The Bush Administration's quest to bring Wall Street to the cabinet has ended with the nomination of the one of the mightiest investment titans in New York to the post of treasury secretary.
President Bush on Tuesday named Henry Paulson, chairman and CEO of Goldman Sachs Group Inc., as his choice to replace out-going Treasury Secretary John Snow.
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Paulson, 60, a native of Illinois, has indicated in the past that he supports Bush Administration economic policies, but that deficits are a concern to him. In November he told Der Spiegel magazine that the U.S. needed to resolve deficits in spending and trade.
"The trade balance is a problem; the fact is we're just not exporting enough," Paulson said, but added, "That said, I still prefer the situation we're in to a situation without a deficit but with no growth," he told the magazine. In other published comments, Paulson has written opinions in favor of the administration.
He wrote in the Wall Street Journal in 2001: "By cutting taxes, the Bush plan will reduce the temptation to expand the role of government in the U.S. economy, and, no less importantly, put the budget surpluses into the hands of those whose hard work and thrift created them: taxpayers.”
In short remarks at the White House Rose Garden Tuesday, Paulson, who goes by “Hank,” said the U.S. economy was strong, according to Reuters. "But we cannot take it for granted," he added. "We must take steps to maintain our competitive edge in the world," he said.
Lloyd Blankfein, Goldman's president and chief operating officer, is the likely successor at the firm, according to the Wall Street Journal.
In recent years, Goldman Sachs' fortunes have grown on its own cash, betting on everything from the direction of interest rates to the price of oil, the Wall Street Journal reported. At the same time, it has faced criticism that it has put its own interests ahead of its clients. In 2005 the firm posted a record annual profit of $5.63 billion. Paulson's share of that was about $38.5 million, according to Reuters.
The White House has been courting Paulson for the top Treasury post for some time, according to Business Week Online. It took the influence of former Goldman executive Josh Bolten, who was recently named White House chief of staff, to close the deal, according to Business Week and other sources.
Unlike some recent Cabinet nominations, Paulson is expected to sail through confirmation hearings, his nomination having already won public praise from such administration critics as U.S. Sen. Charles Schumer (D-N.Y.), a member of the Senate Treasury Committee.