President Joe Biden’s pick to lead the Treasury Department’s tax policy efforts pledged to work with lawmakers on a bipartisan basis and be a strong advocate for the Internal Revenue Service.
Lily Batchelder, Biden’s nominee for assistant secretary for tax policy, appeared before the Senate Finance Committee Tuesday, where she promised to address concerns from both Republicans and Democrats.
Batchelder told Senator Mike Crapo, the committee’s top Republican that she shares his concern about the proliferation of digital services taxes targeting American companies, adding that she has “a bias against taxes that target a specific industry.”
She also told Senator Chuck Grassley, an Iowa Republican, that she would work to draft legislation on Biden’s proposal to tax asset transfers at death that would include exemptions for family farms, as the president has proposed.
Batchelder at the confirmation hearing also pledged to help bolster the Internal Revenue Service, which has struggled in recent years with budget cuts. She said she is committed to implementing the expanded child tax credit and improving taxpayer services — both key priorities for Democrats including Finance Committee Chairman Ron Wyden and Senator Sherrod Brown.
She said the IRS should update estimates of the tax gap — the difference between the amount of taxes owed and what the IRS actually collects — more frequently and perhaps annually. The IRS’s last official estimate covered the years 2011 to 2013 and unofficial projections have shown that tax evasion has increased greatly since then. Senator Elizabeth Warren on Monday introduced
At the same hearing, Nellie Liang, Biden’s pick to oversee the $21 trillion market for Treasury securities, signaled that one of her top priorities will be to scrutinize the market following last year’s brief investor panic and consider changes that will help it better withstand turmoil.
“It is critical that we ensure that the Treasury market operates well in periods of stress,” Liang, the nominee for Treasury undersecretary for domestic finance, said in prepared testimony she delivered Tuesday for the confirmation hearing.
“If confirmed, I will endeavor to provide an assessment of changes in this market that have arisen from technological advances and shifts in market participants’ behavior, and recommend policies, as needed, to ensure a resilient Treasury securities market,” she said.
The Treasuries market was shaken in March 2020 as parts of the economy shut down due to the COVID-19 pandemic, stoking fears of a depression and a global rush for dollar cash. While Treasuries are normally a safe haven in times of crisis, many institutional investors rushed to sell even those holdings to obtain cash, causing a liquidity crunch in what is typically the world’s most liquid market.
Before joining the Treasury Department early this year as an adviser to Secretary Janet Yellen, Liang co-authored a paper that proposed “serious consideration” be given to mandating a wider role for central clearing in the Treasuries market as a partial solution.
A former director of the Federal Reserve’s division of financial stability, Liang is also
“While our dynamic financial system spurs growth, it can also lead to significant regulatory gaps over time,” she said in the prepared remarks. “I will work to ensure that we are adopting policies that recognize these changes, to ensure consumers and investors are informed and protected, and risks to financial stability are mitigated.”
Batchelder and Liang appeared alongside two other nominees to fill top posts at the Treasury: Benjamin Harris for economic policy and Jonathan Davidson for legislative affairs.
