[Senate Hearing 115-826]
[From the U.S. Government Publishing Office]


                                                        S. Hrg. 115-826

                   NOMINATIONS OF MICHAEL FAULKENDER 
                         AND ELIZABETH DARLING

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

                                HEARING

                               BEFORE THE

                          COMMITTEE ON FINANCE
                          UNITED STATES SENATE

                     ONE HUNDRED FIFTEENTH CONGRESS

                             SECOND SESSION

                                 ON THE

                             NOMINATIONS OF

  MICHAEL FAULKENDER, TO BE ASSISTANT SECRETARY FOR ECONOMIC POLICY, 
DEPARTMENT OF THE TREASURY; AND ELIZABETH DARLING, TO BE COMMISSIONER, 
 ADMINISTRATION ON CHILDREN, YOUTH, AND FAMILIES, DEPARTMENT OF HEALTH 
                           AND HUMAN SERVICES

                               __________

                            AUGUST 22, 2018

                               __________

[GRAPHIC NOT AVAILABLE IN TIFF FORMAT]                                     
                                     

            Printed for the use of the Committee on Finance

                               __________
                               

                    U.S. GOVERNMENT PUBLISHING OFFICE                    
40-598 PDF                  WASHINGTON : 2020                     
          
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                          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              SHELDON WHITEHOUSE, Rhode Island

           Jeffrey Wrase, Staff Director and Chief Economist

              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......................     2
Cornyn, Hon. John, a U.S. Senator from Texas.....................     5

                        ADMINISTRATION NOMINEES

Faulkender, Michael, Ph.D., nominated to be Assistant Secretary 
  for Economic Policy, Department of the Treasury, Washington, DC     7
Darling, Elizabeth, nominated to be Commissioner, Administration 
  on Children, Youth, and Families, Department of Health and 
  Human Services, Washington, DC.................................     8

               ALPHABETICAL LISTING AND APPENDIX MATERIAL

Cornyn, Hon. John:
    Opening statement............................................     5
Darling, Elizabeth:
    Testimony....................................................     8
    Prepared statement...........................................    21
    Biographical information.....................................    22
    Responses to questions from committee members................    29
Faulkender, Michael, Ph.D.:
    Testimony....................................................     7
    Prepared statement...........................................    34
    Biographical information.....................................    35
    Responses to questions from committee members................    39
Hatch, Hon. Orrin G.:
    Opening statement............................................     1
    Prepared statement...........................................    44
Wyden, Hon. Ron:
    Opening statement............................................     2
    Prepared statement...........................................    45

                                 (iii)

 
                   NOMINATIONS OF MICHAEL FAULKENDER,
                     TO BE ASSISTANT SECRETARY FOR
                     ECONOMIC POLICY, DEPARTMENT OF
                  THE TREASURY; AND ELIZABETH DARLING,
                   TO BE COMMISSIONER, ADMINISTRATION
                   ON CHILDREN, YOUTH, AND FAMILIES
                          DEPARTMENT OF HEALTH
                           AND HUMAN SERVICES

                              ----------                              


                       WEDNESDAY, AUGUST 22, 2018

                                       U.S. Senate,
                                      Committee on Finance,
                                                    Washington, DC.
    The hearing was convened, pursuant to notice, at 9:33 a.m., 
in room SD-215, Dirksen Senate Office Building, Hon. Orrin G. 
Hatch (chairman of the committee) presiding.
    Present: Senators Cornyn, Thune, Toomey, Cassidy, Wyden, 
Cantwell, Nelson, Cardin, Casey, McCaskill, and Whitehouse.
    Also present: Republican staff: Jeffrey Wrase, Staff 
Director and Chief Economist; Nicholas Wyatt, Tax and 
Nominations Professional Staff Member; Tony Coughlan, Tax 
Counsel; and Ryan Martin, Senior Human Services Advisor. 
Democratic staff: Joshua Sheinkman, Staff Director; Michael 
Evans, General Counsel; Tiffany Smith, Chief Tax Counsel; Laura 
Berntsen, Senior Advisor for Health and Human Services; and 
Adam Carasso, Senior Tax and Economic Advisor.

