Senate Confirms Jack Lew as Treasury Secretary

The Senate has confirmed Jacob Lew as the next Secretary of the Treasury, succeeding Timothy Geithner.

Lew has served in the Obama administration most recently as White House Chief of Staff and previously as director of the Office of Management and Budget. In his new role, he will be the principal economic advisor to the President on domestic and international financial, economic, and tax issues, and will lead the Treasury in promoting a strong economy, fiscal sustainability and stability in the global financial system. Secretary Lew will also serve as chairman of the Financial Stability Oversight Council and the chairman of the boards and managing trustee of the Social Security and Medicare Trust Funds. 

Lew was confirmed Wednesday on a 71 to 26 vote. “I am pleased that the Senate took bipartisan action today to confirm Jack Lew as our nation’s next Treasury Secretary,” said President Obama in a statement.  “At this critical time for our economy and our country, there is no one more qualified for this position than Jack.  As my Chief of Staff, Jack was by my side as we confronted our nation’s toughest challenges. 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.  And I will continue to rely on his advice and sound judgment as we work to create good, middle-class jobs, provide more people with the skills those jobs require, and ensure every hardworking American can earn a decent living.”

Obama nominated Lew in January to succeed Geithner. Before serving as White House Chief of Staff and OMB director, Lew also held the OMB director position in President Clinton’s Cabinet from 1998 to 2001. Before returning to OMB in 2010, Lew first joined the Obama administration as Deputy Secretary of State for Management and Resources.

Before joining the State Department, Lew served as managing director and chief operating officer for two different Citigroup business units.  During the confirmation process, he was questioned by senators about his investments in several offshore funds operated by Citigroup that he sold at a loss in 2010 before being confirmed as OMB director. Prior to his stint at Citigroup, he was executive vice president and chief operating officer of New York University, where he was responsible for budget, finance, and operations, and served as a professor of public administration.

Several senators were critical of Lew and 26 voted against his confirmation, including Sen. Charles Grassley, R-Iowa, ranking member of the Senate Judiciary Committee and former chairman of the Senate Finance Committee, who had questioned Lew during his confirmation hearings.

“Mr. President, the problem we face with Mr. Lew’s nomination is that the Senate does not have answers to basic factual questions about Mr. Lew,” he said in a speech on the Senate floor Wednesday. “How can we make an informed choice on his nomination? For example, when Mr. Lew worked at tax-exempt New York University, he was given a subsidized $1.4 million mortgage. Now, Mr. Lew claims that he cannot remember the interest rate he paid on his $1.4 million mortgage that tax-exempt New York University gave him. Does this pass the laugh test? I asked Mr. Lew to provide details of the mortgage to Congress. He refused repeated requests for full details and documentation of this taxpayer-subsidized mortgage. The explanations he did provide were needlessly complex, making it almost impossible to understand the structure of his loan. What is he hiding? Why can’t Congress get a straight answer out of him? When Mr. Lew was executive vice president of NYU, the school received kickbacks on student loans from Citigroup. Then, Mr. Lew went to work for Citigroup. When I asked Mr. Lew if he had any conversations with Citigroup about these kickbacks while he was at NYU, he once again ‘could not recall.’ I asked for any documents related to his involvement in the kickbacks. He refused to search for them. Did those conversations occur? We don’t know. On Monday, The New York Times uncovered a $685,000 payment NYU gave Jack Lew on his way out the door. The New York Times called the payment ‘unusual.’ It’s a shame that Mr. Lew failed to provide these details as part of his confirmation process, leaving us to rely on the press to dig out the details. He told the Finance Committee that he received ‘severance pay’ from NYU but did not disclose the amount. The dictionary defines ‘severance pay’ as, ‘A sum of money usually based on length of employment for which an employee is eligible upon termination.’ Was Mr. Lew terminated? If so, why was he terminated? If not, was the severance package really a parting gift from the university? I don’t know the answers to those questions, because Mr. Lew was not forthcoming with answers.

"When it comes to questions about investments in the Cayman Islands, things get even less transparent," Grassley added. "Mr. Lew claims he did not know that Ugland House was a notorious tax haven. He claims he did not know that he had his money in the Cayman Islands. He claims he was not aware of any Citigroup Cayman Islands accounts. Again, it doesn’t pass the laugh test. President Obama and Chairman Baucus had highlighted Ugland House as a problem. When Mr. Lew was at Citigroup, for years, he signed documents that disclosed the fact that he was investing money in the Cayman Islands. His distinctive signature was just inches away from the words ‘Ugland House,’ ‘Grand Cayman’ and ‘Cayman Islands.’ He claims now that he did not know where his money was going.  We have so many more questions for Mr. Lew. “

From 2004 through 2008, Lew served on the board of directors of the Corporation for National and Community Service and chaired its Management, Administration, and Governance Committee.

As OMB Director from 1998 to 2001, Lew led the Administration budget team and served as a member of the National Security Council.  During his tenure at OMB, the U.S. budget operated at a surplus for three consecutive years.  Earlier, Lew served as OMB’s Deputy Director and was a member of the negotiating team that reached a bipartisan agreement to balance the budget. As Special Assistant to President Clinton from 1993 to 1994, Mr. Lew helped design Americorps, the national service program.

Lew began his career in Washington in 1973 as a legislative aide.  From 1979 to 1987, he was a principal domestic policy advisor to House Speaker Thomas P. O'Neill, Jr, when he served the House Democratic Steering and Policy Committee as Assistant Director and then Executive Director.  He was the Speaker’s liaison to the Greenspan Commission, which negotiated a bipartisan solution to extend the solvency of Social Security in 1983, and he was responsible for domestic and economic issues, including Medicare, budget, tax, trade, appropriations, and energy issues.

Before joining the Obama Administration, Lew co-chaired the Advisory Board for City Year New York and was on the boards of the Kaiser Family Foundation, the Center on Budget and Policy Priorities, the Brookings Institution Hamilton Project, and the Tobin Project.  He is a member of the Council on Foreign Relations, the National Academy of Social Insurance, and of the bar in Massachusetts and the District of Columbia.

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