This vivid, unfolding narrative is like no other book that has been written about the Bush presidency. At its core are the candid assessments of former Secretary of the Treasury Paul O'Neill, the only member of Bush's cabinet to leave and speak frankly about how and why the administration has come to its core policies and decisions -- from cutting taxes for the rich to conducting preemptive war.
O'Neill's account is supported by Pulitzer Prize-winning journalist Ron Suskind's interviews with numerous participants in the administration, by transcripts of meetings, and by voluminous documents. The result is a disclosure of breadth and depth unparalleled for an ongoing presidency. As readers are taken to the very epicenter of government, Suskind presents an astonishing picture of a president so carefully managed in his public posture that he is a mystery to most Americans. Now, he is revealed.
|Publisher:||Simon & Schuster|
|Product dimensions:||5.50(w) x 8.50(h) x 1.30(d)|
About the Author
Read an Excerpt
from Chapter 2: A Way to Do It
Paul O'Neill arrived at 6:15 A.M. on his first morning in office.
The President, he understood, was also an early riser in his office by 7 A.M. and O'Neill mused that maybe this would be part of what defined this administration: people of fortitude and clarity, always first to work. At the very least, this was one thing the President and he had in common.
His secretary, Annabella Mejia, was already there. "You're late," she chided. "Mr. Secretary, it's practically afternoon."
"Thanks, I'll get my own coffee," he said with a chuckle. "Can I get you anything, Annabella?"
Before almost anyone else had arrived, O'Neill had drafted a strategic memo to the President. By midmorning, it was ready. He had his secret pact with Greenspan. But the goal of pushing forward the President's plan was central to his job description. A core responsibility. O'Neill decided he could be a team player and still feel like himself. Good policy could make good politics at least, it was possible. With a surplus number of $5 trillion a number O'Neill understood from a friend at the Congressional Budget Office would soon rise to $5.6 trillion he needed to help the President set the right priorities.
Memorandum to the President
From: Paul H. O'Neill
Subject: Tax Reform
Date: January 22, 2001
I believe there is an opportunity to get quick action on your tax proposal if we move now.
You have won the general argument on the desirability of a tax cut and the opposition has been cornered into arguing how large the cut should be, and, their numbers are moving toward your numbers and scope....
O'Neill knew that special interests, with their congressional advocates, were already lined up at the White House door, pushing for midsize proposals abolishing inheritance taxes or offering a tax credit for each legitimate child along with perennials like tax incentives for ethanol production or inner-city fix-ups. Bundling everyone's favorite items would create "a working majority" and "a way to get a quick victory in the tax arena," O'Neill wrote, aware that this was something that the President's political team found attractive. Considering the election results, any show of strength, or weakness, would be read as a trend. A quick victory was crucial. The problem, he wrote the President, was that his proposed across-the-board reductions in marginal tax rates might be left behind.
O'Neill had made his own decision about priorities. The bundle of many targeted credits and exemptions, with their myriad schedules and provisions, would be difficult to rein in with a trigger. A broad tax rate reduction would have a kind of simple, manageable clarity. It would progress, year by year, on a schedule, depending on whether there was a surplus. If the excess were to be used up, the rate reductions would halt.
Now, he had to help the President see that this was also the strategically sound move. One of the keys was speed. "Growing agreement, even alarm in some quarters, with regard to the slowing economy," O'Neill wrote, could justify swift action on this one defining issue, provided they could get a proposal to Congress in a few weeks and push through marginal rate cuts most likely through a tweak of withholding retroactive to January 1.
The only congressional argument to counter this "insurance policy against the slowing economy," he noted, would be that "it doesn't fit their process." Failure to act, moreover, would expose members to blame if the economy slipped into recession.
Embrace reality, he suggested. This plan would take us out of the "morass about the theology of economics" a shot at anyone who might be whispering about supply-side concepts and stress that "we care about taking practical action right now." Meanwhile, it would leverage the current economic uncertainties. "We know the real economy has slowed and the official statistics will reflect the slowing over the next quarter, at least. If the current slowness starts moving toward re-acceleration late in the second quarter, it would weaken the argument for quick action."
After a few paragraphs about the need to stress how this rate reduction would benefit low- and middle-income Americans and "stop the drumbeat about a tax cut for the rich," O'Neill unsheathed the blade.
