- The Washington Times - Thursday, December 12, 2002

White House strategist Karl Rove sent out word yesterday that President Bush would name Stephen Friedman to be his economic adviser, despite conservative complaints that the New York investment banker was not a committed tax-cut advocate.
But Stephen Moore, head of the Club for Growth, who is leading an intense lobbying drive to fill the post with a prominent tax-cut champion, said yesterday, "It is not a done deal. First, they were going to name Friedman on Monday, then they delayed it. They've left him dangling. There's a lot of internal scrambling going on in the White House over this.
"Friedman should just withdraw his name at this point, given the controversy that's developed."
A Republican member of Congress was questioning why Mr. Friedman, the vice chairman of the Concord Coalition, which bitterly fought Mr. Bush's $1.35 trillion tax-cut plan, was chosen over much stronger tax-cut advocates.
"There is no shortage of talent and certainly no shortage of pro-growth proponents whom the White House could have selected," said Rep. J.D. Hayworth, Arizona Republican.
Mr. Hayworth, who sits on the tax-writing Ways and Means Committee, said he found the White House's choice "surprising, to put it diplomatically." But he also said that "this is a president who is perfectly comfortable with conflicting advice and who then makes up his own mind."
Still, "the delay [over Mr. Friedman] speaks for itself," he added.
Republican sources said yesterday that some in the White House were having second thoughts about putting the former co-chairman of the Wall Street firm Goldman Sachs in such an influential policy post, though an administration official denied this yesterday.
Mr. Rove, the president's political adviser, has been working the phones all week to stem the anti-Friedman drive and has persuaded some top conservative leaders that Mr. Friedman will be a faithful advocate of the president's upcoming tax-cut proposals.
One of the people Mr. Rove called this week was Richard Gilder, co-chairman of the Club for Growth. After hearing Mr. Rove make his case, Mr. Gilder said, "'Well, then the president is going ahead with him?' Rove replied, He is,'" Mr. Moore said.
Although Mr. Rove did not win over Mr. Gilder's approval, he did persuade former U.S. Chamber of Commerce economist Richard Rahn that Mr. Friedman had changed his mind about the value of tax cuts to boost economic growth.
"I am told that during the vetting process, the White House became convinced that Friedman understood growth to be the key to reducing deficits, and that the right tax cuts increase growth," Mr. Rahn wrote in the Wall Street Journal on Tuesday.
Conservative leader Grover Norquist, president of Americans for Tax Reform, also is defending Mr. Friedman.
"I've talked with the White House and I've been assured that Friedman is pro-tax cuts and pro-growth and that he takes the president's approach on deficit reduction and reining in spending," Mr. Norquist said yesterday.
Nevertheless, Mr. Friedman has been stuck in political limbo since Monday, when Mr. Bush named CSX Corp. Chairman John W. Snow to be his Treasury secretary but held off naming Mr. Friedman to run the National Economic Council, which coordinates economic policy.
The White House said the delay was caused by questions over Mr. Friedman's complicated finances. But other sources said that Mr. Moore's aggressive lobbying offensive, which included Jack Kemp, the Wall Street Journal's editorial page, the National Review, Wall Street economist Larry Kudlow, and other foot soldiers in the conservative community, caught the president's advisers by surprise.
Besides Mr. Rove, Mr. Friedman has some powerful advocates in the White House, including Deputy Chief of Staff Joshua B. Bolten, who has worked with Mr. Friedman at Goldman Sachs.
If appointed by Mr. Bush, Mr. Friedman would replace Lawrence Lindsey, a former Federal Reserve Board member who was the chief architect of Mr. Bush's tax-cut plan that Congress enacted last year.

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