The nominations of Justin Muzinich to be Deputy Secretary of the Treasury and Michael Desmond to be Chief Counsel for the IRS and an Assistant General Counsel in the Treasury Department were approved by the Senate Finance Committee on August 1, 2018. Muzinich's nomination was approved on a party-line 14-13 vote. Desmond's nomination was approved 25-2, with only Senators Bob Menendez (D-NJ) and Sheldon Whitehouse (D-RI) opposed.

The Muzinich vote followed similar Democratic opposition to the nomination of Charles Rettig to be IRS Commissioner July 19, over the IRS decision to loosen tax-exempt organization contributor disclosure requirements. Ranking Member Ron Wyden (D-OR), who was the only Democratic senator to speak at today's markup, continued to express concerns over that issue and the prospect that the Administration could act unilaterally to allow inflation indexing for capital gains calculations. "Indexing capital gains would be another massive policy change that's had no public debate. … There is awfully compelling evidence that what the Treasury is considering is illegal," Wyden said.

Senator Wyden cited a July 30 New York Times report of Treasury Secretary Steven Mnuchin saying with regard to capital gains indexing, "If it can't get done through a legislation process, we will look at what tools at Treasury we have to do it on our own and we'll consider that." The report also cited House Ways and Means Committee Chairman Kevin Brady (R-TX) as saying he would like to see the Treasury Department act on the issue through regulation. White House Press Secretary Sarah Sanders said today that President Trump asked Treasury to look into the issue.

A July 13 Wall Street Journal opinion column argued that the White House has authority to make the capital gains move because of a 2002 Supreme Court decision that gives regulators leeway in how "cost" is defined. As Senator Wyden noted, the George H. W. Bush Administration prior to that "decided it didn't have the legal authority to make this change without Congressional action."

Senator Wyden also said he would continue to place a hold on Senate floor debate of Treasury nominees, including Muzinich, until the Department responds to oversight requests.

In his opening statement, Chairman Orrin Hatch (R-UT) referred to Wyden's contention that Muzinich has been insufficiently responsive to the committee's questions, but asserted that, "Mr. Muzinich has been prompt and fully responsive to all questions he is able to answer at this time, and I have full faith he will continue to be so should he be confirmed."

Opening statements by Chairman Hatch and Senator Wyden are attached, along with the Committee's vote tallies on the nominations.

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ATTACHMENTS

Results of Executive Session

Hatch Statement

Wyden Statement