By Nick Timiraos
Gary Cohn's resignation from his post as director of the
National Economic Council leaves a big opening in President Donald
Trump's economic team that could be a challenge to fill.
The White House is losing an official with Wall Street
credibility, given Mr. Cohn's long tenure at Goldman Sachs Group
Inc., but whose views on trade clashed with the president
himself.
The administration must now balance demands to find someone Mr.
Trump trusts, who can speak convincingly to investors and the
business community, and who can defend the president's
policies.
"It's going to be hard to find a smart economic mind who
supports the current agenda on tariffs," said Paul Winfree, who
served as deputy director of the White House Domestic Policy
Council last year until he resigned in December.
Mr. Trump's willingness to stir conflict among staffers and to
rebuff top officials who he believes haven't demonstrated loyalty
to him could complicate the search.
A White House official said Mr. Cohn was frustrated with the
decision-making process that led to Mr. Trump's announcement last
week that he would impose U.S. tariffs on imported steel and
aluminum.
Unlike cabinet agencies such as the Treasury Department or the
Office of Management and Budget, the NEC has no formal
responsibility for carrying out legislation or regulations.
The policy-making body has little authority beyond whatever
power the president places in it. Since it was created by President
Bill Clinton in 1993, it has served as a weigh station for forging
policy positions and resolving disputes that cut across multiple
agencies in the executive branch.
The profile of its director tends to wax and wane based on other
personalities in an administration and the degree to which the
president relies on the NEC's input. Mr. Cohn enjoyed a high
profile compared with many predecessors, including Robert Rubin, a
former co-chairman of Goldman who later served as Treasury
secretary for President Clinton, and Lawrence Summers, a former
Treasury secretary who held the NEC post for President Barack
Obama.
Mr. Cohn assembled a team of policy specialists on tax, finance,
health care and infrastructure who are well-regarded by business
groups and congressional Republicans. They kept relatively low,
drama-free profiles compared with other parts of the West Wing.
"The NEC has the strongest all-around policy team relative to
its size," said Mr. Winfree.
He credited Mr. Cohn with building a strong team by empowering
his No. 2, Jeremy Katz, to staff the council. Mr. Katz departed the
administration at the beginning of the year.
"Gary attracted outstanding people, and it's not obvious that
they stay, " said Tony Fratto, who served in the White House and
Treasury under President George W. Bush.
The White House hasn't outlined a timetable to name a
successor.
Potential candidates include CNBC commentator and former Trump
campaign adviser Lawrence Kudlow; Council of Economic Advisers
Chairman Kevin Hassett; and Peter Navarro, a trade adviser who won
out over Mr. Cohn in the White House battle over steel tariffs,
according to an administration official.
Officials are also considering Andy Puzder, a fast-food
executive who withdrew his labor secretary nomination. Mr. Puzder's
confirmation was in doubt after he disclosed a failure to pay taxes
for an undocumented housekeeper and decades-old domestic-abuse
allegations from an ex-wife surfaced.
Mr. Puzder, who has denied the claims, would be willing to serve
in the administration, a spokesman said Wednesday.
Other candidates who could receive consideration include
private-equity investor Thomas Barrack Jr.; budget director Mick
Mulvaney; and one of Mr. Cohn's deputies, Shahira Knight.
Some of these potential replacements have been outspoken against
the president's tariffs.
Mr. Kudlow said in an interview last week the tariffs were
shortsighted and distracted the U.S. from the more important issue
of punishing China for oversupplying steel and aluminum markets.
Instead the tariffs punish U.S. allies, he said. The tariffs also
threaten to undercut the economic gains from tax cuts the president
signed into law in December, he added.
Before joining the administration, Mr. Hassett advocated for
fewer restrictions on trade. At a congressional hearing Wednesday,
Mr. Hassett said the costs of new tariffs would be outweighed by
benefits to national security.
Current and former administration officials predicted most of
the NEC staff would leave if Mr. Navarro took the post.
A White House official said Mr. Cohn quit in part due to his
frustration with the process in the tariff debate, not because of
the policy decision. Mr. Navarro went around the NEC to push for
tariffs directly with Mr. Trump, and Mr. Trump agreed, announcing
the decision without first telling his senior staff.
"What's Gary doing there if people can ignore the process?" Mr.
Fratto asked. "That's literally his job -- to manage the
process."
While Mr. Cohn's resignation could clear an obstacle for trade
skeptics like Mr. Navarro, some observers cautioned against
exaggerating their influence.
Mr. Navarro hadn't persuaded the president of "something he
wasn't already persuaded of," said Joshua Bolten, who served as
chief of staff to Mr. Bush and now heads the Business Roundtable, a
trade group that opposes broad tariffs.
Write to Nick Timiraos at nick.timiraos@wsj.com
(END) Dow Jones Newswires
March 07, 2018 18:38 ET (23:38 GMT)
Copyright (c) 2018 Dow Jones & Company, Inc.
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