No Strong Voice Is Heard on Bush's Economic Team
By DAVID E. ROSENBAUM
NEW YORK TIMES
WASHINGTON, July 20 — With the stock market plunging the other day and surveys depicting Americans as increasingly worried about the way the Bush administration is dealing with the economy and corporate fraud, Treasury Secretary Paul H. O'Neill, the administration's main voice on economic issues, was in Kyrgyzstan.
Mr. O'Neill's absence — after a trip to Africa in late May and before a trip to South America late this month — reinforced the view on Wall Street and in political circles here that President Bush's economic team was not responding sufficiently to growing economic and political pressures.
"I'm constantly amazed that anybody cares what I do," Mr. O'Neill declared on Thursday, according to a report from Bloomberg News.
Another top official on economic matters, Mitchell E. Daniels Jr., the budget director, has aroused such animosity in Congress among lawmakers from both parties that his utility as a budget negotiator has been compromised.
Political insiders say a third official, Lawrence Lindsey, the president's chief economic adviser, does not have the presence or the political skills needed to be the principal public spokesman on the economy.
As Americans see their life savings diminished daily by falling stock prices and an election approaches that will determine which party controls Congress and the Bush legislative agenda for the next two years, President Bush may have a hard time getting his message heard because no prominent member of his economic team is regularly reassuring the public that the government's policies are sound.
In a series of interviews, supporters and opponents of the president alike criticized administration officials' failure to deal deftly with economic policy. They contrasted that failure with the confident way Secretary of State Colin L. Powell and Defense Secretary Donald H. Rumsfeld have handled foreign and military policy and the aggressive stance Attorney General John Ashcroft and Tom Ridge, the president's adviser, have taken on domestic security issues.
"We desperately need someone the business community, the financial community, the press and the public can look to as the lead economic spokesman," said Robert D. Hormats, vice chairman of Goldman Sachs International.
"We need someone who is out there day after day explaining the issues the economy is facing and explaining what the administration's policy is to address them," Mr. Hormats continued. "It's worked so well for Rumsfeld, they should have learned the lesson."
Stephen Moore, president of the Club for Growth, a political action committee that supports conservative Republican candidates, said that if the stock market did not turn around and the administration seemed to be sitting on its hands, "Republicans will be wiped out in the House and the Senate" in the November elections.
On all Republicans' minds, Mr. Moore said, is the recollection that the first President George Bush lost the 1992 election to Bill Clinton in part because of the public perception that he had not paid enough attention to the economy.
Mr. O'Neill takes issue with the notion that he is AWOL. In Bucharest, Romania, on Thursday, on his way home from his weeklong trip to Ukraine, Uzbekistan, Kyrgyzstan and Georgia, he told reporters his travels gave him a better perspective on the global economy.
In Addis Ababa, Ethiopia, at the end of his Africa trip in May, Mr. O'Neill bridled at questions about his effectiveness. "If people don't like what I'm doing, I don't give a damn," he asserted. "I could be sailing around on a yacht or driving around the country." He added that the president had praised him for his original way of thinking. "As long as he gives me that leash, I'm going to use it," Mr. O'Neill said.
A senior White House official who usually reflects the president's view said the criticism of Mr. O'Neill was "absolutely off base."
"He has everybody's strong confidence," the official said. "The fact that he's traveling in a difficult week in the markets is unexceptional. He needs to perform all the duties of the secretary of the treasury, not just sit at his desk focusing on the markets on his screen."
Mr. Daniels, the budget director, asserted that Washington was "in another of those periods of collective solipsism" and should not overestimate its importance in the financial markets. To deal with the economy, Mr. Daniels said, "This president assembled a tremendous team both in terms of their fitness for their jobs and the way they work together."
Mr. Daniels has been pilloried on Capitol Hill for the spending restrictions he has demanded. Representative C. W. Bill Young, Republican of Florida, the chairman of the House Appropriations Committee, said Mr. Daniels was "only concerned about numbers" and "not concerned about what those numbers do for the country." Senator Ted Stevens of Alaska, the top Republican on the Senate Appropriations Committee, said Mr. Bush was "ill served" by his budget director.