In order to stay within your total tax reduction numbers and provide early implementation for marginal rates we will have to stretch out implementation of some of the other initiatives. We should argue that we will revisit implementation dates for other features, if the economy permits us to do so.
He read it, satisfied the meat of fiscal reality, with a dash of conditionality, between two slices of political strategy and typed in, "cc: Vice President Cheney, Larry Lindsey." Of course, the current proposal even if it were retroactive to January wouldn't provide much actual stimulus. But if they hitched their wagon to the need for stimulus, they'd be obligated to actually create something that resembles a stimulus...at some point.
"Let's get comfortable," George Bush said as O'Neill entered the Oval Office.
The President moved toward the wing chair near the fireplace, tucked between one of two sofa-and-chair clusters in the thirty-nine-by-twenty-two-foot oval. Bush sat in the wing chair facing the clock, where presidents always sit and O'Neill sat on the near end of the small adjacent mustard-colored couch, where someone sits if he or she is the only visitor. As O'Neill navigated all this he'd been here many times and knew the complex seating rules his mind raced back to a conversation with George W. Bush just before the mid-December press conference in Austin, where the President-elect had announced his nomination...yes, there may have been a "Pablo" thrown in among the "Paul"s. O'Neill didn't think anything of it. He didn't know, back then, about Bush's odd enthusiasm for nicknames.
He knew now and settled into the couch...and his new identity: a sixty-five-year-old man named Pablo.
"So, whatta ya got?" the President barked, all business.
It was the afternoon of Wednesday, January 24, the third day of the Bush administration. The President calls the meetings. It is traditional protocol. One might suggest the need for a meeting to an Andy Card or Cheney, who would then pass it along, but the President issues the summons.
Bush had O'Neill's memo Paul figured they'd talk about that and then they'd discuss whatever came up. Cheney had said to him at one point that it might be valuable for Bush at the start of his presidency to have these meetings. To range around a bit.
O'Neill, as Treasury Secretary, institutionally designated to be the President's leading voice on the economy, offered a fifteen-minute overview on what he considered the informed opinion (that is, his and Greenspan's) and said that they were in the early stages of either an apparently mild recession or a pronounced inventory correction. The key was to remain sober. To watch the numbers. If we look concerned and talk up recession too much, he said, it will depress spending and encourage a downturn. O'Neill explained that the major problem was not the "encumbrances on capital" there was plenty of low-cost capital out there, unable to find a profitable home. The problem was on the consumption side. The real numbers, he assured the President, did not support the bleakness of some "economic theorists."
O'Neill referred to items of his memo. Marginal rate cuts, if they were affordable, should be the priority. He said the tax cut plan, under almost any permutation thus far proposed, wouldn't provide measurable stimulus in the short term; what would create positive economic effects is "a sense that fiscal discipline has been preserved" something that should boost equities markets and keep long-term bond rates in check. All that left the economy well suited to respond to a rate cut from the Fed.
There were a dozen questions that O'Neill had expected Bush to ask. He was ready with the answers. How large did O'Neill consider the surplus, and how real? How might the tax cut be structured? What about reforming Social Security and Medicare, the budget busters? How will we know if the economy has turned?
Bush didn't ask anything. He looked at O'Neill, not changing his expression, not letting on that he had any reactions either positive or negative.
O'Neill decided therefore to move from the economy to a related matter. Steel tariffs. It was a simmering issue the U.S. steel industry was hurting and pushing for protections. He said to the President, "You were admirably clear during the campaign about your stance in support of free trade it's the only stance to take and there's no way it can be squared with tariffs." He suggested that, as Treasury Secretary, he round up all the world's major producers and create a structure of shared incentives and sacrifices that would avoid tariff wars. He'd already tried some of this to good effect with the aluminum industry in 1993.
The President said nothing. No change in expression. Next subject.
Certainly, each president's style is different. But O'Neill had a basis for comparison. Nixon, Ford, Bush 41, and Clinton, with whom he had visited four or five times during the nineties for long sessions on policy matters. In each case, he'd arrived prepared to mix it up, ready for engagement. You'd hash it out. That was what he was known for. It was the reason you got called to the office. You met with the President to answer questions.
"I wondered, from the first, if the President didn't know the questions to ask," O'Neill recalled, "or did he 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."
With steel tariffs left hanging, O'Neill shrugged if this was to be a monologue, he'd better make it sing.
