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Bush Picks Supporter as Economic Council Chief

By Jonathan Weisman
Washington Post Staff Writer
Tuesday, January 11, 2005; Page E03

President Bush yesterday selected Indiana businessman Allan B. Hubbard to head his National Economic Council, bringing an old friend and fundraiser to the White House to help guide the administration's economic agenda.

Hubbard, who raised more than $300,000 for Bush's presidential campaigns, will take over as NEC director and assistant to the president for economic policy from Stephen Friedman, a Wall Street investment banker who resigned from the post late last year. Like the president's first NEC director, Lawrence B. Lindsey, Hubbard was intimately involved in Bush's 2000 presidential run, holding policy tutorials for the candidate and recruiting other policy advisers for the campaign.

Hubbard could not be reached for comment. But friends and supporters said that, with a president who values loyalty and friendship, Hubbard is likely to be more influential than either Lindsey or Friedman. Hubbard went to Harvard Business School with Bush, and the two have maintained close personal contact for decades.

"He's very close to the president," Lindsey said.

Hubbard will be the sixth NEC director since then-President Bill Clinton created the post to coordinate policymaking between the White House budget office and the Treasury, Labor and Commerce departments.

He assumes the post at a sensitive time. Two NEC officials, Charles P. Blahous III and Keith B. Hennessey, have emerged as prime movers in the president's push to overhaul Social Security. A task force was created Friday to send proposals to simplify the tax code to Treasury Secretary John W. Snow no later than July 31. And Bush will send a 2006 budget request to Congress early next month that will freeze or cut the budgets of many, if not most, of the federal government's domestic discretionary programs, presaging yet another struggle with Congress.

"It's going to be tough," Lindsey said.

Hubbard served in senior staff positions for Vice President Dan Quayle during the presidency of Bush's father. He spearheaded Quayle's Council on Competitiveness, which was created to cut regulations on business and lower taxes. In that post, he clashed with the Environmental Protection Agency over wetlands protection and bumped heads with other agencies as he tried to scale back regulations, said Jim Pitts, another former Quayle aide, now a partner at the lobbying firm Navigators LLC.

Pitts said Hubbard is unlikely to steer economic policies away from the course Bush has set.

"If the ship is going in a particular direction, I don't see Al coming in and saying, 'No, I want to turn this ship around,' " Pitts said.

What makes Hubbard's selection unique is his business career. The previous five NEC directors came either from Wall Street or academic backgrounds. Hubbard, the president of Indianapolis-based E&A Industries Inc., built a fortune making and selling Car Brite car wax.

He showed his loyalty to Bush by signing on early with his 2000 campaign, rather than with Quayle's pending presidential bid.

An original Bush "Pioneer," Hubbard raised more than $100,000 for the president's 2000 campaign, then made the list of 221 Bush supporters last year who raised more than $200,000 each. He also contributed more than $94,000 to Republican candidates and campaign committees since the 2000 election cycle, according to the nonpartisan Center for Responsive Politics. His wife, Kathryn Hubbard, gave nearly $20,000 more.

After the 2000 campaign, Hubbard had been expected to join the Bush administration in a senior position. But with three young children, he opted to remain in Indiana.

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