[Congressional Record Volume 159, Number 28 (Wednesday, February 27, 2013)]
[Senate]
[Pages S892-S895]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]


       NOMINATION OF JACOB J. LEW TO BE SECRETARY OF THE TREASURY

  The PRESIDING OFFICER. Under the previous order, the Senate will now 
proceed to executive session to consider the following nomination, 
which the clerk will report.
  The bill clerk read the nomination of Jacob J. Lew, of New York, to 
be Secretary of the Treasury.
  The PRESIDING OFFICER. Under the previous order, there will be 8 
hours of debate equally divided in the usual form.
  The Senator from Montana.
  Mr. BAUCUS. Madam President, America's first Treasury Secretary, 
Alexander Hamilton, once said:

       The confidence of the people will easily be gained by a 
     good administration. This is the true touchstone.

  Hamilton's words take on new prominence today as we task our next 
Treasury Secretary to gain the trust of the American people and restore 
confidence in our Nation's economy.
  Nineteen of twenty-four Senators on the Senate Finance Committee 
voted yesterday on a bipartisan basis in favor of Jack Lew's 
nomination. Senators on both sides of the aisle spoke to his character 
and to his integrity. He is well qualified to be the Nation's next 
Treasury Secretary and will work to build the people's confidence and 
restore trust and certainty in both our government and in our economy. 
That will be his touchstone.
  I am certainly not alone in supporting Mr. Lew for the crucial role 
as the administration's top adviser on economic policy. Yesterday's 
overwhelming support for Mr. Lew came after one of the most thorough 
reviews of any candidate for the position--a process that included 
hours of interviews with Mr. Lew, the examination of 6 years' of tax 
records, and more than 700 questions for the record.
  In comparison, the committee asked Secretary Geithner 289 questions, 
Secretary Paulson 81 questions, and Secretary Snowe 75 questions. Mr. 
Lew has met personally with more than 40 Senators since being nominated 
for Treasury Secretary last month, answering questions and addressing 
any concerns. Throughout the confirmation process, Mr. Lew has been 
open and transparent. And, as I hope a vote in the Senate will soon 
show, he has gained the trust and the confidence of many in this 
Chamber.
  Mr. Lew has a long and distinguished career focused on public 
service, with experience in both academia and on Wall Street. Most 
recently, he was the White House Chief of Staff. He has also served as 
Budget Director of the Office of Management and Budget in the current 
administration and under President Clinton, where, I will note, he 
helped guide our Nation through one of the greatest periods of economic 
growth in America's history.
  Mr. Lew has also served in the U.S. Department of State as Deputy 
Secretary for Management and Resources. Mr. Lew has demonstrated time 
and again that he has the experience and knowledge to help get the 
Nation's economy back on track.
  We need a strong man at the helm to help tackle the many fiscal 
challenges facing our Nation, and I believe Jack Lew is that man. Just 
2 days from now, on March 1, across-the-board budget cuts known as the 
sequester will hit. Madam President, $85 billion in Federal spending 
will be sliced from thousands of programs, including Medicare, rural 
development, and early education. The nonpartisan Congressional

[[Page S893]]

