Jack Lew, President Obama’s pick to head the Treasury Department, faced several uncomfortable moments over his brief stint in the private sector, but he emerged from a Senate hearing Wednesday apparently still on track for a relatively quick confirmation by the full Senate in the coming weeks.
Mr. Lew, who headed the Office of Management and Budget under both President Clinton and President Obama, said during the three-hour Senate Finance Committee hearing that he was ready to work with both parties in Congress on an ambitious overhaul of the nation’s tax code, while warning against the short-term danger to the economy if looming across-the-board sequester spending cuts are implemented.
“A tax code with a wider base and lower rate is going to be one that makes it more attractive to invest in manufacturing,” Mr. Lew said. “It’s going to require bipartisan consensus, it’s going to require working together to do what’s the greatest good of the economy and American people, even if it does mean taking away the particular benefits that go in either one or other part of the economy.”
Echoing Mr. Obama. Mr. Lew said the pending sequester cuts to defense and nondefense government programs would be a “self-inflicted wound to the recovery and put far too many jobs and businesses at risk.”
Utah Sen. Orrin G. Hatch, the ranking Republican on the panel, pressed Mr. Lew on his record as a chief operating officer at Citibank in 2008, at the height of the global financial meltdown. Mr. Lew told lawmakers he was aware of, but had no direct responsibility for, some risky investments in his part of the company, even as the bank was getting the first installment of what would be $45 billion in taxpayer bailout money. Mr. Lew received a $940,000 bonus at Citibank the day before the financial giant was forced to accept the bailout funds.
“I was not in the business of making investment decisions,” he said.
But Mr. Hatch noted that Mr. Lew was “responsible for operational activities and management with little or no knowledge of investment activities of the very units that you staffed. I find that somewhat confusing.” But Mr. Hatch later said the hearing’s end he thought, overall, Mr. Lew had “done very well.”
Sen. Chuck Grassley, Iowa Republican, also asked about reports in The Washington Times and other publications about Mr. Lew’s $56,000 investment in an offshore fund in the Cayman Islands, a location criticized by Mr. Obama among others as a place to shelter income from the reach of U.S. tax authorities.
Mr. Lew said he sold the investment three years ago at a loss and had paid all applicable taxes on the investment, but his answers may not have satisfied Mr. Grassley.
Mr. Lew’s “unfamiliarity” with the details of his investment “does not build confidence in his knowledge of the tax code, his ability to enforce it, or his ability to help shape the broad tax reform everyone agrees we need,” Mr. Grassley said in a statement after the hearing. “I’ll continue to reserve judgment on whether to support the nomination until Mr. Lew answers written questions for the record … but I have serious doubts about whether the president made the right choice.”
Mr. Lew even faced questions from GOP lawmakers on the White House’s handling of the deadly Sept. 11 attack on the U.S. Consulate in Benghazi, Libya. Mr. Lew was Mr. Obama’s chief of staff and was with him for much of the night as information trickled in on the seven-hour attack.
This article is based in part on wire service reports.
• Jim McElhatton can be reached at jmcelhatton@washingtontimes.com.
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