United States Senate Committee on Finance

Committee information

• Date created: December 11, 1815
• Members: Twenty-seven members in the 119th Congress (2025)
• Subcommittees: International Trade, Customs, and Global Competitiveness; Taxation and IRS Oversight; Health Care; Energy, Natural Resources, and Infrastructure; Fiscal Responsibility and Economic Growth; Social Security, Pensions, and Family Policy

Role

The United States Senate Committee on Finance is a legislative committee presided over by members of the Senate. The committee oversees legislative affairs related to a range of federal finance matters. Its primary responsibility lies with taxation and general revenue measures as well as those relating to insular possessions, or US territories that lay outside the fifty US states and the District of Columbia. The Finance Committee oversees tax collection districting. It also oversees the bonded debt of the United States as well as customs and corresponding ports of entry and delivery in relation to shipping. In terms of trade, it has jurisdiction over reciprocal trade agreements, tariff and import quotas, and the transportation of goods liable to customs. Its jurisdiction also covers deposit of public moneys, revenue sharing, and national social security. The committee holds authority over several health programs outlined by the Social Security Act (SSA) and its amendments, including Medicare and Medicaid, the Children’s Health Insurance Program (CHIP), Temporary Assistance for Needy Families (TANF), and any other health and human services programs financed by taxes.

The Finance Committee shares jurisdiction with several other congressional committees, including the Senate’s Agriculture, Forestry and Nutrition Committee; the Banking Committee, the Environment and Public Works Committee; the Health, Education, Labor, and Pension Committee; and the Homeland Security and Governmental Affairs Committee, among others. As of the 119th Congress, it consisted of six subcommittees, which included the Subcommittee on International Trade, Customs, and Global Competitiveness; the Subcommittee on Taxation and IRS Oversight; the Subcommittee on Health Care; the Subcommittee on Energy, Natural Resources, and Infrastructure; the Subcommittee on Fiscal Responsibility and Economic Growth; and the Subcommittee on Social Security, Pensions, and Family Policy.

The committee consisted of twenty-seven members as of the 119th US Congress. During this Congress, the Republican Party chaired the committee as the majority party in the Senate. Republican Senator Mike Crapo served as chairman, while minority Democratic Senator Ron Wyden served as ranking member.

During the 119th Congress, the Finance Committee was one of sixteen standing committees within the US Senate. Standing committees are also known as permanent committees. They have jurisdiction over certain legislative matters on a permanent basis unless the Senate votes for their dissolution. All Senate committees contain several subcommittees. Subcommittees oversee specific matters related to the larger committee and must report back to the full committee. During the 119th Congress, the Senate comprised over sixty subcommittees within its sixteen standing committees. While House committees are limited to only five subcommittees, Senate committees do not limit the number of subcommittees created by a standing committee.

History

The Senate adopted a new rule to create select committees in the early 1800s. These committees examined proposed specific legislation and reported back to the Senate’s presiding officer. Through this rule, the 14th Congress established the Select Committee on Finance and an [sic] Uniform National Currency in December 1815. The committee was tasked with handling certain finance proposals outlined by President James Madison.

The Select Committee on Finance and an [sic] Uniform National Currency dealt with two major congressional issues soon after its formation: the Tariff Act of 1816 and the Bank Act that authorized the Second Bank of the United States. The Tariff Act cancelled parts of the debt the United States had accrued during the War of 1812 (1812–1815). The Bank Act stabilized the country’s out-of-control financial system by establishing a stable national currency.

The Senate formally established standing committees as part of the Senate Rules in 1816. On December 10 of that year, the Senate designated the Committee on Finance as an official standing committee. In its early years, the finance committee shared jurisdiction over many financial matters, specifically tariff legislation. These matters were divided between the Finance Committee and the Committee on Commerce and Manufacturers.

As the years passed, tariff legislation became a point of contention among various regions of the country. Some regions demanded lower tariffs while others wanted to protect high tariffs. The Senate settled the dispute by drawing up a bill designed to reduce tariffs gradually over a ten-year period. Alongside calming tensions over tariffs, the bill cemented the Finance Committee’s authority over international trade and moved tariff matters away from the hands of the Commerce and Manufacturers Committee.

