Published February 13, 2013
As Jack Lew appears today before the Senate Finance Committee, its members should ask themselves, is this the guy we want as Treasury Secretary and does America deserve Tim Geithner’s Mini-Me?
Remember, Tim Geithner? He was the former Treasury Secretary who forgot to pay $34,000 in Social Security and Medicare taxes before joining Treasury. Geithner is also the fellow who hired an inadequately documented immigrant housekeeper. By comparison, Lew’s sins are minor.
For his part, Lew only invested tens of thousands of dollars in an offshore investment vehicle in the hopes of maximizing his returns and minimizing his tax liability. Ironically, Lew lost money on the deal. Apparently, the White House is thinking that if Geithner’s belated tax payments and sloppy employment practices posed no barrier to being confirmed as Treasury Secretary, why should plunking money down somewhere in the Caribbean make a difference?
In reviewing the Lew nomination, the Finance Committee should also ask whether Obamanomics have succeeded? The most recent GDP numbers say otherwise.
In the Fourth Quarter of 2012, the economy actually shrank by one-tenth of a percent, the worst performance since the second quarter of 2009. The numbers are a reminder that the economy is a slog, at best, and that big government has its limits. While upper income America has benefited from near-record stock market levels, the Dow flirting with 14,000, economic recovery is more an abstract than a reality for most Americans.
The labor force participation rate, for example is 63.6 percent today, a drop of more than 2 points since Obama took office and the lowest in twelve years. To put things in perspective, America’s participation rate lags those of Australia, Canada and New Zealand, the Netherlands and Germany.
And now America is staring at Lew’s brainchild -- sequestration. As Bob Woodward tells the story, it was Lew who sold the sequester to Democratic Senate Majority Leader Harry Reid. Woodward recounts: “After reviewing all the interviews and the extensive material I have on this issue, it looks like President Obama told a whopper...”
Woodward laid out Lew’s pitch in graphic detail:
“‘We have an idea for a trigger,’ Lew said.
‘What’s the idea,’ Reid asked skeptically.
Reid bent down and put his head between his knees, almost as if he was going to throw up or was having a heart attack.”
Yet now the economy could be tipping back toward recession, and tepid growth may be morphing into more joblessness. For this reason alone, Senate Republicans should rise up against the Lew nomination.
Still, there is a stronger reason to oppose Lew at Treasury. Before joining this administration, Lew did a stint at Citibank, pocketed profits and then watched the bank teeter as it fed off a Treasury Department bailout. Lew himself was paid $1.1 million annually.
Specifically, Lew took over the Alternative Assets program at Citigroup in late 2007, which lost most of its assets as it bet on the downfall of the housing market -- just before Citigroup needed a $45 billion TARP bailout.
Heck, Mitt Romney made money for his partners.
It was all perfectly legal, of course, for Lew to get paid seven figures in effect, with taxpayers’ dollars. It just wasn’t good, and it is nothing that the U.S. Senate ought to endorse. Citi benefited from the public fisc, while the shops on Main Street shuttered their windows and closed their doors. And Lew watched.
During his reelection effort and Tuesday night’s State of the Union, the president’s mantra was the “middle class.” And yet his policy preferences lie elsewhere. Obama seems more motivated by redistribution than by growth; by social and legal activism, as opposed to sharing and driving the concerns of those who eat their midday meal out of a lunch bucket or at the workplace cafeteria.
Obama’s pick for Treasury Secretary signals a greater concern for the parochial interests of the financial industry than the needs of the entire nation.
It is time for Republican Senators to push back. A thorough grilling is in order. They should ask Lew if he was worth his pay at Citi and why he should be trusted with the economy and the taxpayers’ hard-earned dollars. Lew’s answers will be illuminating, if not enlightening.