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News > Economy
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O'Neill's days numbered?
graphic December 5, 2001: 11:09 a.m. ET

Washington analyst says the Treasury chief can't get along with the GOP.
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  • Deficits seen through 2005 - Nov. 29, 2001
  • U.S. government kills 30-year bond - Oct. 31, 2001
  • O'Neill says economy has rebounded - Oct. 26, 2001
  • Greenspan, Rubin discuss economy - Sep. 25, 2001
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  • Treasury Department
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    NEW YORK (CNN/Money) - U.S. Treasury Secretary Paul O'Neill is on his way out, a Washington analyst said Wednesday, in large part because he doesn't get along with Republicans in Congress.

    O'Neill's future has been the subject of speculation for many months, and the topic heated up after a report in Tuesday's New York Post said O'Neill's days were numbered. Later that day, O'Neill appeared in the Rose Garden with President Bush and Attorney General John Ashcroft, an appearance some saw as a pointed response to the Post report.

    "They protesteth a little too loud, I suspect, on all this," Charles Valliere, political economist and chief strategist at Charles Schwab Washington Research Group, told CNNmoney Morning.

    O'Neill, who came to Treasury after a 12-year stint as CEO of Alcoa Inc. (AA: up $1.22 to $39.32, Research, Estimates), has two fatal flaws, Valliere said, one of which is that he has a "tin ear" to the financial markets since he has no Wall Street experience.

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    Treasury Secretary Paul O'Neill
    "If you talk to people at the White House privately over a drink, off the record, they will tell you they made a mistake [by not going] to Wall Street," Valliere said.

    But a worse flaw, Valliere said, is O'Neill's inability to get along with Republicans in Congress.

    "The majority of Republicans on [Capitol] Hill want him out," Valliere said. "They feel he's undercut them [and] made comments that have been very undiplomatic."

    O'Neill's unhappy relationship with Congress was highlighted in the aftermath of the Sept. 11 terror attacks, when Congress invited Alan Greenspan to talk to it about the impact of the attacks on the economy. Accompanying Greenspan was President Clinton's Treasury chief, Robert Rubin. O'Neill was not invited.

    "It's amazing to say, and this is not an exaggeration, that Bob Rubin has more influence today on Capitol Hill than the current Treasury Secretary," Valliere said.

    The Bush administration's lack of a strong voice in Congress is one reason it hasn't been able to push an economic stimulus package into law, Valliere said.

    "[Bush] has got strong players on international issues and on terrorism. He doesn't have strong players on the economy," Valliere said. "You could say there's a congenital Bush family problem in this area."

    Valliere was referring to the senior President Bush's failed 1992 bid for reelection, a loss most analysts attributed to a recession in 1990 and 1991 that erased voters' memory of a swift and dramatic victory in the Gulf War.

    "Won the war, lost the economy, lost the election. That's the mantra that haunts these people," Valliere said. graphic

      RELATED STORIES

    Deficits seen through 2005 - Nov. 29, 2001

    U.S. government kills 30-year bond - Oct. 31, 2001

    O'Neill says economy has rebounded - Oct. 26, 2001

    Greenspan, Rubin discuss economy - Sep. 25, 2001

      RELATED LINKS

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