Treasury Secretary Rubin resigns
Clinton losing trusted friend, adviser
May 12, 1999
Web posted at: 6:25 p.m. EDT (2225 GMT)
WASHINGTON (AllPolitics, May 12) -- A six-year star of the Clinton Administration, Treasury Secretary Robert Rubin resigned his post Wednesday, effective in early July. Rubin is largely credited as the "steady hand" that has guided the U.S. economic boom and shaped the president's economic policy.
President Bill Clinton made the official announcement at an afternoon Rose Garden ceremony. The president also named Deputy Treasury Secretary Larry Summers as his choice to succeed Rubin.
The president lavished praise on Rubin, one of Clinton's closest friends and most trusted advisers. "I will miss his cool head and steady hand, his sharp mind and his warm heart," Clinton said.
Rubin has influenced administration economic policy from day one, first as head of the White House's newly established National Economic Council and next as Treasury secretary since January 1995.
"He brought it all together. He got us to work as a team. He worked for consensus. He was always honest with me in presenting disagreements. And he built a spirit and a belief that we could actually make this economy what it ought to be for our people," Clinton said.
"That will be his enduring achievement, along with the fact that everybody believed as long as he was secretary of the Treasury, nothing bad could happen," the president concluded.
The Rose Garden event was choreographed as a picture of continuity as Rubin pledged that "this administration will not miss a beat with respect to the economic issues" during the transition.
Rubin's decision to quit was not a surprise. Rumors have been swirling for several months that he wanted to leave, but did not want to do so at a time when the president was facing troubles like the impeachment drama.
"It's no secret to all of you who know him that Bob has been pining for private life for a long time now and I have been pleading for all that long time for him not to pine too much. But two weeks ago he told me that he was ready to go," Clinton said.
Rubin explained: "It is very hard to leave, because I feel deeply committed, ... to this administration, to the people with whom I've worked, to the issues with respect to which so much has been accomplished. But this almost six-and-a-half years has been all consuming, and I think it is time for me to go home to New York and to do whatever I'm going to do next."
The financial dream team of Rubin and Federal Reserve Chairman Alan Greenspan is largely credited with the U.S. economy's longest peacetime expansion, enjoyed during their tenure.
Rubin is credited with convincing Clinton -- despite opposition from congressional Democrats -- to focus on the strategy of lowering the deficit while balancing the budget. The administration now says that strategy of fiscal discipline is responsible for the booming economy.
The numbers best explain the glowing tributes to the veteran Wall Street insider, from Democrats and Republicans alike: During Rubin's service more than 18 million new jobs were created. In 1992, unemployment averaged 7.5 percent and is 4.3 percent now. The $290 billion budget deficit is now just $70 billion. And, perhaps most stunning, the Dow Jones industrial average has more than tripled and crossed the 11,000 barrier since Clinton took office.
"He has been one of the most effective secretaries of the Treasury in this nation's history," Greenspan said Wednesday.
Rubin's influence has not been restricted to the economic sphere. He's the only cabinet member to attend the daily 8:00 a.m. senior White House staff meeting and has provided advice to the president on a range of issues. He is said to sit every day at the head of the table in the Roosevelt Room, rarely speaking.
When he does, the man known for self-deprecating humor usually starts his remarks with "This is just one man's opinion," or "I could be wrong about
this but ..." Said a senior official who attends these meetings: "It's like the
commercial, 'When he speaks, people listen.'"
In his outgoing remarks, Rubin credited the leadership of Clinton and Vice President Al Gore for the nation's growing economy: "In my view, Mr. President, you and the vice president have repositioned our country with respect to fiscal discipline, with respect to leadership on the international economic issues that are so critical to our economic well being."
Rubin, 60, felt that the time is right for him to step down, allowing Summers to finish out the rest of the administration.
Summers "is brilliant, able, a critical part of our economic team during the entire life of this administration -- therefore, deeply knowledgeable, more than ready to steer our nation through the strong and sometimes turbulent currents of the new economy," Clinton said.
Summers may face some opposition though from Senate Republicans who must approve the nomination, as he is viewed as more liberal than the market-oriented Rubin. (Full story)
But Rubin has groomed his trusted deputy for the position and has already been on the phone with Republican senators in support of Summers' nomination.
"Larry and I have been true partners through this whole period, and it's been a wonderful, wonderful partnership," Rubin said.
"Rarely has any individual been so well-prepared to become secretary of the Treasury," the president agreed.
Stuart Eizenstat, a senior State Department official who was a top adviser to President Jimmy Carter, was nominated by Clinton to replace Summers as deputy secretary.
Rubin first met Clinton in 1991 and the two bonded quickly. Rubin became a frequent economic advisor to the 1992 Clinton-Gore ticket, and helped to raise money for the successful White House run.
He was considered on a short list for Treasury secretary when Clinton was first elected, but the new president instead went with renowned Washington hand, former Texas Sen. Lloyd Bentsen. Rubin was tapped to head the National Economic Council.
In that position, Rubin argued for steep deficit reduction in Clinton's early budgets. He also pushed to make the administration's health initiatives business-friendly, and counseled the president against "tax the rich" rhetoric. Though his fingerprints were on the president's ill-fated 1993 stimulus package, Rubin could claim part of the credit for one of the Clinton's major first-term victories -- passage of NAFTA.
The president nominated Rubin as Bentsen's successor at Treasury in 1994. After a quick confirmation, Rubin was soon confronted with a financial crisis in Mexico, and he orchestrated the Clinton Administration's controversial $20 billion loan guarantee program. More recently, he faced the economic crisis in Asia, developing a bailout package to support the Japanese yen.
Rubin graduated summa cum laude from Harvard University in 1960 and from Yale Law School in 1964. Initially signing on with a Wall Street law firm, Rubin soon followed budding interests in finance to investment banking firm Goldman Sachs & Co., where he quickly displayed a flair for predicting profitable risk arbitrage and trading stock options. After 21 years, he was named co-chairman, amassing some $100 million along the way.
CNN's John King and Kathleen Koch contributed to this report.