Treasury Department

TREASURY DEPARTMENT

The U.S. Department of the Treasury performs four basic functions: formulating and recommending economic, financial, tax, and fiscal policies; serving as financial agent for the U.S. government; enforcing the law; and manufacturing coins and currency. The Treasury Department was created by an act of September 2, 1789 (31 U.S.C.A. § 301). Many subsequent acts have affected the development of the department and created its numerous bureaus and divisions. On March 1, 2003, the newly-created homeland security department took control of several treasury divisions: the U.S. Customs Service, the secret service, and the Federal Law Enforcement Training Center.

Secretary of the Treasury

As a major policy adviser to the president, the secretary of the treasury has primary responsibility for formulating and recommending domestic and international financial, economic, and tax policy, participating in the formulation of broad fiscal policies that have general significance for the economy, and managing the public debt. The secretary also oversees the activities of the department in carrying out its major law enforcement responsibility, serving as the financial agent for the U.S. government, and manufacturing coins, currency, and other products for customer agencies.

In addition, the secretary has many responsibilities as chief financial officer of the government. The secretary serves as chair pro tempore of the Economic Policy Council and as U.S. governor of the international monetary fund, the International Bank for Reconstruction and Development, the Inter-American Development Bank, and the African Development Bank. The Office of the Secretary includes the offices of deputy secretary, general counsel, inspector general, the under secretaries, the assistant secretaries, and treasurer.

Bureau of Alcohol, Tobacco, Firearms and Explosives

The Bureau of Alcohol, Tobacco, and Firearms was established by Treasury Department Order No. 221, effective July 1, 1972. The order transferred the functions, powers, and duties arising under laws relating to alcohol, tobacco, firearms, and explosives from the internal revenue service to the bureau. On December 5, 1978, Treasury Department Order No. 120-1 assigned to the bureau responsibility for enforcing chapter 114 of title 18 of the United States Code (18 U.S.C.A. § 2341 et seq.) relating to interstate trafficking in contraband cigarettes. The Anti-Arson Act of 1982, 96 Stat. 1319, gave the bureau the additional responsibility of addressing commercial arson nationwide.

The bureau is responsible for enforcing and administering firearms and explosives laws, as well as laws covering the production, taxation, and distribution of alcohol and tobacco products. The bureau performs two basic functions: criminal enforcement and regulatory enforcement.

The criminal enforcement branch of the bureau seeks to stop illegal trafficking, possession, and use of firearms, destructive devices, and explosives and also tries to suppress trafficking in illicit distilled spirits and contraband cigarettes. The objectives of the regulatory enforcement branch of the bureau include determining and ensuring the full collection of revenue due from legal alcohol, tobacco, firearms, and ammunition manufacturing industries; fulfilling the bureau's responsibility to ensure product integrity and provide health warning statements; and preventing commercial bribery, consumer deception, and other improper trade practices in the alcohol beverage industry.

The Bureau of Alcohol, Tobacco, Firearms and Explosives is now part of the Department of Justice.

Office of the Comptroller of the Currency

The Office of the Comptroller of the Currency (OCC) was created on February 25, 1863 (12 Stat. 665), as a bureau of the Treasury Department. Its primary mission is to regulate national banks. The OCC is headed by the

comptroller, who is appointed for a five-year term by the president with the advice and consent of the Senate. By statute, the comptroller also serves a concurrent term as director of the federal deposit insurance corporation.

The OCC supervises approximately 3,300 national banks, including their trust activities and overseas operations. The OCC has the power to examine banks; approve or deny applications for new bank charters, branches, or mergers; take

enforcement action—such as bank closures—against banks that are not in compliance with laws and regulations; and issue rules, regulations, and interpretations related to banking practices. Each bank is examined annually through a nationwide staff of approximately 2,400 bank examiners supervised by six district offices. The OCC is independently funded through assessments on the assets of national banks.

Bureau of Engraving and Printing

The Bureau of Engraving and Printing operates on basic authorities conferred by an act of July 11, 1862 (31 U.S.C.A. § 303), and additional authorities contained in past appropriations made to the bureau that are still in force. A working capital fund was established in accordance with the provisions of section 2 of the act of August 4, 1950, as amended (31 U.S.C.A. § 5142), which placed the bureau on a completely reimbursable basis. The bureau is headed by a director, who is appointed by the secretary of the treasury and reports to the treasurer of the United States.

At the Bureau of Engraving and Printing, the artistry of the engraver is combined with the most technologically advanced printing equipment to produce U.S. securities. The bureau designs, prints, and finishes all U.S. paper currency (federal reserve notes), as well as U.S. postage stamps, treasury securities, certificates, and other security products, including White House invitations and military identification cards. It is also responsible for advising and assisting federal agencies in the design and production of other government documents that, because of their innate value or for other reasons, require security or counterfeit-deterrence characteristics.

The bureau has its headquarters in Washington, D.C., and operates a second currency manufacturing plant in Fort Worth, Texas.

Financial Management Service

The mission of the Financial Management Service (FMS) is to improve the quality of government financial management. The service is committed to helping its government customers achieve success. The FMS serves taxpayers, the Treasury Department, federal program agencies, and government policymakers by linking program and financial management objectives and by providing financial services, information, and advice to its customers.

