Yellen’s looming headache: Treasury’s vanishing ranks

“Key divisions at Treasury have been hollowed out by attrition during the Trump administration under Secretary Steven Mnuchin, who has sought to cut “wasteful spending,” including on personnel he sees as superfluous. Between fiscal years 2016 and 2019, the department’s main offices — Domestic Finance, Economic Policy and International Affairs, among them — saw their staffing levels plunge by nearly a quarter as budgets were slashed.”

“A former Treasury official argued that it made some sense that Mnuchin allowed staffing to decrease; once implementation of sweeping new financial rules after the 2008 credit crisis began to wind down, the domestic finance division probably didn’t need as big of a staff at the beginning of the Trump administration.

“But you always have to think about the tail risk — a financial crisis or a pandemic that causes a financial disturbance,” the former official said. “That’s when a smaller staff can expose some problems.”

Klein said it was positive that Yellen, a former Federal Reserve chair, already knows what it’s like to run a large agency, and her designated deputy, Wally Adeyemo, has extensive experience at Treasury, including as deputy chief of staff.

But Yellen and Adeyemo could face barriers to bringing in their own people, given the possibility of a Republican-controlled Senate. That will create pressure for the new leadership to find ways to bring people on board quickly, such as by appointing counselors.”

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