When Paul O'Neill was forced out as Secretary of the Treasury in December 2002, everyone knew that it was not the last time he would be heard from. Now, after a year of silence, he is speaking out again in a new book, "The Price of Loyalty: George W. Bush, the White House, and the Education of Paul O'Neill" by Ron Suskind. A long excerpt appeared in the Wall Street Journal on Monday and O'Neill himself went on "60 Minutes" to promote the book, which is based largely on interviews with O'Neill and documents provided by him.
The picture O'Neill paints of President Bush is that of a man totally disengaged from policymaking; an enigma, whose views on key economic issues were a mystery even to his principal economic spokesman, Mr. O'Neill. In cabinet meetings, the president appeared "like a blind man in a room full of deaf people." O'Neill implies that decisions on key issues, such as the imposition of steel tariffs, were made with no regard to the substance and were based solely on politics.
One of the most serious charges made by former Secretary O'Neill is that President Bush expressed concern about the proposed 2003 tax cut being too tilted toward the rich at a November 2002 White House meeting. The book quotes the president as saying, "Haven't we already given money to rich people? This second tax cut's gonna do it again?. Why are we doing it again?" It goes on to say that he was talked out of these reservations by his political adviser, Karl Rove, who said that Mr. Bush must "stick to principle."
Although the books cites a transcript of this meeting provided by Mr. O'Neill, participants in the meeting tell me that no such statements were ever made. Former Council of Economic Advisers Chairman R. Glenn Hubbard states flatly, "The president NEVER made any of the distributional comments referred to in the interview." Cesar Conda, Vice President Dick Cheney's domestic policy adviser, also told me that the president never said anything about giving money to rich people. Referring to his own notes of the meeting, Conda said that the discussion was about extending depreciation rules that were due to expire, not about reducing income tax rates.
Bruce Bartlett is a former senior fellow with the National Center for Policy Analysis of Dallas, Texas. Bartlett is a prolific author, having published over 900 articles in national publications, and prominent magazines and published four books, including Reaganomics: Supply-Side Economics in Action.
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