Obama's top economic adviser leaving
Wednesday, September 22, 2010
President Obama's top economic adviser, Lawrence H. Summers, will step down as director of the National Economic Council after the November elections and return to a teaching post at Harvard University, the White House announced Tuesday.
The departure of Summers, 55, will complete the turnover of three of Obama's four top economic advisers as the administration struggles with the political fallout of a stubbornly weak economy.
Summers's exit had been in the works for months, White House officials said. A Treasury secretary in the Clinton adminstration who later served as president of Harvard, Summers initially agreed to join the Obama White House for just one year to help the new president navigate the worst economic crisis since the Great Depression.
Passed over when Obama reappointed Ben S. Bernanke as chairman of the Federal Reserve, Summers nonetheless agreed to stay on at the White House to supervise passage of a sweeping overhaul of the nation's financial regulatory structure, which Obama signed into law earlier this year. But he informed the president that he would return to teaching in January 2011.
"I will always be grateful that at a time of great peril for our country, a man of Larry's brilliance, experience and judgment was willing to answer the call and lead our economic team," Obama said in a statement, noting that Summers will continue to advise his administration as a member of the President's Economic Recovery Advisory Board. "We are on a better path thanks in no small measure to Larry's wise counsel."
Congressional Republicans - and some Democrats - have been more critical of Summers's tenure. House Minority Leader John A. Boehner (R-Ohio) recently called on Obama to fire both Summers and Treasury Secretary Timothy F. Geithner, accusing the White House of pursuing misguided economic policies that ran up record deficits without creating jobs or significantly improving the economy.
Many prominent economists have rebutted that view, arguing that Obama's economic policies prevented last year's recession from turning into a depression. Still, with unemployment at 9.6 percent and Democrats getting battered in the polls, even some administration loyalists say they were surprised that it has taken so long for Obama to recast his message on the economy and reshape his economic team.
Summers will stay until the end of the year, White House officials said. His departure leaves Geithner as the sole member of the economic team that arrived with Obama when he took office in January 2009. Budget director Peter Orszag left in July, and the chairman of the Council of Economic Advisers, Christina Romer, left earlier this month.
In both cases, Obama turned to administration insiders to fill the vacancies. He chose Jacob Lew, a former Clinton budget director and current deputy secretary of state for management, to replace Orszag. The Senate is expected to confirm the nomination within the next few weeks. For CEA chair, Obama chose Austan Goolsbee, a current CEA member and one of Obama's longest-serving advisers. Goolsbee does not require Senate confirmation.
Replacing Summers is likely to be more difficult. Summers brings a hard-to-match gravitas to the post, given his reputation as a supremely talented economist and a practiced Washington insider. Though many find his personality prickly, those who worked most closely with him said they grew to respect him deeply.
"What he loved and what Obama valued most, though, was having one of the smartest economists of his generation at your side giving you advice," said an administration official familiar with Summers's thinking. "Over time, the other parts of the job just kind of became exhausting to him.
As Obama gears up for the 2012 reelection campaign, administration officials need both a fresh face on the economy and someone who can craft a credible vision for creating jobs and restoring the nation's economic vitality. Sources said the White House is considering whether to choose a candidate who could blunt criticism that the administration has been anti-business, such as a corporate chieftain or prominent investor.
Administration officials are also eager to find a woman to fill a top economic role, since Romer's departure left Obama with an all-male group of principals at his daily economic briefing. However, a White House official noted that Obama has a number of women in central positions, including CEA member Cecilia Rouse, NEC Deputy Director Diana Farrell and Lael Brainard, the Treasury undersecretary for international affairs.
Obama is unlikely to choose a replacement for Summers until later in the year, a White House official said. In the meantime, Geithner issued a statement praising Summers, saying "few economists can claim as big an imprint on American history."
Staff writer Brady Dennis contributed to this report.