Bush’s Picks for Economic Advisors Mean Big Business

For big companies with a keen interest in Washington politics, the initial picks by President-elect George W. Bush for business-related Cabinet posts and other key jobs are cause for celebration.

Bush is charming America’s “old-economy” corporate leaders by choosing people with resumes much like theirs, a cast likely to try to preserve the economic status quo.

This might not be great news to all segments of the business community, particularly small-business groups that would like to slash regulations or high-tech companies seeking government help.

But big-business lobbyists who don’t want anyone to rock their boats can barely conceal their glee.

The trucking industry, which wrestled with the Clinton administration over big rig weight limits and safety issues during the 1990s, “is delighted with the appointments so far,” said Walter B. McCormick Jr., president of the American Trucking Assns.

Even big labor, for the most part, has been conspicuously quiet about the Bush appointments. In fact, Paul H. O’Neill, the Alcoa chairman now designated to be Treasury secretary, is known for his “good relations with unions,” said Denise Mitchell, a spokeswoman for the national AFL-CIO.

Bush’s business-related picks so far mark a contrast from the conservative true believers who followed Ronald Reagan to Washington in 1980, and from the Newt Gingrich crowd who won back the House for the GOP in 1994. There is no talk now about abolishing Cabinet agencies, or “zeroing out” any federal programs.

“There are no firebrands,” said Russell Roberts, an economist with Washington University’s Center for the Study of American Business in St. Louis. “It appears to be a very centrist, pragmatic, very managerial group. They’re competent, but without a philosophical bent.”

The economic lineup so far is led by O’Neill and Don Evans, chief executive of Denver-based energy company Tom Brown Inc., who is the designee for Commerce secretary. Mitch Daniels, a senior vice president at Eli Lilly & Co., is the choice for director of the Office of Management and Budget.

Other nominees who could play significant roles in economic policy are New Jersey Gov. Christine Todd Whitman, the pick for administrator of the Environmental Protection Agency; Donald H. Rumsfeld, former CEO of both G.D. Searle & Co. and General Instrument Corp., who has been asked to return for a second stint at the helm of Defense; and John Ashcroft, a Missouri senator chosen for U.S. attorney general.

Another key Bush selection hailed by big business is Andrew H. Card Jr., a former auto industry lobbyist, who is to be chief of staff.

Apart from Ashcroft, a hard-line conservative on social issues who has drawn fire from labor and civil-rights groups, the people chosen generally are not considered ideologues. High-tech wizards and leading financiers are absent, as well. And the small-business owner or entrepreneur doesn’t seem to have a voice yet in the new administration-in-the making.

Instead, observers say, Bush is choosing old-school pragmatists who know how to play the Washington game. They represent the segment of business that has worked Washington since the explosive growth of government through the New Deal, World War II and the entire postwar era.

It is the business of skilled lobbying, of Washington offices, of the revolving door where bright young aides serve a stint in government, go off to make money in the private sector, and come back as major political appointees.

“This is the Business Roundtable taking over the executive branch,” groused Robert Reich, a former Clinton administration Labor secretary, referring to an organization of big-company CEOs.

The overall tone of Bush’s prospective Cabinet could change somewhat as he fills other key jobs. The top economics-related openings remaining are chairman of the Council of Economic Advisors and, if Bush chooses to keep the post, the director of the National Economic Council. Bush also has yet to name choices to head the departments of Energy, Transportation and Labor, along with a U.S. trade representative.

In addition, many of the key policies will be administered by a broader group of sub-Cabinet officials who have yet to be named, including the heads of the Federal Trade Commission, the Federal Communications Commission and the Small Business Administration.

Bush and Vice President-elect Dick Cheney themselves, as former oilmen, fit a profile that old-economy corporate chieftains can easily embrace. Also coming out of the energy industry is Commerce-designee Evans. Even Condoleezza Rice, the pick for national security advisor, sits on the board of Chevron and had a company oil tanker named after her.

