Jackie Calmes

Obama’s Economic Circle Simmering With Tensions

Washington. US President Barack Obama was getting his daily economic briefing one recent morning when a fly distracted him. The president swatted and missed, just as the pest buzzed near the shoes of Lawrence H. Summers, the chief White House economic adviser. “Couldn’t you aim a little higher?’’ deadpanned Christina D. Romer, the chairwoman of the Council of Economic Advisers.

Romer was joking, she said in an interview, adding, “There are only a few times that I felt like smacking Larry.’’ Yet few laughed in the president’s presence.

If the Oval Office incident was meant as a lighthearted moment, it also exposed the underlying tensions that have gripped Obama’s economic advisers as they have struggled with the gravest financial crisis since the Depression, according to several dozen interviews with administration officials and others familiar with the internal debates.

By all accounts, much of the tension owes to the president’s choice of the brilliant but sometimes supercilious Summers to be the director of the National Economic Council, making him the policy impresario of the team. The widespread assumption, from Washington to Wall Street, was that the job would be a way station for Summers until the president could name him chairman of the Federal Reserve when Ben S. Bernanke’s term expires early next year.

But Bernanke’s aggressive response to the crisis has so improved his reputation that people close to Obama increasingly suggest the president could well reappoint him in the interests of financial stability — just as Presidents Ronald Reagan and Bill Clinton retained Fed chiefs who had been picked by predecessors of the other party.

As for Summers, even as top administration officials acknowledge the occasional strains among economic advisers, they say the president is thrilled with the job Summers is doing in his current post. When Obama named his economic team last November, even some within his circle questioned whether Summers, given his prickly personality, could be an honest broker of other advisers’ ideas, as National Economic Council directors are supposed to be.

Summers also had made it clear that he wanted to be Treasury secretary again, as he was in the Clinton administration.

As messy as the process has sometimes been, officials say Summers and his colleagues have worked through their differences. Often arriving and leaving in the dark, sustained by coffee and the Diet Cokes that fill Summers’s office refrigerator, they have produced in six months an array of economic rescue plans that would be daunting if spread over six years. With those, and the Fed’s efforts, the economy shows signs of new life.

Along the way, Summers has forcefully debated the Treasury secretary, his onetime protege Timothy F. Geithner, over what to do with troubled banks. He has clashed with Peter R. Orszag, the budget director, over fiscal and health policy issues. He has collided with Austan Goolsbee, an economist on the Council of Economic Advisers, over whether to rescue Chrysler. And he and Romer have squabbled over how best to make the economic case for overhauling health care.

His argumentative style has contributed to delaying some actions, officials say, like the Treasury-led overhaul of the bank bailout program that was inherited from the Bush administration and an overhaul of the financial regulatory system, which is now expected later this month.

The disagreements are only natural, White House officials say. The issues are big, and so are the personalities, as Obama intended. He has said he wanted advisers who would be teammates as well as rivals, long on experience and brainpower and able to air all sides of an issue to help him decide.

“You can’t assemble a group of really brilliant people, and deal with some of the most complex problems in our lifetimes, and not have disagreements,’’ sad David Axelrod, Obama’s senior political strategist who, with the White House chief of staff, Rahm Emanuel, plays a big role in mediating among the economic advisers and helps shape the decisions.

The president “invites debate but he doesn’t tolerate factionalism. And ultimately everybody on the economic team knows that at the end of the day we’re going to hold hands and jump together,’’ Axelrod added.



The New York Times

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