Magazine article American Banker

O'Neill, Martinez Breeze through Senate Hearings

Magazine article American Banker

O'Neill, Martinez Breeze through Senate Hearings

Article excerpt

In sharp contrast with protests at a Senate building next door against George W. Bush's choice for attorney general, the President-elect's top picks to oversee the financial services industry were quietly embraced in confirmation hearings Wednesday.

Treasury Secretary-designate Paul H. O'Neill and Housing and Urban Development Secretary-designate Mel Martinez won praise from politicians on both sides of the aisle and appear poised to win easy confirmation from the Senate as early as next week.

In Mr. O'Neill's case, the prospects of Democratic opposition began fading immediately with the opening remarks of Sen. Max Baucus, D-Mont., who is chairing the Senate Finance Committee until his party loses the majority on Saturday, when Republican Richard Cheney will be sworn in as Vice President.

After enumerating the challenges awaiting the next Treasury secretary, Sen. Baucus told Mr. O'Neill, "In you, the President-elect seems to have found the right person for the job."

But the wealth of good feeling did not prevent the committee from filling a three-and-a-half-hour hearing with questions for the secretary-designate. Mr. O'Neill, until recently the chairman of Aluminum Company of America in Pittsburgh, fielded inquiries on multiple topics, including tax cuts, international trade, and the relative effectiveness of monetary and fiscal policy as an economic stimulant.

In response to Sen. Baucus, Mr. O'Neill said that he believes the federal government could afford the President-elect's proposed $1.6 trillion tax cut, even if economic growth slows as projected.

One benefit of the tax cut would be a reduction of consumer debt, he said. "Over the last six months, consumers have been using credit at an unsustainable rate," and the cut would lead some to pay down that debt, he said.

When asked about it by Sen. …

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