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

    The Chairman. Good morning. I would like to welcome 
everyone to today's hearing.
    This morning we are meeting to discuss the nominations of 
Michael Faulkender to be Treasury Assistant Secretary for 
Economic Policy, and Elizabeth Darling to be Commissioner on 
Children, Youth, and Families at the Department of Health and 
Human Services.
    If confirmed, Dr. Faulkender will support the Secretary of 
the Treasury directly as one of the foremost economic officials 
in our government. That role is an important one, and with the 
important changes from tax reform just starting to take effect, 
Dr. Faulkender's economic analysis will be key. The Office of 
Economic Policy in the Department of Treasury analyzes and 
reports on both current and perspective economic developments 
in the United States and world economies. In his role, Dr. 
Faulkender will lead that office as well as assist in 
determining appropriate economic policies and participate in 
creating the administration's budget.
    This is a brief overview of a rather complex job, one with 
serious and critical duties. But I believe Dr. Faulkender is up 
to the task.
    As you will hear in a few minutes when we introduce both of 
our witnesses, Dr. Faulkender has had a distinguished career in 
academia, where he has risen to the level of an associate dean 
at the University of Maryland's Robert H. Smith School of 
Business and won many teaching awards as well.
    But as mentioned, we are also here today to consider Ms. 
Darling. Ms. Darling has a broad range of experience at the 
Federal, State, and local levels, especially in areas fostering 
collaboration between government and community-based 
organizations.
    If confirmed, Ms. Darling will oversee two important child 
welfare agencies within HHS: first, the Children's Bureau, 
which manages the multibillion-dollar child welfare entitlement 
programs, including foster care, a program that recently 
received a significant bipartisan overhaul from Congress. Ms. 
Darling will also lead the Family and Youth Services Bureau, 
the office serving runaway or homeless youth and supporting 
victims of domestic violence.
    These are very important programs that directly affect the 
lives of millions of Americans each and every year. And the 
work ahead will not be easy. However, I am confident that Ms. 
Darling's prior experience at HHS under the Bush 
administration, and her work in Maryland and Texas, make her a 
qualified candidate for this important position.
    Together, the nominations of both Dr. Faulkender and Ms. 
Darling represent an example of two well-qualified candidates 
being nominated to key positions within the executive branch. 
Confirming these two nominees will help us ensure our 
government can fulfill the promises that we have all made to 
the American people.
    So with that, I will turn to Senator Wyden for his opening 
statement.
    [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.
    Mr. Chairman and colleagues, God has a way of dropping 
earth-shaking news right before Finance Committee hearings. 
This morning's hearing is no different, and the news that broke 
last night about the prosecutions of two Trump associates now 
has ramifications for certainly one of the nominations before 
the committee today.
    The President's personal lawyer and his former campaign 
chairman are now confessed or convicted felons. They join a 
long and growing list of Trump associates who have broken the 
law. Mr. Manafort, relevant to this committee, stole from every 
American taxpayer when he committed tax fraud. Mr. Cohen's 
crimes are also relevant to our investigative work in multiple 
areas. Yet the Trump administration and the Trump Treasury 
Department continue to stonewall this committee's attempts to 
investigate these matters of criminal tax evasion, corruption, 
and foreign influence in our elections. That is why I am 
maintaining holds on all Treasury nominations.
    Yesterday's news makes one matter clear: by refusing to 
answer our questions, the Trump Treasury Department is helping 
to cover up criminal activities. This stonewalling has gone on 
too long. When the Treasury decides to actually cooperate and 
provide satisfactory answers to the questions that Democratic 
members of this committee are asking--not just Republicans--
then it will no longer be necessary to maintain this policy I 
have described of holding nominees.
    Now, on to the two nominations before the committee this 
morning. If confirmed, Dr. Faulkender will head up the Office 
of Economic Policy at the Treasury Department. He will be in 
charge of some of the most important economic analysis that 
comes from the executive branch. It is a significant job, in no 
small part because the Trump administration--particularly when 
it comes to taxes--has proven to be a supplier of economic 
fiction. And you do not have to take my word for it.
    You can ask any typical American worker if they have gotten 
the $4,000 raise they were promised they would get as a result 
of the Trump tax law. Ask any respected mainstream economist 
whether tax handouts to the wealthy and corporations pay for 
themselves.
    These unicorn tax fantasies came straight from the White 
House. Yet during the debate on the tax bill, Secretary Mnuchin 
also fabricated a story about Treasury, and the Office of 
Economic Policy in particular, putting out a comprehensive 
analysis that would prove that these fantasy claims were true. 
What the Treasury did release was not a full report. It was a 
single page, and it failed to meet the middle-school math class 
standard of ``showing your work.''
    So first of all, I hope that if Dr. Faulkender is 
confirmed, he will get the office back in the game on big 
legislative issues. And second, I have a strong hope that he 
will give the Congress what we have not gotten before, and that 
is economic analysis that is trustworthy. It is not going to be 
an easy job, because so often we have seen that this 
administration is allergic to facts. Given how vital a role 
this office plays at the Treasury, and not just on tax policy 
but on trade, markets, and much more, this is an important 
post.
    Finally, let me comment briefly, Mr. Chairman, on Ms. 
Elizabeth Darling. She has been nominated to serve as 
Commissioner of the Administration on Children, Youth, and 
Families.
    Over the last few years, as you know, Mr. Chairman, we have 
worked extensively on a bipartisan basis--let me underline 
that: a bipartisan basis--to pass the largest overhaul of our 
child welfare system in decades. That, of course, is Family 
First. And as I have talked about with Ms. Darling just a few 
minutes ago--and you and I talked about it, Mr. Chairman, 
often--this bill had substantial conservative support, 
particularly in the other body, where they talked about it at 
great length.
    If confirmed, Ms. Darling is going to have a big role to 
play in implementing Family First, so both sides of this 
committee look forward--if you are confirmed--to working with 
you on that front.
    In the meantime, I am concerned that the Trump 
administration is turning its attention toward proposals that 
would undo much of the bipartisan work of the chairman, myself, 
members of this committee on both sides of the aisle, and the 
bicameral support we had with conservatives in the House. I am 
concerned that the Trump administration is looking at 
overturning that work.
    First, there is an effort by the administration to slash 
child welfare funding, certainly in the long run. It is the 
same type of attack the President's budget-crunchers want to 
inflict on Medicaid, capping funding, crippling the ability of 
States to serve many of the most vulnerable youngsters and 
families out there. What a head-scratcher.
    The administration has always said they want the States to 
take the lead in these areas of human services. And then we 
turn around and we see a budget that takes away the money to 
help those vulnerable youngsters and families. And money that I 
might add is absolutely key to what the chairman and I have 
been trying to do these several years to generate bipartisan 
support for child welfare reform.
    There is also an effort underway to allow child welfare 
providers to discriminate against potential foster parents just 
because they are LGBTQ Americans or people of particular faith 
backgrounds. The head of the Administration for Children and 
Families says he wants to move further in that direction.
    I think that is wrong also. It is discriminatory. It seems 
to me it is based on nothing but intolerance, and the bottom 
line is, you are going to deny a lot of kids the opportunity to 
grow up in safe and loving homes.
    So we are going to talk about that, Ms. Darling. That is 
not a surprise to you.
    And I want to emphasize again that I want to work closely 
with the chairman. It is no secret that the chairman, after 
many years of distinguished service, is going to be retiring at 
the end of this Congress. And I have told him--we meet every 
week--we are going to go gangbusters between now and the end of 
the Senate to work in a bipartisan way wherever we can, things 
like Family First, on things like our transformative chronic 
care bill. So, Mr. Chairman--I see Senator Cornyn here--as we 
hopefully break for at least a little period before we come 
back in September, I want to reiterate how strongly I feel 
about working cooperatively with you in a bipartisan way 
wherever possible.
    The Chairman. Well, thank you, Senator. I appreciate your 
comments.
    [The prepared statement of Senator Wyden appears in the 
appendix.]
    The Chairman. I would like now to welcome our two nominees, 
Dr. Faulkender and Ms. Darling.
    If confirmed, Dr. Faulkender will head the Office of 
Economic Policy and will report directly to Secretary Mnuchin. 
The Office of Economic Policy is responsible for the analysis 
of economic developments in the U.S. and world economies and 
ensuring the Treasury Department has access to the best and 
most up-to-date economic analysis.
    Additionally, this office works with the Council of 
Economic Advisers and the Office of Management and Budget in 
the preparation of the administration's proposed budget every 
year. It is important that Secretary Mnuchin and the Treasury 
Department have access to accurate data for their own decision-
making and to convey and explain those positions outside the 
Treasury Department.
    Dr. Faulkender is well-qualified, having worked in finance 
his entire professional life, from a bank teller to a professor 
of finance at the University of Maryland, for which he has 
received several teaching awards. He also currently serves as 
associate dean of masters programs at the Robert H. Smith 
School of Business.
    Elizabeth Darling, if confirmed, will serve as the 
Commissioner on Children, Youth, and Families. This position 
oversees major Federal programs that support social services 
that promote the positive growth and development of children 
and their families, protective services, and of course, shelter 
for children and youth in the at-risk situations, and I might 
add adoption for children with special needs.
    Today, my colleague from Texas will introduce Ms. Darling 
to the committee. So now I will just turn it over to Senator 
Cornyn to do that.

