Greenspan Stays at Fed Helm: No. 2 Spot Goes to Rivlin
Hill, Patrice, The Washington Times (Washington, DC)
President Clinton yesterday nominated Alan Greenspan for a third term as Federal Reserve chairman and, in a surprise move, named White House budget director Alice Rivlin to the Fed's No. 2 slot.
Mr. Clinton also named Lawrence H. Meyer, a respected St. Louis economic forecaster and Washington University professor, to a third Fed post that has been vacant for nearly a year.
With the trio of nominations, Mr. Clinton hopes to clinch a rare majority on the powerful seven-member board, which is charged with keeping inflation at bay and steering the economy clear of financial calamities.
Mr. Greenspan's reappointment for another four-year term was cheered both by the financial markets and congressional Republicans, who credit the Fed chairman first appointed by former President Reagan with bringing inflation to the lowest level in three decades while promoting the second-longest postwar expansion.
"During his tenure he has inspired confidence, and for good reason," said Mr. Clinton, noting Mr. Greenspan's cooperation with the administration in bolstering the dollar and the Mexican peso during currency crises in the past year.
Mr. Clinton said he had to personally persuade Mrs. Rivlin, who as director of the Office of Management and Budget has been the administration's strongest advocate for a balanced budget, to leave her White House duties to become the Fed's vice chairman. She would be the first woman to fill that post.
Only two weeks ago, Mrs. Rivlin said that "no way, no how" would she take the Fed job while the "historic" business of completing a balanced budget remains unfinished.
Mr. Clinton noted Mrs. Rivlin's stalwart independence - "she always calls it as she sees it" - and joked about using his "powers of persuasion" to change her mind. "Battered and bloody though I may be, I can still, once in a while, make a good argument."
Mr. Meyer, an economic consultant to Mr. Clinton during his 1992 campaign, is renowned as one of the most accurate economic forecasters in the country, having won the Blue Chip award for forecasting in two of the past three years. He fills a Fed seat vacated by former Gov. John LaWare last March.
Unlike previous Fed candidates whose names were floated by the White House, key Republicans said the trio has a good chance of being approved by the Senate.
"The initial reaction has been positive," said Sen. Connie Mack, a member of the Senate Banking Committee who took the lead in opposing earlier candidates.
"My instincts say that these three appointments put in place a board that is committed to price stability," which is the prime concern of Republicans, the Florida Republican said.
Just last week, members of the panel quietly rejected Mr. Clinton's first choice, New York investment banker Felix Rohatyn, for the vice chairman's slot vacated by Alan Blinder in January.
Mr. Rohatyn, a partner at Lazard Freres & Co. …