Bush Economic Adviser Hubbard Resigns

The unrelenting saga continues to mount for the embattled Bush administration.

Economic Council Deputy Nominated As Replacement

WASHINGTON (CBS) ― President Bush announced on Wednesday that Keith Hennessey is his pick to be chairman of the National Economic Council, replacing Al Hubbard, who is joining a growing line of top presidential advisers exiting the White House as the Bush administration heads into its final year.

Hennessey, who came to the White House in 2002, is Hubbard's deputy and also has been deputy to two previous directors of the council. He served as a top budget aide to Sen. Trent Lott, R-Miss., and worked for the Senate Budget Committee.

"Keith has been an important member of my White House team for more than five years," Bush said in a statement. "He has served as the deputy to three directors of the National Economic Council, and has worked on a broad range of economic policy issues."

Hubbard's departure comes as Bush faces one of the biggest economic challenges of his presidency, a severe slump in housing and a credit crisis that have roiled financial markets and triggered fears of a recession.

In a letter to the president, Hubbard said he was leaving the White House with mixed emotions. "Were it not for my strong desire to spend more time with my kids, I would not have considered departing," said Hubbard, the father of three.

Hubbard has helped direct White House policy on entitlement reform, energy security, climate change, housing and trade investment policy. Among other issues, Hubbard has been deeply involved in the debate over the State Children's Health Insurance Program and Bush's proposal for a major shift in tax policy to, for the first time, treat health insurance costs as taxable income.

"Al contributed his own ideas and also worked to ensure that all views were brought to the table and given fair analysis and debate," Bush said. "While many of the policies Al worked to develop are in place today, other policy initiatives, including Social Security reform and health care reform, have laid the foundation for policies I believe will be adopted in the future."

Hubbard's departure, by the end of the year, continues an exodus of key Bush aides and confidants. Earlier this month, Fran Townsend, Bush's terrorism adviser, announced she was stepping down after 4 1/2 years. Top aide Karl Rove, along with press secretary Tony Snow, Attorney General Alberto Gonzales, Undersecretary of State Karen Hughes, Defense Secretary Donald Rumsfeld and senior presidential adviser Dan Bartlett, have already left.

Hubbard, of Indiana, was a low-profile economic adviser to the president whose strength came from his closeness to Bush. The two both attended Harvard University together. Hubbard also has close ties with Treasury Secretary Henry Paulson. Hubbard accompanied Paulson on some of his trips to China to lend White House support to efforts to get China to reform its economy and narrow the huge trade imbalance between the two nations.

The National Economic Council was created in the Clinton administration to coordinate economic policy. The first NEC director was Robert Rubin, who went on to become Clinton's Treasury secretary.

Hubbard took the post at the beginning of Bush's second term, when the administration had high hopes for achieving success on a number of major issues such as addressing Social Security's funding problems and overhauling the tax code. However, as Bush became mired in problems involving the Iraq war, his domestic initiatives failed to make headway in Congress.

"Al brought to this job more than the creativity that he's known for," White House press secretary Dana Perino said. "He has a great booming laugh, but he also is a very honest broker when he works with everybody at the White House. Part of his role is to incorporate all of the thoughts and concerns and proactive ideas that members of the administration have."

Hubbard first met Bush when they were both attending Harvard's business school in the 1970s, getting MBA degrees. Hubbard, who later became president of E&A Industries, an Indianapolis investment firm, has owned and operated several businesses and served in the Bush-Quayle administration as executive director of a council on competitiveness. He has not yet announced his future plans.