January 13, 2004

Challenges to Paul O'Neill's Credibility

The first challenge to the accuracy of Paul O'Neill's recollections has come. O'Neill saw a major shift in U.S. policy toward Saddam Hussein from the moment of Bush's inauguration:

The Price of Loyalty p. 85ff: Powell began by discussing the new strategy for "targeted sanctions" [against Iraq]. But, after a moment, Rumsfeld interrupted. "Sanctions are fine," he said. "But what we really want to think about is going after Saddam." He then launched into an assessment of the broader U.S. goal of getting rid of Saddam and replacing the current regime with one more inclined toward cooperative relations with the United States and its Western allies. "Imagine what the region would look like without Saddam and with a regime that's aligned with U.S. interests," Rumsfeld said. "It would change everything in the region and beyond it. It would demonstrate what U.S. policy is all about." Rumsfeld began to talk in general terms about post-Saddam Iraq, dealing with the Kurds in the north, the oil fields, the reconstruction of the country's economy, and the "freeing of the Iraqi people."

The hanging question was how to arrive at this desired goal. Rice, Rumsfeld, and General Shelton talked generally about rebuilding the military coalition from the 1991 Gulf War.... Tenet talked about a coup and said the prspects for success were not particularly good. Powell said we "don't just want to replace one bad guy with another bad guy."... O'Neill thought about Rumsfeld's memo.... The sudden focus on Saddam Hussein made sense only if the broader ideology--of a need to "dissuade" others from creating asymmetric threats [to the United States]--were to be embraced. That was the why.

A weak but increasingly obstreperous Saddam mihg tbe useful as a demonstration model of America's new, unilateral resolve. If it could effectively be shown that he... was trying to build weapons of mass destruction--creating an "asymmetric threat"...--his overthorw would help "dissuade" other countries from doing the same. At least, that seemed to be the idea.

"There was never any rigorous talk about this sweeping idea that seemed to be driving all the specific actions," O'Neill said, echoing the comments of several other participants in NEC discussions. "From the start, we were builidng the case against Hussein and looking at how we could take him out.... And, if we did that, it would solve everything. It was all about finding a way to do it. That was the tone of it. The President saying, 'Fine. Go find me a way to do this.'"

Bush supporters challenged O'Neill, with Dan Froomkin reporting that a White House official told Richard W. Stevenson of the New York Times that "It's laughable to suggest that the administration was planning an invasion of Iraq that shortly after coming to office." But now another Bush cabinet-level security official or his (or her) deputy has asserted that there was a big difference from Day 1 in the Bush administration's willingness "to explore the military options, including use of ground forces" in sharp contrast to the "Clinton administration's halfhearted attempts to overthrow Hussein without force."

This line of criticism appears to have degenerated into a total free-for-all.

Now comes a second challenge. O'Neill gives his description of just how it was that the U.S. wound up with a useless, destructive, counterproductive steel tariff. And the answer is that it was driven by Dick Cheney with the assistance of Bob Zoellick and Condoleeza Rice:

Mitch Daniels, the budget director, then blurted out, "If you can't do the right thing when you're at 85% approval, then when can you do the right thing? I think it's time to say no [to steel tariffs]." Everyone looked with surprise at Mr. Daniels, who had a way of expressing what others are thinking but won't say. Often, he'd find himself doubling back when he got an arched brow from Cheney or Rove....

His comment seemed to tip the room. Is there any point, Mr. Daniels's outburst implied, when the political team says they have enough advantage that they are satisfied with their franchise and not constantly twisting the arm of policy? Mr. O'Neill wondered about this as he broke his silence, which was so out of character it was drawing notice. "Well," he said, "certainly, there should be a high hurdle before we take this step" of imposing tariffs.

Soon the meeting was a free-for-all. "I think we have a split here," Ms. Rice said. "Do we take this to the president?" This is what Mr. Cheney had been hoping to avoid -- a split. In fact, it was anything but a split. Nearly everyone seemed on one side; Mr. Cheney and Mr. Zoellick were on the other. A consensus on sound policy was colliding with a political favor. Secretary of State Colin Powell spoke. "Why are we thinking about doing this?" he asked in frustration. "I have heard good reasons today not to do it, but I haven't heard one good reason to move forward with tariffs. We can't even say this will improve our steel industry." Finally, it came back to Mr. Cheney. He mumbled that "imports are, in fact, way down from the surge. ... Our minimills are competitive," all arguments against tariffs. But then he added that whatever we do, the tariff-empowering statute says "we can review this in 18 months." In other words, if what we do now is go with tariffs, it will be political bait, and in 18 months -- after the 2002 midterm elections -- we can effect the switch. Meeting over....

