- The Washington Times - Tuesday, December 10, 2002

President Bush yesterday nominated railroad executive John W. Snow to replace Paul H. O'Neill as Treasury secretary and lead a revamped economic team to reinvigorate the economy and bolster investor confidence.
"I'll be proposing specific steps to increase the momentum of our economic recovery," Mr. Bush said. "And the Treasury secretary will be at the center of this effort. Investor confidence needs to be strengthened."
Mr. Snow, chairman, president and chief executive of Richmond-based CSX Corp., will play a critical role in promoting the tax-cut package of up to $300 billion that Mr. Bush is expected to propose next month.
"I pledge to you to use all my talents, my power, my energy and my ability to strengthen the current economic recovery and create an environment where millions of job creators and investors, all across America, will grow and prosper," said Mr. Snow, 63, who served as undersecretary of transportation in the Ford administration.
Mr. Bush nominated Mr. Snow three days after dismissing Mr. O'Neill and White House economic adviser Lawrence Lindsey. The economic team shake-up is expected to be completed today with the selection of Stephen Friedman, the former chairman of Goldman Sachs, to replace Mr. Lindsey, aides say.
The president also was close yesterday to naming a replacement for Harvey Pitt, who resigned as chairman of the Securities and Exchange Commission on Election Day. Mr. Pitt had been criticized for failing to shield Mr. Bush politically from the corporate-abuse scandals but resigned over conflict-of-interest charges.
Democrats seized on the shake-up as evidence that Mr. Bush's tax-cutting economic policies had hurt the economy.
"Trickle-down economics doesn't work," said Senate Democratic leader Tom Daschle of South Dakota. "We have argued from the very beginning, going back to the tax cut of last year, that the tax cut needed to be more immediate, needed to be more targeted. We still hold that view."
Rep. Nancy Pelosi, California Democrat and the newly elected House minority leader, said Mr. Bush "can shuffle [his economic team] all he wants."
"It is the president's economic package that is a failure," she said.
One of Mr. Bush's priorities in the new Congress and the run-up to his re-election bid in 2004 will be another round of tax cuts, and an attempt to expedite and make permanent the 10-year cuts enacted last year.
Wall Street's reaction to Mr. Snow's nomination was muted by news of United Airlines' bankruptcy filing, which helped send the Dow Jones industrials down 172.36 points, said Charles Pradilla, chief investment strategist at SG Cowen Securities.
Mr. Pradilla called Mr. Snow "market friendly" but said investors weren't impressed because his corporate credentials were similar to Mr. O'Neill's. "There's nothing unique to him to move the market either way," he said.
Republican leaders on Capitol Hill praised Mr. Bush's selection of Mr. Snow.
"His role as an economist, business leader and public servant will have a positive impact from Main Street to Wall Street," said Senate Republican Leader Trent Lott of Mississippi. "I look forward to working with him next year when Congress will consider a new jobs growth package that will improve America's economic security."
Sen. Charles E. Grassley, Iowa Republican, said he hopes "the process will move forward as quickly as possible." As incoming chairman of the Senate Finance Committee, Mr. Grassley will lead Mr. Snow's confirmation hearing.
White House officials expect Mr. Snow to be questioned about any government aid to CSX, the largest freight rail network in the eastern United States, as well as his membership in Augusta National Golf Club. The club, which hosts golf's premier tournament, is under fire because it does not allow women to be members.
White House spokesman Ari Fleischer said Mr. Snow will resign from the club but that his membership is not a "disqualifying factor." Mr. Fleischer said the president did not encourage Mr. Snow to leave the club.
Deputy House Majority Whip Mark Foley, Florida Republican and member of the tax-writing Ways and Means Committee, said he is confident that Mr. Snow's appointment "will make an instant difference" in the economy.
"This will hopefully be the answer to the cavalry call we've been waiting for," Mr. Foley said. "There must be a renewed effort to round up our troops in this economic battle. I'm confident we can now immediately speak as one voice moving our nation forward."
Mr. Snow worked on a Republican tax-policy panel created in 1995 by House Speaker Newt Gingrich of Georgia and Senate Majority Leader Bob Dole of Kansas.
The panel supported a move toward a simplified, one-tier income-tax system.
"John W. Snow strongly supports tax relief as a vehicle to achieve economic growth, he is an ardent supporter of free trade, he is a champion of business deregulation and the removal of burdensome red tape, and he understands the importance of reining in government spending," said Grover Norquist, president of Americans for Tax Reform.
Two other members of Mr. Bush's economic team, budget director Mitchell E. Daniels Jr. and Glenn Hubbard, chairman of the president's Council of Economic Advisers, are said to be in good standing with the president.
This article is based in part on wire service reports.

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