O'Neill's Allegations Raise the Threat Level

0 Comments | Insight on the News, Feb 16, 2004

Byline: Jamie Dettmer, INSIGHT

Who's afraid of the big brown wolf? Apparently the White House, judging by the speed with which presidential aides and Bush loyalists on Capitol Hill and in the media went after former Treasury Secretary Paul O'Neill.

Although they claimed nonchalance in the wake of the publication of O'Neill's coauthored memoir, The Price of Loyalty, their spin was predictable: The allegations leveled in the book against President George W. Bush and his White House are the rantings of an arrogant man determined to seek revenge for his dismissal. Or as one aide puts it, "Hell hath no fury like a dumped Cabinet secretary especially one who just wasn't up to his job."

The tone of the book makes such a response more than credible. O'Neill indeed comes across as vain and too self-regarding he always knows best and has no hesitation in saying so at official levels, according to him, whether his audience is his Treasury staff or the president in their regular Oval Office meetings.

There also is more than a hint of naivete in the mocking of O'Neill from the White House. The specific target of these jibes has been the O'Neill allegation that 9/11 was used as an excuse for the invasion of Iraq. The former Treasury secretary says neoconservatives encircling Bush intended from the moment they entered office to dispatch Saddam Hussein. He cites as evidence the first National Security Council meeting of the new administration at which George W. announced to the surprise of Secretary of State Colin Powell that he would disengage from the Middle East peace process in favor of concentrating on ridding the region of the Iraqi dictator.

"There was never any rigorous talk about this sweeping idea," O'Neill complains. "From the start, we were building the case against Hussein and looking at how we could take him out.... It was all about finding a way to do it. That was the tone of it. The president saying, 'Fine. Go find me a way to do this.'"

But as the White House critics stress, ousting Saddam also had been official U.S. government policy in the previous administration. On Iraq, the critics probably are right to feel on safe ground: The O'Neill claim is unlikely to damage Bush at the ballot boxes as those who oppose the invasion merely will see it as confirmation of their view that one way or another this administration was going to take out Saddam. Those who support the war are likely to see 9/11 and the threat of more terrorism to come as evidence of forward thinking by an alert Bush White House.

In short, by concentrating fire on O'Neill's Iraq allegations, the White House focused on the weakest or the least threatening of the charges made.

So why the alacrity to attack O'Neill? For the White House the book does represent a political threat. As one presidential aide conceded to political notebook, the far more dangerous allegations contained in The Price of Loyalty are what the former Treasury secretary has to say about the administration's economic philosophy or from his point of view, lack of a coherent philosophy and the way in which O'Neill's warnings about tax cuts and ballooning budget deficits, added to those of Federal Reserve Chairman Alan Greenspan, were dismissed by a "praetorian guard" of movers and shakers in the White House led by a sinister Vice President Dick Cheney.

One of the most damaging passages in the book on that front comes when O'Neill describes a meeting in the vice president's office of the economic team. O'Neill says he warned that the government "is moving toward a fiscal crisis" and outlined "what rising deficits will mean to our economic and fiscal soundness." Cheney would have none of it. "[Ronald] Reagan proved deficits don't matter. ... We won the midterms. This is our due."

If this is true it would be wise for the White House to consider that such triumphalism sits uneasily with what is going on outside the Beltway. The Iowa caucuses and several nationwide opinion polls suggest that the economy continues to be of the highest concern to voters, and the O'Neill charge that the administration has been reckless stings. It also provides ammunition for the Democrats.

The rise of the economy and the decline of Iraq as campaign issues were key factors in former Vermont Gov. Howard Dean's poor third-place showing in Iowa and does much to explain the impressive second-place finish there of Sen. John Edwards of North Carolina. Edwards has been concentrating on economic issues; Dean by contrast didn't even offer a detailed budget and economic plan ahead of the New Hampshire primary. Nor did Sen. John Kerry of Massachusetts, the winner of the Iowa caucuses, neglect the economy. He increasingly focused stump speeches on the issue of economic insecurity. While saying he will raise taxes Kerry is making it clear that any tax hikes will be felt by those earning more than $200,000 a year, and in the final debate in New Hampshire he attacked the president for "running the nation into deep deficits."