Commentary Magazine


Topic: Treasury Department

An Administration That Won’t Face Reality

President Obama isn’t likely to have much trouble getting the Senate to confirm Jack Lew as his new treasury secretary. Though Senator Jeff Sessions has vowed to try and stop Lew, there is nothing in the nominee’s long record of service to Democratic presidents that would disqualify him for the office. Given the fight that is brewing over the nominations of Chuck Hagel and John Brennan for the Department of Defense and the CIA, there is little appetite on the Hill for any further effort to deny the president his choice to run an important department.

But even though Lew will probably be easily confirmed, his nomination is one more signal that there may be no way to avoid more bitter and counter-productive confrontations with Congress over the budget. Lew is well known to be a hard-core progressive who, during the negotiations with Republicans over the debt ceiling and the fiscal cliff, made it clear that he opposes any true reform of entitlement spending. Having run to the left and won re-election, President Obama is entitled to try and govern from the left. Lew’s selection illustrates that this is his intention. But though he may have a mandate to govern, that doesn’t give him the power to alter reality. If he isn’t prepared to start thinking about cutting spending, then no amount of rhetorical excess will prevent this country from going further down the road to insolvency.

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Banks Make a Joke Out of Iran Sanctions

Those wondering about Iran’s ability to confidently defy the sanctions that the Obama administration has belatedly imposed on the rogue regime have previously pointed to the lax enforcement of the regulations. The Treasury Department has granted over 10,000 exemptions to companies desirous of avoiding the sanctions. The U.S. has also given Iran’s largest oil customers a pass on having to give up purchasing Tehran’s supplies. But it turns out that even those sanctions that are enforced aren’t working and this time the fault can’t be pinned on President Obama’s lack of will.

The New York Times reports that federal prosecutors say Chinese banks and other international institutions have been playing the role of middleman in a con game allowing Iranian banks and corporations to conduct business in the West that ought to be curtailed by the law. Through their U.S. branches, the Chinese institutions have reportedly funneled billions of dollars to Iran’s coffers. When added to the president’s timorous diplomacy, this fraud helps explain why the Iranians are going full speed ahead with the nuclear program with few worries about the sanctions that Secretary of State Clinton claimed would be so tough it would bring them to their knees.

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