Remarks Announcing Changes in the White House Staff and an Exchange With Reporters

The President. Good afternoon. Today I want to announce some changes in personnel in the White House that will add strength and vitality to this White House and to our administration.

In the coming months, this White House faces a series of major challenges that are critical to the American people. In Congress, we're seeking to pass the first major health care reform in history, a sweeping crime bill, a significant trade bill, a reemployment act, lobbying and campaign finance reform, and welfare reform. We're seeking to pursue our continued efforts in economic reform and deficit reduction, producing now 7,000 jobs a week. Overseas we face serious issues well-known to all of you. We've embraced an agenda that is not only daunting but profoundly important to the American people. To meet those challenges, here at the White House we must use our people as wisely as possible, matching their talents to their responsibilities.

More than a month ago, my Chief of Staff, Mack McLarty, started some discussions with me on ideas that he had for a better deployment of our people. These provided the basic framework for the decisions I announce today. I came home from D-Day determined to proceed with these changes. He and I worked with the Vice President and others on these recommendations, which I am pleased to announce today.

Today I'm naming Mack McLarty as Counselor to the President. He has been and will continue to be my closest and most trusted personal adviser. His new role will permit him to spend much more time as my personal representative to the people who are so important to the success of this administration's efforts, Democrats and Republicans in Congress, constituent groups of all kinds, friends who helped to bring me to the White House. In addition, I am asking him to assume greater responsibility in shepherding our legislative program through Congress, including GATT, health care, and welfare reform, and to help lay the groundwork for summits this year with the Latin and Asian leaders.

Mack McLarty has served this country ably and well as Chief of Staff for 18 months. He was reluctant to take the job, and I will always be grateful that he did. He selflessly agreed to serve the country, and I would say he has a record he can be proud of. We had the most productive first year of working with Congress of any administration over three decades; the sparking of an economic recovery; 3 years of deficit reduction for the first time since the Truman Presidency; breaking gridlock on the Brady bill, family leave, assault weapons, and other issues; progress in pushing historic plans for health and welfare reform. He's run an open White House, treating others and their ideas with unfailing courtesy. He has, in short, delivered with the decency, integrity, and goodwill that has endeared him to many good people here and throughout the Nation. And I thank him for his service.

I am delighted today to say that Leon Panetta will succeed Mack as White House Chief of Staff. Over the past year and a half, he has been a pillar of strength for our administration. In the early days, he was a prime architect of the economic strategy, an integrated plan that reduced the deficit and laid the foundation for sustained economic growth. Then he took the lead in formulating and gaining passage of that deficit reduction package, the largest in the history of our Republic. He will go down in history as the Budget Director who began to slay the deficit dragon.

In an era of tightening budgets, he also found ways to fund many of my initiatives to put people first: education, job training, and technology. He's worked closely with the Vice President in reinventing the Government. He's been an innovative adviser in drawing up a host of domestic policies. And he has been a skillful manager of the more than 500 people who work under his leadership at OMB. As the good citizens of Rome have learned, he also speaks pretty good Italian. [Laughter] No one in Washington has a better understanding of both ends of Pennsylvania Avenue than Leon Panetta. And no one has earned greater respect at both ends.

I am also announcing today that I will nominate Alice Rivlin to be the next Director of the Office of Management and Budget. She has been a superb deputy at OMB. She's played a major role in helping to run that organization and in chairing the President's Management Council and in gaining congressional approval of our budgets.

She brought with her to this administration a long and distinguished record. She was, of course, the founding director of the Congressional Budget Office, serving there for more than 8 years. And she's written pathbreaking studies of fiscal policies while at the Brookings Institution. Economists have recognized her leadership and her brilliance, electing her in the past as president of the American Economic Association. In short, OMB will continue to be in very good hands.

