U.S. Senate expected to confirm Mnuchin as Treasury secretary
By David Lawder WASHINGTON (Reuters) - The U.S. Senate is expected to confirm former banker and Hollywood financier Steven Mnuchin as Treasury secretary on Monday, installing the Trump administration's top official on tax reform, financial regulation and economic diplomacy. Confirmation would put a Goldman Sachs veteran in charge of the Treasury for the first time since the financial crisis pushed Wall Street out of favor in top Washington policy circles eight years ago. Democrats, who boycotted Mnuchin's approval by the Senate Finance Committee, are expected to vote against him. But no Republicans have declared opposition, setting the stage for a party-line 52-48 vote. The vote is set for around 7 p.m. EST (0000 GMT). 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, 54, will quickly need to build a core management team to handle such challenges. 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. 'WRONG MAN' Mnuchin, a second-generation Goldman Sachs banker who led the firm's mortgage bond trading but left the bank in 2002, has come under fire over his investor group's 2009 acquisition of another failed lender, IndyMac Bank, in a deal in which the Federal Deposit Insurance Corp agreed to absorb most of the losses on IndyMac foreclosures. The bank, rebranded as OneWest, subsequently foreclosed on more than 36,000 homeowners, drawing charges from Democrats and housing advocates that it was a "foreclosure machine." "Mr. Mnuchin’s business record tells us he was directly engaged in the predatory practices that led to our financial recession and destroyed the life savings of countless American working families," Democrat Richard Durbin said on Monday in Senate floor debate. "He’s the wrong man to be America’s Treasury secretary." Mnuchin grew OneWest into Southern California's largest lender and sold it for $3.4 billion in 2015. He has also helped finance Hollywood blockbusters such as "Avatar," "American Sniper" and this past weekend's box office champion, "The Lego Batman Movie," which took in $55.6 million. Republican Senator Orrin Hatch urged colleagues to approve Mnuchin because of his 30 years of broad finance experience. "Long story short, under any objective standard, Mr. Mnuchin has ample experience, credentials, and qualifications for this important position," Hatch said. (Reporting by David Lawder; Editing by Leslie Adler and Peter Cooney)
