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Former Treasury Secretary Questions Bush's Tax Plan

Ousted administration official Paul O'Neill says the proposal would do little to improve the nation's economy.

January 14, 2003|From Associated Press and Bloomberg News

Former Treasury Secretary Paul H. O'Neill, who lost his job for publicly disagreeing too often with President Bush, isn't taking a more subtle route now that he's back in the private sector.

O'Neill told reporters in Pittsburgh that the president's plan to eliminate taxes on corporate dividends would do little or nothing to improve the nation's economy.

"I would not have done it," he said.

Speaking out for the first time since being forced from his post, O'Neill said that some of the money from the president's 10-year, $674-billion tax-cut plan would be better spent to shore up Social Security.

Bush has defended the tax-cut plan against Democratic charges that it favors the rich.

Besides eliminating taxes on stock dividends, the plan would speed up tax rate reductions, increase the child tax credit and accelerate deductions planned for business equipment.

O'Neill made his remarks during and after Friday's taping of a public affairs program co-produced by the Pittsburgh Post-Gazette and KDKA-TV in Pittsburgh.

The paper published a report on O'Neill's remarks in Sunday's edition.

Asked about O'Neill's comments, Treasury Department spokesman Rob Nichols on Monday said: "We don't share that view, obviously."

O'Neill was ousted last month after angering Bush with public remarks that reflected his lukewarm views toward White House tax-cut policies.

Both he and White House economic advisor Lawrence B. Lindsey, who also was ousted, were accused by the president's political advisors of failing to communicate the administration's economic policies.

When asked about his departure Friday, O'Neill said, "I was never angry with the president. I was happy to leave."

O'Neill criticized the political and media environment in Washington, which he felt stifled honest discussions about the nation's problems.

"It's all about sound bites, deluding the people, pandering to the lowest common denominator," he said.

Since returning to Pittsburgh, the former chairman of aluminum giant Alcoa Inc. has been working with an alliance of insurers and hospitals trying to make the region's health-care system more efficient.

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