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http://www.usatoday.com/money/economy/2002-12-08-treasury_x.htmhttp://www.usatoday.com/money/economy/2002-12-08-treasury_x.htm
Posted 12/8/2002 10:24 PM Updated 12/9/2002 8:52 AM
Bush set to name new top adviser, Treasury secretary
By Susan Page and Laurence McQuillan, USA TODAY
WASHINGTON — President Bush is expected to name CSX Chairman John Snow as Treasury secretary after a shake-up of Bush's economic team amid growing White House alarm about the economy.
A senior administration official confirmed late Sunday that Snow, who served in the Ford administration, would be appointed to replace Paul O'Neill as Bush prepares to unveil a package of targeted tax cuts within the next few weeks.
Stephen Friedman, former co-chairman of investment bank Goldman Sachs, is also set to replace Larry Lindsey as Bush's top White House economic adviser, but his appointment wasn't expected Monday, officials say.
O'Neill and Lindsey were ousted Friday, the same day that a rise in the unemployment rate to 6% was reported. The abrupt move by the White House underscored fears that the sputtering economy could imperil Bush's re-election prospects in 2004.
The overhaul of his economic team and the plan to unveil a tax-cut package are meant to show that Bush is focused on the economy even as a war with Iraq looms. His father's failure to achieve that balance is blamed for costing him a second term.
Officials say the president will propose as early as this month a plan for tax breaks for businesses and individuals to jump-start the economy. The proposal is expected to include making permanent last year's tax cuts and curbing the tax on corporate dividends.
The change in personnel isn't likely to change White House policy. Administration officials are seeking more compelling spokesmen and, in Lindsey's case, more effective coordination of policymaking.
"They are going to be rolling out the package of tax cuts," predicts Grover Norquist, president of the conservative Americans for Tax Reform. "The president could put your grandmother on his team and it wouldn't change anything."
O'Neill's skepticism about tax cuts weakened his influence in the administration, and his blunt manner made some White House officials see him as a loose cannon. Vice President Cheney, who recruited him for the Treasury job, called him late Thursday to tell him the president was ready for him to go.
The Treasury secretary is the president's top adviser on tax and fiscal issues and chief spokesman on the economy. Even an offhand comment can churn markets or affect a foreign country's credit rating. The secretary is the U.S. governor at the World Bank and International Monetary Fund and the chairman of the Social Security and Medicare trust funds.
O'Neill's departure clears the way for Bush to establish better harmony with Wall Street. O'Neill "had a tin ear for the market," says Jeffrey Kleintop, chief investment strategist at PNC Bank. "He was a liability."
Contributing: Contributing: Thomas A. Fogarty, wire reports
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