            OPENING STATEMENT OF HON. JOHN CORNYN, 
                   A U.S. SENATOR FROM TEXAS

    Senator Cornyn. Well, thank you, Mr. Chairman and 
colleagues.
    It is my pleasure to introduce Elizabeth Darling, who has 
been nominated to serve, as you have stated, as Commissioner of 
the Administration on Children, Youth, and Families within the 
Department of Health and Human Services.
    Ms. Darling, as you have noted, brings a wealth of 
experience from the private and public sectors, having dealt 
for many years with a range of issues on both the Federal and 
State levels.
    Currently, she serves as the president and CEO of One Star 
Foundation, where she supports the State of Texas by 
strengthening nonprofits, encouraging civic engagement, and 
facilitating public-private partnerships. Before that, she 
served as Deputy Secretary for the Maryland Department of Human 
Resources, and on top of that, she served as the founding 
Director of the Center for Faith-Based Community Initiatives at 
HHS, and as an advisor of presidential initiatives inside the 
same arm of the agency for which she has now been nominated.
    Not only does Ms. Darling possess invaluable experience 
within the child-welfare policy realm, she has also felt some 
of the impacts of those policies firsthand as an adoptive 
mother herself. And in fact, her relevant firsthand experiences 
date even further back than that. Ms. Darling tells a story, 
for example, of her father's own struggles as a child in the 
foster care system and how his experience kindled her own 
passion to make a difference in this area.
    In addition to her other priorities, Ms. Darling is 
particularly interested in combating the opioid epidemic that 
currently faces our Nation. And we are all concerned and look 
forward to working with you in that effort. I hope before we 
leave by the end of August--assuming we ever leave--before the 
election, we will pass the bipartisan legislation to address 
the opioid epidemic in a comprehensive sort of way.
    Earlier this month, the National Centers for Disease 
Control and Prevention reported that in 2017 there were 72,000 
opioid-related deaths in the United States, including hundreds 
in Texas, where fentanyl and heroin fatalities spiked last 
year. I would just note that, of course, while many people 
become addicted to opioids on prescription drugs, most turn to 
a cheaper variant of heroin, 90 percent of which comes across 
the U.S.-Mexican border from Mexico. For those who wonder 
whether we need to up our game when it comes to border security 
measures, I think that statistic tells it all.
    A Department of Health and Human Services study found that 
since 2010 there has been an increase in foster populations of 
10 percent, and this coincides with the rise in opioid-related 
deaths during the same time period. Not only has this epidemic 
left some children parentless, but it has also sent children in 
and out of foster care as their parents struggle with their own 
addiction. This nationwide epidemic deserves serious attention, 
and I applaud Ms. Darling's interest in helping address the 
scourge in our communities.
    As all of us are aware, once she is confirmed as 
Commissioner, Ms. Darling will oversee numerous programs 
protecting the youth of our Nation. These programs support 
social services, promoting development in children and 
families, protective services in shelters for at-risk youth, 
and adoption of children with special needs.
    Ms. Darling will also oversee the Children's Bureau, which 
protects children from abuse and neglect, and the Family and 
Youth Services Bureau, which addresses youth homelessness, 
adolescent pregnancy, and domestic violence. These programs are 
critical in ensuring children and youth have the opportunities 
they need to succeed.
    We know what an excellent job Ms. Darling will do. Our 
nominee has already had extensive experience on these topics 
and has served at the State and Federal levels throughout her 
career. And I know she will remain focused on serving all 
children, no matter their age, skin color, or socioeconomic 
background.
    Ms. Darling, I look forward to watching you serve alongside 
of Secretary Azar at Health and Human Services on behalf of 
some of the most vulnerable Americans. It sounds to me like 
your portfolio is vast and certainly challenging, to say the 
least.
    I thank you for your consideration, Mr. Chairman and 
colleagues, of this outstanding nominee, and I know she is 
eager and excited to serve her country once again in this new 
role.
    Senator Wyden. Mr. Chairman?
    The Chairman. Senator Wyden.
    Senator Wyden. Very briefly before the Republican Senator 
has to leave, I just want to make it clear that we too feel 
strongly that dealing with opioids is urgent, urgent public 
business and very much want to work in a bipartisan way to 
reduce opioid usage in our country.
    Thank you, Mr. Chairman.
    The Chairman. Well, thank you, Senator Wyden.
    I do have some obligatory questions that I am going to ask 
both of the nominees.
    First, is there anything that you are aware of in your 
background that might represent a conflict of interest with the 
duties of the office to which you have been nominated?
    Dr. Faulkender. No.
    Ms. Darling. No.
    The Chairman. Okay.
    Do you know of any reason, personal or otherwise, that 
would in any way prevent you from fully and honorably 
discharging the responsibilities of the office to which you 
have been nominated?
    Dr. Faulkender. No.
    Ms. Darling. No.
    The Chairman. Okay.
    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?
    Dr. Faulkender. Yes.
    Ms. Darling. Yes, I do.
    The Chairman. Okay.
    Do you commit to provide a prompt response in writing to 
any questions addressed to you by any Senator of this 
committee?
    Dr. Faulkender. Yes.
    Ms. Darling. Yes.
    The Chairman. Okay.
    Now, Dr. Faulkender, we will start with you, and we will 
take your testimony at this time. Then we will take yours, Ms. 
Darling.

