The New Man at Treasury

The New Man at Treasury

May 31, 2006

Yesterday, President Bush nominated Goldman Sachs chairman Henry M. "Hank" Paulson to replace John Snow as U.S. Treasury Secretary. While Paulson has largely supported the Bush administration's fiscal decisions, he has sharply veered from the White House's position on global warming, calling on the government to take "urgent" action to curb greenhouse gas emissions (PDF). It is too soon to know what kind of Treasury Secretary Paulson will make, but we remain optimistic that he can be a "a wise steward of taxpayer dollars" and not just another salesman for White House's economic policies.

• Hank Paulson is known for his leadership on the environment. Paulson has been known on Wall Street for his dedication to environmental causes. Paulson is "way too green for some folks," said one former Bush administration official. Several times, Paulson's positions have directly contradicted and criticized the Bush administration's environmental policies. And while Bush stands by his decision not to participate in the Kyoto Protocol, Paulson, as chairman of the Nature Conservancy, issued a statement saying, "The Kyoto Protocol is a key first step to help slow the onslaught of global warming and benefit conservation efforts. ... [W]ithout enacting our own emission limits, U.S. companies will lose ground to their competitors."
  
  
• Paulson has been a vocal supporter of the Bush tax cuts. Paulson’s positions on tax cuts have generally matched those of the Bush administration. In a Wall Street Journal op-ed in 2003, Paulson heralded Bush's tax cuts and said the notion that reforming dividend taxes "somehow favors the wealthy at the expense of the poor hearkens back to an earlier era when only the rich held equities." Yet according to the Tax Policy Center, nearly three-quarters of the benefits of Bush's capital gains and dividend tax cuts will go those earning over $200,000 and nearly half to those earning more than $1 million each year.
  
  
• It remains to be seen if the administration will follow the advice given by Paulson. The Bush administration has a track record of ignoring the opinions of those cabinet members they disagree with. Bush's first Treasury Secretary, Paul O'Neill, had little input into domestic policy as Bush "increasingly brought economic decision-making inside the White House." And John Snow "wasn't a valued member of the administration." The administration has reportedly told Paulson that he won't be relegated to the cheerleader role. Time will tell.