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Senate Panel Peppers Treasury Secretary Designate Mnuchin With Questions


Steven Mnuchin, Donald Trump's choice for Treasury secretary, got a pretty rough welcome on Capitol Hill yesterday. During a five-hour confirmation hearing, Democrats on the Senate Finance Committee peppered him with questions about his investments and his role in the foreclosure crisis. But Mnuchin also took a moderate tone on some issues very important to Democrats. Here's NPR's John Ydstie.

JOHN YDSTIE, BYLINE: The major focus of the Democrats' grilling of Steven Mnuchin was his involvement in a bank that housing activists have dubbed a foreclosure machine. During the housing bust, Mnuchin and some partners bought a California bank, IndyMac, that had been dragged under by bad mortgages. They renamed it OneWest and foreclosed on tens of thousands of those bad loans, something Oregon Democrat Ron Wyden pointed out as the hearing began.


RON WYDEN: OneWest was truly unique. While Mr. Mnuchin was CEO, the bank proved it could put more vulnerable people on the street faster than just about anybody else around.

YDSTIE: But Mnuchin described his role in this drama differently. He pointed out that he didn't make the bad loans, he inherited them, and that his motivation wasn't just to make a profit, but also rescue a business.


STEVEN MNUCHIN: We invested $1.6 billion into a failing financial institution when most investors were running for the hills. We renamed the business OneWest Bank and saved thousands of jobs.

YDSTIE: New Jersey Democrat Robert Menendez had a different take on Mnuchin's role.


ROBERT MENENDEZ: In the darkest days of the financial crisis, it seems to me that you and your friends were looking for stores to raid, and you found a gem in IndyMac. And with the government subsidizing the risk, you engineered a highly lucrative equation that made billions off the backs of homeowners, seniors, minorities, military men and women.

YDSTIE: Menendez also confronted Mnuchin with his initial failure to list significant assets on the financial disclosure statement he provided the committee.


MENENDEZ: You did not answer, in that questionnaire, listing your position as director of a Cayman Islands corporation, as manager, chairman and director of eight additional shell corporations and holding companies and nearly a $100 million in real estate.

YDSTIE: Mnuchin amended his disclosure just hours before the hearing began, and he blamed the overwhelming amount of paperwork required.


MNUCHIN: These forms are very complicated. I don't have the form in front of me, but I believed it said, to the best of my knowledge this is true. And when I certified those forms, I thought it was correct.

YDSTIE: Republicans on the committee downplayed the omission. And for the most part, they provided the Treasury nominee opportunities to talk about the new administration's priorities.


MNUCHIN: We believe the most critical issue is creating economic growth, and passing tax reform is a major component of that.

YDSTIE: Mnuchin also said he supports a strong dollar. He tried to explain away Donald Trump's suggestion that a weaker dollar might be a good thing. And he staked out some moderate positions, for instance, saying he would keep the Consumer Financial Protection Bureau. He also called for more staff and resources for the IRS. Republicans have cut its budget in recent years. Mnuchin argued that when we add people, we make money. And he said that's something his new boss would get behind.


MNUCHIN: He'll get that completely. That's a very quick conversation with Donald Trump.

YDSTIE: John Ydstie, NPR News, Washington. Transcript provided by NPR, Copyright NPR.

John Ydstie has covered the economy, Wall Street, and the Federal Reserve at NPR for nearly three decades. Over the years, NPR has also employed Ydstie's reporting skills to cover major stories like the aftermath of Sept. 11, Hurricane Katrina, the Jack Abramoff lobbying scandal, and the implementation of the Affordable Care Act. He was a lead reporter in NPR's coverage of the global financial crisis and the Great Recession, as well as the network's coverage of President Trump's economic policies. Ydstie has also been a guest host on the NPR news programs Morning Edition, All Things Considered, and Weekend Edition. Ydstie stepped back from full-time reporting in late 2018, but plans to continue to contribute to NPR through part-time assignments and work on special projects.