Introduction
Amira and her friends are planning a big party for Sadie’s birthday, and Amira is in charge of the finances. She creates a budget to keep track of where their group’s money will go and how much each person will give, then collects that money from each person and pays the bills for their gifts and decorations. After the party, Amira writes up a report on how much money they spent and where, so everyone can see where their money went.
Explanation
Like Amira, the Department of the Treasury is the department in charge of handling the finances of the U.S. and paying bills. It collects money from people in the U.S. in the form of taxes, which then go toward things like social services, paying government employees, and defense. The Department is also in charge of publishing statistical reports, like where tax dollars go. However, unlike Amira, it also has several other duties, all of them are related to securing the financial security of the U.S., such as producing and circulating the currency we use.
Department of the Treasury
Congress established the U.S. Department of the Treasury (USDT) on September 2, 1789 to have a permanent institution that could manage the finances of the recently-created government. It is an executive department of the federal government, which means that its head, the Secretary of the Department of the Treasury, serves on the Cabinet. The Cabinet is a group that advises the president, made up of the vice president and the heads of executive departments. The position of Secretary is held by a person who the president appointed, and the Senate then confirmed. Today, the Department is responsible for promoting economic security. The USDT has two primary components: the offices, which are in charge of forming policy and management, and the bureaus, which are responsible for carrying out specific operations.
The History
During the Revolutionary War, the Continental Congress, a group of leaders from the thirteen colonies, performed the duties of the Treasury. They had no power to tax people, but still needed money, so they decided to print paper bills. They also received some foreign loans that helped finance the revolution and, in 1775, required colonies to contribute money to the government funds. However, since the government wasn’t making much money, the currency soon started to decline in value. The phrase “Not worth a continental,” with a continental being the new American currency rather than the old British currency, comes from the worthlessness of the money at the time. Because of the rapid collapse of the value of the dollar, in 1781, protests began.
Later in 1781, Robert Morris was made Secretary of the Finances. When he grew ill in 1784, the Treasury Board oversaw finances until 1789. On September 2, 1789, Congress created a permanent institution to handle the nation’s finances and formed the Department of the Treasury. Alexander Hamilton, the first Secretary of the Treasury, was chosen to help solve the issues of America’s war debts.
Throughout the years, the duties of the USDT have varied as different operations became their own departments, like the Postal Office and the Coast Guard. Today, the primary responsibilities of the USDT include economic policy, enforcing tax laws, producing coin and currency, and supervising national banks. Additionally, the USDT is responsible for managing federal finances, paying all U.S. bills, and publishing statistical reports. For instance, the USDT publishes yearly reports on how the government allocates the money gathered from taxes.
The USDT has several sub-agencies. The Internal Revenue Service (IRS) administers federal tax laws and investigates criminal activities like tax fraud. Every year, adults in American have to file tax returns on their income from the previous year. The U.S. Mint manufactures and distributes coins and national medals, while the Bureau of Engraving and Printing is in charge of paper currency.
Around 87,000 people work for the USDT on the federal, state, and local level. The main office is located in the Treasury Building, which was burnt down twice, first by the British and later by an arsonist hoping to destroy incriminating pension records. Construction of the new Treasury Building finished in 1869, and it remains today, the oldest departmental building in Washington, D.C. The USDT employs people from a variety of professions, from accountants to chemists to criminal investigators.
Why Care?
The USDT has a tremendous impact on the lives of everyone living in America, as without it, there would be no standardized currency! By the time of the Revolutionary War, there were three different types of currency, and many of the colonies began issuing their own paper money. Today, with fifty states and hundreds of millions of people, a standardized currency that the whole country accepts is crucial. The USDT also ensures that the U.S. can continue to fund public services, like schools and libraries. While it is not in charge of the federal budget, it is in charge of enforcing the federal taxes Congress passes, which is what finances that budget.