    STATEMENT OF MICHAEL FAULKENDER, Ph.D., NOMINATED TO BE 
  ASSISTANT SECRETARY FOR ECONOMIC POLICY, DEPARTMENT OF THE 
                    TREASURY, WASHINGTON, DC

    Dr. Faulkender. Thank you, Mr. Chairman.
    Chairman Hatch, Ranking Member Wyden, and distinguished 
committee members, I am honored to be with you this morning as 
the nominee for Assistant Secretary for Economic Policy at the 
Department of Treasury. I am extremely grateful to Secretary 
Mnuchin and the President for selecting me for this position.
    I would like to take a moment to introduce the members of 
my family who are here with me today: my wife Maria of 14 
years; our two children Lauren, age 12, and Catherine, age 8; 
and my dad and step-mom William and Connie Faulkender. I would 
not be here today without the unwavering support of my family 
members who are here with me today as well as those who were 
not able to attend but are watching from home.
    For the last 16 years, I have served as a finance 
professor, the last 10 years at the University of Maryland. I 
have also taught at Washington University in St. Louis, 
Northwestern University, and the University of Pennsylvania. My 
research examines the major factors behind firm financial 
decision-making such as investment, capital raising, capital 
distribution, risk management, and executive compensation. I 
have documented, written about, and taught to others how firms 
respond to the various incentives and frictions that exist in 
our economy. I have seen some of the intended, but also some of 
the unintended consequences, of regulation.
    For the last year and a half, I have also had the privilege 
of serving as an associate dean, leading the faculty and staff 
in the delivery of our MBA and specialty masters programs and 
ensuring that our graduates have the applied technical and 
leadership skills that will propel them in their careers.
    As a career academic, my perspective on public policy has 
always been from outside the government, documenting the 
outcomes after the changes in law or regulation have been 
implemented. I am honored by the opportunity to advise and 
participate in the crafting of those laws and rules.
    I believe that the academic community has an enormous depth 
of knowledge and rigor to bring to policy discussions and 
debates about the structure of our economy. As we continue to 
transition towards a more information-based economy and update 
the way that our economy is taxed and regulated, I believe that 
I can make a strong contribution to the important leadership 
role of the Department of the Treasury.
    Based on my conversations with people who have previously 
held this role, I know that the Department is home to a strong 
career staff of economists. If confirmed, I look forward to 
leveraging their substantial experience and expertise to serve 
the American people and address the economic opportunities and 
challenges confronting our Nation. The decisions made here in 
Washington have enormous consequences, so it is critical that 
proposals are subjected to rigorous and thoughtful assessment 
before being enacted and implemented.
    That is the approach I have taken to all of my academic 
work, and, if confirmed, that is the same standard I pledge to 
you will be generated by the Office of Economic Policy.
    It is an enormous privilege to appear before you today, and 
I look forward to your questions.
    The Chairman. Well, thank you, Dr. Faulkender.
    [The prepared statement of Dr. Faulkender appears in the 
appendix.]
    The Chairman. Ms. Darling, we will take your statement.

 STATEMENT OF ELIZABETH DARLING, NOMINATED TO BE COMMISSIONER, 
ADMINISTRATION ON CHILDREN, YOUTH, AND FAMILIES, DEPARTMENT OF 
           HEALTH AND HUMAN SERVICES, WASHINGTON, DC

