The Last Word: Henry Paulson; 'He Wanted Bold Ideas'
Paulson, Henry, Newsweek International
Byline: Henry Paulson
He's been called the first treasury secretary with real clout since Bob Rubin, and arrived in office with the gilded pedigree that adorns former Goldman Sachs CEOs. So it's not surprising that Henry Paulson has since been fingered by pundits as the man behind George W. Bush's latest moves on issues ranging from China to, most recently, his call for a campaign to cut U.S. dependence on foreign oil. He spoke to NEWSWEEK's Richard Wolffe on his latest role last week. Excerpts:
NEWSWEEK: On Bush's energy policy:
PAULSON: The president wanted me to be involved in all major economic issues, domestic or international. It's very much of a team approach. There was a big emphasis on intellectual rigor and having different people involved. So when I thought about the economic issues, I thought about three things. First, as strong as this economy is--and I'm not expecting any shocks anytime soon--it's been a long time without one. [The next would] be the first with the economy as globally integrated as it is. Another thing was entitlements: the longer it took to do something, the more costly the solutions would be. Third, energy security.
On energy "independence":
We're all focused on what's happening with oil at $75 a barrel, but to me the real risk would not be just the price of oil going up but the price of oil going way up. The president [emphasized] energy security, because I think he knows we won't use the word "independence" anytime soon. But we were too dependent on imported oil from troubled parts of the world, so the question was, how would we craft something that would give us energy security as soon as possible? He wanted bold ideas. In the first several months we had presentations from terrific scientists on progress that's been made in technology and a number of alternative sources of energy--everything from solar to wind to energy to batteries and clean coal.
When people looked at this policy, some thought it was too bold, some people thought it was not bold enough, some people's expectations had gotten so high that they thought it was going to solve all environmental problems, [that] it was going to accomplish everything, so they were disappointed. This policy has got some important positives for the environment, but they're collateral. That wasn't the driver. The driver was energy security. It deals with the supply side, which is to replace 35 billion gallons of oil in 10 years, and that in and of itself will encourage investment, because the demand is out there. …