Bush names new budget director

By JIM RUTENBERG
and EDMUND L. ANDREWS
The New York Times

WASHINGTON - President Bush continued the gradual overhaul of his staff on Tuesday, turning to another trusted insider, Rob Portman, the U.S. trade representative, to be his budget director.

In selecting Portman, 50, to oversee the Office of Management and Budget at a time of large deficits, Bush chose a pragmatist who has worked across party lines in the past. Portman served in the House from 1993 until last year, and with the appointment, Bush was responding in part to pressure from within his party to build better ties to Capitol Hill.

As a Republican representative from Ohio, Portman was a member of the budget and ways and means committees in the House, and often acted as a liaison between the White House and congressional Republicans. He left Congress to become the administration's top trade negotiator. In his new job he will replace Joshua B. Bolten, who last week took over as Bush's chief of staff.

Officials said that among Portman's top priorities would be dealing with a rapid rise in government spending that has created unhappiness among many conservatives and meeting Bush's goal of cutting the federal budget deficit in half over five years.

Former colleagues in both parties said he was viewed as a practical politician first and a fiscal conservative second. There is little indication that Portman will bring with him any substantial change in the administration's budget policy, though when he was in the House, he occasionally bucked the White House.

It was unclear Tuesday how Portman's promotion would be viewed by those urging the president to bring in new blood, fresh ideas and a different viewpoint to a White House long controlled by a circle of close Bush loyalists.

Portman is a longtime associate of the president's family. He served in Bush's father's administration, first as an associate counsel and later as the head of the White House office of legislative affairs. In the past two elections, Portman was Vice President Dick Cheney's main debate sparring partner, playing the role of the Democratic vice presidential nominee in 2000 and 2004 - Sen. Joseph I. Lieberman of Connecticut and Sen. John Edwards of North Carolina.

Portman's elevation was the first personnel move under Bolten's watch. Bolten said on Monday that he intended to move quickly to fill voids and "refresh and re-energize" the White House staff. White House officials described Portman's selection as the first of several personnel changes meant to help the White House recover from a series of missteps, bad news from Iraq and declining poll numbers.

Portman is to be succeeded by his deputy at the trade representative's office, Susan Schwab, who had also worked for Bush's father's administration, in the Commerce Department, focusing on trade issues. Both choices must be voted on by the Senate. The White House also announced Tuesday that James Towey, the head of the president's office of Faith Based and Community Initiatives, was resigning to become president of St. Vincent College in Latrobe, Pa. But officials indicated the move was in the works before Bolten began working on his overhaul of the White House staff.

Speaking in the Rose Garden Tuesday, Bush said Portman's job would entail meeting the president's goal of cutting the deficit in half by 2009 from its 2004 level and making permanent the tax cuts he pushed through Congress starting in 2001.

After presiding over a rapid increase in government spending, driven largely but not completely by military and national security programs, Bush has been emphasizing spending restraint in many nonmilitary programs, responding in part to pressure from conservatives.

"He will consult often and work closely with legislators on Capitol Hill," Bush said of Portman. "He will be a powerful voice for pro-growth policies and spending restraint." White House officials said the choice of Portman was made in consultation with congressional Republicans.

Sen. Harry Reid of Nevada, the Democratic minority leader, issued a critical statement about the appointment. But some Democrats complimented Portman, including Rep. Benjamin L. Cardin, D-Md., who worked with him on pension legislation and called him "intellectually honest."

Portman has shown an independent streak. In Congress he publicly opposed and quietly blocked a Bush proposal to create a new class of super-sized, tax-advantaged, individual retirement accounts.

Friends said Portman, who commutes between Washington and Cincinnati, is the sort who remains calm in crisis. Portman is known for his hobby as a kayaker: He kept a kayak in his office on Capitol Hill and would practice paddling in the House pool.

He has enjoyed a few victories as trade representative, like persuading Congress to approve the Central American Free Trade Agreement and completing deals with Bahrain, Peru, Oman and Colombia. But he has made little progress in negotiating other broad trade agreements.

By elevating Schwab, a comparatively low-profile official, to replace Portman, White House officials appear to be calculating that international trade negotiations will not be a major priority this year.

Now speculation in Washington is turning to the administration's next moves.