    Ms. Darling. Thank you, Mr. Chairman, Ranking Member Wyden, 
and members of the committee, for the opportunity to appear 
before you as President Trump's nominee to be the Commissioner 
for the Administration on Children, Youth, and Families, 
serving those who are in greatest need of hope and assurance 
that there can indeed be a brighter future.
    I am proud to have my family and many friends and 
colleagues across the country watching this hearing today, 
including my two sons and their wives, my daughter Emily behind 
me, my niece Addy Marie, their husbands, my grandchildren, and 
my 93-year-old mother from Austin, TX. My father, who passed 
away 4 years ago, just shy of their 68th anniversary, is also 
with me in spirit. Also watching are members of the Gilpatrick 
family, who took my father into their home in 1940. Their 
benevolence has shaped the course of my life.
    My youth was filled with opportunity. My parents modeled a 
strong work ethic and an unwavering sense of personal 
responsibility. I was keenly aware from an early age that 
others did not have the same advantages that a loving family 
can bring. My dad was orphaned at the age of 8 and grew up in a 
children's home and found a foster family just as he was aging 
out of care. He was a living example of the hope that a stable, 
loving foster family can bring to the life of a child. Almost 
80 years later, this foster family is still a large part of my 
life.
    No doubt their magnanimity influenced the decision my 
husband and I made at the age of 28 to adopt a 16-year-old from 
a group foster home sponsored by our church. In many ways, our 
son served as our social service proving ground. He came to us 
after years of unimaginable abuse, and, over the next 10 years 
as he sought to overcome its effects, we stood firm in our 
love. And plenty of it was tough love and enforced 
consequences, as he learned to take responsibility for the man 
that he chose to be. I am very proud of who he is today, as I 
am of all three of my children.
    I have had the privilege of working for many years in State 
and Federal Government, including HHS, on family and child 
welfare policies and priorities. I believe my success has been 
due in large part to an understanding of how government 
partners with faith-based and community organizations to get 
its work done, and how policies can either help or hinder 
service delivery and client outcomes.
    ACYF spans two bureaus--the Family Youth Services Bureau 
and the Children's Bureau--which address a range of issues: 
child abuse and neglect, foster care and adoption, homeless and 
runaway youth, trafficked youth, adolescent pregnancy, and 
domestic violence. But these issues are connected. To address 
any one of these concerns in isolation is to ignore underlying 
factors that characterize the complexity of each.
    With the recent passage of the Family First Prevention 
Services Act, I am energized and optimistic about its potential 
to be a catalyst for systemic change for those who support 
families experiencing challenges. And, with today's knowledge 
and understanding of the effects of adverse childhood 
experiences and the resulting trauma that presents in a myriad 
of ways, I feel a sense of urgency to support and encourage all 
systems of care to deliver services through a 
multidisciplinary, trauma-informed lens.
    I have seen what hope can do to change a life. I believe 
the families that require our services do not just benefit from 
best practices or from a continuum of care or from prevention 
services. At the core of my being I know it is about 
relationships, being in relationship with others, the human 
element, that one-on-one supportive dynamic that is difficult 
for government to provide, but can often come through extended 
family, a place of worship, a community center, a school, a 
teacher, a coach, a pastor, or a mentor.
    I bring to this position a deep understanding of the 
nonprofit sector and its capacity to do what government cannot. 
If I am confirmed, I will be a tireless advocate for children, 
youth, and families in crisis, and all caregivers and service 
providers who seek to help and heal.
    Across this vast land, communities are coming together 
around issues they have identified and seek to address 
together, drawing on the strengths and resources of many to 
improve the health of their communities. Whether the issue is 
opioid abuse, teen suicide, cyber-bullying, teen pregnancy, sex 
trafficking, domestic violence, or child abuse, I have seen 
that when communities come together and name a problem and own 
it, the power of relationships and the human element can 
overcome many obstacles. And imagine if all were educated on 
the effects of trauma and understood the possibility of healing 
the deepest of wounds.
    I thank President Trump for the opportunity to serve as the 
Commissioner for ACYF, and I respectfully thank each of you for 
your consideration of my nomination.
    The Chairman. Well, thank you so much. I think both of you 
are excellent people selected for these very important 
positions.
    [The prepared statement of Ms. Darling appears in the 
appendix.]
    The Chairman. We have a few questions. Dr. Faulkender, in 
your research on corporate cash holdings you have identified 
that sometimes large foreign cash holdings of some 
multinational firms could be explained by low foreign tax rates 
and abilities of these firms to transfer profits within the 
firm among related subsidiaries.
    As you are aware, since most of the data you used to 
analyze corporate cash holdings applied to the old tax code, 
and given that we now have a new tax code, I wonder if you 
believe things will change? That is, do you believe that the 
tax reform has changed incentives of multinational firms to 
transfer profits within a firm towards low-tax jurisdictions?
    Dr. Faulkender. I do, Senator.
    The reduction in the corporate income tax rate reduces the 
wedge between the tax rate they would realize overseas and what 
they would pay here in the United States. In addition, there 
are a number of provisions in the bill in order to make it more 
difficult to transfer those incomes over to those low-tax 
jurisdictions.
    The Chairman. Well, Dr. Faulkender, looking through your 
resume, and your research and writings, I would put you in a 
category of financial market analysts trying to understand 
financial market outcomes from an academic and scientific 
perspective, and not a political perspective.
    Dr. Faulkender, while at Treasury, if you are confirmed, 
what sorts of analysis do you think you might be interested in 
pursuing and in what areas would you expect to focus your 
efforts?
    Dr. Faulkender. Senator, my role would be to take the 
academic models and the same rigor that I have applied toward 
my research to the Office of Economic Policy and to support the 
Secretary and the Department in the variety of proposals and 
regulations that are before it.
    The Chairman. Ms. Darling, let me go to you. It is 
important to consider the perspective of States when 
administering programs at the national level.
    Earlier in your career, you spent time working at the State 
level, both in Texas and in Maryland. What lessons did you 
learn in those roles that you will bring with you to your job 
at HHS, if confirmed, and how will your experience in those 
States shape your work?
    Ms. Darling. Senator, thank you for that question. My work 
in the State of Maryland was very exciting. It was at a time 
when child welfare was in great need of an infusion of new 
energy and vision. We had high case turnover rates, 
particularly in Baltimore City, almost 7,000 children in out-
of-home care. And we were able to look at the situation and 
understand that, in order to actually work with our social 
service providers and our caseworkers, we needed to give them 
the materials and the supplies that they needed, the resources.
    They shared desks, they shared phones, they were in need of 
stability and tools in order to accurately track caseloads. And 
we were able to do that in a fairly short time, and it made a 
