[Senate Hearing 113-389]
[From the U.S. Government Publishing Office]



                                                        S. Hrg. 113-389

 
                   NOMINATIONS OF SARAH BLOOM RASKIN 
                         AND RHONDA SCHMIDTLEIN

=======================================================================

                                HEARING

                               before the

                          COMMITTEE ON FINANCE
                          UNITED STATES SENATE

                    ONE HUNDRED THIRTEENTH CONGRESS

                             FIRST SESSION

                                 on the

                             NOMINATIONS OF

SARAH BLOOM RASKIN, TO BE DEPUTY SECRETARY, DEPARTMENT OF THE TREASURY; 
      AND RHONDA SCHMIDTLEIN, TO BE A MEMBER OF THE UNITED STATES 
                     INTERNATIONAL TRADE COMMISSION

                               __________

                           NOVEMBER 20, 2013

                               __________

                                     
                                     

            Printed for the use of the Committee on Finance


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                          COMMITTEE ON FINANCE

                     MAX BAUCUS, Montana, Chairman

JOHN D. ROCKEFELLER IV, West         ORRIN G. HATCH, Utah
Virginia                             CHUCK GRASSLEY, Iowa
RON WYDEN, Oregon                    MIKE CRAPO, Idaho
CHARLES E. SCHUMER, New York         PAT ROBERTS, Kansas
DEBBIE STABENOW, Michigan            MICHAEL B. ENZI, Wyoming
MARIA CANTWELL, Washington           JOHN CORNYN, Texas
BILL NELSON, Florida                 JOHN THUNE, South Dakota
ROBERT MENENDEZ, New Jersey          RICHARD BURR, North Carolina
THOMAS R. CARPER, Delaware           JOHNNY ISAKSON, Georgia
BENJAMIN L. CARDIN, Maryland         ROB PORTMAN, Ohio
SHERROD BROWN, Ohio                  PATRICK J. TOOMEY, Pennsylvania
MICHAEL F. BENNET, Colorado
ROBERT P. CASEY, Jr., Pennsylvania

                      Amber Cottle, Staff Director

               Chris Campbell, Republican Staff Director

                                  (ii)
?



                            C O N T E N T S

                               __________

                           OPENING STATEMENTS

                                                                   Page
Baucus, Hon. Max, a U.S. Senator from Montana, chairman, 
  Committee on Finance...........................................     1
Hatch, Hon. Orrin G., a U.S. Senator from Utah...................     3
Cardin, Hon. Benjamin L., a U.S. Senator from Maryland...........     7

                                WITNESS

Sarbanes, Hon. Paul, former U.S. Senator from Maryland...........     5

                        ADMINISTRATION NOMINEES

Raskin, Sarah Bloom, nominated to be Deputy Secretary, Department 
  of the Treasury, Washington, DC................................     8
Schmidtlein, Rhonda, nominated to be a member of the United 
  States International Trade Commission, Washington, DC..........    10

               ALPHABETICAL LISTING AND APPENDIX MATERIAL

Baucus, Hon. Max:
    Opening statement............................................     1
    Prepared statement...........................................    27
Cardin, Hon. Benjamin L.:
    Opening statement............................................     7
Hatch, Hon. Orrin G.:
    Opening statement............................................     3
    Prepared statement...........................................    29
Raskin, Sarah Bloom:
    Testimony....................................................     8
    Prepared statement...........................................    31
    Biographical information.....................................    34
    Responses to questions from committee members................    46
Sarbanes, Hon. Paul:
    Testimony....................................................     5
Schmidtlein, Rhonda:
    Testimony....................................................    10
    Prepared statement...........................................    80
    Biographical information.....................................    82
    Responses to questions from committee members................    89

                                 (iii)


 NOMINATIONS OF SARAH BLOOM RASKIN, TO BE DEPUTY SECRETARY, DEPARTMENT 
                                   OF
  THE TREASURY; AND RHONDA SCHMIDTLEIN, TO BE A MEMBER OF THE UNITED 
                                 STATES
                     INTERNATIONAL TRADE COMMISSION

                              ----------                              


                      WEDNESDAY, NOVEMBER 20, 2013

                                       U.S. Senate,
                                      Committee on Finance,
                                                    Washington, DC.
    The hearing was convened, pursuant to notice, at 10:18 
a.m., in room SD-215, Dirksen Senate Office Building, Hon. Max 
Baucus (chairman of the committee) presiding.
    Present: Senators Wyden, Menendez, Cardin, Brown, Hatch, 
Grassley, Crapo, and Thune.
    Also present: Democratic Staff: Mac Campbell, General 
Counsel; Rory Murphy, International Trade Analyst; Lynn Becker, 
Deputy Clerk; Carla Martin, Senior Advisor; and Tiffany Smith, 
Tax Counsel. Republican Staff: Chris Campbell, Staff Director; 
Nicholas Wyatt, Tax and Nominations Professional Staff Member; 
Rebecca Eubank, Staff Assistant; and Jeff Wrase, Chief 
Economist.

   OPENING STATEMENT OF HON. MAX BAUCUS, A U.S. SENATOR FROM 
            MONTANA, CHAIRMAN, COMMITTEE ON FINANCE

    The Chairman. The hearing will come to order.
    Abigail Adams, the wife of President John Adams, once 
asked, and I quote, ``If we do not lay out ourselves in the 
service of mankind, whom should we serve?''
    Joining us today are two people nominated to serve in 
critical roles in the government: Sarah Bloom Raskin, the 
President's nominee to be Deputy Secretary of the Treasury; and 
Rhonda Schmidtlein, nominee to be a member of the International 
Trade Commission.
    I reviewed your backgrounds and your economic policy 
experience. You are both well-qualified and have proven 
yourselves to be extraordinary public servants.
    Ms. Raskin, you served as Maryland's Commissioner of 
Financial Regulation during the financial crisis, and, for many 
years, you served as counsel on the Senate Banking Committee. 
Your current role as Federal Reserve Governor gives you 
valuable insight into our Nation's economy.
    Your nomination also marks a milestone. If confirmed, you 
would be the highest-ranking woman in the history of the 
Treasury Department. [Applause.]
    It is not often I get applause, especially in the middle of 
an opening statement. [Laughter.]
    Senator Hatch. It was not for you.
    The Chairman. No.
    If there is one thing to be sure of about being Deputy 
Secretary of Treasury, it is that you will have to wear many 
hats, and I am confident that you can. And you will need to, 
because the Treasury faces a lot of challenges.
    First and foremost, the Treasury must keep working to 
strengthen our economy. The 7.3-percent unemployment rate is 
far too high, and the tepid economic growth over the last few 
years cannot continue. We must do better.
    Treasury must also help foster and manage our relationships 
with important trading partners around the world, including 
China. We are at the pivotal stage with our trade agenda. There 
are huge opportunities for us to boost exports and reinforce 
trade ties, and Treasury must help seize them.
    Your responsibilities at Treasury will also include helping 
to rebuild the trust of the American people in the Internal 
Revenue Service. At the confirmation hearing for your 
predecessor, I stressed the importance of transparency at 
Treasury and fairness at the IRS. Four years later, I stress 
these same points to you, Ms. Raskin.
    The revelations about IRS's inappropriate screenings of 
501(c)(4)s shook the public's confidence. You will be part of 
the team that works to regain it.
    You will also be part of the team at Treasury responsible 
for helping Congress create sound tax reform policy. That team 
will need to be available and ready to act when the time comes. 
Tax reform is an important endeavor, and we have to get it 
right. And I, frankly, tell you I very much appreciated 
Secretary Lew's comments yesterday in support of tax reform. We 
need to work together to make our tax system more fair, more 
simple for American businesses and families.
    Ms. Schmidtlein, you have an extensive legal background in 
trade. You have worked as a trade lawyer for the Department of 
Justice, USTR, and in the private sector.
    If confirmed, this committee will ask a lot of you. You 
will need to fairly consider the cases before the ITC and 
enforce our trade laws objectively. You will need to ensure 
that the ITC continues to provide us with high quality, timely 
advice to advance our trade agenda.
    That agenda includes a singular opportunity to boost jobs 
and growth in our country. Between ongoing talks with nations 
across the Pacific and in Europe, we are negotiating trade 
deals covering two-thirds of global GDP. The ITC plays a 
critical role in providing Congress and our negotiators with 
the facts they need to ensure that these trade deals work for 
American families and for American workers and businesses.
    As you take on this ambitious agenda, keep in mind the 
story of former ITC Chairman Will Leonard. In 1975, the ITC 
faced daunting hurdles. First, Congress had just expanded ITC's 
role in the Trade Act of 1974. With a small number of 
employees, the agency was being asked to do a whole lot more.
    Second, his office building, a third of which was 
condemned, was falling apart. In a cramped, unpainted meeting 
room, Chairman Leonard met with the ITC staff, and here is what 
he said, and I am quoting him: ``If we are excited and 
interested in our work, our surroundings will take on a glow 
that could never be transmitted by mere paint and plaster. It 
is my pledge to you that we can make this place hum.''
    If you apply Chairman Leonard's lesson, I have no doubt 
that you will succeed. And do not worry, the offices are no 
longer in disrepair.
    Over the last 20 years, seven of eight nominees for Deputy 
Secretary of the Treasury have been unanimously confirmed by 
the Senate, as have all of the last 14 nominees for the ITC. I 
hope we can carry on that tradition.
    Thank you both for your service. You are top-notch 
candidates. I strongly support your nominations, and I hope we 
can work very quickly so that you can get to work, not only for 
yourselves but, much more importantly, for the American people.
    Thank you very much.
    [The prepared statement of Chairman Baucus appears in the 
appendix.]
    The Chairman. Senator Hatch?

