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.
Conda is also critical of Mr. O'Neill's portrayal of the debate surrounding the imposition of steel tariffs in March 2002. The Wall Street Journal excerpt clearly implies that Vice President Cheney supported the tariff decision, when in fact he opposed it. At the meeting O'Neill refers to, Cheney was simply acting as an honest broker, keeping his personal views private. Vice President Cheney generally made his views known to the president only in one-on-one meetings, so as to facilitate discussion in open meetings.
Although Mr. O'Neill portrays himself as the principal opponent of steel tariffs, in fact he was AWOL at a critical moment. According to a Sept. 19, 2003 report in the Washington Post, at a crucial meeting of the economic team, tariff opponents were abandoned by Mr. O'Neill, who sent an underling in his place. Lacking the stature of the Treasury secretary to beat down tariff supporters like Commerce Secretary Don Evans, the opponents essentially lost by default.
Mr. O'Neill would have us believe that he was the only honest man in an administration of sycophants. Another interpretation would be that he was simply ill-suited to the job he had been given, too used to being the boss and incapable of taking direction, too interested in doing things his own way instead of the way his boss wanted them done, and too easily led to believe that outspokenness is the same thing as honesty.
Even without the details made public in this book, we know that Paul O'Neill was not a very effective Treasury secretary. Looking through my files I find headlines like these from his tenure:
"All Thumbs at Treasury," Washington Post (5-20-01)
"Mr. O'Neill's Gaffes," Washington Post (8-1-02)
"Treasury Secretary Gets Into Hot Water On U.S. Cuba Policy," Wall Street Journal (3-15-02)
"O'Neill Solidifies Maverick Status With Public Jabs at Bush Policies," Wall Street Journal (3-18-02)
On Oct. 2, 2001, the New York Times had this to say: "Mr. O'Neill's erratic statements have sometimes rattled investors and?marginalized him as a policymaker and spokesman."
You get the idea. Yet O'Neill never improved. He continued to go out of his way to be out of step with the Bush Administration, both substantively and stylistically, right up until the end. The only question is why he wasn't fired sooner.
Mr. O'Neill may think he is getting revenge on a president he believes treated him shabbily. But I think that all he has really done is remind people of why he never should have been named Treasury secretary in the first place.