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Treasury nominee vows to review funds tracking

Henry Paulson, expected to sail through confirmation, shares his ideas on Medicare, the trade deficit and taxes.

By ASSOCIATED PRESS
Published June 28, 2006

WASHINGTON - Treasury Secretary-designate Henry Paulson pledged Tuesday to review a once-secret program that allowed the government to access a massive international database of financial information to catch terrorists financiers.

"If confirmed, I'll be all over it ... and make sure I understand the law thoroughly," Paulson, a 32-year veteran of Wall Street, told the Senate Finance Committee during his confirmation hearing that touched on a wide range of topics.

Sen. Max Baucus, D-Mont., was upset that the administration did not brief the Senate Finance Committee on the terror-tracking program, which has stirred some concern among privacy advocates and some Democrats.

Last week's public disclosure of the program's existence angered the Bush administration, which said it could hobble their efforts to shut down avenues for terrorist fundraising.

In response to a request by Baucus, Paulson pledged to personally review the program after he takes the Treasury helm.

Paulson said that he would have to "get my arms around" the issue of a program that the Treasury Department has used since shortly after the Sept 11, 2001, terror attacks, to track activity by suspected terrorist financiers.

He said he had not been briefed on the program, but said that weighing people's financial privacy with fighting the global war on terror is a delicate balancing act.

Paulson's nomination is not expected to hit any major roadblocks.

The panel's chairman, Sen. Chuck Grassley, R-Iowa, has said he hoped the nomination would be approved by the full Senate by the start of the July 4 congressional recess.

Democrats and Republicans on the Senate committee welcomed Paulson's nomination, citing his strong credentials for the job.

If approved as expected, the 60-year-old chairman and chief executive officer of Goldman Sachs would become Bush's third Treasury secretary since the president took office in January 2001.

As Treasury secretary, Paulson also promised to improve America's global competitiveness, in part by ensuring that companies are treated fairly in trade matters and by keeping taxes down.

To help make the United States more competitive on the global playing field, Paulson said he would work to advocate policies that provide open and level markets for U.S. investment and for U.S. products.

Paulson said the United States must come to grips with the long-term unfunded obligations of Social Security and Medicare, problems that "threaten to unfairly burden future generations."

Shoring up these entitlement programs that will face massive strains with the wave of retiring baby boomers is a "formidable challenge," Paulson acknowledged. But he expressed optimism that something could be accomplished to help this during the remaining time in the president's term.

As to the government's bloated budget deficits, "like all of us, I wish the deficit was lower," Paulson said. While he said he would like to see spending curbed to help trim the deficit, he said the size of the budget shortfall is in the realm of historical norms.

Paulson said he thought it would be "a big mistake" to raise taxes to deal with the deficit.

Bush selected Paulson to succeed John Snow, the former chief of CSX Corp., the big railroad company. Snow has run Treasury since February 2003.

Beset by low job-approval ratings, Bush is looking to Paulson to help energize the administration's stalled second-term economic agenda. The nomination was part of a flurry of other changes in the president's personnel lineup.

[Last modified June 28, 2006, 01:35:21]