Washington – A day after President Barack Obama hinted at possible departures from his economic team, the White House announced late Tuesday that National Economic Council chief Larry Summers is returning to academia.
There was no word on who might replace Summers as the chief of the council, which coordinates economic policy, but there was speculation that Obama might choose a nationally recognized executive who’s run a business, rather than another academic or investment banker, to help rally the private sector.
A former treasury secretary in the Clinton era, Summers, the president’s top economic adviser, was thought to be on the hot seat after Obama mused aloud about his possible exit during a town hall meeting Monday.
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With Republicans poised to make gains in congressional elections this November, the administration is taking heat for the sluggish economic recovery and for an unemployment rate that seems stuck at nearly 10 percent and could go higher. A new McClatchy-Marist poll this week found that four of five U.S. residents think the nation’s economy is still in recession despite four straight quarters of positive growth, and 52 percent said the worst was yet to come, while only 44 percent said the worst was behind us.
Word that Summers will leave at year’s end came weeks after Christina Romer, then the head of the White House Council of Economic Advisers, left her post to return to teaching. Budget chief Peter Orszag announced his departure in June, in part because of repeated policy clashes with Summers.
Summers will return to a teaching post at Harvard University, the White House said in a statement after financial markets had closed. He heads the morning economic briefings for Obama and had the president’s ear during the dark days of last year’s economic slump, as well as during the debate over revamping financial regulations.
“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,” the president said in a statement. “Over the past two years, he has helped guide us from the depths of the worst recession since the 1930s to renewed growth.”
With the economy stuck in first gear, few but the president were lamenting Summers’ departure.
“Too late to help,” said Larry Mishel, the president of the Economic Policy Institute, a liberal policy research group, who added, “Not sure it’ll change policy.”
There’d been intense speculation about the departure of key members of Obama’s economic team after the president mentioned Summers and Treasury Secretary Timothy Geithner on Monday when answering a question from an audience member.
“This is tough, the work that they do. They’ve been at it for two years, and they’re going to have a whole range of decisions about family that will factor into this, as well,” the president said, seeming to confirm their departure. “But the bottom line is, is that we’re constantly thinking, is what we’re doing working as well as it could? Do we have other options and other alternatives that we can explore?”
One potential pick to replace Summers could be Ursula Burns, the highly regarded CEO of Xerox Corp., whom Obama has met numerous times when seeking the pulse of the business community.
Geithner has been on the hot seat from virtually the moment he was nominated, after Senate staffers discovered that he’d paid insufficient taxes. It made for a narrow confirmation victory and a tense relationship with lawmakers ever since. Republicans repeatedly have called on him to resign.
The White House gave no immediate indication of whether Geithner, too, would be departing, and a treasury spokesman had no immediate comment.
Viewed mostly as a centrist with Wall Street ties, Summers was the subject of ribbing from late-night talk shows in April 2009 when he was photographed napping during a White House meeting with credit card company executives.
Word of his departure also came a day after the National Bureau of Economic Research declared that the so-called Great Recession, which began in December 2007, officially ended in June 2009. At 18 months, it was the longest prolonged downturn in the U.S. economy since the Great Depression.