Bush Taps Wall St. Exec For Treasury

Treasury Secretary John Snow resigned Tuesday and President Bush nominated Goldman Sachs Chairman Henry M. Paulson Jr. as his replacement — another chapter in the shake-up to revive Mr. Bush's troubled presidency.

"He has a lifetime of business experience. He has intimate knowledge of financial markets and an ability to explain economic issues in clear terms," Mr. Bush said of Paulson in a Rose Garden announcement.

He praised Snow for showing "strong leadership" at the Treasury. But as CBS News White House correspondent Jim Axelrod reports, Snow's departure for months has been one of Washington's worst-kept secrets.

Snow, the former head of railroad giant CSX Corp. who has a Ph.D. in economics, has presided over more than three years of mostly prosperous economic times. He's been a loyal salesman for the president's economic policies, but his job security has been the talk of Washington and economic circles for some time as some in the administration floated the idea of a new voice at treasury, CBS News correspondent Peter Maer reports.

Paulson called the U.S. economy "truly a marvel, but we cannot take it for granted. We must take steps to maintain our competitive edge in the world."

Paulson has been chairman of Goldman Sachs for about eight years. It is considered one of the premier financial firms on Wall Street and has sent a number of its top executives to high positions in Washington.

Axelrod reports that with Paulson leaving a job that paid him $38.3 million last year in salary, stock and options, to take one that pays $175,000 — and to join the last 2½ years of a struggling administration — the question isn't why the administration would want Paulson, it's why Paulson would want the job.

"It's stimulating, it's important, it's exciting and it's unlike any kind of job that you'll ever have for the rest of your life," said White House press secretary Tony Snow.

Robert Rubin, one of Paulson's predecessors, served as Treasury secretary in the Clinton administration, and Jon Corzine, another Goldman Sachs chairman, served as a U.S. senator from New Jersey and is now governor of that state.

Paulson's first challenge will come at his Senate confirmation hearing, Maer reports. He's likely to hear sharp questions for Democrats who will challenge the administration's tax cut policies. The president believes permanent tax cuts fuel the economy, but critics say the strategy only adds to long-term budget deficits.

Sen. Chuck Schumer, D-N.Y., a member of the Senate Finance Committee, said he talked to Paulson on Tuesday morning and praised Mr. Bush's selection to be the new Treasury secretary.

"His experience, intelligence and deep understanding of national and global economic issues make him the best pick America could have hoped for," Schumer said. The senator said he would support the nomination.

Welcoming Paulson to the Cabinet, Mr. Bush praised the economy under his own watch: "The American economy is powerful, productive and prosperous, and I look forward to working with Hank Paulson to keep it that way."

Snow, who has called Paulson "a very able executive, a friend of mine," thanked Mr. Bush for his time in the Cabinet and said he looked forward to private life.

Speculation that Paulson would take over from Snow increased after Mr. Bush shook up his White House staff earlier this year, replacing Andrew Card as his chief of staff with Joshua Bolten, a former Goldman Sachs executive who had worked with Paulson.

Card's departure was followed by a string of other personnel moves as Mr. Bush sought to reinvigorate his presidency, mired in the lowest approval ratings since he took office in 2001. Among other changes, Mr. Bush forced out CIA chief Porter Goss, trimmed the portfolio of political adviser Karl Rove and replaced press secretary Scott McClellan with television commentator Tony Snow.