What Does the Treasury Secretary Do Anyway?

Dagen McDowell
When a man's autograph is on every bill that winds up in your wallet, he clearly has some influence over your money and the country's economy.

Well, there's a new signature in town. The name: Henry “Hank” Paulson.

On Tuesday, President Bush tapped the Goldman Sachs chief to take over as head of the Treasury Department. One thing he needs to do in his new role is be a better cheerleader for the strong U.S. economy than was his predecessor, John Snow. But his role will be much bigger than being part of the pep squad.

To get a sense of what's in store for the Wall Street bigwig, take a brief tour of the Treasury Department's website. Basically, Paulson will have a hand in almost everything that involves money — from overseeing the Internal Revenue Service to printing our currency and postage stamps.

But Paulson could really make his mark when it comes to shaping domestic and international economic policy. He's expected to have a central role in setting the White House's financial agenda and he'll likely wield a lot more clout than the president's two previous Treasury Secretaries, John Snow and Paul O'Neill.

A strong hand and voice at the Treasury is needed in these uncertain times. Yes, the economy is still growing at an impressive clip, companies keep hiring and housing is holding up much better than many people predicted. However, the country is also facing plenty of problems: a widening trade gap with China and other nations, a dollar that's dropping, government spending that cannot keep growing at its recent pace, plus ballooning entitlement programs that threaten to swamp everything down the road.

The new Treasury secretary will undoubtedly be tackling these problems. He's got the background to do it, and not just because he was a linebacker on Dartmouth's football team. It's because he's spent more than three decades of his post-college career working in the financial world. As an investment banker, he has taken 70 trips to China since 1990.

Plus, if a full-blown financial crisis ever does come, Wall Street wants to hear from one of its own. What if — just if — the greenback suddenly takes a nosedive? Investors will need reassurance and guidance. Better to hear it from someone who understands how the global markets work, instead of from someone who worked on the railroad.

Bill Clinton's Treasury Secretary Robert Rubin was treated like a rock star, in part because of the way he steadied the markets during troublesome times in the 1990s. After back-to-back global market meltdowns in '97 and '98, Time Magazine put Rubin on its cover along with Alan Greenspan and Larry Summers.

Hank Paulson isn't a coverboy yet. But you can be sure that you'll see his name on the front of every five, ten and twenty.

Dagen McDowell is a business correspondent for FOX News Channel. She appears regularly on "Your World with Neil Cavuto," and "Cashin’ In."

Dagen McDowell joined the FOX Business Network (FBN) as an anchor in September 2007.