SANTA MONICA, Calif. (CBS.MW) — In what is a surprising move to many, John Snow will remain as U.S. Treasury secretary for President Bush’s second term.
There had been widespread speculation that Snow would not be asked to stay on, and rumors were rampant on Wall Street as to who would be his successor. Forbes magazine publisher Steve Forbes and former Texas Senator Phil Gramm had been considered as candidates, according to reports.
But Bush met with Snow last week in the Oval Office and asked him to stay. White House spokesman Scott McCellan made the announcement shortly after the meeting. See more on the announcement.
The choice to stick with Snow is telling. Snow is largely regarded as an administration cheerleader, and rather underwhelming when it comes to policy — unlike his predecessor Paul O’Neill who at times sparred with administration policy rhetoric and was fired two years ago.
Watchers of the dollar, taxes and Social Security should take special note of the man who will be responsible for these measures in the coming months. Snow, according to people on Capitol Hill, has good people skills and is adept at selling policy to Congress.
Snow is known for sending personal notes to people and for chumming it up with every one from his bodyguards to Wall Street executives. He is the former chief executive of CSX Corp., a railroad company.
All of Snow’s interpersonal skills will certainly be called for as Bush seeks to revamp the Social Security system, revise the tax code, stave off further budget deficits and remain stolid on a “hands off” approach to the fall of the U.S. dollar.
If economic policy is No.1 on the Bush agenda for the second term, then sights will be aimed at Snow. Social Security, taxes, deficits and the dollar are all hugely controversial issues and political posturing has already started on them all, both here and abroad.
A free-floating dollar, which the Bush administration advocates, is miring countries such as Australia, Canada, the United Kingdom and New Zealand in currency-intervention banter.
A weak dollar makes those countries’ exports more expensive in the world marketplace compared to China, Japan, and other countries that “peg,” or intervene on their currencies’ behalf, to limit dollar appreciation. Analysts say the U.S. dollar policy may even impede the much-ballyhooed European recovery.
On the domestic front, Social Security talk has gotten the ire up of those who say Bush’s focus on the “tax” and use of those proceeds has little to do with the core problem of the Social Security system; which is the payout, or “benefit.”
The current Social Security system of benefits will be untenable in 12 years, according to the Congressional Budget Office.
Meanwhile, Snow is expected to oversee a panel of experts who will be assigned to review the nation’s complicated tax code and make recommendations on how to enact reform without raising taxes.
Snow is a follower of former Congressman and HUD Secretary Jack Kemp’s conservative tax-reform effort of the mid-1990s that sought to make codification simpler with more of a “flat tax” policy.
Certainly those are a lot of talking points, leaving little time for exacting policy. Congress just last month was forced to raise the budget debt ceiling. It was either that, or breach operations; there wasn’t time for policy rapprochement.
Perhaps that’s what Bush has in mind by keeping Snow on board: someone who can sell things — quickly. After all, what makes a good business run isn’t necessarily the quality of its products — it’s the sales of those products. That, it seems, now goes for policy too.
Still, the telltale sign of any Treasury secretary’s success isn’t so much what he or she can sell to other politicians; it’s investor perception. And by that measure, Snow largely falls flat.
According to a November poll, Snow only had the support of a minority of Wall Street investors; most wanted him out.
This, by nature, has been the Bush protocol across policy areas: mask the reality of the problem with the might of marketing, whether it be on the military or diplomatic front.
It’s now time for post-election marketing. And with the economy at the top of Bush’s priority list, Snow is the aptly appointed director.
Whether investors will buy his bill of goods remains to be seen.
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