Richard Daughty: The gold bug in all of us

Section:

Bush to Change Economic Team;
Candidates Likely To Be From
Outside The Administration

By Mike Allen
Washington Post
Monday, November 29, 2004

http://www.washingtonpost.com/wp-dyn/articles/A18599-2004Nov28.html

President Bush plans to overhaul his economic team
for the second time in two years and wants to tap
some prominent replacements from outside the
administration to help sell rewrites of Social
Security and the tax laws to Congress and the
country, White House aides and advisers said over
the weekend.

Aides said changing four of the five top economic
officials -- including the Treasury and Commerce
secretaries, with only budget director Joshua B.
Bolten likely to remain -- is part of Bush's
preparation for sending Congress an ambitious
second-term domestic agenda.

Commerce Secretary Donald L. Evans and chief
economic adviser Stephen Friedman have
announced their resignations, and officials had
signaled they would move gradually to replace
the team. But the White House is now indicating
it may move more quickly to convey a fresh start.
Aides also said Bush is considering reaching
beyond the kind of administration loyalists who
will staff key national security posts in the second
term.

Republican officials said Bush's economic team
has been weaker than his national security advisers,
and that the president believes he needs aides who
can relate better to Congress and the markets. A
more skilled team is essential, the aides said,
because of the complex and politically challenging
agenda of overhauling Social Security to add
private investment accounts and simplifying the tax
code.

"The president knows that he doesn't have the
strength in that stable, and he's going to another
corral to find it," said a member of Bush's political
team who asked not to be identified because it is
not his job to talk to reporters.

One senior administration official said Treasury
Secretary John W. Snow can stay as long as he
wants, provided it is not very long. He might stay
as long as six months into the term, officials said.

Friends say Chief of Staff Andrew H. Card Jr. is
one possibility to replace him. Bolten also could
move over.

But Republican officials said Bush is also c
onsidering well-known officials from outside, including
New York Gov. George E. Pataki. Conservatives are
pushing for former Sen. Phil Gramm, a Republican
from Texas.

Also under consideration is John J. Mack, who
stepped down in June as co-chief executive of Credit
Suisse Group. Mack has also been considered to
lead a bipartisan commission on changing the tax
system that Bush will appoint to develop
recommendations for the Treasury secretary.

Friends said Friedman announced last week that he
was leaving because it became clear to him that he
would not be named Treasury secretary. N. Gregory
Mankiw, chairman of the Council of Economic
Advisers, also is expected to depart, officials said.

Evans, who announced shortly after the election that
he will leave Commerce at the end of January, was
to be replaced by another presidential friend --
Cincinnati businessman Mercer Reynolds, who was
partners with Bush in the Texas Ranger baseball
team and was finance chairman of his reelection
campaign. But Bush advisers said Reynolds is no
longer the front-runner for the job and said the White
House hopes to nominate another business executive
who is trying to get his finances worked out.

As a consolation prize, Reynolds could be named
ambassador to Britain, Bush advisers said.

Bush aides, who have been debating what parts of
his legislative package to send to Capitol Hill first,
will start with measures to restrict medical
malpractice claims and other lawsuits. Bush will
then try to advance his initiative on Social Security,
after which will come proposed changes in the tax
laws. In the next month or two, Bush plans to
name a commission to make recommendations on
the tax code that could eliminate some loopholes
and even replace the income tax with a sales tax
or value-added tax.

With the three Cabinet replacements Bush has
announced so far for his second term, he kept his
circle tight by dispatching White House staff
members to take over the State, Justice, and
Education departments. Aides said many other
such moves will be announced, because Bush
and senior adviser Karl Rove are determined to
"implant their DNA throughout the government,"
as one official put it.

But aides said Bush will almost certainly go
outside the government for some substitutions for
his economic team, which some Republicans
viewed as a weak link during a campaign that
was run on the president's image and national
security credentials.

Administration officials would not spell out all the
reasons for the changes, but one clue came from
the roiling frustration expressed by a senior
Republican congressional aide who is eager to
help Bush but has found his legislative operation
clumsy over the past four years.

"They need people who have not been drinking the
Kool-Aid and are going to come up here and say
breathlessly, 'This is what the president wants to
do, and isn't it great?' " the aide said. "They need
someone like a former senator or former member
or former governor who can come up here and
say, 'This is going to be hard. There's going to
be blood on the floor, but it's going to be worth it.'"

A possible replacement for Friedman is Tim
Adams, who was policy director of the reelection
campaign and was chief of staff to Snow and his
predecessor, Paul H. O'Neill. But officials said
Adams is more likely to become the deputy chief
of staff for policy -- a job that came open when
Harriet Miers, who currently holds the job, was
named White House counsel.

Another possible Friedman replacement is Samuel
W. Bodman, the deputy Treasury secretary, who
has indicated he wants to leave that job. Adams
could also succeed Bodman, officials said.

For Mankiw's slot, the White House has courted
Massachusetts Institute of Technology professor
James Poterba, an expert on Social Security and
taxes.

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