BloombergWASHINGTON (Bloomberg) — Treasury Secretary nominee Steven Mnuchin said a strong dollar is important over the long term, noting that it’s currently “very, very strong,” and that avoiding U.S. default on the debt would be a top priority if he’s confirmed.
Mnuchin also defended his personal record as a founder of OneWest Bank amid the housing crisis, and pushed for tax reform as a key way to lift economic growth as promised by President-elect Donald Trump. Mnuchin’s comments at his Senate confirmation hearing on Thursday in Washington come after Trump rattled currency markets by saying the dollar was “too strong” in an interview with the Wall Street Journal.
“When the president-elect made a comment on the U.S. currency, it wasn’t meant to be a long-term comment,” Mnuchin said. “It was meant to be that perhaps in the short term the strength in the currency, as a result of free markets and people wanting to invest here, may have had some negative impacts on our ability in trade.”
The former Goldman Sachs Group Inc. executive-turned Hollywood movie financier fielded questions from both sides of the aisle about his business experience, including as head of hedge fund Dune Capital Management LP. While arguing that the United States needs to cut down on tax fraud and evasion, he asserted multiple times that his use of offshore accounts was to assist nonprofits and pensions, and “in no way did I use them whatsoever to avoid any U.S. taxes.”
Mnuchin, noting he has been “one of the chief architects” of Trump’s economic plans, said passing tax reform is a “major component” of the incoming administration’s growth-boosting policy stance. Trump, among changes to the tax system, has proposed cutting the corporate tax rate to 15 percent from 35 percent and reducing the number of tax brackets to three from seven.
While defending his personal tax record, Mnuchin said he has concerns about the efficiency of the Internal Revenue Service, pointing to low staffing levels, “lack of first-rate technology,” privacy and cyber-security risks and a need to improve customer service.
The Treasury nominee also took questions about the U.S. debt ceiling and how the incoming administration would handle negotiations with Congress on the issue.
“I would like us to raise the debt ceiling sooner rather than later,” he said, noting that he wanted to avoid the brinkmanship that has characterized the talks with lawmakers in recent years. The U.S. has an obligation to honor its debts, he said.
U.S. debt levels at about $20 trillion are too high, he said. “The way to reduce the debt is by economic growth and that will create the opportunity for us to pay down the debt.”
Mnuchin also was grilled on international sanctions, on which he said he would continue to enforce existing sanctions, including on Iran and Russia, and that he would encourage the president to use additional penalties where appropriate.