WASHINGTON – President Barack Obama nominated longtime adviser Jason Furman to be his new chief economist on Monday, elevating a former campaign aide and Clinton administration official to oversee an agency with wide influence over U.S. economic policy.

Furman will replace economist Alan Krueger as chair of the White House Council of Economic Advisers (CEA). Krueger is returning to his post as a professor at Princeton University, from which he has been on leave.

Furman, a father of two who holds a Ph.D in economics from Harvard University, helped create the economic stimulus package that dominated Obama's first year in office and also advised on the formulation of the president's signature healthcare reform act, tax policy, and budget talks with U.S. lawmakers.

"When the stakes are highest, there's no one I'd rather turn to for straightforward, unvarnished advice," Obama said of Furman during a ceremony at the White House, speaking to an audience of top advisers, other economists and family members.

"He's worked tirelessly on just about every major economic challenge of the past four and a half years, from averting a second depression, to fighting for tax cuts that help millions of working families make ends meet, to creating new incentives for businesses to hire, to reducing our deficits in a balanced way that benefits the middle class," Obama said.

The president further filled out his economics advisory panel by naming high-profile University of Michigan labor economist Betsey Stevenson as a member of the three-person council. Stevenson is a former chief economist at the Department of Labor who has drawn attention for her work on the economics of the family.

Furman served as special assistant to President Bill Clinton at the National Economic Council from 1999-2000 and also did a stint at the World Bank. He has advised Obama since his 2008 presidential campaign.

"He is brilliant, works harder than anyone I know, and is incredibly influential - both inside the White House and with Congress," said Christina Romer, an economics professor at the University of California, Berkeley, and a former chair of the CEA under Obama.

"He is a somewhat unusual candidate for CEA chair, but for the current environment, he is perfect. He will absolutely be influential and will ensure that the careful economic analysis CEA can provide is front and center in policy discussions."

'Rockonomics'

Furman's policy background contrasts with the academic background that many of his predecessors in the job have had. His appointment could signal a stronger role for the CEA within the administration.

Furman is currently assistant to the president for economic policy and principal deputy director of the White House National Economic Council (NEC), which is run by Gene Sperling, and was an economist in the Clinton administration.

When former NEC head Larry Summers left the administration at the end of 2010, Furman was considered a possible replacement, but the post went to Sperling.

The CEA advises the president on domestic and international economic policy based on data and economic research. The chairman is a cabinet member and requires Senate confirmation.

Obama urged the Senate to confirm Furman quickly.

The president also poked some fun at Krueger for his interest in the economics of rock and roll music.

"Now that Alan has some free time, he can return to another burning passion of his - 'Rockonomics,'" he said.

"This is something that Alan actually cares about - seriously, on Wednesday he's giving a speech at the Rock and Roll Hall of Fame. He's got a T-shirt under his suit with a big tongue sticking out," Obama said, prompting Krueger to unbutton his jacket and feign a move to undress in the White House state dining room.

"Don't show it," Obama urged, prompting laughter and applause from the audience.

And while Krueger may have an interest in popular music, the other economist the president named to serve on the CEA - the University of Michigan's Stevenson - has demonstrated a strong grasp of popular media. Stevenson has amassed more than 12,000 followers on Twitter with a stream of pithy remarks and is a frequent commentator on television, radio, and in print.