Top Bush Economic Advisor to Resign

One of President Bush’s top economic advisors, Stephen Friedman, plans to resign from the administration to return to private life, White House officials said today.

Friedman was little seen during his two-year tenure as director of the National Economic Council, a formerly high profile job that his predecessors used not only to advise the president on economic strategy but to promote the president’s policies to the public.

Friedman, a former co-chairman of the investment firm Goldman Sachs, replaced former council director Lawrence B. Lindsey, who was forced to resign along with former Treasury Secretary Paul O’Neill in December 2002. O’Neill had been accused of being too independent and critical of Bush’s policies, especially the ballooning budget deficit caused in part by tax cuts.

At the time, Lindsey was not seen as an administration critic, but was faulted all the same for estimating the cost of the then-proposed war in Iraq at a hefty $200 billion — an estimate that has turned out to be close to the mark.

At a briefing for reporters in Crawford, Texas, where the president is spending the Thanksgiving holiday at his ranch, White House spokeswoman Claire Buchan praised Friedman as an “outstanding member” of Bush’s economics team.

As for a replacement, she said: “We’ll be hearing more about that in the next couple of days.”

Most accounts suggest Friedman approached the job primarily as a coordinator, not a spokesman. He earned plaudits inside the administration during the Iraq war for organizing an “Iraq watch group” of Cabinet secretaries and other top officials to monitor the economy’s vital signs during the fighting to head off any economic ramifications.

Buchan said Friedman also led Bush’s economic team in passing tax cuts that “contributed to the economic recovery and the job creation that we’ve seen.”

“He has a far lower profile than any of his predecessors,” said Bruce Bartlett, a former deputy assistant Treasury secretary in the first Bush administration, now an economist at the national Center for Policy Analysis. “I can only assume that was by design. I can only assume that was what he was told to do.”

President Bill Clinton created the National Economic Council in 1993 to help coordinate economic policy across the government, similar to the way the National Security Council coordinates national security policy. The first director was former Goldman Sachs co-chairman Robert Rubin, who was one of the most visible members of the Clinton administration and eventually became Treasury secretary.

Outside the administration, Friedman was rarely seen. He gave few prominent TV interviews, and most of his public appearances were to low-profile business groups.

“It is very peculiar: He gets appointed and then he just sort of disappears,” said Dean Baker, an economist with the Center for Economic and Policy Research in Washington. “He didn’t stick his neck out on anything, so he didn’t create any big enemies.”

Stephen Moore, president of the Club for Growth, a conservative advocacy group that promotes tax cuts and other supply-side policies, originally opposed Friedman’s appointment because Friedman was too concerned about the federal deficit. But two years later, Moore offered praise for his performance.

“Steve Friedman was very effective for what he was hired for — to make sure the trains run on time and the economic message was coordinated,” Moore said. “He was an administrator, and that was what they needed.

“He gets points for being a team player and he goes out with his head up, that’s for sure,” Moore added.

Among names circulating in Washington as Friedman’s likely successor are Tim Adams, who served as policy director on the Bush campaign staff. Before that, Adams worked at the Treasury Department as chief of staff to O’Neill.

Times staff writer Peter Wallsten contributed to this report from Crawford, Texas.