WORLD / America

Bush taps Paulson for Treasury secretary
Updated: 2006-05-31 08:44

A millionaire many times over, Paulson was paid $30 million in total compensation in 2004 from Goldman Sachs, almost a 40 percent gain from the year before.

Paulson is a major Republican donor and fundraiser.

He collected at least $100,000 for Bush's 2004 campaign, earning the label "pioneer" reserved for Bush's six-figure fundraisers. Paulson has donated at least $68,000 to GOP campaigns and party committees so far in the 2005-06 election cycle, including $25,000 to the National Republican Senatorial Committee and $15,000 to its House counterpart, figures compiled by the Political Money Line campaign finance tracking service show.

His nomination follows another important change in the nation's economic guard.

Federal Reserve Chairman Ben Bernanke, appointed by Bush took the Fed helm from Alan Greenspan on Feb. 1.

Bernanke, who has had a bit of a bumpy start in terms of communicating with financial markets, described Paulson as "highly respected throughout the financial world." Given the new Fed chief, economists said it couldn't hurt to have Paulson's seasoned market experience on the Bush team.

Paulson is to take over the Treasury post at a time when the economy, which had posted its strongest growth spurt in 2 1/2 years in the opening quarter of 2006 is expected to log slower growth.

Rising energy prices are a wild card for the economy, while big budget and trade deficits also pose risks.

Trying to defuse trade tensions with China is another challenge. The United States racked up a record-high $202 billion trade deficit with the Chinese last year.

As Treasury secretary, Paulson will not only become the president's top economic salesman but also the top spokesman for the U.S. dollar.

Snow's financial diplomacy led China to take important steps in revamping a currency policy that some in the U.S. had blamed for the huge trade deficit and a loss of manufacturing jobs. With his worldwide contacts, Paulson might be able to bring about further change to relieve the trade situation, some economists and policymakers said.

Clad in a crisp dark suit, Paulson accepted the nomination Tuesday as the president and Snow looked on.

"Our economy's strength is rooted in the entrepreneurial spirit and the competitive zeal of the American people and in our free and open market," Paulson said. "It is truly a marvel, but we cannot take it for granted. We must take steps to maintain our competitive edge in the world."

Paulson's nomination was met with applause from many in the financial community. They also commended Snow for his leadership during the last three years.
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