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Confessions of a White House Insider
A book about Treasury's Paul O'Neill paints a presidency where ideology and politics rule the day
By JOHN F. DICKERSON
Saturday, Jan. 10, 2004
If anyone would listen to him, Paul O'Neill thought, Dick Cheney would. The two had served together during the Ford Administration, and now as the Treasury Secretary fought a losing battle against another round of tax cuts, he figured that his longtime colleague would give him a hearing.
O'Neill had been preaching that a fiscal crisis was looming and more tax cuts would exacerbate it. But others in the White House saw a chance to capitalize on the historic Republican congressional gains in the 2002 elections. Surely, Cheney would not be so smug. He would hear O'Neill out. In an economic meeting in the Vice President's office, O'Neill started pitching, describing how the numbers showed that growing budget deficits threatened the economy. Cheney cut him off. "Reagan proved deficits don't matter," he said. O'Neill was too dumbfounded to respond. Cheney continued: "We won the midterms. This is our due."
A month later, Paul O'Neill was fired, ending the rocky two-year tenure of Bush's first Treasury Secretary, who became known for his candid statements and the controversies that followed them. Rarely had a person who spoke so freely been embedded so high in an Administration that valued frank public remarks so little.
Now O'Neill is speaking with the same bracing style in a book written by Pulitzer prizewinning journalist Ron Suskind. The Price of Loyalty: George W. Bush, the White House and the Education of Paul O'Neill traces the former Alcoa CEO's rise and fall through the Administration: from his return to Washington to work for his third President, whom he believed would govern from the sensible center, through O'Neill's disillusionment, to his firing, executed in a surreal conversation with Cheney, a man he once considered a fellow traveler. Suskind had access not only to O'Neill but also to the saddlebags he took with him when he left town, which included a minute-by-minute accounting of his 23 months in office and 19,000 pages of documents on CD-ROM.
So, what does O'Neill reveal? According to the book, ideology and electoral politics so dominated the domestic-policy process during his tenure that it was often impossible to have a rational exchange of ideas. The incurious President was so opaque on some important issues that top Cabinet officials were left guessing his mind even after face-to-face meetings. Cheney is portrayed as an unstoppable force, unbowed by inconvenient facts as he drives Administration policy toward his goals.
O'Neill's tone in the book is not angry or sour, though it prompted a tart response from the Administration. "We didn't listen to him when he was there," said a top aide. "Why should we now?"
But the book is blunt, and in person O'Neill can be even more so. Discussing the case for the Iraq war in an interview with TIME, O'Neill, who sat on the National Security Council, says the focus was on Saddam from the early days of the Administration. He offers the most skeptical view of the case for war ever put forward by a top Administration official. "In the 23 months I was there, I never saw anything that I would characterize as evidence of weapons of mass destruction," he told TIME. "There were allegations and assertions by people.
But I've been around a hell of a long time, and I know the difference between evidence and assertions and illusions or allusions and conclusions that one could draw from a set of assumptions. To me there is a difference between real evidence and everything else. And I never saw anything in the intelligence that I would characterize as real evidence." A top Administration official says of the wmd intelligence: "That information was on a need- to-know basis. He wouldn't have been in a position to see it."
From his first meeting with the President, O'Neill found Bush unengaged and inscrutable, an inside account far different from the shiny White House brochure version of an unfailing leader questioning aides with rapid-fire intensity. The two met one-on-one almost every week, but O'Neill says he had trouble divining his boss's goals and ideas. Bush was a blank slate rarely asking questions or issuing orders, unlike Nixon and Ford, for whom O'Neill also worked. "I wondered from the first, if the President didn't know the questions to ask," O'Neill says in the book, "or if he did know and just not want to know the answers? Or did his strategy somehow involve never showing what he thought? But you can ask questions, gather information and not necessarily show your hand. It was strange." In larger meetings, Bush was similarly walled off. Describing top-level meetings, O'Neill tells Suskind that during the course of his two years the President was "like a blind man in a roomful of deaf people."
