Regards,
Janine Jackson

"Political Dynamite" Fails to Explode

Extreme proposals of Treasury's O'Neill get little play

By Janine Jackson

When a high-level government official calls for dramatic changes in U.S.
law, it ought to be big news. But in an interview reported by the Financial
Times' Amity Shlaes (5/19/01 & 5/22/01), Treasury Secretary Paul O'Neill
called for sweeping changes in U.S. tax and social policy, and several weeks
later, those statements have made hardly a ripple in the U.S. media; what
mentions there have been have appeared in opinion columns or in brief
asides. Most Americans have probably not heard a word about them.

In the interview, O'Neill called the current U.S. tax system "an
abomination" that required changes to its "very structure." His preferred
changes? O'Neill "absolutely" supports the elimination of taxes on
corporations--and the shifting of the tax burden to individuals, saying
government would work better if it "collected taxes in a more direct way
from the people."

He also called for the abolition of Social Security and Medicare, on the
grounds that "able-bodied adults should save enough on a regular basis so
that they can provide for their own retirement, and, for that matter, health
and medical needs." In fact, O'Neill believes the U.S. should reconsider the
whole purpose of taxation: "National defense is a federal responsibility,"
Shlaes paraphrases O'Neill as saying, "but all other outlays need review."

And O'Neill assured Shlaes he was not speaking only for himself: "Not only
am I committed to working on this issue, the president is also intrigued
about the possibility of fixing this mess."

The conservative Shlaes described O'Neill's ideas (approvingly) as "radical"
and "political dynamite." Yet the story has failed to take hold in the U.S.
press, despite the occasional allusion that suggests that reporters are
aware of it.

This is especially remarkable given that reporters have been talking with
the treasury secretary, mainly about the administration's tax cut plan:
Wouldn't it be worth noting, while reporting on O'Neill's stated desire to
get tax rebates to individuals, that he also holds the apparently
contradictory stance that individuals should bear the entire tax burden?

Among the handful of journalists to note O'Neill's remarks soon after they
were made were three columnists at New York's Newsday: Robert Reno (who said
the Treasury Secretary "comes across as a man who has paid a lot of taxes
and clearly resents it"-- 5/27/01) Marie Cocco (5/31/01) and Paul Vitello
(5/24/01). An obviously irked Vitello took it the furthest, actually calling
O'Neill's spokesperson at Treasury to confirm that these were not "made-up
quotes":

The secretary didn't really mean to say that no matter how old, no
person who has paid into the Social Security system all his or her life
would be entitled to benefits until he or she is physically no longer able
to work? He didn't really mean to say that ExxonMobil and Time Warner should
be treated as we treat the church--as tax exempt?

"Yes," said the spokesman, "that is our position. The quotes were
all accurate."

Thomas DeFrank of New York's Daily News also reported O'Neill's comments
(5/22/01), but he apparently got a different response from the Treasury
Department. "Treasury spokesman Rob Nichols said O'Neill's comments on
Social Security reflected his personal views, not the Bush
administration's," he noted.

In the country's major outlets, the story was harder to find. For example,
O'Neill's extreme statements made it into the New York Times only in an
op-ed by Democratic partisans James Carville and Paul Begala (5/27/01). USA
Today ran an Associated Press column (5/22/01) that placed O'Neill's calls
for eliminating taxes on corporations at the end, after discussion of estate
taxes and "simplification" of the tax system, and noted only that the
Treasury Secretary has plans for "reform" of Social Security. (AP's original
headline on the piece: "O'Neill: Further Tax Relief Coming," 5/21/01.) The
L.A. Times alluded to the comments at the end of a May 27 piece whose main
topic was how the tax cut and a decline in the top tax rate were "good news
for consumers," and later ran a pointed op-ed (6/21/01) by former labor
secretary Robert Reich.

Washington Post columnist John O. Fox (5/27/01) used O'Neill's "abomination"
quote to shore up his own argument about the U.S.'s "monstrously
complicated" tax code, but ignored the rest of his statements. And the
Post's David Broder made no reference to the Financial Times interview in
his June 6 column, which referred to Bush administration plans to "open
[Social Security and Medicare] up to market forces."

Broder did note congenially that "as Treasury Secretary Paul
O'Neill...reminded me the other day, what makes the task so difficult is the
need to educate people about the current system, before they can be
persuaded that it needs to be changed as the administration proposes."

Indeed, the American people could use "educating" about just what the Bush
administration and its treasury secretary propose. But shouldn't they be
able to get such an education from the mainstream news media?