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O'Neill's days at Treasury numbered
Chicago Sun-Times ^ | Nov. 17, 02 | Robert Novak

Posted on 11/17/2002 5:53:26 PM PST by churchillbuff

O'Neill's days at Treasury numbered

November 14, 2002

BY ROBERT NOVAK SUN-TIMES COLUMNIST If Lawrence Lindsey resigns as President Bush's national economic director, would the administration's economic leadership problems be solved while Paul O'Neill remains as secretary of the Treasury? The confidential answer from the White House is an unequivocal ''no.''

Lindsey will not stay much longer, but published reports that he will go while O'Neill stays at Treasury as the administration's chief economic spokesman are not in touch with reality. Bush's business supporters have told him for months that he must fill the Treasury portfolio with someone who believes in his tax-cutting strategy, or else follow his father as a one-term president. There are signs the president finally has accepted this advice.

Neither Lindsey nor O'Neill will be handed a pink slip immediately but will slowly fade away, saying they have resigned to tend private concerns. Delay is necessary because there is no clear successor at Treasury. After O'Neill, the White House flinches at the thought of picking another CEO. Nobody in Wall Street looks good. Something very different at the Treasury may result.

The White House recognizes but cannot publicly admit that its problem is Treasury secretary, not national economic director. The latter position was created in 1993 specially for financial maven and Democratic donor Robert Rubin, but he exerted little impact until he moved into the Treasury in 1995.

While confined to a coordinating job, Lindsey for months has been mercilessly battered and blamed in newspaper accounts for lack of a dynamic Bush economic policy. Anonymous administration sources attack Lindsey, a highly unusual practice within the Bush team. The largely mute O'Neill is not the culprit. R. Glenn Hubbard, chairman of the president's Council of Economic Advisers, raises suspicions by invariably coming out well in these stories.

Friends of Lindsey are more than suspicious. They claim hard information that Hubbard, on leave as a Columbia University economics professor, has waged a disinformation campaign against his colleague. Lindsey has said as much to White House aides, who have questioned Hubbard. He denies committing an offense that carries a death sentence under Bush.

Lindsey is a devoted Bushie. He left Harvard's economic faculty to join the White House staff of the elder George Bush, who later made him the youngest Federal Reserve governor ever.

National economic director turned out to be a much tougher job, particularly when Lindsey is compared with the silky smooth performance of his national security counterpart, Condoleezza Rice. Lindsey suffered after he was quoted as estimating a $100 billion cost for attacking Iraq and he failed to get a late-blooming tax stimulus off the ground this fall.

O'Neill is widely perceived as turning up his nose at Bush's tax cuts. Indeed, he insists he believes that any secretary of the Treasury cannot hope to seriously influence the massive U.S economy. Neither political nor ideological, O'Neill was a career civil servant who flourished in the corporate world. He came to the Treasury because Dick Cheney remembered him from Nixon administration days as one of the smartest bureaucrats he ever met.

It is hard to find a prominent Republican who does not consider the O'Neill appointment a serious mistake. However, the president, always loath to punish loyal lieutenants, was immobilized by demands from Sen. Tom Daschle and other Democrats for a new economic team. Now, with his term half gone, the president can consider a change at Treasury.

But who, if not a CEO or a Wall Streeter? Financier Gerald Parsky, Bush's lieutenant in California, was an assistant Treasury secretary in the Ford administration and would vigorously promote Bush's tax policies; but he is a controversial figure, under attack from the California Republican right. Retiring Sen. Phil Gramm knows economics and politics, but is eager to start a new career in investment banking. The name of Democratic Sen. Zell Miller of Georgia is being mentioned in Bush's inner circle. The point is that the president seeks a real advocate at the Treasury for the first time.

Robert Novak appears on CNN's ''Capital Gang'' at 6 p.m. Saturday. E-mail: novakevans @aol.com


TOPICS: Business/Economy; Editorial; Government
KEYWORDS: economy; taxreform
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To: EternalVigilance
What I have seen of O'Neill is that I agree with your assessment.

I will also note he is one of the few high level bureaucrats that I have written to that has responded with a personal letter addressing issues and questions directly, rather than sending out a useless form letter that ends up saying nothing at all.

21 posted on 11/17/2002 7:17:57 PM PST by ancient_geezer
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To: churchillbuff
Bump for Forbes at Treasury. kudlow would be good too, but he had a drug problem and he would be killed politically.

Forbes is the man to oversee Tax Reform.
22 posted on 11/17/2002 7:27:08 PM PST by Leto
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To: ancient_geezer
I will also note he is one of the few high level bureaucrats that I have written to that has responded with a personal letter addressing issues and questions directly, rather than sending out a useless form letter that ends up saying nothing at all.

