The Department of the Treasury Ensuring Prosperity and Security

Article excerpt

ATMs with no cash. Resource-rich governments unable to pay soldiers' salaries. Debilitating unemployment and inflation. A decade ago, most U.S. military leaders were unconcerned about solving these issues. Far outside the military's core competencies, these were someone else's problem. Today, experience has taught us the complex and potentially caustic nexus of the security and economic realms. We now ignore these matters at our own peril.

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The Department of Defense (DOD) is not alone in dealing with these concerns. The Department of the Treasury is an underleveraged, poorly understood interagency partner, specializing in macroeconomic and financial matters. An interagency featherweight--800 people are in its headquarters building--Treasury punches far above its weight class. However, heavyweights have inherent advantages in some fights. As a result, the better DOD can understand and work with this national security partner, the greater will be the Nation's prosperity and security.

Who Is Treasury?

The Treasury Department is the executive agency responsible for promoting America's economic prosperity and ensuring its financial security. (1) As anyone watching the news knows, this mission demands coordination with other economic and financial regulators, policymakers, and Wall Street entrepreneurs throughout the United States and abroad. Treasury also serves as the President's chief advisor on domestic and global economic and financial issues. This includes matters involving sustainable development, improved governance, stability of the global economy and financial system, and preventing the U.S. financial system from being used to fund illicit activity.

The Department has two primary components. First, Treasury's equivalent of the Pentagon, its Departmental Offices, resides next door to the White House. Defense personnel will most likely deal with professionals from this headquarters. Second, Treasury is responsible for its operating bureaus: the Internal Revenue Service, Mint, Bureau of Engraving and Printing, Financial Crimes Enforcement Network, Alcohol and Tobacco Tax and Trade Bureau, Bureau of Public Debt, Community Development Financial Institution Fund, Financial Management Service, Inspector General, Treasury Inspector General for Tax Administration, Office of the Comptroller of the Currency, and Office of Thrift Supervision. In total, the bureaus employ 98 percent of all Treasury employees. (2)

Long gone are the headquarters' moneyladen vaults and frantic bank tellers. Instead, the headquarters houses the equivalent of three military "Services"--Domestic Finance, International Affairs, and Terrorism and Financial Intelligence--albeit at a fraction of the military Services' size. First, the Office of Domestic Finance deals with U.S.-based finance and banking matters, which are at the center of the current financial matters we see on the nightly news. It helps develop policies and guidance on financial institutions, financial market oversight and regulation, Federal credit policies, debt management, and state and local finance. It also oversees programs such as the deterrence of U.S. currency counterfeits and the Terrorism Risk Insurance Program. Most prominently, the office develops and coordinates Treasury's policies on legislative and regulatory issues affecting financial stability, including the Troubled Assets Relief Program (TARP).

Second, the Office of International Affairs (IA) specializes in macroeconomic matters worldwide. Its mission is to support and protect prosperity at home by encouraging financial stability and sound economic policies overseas. This office helps develop policies related to international economic, financial, monetary, trade, investment, debt, development, environment, bilateral aid, and energy programs. IA serves as the U.S. representative at the International Monetary Fund (IMF), World Bank, and other multilateral development banks. …