Lew Wins Senate Confirmation to Lead Treasury

Posted February 27, 2013 at 4:10pm

The Senate confirmed Jacob J. Lew to be Treasury secretary Wednesday, despite opposition from some GOP senators who criticized Lew’s part in budget negotiations and questioned his personal finances and connections with Wall Street.

Senators voted 71-26 to confirm Lew, President Barack Obama’s choice to succeed former Treasury Secretary Timothy F. Geithner. The votes against Lew came from Republicans, including Minority Leader Mitch McConnell of Kentucky, and Vermont Independent Bernard Sanders.

Orrin G. Hatch of Utah, the ranking Republican on the Senate Finance panel, said his vote to confirm Lew came with “no small amount of reservation.”

“I have serious disagreements with [Lew] when it comes to policy,” explained Hatch, but “any president, really, regardless of party, is owed a certain degree of deference when choosing people to work in his administration.”

On the floor Wednesday, Hatch rehashed GOP condemnation of a Cayman Islands-based investment that Lew held between 2007 and 2010, and a compensation package that he was awarded as a senior official at Citigroup, which received a $45 billion federal bailout during the 2008 financial crisis. Hatch said Lew did not “stand up for wronged investors while on Wall Street.”

Sanders, meanwhile, reiterated his opposition to the nomination and said it was unpatriotic for Lew to “run to the Cayman Islands to try to avoid paying your fair share of taxes.” Sanders has argued that Lew is too closely aligned with Wall Street.

Finance Chairman Max Baucus, D-Mont., did not address those specific points but said Lew has been open and transparent throughout the confirmation process. “Senators on both sides of the aisle spoke to his character and his integrity,” Baucus said. “He’s well qualified to be the nation’s next Treasury secretary and equipped to restore confidence and trust in our economy. It will be his touchstone.” Baucus noted Lew’s experience both in academia, in a top post at New York University, and on Wall Street.

Lew most recently was Obama’s chief of staff and earlier served as the administration’s budget director, a position he also held in the 1990s under President Bill Clinton.

Once he is sworn in at Treasury, Lew would be the administration’s top adviser on economic policy, with a broad portfolio that encompasses the ongoing debates over spending priorities as well as fiscal policy, the housing sector and international economic affairs. His confirmation comes just as automatic, across-the-board spending cuts are scheduled to take effect March 1 under the sequester.

Senate leaders reached an agreement to consider the nomination shortly after Alabama Republican Jeff Sessions, one of Lew’s more vocal opponents, said Wednesday he would not block the vote.

Sessions, nonetheless, railed against Lew on the floor. Sessions, the top Republican on the Budget Committee, said a budget proposal Lew prepared was the “greatest financial misrepresentation” in the country’s history and a “complete fabrication” that is part of a “continued campaign to mislead the American people.”

Sessions said Lew’s budget plan would have added far more to the federal debt than the Obama administration claimed. Sessions sharply criticized his colleagues for supporting Lew’s nomination, saying the public deserves the truth about the nation’s finances.

“He is not entitled to sugar coat it, and he’s absolutely not entitled to totally misrepresent it,” Sessions said, calling Lew’s defense of the discrepancies “utterly unconnected to reality.”

Minority Whip John Cornyn, R-Texas, said he would vote against the nomination in part because Lew “would not commit to any limit on federal spending.”

In recent days, Republicans opposing Lew have pointed out reports from The New York Times that Lew received an unusual and undisclosed $685,000 severance payment when he left NYU in 2006 to take a job at Citigroup.

Charles E. Grassley, R-Iowa, has questioned large loans Lew received from the university, and he maintains that Lew and the Obama administration have not made an effort to be transparent in responding to requests for information.

Baucus said Tuesday that those reports should not affect Lew’s confirmation, adding that NYU “can do whatever it wants to do.”

Alan K. Ota contributed to this story.