WASHINGTON – President Bush on Monday nominated CSX Corp. Chairman John W. Snow to replace Treasury Secretary Paul O'Neill and lead an economic team retooled for the president's re-election drive.
"John Snow has excelled as a business leader, an expert on economic policy, an academic, and as a public servant," Bush said. "He'll be a superb member of my Cabinet."
Snow, 63, is a former Ford administration official and loyal GOP campaign donor who lives in Virginia.
"In a varied and productive career, John Snow has shown consistent qualities of foresight and integrity and public spirit," Bush said. "He's led one of our nation's largest railroads with skill and success."
Snow credited Bush with shepherding the economy through "one of the shortest and shallowest" recessions. "Yet, I strongly share your view that we cannot be satisfied until everyone — every single person who is unemployed and seeking a job — has an opportunity to work," Snow said.
Wall Street's initial reaction was muted.
"I think the ouster of O'Neill is more important than who they name. With someone like Snow, there's nothing unique to him to move the market either way," said Charles Pradilla, chief investment strategist at SG Cowen Securities.
Snow's selection came just three days after the president fired O'Neill and White House economic adviser Larry Lindsey as part of a shake-up designed to control political damage from the ailing economy.
Lindsey was in the audience for Snow's announcement. Asked what was next for him, he replied, "I'm going to Disney World."
O'Neill, said to be angered by his abrupt ouster, was not present.
Stephen Friedman, a former co-chairman of the investment firm Goldman Sachs, was said to be Bush's choice to replace Lindsey, but his appointment wasn't expected to be announced until Tuesday.
Bush wanted at least two days of headlines showing the White House working on the economy, aides, speaking anonymously, said.
Snow told the president he was "both humbled and deeply honored by your decision."
"Should the United States Senate confirm me, I look forward to joining your economic team to advance a pro-growth, pro-jobs agenda," he said.
Bush cited as positive developments the country's under-control inflation rate, continued low mortgage interest rates, a return to growth in the gross national product and a 5.6 increase in productivity over the last four quarters.
Yet he ticked off a list of worrisome indicators: persistent unemployment in some sectors and regions and the need to strengthen investor confidence.
"Many Americans have very little money left over after taxes," Bush said. "Some struggle under a weight of debt that makes it difficult to save for retirement."
The president was also said to be close to naming a replacement for Harvey Pitt, the embattled chairman of the Securities and Exchange Commission who resigned on Election Day.
Two other ranking members of Bush's economic team, budget director Mitch Daniels and Glenn Hubbard, chairman of Bush's Council of Economic Advisers, were said to be in good standing with the president.
The Senate will have to confirm Snow, and White House officials expect him to be grilled about any government aid to CSX as well as his membership in Augusta National.
The golf club, which hosts the sport's premier tournament, has been under fire for not admitting women. Snow was listed as a member in September.
White House spokesman Ari Fleischer said Bush does not consider membership in an all-male club as a reason to exclude somebody from the Cabinet.
"I'm not aware that that presents any disqualification," Fleischer said.
O'Neill angered Bush with public remarks that reflected his lukewarm views toward White House tax-cut policies. Both he and Lindsey also were criticized by the president's political advisers for their failure to communicate White House economic policies.
Snow and Friedman will not have much impact on the details of a tax-cutting economic plan Bush is poised to announce, but they will be expected to help sell it to the Congress, the public and Wall Street, White House officials said.
All seemed normal enough at the Treasury Department on Monday morning: O'Neill's silver Audi roadster was parked outside the Treasury building, next door to the White House. A wooden plaque bearing his name was still posted on the wall outside his office.
Snow is chairman, president and chief executive of CSX Corp., a transportation conglomerate based in Richmond, Va. The company runs the largest rail-freight network in the eastern United States.
Snow's total direct compensation in 2001 was $20.5 million, according to The Richmond Times-Dispatch. CSX posted $8.1 billion in revenue last year.
Snow was deputy undersecretary at the Transportation Department under President Ford. Vice President Dick Cheney, who brought O'Neill into the administration and then led the selection process for O'Neill's successor, also served Ford as chief of staff.
Snow and his company have deep ties to the administration.
The new nominee contributed $1,000 to Bush's 2000 presidential primary campaign, and also gave $1,000 to Bush's principle GOP rival, Arizona Sen. John McCain.
In all, Snow gave at least $12,000 to campaigns in the 1999-2000 election cycle and at least $23,000 in 2001-02, all to Republicans, figures compiled by the nonpartisan Center for Responsive Politics show.
Two other CSX executives and a CSX lobbyist were among Bush's top donors, each raising at least $100,000 for Bush's 2000 primary campaign.
CSX itself has been a faithful Republican donor. The company and its employees contributed at least $840,000 to campaigns in the 2001-02 election cycle, with roughly $8 of every $10 going to Republicans.
Snow's first task would be to help build support for a major economic package Bush plans to introduce later this month or in early January.
The White House has been at work for months on a new economic package centered on additional tax cuts for lower- and middle-income individuals, playing down the administration's earlier focus on business-side tax proposals to stimulate investment.
Other ideas on the table are designed to encourage individual investors in the volatile stock market.
After November's midterm elections, Snow told The Wall Street Journal, "I do feel more confident that the economy will come up quicker, as opposed to having Democrats take control."
Democrats on Sunday seized on the shake-up as evidence that Bush's economic agenda is in distress.
"It isn't the names, but the plan that is of concern to us," said Senate Democratic leader Tom Daschle. "It wasn't necessarily the people that he had in place in the last two years, it's the plan. Trickle-down economics doesn't work."
Vice President Al Gore, who may seek the 2004 Democratic presidential nomination and a rematch against Bush, said on ABC's This Week that O'Neill and Lindsey are "fall guys for failed policies."
Sen. Joseph Lieberman, D-Conn., Gore's running mate in 2000, said the shake-up would mean little without changes in economic policy.
"The economy needs something different from what President Bush has given it," he told Fox News Sunday.
The Associated Press contributed to this report.