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February 26, 2015

Nominate A Qualified Undersecretary Of Domestic Finance Now

“The Obama administration urgently needs to nominate a qualified individual as Undersecretary for Domestic Finance at the Treasury Department. The Dodd-Frank financial reforms are under sustained and determined attack, and the lack of a confirmed Undersecretary is making it significantly harder for Treasury to effectively defend this important legislation. Failing to fill this Undersecretary position would constitute a serious mistake that jeopardizes a signature achievement of this presidency.

“In the continuing absence of an Undersecretary for Domestic Finance, the administration has recently displayed an inconsistent – or perhaps even incoherent – policy stance on financial sector issues. On the one hand, in mid-December, the White House agreed to rollback a significant part of Dodd-Frank – the so-called “swaps push-out,” which was shamefully attached at the behest of Citigroup to a must-pass government spending bill. The White House put up little resistance to this tactic and, at the critical moment, lobbied House Democrats to support the repeal of Section 716.

“Also in December, the White House pushed hard for the confirmation of a Wall Street executive, Antonio Weiss, as Undersecretary for Domestic Finance. (In mid-January, in the face of continuing legitimate questions about his qualifications, Mr. Weiss withdrew himself from consideration. He has become a Counselor to the Treasury Secretary, but this in no way addresses the need for a well-qualified Undersecretary and the equally pressing need for a consistent administration policy.)

“On the other hand, the President has recently issued veto threats to protect financial reform. His first threats were made during the opening two weeks of the new Congress as House Republicans pushed bills to de-regulate Wall Street and rollback financial reform. And, in his State of the Union address last Tuesday night, President Obama threatened to veto any legislative “unraveling” of “the new rules on Wall Street”.  In addition, the administration is also proposing a new targeted tax on the liabilities of large banks, motivated by the – well-founded – concern that these banks receive dangerous implicit subsidies from taxpayers.  And on January 9, 2015, Treasury Secretary Jack Lew published an article in the Washington Post strongly defending financial reform.”

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Read the full “The Baseline Scenario” article by Simon Johnson here

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