They'd both been at that education conference five years before, so he went with that. "No Child Left Behind, I like that," O'Neill said, "but the idea that really moves us forward a real action plan is One Child at a Time."
It was an idea he'd road-tested with educators for years that we need "an individualized mandate, where children would be constantly be assessed, one child at a time, in order to help create a little strategic plan for each student," a personalized learning strategy to fill gaps and develop latent potential. "It's a rethinking of what's possible, Mr. President. There's nothing more important than nurturing our human potential as a nation our future depends on it."
Bush shifted in the wing-back chair. "Right, that's the concept of disaggregation" a term used by educational statisticians to break down test scores "I have that covered."
O'Neill wondered if he should point out that the President might be misusing that term but thought again. Instead, he spoke of the need to rigorously assess how federal money is spent in key areas and how to get more value for each dollar and apply it "to the trillions we've spent in foreign aid over the years...what were the goals underlying those expenditures and what were the outcomes." Once that evidence is gathered, O'Neill said, it would be appropriate to examine whether institutions like the World Bank and the International Monetary Fund needed restructuring.
The President seemed to nod in affirmation. O'Neill couldn't be sure.
Using the same model, O'Neill proffered a structure to assess the value of America's role in international economic crises such as Mexico in 1995 or Indonesia in 1997. O'Neill was no longer expecting a response. He discussed ways to apply "value analysis" to the reform of health care and shrink federal expenditures, an area where he is considered by many as one of the country's most original thinkers. Then he offered a similar analytical framework to approach Japan's economic woes and craft an appropriate role for the United States.
O'Neill took a breath. The Oval Office's eighteenth-century grandfather clock eight feet ten inches of mahogany with satinwood inlays was to his back. He glanced at his watch. He'd been talking for just over fifty minutes. The meeting was scheduled for an hour.
"All right, Mr. President, maybe to finish up we could talk about global climate change..." Along with his memo on the tax cut strategy, O'Neill had sent over a booklet Alcoa had produced in 1998 with the text of an extensive speech he had given a thorough analysis of the issue, what was known and as yet unknown, and principles to guide future actions. Bush seemed to indicate with a tilt of his head that he'd read it. But, again, O'Neill wasn't certain.
He pushed forward, adding his current thoughts on what the President might do on the issue a flash point for environmental policy. He assessed the flaws of the Kyoto treaty and offered thoughts about how they might be remedied.
Both men are precise. And the hour was up. They stood at the same moment to shake hands.
"Get me a plan on global warming."
O'Neill nodded, a bit surprised.
Bush said it again. "Get me a plan on it."
Yes, fine, he'd create a plan, O'Neill said. Then he slipped out of the Oval Office, wondering whether that meant he was supposed to call EPA administrator Christie Whitman the person designated to handle that area or to not call her.
Copyright © 2004 by Ron Suskind
Table of Contents
|Chapter 1||First Appointment||1|
|Chapter 2||A Way to Do It||53|
|Chapter 3||No Fingerprints||87|
|Chapter 4||Base Elements||123|
|Chapter 5||The Scale of Tragedy||163|
|Chapter 6||The Right Thing||203|
|Chapter 7||A Real Cult Following||241|
|Chapter 8||Stick to Principle||265|
|Chapter 9||A Tough Town||307|
|Author's Note to Appendix||349|
An Interview With Ron Suskind
Barnes & Noble.com: The Price of Loyalty is a candid look inside the Bush administration, as seen by former Treasury secretary Paul O'Neill, newly updated in paperback. What's been added for this new edition?
Ron Suskind: The new paperback has my afterword, which is essentially a new, added chapter about the havoc that ensued in the days and months after the book was released. Both the book, and public reaction to the book, became historically noteworthy. The paperback also includes complete copies of a selection of internal documents from the 19,000-document trove O'Neill handed to me (it was on two electronic disks -- for easy carrying).
B&N.com: Were you surprised at the reaction to the hardcover edition?
RS: I knew it would be noisy, but it was hard to imagine the thunderous reactions from the White House, the media, and the American public. The thing about being first -- the first full, unmanaged disclosure from inside the Bush White House -- is that there are no models to shape expectations.
In this case, the WH improvised, first trying to dismiss the book (that lasted only a day), questioning O'Neill's character, launching an investigation, then, through various surrogates of the president, attacking O'Neill directly. The media -- so hungry for disclosures after having to survive so long on the thin gruel of "official speak" from the administration -- embraced nearly two dozen key passages in the book, excerpting, citing, and writing or talking about how various disclosures altered prevailing views of Bush and his presidency. This was helped along by the unflinching testimony of O'Neill and others in the book and by the 19,000 documents -- it helped news establishments feel certainty without having to match the book's reportage.