big difference to our work in Maryland.
    I was also privileged to work on the first child and family 
service review, the first round in the State of Maryland. And I 
believe I gained great insight through that experience.
    The Chairman. Okay.
    Ms. Darling, while Federal programs play a key role in 
supporting our child welfare system, it is important to 
remember that the real work happens in States and local 
communities. Nonprofits and other community-based organizations 
are critical players as well. And I know you have significant 
experience working with these various groups.
    If confirmed, how might you work to strengthen partnerships 
between the Federal Government and nonprofit organizations to 
help families and children in need?
    Ms. Darling. Thank you for that question, Senator Hatch.
    I believe in a multidisciplinary, community-based, trauma-
informed integrated system of care. That includes State and 
Federal partners and local community resources in order to 
really bring the local community to bear around the needs of 
children and families.
    I believe that we can set a tone from the Federal level, as 
well as supporting States in encouraging innovation and 
strategies to support youth and families at the community 
level.
    The Chairman. Senator Wyden?
    Senator Wyden. Thank you, Mr. Chairman.
    Dr. Faulkender, Ms. Darling, welcome.
    Now, Dr. Faulkender, if you are confirmed, is it correct 
that Secretary Mnuchin will be your boss and you will report 
directly to him?
    Dr. Faulkender. Yes, Senator, I would report directly to 
him.
    Senator Wyden. Okay.
    Now your boss, if you are confirmed, said last September, 
``Not only will this tax plan''--the bill that was passed--
``pay for itself, but it will pay down debt.'' Now as you know, 
we have the official Joint Committee on Taxation which does the 
scorekeeping, and they said even after taking into 
consideration dynamic scoring, the tax cuts will cost more than 
a trillion dollars. In other words, the official scorekeeper 
said that the tax cuts will put a trillion dollars--over a 
trillion dollars--on the national credit card. That does not 
even include the cost of debt service. And virtually all 
mainstream economists have dismissed the notion that the tax 
cuts will pay for themselves, let alone also pay down debt.
    So do you agree with Secretary Mnuchin's statement that the 
tax plan will pay for itself and even pay down the debt, 
thereby disagreeing with our official scorekeeper and the 
overwhelming number of mainstream economists?
    Dr. Faulkender. Senator, I have not personally run the 
forecasts on the tax bill. If confirmed, I look forward to 
working with the economists at the Office of Economic Policy to 
generate a robust analysis of the revenue implications of the 
tax bill.
    Senator Wyden. So have you read the Joint Committee on 
Taxation review? Is there anything--I cannot believe that you 
have not. But is there anything that would cause you to 
disagree with their analysis?
    Dr. Faulkender. Senator, I have not read it thoroughly. I 
have certainly skimmed the report, but I have not thoroughly 
read through it.
    Where there is disagreement among economists is the extent 
to which the changes and incentives that we discussed will 
generate additional economic activity.
    Senator Wyden. Respectfully, that is not my question.
    What I am trying to do--and I am struck here. Senator 
Cardin came in and said you were a nice guy, and I am sure that 
is the case. I have always heard that too.
    But in your opening statement, you say the decisions made 
in Washington have economic consequences. So it is critical 
that the proposals are subject to rigorous and thoughtful 
assessment before being enacted and implemented. So we cannot 
give you a pass because we think you are a nice guy. We have 
seen one flawed economic analysis after another in connection 
with this.
    So you have said, I think, that you have not reviewed 
everything. But I cannot believe that you have not reviewed the 
Joint Committee on Taxation report. I think you said you 
skimmed it.
    Is there anything you saw there that you think is flawed in 
terms of exactly what you are talking about--rigorous analysis?
    Dr. Faulkender. Senator, one of the things that we are 
looking to do at the Office of Economic Policy is to update the 
models to include more information about how the incentives in 
the tax bill will change the willingness of businesses to 
engage in economic activity.
    Senator Wyden. I think it is unfortunate, respectfully, 
that you are not answering the question. We all know that there 
is debate about incentives. I am one who believes that the use 
of responsible incentives is a good idea. I wrote a bipartisan 
tax bill, and I thought that it would generate the kind of 
behavior-changing activity that would be good for our economy. 
But you are not answering the question.
    So I am going to ask one more question to see if we can get 
you to respond to what you have stated in your own opening 
statement is the heart of your obligations. Now, the 
President's Chair of the Council of Economic Advisers said 
repeatedly the tax cut will raise average wages by $4,000. Yet 
to date, in terms of real wages, they are basically flat like 
pancakes.
    Do you agree with the President and the Council of Economic 
Advisers' Chairman that American workers are going to see a 
$4,000 wage increase due to the tax cuts?
    Dr. Faulkender. Senator, I think as a result of the 
improved incentives in the tax bill, we will see higher wages 
and lower unemployment than we otherwise would have seen.
    Senator Wyden. Okay.
    So you still are not responding to the question. But you 
are certainly not saying you agree with the Chairman of the 
Council of Economic Advisers. You said that wages are going to 
go up. Well, nobody is disputing that people--because I talk to 
middle-class folks. They have had a bit of an increase, but 
they always say, well it is something where maybe we can buy 
some groceries and take care of something once, but it is not 
resembling the $4,000 pay raise we were told. And it is light-
years away from the massive amount of relief that went to the 
folks at the top.
    Among the middle class, I have folks who say ``we got a 
little bit, hardly notice it.'' And you have not indicated to 
me in just what I have asked you that you see what Mr. Hassett 
is saying is accurate. But you think somehow that workers are 
going to get these additional benefits.
    I am going to ask you this in writing as well. Maybe you 
will have additional detail, but I cannot give you a pass on 
these questions because, by dint of what you have described as 
your duties and what we think the office is all about, you are 
going to be front and center in making recommendations. And 
they come after this parade of flawed economic assessments that 
really misrepresented to the American people what they were 
going to get.
    Folks at the top got what they thought they were going to 
get. Folks in the middle clearly did not get what they thought 
they were going to get.
    Mr. Chairman, I note other colleagues have questions. I am 
going to have some additional questions for a second round.
    The Chairman. Senator Whitehouse?
    Senator Whitehouse. Thank you very much.
    Dr. Faulkender, there have been an array of economic 
warnings about a potential crash in the coastal property value 
market. I am from Rhode Island. It is pretty important to us 
what coastal property values do.
    These warnings have come from diverse sources, including 
Freddie Mac--the Federal agency--the Union of Concerned 
Scientists, insurance trade publications, and Nobel Prize-
winning economists. And some of our States--Senator Cassidy's, 
for instance, has declared its coast in a state of emergency.
    So there are a lot of signals out there about a coastal 
property value crash. Here is what Freddie Mac wrote: ``Rising 
sea levels and spreading flood plains appear likely to destroy 
billions of dollars in property and to displace millions of 
people. The economic losses and social disruptions may happen 
