Gary Cohn Emerges From Trump Shadows Touting Dodd-Frank Overhaul

  • Former No. 2 at Goldman Sachs sells remake of financial rules
  • Cohn fills gap left as Treasury nominee awaits confirmation

Gary Cohn Fills Treasury Leadership Gap

President Donald Trump’s economic policies have a new public face, and it belongs to a Wall Street banker barely a month out of the No. 2 job at Goldman Sachs Group Inc.

Gary Cohn, who left Goldman’s glass-and-steel lower Manhattan headquarters for a West Wing office with enormous potential clout, is taking on an expanded role as he fills a gap while the new administration waits to seat its Treasury Secretary.

Gary Cohn at the White House.

Photographer: Andrew Harrer/Bloomberg

As director of the National Economic Council, one of the most influential White House posts, he played front man for Trump’s bid to overhaul financial regulations. Cohn made a series of television appearances on Friday to promote the president’s initial executive actions to undo Obama-era policies, including the Dodd-Frank law and a rule requiring financial advisers to act in their clients’ best interests.

“From the executive office, the number one priority we have is job growth,” Cohn said on Bloomberg Television. “We’ve been told we need deregulation to grow jobs in this country. We are not anti-regulation. We want smart regulation that allows our financial services to be the envy of the world.”

Read more: Why Trump wants to blow up Dodd-Frank -- a Q&A explainer

Cohn, 56, is stepping into a vacuum left by the delay in confirming another former Goldman Sachs banker, Steven Mnuchin, to the top job at Treasury. Senate Democrats boycotted a panel vote twice before Republicans advanced Mnuchin’s nomination to the floor without them. The Senate calendar and protocol indicate a final vote may be unlikely before mid-February. That would be the longest ever Treasury leadership gap between administrations.

Economic Policy

Enter Cohn, who doesn’t need Senate confirmation and has told people he expects to take an active role in driving economic policy. He’ll be charged with advancing Trump’s economic agenda of slashing taxes, promoting growth and cutting regulations.

Yet the shifting balances of power at the White House have confounded Cohn at times, according to two people familiar with the matter. Despite Cohn’s early advantage, he has expressed frustration to associates about working inside a White House dominated by big egos, sharp elbows and protectionist ideologies, anathema to a global financial powerhouse like Goldman Sachs, they said.

Nor has the Trump White House yet picked anyone to be chairman of the Council of Economic Advisers, the other traditional public spokesman for a president’s economic policies.

The promises of financial deregulation announced Friday and articulated by the longtime financial industry leader propelled financial stocks higher Friday. The 63-company S&P 500 Financials Index advanced 2 percent at 5 p.m. in New York. Goldman Sachs surged 4.6 percent and Morgan Stanley jumped 5.5 percent, the biggest gain since the day after the U.S. election on Nov. 9.

Cohn, who was on Capitol Hill meeting with members of Congress on Friday morning, has promised publicly to be a team player.

“There are many of us working in the White House,” Cohn said Friday. “We all have our areas of expertise and we’re all trying to work in our areas of expertise,” he said, adding that they’re trying to foster a collegial atmosphere.

Cohn is also trying to walk a fine line when it comes to the administration’s protectionist policies, such as tariff threats, criticism of trade pacts, plans to build a wall along the southern border and a ban on immigration from certain countries, another person said. Some of those measures have been widely criticized by top executives and the Wall Street elite, including Cohn’s former boss, Lloyd Blankfein.

Proximity to Trump

Cohn, who spent more than 25 years at Goldman and a decade as its second-in-command under Blankfein, was the most senior Goldman Sachs executive to join the new administration. His proximity to Trump -- his second-floor office in the West Wing is steps away from the Oval Office below -- has helped reassure some corporate leaders that the president will draw on business-world expertise when crafting policies.

"Gary Cohn is committed to enacting the President’s economic agenda through building a nation of strength, growth and prosperity,” Lindsay Walters, a White House spokeswoman, said in an e-mailed statement.

The National Economic Council that Cohn leads is a relatively recent addition to the White House staff, set up in 1993 under former President Bill Clinton as a counterpart to the president’s National Security Council. 

Cohn is staking out an unusually active role in a position that, while nominally meant to be a broker bringing together opinions from competing agencies and departments, has allowed some of his predecessors to leave deep imprints on policy.

Obama’s first NEC director, Larry Summers, is widely credited as the pre-eminent adviser in that administration’s response to the 2008 economic crisis.

Robert Rubin, the first person to hold the office and like Cohn a Goldman alum, prevailed in internal debates that set the administration on a course for prioritizing deficit reduction at the cost of many Clinton campaign promises. He would later serve as Treasury Secretary. He became so associated with the economic successes of the Clinton years that his name became a shorthand for the administration’s policies: Rubinomics.

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