           OPENING STATEMENT OF HON. ORRIN G. HATCH, 
                    A U.S. SENATOR FROM UTAH

    Senator Hatch. Well, thank you, Mr. Chairman, for holding 
today's hearing. I also want to thank our two nominees for 
joining us.
    Governor Raskin, if confirmed as Deputy Secretary of the 
Treasury, you will be making an interesting transition from the 
monetary to the fiscal sphere, both of which, in my view, need 
improvements when it comes to transparency. It is my hope that, 
if you make this transition, you will work with us to improve 
the lines of communication between the Treasury Department and 
the Congress.
    On the monetary side, the Federal Reserve has, in my 
assessment, been treading perilously into the sphere of fiscal 
policy. Treasury and the rest of the administration, not to 
mention many in Congress, have been content to outsource 
decisions, such as the maturity structure of our debt, to the 
Fed and, in the process, have anointed the Fed with power over 
what are essentially fiscal policy matters.
    Relatedly, the Fed made a joint pledge with Treasury back 
in March of 2009 that the Fed should not ``allocate credit to 
narrowly defined sectors or classes of borrowers.'' The pledge 
went on to proclaim that ``government decisions to influence 
the allocation of credit are the province of the fiscal 
authorities.'' Then, reneging on the pledge, the Fed decided in 
September 2012 to buy $40 billion per month in agency mortgage-
backed securities and to allocate credit in order to ease 
market conditions in the mortgage and housing sectors.
    Remarkably, this came after the Treasury ended its foray 
into mortgage-backed securities investments, citing improved 
market conditions. It also came directly after a prominent 
Democrat in Congress admonished Chairman Bernanke to, quote, 
``Get to work, Mr. Chairman,'' on providing more stimulus.
    Unfortunately, the joint Fed and Treasury pledge not to 
channel credit to narrow sectors of the economy ranks right up 
there on the credibility scale with the promise that, if you 
like your health insurance policy, you can keep it.
    When I ask the Fed and Treasury about the interplay between 
monetary and fiscal policies and some dangerous overlaps, I 
hear conflicting stories. On the one hand, officials assure me 
that the Fed and Treasury are independent and doing their own 
things. On the other hand, I see the Fed and Treasury acting 
jointly, as when Fed officials publicly state that they are 
helping the government lower its financing costs, which is 
making debt-fueled government spending look artificially cheap.
    So, Governor Raskin, my hope is that you would agree to 
help make the Treasury more transparent and to work with 
Congress when members ask for information about Treasury 
policies or the country's debt or cash management decisions.
    There is plenty available for you to do at the Treasury, 
and I hope you will outline your objectives for us. I further 
hope that these objectives include working to promote clarity 
about the positions of the administration on issues that are 
long overdue for action, including comprehensive tax reform, 
entitlement reform, reforms of Fannie and Freddie, and plans to 
drive down our Nation's unsustainably high and growing debt.
    Now, turning to the trade side of today's hearing, Ms. 
Rhonda Schmidtlein is nominated to be a member of the United 
States International Trade Commission. If confirmed, you would 
have a voice in shaping the ITC's future, including its section 
337 process.
    The ITC's section 337 process is a vital tool for U.S. 
companies facing unfair competition from foreign imports that 
infringe their intellectual property, and I have a longstanding 
interest in making sure this process operates as effectively as 
possible.
    I am also very interested in ensuring that the ITC is able 
to continue its role as a nonpartisan source of information 
regarding U.S. trade policies and their effects on our economy.
    Ms. Schmidtlein, I hope you share my belief in the 
importance of an effective 337 process and the need for 
Congress to be able to obtain the highest quality economic 
analysis from the ITC.
    Mr. Chairman, once again, thank you for holding today's 
hearing and for your ongoing leadership of this committee. We 
appreciate you.
    [The prepared statement of Senator Hatch appears in the 
appendix.]
    The Chairman. Thank you, Senator.
    Now, I would like to introduce our nominees.
    First, Sarah Bloom Raskin is nominated to be Deputy 
Secretary of Treasury.
    Ms. Raskin, this is a good opportunity for you to introduce 
your family, because you are going to be working really hard. 
This is teamwork. We are all in this together. And I know you 
are very happy to have your family accompany you.
    Ms. Raskin. Well, thank you, Chairman Baucus. And I do have 
quite a number of family members here with me today.
    I have my husband here, Jamie, Jamie Raskin, and my three 
children: Hannah Grace, Tommy, and Tabitha. My parents are 
here, Herbert Bloom and Arlene Bloom. My brother, Kenneth 
Bloom, is here. My niece, Maggie Littlewood, is here. And I 
think there is also my father-in-law, Marcus Raskin, as well as 
some cousins, Jed Bellman and Sarah Bergen.
    The Chairman. I would like to have you all stand so we can 
all applaud you, although there are not many left for applause. 
All stand up. [Applause.]
    Very nice. We will have other introductions in just a 
moment.
    Our second witness is Rhonda Schmidtlein. And we would love 
to have you introduce your family too, Rhonda. It is a great 
opportunity for you.
    Ms. Schmidtlein. Thank you, Chairman Baucus.
    I have with me today my husband, John Schmidtlein, and my 
daughter Anna, who is taking a day off of kindergarten today to 
be here. We have a 2\1/2\-year-old whom we did not bring, for 
what should be obvious reasons.
    My parents are here, Roger and Marilyn Schnare, who will 
celebrate their 48th wedding anniversary next week.
    The Chairman. Wonderful.
    Ms. Schmidtlein [continuing]. And my father-in-law, John 
Schmidtlein.
    The Chairman. Why don't you all stand? We want to 
congratulate you too. [Applause.]
    We are very honored to have with us here Senator Sarbanes, 
who I think would like to introduce one of our witnesses today. 
We are very honored to see you again, Senator Sarbanes. You 
have been a real credit to the Senate and the State of 
Maryland, and we miss you sorely.
    Senator Hatch. Yes. It is great to see you again. We are 
really happy to have you here.
    Senator Sarbanes. Well, thank you. Thank you very much, Mr. 
Chairman and Senator.
    Actually, Senator Hatch and I came to the Senate on the 
same day. I took that advice about ``you have to know when to 
hold them and know when to fold them.'' Senator Hatch is still 
hanging in there. [Laughter.]
    Senator Hatch. Yes. I think I should have followed your 
advice sometimes, and I know a lot of others think I should 
have followed your advice. [Laughter.]
    The Chairman. There was a breakfast the Senator and I had, 
when I was over in the House, thinking about coming over to the 
Senate. You advised me, and you said, ``Max, I do not know if 
you want to come over here. It is a lot different.'' 
[Laughter.]
    Anyway, thank you very much.

