Deputy Treasury Secretary Lawrence H. Summers could face aggressive questioning at his Senate confirmation hearing today, but the grilling is expected to be relatively brief and is virtually certain not to block his nomination to succeed departing Treasury Secretary Robert E. Rubin.
Senators from both parties have numerous bones to pick with Summers, including the White House's refusal to back legislation that would limit low-priced foreign steel imports and Summers's role in controversial financial rescue missions in Mexico and Asia. But none of this has risen to a level that would disqualify Summers from taking the top job at Treasury, or even put much of a speed bump in the way of his confirmation, which Treasury officials hope to see occur before July 4, when Rubin plans to leave office.
"I don't think there is sufficient disagreement with him to keep him from being confirmed," said Senate Finance Committee member Connie Mack (R-Fla.). "I don't see a problem for him."
Though there will be plenty to talk about, the Finance Committee has scheduled only a relatively brief session, starting at 10 a.m. The committee plans to begin a second hearing on another topic at 2 p.m. The panel will defer a vote on Summers's nomination until next week to give Summers time to respond to written questions.
The Senate Banking Committee plans to hold a hearing on Summers next week, although that panel has no formal vote on the nomination.
Cabinet nominations such as this one are usually straightforward proceedings, barring the emergence of some glaring problem. Summers, 44, is a known quantity who has been confirmed before. He served as treasury undersecretary for international affairs from 1993 to 1995 and has been deputy secretary since 1995.
Summers also has an unusual sort of protection from the financial markets, which reacted favorably to the news that he would succeed Rubin and then displayed anxiety when it looked as if the Senate might complicate the transition. When a spokesman for Sen. Mike DeWine (R-Ohio) said last month that the senator might stall Summers's nomination over the steel issue, spooked currency traders sent the value of the dollar downward. The DeWine spokesman retracted the threat the next day.
Another potential difficulty disappeared yesterday when Sen. James M. Inhofe (R-Okla.) dropped his threat to block Senate action on all nominations out of anger at President Clinton's use of a special recess appointment to end run the Senate and send an openly gay U.S. ambassador to Luxembourg. A spokesman said Inhofe yielded after Clinton promised to warn the Senate the next time he planned such a move.
The steel-imports issue likely will be a key topic at today's hearing. The steel industry was rocked last year by imports from Japan, South Korea, Russia, Brazil and other countries seeking markets during the global financial crisis, when demand collapsed elsewhere. Steel-state lawmakers have pushed a bill that would force imports back to pre-crisis levels.
The White House had threatened to veto the bill as blatantly protectionist, and yesterday the Finance Committee approved a somewhat weaker, substitute measure. While only one outspoken proponent of the tougher legislation, Sen. John D. "Jay" Rockefeller (D-W.Va.), sits on the committee, he has warned that he would put Summers "over a grill" on the steel issue during the confirmation hearing, but added that he would not block the nomination.
Summers could face tough questions from Republicans on the administration's proposals for tax cuts and overhaul of Social Security -- areas where Summers has played a key role.
Republicans have blasted the administration's tax proposals as woefully inadequate, and they have ridiculed the White House's complex proposal for shoring up Social Security with future budget surpluses as fiscal chicanery.
GOP senators could also question Summers over the key role he played in the administration's 1995 bailout of the Mexican peso, and his high-profile role in orchestrating the International Monetary Fund's rescue missions in 1997 and last year in Thailand, South Korea, Russia, Indonesia and other countries. Critics charged that the administration and the IMF worsened a bad situation by insisting on wrongheaded austerity measures.
Despite the easing of that crisis in recent months, some observers say its aftermath will be one of Summers's biggest challenges as treasury secretary -- and an area where he could distinguish himself during the last 18 months of the Clinton administration.
Treasury has been working to develop a new global "financial architecture," essentially a set of international regulations and practices, including rules that would subject international financial transactions to greater openness and scrutiny in an effort to try to prevent future crises such as the massive capital flight and currency plunges that rocked the financial world in 1997 and 1998.
"That's where he could make his mark," said Cary Leahey, senior U.S. economist with Primark Decision Economics Inc. "But that's tough, that's going to be really hard."
CAPTION: President Clinton congratulates Deputy Treasury Secretary Lawrence H. Summers, left, at a White House ceremony in May after announcing he would nominate Summers to succeed Treasury Secretary Robert E. Rubin, right.