What you need to know is that he’s a crook, an idiot, and most most of the Republicans in the Senate voted to confirm him.
Finally, Sessions pointed out that “at his hearing, Mr. Donovan could not answer fundamental questions from Senator Johnson about the Social Security Trust Fund.” During that hearing, Johnson asked Donovan if he found agreement with how the White House Office of Management and Budget (OMB) — which Donovan now heads — described the Social Security Trust Fund in 2010. As Johnson summarized the OMB report, “you have an asset in the Trust Fund offset by the liability, netting to zero value for the federal government.”
Donovan’s answer was to regurgitate political talking points. Specifically, he said that “it’s important for seniors to understand that those are full faith and credit obligations of the U.S. government…” He then said that — emphasis added — “if [the Trust Fund and liabilities] are offsetting, I believe…that the Trust Fund is a useful tool for the American people and seniors to understand transparently the long-term costs of Social Security.”
Donovan followed this non-answer with several nonsensical responses to Johnson’s next question, regarding how the Treasury would redeem Trust Fund assets in the form of Treasury bonds. He appeared to not know the proper answer: that taxes would have to rise, benefits would have to be cut, or more debt would have to be incurred.
He did eventually confess, at least in part, to a piece of the truth: that deficits greater than what could be funded by existing revenues “would have to be financed.” In other words, the federal government would have to borrow the money.
Clearly, what a senior Senate aide told me is correct: Donovan does not understand what the Social Security Trust Fund is, or the severity of Social Security’s financial problems.
Yet the Senate Budget Committee approved his nomination, and the Senate allowed him to head up one of the most important finance-related offices in the federal government. In a statement to me, Johnson, who voted against Donovan, said that he did so because Donovan was dishonest.
“Congressional Budget Office Director Doug Elmendorf and Federal Reserve Chair Janet Yellen were willing to acknowledge what the Office of Management and Budget’s own publication stated — that the trust fund consists of an asset offset by a liability, netting to zero,” said the Senator. “They were willing to be truthful with the American public. Shaun Donovan was not.”
It is not just a lack of knowledge that should have kept Donovan from heading up OMB. Sessions’ speech also highlighted a fraud investigation taking place by the Inspector General (IG) of HUD. According to the IG report, published on May 30 of this year, a non-staff consultant for HUD was paid $622,369 from February 14, 2011 through February 27, 2014, from an account that was illegally accessed for the payments.
As one Hill staffer told me, “we could see the OMB director simultaneously in office and in jail” over the investigation.