In his interview with TIME, O'Neill winces a little at that quote. He's worried it's too stark and now allows that it may just be Bush's style to keep his advisers always guessing. In Suskind's book, O'Neill's assessment of Bush's executive style is a harsh one: it is portrayed as a failure of leadership. Aides were left to play "blind man's bluff," trying to divine Bush's views on issues like tax policy, global warming and North Korea. Sometimes, O'Neill says, they had to float an idea in the press just to scare a reaction out of him. This led to public humiliation when the President contradicted his top officials, as he did Secretary of State Colin Powell on North Korea and Environmental Protection Agency administrator Christine Todd Whitman on global warming. O'Neill came to believe that this gang of three beleaguered souls—only Powell remains—who shared a more nonideological approach were used for window dressing. We "may have been there, in large part, as cover," he tells Suskind.
If the President was hard to read, the White House decision-making process was even more mysterious. Each time O'Neill tried to gather data, sift facts and insert them into the system for debate, he would find discussion sheared off before it could get going. He tried to build fiscal restraint into Bush's tax plan but was thwarted by those who believed, as he says, that "tax cuts were good at any cost." He was losing debates before they had begun. The President asked for a global-warming plan one minute and then while it was being formulated, announced that he was reversing a campaign pledge to cut carbon dioxide emissions and pulling out unceremoniously from the Kyoto global- warming treaty, short-circuiting his aides' work. The President was "clearly signing on to strong ideological positions that had not been fully thought through," says O'Neill. As for the appetite for new ideas in the White House, he told Suskind, "that store is closed."
To grope his way out of the wilderness, O'Neill turned to his old friends from the Ford Administration, Alan Greenspan and Dick Cheney. According to the book, Greenspan agreed with many of his proposals but could not do much from his Delphian perch. When O'Neill sought guidance from the Vice President about how to install a system that would foster vigorous and transparent debate, he got grumbles and silence but little sympathy. Soon O'Neill concluded that his powerful old colleague was rowing in a different direction."I realized why Dick just nodded along when I said all of this, over and over, and nothing ever changed," he says in the book. "This is the way Dick likes it."
Where ideology did not win, electoral politics did. Overruling many of his advisers, the President decided to impose tariffs on imported steel to please voters in key swing states like Pennsylvania, West Virginia and Ohio.
When the corporate scandals rocked Wall Street, O'Neill and Greenspan devised a plan to make CEOs accountable. Bush went with a more modest plan because "the corporate crowd," as O'Neill calls it in the book, complained loudly and Bush could not buck that constituency. "The biggest difference between then and now," O'Neill tells Suskind about his two previous tours in Washington, "is that our group was mostly about evidence and analysis, and Karl (Rove), Dick (Cheney), Karen (Hughes) and the gang seemed to be mostly about politics. It's a huge distinction."
A White House that seems to pick an outcome it wants and then marshal the facts to meet it seems very much like one that might decide to remove Saddam Hussein and then tickle the facts to meet its objective. That's the inescapable conclusion one draws from O'Neill's description of how Saddam was viewed from Day One. Though O'Neill is careful to compliment the cia for always citing the caveats in its findings, he describes a White House poised to overinterpret intelligence. "From the start, we were building the case against Hussein and looking at how we could take him out and change Iraq into a new country," he tells Suskind. "And, if we did that, it would solve everything. It was about finding a way to do it. That was the tone of it. The President saying, 'Fine. Go find me a way to do this.'"
Cheney helped bring O'Neill into the Administration, acting as a shoehorn for O'Neill, who didn't know the President but trusted the wise counselor beside him. So it was perhaps fitting that Cheney would take O'Neill out. Weeks after Bush had assured O'Neill that rumored staff changes in the economic team did not mean his job was in peril, Cheney called. "Paul, the President has decided to make some changes in the economic team. And you're part of the change," he told O'Neill. The bloodless way he was cut loose by his old chum shocked O'Neill, Suskind writes, but what came after was even more shocking. Cheney asked him to announce that it was O'Neill's decision to leave Washington to return to private life. O'Neill refused, saying "I'm too old to begin telling lies now."
