Bentsen Said to Be Ready to Step Down

Treasury Secretary Lloyd Bentsen, the Clinton Administration’s elder statesman and chief spokesman on economic policy, plans to resign after the first of the year, senior Administration sources said Monday.

He is expected to be succeeded by Robert E. Rubin, chairman of the National Economic Council and a senior economic policy adviser in the White House. Bentsen’s decision to return to the private sector also appears to end the possibility that he might replace Warren Christopher as secretary of state, sources said.

Bentsen’s departure will leave a gaping hole at Treasury at a time when the White House is searching for ways to recapture the initiative from the Republican Party. No one else on President Clinton’s team has the stature on Capitol Hill that the former Texas senator enjoys or has his commanding public presence.

In fact, Bentsen, 73, has played a critical role in most of the Administration’s major successes--its deficit-reduction plan, passage of the North American Free Trade Agreement and endorsement by Congress last week of the new world trade accord. Above all, he provided a reassuring presence for an Administration that often has had trouble developing a coherent policy agenda.

“He’s had a Midas touch. Everything he’s devoted himself to has turned to reality,” observed one senior official in the Administration. “No one in the Administration has the relationship with Congress that he has. Nobody is indispensable, but losing Bentsen is like the Kansas City Chiefs trying to play without Joe Montana.”

Rubin, a wealthy former co-chairman of the Wall Street investment firm of Goldman Sachs, has the respect of the financial markets and shares Bentsen’s moderate views on the importance of free trade and the need for significant deficit reduction. But he lacks Bentsen’s long experience in Washington and is a relative neophyte in dealing with Congress.

Bentsen’s resignation and Rubin’s appointment have not been announced, although Bentsen refused to deny reports of his departure after a speech in Washington Monday.

“I am not going to retire because I think you just rust away,” Bentsen said. “As to when I will leave Washington, I can paraphrase Mark Twain and say the news is premature. You’ll be among the first to know when it is news.”

Bentsen did not want to make a definitive statement about his plans with Clinton out of the country Monday, sources said, noting that a precise date for the resignation has not been set. In a senior staff meeting at the White House Monday, Chief of Staff Leon E. Panetta said that the timing of the announcement is being left to Bentsen.

Sources said that there are two leading candidates within the Administration to succeed Rubin at the National Economic Council if he moves to Treasury--Laura D’Andrea Tyson, who chairs the White House Council of Economic Advisers, and Erskine Bowles, now deputy White House chief of staff and formerly head of the Small Business Administration.

Sources close to Bentsen stressed that his decision to leave does not reflect dissatisfaction with Clinton’s policies. Yet it was clear that Bentsen was uneasy with the chaotic White House decision-making process and often found it difficult to slow down or alter what he considered disastrous policy decisions by injecting himself into marathon White House gabfests.

As a result, he sometimes found himself as chief Administration spokesman on policies with which he was in fundamental disagreement. That was especially true with health care reform, the cornerstone of the Clinton agenda. At one point during the health care debate, Bentsen refused to testify before Congress in support of the Administration’s health care proposal because he believed that the numbers behind the package had not been thoroughly researched.

Still, officials said that Bentsen is concerned about the appearance that he is abandoning the President at a political low point. “Of course he is concerned about that and that is one reason the timing still has not been finalized,” noted one source.

In fact, Bentsen’s resignation is likely to come as the Whitewater controversy, which embroiled his department last summer, appears about to be revived. While it is unclear whether Republicans in Congress plan to reopen their inquiry into events at the Treasury related to Whitewater, the confirmation hearings of Bentsen’s successor could be a vehicle.

Two Treasury officials--deputy Treasury Secretary Roger Altman and Treasury general counsel Jean Hanson--were forced to resign after last summer’s Whitewater congressional hearings.

Bentsen was seen as one of the only members of the Administration who was held in high regard by Democratic and Republican lawmakers alike--and his value to the Administration was only enhanced by the Republican landslide in November. Alone in the Administration, Bentsen can claim close ties to Republican leaders like Sen. Bob Dole of Kansas, the incoming Senate majority leader, and Sen. Bob Packwood of Oregon, the next chairman of the Senate Finance Committee.

“I’m mystified by the timing of this, because Bentsen is one of the only people in the Administration who has good relations with Republicans on the Hill,” observed William Kristol, chairman of the Project for the Republican Future. “It sends a very bad signal to Republicans if President Clinton is keeping Warren Christopher and losing Lloyd Bentsen.”

First elected to the House in 1948 and to the Senate in 1970, Bentsen ran unsuccessfully for the presidency in 1976 and was the Democratic nominee for vice president in 1988. He was Clinton’s first Cabinet choice, and his selection was seen at the time as a reassuring bow by Clinton to Wall Street and congressional moderates.

Bentsen, who resigned his Senate seat to join the Clinton Cabinet in 1993, had long told associates that he planned to resign when his last Senate term would have expired--in January, 1995.

“His decision (to resign) is in concordance with that decision to leave the Senate after his last term,” noted one source.