Bush's decision kept an important member of his economic team in place as the president seeks to promote his second-term priorities of simplifying tax laws and overhauling Social Security.

At the same time, Veterans Affairs Secretary Anthony Principi told his staff he was resigning, a senior administration official said. Principi is the ninth member of Bush's 15-person Cabinet to leave. He is a graduate of the U.S. Naval Academy and a decorated Vietnam veteran.

Rumors had swirled in the capital about Snow's future. Published reports said Bush would oust him. White House Chief of Staff Andy Card told Snow to ignore it all. While Snow was at the White House for a weekly meeting Wednesday, Bush summoned him to the Oval Office to ask him to stay on.

''The president is pleased Secretary Snow agreed to continue to serve,'' spokesman Scott McClellan said.

''He's done a great job and has been a valuable member of the economic team, and we have a lot of important work to continue to build upon the steps we've already taken to get the economy growing stronger and creating jobs,'' McClellan said. ''He's been an integral part of those efforts.''

Snow, 65, is the former chief of CSX, the railroad company, and holds a doctorate in economics.

''The secretary is honored to help the president to implement his agenda to strengthen the economy,'' Treasury spokesman Rob Nichols said.

Snow has proved a forceful advocate of the president's economic policies, notably big tax cuts, on Wall Street and Main Street. He took the post at Treasury in February 2003, when the economy and the job market were struggling to recover from the 2001 recession, the Sept. 11 attacks and corporate accounting scandals.

During the 2004 presidential campaign, Snow traveled constantly, promoting administration economic policies. On some occasions, his comments had repercussions. On one trip to Ohio, Snow reignited the political argument about the shift of U.S. jobs to other countries, saying that that practice was an integral part of a global trading system. Snow's comments came against the backdrop of the loss of millions of manufacturing jobs in the United States. Democrats pointed to the losses as evidence that the president's economic policies were failing.

Principi joined the Cabinet in January 2001. ''It is now time for me to move on to fresh opportunities and different challenges,'' he wrote to Bush in a letter released at the White House.

The Department of Veterans Affairs administers health care and retirement benefits for about 26 million former members of the U.S. military. It operates hospitals and clinic nationwide and spends about $59 billion a year.

Bush said in a statement Wednesday that Principi increased and improved health care services for veterans, worked to eliminate a waiting list for medical care and cut a backlog in disability claims. The statement didn't address who would replace Principi, who said he'd stay in the post until the Senate confirms a successor.

The changeover in Bush's Cabinet is on the high side for a second-term president. Presidents Clinton and Reagan saw seven Cabinet seats change hands after they won new terms, President Nixon nine and Presidents Truman and Johnson four each.