Bono spends all that time buttering Paul O'Neill, and now he has to start all over again with some new guy...
Bush Shakes O'Neill, Lindsey From Posts
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By RON FOURNIER, AP White House Correspondent
WASHINGTON (AP) - President Bush (news - web sites) pushed Treasury Secretary Paul O'Neill and economic adviser Larry Lindsey from their jobs Friday in a Cabinet shakeup designed to control political damage from the ailing economy.
Following plans laid weeks ago, Bush will quickly name successors and unveil a new tax-cut package, said advisers eager to portray the changes as a fresh start for the economy. New unemployment figures matched an eight-year high, underscoring the economic situation.
"I appreciate Paul O'Neill's and Larry Lindsey's important contributions," Bush said in a brief written statement. White House officials said the president sought their resignations through chief of staff Andrew Card.
"I hereby resign my position as secretary of the treasury," O'Neill said in a terse 46-word statement. Associates said he was tired of Washington, and might have left without a shove from Bush.
"Firing its economic team is an overdue admission by the Bush administration that its economic policies have failed," said Senate Democratic leader Tom Daschle. During the midterm election campaign, Daschle had called for a shakeup of Bush's economic team as Democrats tried unsuccessfully to link the economic slump to GOP policies.
The changes heartened investors, sending stocks higher despite the discouraging employment report.
"There's been a general feeling that the Bush White House economic team has not been on top of things," said Ed Peters, chief investment officer at PanAgora Asset Management in Boston.
Despite the impressive Election Day showing for GOP candidates, Bush and his political advisers had already concluded the economy may be the president's biggest vulnerability when he seeks re-election in 2004.
Thus, the White House launched a secret search for O'Neill's replacement in October and quietly began urging Lindsey to find a new job, officials said on condition of anonymity. More recently, Card was drafted to open talks with O'Neill and Lindsey and secure their resignations.
Bush already has a nominee to replace O'Neill in mind, but no offer has been extended, one official said.
Lindsey's replacement probably will be Stephen Friedman, a former chairman of Goldman Sachs, two White House officials said.
O'Neill frequently ran afoul of the White House for voicing views that ran contrary to Bush's economic plans. Lindsey was viewed as a poor administrator, strategist and spokesman for presidential policy.
But officials said it was politics more than policy that prompted the shakeup: Bush wants to be sure voters see him as dealing aggressively with their economic woes, and also believes a change will reinvigorate his team.
The departures came a month after Harvey Pitt resigned under pressure as Securities and Exchange Commission (news - web sites) chairman, his handling of corporate accounting scandals threatening to undermine Bush's political standing.
Among those mentioned as possible successors to O'Neill were Carla Hills, trade representative in the first Bush White House; investment counselor Charles Schwab; Wayne Angell, a former member of the Federal Reserve (news - web sites), and Joseph J. Grano Jr., head of UBS Paine Webber in New York.
Several names emerged from the political world, including retired House Ways and Means Committee Chairman Bill Archer, R-Texas, retiring Sen. Phil Gramm (news, bio, voting record), R-Texas, California financier Gerald Parsky, Democratic Sen. John Breaux (news, bio, voting record) of Louisiana and former New York Mayor Rudy Giuliani.
Bush's close friend and commerce secretary, Don Evans, is a favorite of many White House officials, but he would not qualify as a fresh economic voice with credibility on Wall Street. U.S. Trade Representative Robert Zoellick is being pushed by some White House officials as a candidate.
O'Neill's resignation will be effective in the next few weeks.
White House budget director Mitch Daniels and Glenn Hubbard, chairman of Bush's Council of Economic Advisers, are still in good standing with the president, officials said. Hubbard could be promoted, perhaps to treasury to assist O'Neill's successor, officials said.
The weeks after midterm elections are generally a time for presidents to make changes and for officials to leave public service.
O'Neill, 67, is the first Cabinet member to leave Bush's administration. White House officials said there will be other high-profile departures, and the rumor mill was buzzing.
Health and Human Services (news - web sites) Secretary Tommy Thompson, often whispered to be headed back to Wisconsin, recently told his staff he was staying put. Environmental Protection Agency (news - web sites) director Christie Whitman is said to be frustrated with her low-watt role inside the administration.
Even as O'Neill broke the news of his departure to his staff Friday morning, a new set of economic data underscored Bush's concerns: The unemployment rate unexpectedly shot up to 6 percent in November, matching an eight-year high set in April.
Daschle said the departures were only a start.
"If they don't have a good plan, it doesn't matter which team they've got," he said.
The White House has been at work for months on a new economic package centered on additional tax cuts for lower- and middle-income individuals, playing down the administration's earlier focus on business-side tax proposals to stimulate investment.
Other ideas on the table would be designed to encourage individual investors in the volatile stock market.
A long list of Democratic presidential prospects hope to capitalize on the weak economy, which has not hurt Bush's popularity thus far. Polls show his job approval rating is still high and voters don't blame him or his party for economic woes.
but sometimes there are people here who don't post there.
