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2017-04-04 12:25:02
Trump Is Ready for Tax Cuts, but His Treasury Department Isn’t

WASHINGTON — After failing to pass health care legislation, the Trump administration said it would take control of the next legislative initiative, a tax overhaul. “Obviously, we’re driving the train on this,” said Sean Spicer, the president’s spokesman.

But two and a half months after taking office, President Trump does not appear to have the personnel in place to get an overhaul of the tax code out of the station.

The last time a tax overhaul was successfully attempted was three decades ago. And it was not easy. President Ronald Reagan, in January 1984, instructed his Treasury Department to report back with a comprehensive legislative strategy. It took 10 months, but the department’s army of economists and accounting experts came back with a three-volume tome of nearly 1,000 pages that charted possible paths forward.

Is Mr. Trump’s Treasury Department ready for such a mammoth task?

Besides Steven Mnuchin, the Treasury secretary, none of the 27 other political appointees who staff the department’s leadership have been confirmed, according to the Partnership for Public Service’s nomination tracker. Mr. Trump has announced only six other Treasury appointees and has yet to name anyone as assistant secretary of tax policy — a critical post for spearheading a rewrite of the tax code. Many important deputy under secretary roles also remain unfilled.

“There are no people in the driver’s seat,” said Paul O’Neill, the first Treasury secretary to serve President George W. Bush. “I think it’s really a big problem.”

The staffing Mr. Trump has done at the Treasury was generally well received on Capitol Hill. James Donovan, a Goldman Sachs executive, will be Mr. Mnuchin’s deputy, and David Malpass, a veteran of previous Republican Treasury Departments and of Wall Street, will be under secretary for international affairs. Adam Lerrick, a conservative economist who has been a vocal opponent of bailouts for banks and countries, has been tapped to run the Treasury’s international finance division.

But that’s it. Mr. Trump has blamed Democrats for dragging out the confirmation process on his picks, but 21 out of 28 posts have yet to be nominated. A Treasury spokesman had no comment on the vacancies.

At the current pace, Mr. Trump’s Treasury appointees might not be in place until summer or later in the year, leaving the department’s staff of career bureaucrats to handle the number crunching for a centerpiece of the president’s legislative agenda.

“You need someone who is empowered by the secretary to speak on tax issues for the department as a whole,” said Mark Mazur, who served as assistant secretary for tax policy in the Obama administration’s Treasury Department. “The slow pace of the transition makes it hard on Treasury as tax reform gets underway.”

Mr. Mnuchin has had to do most of the heavy lifting so far. Representative Kevin Brady of Texas, the Republican chairman of the House Ways and Means Committee, where tax legislation originates, said last week that he had mostly been dealing with Mr. Mnuchin and Gary D. Cohn, Mr. Trump’s top economic adviser, to bridge the gap between the House Republican tax plans and those of the Trump administration. He said he had had little contact lately with Stephen K. Bannon or Stephen Miller, two of Mr. Trump’s other top policy advisers.

Mr. Mnuchin has tapped several senior advisers who do not require congressional confirmation to work on tax policy and serve as liaisons to Congress. He has even pulled from the ranks of former opponents of Mr. Trump to fill those positions.

He has Justin Muzinich, formerly the president of the investment firm Muzinich & Company, advising him on tax policy. Mr. Muzinich was previously the national policy director for the presidential campaign of former Gov. Jeb Bush of Florida.

And on domestic policy, Mr. Mnuchin hired Craig Phillips, a veteran of the BlackRock investment firm, to focus on issues like housing finance and financial regulation. The selection of Mr. Phillips raised eyebrows among some conservatives because he had given so much money to Hillary Clinton’s presidential campaign that he earned “Hillblazer” status.

The Trump administration is weighing questions like whether to sign on to the “border adjustment” tax proposed by House Republicans and Speaker Paul D. Ryan. It must also decide if it wants to ultimately pursue a permanent “revenue neutral” tax overhaul or if it will go for an easier lift and pass a straight tax cut.

The administration is also still studying how the failure to repeal and replace the Affordable Care Act will change its ambitions for a tax overhaul and if the low tax rates that Republicans have been promising will still be possible without further swelling deficits. The Trump administration said in early February that a tax plan was only a few weeks away, but Mr. Spicer said last week that it was “early in the process” of determining the outlines of such a plan.

“These are hard questions requiring good information and policy direction,” said Fred T. Goldberg Jr., a former Internal Revenue Service commissioner who served as assistant secretary of the Treasury for tax policy in 1992. “They have the professional infrastructure, but they don’t have the superstructure to provide the guidance on what specifically should be pursued.”