As for readers, there was an early recognition that they were finally privy to a realm that had been off-limits for the past few years, though its generally accessible though writing and film to Americans in the media age: the inside of the White House, that most public of buildings.
B&N.com: The Bush Justice Department launched an immediate investigation of how O'Neill got a hold of the many official documents you cite in the book. What's the status of that investigation?
RS: The investigation -- ordered by the White House (according to various folks involved whom I've spoken with) -- was actually managed by the inspector general's office at Treasury, with assistance from lawyers at other departments in the government. The charge was that O'Neill had improperly received classified documents from Treasury when he approached them a few months into my research -- and then compounded the error by giving those documents to me. I possessed the documents from the start (Paul never even put the disks into his computer), so I quickly hired a legal team and, after chatting with O'Neill, moved to keep him out of the fray. After all, I was protected by the First Amendment and he wasn't.
There are lots of ins and outs to what occurred next. I started to release some documents on my web site (RonSuskind.com) and the lawyers fought it out. But, after two months, investigators said that we had done nothing wrong (there were no documents in the trove specifically marked "Classified") but that 140 documents should have been stamped classified but were not. There is still some legal back-and-forth going on, so I can't get into all the details, but suffice to say the documents in question are being carefully managed and are secure.
B&N.com: Vice President Dick Cheney, who subsequently described him as a "round peg in a square hole," personally recruited O'Neill. Since they're longtime friends, shouldn't Cheney have known that "honest broker" O'Neill would be a bad fit?
RS: The question, I suppose, is a bad fit for what? Presidents have always valued the role of the confident "honest broker," whose first priority is to speak frankly to the leader, and not care, firstly, what the president is hoping to hear. Bush didn't seem to want that sort of support, or guidance. Should Cheney have known that O'Neill was an expert on creating this sort of effective, rigorous decision-making system inside government and business? Of course, but it seems that Cheney -- and others -- didn't think this all through. This is something I'd heard from others, including John DiIulio, former head of the faith-based initiative, who was the first official to leave the administration and speak frankly: They're often sure of themselves without the benefit of investigation.
B&N.com: In O'Neill's view, Bush is seemingly disconnected from all but his closest aides and apparently has little or no grasp of the issues. Doesn't that fly in the face of the image Bush's handlers are fond of cultivating?
RS: Certainly. And it is an image that they've exerted enormous energy and care in projecting. There are various features of this strategy, most notably protecting the president from any unmanaged moments where he'll have to think out loud in public. They've been successful on that score. Bush has largely avoided the venues where other presidents' mastery or intellect has been on display: press conferences, long sit-down interviews with prominent television anchors, or teams from the leading newspapers. At one point, folks in the White House were proffering a list of books the president was reading, including some serious tomes, but that received such a disbelieving response that they backed off. The president is a canny and intelligent fellow, but he's not a reader, sometimes acts impulsively with little supporting evidence, and has a management style that has caused concern among several senior officials who've had regular access to him.
B&N.com: The Bush cabinet meetings appear to be completely scripted in advance. How common is this practice?
RS: I think one thing is important to clarify. The now-famous O'Neill quote about the president being like a "blind man in a room full of deaf people" refers to meetings large and small. Some commentators have misconstrued that quote as referring to cabinet meetings, which tend to be infrequent and unproductive affairs.
The answer to your question: Yes, meetings of all sizes are, not infrequently, scripted. Principals will often get a note in advance (you'll speak third and talk for three minutes about this or that, etc.). There tends to be very little of the kind of free-formed search-and-find for answers that many other presidents have enjoyed and prospered from. And no, scripting meetings with top aides is not something that other presidents have done with any regularity.
B&N.com: By Secretary O'Neill's account, the Bush economic policy was heavily weighted towards tax cuts for the wealthy, no matter the overall state of the economy. Didn't Bush himself question this approach at one point?