Suskind's book—informed by interviews with officials other than O'Neill—is only a partial view of the Bush White House. Bush's role on key topics like education, stem-cell research and aids funding is not explored. Bush's role as a military leader after 9/11 is discussed mostly through O'Neill's effort to stop terrorist funding. Bush comes across as mildly effective and pleased with O'Neill's work. The book does not try to cover how Bush engaged with his war cabinet during the Afghan conflict or how his leadership skills were deployed in the making of war. On the eve of the Iraq war, however, O'Neill does tell Suskind that he marvels at the President's conviction in light of what he considers paltry evidence: "With his level of experience, I would not be able to support his level of conviction."
There is no effort to offer an opposing analysis of O'Neill's portrayal of his tenure. The book lists his gaffes—he ridiculed Wall Street traders, accused Democrats of being socialists and disparaged business lobbyists who were seeking a tax credit that the President supported—but it portrays these moments as examples of brave truth telling in a town that doesn't like it. White House aides have a different view: It wasn't just that O'Neill was impolitic, they say; his statements had real consequences—roiling currency markets and Wall Street. What O'Neill would call rigor, Bush officials say, was an excessive fussiness that led to policy gridlock and sniping within the economic team.
O'Neill says he hopes that straight talk about the broken decision-making process in the White House will highlight the larger political and ideological warfare that has gripped Washington and kept good ideas from becoming law. Perhaps naively or arrogantly, or both, he even believes it may help change the climate. Ask him what he hopes the book will accomplish, and he will talk about Social Security reform in earnest tones: tough choices won't be made in Washington so long as it shuns honest dialogue, bipartisanship and intellectual thoroughness. O'Neill may not have been cut out for this town, but give him this: he does exhibit the sobriety and devotion to ideas that are supposed to be in vogue in the postironic, post- 9/11 age.
Loyalty is perhaps the most prized quality in the White House. In the book, O'Neill suggests a very dark understanding of what happens to those who don't show it. "These people are nasty and they have a long memory," he tells Suskind. But he also believes that by speaking out even in the face of inevitable White House wrath, he can demonstrate loyalty to something he prizes: the truth. "Loyalty to a person and whatever they say or do, that's the opposite of real loyalty, which is loyalty based on inquiry, and telling someone what you really think and feel—your best estimation of the truth instead of what they want to hear." That goal is worth the price of retribution, O'Neill says. Plus, as he told Suskind, "I'm an old guy, and I'm rich. And there's nothing they can do to hurt me."
From the Jan. 19, 2004 issue of SLIME magazine
Bush Sought ‘Way’ To Invade Iraq?
Jan. 11, 2004
Et Tu, O'Neill?
Former Treasury Secretary Paul O'Neill is the main source for an upcoming book about the Bush White House, "The Price of Loyalty." (Photo: CBS)
"From the very beginning, there was a conviction that Saddam Hussein was a bad person and that he needed to go." Paul O'Neill
O'Neill was fired by the White House a year ago for his disagreement on the president's policy on tax cuts. (Photo: CBS)
(CBS) A year ago, Paul O'Neill was fired from his job as George Bush's Treasury Secretary for disagreeing too many times with the president's policy on tax cuts.
Now, O'Neill - who is known for speaking his mind - talks for the first time about his two years inside the Bush administration. His story is the centerpiece of a new book being published this week about the way the Bush White House is run.
Entitled "The Price of Loyalty," the book by a former Wall Street Journal reporter draws on interviews with high-level officials who gave the author their personal accounts of meetings with the president, their notes and documents.
But the main source of the book was Paul O'Neill. Correspondent Lesley Stahl reports.
Paul O'Neill says he is going public because he thinks the Bush Administration has been too secretive about how decisions have been made.
Will this be seen as a “kiss-and-tell" book?
“I've come to believe that people will say damn near anything, so I'm sure somebody will say all of that and more,” says O’Neill, who was George Bush's top economic policy official.
In the book, O’Neill says that the president did not make decisions in a methodical way: there was no free-flow of ideas or open debate.
At cabinet meetings, he says the president was "like a blind man in a roomful of deaf people. There is no discernible connection," forcing top officials to act "on little more than hunches about what the president might think."
