TAXING.(The Talk of the Town)(book by Ron Suskind about former Treasury Secretary Paul O'Neill)

In 1981, David Stockman, Ronald Reagan's budget director, invited the financial journalist William Greider to the White House and told him that the President's controversial and far-reaching tax-cut package was a "Trojan horse" designed to reduce the top tax rates on the wealthy. Greider reported this comment in The Atlantic Monthly, and the flap that ensued prompted James Baker, Reagan's flinty chief of staff, to summon Stockman to his office. "My friend," Baker began, "I want you to listen up good. Your ass is in a sling." The only way for Stockman to save his job, Baker explained, was for him to have lunch with the President. "The menu is humble pie. You're going to eat every last mother f'ing spoonful of it. You're going to be the most contrite sonofabitch this world has ever seen." Just in case Stockman hadn't got the message, Baker added, "When you go through the Oval Office door, I want to see that sorry ass of yours dragging on the carpet."

Several years later, after Stockman left the White House, he wrote a best-selling book, "The Triumph of Politics," in which he recalled the encounter with Baker and lamented the fact that Reagan's political advisers refused to sanction cuts in spending programs to pay for the tax reductions. The book remains an essential source for understanding why the first round of supply-side economics left the federal government trillions of dollars in debt. Now it has a successor: "The Price of Loyalty," by the former Wall Street Journal reporter Ron Suskind, which recounts the experience of Paul O'Neill, George W. Bush's first Treasury Secretary.

O'Neill is hardly a dispassionate observer. In December, 2002, after two uncomfortable years on the job, during which time he earned a reputation as a maverick, he got a call from his old friend Dick Cheney, who told him that he was being fired. Suskind's book is O'Neill's reply to this indignity--a third-person memoir that bristles with resentment at his treatment. But, self-serving though the book may be, it offers enough inside information to be a damning read.

The media's attention has focussed mostly on O'Neill's not very revealing revelation that the Administration was plotting from week one to remove Saddam from power, but the bulk of the tale concerns domestic policy. O'Neill provides a vivid and detailed account of how, in just three years, the Bush Administration transformed a healthy budget surplus into a deficit that this year is likely to reach five hundred billion dollars. O'Neill is often described as a moderate; in fact, he is a fervent believer in the free-market approach to almost everything. His ambition, when he left the chairmanship of Alcoa for the Treasury, was to replace Social Security with a system of private-investment accounts. He supported tax cuts, too, but he thought that the Administration's $1.6-trillion giveaway should be contingent on the state of the economy. Suskind discloses that O'Neill and the Federal Reserve chairman, Alan Greenspan, tried to persuade the President to accept a set of "triggers," which would limit the scope of tax cuts if the fiscal outlook worsened, as it soon did. "I won't negotiate with myself," Bush told O'Neill when he brought up the idea. "It's that simple."

Having worked with Richard Nixon, Gerald Ford, ...