               STATEMENT OF HON. PAUL SARBANES, 
               FORMER U.S. SENATOR FROM MARYLAND

    Senator Sarbanes. Senator Wyden, it is nice to see you, as 
well as my colleagues Senator Cardin and Senator Brown.
    I am pleased to be before the committee and to have this 
opportunity to say just a few words about Sarah Bloom Raskin, 
who is an old and dear friend and for whom I have a tremendous, 
tremendous regard.
    Sarah has now served on the Board of Governors of the 
Federal Reserve for just over 3 years. I got to know her in a 
work capacity, first, when she was a staff member to the Senate 
Banking Committee.
    I know Senator Crapo was here with us a few minutes ago. 
But she did an outstanding job. She was with the committee not 
quite 5 years and was really one of the--we had a very good 
staff, if I do say so myself, on both sides of the aisle, and 
she just did an outstanding job as a member of the staff of the 
committee.
    She showed measured judgment, was extremely hardworking, 
very analytical, very smart, and had a tremendous ability to 
work with people across the aisle, in the Congress, out of the 
Congress, and she made a tremendous contribution.
    Before she went on to the Federal Reserve Board, she was a 
Commissioner of Financial Regulation for the State of Maryland. 
She did an absolutely--and I am sure Senator Cardin will 
comment about this--an absolutely outstanding job as our 
Commissioner of Financial Regulation. And she rose very quickly 
among the State bank supervisors.
    She was on their executive committee. She headed up a 
number of other committees and really became, to some extent, a 
spokesman for the State banking regulators.
    When she went to the Federal Reserve, they were very strong 
in their support of her and her enthusiasm for that nomination.
    The job to which she is going, hopefully, with the approval 
of this committee, is a tremendously important job and very 
broad in its responsibilities as Deputy Secretary of the 
Treasury. She brings to it a tremendous amount of talent, 
including--and I just want to touch on this--some clear 
administrative abilities. She has been the Administrative 
Governor at the Federal Reserve Board. So she has had some 
responsibilities at the Fed for administering the workings of 
the Federal Reserve Board.
    As Commissioner of Financial Regulation in Maryland, she 
was extremely good in handling that charge. And that will be 
part of her job, as I understand it, as Deputy Secretary of the 
Treasury, and I commend her very strongly in that area.
    Mr. Chairman and members of the committee, I just want to 
make a couple of points. When she was up to go on the Federal 
Reserve Board, we had a number of the banking associations, 
including the community bankers, who were in very strong 
support of Sarah, and others who had worked with her when she 
was Commissioner of Financial Regulation. At the same time, she 
was very strongly supported by the Maryland Consumer Rights 
Coalition, which had given her the Consumer Advocate of the 
Year Award. So she has, obviously, shown an ability to bring 
people together and solve difficult problems, have their 
endorsement and have their support.
    I happen to think that is a very valuable asset, and she 
has manifested it in her previous work, and I am sure she will 
continue to do so at the Treasury.
    So, thank you very much for this opportunity this morning 
to come and say a few words. I have known Sarah and her husband 
for a long, long time, and I have the very highest regard for 
her.
    The Chairman. Thank you, Senator. It is a very strong 
statement, and we deeply appreciate it.
    Senator Cardin, I am sure you have a few words too that you 
would like to add in support of the nominee.

         OPENING STATEMENT OF HON. BENJAMIN L. CARDIN,
                  A U.S. SENATOR FROM MARYLAND

    Senator Cardin. Mr. Chairman, thank you for the courtesy to 
allow me, also, to introduce to the committee Sarah Bloom 
Raskin. We are very proud that she is a Marylander, lives in 
our State, and is a person who has given so much in public 
service.
    Senator Sarbanes mentioned her husband Jamie. Jamie is a 
member of our State Senate and an incredible person in his own 
right. This is a family of public servants, and we very much 
appreciate that.
    Senator Sarbanes went over a great deal of the background 
of Sarah Bloom Raskin. She worked in the private sector, very 
successfully in the private sector, but then returned to the 
public sector, because she is really dedicated to public 
service. She is in public service for all the right reasons.
    Her background, her education, her job training, all are 
well-
suited for the position. As you pointed out, she will become 
the 
highest-ranking woman in the history of the Department of 
Treasury. So this is really a moment where I think we all can 
be very pleased that Sarah is coming forward to serve in this 
extremely challenging position.
    Senator Sarbanes mentioned the fact that she was our State 
Regulator, and that is where I really got to know her. And I 
remember, while she was our State Regulator, sort of 
underscoring Senator Sarbanes's point--the Maryland bankers 
come in every year to meet with us. I am sure the bankers from 
your State also come in to meet with your delegations. And they 
do not normally comment about our State Regulators, but they 
did, and they were very complimentary of the manner in which 
Sarah was conducting the regulatory atmosphere in our State.
    In that same week, just by happenstance, we had consumer 
groups that were in talking to us about some of the legislation 
that was pending in Congress, and they said, ``You know, why 
can't you get people like Sarah at the Federal level, because 
they really are open to allowing us access to try to work out 
issues?''
    So I really want to underscore that point to the committee. 
We need people in the administration who know how to bring 
people together, and Sarah Bloom Raskin is that type of a 
person. She really knows how to build effective coalitions to 
get things done.
    I had the honor of introducing her to the Banking Committee 
during her confirmation hearings in 2010, and she was, of 
course, confirmed to be on the Federal Reserve.
    I thank her for her service. And on a personal note, it is 
really--I am very proud of the reasons why you are in public 
service and the differences that you have made.
    Thanks to your family also.
    The Chairman. Thank you, Senator, very, very much.
    Thank you, Senator Sarbanes. It was good seeing you.
    With that, Ms. Raskin?

    STATEMENT OF SARAH BLOOM RASKIN, NOMINATED TO BE DEPUTY 
     SECRETARY, DEPARTMENT OF THE TREASURY, WASHINGTON, DC

    Ms. Raskin. Chairman Baucus, Ranking Member Hatch, and 
distinguished members of the committee, it is a great privilege 
to appear before you today as the President's nominee to be 
Deputy Secretary of the Treasury.
    I do want to begin by thanking Senator Paul Sarbanes, who 
has served as an exemplary role model and leader for Maryland, 
the Senate, and our Nation throughout his lifetime of public 
service.
    Let me also thank your colleague and my Senator, Ben 
Cardin, for his kind words and the excellence of his leadership 
and passionate concern for the people of Maryland.
    I also would like to thank all the members of my family, 
especially my husband, Jamie, my parents, my brother, and my 
three children for their support, understanding, and good 
humor.
    I want to mention that Jamie was with me at my confirmation 
hearing when I was nominated for the Federal Reserve Board 3 
years ago, even though he was going through radiation and 
chemotherapy at the time. Jamie is a law professor and a 
Senator--although not a real Senator, as my daughter, Tabitha, 
said when she was a little girl--a State Senator, and I am 
delighted that he is again behind me on this day, robustly 
healthy and fit, 3 years after his final treatment.
    I am grateful to President Obama and Secretary Lew for this 
opportunity. The trust they have placed in me is a humbling 
honor.
    Finally, I want to thank you, Mr. Chairman, and Ranking 
Member Hatch for the enormous courtesy you and the members of 
your staff have shown me throughout this process. If confirmed, 
I look forward to working closely with you as the Treasury 
Department continues the essential work of promoting economic 
growth and accelerating our recovery from the financial crisis 
of 2008.
    It is a special thrill to be back in the Senate. Although I 
spent half of my career as a lawyer in the private sector, the 
other half has been devoted to public service, and, for me, 
this gratifying phase of my career began right here in this 
chamber.
    As a former counsel to the Senate Banking Committee under 
three different chairmen, I cherish the time that I spent in 
this remarkable body, where I learned that the character of our 
leaders and the purposes they bring to public life are far more 
important than their party labels. This is an institution with 
a great history and a great future, and all of America is 
deeply invested in its success.
    I have worked extensively in the private sector. These 
roles in business not only gave me invaluable management 
experience, but they also taught me what those in the financial 
marketplace seek most from government--stability, 
predictability, fairness, a sense of proportion, attention to 
the unintended consequences of regulation, pragmatism, and 
bipartisan effort toward economic prosperity and public 
efficiency.
    From 2007 to 2010, I served as the Commissioner of 
Financial Regulation for the State of Maryland. As 
Commissioner, I worked hard every day to provide stability to 
our financial sector and opportunity to our businesses and our 
people through the darkest days of the Great Recession.
    I mobilized a great deal of talent to address the 
devastating effects of spikes in home foreclosures and 
unemployment that shocked so many of our families and 
communities, and I took action to revise and replace 
ineffective and counterproductive State regulations in order to 
enhance economic progress, regulatory effectiveness, and access 
to affordable credit.
    In 2010, I was nominated by the President and confirmed by 
the Senate as a Governor of the Federal Reserve Board. In that 
capacity, I have worked with my colleagues on the Board and on 
the Federal Open Market Committee to maximize employment, 
maintain price stability, and restore the underlying strength 
and vibrancy of the American economy.
    As the executive agency charged with promoting economic 
prosperity and financial stability, the Department of the 
Treasury has a sacred trust to advance the fortunes and 
livelihood of our people, our businesses, our communities, and 
our Nation. The government does not create wealth and 
prosperity and innovation in our economy, but it does create 
the conditions in which our people and businesses can, and, 
therefore, its role is central and indispensible.
    This is an exciting time to join the Treasury Department. 
With the need for immediate stabilization from the financial 
crisis behind us, Congress and the administration can 
increasingly focus their attention on longer-term structural 
reforms that will improve conditions for sustainable and 
meaningful economic growth. From housing finance reform and 
implementing financial regulatory reform to tailored sanction 
design and implementation, new trade agreements, and tax and 
entitlement reform, we have the chance to make important long-
term and durable progress for the country.
    If confirmed, I look forward to working closely alongside 
members of this committee to identify the best bipartisan 
policy options to achieve such progress. I also look forward to 
helping Secretary Lew continue the exemplary and efficient 
management of the Department and its component bureaus and 
offices.
    At different points over the last decade, I have dealt with 
the Treasury staff and have been greatly impressed by their 
skill and commitment. If I am so honored to be confirmed, I 
look forward to working every day to build effective policies 
for a sustained economic recovery and growth that reaches every 
corner of every State in our Nation.
    Let me say, finally, that I have learned plenty from 
intense study of econometric models and academic analyses in my 
time as a Federal Reserve Governor, but I have learned more 
than I ever imagined possible from the people I met when I made 
impromptu visits to job fairs and unemployment centers. Talking 
to people trying to avoid falling off the economic ledge 
reminds us of the urgent public purposes that must infuse our 
work here in Washington if we are to be authentically 
successful. I make it a continuing commitment to throw 
everything I have into seeking ways to broaden the 
opportunities for prosperity for all Americans.
    Thank you for allowing me to testify here today and for 
receiving me in your offices. I would be happy to respond to 
any and all questions you may have throughout this process and, 
indeed, throughout my tenure at the Treasury Department, if I 
am fortunate enough to be confirmed for that position.
    Thank you.
    [The prepared statement of Ms. Raskin appears in the 
appendix.]
    The Chairman. Thank you very much.
    Ms. Schmidtlein, we are very honored to have you here and 
would love to hear your statement.