Budget Office predicts the cuts could slow the economic recovery and 
result in another year of sluggish growth and high unemployment.
  I firmly believe we need to cut our debt and get our fiscal house in 
order. We know there are places to trim the fat. The American public 
knows that, certainly. But we need to take a scalpel to waste and 
inefficiency, not allow a hatchet to hack into American jobs.
  Our economy will be put to the test again in just weeks when the 
continuing resolution expires on March 27. We face the threat of a 
government shutdown. And on the horizon, the Federal borrowing limit 
will be reached in late May. That will require another extension of the 
debt ceiling.
  This is no way to run a country. Congress has been lurching from one 
fiscal showdown to the next, leaving the Nation with uncertainty. The 
only way we will be able to get past these budget battles is by working 
together. We all know that; we just have to start doing it--Republicans 
and Democrats, Members of the House and the Senate. We need to work 
together to put in place policies that create more jobs and spark 
economic growth.
  It is deeds, not words. We have enough words about working together. 
We have to actually start performing the deeds and working together.
  We will need to work with Mr. Lew and with the administration to put 
the Nation's economy back on track. We need to get off this roller 
coaster ride. It is like a yo-yo. There is no stability. There is no 
certainty. Going from one fiscal crisis to the next is undermining our 
economy.
  To give families and businesses certainty, we must agree on a 
balanced comprehensive plan to cut the debt that includes both revenue 
and spending cuts. The math will not work any other way. A long-term 
balanced plan will bridge the budget battles and make real progress 
toward solving our deficit problem. A balanced plan will also encourage 
businesses to invest, enable investors to return to the markets with 
confidence and, most importantly, put Americans back to work in a 
growing economy. That is the bottom line, more jobs, more good-paying 
jobs. We need more certainty and predictability so businesses may hire, 
expand, and people are able to get those good-paying jobs.
  Over the past 2 years I had a standing weekly call with Treasury 
Secretary Geithner. Every week we would go to the phone at 9:45 on 
Wednesdays, and about once a month we personally visited, would get 
together to go over issues. No matter where we were, what we were 
doing, we would always try to pick up the phone once a week to check 
in. I will tell you, it was on the minute, 9:45. Each of us knew the 
other was going to be there.
  Secretary Geithner and I grew to become friends and trust each other. 
Our families started to have dinner together, do things together. It is 
that trust and confidence that is so necessary and which is necessary 
to work together to make things happen. The conversations proved 
invaluable as we worked to overcome numerous economic challenges.
  I continue the outreach with Mr. Lew. I have been having a standing 
weekly call with him in anticipation he will soon be Treasury 
Secretary, and I am going to keep it up. I know he wants to also. It is 
very heartening, frankly. He has been very open and receptive and is 
eager to work with all of us here in the Congress to strengthen 
America's economy and create more jobs. He wants to do a good job. He 
knows he must talk with us and communicate with us in order to do that. 
Working together will be key to promoting economic growth and 
stability.
  If confirmed by the Senate, one of Mr. Lew's first acts as Treasury 
Secretary will be affixing his signature to all new Federal Reserve 
notes. I am not sure if people will be able to read his loopy 
signature. It is an inside joke that sometimes people have a hard time 
reading his handwriting. His signature will be on the Federal Reserve 
notes, and that loopy signature is described as looking more like a 
scratched-out slinky than a name. That is Mr. Lew. That is the way he 
signs. Mr. Lew promised the President that if confirmed he will work to 
make at least one letter legible in order to not deface America's 
currency, and we will hold him to that promise.
  In addition to the signature of America's Treasury Secretary, the 
front of every U.S. dollar bill has the seal of the United States 
Treasury. Look closely and you will see the symbols of balancing the 
scales to represent justice. There is a chevron containing 13 stars 
which represents the 13 original colonies. Underneath the emblem is a 
key which notes Treasury's official authority.
  If confirmed, we will be trusting Mr. Lew with the authority to 
oversee America's financial system and economic policy. He will play a 
critical role in the upcoming debates on priorities and spending cuts. 
We will be relying on him to ensure our government and finances are 
sound. We will be asking him to work with us to return some stability 
and confidence to our economy. We will be asking him to work with us to 
ensure the United States remains a great world power in this 
competitive global economy. It is a great responsibility he has, one 
which I believe Mr. Lew will live up to.
  Two hundred twenty-four years ago, this body, the U.S. Senate, 
approved the first Cabinet position for this young Nation when it 
unanimously approved Alexander Hamilton to become first Secretary of 
the Treasury. I ask my colleagues to confirm Mr. Lew today to be our 
Nation's 76th Treasury Secretary, to enable him to begin work helping 
to strengthen our economy.
  I yield the floor.
  The PRESIDING OFFICER. The Senator from Utah.
  Mr. HATCH. Madam President, I rise today to speak on the nomination 
of Mr. Jacob Lew to be Secretary of the Treasury. This is an important 
nomination. With our still-struggling economy and our growing fiscal 
problems, the next Treasury Secretary is going to have a lot on his 
plate. That being the case, we have worked on the Finance Committee to 
vet Mr. Lew, to examine his background credentials, and provide a 
complete picture of his qualifications for this post.
  I wish to offer a few comments about our review process, what we have 
learned, and the reservations about the nominee that remain with me now 
that this process is complete.
  Let me begin by saying a few words about the process itself. For well 
over a decade, the Finance Committee has followed a specified procedure 
when considering executive branch nominations. Sadly, that procedure 
was not followed in the case of Mr. Lew.
  After publicly announcing Mr. Lew's nomination, the White House 
waited 16 days before submitting any of his paperwork. That was an 
atypically long delay and, in addition to slowing the vetting process, 
it ensured Mr. Lew would not be confirmed in time to prevent a vacancy 
at the Treasury Department. A nomination hearing was scheduled to be 
held only 12 calendar days after the paperwork was received, even 
though the nominee had not answered all of the questions submitted to 
him.
  That is simply not the way our process has worked in the past, and 
the undue haste seriously hampered our ability to thoroughly examine 
Mr. Lew's background and his qualifications.
  Once the hearing was completed, as is customary, members of the 
Finance Committee submitted written questions for the record. Since 
that time, anonymous administration sources have decried the very 
notion that members of the Finance Committee had the audacity to ask 
hundreds of questions of Mr. Lew as part of their constitutional 
advice-and-consent responsibilities.

