High-profile Wall Street heavyweight Henry "Hank" Paulson is expected to assume a major role in helping shape the nation's economic policy, as the former chairman and chief executive of investment banking concern Goldman Sachs Group Inc. is poised to become the third Treasury secretary during President Bush's administration.Bush nominated the 60-year-old Paulson to succeed John W. Snow, who resigned in late May to return to the private sector.
A surprising choice, Paulson was not considered a front-runner for the post by Beltway insiders and pundits, who indicated that Texas oilman Donald L. Evans, who served as the president's first commerce secretary, was considered a heavy favorite for the nomination.
Other candidates that were floated for the Treasury's top post were David Mulford, U.S. ambassador to India and a former undersecretary of the Treasury under President George H.W. Bush, and Steve Friedman, former head of the National Economic Council.
In remarks at the White House Rose Garden during his nomination, Paulson said that the U.S. economy was strong, "but we cannot take it for granted. We must take steps to maintain our competitive edge in the world."
Robert Rubin, who headed the Treasury in the Clinton Administration, was the last Treasury secretary to be plucked from Wall Street.
In contrast to the majority of President Bush's cabinet and judicial nominations, Paulson is expected to easily win Senate confirmation, which is expected sometime in July.
He has been a vocal supporter of increasing corporate governance in the wake of massive scandals such as Enron and WorldCom. He also has commented publicly that the U.S. has to resolve its mounting deficits in trade and spending. "The trade balance is a problem; the fact is we're just not exporting enough," Paulson said in a recent interview. "That said, I still prefer the situation we're in to a situation without a deficit but with no growth."
Many expect Paulson, a big supporter of the 2001 Bush tax cuts, to have a far larger role in shaping economic policy than did Bush's two previous choices for the Treasury post.
"One of Hank's most important responsibilities will be to build on this success by working with Congress to maintain a pro-growth, low-tax environment," the president said during Paulson's nomination.
Ironically, Wall Street greeted the news of Paulson's nomination with a massive 184-point selloff.
Despite his optimism on the economy, a recent Wall Street Journal/NBC News poll found that 77 percent of respondents felt "uneasy" about the state of the economy, rather than confident, citing soaring gas prices and concerns about Iraq.
At press time, Snow's last major appearance was scheduled at a meeting of G-8 finance ministers in Russia in June.
Prior to being appointed to the Treasury in February 2003, succeeding Paul O'Neill, Snow, 66, spent 20 years heading global transportation concern CSX. He also served as administrator of the National Highway Traffic Safety Administration.
"It has been a great honor to serve ... [but] I have looked forward for some time to returning to private life," Snow said in a statement. "I do so with a great sense of satisfaction in what has been accomplished over the last three-and-a-half years."
Snow, however, has been viewed as an ineffective pitchman for the administration's economic policies, and despite economic growth, he was not able to blunt the president's ongoing slide in the polls or to press forward with a proposal to overhaul the tax code, despite the work of a high-profile panel to look into different reform options.
Paulson, a native of Illinois, has been the chief executive at Goldman since May 1999, after sharing the job for a year and serving as the company's chief operating officer for four years.
Lloyd Blankfein, Goldman's president and chief operating officer, will succeed Paulson as head of Goldman Sachs once Paulson secures confirmation.
Bush began making changes to his staff earlier this year, replacing chief of staff Andrew Card with Joshua Bolten, a former Goldman Sachs executive who had worked with Paulson.
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