gradually, but they are likely to be greater in total than 
those experienced in the housing crisis and Great Recession.''
    Are those warnings worthy of attention at the Treasury 
Department, and will you give them attention at the Treasury 
Department?
    Dr. Faulkender. Senator, certainly any type of economic 
risk that rises to the level that you have described will 
certainly receive attention from the Office of Economic Policy.
    Senator Whitehouse. Great. I will follow up with you, 
because the warnings are increasingly widespread.
    Relatedly in some respect, but separately, many economists 
are also warning of the risk of a carbon bubble, a sudden rapid 
deflation of the fossil fuel economy that has considerable and 
fairly alarming support in very well-sourced economic papers.
    You are familiar, I am sure, with the Bank of England.
    Dr. Faulkender. I am.
    Senator Whitehouse. And you are familiar with the fact that 
the Bank of England is not just a bank, but it is also the lead 
financial regulator for the United Kingdom for insurance and 
other industries. Correct?
    Dr. Faulkender. Yes.
    Senator Whitehouse. Yes.
    So when the Bank of England speaks, is that something to 
pay attention to in its capacity as financial regulator?
    Dr. Faulkender. Certainly paying attention to the 
significant financial regulators around the world is a voice we 
should listen to.
    Senator Whitehouse. What the Bank of England has warned is 
that ``investments in fossil fuels and related technologies may 
take a huge hit.'' That is a quote from them. They also codify 
the ``huge hit'' as so significant that it creates what they 
call ``systemic risks.'' What does ``systemic risks'' mean in 
economics jargon?
    Dr. Faulkender. Systemic risk indicates that it has the 
potential to bring down the entire financial system.
    Senator Whitehouse. Specifically with respect to the U.S., 
there are models suggesting that should this happen, the U.S. 
would see a greater than 5-percent decline in GDP and millions 
of lost jobs. I think that is largely because the change in 
cartel behavior in the oil industry is propping up prices by 
limiting supply.
    If that reverses to a flood-the-market strategy, the prices 
from the low-cost providers would fall so low that it would 
virtually eliminate overnight the higher-cost producers in the 
United States, Russia, and other places.
    What effect on the economy would a 5-percent decline in GDP 
and millions of lost jobs have for America?
    Dr. Faulkender. So certainly, qualitatively there would be 
a number of--long-term unemployment rates would certainly be of 
concern, impacts on tax revenue, and required Federal 
expenditures would also come into play. If confirmed, that is 
certainly something the Office of Economic Policy has the 
capacity to model.
    Senator Whitehouse. Great. We will follow up on that as 
well.
    Finally, Nobel Prize-winning economist Joseph Stiglitz has 
recently testified the following: ``The transition to a low-
carbon economy is potentially a powerful, attractive, and 
sustainable growth story marked by higher resilience, more 
innovation, more livable cities, robust agriculture, and 
stronger ecosystems.''
    Do you agree that a transition to a low-carbon economy 
could be potentially a powerful, attractive, and sustainable 
growth story?
    Dr. Faulkender. Senator, my academic career has mostly been 
in the area of financial economics, not as much in energy 
economics. So I would be happy to research it and get back to 
you.
    Senator Whitehouse. I will leave it at that.
    My time is expired. I thank the chairman.
    The Chairman. Senator Cassidy?
    Senator Wyden. Senator Cassidy, I have to be in the Energy 
Committee. Would it be possible to ask one question? I 
appreciate my colleague's courtesy.
    The Chairman. We will turn to you.
    Senator Wyden. Thank you, Mr. Chairman.
    Just as a matter for the record, Ms. Darling, I need to 
know--and you can get this in writing for the record. The 
chairman will announce the number of days you have. I need to 
know whether you support proposals that would cap Federal 
funding for foster care services. The issue here is the block 
grant issue.
    I remain very concerned that there are some in the 
administration who want these block grants. I think that would 
work a tremendous burden on trying to make sure we carried out 
Family First as the chairman and I, and conservatives and 
liberals in the House, agreed. So that will be for the record.
    My question for you--and I thank Senator Cassidy for his 
courtesy--is, there has been bipartisan concern about this 
whole effort of guidance from the Children's Bureau as it 
relates to Family First. I am not going to get into all of this 
wonky stuff about the difference between a guidance and a 
regulation.
    But there is a concern that the guidance is moving away 
from what Chairman Hatch and I had in mind, particularly as it 
relates to getting support for things that have to be done, 
accrediting the facilities, and trying to make sure that people 
get in the queue for accreditation, all of this kind of thing. 
It is really a dollars and cents and priorities issue.
    What I would like is to have you tell us, if you are 
confirmed--and as I indicated, I have heard good things about 
you--that you will commit to reviewing the guidance so that we 
address some of these concerns of Democrats and Republicans. So 
I hope that will be just a simple ``yes'' and then Senator 
Cassidy can get his questions in and I can get out the door.
    Ms. Darling. Yes, Senator, I will do that.
    The Chairman. That takes care of that.
    Senator Wyden. Okay.
    Senator Cassidy, thank you. Thank you, Mr. Chairman.
    The Chairman. Thank you.
    Senator Cassidy?
    Senator Cassidy. Thank you.
    Hello, sir. I am going to speak to you and give kind of a 
long prologue just to create context. But it is context that we 
have to have to get your thoughts.
    I am concerned about Social Security and Medicare. Clearly 
we have to preserve the benefits for those who have been 
promised these benefits. But the actuaries tell us that both 
funds are in an incredible duress.
    If we do nothing, the benefits must be cut significantly. 
And this is not something kind of on the by-and-by. Medicare 
goes bankrupt within 8 years. Social Security goes bankrupt in 
2034. But I am told if we are to address it, we must address it 
now, because that window is rapidly closing--again, for 
context.
    And some say because we do not look at the 10-year window, 
we look at the 75-year window for Social Security, that that is 
not as bad. But as was explained to me quite convincingly, it 
is not just that we get through 75 years and we are okay, 
rather we have to have a balance at the end of that 75 years 
that can continue to pay benefits beyond. And I think that fact 
is often ignored.
    So we have to have the till full, if you will. It has to 
have an actuarial balance.
    So that said, what thoughts do you have about the correct 
methodology and data as we look at policy options to preserve 
these benefits? And what other thoughts do you have as to how 
we preserve these programs, because I do think that is 
something that you will be directly involved with in this 
position?
    Dr. Faulkender. Thank you, Senator.
    You are absolutely correct that the changing demographics 
in this Nation are creating some long-term stability concerns 
for Social Security and for Medicare. And the sooner that we 
address those challenges, the more flexibility that we have in 
retaining the promise that has been made to our seniors.
    So what we can offer at the Office of Economic Policy is, 
there are a number of proposals in the academic community, and 
a number of models that have been utilized in order to estimate 
what the 10-year and 75-year implications are as we consider 
modifications.
    Senator Cassidy. Now what in the academic literature, what 
are the options as to what we can do to not just get through 
the 10-year window or the 75-year window, but actually to leave 
