Bush Asks Rail Exec To Steer Economy
With the economy not yet on the right track, President Bush reached out to railroad executive John Snow for help, enlisting the CSX CEO to replace Treasury Secretary Paul O'Neill and lead an economic team retooled for the president's re-election drive.
Snow was hired to be the chief salesman of a new package of tax cuts the president will unveil next year to stimulate the economy, reports CBS News Chief White House Correspondent John Roberts.
"John Snow has excelled as a business leader, an expert on economic policy, an academic, and as a public servant," the president said. "He'll be a superb member of my Cabinet."
Snow, 63, a former Ford administration official, is chairman, president and chief executive of CSX Corp., a transportation conglomerate based in Richmond, Va. The company runs the largest rail freight network in the eastern United States.
"In a varied and productive career, John Snow has shown consistent qualities of foresight and integrity and public spirit," Mr. Bush said. "He's led one of our nation's largest railroads with skill and success."
Snow, in turn, credited the president with shepherding the economy through "one of the shortest and shallowest" recessions. "Yet, I strongly share your view that we cannot be satisfied until everyone — every single person who is unemployed and seeking a job — has an opportunity to work," Snow said.
Mr. Bush nominated Snow just three days after firing O'Neill and White House economic adviser Larry Lindsey as part of a shake-up designed to control political damage from the ailing economy. Harvey Pitt, criticized for failing to shield the president politically from the corporate abuse scandals, resigned on Election Day as chairman of the Securities and Exchange Commission.
Mr. Bush is close to naming successors to Lindsey and Pitt, aides said. Lindsey, who attended the announcement, was asked what's next for him. "I'm going to Disney World," he replied.
O'Neill, angered by his abrupt ouster, was not in the room.
Democrats seized on the shake-up as evidence that Mr. Bush's tax-cutting economic policies have hurt the economy.
"It isn't the names, but the plan that is of concern to us," said Senate Democratic leader Tom Daschle. "It wasn't necessarily the people that he had in place in the last two years, it's the plan. Trickle-down economics doesn't work."
Snow is well respected by both Congress and corporate America but there are issues expected to arise in confirmation hearings:
Snow will take a substantial pay cut to become treasury secretary; between salary, bonuses and stock options his compensation package last year was reportedly worth $10 million, or 65 times what he will now earn.
Stephen Friedman, a former co-chairman of the investment firm Goldman Sachs, is likely to be Mr. Bush's choice to replace Lindsey as White House economic adviser, but officials said the decision was not final.
Sen. Jon Corzine, D-N.J., who was named Monday to head the Democratic Senate campaign committee, said he worked for Friedman for several years and knows Snow. He called Friedman "a pragmatic, thoughtful individual" and Snow a "disciplined, excellent manager" but repeated the Democratic line that Mr. Bush's policies are the issue.
"The problem is the plan," Corzine said. Democrats in Congress made no predictions on the confirmation process, but praised what they called Snow's "stellar reputation."
Two other members of Bush's economic team, budget director Mitch Daniels and Glenn Hubbard, chairman of the Council of Economic Advisers, are said to be in good standing with the president.
Wall Street's initial reaction was muted.
"I think the ouster of O'Neill is more important than who they name. With someone like Snow, there's nothing unique to him to move the market either way," said Charles Pradilla, chief investment strategist at SG Cowen Securities.
Snow was deputy undersecretary at the Transportation Department under President Ford. Vice President Dick Cheney, who brought O'Neill into the administration and then led the selection process for O'Neill's successor, also served Ford as chief of staff.
Snow and his company have deep ties to the GOP.
The new nominee contributed $1,000 to Mr. Bush's 2000 presidential primary campaign, and also gave $1,000 to Mr. Bush's principle GOP rival, Arizona Sen. John McCain.
In all, Snow gave at least $12,000 to campaigns in the 1999-2000 election cycle and at least $23,000 in 2001-02, all to Republicans, figures compiled by the nonpartisan Center for Responsive Politics show.
CSX itself has been a faithful Republican donor. The company and its employees contributed at least $840,000 to campaigns in the 2001-02 election cycle, with roughly $8 of every $10 going to Republicans.