U.S. Senate approves Lew as Treasury chief

WASHINGTON (Reuters) - The U.S. Senate on Wednesday confirmed Jack Lew as President Barack Obama's new Treasury secretary, putting the former White House chief of staff in the middle of political brawls over the government's budget.

Senators backed Lew 71-26, with all 53 Democrats voting in favor.

Lew's most pressing task will be to find a compromise to lessen the economic blow from $85 billion in government spending cuts set to kick in on Friday.

But two more deadlines will quickly follow. Funds for most government operations expire on March 27, and the U.S. government is expected to hit its legal borrowing limit on May 19, setting the stage for a default unless an agreement can be secured to raise the debt ceiling again.

Lew was Obama's chief of staff before the president named him to succeed Timothy Geithner at the Treasury, and has spent much of his career in Washington in public service. He was previously White House budget director under Obama and former President Bill Clinton.

"As my chief of staff, Jack was by my side as we confronted our nation's toughest challenges," Obama said after the Senate vote. "His reputation as a master of fiscal issues who can work with leaders on both sides of the aisle has already helped him succeed in some of the toughest jobs in Washington."

Lew is expected take the lead on difficult talks with Congress on how to trim U.S. budget deficits and keep a lid on $16.6 trillion U.S. national debt.

STAFF MENTALITY?

Lew, 57, led talks with Congress in 2011 that averted a U.S. debt default. At the time, he antagonized Republicans and even some Democrats with his unwavering defense of government-run benefit programs.

His status as an Obama confidant may give him more authority in representing the administration during fiscal talks. But his close relationship with the White House has also raised some hackles.

"He's got a political staff mentality, not an august, independent personality of leadership," said Senator Jeff Sessions, the top Republican on the Senate Budget Committee, who had pressed lawmakers to vote against Lew.

During the confirmation process, Lew also had to confront questions about his investment in the Cayman Islands tax haven and a nearly $1 million bonus he received from Citigroup in 2009, just before the bank got a taxpayer-funded bailout.

And Republican Senator Charles Grassley of Iowa berated Lew for not disclosing more details about a $1.4 million loan he received while working as an executive with New York University.

LONG TO-DO LIST

Senator Max Baucus of Montana, the Democrat who chairs the Finance Committee, had wondered if Lew had sufficient gravitas to be the chief U.S. economic spokesman during a committee hearing this month.

But he later endorsed Lew for the post, commending his commitment to bipartisanship.

"If confirmed, we'll be entrusting Mr. Lew to oversee America's economic policy," Baucus said before the Senate vote. "It is a great responsibility, one I believe Mr. Lew will live up to."

Lawmakers in both parties praised Lew when he said revamping the byzantine U.S. tax code would be a top priority. But prospects for achieving tax reform are clouded by Washington's constant fiscal fights.

The new secretary also will also have to deal with the growing clout of China.

He has pledged to press the world's second-largest economy to further loosen its currency restrictions. Lawmakers have complained China keeps the value of the yuan artificially low to boost its exports, hurting American manufacturers.

Other delicate tasks for Lew include implementing new financial regulations and finding a way to wind down government-controlled mortgage finance giants Fannie Mae and Freddie Mac, which have drawn almost $190 billion from the Treasury.

(Reporting by Anna Yukhananov and Rachelle Younglai; Editing by Mohammad Zargham and Xavier Briand)

Source: http://news.yahoo.com/u-senate-approves-lew-treasury-chief-014649331--sector.html

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