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To: long-gone who wrote (93572)	2/14/2003 9:06:24 PM
From: lorne	Respond to of 116762

Rift brings calls for Fed chief to stand down By Lea Paterson, Economics Editor February 14, 2003 THE rift between the White House and the Federal Reserve on tax cuts has thrown into doubt Alan Greenspan’s reappointment as Chairman of the Federal Reserve next year. Although aides to President Bush yesterday tried to play down differences between Mr Greenspan and the White House over the Administration’s $695 billion (£430 billion) tax plan, this did not stop senior Republicans from speculating on whether it was time for the 76-year-old Chairman to stand down. A spokeswoman for the President said that it was far too early for a serious discussion of Mr Greenspan’s reappointment and that the White House continued to have confidence in the Fed Chairman. “The President has a great deal of confidence in Chairman Greenspan,” she said. “He believes he is doing an outstanding job. His term does not even expire until the middle of next year, so I think it’s sort of silly to begin speculating about that.” However, attempts by the White House to patch over the rift did not prevent speculation that Mr Greenspan may not be reappointed when his term expires in June 2004. Some analysts even suggested that Mr Greenspan could retire early to avoid a change in a presidential election year. Grover Norquist, head of the think-tank Americans for Tax Reform (ATR) and a man with close links with the Republican Party, was among those questioning Mr Greenspan’s suitability for a fifth term. “I think he’s getting old,” said Mr Norquist, who argued that the Fed Chairman’s opposition to Mr Bush’s tax plan might have jeopardised his chances of staying as head of America’s central bank. Republican Senator Jim Bunning, a longstanding critic of Mr Greenspan, openly suggested that the Fed Chairman should stand down — a sentiment echoed by a number of congressional aides. One said: “He didn’t do anything to help the President. You just wonder if he’s decided to go, or if the White House has told him that it is time to go.” In testimony to the House of Representatives on Wednesday, Mr Greenspan toned down the criticism of President Bush’s tax proposals that he voiced to the Senate on Tuesday. But there was no disguising his unease about the White House’s decision to run a record $300 billion budget deficit this year and next. Speaking to the Senate, Mr Greenspan said that the White House’s budget forecasts were “sobering”. “Unless and until we can make judgment as to whether there is an underlying deterioration (in the economy) going on, and my judgment is I suspect not, then stimulus is actually premature.” The row over US tax policy is not the first time that the Fed Chairman has fallen foul of the Bush dynasty. A well-respected economist with impeccable Republican connections, Mr Greenspan was first appointed head of the Federal Reserve in 1987 by President Reagan. George Bush Sr reappointed him in 1991, but their relationship soon began to sour. As the US economy slid towards recession in 1991, the Fed Chairman cut rates. He lowered borrowing costs again in 1992, but did not move as far and as fast as George Bush Sr would have liked. Mr Bush subsequently blamed the Fed for losing him the election to Bill Clinton — who campaigned on his “it’s the economy, stupid” platform. “I reappointed him and he disappointed me,” Mr Bush said. timesonline.co.uk