The Senate Finance Committee just started Jack Lew’s Treasury Secretary confirmation hearing, and already he has clear directives on his plate.At the same time, anyone watching this hearing likely already has a sense of how it’s going to go. Republicans, Democrats, and Lew laid out their positions pretty clearly in their opening statements.
Lew was Obama’s Chief of Staff, and a former budget director for both the Obama and Clinton administrations. He also did a brief stint at Citigroup and worked under former House Speaker Tip O’Neil (remembered for working across the aisle with Ronald Reagan to pass 1986’s tough tax and budget reform).
Lew’s expected to enter a Treasury Department focused on cleaning up our current federal budget, rather than a national financial crisis, and his prepared comments reflect that.
“We must put our nation back on a path of fiscal sustainability. Over the past two years, we have locked in $2.5 trillion in deficit reduction through spending cuts and revenue increases…And we can do even more to shrink the deficit over the next decade through a balanced mix of spending reductions and tax reforms, and sensible reforms to Medicare that will help the program stay sound in the future.”
Senator Max Bacchus (D-Mont.), in his opening remarks, added three more vital tasks for Lew to focus on — jobs, tax reform, and “creating…stability in Washington.” Bipartisanship.
Senator Chuck Schumer, introducing Lew and recommending him highly, stressed Lew’s ability to work across the aisle. Lew emphasised it in his prepared remarks as well.
“In recent years, some have argued that Washington is irrevocably broken. That our government cannot tackle the nation’s most serious problems. That bipartisanship is a thing of the past. I disagree,” Lew said. “I have seen and learned a lot. And I can honestly say that the things that divide Washington right now are not as insurmountable as they might look.”
On the other side the Republicans, first represented by Orrin Hatch (R-Utah), are focusing on how Lew wants to balance the budget, specifically on his views on raising taxes.
Here’s what Hatch said about that last week (from Reuters):
“We need a better understanding … of what kind of plan the Obama administration has to confront our skyrocketing debt and our broken entitlement programs,” said Senator Orrin Hatch, the top Republican on the finance panel
Additionally, and Hatch spent some time on this in his opening remarks, the Republicans are scrutinizing Lew’s stint at Citigroup and how that will influence his implementation of Wall Street regulatory legislation, the Volcker Rule and Dodd-Frank.
Lew made $2.65 million at Citigroup in 2007 and 2008. He started in 2006 as COO of the bank’s global wealth management division.
Right before Citigroup took a government bailout during the financial crisis, Lew got a $940,000 bonus. Chuck Grassley (R-Iowa) has already said he’ll be jumping on that saying last week, “the Treasury Secretary can’t owe anyone on Wall Street any favours.”
All that said, no one really expects Lew to get the same grilling Chuck Hegel got during his confirmation process for Defence Secretary. The Senate will, however, be giving Lew additional questions that he will have a week to answer. He won’t be confirmed before that.
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