A new approach at Treasury

Secretary Henry M. Paulson Jr. eschews the `cheerleading' approach of his predecessor

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September 15, 2006|By Bloomberg News

WASHINGTON -- Henry M. Paulson Jr., the new U.S. Treasury secretary, is everything predecessor John W. Snow wasn't: regal, inaccessible, authoritative and influential.

The former Goldman Sachs Group Inc. chief executive officer prefers travel on military jets rather than the commercial airlines Snow used. Paulson appears in public half as often as Snow, avoiding the former secretary's goodwill-ambassador role. When Paulson does speak publicly, the setting may be magisterial: He delivered his second major speech Wednesday to an invited audience in the Treasury's gilded Cash Room, which was festooned with flags topped with gold eagles.

In his two months in the job, the 60-year-old Paulson is taking control of the Bush administration's economic policy, moving some meetings of White House advisers to the Treasury building. He is also more willing than Snow to acknowledge economic problems, such as the gap between rich and poor.

"Paulson seems to want to come out with coherent policies instead of the cheerleading, traveling-salesman approach that Snow was forced to take," said C. Daniel Vencill, a San Francisco State University economics professor and co-editor of a biographical dictionary of Treasury secretaries. "Once you venture onto the rubber-chicken circuit, you lose something."

In his speech Wednesday, Paulson called on China to open its economy, work with the United States to reduce dependence on Middle Eastern oil and protect the environment. The address increased to seven the number of speeches and on-the-record media remarks he has made so far.

His pace of three utterances a month compares with Snow's monthly average of six, set over 3 1/2 years, according to a tally archived on the Treasury Web site. In contrast to Snow and his predecessor, Paul H. O'Neill, Paulson has yet to take questions from an audience in the United States.

As the leader of President Bush's economic team, Paulson has been coordinating the administration's work on issues from Social Security and Medicare to getting China to loosen controls on the yuan and liberalize its investment rules.

Backstage, Paulson has kept a heavy schedule, said Tony Fratto, his spokesman. He consults with National Economic Council Director Al Hubbard daily and with Federal Reserve Chairman Ben S. Bernanke several times a week.

"Because he's on the inside, when he does speak, we all have to pay attention," said Bill Frenzel, a former Republican congressman from Minnesota who is now a guest scholar at the Brookings Institution in Washington.

At Treasury, the new secretary has set a more formal tone than did Snow, 67, the former CSX Corp. chief executive officer. When Canadian Finance Minister Jim Flaherty visited Washington, Paulson met with him in a diplomatic receiving room and had several advisers join them; Snow preferred informal chats in the anteroom off his office.

Paulson has also stopped the practice of routinely issuing statements on U.S. employment, retail sales and other economic indicators, and he doesn't make serial appearances on television to talk about the latest reports; Snow sometimes appeared on four channels in one morning.

Snow's flood-the-airwaves approach caused people to tune out, said Bruce Bartlett, a Treasury official during George H. W. Bush's presidency and author of a book critical of the current president.

"Snow talked so often about every little thing that it diminished the impact on those occasions when he had something to say," Bartlett said in an interview. "Paulson is doing what needs to be done to restore Treasury's influence and prestige."

Snow declined to comment about his successor, said Debbie Grubbs, his assistant in Richmond, Va., where he now lives.

Snow's more public approach was dictated in part by the circumstances of the time. His arrival in February 2003 coincided with the release of a Bush budget that contained a tax cut triggering opposition in Congress, requiring a public defense. The budget debate was followed almost immediately by Bush's 2004 re-election campaign.

"Snow came on and had to sell the budget just ahead of the election," said Sophia Drossos, a currency strategist at Morgan Stanley in New York and a former economist at the Federal Reserve.

In Paulson's case, his ability to steer clear of political glad-handing may be tested next month, as the Nov. 7 midterm congressional elections draw near.

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