The Department of the Treasury is an executive department and the treasury of the United States federal government. Established by an Act of Congress in 1789 to manage government revenue, its responsibilities include producing currency and coinage, collecting taxes and paying bills of the US government, managing the federal finances, supervising banks and thrifts, and advising on fiscal policy. The Department is administered by the Secretary of the Treasury, who is a member of the Cabinet. On February 13, 2017, the Senate confirmed Steven Mnuchin as Secretary of the Treasury.
The first Secretary of the Treasury was Alexander Hamilton, who was sworn into office on September 11, 1789. Hamilton was asked by President George Washington to serve after first having asked Robert Morris (who declined, recommending Hamilton instead). Hamilton almost single-handedly worked out the nation's early financial system, and for several years was a major presence in Washington's administration as well. His portrait is on the obverse of the U.S. ten-dollar bill while the Treasury Department building is shown on the reverse. Besides the Secretary, one of the best-known Treasury officials is the Treasurer of the United States whose signature, along with the Treasury Secretary's, appears on all Federal Reserve notes.
The Treasury prints and mints all paper currency and coins in circulation through the Bureau of Engraving and Printing and the United States Mint. The Department also collects all federal taxes through the Internal Revenue Service, and manages U.S. government debt instruments.
|Formed||September 2, 1789|
|Jurisdiction||Federal government of the United States|
1500 Pennsylvania Avenue, NW
Washington, D.C., U.S
|Annual budget||"$14 billion (2013)" (PDF).|
The history of the Department of the Treasury began in the turmoil of the American Revolution, when the Continental Congress at Philadelphia deliberated the crucial issue of financing a war of independence against Great Britain. The Congress had no power to levy and collect taxes, nor was there a tangible basis for securing funds from foreign investors or governments. The delegates resolved to issue paper money in the form of bills of credit, promising redemption in coin on faith in the revolutionary cause. On June 22, 1775—only a few days after the Battle of Bunker Hill, Congress issued $2 million in bills; on July 25, 28 citizens of Philadelphia were employed by the Congress to sign and number the currency.
On July 29, 1775, the Second Continental Congress assigned the responsibility for the administration of the revolutionary government's finances to Joint Continental Treasurers, George Clymer and Michael Hillegas. The Congress stipulated that each of the colonies contribute to the Continental government's funds. To ensure proper and efficient handling of the growing national debt in the face of weak economic and political ties between the colonies, the Congress, on February 17, 1776, designated a committee of five to superintend the Treasury, settle the accounts, and report periodically to the Congress. On April 1, a Treasury Office of Accounts, consisting of an Auditor General and clerks, was established to facilitate the settlement of claims and to keep the public accounts for the government of the United Colonies. With the signing of the Declaration of Independence on July 4, 1776, the new-born republic as a sovereign nation was able to secure loans from abroad.
Despite the infusion of foreign and domestic loans to pay for a war of independence, the United Colonies were unable to establish a well-organized agency for financial administration. Michael Hillegas was first called Treasurer of the United States on May 14, 1777. The Treasury Office was reorganized three times between 1778 and 1781. The $241.5 million of paper Continental Dollars devalued rapidly. By May 1781, the dollar collapsed at a rate of from 500 to 1000 to 1 against hard currency. Protests against the worthless money swept the colonies and angry Americans coined the expression "not worth a Continental".
Robert Morris was designated Superintendent of Finance in 1781 and restored stability to the nation's finances. Morris, a wealthy colonial merchant, was nicknamed "the Financier" because of his reputation for procuring funds or goods on a moment's notice. His staff included a Comptroller, a Treasurer, a Register, and auditors, who managed the country's finances through 1784, when Morris resigned because of ill health. The Treasury Board of three Commissioners continued to oversee the finances of the confederation of former colonies until September 1789.
The First Congress of the United States was called to convene in New York on March 4, 1789, marking the beginning of government under the Constitution. On September 2, 1789, Congress created a permanent institution for the management of government finances:
Be it enacted by the Senate and House of Representatives of the United States of America in Congress assembled, That there shall be a Department of Treasury, in which shall be the following officers, namely: a Secretary of the Treasury, to be deemed head of the department; a Comptroller, an Auditor, a Treasurer, a Register, and an Assistant to the Secretary of the Treasury, which assistant shall be appointed by the said Secretary.
Alexander Hamilton took the oath of office as the first Secretary of the Treasury on September 11, 1789. Hamilton had served as George Washington's aide-de-camp during the Revolution, and was of great importance in the ratification of the Constitution. Because of his financial and managerial acumen, Hamilton was a logical choice for solving the problem of the new nation's heavy war debt. Hamilton's first official act was to submit a report to Congress in which he laid the foundation for the nation's financial health.
To the surprise of many legislators, he insisted upon federal assumption and dollar-for-dollar repayment of the country's war debt of $75 million in order to revitalize the public credit: "[T]he debt of the United States' was the price of liberty. The faith of America has been repeatedly pledged for it, and with solemnities that give peculiar force to the obligation." Hamilton foresaw the development of industry and trade in the United States, and suggested that government revenues be based upon customs duties. His sound financial policies also inspired investment in the Bank of the United States, which acted as the government's fiscal agent.