  Let me be clear. I will vigorously defend the right of any Member of 
Congress, regardless of party, to ask questions of nominees until they 
are satisfied they have obtained all the relevant information, and 
especially in the case of the Treasury Secretary, which is one of the 
most important assignments in our government today and always has been. 
If we go all the way back to the time of Alexander Hamilton, we know 
what he meant to this country by establishing the financial system of 
this country as the Secretary of the Treasury.
  In the case of Mr. Lew, there were several reasons why he ended up 
being asked numerous questions. First, the nomination process, as I 
mentioned, was abbreviated due to the haste of the administration. That 
meant the questions which through the course of ordinary business could 
have been resolved

[[Page S894]]

through discussion had to be asked in written form.
  Second, due to the general unresponsiveness of the administration to 
requests for information over the last few years, there is a pent-up 
demand for information and any semblance of responsiveness from the 
executive branch.
  Third, Mr. Lew's responses to many questions have been opaque. He has 
dissembled often. That being the case, it seemed the only way to get 
answers to straightforward questions was to continue to ask for 
clarifications in an attempt to break through the wall of obfuscation 
Mr. Lew had constructed. I have no doubt he could have answered most of 
these questions in much less numerical form than he did.
  Even after extensive questioning, there remain several serious 
concerns with Mr. Lew's background, his lack of responsiveness, and the 
evasive manner in which he answered many questions which were posed to 
him. Unfortunately, many of these concerns will go unaddressed, as Mr. 
Lew seems to be following the standard stonewalling strategy used by so 
many officials in the Obama administration.
  For years now administration officials have gone out of their way to 
be unresponsive to information requests from Congress, and that is 
simply unacceptable. Far too often, legitimate inquiries submitted to 
the executive branch go unanswered for months at a time. Requested 
deadlines are discarded. Indeed, in some instances information requests 
are ignored entirely. When responses are given, substantive and direct 
questions are given meaningless political answers. This has gone on far 
too long and it needs to stop.
  Mr. Lew, for his part, has promised me that he would be responsive to 
inquiries submitted by Members of Congress. While his answers to 
questions throughout the confirmation process give me reason to doubt 
his commitment to being responsive, I intend to hold him to that 
process moving forward. I believe he is an honorable man and I believe 
he will try to do this.
  I wish to take a few minutes to address some additional substantive 
concerns I have about Mr. Lew, his background, and his qualifications 
for this post.
  Let's consider Mr. Lew's Citigroup years. At Citigroup Mr. Lew was 
managing director and chief operating officer of two units, Global 
Wealth Management and Citigroup Alternative Investments. Mr. Lew 
claimed repeatedly while managing, directing, and operating those 
Citigroup units he essentially undertook back-room operations such as 
firing people, moving office space, integrating computer systems, 
eliminating redundancies, and things of that nature.
  Mr. Lew has also repeatedly stated he did not design financial 
products at Citigroup, make portfolio decisions or, in his words, opine 
on investments. In fact, when asked about investment products which 
were marketed and sold by the Citigroup units he oversaw, he could not 
remember any specific details.
  It needs to be noted some of those investments ended up generating 
enormous losses for investors. For example, funds called MAT, ASTA and 
Falcon, which were marketed, sold, and managed by the Citigroup units 
Mr. Lew oversaw ended up being the subject of lawsuits and successful 
arbitration claims, where success was based on investors convincing 
arbitrators the funds were misrepresented and mismanaged by Citigroup. 
The losses to investors from these funds numbered in the billions. In 
fact, some financial advisers at Citigroup protested internally the 
misrepresented securities caused enormous damage to Citi's reputation.
  One of Mr. Lew's bosses at Citigroup argued on behalf of the 
investors and against Citi's stock price and bottom line by saying the 
investors had been wronged and should be made whole. She was 
subsequently fired.
  From all information I have seen, Mr. Lew did not similarly stand up 
for wronged investors while on Wall Street. Perhaps it is because he 
did not know what was going on in the firm or at his firm. We don't 
really know. Despite the fact the funds in question led to probably the 
largest losses in the history of the units Mr. Lew oversaw, Mr. Lew 
claims that he cannot recall anything about them. If you ask anyone 
familiar with the funds and controversies surrounding them, they will 
say you would need to have been away on a desert island to not have 
heard about the problems that these funds faced. Yet, once again, Mr. 
Lew continues to deny having any memory of them.
  At the same time Mr. Lew claims while he was at Citigroup he learned 
a lot about financial markets and the dangers of risk. Indeed, he cited 
his experience at Citi as a qualification to be Treasury Secretary, 
even though he appears to have little recollection about any of the 
actual details of his work at that time, or at least his financial 
details.
  The question remains: How could Mr. Lew operate, manage, direct units 
and also be in charge of staffing decisions without having any 
knowledge of the financial products that were marketed, sold, and 
managed by these very same units? It remains unclear.
  Had there been a traditional vetting process, perhaps we could have 
gotten to the bottom of this mystery. As it is we are only left to 
speculate, as you can see.
  In addition to Mr. Lew's lack of knowledge about some of the high-
profile failures of the units he was overseeing, there are legitimate 
concerns relating to his compensation while at Citigroup.
  On January 29, 2009, President Obama made remarks about Wall Street, 
saying that institutions were ``teetering on collapse and they are 
asking for taxpayers to help sustain them.''
  The President also remarked on Wall Street bonuses at the time, 
saying:

