Mnuchin Discusses Tax, Trade, Housing Policies at Confirmation Hearing

In between responding to Democratic attacks on his business leadership, Treasury Secretary designate Steven Mnuchin on Thursday commented on the incoming administration’s views on a range of policy issues that fall under the Treasury Department’s jurisdiction. Here are some highlights:

  • Mnuchin said he does not support a reinstatement of the Glass-Steagall Act, a Depression-era law that maintained a separation between banks’ commercial and investment activities. Instead, he said he would advocate for a “21st Century” variation of the law. “I think that separating out banks and investment banks right now under Glass-Steagall would have very big implications to the liquidity in the capital markets, and banks being able to perform necessary lending,” Mnuchin said.
  • Tax reform will be the first priority of the Trump administration when it comes to economic growth, Mnuchin said, adding that he will spearhead efforts to work with Congress on a tax-overhaul package. On substantive tax issues, Mnuchin alluded to President-elect Donald Trump’s skepticism about a border adjustable tax plan, saying the overall goal will be to “simplify personal taxes, deliver a middle-income tax cut, and make U.S. business taxes competitive with the rest of the world so that we can compete effectively and aggressively and create more jobs.” The tax-code rewrite should be scored using a dynamic model, Mnuchin said, but the plan should not add to the national deficit.
  • Mnuchin said Trump has not called for an across-the-board 35 percent tariff. “He hasn’t suggested a border tax,” Mnuchin said. “What he suggested is that, for certain companies that move jobs, that there may be repercussions for that.”
  • Trump’s criticisms of U.S. currency policy were not statements of opposition to the long-term strength of the U.S. dollar, according to Mnuchin. A strong dollar “may have had some negative impacts on our ability in trade,” Mnuchin said, but “the long-term strength, over long periods of time, is important.”
  • Mnuchin said he believes the Internal Revenue Service could beef up its customer service by improving technology and staffing. He said he was “surprised” that the agency’s “headcount had gone down quite dramatically,” and he is concerned with staffing levels at the IRS.
  • In an exchange with Sen. Mark Warner (D-Va.), Mnuchin ruled out an infusion of government cash to move Fannie Mae and Freddie Mac out of conservatorship: “I believe we can find a bipartisan fix for these so, on the one hand, there’s no giant bailout and on the other, we don’t run the risk of completely eliminating housing finance.”
  • Sen. Ben Cardin (D-Md.) pressed Mnuchin on whether he will investigate incoming White House adviser Anthony Scaramucci for possibly violating U.S. sanctions against Russia. Cardin and Sen. Elizabeth Warren (D-Mass.) sent Mnuchin a letter Thursday asking if, as treasury secretary, he would investigate Scaramucci’s dealings. The letter cited a Bloomberg News article published Jan. 17 that says Scaramucci met with the leader of a Russian fund that has been sanctioned by the Treasury Department. Mnuchin, who made his remarks before the letter was sent, said that he or his staff will “properly investigate” any claims sent by the Maryland Democrat.
Morning Consult