 STATEMENT OF RHONDA SCHMIDTLEIN, NOMINATED TO BE A MEMBER OF 
 THE UNITED STATES INTERNATIONAL TRADE COMMISSION, WASHINGTON, 
                               DC

    Ms. Schmidtlein. Chairman Baucus, Ranking Member Hatch, and 
members of the committee, thank you for this opportunity to 
appear before you today. I am deeply honored and grateful to 
have been nominated by President Obama for the position of 
Commissioner of the United States International Trade 
Commission.
    Before I go on, I would like to thank my family members as 
well, who are here and who have been introduced. My husband and 
my daughters, Julia and Anna. My parents, Roger and Marilyn, 
and my father-in-law, John Schmidtlein. I am grateful to each 
of you for your love and support and understanding over the 
years. I also want to acknowledge my friends, many of whom are 
here today, and others who are listening online, and thank them 
for their steadfast support and encouragement.
    I have been privileged to spend my career working in the 
public interest. Starting at the U.S. Department of Justice and 
then at the U.S. Office of the Trade Representative, and later 
at the U.S. Public Company Accounting Oversight Board, I was 
proud to represent the United States in negotiations and trade-
related disputes.
    My work as a trade lawyer has given me a keen appreciation 
for the important work of the ITC. While the ITC may be 
relatively unknown to the general public, it plays an important 
role in the U.S. economy through its administration of U.S. 
trade remedy laws, including title VII and section 337. These 
laws provide a vital tool for U.S. companies that are faced 
with unfair trade practices, and the ITC's decisions impact the 
livelihoods of workers, farmers, and businesses across America.
    Another important, but perhaps less recognized aspect of 
the ITC is the role it plays in maintaining the credibility of 
U.S. trade remedy laws. As a lawyer who has represented the 
United States in challenges to the application of U.S. trade 
remedy laws, both in the U.S. courts and at the WTO, I 
understand firsthand the importance of maintaining objectivity 
in the administration of these laws.
    If confirmed, I intend to apply the law, as written and in 
accordance with the intent of Congress, in a fair and objective 
manner.
    The ITC also plays an essential role in supporting 
policymakers by providing objective and high-quality economic 
and industry analysis. Over the course of my career as an 
advocate and a negotiator, I have depended from time to time 
upon the work of economists. So I understand the importance of 
policymakers having reliable and robust reports upon which to 
base their decisions.
    If confirmed, I would look forward to working with my 
fellow commissioners and ITC staff to ensure that the ITC 
continues to be responsive to Congress and other policymakers 
and continues to provide objective and high-quality reports.
    I believe in the power of a rules-based trading system to 
expand trade, create jobs, and raise standards of living. But 
simply having such a system is not enough. The rules must be 
enforced, and the decision-maker must be independent and 
objective. Congress has charged the ITC with playing this 
critical role with regard to U.S. trade remedy laws.
    If confirmed, I would be honored to participate in this 
important process as a commissioner.
    I thank you for your consideration, and I would be happy to 
answer any questions.
    [The prepared statement of Ms. Schmidtlein appears in the 
appendix.]
    The Chairman. Thank you both very much.
    Ms. Raskin, what is the biggest lesson you learned as a 
State Regulator, or add to that your role as a Fed Governor? 
What is the biggest lesson learned?
    Ms. Raskin. Well, Chairman Baucus, I have to say that the 
lessons were many. I have served in both of those capacities 
during the time of really great financial crisis in our 
country, and the experience of working during the crisis and 
seeing the effects of the crisis on our communities and on our 
prospects for economic growth really has been a searing 
experience, and one that I have wanted to commit myself to 
never see this country have to go through again.
    So the work that I see going forward is a combination of 
both bringing about a strong recovery from that crisis, a set 
of reforms that brings us to a place where we do not have to 
repeat a crisis like that again, and putting our economy on a 
long-term path for sustainability.
    The Chairman. What can we do to tend to prevent that 
reoccurrence of the financial crisis?
    Ms. Raskin. Well, I think a lot of very good work is 
underway, Chairman Baucus, and the work has involved a lot 
regarding financial reform. And, as you know, Dodd-Frank is a 
comprehensive statute with many provisions, and a lot of the 
work that Congress envisioned in that statute is underway and I 
think is moving towards bringing us to a place of greater 
financial stability.
    I think our economy is doing better than it was certainly 
in the dark days of the crisis. We are seeing moderate growth, 
and I would like to see that growth continue. And I think the 
work of both the committee and Congress, as well as the 
continued work of the Federal Reserve, are important for those 
efforts.
    The Chairman. But at Treasury, specifically at Treasury, 
what tools do you have to help bring back the economy and, 
also, prevent further collapse down the road, as opposed to the 
Banking Committee?
    Ms. Raskin. That is right. And Treasury, as you know, plays 
a very important role in many facets of our recovery and in our 
long-term growth prospects.
    The projects currently facing Treasury involve important 
work regarding tax reform, which I know this committee has 
taken a very strong lead in; questions regarding housing 
finance reform; financial regulatory reform; work moving 
treaties ahead in an important way; and, at the same time, 
doing all of this in a way that enhances transparency, happens 
in an accountable way that people in the public can understand, 
and puts our economy on a stronger footing.
    The Chairman. I appreciate you mentioning tax reform, 
because I personally believe that is going to help promote 
economic growth. And I was very pleased, as I mentioned 
earlier, at Secretary Lew's statement supporting tax reform.
    I urge you, if confirmed, to keep that up, because we have 
to keep our eye on that ball.
    Ms. Schmidtlein, I am a little bit concerned that ITC 
Chairman Irving Williamson reportedly informed the USTR last 
week that it will take ITC at least 150 days from receiving the 
full text of an agreement--that is, a trade agreement, whether 
it is TTIP or whether it is the Trans-Pacific Partnership 
agreement--and that is going to take a long time.
    Just your thoughts on how ITC can speed up that process a 
little bit more quickly.
    Ms. Schmidtlein. Thank you.
    The Chairman. Because in the past, we have required reports 
to be provided to this committee in about 90 days.
    Ms. Schmidtlein. And you are talking about the section 332 
report that they would provide?
    The Chairman. Yes. Right. Right.
    Ms. Schmidtlein. Yes. I would look forward, if confirmed, 
to working with my fellow commissioners to understand why this 
is taking so long and to ensure that the appropriate resources 
have been allocated to those offices so that they can provide 
the reports in a more timely manner.
    The Chairman. Because I think these trade agreements are 
enormously important. They are going to dramatically boost 
economic growth in this country.
    Ms. Schmidtlein. Absolutely, and that is one of the 
statutory responsibilities of the ITC, to support the 
policymakers by providing these types of reports.
    The Chairman. I appreciate that. I just encourage you to 
double down a little bit and see what we can do. Thank you.
    Senator Hatch?
    Senator Hatch. Thank you.
    Governor Raskin, when we approach the statutory debt limit, 
it becomes important for Congress to know about the state of 
the country's finances, including its cash, public debt 
issuance, and how much time can be bought in terms of remaining 
below the debt limit when Treasury uses its so-called 
``extraordinary measures.'' Those measures, by the way, are 
unfortunately becoming all too ordinary and probably need to be 
reexamined.
    While Congress needs information, it does not always get it 
in a timely fashion. Will you commit to us here on this 
committee to respond--and to me personally--to respond to my 
requests for information about debt issuance, cash balances, 
and how much room Treasury has under the debt limit through use 
of extraordinary measures when we near a debt limit, and will 
you commit to doing so on a weekly basis with me and the 
Congressional Budget Office when we get close to the debt 
limit?
    Ms. Raskin. Well, Senator Hatch, as you know, a government 
default resulting from the breach of a debt limit is an event 
considered to be one of catastrophic consequences in terms of 
financial stability, economic growth, and employment.
    It has never occurred in the history of our country. 
Congress has always found a way to pay its bills, fortunately. 
And the work that leads up to a government default regarding 
the balances that come in to Treasury or the information that 
is received regarding the approaching of that limit, I think, 
is critically important to understand, being a set of numbers, 
of figures, that is important to have accurate.
    Senator Hatch. Well, I appreciate that. The reason I ask 
that question is because we have not gotten responses that we 
