In Second Term, Snow May Have Policy Influence He’s Lacked

John Snow, whose predicted departure has created a parlor game of speculation on Wall Street and in Washington for weeks, will remain Treasury secretary at the request of President Bush, White House spokesman Scott McClellan said.“The president and Secretary Snow met a short time ago in the Oval Office,” Mr. McClellan said. “The president asked Secretary Snow to continue on in his service, and the president is pleased Secretary Snow agreed to continue serving as Treasury Secretary.”The Washington Post, New York Times, and Wall Street Journal reported within the past 10 days that Snow was likely to be replaced, fueling talk about possible successors. Mr. Snow now stays, as Mr. Bush elevates the role of the Treasury in a second-term agenda that includes extending $1.85 trillion in tax cuts, streamlining the 3,000-page tax code, and reinforcing Social Security.“I’ve been honored to serve in this administration and delighted to have played a part under the president’s leadership in seeing the American economy turn around,” Mr. Snow said in an interview last week.Mr. Bush spoke to Mr. Snow yesterday after a luncheon meeting of the administration’s economic advisers. Keeping him on for now rewards the former railroad chief executive for his loyalty and hands him the policy influence he’s lacked since succeeding Paul O’Neill in February 2003.Mr. Bush first tapped the 65-year-old Snow two years ago today, after firing Mr. O’Neill for objecting to another round of tax cuts. Keen to avoid his predecessor’s mistakes, Mr. Snow dropped his own objections to budget deficits and embraced Mr. Bush’s policies.He helped the president win congressional support for a third round of tax reductions in May 2003 and then toured the nation as an election-year salesman for Mr. Bush and the administration’s economic record.Talk that Mr. Snow’s tenure was shaky began shortly after the election. Anonymous White House officials leaked critical comments, and Mr. Mc-Clellan declined to offer the secretary public support.“John Snow has been a very effective salesman and loyal to the president, so it should have been handled more professionally,” said Stuart Eizenstat, who served as deputy Treasury secretary under President Clinton.Mr. Snow angered White House officials during the campaign when he told Ohio Republicans it was a “myth” that Mr. Bush would be the first president since Herbert Hoover to lose jobs during his term. While Mr. Snow said he had been misquoted, Democratic presidential candidate John Kerry called him “callous.”Also, while the geniality that saw him play tennis with foreign counterparts and basketball with his bodyguards helped Mr. Snow push Mr. Bush’s economic plans through Congress, it fostered a perception he wasn’t an essential adviser. The tax cuts he promoted were already designed when he was nominated.Mr. Snow is a “cheerleader rather than a policy-maker,” said a former chief economist at the U.S. Chamber of Commerce, Richard Rahn. Mr. Snow didn’t have much support on Wall Street: a November poll by Kissinger McLarty Associates of 424 investors found just 43% wanted Mr. Snow to stay.Now, Mr. Snow will be one of just two holdovers on Mr. Bush’s economic team. Out are Commerce Secretary Donald Evans and National Economic Council Director Stephen Friedman. Brian Roseboro, Treasury’s undersecretary for domestic finance, is resigning December 31. Council of Economic Advisers Chairman Greg Mankiw is expected to depart as well.Along with Mr. Snow, Office of Management and Budget Director Joshua Bolten remains in place, and Kellogg Company Chairman Carlos Gutierrez has been nominated to replace Evans.According to a plan released by the White House on September 2, the Treasury secretary is to oversee a bipartisan panel of tax experts who will recommend changes. The panel is to be named by year’s end.Mr. Snow, who holds a Ph.D. in economics, sat on the National Commission on Economic Growth and Tax Reform in the mid-1990s. That panel, chaired by former New York Congressman Jack Kemp, advocated a simpler tax system.Mr. Snow will continue to be the ad ministration spokesman on currencies, maintaining the American “strong dollar” policy, and coupling it with the view that exchange rates are best set in open markets.So far, record budget and current account deficits, and speculation the administration wants a weaker dollar to boost exports and manufacturing employment, have led investors to sell American currency during his tenure.Although it rose yesterday, the dollar decreased 19% against a basket of foreign currencies on Mr. Snow’s watch, the greatest decline under any Treasury secretary since a 32 percent loss during James Baker’s term in the 1980s.The exchange rate has fallen for three straight years, the first time that’s happened since 1985-1987.“For the foreign exchange market, it means the status quo, which most people in the market assume is an official desire for a weaker dollar,” said a senior currency strategist at JPMorgan Chase & Co. in New York, Kenneth Landon. “If Snow had been replaced with a respected Wall Street executive, then that would have helped the dollar.”Mr. Snow will be able to continue his so-far unsuccessful effort to reduce China’s trade advantage by ending the yuan’s decade-old peg of 8.3 to the dollar.And he will continue to work with Congress on plans to toughen oversight of mortgage lenders Fannie Mae and Freddie Mac. Last May, he admitted to inadvertently owning $10 million of the companies’ debt, and sold it at a loss to avoid conflict-of-interest allegations.Mr. Bush hired Mr. Snow, the former chief executive of railroad company CSX Corp., after firing Mr. O’Neill on December 6, 2002, in part because he’d alienated Congress and investors.Unlike Mr. O’Neill, Mr. Snow become known for personal touches such as sending thank-you notes to the politicians and businessmen he met.“O’Neill didn’t have diplomatic skills,” said Dick Armey, the house majority leader when Mr. Snow entered government and now senior policy adviser for law firm Piper Rudnick. “John Snow has good relations with lots of people.”[In other news, Veterans Affairs Secretary Anthony Principi has submitted his resignation to Mr. Bush, the Associated Press reported. He is the ninth cabinet member out of 15 to announce plans not to return for a second term. His departure was widely expected.]

In Second Term, Snow May Have Policy Influence He’s Lacked

In Second Term, Snow May Have Policy Influence He’s Lacked

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