Department Of The Treasury

INTRODUCTION

The U.S. Treasury Department has a broad regulatory and policy reach. The next Administration should make major policy changes to: (1) reduce regulatory impediments to economic growth that reduce living standards and endanger pros- perity; (2) reduce regulatory compliance costs that increase prices and cost jobs; (3) promote fiscal responsibility; (4) promote the international competitiveness of U.S. businesses; and (5) better respect the American people’s due process and privacy rights.

These goals should be accomplished through: executive action (primar- ily treasury orders and treasury directives) and departmental reorganization; rulemakings; promoting constructive policies in Congress; actions in international organizations; and treaties. The primary subject matter focus of the incoming Administration’s Treasury Department should be:

• Tax policy and tax administration
• Fiscal responsibility
• Improved financial regulation
• Addressing the economic and financial aspects of the geopolitical threat posed by China and other hostile countries;
• Reform of the anti-money laundering and beneficial ownership reporting systems;
• Reversal of the racist “equity” agenda of the Biden Administration; and
• Reversal of the economically destructive and ineffective climate-related financial-risk agenda of the Biden Administration.

BIDEN ADMINISTRATION TREASURY DEPARTMENT

The Biden Administration Treasury Department has failed badly in achieving every one of the agency’s core objectives. The financial affairs of the nation have seldom been in worse condition, with the national debt expanding by more than $4 trillion in Biden’s first two years in office.

No President in modern times—perhaps ever—has been more fiscally reckless than has the Biden Administration. The soundness and stability of U.S. currency, the dollar, has been put at risk because of the worst inflation in four decades. American families have been made poorer by Biden’s economic strategy of taxing, spending, borrowing, regulating, and printing money. The average family has seen real annual earn- ings fall about $6,000 during the Biden Administration.1 In 2022, the average American’s 401(k) plan dropped in value from $130,700 to $103,900—more than 20 percent.2

Why has the Biden Administration failed to achieve virtually all components of its mission? Under the leadership of Treasury Secretary Janet Yellen, the depart- ment has made “equity” and “climate change” among its top five priorities. The next Administration must act decisively to curtail activities that fall outside Trea- sury’s mandate and primary mission. Treasury must refocus on its core missions of promoting economic growth, prosperity, and economic stability. For a clear statement of Treasury’s mission drift, one need look no further than Secretary Yellen’s introduction in the Treasury Department’s Fiscal Year 2022–2026 Strategic Plan:

We will have to address the structural problems that have plagued our economy for decades: the decline in labor force participation, income and racial inequality, and serious underinvestment in crucial public goods like childcare, education, and physical infrastructure. And then there are rising challenges, like climate change, which, left unchecked, will undermine every aspect of our economy from supply chains to the financial system.3 Treasury’s mission drift into a “woke” agenda, is exemplified in a comparison of Domestic Finance’s changed responsibilities from 2015 to 2023:

[2015] Domestic Finance works to preserve confidence in the U.S. Treasury securities market, effectively manage federal fiscal operations, strengthen financial institutions and markets, promote access to credit, and improve financial access and education in service of America’s long-term economic strength and stability.4

[2023] Domestic Finance works to support equitable and sustainable economic growth and financial stability through policies to increase the resilience of financial institutions and markets and financial wellbeing of consumers, and to increase access to credit for small businesses and low-to- moderate income communities.5

TREASURY DEPARTMENT ORGANIZATION

The Treasury Department is one of the few executive agencies recognized in the U.S. Constitution. It states:

No Money shall be drawn from the Treasury, but in Consequence of Appropri- ations made by Law; and a regular Statement and Account of the Receipts and Expenditures of all public Money shall be published from time to time.6

The Treasury Department was established by statute in 1789. Today, it is respon- sible for financing the federal government, promoting economic prosperity, and ensuring the financial security of the United States. In fiscal year 2022, Treasury received discretionary appropriations of approximately $16.4 billion.7 It also has highly variable “mandatory” expenses (COVID-related CARES Act spending, for example).

In fiscal year (FY) 2022, Treasury employed approximately 96,000 full-time employees, including approximately 81,000 at the Internal Revenue Service (IRS).8 Approximately four-fifths of Treasury’s discretionary funds are used for IRS operations. The remaining amounts are for its offices, bureaus, and interna- tional assistance programs.

