President-elect Donald Trump is expected to name Steven Mnuchin as Secretary of the Treasury.
Mnuchin, 53, is a graduate of Yale University. His father was a banker and partner at Goldman Sachs. Mnuchin followed suit, earning tens of millions of dollars at Goldman Sachs over almost two decades. Following Goldman Sachs, Mnuchin worked with Soros Fund Management (yes, that Soros) and eventually founded his own hedge fund company, Dune Capital Management LP.
It turns out, Hollywood was also calling: Mnuchin began producing movies. In 2013, RatPac Entertainment merged with Mnuchin’s successful Dune Entertainment, which had backed blockbusters like The Devil Wears Prada and Avatar, to become RatPac-Dune Entertainment. The company has since produced a number of popular films including Gravity (2013), The Lego Movie (2014), and Magic Mike XXL (2015).
In 2009, a newly created bank called OneWest Bank, funded in part by Mnuchin’s hedge fund company, bought the failed bank IndyMac (a spinoff from troubled Countrywide Home Loans) from the government. The new chair of OneWest was Mnuchin. Five years later, OneWest was acquired by CIT for $3.4 billion, and Mnuchin remained at the helm as chair. The sale was said to be “a hugely profitable deal for the hedge-fund and private-equity investors that have owned the bank for five years.”
Mnuchin wasn’t done being a chair: in early 2016, Mnuchin was named finance chair of Trump’s 2016 presidential campaign. At the time, it was revealed that Trump had known Mnuchin for years.
Assuming that Mnuchin is appointed and approved to Trump’s Cabinet, what will he do exactly? Here’s what the job entails.
The Secretary of the Treasury is a member of the President’s Cabinet. The office dates back to the first Congress of the United States which created the Department of the Treasury to manage the finances for the new country. The Treasury Act (clever name, right?) was also known as HR-9 and began:
Be it enacted by the Senate and House of Representatives of the United States of America in Congress assembled, That there shall be a Department of Treasury, in which shall be the following officers, namely: a Secretary of the Treasury, to be deemed head of the department; a Comptroller, an Auditor, a Treasurer, a Register, and an Assistant to the Secretary of the Treasury, which assistant shall be appointed by the said Secretary.
The first person to hold the office of Secretary of Treasury was Alexander Hamilton. Hamilton, a champion of strong central government, was the principal economic advisor to President Washington (but you knew that already from the musical, right?) and a banker. Hamilton’s actions set a precedent for future Secretaries of the Treasury: today, the Secretary establishes economic and financial policy for the country – that includes tax policy.
The latter should be interesting since, in 2015, Trump proposed repealing the carried interest “for speculative partnerships that do not grow businesses or create jobs and are not risking their own capital, and reduces or eliminates other loopholes for the very rich and special interests.” He was, of course, talking about hedge fund managers – exactly what Mnuchin has done for years. Trump stuck to his guns on the issue during the second presidential debate, when he claimed that Hillary Clinton would not get rid of carried interest (she said she would). It will be interesting to see whether a Mnuchin appointment would change that position.
The Department of the Treasury also manages and produces the country’s money (meaning coins and currency), oversees revenue collection (meaning your taxes), and facilitates the borrowing of funds necessary to keep the country running. To do this, the Treasury has some special bureaus. They are:
- Alcohol and Tobacco Tax and Trade Bureau (TTB)
- Bureau of Engraving & Printing (BEP)
- Bureau of the Fiscal Service
- Community Development Financial Institution (CDFI) Fund
- Financial Crimes Enforcement Network (FinCEN)
- Inspector General
- Treasury Inspector General for Tax Administration (TIGTA)
- Internal Revenue Service (IRS)
- Office of the Comptroller of the Currency (OCC)
- U.S. Mint
(If you think I’m missing something, don’t panic: since 2003, the Bureaus of Alcohol, Tobacco and Firearms (ATF), Federal Law Enforcement Training Center (FLETC), U.S. Customs, and the United States Secret Service (USSS) are no longer Bureaus of the Department of the Treasury. For more on the Secret Service, check out this prior article.)
Having the IRS under his control in the current climate could be a challenge. Some members of Congress want to get rid of it altogether – but that could create a revenue problem since someone has to administer and collect those taxes. The reality is that the IRS is sticking around for a bit longer – like it or not – but that doesn’t mean that the head of the IRS will remain in place. Efforts to impeach IRS Commissioner John Koskinen are still in the works since a contentious September hearing didn’t result in a vote to bring charges – yet. If an impeachment vote moves forward in the next few weeks, it could make for a challenging tax season for the new Secretary.
If that sounds like a lot to be in charge of, it is. For the job, the Secretary of the Treasury gets paid $203,700 annually, more than those in Congress. And as a nod to how closely the Secretary of Treasury works with the President, he or she is fifth in line for the presidency (behind the Vice President, Speaker of the House of Representatives, President pro tempore of the Senate, and Secretary of State).
The President appoints the Secretary of the Treasury with the advice and consent of the Senate. There is no fixed term of service and Secretaries don’t always come and go together with the President who appointed him or her. The current Secretary of the Treasury under President Obama is Jacob Lew, who was officially confirmed on February 27, 2013.