The committee’s authority was further solidified over the next few decades as the members took control of banking, tariffs, taxation, federal appropriations, and currency matters. The committee was instrumental in several essential financial issues during this period and influenced the creation of the Department of the Interior in 1849. During the American Civil War (1861–1865), the Finance Committee funneled all government funds into the war effort, raising additional funds through tariffs and instituting the country’s first income tax. In 1862, the committee created the Legal Tender Act, authorizing the use of paper currency to pay government bills.

The Finance Committee’s responsibilities had grown too large for one single committee to handle, so the Senate passed a resolution to split its responsibilities among several newly created committees over the next few decades. In 1867, the committee handed over its jurisdiction over federal appropriations to the newly formed Senate Appropriations Committee. The Finance Committee would later play a central role in the federal income tax debates of the late nineteenth and early twentieth century. Reinstating a federal income tax was proposed to help alleviate federal debt, but such a measure was originally ruled unconstitutional. Support for an income tax increased by the early 1900s, however. Finance Committee Chairman Nelson Aldrich made a compromise with the Senate to allow for an income tax if tariffs would increase, leading to the eventual passage of the Sixteenth Amendment in 1913, which instituted the country’s first peacetime income tax.

That same year, the Finance Committee lost jurisdiction over banking and currency matters with the creation of the Committee on Banking and Currency. Its role in the affairs of the country’s veterans increased, however. Following World War I (1914–1918), the committee proposed several measures related to veterans’ benefits and oversaw legislation designed to compensate veterans for their service.

The Finance Committee’s jurisdiction over taxation put them in control of several pieces of New Deal legislation throughout the Great Depression of the 1930s. Although many of their efforts were not very successful, the Finance Committee oversaw the passage of one of the most significant pieces of legislation in American history, the Social Security Act (SSA) of 1935. The committee designed new income taxes to pay for the program, which would provide benefits to the older adult population, dependent children, and the unemployed. The bill had lasting effects on the welfare of older Americans and greatly improved their economic standing. It also greatly increased government revenue. The Finance Committee became responsible for all new programs and activities funded by the act in the years to come.

The committee also played a major part in the passage of the Servicemen’s Readjustment Act of 1944, also known as the G.I. Bill, following World War II (1939–1945). This bill financed continuing education and professional training for returning veterans to boost the nation’s supply of skilled workers and jumpstart the economy. The Finance Committee would examine multiple pieces of post-war legislation throughout the 1950s and 1960s, including the Internal Revenue Code of 1954, the Trade Expansion Act of 1962, and the Social Security Amendments of 1965, which created Medicaid and Medicare to provide medical insurance to low-income Americans and older adults.

The Finance Committee also oversaw a number of tax reform efforts throughout the late twentieth century, such as the Tax Reform Act of 1969, created to ensure the wealthiest Americans paid their fair share of taxes. The late 1960s also saw Congress reanalyzing the structure of legislative committees. The Legislative Reorganization Act of 1970 made a number of changes to the way committees operated, specifically by requiring the creation of subcommittees to deal with specific issues within a committee. Within three years, the Finance Committee had increased its number of subcommittees from one to seven. This law also led to the committee’s loss of jurisdiction over veterans’ affairs with the creation of the Veterans’ Affairs Committee.

As the committee approached the twenty-first century, it continued to oversee Social Security benefits and expansions, including the Social Security Amendments of 1972, which created the Supplemental Security Income program, among other benefits. During the administration of President Ronald Reagan, the Finance Committee deliberated numerous tax reform bills proposed by the president, eventually leading to the Tax Reform Act of 1986.

The committee weighed in on a number of legislative issues over the next few decades. The committee examined the North American Free Trade Agreement (NAFTA) in the early 1990s in regard to how it would affect taxation. It helped create the Children’s Health Insurance Program (CHIP). It also organized several changes to the Internal Revenue Service (IRS) reform legislation and investigated allegations that the IRS implemented abusive tactics.

