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Administration shakeup - Staffers Resign
« on: Dec 6th, 2002, 4:48pm » |
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O'Neill, Lindsey resign
Treasury secretary, top econ adviser leaving as Bush economic team house cleaning continues.
December 6, 2002: 1:13 PM EST
NEW YORK (CNN/Money) - U.S. Treasury Secretary Paul O'Neill and Larry Lindsey, the White House's top economic adviser, both resigned Friday, continuing the house cleaning of the Bush administration's economic team.
No successors have been announced. Senior administration officials told CNN that both men were asked to resign by the White House. Presidential spokesman Ari Fleischer wouldn't comment directly when asked if the two were forced out, saying only that each had resigned.
"My economic team has worked with me to craft an economic agenda that helped lead the nation out of recession and back into a period of growth. I appreciate Paul O'Neill's and Larry Lindsey's important contributions to making this happen," said Fleischer, reading a statement from Bush. He said that Lindsey had expressed interest in returning to the private sector and that O'Neill wanted to work to improve health care and education in the Pittsburgh area.
Fleischer would not directly answer a question of whether the President thought the change in his economic team would help spur growth for the nation's economy.
"I think it's fair to say the president looks at the economy as a matter that's bigger than any one person or any one expert," Fleischer said. "
O'Neill, the former CEO of Alcoa, and Lindsey, a former Federal Reserve Governor and architect of the tax cut plan President Bush ran on in 2000, are the second and third major members of the administration's economics team to announce a departure in the last four weeks. Securities and Exchange Commission Chairman Harvey Pitt submitted his resignation on election night.
Speculation on a successor for O'Neill includes outgoing Sen. Phil Gramm, R-Texas, and discount brokerage founder Charles Schwab, while Lindsey is seen being succeeded by R. Glenn Hubbard, chairman of the White House Council of Economic Advisers, or Harvard University economist Martin Feldstein.
O'Neill's departure has long been predicted. He is generally seen as not being able to get along with Republicans in Congress, as well as not having the support of Wall Street.
"O'Neill's gaffs have hurt him. There aren't a lot of Republicans on the hill who like him. But he seemed to have the President's confidence," said Greg Valliere, chief political economist for Charles Schwab Washington Research Group, recently, before his departure was announced.
Lindsey was also widely expected to leave the administration. The Washington Post reported in early November that Lindsey, the director of the National Economic Council, was making subtle inquiries about returning to private sector work on Wall Street, and that his staff was looking for positions on Congressional staffs.
The announcements came after news that unemployment rate in November is at an eight-year high, highlighting continued problems in the economy. The value of the dollar, already lower compared to other currencies, fell further in the wake of the news announcement. Stock markets opened lower after the O'Neill announcement, but turned flat after the Lindsey resignation announcement followed.
"O'Neill has been more optimistic about the economy and resistant to additional stimulus, so I suppose one could read between lines that he was losing that battle, and the administration is more likely to propose aggressive stimulus now," Alan Levenson, chief economist for T. Rowe Price Associates, told Reuters.
O'Neill's letter of resignation to President Bush was brief and gave no reason for the departure.
"I hereby resign my position as Secretary of the Treasury. It has been a privilege to serve the Nation during these challenging times," said the letter. "I thank you for that opportunity. I wish you every success as you provide leadership and inspiration for America and the world."
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