“Clearly, President-elect Bush and Vice President-elect Cheney set the tone, and the one they have set the business community is pleased with,” said William C. Miller Jr., political director for the U.S. Chamber of Commerce.

“There’s the understanding by so many of these people, starting at the top, that government can be run like a business.”

The National Assn of Manufacturers, a bastion of the traditional economy, is just as enthusiastic.

Bush’s nominees “have had careers both in public life and private enterprise,” said Rob Schwarzwalder, NAM spokesman. Cabinet officers “continually have to deal with the needs of the economy, and an understanding of how private enterprise works will benefit them greatly,” he said. “They have standing in the business community and this gives them credibility.”

Rumsfeld, while not a central economic policymaker, could play a pivotal role in advocating higher arms spending and already is a welcome surprise for much of the defense industry.

“Rumsfeld’s appointment is the single most important indicator that the Bush administration is serious about national missile defense,” said Marco A. Caceres, senior space analyst with the Fairfax, Va.-based Teal Group, an aerospace research firm. “Lots of money is going to be poured into it and California should do well.”

Overall, the mood among big-business interests, said Roberts, “is relief that they’re Bush’s appointments, and not whomever Gore was going to appoint. The preelection wisdom was that both candidates were pro-business but that Gore ran a much more populist campaign and clearly had some sectors in mind for major policy initiatives” that would have meant tightened business regulation.

Lobbyists for small business express confidence in Bush’s choices too. But Dan Danner, chief lobbyist for the National Federation of Independent Business, said the reception is based on Bush’s record toward small business while governor of Texas, rather than on the recent appointments themselves.

“A lot of people named we don’t have direct experience with,” Danner acknowledged.

Observers such as Reich say that, if Bush isn’t mindful of the differing agendas of big- and small-business interests, a rift could open up between the two groups and in Bush’s political base. “Big business loves free trade and all forms of globalization. It likes handouts of corporate welfare. Small-business America isn’t so sure that free trade is in its interest, and it knows that it gets little or none of the corporate welfare going to the big guys. There’s a real tension there,” he said.

Roberts, who supports Bush’s goals of tax cuts and education and Social Security reform, questions whether his Cabinet choices so far will provide the ideological fervor to advance those proposals.

Yet Rumsfeld has been a forceful advocate for missile-defense systems. In addition, Daniels headed the Hudson Institute, a conservative think tank, and O’Neill has spoken out on tax policy and made a point at Alcoa of not giving political contributions.

In fact, Martin Anderson, a senior fellow at the Hoover Institution who was an advisor to Reagan on domestic and economic policy, likens Bush to the ideological Reagan in some respects. “He has this clear concept of what the big things are that need to be changed,” Anderson said, referring to Bush’s views on taxes, education, defense and Social Security.

Still, Anderson said Bush’s approach to regulating business might be mainly to refrain from imposing new regulations.

That laissez-faire attitude worries Democratic critics, who argue that the Bush administration picks may be too close to the business community to police it.

Democrats are preparing to take aim on Ashcroft, who as attorney general would be a key player in antitrust policy. He is expected to face questions concerning $18,000 in political contributions over the last year from giant Microsoft Corp. to his unsuccessful Senate campaign, as well as to a separate fund-raising committee tied to him. Microsoft is battling a court-ordered breakup stemming from an antitrust case brought by the Clinton administration’s Justice Department.

“Here you have a case of Microsoft making a contribution to the next attorney general. 2000 was an amazing year for stretching the envelop on money and the rules for delivering money to candidates. Microsoft took full advantage of that, and Ashcroft benefited,” said Larry Makinson, executive director of the Center for Responsive Politics, a nonpartisan group in Washington focusing on campaign finance.

All told, Reich maintained, “I don’t think there’s any doubt at all that this will be a very business-friendly administration.”

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Times staff writer Peter Pae contributed to this story.