Amid deepening anxiety over the slow place of recovery from the recession, President Obama on Tuesday announced the departure of one of his top economic advisors.
Lawrence Summers, known as a brilliant economic thinker with a prickly personality, will step down at the end of the year to return to Harvard University, where he had a controversial five-year stint as president.
He will be the third key member of Obama’s economic team to leave in a mid-term election year in which the anemic economy could lead to large Democratic congressional losses in November.
The departure came just a day after Obama signaled possible high-level departures — a common occurrence at the two-year point in a presidency. In a written statement, he praised Summers’ “brilliance, experience and judgment” as director of the National Economic Council.
“Over the past two years, he has helped guide us from the depths of the worst recession since the 1930s to renewed growth,” Obama said. “And while we have much work ahead to repair the damage done by the recession, we are on a better path thanks in no small measure to Larry’s wise counsel.”
White House officials said Summers’ departure was planned and didn’t foreshadow a change in the administration’s economic direction.
“Our agenda will continue to be to build on the momentum of the policies — all of which bear Larry’s fingerprints — that we have put in place and are pursuing,” said Jared Bernstein, another member of the White House economic team.
Summers originally told Obama he would stay just one year as the head of the team, but the president persuaded him to extend his tenure through 2010, said Bernstein, the chief economic advisor to Vice President Joe Biden. But under Harvard’s “strict” two-year leave policy, Summers was unable to prolong his stay in government, Bernstein said.
The White House said it was open to appointing a successor from the corporate world. Obama has faced criticism that too few of his senior advisors have private-sector experience and that his administration is anti-business.
“The president will consider all able candidates who can help build on our jobs agenda, from whatever sector they hail,” Bernstein said.
Summers’ departure follows those of Christina Romer, who stepped down this month as chairwoman of the Council of Economic Advisors, and Peter Orszag, who left this summer as head of the Office of Management and Budget. Another high-level Obama aide, White House Chief of Staff Rahm Emanuel, also is expected to announce in coming weeks that he is leaving to run for mayor of Chicago.
Summers and Treasury Secretary Timothy F. Geithner, his former protege, have been lightning rods for critics of Obama’s economic policies. Last month, House Minority Leader John Boehner (R- Ohio) said Obama should ask for their resignations.
Boehner hopes the announcement of Summers’ departure will be followed by Obama giving up on his proposal to allow Bush-era tax cuts to expire at the end of the year for households earning more than $250,000 annually, said Kevin Smith, a Boehner spokesman.
“Until that happens, the White House is not focused on the No. 1 issue on the minds of the American people: jobs,” Smith said.
But House Financial Services Committee Chairman Barney Frank (D-Mass.) said there was no need for the White House to change direction. He said he regretted the departure of Summers, whom he worked closely with on the recently enacted financial reform law.
“I enjoyed working with Larry. His economic expertise was a very important resource for us,” Frank said. He would not speculate on a successor.
Summers is known as a brilliant economist and was considered by Obama for Treasury secretary, a post he held from 1999 to 2001 under President Clinton. Summers has been a key player on economic policy at the White House, leading Obama’s daily economic briefing in the Oval Office.
But Summers has had a limited role selling the Obama administration’s economic policies to the public.
Summers was considered to be a tough bureaucratic infighter. Last year, he clashed with Romer. In his book “The Promise,” author Jonathan Alter wrote that Romer once objected that Summers had been keeping her out of important meetings. She appealed to Emanuel, who told her she wouldn’t be barred from meetings with the president.
Bernstein said that Summers’ reputation as a difficult colleague was unfair. “I never found Larry difficult to work with,” he said. “I learned a tremendous amount from him — not only about economics but about political economics.”
Obama said Summers, who served as Harvard’s president from 2001 to 2006, would continue to provide informal “advice and counsel” as a member of the President’s Economic Recovery Advisory Board.