have asked for, have not had responses to letters that we have 
sent, and I am just hoping that you will correct that, because 
we do have an obligation here to oversee this.
    And I do not think either of us and most people on the 
committee have any special axes to grind. We just want to make 
sure we know what we are doing.
    So I would appreciate if you will do that.
    Ms. Schmidtlein, as you are no doubt aware, intellectual 
property is an increasingly important part of the U.S. economy. 
In my home State of Utah, for instance, IP is the lifeblood of 
our industries, from information technology to life sciences. 
And, as I mentioned in my opening, the ITC provides a vital 
tool for U.S. companies that face unfair competition from 
foreign imports that infringe their IP.
    Can you share with us your thoughts on the section 337 
process and what you would do to make it as effective as 
possible?
    Ms. Schmidtlein. Thank you, Senator Hatch.
    Of course, the ITC has recently implemented a few changes 
to the procedures for section 337, including discovery and 
then, also, putting in place a pilot program so that 
potentially dispositive issues might be ruled upon early.
    So I would look forward to sitting down with my fellow 
commissioners, if confirmed, to evaluate the results of those 
efforts that have just been taking place over the last 6 
months.
    Senator Hatch. Governor Raskin, if confirmed as Deputy 
Treasury Secretary, you are likely to be involved in 
proceedings of the non-transparent Financial Stability 
Oversight Council, or FSOC, especially given your background in 
bank regulation.
    Now, the FSOC is unlikely to be able to spot threats to 
financial stability or guard the world against financial 
instability, especially given that it cannot even define what 
that means. With the Treasury Secretary at the helm and the Fed 
at the table, it is highly unlikely ever to warn of any threats 
to financial stability arising from monetary policy or from 
exploding government debt. Indeed, as the debt limit was 
approached recently and the Treasury Secretary warned of 
calamity, the FSOC chair, who happens to be the Treasury 
Secretary, remained silent.
    So I think everyone should be clear about this relatively 
new entity. It is not a stability guardian. Rather, it is a 
roving regulator looking for pockets of the financial system 
and the economy to ensnare into the regulatory webs of the Fed 
and other regulators. It is a council consisting of an alphabet 
soup of financial regulators, and it is capable of turning 
pretty much any set of companies into regulated public 
utilities.
    Now, given your financial regulation experience and the 
possibility that you will be working with the FSOC in the 
future, I have just two questions.
    First, if you are confirmed, will you work to improve the 
transparency and responsiveness of the FSOC to congressional 
inquiries; and, second, do any firms or sectors of the 
financial system currently, in your view, meet the test of 
being systemically important financial institutions in need of 
being designated by the FSOC and subsequently regulated by the 
Fed or others?
    If you could answer those two questions, I would be 
appreciative.
    Ms. Raskin. Certainly, Senator Hatch. And let me commend 
you for your articulation of the very important goal of 
transparency. It is one that I share and one that I have been 
committed to further and develop in the public sector positions 
that I have held.
    In terms of the transparency of the FSOC, yes, I certainly 
can commit to you that I will work to improve its transparency. 
The FSOC, as you described so well, is, in essence, a group--it 
stands for the Financial Stability Oversight Council.
    It is a group that comes together, consists of the leaders 
of various financial regulatory agencies, and it has primarily 
two purposes, as set forth in the statute. One is, it monitors 
financial market developments, and, two, it looks primarily at 
the risks to financial stability.
    And the transparency mechanisms that it has used in doing 
this, I think, are there. I hear you and share a concern that 
they be brought forward in a more comprehensible way. But there 
is, in essence, a statutory standard regarding designation of 
an institution that presents a risk to financial stability. You 
are absolutely correct that if, in fact, an institution is 
designated by the FSOC, it becomes an entity that becomes 
regulated and supervised by the Federal Reserve.
    The FSOC, as I see it, has been issuing annual reports 
since its creation. Those annual reports have taken a step 
toward identifying risks to financial stability, risks that 
need to be pursued by various regulators, as well as by the 
FSOC as a whole.
    So the work of the FSOC, I think, is quite significant, and 
designations of institutions that are considered systemically 
significant have occurred and have been referred to the Federal 
Reserve for supervision. There have been three so far.
    But, yes, I appreciate your comments. I certainly look 
forward to working with you, if I am confirmed, to improve 
transparency.
    Senator Hatch. Thank you.
    The Chairman. Thank you, Senator, very much.
    Senator Grassley?
    Senator Grassley. You were born in Washington, IA, it says 
here.
    Ms. Schmidtlein. I was.
    Senator Grassley. When did you leave?
    Ms. Schmidtlein. I think shortly thereafter. [Laughter.]
    Senator Grassley. All right.
    Ms. Schmidtlein. I was raised in Missouri.
    Senator Grassley. I have just one question for you, and I 
would like your comments and thoughts on currency manipulation 
by foreign governments and how big of an issue you think it is 
for global trade. And I do not know if it would ever reach your 
commission or not, but, if it did, how would you handle it?
    Ms. Schmidtlein. Well, I suppose if it were the subject 
matter of a case that was brought before the ITC, then, of 
course, I would apply the statutory requirements to the facts 
of the case in a fair and objective manner.
    Senator Grassley. Can you give me your views on what you 
think about currency manipulation and its impact on global 
trade, if you have a view?
    Ms. Schmidtlein. Well, I have to say, in my role as an ITC 
Commissioner, I am not sure whether I would be in a position to 
offer a view on that, and I have not studied that myself.
    So I would be happy to get back to you, but, sitting here, 
I could not offer----
    Senator Grassley. If you would give me your views in 
writing, I would appreciate it.
    Ms. Schmidtlein. All right.
    Senator Grassley. And, Ms. Raskin, I am going to tell you 
about a conversation I had with Attorney General Holder. I do 
not want you to comment on his conversation. It is just the 
background for a question I have.
    He was before the Judiciary Committee, and we had been 
hearing and maybe even reading that, before the government 
might file certain criminal charges or some sort of charges 
against financial institutions or people within the financial 
institutions, there were certain so-called ``experts'' that 
government would consult about what might be the impact of 
those lawsuits upon the financial system.
    That disturbed me. I asked him if that was true, and he 
said, ``Yes, that is true. We do consult with certain 
experts.''
    I am not sure those experts were identified. I am not sure 
I expected him to identify them. I do not know whether I 
submitted a question in writing for him to tell us who those 
so-called experts are.
    But I am talking about this environment now. Do you share 
the concern that charging large financial institutions or key 
individuals within those large institutions would have some 
broad ripple effect in the economy? And then, if those are 
concerns of our government, does not a refusal to prosecute 
create a lack of accountability for these institutions and the 
people who run them, like, for instance, you can do something 
wrong and maybe get away with it?
    Ms. Raskin. Well, thank you, Senator Grassley. I certainly 
appreciate your concerns about a focus on accountability. I am 
not aware of the conversation with Mr. Holder, and I am not 
aware of the details around it.
    I can tell you that I have looked from the outside at some 
of the contours of these settlements with large financial 
institutions, and, from the perspective that I sit in, 
certainly, at the Federal Reserve, we do look at consequences 
regarding financial stability, regarding the safety and 
soundness of the institution, as well as improvements towards 
transparency and, of course, economic growth.
    So I do look at it from those perspectives.
    Senator Grassley. Well, let me give you my opinion, not 
that you would necessarily follow it or that I would expect you 
to, but I think that when we have an environment in which, if 
somebody breaks a law or an institution does something wrong, 
and somehow our government is afraid to charge them and 
prosecute them or pursue whatever the law allows them to pursue 
because it might have an impact on the financial institution, 
that you are allowing people to have an environment where you 
can get away with murder.
    Not officially murder, but get away with bad things that 
you should not be allowed to get away with, and it gives a 
certain amount of freedom that brings about more risk. It is a 
risk-
inducing thing if you tolerate that sort of thing.
    I yield the floor.
    Senator Hatch [presiding]. Senator Cardin?
    Senator Cardin. Thank you, Mr. Chairman.
    Let me thank both of our witnesses. Ms. Schmidtlein, thank 
