- The Washington Times - Wednesday, October 24, 2001

In its Nov. 5 issue, National Review magazine calls for President Bush to fire his treasury secretary, Paul O'Neill. A few months ago, Forbes magazine publisher Rich Karlgaard also called on Mr. Bush to "dump" Mr. O'Neill. International Economy magazine reports that even Vice President Dick Cheney, a close friend of Mr. O'Neill's for decades, "is starting to have second thoughts about whether he made a bad personnel decision."
Such criticism of a treasury secretary so early in any administration is unusual. It is even more unusual for it to come from within Republican circles when they hold the White House. Treasury secretaries are more likely to come under fire in Democratic administrations, because they often have to say "no" to liberal tax and spending proposals, and must protect the dollar and the Federal Reserve against inflationary pressures that tend to be stronger when Democrats hold the White House.
It is hard to say why Mr. O'Neill engenders such enmity. Mr. Karlgaard claims Mr. O'Neill is a closet protectionist and inflationist. However, I see no evidence supporting this claim. Treasury secretaries are almost always free traders and hard money men. This is simply a function of their principal responsibility, which is to fund the debt. Protection cuts down on foreign capital inflows and inflation raises interest rates, thereby making their job harder.
National Review's main concern seems to be taxes. It calls the recent stimulus plan a "conceptual morass" and attacks the administration for using "Keynesian arguments" to sell "watered-down supply-side measures." These are justified criticisms, but Mr. O'Neill's responsibility is not clear. One could argue that Larry Lindsey, Mr. Bush's principal economic adviser during the campaign and early months of the administration, is much more to blame than is Mr. O'Neill.
National Review forgets that Mr. O'Neill was a late addition to the Bush team. He was not involved in the campaign, never met Mr. Bush until after the election and had no role in crafting the tax bill. That was done largely by Mr. Lindsey, who also devised the political strategy for getting it through Congress.
While supply-siders have never been altogether happy with either the substance of the Bush tax plan or the way it was sold, none have explained how a better bill could have been enacted into law, given the political realities.
It looks as if there is a bit of blaming the messenger in these attacks on Mr. O'Neill. If so, it is not a new phenomenon.
It was common during the Reagan years for conservatives to blame underlings like James Baker for selling them out. Of course, they knew perfectly well that Mr. Baker was only doing what the president wanted him to do, and in any case Ronald Reagan was ultimately responsible for White House deviations from conservative orthodoxy. But conservatives did not want to attack Mr. Reagan directly, so they did it indirectly by blaming his aides for the transgressions.
I think the same thing is going on now. Especially during the current crisis, conservatives are not going to criticize Mr. Bush directly. Yet they want to make their concerns felt. So they attack Mr. O'Neill instead of Mr. Bush. Conservatives may also be applying advance pressure on the president to find a replacement more from within their ranks when Mr. O'Neill eventually leaves the Treasury on his own. One name frequently mentioned is retiring Sen. Phil Gramm, Texas Republican.
This is not to let Mr. O'Neill off the hook entirely. He has a political tin ear and often gives ammunition to his critics unnecessarily. The latest example is when he dismissed the stimulus bill passed by the House Ways and Means Committee as "show business." What he meant is that some of its provisions, such as sending $25 billion in rebate checks to big corporations, cannot be taken seriously because they will never pass the Senate. But Mr. O'Neill should not have embarrassed House Republicans by saying so publicly.
Of course, past treasury secretaries have committed similar gaffes. But usually it is because they were new to Washington and unfamiliar with its rules. Mr. O'Neill does not have that excuse. He spent many years at the Office of Management and Budget, rising to deputy director before going into business at International Paper and Alcoa. It is puzzling, therefore, that he has not shown more political adeptness.
Of course, Mr. Bush is not going to fire Mr. O'Neill, nor should he. The National Review critique does not offer nearly a strong enough case for doing so. But Mr. O'Neill needs to do a better job of playing the Washington game if he is to be effective. He can start by learning to talk "off the record."

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