Lawmakers Keeping Treasury Depleted

Sen. Max Baucus (D-Mont.) said the president must find a way to placate farm-state legislators for Treasury nominees to be confirmed.
Sen. Max Baucus (D-Mont.) said the president must find a way to placate farm-state legislators for Treasury nominees to be confirmed. (By Chris Kleponis -- Bloomberg News)
By Jonathan Weisman
Washington Post Staff Writer
Wednesday, July 20, 2005

Shipments of Montana peas to Cuba have not risen to headline status in Washington, but for a Treasury Department trying to rebuild its depleted ranks, they have become a serious matter.

Sen. Max Baucus (Mont.), the ranking Democrat on the Senate Finance Committee, is single-handedly blocking every senior Treasury nominee -- a dozen or more -- until the Bush administration changes obscure regulations governing agriculture trade with Cuba. The Finance Committee will hold a confirmation hearing today for the Treasury Department's would-be deputy secretary, its undersecretary for domestic finance, its management chief and its head lobbyist.

But nobody is expecting their confirmations any time soon.

"If I were the president, I would be very concerned," Baucus said yesterday, "and I would do what was reasonably necessary to find a way to get my people confirmed."

The confrontation comes at a sensitive time. This fall, the Treasury Department is to lead a high-stakes push to overhaul the tax code. Economic frictions with China are coming to a head. And the frothy housing market has raised pressing questions about the federally regulated mortgage market.

But beneath Treasury Secretary John W. Snow, the upper echelons of Treasury are studded with vacancies. Treasury officials had hoped a new team at the top would quash talk that the once-powerful agency is losing its stature. Bush has nominated a veteran Washington hand, Robert M. Kimmitt, to be Snow's deputy. He has tapped the policy chief of his reelection campaign, Timothy D. Adams, as undersecretary for international affairs and has named a respected international finance lawyer, Randal K. Quarles, to be undersecretary for domestic finance.

Baucus is blocking them all, along with the nominees for assistant secretaries for tax policy, terrorist finance, intelligence and analysis, legislative affairs, and management. He is also holding up confirmation of the U.S. executive director of the World Bank, the comptroller of the currency, and the director of the Office of Thrift Supervision.

"We need our nominees in place here," said Treasury spokesman Tony Fratto. "Some of the most important issues facing the government today are coming through the Treasury Department."

Baucus and his farm-state allies -- from both parties and both houses of Congress -- say the administration has only itself to blame.

"If the president would like to have his people in place, I would think he would burn the midnight oil to find a solution," Baucus said.

The root of the dispute lies in a law, passed in 2000, that loosened restrictions on agricultural sales to Cuba. Under the Trade Sanctions Reform and Export Enhancement Act, such sales can be made if Cuban customers pay cash in advance or finance the deal through an acceptable, third-country bank. The law specifically prohibits a president from using agricultural trade as a foreign policy tool without congressional consent.

The law did not define "cash in advance," so for four years, payments for agriculture sales have been made after the goods have reached Cuban ports for inspection. The goods could not be transferred to the Cuban customers until their cash deposits were registered.


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