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O'Neill, Lindsey Resign

Aired December 6, 2002 - 11:01   ET


LEON HARRIS, CNN ANCHOR: Up first this hour on CNN, political casualties of the ailing economy. Treasury secretary Paul O'Neill and economic adviser Larry Lindsey have resigned, and this we hear at the request of the White House.
Our senior political analyst, Bill Schneider, joins us now, live from Washington. Let's get some insight now on the shakeup. Bill, what strikes you about all of this this morning?

WILLIAM SCHNEIDER, CNN SR. POLITICAL ANALYST: The timing, the timing. It happened after the election. The president has been under pressure to shake up his economic team for some time.

Al Gore recommended this in a speech, but he waited until after the election just before the weekend, when people are going to be preoccupied with Christmas shopping, on the day that unemployment reached a high point for the last nine years, and just before the weekend is about to be taken over by news about Iraq. The declarations are due this weekend from Saddam Hussein. So they are sort of trying to bury the bad news about the economy, while at the same time shaking up the economic team.

HARRIS: Is there any possible credibility issue here with the administration, Bill, because for months now, there has been pressure put on this administration to do something -- to make a shakeup like this actually happen. Paul O'Neill was under pressure all of this year. The economy has been in the tank almost all of this year. There is the big issue that came out earlier this year with the corporate malfeasance and all that, and the administration, throughout it all, kept saying, No, everything is fine. The team is just great, things are working fine. Then all of a sudden now, you see this cleaning of house here, which would signal that they knew all along that there was a problem here.

SCHNEIDER: Well, let me put it this way. There was an election November 5. Before the election, everything was fine. After the election, maybe it's not so fine, maybe we need new people. Could there be a political motive here? I think so.

HARRIS: Well, with that in mind, we've been speculating, or at least trying to ruminate amongst ourselves about who might be on the list to be considered for some of these posts here.

Do you think that the president would be wise to reach out to some senators, or former senators for a position -- to fill this position at the Treasury Department? SCHNEIDER: He needs someone who can have the confidence of Wall Street. He needs someone the equivalent of Robert Rubin. One of the problems Paul O'Neill had is that he worked in the shadow of a man who is now regarded as one of the great Treasury Secretaries of all time, Robert Rubin, Clinton's architect of the economic boom of the 1990s, which a lot of people think may have been a bubble. Nevertheless, he did have the confidence of Wall Street. So I think President Bush is under some pressure to find someone who can work with that constituency and restore confidence in the stock market, because that, more than anything else, is at the center of the nation's economic troubles.

HARRIS: We have talked so much about O'Neill all this morning, what about Larry Lindsey? That position, how key is that position of economic adviser? Is it a situation or a position that the president could actually go some time without filling?

SCHNEIDER: I think so. That is a White House staff position, it doesn't need Senate confirmation. He's been hinting for a long time that he is prepared to leave, so that really did not come as any great surprise.

O'Neill has been in trouble, he has been widely criticized, and in fact, a lot of newspapers have urged him to resign for some time now. That comes as a bit of a surprise because it looked like that wasn't about to happen, and a cabinet secretary leaving is always bigger news than someone on the White House staff. So I think the real news is Paul O'Neill being forced out. He did resign, that is true, but clearly he did it at the request of the White House.

HARRIS: And we should also say, it's not uncommon for cabinet members to make a move like this, to leave the government after midway through a term like this, because of the wear and tear. But let me ask you, with that in mind, is there any other position like this that we may expect some change in the cabinet in days to come or months to come?

SCHNEIDER: Months to come, maybe. Days to come, probably not. I think these are the top two economic positions. After all, what's higher? The most senior cabinet official in charge of the economy is the Treasury Department, and the key economic position in the White House is the White House economic adviser. I mean, this is a shakedown at the very top of economic policy making. I don't think we're going to see a lot more changes for the immediate future. There is going to be a lot of speculation about who's going to succeed them.

HARRIS: How about elsewhere in the cabinet, however?

SCHNEIDER: I haven't heard any rumors about other positions in the cabinet, but you may know more than I do.

HARRIS: All right. Well, that's what you're there for. Bill Schneider, thanks for checking in, Bill. Appreciate it.


HARRIS: Bill Schneider, senior political analyst in Washington.


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