liaison inside the White House, whose prospects were hurt by a lack of enthusiasm for her by organized labor.

On Thursday, the Rev. Jesse Jackson paid a visit to the White House to push for Herman.

But she also had backers in other places. “I think she would be a tremendous complement to the president’s Cabinet,” said Rep. Sonny Callahan (R-Ala.), who is from Herman’s hometown of Mobile. “Her credentials are truly outstanding.”

Callahan said that he has already contacted Senate Republican leaders to urge her confirmation.

The selection for Labor and other posts has been further complicated by complaints from some California officials, who have watched in dismay as the state’s presence inside the Cabinet has shrunk dramatically.

Golden State residents leaving the administration include Chief of Staff Leon E. Panetta, Secretary of State Warren Christopher, Commerce Secretary Mickey Kantor, Defense Secretary William J. Perry and National Economic Council Director Laura D’Andrea Tyson.

At the same time, some question whether a state that possesses one of the largest economies in the world needs to be counting heads inside the Cabinet. One White House aide said that the president focused so heavily on the state during the first term that a “California culture” has emerged inside the White House.

The choice of Yellen, a popular professor at UC Berkeley known for walking around campus in khaki pants and maroon sweaters, has been among the less controversial selections facing the president as he sought to balance competing interests while putting together a team with which he is comfortable.

In 1994, Clinton selected Yellen, 50, to serve on the Fed, where she was credited with elevating the level of discussion about interest rates, employment and inflation policies.

While many economists value the Council of Economic Advisers as an established channel for economic policy to the White House, some maintain that the Yellen appointment is of limited consequence, given the dominant influence enjoyed by Treasury Secretary Robert E. Rubin on administration economic matters and Clinton’s creation of the National Economic Council inside the White House.

“The Council of Economic Advisers--who cares?” asked one economist in New York. “Does anyone really listen to them?”

Times staff writers Faye Fiore and Stuart Silverstein in Los Angeles contributed to this story.