WASHINGTON (AP) – President Bush on Monday nominated John W. Snow, chairman of the transportation and railroad conglomerate CSX Corp., to replace Treasury Secretary Paul O’Neill and lead an economic team retooled for the president’s re-election drive.
“John Snow has excelled as a business leader, an expert on economic policy, an academic, and as a public servant,” Bush said. “He’ll be a superb member of my Cabinet.”
Snow, 63, a former Ford administration official whose company has helped fund the campaigns of Bush and other scores of other GOP politicians, will be the point man as the president presses a new tax-cutting economic package.
“In a varied and productive career, John Snow has shown consistent qualities of foresight and integrity and public spirit,” Bush said. “He’s led one of our nation’s largest railroads with skill and success.”
Snow credited Bush 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.
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 Bush politically from the corporate abuse scandals, resigned on Election Day as chairman of the Securities and Exchange Commission.
The president 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 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.”
Bush cited as positive developments the country’s under-control inflation rate, continued low mortgage interest rates, a return to growth in the gross national product and a 5.6 increase in productivity over the last four quarters.
Yet he ticked off a list of worrisome indicators: persistent unemployment in some sectors and regions and the need to strengthen investor confidence.
“Many Americans have very little money left over after taxes,” Bush said. “Some struggle under a weight of debt that makes it difficult to save for retirement.”
The Senate would have to confirm Snow’s nomination, and White House officials expect he will be grilled about any government aid to CSX as well as his membership in Augusta National. The golf club, which hosts golf’s premier tournament, is under fire for not admitting women. Snow was listed as a member in September.
White House spokesman Ari Fleischer said Bush does not consider membership in an all-male club as a reason to exclude somebody from the Cabinet. “I’m not aware that that presents any disqualification,” Fleischer said.
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.
Sen. Jon Corzine (news, bio, voting record), D-N.J., whom Daschle named to head the Democratic Senate campaign committee, worked for Snow for several years. He called the Treasury nominee “a pragmatic, thoughtful individual” and a “disciplined, excellent manager” but said Bush’s policies are the issue, not Snow’s resume.
“The problem is the plan,” Corzine said.
Stephen Friedman, a former co-chairman of the investment firm Goldman Sachs, is likely to be Bush’s choice to replace Lindsey, but officials said the decision was not final. His selection could be announced as early as Tuesday.
Two other members of Bush’s economic team, budget director Mitch Daniels and Glenn Hubbard, chairman of Bush’s Council of Economic Advisers, are said to be in good standing with the president.
O’Neill angered Bush with public remarks that reflected his lukewarm views toward White House tax-cut policies. Both he and Lindsey also were criticized by the president’s political advisers for their failure to communicate White House economic policies.
Snow and Friedman will not have much impact on the details of a tax-cutting economic plan Bush is poised to announce, but they will be expected to help sell it to the Congress, the public and Wall Street, White House officials said.
Snow 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.
Snow’s total direct compensation in 2001 was $20.5 million, according to The Richmond Times-Dispatch. CSX posted $8.1 billion in revenue last year.
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 Bush’s 2000 presidential primary campaign, and also gave $1,000 to 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.
Two other CSX executives and a CSX lobbyist were among Bush’s top donors, each raising at least $100,000 for Bush’s 2000 primary campaign.
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.