- The Washington Times - Wednesday, December 8, 2004

President Bush yesterday put to rest press rumors that he wanted to oust Treasury Secretary John W. Snow, and instead invited him to stay on as his top economic spokesman.

The decision reflects apparent satisfaction at the White House with Mr. Snow’s success at guiding the U.S. dollar lower without precipitating a financial crisis, as well as with the Treasury secretary’s loyalty in the face of sharp criticism of the administration’s economic policies.

The decision to keep Mr. Snow comes after an outcry from conservatives who charged that White House sources — quoted anonymously by the New York Times and The Washington Post as pushing for Mr. Snow’s departure —were abusive and ungrateful in light of Mr. Snow’s good-soldier efforts on behalf of the administration.

White House Press Secretary Scott McClellan offered a glowing appraisal of the Treasury chief, who has proved happy to carry out the White House’s agenda, including near-yearly rounds of tax cuts during the first term and ambitious second-term efforts to revamp the tax code and Social Security system.

“He’s done a great job and has been a valuable member of the economic team, and we have a lot of important work to continue to build upon the steps we’ve already taken to get the economy growing stronger and creating jobs,” Mr. McClellan said. “He’s been an integral part of those efforts.”

Mr. Snow, formerly the chief executive of CSX railroad company, replaced the blunt-spoken Paul O’Neill, who was ousted for opposing tax cuts and higher budget deficits two years ago and then was quoted extensively in a derogatory kiss-and-tell book about the administration.

In contrast, Mr. Snow campaigned tirelessly for Mr. Bush in battleground states this year, and often faced hostile audiences and questions from reporters about the weak job market.

Mr. Snow has taken verbal beatings as well from U.S. allies in Europe. Criticism of Bush economic policies reached a crescendo this week with the release of a European Union (EU) statement demanding immediate steps to cut the bloated U.S. trade and budget deficits.

The twin deficits are the reason behind the dollar’s steep fall to levels not seen in more than a decade against other major currencies since the presidential election. The U.S. must attract nearly $3 billion from foreign investors each day to finance those deficits.

But the $660 billion annual current account deficit, Mr. Snow pointed out during a trip to Europe last month, is a “shared responsibility” with trading partners who depend on exports to the United States to keep their own economies growing.

And the $413 billion budget deficit, he argued, while regrettable, at 3.7 percent of U.S. economic output is no larger than the deficits of most European nations.

Mr. Snow’s arguments appear to have held sway, for now, on Wall Street, if not in the hearts and minds of European leaders. The relentless decline of the dollar in the past month has not precipitated a larger run on U.S. stocks or bonds.

Calls from Wall Street investment houses and top business leaders for action to cut the budget deficit, which were shrill in the days immediately following the election, also have quieted recently.

Putting off such criticism will be a key part of trying to sell Mr. Bush’s proposal to reform the Social Security program, which — far from cutting budget deficits — is expected to add another $1 trillion to $2 trillion to the national debt.

The administration’s lack of concern about deficits was seconded this week by Edward Prescott, an Arizona State University professor who shared the Nobel Prize in economics this year. He told reporters in Stockholm that the deficits are manageable in light of the enormous size of the United States’ $11 trillion economy.

“I don’t see any problems with the U.S. deficit,” he said. “It’s for political reasons that people are yelling and screaming about that.”

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