Charles S. Clark | December 4, 2017 | 0 Comments

Treasury Watchdog Probes Mnuchin's Handling of Tax Reform 'Study'

Treasury Secretary Steven Mnuchin has not delivered promised analysis, senator says. Treasury Secretary Steven Mnuchin has not delivered promised analysis, senator says. Alex Brandon / AP

The inspector general for the Treasury Department confirmed last week that it has accepted the request by Sen. Elizabeth Warren, D-Mass., that it investigate Secretary Steven Mnuchin’s handling of a questioned staff study of the impact of the pending tax reform legislation.

“It’s a top priority,” Rich Delmar, counsel to Inspector General Eric Thorson, told Bloomberg.

As the Senate entered into its floor debate on massive tax reform legislation, Warren on Nov. 30 wrote to the Treasury IG attacking Mnuchin’s statements that the current plan for deficit-financed corporate-oriented tax reform “will pay for itself with growth,” citing economists who disagree.

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She said Mnuchin, in public statements since April, had claimed that more than 100 Treasury staff “are working round the clock on running scenarios for us” to show that these corporate tax cuts will pay for themselves,” the senator wrote. Mnuchin “has promised that Treasury will release the analysis.”

But the House on Nov. 16 voted to pass the bill and the Senate voted likewise on Dec. 2, without such an analysis. (Treasury’s website offers several general documents with a “framework” touting the tax plan that had been taking shape in Congress.) Treasury did not respond to Government Executive requests on Monday for comment.

An official in Treasury’s Office of Tax Analysis, speaking to the New York Times on condition of anonymity, said the department had not released what Mnuchin and other Republicans call “a dynamic” analysis showing that the tax bills would pay for themselves because such a study does not exist. Instead, Treasury career staff have been running numbers on individual provisions or policy ideas within the draft legislation, the Times reported, in part to provide technical help to the Congressional Budget Office and Joint Taxation Committee.

Warren requested that the IG conduct “a review of the Treasury Department's use of taxpayer dollars to conduct economic analysis of the tax plan, including whether there was any political interference in the department's analyses, and why they were not publicly released.”

The report could shed light on the perennial tension between political appointees implementing the president’s agenda and specialized career staff trained to apply methodology. Bill Valdez, president of the Senior Executives Association, told Government Executive, “The statistical arms of each agency are part of a tightly knit group of professionals who meet regularly to ensure that data and analytical integrity are kept to the highest possible standards and free of political influence.”

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