Jan. 21 (Bloomberg) -- Paul O'Neill is having an impact.

It's not exactly the kind of impact he had hoped for when he signed on as the Bush administration's first Treasury secretary. Instead of being remembered for his role in shaping U.S. economic policy -- goals such as reforming the tax code and privatizing Social Security -- O'Neill is making headlines for his disparaging remarks about President George W. Bush and his inner circle as chronicled in Ron Suskind's new book, ``The Price of Loyalty.''

O'Neill, the main source for the book, describes the president as disengaged (``a blind man in a room full of deaf people''), the policy process as broken (``no policy apparatus to assess policy and deliberate effectively'') and policy decisions as divorced from analytical rigor (``efforts to collect evidence and construct smart policy are ... co-opted by the White House political team, or the vice president'').

For the former chief executive of Alcoa Inc., who is the kind of guy who makes the trains run on time -- O'Neill saw that 91.6 million tax-rebate checks were printed and mailed seven weeks after Bush signed the tax bill, not the three months the tax experts said it would take -- this was heresy.

Never one to hide his feelings or soft-pedal his views, this veteran of the Nixon and Ford administrations and adviser to President George H.W. Bush was sacked in December 2002 for insubordination: for opposing the third Bush tax cut.

Suicide Pact

O'Neill's old friend and partner in crime throughout the book is none other than Alan Greenspan, chairman of the Federal Reserve. The two colleagues from the Ford administration are soul mates, budget hawks and ``intellectual pragmatists.'' They make a ``secret pact'' during the tax-cut debate to promote the idea of triggers should the fiscal surpluses evaporate. (Greenspan doesn't just advise Congress on fiscal policy, he shapes it behind the scenes.)

The two data-driven colleagues meet regularly for breakfast to dig through the numbers and indulge in the kind of analytical give-and-take Suskind and O'Neill claim is missing in the Bush White House.

The book recounts a meeting where O'Neill and Greenspan, delving into the mechanics of Social Security privatization, delight in the fact that their respective research staffs have come up with the same cutoff age for moving workers into a new system where they can save for their own retirement.

```I got a cutoff age of 37,' O'Neill said.

``Greenspan laughed. `Me too.'''

Truths Self Evident

The transition cost of fully funding everyone over age 37 in the current system is estimated at $1 trillion. Both O'Neill and Greenspan would have preferred the surpluses be used to address the future strains on the retirement system rather than to cut taxes.

In his 23 months at the Treasury, a plum cabinet appointment, O'Neill was viewed as a loose cannon for speaking his mind -- bluntly, at all times.

He suggested that the value of the dollar is set in the foreign-exchange market, not by official government policy.

He called Congress's deliberations over a $100 billion stimulus plan in October 2001 ``show business.''

He argued that imposing steel tariffs was bad policy.

He went to Africa with rock star activist Bono and came back convinced U.S. aid could produce measurable results in poor nations, such as digging wells to provide potable water.

In all these cases, O'Neill was speaking the truth. You can call him naive for failing to understand the power of his words and position, but you can't accuse him of dishonesty.

Straight Shooter

That's why the common criticism of the book as a case of sour grapes, or revenge, on the part of a disgruntled government official doesn't ring true. Even O'Neill's detractors concede he's a man of integrity, a man who speaks his mind even if what comes out is clumsy at times or politically incorrect.

After seeking and speaking the truth his whole life, is it likely that at age 68 O'Neill would default to fabrication?

O'Neill never misrepresented himself -- his views or his M.O. -- when he was offered the job as Treasury secretary.

``I've been the boss for thirteen years,'' O'Neill told Bush and Vice President Dick Cheney. ``I like to come up with my own data and my own decisions. ... I like to say what I think, especially on subjects I've spent a few decades thinking through. In Washington these days, that might make me a dangerous man.''

Bush and Cheney laughed, according to Suskind, before assuring O'Neill that he was their man. At least until his brand of truth became a liability two years later.

Backpedaling

The same shoot-from-the-hip style that got O'Neill into trouble in Washington has already caught up with him on the book- promotion circuit. One week after the book's publication, O'Neill told the ``Today'' show's Katie Couric that if he could take back the ``vivid language'' he used to describe the president, he would.

``The Price of Loyalty'' has its share of inconsistencies, which may have been overlooked in the rush to publication. For example, on Jan. 30, 2001, 10 days after Bush took office, the president met with his National Security Council, of which O'Neill was a member, for the first time.

On page 73, Suskind writes: ``The President said little. He just nodded, with the same flat, unquestioning demeanor that O'Neill was familiar with.''

Familiar with? O'Neill had just met him. He'd been recommended for the Treasury post by his old friend Cheney. He had met the president briefly only once, in 1996, prior to being summoned to Washington in January 2001.

Capital Crime

Then there's the quote attributed to Greenspan at a Feb. 22, 2002, meeting of the president's working group on corporate governance convened following revelations of accounting irregularities at Enron, Global Crossing and Tyco, among others. Dismayed at the lack of outrage from the other members, Greenspan ``clapped his hand on the table and raised his voice. `There's been too much gaming of the system until it is broke. Capitalism is not working!'''

Can anyone imagine Greenspan, the Ayn Rand acolyte, uttering such a statement?

Reading the book, I kept asking myself why O'Neill would do it. Why would he provide 19,000 documents to Suskind and devote countless hours to sharing his recollections with the author? He doesn't need the money. He doesn't want the publicity. And he doesn't particularly care what people think of him. His cooperation could only damage his dignity. (O'Neill didn't return my calls, so I can only speculate.)

O'Neill seemed genuinely surprised (a hopeless naif?) when Lesley Stahl of ``60 Minutes'' told him his portrayal of the president in the book was unflattering. She asked if he was prepared for an attack by the administration.

``I can't imagine that I'm going to be attacked for telling the truth,'' O'Neill said. ``Why would I be attacked for telling the truth?''

Last Updated: January 21, 2004 00:02 EST