Treasury Secretary Snow Hangs On to Tough Job

President Bush on Wednesday asked Treasury Secretary John W. Snow to stay on the job during his second term, ending more than a week of rampant speculation and high-level leaks that suggested the White House was ready to sack him.

Snow, 65, will continue to serve as the nation’s chief financial officer and leader of the president’s economic team, making him the point man for selling Bush’s ambitious plans to restructure Social Security and revamp the U.S. tax code.

“The president met with him this afternoon,” White House Press Secretary Scott McClellan said. “He asked Secretary Snow to continue serving in a second term, and the president is pleased that Secretary Snow agreed to continue his service. He is a valuable member of our economic team.”

Treasury spokesman Rob Nichols said Snow was “honored to serve the president and to help him implement his agenda to strengthen the economy.” Neither Bush nor Snow commented publicly.

The White House announcement makes Snow one of only two confirmed survivors so far of the president’s first-term Cabinet. Defense Secretary Donald H. Rumsfeld also received a public invitation to stay on board.

Late Wednesday, Veterans Affairs Secretary Anthony J. Principi became the ninth of 15 Cabinet officers to announce his intention to depart. A Naval Academy graduate and combat-decorated Vietnam veteran, Principi said in his resignation letter, “It is now time for me to move on to fresh opportunities and different challenges.”

Bush praised Principi as a “tireless advocate” for America’s 25 million veterans, citing his efforts to improve healthcare at VA hospitals, shorten waiting lists for medical services and reduce backlogs for disability claims.

The president’s decision to keep Snow on the payroll was a victory for the secretary and his allies, who had waged an intense lobbying campaign to convince administration skeptics that the former railroad boss was still the best man for the Treasury job.

“We had a full-court press to keep him,” said Stephen Moore, president of the conservative Club for Growth. “There were a few people in the White House who wanted him out, but common sense prevailed.”

Still, some conservatives expressed concern that Snow’s influence had been undermined by widespread reports that the White House wanted someone else to sell Bush’s second-term economic agenda on Wall Street, Main Street and Capitol Hill.

After a first term in which Bush’s policy consisted mainly of repeated rounds of tax cuts approved on party-line votes, the president now is trying to build bipartisan support for creating private accounts under Social Security and overhauling the tax code.

Some critics had argued that Bush needed to reshuffle his economic team because Snow lacked the stature to push those changes through.

“There was this sort of panic” within the administration, a sense that “we’re just not ready, we need to revamp everything,” said economist Daniel Mitchell at the conservative Heritage Foundation. “They wound up with a situation that was very unfortunate and very unfair to John Snow.”

For more than a week, as speculation mounted, White House officials had declined to say whether Snow would be staying. Earlier Wednesday, McClellan told reporters he could not comment on the Treasury secretary’s job status. A senior administration official who requested anonymity said Wednesday afternoon’s session had been the first opportunity for Bush and Snow “to sit down and talk” about Snow’s future.

“John Snow’s treatment over the last few weeks has been disgraceful,” said economist Bruce Bartlett, a former Treasury official in the Reagan and George H.W. Bush administrations. “White House heads should be rolling over this.”

Despite the president’s public endorsement, however, some observers said they feared Snow’s reputation had been tarnished by the internal leaks and external clamor for a new Treasury secretary.

“The episode is likely to leave him a diminished figure, with people still guessing about his longevity, unless the White House does more to embrace him,” said David Gergen, a Harvard political analyst who has advised Republican and Democratic presidents.

Sen. Jon Corzine (D-N.J.), who headed the Wall Street firm of Goldman Sachs before running for office in 2000, said Snow faced a daunting task even if he emerged from the embarrassment of recent days with his stature intact.

“Secretary Snow is an able individual,” Corzine said. “But if the message he has to deliver is that we have to privatize Social Security and borrow another couple trillion dollars, it’s not the kind of message that works for the American economy. The policies are wrong; therefore the messengers will have a hard time selling them.”

Snow is the former chairman of the railroad company CSX Inc.; he has a law degree and a doctorate in economics.

As a corporate executive, Snow had warned publicly about the potentially damaging effects of big government deficits. But as Treasury secretary, he put aside those concerns and became a tireless advocate of Bush’s big tax cuts.

Joining the White House economic team midway through the first term, Snow crisscrossed the country, arguing that Bush’s policies had helped the nation recover from what he said could have been a more severe recession after the stock market collapse of 2000 and the terrorist attacks of 2001.

But that did not prevent critics from opposing his retention for the second term.

Leaks suggested the White House was considering possible high-profile replacements, including former Sen. Phil Gramm (R-Texas) and New York Gov. George E. Pataki, as well as internal candidates such as White House Chief of Staff Andrew H. Card Jr. and Budget Director Joshua Bolton.

At one point, Card called Snow and told him: “Don’t pay attention to all the rumors,” McClellan said.

Another senior administration official said recent published reports of White House dissatisfaction with Snow were “rogue comments that didn’t reflect the thinking of the president.”

Grover Norquist, president of Americans for Tax Reform, said Snow’s ability to survive the whisper campaign against him demonstrated that he had more supporters and fewer detractors than many had assumed.

“It’s sort of like going to your own funeral and finding out how many enemies you have,” Norquist said. “And he didn’t have very many.”

Moore said it appeared that Snow’s critics had backed off after failing to identify a better candidate and recognizing that his ouster might alienate many conservatives who supported the Treasury secretary.

“They realized that Snow has done a good job, and they were not going to be able to trade up,” Moore said.