Bush Selects Goldman
Chief to Take Over
Treasury Department.
By JIM RUTENBERG and
EDMUND L. ANDREWS, From the NYTimes on the Web, May 31, 2006
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Doug Mills/The New York Times
President
Bush announced today that Henry M. Paulson Jr., center, the chief
Executive of Goldman Sachs, will replace John W. Snow, right, as
Treasury Secretary. |
WASHINGTON, May 30 --
President Bush today nominated Henry M. Paulson, the chairman of one of Wall
Street's biggest firms, to become his next Treasury secretary and what Mr. Bush
described as "my principal economic adviser."
Mr. Paulson, 60, will replace John W. Snow, a former railroad executive who
announced his own resignation this morning after more than three years in which
he was widely seen as more salesman than policy maker.
The selection of Mr. Paulson, chairman and chief executive of Goldman Sachs, is
a significant departure from Mr. Bush's initial reluctance to bring prominent
Wall Street executives into his administration. And it was a rare break
from Mr. Bush's tendency to select his most senior aides from within an inner
circle of trusted advisers.
Mr. Paulson, who earned nearly $40 million last year and who had led Goldman
through a period of extraordinary growth, had turned aside at least one overture
from the White House and accepted the post only after being assured that he
would play a central role in setting policy.
Mr. Bush said publicly last week that he had not talked with Mr. Snow about Mr.
Snow resigning. But the discussions with Mr. Paulson date back to at least
February, and Mr. Bush's search for potential successors to Mr. Snow have been
under way since at least January.
Mr. Snow, 66, has been a loyal, relentlessly on-message promoter of Mr. Bush's
economic record and was the administration's point man in its often frustrating
dispute with China over foreign-exchange rates.
And while Mr. Snow made almost no missteps, he had little role as an architect
of economic policy and presided over a colorless period for the Treasury
Department that contrasted sharply with the tenures of James A. Baker under
President Ronald Reagan or Robert Rubin under President Bill Clinton.
Administration officials had been looking for a successor to Mr. Snow at least
since January, when Mr. Snow let them know he was ready to leave. Mr.
Paulson's appointment is the latest in a raft of White House personnel changes
managed by Joshua B. Bolten, himself a former Goldman Sachs executive who took
over as Mr. Bush's new chief of staff in April.
Mr. Bolten was quoted by aides as saying he wanted to bring the administration's
"mojo back" after seeing major initiatives like the overhaul of Social Security
and the income tax grind to a halt.
Mr. Paulson is the second newly appointed aide who comes from outside Mr. Bush's
comfort zone of old friends from his days as an oilman and politician in Texas.
The first was Tony Snow, the White House press secretary who comes from the
opinionated and high profile world of cable news.
Mr. Paulson is the apotheosis of Wall Street, a world that Mr. Bush has often
viewed with thinly-veiled suspicion. Mr. Paulson is also an avid
environmentalist who has taken positions at odds with those of the
administration. He is chairman of the board of the Nature Conservancy,
which strongly supported the Kyoto Protocol to reduce the production of gases
that contribute to global warming.
Mr. Bush has been a steadfast opponent of the Kyoto protocol and a persistent
skeptic about the risks of global warming.
Mr. Paulson's name arose just as Mr. Bolten took over as Mr. Bush's chief of
staff, though efforts to woo him had begun at least as early as February,
according to an associate of Mr. Bolten.
It was Mr. Bolten, aides said, who took the lead trying to recruit Mr. Paulson,
who he had known when he was at Goldman Sachs as Mr. Paulson's chief lobbyist at
the European Union headquarters.
Mr. Paulson initially balked at taking a job. Not only was there the
matter of the tens of millions of dollars a year he would be giving up annually
and the holdings he would have to either get rid of put in a blind trust if
confirmed. People familiar with his deliberations said that he also had
serious reservations about the power of the job in this White House, which has
made most major policy decisions in the West Wing, not Treasury.
One friend, who was granted anonymity to speak freely about a private matter for
Mr. Paulson, said he had indicated back in February that he would not take the
job. This person expressed surprise that he changed his mind and said, "I
can only guess he did so out of a sense of duty and honor; it's hard to say 'no'
to the president of the United States."
But White House officials said that Mr. Paulson was given assurances that the
job would "be invested with all of the seriousness and heft that it has
traditionally had," in the words of one senior official who was not authorized
to speak publicly about discussions between Mr. Paulson and Mr. Bush.
Mr. Paulson was given those assurances during a secret White House meeting with
Mr. Bush on May 20. Tony Snow, the White House press secretary, said that Mr.
Paulson accepted the job officially on May 21, a full week before today's
announcement, and as speculation built that Mr. Bush would choose his old friend
Don Evans for the job.
That timeline raised questions about the president comments on Thursday night —
four days after Mr. Paulson accepted the job — that he had not spoken to
Secretary Snow about his long rumored departure from Treasury.
During a joint news conference with Prime Minister Tony Blair of Great Britain,
Mr. Bush was asked directly by a reporter whether Mr. Snow had given him any
indication that he intended to resign soon. Mr. Bush replied, "No, he has
not talked to me about resignation. I think he's doing a fine job."
Tony Snow, said today that Mr. Bush was speaking "artfully," to avoid upsetting
the markets with a nomination that he was not yet ready to announce, pending a
background check.
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