Very interesting. Thank you!

It would be very interesting to hear from others on this---even from his detractors---if they would be forthright enough to get specific in their criticisms...something more than questions of style.

Don't get me wrong, style is not totally irrelevent at that level...but it shouldn't be everything...especially from those we look to to be setting policy in an area that is frankly 'the dismal science', after all.

Rubin had 'style', but like all things and people Clintonian, his policies were what were slowly but surely squandering the Reagan prosperity.

23 posted on 11/17/2002 7:33:22 PM PST by EternalVigilance
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To: EternalVigilance
Rush Limbaugh did an indepth interview of O'Neill and it was very informative. I guess I just don't understand why people complain about O'Neill so much.

But ... Bush didn't hire O'Neill to make public policy - he hired him to RUN Treasury.
24 posted on 11/17/2002 7:34:12 PM PST by CyberAnt
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To: Leto

I always liked Lindsey. Heck, I remember a conversation I had with a FReeper salavating over the dream of Lindsey taking Greenspan's position...

And I'd love a Secretary Forbes.
25 posted on 11/17/2002 7:34:50 PM PST by LurkerNoMore!
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To: EternalVigilance
The fact that the WDC "Insiders" are calling for Lindsey and O'Neill to resign means they are doing exactly what they are supposed to be doing.

After all, both of them are, essentially, thinking of the country and the people first.

That is High Treason to the "Inside The Evil BeltWay" crowd, who dislike any plan which disempowers them and empowers us. Ergo, they intensely dislike anyone who supports such heretical ideas and will ruin them, personally and professionally, at the drop of a hat.

I expect they will stay, and when the new tax proposal is dropped next month, you will see a lot of leadership from the both of them.

But the ITEBW sharks are circling.
26 posted on 11/17/2002 7:36:09 PM PST by Taxman
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To: Leto
Forbes is the man to oversee Tax Reform.

Perhaps he is if he possesses enough humility to see that his flat income tax/VAT schemes have been found severely wanting---that the tax reformers in the GOP have moved far beyond his platform of years past....all the way to the repeal of the Sixteenth Amendment and the implementation of the NRST.

I would need a whole bunch of convincing to reach the point where I trusted that to be the case.

27 posted on 11/17/2002 7:38:05 PM PST by EternalVigilance
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To: CyberAnt
But ... Bush didn't hire O'Neill to make public policy - he hired him to RUN Treasury.

Great point.

28 posted on 11/17/2002 7:39:41 PM PST by EternalVigilance
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To: Taxman
I expect they will stay, and when the new tax proposal is dropped next month, you will see a lot of leadership from the both of them.

I hope and pray that you are correct.

But the ITEBW sharks are circling.

Shark repellant, anyone? ;-)

29 posted on 11/17/2002 7:41:49 PM PST by EternalVigilance
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To: Taxman
Be back later tonight...this is an extremely important and interesting conversation.

Our future freedom and prosperity rides on the outcome.
30 posted on 11/17/2002 7:44:06 PM PST by EternalVigilance
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To: EternalVigilance; Taxman
I expect they will stay, and when the new tax proposal is dropped next month, you will see a lot of leadership from the both of them.

In case you haven't noticed, the NY Times, and thus the media, is DESPERATELY trying to get the point of the wedge in somewhere...ANYWHERE!

31 posted on 11/17/2002 7:52:10 PM PST by Bigun
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To: churchillbuff
It is interesting that in my mind Phil Gramm came to mind, even before it was mentioned. I know he is looking for private life, but he might be the right man. He certainly knows banking and taxes and would be a good man to promote the right policies.

32 posted on 11/17/2002 7:52:38 PM PST by WOSG
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To: LurkerNoMore!
Lindsey would be agreat replacement for Greenspan!

In fact, that might be a way to 'shuffle' things around without hurting a guy that is actually one of the 'good guys'.

I also like ONeill, but I understand the grumbling. he's no communicator, nor an advocate for Bush policies in a strong way.
33 posted on 11/17/2002 7:54:03 PM PST by WOSG
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To: Taxman
That is High Treason to the "Inside The Evil BeltWay" crowd, who dislike any plan which disempowers them and empowers us. Ergo, they intensely dislike anyone who supports such heretical ideas and will ruin them, personally and professionally, at the drop of a hat.

Exactly so and the White House is quite aware of what is going on!

The New York times is obviously unaware as to what happened when the media in Texas made attempts to stampeed Bush here. Lindsey and O'Neil will be around for a WHILE I think!

34 posted on 11/17/2002 7:57:58 PM PST by Bigun
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To: Bigun; Taxman; EternalVigilance; churchillbuff
Statements directly from O'Neill in mid 2001 makes Novak's poor attempt prognositcation a bunch of bovine excrement.

