[Senate Hearing 115-214]
[From the U.S. Government Publishing Office]






                                                       S. Hrg. 115-214

                       ANTICIPATED NOMINATION OF 
                         STEVEN TERNER MNUCHIN

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

                                HEARING

                               before the

                          COMMITTEE ON FINANCE
                          UNITED STATES SENATE

                     ONE HUNDRED FIFTEENTH CONGRESS

                             FIRST SESSION

                                 on the

                       ANTICIPATED NOMINATION OF

         STEVEN TERNER MNUCHIN TO BE SECRETARY OF THE TREASURY

                               __________

                            JANUARY 19, 2017

                               __________





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            Printed for the use of the Committee on Finance
                                   ______

                         U.S. GOVERNMENT PUBLISHING OFFICE 

29-928-PDF                     WASHINGTON : 2018 

















                          COMMITTEE ON FINANCE

                     ORRIN G. HATCH, Utah, Chairman

CHUCK GRASSLEY, Iowa                 RON WYDEN, Oregon
MIKE CRAPO, Idaho                    DEBBIE STABENOW, Michigan
PAT ROBERTS, Kansas                  MARIA CANTWELL, Washington
MICHAEL B. ENZI, Wyoming             BILL NELSON, Florida
JOHN CORNYN, Texas                   ROBERT MENENDEZ, New Jersey
JOHN THUNE, South Dakota             THOMAS R. CARPER, Delaware
RICHARD BURR, North Carolina         BENJAMIN L. CARDIN, Maryland
JOHNNY ISAKSON, Georgia              SHERROD BROWN, Ohio
ROB PORTMAN, Ohio                    MICHAEL F. BENNET, Colorado
PATRICK J. TOOMEY, Pennsylvania      ROBERT P. CASEY, Jr., Pennsylvania
DEAN HELLER, Nevada                  MARK R. WARNER, Virginia
TIM SCOTT, South Carolina            CLAIRE McCASKILL, Missouri
BILL CASSIDY, Louisiana

                     Chris Campbell, Staff Director

              Joshua Sheinkman, Democratic Staff Director

                                  (ii)























                            C O N T E N T S

                              ----------                              

                           OPENING STATEMENTS

                                                                   Page
Hatch, Hon. Orrin G., a U.S. Senator from Utah, chairman, 
  Committee on Finance...........................................     1
Wyden, Hon. Ron, a U.S. Senator from Oregon......................     4

                        CONGRESSIONAL WITNESSES

McCarthy, Hon. Kevin, a U.S. Congressman from California.........     8
Hensarling, Hon. Jeb, a U.S. Congressman from Texas..............     9

                         ADMINISTRATION NOMINEE

Mnuchin, Steven Terner, Secretary-Designate, Department of the 
  Treasury, Washington, DC.......................................    12

               ALPHABETICAL LISTING AND APPENDIX MATERIAL

Casey, Hon. Robert P., Jr.:
    Submissions for the record...................................    99
Hatch, Hon. Orrin G.:
    Opening statement............................................     1
    Prepared statement with attachments..........................   102
Hensarling, Hon. Jeb:
    Testimony....................................................     9
McCarthy, Hon. Kevin:
    Testimony....................................................     8
Menendez, Hon. Robert:
    Submissions for the record...................................   129
Mnuchin, Steven Terner:
    Testimony....................................................    12
    Prepared statement with attachment...........................   134
    Biographical information.....................................   139
    Responses to questions from committee members................   151
Wyden, Hon. Ron:
    Opening statement............................................     4
    Prepared statement...........................................   256

                             Communications

Computing Technology Industry Association (CompTIA)..............   261
Jones, Mike......................................................   262
Meade, Erica Helm................................................   263
Tomassone-Bach, Jan..............................................   263

                                 (iii)

 
                       ANTICIPATED NOMINATION OF 
                         STEVEN TERNER MNUCHIN

                              ----------                              


                       THURSDAY, JANUARY 19, 2017

                                       U.S. Senate,
                                      Committee on Finance,
                                                    Washington, DC.
    The hearing was convened, pursuant to notice, at 10 a.m., 
in room SD-215, Dirksen Senate Office Building, Hon. Orrin G. 
Hatch (chairman of the committee) presiding.
    Present: Senators Grassley, Crapo, Roberts, Enzi, Cornyn, 
Thune, Burr, Isakson, Portman, Toomey, Heller, Scott, Cassidy, 
Wyden, Stabenow, Cantwell, Nelson, Menendez, Carper, Cardin, 
Brown, Bennet, Casey, Warner, and McCaskill.
    Also present: Republican Staff: Chris Campbell, Staff 
Director; Mark Prater, Deputy Staff Director and Chief Tax 
Counsel; Nicholas Wyatt, Tax and Nominations Professional Staff 
Member; Tony Coughlan, Tax Counsel; Preston Rutledge, Tax 
Counsel; Jeff Wrase, Chief Economist; and Lindsay Steward, 
Detailee. Democratic Staff: Joshua Sheinkman, Staff Director; 
Tiffany Smith, Chief Tax Counsel; Michael Evans, General 
Counsel; Daniel Goshorn, Investigative Counsel; Elizabeth 
Jurinka, Chief Health Advisor; Ian Nicholson, Investigator; and 
Jayme White, Chief Advisor for International Competitiveness 
and Innovation.

 OPENING STATEMENT OF HON. ORRIN G. HATCH, A U.S. SENATOR FROM 
              UTAH, CHAIRMAN, COMMITTEE ON FINANCE

    The Chairman. The committee will come to order.
    Welcome to everyone to this morning's hearing. We will 
discuss the nomination of Mr. Steven Mnuchin to serve as 
Secretary of Treasury for the incoming Trump administration.
    And I want to officially welcome Mr. Mnuchin to the Finance 
Committee. I certainly appreciate your willingness to appear 
before us here today and to serve in this important position.
    The position of Treasury Secretary is among the most 
important in the executive branch. The next Treasury Secretary 
will be asked a lot of questions that are going to be very, 
very important here today. We are going to be talking about 
advancing policies that will improve our Nation's economic and 
fiscal outlook.
    This position oversees both the collection of taxes and the 
management of our debt. And in addition, as Congress works to 
reform our Nation's tax code and fix our broken health-care 
system, it is absolutely essential that we have a cooperative 
partner overseeing Treasury. That is, quite frankly, something 
that has been missing for the past 8 years as the Obama 
Treasury has become increasingly opaque and nonresponsive to 
inquiries and communications from members of Congress.
    So, as we consider Mr. Mnuchin's nomination, ensuring that 
both Congress and the incoming administration are committed to 
sharing information and communicating on policy will be among 
my top priorities. And in that regard, I believe the President-
elect has selected a nominee who will provide a clear channel 
of communication and be willing to work with Congress on these 
all-important efforts.
    We discussed, coming over here, that he is going to need to 
work very closely with members of this committee, and he has 
committed to do so.
    Another priority for me will be the advancement of pro-
growth trade policies. While USTR is the principal agency for 
international trade policy, Treasury plays a key role in 
several important areas, including the development of 
international investment agreements and oversight of Customs' 
revenue functions.
    As the new administration comes in, I want to make sure, 
first and foremost, that our trade policies do no harm. 
Proposals to, for example, impose unilateral import tariffs as 
a key tool of international economic policy need to be 
carefully evaluated to ensure they do not hurt us at home.
    In addition, I want to make sure that any new trade 
agreements establish the highest standards for U.S. 
stakeholders consistent with the Trade Promotion Authority 
statute enacted in 2015.
    Finally, I expect you to engage in much better 
consultations with the committee regarding U.S. trade policies 
than we have had under President Obama.
    I look forward to a productive conversation about these 
issues today and in the coming months. Objectively speaking, I 
do not believe anyone can reasonably argue that Mr. Mnuchin is 
unqualified for this position.
    He has 3 decades of experience working in the financial 
sector in a wide variety of capacities. He has been a leader 
and a manager throughout his career, demonstrating an ability 
to make tough decisions and to be accountable. And he has a 
reputation of being a problem-solver and an excellent 
communicator. Indeed, we have heard from numerous organizations 
and associations in a wide variety of industries all expressing 
their admiration of Mr. Mnuchin and their support for his 
nomination.
    Put simply, if the confirmation process focused mainly on 
the question of nominees' qualifications, there would be 
little, if any, opposition to Mr. Mnuchin's nomination. 
Unfortunately, that is not the world we are living in.
    Today, we are in the midst of an unprecedented effort to 
stall and prevent confirmation on the Cabinet nominations of an 
incoming President. It is disappointing that we have taken this 
turn in the Senate where the minority openly and in so many 
words is committed to obstructing nominees to positions across 
the board, in many cases knowing full well that they cannot 
prevent the outright confirmation of nominees at all.
    My colleagues sometimes are content to unfairly and, in 
some cases, maliciously malign, more or less, every nominee 
before they can assume their post. I hope that is not true of 
our Senate Finance Committee members here today.
    With regard to Mr. Mnuchin's nomination, we have seen quite 
a bit of consternation over the process and the timing of 
hearings. We have heard demands that we convene additional 
panels of witnesses, a step that has no precedent in the modern 
history of this committee. There was even a, quote, ``mock 
hearing'' on this nomination yesterday, held outside of the 
committee, focused on issues that are essentially unrelated to 
Mr. Mnuchin's qualifications.
    Let me be clear. While my colleagues may believe that 
nominees in the incoming administration should be treated 
differently than those of any previous administration, on this 
committee we have followed the same vetting and hearing process 
that has been in place for decades and applied to both 
Republicans and Democrats alike.
    With regard to the substantive arguments being made in 
opposition to Mr. Mnuchin, I am hesitant to go into too much 
detail before giving the nominee a chance to refute any 
accusations that have been made. That said, I do want to note a 
few simple facts.
    First, no one has credibly alleged that any laws, 
regulations, or industry standards were violated by companies 
run by Mr. Mnuchin. On the contrary, speaking of the main set 
of allegations regarding the foreclosure practices of OneWest 
Bank, all independent evaluations of the company's actions have 
resulted in high marks. This includes reviews by the FDIC 
Inspector General and the Department of Treasury.
    Second, any claims that Mr. Mnuchin's businesses 
contributed to the housing and foreclosure crisis that 
precipitated the financial collapse of 2008 are similarly 
lacking in merit. Mr. Mnuchin had no involvement in the 
mortgage market in the years leading up to the collapse. In 
fact, it is my understanding that after purchasing IndyMac and 
all of its toxic mortgage assets, Mr. Mnuchin's company offered 
loan modifications to the vast majority of its delinquent 
borrowers and was one of the very first institutions to make 
offers to forgive portions of loan principal balances in order 
to reduce foreclosures.
    To that point, Mr. Mnuchin is joined by a guest today, Ms. 
Faith Bautista, president and CEO of the National Asian 
American Coalition and head of the National Diversity 
Coalition. In those capacities, she worked with many homeowners 
to work out loan modifications with OneWest Bank. She is here 
today to support Mr. Mnuchin's nomination.
    Finally, I will just note that those making claims that Mr. 
Mnuchin's connection to the mortgage and banking industry is, 
on its own, disqualifying, are conveniently forgetting that the 
current Treasury Secretary's tenure at a major Wall Street bank 
included overseeing business units that were sanctioned by the 
SEC and others for practices that harmed innocent investors. 
Yet when his nomination came before the Senate, this connection 
to Wall Street and the financial crisis was deemed forgivable.
    Like I said, I will let Mr. Mnuchin defend himself from the 
specious lines of attack, which, given the lack of credibility 
in the accusations, should not be too difficult for a man of 
his talents.
    For now, I simply hope that we can have a fair and open 
discussion during the committee hearing this morning and during 
the course of what will likely be a long hearing.
    And I hope that, going forward, my colleagues will apply 
the same standards, both in terms of process and policy 
substance, that have applied to nominees in previous 
administrations, including theirs.
    Once again, I want to thank Mr. Mnuchin for being here 
today. I look forward to hearing his testimony and look forward 
to seeing what my colleagues have in mind with regard to their 
questions of him.
    With that, I will turn to my ranking member, Senator Wyden, 
for his opening remarks.
    [The prepared statement of Chairman Hatch appears in the 
appendix.]

             OPENING STATEMENT OF HON. RON WYDEN, 
                   A U.S. SENATOR FROM OREGON

    Senator Wyden. Thank you very much, Mr. Chairman.
    And welcome to you, Mr. Mnuchin.
    This is our first hearing in the 115th Congress, so there 
is a bit of housekeeping.
    First, congratulations to my friend, Senator Hatch, on his 
selection to continue leading the committee on behalf of the 
majority.
    I also want to welcome our two new members, Senator 
McCaskill and Senator Cassidy. We are lucky to have you both.
    Now to the business at hand. Aside from the President, 
there may be no individual with a tighter grasp on the levers 
of our economy than the Secretary of Treasury. That has been 
true since the days of Alexander Hamilton. When you read about 
the nominee for Treasury Secretary, given all the power that 
this position holds, you hope not to see phrases like 
``foreclosure machine,'' ``redlining,'' ``offshore funds,'' and 
``predatory lending.''
    I am sure today's hearing is going to cover a wide range of 
matters, whether it is Mr. Mnuchin's background and 
qualifications or the incoming administration's policy agenda. 
I am going to begin with a topic that cuts across all of these 
matters, the truly disgusting inequity and abuse of America's 
tax laws.
    The tax code today is a tale of two systems. For wage 
earners, like cops and nurses, there are not any special tax 
dodges. The rules that apply to them are firm and involuntary. 
Once or twice a month, their taxes come right out of their 
paychecks, not cutting corners.
    The rules are different for the powerful and the well-
connected. They have armies of lawyers and accountants at their 
disposal. With the right advice, the most fortunate individuals 
in our country can decide for themselves how much tax to pay 
and when to pay it. So let us look at Mr. Mnuchin's history.
    There is no clearer example than Mr. Mnuchin's hedge fund 
setting up outposts in Anguilla and the Cayman Islands, an 
action that can be explained only by the island's 0-percent tax 
rate. It certainly was not for ease of commute or for the 
infrastructure.
    In Mr. Mnuchin's case, millions of dollars in profits from 
Hollywood exports, like the movie ``Avatar,'' were funneled to 
an offshore web of entities and investors.
    When Mr. Mnuchin's bank was up for a merger that had the 
potential to deliver a huge financial gain, a foundation he 
chaired reportedly used tax-exempt dollars to fund an 
astroturfing campaign pushing for the deal's approval. In the 
public comment period of a potential merger, that is the 
equivalent of stuffing the ballot box.
    Mr. Mnuchin operates seven personal trusts, including one 
known as a ``dynasty trust'' that will shield tens of millions 
of dollars from taxes. In my view, if you look at our history, 
our Nation wanted to reward merit, not to perpetuate dynasties.
    Now, as a nominee for a Cabinet position, Mr. Mnuchin could 
be in line for a special elective Federal tax deferral on money 
made by selling stocks and bonds. This is the very definition 
of getting to pay what you want when you want.
    Now, there is a common answer when these kinds of tax 
tricks come under a spotlight. It is said that people who use 
them are just following the laws on the books, and that might 
be true. The outrage in tax law is what is legal and that every 
member of the Senate has allowed it to stay legal. In my view, 
this outrage is going to change only when taxpayers are no 
longer divided into two very different sets of tax rules.
    Now, this provides a segue to the important policy 
questions. Setting aside Mr. Mnuchin's finances and background, 
the tax reform agenda already being advanced by the President-
elect would perpetuate and, in fact, worsen the unfairness in 
the tax code.
    On the campaign trail, the President-elect delivered lots 
of tough talk about fixing the tax system. He said he alone 
could fix it, because he had spent a career using the system to 
his advantage. As for the details, the few position papers that 
were put forward did not get a whole lot of attention outside 
the business pages. But after Mr. Mnuchin's nomination was 
announced, he laid down a clear and specific marker. So I will 
quote Mr. Mnuchin directly: ``Any reductions we have in upper-
income taxes would be offset by less deductions, so there would 
be no absolute tax cut for the upper class.'' Let me repeat 
that, and for the sake of brevity I am going to start calling 
it the Mnuchin Rule: ``No absolute tax cut for the upper 
class.''
    So let us take stock of what is already happening on 
Capitol Hill. The first major act of the unified Republican 
government, repealing the Affordable Care Act, would 
immediately violate the pledge of no tax cuts for the wealthy. 
Bottom line, the ACA repeal scheme that was kicked off last 
week is a Trojan horse of tax breaks for the most fortunate. It 
is paid for by taking tax benefits for health insurance away 
from millions of working people.
    Then it is back for round two under an emerging Republican 
plan to fast-track an even bigger tax break for the wealthy. In 
my view, this is proof that the campaign promises about fixing 
the tax system were pretty much a head fake.
    For example, the President-elect said he would close the 
carried interest loophole. It is a favorite of investment fund 
managers, but his plan actually gives them a 25-percent tax 
cut. In fact, it slashes tax rates for corporations and the 
wealthy across the board at a cost of trillions of dollars, so 
it sounds to me like the Mnuchin Rule is already on the ropes.
    Now, what would the new administration's tax plan do for 
people of more modest incomes? Millions of working parents, 
mostly single, would get hit with tax increases because they 
lose head-of-household status when they file. If you wanted to 
write a tax plan that would push even more working-class folks 
out of the economic winner's circle, that is how you would do 
it.
    Now, given how central tax policy is to our jurisdiction, I 
hope the committee is able to discuss those issues today. But, 
of course, the Treasury Secretary and this committee handle a 
lot more than taxes, so there are other issues to raise.
    On a broad level, it is my view that Senators need to make 
a judgment call about what sort of person they want to head the 
Treasury Department. Mr. Mnuchin's career began in trading 
financial products that helped to bring on the housing crash 
and the Great Recession. After nearly 2 decades at Goldman 
Sachs, he left in 2002 and joined a hedge fund. In 2004, he 
spun off a hedge fund of his own, Dune Capital. It was only a 
few lackluster years before Dune began to wind down its 
investments in 2008.
    In early 2009, Mr. Mnuchin led a group of investors that 
purchased a bank called IndyMac, and they renamed it OneWest. 
Colleagues, OneWest was truly unique. While Mr. Mnuchin was 
CEO, the bank proved it could put more vulnerable people on the 
street faster than just about anybody else around.
    While Mr. Mnuchin was CEO, a OneWest vice president 
admitted in a court proceeding to robo-signing upwards of 750 
disclosure documents a week. She spent less than 30 seconds on 
each. And in fact, she shortened her signature to speed the 
process along.
    Investigations found that the bank frequently mishandled 
documents and skipped over reviewing them. All it took to 
plunge families into the nightmare of potentially losing their 
home was 30 seconds of sloppy paperwork and a few haphazard 
signatures.
    These tactics were in use between 2009 and 2014, a period 
during which the bank foreclosed on more than 35,000 homes. 
``Widow foreclosures'' on reverse mortgages--OneWest did more 
of those than anybody else.
    Now, the bank defends its record on loan modifications, but 
it was found guilty of an illegal practice known as ``dual 
tracking.'' One bank department tells homeowners to stop making 
payments so they can pursue modification, while another 
department presses on and hurdles those folks into foreclosure.
    OneWest made only two loans to African-American borrowers 
in 2014 and 2015 according to an analysis by the California 
Reinvestment Coalition. Just a fraction of its branches 
occupied storefronts in minority communities; none were in 
predominantly African-American communities, but minorities 
still represented a disproportionately large share of the 
people who were booted out of their homes.
    Under Mr. Mnuchin, OneWest churned out foreclosures like 
Chinese factories churned out Trump suits and ties.
    And with the combination of extreme foreclosure tactics and 
a bailout from the FDIC, OneWest became a rainmaker for Mr. 
Mnuchin and his fellow investors. At precisely the same time 
the foreclosure machine was running, OneWest funds were poured 
into glamorous investments in Hollywood.
    In 2012, OneWest struck an agreement to loan hundreds of 
millions of dollars to a movie studio called Relativity Media. 
In 2014, while he was CEO of OneWest's holding company, Mr. 
Mnuchin bought his own stake in Relativity. He took a seat in 
the boardroom, was appointed co-chairman; he even bought a 
private jet with Relativity's co-founder. But the company 
quickly tanked.
    OneWest pulled out $50 million, emptying several Relativity 
accounts, including one earmarked for building expenses that 
expanded wages for contractors and tradesmen.
    Mr. Mnuchin bailed out just before the studio declared 
bankruptcy. There have been press reports that the FBI has 
denied a Freedom of Information Act request concerning 
Relativity Media on the grounds that disclosure is likely to 
interfere with a pending law enforcement proceeding.
    I have read the FBI background report on Mr. Mnuchin, and I 
saw no discussion of any such enforcement action in the report. 
That may be entirely appropriate.
    Mr. Chairman, I want to continue to work with you to find 
out what the enforcement proceeding cited in the Freedom of 
Information Act denial is and how it relates to the nominee, if 
it does at all.
    For Mr. Mnuchin, Relativity Media's failure was not much of 
a setback considering the profits that OneWest's foreclosure 
machine was still pulling in. The purchase price of the bank 
was less than $1.6 billion. After 5 years of foreclosures and 
profits, it sold for $3.4 billion to CIT Group.
    Now, outside OneWest and Relativity, Mr. Mnuchin spent 
years as a director of the holding company for Sears, obviously 
an iconic American brand. He served on the committee that 
watchdogged the employee pension fund. The record shows that 
that plan was routinely mismanaged and underfunded. Retirees 
saw their pensions cut, losing a monthly health-care stipend 
that was enough to offset roughly a third of the premiums the 
seniors pay for Medicare Part B.
    Sears also shuttered hundreds of stores nationwide over the 
last few years and recently announced another round of 
closures. Once again showing a truly impressive capacity to 
advantage himself while others fell behind, Mr. Mnuchin joined 
a small group of investors that spun off the company's real 
estate into a separate trust. It was arguably the most valuable 
asset Sears had left. So as retirees watched their pensions 
shrink and Sears' remaining workers worried about an uncertain 
future, this small number of powerful individuals made out just 
fine.
    Now, I am going to wrap up, and I just want to step back 
for a moment to talk about the role of the Secretary of the 
Treasury. This is the person who is going to have enormous 
influence over Americans' paychecks and mortgages, the caliber 
of job opportunities they face, the safety and stability of the 
financial system that holds and invests their hard-earned 
money, and much more.
    This is a position that has the power to help reverse 
decades of yawning inequality that has hollowed out the middle 
class, dimmed the hopes of so many young people, and left 
millions buried in debt. The Treasury Secretary ought to be 
somebody who works on behalf of all Americans, including those 
who still wait for the economic recovery to show up in their 
communities.
    When I look at Mr. Mnuchin's background, it is a real 
stretch to find hard evidence that he would be that kind of 
Treasury Secretary.
    Now, just finally, Mr. Chairman, one other bit of 
housekeeping. And I want to make it very clear that Democrats 
have in no way been obstructing Mr. Mnuchin's confirmation. We 
are doing our jobs to truly vet this nominee. We are, in fact, 
colleagues, doing it as we have been doing it for almost 20 
years on a bipartisan basis. And if you have any questions 
about the fairness of it, ask Tim Geithner about what it was 
like in 2009.
    And I want to point out that at your request, Mr. Chairman, 
I agreed to shorten the normal 1-week notice period to the 
public so that Mr. Mnuchin's hearing could be held today.
    Ultimately, nomination hearings are about hearing what the 
nominee is for. So, Mr. Mnuchin, that is what today is all 
about. We look forward to your testimony.
    I note also we have a couple members of the House here, and 
we want to welcome them as well.
    The Chairman. Well, thank you, Senator.
    [The prepared statement of Senator Wyden appears in the 
appendix.]
    The Chairman. We are pleased to welcome two of our 
distinguished colleagues from the House of Representatives. 
First we will hear from Representative Kevin McCarthy, the 
House majority leader, then we will hear from Representative 
Jeb Hensarling, chairman of the House Financial Services 
Committee.
    So, Leader McCarthy, please feel free to proceed with your 
introduction, and then we will go to Mr. Hensarling and then we 
will go to the nominee.

               STATEMENT OF HON. KEVIN McCARTHY, 
               A U.S. CONGRESSMAN FROM CALIFORNIA

    Representative McCarthy. Well, Chairman Hatch, Ranking 
Member Wyden, and the members of the committee, I am proud to 
be here today to introduce an extremely capable investor, 
banker, financier, and a fellow Californian, Steve Mnuchin, the 
nominee to be the next Secretary of the Treasury for the United 
States.
    The Secretary of the Treasury is a distinguished office, 
once held by luminaries of our history, from Alexander Hamilton 
to Andrew Mellon. It is an office that requires deep technical 
skill, strategic vision, and uncommon instincts, all qualities 
that Steven possesses and has demonstrated in the private 
sector.
    With decades of experience in banks, financial firms, and 
even movie production, he has a history of growing returns and 
achieving financial stability for his clients and shareholders.
    I think it says a lot about this man that he would leave 
such a successful career to apply his talents for the benefit 
of the American people as a whole. Steven is a patriot and an 
independent thinker, and America is in great need of such 
capable leaders. I believe our Nation is enriched when we have 
people serving in government who have spent their life serving 
outside of government.
    I know Steven shares with us here in Congress two 
fundamental priorities: to enable an economy that creates 
meaningful and good-paying American jobs, and to improve 
economic security for the American people.
    He understands that government does not create jobs, but 
government can create the structure and incentive for broad 
economic growth that benefits all at the expense of none. To do 
this, we have to rethink the way our country taxes, regulates, 
and trades.
    He shares with Congress the goal of a pro-growth tax plan 
that makes tax rates fairer and encourages businesses to hire 
workers here in America. He knows firsthand the devastating 
impact of irresponsible financial regulations that stifle 
national and local lenders alike, impede small-business 
creation, and drag down job creation. And he will work with 
President Trump and Congress to promote a trade policy that 
benefits American workers and consumers.
    But if broad economic growth for the American people is our 
top goal, it is not our only goal. Prosperity means little if 
it can all be lost in another financial crisis. The American 
people must have the complete assurance that their government 
is doing everything within its power to make sure the financial 
crisis that happened in 2007 and 2008 never happens again.
    As Secretary of Treasury, Steven will work to defend the 
integrity of the American people's retirement accounts, will 
fight for the creation of not just good-paying jobs, but secure 
jobs, and will work for economic stability so that people's 
investments in their homes and elsewhere are secure.
    So I thank you, Chairman Hatch, Ranking Member Wyden, and 
the entire committee, for this opportunity to introduce you to 
Steven Mnuchin.
    I hope the committee and the Senate as a whole will give 
thoughtful consideration to this accomplished and qualified 
nominee for the Secretary of Treasury.
    The Chairman. Well, thanks, Leader McCarthy. We appreciate 
having you here, and we appreciate the hard work you do over in 
the House.
    Let's go to Congressman Hensarling.

               STATEMENT OF HON. JEB HENSARLING, 
                 A U.S. CONGRESSMAN FROM TEXAS

    Representative Hensarling. Chairman Hatch, Ranking Member 
Wyden, and distinguished members of the committee, it is an 
honor to appear before you today to speak in support of Steven 
Mnuchin's confirmation as Secretary of the Treasury.
    President-elect Trump has outlined a bold and forward-
looking agenda to tackle the very serious problems that face 
hardworking American families, families who have seen their 
paychecks stagnate, their savings shrink, and their dreams 
diminished.
    To implement this agenda, the President-elect has chosen a 
roster of very impressive citizens to serve in his Cabinet. 
Each of these individuals has achieved incredible success in 
their chosen field and are among the Nation's most respected 
leaders in business, in the military, and in public service. 
Each one of them is clearly committed to the President-elect's 
vision of an America that is stronger, safer, more prosperous, 
and teeming with opportunity, and an America where Washington 
is truly accountable to We, the People.
    It is the most impressive and qualified list of Cabinet 
nominees in memory. And I believe President-elect Trump was 
right to include Steven Mnuchin in this select list.
    As we confront America's economic challenges together, Mr. 
Mnuchin's very successful background in investment banking, 
retail banking, and business will not only be vital to the 
incoming administration, but to those of us who serve in 
Congress as well. He understands the urgent need to increase 
jobs, incomes, and opportunity, and has the critical experience 
necessary to help do just that.
    He knows all too well that this economy simply is not 
working for working Americans. Nearly 8 years after the last 
recession ended, Americans are still stuck in the slowest 
recovery in generations; 301,000 manufacturing jobs disappeared 
in the last 8 years.
    To get our economy back on track with sustained growth and 
higher incomes, Mr. Mnuchin knows Washington must give all 
Americans more freedom, the freedom to save, the freedom to 
invest, the freedom to innovate, so they can dream big and 
pursue those dreams. I have no doubt Mr. Mnuchin is ready and 
capable to hit the ground running and work as a partner with 
Congress on President-elect Trump's pro-growth, pro-jobs 
agenda.
    I have had the opportunity to meet and speak with Mr. 
Mnuchin on several occasions about the Trump administration's 
plans for fundamental pro-growth tax reform, for banking and 
capital markets reforms that work for all, and other vital 
items on the 
President-elect's agenda. I am deeply impressed by his 
knowledge, his talent, and his commitment to work with Congress 
on these priorities.
    The Secretary of Treasury's responsibilities are 
formidable, as we all know. As you may know, Albert Gallatin, 
who served as Treasury Secretary for Presidents Thomas 
Jefferson and James Madison, once said, quote, ``The place of 
the Secretary of Treasury is more laborious and responsible 
than any other.''
    I have every confidence that Steven Mnuchin is up to the 
job. But far more importantly, the man who will be our 
President in a little more than 24 hours has every confidence 
that Steven Mnuchin is up to the job.
    The American people have now entrusted President-elect 
Trump with the Oval Office. The election is over and should not 
be relitigated now. That both disserves and disrespects the 
American people. With the advice and consent of the Senate, the 
President-elect should be able to surround himself with 
honorable, accomplished, and talented men and women of his 
choosing to serve in his Cabinet. In this vein, he has wisely 
chosen Steven Mnuchin for the position of Treasury Secretary.
    Now as the Senate fulfills its constitutional duty to 
advise and consent, I do not offer advice since, as a House 
member, I am not all that fond of receiving your advice. 
[Laughter.]
      
    But I do remain hopeful that in the finest traditions of 
this body, the questioning of Mr. Mnuchin will be fair and 
focused on his experience and his ability to fulfill the duties 
of Treasury Secretary and to carry out the President-elect's 
agenda. I ask you to recognize the impressive qualifications he 
brings to the office and confirm him without delay.
    Thank you, Mr. Chairman.
    The Chairman. Well, thank you, Mr. Hensarling. We 
appreciate both of you coming. We know you are really busy over 
in the House of Representatives, but to come here and testify 
for Mr. Mnuchin, I am sure he appreciates it, as do all of us.
    Senator Roberts has to leave, so he is going to take less 
than 2 minutes. And I am going to turn to him before I start 
asking any questions.
    Senator Roberts?
    Senator Roberts. Thank you, Mr. Chairman. I will try to 
wrap this up very quickly.
    Mr. Mnuchin, if you are confirmed, will you pledge to work 
with this committee to implement systems, controls, and 
procedures to make sure the tax collection agency of the 
Federal Government can never again be used as a weapon against 
any political opponents of any presidential administration?
    Mr. Mnuchin. Yes, Senator, I absolutely pledge to do that.
    Senator Roberts. I have quite a few pass-through companies 
in Kansas that are very interested with regards to your views 
on tax reform. We could probably talk about that later in the 
interest of time.
    And then I just have an observation. I think that to date--
Mike, what have you done with my--here it is.
    Senator Wyden, I have a Valium pill here that you might 
want to take before the second round. Just a suggestion, sir.
    Senator Wyden. Just another suggestion: we have a lot of 
colleagues waiting; if you could be brief, it would be helpful.
    Senator Roberts. I am going to be very brief.
    Mr. Mnuchin, from the distinguished ranking member's 
remarks, I understand you were in charge of the Great 
Recession----
    Senator Brown. Mr. Chairman, Mr. Chairman, I hope that that 
comment about Valium does not set the tone for 2017 and this 
committee. I like Senator Roberts, but I just cannot quite 
believe that he would say that to the distinguished Senator 
from Oregon.
    Senator Roberts. I said that to the President of the United 
States at one point.
    Senator Brown. Perhaps you did.
    Senator Roberts. Yes.
    Senator Brown. But I would hope that that does not set the 
tone for this session.
    The Chairman. All right, all right.
    [Cross talk.]
    Senator Brown. Mr. Chairman, Mr. Chairman, I sit on the 
Agriculture Committee----
    The Chairman. Order! Order!
    Senator Roberts. I have the time, please.
    Senator Brown [continuing]. And the relationship we are 
building is so different from that. I mean, this is just 
outrageous.
    Senator Roberts. I have the time, please.
    The Chairman. Listen, you----
    Senator Roberts. I do not know about outrageous, but I 
think just a little pinprick of humor might help this committee 
from time to time, which I engage in. And I appreciate the 
gentleman's contribution with regards to the Agriculture 
Committee. And he is a good member of the committee. We work 
together on the Ethics Committee. So I am sorry if I have, you 
know, incurred your wrath, sir. So we will be all right.
    The Chairman. Well, let us start----
    Senator Roberts. All right. The pass-through things on tax 
reform----
    Senator Wyden. Mr. Chairman, we have many colleagues 
waiting----
    Senator Roberts. Fine, Ron. I am done. Thank you.
    The Chairman. All right. Mr. Mnuchin, we will take your 
statement at this point.

