Free On the Brink by Henry M. Paulson Page B

after the secretary of State. Walk out right behind me.”
    In the early days, with Condi watching out for me, I was fine. But when she wasn’t, problems sometimes arose. In 2007, President Bush hosted the nation’s governors at a conference in Washington at the White House. Condi was unavailable, so Wendy and I were supposed to sit beside George and Laura Bush during the after-dinner entertainment in the East Wing. We got to talking with California governor Arnold Schwarzenegger about environmental issues, and when the time came to sit down, Wendy and I took seats in the back of the room, leaving two empty chairs next to the president and First Lady. Finally, Bob Gates, the Defense secretary, moved over and took one of the vacant seats. Everybody was laughing, especially my Cabinet colleagues. As we walked out after the event, the president said to me, “Paulson, do you want to be a governor?”
    But that wasn’t my worst faux pas. President Bush hated it when cell phones went off in meetings. In January 2007, I was in the Oval Office for a meeting with José Manuel Barroso, the president of the European Commission. As dictated by protocol, I sat on the couch to the left of the president, beside Condi. My phone, I thought, was turned off.
    We were all listening intently as the two leaders engaged in a pleasant discussion, when my cell phone began to ring. I jumped like I’d been stabbed with a hot stick. I patted myself down, looking first in my suit coat where I always kept the phone, but I couldn’t find it. In my desperation I stood up and checked under the couch cushions in case it had fallen down there—no luck. It just kept ringing, while my mortification level rose. Finally, Condi figured out where it was. She pointed to my right pants pocket, and I turned it off as quickly as I could.
    “Paulson,” the president ribbed me later, “that’s a three bagger: in the Oval Office; with a visiting head of state; and you couldn’t find it.” I never let it happen again.
    I wish I could say that the offending phone call concerned a critical Treasury matter, but in fact it was from my son, who had called to talk about the Chicago Bulls.
    No one has ever accused me of being too smooth. I come at people aggressively and tell them how I think a problem should be solved. I listen to anybody with a good idea, then I make sure that the best solution is adopted. While this approach worked well for me in business, I found that decision making is much more complex and difficult in Washington, particularly on Capitol Hill.
    No matter what the problem, large or small, there is no such thing as a quick solution when you deal with Congress. Frankly, you cannot get important and difficult change unless there’s a crisis, and that makes heading off a crisis quite challenging.
    Working effectively with lawmakers is a big part of the job of a Treasury secretary, and although I knew it would be frustrating, I underestimated just how frustrating it would be.
    We had some early successes in the international arena, staving off potentially harmful anti-China protectionist legislation and getting a bill that clarified the process for foreign investment in the U.S. But we stalled on a number of domestic initiatives, including the administration’s attempts to reform Social Security and Medicare.
    Fannie Mae and Freddie Mac, the mortgage giants, presented another difficult legislative challenge. When I first arrived in Washington, I was living out of my suitcase at the St. Regis Hotel at 16th and K Streets. Washington summers are hot and humid, but I enjoyed running around the National Mall, past the monuments and museums, weaving my way through the throngs of tourists. One day in late June 2006, I had just returned to the hotel from a run, dripping wet, when Emil Henry, Treasury assistant secretary for financial institutions, and his deputy, David Nason, showed up at my room to brief me on the two GSEs.
    I was no expert on the subject.