The regard for “Hamilton,” the world-famous Broadway play, reveals how big of an impact the United States secretary of the Treasury is capable of. Alexander Hamilton was, of course, the first Treasury secretary and among the best known. The 76 secretaries in our nation’s history have wielded power and influence regarding the direction of the United States economy. This principal economic advisor to the president focuses on how policies enacted by the government could potentially impact overall economic health and financial systems.
The American Legislative Exchange Council (ALEC) is dedicated to the principles of limited government, free markets and federalism. When government reduces the tax burden, eliminates onerous regulatory policies, balances budgets and allows the free market to determine outcomes, all Americans are better off. The secretary of the Treasury is an influential voice concerning these issues.
The current nominee for this post is Steven Mnuchin, an unfamiliar name to many American households prior to his nomination. Mnuchin has dedicated much of his life to the private sector, working in a variety of finance and banking roles. His status as neither a career politician nor a Washington, D.C., “insider” seems to be the preference of many voters based on election results.
Mnuchin has stated his priority as secretary of the Treasury would be to accelerate the U.S. economic growth rate to 3-4 percent, mainly by decreasing tax rates and simplifying the tax code. During an interview with CNBC in November of 2016, he promised the “largest tax reform since Reagan.” Mnuchin advocates slashing the corporate tax rate from 35 to 15 percent and implementing an across-the-board income tax reduction. The income tax reduction would be concentrated on the middle class, with rate reductions for the highest earners offset by fewer deductions and loopholes. Concerning the corporate tax rate, since we know employees or consumers ultimately bear the brunt in the form of higher prices or lower wages, a lower rate would benefit all.
Mnuchin has also asserted the importance of reducing the regulatory burden on individuals and businesses. Cumulative overregulation burdens the economy with trillions of dollars in compliance costs and the lost opportunities due to non-invested capital. As an example, he cites the decreased ability for banks to offer loans because of Dodd-Frank, the complicated federal law signed by President Obama in 2010 to heavily regulate the financial sector. Based on Mnuchin’s regional banking experience, he explains loans provide “the engine of growth to small and medium-sized businesses.” Certain aspects of Dodd-Frank have handicapped growth and contributed to the economic malaise of recent years.
In addition to tax and regulatory reform, Mnuchin will focus on reducing the national debt and decreasing non-defense, non-safety net spending by one percent each year. By simultaneously decreasing government spending and lowering taxes, his intent is to allow American workers to retain more of their hard-earned money rather than let it disappear into government coffers. He stated the overarching goal of this administration will be “to make sure the average American worker has wage increases and good jobs.” Mnuchin clearly does not fit the false caricature of Wall Street bankers as greedy and callous.
The initial policy positions — particularly regarding taxes, regulations and balancing the budget – staked out by Mnuchin are consistent with ALEC’s core beliefs in smaller government. He has the necessary economic and financial background to effectively serve the president-elect, and he has articulated his desire to unleash economic growth by getting big government out of the way. Mnuchin’s policy prescriptions would be a boon for the American economy and all American citizens. Considering economic issues are routinely ranked as the most important, the famous Bill Clinton adage remains relevant: “It’s [still] the economy, stupid.”
Christine Smith is a Coordinator for the Center for State Fiscal Reform at the American Legislative Exchange Council (ALEC). Thinking of submitting an op-ed to the Washington Examiner? Be sure to read our guidelines on submissions.