         STATEMENT OF STEVEN TERNER MNUCHIN, SECRETARY-
     DESIGNATE, DEPARTMENT OF THE TREASURY, WASHINGTON, DC

    Mr. Mnuchin. Thank you very much. Chairman Hatch, Ranking 
Member Wyden, and members of the committee, it is an honor to 
appear before you today. I am grateful and humbled by 
President-elect Trump nominating me to serve as Secretary of 
the Treasury. It is truly an honor and a privilege to be 
considered for this position.
    Thank you to all the members I have already had an 
opportunity to meet with during this process. I enjoyed meeting 
with you and learning more about the issues that are important 
to you. For those few members whom I did not get a chance to 
meet with, if confirmed, I look forward to meeting with you as 
well.
    I would like to thank Chairman Hatch and his staff for 
taking so much time to work with me and support me through this 
process. In addition, I would like to introduce my fiance, 
Louise Linton, and my children, Emma, J.P., and Dylan, who are 
here with me today, and thank them for their unwavering 
support.
    I would also like to introduce my brother, Alan Mnuchin, 
and his wife, Alessandra, and my father, Robert Mnuchin, who 
has always supported me and taught me that hard work, 
determination, and the ability to bring people together can 
make anything possible.
    I would like to acknowledge my late mother, Elaine Terner 
Cooper, who was an inspiration to me. I would also like to 
acknowledge my grandparents, Emanuel and Mathilda Terner, who 
were also a tremendous influence in my life.
    My grandfather was a first-generation American whose father 
emigrated from Europe. He truly embodied the American dream. He 
started out blowing glass bottles by hand and later built 
Midland Glass into one of the largest glass manufacturing 
companies in the United States, with five factories employing 
thousands of workers. My first job ever was in his factory when 
I was in high school. It was there that I first learned the 
importance of humility, hard work, and commitment.
    For those of you who do not know my background, I studied 
economics at Yale University. At the age of 22, after 
graduating from Yale, I got a job at Goldman Sachs, where I 
spent the next 17 years. I started on a folding chair in the 
mortgage department. Nine years later, after many sleepless 
nights, I was put in charge of mortgages, U.S. Government 
bonds, and municipal securities.
    Several years after that, I worked directly for future 
Secretary of the Treasury Hank Paulson as the firm's chief 
information officer. In that role, I oversaw 5,000 people and a 
$1-billion budget.
    While at Goldman Sachs, I learned the importance of the 
financial markets in providing liquidity and capital to 
businesses, governments, and consumers. A few years later, I 
decided to leave Goldman Sachs to build an investment business. 
After working briefly at ESL Investments, I started my own 
investment business, Dune Capital Management.
    Throughout my career, my commitment was to my clients and 
shareholders, for whom I worked tirelessly to get the best 
results. Thirty years later, my commitment is now to the 
American people, for whom I will work tirelessly by helping to 
grow our economy and create jobs.
    I am eager to share with you why I believe I will serve 
well as America's next Secretary of the Treasury. But first I 
want to correct the record about my involvement with IndyMac 
Bank.
    Since I was first nominated to serve as Treasury Secretary, 
I have been maligned for taking advantage of others' hardship 
in order to earn a buck. Nothing could be further than the 
truth.
    During the summer of 2008, I saw the devastation that was 
caused by the housing crisis when I watched people line up to 
get their life savings out of IndyMac Bank. It was the middle 
of the financial crisis and, despite the global panic, I saw a 
way to save the bank. I applied for a banking charter and 
submitted a bid to the FDIC for IndyMac. On December 31st, just 
before midnight, we signed a binding agreement with the FDIC. 
They later confirmed that our bid was almost $1 billion higher 
than the next best bid.
    We were willing to invest $1.6 billion into the most costly 
bank failure ever to the FDIC deposit fund. We did this because 
we believed in our ability to rebuild and create a successful 
regional bank. We believed in recovery for the American 
economy.
    Let me be clear: my group had nothing to do with the 
creation of the risky loans in the IndyMac loan portfolios. 
When we bought the bank, we assumed these bad loans, which had 
been originated by previous management. Some of those 
individuals had to answer to Federal authorities for their bad 
lending decisions.
    We invested $1.6 billion into a failing financial 
institution when most investors were running for the hills. We 
renamed the business OneWest Bank and saved thousands of jobs. 
We developed a prospering community banking franchise in 
southern California as most banks were pulling back. Over the 
next 2 years, we bought two more struggling banks from the 
FDIC: First Federal of Santa Monica and LaJolla Bank, both 
through competitive bidding. Combined, we had over 70 branches 
and built a robust lending business, especially for small and 
medium-sized businesses.
    As chairman of the bank, I met with hundreds of business 
people from all walks of life who were seeking loans to grow 
their businesses and prosper. Like many banks at the time, 
IndyMac, and its reverse mortgage division, Financial Freedom, 
was unstable due to the large amount of distressed credit 
mortgages in its portfolios. When we bought IndyMac, these 
``legacy loans'' were included in the purchase. The 
responsibility landed on me to clean up the mess others made 
that we inherited.
    We worked very hard to help homeowners remain in their 
homes through modifications, wherever possible. Ultimately, 
OneWest extended over 100,000 loan modifications to delinquent 
borrowers to try to help them out of a bad situation.
    I am proud of the fact that loan modifications started at 
IndyMac under the leadership of the FDIC. However, the FDIC 
loan modification program did not work for everyone. When the 
FDIC took over IndyMac, they estimated that more than half the 
foreclosures would not meet their test for a loan modification. 
And they demanded many policy conditions: extend assistance to 
sympathetic borrowers by establishing affordable and 
sustainable payments by borrowers, increase the net present 
value of cash flows to the owner of the loan, and stabilize 
housing markets. My group had to adhere to servicing agreements 
that limited our ability to make loan modifications that could 
have helped more borrowers.
    In the press it has been said that I ran a ``foreclosure 
machine.'' This is not an accurate description of my role at 
OneWest Bank. On the contrary, I was committed to loan 
modifications intended to stop foreclosures. I ran a ``loan 
modification machine.'' When we could do loan modifications, we 
did them, but many times the FDIC, Fannie Mae, Freddie Mac, and 
bank trustees imposed strict rules governing the process of 
these loans.
    I am proud to be able to say that our bank was able to do 
over 100,000 loans modifications that allowed people the 
opportunity to stay in their homes. Unfortunately, not all of 
the homes were able to be saved through these programs, and 
despite my best efforts, some were sadly subject to 
foreclosure.
    So sincere was my concern over this that in 2010 I 
instructed my lawyers to sue HSBC, as trustee of the 
securitized loans, to allow us to do loan modifications on 
loans in mortgage trusts they oversaw. We won on summary 
judgment and were consequently allowed to do more loan 
modifications and keep more Americans in their homes.
    Similarly, in 2015, when HUD issued Mortgagee Letter 2015-
11, I wrote HUD and asked them to change the policy so we did 
not have to foreclose on senior citizens who were behind small 
amounts of money on taxes and insurance. I was so troubled by 
this that I discussed it with our primary regulator, the Office 
of the Comptroller of the Currency. Unfortunately, HUD did not 
agree, and we were forced to foreclose on senior citizens, even 
if they only owed $1. Not complying with these HUD policies 
would have subjected the bank to penalties and losses from HUD.
    Despite our inability to save every home from foreclosure, 
I am proud of the fact that OneWest Bank was the only one of 14 
banks that was able to complete the independent foreclosure 
review that was conducted by the OCC. Every one of the 175,000 
borrowers who were in the foreclosure process during 2009 and 
2010 were able to have an independent review of their loan. We 
had a very low error rate, and independent government reviews 
routinely showed that we had the most effective loan 
modifications of any bank.
    If we had not bought IndyMac Bank, the bank would likely 
have been broken up and sold in pieces to private investors, 
where the outcome for consumers could have been much more 
bleak. Overall, I helped many homeowners stay in their homes 
and escape financial ruin through my management of OneWest 
Bank.
    My experience confirmed that we must identify and eliminate 
unwise and burdensome policies which contributed to the 
disastrous outcomes that came in the wake of the financial 
collapse.
    Many Americans are still suffering from the disastrous 
ripple effects the 2008 crisis had on our Nation. Faithfully 
ensuring this does not happen again means supporting careful 
oversight of a financial system which prioritizes the needs of 
everyday Americans over the wishes of financial institutions or 
the Federal Government.
    I felt great empathy for the millions of hardworking 
American families who lost their homes because the system 
failed them. If confirmed as Treasury Secretary, I will work 
diligently and compassionately for the American people so that 
we never endure anything like the meltdown of 2008 ever again.
    I was deeply honored when Donald Trump asked me to join his 
campaign as Finance Chairman. I had the opportunity to travel 
with him and hear firsthand from hardworking Americans about 
their concerns for the American economy. Over the last year, I 
visited over 50 cities in 26 States.
    I remember attending my first rally with him in 
Indianapolis. It was an unforgettable experience. As we arrived 
into the stadium packed with 20,000 people, I saw the 
excitement that people had for a Trump presidency.
    On our trip to Flint, MI, I went with the President-elect 
to visit the water treatment facilities and saw firsthand the 
crumbling pipes and the devastation caused by that lead-tainted 
water. We met with water engineers and saw the impact it had on 
that community and the families that live there.
    Across the country on my travels with the President-elect, 
we heard the pained and heartbreaking stories of Americans who 
had lost their jobs to workers in foreign countries. We heard 
the concerns of people and small businesses burdened by high 
taxes just trying to make ends meet.
    In my meetings with you over the last month, you have 
shared the concerns of your constituents, like farmers who 
worry about the death tax wiping out the family farms, or 
workers who are nervous about whether their retirement accounts 
will be safe from ruin.
    One of the greatest reasons I was drawn to President-elect 
Trump's campaign was that it was predicated on a commitment to 
stimulating prosperity for Americans of all backgrounds, 
whether they live in the inner city of Detroit, rural North 
Carolina, the coal country of Ohio or West Virginia, or any 
place in between.
    I share the President-elect's goal to economically empower 
every citizen. We will not rest in our mission until that is a 
reality.
    Among the President-elect's signature issues in this 
campaign was reviving trade policies that put the American 
worker first. I will enforce trade policies that keep our 
currency strong on the world exchanges and create and protect 
American jobs.
    We will also make America the best place for companies to 
do business. Sensible regulation is a necessity for healthy 
markets. However, I saw firsthand how regulatory excess can 
inhibit lending by financial institutions, resulting in a lack 
of access to capital for small businesses and entrepreneurs.
    Alexander Hamilton remarked that the wealth of a nation may 
be promoted by, quote, ``multiplying the objects of 
enterprise.'' Hamilton knew the unique value of entrepreneurial 
activity to a thriving economy. From our Nation's earliest 
days, American businesses have been the greatest repository of 
ingenuity and entrepreneurial spirit in the world. We need to 
unleash that power to generate jobs and create abundance for 
Americans of all backgrounds.
    We will work diligently to limit regulations, lower taxes 
on hardworking Americans and small businesses, and get the 
engine of economic growth firing on all cylinders again.
    In this age of unprecedented online attacks, we must also 
be vigilant about cybersecurity. If confirmed as Secretary of 
the Treasury, I will use my expertise in technology to protect 
Americans' information at the IRS and keep our financial 
architecture safe from malicious attacks.
    I will use the Treasury Department's Office of Terrorism 
and Financial Intelligence to stop the financing of terrorism. 
I will partner with other government agencies in our shared 
goal of allowing our financial markets to operate free from 
digital and physical threats.
    If I am confirmed as Treasury Secretary, I promise I will 
work hard with this committee, all members of Congress, and the 
administration to put forth policies that will help American 
families reach and maintain prosperity. We will make America 
great again.
    Thank you, and I look forward to answering your questions.
    The Chairman. Well, thank you, Mr. Mnuchin.
    [The prepared statement of Mr. Mnuchin appears in the 
appendix.]
    The Chairman. Thank you, Mr. Mnuchin. We appreciate your 
comments.
    I have some obligatory questions that I ask all nominees, 
that we do on this committee.
    First, 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?
    Mr. Mnuchin. I am not. I have worked with the Ethics Office 
and signed an agreement with them to dispose of all my 
investments that could create any conflicts.
    The Chairman. 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 expect to be nominated?
    Mr. Mnuchin. I do not.
    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?
    Mr. Mnuchin. Absolutely. I look forward to it.
    The Chairman. Finally, do you commit to provide a prompt 
response in writing to any questions addressed to you by any 
Senator of this committee?
    Mr. Mnuchin. Well, I have provided over 5,000 pages to the 
staff. I think I have the record of that, so I commit, if there 
are any additional questions, I will respond to them promptly.
    The Chairman. All right. I have to go outside here for a 
minute, so, instead of my starting the question period, I am 
going to turn to the ranking member, my partner in this matter, 
and then I will ask questions when I come back.
    Senator Wyden. Thank you very much, Mr. Chairman.
    Mr. Mnuchin, Medicare finance is about taxes, and it would 
be your responsibility, if confirmed. With the attempt to 
repeal the Affordable Care Act, Medicare's solvency is 
threatened. What steps are needed, in your view, to strengthen 
this program that every senior in America relies on?
    Mr. Mnuchin. Well, first of all, Senator, thank you very 
much. And I very much appreciated the opportunity for us to 
meet yesterday, and especially the opportunity to talk about 
tax reform with you, which I think is very important.
    I completely agree with you that Medicare is very important 
and a very important program and that the safety of that is an 
important issue. And if confirmed, that is something that I 
look forward to working with your staff on to make sure that we 
have the appropriate policies.
    Senator Wyden. Now, if you are confirmed, Mr. Mnuchin, you 
would be the managing trustee for Medicare. Now, would you not 
like to offer something by way of discussion about what you 
would be doing, if confirmed? This is an important part of the 
job.
    Mr. Mnuchin. Senator, I acknowledge that it is a very 
important part of the job. And there are many parts of this job 
that I consider myself an expert on and understand, and there 
are certain parts of this job that, if confirmed, I will work 
on diligently with this committee and others. And there is 
obviously a significant staff. This is a very important issue. 
And as I have said, I am committed to be very responsible in my 
position there and make sure that I properly provide the 
support from the Treasury Department. And I would take my 
responsibility very seriously.
    Senator Wyden. I will just tell you that without any 
specifics on a matter that is so important that you would have 
direct responsibility over, I find it very troubling that you 
will not discuss Medicare. So let us go to terrorism financing.
    The country is fighting ISIS and other terrorist groups. 
The Treasury Department plays a key role in fighting this 
battle. What would be your ideas on additional actions for 
strengthening how the Department fights terror?
    Mr. Mnuchin. Well, let me first say I strongly believe and 
understand that there are very, very important tools within the 
Treasury Department that can combat terrorism and that many of 
these tools, such as sanctions, are extremely effective and 
keep our armed services out of harm. So I am fully committed to 
the maximum amount of law to both enforce the existing 
sanctions in a very strict way, and I will work with the 
President-elect as he sees fit on additional sanctions.
    And there are also other programs within Treasury that I 
believe are very, very effective in fighting terrorism. It is a 
very important part of the Treasury. And I know that that has 
been done very effectively under previous Secretaries.
    Senator Wyden. We all agree it is important. What we are 
trying to do is assess your qualifications. And you have not 
been willing to talk about Medicare, you have not been willing 
to talk specifics on terror.
    Let me take one more crack on qualifications at the 
Committee on Foreign Investment, because this is something else 
as Treasury Secretary you would have responsibilities over, to 
protect our country when a foreign investor makes an investment 
in the United States in a way that has national security 
implications.
    If a foreign investor with ties to a foreign government 
invests in President Trump's business, should the Committee on 
Foreign Investment automatically and with close scrutiny 
examine this transaction?
    Mr. Mnuchin. Senator, first let me say ``yes,'' I think 
that would be appropriate. But let me go back to your other 
question, because I apologize if I did not answer the specifics 
on your terrorism and sanctions question because----
    Senator Wyden. I was searching for any specifics in order 
to be able to assess your qualifications.
    Mr. Mnuchin. Well, Senator, again, I believe there are some 
very important sanctions. As it relates to the sanctions 
against Iran and other countries, I would absolutely enforce 
those, and I would encourage the President to use additional 
sanctions when appropriate.
    And I also understand there are certain classified programs 
that I will be part of at the NSA and will also use that and 
work with the national security group to the maximum amount as 
available by law.
    Senator Wyden. So we did not hear what you would do to 
fight ISIS, we did not get any specifics on Medicare, so now 
let us hear about this most current question with respect to 
the Committee on Foreign Investment. What would you do if you 
are dealing with President Trump's business?
    Mr. Mnuchin. I would deal with President Trump's business 
no differently than I would deal with any business that comes 
before the committee, and I would take my role as Chair of that 
committee very, very significantly.
    I think it is a very important issue. I think perhaps 
previous Secretaries have not enforced some of these things 
necessarily as much as perhaps they should have in protecting 
the American workers and the American people and American 
technology.
    I think this is one of the most important jobs that I would 
have as Secretary of the Treasury.
    Senator Wyden. Mr. Mnuchin, the President is not like 
everybody else. He is the Commander-in-Chief, and any foreign 
government involvement in his business could compromise 
national security. So I am going to reflect on that answer as 
well.
    Can I pursue one other additional question, Mr. Chairman?
    The Chairman. Yes, go ahead, but then I am going to----
    Senator Wyden. Mr. Mnuchin, you ran a hedge fund for a few 
years starting in 2004, and I have been trying to get my arms 
around the Mnuchin web of bank accounts and shell companies. 
They were in the Cayman Islands and Anguilla.
    How many employees did you have in Anguilla?
    Mr. Mnuchin. We did not have any employees in Anguilla.
    Senator Wyden. How many customers did you have there?
    Mr. Mnuchin. We did not have any customers that resided in 
Anguilla.
    Senator Wyden. Did you have an office there?
    Mr. Mnuchin. We did not have an office ourselves there.
    Senator Wyden. So you just had a post office box?
    Mr. Mnuchin. Senator, let me explain to you----
    Senator Wyden. It is just a ``yes'' or ``no'' answer. I am 
already over my time. ``Yes'' or ``no,'' did you just have a 
post office box?
    Mr. Mnuchin. Well, hopefully the other Senators will defer 
some time so I can answer this for you, because I think it is 
an important issue. But no, we had----
    Senator Cornyn. Mr. Chairman, Mr. Chairman----
    The Chairman. I think he should go----
    Senator Cornyn. This is not a trial.
    The Chairman. I think you should go ahead and answer it 
right now.
    Senator Cornyn. He should have a chance to answer the 
question.
    The Chairman. Yes, it is a legitimate question. You go 
ahead and answer it.
    Mr. Mnuchin. All right. I, like all other hedge funds and 
many, many private equity funds, set up offshore entities that 
are primarily intended to accommodate nonprofits and pensions 
that want to invest through these offshore entities.
    As it relates to my own tax situation, these entities were 
either taxed as U.S. corporations or U.S. partnerships. And in 
no way did I use them whatsoever to avoid any U.S. taxes. They 
were merely as an accommodation to pension funds and nonprofit 
institutions and a small number of foreign investors.
    And as Treasury Secretary, if I am confirmed, I would look 
at these rules and make sure. I think that you did a good job 
in stopping one of the abuses of offshore deferred fees, but I 
would diligently look at these things. And I can assure you I 
paid all my taxes as was required.
    Senator Wyden. We will come back to this question of 
offshore deals, or more commonly called ``blockers.'' Again, I 
am very troubled about this question of how you are going to 
unrig the system if you have a record of taking advantage of 
tax shelters that, in effect, have a 0-percent tax rate.
    Thank you, Mr. Chairman.
    The Chairman. Well, Mr. Mnuchin, as you can see, you are 
going to get questions like this. And what was legal at the 
time is still being criticized.
    But I am sure you have heard of allegations that you 
profited from, quote, ``predatory lending'' during the housing 
crisis. An investor group that you headed reformed IndyMac, a 
failed institution responsible for many low- and no-doc 
mortgage loans, into a viable institution called OneWest, which 
you have described here, which offered loan modifications, 
often above and beyond what other institutions were doing, to 
more than 100,000 borrowers. At least that is the way it looks 
to me.
    Meanwhile, during all of the foreclosure turmoil, Obama 
administration officials set up a national loan modification 
program called HAMP--Home Affordable Modification Program. And 
according to the SIGTARP, many members of Congress from both 
sides of the aisle, and others, HAMP repeatedly fell far short 
of its goals and had significant design flaws.
    In testimony before Congress in 2011, then-SIGTARP--Special 
Inspector General--Neil Barofsky identified that, quote, 
``There have been countless published reports of HAMP 
participants who end up worse off for having engaged in a 
futile effort to obtain the sustainable relief that the program 
promised. Failed trial modifications often leave borrowers with 
more principal outstanding on their loans, less home equity, 
depleted savings, and worse credit scores.''
    Using provocative language that we have heard supporting 
your actions in the foreclosure crisis, I guess you could say 
that then-Treasury Secretary Geithner was a, quote, ``predatory 
loan modifier,'' using that type of logic.
    Now, Mr. Mnuchin, did OneWest have any interplay with the 
Obama administration's HAMP program? And was that program 
always successful in preventing foreclosures on struggling 
American homeowners? Or could more have been done by the 
administration?
    Mr. Mnuchin. Senator, thank you very much for that 
question. And that is a very important issue.
    When we did the IndyMac deal with the FDIC, we committed to 
the FDIC that we would continue the FDIC loan modification 
program. It was after that that the Obama administration came 
up with HAMP. And we had no obligation to do HAMP. We could 
have continued to do FDIC loan modifications, but we felt it 
was the appropriate thing to voluntarily go into the U.S. 
Treasury HAMP program, as did other major banks. So we 
voluntarily went into that program.
    The HAMP loan modification program was a very proscriptive 
program, including us having to follow net-present value 
calculations that were determined by the Treasury models to see 
which was better, either foreclosing on a home or providing a 
loan modification. And to the extent that the net-present value 
was higher on foreclosing, we unfortunately had to follow the 
HAMP rules or we would have been severely penalized if we had 
not proceeded with foreclosures.
    The Chairman. Now, these were not your rules.
    Mr. Mnuchin. No, they were not our rules, Senator. These 
were rules that were driven by the administration under HAMP.
    The Chairman. Which administration?
    Mr. Mnuchin. The Obama administration.
    The Chairman. Oh, I see; okay. Well, let me ask one more 
question. There is a wide agreement that the tax law has become 
much too complicated. When stories of people getting their tax 
liability incorrectly calculated are commonplace, thus inducing 
cynicism about the tax law, and thus creating an ever-greater 
tax gap, or a difference between what is owed versus what is 
actually paid, it is clear that there is a major problem and 
something needs to be done to address the problem. Now, to your 
credit, Mr. Mnuchin, you have talked about your desire to 
simplify the tax code. Thank you. I am glad you are talking 
about that, because I very much agree with you.
    So my question to you, Mr. Mnuchin, is how to address this 
problem. Do you have any suggestions for how to make the 
Internal Revenue Code less complex, or at least keep it from 
getting more complicated? And would you recommend a moratorium 
on either tax legislation or tax regulations? And should the 
tax law simply try to raise revenue for the government and stop 
trying to achieve so many other societal goals?
    Mr. Mnuchin. Yes, Senator, I agree with you completely. And 
one of the things that has been a great honor is to travel with 
the President-elect, and I have been one of the chief 
architects of his economic plans.
    And we believe the most critical issue is creating economic 
growth, and passing tax reform is a major component of that. 
And our tax reform plan--we believe that tax simplification and 
fewer deductions are absolutely critical.
    Now, you mentioned the tax gap, and that is something I 
have been reading about and studying and is something that I am 
actually quite interested in. I was particularly surprised in 
looking at the IRS numbers, that the IRS headcount has gone 
down quite dramatically, almost 30 percent over the last number 
of years. I do not think there is any other government agency 
that has gone down 30 percent, and especially not an agency 
that collects revenues. This is something that I am concerned 
about.
    Now, perhaps the IRS just started with way too many people. 
But I am concerned about the staffing of the IRS. That is an 
important part of fixing the tax gap. And I am also very 
concerned about the lack of first-rate technology at the IRS, 
the issue of making sure that we protect the American public's 
privacy when they give information to the IRS, the 
cybersecurity around that, and also customer service for the 
many hardworking Americans who are paying taxes.
    The Chairman. Senator Grassley, you are next.
    Senator Grassley. Like I told you when we met in my office, 
I do not have any ``gotcha'' questions, or I would let you 
know. So let me go along the line of the first statement I want 
to make. I do not expect you to answer unless you have some 
misunderstanding of our position discussed in my office.
    Pro-growth tax reform will be a top priority for you. I 
agree and look forward to working with you and President-elect 
Trump on that point. As part of any tax reform proposal, it 
will be important that adequate transition rules are included 
to provide a smooth transition for businesses that may be 
unpredictably negatively impacted.
    As we discussed in our meeting, Congress has already 
effectively put in place transition rules for some alternative 
energies, including wind. The Production Tax Credit is 
currently scheduled to phase out over the next few years, 
ending in 2020. Based upon our conversation, I believe that we 
are in agreement that you would support the current phase-out 
as part of any tax reform proposal.
    Question two. I have been a strong proponent of the IRS 
private debt collection program, as has Senator Schumer. In 
2015, Congress updated and made mandatory the IRS private debt 
collection program. This program is designed to chip away at 
the tax gap by requiring the IRS to contract with private debt 
collectors to collect inactive tax debt owed. These are the tax 
debts not being worked by the IRS and, absent this program, 
would likely never be collected, adding up to $187 million in 
2017.
    Out of that $187 million, the Treasury Department has 
provided debt collectors to collect a net of $8 million. This 
certainly is not due to the lack of inactive tax debt available 
for the IRS to assign. According to the Government 
Accountability Office report, the IRS has over $130 billion of 
outstanding debt on its books. So hamstringing this program by 
refusing to release inactive debt for the program ought to be 
considered unacceptable by anybody.
    So can you give me assurances that the Department of 
Treasury under your leadership will work to implement the 
program to the full extent of authorized law and bring in this 
tax money that is not being collected?
    Mr. Mnuchin. Yes, Senator. And first of all, thank you for 
having spent time with me. I appreciated the opportunity to 
speak to you about a lot of important issues.
    And on these issues, I absolutely agree with you that we do 
need to have phase-out rules when we change things. And I 
support the phase-out of that, as you have suggested.
    And then on the IRS, I think that most aspects of taxes 
should be handled by the IRS. But as you have described, to the 
extent we have 100-and-plus billion dollars of receivables that 
are just sitting there, and that we can collect tens of 
millions or hundreds of millions of dollars for the American 
public, particularly in an environment where we are looking for 
money for so many programs, this, to me, I agree with you, 
seems like a very obvious thing to do.
    Senator Grassley. Yes. This will have to be my last 
question. In 2006, I was successful in enacting legislation to 
enhance the IRS whistleblower program. The program has been one 
of the most effective programs in addressing tax evasion, 
leading to the recovery of more than $3.4 billion in taxes that 
would have otherwise been lost to fraud.
    However, there has been resistance within the IRS to the 
whistleblower program. An ongoing concern has been poor 
communication with whistleblowers, who often wait in the dark 
for years with no feedback from the bureaucracy.
    Another concern is that the IRS has chosen to interpret the 
whistleblower law narrowly, to the detriment of whistleblowers 
in several instances. For example, the IRS has interpreted the 
terms ``collected proceeds,'' which is the base for determining 
the amount of an award, to exclude criminal penalties and 
certain other proceeds, such as penalties assessed for 
undisclosed foreign bank accounts.
    Two questions, and I will state them both. Should you be 
confirmed, can I count on you to be supportive of the 
whistleblower program and work to ensure its success? And 
additionally, would you be willing to review the IRS's 
administration of the program, including its very narrow 
interpretation of the words ``collected proceeds''?
    Mr. Mnuchin. Absolutely, Senator, you have my assurance. 
And let me further go on to say that the majority of Americans 
voluntarily file their tax returns honestly. But we are all 
aware that there is tax fraud and there is tax evasion, as you 
have said, and we need to be diligent. And I believe that the 
whistleblower laws are a very important part of that. So I will 
work very hard with you on that. Thank you, Senator.
    Senator Grassley. Thank you very much.
    Thank you, Mr. Chairman.
    The Chairman. Thank you.
    Senator Stabenow?
    Senator Stabenow. Thank you very much, Mr. Chairman.
    And welcome. And congratulations on your nomination, and 
welcome to your beautiful family as well.
    I do want to follow up on information that we just received 
last night that was in addition to your recent financial 
disclosures. I have not had a lot of time to take a look at 
that. We just received it last night.
    But you failed to include your position as a director of a 
Cayman Islands corporation as well as manager, chairman, or 
director of seven additional shell corporations and holding 
companies, nearly $100 million in real estate, as well as a 
number of other things, including $906,000, $556,000 worth of 
artwork held by your children--so a number of things.
    As Treasury Secretary, and as we go into tax reform, would 
you support closing tax loopholes in the U.S. tax code that 
extremely wealthy people use, such as yourself, to avoid paying 
taxes? We have heard about the Cayman Islands for years and the 
buildings that have had thousands of companies that have used 
them as addresses. Would you be willing to close those 
loopholes?
    Mr. Mnuchin. Well, first of all, let me just comment. I 
very much appreciated the opportunity to meet with you. And I 
have traveled to your State many times and have great 
admiration for your State. The President-elect had a very 
significant economic speech in Detroit, and we have been very 
focused on time in your State. So I appreciate everything that 
you have done there.
    Let me just comment on--I realize last night you did get a 
memo on some changes to my Senate questionnaire, so thank you 
for giving me the opportunity to comment on that.
    I think, as you all can appreciate, filling out these 
government forms is quite complicated. There were many things I 
expected in this job, including having to sell everything. But 
the amount of paperwork and filling out the forms, even for me, 
having experience in business, was quite a job.
    In an effort to get the committee information early, we 
submitted a preliminary questionnaire prior to us having the 
278 form finished and prior to signing the agreement with the 
Ethics Office, so let me first say any oversight was 
unintentional.
    You did mention that there was $100 million of real estate. 
I was advised by my lawyer that we did not need to disclose 
that on the questionnaire because it did not need to be 
disclosed on the 278. There was some confusion about the 
complexity.
    We worked tirelessly with the committee staff. And I want 
to thank all the staff. I know they worked very, very long 
hours. As I said, they were extremely thorough, and I 
appreciate their work. We delivered over 5,000 pages. And I can 
assure you, they actually read all those 5,000 pages, because 
when I had the opportunity to meet with the staff, with my 
lawyers and accountants, we answered some very specific 
questions and----
    Senator Stabenow. Excuse me, Mr. Mnuchin, I do not want to 
interrupt, but I have very limited time. And actually, I 
appreciate the additional information and the clarification and 
all that.
    Mr. Mnuchin. Yes.
    Senator Stabenow. But my question goes to what you were 
actually disclosing and particularly the Cayman Islands. I 
mean, did you use the Cayman Island corporation to avoid paying 
taxes? Would you support closing tax loopholes that very 
wealthy people have consistently used in the Cayman Islands to 
avoid paying taxes? That really is my question.
    Mr. Mnuchin. Well, let me just be clear. Again, I did not 
use a Cayman Island entity in any way to avoid taxes for 
myself. I paid U.S. taxes on all that income, okay? So there 
was no benefit to me from the Cayman entity.
    As I said, the Cayman entity was set up to accommodate 
nonprofit and pension funds that wanted to invest through 
offshore and a certain number of offshores.
    Senator Stabenow. So you have helped others avoid paying 
taxes.
    Mr. Mnuchin. Again, I am not going to make a comment. 
Again, they did not avoid--they followed the law. Because I 
have experience as a hedge fund manager, I am committed to tax 
simplification. I think it makes no sense that we would 
encourage hedge fund managers to set up entities in the Cayman 
Islands or Anguilla or anywhere else where, as you have pointed 
out, I did not have any physical people.
    This is not like--there are people who set up offshore 
businesses and put all their people offshore, and you have 
heard of inversions. And those types of things, you know, are 
perfectly legal and hurt the American workers.
    In the hedge fund world, these are all just set up to make 
the accountants rich. And I would like to work with the IRS to 
close these tax issues that make no sense and make sure that we 
are collecting the proper amount of taxes.
    Senator Stabenow. So you would support closing those 
loopholes?
    Mr. Mnuchin. I would support changing the tax laws to make 
sure that they are simpler and more effective, yes.
    Senator Stabenow. Thank you.
    The Chairman. Senator Crapo?
    Senator Crapo. Thank you very much, Senator Hatch.
    And, Mr. Mnuchin, I appreciate your being here, your 
willingness to go through this and to serve the American 
people. We truly need the kind of vision that President Trump 
has enunciated for the country and that you have committed to 
help work with him to achieve for the country.
    As a part of that, one of the things that you have already 
mentioned today, and I am paraphrasing you here, but I believe 
you said, in essence, that we have a regulatory excess in the 
United States in many circumstances that can and is inhibiting 
lending and inhibiting capital formation, two very important 
things that I think are critical to a pro-growth economy.
    Could you elaborate on that?
    Mr. Mnuchin. Sure. Well, let me first say that I absolutely 
believe in proper regulation. And before I had the opportunity 
to put in a bid for IndyMac Bank, I had to be issued a charter. 
And I worked very closely with what was the Office of Thrift 
Supervision at the time. And by the way, I was a big fan of you 
merging the OTS with the Office of the Comptroller of the 
Currency and getting rid of another regulatory agency.
    But at the time, I worked with the OTS and the Fed. And the 
regulators explained to me at the time, and I told them that I 
understood the responsibility of being given a banking charter. 
I took that very, very seriously.
    I must say that I enjoyed working with very, very smart 
regulators. And I have tremendous respect for them.
    As a matter of fact, one of the few nice things that The 
Wall Street Journal actually wrote about me was, they made a 
comment that I told everybody we had to treat the regulators 
like our best client, which I believe. The regulators and the 
relationships with them and following the regulations, nothing 
was more important, given the trust they had put in us.
    Having said that, I witnessed firsthand multiple 
regulators: the OCC, the FDIC, the Consumer Financial 
Protection Bureau, the Federal Reserve. In certain cases, there 
was overlapping regulation.
    My biggest concern--and I fully support regulation for 
banks with FDIC insurance--but my biggest concern is that this 
regulation is killing community banks. We are losing the 
community banking business; we are losing the ability for small 
and medium-sized banks to make good loans to small and medium-
sized businesses in the community where they understand those 
credit risks better than anybody else. And I think we all 
appreciate that the engine of growth is with small and medium-
sized businesses.
    And in my role at the Finacial Stability Oversight Council 
and working with the different regulators, I would make sure 
that we did what we could to have proper regulation, but 
eliminate overlap as well as make sure that the banks are 
lending to small and 
medium-sized businesses so we do not end up with a world where 
we only have four big banks in this country.
    Senator Crapo. Well, thank you, and you actually led right 
into my next question. Because in a very closely related 
matter, as you know, as the Secretary of Treasury you will have 
a very important role as the Chairperson of FSOC. And in my 
view, FSOC has focused very heavily on some of its statutory 
mandates while ignoring others.
    One of the statutory mandates that the Dodd-Frank Act 
requires FSOC to do is to, and this is the statutory language, 
``advise Congress and make recommendation in such areas that 
will enhance the integrity, efficiency, competitiveness, and 
stability of U.S. financial markets.''
    To date, frankly, I am not aware of FSOC fulfilling that 
role. We do not get a lot of advice from FSOC. We get a lot of 
directive in the country.
    Will you pledge, as the Chairperson of FSOC, that you will 
ensure that the Council considers ways to make the U.S. 
financial markets more efficient, and then advise and work with 
Congress to achieve those outcomes?
    Mr. Mnuchin. I absolutely will, Senator. And let me just 
comment on, for instance, the Volcker Rule as an example. And I 
do support the Volcker Rule. I think the concept of proprietary 
trading does not belong in banks with FDIC insurance.
    But the Federal Reserve just put out its own report that 
the Volcker Rule has completely limited liquidity in many 
markets. And the Federal Reserve is concerned that the 
interpretation of the Volcker Rule does not allow banks to 
create enough liquidity for customers. So that is something I 
would absolutely want to look at.
    And, Senator Wyden, by the way, I wanted to thank you, for 
I am now in great esteem of having the Mnuchin Rule with both 
the Buffett Rule and the Volcker Rule. I take that as a great 
compliment, so thank you for putting me in with these other 
great people.
    The Chairman. Senator Nelson?
    Senator Nelson. Good morning. I enjoyed our visit 
yesterday.
    Were you a director of Dune Capital International Limited, 
a Cayman Islands corporation?
    Mr. Mnuchin. I was. That is correct.
    Senator Nelson. Did you move a hedge fund, Dune Capital 
Partners, LLC to Anguilla?
    Mr. Mnuchin. So, Senator, first let me just comment. When 
we talk about moving, okay, you know, it is not as if I had 50 
people sitting in offices, as we have talked about, and moving 
them.
    Senator Nelson. Right. I understand it. What was----
    Mr. Mnuchin. I do want to comment. And yes, so Dune 
Capital, LLC, which was our master fund--and not to get into 
the nuances of this, but when one runs an onshore fund and an 
offshore fund, there are certain efficiencies of keeping the 
assets in what is called a master fund.
    And because we set up the master fund in Anguilla, I was 
required to change Dune Capital Partners to become a foreign 
entity. So that was the reason for it.
    But let me just comment----
    Senator Nelson. Right. No, I am running out of time. I have 
to get to the question.
    Mr. Mnuchin. Right. Sorry.
    Senator Nelson. The question is--both of those were, for a 
tax consequence, located in the Caymans as well as Anguilla. 
And so the question is--you said you support tax reform--do you 
support closing those kind of tax-avoidance provisions, the 
Anguilla- and the Cayman Islands-type tax avoidance in the tax 
code?
    Mr. Mnuchin. So let me just comment that when I did move 
it, I had to apply to the IRS. And the IRS approved it as a 
foreign entity eligible to be taxed as a U.S. partnership. So 
from my standpoint, it made no difference to me whether it was 
located in Delaware----
    Senator Nelson. That is not my question.
    Mr. Mnuchin. I am giving you a slightly longer answer. I 
apologize; it is a complicated issue.
    Senator Nelson. Can you just answer the question?
    Mr. Mnuchin. The short answer is ``yes,'' as I have said 
before. I think that I would work with the IRS and with 
Congress, okay, as I have said. It makes no sense that we have 
all these requirements to set up these offshore entities, 
which, again, did not benefit me, but did benefit certain 
nonprofits and pensions. And we should address the issues for 
nonprofits and pensions and understand why they need to invest 
through these offshore funds.
    Now, I would not want to do anything that is detrimental to 
the pension holders or these nonprofits, but I would commit to 
work with your office, Senator, and make sure that we fix the 
system.
    Senator Nelson. All right. We talked about IndyMac Bank 
yesterday and becoming OneWest. And you said you bought, when 
you acquired IndyMac Bank, the portfolio of reverse mortgages. 
And to your credit, you said that once it became OneWest that 
you did not sell anymore reverse mortgages.
    And yet, you, as the CEO--I want you to comment on the fact 
that, of the reverse mortgages that you acquired from IndyMac 
Bank, some of the folks were not treated very well.
    I mentioned to you yesterday that a 90-year-old Lakeland 
woman was foreclosed on because of a 27-cent payment error. I 
did not mention two others: foreclosing on an 80-year-old 
Orange Park, FL woman whom your bank claimed did not live in 
the home when, in fact, she did and she happened to have the 
foreclosure papers served on her in the home that the bank said 
she did not live in. Another example: a married couple in their 
50s trying to make the best of everything, they asked for a 
loan modification from OneWest Bank, which they were eligible 
for, and instead they were foreclosed on.
    Explain to the committee, if you would--and I think you are 
an earnest, well-intentioned person, but you are sitting there 
as a CEO and this stuff is happening that is very unfair to 
little people. Why?
    Mr. Mnuchin. First of all, Senator, again, thank you for 
taking the opportunity to meet with me. I appreciated that and 
the time to speak about these important issues.
    Let me first say, to the extent that we made any errors or 
we ever foreclosed on anybody, I completely understand the 
hardship that that created. As I mentioned, we did go through 
an independent foreclosure review. And unfortunately, there 
were some issues--very, very low rates relative to everybody 
else--but there were some issues. And we paid money to those 
people to make them whole. And I earnestly feel terrible for 
any mistakes at the bank.
    Let me comment also that once a week I chaired an internal 
committee that dealt with customer complaints. So for any 
complaint that went to our regulators, that went to a Senator, 
went to a member of the House--came through those--we had a 
special group of people that reviewed every single one of those 
complaints, responded to all of your offices and responded 
directly to the borrower.
    We also routinely had the OCC come in and monitor and test 
us and go through all those complaints. It was a very, very big 
concern because, as you can imagine, from both the FDIC and the 
OCC, when we took over IndyMac, the amount of complaints spiked 
dramatically.
    As I shared with you, the reverse mortgage business was not 
something we wanted to buy, but we agreed to buy that as part 
of an overall solution. What we were really trying to do is 
create a regional bank, and that business really had no part of 
it.
    There were about $1.5 billion of reverse mortgages that the 
bank owned. There were over $20 billion of reverse mortgages 
that we did not own, that we serviced for third parties. And 
the majority of all those third parties were HUD-guaranteed 
mortgages.
    And as I have pointed out, I think there are some very 
significant issues with the HUD program. One, as I have 
mentioned, is a problem with taxes and insurance, that if there 
is a shortage on taxes and insurance because somebody outlives 
their expectancy, that HUD forced us to foreclose.
    There is another problem called a non-borrower spouse, 
where if the spouse was not on the mortgage at the time, that 
you would have to foreclose on the spouse. We discussed these 
issues with HUD.
    If I am confirmed, I would look forward to discussing these 
with Dr. Carson and hope that HUD would seriously consider 
looking at these things. Although it is not under my 
responsibilities, I would share my concerns.
    These are government-guaranteed programs where we are 
foreclosing on senior citizens. And I can assure you, nothing 
was more painful to me in the whole process. And I will tell 
you, I cannot talk about specific loans because of privacy, but 
there are certain things that were in the press.
    And the most troubling loan we had was actually to the 
``Octomom,'' and we worked very, very hard. That was a terrible 
situation. And we worked very, very hard to move her to another 
home that they could afford.
    But I can assure you that, as chairman of the bank, I took 
these issues very seriously. It is not to say that we did not 
have certain mistakes. There were mistakes; we regret those 
mistakes. As I mentioned, we had hundreds of thousands of 
delinquent loans.
    And just as an aside, when you talk about loan 
modifications, banks are highly incented to do loan 
modifications. Anybody who thinks that we made more money 
foreclosing on a loan than modifying a loan has no 
understanding of this. We were highly incented. Foreclosing on 
people is a very, very terrible thing to do, but it is also 
very costly to the bank. So we believe in loan modifications, 
and we were financially incented to offer them when we could. 
So thank you, Senator.
    The Chairman. Thank you. Senator Menendez?
    Senator Nelson. Mr. Chairman, I look forward to a second 
round.
    The Chairman. Senator Menendez?
    Senator Menendez. Thank you, Mr. Chairman.
    And, Mr. Mnuchin, congratulations on your nomination.
    I have a different line of questioning. But I have to be 
honest with you, the information that came to us this morning 
makes me concerned. You have addressed some of it, but not all 
of it.
    On December 19th of last year, you signed a notarized 
affidavit on your questionnaire to the Finance Committee 
certifying that it was true, accurate, and complete.
    Question 11 of this questionnaire asks nominees to, quote, 
``list all''--all--``positions held as an officer, director, 
trustee, partner, proprietor, agent, representative, or 
consultant of any corporation, company, firm, partnership, 
other business enterprise, or educational or other 
institution.'' That seems to be pretty pervasive. So it is 
almost like an open-book test. And yet, you did not answer in 
that questionnaire listing your position as director of a 
Cayman Islands corporation, as manager, chairman, and director 
of eight additional shell corporations and holding companies, 
and nearly $100 million in real estate. And that questionnaire 
was corrected only after the committee staff, having done their 
due diligence, brought the missing information to your 
attention.
    Now after that, you admitted to being the director of the 
offshore entity Dune Capital International Limited, a Cayman 
Island corporation. You admitted to moving your hedge fund Dune 
Capital Partners, LLC offshore to Anguilla in 2005, even though 
all the business was conducted in New York City.
    So, you know, I have a ton of other questions on policy, 
but first and foremost is truth and veracity, what Americans 
need in their Treasury Secretary--to know that they are going 
to be asked to do difficult things or challenging things and 
that they understand that there is a system.
    In essence, is it not true that what you did here is take 
these companies and put them offshore so you could help your 
clients, whom you were making money from, avoid U.S. taxation?
    Mr. Mnuchin. No, that is not true at all. That is not true, 
Senator.
    Senator Menendez. Then why would you--you just described 
that the purposes of creating these offshore entities were to 
help pensions and other entities. And the only reason to go 
offshore, as Senator Grassley said when he was, I think, the 
chairman of the committee, is that the difference between 
investing in the United States or the Cayman Islands is the 
possibility of avoiding U.S. taxes.
    Your clients--you have made it very clear that you have 
paid your taxes. Okay, I will accept your word on that. But the 
people or the entities that you were helping and that you were 
making money from, you were helping them avoid U.S. taxes. 
Otherwise, they could have invested here.
    Mr. Mnuchin. Senator, let me first answer the first part of 
your question, which I will tell you--and I have said this 
before, and I will repeat it again--I assure you that these 
forms are very complicated. I do not have the form in front of 
me, but I believe it said ``to the best of my knowledge, this 
is true.'' And when I certified those forms, I thought it was 
correct.
    Perhaps it was a mistake in giving the committee 
information early, and I should have waited until I had 
finished with the 278 and the Ethics Office.
    It was not just a function of your office. We were in the 
process of correcting things. But----
    Senator Menendez. But it does not take a rocket scientist 
to understand the word ``list all positions''--all positions.
    Mr. Mnuchin. Senator, in all due respect, I had a lot of 
complicated entities. You are referring to the fact that I did 
not list myself as the director; I listed the entity. So the 
fact that I did not list that I was a director was not intended 
to hide anything.
    And as I have mentioned, in regards to my $100 million of 
real estate, my lawyer, who is quite sophisticated in this 
stuff and actually has done this for many, many nominees 
before, believed that we filled out the form correctly and 
that----
    Senator Menendez. Well, let us get to the heart of my 
question. The heart of my question is, did you not create these 
offshore entities, that most Americans cannot create or take 
advantage of, in order to help your clients, whom you were 
making money from, avoid U.S. taxes?
    Mr. Mnuchin. No, not necessarily. Okay? So first of all, I 
want to say that it is important that the committee and the 
American public understand----
    Senator Menendez. What were you doing it for then?
    Mr. Mnuchin [continuing]. That this was done so that 
different entities could invest. So sometimes it had nothing to 
do with taxes, it had to do with what they could invest in and 
what they could not invest in.
    And as I have said to you, if you want to put me on for the 
entire hedge fund and pension fund, we should have an IRS 
session to go through these issues, and I would be more than 
happy to work with you and your offices to go through it. These 
are very complicated issues.
    Senator Menendez. Well, I appreciate that, but let me----
    Mr. Mnuchin. We need tax simplification.
    Senator Menendez [continuing]. Make the complication 
simple. One does not go and create offshore entities, at the 
end of the day, other than to avoid, in some form or fashion, 
the tax laws of the United States. That is pretty simple. And 
so that may even be legal, in which case we should definitely 
close that loophole, but you have to question whether or not 
that is the essence of what we want as leadership.
    And so I would like to hear you be more determinative of 
saying, yes, we are going to close all of those down if I can 
convince the President-elect and Congress to do so, because 
what you did may have been legal, but it certainly was to help 
people and entities avoid U.S. taxes.
    Mr. Mnuchin. Well, first of all, I am absolutely committed 
to work with you and your office, as I have said, on tax 
simplification and to cut down and make sure that we do not let 
anybody avoid taxes.
    In certain cases, this was not a function of avoiding 
taxes, it was to create eligible investments for certain 
nonprofits.
    But I agree with you completely. I am onboard with what you 
have said. I would be happy to work with your office to 
simplify the tax code and cut down----
    Senator Menendez. Whose investments were ultimately 
eligible, therefore, to avoid some taxes?
    Mr. Mnuchin. Again, it may have been an eligibility issue 
and not a tax issue. But I agree with you that this does not 
make sense. And I will work with you and your office--I have 
committed to do that--to make sure that we know why people need 
to move entities from Anguilla to everywhere else. And again, 
we are not creating jobs there; this is just where these 
entities are housed.
    I agree with you. And you know, it will create a lot less 
work for the tax accountants and the lawyers and make the 
American public more money and move our IRS resources 
elsewhere. So I agree with you completely, Senator. Thank you.
    The Chairman. Your time is up, Senator.
    Let me just say, it is ironic and, I think, a bit 
hypocritical of my friends on the other side of the aisle to 
suddenly have found religion on offshore account holdings. 
Evidently, memories are short. At least two of President 
Obama's nominees, who now serve in his Cabinet, had Cayman 
Islands holdings. Now, that includes the current Treasury 
Secretary, who also ran a business unit at CitiGroup, a bailed 
out megabank from which he received close to a million dollars 
in bonuses. That unit has been sanctioned by the SEC for 
selling toxic assets that, quote, ``harmed investors.''
    Now, with regard to the nominee's disclosures to the 
committee, I want to say this. As part of the committee's 
bipartisan vetting process, Mr. Mnuchin in good faith submitted 
answers to committee questionnaires and other materials that 
were later modified. Mr. Mnuchin's file is now complete. And to 
meet demands of some of my Democratic colleagues, the 
disclosures now include financial information that is usually 
kept confidential, such as the value of personal residences.
    The committee appreciates Mr. Mnuchin's efforts to work 
through the multiple and complicated requests for information 
on what is, by any reasonable measure, an exhaustive vetting 
process. But I think it is--let us be fair here.
    Senator Wyden. Mr. Chairman, just so we are clear: the 
bipartisan staff called out these offshore investments of both 
Democrats and Republicans, to Secretary Lew and others. So I 
want that understood. And that is the reason that people even 
knew that Mr. Mnuchin had not filled out these forms properly. 
We did it because the American people deserve to know about Mr. 
Mnuchin's offshore investments, even though they had not been 
originally disclosed and disclosed fully.
    But our track record has been bipartisan, and we have 
called out both Democrats and Republicans, as I mentioned.
    The Chairman. I think so, and that is the purpose of it. 
But let us be fair about it too.
    Senator Enzi?
    Senator Enzi. Thank you, Mr. Chairman.
    And thank you, Mr. Mnuchin, for being willing to serve and 
to go through this process. I want to thank you for meeting 
with me in my office and going through many of the accounting 
functions and initiatives that you will be managing. I do not 
ask those types of questions in these kinds of meetings, 
because I have noticed that it puts the audience to sleep. But 
they are very important, and I was really impressed with your 
answers.
    I am impressed with your private-sector experience. I have 
always said that every business looks really simple unless you 
are the one who has to make the decisions on it and you see how 
far ahead you have to make the decisions on how you find 
employees and how you train employees and how you meet all of 
the Federal regulations.
    Well, you have actually worked with those rules. You have 
actually been forced to learn some things that are going to be 
essential to your job. And it is a pretty unique situation.
    This is the biggest business in the world, and we do not 
even make decisions in a timely manner. We are still working on 
the last October 1st spending bills. There are a lot of things 
around here that have to change, and some of them you are going 
to be in a position to do.
    And I have been really impressed with the knowledge that 
you have already shown this committee on different things that 
most of us have never had any experience with. Very impressive.
    Now, I will cover a couple of specific things here, because 
I think the Internal Revenue Service has often strayed from its 
core function of responsible and efficient revenue collection. 
I hope the new Trump administration will make sure that the 
Internal Revenue Service stays on track with this purpose, 
while also improving the recent record on how it communicates 
with taxpayers and practitioners. People have not been able to 
get answers.
    But something that has been more disturbing to me, to 
illustrate, is that in recent years the IRS has inserted flyers 
with the tax refund checks, and those flyers--one of them was 
produced by the Consumer Financial Protection Bureau, which is 
outside of our oversight, and solicited answers from the 
taxpayers about their money.
    It is not appropriate for the CFPB, an independent 
organization, or any other organization to solicit information 
from taxpayers, nor is it appropriate for the IRS to help 
facilitate this.
    As the Treasury Secretary, would you stop this type of 
activity? Do you believe that is in the role of the IRS?
    Mr. Mnuchin. Senator, thank you. And again, thank you for 
taking the time to meet with me, and thank you for your 
longstanding service to our country.
    And yes, I absolutely would work with you on that. I do not 
think it makes sense that the IRS is doing that. I would want 
to understand what the reason is, but it seems to make no sense 
to me.
    And you know, as I have said to you, I think one of the big 
issues around the IRS is technology. And I would use my 
expertise in technology to make sure that we bring the IRS up 
to date. And that is a function of, I understand, old email 
systems, old privacy systems. We absolutely need to make sure--
--
    And in this world of cybersecurity being such a big issue, 
we need to protect American taxpayers' information. And there 
should be simple ways that the IRS can interact with the 
American taxpayers. If you can get good service in the retail 
online business, there is no reason why we cannot use that same 
type of technology for taxpayers to communicate and get their 
information securely with the IRS.
    So I look forward to working with you and your office on 
that.
    Senator Enzi. Thank you.
    The Chairman. Senator, if I could just interject.
    You mean you are going to help us modernize the IRS?
    Mr. Mnuchin. It would be one of my great priorities, 
absolutely, Mr. Chairman.
    The Chairman. My gosh. Well, that would be a wonderful 
thing.
    Mr. Mnuchin. I hope that, at least, is a bipartisan issue 
that we can all agree on.
    Senator Enzi. Since the chairman used part of my time, I 
would like to ask this question here. In 2012, I introduced the 
United States Job Creation and International Tax Reform Act 
that would help fix our tax code and promote U.S. economic and 
job growth. And that bill would help to right the ship by 
pulling our international tax rules into the 21st century and 
making them more certain so that U.S. companies are not at a 
competitive disadvantage with foreign companies.
    It would give American companies incentives to create jobs 
in the United States and undertake activities here at home so 
that they can win globally. It would encourage U.S. companies 
to develop products and keep rights to their ideas and 
inventions in the United States rather than ship them offshore.
    Do you agree that our current international tax system is 
outdated and places U.S. companies at a competitive 
disadvantage with their foreign counterparts, and would you 
work with me on international tax reform?
    Mr. Mnuchin. I could not agree with you more. I think the 
fact that we have companies like Apple that have hundreds of 
billions of dollars offshore because of the differential in tax 
rates and that they are being penalized to bring back money----
    One of the things I think we all agree on--and I have 
talked to the President-elect, and he believes we can bring 
trillions of dollars back onshore so that that money is 
invested in American businesses and creates jobs.
    And I absolutely look forward to working with you and your 
office on tax reform, bringing down business rates for big 
businesses and small businesses and making American business 
the most competitive in the world so that we are not shipping 
jobs overseas and money overseas.
    Senator Enzi. Thank you. And I have some questions about 
the debt and how we are going to handle that. And, as Budget 
chairman, I am interested in that. But again, it gets into 
those number minutiae, so I will submit those.
    Thank you, Mr. Chairman.
    The Chairman. Thank you.
    Senator Carper?
    Senator Carper. Thanks.
    Welcome, Mr. Mnuchin.
    Mr. Mnuchin. Thank you.
    Senator Carper. I am a Senator from Delaware, a recovering 
Governor from Delaware. In a lot of my time as Governor, and 
even now, I have thought a lot about, how do we create a 
nurturing environment for job creation and job preservation? I 
want to talk about that in just a moment.
    But before I do, some of my colleagues have raised, I think 
appropriately, tax havens. The Cayman Islands has been 
mentioned, Anguilla has been mentioned.
    You have mentioned the IRS. And I just want to say, in the 
past years, several times in the past couple of years, John 
Koskinen has sat right where you sit, the Commissioner of the 
IRS. It is a position that he has been selected to serve; it is 
a 5-year term. I think he has maybe another year to go on it.
    He is in his 70s. He took this job not because it was 
something he aspired to do, but because he was asked to do this 
for his country. He is one of the finest public servants I 
know. He is often berated. There was an attempt to impeach him 
in the House of Representatives, which I thought was lunacy.
    And he has said to us many times, as has the Government 
Accountability Office--and you have said it here today--we give 
the IRS less money than they need, they do not have the people 
they need, they do not have the technology they need. For every 
dollar we invest in the IRS, we get at least $4 back. I have 
seen some estimates as high as $10.
    This is not so much a message for you. I think you get it. 
But the message is really for us. If we are interested in 
raising some revenues and not having to raise taxes, that is a 
good place to start. And I was encouraged by what you had to 
say.
    Mr. Mnuchin. Thank you.
    Senator Carper. CFPB, just really quickly, 30 seconds. Your 
take on the CFPB. How are they doing? Worth keeping?
    Mr. Mnuchin. Well, first of all----
    Senator Carper. Just really quickly.
    Mr. Mnuchin. Okay. It is a complicated issue. But yes, 
okay. The biggest issue I have with the CFPB is that I do not 
believe they should be funded out of profits from the Federal 
Reserve. I think they should be funded out of an appropriation 
process.
    Senator Carper. Okay, that is good. Thanks very much.
    When I think of that nurturing environment I mentioned 
earlier for job creation and job preservation, there are a lot 
of components to it. Among them are actually funding research, 
actually making sure that we are doing a good job protecting 
intellectual property, a sensible tax code, common-sense 
regulation, affordable health care, finding ways to get better 
results maybe for a little bit less money.
    We have had people who have suggested to us that one of the 
components that can actually grow GDP is substantial 
investments in infrastructure. I have suggested for a number of 
years that we use an approach we have taken for years, and that 
is the people, the businesses that use our transportation 
system would actually pay for them. We have done that for a 
half-century. I think that makes sense.
    There are other ideas as well, vehicle miles traveled, 
where sort of--you figure out how many miles a vehicle is 
traveling and assess a fee. There are different approaches to 
that. But there is some interest in the incoming administration 
in infrastructure investment. And there is another time to talk 
about that.
    One of the ways to grow GDP or grow jobs is to export, do a 
better job of exporting our products and get into other 
markets. The Trans-Pacific Trade Partnership, TPP, proposed to 
take down a lot of barriers overseas and enable us to have 
better access to those markets. And also at the same time, a 
renegotiated NAFTA, as you may know, that seemed to me like a 
pretty good deal. And I understand that there is an interest in 
the administration renegotiating NAFTA. We did that in TPP, but 
your thoughts on trade policy, especially the Trans-Pacific 
Trade Partnership?
    Mr. Mnuchin. Well, first of all, thank you. You have raised 
a bunch of very, very important issues.
    Senator Carper. I am just going to ask you to go into that 
one issue, if you would, please. And it is not a trick 
question.
    Mr. Mnuchin. I wrote down five of them I wanted to comment 
on.
    Senator Carper. Yes, we just do not have time. Just on 
trade agreements.
    Mr. Mnuchin. So on the trade agreements, I think, as you 
know, the President-elect is very much interested in free and 
fair trade. And as you have commented on, this is not about 
limiting imports, this is about growing exports----
    Senator Carper. There you go.
    Mr. Mnuchin [continuing]. As much as we can.
    You have also commented on intellectual property. I think 
one of the biggest problems in certain of our trade agreements 
is that our American intellectual property is not being kept 
and is being taken in foreign countries.
    You have mentioned NAFTA. The President-elect is very much 
interested in renegotiating NAFTA so that we can keep more jobs 
here. I think, as you know, he has picked up the phone and 
called many CEOs. I cannot remember the last time a President 
or a President-elect did that and worked for the American 
workers.
    And I look forward to working with you and your office. You 
have raised some very, very important issues.
    Senator Carper. Okay, thank you.
    Mr. Mnuchin. And infrastructure, again, at the appropriate 
time, I am happy to comment on infrastructure----
    Senator Carper. Thank you.
    Mr. Mnuchin [continuing]. Because that is very important to 
the President-elect.
    Senator Carper. One last quick one: comprehensive 
immigration reform. One of the things we have learned is, not 
only can we grow GDP by infrastructure investments, smart 
infrastructure investments, and some of the other things that I 
mentioned, but also by comprehensive immigration reform.
    We were strongly urged by the business community for years 
to do it. Any take on that?
    Mr. Mnuchin. Again, I think you know immigration, 
immigration reform, is very important to the President-elect. 
It is not completely in my lane, but I have been with him, so I 
understand his views on that.
    And I think he looks forward to working with the House and 
Senate on a very important issue there.
    Senator Carper. Well, if you do not share his views on 
comprehensive immigration reform, I would just ask that you 
mentor him a bit. Thank you.
    The Chairman. Senator Cardin?
    Senator Cardin. Mr. Mnuchin, first of all, thank you very 
much for being willing to serve your country. I appreciate it 
very much.
    I want to just follow up quickly on Senator Carper's point 
on the IRS. You do have allies on both sides of the aisle who 
will help you. There are good, professional people who work 
there under very difficult circumstances. There are not enough 
people there. So I hope you will be effective with President-
elect Trump, because I understand he is calling for a freeze. I 
am not sure how that coincides with your desire to make sure 
you have adequate personnel at IRS, but I assume that you will 
have an opportunity to talk to the President and hopefully get 
the number of people you need, because they cannot do the job 
with their current workforce.
    Mr. Mnuchin. I can assure you that the President-elect 
understands the concept of where we add people and where we 
make money.
    Senator Cardin. Good.
    Mr. Mnuchin. He will get that completely. That is a very 
quick conversation with Donald Trump.
    Senator Cardin. Great. I want to follow up on Senator 
Wyden's point on a couple of issues. First, I have another role 
in the Senate. I am the ranking Democrat on the Senate Foreign 
Relations Committee, so I want to deal with sanctions for one 
moment.
    I heard you in regards to enforcing the sanctions, 
particularly those that are aimed at dealing with those who 
sponsor terrorism. We also have sanctions against countries 
that are violating international norms on democratic 
principles. Russia is top on that list.
    And I am going to ask you questions for the record as to 
your views on the current sanctions and strengthening the 
sanctions. We have bipartisan legislation to strengthen the 
sanctions, particularly with respect to Russia's attack against 
America's democratic election institutions.
    But I want to make sure I understand. You are committed to 
enforcing the sanctions against Russia?
    Mr. Mnuchin. A hundred percent so, and I think the 
President-elect has made it very clear that he would only 
change those sanctions if he got, quote, ``a better deal'' and 
we got something in return, whether it was on nuclear arms or 
other areas.
    But yes, Senator, I have talked about this in----
    Senator Cardin. And in response to the question that was 
asked about using the IRS, to make sure it is not used for 
partisan reasons, you will enforce these sanctions without 
regard to a person's party affiliation or office?
    Mr. Mnuchin. Of course. I think terrorism--and supporting 
terrorism and supporting illegal activities--is the most 
important issue, and I hope that is a bipartisan issue. And 
where there are sanctions, I assure you, I will use them to the 
maximum amount allowable by law.
    Senator Cardin. And I appreciate that answer. Senator 
Warren and I are going to be sending you a letter, if you are 
confirmed, to investigate the allegations that Mr. Scaramucci, 
who was recently named as the White House Director of 
Engagement and Intergovernmental Affairs and a senior adviser 
to the President, may very well have violated the sanctions 
against Russia in his dealings. And I expect that you would 
investigate this issue to see whether there was a violation of 
the sanctions law.
    Mr. Mnuchin. Of course, anything that you send to me, I 
will either investigate myself or make sure that my staff 
properly investigates. I would do that a hundred percent.
    Senator Cardin. I thank you for that. I want to follow up 
on a second point of Senator Wyden's, which really has me 
concerned. And that is, you pointed out that you would treat, 
in your international role, an American company that is dealing 
in the foreign markets equally, even if it is a Trump 
enterprise entity.
    You are taking an oath to defend the Constitution of the 
United States. In the Constitution of the United States, there 
is the Emoluments Clause. And you have to make sure that if you 
are dealing with a Trump entity, that it is not getting a favor 
in exchange for trying to influence the President of the United 
States or the Trump administration.
    So how do you go about knowing that there are no special 
breaks being given to a Trump enterprise if you do not have 
full access to that type of information?
    Mr. Mnuchin. Well, Senator, let me first say, and I think 
we all acknowledge this, whichever side we are on, that we are 
in a unique situation where we have a President who has the 
vast amount of money that he does and all these issues.
    Senator Cardin. We know that. But of course, he is not 
doing what every other President has done, every other 
President, which is to set up a blind trust and divest. What 
you are doing, if you are confirmed, is divesting. That is what 
is required. He is not doing that.
    So my question to you is, how do you, if confirmed, deal 
with compliance with the Constitution to make sure that a Trump 
enterprise is not getting special treatment which would violate 
our Constitution?
    Mr. Mnuchin. Well, Senator, let me first say--and I think 
this is a very important issue for the American public, so I 
can understand why you are asking it--but let me first say I 
know that the President-elect is absolutely following the law 
and is committed to following the law and has set out a series 
of, although it is not a blind trust, he has removed himself 
from his business. He has put his sons in charge of his 
business. He is committed that there will be no communication.
    Senator Cardin. But is he still----
    Mr. Mnuchin. Excuse me, one second. He has put--he is going 
to hire an ethics officer. And I can assure you that in my job 
of Treasury Secretary, whatever responsibilities I have to 
monitor these issues, which are very important, I can assure 
you that I will do.
    Senator Cardin. But what you did not answer is--and we will 
follow up with some additional questions for the record--how do 
you determine, to make sure, there is not a break given to a 
Trump enterprise, which would violate our Constitution? I 
understand he has to comply with the law, but the Constitution 
is the supreme law of the land.
    Mr. Mnuchin. Well, as you know, I have employed lots of 
lawyers, but I am not a lawyer. But the good news is, we have a 
big group of lawyers in the Treasury Department and a big 
ethics group, and I can assure you that we will make sure that 
we absolutely follow the law and the Constitution.
    And I have every reason to believe that the President-elect 
absolutely wants to adhere to it and will do so.
    Senator Cardin. Thank you.
    The Chairman. Senator Brown?
    Senator Brown. Thank you, Mr. Chairman.
    And, Mr. Mnuchin, thank you. And thank you for the 
conversation in my office about taxes----
    Mr. Mnuchin. Thank you for meeting with me. I appreciate 
it.
    Senator Brown [continuing]. In China and banking issues. 
And I will start with this. Let us clear up one thing. Banks 
are not, in your words, ``highly incented'' to do modifications 
for their borrowers. That is why we had a systemic breakdown. 
It is why so many families lost their homes, and banks were 
forced to pay billions of dollars in fines and remediation.
    So put that aside; I do not want to talk about your 
situation. I understand your defensiveness, both in individual 
meetings, mine and others', and in this committee, about what 
happened at OneWest. But let me lay this out.
    In 2006, businessman Donald Trump responded to a question 
about the possibility of a real estate crash by saying, quote, 
``I sort of hope that happens, because then people like me 
would go in and buy.''
    Now, you did not just buy properties, you bought the bank; 
you bought the ability to help families stay in their homes. 
That is not what you did, so my questions are these. You have 
been saying that OneWest--let us assess, look at the record, I 
really want ``yes'' or ``no'' answers because I have a lot of 
questions. And what I will say is factual in my view; I would 
like you to confirm with ``yes'' or ``no.''
    Is it true that community groups say that OneWest, 
specifically the California Reinvestment Coalition, foreclosed 
on 60,000 families nationwide and denied three-fourths of 
mortgage modification applications?
    Mr. Mnuchin. I am not aware of that. I know they have 
objected to----
    Senator Brown. Well, they did. They did. Okay, is it true 
that----
    Mr. Mnuchin. Well, if you know they did, then why are you 
asking me that?
    Senator Brown. Well, because I want to hear it from you. If 
you do not know it, that tells me something too.
    Mr. Mnuchin. Well, I do not have it in front of me.
    Senator Brown. I am going to keep interrupting because we 
do not have a lot of time. I apologize if you see that as rude, 
but this is the people's business.
    Mr. Mnuchin. I do not see it as rude. That is okay; thank 
you.
    Senator Brown. Is it true that OneWest regulators, that is 
the OCC, said that you had deficient mortgage practices, 
foreclosed on 10,000-plus borrowers without proper procedure 
and on at least 23 who were current on their mortgages?
    Mr. Mnuchin. So what I would say is, we followed the same 
procedures----
    Senator Brown. ``Yes'' or ``no,'' did the OCC say that?
    Mr. Mnuchin [continuing]. That the FDIC followed. We 
inherited the FDIC procedures.
    Senator Brown. Yes, the OCC has said that.
    The Chairman. Let him answer the question.
    Senator Brown. Is it true that OneWest's independent audit 
firm said that it violated the Service Members' Civil Relief 
Act by initiating foreclosures on 54 active duty military 
families? That is what the independent audit firm said. ``Yes'' 
or ``no''?
    Mr. Mnuchin. Well, you have the document in front of you; I 
do not. Okay?
    Senator Brown. Okay, well, they did.
    Mr. Mnuchin. And let me just say----
    Senator Brown. I am pretty surprised, Mr. Mnuchin--I am 
sorry, but I am pretty surprised you do not know these things, 
because you have been rather defensive, for probably good 
reason, about what happened at OneWest. Is it true that the 
California Attorney General----
    Mr. Mnuchin. I do want to just comment for the record. We 
unfortunately did foreclose on certain people in the military. 
It was quite unfortunate. It was inappropriate. We responded to 
those people and made them whole.
    As I have said, every single person had the opportunity to 
have their mortgage reviewed, and we corrected any errors. Our 
errors were less than anybody else's. So it is not that I am 
being defensive.
    Senator Brown. Well, yes, perhaps. Okay, I am going to cut 
you off again. I apologize.
    Mr. Mnuchin. I am proud of our results.
    Senator Brown. Well, I would not be proud of all these 
findings. But is it true that the California Attorney General's 
Office said that OneWest backdated 96 percent of the documents 
they examined and then you aggressively obstructed their 
investigation? That is what the Attorney General's office said. 
Did they say that?
    Mr. Mnuchin. So first, let me comment that I saw the leaked 
memo, as you did. I think it is highly inappropriate that 
somebody at the Attorney General's office would leak internal--
--
    Senator Brown. So is there no truth in that about 
backdating 96 percent of those?
    Mr. Mnuchin. Again, what I would say is, the primary 
regulator was the OCC. They were the ones who had the 
obligation to regulate us.
    Senator Brown. And OCC said those things that you could 
not--Mr. Mnuchin, I am sorry. OCC said you had these deficient 
mortgage practices, but you could not remember when I asked you 
about OCC.
    Mr. Mnuchin. No, that is----
    Senator Brown. Now you are citing OCC in response to 
California's Attorney General. Is it true that one of the 
employees who was in charge of the modifications, one of 
OneWest's employees, has accused OneWest of not having any 
process in place to help its 3,000 FHA and VA mortgage 
borrowers avoid foreclosure and that this same employee, who 
was in charge of modifications, has accused OneWest of not 
having a process in place to help those VA mortgage borrowers 
avoid foreclosures and submitting false claims?
    Mr. Mnuchin. It seems to me, in all due respect, you just 
want to shoot questions at me and not let me explain what are 
complicated issues.
    Senator Brown. Well, I will let you explain after I go 
through the questions, because I know one answer will take my 
whole time. So I will let you explain when I am done with this.
    Mr. Mnuchin. Well, then----
    Senator Brown. Mr. Mnuchin--I am sorry, Mr. Chairman.
    Mr. Mnuchin [continuing]. Let people at least understand 
that these are complicated questions.
    Senator Brown. They are complicated.
    Mr. Mnuchin. Let me at least explain them, otherwise there 
is no point in shooting them all at me when I do not have the 
ability to respond.
    Senator Brown. Okay, you do not, but all of these are 
factual things, if you want to follow up with a response later 
in more detail.
    One example of--and you can answer this and take as long as 
you need--one example of an insider loan was the Relativity 
Media deal. The FBI denied a FOIA request related to Relativity 
Media where you were co-chair, citing enforcement procedures. 
Have you been questioned by law enforcement on this, ``yes'' or 
``no''?
    Mr. Mnuchin. I have not. And I saw that you wrote that 
letter yesterday. I assume that the FBI did a thorough review 
of my background report. I have no idea why they did not 
approve the FOIA issue. I have been told that we have no reason 
to believe it is any issue associated with me.
    Senator Brown. Fair enough.
    Mr. Mnuchin. But you should direct that to the FBI.
    Senator Brown. Okay, and I will.
    Mr. Mnuchin. And when I had the opportunity to meet with 
you----
    Senator Brown. And I accept your answer that you are not 
being investigated. But I find it interesting that you know 
about the letter I sent yesterday. The letter I sent with all 
those questions detailing all of the issues that I just asked 
about with Bank West, West Bank, Bank West----
    Mr. Mnuchin. OneWest, Senator, OneWest.
    Senator Brown. OneWest, I am sorry; OneWest, OneWest, I 
apologize.
    Mr. Mnuchin. That is all right; my father forgot the name 
sometimes as well. [Laughter.]
    Senator Brown. Okay, good. But the letter I sent you back 
in early mid-December about this, you have not even taken the 
time to answer, and it really laid out all those issues.
    I think the issue is, the OneWest purchase went well for 
the Treasury Secretary designee, but it was a disaster for 
homeowners, for employees, for investors in Relativity, and for 
taxpayers. We can talk more about taxpayer cost on this whole 
process and the amount of money that he bought it for, sold it 
for, but it was mostly subsidized by taxpayers.
    The Chairman. Okay, Senator, your time is up. Now, you take 
as much time as you want to answer the questions.
    Mr. Mnuchin. Mr. Chairman, thank you. Thank you very much.
    First of all, Senator, I did enjoy meeting you.
    Senator Brown. Thanks.
    Mr. Mnuchin. I do not believe we had the opportunity to 
meet before that time. And if I am confirmed, I look forward to 
spending more time with you.
    Senator Brown. Thank you for saying that.
    Mr. Mnuchin. I know that you have some--although we may not 
agree on everything, there were certain things we did agree on 
when we met. And I have a lot of respect for you as a Senator 
to hear your issues.
    Now, I did tell you, I did acknowledge that you sent me the 
letter. I was advised by the staff that the appropriate thing 
was for me to come here and answer questions or meet with all 
of you independently and answer questions that you have. And if 
I do not satisfy that, you have the ability to submit questions 
afterwards, which I will respond to.
    When I came to your office, I told you that, and I said 
that I would spend as much time with you as you wanted 
answering those questions, that they were quite significant, 
you know, because I knew they were complicated. So I did tell 
you, although I would not respond to them in writing at that 
point, that I did understand your questions and I wanted to 
address them.
    The Chairman. Senator Thune?
    Senator Thune. Thank you, Mr. Chairman.
    Mr. Mnuchin, welcome.
    In the last 8 years, we have not had a single year where 
the growth rate has exceeded 3 percent. And a lot of the 
administration, the current administration, describes that as 
the new normal. Tell me, what do you think is a reasonable 
expectation in terms of the growth rate in our economy?
    Historically, if you go back to World War II, we have 
averaged about 3.2 percent a year. What do you think is a 
reasonable growth rate?
    Mr. Mnuchin. Hang on; I am just looking at some of my 
notes. I mean, the short answer is, I have said publicly and I 
believe that we should be able to get to 3 percent sustained 
GDP. I think that that is absolutely important.
    I think that as a country, the most important issue we have 
is economic growth, that whatever issues we have as Republicans 
or Democrats, I think we can agree that, with more growth, it 
is a lot easier to solve these issues. And we should all be 
focused on things that help grow the economy.
    In 1984, we had 7 percent. In 1998, we had 5 percent. And 
in 2005, we had 3 percent. That was the last time we had 
appropriate growth rates. So I share the President-elect's 
concern of low growth.
    Our number-one priority, from my standpoint, is economic 
growth. And I can assure you, I will work tirelessly, if I am 
confirmed, to create growth in the economy and create pro-
growth programs. And I commit to work with all of you on that. 
I believe that tax reform will be our first and most important 
part of that.
    Senator Thune. Yes. And the President-elect has identified 
tax reform, reg reform--lessening the regulatory burden too. 
Those are two areas that I think we can pursue to unleash the 
economy and achieve a higher level of growth.
    To what degree do you think that regulations, and 
particularly the heavy volume of regulations coming out of this 
administration, have had an impact on small business? Even 
yesterday, the Obama administration proposed a 277-page 
regulation on partnership audit rules that affects pass-through 
businesses, farmers, small businesses, the folks I represent.
    And in September, we sent a letter to Secretary Lew trying 
to get him to withdraw some regulations that dealt with 
valuation discounts that impact estates and make it very 
difficult for a small business or a farmer or rancher to pass 
that business on to the next generation.
    When you get over there, are you going to, hopefully, look 
at withdrawing those types of regulations as quickly as 
possible and undo a lot of the economic harm? I think, frankly, 
this is part of what has adversely impacted the growth rate in 
this economy.
    Mr. Mnuchin. Absolutely. And I will tell you, both I and 
the President-elect believe in appropriate regulation. But in 
many, many areas of the economy, not just in financial 
services, there is excess regulation that is inhibiting jobs 
and growth and hurting the American workers. And we are 
committed.
    And specifically on what you have mentioned, on the IRS 
regs on family businesses, I am committed to work with you and 
your office.
    You know, we want to make sure that we cover the 
appropriate loopholes so that if people have businesses set up 
to avoid taxes, and they are not a real operating business, it 
is one thing, but for any operating business, we need to make 
sure that for people who own minority interests in operating 
businesses, the valuation for tax purposes is reflected 
appropriately.
    And anybody who follows the markets knows that there is a 
significant difference between control and non-control. And you 
know, the IRS should follow fair valuations. So we should make 
sure we collect the most money and not have lots of loopholes, 
but on the other hand, we need to reflect fair valuations.
    Senator Thune. Okay. Senator Cardin and I chaired, in the 
last Congress, a working group on business tax income. And one 
of the issues that came out of that working group is, if we get 
into comprehensive tax reform, and I hope that we do, how do 
you treat pass-through businesses? To me, that is one of the 
most important questions.
    Ninety percent of the businesses in this country are 
organized as pass-throughs. Fifty percent of net business 
income is generated by pass-throughs, and they employ about 55 
percent of the people in this country.
    And so, as we think about tax reform, I guess I am asking 
you if you would commit to work with us to ensure that pass-
through businesses are treated fairly and that whatever we come 
up with in terms of policy reflects the economic impact that 
LLCs and partnerships and subchapter S corporations that are 
organized as pass-throughs have on our economy.
    Mr. Mnuchin. Absolutely. And not only am I committed to it, 
but I have actually spent a lot of time on this issue already. 
I have worked with the trade group that follows small 
businesses, and not only did they support the Trump economic 
plan, which I helped design, but they were kind enough to write 
a letter of support for me to the committee.
    And I think the important issue on pass-throughs that we 
are committed to is that we want to make sure that there is a 
business tax--this is not just a corporate tax--that there is a 
business tax.
    If there are large pass-throughs that earn tens of millions 
or hundreds of millions of dollars, we want to make sure that 
they keep the money in the company as an incentive and that 
they do not use pass-throughs as a way to get lower taxes than 
they would pay in personal income tax.
    And we want to make sure that hedge fund managers do not 
use pass-throughs, again, to avoid what would be higher 
personal income taxes.
    But we are absolutely committed, and we have spoken to many 
small businesses and entrepreneurs to make sure that they are 
protected and they get the benefit of the business tax.
    So I appreciate your concern. We have heard this loud and 
clear on the campaign trail. And I can assure you, it is 
something we are committed to work with you and your office on.
    Senator Thune. Good, thank you. Keep that focus on growth. 
That is what we want, to get that growth back up.
    Mr. Mnuchin. Thank you.
    Senator Thune. Thank you.
    The Chairman. Senator Toomey is next.
    Senator Toomey. Thank you, Mr. Chairman.
    And, Mr. Mnuchin, thank you for joining us. I enjoyed our 
chat the other day, and I appreciate your willingness to serve 
in this extremely important post.
    Mr. Chairman, I want to thank you for observing some not-
too-distant history: the fact that our current Treasury 
Secretary had investments in the Cayman Islands. And maybe my 
memory fails me, but I do not remember the outrage from my 
colleagues on the other side when it came to his circumstances. 
So there seems to be a bit of a selectivity on the part of 
that.
    I want to just briefly go back to a point you made earlier, 
Mr. Mnuchin, because I think it is very important, especially 
for the benefit of those among us who have no experience in 
banking at all. But you made a point that I think is really, 
really important. I have never heard of a bank that would not 
prefer loan modification every time over foreclosure, not only 
to avoid the misery that results for their customer, but also 
because foreclosure almost guarantees locking in substantial 
losses for the bank.
    Would it be fair to say that virtually any time that it is 
possible, your bank would have preferred a loan modification 
for the borrower?
    Mr. Mnuchin. Absolutely. And as I said, we ran a net 
present value test that was established by the U.S. Treasury 
assumptions. And we put in the assumptions. Any time we could 
collect more money by doing a modification, we were allowed to 
do a modification. And by definition, we were incented to do a 
modification.
    Senator Toomey. Right.
    Mr. Mnuchin. And by the way, I think we would have done 
those modifications even if we had not received the HAMP 
incentives from the U.S. Government, which on our FDIC loans we 
rebated to the FDIC. So banks are incented to do this, whether 
they get the subsidies from the Treasury or not.
    Senator Toomey. Thank you.
    There are a couple of things I want to touch on quickly, if 
we could. On the trade front, the President-elect has indicated 
an interest in revisiting trade agreements. Some of them were 
negotiated a long time ago. And I am sure there are things that 
could be modernized and updated.
    But would you agree that it would be a mistake to evaluate 
whether or not a trade agreement is a good one solely by 
looking at whether or not we have a trade deficit with the 
country in question? Would it be a mistake to make that the 
sole criteria?
    Mr. Mnuchin. I would agree with that.
    Senator Toomey. Okay, good. Also, would you agree that many 
of the periods of strong economic growth that we have had in 
recent decades have corresponded to periods of a strong dollar 
and that often, if our economy is performing well and the world 
perceives our economy to have a bright future, the inevitable 
result will be a stronger dollar?
    Mr. Mnuchin. Yes. Let me just comment on that, because I 
think that the U.S. currency has been the most attractive 
currency to be in for very, very long periods of time. I think 
that it is important, and I think you see that more than ever. 
The currency is very, very strong. And what you see is people 
from all over the world wanting to invest in the U.S. currency.
    I think when the President-elect made a comment on the U.S. 
currency, it was not meant to be a long-term comment. It was 
meant to imply that, perhaps in the short term, the strength in 
the currency, as a result of free markets and people wanting to 
invest here, may have had some negative impacts on our ability 
to trade.
    But I agree with you: the long-term strength over long 
periods of time is important. And again, that is a reflection 
of, I believe, the fact that we have the most attractive 
investment environment in the world.
    Senator Toomey. Right.
    Mr. Mnuchin. And we just have to protect our U.S. companies 
so that they are not forced abroad.
    Senator Toomey. The last point I want to make, running low 
on time here, is that the many failures of Dodd-Frank, in my 
view, include title II, which I believe is a codification of a 
mechanism to require future bailouts from taxpayers in the 
event that a large financial institution should fail again.
    Would you share my view that it is much more desirable to 
amend the bankruptcy code so that we could handle the 
resolution of a large, complex financial institution through 
bankruptcy and not ever have to go to taxpayers to bail out big 
banks?
    Mr. Mnuchin. Well, I 100-percent agree with you that we 
should not be in the business of bailing out big banks. And I 
100-percent agree with you that I share certain concerns on 
title II. I think we need to look at the bankruptcy code and 
what we can do as an alternative.
    But I would just comment that the bigger issue is, for 
long, long periods of time, the FDIC was able to take over and 
resolve banks when the regulators determined that there were 
issues. And one of the big problems we had during the financial 
crisis was the intermingling of banks and holding companies and 
complex securities.
    So I do not necessarily--I think if we have proper 
regulation, a lot of the need for title II also goes away.
    Senator Toomey. I see I have run out of time. Thank you, 
Mr. Chairman.
    The Chairman. Senator Bennet?
    Senator Bennet. Thank you, Mr. Chairman. Thanks for holding 
this hearing. Thank you, Mr. Mnuchin, for your willingness to 
serve and for our meeting yesterday.
    Just for clarity, The Wall Street Journal yesterday wrote 
``dollar sinks as Trump talks it down.'' Do you believe the 
dollar is too strong?
    Mr. Mnuchin. Again, I believe in the short term----
    Senator Bennet. As Treasury Secretary, are we ever going to 
hear you say that the dollar is too strong?
    Mr. Mnuchin. As Treasury Secretary, I do not see it as my 
role commenting on the dollar on short-term movements. I have 
commented on what I believe are the long-term----
    Senator Bennet. Let me ask you a different question. In 
2011, due to the dysfunction in Congress, we almost failed to 
raise the debt ceiling here. And as a result, a rating agency 
downgraded our Nation's debt for the first time in history. The 
stock market lost 17 percent of its value and did not recover 
for almost a year. And consumer confidence fell 22 percent in 
just a few months--a completely self-inflicted wound on the 
American economy. This unfortunately hurt Americans' retirement 
savings and dealt a blow to both growth and job creation.
    During the campaign, Mr. Trump suggested he could somehow 
refinance or renegotiate our existing debt. While he walked 
away from the idea initially, later in the campaign he again 
suggested the country could pay our creditors less than what 
they were due.
    Specifically, he said, quote, ``You go back and say, hey, 
guess what, the economy just crashed, I am going to give you 
back half.'' He also suggested that the United States never has 
to default, quote, ``because you print the money.''
    Do you agree with these statements?
    Mr. Mnuchin. Senator, first of all, thank you for asking 
the question about the debt ceiling, which I do want to comment 
on because I----
    Senator Bennet. Good, because I have another question on 
the debt ceiling.
    Mr. Mnuchin [continuing]. Think it is a very important 
issue for all of us. And if I am lucky enough to be confirmed, 
it will be something that I will----
    Senator Bennet. Okay. Please do not filibuster. I 
appreciate that.
    Mr. Mnuchin. The President-elect has made it perfectly 
clear, and I think it is perfectly clear, that honoring the 
U.S. debt is the most important thing.
    Senator Bennet. Okay, so----
    Mr. Mnuchin. And I hope that when we get to the point, if I 
am confirmed, where we have to raise the debt ceiling, that we 
will not go through another one of these issues, because there 
are certain things that I would have the power to postpone, but 
I firmly believe the U.S. has the obligation to honor its debt.
    Senator Bennet. Okay. Then, can you commit to working with 
the Congress to pass a clean debt ceiling?
    Mr. Mnuchin. I will commit to absolutely work with the 
Congress, the House and the Senate, so that we do not get to 
the last minute and run out of money.
    Senator Bennet. Is that a ``yes,'' you will commit to 
passing a clean debt ceiling?
    Mr. Mnuchin. I do not know your technical issue of what a 
clean debt ceiling is----
    Senator Bennet. The debt ceiling----
    Mr. Mnuchin [continuing]. But let me be clear, I would like 
us to raise the debt ceiling sooner rather than later----
    Senator Bennet. That is clear enough for me. Thank you.
    Mr. Mnuchin [continuing]. So that we do not run a risk of 
defaulting on our obligations.
    Senator Bennet. I am grateful for that answer.
    Mr. Mnuchin. Thank you.
    Senator Bennet. The nonpartisan Tax Policy Center found 
that President-elect Trump's tax plan would increase the debt 
by $7.2 trillion over 10 years. The President-elect has also 
proposed increasing defense spending and said that he will not 
touch entitlements, like Medicare or Social Security. So far he 
has only suggested reducing spending on nondefense 
discretionary spending.
    In 2015, as you know, nondefense discretionary spending 
comprised about 16 percent of the budget, about $583 billion. 
This includes funding for veterans' benefits, transportation, 
our national parks, and our investments in research. So even if 
we did not spend a single penny on any of these priorities for 
an entire year, which I would not suggest, but even if we did 
not, that would only pay for about 8 percent of Mr. Trump's tax 
plan.
    Is a tax plan that increases the debt by $7.2 trillion an 
acceptable outcome to you?
    Mr. Mnuchin. I believe the $7.2-trillion number was the 
first tax plan and not the second tax plan. I believe it scored 
dynamic, closer to $2 trillion.
    Senator Bennet. The first tax plan was $11 trillion. The 
second, I think, was $7.2 trillion.
    Mr. Mnuchin. Well then, you must be referring to static and 
not dynamic. The dynamic number was closer to $2 trillion.
    Senator Bennet. The dynamic was $3.6 trillion. So in any 
case, what we are doing is adding mountains of debt.
    Mr. Mnuchin. Let me just comment that I have discussed the 
debt with the President-elect. We are both concerned that we 
have gone from $10 trillion to $20 trillion of debt. We think 
that the way to reduce the debt is by economic growth. And that 
will create the opportunity for us to pay down the debt.
    Now, let me just make a comment on the tax plan.
    Senator Bennet. So just to be clear on that, though, 
Senator Thune said, well, in our history the average growth 
rate we have seen is about 3.2 percent. It would be great to 
get to 4 percent--you said between 3 and 4--but there is no way 
that is going to fill the gap that is projected in these tax 
plans.
    And I can accept the fact that the President-elect may have 
changed his mind or you differ with him. I am just trying to 
understand whether you would find it acceptable to bury the 
American people under this kind of proposed debt.
    Mr. Mnuchin. Again, I think, as you know, we had a rather 
modest campaign staff relative to the other people out there, 
so one of the things I look forward to, if I am confirmed, is 
having access to all the people at Treasury who model these 
things.
    So we were forced--we had some internal models--but we were 
forced to rely upon external models. Certain of the assumptions 
we agreed with; certain of the assumptions we did not agree 
with.
    I think what is important is that President-elect Trump has 
a pro-growth economic tax plan. And we are sensitive to the 
costs of that plan.
    Yesterday, I did have the opportunity to meet with Senator 
Wyden, and we talked about the process for tax reform. I will 
be the person from the administration taking the lead on that, 
and I would look forward to working with the House and the 
Senate, both Republicans and Democrats, to move forward on tax 
legislation.
    Senator Bennet. I am out of time, Mr. Chairman. I realize 
that. I want to just make one observation, which is that Mr. 
Mnuchin, in fairness to him, has twice praised the employees at 
the Treasury Department today. And I just want to say that that 
is a refreshing and welcome change from what we have heard up 
until now in a lot of these hearings.
    The Chairman. Senator Isakson?
    Senator Isakson. Thank you very much, Mr. Chairman.
    Mr. Mnuchin, welcome. I am sorry I have been in and out of 
the room, but I have been listening outside while I have been 
outside----
    Mr. Mnuchin. Thank you.
    Senator Isakson [continuing]. So I think I am pretty much 
up to date.
    And I am really going to talk to you about something I had 
not prepared myself to talk about until I heard some of the 
other questions and testimony that went on. I want to talk 
about mortgage-backed securities--Fannie Mae and Freddie Mac--
in 2008.
    Your purchase of IndyMac was in 2008, is that correct?
    Mr. Mnuchin. Yes, it was in December of 2008 we committed 
to it.
    Senator Isakson. And the beginning of the crisis really was 
in July of 2008 when Merrill Lynch drove down their portfolio 
of subprime securities by 71 cents on the dollar. Is that not 
correct?
    Mr. Mnuchin. I think that is correct.
    Senator Isakson. And it started a domino effect around the 
world that collapsed the mortgage-backed securities and their 
value. Is that not correct?
    Mr. Mnuchin. That is correct.
    Senator Isakson. When you purchased IndyMac, it had a 
number of those loans in its portfolio, is that correct?
    Mr. Mnuchin. It had a portfolio of mortgage-backed 
securities.
    Senator Isakson. Mortgage-backed securities, within which 
were included those loans.
    Mr. Mnuchin. Yes, that is correct.
    Senator Isakson. Because what Wall Street did is, Wall 
Street packaged loans and put them into a security and then 
marketed them based on a high yield. Is that not correct?
    Mr. Mnuchin. Yes. Well, what actually happened in the case 
of IndyMac is, they had securitized the loans themselves. They 
created their own securities. The market backed up, they could 
not afford to sell them, and they got stuck keeping them.
    So in many cases, most of the mortgage-backed securities we 
had, they did not buy. Most of them were failed sales.
    Senator Isakson. Is it not true that Freddie and Fannie 
guaranteed and assured loans, pretty much at the direction of 
the Congress of the United States? When it came to the 
affordable housing loans, is it not true that Congress directed 
them to have a larger percentage of affordable housing loans in 
their portfolio?
    Mr. Mnuchin. Absolutely, and I believe that is, 
unfortunately, what led them to buy a lot of bad loans.
    Senator Isakson. What I want everybody to understand when 
they are talking about these mortgage issues--I was in the real 
estate business for 31 years and was, of course, in Congress at 
the time this went on.
    But what happened in a lot of these loans is that they were 
made because of the inducement or the direction of Congress to 
take more of them. What was called an affordable housing loan 
ended up being a subprime loan, if you will, which ended up 
being a high-risk loan, which ended up having a high interest 
rate on it, which with a high coupon was packaged together into 
securities and then sold around the world. Is that not correct?
    Mr. Mnuchin. It is true. I mean, these loans had all 
different types of acronyms. They were low docs, they were 
subprime. They just should have been called bad loans. That is 
what they were.
    Senator Isakson. And your IndyMac, as I remember and I 
recall, tried everything it could to recalibrate those loans, 
restructure those loans, and renegotiate those loans to keep as 
many as possible from going into foreclosure. Is that not 
right?
    Mr. Mnuchin. That is true. And not only for the loans that 
we owned, but loans that we serviced for Fannie Mae and Freddie 
Mac. As a matter of fact, the one person who came to my home 
and protested at my home, it was a Fannie Mae loan, and I was 
not able to do anything about that. And it was through my 
multiple calls to Fannie Mae that I was able to get a loan 
modification for that person.
    But many times people thought we owned the loans, and we 
did not. They were owned by Fannie Mae and Freddie Mac and 
other security holders.
    Senator Isakson. And the main point I want to make for the 
sake of this argument--and I am sure a lot of the questions you 
are going to get--is, a lot of these loans were originated at 
the auspices of or with the encouragement of the United States 
Government and the Congress of the United States. And they were 
called affordable housing loans.
    A lot of people bought those loans that had been made by 
somebody else when they bought an institution, so they 
inherited the problem; they did not originate the problem.
    There is a world of difference between originating a loan 
and buying a loan, is that not correct?
    Mr. Mnuchin. That is correct. I can assure you that the 
loans that we originated on the mortgage side going forward 
were good loans and had nothing to do with those terrible 
legacy loans. So thank you for pointing that out.
    Senator Isakson. That is the important point. Because if 
you originate something, you own it. If you acquire something 
that is a bad debt or a bad piece of paper, shame on you for 
buying it, but it is not your problem for creating it. And that 
is the important thing to know, is that not correct?
    Mr. Mnuchin. That is true, Senator. Thank you.
    Senator Isakson. And when I say ``shame on you,'' I do not 
mean shame on you in that you did something wrong. I mean shame 
on you in that you inherited something that was wrong by buying 
something that was good.
    Mr. Mnuchin. Yes, I understood that. Thank you for pointing 
that out.
    Senator Isakson. One last point. I hope I have made that as 
clear as I could. One last point. I have been told by my State 
Director of Revenue that the IRS is not sending out or that the 
Federal Government is not sending out W-2 forms to the State 
revenue departments in the United States. Is that not correct?
    When you become Treasury Secretary, I would hope you would 
pay attention to that and try to direct them to start going 
back to doing that, because the only way we can keep bogus 
loans from intruding into our portfolios is for people to get 
back their income tied to their Social Security and for the 
Federal Government to get their report on that at the same 
time.
    So if you would work on seeing to it that those practices 
are ended somewhere around the country, I would appreciate it 
greatly.
    Mr. Mnuchin. Thank you. I will be committed to work with 
you and your staff on that. That sounds like a very important 
issue.
    Senator Isakson. Thank you for your willingness to serve, 
and congratulations on your nomination.
    Mr. Mnuchin. Thank you, Senator.
    The Chairman. Senator Heller?
    Senator Heller. Thank you, Mr. Chairman.
    And, Mr. Mnuchin, to you and your family, welcome to the 
hearing today.
    Since the beginning of the Great Recession, no State was 
hurt harder than the State of Nevada. And you are probably 
well-aware of that. We led the country in bankruptcies, 
foreclosures, and unemployment, so you can imagine that we are 
a little sensitive as to who becomes the next Treasury 
Secretary, having gone through that over the last 8 or 9 years.
    You came into my office on January 4th and we had a good 
discussion, and I appreciate the visit. I asked you some 
questions, and I would like to ask you the same questions 
today.
    One question was, how many Nevada homes were in OneWest 
Bank's portfolio?
    Mr. Mnuchin. Unfortunately--and I will go back and request 
that information from the bank--I no longer have that 
information. But I will work with the bank to try to get that 
for you.
    Senator Heller. How many Nevadans did OneWest Bank 
foreclose on while you owned the bank?
    Mr. Mnuchin. Again, I have the information that is in 
public reports. But I am absolutely committed to go back and 
get that information for you from the bank. So I apologize; I 
do not have that with me today.
    And I do appreciate how hard your State was hit in the 
foreclosure crisis.
    Senator Heller. Do you know how many Nevadans OneWest Bank 
provided assistance to through loan modifications?
    Mr. Mnuchin. Again, I will go back and try to get all that 
information for you.
    Senator Heller. Here is the reason why I asked you these 
three questions over again: it is that this is the seventh time 
I have asked. So I asked you when you were in my office--and I 
had my staff follow up on it--three times by text, and twice by 
phone, and we still cannot get the answers to these questions. 
And I am not quite sure with 2 weeks--well, your own comments 
were that you guys had responded to 5,000 pages, 5,000 pages of 
questions asked. Why were these three questions not asked if 
you had 5,000 pages of questions that you answered?
    Mr. Mnuchin. Well, first of all, let me apologize to you, 
because I do recall you asking them in your office. And there 
is no excuse that they have not been answered. I was not aware 
that my staff also got those questions, so I apologize to you. 
And I assure you personally that as soon as I get out of this 
hearing, I will request that information from the bank.
    You know, we are responding to a lot of other information, 
so I apologize. This is important to you, and you have my 
commitment that we will get that.
    Senator Heller. In 2008 when OneWest purchased IndyMac, can 
you tell me what motivated that transaction? Was it a way to 
save the bank? Was it a way to make money? Or was it a way to 
keep people in their homes, or was there some other reason?
    Mr. Mnuchin. I think it was all three of the above. So, I 
saw the opportunity--I thought that there was going to be a 
banking crisis, and I saw the opportunity where we thought we 
could turn around the regional bank and turn it from what was a 
lousy mortgage bank into an attractive regional bank and that 
there was the opportunity to have an attractive investment as 
well.
    Obviously, I had to convince my investors that they would 
make money, but I saw it as also a great goal of building a 
business.
    Now, I just want to comment that, yes, my investors made a 
lot of money on OneWest, but I would just comment that, if we 
had just invested in JPMorgan and Bank of America and a handful 
of other stocks, we would have made a lot more money and I 
would not have had to work nearly as hard.
    So a big part of the financial return ultimately was, we 
invested in the market at a very, very depressed period of 
time.
    Senator Heller. Were you motivated--or let me ask it this 
way. Was it an objective of OneWest Bank to foreclose on 
Nevadans in order to receive compensation from the FDIC in 
their shared loss agreement?
    Mr. Mnuchin. No, quite the contrary. So again, when we 
bought IndyMac from the FDIC, it was inherent in these 
agreements, we committed to do loan modifications. So when we 
bought the bank, that was the agreement.
    Again, as I have said before, we were proud of loan 
modifications started there. And we actually had a bunch of 
incentives, whether it was HAMP incentives or other things, in 
the loss share agreement where it was actually much better for 
us to do loan modifications.
    So as I have said before, I can assure you that what 
prevented us from doing more loan modifications was either the 
net present value test or was what the qualifications were. So 
we were required to get updated income, and people had to be 
able to effectively requalify for the loan.
    So as I have said before, not only from a social basis did 
I want to keep people in their homes, but we were economically 
motivated to do that.
    Senator Heller. How much did the FDIC pay OneWest for the 
losses?
    Mr. Mnuchin. What do you mean by, how much did they pay us 
for the losses?
    Senator Heller. What was the compensation from the FDIC for 
foreclosing on homes with the shared loss agreement?
    Mr. Mnuchin. So what we did, the way the shared loss 
agreement worked--and again, I would comment, you know, I think 
there have been, like, 400 shared loss agreements. I think, 
according to the FDIC's public data, they believe that they 
saved $40 billion by using the shared loss agreements.
    Senator Heller. The answer is $1.2 billion, $1.2 billion.
    Mr. Mnuchin. No, but that is after we absorbed $2 billion 
of losses. So I just, I want to----
    Senator Heller. So you are not saying that that is not a 
motivation to foreclose on a home, $1.2 billion?
    Mr. Mnuchin. No, it is not a motivation, because there were 
restructuring fees that were put through when we did loan 
modifications. And we wanted good loans. We were not--again, 
let me just be clear. We wanted good loans. Having good loans 
that performed under the loss share agreement was absolutely 
critical.
    Senator Heller. One more question. Did OneWest Bank 
specifically target minority communities in Nevada for 
foreclosures?
    Mr. Mnuchin. Absolutely not.
    Senator Heller. Mr. Chairman, my time has run out.
    The Chairman. Senator Casey?
    Senator Casey. Mr. Chairman, thank you very much.
    Mr. Mnuchin, I appreciate you being here with your family.
    And I want to start with a subject that you have already 
answered some questions about: the issue of mortgage 
foreclosures, but also modifications.
    I am holding in my hand, I guess a 4-page, if you look at 
both sides, document entitled--and this is Channel 4 in 
Pittsburgh, an investigative report just announced this week--
quote, ``Trump pick for Treasury Secretary foreclosed on 
hundreds of homeowners in western Pennsylvania.'' And it is 
dated January the 16th.
    Mr. Chairman, I would ask consent to have this be part of 
the record.
    The Chairman. Without objection.
    [The article appears in the appendix on p. 99.]
    Senator Casey. Let me just read you part of it, Mr. 
Mnuchin, because I know sometimes when these reports refer to 
individuals, you may know them, you may not. I am not going to 
ask if you know this person.
    But here are just a couple of excerpts, according to 
Channel 4 in Pittsburgh: ``Nellie Mlinek lost her husband to 
cancer, lost her son to an overdose, and then she lost her home 
to OneWest Bank.'' She says, and I am quoting from her words 
here, ``One thing I will never get over is my son's death.''
    She lives in Westmoreland County, just a little bit east of 
Pittsburgh, in Ruffs Dale, that is the name of the community.
    Here is what Nellie hoped would have happened. She said, 
and I quote, ``They,'' meaning OneWest, ``they should have 
worked with me to meet a payment that I could make.'' The 
report goes on to say she filed for bankruptcy, but even then 
could not save her house. She said it caused her, quote, ``a 
lot of depression.'' And then it lists a couple of examples 
from other communities that were foreclosed on.
    A house in White Oak was foreclosed on in 2014, a house in 
North Versailles in 2013, a house in Penn Hills in 2012, a 
house in Pittsburgh in 2011. But again, the headline says, 
``hundreds of homeowners in western Pennsylvania.'' Depending 
on where you draw the line, that is probably 10 counties, 
roughly. So one region of a State of 67 counties.
    One of the reasons I highlight that is to, number one, 
focus on the impact that those foreclosures had on one 
community and one State, but also to ask you some questions 
just so I can make sure the record is clear to the extent that 
we can get to these issues in this line of questioning about 
modifications and foreclosures.
    One of the statements you made in my office when we met--
and I appreciated the time we had--you said that OneWest, 
quote, ``did lots of modifications.'' And then on the question 
of foreclosure itself, you said at the time, ``we only did 
30,000 to 35,000 foreclosures.'' Is that correct? Is that----
    Mr. Mnuchin. That was for the period of time that we were 
talking about: 2009, 2010.
    Senator Casey. So that is just the 2009 and 2010 number.
    Mr. Mnuchin. I believe the 36,000 were 2009, 2010 versus 
there were 175,000; the 100,000 loan modifications were over a 
slightly longer period of time.
    Senator Casey. So let me just get this. Over the whole 
period that you were the leader of OneWest, how many 
foreclosures total were there nationwide?
    Mr. Mnuchin. I do not have that, but I can find the number. 
But let me just comment, since there is a lot of talk about 
this foreclosure business. Again, 93 percent of the loans that 
we serviced, we serviced for third parties. We sold this 
business. So again, I never wanted to be in the mortgage 
servicing business. I did not want to be in the mortgage 
business. I wanted to build a regional bank.
    So OneWest is no longer. We sold years ago the servicing 
business because we did not want to be in that. We sold that 
business to Ocwen.
    Obviously, the loan that you are talking about, I mean, it 
sounds like an absolutely horrible situation, and I sympathize 
for that person.
    Senator Casey. Well, I appreciate it. I only have limited 
time. Let me get to the second question here on modifications.
    There seems to be some discrepancy here about the numbers 
on modifications. You say in your testimony today, and I am 
quoting you here at the bottom of page 2, ``Ultimately, OneWest 
extended over 100,000 loan modifications to delinquent 
borrowers.''
    Now, ``extended'' is not the same as a modification, you 
would agree with me, would you not?
    Mr. Mnuchin. No, no, ``extended'' means they were put on 
modifications.
    Senator Casey. But that is not a completed modification.
    Mr. Mnuchin. No, no. Again, they were offered and they were 
put on a loan modification.
    Senator Casey. But in fact, in fact, according to a 
document that I will also make part of the record--this is a 
one-page document from HAMP, the Home Affordability and 
Modification Program, that, Mr. Chairman, I would ask be made 
part of the record: ``Making Home Affordable: Summary 
Results.'' That is the name of the document.
    The Chairman. Without objection.
    [The document appears in the appendix on p. 101.]
    Senator Casey. In fact, just permit me to say one more 
thing, Mr. Chairman. In terms of total modifications, it was 
really only 22,908. So we will put that into the record. And I 
will have more questions later. Thank you.
    The Chairman. Without objection.
    We will now turn to Senator Cassidy.
    Senator Cassidy. Mr. Mnuchin, nice to see you.
    Mr. Mnuchin. Nice to see you; thank you.
    Senator Cassidy. As you can tell by where I am, I am fairly 
junior on this panel. I will note, though, you have been 
somewhat assaulted by innuendo, and my sympathies for being 
assaulted by innuendo.
    Secondly, as regards economic growth, I wrote an editorial 
with a friend in The Wall Street Journal a few years ago that 
showed that if we had had the economic growth from 2001 to 2014 
as we had from 1993 to 2000, in 2014 we would have had a $500-
billion surplus despite entitlement spending and despite 
whatever, as opposed to the $500-billion deficit we had.
    So I appreciate your acknowledgment that pro-growth 
policies cover a multitude of sins, so, good for you.
    Mr. Mnuchin. Thank you.
    Senator Cassidy. That said, I represent a lot of rural 
parishes, and there are two things driving economic growth in 
such parishes: typically utility companies--they want to sell 
more--and community banks. And since Dodd-Frank was passed--you 
and I discussed this in my office--the number of community 
banks has just, like, oh, my gosh, it has just plummeted. 
``OMG,'' as my daughter would say.
    So your thoughts as regards, how do we revive the fortune 
of community banks which, in my mind, is, how do we revive the 
economic prospects of rural America?
    Mr. Mnuchin. Well, thank you. And first of all, I enjoyed 
the opportunity to meet with you and talk about a bunch of 
these issues. And I think--as I have mentioned before, I am 
very concerned that we have been and continue to be in the 
business of putting community banks and small regional banks 
out of business, that the regulatory costs----
    Senator Cassidy. Can I interrupt for a second?
    Mr. Mnuchin. Of course.
    Senator Cassidy. One guy, I do not know what his bank is 
worth, $80 million, he told me that he had 64 regulatory visits 
in a 52-week period. The marginal cost for this small bank--he 
is thinking, why am I not selling? I am sorry, continue.
    Mr. Mnuchin. No, that sounds about right. From my 
experience, that is about the right ratio.
    So I agree with you completely. And as I have said, if we 
want to have economic growth--you know, for us to end up with 
four or five big banks in this country and to be dealing with 
the ``too big to fail'' and everything else, or the too big to 
succeed--we need to have banks. We need to have regional banks, 
we need to have community banks. Those banks understand the 
people in the community and can make good loans.
    Senator Cassidy. Now also, related to that and something 
you were speaking of, I think, with Senator Thune, it does not 
seem like we have an absence of capital in our society right 
now. We have a lot of capital.
    Mr. Mnuchin. That is correct.
    Senator Cassidy. It is just that we cannot get capital down 
to Evangeline Parish for somebody who is an entrepreneur to 
take that capital and to take his invention and bring 
prosperity to Evangeline Parish. And you do not need to know 
where Evangeline Parish is. The fact that you do not know shows 
that it is a smaller parish in terms of population. So I 
presume you agree with that.
    Mr. Mnuchin. I do completely.
    Senator Cassidy. Now, related to that, and again--this is 
something for my edification--I do not know the answer to this. 
But it strikes me that there are two possible goals of tax 
reform. One is to create more capital. I think under the Reagan 
tax cuts, my kind of gestalt of that period is that high 
marginal rates deprived capital to those who needed it. But it 
seems as if we have enough capital floating around, although 
perhaps chokeholded at certain points.
    And then the other point of tax reform would be to align 
incentives. You spoke earlier, I think with Senator Thune, 
about these pass-throughs. You want to incent folks to keep the 
money within the business.
    Mr. Mnuchin. That is correct: reinvest it and create jobs.
    Senator Cassidy. Now, would you agree with what I am 
saying? I am a gastroenterologist, you are the economist, and 
so I am kind of relying upon you here.
    Besides the two, is there a third reason to do tax reform? 
I guess fairness. So if you throw those all in, it seems as if 
capital, though, creation of capital, is the one which is not 
the priority so much as to align incentives to perhaps create 
certainty.
    Continue. You go.
    Mr. Mnuchin. I agree with you. But the only other thing I 
would say, because I do think we have a lot of capital in the 
United States now, is that we have a business tax system that 
is incenting companies, U.S. companies, to keep that capital 
abroad.
    So the other thing we want to incent as corporate behavior 
is, that money comes back to the United States, both now as 
well as going forward, and that money can be deployed to create 
new business here and create jobs, and that we stop things like 
inversions because it makes economic sense for U.S. companies 
to do business here.
    Senator Cassidy. So the incentives are both for the company 
to use their money more wisely, to invest it within to create 
jobs, but also to keep companies from moving abroad.
    Mr. Mnuchin. Correct.
    Senator Cassidy. On behalf of all those folks in Evangeline 
Parish and elsewhere who want to have prosperity, I thank you 
for your offer to serve, and I look forward to supporting your 
nomination.
    Mr. Mnuchin. Thank you very much. I appreciate that.
    The Chairman. Well, thank you, Senator; your time is up.
    Senator Warner?
    Senator Warner. Thank you, Mr. Chairman.
    And it is a pleasure to see you, Mr. Mnuchin, and I 
appreciated our visit. And congratulations on your nomination.
    I have a series of topics, so I am going to try to move 
quickly as well.
    The United States obviously enjoys enormous advantages, 
particularly around the status of us being the reserve 
currency. That allows us lower interest rates in everything 
from student loans to mortgages. Senator Bennet already raised 
this, but I am going to raise it again.
    The President-elect's comments about potentially 
renegotiating the debt, during the campaign, were 
unprecedented. I want you to again affirm to this body that on 
a going-forward basis it will be your policy, as much as you 
can influence the President-elect, that we would never again 
question America's willingness to stand by its debt 
obligations.
    Mr. Mnuchin. Senator, I agree with that 100 percent. And 
also, let me just thank you for meeting with me and also 
acknowledge, as an incredibly successful businessperson, that I 
appreciate your service here.
    Senator Warner. Okay. I do not want that to eat into my 
time.
    Mr. Mnuchin. Sorry.
    Senator Warner. I have been very troubled by even some 
folks in elective office who have somehow said we can ignore 
the debt ceiling without consequences. There are even some who 
are going out and saying somehow we could prioritize those debt 
obligations and potentially pay off bondholders, many of them 
foreign, many of them Chinese, and ignore our obligations to 
pay States, which would then affect their bond ratings, our 
ability to pay Social Security trust funds and to honor the 
commitments the United States government has made to pay 
salaries of FBI employees, et cetera.
    Is it your policy that the United States, in terms of its 
debt obligations, needs to honor all its debt obligations and 
should not have any ability to prioritize those obligations?
    Mr. Mnuchin. Absolutely. And I hope you will work with me 
so that we get that done. We have already spent the money, we 
have the obligations, there should be no uncertainty that we 
are paying the bills.
    Senator Warner. I think that is extraordinarily important. 
And those who somehow argue for prioritization--it would wreak 
havoc in the financial markets.
    I want to raise again what Senator Bennet raised. Clearly, 
if you get this role, words that you say and the President-
elect will say will have consequences. We have already seen 
this. The actions of the President-elect in terms of commenting 
on the strength of the dollar--unprecedented. No President, 
Democrat or Republican, has ever done this before. It has 
effects.
    Now, you will simply be a senior adviser in the Cabinet of 
the President. But how do we ensure, since words have such 
consequences, that there will be an ability for the Trump 
administration on economic policy to try to speak with a single 
voice?
    Mr. Mnuchin. Well, if I am confirmed, I think that once we 
all get in office and have regular access, both myself and the 
administration, I think you will see that. And again, there may 
be times where, you know, there is a view that the dollar is 
slightly too strong, but I do believe we will speak with a 
unified voice.
    Senator Warner. But do you then expect the President-elect, 
and then President, would continue to break all precedent and 
be willing to weigh in on these matters, unlike any prior 
President?
    Mr. Mnuchin. Well, look, as you know, this President is 
willing to do a lot of things that other Presidents have not 
done----
    Senator Warner. So I will take that as a ``maybe.''
    Mr. Mnuchin [continuing]. And I think many of them are 
great.
    Senator Warner. Let us move to another area. One area that 
I have had a huge amount of concern and interest in, and I know 
Senator Crapo and a number of us on this panel have, is on 
Fannie and Freddie. And I know there were some people who 
potentially interpreted some of your comments about recap and 
release, which would, in a sense say, even though the American 
taxpayer was paid back the $188 billion that we invested in 
those failing institutions at a moment of crisis, I think both 
of us would perhaps from our business standpoint say that was 
high-risk capital and we ought to get a better return, but 
somehow those people simply say, let us refloat these two 
entities and basically ignore some of the underlying 
challenges. Do you support that position of recap and release 
that some have advocated?
    Mr. Mnuchin. So, I mean, let me first be clear. I did make 
some comments about this. My comments were never that there 
should be recap and release.
    What my comments were--and first of all, I have been around 
the mortgage industry for 30 years. I have seen this for a long 
period of time, so this is an area that I do believe I have 
expertise in.
    For very long periods of time, I think that Fannie and 
Freddie have been well-run without creating risk to the 
government, as well as, they have played an important role.
    I know you are running out of time, but just bear with me. 
This is very----
    Senator Warner. Mr. Chairman, can I get an extra 30 
seconds, sir?
    The Chairman. Go ahead.
    Mr. Mnuchin. Can I just answer this so you get more time? I 
believe these are very important entities to provide the 
necessary liquidity for housing finance. And what I have 
committed to is that I will work with both the Democrats and 
Republicans.
    What I have said and I believe is, we need housing reform, 
so we should not just leave Fannie and Freddie as is for the 
next 4 or 8 years under government control without a fix. I 
believe we can find a bipartisan fix for these, so on the one 
hand we do not end up with a giant bailout, and on the other 
hand we do not run the risk of completely limiting housing 
finance.
    Senator Warner. I appreciate those comments. I look forward 
to working with you if you are confirmed.
    Mr. Mnuchin. Thank you.
    Senator Warner. Since you took most of the 30 seconds on 
your statement, I have two quick questions. Hopefully you can 
answer them with ``yes'' or ``no'' answers.
    One is, in light of those comments about recap and release, 
will you commit not to support any kind of administrative 
effort that would bypass the Congress in terms of efforts to 
recap and release?
    Mr. Mnuchin. So, again, I do not want to make any 
commitments to legislative action or not. What I will commit 
to--because it is my responsibility in Treasury, you know, as 
it relates to certain issues with Fannie and Freddie--what I 
will commit to is, it is my objective to find a bipartisan 
solution to it. And I would welcome the opportunity to sit down 
with you on that.
    Senator Warner. And your hope would be the bipartisan 
consensus that the Banking Committee in particular arrived at, 
which was that that solution--and we can argue or discuss about 
how we get there--should end up with a housing finance system 
that preserves things like the 30-year mortgage, but also makes 
sure that there is not the current status which has, when 
things are going well, private-sector gain, but when stuff hits 
the fan, leaves taxpayers holding the bag? So we would agree 
that----
    Mr. Mnuchin. I can 100-percent assure you that I have no 
interest in that. And I think I understand this well enough 
that you will find that I will not support any policy that 
makes that case.
    Senator Warner. Thank you, Mr. Mnuchin.
    The Chairman. Senator McCaskill?
    Senator McCaskill. Thank you, Mr. Chairman.
    Mr. Mnuchin, I found a tweet of your future boss that I 
agree with. ``Keep it fast, short, and direct, whatever it 
is.'' So that is what I am going to try to do.
    First, do you oppose lifting the current sanctions on 
Russia?
    Mr. Mnuchin. Right now I do.
    Senator McCaskill. You think we should lift the current 
sanctions on Russia?
    Mr. Mnuchin. No, no, I am sorry. I oppose right now lifting 
the current sanctions.
    Senator McCaskill. Do you support new sanctions against 
Russia, ``yes'' or ``no''?
    Mr. Mnuchin. The answer is, I do not have enough 
information. I have not been able to receive classified 
briefings. I would want to understand the classified 
information, and I would want to work with others to understand 
it. So I do not have an opinion right now as to whether we 
should have more.
    I do have an opinion that we should not be lifting the 
existing ones.
    Senator McCaskill. Would you agree that your new boss is 
famous for firing people?
    Mr. Mnuchin. Well, he has a show about it.
    Senator McCaskill. Okay.
    Mr. Mnuchin. But other than the show---- [Laughter.]
    Senator McCaskill. Do you think--well, it is a blurred line 
at this point. We are not sure where the show stops and where 
the reality begins. Do you think he will hesitate to fire 
people if he disagrees with them or believes they are doing a 
bad job?
    Mr. Mnuchin. Well, if he disagrees with them, no. And I can 
tell you, the President-elect and I have disagreed on things. 
Sometimes I have been able to convince him and sometimes I have 
not, and I have not been fired. If people do a bad job, 
absolutely he should fire them.
    Senator McCaskill. Will he be able to fire and hire the 
ethics officer?
    Mr. Mnuchin. The ethics officer as it relates to his trust? 
I have no idea. I am not----
    Senator McCaskill. Who would hire and fire the ethics 
officer if it was not him?
    Mr. Mnuchin. Again, I do not have access to the trust 
documents, and I do not know the answer to that.
    Senator McCaskill. Whoa, wait, we are not talking about 
trusts. We are talking about--he has said he is going to have 
an ethics officer to oversee him in the government. Who is 
going to hire and fire his ethics officer? Him?
    Mr. Mnuchin. It is a good question. I would be more than 
happy to ask him and talk to him about it and come back. I 
think you raise an important issue, and I think he will 
understand that. I do not have the answer.
    Senator McCaskill. He is not divesting any of his business 
interests, correct?
    Mr. Mnuchin. Correct. I believe he sold his public stocks 
and his other liquid investments, from what I----
    Senator McCaskill. I am talking about his business. Is it 
fair to characterize him as an international businessman?
    Mr. Mnuchin. I believe so.
    Senator McCaskill. Okay. And he will enjoy the benefits of 
his businesses' success while he is President. Correct?
    Mr. Mnuchin. Again, I believe he will do everything 
legally. And as it relates to international----
    Senator McCaskill. No, no, no, no, no. This is not my 
question. My question is, he has said very loudly he will go 
back to his business after he is President; in fact, he even 
said he would fire his sons if they had not done a good job. So 
whatever success his business enjoys during his presidency, he 
will get the benefit of, correct?
    Mr. Mnuchin. I missed the part about firing his sons, but 
that sounds like something he may have said. But yes, he is the 
economic owner, so by definition I would assume that he would 
have that----
    Senator McCaskill. His businesses in other countries and 
this country intersect with foreign countries. Do you agree?
    Mr. Mnuchin. So I have read, yes.
    Senator McCaskill. And is it not true that a lot of his 
debt is held by foreign interests?
    Mr. Mnuchin. I do not know; I have just read it in the 
papers.
    Senator McCaskill. Do you think you should know that, as 
someone who runs the Committee on Foreign Investments, if we 
are talking about the Commander-in-Chief? Should you, as 
Secretary of the Treasury, know what percentage of his debt--I 
am told by people who are familiar with his business that it is 
a huge percentage of his debt--is held by foreign interests?
    Mr. Mnuchin. Well, as I said, if I am confirmed, I assure 
you that I will make sure that the requirements of the 
Constitution are upheld. And I think you have a valid point 
about foreign debt and understanding foreign things. And if I 
am confirmed, I will research that and get back to you.
    Senator McCaskill. Okay. So what I want to get a commitment 
on from you today is that you will report to this committee 
what percentage of the debt against the Trump enterprises is 
held by foreign interests. That is your job as the Secretary of 
Treasury, and I would like your commitment that you will report 
to this committee as soon as you are able to get that 
information from the new President.
    Mr. Mnuchin. I am not making the commitment today to report 
to the committee on anything. But what I am willing to do is, 
to the extent I am confirmed, I am willing to speak to the 
chairman and make sure that whatever the committee thinks it 
needs I will discuss with the President.
    Senator McCaskill. Well, I can assure you, the American 
people need to know. And you in your job as Secretary of the 
Treasury--that is supposed to be determining national security 
interests based on foreign investment--the American people want 
to know how much debt that is owed by the Trump businesses is 
owed to foreign entities, because that could have a direct 
impact on our national security.
    Thank you, Mr. Chairman.
    Mr. Mnuchin. Senator, thank you. And I think you have asked 
some interesting questions, which I will follow up on.
    The Chairman. Thank you, Senator.
    Senator Burr?
    Senator Burr. Mr. Chairman, I would love for our staff to 
look and see if that is the responsibility of the Secretary of 
the Treasury to actually ask the President what percentage of 
foreign debt he owes.
    I do not think that is part of your job, Mr. Mnuchin.
    And let me say that your employment history is quite 
complex, probably the most complex I have seen of any nominee 
who is here.
    What I read into that is that you are sort of a roadmap for 
things that we need to do if the goal is a simpler, more 
transparent, understandable tax policy in this country.
    So let me ask you, do you pledge, do you commit to the 
committee, to work towards a simpler, more understandable tax 
code in this country?
    Mr. Mnuchin. I do, absolutely.
    Senator Burr. Do you commit and pledge to this committee to 
divest yourself of any assets that may be perceived as a 
conflict with the job that you are being considered for?
    Mr. Mnuchin. I have already agreed to that and signed the 
agreement with the Ethics Office.
    Senator Burr. Well, I know that. Many of the questions I 
have heard on this committee have suggested that the other side 
did not hear it. And I just wanted you to have an opportunity 
one more time to repeat it.
    Mr. Mnuchin, in April of 2014 the Treasury IG came out with 
a study. He found that the Internal Revenue Service has paid 
out $2.8 million in bonuses as well as tens of thousands of 
hours of leave and hundreds of pay-step increases to employees 
who were tax-delinquent or had committed serious misconduct, 
including fraud and drug abuse.
    More recently, in their April 2015 report, the Inspector 
General found that 108 of 364 employees with willful tax 
noncompliance cases closed between October 1, 2008 and 
September 2013 received one or more awards, promotions, quality 
steps, or voluntary separation incentive payments within a year 
after being disciplined for tax noncompliance.
    Will you commit to me today to change this policy, this 
insane policy at the IRS?
    Mr. Mnuchin. Absolutely. It sounds very concerning, so I 
commit to work with you and your staff on it, absolutely.
    Senator Burr. Thank you. In another report, December 2014, 
the Inspector General of the IRS discovered that they had 
repeatedly rehired employees who were fired for poor conduct 
and performance after lengthy examination processes on their 
employment. In fact, the Treasury watchdog found that in a 
sample of 7,163 employees who were rehired by the IRS, 824, or 
11 percent of them, had bad performance in their record as to 
why they were fired in the first place. And in some instances, 
it said in their records ``do not rehire,'' yet the IRS rehired 
them.
    Do you pledge to this committee to change that insane 
policy at the IRS?
    Mr. Mnuchin. That sounds like the most common sense I have 
ever heard. So yes, I absolutely am committed to that.
    Senator Burr. I appreciate it, because I think that, with 
all the questions you have been asked today and all the pledges 
you have been asked to make--I try to look for the value to the 
American people.
    The American people deserve better than this, because, in 
the private sector, you would not stand for this, would you?
    Mr. Mnuchin. Absolutely not.
    Senator Burr. You would not have a company that would pay 
people for nonperformance or poor performance. You would not 
reward individuals by rehiring them if in fact they did a poor 
job last time.
    And I think the American people look at insane policies 
like this and they really do question those who head agencies 
and, quite frankly, committees like this that have oversight 
over the agencies.
    So I go back to where I started. You have a very 
complicated and fascinating employment background that spreads 
to probably more areas than any of us can ever imagine. Do you 
pledge to use that experience to make the changes at the 
Treasury Department and within all the branches of the Treasury 
Department that the American people sense need to be changed?
    Mr. Mnuchin. Absolutely. It would be a great honor to lead 
the Treasury Department and work for the American people. And 
that is why I am here.
    Senator Burr. Thank you for being here today.
    I yield back.
    Mr. Mnuchin. Thank you.
    The Chairman. Senator Scott?
    Senator Scott. Thank you, Mr. Chairman.
    Mr. Mnuchin, good afternoon. Good to see you again. Thanks 
for coming by the office and having a good conversation about 
economic growth, which should be our focus as part of the 
Finance Committee and certainly the administration's focus as 
well.
    To follow up on some of Senator Burr's comments about a 
simpler tax code, when I think about many of the comments that 
I have heard from the President-elect as it relates to making 
sure that the folks working paycheck to paycheck experience a 
better quality of life, I think about the tax code. I 
specifically think about folks in South Carolina who are 
strongly in support of President-elect Trump, as well as places 
like Pennsylvania, Wisconsin, and Michigan where these folks 
who are working every single day long hours are barely making 
it.
    As we think about the tax code and reforming it, we can 
focus either on income or on capital. I would love to hear your 
comments on President-elect Trump's approach to reforming the 
tax code. Will the emphasis be on certain cohorts of the 
personal code, or will it be more on the capital process?
    Mr. Mnuchin. I think it is both. So I think we have an 
opportunity to reform the tax code--and we should all be 
focused on this--on both the personal side and the business 
side.
    And in many cases, I see them linked. There will be changes 
to the business tax code that will create more jobs and more 
income, but I think the overall goal, as we had an opportunity 
to discuss--and thank you for meeting with me--is to simplify 
personal taxes, deliver a middle-income tax cut, and make U.S. 
business taxes competitive with the rest of the world so that 
we can compete effectively and aggressively and create more 
jobs. This is all about creating better economics and more jobs 
for the American public.
    I am very concerned about the number of jobs that have been 
lost, the decrease in manufacturing, the number of people who 
have left the workforce. These are all very concerning issues. 
And when you just look at the unemployment rate, that 
absolutely does not tell the story of what is going on in this 
country.
    Senator Scott. Following on that same thread, when you 
think about simplification of the tax code--and in order for us 
to get to a lower rate, we are going to have to have a serious 
conversation and perhaps a challenging conversation about the 
expenditures in the tax code--I hope the administration plans 
to treat very carefully the mortgage deduction and the 
charitable deduction going forward.
    I know that the House plan, I believe, capped the mortgage 
deduction at a home value of around $1.1 million. I saw at 
least in your political document that the approach that you 
guys were taking had more to do with the interest that you pay 
and not the actual value of the home.
    So I do not need a comment right now, but I hope that you 
would take seriously the importance of those two deductions, 
from my perspective.
    Also, I think if we lower the corporate rate, certainly we 
will become more competitive. I am not sure that just lowering 
the corporate rate actually stops inversions. Your thoughts?
    Mr. Mnuchin. I think it absolutely has a huge impact on 
stopping inversions. So I think there are some other things 
that we may be able to do, but I think the biggest issue that 
creates inversions is the incentive for much, much lower taxes 
abroad than we have here.
    Senator Scott. Well, there is no question that if we can 
get our 35-percent highest-in-the-world corporate tax down to 
something that is competitive, that would be wonderful.
    Mr. Mnuchin. Absolutely.
    Senator Scott. But to stop the inversions, we will probably 
have to go to a place we cannot get to to be competitive with, 
I do not know, a 12.5-percent rate or now the innovation box is 
at 10 percent. Whatever we can do to become competitive will be 
helpful, but I do believe that we are going to have to look for 
other remedies outside of the tax code in order for us to sell 
perhaps that the haven of America is a great place to do 
business beyond the tax code itself.
    But speaking of that simpler tax code, I have--and we have 
spoken before about it--legislation that I have sponsored 
around investing and opportunities. It essentially defers the 
capital gains tax for up to 7 years if you reinvest those 
resources into distressed communities.
    We have 50 million Americans, more than a million South 
Carolinians, living in distressed communities. I think one of 
the goals I hope that we have is to look for ways to create 
incentives for private capital to come back into distressed 
communities. I would love to hear your comments on that.
    Mr. Mnuchin. Yes, absolutely. As a matter of fact, I have 
in my notes here the Investing in Opportunity Act that we 
talked about.
    Senator Scott. I am glad you are supporting it. Thank you 
very much.
    Mr. Mnuchin. And I want to follow up with you and learn 
more about it. And whether we use that or whether we use other 
tax incentives, I think it is absolutely critical that the 
areas that are most struggling, that we use the appropriate 
incentives to get business to go there. So I will definitely 
look forward to following up with you on that.
    Senator Scott. So, one more question, Mr. Chairman?
    The Chairman. Go ahead.
    Senator Scott. Thank you, sir. I thought that was a ringing 
endorsement for the Investing in Opportunity Act. I will just 
take it as that, from my ears, not necessarily from what you 
said.
    But on the trade policy, South Carolina has been a place of 
a provocative position on trade. We were a haven for 
manufacturing a hundred years ago; we are today a haven from 
the high-tech manufacturing perspective.
    Trade agreements are a very important part of what makes us 
successful attracting brands like Boeing, Michelin, 
Bridgestone, Caterpillar, BMW. So trade is very important to 
the State.
    I know that you guys are moving away from multilateral 
agreements towards bilateral agreements. I hope that that 
bilateral approach will include some of the countries and the 
growing markets around the world, specifically within the TPP 
footprint.
    Mr. Mnuchin. Absolutely. And as I said, you know President-
elect Trump absolutely believes in trade. He just wants better 
deals. So he wants us to grow exports, and he wants better 
deals.
    Senator Scott. Thank you, Mr. Chairman.
    The Chairman. All right. We have two more to go here. Can 
we finish up with those two?
    Mr. Mnuchin. Absolutely; let us keep going, please.
    The Chairman. Okay. And then we will take a short break and 
then give you a little bit of time, and then we will come right 
back.
    Senator Portman and then the Senator from Washington.
    Senator Portman. Thank you, Mr. Chairman.
    And, Mr. Mnuchin, thank you for being here. But I think it 
is your kids who deserve the award for stamina. [Laughter.]
    My kids at that age would have been long gone, so whatever 
you have done, you have done a good job.
    Mr. Mnuchin. I told them they could leave after an hour, 
but they actually opted to stay.
    Senator Portman. Yes. Well, good for you guys.
    Listen, I think you are right about the fact that the tax 
code is an opportunity for us to help give the economy a shot 
in the arm.
    And just to put a finer point on it, you know median income 
has not gone up when you look back at the pre-recession levels. 
And that is the middle-class squeeze, that and the higher 
expenses, including health care.
    And then in terms of unemployment, you are right. If you go 
back to the labor force participation rate that was in effect, 
about 66 percent before the recession, and you compare it to 
today, unemployment would be about 9.5 percent. So this economy 
is not humming, we are not doing great, and we are not serving 
middle-class families who are struggling to make ends meet.
    And I think tax reform is one way within your purview that 
you can make a big difference here. And I appreciate what you 
said in response to Senator Scott on that, because I do think 
we should be focusing on wages, not just overall economic 
growth but how to ensure that we are creating opportunities for 
the families we represent.
    One thing you did not talk about, at least I did not hear 
you talk about when I was here, is on the business side: 
repatriation. So you can lower the rate, and I think that is 
important, having the highest rate in the world. But do you not 
think there is an opportunity to repatriate some of those 
profits that are now locked overseas?
    The number I hear is over $2 trillion. What is the number 
that you believe and what can be done to bring that money back 
here to invest in jobs and plant and equipment?
    Mr. Mnuchin. Well, I can tell you the President-elect 
thinks that we are going to get over $3 trillion, so his number 
is $3 to $4 trillion. So we are getting a lot of money back.
    I have spoken to several CEOs who, you know, want to bring 
money back. So to the extent that we create a one-time 
repatriation in the Trump plan--we had put that at 10 percent. 
I think the House GOP plan had that slightly lower.
    But I absolutely believe, and I have heard CEOs say this--
and some of them are, without naming names, some of the biggest 
holders of cash abroad--they absolutely want to do it, and we 
are committed to that.
    Senator Portman. You are committed to working with us to be 
sure we can do that?
    Mr. Mnuchin. Absolutely.
    Senator Portman. And I think this has bipartisan support 
here. And you know we need to invest those funds back here, 
including for things like infrastructure.
    With regard to trade, there has been some discussion I 
heard on trade. As you know, I believe in expanding exports. I 
am a former U.S. Trade Rep. And I think we are not doing enough 
there.
    But I also believe in a level playing field. And one area 
where we have had a lot of contention is on currency 
manipulation. We tried in the legislation called Trade 
Promotion Authority to get that done. Senator Stabenow and I 
actually introduced an amendment which came close, but we did 
not quite get it done, to make it a trade objective in our 
trade negotiations.
    But we did pass something in the Customs bill that directly 
relates to your job. It says that Treasury has enhanced 
authority to take action on this. There are some conditions 
that have to be met that, frankly, trade manipulators will 
meet. And at the end of the day, if a country fails to change 
its policies, the Treasury Secretary can recommend the 
President take action, such as prohibiting the Federal 
Government from procuring goods or services from that country, 
or calling for formal consultations on findings of currency 
manipulation at the IMF, the International Monetary Fund.
    If confirmed, would you commit today to take full advantage 
of that enhanced authority we have given the Department of 
Treasury?
    Mr. Mnuchin. Absolutely. I think that is very important.
    And in particular, I just want to point out and thank you--
I know you have taken the opportunity to meet with me several 
times. And I enjoyed our working lunch yesterday in your 
office. And we have talked a lot about these issues. And I am 
absolutely committed to work with you on this, and this sounds 
like a very important issue.
    Senator Portman. Again, I think it is one issue where there 
is some bipartisan agreement about the need to address currency 
manipulation. And I appreciate your commitment to use the 
authority we have given you and work with us on other 
authorities.
    Another topic I want to touch on is the IRS. I understand 
there was some discussion when I had to step out to another 
hearing regarding funding for the IRS. I heard what Senator 
Burr said about some of the examples of IRS's poor management, 
including promotion policies. Obviously, we know that there 
were politics involved in the IRS, that they were making 
decisions based on political matters, which is totally 
inappropriate for a tax collection agency. So the IRS has 
created huge problems by the way it has not performed in a way 
that anybody would expect as a taxpayer.
    On the other hand, by understaffing and underfunding the 
IRS, taxpayer service has been eroded, and that affects my 
constituents in very direct ways.
    Are you committed to trying to fix these problems at the 
IRS, but also working with us to ensure that there is adequate 
funding and support so that the tax system can work better, 
hopefully under a very simplified tax code?
    Mr. Mnuchin. Absolutely. And this is something I feel very 
strongly about, and it is something that I hope we do have 
bipartisan support on, because this is one of the areas where I 
think we will all agree: to the extent we add resources, we can 
collect more money.
    One of the things I have heard is, one of the reasons why 
we have technology problems is because, based upon the 
guidelines, we cannot afford to hire technology people 
internally.
    While I think there is some external technology needed, I 
think we need to have internal expertise in the IRS to manage 
our own technology systems.
    And I think in this day and age, like any other entity, we 
need to have good customer service, that if people are paying 
taxes, they have the right to get the information, they have 
the right to understand their information.
    I think that we should be able to interact electronically, 
securely, keep people's information safe. I can go online and 
look up my real estate tax bills in California and see my 
information there. I do not see why we do not have good systems 
where people who pay taxes can see their information securely 
online.
    So I look forward to working with you. And I also think 
that we should be monitoring customer satisfaction. Like 
anything else, we should understand what the taxpayers think of 
the service we provide them.
    Senator Portman. I know my time is up, Mr. Chairman. I 
would just say that the chair and ranking member, I would 
assert, agree with me on this, but additional focus on the IRS, 
I think, is an opportunity for us.
    And 19 years ago, there was this reform effort. I co-
chaired it with Bob Kerrey, who was a Senator at the time; I 
was a House member. Every 20 years, it probably ought to be 
looked at, you know, including the technology. And I think this 
is an opportunity here. I appreciate your comments on that 
today and appreciate your being here today, Mr. Mnuchin.
    The Chairman. Thank you, Senator.
    Mr. Mnuchin. Thank you, and I look forward to working with 
you on it.
    The Chairman. Senator Cantwell?
    Senator Cantwell. Thank you, Mr. Chairman.
    And, Mr. Mnuchin, I caught some of your testimony, but I 
apologize for being at the hearing with Energy Secretary 
Governor Perry for most of the morning, so I missed most of 
your----
    Mr. Mnuchin. I appreciate it is a busy day and you are 
accommodating lots of us, so thank you.
    Senator Cantwell. Thank you.
    I wanted to ask you, do you support returning to Glass-
Steagall?
    Mr. Mnuchin. I do not support going back to Glass-Steagall 
as is. What we have talked about with the President-elect is 
perhaps we need a 21st-century Glass-Steagall. But no, I do not 
support going back as is, of taking a very old law and saying 
we should adhere to it as is.
    Senator Cantwell. And so, is that the position of what the 
Republican platform was? Because I thought it was Glass-
Steagall.
    Mr. Mnuchin. Again, the Republican platform did pass Glass-
Steagall at the convention, and the President-elect, when we 
talked about policy with the President-elect, his view is that 
we need a 21st-century Glass-Steagall.
    Senator Cantwell. So when did that change?
    Mr. Mnuchin. Oh, that has been, again, that has been part 
of the campaign. It has been in some of his speeches.
    Senator Cantwell, So, what, like, October?
    Mr. Mnuchin. I do not remember.
    Senator Cantwell. But after the convention? At the 
convention, it was Glass-Steagall.
    Mr. Mnuchin. At the convention, the Republican position was 
Glass-Steagall.
    Senator Cantwell. And so his position was never Glass-
Steagall, is that what you are saying? Or all along he meant a 
different version?
    Mr. Mnuchin. Again, I can only tell you that, post-
convention, this is an issue that he and I have discussed and 
something that we will be looking at, but not----
    Senator Cantwell. And do you think that Mr. Manafort's 
leaving had anything to do with the change?
    Mr. Mnuchin. No.
    Senator Cantwell. Okay. So you think that--to me, this is a 
very important issue. In fact, I would say at some point in 
August that the Republican platform had a stronger position on 
Glass-Steagall than the Democratic platform. But now I 
understand that the President-elect does not really support 
Glass-Steagall, he supports some modern version, which I do not 
understand, so maybe you could help me. Tell me what that 
modern version is.
    Mr. Mnuchin. Again, I think that separating out banks and 
investment banks right now under Glass-Steagall would have very 
big implications to the liquidity in the capital markets and 
banks being able to perform necessary lending.
    I think, in terms of looking at a lot of regulatory issues, 
the administration will look at Glass-Steagall and what I refer 
to as the 21st-century Glass-Steagall and, as part of 
regulatory form, have a view as to what is appropriate.
    Senator Cantwell. So I just want to be clear, because I 
think in your testimony I heard you allude to the damage that 
was caused by the implosion of our economy brought on by toxic 
financial instruments that did not have the backing that they 
needed. According to the Dallas Fed, it is a $14-trillion hole 
in our economy. So I think you alluded to the damage that that 
caused.
    So now, I think you answered--or at least some of the notes 
I have here about some of my other colleagues' questions 
indicate--that you believe the concept of proprietary trading 
does not belong with a bank.
    Mr. Mnuchin. That is correct.
    Senator Cantwell. Okay. So where does that go then? So you 
are saying you do not think that today there is a clear 
prohibition and you want to see a clear prohibition?
    Mr. Mnuchin. No, no. What I said is that in the Volcker 
Rule--today we have a prohibition on proprietary trading in 
banks.
    Senator Cantwell. With loopholes. With loopholes.
    Mr. Mnuchin. The problem that we have is that the 
definition of that was left to the regulators to decide. And so 
the first issue is--and again, I am a believer in proper 
regulation, but I am also a strong believer that people need to 
understand the regulation. So we need to be able to explain to 
banks what is proprietary trading and what is not proprietary 
trading.
    I think we would all agree that if we were all sitting in 
this room and just betting on things, that is proprietary 
trading. What I referenced is, the Federal Reserve had their 
own independent report on a lack of liquidity in many of the 
important markets.
    So what I am in favor of is that we have clear definition 
around the Volcker Rule and that the regulators come out with 
that and do it in a way so that it does not eliminate liquidity 
in many of the important markets.
    Senator Cantwell. So you would basically just tighten what 
you think are the rules that are out there. So you would lessen 
the rules that are already passed in Dodd-Frank.
    Mr. Mnuchin. No, that is not what I have said. I want to be 
very clear. What I have said is that I support the Volcker 
Rule, but there needs to be proper definition around the 
Volcker Rule so that banks can understand exactly what they can 
do and what they cannot do and that they can provide the 
necessary function of liquidity in customer markets.
    And again, I am referencing a problem that the Federal 
Reserve has independently raised.
    Senator Cantwell. Well, I think, to me, I think this 
election was a lot about the frustration of the American people 
on the implosion of our economy and the fact that they have not 
recovered. And I think that the President-elect, whether he 
directly or not meant to--I was pleased that his party adopted 
coming up with a very bright line separating commercial from 
investment banking.
    So now, I think where we are today--we are not sure. 
Hopefully we will get a chance to vote on this, all our 
colleagues, now that our colleagues have to answer to platforms 
and committees. Hopefully we will get an answer as to where our 
colleagues are on this.
    But I will tell you that not only is this an issue of 
people wanting to see a bright line and be protected from this 
ever happening again, when it comes to the tax code and the tax 
policy, the American people have not recovered.
    So lowering the corporate tax rate without getting a plan 
for the average American who lost pensions, could not send 
their kids to school, maybe lost their home--what is the tax 
policy that the President-elect and you are going to pursue 
that is going to help restore them from that major implosion 
and protect them from this ever happening again?
    Mr. Mnuchin. Well, let me just tell you, from having 
traveled with the President-elect for the last year, I 
absolutely understand why he got elected, and that is because, 
as you point out, the average American worker has gone nowhere. 
The unemployment rate is not real. The average American worker 
has gone nowhere, and the President-elect is committed, as am I 
as his economic adviser, to work for the American people and 
grow the American economy so that the average American worker 
does better.
    And that is why I have been willing to sell all my 
investments, I have been willing to give up my businesses. My 
desire is to work for the American people to create a better 
economy, and I understand that.
    I have traveled for the last year. I have seen this. And 
the 
President-elect understands that very clearly.
    Senator Cantwell. And so just one question on that, and I 
know my time has expired.
    So did you mention what tax break policy you would give to 
that American worker?
    Mr. Mnuchin. Absolutely. We have specifically said the 
objective is to create a middle-income tax cut and to create 
business taxes that incent businesses to grow and make 
businesses more competitive and hire more people and create 
more jobs here.
    Senator Cantwell. So not specific to education or pensions 
or anything--a broad tax break to folks?
    Mr. Mnuchin. Well, as we had a chance to talk about, I 
think pensions are a very important issue.
    Senator Cantwell. Thank you.
    Mr. Mnuchin. And, you know, I would be happy to work with 
your office another time. I think that the people who have 
earned pensions absolutely deserve to have those pensions 
maintained and be safe. And I am very concerned about the 
retiree issue in this country, and that is something that I 
look forward to working with you and others on.
    Senator Cantwell. Thank you.
    Mr. Mnuchin. We need to protect the pension-holders in this 
country.
    Senator Cantwell. Thank you.
    Thank you, Mr. Chairman.
    The Chairman. We are going to take a 10-minute break here. 
My friends on the other side have requested a second round, and 
we are going to grant that. And so let us just recess for about 
10 minutes, maybe a little longer.
    [Whereupon, at 1:35 p.m., the hearing was recessed, 
reconvening at 1:50 p.m.]
    The Chairman. My colleagues have asked for a second round, 
and we are going to do that. But I hope people will help us to 
move this along, so I will reserve any comments that I have to 
make.
    Senator Wyden?
    Senator Wyden. Thank you very much. Let us go back to the 
Mnuchin Rule, if we could, Mr. Mnuchin. Let us say Congress 
proposed a policy that cut payroll and investment taxes for the 
top 1 or 2 percent of Americans while eliminating tax credits 
for those with low or middle incomes. That sure looks to me 
like a violation of what we agree is going to be called the 
Mnuchin Rule: no absolute tax break for the wealthy. Do you 
agree with that?
    Mr. Mnuchin. So again, I think we want to work on 
bipartisan tax reform.
    Senator Wyden. That is very specific, and I am asking it 
for a reason. I do not want to have to repeat it. If you have a 
policy that cuts payroll and investment taxes for the top 1 or 
2 percent while eliminating the credits for those who are low- 
and middle-income, does that not violate the Mnuchin Rule?
    Mr. Mnuchin. Again, I think we need to look at the overall 
tax plan, okay? And as I said, the primary objective is to 
deliver a 
middle-income tax cut and tax simplification on the high end. 
That is our objective.
    Senator Wyden. You are already fudging on this commitment 
that you made to the American people that you would not give an 
absolute tax break to well-to-do people. And the reason I am 
asking this is because this is exactly what ACA repeal was all 
about in the last Congress. And every single Republican up here 
voted for it.
    So I hope you will think this over, but this is exactly 
what troubles me. We have two tax systems in America. We were 
nudging our way, saying maybe you would not give a break to the 
well-to-do. I am asking you about a specific situation and you 
said, gee, I do not know, we will have to go and see.
    Now, let me turn to a second area that working-class people 
care a lot about, and it involves their purchasing power. There 
are a lot of questions about the 35- to 45-percent border tax 
that the 
President-elect is doing a fair amount of tweeting about. Could 
you tell the American people what products would be subject to 
this tax?
    And I am not interested now in all the complicated theories 
about the dollar. I think it is a question worth talking about 
and the like. But Americans want to know what products would be 
subject to it. Working-class people want to know. Is gas going 
to be part of this? I mean, give me your response to this. Are 
there any products that are going to be exempt?
    Mr. Mnuchin. Well, first of all, thank you, and I think 
that is an important issue. And I think that this week the 
President-elect came out and suggested that he had concerns 
about the House GOP border-adjusted tax. And part of it is the 
complexities around it, and part of it is the----
    Senator Wyden. I am not talking about what the House is 
doing with border adjustment. I want to hear about the border 
tax the President-elect has been talking about.
    Mr. Mnuchin. He has not suggested a border tax. What he 
suggested is that for certain companies that move jobs, there 
may be repercussions to that. He has not suggested in any way 
an across-the-board 35-percent border tax, and if anything, 
quite the contrary.
    As you said, he has concerns about things that impact the 
price of gasoline and other commodities.
    Senator Wyden. So what products would be off the table for 
purposes of what I call a border tax and you want to say is 
kind of something else? What products that working-class people 
buy would be exempt?
    Mr. Mnuchin. Again, I think when he has referred to a 
border tax, he has referred to a small number of companies that 
have moved their jobs, or are moving their jobs, putting 
products back into the United States, taxing them.
    So he has in no way contemplated a broad 35-percent border 
tax. That could not be further from anything he would possibly 
consider.
    Senator Wyden. Let me turn to another topic of tax policy, 
because we are trying to gather at least a bit of information 
about how you would deal with some of these common tools that 
would be in your jurisdiction if confirmed as Treasury 
Secretary.
    Now, inequality has grown substantially over the last 30 
years. There has been bipartisan support in the past for the 
Earned Income Tax Credit. There are a number of proposals 
pending now in the Congress. Do you have any thoughts on that?
    Mr. Mnuchin. Again, first of all, as I suggested to you 
when we met, I hope we can sit down and talk about taxes with 
Democrats and Republicans and see where we can agree on 
bipartisan solutions.
    As it relates to any specific component of this, I think we 
need to look at the overall tax reform that we are going to put 
through and where things fit in it. But I would welcome the 
opportunity to follow up with you and work on that.
    Senator Wyden. Mr. Mnuchin, again, I want to be respectful 
on this point, because you have not been involved in these 
policy fields in the past, and I respect that because there is 
lots of leadership that a person still can provide. When I 
asked about Medicare--you would be the managing trustee--you 
really did not have any thoughts on that.
    I just asked you about the Earned Income Tax Credit--
tremendous interest among Democrats and Republicans. I gather 
you are not aware that the Speaker has long been advocating 
some improvements that Democrats are interested in.
    And I will tell you--we are going to have, I guess, the 
chance to go into some other questions--I am very troubled 
about the fact that regarding these basic tools that you would 
have, if confirmed, you seem almost unscathed by the subject.
    So thank you, Mr. Chairman.
    Mr. Mnuchin. Well, I am sorry that you are troubled by 
that. I hope I earn your support and respect and that you are 
not troubled going forward, if I am confirmed.
    It is not that--again, on the Earned Income Tax Credit, I 
do not want to comment on specific legislation on tax. I think 
that tax reform needs to be looked at as an overall policy. And 
I have laid out a certain framework for what I believe the 
President-elect believes in for tax reform, without commenting 
on specifics.
    Senator Wyden. I am over my time for this round. I hope, 
because I am interested in those discussions with you about tax 
reform, you are not talking about putting the Earned Income Tax 
Credit on the table as something you might throw in the trash 
can, because if you do, you are going to have opposition from 
me, and you are going to have opposition from the Speaker of 
the House.
    Thank you, Mr. Chairman.
    Mr. Mnuchin. I am not suggesting that. I was just saying I 
was not going into the specifics of every single tax item. 
Thank you.
    The Chairman. Okay. Senator Crapo?
    Senator Crapo. Thank you, Senator Hatch.
    Mr. Mnuchin, I want to try to cover three quick, maybe not 
so quick, questions. The first one is to return back to the 
discussion you were having with Senator Warner about Fannie Mae 
and Freddie Mac and GSE reform, housing policy reform.
    I am sure you are aware that Senator Warner and I and a 
number of other Senators on the Banking Committee have worked 
for some time on legislation to try to deal with this 
circumstance.
    We currently have a situation in which Fannie Mae and 
Freddie Mac are in receivership. The Federal Government 
basically is running them. And the concern that I believe 
Senator Warner was referencing was a concern that the 
administration--not because we are afraid of anything, just 
because we are asking, we are trying to find out--that the 
administration may either believe that it is okay to keep them 
in receivership and just continue to run as is with the status 
quo or perhaps to simply recapitalize them and put them back 
out into the market without any housing reforms.
    And I just wanted to ask you if you would--I realize you 
cannot comment on a specific plan yet, but if you would comment 
as to whether you believe that we need to have reform in our 
housing finance policies that would go further than simply 
recapitalizing Fannie and Freddie or keeping them in 
receivership.
    Mr. Mnuchin. Okay. Well, again, thank you for that. And I 
would comment, unlike the Medicare fund, where I acknowledge I 
am not an expert, I think on Fannie Mae and Freddie Mac, I am 
an expert. I have been around these for 30 years. I understand 
these very well. And that is why it would be one of my 
priorities to work with you.
    And as I have said, what I am focused on is, we need 
housing reform and a solution. So I start from the standpoint 
that the status quo is not acceptable of just leaving them 
there.
    Senator Crapo. I appreciate that.
    Mr. Mnuchin. I think, as you know, as we have discussed, 
there are two extremes on this. And it is something that I look 
forward to sitting down and talking to you about. But I believe 
we need housing reform and we need to make sure that whatever 
the outcome is on the two extremes that, one, we do not put the 
taxpayers at risk and, two, we do not eliminate capital for the 
housing markets.
    Senator Crapo. Okay.
    Mr. Mnuchin. I am very concerned that middle-income people 
and moderate-income people who need mortgage loans have access 
to that capital.
    Senator Crapo. Well, I appreciate that and, in fact, I 
agree with you on both of those objectives, and I think that is 
exactly what we need to work together to identify.
    Mr. Mnuchin. Good. Well, I am optimistic we can work 
together and hopefully figure out a bipartisan solution. Thank 
you.
    Senator Crapo. Thank you.
    My second question is--you have already answered it, but I 
just want to raise it again because it is so important, and 
that is, we have seen the unfortunate circumstance, in my 
opinion, in the last few years, of the IRS actually targeting 
individuals because of what they believe and how they advocate 
in our society.
    And you have already talked about this, but I would just 
encourage you to make a high priority that not only the IRS, 
but all of the Federal functions under your jurisdiction as 
Secretary of Treasury, which I am sure you will be confirmed to 
be, are stopped from that kind of targeting of American 
citizens who are conducting perfectly legal business and 
engaging in perfectly free and legal speech.
    Mr. Mnuchin. You have my 100-percent assurance that I will 
do that. I think there is no place in not only the Treasury, 
but in other agencies, for us to be having people act that way.
    Senator Crapo. All right, thank you. Then my last question 
in this round would be back to the tax issue.
    One of the big issues that I think we must grapple with, 
and I would just like your ideas on it, is that, as I am sure 
you know, a huge percentage, in fact a significant majority, of 
the business entities in the United States pay tax through the 
individual income side of the code rather than the corporate 
side of the code.
    And as we reform, as we should, our corporate code and 
engage in individual tax code reforms, I am concerned that we 
do not end up with a significant bifurcation between different 
business entities in the United States as to the tax burden and 
the tax rates that they pay. Could you comment on that?
    Mr. Mnuchin. Sure. And I, too, think that that is an 
important issue. And again, for large companies that are in 
pass-through form today, the reason why large companies are in 
pass-through form is because they look at the personal income 
tax rate and they compare it to the corporate rate and the 
dividend rate.
    So I think for many large companies that are structured as 
pass-throughs, they will opt to take the business tax, and we 
will figure out a simple system, nonbureaucratic: you check the 
box, you get the business tax; you leave the money in the 
company, you grow your company, you get the lower business tax. 
If you distribute it out, you pay dividends.
    And I think that that is something that is critical.
    And as I have said, we will make sure that we work with 
Congress to make sure that we close loopholes so rich people do 
not use this as a way to get a lower business tax. And on the 
other end, we will make sure that small businesses are 
protected as well--legitimate small businesses----
    Senator Crapo. So the small businesses do not pay an 
incrementally higher tax just because they choose not to engage 
in the corporate form.
    Mr. Mnuchin. Correct. And that is something that we look 
forward to working with you on, on the details of how we can 
make sure that is preserved.
    Senator Crapo. All right, thank you very much.
    Thank you, Mr. Chairman.
    The Chairman. Thank you, Senator.
    Senator Nelson?
    Senator Nelson. Thank you, Mr. Chairman.
    Mr. Mnuchin, you no doubt are aware that one of the things 
as Treasury Secretary you will have to face is the multi-
employer pension funds that are in dire straits. These are ones 
that have become unstable, and they are pension plans for 
people like truck drivers and carpenters and miners.
    And the Treasury Secretary has the authority to temporarily 
or permanently reduce the pension benefits if the plan is 
projected to run out of money. Therein, there are two bad 
outcomes. One, it is running out money and, two, you are going 
to be faced with the problem of what to do about it.
    These are folks who are living on the edge. And a reduction 
of the pension is going to mean something that they have to go 
without. What do you think about this? And how would you 
approach this heart-wrenching issue?
    Mr. Mnuchin. Well, I appreciate your concern. And we had 
the opportunity to talk a little bit about this when we met. 
And I believe your office followed up and sent me some 
information on this. So it is something that I look forward to 
working with you on.
    And let me first say I think that people who have worked 
very long periods of time and have built up a pension deserve 
to get their pension. That is very important.
    On the other hand, we have to be careful that, on the other 
extreme, we do not have a bailout of the entire pension 
industry and bankrupt the guarantee fund.
    But I commit to work with your office. I understand these 
issues. I understand the sensitivity of these issues. And I 
share your concerns that cutting truck drivers' pensions and 
other people's is a very significant outcome. And we should go 
to great lengths to figure out if there are other solutions 
before we do that.
    Senator Nelson. Since folks like you and me have been 
blessed, we have not often had to walk in the shoes of folks 
like that who are living on the edge.
    Mr. Mnuchin. I completely understand.
    Senator Nelson. And I ask that, in your position with this 
awesome authority as Treasury Secretary, that you put yourself 
in those shoes.
    Another financial disaster is what is happening in Puerto 
Rico, not only because of what they are at fault about, but 
also in the unequal way that they have been treated by the law, 
quirks in the law, and I do not understand how they ever got 
that way. They are not treated the same on bankruptcy laws, 
they are not treated the same on Medicare and Medicaid laws.
    And they have a particularly tragic situation where they 
were given a block grant of Medicaid money that is running out 
this year, while at the same time one-third of the island's 
residents are infected with Zika. And we know that 15 percent 
of those infected with Zika, if they are pregnant, there is a 
15-percent chance that they are going to have a deformed child. 
I would like very much for you to keep that in mind because we 
have to come up with a plan.
    Now, I know a lot of responsibility is on us in the 
Congress. The chairman led an effort and we tried to get some 
things passed in December. But the big things, like Medicaid, 
are coming up in the future.
    Mr. Mnuchin. Well, Senator, first of all, thank you for 
going through that. And when I did have the opportunity to meet 
with Secretary Lew and talk about certain issues that he wanted 
to advise me on and bring to my attention that he thought I 
would have to deal with in the near future, Puerto Rico was 
high on that list. So I must say, I was not an expert on Puerto 
Rico before the last 30 days. I have started studying this 
issue, and I share your concerns.
    I am glad that the commission was established. I think that 
I understand that the Treasury has been staffing the 
commission. I have someone whom I have already asked 
internally, who is going to be working with me, to start 
working on this and get debriefed by the Treasury staff on 
this. And this is going to be something that we need to figure 
out a bipartisan solution for.
    I am hoping that it can be done in the context of the 
commission, but I look forward to working with you on it.
    Senator Nelson. Thank you, Mr. Chairman.
    The Chairman. Thank you. Senator Menendez?
    Senator Menendez. Thank you, Mr. Chairman.
    Mr. Mnuchin, I have listened to your responses to my 
colleagues, defending OneWest's more than 50,000 foreclosures 
on your watch. And I understand you bought a bad book of loans.
    And I do not think we are saying that you had to save every 
single homeowner. But by taking the FDIC's backstop, you had an 
obligation to at least try. So do you believe that you made 
every effort to prevent foreclosures and keep families in their 
homes?
    Mr. Mnuchin. I do. And I actually brought with me--if you 
want to make it part of the record--the FDIC asked the 
Inspector General, the OIG, to come in and look at the loan 
modification program----
    Senator Menendez. So you believe you did----
    Mr. Mnuchin [continuing]. And they independently reviewed 
that and that was verified by the OIG and the FDIC.
    Senator Menendez. Well, I do not know that their 
determination is that you made every effort. Let me just say, 
what about----
    The Chairman. Without objection, we will make that part of 
the record.
    Mr. Mnuchin. Thank you.
    [The report appears in the appendix on p. 137.]
    Senator Menendez. What about one of your vice presidents 
actually admitting to robo-signing 750 foreclosure documents a 
week without even reading or reviewing them? How can that be 
considered making every effort to prevent foreclosures? Can you 
honestly say your bank made every effort to keep families and 
seniors in their homes when they were robo-signing one 
foreclosure document every 3 minutes?
    Mr. Mnuchin. So, Senator, yes, I can absolutely say that we 
made every effort. And again, our loan modification programs 
were audited by the Treasury, the FDIC, the OCC. You can 
imagine, being a private equity person who bought a bank, we 
lived in a glass house, and we were constantly viewed by the 
regulators.
    Now, the comment that you are making--there was an industry 
issue which had nothing to do with loan modification, which had 
to do with the processing of foreclosures. That was a procedure 
that was started at IndyMac; it was continued under the FDIC 
ownership. And in the beginning of our ownership, we 
unfortunately did not change certain procedures, as I have 
said. It was solved, and we were the only----
    Senator Menendez. I am not worried about the industry. I am 
worried about your direction at your bank. You keep referring 
to entities. The Office of Thrift Supervision hit you with a 
consent order because you were actually putting homeowners on a 
fast track to foreclosure. And that was part of that 750 
foreclosures a month.
    You also had an independent government audit of OneWest's 
foreclosures in 2009 and 2010 that alone identified more than 
10,000 homeowners who were owed $8.5 million in damages. And 
among those homeowners were 54 incidents over the course of 
just 2 years where the bank violated the rights of active duty 
military service men and women, those defending our country 
across the globe, under the Service Members' Civil Relief Act.
    So if you did all of that, how is it that you feel that you 
can honestly say here in sworn testimony that your company did 
everything----
    Mr. Mnuchin. Okay. So first of all, Senator--and I 
appreciate the issue--as I said before, we highly regret that 
we made even one error, especially to the service men. And yes, 
we had all those loans reviewed. We paid $8 million. Many, many 
firms paid billions and billions of dollars. But we regret any 
issue there.
    What you were referring to with the OTS and the independent 
foreclosure review, it was one in the same. So as I have 
referenced in my testimony, we were one of 14 banks that signed 
a consent order; basically the 14 largest services signed a 
consent order. At the time, we were under the OTS; it was later 
taken over by the OCC who took over the consent order.
    And we were the only bank that actually completed that 
independent foreclosure review. And we are proud of that.
    Senator Menendez. And the fact that it was completed, at 
the end of the day, ultimately showed that your company took 
people out of their homes and created consequences for them 
they should not have. So I am not sure which one is to be proud 
of.
    Do you know a woman named Sylvia Oliver?
    Mr. Mnuchin. I do not.
    Senator Menendez. I did not think so. She is from Scotch 
Plains, NJ. She is the sister of the immediate past speaker of 
the New Jersey general assembly. She received a loan from 
IndyMac in 2008. And after her employer cut her hours, she ran 
into difficulty paying for her mortgage. She wanted to be a 
good borrower. She tried eight times for loan modifications, 
which I believe she would have qualified for. Every time, your 
bank denied each and every one.
    She has been fighting to save her home for 7 years. She 
nearly lost her home yesterday. Thanks to her tenacity, she has 
a 30-day reprieve, but that is no guarantee she will not lose 
her home next week. So I look at her.
    And, Mr. Chairman, I would like to have the testimony of 
several individuals who faced these realities be included in 
the record at this time.
    The Chairman. Without objection. If they pertain to the 
record, we will certainly do that.
    [The testimonies appear in the appendix beginning on p. 
129.]
    Senator Menendez. They certainly pertain to the record. 
They pertain to having been foreclosed on and ultimately having 
tried to seek loan modifications unsuccessfully, even though 
they should have qualified for them. And I think they are more 
than eligible for the record.
    So let me just say in closing, I see this as an example of 
privatizing profits, but socializing losses. In the darkest 
days of the financial crisis, it seems to me that you and your 
friends were looking for stores to raid and you found a gem in 
IndyMac.
    And with the government subsidizing the risk, you 
engineered a highly lucrative equation that made billions on 
the backs of homeowners, seniors, minorities, and military men 
and women.
    And so I have a problem understanding how that creates 
confidence in the Secretary of the Treasury nominee when you 
have to be looking out for every American? And it did not seem 
that when you had the chance to do that, and even the 
incentive, I would argue, by the backstop that the FDIC gave 
you and over $400 million that your company took from HAMP, 
which I know you were disparaging before, that that was your 
drive.
    So I need to be convinced that is going to be your drive 
now that you are the nominee for the Treasury Secretary who is 
supposed to represent all Americans.
    Mr. Mnuchin. Well, Senator, I hope I have the opportunity 
to convince you going forward. And I apologize, because I did 
not recognize the name, but now that you have mentioned it to 
me, it has been postponed, and I do not know any of the 
specifics, but as a courtesy CIT did inform me that your office 
had requested an extension and they did honor that and give an 
extension to revisit that.
    And I am not involved in CIT anymore, but I would encourage 
you to make sure that you have, again--if there are complaints, 
there is a department within the bank that responds to this.
    As I said earlier, any complaints that came through any 
government or regulatory agencies were responded to very 
carefully and reviewed by the OCC.
    And again, I would just apologize to the extent there were 
any errors whatsoever. That is something that I am very sorry 
for. But having said that, we took over a mortgage servicing 
business that was not part of what we were trying to build. It 
was a mess when we got there. We fixed it; we cleaned it up. 
And to the extent that we made errors on some issues, we 
compensated people for that as part of the agreement that we 
entered into with the regulators, which we think was the right 
thing to do.
    The Chairman. Senator Carper?
    Senator Carper. Thanks, Mr. Chairman.
    Mr. Mnuchin, I note you introduced your dad earlier, and he 
is still sitting there behind you. How old is your father? How 
old is he?
    Mr. Mnuchin. Eighty-three? He's 83.
    Senator Carper. Well, you are blessed to have him with you.
    Mr. Mnuchin. Thank you; I feel that way.
    The Chairman. He looks pretty good for 83 is all I can say. 
And I am in a position to say that. [Laughter.]
      
