Steve Friedman to Step Down at the NEC

Via Angry Bear and the Washington Post, we learn that Steve Friedman will be stepping down as the Assistant to the President for Economic Policy and Director of the National Economic Council at the end of the year. I had the chance to work with Steve while at the Council of Economic Advisers and am grateful for the opportunity. I learned a lot from my interactions with the NEC. The Post discusses some possible replacements:

Conservatives are pushing former senator Phil Gramm (R-Tex.), publisher Steve Forbes or a top business leader, such as Fred Smith, chairman of FedEx Corp. Also under consideration is investment banker Gerald Parsky, who served on Bush's Social Security commission, and Indiana businessman Al Hubbard, a longtime friend of the Bush family.

I cannot imagine them choosing anyone from this list other than Phil Gramm. Quoting from the White House website, by Executive Order, the NEC has four principal functions:

1. to coordinate policy-making for domestic and international economic issues,
2. to coordinate economic policy advice for the President,
3. to ensure that policy decisions and programs are consistent with the President's economic goals, and
4. to monitor implementation of the President's economic policy agenda.

The first two functions are the "honest broker" role that the NEC plays in coordinating the workflow of economic analyses in the rest of the Executive Office of the President, the Cabinet departments, and other agencies. The key job requirement is to be a taskmaster.

The third function shows up in the way senior staff meetings are run--get all the Principals to agree to a coherent proposal and then present it to the President. The key job requirement is to be smart--really, really smart--because the range of issues that the NEC deals with is very broad and the need to stay focused on good policy is paramount. There is no need to be an economist with a Ph.D.

The fourth function involves making sure that the proposal stays true to the President's objectives when it moves down Pennsylvania Avenue, in conjunction with the White House Office of Legislative Affairs. I have no idea what the secret handshakes are on the Hill. I couldn't learn them in a year in Washington watching from afar. The key job requirement is to get someone who does. This is why it is not surprising to me that the NEC is staffed largely by people who were extremely successful as policy directors or chiefs of staff for prominent Senators and Representatives or their committees.

I don't know enough about the people listed by the Post to be able to judge how well they would do in the job. It does seem that Senator Gramm has enough credibility and experience to be effective in all four of the NEC's principal functions. But the article doesn't say that the White House was actively considering him--only that conservatives were pushing him.

If it were up to me, I'd promote from within. The current NEC deputy director is Keith Hennessey. He not only has the key job requirements for the four principal functions of NEC, but he has them in spades. Let's hope the White House finds a way to keep him on the senior staff.