The New York Times reports:
Mr. Bannon resisted the move, even threatening at one point to quit if it went forward, according to a White House official who, like others, insisted on anonymity to discuss internal deliberations. Mr. Bannon’s camp denied that he had threatened to resign and spent the day spreading the word that the shift was a natural evolution, not a signal of any diminution of his outsize influence.
His allies said privately that Mr. Bannon had been put on the principals committee to keep an eye on Mr. Trump’s first national security adviser, Michael T. Flynn, a retired three-star general who lasted just 24 days before being forced out for misleading Vice President Mike Pence and other White House officials about what he had discussed with Russia’s ambassador. With Mr. Flynn gone, these allies said, there was no need for Mr. Bannon to remain, but they noted that he had kept his security clearance.
“Susan Rice operationalized the N.S.C. during the last administration,” Mr. Bannon said in a statement, referring to President Barack Obama’s national security adviser. “I was put on the N.S.C. with General Flynn to ensure that it was de-operationalized. General McMaster has returned the N.S.C. to its proper function.” Mr. Bannon did not explain what he meant by “operationalized” or how his presence on the committee had ensured it would not be.