    Mr. Mnuchin. I am glad you said that. It is true.
    Senator Carper. Well, my parents are both deceased. A 
couple of things they used to say to my sister and me when we 
were growing up, over and over and over again--I do not know if 
your parents ever did that, hoping that it would somehow sink 
in. But one of the things they were always saying is, figure 
out the right thing to do, not the easy thing. And when it is 
the right thing to do, just do it. And they would say, treat 
other people the way you want to be treated--the Golden Rule.
    My dad was always big on doing things well, doing 
everything well. I like to say, if it is not perfect, make it 
better. And my dad always used to say, just use some common 
sense. He said that to my sister and me a lot; we must not have 
had any.
    But can you just think of a word of advice that your dad or 
maybe your mom has given you over the years that you could have 
used or should have used with respect to the foreclosures that 
you were facing and what you did? Just very briefly, a word of 
advice from them.
    Mr. Mnuchin. Well, again, first of all, thank you. I agree 
with those many things that you were told. And as I mentioned, 
not only has my father had a big influence on me, but my 
mother--who has passed away, and my grandparents--in 
understanding the importance of hard work.
    Again, I can tell you----
    Senator Carper. Just give me one, just one good thing from 
your mom and dad that applies to what guided you in this 
mortgage foreclosure situation, please.
    Mr. Mnuchin. Absolutely. And I think kind of, as you have 
suggested, that you should treat people as you would want to be 
treated: be sympathetic, be empathetic to those people and 
understand what they are going through.
    Senator Carper. Good. The other thing I would add to that 
is, everything I do, I know I can do better. And I think you 
have acknowledged that as well.
    Mr. Mnuchin. Absolutely.
    Senator Carper. It sounds like you guys tried, but we can 
always do better.
    I want to go back to the issue of how to create a nurturing 
environment for job creation, job preservation, with respect to 
growing exports--you know, making sure that we get our products 
to markets across the world.
    The President-elect has, I think--several times at least I 
have heard him talk about support for a duty on, like, items 
imported from China. I think it is, like, 45 percent; 35 
percent duty on items imported from Mexico. I think he may be 
also considering an executive order imposing a 5-percent tariff 
maybe on all imports.
    And I have a question with really three parts. And first, 
if the administration chooses to pursue such policies, how 
would you prevent those countries affected from imposing 
similar duties on American exports?
    Second, Mexico is, as you probably know, our second-largest 
export market for goods. The top three exports in 2015 were 
machinery, electrical machinery, and autos, vehicles. If Mexico 
were to impose a 35-percent duty on American exports, do you 
have any idea what would be the impact on our manufacturing?
    And third, what role would our government have in assisting 
those maybe small businesses that were harmed, and even not-so-
small businesses harmed, the workers that might be displaced by 
the closing of international markets to our domestic 
manufacturers?
    Mr. Mnuchin. Well, first of all, those are all good 
questions. And let me assure you from my conversations with the 
President-elect on trade--and I have discussed a lot of the 
trade issues with him. I have also had the opportunity to work 
closely with Wilbur Ross over the course of the campaign, who 
is also very involved in trade, as well as Peter Navarro, who 
will be in the White House.
    And trade, I think, as you know, at least certain 
enforcement issues of trade, cut across both the Treasury--the 
Commerce Department--and the USTR. So I would be working with 
those other people on a unified position on trade.
    Where the President-elect has talked about it, I have never 
heard him talk about 30- or 35-percent tariffs across the 
board. I have heard him specifically say, well, if certain 
companies want to move their jobs, we are going to specifically 
put a tariff on them, okay?
    Now, I think that that is something that needs to be looked 
at. And I do not think that is a plan that is going into 
action. I share your issues, that this is as much about growing 
exports as it is about growing imports.
    And specifically with Mexico, I think most people 
acknowledge that NAFTA was negotiated a long time ago and we 
should reopen this agreement.
    Senator Carper. Well, actually, we did, and we did it in 
the context of TPP, as you know.
    Mr. Mnuchin. I understand that.
    Senator Carper. And my hope is that, when you all get 
settled in, you will go back--and when you are thinking about 
renegotiating NAFTA, make sure you understand what has already 
been done.
    Mr. Mnuchin. I would hope that the starting point is the 
work that you have done. And I am optimistic that we can 
renegotiate a deal that is both advantageous to us and 
advantageous to Mexico, that is a win-win for both countries.
    Senator Carper. Good. The last thing: when you are 
mentoring and giving advice to the President-elect, another 
word of advice from my parents to my sister and me--and it 
probably works on the tariffs, the imposition of tariffs--is, 
what goes around comes around. You maybe might want to keep 
that in mind. Thank you.
    Mr. Mnuchin. Just to clarify the record, I am not mentoring 
him, he is mentoring me.
    Senator Carper. I am not sure----
    Mr. Mnuchin. But I do give him advice. I would not qualify 
that as mentoring.
    The Chairman. Senator Cardin?
    Senator Cardin. Thank you, Mr. Chairman.
    I want to get to the tax issues for a moment, because we 
had a chance to talk about that in my office.
    And I think we all would acknowledge that our income tax 
rates, personal and corporate, put the United States at a 
disadvantage in global competition and it is something we need 
to deal with.
    We also recognize that, from a business tax point of view, 
it is not just the corporate rate, it is also the individual 
rate, since 90 percent-plus businesses pay the individual rate.
    I want to talk about two standards that I hope will judge 
the review of tax reform so that we can have a simplified tax 
structure, one that is fairer to the American people.
    One, I would hope that you would agree that we do not want 
tax reform to increase the size of the Federal deficit.
    Mr. Mnuchin. I am taking notes. I do not know if you want 
me to answer them one at a time or----
    Senator Cardin. Well, the second is that tax reform should 
be at least as progressive as our current tax code. That is, 
middle-income families should not be asked to pay more in 
regards to our tax code.
    Mr. Mnuchin. So, again, in both those issues--and I share 
your concerns on the first one--again, we do believe in dynamic 
scoring, and with the appropriate growth, I think we want to 
make sure that tax reform does not increase the size of the 
deficit.
    And in regards to the second issue, as I have said, in my 
discussions with the President-elect--he is very interested in 
us providing a middle-income tax cut. That is his priority.
    Senator Cardin. And I would just urge you, on the first 
part, to recognize that we have to be disciplined as we deal 
with the Federal budget. And I would hope we would have 
consistent rules in regards to both spending and tax cuts as to 
the dynamic effects of those types of activities.
    It is a lot easier for us to use the current rules because 
they are objective and we have professionals who give us the 
ground rules. When we start using subjectivity, it could be 
abused, and, at the end of the day, we could have much larger 
deficits.
    But your point is, you do not want to add to the deficit of 
the country----
    Mr. Mnuchin. That is correct.
    Senator Cardin [continuing]. Through tax reform. And 
secondly, you want to make sure that middle-income families are 
not disadvantaged by the tax code.
    So here is the challenge. We also believe we should be 
competitive globally, because you want to grow our economy in 
regards to exports. It is difficult to see how you can get that 
done within the context of using just income tax revenues. 
Because the United States, among the industrial nations of the 
world, has a relatively low part of its economy tied up in 
government, and yet we have marginal tax rates that are among 
the highest in the industrial world. The reason, of course, is 
that we do not use a consumption tax and every other industrial 
nation uses a consumption tax.
    So without bringing in other sources of revenue, we are 
going to have a very difficult time getting those competitive 
tax rates. So I would just urge you, as I did in my office, to 
take a look at a progressive consumption tax.
    It is border-adjusted, it does reward savings, and it does 
make our tax code not only competitive, but it gives us a 
competitive advantage over the industrial nations of the world.
    Mr. Mnuchin. Well, again, I appreciated meeting with you 
and talking about these issues and will follow up. And again, 
under the appropriate growth numbers, as I have said, with 
dynamic scoring, we are not looking to grow the deficit. And 
obviously, one of the concerns is the size of the debt and how 
it has gone up.
    In regards to your other issue, you know, one of the 
issues--and this impacts trade policy--is we do not have a VAT 
tax system, we have an income tax system, and other countries 
do. And that is one of the things that the GOP plan looks at.
    Senator Cardin. And of course, the rest of the world uses 
consumption taxes that are border-adjusted. We use income 
taxes. Income taxes are not border-adjusted. That makes it 
difficult for us to grow exports. It also, of course, does not 
reward savings, which is another important area.
    During the best of times, America's savings ratios were not 
competitive with other countries. We could use more incentives 
for savings, which is the other area that we talked about in my 
office, that Senator Portman and I and others have worked on: 
to increase the opportunities for Americans to save, 
particularly in retirement savings. That, I do believe, would 
not be a partisan issue.
    And as we are working for major tax reform to try to make 
our tax code fairer and more competitive, I would urge you to 
work with us on retirement savings and other savings 
initiatives that we could make progress on, I think, in a 
relatively short period of time.
    Mr. Mnuchin. I look forward to working with you. Thank you.
    Senator Cardin. Thank you, Mr. Chairman.
    The Chairman. Thank you.
    I have to apologize to Senator Stabenow. She should have 
been next, so we will turn to her now.
    Senator Stabenow. Well, thank you very much, Mr. Chairman. 
Mr. Chairman, I want to thank you very much for allowing us to 
have an opportunity to fully ask questions in multiple rounds. 
We really appreciate it and the way you are conducting the 
hearing.
    The Chairman. I hope we only have two rounds.
    Senator Stabenow. So--yes, well, thank you; thank you for 
allowing that.
    Mr. Mnuchin, this really is a physical marathon, I think, 
of endurance in just the nomination hearing, so we appreciate 
your hanging in there as well.
    Mr. Mnuchin. Thank you.
    Senator Stabenow. A couple of different things. First of 
all, following up colleagues speaking about jobs going 
overseas, this is obviously a very critical issue for Michigan. 
We make things, we pride ourselves in making things. 
Manufacturing is one of the most significant parts of the 
economy.
    I have been working for a number of years on a bill that we 
call ``Bring Jobs Home Act'' that would end the ability of a 
company to write off the costs of moving overseas. I do not 
know why, if a facility is closed, the workers and the 
taxpayers in the community should pay for the move. And that 
certainly seems in line with what our incoming President has 
said. Would you support stopping that, right off?
    Mr. Mnuchin. I look forward to working with you on that. I 
can tell you it sounds like something the President-elect would 
like, so I look forward to working with you on that.
    Senator Stabenow. Well, I think it is important that we 
take step one. Of all of the loopholes that are there, the 
first one is, we should not pay for the move. So I appreciate 
that and hope that is something that will be embraced.
    A different subject: I know colleagues have talked about 
pensions, which are critically important. People, you know, 
throughout their lives often give up a pay raise to put money 
into a pension. This is very serious what is happening to 
pensions around the country, and certainly whether it be a 
multi-employer pension or single employer pension, I am deeply 
concerned about what is happening to people.
    We have heard from the GAO in 2013 that if there was a 
multi-employer pension fund that became insolvent, a very large 
troubled plan, then we could see an estimated benefit paid by 
the PBGC be reduced to less than 10 percent of the guaranteed 
level. So you would be talking about somebody who worked hard 
all their life who should be getting $2,000 a month then could 
end up with $125. Seems to me that is a pretty basic promise 
that we need to keep. Rather than ask you to comment at this 
point, I am going to go on to the other piece of keeping our 
promises and ask you to respond to both.
    One is a pension and the other is Social Security. As 
Treasury Secretary, you will be a trustee, a very important 
position. I think it is important to know if you are committed 
to upholding the new President's promise in May of 2015 that he 
would not support cuts to Social Security.
    Mr. Mnuchin. I absolutely support the new President's 
promise; that is why I am here.
    Senator Stabenow. And secondly, what is a cut? I mean, we 
have heard about increases in the retirement age; is that 
something that you would support?
    Mr. Mnuchin. Again, I have heard the President-elect's 
promise, and I would sit down and discuss it with him, and I am 
happy to work with you on the specifics. But I have not 
discussed the specifics with him, but I know from a high level 
how he feels. And just going back to the pension fund issue, I 
acknowledge it is a very significant issue and something I look 
forward to working with you and your office on.
    Senator Stabenow. This is very real for people and came 
just as the financial crisis created a serious situation for 
people in home values and for financial institutions. We all 
know pension funds were involved in that as well and somehow 
did not make it to the top in terms of being able to be made 
whole. And so I think that is an unfulfilled promise and 
obligation that our country still needs to keep.
    On Social Security though, there are a lot of ways--I mean, 
what is a cut? There are a lot of different ways to look at 
this. Whether it is raising retirement age, changing CPI, 
progressive price indexing, privatization, cuts in the amount 
of benefits, all of these things would reduce a retiree's or 
worker's lifetime benefits as they become a retiree, and all of 
them are extremely significant.
    Just out of curiosity, do you know the average Social 
Security benefit per month?
    Mr. Mnuchin. I do not. I apologize.
    Senator Stabenow. $1,228.12. Not a lot to live on, and for 
about a third of the seniors in the country, that is 90 percent 
or more of their income. So, thank you very much.
    Mr. Mnuchin. It is a very significant issue, and I 
appreciate that. And if I am confirmed, I look forward to 
working with the President-elect on this important issue.
    Senator Stabenow. Thank you.
    The Chairman. Thank you, Senator. Senator Brown?
    Senator Brown. I have been pleased, Mr. Mnuchin. Thank you 
and sorry you had to hurry through lunch.
    Mr. Mnuchin. That is okay.
    Senator Brown. I saw you sitting in the back room eating a 
lunch, probably that you have eaten faster than any time 
lately, so thank you for that, and for your patience.
    I have been pleased the President-elect is committed to 
helping manufacturers. He wants to buy American, hire American. 
I am sending him a letter today. This letter that I hold up 
will let him know I will be introducing legislation to extend 
Buy America to all Federal infrastructure, construction, and 
public works projects. If taxpayers pay for it, whether it is a 
water and sewer system or a bridge, or whether it is steel or 
iron, or whether it is cloth for an American flag in Akron, OH, 
over the post office, if taxpayers pay for it, our companies 
and our workers should build it. So I just wanted to let you 
know of that.
    Now I want to talk to you about China. I have never met a 
Goldman Sachs banker who wanted to get tough on China. Based on 
your Wall Street background and financial dealings, I am 
concerned about what I have seen in the past with bankers being 
what I would say is soft on China. Let me lay out a couple 
things.
    Relativity Media is a Beverly Hills company invested in 
movies, as you know, among other things. When you were co-chair 
there during 2014 and 2015, the company received investment 
from Chinese investors in the company's films and partnered 
with the government of the People's Republic of China to 
promote and distribute Chinese films. China readily admits it 
wants to become more powerful by increasing its cultural 
influence in this country and expanding its financial stake in 
the U.S. film industry. You were a board member of a company 
that partnered directly with the Chinese government that 
increased their influence in Hollywood. Were you helping China 
expand its global power?
    Mr. Mnuchin. Let me just first comment----
    Senator Brown. And try to make the answer really short if 
you can.
    Mr. Mnuchin. I know. But I apologize. First of all, I left 
Goldman Sachs 15 years ago.
    Senator Brown. I know.
    Mr. Mnuchin. So just going back to trade, I think of myself 
as a regional banker----
    Senator Brown. Okay, okay.
    Mr. Mnuchin [continuing]. Not Goldman Sachs. As it relates 
to my experience with Relativity, the Chinese never invested in 
Relativity, and I do not recall them ever having invested in 
Relativity films. They did have a small joint venture in China 
that was not particularly successful, for what it is worth.
    Now in regards to my view on China, I 100-percent support 
the President-elect's view that we need to look at China 
overall, from a trade standpoint and an economic standpoint and 
a security standpoint, and I look forward to working with him 
on that.
    Senator Brown. That is not--what you said is not from the 
reports we get. We will follow up, by mail, or maybe we will 
follow up by letter to you to talk about that.
    Mr. Mnuchin. I am happy to.
    Senator Brown. Let me shift. China, as you know, has great 
capacity in production of steel. Their distortion of the global 
steel market puts American workers out of jobs. You and the 
President-elect talked about that in places like Youngstown, 
OH. Will you commit to make public a comprehensive plan to 
address global overcapacity in the steel industry within the 
first month you are on the job?
    Mr. Mnuchin. I do not want to make that commitment, but I 
am happy to work with your office on this issue----
    Senator Brown. You do not want to make a commitment it will 
be the first month, or you do not want to make a commitment 
that you will put together a substantive comprehensive plan to 
address global overcapacity?
    Mr. Mnuchin. I will make a commitment to sit down with your 
office and work on this issue and then figure out the time 
frame and whether we should be making it public, but I 
understand the issue. The President-elect is concerned about 
these issues, and we will work with you on this.
    Senator Brown. Thank you. I want to follow up on--you said 
you left Goldman 15 years ago, correct?
    Mr. Mnuchin. I did. 2002.
    Senator Brown. You are aware, I think, that during part of 
the time you were at Goldman, that you were one of the two 
firms--I am not saying you worked on this personally, but I am 
saying that Goldman is one of the two firms that managed the 
portfolio of the Central States Teamsters Pension Fund. And I 
think that you are aware that while Goldman was a manager of 
the funds of Central States, the plan lost 40 percent of its 
value, more than double the average losses for a defined 
pension benefit plan during that period. Due in part to those 
losses, in part due to Goldman Sachs's--I would call it 
mismanagement of that plan--the Central States Teamsters 
Pension Fund, as Senators Stabenow, Nelson, and McCaskill said, 
is in distress and at risk of becoming insolvent.
    There is a certain irony that, if you are confirmed, you 
will be a member of the board of the PBGC, as I think you know, 
and responsible in many ways for protecting the pensions of 
more than 400,000 working families. You, I assume, do not know 
who Butch and Rita Lewis are. They are constituents of mine and 
Senator Portman. He worked as a trucker for 40 years. He was a 
teamster; he led the Southwest Retirement Pension Committee's 
fight against cuts to their earned benefits. He passed away on 
New Year's Eve, due to a stroke, which doctors have attributed, 
at least in part, to the stress he faced over proposed pension 
cuts. His wife lives in southwest Ohio. She has taken up his 
fight. She will lose almost her entire pension. So I know you 
said you are not for finding a way to make these pensions 
whole, but understand that this Congress bailed out Wall Street 
banks, including Goldman, and I hope that you will change your 
mind on helping make these pension whole.
    Mr. Mnuchin. And I appreciate the significance of the 
pension issue, and I can assure you I had nothing to do with 
that issue when I was at Goldman Sachs.
    Senator Brown. I knew that, but that does not make Rita 
Lewis feel any better.
    Mr. Mnuchin. I completely understand that, Senator; I 
appreciate that.
    Senator Brown. I just know there is an ideological 
antipathy in this body from its more conservative members who 
helped the Wall Street banks to help workers like Rita Lewis's 
husband.
    The Chairman. Well, that is going a little far. I do not 
know anybody who wants to do that.
    Senator Brown. Okay, Mr. Chairman, I will finish my 
comments. There is one more point I want to make.
    Last year--I work with some manufacturers concerned that a 
metals warehouse owned by your former employer Goldman was 
driving up aluminum costs. The Fed proposed rules to reign in 
merchant banking authority that allows banks like Goldman to 
own these metal warehouses. We have done some hearings on that. 
Will you make it a priority to help the Fed finish its merchant 
banking rules and to use Treasury's authority to address these 
unfair practices?
    Mr. Mnuchin. Absolutely. I would be happy to look into that 
and work on that.
    Senator Brown. Okay, that you understand. Thank you. I 
understand Treasury has joint rulemaking authority in merchant 
banking. So they have a role, you have a role, and I hope that 
you exercise it.
    Mr. Mnuchin. Thank you.
    Senator Brown. Thank you, Mr. Mnuchin.
    The Chairman. Thank you, Senator. I guess, Senator Warner--
or excuse me, Senator Heller, I'm sorry.
    Senator Heller. Mr. Chairman, thank you. And, Mr. Mnuchin, 
thanks for your patience. It is a long day, but I hope it is 
only 1 day. I want to talk--I do not question the President-
elect's desire to repeal and replace Obamacare. He said it, and 
I do not doubt it. What I do question is what his positions are 
on all the taxes. And as you know, there were a dozen or more 
taxes in Obamacare, a trillion dollars, new taxes on middle-
class America. Can you clarify to me the President-elect's 
position on the taxes that went along with it? Does he want to 
keep them, does he want to repeal them? Give me your best 
thoughts.
    Mr. Mnuchin. So first of all, again, I just want to 
apologize that we did not get back to you on that information. 
And I assure you I have read my staff the riot act; this will 
be our top priority when we leave today.
    Senator Heller. Thank you.
    Mr. Mnuchin. In regards to Obamacare, I have not been as 
involved in the specifics of the repeal and replace, or 
replace, as it relates to the taxes. My understanding is to get 
rid of the surcharge on that.
    Senator Heller. Obviously there are a number of 
controversial taxes in there--the medical device tax, of 
course, being one, the Cadillac tax being another--and I want 
to kind of hone in a little bit on this Cadillac tax. Because 
as you are well-aware, it is a 40-percent excise tax on what 
they consider, or deem to be, Cadillac plans, and most people 
who have what would qualify as a Cadillac plan do not come 
anywhere close to high-end health-care programs. This would 
affect 1.3 million Nevadans, 120 million Americans--we are 
talking seniors, unions, public employees, go down the list--
who are going to be hit by this 40-percent excise tax. Give me 
your feeling on this and your desire to repeal a tax of this 
nature.
    Mr. Mnuchin. I agree with you, and, as I said, I am not as 
close to the whole Obamacare discussion right now, but I will 
definitely follow up with you on that, and I agree with your 
view.
    Senator Heller. Okay. It was postponed 2 years to 2020, 
from the work of Senator Heinrich from New Mexico and myself. 
We are working hard, and what I just want is a commitment to 
work with us as we go forward on this, and hopefully we can 
repeal what I consider to be a very onerous tax.
    Mr. Mnuchin. All right. It sounds like what you are saying 
makes absolute sense, and you have my commitment to work with 
you on that.
    Senator Heller. Thank you. I want to talk also a little bit 
more about housing. Seventeen percent of the houses in Nevada 
are currently still under water--17 percent. I want to talk 
about the mortgage debt tax, really quickly. The IRS deems it a 
gift, today that, if you bought your house for $250,000 and 
today it is worth $200,000 and you sell it for $200,000, they 
deem that $50,000 as a gift and want to tax you on it. Now 
Senators Stabenow, Isakson, and Menendez, we have worked 
closely on this, and it expired as of January 1st. We have 
reintroduced that legislation to try to eliminate this burden 
on the taxpayer. I would like to get your understanding of 
this, your feelings on it, where your support would be on this 
particular piece of legislation.
    Mr. Mnuchin. Yes, you have my commitment to work with you. 
If it is not bad enough that the person lost their home, but 
then we have to send them a tax bill--I agree with you on that.
    Senator Heller. I appreciate your support. Mr. Chairman, 
that is all I have.
    The Chairman. Senator Warner?
    Senator Warner. Thank you, Mr. Chairman. I just want the 
record to reflect I would differ with my colleague, the Senator 
from Nevada, in terms of characterization of most of the 
funding that went in for Obamacare. In terms of the capital 
gains surcharge for folks like you and me and the higher-income 
surcharge again, for folks like you and me--and I know this has 
not been your focus yet--but in any world, in any form of 
hocus-pocus, dynamic-scoring scheme, the ability to say we are 
going to, as the President-elect has said, maintain the 
prohibition against pre-existing conditions, keep kids on their 
parent's policies until they are 26, make sure there is 
insurance for everybody, and pay for it all, will be a curious 
act.
    Let me come to my questions, though. I appreciate very much 
your earlier comments to me and Senator Crapo about GSE reform. 
But I want to clear up one thing. As you are aware, there have 
been a number of hedge funds, that, at the absolute demise of 
those Fannie and Freddie holdings in the public markets, went 
in and bought them cheap. That is what hedge funds do. And they 
have then launched a remarkable campaign, both public and 
private, of lobbying that is in certain ways, in terms of even 
character assassinations of certain Senators, almost 
unprecedented. The President-elect and you invested in one of 
those funds. The President-elect has divested himself; I 
imagine you will divest yourself as well. But again, in light 
of your firm commitment earlier not to go with some kind of 
recap and release scheme that would greatly enhance those hedge 
fund profits, I believe, and then leave the taxpayer 
potentially holding the bag if another housing crisis took 
place, I just thought you would probably want to comment on 
that and reaffirm that commitment that you will be looking out 
for the interests of the taxpayers and not some of the folks 
who might have invested in it in the past.
    Mr. Mnuchin. I mean, first of all, let me just comment. I 
have divested my interest in that fund as well already. And as 
I said, my job is to look out for what is in the best interest 
of the taxpayers, balancing this issue--the need for housing 
reform and making sure that we maintain housing liquidity--with 
making sure that the taxpayers are not on the hook for that. 
And whatever the legal issues are associated with that--again, 
as it relates to the entities, I have tremendous expertise on 
the entities. As it relates to the legal case of various 
holders of different securities, I have not studied that at 
all------
    Senator Warner. And I would encourage those of us who have 
been part of the reform to realize that legal proceedings will 
continue.
    I want to--you are complimentary on my business background, 
and you know, obviously, you have had a great deal of success 
in business as well. One of the things I think that business 
people oftentimes bring to the political process is a 
willingness to look at things afresh. And you as a business 
person realize there are two sides of a balance sheet. There is 
revenue, and there is spending.
    Mr. Mnuchin. Yes.
    Senator Warner. Many people come to the political process 
and get hired into this process by taking absolutist pledges on 
things like revenues. As we discussed in my office, if you 
look--I shared with you the data of the 34 industrial nations 
in the world. Much to the surprise of many, America actually 
ranks 31st out of 34 nations in terms of total revenues as a 
percentage GDP, and that affects our tax rates compared to 
everyone else. I know you are not going to probably fully 
answer this, but my hope would be that you would not, moving 
forward in this position, take one of those absolutist pledges 
that, in an effort to try to prevent our $19-trillion deficit 
from going much higher, with some of these tax reform plans 
putting a foot forward, that you are not going to arbitrarily 
prevent one whole half of the balance sheet from being 
considered in the whole question around revenues.
    Mr. Mnuchin. I mean, my only pledge is, I am working for 
the American people, and we will be open-minded about looking 
at different things. And the good news is, not only do I have, 
hopefully, a new view, but we have a President-elect who is 
willing to look at----
    Senator Warner. Well, I am going to hold you to that, 
because the absolutist approach, which never looks at revenues, 
leads us to the place where we are right now, where we are 
spending, frankly at the lowest level in modern American 
history, on education, infrastructure, and R&D, and that is not 
a good business plan. Let me go to two other questions really 
quickly.
    An earlier comment--and I was a little surprised at your 
response. Going through the FDIC process with a relatively mid-
sized institution--as I am sure you are aware, Lehman was much 
smaller than most of the SIFI institutions--took 5 years in the 
bankruptcy proceeding. And in title II of Dodd-Frank, a 
bipartisan component of the bill that actually had 80 Senators' 
support, there was an acknowledgment that, while we need to 
prepare for bankruptcy proceedings and those liquidation plans 
that these institutions have to prepare, that if that 
proceeding could not take place, or if bankruptcy would not 
work, you had as a fallback provision, title II. It would 
concern me greatly if you agree with some of the other comments 
that that title II reserve that most of the large institutions 
actually believe strengthens the systems, you would be in favor 
of repealing.
    Mr. Mnuchin. Well, again, it is a complicated issue.
    Senator Warner. Absolutely. That is why I am concerned.
    Mr. Mnuchin. So again, I am not suggesting that we remove 
title II tomorrow without having the appropriate bankruptcy 
solution. And again, it depends on what is in bankruptcy. So it 
depends whether we are talking about a holding company that 
just has a bunch of sub debt and equity, or if, you know, we 
are talking about the bank. So again, we have had a process to 
resolve banks. What, again, I think that we need to look at is 
the holding company issues.
    Senator Warner. What I would simply point out--the National 
Bankruptcy Conference, which is composed of bankruptcy judges, 
lawyers, believes, quote, ``orderly liquidation authority under 
title II should continue to be available, even if the 
bankruptcy code is amended.'' Thank you, Mr. Chairman.
    The Chairman. Senator McCaskill?
    Senator McCaskill. Thank you. I want to gently take issue 
with my colleague, Senator Burr. It is clear that the Committee 
on Foreign Investment in the United States does have the 
responsibility of looking at foreign investment and whether it 
impacts national security. And clearly, as Secretary of the 
Treasury, you will have a role in that. And I think it would be 
hard to argue that debt owed to foreign entities by the 
Commander-in-Chief, the President of the United States, could 
not have any impact on national security. I recall that when a 
foreign company was looking at buying Starwood, for example, it 
was going to go to CFIUS for a decision. And I want to point 
out for the record that, if you decide somebody wants to come 
in and buy one of President Trump's properties, and if CFIUS 
meets and you decide it is going to risk national security by 
the location, or who the foreign entity is, the ultimate 
decision is--whose?
    Mr. Mnuchin. Well, again, let me just assure you, I am 
going to take my role as chair of CFIUS very, very seriously.
    Senator McCaskill. I know, but if you take it seriously----
    Mr. Mnuchin. And as it relates to----
    Senator McCaskill [continuing]. Then whose decision is it?
    Mr. Mnuchin. Again, as it relates----
    Senator McCaskill. Mr. Mnuchin?
    Mr. Mnuchin [continuing]. To these different views on the 
President's business, again, you know, I will consult with the 
internal counsel at Treasury, in the ethics area at Treasury, 
and determine--and by the way, the general counsel at the White 
House--and we will figure out the right solution.
    Senator McCaskill. Do you know whose decision it is, 
ultimately, under the law?
    Mr. Mnuchin. Yes, I----
    Senator McCaskill. And whose is it?
    Mr. Mnuchin. It is mine.
    Senator McCaskill. No, it is not. It is the President of 
the United States'. You make a decision, and then it goes to 
the President, and the President gets to decide.
    Mr. Mnuchin. I understand, but----
    Senator McCaskill. The same guy whom I think is going to 
hire his own ethics experts.
    Mr. Mnuchin [continuing]. I need to make a decision for it 
to go to the President.
    Senator McCaskill. Okay, but if you make the decision that 
it should go to the President, I just wanted to point out for 
the record that, ultimately, it is his call. It is not your 
call. But you have a chance to make a recommendation to him.
    Mr. Mnuchin. I think we can all acknowledge that we are in 
a little bit of a unique situation. We have not had a President 
like this, who owns these types of----
    Senator McCaskill. No, in fact----
    Mr. Mnuchin [continuing]. Businesses and someone who is 
willing, again, to come into government and serve the country 
as President. And I assure you, we will come back and talk 
about these issues----
    Senator McCaskill. That's right.
    Mr. Mnuchin. I know there are different views here. We will 
work with the chairman on this as to the purview of the 
committee and the appropriate lawyers on this. Thank you.
    Senator McCaskill. That's terrific. And it is different. 
And if we think in history that we got the emoluments clause 
because a foreign government gave a jeweled snuff box to the 
President of the United States, that almost seems kind of de 
minimis, in light of how complicated the international aspect 
of the holdings that the President is going to stay with 
through his presidency. So I do think you are inviting a lot 
more questions down the line. And while we are on this 
subject--besides being a former prosecutor, I am also a former 
auditor. So when I heard the President-elect's pledge about 
profits from foreign governments going to the Treasury, my ears 
perked up. Because, as you well know, you benefit from income 
to your business, even if it is not profitable, correct?
    Mr. Mnuchin. How do you benefit from income if it is not 
profitable?
    Senator McCaskill. Well, let's say you are the Trump Hotel 
by the White House and you are losing a million dollars a year 
and a foreign government comes in and buys a suite of rooms for 
a year, which brings your balance sheet much closer to a loss 
of $200,000 a year. Haven't you benefitted from that income of 
$800,000 a year?
    Mr. Mnuchin. I am following your reasoning.
    Senator McCaskill. Okay. So first of all, I think he has 
to, in order to make good on his pledge to do this, he has to 
pledge to give up all of his income from foreign interests, 
unless there is going to be an auditor who is going to decide 
if and when Mr. Trump's businesses, that he has not divested 
from, are profitable from foreign involvement. Who is going to 
make that call? Is that going to be his family? Is that going 
to be his ethics officer? Is there anybody who works for you 
who is going to take a look at how he is determining whether or 
not he is profiting off foreign involvement in his wide variety 
of interests across the globe?
    Mr. Mnuchin. Again, I think you have raised some very 
interesting comments, and I would be happy to follow up with 
you. And I am sure the President-elect will put out more 
information on this, and I am happy to inquire with him. So, I 
understand your issues.
    Senator McCaskill. Mr. Mnuchin, is there anyone who has 
income under $200,000 who will receive even a dime from 
repealing Obamacare and the tax cut that goes with it?
    Mr. Mnuchin. Again, I think we are looking at overall tax 
reform, okay?
    Senator McCaskill. My question is about repealing 
Obamacare.
    Mr. Mnuchin. This is just one aspect.
    Senator McCaskill. In repealing Obamacare, you are going to 
repeal the taxes that are in Obamacare that strengthen Medicare 
and do all those things. If you repeal Obamacare, it will be a 
tax cut. My question is, will anyone who makes less than 
$200,000 a year receive even a dime from that tax cut?
    Mr. Mnuchin. Again, I think we are going to look at tax 
reform overall and what it does. When Obamacare was put in, it 
was a tax hike on those people.
    Senator McCaskill. People who make over $200,000 a year?
    Mr. Mnuchin. Yes.
    Senator McCaskill. No question. I mean, most of it was on 
people who make more than a million a year. So the answer is, 
not one dime of the tax cut that the Congress--the Republican 
Congress--is about to do on the repeal of Obamacare will go to 
one American who makes less than $200,000 a year.
    Finally, let me talk about pensions. You supported the bank 
bailout; so did I. You supported the stimulus; so did I. And we 
talked about this in my office. I think we both agreed it was 
necessary in light of what our country was facing. But to the 
pensions, you have an incredibly important role in the 
stability of guaranteed pensions in this country in the new job 
that you seek. I have 32,000 people in my State who worked hard 
for decades, most of them driving trucks. And they planned 
their lives around their pensions. My question to you--we can 
fund the bailout for the banks and we can provide stimulus; we 
can do an awful lot of things around here to help a lot of 
people who have a lot of money. Will you commit to meet with 
some of the truck drivers from my State so they can look you in 
the eye and explain to you that the guarantee of their 
pension--you know, your new boss did an amazing job connecting 
with people like these Missourians all over the country. He 
looked them in the eye, and he said to them, ``I'm not going to 
leave you behind.'' I want to hear from you----
    Mr. Mnuchin. I would be happy----
    Senator McCaskill [continuing]. That you are not going to 
leave these people behind.
    Mr. Mnuchin. What is will say is, I will commit to meet 
with them, and I will commit to work with your office on 
figuring out what is an appropriate bipartisan solution to this 
issue, and that I appreciate the pension issue we have talked 
about several times today is a significant issue.
    Senator McCaskill. Thank you, Mr. Mnuchin.
    The Chairman. All right. Senator Casey?
    Senator Casey. Thanks, Mr. Chairman.
    Mr. Mnuchin, I want to start with a question you have no 
doubt come across in your preparation, and it may have been 
raised today and I did not hear, in the back-and-forth we had 
today, being at other hearings, other appointments.
    Currency manipulation, which is--I mean, the simple way for 
me to describe it in the context of Pennsylvania is, when a 
country like China cheats on their currency, Pennsylvania loses 
jobs. That is irrefutable, and that has unfortunately been an 
all too common occurrence. Maybe not at this moment, but when 
it happens, it is a substantial hit to workers and companies 
across our State.
    Let me just get some basics down. In terms of the posture 
you have taken, the predisposition you have on this issue, were 
you to be confirmed as Treasury Secretary, first, this basic 
question: do you believe that currency manipulation is a 
violation of international trade laws and that a country that 
engages in that activity, that behavior, should be held 
accountable?
    Mr. Mnuchin. Yes, I do.
    Senator Casey. Second, while China's currency policies have 
shifted of late, would you commit to me, and to this committee, 
that if China began to manipulate its currency again, that you 
would recommend to the President that the government formally 
name China a currency manipulator?
    Mr. Mnuchin. I would.
    Senator Casey. And I am happy to hear you answer ``yes'' to 
both of those, because this is the kind of issue that cuts 
across both parties, cuts across all different points of view.
    I want to move to some tax issues. You and I, when you came 
to my office, talked, not extensively, but for a little while 
about tax reform and your perspective on that. In particular I 
wanted to focus on the middle class. Many in the incoming 
administration have talked about trying to help the middle 
class, and correct me if I am wrong, but I think you have 
repeatedly said that you want to provide middle-class tax cuts, 
is that correct?
    Mr. Mnuchin. That is correct.
    Senator Casey. What specific provisions would you support 
as Treasury Secretary that would get to what you would define 
as a set of policies, or trade policies, that would provide 
that kind of middle-class tax cut?
    Mr. Mnuchin. Well, I think there are two different issues. 
I mean, there are trade policies and there are tax policies. So 
I see the trade policies as doing things that are beneficial 
for the American worker and American companies, and I see the 
tax policies as things that will incentivize businesses to be 
competitive here, as well as simplify the personal taxes and 
reduce middle-income taxes.
    Senator Casey. Well I hope we can be more specific, because 
I think the American people need to know that when any deal is 
reached in this town as it relates to taxes, whether it is tax 
reform or whether it is something more limited, that the middle 
class does not get left behind, as they often have in tax 
policy.
    I shared with you that piece from The New York Times this 
August by Neil Irwin; I think it was August 12th. I remember 
the date because of how stunning it was when he did the 
analysis of then-candidate Trump's tax proposal, which was 
really an embrace of the Republican House tax plan. The middle 
class got .2 percent, big bonanza there, and the top 1 percent 
got 5 full percentage points. Now you may debate and say Neil 
Irwin's piece was wrong, or other analyses are wrong, but I 
hope that, at the end of a period of time when this 
administration is working with a Republican Congress and has an 
agreement on taxes, I would hope that we would not see that 
kind of a bonanza, a giveaway, almost an unfettered giveaway, 
to the very, very wealthy.
    The last question I have gets to the basic concern a lot of 
us have, which is that you are seeking to be, not just part of 
a cabinet, and not just part of a government, but arguably one 
of the top two or three positions in a new government at any 
time. I think that has been true since the time of the 
founders. And one of the reasons why a lot of us have concerns 
about your record or concerns about your work and concerns 
about your views is that you have not been through the 
scrutiny, frankly, that public officials go through, even 
appointed public officials. I know you are in the midst of that 
now, and I know it is a lot.
    Tell me, in terms of your whole, either life experience, or 
work experience, what qualifies you, or what has prepared you, 
not just to fulfill the duties of the office--that is one 
question that is worth a significant review, as we have tried 
to do here today--but tell me what prepares you and what part 
of your life is relevant to the question of preparing to do 
public service in one of the most complicated departments of 
the most complicated government on the planet Earth, the 
Federal Government of the United States?
    Some people would point to experiences they had outside of 
their day-to-day job. But tell me what you think prepares you 
to do public service, in addition to the duties of the Treasury 
Secretary?
    Mr. Mnuchin. Well, let me first comment on--I do think I 
have gone through an incredible amount of scrutiny on my 
investments and my private life, as part of doing this.
    Senator Casey. That is part of the deal. I mean, that is 
part of----
    Mr. Mnuchin. I am just saying, that is part of the deal, 
and I have fully disclosed everything, as you know. I consider 
it a great honor to be able to serve the country. And I think 
going back from the beginning of time, the idea that citizens 
would come into the government and serve the people--that is 
something I am doing. And it is no different than President-
elect Trump. He has been a business man, and he decided to step 
away from his business and serve the country. And he spent the 
last 2 years campaigning and being on the road because he wants 
to serve the American people. And I share that desire.
    In regards to what has prepared me, I have had several 
different careers. At Goldman Sachs I had tremendous experience 
in both the financial markets and in technology. I think both 
of those are very important things and expertise for a Treasury 
Secretary to have. After that, I have been in the investment 
business, and, more importantly, I have been a regional banker. 
I think that being, actually, a regional banker who has lent 
money, I think that I have a unique combination. Unlike Hank 
Paulson, who just ran a big investment bank, I ran a big part 
of Goldman Sachs. I had trading experience, very similar to 
what Bob Rubin did, who was at Goldman Sachs and served the 
country. And on top of that, I have had the added benefit of 
actually being a regional banker and lending to companies, and 
that is something that I have been doing. And on top of that, I 
have worked very closely with the President-elect; I think one 
of the important parts of this job as the Treasury Secretary is 
to have a close relationship. I view my job as serving the 
President and being a conduit between the President's mission 
and between the Senate and the House. And I think I have a 
unique set of skills, and that is why he has chosen me for the 
job.
    Senator Casey. Well, I just would add to my earlier 
comments in this way: this is public service. It is not just 
being able to fulfill a duty or a job. You are a servant of the 
people. There is an inscription on a building in the State 
capital in my home State of Pennsylvania--it is a building I 
worked in for 10 years--and it describes public service the 
best way that I have ever seen. It says, ``Public service is a 
trust given in faith and accepted in honor.'' And that 
``accepted in honor'' part is challenging for all of us. So I 
just hope that you bear that in mind, were you to be successful 
in the confirmation process.
    Mr. Mnuchin. Thank you.
    Senator Casey. Mr. Chairman, thank you.
    The Chairman. Senator Menendez has one more question he 
would like to ask, and hopefully he will be the last one to 
ask.
    Senator Menendez. Thank you, Mr. Chairman.
    You have heard a lot about pensions here, and I care about 
American workers and their pensions. And you served as director 
of Sears Holdings, which is the parent company of Sears and 
Kmart for about 12 years. You served on the finance committee, 
which was tasked with reviewing investment policies of the 
retirement plans of the company and its subsidiaries, is that 
correct?
    Mr. Mnuchin. That is correct.
    Senator Menendez. And the chairman and CEO of Sears 
Holdings is a gentleman named Edward ``Eddie'' Lampert, whom I 
understand is your former college roommate?
    Mr. Mnuchin. Actually, the benefit is, he is here with us 
today.
    Senator Menendez. Okay, good.
    So you are also an investor in the hedge fund ESL 
Investments, which you are choosing not to divest yourself of, 
as I understand from your disclosure. The hedge fund is also 
run by Mr. Lampert. You earned up to $26 million from the hedge 
fund last year, according to your disclosures. That same hedge 
fund currently holds 29 percent of its portfolio in Sears 
stock, and Mr. Lampert himself effectively owns 49 percent of 
Sears stock, according to public SEC filings. Are those all 
fair statements?
    Mr. Mnuchin. I think actually I have invested close to $26 
million; I did not make $26 million.
    Senator Menendez. Okay, I equivocate with you. Now Sears 
has been performing poorly and, as a result, was forced to sell 
assets to cover operating costs and to contribute to its 
pension fund. Interestingly, several of the most valuable 
assets have been sold in part to Mr. Lampert's hedge fund, 
including Lands' End, Sears Canada, and most of Sears real 
estate. The real estate was sold off to a different entity 
whose largest shareholder is Mr. Lampert's hedge fund. And that 
seems to have resulted in a shareholder lawsuit, according to 
SEC filings.
    The Pension Benefit Guaranty Corporation initiated an 
agreement with Sears to protect the pension benefits of more 
than 200,000 plan participants after the real estate deal and 
significant cuts to pensioners' health subsidies; that occurred 
during your watch. Unfortunately, the agreement with the PBGC 
puts the plan's pensioners behind Mr. Lampert's hedge fund in 
the ability to get assets from Sears in any bankruptcy 
proceedings. Because of this, because Sears has received at 
least $800 million in secured loans from Mr. Lampert's hedge 
funds, some of them secured by Sears properties, the Sears 
pension fund currently faces a $2.1-
billion funding obligation gap.
    Now I take all this from filings and public reports, and I 
assume that basically is a fair statement.
    Mr. Mnuchin. That sounds about right, but let me----
    Senator Menendez. Let me get to my question----
    Mr. Mnuchin. Okay, thank you.
    Senator Menendez [continuing]. Then I am happy to hear your 
answer.
    Are you aware that, if you are confirmed as Treasury 
Secretary, you would become one of three board members of the 
Pension Benefit Guaranty Corporation that has the power to 
either accept or deny a pension plan termination application, 
such as that which could occur with a Sears bankruptcy, making 
the Federal Government cover Sears' pension tab? Do you 
recognize that you are going to be part of that board?
    Mr. Mnuchin. Yes.
    Senator Menendez. You do. So, here is where my concern is, 
and maybe you can elucidate it for me.
    You were a director at Sears for 12 years, where you had 
oversight over the administration and investment into the 
pension fund. That pension fund has been underfunded. Its 
benefits were cut during the time period that you were there. 
It now faces a $2.1-billion funding obligation gap. Sears has 
sold off some of the most valuable assets while you have been 
on the board. Your college roommate's hedge fund has large 
interests in the properties sold, numerous secured loans with 
Sears, and owns a controlling share of Sears stock shares. You 
earned up to $26 million last year from your shares in that 
hedge fund, and you are refusing to divest yourself of the 
hedge fund.
    Should Sears go bankrupt, and you, if confirmed as Treasury 
Secretary, are a PBGC director who will have a role in the 
Pension Benefit Guaranty Corporation's attempts as an unsecured 
creditor to recover $2 billion for the unfunded liabilities in 
the Sears Pension Fund, while simultaneously trying not to lose 
money in your hedge fund investments in Sears that you hold 
with your college roommate, who is the CEO of Sears, how is it 
that you are going to do that?
    Mr. Mnuchin. So again, let me just correct again, because 
you said again that I made $26 million, which I did not. I 
invested $26 million, so I just want to make sure that the 
record states that.
    Let me first say that my original involvement with Mr. 
Lampert was in Kmart coming out of bankruptcy, where all the 
professionals thought that Kmart should be liquidated, and Mr. 
Lampert, and I working for him, saved tens of thousands of 
jobs. Sears, when he bought it, was already a failing issue, 
and the company has contributed multi-billion dollars to that 
pension fund, which had pension issues beforehand.
    So I am well-aware of the pension issues, and that was 
something that, when I was on the board, we were very cognizant 
of and made very significant contributions. And then as it 
relates to your question, obviously I will recuse myself in any 
way as it relates to being on the board, if indeed there ever 
were an issue with Sears. Whether I had an investment in ESL or 
I did not have an investment in ESL, I would be concerned about 
any appearance of conflict. So I would recuse myself.
    Senator Menendez. Well, we will have to look at the 
consequences of any such recusal, because there are three 
members of the board who get a vote. And if you recuse yourself 
under that set of circumstances, I am not sure that the 
remaining two can ultimately make a decision on such a case 
which involves 200,000 people's pensions. So, it is a serious 
issue, and I urge your attention to it, in terms of thinking 
about how this very well may happen, because those pensions 
were underfunded and now we are going to have a set of 
circumstances at some point where we are going to have to deal 
with it. And so I bring it to your attention, because I think 
it is a serious challenge.
    Mr. Mnuchin. And again, I will work with the ethics office 
and the general counsel to work through that. And again, I 
would just comment that Sears inherited, when it was purchased, 
an underfunded pension fund and has contributed billions of 
dollars to this along the way.
    Senator Menendez. It may have inherited it, but----
    Mr. Mnuchin. Thank you for your concern.
    Senator Menendez [continuing]. But by the same token, it 
continued to underfund it.
    The Chairman. All right. Senator Wyden is going to give his 
closing remarks, and then I will give mine.
    Senator Wyden. Thank you, Mr. Chairman. I want to review 
for the committee and colleagues where I think we are, both 
from the standpoint of process and from the standpoint of 
substance.
    Now, Mr. Mnuchin, a month ago you signed documents and an 
affidavit that omitted the Cayman Islands Fund, almost $100 
million of real estate, six shell companies, and a hedge fund 
in Anguilla. This was not self-corrected. The only reason these 
came to light was, my staff found them and told you they had to 
be corrected. Now, I hope you will make another correction 
based on what I heard today. When we talked about the Anguilla 
fund, and I asked about whether you pursued this for the zero-
percent tax rate, you said that it was really all about helping 
churches and pensions. Your words, not mine. I have an SEC 
document that indicates your help for a lot of private 
investors as well. So I hope that you will take the comments 
you have made today, which I think led most people, and all who 
listened in, to believe that you were helping just churches and 
pensions so that they will get the exact facts. And the SEC 
document lays that out.
    Now from the standpoint of substance, the Mnuchin Rule 
sounded promising to me when you said it the first time: no 
absolute tax cuts for the wealthy. So I, and other Senators--I 
thought Senator McCaskill's remarks were very good, probably 
considerably more eloquent than mine, when she asked about the 
ACA. Because, when you look at the ACA, it is really a Trojan 
Horse for tax cuts for the well-to-do. And both she and I 
pointed out that well-to-do people would get payroll tax cuts, 
and it would really be paid for by the working class losing 
benefits. And throughout the afternoon, when anybody asked a 
question about tax policy, Senator McCaskill, myself and 
others, you said, ``Well, it all has to be considered as part 
of this big tax architecture;'' your words, not mine. And you 
said this pretty much in response to any policy question. I am 
not clear whether you knew anything about the Earned Income Tax 
Credit, for example, and certainly, if you did, you can include 
that for the record as well. But your point there was, it has 
to fit into the overall tax architecture. Well, the Tax Policy 
Center, which is the center that does objective analysis, 
indicates that the Trump plan, which you have been part of, 
would add billions--excuse me, trillions--to the debt and would 
disproportionately--it provides a tax cut to everyone, but it 
would disproportionately favor the well-to-do. And that really 
gets me to my last point, the point that I am really walking 
out of here with.
    I feel very strongly about the tax system in America just 
being a broken, dysfunctional, rotting economic carcass. My 
wife usually says, ``Stop there, because you're just going to 
frighten the children.'' So I am interested in fixing this, and 
I can tell you are interested in fixing it as well. And I think 
I mentioned to you in the office that with Republican Senators, 
including one whom the President-elect wants to have run the 
intelligence field, Dan Coats, I wrote a bipartisan bill. But 
the hallmark of that bipartisan bill is, it would give 
everybody in America the chance to get ahead. It would not just 
be stacked all in favor of the most well-to-do. And as far as I 
can tell with respect to your views, your views indicate that 
you do not share that kind of commitment to the kind of 
bipartisan tax approach that Dan Coats, Judd Gregg--Mitch 
McConnell's economics lieutenant--and I all put together. That 
is what I am walking out of here thinking about.
    I am open to being persuaded, certainly, if I have missed 
something. It would not be the first time. But it sure looks 
like that tax world where there is one set of rules for the 
cops and the nurses and another set of rules for people who are 
well-connected, who can pretty much pay what they want, when 
they want, and maybe nothing at all, that system is still going 
to be pretty much alive and well with your approaches to taxes. 
So I appreciate having had this chance to discuss it today, and 
thank you for your time, Mr. Chairman.
    The Chairman. Thank you, Senator. For the good of the 
order, I want to note that I have numerous letters and hundreds 
of signatories in support of Mr. Mnuchin's nomination. The 
support includes representatives in the banking industry, from 
small committee banks to the American Bankers Association; 
letters from groups of small business owners to the National 
Asian American Coalition to the National Diversity Coalition 
for families for a better America; individuals from churches, 
non-profits, and businesses; and business associations serving 
predominantly minority communities all over the U.S. are also 
included in the support for Mr. Mnuchin for the position of 
Treasury Secretary.
    Now several of the letters, with some from people who are 
not personally acquainted with Mr. Mnuchin, applaud, among 
other things, Mr. Mnuchin's loan modification efforts when he 
had ownership in OneWest Bank. Now, without objection, the 
letters of support should be included in the record, where I 
think they should be.
    [The letters appear in the appendix beginning on p. 104.]
    The Chairman. Now, let me just say this. I want to thank my 
colleagues on the committee for their participation here today, 
and I especially want to thank Mr. Mnuchin for his patience and 
willingness to go through this long ordeal. If nothing else, 
Mr. Mnuchin, I think you should be commended for your 
endurance. As is typically the case with Cabinet nominees for 
an incoming administration, the timeline for written questions 
is going to be somewhat abbreviated. Well, I hope everybody 
pays attention to this: I asked that members submit their 
written questions for the record by 5 p.m. on Saturday, January 
21st.
    I am appreciative of you and your family being here and 
others who are in support of you, and frankly, I think you have 
handled yourself very, very well with very difficult questions 
by some of my colleagues--some of them really well thought-out, 
very interesting, and good questions. But you handled yourself 
very well, as well as any nominee for Treasury that I have seen 
in the whole time I have been on this committee. And we have 
had some really good people who have been well-known and are 
still well-known and who brought a lot to the table. I do not 
know that anybody is bringing as much to the table as you are. 
So, I am just hoping that you can help this country to get 
through its ordeals that it is going through right now, 
especially the economic ordeals. And I hope you will be a 
tremendous influence with our President-elect. I know he wants 
to change things, and I hope that he can. I hope we can get 
this thing at least going in the right direction in this 
administration, and if we can, I have a feeling you are going 
to be one of the reasons we do. So I am just personally very 
grateful to you for being willing to give your time to this.
    I remember our discussion in the office. I said to you, 
``You're going to lose a lot of money taking this job.'' And 
your response was, ``I don't care. I want to serve my 
country.'' And you are going to lose a lot of money. When you 
have had to sell off all your assets and so forth, you have 
made tremendous sacrifices to take this job. And I hope that 
our colleagues on both sides of the aisle will fully realize 
that, and realize how lucky we are to have people like you who 
are willing to give your life's work to something like this, 
because you love the country. And you are hoping that we can 
pull this country out of the, not only the fiscal and financial 
mess that we are in, but out of some other messes that 
literally exist that we really have to change.
    So with that, I want to thank you for your patience. I want 
to tell you that you have certainly impressed a lot of people 
here and especially me, and we are going to help you get 
through this ordeal and also help you when you are there. So 
just know that you have friends here on this committee, on both 
sides of the aisle, and for good reason. We all know that this 
job is one of the most important jobs in this country's 
history, and I think you are the man for it, and I just want to 
personally commend you and thank you for doing this.
    With that, we will recess until further notice.
    Mr. Mnuchin. Thank you very much.
    [Whereupon, at 3:26 p.m., the hearing was concluded.]

                            A P P E N D I X

              Additional Material Submitted for the Record

                              ----------                              


      Submissions for the Record From Hon. Robert P. Casey, Jr., 
                    a U.S. Senator From Pennsylvania

From WTAE Pittsburgh

Trump Pick for Treasury Secretary Foreclosed on Hundreds of Homeowners 
in Western Pennsylvania

OneWest Bank under Steven Mnuchin called ``foreclosure machine'' by 
some.

January 16, 2017

By Paul Van Osdol
Investigative Reporter

PITTSBURGH--Critics say President-elect Donald Trump's pick for 
treasury secretary, Steven Mnuchin, ran a foreclosure machine at a 
major bank.

Mnuchin was CEO of OneWest Bank. Action News Investigates has learned 
that bank foreclosed on hundreds of homeowners in western Pennsylvania 
while Mnuchin was CEO.

Nellie Mlinek lost her husband to cancer. She lost her son to an 
overdose. And then she lost her home to OneWest Bank.

``One thing I'll never get over is my son's death,'' Mlinek said.

Her son, Joseph, died of an accidental overdose in 2011. It devastated 
her emotionally and financially. Joseph was living with her and helping 
pay the mortgage on her home in Ruffs Dale, Westmoreland County--the 
house built by her late husband and their two sons more than 30 years 
ago.

She asked OneWest to help her keep the house by adjusting her payment. 
But she said the bank refused and then foreclosed on her.

``They should have worked with me to meet a payment that I could 
make,'' Mlinek said.

She filed for bankruptcy but even that could not save her house. She 
said it's caused her ``a lot of depression.''

She has plenty of company.

     A house in White Oak was foreclosed in 2014.
     A house in North Versailles was foreclosed in 2013.
     A house in Penn Hills was foreclosed in 2012.
     A Pittsburgh house was foreclosed in 2011.

All of them were foreclosed by OneWest or a subsidiary while the bank 
was run by Mnuchin.

``Mister Mnuchin ran a foreclosure machine at OneWest,'' said Paulina 
Gonzalez, of the California Reinvestment Coalition, which has 
documented OneWest's track record nationally.

In one case, the group studied foreclosures on reverse mortgages, which 
primarily go to the elderly. Dozens of Pittsburgh-area homes foreclosed 
by OneWest had reverse mortgages.

The coalition found OneWest held 17 percent of all reverse mortgages 
nationally but the company was responsible for 39 percent of all 
reverse mortgage foreclosures.

``It calls into question the practices of this bank and again, are they 
callously foreclosing on seniors? Are they cutting corners if they're 
foreclosing at twice the rate they should be?'' Gonzalez said.

Mnuchin refused to be interviewed. His spokesperson, Tara Bradshaw, 
said some government reports show OneWest forgave delinquent borrowers 
more often than bigger banks. She also said OneWest had an ``extremely 
low error rate.''

``Anyone who attacks Steven Mnuchin over his track record in saving the 
homes of delinquent borrowers either doesn't understand the facts or 
has a blatant political agenda here,'' Bradshaw said.

Action News Investigates found some instances in western Pennsylvania 
where OneWest was sued because of errors it allegedly made.

In one case, a Venetia homeowner said OneWest violated Federal law by 
``hounding'' him and making ``false and misleading statements'' by 
demanding money he did not owe. The case was settled.

In another case, an Oakmont homeowner said OneWest called him 56 times 
over 2 months causing ``emotional distress'' and a ``blatant disregard 
of the law and the orders of this court.'' That case was also settled.

Mlinek voted for Trump. Now she's having second thoughts.

Reporter Paul Van Osdol asked what she would like to tell Mnuchin.

``I would tell him there's many, many more people like me that he's 
dealt with, and you've got to have a heart,'' Mlinek said.

Mnuchin left OneWest last year after it was taken over by CIT. He 
walked away with $10.9 million in severance pay.

His track record at OneWest is expected to come under a microscope when 
the Senate holds hearings on Mnuchin's appointment as treasury 
secretary.


                                                   Making Home Affordable: Summary Results PProgram Performance Report Through September 2013
                                                                    HAMP Modification Activity by Servicer and Investor Type
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                              Active Trial                                        Total Active Modifications
                                                           HAMP Permanent                    Modifications        Active     -------------------------------------------------------------------
       Servicer            Trial Plan    All HAMP Trials   Modifications     Active Trial      Lasting 6        Permanent
                        Offers Extended      Started          Started       Modifications      Months or      Modifications         GSE            Private         Portfolio          Total
                                                                                                 Longer
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
Bank of America, N.A.          582,295          250,251          113,118            5,478            1,594           76,886           24,791           41,849           15,724           82,364
CitiMortgage, Inc.             222,027          142,646           70,462            3,467            1,148           52,864           32,633            6,193           17,505           56,331
JPMorgan Chase Bank,           434,710          322,240          191,097            5,775            1,007          145,440           67,176           53,361           30,678          151,215
 N.A.
Nationstar Mortgage             71,765          179,239          118,368            4,731            1,003           87,467           57,133           33,057            2,008           92,198
 LLC
Ocwen Loan Servicing,          293,354          333,007          233,129           14,501            1,082          160,409           39,066          119,517           16,327          174,910
 LLC
OneWest Bank *                 101,739           44,102           28,775            1,165               44           21,743                2           19,672            3,234           22,908
Select Portfolio                86,776           91,745           52,239            5,257            1,191           30,129              458           30,851            4,077           35,386
 Servicing, Inc.
Wells Fargo Bank, N.A.         275,927          305,007          179,733            8,957              771          135,690           55,701           28,135           60,811          144,647
Other Servicers                269,017          440,893          281,714           10,464            1,974          198,592          170,880           16,692           21,484          209,056
Total                        2,337,610        2,109,130        1,268,635           59,795            9,814         909,220           447,840          349,327          171,848         969,015
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
* OneWest Bank recently sold mortgage servicing rights to Ocwen Loan Servicing, LLC. The transfer is expected to close in stages during the second half of 2013. Therefore, Ocwen Loan
  Servicing, LLC includes a portion of the loans previously reported under OneWest Bank.


                                 ______
                                 
              Prepared Statement of Hon. Orrin G. Hatch, 
                        a U.S. Senator From Utah
WASHINGTON--Senate Finance Committee Chairman Orrin Hatch (R-Utah) 
today delivered the following opening statement at a hearing to 
consider the nomination of Steven Mnuchin to head the U.S. Treasury 
Department:

    Today we will discuss the nomination of Mr. Steven Mnuchin to serve 
as Secretary of Treasury for the incoming Trump administration.

    I want to officially welcome Mr. Mnuchin to the Finance Committee. 
I appreciate your willingness to appear before us here today and to 
serve in this important position.

    The position of Treasury Secretary is among the most important in 
the executive branch.

    The next Treasury Secretary will be tasked with advancing policies 
that will improve our Nation's economic and fiscal outlook. The 
position oversees both the collection of taxes and the management of 
our debt.

    In addition, as Congress works to reform our Nation's tax code and 
fix our broken health-care system, it is absolutely essential that we 
have a cooperative partner overseeing Treasury. That is, quite frankly, 
something that has been missing for the past eight years as the Obama 
Treasury has become increasingly opaque and non-responsive to inquiries 
and communications from members of Congress.

    So, as we consider Mr. Mnuchin's nomination, ensuring that both 
Congress and the incoming administration are committed to sharing 
information and communicating on policy will be among my top 
priorities.

    And, in that regard, I believe the President-elect has selected a 
nominee who will provide a clear channel of communication and be 
willing to work with Congress on these all-important efforts.

    Another priority for me will be the advancement of pro-growth trade 
policies. While USTR is the principal agency for international trade 
policy, Treasury plays a key role in several important areas, including 
the development of international investment agreements and oversight of 
Customs revenue functions.

    As the new administration comes in, I want to make sure, first and 
foremost, that our trade policies do no harm. Proposals to, for 
example, impose unilateral import tariffs as a key tool of 
international economic policy need to be carefully evaluated to ensure 
they do not hurt us at home.

    In addition, I want to make sure that any new trade agreements 
establish the highest standards for U.S. stakeholders, consistent with 
the Trade Promotion Authority statute enacted in 2015.

    Finally, I expect you to engage in much better consultations with 
the committee regarding U.S. trade policies then we have had under 
President Obama.

    I look forward to a productive conversation about these issues 
today and in the coming months.

    Objectively speaking, I don't believe anyone can reasonably argue 
that Mr. Mnuchin is unqualified for the position.

    He has three decades of experience working in the financial sector 
in a variety of capacities.

    He has been a leader and a manager throughout his career, 
demonstrating an ability to make tough decisions and to be accountable.

    And, he has a reputation for being a problem-solver and an 
excellent communicator. Indeed, we have heard from numerous 
organizations and associations in a wide variety of industries all 
expressing their admiration for Mr. Mnuchin and their support for his 
nomination.

    Put simply, if the confirmation process focused mainly on the 
question of a nominee's qualifications, there would be little, if any, 
opposition to Mr. Mnuchin's nomination.

    Unfortunately, that's not the world we're living in.

    Today, we are in the midst of an unprecedented effort to stall and 
prevent confirmation on the Cabinet nominations of an incoming 
President. It is disappointing that we've taken this turn in the Senate 
where the minority, openly and in so many words, is committed to 
obstructing nominees to positions across the board. In many cases, 
knowing full well that they cannot prevent outright the confirmation of 
nominees, my colleagues are content to unfairly, and in some cases 
maliciously, malign more or less every nominee before they can assume 
their posts.

    With regard to Mr. Mnuchin's nomination, we've seen quite a bit of 
consternation over the process and the timing of hearings. We've heard 
demands that we convene additional panels of witnesses, a step that has 
no precedent in the modern history of this committee. There was even a 
``mock hearing'' on this nomination yesterday, held outside of the 
committee, focused on issues that are essentially unrelated to the Mr. 
Mnuchin's qualifications.

    Let me be clear. While my colleagues may believe that nominees in 
the incoming administration should be treated differently than those of 
any previous administration, on this committee we have followed the 
same vetting and hearing process that has been in place for decades, 
applying to both Republicans and Democrats alike.

    With regard to the substantive arguments being made in opposition 
to Mr. Mnuchin, I am hesitant to go into too much detail before giving 
the nominee a chance to refute any accusations that have been made.

    That said, I do want to note a few simple facts.

    First, no one has credibly alleged that any laws, regulations, or 
industry standards were violated by companies run by Mr. Mnuchin. On 
the contrary, speaking of the main set of allegations regarding the 
foreclosure practices of OneWest Bank, all independent evaluations of 
the company's actions have resulted in high marks. This includes 
reviews by the FDIC Inspector General and the Department of Treasury.

    Second, any claims that Mr. Mnuchin's businesses contributed to the 
housing and foreclosure crisis that precipitated the financial collapse 
of 2008 are similarly lacking in merit. Mr. Mnuchin had no involvement 
in the mortgage market in the years leading up to the collapse. In 
fact, it is my understanding that, after purchasing IndyMac and all of 
its toxic mortgage assets, Mr. Mnuchin's company offered loan 
modifications to the vast majority of its delinquent borrowers and was 
one of the very first institutions to make offers to forgive portions 
of loan principal balances in order to reduce foreclosures.

    To that point, Mr. Mnuchin is joined by a guest today: Ms. Faith 
Bautista, President and CEO of the National Asian American Coalition 
and head of the National Diversity Coalition. In those capacities, she 
worked with many homeowners to work out loan modifications with OneWest 
Bank. She is here today to support Mr. Mnuchin's nomination.

    Finally, I'll just note that those making claims that Mr. Mnuchin's 
connection to the mortgage and banking industry is, on its own, 
disqualifying are conveniently forgetting that the current Treasury 
Secretary's tenure at a major Wall Street bank included overseeing 
business units that were sanctioned by the SEC and others for practices 
that harmed innocent investors. Yet, when his nomination came before 
the Senate, this connection to Wall Street and the financial crisis was 
deemed forgivable.

    Like I said, I'll let Mr. Mnuchin defend himself from the specious 
lines of attack, which, given the lack of credibility in the 
accusations, shouldn't be too difficult for a man of his talents.

    For now, I simply hope that we can have a fair and open discussion 
during the course of what will likely be a long hearing. And, I hope 
that, going forward, my colleagues will apply the same standards, both 
in terms of process and policy substance, that have applied to nominees 
in previous administrations.

    Once again, I want to thank Mr. Mnuchin for being here today. I 
look forward to hearing his testimony.

                                 ______
                                 
                Letters Submitted by Hon. Orrin G. Hatch
                      National Diversity Coalition

                     15 Southgate Avenue, Suite 200

                          Daly City, CA 94015

                         Phone: (650) 952-0522

                          Fax: (650) 952-0530

January 2, 2017

       National Diversity Coalition Supports Steven Mnuchin for 
                     U.S. Secretary of the Treasury

Dear Chairman Hatch and Senator Wyden,

Many members of the National Diversity Coalition have worked with Mr. 
Mnuchin and OneWest/CIT over the past 5 years. Based upon his 
commitments to building a strong economy, including greater 
homeownership, more effective small business development, and youth 
financial literacy, we support Mr. Mnuchin's nomination as Secretary of 
the Treasury.

The National Diversity Coalition includes the leadership of our 
nation's 5,000 African Methodist Episcopal churches and 40,000 Latino 
evangelical churches, as well as leadership from major minority 
business chambers of commerce, such as the Los Angeles Latino Chamber 
of Commerce, and a broad range of minority nonprofits such as the 
National Asian American Coalition.

It is the expectation of the National Diversity Coalition that as 
Secretary of the Treasury Mr. Mnuchin will:

      work on efforts to expand homeownership from the present 50-year 
low of 62% to at least 70% of Americans;
      expand small business opportunities and assistance to move 
America from 29 million small business owners to 40 million small 
business owners; and
      reduce unemployment among those without college degrees to a 
level consistent with the overall 4.6% unemployment rate in the U.S.

As a first step, we hope and expect that Mr. Mnuchin will form a U.S. 
Treasury Consumer Advisory Board and will regularly meet with community 
members, including those who represent our nation's 130 million 
minorities and the 70% of Americans who live from paycheck to paycheck.

We also support the letter with more than 1,000 homeowner and small 
business owner signatories sent by the National Asian American 
Coalition on behalf of Mr. Mnuchin's confirmation as Secretary of the 
Treasury. Many of the leaders of the organizations signing this letter 
are prepared to testify at Senate hearings on Mr. Mnuchin's 
confirmation.

Most respectfully,

Faith Bautista
President and CEO, National Asian American Coalition
CEO, National Diversity Coalition

Mark Whitlock
Senior Minister, COR AME Church, Irvine, CA
Director of Corporate Partnerships, 5,000 African Methodist Episcopal 
Churches
Executive Director, Ecumenical Center for Black Church Studies
Chair, Orange County Interdenominational Alliance
Chair, National Diversity Coalition
Executive Director of the Cecil Murray Center for Community Engagement 
at USC

Jack Miranda
Vice Chair, Orange County Interdenominational Ecumenical Council
Secretary, National Diversity Coalition

Gilbert Vasquez
Chair, Los Angeles Latino Chamber of Commerce Serving 330,000 Latino 
Businesses
Treasurer, National Diversity Coalition

Regeanie Corona
CEO, Advancing the Seed

Cora Oriel
President, Asian Journal Publications

Jin Sung
Executive Director, OASIS Center International

Everett Bell
Founder and Executive Director, Impact Southern California Community 
Development Corporation

                                 ______
                                 
December 29, 2016

The Honorable Orrin Hatch
Chairman
Committee on Finance
U.S. Senate
Washington, DC 20510

The Honorable Ron Wyden
Ranking Member
Committee on Finance
U.S. Senate
Washington, DC 20510

       Appointment of Steven Mnuchin for U.S. Treasury Secretary

Dear Sirs,

    I am writing to show my support for the nomination of Steven 
Mnuchin to serve as the United States Secretary of the Treasury in the 
incoming Donald Trump administration.

    As a minority-owned small business, our greatest concern pertains 
to the economic and job opportunities within our community and beyond. 
With the experience that Mr. Mnuchin has gained during his career in 
the finance and banking sectors, I believe he is readily equipped to 
serve our country and tackle the concerns of our constituents head on. 
His prior leadership positions have sculpted him into an ideal 
candidate to help the Treasury Department achieve the nation's 
financial objectives. Without a doubt, I know that Mr. Mnuchin will 
serve our country effectively and efficiently as the United States' 
next Secretary of the Treasury.

With utmost respect,

Royal Placement Services
Sylmar, CA

                                 ______
                                 
December 25, 2016

The Honorable Orrin Hatch
Chairman
Committee on Finance
U.S. Senate
Washington, DC 20510

The Honorable Ron Wyden
Ranking Member
Committee on Finance
U.S. Senate
Washington, DC 20510

Appointment of Steven Mnuchin for U.S. Treasury Secretary

Dear Sirs,

We are writing to show our support for the nomination of Steven Mnuchin 
to serve as the United States Secretary of the Treasury in the incoming 
Donald Trump administration.

We believe Mr. Mnuchin's appointment and service will greatly benefit 
our country, based on his much-admired performance in various executive 
and leadership positions in the finance and banking sectors. His vast 
experience in these areas makes him an ideal candidate to help the 
Treasury Department achieve its main objectives, including:

  Maintaining a strong economy;
  Creating economic and job opportunities by promoting the conditions 
that enable economic growth and stability at home and abroad;
  Strengthening national security by combating threats and protecting 
the integrity of the financial system; and
  Managing the U.S. Government's finances and resources effectively.

Respectfully yours.

This letter was signed by 728 individuals and organizations.

                                 ______
                                 
January 2, 2017

The Honorable Orrin Hatch
Chairman
Committee on Finance
U.S. Senate
Washington, DC 20510

The Honorable Ron Wyden
Ranking Member
Committee on Finance
U.S. Senate
Washington, DC 20510

Strong Minority Small Business Support for our Next Secretary of the 
Treasury

Dear Chairman Hatch and Senator Wyden,

America has 29 million small business owners. Small business owners are 
responsible for more than half of all new jobs in America. Today, as a 
result of too many regulatory agencies and a lack of a deep commitment 
to small business development, most small business owners and/or 
potential small business owners are unable to expand or start new 
businesses.

In too many cases, cabinet and regulatory agency leadership feud among 
themselves as to how regulators should encourage small business. We 
favor a Secretary of the Treasury such as Steven Mnuchin who has the 
experience and the commitment to bring agencies together to promote 
America's strongest domestic asset: small businesses and small business 
owners.

We are prepared to testify on behalf of Steven Mnuchin as our new 
Secretary of the Treasury, particularly if the hearing is held in 
Southern California. That is, the U.S. Senate should come to the small 
business owners for advice and input rather than small business owners 
being forced to testify in DC, the home of tens of thousands of self-
interested lobbyists.

Most respectfully,

Willie Chu, Nautilus Seafood
Wayne Berman, Nautilus Seafood
Rodel Fuentes, Distinctive Contractors

                                 ______
                                 
                    Team Freedom International Inc.

                      17127 Pioneer Blvd., Suite K

                           Artesia, CA 90701

                            P: 844-270-3563

              https://www.teamfreedominternationalinc.com/

December 27, 2016

The Honorable Orrin Hatch
Chairman
Committee on Finance
U.S. Senate
Washington, DC 20510

The Honorable Ron Wyden
Ranking Member
Committee on Finance
U.S. Senate
Washington, DC 20510

Appointment of Steven Mnuchin for U.S. Treasury Secretary:

To Whom It May Concern,

I, Joel Esteves, CEO of Team Freedom International, Inc. hereby give my 
full support to the installation of the new U.S. Secretary of the 
Treasury--Mr. Steven Mnuchin.

With his background in Real Estate, Investment and the banking system, 
I truly believe that he is the right person for the position that Mr. 
Trump appointed him for.

He has displayed true leadership in the past and must be very confident 
in surpassing people's expectations for his new role as the new U.S. 
Secretary of the Treasury.

More power to Mr. Steven Mnuchin.

Very truly yours

Joel Esteves

                                 ______
                                 
                              VantageScore

                    1055 Washington Blvd., 3rd Floor

                           Stamford, CT 06901

                     https://www.vantagescore.com/

                            T: 203-363-2160

                            F: 203-569-0010

December 28, 2016

The Honorable Orrin Hatch           The Honorable Ron Wyden
Chairman                            Ranking Member
Committee on Finance                Committee on Finance
U.S. Senate                          U.S. Senate
Washington, DC 20150                Washington, DC 20150

Dear Chairman Hatch and Ranking Member Wyden:

I am writing today to lend my voice in support of President-elect 
Trump's nomination of Steven Mnuchin to serve as Secretary of the 
Treasury. If confirmed, Mr. Mnuchin would bring with him to the office 
of Secretary of the Treasury a wealth of diverse experience. While I do 
not know Mr. Mnuchin personally, others who do know him and whose 
judgment I trust have assured me of their confidence in his character, 
temperament, and abilities.

Last November 30th, the day it was announced that Mr. Mnuchin was 
President-elect Trump's choice to serve as Secretary of the Treasury, 
Mr. Mnuchin participated in a wide-ranging interview on CNBC's Squawk 
Box. Two of the points he made during that interview struck me as 
particularly relevant to his nomination to serve as Secretary of the 
Treasury because of the underlying tone of inclusiveness. Specifically, 
he not only noted that the Trump administration's ``most important 
priority is to sustained economic growth'' but he also stated very 
clearly that ``our job is to make sure that the average American has 
wage increases and good jobs.''

I strongly encourage you to schedule a confirmation hearing on Mr. 
Mnuchin's nomination at the earliest possible opportunity.

I trust that you find this input useful as you move forward with the 
nomination process. If you or other Members of the Committee have any 
questions or if I can be of further assistance in any way, please don't 
hesitate to contact me.

Sincerely,

Barrett Burns
President and CEO
[email protected]

                                 ______
                                 
                   Mortgage Bankers Association (MBA)

                      1919 M Street NW, 5th Floor

                          Washington, DC 20036

                          https://www.mba.org/

                             (202) 557-2700

January 17, 2017

The Honorable Orrin Hatch
Chairman
Committee on Finance
U.S. Senate
219 Dirksen Senate Office Building
Washington, DC 20510

The Honorable Ron Wyden
Ranking Member
Committee on Finance
U.S. Senate
219 Dirksen Senate Office Building
Washington, DC 20510

Dear Chairman Hatch and Ranking Member Wyden,

On behalf of the Mortgage Bankers Association (MBA), I am writing you 
regarding the nomination of Steven T. Mnuchin to serve as the next 
Secretary of the Treasury. I urge the Senate Finance Committee to 
approve his nomination as quickly as possible.

MBA believes the Treasury Department needs to address several critical 
issues that will have a positive impact on our nation's real estate 
finance market. First, more than eight years since the federal 
government took control of Fannie Mae and Freddie Mac, it is critical 
that the next administration work with Congress and key stakeholders to 
enact legislative reforms to our secondary markets and provide long-
term certainty to the housing finance system. The next Treasury 
Secretary will play an integral role in these efforts. Second, there is 
bipartisan agreement that our nation's economy would be strengthened 
through the enactment of growth-promoting comprehensive tax reform. MBA 
and its members stand ready to work with all stakeholders regarding 
this process. We are committed to supporting tax reform legislation 
that will provide appropriate incentives for homeownership and promote 
growth in our country's residential, rental and commercial real estate 
markets. Finally, we urge the next Treasury Secretary to reevaluate 
international capital regimes to ensure they do not place U.S. 
financial institutions at a competitive disadvantage.

MBA believes Mr. Mnuchin's experience uniquely prepares him to 
understand and respond to the complex challenges that will face the 
next Treasury Secretary. We believe he will put his extensive talents 
to use in ways that will seek to strengthen America's housing markets 
and provide regulatory certainty for the real estate finance industry.

I would again respectfully urge the Finance Committee and, in turn, the 
full Senate, to approve Mr. Mnuchin's nomination. MBA looks forward to 
working with him in his new role. Thank you in advance for your 
consideration of these views.

Sincerely,

David H. Stevens, CMB
President and Chief Executive Officer

                                 ______
                                 
                National Asian American Coalition (NAAC)

                     15 Southgate Avenue, Suite 200

                          Daly City, CA 94015

                         Office (650) 952-0522

                           Fax (650) 952-0530

                          http://www.naac.org/

January 3, 2017

          Why Asian American Community Supports Trump Nominee 
                     for Secretary of the Treasury

Dear Chairman Hatch and Senator Wyden,

The National Asian American Coalition is one of the largest pan Asian 
American coalitions in America. We represent Asian Americans who wish 
to be homeowners and entrepreneurs, and we are strong proponents of 
effective youth financial literacy, particularly as it effects the many 
underserved Asian American communities throughout the U.S.

Although we and many other communities opposed many of the IndyMac 
policies and practices, including reverse mortgages and foreclosures, 
we recognized the crisis in 2008. We therefore reluctantly accepted the 
decision of the FDIC to sell IndyMac to the only investors interested 
in making a bid. In large measure our support is attributable to our 
high respect for, and confidence in, then-FDIC chair Sheila Bair. Even 
from the perspective of hindsight, we are unclear that there was any 
other choice at the time for the FDIC and Sheila Bair. We personally 
witnessed Mr. Mnuchin's actions to protect homeowners during this time 
by offering them loan modifications.

This letter of support for Secretary of the Treasury Nominee Steven 
Mnuchin is based in significant part on our coalition's recent meetings 
with Mr. Mnuchin and our continued relationship with CIT and its CEO. 
It is our belief that the past practices of IndyMac that are presently 
being questioned are not a predictor of Steven Mnuchin's leadership 
qualities as Secretary of the Treasury.

Based upon our meetings with many former Secretaries of the Treasury, 
including Summers, O'Neill, Geithner, and Lew, it is our belief that 
the new Secretary of the Treasury, Mr. Mnuchin is highly likely to 
carefully examine Treasury policies in the context of their impact on 
the 70% of Americans who live from paycheck to paycheck and our 
nation's 130 million minorities, including 20 million Asian Americans.

As a result of the actions of Mr. Mnuchin described above, and his 
commitment to further work on behalf of communities of color, the 
National Asian American Coalition was able to gather more than 1,000 
individual signatures in support of his nomination.

Most importantly, we envision a Treasury Department that is as friendly 
to the 70% of Americans who live from paycheck to paycheck as it is to 
the highest-paid lobbyists, many of whom are among the one-tenth of 1% 
of Americans.

We are fully prepared and open to an invitation to testify on behalf of 
Mr. Mnuchin's confirmation as our next Secretary of the Treasury.

Most respectfully,

Faith Bautista
President and CEO
National Asian American Coalition

                                 ______
                                 

                   National Asian American Coalition

                      15 Southgate Ave., Suite 200

                          Daly City, CA 94015

January 16, 2017

The Honorable Orrin Hatch
Chairman
Committee on Finance
U.S. Senate
Washington, DC 20150

The Honorable Ron Wyden
Ranking Member
Committee on Finance
U.S. Senate
Washington, DC 20150

The National Asian American Coalition supports the nomination of Mr. 
Steven Mnuchin to become the Secretary of Treasury. Attached are 
letters from our home owners and colleagues that had IndyMac/OneWest 
home loans and had been modified during the financial crisis. Our 
organization is a HUD Approved housing counseling agency that helps a 
lot of homeowners keep their homes. IndyMac/OneWest Bank was one of the 
banks that we worked with and had successfully modified home loans.

If you have any further questions, please contact our head office in 
Daly City, California at 650-952-0522.

Thank you.

                                 ______
                                 
January 15, 2017

To whom it may concern,

My family's residential home was with IndyMac bank. My father, Rene 
Valbuena, was the borrower. My father was diagnosed with cancer in 2009 
and we could not afford to pay for our mortgage payment since he was 
one of the main income providers. We submitted our loan modification 
request and submitted what was needed for the process. The 
communication was good and we were not passed around from one 
representative to another. After 2 months, we got our approval for our 
trial modification. We continued to pay the new modified monthly 
payment and it became permanent after the 3 months trial period. We 
were very grateful that our loan got modified. We chose to sell the 
property later on when my dad's cancer came back.
                      my dad's letter to indymac 
                 (sent during the time of modification)
Thank you for approving me for the trial modification. Attached are the 
documents you required to update my loan modification files. The only 
thing lacking in my submission is the 2008 income tax return. I am 
trying to reconstruct my documents and I still intend to file my 
returns soon as I put together my paperwork. A lot were misplaced 
because I was seriously ill. I was able to file the 2009 since I now 
feel much better and could focus. Last year I was not able to file the 
2008 because I was concentrating on staying alive. As I stated in my 
hardship letter, I was diagnosed with cancer last year. I had to stop 
working and was unable to keep track of papers I need to file. I had 
chemotherapy, radiation, and prophylactic cranial irradiation. I was 
hospitalized 3 times and it is just this year that I am still 
recovering from side effects. With God's help I am now in remission and 
starting to do part time work.

Leica Valbuena

                                 ______
                                 
January 16, 2017

I am a previous homeowner in Walnut Creek, CA. My loan was with IndyMac 
Bank with high interest and approximately $4,632.00 and a second 
mortgage with a payment of $1,400.00 per month. I fell behind payments 
and my loan became in default after my spouse was diagnosed with 
cancer. My financial stability was greatly affected after all my credit 
cards were exhausted thus causing me to file chapter 13 bankruptcy.

OneWest Bank offered a loan modification with a lower monthly payment 
including interest rate. I decided to walk away because I am still 
unable to afford the payment due to reduction in income. They were very 
accommodating and even offered a moving allowance of $5,000. I am 
thankful for everything they have done for me and my family.

Nora Penaflor

                                 ______
                                 
January 16, 2017

Our names are Elpidio Delos Reyes and Nida Delos Reyes, located in 
Richmond, CA 94806. Our family asked for a loan modification from 
OneWest Bank on November 2011 through the help of the National Asian 
American Coalition. We were pleased with the process of how our 
paperwork was handled. We were never given any problem by OneWest Bank. 
They assigned only one single point of contact which makes it a lot 
easier and the process went smoothly.

Because of OneWest Bank's help and NAAC, we recommend Steven Mnuchin to 
be the Secretary of the Treasury. We were told that he was leading the 
bank when we got modified.

We thank Mr. Mnuchin and OneWest Bank.

Sincerely,

Nida Delos Reyes

Elpidia Delos Reyes

                                 ______
                                 
January 14, 2017

My name is Mailene Pacifico. I am located in San Leandro, CA. I have an 
equity line of credit with OneWest Bank of $53,176.00. We did a short 
sale of our home in June 2009. We thought our line of credit was also 
taken care off. Our credit still shows outstanding and we are having a 
hard time getting approval for any type of financing.

We went to National Asian American Coalition to ask for help. NAAC 
wrote a letter to OneWest Bank to ask for help so we can buy a home 
again. We are very pleased of the immediate action that OneWest Bank 
took for us. They did the necessary action so it will not show on our 
credit.

Because of OneWest Bank's leadership, we truly thank Mr. Mnuchin and 
OneWest Bank.

Sincerely,

Maileen Pacifico

                                 ______
                                 
December 27, 2016

The Honorable Orrin Hatch
Chairman
Committee on Finance
U.S. Senate
Washington, DC 20510

The Honorable Ron Wyden
Ranking Member
Committee on Finance
U.S. Senate
Washington, DC 20510

         Families for a Better America Supports Steven Mnuchin 
                      for U.S. Treasury Secretary

Dear Sirs,

We respectfully urge you to help ensure that Steven Mnuchin becomes the 
next Secretary of the Treasury.

As the public record clearly shows, Mr. Mnuchin has the required 
training and leadership experience--particularly in the finance and 
banking sectors--that make him the ideal candidate to lead the U.S. 
Treasury Department in achieving its critical goals for the country. 
These include:

      The maintenance of a strong economy;

      The creation of jobs for those who have lost theirs and for 
those who are just entering the job sector;

      The protection of our financial system; and

      The effective management of our country's financial and other 
resources.

Respectfully yours,

Families for a Better America

This letter was signed by 266 individuals and organizations.

                                 ______
                                 
January 3, 2017

The Honorable Orrin Hatch
Chairman
Committee on Finance
U.S. Senate
Washington, DC 20510

The Honorable Ron Wyden
Ranking Member
Committee on Finance
U.S. Senate
Washington, DC 20510

    Business Owners in Support of Steven Mnuchin for U.S. Treasury 
                               Secretary

Dear Sirs,

We respectfully urge you to help ensure that Steven Mnuchin becomes the 
next Secretary of the Treasury.

As the public record clearly shows, Mr. Mnuchin has the required 
training and leadership experience--particularly in the finance and 
banking sectors--that make him the ideal candidate to lead the U.S. 
Treasury Department in achieving its critical goals for the country. 
These include:

      The maintenance of a strong economy;
      The creation of jobs for those who have lost theirs and for 
those who are just entering the job sector;
      The protection of our financial system; and
      The effective management of our country's financial and other 
resources.

Respectfully yours,

Robert Aguilar
Rolando Esteban
Small business owners

                                 ______
                                 
                      American Bankers Association

                      1120 Connecticut Avenue, NW

                          Washington, DC 20036

                             1-800-BANKERS

                          https://www.aba.com/

January 12, 2017

The Honorable Orrin G. Hatch
Chairman
Committee on Finance
U.S. Senate
SD-219 Dirksen Senate Office Building
Washington, DC 20510

The Honorable Ron Wyden
Ranking Member
Committee on Finance
U.S. Senate
SD-219 Dirksen Senate Office Building
Washington, DC 20510

Dear Chairman Hatch and Ranking Member Wyden:

The American Bankers Association supports the confirmation of Steven T. 
Mnuchin as Secretary of the Treasury. ABA represents banks of all 
sizes, charters, and business models across the country. This 
diversity--which includes community, mutual, and trust banks as well as 
mid-size, regional, and globally active institutions--is critical to 
supporting America's complex, $19-trillion economy, and the people, 
businesses, and communities that make up that economy.

Among the many responsibilities of the Treasury Secretary, foremost is 
the Secretary's responsibility to encourage and promote the economic 
strength of the United States, and to advise the President to that end. 
The economic growth and strength of the United States is also what lies 
at the core of the business of banking. Our industry grows only as do 
the economy and finances of the nation, and as the people, communities, 
and businesses of the nation grow and prosper. We look forward to 
working with Mr. Mnuchin should he be confirmed by the Senate, on 
policies that will reinforce financial recovery and economic progress. 
His public statements as well as his career in finance bring us 
optimism with regard to the outlook for public policies focused on 
growth and prosperity.

Shortly following the November election, we sent a letter to President-
elect Trump outlining some of the key policies that we believe would 
make an important contribution to a thriving economy. We particularly 
focused on smart regulation, bank supervision that is tailored and 
balanced to fit more efficiently and effectively the variety of 
business models presented by the thousands of banks in the U.S., and in 
the ways that they meet the various needs of their customers. The 
Treasury Secretary has an important role in encouraging financial 
regulators to coordinate their work, particularly in keeping with the 
needs for strong, prudential development of the economy.

ABA also believes that efforts in the coming months should incorporate 
attention to small business growth, the burdens of student debt, a 
thriving housing market that includes mortgage availability and 
appropriate housing finance reform. High on the priority list would 
also be reforming flood insurance, innovation that embraces 
technologies that improve the quality and accessibility of financial 
services, reinforcing cyber security and combating data breaches and 
financial fraud, and promoting the role of the market place in pricing 
payments systems and other financial services.

We look forward to working with the Treasury Secretary on these 
important issues and support the Committee's work to move forward with 
the nomination of Secretary-nominee Steven T. Mnuchin.

Sincerely,

Dorothy A. Savarese                 Rob Nichols
Chairman                            President and CEO
American Bankers Association        American Bankers Association
Chairman, President, and CEO
Cape Cod Five Cents Savings Bank
Orleans, MA

                                 ______
                                 
                        Ambassador Ronald Weiser

January 16, 2017

The Honorable Orrin Hatch           The Honorable Ron Wyden
Chairman                            Ranking Member
Committee on Finance                Committee on Finance
U.S. Senate                         U.S. Senate
Washington, DC 20510                Washington, DC 20510

Dear Chairman Hatch and Ranking Member Wyden:

I am writing today to express my strong support of President-elect 
Trump's nomination of Steven Mnuchin to serve as the next Secretary of 
the Treasury. If confirmed, Mr. Mnuchin would bring a wealth of 
knowledge and experience to the office. He has spent the last 30 years 
working in global trading markets, technology, operations, housing 
finance, regional banking and has a deep understanding of the financial 
markets that make him uniquely qualified to serve as the Treasury 
Secretary.

I have gotten to know Steven in his role as National Finance Chairman 
for Trump Victory. Having served with him as one of the six vice chairs 
of Trump Victory, I have had the opportunity to view his approach to a 
variety of tasks and to understand why he was chosen for this role. His 
years of work experience coupled with his ability to juggle a large 
number of balls in the air while keeping the finish line in clear sight 
makes him an ideal candidate. I also believe his banking experience and 
understanding of smaller local and regional banks could be helpful as 
we try to preserve these types of institutions for future generations.

I firmly believe that Steven is meant to hold this post, and strongly 
encourage members of the committee to proceed with his confirmation. If 
I can be of further assistance in any way please don't hesitate to 
contact me.

Sincerely,

Ambassador Ronald Weiser (ret.)

                                 ______
                                 
                       Vintage Capital Group, LLC

                11611 San Vicente Boulevard, 10th Floor

                         Los Angeles, CA 90049

                              310-979-9090

                            310-207-0035 fax

_______________________________________________________________________

                     From Carla H. Sands, Chairman

January 10, 2017

The Honorable Orrin Hatch           The Honorable Ron Wyden
Chairman                            Ranking Member
Committee on Finance                Committee on Finance
U.S. Senate                         U.S. Senate
Washington, DC 20510                Washington, DC 20510

Dear Chairman Hatch and Ranking Member Wyden:

I am reaching out to you today to voice my strong support for 
President-elect Trump's Secretary of the Treasury Nominee, Steven 
Mnuchin. Steven possesses deep levels of financial knowledge and has 
demonstrated, time and time again, excellent and measured decision-
making abilities. His knowledge of the global economic system is 
sufficiently well-rounded, and I believe he is fully qualified to serve 
as this nation's next Treasury Secretary.

I have known Steven for over 7 years, both personally and 
professionally. He is a man of outstanding character and integrity. 
Steven has proven himself to be an exceptional and philanthropic member 
of the community with a superb reputation.

The economic engine of America has been stalled for the last 8 years, 
due to high tax rates and onerous regulations. Steven Mnuchin and the 
Trump Economic Advisory team are proposing new and lower tax rates to 
get the economy moving again. Steven, as Secretary of the Treasury and 
working hand-in-hand with Congress, will spark America's long-awaited 
economic revival as business and individual tax rates are lowered and 
the entrepreneurial spirits of America unleashed.

It is my hope that members of the committee proceed with Steven's 
confirmation process on an expedited basis. Our country needs him.

Please let me know if I can be of further assistance to your committee.

Sincerely,

Carla Sands

                                 ______
                                 
                          Stone Point Capital

                                            Stone Point Capital LLC
                                                  20 Horseneck Lane
                                                Greenwich, CT 06830
                                      203-862-2970 Fax 203-862-2971
                                              [email protected]

January 12, 2017

The Honorable Orrin Hatch           The Honorable Ron Wyden
Chairman                            Ranking Member
Committee on Finance                Committee on Finance
U.S. Senate                         U.S. Senate
Washington, DC 20510                Washington, DC 20510

Dear Chairman Hatch and Ranking Member Wyden:

It is my privilege to provide this letter of support without 
reservation for the nomination of Steven Mnuchin to serve as the 
Secretary of the Treasury.

I have known Mr. Mnuchin for approximately 30 years and am confident 
that he has the intelligence, experience, dedication, and temperament 
to be successful if confirmed as Secretary of the Treasury. He has a 
broad and deep base of knowledge that spans global markets, housing 
finance, technology, and banking, among other areas, and is one of the 
most effective and hard-working executives that I have met during my 
40-year career in the financial services industry. I firmly believe 
that Mr. Mnuchin is uniquely positioned to serve as both a thoughtful 
economic advisor to President-elect Trump and a strong leader of the 
growth, reform, and other initiatives to be pursued by the new 
administration.

I am CEO of Stone Point Capital, a private equity firm that invests 
exclusively in the financial services industry. Our clients include 
state investment funds, pension funds, endowments, and other leading 
institutions. During the height of the financial crisis in 2008, our 
firm entrusted Mr. Mnuchin with fiduciary funds for the opportunity 
that he created to bring capital into the U.S. banking system at a time 
of significant need. With this investment, I was able to witness 
firsthand how Mr. Mnuchin worked tirelessly and effectively to ensure 
that funding was available to allow IndyMac to transition out of FDIC 
conservatorship when most institutional investors were unwilling to 
provide any capital to our banking system.

IndyMac was a seriously challenged institution that had many 
organizational and other problems. Options for resolving IndyMac were 
extremely limited, and possibly non-existent, at the end of 2008. The 
actions of Mr. Mnuchin produced an option for the FDIC that saved the 
public from further losses and preserved thousands of jobs in 
California and Texas. Moreover the precedent established by the OneWest 
deal, the first resolution following the crisis, provided the FDIC with 
an effective model to resolve many other impaired financial 
institutions, saving U.S. taxpayers from many billions of dollars of 
losses.

It is important to note that Mr. Mnuchin has been the subject of unfair 
press reports related to his service at OneWest Bank. During the 6 
years of his leadership, I was able to observe how devoted Mr. Mnuchin 
was to ensuring that OneWest had the necessary policies, procedures, 
resources and staff to work through the many problems inherited with 
the acquisition of IndyMac's failed operations. According to the FDIC 
Office of the Inspector General, OneWest properly solicited and 
processed mortgage loan modifications more than 98% of the time, an 
outstanding record relative to its peers. Moreover, the review of 
crisis-era foreclosures by OneWest revealed no errors in many of the 
subject areas and error rates below one percent in most other review 
categories. I attribute this high level of accomplishment in an 
extremely challenging environment to unrelenting standards of 
excellence set by Mr. Mnuchin for the management team at OneWest.

Mr. Mnuchin is an outstanding candidate for Secretary of the Treasury, 
and I hope that members of the committee will proceed with his 
confirmation on an expedited basis.

Please do hesitate to contact me if I can be of any assistance as you 
complete your consideration of Mr. Mnuchin's nomination.

Sincerely,

Charles A. Davis,
CEO, Stone Point Capital LLC

                                 ______
                                 
                            Duke Buchan III

January 11, 2017

The Honorable Orrin Hatch           The Honorable Ron Wyden
Chairman                            Ranking Member
Committee on Finance                Committee on Finance
U.S. Senate                         U.S. Senate
Washington, DC 20510                Washington, DC 20510

Dear Chairman Hatch and Ranking Member Wyden:

I hope this letter finds both of you and the members of the Committee 
on Finance well.

Today, I write to the Committee with unwavering support of the nominee 
to serve as our next Secretary of the Treasury, Mr. Steven Mnuchin. 
Over a thirty-year business career with global and domestic financial 
institutions, Steven has consistently proven his innate ability to lead 
irrespective of the economic environment. Steven's steady hand 
throughout the entire IndyMac and OneWest episode resulted in tens of 
thousands of families finding solutions to their homeownership issues.

I had the pleasure of serving with Steven on President-elect Trump's 
Finance Team over the course of the campaign. Steven is intelligent, a 
problem solver, a solution-oriented leader, and an excellent 
communicator. I have spent many hours conversing with him about how to 
better serve our country. His ideas are insightful and practical. 
Steven will be a patriotic and dedicated public servant.

We need a Secretary of the Treasury who is focused and committed to 
elevating the United States to a higher level, both at home and on a 
global scale. Because of his background, Steven possesses the 
significant experience that is necessary to aid in the implementation 
of President-elect Trump's tax reform plans, as well as in modifying 
regulations that place unnecessary burdens on our country's businesses 
and workforce.

I fully endorse Steven for this critical position, and I believe that 
he will leave our country in a better place than he found it.

Feel free to reach out to me with any follow up questions that you may 
have.

Sincerely,

Duke Buchan III

                                 ______
                                 
                             Faith Schwartz

                            January 13, 2017

The Honorable Orrin Hatch           The Honorable Ron Wyden
Chairman                            Ranking Member
Committee on Finance                Committee on Finance
U.S. Senate                         U.S. Senate
Washington, DC 20510                Washington, DC 20510

      Re: Nomination of Steven Mnuchin for Secretary of the Treasury

Dear Chairman Hatch and Ranking Member Wyden:

I write in connection with the nomination of Steven Mnuchin to be 
Secretary of the Treasury. I do not know Mr. Mnuchin, but as the former 
executive director of the HOPE NOW Alliance, I am intimately familiar 
with the loan modification and home retention programs of OneWest Bank, 
which have played such a prominent role in the media coverage of Mr. 
Mnuchin's nomination. I therefore wanted to make sure that the 
Committee has accurate facts as it considers this important nomination.

HOPE NOW is a voluntary alliance between counselors, mortgage 
companies, investors, regulators, and other mortgage market 
participants created in 2007 with the strong encouragement of the 
Department of the Treasury and the Department of Housing and Urban 
Development. HOPE NOW brought together diverse stakeholders to 
collaborate to address challenges in mortgage servicing and to assist 
at-risk homeowners. Since 2007, HOPE NOW has played an important role 
in facilitating more than six million loan modifications and other 
foreclosure avoidance solutions for homeowners. I was proud to lead the 
organization from its inception during the financial crisis through 
early 2013.

Although the government encouraged the creation of HOPE NOW, membership 
is purely voluntary and not all banks and mortgage companies joined the 
alliance. Under Mr. Mnuchin's leadership, however, OneWest Bank joined 
early and took an active and leading role in rolling out homeowner 
assistance programs to its borrowers. In fact, OneWest was an early 
adopter of numerous voluntary loan modification programs, reflecting 
both the company's cultural commitment to home retention and Mr. 
Mnuchin's personal commitment to the FDIC to vigorously pursue 
foreclosure avoidance options wherever possible. For example, OneWest 
was one of the first banks to adopt the Principal Reduction 
Alternative, an optional part of the federal HAMP program under which 
participating servicers reduced borrower principal (non-participating 
institutions only reduced borrower interest rates, which was found to 
be a less sustainable model for borrowers who loan balances exceeded 
their property value). OneWest also was an early adopter of the 2MP 
program, which allowed servicers to modify qualifying second mortgages. 
OneWest was not required to offer any of these benefits to borrowers, 
and not all servicers adopted these programs. But OneWest's loan 
retention staff, as well as leadership, were committed to avoiding 
foreclosures where possible and were tremendous industry partners. To 
me, OneWest's consistent adoption of new home retention innovations 
spoke volumes about the company's commitment in this important area.

Home retention options for the industry were varied and lacked a 
strong, consistent structure until HOPE NOW members and investors began 
coordination on a national loan modification structure. These industry 
efforts were enhanced when the Government HAMP modification program was 
introduced to servicers and loan investors in 2009. As a reminder, a 
loan modification means there is a reduction in rate, or change in 
term, or reduction in principal balance of a loan. Introducing these at 
scale was challenging to the mortgage industry and the investor 
community. Yet both the volume and the quality of home retention 
options OneWest provided to its customers were highly regarded, both by 
me and my HOPE NOW colleagues and by the federal government offices 
overseeing servicer performance. Treasury Department reports on loan 
modifications show that OneWest offered more than 101,000 loan 
modifications to struggling homeowners. And when OneWest offered loan 
modifications, its offers included principal forgiveness as much as 
five times more often industry averages. Its loan modifications also 
stood out for sustainability: The rate at which its trial modifications 
were converted to permanent modifications was 91 percent, the highest 
rate in the industry.

I should note that OneWest's work to help borrowers through the 
financial crisis was not limited to modifications but also focused on 
refinance solutions. OneWest was a major supporter of the Obama 
Administration's HARP refinancing program, which encouraged banks to 
refinance high-rate mortgages on properties with little or no equity 
into more sustainable, lower rate loans. It is my view that this is one 
of the most important refinance programs that has been offered in the 
country, preventing subsequent foreclosures and modifications. The 
GSEs, the Federal Housing Finance Agency, and lender partners saved 
homeowners from default by supporting this innovative refinance 
program. In 2013, the last year before OneWest sold its mortgage 
business, the company originated more than $400 million in HARP 
refinance loans, including more than $70 million to minority borrowers. 
This last point is particularly relevant, since some media reports have 
suggested that the company failed to lend in minority communities based 
on data for the time period after OneWest exited the mortgage business.

I was very proud to lead HOPE NOW through this very dark economic time. 
The industry and homeowners struggled with record level defaults and 
the systems and processes were initially not adequate to accommodate 
the widespread national problems in the housing market. In order to 
make progress, the approaches to minimizing foreclosure needed 
reengineering, partnering, and strong communications, to make sure all 
options were reviewed to help troubled homeowners avoid foreclosures, 
and OneWest was an important partner and supporter in this effort.

