President George W. Bush continues to "review the economic data, to make a determination about what steps are necessary to keep the economy moving so we can continue to move from recession into higher growth" and make the necessary determinations," it said.
"I think you can assume that on all these issues -- Social Security reform -- all the issues that are under the purview of these individual offices, that their offices and their successors will of course take a look at the same issues and work with the president," Spokesman Ari Fleischer commented at a news briefing. "And as always, the president will be the one who sets the policy and dictates the direction, and he welcomes the workings of a good team as he does that."
O'Neill and Lindsey, architect of the president's tax cuts, resigned Friday morning as the Labor Department reported the highest level of unemployment in several months.
People out of work in November hit 6 percent -- up from 5.7 percent in October -- as companies slashed more than 40,000 jobs.
The White House denied the resignations were tied to the gloomy economic figure, but President George W. Bush has for weeks stressed concern over an economy that he concedes is just "bumping along" and spoken passionately of his determination to create jobs for people who want to work.
Interest rates are down, inflation is down and economic growth is occurring, but much more needs to be done to stimulate the economy, he said throughout last month's midterm election campaign.
"My economic team has worked with me to craft an economic agenda that helped lead the nation out of recession and back into a period of growth," Bush said Friday in a statement on the resignations . "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."
Speculation was rife Friday that both O'Neill and Lindsey had been asked to resign. Whiter House spokesman Ari Fleischer did nothing to dispel the impression.
"They resigned," Fleischer said repeatedly when asked if the departures were part of a house cleaning.
"I've said everything I'm going to say" on that.
"The answer will always be the same. They resigned."
O'Neill, 67, has been a lightning rod for criticism by Democrats and others over the economy, an issue they will hammer in the 2004 Presidential Election unless there is a dramatic improvement.
"The data continues to be mixed on the economy," Fleischer said, and Friday's unemployment figure "was a setback" for positive trends.
A shake-up of the administration's economic team, however, was not an attempt to breathe new life into economic stimulus, he added.
"I think it's fair to say that the president looks at the economy as a matter that is bigger than any one person or any one expert. And the president looks forward to working with the Congress to advance policies and plans that help get the economy growing even stronger," Fleischer said.
Fleischer said no successor for O'Neill was in place, but the president would look for a candidate with government and private-sector experience.
Economist Steve Moore, who heads the Club for Growth, a pro-supply-side political organization, sees the openings as a chance for the Bush administration to really move ahead on the economic front.
"America needs a committed and enthusiastic supply-sider in both these jobs," Moore told United Press International. "Paul O'Neill was never a big fan of the tax-cut agenda and that hurt him," Moore said, mindful of the fact that neither O'Neill nor Lindsey had good relations with members of Congress.
"If you are trying to pursue major economic reforms, you cannot succeed if you cannot get along with members of the House and Senate," he said.
Moore says that what the economy needs right now more than anything else are policy-makers who are "passionate advocates of supply-side economic policies including free trade, supply-side tax cuts and tax reform."
For the Treasury job, Moore recommends former Texas Republican Sen. Phil Gramm, magazine publisher Steve Forbes or former Delaware GOP Gov. Pete du Pont, all of whom are leaders of the supply side movement.
"The one thing O'Neill was a star on was tax reform," Moore says. "We need a team that is going to pick up the torch and run with the idea of replacing the income tax with either a flat tax or a consumption-based system. The key components of any plan are lower rates, simplicity and an end to the double-taxation of savings and investments."
Moore also wants to see a supply-sider replace Lindsey as head of the National Economic Council to increase the push for pro-growth policies inside the White House. Among those Moore hopes the president considers are financier Charles Schwab, former U.S. Chamber of Commerce Chief Economist Richard Rahn or Charles Kadler, the chief economist for the investment firm J. W. Seligman.
O'Neill was head of the industrial giant Alcoa when Bush tapped him to be his administration's first treasury secretary, largely because of his close relations to Vice President Dick Cheney and Federal Reserve Chairman Alan Greenspan.
Lindsey is a prominent supply-side economist who was appointed a Federal Reserve governor by the current president's father. Lindsey also played an important advisory role in President George W. Bush's 2000 presidential campaign.
Both men have been the focus of criticism from the GOP pro-growth wing for some time. Calls for O'Neill's resignation have built steadily almost from the beginning.
Initial statements that he intended to keep some $100 million in stock in Alcoa following his appointment stirred up a hornet's nest, and O'Neill had to reverse course and divest himself of it. He was also heavily criticized for failing to talk up the stock market as it tumbled last summer.
Early speculation as to their replacements is mute, but names frequently mentioned in the past include retiring House Majority Leader Dick Armey of Texas, former Texas GOP Sen. Gramm, magazine publisher Forbes and Bill Archer, former chairman of the House Ways and Means Committee -- all favorites of the GOP's pro-growth wing.
In reacting to O'Neill's resignation, Sen. Patrick Leahy, D-Vt., said: "Secretary O'Neill is not the problem, the (Bush) administration's policies are. In fact he has often been a constructive influence.
"Delaying this step until after the elections is cynical enough, but it will be worse if the White House tries to cast him as the emblem of what's wrong with the economy," Leahy's statement added. "If they do that, they will be misleading the American people and ignoring the things that really are holding the economy back."
Democrats tried to banner the economy in midterm elections, only to see an electorate more concerned about the war on terrorism and a possible conflict with Iraq.
The result: Republicans gained seats in the House and recaptured the Senate, bucking historical trends for midterm contests.
Robert M. McNamara, a former Assistant General Counsel for Enforcement at the Department of the Treasury, where he supervised lawyers assigned to the U.S. Customs Service, the Secret Service, Alcohol, Tobacco and Firearms and the Financial Crime Enforcement Network, praised O'Neill Friday.
"Putting aside arguments on taxes and recession, I think he will go down as one of the most aggressive secretaries on the enforcement side," McNamara said.
He said O'Neill never sent mixed signals about enforcing money laundering laws.
McNamara said he saw a six-point jump in the stock market after the pair resigned, but stressed it was hard to say what long-term impact on the U.S. economy the actions would have.
"It's hard to say at this point. We're in the middle of a buying period that even surprised retailers. We still have large [corporate] bankruptcies looming," McNamara said.
While reports indicate that Bush wanted a change in his economic team, McNamara said he hoped that O'Neill's replacement would be as aggressive in enforcement. He predicted that Deputy Secretary Kenneth Dam could be in line to take O'Neill's place. He called Dam "a creative thinker" who could "maintain the continuity of message" for the administration.
"He's a known quanity. There's no hidden agenda," McNamara said of Dam.
(Kathy Gambrell in Washington contributed to this story.)