The FMS is responsible for programs to improve cash management, credit management, debt collection, and financial management systems throughout the government. For cash management, the service issues guidelines and regulations and assists other agencies in managing financial transactions to maximize investment earnings and reduce the interest costs of borrowed funds. For credit management, the service issues guidelines and regulations and helps program agencies manage credit activities, including loan programs, so as to improve all parts of the credit cycle, such as credit extension, loan servicing, debt collection, and write-off procedures. The service works with other agencies to take advantage of new automation technology and improve financial management systems and government handling of payments, collections, and receivables.

The service issues approximately 426 million treasury checks and close to 407 million electronic fund transfer payments annually for federal salaries and wages, payments to suppliers of goods and services to the federal government, income tax refunds, and payments under major government programs such as social security and veterans' benefits. The FMS also supervises the collection of government receipts and operates and maintains the systems for collecting these receipts. The service works with all federal agencies to improve the availability of collected funds and the reporting of collection information to the treasury.

Internal Revenue Service

The Office of the Commissioner of Internal Revenue was established by an act of July 1, 1862 (26 U.S.C.A. § 7802). The Internal Revenue Service (IRS) is responsible for administering and enforcing the internal revenue laws and related statutes, except those relating to alcohol, tobacco, firearms, and explosives. Its mission is to collect the proper amount of tax revenue at the least cost to the public and in a manner that warrants the highest degree of public confidence in the service's integrity, efficiency, and fairness.

To achieve that purpose, the IRS seeks to achieve the highest possible degree of voluntary compliance with the tax laws and regulations. It advises the members of the public of their rights and responsibilities, determines the extent of compliance and the causes of noncompliance, administers and enforces the tax laws, and seeks more efficient ways of accomplishing its mission.

The IRS determines, assesses, and collects internal revenue taxes, determines pension plan qualifications and exempt organization status, and prepares and issues rulings and regulations to supplement the provisions of the internal revenue code.

The sources of most revenues collected are individual income tax, social insurance, and retirement taxes. Other major sources include the corporation income, excise, estate, and gift taxes.

U.S. Mint

The establishment of a mint was authorized by an act of April 2, 1792 (1 Stat. 246). The Bureau of the Mint was established by an act of February 12, 1873 (17 Stat. 424) and recodified on September 13, 1982 (31 U.S.C.A. §§ 304, 5131). The name was changed to the U.S. Mint by secretarial order dated January 9, 1984.

The primary mission of the mint is to produce an adequate volume of circulating coinage for the United States to conduct its trade and commerce. The mint also produces and sells numismatic coins, American eagle gold and silver bullion coins, and national medals. In addition, the Fort Knox Bullion Depository is the primary storage facility for the nation's gold bullion.

Bureau of the Public Debt

The Bureau of the Public Debt was established on June 30, 1940, pursuant to the Reorganization Act of 1939 (31 U.S.C.A. § 306). Its mission is to borrow the money needed to operate the federal government, account for the resulting public debt, and issue treasury securities to refund maturing debt and raise new money.

The bureau fulfills its mission through six programs: commercial book-entry securities, direct access securities, savings securities, government securities, market regulation, and public debt accounting. The bureau issues and auctions treasury bills, notes, and bonds and manages the U.S. Savings Bond Program.

In addition, the bureau implements the regulations for the government securities market. These regulations provide for investor protection while maintaining a fair and liquid market for government securities.

Office of Thrift Supervision

The office of thrift supervision (OTS) was established as a bureau of the Treasury Department in August 1989 and became operational in October 1989 as part of a major reorganization of the thrift regulatory structure mandated by the Financial Institutions Reform, Recovery and Enforcement Act (103 Stat. 183). In that act, Congress gave the OTS authority to charter federal thrift institutions and serve as the primary regulator of approximately 1,700 federal and state-chartered thrifts belonging to the Savings Association Insurance Fund.

The office's mission is to regulate savings associations in order to maintain the safety, soundness, and viability of the industry and to support the industry's efforts to meet housing and other financial services needs. The OTS carries out this responsibility through risk-focused supervision that includes adopting regulations governing the savings and loan industry, examining and supervising thrift institutions and their affiliates, and enforcing compliance with federal laws and regulations. In addition to overseeing thrift institutions, the OTS also regulates, examines, and supervises holding companies that own thrifts and controls the acquisition of thrifts by such holding companies.

The office is headed by a director appointed by the president and confirmed by the Senate to serve a five-year term. The director also serves on the boards of the Federal Deposit Insurance Corporation and the Neighborhood Reinvestment Corporation.

further readings

Garten, Helen A. 2001. U.S. Financial Regulation and the Level Playing Field. New York: Palgrave Macmillan.

Kaufman, Judith C., ed. 2003. United States Department of the Treasury: Current Issues and Background. New York: Nova Science.

Sargent, Thomas J., and Francois R. Velde. 2002. The Big Problem of Small Change. Princeton, N.J.: Princeton Univ. Press.

Treasury Department. Available online at <www.ustreas.gov> (accessed August 14, 2003).

cross-references

Alcohol, Tobacco, Firearms, and Explosives, Bureau of; Banks and Banking; Drugs and Narcotics; Estate and Gift Taxes; Federal Budget; Homeland Security Department; Savings and Loan Association; Smuggling; Tariff; Taxation.