Despite all efforts to mitigate foreclosures, OneWest, like all 
servicers, did foreclose on some borrowers. It is important to review 
the full picture of activity to understand the scope of the situation 
and the progress and failures through this time period. OneWest had far 
fewer foreclosures than solutions it offered to homeowners. The 
regrettable fact of the financial crisis is that, for a variety of 
reasons, some borrowers lacked the financial ability to make payments 
on their loan obligations on any reasonable terms. For these borrowers, 
the question is whether OneWest exhausted all home retention options 
before foreclosing, and it made material errors in the foreclosure 
process. The best evidence on this question comes from the government's 
report of the results of the Independent Foreclosure Review, which 
required the 14 largest mortgage banks to review all their post-crisis 
foreclosure for compliance errors. This report showed that OneWest made 
mistakes in the loan modification process less than one-half of one 
percent of the time. Per the report, it foreclosed on borrowers who 
were not liable for foreclosure only .001 percent of the time, and in 
that minuscule number of cases, it paid full restitution to the 
affected borrowers. Most every institution I worked with through the 
crisis put their heart and soul into helping homeowners. That often 
gets lost in the discussions. While even one avoidable foreclosure is 
too many, my experience working with financial institutions is that 
OneWest's compliance rate put it at or near the very top performance of 
servicers.

Let me reiterate that I do not know Steven Mnuchin personally but I 
dealt with his management team from the top ranks through the day-to-
day staff that worked directly with at-risk borrowers. They were very 
active with HOPE NOW and supportive of the many efforts underway to 
help borrowers in default. I have no political agenda in promoting his 
confirmation. But as the former head of the national organization 
dedicated to finding home retention solutions for struggling homeowners 
affected by the financial crisis, I believe the record should be clear 
about the actual record of OneWest in delivering solutions to many 
thousands of its customers during my tenure at HOPE NOW.

Very truly yours,

Faith Schwartz
Former Executive Director
HOPE NOW

                                 ______
                                 
                             Flagstar Bank

                                               5151 Corporate Drive
                                          Troy, Michigan 48098-2639
                                              Phone: (248) 312-2000
                                          https://www.flagstar.com/

January 13, 2017

The Honorable Orrin Hatch
Chairman
Committee on Finance
U.S. Senate
Washington, DC 20510

The Honorable Ron Wyden
Ranking Member
Committee on Finance
U.S. Senate
Washington, DC 20510

Re: Support for Steven Mnuchin to be Secretary of the U.S. Department 
of the Treasury

Dear Chairman Hatch and Ranking Member Wyden:

I am pleased to offer my strong support for Steven Mnuchin as Secretary 
of the U.S. Department of the Treasury.

At this moment of significant transition for our country, American 
banks are ready to do more to extend credit, support communities, job 
creation, and economic prosperity nationwide. As a leader of a mid-size 
bank, OneWest, Steven has a distinct appreciation for how mid-size 
institutions are perhaps best suited to do so and have an enormous 
impact on a local level. He also has first-hand knowledge of how some 
federal regulations are having adverse consequences that are inhibiting 
our ability to successfully meet more of the credit needs of consumers 
and businesses consistent with longstanding safety and soundness 
principles.

I am absolutely confident that Steven will use his experience of 
leading a mid-size bank, his considerable skill set and deep policy 
knowledge to pursue regulatory relief and reform that will expand jobs, 
incomes, and opportunities for Americans through economic growth.

I welcome his leadership and look forward to working with him.

Best regards,

Alessandro DiNello
President and CEO
Flagstar Bank

                                 ______
                                 
                            Hannah F. Buchan

January 11, 2017

The Honorable Orrin Hatch
Chairman
Committee on Finance
U.S. Senate
Washington, DC 20510

The Honorable Ron Wyden
Ranking Member
Committee on Finance
U.S. Senate
Washington, DC 20510

Dear Chairman Hatch and Ranking Member Wyden:

I write this committee to express my wish to see the swift confirmation 
of President-elect Trump's nominee for Secretary of the Treasury, Mr. 
Steven Mnuchin. Steven's qualifications for the lead Treasury position 
are extensive--he is distinctly prepared for the job at hand. For 
example, he was a partner at Goldman Sachs and member of the firm's 
management committee. He understands intimately global financial 
markets and at Goldman led a team of over 5,000 people with a $1-
billion technology budget. More recently, Steven demonstrated at 
OneWest that he was committed to finding solutions for the company's 
homeowner customers whenever possible.

Personally, I got to know Steven while working together on President-
elect Trump's Finance Committee. In every interaction, not only did he 
conduct himself as a consummate gentleman and professional, but 
furthermore, his passion and desire to serve the American people was 
crystal clear. I am happy, but more importantly proud, to call Steven 
Mnuchin a friend.

I believe it would certainly be in the best interest of the people of 
the United States of America to confirm Steven as our next Secretary of 
the Treasury.

Please let me know if I can be of any further assistance.

Sincerely,

Hannah F. Buchan

                                 ______
                                 
                         Continental Resources

                              405-234-9000

                              www.clr.com

January 10, 2017

The Honorable Orrin Hatch           The Honorable Ron Wyden
Chairman                            Ranking Member
Committee on Finance                Committee on Finance
U.S. Senate                         U.S. Senate
Washington, DC 20510                Washington, DC 20510

Dear Chairman Hatch and Ranking Member Wyden:

I am writing today in strong support of President-elect Trump's 
nomination of Mr. Steven Mnuchin to serve as the next Secretary of the 
Treasury.

Mr. Mnuchin will bring a wealth of real world knowledge and experience 
to the position. He has spent the last 30 years working in banking, 
technology operations, housing finance, and financial markets, 
developing a deep understanding of economic policies that make him 
uniquely qualified to serve as Treasury Secretary.

He has proven to be a solutions-oriented leader with strong team-
building and communications skills. These qualities will be needed for 
the Treasury Department to work with Congress and the Trump 
administration to craft a tax reform package that will spur economic 
growth, create jobs for hard-working Americans and allow U.S. 
businesses to compete in the global marketplace.

I believe Mr. Mnuchin is well-equipped to serve this country as 
Secretary of the Treasury, with an unrivaled commitment to protecting 
and supporting American workers.

I hope that members of this committee proceed with Mr. Mnuchin's 
confirmation process on an expedited basis.

If I can be of further assistance in any way, please don't hesitate to 
contact me.

Sincerely,

Harold Hamm

                                 ______
                                 
                         ESL Investments, Inc.

                     1170 Kane Concourse, Suite 200

                      Bay Harbor Islands, FL 33154

January 12, 2017

The Honorable Orrin Hatch           The Honorable Ron Wyden
Chairman                            Ranking Member
Committee on Finance                Committee on Finance
U.S. Senate                         U.S. Senate
Washington, DC 20510                Washington, DC 20510

Dear Chairman Hatch and Ranking Member Wyden:

I am writing today in strong support of President-elect Trump's 
nomination of Steven Mnuchin to serve as the next Secretary of the 
Treasury. If confirmed, Mr. Mnuchin would bring a wealth of knowledge 
and experience to the office. He has spent the last 30 years working in 
global capital markets, technology, operations, housing finance, and 
regional banking. This provides him with a deep understanding of the 
financial markets that are critically important for any Treasury 
Secretary.

I have known Steven for 35 years, personally and professionally, and he 
is a person of great integrity with strong values and ethics. The 
diversity of his work experience and the diversity of those he has 
worked with makes him perfectly qualified for this important position.

Steven cares deeply about getting America back to work, creating 
opportunity for more Americans and ensuring the U.S. remains the 
preeminent place to raise capital and start and grow a business. With 
the prospects of tax reform on the agenda, we, in this country, have an 
opportunity to unleash America's creativity and ingenuity while 
incentivizing entrepreneurs.

I hope that members of the Committee proceed with his confirmation 
process on an expedited basis.

If I can be of further assistance, please let me know how I can help.

Sincerely,

Edward S. Lampert
Chairman and Chief Executive Officer

                                 ______
                                 
                                 LeFrak

                    40 West 57th Street, 23rd Floor

                           New York, NY 10019

                           T: +1 212-708-6600

                        https://www.lefrak.com/

January 9, 2017

The Honorable Orrin Hatch           The Honorable Ron Wyden
Chairman                            Ranking Member
Committee on Finance                Committee on Finance
U.S. Senate                         U.S. Senate
Washington, DC 20510                Washington, DC 20510

Dear Chairman Hatch and Ranking Member Wyden:

I am writing this letter in support of the nomination of Steven Mnuchin 
for Secretary of the Treasury. I have known Mr. Mnuchin for well over a 
decade and find him exceptionally qualified to carry out the duties of 
the office, but first a word about my own background.

I am the CEO of a privately owned, family-held real estate development, 
construction, and management business. My family's company has been in 
business for over 100 years and has extensive holdings of multifamily, 
commercial, retail, and hotel assets and operates in New York, New 
Jersey, Delaware, Florida, California, and Washington. In addition, the 
company has an Oil and Gas division located in Houston, Texas and 
Investment arm that invests in public securities and venture capital. I 
served on the Board of Directors of Bank United after it was 
recapitalized as a result of the financial crisis. Furthermore, I 
served a term as a member of the New York State Banking Board. My 
business activities require me to deal extensively with financial 
institutions and capital markets. Our firm has a flawless record as a 
borrower, job creator, and corporate citizen. Some of the members of 
the committee are familiar with our company and its projects.

I have known Mr. Mnuchin in his professional capacity as an executive 
at Goldman Sachs, his career at Dune Capital, and his leadership of 
OneWest Bank--one of two significant recapitalizations during the 
financial crisis (the other being Bank United). Given Mr. Mnuchin's 
varied and successful experience in finance, real estate, and private 
equity, I find Mr. Mnuchin completely prepared and qualified to be 
Secretary of the Treasury. Wall Street and Main Street banking 
experience have made him both experienced in the capital markets, 
lending, and the regulatory environment. This complementary set of 
experiences will enable him to perform the duties of the office with 
excellence.

On a personal basis, I know Mr. Mnuchin and his family quite well. He 
is the devoted father of two daughters and a son and is an individual 
of extremely high integrity. I have such a high degree of personal 
trust and confidence in Mr. Mnuchin that he has served on the Board of 
Directors of my family's trust company. Mr. Mnuchin is also charitable 
and an advocate of health care and the arts. He is an individual of 
extremely high character and intellect, and is choosing public service 
over other financially lucrative opportunities.

Thank you for your consideration of Mr. Mnuchin's candidacy. Please do 
not hesitate to call upon me if I can be of further assistance.

Sincerely,

Richard S. LeFrak

                                 ______
                                 
                       Ironhill Investments, LLC

                     12 E. 49th Street, 41st Floor

                           New York, NY 10017

                           T +1-646-274-1780

                           F +1-646-607-9194

                         [email protected]

January 11, 2017

The Honorable Orrin Hatch           The Honorable Ron Wyden
Chairman                            Ranking Member
Committee on Finance                Committee on Finance
U.S. Senate                         U.S. Senate
Washington, DC 20510                Washington, DC 20510

Dear Chairman Hatch and Ranking Member Wyden:

I am writing this letter in strong support of Mr. Steven Mnuchin, 
President-elect Trump's nominee for Secretary of the Treasury.

Steven has had an outstanding 30-year career in finance and technology. 
He has a unique combination of knowledge and insight into markets and 
economies. At Goldman Sachs, I was a partner with his father for almost 
25 years. Many years later, Steven, too, had a most successful career 
there, ultimately running the I.T. Department of over 5,000 people. He 
demonstrated a great ability to forge and lead a team that finds 
solutions to uniquely difficult problems. In the recent months, I have 
had the opportunity to renew my friendship with Steven as we worked 
together on the Trump campaign. That time clearly reaffirmed the fact 
that he is an outstanding individual who will serve with the utmost 
dignity, respect and success.

It is my hope that your Committee will proceed swiftly and positively 
with the nomination of Mr. Steven Mnuchin.

Please feel free to contact me if I can be of any further help.

Sincerely,

Lewis M. Eisenberg
Managing Partner

                                 ______
                                 
                           Jamie Enterprises

                      301 N. Canon Dr., Suite 302

                        Beverly Hills, CA 90210

                    http://www.jamieenterprises.net/

                            P: 310-860-9002

January 9, 2017

The Honorable Orrin Hatch
Chairman
Committee on Finance
U.S. Senate
Washington, DC 20510

The Honorable Ron Wyden
Ranking Member
Committee on Finance
U.S. Senate
Washington, DC 20510

Dear Chairman Hatch and Ranking Member Wyden:

I am writing today in strong support of President-elect Trump's 
nomination of Steven Mnuchin to serve as the next Secretary of the 
Treasury.

I have worked with Steven on two occasions, both at a civic institution 
in the City of Los Angeles, and through his efforts leading the Finance 
Committee of the Trump campaign. In both instances, I found him to be 
whip-smart and deeply focused, someone capable of taking on a wide 
array of responsibilities and executing flawlessly every time. Because 
I have seen him in action, and because I know the range of his skill 
set, the depth of experience, and unimpeachable nature of his 
integrity, I can't think of a better person to lead the Treasury 
Department. He is someone the American people can trust to do the right 
thing on their behalf.

I hope that members of the committee proceed with his confirmation 
process on an expedited basis.

If I can be of further assistance in any way, please do not hesitate to 
contact me.

Sincerely,

Jamie McCourt
Founder and CEO, Jamie Enterprises
Former Co-Owner, President and CEO, Los Angeles Dodgers

                                 ______
                                 
                     California Bankers Association

                        1303 J Street, Suite 600

                        Sacramento CA 95814-2939

                             t 916-438-4400

                             f 916-441-5756

                      https://www.calbankers.com/

January 9, 2017

The Honorable Orrin Hatch           The Honorable Ron Wyden
Chairman                            Ranking Member
Committee on Finance                Committee on Finance
U.S. Senate                         U.S. Senate
Washington, DC 20510                Washington, DC 20510

Re: Support for Steven Mnuchin to be Secretary of the United States 
Department of the Treasury

Dear Chairman Hatch and Ranking Member Wyden:

The California Bankers Association supports the confirmation of Steven 
Mnuchin as the Secretary of the United States Department of the 
Treasury. Mr. Mnuchin possesses the experience and credentials that 
make him a well-qualified candidate. His knowledge and professional 
competencies make him a valuable resource to the people of United 
States.

Steven Mnuchin has substantive experience in finance and banking, 
including a deep understanding of the financial markets that will serve 
him well as the Treasury Secretary. With this extensive experience, he 
will use his skills on behalf of the American people to pursue the 
president's regulatory relief agenda. Lawmakers have reacted strongly 
since the economic recession, enacting numerous layers of laws and 
regulations resulting in significant bank consolidation. Consequently, 
the regulatory environment is hampering banks' ability to help their 
customers achieve financial success, support their communities, and the 
economy.

Mr. Mnuchin is committed to enacting policies that encourage economic 
growth. His reputation for bringing people together to solve complex 
projects will prove invaluable in working with Congress and the 
Administration to advance reforms that spur economic growth, create 
jobs, help hardworking Americans, and allow businesses to compete 
globally.

We appreciate this opportunity to encourage your confirmation of Steve 
Mnuchin as Treasury Secretary. We believe he will serve the people of 
this nation and the Treasury with wisdom and integrity. Please contact 
us if you have any questions regarding our support.

Sincerely,

Rodney K. Brown
President and CEO

                                 ______
                                 
                           Movement Mortgage
                                                    January 3, 2017
The Honorable Orrin Hatch
Chairman
Committee on Finance
U.S. Senate
Washington, DC 20510

The Honorable Ron Wyden
Ranking Member
Committee on Finance
U.S. Senate
Washington, DC 20510

Dear Chairman Hatch and Ranking Member Wyden:

I offer today my full support of Mr. Steven Mnuchin as the next 
Secretary of the United States Treasury.

As the founder and chief executive of Movement Mortgage, I launched our 
company in 2008, amid the worst financial crisis in a generation, to 
bring innovation, service, and integrity back to a broken business. As 
a result, we have disrupted the entire industry with new processes to 
serve American homebuyers and are now one of the 10 largest purchase 
mortgage lenders in the United States with more than $12 billion in 
annual originations.

Our country needs more business leaders equipped to make decisions that 
will lead to economic prosperity and innovation. This is exactly why 
Mr. Mnuchin is an excellent choice to be the next Treasury Secretary. 
His willingness and foresight to lead the turnaround of bankrupt 
IndyMac Bancorp, repositioning it as OneWest Bank, should be remembered 
as one of the most successful turnarounds of this era. Mr. Mnuchin 
inherited one of the most troubled mortgage portfolios in America, with 
more than 178,000 loans in active foreclosure. Mr. Mnuchin and his team 
worked tirelessly to find solutions for these families, extending more 
than 101,000 loan modification offers many of which included offers to 
forgive principal. Along the way, government auditors found OneWest to 
have the lowest error rate and the highest effectiveness rate in the 
entire federal loan modification program.

Mr. Mnuchin is an ideal candidate to lead the U.S. Treasury because I 
believe he will tailor policies designed to help improve the flow of 
credit to local businesses, the backbone of American commerce, and in 
turn create jobs and investment that will drive economic growth across 
the country. I urge you to confirm Mr. Mnuchin as our next Secretary of 
the Treasury and empower him to lead us to sustained growth and 
financial stability.

Sincerely,

Casey Crawford
Founder and Chief Executive Officer
Movement Mortgage
Fort Mill, SC

                                 ______
                                 
                           Old National Bank

                            One Main Street

                          Evansville, IN 47708

January 10, 2017

The Honorable Orrin Hatch           The Honorable Ron Wyden
Chairman                            Ranking Member
Committee on Finance                Committee on Finance
U.S. Senate                         U.S. Senate
Washington, DC 20510                Washington, DC 20510

Re: Support for Steven Mnuchin to be Secretary of the U.S. Department 
of the Treasury

Dear Chairman Hatch and Ranking Member Wyden:

I am writing to issue my strong support for the confirmation or Steven 
Mnuchin as Secretary of the U.S. Department of the Treasury. As 
Chairman and CEO of Old National Bank and Chairman of the Mid-Size Bank 
Coalition of America, I am confident that Mr. Mnuchin's deep, well-
rounded experience--which includes the successful leadership of the 
mid-size bank OneWest--make him uniquely qualified to serve as Treasury 
Secretary.

As members of your esteemed Committee are aware, mid-size banks are 
essential to the success of our nation's economy. At Old National Rank, 
we not only provide the capital to fuel small business growth within 
our communities, we often serve as a catalyst for economic expansion 
and community development by helping to forge partnerships and 
strengthen relationships among business leaders, community leaders and 
political leaders. We also strive to educate and empower at-risk 
members of our communities through partnerships with non-profits, 
financial education initiatives and homeownership assistance. This is 
true not only for Old National, but for mid-size banks throughout our 
great nation.

I believe Mr. Mnuchin understands the importance of empowering 
community banks like Old National to continue to serve the financial 
needs of our clients and communities. Furthermore, I believe his strong 
knowledge of financial markets and extensive experience in our industry 
will enable the Treasury Department to take a balanced, mindful 
approach to regulation that protects our citizens while allowing 
community banks to drive much-needed growth and expansion.

I am honored for this opportunity to encourage the confirmation of Mr. 
Mnuchin. I believe he has the ideal background and credentials for this 
vitally important position, and I welcome the opportunity to discuss 
this topic further with members of your prestigious Committee.

Sincerely,

Bob Jones

                                 ______
                                 
                            Treasure Island

                        3300 S. Las Vegas Blvd.

                          Las Vegas, NV 89109

                              702-894-7182

                              800-955-4777

                       http://treasureisland.com/

January 11, 2017

The Honorable Orrin Hatch           The Honorable Ron Wyden
Chairman                            Ranking Member
Committee on Finance                Committee on Finance
U.S. Senate                         U.S. Senate
Washington, DC 20510                Washington, DC 20510

Dear Chairman Hatch and Ranking Member Wyden,

I am writing in great support of Steve Mnuchin to serve as our nation's 
next Secretary of the Treasury, as nominated by President-elect Trump. 
Mr. Mnuchin is highly qualified for this position and will be 
instrumental in helping President-elect Trump achieve his goals of 
economic growth. He has my firm support.

Please feel free to contact me if I can be of any further assistance.

Sincerely,

Phillip G. Ruffin
Owner

                                 ______
                                 
                               Blackstone

                            345 Park Avenue

                           New York, NY 10154

                           t + 1 212-583-5823

                           f + 1 212-583-5719

                       [email protected]

January 17, 2017

Dear Members of the Committee:

I strongly recommend that the Committee, after its customary hearings, 
promptly confirm my good friend Steven Mnuchin for United States 
Treasury Secretary. As the Committee considers Steven's nomination, I 
thought I might be able to contribute to the Committee's deliberations 
as someone who has observed his work and character.

Throughout his career, whether at Goldman Sachs or negotiating with the 
FDIC during the financial crisis, Steven has shown drive and 
persistence, combined with skill and integrity to solve complex 
problems.

I have known Steven for 20 years and believe him to carry our national 
interest close to his heart. His work as an investor, innovator, and 
philanthropist has given him the insight and empathy to serve our 
Country and the Administration with distinction. Steven has been an 
effective mentor to dozens of young executives over many years. He has 
nurtured their talent and guided them to help them realize their 
dreams. Steven is widely respected for his good judgment, good humor, 
and integrity. Having spoken with him at length about the state of our 
economy, he is deeply knowledgeable about the intricacies of financial 
markets and policy.

Finally, I had the pleasure of hosting Steven at a gathering in New 
York City the night before this year's election. He was passionate 
about changing the economic fortunes of all Americans by electing 
Donald Trump President of the United States. I have full faith in his 
abilities to competently and dutifully serve the United States as our 
Treasury Secretary.

Thank you again for your time and consideration.

Stephen A. Schwarzman
Chairman, CEO, and Co-Founder

                                 ______
                                 
                           Thiel Capital LLC

               One Letterman Drive, Building C, Suite 400

                  The Presidio San Francisco, CA 94129

                             P 415-248-5140

                             F 415-248-5141

January 13, 2017

The Honorable Orrin Hatch           The Honorable Ron Wyden
Chairman                            Ranking Member
Committee on Finance                Committee on Finance
U.S. Senate                         U.S. Senate
Washington, DC 20510                Washington, DC 20510

Dear Chairman Hatch and Ranking Member Wyden:

I am writing today to support President-elect Trump's nomination of 
Steven Mnuchin to serve as the next Secretary of the Treasury.

The next Secretary will lead the greatest reform of our tax code and 
our public finances in more than 30 years. This reform is desperately 
needed, and its success will depend on confirming the right person for 
the job. I strongly believe that the right person is Steven Mnuchin.

Mr. Mnuchin thoroughly understands finance. He gained his knowledge 
from long experience working at every level from home mortgages to 
global markets. He has a vast store of energy, as he has shown over his 
successful 30-year career. Now his knowledge, experience, and energy 
should be put to work for the benefit of the whole country.

Because economic policy reform is urgent and Mr. Mnuchin is uniquely 
qualified to get it done, I urge members of the Committee to proceed 
with his confirmation process on an expedited basis.

Sincerely,

Peter Thiel

                                 ______
                                 
                          Thomas P. Vartanian

January 12, 2017

The Honorable Orrin G. Hatch
Chairman
Committee on Finance
U.S. Senate
Washington, DC 20510

The Honorable Ron Wyden
Ranking Member
Committee on Finance
U.S. Senate
Washington, DC 20510

Dear Chairman Hatch and Ranking Member Wyden:

    I am writing in my personal capacity to set the record straight 
regarding the acquisition of IndyMac Bank in 2009, and to offer an 
objective assessment of Steven Mnuchin's formidable intellect, 
unflappable demeanor, and significant financial skills as I saw them on 
display in that transaction.

    I have spent more than 40 years dealing with the resolution of 
failed banks. As a former attorney at the Office of the Comptroller of 
the Currency and then General Counsel of the Federal Home Loan Bank 
Board and FSLIC, I authorized, supervised, and worked on the 
receivership and/or sale of more than 430 failed institutions, all with 
an eye on the need to husband the modest financial resources available 
to us. After that, in private practice, I represented investors in 
dozens of FSLIC, RTC, and FDIC failed-bank acquisitions, including the 
acquisition of IndyMac. I have also been an adjunct professor of law at 
Georgetown, George Washington, and Boston University Schools of Law, 
and guest lecturer at Harvard Law School.

    Several core principles about bank failures need to be appreciated 
in order to put the IndyMac transaction in context.

  It is the FDIC's responsibility to either find an acquirer to infuse 
new capital into a failed bank, or liquidate it--a very costly solution 
for the FDIC that will result in significant financial dislocations for 
customers and employees.

  When a bank fails, it is usually in worse condition than anyone--
even the FDIC--imagined, and its assets are likely to be worth less 
than its financial statements reflect.

  The FDIC has a finite deposit insurance fund, so it must find 
private capital to recapitalize failed banks--every dollar that an 
investor puts at risk to purchase a failed bank saves the FDIC, and 
potentially the U.S. taxpayer, multiples of those dollars.

  If no acquirer is willing to recapitalize a failed bank, the FDIC 
will likely liquidate it by paying out insured depositors, selling its 
increasingly depreciating assets at fire sale prices, and terminating 
its employees.

  Federal law requires the FDIC to conduct an auction process for a 
failed bank and choose the ``least cost'' bid with regard to the 
financial assistance that it provides to the acquirer from its 
insurance fund.

  When an investor offers to acquire essentially the ``whole bank'' 
from the FDIC rather than just pieces of it, the failed bank can remain 
open the next day under new ownership; no depositor loses anything and 
the employees generally keep their jobs.

    In 2007, I and my law firm were engaged to represent an investor 
that eventually came to be included in the final group that was invited 
by the FDIC to acquire IndyMac after a protracted bidding process in 
which the FDIC evaluated proposals from more than 20 bidders. See 
https://www.fdic.gov/bank/individual/failed/IndyMac_bid_summary.html. 
At that time, IndyMac Bank was the largest bank failure that had ever 
occurred in the United States, so the loss that the FDIC and 
potentially U.S. taxpayers could have incurred was anticipated to be 
substantial. The fact that IndyMac Bank had been in conservatorship 
with the FDIC for 8 months after it was seized by the OTS was unusual 
and raised substantial operational, legal, and financial issues for the 
group. It was my job to advise my client on the transaction that Mr. 
Mnuchin structured to ensure that it was in conformity with applicable 
law and in its best interests. My firm and I did not represent Mr. 
Mnuchin or his company.

    The investor group, of which Mr. Mnuchin's firm was also part, took 
the enormous risk of paying $13.9 billion for IndyMac, of which $1.3 
billion was investor cash which recapitalized IndyMac--$1.3 billion 
that the FDIC did not have to spend to resolve that bank failure. The 
only guarantees it received were a set of very complicated and 
conditional financial assistance agreements from the FDIC to the extent 
that the value of the assets over time did not turn out to be what the 
parties expected. Such a financial assistance package is typical in 
most failed bank acquisitions over the last 40 years.

    The economic well-being of bank customers, the FDIC deposit 
insurance fund, bank employees, and the U.S economy is dependent on 
parties being willing and able to invest large amounts of capital into 
failed banks based on a financial partnership between the private 
sector and the FDIC. Failed bank acquirers do not expect 
congratulations or a medal for patriotism in return for taking those 
financial risks, but they do hope to make a return on their investment 
through the excruciatingly hard work that follows such an acquisition 
to turn a failed bank into a viable and productive member of its 
community. That is the formula that makes our financial system work and 
allows consumers to sleep at night.

    In the IndyMac transaction, to my knowledge, Mr. Mnuchin and the 
investors adhered to all aspects of the FDIC's requirements, persevered 
through months and months of anguish and negotiations, and did what 
even the FDIC had not expected. They invested $1.3 billion of their own 
cash to acquire the entire bank at the least cost to the government, 
earning the right to keep it open for business for the benefit of its 
customers, employees, and new shareholders.

    The clear proof of how beneficial the acquisition proposal was to 
the FDIC was demonstrated by the fact that it had not actually expected 
to sell IndyMac as a whole bank. In January 2009, the FDIC informed us 
that as the winning bidder, we should expect to receive drafts of more 
than 30 acquisition contracts. The reason why there were so many 
contracts to be negotiated was that the FDIC's lawyers had already 
prepared the paperwork to sell IndyMac in multiple asset pools to 
multiple parties, rather than as a whole bank. Indeed, the FDIC 
disclosed that of the six final bidders in the process, only the 
Mnuchin group's bid was for the whole bank. See https://www.fdic.gov/
bank/individual/failed/IndyMac_bid_summary.html. If the disposition of 
IndyMac had proceeded in any other fashion, it would have been much 
more costly to the FDIC and likely led to job losses and branch 
closures.

    While I did not represent Mr. Mnuchin, I came to admire his 
abilities and saw a businessman who, as far as I was concerned, was 
something special. I have not had dealings with nor even spoken to him 
since that time, but was not surprised at all when President-elect 
Trump nominated him to be Secretary of the Treasury given the enormous 
skills that I saw him display during the 9 months that I had the 
privilege of working with him to complete the acquisition of IndyMac 
Bank.

            Sincerely,

            Thomas P. Vartanian

                                 ______
                                 
                           Walter J. Mix III

January 12, 2017

The Honorable Mike Crapo
Chairman
Committee on Banking, Housing, and Urban Affairs
U.S. Senate
239 Dirksen Senate Office Building
Washington, DC 20510

Dear Chairman Crapo,

I am a former Commissioner of the California Department of Financial 
Institutions (now Department of Business Oversight). I have extensive 
experience in financial services regulatory and safety and soundness 
issues.

I am writing to endorse and to support Mr. Steven Mnuchin's effort to 
be confirmed as Secretary of the U.S. Treasury. Mr. Mnuchin has broad 
experience in housing, finance, trading, banking, and in particular he 
possesses a broad understanding of the financial markets that would 
serve him well as the U.S. Treasury Secretary.

When he retired from Goldman Sachs in 2002, he was managing a team of 
5,000 people and a $1-billion technology budget. He knows how to deploy 
technology and people to improve business outcomes.

He has a reputation of bringing people together to tackle complex 
projects. This would serve him well as he works with Congress and the 
Administration to develop a tax reform package that would spur economic 
growth, create jobs, help hardworking Americans, and allow businesses 
to compete on a global basis.

With deep experience in the finance and entertainment industries, he 
would use his strong negotiation skills on behalf of the American 
people to pursue the President's pro-growth tax reform and regulatory 
relief agenda that would help create hundreds of thousands of jobs.

As you recall, the California economy was devastated by the financial 
crisis starting in 2007 as mortgage defaults started to occur and 
property values, especially in overbuilt areas, started to decrease. 
The crisis accelerated when IndyMac Bank failed. I am a long-time 
resident of Pasadena, CA and observed the public outcry when it 
appeared that thousands would lose their jobs, and when people lined up 
at branches to withdraw their money in a bank-run scene straight out of 
``It's a Wonderful Life.''

As a former financial regulator, I was amazed to see that, unlike in a 
normal bank failure where the bank is closed on a Friday and reopens 
the following Monday under new ownership, no one showed up to take on 
the IndyMac business. It was almost unprecedented for the FDIC to have 
to operate the bank for nearly 9 months before a credible bidder showed 
up. That bidder was Mr. Mnuchin.

The OneWest acquisition of IndyMac Bank (and, later, First Fed and La 
Jolla) was great news for Southern California in many ways. First, it 
preserved jobs and credit availability in California that otherwise 
almost certainly would have disappeared. Second, it launched new lines 
of business that helped small and middle-market businesses in the area 
expand and create jobs. Third, through the OneWest Foundation, it 
contributed to the local community by sponsoring important non-profits 
like Junior Achievement, the Venice Family Clinic, Boys and Girls Club, 
the Los Angeles Police Foundation, and others.

While some have criticized OneWest over mortgage foreclosures, those 
foreclosures were already underway before Mr. Mnuchin and his partners 
arrived to save the bank. The real story is how hard Mr. Mnuchin's team 
worked to find the best foreclosure avoidance solutions for the largest 
number of customers. After a major financial crisis, it should not be 
surprising that some unfortunate individuals lost jobs, suffered other 
tragedies, and were not able to repay their mortgages on any terms; 
those foreclosures are human tragedies. But the real story here is how 
much better OneWest was at saving homes than most banks. Government 
reviews show that OneWest offered more than 100,000 loan modifications 
to delinquent borrowers, as well as that those loan modifications 
included more principal forgiveness than any similarly sized bank. 
Importantly, when foreclosure was the only option, OneWest made 
mistakes far less often than others in the industry.

The media has also criticized OneWest for not cooperating with a 
California state attorney general investigation of its mortgage 
practices. As the former California banking regulator, I believe it is 
important to remind people that, for most of American history, we have 
had a ``dual banking'' system consisting of state banks and federally 
chartered banks. State regulators have limited authority to directly 
regulate national banks, and what is clear is that, while OneWest was 
not subject to oversight by a state attorney general in that context, 
the issues involved were thoroughly examined by federal regulators in 
the Obama administration. Those federal regulators were not known for 
being lax on bank misconduct, and so the results of their reviews are 
all the more striking: OneWest was highly compliant, was effective in 
saving homes by modifying tens of thousands of delinquent mortgages it 
inherited from IndyMac Bank, and was subject to extensive regulatory 
oversight in the process.

Mr. Mnuchin fought for his customers, and he's going to fight for 
American workers. He is committed to making sure we enact policies that 
set the U.S. economy on a course for long-term growth and help American 
workers and businesses.

Mr. Mnuchin's well-known commitment to accountability and his integrity 
will serve him well as Treasury Secretary. For all of these reasons, I 
endorse and support Mr. Steven Mnuchin for Secretary of the U.S. 
Treasury.

Sincerely,

Walter J. Mix III

                                 ______
                                 
         Submissions for the Record From Hon. Robert Menendez, 
                     a U.S. Senator From New Jersey

                     Statement of Cristina Clifford

    Good afternoon. My name is Cristina Clifford. I'm hoping that by 
sharing my story with you today I can explain why I believe confirming 
Steve Mnuchin for Treasury Secretary would be a serious mistake for our 
country. I experienced firsthand what it was like to be subject to 
OneWest's greed, and I can tell you that the person who ran OneWest 
Bank should not be the person responsible for oversight of the U.S. 
economy.

    In 2001, when I was 20, I bought my first home--a great condo in 
Whittier, California, just outside Los Angeles. I was young, but I've 
always been a motivated self-starter. I'm also a self-employed, small 
business owner--my primary source of income.

    Things were going just fine, and I was never, ever late on my 
mortgage payments. However, that changed in 2008--like it did for so 
many of us--when the economy took a turn for the worse. My business 
struggled, and I started relying on credit cards to stay afloat. In 
March of 2009, I was unable to make my mortgage payment for the first 
time in 8 years as a homeowner.

    I called OneWest directly to see what options I would have for 
keeping my home. They told me flat out that because I had never been 
delinquent, they had no way of helping me. In order to get help, they 
said, I would have to fall behind on my payments. Of course this was 
misleading--and, I've since found out, a common tactic that mortgage 
lenders use to push people into default.

    From there, I began the long, long process of loan modification 
through the Home Affordable Mortgage Program (or HAMP). I sent in 
numerous documents to OneWest, and in May, I was offered my first loan 
modification. I was thrilled--the new payments would fit perfectly in 
my budget, so I signed the loan modification papers and sent them via 
FedEx along with a check for my first payment under the new, modified 
payment amount.

    In July, I expected OneWest to send me a statement with the new 
lower payment amount. Instead, I received a letter saying that they had 
not received my loan modification paperwork, so the modification terms 
were no longer valid. I called them and OneWest confirmed that they had 
not received my returned loan modification agreement. I knew right away 
this wasn't right, because they had cashed the check for the first 
modified payment in the same FedEx envelope. That they managed to cash 
the check but completely neglect the loan modification agreement--
again, in the same envelope--is absolutely outrageous.

    I had no choice but to apply again, this time submitting even more 
documents; I was told to submit and resubmit many duplicative documents 
in many different formats. Despite how difficult OneWest made the 
process, I did everything they asked because I was determined to keep 
my home.

    On August 3, 2009, I received a notice of default from OneWest but 
proceeded with my second attempt at modifying my loan. I received my 
second loan modification offer later that month. The terms were almost 
identical to the offer they made me in May, so I quickly signed the 
offer and mailed it in with another check. In October, I got a letter 
exactly like the one I received earlier saying that they had not 
received the loan modification paperwork and that the modification 
offer was no longer valid. Yet as they did the first time, they cashed 
the check I sent in with the signed offer.

    At this point, I felt I had no choice but to get an attorney, who 
worked to get my foreclosure postponed while the loan modification 
process played out. He spoke with people at OneWest who told him that 
they would postpone the sale of my condo until the loan modification 
process was completed.

    This simply wasn't true: on the evening of December 3, 2009, I 
received a knock on my door from a man that introduced himself as the 
new owner of my property. And in March of 2010, I received a final 
notice telling me that I had 5 days to leave my apartment--5 days to 
pack up the 10 years of my life I'd spent in my home.

    The reason I am sharing my story is because there are so many other 
people out there like me who got left in the dust. Steve Mnuchin 
profited from people like me, even when we did everything we could to 
keep our homes. You might say that Steve Mnuchin did not personally 
authorize OneWest to cheat me out of my home, but his fortune rose as a 
direct result of managing a company that routinely engaged in 
irresponsible behavior.

    The Treasury Secretary will be tasked with making sure that the 
economy is working in a way that benefits all of Americans, not just 
the top 1%. However, Steve Mnuchin is not that person; he is just the 
opposite. Please make a statement for people like me and oppose his 
confirmation as Treasury Secretary.

                                 ______
                                 

                     Statement of Paulina Gonzalez

              Senate Forum on OneWest Foreclosure Victims

                            January 18, 2017

    My name is Paulina Gonzalez. I am the executive director of the 
California Reinvestment Coalition. Over the past 30 years, CRC has 
grown into the largest state reinvestment coalition in the country with 
a membership of 300 organizations that serve low-income communities and 
communities of color.

    I want to begin by first thanking Senator Warren for convening this 
forum and the assembled Senators here today. It is critically important 
that our elected representatives and the American public hear directly 
from people who have lost their homes due to the egregious practices 
and abuses by OneWest Bank under Mr. Mnuchin's leadership, before 
deciding on his nomination to the high and important office of Treasury 
Secretary.

    I also want to thank the courageous women who have traveled from 
afar to testify here today. Over the years, we've heard similar stories 
that are all too familiar. Despite making every attempt to do the right 
thing, these working families lost their homes due to aggressive and 
malicious foreclosure practices at the hands of Mr. Mnuchin and his 
bank. We are grateful that they have stepped forward to share their 
stories. It is not easy to speak publicly about the loss of your 
family's home.

    Unfortunately, the people here today represent only a tiny fraction 
of the over 60,000 families impacted by OneWest foreclosures across the 
country. I'm going to share some data and information with you in the 
next few minutes, but know that the wreckage from OneWest is really not 
about numbers, data, and legal briefs. It's about the tens of thousands 
of Americans who have suffered devastating financial and personal 
losses as a result of OneWest's abusive foreclosure practices.

    Whether it's the story of the Minnesota woman who sought a loan 
modification from OneWest and returned to her home in a blizzard only 
to find that her locks were changed. Or the 90 year old woman who was 
nearly kicked out of her home for mistakenly paying 27 cents less than 
OneWest said she owed. Or the 80 year old former Christian missionary 
who was notified at his home that Financial Freedom was foreclosing on 
him because the bank said it had no record of him living there. The 
issue is the same: instead of helping people stay in their homes, Mr. 
Mnuchin devised a foreclosure machine that used every trick in the book 
to profit from their suffering.

    Large Scale Foreclosures. And foreclose he did. CRC and Urban 
Strategies Council analyzed data showing that OneWest foreclosed on 
over 36,000 families in California and 24,000 families nationally. All 
of these foreclosures occurred after Mr. Mnuchin purchased IndyMac 
Bank. In addition, we suspect that OneWest's reverse mortgage 
subsidiary, Financial Freedom, has foreclosed on more seniors, widows, 
widowers, and heirs than any other company participating in the federal 
Home Equity Conversion Mortgage program. A Freedom of Information Act 
request that we filed with HUD revealed that Financial Freedom had 
foreclosed on over 16,000 seniors, widows, widowers, and their 
families, or 39% of all Home Equity Conversion Mortgage foreclosures, 
roughly twice the rate one would expect given the bank's market share.

    OneWest servicing and modification record. Mr. Mnuchin may defend 
his record by saying that he inherited these bad loans, that the 
foreclosures were inevitable, and that his bank followed the law in 
dealing with his customers. We strongly disagree, and it appears that 
we are not alone. In a CNN story that aired on January 3rd about Mr. 
Mnuchin and Financial Freedom, a HUD spokesperson was quoted as saying, 
``while HUD doesn't dispute that it has strict rules for government 
backed reverse mortgages, OneWest had the ability to give survivors 
more time but chose not to.''

    Mr. Mnuchin's spokespeople have also praised his modification 
record. But, we are not sure there is much to praise. Data from the 
Treasury Department in 2013 shows that OneWest had among the highest 
denial rates for the Home Affordable Modification Program, the Federal 
Government's main foreclosure prevention effort. Under Mr. Mnuchin, 
OneWest denied three-quarters of the thousands of loan modification 
requests that came in from families trying to save their homes. OneWest 
was much more likely to deny loan modifications under this program than 
peers such as Bank of America or Wells Fargo.

    Attorney General Memo shows ``widespread misconduct.'' A January 
2013 memo from the California Attorney General's office revealed a 
staff investigation finding of ``widespread misconduct'' at the bank, 
including backdating thousands of foreclosure documents, improper 
foreclosure auction credit bidding which meant the bank could claim tax 
exemptions it wasn't entitled to, proceeding with foreclosures without 
the proper authority to do so, and speeding up foreclosure timelines. 
All of these practices deprived working families in California a fair 
chance to stay in their homes.

    Redlining Complaint highlights disparities in home lending and 
branching. Some may note that other banks had more foreclosures in 
California and nationally, and this is certainly true. This makes sense 
given that IndyMac was not the largest national lender. But we have 
labeled OneWest a ``foreclosure machine'' not only because it 
foreclosed on more than 60,000 American families and because of its 
aggressive foreclosure practices, but because it seemed to do little 
else. In fact, we estimate that since Mr. Mnuchin took over the bank, 
OneWest pushed through nine times as many foreclosures as home 
purchases and refinance loans in neighborhoods of color in California.

    The Treasury Secretary leads our economy. The Secretary helps 
oversee our banking system and will have much to say about important 
policies relating to banking, housing, and economic development that 
will impact all Americans. The country needs a Treasury Secretary who 
will consider the needs of all Americans, including working class 
Americans. Mr. Mnuchin's tenure at OneWest Bank shows him to work in 
his interest and in the corporate interest, at the great expense and 
harm to everyday Americans.

                                 ______
                                 

                   Statement of Colleen Ison-Hodroff

    Dear Assembled Senators:

    My name is Colleen Ison-Hodroff. I am 84 years old. I am a resident 
of Minneapolis, MN. My husband Monroe Hodroff and I purchased our home 
located at 2753 Ewing Avenue in 1963 as a home for our family of six 
children. They called us the Brady Bunch of Ewing Avenue. Our house was 
the heart and soul of our family. Monroe and I were married for 55 
years, and we successfully ran four small grocery stores.

    I would like to thank you all very much for allowing me to share my 
story.

    I am here today because Financial Freedom, my reverse mortgage 
servicer, is trying to foreclose on my home. This is despite the fact 
that when my husband Monroe and I took out this loan, they told us that 
I could remain in the home if Monroe should die before me.

    In July of 2006, my husband and I decided to take out a reverse 
mortgage loan with Financial Freedom. It was a very complicated 
process. Someone came to our house and I was asked to sign a number of 
papers. Usually, Monroe handled the financial matters for our 
household. We were told that I could live in the house if Monroe passed 
away. It was never Monroe's or my intention that the survivor of the 
two of us would have to sell the house or leave if one of us died. We 
would not have signed for the loan if we thought that was the case.

    My husband Monroe passed on September 12, 2014. A mere 10 days 
later, despite what we had been told, Financial Freedom contacted me 
and told me that I needed to pay off the loan immediately. This was 
news to me. I was in no financial position to do so. Since then, 
Financial Freedom has been trying to foreclose on me.

    I think this is an injustice in that an elderly woman was deceived, 
and now Financial Freedom is trying to take my home.

    Why would Financial Freedom do this to me? I relied on what I was 
told, and now they are trying to kick me out of our family home. How 
was I supposed to know if what I was told wasn't true? What I am 
supposed to do now?

    My understanding is that in such circumstances, Financial Freedom 
blames HUD for it kicking out Non-Borrowing Spouses. Experts who have 
reviewed my paperwork have told me that this isn't even a HUD-backed 
loan, so Financial Freedom has no one to blame but themselves. It seems 
Financial Freedom should be working to keep people like me in their 
homes, and not fighting to kick us out.

    I hear that Steve Mnuchin was a leader of the bank that is doing 
this to me and other seniors. I do not think a man like that should be 
the Treasury Secretary and in charge of our economy. We can't let that 
happen.

    Thank you again for allowing me to tell my story on behalf of those 
who have had bad dealings with Financial Freedom and OneWest.

                                 ______
                                 

                     Statement of Heather McCreary

    My name is Heather McCreary. My husband Jack, my two kids Jaden and 
Clara, and I are from Sparks, Nevada. This is my story about how my 
family's American Dream turned into a nightmare. I'm sharing my story 
with the hope of explaining why we cannot let Steve Mnuchin become 
Secretary of the Treasury. Putting Steve Mnuchin in charge of the 
Treasury Department would mean that a man who profited off the 
struggles of families like mine would be one of the most powerful 
people in the U.S. economy.

    For a while, it was looking like our shot at the American Dream was 
going pretty well. In 2006, Jack and I bought our dream home in 
Sparks--just a mile away from my parents, and a short walk to Jaden and 
Clara's school and to parks the kids could play in. I was working as a 
home health care worker and Jack was working in construction, and 
together we were managing just fine.

    Then, in 2008, when the economy started to get worse, I was laid 
off. The following year in 2009, Jack was laid off too. Though Jack was 
able to find another job pretty fast, he had to take a big pay cut--
from about $25 an hour to $8.50 an hour. Between the cut in Jack's pay 
and the loss in income I experienced when going on unemployment 
insurance benefits after I got laid off, we were pinched and we were 
drowning financially.

    However, we were determined to keep our dream home, so Jack and I 
were tenacious about doing whatever we could to get help. We sought 
help from the Hope Now Alliance, which is an alliance of HUD-approved 
counselors who provide free foreclosure help, and from the Washoe 
County Senior Law Project.

    We worked side-by-side with both organizations to do everything 
required of us by our mortgage servicer IndyMac, which later became 
OneWest. When we first asked for help, OneWest gave us a short 
forbearance and allowed us to make a smaller payment for several months 
with the goal of a reduction in our monthly mortgage payments through 
the Home Affordable Modification Program (or HAMP). By applying for the 
HAMP program, we thought we were back on the road to keeping our home.

    We complied 100 percent with OneWest's requirements for HAMP--we 
were incredibly nervous about being able to keep our house, so we were 
extremely careful to make sure we did everything we could to keep the 
process going forward. Our application for HAMP was processed and we 
were approved for a modification. I sent in the signed paperwork and 
the first payment under the modified payment amount.

    But then the process started to fall apart. After a whole 30 days, 
OneWest returned our personal check and told us that only certified 
checks would be accepted, so they were now voiding the modification 
offer. We had followed the instructions to the letter on OneWest's 
paperwork, crossing our ``T''s and dotting our ``I''s. But in the end, 
this didn't matter--and OneWest's rejection of our HAMP application put 
us on the road to foreclosure.

    We applied two more times for loan modifications over the next 6 
months because we were given assurances by people at OneWest that they 
would approve our application. We again complied with every request 
OneWest made of us, taking care to send in extra documents whenever 
OneWest requested them.

    But as far as I can tell, OneWest never attempted to process the 
loan modification. The foreclosure went through and we lost our home on 
September 10, 2010. The foreclosure left us without a home, and finding 
a new rental was extremely difficult because of our credit. Juggling 
the demands of raising our twins and this was so hard--the foreclosure 
even meant that our kids had to miss school. Eventually we did find a 
new place, but we had to pay an outrageous rent--even though it was not 
a good home for us at all.

    It's hard to explain the shame, embarrassment, and grief Jack and I 
felt. I've cried a river of tears over this. I really didn't think we 
were asking too much: we wanted to hang on to our home for the sake of 
our kids, and we did everything we could to stay in our home. And while 
I will probably never know exactly what OneWest did, the outcome of my 
story proves that Steve Mnuchin's company had no interest in helping 
us. They wanted to foreclose because they were focused on their 
profits.

    Putting Steve Mnuchin in charge of the country's financial system 
is an insult to families like mine: families who worked hard and did 
everything they could to get by after the economy collapsed. Take it 
from my experience--I know he will not be looking out for working 
people. Instead, he will use his position to make the economy work 
better for people like himself. On behalf of my family and others like 
it, I ask you to please reject Steve Mnuchin as Treasury Secretary.

                                 ______
                                 

                       Statement of Sylvia Oliver

    Good afternoon, Senator Warren and other senators gathered here 
today. My name is Sylvia Oliver. I am a homeowner from Scotch Plains, 
NJ. I received my mortgage from IndyMac in May 2008, and about a month 
later, IndyMac failed. I want to share my story because it is more than 
a house--it is a home for me, my husband and my three children and my 
grandchildren.

    In early 2009, my husband and I were facing financial difficulties. 
Because of the economy being in bad shape, my husband was between jobs. 
We reached out to OneWest to request a modification. We were told that 
we had to make three payments in order to move forward on a permanent 
modification, and so we made those three payments.

    After making those payments, I reached back out to OneWest to find 
out what the next steps were. But I couldn't get a straight answer from 
them, so we continued making partial payments, even though it was a 
challenge for us financially.

    In February 2010, I submitted a modification application to OneWest 
Bank. About 6 weeks later I received a Notice of Intent to Foreclose. 
However, the person I had been talking to at OneWest, a man named 
Albert, told me not to worry, and encouraged me to continue submitting 
updated documents to the bank.

    So, for the next year, I would submit new documents to the bank, 
through FedEx and through faxes. And, every week, I would call Albert 
and ask if he had an update on my situation, and every week I was told 
there was no answer and to call back the next week.

    After a year of my weekly phone calls, I finally received a denial 
letter from OneWest in February 2011, when they said they couldn't 
modify my loan. Albert at OneWest told me I could re-apply for a 
modification, which I did because I really wanted to keep our home.

    For the next several months, the cycle would repeat, with the bank 
telling me to re-apply for a modification, me believing that they were 
sincere, and then a few months later, being told we had been declined 
again. This was surprising because during this time we were back on our 
feet, and our incomes were both increasing, which meant we were in a 
better position to pay for our mortgage.

    At the end of the 2015, I received another notice of foreclosure 
from the bank. At this point, it became clear to me that OneWest never 
had any intention of modifying the loan in such a way that they would 
still get paid back and we would be able to keep our home.

    In March of 2016, I hired a lawyer because I thought they might 
have more success working with the bank than I did. At my attorney's 
advice, I filed a Chapter 13 bankruptcy as part of another modification 
application.

    That process went on for about 5 or 6 months, with the same cycle 
of me sending paperwork over and over to the bank, and the same answer 
again. Last year, I was facing foreclosure 3 weeks before Christmas; 
however, that was then postponed until this month. In fact, I was 
supposed to be foreclosed on by OneWest today, however, after Senator 
Menedez's office called OneWest, I learned that my sale had been 
postponed until next month.

    Earlier this month, I sought help from a HUD approved housing 
counselor. She worked with me and my husband to document our income and 
to submit a modification application. After analyzing our situation, 
she was surprised to hear that we had not qualified for a modification 
earlier, especially since my husband and I both have good incomes.

    As of right now, I'm still facing foreclosure next month, and I 
know in my heart this is because OneWest's only intent was to foreclose 
on my home. This bank has had ample opportunities to modify my loan. In 
fact, they told me that they own the loan, so I know they can't blame 
this situation on an investor not allowing them to modify my loan.

    Nobody should have to go through the experience that I've gone 
through during the past several years with OneWest Bank. It's been very 
painful and stressful not knowing if my kids and my family are going to 
have a home to live in, or if it's going to be foreclosed on. I would 
ask you to remember my experience when you consider whether Mr. Mnuchin 
is qualified to lead the Department of the Treasury. As the CEO and 
Chair of OneWest Bank, Mr. Mnuchin had the opportunity to help families 
like mine with responsible loan modifications, and he didn't. I don't 
think this is a track record that anybody should be proud of.

                                 ______
                                 
   Prepared Statement of Steven Terner Mnuchin, Secretary-Designate, 
                       Department of the Treasury
    Chairman Hatch, Ranking Member Wyden, and members of the committee, 
it is an honor to appear before you today. I am grateful and humbled by 
President-elect Trump's nomination to serve as the Secretary of 
Treasury. It is truly an honor and a privilege to be considered for 
this position.

    Thank you to all of the members I have already had an opportunity 
to meet with during this process. I enjoyed meeting you and learning 
more about the issues that are important to you. For those members whom 
I didn't get a chance to meet with, if confirmed, I look forward to 
meeting with you as well.

    I would like to thank Chairman Hatch and his staff for taking so 
much time to work with me and support me through this process. In 
addition, I would like to introduce my fiancee, Louise Linton, and my 
children Emma, JP, and Dylan who are here with me today, and thank them 
for their unwavering support. I would like to introduce my brother, 
Alan Mnuchin and his wife Alessandra, and my father, Robert Mnuchin, 
who has always supported me, and taught me that hard work, 
determination, and the ability to bring people together can make 
anything possible. I would like to acknowledge my late mother, Elaine 
Terner Cooper, who was an inspiration to me. I would also like to 
acknowledge my grandparents, Emanuel and Mathilda Terner, who were also 
a tremendous influence in my life. My grandfather was a first 
generation American whose father emigrated from Europe. He truly 
embodied the American dream. He started out blowing glass bottles by 
hand and later built Midland Glass into one of the largest glass 
manufacturing companies in the United States, with five factories 
employing thousands of workers. My first job was in his factory when I 
was in high school. It was there that I first learned the importance of 
humility, hard work, and commitment.
                          personal background
    For those of you who don't know my background, I studied Economics 
at Yale University. During the summers I worked at Salomon Brothers 
under the mentorship of Lew Ranieri and Mike Mortara, who started the 
mortgage backed securities market. I learned the importance of this 
market in providing ample and sound financing of housing for American 
families. At the age of 22, after graduating from Yale, I got a job at 
Goldman Sachs, where I spent the next 17 years. I started on a folding 
chair in the mortgage department. Nine years later, and after many 
sleepless nights, I was put in charge of mortgages, U.S. Government 
bonds, and municipal securities. Several years after that, I worked 
directly for future Secretary of the Treasury Hank Paulson as the 
firm's chief information officer. In that role I oversaw 5,000 people 
and a $1-billion budget. While at Goldman Sachs, I learned the 
importance of the financial markets in providing liquidity and capital 
to businesses, governments, and consumers.

    A few years later, I decided to leave Goldman Sachs to build an 
investment business and worked briefly at ESL Investments before 
starting my own investment business, Dune Capital Management.

    Throughout my career, my commitment was to my clients and 
shareholders, for whom I worked tirelessly to get the best results. 
Thirty years later, my commitment is now to the American people for 
whom I will work tirelessly by helping to grow our economy and create 
jobs.
                                indymac
    I'm eager to share with you why I believe I will serve well as 
America's next Secretary of the Treasury. But first I want to correct 
the record about my involvement with IndyMac Bank.

    Since I was first nominated to serve as Treasury Secretary, I have 
been maligned for taking advantage of others' hardships in order to 
earn a buck. Nothing could be further from the truth.

    During the summer of 2008, I saw the devastation that was caused by 
the housing crisis when I watched people line up to get their life 
savings out of IndyMac Bank. It was the middle of the financial crisis 
and despite the global panic, I saw a way to save the bank. I applied 
for a banking charter and submitted a bid to the FDIC for IndyMac. On 
December 31, just before midnight, we signed a binding agreement with 
the FDIC. They later confirmed that our bid was almost $1 billion 
higher than the next best bid. We were willing to invest $1.6 billion 
into the costliest bank failure ever to the FDIC. We did this because 
we believed in our ability to rebuild and create a successful regional 
bank. We believed in recovery for the American economy.

    Let me be clear: my group had nothing to do with the creation of 
the risky loans in the IndyMac loan portfolios. When we bought the 
bank, we assumed these bad loans, which had been originated by previous 
management. Some of those individuals had to answer to Federal 
authorities for their bad lending decisions.

    We invested $1.6 billion of capital into a failing financial 
institution when most investors were running for the hills. We renamed 
the business OneWest Bank and saved thousands of jobs. We developed a 
prospering community banking franchise in southern California as most 
major banks were pulling back. Over the next year we bought two more 
struggling banks from the FDIC: First Federal of Santa Monica and 
LaJolla Bank, both through competitive bidding. Combined we had over 70 
branches and had built a robust lending business, especially for small 
and medium-sized businesses. As chairman of OneWest, I met with 
hundreds of business people from all walks of life who were seeking 
loans to grow their businesses and prosper.

    Like many banks at that time, IndyMac and its reverse mortgage 
division, Financial Freedom, were unstable due to the large amount of 
distressed credit mortgages in its portfolios. When we bought IndyMac, 
these ``legacy loans'' were included in the purchase. The 
responsibility landed on me to clean up the mess that we inherited. We 
worked diligently to help hardworking homeowners remain in their homes 
through modifications, wherever possible. Ultimately, OneWest extended 
over 100,000 loan modifications to delinquent borrowers to try and help 
them out of a bad situation.

    I am proud of the fact that we continued with the loan 
modifications started at IndyMac under the leadership of the FDIC. 
However, the FDIC loan modification program did not work for everyone. 
When the FDIC took over IndyMac, they estimated that more than half of 
the foreclosures would not meet their test for a loan modification. And 
they demanded many policy conditions: extend assistance to sympathetic 
borrowers by establishing affordable and sustainable payments by 
borrowers, increase net present value of cash flows to the owner of the 
loan, and stabilize housing markets. My group had to adhere to 
servicing agreements which limited our ability to modify loans that 
could have helped borrowers.

    In the press it has been said that I ran a ``foreclosure machine.'' 
This is not true. On the contrary, I was committed to loan 
modifications intended to stop foreclosures. I ran a ``Loan 
Modification Machine.'' Whenever we could do loan modifications we did 
them, but many times, the FDIC, FNMA, FHLMC, and bank trustees imposed 
strict rules governing the processing of these loans. I am proud to be 
able to say that our bank was able to modify over 100,000 loans thus 
allowing people the opportunity to remain in their homes. 
Unfortunately, not all of the homes could be saved through these 
programs, and despite my best efforts, some were sadly, subject to 
foreclosure.

    So strong was my concern over this, in 2010 I instructed my lawyers 
to sue HSBC, as trustee of the securitized loans, to allow us to do 
loan modifications on loans in trusts they controlled. We won on 
summary judgment and were consequently allowed to provide more loan 
modifications and keep more American families in their homes

    Similarly, in 2015, when HUD issued Mortgagee Letter 2015-11, I 
wrote to HUD and asked them to change the policy so that we would not 
be forced to foreclose on senior citizens who were behind only small 
amounts on taxes and insurance. I was so troubled by this that I 
discussed it with our primary regulator, the Office of the Comptroller 
of the Currency. Unfortunately, HUD did not see it my way, and we were 
forced to foreclose on senior citizens even when they only owed $1. Not 
complying with these HUD policies would have subjected the bank to 
penalties and losses from HUD.

    Despite our inability to save every home from foreclosure, I am 
proud of the fact that OneWest Bank was the only one of 14 banks that 
was able to complete the independent foreclosure review that was 
conducted by the OCC. Every one of the 175,000 borrowers who were in 
the foreclosure process during 2009 and 2010 were able to pass an 
independent review of their loan. We had a very low error rate, and 
independent government reviews routinely showed that we had the most 
effective loan modification process of any bank.

    If we had not bought IndyMac, the bank would likely have been 
broken up and sold in pieces to private investors, where the outcome 
for consumers could have been much bleaker.

    Overall, I believe we helped many earnest and hard-working 
homeowners, many who were like my grandparents, stay in their homes and 
escape financial ruin.

    My experience confirmed that we must identify and eliminate unwise 
and burdensome policies which contribute to the disastrous outcomes 
that came in the wake of the financial collapse.

    Many Americans are continuing to suffer from the disastrous ripple 
effects of the 2008 crisis. Faithfully ensuring this does not happen 
again means supporting careful oversight of the financial system which 
prioritizes the needs of everyday Americans over the wishes of 
financial institutions or the Federal Government.

    I have great empathy for the millions of hardworking American 
families who needlessly lost their homes because the system failed 
them. If confirmed as Treasury Secretary, I will work diligently and 
compassionately for the American people, so that we never endure 
anything like the meltdown of 2008 again.
                             trump campaign
    I was deeply honored when Donald Trump asked me to join his 
campaign as Finance Chairman. I had the opportunity to travel with him 
and hear first-hand from hardworking Americans about their concerns for 
the American economy. Over the last year, I visited over 50 cities in 
26 States. I remember attending my first rally with him in 
Indianapolis. It was an unforgettable experience. As we arrived into a 
stadium packed with 20,000 people, I saw the excitement that people had 
for a Trump presidency. On our trip to Flint, Michigan, I went with the 
President-elect to visit the water treatment facilities and saw first-
hand the crumbling pipes and the devastation caused by lead tainted 
water. We met with water engineers, and witnessed the impact it had on 
that community and the families that live there. On my travels with the 
President-elect, we heard the pained and heartbreaking stories of many 
Americans who had lost their jobs to workers in foreign countries. We 
heard the concerns of people and small businesses burdened by high 
taxes--these were people who were just trying to make ends meet. In my 
meetings with you over the last month you shared with me the concerns 
of your constituents, like farmers who worry about the death tax wiping 
out family farms, or workers who are nervous about whether their 
retirement accounts will be safe.

    One of the greatest reasons I was drawn to President-elect Trump's 
campaign was that it was predicated on a commitment to stimulating 
prosperity for Americans of all backgrounds--whether they live in 
inner-city Detroit, or rural North Carolina, or the coal country of 
Ohio and West Virginia, or any place in between. I share the President-
elect's goal to economically empower every citizen. We will not rest in 
our quest until it is a reality.

    Among President-elect Trump's signature issues is reviving trade 
policies that put the American worker first. I will enforce these trade 
policies that keep and protect American jobs.

    We will also make America the best place for companies to do 
business. Sensible regulation is a necessity for healthy markets. 
However, I saw first-hand how regulatory excess can inhibit lending by 
financial institutions, resulting in a lack of access to capital for 
small businesses and entrepreneurs. Ben Franklin once said, ``The 
business of the American people is business.'' From our earliest days, 
we have always been a Nation of strivers. American businesses are the 
greatest repository of ingenuity and entrepreneurial spirit in the 
world. We need to unleash that power to generate jobs and create 
abundance for Americans of all backgrounds. We will work diligently to 
limit regulations, lower taxes on hardworking Americans and small 
businesses, and get the engine of economic growth firing on all 
cylinders once again.

    In this age of unprecedented online attacks, we must also be 
vigilant about cybersecurity. If confirmed, as Secretary of the 
Treasury, I will use my expertise in technology to protect Americans' 
information at the IRS and keep our financial architecture safe from 
malicious attacks.

    I will use the Treasury Department's Office of Terrorism and 
Financial Intelligence to stop the financing of terrorism. I will 
partner with other Federal agencies in our shared goal of allowing our 
financial markets to operate safely and keep our citizens secure in the 
knowledge that we are working for them--24/7.

    If I am confirmed as Treasury Secretary, I promise I will work hard 
with this committee, all members of Congress, and the administration to 
put forth policies that will help American families reach and maintain 
prosperity.

    We will make America great again.

    Thank you. I look forward to answering any questions the Committee 
may have.

                                 ______
                                 

                      Office of Inspector General

                           Executive Summary

           Audit of OneWest Bank's Loan Modification Program

                                             Report No. EVAL-11-004
                                                          July 2011

Why We Did the Audit

Former FDIC Chairman Sheila Bair requested that the FDIC Office of 
Inspector General (OIG) assist in reviewing allegations in a letter 
dated January 10, 2011 addressed to her and other regulators, 
government officials, and media outlets purportedly from a group of 
OneWest Bank, FSB (OneWest) employees. The letter alleged that OneWest 
executives had instructed employees to reject as many loan modification 
applications as possible and created an environment that encouraged 
loan modification staff to misinform borrowers about their eligibility 
status, routinely shred loan modification applications, and 
inappropriately deny loan modifications. The letter also stated that 
the terms of the FDIC's agreement with OneWest created a financial 
incentive for OneWest to foreclose rather than modify loans.

Our objectives were to determine whether evidence exists to 
substantiate the allegations in the January 10, 2011 letter, and 
OneWest is administering loan modifications in accordance with the Home 
Affordable Modification Program (HAMP) and/or other FDIC-approved loan 
modification programs adopted under the Shared Loss Agreement Between 
the FDIC as Receiver for IndyMac Federal Bank, FSB and OneWest Bank, 
FSB dated March 19, 2009 (SLA).

Background

On July 11, 2008, the Office of Thrift Supervision (OTS) closed IndyMac 
Bank, FSB, Pasadena, CA, and named the FDIC conservator. Substantially 
all of IndyMac Bank's assets transferred to IndyMac Federal Bank, FSB, 
which the FDIC operated to maximize the value of the institution for a 
future sale and to maintain banking services in the communities 
formerly served by IndyMac Bank, FSB. On March 19, 2009, the FDIC 
completed the sale of IndyMac Federal Bank, FSB, to OneWest, a newly 
formed federal savings bank organized by IMB HoldCo LLC. OneWest 
purchased more than $6 billion of deposits and approximately $20.7 
billion in assets at a discount of $4.7 billion. Among the assets 
OneWest purchased was $12.8 billion in single-family mortgage loans.

The FDIC and OneWest entered into the SLA on the single-family mortgage 
loan portfolio. The FDIC conducts periodic reviews to monitor 
compliance with the SLA and to review claims for reimbursement. The SLA 
also requires OneWest to provide regular reports to enable the FDIC to 
ensure compliance with the SLA and to monitor performance of the 
covered assets.

Treasury initiated HAMP as part of the Making Home Affordable Program 
to provide eligible borrowers the opportunity to modify their first 
lien mortgage loans to make them more affordable. Under HAMP, servicers 
apply a uniform loan modification process to provide eligible borrowers 
with affordable and sustainable monthly payments for their first lien 
mortgage loans. HAMP achieves affordability through interest rate 
reduction, term extension, principal forbearance, and principal 
forgiveness.

Audit Results

We did not find evidence to support the allegations in the January 10, 
2011 letter, and we determined that several statements made in the 
letter about OneWest officials and the loan modification process were 
factually inaccurate.

OneWest paid a $4.7-billion discount for the IndyMac assets, and the 
FDIC will reimburse OneWest for losses based on the full book value of 
those assets, which has been viewed by some to create an incentive for 
OneWest to foreclose on loans rather than modify them. In fact, OneWest 
must incur cumulative losses of more than $2.5 billion before the FDIC 
begins reimbursing OneWest for any losses. The FDIC competitively bid 
IndyMac assets, and FDIC officials advised us that OneWest's 
acquisition represented the least cost transaction to the Deposit 
Insurance Fund. Further, we determined that there were compensating 
controls that mitigate the risk that OneWest would pursue foreclosures 
over loan modifications and ensure that OneWest pursues actions under 
the SLA that minimize losses to the FDIC.

We did identify borrower communication issues that might have resulted 
in borrower misunderstanding or confusion, and fueled perceptions that 
OneWest favors foreclosures over loan modifications. OneWest has taken 
steps to address those issues. In addition, we noted that the quality 
of the IndyMac loan portfolio that OneWest acquired made it difficult 
for borrowers to qualify for loan modifications and likely contributed 
to the perception that OneWest denies many loan modifications.

With respect to our second objective, we determined that OneWest 
administered loan modifications in accordance with HAMP. OneWest 
appropriately solicited borrowers for and processed loan modifications 
more than 98 percent of the time based on our review of a random sample 
of 260 loans. We found four exceptions: one related to the HAMP loan 
modification solicitation process, which establishes a reasonable 
effort standard for soliciting borrower interest; in three instances, 
OneWest incorrectly denied modifications. OneWest took corrective 
action either before or as a result of this audit to address all four 
cases. In addition, we noted that OneWest provides borrowers with other 
alternatives to help them remain in their homes when HAMP loan 
modification is not available.

Management Comments

This report makes no recommendations, so a management response was not 
required. FDIC management had no comments. Also, FDIC management 
provided a copy of the draft report to OneWest for its feedback. 
OneWest advised management that it had no comments.

Because this report includes confidential commercial information from 
OneWest, we do not intend to publicly release the report in its 
entirety.

                                 ______
                                 

                        SENATE FINANCE COMMITTEE

                  STATEMENT OF INFORMATION REQUESTED 
                               OF NOMINEE

                      A. BIOGRAPHICAL INFORMATION

 1.  Name (include any former names used): Steven Terner Mnuchin.

 2.  Position to which nominated: Secretary, Department of the 
Treasury.

 3.  Date of nomination: November 30, 2016.

 4.  Address (list current residence, office, and mailing addresses):

 5.  Date and place of birth: December 21, 1962, New York, New York.

 6.  Marital status (include maiden name of wife or husband's name):

 7.  Names and ages of children:

 8.  Education (list secondary and higher education institutions, dates 
attended, degree received, and date degree granted):

     Secondary Education: Riverdale Country School, 9/1973-6/1981, high 
school diploma, 6/1981.

     Yale University, 9/1981-6/1985, bachelor's degree, 6/1985.

 9.  Employment record (list all jobs held since college, including the 
title or description of job, name of employer, location of work, and 
dates of employment):

        Dune Capital Management LP
          Chairman and CEO
          450 Park Avenue
          New York, NY 10022
          9/2004-Present

        CIT Group Inc.
          Vice chairman
          888 E. Walnut Street
          Pasadena, CA 91101
          8/2015-3/2016

        OneWest Bank Group LLC
          Chairman and CEO
          888 E. Walnut Street
          Pasadena, CA 91101
          3/2009-8/2015

        SFM Capital Management LP
          CEO
          888 Seventh Avenue
          New York, NY 10106
          8/2003-9/2004

        ESL Investments
          Vice chairman
          200 Greenwich Avenue
          Greenwich, CT 06830
          1/2003-7/2003

        Goldman Sachs Group Inc.
          Partner, managing director, EVP, and CIO
          85 Broad Street
          New York, NY 10004
          9/1985-12/2002

10.  Government experience (list any advisory, consultative, honorary, 
or other part-time service or positions with Federal, State, or local 
governments, other than those listed above):

     None.

11.  Business relationships (list all positions held as an officer, 
director, trustee, partner, proprietor, agent, representative, or 
consultant of any corporation, company, firm, partnership, other 
business enterprise, or educational or other institution):

     Dune Capital Management LP, chairman and CEO
     CIT Group Inc., vice chairman
     OneWest Bank Group LLC, chairman and CEO
     Dune Capital Management GP LLC, sole owner
     OneWest Bank NA, chairman and director
     CIT Bank NA, chairman and director
     CIT Group Inc., director
     Sears Holdings Inc., director
     Steven T. Mnuchin Inc., president and sole owner
     STM Partners LLC, managing member
     SHM Investments LLC, management member
     Steven T. Mnuchin Revocable Trust, trustee
     Steven and Heather Mnuchin Foundation, trustee
     Steven T. Mnuchin GST Trust, trustee
     Alan G. Mnuchin GST Trust, trustee
     Elaine T. Cooper Estate, co-executor
     Elaine T. Cooper Foundation, trustee
     The GMG 2002 Trust, trust protector
     The SMG 2002 Trust, trust protector
     The LFG 2002 Trust, trust protector
     Graham Morris Gewirz 1999 Trust, trustee
     Lillian Frances Gewirz 1999 Trust, trustee
     Stella May Gewirz 1999 Trust, trustee
     The Nicholas Floyd Lampert 2015 Trust, trustee
     The Nina Rosa Lampert 2015 Trust, trustee
     Trust U Art 6th (b) Michael Mortara, trustee
     Virginia Mortara 2007 Family Trust, trustee
     The Matthew Peter Mortara 2006 Trust, trustee
     Virginia and Michael Mortara Foundation, trustee
     Michael Mortara Insurance Trust, trustee
     Mortara Family Trust, trustee
     LeFrak Trust Company, director
     MOCA, trustee
     LAPD Foundation, trustee
     UCLA Hospital, member, board
     Cedars-Sinai Hospital, member, board of governors
     Relativity Media, non-executive co-chairman and board member
     Kmart Holdings, board member
     The Milton R. and Jena M. Berlinski 2003 Life Insurance Trust, 
trustee
     The Michael Paul Mortara 2006 Trust, trustee
     Crummey Trust fbo Matthew Peter Mortara, trustee
     2503(c) Minority Trust fbo Matthew Peter Mortara, trustee
     Dune Entertainment Partners LLC, chairman
     StormChaser Partners LLC, chairman
     SFM Capital Management LP, CEO
     ESL Management, vice chairman
     Goldman Sachs Group Inc., partner, managing director, EVP, and 
CIO
     New York Presbyterian Hospital, life trustee
     Dune Capital Partners LLC, manager
     Dune Capital Partners II LP, manager
     Dune Capital Partners III LLC, managing member
     Dune Capital Manager LLC, managing member
     IMB Management Holdings GP LLC, member
     SHM Partners II LLC, managing member
     STM Capital LLC, managing member
     IMB Holdco LLC, chairman
     OneWest Foundation, director, chairman/CEO
     Dune Capital International Ltd, director
     The Edward S. Lampert 2012 Family Trust
     Alan G. Mnuchin 2016 Insurance Trust

12.  Memberships (list all memberships and offices held in 
professional, fraternal, scholarly, civic, business, charitable, and 
other organizations):

     Sebonak Golf Club, Southampton, NY
     El Dorado Golf Club, Cabo Mexico
     Maravilla Club, Cabo Mexico
     Riviera Golf Club, Los Angeles, CA
     Jonathan Club, Los Angeles, CA
     Lyford Cay Club, Nassau, Bahamas
     Pacific Council on International Policy, Los Angeles, CA
     Russel Trust Association, Yale University, New Haven, CT
     Temple Emanuel, New York, NY
     Park East Synagogue, New York, NY
     Kehillat Israel, Pacific Palisades, CA

13.  Political affiliations and activities:

    a.  List all public offices for which you have been a candidate.

      None.

    b.  List all memberships and offices held in and services rendered 
to all political parties or election committees during the last 10 
years.

      Finance Chairman, Trump for America, Inc.

    c.  Itemize all political contributions to any individual, campaign 
organization, political party, political action committee, or similar 
entity of $50 or more for the past 10 years.


------------------------------------------------------------------------
 Transaction Date       Recipient        Amount      Contribution Type
------------------------------------------------------------------------
06/30/2006         Maria Cantwell         $1,000   Contribution to all
                                                    other political
                                                    committees except
                                                    joint fundraising
                                                    committees
------------------------------------------------------------------------
06/14/2006         John J. Cranfey IV     $1,000   Contribution to all
                                                    other political
                                                    committees except
                                                    joint fundraising
                                                    committees
------------------------------------------------------------------------
07/24/2006         Solutions America      $3,000   Contribution to all
                    PAC                             other political
                                                    committees except
                                                    joint fundraising
                                                    committees
------------------------------------------------------------------------
09/19/2006         Edward M. Lamont       $2,100   Contribution to all
                                                    other political
                                                    committees except
                                                    joint fundraising
                                                    committees
------------------------------------------------------------------------
01/12/2007         Friends of               $500   Contribution to all
                    Christine Quinn                 other political
                                                    committees except
                                                    joint fundraising
                                                    committees
------------------------------------------------------------------------
02/22/2007         Mary Landrieu          $2,300   Contribution to all
                                                    other political
                                                    committees except
                                                    joint fundraising
                                                    committees
------------------------------------------------------------------------
02/01/2007         Bill Richardson        $2,100   Contribution to all
                                                    other political
                                                    committees except
                                                    joint fundraising
                                                    committees
------------------------------------------------------------------------
02/01/2007         John Edwards           $2,100   Contribution to all
                                                    other political
                                                    committees except
                                                    joint fundraising
                                                    committees
------------------------------------------------------------------------
02/14/2007         Rudolph W.             $2,300   Contribution to all
                    Giuliani                        other political
                                                    committees except
                                                    joint fundraising
                                                    committees
------------------------------------------------------------------------
03/28/2007         Christopher J.         $2,300   Contribution to all
                    Dodd                            other political
                                                    committees except
                                                    joint fundraising
                                                    committees
------------------------------------------------------------------------
04/18/2007         Frank R.               $1,000   Contribution to all
                    Lautenberg                      other political
                                                    committees except
                                                    joint fundraising
                                                    committees
------------------------------------------------------------------------
06/04/2007         Barak Obama            $2,300   Contribution to all
                                                    other political
                                                    committees except
                                                    joint fundraising
                                                    committees
------------------------------------------------------------------------
07/02/2007         Dodd for President     $2,300   Contribution to all
                                                    other political
                                                    committees except
                                                    joint fundraising
                                                    committees
------------------------------------------------------------------------
07/06/2007         Friends of Jack        $1,000   Contribution to all
                    Marnell                         other political
                                                    committees except
                                                    joint fundraising
                                                    committees
------------------------------------------------------------------------
10/22/2007         Hillary Rodham         $2,300   Contribution to all
                    Clinton                         other political
                                                    committees except
                                                    joint fundraising
                                                    committees
------------------------------------------------------------------------
11/13/2007         Mitt Romney            $2,300   Contribution to all
                                                    other political
                                                    committees except
                                                    joint fundraising
                                                    committees
------------------------------------------------------------------------
12/21/2007         Friends of             $1,000   Contribution to all
                    Christine Quinn                 other political
                                                    committees except
                                                    joint fundraising
                                                    committees
------------------------------------------------------------------------
02/25/2007         Friends of             $1,000   Contribution to all
                    Christine Quinn                 other political
                                                    committees except
                                                    joint fundraising
                                                    committees
------------------------------------------------------------------------
03/31/2008         Hillary Rodham         $2,300   Contribution to all
                    Clinton                         other political
                                                    committees except
                                                    joint fundraising
                                                    committees
------------------------------------------------------------------------
04/07/2008         Michael Wildes         $1,900   Contribution to all
                                                    other political
                                                    committees except
                                                    joint fundraising
                                                    committees
------------------------------------------------------------------------
05/12/2009         David Yassky           $1,000   Contribution to all
                                                    other political
                                                    committees except
                                                    joint fundraising
                                                    committees
------------------------------------------------------------------------
05/12/2010         Michael Wildes         $1,900   Contribution to all
                                                    other political
                                                    committees except
                                                    joint fundraising
                                                    committees
------------------------------------------------------------------------
07/19/2010         Andrew Cuomo           $5,000   Contribution to all
                                                    other political
                                                    committees except
                                                    joint fundraising
                                                    committees
------------------------------------------------------------------------
07/12/2011         Timothy Pawlenty       $1,000   Contribution to all
                                                    other political
                                                    committees except
                                                    joint fundraising
                                                    committees
------------------------------------------------------------------------
09/01/2011         Mitt Romney            $5,000   Contribution to all
                                                    other political
                                                    committees except
                                                    joint fundraising
                                                    committees
------------------------------------------------------------------------
05/08/2012         Michael Wildes         $1,900   Contribution to all
                                                    other political
                                                    committees except
                                                    joint fundraising
                                                    committees
------------------------------------------------------------------------
06/08/2012         Republican             $7,500   Recipient of joint
                    National                        fundraiser
                    Committee                       contribution
------------------------------------------------------------------------
06/08/2012         Mitt Romney            $2,500   Recipient of joint
                                                    fundraiser
                                                    contribution
------------------------------------------------------------------------
09/10/2012         Republican            $12,500   Recipient of joint
                    National                        fundraiser
                    Committee                       contribution
------------------------------------------------------------------------
10/10/2012         Bloom for Assembly     $2,500   Contribution to all
                                                    other political
                                                    committees except
                                                    joint fundraising
                                                    committees
------------------------------------------------------------------------
10/15/2012         Prop 32                $5,000   Contribution to all
                                                    other political
                                                    committees except
                                                    joint fundraising
                                                    committees
------------------------------------------------------------------------
05/11/2013         Wendy Greuel           $1,300   Contribution to all
                                                    other political
                                                    committees except
                                                    joint fundraising
                                                    committees
------------------------------------------------------------------------
02/07/2014         Hagan for Senate       $1,000   Contribution to all
                                                    other political
                                                    committees except
                                                    joint fundraising
                                                    committees
------------------------------------------------------------------------
04/29/2014         Michael Wildes         $1,900   Contribution to all
                                                    other political
                                                    committees except
                                                    joint fundraising
                                                    committees
------------------------------------------------------------------------
02/10/2016         Kamala Harris          $2,000    Contribution to all
                                                    other political
                                                    committees except
                                                    joint fundraising
                                                    committees
------------------------------------------------------------------------
05/13/2016         Michael Wildes         $1,900   Contribution to all
                                                    other political
                                                    committees except
                                                    joint fundraising
                                                    committees
------------------------------------------------------------------------
05/17/2016         Donald Trump              $10   Contribution to all
                                                    other political
                                                    committees except
                                                    joint fundraising
                                                    committees
------------------------------------------------------------------------
06/08/2016         Republican             $7,500   Recipient of joint
                    National                        fundraiser
                    Committee                       contribution
------------------------------------------------------------------------
06/30/2016         Trump Victory        $425,000   Joint fundraising
                                                    contribution
------------------------------------------------------------------------
06/30/2016         NY Republican         $10,000   Recipient of joint
                    Federal Campaign                fundraiser
                    Committee                       contribution
------------------------------------------------------------------------
06/30/2016         Republican Party      $10,000   Recipient of joint
                    of Arkansas                     fundraiser
                                                    contribution
------------------------------------------------------------------------
06/30/2016         Republican Party      $10,000   Recipient of joint
                    of Virginia                     fundraiser
                                                    contribution
------------------------------------------------------------------------
06/30/2016         Donald Trump           $2,700   Recipient of joint
                                                    fundraiser
                                                    contribution
------------------------------------------------------------------------
06/30/2016         Donald Trump           $2,700   Recipient of joint
                                                    fundraiser
                                                    contribution
------------------------------------------------------------------------
06/30/2016         Republican Party      $10,000   Recipient of joint
                    of Louisiana                    fundraiser
                                                    contribution
------------------------------------------------------------------------
06/30/2016         Republican           $100,200   Recipient of joint
                    National                        fundraiser
                    Committee                       contribution
------------------------------------------------------------------------
06/30/2016         Republican            $75,800   Recipient of joint
                    National                        fundraiser
                    Committee                       contribution
------------------------------------------------------------------------
06/30/2016         Republican            $33,400   Recipient of joint
                    National                        fundraiser
                    Committee                       contribution
------------------------------------------------------------------------
06/30/2016         Republican Party      $10,000   Recipient of joint
                    of Mississippi                  fundraiser
                                                    contribution
------------------------------------------------------------------------
06/30/2016         Republican Party      $10,000   Recipient of joint
                    of West Virginia                fundraiser
                                                    contribution
------------------------------------------------------------------------
07/22/2016         Team Ryan             $25,000   Joint fundraising
                                                    contribution
------------------------------------------------------------------------
07/22/2016         Paul Ryan              $2,700   Recipient of joint
                                                    fundraiser
                                                    contribution
------------------------------------------------------------------------
07/22/2016         Paul Ryan              $2,700   Recipient of joint
                                                    fundraiser
                                                    contribution
------------------------------------------------------------------------
09/27/2016         South Carolina        $10,000   Recipient of joint
                    Republican Party                fundraiser
                                                    contribution
------------------------------------------------------------------------
09/30/2016         Tennessee             $10,000   Recipient of joint
                    Republican                      fundraiser
                    Federal Election                contribution
                    Account
------------------------------------------------------------------------
09/30/2016         Connecticut           $10,000   Recipient of joint
                    Republican                      fundraiser
                    Campaign                        contribution
                    Committee
------------------------------------------------------------------------
09/30/2016         New Jersey            $10,000   Recipient of joint
                    Republican State                fundraiser
                    Committee                       contribution
------------------------------------------------------------------------


14.  Honors and awards (list all scholarships, fellowships, honorary 
degrees, honorary society memberships, military medals, and any other 
special recognitions for outstanding service or achievement):

    None.

15.  Published writings (list the titles, publishers, and dates of all 
books, articles, reports, or other published materials you have 
written):

    None.

16.  Speeches (list all formal speeches you have delivered during the 
past 5 years which are on topics relevant to the position for which you 
have been nominated):

    None.

17.  Qualifications (state what, in your opinion, qualifies you to 
serve in the position to which you have been nominated):

     I have extensive management, technology, and investment expertise 
which I will apply to my position in government. I have over 30 years 
of business experience, including expertise in financial markets, 
lending, banking, regulatory, entertainment, and technology.

                   B. FUTURE EMPLOYMENT RELATIONSHIPS

 1.  Will you sever all connections with your present employers, 
business firms, associations, or organizations if you are confirmed by 
the Senate? If not, provide details.

    Yes.

 2.  Do you have any plans, commitments, or agreements to pursue 
outside employment, with or without compensation, during your service 
with the government? If so, provide details.

    No.

 3.  Has any person or entity made a commitment or agreement to employ 
your services in any capacity after you leave government service? If 
so, provide details.

    No.

 4.  If you are confirmed by the Senate, do you expect to serve out 
your full term or until the next presidential election, whichever is 
applicable? If not, explain.

    Yes.

                   C. POTENTIAL CONFLICTS OF INTEREST

 1.  Indicate any investments, obligations, liabilities, or other 
relationships which could involve potential conflicts of interest in 
the position to which you have been nominated.

     In connection with the nomination process, I have begun consulting 
with the Office of Government Ethics and the Department of the 
Treasury's designated agency ethics officials to identify any potential 
conflicts of Interest. Any potential conflicts of interest will be 
resolved in accordance with the terms of an ethics agreement that I 
will enter into with the Department's designated agency ethics official 
and that will be provided to this committee.

 2.  Describe any business relationship, dealing or financial 
transaction which you have had during the last 10 years, whether for 
yourself, on behalf of a client, or acting as an agent, that could in 
any way constitute or result in a possible conflict of interest in the 
position to which you have been nominated.

     In connection with the nomination process, I have begun consulting 
with the Office of Government Ethics and the Department of the 
Treasury's designated agency ethics officials to identify any potential 
conflicts of interest. Any potential conflicts of interest will be 
resolved in accordance with the terms of an ethics agreement that I 
will enter into with the Department's designated agency ethics official 
and that will be provided to this committee.

 3.  Describe any activity during the past 10 years in which you have 
engaged for the purpose of directly or indirectly influencing the 
passage, defeat, or modification of any legislation or affecting the 
administration and execution of law or public policy. Activities 
performed as an employee of the Federal Government need not be listed.

    None.

 4.  Explain how you will resolve any potential conflict of interest, 
including any that may be disclosed by your responses to the above 
items.

     In connection with the nomination process, I have begun consulting 
with the Office of Government Ethics and the Department of the 
Treasury's designated agency ethics officials to identify any potential 
conflicts of interest. Any potential conflicts of interest will be 
resolved in accordance with the terms of an ethics agreement that I 
will enter into with the Department's designated agency ethics official 
and that will be provided to this committee.

 5.  Two copies of written opinions should be provided directly to the 
Committee by the designated agency ethics officer of the agency to 
which you have been nominated and by the Office of Government Ethics 
concerning potential conflicts of interest or any legal impediments to 
your serving in this position.

 6.  The following information is to be provided only by nominees to 
the positions of United States Trade Representative and Deputy United 
States Trade Representative:

     Have you ever represented, advised, or otherwise aided a foreign 
government or a foreign political organization with respect to any 
international trade matter? If so, provide the name of the foreign 
entity, a description of the work performed (including any work you 
supervised), the time frame of the work (e.g., March to December 1995), 
and the number of hours spent on the representation.

    N/A.

                       D. LEGAL AND OTHER MATTERS

 1.  Have you ever been the subject of a complaint or been 
investigated, disciplined, or otherwise cited for a breach of ethics 
for unprofessional conduct before any court, administrative agency, 
professional association, disciplinary committee, or other professional 
group? If so, provide details.

    None.

 2.  Have you ever been investigated, arrested, charged, or held by any 
Federal, State, or other law enforcement authority for a violation of 
any Federal, State, county, or municipal law, regulation, or ordinance, 
other than a minor traffic offense? If so, provide details.

    No.

 3.  Have you ever been involved as a party in interest in any 
administrative agency proceeding or civil litigation? If so, provide 
details.

    Please see Attachment A.

 4.  Have you ever been convicted (including pleas of guilty or nolo 
contendere) of any criminal violation other than a minor traffic 
offense? If so, provide details.

    No.

 5.  Please advise the committee of any additional information, 
favorable or unfavorable, which you feel should be considered in 
connection with your nomination.

    N/A.

                     E. TESTIFYING BEFORE CONGRESS

 1.  If you are confirmed by the Senate, are you willing to appear and 
testify before any duly constituted committee of the Congress on such 
occasions as you may be reasonably requested to do so?

    Yes.

 2.  If you are confirmed by the Senate, are you willing to provide 
such information as is requested by such committees?

    Yes.

                                 ______
                                 

                              ATTACHMENT A

Section D. 3. Have you ever been involved as a party in interest in any 
administrative agency proceeding or civil litigation? If so, provide 
details.

----------------------------------------------------------------------------------------------------------------
          Caption                  Jurisdiction             Filed Date                   Description
----------------------------------------------------------------------------------------------------------------
John Carrington V. Steven    U.S. Ct. of App., 4th        0ctober 14, 2016   I was a named defendant in this
 Mnuchin                      Cir.                                            case due to my position at CIT/
                                                                              OneWest Bank.
                                                                             This matter involved an appeal of
                                                                              the court's denial of plaintiffs'
                                                                              Rule 59(e) motion (seeking to
                                                                              alter the court's denial with
                                                                              prejudice of plaintiffs' Rule
                                                                              60(b) motion for relief) in the
                                                                              state court case below (5:13-CV-
                                                                              03422).
                                                                             A motion to amend caption to remove
                                                                              my name was filed on December 7,
                                                                              2016 to reflect an earlier
                                                                              (unchallenged) ruling in the state
                                                                              court proceeding regarding lack of
                                                                              service, which motion is pending.
----------------------------------------------------------------------------------------------------------------
U.S. Bank National           HI U.S. Dist. Ct.                June 8, 2016   I was a named defendant in this
 Association v. Franco et                                                     case due to my position at CIT/
 al.                                                                          OneWest Bank.
                                                                             This matter involves a contested
                                                                              foreclosure.
                                                                             This case was appealed and removed
                                                                              to federal court from state court
                                                                              case number 13-1-0627. I was
                                                                              dismissed with prejudice prior to
                                                                              appeal. The appeal does not affect
                                                                              the dismissal.
----------------------------------------------------------------------------------------------------------------
Lipovich, Joseph v. CIT      NY New York Sup. Ct.         January 10, 2016   I was a named defendant in this
 Group Inc., John A. Thain,                                                   case due to my position at CIT/
 Ellen R. Alemany, Michael                                                    OneWest Bank.
 J. Embler, Alan Frank,                                                      Plaintiff alleges that the CIT
 William M. Freeman, David                                                    board of directors failed to
 M. Moffett, Steven                                                           comply with Section 141(k) of the
 Mnuchin, R.                                                                  Delaware General Corporation Law,
                                                                              which provides that a simple
                                                                              majority vote of a company's
                                                                              stockholders is needed to remove
                                                                              directors from a company's board
                                                                              of directors.
                                                                             This matter was resolved by
                                                                              settlement on October 12, 2016.
----------------------------------------------------------------------------------------------------------------
Rossof, Jacob v. Edward S.   DE Chancery Ct.                 June 19, 2015   I was a named defendant in this
 Lampert et al.                                                               case due to my position at Sears
                                                                              Holdings Corp.
                                                                             Plaintiff alleged certain Sears
                                                                              officers and directors breached
                                                                              their fiduciary duties in
                                                                              connection with the sale of
                                                                              various commercial real estate
                                                                              holdings to Seritage.
                                                                             Without conceding that the
                                                                              allegations have any merit
                                                                              whatsoever, the parties have
                                                                              reached an agreement in principle
                                                                              to resolve the litigation and are
                                                                              in the process of preparing a
                                                                              formal settlement agreement.
----------------------------------------------------------------------------------------------------------------
Ryan Flanagan v. Edward S.   DE Chancery Ct.                 June 19, 2015   I was a named defendant in this
 Lampert                                                                      case due to my position at Sears
                                                                              Holdings Corp.
                                                                             Plaintiff alleged certain Sears
                                                                              officers and directors breached
                                                                              their fiduciary duties in
                                                                              connection with the sale of
                                                                              various commercial real estate
                                                                              holdings to Seritage.
                                                                             Without conceding that the
                                                                              allegations have any merit
                                                                              whatsoever, the parties have
                                                                              reached an agreement in principle
                                                                              to resolve the litigation and are
                                                                              in the process of preparing a
                                                                              formal settlement agreement.
----------------------------------------------------------------------------------------------------------------
Stein, Shiva v. Edward S.    DE Chancery Ct.                 June 18, 2015   I was a named defendant in this
 Lampert                                                                      case due to my position at Sears
                                                                              Holdings Corp.
                                                                             Plaintiff alleged certain Sears
                                                                              officers and directors breached
                                                                              their fiduciary duties in
                                                                              connection with the sale of
                                                                              various commercial real estate
                                                                              holdings to Seritage.
                                                                             Without conceding that the
                                                                              allegations have any merit
                                                                              whatsoever, the parties have
                                                                              reached an agreement in principle
                                                                              to resolve the litigation and are
                                                                              in the process of preparing a
                                                                              formal settlement agreement.
----------------------------------------------------------------------------------------------------------------
Teena Colebrook v. Steven    U.S. Dist. Ct., Central          May 28, 2015   I was a named defendant in this
 O. App et al.                District, CA                                    case due to my position at CIT/
                                                                              OneWest Bank.
                                                                             Plaintiff alleges ``trespass'' by
                                                                              way of use of a forged instrument.
                                                                             This matter was dismissed without
                                                                              prejudice on June 10, 2015.
----------------------------------------------------------------------------------------------------------------
In re Sears Holdings         DE Chancery Ct.                  May 29, 2015   I was a named defendant in this
 Corporation Stockholder                                                      case due to my position at Sears
 and Derivative Litigation                                                    Holdings Corp.
                                                                             Plaintiff alleged certain Sears
                                                                              officers and directors breached
                                                                              their fiduciary duties in
                                                                              connection with the sale of
                                                                              various commercial real estate to
                                                                              Seritage.
                                                                             Without conceding that the
                                                                              allegations have any merit
                                                                              whatsoever, the parties have
                                                                              reached an agreement in principle
                                                                              to resolve the litigation and are
                                                                              in the process of preparing a
                                                                              formal settlement agreement.
----------------------------------------------------------------------------------------------------------------
Teena Colebrook v. Joseph    Sup. Ct., San Luis              April 2, 2015   I was a named defendant in this
 Otting et al.                Obispo County, CA                               case due to my position at CIT/
                                                                              OneWest Bank.
                                                                             Plaintiff alleges ``trespass'' and
                                                                              ``fraudulent claims.''
                                                                             This matter was resolved by
                                                                              voluntary dismissal on April 29,
                                                                              2015.
----------------------------------------------------------------------------------------------------------------
Dr. Robert A. Kuzner, Jr.    U.S. Dist. Ct., Dist.      September 18, 2014   I was a named defendant in this
 v. OneWest Bank; Joseph      of MD                                           case due to my position at CIT/
 Ottin et al.                                                                 OneWest Bank.
                                                                             Lawsuit filed alleging 25 causes of
                                                                              action ranging from conspiracy to
                                                                              commit extortion, embezzlement and
                                                                              banking fraud to conspiracy to
                                                                              commit burglary, harassment,
                                                                              stalking, theft, and murder.
                                                                             This matter was dismissed without
                                                                              prejudice on October 16, 2014.
----------------------------------------------------------------------------------------------------------------
Heather Mnuchin v. Steven    CA Los Angeles Sup. Ct.         March 6, 2014   This matter relates to my divorce
 Mnuchin                                                                      from my second wife.
----------------------------------------------------------------------------------------------------------------
Carrington et al. v.         SC U.S. Dist. Ct.            December 6, 2013   I was a named defendant in this
 Mnuchin et al.                                                               case due to my position at CIT/
                                                                              OneWest Bank.
                                                                             Plaintiffs allege breach of
                                                                              contract and RESPA violations for
                                                                              alleged failure to maintain
                                                                              payments on property taxes for
                                                                              escrowed loan, resulting in tax
                                                                              sale in which borrowers were
                                                                              forced to redeem unpaid taxes and
                                                                              subsequently default. The
                                                                              complaint also alleges improper
                                                                              denial of loan modification.
                                                                             This matter has been appealed. See
                                                                              case 16-2190 above.
----------------------------------------------------------------------------------------------------------------
Colebrook, Teena v.          Sup. Ct, Los Angeles         0ctober 23, 2013   I was a named defendant in this
 Mnuchin, Steven T.--         County, CA                                      case due to my position at CIT/
 OneWest Bank CEO                                                             OneWest Bank.
                                                                             Small claims filing seeking maximum
                                                                              claim of $10,000 as a party in
                                                                              interest to the note and deed.
                                                                             Dismissed without prejudice on
                                                                              September 23, 2013.
----------------------------------------------------------------------------------------------------------------
State of New Jersey v.       Middletown PTownship           April 11, 2013   I was a named defendant in this
 Mnuchin, Steve; OneWest      PMunicipal Court,                               case due to my position at CIT/
 Bank, FSB                    Monmouth County, NJ                             OneWest Bank.
                                                                             Notice of warrant received on April
                                                                              1, 2013 identifying arrest warrant
                                                                              made out for Steve Mnuchin for
                                                                              unanswered complaint with bail
                                                                              amount set for $500. The
                                                                              referenced unanswered complaint
                                                                              names Steve Mnuchin and OneWest
                                                                              Bank for unremediated code
                                                                              violations.
                                                                             This matter was resolved by
                                                                              voluntary dismissal of charges
                                                                              against me on July 23, 2013;
                                                                              charges against OWB resolved by
                                                                              fine.
----------------------------------------------------------------------------------------------------------------
Clark v. Boyle et al.        CA U.S. Dist. Ct.,               July 6, 2012   I was a named defendant in this
                              North                                           case due to my position at CIT/
                                                                              OneWest Bank.
                                                                             Plaintiff alleges violations of
                                                                              RICO, bankruptcy fraud, unjust
                                                                              enrichment, extortion, fraud,
                                                                              constructive trust, intentional
                                                                              infliction of emotional distress,
                                                                              violation of CA Bus. and Prof.
                                                                              Code 17200 et seq., violation of
                                                                              CA Civil Code Section 789.3.
                                                                             This matter was dismissed without
                                                                              prejudice on October 1, 2014.
----------------------------------------------------------------------------------------------------------------
In re Madoff Securities      U.S. Ct. of App., 2nd           June 21, 2012   I was a named defendant in this
                              Cir.                                            case due to my position as co-
                                                                              executor of my mother's estate.
                                                                             Irving H. Picard, as trustee for
                                                                              debtor Bernard L. Madoff
                                                                              Securities LLC, sued to avoid
                                                                              fictitious profits paid by the
                                                                              debtor to hundreds of customers
                                                                              over the life of the Ponzi scheme
                                                                              operated by Madoff. The defendant
                                                                              customers moved to dismiss certain
                                                                              of these avoidance claims pursuant
                                                                              to 11 U.S.C. Sec.  546(e), which
                                                                              shields from recovery securities-
                                                                              related payments made by a
                                                                              stockbroker. The U.S. District
                                                                              Court for the Southern District of
                                                                              New York (Rakoff, J.) agreed that
                                                                              Sec.  546(e) barred the claims,
                                                                              dismissed them, and certified the
                                                                              dismissal as a final judgment. The
                                                                              trustee appealed. This case
                                                                              encompasses several consolidated
                                                                              matters
                                                                             U.S. Court of Appeals for the
                                                                              Second Circuit affirmed judgment
                                                                              of district court on  December 8,
                                                                              2014. Petition for writ of
                                                                              certiorari by U.S. Supreme Court
                                                                              denied on June 2, 2015.
----------------------------------------------------------------------------------------------------------------
Irving H. Picard, Trustee    NY U.S. Dist. Ct.,          November 30, 2011   I was a named defendant in this
 v. Estate of Elaine Cooper   South                                           case due to my position at co-
 et al.                                                                       executor of my mother's estate.
                                                                             Defendants filed a motion for entry
                                                                              of an order granting mandatory
                                                                              withdrawal of the reference of the
                                                                              above-captioned adversary
                                                                              proceeding pursuant to 28 U.S.C.
                                                                              Sec.  157(d) because allegations
                                                                              and claims by Irving H. Picard, as
                                                                              trustee for debtor Bernard L.
                                                                              Madoff Securities LLC, in the
                                                                              complaint in this action were
                                                                              substantially similar to those in
                                                                              another action (Picard v.
                                                                              Goldstein, Adv. Pro. No. 10-04482
                                                                              (BRL) (Bankr. S.D.N.Y.)) related
                                                                              to the Bernard Madoff suits
                                                                              initiated by Mr. Picard.
                                                                             The motion was denied on August 1,
                                                                              2014.
----------------------------------------------------------------------------------------------------------------
Carozza, David-Michael v.    CA Los Angeles Sup. Ct.         June 28, 2011   I was a named defendant in this
 IndyMac Venture LLC, et                                                      case due to my position at CIT/
 al.                                                                          OneWest Bank.
                                                                             Plaintiff voluntarily dismissed
                                                                              this matter on July 18, 2011.
----------------------------------------------------------------------------------------------------------------
David-Michael Carozza et     CA Los Angeles Sup. Ct.         June 28, 2011   I was a named defendant in this
 al. v. IndyMac Venture,                                                      case due to my position at CIT/
 LLC et al.                                                                   OneWest Bank.
                                                                             This matter was dismissed on July
                                                                              29, 2011.
----------------------------------------------------------------------------------------------------------------
Sheila Marie George v.       Bankruptcy Court,           December 16, 2010   I was a named defendant in this
 State of Washington DBA      Western District, King                          case due to my position at CIT/
 United States Bankruptcy     County, WA                                      OneWest Bank.
 Court et al.                                                                Bankruptcy-Borrower filed second
                                                                              chapter 13 in December of 2010.
                                                                              Sheila Marie George, Secured Party
                                                                              Creditor, filed a Subpoena and
                                                                              Adversary Pro Se complaint
                                                                              demanding that the Defendants
                                                                              produce their proof of claim
                                                                              regarding the original note and
                                                                              mortgage and registration
                                                                              statements as proof for
                                                                              inspection. Borrower alleges that
                                                                              securitization is illegal.
                                                                             This matter was dismissed without
                                                                              prejudice on January 31, 2011.
----------------------------------------------------------------------------------------------------------------
Theodore Frank v. Robert F.  U.S. Ct. of App., 7th         0ctober 1, 2010   I was a named defendant in this
 Booth Trust, et al.          Cir.                                            case due to my position at Sears
                                                                              Holdings Corp.
                                                                             Plaintiff alleged certain
                                                                              ``interlocking directorships''
                                                                              violated section 8 of the Clayton
                                                                              Act.
                                                                             Without conceding that the
                                                                              allegations had any merit
                                                                              whatsoever, the parties reached a
                                                                              confidential settlement.
----------------------------------------------------------------------------------------------------------------
Sheila Marie George v.       Bankruptcy Court,                June 2, 2010   I was a named defendant in this
 Phillip H. Brandt et al.     Western District, King                          case due to my position at CIT/
                              County, WA                                      OneWest Bank.
                                                                             Bankruptcy-Borrower filed chapter
                                                                              13 in December of 2009. Sheila
                                                                              Marie George, Secured Party
                                                                              Creditor, filed a Subpoena and
                                                                              Adversary Pro Se complaint
                                                                              demanding that the Defendants
                                                                              produce their proof of claim
                                                                              regarding the original note and
                                                                              mortgage and registration
                                                                              statements as proof for
                                                                              inspection. Borrower alleges that
                                                                              securitization is illegal.
                                                                             This matter was dismissed without
                                                                              prejudice on June 3, 2010.
----------------------------------------------------------------------------------------------------------------
Wright v. OneWest Mortgage   MD Prince George's Cir.        March 15, 2010   I was a named defendant in this
                              Ct.                                             case due to my position at CIT/
                                                                              OneWest Bank.
                                                                             This matter was dismissed on
                                                                              January 4, 2011.
----------------------------------------------------------------------------------------------------------------
David Morales v. Federal     CA U.S. Dist. Ct.,          February 16, 2010   I was a named defendant in this
 Deposit Insurance            Central                                         case due to my position at CIT/
 Corporation et al.                                                           OneWest Bank.
                                                                             It involved a Federal court action
                                                                              to remove the matter from State
                                                                              court.
                                                                             This matter was dismissed on April
                                                                              29, 2010 and remanded to State
                                                                              court (the State court action was
                                                                              dismissed with prejudice on
                                                                              November 8, 2011).
----------------------------------------------------------------------------------------------------------------
Gross v. Crowley et al.      IL U.S. Dist. Ct.,         September 14, 2009   I was a named defendant in this
                              North                                           case due to my position at Sears
                                                                              Holdings Corp.
                                                                             Plaintiff alleged certain
                                                                              ``interlocking directorships''
                                                                              violated section 8 of the Clayton
                                                                              Act.
                                                                             Without conceding that the
                                                                              allegations had any merit
                                                                              whatsoever, the parties reached a
                                                                              confidential settlement.
----------------------------------------------------------------------------------------------------------------
Robert F. Booth Trust v.     IL U.S. Dist. Ct.,            August 28, 2009   I was a named defendant in this
 Crowley et al.               North                                           case due to my position at Sears
                                                                              Holdings Corp.
                                                                             Plaintiff alleged certain
                                                                              ``interlocking directorships''
                                                                              violated section 8 of the Clayton
                                                                              Act.
                                                                             Without conceding that the
                                                                              allegations had any merit
                                                                              whatsoever, the parties reached a
                                                                              confidential settlement.
----------------------------------------------------------------------------------------------------------------
Estate of Elaine Terner      U.S. Tax Court                 August 7, 2009   I was a named defendant in this
 Cooper, Deceased, Steven                                                     case due to my position at co-
 Mnuchin, and Alan Mnuchin,                                                   executor of my mother's estate.
 Executors v. Commissioner                                                   The matter was resolved by a
 of Internal Revenue                                                          stipulated decision entered on
                                                                              August 17, 2015.
----------------------------------------------------------------------------------------------------------------
Daniel Barry Lindsey; Barr-  Western New York               August 3, 2009   I was a named defendant in this
 Lind Maintenance v.          Chautauqua County                               case due to my position at Sears
 Capital Contractors Inc.     Supreme Court                                   Holdings Corp.
 et al.                                                                      Plaintiff alleged that Sears
                                                                              breached certain contracts and/or
                                                                              defrauded a vendor.
                                                                             Without conceding that the
                                                                              allegations had any merit
                                                                              whatsoever, the parties reached a
                                                                              confidential settlement.
----------------------------------------------------------------------------------------------------------------
Jenkins v. Bair et al.       FL U.S. Dist. Ct.,            January 9, 2009   I was a named defendant in this
                              South                                           case due to my position at CIT/
                                                                              OneWest Bank.
                                                                             Plaintiff alleged violations of
                                                                              RICO, the Fair Debt Collection
                                                                              Practices Act, and ``common law
                                                                              malicious foreclosure.''
                                                                             This matter was dismissed with
                                                                              prejudice on October 30, 2009.
----------------------------------------------------------------------------------------------------------------
Mercedes Benz Financial v.   FL Palm Beach 15th                May 1, 2006   This matter relates to my position
 Steve Mnuchin                Judicial Cir.                                   as co-Pexecutor of my mother's
                                                                              estate.
----------------------------------------------------------------------------------------------------------------
In re: Elaine Terner Cooper  FL Palm Beach 15th          September 8, 2005   This matter relates to my position
                              Judicial Cir.                                   as co-Pexecutor of my mother's
                                                                              estate.
----------------------------------------------------------------------------------------------------------------
M & C C of Baltimore v.      MD Baltimore City Cir.            May 7, 2004   At this time, I do not have
 Bernard R. Fellerman et      Ct.                                             information regarding this matter.
 al.                                                                          Additional details will be
                                                                              provided as they become available.
----------------------------------------------------------------------------------------------------------------
Mnuchin, Steven T. v.        NY New York County          December 22, 1998   This matter relates to my divorce
 Mnuchin, Kathryn M.          Clerk Civil Index                               from my first wife.
----------------------------------------------------------------------------------------------------------------


                                 ______
                                 
      Questions Submitted for the Record to Steven Terner Mnuchin
               Questions Submitted by Hon. Orrin G. Hatch
                     trade: financial services data
    Question. Among my concerns with the Trans-Pacific Partnership, or 
TPP, agreement is the fact that it failed to prohibit local data 
storage requirements in the financial services sector. This outcome was 
inconsistent with the clear direction on data flows that Congress set 
out in TPA. These types of localization requirements are a serious 
problem for U.S. financial services companies, who often face pressure 
to store their data overseas. This increases costs, reduces data 
security, and in some cases, makes entering markets unfeasible. In 
short, these measures mean financial services jobs located in the 
United States may have to be moved overseas to meet foreign data 
localization requirements.

