A Traveling Salesman Far From the Treasury

When President Bush decided two months ago to step up his campaign for Social Security restructuring, he assembled his Cabinet. Everyone was expected to play a part, Bush said, but the principal pitch man would be Treasury Secretary John W. Snow.

“You need to be the guy on the Hill.... You need to be the guy doing the private meetings.... You need to be the guy doing the media and traveling,” Bush told Snow, according to one administration official’s account of the session.

And Snow has been.

Treasury officials say the secretary has spent more than half of his time on Social Security. He has crisscrossed the country promoting Bush’s proposal to let younger workers open individual investment accounts as part of an emerging plan to shore up the retirement system.

Only Bush has been more prominent in promoting the plan.

Yet, as the administration’s “60 Stops in 60 Days” road show wrapped up Sunday, there was little evidence that the barnstorming efforts had eased widespread public skepticism about the president’s plan.

And in the view of some Treasury watchers, including several former department officials who worked in Republican administrations, Snow’s role as traveling salesman has contributed to a broader perception that the Treasury Department’s influence and stature have declined since Bush took office.

“I think we are looking at one of the weakest Treasury Departments in my working lifetime,” said Ken Guenther, a former Treasury official in the Ford administration and an advisor to three Federal Reserve chairmen. “It’s not playing the role it should be playing on fiscal policy, tax policy, trade policy. The power base on those issues has moved to the White House and the Federal Reserve.”

Several former Treasury officials question Snow’s willingness to devote so much time and attention to a single legislative priority when the economy appears to be hitting a soft patch, the budget and trade deficits have widened and several top-level Treasury Department positions remain unfilled.

“I like John Snow and I respect him, but I think he’s been put in an untenable position where he’s been asked by the president to do things that someone else ought to be doing,” said economist Bruce Bartlett, an assistant Treasury secretary in the administration of the first President Bush.

Snow should be spending most of his time managing the government’s finances, monitoring currency flows, and developing economic and fiscal policy, Bartlett said.

“Instead, the secretary is out giving talks to Rotary clubs and high school students,” he said.

Snow, who was running the CSX railroad system when Bush brought him to Washington in late 2002, is sometimes compared unfavorably to two highly regarded Treasury secretaries in the Clinton administration -- Wall Street insider Robert E. Rubin and Harvard academic Lawrence H. Summers.

At the height of their influence, Rubin, Summers and Federal Reserve Chairman Alan Greenspan were characterized as the “committee to save the world” in a 1999 Time magazine cover story praising their aggressive moves to prevent the Asian financial crisis from becoming a global economic meltdown.

Snow, in contrast, did not make the cut when International Economy magazine recently identified the “three amigos of U.S. economic policy” in the Bush administration: White House Chief of Staff Andrew H. Card Jr., Deputy Chief of Staff Karl Rove and Office of Management and Budget Director Josh Bolten.

Snow’s experience contrasts with the tumultuous tenure of his predecessor, Paul H. O’Neill, who was dumped by Bush after questioning the president’s decision to keep pushing big tax cuts. O’Neill rattled Wall Street and foreign exchange markets with his off-the-cuff, sometimes impolitic remarks. In a 2004 book by Ron Suskind, “The Price of Loyalty,” O’Neill recounted his frustration at finding himself in a Cabinet where he said dissenting opinions were unwelcome.

Snow declined to be interviewed for this article. But several former and current Bush administration officials defended his role in the Social Security campaign and disputed the perception that the Treasury Department’s influence had waned.

“John plays a very integral role in economic policy-making in this administration,” said Allan Hubbard, director of Bush’s National Economic Council. “There’s no question he has been spending an incredible amount of time on the road promoting the president’s Social Security plan, but that in no way has precluded his participation in all of the important decisions.”

Rep. Jim McCrery (R-La.), chairman of the House Ways and Means subcommittee on Social Security, credited Snow with restoring some of the credibility lost during O’Neill’s tenure.

“You could go back in history and look at a long list of Treasury secretaries and rank-order them,” McCrery said. “Where would John Snow rank in that list? Somewhere above Paul O’Neill and somewhere below Alexander Hamilton.... But he’s very good. He’s very effective in meetings with members and out in the community.”

Mark Weinberger, a Treasury Department official during the first two years of Bush’s administration, said Snow’s clout had been underestimated.

“He does work behind the scenes. He does help craft policy with the president,” said Weinberger, who until recently was under consideration for the No. 2 job at the Treasury Department and is vice chairman of the Ernst & Young accounting firm. “But he has the added benefit of being able to go out and sell.”

