Cabinet decisions

Posted: Nov 09, 2004 12:00 AM

 Last week, President Bush said that he would start thinking about Cabinet and staff changes over the weekend. The decisions he makes in this area will be our first real indication of what his second term will be like.

 Even if Bush doesn't actually fire anyone, it is inevitable that there are going to be a lot of staff changes. An unusually large number of people have been with him throughout his entire term, and many go back years earlier to his campaign. No doubt, a considerable number are burned out and need to move on to the private sector where they can make more money and see their families more often.

 This natural turnover will probably give Bush all the opportunity he will need to reshape his administration without the necessity of firing anyone, although that cannot be ruled out. Sometimes a high-level staff change is needed just to shake things up, and not because someone was doing a poor job. Or the president may have someone specific in mind that he wants in his Cabinet and who insists on a particular position that is already filled.

 This is not to say that we can expect wholesale turnover. Many people currently in the administration may remain, but in different positions. In some cases, this will just be a reward for those who have done the heavy lifting -- perhaps in ways not altogether visible on the outside. In other cases, the president may feel he needs someone particularly trustworthy in a key position to handle a high priority matter.

 Having said that, following are some thoughts on likely staff changes in the second Bush administration and a few suggestions.

 Bush has said that his two highest domestic priorities are tax reform and Social Security reform. Unfortunately, he has said very little about what he means in these areas. Consequently, someone is going to have to be assigned to draft a specific proposal -- or at least detailed guidelines -- before action in Congress can proceed.

 Treasury Secretary John Snow, who is expected to stay, is the obvious person to manage tax reform. I worked with him on the Kemp Commission some years ago and have confidence that he understands the issue and knows what needs to be done. Moreover, the Treasury staff is well versed on tax options and has the expertise and depth to manage what can often be a complicated and drawn-out process.

 Social Security is another matter. My guess is that the White House staff will handle this, as was the case with the Medicare drug bill. But since there is no one currently in the White House who is really an expert on Social Security privatization, I would expect Bush to reach out for someone who is if he is serious about making progress in this area.

 There are two key positions where Bush may soon have the opportunity to appoint a Social Security expert. It is generally thought that Council of Economic Advisers Chairman N. Gregory Mankiw and National Economic Council Director Stephen Friedman will soon return to the private sector. There are any number of economists and financial experts who could fill these positions and are familiar with Social Security reform options.

 On both tax reform and Social Security, the budgetary implications of whatever is done will be a central consideration, especially so since the budget deficit is a problem that Bush has also promised to address. Consequently, the director of the Office and Management and Budget will also be a key player. OMB is currently headed by Josh Bolten, a top Bush loyalist, but it is thought that he may move up to a higher level position -- perhaps White House chief of staff -- thus opening this position for another appointment.

 Of course, there are many other Cabinet and senior White House staff positions that are likely to change. Bush has suggested that he may reach out to a Democrat or two to join his Cabinet. Two obvious names are retiring senators Zell Miller of Georgia and John Breaux of Louisiana, should they wish to continue in public service.

 Looking down the road, Bush must also think about whom he wants to replace Federal Reserve Chairman Alan Greenspan, who is expected to retire, and World Bank President James Wolfensohn, whose term expires. Former Council of Economic Advisers Chairman Martin Feldstein is often mentioned for the former position and Secretary of State Colin Powell is often mentioned for the latter.

 Whatever Bush decides to do on the personnel front will be revealing, telling us more about his priorities than one can get out of press conference statements. If he is fortunate, he will find the right people to aid him.