Ailing economy forces Bush to revamp team

PRESIDENT George W Bush revamped his economic team yesterday as Treasury Secretary Paul O’Neill and economic adviser Larry Lindsey resigned at the request of the White House amid growing concern about the ailing economy.

Advisers to Mr Bush have been increasingly worried that a lagging economy could hamper the president’s re-election prospects. The unemployment rate rose to 6% yesterday, the highest in nearly nine years.

Presidential advisers have long recognised that a shakeup of the economic team would help indicate Mr Bush was doing everything he could to improve matters.

The resignations came four weeks after Securities and Exchange Commission chairman Harvey Pitt resigned under fire.

Mr O’Neill was the first member of Bush’s Cabinet to leave and officials expected him to be replaced quickly.

White House press secretary Ari Fleischer said the president credits Mr O’Neill and Mr Lindsey with key roles in securing tax cuts and legislation promoting free trade and guaranteeing terrorism insurance to businesses.

“They have both served the president ably and well in leading the nation from a period of recession into a period of growth,” Mr Fleischer said.

“It has been a privilege to serve the nation during these challenging times,” Mr O’Neill said in a letter to the president. “I thank you for that opportunity.”

During his nearly two years as treasury secretary, Mr O’Neill’s blunt-speaking style served as a lightning rod for detractors.

As the president’s chief economic spokesman, he was frequently criticised as being either too enthusiastic about the economy or too glum.

He also pooh-poohed the notion that the economy could be headed into a recession. It was. He criticised international bailouts of Russia as “crazy” and called the European Union “off the wall” for rejecting the General Electric-Honeywell merger.