I.O.U.S.A - Addison Wiggin [110]
And similarly, you know, we have tax deductions for mortgage credit because we believe (and I think this is a correct belief) that it ’ s a valuable thing for people in the United States to own their own home. But I wouldn ’ t do it with a tax credit or with mortgage deductions. I would do it by deciding how much do we want to encourage people, and then I would write them a check. I would write them a check so that we do all of our fi nancial business on top of the table instead of by stealth, instead of by discriminating among people based on their income level. I ’ d much rather help people in a straightforward fashion that has no obfuscation, no mystery, and no inequity because people with lower levels of income can ’ t use credits and deductions.
Q: You and former Federal Reserve Chairman Alan Greenspan have been friends for quite some time. How did that come to be?
Paul O ’ Neill: I got to know Alan Greenspan in 1969 because he was the chairman of the Transition Group for Economic Affairs for the Nixon administration and I was in the Offi ce of Management and Budget. I got to know him then, and over the years, even after I left the government and he came back to be head of the CEA in the Ford administration, we worked really hand - in - glove during that time. After we both left the government, before he became the Fed chairman, I saw him in other settings. He was the president of a fi rm called Townsend Greenspan, I was in International Paper, we were both still interested in public policy. Then he was on the board of International Paper and I became president during that time. Also, I got recruited to be on the board of ALCOA and Alan c16.indd 222
8/26/08 7:03:14 PM
Paul
O
’
Neill 223
Greenspan was on the board of ALCOA, and had been of counsel and a board member at ALCOA for a long time. So our friendship was long - standing and around lots of issues, both public and private.
Q: Correct me if I ’ m wrong — he ’ s the person who might have made the deciding phone call when you were weighing whether or not you wanted to come to Treasury?
Paul O ’ Neill: Yeah, that ’ s true. When I was thinking about whether I should come to the Treasury, I had met with the president and the vice president in Washington at the Madison Hotel. I told them I would call them the next day and let them know whether I was going to accept or not, but I needed to talk to my wife fi rst. So I went to New York for a board meeting, and I was at the hotel that evening after the meeting with the president -
elect and vice president - elect, and Alan Greenspan called me there. They had called him, I guess, and asked him to call me and tell me how important it was that I come to the government and how much he would enjoy working with me again in a direct way.
And I appreciated this, but I thought it wasn ’ t going to make any difference because my wife ’ s opinion was a lot more important.
And she didn ’ t think I should do it, but was okay with me doing it if I thought it was the right thing to do. She was pretty sure it wasn ’ t the right choice, and as this has often turned out in life, she was right and I was wrong.
But in any event, early in the administration, we started working on a policy formulation, including the shape and dimension of a tax cut. Alan was deeply involved in those conversations and, of course, had a lot of standing with people in the Congress and in the nation, because he was looked at as an honest broker who would have a clean opinion about what ought to be done, what ought not to be done. During this conversation, I said to Alan that I thought this tax cut was okay, but that one of the diffi cult things to cope with was the reality that economic conditions might change, and if they change we might wish we had some of that revenue back that we were now talking about giving up on the c16.indd 223
8/26/08 7:03:15 PM
224 The
Interviews
basis of tax cuts. I told him I thought it would really be great if he would say to Congress when he appeared