What Does The Treasury Secretary Do?

Treasury Secretary Steve Mnuchin (Official Photo)

What is the role of the Treasury Secretary?

The Secretary of the Treasury is the top executive of the Department of Treasury, which consists of both operating bureaus and departmental offices. The offices primarily make policy and manage the Department. The bureaus carry out the specific operations assigned to the Department: managing federal finances; collecting revenues and paying federal bills; minting currency and coinage; managing public debt; supervising national banking institutions; advising on matters of domestic and international financial matters; enforcing federal finance and tax laws, and investigating and prosecuting tax evaders and counterfeiters.

Where the Secretary of the Treasury and the Department intersect most often with American civilians is in the collection of revenue (everyone’s federal taxes, both individual and business), and in paying federal bills and debts (including paying anyone entitled to salary or other revenue from the federal government such as bond interest). The Secretary of the Treasury oversees the Internal Revenue Service (IRS).

The Secretary of the Treasury is responsible for ensuring that the Department fulfills its assigned operations. Secretary of the Treasury is a cabinet-level position, and the Secretary is the major policy advisor to the president, recommending broad fiscal, economic and tax policies. The Secretary also plays a crucial role in advancing presidential economic agendas, including promoting the passage of necessary legislative acts.

The Secretary is responsible for judicially using economic tools to combat terrorist financing and other economic threats to the United States and its allies. As the chief financial officer of the U.S. government, the Secretary of the Treasury is a member of the President’s National Economic Council; Chairman and Managing Trustee of the Social Security and Medicare Boards; and U.S. Governor of numerous multinational banks for reconstruction and development in all global regions.

History of the Treasury Secretary

The Department of Treasury was formally established by the First Session of Congress in 1789. Yet even prior to that, many functions were already being performed out of necessity: the Continental Congress had to finance the American Revolution without any power to collect taxes. It issued paper Continental Dollars as bills of credit, to be redeemed in coin once the Revolution succeeded. Congress issued $2 million in bills in June 1775. In July 1775, the Second Continental Congress assigned the administration of the government’s finances to Joint Continental Treasurers George Clymer and Michael Hillegas. In 1776, the Congress established a Treasury Office of Accounts comprised of five persons to oversee the Treasury, in order to ensure appropriate tending of its growing debt.

Once the Declaration of Independence was signed, the newly declared republic had some ability as a sovereign nation to secure international loans. Nevertheless, by 1781, the paper Continental Dollars had become so devalued as to be worthless. Robert Morris—a man of known financial acumen—was made Superintendent of Finance, and managed to restore stability, following which a Treasury Board of three Commissioners continued to oversee finances until 1789.

On September 2, 1789, the First Congress of the United States created the Department of Treasury, headed by the first Secretary of the Treasury: Alexander Hamilton (1789 - 1795). It was Hamilton’s job to resolve the nation’s war debt. He insisted the war debt be paid dollar-for-dollar to revitalize the country’s credit. Anticipating that industry and trade would develop quickly domestically, Hamilton suggested customs duties be enacted. His positive impact on the development of the national finances and economy was recognized by placing his portrait on the U.S. $10 bill.

Over time, the Department’s functions have expanded and contracted as appropriate. Treasury functions expanded with the Civil War, when loss of Southern state customs revenues led to the establishment of the Bureau of Internal Revenue, the printing of paper currency, and the creation of the National Banking System. Growth in global trade after World War I, and U.S. involvement in solving the many global problems after World War II, required the Department of Treasury to take an active role in the establishment of the International Monetary Fund and the World Bank, as well as support U.S. leadership in global economic development.

Functions originally assigned to the Treasury Department have also been moved to more appropriate places over time: the Postal Service transferred out in 1829. The General Land Office was part of the Treasury Department from 1812 until it was transferred to the Department of the Interior in 1849. Oversight of commercial operations was assigned to the Treasury until the Department of Commerce and Labor was established in 1903. In 1939, the 1929-established Bureau of the Budget was transferred from the Treasury to the President, where it became the Office of Management and Budget, a cabinet-level agency, now responsible for oversight of the spending of funds. The U.S. Coast Guard, the oldest armed marine service in the nation, remained part of the Department of the Treasury until transferral in 1967—to the Department of Transportation.

Who is the current Treasury Secretary?

The current Secretary of the Treasury is Steve Mnuchin. Born and raised in New York City, Mnuchin earned a Bachelor’s degree in economics from Yale University in 1985. After a traineeship at Salomon Brothers, Mnuchin worked at The Goldman Sachs Group, Inc. for 17 years, gaining partnership and becoming the head of mortgages, money markets and governmental bonds. Ultimately he became Goldman Sachs’ Chief Information Officer. He was still a partner when Goldman Sachs went public in 1999, cashed in his stake, and left the partnership.

Mnuchin then joined a hedge fund founded by a former Yale roommate, which he left to become CEO of a hedge fund supported by George Soros. Afterward, Mnuchin founded hedge fund Dune Capital Management, with two Goldman Sachs partners. Mnuchin served as Founder, Chairman and CEO. He also financed some relatively well-known movies such as Avatar and Mad Max: Fury Road. Then Mnuchin founded OneWest Bank Group LLC. He served as OneWest Bank’s Chairman and CEO until it was sold to CIT Group Inc. OneWest Bank developed a somewhat negative reputation because of its eagerness to foreclose on New York families, engaging in behavior that a judge described as “harsh, repugnant, shocking and repulsive.”

Prior to his confirmation as Secretary of the Treasury, Mnuchin served as Finance Chairman for Donald J. Trump for President, traveling extensively with Trump. He was a Senior Economic Advisor to Trump in developing his economic agenda. As Secretary of the Treasury, Mnuchin is a member of the National Security Council, and has been crucial in advancing the Trump Administration’s economic agenda, including advocating for the passage and implementation of the Tax Cuts and Jobs Act. He leads regulatory reform efforts at the Department of Treasury, and is chair of the Committee on Foreign Investment in the United States (CFIUS). He has also been criticized for refusing to release the President’s tax returns as required as Secretary of the Treasury, and for his involvement in matters at the center of Special Counsel Robert Mueller’s investigation into Russia. Mnuchin decided to significantly lessen congressionally approved sanctions against Russian oligarch Oleg Deripaska, and reportedly misled Congress about the terms between the Department of Treasury and Deripaska to allow the sanction cutting. He also failed to disclose a conflict of interest in the matter due to his direct business connection to a Deripaska firm top shareholder.

List of previous Treasury Secretaries

The Rantt Rundown

The Secretary of the Treasury wields a great deal of power within a president’s administration, acting as major presidential advisor and recommending broad fiscal, economic and tax policies. The current Secretary of the Treasury, Stephen Mnuchin, has been with Donald Trump since his campaign days and has proven doggedly loyal to Trump, perhaps even to the point of violating the law in some actions. Not only does the Secretary have sufficient influence to affect national and international economics, however, he also has sufficient influence to affect American citizens’ individual economies through the Treasury Department’s oversight of the IRS.

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