United States Treasury Secretary
Born August 2, 1939, in Toledo, OH; married Carolyn; children: three. Education: University of Toledo, B.A., 1962; University of Virginia, Ph.D. (economics), 1965; George Washington University, L.L.B., 1967.
Addresses: Office —1500 Pennsylvania Ave., NW, Washington, DC, 20220.
Several jobs at the U.S. Department of Transportation, including assistant secretary, deputy undersecretary, and deputy assistant secretary, 1972-76; administrator of the National Highway Traffic Safety Administration, 1976-77; visiting fellow, American Enterprise Institute, 1977; vice-president of government affairs, Chessie System Inc., 1977-80; distinguished fellow, Yale School of Management, 1978-1980; named a senior vice-president of CSX Corp., 1980; named president and CEO of CSX Transportation Inc., 1987; named president of CSX Corp., 1988; named CEO, CSX Corp., 1989; named chairman, CSX Corp., 1991; chairman, Business Roundtable, 1994-1996; U.S. Treasury secretary, 2003—.
John W. Snow came to the cabinet of U.S. President George W. Bush after more than a decade as the leader of railroad giant CSX, years spent effectively lobbying in Washington, and experience working in the federal government in the 1970s.
Snow was born in Toledo, Ohio, in 1939, graduated from the University of Toledo and earned a doctorate in economics from the University of Virginia and a law degree from George Washington University. From 1967 to 1977, he held several top jobs in the U.S. Department of Transportation, including administrator of the National Highway Traffic Safety Administration and deputy undersecretary, assistant secretary and deputy assistant secretary jobs. He left government in 1977 to work for Chessie System Inc., the railroad company that became CSX Corp. after a 1980 merger.
Snow worked his way up through several jobs in the corporation. In the 1980s, he lobbied Congress to reject the proposed merger of CSX competitor Norfolk Southern with Conrail. (It was rejected.) In 1987, he was named president and chief executive officer (CEO) of CSX's largest business group, CSX Transportation Inc. The next year, he was promoted to president of CSX itself, a sign that he would take over the company when its CEO at the time left. Sure enough, Snow was named CEO of CSX in 1989 and chairman in 1991.
As CEO of CSX, Snow earned mixed reviews. He made headlines—and stunned observers who thought he was too academic in demeanor—when he tried to take over Conrail in 1996. But despite Snow's skills at Washington lobbying, CSX ran up against the fears that the merger might reduce competition. In the end, CSX had to split up Conrail with its rival, Norfolk Southern. The deal left CSX with a large debt, and CSX had trouble integrating its share of Conrail into the company, leaving it inefficient and its stock price low.
During Snow's tenure, safety experts questioned whether CSX had done enough to improve the safety of its rail lines. But Snow moved to correct problems after they were cited, and accidents on CSX lines decreased as his tenure as CEO went on. Meanwhile, investors supported Snow's plan to narrow CSX's focus on the railroad business and gradually get rid of other investments, such as oil and real estate, that the company had acquired before he took over.
Meanwhile, Snow remained active in Republican politics and served as chairman of the Business Roundtable, a lobby of powerful corporate executives, in the mid-1990s. In late 2002, those political connections paid off when U.S. President George W. Bush nominated Snow to be treasury secretary. He replaced Paul O'Neill, who had a difficult relationship with the president and was prone to making unscripted statements about economic policy that upset stock markets. Snow was confirmed by the Senate in January of 2003 and took office in February of that year.
Snow's job as treasury secretary was difficult. He had to defend the government's monetary policy amid strong criticism from foreign governments and domestic investors. Most importantly, Snow was in charge of proclaiming the administration's support of a "strong dollar." But despite that assertion, the Bush administration declined to intervene in the international currency market (which sets exchange rates), even when the dollar was losing a lot of value. When Snow declared at an economic meeting in May of 2003 that the "strong dollar" position did not include a position on exchange rates, the dollar's value plummeted further.
Another difficult job Snow had was stating the government's economic policy toward China. In late 2003, Snow began pressuring China to let the value of its currency, the yuan, be set by international currency markets, not a rate fixed to the U.S. dollar. Such a move, the administration hoped, would cause the yuan's value to increase, also increasing the cost of Chinese products that are imported into the U.S. and compete with American goods. However, China ignored the advice, and critics explained that such a move could hurt the Chinese banking system, U.S. companies doing business in China, and U.S. consumers.