you, also, for your willingness to step forward, and we thank 
your family as well.
    I appreciate in your statement your reference to the remedy 
laws and that the laws provide vital tools for U.S. companies 
that are faced with unfair trade practices and that ITC 
decisions can impact the livelihoods of workers, farmers, and 
businesses across America. I could not agree with you more.
    We are under attack on our remedy laws. There is unity 
among our trading partners. They do not like them and do 
everything they can to undermine them. Multinational companies 
have invested a lot, also, to weaken enforcement of remedy 
laws.
    The ITC has been one of the strong institutions trying to 
protect congressional intent on the enforcement of our remedy 
laws. And I understand, when a specific case is before you, you 
have to act on the facts and apply the law and do that in a 
fair manner.
    But my question to you is, are you prepared to work with 
Congress to make sure that we have effective remedy laws, that 
we look at--particularly when we are in trade negotiations--the 
experiences that you would have on the Commission, if 
confirmed, so that we can, in fact, protect against unfair 
trading practices against America's businesses?
    Ms. Schmidtlein. Yes, of course. I personally would be 
willing to provide whatever insight I could to any members of 
the committee or Congress when you are looking at how to make 
the remedy laws more effective.
    Senator Cardin. Thank you for that, because I have probably 
testified before the ITC more than any other government 
commission. There seem to be more problems involving industries 
in our State.
    What has always concerned me is, there are technical 
defenses that are made through the applications of the remedy 
laws that try to undermine the congressional intent. And, to 
the extent that we need to strengthen our laws here, I think 
the views coming from someone who has seen the application of 
these laws in a contested setting could help us make sure that 
Congress, which is responsible for the laws, passes laws that 
can be enforced.
    So I thank you for that.
    Ms. Raskin, I want to talk about savings and retirement 
savings. During the best of times in America, when our economy 
was performing as strongly as any in the world, we were dead 
last among the industrial nations on our savings ratios. At 
that time, we were told we do not have to worry about it too 
much because Americans are saving through the equities in their 
homes. And we saw what happened with the equities in their 
homes.
    I would like to get your view about working with Congress 
to provide effective tools so that Americans save more. This 
Congress has passed many bills, including the Savers Credit, to 
help lower-income families, but it seems to me that Treasury 
should be playing an active role in looking at the fundamentals 
of the American economy. And I hope that you would share with 
me that Americans just do not save enough and we should be 
looking at ways to increase savings, which not only helps our 
economy from a macro sense, but also protects the security of 
individuals and government programs that are stressed with 
demographic changes.
    Your views?
    Ms. Raskin. Thank you, Senator Cardin. And I know you have 
done a lot of work throughout your career on the issue of 
savings and pension work, and I think you are correct.
    My view is that this is an important component of our long-
term sustainability and long-term growth in our economy, both 
in terms of moving through the recovery, as well as putting our 
economy on a path towards greater growth and sustainability.
    I think the proposals that you have mentioned are 
important, and, yes, I do look forward to working with you on 
them, if I am confirmed.
    Senator Cardin. Thank you.
    Following on Senator Grassley's point on currency 
manipulation, I certainly support the thrust of his concern. 
But I am going to ask Ms. Raskin that question, because 
Treasury does have a direct role in dealing with currency 
manipulation.
    We have seen some progress from our trading partners, but 
still any objective review would indicate that American 
companies have been at a disadvantage because of currency 
manipulation. What efforts can we expect, if you are confirmed, 
to bring these matters to the attention of Congress and to the 
attention of Treasury to get a more level playing field for 
American companies?
    Ms. Raskin. Well, thank you, Senator Cardin. And I think 
both you and Senator Grassley have put your finger on a very 
important issue that requires continued diligence and, from my 
perspective, a lot of hard work, and that is the question of 
really bringing other countries into a market-based exchange 
rate regime.
    And I think that some countries are doing it better than 
others, but I think this is a problem and a set of issues that 
we need to engage in, because these are very important trading 
partners to us.
    I will go out on a limb here and speak specifically of 
China, which is the world's second-largest economy, and it is 
incredibly important that we get the relationship with China 
right.
    My understanding is that there are a number of multilateral 
and bilateral forums that Treasury has been working through in 
order to bring about certain changes in those relationships, 
one having to do with moving towards a more market-based set of 
exchange rates; two, I would say, is leveling the playing 
field, as you point out, so that our businesses and our workers 
are not disadvantaged in that relationship; and the third I 
would point out is seeing in these countries a movement away 
from being primarily export-based countries to being ones more 
where they are feeding and growing off of internal consumption 
and demand.
    Senator Cardin. I would just underscore, I agree with what 
you said. We want market-based currencies, not manipulated 
currencies.
    I hope that you can, through the forums you mentioned, get 
us to a level playing field. But do not be shy in asking 
Congress for stronger tools in order to deal with this. We have 
legislation pending here--and I am disappointed we have not 
passed it, because I think we have the support for it--but, if 
we can work with Treasury, I think it is vitally important that 
we get to market-based currencies as quickly as possible.
    Thank you, Mr. Chairman.
    Senator Hatch. Thank you.
    Senator Brown?
    Senator Brown. Thank you, Senator Hatch.
    Welcome to both of you, and thank you for your public 
service, both of you.
    Governor Raskin, I appreciate your comments about the local 
job fair. Your behavior at the Fed is unusual, in a good way, 
of course, in doing those kinds of things. Abraham Lincoln used 
to talk about--when his staff said, stay in the White House, 
win the war, free the slaves, preserve the Union, he would say, 
``I need to go out and get my public opinion bath.'' And I 
would encourage you to continue doing that. It is unusual 
behavior at Treasury. It was unusual behavior at the Fed, and 
something that we admire and appreciate.
    Following up on Senator Cardin's and Senator Grassley's 
question, you imply--maybe you imply, or maybe I have read 
something you did not exactly say--that there are signs that it 
is getting better.
    I have, in recent reports, though, noted that the Japanese 
government has undertaken a number of interventions in foreign 
exchange markets. We have failed to identify Japan as a 
currency manipulator.
    This department you want to go to has a history of 
resistance to news reports, analyses, and Senate and House 
admonitions, if you will, on the whole issue of currency. The 
administration--and whether it was Bush Sr. or whether it was 
Clinton, whether it was Bush Jr., whether it is this 
administration--talks a fairly good game on currency, but 
always falls short in doing this.
    Why is it going to be any better with you there advising 
Secretary Lew, who seems never to want to use the strategic 
economic dialogues or any other opportunities to move forward, 
when we do know that there is a 20-percent or 25-percent tax 
one way, a subsidy the other way, on currency?
    Ms. Raskin. Well, Senator Brown, thank you, first of all, 
for your very nice comments. And I will say that I certainly 
hope that, if I am confirmed to go to Treasury, I do have the 
opportunity to continue to go out into different neighborhoods 
and communities and learn from what I see there. So thank you 
for noting that.
    In terms of this administration and other administrations, 
as you say, showing a resistance towards listening, I hope I 
will be different. I do want to listen. I do want to certainly 
understand what the administration's efforts are currently 
regarding putting pressure on countries that are not moving at 
the pace that we would like to see.
    So I would certainly want to understand what the efforts 
are that are underway and, yes, I will listen. I will listen to 
all of you regarding what you are seeing and why you might 
sense that progress is not moving as quickly as we would like.
    Senator Brown. Thank you.
    Ms. Schmidtlein, there seems to be, in the last 30 years--
and I think the statistics bear this out--a bias in our 
government, kind of maybe in our country, but it seems to be 
coming out of our government, towards financial services at the 
expense of manufacturing.
    I know it is not quite that simple, but, if you look at 
percentage of the GDP, manufacturing as a percentage of GDP, 
financial services as a percentage of GDP, the percentage of 
manufacturing has dropped precipitously. The percentage of 
