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Senate Confirms Mnuchin as Treasury Secretary

Posted on February 14, 2017 by Curry, Jonathan

By a vote of 53 to 47, the Senate on February 13 confirmed Steven Mnuchin as the 77th Treasury secretary of the United States. Mnuchin was expected to be sworn in to his position later in the evening.

The mostly party-line vote came as part of a larger pattern of efforts by Democratic lawmakers to delay the confirmation of many of Trump's Cabinet nominees. Confirmation votes for Mnuchin and Health and Human Services Secretary Tom Price in the Senate Finance Committee were boycotted by Democrats, who said there were concerning questions about the nominees that had yet to be answered, leading Republicans to sidestep committee rules and vote the nominees out of committee without any Democrats present. Price was confirmed by the full Senate early the morning of February 10. 

Ahead of the vote, Mnuchin's critics cited concerns about foreclosure practices used by OneWest Bank, which Mnuchin ran from 2009 up until it was bought by CIT Group in 2015, and Mnuchin's earlier Wall Street background working for Goldman Sachs.

Finance Committee Chair Orrin G. Hatch, R-Utah, dismissed Democrats' concerns in remarks on the Senate floor February 13 and said that Mnuchin "has ample experience, credentials, and qualifications for this important position."

One question that remains to be answered is what will become of the "Mnuchin rule," as Finance Committee ranking minority member Ron Wyden, D-Ore., termed it. The "rule" stems from comments made by Mnuchin on CNBC shortly after he was announced as Trump's nominee for Treasury secretary in which he said there would be "no absolute tax cuts for the upper class." Mnuchin said then that tax rate cuts for wealthy individuals would be offset by eliminating deductions. 

In a February 13 floor statement, Wyden again brought attention to the Mnuchin rule. The Republican effort to repeal the Affordable Care Act effectively acts as a "Trojan horse of tax breaks" for the wealthy that would only benefit upper-income earners, and the tax reform effort Republican lawmakers are planning for 2017 is shaping up to offer even bigger tax breaks, Wyden said.

"When a nominee for Treasury secretary makes a pledge like Mr. Mnuchin, it really ought to mean something, it ought to stand for something. Unfortunately, it already looks like the Mnuchin rule is on the ropes," Wyden said.

The tax plans proposed by Trump himself during the campaign, as well as House Republicans' "A Better Way" tax reform blueprint, propose cutting taxes at rates that would produce proportionally larger benefits to upper-income earners, according to estimates from both the Tax Foundation and the Urban-Brookings Tax Policy Center. Asked to explain how he intends to square the Trump administration's future tax reform plan with his earlier pledge, Mnuchin neither reaffirmed his pledge nor withdrew it.

Speaking at his January 19 confirmation hearing, Mnuchin said he would work to deliver a middle-income tax cut, without commenting on how upper-income taxpayers would be affected. And in subsequent written questions for the record, Mnuchin first stated he would "work with Congress to maintain an appropriate level of progressivity in the tax code." Then, when pressed to clarify further in a second round of written questions, Mnuchin responded that he would review the proposed tax cuts after the Treasury Office of Tax Analysis has the opportunity to analyze them, and that he looks forward "to working with Congress to review the administration's proposed distribution of tax cuts when it becomes available."

Mnuchin takes over Treasury's reins from acting Treasury Secretary Adam Szubin, who has served in that capacity since Inauguration Day, when former Treasury Secretary Jacob Lew resigned.