Recession Will Be Deeper and Longer Than Past Ones, College Presidents Are Told

January 5, 2009

Bonita Springs, Fla. — Paul H. O'Neill, President Bush's first treasury secretary, told a group of college presidents earlier today that the current recession will be different from past ones, in both depth and length.

"This is not a V-shaped recession, where the rate of recovery is the same as the rate down," Mr. O'Neill said here in a keynote speech at the Council of Independent Colleges' Presidents Institute.

He predicted that the bottom would be reached sometime in the next six to nine months, although he added that "if anyone tells you when we will recover, put your hand over your wallet and look for the door."

Mr. O'Neill used most of the speech to give the group an insider's view of a meeting of economic leaders he attended with Barack Obama in July, during the presidential campaign. In that meeting, he urged Mr. Obama to "educate the public" about pressing policy issues, including energy, health care, education, and unfunded liabilities like Social Security and Medicare.

"If you educate them and tell them the truth, then you can say your election is a mandate on that change," Mr. O'Neill said he told the Illinois senator. In response, Mr. O'Neill recalled, Mr. Obama said he could tell only as much of the truth as necessary to get elected.

Mr. O'Neill also offered a range of policy ideas to the college presidents today, including views:

On energy: If the government "really wants to do something about consumption," it would institute a "floating tax" so that gas never dropped below $5 a gallon.

On health care: The United States could cut its spending in half if the government focused on reducing inefficiencies and errors in the system.

On education: Reforms should be geared toward the 30 percent to 40 percent of students who fail in the current system. "We're not going to get better results," he said, "until we fix the learning process for those children." —Jeffrey J. Selingo