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Treasury Secretary O'Neill, White House Economic Advisor Resign - 2002-12-06

U.S. Treasury Secretary Paul O'Neill resigned Friday along with the White House economic advisor in the first cabinet shake-up for President Bush.

White House spokesman Ari Fleischer says Treasury Secretary O'Neill and White House Economic Advisor Larry Lindsey will both likely work through the end of the year before their replacements are named.

Mr. Fleischer read a statement from President Bush that said his economic team has helped lead the nation out of recession into what he calls "a period of growth." The president's statement read: "I appreciate Paul O'Neill and Larry Lindsey's important contributions to making this happen. Both are highly talented and dedicated and they have served my administration and nation well. I thank them for their excellent service."

Secretary O'Neill is the first cabinet-level official to leave the Bush Administration. Mr. Fleischer would not say whether the men were fired, insisting that they both chose to resign at the same time.

Secretary O'Neill's resignation letter thanked the president for the opportunity to serve the nation during what he called "these challenging times." The former corporate executive is expected to devote his time to improving health care and education in the city of Pittsburg.

Mr. Fleischer says Mr. Lindsey looks forward to returning to the private sector.

Financial analysts predict a shakeup of the president's economic team could restore investor confidence and blunt criticism that the administration is not paying close enough attention to the nation's sluggish economic recovery.

President Bush says the economy is "bumping along" but he remains confident in what he says is an economy that is "fundamentally sound." Mr. Fleischer says the president believes the economy is recovering. "The economy has gotten the boost and the recovery since this team and since President Bush took office," he said. "The president looks forward to announcing new names of people who will continue the administration's efforts to give the economy increased impetus to grow as we work with Congress on that."

U.S. companies cut 40,000 jobs in November, pushing the unemployment rate up to six percent. That matches an eight-year high set in April and has raised fresh concerns about the strength of this recovery.