Treasury Secretary, Appropriations Chair Exchange Sharp Words

WASHINGTON – A livid treasury secretary confronted a proud senator at a hearing that became a bitter verbal duel over each man's hand-to-mouth beginnings and Congress' power to dictate policy to federal agencies.

Thursday's extraordinary exchange, which lasted nearly 15 minutes, featured Democratic Sen. Robert Byrd of West Virginia angrily waving President Bush's budget in the air and Treasury Secretary Paul O'Neill responding with indignation, eyes glistening. O'Neill later said those weren't tears in his eyes, but "fire."

Their differences were rooted in Congress' ability to restrain certain actions of federal agencies. It's a power that Byrd, 84, who entered Congress in 1953, stoutly defends and O'Neill, 66, steeped in the private sector, finds hard to take.

"We're senators, and you've been in this town one year," Byrd told O'Neill as the two men exchanged undisguised glares from their seats at a Senate Budget Committee hearing. "I've been in this town 50 years. I've seen many secretaries of the treasury."

At another point, Byrd said, "With all due respect to you, you're not Alexander Hamilton," the nation's first treasury secretary and a founding father.

But in a voice quivering with emotion, O'Neill did not back down.

"I've dedicated my life to doing what I can to get rid of rules that limit human potential," he said. "And I'm not going to stop."

Byrd repeatedly said that he, and not O'Neill, a former chairman of Alcoa, had been elected by voters.

"They're not CEOs of multibillion-dollar corporations," Byrd said of the voters. "They can't just pick up the phone and call a Cabinet secretary. In time of need, they come to us, the people come to us."

O'Neill, who grew up poor in St. Louis, Mo., snapped:

"I started my life in a house without water or electricity. So I don't cede to you the high moral ground of not knowing what life is like in a ditch."

"Well, Mr. Secretary," Byrd responded, "I lived in a house without electricity, too, no running water, no telephone, a little wooden outhouse." He was raised by his aunt and uncle in West Virginia's coal country.

On the subject of regulations tying down government, O'Neill pointedly cited the unjustness of "rules that said, 'Coloreds cannot enter here."'

Although O'Neill did not mention it, a younger Byrd once belonged to the Ku Klux Klan, which he later renounced.

The blunt and sometimes impolitic Treasury secretary has had other confrontations with members of Congress, although none as passionate as Thursday's.

He once characterized a Republican economic stimulus package as "show business," prompting one GOP congressman to call for his resignation. President Bush stood by him.

Byrd took umbrage at O'Neill's earlier complaints to a business group, when he said some rules were "like the Lilliputians tying us to the ground."

Byrd said he believed those remarks were aimed at a Senate rule that bears his name. The Byrd rule limits items that can be put on a tax bill.

O'Neill stood by his comments but said he was complaining more broadly about rules that inhibit progress.