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Serving as Treasury chief during Trump’s first term “was the experience of a lifetime, and I’m happy to advise on the outside,” former Treasury Secretary Steven Mnuchin said
WASHINGTON – Donald Trump‘s former Treasury Secretary, Steven Mnuchin, said he will not seek to join the president-elect’s new administration but is ready to offer advice to his successor, including on how to strengthen sanctions on Iran and Russia and contain the growth of US debt.
In an interview, Mnuchin told Reuters it was important for the Treasury to work towards strengthening US trade policy. This includes holding Beijing to its US goods purchase commitments in Trump’s January 2020 Phase One deal to rebalance US-China trade, which he said “they’re not living up to.”
Serving as Treasury chief during Trump’s first term “was the experience of a lifetime, and I’m happy to advise on the outside,” Mnuchin said on Friday, November 8. “I’m sure they’ll have a lot of great choices.”
He declined to name any favorites.
Reuters reported on Friday that two prominent hedge fund investors, Scott Bessent, founder of Key Square Group, and John Paulson had emerged as the top contenders for Treasury secretary, and that Bessent had met with Trump.
Mnuchin founded Liberty Strategic Capital, a private equity firm, after leaving office with investments from Softbank Group and Abu Dhabi’s Mubadala sovereign wealth fund.
Economic team
Mnuchin said it was important that all parts of Trump’s economic team — the Treasury, Commerce Department, US Trade Representative’s office and White House National Economic Council — work closely together as a group, as they did during trade and tariff negotiations with China in 2018 and 2019.
Mnuchin, a former Goldman Sachs executive, said financial markets experience was important for the Treasury secretary to have, but so is a strong management background. This is because Treasury spans vast areas of the economy from regulatory and tax policy to international sanctions, with the latter taking considerable time during his tenure, he said.
The US needs stronger enforcement of financial sanctions and more actions to cut off oil revenues from Iran and Russia, he said, noting that sanctions on Russia over its war in Ukraine have been “more of a headline” than effective.
A G7-imposed price cap of $60 per barrel of Russian crude oil may be reducing Russia’s oil revenues, but “Russia is selling plenty of oil and gas,” he added.
These actions need to be combined with an increase in US oil and gas production and stronger output from other Middle East countries to make up for sanctions-reduced supplies from Russia and Iran to keep prices stable, Mnuchin said.
Managing deficits
Asked whether Trump’s plans to extend expiring individual tax cuts next year and end taxes on tips, Social Security and overtime income would run up a worrisome amount of US debt, Mnuchin said that growing deficits needed to be brought under control.
He said he believes that Congress and the administration can strike a balance between extending the tax cuts and finding savings in both discretionary and non-discretionary spending. Some revenue will be made up through stronger economic growth and from Trump’s higher tariffs, he added.
Mnuchin defended the Trump administration’s heavy COVID-19 relief spending which, along with a revenue collapse during the pandemic, led to a record $3.1 trillion deficit in fiscal 2020, but he said the Biden administration had overspent.
The US deficit in fiscal 2024 ended on Sept. 30 topped $1.8 trillion, the highest outside of the COVID era, as public debt interest costs exceeded $1 trillion for the first time.
“I think the spending we did in COVID was necessary, or there would have been a worldwide depression, not a recession,” Mnuchin said. “But I think the ongoing spending of the Biden administration clearly created inflation and created big deficits, and that has to be addressed.” – Rappler.com
