Excerpted from Part 3 of the Cheney story in the Washington Post:
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A few days later, Cheney was "on fire" when he met with the president, Cheney's chief of staff, I. Lewis "Scooter" Libby, later told Conda. Cheney had decided that the best way to shake business leaders out of their post-attack paralysis was to let them immediately write off the cost of new plants and equipment. After hearing him out, Bush made Cheney's idea a centerpiece of his plan.
In previous administrations, such initiatives typically have been generated by the Treasury Department or the White House economic team. But Cheney has made the vice president's office a hub of tax policy, enabled by the fact that "this president appears to want to have Treasury take the orders from the White House," said John H. Makin, an economist and an informal Cheney adviser.
All this put Cheney in a position to outflank some of Bush's top advisers, and even his old friend Greenspan, to shape the administration's signature tax package: the 2003 cuts that Cheney sold at the Greenbrier resort in West Virginia.
'The President Made the Call'
As far as Greenspan knew, the vice president agreed with him on the danger of the tax package Bush was contemplating. The Federal Reserve chairman worried that the sheer size of the cuts would drown the federal budget in red ink.
When Bush met with Alan Greenspan, Cheney was almost always present. Behind the scenes, the vice president took steps to undermine a study the Federal Reserve chairman gave him that could threaten the 2003 tax cuts.
Cheney and Greenspan met regularly, far more often than the Fed chief met with Bush, according to interviews and Greenspan's calendar. And when the president did meet with Greenspan, Cheney was nearly always in the room.The vice president and the Fed chairman had formed a close bond when both served in the Ford administration. The Fed chief saw the vice president as a conduit to a president he did not know nearly as well, someone he could trust to fairly present his views to Bush.
So Greenspan sent Cheney a study by one of the central bank's senior economists showing that big deficits lead to higher long-term interest rates, according to a person with firsthand knowledge. Higher rates, Greenspan believed, would wipe out any short-term benefit from a tax cut.
In subsequent meetings with the Fed chief, Cheney never took issue with the study. What Greenspan did not know was that, behind the scenes, the vice president took steps to undermine an argument that could threaten the big tax cut he favored. Conda, the vice president's aide, said Cheney asked him to critique the study. Conda attached his own memo arguing that the Fed's analytical model was flawed. He said "it wasn't my job to know" what Cheney did with the paperwork, but noted that Greenspan's study did not gain traction inside the White House.
Aside from Greenspan, Cheney had faced down opposition from many of the administration's senior economic voices, including Daniels, Treasury Secretary Paul H. O'Neill and Commerce Secretary Donald L. Evans. They believed that the economy was recovering and that a deep tax cut wasn't needed. Daniels said he worried that it would undermine the GOP message of fiscal discipline. [.......]
http://blog.washingtonpost.com/cheney/chapters/a_strong_push_from_back_stage/index.html