Finally, I want to announce a shorter term assignment. For the past year I have drawn heavily upon the counsel of David Gergen. He has been a wise and steady voice for bipartisanship, for moderation, and for an effective Government. It has been widely understood that he anticipates returning to the private sector in the next few months. I have asked David to stay on for the remainder of the year and to concentrate his full energy in the foreign policy arena.

On several occasions in the past, and more and more in recent months, I have found him helpful in the formulization, conceptualization, and the communication on national security matters. I now want him to play a larger role, joining my team as a principal adviser in this field. Other members of our foreign policy team have expressed their enthusiasm, and David has graciously agreed to serve as a special adviser to both the President and the Secretary of State.

Taken together, I believe these appointments will produce a stronger, more energetic, and a unified team for the administration and for the daunting challenges ahead.

I thank all of them for their willingness to serve. I'd like now to ask them each in turn to make a few remarks, beginning with Mr. McLarty.

[At this point, Thomas F. (Mack) McLarty, Leon E. Panetta, Alice M. Rivlin, and David R. Gergen made brief remarks.]

Q. Mr. President, despite musical chairs, this may be viewed as a repudiation of your team and what you've had so far in the Presidency.

The President. Well, I long ago gave up trying to determine how it's viewed by other people. All I can tell you is, I think it's a real tribute to Mr. McLarty that he came to me several weeks ago and suggested that we consider this and even mentioned Leon's name to me, and we began to talk about it. I think the job of the President is to make the White House as effective as possible, which means you have to use the people at their highest and best use. I think that's what I'm doing. I also think it's— someone might question the decision in light of the successes that have been chalked up. I think we have done a good job with a huge agenda; I think it's getting bigger and more complex. I think that this is the right thing to do at this time, and I think it will pay off. That's all I can tell you. My job is to do the best I can by the American people and let others do the interpreting.

Q. Mr. President, recently there was documented in Bob Woodward's book a lot of criticism of Mr. Panetta from your political advisers.

And I guess one question is, how do you feel about that criticism of Mr. Panetta's economic policies? Will there be a tension now between your political staff? And how do you feel about the decision to have yet another of your close Arkansas friends take a step either out or down? Sideways?

The President. He's not going anywhere. He's my closest friend. And I don't want to get into that. I can win that argument. But I can't comment on Mr. Woodward's book. I don't—"documented" may be too strong a word, but I think that everybody who's worked with Leon Panetta has a great deal of respect for him. I thought that the transition debates we had over economic policy were good, helpful, and appropriate. We were trying to turn a country around after going 12 years in one direction.

He will go down in history as the OMB Director that did, I think, virtually the impossible, not only produced the biggest deficit reduction package in history, the first two budgets to be adopted on time in 17 years, 3 years of deficit reduction in a row for the first time since Harry Truman, the first reduction in domestic spending, discretionary spending in 25 years but, in spite of all of that, substantial increases in Head Start, job training, other education investments, and new technologies, the things that I ran to do: bring the deficit down, get the economy going, invest in people. So I think—he's clearly done what I wanted to do. I signed off on those decisions, I think he's done well, and I think he's done it with a very effective management style. I feel a high level of confidence in him.

Q. Mr. President, I'm not clear on what you're trying to fix. What wasn't happening——

The President. He is a former Republican, and I'm a Baptist. We set great store in deathbed conversions. [Laughter] To me, that makes him even more valuable as a Democrat. I'd like to have more people do the same thing.

Q. Mr. President, what are you trying to fix? What wasn't happening that you want to happen?

The President. I think you should let our words speak for themselves. I was trying to think of how I could characterize this. This is really an attempt to do exactly what I said: find the highest and best use for talented people of good will who just want to serve their country. And this shows you what a sports—I don't like all the time politicians making sports analogies, but 50 years ago, Army had an all-American backfield of Doc Blanchard and Glenn Davis. And one was called Mr. Inside and one was called Mr. Outside, reflecting that they had different skills, but they were both all-Americans. I think that's what we have today, and I think it's the best thing for the country. And I think in the weeks and months ahead, we'll see it proved out.

Thank you.