Treasury’s Tax Law Architect, Justin Muzinich, to Be Tapped as Deputy Secretary
Posted April 2, 2018 6:16 p.m. EDT
WASHINGTON — President Donald Trump will tap Justin Muzinich, a top aide to Treasury Secretary Steven Mnuchin, as the Treasury Department’s deputy secretary, a powerful role that includes overseeing a broad portfolio of policy matters like taxes, financial regulation, trade and economic sanctions.
The nomination fills a void in the top ranks of the department, which has operated without a full-time deputy secretary since Mnuchin was confirmed more than a year ago. Trump’s previous picks, the longtime Goldman Sachs executive James Donovan, and Brian Brooks, a Fannie Mae executive who was not formally nominated, withdrew their names from contention last year. Mnuchin later said that he was not going to fill the position.
The ascendance of Muzinich comes as Trump reshuffles his economic team, most notably replacing Gary Cohn with Larry Kudlow as the director of the National Economic Council. Far from a flamethrower, Muzinich, who spent most of his career on Wall Street, will add a more moderate voice with traditional conservative economic ideas to the table.
Muzinich, 40, has been serving as Mnuchin’s tax counselor and played a central role in crafting and negotiating the terms of the $1.5 trillion tax overhaul that Congress passed late last year. He was previously under consideration to be promoted to undersecretary for domestic finance at the Treasury Department, but now is in line to be Mnuchin’s No. 2.
“I am delighted by the president’s decision to nominate Justin to serve as deputy secretary of the Treasury,” Mnuchin said in a statement. “Justin has established himself as a leader in the department, and played a key role in the passage of the Tax Cuts & Jobs Act.”
He added: “He brings significant experience in financial services and in public policy and has become a reliable and trusted adviser on a number of important issues.” A relative newcomer to Washington, Muzinich has brought a mix of financial and political experience to the Treasury Department. During the 2016 presidential campaign, he served as policy director for Jeb Bush and helped to craft Bush’s tax plan. He also previously taught at Columbia Business School and has published essays on foreign aid and the role of the Federal Reserve.
Muzinich, who holds an MBA from Harvard and a law degree from Yale, has also worked as a banker at Morgan Stanley and was the president of Muzinich & Co., an international investment firm founded by his father.
During the development of the tax legislation last year, Muzinich was frequently by Mnuchin’s side or negotiating on behalf of the Treasury Department during meetings with congressional staff members. Tax policy staff members on Capitol Hill often noted that Muzinich was a good listener and fast learner considering that he was not steeped in the arcana of the tax code. Those abilities will be crucial as deputy secretary, as Muzinich will have a much wider mandate.
While the tax law has been passed, the carrying out of such a major piece of legislation will be a consuming task for an understaffed Internal Revenue Service, which is part of the Treasury Department. The department is also responsible for developing and executing economic sanctions on terrorist groups and on countries such as North Korea and Russia. And the department is at the center of Trump’s effort to prevent China from capturing intellectual property through corporate mergers and acquisitions.
Muzinich’s portfolio will also include the department’s debt management, a critical role given the government’s increasing borrowing needs stemming from the new tax law.
“It has been mystifying to me that they could go so long without a deputy at Treasury,” said Sarah Bloom Raskin, who served as Treasury’s deputy secretary during the Obama administration. “It’s not an easy role to keep vacant. It seems to have taken Treasury off the field in several major policy battles.”
Muzinich’s nomination will require Senate confirmation. Given his role in the tax law, Democrats are likely to grill him on the merits of deep tax cuts for the rich and for corporations. He will also have to publicly defend the Treasury Department’s position that the tax cuts will be self-financing despite many mainstream analyses that project they will add heavily to the deficit. Josh Bolten, a former chief of staff for President George W. Bush who got to know Muzinich during Jeb Bush’s campaign, said that Muzinich’s range of experiences would serve him well in a position that will require him to frequently speak on Mnuchin’s behalf.
“He’s a high-quality person who, I think, will in the most civil of ways always speak up when he thinks something is wrong and will always, again in a very civil way, give a good, reasoned judgment,” Bolten said.