US Senate confirms Lew for Treasury

CRITICAL ROLE::At a time of US financial uncertainty over deficits and spending cuts, Jack Lew will be expected to use his extensive experience to steady the US economy

AP, Washington

Fri, Mar 01, 2013 - Page 15

The US Senate on Wednesday confirmed Jack Lew as US Secretary of the Treasury, affirming US President Barack Obama’s choice of a budget expert at a time when Congress and the White House are at odds over government spending cuts.

The vote was 71 to 26 to support the nomination. A total of 25 Republicans and independent Bernie Sanders of Vermont voted against Lew’s confirmation.

Lew, 57, had most recently served as Obama’s chief of staff. He succeeds Timothy Geithner, who completed a tumultuous four-year term in which he helped lead the administration’s response to the financial crisis and recession.

Lew was to be sworn in yesterday. He was scheduled take over just one day before automatic spending cuts were set to take effect.

He is likely to take part in any negotiations to reverse the cuts, and also in key budget talks this month to continue funding the government.

Lew began his government service in the 1980s as an aide to former House speaker Tip O’Neill. He brings nearly three decades of government service to the job, including two stints as White House budget director.

“Mr Lew is well qualified to be the nation’s next Treasury secretary,” said US Senate Finance Committee Chairman Max Baucus, a Democrat. “He has demonstrated time and again that he has the knowledge and expertise” to deal with the country’s budget problems.

However, Republican Senator Jeff Sessions, who opposed the nomination, said Lew as budget director was the architect of the Obama’s administration’s failed efforts to get soaring deficits under control.

In a statement issued after the vote, Obama said: “At this critical time for our economy and our country, there is no one more qualified for this position than Jack ... His reputation as a master of fiscal issues who can work with leaders on both sides of the aisle has already helped him succeed in some of the toughest jobs in Washington.”

During his confirmation hearing, Lew signaled no major policy changes. He advocated a balanced approach to reducing the long-term budget deficit through spending cuts and additional tax revenue.

He said he would be open to reforms to Medicare, but he did not spell out any details. Lew also said he would work with the committee on a rewrite of the tax code.

Beyond the budget, Lew is expected to hew closely to the positions Geithner struck on Europe’s debt crisis, the US’ relationship with China and the administration’s defense of the Dodd-Frank financial overhaul law.

Some Republicans voted against Lew because they were not satisfied with his answers about his previous employment with Citigroup Inc, including a brief time when he was chief operating officer for an investment unit in 2008.

The unit has been criticized for making risky investments that imploded during the financial crisis.

Lew received a bonus of nearly US$1 million in early 2009, a time when Citi was being bailed out by US taxpayers.

Lew told the panel that he did not make decisions about the investments being offered to clients. He said his bonus reflected compensation for his work.

Republican Senator Charles Grassley opposed Lew’s nomination. He cited questions about his time at Citi, as well as Lew’s compensation while working as chief operating officer at New York University.

“Mr Lew’s eagerness and skill in obtaining bonuses, severance payments, housing allowances and other perks raises concerns about whether he appreciates who pays the bills,” Grassley said.