financial services has gone up in almost reverse proportions.
    We saw, from 2000 to 2010, a loss of 5 million 
manufacturing jobs in this country, and 60,000 plants closed. 
In 2010, with the auto rescue, we saw, frankly, an 
administration--and I say an administration, meaning ITC and 
Commerce--that was significantly more aggressive in enforcing 
trade rules, not quite aggressive enough, in my mind, but more 
aggressive.
    I think that is, in part, why we have seen growth beginning 
in manufacturing, some half-million net job increase since the 
middle of 2010--again, not good enough, but something that is 
at least in the right direction. And I want to ask about the 
ITC's role. We asked them to analyze the effect of a proposal--
of proposed or concluded trade agreements--and these analyses 
tend to focus on the tariff reductions involved and estimated 
exports that may increase as a result.
    It seems they do not discuss the economic impact, though, 
of what these trade agreements mean for a community and for a 
region. Give us your thoughts on sort of expanding these 
reports so they cover a broader set of economic metrics, 
including the net effects on trade and employment.
    I do not put at the feet of trade agreements all of the 
lost manufacturing jobs, by a long shot, but I also do not 
think that Washington--and whether that is ITC or USTR or 
Commerce--really ever absorbs or discusses enough the impact on 
communities of those lost manufacturing jobs and how the gains 
are not spread so evenly to cover the losses of these trade 
agreements.
    If you would, talk to me about what your plans might be as 
an ITC Commissioner in dealing with that.
    Ms. Schmidtlein. Well, as you just talked about and as I 
mentioned, this is one of the statutory responsibilities for 
the ITC: to support policymakers by providing these kinds of 
reports. And I have had the opportunity to work with economists 
over the course of my career.
    So, if I were confirmed, I would be committed to working 
with the Office of Economics and Industry Analysis at the ITC 
to ensure that the reports are looking at the full range of how 
the trade issues under question are impacting people across the 
country.
    How specifically would that work? I would have to see what 
exactly is being considered in those reports, but I would want 
to make sure that the reports are transparent about what is 
being evaluated, what is not being evaluated, what assumptions 
are being made, and the conclusions that are being drawn.
    Senator Brown. So would you commit, while the ITC's 
behavior is not--its traditions are not normally that way--to 
push your fellow commissioners to begin to broaden these 
analyses?
    Ms. Schmidtlein. I would certainly commit to reviewing this 
whole area to ensure that the full range of impact is being 
considered.
    Senator Brown. Thank you, Mr. Chairman.
    The Chairman. Thank you, Senator Brown.
    Senator Menendez?
    Senator Menendez. Thank you, Mr. Chairman.
    Congratulations to both of you on your nominations.
    Ms. Raskin, as you may know, the administration's 
infrastructure investment plan calls for reform of FIRPTA* to 
increase investment in the U.S. and create jobs. It is common 
sense, in my mind, given the current economic circumstances, 
that we should remove barriers to foreign investment in the 
United States. It is a proposal that has gained broad 
bipartisan support here in the Senate. I want to thank the 
chairman for including FIRPTA reform as part of his discussion 
draft release.
---------------------------------------------------------------------------
    * The Foreign Investment in Real Property Tax Act of 1980.
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    I raised this with Secretary Lew when he was here for his 
nomination, and he was not quite apprised of it. But I know 
that your predecessor, Mr. Wolin, has spent a fair amount of 
time on this. So I am going to ask you what I asked both of 
them, which is, if we all agree on the merits of reforming 
FIRPTA--the President put it out there himself--which I believe 
we do, why do we not administratively begin the action by 
repealing the relevant parts of the 2007 IRS notice while 
Congress works on the issue?
    To use the President's words exactly, ``What are we waiting 
for?''
    Ms. Raskin. Well, Senator Menendez, I know you have 
expressed strong interest in FIRPTA. I have to say that, in my 
current role at the Federal Reserve Board, I have not had the 
opportunity to become very skilled in the nuances of FIRPTA. I 
certainly share the goals that you have articulated regarding 
what its reform and amendment would do, and I look forward to 
working with you to----
    Senator Menendez. Well, can you commit to us to create some 
focused attention within the Department? Because the Secretary 
has a big portfolio, right? I mean, through my other role as 
the chairman of the Foreign Relations Committee, I know that he 
has a whole bunch of seats on international financial 
institutions--I get it. He has macroeconomics in the country, 
he has a whole host of issues.
    But we need someone at the Department to follow through on 
what the President himself has said, in his infrastructure 
plan, is a critical element of trying to make sure that we get 
investment in the United States. And there is an administrative 
procedure, which I understand is revenue-neutral by invoking 
the repeal of that section of the IRS.
    So can I get from you at least a commitment that you will 
create some focus in the Department? You are going to be the 
number-two person.
    Ms. Raskin. Absolutely. And again, if I am confirmed, I 
look forward to working with you in assuring that there is a 
focus on it, yes.
    Senator Menendez. All right. Now, here is something that 
you may have much more experience with in your role on the 
Federal Reserve Board. The Fed has authority to set capital 
requirements for insurance companies, for example, if they are 
depository institution holding companies or non-banks, 
systemically important financial institutions. And I support 
strong capital requirements and believe they are an important 
component of both safety and soundness and systemic risk 
regulation.
    But I have heard from a wide range of insurers about the 
Fed applying bank-specific capital requirements to them, 
despite the fact that many insurance companies have a very 
different business model and, therefore, different balance 
sheets and risk profiles from banks.
    So a one-size-fits-all approach seems to me to be a 
challenge, and, of course, the Financial Stability Oversight 
Council, which is chaired by the Treasury Secretary, has an 
important role to play in making sure that financial regulators 
are utilizing the right tools to regulate industries that might 
not be as familiar to them as institutions that have been 
historically regulated.
    So, as you move from the Fed to the Treasury, I would like 
to get your commitment to work with this body to make sure that 
capital standards applied to insurance companies are properly 
tailored, that we understand the difference in the business 
models, and that we do not apply a standard that would be 
totally appropriate for banks, but in many insurance companies' 
cases, would be totally inappropriate.
    Ms. Raskin. And, Senator Menendez, that is exactly right. A 
one-size-fits-all approach is not going to work here. You are 
exactly dead-on correct that insurance companies have a very 
different set of asset liability structures than do banks, and 
to regulate them in terms of a one-size-fits-all approach is 
not going to be an effective form of supervision or regulation, 
in my experience.
    So I think you are right about that. Fortunately, the 
Federal Reserve has not gone ahead and pushed toward regulating 
these designated insurance companies in such a way that they 
are treated identically to banks, and I think that that is a 
good thing.
    And I would go, also, so far as to say that the FSOC--which 
made the designations because particular insurance companies 
were deemed to present a risk to financial stability--the FSOC 
itself has insurance expertise on it. I think three members of 
the FSOC can make good insights on questions of insurance 
structure. And so I think that is a good thing, and I think 
that that is going to work.
    And when these institutions are designated and become 
regulated and supervised by the Federal Reserve, the Federal 
Reserve is going to have to look at them in a way that 
obviously regulates them for their financial stability 
concerns, but does not do it in a way that imposes a one-size-
fits-all approach.
    Senator Menendez. Mr. Chairman, may I have one final, quick 
question to Ms. Schmidtlein on intellectual property rights?
    Ms. Schmidtlein. Yes?
    Senator Menendez. New Jersey is the pharmaceutical capital 
of the Nation and the world, medicine cabinet to the world, a 
growing biotech sector, increasingly a high-tech sector, with 
major trade publications by the Wiley Company, just to mention 
a few.
    So, in the context of a national agenda in which 
intellectual property is, in essence, at the forefront of our 
competitiveness globally, we increasingly face countries, 
including countries that are, quote-unquote, ``allies,'' who, 
with impunity, violate those intellectual property rights. 
India is an example of it, and, of course, other countries, 
China and whatnot.
    I would like to hear your views, if confirmed, on how you 
will pursue this, when there are cases of intellectual property 
