- The Washington Times - Tuesday, June 27, 2006

12:51 p.m.

Treasury Secretary-designate Henry Paulson promised today to improve America’s global competitiveness, partly by ensuring that companies are treated fairly in trade matters and by keeping taxes down.

“If confirmed, I will focus intensely on how the United States can maintain and strengthen our competitive position,” Mr. Paulson, a 32-year Wall Street veteran, said during his Senate Finance Committee confirmation hearing. His nomination is not expected to hit any major roadblocks.

The panel’s chairman, Sen. Charles E. Grassley, Iowa Republican, has said he hopes the nomination will be approved by the full Senate by the start of the July 4 congressional recess.

If approved as expected, the 60-year-old chairman and chief executive officer of Goldman Sachs would become President Bush’s third Treasury secretary since taking office in January 2001.

Mr. Paulson said that as Treasury secretary he would be active in affirming the country’s leadership role in the global economy, where the United States must be a “constructive and stabilizing force.”

To help make the United States more competitive globally, Mr. Paulson said he would work to advocate policies that provide open and level markets for U.S. investment and for U.S. products.

He outlined other steps that could be taken to energize the country’s competitive stance. He said those steps include:

• Addressing the long-term unfunded obligations of Social Security and Medicare that “threaten to unfairly burden future generations.” Shoring up these entitlement programs, which will face massive strains with the wave of retiring baby boomers, is a “formidable challenge,” Mr. Paulson acknowledged. However, he expressed optimism that something could be accomplished to help this during the remaining time in the president’s term.

• Keeping taxes low and collecting them in a simpler and fairer manner. Mr. Paulson said tax cuts, as a general rule, don’t pay for themselves, but he added, “I have clearly seen that tax cuts change behavior.” He said the president’s 2001 tax cuts helped bolster the confidence of consumers, investors and businesses.

As to the government’s bloated budget deficits, “like all of us, I wish the deficit was lower,” Mr. Paulson said. Though he said he would like to see spending curbed to help trim the deficit, he said the size of the budget shortfall is in the realm of historical norms. Mr. Paulson said he thought it would be “a big mistake” to raise taxes to deal with the deficit.

• Expanding opportunities for American workers, farmers and businesses — big and small — to compete with the rest of the world.

• Enhancing flexibility of capital and labor markets and preventing “creeping regulatory expansion from driving jobs and capital overseas.”

Mr. Bush selected Mr. Paulson to succeed John W. Snow, the former chief of railroad company CSX Corp. Mr. Snow has run Treasury since February 2003.

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