Introduction
The U.S. Treasury, created in 1789, stands as the backbone of America’s financial infrastructure, managing everything from currency production to debt issuance. Key functions encompass printing bills, minting coins, collecting taxes, enforcing tax laws, managing all government accounts, debt issues, and oversight of banks in collaboration with the Federal Reserve. The range of government departments under its umbrella includes the Internal Revenue Service (IRS), U.S. Mint, Bureau of the Fiscal Service, and the Alcohol and Tobacco Tax and Trade Bureau.
Core Responsibilities
- Managing Federal Finances: Orchestrating the collection of federal taxes and paying government bills.
- Issuing Treasury Bonds and Bills: Providing secure investment options and financing government borrowing.
- Overseeing Currency Production: Printing bills, Federal Reserve notes and minting coins to keep the economy afloat.
- Enforcing Financial Laws: Ensuring compliance with tax and financial regulations nationwide.
- International Financial Policy: Directed by the Treasury Secretary, involving foreign exchange interventions and economic partnerships.
Understanding the U.S. Treasury
Formed by the First Congress of the United States on March 4, 1789, the U.S. Treasury was integral to promoting economic growth and maintaining financial security. The Secretary of the Treasury is a vital role requiring presidential nomination and Senate confirmation.
Historical Context
Following the ratification of the U.S. Constitution in 1788, which empowered a stronger federal government, Alexander Hamilton became the first Treasury Secretary, instituting major financial systems, such as managing state debts from the Revolution, paying war bonds, and organizing tax collection.
The Internal Revenue Service (IRS)
Established in 1862, one year after President Lincoln imposed an income tax to finance the Civil War, the IRS has continued to evolve—culminating in its current responsibility for enforcement and collection since the 1913 ratification of the 16th Amendment.
Treasury Bills and Bonds
The Treasury issues both short-term notes known as bills and long-term securities known as bonds, which can have maturity periods extending up to 30 years. Treasury bonds’ robust backing by the full faith and credit of the U.S. government renders them highly attractive to global investors.
Leadership
Headed by the Treasury Secretary, nominated by the President and confirmed by the Senate, the current head is Janet Yellen, notable for being the first woman to hold both that role and former Chair of the Federal Reserve. Supporting her is Deputy Secretary Wally Adeyemo, an Obama administration veteran with substantial expertise in macroeconomic policy, consumer protection, and national security.
Related Terms: Federal Reserve, monetary policy, tax laws, national debt.
References
- U.S. Department of the Treasury. “History of the Treasury”.
- U.S. Department of the Treasury. “Bureaus”.
- U.S. Department of the Treasury. “Role of the Treasury”.
- U.S. Department of the Treasury. “Duties and Functions FAQs”.
- U.S. Department of the Treasury. “Janet Yellen”.
- U.S. Department of the Treasury. “Janet L. Yellen Sworn In As 78th Secretary of the United States Department of the Treasury”.
- The Library of Congress. “The United States Constitution”.
- Library of Congress. “To Form a More Perfect Union”.
- U.S. Department of the Treasury. “Alexander Hamilton (1789-1795)”.
- Internal Revenue Service. “IRS History Timeline: Taxes and Revenue”.
- U.S. National Archives and Records Administration. “16th Amendment to the U.S. Constitution: Federal Income Tax (1913)”.
- TreasuryDirect. “About Treasury Marketable Securities”.
- U.S. Securities and Exchange Commission, Investor. “Bonds”.
- Federal Reserve Board. “FAQs: What Is the Purpose of the Federal Reserve System?”
- Federal Reserve Board. “Monetary Policy: What Are Its Goals? How Does It Work?”
- U.S. Department of the Treasury. “Wally Adeyemo”.