Mr. Daniels says he sees himself as a lightning rod for criticism and his duty as protecting the president. Mr. Bush has nicknamed him Blade — possibly because of his wiry build or because of a sword hanging on his office wall, or perhaps because his job is to make cuts. Mr. Daniels suggested recently that his handle should probably be changed to Piñata, "because I think some folks think if they can knock my head off, all the goodies in town will fall out."
Mr. Lindsey, who briefs the president two or three times a week on economic matters, said the president's staff focused on long-term issues, not "one week or whatever."
"With the advice of his economics team," Mr. Lindsey said, "the president has been out in front leading consistently since he took office."
Republican lobbyists and consultants who are in close touch with the White House say Mr. Lindsey's influence has waned since the early days of the Bush presidency and the deputy chief of staff, Josh Bolten, a former investment banker who carefully stays in the background, has become a more important adviser on economic issues.
Mr. Bolten said that was not the case. Mr. Lindsey said, "The president continues to have confidence in me as far as I know."
At the outset of the Bush presidency, the economic team was strikingly successful. Barely four months after Mr. Bush moved into the White House, Congress, then controlled by Republicans, approved his highest priority, the largest tax cut in 20 years.
But since then, his economic agenda has stalled. With the Senate now under Democratic control, Congress has refused to make the tax cuts permanent, to give the president authority to negotiate trade agreements, to permit drilling for oil and gas in the Arctic National Wildlife Reserve or to allow private investment accounts under Social Security.
Within the administration, the economic advisers clearly lost out to the political staff this year on two important matters. In March, the administration decided to impose tariffs on imported steel. In May, the president signed a bill with vast new subsidies for farmers. Both steps violated cardinal conservative Republican free-market economic principles.
Mr. O'Neill even said publicly, in ostensibly off-the-record remarks to 200 members of the Council on Foreign Relations in March, that he opposed the tariffs on steel because the United States should be the world's leader in promoting free trade. It was an unusual indiscretion in an administration that prides itself on loyalty.
"When an administration is driven by politics, there's a sense in the markets you'll get bad policy out of it," said David Hale, chief global economist for Zurich Financial Services.
In every administration, said Bruce Bartlett, a conservative economist who worked in the administrations of Ronald Reagan and first President Bush, there is competition between policy and politics. In this administration, Mr. Bartlett said, "the nonfunctioning economic operation is causing the political implications of decisions to have an undue amount of influence."
The problem, Mr. Bartlett and many others say, is that there is no dominant figure on government economic policy like Robert E. Rubin in the Clinton administration, Richard G. Darman in the first Bush administration and Donald T. Regan and James A. Baker III in the Reagan years.
Kevin A. Hassett, a Republican economist who worked for Senator John McCain of Arizona in the 2000 presidential campaign, said: "There's an internal vacuum. People don't know who's in charge."
In part because of this, the economic officials have rarely appeared on the Sunday interview programs on network television, a prime platform for a president's message.
Adam Levine, an assistant White House press secretary who coordinates requests for those appearances, said the main reason was that the networks were more interested in foreign affairs than in economic policy. But last week, the networks asked for Mr. O'Neill and had to take Commerce Secretary Donald L. Evans instead, because Mr. O'Neill was overseas.
In other circumstances, said a Republican lobbyist close to the White House, Vice President Dick Cheney could become the top voice on the economy and offer assurances that the administration had matters firmly in hand. But Mr. Cheney must stay in the background on this issue, the lobbyist said, because he has been tarnished by the Securities and Exchange Commission investigation of accounting practices at the Halliburton Company, the oil services giant where he was chief executive.
Republican lobbyists and consultants who are in close touch with the White House say they expect changes in the economic team after the elections this fall. "They can't make any changes before then," one Republican said, "because it would look as if they were accepting the blame for a bad economy." |
