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Greenspan book: GOP 'swapped principle for power'

  • Story Highlights
  • Greenspan: Bush deprived nation of checks, balances by failing to veto bills
  • Treasury secretaries not included in economic policymaking, Greenspan alleges
  • White House responds that its "economic policy was right, as our records show"
  • Ex-Fed head: Clinton either shared my views or he was "cleverest chameleon"
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(CNN) -- Former Federal Reserve Chairman Alan Greenspan slams President Bush and today's Republicans, while calling Richard Nixon and Bill Clinton "the smartest presidents" he worked with, according to an advance copy of his upcoming book.

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President Bush, left, smiles with Alan Greenspan after the longtime Fed chairman stepped down last year.

He further says the GOP deserved the stomping it took in November's congressional elections -- a ballot that saw both houses of Congress wrested from Republican control -- because the party "swapped principle for power."

His book, "The Age of Turbulence: Adventures in a New World," is scheduled for release Monday. CNN obtained a copy Saturday.

In the book, Greenspan wrote that Bush essentially left an unbridled GOP Congress to spend money however it saw fit, and by not vetoing a single bill in six years, the president deprived the nation of checks and balances.

"The Republicans in Congress lost their way," Greenspan wrote. "They swapped principle for power. They ended up with neither. They deserved to lose."

Greenspan, an 81-year-old Republican who retired last year after five terms as Fed chairman, wrote that he made no secret of his view that Bush should reject some bills.

"It would send a message to Congress that it did not have carte blanche on spending," Greenspan recalls telling the administration. "But the answer I received from a senior White House official was that the president didn't want to challenge House Speaker Dennis Hastert. 'He thinks he can control him better by not antagonizing him,' the official said."

The White House, however, said that vetoes weren't necessary because Congress "worked with us."

"The Republican Congress stayed within the president's top-line numbers on non-national security appropriations bills. We had veto threats, which were used to good effect to keep spending within the president's numbers," said spokesman Tony Fratto.

Greenspan wrote in his book that the decision was costly.

"To my mind," he wrote, "Bush's collaborate-don't-confront approach was a major mistake -- it cost the nation a check-and-balance mechanism essential to fiscal discipline."

He further wrote that former Treasury Secretary Paul O'Neill "found himself the odd man out; much to my disappointment, economic policymaking in the Bush administration remained firmly in the hands of the White House staff."

Fratto countered that O'Neill and former Treasury Secretary John Snow "had the opportunity to present their ideas through the policymaking process. If ideas failed to carry the day, it probably had something to do with the force and logic of the policies being advocated, rather than anything about the 'process.' Ideas were considered, sometimes they achieved consensus, sometimes not -- nothing unusual there. At any rate, where we ended up on economic policy was right, as our records show."

"We're not going to apologize for increased spending to protect our national security," Fratto said. "That isn't just increased spending. It's an investment in the safety and security of the nation, which is also, by the way, an important economic objective."

Greenspan praised former President Clinton and his attitude toward economic policies, saying, "either Clinton shared many of my views on the way the economic system was evolving and on what should be done, or he was the cleverest chameleon I'd ever encountered."

"Clinton was often criticized for inconsistency and for a tendency to take all sides in a debate, but that was never true about his economic policy," he wrote. "A consistent, disciplined focus on long-term economic growth became a hallmark of his presidency."

Greenspan said Clinton and former President Nixon were "by far the smartest presidents I've worked with."

The former Fed chairman says his view of the Bush administration was not always so grim, and that he was initially excited about Bush's election.

"I looked forward to at least four years of working collegially with many of the government's best and brightest men, with whom I had shared many memorable experiences. And on a personal basis, that is how it worked out," Greenspan wrote. "But on policy matters, I was soon to see my old friends veer off in unexpected directions." E-mail to a friend E-mail to a friend

CNN's Suzanne Malveaux and Jennifer Rizzo contributed to this report.

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