Now Bruce Bartlett is claiming that Richard Cheney was not a supporter but an opponent of the steel tariffs: "Vice President Cheney... opposed [the tariff]. At the meeting O'Neill refers to, Cheney was simply acting as an honest broker, keeping his personal views private. Vice President Cheney generally made his views known to the president only in one-on-one meetings, so as to facilitate discussion in open meetings." It seems to me that Bruce is a little too eager to chase down some Dick Cheney points, for if Cheney made his views known to the president only in one-on-one meetings, how does Bartlett know what Cheney's views were? The most we can say is that the steel tariff today is like defeat: an orphan, with nobody attached to it except for those like Evans, Zoellick, and Rove who cannot plausibly deny their commitment to it.

Posted by DeLong at January 13, 2004 09:42 PM | TrackBack

Comments

Since Paul O'Neill is now challenging his own credibility, isn't this book about to be laughed out of town?:

O'NEILL: Yeah, and the other thing that's good, today the book is going to be available, and this red meat frenzy that's occurred when people didn't have anything except snippets -- as an example, you know, people are trying to make a case that I said the president was planning war in Iraq early in the administration. Actually, there was a continuation of work that had been going on in the Clinton administration with the notion that there needed to be regime change in Iraq.

COURIC: So you see nothing wrong with that being at the top of the president's agenda 10 days after the inauguration?

O'NEILL: Absolutely not. One of the candidates had said this confirms his worst suspicions. I'm amazed that anyone would think that our government, on a continuing basis across political administrations, doesn't do contingency planning and look at circumstances. Saddam Hussein has been this forever. And so, I was surprised, as I've said in the book, that Iraq was given such a high priority. But I was not surprised that we were doing a continuation of planning that had been going on and looking at contingency options during the Clinton administration.

COURIC: Because of the Iraq Liberation Act that was passed in 1998 almost unanimously by the Senate and near unanimously by the House.

O'NEILL: Absolutely.

Posted by: Patrick R. Sullivan on January 14, 2004 09:32 AM

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Well, those are the administration talking points that you are repeating. Whether it will work or not is an open question. Whether it would be good for the country if the administration strategy works is, I think, not an open question.

Posted by: Brad DeLong on January 14, 2004 10:25 AM

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Patrick, people have been taking bets as to how long O'Neill would hold out before fudging. Diulio lasted about 24 hours. Rove is a very persuasive guy.

Pursuant a theory of mine expressed on another thread here, have you actually read the book, or are you just running through the standard attacks on O'Neill? My data tell me that people who have read the book find it much more damaging than people who have not done so.

Posted by: zizka on January 14, 2004 10:35 AM

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A sociological queston -- why are conservatives so "disciplined"? That is, why do they all repeat the current spinpoints without questioning them?

Posted by: joe on January 14, 2004 10:43 AM

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Joe -- its the savings from mass production. People who make their own minds up instead of getting them ready-made are Luddites, like people who insist on sewing their own clothes from cloth they wove themselves.

Posted by: zizka on January 14, 2004 11:22 AM

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Patrick, as i'm sure you know by now, there is at least one other participant in the NSC meetings who tells it like O'neill.

More to the point, O'Neill is correct that this is a minor point in the book. The real point, as Brad's many excerpts make clear, is to reaffirm what we already know from both diullio and frum: the president is shallow and incurious, and his adminstration sees policy choices as nothing but political choices.

Why would you defend any of this?

Posted by: howard on January 14, 2004 12:04 PM

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" Well, those are the administration talking points that you are repeating."

No. They're Paul O'Neill talking to Katie Couric, sounding very much like a guy who has just realized that his pal Suskind screwed him.

Posted by: Patrick R. Sullivan on January 14, 2004 12:51 PM

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Patrick, you did read what he actually said - or watch it?

