How Bush Landed a Wall Street Titan for Treasury

President George Bush has long made it clear that he identifies more with Main Street than with Wall Street, but even he had to know that his Administration has not done a very good job lately of selling the notion of a Bush economic boom to Main Street. So Tuesday's announcement that Goldman Sachs chairman Henry Paulson, who holds the  world's most prestigious investment banking job, had agreed to be nominated for Treasury Secretary was a thrilling coup for a White House that has had little cause for rejoicing lately.

"We landed the whale," one senior administration official declared. One veteran of the administration said that Paulson, a Harvard MBA just like his new boss, is so respected by the markets and media that his confirmation and honeymoon will finally give the administration a clean shot at telling "a very fact-based story about the strength of the U.S. economy."

The Administration almost didn't get that opportunity. Bush's aides had been trying to find a successor to John Snow on Wall Street for months, but the most promising candidates had turned them down — including Paulson, just a few months ago. One of the reasons Bush had such a hard time landing a master of the universe like Paulson is that the Treasury job had shrunk during his presidency — at least in the estimation of Wall Street — from a premier policymaking platform to a cheerleading outpost subservient to the West Wing.

But an official involved in the selection process said Bush "took it up himself, and wouldn't take 'no' for an answer." Aides said Bush convinced his quarry that he would have a seat and voice at the table, and the President seemed to underscore that during his Rose Garden announcement by saying that Paulson "will be my principal advisor on the broad range of domestic and international economic issues that affect the well-being of all Americans."

Paulson, 60, already has some longstanding ties with the Bush White House. Known to everyone as Hank, he was a Goldman Sachs colleague of White House Chief of Staff Joshua Bolten, and achieved the Pioneer designation in Bush's reelection campaign by raising at least $100,000. He's going from a job where his total compensation last year was valued at more than $38 million, according to Dow Jones Newswires, to one where the annual salary is $183,500.

White House Press Secretary Tony Snow said Paulson met with Bush on May 20 and accepted the job the next day, then underwent all the clearances that go with a position that must be confirmed by the Senate. Rumors were flying that Treasury Secretary John Snow was on his way out, and Bush was asked at his East Room news conference on May 25 if he had "any indication he intends to leave his job any time soon." Bush replied: "No, he has not talked to me about resignation. I think he's doing a fine job" Tony Snow said that declaration "was artfully worded."

Senators from both parties predicted quick confirmation for Paulson, who has deep expertise in China policy and since 2004 has been chairman of the Nature Conservancy, an environmental non-profit organization. He is already well-known in Washington, especially since he serves as chairman of the Financial Services Forum, an association of the chief executive officers of 20 of the country's largest financial institutions — and perhaps the country's most powerful trade association, routinely drawing speakers like President Bush, former Federal Reserve Chairman Alan Greenspan and Senate Majority Leader Bill Frist. Sen. Charles E. Schumer (D-N.Y.), who sits on the Senate Finance and Banking committees and talked to Paulson shortly after the announcement, called him "the best pick America could have hoped for to deal with the difficult economic problems the country faces."

At Tuesday's announcement ceremony, Paulson said that "of course, the whole world is dependent upon the U.S. economy as a major engine of its growth. And our economy's strength is rooted in the entrepreneurial spirit and the competitive zeal of the American people, and in our free and open market.  It is truly a marvel, but we cannot take it for granted. We must take steps to maintain our competitive edge in the world." He didn't say what those steps are. But administration officials promised that Paulson, an honorable mention All American as a lineman at Dartmouth, will help call the plays — not just run them.