This is what O'Neill says happened at his first hour-long, one-on-one meeting with Mr. Bush: “I went in with a long list of things to talk about, and I thought to engage on and as the book says, I was surprised that it turned out me talking, and the president just listening … As I recall, it was mostly a monologue.”
He also says that President Bush was disengaged, at least on domestic issues, and that disturbed him. And he says that wasn't his experience when he worked as a top official under Presidents Nixon and Ford, or the way he ran things when he was chairman of Alcoa.
O'Neill readily agreed to tell his story to the book's author Ron Suskind – and he adds that he's taking no money for his part in the book.
Suskind says he interviewed hundreds of people for the book – including several cabinet members.
O'Neill is the only one who spoke on the record, but Suskind says that someone high up in the administration – Donald Rumsfeld - warned O’Neill not to do this book.
Was it a warning, or a threat?
“I don't think so. I think it was the White House concerned,” says Suskind. “Understandably, because O'Neill has spent extraordinary amounts of time with the president. They said, ‘This could really be the one moment where things are revealed.’"
Not only did O'Neill give Suskind his time, he gave him 19,000 internal documents.
“Everything's there: Memoranda to the President, handwritten "thank you" notes, 100-page documents. Stuff that's sensitive,” says Suskind, adding that in some cases, it included transcripts of private, high-level National Security Council meetings. “You don’t get higher than that.”
And what happened at President Bush's very first National Security Council meeting is one of O'Neill's most startling revelations.
“From the very beginning, there was a conviction, that Saddam Hussein was a bad person and that he needed to go,” says O’Neill, who adds that going after Saddam was topic "A" 10 days after the inauguration - eight months before Sept. 11.
“From the very first instance, it was about Iraq. It was about what we can do to change this regime,” says Suskind. “Day one, these things were laid and sealed.”
As treasury secretary, O'Neill was a permanent member of the National Security Council. He says in the book he was surprised at the meeting that questions such as "Why Saddam?" and "Why now?" were never asked.
"It was all about finding a way to do it. That was the tone of it. The president saying ‘Go find me a way to do this,’" says O’Neill. “For me, the notion of pre-emption, that the U.S. has the unilateral right to do whatever we decide to do, is a really huge leap.”
And that came up at this first meeting, says O’Neill, who adds that the discussion of Iraq continued at the next National Security Council meeting two days later.
He got briefing materials under this cover sheet. “There are memos. One of them marked, secret, says, ‘Plan for post-Saddam Iraq,’" adds Suskind, who says that they discussed an occupation of Iraq in January and February of 2001.
Based on his interviews with O'Neill and several other officials at the meetings, Suskind writes that the planning envisioned peacekeeping troops, war crimes tribunals, and even divvying up Iraq's oil wealth.
He obtained one Pentagon document, dated March 5, 2001, and entitled "Foreign Suitors for Iraqi Oilfield contracts," which includes a map of potential areas for exploration.
“It talks about contractors around the world from, you know, 30-40 countries. And which ones have what intentions,” says Suskind. “On oil in Iraq.”
During the campaign, candidate Bush had criticized the Clinton-Gore Administration for being too interventionist: "If we don't stop extending our troops all around the world in nation-building missions, then we're going to have a serious problem coming down the road. And I'm going to prevent that."
“The thing that's most surprising, I think, is how emphatically, from the very first, the administration had said ‘X’ during the campaign, but from the first day was often doing ‘Y,’” says Suskind. “Not just saying ‘Y,’ but actively moving toward the opposite of what they had said during the election.”
The president had promised to cut taxes, and he did. Within six months of taking office, he pushed a trillion dollars worth of tax cuts through Congress.
But O'Neill thought it should have been the end. After 9/11 and the war in Afghanistan, the budget deficit was growing. So at a meeting with the vice president after the mid-term elections in 2002, Suskind writes that O'Neill argued against a second round of tax cuts.
“Cheney, at this moment, shows his hand,” says Suskind. “He says, ‘You know, Paul, Reagan proved that deficits don't matter. We won the mid-term elections, this is our due.’ … O'Neill is speechless.”
