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Snow’s Job: September Push

Congressional Republicans knew the Treasury Department had turned over a new leaf when its new chief, John Snow, simply picked up the phone.

No gesture is too small in the pursuit of good will on Capitol Hill. Yet for two years it had seemed there was no gesture small enough for Snow’s taciturn predecessor, Paul O’Neill, who showed a palpable discomfort in dealing with lawmakers and their concerns.

Not so for Snow, who has been walking the halls of Congress nearly his entire professional life — as a lobbyist, as a CEO, and as the Capitol Hill emissary for one of Washington’s most influential business groups.

With Snow at Treasury’s helm, President Bush won approval of more tax cuts, while the battered department has made strides toward repairing its relationship with the Hill.

“In terms of what I look for — accessibility, expertise and the like — he’s been great,” said Ways and Means Chairman Bill Thomas (R-Calif.). “He understands the need to keep everyone in the loop, keep everyone informed, which I can tell you helps a great deal in the legislative process.”

“Snow gets the game,” said one former Bush administration official who moved to K Street. “Snow knows Washington, and he’s not afraid of the press.”

But the real test starts this week. How Snow will be appraised not only on Capitol Hill, but in the capital markets as well, will depend in large measure on his ability to navigate a series of key policy tests in Congress in the month that remains before the targeted adjournment.

The secretary maintains confident that he can successfully clear the legislative minefield by the that time.

“I’m a perpetual optimist,” Snow said in an interview. But he added, “I know it’s not going to be easy.”

A Date With the Hill

Much of the September agenda belongs to the Treasury chief. Among other things, the month will feature the secretary’s unofficial “coming out” event: A Sept. 10 date with the House Financial Services Committee, where Snow will for the first time lay out the Bush administration’s “principles” for regulating so-called government-sponsored enterprises.

The stakes have ratcheted up commensurately as a management crisis continues to unfold at Freddie Mac, the GSE that towers over the secondary mortgage market alongside its twin monolith, Fannie Mae.

With about half the country’s mortgages on their books, questions about the direction and solvency of these GSEs have sent shivers across Wall Street and led to calls for greater transparency and perhaps an entirely new regulatory system — maybe at Treasury itself. (Fannie and Freddie are currently overseen primarily by the Department of Housing and Urban Development.)

Snow’s testimony will essentially lay down the administration’s marker in the debate, which has produced multiple proposals in both chambers. “It will be newsworthy, that’s for sure,” one senior administration official said, while offering no hint of which direction the administration will go.

Snow’s actions on other fronts will also be critical, starting with his approach to Congress’ reauthorization of the Fair Credit Reporting Act.

Unless Congress continues a provision in the law that enables the federal government to “pre-empt” state rules for credit reporting — it sunsets this year — the standards will be thrown open to the whimsy of 50 different legislatures. With the stability of the credit markets in the balance, the bill is considered a must-do; yet insofar as the measure has also become a crucible for concerns about financial privacy and identity theft, the final outcome remains unclear.

The House has already acted. But the business community remains wary of developments on the Senate Banking, Housing and Urban Affairs Committee, where Chairman Richard Shelby (R-Ala.) has yet to reveal his plans, and has been calling for the Treasury secretary to take a firm hand in guiding the measure along.

Shelby spokesman Andrew Gray said the chairman “recognizes the importance of the credit markets to the functioning of our economy,” while adding that the Senator also considers it critical to “balance” the interests of consumer protection.

A bill should be ready at the committee by late September, Gray said.

Perhaps an even more difficult minefield awaits Snow at Ways and Means, where Members are being forced to alter the law on so-called foreign sales corporations or face as much as $4 billion in penalties on American business from the World Trade Organization.

The debate has invited high-stakes lobbying from corporate giants Caterpillar, Microsoft and Boeing, which all stand to lose favorable tax treatment if the measure sponsored by Thomas wins out.

And they are holding what could be a trump card: support from Speaker Dennis Hastert (R-Ill.), whose state is headquarters to both Caterpillar and Boeing. He is backing a competing measure authored by the committee’s second-ranking Republican, Rep. Phil Crane (Ill.).

“Threading the needle there is what we need to do,” Snow said of the Ways and Means battle, while characterizing his own role as trying to “facilitate convergence” between the warring participants.

Snow indicated that he is also determined to get pension reform through Congress before lawmakers adjourn for the year.

The issue puts Snow, a former chairman of the influential Business Roundtable, in the unaccustomed position of urging indulgence from many former lobbying partners. The hitch in the process has been opposition from segments of corporate America, where some worry the legislation would cause their pension obligations to skyrocket.

“When he meets with the business community, these are his former colleagues and associates,” one senior administration official said. “And not all of them are going to get what they want.”

‘Retail Politics’

In assessing the prospects for success, many in Washington have found it hard not to contrast Snow’s approach to that of his predecessor.

Like Snow, O’Neill came to the Treasury job with top-notch credentials as a corporate leader. But he never picked up the language and etiquette of Capitol Hill, where key committee chairmen must be carefully mollified and cultivated, and thus found it difficult to press the administration’s case.

Snow, who came to the administration from railroad giant CSX Corp., has learned the ways of Congress over the course of decades. And his approach is rich with emphasis on courtesy and patience.

It helps that he has developed personal relationships with many key lawmakers on the front lines of the legislative process — at one point as CSX’s chief Congressional lobbyist.

He golfs with House Financial Services Chairman Mike Oxley (R-Ohio) and has been negotiating deals with Sen. George Voinovich (R-Ohio) since the latter was mayor of Cleveland in the 1980s.

Administration insiders recall that when Bush officials were given daily call assignments during the tax debate earlier this year, Snow took most of them — because he already had ties to the key players in Congress.

“He knew he had to meet with Members one-on-one in order to make things happen,” said one senior administration official who worked on the economic package. “O’Neill didn’t do this kind of retail politics.”

Snow, for his part, remembers an era when the legislation was far less voluminous, the staffs were much smaller and “there seemed to be much more of a commitment to working through these issues.”

That also happened to be a period before polling really became a factor in the legislative process, he recalled, saying of the evolution to today, “I think it’s regrettable, but it’s also observable.”

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