Lew questioned about his Citigroup stint
Jacob Lew, President Barack Obama's choice to be treasury secretary, testifies on Capitol Hill in Washington, Wednesday, Feb. 13, 2013, before the Senate Finance Committee's confirmation hearing. / AP Photo/J. Scott Applewhite
This post was updated at 3:05 p.m. ET
At his confirmation hearing before the Senate Finance Committee today, while Treasury Secretary nominee Jack Lew was praised by Democrats and Republicans alike as a qualified, capable selection to head the Treasury Department, several Republicans raised questions about Lew's time as a public servant and in the private sector.
At issue were Lew's role in fiscal policy during President Obama's first term and his time at Wall Street giant Citigroup after the 2008 bank bailout. The committee's top Republican, Sen. Orrin Hatch, R-Utah, praised Lew as "well-versed in budget matters," but noted, "those are not the main responsibilities of the treasury secretary."
He took issue with Lew's "opinion that we need higher taxes...to address the nation's fiscal problems," but declared himself "pleased with some of the president's remarks" on entitlements during last night's State of the Union, asking Lew to concentrate more strongly on entitlement reform in order to trim the deficit.
Hatch also fired a shot at Lew's time at Wall Street bank Citigroup, saying, "We know very little about your knowledge of the activities and practices of the units for which you were chief operating officer."
The Utah republican explained that those units were involved in "the marketing and sales of risky investments" and that Lew was "well-compensated, including times when Citigroup was being propped up by American taxpayers."
"If you are confirmed as treasury secretary" Hatch noted, "you will be responsible for overseeing the implementation of regulations directed at some of the very practices undertaken by the Citi units that you once operated."
Sen. Chuck Grassley, R-Iowa, took up Hatch's qualms, asking Lew to "explain why it might be morally acceptable to take close to a million dollars out of a company that was functionally insolvent and about to receive a billion dollars of taxpayer support."
Lew responded, "I was compensated in a manner consistent with other people who did the kind of work that I did in the industry," adding, "I'll leave for others to judge."
Grassley also raised concerns about Lew's investment in a fund located at a Cayman Islands address that Mr. Obama described as the "largest tax scam in the world," asking Lew whether he thought the president's description was accurate.
"I'm happy to answer questions about my own investments," Lew said. "I reported all income that I earned, I paid all taxes due, I very strongly believe that we should have tax policies that make it difficult if not impossible to shelter income from taxation."
Grassley was unconvinced: "There's a certain hypocrisy in what the president says about other taxpayers and then your appointment."
Despite the occasionally pointed questions, the showdown between Senate Republicans and Lew largely failed to generate the kind of heat some had been expecting. The hearing was abidingly polite, free of the kind of strident disagreement that dominated the confirmation hearings for defense secretary nominee Chuck Hagel and CIA director nominee John Brennan.
Senate Finance Committee chairman Sen. Max Baucus, D-Mont., convened the hearing by praising Lew's "long and distinguished career."
"There is no doubt he is experienced," Baucus said, hailing Lew's stint as director of the Office of Management and Budget under former President Bill Clinton, when "He helped guide our nation through one of the greatest periods of economic growth in American history."
Baucus, noting that "the state of the economy is still fragile" despite progress in Mr. Obama's first term, asked Lew to "help return predictability and stability to our nation's capital."
"We have to get off this rollercoaster of crisis after crisis," Baucus declared.
Introducing the nominee, Sen. Chuck Schumer praised Lew as "one of the most honorable, honest, and decent men in Washington."
And former Sen. Pete Domenici, R-N.M., agreed, saying, ""I cannot think of anybody more qualified or more ready for this job than Jack Lew," he said.
Domenici praised Lew's role in negotiating a Social Security Reform package with President Ronald Reagan in the 1980s as "something real, not something just to talk about."
Lew, when his turn to speak arrived, thanked President Obama for his "continued faith in me" and said that, as a result of the economic recovery measures taken over the last four years, America is "in a better position today."
Going forward, our "top priority is to strengthen the recovery by fostering private sector job creation and economic growth," Lew said, adding that we must also "put our nation back on a path of fiscal sustainability."
He also pledged to be a bridge-builder, not a bomb-thrower: "Forging bipartisan consensus is not an abstract idea for me - it is the fundamental thread that spans my professional life."
"The things that divide Washington right now are not as insurmountable as they might look," he said. "We all share the same goals."
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