The top two officials of President Bush's economic team called it quits on Friday, handing in letters of resignation that will take effect by the end of the year.

Treasury Secretary Paul O'Neill and senior White House economic adviser Larry Lindsey delivered their resignations to the president in a one-two punch, signaling Bush's interest in cleaning house after being roundly criticized for failing to ignite an economy struggling to rebound after a recession-packed 2001.

"My economic team has worked with me to craft and implement an economic agenda that helped to lead the nation out of recession and back into a period of growth. I appreciate Paul O'Neill's and Larry Lindsey's important contributions to making this happen. Both are highly talented and dedicated, and they have served my administration and our nation well.  I thank them for their excellent service," President Bush said in a written statement.

White House spokesman Ari Fleischer said the president was not surprised by the departure of the two, whose replacements will be named in the next few weeks.

He also downplayed the notion that the resignations signaled White House acknowledgement that the economy will be a liability when the president runs again in 2004, adding that a number of forecasts were made about the "politics of the economy" hurting Republicans in 2002.

"Those assessments turned out to be false," he said.

The resignations were released just as the Labor Department revealed that unemployment rates reached an eight-year high in November. The Dow dropped nearly 100 points at the opening bell but regained much territory after the announcements were made.

The administration is also seeking a replacement to head the Securities and Exchange Commission. Chairman Harvey Pitt resigned on election night after facing criticism for being too closely tied to corporations currently being investigated for falsifying their books.

O'Neill was sworn in on Jan. 20, 2001. He was chosen in part for his ability to turn battered Alcoa, an aluminum giant on the brink of bankruptcy, into one of the most successful manufacturing companies in the world. 

Lindsey has been a long-time ally of the president and served as his key economic adviser during the 2000 presidential campaign. He was the principal proponent for tax cuts that passed Congress in June 2001, and pushed for trade-promotion authority

He also served in the first Bush and Reagan administrations and was a member of the board of governors of the Federal Reserve System between 1991 and 1997.

Fleischer said Lindsey will be returning to the private sector. O'Neill is likely to retire and dedicate himself to private interests.

Lindsey did not make many friends with members of Congress, who accused him of arrogance and trying to ram policies down their throats.

"I think we are going to move and pay a lot of attention to the economy.  I think that's what the Bush administration is signaling," Sen. Richard Shelby, R-Ala., told Fox News.

"Today's announcement is welcome and long overdue.  The O'Neill-Lindsey-Pitt economic team has been an unmitigated disaster for the financial markets and the American economy.  I can only hope that their replacements will embrace pragmatic, pro-growth policies rather than a continuation of the supply-side snake oil of tax cuts for the rich," Rep. Ed Markey, D-Mass., said in a written statement.

Several names have been mentioned as possible replacements for O'Neill. Discount brokerage king Charles Schwab has been suggested, though he is not widely loved because of ads vilifying his competition. Other names include Chairman of the New York Stock Exchange Dick Grasso and former UBSPaineWebber head Don Marin.