RS: Yes, one of the most interesting, and oft-noted, scenes in the book is a large and -- after a few minutes, thoroughly unscripted -- meeting with Bush, Cheney, Rove, O'Neill, Hughes, the senior economic team, and the senior political team. Bush is engaged in a way that participants in the meeting say was extremely rare, prodding and poking at most of the administration's accepted verities. The subject is the second large tax cut (the 2003 initiative to end the double-taxation of dividends) and Bush wonders, several times, if they haven't already given a break to "the top end," and if they need to do it again with this second big tax cut. Various aides attempt to guide him this way and that, and Rove seems to assert his prominence at the finale. Bush, along the way, asks, "What are we doing on compassion?" and then asserts, at day's end, that the only way to get rid of economic uncertainty (much of caused by consumer and investor skittishness as the administration was selling its plan invade Iraq) is to "get rid of Saddam Hussein."
The meeting, it should be noted, is the product of one of the transcripts I received from an unnamed administration official, which was then checked against notes and recollections of others in the room. What's in the book is what various sources agreed about. The word-for-word record of this long meeting of November 26, 2002, is an extraordinary disclosure from an administration that has worked to create very few records of internal deliberations.
B&N.com: From his seat on the National Security Council, Secretary O'Neill was privy to the kind of insider information that would have revealed whether Saddam had WMDs. What was his conclusion on this key issue, one used to justify the invasion?
RS: O'Neill was the first person with direct knowledge of the top-level workings of the administration to say, emphatically, that there was no evidence of weapons of mass destruction. He says he read every dossier from the CIA and other agencies delivered to the NSC.
B&N.com: O'Neill's close relationship with Fed chairman Alan Greenspan is a major facet of the book. Why wasn't Greenspan more critical of the Bush tax cuts at the time they were being proposed, in your opinion?
RS: Greenspan did make his case for "triggers," meaning that tax cuts would be stopped by a trigger if there were not surpluses or available funds (meaning: no deficit-funded tax cuts). But it was overwhelmed by his other comments that the tax cut in 2001 was worthwhile fiscal policy. Greenspan is a master of studied ambiguities, and in this case, the party in power took part of what he said and inflated it into a bold affirmation of their policies. In his comments to O'Neill, Greenspan was clearly dispirited that the key condition -- triggers -- was left behind.
B&N.com: Global warming was an important issue for O'Neill, both before and during his tenure as Treasury secretary. Do you think he'd lend his support to a Kerry administration initiative to address it?
RS: O'Neill is a lifelong Republican, and, in general, no fan of the Democrats or many of John Kerry's prescriptions. Yet, on the other hand, he believes strongly in concerted action to arrest global warming and has many friends, and admirers, who are Democrats. In other words, if asked to help, I'm sure he'd consider it seriously with his usual nonpartisan mien.
B&N.com: O'Neill also served in the Nixon White House. How do you think he would compare and contrast Nixon and W?
RS: O'Neill, like a lot folks I interviewed who worked for Nixon, tend to have a very complex view of that very complex man. One thing that O'Neill and most of Nixon's former aides agree about: Nixon was an extremely ardent and thorough analyst of government and what government can achieve. I have a few sections in the book where Nixon's process of carefully distilling choices and consequences on various issues, both foreign and domestic, are rendered.
I think O'Neill saw a similarly serious engagement by other presidents he's known and served, and expected something similar from W. Not finding it, and finding resistance to his efforts to create effective research and deliberation on key issues from Cheney and others, left him dispirited and, as a citizen, concerned about the reign of ideologues who repelled inquiry.
B&N.com: What most surprised you about what O'Neill had to say?
RS: I suppose, thinking back, I was most startled by O'Neill's comments, early in my reporting, of meetings where the president would sit and say nothing, sometimes for an entire hour. I would respond with probing disbelief. How could that be? He just sits and says nothing? He asks no questions? The "blind man" quote comes from a moment when O'Neill, somewhat frustrated at my skepticism, tried to make me understand how strange this was and how odd he found it to be. After that, others offered me similar recollections of meetings with Bush.
Certainly, among the most surprising passages in the book comes from O'Neill and several other people I interviewed in the first NSC meeting on January 30, 2001. Starting from the first meeting, it was all about how to get Saddam Hussein, including the use of U.S. military ground forces, repairing of the 1991 Gulf War coalition, along with issues of what we would do once we owned the country, in regard to war crimes tribunals, peacekeeping forces, and dividing of the oil fields. That is now the accepted version of events, but when I first heard it from O'Neill and others, and found corroborating evidence in the documents, it was an eyebrow raiser. The reaction, I think, was similar when, months later, it officially became news.