    I wonder whether you can give me your assurance that, if confirmed, 
you will combat data localization measures for all industry sectors 
wherever they appear, and not continue the past administration's 
practice of excluding financial services from those protections or from 
future trade negotiations.

    Answer. I will work with you and your staff to ensure that the 
versions of future trade agreements include financial services where 
appropriate.
                                  gses
    Question. As former Treasury Secretary Hank Paulson has stated, the 
conservatorship of mortgage giants Fannie and Freddie, also known as 
Government Sponsored Enterprises, or GSEs, were to be a ``time out,'' 
while the government decides how to restructure the GSEs. Fannie and 
Freddie went into conservatorship in 2008 which means that the ``time 
out'' has lasted for more than 8 full years.

    Numerous commentators, including analysts at the Federal Reserve, 
have commented on a need to finally get to restructuring Fannie and 
Freddie. For example, in a March 2015 Staff Report from the Federal 
Reserve Bank of New York, analysts wrote that ``. . . there appears to 
be broad consensus that Fannie Mae and Freddie Mac should be replaced 
by a private system--perhaps augmented by public reinsurance against 
extreme tail outcomes. . . .''

    You also recently echoed the need to get to finality on 
restructuring Fannie and Freddie, and I'd expect you, as nominee for 
Treasury Secretary, to be thinking about such issues. The Obama 
administration has, for the past 8 years, shared the view that Congress 
should pass legislation to reform our housing-finance system. Do you 
agree with the views of many that the ``time out'' on the GSEs ought to 
end, and Fannie and Freddie need to somehow be restructured or ended?

    Answer. I agree that the United States needs a comprehensive 
approach to its housing finance policy. With Fannie Mae and Freddie Mac 
both in conservatorship, it is difficult to articulate their long-term 
role within our housing finance policy. Eight years passed since they 
entered conservatorship and there has been a significant recovery of 
housing prices across the country. So that lends itself to be a good 
time, in my view, to address the desired future state we seek for 
housing finance in our country.

    I look forward to exploring with Congress and stakeholders across 
the public and private sector solutions to this important problem.
                     role of united states in oecd
    Question. The past several years have seen a focus by the United 
States and other countries in the OECD to address tax base erosion and 
profit shifting, or BEPS. Unfortunately, soon after the conclusion of a 
series of agreed-upon actions to address BEPS, some countries decided 
to go their own way and take actions that were inconsistent with the 
agreed-upon actions. Given this, what role, if any, should the United 
States continue to play at the OECD?

    Answer. The U.S. Representative to the OECD must vigorously advance 
the United States' agenda. As a founding member of the organization, 
the United States should take a leading role in shaping the agenda of 
the organization. In instances where other nations choose to take 
actions inconsistent with agreed upon actions, the United States should 
act in accordance with our best interests.
            treasury oversight of customs revenue functions
    Question. When the legacy agency to U.S. Customs and Border 
Protection (CBP) was transferred from the Treasury to the Department of 
Homeland Security (DHS) in 2002, Treasury retained oversight over the 
Customs revenue functions. A recent report by the Treasury's Office of 
Inspector General, however, has determined that Treasury is not 
providing proper oversight of the Customs revenue functions.

    Do I have your commitment that you will work to ensure that 
Treasury provides the proper oversight of Customs revenue functions of 
CBP?

    Answer. I will work with you, Mr. Chairman, to ensure that proper 
oversight occurs of the Customs revenue function.
                           increasing tariffs
    Question. Until recently, I have never heard so much discussion of 
raising tariffs. I understand and support the desire to improve U.S. 
trade, but higher tariffs are higher taxes. If we raise tariffs, we 
have to understand we are taxing American families.

    With that in mind, in what situations do you think it is 
appropriate to raise tariffs?

    Answer. Congress has created and codified a range of tools that are 
available to address unfair trade practices and cheating, and certain 
tariffs may be appropriate. President Trump has said that our trade 
policy will ensure that American companies and American workers should 
benefit.
                           retirement policy
    Question. Last year the Finance Committee reported out a bi-
partisan retirement reform bill, on a 26 to 0 vote in fact, that 
included reforms such as additional incentives for small businesses 
that set up retirement plans, authorization for employers to join so-
called ``multiple employer plans'' so that they can join forces to 
share the costs of offering a plan, and legislation making it easier 
for employers to provide, and for employees to purchase, retirement 
annuities in their 401(k)-type plans.

    I don't know whether you have had a chance to focus on retirement 
reform yet, but it has been a priority with the committee for quite 
some time and, as you can see, has very strong support.

    Can you assure me that the Treasury Department will work with the 
Finance Committee in the new Congress to enact retirement reform?

    Answer. Multiemployer plans in many cases are appropriate such that 
they can join forces and share costs. I look forward to working with 
you and your staff on this issue.
                 irs taxpayer service and cybersecurity
    Question. The IRS has faced significant problems over the past 
several years in providing quality taxpayer service and protecting 
taxpayer information from cybercriminals. What actions do you think the 
agency needs to take to increase quality taxpayer services and prevent 
cybercriminals from accessing taxpayer information and engaging in 
stolen identity refund fraud?

    Answer. I agree that the IRS can be more effective at providing 
taxpayer service and protecting taxpayer information. Technology should 
be used to improve the accuracy and security of tax administration. If 
confirmed, I look forward to working closely with the IRS Commissioner 
and other Federal officials to achieve this goal.
  currency analysis and reporting by treasury and the role of congress
    Question. In order to strengthen the Department of the Treasury's 
toolbox for addressing international exchange rate issues, the Congress 
passed the Trade Facilitation and Trade Enforcement Act--also known as 
the Customs bill--last year.

    This Act expanded the Department's currency analysis and reporting 
requirements; created a bipartisan advisory committee on international 
exchange rate policies; and requires enhanced engagement with and, when 
appropriate, remedial actions against countries of chief concern.

    Do you agree that in order to address international exchange rate 
concerns successfully, the Congress and the administration must work 
together and within the frameworks of the existing tools that have been 
authorized?

    Answer. I agree that it is important for Congress and the 
administration to work together, utilizing the tools that are 
authorized by law.
                                red tape
    Question. Our current system of regulation and endless red tape has 
placed many American businesses in a stranglehold, struggling to keep 
the lights on. Even public investment in infrastructure, as the Obama 
administration found when it was seeking ``shovel ready'' projects but 
struggled to find them, faces regulatory and permitting obstacles that 
simply don't make sense.

    Writing on a need for infrastructure investment in the country, for 
example, liberal economist and advisor to Democratic administrations 
Larry Summers recently asked the following question: ``How, we ask, 
could our society have regressed to the point where a bridge that could 
be built in less than a year one century ago takes five times as long 
to repair today?'' He also wrote that: ``Progressive advocates of more 
investment should compromise with conservative sceptics and, in the 
context of increased spending, accept regulatory streamlining, as well 
as requirements that projects undergo cost-benefit analysis.''

    As the principal economic advisor to the President, how would you 
ensure our businesses and those in charge of public infrastructure 
projects are given the opportunity not just to survive, but to prosper 
and therefore contribute to our economic growth?

    Answer. Mr. Chairman, I concur with your observations concerning 
the need for government to operate more efficiently to serve the public 
needs. In areas such as our infrastructure plans, implementing viable 
programs that can be managed effectively but without excessive 
regulation and bureaucracy is critical.
                   pass-through vs. individual rates
    Question. President Trump campaigned on lowering both the corporate 
income tax rate and the rate imposed on pass-through business income to 
15 percent. Some concerns have been raised about ``gaming the system'' 
by high-income individuals to classify income that otherwise would be 
subject to individual income tax rates as pass-through business income 
subject to the lower 15 percent rate. What are your thoughts on this 
issue and the concern raised, and do you believe there are ways to 
address such concerns while maintaining the lower tax rate for pass-
through business income?

    Answer. We will work with Congress to make sure that the language 
prevents high income individuals from gaming the system and using pass-
throughs. While at the same time we will work with Congress to make 
sure that pass-throughs have the benefit of the business tax.
                   currency and international forums
    Question. I certainly understand concerns regarding international 
exchange rate policies. However, I believe that it will be more 
effective to address these issues through multilateral and long-term 
solutions than through unilateral and short-term actions.

    As such, I have long supported the Department of the Treasury's 
efforts, under both Republican and Democratic administrations, to 
address these issues at the International Monetary Fund, the G20, and 
the G7, and through discussions with countries of chief concern.

    Do you agree that the Department should continue to work within 
these and other forums to seek multilateral and long-term solutions to 
these concerns?

    Answer. I fully support the objective of taking effective actions, 
consistent with our international obligations, to provide a level 
playing field for American workers and firms. We will address the issue 
of currency manipulation as an unfair trade practice and will work with 
the International Monetary Fund, the G7, the G20, and with major 
trading partners.
                 intellectual property rights in trade
    Question. About a year ago, President Obama signed the Trade 
Facilitation and Trade Enforcement Act of 2015 (Pub. L. 114-125), 
commonly referred to as the Customs bill, into law. The Customs bill 
originated out of this committee and contained many important 
provisions regarding the enforcement of intellectual property rights. 
Some of these statutes require U.S. Customs and Border Protection (CBP) 
to promulgate regulations. As the Secretary of the Treasury, you will 
have the signing authority over these regulations.

    Do I have your commitment to ensure that these regulations adhere 
to Congress's intent?

    Answer. If confirmed, I intend to fully implement the regulations, 
consistent with its congressional intent.
                               estate tax
    Question. President Trump has called for the repeal of the estate 
tax and for capital gains held until death to be taxable, with the 
first $10 million tax free. How do you respond to those who argue that 
not only should the estate tax not be repealed, but in fact it should 
be expanded through a higher tax rate and lower exemption amounts?

    Answer. The administration's goal in eliminating the estate tax is 
to protect small and medium-sized businesses and family farms. We look 
forward to working with Congress on this issue as part of overall tax 
reform.
                                  fsoc
    Question. The so-called ``Dodd Frank'' Act established a Financial 
Stability Oversight Council--called the FSOC (FSOC).

    One notion behind the FSOC was to have regulators talk to each 
other. Prior to the financial crisis, financial regulators operated in 
silos and failed miserably in their oversight and regulation of the 
financial system.

    Beyond that, the FSOC was set up with noble goals, such as ending 
too big to fail and responding to emerging threats to ``financial 
stability,'' even though the FSOC has no meaningful measure of 
stability.

    Unfortunately, the FSOC has been run under the Obama administration 
as an opaque roving regulator. Moreover, by its very construction, it 
is unlikely that the FSOC would ever identify or respond in any 
meaningful way if monetary or fiscal policy turned out to threaten 
financial stability.

    Indeed, during the debt-limit standoff in 2011, the FSOC failed the 
U.S. people by withholding information from Congress.

    You will, if confirmed, chair the FSOC.

    If you become chairman, would you continue the FSOC's existing 
practices of essentially acting as an opaque roving regulator?

    Answer. I very much look forward to serving as Chair of the FSOC 
and working with its group of leaders of important and largely 
independent regulatory bodies. Having a common forum for key financial 
regulators to meet, share information and address financial sector 
industry issues is inherently valuable. If confirmed, I will not 
continue, as you suggest, the FSOC's existing practice of acting as an 
opaque regulator.
              treasury compliance with administrative law
    Question. There has been an unfortunate trend in recent decades 
suggesting that tax regulations are somehow not subject to the normal 
requirements of administrative law.

    That trend has suggested that somehow tax regulations and other 
rules promulgated by the IRS are not subject to the same notice and 
comment period as other regulations by other Federal agencies, that 
they are not subject to the same cost-benefit analysis as other Federal 
regulations, that they are not subject to the same OMB Office of 
Regulatory Affairs Analysis as other Federal regulations, and that they 
are not subject to the same Congressional Review Act requirements as 
other Federal agencies.

    The Supreme Court, in its 2011 Mayo decision, and the Tax Court, in 
its 2015 Altera decision, instructed the IRS that the IRS is not exempt 
from administrative law requirements. The IRS is subject to the same 
administrative law requirements as any other Federal agency.

    Can you assure me that you will make sure that IRS regulations, 
rules, and guidance comply with administrative law requirements?

    Answer. If confirmed, I will ensure that the Treasury follows the 
requirements of administrative law, where applicable.
                      transparency and debt limit
    Question. The statutory Federal debt limit has been suspended until 
March of this year. Once we near the debt limit, Treasury has some 
mechanisms it can use, called ``extraordinary measures'' even though 
they have become fairly ordinary, to extend the time it takes to hit 
the debt limit beyond March. After the extraordinary measures are used 
up, either the limit is raised or the U.S. would default on some 
obligations.

    During a debt-limit impasse in 2011, Treasury and the Federal 
Reserve formed contingency plans that included prioritization of 
payments in the event that Treasury exhausted its borrowing authority. 
Since July of 2011, I repeatedly asked Treasury and Federal Reserve 
officials for their plans, only to be told that there were no plans, or 
that Treasury and the Fed had ideas, but not really plans. Recently, 
however, transcripts from a special meeting of the Fed's Federal Open 
Market Committee revealed clearly that the plans I have been requesting 
were, in fact, formulated. That, of course, means that the Fed and 
Treasury officials in the Obama administration withheld information 
from Congress and the American people about the Nation's finances.

    If asked by any member of Congress about any plans formulated by 
the Federal Government to handle our Nation's finances, do you pledge 
to be responsive to Congress and the American people and not withhold 
information?

    Answer. As I have stated, and as has been the position of all prior 
Secretaries of the Treasury, honoring the full faith and credit of our 
outstanding debt is a critical commitment.

    I will work with your office to review the manner of transparency 
provided by the Department surrounding this topic, including the 
implications of invoking extraordinary measures.
               treasury office of state and local finance
    Question. In April of 2014, Treasury established, without 
notification or discussion with the then-ranking member of the Senate 
Finance Committee which has the responsibility of oversight of 
Treasury, a new Office of State and Local Finance. That Office has 
engaged many of its activities in recent years to lobbying Congress for 
bankruptcy authority for Puerto Rico, including what in my view has 
been highly politicized rhetoric concerning ``austerity'' versus 
creditor ``haircuts,'' where many creditors happen to be innocent 
residents of Puerto Rico who purchased bonds issued by numerous 
component units of the Puerto Rico Government.

    That Office was also provided with authority to provide ``technical 
assistance'' to Puerto Rico, and has recently tried to expand that 
authority, through requests to congressional appropriators, to include 
authority for Treasury to provide technical assistance also to States 
or municipalities. One risk of such an extension would be perceptions 
that could be created that somehow Treasury's Office of State and Local 
Finance would be the touchpoint in the Federal Government for a 
teetering State or locality to lobby for a federally backed bailout. 
The risk is especially pronounced given that the Office of State and 
Local Finance at Treasury has not been responsive to my staff's 
repeated requests for briefings to provide transparency with respect to 
whatever have been the Office's ``technical assistance'' efforts in 
Puerto Rico and why at least one Treasury official has signed 
confidentiality agreements with component units of the Puerto Rico 
Government, including a bond-issuing unit. Numerous troubling press 
reports suggest that Treasury officials have engaged in activities that 
may be more political than what Congress would reasonably expect to be 
``technical'' assistance.

    Will you review the Office of State and Local Finance to determine 
whether it is necessary for Treasury to have such an office?

    Answer. I will be pleased to look into the Office of State and 
Local Finance and evaluate both its focus and effectiveness as you 
suggest.

    Question. Will you ensure that Treasury officials provide my staff 
with a briefing, with verifiable data on technical-assistance 
activities, on technical assistance that Treasury has performed for 
Puerto Rico?

    Answer. PROMESA was an important bipartisan piece of legislation to 
provide for both short and long term solutions to the financial 
struggles of Puerto Rico. As you know, since it has been enacted, an 
independent board has been appointed to review and validate the 
feasibility of finance plans of the Government of Puerto Rico. I will 
provide your staff with a briefing as you've requested.
              treasury commitments in international forums
    Question. Treasury officials frequently meet in international 
forums, such as the G7, G20, IMF, OECD, Financial Stability Board 
(FSB), and multilateral development banks. Of course, it is important 
that the United States provide economic and financial leadership and 
engagement internationally. It is also important, I believe, for the 
United States to stand against unelected international bureaucracies 
that promote policies to enlarge and enhance their organizations or 
promote policies that do not promote the well-being of U.S. workers and 
taxpayers.

    The Obama administration, including the Treasury Secretary, engaged 
in international ``agreements,'' at times with no substantive 
discussion with me as I served as either ranking member or chairman of 
the Finance Committee with responsibilities for oversight of Treasury 
activities. For example, the Obama administration committed the United 
States to participate in a ``New Arrangements to Borrow'' at the IMF. 
That ``new arrangement,'' which was agreed upon by unelected 
representative of G20 countries, increased resources available to the 
IMF by up to $500 billion, thereby tripling total pre-crisis lending or 
bailout resources of the IMF. The ``arrangement,'' promoted by Obama 
administration officials, including Treasury officials, without input 
from many of us in Congress, was subsequently presented to Congress as 
some sort of international ``commitment,'' even though I had committed 
to nothing.

    The IMF, subsequent to the initial commitments by unelected G20 
officials, notably broke its own rules to bail out Greece, even when 
the IMF was aware of the possibility that Greece would then require yet 
more bailouts--that is, that the IMF was making a bad loan, part of 
which comes from resources provided by U.S. taxpayers. U.S. 
representatives at the IMF in the Obama administration did not block 
the rule breaking.

    Do I have your commitment that you will closely examine the extent 
to which U.S. resources placed in international institutions such as 
the IMF, OECD, and elsewhere are serving the best interests of U.S. 
workers and taxpayers?

    Answer. The administration will ensure that U.S. resources placed 
in international institutions such as the IMF and multilateral 
development banks are used to promote policies consistent with the 
objectives of the United States to the greatest extent possible.
                           retirement savings
    Question. Treasury officials, acting on an executive order from 
President Obama, created a scheme called myRA for people who don't have 
access to employer-
sponsored retirement savings plans. It is my understanding that the 
scheme has received relatively few savers. The scheme was established 
by the Obama administration in lieu of working with Congress to help 
Americans save for retirement. That was unfortunate, in my view, since 
I have solid proposals with bipartisan backing to do just that.

    In establishing the myRA scheme, Treasury officials used a 
permanent, indefinite appropriation to the Treasury that Congress 
provided to provide administrative ease for ordinary, but variable, 
costs that the government would incur for things like tax collection. 
Specifically, the appropriation for ``financial agents'' allows 
Treasury to hire private-sector firms to provide services on behalf of 
the Treasury. It is my federally sponsored saving scheme.

    In addition to a permanent, indefinite appropriation for Treasury 
to retain financial agents, Treasury has a permanent, indefinite 
appropriation to retain ``fiscal agents,'' with the Federal Reserve 
(Fed) being a principal example. Through this appropriation, certain 
services--such as assistance in aggregating tax receipts and processing 
payments--provided by the Fed are paid for by Treasury. The Obama 
administration may have misused funds from the permanent, indefinite 
appropriation for fiscal agents by compensating the Federal Reserve to 
advertise that myRA scheme that the administration unilaterally decided 
upon. I write the word ``may,'' because, while I have asked for copies 
of fiscal agency agreements between the Treasury and Fed, thus far, 
neither the Treasury nor the Fed has been willing to provide them.

    Will you commit to examining the myRA savings scheme that was 
unilaterally established by the Obama administration, to determine 
whether it is an efficient use of taxpayer resources and whether it 
helps American workers to save?

    Answer. Yes, I look forward to working with your office and 
reviewing the myRA savings scheme.

    Question. Will you commit to providing copies of fiscal agency 
agreements between Treasury and the Federal Reserve?

    Answer. If confirmed, I will provide you and your staff copies of 
such agreements.
                         debt contingency plans
    Question. Since July of 2011, I have asked Treasury officials in 
the Obama administration and Chairs Bernanke and Yellen of the Federal 
Reserve Board for copies of contingency plans that Treasury and the Fed 
constructed during the debt-limit impasse of 2011 to prioritize Federal 
payments in the event that Treasury ran out of an ability to borrow 
because of the statutory debt limit and had insufficient cash to 
service all incoming due obligations.

    Despite my repeated request for the contingency plans to prioritize 
payments developed by Treasury officials in the Obama administration 
and officials at the Federal Reserve, and my oversight responsibilities 
with respect to Treasury and U.S. debt obligations, I have not received 
copies of the plans or briefings on the plans. At times, those 
officials denied that there were contingency plans, or obfuscated on 
the meaning of the word ``plan,'' at the expense of necessary 
transparency in government. Upon the Federal Reserve's release, more 
than 5 years after the fact, of transcripts of a special conference-
call meeting on contingency plans held by the Fed's Federal Open Market 
Committee, it is readily apparent that detailed contingency plans that 
I have been asking for since July of 2011 were in fact developed. To 
date, I have not seen or been briefed on the plans.

    That is, Treasury officials in the Obama administration and 
officials at the Federal Reserve have withheld information from 
Congress that I have been requesting from as far back as July of 2011. 
In addition and as testimony to the opaque nature of the Financial 
Stability Oversight Council (FSOC), I will note that I had asked every 
voting member of the FSOC in 2011 for information they may have had 
with respect to the prioritization contingency plans developed by 
Treasury officials in the Obama administration and by officials at the 
Federal Reserve. I have yet to receive the plans or a briefing on the 
plans.

    Will you commit to working with my staff to uncover those plans?

    Answer. I understand your question and concern and would be pleased 
to review this matter with you.

    Question. Mr. Mnuchin, several of my Democratic colleagues 
described repeal of the Affordable Care Act or ObamaCare as a tax 
increase on middle- and lower-
income taxpayers. I attach a distribution analysis from the Joint 
Committee on Taxation, Congress' non-partisan tax legislation 
scorekeeper, dated May 4, 2010. I ask you to review the tables.


     Distributional Effects of a Proposal to Increase the Hospital Insurance (HI) Tax on Certain High-Income Individuals and Impose a Medicare Tax on
     Certain Unearned Income as Included in H.R. 4872, the ``Reconciliation Act of 2010,'' as Passed by the House in Combination With H.R. 3590, the
                                         ``Patient Protection and Affordable Care Act (PPACA),'' as Enacted \1\
                                                                   Calendar Year 2015
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                    CHANGE IN FEDERAL     FEDERAL TAXES \3\     FEDERAL TAXES \3\   AVERAGE TAX RATE \4\
                                                                        TAXES \3\         UNDER PRESENT LAW      UNDER PROPOSAL    ---------------------
                                                                 ------------------------------------------------------------------  Present    Proposal
                       INCOME CATEGORY \2\                                                                                             Law    ----------
                                                                   Millions   Percent    Billions   Percent    Billions   Percent  -----------
                                                                                                                                     Percent    Percent
--------------------------------------------------------------------------------------------------------------------------------------------------------
Less than $10,000...............................................        $1        \6\        $10       0.4%        $10       0.3%       7.6%       7.6%
$10,000 to $20,000..............................................        $1        \6\        $18       0.6%        $18       0.6%       4.8%       4.8%
$20,000 to $30,000..............................................        $2        \6\        $48       1.7%        $48       1.7%      10.3%      10.3%
$30,000 to $40,000..............................................        $2        \6\        $81       2.9%        $81       2.8%      13.8%      13.8%
$40,000 to $50,000..............................................        $1        \6\       $103       3.6%       $103       3.6%      14.5%      14.5%
$50,000 to $75,000..............................................       $13        \6\       $299      10.5%       $299      10.4%      16.2%      16.2%
$75,000 to $100,000.............................................       $11        \6\       $318      11.2%       $318      11.1%      18.1%      18.1%
$100,000 to $200,000............................................      $163        \6\       $812      28.6%       $812      28.3%      22.5%      22.5%
$200,000 to $500,000............................................    $6,230       1.3%       $484      17.0%       $490      17.1%      27.4%      27.9%
$500,000 to $1,000,000..........................................    $5,745       3.1%       $186       6.6%       $192       6.7%      29.8%      31.0%
$1,000,000 and over.............................................   $17,975       3.7%       $479      16.9%       $497      17.3%      29.8%      31.7%
--------------------------------------------------------------------------------------------------------------------------------------------------------
    Total, All Taxpayers........................................   $30,145       1.1%     $2,838     100.0%     $2,868     100.0%      21.1%      21.4%
--------------------------------------------------------------------------------------------------------------------------------------------------------
Source: Joint Committee on Taxation.
Detail may not add to total due to rounding.
 
------------------------------
\1\ The proposal would increase the HI tax by 0.9 percentage points on earnings in excess of $200,000 ($250,000 for married taxpayers filing a joint
  return). Also, the proposal would impose a 3.8% tax on the investment income of taxpayers with AGI in excess of $200,000 ($250,000). The income
  thresholds are not indexed for inflation. The analysis is relative to present law before the enactment of PPACA.
\2\ The income concept used to place tax returns into income categories is adjusted gross income (AGI) plus: (1) tax-exempt interest, (2) employer
  contributions for health plans and life insurance, (3) employer share of FICA tax, (4) worker's compensation, (5) nontaxable Social Security benefits,
  (6) insurance value of Medicare benefits, (7) alternative minimum tax preference items, and (8) excluded income of U.S. citizens living abroad.
  Categories are measured at 2009 levels.
\3\ Federal taxes are equal to individual income tax (including the outlay portion of refundable credits), employment tax (attributed to employees), and
  excise taxes (attributed to consumers). Corporate income tax is not included due to uncertainty concerning the incidence of the tax. Individuals who
  are dependents of other taxpayers and taxpayers with negative income are excluded from the analysis.
\4\ The average tax rate is equal to Federal taxes described in footnote 3 divided by income described in footnote 2.
\5\ Less than $500,000.
\6\ Less than 0.05%.



     Distributional Effects of a Proposal to Increase the Hospital Insurance (HI) Tax on Certain High-Income Individuals and Impose a Medicare Tax on
     Certain Unearned Income as Included in H.R. 4872, the ``Reconciliation Act of 2010,'' as Passed by the House in Combination With H.R. 3590, the
                                         ``Patient Protection and Affordable Care Act (PPACA),'' as Enacted \1\
                                                                   Calendar Year 2017
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                    CHANGE IN FEDERAL     FEDERAL TAXES \3\     FEDERAL TAXES \3\   AVERAGE TAX RATE \4\
                                                                        TAXES \3\         UNDER PRESENT LAW      UNDER PROPOSAL    ---------------------
                                                                 ------------------------------------------------------------------  Present    Proposal
                       INCOME CATEGORY \2\                                                                                             Law    ----------
                                                                   Millions   Percent    Billions   Percent    Billions   Percent  -----------
                                                                                                                                     Percent    Percent
--------------------------------------------------------------------------------------------------------------------------------------------------------
Less than $10,000...............................................       \5\        \6\        $10       0.3%        $10       0.3%       7.3%       7.3%
$10,000 to $20,000..............................................        $1        \6\        $19       0.6%        $19       0.6%       4.8%       4.8%
$20,000 to $30,000..............................................       \5\        \6\        $52       1.7%        $52       1.7%      10.4%      10.4%
$30,000 to $40,000..............................................        $4        \6\        $88       2.8%        $88       2.8%      13.9%      13.9%
$40,000 to $50,000..............................................       \5\        \6\       $111       3.6%       $111       3.5%      14.5%      14.5%
$50,000 to $75,000..............................................       $15        \6\       $325      10.5%       $325      10.3%      16.2%      16.2%
$75,000 to $100,000.............................................       $12        \6\       $346      11.1%       $346      11.0%      18.0%      18.0%
$100,000 to $200,000............................................      $403        \6\       $887      28.5%       $888      28.2%      22.6%      22.6%
$200,000 to $500,000............................................    $7,492       1.4%       $535      17.2%       $543      17.3%      27.7%      28.2%
$500,000 to $1,000,000..........................................    $6,346       3.1%       $205       6.6%       $211       6.7%      29.9%      31.2%
$1,000,000 and over.............................................   $19,951       3.8%       $531      17.1%       $551      17.5%      29.8%      31.7%
--------------------------------------------------------------------------------------------------------------------------------------------------------
    Total, All Taxpayers........................................   $34,224       1.1%     $3,109     100.0%     $3,144     100.0%      21.2%      21.5%
--------------------------------------------------------------------------------------------------------------------------------------------------------
Source: Joint Committee on Taxation.
Detail may not add to total due to rounding.
 
------------------------------
\1\ The proposal would increase the HI tax by 0.9 percentage points on earnings in exess of $200,000 ($250,000 for married taxpayers filing a joint
  return). Also, the proposal would impose a 3.8% tax on the investment income of taxpayers with AGI in exess of $200,000 ($250,000). The income
  thresholds are not indexed for inflation. The analysis is relative to present law before the enactment of PPACA.
\2\ The income concept used to place tax returns into income categories is adjusted gross Income (AGI) plus: (1) tax-exempt interest, (2) employer
  contributions for health plans and life insurance, (3) employer share of FICA tax, (4) worker's compensation, (5) nontaxable Social Security benefits,
  (6) insurance value of Medicare benefits, (7) alternative minimum tax preference items, and (8) excluded income of U.S. citizens living abroad.
  Categories are measured at 2009 levels.
\3\ Federal taxes are equal to individual income tax (including the outlay portion of refundable credits), employment tax (attributed to employees), and
  excise taxes (attributed to consumers). Corporate income tax is not included due to uncertainty concerning the incidence of the tax. Individuals who
  are dependents of other taxpayers and taxpayers with negative income are excluded from the analysis.
\4\ The average tax rate is equal to Federal taxes described in footnote 3 divided by income described in footnote 2.
\5\ Less than $500,000.
\6\ Less than 0.05%.



     Distributional Effects of a Proposal to Increase the Hospital Insurance (HI) Tax on Certain High-Income Individuals and Impose a Medicare Tax on
     Certain Unearned Income as Included in H.R. 4872, the ``Reconciliation Act of 2010,'' as Passed by the House in Combination With H.R. 3590, the
                                         ``Patient Protection and Affordable Care Act (PPACA),'' as Enacted \1\
                                                                   Calendar Year 2019
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                    CHANGE IN FEDERAL     FEDERAL TAXES \3\     FEDERAL TAXES \3\   AVERAGE TAX RATE \4\
                                                                        TAXES \3\         UNDER PRESENT LAW      UNDER PROPOSAL    ---------------------
                                                                 ------------------------------------------------------------------  Present    Proposal
                       INCOME CATEGORY \2\                                                                                             Law    ----------
                                                                   Millions   Percent    Billions   Percent    Billions   Percent  -----------
                                                                                                                                     Percent    Percent
--------------------------------------------------------------------------------------------------------------------------------------------------------
Less than $10,000...............................................       \5\        \6\        $11       0.3%        $11       0.3%       7.0%       7.0%
$10,000 to $20,000..............................................        $1        \6\        $21       0.6%        $21       0.6%       4.8%       4.8%
$20,000 to $30,000..............................................       \5\        \6\        $57       1.7%        $57       1.7%      10.4%      10.4%
$30,000 to $40,000..............................................        $4        \6\        $95       2.8%        $95       2.8%      14.0%      14.0%
$40,000 to $50,000..............................................        $2        \6\       $120       3.5%       $120       3.5%      14.5%      14.5%
$50,000 to $75,000..............................................       $15        \6\       $352      10.4%       $352      10.3%      16.1%      16.1%
$75,000 to $100,000.............................................       $18        \6\       $377      11.1%       $377      11.0%      17.9%      17.9%
$100,000 to $200,000............................................      $424        \6\       $966      28.5%       $966      28.2%      22.6%      22.6%
$200,000 to $500,000............................................    $8,623       1.5%       $589      17.3%       $597      17.4%      27.9%      28.5%
$500,000 to $1,000,000..........................................    $6,824       3.0%       $224       6.6%       $231       6.7%      30.0%      31.2%
$1,000,000 and over.............................................   $21,695       3.7%       $583      17.2%       $604      17.6%      29.8%      31.8%
--------------------------------------------------------------------------------------------------------------------------------------------------------
    Total, All Taxpayers........................................   $37,606       1.1%     $3,393     100.0%     $3,431     100.0%      21.2%      21.5%
--------------------------------------------------------------------------------------------------------------------------------------------------------
Source: Joint Committee on Taxation.
Detail may not add to total due to rounding.
------------------------------
\1\ The proposal would increase the HI tax by 0.9 percentage points on earnings in exess of $200,000 ($250,000 for married taxpayers filing a joint
  return). Also, the proposal would impose a 3.8% tax on the investment income of taxpayers with AGI in excess of $200,000 ($250,000). The income
  thresholds are not indexed for inflation. The analysis is relative to present law before the enactment of PPACA.
\2\ The income concept used to place tax returns into income categories is adjusted gross income (AGI) plus: (1) tax-exempt interest, (2) employer
  contributions for health plans and life insurance, (3) employer share of FICA tax, (4) worker's compensation, (5) nontaxable Social Security benefits,
  (6) insurance value of Medicare benefits, (7) alternative minimum tax preference items, and (8) exduded income of U.S. citizens living abroad.
  Categories are measured at 2009 levels.
\3\ Federal taxes are equal to individual income tax (including the outlay portion of refundable cedits), employment tax (attributed to employees), and
  excise taxes (attributed to consumers). Corporate income tax is not included due to uncertainty concerning the incidence of the tax. Individuals who
  are dependents of other taxpayers and taxpayers with negative income are excluded from the analysis.
\4\ The average tax rate is equal to Federal taxes described in footnote 3 divided by income described in footnote 2.
\5\ Less than $500,000.
\6\ Less than 0.05%.



     Distributional Effects of a Proposal to Provide Exchange Plan Credits and Subsidies to Certain Low-Income Taxpayers as Included in H.R. 4872, the
  ``Reconciliation Act of 2010,'' as Passed by the House in Combination With H.R. 3590, the ``Patient Protection and Affordable Care Act (PPACA),'' as
                                                                Passed by the Senate \1\
                                                                   Calendar Year 2017
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                               CHANGE IN FEDERAL TAXES    FEDERAL TAXES \3\     FEDERAL TAXES \3\   AVERAGE TAX RATE \4\
                                                                         \3\              UNDER PRESENT LAW      UNDER PROPOSAL    ---------------------
                                                              ---------------------------------------------------------------------  Present    Proposal
                     INCOME CATEGORY \2\                                                                                               Law    ----------
                                                                 Millions     Percent    Billions   Percent    Billions   Percent  -----------
                                                                                                                                     Percent    Percent
--------------------------------------------------------------------------------------------------------------------------------------------------------
Less than $10,000............................................       -$455       -4.4%        $10       0.3%        $10       0.3%       7.3%       6.9%
$10,000 to $20,000...........................................     -$6,214      -32.6%        $19       0.6%        $13       0.4%       4.8%       3.2%
$20,000 to $30,000...........................................    -$20,359      -39.0%        $52       1.7%        $32       1.1%      10.4%       6.3%
$30,000 to $40,000...........................................    -$22,648      -25.8%        $88       2.8%        $65       2.2%      13.9%      10.3%
$40,000 to $50,000...........................................    -$17,380      -15.7%       $111       3.6%        $94       3.1%      14.5%      12.2%
$50,000 to $75,000...........................................    -$23,760       -7.3%       $325      10.5%       $301      10.0%      16.2%      15.0%
$75,000 to $100,000..........................................     -$6,865       -2.0%       $346      11.1%       $339      11.3%      18.0%      17.6%
$100,000 to $200,000.........................................     -$1,173       -0.1%       $887      28.5%       $886      29.4%      22.6%      22.6%
$200,000 to $500,000.........................................         \5\         \6\       $535      17.2%       $535      17.8%      27.7%      27.7%
$500,000 to $1,000,000.......................................         \5\         \6\       $205       6.6%       $205       6.8%      29.9%      29.9%
$1,000,000 and over..........................................         \5\         \6\       $531      17.1%       $531      17.6%      29.8%      29.8%
--------------------------------------------------------------------------------------------------------------------------------------------------------
    Total, All Taxpayers.....................................    -$98,853       -3.2%     $3,109     100.0%     $3,011     100.0%      21.2%      20.5%
--------------------------------------------------------------------------------------------------------------------------------------------------------
Source: Joint Committee on Taxation.
Detail may not add to total due to rounding.
------------------------------
\1\ The proposal would provide that refundable tax credits would be provided to taxpayers who enroll in exchange plans with income between 100 percent
  and 400 percent of FPL. The proposal provides for outlays in the form of cost-sharing subsidies for out-of-pocket medical expenses for exchange
  participants between 100% and 250% of FPL. The analysis is a stand-alone estimate of the effects of the subsidies and credits and does not indude
  interaction with other parts of the broader package. The analysis is relative to present law before the enactment of PPACA.
\2\ The income concept used to place tax returns into income categories is adjusted gross income (AGI) plus: (1) tax-exempt interest, (2) employer
  contributions for health plans and life insurance, (3) employer share of FICA tax, (4) worker's compensation, (5) nontaxable Social Security benefits,
  (6) insurance value of Medicare benefits, (7) alternative minimum tax preference items, and (8) excluded income of U.S. citizens living abroad.
  Categories are measured at 2009 levels.
\3\ Federal taxes are equal to individual income tax (including the outlay portion of refundable credits), employment tax (attributed to employees), and
  excise taxes (attributed to consumers). Corporate income tax is not included due to uncertainty concerning the incidence of the tax. Individuals who
  are dependents of other taxpayers and taxpayers with negative income are excluded from the analysis.
\4\ The average tax rate is equal to Federal taxes described in footnote 3 divided by income described in footnote 2.
\5\ Less than $500,000.
\6\ Less than 0.05%.



     Distributional Effects of a Proposal to Provide Exchange Plan Credits and Subsidies to Certain Low-Income Taxpayers as Included in H.R. 4872, the
  ``Reconciliation Act of 2010,'' as Passed by the House in Combination With H.R. 3590, the ``Patient Protection and Affordable Care Act (PPACA),'' as
                                                                Passed by the Senate \1\
                                                                   Calendar Year 2019
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                               CHANGE IN FEDERAL TAXES    FEDERAL TAXES \3\     FEDERAL TAXES \3\   AVERAGE TAX RATE \4\
                                                                         \3\              UNDER PRESENT LAW      UNDER PROPOSAL    ---------------------
                                                             ----------------------------------------------------------------------  Present    Proposal
                     INCOME CATEGORY \2\                                                                                               Law    ----------
                                                                Millions      Percent    Billions   Percent    Billions   Percent  -----------
                                                                                                                                     Percent    Percent
--------------------------------------------------------------------------------------------------------------------------------------------------------
Less than $10,000...........................................        -$575       -5.4%        $11       0.3%        $10       0.3%       7.0%       6.6%
$10,000 to $20,000..........................................      -$7,699      -37.3%        $21       0.6%        $13       0.4%       4.8%       3.0%
$20,000 to $30,000..........................................     -$23,750      -41.8%        $57       1.7%        $33       1.0%      10.4%       6.1%
$30,000 to $40,000..........................................     -$26,173      -27.6%        $95       2.8%        $69       2.1%      14.0%      10.1%
$40,000 to $50,000..........................................     -$19,981      -16.7%       $120       3.5%       $100       3.0%      14.5%      12.1%
$50,000 to $75,000..........................................     -$27,098       -7.7%       $352      10.4%       $325       9.9%      16.1%      14.9%
$75,000 to $100,000.........................................      -$7,617       -2.0%       $377      11.1%       $370      11.3%      17.9%      17.5%
$100,000 to $200,000........................................      -$1,059       -0.1%       $966      28.5%       $965      29.4%      22.6%      22.6%
$200,000 to $500,000........................................          \5\         \6\       $589      17.3%       $589      18.0%      27.9%      27.9%
$500,000 to $1,000,000......................................          \5\         \6\       $224       6.6%       $224       6.8%      30.0%      30.0%
$1,000,000 and over.........................................          \5\         \6\       $583      17.2%       $583      17.8%      29.8%      29.8%
--------------------------------------------------------------------------------------------------------------------------------------------------------
Total, All Taxpayers........................................    -$113,952       -3.4%     $3,393     100.0%     $3,279     100.0%      21.2%      20.5%
--------------------------------------------------------------------------------------------------------------------------------------------------------
Source: Joint Committee on Taxation.
Detail may not add to total due to rounding.
------------------------------
\1\ The proposal would provide that refundable tax credits would be provided to taxpayers who enroll in exchange plans with income between 100 percent
  and 400 percent of FPL. The proposal provides for outlays in the form of cost-sharing subsidies for out-of-pocket medical expenses for exchange
  participants between 100% and 250% of FPL. The analysis Is a stand-alone estimate of the effects of the subsidies and credits and does not include
  interaction with other parts of the broader package. The analysis is relative to present law before the enactment of PPACA.
\2\ The income concept used to place tax retums into income categories is adjusted gross income (AGI) plus: (1) tax-exempt interest, (2) employer
  contributions for health plans and life insurance, (3) employer share of FICA tax, (4) worker's compensation, (5) nontaxable Social Security benefits,
  (6) insurance value of Medicare benefits, (7) alternative minimum tax preference items, and (8) excluded income of U.S. citizens living abroad.
  Categories are measured at 2009 levels.
\3\ Federal taxes are equal to individual income tax (including the outlay portion of refundable credits), employment tax (attributed to employees), and
  excise taxes (attributed to consumers). Corporate income tax is not included due to uncertainty concerning the incidence of the tax. Individuals who
  are dependents of other taxpayers and taxpayers with negative Income are excluded from the analysis.
\4\ The average tax rate is equal to Federal taxes described in footnote 3 divided by income described in footnote 2.
\5\ Less than $500,000.
\6\ Less than 0.05%.



     Distributional Effects of a Proposal to Provide Exchange Plan Credits and Subsidies to Certain Low-Income Taxpayers as Included in H.R. 4872, the
  ``Reconciliation Act of 2010,'' as Passed by the House in Combination With H.R. 3590, the ``Patient Protection and Affordable Care Act (PPACA),'' as
                                                                Passed by the Senate \1\
                                                       (Returns in thousands; dollars in millions)
                                                                   Calendar Year 2017
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                              CHANGE IN FEDERAL TAXES \3\
                                                             -------------------------------------------------------------------------------------------
                     INCOME CATEGORY \2\                           All Returns           Single Filers           Joint Filers        Head of Household
                                                             -------------------------------------------------------------------------------------------
                                                               Returns    Dollars     Returns    Dollars     Returns    Dollars     Returns    Dollars
--------------------------------------------------------------------------------------------------------------------------------------------------------
Less than $10,000...........................................       85        -$455        72        -$343         2         -$11        11        -$101
$10,000 to $20,000..........................................      925      -$6,214       674      -$3,854        55        -$467       196      -$1,893
$20,000 to $30,000..........................................    3,001     -$20,359     1,370      -$6,424       236      -$3,332     1,396     -$10,603
$30,000 to $40,000..........................................    3,131     -$22,648     1,224      -$4,344       450      -$6,500     1,457     -$11,804
$40,000 to $50,000..........................................    1.991     -$17,380       534      -$1,998       461      -$6,397       996      -$8,985
$50,000 to $75,000..........................................    2,188     -$23,760       109        -$386     1,068     -$14,023     1,010      -$9,351
$75,000 to $100,000.........................................      638      -$6,865       \4\          -$1       555      -$6,186        83        -$678
$100,000 to $200,000........................................      133      -$1.173       \4\          -$2       130      -$1,138         3         -$33
$200,000 to $500,000........................................      \4\          \5\       \4\          \5\       \4\          \5\       \4\          \5\
$500,000 to $1,000,000......................................      \4\          \5\       \4\          \5\       \4\          \5\       \4\          \5\
$1,000,000 and over.........................................      \4\          \5\       \4\          \5\       \4\          \5\       \4\          \5\
--------------------------------------------------------------------------------------------------------------------------------------------------------
    Total, All Taxpayers....................................   12,092     -$98.853     3,983     -$17,351     2,957     -$38,054     5,152     -$43,448
--------------------------------------------------------------------------------------------------------------------------------------------------------
Source: Joint Commlltee on Taxation.
Detail may not add to total due to rounding.
------------------------------
\1\ The proposal would provide that refundable tax credits would be provided to taxpayers who enroll in exchange plans with income between 100 percent
  and 400 percent of FPL. The proposal provides for outlays in the form of cost-sharing subsidies for out-of-pocket medical expenses for exchange
  participants between 100% and 250% of FPL. The analysis is a stand-alone estimate of the effects of the subsidies and credits and does not indude
  interaction with other parts of the broader package. The analysis is relative to present law before the enactment of PPACA.
\2\ The income concept used to place tax retums into income categories is adjusted gross income (AGI) plus: (1) tax-exempt interest, (2) employer
  contributions for health plans and life insurance, (3) employer share of FICA tax, (4) worker's compensation, (5) nontaxable Social Security benefits,
  (6) insurance value of Medicare benefits, (7) alternative minimum tax preference items, and (8) excluded income of U.S. citizens living abroad.
  Categories are measured at 2009 levels.
\3\ Federal taxes are equal to individual income tax (including the outlay portion of refundable credits), employment tax (attributed to employees), and
  excise taxes (attributed to consumers). Corporate income tax is not included due to uncertainty concerning the incidence of the tax. Individuals who
  are dependents of other taxpayers and taxpayers with negative income are excluded from the analysis.
\4\ The average tax rate is equal to Federal taxes described in footnote 3 divided by income described in footnote 2.
\5\ Less than $500,000.
\6\ Less than 0.05%.



     Distributional Effects of a Proposal to Provide Exchange Plan Credits and Subsidies to Certain Low-Income Taxpayers as Included in H.R. 4872, the
  ``Reconciliation Act of 2010,'' as Passed by the House in Combination With H.R. 3590, the ``Patient Protection and Affordable Care Act (PPACA),'' as
                                                                Passed by the Senate \1\
                                                       (Returns in thousands; dollars in millions)
                                                                   Calendar Year 2019
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                             CHANGE IN FEDERAL TAXES \3\
                                                            --------------------------------------------------------------------------------------------
                    INCOME CATEGORY \2\                            All Returns           Single Filers           Joint Filers        Head of Household
                                                            --------------------------------------------------------------------------------------------
                                                              Returns     Dollars     Returns    Dollars     Returns    Dollars     Returns    Dollars
--------------------------------------------------------------------------------------------------------------------------------------------------------
Less than $10,000..........................................       96         -$575        80        -$420         2         -$13        13        -$142
$10,000 to $20,000.........................................    1,028       -$7,699       709      -$4,503        62        -$596       257      -$2,600
$20,000 to $30,000.........................................    3,163      -$23,750     1,378      -$7,065       269      -$4,210     1,516     -$12,475
$30,000 to $40,000.........................................    3,283      -$26,173     1,224      -$4,912       539      -$8,482     1,520     -$12,779
$40,000 to $50,000.........................................    2,015      -$19,981       498      -$2,087       503      -$7,661     1,014     -$10,233
$50,000 to $75,000.........................................    2,266      -$27,098       104        -$402     1,115     -$16,186     1,047     -$10,510
$75,000 to $100,000........................................      661       -$7,617         1          -$1       579      -$6,962        81        -$654
$100,000 to $200,000.......................................      112       -$1,059       \4\          -$2       111      -$1,052         1          -$5
$200,000 to $500,000.......................................      \4\           \5\       \4\          \5\       \4\          \5\       \4\          \5\
$500,000 to $1,000,000.....................................      \4\           \5\       \4\          \5\       \4\          \5\       \4\          \5\
$1,000,000 and over........................................      \4\           \5\       \4\          \5\       \4\          \5\       \4\          \5\
--------------------------------------------------------------------------------------------------------------------------------------------------------
    Total, All Taxpayers...................................   12,623     -$113,952     3,994     -$19,392     3,180     -$45,162     5,449     -$49,398
--------------------------------------------------------------------------------------------------------------------------------------------------------
Source: Joint Committee on Taxation.
Detail may not add to total due to rounding.
------------------------------
\1\ The proposal would provide that refundable tax credits would be provided to taxpayers who enroll in exchange plans with income between 100 percent
  and 400 percent of FPL. The proposal provides for outlays in the form of cost-sharing subsidies for out-of-pocket medical expenses for exchange
  participants between 100% and 250% of FPL. The analysis is a stand-alone estimate of the effects of the subsidies and credits and does not include
  interaction with other parts of the broader package. The analysis is relative to present law before the enactment of PPACA.
\2\ The income concept used to place tax returns into income categories is adjusted gross income (AGI) plus: (1) tax-exempt interest, (2) employer
  contributions for health plans and life insurance, (3) employer share of FICA tax, (4) worker's compensation, (5) nontaxable Social Security benefits,
  (6) insurance value of Medicare benefits, (7) alternative minimum tax preference items, and (8) excluded income of U.S. citizens living abroad.
  Categories are measured at 2009 levels.
\3\ Federal taxes are equal to individual income tax (including the outlay portion of refundable credits), employment tax (attributed to employees), and
  excise taxes (attributed to consumers). Corporate income tax is not included due to uncertainty concerning the incidence of the tax. Individuals who
  are dependents of other taxpayers and taxpayers with negative income are excluded from the analysis.
\4\ The average tax rate is equal to Federal taxes described in footnote 3 divided by income described in footnote 2.
\5\ Less than $500,000.
\6\ Less than 0.05%.



      Distributional Effects of a Proposal to Increase the Hospital Insurance (HI) Tax on Certain High-Income
 Individuals and Impose a Medicare Tax on Certain Unearned Income as Included in H.R. 4872, the ``Reconciliation
  Act of 2010,'' as Passed by the House in Combination With H.R. 3590, the ``Patient Protection and Affordable
                                       Care Act (PPACA),'' as Enacted \1\
                                             (Returns in thousands)
                                               Calendar Year 2015
----------------------------------------------------------------------------------------------------------------
                                                              NUMBER OF RETURNS AFFECTED
                                     ---------------------------------------------------------------------------
         INCOME CATEGORY \2\             All Returns       Single Filers       Joint Filers    Head of Household
                                     ---------------------------------------------------------------------------
                                           Returns            Returns            Returns            Returns
----------------------------------------------------------------------------------------------------------------
Less than $10,000...................               \3\                \3\                \3\                \3\
$10,000 to $20,000..................               \3\                \3\                \3\                \3\
$20,000 to $30,000..................                 1                  1                \3\                \3\
$30,000 to $40,000..................                 1                  1                \3\                \3\
$40,000 to $50,000..................               \3\                \3\                \3\                \3\
$50,000 to $75,000..................                 4                  1                  1                  1
$75,000 to $100,000.................                 4                  3                  2                \3\
$100,000 to $200,000................               250                110                124                 16
$200,000 to $500,000................             3,209                648              2,446                115
$500,000 to $1,000,000..............               825                106                695                 24
$1,000,000 and over.................               457                 61                385                 10
----------------------------------------------------------------------------------------------------------------
Total, All Taxpayers................             4,752                931              3,654                167
----------------------------------------------------------------------------------------------------------------
Source: Joint Committee on Taxation.
Detail may not add to total due to rounding.
------------------------------
\1\ The proposal would increase the HI tax by 0.9 percentage points on earnings in exess of $200,000 ($250,000
  for married taxpayers filing a joint return). Also, the proposal would impose a 3.8% tax on the investment
  income of taxpayers with AGI in excess of $200,000 ($250,000). The income thresholds are not indexed for
  inflation. The analysis is relative to present law before the enactment of PPACA.
\2\ The income concept used to place tax returns into income categories is adjusted gross income (AGI) plus: (1)
  tax-exempt interest, (2) employer contributions for health plans and life insurance, (3) employer share of
  FICA tax, (4) worker's compensation, (5) nontaxable Social Security benefits, (6) insurance value of Medicare
  benefits, (7) alternative minimum tax preference items, and (8) excluded income of U.S. citizens living
  abroad. Categories are measured at 2009 levels.
\3\ Less than 500.



      Distributional Effects of a Proposal to Increase the Hospital Insurance (HI) Tax on Certain High-Income
 Individuals and Impose a Medicare Tax on Certain Unearned Income as Included in H.R. 4872, the ``Reconciliation
  Act of 2010,'' as Passed by the House in Combination With H.R. 3590, the ``Patient Protection and Affordable
                                       Care Act (PPACA),'' as Enacted \1\
                                             (Returns in thousands)
                                               Calendar Year 2017
----------------------------------------------------------------------------------------------------------------
                                                              NUMBER OF RETURNS AFFECTED
                                     ---------------------------------------------------------------------------
         INCOME CATEGORY \1\             All Returns       Single Filers       Joint Filers    Head of Household
                                     ---------------------------------------------------------------------------
                                           Returns            Returns            Returns            Returns
----------------------------------------------------------------------------------------------------------------
Less than $10,000...................               \3\                \3\                \3\                \3\
$10,000 to $20,000..................               \3\                \3\                \3\                \3\
$20,000 to $30,000..................               \3\                \3\                \3\                \3\
$30,000 to $40,000..................                 2                  2                \3\                \3\
$40,000 to $50,000..................               \3\                \3\                \3\                \3\
$50,000 to $75,000..................                 4                  2                  1                  1
$75,000 to $100,000.................                 4                  2                  2                \3\
$100,000 to $200,000................               428                228                168                 32
$200,000 to $500,000................             3,718                681              2,914                123
$500,000 to $1,000,000..............               853                110                718                 25
$1,000,000 and over.................               476                 64                401                 11
----------------------------------------------------------------------------------------------------------------
    Total, All Taxpayers............             5,485              1,089              4,204                192
----------------------------------------------------------------------------------------------------------------
Source: Joint Committee on Taxation.
Detail may not add to total due to rounding.
------------------------------
\1\ The proposal would increase the HI tax by 0.9 percentage points on earnings in exess of $200,000 ($250,000
  for married taxpayers filing a joint return). Also, the proposal would impose a 3.8% tax on the investment
  income of taxpayers with AGI in excess of $200,000 ($250,000). The income thresholds are not indexed for
  inflation. The analysis is relative to present law before the enactment of PPACA.
\2\ The income concept used to place tax returns into income categories is adjusted gross income (AGI) plus: (1)
  tax-exempt Interest, (2) employer contributions for health plans and life insurance, (3) employer share of
  FICA tax, (4) worker's compensation, (5) nontaxable Social Security benefits, (6) insurance value of Medicare
  benefits, (7) alternative minimum tax preference items, and (8) excluded income of U.S. citizens living
  abroad. Categories are measured at 2009 levels.
\3\ Less than 500.



      Distributional Effects of a Proposal to Increase the Hospital Insurance (HI) Tax on Certain High-Income
 Individuals and Impose a Medicare Tax on Certain Unearned Income as Included in H.R. 4872, the ``Reconciliation
Act of 2010'' as Passed by the House in Combination With H.R. 3590, the ``Patient Protection and Affordable Care
                                          Act (PPACA),'' as Enacted \1\
                                             (Returns in thousands)
                                               Calendar Year 2019
----------------------------------------------------------------------------------------------------------------
                                                              NUMBER OF RETURNS AFFECTED
                                     ---------------------------------------------------------------------------
         INCOME CATEGORY \1\             All Returns       Single Filers       Joint Filers    Head of Household
                                     ---------------------------------------------------------------------------
                                           Returns            Returns            Returns            Returns
----------------------------------------------------------------------------------------------------------------
Less than $10,000...................               \3\                \3\                \3\                \3\
$10,000 to $20,000..................               \3\                \3\                \3\                \3\
$20,000 to $30,000..................               \3\                \3\                \3\                \3\
$30,000 to $40,000..................                 1                  1                \3\                \3\
$40,000 to $50,000..................                 1                  1                \3\                \3\
$50,000 to $75,000..................                 4                  2                  1                  1
$75,000 to $100,000.................                 7                  3                  5                \3\
$100,000 to $200,000................               627                355                209                 63
$200,000 to $500,000................             4,282                712              3,441                129
$500,000 to $1,000,000..............               881                114                741                 26
$1,000,000 and over.................               492                 67                413                 11
----------------------------------------------------------------------------------------------------------------
    Total, All Taxpayers............             6,295              1,254              4,810                231
----------------------------------------------------------------------------------------------------------------
Source: Joint Committee on Taxation.
Detail may not add to total due to rounding.
------------------------------
\1\ The proposal would increase the HI tax by 0.9 percentage points on earnings in exess of $200,000 ($250,000
  for married taxpayers filing a joint return). Also, the proposal would impose a 3.8% tax on the investment
  income of taxpayers with AGI in excess of $200,000 ($250,000). The income thresholds are not indexed for
  inflation. The analysis is relative to present law before the enactment of PPACA.
\2\ The income concept used to place tax returns into income categories is adjusted gross income (AGI) plus: (1)
  tax-exempt interest, (2) employer contributions for health plans and life insurance, (3) employer share of
  FICA tax, (4) worker's compensation, (5) nontaxable Social Security benefits, (6) insurance value of Medicare
  benefits, (7) alternative minimum tax preference items, and (8) excluded income of U.S. citizens living
  abroad. Categories are measured at 2009 levels.
\3\ Less than 500.



       Distributional Effects of a Proposal to Increase the AGI Floor for the Medical Expense Deduction to 10 Percent as Included in H.R. 4872, the
  ``Reconciliation Act of 2010,'' as Passed by the House in Combination With H.R. 3590, the ``Patient Protection and Affordable Care Act (PPACA),'' as
                                                                Passed by the Senate \1\
                                                                   Calendar Year 2015
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                    CHANGE IN FEDERAL     FEDERAL TAXES \3\     FEDERAL TAXES \3\   AVERAGE TAX RATE \4\
                                                                        TAXES \3\         UNDER PRESENT LAW      UNDER PROPOSAL    ---------------------
                                                                 ------------------------------------------------------------------  Present    Proposal
                       INCOME CATEGORY \2\                                                                                             Law    ----------
                                                                   Millions   Percent    Billions   Percent    Billions   Percent  -----------
                                                                                                                                     Percent    Percent
--------------------------------------------------------------------------------------------------------------------------------------------------------
Less than $10,000...............................................        $0       0.0%        $10       0.4%        $10       0.4%       7.6%       7.6%
$10,000 to $20,000..............................................       $11       0.1%        $18       0.6%        $18       0.6%       4.8%       4.8%
$20,000 to $30,000..............................................       $45       0.1%        $48       1.7%        $48       1.7%      10.3%      10.3%
$30,000 to $40,000..............................................      $105       0.1%        $81       2.9%        $82       2.9%      13.8%      13.8%
$40,000 to $50,000..............................................      $159       0.2%       $103       3.6%       $103       3.6%      14.5%      14.6%
$50,000 to $75,000..............................................      $484       0.2%       $299      10.5%       $300      10.6%      16.2%      16.2%
$75,000 to $100,000.............................................      $375       0.1%       $318      11.2%       $319      11.2%      18.1%      18.1%
$100,000 to $200,000............................................      $437       0.1%       $812      28.6%       $812      28.6%      22.5%      22.5%
$200,000 to $500,000............................................       $32        \5\       $484      17.0%       $484      17.0%      27.4%      27.4%
$500,000 to $1,000,000..........................................       $14        \5\       $186       6.6%       $186       6.6%      29.8%      29.8%
$1,000,000 and over.............................................        $4        \5\       $479      16.9%       $479      16.9%      29.8%      29.8%
--------------------------------------------------------------------------------------------------------------------------------------------------------
    Total, All Taxpayers........................................    $1,666       0.1%     $2,838     100.0%     $2,840     100.0%      21.1%      21.1%
--------------------------------------------------------------------------------------------------------------------------------------------------------
Source: Joint Committee on Taxation.
Detail may not add to total due to rounding.
------------------------------
\1\ The proposal would increase the AGI threshold for the deduction of medical expenses from 7.5% to 10%. The proposal does not apply to individuals age
  65 and older for tax years before 2017. The analysis is relative to present law before the enactment of PPACA.
\2\ The Income concept used to place tax returns into income categories is adjusted gross income (AGI) plus: (1) tax-exempt interest, (2) employer
  contributions for health plans and life insurance, (3) employer share of FICA tax, (4) worker's compensation, (5) nontaxable Social Security benefits,
  (6) insurance value of Medicare benefits, (7) alternative minimum tax preference items, and (8) excluded income of U.S. citizens living abroad.
  Categories are measured at 2009 levels.
\3\ Federal taxes are equal to individual income tax (including the outlay portion of refundable credits), employment tax (attributed to employees), and
  excise taxes (attributed to consumers). Corporate income tax is not included due to uncertainty concerning the incidence of the tax. Individuals who
  are dependents of other taxpayers and taxpayers with negative income are excluded from the analysis.
\4\ The average tax rate is equal to Federal taxes described in footnote 3 divided by income described in footnote 2.
\5\ Less than 0.05%.
\6\ Less than $500,000.



       Distributional Effects of a Proposal to Increase the AGI Floor for the Medical Expense Deduction to 10 Percent as Included in H.R. 4872, the
  ``Reconciliation Act of 2010,'' as Passed by the House in Combination With H.R. 3590, the ``Patient Protection and Affordable Care Act (PPACA),'' as
                                                                Passed by the Senate \1\
                                                                   Calendar Year 2017
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                    CHANGE IN FEDERAL     FEDERAL TAXES \3\     FEDERAL TAXES \3\   AVERAGE TAX RATE \4\
                                                                        TAXES \3\         UNDER PRESENT LAW      UNDER PROPOSAL    ---------------------
                                                                 ------------------------------------------------------------------  Present    Proposal
                       INCOME CATEGORY \2\                                                                                             Law    ----------
                                                                   Millions   Percent    Billions   Percent    Billions   Percent  -----------
                                                                                                                                     Percent    Percent
--------------------------------------------------------------------------------------------------------------------------------------------------------
Less than $10,000...............................................       \6\        \5\        $10       0.3%        $10       0.3%       7.3%       7.3%
$10,000 to $20,000..............................................       $16       0.1%        $19       0.6%        $19       0.6%       4.8%       4.8%
$20,000 to $30,000..............................................       $63       0.1%        $52       1.7%        $52       1.7%      10.4%      10.4%
$30,000 to $40,000..............................................      $146       0.2%        $88       2.8%        $88       2.8%      13.9%      13.9%
$40,000 to $50,000..............................................      $246       0.2%       $111       3.6%       $111       3.6%      14.5%      14.6%
$50,000 to $75,000..............................................      $899       0.3%       $325      10.5%       $326      10.5%      16.2%      16.2%
$75,000 to $100,000.............................................      $906       0.3%       $346      11.1%       $347      11.2%      18.0%      18.0%
$100,000 to $200,000............................................    $1,309       0.1%       $887      28.5%       $889      28.5%      22.6%      22.6%
$200,000 to $500,000............................................      $109        \5\       $535      17.2%       $535      17.2%      27.7%      27.7%
$500,000 to $1,000,000..........................................       $24        \5\       $205       6.6%       $205       6.6%      29.9%      29.9%
$1,000,000 and over.............................................       $15        \5\       $531      17.1%       $531      17.0%      29.8%      29.8%
--------------------------------------------------------------------------------------------------------------------------------------------------------
    Total, All Taxpayers........................................    $3,734       0.1%     $3,109     100.0%     $3,113     100.0%      21.2%      21.2%
--------------------------------------------------------------------------------------------------------------------------------------------------------
Source: Joint Committee on Taxation.
Detail may not add to total due to rounding.
------------------------------
\1\ The proposal would increase the AGI threshold for the deduction of medical expenses from 7.5% to 10%. The proposal does not apply to individuals age
  65 and older for tax years before 2017. The analysis is relative to present law before the enactment of PPACA.
\2\ The income concept used to place tax returns into income categories is adjusted gross income (AGI) plus: (1) tax-exempt interest, (2) employer
  contributions for health plans and life insurance, (3) employer share of FICA tax, (4) worker's compensation, (5) nontaxable Social Security benefits,
  (6) insurance value of Medicare benefits, (7) alternative minimum tax preference items, and (8) excluded income of U.S. citizens living abroad.
  Categories are measured at 2009 levels.
\3\ Federal taxes are equal to individual income tax (including the outlay portion of refundable credits), employment tax (attributed to employees), and
  excise taxes (attributed to consumers). Corporate income tax is not included due to uncertainty concerning the incidence of the tax. Individuals who
  are dependents of other taxpayers and taxpayers with negative income are excluded from the analysis.
\4\ The average tax rate is equal to Federal taxes described in footnote 3 divided by income described in footnote 2.
\5\ Less than 0.05%.
\6\ Less than $500,000.



       Distributional Effects of a Proposal to Increase the AGI Floor for the Medical Expense Deduction to 10 Percent as Included in H.R. 4872, the
  ``Reconciliation Act of 201O,'' as Passed by the House in Combination With H.R. 3590, the ``Patient Protection and Affordable Care Act (PPACA),'' as
                                                                Passed by the Senate \1\
                                                                   Calendar Year 2019
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                    CHANGE IN FEDERAL     FEDERAL TAXES \3\     FEDERAL TAXES \3\   AVERAGE TAX RATE \4\
                                                                        TAXES \3\         UNDER PRESENT LAW      UNDER PROPOSAL    ---------------------
                                                                 ------------------------------------------------------------------  Present    Proposal
                       INCOME CATEGORY \2\                                                                                             Law    ----------
                                                                   Millions   Percent    Billions   Percent    Billions   Percent  -----------
                                                                                                                                     Percent    Percent
--------------------------------------------------------------------------------------------------------------------------------------------------------
Less than $10,000...............................................        $1        \5\        $11       0.3%        $11       0.3%       7.0%       7.0%
$10,000 to $20,000..............................................       $21       0.1%        $21       0.6%        $21       0.6%       4.8%       4.8%
$20,000 to $30,000..............................................       $76       0.1%        $57       1.7%        $57       1.7%      10.4%      10.5%
$30,000 to $40,000..............................................      $174       0.2%        $95       2.8%        $95       2.8%      14.0%      14.0%
$40,000 to $50,000..............................................      $284       0.2%       $120       3.5%       $120       3.5%      14.5%      14.5%
$50,000 to $75,000..............................................    $1,005       0.3%       $352      10.4%       $353      10.4%      16.1%      16.2%
$75,000 to $100,000.............................................    $1,008       0.3%       $377      11.1%       $378      11.1%      17.9%      17.9%
$100,000 to $200,000............................................    $1,343       0.1%       $966      28.5%       $967      28.5%      22.6%      22.7%
$200,000 to $500,000............................................      $105        \5\       $589      17.3%       $589      17.3%      27.9%      27.9%
$500,000 to $1,000,000..........................................       $27        \5\       $224       6.6%       $224       6.6%      30.0%      30.0%
1,000,000 and over..............................................       $16        \5\       $583      17.2%       $583      17.1%      29.8%      29.8%
--------------------------------------------------------------------------------------------------------------------------------------------------------
    Total, All Taxpayers........................................    $4,060       0.1%     $3,393     100.0%     $3,397     100.0%      21.2%      21.2%
--------------------------------------------------------------------------------------------------------------------------------------------------------
Source: Joint Committee on Taxation.
Detail may not add to total due to rounding.
------------------------------
\1\ The proposal would increase the AGI threshold for the deduction of medical expenses from 7.5% to 10%. The proposal does not apply to individuals age
  65 and older for tax years before 2017. The analysis is relative to present law before the enactment of PPACA.
\2\ The income concept used to place tax returns into income categories is adjusted gross income (AGI) plus: (1) tax-exempt interest, (2) employer
  contributions for health plans and life insurance, (3) employer share of FICA tax, (4) worker's compensation, (5) nontaxable Social Security benefits,
  (6) insurance value of Medicare benefits, (7) alternative minimum tax preference items, and (8) excluded income of U.S. citizens living abroad.
  Categories are measured at 2009 levels.
\3\ Federal taxes are equal to individual income tax (including the outlay portion of refundable credits), employment tax (attributed to employees), and
  excise taxes (attributed to consumers). Corporate income tax is not included due to uncertainty concerning the incidence of the tax. Individuals who
  are dependents of other taxpayers and taxpayers with negative income are excluded from the analysis.
\4\ The average tax rate is equal to Federal taxes described in footnote 3 divided by income described in footnote 2.
\5\ Less than 0.05%.



       Distributional Effects of a Proposal to Increase the AGI Floor for the Medical Expense Deduction to 10 Percent as Included in H.R. 4872, the
  ``Reconciliation Act of 2010,'' as Passed by the House in Combination With H.R. 3590, the ``Patient Protection and Affordable Care Act (PPACA),'' as
                                                                Passed by the Senate \1\
                                                       (Returns in thousands; dollars in millions)
                                                                   Calendar Year 2015
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                                CHANGE IN FEDERAL TAXES \3\
                                                                 ---------------------------------------------------------------------------------------
                       INCOME CATEGORY \2\                             All Returns          Single Filers         Joint Filers        Head of Household
                                                                 ---------------------------------------------------------------------------------------
                                                                   Returns    Dollars    Returns    Dollars    Returns    Dollars    Returns    Dollars
--------------------------------------------------------------------------------------------------------------------------------------------------------
Less than $10,000...............................................         6        \5\          5        \5\          1        \5\        \4\        \5\
$10,000 to $20,000..............................................       204        $11        164         $8         24         $2         16         $1
$20,000 to $30,000..............................................       564        $45        357        $28        141        $12         66         $5
$30,000 to $40,000..............................................       953       $105        502        $54        312        $37        139        $15
$40,000 to $50,000..............................................     1,131       $159        508        $73        391        $55        232        $31
$50,000 to $75,000..............................................     2,321       $484        626       $168      1,310       $253        384        $63
$75,000 to $100,000.............................................     1,263       $375        146        $70      1,052       $285         65        $19
$100,000 to $200,000............................................       794       $437         67        $50        716       $381         11         $6
$200,000 to $500,000............................................        21        $32          3         $4         18        $25        \4\         $2
$500,000 to $1,000,000..........................................         2        $14        \4\         $1          2        $10        \4\         $3
$1,000,000 and over.............................................       \4\         $4        \4\         $1        \4\         $3        \4\        \5\
--------------------------------------------------------------------------------------------------------------------------------------------------------
    Total, All Taxpayers........................................     7,259     $1,668      2,378       $459      3,967     $1,063        913       $144
--------------------------------------------------------------------------------------------------------------------------------------------------------
Source: Joint Committee on Taxation.
Detail may not add to total due to rounding.
------------------------------
\1\ The proposal would increase the AGI threshold for the deduction of medical expenses from 7.5% to 10%. The proposal does not apply to individuals age
  65 and older for tax years before 2017. The analysis is relative to present law before the enactment of PPACA.
\2\ The income concept used to place tax returns into income categories is adjusted gross income (AGI) plus: (1) tax-exempt interest, (2) employer
  contributions for health plans and life insurance, (3) employer share of FICA tax, (4) worker's compensation, (5) nontaxable Social Security benefits,
  (6) insurance value of Medicare benefits, (7) alternative minimum tax preference items, and (8) excluded income of U.S. citizens living abroad.
  Categories are measured at 2009 levels.
\3\ Federal taxes are equal to individual income tax (including the outlay portion of refundable credits), employment tax (attributed to employees), and
  excise taxes (attributed to consumers). Corporate income tax is not included due to uncertainty concerning the incidence of the tax. Individuals who
  are dependents of other taxpayers and taxpayers with negative income are excluded from the analysis.
\4\ Less than 500.
\5\ Less than $500,000.



       Distributional Effects of a Proposal to Increase the AGI Floor for the Medical Expense Deduction to 10 Percent as Included in H.R. 4872, the
  ``Reconciliation Act of 2010,'' as Passed by the House in Combination With H.R. 3590, the ``Patient Protection and Affordable Care Act (PPACA),'' as
                                                                Passed by the Senate \1\
                                                       (Returns in thousands; dollars in millions)
                                                                   Calendar Year 2017
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                                CHANGE IN FEDERAL TAXES \3\
                                                                 ---------------------------------------------------------------------------------------
                       INCOME CATEGORY \2\                             All Returns          Single Filers         Joint Filers        Head of Household
                                                                 ---------------------------------------------------------------------------------------
                                                                   Returns    Dollars    Returns    Dollars    Returns    Dollars    Returns    Dollars
--------------------------------------------------------------------------------------------------------------------------------------------------------
Less than $10,000...............................................        10        \5\          9        \5\          2        \5\        \4\        \5\
$10,000 to $20,000..............................................       292        $16        241        $12         31         $2         20         $1
$20,000 to $30,000..............................................       759        $63        496        $40        185        $16         78         $7
$30,000 to $40,000..............................................     1,344       $146        760        $78        394        $48        190        $21
$40,000 to $50,000..............................................     1,841       $246      1,072       $134        501        $75        269        $36
$50,000 to $75,000..............................................     4,258       $899      1,812       $446      2,034       $381        413        $72
$75,000 to $100,000.............................................     3,053       $906        521       $251      2,466       $635         66        $20
$100,000 to $200,000............................................     2,225     $1,309        280       $196      1,931     $1,106         14         $7
$200,000 to $500,000............................................        81       $109         15        $29         65        $78        \4\         $2
$500,000 to $1,000,000..........................................         4        $24          1         $5          3        $16        \4\         $4
$1,000,000 and over.............................................         1        $15        \4\         $5          1        $10        \4\        \5\
--------------------------------------------------------------------------------------------------------------------------------------------------------
    Total, All Taxpayers........................................    13,869     $3,734      5,207     $1,196      7,611     $2,367      1,051       $171
--------------------------------------------------------------------------------------------------------------------------------------------------------
Source: Joint Committee on Taxation.
Detail may not add to total due to rounding.
------------------------------
\1\ The proposal would increase the AGI threshold for the deduction of medical expenses from 7.5% to 10%. The proposal does not apply to individuals age
  65 and older for tax years before 2017. The analysis is relative to present law before the enactment of PPACA.
\2\ The income concept used to place tax returns into income categories is adjusted gross income (AGI) plus: (1) tax-exempt interest, (2) employer
  contributions for health plans and life insurance, (3) employer share of FICA tax, (4) worker's compensation, (5) nontaxable Social Security benefits,
  (6) insurance value of Medicare benefits, (7) alternative minimum tax preference items, and (8) excluded income of U.S. citizens living abroad.
  Categories are measured at 2009 levels.
\3\ Federal taxes are equal to individual income tax (including the outlay portion of refundable credits), employment tax (attributed to employees), and
  excise taxes (attributed to consumers). Corporate income tax is not included due to uncertainty concerning the incidence of the tax. Individuals who
  are dependents of other taxpayers and taxpayers with negative income are excluded from the analysis.
\4\ Less than 500.
\5\ Less than $500,000.



       Distributional Effects of a Proposal to Increase the AGI Floor for the Medical Expense Deduction to 10 Percent as Included in H.R. 4872, the
  ``Reconciliation Act of 2010,'' as Passed by the House in Combination With H.R. 3590, the ``Patient Protection and Affordable Care Act (PPACA),'' as
                                                                Passed by the Senate \1\
                                                       (Returns in thousands; dollars in millions)
                                                                   Calendar Year 2019
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                                CHANGE IN FEDERAL TAXES \3\
                                                                 ---------------------------------------------------------------------------------------
                       INCOME CATEGORY \2\                             All Returns          Single Filers         Joint Filers        Head of Household
                                                                 ---------------------------------------------------------------------------------------
                                                                   Returns    Dollars    Returns    Dollars    Returns    Dollars    Returns    Dollars
--------------------------------------------------------------------------------------------------------------------------------------------------------
Less than $10,000...............................................        17         $1         16         $1          1        \5\        \4\        \5\
$10,000 to $20,000..............................................       347        $21        287        $17         36         $2         24         $2
$20,000 to $30,000..............................................       844        $76        543        $47        202        $20         99        $10
$30,000 to $40,000..............................................     1,508       $174        837        $91        419        $54        252        $29
$40,000 to $50,000..............................................     2,007       $284      1,191       $160        537        $85        279        $39
$50,000 to $75,000..............................................     4,508     $1,005      1,949       $508      2,143       $421        417        $77
$75,000 to $100,000.............................................     3,232     $1,008        546       $278      2,636       $713         50        $17
$100,000 to $200,000............................................     2,274     $1,343        285       $203      1,979     $1,136          9         $5
$200,000 to $500,000............................................        73       $105         15        $29         58        $74          1         $3
$500,000 to $1,000,000..........................................         4        $27          1         $5          3        $17          1         $4
$1,000,000 and over.............................................         1        $16        \4\         $6          1        $11        \4\        \5\
--------------------------------------------------------------------------------------------------------------------------------------------------------
    Total, All Taxpayers........................................    14,817     $4,060      5,671     $1,344      8,015     $2,532      1,131       $184
--------------------------------------------------------------------------------------------------------------------------------------------------------
Source: Joint Committee on Taxation.
Detail may not add to total due to rounding.
------------------------------
\1\ The proposal would increase the AGI threshold for the deduction of medical expenses from 7.5% to 10%. The proposal does not apply to individuals age
  65 and older for tax years before 2017. The analysis is relative to present law before the enactment of PPACA.
\2\ The income concept used to place tax returns into income categories is adjusted gross income (AGI) plus: (1) tax-exempt interest, (2) employer
  contributions for health plans and life insurance, (3) employer share of FICA tax, (4) worker's compensation, (5) nontaxable Social Security benefits,
  (6) insurance value of Medicare benefits, (7) alternative minimum tax preference items, and (8) excluded income of U.S. citizens living abroad.
  Categories are measured at 2009 levels.
\3\ Federal taxes are equal to individual income tax (including the outlay portion of refundable credits), employment tax (attributed to employees), and
  excise taxes (attributed to consumers). Corporate income tax is not included due to uncertainty concerning the incidence of the tax. Individuals who
  are dependents of other taxpayers and taxpayers with negative income are excluded from the analysis.
\4\ Less than 500.
\5\ Less than $500,000.


    Based on your review, do you agree with one Democratic member's 
assertion that there is not ``one dime'' of a tax increase on taxpayers 
with incomes under $200,000?

    Answer. I have reviewed the tables, and according to Footnote 6, 
the increase is less than 0.05%.

    Question. Based on your review, do you agree with the Joint 
Committee on Taxation that there are several tax increase proposals on 
taxpayers with incomes under $200,000 that the Joint Committee on 
Taxation said were present, but which they could not distribute?

    Answer. Yes.

    Question. Based on your review, do you agree with the Joint 
Committee on Taxation that the proposal cutting back the itemized 
deduction for catastrophic medical losses affects at least 1 million 
more taxpayers with incomes under $200,000 than the number of taxpayers 
in the same cohort who receive exchange credits and other tax 
subsidies?

    Answer. Yes.
                         corporate integration
    Question. I was pleased to hear you say in the hearing, in your 
dialogue with Senator Scott, that you see the issues of individual and 
corporate tax reform as linked. As you may know, I am very interested 
in integrating the individual income tax system and the corporate 
income tax system. Please share with me your thoughts about corporate 
integration.

    Answer. I commend your hard work in reforming the corporate tax 
system to make the U.S. more competitive. I look forward to working 
with you in these efforts.
            treasury/irs compliance with administrative law
    Question. There has been an unfortunate trend in recent decades 
suggesting that tax regulations are somehow not subject to the normal 
requirements of administrative law.

    That trend has suggested that somehow tax regulations and other 
rules promulgated by the IRS are not subject to the same notice and 
comment period as other regulations by other Federal agencies, that 
they are not subject to the same cost-benefit analysis as other Federal 
regulations, that they are not subject to the same OMB Office of 
Information and Regulatory Affairs analysis as other Federal 
regulations, and that they are not subject to the same Congressional 
Review Act requirements as other Federal agencies.

    The Supreme Court, in its 2011 Mayo decision, and the Tax Court, in 
its 2015 Altera decision, instructed the IRS that the IRS is not exempt 
from administrative law requirements. The IRS is subject to the same 
administrative law requirements as other Federal agencies.

    Can you assure me that you will make sure that IRS regulations, 
rules, and guidance comply with administrative law requirements?

    Answer. If confirmed, I will ensure that the Treasury follows the 
requirements of administrative law, where applicable.
                           efficient taxation
    Question. The United States may overly rely on the income tax. A 
fair amount of study on the topic has suggested that a tax on savings/
investment increases the cost to capital, thus, in turn decreasing 
capital formation, wage growth, and GDP growth. Would either 
consumption or land-value be a more efficient tax base as compared with 
income? Could a shift to such a tax base be done in a approximately 
distributionally neutral fashion?

    Answer. The objective of tax reform should be to collect the 
revenue the government needs to fund the proper functions of government 
and maximize growth and opportunity for all Americans. If confirmed, I 
will work with you to find the best and most efficient way to do that.
                  ec state aid rulings/investigations
    Question. I appreciated that your predecessor (if you are 
confirmed), Jack Lew, responding to bipartisan concerns, was vigilant 
in criticizing and protesting the European Commission State Rulings/
Investigations. I'm concerned that the EC State Aid Rulings/
Investigations are retroactive in effect, unfairly target U.S. 
multinational enterprises, call into question the legal stability of 
the EU, call into question the sovereignty of EU members states as to 
tax matters, and call into question the stability of the numerous tax 
treaties the United States has with various EU member states. Will you 
please assure the committee that you will continue the bipartisan 
efforts of your predecessor in this regard?

    Answer. Yes, I assure you I will continue in these efforts.
                  hidden effective tax rate increases
    Question. I have been concerned that there are numerous hidden 
effective tax rate increases throughout the Internal Revenue Code. To 
name just a few: The section 32 Earned Income Tax Credit phase-out, the 
section 24(b)(1) Child Tax Credit limitation, the section 68 Pease 
limitation on itemized deductions, and the section 151(d)(3) Personal 
Exemption Phaseout (PEP). I'm concerned about these effective tax rates 
for two different reasons: (1) they are hidden, taxpayers don't know 
about them, and thus imposing these tax rate increases is contrary to 
principles of transparent government; and (2) to the extent taxpayers 
do know about these tax-rate increases, they discourage further income 
production.

    Perhaps the reality is somewhere in between these two--most 
taxpayers don't quite understand that there are these hidden tax-rate 
increases, but they do know that somehow, despite harder work, and 
higher pre-tax pay, they find it difficult to move up the economic 
ladder. Whatever the case, what are your thoughts? Will you work with 
me to combat creation of additional hidden effective tax rate 
increases? Would you work with the committee to reduce/eliminate hidden 
effective tax rate increases?

    Answer. I look forward to working with you to give Americans a tax 
code that is fair, transparent and rewards hard work, saving, and 
investment.

    If confirmed, I will work with you to eliminate or minimize 
``hidden effective tax rates.''
                        congressional review act
    Question. Do you agree that before a Treasury rule takes effect, 
the Treasury Department, pursuant to the Congressional Review Act, must 
submit to Congress a report, which among other things must state 
whether the rule is a major or non-major rule?

    Do you agree that only the Administrator of the Office of 
Information and Regulatory Affairs of the Office of Management and 
Budget may make a finding that a rule is a major rule within the 
meaning of 5 U.S.C. section 804(2)? If yes, then does this imply that 
all Treasury rules must be reviewed by the Administrator of OIRA to 
determine whether it is major?

    Answer. I am aware that there is an agreement between Treasury and 
OMB that dates back to 1983 with regard to review of certain Treasury 
rules. If confirmed, I pledge to review that agreement in order to 
learn more about its purpose and history.

    Question. Last year the Finance Committee reported out a bi-
partisan retirement reform bill, on a 26 to 0 vote (S. 3471, 114th 
Cong.), that included reforms such as additional incentives for small 
businesses that set up retirement plans, authorization for employers to 
join so-called ``multiple employer plans'' so that they can join forces 
to share the costs of offering a plan, and a provision making it easier 
for employers to provide, and for employees to purchase, retirement 
annuities in their 401(k)-type plans.

    You may not have had a chance to focus on retirement reform 
legislative issues yet, but retirement reform has been a priority with 
the committee for quite some time and has very strong, bipartisan 
support.

    Can you assure me that the Treasury Department will work with the 
Finance Committee in the 115th Congress to enact retirement reform?

    Answer. I look forward to working with the finance committee on 
retirement reform.

                                 ______
                                 
                 Questions Submitted by Hon. Ron Wyden
                             irs resources
    Question. Mr. Mnuchin, over the years, the IRS budget has been cut. 
The IRS FY 2016 budget was $11.235 billion, including an additional 
$290 million marked specifically for customer service, combating stolen 
identity refund fraud, and cybersecurity. This budget is 7% lower than 
its high-water mark funding level in FY 2010 ($12.146 billion), or 17%, 
adjusted for inflation. The cut in resources has impacted taxpayer 
services and enforcement of the tax laws.

    Do you see this as a problem?

    Answer. If confirmed, I will review the appropriate resources for 
the IRS and see how these cuts have impacted taxpayer services and 
enforcement of the tax laws.

    Question. What are your plans for fixing this issue? You told 
Finance Committee staff that you were surprised IRS staffing had fallen 
over time. Indeed, IRS full-time equivalents have declined from 94,618 
employees in FY 2010 to 82,705 in FY 2016, a decrease of 12.6 percent. 
Do your plans possibly include hiring more IRS employees? How would IRS 
hiring be affected by President Trump's planned Federal employee hiring 
freeze?

    Answer. To the extent that additional resources are needed to 
increase revenues and improve taxpayer services, I will commit to work 
with the President to exempt the IRS from a hiring freeze.

    Question. Recent attacks on IRS's IP PIN and the IRS Get Transcript 
applications highlight the inadequacy of IRS systems and electronic 
authentication procedures. Are you concerned about IRS's antiquated 
systems and technology? What about their cybersecurity? Would you give 
IRS additional resources to address these chronic issues?

    Answer. Based upon the information I have seen, I am concerned 
about the IRS's technology and cybersecurity resources. I would work 
with the IRS commissioner to ensure that we have the necessary 
resources.

    Question. It's also no secret that you need more resources to stay 
ahead of the crooks, starting with having the right cybersecurity and 
IT experts. Many of those experts were hired using ``Streamlined 
Critical Pay'' authority. The ability to fill the Chief Technology 
Officer position using this authority already expired in June of last 
year and the remaining positions are scheduled to expire during the 
course of 2017. IRS will face mounting IT and cybersecurity threats if 
Congress fails to renew streamlined critical pay authority for the 
agency. Is this an authority you will push for as Treasury Secretary?

    By way of background, in 1998, Congress gave the IRS streamlined 
critical pay authority, which allowed the Secretary of Treasury to 
appoint individuals to critical positions within the IRS. The initial 
authority expired in 2008, but Congress extended it to September 30, 
2013, but not thereafter. Over the period, the IRS has created 168 
positions using this authority. The largest number of these positions 
has been in IT (a total of 93). The purpose of the streamlined critical 
pay authority was to give the IRS the ability to attract and hire 
expertise that wasn't available within the agency. Streamlined critical 
pay authority allows higher compensation than the typical GS schedule. 
In addition, the time to process the candidate is shorter--4 to 6 weeks 
rather than 3 to 4 months. Currently, the IRS has 13 streamlined 
critical pay positions. The IRS's Chief Technology Officer position, 
however, expired in June of last year, and the remaining positions 
expire in 2017.

    Answer. This issue is of tremendous importance, and I propose to 
address it very seriously. You rightly note that human resources are a 
critical part of achieving ambitious goals within a complex IT 
environment. If confirmed I will work to address these issues.
                               tax reform
    Question. Mr. Mnuchin, when it comes to tax reform, it is easy to 
propose lowering rates and broadening the base. But it clearly matters 
how one broadens the base. There are provisions in the tax code that 
have broad bipartisan support, and if repealed, could damage our 
economy, get rid of jobs, and harm communities in Oregon and across the 
country. For example, the low-income housing tax credit has financed 
nearly 3 million affordable homes for low-income working families since 
its creation in the last comprehensive tax reform, and sustains nearly 
100,000 jobs annually. Are you committed to ensuring that the low-
income housing tax credit program is maintained as a part of tax 
reform?

    Answer. President Trump's objective is to pass tax reform that 
grows the economy and benefits all Americans. If confirmed, I look 
forward to working with Congress on a review of the housing tax credit 
programs.

    Question. The President's tax reform plan would cut the business 
tax rate to 15 percent for both corporations and pass-throughs--such as 
partnerships, sole proprietors, and S corporations. But then the reform 
proposal states that the distribution from ``large'' pass-throughs 
would be treated as dividends and taxed again.

    Are you saying that large pass-through businesses would be treated 
as corporations--taxed once at the entity level and then again at the 
owner level? If not, can you please clarify what you mean when you say 
that ``large partnerships will be taxed''? How would you define 
``large''? Would you provide any exceptions such as for Master Limited 
Partnerships (MLPs) or Real Estate Investment Trusts (REITs)?

    Answer. The President has previously stated his support for tax 
reform that benefits all Americans. If confirmed, I look forward to 
work with you to ensure that no individual or business organization is 
unfairly treated in comparison to others.

    Question. Here's a scenario for you to consider. A salaried 
employee rather than taking her income as wages instead sets up a sole 
proprietorship that provides labor services to the company. That 
employee of the company now pays a 15-percent tax rate instead of 
paying a 33-percent tax rate. That's an advantage for the taxpayer. How 
would the President's tax plan prevent gaming like this?

    Answer. If confirmed, I will work with Congress to ensure that we 
prevent people from ``gaming'' the system.

    Question. During the confirmation hearing before the Finance 
Committee, when questioned by the ranking member about how ACA repeal 
would take premium tax credits away from the middle class to fund 
payroll and investment tax cuts for the wealthy, you said that we had 
to look at tax reform as a whole. But according to an analysis by the 
Tax Policy Center (TPC), the Trump tax reform plan by itself would also 
raise taxes on middle-class families with children, in large part 
because it would repeal the personal exemption for children and force 
single parents with children to file as singles and so forfeit the more 
generous standard deduction they currently receive. Please note that 
the Trump proposal does this while also delivering massive tax cuts to 
the highest-income taxpayers and businesses. TPC's analysis also notes 
that the President's proposed child care deduction and tax credit fails 
to compensate families for these other lost tax benefits.

    Mr. Mnuchin, does the President intend to raise taxes on middle-
income families on net?

    Answer. President Trump made it clear throughout the campaign that 
his commitment was to tax relief for the middle class. If confirmed, I 
will work with President Trump and Congress to ensure that middle-class 
families are not further burdened by higher taxes.

    Question. You keep saying that a middle-class tax cut is the 
centerpiece of your tax reform agenda--what middle-class taxes do you 
actually intend to cut?

    Answer. President Trump has outlined a bold tax reform agenda that 
will include relief for the middle class. If confirmed, I will work 
with the President to implement these reforms for the American middle 
class.

    Question. Will these middle-class tax cuts make up for the premium 
tax credits that will be lost to ACA repeal?

    Answer. If confirmed, I will work with the Secretary of Health and 
Human Services to determine the economic impact of any changes to ACA.

    Question. During the campaign, the President often expressed his 
intention to bring jobs and investment back to low income, high 
unemployment rural communities, and urban areas. Over the last 15 
years, the New Markets Tax Credit has demonstrated that it is an 
important tool for revitalization. As the administration assembles its 
tax reform package, I hope you will take a serious look at making the 
New Markets Tax Credit permanent.

    Since the credit was launched in 2001, $38 billion in direct New 
Markets Tax Credit investments were made in businesses and these New 
Markets Tax Credit investments leveraged over $75 billion in total 
capital investment to businesses and revitalization projects in 
communities with high rates of poverty and unemployment.

    This financing has resulted in the creation of 750,000 jobs and the 
financing of commercial and industrial facilities, day care and health-
care centers, mixed use facilities, and small business loans, all of 
which improve local economies and the quality of life in distressed 
neighborhoods.

    In Oregon, $843 million in New Markets Tax Credit capital has 
leveraged a total of $1.73 billion in financing for a range of projects 
and created nearly 15,000 construction jobs and more than 16,000 
permanent jobs.

    For example, Chaucer Foods created about 73 new jobs in Forest 
Grove, OR with the opening of a new freeze-dried food processing 
facility.

    NMTC financing helped Advantage Dental, one of Oregon's largest 
dental health care providers for low-income persons within the State 
serving over 200,000 patients, finance 7 additional dental clinics 
providing dental services to the uninsured and low income individuals.