Congress transferred several agencies that had previously been under the aegis of the Treasury department to other departments as a consequence of the September 11, 2001 terrorist attacks. Effective January 24, 2003, the Bureau of Alcohol, Tobacco and Firearms (ATF), which had been a bureau of the Department since 1972, was extensively reorganized under the provisions of the Homeland Security Act of 2002. The law enforcement functions of ATF, including the regulation of legitimate traffic in firearms and explosives, were transferred to the Department of Justice as the Bureau of Alcohol, Tobacco, Firearms, and Explosives (BATFE). The regulatory and tax collection functions of ATF related to legitimate traffic in alcohol and tobacco remained with the Treasury at its new Alcohol and Tobacco Tax and Trade Bureau (TTB).
Effective March 1, 2003, the Federal Law Enforcement Training Center, the United States Customs Service, and the United States Secret Service were transferred to the newly created Department of Homeland Security ("DHS").
The mission of the Department of the Treasury is to "maintain a strong economy and create economic and job opportunities by promoting the conditions that enable economic growth and stability at home and abroad, strengthen national security by combating threats and protecting the integrity of the financial system, and manage the U.S. Government’s finances and resources effectively".
The basic functions of the Department of the Treasury mainly include:
With respect to the estimation of revenues for the executive branch, Treasury serves a purpose parallel to that of the Office of Management and Budget for the estimation of spending for the executive branch, the Joint Committee on Taxation for the estimation of revenues for Congress, and the Congressional Budget Office for the estimation of spending for Congress.
From 1830 until 1901, the responsibility of overseeing weights and measures was carried out by the Office of Standard Weights and Measures, which was part of the U.S. Treasury Department. After 1901, the responsibility was assigned to the agency that subsequently became known as the National Institute of Standards and Technology.
The Department of the Treasury is organized into two major components: the Departmental offices and the operating bureaus. The Departmental Offices are primarily responsible for the formulation of policy and management of the Department as a whole, while the operating bureaus carry out the specific operations assigned to the Department.
|The Alcohol and Tobacco Tax and Trade Bureau (TTB)||The Alcohol and Tobacco Tax and Trade Bureau (TTB) is responsible for enforcing and administering laws covering the production, use, and distribution of alcohol and tobacco products. TTB also collects excise taxes for firearms and ammunition.|
|The Bureau of Engraving & Printing (BEP)||The Bureau of Engraving & Printing (BEP) designs and manufactures U.S. currency, securities, and other official certificates and awards.|
|The Bureau of the Fiscal Service||The Bureau of the Fiscal Service was formed from the consolidation of the Financial Management Service and the Bureau of the Public Debt. Its mission is to promote the financial integrity and operational efficiency of the U.S. government through exceptional accounting, financing, collections, payments, and shared services.|
|The Community Development Financial Institution (CDFI) Fund||The Community Development Financial Institution (CDFI) Fund was created to expand the availability of credit, investment capital, and financial services in distressed urban and rural communities.|
|The Financial Crimes Enforcement Network (FinCEN)||The Financial Crimes Enforcement Network (FinCEN) supports law enforcement investigative efforts and fosters interagency and global cooperation against domestic and international financial crimes. It also provides U.S. policy makers with strategic analyses of domestic and worldwide trends and patterns.|
|The Inspector General||The Inspector General conducts independent audits, investigations and reviews to help the Treasury Department accomplish its mission; improve its programs and operations; promote economy, efficiency and effectiveness; and prevent and detect fraud and abuse.|
|The Treasury Inspector General for Tax Administration (TIGTA)||The Treasury Inspector General for Tax Administration (TIGTA) provides leadership and coordination and recommends policy for activities designed to promote economy, efficiency, and effectiveness in the administration of the internal revenue laws. TIGTA also recommends policies to prevent and detect fraud and abuse in the programs and operations of the IRS and related entities.|
|The Internal Revenue Service||The Internal Revenue Service (IRS) is the largest of Treasury's bureaus. It is responsible for determining, assessing, and collecting internal revenue in the United States.|
|The Office of the Comptroller of the Currency (OCC)||The Office of the Comptroller of the Currency (OCC) charters, regulates, and supervises national banks to ensure a safe, sound, and competitive banking system that supports the citizens, communities, and economy of the United States.|
|The U.S. Mint||The U.S. Mint designs and manufactures domestic, bullion and foreign coins as well as commemorative medals and other numismatic items. The Mint also distributes U.S. coins to the Federal Reserve banks as well as maintains physical custody and protection of the nation's silver and gold assets.|
|Program||Funding (in millions)||Employees (in FTEs)|
|Management and Finance|
|Office of the Inspector General||$35||213|
|Inspector General for Tax Administration||$157||837|
|Special Inspector General for TARP||$34||192|
|Community Development Financial Institutions Fund||$225||73|
|Financial Crimes Enforcement Network||$108||346|
|Alcohol and Tobacco Tax and Trade Bureau||$101||517|
|Bureau of the Fiscal Services||$348||2,350|
|Internal Revenue Service||$12,476||92,009|
|Office of Fiscal Stability||$184||86|
|Small Business Lending Programs||$17||25|
|State Small Business Credit Initiative||$7||12|
|Financial Stability Oversight Council||$20||26|
|Office of Financial Research||$92||249|
|Bureau of Engraving and Printing||$749||1,944|
|United States Mint||$3,571||1,874|
|Office of the Comptroller of the Currency||$1,104||3,997|
In the latest Center for Effective Government analysis of 15 federal agencies which receive the most Freedom of Information Act FOIA requests, published in 2015 (using 2012 and 2013 data, the most recent years available), the Treasury earned a D by scoring 68 out of a possible 100 points, i.e. did not earn a satisfactory overall grade.