WASHINGTON - President Bush nominated John W. Snow, chairman of CSX Corp., to be Treasury secretary yesterday and help sell Bush's tax-cutting economic agenda, which will be crucial to his bid for re-election in 2004.
Snow, a 63-year-old lawyer and economist, held top transportation posts in the Ford administration. More recently, he has guided CSX, the Richmond, Va., transportation conglomerate, into one of the nation's largest railroad companies.
"John Snow has excelled as a business leader, an expert on economic policy, an academic and as a public servant," Bush said in a brief announcement.
If confirmed by the Senate, the president said, Snow "will be a key adviser on the economy and a key advocate for my administration's agenda for growth, new jobs, and wider and more international trade."
Bush made the announcement three days after forcing Paul H. O'Neill to resign as Treasury secretary as part of a shake-up of the economic team. The moves were intended to signal that the president is actively confronting a sluggish economy that has hurt many Americans.
Last week, Bush also ousted Lawrence Lindsey, his top economic adviser. And last month, he forced out Harvey L. Pitt, the chairman of the Securities and Exchange Commission.
Stephen Friedman, a 64-year-old former chairman of Goldman Sachs, has emerged as the leading candidate to replace Lindsey, though officials cautioned that no final decision has been made. An announcement is expected soon.
Snow is known as an articulate and able consensus builder. As Treasury secretary, he might have to revise some of his economic positions. Bush is a fervent supporter of tax cuts; Snow is seen as committed to restrained public spending and balanced budgets and fearful that tax cuts can sometimes swell budget deficits.
Yet he will be asked to promote the package of tax cuts and other measures that Bush will propose in January to try to stimulate the ailing economy.
The president praised the breadth of Snow's resume, noting that he has experience in government and corporate America and holds degrees in both law and economics.
Still, Bush's choice surprised and disappointed some on Wall Street, where most favored a new Treasury secretary who is close to their own ranks. O'Neill was disparaged for, among other things, being a Wall Street outsider - lacking deep knowledge of the markets or the ability to build investor confidence.
Wall Street analysts predicted that Snow would be a more effective communicator than O'Neill, whose blunt, off-the-cuff remarks often irked and embarrassed the White House. But they also said they feared that Snow, like O'Neill, is a relative outsider in the eyes of investors.
"The view here is, who's John Snow and why is he different from Paul O'Neill?" said Larry Wachtel, a market analyst at Prudential Securities who said many yearned for a figure like Robert E. Rubin, the widely admired Treasury secretary in the Clinton administration who had spent a career on Wall Street.
"O'Neill was an industrialist," Wachtel said. "Here is Snow, who is an industrialist. Not much has changed. Wall Street wanted Bob Rubin, revisited. He knew the markets and handled himself with political aplomb. You get John Snow, and Wall Street could be put on the shelf."
Another analyst, Alan Ackerman of Fahnestock & Co., described Snow as "a good communicator and very good at working in a difficult framework for decision-making." But he added that, to Wall Street, "this apple may have fallen a bit farther from the tree than we would have liked."
"Wall Street very much likes what is known rather than the unknown," Ackerman said. "And Snow is unknown to Wall Street players."
At the same time, Snow has been an active supporter of improving corporate ethics after a series of accounting scandals this year. That factor makes him an appealing figure to represent the face of the economic team.
But Snow's main task will be to help pursue the administration's goal of a robust and sustained recovery that creates jobs and expands global trade.
The president acknowledged concern yesterday about a lack of investor confidence and about the unemployment rate, which surged to 6 percent last week, the highest in nearly nine years.
The stimulus package that Bush is expected to unveil will focus mostly on tax relief. The plan will likely propose to make the $1.3 trillion tax cut passed last year permanent and to cut taxes that investors and companies pay on corporate dividends.
Snow "will be at the center of this effort," Bush said.
Congressional Democrats sounded a theme they began last week, arguing that Bush's shake-up revealed a White House scrambling to justify an economic program that does little to aid ordinary Americans. Many of them favor an alternative stimulus package of smaller tax cuts intended to benefit low- and middle-income Americans.
"It wasn't necessarily the people that he had in place in the last two years," said Sen. Tom Daschle, the Democratic Senate leader. "It's the plan. Trickle-down economics doesn't work."
