New Point Man: John Snow

KWAME HOLMAN:

John Snow went before the Senate Finance Committee this morning for the beginning of what is expected to be a smooth confirmation as treasury secretary. Snow would replace Paul O'Neill, who was criticized as a poor communicator of the president's economic vision. A former railroad executive and Ford administration official, Snow is likely to be more in step with the administration. Republicans on the committee welcomed and applauded the nominee.

SEN. DON NICKLES:

I compliment the president on his nomination of Mr. Snow, and I look forward to his confirmation and working with him to solve many of the outstanding challenges that we have.

KWAME HOLMAN:

In his opening statement, Snow talked about the president's economic plan and what it would mean for the economy.

JOHN SNOW:

I believe that president bush's recent economic growth proposal moves the tax system, in the right direction and the potential of the American economy, as well. It will create jobs. It is an investment in the American people and in their future. The economy is recovering– can but as the president has stated, we can and must do better.

KWAME HOLMAN:

But committee Democrats criticized the proposal snow was hired to implement. Florida's Bob Graham took issue with Snow's diagnosis of the economy.

SEN. BOB GRAHAM:

I'm curious as to that diagnosis, because my analysis comes to a different conclusion — that we have a demand-side slackening, which is being driven by a loss of confidence in a number of different areas, from personal security to job security to retirement security. Could you give me some explanation of why… have I correctly stated what your diagnosis of the problem is?

KWAME HOLMAN:

Snow admitted he did not yet know every economic detail.

JOHN SNOW:

I don't know that I have a very clear-cut diagnosis of what ails the American economy today. I think it's, frankly, fundamentally in a recovery. But it's a slower recovery and a less certain recovery than we want to see, and it's a recovery without as many new jobs being created.

KWAME HOLMAN:

Even Republican Olympia Snowe was skeptical, and questioned whether the president's plan is the right one for this moment.

SEN. OLYMPIA SNOWE:

Wouldn't it be better to maximize the effects of a short- term plan now that ultimately can enhance the longer-term benefits that we have already initiated?

JOHN SNOW:

It's a million and a half jobs by the fourth quarter of a year from now. And that's a lot of additional jobs in the American economy. I think that's real. So there's a… the package is big enough and strong enough to have a real impact on the short term. I'm sure there will be much discussion about what's the right balance between long-term and short-term.

KWAME HOLMAN:

Some Democrats chose to focus on one of the central elements of the Bush plan, a repeal of the dividend tax.

SEN. JOHN BREAUX:

My question is has the administration really given up on the argument that the dividend tax cut is economic stimulus in the short term and are proposing it because it's long-term good public policy?

JOHN SNOW:

Long-term it will engender a lot of changes in the economy that, you know, greater reliance on equity capital. Remove the distortions we talked about, balance sheets that are more aligned with equity than is the case today; maybe some fewer restructurings that don't make economic sense; and more dividends being paid. I think it has some short-term impact, though, too, because the market, once it sees this being enacted, I think, will have a positive reaction. But I would grant you that it has probably more long-term implications than immediate short-term implications.

KWAME HOLMAN:

The committee is expected to vote on snow's nomination later this week.