- The Washington Times - Thursday, December 12, 2002

The White House had hoped its new economic team would give increased credibility to his upcoming stimulus plan. Instead, the focus has raised troubling questions about whether the team truly believes in faster tax cuts to spur growth, jobs and higher federal revenues.

Even before President Bush formally announced that CSX railroad executive John Snow would replace Treasury Secretary Paul O'Neill, GOP supply-siders were firing off e-mail messages about Mr. Snow's reputation as a deficit hawk who opposed tax cuts.

Until earlier this year, Mr. Snow was on the board of the Committee for a Responsible Federal Budget, a debt-fixated organization hostile to tax cuts and a group that has sharply questioned the merits of Mr. Bush's $1.35 trillion tax-reduction plan.

Indeed, the organization's Democratic co-chairman, Leon Panetta, recently told me he did not consider Mr. Snow to be a conservative, supply-side tax cutter.

"I would not put him in that category," said Bill Clinton's former chief of staff. "I always found him to be someone who believes you can't spend or tax cut your way out of a problem. He's got a very balanced approach."

Some might say out of balance. Mr. Snow told CNN in 1999, when the Treasury was building up a budget surplus, "Tax cuts, I don't think, are a particularly good idea."

To be sure, Mr. Snow has a deserved reputation as a skillful corporate manager who, as a former Transportation Department official, knows how to work with Capitol Hill and play in the political big leagues. He also is an ardent deregulator and, in signing on to the job, has presumably accepted Mr. Bush's plans to push additional tax cuts to boost the economy.

Still, he is seen in tax-cutting circles as someone from another era (his last government post was in the Ford administration) when Republicans practiced Hoover economics that called for higher taxes to shrink the deficit instead of tax cuts to spur economic growth.

Jack Kemp, chief architect of the Reagan tax cuts, praises Mr. Snow, who was on Mr. Kemp's 1995 tax reform commission that called for a flatter tax rate system. "John Snow believes in growth economics to the marrow of his bones," Mr. Kemp said.

But if other supply-siders were questioning Mr. Snow's commitment to tax cuts, they were aghast that former Goldman Sachs Co-chairman Stephen Friedman could take Larry Lindsey's place in the West Wing as the president's resident economic adviser.

Mr. Lindsey is a Reaganite tax-cutter to his core. Mr. Friedman is vice chairman of the Concord Coalition, a group that campaigns for greater budget discipline and fought Mr. Bush's tax cuts tooth and nail. At a news conference last year, Clinton Treasury Secretary Robert Rubin, a Concord board member, blasted the tax cuts as "fiscally unsound." Mr. Rubin and Mr. Friedman were co-chairmen at Goldman Sachs and remain close confidants.

Supply-side leaders this week expressed shock that someone like Mr. Friedman could survive political and policy examination to become the likely choice for Mr. Lindsey's post. "It would be a shame to saddle [Mr. Snow] with a No. 2 who does not share" Mr. Bush's tax-cutting beliefs, Mr. Kemp said.

Stephen Moore, head of the Club for Growth (which raises money to help elect tax-cutters) called Mr. Friedman "a Concord Coalition deficit-phobic who believes that reducing the national debt is more important than reducing tax rates."

Mr. Moore, along with a hastily activated supply-side Army, was lobbying the White House this week to abandon Mr. Friedman. "After naming Snow, the very least they can do is give us a Reaganite supply-sider," he said.

As of this writing, Mr. Friedman's chances of being named to the influential post are said to have slipped from 95 percent to 75 percent, largely because of vetting questions raised about his financial holdings.

That someone of his ilk (he contributed to Sen. Hillary Clinton's 2000 campaign) could be picked to advise Mr. Bush suggests the administration is divided over what its new economic policy should be.

Tax-cut crusader Grover Norquist, one of Mr. Bush's strongest allies, says he has been "assured by the White House that Mr. Friedman is on board on the president' s tax cuts. The job comes with a sign on the door: Cut taxes or die."

There is no doubt whatsoever Mr. Bush is committed to the tax-cut path he has chosen to follow in his presidency. And, ironically, most of the tax-cut stimulus package had already been put together by Mr. Lindsey before he was forced to resign. It calls for accelerating some of the 10-year tax cuts, making them permanent, lowering levies on dividends, and expanding individual retirement accounts and 401(k)s.

Right now the question being asked by many of the president's supply-side supporters is: How committed will his new team be to his tax cutting agenda?

With the two-year presidential campaign cycle getting under way soon, this is no time to be sowing seeds of doubt among the many economic conservatives who make up a key part of Mr. Bush's political base. They want some unbreakable assurances.

They are entitled to them.


Donald Lambro, chief political correspondent for The Washington Times, is a nationally syndicated columnist.

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