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Will Vacancies at the Treasury Hinder Tax Reform

April 4, 2017

[Photo:  Steven Mnuchin, by Eduardo Munoz Alvarez / AFP]


Wall Street and the investing public have driven up market indices on the expectation that the Trump administration can deliver tax reform. In this post, Financialish discusses some of the obstacles to the process and prospects of achieving this goal.   


Donald Trump may prefer to operate with a small, close-knit group of advisors – particularly when he has relatives to help fill those ranks. However, as the NYTimes points out, it may prove difficult for his administration to push through a new tax code given the Treasury Department's skeletal leadership structure. Besides Treasury Secretary Steven Mnuchin, none of the 27 other political appointees who staff the department’s leadership have been confirmed – and that includes assistant secretary of tax policy, a critical post for spearheading a rewrite of the tax code.


“There are no people in the driver’s seat,” said Paul O’Neill, first Treasury secretary in President George W. Bush's administration. “I think it’s really a big problem.”


That’s not to say that tax reform is ‘dead in the water’. Yes, Mnuchin has had to do more heavy lifting than one might expect of a person in his position. But he’s been able to work with people like Gary Cohn, Trump’s top economic adviser, and several senior advisers who do not require congressional confirmations – such as:


  • Justin Muzinich is advising on tax policy. He’s the former president of an investment firm, Muzinich & Company, as well as national policy director for Jeb Bush’s presidential campaign.
  • Craig Phillips is advising on domestic policy – e.g., housing finance and financial regulation. He was with BlackRock and donated significant sums to Hillary Clinton’s campaign.