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Mr. Rove had taken the lead on what was supposed to be the main domestic policy initiative of the second Bush term, the president's proposal to remake the Social Security system. The effort to sell the plan to a skeptical Congress and voters flopped. Similarly, Mr. Rove had trouble driving forward another of Mr. Bush's priorities, an overhaul of the nation's immigration laws.
He also came under criticism for the White House's slow response to Hurricane Katrina. At the same time, Republicans on Capitol Hill have grown increasingly unhappy about Mr. Rove's dual political and policy roles. Mr. Rove was seen as spread far too thin, and was also distracted by the investigation into his role in the C.I.A. leak case.
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Mr. McClellan told reporters on Air Force One on Wednesday morning that Mr. Rove would continue to have his security clearance, but that his desk could move in the West Wing should Mr. Bolten decide to reorder the physical layout of the staff offices. Mr. Rove had moved into an office down the hall from the Oval Office last year after occupying a space on the second floor during the first term.
Other Republicans said that the change was largely cosmetic, and that Mr. Rove would continue to shape major domestic policy as he saw fit. "The notion that this is a demotion just doesn't ring true to me," said Vin Weber, a former member of the House and a lobbyist who is close to the White House. "He's been the guy who wrote his own job description pretty much. I think that is still more true than less true." Democrats applauded the change even as they used it as reason to skewer the White House's priorities.
http://www.nytimes.com/2006/04/20/washington/20bush.html?hp&ex=1145505600&en=56c07fd912ff309e&ei=5094&partner=homepage