Van Hollen Pushes Mnuchin on Chief Bank Regulator, Tax Breaks for Wealthy in Republican Healthcare Bill

May 18, 2017

Contact: Bridgett Frey - 202-228-0668

Van Hollen Pushes Mnuchin on Chief Bank Regulator, Tax Breaks for Wealthy in Republican Healthcare Bill

GOP Healthcare Bill Flatly Contradicts Mnuchin's Statement of No Absolute Tax Cuts for the Upper Class

Washington, DC - Today U.S. Senator Chris Van Hollen questioned Treasury Secretary Mnuchin about the U.S. chief banking regulator at the Office of the Comptroller of the Currency (OCC) and tax breaks for the wealthy as part of the Republican healthcare bill at the U.S. Senate Banking Committee. Below is a transcript of their exchange:

VAN HOLLEN: Thank you Mr. Secretary for your service. Recently I sent you a letter together with many of my colleagues on this Committee objecting to your decision to put Keith Noreika in charge at the OCC by using a maneuver that evaded Senate confirmation. As you well know, the OCC serves as the chief banking regulator, overseeing over 2,000 banks, and Mr. Noreika has spent most of his career working very closely to protect the interests of those banks.

I appreciate the letter I got back yesterday. It raised some additional questions, and I'm going to be sending you another letter to ask you to respond to the following questions.

Why were you willing to install him as head of the OCC before his ethics pre-vetting has actually been certified, so that the American public can know whether or not conflicts exist now that he's in charge, at least for now, of regulating 2,000 banks?

And second, your letter indicated that Mr. Noreika's special temporary 130-day status allows him to avoid President Trump's ethic pledge, and I'm going to want to know whether that would allow him to immediately go leave the OCC and lobby or work on behalf of big banks" And I'm also interested in whether all this means that you'll be presenting a nominee in the next 130 days?

So I'm going to send you a letter to ask for your follow up on that.

I want to ask you a question about tax policy. And I agree with my colleagues who have said that if we're going to do tax reform - and I think tax reform can work, can be an important step - that we should focus on middle-income tax relief and not another round of tax breaks for the very wealthy and special interests.

In fact, last November you agreed with that statement, and I quote what you said in November, "Any reduction we have in upper-income taxes will be offset by less deductions so there will be no absolute tax cut for the upper class." That's what you said.

Now, Senators Reed and Tester have asked you questions about the tax reform plan that you're thinking of submitting or will be submitting. I have a question related to a tax cut plan that's already in progress that you and President Trump have strongly endorsed. And that's the House healthcare plan which, according to the Congressional Budget Office, has $900 billion in tax cuts, including $270 billion in tax cuts that go to higher income families.

And the analysis of that tax cut is that millionaires will get, on average, $50,000 a year in tax cuts. And that's because what we did in the Affordable Care Act was we applied the capital gains and net income taxes, Medicare taxes, on very high-income individuals on their investment income so they could help shoulder their share of the Medicare trust fund. That totally violates the standard you set forward in November, doesn't it?

MNUCHIN: Allow me just for...

VAN HOLLEN: It's a really yes or no question, Mr. Secretary.

MNUCHIN: Well, no I want... The first question you asked I wanted to respond to, which was on the Controller of the Currency at the OCC. So yes, it is our intention, we actually have someone who the President has approved that's going through the FBI vetting process. I think as you know, unfortunately, with all the candidates this is a time-consuming process, but we do hope that there will be somebody who is cleared and somebody who will go through a Senate confirmation process. So this was, in no way, an attempt to put someone in who wouldn't be going through, this is someone who's in on an acting basis.

On your second comment, I have only been partially involved in the healthcare, that's not really in my primary area of responsibility. My comments are really more focused on tax reform and yes - the President's intent is that there is a middle-income tax cut and that is our major focus.

VAN HOLLEN: Mr. Secretary, my question was - it is a fact that the healthcare bill, so-called healthcare bill, that passed the House has $900 billion in tax cuts combined with almost $900 billion in cuts to Medicaid and some to Medicare.

So a huge pillar of this is tax cuts. And isn't it the case that the provision that gets rid of the Medicare tax on investment income flatly contradicts your test that any reduction we have in upper-income taxes will be offset by less deductions so there will be no absolute tax cut for the upper class" Isn't it an absolute tax cut for millionaires" Yes or no?

MNUCHIN: Again, my comments were focused on tax reform.

VAN HOLLEN: Mr. Secretary, this is tax policy. It is a tax provision.

Mr. Chairman, I think what's been interesting about this healthcare debate is that you've got this major tax change masquerading under the cover of healthcare. Why is there a big tax cut in a healthcare bill" You're the Secretary of the Treasury, you deal with tax policy.

MNUCHIN: Again, I think the idea was that tax was hurting investment and jobs in this country and that, again, that was part of the healthcare repeal. So, yes, factually, that tax will help people who are investing money back into the economy and will create jobs.

VAN HOLLEN: All right, Mr. Chairman.

It flatly contradicts your statement of no absolute tax cuts for the upper class, it's a flat contradiction.

Thank you Mr. Chairman.