US President Barack Obama announces his Chief of Staff Jack Lew as his nominee for Treasury Secretary, in the East Room of the White House in Washington, January 10, 2013© REUTERS/ Jason Reed
WASHINGTON, January 10 (By Carl Schreck for RIA Novosti) – US President Barack Obama on Thursday nominated White House chief of staff Jack Lew to be the next US Treasury Secretary, tapping a former Citigroup executive likely to be grilled in confirmation hearings over his time on Wall Street as the US economy careened toward disaster.
Lew served as a managing director at Citigroup from 2006 to 2009, taking a $945,000 bonus from the firm after it was rescued from bankruptcy thanks to a massive taxpayer bailout in 2008, according to financial disclosure forms he filed with the federal government.
His confirmation hearing will likely include questions about his time at the company, a spokesperson for US Sen. Chuck Grassley, a ranking member of the US Senate’s finance committee, told RIA Novosti on Thursday.
“It’s an area that hasn’t been fully explained and needs to be,” the spokesperson said.
In his announcement of the nomination at the White House on Thursday, Obama was effusive in his praise for outgoing Treasury Secretary Timothy Geithner, crediting him with righting the nation’s economic course after assuming the post in 2009 with “the wreckage of our economy still smoldering and unstable.”
Obama lauded Lew as well, saying he had sought out the nominee’s advice over the past year “on virtually every decision that I’ve made, from economic policy to foreign policy.”
“Jack has my complete trust,” Obama said. “I know I’m not alone in that.”
But Lew’s time at Citigroup has sparked concerns about a revolving door between Washington and Wall Street that many say paralyzes efforts to crack down on the financial industry’s excesses.
“As a supporter of the president, I remain extremely concerned that virtually all of his key economic advisers have come from Wall Street,” Sen. Bernie Sanders, an independent from Vermont, said in a statement Thursday.
“In my view, we need a treasury secretary who is prepared to stand up to corporate America and their powerful lobbyists and fight for policies that protect the working families in our country,” Sanders added. “I do not believe Mr. Lew is that person.”
Lew has also downplayed the role of deregulation in the financial crisis, while Sanders and other Wall Street critics say deregulation was pivotal in the proliferation of exotic financial products that nearly cratered the US economy.
“We don’t need a treasury secretary who thinks that Wall Street deregulation was not responsible for the financial crisis,” Sanders said. “We need a treasury secretary who will work hard to break up too-big-to-fail financial institutions so that Wall Street cannot cause another massive financial crisis.”
Lew has faced questions on Capitol Hill about his time on Wall Street in the past as well.
During a September 2010 confirmation hearing on Lew’s nomination to be director of the Office of Management and Budget, Grassley asked him how it was in the public’s interest for him to receive the nearly $1 million bonus as Citigroup was being rescued by American taxpayers.
“My position at Citi was a management position,” Lew responded. “I was not an investment advisor. My compensation was in line with other management executives at the firm and in similarly complex operations.”
Grassley said Thursday that he would withhold judgment on Lew’s nomination “until the vetting process is completed.”
“I’m looking forward to asking Mr. Lew some questions on these issues when he comes before the Finance Committee,” Grassley said in a statement.
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