Rivlin Won’t Seek a Seat on Fed Board : Government: Deputy director of OMB is second Administration official to bow out of running for vacancy on central bank panel.

Alice Rivlin, deputy director of the Office of Management and Budget, has taken herself out of the running for appointment to the seven-member Federal Reserve Board, senior Administration officials said Thursday.

Rivlin is the second top Administration official to decline the post, the first vacancy on the board of the nation’s central bank to come open since President Clinton took office.

Earlier, Alan Blinder, a key member of the Council of Economic Advisers, also decided against filling the Fed seat coming open as a result of the departure of Wayne Angell, a Reagan appointee.

Angell’s term expires Jan. 31, giving Clinton the opportunity to make the first Democratic appointment to the Fed since Lyle Gramley was named to the central bank’s board by President Carter in 1980. All the Fed’s current board members are either Reagan or Bush appointees.

“Alice never wanted to be on the Fed,” a senior White House official said. “The President would have been delighted to have her there, but she’s not interested in it.”

With Rivlin’s withdrawal, sources said that White House officials have a short list of three candidates under consideration: Peter Kenen, a leading international economist at Princeton; George Perry, a Brookings Institution economist, and Van Dorn Ooms, an economist and director of research at the Committee for Economic Development, a Washington think tank.

Two of those candidates have undergone formal interviews at the White House, although the President has not yet met with any of them. Senior White House officials said they hope to make a decision in January.

The opportunity to put his own person on the board of the Fed comes at critical moment for Clinton.

For more than a year, the central bank has left its interest rate policies unchanged, but most analysts expect the Fed to begin to push rates up sometime early in 1994. The Fed’s policy-setting arm voted 12 to 0 in November to keep interest rates steady, minutes of the meeting released Thursday showed.

The Administration’s five-year deficit-reduction plan limits Clinton’s flexibility to use budgetary policies to respond quickly to economic problems. That makes the White House far more dependent on low interest rates--and the Fed--to fuel a recovery.

In recent days, Clinton and senior advisers have begun to publicly jawbone the Fed to persuade Chairman Alan Greenspan not to move quickly to raise rates. Clinton told reporters last week he believed that there was no threat of a resurgence of inflation, and suggested that the Fed should not feel pressured to raise rates to choke off rising prices--and thus economic growth.

But Robert Rubin, chairman of the National Economic Council at the White House, sought to downplay the significance of the White House campaign. He stressed during an interview Thursday that the White House will not demand that its appointee agree to easy interest rate policies in order to accommodate the Administration.

Rubin, former co-chairman of Goldman Sachs, said the White House understands that the “independence of the Fed is an enormous asset to American financial markets,” adding that the “confidence of the markets in the Fed’s inflation fighting credibility is of tremendous importance.”

Rubin added that in interviews with prospective candidates, he was less interested in their views on short-term interest rate policies than in their general philosophy on the role of the Fed in the American economy.

The White House seeks “someone who is committed to the independence and the traditional role of the Fed, which is to act as a bulwark against inflation, as long as they view that (inflation fighting) with some reasonableness,” Rubin said. “I’d much rather know more generally how they think and how they view the Fed than about their interest rate views.”