All that he's backing away from is that this small piece of a book with much bigger fish to fry has gotten so much exposure. however, as i already noted, his actual account has been verified by another meeting participant. The empirical question is the extent to which the Bush Administration immediately began military planning, which most assuredly was NOT mandated by the '98 congressional action, and someday we'll know more about exactly what happened.

but since o'neill reaffirms that the attention given to the matter from the gitgo surprised him (and couric doesn't ask, but it appears that he's not backing away from his surprise that no one challenged the idea), it's hardly the dramatic climbdown you posit.

Since Brad offers you the link to the supporting commentary from the anonymous meeting participant (my guess? tenet - who else: a.) has it in for the bushies and b.) could compare the approaches of the two administrations), the least you could do is read it.

Posted by: howard on January 14, 2004 01:05 PM

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Most people think O'Neill sounded like a guy who had found a horse's head in his bed.

Posted by: zizka on January 14, 2004 01:11 PM

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As I indicated in my article, my source for Cheney's position on the steel issue was his domestic policy advisory, Cesar Conda. I have no reason doubt him. I continue to believe that O'Neill let down the anti-tariff forces during the time before the final decision was made. If he had been half as forceful against the tariffs during that period as he was afterward, they would not have been imposed. At the time the decision was made, I had good sources in the White House telling me that Treasury was AWOL on the issue. Why, I don't know.

Posted by: Bruce Bartlett on January 14, 2004 04:22 PM

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The excerpts I have read are truly sickening....we are leaderless...a shallow, ignorant, intellectually lazy and boorish President who leads on the basis of no discernible principles.

I never thought he was qualified to be President..I have read the full transcript of as many of his public remarks as I could, not relying on the snippets shown on TV, so already thought Bush was clueless....truly sad to see how much worse it is.

I do not believe for a second the spin being put forth about Bush really "driving" these meetings with his "tough, incisive" questions...he can barely express coherent thoughts when he speaks without a script.

He is a small and shallow man, bullying others, and posing as a "bold and decisive" leader....and a deceiver, to boot!

Posted by: marty on January 14, 2004 05:27 PM

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Bruce Bartlett writes:

>>my source for Cheney's position on the steel issue was his domestic policy advisory, Cesar Conda. I have no reason doubt him. I continue to believe that O'Neill let down the anti-tariff forces during the time before the final decision was made. If he had been half as forceful against the tariffs during that period as he was afterward, they would not have been imposed. At the time the decision was made, I had good sources in the White House telling me that Treasury was AWOL on the issue. Why, I don't know.<<

Thanks. I agree that something does not compute--there is neither an ideological, a political, or a policy reason for Treasury to have gone AWOL on the steel tariff...

Brad DeLong

Posted by: Brad DeLong on January 14, 2004 05:36 PM

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On why O'Neill was AWOL on steel, my thinking at the time was that he knew the president wanted the tariffs and he didn't want to have to oppose him. He may have feared that if Treasury weighed in heavily on the issue, the president would have to reject the tariff and would be angry at O'Neill for preventing him from doing what he wanted to do. By making only token opposition before the decision and then indicating strong opposition afterward, when it no longer mattered, O'Neill was able to have his cake and eat it, too.

An alternative theory is that O'Neill background in the aluminum industry made him sympathetic to the steel industry's case for protection. But as Treasury secretary, he could not institutionally support protection. So he mouthed free trade rhetoric, while greasing the skids for protection.

Either way, it was a bad decision by everyone involved.

Posted by: Bruce Bartlett on January 15, 2004 08:12 AM

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>>On why O'Neill was AWOL on steel, my thinking at the time was that he knew the president wanted the tariffs and he didn't want to have to oppose him. He may have feared that if Treasury weighed in heavily on the issue, the president would have to reject the tariff and would be angry at O'Neill for preventing him from doing what he wanted to do. By making only token opposition before the decision and then indicating strong opposition afterward, when it no longer mattered, O'Neill was able to have his cake and eat it, too.<<

There is page 220 of _The Price of Loyalty_, which seems to imply that O'Neill had promised *someone* he'd stay quiet on steel, but doesn't quite say who...

And IIRC, O'Neill's preferred "solution" was always a worldwide producers' cartel...

Posted by: Brad DeLong on January 15, 2004 09:47 AM

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