Jacob J. Lew emerged relatively unscathed from his nomination hearing to serve as Treasury secretary, putting the administration’s choice to replace Timothy F. Geithner on a likely easy path to confirmation.
Senate Finance Chairman Max Baucus, D-Mont., told reporters after the hearing that he would schedule a vote on the nomination after the Senate returned from next week’s recess. Sen. Orrin G. Hatch of Utah, the panel’s top Republican, said he had not decided whether to support Lew, but suggested he would not hold up the nomination on the Senate floor if approved by the panel as expected.
Despite sharp criticism of Obama administration economic policies and attacks on Lew’s personal investments, Lew’s public hearing was a marked contrast with the contentious battles other nominees have faced in recent weeks.
“Frankly, I think you’ve done really well today,” Hatch told Lew at the end of the three-hour hearing.
At the urging of lawmakers on both sides of the aisle, the White House chief of staff pledged his support Wednesday for a tax code overhaul, saying it was an “extremely important priority.”
Lew said he hoped to broaden the tax base while lowering rates, something many Republicans have said should be a major priority. But he also said additional revenue was needed to help reduce the deficit, which GOP lawmakers have resisted.
Lew said an overhaul of both the individual and business tax codes should be undertaken simultaneously. And although he said a corporate tax re-write could be done in a revenue-neutral way, he said lowering the top corporate rate to 25 percent from the current 35 percent, as some lawmakers want, would be challenging.
Several Republicans raised concern about Lew’s background in the financial industry and past investments that GOP senators said contrast with President Barack Obama’s criticism of offshore investments.
“We know very little about your knowledge of the activities and practices of the units for which you were the chief operating officer,” said Hatch, who asked Lew to explain his role at Citigroup and what knowledge he had of the firm’s activities that led to its near-collapse during the 2008 financial crisis.
Lew said he was tasked with overseeing a wide range of business activities but was not responsible for risky trades.
“I learned a great deal about the financial products, but I wasn’t designing them,” Lew said. “I take away a deep understanding there are risks that we need to be very much on guard against.”
Sen. Charles E. Grassley, R-Iowa, asked whether it was “morally acceptable” to take a huge bonus even as the firm was drawing on a federal bailout that ultimately totaled $45 billion.
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