Snow also had to campaign for Bush's re-election. While doing so, he made at least one costly error. In March of 2004, he told a newspaper in the key state of Ohio that outsourcing, the practice of American companies moving jobs overseas, is part of free trade, and that free trade is good for the American economy overall. Bush's opponent, Sen. John Kerry, took that comment to mean that outsourcing is good for the U.S. economy, and used that accusation against Bush in the presidential campaign.
So after Bush was reelected, speculation ran high that Bush would replace Snow. The value of the dollar continued to fall to new lows against the euro. Critics scoffed at Snow's insistence that the U.S. was still following a strong dollar policy. Anonymous administration officials even leaked hints that Snow would be gone soon, while Republicans and investors complained that he had not figured out how to make policy pronouncements in a way that reassured the markets. But in December of 2004, Bush asked Snow to stay on into his second term. (Some reports suggested he did this only after being unable to find a replacement with whom he was comfortable.)
In 2005, Snow's job got no easier. Commentators noted that he was presiding over a decline in the importance of the treasury department. Snow went on the road in the winter to help promote the president's proposal to partially privatize Social Security by letting younger workers put some of their social security tax payments into personal investment accounts. "Why are personal accounts so important? By giving younger workers the opportunity to receive higher benefits than the current system can afford to pay, they enhance young workers' retirement security," Snow wrote in the Wall Street Journal. But the idea faced strong opposition and seemed stalled by the end of the year.
In April of 2005, he again told China to stop pegging the value of the yuan to the dollar, and he proposed cutting the budget deficit. "The problem is that nobody believes & Snow's rhetoric," responded the Washington Post in an editorial, arguing that Snow's budget numbers were not credible because they did not include the cost of the war in Iraq or the war on terrorism. In August, Snow said the U.S. economy was improving faster than some people believed—but he felt compelled to acknowledge that the improvements were not benefiting everyone equally, and he said the administration was considering measures to better spread the economic benefits around, such as increased funding for education.
In November of 2005, on the eve of the president's trip to China, Snow also signaled a change in the diplomatic approach toward China, arguing that the U.S. needed to back off of its pressure to let currency markets set the value of the yuan. But it appeared to be a tactical diplomatic move, not a reversal in policy; observers believed the Chinese, concerned about their image, might actually let the yuan rise once they were under less public pressure to do so.
As 2005 ended, speculation continued to suggest that Snow would be asked to leave the treasury department. One prominently reported rumor, which had not been proven true as the year neared its end, had Snow being replaced as secretary by Bush chief of staff Andrew Card. BusinessWeek writers Richard S. Dunham and Rich Miller called Snow a "genial traveling salesman" for the Bush Administration, but said he was too pragmatic and concerned with deficits to be a perfect team player for an administration that valued tax cuts over cutting the deficit. It seemed clear that Snow would eventually leave the administration. He had reportedly told associates that he did not want to serve for Bush's entire second term, but did want to stay long enough to help the president with the debates on Social Security and tax reform.
BusinessWeek, October 17, 2005, p. 51.
New York Times, October 17, 1996, p. D4; December 9, 2002, p. A1; December 10, 2002, p. A30; December 25, 2002, p. C1; February 14, 2003, p. A24; May 19, 2003, p. A8; June 12, 2003, p. C13; March 31, 2004, p. C7; December 9, 2004, p. A1.
Wall Street Journal, April 8, 1987, p. 1; April 21, 1988, p. 1; December 9, 2002, p. A12; January 20, 2005, p. A15.
Washington Post, December 10, 2004, p. A1; December 12, 2002, p. A3; September 7, 2003, p. B6; January 15, 2005, p. E1; March 14, 2005, p. A17; April 19, 2005, p. A18; August 9, 2005, p. A3; September 9, 2005, p. A23; November 18, 2005, p. D6.
"Being John Snow," Slate.com, http:// www.slate.com/id/2110076 (November 20, 2005).
"Profile: Secretary of the Treasury John Snow," ABCNews.com, http://abcnews.go.com/Politics/print?id=404456 (November 20, 2005).
"Secretary of the Treasury John W. Snow," The White House, http://www.whitehouse.gov/government/snow-bio.html (November 20, 2005).
— Erick Trickey