Sen. Jon Corzine, a New Jersey Democrat, worked with Friedman at Goldman Sachs and called him "a pragmatic, thoughtful individual." He called Snow a "disciplined, excellent manager." But like Daschle, he said, "The problem is the plan."
Because the stimulus plan Bush will unveil has been largely drawn up already, Snow is likely to play a substantial role only in selling it, not in shaping it, White House aides said.
Yet in coming months, Snow and other new members of the economic team will likely exert influence on other policies, notably a possible prescription drug benefit for Medicare and Social Security reform.
Surviving the shake-up last week was Glenn Hubbard, the chairman of the White House Council of Economic Advisers. Hubbard is an academic who is said to have played an increasingly crucial role in advising Bush once Lindsey began to lose favor.
Some tax-cutting conservatives said they were disappointed by the possible selection of Friedman, who, like Snow, is known to be cautious about tax cuts.
Stephen Moore of the Club for Growth, a group that backs tax relief, said he and other conservatives are pressuring the White House to choose someone else for Lindsey's old job. Moore, who described Friedman as a "deficit phobiac" who has forcefully opposed tax cuts, argued that Snow's tepid support for tax relief should be balanced with a vocal advocate of tax cuts within the White House.
Rep. Steny H. Hoyer, the Southern Maryland Democrat who is his party's House whip, suggested that both Snow and Friedman might challenge Bush's views on tax relief and perhaps serve to restrain any excessive tax-cutting.
"They're going to be candid about the consequences of the president's economic policies," Hoyer said. "I wouldn't be surprised if both of the new people make observations that run counter to ... the president."
But Peter Morici, a business professor at the University of Maryland and chief economist of the International Trade Commission during the Clinton administration, said he did not expect many internal squabbles.
"Snow was not hired to make economic policy," he said. "Snow was hired to sell it."
Indeed, one of the reasons why the White House cooled to O'Neill, another deficit hawk, was that on several occasions he sounded lukewarm at best about Bush's proposed tax cuts, suggesting they might drive up the budget deficit.
O'Neill, angered by his forced resignation, did not attend yesterday's announcement. Lindsey was present. Asked what he intends to do after he leaves his post, he cracked, "I'm going to Disney World."
Like O'Neill, Snow served in the Ford administration, while Vice President Dick Cheney was White House chief of staff. Snow was deputy undersecretary of transportation and also served as administrator of the National Highway Traffic Safety Administration.
Snow presided over CSX during a period, between 1991 and 1997, when it transferred many of its employees from offices in Baltimore to Jacksonville, Fla., costing Baltimore 1,100 jobs.
The rail industry was jolted by Snow's decision in 1996 to make a bid to buy the former Conrail Inc. The company ended up trying to integrate parts of Conrail into its system. But CSX lost many of its customers, who complained of freight delays and poor service.
John Barnes, an analyst at Deutsche Bank Securities who covers the industry, said Snow was rightfully blamed for some of his company's missteps and that he took responsibility.
"But in the last few years, he has done a good job righting the ship," Barnes said. "He was beginning to take the railroad back to where it was before Conrail."
Snow, who is one of more than 100 members of the Johns Hopkins University board of trustees, wasted little time yesterday in pursuing confirmation. By afternoon, he had phoned about 20 lawmakers.
To try to avoid all potential controversy, he also resigned his membership at Augusta National, the site of the Masters golf tournament. The club is the target of criticism for still refusing to admit women.
Sun staff writers Julie Hirschfeld Davis and Bill Atkinson, staff researcher Sandy Levy and the Associated Press contributed to this article.
John W. Snow, 63
Bush names Treasury nominee
Education -- Bachelor's degree, Kenyon College, University of Toledo, 1962; Ph.D. in economics, University of Virginia, 1965; kaw degree, George Washington University, 1967
Experience -- President and chief executive officer, CSX Corp., 1985-present (Chairman since 1991); vice president, CSX, 1977-85; administer, National Highway Traffic Safety Administration1976-77; deputy undersecretary, 1975-76; assistant secretary for governmental affairs, DOT, 1974-75; deputy assistant secretary for policy, plans and international affairs, DOT, 1973-74; adjunct professor of law, George Washington University Law School, 1972-75; assistant general counsel, DOT 1973-73; Wheeler & Wheeler law firm, 1967-72; assistant professor of economics, University of Maryland, 1965-67.
Family -- Wife, Carolyn; three sons. ASSOCIATED PRESS