O'Neill Further Tax Relief Coming;MARTIN CRUTSINGER, AP Economics Writer, 5/21/2001

``We believe we will demonstrate in the next few years that we are still generating more money than we need to conduct the nation's business and we will be able to give more money back to taxpayers,'' O'Neill said in a speech to the Independent Community Bankers of America, an association representing the country's smaller banks.

O'Neill made it clear that the administration would keep pressing for further tax relief. ``This is the first tax bill and not the last tax bill,'' he said

O'Neill said the next priority for the administration will be reform of the Social Security

In a newspaper interview, O'Neill said he would push for repeal of the federal corporate income tax and the federal tax on capital gains earned by businesses.

In an interview with the Financial Times, O'Neill said that the tax system would work better if the government ``collected taxes in a more direct way from the people, who were paying the taxes in any event.


35 posted on 11/17/2002 8:12:36 PM PST by ancient_geezer
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To: churchillbuff
Here's the little tidbit which is symptomatic of one of our biggest problems:

its problem is Treasury secretary, not national economic director. The latter position was created in 1993 specially for financial maven and Democratic donor Robert Rubin, but he exerted little impact

1. The Democrats create a useless bureaucratic position to reward a big time fundraiser.

2. The Republicans perpetuate its existence despite the fact that prior to 1993 our country had gotten along quite well for 206 years without a "national economic director".

3. Repeat steps (1) and (2) about five million times, going back over every time the Republicans have succeeded the Democrats in the White House since 1952, and you get a pretty good idea of why our government is the way it is.

36 posted on 11/17/2002 8:14:49 PM PST by Charlotte Corday
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To: EternalVigilance
Well IF The 16th amendment were to be repealed I would have no problem with a NRST. although I perfer the Tauzen version with the lower rate and a seperate collection of SS and Medicare taxes.

The reason is SS needs to be privitazed, if there is 1 tax that includes SS it will become much tougher politically to kill a bankrupt SS system. The porblem of SS will be buried in the overall budget, which is what the socialist rats want.

The other reason a NRST tax would be a disaster for small goverment is the FACT that a repeal of the 16th amendment is not going to happen, It would require 67 Senators, 292 Congressman and Ratification by 38 states.

Which Rats in the Senate do you see voting for the repeal of the Income Tax??? Daschle? Boxer? Kennedy? Hillary? Dodd? Mikulski? Schumer? Kerry? Leahy? Reed? Graham? Bakus? ... we would need all the GOP Senators and 16 rats. You tell me how that will happen.

Which Rats in the House do you think will vote to repeal the 16th amendment??? Kennedy? Waxman? Mc Dermitt? Rangle?.. We would need all the GOP House members and 62 Rat congressmen to pass a 16th repeal..

If you really believe this could happen, I'd like some of what you are smoking.

Perhaps if YOU would possess the humility to see the NRST isn't feasible at this time due to the risk of ending up with both a Income and Sales Tax, you could support a feasible ax Reform which may be ( I'm not sure even the Flat Tax can get through, too many timid RINO's), which isn't perfect but gets 90% of the way there.

I need a WHOLE lot of convincing that the 16th amendment can be repealed.
37 posted on 11/17/2002 8:17:49 PM PST by Leto
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To: ancient_geezer
I recall studying Forbe's proposals on a flat tax when he ran for President and I was excited to think that one day such a system could replace the regressive income tax that currently exists.

Since then I have come around to the National Sales Tax because it has the best chance of returning to Americans a reasonable expectation of personal privacy and of strengthening the protections provided by the Fourth Amendment.

With a flat tax, there would still have to exist a mechanism whereby government could monitor and intrude upon one's personal property and finances. Secondly the flat tax could be morphed over time into special deductions and provisions for special interests, much as we have today.

Say no to the Flat Tax, say yes to the National Sales Tax.
38 posted on 11/17/2002 8:18:07 PM PST by Hostage
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To: EternalVigilance
Perhaps he is if he possesses enough humility to see that his flat income tax/VAT schemes have been found severely wanting

You must have missed this:

The Treasury is looking at long-term proposals to scrap the corporate income tax and replace it with a value-added tax, which would work like a national sales tax on consumer and corporate purchases.
from Inching Away From Income Tax

Once again there was no, never has been, a reference from O'Neill to "scrap the income tax" for individuals...At least not one that I've found, if you know of one I'd like to see it in context.

39 posted on 11/17/2002 8:30:50 PM PST by lewislynn
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To: EternalVigilance
I do not think Steve Forbes should replace Paul O'Neill. Actually, I do not think O'Neill should be replaced, so I'll just leave it at that.
40 posted on 11/17/2002 9:05:43 PM PST by Taxman
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