    In Ontario, OR, $4 million New Markets Tax Credit allocation 
facilitated the purchase and necessary improvements of a factory for 
Fry Foods, Inc., bringing needed jobs to the area.

    And in Dillard, OR, the NMTC helped Roseburg Forest Products, a 
manufacturer of wood products, obtain working capital for capital 
improvements needed to remain competitive and retain critical 
manufacturing jobs. The influx of working capital allowed RFP to 
install new equipment and expand its facilities so that RFP can 
capitalize on the timber industry's recovery and retain 971 jobs.

    The New Markets Tax Credit has bipartisan support, and has been 
very successful in leveraging private sector capital for investment on 
some of the poorest urban and rural areas of the America. It will be a 
valuable tool in your efforts to bring jobs back to communities left 
behind by the economic recovery. Do I have your commitment that you 
will work with me to make permanent this important program?

    Answer. I share your commitment to bring back jobs to these 
communities that have been so gravely affected by economic conditions 
for which they had no part in creating. If confirmed, I will work with 
you to make sure that the poorest and rural areas of America are no 
longer left behind.
                              debt ceiling
    Question. The current debt limit suspension is set to expire March 
17th. The responsible course for the new Congress would be to raise the 
debt limit without drama or brinksmanship. Unfortunately, if recent 
history is any indication, we may once again hear calls to block 
raising the debt limit. With extraordinary measures, the Treasury 
Secretary can lengthen this time to possibly summer, if necessary.

    What are your plans for dealing with the debt ceiling?

    Answer. As I have stated, and as has been the position of prior 
Secretaries of the Treasury, honoring the full faith and credit of our 
outstanding debt is a critical commitment.

    If confirmed, I look forward to working with President Trump and 
Congress before the mid-March deadline.

    Question. Do you support using extraordinary measures, if 
necessary, while the White House and Congress pursue negotiations to 
raise the debt limit?

    Answer. I do support using whatever powers are within the Treasury 
to honor our commitments.

    Question. Would you be willing to work with the bipartisan group in 
Congress and the financial institutions that have supported the 
collection of meaningful beneficial ownership information by 
authorities at the time of incorporation?

    Answer. If confirmed, I will work with your office to understand 
this issue.
                           mnuchin foundation
    Question. Do you maintain this foundation maintained with your 
father and your former wife?

    Answer. Yes.

    Question. Based on publicly available filings, it appears that 
despite making more than $1.5 million in 2003, your foundation failed 
to distribute the required 5 percent to charities. Could you explain 
why you chose to not give those funds to charity as required by law?

    Answer. The Foundation did not earn more than $1.5 million in 2003, 
nor did its fair market value increase by that figure. A comparison of 
the originally filed 2002 return and the amended 2003 return actually 
shows a decrease in fair market value of approximately $150,000. In 
addition, the Foundation had realized income in 2003 of $37,775.

    A foundation is required to distribute 5% of the average fair 
market value of a given fiscal year by the close of the next fiscal 
year. Therefore, the distribution requirement related to 2003 needed to 
be made by the close of the 2004 fiscal year. In 2004, the Foundation 
was required to distribute $259,917 related to fiscal year 2003; 
however, it only distributed $221,034. The short-fall of $38,883 was an 
oversight by the Trustees and was not done intentionally. Please note 
that in the approximately 19 years that the foundation has been in 
existence this was the only year the Foundation failed to meet that 
requirement.

    Question. By failing to make the required minimum distribution from 
your foundation, you would have been required to pay an excise tax 
penalty. Later in 2003 it appears your foundation filed an amended tax 
return that revalued one of your investments in the ESL Limited hedge 
fund, the effect of which was to reduce the amount subject to the 
excise tax penalty by more than $40,000. This revaluation appears 
potentially inconsistent with your accounting in other years' filings. 
Could you please explain this discrepancy?

    Answer. The originally filed return in 2003 used an incorrect fair 
market value for ESL Limited. When the error was discovered, the return 
was amended.
                            house blueprint
    Question. The House Blueprint resembles a 20% subtraction method 
VAT. A 20% subtraction method VAT is equivalent to a 25% credit invoice 
method VAT, the type used in Europe. Wouldn't that mean that the U.S. 
would go from having the highest corporate income tax rate in the world 
to the second highest VAT rate on consumers in the world (without 
taking into account sales and use taxes at the State and local level)? 
Do you think that would be wise?

    Answer. If confirmed, I am committed to working with Congress on a 
tax reform proposal that increases the competitive position of our 
Nation by encouraging growth in investment, and simplification for 
personal taxes.

    Question. Some proponents of the House Blueprint argue that the 
U.S. dollar will immediately strengthen to offset the impact of border 
adjustments. Even if true (which many experts doubt), are there 
downsides that should be considered? For example, if the U.S. dollar 
suddenly appreciates 25%, doesn't that mean that there is a sudden 
wealth transfer away from U.S. persons with foreign assets (denominated 
in dollars) to foreign persons with U.S. assets (denominated in foreign 
currencies)? Won't this harm U.S. multinationals with large foreign 
subsidiaries, other U.S. investors with significant foreign holdings, 
and debtors with dollar-denominated debt? Aren't the Chinese likely to 
be the largest beneficiaries of this wealth shift since they hold large 
amounts of U.S. debt and assets?

    Answer. If confirmed, I am committed to working with Congress to 
craft the best possible tax reform plan to serve all Americans.

    Question. Also, won't inflation in the value of the dollar 
discourage foreign direct investment, by making purchases of U.S. 
assets relatively more expensive for foreign buyers?

    Answer. If confirmed, I am committed to working with Congress to 
craft the best possible tax reform plan to serve all Americans.

    Question. Some economists have argued that there will be no impact 
on trade of the border tax adjustments in the House Blueprint because 
exchange rate changes will neutralize their effect. Several of the 
money center banks that are close to foreign currency markets have 
raised doubts that these economic assumptions are true in the real 
world. For example, Morgan Stanley said that a 25% increase in the 
dollar ``would be extreme to say the least'' and is not very likely to 
happen. They said, ``we are skeptical of a full offset, particularly on 
a short time horizon, as it usually takes a long time for exchange 
rates to fully react to changes in trade flows.'' Do you share their 
concerns that exchange rate adjustments may not fully offset the trade 
effect of the border tax adjustments?

    Answer. If confirmed, I am committed to working with Congress to 
craft the best possible tax reform plan to serve all Americans.

    Question. For background, there are several reasons exist why 
exchange rate adjustments may not resolve these trade barrier concerns. 
First, it is unclear whether these adjustments would be instantaneous. 
It may take time for exchange rates to adjust to changes in trade 
flows. Second, a number of cases exist where foreign currencies or 
prices of commodities are pegged to the dollar and thus may not be 
flexible, in the short or long term, for exchange rate adjustment. 
Third, assuming exchange rates adjust to offset the effects of border 
adjustments across the economy as a whole these changes would be 
general in nature and would not account for differences between 
industry sectors or business circumstances. A sector that was impacted 
more heavily than the economy could remain disadvantaged. Fourth, it is 
important to note that, in the House Blueprint, the border tax 
adjustment for imports is not equivalent to the adjustment for exports. 
This disparate treatment could affect the exchange rate adjustment that 
theoretically should occur with full border tax adjustments. Finally, 
other factors affect exchange rates that could have countervailing 
effects. These include, interest rates, levels of inflation, growth in 
public debt, economic capacity, and political and economic stability.

    Under the Blueprint, no tax would be imposed on exports. 
Consequently, we would be ceding the right to tax foreign income from 
value-creating activities in the United States. Because we have 
relinquished our right to tax such income, would other countries react 
to this change by adopting similar tax systems or otherwise increasing 
taxes on U.S. companies with respect to such income? Wouldn't you 
expect foreign countries to ``make up the difference'' by taxing U.S. 
multinationals overseas income as was done in the EU state aid cases?

    Answer. If confirmed, I am committed to working with Congress to 
craft the best possible tax reform plan to serve all Americans.

    Question. Many trade law experts believe that the border adjustable 
tax embodied in the House Blueprint is not WTO compliant. Are you 
concerned that it would be challenged by our trading partners and 
subject U.S. companies to potential retaliation of a magnitude we 
haven't seen before?

    Answer. I agree with the President that we have to take an America 
First approach to everything we do. This is another issue that will 
need to be evaluated fully before proceeding.

    Question. The General Agreement on Tariffs and Trade (GATT) imposes 
several limitations on the ability to provide border adjustments to a 
tax. First, as indicated in the ``Illustrative List of Export 
Subsidies,'' relief of any ``direct'' tax (under a border adjustment) 
will constitute a prohibited export subsidy. For this purpose, a direct 
tax is a tax imposed on all forms of income, wealth, and ownership of 
property. Second, while relief of an indirect tax through a border 
adjustment generally would be allowed, the amount of the rebate cannot 
exceed the amount of tax levied on the same good or service when sold 
for domestic consumption. Finally, the border adjustment applicable to 
imports is subject to ``national treatment'' requirements, generally 
requiring that imported and domestically produced goods and services be 
treated equally once the foreign goods have entered the market. Are you 
concerned that the business cash flow tax under the House Blueprint 
would be subject to challenge at the WTO (1) as a direct tax, (2) 
because the deduction for wages could cause the resulting rebate to 
exceed taxes paid on the exported goods, and (3) that national 
treatment requirements will be violated because a deduction would be 
allowed for wages for work performed in the United States but not with 
respect to imported goods?

    Answer. If confirmed, I am committed to working with Congress to 
craft the best possible tax reform plan to serve all Americans.

    Question. As proposed, the import border tax adjustment proposed in 
the House Blueprint would be difficult to enforce against foreign 
sellers who sell directly to U.S. consumers (similar to States' 
difficulties in collecting sales and use taxes on sales made by out-of-
state sellers to in-state consumers)? Is it possible to close this 
loophole effectively? Wouldn't any enforcement mechanism require us to 
abrogate all of our tax treaties?

    Answer. If confirmed, I am committed to working with Congress to 
craft the best possible tax reform plan to serve all Americans.

    Question. I'm concerned, as the Joint Tax Committee staff has 
previously stated, that if we replace our current income tax with a 
consumption-type tax like the House Blueprint, our current tax treaty 
system may not ``be still applicable or desirable.'' Among the issues 
that would potentially need to be rethought under existing treaties 
are: (1) would the permanent establishment rules need to be changed or 
scrapped in a shift to a destination-based system; (2) whether foreign 
countries will refuse to give credit for U.S. taxes because the system 
is no longer an income tax; and (3) will reduced withholding rates 
continue to be respected? Until these and other similar issues are 
resolved under each existing treaty, won't taxpayers face considerable 
uncertainty?

    Answer. If confirmed, I am committed to working with Congress to 
craft the best possible tax reform plan to serve all Americans.
                           retirement savings
    Question. Today the United States is in the midst of a retirement 
savings crisis. In 2013, the National Institute on Retirement Security 
estimated that the retirement savings deficit is between $6.8 and $14.0 
trillion. Furthermore, the Employee Benefit Research Institute reports 
that in 2016, 26 percent of all workers surveyed had less than $1,000 
in retirement savings and 68 percent of workers with household income 
less than $35,000 a year had less than $1,000 in retirement savings. 
What would you do as Treasury Secretary to address our country's 
retirement savings crisis?

    Answer. Senator, you rightfully raise a concern about underfunded 
retirement savings of many Americans. If confirmed, I look forward to 
exploring this issue further with you.

    Question. Last September I released a discussion draft titled the 
Retirement Improvements and Savings Enhancements (RISE) Act of 2015. 
This bill would among other things encourage retirement savings. For 
example, the bill would allow employers to make matching contributions 
to their 401(k) retirement plans on behalf of their employees who made 
student loan payments but were unable to afford to also contribute to 
their 401(k) plans. It is difficult for many Americans, especially 
younger workers, to save for retirement while also paying off their 
student loans. However, those employees miss out on essentially ``free 
money'' by not taking advantage of employer matching contributions to 
401(k) plans.

    Do I have your commitment that you will work with me to enact this 
important provision and help young people save for retirement?

    Answer. If confirmed, I look forward to working with you on 
solutions to encourage retirement savings.

    Question. A recent Wall Street Journal article reported that ``the 
largest generation in U.S. history has to start pulling its retirement 
money this year.'' This is because of the required minimum distribution 
(RMD) rules that generally require participants to begin taking 
distributions from their retirement plan at age 70\1/2\. The policy 
behind this rule is to ensure that individuals spend their retirement 
savings during their lifetime and not use their retirement plans for 
estate planning purposes to transfer wealth to beneficiaries. However, 
the age 70\1/2\ was first applied in the retirement plan context in the 
early 1960s and has never been adjusted to take into account increases 
in life expectancy. To address this issue, the RISE Act would increase 
the RMD age from 70\1/2\ to 71 in 2018. The age would be increased 
further to 72 in 2023, 73 in 2028 and, thereafter, would be adjusted in 
a manner proportional to increases in life expectancy. Do I have your 
commitment that you will work with me on this issue?

    Answer. If confirmed, I look forward to working with you on 
solutions to encourage retirement savings.

    Question. I'd like to get your views on the so-called ``mega-
IRAs.'' As of 2011, 2,000 to 5,000 taxpayers had aggregated IRA 
balances over $5 million, which also include Roth IRAs. The estimated 
fair market value of their Roth IRAs totaled $8-$13 billion as of 2011. 
There are even press reports of executives in the high tech industry 
with Roth IRAs with balances $30 million to more than $90 million. Yet 
contrast that with the account balances of most Americans. In 2013, the 
median IRA account balance was $25,438.

    I just don't think that's fair. Do you? My bill, the RISE Act, 
includes some 
common-sense reforms to address the mega-IRA issue. For example, the 
bill would prohibit further contributions to a Roth IRA if the total 
value of an individual's Roth IRA exceeds the greater of (i) $5 million 
or (ii) the balance as of December 31, 2016. Do I have your commitment 
to work with me to create more fairness in our retirement system and 
address the mega-IRA issue?

    Answer. Senator, I understand your concern. I look forward to the 
opportunity of further exploring this issue with you.

    Question. One area where I see a lot of unfairness in our tax 
system is executive compensation. According to the Economic Policy 
Institute, top CEOs were paid 276 times more than the typical worker in 
2015. Do you think that's fair? In many ways, the tax code encourages 
employers to pay their employees large sums of money on a tax-preferred 
basis. Do you agree? Do you commit to working with me to shut down 
executive compensation loopholes?

    Answer. I am committed to work with Congress to ensure that the tax 
code is fair. I believe these issues need to be addressed in the 
context of broad tax reform. As to the issue of what executives are 
paid, I believe this is for shareholders to determine. I don't think it 
is the proper role of the Federal Government to prescribe limitations.

    Question. There are more than a thousand multiemployer pension 
plans around the country, and millions of Americans rely on them for 
economic security in retirement. But many of those pension plans are in 
dire financial straits. With the livelihoods of so many Americans on 
the line, it's vital that Democrats and Republicans come together to 
find solutions to this crisis. Do I have your commitment that you will 
work with me to address the multiemployer pension crisis?

    Answer. If confirmed, you have my commitment to work with you to 
find solutions to the multiemployer pension crisis.

    Question. Since 2006, an enhanced income tax deduction has allowed 
family farmers, ranchers, and forest landowners to get an important tax 
benefit for donating a conservation easement on their land. This 
temporary provision was made permanent by the PATH Act on December 18, 
2015.

    This enhanced tax incentive boasts a long history of bipartisan 
congressional and administration support. It is clear that policy 
makers value the conservation of land protection by private landowners 
through the charitable contribution of conservation easements. 
Unfortunately, the availability of significant tax benefits can also 
attract those who would abuse the provision.

    Recently, the Treasury Department and IRS have become aware of 
certain syndicated conservation easement transactions that purport to 
give so-called ``investors'' the opportunity to obtain charitable 
contribution deductions in amounts that significantly exceed the amount 
invested.

    On December 23, 2016, Notice 2017-10 was issued alerting taxpayers 
and their representatives that certain, very specific syndicated 
conservation easement transactions are tax avoidance transactions 
requiring those who participate in such transactions to make a 
disclosure to the IRS. Congress provided these reporting tools to the 
IRS to help identify and deal with abusive transactions, such as those 
covered in the notice.

    Members of Congress and the land trust community support this 
effort by Treasury and the IRS to protect the integrity of this 
important conservation program. Will you commit to work with this 
committee to protect the integrity of the conservation easement 
program? Will you keep this committee informed about these abuses and 
whether additional enforcement tools are needed to curb these abuses?

    Answer. If confirmed, I commit that I will work with the committee 
to protect the integrity of the conservation easement program and will 
keep the committee informed about potential abuses and enforcement 
tools that are needed.
                              tobacco tax
    Question. In 2009, Congress raised tobacco taxes to help fund the 
State Children's Health Insurance Program. The taxes on cigarettes and 
roll-your-own tobacco were raised to the equivalent of $10.07 per 
carton. At the same time, the tax on pipe tobacco was raised only 
marginally--to $1.15 per carton equivalent.

    In July 2014, this committee held a hearing on ``Tobacco: Taxes 
Owed, Avoided, and Evaded.'' At that hearing, we received testimony 
that the Federal Treasury had, to that date, lost over $2 billion due 
to tax evasion by certain tobacco companies who responded to the 2009 
tax increase by selling roll-your-own tobacco in bags mislabeled as 
(and thus taxed as) ``pipe'' tobacco.

    According to GAO, sales of pipe tobacco rose over 740% following 
the tax increase while sales of roll-your-own fell by more than 80%. 
Clearly the number of pipe tobacco smokers in our country did not 
increase more than 7-fold during that same period.

    In 2010, the Alcohol and Tobacco Tax and Trade Bureau issued an 
Advanced Notice of Proposed Rulemaking to stem this abuse. It extended 
the comment period in 2011. Now, running on 6 years later, TTB has yet 
to issue the Proposed Rule, despite the fact the Administrator of TTB 
testified at our July 2014 hearing, that ``[w]e are going to air a 
rulemaking in January [2015].'' Will you assure this committee that the 
Proposed Rule will be finally issued expeditiously if you are 
confirmed?

    Answer. If confirmed, I will work with the committee on the 
proposed rule.
                              mnuchin rule
    Question. Every time an American earns even $1, a Medicare tax is 
taken out to fund the program. However, in 2015, congressional 
Republicans--as part of their reconciliation bill--decided that the 
wealthy should see that tax cut. That means multimillionaires who still 
earn a paycheck--you may know a few--will get a tax cut, while 
teachers, nurses, police officers, firefighters, and other middle-
income workers will continue to pay full freight. Do you support that 
policy?

    That doesn't seem to square with your comments about ``no absolute 
tax cut'' for the rich. To be clear, this tax cut for the wealthy 
shortens the life of the Medicare program by 3 years. Am I 
understanding you correctly that you support a tax cut for the wealthy 
at the expense of the Medicare program?

    Would you advise President Trump to veto any legislation that 
reduces revenue going into the Medicare Trust Fund in order to maintain 
the solvency of the Medicare program?

    Answer. The President is committed to protecting the integrity of 
Medicare. He also is committed to addressing the negative economic 
effects of many of the provisions, including tax provisions, enacted as 
part of the Affordable Care Act. If confirmed, I will work with 
Congress to ensure that we meet these objectives.

    Question. To move forward on tax reform, Congress needs to be 
streamlining rules to stop the wealthy and well-connected from gaming 
the system while making sure working Americans get a fair shake. On 
that basis, please answer the following questions.

    You have said that the President's tax reform proposal will not 
include an absolute tax cut for the wealthy. Is this correct?

    Will the President's tax proposals keep the tax system at least as 
progressive as it is currently?

    If it's done right, tax reform can put more money back into the 
pockets of hardworking Americans, so that they can meet their bottom 
line. How will you cut taxes for working families without adding to 
America's debt?

    You have said that you want to lower marginal tax rates. You have 
also said that you are considering capping or repealing most itemized 
deductions. Is this correct?

    This will result in a net tax cut for the highest-income taxpayers. 
Someone making $10 million a year has maxed out most of their tax 
deductions, but they will benefit tremendously from the marginal rate 
cut. Doesn't this seem to go against your pledge that there will be no 
tax cut for high-income earners?

    Answer. As I noted earlier, the President supports tax reform that 
will grow the economy and put more money in the pockets of hardworking 
Americans. If confirmed, I will work with Congress to maintain an 
appropriate level of progressivity in the tax code.
                        president's tax returns
    Question. President Trump has said many times that his tax returns 
are under audit. The President has also said he will not divest himself 
of his investments and the businesses he owns, but rather transfer 
control to his family. As the President's campaign Finance chairman who 
became the Treasury Secretary nominee, how can the American people 
ensure that the audit of the President's tax returns and his business 
dealings will be free of political interference?

    Answer. If confirmed, I am committed to uphold the laws of the 
United States and to defend the Constitution. That pledge will extend 
to all the duties I would undertake including maintaining the 
relationship of the Treasury and the IRS.

    Question. Senator Wyden introduced legislation earlier this month 
that would require all sitting Presidents to release their most recent 
3 years of tax returns to the Office of Government Ethics. If the bill 
becomes law and you are confirmed, will you make Mr. Trump's tax 
returns public despite the continued objections from your future boss?

    Answer. If confirmed, I am committed to uphold the laws of the 
United States.
                           tax reform process
    Question. Mr. Mnuchin, the House is already drafting the Republican 
tax reform proposal, which includes some brand new ideas such as their 
border adjustability tax. There are legitimate concerns this new tax 
may rest solely on the shoulders of consumers. Regardless, the House 
plans to rush this new tax through under special procedural 
protections, allowing them to do so in a partisan way and with very 
limited debate. Do you think President Trump's voters deserve to have a 
proper vetting and regular order process before any new tax goes into 
place on the things they buy?

    Answer. If confirmed, I am committed to working with Congress to 
craft the best possible tax reform plan to serve all Americans.
                            u.s. territories
    Question. There have been press articles regarding the activities 
of ``Best Sunshine'' corporation in the Commonwealth of the Northern 
Mariana Islands. Would you please review these articles and let me know 
what action, if any, should be taken by the Treasury Department and 
other Departments?

    Answer. If confirmed, I will ensure that the Department reviews 
this information and gets back to you.
    currency, the u.s. dollar, and sanctions toward russia and cuba
    Question. Mr. Mnuchin, if confirmed, it will be up to you to 
administer the Nation's laws that relate to combating currency 
manipulation. It will also be your job to represent the United States 
at the IMF, the OECD, the G7 and the G20. The Nation will rely on you 
to use these fora to work with other countries to ensure that global 
currencies are valued by the markets, not distorted by government 
intervention.

    The President, before and after the campaign, has promised that he 
is going to instruct you to label China a currency manipulator. This 
committee has put into law several important pieces of legislation to 
defend American jobs by combatting currency manipulation. While we all 
agree that China has in the past manipulated its currency--and may well 
do so in the future--China appears to have stopped intervening to 
devalue its currency in recent years and may even be taking steps to 
prevent depreciation.

    Do you disagree with that assessment?

    Answer. If confirmed, I intend to review the issue of Chinese 
currency manipulation.

    Question. It is possible that the incoming President could issue an 
Executive Order instructing you to name China a currency manipulator 
even though China doesn't meet the statutory criteria as a manipulator. 
It seems to me that taking this action would undermine your credibility 
and the credibility of the United States when we seek to take on 
currency manipulation in the future. Are you advising the President to 
avoid taking actions that undermine the credibility of the United 
States?

    Answer. Currency manipulation is a serious infraction of free trade 
principles and needs to be effectively addressed. As Treasury 
Secretary, I will ensure that we defend American jobs by combating 
currency devaluation utilizing the reporting and monitoring functions 
of the Treasury and legislative processes established by Congress.

    Question. The President in recent days described the dollar as 
being too strong, and there were also reports that a senior advisor to 
the Trump administration expressed concern at Davos about the strength 
of the dollar. Shortly after those remarks were reported, the value of 
the dollar declined. As Treasury Secretary, will you use public 
statements as a tool to influence the value of the dollar?

    Answer. As Treasury Secretary, I will maintain the position that 
long-term, a strong and dependable dollar is in the best interests of 
the United States, while recognizing that at times over the long-term, 
that may not be the case.

    Question. Mr. Mnuchin, the outgoing administration put in place 
economic and trade sanctions to respond to Russia's actions to 
undermine the security and territorial integrity of Ukraine. These 
sanctions include cutting off U.S. trade with the Crimea region of 
Ukraine after Russia's annexation.

    Do you agree with me that the United States must hold Russia 
accountable for such actions, and if confirmed, would you support 
continuing these sanctions as a counter to Russian aggression?

    Answer. I agree that the United States must hold Russia accountable 
for its actions, and if confirmed I will continue to support and 
enforce the existing sanctions against Russia to the fullest extent. 
The President has indicated he would consider sanctions relief in 
return for other commitments from Russia.

    Question. Mr. Mnuchin, the outgoing administration has taken a 
number of steps to ease the decades-long trade and economic sanctions 
imposed on Cuba. Those sanctions have had no positive results for the 
goals of the United States, and I strongly support the Obama 
administration's recognition that it is time for a new strategy--
engagement--to make Cuba a more free and open society. In addition, 
there is real economic opportunity for U.S. producers in Cuba. A study 
by the International Trade Commission released last year points to 
particular opportunities for American agriculture, including dairy and 
wheat from the Pacific Northwest, and for goods manufactured in 
America, like construction machinery and building materials.

    Given the lack of progress under the old strategy, and the 
substantial opportunities for U.S. producers, do you support past and 
future easing of the sanctions?

    Answer. If confirmed as Secretary, I will implement and enforce 
Cuba sanctions pursuant to their statutory construct.
             financial crimes enforcement network (fincen)
    Question. According to news reports, U.S. law enforcement and 
intelligence agencies, including the Treasury Department's Financial 
Crimes Unit, are conducting an investigation into possible links 
between Russian officials and at least 3 associates of President Trump. 
If confirmed as the Treasury Secretary, how will you ensure that the 
Treasury Department Financial Crimes Unit's investigation will be free 
of political interference by the President or others in his 
administration? What measure will you put in place to ensure that the 
financial crimes unit fully assists the FBI's investigation, 
notwithstanding any potential ties to the President?

    Answer. It is critical that all law enforcement investigations 
proceed without political interference from either the Executive or 
Legislative branches of the government. If confirmed, I will direct the 
leadership at FinCEN to continue assisting with every law enforcement 
investigation that it is supporting. I will not attempt to influence, 
direct, or prevent any outcome to a law enforcement investigation other 
than what the facts and evidence support. And I would direct my staff 
to do the same.
                            false claims act
    Question. You have been on the board of Kmart and Sears, 
respectively, since 2003. During that time, there have been four False 
Claims Act complaints filed against these companies contending that 
Kmart pharmacies defrauded Federal health-care programs, including 
Medicaid and Medicare. Three of these complaints have been settled. The 
complaints in these three cases alleged that Kmart offered improper 
incentives to beneficiaries to fill their prescriptions at Kmart. The 
complaint in the fourth case alleges that Kmart overcharged Federal 
health programs for drugs purchased by beneficiaries through its 
pharmacies. All four complaints allege that the Kmart pharmacy policies 
in question were approved at the corporate level. What was your role, 
as a board member, in reviewing and approving Kmart pharmacy policies? 
Did you have any role in the review or approval of the Kmart pharmacy 
program that is the subject of the pending False Claims Act litigation?

    Answer. The Kmart-Sears board of directors did not review the 
policies or practices at issue in the False Claims Act. Those policies 
and practices were conceived and implemented by Kmart Pharmacy 
executives. Kmart elected to settle these False Claim Act lawsuits 
without conceding any liability of wrongdoing whatsoever.
                         sanctions enforcement
    Question. As Secretary of the Treasury, you will oversee the Office 
of Foreign Assets Control (OFAC) which is responsible for enforcement 
of U.S. sanctions against persons and entities, including those in 
Russia. Sanctions currently exist related to Russia's actions in 
Ukraine. President Trump's business enterprises have reportedly 
included investments and overtures to Russian investors. What measures 
will you put in place to ensure that OFAC fully enforces U.S. sanctions 
notwithstanding any business interests the President may have?

    Answer. As I stated during my hearing, I intend to fully enforce 
the existing sanctions imposed against Russia to the maximum extent. To 
the extent OFAC conducts Russia-related sanctions enforcement 
activities and investigations I will not, nor will any political 
appointee in the Treasury Department under my watch, attempt to 
influence, direct, or prevent any outcome to a law enforcement 
investigation other than what the facts and evidence support.

    Question. Analysis of the beneficial ownership of anonymous shell 
companies place an important role in OFAC sanctions enforcement. There 
have been numerous examples of terrorists, human traffickers, drug 
cartels and other crooks abusing anonymous U.S. shell companies to hide 
illicit assets and launder money with impunity. Last year I introduced 
legislation to stop these abuses by requiring the disclosure of 
beneficial ownership information to each State's Secretary of State or 
law enforcement at the time those entities are created.

    The law enforcement community, including the Federal Law 
Enforcement Officers Association, Fraternal Order of Police, National 
Association of Assistant U.S. Attorneys, and the National District 
Attorneys Association, have all called on Congress to pass this type of 
legislation. Similarly, financial institutions of all sizes--including 
the Clearing House Association and the Independent Community Bankers of 
America--have urged the government to assist them in their customer due 
diligence obligations by collecting beneficial ownership information at 
the time of incorporation.

    Do you agree that better enabling law enforcement to obtain the 
identities of the beneficial owners of shell companies would assist 
sanctions enforcement and help law enforcement to uncover and dismantle 
criminal networks? Would you be willing to work with the bipartisan 
group in Congress and the financial institutions who have supported the 
collection of meaningful beneficial ownership information by 
authorities at the time of incorporation?

    Answer. I agree that law enforcement anti-money laundering efforts 
face serious challenges if they are unable to determine the beneficial 
ownership of the various companies and entities that utilize the U.S. 
financial system. It can be a real vulnerability that various bad 
actors, including terrorists and criminals, can exploit. I understand 
that FinCEN recently passed new customer due diligence requirements 
that are intended in part to address beneficial ownership 
identification, and I will direct FinCEN to steadfastly enforce these 
regulations. If confirmed I will be willing to work with the U.S. 
Congress and the various equities impacted by beneficial ownership due 
diligence requirements to address this challenge.
                                 cfius
    Question. As Secretary of the Treasury, you will oversee the 
Committee on Foreign Investment in the United States (CFIUS). CFIUS is 
authorized to review transactions that could result in control of a 
U.S. business by a foreign person in order to determine the effect of 
such transactions on the national security of the United States. A 
substantial amount of indebtedness incurred by the President's business 
enterprises is reportedly held by foreign entities. What measures will 
you put in place to ensure that CFIUS is able to review any 
transactions related to the President's business enterprises?

    Answer. As Treasury Secretary, I will ensure that the Committee on 
Foreign Investment in the United States (CFIUS) is fully authorized to 
review transactions as deemed necessary and appropriate in conducting 
investigations.
                                  pbgc
    Question. As Secretary of the Treasury, you will be on the Board of 
Directors overseeing the functions of the Pension Benefit Guaranty 
Corporation (PBGC). As discussed during the confirmation hearing, PBGC 
has already been engaged with Sears in actions to try to preserve the 
viability of the Sears pension plan covering an estimated 200,000 
employees. While you have agreed to divest yourself of a number of 
Sears-related holdings, your ethics agreement does not include 
divestiture of your holdings in ESL Partners, which continues to have 
substantial holdings in Sears. What measures will you take concerning 
your personal involvement in any actions before the PBGC related to 
Sears or any related entity?

    Answer. If confirmed as Secretary of the Treasury, I will abide by 
the advice of the ethics officials at the Department and will take all 
steps necessary to comply with that advice.
                            relativity media
    Question. While you were co-chairman of Relativity Media, did you 
ever participate in any meetings intended to solicit potential 
investors on behalf of Relativity? If so, how many such meetings did 
you participate in between March 1, 2015 and May 29, 2015?

    Answer. In the period you indicated, I may have sat in with 
management in certain meetings to solicit potential investors in 
Relativity. I do not have records that indicate how many meetings that 
I may have participated in.

                                 ______
                                 
               Questions Submitted by Hon. Chuck Grassley
    Question. Over the last several years, we have seen an increase in 
the amount of Foreign Direct Investment (FDI) in the United States, 
specifically by China. In general, I do not oppose FDI, when people 
outside the United States invest here and create jobs, I generally 
think that is a very good thing. However, the rise of State Owned 
Enterprises (SOE) which operate in many cases on behalf of their 
governments, has changed the traditional FDI model. Today, we read 
about Chinese SOE's buying American companies specifically to acquire 
technology and intellectual property.

    I know others in Congress have the same concerns I have about this 
practice. Many of us are looking at modernizing the role of the 
Committee on Foreign Investment or CFIUS to give it more defined powers 
to review and potentially block investment by SOEs.

    How do you view the rise of SOEs in the global economy over the 
last decade?

    Answer. If confirmed, I would take the responsibilities entrusted 
to the Treasury Secretary under the Defense Production Act very 
seriously and I look forward to working with Congress to review, 
modernizing, and potentially expand the powers as needed in respect to 
SOEs.

    Question. In August, the Obama administration proposed regulations 
that generally eliminate the ability of family farms and businesses to 
use common valuation discounts when transferring interests to the next 
generation. As proposed, these regulations could increase estate and 
gift taxes for family owned farms and businesses by 30 percent or more. 
I joined Senator Thune, Chairman Hatch and several others in a letter 
to Secretary Lew calling for the withdrawal of the proposed 
regulations. As Treasury Secretary, will you review these proposed 
regulations and consider their withdrawal?

    Answer. As was announced, following the inauguration, President 
Trump issued a freeze on new regulations, in order to allow for further 
review.

                                 ______
                                 
                 Question Submitted by Hon. Mike Crapo
    Question. Mr. Mnuchin, as you may be aware, just a few weeks ago 
the IRS released new regulations regarding the donation of land for 
conservation purposes. And some of the stories we've seen about 
improper appraisals and valuations of the land in some of these deals 
do raise some concerns. On the other hand, we also know that the 
government has a long history of overreaching and causing unintended 
consequences when trying to address a very specific issue. Along those 
lines, can I have your assurance that you will work with me to ensure 
that IRS oversight efforts on these matters do not have the unintended 
consequences of discouraging legitimate land and water conservation 
efforts?

    Answer. If confirmed, I commit that I will work with the committee 
to review the integrity of the conservation easement program and will 
keep the committee informed about potential abuses and enforcement 
tools that are needed.

                                 ______
                                 
                Questions Submitted by Hon. Pat Roberts
    Question. Mr. Mnuchin, if you are confirmed, will you pledge to 
work with this committee to implement systems, controls, and procedures 
to make sure that the tax collection agency of the Federal Government 
can never again be used as a weapon against political opponents of any 
presidential administration?

    Answer. If confirmed, I pledge to oversee a Treasury Department 
that follows the laws enacted by Congress and respects the rights of 
all taxpayers and organizations. I confirmed, I intend to work with the 
administration to establish an efficient and simple tax code that will 
provide equal opportunity to all and encourage growth and prosperity.

    Question. What are your thoughts on how to make sure small business 
also benefit from tax reform? Do you have a proposal under development 
to create a lower business rate for pass-through entities? Are you 
considering a bifurcated rate, depending on the size of the business 
entity?

    Answer. President Trump wants tax reform that benefits all 
Americans. If confirmed, I look forward to working with Congress to 
ensure that no individual or business organization is treated unfairly 
in comparison to others.

    Question. A 2007 Treasury study during the Bush administration 
concluded that more-rapid write-offs of the cost of business investment 
would spur investment and growth more efficiently and effectively than 
cuts in the corporate tax rate. The reason was that cuts in the rate 
would give a windfall reward to investments made in the past. But 
improvements in cost recovery would apply to new investments. Also, as 
you know, higher depreciation deductions up front would be made up by 
reduced deductions and larger tax collections in the future. Do you 
agree that rapid cost recovery is a particularly efficient way to 
promote domestic investment?

    Answer. I do agree that at times rapid cost recovery is an 
effective way to promote domestic investment. Growth in private 
business investment is a key driver of private sector job growth and 
must be a component of successful tax reform.

    Question. The new President's tax proposals would give 
manufacturers an election to expense their capital investments, at the 
price of the loss of the interest deduction. Is there any compelling 
reason why such an election should be limited to manufacturers? How 
about transportation companies or communications companies or farms or 
extractive industries or others? Shouldn't tax reform eliminate narrow 
tax provisions, rather than add to them?

    Answer. President Trump's proposal during the campaign should be 
viewed as our administration's strong kickoff in the discussion of how 
to best reform the broken tax code. If confirmed, I will work with 
Congress to craft the legislation in a manner that ensures maximum 
fairness and economic growth.

    Question. Like-kind exchanges (LKEs) are integral to the efficient 
operation and ongoing vitality of thousands of American farms, ranches, 
and businesses, which in turn strengthen the U.S. economy and create 
jobs. LKEs allow taxpayers to exchange their property for more 
productive like-kind property, to diversify or consolidate holdings, 
and to transition to meet changing business needs because they are not 
required to immediately recognize a tax gain or loss when they exchange 
assets for ``like-kind'' property that will be used in their trade or 
business--importantly, the tax on any gain is not forgiven, only 
deferred. Although the use of LKEs has been allowed by the tax code 
since 1921, they are often mischaracterized as a ``loophole,'' and some 
recent tax reform proposals would limit or repeal the use of LKEs. This 
would have a significantly negative impact on our economy by increasing 
the cost of capital, slowing the rate of investment, and reducing 
transactional activity, resulting in a decline in GDP by up to $13.1 
billion annually, according to a recent economic study by Ernst and 
Young.

    Do you agree that farmers, ranchers, and businesses should continue 
to be able to use like-kind exchanges for real and personal property in 
order to operate efficiently, and to grow, create jobs and strengthen 
the U.S. economy?

    Answer. I agree that farmers, ranchers, and small business should 
be able to use like-kind exchanges for real and personal property in 
order to operate efficiently, create jobs, and strengthen the U.S. 
economy.

                                 ______
                                 
              Questions Submitted by Hon. Michael B. Enzi
    Question. Our Nation is on an unsustainable fiscal path. The 
Congressional Budget Office (CBO) makes it clear that if current laws 
governing taxes and spending did not change, the United States will 
face steadily increasing Federal budget deficits and debt over the next 
30 years. In CBO's projections, Federal debt rises to 86 percent of GDP 
in 2026 and to 141 percent in 2046--exceeding the historical peak of 
106 percent that occurred just after World War II. The prospect of such 
large debt poses substantial risks for the Nation and presents 
policymakers with significant challenges. We need to take steps now to 
reform our entitlement programs and our broken tax code--to lay the 
foundation for long-term prosperity for all Americans.

    As Budget Committee Chairman, I have been working to reduce the 
deficit and Federal debt. How do you expect to get the economy back to 
consistent 3- to 4-
percent annual growth?

    Answer. President Trump's plan to get the economy growing at 3 to 4 
percent is based on tax reform, regulatory reform, and negotiating 
better trade deals.

    Question. What role does tax reform play in revitalizing our 
Nation's economy?

    Answer. Tax reform is essential to revitalizing our economy.

    Question. Do you support comprehensive tax reform or tax reform for 
business only?

    Answer. The administration supports comprehensive tax reform.

                                 ______
                                 
                 Questions Submitted by Hon. John Thune
    Question. In the last Congress, Senator Wyden and I introduced the 
Charities Helping Americans Regularly Throughout the Year Act or the 
CHARITY Act for short. That legislation would make a number of 
improvements to the tax code to help charities and foundation conduct 
their charitable missions. But it is also based on the premise that 
charitable giving in this country is fundamental to our society and 
that Americans are among the most generous people in the world.

    Mr. Mnuchin, our current tax code, for all its flaws and 
complexity, seeks to encourage that generosity by allowing individuals 
and businesses to deduct gifts to charitable organizations. Will you 
join me and my colleagues in ensuring that tax reform legislation 
preserves an effective incentive for charitable giving?

    Answer. If confirmed, I will work with Congress to make sure that 
tax reform preserves appropriate incentives for charitable giving.

    Question. Last September, 40 of my colleagues and I wrote to 
Treasury Secretary Lew to ask that he withdraw proposed regulations 
relating to valuation discounts under the estate tax. We stressed that 
if finalized, the proposed regulations would make it more difficult for 
owners of family farms and businesses to pass their businesses on to 
future generation. As a result, the proposed regulations would 
significantly increase the estate-tax burden on family businesses. I am 
hopeful that we will not see any final regulations on this issue coming 
out of the Treasury Department today or tomorrow.

    Mr. Mnuchin, may we have your commitment that once you are sworn in 
as Treasury Secretary you and your staff will withdraw these valuation-
discount regulations? While I share the President-elect's desire to 
repeal the estate tax, in the interim, I would further ask that before 
any new regulations are proposed on valuation discounts the Treasury 
Department conduct a thorough evaluation of the perceived abuses and 
work with the small farm and business community to develop rules that 
directly target the abuses without hindering the ability of the owners 
to pass the business on to the next generation and keep it in the 
family.

    Answer. As you know, the President has issued a freeze on new 
regulations. If confirmed, I will work with Congress on the issue of 
valuation discounts such that it does not make it more difficult for 
owners of family farms and businesses to pass their businesses on to 
future generations.

    Question. The Obama administration has been widely criticized for 
the volume and breadth of regulations its agencies imposed on 
Americans, and with good reason. In the tax space, the Treasury 
Department and IRS have imposed some of the most far-reaching and 
burdensome regulations, which has fallen particularly hard on 
businesses in this country. The poster child for many is the recently 
finalized debt and equity regulations under section 385. And, just 
yesterday, with less than 48 hours left in office, the Obama 
administration dropped 277 pages of proposed regulations on partnership 
audit rules that will have a broad impact on pass-through businesses in 
this country.

    Mr. Mnuchin, as we work to fundamentally reform the current tax 
code into a less complex system for collecting the Nation's tax 
revenues, will you work with the Finance Committee to review the Obama 
administration tax regulations and other guidance and withdraw those 
that are unnecessarily burdensome or inconsistent with the law?

    Answer. The President has stated his commitment to reforming the 
tax code, and if confirmed, I will work with Congress on this issue.

    Question. In addition to tax regulations, financial-services 
regulations following the passage of Dodd-Frank have affected not just 
Wall Street banks, but main street banks as well. These lenders play an 
important role in the communities they serve providing access to credit 
for small businesses, homeowners, and agriculture producers. In my home 
State of South Dakota, if not for community banks, 36 of South Dakota's 
66 counties would be without traditional banking services. Yet 
compliance burdens for small- and medium-size banks continue to grow. 
In South Dakota, since 2010, 17 community banks have merged or been 
acquired.

    In your testimony you discuss your experience in the financial-
services sector and, very appropriately, your commitment to careful 
industry oversight. What approach will your Treasury Department take in 
evaluating current and future financial-services regulations and the 
impact they have on banks of varying sizes--and in particular community 
banks?

    Answer. I am of the view that taking a fresh look at all aspects of 
the Dodd Frank legislation should be one of our highest priorities, and 
if confirmed, I look forward to working with Congress on this important 
priority. It is important that we have a regulatory environment that 
support credit flows to all aspects of our economy, particularly in 
rural and less populated areas, and that small- and mid-sized 
institutions are not suffering from an inappropriate regulatory burden.

                                 ______
                                 
               Question Submitted by Hon. Johnny Isakson
    Question. The Internal Revenue Service has issued a number of 
regulations, guidance documents, and notices over the last several 
months. For example, on October 4, 2016, the IRS issued a revised 
notice of proposed rulemaking (REG-163113-02) concerning the valuation 
of interests in corporations and partnerships for purposes of estate, 
gift, and generation-skipping taxes. On November 1, the IRS issued 
Notice 2016-66 requiring taxpayers to submit additional information 
regarding certain captive insurance transactions. This notice 
originally set an effective date of January 30, 2017, although I was 
pleased that the IRS agreed to extend this deadline by 90 days to allow 
for consideration of feedback from taxpayers. Additionally, on December 
23, 2016, the IRS issued Notice 2017-10, effectively prohibiting 
certain types of syndicated conservation easement transactions by 
designating them as listed transactions. I have heard from several of 
my constituents who have questions or concerns about each of these IRS 
actions and are interested in knowing whether they will be carried over 
by the new administration.

    If confirmed as Secretary, what would be your approach to 
proceeding forward with regulations and sub-regulatory guidance issued 
by the IRS or other Treasury Department agencies in the final months of 
the outgoing administration?

    Answer. On Day One, President Trump issued a freeze on new 
regulations to allow for further review.

                                 ______
                                 
                Questions Submitted by Hon. Dean Heller
    Question. How many Nevada homes were in OneWest Bank's portfolio?

    Answer. Because I am no longer employed by or affiliated with CIT 
Group, I do not have access to this information.

    Question. How many Nevadan's did OneWest Bank foreclose on while 
you owned the bank?

    Answer. Because I am no longer employed by or affiliated with CIT 
Group, I do not have access to this information.

    Question. How many Nevadan's did OneWest Bank provide assistance to 
through loan modifications or forgiveness?

    Answer. Based on public information published in the MHA Servicer 
Assessment, in the period from 2009 to mid-2013 OneWest offered a total 
of 101,000 modifications to customers nationally. This period commences 
in the beginning of 2009 when the HAMP program commenced (which is 
approximately when OneWest was acquired in March 2009). Based on the 
percentage of loans modified nationally in the MHA Service Assessment 
that are in Nevada being 2.1%, that would indicate that we would 
reasonably estimate that OneWest modified 2,150 loans in Nevada in the 
period from 2009 to mid-2013.

    Question. Did OneWest Bank specifically target minority communities 
in Nevada for foreclosures?

    Answer. No. During my tenure, OneWest Bank completed fair lending 
examinations (including examinations of our servicing and loss 
mitigation activities) conducted by both the Office of the Comptroller 
of the Currency (``OCC'') and the Consumer Financial Protection Bureau. 
In addition, an OCC examination of the Community Reinvestment Act 
compliance of OneWest Bank under my leadership found that our 
``geographic distribution of loans [was] excellent,'' our performance 
under the OCC's Lending Test was ``high satisfactory,'' both home 
mortgage refinance and home purchase lending were ``excellent,'' and 
our multifamily lending activities were ``good.'' Overall, ``the OCC 
did not identify any evidence of discriminatory or other illegal credit 
practices with respect to'' OneWest Bank.

    Question. Was it an objective of OneWest Bank to foreclose on 
Nevadans in order to receive compensation from the Federal Deposit 
Insurance Corporation shared loss agreement?

    Answer. No, it was not the objective of OneWest to foreclose on 
Nevadans in order to receive compensation from the FDIC. We were 
strongly incentivized to modify every loan we possibly could. As I 
indicated in my testimony before the committee, anyone who asserts that 
we profited from foreclosures over loan modifications does not 
understand the issues.

    Question. Why was OneWest Bank slow to reach out to distressed 
Nevada homeowners to offer loan modifications or forgiveness?

    Answer. OneWest was not slow to reach out--on the contrary, OneWest 
has been singled out by housing advocates and others as one of the 
earliest adopters of loan modification programs, before other banks 
began modifying loans at scale. As the former executive director of 
HOPE NOW noted in supporting my nomination, OneWest under my leadership 
was one of the first banks to adopt principal reductions as a 
modification option, and we were also one of the first banks to agree 
to modify second mortgages, which were of particular concern in Nevada.

    Question. How will you help Nevadans who lost their home during the 
housing crisis become homeowners again?

    Answer. As Treasury Secretary if confirmed, I will work with bank 
regulators where appropriate to make sure that banks continue loan 
modification programs.

    Question. What will you be doing to help Nevadans who continue to 
struggle to make payments on their mortgages?

    Answer. I will work with your staff to discuss what tools, if any, 
the Treasury may have to address this issue.

    Question. During your confirmation hearing you mentioned several 
Federal regulations that prevented you and OneWest Bank from offering 
loan modifications. As the U.S. Treasury Secretary will you actively 
fight to change some of the regulations you believe could help Nevada 
homeowners who are currently struggling to stay in their homes?

    Answer. The impediments I mentioned before the committee were not 
Federal regulations per se, but contractual limitations in investor 
agreements and Fannie Mae and Freddie Mac guidelines that limited the 
ability of servicers to modify mortgage loans. I will work with the 
bank regulators, where appropriate, to encourage and allow loan 
modifications going forward.

    Question. What reforms do you plan to undertake to protect lower-
income and minority neighborhoods from another housing crisis?

    Answer. I favor developing a clear housing finance policy which 
should include clarification of the role of the Federal Government in 
lending and oversight of lending practices. I support the 
administration's strategies that will promote economic growth which 
will help drive demand for housing and support housing prices.

    Question. What policies will you promote that will help boost home 
values and ensure middle-class homebuyers have access to affordable 
mortgage financing?

    Answer. As I have mentioned previously, I am in favor of reforming 
our housing finance policy to assure consumers access to mortgage 
credit, while protecting the interests of taxpayers in Federal 
programs.

    Question. What initiatives will you propose that encourage the 
development of affordable housing in Nevada?

    Answer. As appropriate as Treasury Secretary if confirmed, I will 
review affordable housing programs in Nevada and elsewhere.

    Question. What specific changes to Dodd-Frank would be your top 
priority, and do you believe that reforms will lead to economic growth 
that will create more jobs?

    Answer. My top priority for regulatory reform with Dodd-Frank is 
addressing regulatory issues that limit banks' abilities to lend to 
small and medium-sized business that will create economic growth and 
create more jobs.

    Question. Will you pledge that you will never allow taxpayer 
dollars to ever be used to bailout failed large financial or Wall 
Street firms?

    Answer. I favor shifting the burden of risk to shareholders and 
other creditors without the expectation that the Federal Government 
will act to bail them out.

    Question. What do you believe should be done with Fannie Mae and 
Freddie Mac?

    What is your vision for housing finance reform?

    Answer. As I have previously mentioned, I am in favor of a clear 
housing finance policy to benefit both homeowners and renters. 
Important elements of my vision for housing finance reform include 
increasing private sector participation and protecting taxpayers. The 
passage of over 8 years since entering conservatorship combined with 
the broad recovery in housing prices make this a very good time to 
relook at the GSEs and adopt a clearer, long-term housing finance 
policy. I look forward to having the opportunity to work with Congress 
on this important goal.

    Question. It's not a secret that I strongly oppose the Obama 
administration's nuclear deal with Iran and expect action on that issue 
from the incoming administration. Iran is a state sponsor of terrorism 
that threatens Israel's right to exist, continues to test ballistic 
missiles in violation of UN resolutions, and now has access to billions 
of dollars that it can freely provide to terrorist groups.

    What tools as Treasury Secretary will you use, whether it is 
through the tax code or through sanctions, to hold Iran accountable for 
its state sponsorship of terrorism and other illicit activities?

    Answer. If confirmed as Treasury Secretary, I will commit to 
enforce all sanctions or other tools that are in place with Iran to the 
maximum extent allowable by law.

    Question. I would like to discuss the IRS's abysmal service record. 
For the 2015 filing tax season, only 38 percent of callers were able to 
reach an IRS representative. Additionally, the IRS has not developed 
any plans for a comprehensive customer service strategy to address 
these problems. Last year, I asked Secretary Lew this question, but I 
would like to understand from you, as the ultimate overseer of this 
agency, how will you plan to improve this record?

    Answer. As I mentioned in my testimony in the confirmation hearing, 
I believe that the IRS is under-resourced to perform its duties. Once 
in office, I would endeavor to work with the Commissioner to better 
understand the deficits in the organization, which may well include 
factors that contribute to the customer service issues that you note. 
While it is an independent Bureau I would endeavor to work with the 
Commissioner and Congress, as necessary, to improve the performance of 
the IRS including advocating for additional resources, if necessary.

    Question. I am deeply concerned about the continual reports of U.S. 
companies relocating overseas. I believe this is another example of our 
burdensome tax code hurting the U.S. economy. With the rest of our 
foreign competitors lowering their corporate tax rates while 
implementing a more competitive international tax system, the United 
States is falling further behind in its ability to provide U.S. 
businesses and workers the tools they need to compete in the global 
marketplace. This is why I believe we need to address fundamental tax 
reform, including overhauling the international tax code, immediately. 
As a member of this committee, I have repeatedly called on the 
committee to address this issue and am pleased to see they have held 
several hearings in regards to international tax reform.

    What policies do you believe are critical to address our outdated 
international tax code?

    Answer. Our tax and international trade policies must work together 
to ensure that companies stay here in the U.S., create new jobs, and 
return production to the United States. Our companies cannot be 
competitive if our tax and trade policy encourages them to move 
production outside the United States. It must be the objective of our 
tax and trade policy to return those jobs to our shores.

                                 ______
                                 
                Questions Submitted by Hon. Bill Cassidy
                          historic tax credit
    Question. While the historic rehabilitation tax credit is 
administered by the Department of Interior, the economic and fiscal 
activity this incentive generates has positive impacts for our economy 
as a whole, which you, as Treasury Secretary, will be helping to 
oversee. Forty percent of historic tax credit projects are in smaller 
communities of less than 25,000 people. My home State of Louisiana has 
led the Nation in a number of projects that have been assisted by this 
successful public-private economic development incentive, and I'm proud 
to report it has been used in 33 towns and cities throughout my State, 
including dozens of smaller communities. Furthermore, a number of 
projects in smaller communities throughout Louisiana are currently 
underway. The historic credit is a major generator of jobs and leads to 
economic revitalization in main street communities, rural towns, and 
downtowns. A study commissioned by the National Park Service found the 
credit delivers $1.25 in new tax revenue for every $1.00 of credit, 
which shows that on a dynamic basis, the program is more than paying 
for itself.

    As Treasury Secretary, will you give special attention to this 
proven and successful public-private economic development incentive 
that is having a very positive impact in smaller communities throughout 
America and in the urban areas that 
President-elect Trump spoke of reviving during the election?

    Answer. If confirmed, I pledge to follow the community improvement 
initiatives. President Trump is committed to a comprehensive tax reform 
plan and, if confirmed, I will work with Congress to incorporate 
proposals that will have a positive impact on the largest number of 
Americans.
                             section 170(h)
    Question. The tax code provides an incentive for the donation of 
easements that preserve land. This incentive, which has facilitated the 
protection of over 50 million acres of American land, was permanently 
increased on a bipartisan basis in 2015. On December 23, 2016, without 
the opportunity for public comment, the IRS and Treasury published 
Notice 2017-10 that designates a very broad category of these donations 
as ``tax avoidance transactions.'' Because the Notice does not 
distinguish between legitimate donations and the instances of taxpayer 
abuse, the Notice will chill land preservation donations and will 
thwart this important congressional effort to join private resources 
with a public incentive. This issuance of this Notice seems to fit into 
the pattern of 11th hour regulations and actions taken by the Obama 
administration across the board, without giving the incoming 
administration an opportunity to review them.

    Are you willing to delay the effective date of this Notice so that 
a thorough review can occur?

    Answer. On Day One, President Trump issued a freeze on regulatory 
actions. If confirmed, one of my priorities will be to assess any 
``11th hour'' regulations to ensure that they comply with President 
Trump's policies.

                                 ______
                                 
              Questions Submitted by Hon. Debbie Stabenow
    Question. When countries break international law and artificially 
undervalue their currency, it has real consequences for the United 
States. Currency manipulation has harmed manufacturers in States like 
Michigan and cost American workers millions of jobs. During 
consideration of Trade Promotion Authority in 2015, I introduced an 
amendment with my colleague, Senator Portman, to add clear language 
requiring our trade agreements to include enforceable currency 
provisions.

    Will you commit to supporting the inclusion of strong and 
enforceable currency provisions in future trade agreements?

    Answer. Yes, I support the inclusion of strong enforcement 
provisions in future trade agreements.

    Question. What specific steps will you take on currency 
manipulation issues?

    Answer. Existing U.S. laws provide the procedures whereby the U.S. 
Treasury is to evaluate the currency policies of foreign nations. If I 
am confirmed, I will follow the procedures and recommend changes to 
those procedures if needed.

    Question. You have said trade reform is a top agenda item for the 
incoming administration. As you know, the Treasury and Commerce 
Departments work with the Office of the U.S. Trade Representative on 
trade enforcement efforts. As I have stated before, if we don't toughen 
enforcement of our existing trade agreements, then we're letting other 
countries get away with illegal and abusive foreign trade practices and 
gain an anti-competitive upper hand. I worked hard to make sure 
President Obama's Interagency Trade Enforcement Center at USTR would be 
made a permanent institution to enforce our trade agreements and 
address unfair trade practices.

    What specific steps are you going to take to enhance trade 
enforcement?

    Answer. Enforcement of commitments under international trade 
agreements is critical. I will work closely with the Secretary of 
Commerce, the Director of the White House National Trade Council and 
the U.S. Trade Representative to ensure our trade agreements put 
American interests first. and work to enhance trade enforcement as 
appropriate.

    Question. Will you continue to support the work of the Interagency 
Trade Enforcement Center?

    Answer. As indicated above, we will use whatever tools necessary to 
enforce trade agreements.

    Question. Last year, volunteer tax preparers helped return $74 
million in refunds, including $22 million in EITC benefits, to nearly 
92,000 Michiganders. They do this with an exceptionally high accuracy 
rate--about 94 percent.

    Do you support volunteer income tax preparation programs?

    Answer. I will work with your office to review the issues 
associated with volunteer income tax assistance grant programs.

    Question. Will you support authorization of the Volunteer Income 
Tax Assistance grant program?

    Answer. I will work with your office to review the issues 
associated with volunteer income tax assistance grant programs.

    Question. The data shows that moderate- and low-income families 
need a more effective and better-targeted tool so that the tax code 
helps unlock homeownership for them. In Michigan, only 10% of 
households below $75,000 claim the mortgage interest deduction--but 
more than half of households above $75,000 do.

    How do you propose we use the tax code so that it more effectively 
promotes homeownership for more middle-class and lower-income families?

    Answer. With comprehensive tax reform and housing reform, we will 
work to promote home ownership for middle- and lower-income families, 
as appropriate.

    Question. Since 1917, the tax code has included incentives to 
encourage taxpayers to engage in charitable giving to causes that 
benefit their communities and causes that are important to them.

    Do you support maintaining existing incentives for charitable 
giving in the tax code, such as the charitable deduction?

    Answer. Senator, I would generally support the traditional 
attributes of tax policy related to charitable giving.

    Question. Some tax reform proposals to date have suggested 
eliminating Last In, First Out (LIFO) accounting. Many Michigan 
businesses--large and small, publicly held and privately owned--rely on 
the Last In, First Out (LIFO) accounting method. However, LIFO repeal 
would result in a one-time realization of revenue and retroactively 
punish taxpaying businesses that have complied with current tax law.

    Do you support maintaining LIFO accounting?

    Answer. As part of any comprehensive tax reform, we will study and 
consider the impact of this issue.

    Question. If confirmed, you will become the head of the Committee 
on Foreign Investment in the United States (CFIUS)--an interagency 
committee that serves the President in overseeing the national security 
implications of foreign investment in the economy.

    Do you believe the CFIUS process needs to be reformed?

    If yes, are you committed to working with Members of Congress to 
reform and modernize the CFIUS process to ensure all sectors of the 
economy are represented?

    Answer. As Treasury Secretary, I will ensure that the Committee on 
Foreign Investment in the United States (CFIUS) is fully authorized to 
review transactions as deemed necessary and appropriate in conducting 
investigations.

    Question. Another difficult issue you will play a leadership role 
in if you are confirmed as Treasury Secretary is pensions. This is an 
incredibly important issue to my State, particularly because we have 
about 47,000 workers and retirees who have been paying into the Central 
States Pension Fund, which is in serious trouble.

    What is your position on the Multiemployer Pension Reform Act, 
which Treasury is responsible for administering?

    How do you propose to shore up our multiemployer pension system?

    Answer. You have my commitment to work with you to find solutions 
to the multiemployer pension crisis.

    Question. Our tax code clearly provides too many loopholes that 
allow companies and wealthy individuals to avoid paying their fair 
share through tax planning.

    What do you think is the best strategy for preventing tax reform 
from creating new loopholes that companies and individuals will abuse?

    How would the incoming administration's tax plan close loopholes?

    Answer. As part of our overall plan for tax reform, we will 
consider this issue, and I look forward to consulting with Congress on 
the matter if confirmed

    Question. I firmly believe that we cannot have a robust economy if 
we do not grow things here and make things here.

    How would the incoming administration's tax plan specifically help 
the manufacturing and agriculture sectors?

    How would you contrast that with how the House Republicans' tax 
plan would affect the manufacturing and agriculture sectors 
specifically?

    From your perspective, how would eliminating the deductibility of 
business interest expenses impact these sectors?

    Answer. I entirely agree with your belief that we must improve the 
prospects of domestic manufacturing if we are to have a robust and 
dynamically growing economy. I look forward to working with Congress to 
examine and include tax provisions that will allow us to reach our 
common objective of growing the economy.

    Question. We can all agree that the lockout effect is a major 
problem with respect to international tax reform.

    Do you support using revenue from a one-time deemed repatriation to 
pay for infrastructure?

    Answer. President Trump has set forth a robust tax reform proposal 
which includes provisions to encourage American businesses to 
repatriate earnings. President Trump is committed to the need for 
infrastructure investments and we will be reviewing various 
alternatives to fund this. We look forward to working with Congress to 
review various alternatives to fund this.

    Question. What is the source for your suggestion that there might 
be as much as $3 trillion or $4 trillion in unrepatriated earnings 
overseas?

    Answer. In August 2016, the Joint Committee on Taxation estimated 
that there were $2.6 trillion of post-1986 profits held offshore in 
2015. I believe that, given growth, that number now likely exceeds $3.0 
trillion.

    Question. Back in November, you said that you want to get tax 
reform passed in the first 90 days of Donald Trump's presidency.

    Do you still think this is realistic?

    Answer. If confirmed, my first priority shall be to work with 
Congress to pass tax reform as quickly as possible.

    Question. Do you think it is possible to meet this aggressive 
timeline and still have a bipartisan process that members of Congress 
will have opportunities for input into?

    Answer. If confirmed, I will immediately seek input on a bipartisan 
basis.

    Question. Do you think the Treasury Department, including the Tax 
Policy Office, will be adequately staffed in time to meet that 
objective?

    Answer. It will be our priority to make sure that we have the 
resources to accomplish this.

    Question. For years, I have called for toughening enforcement of 
existing trade agreements. If we don't enhance enforcement, then we are 
allowing countries to get away with abusive trade practices and we're 
letting them gain an anti-competitive upper-hand.

    I have worked for several years to improve monitoring and 
enforcement at USTR to protect the interests of U.S. manufacturers. We 
now have an Interagency Trade Enforcement Center that monitors our 
trade agreements.

    What specific steps would you take in your role to enhance trade 
enforcement?

    Answer. Enforcement of commitments under international trade 
agreements is critical. We must also negotiate trade agreements that 
focus specifically on benefitting American companies, American jobs, 
and American economic growth. I will work closely with the Secretary of 
Commerce, the Director of the White House National Trade Council, and 
the U.S. Trade Representative to ensure our trade agreements put 
American interests first, and that they are enforceable.

    Question. How do you plan to stand up to abusive trade practices 
and cheating?

    Answer. I will work with the Secretary of Commerce, the Director of 
the White House National Trade Council, and the U.S. Trade 
Representative to examine all of our trade policies and current trade 
agreements. Those agreements that do not adequately address the 
interests of American companies and American jobs must be re-
negotiated. There are numerous tools, created by Congress, that can be 
and must be more effectively used to address unfair trade practices and 
end trade cheating.

    Question. Since 2006, an enhanced income tax deduction has allowed 
family farmers, ranchers, and forest landowners to get an important tax 
benefit for donating a conservation easement on their land. This 
enhanced incentive was made permanent on December 18, 2015.

    These incentives have a long history of bipartisan congressional 
and administration support. Unfortunately, the availability of these 
tax benefits can attract those who seek to take advantage of the 
provision for tax avoidance.

    On December 23, 2016, the IRS issued Notice 2017-10 to make certain 
syndicated conservation easement transactions ``listed transactions'' 
and require them to be disclosed to the government.

    It is clear that we need to strike an appropriate balance between 
making sure that conservation easements cannot be abused while still 
making sure that landowners who want to engage in legitimate 
transactions are not deterred from doing so.

    Will you commit to work with us to protect the integrity of the 
conservation easement incentive?

    Will you keep this committee informed about any abuses and whether 
additional enforcement tools are needed to curb these abuses?

    Will you work with this committee to ensure that any abuses of the 
conservation easement incentive will be appropriately addressed?

    Answer. I commit that I will work with the committee to protect the 
integrity of the conservation easement program and will keep the 
committee informed about potential abuses and enforcement tools that 
are needed.

                                 ______
                                 
               Questions Submitted by Hon. Maria Cantwell
    Question. During the hearing, you stated that the administration 
does not support a return to Glass-Steagall, but rather supports a 
``21st Century Glass-Steagall.''

    I have cosponsored, along with Senators Warren and McCain, the 21st 
Century Glass-Steagall Act, which builds on the original law's bright 
line separation of commercial and investment banking and expands it to 
include separation of derivatives trading and other shadow banking 
activities. Does the administration support this legislation?

    Answer. The administration believes that any new financial services 
legislation should reflect the reality of today's financial 
institutions and markets.

    Question. If not, can you please clarify, in detail, the 
administration's definition of a ``21st Century Glass-Steagall?''

    Answer. I look forward to working with your office as we work on 
the appropriate legislation.

    Question. At your hearing, you stated that you support the Volcker 
rule and ``believe the concept of proprietary trading does not belong 
in banks with FDIC insurance.'' The risks to our economy posed by 
proprietary trading and banks making risky bets on behalf of customers 
cannot be mitigated by merely separating proprietary trading from FDIC-
insured institutions. As we saw during the financial crisis, when non-
banking affiliates of FDIC insured banks failed, they were rescued by 
their insured affiliates, which in turn were forced to be rescued by 
taxpayers. This was the case with State Street Bank, and your former 
employer, Goldman Sachs, which converted to a bank holding company in 
order to be eligible for Federal bailout funds.

    Do you believe that a legal distinction between two entities, one 
insured and the other not, would keep the risky activities of one from 
impacting another in a crisis? Would a bright-line between these 
activities not better mitigate these risks?

    Answer. I am supportive of the Volcker Rule to mitigate the impact 
that proprietary risk-taking may have on a bank that benefits from 
Federal deposit insurance. However, as I indicated, we need to provide 
a proper definition of proprietary trading, such that we do not limit 
liquidity in needed markets, as indicated by the recent Fed report.

    Question. In your response to me regarding the Volcker Rule, you 
stated, ``I support the Volcker rule, but there needs to be proper 
definition around the Volcker rule so that banks can understand exactly 
what they can do and what they can't do.'' You have also called the 
Volcker rule ``too complicated'' in previous comments to the media.

    Would a bright line between commercial and investment banking not 
be significantly less complicated and allow banks to understand exactly 
what they can and cannot do?

    Answer. A bright line between commercial and investment banking, 
although less complicated, may inhibit the necessary lending and 
capital markets activities to support a robust economy. This is why we 
have suggested a 21st Century Glass-Steagall may be appropriate.

    Question. Do you plan to repeal, further delay, or significantly 
modify the Volcker Rule?

    Answer. As Chair of FSOC, I would plan to address the issue of the 
definition of the Volcker Rule to make sure that banks can provide the 
necessary liquidity for customer markets and address the issues in the 
Fed report.

    Question. If you plan to repeal or modify the Volcker Rule, will 
you commit that Congress will have the chance to review your 
replacement proposal at the same time, so that we may ensure that it 
credibly protects investors and taxpayers?

    Answer. I would expect to review with Congress any proposed changes 
to the law.

    Question. What additional actions will you take as Treasury 
Secretary to ensure market/financial stability? What other regulations 
would help market stability? Do you believe that additional regulations 
to ensure market stability and prevent financial crisis are in the 
interest of ``public safety''?

    Answer. I do not believe at this time that additional regulations 
are needed to ensure market stability; however, I expect that we will 
review this issue at FSOC on an ongoing basis.

    Question. In 2014, Congress slipped a repeal of section 716 of the 
Dodd-Frank Act in the ``Cromnibus'' legislation. This provision ensured 
that big banks making risky derivative bets wouldn't be done out of 
insured deposits. These trades increase risks for these banks and for 
taxpayers, and are anti-competitive, as these banks are free to market 
and trade these products knowing they are subject to a Federal 
backstop. You mentioned that you ``believe the concept of proprietary 
trading does not belong in banks with FDIC insurance.''

    Would you support a reinstatement of this provision?

    Answer. I think relooking at the nature of the regulation of 
trading and proprietary risk-taking at banks is an important objective. 
I look forward to studying this particular issue in detail.

    Question. The Senate's Permanent Subcommittee on Investigations, as 
well as the Financial Crisis Inquiry Commission, both found that one of 
the more insidious causes of the financial crisis was that some Wall 
Street banks, and particularly Goldman Sachs, had created securities 
that were designed to fail for their investors, and then bet against 
them by going short. Goldman created and sold billions of dollars in 
securities that they knew were, in their own words ``crap,'' but told 
their customers that these securities were the safest of the safe. 
Those customers lost big while Goldman won big.

    I worked with Senators Merkley and Levin to add section 621 to the 
Dodd-Frank Act to prevent this from happening again. It prohibits a 
bank from betting against an asset-backed security that it creates. 
Despite being proposed more than 5 years ago, the rule is not yet 
finalized.

    If confirmed, will you commit to finalizing this rule, and if not, 
how would you plan to restore trust in our markets when this sort of 
self-dealing behavior is allowed?

    Answer. I do understand the issue that you are trying to address by 
such rule. I do believe that ``short selling'' is an integral part of 
risk management. The specific reference to developing ``short 
positions'' as part of structured securities offerings, particularly 
when linked with a proprietary bet by the arranger of such 
transactions, is certainly worth considering when developing adequate 
investor protections and robust investor disclosure.

    Question. Do you believe your former employer, Goldman Sachs, acted 
responsibly and ethically when it bet against the same securities it 
was selling to its customers?

    Answer. As I mentioned in my testimony, I left Goldman Sachs nearly 
15 years ago and prior to the financial crisis and the period of time 
in question. I am not in a position to comment on these actions.

    Question. We have had a long tradition in this country that banking 
activities should be separated from physical commerce. Recently, the 
Federal Reserve issued a report required under section 620 of the Dodd-
Frank Act report, recommending that Congress take action to prohibit 
banks from engaging in merchant banking activities and owning certain 
physical commodities.

    Would you support restoration of separation between banking 
activities and commerce to support competition and reduce risks?

    Answer. If confirmed, I would further study section 620 to address 
the issues of your concern.

    Question. Many of us were disappointed when the Commodities Futures 
Trading Corporation chose in December to repropose its position limits 
rule, which was required under section 737 of the Dodd-Frank Act.

    Do you believe that in the absence of a position limits rule, an 
individual would have the potential to control or manipulate a market 
and lead to excessive speculation and unwarranted price fluctuations in 
important markets like energy?

    Answer. If confirmed, I would further study section 737 to address 
the issues of your concern.

    Question. Do you believe there should be a strong position limits 
rule in order to prevent market manipulation? Will you work with the 
CFTC to ensure a strong rule is finalized?

    Answer. It is clear that there should be no opportunity for market 
manipulation in any of our equity, fixed income, commodities or 
derivative markets. I would of course work with all members of the 
FSOC, including the CFTC, to enforce regulatory practices that 
reinforce this view.

    Question. In your role on the Financial Stability Oversight 
Council, will this be an issue that will be a priority for you?

    Answer. See answer to question above.

    Question. You stated in your response to me that ``the unemployment 
rate is not real.''

    Can you clarify what you meant by this statement?

    Answer. The official unemployment rate (total unemployed, as a 
percentage of the civilian labor force), taken alone, is not a 
sufficient indicator of labor market health. A real understanding of 
labor market health necessitates taking into account various Bureau of 
Labor Statistics (BLS) measures of labor underutilization, including U-
5 (defined by the BLS as ``total unemployed, plus discouraged workers, 
plus all other persons marginally attached to the labor force, as a 
percent of the civilian labor force plus all persons marginally 
attached to the labor force''). Another critical tool to determining 
the real state of labor market health is BLS's labor force 
participation rate.

    Question. Do you believe that the United States should use a 
different measure of unemployment than the U-3 rate? If so, why?

    Answer. In order to inform fiscal policy decisions, the U.S. should 
employ a variety of metrics to gauge the health of the economy and the 
broader labor market. Currently, excessive influence appears to be 
placed by U.S. policymakers on one metric--U-3 (total unemployed, as a 
percentage of the civilian labor force), which ignores the massive drop 
in labor force participation that occurred during the Obama 
administration, and fails to include discouraged workers or persons 
just marginally attached to the labor force.

    Question. Isn't it true that by any measure that the Bureau of 
Labor Statistics uses to track unemployment, the rate has fallen 
dramatically over the last 8 years?

    Answer. Both the labor market participation rate and the 
unemployment rate have fallen dramatically over the last 8 years, which 
suggests many Americans have given up looking for work. To be 
``unemployed,'' according to BLS's definition, only includes ``people 
who are jobless, actively seeking work, and available to take a job.'' 
If an individual ceases to actively seek work, then both the labor 
force and the number of unemployed Americans decreases by one. So while 
the unemployment rate has fallen, given the concurrent drop in labor 
force participation to near-historic lows, the downward trend in 
unemployment does not necessarily reflect improving labor market 
health.

    Question. During the campaign, President Trump said the 
unemployment rate was a ``phony number'' and stated that the real rate 
could be closer to 42 percent. Do you agree with this statement? Do you 
believe that official government unemployment statistics should count 
retirees, college students, and stay-at-home parents as unemployed?

    Answer. If one hopes to gain a clear picture of American labor 
market vitality, then using one metric--whether that be the U-3 
unemployment rate or the labor force participation rate--is not 
sufficient. Various unemployment metrics, including those which take 
into account part-time employment for economic reasons, as well as 
persons who are marginally attached to the labor force, must be used, 
along with the labor market participation rate, which takes into 
account those who drop out of the labor force.

    Question. In 2014, the United States and our European partners put 
targeted sanctions on Russian individuals and entities responsible for 
violating the sovereignty and territorial integrity of Ukraine. These 
sanctions came after Russia had invaded and occupied Crimea and was 
supporting conflict in Eastern Ukraine. These sanctions were intended 
to promote a resolution to that conflict and over the last several 
years the United States and Europeans have expanded the list of Russian 
individuals, companies, and banks that are sanctioned to ramp up 
pressure.

    Recently, Mr. Trump has said he would consider reducing sanctions 
on Russia if it significantly reduces its nuclear stockpile. He said 
nothing about working to end the conflict in Ukraine.

    Our European allies have maintained sanctions against Russia even 
when it has come at a direct impact on their businesses and economies. 
If we lift them before the Ukraine conflict is resolved or for reasons 
unrelated to that conflict, what message are we sending to our allies? 
What message are we sending to Russia?

    Answer. I agree that the United States must hold Russia accountable 
for its actions, and if confirmed I will continue to support and 
enforce the existing sanctions against Russia to the fullest extent. 
The President has indicated he would consider sanctions relief in 
return for other commitments from Russia.

    Question. While we all want to work towards reducing nuclear 
weapons stockpiles around the world, including in Russia, will the 
Trump administration maintain sanctions related to the Ukrainian 
conflict until that actual conflict is resolved? If not, why not? What 
has changed that should change U.S. policy that has been strongly 
supported by the U.S. Congress?

    Answer. As I stated during my hearing, I intend to fully enforce 
the existing sanctions imposed against Russia to the maximum extent. To 
the extent OFAC conducts Russia-related sanctions enforcement 
activities and investigations I will not, nor will any political 
appointee in the Treasury Department under my watch, attempt to 
influence, direct, or prevent any outcome to a law enforcement 
investigation other than what the facts and evidence support.

    Question. The Export-Import Bank, the export credit agency of the 
United States, is without a quorum on the Board of Directors and 
therefore unable to do deals over $10 million. In 2014, the Bank 
authorized more than $20 billion in export financing and supported 
almost 165,000 American jobs. However, last year, because it did not 
have a quorum, it was only able to do a fraction--authorizing $5 
billion in financing and supporting 52,000 jobs. The Bank has been 
without a quorum despite having broad bipartisan support in both 
chambers as demonstrated when it was reauthorized by a supermajority in 
2015.

    Given the Bank's ability to reduce risk and help American 
manufacturers stay globally competitive, do you agree that the Export-
Import Bank should be fully operational? Do you agree that a working 
quorum is needed as soon as possible for American job growth?

    Answer. I do believe that a quorum is necessary to properly use the 
Export-Import Bank. A critical focus of the administration will be to 
support an America First trade agenda, including supporting small and 
medium-sized business.

    Question. Last year, volunteer tax preparers helped return $97 
million in refunds, including $26 million in EITC benefits, to nearly 
76,000 Washingtonians.

    Do you support Volunteer Income Tax Assistance programs?

    Answer. I will work with your office to review the issues 
associated with Volunteer Income Tax Assistance grant programs.

    Question. VITA volunteers have a 94% return accuracy rate. Will you 
support authorization of the Volunteer Income Tax Assistance grant 
program, as passed by the Finance Committee last year?

    Answer. I will work with your office to review the issues 
associated with Volunteer Income Tax Assistance grant programs.

    Question. I understand the administration plans to pay for tax 
reform, in part by eliminating ``special interest deductions.'' As we 
discussed at the hearing, while I share the goal of a competitive tax 
code, competitiveness for me is not just measured by what the top rate 
is. It's a measurement of how much we are using the tax code to 
incentivize investments in our workers and our country.

    Please tell me if you consider the following provisions of tax code 
special interest deductions.

    The Low Income Housing Tax Credit--a provision the chairman, 
ranking member, and I strongly support expanding, that has financed 
nearly 3 million affordable homes for low-income working families since 
its creation in the last comprehensive tax reform, that sustains nearly 
100,000 jobs annually.

    Answer. If confirmed, I will work with Congress to determine which 
tax credits or deductions warrant retention, modification, or 
elimination in order to maximize economic growth and job creation.

    Question. The New Markets Tax Credit--which has leveraged nearly 
$75 billion in total capital investment in low-income urban and rural 
communities across the country.

    Answer. If confirmed, I will work with your office to review the 
New Markets Tax Credit program.

    Question. The Deduction for Charitable Giving--which has since 1917 
incentivized Americans to support charitable causes.

    Answer. If confirmed, I will work with Congress to make sure that 
tax reform preserves appropriate incentives for charitable giving.

    Question. The Exclusion for Municipal Bond Interest--which lowers 
borrowing rates for our local communities, allowing them to invest more 
in the infrastructure that we need.

    Answer. The President is committed to rebuilding America's 
infrastructure. If confirmed, I will work with Congress to determine 
the role of tax-exempt financing vehicles under that plan and as part 
of broader tax reform.

    Question. The Research and Development Tax Credit--to incentivize 
the important technological innovation that creates good-paying jobs 
here in America.

    Answer. The Research and Development Tax Credit can be an important 
tool for technological innovations and creating good paying jobs in 
America, where appropriate.

    Question. The Exclusion of State Sales Tax--my State is one of only 
seven States that does not have an income tax. We struggled to make 
this provision permanent until we succeeded in 2015. The deduction 
delivers about $600 on average to each of my constituents who file 
Federal income tax returns.

    Answer. I know this is an important issue in many States. I will 
work with you and your colleagues on this issue.

    Question. Conservation Easements--which allow a deduction for the 
donation of easements that preserve land. This incentive, which has led 
to the protection of over 50 million acres of American land, was 
increased and made permanent on a bipartisan basis in 2015. Do you 
believe that golf courses should be eligible for conservation 
easements?

    Answer. I commit that I will work with the committee to protect the 
integrity of the conservation easement program and will keep the 
committee informed about potential abuses and enforcement tools that 
our needed.

    Question. You have stated that there will be ``no absolute tax cut 
for the upper class'' through tax reform. Will you support a tax cut 
for the upper class outside of tax reform, such as the potential repeal 
of the Affordable Car Act's additional Medicare Hospital Insurance tax 
of 0.9% on earnings over $250,000 a year and the Medicare surtax of 
3.8% on unearned income above $250,000 a year?

    Answer. As you are probably aware, the President has proposed 
eliminating the Medicare surtax. If confirmed, I will work with 
Congress to reach an appropriate resolution to this issue.

    Question. Do you believe that climate change is real and that human 
activity is the primary driver of it?

    Answer. I believe that climate change is a complex issue, but not 
one primarily driven by the Treasury Department.

    Question. Do you believe that tax policy and tax reform should play 
a significant role in the continuing development of clean energy 
technologies to prevent climate change?

    Answer. I will work with Congress to review the role of tax policy 
in continuing the development of clean energy techniques.

    Question. Do you support a repeal of tax incentives for oil 
companies, including the section 199 deduction for oil and gas 
companies, expensing of intangible drilling costs, and percentage 
depletion?

    Answer. If confirmed, I will work with you and members of Congress 
to determine which provisions of the tax code should be retained, 
eliminated, or revised.

    Question. Do you believe that tar sands oil should be included in 
the definition of crude oil that is subject to the Oil Spill Liability 
Trust Fund tax?

    Answer. If confirmed, I will work with Congress and the President 
on how these definitions should be properly applied.

    Question. Do you support Notice 2013-60 issued by the IRS on 
September 20, 2016 to clarify the commence construction/continuous 
construction safe harbor for the production and investment tax credits?

    Answer. If confirmed, I will work with Congress to determine which 
provisions of the current tax code should be retained, revised, or 
eliminated.

    Question. Do you support efforts to improve the ability of 
developers to monetize the section 45 and section 48 production and 
investment tax credits? Do you think the need for improved monetization 
will increase as these credits phase down?

    Answer. If confirmed, I will work with Congress to determine which 
provisions of the current tax code should be retained, revised or 
eliminated.

    Question. During the first 11 months of 2016, U.S. biodiesel 
imports totaled 597.74 million gallons, up 93% from the same period in 
2015. Do you support bipartisan legislation introduced by Senator 
Grassley and me to convert the Biodiesel Tax Credit from a blender's 
tax credit to a production tax credit to stop the subsidy of foreign 
biodiesel and create jobs in America?

    Answer. If confirmed, I will work with Congress to determine which 
provisions of the current tax code should be retained, revised, or 
eliminated.

    Question. Do you support the extension of expired clean energy tax 
breaks, including incentives for fuels, energy efficient new home and 
commercial building construction, and building retrofits?

    Answer. If confirmed, I look forward to working with Congress on 
the role of energy credits.

    Question. Do you believe all technologies, including hydropower, 
should receive the same tax credit rate under the production tax 
credit?

    Answer. If confirmed, I look forward to working with Congress and 
the President to determine which technologies should be eligible for 
the production credit and what the appropriate levels for those credits 
should be.

    Question. In 2012, the people of Washington State chose, by popular 
vote, for our State to implement an adult-use marijuana system. Seven 
more States passed similar laws on their ballots this past November.

    Will you commit to maintaining the 2014 Financial Crimes 
Enforcement Network (FinCEN) guidance to financial institutions that 
allows them to work with regulated marijuana-related businesses, while 
increasing transparency and improving public safety?

    Answer. If confirmed, I will work with your office to review the 
2014 FinCEN guidance.

    Question. Do you support further changes to the tax code and 
banking law to ensure that these business can operate on a level 
playing field with other industries?

    Answer. This is a very important issue. If confirmed, I will work 
with Congress and the President to determine which provisions of the 
current tax code should be retained, revised, or eliminated to ensure 
that all individuals and businesses compete on a level playing field.

    Question. Washington State is one of seven States without an income 
tax. Because of decisions by the courts, we are prohibited from 
requiring out-of-state retailers to collect and remit sales tax on 
purchases shipped to Washington State. This gap in our tax collection 
is estimated to cost our State government hundreds of millions of 
dollars in revenues per year and disadvantages brick and mortar small 
businesses in Washington State, who must compete with out-of-state, 
online retailers that do not collect sales tax.

    Do you support legislation to require out of State retailers to 
collect and remit sales tax to customers in other States?

    Answer. This is a very important and complicated issue. If 
confirmed, I will work with Congress and the President to ensure 
legislation considered by Congress is consistent with the President's 
tax policy objectives.

    Question. Should the tax remitted be destination-based or origin-
based?

    Answer. If confirmed, I will work with Congress and the President 
to determine the best approach to this issue.

    Question. Mr. Mnuchin, you have stated that the offshore hedge 
funds you failed to initially report were set up not for tax avoidance 
but to let pensions and non-profits invest.

    Please provide the ratio of the amount of investment in these 
offshore funds, at their peak, that were made by pension fund and non-
profits versus other investors.

    Answer. Since many of the investors in our offshore fund consisted 
of fund of funds, I do not have the exact characterization of the 
underlying investors. However, I do know that approximately 20% of the 
fund consisted of individuals, family companies, or trusts that were 
true foreign entities.

    Question. Did any of your marketing materials for your Anguilla or 
Cayman Island funds express or advertise the tax benefits of their 
offshore location?

    Answer. The offering document for Dune Capital International 
contained normal tax consideration disclosures as well as ERISA and 
other regulatory considerations.

    Question. Please provide to the Finance Committee any and all 
marketing materials and letters.

    Answer. As indicated in the preceding response, the confidential 
offering memorandum describes the tax consequences of the investment 
but does not express or advertise ``tax benefits'' from the investment. 
The description of tax consequences in the confidential offering 
documents is typical for such investments, including a description of 
U.S. and Anguilla tax rules.

                                 ______
                                 
                Questions Submitted by Hon. Bill Nelson
    Question. As you know, the Treasury Secretary heads the Financial 
Stability Oversight Council (FSOC), which is responsible for rooting 
out systemic risk in our financial system. If confirmed, what would be 
your top three priorities for FSOC?

    Answer. The Dodd-Frank Act requires the FSOC to conduct activities 
to execute three responsibilities: to identify risks to the financial 
stability of the United States; to promote market discipline; and to 
respond to emerging threats to the stability of the United States 
financial system. If nominated, I will work to fulfill these three 
statutory responsibilities.

    Question. Do you believe large nonbank financial companies, like 
AIG, should be left alone or do you believe they should be subject to 
closer scrutiny if they pose a significant risk to the financial 
system?

    Answer. If confirmed, I look forward to working with FSOC and 
understanding the work that they have done on this issue before 
reaching a judgment.

    Question. Do you think Goldman Sachs did anything wrong in the lead 
up to the 2008 financial crisis? If so, please explain.

    Answer. Senator, as I left Goldman Sachs in 2002, I am not in a 
position to offer judgment on their activities after that time.

    Question. The Treasury Department is responsible for combating 
terrorism financing. This has taken on increasing importance over the 
years as terrorist groups like ISIS increasingly rely on access to 
global financial networks to carry out their acts of terror. What do 
you believe you could contribute to this critical area of our national 
security?

    Answer. If confirmed as Treasury Secretary, I will use the many 
tools the Treasury Department has to combat terrorist financing to the 
maximum amount allowable by law.

    Question. Some members of Congress, including myself, have proposed 
giving the Treasury Secretary the ability to establish minimum 
competency standards for tax preparers--to ensure they are actually fit 
to do your taxes and not criminals. The lack of quality control in the 
tax preparer industry has been known to contribute to the proliferation 
of identity theft-related tax fraud and tax scams. Do you think it 
makes sense to make sure paid tax preparers are qualified to do your 
taxes? If so, what do you plan to do to make this issue a priority? If 
not, why?

    Answer. I agree that tax preparers should be qualified. I am 
committed to reviewing any proposals addressing this area.

    Question. The National Taxpayer Advocate recently reported that 
Hispanic Americans are most at risk to abuse by disreputable tax 
preparers, stating: ``Given language barriers and less education, 
Hispanics may be especially vulnerable to unscrupulous return preparers 
who promote high interest loans and charge high fees.'' What can you 
say to Hispanic Americans to give them some comfort about the next 4 
years in relation to this issue? How would you reach out to this 
community and ensure they are not forgotten?

    Answer. If confirmed, I look forward to working with Congress, the 
National Taxpayer Advocate, and the Internal Revenue Service to 
identify ways to make sure all Americans have the ability to comply 
with our tax laws. In addition, the IRS website is available in 
Spanish, and we will continue to make information available to help 
educate the Hispanic community.

    Question. What can you tell us about your commitment to making sure 
tax reform is fully paid for and not reliant on budget gimmicks, such 
as timing shifts or one-time revenue for permanent changes?

    Answer. We are committed enacting tax reform that grows the 
economy, jobs, and incomes for hardworking Americans. We believe that 
the higher growth resulting from tax reform, reduced regulation, and 
eliminating the trade deficit will generate significant additional 
revenue.

    Question. Do you believe a tax reform plan that provides the lion's 
share of its tax cuts to the top 1 percent of income earners and large 
corporations is better for the economy than a plan that makes the tax 
code more progressive and provides the majority of its benefits to the 
middle class and working poor?

    Answer. Maximizing economic growth, allowing working people to keep 
more of their money, and creating jobs and greater opportunity for all 
Americans is our objective. We are committed to working with Congress 
to maintain an appropriate level of progressivity in the tax code.

    Question. Are you familiar with the details of what House leaders 
are planning for tax reform? If so, do you have any concerns about any 
provisions within the plan?

    Answer. I am very familiar with the Blueprint, titled ``A Better 
Way for Tax Reform.'' I will work closely with the leadership in the 
House and Senate on needed tax reform.

    Question. Separate from the Joint Comprehensive Plan of Action, 
which relates to Iran's nuclear program, we have long imposed sanctions 
on Iran unrelated to its nuclear program. They were put in place in 
response to Iran's weapons trafficking, support for terrorism, money 
laundering, and ballistic missile testing. Until those activities 
cease, those sanctions should remain in effect. What commitment can you 
make to ensure Iran is not gaining access to the U.S. financial system 
without making drastic changes to its behavior?

    Answer. I will act to fully enforce all existing sanctions against 
Iran--including with respect to its sponsorship of terrorism and other 
illicit activities. I am fully committed to bringing every available 
Treasury tool and authority to bear to prevent Iran from accessing the 
U.S. financial system.

    Question. If confirmed, you will be in charge of overseeing foreign 
assets blocked by the Treasury Department, including the assets of the 
Revolutionary Armed Forces of Colombia, better known as FARC, a 
terrorist organization and drug syndicate. Last year, I introduced a 
bill with Senator Rubio to help the Americans that were murdered and 
held hostage by the FARC, and their families, gain access to more 
assets blocked by the Treasury Department, as restitution for their 
harrowing ordeal. Can you commit to ensuring FARC victims and their 
families gain access to assets blocked under the Kingpin Act and work 
with me to help get my legislation enacted into law?

    Answer. I am committed to utilizing all of Treasury's assets to 
confront terrorism and narco-trafficking networks. If confirmed, I 
would look forward to working with you on this issue and welcome any 
suggestions toward that goal.

    Question. How do you think we should address the problem of 
currency manipulation--when other countries intervene in their currency 
markets to control the value of their currency and gain a trade 
advantage? Do you think it is something we can solve unilaterally, or 
do we need to work within the G20 to find a global solution?

    Answer. Existing U.S. laws provide the procedures whereby the U.S. 
Treasury is to evaluate the currency policies of foreign nations. If I 
am confirmed, I will follow the procedures and recommend changes to 
those procedures if needed.

    Question. If confirmed, what would you like to accomplish by the 
end of your term?

    Answer. As Treasury Secretary, my primary objective will be to 
increase U.S. economic growth through significant tax, regulatory, and 
trade reform. I believe, together with the President, that America has 
unlimited potential; through sound policies aimed at achieving solid 
finances and a dependable dollar, we can establish a firm foundation 
for productive growth and new levels of prosperity.

    Question. Are you familiar with the trademark dispute related to 
the Cuban Government's theft of the Havana Club Rum trademark? If so, 
what are your thoughts on reviewing the decision that allowed the 
Cuban-based beneficiaries of the theft to pay the fee that allows them 
to renew the trademark in the United States? If not, can you commit to 
looking into this dispute and meeting with U.S. stakeholders to fully 
understand the issue?

    Answer. Although I am not familiar with this it, it is long-
standing U.S. law and policy to prevent the registration or renewal of 
trademarks obtained through confiscations, without compensation to the 
original owners. Thus, if confirmed, I would look forward to working 
with your office to learn more about this dispute and meeting with the 
U.S. stakeholders.

    Question. What are your thoughts about politicizing decisions made 
by the Federal Reserve Board of Governors and the benefits of an 
independent central bank?

    Answer. As you know, the Federal Reserve is organized with 
sufficient independence to conduct monetary policy and open market 
operations. I endorse the increased transparency we have seen from the 
Federal Reserve Board over recent years.

    Question. As you know, if you are confirmed as Treasury Secretary, 
you would serve as the chair of the Committee on Foreign Investment in 
the United States (CFIUS). CFIUS has the important responsibility of 
reviewing foreign investment transactions to ensure they do not 
threaten our national security. What do you believe are the most 
pressing challenges facing CFIUS today? What would be your approach to 
dealing with those challenges, and how would you approach any conflicts 
of interest that come before CFIUS?

    Answer. If confirmed, I would ensure that CFIUS is fully able, to 
the maximum amount allowable by law, perform its important 
responsibilities in assessing whether foreign investment transactions 
pose a threat to U.S. national security.

    Question. In 2015, Congress made the conservation easement tax 
deduction permanent, reinforcing our commitment to conservation. What 
are your thoughts on conservation easements? Do you believe tax reform 
should preserve the incentive for conservation easements?

    Answer. I commit that I will work with the committee to protect the 
integrity of the conservation easement program and will keep the 
committee informed about potential abuses and enforcement tools that 
our needed.

                                 ______
                                 
              Questions Submitted by Hon. Robert Menendez
    Question. Shortly after then President-elect Trump announced your 
nomination, you told CNBC that you would focus on rolling back parts of 
the Dodd-Frank Wall Street Reform Act. Specifically, you said, ``the 
number one problem with Dodd-Frank is that it's way too complicated and 
cuts back lending.''

    What specific provisions would you advise the President and 
Republicans in Congress to change, repeal, or unwind?

    Answer. I would advise the President and members of Congress on 
rules that undermine economic growth and job creation. A particular 
focus should be placed on reducing the regulatory costs faced by 
community financial institutions, and making sure that small and 
medium-sized business have access to credit.

    Question. During your confirmation hearing, you appeared to be 
supportive of the Volcker Rule for FDIC-insured institutions, though 
you also mentioned complications with the implementation of the rule. 
While the Department of the Treasury was not responsible for writing 
the rule, it was responsible for coordinating the rulemaking.

    What is your view on Treasury's role in making any changes to the 
Volcker Rule?

    Answer. I am supportive of the Volcker Rule to mitigate the impact 
that proprietary risk taking may have on a bank that benefits from 
Federal deposit insurance. However, as I indicated we need to provide a 
proper definition of proprietary trading, such that we do not limit 
liquidity in needed markets, as indicated by the recent Fed report.

    Question. How do you plan to engage with the other financial 
regulators on this issue, and what specific changes would you like to 
see made?

    Answer. I would encourage the regulators to define the Volcker rule 
in a way that does not hinder liquidity and customer trading as 
outlined in the Fed report.

    Question. During your confirmation hearing, you said, ``regulation 
is killing community banks.'' According to data released by the FDIC on 
November 29, 2016, community banks reported net income rose $593 
million, or 11.8 percent from the 2015 period. The FDIC also reported 
that community banks' net operating revenue totaled $23 billion, an 
increase of 8.5 percent from a year earlier. Chair Gruenberg said, 
``community banks, which account for 43% of the industry's small loans 
to businesses, continued to grow their small business loans at a faster 
pace than the rest of the industry.''

    What specific regulations do you believe are particularly 
detrimental to the community banking industry, and what changes would 
you recommend?

    Answer. I look forward to working with banking regulators and 
Congress to determine what particular regulations could be reformed to 
better serve customers and create a flow of credit while preserving key 
capital adequacy and safety and soundness standards.

    Question. Mr. Mnuchin, you have extensive experience as a board 
member of a large regional bank. As you know, there have been a number 
of proposals in Congress to change the Dodd-Frank created enhanced 
prudential regulatory regime administered by the Federal Reserve for 
banks with more than $50 billion in assets.

    What is your view on the role of regulation in overseeing large 
regional banks?

    Answer. I endorse rethinking regulatory requirements facing large 
regional banks in order to regulate the banking sector in a more 
effective manner. In particular, we should examine whether it is 
appropriate for financial institutions that engage almost exclusively 
in traditional banking activities with consumers and businesses to be 
subject to measures intended for our largest and most complex financial 
institutions.

    Question. As Treasury Secretary, you will chair the Financial 
Stability Oversight Council (FSOC), and you will have the 
responsibility of overseeing efforts to address systemic risks to the 
system.

    Will you continue FSOC's efforts to identify and address the risk 
that so-called shadow banks and other non-banks may pose to the 
economy?

    Answer. If confirmed, I will review the work that has been done on 
the so-called shadow banks and other non-banks that pose risk to the 
economy.

    Question. As you know, the FSOC can set aside a CFPB final 
regulation with the vote of two-thirds of its members if the regulation 
would put the safety and soundness of the U.S. banking system or U.S. 
financial stability at risk, a process that begins with the petition of 
a single member of the Council.

    What is your view on the FSOC's role in overseeing the work of the 
CFPB?

    Answer. If confirmed, I will review the work and governance of FSOC 
and will look forward to following up with your office.

    Question. Some in Congress have pushed for changes that would make 
it even easier for FSOC to overturn CFPB rules. Do you support those 
proposals? If so, why?

    Answer. If confirmed, I will review the work and governance of FSOC 
and will look forward to following up with your office.

    Question. As you know, the Office of Financial Research (OFR) was 
created to, unlike any other existing agency, look across the entire 
financial system to fill critical data and information gaps that 
policymakers and the public sorely needed following the Great 
Recession. Congress realized the need for an independent team of 
experts at the Treasury Department that would have the capacity to 
perform high-level data-collection and analysis on potential risks to 
U.S. financial stability. The OFR can also help reduce regulatory 
burdens and reporting requirements for financial institutions by 
ensuring data standardization. As someone who has served in many 
different roles in the financial services industry, you have witnessed 
firsthand the need for the OFR.

    Will you support the OFR and its research and data collection 
activities to ensure we identify and can appropriately address future 
potential threats and minimize duplicative data reporting as soon as 
practicable?

    Answer. More needs to be done to minimize duplicative data 
reporting. I support efforts to revisit the Dodd-Frank framework in 
order to ensure policymakers have the right information to address 
future potential threats to the U.S. financial system.

    Question. In November 2016, the California Reinvestment Coalition 
and the Fair Housing Advocates of Northern California filed a complaint 
with the U.S. Department of Housing and Urban Development asking the 
Department to investigate allegations that CIT Bank, as a successor to 
OneWest, violated the Fair Housing Act. Specifically, the complaint 
alleges that the bank failed to locate branches in communities of 
color, extended few or no mortgage loans to borrowers of color, and 
maintained and marketed real estate owned homes in predominantly white 
neighborhoods better than in neighborhoods of color.

    What are your views on the importance of fair lending and fair 
housing laws?

    Answer. In my opinion, lending and housing discrimination have no 
place in a well-functioning economy, and I have always been committed 
to compliance with fair lending laws. During my tenure, OneWest Bank 
completed fair lending examinations (including examinations of our 
servicing and loss mitigation activities) conducted by both the Office 
of the Comptroller of the Currency (``OCC'') and the Consumer Financial 
Protection Bureau. In addition, an OCC examination of the Community 
Reinvestment Act compliance of OneWest Bank under my leadership found 
that our ``geographic distribution of loans [was] excellent,'' our 
performance under the OCC's Lending Test was ``high satisfactory,'' 
both home mortgage refinance and home purchase lending were 
``excellent,'' and our multifamily lending activities were ``good.'' 
Overall, ``the OCC did not identify any evidence of discriminatory or 
other illegal credit practices with respect to'' OneWest Bank. And 
while two community groups have made unfounded allegations about 
OneWest, I am proud to have received the support of the former 
executive director of HOPE NOW, the President and CEO of the National 
Asian American Coalition, and multiple former State and Federal bank 
regulators.

    Question. The Obama administration has issued a series of 
regulations and licenses that allow American businesses to engage in 
business transactions with entities that are owned by the Cuban 
military, which in practice is nearly impossible to separate from the 
Castro regime. Although the administration has touted these investments 
as supporting the Cuban people, the truth is the regime and the 
military have a tight grip on just about every industry. In fact, in 
December, the president of a major travel company lamenting the lack of 
infrastructure in Cuba told NBC full stop that: ``Tours and experiences 
are controlled by the government tour company.''

    Additionally, the Treasury's Office of Foreign Asset Control has 
granted licenses for businesses and companies to transact with 
properties and assets that the Cuban government has confiscated from 
its own citizens and even from American citizens. Both of these 
transactions are inconsistent with U.S. statutes and in fact blatantly 
contradict the intention of the LIBERTAD Act--and I know because I 
wrote that law.

