Bush economic adviser Hubbard resigns

By Jeremy Pelofsky

WASHINGTON (Reuters) - Top White House economic adviser Allan Hubbard resigned on Wednesday and will be replaced by his deputy, Keith Hennessey, the latest in a string of departures as President George W. Bush's term winds down.

His departure comes at a difficult time for the Bush administration, which faces a crisis in the mortgage industry that has led to an increase in housing foreclosures as well as jittery global stock and currency markets.

Hubbard, 60, will leave as director of the National Economic Council (NEC) by the end of the year and his announcement comes a day after he said the risks of the U.S. economy slipping into a recession were growing.

"Al Hubbard has led the economic policymaking process in my administration for some of the most challenging economic issues confronting our nation," Bush said in a statement.

Hubbard, who was a major fundraiser for Bush's campaigns and went to Harvard Business School with him, spent almost three years at the NEC and said in his resignation letter that he was leaving to spend more time with his three children.

Other top White House officials who have left this year include political adviser Karl Rove, homeland security and counterterrorism adviser Fran Townsend and budget director Rob Portman.

Hennessey, 39, has served as deputy director for the NEC for five years and previously worked for Republican Sen. Trent Lott and at the Senate Budget Committee.

The NEC is charged with coordinating the administration's economic policy and explaining it to Congress and Wall Street. Hubbard and Hennessey have been deeply involved in negotiations to expand children's health insurance and change entitlement programs like the Social Security retirement plan.