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If President George W. Bush expected Paul O’Neill to spend his time as Secretary of the Treasury polishing his resume and promoting big tax cuts, he was in for a surprise.
To be sure, after a stellar business career at International Paper and, later, as CEO of the aluminum giant Alcoa, O’Neill could have done that. But O’Neill, who passed away on April 18, was no country club business executive. And he certainly had little interest in resume-polishing. What Bush got was a candid, data-driven, outspoken believer in fiscal rectitude, and an even louder critic of government waste—including inefficient tax subsidies.
O’Neill was Treasury Secretary when Bush convinced Congress to enact a massive tax cut in 2001. But he was no fan of tax reductions that ate up hard-earned budget surpluses —and O’Neill said so, privately, and, sometimes, publicly.
His business career, as well as his work as a budget staffer and eventually deputy director of the Office of Management and Budget during the Ford Administration, made him hyper-aware of wasting limited resources.
One day, while O’Neill was testifying before the Senate Finance Committee, a senator asked what he thought about Bush proposals to expand the research and experimentation tax credit. I suspect the senator thought this was an opportunity for O’Neill to enthusiastically promote the credit.
But O’Neill didn’t do that. Instead, he called the credit a waste of money. He said that Alcoa, like many firms, found ways to maximize its credit. But, he added, it never increased actual R&D spending by a dime. Bush fired him shortly after that.
O’Neill had remarkably eclectic interests. Although much of his business career was spent at Alcoa, a leader in one of the world’s most energy-intensive industries, he became an early advocate for efforts to slow climate change. Later, he endowed the Paul H. O’Neill School of Public and Environmental Affairs at the University of Indiana.
He also was fascinated by the relationship between worker safety and quality. Indeed, he seemed prouder of the safety improvements he drove at Alcoa than its increased profitability over his tenure—though he was convinced the two were closely related. Later, he worked to convince the health care industry to embrace the twin goals of quality and safety.
While at Treasury, O’Neill concluded that a primary way to reduce poverty in Africa was by increasing access to clean water—something he believed could be done easily and relatively cheaply. In this effort, the buttoned-down Treasury Secretary joined pop star Bono on a trip to Africa. When their partnership began, O’Neill didn’t seem too sure exactly who Bono was. But they became fast friends. And I rarely found O’Neill more enthusiastic about a subject than he was about that clean water initiative—an effort he continued long after leaving government.
O’Neill’s tenure in the Bush Administration often was rocky. His frequent bouts with micromanagement and his early effort to move Treasury workers from offices into cubicles soured his relationships with the department’s career staff. He never seemed to understand exactly how Congress worked. And his candor appeared to cut him out of many key Administration decisions.
Mostly, though, he never seemed to understand that policy often was driven by politics, not dispassionate analysis of data. After leaving the Bush Administration, he told journalist Ron Suskind, “I didn’t know there were other people who thought that wasn’t necessary or even desirable” to make data-driven decisions. In that concern, he might have been prescient.
For all his flaws, Paul O’Neill was a refreshing beacon of intellectual honesty and candor in Washington, where successful spinning often is more prized than good ideas. Government could use more people willing to push their bosses to rely on data. And more bosses who will listen.
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Sayyid Azim/AP Photo