rights violations, at the Commission, what your position will 
be in terms of responding to it.
    Ms. Schmidtlein. Thank you, Senator Menendez. I agree this 
is a very important area and one that I intend to pay close 
attention to, if I am confirmed.
    I would commit that I intend to strictly enforce the laws 
when the evidence shows that one of our companies is facing 
unfair trade practices in the form of infringement of their 
intellectual property rights.
    The Chairman. Thank you, Senator.
    Senator Wyden?
    Senator Wyden. Thank you, Mr. Chairman.
    Both of you have given very thoughtful answers on a number 
of issues.
    Let me start with you, if I could, Ms. Raskin. And I was 
not going to start with this, but you obviously have earned 
great bouquets for your efforts to try to bring people 
together, and that, obviously, is a skill in short supply here 
in the Nation's capitol, if you look at the events of the last 
couple of months.
    So, for purposes of kind of starting in, do you have any 
thoughts on how you might, in this position, help to bring 
people together for pro-growth tax reform and, particularly, 
pro-growth tax reform that would help encourage investment in 
people? Because it is very clear to me that one of the premier 
economic issues of our time is underemployment. We have 
millions of workers who are underemployed. We are talking about 
people who perhaps made $25 an hour a couple of years ago and 
now are maybe making half of that, possibly even less.
    So I have been very pleased that Senator Sarbanes and 
Senator Cardin have been talking about how you have a 
background of bringing people together, and that is surely 
useful on these big issues like tax reform. Tell me a little 
bit about how that bringing-people-together set of skills could 
be used particularly on tax reform and especially how pro-
growth tax reform could encourage investments in people.
    Ms. Raskin. Well, thank you, Senator Wyden. And I want to 
start by saying I enjoyed our conversations earlier exactly on 
these topics, and you gave me a lot to think about.
    This is an incredibly important set of issues. I applaud 
you for your focus on pro-growth tax reform. I think tax reform 
does have the potential to be pro-growth. I have not had the 
chance to delve into the details of tax reform in my role as a 
Federal Reserve Governor or as Commissioner of Financial 
Regulation, but my instincts are that a simpler tax code and a 
tax code that essentially addresses issues regarding 
competitiveness could do a lot towards increasing growth in 
this country.
    And, in particular, you note the problem of 
underemployment, and you are exactly correct. I mean, the data 
show, the anecdotes support that many of the jobs that have 
been created are not jobs that people actually want to have. 
They are not full-time jobs a lot of times. People are 
sometimes cobbling together different part-time jobs. And the 
data show this.
    And the question, I think, for the long-term growth of our 
economy is whether a pro-growth pattern can be sustained when 
you have many people who are underemployed, and I think that 
this is a particular cost and feature of our labor landscape 
right now in the recovery.
    And again, I look forward to working with you to figure out 
ways in which we can----
    Senator Wyden. I am especially interested in going back to 
the skills at bringing people together and following up further 
on your ideas for how that could be done. I mean, what happened 
in 1986--and all of us here have been looking back at the 
lessons of 1986, and this is a different time. There are 
different challenges, but there are some lessons there.
    For example, in 1986, Democrats were very interested, 
rightfully so, in going after some of these ridiculous special 
interest tax breaks. Republicans said, we are interested in 
approaches that particularly promote economic efficiency in the 
private sector.
    So there are a variety of ways to bring people together. 
You have skills in that particular space. They are much in 
demand. I want to talk to you more about those kinds of 
approaches.
    Let me just turn to you with one quick question, Ms. 
Schmidtlein. And, obviously, you have terrific credentials. My 
colleagues were talking about the trade laws. You have 
expertise particularly, as I understand it, in the antidumping/
countervailing duty statute space, and that is very important 
for a whole host of issues we are concerned about as they 
relate to renewable energy and a variety of different areas.
    Tell us a little bit about what you see is the value of 
those statutes and how you can use them, again, to help pry 
open more opportunities for us to generate good-paying jobs in 
the private sector.
    Ms. Schmidtlein. Thank you, Senator Wyden.
    As you said, I agree that these are incredibly important 
statutes, and what they do is, they provide an opportunity for 
U.S. businesses and workers to level the playing field if they 
are facing unfair trade practices. And that is the purpose of 
them.
    So, if they are and they can get a remedy to level that 
playing field, then companies can compete to the best of their 
ability, which can, obviously, have the impact of creating jobs 
and preserving jobs.
    Senator Wyden. I intend to support both of your 
nominations. I thank you today.
    Thank you, Mr. Chairman.
    The Chairman. Thank you, Senator.
    I have four obligatory questions I have to ask each of you. 
I will ask the questions, and I would like you to indicate 
whether you agree or disagree.
    Is there anything you are aware of in your background that 
might present a conflict of interest with the duties of the 
office to which you have been nominated?
    Ms. Raskin. No.
    Ms. Schmidtlein. No.
    The Chairman. No. Thank you.
    Do you know of any reason, personal or otherwise, that 
would in any way prevent you from fully and honorably 
discharging the responsibilities of the office to which you 
have been nominated?
    Ms. Raskin. No.
    Ms. Schmidtlein. No.
    The Chairman. Do you agree, without reservation, to respond 
to any reasonable summons to appear and testify before any duly 
constituted committee of the Congress, if you are confirmed?
    Ms. Raskin. Yes.
    Ms. Schmidtlein. Yes.
    The Chairman. And this is a fourth that we have added. Do 
you commit to provide a prompt response in writing to any 
questions addressed to you by any Senator of this committee?
    Ms. Raskin. Yes.
    Ms. Schmidtlein. Yes.
    The Chairman. Thank you. That last was--they are all, 
obviously, very important, but we kind of pride ourselves in 
this committee on working together. So, when a minority member 
has a question to ask of Treasury or whatever the relevant 
agency might be, we in the committee support it. So long as it 
is a reasonable request, and they are generally reasonable, we 
work together as a team, and I urge you to respond very quickly 
to those questions.
    Second, we developed a pattern, at least I have, over the 
years, which I think has served us quite well; namely, keeping 
in close contact with the relevant people in the administration 
and not getting blind-sided.
    For example, I speak weekly with Secretary Lew. We just 
talk to each other about matters that affect the Treasury that 
I am interested in, and it is very helpful. I just think that 
getting the communication, getting to know people better, makes 
a difference.
    In addition, I speak frequently with acting Commissioner 
Danny Werfel, as he is working to get the IRS back up to speed. 
He is very good. He always calls me when there is about to be 
some news. He calls me in advance, and it makes a big, big 
difference.
    So I urge you both, if something is coming up that is 
relevant, let us know in advance, because we do not like 
surprises, and you will find this committee very much wants to 
work with you, with both the ITC and, also, with the Treasury.
    We are a team. We may not always agree, but the more we can 
talk things out, the more likely it is we are going to find a 
constructive resolution, and, obviously, that helps serve the 
American people. But it is something I find very helpful and I 
think is very important.
    Senator Hatch?
    Senator Hatch. Well, thank you. I intend to support both of 
you. I think you are excellent choices, and we will do 
everything we can to speed this process up as much as we can.
    With regard to the IRS, though, I have to say that we have 
to continue the cooperation as we investigate these problems 
that have arisen, showing preferences in the department, and I 
think you have to be as interested in that as we are, because 
you do not want that to happen either way.
    If the IRS loses its reputation for decency and honor, it 
hurts everybody. So we will count on you to help in that regard 
and to make sure that the investigation that we are conducting 
is completed, and completed properly.
    I think we have handled it rather well. I want to 
compliment the chairman. We have been working well together. 
Our chairman has done a terrific job, but we are about halfway 
through it, and we need to finish it up. So we are going to 
need your help, Ms. Raskin, and I look forward to working with 
you at the ITC as well.
    Congratulations.
    The Chairman. Thank you. Well, we wish you both all good 
luck.
    I know you will work hard. I know you are committed to 
public service, and I wish you all the best.
    The hearing is adjourned.
    [Whereupon, at 11:33 a.m., the hearing was concluded.]


                            A P P E N D I X

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