DEFINITION of 'Treasury Secretary'

The Treasury secretary is the head of the U.S. Department of the Treasury; the position is one of the most important in the executive branch and is analogous to that of finance minister in other countries. 

BREAKING DOWN 'Treasury Secretary'

The Treasury secretary is a member of the president's cabinet and the fifth in the line of succession to president. As head of the Department of the Treasury, the secretary is the president's principal economic adviser, recommending domestic and international policies with a particular focus on tax policy. The Treasury secretary is appointed by the president, subject to confirmation by the Senate.

The Treasury secretary focuses on fiscal policy, while the nation's monetary policy is the responsibility of its central bank, the Federal Reserve. While legislation governs the Fed's mission and its leadership is appointed by the president, it is independent and not housed in any branch of the federal government.

Responsibilities

The Treasury issues the national debt in the form of Treasury securities. It collects the federal government's tax revenue through the Internal Revenue Service (IRS).

From 1862 to 1971, the Treasury issued the nation's paper money, known as United States notes. Since 1971 U.S. paper currency has been issued by the Federal Reserve, but the Treasury secretary must still sign these notes for them to become legal tender. The Bureau of Engraving and Printing, which manufactures the notes, is an agency of the Treasury; the U.S. Mint, another Treasury agency, produces the nation's coins.

Through the Office of Foreign Assets Control, the Treasury enforces economic sanctions against foreign countries, companies and individuals. 

Prior to 2003, the Treasury held law enforcement responsibilities through the the Customs Service, the Bureau of Alcohol, Tobacco, Firearms and Explosives, and the Secret Service. These agencies were merged with the newly created Department of Homeland Security.

History

The first Treasury secretary was Alexander Hamilton, George Washington's aide-de-camp during the Revolutionary War, who served from Sept. 11, 1789 to Jan. 31, 1795. His contributions to the Treasury's development include the establishment fo the U.S. Mint, the First National Bank (though its charter was allowed to lapse in 1811), and the full funding of the national debt — together with the assumption of states' debts — which established the U.S.'s reputation as a reliable borrower. Today Treasury securities are considered among the safest investments in the world, and their interest rate is often used a proxy for the theoretical risk-free rate of return.

RELATED TERMS
  1. Treasury Budget

    The treasury budgets is a monthly statement that accounts for ...
  2. Treasury Stock (Treasury Shares)

    Treasury stock is outstanding stock the issuing company buys ...
  3. Treasury Yield

    Treasury yield is the return on investment, expressed as a percentage, ...
  4. One-Day Certificate

    A one-day certificate was a type of temporary Federal Reserve ...
  5. Treasury Bond - T-Bond

    A treasury bond is a marketable, fixed-interest U.S. government ...
  6. Government Paper

    Government Paper are debt securities that are issued or guaranteed ...
Related Articles
  1. Insights

    What Are the Duties of the Treasury Secretary?

    The Secretary of the Treasury is one of the most powerful positions in the U.S. federal government.
  2. Investing

    The Treasury and the Federal Reserve

    Find out how these two agencies create policies to manage the economy and keep it on an even keel.
  3. Investing

    Understanding Treasury Yield

    Treasury yield refers to the return on an investment in a U.S. government debt obligation, such as a bill, note or bond.
  4. Investing

    The Importance Of U.S. Treasury Rates

    U.S. Treasury bond interest rates affect more than just bondholders! It impacts the day to day lives of all consumers.
  5. Investing

    A Look At National Debt And Government Bonds

    Learn the functions of the U.S. Treasury, and find out how and why it issues debt.
  6. Financial Advisor

    Top 4 Treasurys ETFs (SHY, IEI)

    Learn about the specifics of the top four U.S. Treasury ETFs and how investors can buy ETFs that invest in bonds along the yield curve.
  7. Investing

    China Dumps U.S. Treasury Securities in December

    On Tuesday, Treasury International Capital (TIC) data was released by the U.S. Department of the Treasury, which revealed that China’s holding of U.S. Treasury bonds in December has declined ...
  8. Insights

    What Are the Duties of the US Secretary of Labor?

    The position of US Secretary of Labor is a Cabinet-level post. What exactly does he or she do exactly?
  9. Investing

    The Brexit Effect on U.S. Mortgage Rates

    The Brexit vote is expected to create a continuing investor rush to buy U.S. Treasuries as a safe-haven, resulting in lower mortgage rates for borrowers in the U.S.
RELATED FAQS
  1. How are treasury bills (T-bills) taxed?

    Lear how the Internal Revenue Service collects taxes on treasury bills (T-bills) purchased from the United States government ... Read Answer >>
  2. What's the difference between a capital stock and a treasury stock?

    Learn about treasury capital stock, how to calculate a company's capital and treasury stock, and the differences between ... Read Answer >>
  3. What are the risks of investing in Treasury bonds?

    Read about the risks of investing in risk-free U.S. Treasury bonds, including interest rate risk, inflation risk and opportunity ... Read Answer >>
  4. The interest rate used to define the “risk-free” rate of return is the

    a. discount rate.b. 90-day Treasury bill rate.c. five-year Treasury note rate.d. federal funds rate. Answers: bThe 90-day ... Read Answer >>
Trading Center