Treasury is organized into various departmental offices,9 seven bureaus,10 and four inspectors general.11

Departmental Offices. Departmental offices are composed of divisions headed by under-secretaries and assistant secretaries who are primarily responsible for policy formulation and overall management of the Treasury Department.

Domestic Finance is run by the Under Secretary for Domestic Finance, to whom the assistant secretaries for financial markets, financial stability, financial institu- tions and the fiscal assistant secretary report. Additionally, the Financial Stability Oversight Council (FSOC) Secretariat and the Office of Financial Research report to the Under Secretary for Domestic Finance.

Terrorism and Financial Intelligence. Terrorism and Financial Intelligence (TFI)

was created in 2004 as part of the larger reorganization of the U.S. government to promote homeland security following the 9/11 terrorist attacks.

TFI is charged with the mission of disrupting international financial support for terrorists, weapons of mass destruction proliferation, narcotics trafficking, money laundering, and other national security threats. It is also responsible for implementing and enforcing economic sanctions programs and supporting the wider law enforcement commu- nity in investigating financial crimes. It is led by the Under Secretary for Terrorism and Financial Intelligence.

International Affairs protects and supports U.S. economic prosperity and national security by working to foster the most favorable external environment for sustained employment and economic growth in the United States. The most crucial functions of the Office of International Affairs relate to managing the U.S.–China Strategic Dialogue; representing U.S. interests in the World Bank, International Monetary Fund (IMF) and other multilateral development banks; and overseeing the Committee on Foreign Investment in the U.S. (CFIUS). It is led by the Under Secretary for International Affairs.

Tax Policy formulates and develops tax policies and programs and works with Congress to get them passed into law. It reviews and issues regulations drafted by attorneys from the IRS’s Office of Chief Counsel to administer the Internal Reve- nue Code, negotiates tax information exchange agreements with the tax authorities of foreign governments, participates in international tax organizations, and pro- vides economic and legal policy analysis for domestic and international tax policy decisions. This office also provides revenue estimates for the President’s budget. It is led by the Assistant Secretary for Tax Policy.

Economic Policy reports on current and prospective economic developments and assists in the determination of appropriate economic policies. This office is responsible for the review and analysis of domestic economic issues and develop- ments in financial markets.

The Treasurer of the United States is a statutory office that has been assigned varying duties in recent Administrations. In addition to performing public out- reach, treasurers have at times headed Treasury’s financial education program and overseen the U.S. Mint and Bureau of Engraving and Printing.

Four Inspectors General provide independent audits, investigations, and over- sight of Treasury and its programs: The Office of the Inspector General of the Department of Treasury; Treasury Inspector General for Tax Administration; Special Inspector General for the Troubled Asset Relief Program; and the Special Inspector General for Pandemic Recovery.

Treasury Bureaus

Seven Treasury Department bureaus comprise 98 percent of the Treasury work force and are responsible for carrying out specific operations assigned to the department.

The Alcohol and Tobacco Tax and Trade Bureau collects federal excise taxes on alcohol, tobacco, firearms, and ammunition, and is responsible for enforcing and administering laws covering the production, use, and distribution of alcohol products.

The Internal Revenue Service is the largest of the department’s bureaus, accounting for about 85 percent of Treasury’s personnel and about four-fifths of its appropriated budget. It administers and enforces U.S. tax laws.

The Bureau of Engraving and Printing develops and produces U.S. currency notes. The Financial Crimes Enforcement Network (FinCEN) is designed to protect the financial system from illicit use. It also administers the beneficial ownership reporting regime mandated by the Corporate Transparency Act.12

The Bureau of the Fiscal Service provides central payment services to federal program agencies, operates the U.S. government’s collections and deposit systems, provides government-wide accounting and reporting services, manages the collec- tion of delinquent debt owed to the U.S. government, borrows the money needed to operate the government through the sale of U.S. Treasury securities (including the state and local government series), and accounts for and services the public debt.

The United States Mint designs and mints U.S. circulating and bullion coins. The Office of the Comptroller of the Currency (OCC) charters, regulates, and supervises national banks and federal savings associations (thrifts) to ensure that they operate in a safe and sound manner, provide fair access to financial services, and comply with applicable laws and regulations. The OCC also supervises fed- eral branches and agencies of foreign banks and has rulemaking authority for all savings associations.