And go out he has.

This year, Snow has made a dozen trips, delivered more than 20 speeches and given more than 100 interviews on Social Security. He’s talked up restructuring to business owners in Louisiana, civic leaders in Montana and factory workers in Oregon. He has taken his Social Security bandwagon to places far removed from Wall Street and other centers of domestic and international finance.

Although Snow has a doctorate in economics, rubs shoulders with global financiers and once chaired the influential Business Roundtable, he delivers his Social Security pitch in terms any constituent can understand.

In Bismarck, N.D., Snow told 25 high school students that financing Social Security was like splitting the cost of a pizza: “The more people chipping in, the less each person pays.” Today, he suggested, three workers shared the cost of every slice served to an old person; by the time they retired, it would be down to two.

“This is serious stuff. It can be downright frightening,” he said.

In his appearances, Snow carefully sticks to the administration’s Social Security talking points, a caution observers say adds to perceptions that he lacks the independence and authority of some past secretaries.

“He is so careful to stay on the party line, you really don’t have to listen to him because you know what he’s going to say ahead of time,” said L. William Seidman, an economic advisor in the Ford White House and chairman of the Federal Deposit Insurance Corp. in the Reagan and first Bush administrations.

The results of his sales efforts appear mixed. Polls suggest more Americans view Social Security as facing serious financial problems, but they appear increasingly wary of Bush’s private account proposal. On Capitol Hill, Democrats appear united in opposition, and some Republicans seem skittish about tackling Social Security on Bush’s terms anytime soon.

Snow, who worked as a government official and corporate lobbyist before becoming a railroad boss, has largely lived up to expectations that he would be a more loyal team member and persuasive communicator than O’Neill had been.

But several former Treasury officials said the 65-year-old Cabinet secretary had not succeeded in dispelling perceptions that the Treasury Department was not a major player at the policy table.

“It does appear the policy role of the Treasury Department has been diminished in this administration,” said John E. Chapoton, a top Treasury official in the Reagan administration and a partner in Brown Advisory, an investment firm. “I attribute some of that to Snow. He was taken on in the first place more to sell their policy than to formulate it. It undercuts the weight of his statements.”

Edwin M. Truman, an assistant secretary in the Clinton administration, said the global stature of Snow and O’Neill were weakened by the perceived shift of policy-making from the Treasury Department to the White House.

“When they went to international meetings, it became pretty clear they did not carry the full endorsement of the president, and in that sense were playing with a weaker hand,” said Truman, a senior fellow at the Institute for International Economics.

Gary Hufbauer, another Institute for International Economics fellow, who held a top Treasury Department position in the Carter administration, cited the department’s role in crafting Bush administration tax initiatives as evidence of diminished influence. Although the Treasury Department was involved in the process, he said, it appeared the key decisions were made elsewhere.

“The last two tax bills were basically White House- designed,” Hufbauer said. “Treasury had a very modest role. If that were to happen three times in a row, it puts Treasury in a very secondary position.”

Other examples cited by independent analysts and former officials included an apparent lack of participation in the choice of a new World Bank chairman and a secondary role in efforts to reform government-sponsored mortgage underwriters Fannie Mae and Freddie Mac.

Some administration allies said Snow was playing a bigger part than was apparent from the outside.

Pamela Olson, a former assistant secretary for tax policy who left the Treasury Department last year, said Snow’s views had prevailed over those of other officials on key provisions in last year’s tax legislation.

“In prior administrations, I think there was less of a desire to make things look like they arose in the White House,” said Olson, a partner at the law firm of Skadden, Arps, Slate, Meagher & Flom. “It’s a different way of approaching the public, not a different way of formulating policy.”

The tax policy position that Olson left in early 2004 was one of at least four top slots that remained unfilled in the department. Some Treasury Department watchers said the departures of top officials and the resulting vacancies had exacerbated concerns that the department’s ability to shape policy and handle crises had diminished.

Yet it is Snow’s role as cheerleader in chief for Bush’s Social Security campaign that could determine his legacy at the Treasury Department.

Never mind that Snow may have inherited an initiative formulated by others, or that Bush has been campaigning for private accounts too, or that Americans ultimately may judge the plan on the basis of what it contains, not how it is sold.

“We all know the difficulty that Social Security is in. We all know that Treasury can only do part of the lifting,” Hufbauer said. “But if Social Security does not get lifted and we don’t get something out of this effort, people will regard his tenure in office as not successful. On that, his reputation soars or falls.”