US Senate confirms Mnuchin as Treasury secretary

WASHINGTON, Feb 13 (Reuters) - The U.S. Senate voted to confirm former banker and Hollywood financier Steven Mnuchin as Treasury secretary on Monday, installing the Trump administration's point-man on tax reform, financial de-regulation and economic diplomacy efforts.

The Senate voted 53-47 to confirm the Goldman Sachs veteran's nomination on a mostly party-line vote, with only one Democrat, Senator Joe Manchin of West Virginia, voting in favor.

Mnuchin was expected to be sworn into office on Monday night in a brief White House ceremony, putting a Wall Street veteran in charge of the Treasury for the first time in eight years, after the financial crisis pushed top U.S. bankers out of favor.

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Steven Mnuchin, President-elect Trump's nominee for Treasury secretary, testifies during his Senate Finance Committee confirmation hearing in Dirksen Building, January 19, 2017.

(Photo By Tom Williams/CQ Roll Call)

Treasury Secretary nominee Steven Mnuchin sits with Vanessa Trump (R), wife of Donald Trump Jr, before a swearing-in ceremony for senior staff at the White House in Washington, DC January 22, 2017.

(REUTERS/Carlos Barria)

Incoming Trump administration Treasury Secretary nominee Steven Mnuchin departs after working a simulated crisis scenario during transition meetings at the Eisenhower Executive Office Building at the White House in Washington, U.S. January 13, 2017.

(REUTERS/Jonathan Ernst)

Producer Steve Bing (L) and Honoree Steven Mnuchin recipient of the Philanthropic Leadership Award attend The Kaleidoscope Ball - Designing The Future benefitting the UCLA Children's Discovery and Innovation Institute at Mattel Children's Hospital UCLA at Beverly Hills Hotel on April 17, 2013 in Beverly Hills, California.

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Steven Mnuchin, Treasury secretary nominee for U.S. President Donald Trump, right, attends a swearing in ceremony of White House senior staff in the East Room of the White House in Washington, D.C., U.S., on Sunday, Jan. 22, 2017. Trump today mocked protesters who gathered for large demonstrations across the U.S. and the world on Saturday to signal discontent with his leadership, but later offered a more conciliatory tone, saying he recognized such marches as a hallmark of our democracy.

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 Steve Mnuchin and Lousie Linton arrive at the Premiere of Warner Bros. Pictures' 'Jupiter Ascending' at TCL Chinese Theatre on February 2, 2015 in Hollywood, California.

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Heather Mnuchin and Steve Mnuchin attend The Art Show Gala to Benefit The Henry Street Settlement at The Seventh Regiment Armory on February 23, 2005 in New York City.

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Treasury Secretary nominee Steven Mnuchin attends the inaugural parade of U.S. President Donald Trump in Washington, January 20, 2017. Donald Trump was sworn in earlier as the 45th President of the United States.

(REUTERS/Lucas Jackson)

Donald Trumps' Treasury Secretary Steven Mnuchin arrives on the West Front of the U.S. Capitol on January 20, 2017 in Washington, DC. In today's inauguration ceremony Donald J. Trump becomes the 45th president of the United States.

(Photo by Win McNamee/Getty Images)

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Lawmakers, lobbyists and business groups have been waiting for Mnuchin to fill in the many blanks on how he will pursue tax reform and handle delicate economic cooperation efforts with China, Mexico and other trading partners worried about President Donald Trump's "America First" trade strategy.

Mnuchin faces immediate challenges with the March 15 expiration of a U.S. debt ceiling suspension, ushering in the threat of a new default showdown, and a March 17 meeting of finance ministers from the Group of 20 major economies, where he will face tough questions about Trump's plans to increase trade protections.

"There is a real open question as to whether this administration is going to cut itself off from international monetary cooperation, whether it's exchange rate policies or attitudes towards multilateral institutions or international regulatory policy," said Edwin Truman, a former Treasury and Federal Reserve official now with the Peterson Institute for International Economics

Truman said Mnuchin's hardest job would be managing a sprawling tax reform effort with Congress that seeks to slash business tax rates and enact a new border tax adjustment system aimed at boosting U.S. exports. He noted that was a longer-term project.

Mnuchin, 54, will quickly need to build a core management team to handle such challenges.

Treasury and White House representatives did not respond to requests for comment on Monday on reports that Trump would soon nominate David Malpass, a former economist at failed Wall Street bank Bear Stearns, as Treasury undersecretary for international affairs, the agency's top economic diplomacy job.

Malpass, a Trump campaign adviser who had been leading Treasury transition efforts, was seen as a leading candidate for the job, with experience from international economic posts in the Ronald Reagan and George H.W. Bush administrations.

Other names that have been floated for senior posts include Goldman Sachs banker Jim Donovan for deputy Treasury secretary and Justin Muzinich, a former Morgan Stanley banker, for undersecretary of domestic finance.

The Senate on Monday also unanimously confirmed David Shulkin as secretary of veterans affairs, putting the only holdover from the Obama administration in charge of the second largest federal agency. Shulkin had been in charge of the VA's sprawling health system for the past 18 months.

"THE WRONG MAN"

Mnuchin, a second-generation Goldman Sachs banker who led the firm's mortgage bond trading but left the bank in 2002, has come under fire over his investor group's 2009 acquisition of another failed lender, IndyMac Bank, in a deal in which the Federal Deposit Insurance Corp agreed to absorb most of the losses on IndyMac foreclosures.

The bank, rebranded as OneWest, subsequently foreclosed on more than 36,000 homeowners, drawing charges from Democrats and housing advocates that it was a "foreclosure machine."

Mnuchin grew OneWest into Southern California's largest lender and sold it for $3.4 billion in 2015. He has also helped finance Hollywood blockbusters such as "Avatar," "American Sniper" and this past weekend's box office champion, "The Lego Batman Movie," which took in $55.6 million.

(Reporting by David Lawder; Editing by Peter Cooney and Leslie Adler)

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