It appears that the Treasury will soon be getting a champion of the pro-growth conservative crowd on its team in David Malpass, who has his confirmation hearing for Undersecretary for International Affairs in front of the Senate Finance Committee on Wednesday.
It is a very good choice. With Malpass, the Treasury not only gets someone who’s actually been there before—he was an appointee in the George H.W. Bush Administration—but the department also has someone who understands how Congress works, as well, by dint of his time as the chief economist for the Joint Economic Committee in Congress. The committee carries a lot of street cred in the conservative movement; it has been the focal point on the Hill for cogent thinking about tax reform for nearly four decades, for example. The Republicans who know him view Malpass as an effective spokesperson for the pro-growth, supply-side wing of the party—a quieter and more scholarly version of Larry Kudlow.
The skills he brings to his office, as well as his pro-growth bona fides, are no little things: The trap many administrations fall into is a mistaken perception that a White House can simply order Congress, especially if Congress is controlled by the same party, to do its bidding. It has never worked that way, of course. This White House has already encountered that reality on health care reform, but it’s not clear it has inwardly digested the experience.
Now more than ever, members in Congress establish independent power bases and can survive politically for decades, even if they have earned the enmity of their party. Both Presidents Obama and George W. Bush saw key portions of their agendas falter because of their unwillingness or inability to talk to the people on the Hill and work constructively with the legislative branch. To its credit, this administration managed to hire a team of uber-capable congressional liaisons for the White House and the Office of Management and Budget, but having Malpass in the inner sanctum ready to help with Congress will be an additional big plus.
Malpass has been in New York the last two decades, first as chief economist for Bear Stearns, and then with his own firm, Encima. But he’s remained engaged in the policy front, too. In the early 2000s, he served on an advisory council for the Congressional Budget Office—where I first met him—and he was extremely engaged in its attempt to improve its forecasting methodology and scoring. There will be no need for any tutoring or the creation of any briefing books to get him up to speed.
The Undersecretary for International Affairs is a big job that will be even more important in this administration, with certain aspects of tax reform, as well as the president’s predilection for tariffs, posing a threat to our global economic relationships. Having David Malpass in the Treasury will assuage the fears of the pro-growth, free-trade wing of the party that things could go awry.
Ike Brannon is a visiting fellow at Cato and president of Capital Policy Analytics.
