Jack Lew's hearing before the Senate Finance Committee took place this morning. The job he is trying to get--Treasury Secretary--is, as the Senators reminded him, a very difficult one that has many facets. Along with questions about the budget and his time at Citigroup, Mr. Lew fielded inquiries about regulatory policy. His most notable response in the regulatory area was his assertion that Dodd-Frank has dealt with too big to fail. It depends what one means by dealing with too big to fail. If dealing with too big to fail means embracing it, Dodd-Frank dealt with too big to fail. If it means broadening the problem to encompass a whole new set of institutions, Dodd-Frank did that too. If, however, dealing with too big to fail means making it indisputably clear to creditors and shareholders that they are responsible for handling financial firm failures and associated losses, Dodd-Frank has fallen far short. If Mr. Lew is confirmed, he should take a second look at whether Dodd-Frank has effectively dealt with too big to fail. When he discovers that it has not, he should propose effective solutions that rely on market discipline rather than the vigilance and discretion of regulators.