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MCLARTY RESIGNING AS CHIEF OF STAFF

SHARE MCLARTY RESIGNING AS CHIEF OF STAFF

White House Chief of Staff Mack McLarty is stepping down and will be replaced by Office of Management and Budget Director Leon Panetta, White House sources said Monday.

McLarty will remain in the White House as a senior adviser to President Clinton.McLarty suggested the move, according to a source close to him. Another official said McLarty and Panetta will "work together on the duties that Mack has done on his own up to this point."

McLarty, one of Clinton's oldest friends, has been criticized for his management of the White House. Critics on Capitol Hill and inside the White House complained that McLarty, a well-liked Southern businessman, was not tough enough with his staff and Clinton's opponents.

Panetta, a veteran House member before coming to the White House, earned a reputation as a deficit hawk, forcing Clinton to make tough cuts in a lean federal budget.

Officials insisted the move was not a reflection on McLarty. "Stepping down is not an accurate way to portray this," said one aide, who also spoke on condition of anonymity.

But it takes McLarty out of the senior staff position, lumping him in an already crowded group of senior advisers that includes David Gergen, a former Republican adviser, and George Stephanopoulos, who was pushed out as White House spokesman last year.