Throughout the early 2000s, the committee approved several free trade agreements and recommended additional tax cuts in the Jobs and Growth Tax Reconciliation Act of 2003. It was also instrumental in the health care reform efforts under President Barack Obama in 2009 and 2010, resulting in the landmark Patient Protection and Affordable Care Act of 2010. In 2016, the committee celebrated its bicentennial anniversary with the passage of one of the nation’s largest tax overhauls in decades, reforming the US tax code substantially.

Subcommittees

As of the 119th Congress, the United States Senate Committee on Finance was divided into six subcommittees, each of which examined specific matters. Each subcommittee had its own chair and ranking member as dictated by the majority and minority parties in Congress. During the 119th Congress, Republicans held the majority in the Senate.

United States Senate Committee on Finance Subcommittee on International Trade, Customs, and Global Competitiveness

This subcommittee focuses on the related areas of international trade and customs as well as the area of global competitiveness. It deals with matters relating to collection districts and transportation of dutiable goods, as well as ports of entry and delivery in relation to customs. It also examines reciprocal trade agreements and oversees tariffs related to trade.

United States Senate Committee on Finance Subcommittee on Taxation and IRS Oversight

This subcommittee helps ensure government oversight of IRS operations to prevent abusive tactics and other inappropriate tax collection practices. Its primary responsibility is to analyze all legislation that affects taxation. It also oversees the deposit of public moneys and general revenue sharing, or how the government apportions its tax income to other areas of government.

United States Senate Committee on Finance Subcommittee on Health Care

This subcommittee deals with health care matters as outlined under the SSA or those financed by specific taxes or trust funds. This includes legislation related to programs created under the SSA or its amendments, such as Medicaid, Medicare, CHIP, and TANF. It has held hearings on issues such as opioid abuse prevention efforts within the Medicare and Medicaid system.

United States Senate Committee on Finance Subcommittee on Energy, Natural Resources, and Infrastructure

This subcommittee examines taxation affairs related to the usage of energy and natural resources as well as the creation of infrastructure. In the past, the subcommittee has held hearings about enhancing energy security, promoting energy efficiency, achieving emissions benefits, and reforming energy tax policy.

United States Senate Committee on Finance Subcommittee on Fiscal Responsibility and Economic Growth

This subcommittee is tasked with ensuring the committee is fiscally responsible, and it examines matters designed to boost economic growth. It oversees issues related to the government budget and revenue measures affecting said budget. It also oversees the bonded debt of the United States. Past hearings have focused on how tax reform affects the federal deficit, fiscal policy, and, by extension, state and local taxes.

United States Senate Committee on Finance Subcommittee on Social Security, Pensions, and Family Policy

This subcommittee oversees tax and healthcare initiatives related to the SSA, specifically those related to pensions and family policy. The subcommittee has dealt with issues related to paid family leave for working families and economic security for individuals with disabilities and older adults. It also oversees policies that affect pensions from work not covered by social security.

Bibliography

“About the Senate Committee System.” United States Senate, Mar. 2018, www.senate.gov/general/common/generic/about‗committees.htm. Accessed 10 Feb. 2025.

“Federal Oversight Organizations.” Internal Revenue Service, 15 Mar. 2018, www.irs.gov/about-irs/irs-oversight-organizations. Accessed 10 Feb. 2025.

“Hearings.” United States Senate Committee on Finance, www.finance.senate.gov/hearings?PageNum‗rs=1&maxrows=999999. Accessed 10 Feb. 2025.

Heitshusen, Valerie. “Committee Types and Roles.” United States Congress, 2 May 2017, sgp.fas.org/crs/misc/98-241.pdf. Accessed 10 Feb. 2025.

“History.” United States Senate Committee on Finance, www.finance.senate.gov/about/history. Accessed 10 Feb. 2025.

“History of the Committee on Finance.” United States Senate Committee on Finance, 12 Mar 1981, www.finance.senate.gov/imo/media/doc/history.pdf. Accessed 10 Feb. 2025.

“Jurisdiction.” United States Senate Committee on Finance, www.finance.senate.gov/about/jurisdiction. Accessed 10 Feb. 2025.

“Subcommittees.” United States Senate Committee on Finance, www.finance.senate.gov/about/subcommittees#international. Accessed 10 Feb. 2025.