Struggles to earn trust, and why should they trust him???

Mnuchin struggles to earn trust on the Hill

The Treasury secretary has struggled to overcome Republican lawmakers’ suspicion about his Wall Street ties and limited conservative bona fides as tax reform efforts get underway.

By NANCY COOK

Treasury Secretary Steven Mnuchin is the de facto frontman for the administration’s proposed overhaul of the U.S. tax system because of his extreme loyalty to President Donald Trump and the scores of tax policy experts and economists at his command.

But Mnuchin, a former investment banker and movie financier with no prior experience in Washington, hasn’t been able to overcome Republicans’ suspicion about his Wall Street background and limited conservative credentials. That may complicate White House efforts to influence debate as the details of a tax bill are written.

Republicans’ simmering discontent with Mnuchin emerged full force in September, when he urged House Republicans to vote for the deal to temporarily raise the debt ceiling as part of a package that Trump had crafted with the two top Democratic leaders.

Behind closed doors, Mnuchin asked lawmakers to take the tough vote not for the president or for the party, but rather to do it for him, according to three people who attended or were briefed on the meeting. So few members felt any personal bond with Mnuchin that they were surprised he felt comfortable making such a request, and said it betrayed a lack of understanding about the way power works in Washington.

That was also the last time Mnuchin spoke to many of the people in the room, said one senior House aide.

“We will defer to the administration on who they want to put out there on tax reform, but we see the president as the top salesman,” said a second House aide. “Trump supporters will watch Trump selling this, and they will be swayed by Trump, not Steven Mnuchin.”

Mnuchin has had more success in relationship-building on the Senate side, cultivating Senate Finance Chairman Orrin Hatch (R-Utah) and other powerful figures one-on-one as potential allies.

But he’s encountered a steep learning curve on the nuances of tax and economic policy, according to current and former Treasury staffers and congressional aides.

“I think it has taken him awhile because he was thrown into the situation cold,” said Hatch. “He has a tremendous business background.”

He frequently also makes verbal gaffes during public appearances, often contradicting the White House’s best-laid talking points. In mid-October at an international finance conference, Mnuchin said that eliminating the estate tax would ultimately help wealthy people — after the White House had already cast scrapping it as a way to aid farmers, ranchers and small business owners.

A senior Treasury official said Mnuchin has been working on tax reform daily since he assumed the job of Treasury secretary and continues to enjoy a very close relationship with the president, dating back to the 2016 campaign. As for Mnuchin’s relationships with members of Congress, the official added that “just like any relationship, we are always working on it.”

The administration declined to make Mnuchin available for comment.

Selling tax reform, a task that has bedeviled lawmakers since President Ronald Reagan’s 1986 overhaul, would be difficult for any administration. Republicans are split over how much to lower tax rates and which breaks or deductions they should eliminate to offset the tax rate reduction.

Party members also cannot agree among themselves on whether a potential tax bill can and should add to the country’s growing deficit, a concern to the fiscal and spending hawks in both the House and Senate.

It’s even harder for Trump, who has already failed to orchestrate passage of Obamacare repeal — a signature campaign issue not just for him but for the Republican Party — and who has been unbridled in his criticism of leading GOP lawmakers in recent weeks, including Senate Majority Leader Mitch McConnell and Sen. Bob Corker of Tennessee.

Corker, who recently met one-on-one with Mnuchin a few times at his Senate office and Treasury, said he’d been happy with Mnuchin’s outreach so far.

“Look, I’m a business guy,” Corker said. “I like people who talk business.”

Business connections first led Mnuchin to sign on as Trump’s chief fundraiser in the spring of 2016. He and Trump had known each other informally for roughly 15 years through New York City finance and real estate circles, Mnuchin recently said on a POLITICO Money podcast.

It was a job that many establishment Republicans had already passed up, said one adviser close to the administration — and it gave Mnuchin an opening to cement his relationship with Trump by traveling extensively across the country with him.

Ultimately, Mnuchin was rewarded for his efforts with one of the plummiest jobs in any administration and in economic circles — running the Treasury Department.

