Senate confirms former banker Mnuchin as Treasury Secretary - KWWL - Eastern Iowa Breaking News, Weather, Closings

Senate confirms former banker Mnuchin as Treasury Secretary

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WASHINGTON (AP) -- A bitterly divided Senate on Monday confirmed Steven Mnuchin as treasury secretary despite strong objections by Democrats that the former banker ran a "foreclosure machine" when he headed OneWest Bank.

Republicans said Mnuchin's long tenure in finance makes him qualified to run the department, which will play a major role in developing economic policy under President Donald Trump.

"He has experience managing large and complicated private-sector enterprises and in negotiating difficult compromises and making tough decisions - and being accountable for those decisions," said Sen. Orrin Hatch, R-Utah, chairman of the Finance Committee.

Votes on President Donald Trump's Cabinet picks have exposed deep partisan divisions in the Republican-controlled Senate, with many of the nominees approved by mostly party-line votes.

The vote on Mnuchin followed the same pattern. He was confirmed by a mostly party-line vote of 53-47. Democratic Sen. Joe Manchin of West Virginia joined the Republicans.

The Senate also headed toward a vote on a less divisive nominee, physician David Shulkin, to be secretary of the Department of Veterans Affairs.

Like others in Trump's Cabinet, Mnuchin is a wealthy businessman. He is a former top executive at Goldman Sachs and served as finance chairman for Trump's presidential campaign.

As Treasury secretary, Mnuchin is expected to play a key role in Republican efforts to overhaul the nation's tax code for the first time in three decades. Trump has promised to unveil a proposal in the coming weeks.

Mnuchin will also be in charge of imposing economic sanctions on foreign governments and individuals, including Russia.

Senate Majority Leader Mitch McConnell, R-Ky., said Mnuchin "is smart, he's capable, and he's got impressive private-sector experience."

Democrats complained that Mnuchin made much of his fortune by foreclosing on families during the financial crisis.

In 2009, Mnuchin assembled a group of investors to buy the failed IndyMac bank, whose collapse the year before was the second biggest bank failure of the financial crisis. He renamed it OneWest and turned it around, selling it for a handsome profit in 2014.

"Mr. Mnuchin has made his career profiting from the misfortunes of working people," said Sen. Debbie Stabenow, D-Mich. "OneWest was notorious for taking an especially aggressive role in foreclosing on struggling homeowners."

Sen. Sheldon Whitehouse, D-R.I., said, "I simply cannot forgive somebody who took a look at that banking crisis and took a look at the pain that Wall Street had sent in a wave across all of America, and thought, 'Ah, there's a great new way to make money, foreclosing on people.'"

Rep. Maxine Waters of California, the top Democrat on the House Financial Services Committee, called Mnuchin "the foreclosure king."

Mnuchin has said he had worked hard during the financial crisis to assist homeowners with refinancing so that they could remain in their homes.

He said his bank had extended more than 100,000 loan modifications to borrowers.

But several Democratic senators raised examples of residents in their states who they said were not treated fairly by OneWest, including elderly homeowners and members of the military.

Democrats also complained that Mnuchin failed to disclose nearly $100 million in assets on forms he filed with the Senate Finance Committee.

In his testimony before the committee, Mnuchin defended his actions while heading OneWest. He said he had worked hard during the financial crisis to assist homeowners with refinancing so that they could remain in their homes.

He told the committee that his bank had extended more than 100,000 loan modifications to borrowers.

Mnuchin called his failure to disclose assets an oversight. After meeting with committee staff Mnuchin amended his disclosure forms and also disclosed his position as director of Dune Capital International in the Cayman Islands, a well-known offshore tax haven.

When pressed by Democrats to explain the omissions, Mnuchin said: "I did not use a Cayman Island entity in any way to avoid taxes for myself. There was no benefit to me."

The Treasury Department is responsible for a wide range of activities, including advising the president on economic and financial issues. The department oversees the IRS, negotiates tax treaties with other countries, imposes economic sanctions against foreign governments and individuals, and targets the financial networks of terrorist groups and drug cartels.

The department also issues the bonds that finance the government's deficit spending.

Republicans and Democrats praised Shulkin, who is charged with delivering on Trump's campaign promises to fix long-standing problems at Veterans Affairs.

Shulkin, 57, a former Obama administration official, has been the VA's top health official since 2015. He secured the backing of Senate Democrats after pledging at his confirmation hearing to always protect veterans' interests, even if it meant disagreeing at times with Trump.

He has ruled out fully privatizing the agency and says wide-scale firings of VA employees are unnecessary, describing the VA workforce as "the best in health care."

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Senator Chuck Grassley issued the following statement after the confirmation:

“As the author of the provisions improving the incentives for whistleblowers to come forward about large dollar tax fraud, I was glad to receive a commitment from Mr. Mnuchin in support of a strong IRS whistleblower function.   Whistleblowers have helped the IRS recover $3.4 billion that otherwise would have been lost to fraud.  Cracking down on big dollar tax fraud is a matter of fairness to the vast majority of taxpayers who pay what they owe.  The IRS has made progress in working with whistleblowers, but there’s more work to be done.

“Mr. Mnuchin said he supported a smooth transition for and certainty of the congressionally established phase-out of the wind energy production tax credit.  These are necessary for a fast-growing industry that supports numerous jobs in Iowa and elsewhere around the country.  The industry needs to be able to maintain its successful growth even as its tax credit phases out.  

  “As Treasury secretary, Mr. Mnuchin will play a key role in what I hope will be comprehensive tax reform for individuals and businesses.  Tax fairness and keeping the United States competitive with our global counterparts are critical to economic growth and job creation.  I’ve often said that a major undertaking like tax reform requires the President’s use of his bully pulpit to rally support behind a plan from Congress and the American people.  There’s an opportunity to do that with a new administration.  The Treasury secretary will be critical in offering technical expertise and working with Congress on tax reform.”

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Senator Joni Ernst issued her own statement, as well:

“Mr. Mnuchin brings years of extensive private sector experience and executive-level leadership to the Treasury Department. Such skills will be critical as we work to create a healthier economic environment for our businesses, community banks, and hard-working families across the nation.

 “I look forward to working with my colleagues in Congress and this new administration to move forward on tax and regulatory reform as a means to help grow our economy and remove some of the burdens placed on many of Iowa’s rural communities, families and small businesses.”

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