Financier Chosen To Head Treasury

"We have a very strong economy, a very strong banking system, but these things do happen, just like hurricanes," said Stephen Friedman, the former director of Bush's National Economic Council and a predecessor of Paulson's at Goldman Sachs. "Hank is someone with a superb background, who understands markets in his bones. That's something the White House was very aware of."

Paulson worked in the Pentagon as a young man, after his graduation from Dartmouth College in 1968 and Harvard Business School in 1970. He began at Goldman Sachs in 1974 and worked his way up to chairman and chief executive, a job that brought him a compensation package in 2005 of $38.8 million.

An ardent conservationist, Paulson is the outgoing chairman of the Nature Conservancy, an environmental group. Paulson donated to the presidential campaigns of Sen. John McCain (R-Ariz.) and former senator Bill Bradley (D-N.J.). In 2003, he gave $2,000 to Bush's reelection effort. Since 1998, he and his wife, Wendy, have given $980,000 to a political organization affiliated with the League of Conservation Voters, which has slammed Bush, saying he is on the way to "compiling the worst environmental record of any president in the history of the United States."

On economic policy, however, Paulson apparently is more in sync with the president. He has supported tax cuts as a way to stimulate the economy, said Tony Snow, Bush's press secretary.

Paulson's nomination stirred no immediate objections in the Senate. Sen. Charles E. Grassley (R-Iowa), chairman of the Finance Committee, said he looked forward to meeting the nominee. A Democratic member of the Finance Committee, Charles E. Schumer (N.Y.), said he spoke with Paulson yesterday and pledged his "full support for his nomination."

According to sources familiar with the events who spoke on the condition of anonymity because conversations were confidential, Paulson had long planned to pursue his passion for the environment when he retired. Even when Bolten called him in mid-May and urged him to reconsider after rebuffing the original White House overtures, Paulson rejected a request that he meet with Bush, saying he did not want to waste the president's time.

Bolten persisted, and Paulson eventually agreed to meet with Bush. During his long White House session May 20, Paulson "wanted to make sure that he would get access to the president, and he wanted to make sure he understood how the president viewed the job, and he was satisfied with the answers," a source said.

Research editor Lucy Shackelford contributed to this report.