    Will you commit to reversing decisions that allow American 
businesses to engage in transactions with Cuban-military owned entities 
or properties that were stolen from American citizens?

    Answer. If confirmed, I commit to fully and effectively enforcing 
all sanctions prescribed by the LIBERTAD Act and other Cuba sanctions 
legislation. Moreover, I would look forward to working with you and 
your office to review and ensure that all prior licenses and current 
regulations are consistent with statutory intent.

    Question. On October 12, 2016, Donald Trump said, ``The people of 
Cuba have struggled too long. I will reverse Obama's executive orders 
and concessions towards Cuba until freedoms are restored.''

    Do you stand by that statement? As many of the Executive orders and 
regulations that impact our relationship with Cuba have gone through 
the Treasury Department, will you commit to reversing those 
``concessions'' and regulations?

    Answer. If confirmed, I will enforce all statutorily-mandated Cuba 
sanctions to the fullest extent of the law. I will also implement any 
revisions to the current regulations pursuant to President Trump's 
policy.

    Question. Mr. Mnuchin, I'm disappointed that you wouldn't support 
new sanctions on Russia for, among other things, interfering in our 
election. Moreover, Mr. Trump said that he would potentially lift 
sanctions against Russia quickly, unilaterally, and without input from 
Congress. For those of us who have both authored much of the laws 
putting the architecture for comprehensive and effective sanctions in 
place, and those of us who believe that the legislative branch must be 
an effective check on the Executive, this is alarming. Sanctions that 
carry the full weight of law are a critical component of our national 
security strategy.

    Would you support efforts of the President to ignore the will of 
Congress and unilaterally lift sanctions currently in place on Russian 
individuals and actors?

    Answer. If confirmed, I will continue to support and enforce the 
existing sanctions against Russia to the fullest extent, as I stated 
during my confirmation hearing. To the extent that the President and 
his national security advisors determine that it is in the best 
interest of the United States to modify the sanctions or impose others, 
I will fully enforce those sanctions in support of the President's 
national security strategy.

    Question. Due to President Maduro's failed policies and lack of 
respect for the rule of law, Venezuela is currently facing a dire 
humanitarian and economic crisis. Its state-owned oil company PdVSA 
(Pedevesa) and its subsidiary Citgo, are under extreme financial 
pressure and may not be able to pay their bills in the near future. 
Under a recent deal, 49.9% of Citgo was mortgaged to Rosneft, the 
Russian government-owned oil company run by Vladimir Putin crony Igor 
Sechin. It is also possible that Rosneft acquired other PdVSA bonds on 
the open market what could bring their ownership potential to over 50%. 
If Citgo defaults on its debts, Rosneft, an entity currently under 
American sanctions because of Russia's belligerent behavior, could come 
to own a majority stake in strategic U.S. energy infrastructure 
including 3 refineries and several pipelines.

    Given the close ties between Rosneft and Putin, Putin's interest in 
undermining the United States, and Putin's willingness to use energy as 
a weapon, does this potential deal concern you?

    Answer. Rosneft is currently subject to ``sectoral sanctions'' 
under Directives 1 and 2, which were issued pursuant to Executive Order 
13662 of March 20, 2014. Given that the Treasury Department is 
responsible for the implementation and enforcement of economic 
sanctions imposed by the United States, if confirmed as Treasury 
Secretary, I will ensure that any transaction by Rosneft that 
potentially impacts U.S. strategic energy interests is carefully 
monitored and will advise the President accordingly.

    Question. Do you think that is in our national interest?

    Answer. Rosneft is currently subject to ``sectoral sanctions'' 
under Directives 1 and 2, which were issued pursuant to Executive Order 
13662 of March 20, 2014. Given that the Treasury Department is 
responsible for the implementation and enforcement of economic 
sanctions imposed by the United States, if confirmed as Treasury 
Secretary, I will ensure that any transaction by Rosneft that 
potentially impacts U.S. strategic energy interests is carefully 
monitored and will advise the President accordingly.

    Question. Should a sanctioned Russian company have control over 
critical U.S. energy infrastructure?

    Answer. Rosneft is currently subject to ``sectoral sanctions'' 
under Directives 1 and 2, which were issued pursuant to Executive Order 
13662 of March 20, 2014. Given that the Treasury Department is 
responsible for the implementation and enforcement of economic 
sanctions imposed by the United States, if confirmed as Treasury 
Secretary, I will ensure that any transaction by Rosneft that 
potentially impacts U.S. strategic energy interests is carefully 
monitored and will advise the President accordingly.

    Question. Will you initiate a CFIUS review?

    Answer. If confirmed, after reviewing the work of CFIUS, I would 
determine whether I believe a CFIUS review is needed. I am happy to 
review this issue with your office.

    Question. Does ExxonMobil's involvement in deals with Rosneft 
present any concern for you given our potential new Secretary of State?

    Answer. I believe the President's decision to nominate Rex 
Tillerson is an excellent choice for Secretary of State and have every 
confidence that he will hold paramount the interests of the United 
States and the American people.

    Question. Iran remains designated by the Department of State as the 
leading state sponsor of terrorism, and it continues to aid terrorist 
groups like Hezbollah and Hamas that directly threaten the United 
States, our interests, and our allies. Congress and the executive 
branch have imposed a comprehensive and restrictive network of 
sanctions designed to stop the flow of cash to and from known 
individuals and entities involved in Iran's sponsorship of terrorist 
networks, weapons trafficking, and nuclear proliferation and human 
rights abusers.

    How will you ensure that these sanctions are enforced?

    Answer. As Treasury Secretary, I will act to vigilantly enforce all 
existing sanctions against Iran--including with respect to its 
sponsorship of terrorism, nuclear proliferation, abuse of human rights, 
and other illicit activities. I will ensure that the Office of 
Terrorism and Financial Intelligence is making every effort to enforce 
existing sanctions and coordinating with the U.S. Department of Justice 
and other U.S. law enforcement agencies and the Intelligence Community 
to execute a ``whole of government'' approach to enforcement of 
existing sanctions against Iran.

    Question. What steps will you take to strengthen these sanctions 
and ensure that American companies comply with laws put in place to 
stop money from going to sponsors of terrorism?

    Answer. I will ensure that the Office of Terrorism and Financial 
Intelligence is making every effort to enforce existing sanctions and 
coordinating with the U.S. Department of Justice and other U.S. law 
enforcement agencies and the Intelligence Community to execute a 
``whole of government'' approach to enforcement of existing sanctions 
against Iran. I will also work with the President to ensure that 
Treasury is engaged in meaningful consultation with the Congress to the 
extent existing sanctions require modification or strengthening to 
combat sponsors of terrorism.

    Question. As the Departments of State and Treasury continue to make 
determinations about known sponsors of terrorism or human rights 
violators, will you impose further sanctions on individuals and 
entities?

    The Iran's Islamic Revolutionary Guard Corps (IRGC) plays an 
outsized role in virtually every sector of the Iranian economy. 
Numerous sanctions remain in place on the IRGC and affiliated entities 
related to proliferation concerns, human rights violations, and 
ballistic missile development. Last October, the Treasury Department 
issued guidance stating that it is ``not necessarily sanctionable'' for 
foreign persons to engage in transactions with an entity that is 
``controlled in whole or in part'' by the IRGC. Do you support this 
position? Or would you look to revises the guidance?

    Last year, Treasury finalized a rule requiring banks to identify 
the beneficial ownership of companies they do business with. As part of 
the rule, an entity that has a 25% stake in the company must be 
identified. When it comes to the IRGC, the standard to determine 
ownership or control of a company is still 51%. Do you agree with this 
threshold?

    Answer. If confirmed, I intend to vigilantly enforce existing 
sanctions, including continuing to make determinations and imposing 
sanctions on individuals and entities as appropriate under Treasury's 
authorities.

    Question. Secondary sanctions proved to be one of the most 
effective mechanisms we have to fully isolate countries like Iran from 
gaining access not only to American financial markets capitol, but also 
to European markets and companies.

    How will you work with our allies to ensure that they comply with 
existing networks even as they seek to do business with Iran?

    Answer. If confirmed, I intend to coordinate with the Secretary of 
State on the administration's efforts to engage with the international 
community regarding the need to vigilantly enforce the Joint 
Comprehensive Plan of Action, and to remind other nations that waived 
secondary sanctions remain available for re-imposition by the United 
States in the event that Iran fails to comply with its commitments. The 
Congress's December 2016 reauthorization of the Iran Sanctions Act with 
overwhelming bipartisan majorities emphasized to the international 
community that powerful secondary sanctions remain a viable and 
available tool for the foreseeable future with respect to Iran's 
compliance with the JCPOA. I will also coordinate with finance 
ministers around the globe and continuously remind them of their 
respective nations' obligations to assist the United States in 
effectively enforcing the JCPOA.

    Question. In November 2011, the U.S. Government designated Iran and 
its entire financial sector--including its central bank--a 
``jurisdiction of primary money laundering concern.''

    Has anything fundamentally changed in how Iran behaves regarding 
money laundering?

    Answer. If confirmed, I will carefully consider all available 
information and make an assessment as to whether anything has 
fundamentally changed with respect to the 2011 designation of Iran as a 
jurisdiction of primary laundering concern.

    Question. Has Iran addressed the concerns we laid out in 2011?

    Answer. If confirmed, I will carefully consider all information and 
make an assessment regarding whether Iran has fully and effectively 
addressed the concerns set forth by the United States in 2011.

    Question. What actions would Iran have to take in order to 
alleviate the concern that its financial institutions were engaging in 
illicit activity?

    Answer. If confirmed, I will make a careful and deliberate 
assessment of the actions required for Iran to alleviate concerns about 
illicit activity by its financial institutions and advise the President 
and National Security Council accordingly.

    Question. How would you classify the level of financial crimes and 
sanctions risk of doing business in and with Iran?

    Answer. I am not in a position at this time to provide a 
classification of financial crimes and sanctions risk of doing business 
with Iran, but commit that if I am confirmed as Treasury Secretary, I 
will assess all information available to me to make such an assessment 
and advise the President and the National Security Council in that 
regard.

    Question. Given the designation as a ``primary money laundering 
concern'' we're talking about the need for Enhanced Due Diligence for 
any and all financial activities, at a minimum, correct?

    Answer. Given the designation of Iran as a primary money laundering 
concern, it is prudent for any individuals or entities engaging in 
authorized dealings with Iran to ensure they have adequately assessed 
the risks of such activity and take all appropriate steps to mitigate 
those risks accordingly.

    Question. How do we plan to ensure that Iran doesn't game the FATF 
system and simply go through the motions of compliance with no real 
impact on the risks of their financial system and effectiveness of 
their AML/CFT regime?

    Answer. I am not in a position at this time to describe the 
administration's plans to ensure that Iran is not gaming the system or 
is instead undertaking steps to provide transparency in its financial 
system, but commit that if confirmed as Treasury Secretary to dedicate 
all of Treasury's tools and resources to the administration's efforts 
in that regard. Transparency in the Iranian financial system is 
critical to verifying an effective anti-money laundering and counter 
terror finance regime.

    Question. Can a state sponsor of terror ever be a trusted financial 
player in the international financial system?

    Answer. If confirmed, I will coordinate with the President and the 
National Security Council to vigilantly enforce all existing sanctions 
against Iran--including with respect to its sponsorship of terrorism, 
until such time as the United States determines that Iran is no longer 
a state sponsor of terror.

    Question. Glencore, a Swiss-based commodity trading and mining 
company and Qatar's sovereign wealth fund, in December bought 19.5 
percent of Russian state-owned and American-sanctioned company Rosneft. 
We are still learning details of the transaction, but it appears there 
was a bond sale by Rosneft to raise money which was then reinvested as 
loans issued by Russian banks to the foreign investors. Depending on 
how the deal was structured, this could have created a tremendous 
financial windfall for the Putin regime.

    Given that our Treasury Department is currently investigating the 
sale, would you commit to continuing this investigation?

    Answer. I am not in a position to comment on the details of an 
ongoing investigation by the Treasury Department. However, if confirmed 
as Treasury Secretary, to the extent the Treasury Department is in the 
course of an investigation related to economic sanctions I will not, 
nor will any political appointee in the Treasury Department under my 
watch, attempt to influence, direct, or prevent any outcome to a law 
enforcement investigation other than what the facts and evidence 
support.

    Question. If the transaction is ultimately found not to have 
violated U.S. sanctions, would you agree with me that we need to 
tighten the statute to ensure that Russia is unable to access foreign 
financing unless it reverses the belligerent actions which spurred the 
sanctions in the first place?

    Answer. I am not in a position to comment on the details of an 
ongoing investigation by the Treasury Department and whether or not a 
particular transaction may be found to violate U.S. sanctions. As 
Treasury Secretary, I will work with the President to implement and 
enforce sanctions as necessary to promote the President's national 
security objectives.

    Question. Treasury's Under Secretary for Terrorism and Financial 
Intelligence David Cohen indicated in 2014 that Qatar and Kuwait were 
permissive jurisdictions for terror finance and that Qatar was granting 
legal impunity to U.S.-designated al-Qaeda financiers. Since then, 
there is no visible indication that either government has convicted 
even a single individual, in person or in absentia, who is under 
counterterrorism sanctions by the United States or the UN.

    What would you do as Treasury Secretary to motivate U.S. allies 
that refuse to take effective legal action against a broad swathe of 
terrorist financiers who have operated inside their territory?

    Answer. The President has indicated his intent to undertake every 
effort to defeat ISIS, and as Treasury Secretary, I will ensure the 
Department is focused on detecting, exposing, and eliminating terror 
groups' funding networks--including by engaging and collaborating 
through the Office of Terrorism and Financial Intelligence with other 
nations' financial intelligence units to expose and eliminate these 
networks. I will coordinate with finance ministers around the globe to 
work with the United States on dedicating their respective nations' 
resources to isolating these terror financiers and bringing them to 
justice. We will also coordinate with the U.S. Department of Justice, 
the IC, and other parts of the United States national security 
apparatus to execute a ``whole of government'' approach to paralyzing 
terror groups' financing activities.

    Question. There is an ongoing debate on how reliable an ally China 
is in countering North Korean weapons proliferation. Do you believe 
that we should work through Beijing to stop North Korea's nuclear 
weapons and ballistic missile programs or should we look to sanction 
persons and banks in China aiding these programs?

    Answer. A ``whole of government'' approach by the United States 
will be most effective in countering North Korea's nuclear weapons and 
ballistic missile programs. Among other things, this approach must 
include vigilant enforcement of all existing sanctions imposed by 
Executive order and /or legislation involving North Korea; examination 
and development by the Office of Terrorism and Financial Intelligence 
of additional potential sanctions targets; diplomatic engagement with 
China to assist the United States in deterring and impeding these North 
Korean activities; and consultation and collaboration with the Congress 
regarding other steps that might be taken in this regard.

    Question. While responding to questions regarding then President-
elect Trump's Tax Plan that you helped craft, you stated that: ``. . . 
there will be no absolute tax cut for the upper class. . . .'' Despite 
this pledge, estimates by both the Tax Foundation and Tax Policy Center 
indicate that the top \1/10\ of 1 percent of the Nation would receive a 
huge windfall.

    Do you plan to revise the President's tax plan so it is consistent 
with this pledge?

    Answer. In working with Congress, we will make sure that the 
primary focus of the tax plan is a middle-income tax cut, tax 
simplification, and more competitive tax rates for U.S. business so 
they can compete effectively.

    Question. You have advocated changing the way the cost of tax 
legislation is calculated or ``scored'' for the purposes of analyzing 
its impact on the budget. But as you know, different so-called 
``dynamic scoring'' models produce a wide range of results depending on 
what assumptions are made. The Joint Committee on Taxation (JCT) is a 
non-partisan, highly respected institution that provides members of 
Congress and the general public with objective analysis regarding the 
``cost'' of tax legislation.

    Do you commit to respecting their independence and pledge to 
refrain from exerting any pressure on JCT and their chosen model of 
scoring?

    Answer. The Joint Committee on Taxation has been an important 
participant in and contributor to the tax reform process. I will work 
with all congressional committees, including JCT and the Committee on 
Ways and Means, the Committee on Finance, and the leadership of the 
House and Senate, to develop tax legislation.

    Question. Do you commit to accepting JCT's model as the final say 
for scoring purposes?

    Answer. I will work with all congressional committees, including 
JCT and the Committee on Ways and Means, the Committee on Finance, and 
the leadership of the House and Senate, to develop tax legislation.

    Question. In terms of distributional impact of a tax plan, one 
large variable is who bears the burden of the corporate tax: the worker 
or the shareholder.

    Do you believe workers or shareholders effectively pay a larger 
portion of the U.S. corporate tax?

    Answer. The shareholder pays the tax; however, the burden of high 
taxes also impacts workers, jobs, and wages.

    Question. Sometime next year, Congress will face a decision whether 
or not to increase the Nation's debt limit in order for Treasury 
Department to continue paying our Nation's bills. Back in 2011 when 
congressional Republicans held the debt limit hostage, we saw a 
downgrade in the U.S. credit rating, and consumer confidence plummeted. 
When I questioned Federal Reserve Chair Janet Yellen last year about 
the consequences of what would happen if we didn't pay our debts in 
full, she responded clearly and forcefully warned us of the dire 
consequences. I quote:

        ``U.S. Treasury securities are the safest and most liquid 
        benchmark security in the global financial system. They play a 
        critical role in our financial markets, and the consequences of 
        such a default, while they're uncertain, I think there can be 
        no doubt that it would be in the long run harmful to U.S. 
        interests. At a minimum, it would result in much higher 
        borrowing costs.''

    Question. Is it possible for the U.S. to renegotiate its sovereign 
debt without defaulting?

    Will you go to Congress and advocate to have the Debt Limit 
increased so we can pay our debts?

    Answer. As I stated during my confirmation hearing, I believe the 
debt limit should be raised. I believe the United States should honor 
its debts.

    Question. President Trump has previously boasted that his 
Presidency would result in 4- to 5-percent GDP growth per year and 
create 25 million jobs in the next decade.

    What is your prediction for annual GDP growth and job creation over 
the next 4 years?

    Do you believe President Trump will create as many jobs as 
President Obama did on an annual basis?

    Answer. It is my belief that our economy will grow significantly in 
this administration, and will benefit American families and workers 
that have been displaced and left behind under previous policies.

                                 ______
                                 
              Questions Submitted by Hon. Thomas R. Carper
    Question. President Trump has proposed several tax reform plans, 
all of which would drastically cut taxes on wealthy individuals. 
Studies of President Trump's revised tax reform plan found that the 
largest benefits, both in dollar amounts and in percentage terms, would 
accrue to the highest-income households. According to an analysis by 
the Tax Policy Center, the Trump tax reform plan by itself would also 
raise taxes on middle class families with children, in large part 
because it would repeal the personal exemption for children and force 
single parents with children to file as singles and so forfeit the more 
generous standard deduction they currently receive. The Trump proposal 
does this while simultaneously delivering massive tax cuts to the 
highest-income taxpayers and businesses. TPC's analysis also notes that 
the incoming President's proposed child care deduction and tax credit 
fails to compensate families for these other lost tax benefits.

    At the same time, Mr. Mnuchin, you have stated that, ``Any 
reductions we have in upper-income taxes will be offset by less 
deductions so that there will be no absolute tax cut for the upper 
class.'' Can you explain precisely what you mean--regarding both the 
definition and your proposed policy framework--by ``absolute'' tax cut?

    Answer. If confirmed, I look forward to working on measures that 
lower the tax burden on the middle-class and working families.

    Question. You have repeatedly mentioned that a middle-class tax cut 
is the centerpiece of your tax reform. What middle-class taxes do you 
actually intend to cut?

    Answer. President Trump made it clear throughout the campaign that 
his commitment was to tax relief for the middle class. If confirmed, I 
will work with President Trump and Congress to ensure that middle-class 
families are not further burdened by higher taxes.

    Question. As noted above, you have repeatedly mentioned that a 
middle-class tax cut is the centerpiece of your tax reform. Will these 
middle-class tax cuts make up for the premium tax credits that will be 
lost to ACA repeal?

    Answer. If confirmed, I will work with the Secretary of Health and 
Human Services to determine the economic impact of any changes to ACA.

    Question. The incoming administration has promised to repeal the 
Affordable Care Act. To help leverage health coverage for 20 million 
Americans who would otherwise go without health care, the ACA levies a 
number of taxes on couples who earn more than $250,000. This includes a 
0.9 percent payroll surtax on income earned over $250,000 and a similar 
3.8 percent surtax on net investment income. Do you agree that 
eliminating these specific tax provisions within the ACA would reduce 
the taxes paid by high income individuals--while depriving the ACA with 
a source of funding and providing no tax relief to working families?

    Answer. The President's top priorities include tax relief for the 
middle class and health care that is both affordable to working men and 
women and for which deductibles are no longer prohibitive to their 
ability to access it. I share the President's commitment and will work 
diligently with him and Congress to ensure that these goals are met.

    Question. President Trump's plan indicated that itemized deductions 
for high-
income individuals would be limited somehow. Could you please state 
three specific tax deductions or tax breaks that you plan to eliminate, 
which would help achieve the stated goal of avoiding ``absolute tax 
cuts for the upper class''?

    Answer. If confirmed, I will work with the tax-writing committees, 
Congress, and the staff at Treasury to advise the President on the best 
course of action for the American taxpayer.

    Question. Unlike political campaigns, we in Congress are 
constrained by budgetary reality, however painful. The budgetary 
reality is, any reasonable limit on popular high-income tax deductions 
for wealthy people doesn't provide nearly enough revenue to offset the 
scale of the tax rates you're proposing for those same wealthy 
taxpayers.

    If, as Congress and the administration are crafting tax reform, it 
turns out that curtailing deductions neither raises sufficient revenue 
nor ensures that the tax code remains as progressive as it is now, what 
will be your proposed solution?

    Answer. I will work with Congress to make sure that Tax Reform's 
primary focus grows the economy, jobs, and incomes for hardworking 
Americans.

    Question. If Congress ultimately passes a tax reform package that 
includes proportionately more tax cuts for wealthy individuals relative 
to middle-class families--either as a percentage of the tax cut or as a 
percentage of after-tax income of individuals or couples filing 
jointly--will you recommend to President Trump that he veto that 
legislation?

    Answer. We are committed to enacting tax reform that grows the 
economy, jobs, and incomes for hardworking Americans. We believe that 
the higher growth resulting from tax reform, reduced regulation, and 
eliminating the trade deficit will generate significant additional 
revenue.

    Question. As noted above, President Trump has proposed several tax 
reform plans, all of which would substantially increase annual deficits 
and total U.S. debt. The plans released would increase the public debt 
between $2.6 and $10 trillion, even after accounting for macroeconomic 
effects. A likely result from this massive expansion in debt is an 
increase in interest rates. What is the administration's plan to 
address the increase in borrowing costs for homebuyers, college 
students, and businesses?

    Answer. Several of the President's economic proposals have 
addressed the current and anticipated problems caused by yearly 
deficits and increased Federal debt on American taxpayers. If 
confirmed, I plan to work with the President and Congress to see that 
taxpayers are not forced to bear an incessant burden from an ever-
increasing Federal debt load.

    Question. Given that President Trump has repeatedly expressed 
concern over the public debt, would the administration reconsider 
deficit-financed tax cuts when confronted with the reality that an 
increase in borrowing costs will also affect the Federal Government, 
which would be required to allocate a larger and larger portion of 
current revenues to financing debt?

    Answer. The President has spoken frequently about the problems 
associated with increased borrowing costs, and I share your and the 
President's concerns about this issue. If confirmed, I will work with 
all stakeholders to make sure that this issue is less of a burden to 
taxpayers.

    Question. Last year, President Trump offered a range of comments 
regarding the national debt. After first suggesting that as President 
he would ``renegotiate'' the national debt, he then later variously 
suggested that Treasury bonds might be alternately ``discounted'' or 
subject to a ``buy back'' or even ``refinanced'' with longer terms. As 
Treasury Secretary, you may be the official who is tasked by President 
Trump with somehow restructuring U.S. debt. Do you believe that 
renegotiating or otherwise restructuring U.S. debt would be perceived 
as a default?

    Answer. I am confident that the President supports the full faith 
and credit of the debt of the United States, as do I.

    Question. With reference to the preceding question, it is difficult 
to predict with certainty what the actions of any President will be. If 
President Trump orders you to somehow restructure or renegotiate U.S. 
debt, what will your response be? Will you comply with such a request?

    Answer. As I have indicated in my proceeding response, I am 
confident that the President and the Treasury will support the full 
faith and credit of the United States and hence commenting on this 
hypothetical circumstance is not necessary.

    Question. With reference to the preceding two questions, if you 
were to receive and attempt to comply with such an order from President 
Trump to somehow restructure U.S. debt, would such debt-restructuring 
be limited to addressing debt held by other sovereign nations, or would 
Treasury bonds held by Americans also be subject to changes?

    Answer. The United States has always treated domestic and non-
domestic holders of our debt equally as part of our commitment to our 
full faith and credit support of our obligations. As a result, I do not 
see the need to offer further comment on this hypothetical 
circumstance.

    Question. With reference to the previous three questions, if you 
were to receive and attempt to comply with such an order from President 
Trump to somehow restructure U.S. debt, please outline a concrete plan 
as to how you would proceed, step-by-step, to restructure U.S. debt.

    Answer. Please see responses to the two previous questions.

    Question. The suspension in the debt ceiling enacted in 2015 is set 
to be reinstated on March 16th of this year. It is crucial that the 
Federal Government be able to meet its legal, financial obligations in 
full and on time. However, one of your fellow nominees, Mick Mulvaney, 
who President Trump has nominated to be OMB Director, disagrees, 
arguing that breaching the debt ceiling is not much of a concern.

    Can you tell us, will President Trump call upon Congress to enact a 
clean increase in the debt ceiling at the appropriate time?

    Answer. The timely enactment of the debt ceiling limit in early 
2017 is an important priority for the administration. Delay on this 
matter should not be linked to budgetary and other considerations 
facing Congress, as the debt limit merely addresses funding the 
obligations that the United States has already incurred and does not 
address future budgetary commitments.

    Question. If Congress does pass a clean increase in the debt 
ceiling, what will be your advice to President Trump? Will you 
recommend he sign or veto such legislation?

    Answer. See response to previous question.

    Question. If the debt ceiling is not raised at the appropriate 
time--either because of a Presidential veto or Congress fails to act--
what specific actions will you as the Secretary of the Treasury take to 
ensure the full faith and credit of the United States?

    Answer. If confirmed, my responsibility as Secretary would be to 
pursue all means available to the Treasury to meet this commitment, 
including historic extraordinary measures that have been employed by 
necessity in the past.

    Question. In September and October of last year, President Trump 
stated, ``It's time to establish a national goal of reaching 4-percent 
economic growth'' per year, and at other times suggested that ``I 
actually think we can go higher than 4 percent. I think you can go to 5 
percent or 6 percent.'' Can you briefly outline for us the 
administration's detailed proposals that can be shown empirically to 
achieve such high rates of growth?

    Answer. We have abundant examples from American history about what 
works and does not work. To achieve high rates of real, sustainable 
economic growth, tax and regulatory reform must be pro-growth in design 
and execution.

    Question. As noted above, President Trump has set a national goal 
of no less than 4-percent economic growth. You have indicated 3- to 4-
percent growth. The single percentage point difference between 
President Trump's minimum threshold (4 percent) and your minimum 
threshold (3 percent) is no small matter, but rather, is a difference 
of $180 billion per year. My question has three parts.

    First, are you in disagreement with President Trump as to how much 
growth is possible?

    Answer. I agree fully with President Trump about America's economic 
potential. It's time that we reform our broken tax code and our 
dysfunctional regulatory system to unleash that potential.

    Question. Second, what proposed policies or circumstances would 
account for such a large 1-percent difference in economic growth rates?

    Answer. We have seen many circumstances at 4 percent or higher.

    Question. Third, can you articulate a rationale for why President 
Trump is revising downward the growth levels that he articulated in 
during 2016?

    Answer. Nothing has changed. Predicting economic growth is always 
difficult. But again, we know what works and doesn't work, and we are 
committed to unleashing the potential of the American economy to 
achieve high and sustainable rates of growth.

    Question. With reference to the previous two questions, is the 
incoming administration targeting 3- to 4-percent growth in each of the 
next few years, once President Trump-signed legislation goes into 
effect?

    Answer. To benefit all Americans, President Trump is committed to 
maximizing the economy's long-run, sustainable growth rate.

    Question. With reference to the previous three questions, if the 
Trump administration fails to achieve 4-percent, or even 3-percent, 
growth that's been promised in each year, will it be your assessment 
that the administration has failed to achieve one of its central policy 
objectives? How should the American people hold the administration 
accountable for such a failure?

    Answer. Our goal is to maximize economic growth.

    Question. As noted above, the incoming administration has stated a 
goal of achieving 3- to 4-percent economic growth per year. As you 
know, population growth is a major component in GDP, and so slowing 
population growth therefore presents a significant constraint on 
achieving higher growth rates. One solution to this problem is 
providing sufficient legal channels for immigrants to come or stay and 
work in this country through immigration reform.

    As you may know, the nonpartisan Congressional Budget Office 
projected that the comprehensive immigration reform bill that passed 
the Senate in 2013 would increase GDP by 3.3 percent in 10 years, and 
by 5.4 percent in 20 years. Yet, despite the economic growth potential 
represented by an increase in immigration levels, some in the incoming 
administration have demonstrated antipathy toward immigration and 
immigrants from a broad range of nationalities and backgrounds.

    Would you agree that boosting immigration levels could help achieve 
a higher economic growth rate?

    Answer. The President has repeatedly stated his support for legal 
immigration.

    Question. In reference to the immigration question above, setting 
aside the many moral and decency arguments in favor of immigration 
reform and focusing solely on the economy for a moment, how would you 
work to reconcile the incoming administration's antipathy toward higher 
levels of immigration with the goal of achieving high rates of economic 
growth?

    Answer. The President has reiterated his belief that American 
sovereignty requires adherence to immigration laws that have been 
passed by Congress. If confirmed, I will work with Congress and the 
professionals at Treasury to help make sure that the economy works for 
all U.S. citizens.

    Question. I'm a strong proponent of clean energy technologies, both 
as a source of job creation and as means of reducing dependence on 
fossil fuels. In 2015, the tax credits supporting solar and large wind 
technologies were extended. However, left behind were companion 
technologies also found in section 48 of the tax code, including 
advanced fuel cells, combined heat and power, geothermal heat pumps, 
small wind technologies, and microturbines.

    These tax credits were designed to support manufacturing jobs by 
offering economically efficient incentives at a relatively low revenue 
cost. Yet, these credits have been allowed to expire.

    Emerging, cutting-edge energy companies require predictable tax 
incentives for research and development, capitalization, and cash flow 
reasons.

    This is especially true for transitioning technologies that have a 
long lead time to installation--such as fuel cells, which provide 
reliable, off-grid power for first responders, manufacturers, and 
retail companies. Because of the tax uncertainty created by Congress, 
new energy technologies are seeing a boom and bust investment cycle, 
which is not good for economic growth or for our energy infrastructure.

    Can you tell us how will you work with Congress to extend the 
credits for these crucial technologies that have bipartisan support?

    Answer. If confirmed, I will get fully briefed on these bipartisan 
proposals and will work with the professional staff at Treasury and 
with Congress to support solutions.

    Question. The incoming administration has promised to repeal the 
Affordable Care Act, which provides a tax credit to small businesses 
for providing health insurance to their workers. Do you agree that 
eliminating this tax credit would increase taxes for small businesses 
who are trying to do the right thing by helping their workers secure 
health insurance?

    Answer. The President has made affordable, accessible health care a 
priority in his administration, and I look forward to working with 
Congress and the President to achieve this goal.

    Question. As noted above, the incoming administration has promised 
to repeal the Affordable Care Act, which provides a tax credit to small 
businesses for providing health insurance to their workers. Before 
eliminating this tax credit, do you agree that we should ensure that 
the workers employed by the small businesses using this credit to 
provide health insurance will not be left in the cold without access to 
insurance and health care?

    Answer. If confirmed, I will work with the President to ensure that 
Treasury's role in any change to current law is supportive to these 
goals.

    Question. In an interview shortly after your selection as the 
President's nominee for Treasury Secretary, you said that you looked 
forward to working with House Financial Services Chairman Jeb 
Hensarling on Dodd-Frank issues. Chairman Hensarling has been quoted as 
saying that he believes Dodd-Frank has been a failure. Do you believe 
that Dodd-Frank has failed to make the financial system safer?

    Answer. If confirmed, I look forward to working with Chairman 
Hensarling and other members of the House and Senate to develop 
legislative solutions that improve U.S. financial system stability.

    Question. Last year, Mr. Hensarling introduced a bill, the 
Financial Choice Act, to roll back some of Dodd-Frank's most important 
provisions. Mr. Hensarling has given every indication that he plans to 
reintroduce the Financial Choice Act in the 115th Congress. Do you 
support the Financial Choice Act as introduced last Congress? If sent 
to the President's desk would you recommend he sign such legislation?

    Answer. If confirmed, I look forward to working with Chairman 
Hensarling in discussing his bill and working with members of Congress 
to ensure that financial regulatory reform legislation consistent with 
the President's objectives is signed into law.

    Question. Throughout the campaign, now-President Trump vowed to 
dismantle Dodd-Frank. What parts of Dodd-Frank would you recommend the 
President dismantle?

    Answer. I would advise the President and members of Congress on 
rules that undermine economic growth and job creation. A particular 
focus should be placed on reducing the regulatory costs faced by 
community financial institutions, and making sure that small and medium 
sized business have access to credit.

    Question. Do you support the current Dodd-Frank provision 
eliminating the ability of the government to dismantle failed banks?

    Answer. I am supportive of comprehensively reviewing all bank 
resolution regulations and practices in order to ensure the costs of 
failure are appropriately shifted to bank equity and subordinated debt 
investors and away from the taxpayers.

    Question. Do you support repealing the Consumer Financial 
Protection Bureau's explicit authority to protect consumers from 
abusive acts and practices?

    Answer. If confirmed, as Chair of FSOC, I look forward to 
addressing this regulatory issue.

    Question. Do you support curtailing the powers of the Financial 
Stability Oversight Council, a council you would chair if confirmed?

    Answer. I support a comprehensive review of the FSOC's powers and 
institutional processes in order to identify opportunities to improve 
the Council's ability to achieve its statutory responsibilities to 
identify risks to the financial stability of the United States, promote 
market discipline, and respond to emerging threats to the stability of 
the United States financial system.

    Question. As Chairman of the Financial Stability Oversight Council 
(FSOC), what sorts of changes would you seek in how the Council 
operates?

    Answer. The Council's operations are guided by statutory 
responsibilities to identify risks to the financial stability of the 
United States, to promote market discipline, and to respond to emerging 
threats to the stability of the United States financial system. If 
confirmed, I will work with colleagues on the Council to ensure these 
objectives are met, as well as, consider any needed changes.

    Question. The Treasury Department exerts considerable influence 
both directly and indirectly over significant portions of the U.S. 
economy, including areas that affect the emissions of greenhouse gases. 
As such, major problems can be partially address via Treasury actions. 
If you become Secretary, what measures will Treasury take in order to 
address the significantly and growing problem of climate change?

    Answer. If confirmed, I will work with Congress to ensure that 
Treasury's work is consistent with the administration's goals on the 
environment.

    Question. Economic studies are increasingly finding a growing 
disparity between the ``return on capital'' and the ``return on 
labor.'' What is your assessment of tax reform plans that would further 
exacerbate the rate differential between capital gains and ordinary 
income? Would a cut to the top capital gain tax rate, relative to the 
top ordinary income rate, exacerbate the disparity between different 
types of income?

    How do capital gains tax cuts benefit working families in, for 
example, the manufacturing sector?

    Answer. Lower taxes on capital serve to increase private business 
investment, which is a key driver of private-sector job creation.

    Question. The last time the United States achieved greater than 4-
percent growth was during four consecutive years from 1997 through 
2000, as well as in 1994. These periods of high growth all followed the 
significant increase in marginal tax rates for high-income taxpayers, 
as well as other revenue increases, most of which were enacted in 1993. 
Similarly, revenue increases on high-income taxpayers that resulted 
from the ``fiscal cliff'' have not negatively affected growth. By 
contrast, in the years after the 2001 and 2003 tax cuts, the average 
annual growth rate hovered around 2.7 percent--before the financial 
crisis. These are real-world examples that provide supporting evidence 
for the nonpartisan findings of most economists that tax rates have a 
minor to nonexistent effect on growth. Yet the centerpiece of the 
incoming administration's plans for growth is tax reform--centered 
mainly on rate reductions.

    If tax rate-reducing tax reform is enacted, and if in the years 
that follow growth rates do not reach the 3- to 4-percent growth rate 
that you and President Trump has suggested, what conclusions would you 
draw about the relationship between marginal tax rates and economic 
growth?

    In addition, if tax rate-reducing tax reform is enacted, and if, in 
the years that follow, growth rates do not reach the 3- to 4-percent 
growth rate that you and President Trump have suggested, then as the 
Cabinet's chief economic policymaker, what will your counsel be to 
President Trump if further tax rate cuts are suggested? Will you 
continue to press for additional tax cuts?

    Answer. I agree that President Trump's plan of lower taxes, reduced 
regulation, and better trade deals will generate sufficient growth.

    Question. The current-law estate tax has the lowest tax rate and 
smallest tax base in decades. In 2013, estates valued above $20 million 
paid an average tax rate of 18.8 percent--many achieving a lower 
effective rate through tax-planning strategies. That same year, only 
120 of the 3,780 estates subject to the tax were farms and businesses--
little more than 3 percent. What is the Trump administration's plan 
regarding the estate tax?

    Furthermore, how does reduction or repeal of the estate tax--a 
windfall for individuals at the very top of the income spectrum--
benefit hardworking employees in the manufacturing sector?

    Answer. We will work closely with Congress on the estate tax as 
part of overall tax reform.

    Question. If confirmed, it will be up to you to administer the 
Nation's laws that relate to combating currency manipulation. It will 
also be your job to represent the United States at the IMF, the OECD, 
the G7 and the G20. The Nation will rely on you to use these fora to 
work with other countries to ensure that global currencies are not 
distorted by government intervention.

    The President, before and after the campaign, has promised that he 
is going to instruct you to label China a currency manipulator. This 
committee has put into law several important pieces of legislation to 
defend American jobs by combatting currency manipulation. While we all 
agree that China has in the past manipulated its currency--and may well 
do so in the future--China appears to have stopped intervening to 
devalue its currency in recent years and may even be taking steps to 
prevent depreciation. Do you disagree with that assessment?

    Answer. Currency manipulation is a serious infraction of free trade 
principles and needs to be effectively addressed. As Treasury 
Secretary, I will ensure that we defend American jobs by combating 
currency devaluation through legislative processes established by 
Congress.

    Question. It is possible that the incoming President could issue an 
executive order instructing you to name China a currency manipulator. 
This action runs the risk of undermining your credibility and the 
credibility of the United States when we seek to take on currency 
manipulation in the future. Would you advise President Trump to avoid 
taking actions that undermine the credibility of the United States?

    Answer. If confirmed, I will carry out the responsibilities of the 
Treasury in identifying currency manipulation by U.S. trading partners.

    Question. Mr. Mnuchin, as you know, the President has the authority 
to waive certain U.S. sanctions against Iran's energy sector and other 
industries if he believes Iran is complying with the Iran nuclear deal. 
As part of the deal, President Obama has exercised his authority to 
waive these sanctions. What factors would you weigh or encourage 
President Trump to consider when advising if he should waive sanctions 
as part of the Iran nuclear deal?

    Answer. The President has stated his intent to enforce the Joint 
Comprehensive Plan of Action (``JCPOA''). In December 2016, Congress 
reauthorized the Iran Sanctions Act, extending the President's 
authority to enforce sanctions against Iran for another 10 years. As 
Treasury Secretary, and in consultation with the Secretary of State, I 
will act to fully enforce all existing sanctions against Iran--
including with respect to its sponsorship of terrorism and other 
illicit activities. In the course of the President's national security 
advisors providing him information indicating the degree to which Iran 
is complying with the terms of the JCPOA, I will advise the President 
on the options available to him under the various Iran-related 
sanctions authorities to either continue waiving certain sanctions or 
to reimpose waived sanctions.

    Question. The U.S. intelligence community and the International 
Atomic Energy Agency continue to monitor Iran's compliance of the 
nuclear deal. If both of these entities assess that Iran is largely 
upholding its obligations, would you recommend the United States 
continue to waive U.S. sanctions currently waived under the nuclear 
deal?

    Answer. The President has stated his intent to enforce the JCPOA. 
As Treasury Secretary, and in consultation with the Secretary of State, 
I will act to fully enforce all existing sanctions against Iran--
including with respect to its sponsorship of terrorism and other 
illicit activities. To the extent the President's national security 
advisors have information from the IAEA or the IC indicating that Iran 
is complying with the terms of the JCPOA, then I will advise the 
President accordingly on whether currently waived sanctions should 
remain as such.

    Question. Broadly speaking, beyond the Iran nuclear deal, do you 
believe it is within U.S. national security interests to levy 
additional or fewer sanctions against Iran at this time?

    Answer. The President has stated his intent to enforce the JCPOA, 
and Congress recently extended for another 10 years the authorities to 
impose and enforce sanctions against Iran in the Iran Sanctions Act. As 
Treasury Secretary, and in consultation with the Secretary of State, I 
will act to fully enforce all existing sanctions against Iran--
including with respect to its sponsorship of terrorism and other 
illicit activities--and to advise the President on whether additional 
actions may be necessary to combat Iran's activities outside the scope 
of the JCPOA.

                                 ______
                                 
             Questions Submitted by Hon. Benjamin L. Cardin
    Question. During the confirmation hearing, I asked you about 
President Trump's potential conflicts of interest. I would like to 
follow up on that question. As you know, I am very concerned about 
possible conflicts of interest with our foreign economic policy that 
may arise from our President's overseas business arrangements. If 
confirmed, you will be handling some of the most sensitive and 
significant negotiations between our country and the rest of the world.

    Without financial disclosures by the President, do you have enough 
information to avoid conflicts between President Trump and our national 
interest?

    Answer. Avoiding conflicts of interest is important. I will work 
with the professional ethics staff at the Department of the Treasury to 
ensure that conflicts are avoided.

    Question. For decades, the United States has led a network of 
international institutions, from the World Bank to the IMF to what is 
now the WTO. They are far from perfect, but they have helped to foster 
international coordination in crises from Asia in 1997 to the global 
economic collapse of 2008. They have worked to establish guidance and 
support for countries in financial crisis, to monitor economies and 
trends. And they have promoted predictability and rules for the conduct 
of international trade and finance, as well as forums for seeking 
important agreements.

    Do you agree that these institutions are important to not only our 
trade and finance, but to our global leadership?

    Answer. I agree that the United States has worked closely with many 
international institutions over the course of many years. If I am 
confirmed, I will work to ensure that all of our international and 
multinational relationships advance the interests of the American 
people and promote job creation and opportunity in America.

    Question. As we discussed in your confirmation hearing, when you 
were nominated last November, you stated that ``[a]ny reductions we 
have in upper-income taxes will be offset by less deductions so that 
there will be no absolute tax cut for the upper class.''

    As far as I can tell from available estimates by the Tax Policy 
Center of President Trump's tax plan, the top 0.1 percent (in terms of 
cash income percentile) would receive an average tax cut of over $1 
million. Those in the top 1 percent would receive an average tax cut of 
over $200,000. Tax Foundation modeling also shows that the top 1 
percent would have an increased after-tax income, using static scoring, 
of at least 10.2%.

    What deductions would you repeal or amend to counteract this tax 
cut to upper-income households?

    Could you please share the calculations your team has undertaken to 
make sure that the tax cut for the upper class will be fully offset by 
your changes?

    If you disagree with the Tax Policy Center and Tax Foundation 
estimates on the tax cuts upper-income householders receive, could you 
please share the calculations your team has undertaken to show how 
their taxable income would change?

    If you don't have specific calculations, could you please explain 
why you believe your plan does not contain an absolute tax cut for the 
upper class?

    Answer. President Trump's objective is to pass tax reform that 
grows the economy and benefits all Americans. If confirmed, I will work 
with President Trump and Congress to ensure that middle-class families 
are not further burdened by higher taxes.

    Question. With respect to middle-class tax cuts, you've stated: 
``When we work with Congress and go through this, it will be very 
clear. This is a middle-income tax cut. And the child care credit is a 
big aspect of this.'' At the hearing, we discussed how important it 
was, to both of us, that any changes to the tax code result in a system 
that is at least as progressive as current law. I'm concerned by 
analyses by the Tax Policy Center, which show that President Trump's 
tax reform plan would raise taxes of middle-class families with 
children.

    Could you please provide me with specifics of what middle-income 
taxes you intend on cutting?

    Answer. If confirmed, I will work with you to ensure that we do the 
best possible job of helping middle-class working families and 
individuals.

    Question. Could you please share the calculations that your team 
has undertaken to make sure that your plan will be at least as 
progressive as the current income tax system?

    Answer. At this time, we do not have any specific calculations to 
share. We will work with Congress to ensure that tax reform results in 
an appropriate distribution of the tax burden.

    If confirmed, I will make sure you have the proper analysis of any 
proposed plan.

    Question. In your hearing, you discussed the importance of economic 
growth in offsetting the revenues lost under the President's tax reform 
plan. In previous statements, you've also implied that through this 
economic growth, higher revenues from individuals would finance 
business tax cuts. For instance, you've said, ``[s]o we think that by 
cutting corporate taxes, we'll create huge economic growth and we'll 
have huge personal income, so the revenues will be offset on the other 
side.''

    Is it your view that the tax cuts in the President's plan will be 
fully offset by economic growth?

    Answer. Our objective is to have any tax cuts offset by economic 
growth.

    Question. If so, could you please share your team's analysis 
supporting that position?

    Answer. Our objective is to have any tax cuts offset by economic 
growth.

    Question. Will you commit, as we discussed in our meeting, not to 
put forward a plan that will increase the deficit and put our country 
in a worse financial position?

    Answer. Our objective is to have any tax cuts offset by economic 
growth.

    Question. I understand that you and others on the President's team 
have met with my Republican colleagues in the House on their tax reform 
plan, known as the ``House Blueprint.''

    Are you concerned about the criticisms that have been levied 
against the House plan with respect to increased costs to consumers? Do 
you agree or disagree with the analysis that the Blueprint will 
increase consumer costs?

    Answer. President Trump has stated his support for a tax reform 
that would benefit all Americans. If confirmed, I will evaluate any tax 
proposals in light of these criteria, and I look forward to working 
with Congress in sharing our analysis.

    Question. Many trade law experts believe that the border-adjustable 
tax embodied in the House Blueprint is not WTO-compliant.

    Are you concerned that the House Blueprint, should it become law, 
would be challenged by our trading partners and would subject U.S. 
companies to potential retaliation?

    Answer. I will work with Congress to ensure that tax reform is 
enacted that helps American companies compete and that creates, retains 
and returns jobs to our shores. As President Trump has said, our tax 
and international trade policies must work together to ensure American 
companies and workers benefit.

    Question. As you may know, the IRS has previously tried to use 
private debt collectors to collect tax debt twice in the past. In both 
instances, the agency actually lost money. According to data from the 
IRS, during the last effort, from 2006-2009, the Treasury ended up 
receiving $63.4 million in revenue but paying $67.8 million in costs 
(including commissions to private debt collection companies), resulting 
in a net loss of over $4 million.

    Of non-commission administrative costs, a significant portion was 
dedicated to protecting taxpayer data--an issue I know you are 
particularly concerned about. Using private collection agencies adds 
another, non-governmental party into a transaction and could jeopardize 
taxpayer privacy. This is exacerbated by the fact that using private 
debt collection agencies has provided another route for tax scammers to 
fraudulently obtain taxpayer data by imitating private collection 
agents.

    In addition, close to 80% of those cases that are required to be 
turned over to private collections involve taxpayers below the poverty 
limit, according to IRS data. These households are often experiencing 
extreme economic distress and so would not be able to pay this debt, 
regardless of whether the IRS or private collection agencies were the 
collection agent.

    Finally, for those taxpayers who can pay, I'd also point out that 
unlike the IRS, private collection agencies have no authority to enter 
into offers in compromise and have no access to other tools that could 
make successful collection more likely.

    Do you favor the use of private collection agencies to collect tax 
debt?

    If so, how would you address the problems mentioned above?

    Answer. I believe the IRS should be responsible for collecting most 
money due the Treasury. When there is such a large amount outstanding, 
using private agencies seems to be an appropriate solution. To the 
extent that there are problems, if confirmed, I am committed to working 
with Congress to resolve those issues.

    Question. President Trump has consistently mentioned infrastructure 
investment as a major priority for his administration. A key part of 
any effective infrastructure program should be improving our existing 
commercial and residential building stock. Energy efficiency provisions 
in the tax code, such as the energy efficient commercial buildings 
deduction (section 179D), have been shown to achieve this goal while 
creating jobs in the construction and design industry and improving the 
energy usage by buildings to the benefit of taxpayers.

    Are you willing to work with me to ensure that energy efficiency 
measures are included in any Trump administration infrastructure plan?

    Answer. If confirmed, I look forward to helping fulfill the 
President's pledge to revitalize America's crumbling infrastructure, 
including through whatever reviews and procedures fall to the 
Department of the Treasury in that process. I would look forward to 
working with your office to solicit your views and input.

    Question. During my recent meeting with you, we spoke about my 
commitment to retirement and savings issues. I believe that 
significant, bipartisan work can be done next Congress to ensure that 
all Americans have a dignified and secure retirement, including by 
expanding saving opportunities through employer-based retirement plans.

    Employer-based retirement plans like 401(k)s are a critical 
component of our Nation's retirement system. Over 60 million workers 
participate in these plans, the majority of whom are in lower- or 
middle-income households that need support in saving for retirement. 
Current tax incentives encourage employers to establish and maintain 
these savings plans as benefits for their workers, a critical decision 
factor, particularly for small business owners, who must balance a 
number of competing financial priorities.

    I also strongly support the retirement measures unanimously 
reported out of the Finance Committee last September, including the 
noncontroversial measures in the Retirement Enhancement and Savings 
Act. These smaller provisions would have a large impact on the 
promotion of retirement security and savings. For instance, with 
Senator Portman, I cosponsored an amendment that would prevent hundreds 
of thousands of defined benefit plan participants from having their 
benefits curtailed through an unintended effect of the 
nondiscrimination testing rules applicable to those plans. I also 
cosponsored amendments that would clarify current law to ensure that 
all church-related organizations have the ability to participate in 
church 403(b)(9) retirement plans, and streamline the law with respect 
to IRAs owning S Corporation shares.

    Should you serve as Treasury Secretary, I hope that we can work 
together to get these provisions across the finish line.

    More broadly, will you commit to expanding savings opportunities, 
especially for low- and middle-income Americans, in any Trump 
administration tax reform plan?

    Answer. The lack of retirement savings is a major concern for 
families across America. If confirmed, I pledge to work with Congress 
to pass comprehensive reforms that simplify the tax code and make it 
easier for families to improve their lives today and tomorrow.

    Question. President Trump has repeatedly indicated that he wants to 
address poverty and joblessness in America. He has also emphasized the 
need to help those who have lost their jobs because the company they 
were working for moved overseas as well as the desire to encourage 
businesses to relocate back to the United States.

    One of the programs for which the Treasury Department shares 
responsibility with the Department of Labor is the Work Opportunity Tax 
Credit (WOTC). WOTC helps over 1.3 million Americans find work in the 
private sector. Studies by Dr. Peter Cappelli, a Wharton School of 
Business Labor Economist, indicate that the program more than pays for 
itself in savings from entitlement programs and that employers using it 
change their hiring practices to hire those who are eligible.

    Will you work with our office to make WOTC a permanent part of the 
President's goal of reducing poverty, encouraging companies to bring 
jobs back to the United States, and helping Americans displaced by 
overseas competition?

    Answer. Bringing jobs back to the United States and helping 
American workers displaced by factories moving overseas are 
cornerstones of the President's platform, so I join you in your desire 
to encourage businesses to relocate back to the United States. If 
confirmed, I will work with you and all stakeholders to ensure that 
economic incentives are aligned to facilitate job creation and business 
relocation here in the United States.

    Question. During his campaign, the President often mentioned his 
intention to revitalize low-income urban neighborhoods and to encourage 
job creation through infrastructure investment. Credits like the New 
Markets Tax Credit program and Historic Tax Credit program have been an 
important factor in the revitalization of communities across the 
country, including in my hometown of Baltimore.

    Working with Senator Blunt, Senator Schumer and others I was 
pleased that NMTC was extended for 5 years in the bi-partisan PATH Act 
of 2015. I intend to introduce bipartisan legislation in this Congress 
to make NMTC a permanent part of the tax code.

    Since the credit was launched in 2001, $38 billion in direct NMTC 
investments were made in businesses and these NMTC investments 
leveraged over $75 billion in total capital investment to businesses 
and revitalization projects in communities with high rates of poverty 
and unemployment.

    This financing has resulted in the creation of 750,000 jobs and the 
financing of commercial and industrial facilities, day care and health-
care centers, mixed-use facilities, and small business loans, all of 
which improve local economies and the quality of life in distressed 
neighborhoods.

    In Maryland, some $800 million in NMTC capital has leveraged more 
than $2 billion in other financing for a range of projects and created 
over 25,000 construction jobs and more than 7,000 permanent jobs.

    NMTC has been an important factor in the revitalization of East 
Baltimore and the establishment of a Life Sciences Building that is a 
key element of a large effort to support business and civic leaders to 
revitalize that area. It is also a key financing source for a new 
facility at Baltimore's Maryland Institute College of Art, as well as a 
new business incubator that will foster the growth of entrepreneurial 
food vendors.

    Another infrastructure and community development program that has 
seen similar success and bipartisan support is the Historic Tax Credit. 
Working with Senator Collins, I've introduced--and plan to 
reintroduce--legislation that would encourage economic development and 
job growth across the country by making common-sense changes and 
enhancements to the Federal HTC.

    Since the creation of the credit, the HTC program has generated $78 
billion in historic preservation activity to rehabilitate more than 
41,250 historic properties, including the creation of over 525,000 
housing units, of which approximately 150,000 are low and moderate-
income units. Historic preservation programs have created more than 
2.36 million jobs nationwide since 1978 (85,058 new jobs in FY 2015). A 
recent study by the National Trust for Historic Preservation estimates 
that every $1 of credits generates a minimum of $4 of private sector 
investment.

    In Maryland, the Federal HTC has supported hundreds of projects 
that have spurred economic growth in communities around the State, 
ranging from the development of a multicultural service center to 
affordable housing units for teachers and office space for nonprofit 
educational organizations.

    Given the President's goals, do you agree that credits like the 
NMTC and HTC can play a critical role in community redevelopment and 
infrastructure?

    Can you commit to retaining these important incentives in a Trump 
administration tax reform package?

    Answer. Our objective is to grow the economy and economic 
opportunity. If confirmed, I will work with you and other members of 
Congress to ensure that the appropriate incentives are retained.

    Question. As we have discussed, IRS resources have been extremely 
constrained due to recent budget cuts. As a result, it is difficult for 
the IRS to reach many lower-income, rural, or elderly taxpayers who 
require assistance or guidance filing their tax returns.

    Last year, Volunteer Income Tax Assistance (VITA) programs made up 
for this service shortfall by helping to file returns for these 
taxpayers, returning about $56 million in refunds to just over 50,000 
Marylanders.

    Do you support Volunteer Income Tax Assistance programs and the 
role they play in helping vulnerable taxpayers promptly and accurately 
file their returns?

    Answer. I will work with your office to review the issues 
associated with Volunteer Income Tax Assistance grant programs.

    Question. Along with my colleague Senator Roberts, I have co-
authored legislation that will encourage employee ownership and the 
creation of more Employee Stock Ownership Plan (ESOP) companies. Last 
Congress, the bill had 35 bipartisan cosponsors, including 12 from the 
Finance Committee. ESOP companies are proven job creators, while also 
providing meaningful retirement savings to their employee owners.

    Will you commit to working with Congress to promote employee 
ownership and ESOPs?

    Answer. If confirmed, I commit to work with Congress to evaluate 
these proposals and any others that promote income growth and 
opportunity for working Americans.

    Question. There is a significant number of tax treaties and 
protocols pending before the Senate. These treaties are very important 
to many U.S. businesses, including companies in my home State of 
Maryland.

    Do you support the timely ratification of these treaties?

    Answer. If confirmed, I look forward to the opportunity to receive 
a more comprehensive briefing regarding any pending agreements and 
protocols, and to working with the Senate to promote international 
agreements that promote jobs, economic growth and opportunities for 
Americans.

                                 ______
                                 
               Questions Submitted by Hon. Sherrod Brown
    Question. Mr Mnuchin, in addition to Senator Heller's request for 
foreclosure data in Nevada, would you please provide a state-by-state 
breakdown of the foreclosures initiated by OneWest? Would you also 
provide a breakdown of the number of permanent HAMP modifications as 
well as the number of permanent propriety modifications that OneWest 
completed while you were chairman?

    Answer. Because I am no longer employed by or affiliated with CIT 
Group, I do not have access to this information.

    Question. Mr. Mnuchin, I understand that OneWest sent a letter to 
the OCC explaining the problems in the HECM book of Financial Freedom 
when you were seeking approval for a merger with CIT, but you 
referenced a 2015 letter that you sent to HUD. Would you provide the 
committee a copy of the letter referenced in your testimony?

    Answer. Because I am no longer employed by or affiliated with CIT 
Group, I do not have access to this information.

    Question. OneWest/CIT has had several allegations leveled against 
it for violating rules or laws administered by HUD or FHA. What 
processes or protections have you, or will you, and Dr. Carson put in 
place to ensure that HUD, FHA, and its Inspector General has a fair 
process for evaluating your former institution's dealings with HUD and 
FHA, and that HUD, FHA, and the Department of Justice are impartial and 
not influenced in an improper manner?

    Answer. Because I am no longer employed by or affiliated with CIT 
Group, I do not have access to this information.

    Question. Mr. Mnuchin, of the loans originated by IndyMac that you 
then purchased, would you provide the number of 30-year, fixed-rate 
loans; adjustable rate mortgages; 2/28 adjustable rate mortgages; and 
no documentation loans? Would you also provide the number of agency 
(Fannie Mae, Freddie Mac, FHA) loans serviced by OneWest?

    Answer. Because I am no longer employed by or affiliated with CIT 
Group, I do not have access to this information.

    Question. Mr. Mnuchin, President Trump's nominee for HUD Secretary, 
Dr. Ben Carson, raised questions about the continuation of the 30-year, 
fixed-rate mortgage in his confirmation hearing.

    Do you believe the widely available 30-year fixed-rate mortgage is 
an important aspect of our housing market?

    What would happen to home equity and home values if access to the 
30-year fixed rate decreased or if the product became more expensive?

    You mentioned that you want to seek a housing finance market 
solution that doesn't put taxpayers at risk or eliminate capital for 
the housing market. Given that retained capital at the GSEs will be 
zero a year from now, can you provide more information about a solution 
that protects taxpayers, maintains capital, and expands access and 
affordability for borrowers who can sustain homeownership?

    Answer. Because I am no longer employed by or affiliated with CIT 
Group, I do not have access to this information

    Question. On December 21, 2016, I sent you a letter asking a series 
of questions, which you have not responded to, but you have said you 
will respond to. I am submitting those questions again.

    As a former partner at Goldman Sachs, reportedly overseeing the 
mortgage trading desk, you have described structured financial products 
as ``an extremely positive development in terms of being able to 
finance different parts of the economy and different businesses 
efficiently.'' What are your views on the role these products played in 
the financial crisis of 2008? Will you be a strong defender of the 
regulatory framework created by Dodd-Frank for complex securities and 
derivatives? If not, why not?

    Answer. It has been over 6 years since the passage of Dodd-Frank, 
and it seems like an appropriate time to review all of the regulations 
from Dodd-Frank to understand their impact on the market, investors, 
small businesses, and economic growth.

    Question. As someone who purchased a failed thrift at a price 
subsidized by American taxpayers and accompanied by a generous loss 
sharing agreement provided by a government-run insurance fund, what are 
your views on the most effective ways to prevent bank failures?

    Answer. As two senior FDIC officials wrote in the January 19, 2017 
issue of the Wall Street Journal, the bid my colleagues and I submitted 
to buy the IndyMac assets was almost $1 billion more than the next best 
bid. It was the only bid that preserved the institution and its 
thousands of jobs more or less intact. As I have previously said, the 
best way to avoid bank failures in the future is to restore sound 
underwriting practices.

    Question. As chairman and CEO of a financial institution that has 
been labeled a ``foreclosure machine'' do you believe the Federal 
Government should maintain its loss mitigation and foreclosure 
prevention programs or not? Will you support the regulatory efforts of 
the Office of the Comptroller of the Currency, including those 
affecting mortgage servicers or not?

    Answer. The current modification programs are not within the 
purview of Treasury, as they are administered by HUD, FHFA, and certain 
other agencies. Treasury's Home Affordable Modification Program no 
longer accepts application from home owners. The program ended 
acceptance of applications on December 30, 2016.

    Regarding the regulatory efforts of the OCC, I will support its 
efforts to ensure that national banks and Federal savings associations 
operate in a safe and sound manner and comply with applicable laws and 
regulations, and encourage loan modifications where applicable.

    Question. As a former executive at a bank that has been accused of 
``failing to effectively market, offer, and originate mortgage loans 
and other loan products in communities of color,'' what are your views 
on the importance of fair lending laws?

    Answer. The Federal fair lending laws--the Equal Credit Opportunity 
Act and the Fair Housing Act--prohibit discrimination in credit 
transactions, including transactions related to residential real 
estate. In enacting the Equal Credit Opportunity Act of 1974, Congress 
found a need to insure that the various financial institutions and 
other firms engaged in the extensions of credit exercise their 
responsibility to make credit available with fairness, impartiality, 
and without discrimination. Congress further found that economic 
stabilization would be enhanced and competition among the various 
financial institutions and other firms engaged in the extension of 
credit would be strengthened by an absence of discrimination. I agree 
with these very important findings.

    Question. As a recent former board member of a large regional bank, 
what are your views on the proper role of regulation in overseeing 
large regional banks?

    Answer. I believe that banks that have FDIC insurance should be 
appropriately regulated. however I believe in a regulatory framework 
that is determined by complexity and activity, not simply size.

    Question. As a former executive of a bank, you know that the 
Treasury Department has been at the forefront of our Nation's national 
security policy through the use of economic sanctions and targeted 
financial measures, as you oversaw compliance efforts in this area. In 
light of the continuing threat from terrorist financing, money 
laundering, and other illicit finance risks to our financial system, 
what role do you see the Treasury Department playing in this area?

    Answer. The Office of Terrorism and Financial Intelligence marshals 
the intelligence and enforcement functions with the twin aims of 
safeguarding the financial system against illicit use and combating 
rogue nations, terrorist facilitators, weapons of mass destruction 
proliferators, money launderers, drug kingpins, and other national 
security threats.

    Question. As a hedge fund partner, will you, as Chair of the 
Financial Stability Oversight Council, continue the efforts of the 
Oversight Council to address the risks that so called shadow banks and 
other non-banks might pose a risk to the economy?

    Answer. If confirmed as Chairman of FSOC, I will review the work 
the council has done on so-called shadow banks and non-banks to analyze 
the risk that they pose to the economy.

    Question. How will your past business--and presumably social--
connections to hedge fund partners who invested in preferred shares of 
the Government Sponsored Enterprises, Fannie Mae and Freddie Mac, 
inform your views on efforts to reform those enterprises?

    Answer. My business and social connections will have no impacts on 
my view for housing reform. My views are a result of over 30 years 
experience in housing finance.

    Question. You recently stated that, ``We've got to get Fannie and 
Freddie out of government ownership. It makes no sense that these are 
owned by the government and have been controlled by the government for 
as long as they have . . . [W]e gotta get them out of government 
control.'' Please explain what you meant by this statement.

    Answer. We should work on housing reform such that Fannie Mae and 
Freddie Mac do not continue in conservatorship for the next 4 years. 
Any solution needs to make sure that we do not put the government at 
risk again while making sure the solution provides necessary liquidity 
for housing.

    Question. Finally, though the law requires that you recuse yourself 
from participating in decisions that could benefit you or your close 
family financially, what additional steps will you take to provide 
Congress and the American public confidence that you are not using the 
power of the United States Treasury to benefit your current or former 
business partners, or disadvantage their competitors?

    Answer. I will follow all rules and guidance related to standards 
of ethical conduct for employees of the Department of the Treasury and 
the executive branch, as well as any other applicable rules identified 
by the Office of General Counsel of the Treasury Department.

    Question. The December 21, 2016 letter also included the following 
question: as a former executive at a bank that merged with a large 
regional bank under your leadership, please describe the investigation 
currently being conducted by the Office of the Inspector General of the 
Department of Housing and Urban Affairs, your involvement at OneWest 
during the period in question, and whether any continued cooperation 
with this investigation will impair your ability to serve as Secretary 
of the Treasury.

    Answer. I have had no involvement in the HUD investigation, so I 
have no reason to believe it will impair my ability to act as Secretary 
of the Treasury.

    Question. In 2014 and 2015, many of your business dealings 
converged. In October 2014, you joined the board of directors of 
Relativity Media as non-executive co-
chairman. Around the same time, Dune Capital Investment (Dune Capital 
Partners IV), a fund you managed, invested in Relativity, and your 
bank, OneWest, loaned hundreds of millions of dollars to Relativity 
Media. Please answer the following questions.

    What were your responsibilities as non-executive co-chairman of 
Relativity Media's Board. How much were you compensated while you 
served on the Board?

    Answer. I had no management responsibilities. My role as non-
executive co-chairman was similar to any non-executive chair role of a 
business. I received no compensation for serving in this role.

    Question. At the time you joined Relativity's Board, how much had 
OneWest loaned or invested in Relativity, and how much more did it lend 
or invest between October 2014 and May 2015 when you left the Board?

    Answer. OneWest did not make any equity investments in Relativity. 
In response to the committee staff questions dated January 4, 2017, I 
requested information from OneWest/CIT regarding the banks extensions 
of credit exceeding the Regulation O disclosure requirements. The 
information I received was provided to the committee staff on January 
12, 2017. In response to the committee staff questions dated January 
13, 2017, I requested additional identification of each loan. The 
information I received from OneWest/CIT was provided to the committee 
on January 18, 2017.

    Question. What was the total investment (debt and equity) that Dune 
Capital Investment (or Dune Capital Partners IV or other related funds) 
made in Relativity Media. How much did you personally invest in 
Relativity?

    Answer. Dune Capital Partners IV originally invested roughly $78 
million. My related entities invested $26 million. I personally had 
beneficial ownership in $10.5 million through my ownership of STM 
Partners.

    Question. When you left the Relativity Board in May 2015, did you 
know, or based on your financial expertise realize, that Relativity was 
going to have to declare bankruptcy? When did you know that OneWest was 
going to sweep funds from Relativity's accounts?

    Answer. I was aware that board was discussing the possibility of 
declaring bankruptcy. I was not involved in any discussion as it 
relates to OneWest sweeping funds from Relativity's accounts.

    Question. Did your resignation from the Relativity Board have 
anything to do with OneWest's upcoming withdrawals or your knowledge of 
it?

    Answer. No.

    Question. How much money did OneWest lose when Relativity declared 
bankruptcy? How much did Dune lose? How much did you personally lose?

    Answer. OneWest was a secured lender and did not lose money when 
Relativity declared bankruptcy. As information has been previously 
supplied to the committee, the majority of the OneWest loans have been 
paid off.

    Question. In the confirmation hearing, you claimed that Relativity 
Media did not receive Chinese investment. Yet news reports, such as an 
article in the Los Angeles Times (``Relativity Media expands in China 
with the new deal, partners,'' June 16, 2014), identified two ``new 
Chinese partners'' in Relativity Media as Jiangsu Broadcasting Corp. 
and Seedshine Capital. The article quoted your friend and Relativity 
Media chief executive Ryan Kavanaugh about the Chinese partnership: 
``The partnerships . . . will deepen our relationship with the Chinese 
media and entertainment industry and provide a world-class platform 
from which to co-develop Chinese and international film and television 
content from two leading organizations.'' Having considered this 
information, please explain the nature of the business relationship 
between Relativity, Jiangsu, and Seedshine. Would you still testify 
before the Finance Committee that Relativity Media had no Chinese 
investors?

    Answer. To the best of my knowledge, these entities were not 
investors in Relativity Media Holdings, which was the question I was 
answering.

    Question. Do you have concerns about Chinese investors increasing 
their financial stake in Hollywood as a way of increasing their so-
called ``soft power'' in the world?

    Answer. I believe that these acquisitions may need to be reviewed 
by CFIUS, as appropriate.

    Question. As I mentioned in the confirmation hearing, I am 
concerned that the U.S. Government has not been tough enough on China, 
and American workers, particularly in the steel and aluminum 
industries, have paid the price. What specific tools and authority at 
Treasury will you use to address these unbalanced trade relationship 
and increase China's compliance with its international trade 
obligations? How do you see Treasury policies and actions benefiting 
laid off steelworkers in Lorain, OH?

    Answer. Treasury has congressional authority to examine the 
exchange-rate practices of major trading partners to identify nations 
that engage in currency manipulation. I will work with the Secretary of 
Commerce to help ensure that the trade laws of the United States are 
enforced. I will also work with Congress to ensure our trade laws 
adequately address harm to our industries and workers from unfair trade 
practices.

    Question. Do you think the Strategic and Economic Dialogue has been 
successful in getting concrete commitments from the Chinese?

    Answer. The U.S.-China Strategic and Economic Dialogue as I 
understand it, has provided a useful bilateral forum to discuss a broad 
range of issues between the two nations. I hope to use this forum to 
promote the economic interests of American workers.

    Question. What goals would you have for the Strategic and Economic 
Dialogue in your first year as Treasury Secretary?

    Answer. If confirmed, I would work to ensure that the S&ED process 
focuses on improvements in trade and other financial relationships 
between the United States and China, with focus on positive economic 
results for American workers and American companies.

    Question. In your testimony to the Finance Committee, you said that 
you would not commit to developing or making public a comprehensive 
plan to address global overcapacity in the steel industry within the 
first month on the job. You did, however, commit to meeting with me on 
the topic. I look forward to scheduling that meeting very soon. In 
advance of that meeting, please describe what you think are the biggest 
causes of global steel overcapacity and what the U.S. objective should 
be in addressing global overcapacity.

    Answer. I appreciate your interest in addressing the problem of 
global overcapacity in the steel industry and would look forward, if 
confirmed, to meeting with you to examine the causes and discuss 
potential remedies. I will ask Commerce Secretary Wilbur Ross to join 
me, who also has experience in this area.

    Question. Do you think the United States should negotiate a 
bilateral free trade agreement with China? Do you think the United 
States should continue negotiations of the U.S.-China Bilateral 
Investment Treaty?

    Answer. If confirmed, I will seek to work with my counterpart in 
China to promote fair and open access to Chinese markets, on terms that 
do not discriminate against or disadvantage American companies.

    Question. Do you think Chinese state-owned enterprises should be 
allowed to invest in the United States, either through an acquisition 
or a greenfield project?

    Answer. Under current law, CFIUS is required to review an 
acquisition or investment by a foreign entity that would give it 
control over a U.S. person to determine whether the transaction might 
have an impact on our national security. If confirmed, I would strongly 
object to any transaction that, in the course of review, is determined 
to potentially endanger the safety of our citizens.

    Question. Over the last several years, the Committee on Foreign 
Investment in the United States (CFIUS) has reviewed an increasing 
number of Chinese acquisitions of U.S. companies, some in industries 
viewed as strategic investments by the Chinese Government. Some of the 
acquirers or investors have ties to Chinese state-owned enterprises and 
/or the Chinese Government. Will you commit to a strong CFIUS review 
process and appropriate resources for all reviewable acquisitions, 
including but not limited to Chinese investments that raise national 
security concerns.

    Answer. If confirmed, I pledge to ensure a strong CFIUS review 
process for all reviewable transactions.

    Question. Do you think the International Monetary Fund has been 
effective in addressing currency manipulation globally?

    Answer. The IMF and other multilateral institutions do not appear 
to have prevented nations from manipulating the value of their own 
currencies.

    Question. Do you think the United States should enter into a 
bilateral or multilateral trade agreement with a trading partner that 
has a history of manipulating its currency?

    Answer. The United States should enter into trade agreements that 
allow for fair and equal access to foreign markets on terms that do not 
discriminate against American businesses, that benefit American workers 
and create opportunity for Americans.

    Question. What is the most effective action the Treasury Secretary 
can take to address currency undervaluation in one of our trading 
partners? Do you think prohibiting the Overseas Private Investment 
Corporation from approving any new financing in a country will be a 
significant enough action that results in countries changing their 
exchange rate policies?

    Answer. The Trade Facilitation and Trade Enforcement Act of 2015 
provides specific actions to be taken if a Nation is found to 
manipulate its currency, and such Nation refuses to modify its 
activities. If confirmed, I pledge to fully enforce the law, as well as 
work with Congress to the extent further remedies are deemed to be 
necessary.

    Question. Did you or any entities that you owned or managed ever 
have any role, relationship, or transactions with Ingenious Media 
Holdings, plc, or Ingenious Capital Holdings Ltd., or any of the 
entities they owned or controlled with respect to the financing or any 
aspect of the production of any film? If so, did you claim any 
deduction for any investment in any of those films that were later 
denied by a tax authority?

    Answer. To my knowledge, neither I nor any entities that I owned or 
managed had any investment in or relationship with Ingenious Media 
Holdings, plc, or Ingenious Capital Holdings Ltd., or entities owned or 
controlled by Ingenious.

    Question. Does the administration support making the New Markets 
Tax Credit permanent and expanding the size of the annual allocation to 
meet demand?

    Answer. The Trump administration is committed the growing the 
overall economy and improving efficiency in our tax code. If confirmed, 
I pledge to use these principles as guidelines when working with 
Congress to enact measures that will assist in meeting our common goal 
of reducing overall tax burden while growing the economy.

    Question. Do you agree that better enabling law enforcement to 
obtain the identities of the beneficial owners of shell companies would 
help law enforcement to uncover and dismantle criminal networks?

    Answer. I agree that law enforcement's anti-money laundering 
efforts face serious challenges if it is unable to determine the 
beneficial ownership of the various companies and entities that utilize 
the U.S. financial system. This is a real vulnerability with regard to 
transparency that various bad actors, including terrorists and 
criminals, can exploit, and I will support appropriate efforts that 
seek to fill this gap.

    Question. Would you be willing to work with the bipartisan group in 
Congress and the financial institutions who have supported the 
collection of meaningful beneficial ownership information by 
authorities at the time of incorporation?

    Answer. If confirmed, I would look forward to working with Congress 
and the various equities impacted by beneficial ownership due diligence 
requirements to address the issue of collecting beneficial ownership 
information.

    Question. Do you support Volunteer Income Tax Assistance programs? 
VITA volunteers have a 94% return accuracy rate. Will you support 
authorization of the Volunteer Income Tax Assistance grant program?

    Answer. I will work with your office to review the issues 
associated with Volunteer Income Tax Assistance grant programs.

    Question. Will the Trump administration's tax reform plan encourage 
capital formation by expanding this savings opportunity for middle-
income Americans, many of whom currently lack this option, and as a 
result are not saving, or not saving enough?

    Answer. The Trump administration is committed to reducing the 
complexity and overall burden of the tax code for all Americans, 
especially lower- and middle-
income earners. I pledge to work with Congress to determine measures 
that will achieve our common goals of reducing the tax burden for 
struggling Americans and encouraging economic growth.

    Question. Do you support repealing carried interest?

    Answer. Our proposed tax reform plan will recommend repealing 
carried interest on hedge funds.

    Question. Do you support a refundable saver match?

    Answer. If confirmed, I look forward to working with Congress on 
what the best course would be for the American people.

    Question. Do you agree that it is irresponsible to condition 
raising the debt limit on other policy changes?

    Answer. If confirmed, I would hope that Congress will raise the 
debt limit as needed.

    Question. Should anyone who works full-time have after tax income 
below Federal poverty standards?

    Answer. One of the primary goals of the Trump administration is to 
grow incomes for lower- and middle-class Americans. Through significant 
tax reform and regulatory changes, it is our intention to unlock the 
economy so more Americans have access to greater opportunities and 
higher incomes.

    Question. What evidence will you cite to justify that cutting tax 
rates while reducing or holding government spending static will result 
in 4 percent economic growth? Please provide historical examples?

    Answer. If confirmed, I pledge to work with Congress on how to grow 
our economy while balancing the fiscal affairs our of government and 
advise President Trump on the best course of action.

    Question. Should derivative positions be marked to market for tax 
purposes?

    Answer. If confirmed, I look forward to working with Congress to 
determine the best course of action on this issue.

    Question. Is Last In First Out accounting an appropriate method for 
some companies to keep records?

    Answer. As part of any comprehensive tax reform, we will study and 
consider the impact of this issue.

    Question. Please list three ways we can expand the Earned Income 
Tax Credit and the Child Tax Credit to promote work.

    Answer. I look forward to working with your staff on this issue.

    Question. What are the best tools, within the jurisdiction of the 
Treasury, to improve outcomes for children?

    Answer. We believe that the best tools are to incorporate into tax 
reform incentives for child care and elderly care.

    Question. Do you believe implementing Pigouvian taxes is an 
appropriate way to achieve policy goals?

    Answer. It is our goal to comprehensively review and change the tax 
code, so that it is a fairer and more efficient system that encourages 
economic growth. If confirmed, I pledge to work with Congress on how to 
best achieve these results.

    Question. What is your position on the MyRA program?

    Answer. We should, in a bipartisan fashion, work to increase 
retirement savings for all Americans. This should be an essential 
feature of overall tax reform. If confirmed, I would look forward to 
working with Congress on any measures that achieve this.

    Question. Do you support preserving section 1031 in tax reform?

    Answer. If confirmed, I pledge to examine section 1031 and give it 
the attention it merits.

    Question. Do you support expanding the capacity of the VITA 
program?

    Answer. I will work with your office to review the issues 
associated with Volunteer Income Tax Assistance grant programs.

    Question. Is it appropriate and fiscally responsible to ask private 
debt collectors to pursue debts that the IRS believes are 
uncollectible?

    Answer. I believe the IRS should be responsible for collecting most 
money due the Treasury. However, when there is such a large amount 
outstanding using private agencies it ``seems like a very obvious thing 
to do.'' To the extent that there are problems, if confirmed, I am 
committed to working with Congress to resolve those issues.

    Question. In light of systemic changes to the U.S. economy over the 
last 4 decades, is the section 784 safe-harbor still relevant policy?

    Answer. Per the President's commitment to reforming the tax code, 
this and many other sections will be scrutinized to determine their 
relevancy in the current economic climate. If confirmed, I will work 
with Congress and the President to ensure that the tax code works best 
for the economy and for U.S. taxpayers.

    Question. What steps would you take to modernize private activity 
bonds?

    Answer. Private activity bonds are a valuable way to incentivize 
private investment in America's infrastructure. There are areas where 
we can improve private activity bonds, including changing volume caps 
for certain types of projects. If confirmed, I plan to review ways to 
enhance private activity bonds with the goal of driving more private 
investment into American infrastructure.

    Question. What are your views on ways to strengthen the American 
Opportunity Tax Credit?

    Answer. If confirmed, I will look forward to discussing with your 
office your views on the American Opportunity Tax Credit.

    Question. In December 2015, the IRS issued Revenue Procedure 2015-
57, which addresses the taxability of student loan discharges under the 
Department of Education's Defense to Repayment Process. Under the 
Defense to Repayment Process, the Department of Education is required 
to discharge a ``Federal Direct Loan if a student loan borrower 
establishes, as a defense against repayment, that a school's actions 
would give rise to a cause of action against the school under 
applicable State law.'' The IRS determined that while the Higher 
Education Act does not provide a statutory exclusion from gross income 
that a taxpayer could exclude amounts discharged under this process 
from gross income under a provision of the code or other tax law 
authorities, specifically that most borrowers whose Corinthian student 
loans are discharged under the Defense to Repayment discharge process 
would be able to exclude from gross income all or substantially all of 
the discharged amounts based on fraudulent misrepresentations made by 
the colleges to the students, the insolvency exclusion, or other tax 
law authorities. They also stated that determining whether one or more 
of these exceptions is available to each affected borrower would 
require a fact intensive analysis of the particular borrower's 
situation to determine the extent to which the discharged amount is 
eligible for exclusion under each of the potentially available 
exceptions and that the Treasury Department and IRS believe that such 
an analysis would impose a compliance burden on taxpayers, as well as 
an administrative burden on the IRS, that is excessive in relation to 
the amount of taxable income that would result. Accordingly the IRS 
decided that it would not assert that a taxpayer who attend Corinthian 
who were eligible for Defense to Repayment would have their loan 
discharge recognized as gross income. On January 19th this was extended 
to students who attended American Career Institutes and had their loans 
discharged via the Defense to Repayment process. Will you ensure that 
any Corinthian or American Career Institutes student who has their loan 
discharged under the Defense to Repayment process will continue to have 
this discharge excluded from the taxpayer's gross income? Will you 
extend this guidance to student who attended other institutions who 
also have their loans discharged via the Defense to Repayment process?

    Answer. If confirmed, I would look forward to working with you on 
what the best course would be for the American people.

    Question. On January 17, 2017, the Department of the Treasury and 
the Department of Education announced that they signed a Memorandum of 
Understanding (MOU) establishing a framework regarding the requirements 
for electronically sharing tax data over multiple years for Federal 
student loan borrowers participating in Income-Driven Repayment (IDR) 
plans. Will you commit to supporting this MOU?

    Answer. If confirmed, I would look forward to working with you on 
what the best course would be for the American people.

    Question. What do you think will be the effect of the border tax 
proposal in the House Tax Reform plan? Is it true that the export 
subsidy will cause profitable U.S. corporations to never pay Federal 
income taxes again?

    Answer. As I mentioned earlier, I am committed to working with 
Congress to craft the best possible tax reform plan to serve all 
Americans.

    Question. Are you aware that the export subsidy is paid for with an 
import tax that in some cases is 3 to 5 times larger than a retailer's 
profits and can only result in a large price increase for middle-class 
consumers--in other words, the export subsidy will be paid for by 
middle-class consumers.

    Answer. Per the President's stated commitment to tax reform, this 
and many other externalities resulting from the current tax code will 
be scrutinized. If confirmed, I will work with Congress and the 
President to reform the tax code so that it meets with the President's 
fiscal priorities.

    Question. Many of the foremost exchange rate experts say that the 
dollar would have to strengthen by 25% to offset the cost of the tax. 
What are the negative implications to the economy of the dollar 
strengthening by that much?

    Answer. The strength of the dollar has historically been tied to 
the strength of the U.S. economy and the faith that investors have in 
doing business in America. From time to time, an excessively strong 
dollar may have negative short-term implications on the economy.

    Question. Do you believe that the dollar strengthening would cause 
a huge transfer of wealth to foreigners who own U.S. assets and would 
reduce the value of assets owned by Americans overseas?

    Answer. A stronger dollar increases U.S. dollar purchasing power. 
To the extent the dollar gains strength relative to other currencies, 
assets priced in those other currencies would become cheaper on a 
dollar basis.

                                 ______
                                 
             Questions Submitted by Hon. Michael F. Bennet
    Question. Mr. Mnuchin, in commenting on tax reform, you recently 
said, ``Any reductions we have in upper-income taxes will be offset by 
less deductions so that there will be no absolute tax cut for the upper 
class.'' In examining the second Trump tax plan released in the 
campaign, the non-partisan Tax Policy Center found ``the highest-income 
households would receive the largest cuts, both in dollars and as a 
percentage of income.''

    In fact, the top .1% of earners would receive an average tax cut of 
almost $1.1 million. And the top 1% of earners would receive a tax cut 
of $214,690. In contrast, a family in the bottom 20% would receive a 
tax cut of $110.

    Given this analysis, does the Trump tax plan meet your standard? 
What types of changes would you make to this plan to ensure that upper 
income taxpayers won't receive an absolute tax cut?

    Answer. President Trump's objective is to ensure that tax reform, 
when enacted, benefits hardworking Americans by putting more money in 
their pockets and creating more jobs and opportunities. If confirmed, I 
will work with Congress to achieve that objective and maintain an 
appropriate level of progressivity.

    Question. Earlier this week, Mr. Trump expressed his concern about 
the House proposal to create a border adjustment as a way of curbing 
corporate inversions. He said that the plan was ``too complicated.'' He 
also said, ``Anytime I hear border adjustment, I don't love it because 
usually it means we're going to get adjusted into a bad deal. That's 
what happens.'' Later, however, he said, ``It's certainly something 
that's going to be discussed.'' Ways and Means chairman Brady said that 
the 
President-elect's team was ``deeply engaged'' in talks with the House 
about the tax.

    Can you tell the committee the incoming administration's views on 
the border adjustment plan?

    Answer. The administration is still evaluating the impacts of the 
House Republican Blueprint's border adjustment tax plan. As this plan 
is further built out and additional details released, the 
administration will be able to share additional views.

    Question. Are you ``deeply engaged'' in crafting this proposal?

    Answer. If confirmed, I will be leading the administration's 
efforts on tax reform, working closely with other people within the 
administration.

    Question. Do you expect a border adjustment plan to be a 
centerpiece of the incoming administration's tax proposal?

    Answer. As part of the tax reform process, we will examine all 
proposals put forward for their impact on keeping companies in the 
United States, and on creating, retaining and returning jobs to our 
shores. I intend to work closely with the committees of jurisdiction, 
namely the Committee on Ways and Means and the Committee on Finance, as 
well as the leadership in both chambers, to ensure that tax reform 
benefits American companies and American workers first.

    Question. Given the President-elect's focus on infrastructure, can 
you provide more details on the incoming administration's plans? What 
portion of the infrastructure plan will be direct funding versus 
financing tools such as tax exempt bonds or an infrastructure bank?

    Answer. The Trump administration will indeed be very focused on 
enhancing America's infrastructure, and will consider various options.

    Question. Both the Child and Earned Income Tax Credits have lifted 
millions of families and children out of poverty. Families with the 
youngest children, however, often receive smaller amounts through the 
Child Tax Credit. I recently introduced a bill to make the child credit 
more refundable and larger for families with young children. Would the 
incoming administration consider these types of improvements to the 
Child Tax Credit as part of tax reform?

    Answer. Thank you for your work on this important issue. Improving 
access to and the affordability of childcare is a priority for the new 
administration. President Trump proposed several options in this area 
during the campaign, and we look forward to working with you and the 
rest of Congress to advance meaningful reforms.

                                 ______
                                 
            Questions Submitted by Hon. Robert P. Casey, Jr.
    Question. Mr. Mnuchin, China recently surpassed Canada to become 
the United States' biggest trading partner in goods. Our trade deficit 
with China in 2015 was $365.7 billion; $22.6 billion more than in 2014. 
China is pushing to be reclassified as a market economy and has 
overseen the wholesale theft of American intellectual property through 
state-sponsored cyber-enabled economic espionage, including from 
several Pennsylvania companies.

    Please discuss your views on the issue, and describe what the 
administration plans to do to protect American producers from these 
unfair trade practices?

    Answer. As Treasury Secretary, I will work with the President to 
examine the U.S. trade relationship with China and assess the damage to 
the American economy from China's practice of intervening in currency 
markets to manipulate the yuan-dollar exchange rate, as well as other 
unfair tactics that violate free trade principles. Furthermore, 
intellectual property theft is one of the most serious international 
trade violations. Ending IP theft will be a central focus of the 
administration's trade policy.

    Question. Mr. Mnuchin, will you take immediate action to address 
global steel overcapacity? If so, please detail the steps you will 
take.

    Answer. I will work with the President to redress the economic 
ramifications of global steel overcapacity and seek potential remedies.

    Question. Mr. Mnuchin, will you take immediate action to address 
Chinese dumping of aluminum? If so, please detail the steps you will 
take.

    Answer. As Treasury Secretary, I will pursue all actions within the 
law to address Chinese dumping of aluminum. I will also work closely 
with the Secretary of Commerce to ensure that the trade laws of the 
United States are fully enforced.

    Question. Mr. Mnuchin, when you acquired IndyMac, were you aware 
that 86 percent of their suspicious activity reports--which help 
identify, among other things, possible terrorist financing links--were 
incomplete? And if not, when did you become aware?

    Answer. I do not specifically recall the percentage of IndyMac SARs 
that were incomplete at the time of OneWest's acquisition. However, 
under my leadership, OneWest maintained a robust BSA /AML compliance 
program overseen by an executive-level BSA Committee, and that 
compliance program was periodically reviewed by both the OCC and the 
Federal Reserve.

    Question. Mr. Mnuchin, were you consulted by General Flynn prior to 
his making 5 phone calls to the Russian embassy?

    If not, do you think it is reasonable, as the Treasury Secretary 
nominee, to expect to be consulted on such a matter? And, do you expect 
the administration to similarly cut you out of future discussions 
concerning sanctions? Who will be responsible for those decisions, if 
not the Secretary of the Treasury?

    Answer. No. If confirmed, I would expect to participate on the NSC 
as previous Secretaries have.

    Question. The Office of Foreign Assets Control or OFAC is 
responsible for administering and enforcing economic and trade 
sanctions--imposing controls on transactions and freezing assets under 
U.S. jurisdiction. If a U.S.-based company set up a foreign subsidiary 
to get around sanctions on a foreign government, would you consider 
that a sanctions violation? What actions would you take in response?

    Answer. To the extent that a U.S. company established a foreign 
subsidiary that engaged in business with a sanctioned entity or 
government, the determination of whether it violated U.S. economic 
sanctions would depend on the particular sanctions program and relevant 
prohibitions. In such a circumstance I would rely upon an assessment by 
OFAC of the particular facts and circumstances as to whether sanctions 
were being violated and the appropriate enforcement response.

    Question. Since the President has refused to disclose his taxes, we 
have no way of knowing where the President has business interests or to 
whom he owes debts. Do you think it is appropriate for the President to 
sign an affidavit affirming he has no financial interests in lifting 
specific sanctions, prior to their being lifted?

    Answer. I am confident that the President will put the interests of 
the American people first, and will consult the White House general 
counsel as appropriate.

    Question. How would you evaluate any request from the President to 
lift sanctions?

    Answer. I would evaluate any request from the President based upon 
the information available at that time.

    Question. The President told the Wall Street Journal on Friday, 
January 13th that he may lift sanctions on Russia. As the nominee for 
the agency responsible for enforcing sanctions, were you part of the 
decision-making process leading to his announcement?

    If so, please describe what factors and equities you discussed.

    Answer. As I have not yet been confirmed as Secretary of the 
Treasury, I do not think it would be appropriate for him to consult 
with me at this time.

    Question. I am concerned about statements from Mr. Tillerson that 
suggest the President's administration may take a dim view of the 
utility of financial sanctions as a tool in our national security 
toolkit. Will you commit to fully enforcing sanctions laws on the books 
now and any future sanctions Congress may enact? Would you support the 
expansion of sanctions against Russia for its support of the Assad 
regime in Syria and its activities in Ukraine?

    Answer. If confirmed, I will continue to support and enforce to the 
fullest extent all existing economic sanctions programs as well as any 
legislated by Congress in the future. To the extent that the President 
and his national security advisors determine that it is in the best 
interest of the United States to impose additional sanctions in a given 
circumstance for a particular sanctions program, I will also provide 
the President my advice and fully enforce such sanctions in support of 
the President's national security strategy.

    Question. Iran has been on the so-called FATF blacklist for its 
support of terrorism and its failure to stop terrorist financiers 
operating in its jurisdiction. Last year, FATF issued a decision to 
suspend countermeasures against Iran for a period of 12 months while 
keeping it on the blacklist. If confirmed, will you commit to working 
with FATF to ensure that Iran is held accountable for its support for 
terrorism and to assess whether the Iranian regime has taken sufficient 
action to correct deficiencies and bring its financial sector into 
compliance with international standards?

    Answer. If confirmed, I commit to working with FATF to ensure that 
Iran is held accountable for its support of terrorism and to assess 
whether Iran has implemented sufficient steps to bring its financial 
system in compliance with international standards.

    Question. Hezbollah remains one of the world's deadliest and best-
funded terrorist organizations. They are responsible for many American 
deaths and have advanced weaponry that could threaten our allies in the 
Middle East, especially Israel. If confirmed, will you commit to 
ensuring all sanctions on Hezbollah are enforced? Will you ensure that 
entities and individuals that provide support to Hezbollah are subject 
to Treasury sanctions?

    Answer. If confirmed, I commit to ensuring all sanctions against 
Hezbollah are enforced, and that any entities and individuals 
determined to be supporting Hezbollah are subject to appropriate 
sanctions.

    Question. Considering Hezbollah's intensifying international 
criminal activities, does the administration have any plans to 
designate Hezbollah as a transnational criminal organization?

    Answer. I will consult with the Secretary of State and the National 
Security Council on whether or not to designate Hezbollah as a 
transnational criminal organization pursuant to appropriate Treasury 
authorities.

    Question. If the President asked you to halt the Treasury 
Department's participation in the investigation into communications 
between members of the President's campaign team and Russia, would you 
comply? As you were a member of the President's campaign team, will you 
recuse yourself from the investigation?

    Answer. If confirmed, I will seek the advice of the General Counsel 
and Ethics Staff at the Department of the Treasury.

    Question. Mr. Mnuchin, (1) when did you become aware that IndyMac 
failed to provide the legally required loan counseling to reverse 
mortgage recipients? And (2) what remedial action did you take to 
correct this failure of the bank you took over to make sure consumers 
weren't harmed?

    Answer. Although I am aware that loan counseling was required for 
reverse mortgage participants, I am not aware of the specifics as it 
relates to the remedial action that was taken. I am confident that any 
issues were properly addressed by the bank's compliance staff.

    Question. Mr. Mnuchin, are you aware of HUD's Inspector General's 
investigation of OneWest's reverse mortgage practices?

    Will you cooperate with this investigation?

    Answer. Yes, if needed.

    Question. If confirmed as Secretary, will you recuse yourself of 
any action that could hinder this investigation?

    Answer. Yes.

    Question. Have you spoken to Dr. Carson about this investigation?

    Answer. No.

    Question. To your knowledge, have any donors to the President 
spoken to Dr. Carson about this investigation?

    Answer. No.

    Question. Mr. Mnuchin, one of the most significant scandals during 
the financial crisis was the practice of ``robo-signing'' whereby bank 
employees rapidly approved foreclosure documents without thorough 
review. Many were wrongfully foreclosed upon on account of these 
practices. Did OneWest ``robo-sign'' documents relating to foreclosures 
and evictions?

    Answer. OneWest Bank did not ``robo-sign'' documents, and as the 
only bank to successfully complete the Independent Foreclosure Review 
required by Federal banking regulators to investigate allegations of 
``robo-signing,'' I am proud of our institution's extremely low error 
rate.

    Question. Mr. Mnuchin, did OneWest engage in the practice of ``dual 
tracking''-- negotiating with a homeowner while pursuing foreclosure?

    Answer. ``Dual tracking'' was a practice that historically occurred 
in the mortgage industry as standard mortgage servicing policies 
followed the requirements set by Fannie Mae and Freddie Mac. Shortly 
after OneWest Bank's inception, the GSEs and other standard-setters 
recognized that dual-tracking should be restricted, and OneWest 
supported and followed these restrictions.

    Question. Mr. Mnuchin, was it a common requirement of a reverse 
mortgage agreement that an individual live in their home?

    Did OneWest move to foreclose on individuals who they believed were 
not living in their home?

    If OneWest served an individual with reverse mortgage foreclosure 
papers on account of OneWest's belief that the individual was not 
residing in their home, but the papers were served to the individual at 
their home, did that automatically end the foreclosure proceeding?

    Answer. HUD regulations governing the Federal Home Equity 
Conversion Mortgage (``HECM'') mortgages require that borrowers live in 
the mortgaged property as their primary residence, and require 
foreclosure when the borrower(s) have moved out of the property. 
Consistent with these Federal regulations, OneWest's Financial Freedom 
division did initiate foreclosures when it determined the borrowers no 
longer lived in the property. I am not personally aware of information 
relating to the last part of this question.

    Question. Mr. Mnuchin, was it a policy at OneWest to use 
foreclosure as a first option, rather than a last resort following 
attempts at loan modifications for underwater borrowers?

    Answer. No. Indeed, as one of the first servicers (and, 
proportionate to the size of our mortgage business, one of the largest 
servicers) to provide principal forgiveness, we were more successful 
than most institutions at addressing the problem of underwater 
borrowers. We addressed this not only through loan modifications, but 
also through our support of the Federal HARP refinance program, under 
which we originated more than $100 million of refinance mortgages to 
``underwater'' borrowers with low or no equity in their homes.

    Question. As I understand, backdating a foreclosure related 
document would be employed so a company can move forward with a 
foreclosure more quickly than the law would allow. Is backdating 
foreclosure documents a violation of the law?

    Answer. OneWest Bank did not engage in ``backdating.'' At the time 
OneWest Bank opened its doors on March 19, 2009, it assumed control of 
tens of thousands of foreclosures that had been initiated during the 
FDIC's conservatorship of IndyMac Federal Bank. The FDIC provided 
OneWest with powers of attorney to continue those pending foreclosure 
actions, which allowed OneWest to step into those actions effective as 
of the date they were initiated. Calling this ``backdating'' is 
misleading, and disregards the fact that OneWest acted in these cases 
at the direction of and with full knowledge of the FDIC.

    Question. Did OneWest ever backdate foreclosure documents?

    Answer. See previous response.

    Question. Mr. Mnuchin, in addition to your providing the total 
number of foreclosures executed by OneWest Bank, please provide the 
following sub-data: the foreclosure rate on mortgages owned by OneWest; 
the foreclosure rate on mortgages serviced by OneWest; the modification 
rate of mortgages owned by OneWest; and the modification rate of 
mortgages serviced by OneWest.

    Answer. Because I am no longer employed by or affiliated with CIT 
Group, I do not have access to this information. However, I note that 
responsive information is available from publicly available sources, 
including: https://www.treasury.gov/initiatives/financial-stability/
reports/Documents/June%20%202013%20MHA%20Repo
rt%20final.pdf.

    Question. Mr. Mnuchin, please describe how much job growth 
nationally you aim to achieve by 2020? Please also describe what kind 
of job growth you aim to achieve in rural communities, counties like 
Fayette, Wyoming, and Huntingdon in Pennsylvania?

    Answer. We do not have any specific estimates at this point in 
time. I can assure you that President Trump and I are committed to work 
with you and others to see that no community is left behind.

    Question. Mr. Mnuchin, please describe how much wage growth you aim 
to achieve by 2020. Please also describe what kind of wage growth you 
aim to achieve in rural communities, counties like Greene, Forest, and 
Northumberland in Pennsylvania?

    Answer. We do not have any specific estimates at this point in 
time. I can assure you that President Trump and I are committed to work 
with you and others to see that no community is left behind.

    Question. Mr. Mnuchin, please describe the average GDP growth you 
hope to see over the next 4 years?

    Answer. We hope to see sustained economic growth in excess of 3 
percent.

    Question. Mr. Mnuchin, how will you ensure economic growth is 
shared across all income levels?

    What are your benchmarks for success?

    Answer. One key component will be to keep the government out of the 
business of picking winners and losers. Effective tax reform, reduced 
regulation and eliminating the trade deficit will help us achieve this 
objective.

    Question. As Treasury Secretary, you will serve as managing trustee 
of the Social Security and Medicare Trust Funds. Will you oppose 
privatizing Social Security?

    Answer. President Trump supports delivering on Social Security's 
promise to current and future generations. If confirmed, I will work 
with Congress to ensure that we maintain and improve upon the current 
system.

    Question. Will you oppose turning Medicare into a voucher or 
premium support program?

    Answer. I will work with the administration on this issue.

    Question. As a public official you are barred from using public 
office for your own private gain or for the primary gain of friends and 
family. Do you agree with that prohibition?

    Answer. Yes. I agree with that prohibition.

    Question. As Treasury Secretary, you will be responsible for 
approving or denying changes to the promised pension payments for 
hardworking Americans and will sit on the board of the Pension Benefit 
Guaranty Corporation. In that capacity, will you take into account 
whether a company sold off valuable assets prior to engaging in the 
MPRA process?

    Answer. In engaging in the review process under the Multiemployer 
Pension Reform Act, if confirmed, and in my role with respect to that 
process, I will take into account all relevant information, and I would 
seek advice as to whether that would include particular actions of a 
company.

    Question. Will you be retaining your millions in holdings in ESL 
investments?

    Answer. Pursuant to the review of my holdings by ethics officials, 
I am permitted to retain my interest in ESL.