Bolten is widely expected to bring into the White House another seasoned hand with experience dealing with Congress, like Bill Paxon, the former Republican congressman from New York. And Republicans with close ties to the White House said they also expected him to perhaps bring in help on the communications side, possibly including a replacement for Scott McClellan, the White House press secretary. Republicans have been speculating about a lengthy list of potential successors, including Rob Nichols, the former Treasury spokesman, and Victoria Clarke, the former Pentagon spokeswoman.

US and Indonesia to launch negotiations on landmark illegal logging initiative

USTR Portman and Indonesia Trade Minister Pangestu Launch Negotiations on Landmark Illegal Logging Initiative -- Announce Concrete Steps to Deepen Trade and Investment Relations

Washington, D.C. - United States Trade Representative Rob Portman met today with Indonesia’s Minister of Trade Mari Pangestu, under the United States-Indonesia Trade and Investment Framework Agreement (TIFA), to discuss how to broaden and deepen the U.S. - Indonesian economic relationship.

"We are eager to grow the already strong trade and investment ties between the United States and Indonesia, a key trading partner and ally in an important part of the world," Ambassador Portman said. "We are considering specific initiatives to help support Indonesia’s efforts to strengthen its investment climate, as we are seeking to deepen our economic relations with Southeast Asia as a whole."

"We also discussed how we could work together to help achieve a successful outcome to the ongoing WTO Doha Round negotiations," Portman continued. "Indonesia is the largest economy in Southeast Asia and a major exporter of both agricultural and manufactured goods, so it has a lot to gain from a successful Doha Round."

Ambassador Portman also welcomed the launch of negotiations of the first-ever U.S. agreement to facilitate bilateral cooperation to combat illegal logging. During the TIFA discussions, the two sides made good progress on this issue, which is consistent with President Bush’s global Initiative to Address Illegal Logging that was launched in 2003.

"I am pleased to report that the United States and Indonesia are committed to concluding a landmark agreement to combat illegal logging and illegal trade in endangered species. This is a unique opportunity to strengthen our cooperation with Indonesia to better protect Indonesia’s parks, forests and sensitive habitats from illegal logging," Portman said.

Ambassador Portman and Minister Pangestu discussed the planned upgrade in cooperation between the U.S. and Indonesian customs agencies and joint efforts to enhance protection of intellectual property rights. They also reviewed investment reforms underway in Indonesia as well as additional steps the two sides could take to promote and facilitate additional foreign investment.

The meeting between Ambassador Portman and Minister Pangestu capped two days of TIFA meetings between delegations from both countries. The meetings covered a wide range of bilateral issues, including agriculture, investment, intellectual property, and customs, and transshipment of goods. Ambassador Portman and Minister Pangetsu also exchanged views on the Indonesian government’s ongoing anti-corruption campaign, which the U.S. Government strongly supports.

Background

Two-way trade between the United States and Indonesia totaled $15.1 billion in 2005, up 11.8 percent over the previous year. Indonesia is part of the ten-member Association of Southeast Asian Nations (ASEAN), which collectively is the fourth largest market for U.S. exports. With continued strong economic growth anticipated in ASEAN countries and a regional population of about 500 million, the United States anticipates significant future trade and investment opportunities for U.S. companies in this region.

The United States and Indonesia have intensified their discussions under the 1996 TIFA as envisioned under the Enterprise for ASEAN Initiative (EAI), which was announced by President George W. Bush in October 2002. As part of this initiative, the U.S. Government is seeking to further strengthen U.S. trade and investment ties to ASEAN, both bilaterally and regionally. The EAI offers the prospect of bilateral FTAs with ASEAN members that have TIFAs with the United States, are WTO members, and are committed to economic reforms and openness.

During the TIFA meetings, the two sides held intensive discussions on concluding as soon as possible an agreement to combat illegal logging. A bilateral United States-Indonesia agreement will build on existing Indonesian efforts to combat illegal logging in the forest sector and help ensure that Indonesia’s legally produced timber and wood products have continued access to U.S. and other international markets. The United States is focusing this effort on Indonesia because Indonesian forests and their biodiversity present a significant conservation opportunity. In addition, Indonesia has demonstrated a strong political commitment to addressing the problem and has asked for the United States to partner with it on this important effort. An agreement on combating illegal logging will further demonstrate a commitment to work closely together to address important trade and environment concerns.

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