As taxpayers file their returns this week, the agency that administers the tax system is under siege. An unusually large number of Treasury Department senior-level positions are vacant. It seems increasingly out of the loop on key issues within its purview. This downgrading of the second-ranking department in government of one reason for President Bush’s difficulty in pursuing his domestic agenda.
I worked at Treasury in 1989 during its 200th anniversary. Former President George H.W. Bush got a big laugh when he noted George Washington nominated Alexander Hamilton as secretary in the morning, saw him confirmed by the Senate that same afternoon and sworn into office that evening.
In 1789, a good chunk of the entire federal government resided at the Treasury Department. Over the years, many of its functions, such as the Coast Guard, have been stripped away and given to other departments. Just recently, the Department of Homeland Security was given several Treasury bureaus, including the Secret Service and the Customs Service.
Nevertheless, Treasury has always been the government’s premier economic agency. Generally, the Treasury secretary is an administration’s principal economic spokesman and the department attracts the best and brightest economic thinkers who wish to serve in government. This was especially so in the Clinton administration, which had very good Treasury talent.
The department’s expertise has been sorely missed in the Social Security reform debate. It is now clear the White House put insufficient resources into developing its proposal — such as it is, with no detailed plan yet on the table. As chairman of the Social Security system’s trustees, the Treasury secretary should have been at the forefront of developing this plan. Instead, he has only been a salesman.
Today, Treasury has fallen on hard times. The first secretary of the Bush administration, Paul O’Neill, was summarily fired for reasons that remain unclear. The current secretary, John Snow, was publicly humiliated last year when the White House let it be known a replacement was sought. Mr. Snow was retained only after the White House apparently couldn’t find what it wanted.
Now, most key sub-Cabinet positions are vacant and it seems the administration has great difficulty filling these positions. Among those vacant are the deputy secretary, two of the three undersecretaries, five assistant secretaries and a number of other key positions. In some cases, nominations are pending. In others, there is no one even in the pipeline.
This is really quite amazing, because normally Treasury has no trouble attracting very high-quality people for its senior positions. Those I worked with were very impressive, and many went on to greater things. Now it seems working there is significantly less attractive. There are several possible reasons:
(1) All power is centralized in the White House and the department has no real control over the issues for which it is responsible. According to the current International Economy magazine, White House chief of staff Andrew Card, deputy chief of staff Karl Rove, and Office of Management and Budget Director Josh Bolten make all economic policy decisions. The Treasury secretary is not involved.
(2) People are reluctant to work for a secretary who seems to have lost the president’s confidence and may be a short-timer.
(3) They don’t want to waste time giving speeches to high school classes in North Dakota or local businessmen in Montana, as Mr. Snow has been doing. He should use his limited time more effectively on things like tax compliance, stabilizing the dollar, fighting protectionism and financing huge budget and current-account deficits.
In other words, people want to work at Treasury to do what the department historically does — develop tax and financial policy, manage exchange rates and other international economic issues and be the administration’s principal liaison to Wall Street. Speaking at high schools and being forced to carry out policies Treasury had little say in developing just isn’t as interesting.
Also, nomination and confirmation recently has become an even longer and more burdensome process. One can easily understand why people would avoid working at Treasury.
But the Treasury Department exists for a reason. It fulfills a necessary governmental function even in a minimalist state. Some day we may have some sort of financial crisis that will demand full use of Treasury’s expertise. I just hope someone is there to answer the phone if that day comes.
Bruce Bartlett is senior fellow with the National Center for Policy Analysis and a nationally syndicated columnist.