    Question. To your knowledge, does the ESL fund you are invested in 
own shares of Seritage Growth Properties?

    Answer. I do not know whether ESL currently owns shares of Seritage 
Growth Properties.

    Question. Do you own shares in Seritage?

    Answer. Accounts for the benefit of me and my children hold shares 
in Seritage. In accordance with my ethics agreement, these shares will 
be divested.

    Question. As a member of the Sears board, you approved the sale of 
some of the only remaining assets held by the company, including 
property and iconic brands. Do you stand by that decision?

    Answer. Yes. The Sears board approved the sale of certain assets 
based upon its business judgment at the time of the decision. Sears 
continues to operate over 1,400 stores and has approximately $10 
billion of assets. The characterization of ``some of the only remaining 
assets'' suggests that the assets sold were a large majority of the 
total assets at the time of sale, which isn't accurate.

    Question. Do you believe the sale of those assets, including the 
sale of Sears commercial property to a REIT was in the best interest of 
the over 200,000 hardworking Sears pension beneficiaries?

    Answer. Sears has been in the middle of a significant 
transformation designed to address the dramatic change that has 
occurred in the purchasing behaviors of the American consumer. As a 
company that has long been one of the largest employers in the United 
States, it is distinguished from many of its retail competitors by both 
its long history and its large pension plan. Many of Sears' competitors 
either have no pension plans or relatively small plans, because these 
companies did not exist until well after the end of World War II, after 
which pensions became a more significant form of compensation for many 
years, until they began to be replace by defined contribution plans.

    In 2005, when Sears Holdings Corporation was formed as a result of 
the merger of Sears and Kmart, the Sears and Kmart pension plans 
collectively had well over 300,000 beneficiaries and the plans both 
were underfunded. Sears Holdings inherited the pension plan of Sears in 
the merger and the Kmart pension plan was assumed by shareholders upon 
the emergence of Kmart from bankruptcy in 2003. Sears Holdings has met 
all of its funding obligations required by law and currently has 
approximately 185,000 beneficiaries in its pension plan.

    Sears consulted and ultimately entered into a protection agreement 
with the PBGC, which provided additional protection to the pension 
plan.

    Question. Do you agree that the lack of affordable child care is a 
drain on the labor market?

    Answer. President Trump made affordable child care a signature 
issue in his campaign, and it remains a priority for the new 
administration. The ability to afford child care is a concern for many 
working families, and I look forward to working with the Congress on a 
comprehensive plan to make easier the choice to remain in the labor 
market or directly care for one's children.

    Question. Can you explain why you believe a tax deduction of the 
cost of child and dependent care is superior to a tax credit?

    Answer. President Trump's commitment to helping Americans with 
children find more affordable, quality child care will be a top 
priority of the new administration. If confirmed, I will work with all 
stakeholders to help make this goal a reality wherever it falls under 
the aegis Treasury.

    Question. Do you think the President should disclose how much he 
stands to benefit from the repeal of the net investment income tax 
prior to signing the repeal of the Affordable Care Act into law?

    Answer. No. President Trump did not run for office to grow his own 
wealth. He has repeatedly stated that he wants all Americans to reap 
the financial benefits of a growing economy without the shackles of 
excessive government regulation.

    Question. How much do you personally stand to benefit from the 
repeal of the net investment income tax?

    Answer. The Net Investment Income Tax imposed by section 1411 of 
the Internal Revenue Code applies at a rate of 3.8% to certain net 
investment income of individuals, estates, and trusts that have income 
above the statutory threshold amounts. I do not know how much income I 
will have that could be subject to that tax in the future, and any 
impact would be consistent with other changes to the tax code.

    Question. The President has financial assets that are extremely 
broad in scope and complexity. Do you agree with ethics experts that 
the President should put his assets in a blind trust to avoid potential 
conflicts of interests?

    Answer. I have not been party to discussions with the relevant 
experts and as such cannot have an opinion on the matter. However, I 
know that the President has gone to great lengths to separate himself 
from his business interests by putting his assets in a trust.

    Question. Will you publicly disclose how you and your immediate 
family, including your children, will personally benefit from changes 
to the tax code and changes to tax regulations?

    Answer. If confirmed, I will provide full disclosure of all 
information required by applicable rules and regulations.

    Question. Can you expand on what you meant when you said the 
wealthy would not receive an absolute tax cut? What income level do you 
define as wealthy? Will this be on earned income--as in wages--or all 
income, including investment income?

    Answer. I am committed to working with Congress to craft the best 
possible tax reform plan to serve all Americans.

    Question. Mr. Mnuchin, since your nomination as Treasury Secretary, 
you have made several market-moving public statements. Will you provide 
assurances that should you provide clarification to such statements, 
you will do so publicly and in a manner that prevents individuals from 
engaging in market manipulation?

    Answer. If confirmed, I will fully adhere to all established 
practices for statements made by the Secretary, including those that 
involve public information that could affect values or markets.

    Question. The Secretary of the Treasury has the significant 
responsibility to ensure the U.S. Government pays its bills in full and 
one time. I believe a man, and in this case, a government, is only as 
good as its word. It is a word our government has never broken. Will 
you vow you will continue to pay all our bills in full and on time, as 
has every Treasury Secretary since our first--Alexander Hamilton?

    Answer. If confirmed, I will strive to run an efficient and 
effective department that will adhere to and abide by the 
appropriations enacted by the Congress.

                                 ______
                                 
               Questions Submitted by Hon. Mark R. Warner
                            fiscal concerns
    Question. In an interview with CNBC, you said that the revenue loss 
from cutting corporate taxes will be offset by revenues from stronger 
economic growth and higher personal incomes.

    Is it your view that tax reform will be revenue-neutral when the 
dynamic effects on the economy are included?

    Answer. Dynamic scoring is an important tool for analyzing the 
impact of tax policy on jobs and economic growth. The use of dynamic 
scoring is vital to designing pro-growth tax reform.

    Question. Would you rely on the Joint Committee on Taxation's 
dynamic scoring model?

    Answer. The Joint Committee on Taxation's dynamic scoring model 
shall be used for legislative purposes.

    Question. Would it be revenue-neutral both in the 10-year budget 
window and outside the budget window?

    Answer. The exact results will be dependent on ongoing discussions 
with the House and Senate on tax reform.

    Question. You've talked about the positive economic effects of 
cutting taxes. Do you believe there is a negative economic effect from 
increasing debt?

    Answer. The level and composition of Federal spending and taxation 
are important considerations. Ultimately, it is about pursuing policies 
that maximize shared economic growth.
      congressional budget office and joint committee on taxation
    Question. Currently, the Congressional Budget Office provides 
independent and strictly nonpartisan analysis of the budget and 
economic issues before Congress, and the Joint Committee on Taxation 
provides nonpartisan revenue estimates of our tax legislation.

    Given that members of Congress across the political spectrum--
Democrats and Republicans alike--have been frustrated with the results 
of their analysis, I'm confident in their ability to provide 
independent, nonpartisan estimates.

    Will you commit to using CBO and JCT estimates to evaluate tax 
plans?

    Answer. The JCT estimates will be used for legislative purposes.

    Question. Will you commit to allowing CBO and JCT to use their 
independent assumptions about economic growth, without influence from 
the administration?

    Answer. Yes.

    Question. And will you oppose any efforts by Congress to direct CBO 
and JCT as to what assumptions they should or should not adopt in their 
analysis?

    Answer. I do not have a position on this matter.
                             new capitalism
    Question. There are many ways that globalization and automation 
have disrupted and displaced millions of American workers, especially 
those with low and moderate job skills. I believe this has created the 
economic anxiety we've seen reflected in our Nation's politics, on the 
left and the right. I also have been shocked by recent trends among 
many in corporate America to prioritize the short-term sugar high of 
increased dividends and share buybacks over longer-term investments in 
their people or communities or R&D.

    Leaders in your own field like Warren Buffett and Larry Ellison at 
Blackrock have drawn attention to this preoccupation with short-term 
profits for temporary shareholders versus longer-term investment, and 
the way it has undermined overall public confidence and trust in modern 
America capitalism.

    Do you agree that companies value short-term profits and 
shareholders over longer-term investment?

    Answer. Different companies value different approaches, but overall 
I believe that more focus should be on long-term investment.

    Question. Do you support modifications in the current incentive 
structure to reward longer-term stock holds?

    Answer. Preferences in the tax code already exist for holding 
longer-term assets.

    Question. Do you think we have a role to play in encouraging public 
corporations, their CEOs and boards, to focus on a longer-term horizon?

    Answer. The tax code already incentivizes this behavior, however we 
should always look to additional ideas and policies.

    Question. Do you support innovations in the tax code to do more to 
help workers retrain and move up to new and better jobs?

    Answer. Yes, if confirmed, I would welcome the opportunity to work 
with you on ways to help workers retrain for better careers.

    Question. Do you believe that we should be developing more 
effective and portable unemployment and health insurance?

    Answer. It is important that workers receive unemployment and 
insurance benefits when they qualify. If confirmed, I would look 
forward to the opportunity to work with you on these issues.
                            it modernization

    Question. Our country's cyber-defenses are extremely vulnerable.

    Currently, over 75% of our $88 billion Federal IT budget is spent 
on operations and maintenance, while less than a quarter is spent on 
development, modernization, and enhancement.

    Instead of replacing legacy systems with modern, secure IT, we're 
just patching outdated systems over and over again. Legacy systems can 
be drags on productivity and innovation, and also pose cybersecurity 
risks.

    If you are confirmed, you'll be in charge of a department that is 
responsible for vast quantities of extremely sensitive information.

    How would you ensure that agencies in your department, such as the 
IRS, are employing the best and most up-to-date IT?

    Answer. If confirmed, I will use my technology expertise to work 
with the Congress to ensure that all systems within Treasury are 
sufficiently upgraded to protect the private data of U.S. taxpayers, as 
well as other sensitive information that falls under the aegis of 
Treasury.
           supporting the mission of the irs/federal workers
    Question. Our Federal civilian workforce plays a crucial role in 
our economy, but unprecedented budget and staffing cuts at the Internal 
Revenue Service make it difficult for employees to complete the 
important audit and enforcement tasks that generate our Federal 
revenue.

    Even more, we know that there are enforcement programs at the 
Internal Revenue Service that pay for themselves.

    Do you agree that broad-based cuts in the IRS budget will hamper 
our ability to collect revenue?

    Answer. As Treasury Secretary, I will seek to adequately staff and 
modernize the IRS. I do not have access to all the information, but it 
is likely that further cuts to the IRS will indeed hamper our ability 
to collect revenue.

    Question. Will you agree to devote appropriate resources to the IRS 
to allow it to fulfill its mission to serve America's taxpayers and 
enforce our tax laws?

    Answer. Yes, I believe in adequately staffing and modernizing the 
IRS to fulfill its mission and enforce our tax laws.
                             infrastructure
    Question. Infrastructure financing tools can work when there is a 
dedicated revenue stream to repay a loan, like a toll road. However, 
many experts suggest that financing is not going to fix everything and 
there are much-needed infrastructure projects that simply may not have 
a viable repayment stream.

    Do you agree that we need to bring more real spending in order to 
boost investment and stabilize the Highway Trust Fund?

    Answer. Different types of infrastructure have different options 
for payment or repayment, and many need to be evaluated on a case by 
case basis. I look forward to working with you on the best course for 
funding such projects.

    Question. In her confirmation hearing last week, Transportation 
Secretary Designate Elaine Chao committed to exploring every tool to 
ensure long-term solvency of the Highway Trust Fund and did not rule 
out raising revenues. Since 2008, Congress has authorized the transfer 
of $143 billion from the General Fund to the Trust Fund. When the 
current highway bill lapses in 2020, the Highway Trust Fund will again 
be broke. CBO projects that 5 years after that, it will be facing a 
cumulative deficit of more than $100 billion.

    Will you commit to exploring ways to boost real funding--direct 
government spending--on infrastructure and work in good faith to 
identify potential revenue sources to bring long-term solvency to the 
Highway Trust Fund?

    Answer. A significant element of President Trump's campaign was a 
promise to focus on new options for enhanced infrastructure spending, 
including direct spending. As Treasury Secretary, I will help the 
administration consider all options for increasing investments in 
infrastructure and ensuring the long-term solvency of the Highway Trust 
Fund.
                                data act
    Question. Under the DATA Act of 2014, the Fiscal Service has 
created a data format that connects all of agencies' spending 
information--financial account balances, grant spending, contract 
spending--into a single electronic picture. Currently the data format 
focuses on money going out, not money coming in. This means that 
although the picture will break spending down by appropriation, by 
account, by program, etc., it will not break down non-appropriated 
funds--fines, fees, and settlement collections, for instance.

    Can Treasury expand the data format to also capture how agencies 
receive funding, to provide a complete picture for citizens and 
Congress?

    Answer. If confirmed, I will be fully briefed on data formatting 
and interagency compatibility, and will work with Congress and the 
staff at Treasury to ensure that they are implemented.

    Question. Under the DATA Act of 2014, every Federal agency will 
begin reporting its spending information using a standardized, 
government-wide data format, starting this May 9, 2017. At first, this 
requirement will be duplicative. Agencies will keep reporting the same 
information the old-fashioned way, using documents and legacy databases 
like the GTAS and the FPDS, even while they begin reporting the 
searchable, open data sets under the DATA Act.

    Will Treasury phase out the legacy reporting requirements so that 
agencies only report their spending once, and only as searchable data, 
instead of as old-fashioned documents and inconsistent databases? Will 
you support additional appropriations needed to replace and modernize 
legacy systems?

    Answer. Yes, I believe we need to update all our legacy systems.

    Question. In partnership with the Office of Management and Budget, 
the Department of Treasury leads governance efforts related to 
implementation of the DATA Act. While OMB and Treasury have made 
progress in developing high-level data governance concepts and 
objectives, much work remains to be done to formulate policy and 
procedures for developing new data standards, and adjudicating 
conflicts between data standards.

    Will Treasury commit to formalizing these additional procedures and 
policies within the governance structure, such as in ways recommended 
by the Government Accountability Office?

    Answer. If confirmed, I will be fully briefed on recommendations by 
these agencies, and will work with the staff at Treasury to ensure that 
best practices and full compliance are achieved.
                           economic sanctions
    Question. Nominee Tillerson, as CEO of ExxonMobil, said that 
sanctions have to be well-implemented--comprehensively--to have any 
effect. The Treasury Department has historically been very involved in 
structuring our most effective sanctions regimes.

    Do you see a role for Treasury? If so, what is that role? If not, 
why not?

    Answer. I agree that the Department of the Treasury plays a 
critical role in implementing and enforcing economic sanctions to 
ensure their effect. This role involves advising the President and his 
other national security advisors on what authorities are available, how 
these tools can be most effectively used, and then implementing them 
through the Office of Foreign Assets Control. After sanctions regimes 
are promulgated, strong enforcement efforts are necessary to ensure 
that both domestic and foreign entities understand that the United 
States will also make every effort to secure compliance with the 
various sanctions prohibitions. If confirmed, I will consult with the 
Secretary of State and the National Security Council and utilize all 
sanctions tools delegated to me by the President--either through 
Executive order or legislation--to vigilantly enforce sanctions to 
ensure their effectiveness in achieving our national security strategy.

    Question. President-elect Trump and cabinet nominees have said that 
they will carefully review the JCPOA, including its ``side letters,'' 
to determine whether Iran is complying with the agreement.

    Will you commit to not adjust or recommend that the President 
adjust the waiver of any nuclear-related sanctions until the review is 
complete and the administration has consulted Congress on its findings 
and intentions?

    Answer. The President has stated his intent to enforce the Joint 
Comprehensive Plan of Action. I agree that all aspects and requirements 
of the JCPOA need to be carefully reviewed and considered in order to 
ensure that Iran is meeting all of its commitments under the agreement.

    Question. Will you apply sanctions waived under the JCPOA on Iran 
for non-
nuclear activities? If so, how will you notify Congress? How will you 
notify other countries involved in the deal (the UK, France, Germany, 
etc.)?

    Answer. The President has stated his intent to enforce the Joint 
Comprehensive Plan of Action. As Treasury Secretary, and in 
consultation with the Secretary of State, I will act to fully enforce 
all existing sanctions against Iran--including with respect to its 
sponsorship of terrorism and other illicit activities.

    Question. I believe that the U.S. sanctions worked to get Iran to 
the negotiating table because other countries complied with our 
secondary sanctions. That sanctions regime put enough pressure on the 
Iranian economy that we had leverage to negotiate. Other nominees for 
the cabinet have said that sanctions don't work, and have done business 
through subsidiaries in Europe to circumvent U.S. sanctions.

    If it becomes necessary to reapply international sanctions, how 
would you work with other members of the cabinet to build an effective 
sanctions regime? How will you work with international partners to 
apply their own sanctions and /or to comply with ours?

    Answer. The President has stated his intent to enforce the Joint 
Comprehensive Plan of Action (``JCPOA''). As Treasury Secretary, and in 
consultation with the Secretary of State, I will act to fully enforce 
all existing sanctions against Iran--including with respect to its 
sponsorship of terrorism and other illicit activities. To the extent 
the President's national security advisors have information indicating 
that Iran is not complying with the terms of the JCPOA, I will advise 
the President on the options available to him for re-imposing waived 
sanctions to promote strict compliance by Iran with the JCPOA. If such 
re-imposition were necessary, I will support the President's decision 
and coordinate with the Secretary of State to explain to our 
international partners the justification for such re-imposition, and to 
encourage them to support the United States' decision in that regard.

    Question. President-elect Trump has indicated that he would be 
willing to use sanctions relief as an incentive to get Russia to reduce 
its nuclear stockpiles. Sanctions against Russia, including on its 
energy sector, are having a measurable impact on Russia's economy. And 
they were not levied because of Russia's nuclear stockpiles. They were 
a result of Russia's illegal annexation of Crimea and its military 
incursion into Ukraine. I would expect those sanctions to remain in 
place until Russia removes itself from Crimea and Ukraine.

    Will you commit to consulting Congress before you remove any 
sanctions from Russia?

    Answer. If confirmed, I will continue to support and enforce the 
existing sanctions against Russia to the fullest extent, as I stated 
during my confirmation hearing. To the extent that the President and 
his national security advisors determine that it is in the best 
interests of the United States to modify the sanctions or impose 
others, I will fully enforce those sanctions in support of the 
President's national security strategy.

    Question. What additional sanctions will you consider applying to 
Russia for its continued nefarious behavior?

    Answer. If confirmed, I will regularly consult and collaborate with 
the Secretary of State and the National Security Council, and to the 
extent additional Russia-
related sanctions become necessary to execute the President's national 
security strategy, I will advise the President and his other national 
security advisors on what authorities are available and how these tools 
can be most effectively used to counter the particular Russian 
activities.

                                 ______
                                 
  Resubmission of Questions for the Record From Democratic Members to 
                         Steven Terner Mnuchin
    Members found the responses to the initial questions for the record 
to be far short of expected and appropriate level of responsiveness. 
The document contained errors and in some cases answers to questions 
not asked. Also, the document repeatedly made cursory and almost 
meaningless answers. We would hope the nominee could provide 
satisfactory answers prior to the markup.
    Below are questions members would like the nominee to reconsider.
             Questions Resubmitted by Hon. Debbie Stabenow
    Question. Another difficult issue you will play a leadership role 
in if you are confirmed as Treasury Secretary is pensions. This is an 
incredibly important issue to my State, particularly because we have 
about 47,000 workers and retirees who have been paying into the Central 
States Pension Fund, which is in serious trouble.

    What is your position on the Multiemployer Pension Reform Act, 
which Treasury is responsible for administering?

    How do you propose to shore up our multiemployer pension system?

    Answer. You have my commitment to work with you to find solutions 
to the multiemployer pension crisis.

    Amended Answer. If confirmed, I will consult with you and other 
interested parties on the Multiemployer Pension Reform Act of 2014.

    Question. Our tax code clearly provides too many loopholes that 
allow companies and wealthy individuals to avoid paying their fair 
share through tax planning.

    What do you think is the best strategy for preventing tax reform 
from creating new loopholes that companies and individuals will abuse?

    How would the incoming administration's tax plan close loopholes?

    Answer. As part of our overall plan for tax reform, we will 
consider this issue, and I look forward to consulting with Congress on 
the matter if confirmed.

    Amended Answer. The President has been clear that he will 
aggressively pursue loophole closure to broaden the tax base. I will 
make that policy direction a priority for the talented and experienced 
tax professionals who staff the Treasury Department.

    Question. I firmly believe that we cannot have a robust economy if 
we do not grow things here and make things here.

    How would the incoming administration's tax plan specifically help 
the manufacturing and agriculture sectors?

    Answer. I entirely agree with your belief that we must improve the 
prospects of domestic manufacturing if we are to have a robust and 
dynamically growing economy. I look forward to working with Congress to 
examine and include tax provisions that will allow us to reach our 
common objective of growing the economy.

    Amended Answer. The President and the Senator generally agree on 
creating or enhancing incentives for domestic manufacturing. If 
confirmed, I will make this policy a priority for the talented and 
experienced Treasury tax staff.

    Question. How would you contrast that with how the House 
Republicans' tax plan would affect the manufacturing and agriculture 
sectors specifically?

    Amended Answer. Since the administration's tax plan has yet to be 
finalized, it is hard to contrast it with the House Republican plan, 
but we will work with House Republicans to make sure any tax plan is 
pro-growth and pro-jobs for manufacturing and agriculture. I would also 
look forward to comparing it to the administration's tax plan when it 
is available, and working with the congressional leadership to make 
sure both are as pro-growth and pro-jobs as possible.

    Question. From your perspective, how would eliminating the 
deductibility of business interest expenses impact these sectors?

    Amended Answer. Eliminating deductibility of interest could have an 
impact on these sectors, and we will study it carefully as part of 
overall tax reform.

                                 ______
                                 
              Questions Resubmitted by Hon. Maria Cantwell
    Question. At your hearing, you stated that you support the Volcker 
rule and ``believe the concept of proprietary trading does not belong 
in banks with FDIC insurance.'' The risks to our economy posed by 
proprietary trading and banks making risky bets on behalf of customers 
cannot be mitigated by merely separating proprietary trading from FDIC-
insured institutions. As we saw during the financial crisis, when non-
banking affiliates of FDIC insured banks failed, they were rescued by 
their insured affiliates, which in turn were forced to be rescued by 
taxpayers. This was the case with State Street Bank, and your former 
employer, Goldman Sachs, which converted to a bank holding company in 
order to be eligible for Federal bailout funds.

    Do you believe that a legal distinction between two entities, one 
insured and the other not, would keep the risky activities from one 
from impacting another in a crisis? Would a bright-line between these 
activities not better mitigate these risks?

    Answer. I am supportive of the Volcker Rule to mitigate the impact 
that proprietary risk-taking may have on a bank that benefits from 
Federal deposit insurance. However, as I indicated, we need to provide 
a proper definition of proprietary trading, such that we do not limit 
liquidity in needed markets, as indicated by the recent Federal report.

    Amended Answer. I do believe that a legal distinction between the 
insured and non-insured entity is an important factor in eliminating 
risky activities within the institution that has FDIC insured deposits. 
I do not believe that the uninsured entity should be able to perform 
proprietary trading.

    The nominee did not answer the question, which referred to the 
risks posed by proprietary trading at banks that are not federally 
insured. Does the nominee think that proprietary trading by non-FDIC 
insured institutions poses risks to the financial system? Does the 
nominee believe that non-FDIC insured institutions, which may have FDIC 
insured affiliates, should be able perform proprietary trading?

    Question. What additional actions will you take as Treasury 
Secretary to ensure market/financial stability? What other regulations 
would help market stability? Do you believe that additional regulations 
to ensure market stability and prevent financial crisis are in the 
interest of ``public safety?''

    Answer. I do not believe at this time that additional regulations 
are needed to ensure market stability, however I expect that we will 
review this issue at FSOC on an ongoing basis.

    Amended Answer. If there are financial regulations that are needed 
to protect ``public safety,'' I will advocate that these new 
regulations are not part of the freeze.

    The nominee did not answer the second part of the question. 
President Trump has called for a freeze on all new regulations except 
those to protect ``public safety.'' The committee deserves to know if 
the nominee believes that regulations to protect our financial system 
can be in the interests of ``public safety,'' and if not, why?

    Question. Do you believe your former employer, Goldman Sachs, acted 
responsibly and ethically when it bet against the same securities it 
was selling to its customers?

    Answer. As I mentioned in my testimony, I left Goldman Sachs nearly 
fifteen years ago and prior to the financial crisis and the period of 
time in question. I am not in a position to comment on these actions.

    Amended Answer. For many years, administrations of both parties 
have relied on appointees with considerable, relevant, private-sector 
experience. My previous experience in the private sector will inform my 
work as Treasury Secretary, and I would expect to assemble a highly 
qualified team with a diverse set of experiences. If confirmed, I will 
commit to use the Department's authorities in accordance with the law 
and administration policies.

    It is vital that the nominee comment on whether or not his former 
employer acted ethically during the financial crisis. This will inform 
the committee as to the enforcement and regulatory priorities the 
nominee will focus on. With at least six former Goldman Sachs employees 
set to take high level economic positions in the administration, the 
nominee's views of their performance is critical.

    Question. We have had a long tradition in this country that banking 
activities should be separated from physical commerce. Recently, the 
Federal Reserve issued a report required under section 620 of the Dodd-
Frank Act, recommending that Congress take action to prohibit banks 
from engaging in merchant banking activities and owning certain 
physical commodities. Would you support restoration of separation 
between banking activities and commerce to support competition and 
reduce risks?

    Answer. If confirmed, I would further study section 620 to address 
the issues of your concern.

    Amended Answer. I support minimizing risks to our financial system, 
especially in banks with FDIC insured deposits. If I am confirmed, I 
look forward to working with Congress to achieve that objective. We 
will examine the recommendations that fall within the Treasury 
Department's jurisdiction and seek to advance them as appropriate, and 
to work with Congress and other agencies to craft appropriate 
legislative language where necessary.

    The nominee did not answer the question. Section 620 of the Dodd-
Frank Act authorized a report from the Federal Reserve. The nominee was 
asked to comment on the conclusions of the report, not the section of 
the law the report was commissioned pursuant to.

    Question. You have stated that there will be ``no absolute tax cut 
for the upper class'' through tax reform. Will you support a tax cut 
for the upper class outside of tax reform, such as the potential repeal 
of the Affordable Car Act's additional Medicare Hospital Insurance tax 
of 0.9% on earnings over $250,000 a year and the Medicare surtax of 
3.8% on unearned income above $250,000 a year?

    Answer. As you are probably aware, the President has proposed 
eliminating the Medicare surtax. If confirmed, I will work with 
Congress to reach an appropriate resolution to this issue.

    Amended Answer. If confirmed, I look forward to reviewing possible 
tax cuts with the talented professionals in Treasury's Office of Tax 
Policy. I would also look forward to working with Congress to review 
the administration's proposed distribution of tax cuts when it becomes 
available.

    The nominee did not answer the question.

    Question. Do you believe that climate change is real and that human 
activity is the primary driver of it?

    Answer. I believe that climate change is a complex issue, but not 
one primarily driven by the Treasury Department.

    Amended Answer. I agree with Governor Perry's comment that ``the 
climate is changing. I believe some of it is naturally occurring, but 
some of it is also caused by man-made activity.''

    The nominee did not answer the question.

    Question. Did any of your marketing materials for your Anguilla or 
Cayman Island funds express or advertise the tax benefits of their 
offshore location?

    Answer. The offering document for Dune Capital International 
contained normal tax consideration disclosures as well as ERISA and 
other regulatory considerations.

    Question. Please provide to the Finance Committee any and all 
marketing materials and letters.

    Answer. As indicated in the preceding response, the confidential 
offering memorandum describes the tax consequences of the investment 
but does not express or advertise ``tax benefits'' from the investment. 
The description of tax consequences in the confidential offering 
documents is typical for such investments, including a description of 
U.S. and Anguilla tax rules.

    The nominee did not provide the requested documentation.

    Amended Answer. I will provide a redacted copy of the confidential 
offering memorandum as requested.

                                 ______
                                 

CONFIDENTIAL PRIVATE OFFERING MEMORANDUM

                              DUNE CAPITAL

                           INTERNATIONAL LTD.

                  (A Cayman Islands exempted company)

                            Ordinary Shares

                               April 2007

                        VII. TAX CONSIDERATIONS

CIRCULAR 230 NOTICE REQUIREMENT

The discussion contained in this document is not intended or written to 
be used, and cannot be used, by any person for the purpose of avoiding 
tax penalties that may be imposed on such person. The discussion is 
written to support the promotion or marketing of investments in the 
Fund. Any person considering an investment in the Fund should seek 
advice based on the person's particular circumstances from an 
independent tax advisor.

    The following is a general discussion of certain of the anticipated 
income tax considerations relevant to non-U.S. persons (as defined in 
the next paragraph) and U.S. tax-exempt entities arising from the 
purchase, ownership and disposition of Shares. Prospective investors 
should consult their own tax advisors to determine the application and 
effect of tax laws with respect to their own particular circumstances. 
This discussion is based on laws and regulations currently in effect, 
which may change or be subject to differing interpretations (possibly 
on a retroactive basis).

    For these purposes, the term ``non-U.S. person'' means any person 
that is not a U.S. person for U.S. Federal income tax purposes. A U.S. 
person means a citizen or resident of the United States, a partnership 
or corporation created or organized in the United States or under the 
laws of the United States or any State (other than a partnership that 
is not treated as a U.S. person under any applicable Treasury 
Regulations), an estate whose income is includable in gross income for 
U.S. Federal income tax purposes regardless of its source or a trust if 
a U.S. court is able to exercise primary supervision over the 
administration of the trust and one or more U.S. persons have the 
authority to control all substantial decisions of the trust. In 
addition, to the extent provided in Treasury Regulations, certain 
trusts in existence on August 20, 1996 and treated as U.S. persons 
prior to such date, which elect to continue to be treated as U.S. 
persons, also will be U.S. persons for these purposes.

    Special taxation rules may apply in the case of non-U.S. persons 
(i) that conduct a trade or business in the United States or that have 
an office or fixed place of business in the United States, (ii) that 
have a ``tax home'' in the United States, (iii) that are former 
citizens or long-term residents of the United States or (iv) that are 
``controlled foreign corporations'' or ``passive foreign investment 
companies'' for U.S. Federal income tax purposes, non-U.S. insurance 
companies that hold Shares in connection with their U.S. business, or 
corporations that accumulate earnings to avoid U.S. Federal income tax. 
Such persons are urged to consult their own U.S. tax advisors before 
investing in the Fund.

    In view of the number of different jurisdictions where local laws 
may apply to shareholders, the discussion below does not address the 
local tax consequences to potential investors of the purchase, 
ownership and disposition of Shares. Prospective investors are urged to 
consult their own tax advisors in determining the possible tax, 
exchange control or other consequences to them under the laws of the 
jurisdictions of which they are citizens, residents or domiciliaries 
and in which they conduct business.

United States

Income Taxation of the Fund and the Master Fund
    Each of the Fund and the Master Fund will be treated as a 
corporation for U.S. Federal income tax purposes. Because the Fund and 
the Master Fund are organized under the laws of the Cayman Islands and 
Anguilla respectively, they will be considered non-U.S. corporations 
for purposes of the U.S. tax laws. As such, the U.S. Federal income tax 
treatment of the Fund will vary depending upon whether the Fund derives 
income or gains that are effectively connected with the conduct of a 
trade or business in the U.S. Unless the context requires otherwise, 
references to the term ``Fund'' in this discussion are deemed to 
include the Master Fund.

    Non-Effectively Connected Income. Gains derived by the Fund that 
are not effectively connected with a U.S. trade or business will be 
exempt from U.S. Federal income taxation. Dividends received by the 
Fund from U.S. sources will be subject to U.S. withholding tax at a 30% 
rate. U.S. source interest income received by the Fund generally will 
be exempt from U.S. Federal income and withholding tax under the 
exemption for ``portfolio interest'' or under another statutory 
exemption. Interest on corporate obligations derived by the Fund will 
qualify as ``portfolio interest'' if the Fund owns (directly and under 
certain constructive ownership rules) less than 10% and of the total 
combined voting power of the corporation paying the interest, and, with 
respect to certain obligations issued after April 7, 1993, to the 
extent the interest is not determined by reference to certain economic 
attributes of the debtor (or a person related thereto). Interest 
derived by the Fund on U.S. bank deposits, certificates of deposit and 
certain obligations with maturities of 183 days or less (from original 
issuance) also will be exempt from withholding tax. Interest (including 
original issue discount) derived by the Fund from U.S. sources not 
qualifying as ``portfolio interest'' and not otherwise exempt under 
U.S. law will be subject to U.S. withholding tax at a 30% rate.

    Effectively Connected Income. It is possible that the Fund may 
engage in certain activities, such as loan origination, which, if 
regularly carried on by the Fund during a taxable year, could cause the 
Fund to be considered to be engaged in a trade or business in the 
United States. Furthermore, the Fund may be required to foreclose on 
debt securities secured by real estate or other U.S. trade or business 
assets. The ownership of U.S. real estate or other U.S. trade or 
business assets by the Fund would result in the Fund being engaged in a 
U.S. trade or business. In those circumstances, the Fund's income from 
such assets, which includes under ``FIRPTA'' gain from the disposition 
of an interest in U.S. real property, would be treated as income that 
is ``effectively connected'' with such U.S. trade or business and will 
be subject to U.S. Federal corporate income taxation (currently imposed 
at a maximum rate of 35%) on a net basis. In addition, it is possible 
that the Fund could be subject to taxation on a net basis by State or 
local jurisdictions within the United States. The Fund also would be 
subject to a 30% U.S. Federal ``branch profits'' tax on certain of its 
after-tax effectively connected earnings and profits not reinvested in 
a U.S. trade or business during the year. Any such taxation could 
adversely affect the Fund's ability to make payments in respect of the 
Shares.

    In circumstances where the Investment Manager deems it appropriate, 
direct purchases of debt securities secured by real estate or other 
business assets that are subject to foreclosures, and of certain other 
investments, may be made by the Fund through one or more U.S. corporate 
subsidiaries of the Fund (or other investment vehicle as appropriate). 
Each such U.S. Subsidiary would be subject to U.S. Federal corporate 
income tax on its net taxable income at regular Federal rates, and 
dividend distributions from the U.S. Subsidiary to the Fund would be 
subject to a 30 percent U.S. withholding tax, but cash distributions by 
the U.S. Subsidiary upon its complete liquidation will not be subject 
to taxation or to U.S. withholding tax.

    The Investment Manager will attempt to structure the Fund's 
investments in a manner to reduce the incidence of U.S. Federal (and 
State and local) income tax on income and gains from such investments. 
In light of the nature of the Fund's investment program, it nonetheless 
should be anticipated that certain investments will generate income 
subject to U.S. taxation on either a net or gross basis.
Taxation of Non-U.S. Shareholders
    For U.S. Federal income tax purposes, a shareholder who is a non-
U.S. person will not be subject to U.S. Federal income taxation on 
amounts paid by the Fund in respect of the Shares or gains recognized 
on the sale, exchange or redemption of Shares, provided that such 
income and gains are not considered to be effectively connected with 
the conduct by the shareholder of a U.S. trade or business. In limited 
circumstances, an individual shareholder who is present in the United 
States for 183 days or more during a taxable year may be subject to 
U.S. income tax at a flat rate of 30 percent on gains realized on a 
disposition of Shares in such year. Individual shareholders who at the 
time of their death are not citizens, former citizens or residents of 
the United States should not be subject, by reason of the ownership of 
Shares, to any U.S. Federal gift or estate taxes.

    In the case of Shares held in the United States by a custodian or 
nominee for a non-U.S. person, U.S. ``backup'' withholding taxes may 
apply to distributions in respect of Shares held by such shareholder 
unless such shareholder properly certifies as to its non-U.S. status or 
otherwise establishes an exemption from ``backup'' withholding.
Taxation of U.S. Tax-exempt Entities
    ``Unrelated business taxable income'' (``UBTI'') is generally the 
excess of gross income from any unrelated trade or business conducted 
by a tax-exempt entity over the deductions attributable to such trade 
or business, with certain modifications. UBTI generally does not 
include interest, dividends, or gains from the sale of securities not 
held as either inventory or primarily for sale to customers in the 
ordinary course of business, except to the extent that any such item of 
income is deemed to constitute ``unrelated debt-financed income'' 
within the meaning of section 514 of the U.S. Internal Revenue Code of 
1986 (the ``Code'') and the Treasury Regulations promulgated 
thereunder, and certain other requirements are met.

    Income and gain that a U.S. tax-exempt entity derives from an 
investment in Shares generally should not give rise to UBTI, except to 
the extent that such entity acquires the Shares with acquisition 
indebtedness.

    The Fund will constitute a ``passive foreign investment company'' 
(a ``PFIC'') for U.S. Federal income tax purposes. Under Treasury 
Regulations, a tax-exempt entity is not considered to be a shareholder 
in a PFIC, except to the extent that a ``dividend'' paid by such PFIC 
would be taxable as unrelated debt-financed income. Hence, a tax-exempt 
entity would be subject to tax under the PFIC regime in respect of its 
investment in Shares only in limited circumstances.

    The application of the PFIC rules to certain types of tax-exempt 
entities, such as charitable remainder trusts with beneficiaries who 
are U.S. persons, is unclear. Accordingly, potential tax-exempt 
investors are urged to consult their own tax advisors regarding the tax 
consequences of an investment in the Fund.
Transfer Reporting Requirements
    A U.S. person (including in certain circumstances a U.S. tax-exempt 
entity) that transfers property (including cash) to the Fund in 
exchange for Shares will be required to file a Form 926 or a similar 
form with the Internal Revenue Service. In the event a U.S. shareholder 
fails to file any required form, such holder could be subject to a 
penalty of up to 10% of the value of the property transferred, subject 
to a $100,000 limit so long as the failure was not due to intentional 
disregard.
U.S. Investor Tax Filings and Record Retention
    The U.S. Treasury Department has adopted regulations designed to 
assist the Internal Revenue Service in identifying abusive tax shelter 
transactions. In general, the regulations require U.S. taxpayers who 
are investors in specified transactions (including certain shareholders 
in foreign corporations and partners in partnerships that engage in 
such transactions) to satisfy certain special tax filing and record 
retention requirements. Current legislation imposes significant 
monetary penalties (in addition to existing penalties that generally 
may be applicable as a result of a failure to comply with applicable 
Treasury regulations) for failure to comply with these tax filing and 
record retention rules.

    The regulations are broad in scope and it is conceivable that the 
Fund may enter into transactions that will subject the Fund and certain 
shareholders to the special tax filing and record retention rules. The 
Investment Manager intends to provide information necessary to enable 
shareholders to satisfy any tax filing and record retention 
requirements that may arise as a result of any transactions entered 
into by the Fund.

Cayman Islands

    The Fund has been incorporated in the Cayman Islands as an exempted 
company with limited liability and, as such, has received an 
undertaking from the Governor-in-Cabinet of the Cayman Islands pursuant 
to section 6 of the Tax Concessions Law (1999 Revision) to the effect 
that, for a period of twenty years, no tax to be levied on profits, 
income, gains or appreciations shall apply to the Fund or its 
operations and no tax in the nature of estate duty or inheritance tax 
shall be payable in respect of the Shares. Accordingly, it is not 
envisaged that the Fund will be subject to any taxation in the Cayman 
Islands other than incidental registry fees, annual registration fees 
and stamp duties on certain instruments entered into by them.

    There currently are no withholding taxes or exchange control 
regulations in the Cayman Islands applicable to the Fund or its 
shareholders.

    There currently are no estate duty, gifts or gains taxes in the 
Cayman Islands which would be applicable to the Shares or any income or 
gains derived therefrom or transfers or redemptions effected in respect 
thereof.

Anguilla

    The Master Fund has been formed pursuant to the Anguilla Limited 
Liability Companies Act (Revised Statutes of Anguilla 2000, Chapter L65 
(the ``LLC Act'')).

    There are no income taxes, corporation taxes, taxes on dividends or 
distributions, inheritance taxes, estate duty, gifts or capital gains 
taxes or withholding taxes of any kind in Anguilla.

    There is also a blanket exemption from the imposition of future 
taxes specifically provided for under sections 77 and 78 of the LLC 
Act.

    Under section 77 of the LLC Act, a limited liability company which 
does not undertake business within Anguilla, other than so far as may 
be necessary for the carrying on of the business of that limited 
partnership exterior to Anguilla, shall not be subject to any income 
tax, withholding tax or other taxes based upon or measured by assets or 
income originating outside of Anguilla or in connection with other 
activities outside of Anguilla.

    Section 78 of the LLC Act provides a dividends and distributions 
exemption from taxes. Section 78 expressly provides that any dividend 
or distribution by a limited liability company which does no business 
in Anguilla to a corporation, or to individuals or entities which are 
not citizens or residents of Anguilla shall be exempt from tax or 
withholding provisions of Anguillan law which might otherwise be 
applicable to such limited liability company or the recipient of the 
dividend or distribution.

    Accordingly, it is not envisaged that the Master Fund will be 
subject to any taxation in Anguilla other than incidental registry 
fees, annual registration fees and the possibility of paying stamp duty 
on certain instruments entered into by it.

                                 ______
                                 
            Questions Resubmitted by Hon. Benjamin L. Cardin
    Question. As we discussed in your confirmation hearing, when you 
were nominated last November, you stated that ``[a]ny reductions we 
have in upper-income taxes will be offset by less deductions so that 
there will be no absolute tax cut for the upper class.''

    As far as I can tell from available estimates by the Tax Policy 
Center of President Trump's tax plan, the top 0.1 percent (in terms of 
cash income percentile) would receive an average tax cut of over $1 
million. Those in the top 1 percent would receive an average tax cut of 
over $200,000. Tax Foundation modeling also shows that the top 1 
percent would have an increased after-tax income, using static scoring, 
of at least 10.2%.

    What deductions would you repeal or amend to counteract this tax 
cut to upper-income households?

    Amended Answer. We will consider eliminating certain deductions 
other than mortgage or charitable contributions.

    Question. Could you please share the calculations your team has 
undertaken to make sure that the tax cut for the upper class will be 
fully offset by your changes?

    If you disagree with the Tax Policy Center and Tax Foundation 
estimates on the tax cuts upper-income householders receive, could you 
please share the calculations your team has undertaken to show how 
their taxable income would change?

    If you don't have specific calculations, could you please explain 
why you believe your plan does not contain an absolute tax cut for the 
upper class?

    Answer. President Trump's objective is to pass tax reform that 
grows the economy and benefits all Americans. If confirmed, I will work 
with President Trump and Congress to ensure that middle-class families 
are not further burdened by higher taxes.

    Our office would like a more responsive and detailed answer to this 
series of questions. The multi-part questions are not answered. The 
general answer at the end of the question is about middle-class 
families. However, the question is about upper-class tax cuts, the 
administration's views on the analyses of the Tax Policy Center and Tax 
Foundation, and the reasoning behind Mr. Mnuchin's statement regarding 
upper-class tax cuts. It is not about middle-class families.

    Amended Answer. If confirmed, I look forward to reviewing possible 
tax cuts with the talented professionals in Treasury's Office of Tax 
Policy. I would also look forward to working with Congress to review 
the administration's proposed distribution of tax cuts when it becomes 
available.

    Question. In your hearing, you discussed the importance of economic 
growth in offsetting the revenues lost under the President's tax reform 
plan. In previous statements, you've also implied that through this 
economic growth, higher revenues from individuals would finance 
business tax cuts. For instance, you've said, ``[s]o we think that by 
cutting corporate taxes, we'll create huge economic growth and we'll 
have huge personal income, so the revenues will be offset on the other 
side.''

    Is it your view that the tax cuts in the President's plan will be 
fully offset by economic growth?

    Answer. Our objective is to have any tax cuts offset by economic 
growth.

    Question. If so, could you please share your team's analysis 
supporting that position?

    Answer. Our objective is to have any tax cuts offset by economic 
growth.

    Amended Answer. If I am confirmed, I will be fully transparent in 
providing information from the Treasury's Office of Tax Policy.

    Question. Will you commit, as we discussed in our meeting, not to 
put forward a plan that will increase the deficit and put our country 
in a worse financial position?

    Answer. Our objective is to have any tax cuts offset by economic 
growth.

    Our office would like responsive answers to the second and third 
questions. An expansive reading of the third answer could characterize 
that answer as responsive, but it would be helpful for the answer to 
more explicitly answer the question if that is the intent, e.g., ``The 
objective of our tax plan is to fully offset any revenue-losing changes 
to the tax code by encouraging economic growth, thereby avoiding any 
increase in the deficit.'' It would also be helpful to have clarity as 
to whether the objective is that the tax cuts be fully offset by 
economic growth, or only partially offset. We understand why Mr. 
Mnuchin is, perhaps, uncomfortable saying ``will be offset,'' since 
``will'' is pretty definite here on an issue that is subject to a lot 
of variables. But having clarity on the objective at least is 
important.

    Amended Answer. Our objective is to have any tax cuts offset by 
economic growth. If confirmed, I look forward to reviewing possible tax 
cuts with the talented professionals in Treasury's Office of Tax 
Policy. I would also look forward to working with Congress to review 
the administration's proposed distribution of tax cuts when it becomes 
available.

                                 ______
                                 
             Questions Resubmitted by Hon. Robert Menendez
    Question. Shortly after then President-elect Trump announced your 
nomination, you told CNBC that you would focus on rolling back parts of 
the Dodd-Frank Wall Street Reform Act. Specifically, you said, ``the 
number-one problem with Dodd-Frank is that it's way too complicated and 
cuts back lending.''

    What specific provisions would you advise the President and 
Republicans in Congress to change, repeal, or unwind?

    Answer. I would advise the President and members of Congress on 
rules that undermine economic growth and job creation. A particular 
focus should be placed on reducing the regulatory costs faced by 
community financial institutions, and making sure that small and medium 
sized business have access to credit.

    Amended Answer. I will, if confirmed, work with the administration 
and interested members of Congress to analyze and identify regulatory 
provisions that may have disproportionately adverse effects on 
financial activities, including community financial institution 
formation and lending. I will also listen to community experiences and 
evidence provided by Americans on effects of provisions of financial 
regulations--including those stemming from the Dodd-Frank Act--that 
they identify as possible factors that inhibit community lending. 
Continued monitoring of possible unintended consequences of existing 
laws and regulations and of consequences in which costs to communities 
outweigh benefits are an essential ingredient of the regulatory 
process.

    Question. During your confirmation hearing, you said, ``regulation 
is killing community banks.'' According to data released by the FDIC on 
November 29, 2016, community banks reported net income rose $593 
million, or 11.8 percent from the 2015 period. The FDIC also reported 
that community banks' net operating revenue totaled $23 billion, an 
increase of 8.5 percent from a year earlier. Chair Gruenberg said, 
``community banks, which account for 43% of the industry's small loans 
to businesses, continued to grow their small business loans at a faster 
pace than the rest of the industry.''

    What specific regulations do you believe are particularly 
detrimental to the community banking industry, and what changes would 
you recommend?

    Answer. I look forward to working with banking regulators and 
Congress to determine what particular regulations could be reformed to 
better serve customers and create a flow of credit while preserving key 
capital adequacy and safety and soundness standards.

    Amended Answer. Other studies, including from staff of the Federal 
Reserve Bank of Richmond in 2015 and the Federal Reserve Board in 2014, 
have identified a decline in the number of commercial banks and new 
charters. If confirmed, I would evaluate the extent to which 
regulations are contributing to these declines and look for ways to 
reverse these trends.

    Question. You have advocated changing the way the cost of tax 
legislation is calculated or ``scored'' for the purposes of analyzing 
its impact on the budget. But as you know, different so-called 
``dynamic scoring'' models produce a wide range of results depending on 
what assumptions are made. The Joint Committee on Taxation (JCT) is a 
non-partisan, highly respected institution that provides members of 
Congress and the general public with objective analysis regarding the 
``cost'' of tax legislation.

    Do you commit to respecting their independence and pledge to 
refrain from exerting any pressure on JCT and their chosen model of 
scoring?

    Answer. The Joint Committee on Taxation has been an important 
participant in and contributor to the tax reform process. I will work 
with all congressional committees, including JTC, the Committee on Ways 
and Means, the Committee on Finance, and the leadership of the House 
and Senate, to develop tax legislation.

    Amended Answer. If confirmed, I will respect the independence of 
the Joint Committee on Taxation and refrain from exerting pressure on 
them and their chosen model of scoring.

    Question. Do you commit to accepting JCT's model as the final say 
for scoring purposes?

    Answer. I will work with all congressional committees, including 
JTC, the Committee on Ways and Means, the Committee on Finance, and the 
leadership of the House and Senate, to develop tax legislation.

    Amended Answer. If confirmed, I will accept JCT's model as the 
final say on scoring for legislative purposes. I would also commit to 
working with JCT openly and transparently, consistent with the 
longstanding relationship between the branches.

    Question. Mr. Mnuchin, I'm disappointed that you wouldn't support 
new sanctions on Russia for, among other things, interfering in our 
election. Moreover, Mr. Trump said that he would potentially lift 
sanctions against Russia quickly, unilaterally, and without input from 
Congress. For those of us who have both authored much of the laws 
putting the architecture for comprehensive and effective sanctions in 
place, and those of us who believe that the legislative branch must be 
an effective check on the Executive, this is alarming. Sanctions that 
carry the full weight of law are a critical component of our national 
security strategy.

    Would you support efforts of the President to ignore the will of 
Congress and unilaterally lift sanctions currently in place on Russian 
individuals and actors?

    Answer. If confirmed, I will continue to support and enforce the 
existing sanctions against Russia to the fullest extent, as I stated 
during my confirmation hearing. To the extent that the President and 
his national security advisors determine that it is in the best 
interest of the United States to modify the sanctions or impose others, 
I will fully enforce those sanctions in support of the President's 
national security strategy.

    Amended Answer. If confirmed, I would advise the President to 
consider all relevant and necessary information before taking action on 
sanctions.

                                 ______
                                 
             Questions Resubmitted by Hon. Thomas R. Carper
    Question. President Trump has proposed several tax reform plans, 
all of which would drastically cut taxes on wealthy individuals. 
Studies of President Trump's revised tax reform plan found that the 
largest benefits, both in dollar amounts and in percentage terms, would 
accrue to the highest-income households. According to an analysis by 
the Tax Policy Center, the Trump tax reform plan by itself would also 
raise taxes on middle-class families with children, in large part 
because it would repeal the personal exemption for children and force 
single parents with children to file as singles and so forfeit the more 
generous standard deduction they currently receive. The Trump proposal 
does this while simultaneously delivering massive tax cuts to the 
highest-income taxpayers and businesses. TPC's analysis also notes that 
the incoming President's proposed child care deduction and tax credit 
fails to compensate families for these other lost tax benefits.

    At the same time, Mr. Mnuchin, you have stated that ``any 
reductions we have in upper-income taxes will be offset by less 
deductions so that there will be no absolute tax cut for the upper 
class.'' Can you explain precisely what you mean--regarding both the 
definition and your proposed policy framework--by ``absolute'' tax cut?

    Answer. If confirmed, I look forward to working on measures that 
lower the tax burden on the middle-class and working families.

    Amended Answer. Our objective is to have any tax cuts offset by 
economic growth. If confirmed, I look forward to reviewing possible tax 
cuts with the talented professionals in Treasury's Office of Tax 
Policy. I would also look forward to working with Congress to review 
the administration's proposed distribution of tax cuts when it becomes 
available.

    Question. As noted above, you have repeatedly mentioned that a 
middle-class tax cut is the centerpiece of your tax reform. Will these 
middle-class tax cuts make up for the premium tax credits that will be 
lost to ACA repeal?

    Answer. If confirmed, I will work with the Secretary of Health and 
Human Services to determine the economic impact of any changes to ACA.

    Amended Answer. Our objective is to have any tax cuts offset by 
economic growth. If confirmed, I look forward to reviewing possible tax 
cuts with the talented professionals in Treasury's Office of Tax 
Policy. I would also look forward to working with Congress to review 
the administration's proposed distribution of tax cuts when it becomes 
available.

    Question. President Trump's plan indicated that itemized deductions 
for high-
income individuals would be limited somehow. Could you please state 
three specific tax deductions or tax breaks that you plan to eliminate, 
which would help achieve the stated goal of avoiding ``absolute tax 
cuts for the upper class''?

    Answer. If confirmed I will work with the tax-writing committees, 
Congress, and the staff at Treasury to advise the President on the best 
course of action for the American taxpayer.

    Amended Answer. Our objective is to have any tax cuts offset by 
economic growth. If confirmed, I look forward to reviewing possible tax 
cuts with the talented professionals in Treasury's Office of Tax 
Policy. I would also look forward to working with Congress to review 
the administration's proposed distribution of tax cuts when it becomes 
available.

    Question. Last year, President Trump offered a range of comments 
regarding the national debt. After first suggesting that as President 
he would ``renegotiate'' the national debt, he then later variously 
suggested that Treasury bonds might be alternately ``discounted'' or 
subject to a ``buy back'' or even ``refinanced'' with longer terms. As 
Treasury Secretary, you may be the official who is tasked by President 
Trump with somehow restructuring U.S. debt. Do you believe that 
renegotiating or otherwise restructuring U.S. debt would be perceived 
as a default?

    Answer. I am confident that the President supports the full faith 
and credit of the debt of the United States, as do I.

    Amended Answer. If confirmed, I would work with the staff on a 
variety of debt management issues. At the same time, I would not make 
any recommendation to the President that would lead to default or that 
could be perceived as leading to default.

    Question. In September and October of last year, President Trump 
stated, ``It's time to establish a national goal of reaching 4-percent 
economic growth'' per year, and at other times suggested that ``I 
actually think we can go higher than 4 percent. I think you can go to 5 
percent or 6 percent.'' Can you briefly outline for us the 
administration's detailed proposals that can be shown empirically to 
achieve such high rates of growth?

    Answer. We have abundant examples from American history about what 
works and does not work. To achieve high rates of real, sustainable 
economic growth, tax and regulatory reform must be pro-growth in design 
and execution.

    Amended Answer. Empirically, there is evidence that growth is 
enhanced by many factors, including physical capital and technical 
progress. I look forward to working with Congress to arrive at policies 
that enhance growth by providing incentives for capital formation, 
innovation and technical progress in America, and improvements in the 
terms of trade.

    I believe a change in policy, consisting of lower corporate and 
personal income taxes, regulatory reform, and increased infrastructure 
spending will help the U.S. surpass the current historically low rate 
of GDP growth. The Obama recovery has delivered an annualized growth 
rate of 2.1 percent. I believe higher growth can be achieved. Over the 
comparable period of the Reagan recovery, for example, real GDP grew at 
an annualized rate of roughly 4.5 percent.

    Question. As noted above, the incoming administration has stated a 
goal of achieving 3- to 4-percent economic growth per year. As you 
know, population growth is a major component in GDP, and so slowing 
population growth therefore presents a significant constraint on 
achieving higher growth rates. One solution to this problem is 
providing sufficient legal channels for immigrants to come or stay and 
work in this country through immigration reform.

    As you may know, the nonpartisan Congressional Budget Office 
projected that the comprehensive immigration reform bill that passed 
the Senate in 2013 would increase GDP by 3.3 percent in ten years, and 
by 5.4 percent in twenty years. Yet, despite the economic growth 
potential represented by an increase in immigration levels, some in the 
incoming administration have demonstrated antipathy toward immigration 
and immigrants from a broad range of nationalities and backgrounds.

    Would you agree that boosting immigration levels could help achieve 
a higher economic growth rate?

    Answer. The President has repeatedly stated his support for legal 
immigration.

    Amended Answer. There are many inputs to the economic growth rate--
including levels of technology, population growth, government policy, 
trade balances, and many others. Immigration is just one factor that 
ultimately contributes to the level of economic growth.

    Question. The incoming administration has promised to repeal the 
Affordable Care Act, which provides a tax credit to small businesses 
for providing health insurance to their workers. Do you agree that 
eliminating this tax credit would increase taxes for small businesses 
who are trying to do the right thing by helping their workers secure 
health insurance?

    Answer. The President has made affordable, accessible health care a 
priority in his administration, and I look forward to working with 
Congress and the President to achieve this goal.

    Amended Answer. Our objective is to have any tax cuts offset by 
economic growth. If confirmed, I look forward to reviewing possible tax 
cuts with the talented professionals in Treasury's Office of Tax 
Policy. I would also look forward to working with Congress to review 
the administration's proposed distribution of tax cuts when it becomes 
available.

    Question. In an interview shortly after your selection as the 
President's nominee for Treasury Secretary, you said that you looked 
forward to working with House Financial Services Chairman Jeb 
Hensarling on Dodd-Frank issues. Chairman Hensarling has been quoted as 
saying that he believes Dodd-Frank has been a failure. Do you believe 
that Dodd-Frank has failed to make the financial system safer?

    Answer. If confirmed, I look forward to working with Chairman 
Hensarling and other members of the House and Senate to develop 
legislative solutions that improve U.S. financial system stability.

    Amended Answer. The Dodd-Frank Act has changed regulation of many 
aspects of the financial system, created a liquidation authority for 
large financial companies, and changed some of the ways in which 
regulators monitor financial system activities. Oversight and 
activities in some financial activities likely improved following 
enactment and subsequent implementation of Dodd-Frank, while some risks 
and uncertainties may have increased as a result of enactment and 
implementation. Ultimately, the overall ``systemic'' implications of 
the Dodd-Frank Act would be best looked at using empirical assessments, 
though such an exercise is challenging. I look forward to continuing to 
monitor empirical assessments of the effect of Dodd-Frank on financial 
activities, and I will work with Congress, market participants, and 
regulators to ensure the safety and soundness of the financial system.

                                 ______
                                 
             Question Resubmitted by Hon. Michael F. Bennet
    Question. Both the Child and Earned Income Tax Credits have lifted 
millions of families and children out of poverty. Families with the 
youngest children, however, often receive smaller amounts through the 
Child Tax Credit. I recently introduced a bill to make the child credit 
more refundable and larger for families with young children. Would the 
incoming administration consider these types of improvements to the 
Child Tax Credit as part of tax reform?

    Answer. Thank you for your work on this important issue. Improving 
access to and the affordability of childcare is a priority for the new 
administration. President Trump proposed several options in this area 
during the campaign, and we look forward to working with you and the 
rest of Congress to advance meaningful reforms.

    Amended Answer. First, I believe that we need to consider these 
issues in the context of overall tax reform. If confirmed, I am 
committed to working with you to find the best way possible to 
restructure the existing Child Tax Credit, including looking at the 
size of the credit and the extent to which the credit is refundable. 
You raised the issue of the age of a family's children. I think we need 
to look at how the Child Tax Credit can be structured to help families 
with younger children, particularly in relation to the President's 
desire to help families pay for child-care costs.

                                 ______
                                 
              Questions Resubmitted by Hon. Mark R. Warner
                             new capitalism
    Question. There are many ways that globalization and automation 
have disrupted and displaced millions of American workers, especially 
those with low and moderate job skills. I believe this has created the 
economic anxiety we've seen reflected in our nation's politics, on the 
left and the right. I also have been shocked by recent trends among 
many in corporate America to prioritize the short- term sugar high of 
increased dividends and share buybacks over longer-term investments in 
their people or communities or R&D.

    Leaders in your own field like Warren Buffett and Larry Ellison at 
Blackrock have drawn attention to this preoccupation with short-term 
profits for temporary shareholders versus longer-term investment, and 
the way it has undermined overall public confidence and trust in modern 
America capitalism.

    Do you agree that companies value short-term profits and 
shareholders over longer-term investment?

    Answer. Different companies value different approaches, but overall 
I believe that more focus should be on long-term investment.

    Question. Do you support modifications in the current incentive 
structure to reward longer-term stock holds?

    Answer. Preferences in the tax code already exist for holding 
longer-term assets.

    Amended Answer. I support the current tax system that rewards long-
term capital gains.

    Question. Do you think we have a role to play in encouraging public 
corporations, their CEOs and boards, to focus on a longer-term horizon?

    Answer. The tax code already incentivizes this behavior, however we 
should always look to additional ideas and policies.

    Amended Answer. If confirmed, I would support policies that would 
encourage public corporations' CEOs and boards to focus on long-term 
profits and growth. However, I believe these decisions belong with the 
boards of directors.

    Question. Do you support innovations in the tax code to do more to 
help workers retrain and move up to new and better jobs?

    Answer. Yes, if confirmed, I would welcome the opportunity to work 
with you on ways to help workers retrain for better careers.

    Amended Answer. Yes, I support innovations in the tax code that 
would help workers retrain and move up to new and better jobs.

    Question. Do you believe that we should be developing more 
effective and portable unemployment and health insurance?

    Answer. It is important that workers receive unemployment and 
insurance benefits when they qualify. If confirmed, I would look 
forward to the opportunity to work with you on these issues.

    Senator Warner would like to know what tax incentives and 
preferences already exist in the tax code to promote long-term 
investment and encourage companies to focus on a longer-term horizon.

    Amended Answer. Yes, I believe that we should look at solutions 
that will be more effective for portable unemployment and health 
insurance.

                                 ______
                                 
           Questions Resubmitted by Hon. Robert P. Casey, Jr.
    Question. Mr. Mnuchin, in addition to your providing the total 
number of foreclosures executed by OneWest bank, please provide the 
following sub-data:

    a.  The foreclosure rate on mortgages owned by OneWest;
    b.  The foreclosure rate on mortgages serviced by OneWest;
    c.  The modification rate of mortgages owned by OneWest; and
    d.  The modification rate of mortgages serviced by OneWest.

    Answer. Because I am no longer employed by or affiliated with CIT 
Group, I do not have access to this information. However, I note that 
responsive information is available from publicly available sources.

    You did not provide a response to the question. Further, you 
provided assurances when we met that you would provide national 
foreclosure data and assurances to my staff you would provide a copy of 
the letter referenced in your testimony to the Committee. Please do so.

    Amended Answer. I have requested the additional information as well 
as the referenced letter.

    Question. The President told The Wall Street Journal on Friday, 
January 13th that he may lift sanctions on Russia. As the nominee for 
the agency responsible for enforcing sanctions, were you part of the 
decision-making process leading to his announcement?

    If so, please describe what factors and equities you discussed.

    Answer. As I have not yet been confirmed as Secretary of the 
Treasury, I do not think it would be appropriate for him to consult 
with me at this time.

    You did not provide a response to the question.

    Amended Answer. No, I was not part of the decision-making process, 
as I have not yet been confirmed as Secretary of the Treasury.

    Question. Mr. Mnuchin, one of the most significant scandals during 
the financial crisis was the practice of ``robo-signing'' whereby bank 
employees rapidly approved foreclosure documents without thorough 
review. Many were wrongfully foreclosed upon on account of these 
practices. Did OneWest ``robo-sign'' documents relating to foreclosures 
and evictions?

    Answer. OneWest Bank did not ``robo-sign'' documents, and as the 
only bank to successfully complete the Independent Foreclosure Review 
required by Federal banking regulators to investigate allegations of 
``robo-signing,'' I am proud of our institution's extremely low error 
rate.

    You stated in your response that ``OneWest did not robo-sign'' 
documents. However, a 2011 Reuters investigation found that at least 
five servicers in recent months ``have filed foreclosure documents of 
questionable validity: OneWest Bank, Bank of America, HSBC Bank USA, 
Wells Fargo, and GMAC Mortgage.'' Regulatory reviews found critical 
weaknesses in governance, documentation, and oversight that ``resulted 
in unsafe and unsound practices and violations of applicable federal 
and state law and requirements.''

    Additionally, you stated you were proud of your ``institution's 
extremely low error rate.'' However, that error rate is relative to the 
other banks under review for engaging in ``unfair and unsound 
practices.'' There were 6,500 banks that did not have to go through any 
review at all. OneWest had a 6% error rate for mortgages to members of 
the military protected by the Service Member Civil Relief Act. These 
and other errors affected more than 5.6 percent of all borrowers, 
10,700 homeowners. Do you believe an error rate of 6% is an appropriate 
level when someone's home is in the balance? Please amend your response 
to reflect answers to the original and these additional questions.

    Amended Answer. The concept of ``robo-signing'' generally referred 
to two distinct but related issues: (a) a signer of a foreclosure 
affidavit attested to facts that were not verified to be accurate; or 
(b) a signer of a foreclosure affidavit represented himself or herself 
to be someone else (for example, if the signer was employed by a 
company that did not have standing to foreclose but represented himself 
or herself as someone with standing to foreclose). Page 14 of the OCC's 
April 2014 report on the Independent Foreclosure Review (``IFR'') 
demonstrates that OneWest did not do these things.

    On the review category ``services did not have standing to 
foreclose,'' OneWest's error rate was 0 percent.

    On the review category that investigated the possibility that 
foreclosure occurred without proper facts supporting the foreclosure 
(``Borrower not in default''), OneWest's error rate was .001 percent.

    In fact, for 12 of the 14 categories independently reviewed as part 
of the IFR, OneWest's error rate was less than 0.5 percent.

    It is true that small numbers of borrowers were found to have been 
affected by errors, including in the categories you mentioned, and 
OneWest fully remediated those borrowers in the manner prescribed by 
Federal regulators.

    Question. Mr. Mnuchin, did OneWest engage in the practice of ``dual 
tracking''-- negotiating with a homeowner while pursuing foreclosure?

    Answer. ``Dual tracking'' was a practice that historically occurred 
in the mortgage industry as standard mortgage servicing policies 
followed the requirements set by Fannie Mae and Freddie Mac. Shortly 
after OneWest Bank's inception, the GSEs and other standard-setters 
recognized that dual-tracking should be restricted, and OneWest 
supported and followed these restrictions.

    You provided a response, but not a response to the question. 
Further, in your response you stated OneWest ``supported and followed'' 
restrictions on dual tracking. However, in September 2013, ``a San Luis 
Obispo County couple won a seven-figure settlement and title to their 
two houses from OneWest when a judge determined the bank had engaged in 
dual tracking.'' Would you like to amend your response?

    Amended Answer. To be more specific, at one point dual tracking was 
a common and accepted procedure based on investor requirements and loan 
modification program terms and conditions. As such during this period 
OneWest conformed with that standard and did dual-tracking as a matter 
of practice. At a later date, State laws and Federal regulatory 
guidance came out which eliminated dual tracking and the industry, and 
OneWest, changed its policy. I do not recall the specific circumstances 
of the settlement that you mention and whether it dealt with dual-
tracking or not.

    Question. If OneWest served an individual with reverse mortgage 
foreclosure papers on account of OneWest's belief that the individual 
was not residing in their home, but the papers were served to the 
individual at their home, did that automatically end the foreclosure 
proceeding?

    Answer. HUD regulations governing the Federal Home Equity 
Conversion Mortgage (``HECM'') mortgages require that borrowers live in 
the mortgaged property as their primary residence, and require 
foreclosure when the borrower(s) have moved out of the property. 
Consistent with these Federal regulations, OneWest's Financial Freedom 
division did initiate foreclosures when it determined the borrowers no 
longer lived in the property. I am not personally aware of information 
relating to part (b) of this question.

    Your response that you are not aware of information relating to the 
question implies you were not aware of the foreclosure practices at the 
bank you ran, despite holding weekly meetings concerning disputed 
foreclosures, as you discussed in the hearing. If you were unaware of 
the foreclosure practices at your bank, how can you reassure the 
committee that you will show greater care to such issues as Treasury 
Secretary?

    Amended Answer. Thank you for the opportunity to clarify my 
response. I read the original question as being posed in the 
hypothetical. I do not recall this circumstance ever arising. In 
addition, the weekly meeting referenced in my testimony focused on 
matters that had arisen, but that could not be resolved through 
OneWest's normal resolution process. I also do not recall the 
circumstance described in this question as arising in any of those 
weekly meetings.

    Question. Mr. Mnuchin, please describe how much job growth 
nationally you aim to achieve by 2020? Please also describe what kind 
of job growth you aim to achieve in rural communities, counties like 
Fayette, Wyoming, and Huntingdon in Pennsylvania?

    Answer. We do not have any specific estimates at this point in 
time. I can assure you that President Trump and I are committed to work 
with you and others to see that no community is left behind.

    You did not respond to the question. As the President repeatedly 
stated a goal of 25 million jobs created in the next 10 years, it 
belies reason that his administration would not have benchmarked goals 
for achieving such growth in the next 4 years.

    Amended Answer. The President views this initiative over a 10-year 
period, and thus the benchmarks on which I would be focused would be 
for that period. If confirmed, I look forward to working with Congress 
on these issues and advising the President accordingly if Congress 
believes additional benchmarks are necessary.

    Question. Will you oppose turning Medicare into a voucher or 
premium support program?

    Answer. I will work with the administration on this issue.

    You did not respond to the question.

    Amended Answer. Medicare has served millions of Americans over many 
years. Our goal when it comes to Medicare has to be to ensure that the 
program is fiscally viable and serves the American people for 
generations to come. If confirmed, I would look for ways to reduce the 
cost of Medicare while simultaneously improving the way it serves our 
nation's seniors.

    Question. Can you explain why you believe a tax deduction of the 
cost of child and dependent care is superior to a tax credit?

    Answer. President Trump's commitment to helping Americans with 
children find more affordable, quality child care will be a top 
priority of the new administration. If confirmed, I will work with all 
stakeholders to help make this goal a reality wherever it falls under 
the aegis of Treasury.

    You did not respond to the question. During his campaign, the 
President proposed a deduction for the cost of child and dependent 
care. The question asks you to explain why you believe a tax deduction 
(which the President proposed) is superior to a tax credit.

    Amended Answer. The President wants to help families deal with the 
cost of child and dependent care. Part of the proposal was to allow a 
deduction for child care expenses. If confirmed, I would look forward 
to working with Congress on ways to achieve this goal.

    Question. Can you expand on what you meant when you said the 
wealthy would not receive an absolute tax cut? What income level do you 
define as wealthy? Will this be on earned income--as in wages--or all 
income, including investment income?

    Answer. I am committed to working with Congress to craft the best 
possible tax reform plan to serve all Americans.

    You did not respond to the question.

    Amended Answer. Our objective is to have any tax cuts offset by 
economic growth. If confirmed, I look forward to reviewing possible tax 
cuts with the talented professionals in Treasury's Office of Tax 
Policy. I would also look forward to working with Congress to review 
the administration's proposed distribution of tax cuts when it becomes 
available.

    Question. As a member of the Sears board, you approved the sale of 
some of the only remaining assets held by the company, including 
property and iconic brands. Do you stand by that decision?

    Answer. Yes. The Sears board approved the sale of certain assets 
based upon its business judgment at the time of the decision. Sears 
continues to operate over 1,400 stores and has approximately $10 
billion of assets. The characterization of ``some of the only remaining 
assets'' suggests that the assets sold were a large majority of the 
total assets at the time of sale, which isn't accurate.

    Please clarify your response to your question. Your assertion that 
Sears's remaining real estate assets are worth $10 billion is doubtful. 
This assumes the REIT sale of Sears Holdings' real estate accounted for 
around 20% of Sears's owned locations. However, in actuality, the REIT 
and joint ventures account for approximately 40% of Sears's owned 
locations.

    If instead you were referring to Sears's total assets, that sum is 
inclusive of merchandise inventories, which by its nature is an asset 
to be sold.

    Amended Answer. Yes, I stand by the board's decision.

    Question. Do you believe the sale of those assets, including the 
sale of Sears commercial property to a REIT, was in the best interest 
of the over 200,000 hardworking Sears pension beneficiaries?

    Answer. Sears has been in the middle of a significant 
transformation designed to address the dramatic change that has 
occurred in the purchasing behaviors of the American consumer. As a 
company that has long been one of the largest employers in the United 
States, it is distinguished from many of its retail competitors by both 
its long history and its large pension plan. Many of Sears' competitors 
either have no pension plans or relatively small plans, because these 
companies did not exist until well after the end of World War II, after 
which pensions became a more significant form of compensation for many 
years, until they began to be replaced by defined contribution plans.

    In 2005, when Sears Holdings Corporation was formed as a result of 
the merger of Sears and Kmart, the Sears and Kmart pension plans 
collectively had well over 300,000 beneficiaries, and the plans both 
were underfunded. Sears Holdings inherited the pension plan of Sears in 
the merger and the Kmart pension plan was assumed by shareholders upon 
the emergence of Kmart from bankruptcy in 2003. Sears Holdings has met 
all of its funding obligations required by law and currently has 
approximately 185,000 beneficiaries in its pension plan.

    Sears consulted and ultimately entered into a protection agreement 
with the PBGC, which provided additional protection to the pension 
plan.

    You provided a response, but not a response to the question that I 
asked.

    Amended Answer. Yes, I believe that the sale was in the best 
interest of the Sears' pension beneficiaries and other stakeholders.

    Question. The Secretary of the Treasury has the significant 
responsibility to ensure the U.S. Government pays its bills in full and 
on time. I believe a man, and in this case, a government, is only as 
good as its word. It is a word our government has never broken. Will 
you vow you will continue to pay all our bills in full and on time, as 
has every Treasury Secretary since our first--Alexander Hamilton?

    Answer. If confirmed, I will strive to run an efficient and 
effective department that will adhere to and abide by the 
appropriations enacted by the Congress.

    You provided a response, but not a response to the question that I 
asked.

    Amended Answer. Yes, I will vow to continue to pay all our bills in 
full and on time.

                                 ______
                                 
                 Questions Resubmitted by Sherrod Brown
    Responses to questions for the record were sloppy, evasive, and 
inadequate.

    Question. Mr. Mnuchin, in addition to Senator Heller's request for 
foreclosure data in Nevada, would you please provide a State-by-State 
breakdown of the foreclosures initiated by OneWest? Would you also 
provide a breakdown of the number of permanent HAMP modifications as 
well as the number of permanent propriety modifications that OneWest 
completed while you were chairman?

    Answer. Because I am no longer employed by or affiliated with CIT 
Group, I do not have access to this information.

    Amended Answer. Senator Heller's request should be included in the 
record. I received the answer to Senator Heller's request, which is 
included. I will put in the request for a State-by-State breakdown for 
you.

    Question. Mr. Mnuchin, I understand that OneWest sent a letter to 
the OCC explaining the problems in the HECM book of Financial Freedom 
when you were seeking approval for a merger with CIT, but you 
referenced a 2015 letter that you sent to HUD. Would you provide the 
committee a copy of the letter referenced in your testimony?

    Answer. Because I am no longer employed by or affiliated with CIT 
Group, I do not have access to this information.

    Amended Answer. I have requested a copy of the letter from CIT.

    Question. Mr. Mnuchin, President Trump's nominee for HUD Secretary, 
Dr. Ben Carson, raised questions about the continuation of the 30-year, 
fixed-rate mortgage in his confirmation hearing.

    Do you believe the widely available 30-year fixed-rate mortgage is 
an important aspect of our housing market?

    Amended Answer. Yes, I believe this is one of many important 
aspects for our housing market.

    Question. What would happen to home equity and home values if 
access to the 30-year fixed rate decreased or if the product became 
more expensive?

    Amended Answer. Home values have appreciated significantly in many 
areas of the country. Any limitation of 30-year fixed rate financing or 
fixed costs may have impacts on certain markets.

    Question. You mentioned that you want to seek a housing finance 
market solution that doesn't put taxpayers at risk or eliminate capital 
for the housing market. Given that retained capital at the GSEs will be 
zero a year from now, can you provide more information about a solution 
that protects taxpayers, maintains capital, and expands access and 
affordability for borrowers who can sustain homeownership?

    Amended Answer. Any solution will be dependent upon the GSEs being 
capitalized properly and other such controls that eliminate risk to 
taxpayers.

    Question. In 2014 and 2015, many of your business dealings 
converged. In October 2014, you joined the board of directors of 
Relativity Media as non-executive co-
chairman. Around the same time, Dune Capital Investment (Dune Capital 
Partners IV), a fund you managed, invested in Relativity, and your 
bank, OneWest, loaned hundreds of millions of dollars to Relativity 
Media. Please answer the following questions.

    At the time you joined Relativity's board, how much had OneWest 
loaned or invested in Relativity, and how much more did it lend or 
invest between October 2014 and May 2015 when you left the board?

    Answer. OneWest did not make any equity investments in Relativity. 
In response to the committee staff questions dated January 4, 2017, I 
requested information from OneWest/CIT regarding the banks extensions 
of credit exceeding the Regulation O disclosure requirements. The 
information I received was provided to the committee staff on January 
12, 2017. In response to the committee staff questions dated January 
13, 2017, I requested additional identification of each loan. The 
information I received from OneWest/CIT was provided to the committee 
on January 18, 2017.

    Amended Answer. As disclosed in the information provided to the 
committee staff, the bank did not extend additional credit.

    Question. OneWest/CIT has had several allegations leveled against 
it for violating rules or laws administered by HUD or FHA. What 
processes or protections have you, or will you, and Dr. Carson put in 
place to ensure that HUD, FHA, and its Inspector General have a fair 
process for evaluating your former institution's dealings with HUD and 
FHA, and that HUD, FHA, and the Department of Justice are impartial and 
not influenced in an improper manner?

    Answer. Because I am no longer employed by or affiliated with CIT 
Group, I do not have access to this information.

    Amended Answer. As reflected in my ethics agreement, I will not 
participate personally and substantially in any particular matter 
involving specific parties in which I know CIT Group is a party unless 
authorized to participate by ethics officials. Upon confirmation, I 
will implement procedures that will screen matters coming before me to 
facilitate compliance with my recusal obligations.

    Question. In the confirmation hearing, you claimed that Relativity 
Media did not receive Chinese investment. Yet news reports, such as an 
article in The Los Angeles Times (``Relativity Media expands in China 
with the new deal, partners,'' June 16, 2014), identified two ``new 
Chinese partners'' in Relativity Media as Jiangsu Broadcasting Corp. 
and Seedshine Capital. The article quoted your friend and Relativity 
Media chief executive Ryan Kavanaugh about the Chinese partnership: 
``The partnerships will deepen our relationship with the Chinese media 
and entertainment industry and provide a world-class platform from 
which to co-develop Chinese and international film and television 
content from two leading organizations.'' Having considered this 
information, please explain the nature of the business relationship 
between Relativity, Jiangsu, and Seedshine. Would you still testify 
before the Finance Committee that Relativity Media had no Chinese 
investors?

    Answer. To the best of my knowledge, these entities were not 
investors in Relativity Media Holdings, which was the question I was 
answering.

    Amended Answer. Although it was reported in the press that 
Relativity Media ``signed a strategic advisory agreement with 
Industrial and Commercial Bank of China Limited via which investment 
firm SeedShine Capital has entered a binding agreement to invest'' 
(Yahoo News, June 16, 2014), to my knowledge, this investment never 
closed and they were not investors in Relativity Media.

    Question. As I mentioned in the confirmation hearing, I am 
concerned that the U.S. Government has not been tough enough on China, 
and American workers, particularly in the steel and aluminum 
industries, have paid the price. What specific tools and authority at 
Treasury will you use to address this unbalanced trade relationship and 
increase China's compliance with its international trade obligations? 
How do you see Treasury policies and actions benefitting laid-off 
steelworkers in Lorain, OH?

    Answer. (Judy Shelton) Treasury has congressional authority to 
examine the 
exchange-rate practices of major trading partners to identify nations 
that engage in currency manipulation. I will work with the Secretary of 
Commerce to help ensure that the unfair trade laws of the United States 
are enforced. I will also work with Congress to ensure our trade laws 
adequately address harm to our industries and workers from unfair trade 
practices.

    It is difficult to understand the intent of including Judy 
Shelton's name in the text. Even if we assume that this is simply an 
oversight on the part of Mr. Mnuchin and his staff, it speaks to the 
general quality of the work done in preparing these responses.

    Amended Answer. Including the name in the text was an oversight, 
and I sincerely apologize.

    Question. Please list three ways we can expand the Earned Income 
Tax Credit and the Child Tax Credit to promote work.

    Answer. I look forward to working with your staff on this issue.

    The Earned Income Tax Credit and the Child Tax Credit are the 
country's largest antipoverty program outside of Social Security. The 
credits support tens of millions of working families and are the tax 
code's most effective work incentive. They are bipartisan and have been 
supported by the last seven Presidents. Mr. Mnuchin owes the committee 
more than to profess to have no knowledge of these provisions.

    Amended Answer. I share the President's commitment to make child 
care more affordable for working parents. The President is also 
committed to help stay-at-home moms and dads. While this needs to be 
considered in the context of broader tax reform, there are a number of 
options Congress and the administration could consider to promote work. 
There are many ways of doing this and we will work with you on 
reviewing our options. In addition, I recognize that tax reform may 
involve consideration of changes to the Earned Income Tax Credit and 
Child Tax Credit, and I look forward to working with Members of 
Congress, including you and your office, on these provisions.

    Question. What are your views on ways to strengthen the American 
Opportunity Tax Credit?

    Answer. If confirmed, I will look forward to discussing with your 
office your views on the American Opportunity Tax Credit.

    Senator Brown asked Mr. Mnuchin to supply his views on a tax credit 
that helps make college affordable for millions of students. Mr. 
Mnuchin's response was to suggest an openness to discussing Senator 
Brown's views on the subject at some point to be determined in the 
future. Senator Brown is well-aware of his own views. He is not aware 
of Mr. Mnuchin's and asked the question to gain some insight.

    Amended Answer. The President and I are committed to help make 
college more affordable. I'm sure we can agree that the tax code's 
existing provisions in this area are confusing. We need to look at how 
we can simplify and harmonize provisions that are designed to help 
defray the costs of college. As we deal with tax reform, I look forward 
to working with you to determine the best way to achieve our mutual 
objective.

                                 ______
                                 
                 Prepared Statement of Hon. Ron Wyden, 
                       a U.S. Senator From Oregon
    Aside from the President, there may be no individual with a tighter 
grasp on the levers of this country's economy than the Secretary of the 
Treasury. That's been true since the days of Alexander Hamilton.

    When you read about the nominee for Treasury Secretary, given all 
the power that position holds, you hope not to see phrases like 
``foreclosure machine,'' ``redlining,'' ``offshore funds,'' and 
``predatory lending.''

    I'm sure today's hearing will cover a wide range of matters, 
whether it's Mr. Mnuchin's background and qualifications or the 
incoming administration's policy agenda. I'll start with a topic that 
cuts across all those matters: the truly disgusting inequity and abuse 
of America's tax laws.

    The tax code today is a tale of two systems. For wage earners like 
cops and nurses, there are no special tax dodging strategies or 
loopholes. The rules that apply to them are firm and involuntary. Once 
or twice a month, their taxes come straight out of their paychecks, no 
cutting corners.

    The rules are different for the powerful and well-connected. They 
have armies of lawyers and accountants at their disposal. With the 
right advice, the most fortunate individuals in this country can decide 
how much tax to pay and when to pay it.

    Let's look at Mr. Mnuchin's history. There's no clearer example 
than Mr. Mnuchin's hedge fund setting up outposts in Anguilla and the 
Cayman Islands, an action that can be explained only by the islands' 
zero-percent tax rate. It certainly wasn't for ease of commute or the 
infrastructure. In Mr. Mnuchin's case, millions of dollars in profits 
from Hollywood exports like the movie ``Avatar'' were funneled to an 
offshore web of entities and investors.

    When Mr. Mnuchin's bank was up for a merger that had the potential 
to deliver a huge financial gain, a foundation he chaired reportedly 
used tax-exempt dollars to fund an astroturfing campaign pushing for 
the deal's approval. In the public comment period of a potential 
merger, this is the equivalent of stuffing the ballot box.

    Mr. Mnuchin also operates seven personal trusts, including one 
known as a ``dynasty trust'' that will shield tens of millions of 
dollars from taxes. In my view, if you look back in our history, this 
Nation was founded to reward merit, not to perpetuate dynasties.

    Now, as a nominee for a Cabinet position, Mr. Mnuchin could be in 
line for a special, elective, Federal tax deferral on money made by 
selling stocks and bonds. That is the very definition of getting to pay 
what you want, when you want.

    There's a common answer when these kinds of tax tricks come under a 
spotlight. It's said that the people who use them are just following 
the laws on the books, and that might be true.

    The outrage in tax law is what's legal, and that every member of 
the Senate has allowed it to stay legal. In my view, this outrage will 
only change when taxpayers are no longer divided into two very 
different sets of tax rules.

    That provides a segue into important policy questions. Setting 
aside Mr. Mnuchin's finances and background, the tax reform agenda 
already being advanced by the incoming administration would 
perpetuate--and in fact worsen--the unfairness in the tax code on the 
books today.

    On the campaign trail, the President-elect delivered lots of tough 
talk about fixing the tax system. He said he alone could fix it because 
he'd spent a career using the system to his advantage. As for the 
details, the few tax reform position papers the President-elect's team 
put forward didn't get much attention outside the business pages.

    But just after Mr. Mnuchin's nomination was announced, he laid down 
a clear and specific marker. I'll quote Mr. Mnuchin directly: ``Any 
reductions we have in upper-
income taxes would be offset by less deductions, so there would be no 
absolute tax cut for the upper class. . . .''

    I'll repeat that last part, and for the sake of brevity, I'm going 
to start calling it the Mnuchin Rule: ``. . . no absolute tax cut for 
the upper class. . . .''

    Let's take stock of what's already happening on Capitol Hill, even 
before inauguration day. The first major act of the unified Republican 
government, repealing the Affordable Care Act, would immediately 
violate the pledge of no tax cuts for the wealthy. Bottom line, the ACA 
repeal scheme that kicked off last week is a Trojan horse of tax breaks 
for the most fortunate. It's paid for by taking tax benefits for health 
insurance away from millions of working people.

    Then it's back for round two later in the year, under an emerging 
Republican plan to fast-track an even bigger tax break for the wealthy. 
In my view, this is proof that the campaign promises about fixing the 
tax system were just an elaborate head fake. For example, the 
President-elect said he'd close the carried interest loophole, a 
favorite of investment fund managers, but his plan actually gives them 
a 25 percent tax cut. In fact, it slashes tax rates for corporations 
and the wealthy across the board at a cost of trillions of dollars. So 
it sounds like the Mnuchin Rule is already on the ropes.

    What would the new administration's tax plan do for people of more 
modest incomes? Millions of working Americans, mostly single parents, 
would get hit with tax increases because they'd lose head of household 
status when they file.

    If you wanted to write a tax plan that would push even more 
Americans out of the economic winner's circle, this is how you'd do it.

    Given how central tax policy is to our jurisdiction, I hope the 
committee is able to discuss those issues today. But of course the 
Treasury Secretary and this committee handle a lot more than taxes, so 
there are other concerns that need to be raised. On a broad level, it's 
my view that Senators will have to make a judgment call about the sort 
of individual they believe should lead the Treasury Department.

    Mr. Mnuchin's career began in trading the financial products that 
brought on the housing crash and the Great Recession. After nearly two 
decades at Goldman Sachs, he left in 2002 and joined a hedge fund. In 
2004, he spun off a hedge fund of his own, Dune Capital. It was only a 
few lackluster years before Dune began to wind down its investments in 
2008.

    In early 2009, Mr. Mnuchin led a group of investors that purchased 
a bank called IndyMac, renaming it OneWest. OneWest was truly unique. 
While Mr. Mnuchin was CEO, the bank proved it could put more vulnerable 
people on the street faster than just about anybody else around.

    While he was CEO, a OneWest vice president admitted in a court 
proceeding to ``robo-signing'' upward of 750 foreclosure documents a 
week. She spent less than 30 seconds on each, and in fact, she had 
shortened her signature to speed the process along. Investigations 
found that the bank frequently mishandled documents and skipped over 
reviewing them. All it took to plunge families into the nightmare of 
potentially losing their homes was 30 seconds of sloppy paperwork and a 
few haphazard signatures.

    These kinds of tactics were in use between 2009 and 2014, a period 
during which the bank foreclosed on more than 35,000 homes. ``Widow 
foreclosures'' on reverse mortgages--OneWest did more of those than 
anybody else. The bank defends its record on loan modifications, but it 
was found guilty of an illegal practice known as ``dual tracking.'' One 
bank department tells homeowners to stop making payments so they can 
pursue modification, while another department presses on and hurtles 
them into foreclosure anyway.

    OneWest made only two loans to African American borrowers in 2014 
and 2015, according to an analysis of Federal data by the California 
Reinvestment Coalition. Just a fraction of its branches occupied 
storefronts in minority communities, and none were in predominantly 
African-American communities. But minorities still represented a 
disproportionately large share of the people booted out of their homes.

    Under Mr. Mnuchin, OneWest churned out foreclosures like Chinese 
factories churned out Trump suits and ties. And with the combination of 
extreme foreclosure tactics and a bailout from the FDIC, OneWest became 
a rainmaker for Mr. Mnuchin and his fellow investors. At precisely the 
same time the foreclosure machine was running, OneWest funds were 
poured into glamorous investments in Hollywood.

    In 2012, OneWest struck an agreement to loan hundreds of millions 
of dollars to a movie studio called Relativity Media. In 2014, while he 
was the CEO of OneWest's holding company, Mr. Mnuchin bought his own 
stake in Relativity. He took a seat in the boardroom and was appointed 
co-chairman. He even bought a private jet with Relativity's co-founder.

    But the company quickly tanked. OneWest pulled out $50 million, 
emptying several Relativity accounts, including one earmarked for guild 
expenses that included wages for contractors and tradesmen. Mr. Mnuchin 
bailed out just before the studio declared bankruptcy.

    There have been press reports that the FBI has denied a Freedom of 
Information Act request concerning Relativity Media, on the ground that 
disclosure is likely to interfere with a pending law enforcement 
proceeding. I have read the FBI background report on Mr. Mnuchin, and I 
saw no discussion of any such enforcement action in the report. That 
may be entirely appropriate, but I would like to continue to work with 
the chairman to find out what the enforcement proceedings cited in the 
FOIA denial are and how they relate to the nominee, if at all.

    For Mr. Mnuchin, Relativity's failure wasn't much of a setback, 
considering the profits that OneWest's foreclosure machine was still 
pulling in. The purchase price of the bank in 2009 was less than $1.6 
billion. After 5 years of foreclosures and profits, it sold for $3.4 
billion to CIT Group.

    Outside OneWest and Relativity, Mr. Mnuchin spent years as a 
director of the holding company that owned Sears, an iconic American 
brand. He served on the committee that watchdogged the Sears' employee 
pension fund. The record shows the plan was routinely mismanaged and 
underfunded.

    Retirees recently saw their pensions cut, losing a monthly health 
care stipend that was enough to offset roughly a third of the premiums 
seniors pay for Medicare Part B. Sears has also shuttered hundreds of 
stores nationwide over the last few years, and recently announced 
another round of closures.

    Once again showing his impressive capacity to advantage himself 
while others fell behind, Mr. Mnuchin joined a small group of investors 
that spun off the company's real estate into a separate trust. It was 
arguably the most valuable asset Sears had left. So as retirees watch 
their pensions shrink and Sears' remaining workers face an uncertain 
future, this small number of powerful individuals made out fine.

    As I wrap up, I want to step back for just a moment to talk about 
the role of Secretary of the Treasury. The person who leads the 
Treasury Department has influence over Americans' paychecks and 
mortgages, the caliber of job opportunities they face, the safety and 
stability of the financial system that holds and invests their hard-
earned dollars, and much more. They have the power to help reverse 
decades of yawning inequality that have hollowed out the middle class, 
dimmed the hopes of younger generations and left millions buried in 
debt.

    The Treasury Secretary ought to be somebody who works on behalf of 
all Americans, including those who are still waiting for the economic 
recovery to show up in their communities. When I look at Mr. Mnuchin's 
background, it's a stretch to find evidence he'd be that kind of 
Treasury Secretary.

    That said, Mr. Mnuchin, I appreciate your willingness to serve and 
answer questions before this committee, and I look forward to your 
testimony.

                                 ______
                                 

                             Communications

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          Computing Technology Industry Association (CompTIA)

                           515 2nd Street, NE

                          Washington, DC 20002

                            www.comptia.org

Thank you for the opportunity to express our views on this very 
important subject. On behalf of the Computing Technology Industry 
Association (CompTIA), I urge members of the Senate Finance Committee, 
Secretary-designate Mnuchin, and the Congress as a whole to pursue 
much-needed reforms to our corporate tax code.

CompTIA is the world's leading technology association, with 
approximately 2,000 member companies, 3,000 academic and training 
partners, over 100,000 registered users and more than 2 million IT 
certifications issued. CompTIA's unparalleled range of programs foster 
workforce skill's development and generate critical knowledge and 
insight--building the foundation for technology's future.

A competitive tax policy that includes a lower rate, employs 
territoriality, and incentivizes innovation and investment in the 
United States, is critical for American technology companies to thrive 
in the United States and the world. Our industry and many others are 
constrained by an outmoded and complex federal tax code that is in need 
of overhaul to reflect the dynamism of American ingenuity. The U.S. 
corporate tax rate is among the highest in the industrialized world, 
and of the countries that employ a territorial tax system, the U.S. 
corporate rate is more than 50 percent higher (39 percent) than the 
next ranking country (24 percent).

Our members support leveling the playing field both domestically and 
internationally, seeking to eliminate the inequities of the current tax 
code, including the ever-increasing costs associated with tax 
compliance. Any corporate tax reform proposals must treat the 
information technology industry equitably--both large companies, as 
well as small and medium-sized businesses.

Specifically, CompTIA supports the following principles within the 
broader context of corporate tax reform:

      Lower the corporate tax rate to 25 percent. U.S. companies are 
burdened with the highest corporate tax rate among OECD countries, 
making them less competitive with their foreign competitors. We support 
lowering the corporate tax rate to 25 percent, without increasing taxes 
on small and medium-sized businesses.

      Enact a territorial international tax system. The United States 
is one of a handful of developed countries that taxes corporate 
earnings on a global basis. This means that a U.S. company's foreign 
earnings are subject to U.S. tax when repatriated, increasing the 
foreign tax rate on these earnings to the U.S. rate. We support 
enactment of a territorial international system that would remove the 
punitive tax that prevents foreign earnings from be repatriated to the 
United States.

      Tax ``innovation box profits'' at a lower rate than the 
corporate rate of 35 percent. We support policies that foster 
innovation such as a ``patent box'' to attract and retain domestic 
intellectual property development and ownership. A lower rate of 
taxation on innovation would encourage companies to continue to 
reinvest in domestic IP development while remaining competitive 
globally.

      Make the CFC look-through rule permanent. The territoriality 
provisions of most other developed countries allow domestically based 
companies operating abroad to structure their foreign operations 
without the additional home country tax of the sort imposed by the U.S. 
subpart F rules. In December 2015, the rule was extended through FY20 
in the FY16 omnibus. Making the CFC look-through permanent would allow 
U.S. based companies to marshal their capital outside the United States 
in a way that would enable them to compete on a more level playing 
field with their foreign competitors.

      Tax repatriated profits at a lower rate. We support legislation 
that incentivizes U.S.-based companies to reinvest profits back into 
the United States by allowing those repatriated profits to be taxed at 
a lower rate. Currently, companies are discouraged from repatriating 
their profits because of the high corporate tax rate that would result.

The last major tax reform occurred in 1986. While many support reform, 
congressional debate continues, and timing for action remains 
uncertain. Such uncertainty hinders growth. The United States has long 
been the global hub for innovation, but absent broad, commonsense 
reforms to our tax code, innovation, job, and economic growth could all 
be stifled, threatening our position as the global leader.

CompTIA welcomes this opportunity to offer our perspective on this 
issue and others facing the IT industry and nation. The information, 
communication, and technology sector is one of the largest industry 
sectors in the U.S. economy. The market is $3.7 trillion globally, and 
$ 1 trillion in the United States, employing approximately 5.7 million 
Americans. To put it into perspective, the gross output of the 
technology sector exceeds that of the legal services industry, the 
automotive industry, the airline industry, the motion picture industry, 
the hospitality industry, the agriculture industry, and the restaurant 
industry, just to name a few examples (source: U.S. Bureau of Economic 
Analysis).

The technology industry not only helps drive economic growth in a 
multitude of ways, but it continues to significantly enrich how we 
live, work, and play. We stand ready to work with you, and I am happy 
to address any questions you may have.

Respectfully,

Elizabeth Hyman

Executive Vice President, Public Advocacy

                                 ______
                                 
                     Letter Submitted by Mike Jones

U.S. Senate
Committee on Finance
Dirksen Senate Office Building
Washington, DC 20510-6200

To Whom it May Concern:

    I am writing you as an American citizen and a citizen of Nevada 
where the housing crisis hit us the hardest to plead with you not to 
confirm Steven Mnuchin as Treasury Secretary.

    The 2007-2008 economic crash was a scary time in Nevada. The last 
person we need in charge of Treasury is someone whose greed and 
coldness contributed to this.

    This man is known as the ``Foreclosure King'' for a reason, and 
considering our state suffered from mass foreclosures more than just 
about anyone, a vote to confirm him is a slap in the face to the people 
of Nevada and across the country who fell on hard times during this 
crisis.

    A man who would foreclose on an elderly women over being 27 cents 
short on her mortgage payment is not someone who cares about the 
struggles of the average American.

    Donald Trump campaigned to ``drain the swamp,'' and he used Goldman 
Sachs as his punching bag against Ted Cruz and Hillary Clinton. Where 
does he get any sort of justification to name the number two man at 
Goldman Sachs as the person in charge of the economy?

    If you can't see that this is setting us up for another global 
financial collapse, unfortunately I feel that you will realize it 
eventually. When it is too late.

    Please Senators, do the right thing now and vote to stop this 
nomination in its tracks.

Thank you for your service.

Sincerely,

Mike Jones

                                 ______
                                 
                  Letter Submitted by Erica Helm Meade

U.S. Senate
Committee on Finance
Dirksen Senate Office Building
Washington, DC 20510-6200

Dear Senators,

I strongly urge you to oppose the nomination of Steven Mnuchin for 
Treasury Secretary, because appointing him would be the opposite of 
what President-elect Trump promised to do: rid the government of pay-
to-play politics.

Mr. Mnuchin is a Wall Street mogul who has, through predatory lending 
and aggressive foreclosures, enriched himself and his colleagues at 
devastating expense to ordinary families, seniors, and working-class 
communities. As Treasury Secretary, I expect he would institutionalize 
the same abuses, further damaging our society and economy. This is the 
opposite of Mr. Trump's promise to ``drain the swamp'' of bad actors 
and their self-serving practices that harm so many.

Please oppose this nomination.

Thank you most kindly for your attention.

Sincerely,

Erica Helm Meade

                                 ______
                                 
                 Letter Submitted by Jan Tomassone-Bach

January 27, 2017

U.S. Senate
Committee on Finance
Dirksen Senate Office Bldg.
Washington, DC 20510-6200

To the honorable members of the Senate Committee on Finance:

I watched the hearing held on January 19, 2017, to consider the 
nomination of Steven Mnuchin. The vast amount of evidence presented by 
many committee members exposed his unethical practices and self-serving 
behavior leaving in his wake thousands of individuals and families in 
total ruins and devastation. I truly believe Mr. Mnuchin should not be 
nominated to be Secretary of the Treasury.

We need to be protected from people like him. He is not the man to hold 
one of the most important offices in the Nation. He didn't follow the 
rules and failed in providing the highest standard of care when he ran 
businesses, banks, investments, and pensions. With all due respect, 
what makes you think he'll be any different just because he says he 
will? His past actions speak louder than his words. They were border-
line criminal. Oh, but I forget, his weren't as bad as the other 
criminals. Has he really repented?

Based on the millions and millions of dollars he left out of his 
disclosure, then blaming someone else for bad advice, and using the 
excuse that the forms were overwhelming even for him, doesn't pass the 
smell test. The ``I didn't know'' excuse is exactly what we heard from 
the executives who created the financial crises in 2007-2008 and 
recently the Wells Fargo CEO. Today they are personally richer than 
ever yet the public bailed out their institutions. Couldn't he or his 
advisor have picked up the phone and asked about including his real 
estate holdings? Wasn't it important enough?

When I was 18 and applied for a secretarial job at United Airlines 
headquarters after already working there with great reviews, as a temp, 
my application was declined because I listed August 8, 1975 as my high 
school graduation date. It was an honest mistake, but I didn't get the 
job because the head of HR said I lied. I cried like a baby. I can 
blame it on the fact that it was my first real job application, I was 
only 18 and in a hurry, and that the head of HR didn't like it that the 
department head offered me the job before going to HR. Bottom line, I 
didn't get the job because of this error. Why should the standards for 
the Secretary of the Treasury be any less? They aren't any less for 
you, are they?

Again, with all due respect, I have made some snarky remarks, but as my 
Mom used to say, if it looks like a duck, swims like a duck, and quacks 
like a duck, then it's probably a duck! I firmly believe that he will 
blindside all of you and the President, resulting in a devastating 
effect on our economy and economies across the globe. Please, I implore 
all of you, do not nominate Mr. Mnuchin.

Thank you for your consideration, dedication, and commitment to your 
office and the people of the United States.

Sincerely,

Jan Tomassone-Bach



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