- The Washington Times - Sunday, October 27, 2002

Sen. Paul S. Sarbanes, chairman of the Banking Committee, said yesterday that the Bush administration is "going to have to look" at replacing Treasury Secretary Paul H. O'Neill and other members of its economic team after the Nov. 5 elections.
"It's not just O'Neill. You've got [White House economic adviser] Larry Lindsay rattling around and the Council of Economic advisers," Mr. Sarbanes, Maryland Democrat, said on CNN's "Novak, Hunt & Shields."
"The economy is not coming back. We have serious economic problems as we go into this election," and President Bush's economic advisers don't seem to have any ideas for repairing them, Mr. Sarbanes said. He added, "They don't seem to have their act together or realize the seriousness of the situation."
He said the one proposal the White House is pitching to make permanent the Bush tax cuts is not the way to spur economic growth and create jobs.
Mr. Sarbanes said he is for extending unemployment benefits by 13 weeks and raising the minimum wage, measures he believes would help stimulate the economy.
Although he opposed the administration's 10-year, $1.35 trillion tax cut, he said it would be useless to try to repeal it. "The president would veto [repeal legislation], and there would be no chance of getting the two-thirds majority necessary to override it," Mr. Sarbanes said.
As Election Day nears, Democrats have tried to redirect public attention away from national security and onto the weak economy, where they believe Republicans are vulnerable.
In the Democrats' weekly radio address yesterday, Mayor Ann Hutchinson of Bettendorf, Iowa, focused on the nation's economic woes. "For a lot of us, the faltering economy is having tremendous impact on our long-term savings and our short-term needs," she said.
She noted that "since the beginning of last year, more than two million Americans have lost their jobs and the total value of the stock market has decreased by $4.5 trillion, one-quarter of the market's value."
Mrs. Hutchinson said the "$5.6 trillion federal surplus America enjoyed two years ago is gone, thanks to the fiscal irresponsibility of Republican leaders in Congress.
"It should be clear that we are definitely not better off than two years ago."
Mr. Sarbanes voiced his concerns about the economy and the president's economic advisers one day after he called for Harvey Pitt, chairman of the Securities and Exchange Commission, to step down. Mr. Sarbanes said Mr. Pitt, who spent more than 20 years as a lawyer representing accounting and securities firms, has capitulated to industry pressures.
Mr. Sarbanes made his comments because of his disappointment that the SEC voted 3-2 Friday to appoint former FBI and CIA Director William Webster, 78, to lead a new board charged with overseeing the accounting industry.
Creating the board was a key tenet of a measure to deal with corporate fraud and abuse, which Congress unanimously approved in July. Mr. Sarbanes was co-sponsor of the measure.
"I respect Bill Webster. But [accounting] is not his area of expertise," Mr. Sarbanes said. He added:
"The real problem is Harvey Pitt, who completely mishandled this situation. He had a wonderful opportunity [to pick someone knowledgeable about accounting], but he just blew it."
Mr. Pitt defended his selection of Mr. Webster, citing his integrity. Mr. Pitt denied that he was influenced by either professional or political pressures.

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