John Snow, the railroad executive tapped by President Bush to succeed another industrialist as U.S. treasury secretary, says the economy can sustain large budget deficits in the short term.
Mr. Snow appears on his way to easy confirmation in the Senate. In his first appearance before the Senate Finance Committee Tuesday, Mr. Snow said President Bush's proposed $674 billion tax cut over 10 years will boost economic growth. He said he is not particularly worried about the impact on the budget, which is expected to register a record $300 billion deficit next year.
Mr. Snow says a recovery from recession is under way but that tax cuts are needed to stimulate growth.
"But despite these significant events [9-11, corporate scandals and the stock market melt down] the economy is recovering," he said. "It is a testimony to the inherent resiliency of the American economy that it could take so many shocks, so many body blows and still do as well as it is doing."
Mr. Snow defended his pay at the CSX railroad, which totaled $18 million in 2001. His net worth is said to exceed $100 million.
The previous treasury secretary, Paul O'Neill, was dismissed by President Bush in December. He reportedly got into trouble because the economy had failed to recover quickly and he was thought to be concerned about the budgetary impact of another round of large tax reductions.