”It was not just about not wanting the tax cut. It was about how to use the nation's resources to improve the condition of our society,” says O’Neill. “And I thought the weight of working on Social Security and fundamental tax reform was a lot more important than a tax reduction.”
Did he think it was irresponsible? “Well, it's for sure not what I would have done,” says O’Neill.
The former treasury secretary accuses Vice President Dick Cheney of not being an honest broker, but, with a handful of others, part of "a praetorian guard that encircled the president" to block out contrary views. "This is the way Dick likes it," says O’Neill.
Meanwhile, the White House was losing patience with O'Neill. He was becoming known for a series of off-the-cuff remarks his critics called gaffes. One of them sent the dollar into a nosedive and required major damage control.
Twice during stock market meltdowns, O'Neill was not available to the president: He was out of the country - one time on a trip to Africa with the Irish rock star Bono.
“Africa made an enormous splash. It was like a road show,” says Suskind. “He comes back and the president says to him at a meeting, ‘You know, you're getting quite a cult following.’ And it clearly was not a joke. And it was not said in jest.”
Suskind writes that the relationship grew tenser and that the president even took a jab at O'Neill in public, at an economic forum in Texas.
The two men were never close. And O'Neill was not amused when Mr. Bush began calling him "The Big O." He thought the president's habit of giving people nicknames was a form of bullying. Everything came to a head for O'Neill at a November 2002 meeting at the White House of the economic team.
“It's a huge meeting. You got Dick Cheney from the, you know, secure location on the video. The President is there,” says Suskind, who was given a nearly verbatim transcript by someone who attended the meeting.
He says everyone expected Mr. Bush to rubber stamp the plan under discussion: a big new tax cut. But, according to Suskind, the president was perhaps having second thoughts about cutting taxes again, and was uncharacteristically engaged.
“He asks, ‘Haven't we already given money to rich people? This second tax cut's gonna do it again,’” says Suskind.
“He says, ‘Didn’t we already, why are we doing it again?’ Now, his advisers, they say, ‘Well Mr. President, the upper class, they're the entrepreneurs. That's the standard response.’ And the president kind of goes, ‘OK.’ That's their response. And then, he comes back to it again. ‘Well, shouldn't we be giving money to the middle, won't people be able to say, ‘You did it once, and then you did it twice, and what was it good for?’"
But according to the transcript, White House political advisor Karl Rove jumped in.
“Karl Rove is saying to the president, a kind of mantra. ‘Stick to principle. Stick to principle.’ He says it over and over again,” says Suskind. “Don’t waver.”
In the end, the president didn't. And nine days after that meeting in which O'Neill made it clear he could not publicly support another tax cut, the vice president called and asked him to resign.
With the deficit now climbing towards $400 billion, O'Neill maintains he was in the right.
But look at the economy today.
“Yes, well, in the last quarter the growth rate was 8.2 percent. It was terrific,” says O’Neill. “I think the tax cut made a difference. But without the tax cut, we would have had 6 percent real growth, and the prospect of dealing with transformation of Social Security and fundamentally fixing the tax system. And to me, those were compelling competitors for, against more tax cuts.”
While in the book O'Neill comes off as constantly appalled at Mr. Bush, he was surprised when Stahl told him she found his portrait of the president unflattering.
“Hmmm, you really think so,” asks O’Neill, who says he isn’t joking. “Well, I’ll be darned.”
“You're giving me the impression that you're just going to be stunned if they attack you for this book,” says Stahl to O’Neill. “And they're going to say, I predict, you know, it's sour grapes. He's getting back because he was fired.”
“I will be really disappointed if they react that way because I think they'll be hard put to,” says O’Neill.
Is he prepared for it?
“Well, I don't think I need to be because I can't imagine that I'm going to be attacked for telling the truth,” says O’Neill. “Why would I be attacked for telling the truth?”
White House spokesman Scott McClellan was asked about the book on Friday and said "The president is someone that leads and acts decisively on our biggest priorities and that is exactly what he'll continue to do."