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Bush picks Paulson to replace resigning Snow

Posted on: Tuesday, 30 May 2006, 09:05 CDT

WASHINGTON (Reuters) - President George W. Bush announced on Tuesday that Treasury Secretary John Snow was resigning and that he has nominated Goldman Sachs chairman Henry Paulson to replace him.

In a White House Rose Garden announcement, Bush praised Paulson's lifetime of business experience and said he had the ability to explain complicated economic concepts in clear language. The president made clear that Paulson would be pursuing long-standing White House economic policies.

Naming Paulson gives Bush a Wall Street heavy hitter to use as an advocate for his tax-cut policies, which he calls an important factor in the growing economy but which his opponents say has contributed to long-term budget deficits.

"He will work closely with the Congress to restrain the spending appetite of the federal government and keep us on track to meet our goal of cutting the deficit in half by 2009," Bush said.

In addition, he said Paulson will be an important representative of the United States in trying to open markets for U.S. goods.

"He will insist on fair treatment for American businesses, workers and farmers. He will help ensure that our trading partners play by the rules, respect international property rights and maintain flexible market based exchange rates for their currencies," Bush said.

Another item on Paulson's agenda will be attempting to expand trade and persuade China to move more quickly to a market-based exchange rate as a way to help U.S. manufacturers' goods be more competitive in China.

Snow's resignation had long been rumored and comes at a time when the U.S. economy is moving along briskly, although with worrisome hints of inflation on the horizon.

Paulson said that in his 32-year career in finance, he has developed a keen appreciation of the role that capital markets play in driving economic growth and efficiency.

"Our economy's strength is rooted in the entrepreneurial spirit and the competitive zeal of the American people and in our free and open market," Paulson said.

"It is truly a marvel but we cannot take it for granted. We must take steps to maintain our competitive edge in the world," he said.

Paulson must be confirmed by the Senate.

HOW MUCH CLOUT?

The question for Paulson will be how much free rein he will have in an administration that has largely called the shots on economic policy from the White House.

Under the Bush presidency, the treasury secretary has been tasked mostly with promoting economic policies rather than setting them.

New York Democratic Sen. Chuck Schumer, who serves on the Senate Finance and Banking Committees, said he spoke with Paulson on Tuesday morning and "pledged my full support for his nomination."

"His experience, intelligence, and deep understanding of national and global economic issues make him the best pick America could have hoped for," Schumer said.

Source: REUTERS

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