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.
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.
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.