Hearings Begin on Treasury Nominee

In his opening remarks, Mr. Lew stressed his longstanding qualifications on budget issues and his ability to work with Republicans.

“Working across the aisle while serving under President Clinton, I helped negotiate the groundbreaking agreement with Congress to balance the federal budget,” he said. “And as budget director, I oversaw three budget surpluses in a row even as we pursued policies to speed economic growth and create jobs.”

He added that he has been involved in “almost every major bipartisan budget agreement over the last 30 years,” and that “the things that divide Washington right now are not as insurmountable as they might look.”

But as one of Mr. Obama’s main budget negotiators in the past few years, Mr. Lew has at times clashed with Republicans, particularly in the House. Former Treasury Secretary Timothy F. Geithner, not Mr. Lew, acted as a main negotiator during the talks over the automatic tax increases and spending cuts, the so-called fiscal cliff, that Congress cut a deal to avoid last month.

Mr. Lew, a longtime Democratic aide and recently departed White House chief of staff, is expected to win the support of the committee and ultimately the confirmation of the whole Senate. As a former State Department aide and budget director, Mr. Lew has already won Senate confirmation twice during the Obama administration.

But Republicans have promised to grill Mr. Lew over the government’s trillion-dollar deficits, the White House’s spending plans and the sluggish economy. They have also raised questions about his short tenure at Citigroup, where he received a $940,000 bonus before leaving to return to public service.

At the outset, Senator Orrin G. Hatch, Republican of Utah, stressed that the Treasury secretary’s responsibilities go far beyond the budget, and said he wanted to know more about Mr. Lew’s expertise in and thoughts about the financial system and its regulation. “We know very little about your knowledge of the activities and practices” at Citigroup, Mr. Hatch said.

In his opening remarks, Mr. Lew mentioned his financial markets experience just once. “During my time at Citi, I was part of the senior management team trying to drive organizational change at one of our nation’s largest banks,” he said.

In a statement before the hearing, Senator Max Baucus, Democrat of Montana and chairman of the Finance Committee, said: “Mr. Lew has been confirmed by the Senate three times already. I don’t expect there to be any reason why he should not be confirmed this time around as well. We have a tremendous amount of work to do over the next couple months to get our fiscal house in order.”

Mr. Lew — known as a low-key and bookish budget expert — would face a daunting set of issues as soon as he took over at the Treasury Department, if confirmed. In March, the so-called sequester, a trillion dollars in automatic spending cuts that Democrats and many Republicans hope to delay or avoid, is due to take effect. Soon after, the continuing resolution financing the government will run out, raising the specter of a government shutdown.

In addition to Mr. Lew’s time at Citigroup, where he worked in an alternative-investments unit that at one point profited from the housing collapse, Republicans have also brought up a Cayman Islands investment that Mr. Lew properly disclosed, and lost money on when he returned to government service.

“I’m hopeful that Mr. Lew will answer some remaining questions that I have,” Mr. Hatch said. “I will not decide whether or not to support his nomination until those questions are answered. Lest no one forget, Treasury secretary is no small position and the people of this country need to know Mr. Lew is qualified and able to perform the job.”

Democrats have largely dismissed the concerns about Mr. Lew’s tenure at Citigroup.

“Jack Lew paid all of his taxes and reported all of the income, gains and losses from the investment on his tax returns,” said Eric Schultz, a White House spokesman. “There are no new facts that provide a basis for senators to reach a different conclusion about Mr. Lew’s nomination than they reached twice before in this administration.”

Some other senators — including Jeff Sessions, Republican of Alabama, and Bernard Sanders, independent of Vermont — have indicated that they might not support Mr. Lew. But it seemed unlikely that he would face a filibuster that might delay his confirmation or end his candidacy.

Article source: http://www.nytimes.com/2013/02/14/us/politics/hearings-begin-on-treasury-nominee.html?partner=rss&emc=rss