Paul O`Neill on Tax Reform

Former Treasury Secretary (Pres. Bush Cabinet)

2002: Belittled Bush tax cuts to financial community

For the most part, the national security team functioned smoothly. The economic team did not.

My treasury secretary did not share enthusiasm for tax cuts. Paul O'Neill's strong resume included success at the Office of Management and Budget and as the CEO of a Fortune 100 company. I felt that his practical business experience would command respect on Wall Street and Capitol Hill.

Unfortunately, things started going wrong from the start. Paul belittled the tax cuts. He and I met regularly, but never clicked. He didn't gain my confidence, nor credibility with the financial community or Congress. I was hoping for a strong treasury secretary who would advance my economic policies in speeches and on TV. By late 2002, nearly two million Americans had los jobs in the past year, and Paul wasn't conveying our determination to get them back to work. Instead, he used his meetings in the Oval Office to talk about tangential topics, like his plan to improve workplace safety at the US Mint.

Source: Decision Points, by Pres. George W. Bush, p. 85 , Nov 9, 2010

Tax cuts coming just when the economy needs it

The first installment of the tax cuts took effect July 1, but only for an estimated 35 million middle- and upper-income taxpayers, [and only for] a few dollars a week. The reduction does not affect the 15% bracket, which includes an estimated 95 million taxpayers; [they will have to wait for refund checks beginning in late July]. Most economists say the combined impact will be about 1/2% on the nation’s GDP. “Cutting income tax rates is the strongest fiscal policy stimulus for our economy,” said Treasury Secretary Paul O’Neill. “And it is happening exactly when the economy needs it.”

Democratic critics of the tax cut say that’s a meager economic return for a measure that costs an estimated $1.35 trillion over 10 years. Sen. Kent Conrad (D, ND) said the tax cut will eventually force “raids” on the Social Security and Medicare trust funds to make good on commitments like national defense and education spending. “I fear we are facing a real problem,” said Conrad.

Source: CNN.com , Jul 2, 2001

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Page last updated: Mar 11, 2012