Rubin resigns Treasury post; Summers to succeed him

Speculation that had been circulating around Washington for months became reality Wednesday, as President Clinton announced Treasury Secretary Rubin would step down in early July. Rubin's protege, Deputy Treasury Secretary Lawrence Summers, will be nominated to replace him.

Rubin-who began his tenure with the administration in January 1993 as head of the White House's National Economic Council, following a lengthy career at the Wall Street investment banking firm of Goldman Sachs-is expected to leave around July 4. The 60-year-old Rubin succeeded Lloyd Bentsen as head of the Treasury department in 1995.

President Clinton announced the departure of Rubin-who, along with Federal Reserve Chairman Greenspan, is given much of the credit for the domestic economic boom of recent years-at the White House Wednesday afternoon.

Under Secretary of State for Economic Affairs Stuart Eizenstat, who has served Clinton in numerous capacities after heading the White House domestic policy staff under then-President Carter, will be nominated to replace Summers in the No. 2 Treasury slot. Before moving to the State Department, Eizenstat was an undersecretary in the Commerce Department as well as ambassador to the European Union.

Robert M. Tobias, president of the National Treasury Employees Union, which represents more than 110,000 employees at the department, credited Rubin with improving labor-management relations during his tenure. "Secretary Rubin understands the meaning of civil service, which I think, made him appreciate and respect federal workers in a way that eludes some political appointees," Tobias said.

Clinton aides insisted both privately and publicly Wednesday that the transition from Rubin to Summers will be seamless-at least on the policy front-with several alluding to the strong "partnership" between the two.

"On issue after issue, they see eye to eye," said a senior administration official. "I would expect the direction of Treasury to change only ever so slightly."

The differences may center more on style, sources said. Summers, a former Harvard professor whose academic background contrasts with Rubin's Wall Street resume, is more likely to immerse himself in the details of policy. And Summers is known to lack both the people and organizational skills of Rubin.

"I don't think Larry's forte is management," said one administration source, indicating that oversight of day-to-day operations may fall more to Eizenstat.

Summers also is likely to have a more public face than Rubin, appearing more frequently on TV. "Rubin on weekends went home [to New York] and was happy to stay there," said one source. Rubin's wife never moved to the nation's capital during his tenure; Rubin has maintained a weekday residence in a Washington hotel.

Summers appears prepped to move into one of the most critical roles Rubin has played during the past 18 months-that of chief steward guiding the world economy out of crisis.

From April 1993 until he became deputy secretary in August 1995, Summers served as Treasury undersecretary for international affairs. From 1991 until 1993, he was vice president of development economics and chief economist of the World Bank.

More recently, Summers was tapped by Rubin to be his point man on Social Security. Summers played a key role in developing Clinton's Universal Savings Accounts, attending every White House meeting on the subject, according to one official.

"There has probably never been somebody who was so prepared to lead the Department of Treasury," White House Press Secretary Joe Lockhart said of the 44-year-old Summers.