Senate Committee Holds Hearing on Treasury Nominee
STEVE INSKEEP, host:
Today Henry M. Paulson takes questions before a Senate committee. He's President Bush's nominee to be the next Treasury Secretary, and observers will be watching to see if he gives any indication of what he would do when he actually holds that job.
One of those observers is David Wessel of the Wall Street Journal, a regular guest on this program. David, good morning.
Mr. DAVID WESSEL (Deputy Washington Bureau Chief, the Wall Street Journal): Good morning.
INSKEEP: The last two treasury secretaries under President Bush were not seen as resounding successes.
Mr. WESSEL: That's correct. President Bush managed to land a heavy for this third try at picking a treasury secretary. And this will be his debut performance. And I think people will be watching very closely to see whether he'll be a mouthpiece, if you will, for the Bush administration, or whether he will use this testimony to steer policy a little bit in some other direction.
INSKEEP: Well, let's look at the two possible examples, here. Paul O'Neill, the first treasury secretary under President Bush was seen as somewhat of a loose canon, wasn't he? And John Snow, the next one, was not, but was not as respected.
Mr. WESSEL: The first treasury secretary, Paul O'Neill, was seen as a loose canon. He had very, very clear ideas about what he wanted to do but was very unsuccessful in convincing the rest of the administration to do them. The second treasury secretary, John Snow, saw himself much more as a marketer of the President's policy than a shaper of those policies.
We're told by Mr. Paulson himself and by other presidential aides that Mr. Paulson has been promised more say over policies than either of his predecessors had.
INSKEEP: And what would be a policy where he would be pushing the administration, nudging them a little bit?
Mr. WESSEL: The most interesting, and I think, dangerous, place for him to go is the budget deficit itself. President Bush says he wants to do something about the long-term budget deficit, about the fact that the government has promised benefit programs that it can't afford to pay with existing tax revenues.
In order to get the Democrats to the table to actually discuss restraining spending on social security or Medicare, most people, and I'm one of them, think he'll somehow have to put taxes on the table. So one thing I‘ll be listening for is will Mr. Paulson indicate a willingness to at least listen to the possibility that the only way to get a grand compromise on the deficit is to be wiling to at least entertain tax increases of some sort.
INSKEEP: And when you say tax increases, would that mean just letting some of the current tax cuts during the Bush administration expire over the next few years, or actively raising taxes?
Mr. WESSEL: Well, one way, is to let the tax cuts expire. I doubt that the President is ready to do that. Another way is to change parts of the tax code in ways that bring in more revenue than is now projected. Close loopholes, broaden bases, stuff like that.
INSKEEP: Doe this president have any room to raise taxes, given what he said in campaigns, given what happened to this father?
Mr. WESSEL: I think that's an open question. When you talk to the people in the administration about the deficit, there seems to be a bit of a softening of their view that maybe there's some ways to go along with Congress if Congress wants to increase revenues in ways that don't raise those signature tax rates that the President fought so hard to lower.
INSKEEP: Let's imagine it were Senator Wessel up there, David, is there anything you would ask the secretary nominee, given the chance?
Mr. WESSEL: I would ask him two questions. One, I would ask him if he thinks we can bring down the budget deficit over the long run without raising tax revenue somewhat. And secondly, I'd ask him for his honest views on whether, at this time in American history, we should be repealing the estate tax or whether he thinks that great wealth should not pass from generation to generation without some piece of it being nicked for the public treasury.
INSKEEP: David Wessel, of the Wall Street Journal, good to talk to you again.
Mr. WESSEL: You're welcome.
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