Treasury Secretary Steven Mnuchin on Friday said several orders President Trump is signing are meant to emphasize the administration’s economic priorities to the American people.
Trump is scheduled Friday to sign an executive order and two presidential memoranda at the Treasury Department that direct Mnuchin to analyze core aspects of the Dodd-Frank Act and tax regulations issued in 2016.
Mnuchin was ordered to review the entirety of the Dodd-Frank Act with a similar executive order in February, and the administration is already working on rewriting the tax code.
Even so, Mnuchin told reporters that Trump will sign the overlapping orders “to make clear what the administration’s priorities are and to signify the importance of them to the American people.”
“These three are specifically designed to focus on aspects that are enormously important to the Treasury and president,” Mnuchin said.
Trump promised to "dismantle" Dodd-Frank during his campaign and signed two executive orders in February instructing his Cabinet to look for economically beneficial reforms that could be made to the law. The administration hasn’t outlined what specifically they’d target until now.
The executive order directs Mnuchin to review “significant” tax regulations issued in 2016 and determine if any are too costly, complex or outside of an agency’s authority.
Mnuchin said the administration would release a tax reform plan “very soon” and has been meeting weekly with House Ways and Means Committee Chairman Kevin BradyKevin Patrick BradyHouse panel advances key portion of Democrats' .5T bill LIVE COVERAGE: Ways and Means to conclude work on .5T package LIVE COVERAGE: Tax hikes take center stage in Ways and Means markup MORE (R-Texas), who presides over the tax-writing panel.
“The tax code has become extremely expensive and burdensome,” Mnuchin said. “I think everybody would agree.”
Mnuchin said the tax review would include the Obama administration's 2016 rules on "tax inversions," or when a U.S. company merges with foreign company and reincorporates abroad to cut its tax bill.
One memorandum directs Mnuchin to asses the Financial Stability Oversight Council’s (FSOC) process of designating banks and financial firms “too big to fail.”
FSOC, a multiagency group established in Dodd-Frank, monitors financial risks and designates certain banks and financial firms as “systemically important financial institutions” (SIFIs). That label subjects banks to tougher federal oversight, and Republicans claim the designation is applied inconsistently and arbitrarily.
The other memorandum would direct Mnuchin to review and report back on whether the federal government's orderly liquidation authority (OLA) is useful or hurtful to the U.S. economy and in line with administration financial regulatory policy.
“We will do an analysis to make sure this doesn’t encourage excessive risk taking, moral hazard or harm to taxpayers,” Mnuchin said.
Established in Dodd-Frank, OLA is the process through which the federal government would help SIFIs sell off their assets without triggering an economic crisis. Though OLA is funded through fees paid by large banks and financial firms, Republicans call it a "bailout" for big banks and seek to replace it with a new bankruptcy process. Democrats typically support OLA as a safeguard against another financial crisis.
Mnuchin said FSOC wouldn’t use OLA to wind down a failing firm unless required by law, and not without consulting Trump.
Trump's orders come as House Republicans prepare major legislative overhauls to Dodd-Frank. The House Financial Services Committee is scheduled to hold a hearing on April 26 to consider Chairman Jeb Hensarling’s (R-Texas) sweeping rewrite of the post-recession financial regulation.