UPDATE 1-US Treasury hampered by Cruz’s appointment holds, officials say


(Adds Toomey’s office)

By Andrea Shalal

WASHINGTON, Oct.11 (Reuters) – The US Treasury is held hostage by Republican Senator Ted Cruz’s efforts to shut down a Russia-Germany gas pipeline, blocking critical appointments as the federal debt limit remains an urgent issue, according to reports. White House officials and Democrats in Congress say.

Only four confirmed candidates are in the top ranks of the Treasury, out of around 20 spots for presidential picks, officials said. More than eight months after Democratic President Joe Biden took office, his government candidates are being approved at a slower pace than the last three presidents, according to federal data.

In addition to the toll that Cruz’s actions take on the Treasury’s ability to tackle the federal debt limit, they hurt the Biden administration’s ability to solve other big issues, according to senior officials, including a global minimum tax, terrorism and financial intelligence.

Cruz wielded power by being the only obstacle to an expedited confirmation process that requires the consent of all 100 senators for non-controversial candidates – a description according to the White House matches many of the Treasury’s choices as well as others in awaiting confirmation from the Senate, including many ambassadors.

Cruz wants Biden to impose sanctions that would stop the Russian Nord Stream 2 pipeline.

Biden, despite his opposition to the pipeline, said he lifted sanctions because the project was nearing completion and wanted to reconnect with strained ties with Germany, a key US ally.

As for Cruz, a spokesperson for the senator said, the solution is simple: he will lift the deductions if the Biden administration sanctions the company behind the pipeline project, which he insists is required by the government. American law.

Failure to do so “gives Vladimir Putin a geostrategic victory” and “strengthens corrupt Russian influence in Europe,” Cruz said in a September 13 letter, referring to the Russian president.

The Senate could make the confirmations by running tiered votes in a tedious process that requires the approval of 60 senators, but this would limit the chamber’s time to deal with other issues, including efforts to pass the bills on infrastructure and spending, according to experts.

The deadlock has left some Treasury candidates, including Brian Nelson, who is set to serve as Under Secretary for Terrorism and Financial Intelligence, in limbo as the United States grapples with the takeover of Afghanistan by the Taliban.

Others, including Jonathan Davidson, appointed Assistant Secretary for Legislative Affairs, and Ben Harris, appointed Assistant Secretary for Economic Policy, work as advisers to Treasury Secretary Janet Yellen and Deputy Treasury Secretary Wally Adeyemo in the interim, but are severely limited in what they can do.

If confirmed, Davidson will play a key role in mobilizing support for a longer-term increase in the US debt limit of $ 28.4 trillion and a global minimum tax. But in his current role as an advisor, he cannot engage in “outward-facing” activities, according to federal guidelines, which means he cannot travel to Capitol Hill to meet with lawmakers or making calls to them, which some members of Congress say is a huge obstacle in recent debt negotiations.

While a deal to temporarily raise the debt ceiling was reached last week, there is no indication that Yellen will have a larger team to deal with the problem when it reappears in the coming weeks, said a manager.

Yellen and Adeyemo’s personal efforts to get Cruz to loosen his grip have failed, officials say, and they see no solution in sight.

“Jonathan Davidson enjoys wide support as a longtime Senate employee, and he is in dire need of it as Congress deals with many issues with the Treasury Department,” the finance committee chairman said. of the Senate, Ron Wyden, specifically citing the federal debt limit. “Senator Cruz only … makes it more difficult to manage the federal government well.”

Cruz’s spokesperson did not respond to Wyden’s comments, but said the Texas senator would use “whatever leverage he has as a senator to force President Biden to apply mandatory sanctions on Nord Stream 2” .

In the past, Cruz has released a small number of candidates who he says “cleaned up” the foreign policy “mess” caused by the Biden administration, and did not block the nomination of Graham Steele, Biden’s candidate for the post. assistant secretary for financial institutions. to the Treasury, added the spokesperson.

As of Thursday, the Senate had confirmed 191 of Biden’s candidates, or about 36%, compared to 42% of Donald Trump over the same period, 68% of Barack Obama and 65% of George W. Bush, according to federal data.

MEETING WITH CRUZ

Yellen and Adeyemo have spoken to Republican senators in recent weeks in an attempt to get Cruz to relinquish his grip, a senior administration official told Reuters. Treasury officials also asked other senators to call on Cruz, including Republicans Mike Crapo and Cynthia Lummis, although both refused, the official added.

Adeyemo has given Cruz a confidential in-person briefing on Nord Stream 2 in recent weeks, a senior official said, and made another rare in-person visit to Cruz’s office.

Another Treasury official provided a classified briefing to Republican Senator Pat Toomey, according to Toomey’s office.

“The secretary and Wally spoke with Cruz on several occasions. We contacted the staff. We tried by all means possible,” said the senior official, adding that the administration was losing hope that it could change its mind.

Treasury spokesman John Rizzo said it was “essential” for the Senate to confirm the candidates, calling them “critical” for the department’s work to address the debt limit and ” achieve the national security objectives of disrupting illicit financing and combating terrorism “. (Reporting by Andrea Shalal; Editing by Heather Timmons, Leslie Adler and Paul Simao)

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