US treasury position still in question

President George W. Bush is likely to consider California venture capitalist Gerald Parsky and former Republican Representative Bill Archer as he picks a successor to Treasury Secretary Paul O'Neill, investors and political analysts said.

Archer, who is from Bush's home state of Texas, was named as a candidate by Senate Republican leader Trent Lott. Archer said he hasn't been asked to take the position. The New York Times said Parsky, who is a friend of Bush and raised money for his presidential campaign in California, is being considered.

Bush dismissed O'Neill yesterday and dismantled his economic team as rising unemployment slowing growth point to a faltering recovery. His new Treasury chief must generate optimism among consumers and investors, and polish a package of tax cuts now under consideration to stimulate the economy, analysts said.

"The main objective now is to have a person capable of selling an economic plan and restoring confidence," said Philippa Malmgren, until September a White House economic strategist and now head of the Canonbury Group, an investment advisory firm in Washington and London.

Wall Street executive Charles Schwab, Commerce Secretary Donald Evans and Frank G. Zarb, retired chairman of the NASDAQ Stock Market Inc, are also among those mentioned for the job.

O'Neill's replacement must be confirmed by the Senate.

Bush also fired his chief economic adviser Lawrence Lindsey yesterday, widening a vacuum in his economic and financial team.

Securities and Exchange Commission Chairman Harvey Pitt resigned last month and Deputy Treasury Secretary Kenneth Dam is also set to leave, a senior administration official said. Former Goldman Sachs Group Inc. Co-Chairman Stephen Friedman is Bush's pick to take Lindsey's job, another administration aide said.

Friedman, senior principal of Marsh & McLennan Capital Inc, led Goldman in the early 1990s with Robert Rubin, a former Treasury secretary and now chairman of the executive committee of Citigroup Inc. Rubin served as the principle White House economic adviser in his first job in the administration of President Bill Clinton.

Archer served in Congress for two decades and when he retired was chairman of the taw-writing Ways and Means Committee of the House of Representatives. He currently is a senior adviser to PricewaterhouseCoopers LLP in Washington.

Parsky is chairman of Los Angeles-based Aurora Capital Partners LP. He sits on Bush's commission to devise ways to overhaul Social Security and led an effort to restructure California's Republican party.

He was named as a possible Treasury secretary when Bush took office almost two years ago and served in the Treasury as an assistant secretary during the 1970s under President Gerald Ford.

Evans is a 25-year ally of Bush and helped to raise a record US$98 million when the then-governor of Texas ran for the White House. The onetime oilman last month described the economy's recovery as ``uneven.'' Schwab, chairman of brokerage Charles Schwab Corp., was a lead speaker at Bush's economic summit in August and has advised the president on tax policy.

White House aides said no job offer has been made and some analysts said the eventual nominee may be a surprise, just as O'Neill was when Bush picked him in December 2000.

The exits of O'Neill and Lindsey leave Glenn Hubbard and Josh Bolten, two Bush aides who aren't well known on Wall Street, as the White House's core economic strategists and lead advocates for his economic program.