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From Banking and Finance Law Daily, March 16, 2017

White House budget would reduce Treasury Department’s funds by $519M

By Stephanie K. Mann, J.D.

In the recently released budget blueprint to "Make America Great Again," the White House is proposing that the Treasury Department be granted $12.1 billion in discretionary resources. This proposal is a $519 million or 4.1 percent decrease from the 2017 levels.

Specifically, the White House’s budget is proposing to:

  • preserve key operations of the Internal Revenue Service, while diverting resources away from "antiquated operations" that still rely on paper-based reviews;
  • strengthen cybersecurity by investing in a plan to strategically enhance existing security systems and preempt fragmentation of information technology management;
  • prioritize funding for an array of economic enforcement tools, such as programs that freeze the accounts of terrorists and proliferators, implement sanctions on rogue nations, and link law enforcement agencies with financial institutions;
  • eliminate funding for Community Development Financial Institutions Fund grants;
  • empower the Treasury Secretary, as Chairperson of the Financial Stability Oversight Council, to "end taxpayer bailouts and foster economic growth by advancing financial regulatory reforms that promote market discipline and ensure the accountability of financial regulators;" and
  • shrink the workforce while increasing its efficiency by redirecting resources away from "duplicative" policy offices.

Mnuchin support. In response to the proposed budget, Treasury Secretary Steven T. Mnuchin released a statement saying, "President Trump’s discretionary budget plan released today focuses Treasury on our core missions of collecting revenue, managing the nation’s debt, protecting the financial system from threats, and combating financial crime and terrorism financing. It will ensure that we have the resources we need to enforce the nation’s tax laws, while investing in cybersecurity and prioritizing resources on initiatives that promote technology, efficiency and modernization across the agency."

Democratic response. "This is a dangerous budget," said Rep. Maxine Waters (D-Calif), Ranking Member of the House Financial Services Committee. While massive cuts were made to housing and economic development programs, including Community Development Financial Institutions, which "would put millions of Americans and their communities at risk," the budget is silent on the future of the Securities and Exchange Commission and the Export-Import Bank, emphasized Waters.

"This budget blueprint illustrates that Trump is more concerned with threatening the world with another nuclear arms race and sinking billions into a border wall than ensuring that all Americans have a home, good schools, access to affordable health care, and the financial security to retire," said Waters. "Make no mistake, this proposed budget would strip housing and critical social safety net programs from seniors, veterans, people with disabilities, and families with children. Meanwhile, it does nothing to rein in Wall Street or create jobs."

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