Posted by on February 13, 2017 11:45 pm
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After nearly a full month has passed since his original confirmation hearing back in mid-January, the Senate has finally voted to confirm former Goldman Sachs banker, Steven Mnuchin, as Trump’s Treasury Secretary, adding one more official former vampire squid to the team of Trump’s “Goldman Guys.”  One Democrat, Joe Manchin of West Virginia, broke party lines and voted in favor on Mnuchin resulting in a final vote tally of 53-47.  Mnuchin’s confirmation once again puts a Goldman Sachs veteran in charge of the Treasury for the first time since Hank Paulson departed the office in 2009. 

Per the Wall Street Journal, the delay between presidential administrations in filling the Treasury post for Trump’s administation was the longest in the nation’s history. Moreover, the lack of bipartisan support for a Treasury secretary is unusual.  Previously, the closest vote for the job came in 2009 for President Barack Obama’s first Treasury secretary, Timothy Geithner, who won confirmation on a 60-34 vote with 10 votes from Republicans. His nomination became controversial after disclosures that Mr. Geithner failed to pay some employment taxes in a timely manner.

Given that Mnuchin is being confirmed weeks later than the Treasury Secretaries of previous administrations, he faces numerous immediate challenges including a debt ceiling expiration on March 15th and a meeting of the G20 Finance Ministers on March 17th.  Per Reuters:

Lawmakers, lobbyists and business groups have been waiting for Mnuchin to fill in the many blanks on how he will pursue tax reform and handle delicate economic cooperation efforts with China, Mexico and other trading partners worried about President Donald Trump’s “America First” trade strategy.

Mnuchin faces immediate challenges with the March 15 expiration of a U.S. debt ceiling suspension, ushering in the threat of a new default showdown, and a March 17 meeting of finance ministers from the Group of 20 major economies, where he will face tough questions about Trump’s plans to increase trade protections.

“There is a real open question as to whether this administration is going to cut itself off from international monetary cooperation, whether it’s exchange rate policies or attitudes towards multilateral institutions or international regulatory policy,” said Edwin Truman, a former Treasury and Federal Reserve official now with the Peterson Institute for International Economics

Truman said Mnuchin’s hardest job would be managing a sprawling tax reform effort with Congress that seeks to slash business tax rates and enact a new border tax adjustment system aimed at boosting U.S. exports. He noted that was a longer-term project.

Mnuchin

With his confirmation now complete, Mnuchin will have to get to work building a team which is expected to consist of several former Wall Street bankers, including David Malpass of Bear Stearns, Jim Donovan of Goldman Sachs and Justin Muzinich of Morgan Stanley.

Treasury and White House representatives did not respond to requests for comment on Monday on reports that Trump would soon nominate David Malpass, a former economist at failed Wall Street bank Bear Stearns, as Treasury undersecretary for international affairs, the agency’s top economic diplomacy job.

Malpass, a Trump campaign adviser who had been leading Treasury transition efforts, was seen as a leading candidate for the job, with experience from international economic posts in the Ronald Reagan and George H.W. Bush administrations.

Other names that have been floated for senior posts include Goldman Sachs banker Jim Donovan for deputy Treasury secretary and Justin Muzinich, a former Morgan Stanley banker, for undersecretary of domestic finance.

With Mnuchin now confirmed, all eyes will anxiously turn toward General Michael Flynn to see whether the embattled National Security Advisor will keep his position in light of recent revelations regarding with his apparently unapproved discussions about sanctions with a Russian ambassador.

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