- The Washington Times - Friday, December 6, 2002

President Bush revamped his economic team today as Treasury Secretary Paul O'Neill and economic adviser Larry Lindsey resigned at the request of the White House amid growing concern about the ailing economy.

Bush advisers have been increasingly worried that a lagging economy could hamper the president's re-election prospects. The unemployment rate shot up to 6 percent in November, the highest in eight years, the government said today.

Presidential advisers do not blame Mr. O'Neill for the uneven economic recovery, but they've long recognized that a shakeup of the economic team would help indicate Mr. Bush was doing everything he could to improve matters.

"My economic team has worked with me to craft an economic agenda and help lead the nation out of recession and back into a period of growth," Mr. Bush said through his press secretary, Ari Fleischer. "I appreciate Paul O'Neill and Larry Lindsey's important contributions to making this happen."

The resignations came four weeks after Securities and Exchange Commission Chairman Harvey Pitt resigned under fire.

Mr. O'Neill, 67, was the first member of Bush's Cabinet to leave. Officials expected him to be replaced quickly; a search already was under way.

Among those mentioned as possible successors are Joseph J. Grano Jr., head of UBS Paine Webber in New York; investment counselor Charles Schwab; retired House Ways and Means Committee Chairman Bill Archer, R-Texas; and Sen. Phil Gramm and House Majority Leader Dick Armey, a pair of Texas Republicans and economists who leave Congress in January.

Mr. Gramm, however, has just taken a lucrative post at UBS Warburg, an investment banking firm, and is said to be eager to make money after years in the public sector. Another prominent senator mentioned for the Treasury job was Sen. John Breaux of Louisiana, a Democrat who broke with the majority in his party to provide key support for the president's $1.35 trillion, 10-year tax cut.

Senate Democratic leader Tom Daschle of South Dakota, who has frequently criticized Mr. Bush's handling of the economy and called on him to fire his economic team, said the shakeup was not enough.

"Firing its economic tean is an overdue admission by the Bush administration that its economic policies have failed," Mr. Daschle said in a written statement. "However, the fundamental problem is that this administration has no comprehensive plan to get the economy back on track."

Senate Republican Leader Trent Lott said the departures of Mr. O'Neill and Mr. Lindsey were "an opportunity for the administration to think about the best people to bring in as they try to develop an economic growth package."

Just after the November elections, White House advisers began speculating that Mr. Lindsey and Mr. O'Neill would be asked to leave. Mr. Bush said at the time: "My economic team came in during very difficult times. There was a recession, terrorist attack, corporate scandals. We have done a lot to return confidence and to provide stimulus through tax cuts … and for that (the team) deserves a lot of credit."

At the White House, Mr. Fleischer said the president credits Mr. O'Neill and Mr. Lindsey with playing key roles in securing tax cuts and legislation promoting free trade and guaranteeing terrorism insurance to businesses.

"They have both served the president ably and well in leading the nation from a period of recession into a period of growth," Mr. Fleischer said.

Still, senior White House officials said the men had been told their departures would be welcome because Mr. Bush wanted to shake up his economic team.

"It has been a privilege to serve the nation during these challenging times," Mr. O'Neill said in a letter to the president. "I thank you for that opportunity."

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