       That is the height of irresponsibility. It is shameful.

  About Wall Street executives, he said:

       There will be a time for them to get bonuses. . . . Now is 
     not the time.

  Elsewhere he referred to Wall Street bonuses as ``obscene.''
  In late 2008 and early 2009, American taxpayers provided over $45 
billion--that is with a ``B''--in direct assistance to Citigroup and 
backed hundreds of billions of Citigroup assets. At the same time, in 
January 2009, Mr. Lew reportedly received over $940,000 in 
compensation, most of which was a bonus for work performed in 2008 when 
Citi was on the verge of collapse. The bonus came a day before Citi 
received yet another infusion of billions of dollars of taxpayer money 
to prop up the company. That was the day before Citigroup received the 
infusion of billions of dollars that he got that bonus.
  There is, at the very least, a contradiction between the President's 
rhetoric with regard to Wall Street and his decision to appoint Mr. Lew 
to be Treasury Secretary. However, rather than acknowledging any such 
contradiction, Mr. Lew has simply repeatedly told us all that his 
compensation was in line with what other similarly situated executives 
received.
  As I have said before, that justification seems a bit like saying: 
Gee, Dad, everyone was doing it. Unfortunately, that type of reasoning 
is exactly what led to the financial crisis.
  In addition, an employment agreement Mr. Lew had with Citigroup had a 
clause stating that his guaranteed incentive and retention award would 
not be paid upon his exit from Citigroup. However, there was an 
exception indicating that he would receive that compensation ``as a 
result of his acceptance of a full-time high-level position with the 
United States government or regulatory body.'' It remains unclear how 
this exception is consistent with President Obama's efforts to, in his 
own words, ``close the revolving door that carries special interest 
influence in and out of the government.''
  Of course, as has been widely reported during the course of our 
vetting process, we found that while he was at Citigroup, Mr. Lew 
actively chose to invest in a hedge fund that served as a venture 
capital-like fund that invested primarily overseas. The fund Mr. Lew 
invested in was based in the Cayman Islands at the infamous Ugland 
House that so many Democrats have viciously decried as a tax haven. In 
fact, in 2008, while campaigning for President, then-Senator Obama said 
that the Ugland House was ``either the biggest building in the world or 
the biggest tax scam in the world.''
  Throughout the 2012 campaign, President Obama repeatedly attacked 
Mitt Romney for having funds invested in the Caymans. If I recall it 
correctly, Mitt Romney's funds were in a trust he

