Policy Powerhouse Steps Up to Treasury : Administration: Robert E. Rubin has been Clinton’s lodestar on economic issues. He’s a facilitator whose goals closely match Bentsen’s.

When President-elect Clinton gathered his Administration’s new economic team for its first meeting on Jan. 7, 1993, at the Governor’s Mansion in Little Rock, it was unclear who would emerge as the most influential leader in a group of big egos, long resumes and rival ambitions.

What’s more, it was uncertain whether the team, which brought together conservatives and liberals with little in common save their ties to Bill Clinton, could reach a consensus on economic policy.

Yet almost immediately after that crucial meeting, Robert E. Rubin emerged as the de facto leader of the Clinton economic team, someone who had not only gained Clinton’s confidence but who had the ability to get the rest of the team to work together. Quickly, Rubin became the most powerful policy-maker in the Administration, eclipsing even Treasury Secretary Lloyd Bentsen, the Administration’s elder statesman and chief spokesman on economic policy.

And now, Rubin is finally poised to assume publicly the role that he has played in the White House for 22 months. On Tuesday, Clinton announced that Rubin is his choice to succeed Bentsen as Treasury secretary, after Bentsen finally announced his long-rumored decision to resign and return to the private sector in Texas.

The selection of Rubin, a 56-year-old former co-chairman of the Wall Street investment firm of Goldman Sachs, is a sign of continuity, rather than change, at Clinton’s Treasury Department. Rubin seems certain to continue to maintain Bentsen’s focus on moves designed to expand free trade in the international arena, while continuing the pursuit of deficit reduction on the domestic side.

“There is a remarkable similarity between our economic views,” Bentsen said in an interview Tuesday.

In fact, Bentsen noted, he and Rubin are old friends, and recommended each other for the job of Treasury secretary when the President-elect asked each man for recommendations. While at Goldman Sachs, Rubin personally managed a blind trust for Bentsen, and Rubin’s son once worked in Bentsen’s Senate office.

Bentsen said Tuesday that he told Clinton he would not accept the job of Treasury secretary if anyone other than Rubin was put in charge of the National Economic Council. Bentsen feared that the council, a new policy-making power center in the White House, would usurp authority from the Treasury unless it was led by someone like Rubin, who would act as a policy coordinator, rather than as an economic czar.

Virtually every senior Administration official who participates in council meetings describes Rubin as an “honest broker.” A quiet, unassuming man whose laid-back style seems strangely at odds with his success in both the private and public sectors, Rubin has not tried to use his extensive access to Clinton to have the last word on policy disputes. Above all, he has seen his role as the behind-the-scenes mediator, often preferring to let others take the public credit.

That fact has won badly needed credibility for the new National Economic Council.

“All the stories about his quiet style and manner are true,” said one senior Administration economic policy-maker. “He makes the group come to a decision, or he can help frame the debate for the President. But he treats the economic team as a team. If he didn’t, if he tried to get in the last word with the President, then he would have hurt his credibility with the rest of the team, and the NEC decision-making process would have broken down, and other people would have gone around him to try to get to the President. But that hasn’t happened.”

Still, being an “honest broker” doesn’t mean that Rubin is not influential. Rubin played the dominant role in persuading Clinton to focus his economic agenda on deficit reduction, which forced Clinton to abandon many of his campaign pledges to cut taxes for the middle class and spend more money on public works and infrastructure.

Rubin brings a different approach than Bentsen to Treasury on some key issues. A native New Yorker with a long involvement in New York Democratic politics, Rubin is more deeply interested in urban issues than Bentsen, and is likely to try to develop new tax policies to enhance such programs as enterprise zones. Unlike Bentsen, Rubin doesn’t have much interest in a capital gains tax cut, or providing other new tax breaks for business.

Rubin is to be succeeded as chairman of the economic council by White House deputy chief of staff Erskine Bowles.