Senate Approves Treasury Nominees for Senior Tax and International Affairs Posts

By Ian Talley Features Dow Jones Newswires

The U.S. Senate approved several top Treasury officials on Thursday, giving the administration's tax, regulatory and international financial diplomacy agendas a boost.

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Among the five senior Treasury officials given the green light are former Bear-Stearns chief economist David Malpass to represent the U.S. Treasury as its top financial diplomat; David Kautter as assistant secretary for tax policy; and Christopher Campbell, a former Republican Senate Finance Committee staffer, to be assistant secretary for financial institutions.

The Senate also approved Andrew Maloney as Treasury deputy undersecretary for legislative affairs and Brent McIntosh as the department's general counsel.

Mr. Malpass, as Treasury's undersecretary for international affairs, will act as the administration's key advocate for dealing with sensitive issues such as exchange rates and cross-border rifts over financial regulation, including at the G-7 and G-20.

Mr. Kautter, a veteran accountant and lawyer, will head the team of experts who are helping shape and analyze the details of the tax bill that Republicans want to push through Congress this year. He will also oversee the administration's efforts to lighten the burden of tax regulations. Earlier this year, Treasury listed eight Obama-era tax regulations it was considering changing or ending. Those include a rule limiting companies from using internal cross-border debt to lower their tax bills.

Mr. Campbell would play a critical role coordinating and advancing the administration's regulatory agenda, including easing or rolling back provisions of the 2010 Dodd-Frank law, as well as its plans for a major rewrite of the U.S. tax code.

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A former senior official in the Reagan and George H.W. Bush administrations, Mr. Malpass has long been critical of global trade agreements and multilateral financial institutions that represent the backbone of world economic diplomacy.

Former colleagues say that while Mr. Malpass might try to downsize the role that the World Bank, the International Monetary Fund and other international institutions play, he will still use Washington's dominant power within them to advance its interests.

Espousing an "America First" policy platform, the administration is pushing multilateral institutions to operate more efficiently and speak more vocally against imbalances in the global economy, such as those caused by capital controls and currency interventions.

Mr. Malpass will take office at a delicate time for U.S. diplomatic relations, both economic and strategic. The administration's threats to levy higher tariffs, ignore some World Trade Organization rulings, and focus on what administration officials have called "economic nationalism, " has fueled worries Washington could spark a trade war, including among longtime allies. While Mr. Malpass is considered more of an internationalist than some key administration officials, he too has been sharply critical of many of the international institutions he will now have to engage to leverage U.S. power.

Mr. Malpass faced a relatively smooth nomination through the Senate, though two lawmakers voted against his approval out of the finance committee. Sens. Sherrod Brown (D., Ohio) objected to his views on financial regulations enacted by Congress in the wake of the 2008 crisis while Robert Menendez, (D., N.J.), expressed concerns about his statements in the lead-up to the recession.

Adam Lerrick, nominated to be Mr. Malpass's deputy in charge of international finance, appears to be facing a rockier approval process. A visiting scholar at the American Enterprise Institute who has worked on international financial crises in Argentina, Greece, Cyprus and Iceland, Mr. Lerrick has yet to be placed on the Senate Finance Committee's schedule for a hearing.

Richard Rubin and Kate Davidson contributed to this article.

Write to Ian Talley at ian.talley@wsj.com

(END) Dow Jones Newswires

August 03, 2017 17:09 ET (21:09 GMT)