U.S. Senate panel backs Lew for Treasury secretary

WASHINGTON Wed Feb 27, 2013 7:10am IST

Jack Lew, President Barack Obama's nominee to lead the U.S. Treasury Department, testifies before the Senate Finance Committee on Capitol Hill in Washington February 13, 2013. REUTERS/Kevin Lamarque

Jack Lew, President Barack Obama's nominee to lead the U.S. Treasury Department, testifies before the Senate Finance Committee on Capitol Hill in Washington February 13, 2013.

Credit: Reuters/Kevin Lamarque

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WASHINGTON (Reuters) - The Senate Finance Committee on Tuesday backed President Barack Obama's nominee to head the U.S. Treasury, Jack Lew, despite some concerns about his perks from previous employers, clearing the way for a confirmation vote in the full Senate.

With the 19-5 vote, about half the panel's 11 Republicans opposed Lew's nomination. Senate Democratic leader Harry Reid said he was hoping to consider Lew's nomination on Wednesday, but was still seeking agreement with Republicans.

Five Republicans on the committee also voted against Timothy Geithner, the previous Treasury secretary, who left last month.

Some Republicans hold deep reservations about the nomination and it is unclear whether they will throw up procedural hurdles to the vote. Nevertheless, Lew is expected eventually to win confirmation in the Senate, where Democrats hold a 53-45 majority.

Senate approval would pitch Lew into the heated budget battle between the White House and congressional Republicans. Both sides oppose the estimated $85 billion in across-the-board government spending cuts set to take effect on Friday, but disagree about alternatives.

Previously Obama's chief of staff and budget director for both Obama and former President Bill Clinton, Lew is a policy wonk who has spent much of his career in public service in Washington. But some observers have questioned his financial expertise and international credentials.

'NOT ANOTHER ACOLYTE'

The top Republican on the Finance Committee, Senator Orrin Hatch, said he supports Lew as head of the Treasury Department in deference to Obama, but has "serious reservations" about him.

"I hope we end up with the Jack Lew of the Clinton administration, not just another acolyte of the Obama White House," Hatch said before the panel vote.

At a hearing on his nomination earlier this month, Republicans also grilled Lew about an investment he once held in a fund linked to the Cayman Islands and a nearly $1 million dollar bonus he received from Citigroup in 2009 just before the bank got a taxpayer-funded bailout.

In addition, Senator Charles Grassley, the No. 2 Republican on the Finance Committee, said he was unsatisfied with Lew's response to questions about a $1.4 million loan he received while working as an executive with New York University.

"If Mr. Lew will not answer our questions now, why should we on this committee expect him to answer any questions if he's confirmed?" Grassley said before voting against Lew.

TAX PRIORITIES

Lew has said revamping the U.S. tax code would be a top priority if he wins confirmation. The tax system was last fully overhauled in 1986, though prospects for achieving tax reform are clouded by Washington's constant fiscal fights and conflict over whether new revenue is needed to cut budget deficits.

He will also deal with implementing new financial regulations, China's growing economic clout and winding down government-controlled mortgage finance giants Fannie Mae and Freddie Mac.

In addition, he may have to start paying more attention to Europe, where financial markets are on edge over election results in Italy that some analysts fear could exacerbate the euro zone's debt crisis.

Lew answered at least 444 written questions from the senators on the Finance Committee on these matters and others. Geithner was required to answer fewer than half that number when he was seeking confirmation.

While a few lawmakers, including Senator Jeff Sessions, the top Republican on the Budget Committee, plan to vote against Lew when his confirmation gets to the full Senate, Senate Democrats believe they have the requisite 60 votes to get Lew through the process even if some hurdles are raised.

(Additional reporting by Rachelle Younglai; Editing by Todd Eastham)

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