- The Washington Times - Friday, December 13, 2002

President Bush named investment banker Stephen Friedman yesterday to be his new White House economic adviser, rejecting complaints from conservatives who said he was not a strong tax-cut advocate.

Mr. Bush praised Mr. Friedman, 64, for his "wide experience and steady and sound judgment." The former chairman of the venerable Wall Street firm of Goldman Sachs, a self-described deficit hawk, will replace Lawrence Lindsey as head of the White House National Economic Council, which coordinates all economic policy in the administration.

Conservative tax-cut leaders had mounted a strong lobbying campaign against Mr. Friedman in the past week, saying that his reputation as a deficit hawk and his role as a vice chairman of the Concord Coalition which opposed Mr. Bush's $1.35 trillion tax-cut plan made him an ideological mismatch for the job.

But administration officials said yesterday that Mr. Friedman was committed to the president's full tax-cutting agenda and that railroad executive John W. Snow, Mr. Bush's nominee for Treasury secretary, would be the lead salesman for the president's new economic stimulus plan next month.

In a brief ceremony in the White House yesterday, Mr. Friedman sought to ease conservative concerns about his Concord Coalition connections, telling the president, "I strongly share your convictions, sir, that now is the time for a robust growth and jobs policy."

Stephen Moore, the Club for Growth leader who led the political offensive against Mr. Friedman, said, "We had some real concerns about his political contributions to people like Senator Hillary Clinton and to pro-tax groups. But at this point we'll take the White House's word for it that he will be a strong advocate for the president's tax-cut agenda.

"We had a number of conversations with [White House strategist] Karl Rove where he guaranteed to us that Friedman will be a solid supporter of these policies. So we're feeling a little more reassured today than we were before," Mr. Moore said after the announcement.

The White House appointment yesterday completes the lineup for Mr. Bush's new economic team after he had dismissed Treasury Secretary Paul H. O'Neill and Mr. Lindsey last week in the wake of an unexpected rise in the unemployment rate and further softening of the economy.

Mr. Snow is not expected to have any trouble being confirmed by the new Senate Republican majority when Congress reconvenes next month. As a presidential adviser, Mr. Friedman does not require confirmation.

The question that tax-cut supporters are now asking is how much influence will Mr. Snow and Mr. Friedman have in reshaping the president's forthcoming tax-cut-stimulus package to quickly boost economic growth.

The package is said by administration insiders to be largely completed and includes accelerating some of the remaining income tax-rate cuts that were to take effect in 2004 and 2006, making all the tax cuts permanent, cutting taxes on stockholder dividends, and expanding IRAs and 401(k) supersaver retirement accounts for workers.

The White House planned to announce its proposals later this month, but has since decided to delay release until Mr. Snow and Mr. Friedman have had a chance to review plan provisions.

Mr. Friedman was backed by many in the White House because of his contacts on Wall Street and his administrative skills to coordinate policy proposals, part of the job that Mr. Lindsey was said to dislike the most.

In the final week of internal debate with conservative tax-cutters who questioned Mr. Friedman's commitment to the Republican tax-cutting agenda, Mr. Rove told critics that Mr. Friedman would not set economic policy.

That would be done by the president and his most senior aides, he said.

White House officials said that Mr. Friedman's appointment was delayed this week because of questions about a minor heart condition that flared up last week and a detailed review of his large investment holdings.

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