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had no control over. In making such investments, Governor Romney was, 
in the words of the Obama campaign, betting against America. One can 
only wonder whether while serving as White House Chief of Staff for 
President Obama, Mr. Lew supported this line of attack.
  Once again, Mr. Lew has repeatedly refused to acknowledge any 
contradiction or hypocrisy between the President's rhetoric and his own 
actions, defending himself only by saying that this investment was done 
legally and transparently. I think the same probably could have been 
said about Governor Romney's investments as well, which were in a blind 
trust.
  The contrast between the President's past vilification of certain 
financial activities and individuals and Mr. Lew's very participation 
in those activities is striking. Yet we are now essentially being told 
that people should do as administration officials say, not as they did.
  In addition to concerns about Mr. Lew's record, I have serious 
disagreements with him when it comes to policy. For example, in 
response to written questions, Mr. Lew backtracked from the 
administration's previous positions on the need for entitlement reform. 
At one time, commonsense reforms, such as raising the Medicare 
eligibility age, were on the table for the Obama administration. Such 
ideas have apparently been discarded by the President, and Mr. Lew has 
made it clear he shares that discarding position.
  As a Social Security and Medicare trustee, the Treasury Secretary 
cannot simply wish away the problems with our entitlement programs. If 
he is confirmed, and I believe he will be, Mr. Lew will be tasked with 
addressing these problems. Sadly, it appears he will be just another 
voice in the Obama administration against taking meaningful action on 
entitlements and in favor of higher taxes--a repetitive theme at least 
all of us Republicans are getting very sick of. The use of the word 
``balance''--my gosh, what a perversion.
  I think I have made my concerns about the Lew nomination very soundly 
and very clear. That being said, I have always believed that whoever is 
President, including our current President, whom I like--any President, 
regardless of party--is owed a certain degree of deference when 
choosing people to work in his administration. Therefore, though I 
personally would have chosen a different person for this position, I 
intend to vote in favor of Mr. Lew's confirmation.
  Obviously, my vote in favor of Mr. Lew comes with no small amount of 
reservation, and I don't fault any of my colleagues for choosing to 
vote against him. Indeed, I share many of their same concerns. As I 
mentioned earlier, Mr. Lew has promised to be responsive to Members of 
Congress and their requests for information. I expect him to be 
responsive to the Senate Finance Committee and to the Republicans on 
the Senate Finance Committee as well as the Democrats.
  He has also promised to work in a bipartisan manner to address the 
problems facing our Nation. I believe Mr. Lew can, and hopefully will, 
do that. My hope is he does not view these promises as merely boxes 
checked off on the way to confirmation.
  If confirmed, Mr. Lew will be the Secretary of the Treasury of the 
United States and not the Secretary of the ``Obama treasury,'' although 
indirectly he will be. His first job is to the United States of 
America, and he might have to argue strenuously against some of the 
White House positions on financial matters and Treasury matters. He has 
to work for all the American people and not simply one political party.

  If he does those things, I will be willing to work with him all the 
way, and I have to say I expect him to. I expect him to be the 
honorable man he has told me he is and that I believe him to be; 
otherwise, I couldn't vote for him, especially under these 
circumstances.
  However, I have to say, if he fails to live up to the promises he has 
made, if he becomes just another Obama acolyte using his high-powered 
position in the administration to attack political opponents, I will 
personally be sorely disappointed and hurt by it. If that ends up being 
the case, he will have no greater adversary in the Senate. I don't want 
to be an adversary. I want to help him turn this country around. I want 
to be an asset to him up here, and I want him to be an asset to our 
country down there--and up here when he comes.
  Given my many reservations and concerns about Mr. Lew, I hope he and 
the President take note that I am bending over backward to display 
deference to the President's choice of Treasury Secretary. This 
gesture, I hope, will not be in vain.
  I can contrast Mr. Lew's positions when he worked in the Clinton 
administration. Many Republicans felt he was a straight-up guy, and I 
was one of them. I have suggested to him that we would like to see that 
type of person manage our Treasury rather than the partisan person we 
have seen in the last couple years. True, the position he had at the 
White House was a partisan position, and I make a great allowance for 
that.
  I personally like this man. I personally believe he is a good man. 
But I also believe sometimes we can get so caught up in politics that 
we don't do what we know we should do. I am hoping he will. I believe 
he will. If he does, he is going to have a lot of support from me.
  I wish to thank my chairman of the committee. He has always been very 
honorable and very straightforward. I understand a lot of the pressures 
he has had throughout this process, having been chairman a number of 
times myself in the Senate and experienced that stress. I want 
everybody to know this is an important position, this is an important 
human being, and I hope he lives up to all he has the capacity to live 
up to.
  I yield the floor.
  The PRESIDING OFFICER. The Senator from Montana.