JOHN CRUDELE
WHAT THE PRESIDENT DIDN'T WANT TO HEAR FROM PAUL O'NEILL
Tue Jan 20 15:46:35 2004
64.140.158.139


WHAT THE PRESIDENT DIDN'T WANT TO HEAR FROM PAUL O'NEILL
http://www.nypost.com/business/16159.htm

By JOHN CRUDELE January 20, 2004 -- SO, President Bush didn't listen when Paul O'Neill was Treasury Secretary and wanted to talk about the horrible things a tax cut would do to the federal budget.

The president was inattentive - like "a blind man in a roomful of deaf people," O'Neill says in a new book called "The Price of Loyalty," but which I call "I Want To Make Some Money Off My Lousy Washington Experience" (Payback Press).

But what was it that O'Neill was trying to tell the president? Was it anything that, if you'll excuse the Yogi-ism, a blind man would want to hear?

Everyone knows that O'Neill had a big mouth during the short time he was in the Bush administration. And those of us who understand Wall Street knew that O'Neill's appointment was a disaster in the making.

A Treasury secretary has to be from Wall Street. He has to know, as Robert Rubin did before him, how to suck up to the financial markets. How to keep them in line. How to - wink, wink - fix them if something broke.

O'Neill was the head of, what, Alcoa? What good was he? (Unless of course, the administration needed someone who was a quick study in the best way to crush beer cans?)

What right did a corporate titan have preaching to either Wall Street or the president?

Ah, now I remember!

O'Neill was probably telling the White House that the country shouldn't keep two sets of books. Imagine that: An expense is an expense, whether it is incurred in the name of big government or in the name of making tin cans.

Back on May 14, 2002, I wrote a column about a shockingly frank letter that O'Neill had placed on the Treasury Department's official Web site. Nobody noticed back then - or even now - but I now know just how important it was.

Wrote O'Neill, "accrual-based financial reporting is critical to gaining a comprehensive understanding of the U.S. government's operations. For fiscal 2001, our results were an accrual-based deficit of $515 billion in contrast to the $127 billion budget surplus reported last fall."

The actual deficit from the government's cooked books turned out to be just $121 billion that year - or less than one-quarter of what a public company like Alcoa would have had to declare.

No wonder the blind man didn't want to hear.

At a time when the budget was actually thought to be in good shape, O'Neill was preaching that Washington should keep its books like companies do - Enron excepted, of course - and own up to its massive $515 billion deficit.

Just this past week, the White House projected that the budget deficit in 2004 could be $500 billion, thanks to the war in Iraq and tax cuts. And that's the number produced by the government's cooked-book accounting.

What would the real number for this year be under the "accrual" accounting used by corporations? I'm guessing that current Treasury Secretary John Snow, who was also plucked from corporate America, isn't going to tell us. But do the math yourself and $1 trillion wouldn't seem too far off.

+++

The new board of directors of the New York Stock Exchange, along with the committee made up of securities industry executives, will meet with interim chairman John Reed for the first time on Feb. 5.

I don't know whether it's just a get-to-know-you meeting or whether something substantive will be discussed. But there is plenty to talk about. I hear that subpoenas are starting to go out from the Securities and Exchange Commission on the matter of the exchange's compensation of former head Dick Grasso.

* Please send e-mail to:

jcrudele@nypost.com


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Phones At Homeland Security Busy
Tue Jan 20 2004 10:45:15 ET

ROLL CALL's Ed Henry reports:

"Homeland Security officials appear to be asleep at the switch -- as well as the switchboard -- these days. The House Homeland Security Committee recently uncovered the fact that U.S. Park Police officers failed miserably when inspectors placed a suspicious black plastic bag near the Washington Monument to test response time to an incident.

"One officer was caught napping. But then [I] called the Homeland Security Department and twice found this recording:

"'Due to the high level of interest in the new department, all of our lines are busy. However, your call is important to us and we encourage you to call back soon.' What if someone was calling in to report an emergency? Tom Ridge, call your office -- if you can get through."

END
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"Today Americans would be outraged if U.N. troops entered Los Angeles to
restore order. Tomorrow they will be grateful! This is especially true if they
were told there was an outside threat from beyond, whether real or promulgated,
that threatened our very existence. It is then that all the peoples of the world will
plead with world leaders to deliver them from this evil. The one thing that every man
fears is the unknown. When presented with this scenario, individual rights will be
willingly relinquished for the guarantee of their well being granted to them by their
world government." - Henry Kissinger, in an address to the Bilderbergers group,
May 21, 1992 Evian, France.

MOLON LABE!

• Confessions of a political junkie — Nancy Anne Dawe, Tue Jan 20 16:20