TOPICS > Economy

Treasury Sec. O’Neill, President’s Economic Adviser Lindsey Resign

BY Admin  December 6, 2002 at 12:50 PM EDT

The announcement came as new figures from the Labor Department put the unemployment rate at an unexpectedly high six percent. The U.S. economy has struggled to spark a solid recovery and analysts said this instability helped motivate Friday’s moves.

A spokesperson for the Treasury Department told reporters that O’Neill’s decision to step down would take effect in the next few weeks.

O’Neill submitted his resignation in a brief letter to President Bush.

“It has been a privilege to serve the nation during these challenging times. I thank you for that opportunity,” O’Neill said in the letter. “I wish you every success as you provide leadership and inspiration for America and for the world.”

The former CEO of aluminum giant Alcoa, O’Neill becomes the first Cabinet secretary to leave the Bush administration.

During his two-year tenure, he was an outspoken critic of tax policy, dubbing the U.S. income tax code “9,500 pages of gibberish.” He incensed others by saying the able-bodied should save for their own retirement and medical care.

O’Neill opposed financial bailouts for faltering economies in South America. But he also participated in a highly publicized tour of Africa with the rock singer Bono to examine the obstacles hampering the troubled continent’s progress.

His call for accountability as a prerequisite to increased financial aid angered many critics, but he said such demands amounted to a “moral imperative.”

“[W]ith leadership, honest, accountable and committed to progress, everything is possible. Without leadership, nothing is possible,” O’Neill said after his trip. “In the right environment focused on growth, enterprise and human development, aid works. Knowing that it can work, we have a moral imperative to demand as much. Assistance should make a real difference in people’s lives.”

Lawrence Lindsey, a former member of the Federal Reserve Board of Governors, had served as President Bush’s economic adviser during the 2000 campaign and had spearheaded efforts to pass a sweeping tax cut last year.

“Larry Lindsey has submitted his resignation to the president to pursue endeavors outside the government,” an unnamed senior official told Reuters.

The White House economic adviser’s departure became public only minutes after the announcement of O’Neill’s resignation.

Mr. Bush’s spokesman said the president had not decided on replacements yet, but would consider many candidates.

“The president is going to look for people who are expert in the economy, who have faith and confidence of the markets and people who are leaders of experience and judgment dealing with private markets, private sector, a good understanding of government service,” Ari Fleischer told reporters.