Mnuchin has managed to maintain an excellent relationship with the president during the administration’s sometimes tumultuous nine-month run — a feat that other officials, such as Director of the National Economic Council Gary Cohn, former chief strategist Steve Bannon or former chief of staff Reince Priebus weren’t able to do, according to Republican lawmakers, senior administration officials and advisers close to the White House.

“There is no question that he has gained influence and, shall we say, standing,” said Larry Kudlow, an informal economic adviser to Trump dating back to the campaign. “As other people in the administration have lost ground, there is a seesaw effect, and Mnuchin’s standing has improved.”

That helped the Treasury secretary weather sharp criticism this past summer after his wife engaged in a tit-for-tat on Instagram over a photograph she posted of herself emerging from a government aircraft in designer clothes — a trip, it later emerged, that included a visit to Fort Knox, where the pair watched the eclipse. Mnuchin then made comments dismissing public interest in the solar event, inflaming the controversy.

After Trump's wavering condemnations of neo-Nazi violence in Charlottesville, Virginia, in August, Mnuchin publicly defended the president against charges that he’d equivocated between hate groups and counterprotesters. He did the same with the controversy over NFL players kneeling during the national anthem at games to protest police brutality against African-Americans, saying the players should “do free speech on their own time.”

The fact that Mnuchin waded into the latter controversy, so far outside of the purview of the Treasury Department, led former Treasury Secretary Larry Summers to call Mnuchin on Twitter “the greatest sycophant in Cabinet history.”

His loyalty has, however, paid dividends in keeping up his relationship with the president, and that has contributed to Mnuchin’s status inside the White House, far more than his relations with Capitol Hill. This week, he’s in the Middle East to coordinate efforts with allies to crack down on terrorist financing, and he’ll be part of Trump’s entourage when he travels to Asia next month.

“Most of our deep tax policy discussions with the president are with Secretary Mnuchin and Director Cohn together, all hashing out the issues and thinking the pros and cons,” said House Ways and Means Committee Chairman Kevin Brady (R-Texas). “The interactions in that group has really proven to be valuable.”

Yet Mnuchin’s ability to stay in Trump’s good graces has not translated into his ability to build warm relationships across Capitol Hill.

His debt ceiling comment still plagues his relationships in the House. The picture is not much better in the Senate, where he’s still an unknown quantity to many members, thanks to the fact that he spent so little time in Washington before becoming Treasury secretary.

People who have dealt with Mnuchin acknowledge that he has a quiet, sometimes socially awkward manner that does not lend itself to chitchat or building instant rapport.

“He’s reserved. He is not a slap-you-on-the-back type of guy,” said Hatch. “But if you ask him a question, he’ll answer it. There is no subterfuge with him.”

Yet there remains a feeling among some Republican lawmakers and congressional aides that Mnuchin views tax reform through the lens of what is good for New York and Wall Street — a worldview that sometimes can mar his ability to sell the White House’s efforts politically and throughout the heartland as a middle-class tax plan.

As one congressional aide remarked: “High finance does not always translate into tax reform.”

Lately, Mnuchin has tried to combat these perceptions by hosting lawmakers or small groups at the agency’s majestic downtown building, adjacent to the White House, as a way to help him forge better relationships in a comfortable setting, and lawmakers have appreciated the gesture.

The administration has also been putting other top officials out to help sell tax reform — particularly those with far deeper ties to the Hill.

Vice President Mike Pence gave a speech at the right-leaning American Enterprise Institute on Tuesday morning, while the director of the Office of Management and Budget, Mick Mulvaney, has emerged as a key and vocal player who has tried to allay lawmakers’ concerns about the way any tax package could add to the deficit.

Mulvaney has strong relationships with House members, thanks to his roughly six years in the chamber. The White House also recently included Mulvaney in a closed-door session with some members of the Senate Finance Committee.

The test of Mnuchin’s leadership on tax reform will come shortly, perhaps as early as next week, once detailed proposals emerge from the House Ways and Means Committee.

Then, Mnuchin will have to defend far more specific decisions on tax breaks and deductions and deploy Treasury’s army of resources to help with the economic modeling and analysis, all while remaining a fierce advocate for Trump. “A big part of this will be to make sure the White House and Treasury is coming out with a consistent position,” said one congressional aide. “Things will get tough. That will be the real test.”