our descendants in better shape?
    Dr. Faulkender. Essentially, to bring them into perpetual 
balance, we need to have over the entire life of the program, 
greater equality between the current revenue steam and the 
current benefits that are being offered.
    Senator Cassidy. And what would be the--obviously, one 
option would be to either cut benefits and/or raise the payroll 
tax. Are there other options aside from that?
    Dr. Faulkender. Yes. So there is also changing eligibility 
in terms of when benefits begin or the generosity of the 
benefits----
    Senator Cassidy. Now, do I understand that European nations 
have grandfathered in, if you will, changes in eligibility?
    Dr. Faulkender. Generally speaking, the changes in 
eligibility are brought in over time, much as we over time have 
been raising the retirement age in Social Security from 65 to 
67.
    Senator Cassidy. Now, Medicare. I have a white paper, 
``Making Health Care Affordable Again,'' on my website. And our 
goal is to make Medicare more sustainable by lowering the cost 
of health care.
    Is there any academic literature on what rate of decrease 
in the cost of health care would be required to make Medicare 
more sustainable, because that is the one that is empty in 8 
years?
    Dr. Faulkender. Right, so the more immediate concern, as 
you indicated, is Medicare. There are models out there that 
would allow us to estimate what kind of decrease in medical 
inflation we would have to realize in order to bring that 
program into actuarial balance.
    Senator Cassidy. Now there has been a little bit of a 
decrease in medical inflation over the last--I think beginning 
in 2007, I saw that there was a downward inflection. But 
clearly that has not been sufficient to push out significantly 
Medicare's bankruptcy.
    Do you have an off-the-top-of-your-head sense of what we 
would have to do to health-care costs or to Medicare payments 
for health-care costs to further lower----
    Dr. Faulkender. I do not have a specific number, but I 
would be happy to get that back to you.
    Senator Cassidy. And then lastly, there are a couple of 
aspects to health care. It is the volume. It is the price per 
unit, but also the number of units. Correct? And the makeup of 
the units themselves. You can have a lower price, but if it is 
of a more intense unit, then it is going to cost more.
    Dr. Faulkender. Right.
    Senator Cassidy. Any thoughts how all that factors in 
beyond saying that that is part of it?
    Dr. Faulkender. So there are some interesting experiments 
across various States about modifying the fee-for-service model 
in order to reduce quantities.
    Senator Cassidy. Now, I do not have a sense that the ACOs 
have actually significantly lowered costs, and indeed to the 
degree that they have contributed to consolidation of health-
care systems--and there is data showing that once you have any 
kind of consolidated health-care system, on average, costs are 
up about 12 percent.
    So again, any thoughts upon that statement, either to 
debunk, or to disagree, or to agree?
    Dr. Faulkender. So, if confirmed, I certainly will spend 
more time familiarizing myself with some of the latest research 
coming out about ACOs. As I mentioned before, I have been an 
associate dean for the last year, more worried about my MBAs. 
But I will certainly provide you with an assessment of the 
literature on how those ACOs are doing.
    Senator Cassidy. That was a nice sidestep, but thank you 
very much.
    I yield back.
    The Chairman. Senator Cantwell?
    Senator Cantwell. Thank you, Mr. Chairman.
    I would like to ask Ms. Darling about--you might know our 
State has a title IV-E waiver that has enabled our State to do 
a lot of preventative child welfare programs, and I certainly 
appreciate Senator Hatch's efforts in this area. The program 
was designed to prevent foster care placements when possible.
    A study done by the Washington Institute for Public Policy 
found that these families who received this prevention were 
significantly less likely to have children removed to foster 
care. So I am glad that we have been able to get a larger 
awareness on this federally, and that other States, hopefully, 
will take up these same kinds of innovations. Knowing that 
States have been very innovative, what will you do to take into 
account these lessons and try to help transition other States 
to these ideas?
    Ms. Darling. Senator, thank you for that question. And I 
think you are absolutely on target. When I think of all the 
amazing work that is happening around the country, such as in 
your State, real movement in outcomes for children using 
prevention services, I think we need to lift those up and use 
them as examples of how it can work in those States that need 
to be moving more toward the prevention end to keep congregate 
care down and to also move children towards reunification.
    I am excited about the Family First Act and the potential 
that it has to help us do that.
    Senator Cantwell. I understand that guidance has not been 
put out yet on that. Will you be transparent and open to making 
sure this new guidance is out there and for a rulemaking and 
public comment?
    Ms. Darling. Senator, if confirmed, I will do that and work 
with the committee to better understand the legislative intent 
of everything that we put out as far as guidance so that we can 
work with States to make the transition, especially for those 
States with waivers.
    Senator Cantwell. Thank you.
    Well, I want to thank, again, the chairman for his work in 
this area as well. I think we are showing that we are putting a 
little bit of an ounce of prevention into the situation and 
giving us much better results. So I hope that we can encourage 
other States to do the same thing.
    Dr. Faulkender, you spent a good deal of time researching 
the complications of financial instruments and derivatives, 
which is very important. Obviously, we have been very involved 
in a lot of laws related to energy markets and oversights.
    Will you work with the Commodities Future Trading 
Commission, the Securities and Exchange Commission, and the 
Department of Energy in making sure that we look at different 
analytical tools on making sure that hedging and speculation--
my point is, we had to use in the Enron case a lot of research 
from people who basically could tell you there were anomalies, 
that the market was not price and demand.
    And as we get into more complexity, will you work with 
those agencies to make sure that we are evaluating information 
that might give us data on the fact that markets are not 
functioning the way that they should function?
    Dr. Faulkender. Senator, yes.
    If confirmed, I will work with economists at the Securities 
and Exchange Commission, the CFTC, the Office of Financial 
Research to ensure that we have a robust set of regulations and 
capital requirements to ensure stability in those markets.
    Senator Cantwell. Okay.
    And just lastly on affordable housing--obviously, this has 
been a big priority for both the chairman and myself. We were 
successful in getting some things done on affordable housing, 
but we need to do much more.
    Obviously, the tax bill created some challenges for us in 
that. So given the importance of housing, what do you think are 
some of the major economic benefits of promoting more 
affordable housing?
    Dr. Faulkender. Senator, there is literature that suggests 
that the investments that people make in their neighborhoods 
and in their communities are greater when they have a financial 
stake in the neighborhood through their home. And so those are 
some of the primary benefits that we realize: there is greater 
engagement in civic life as a result of home ownership.
    Senator Cantwell. Well, we are facing this as a crisis 
through not just major urban areas, but rural areas as well. 
And I think that the actual--well, we have a couple of things 
going on here. Definitely more demand, less supply. But this 
issue of keeping pace with wage productivity is also causing a 
problem. But I guarantee you, if you do not have a roof over 
your head, you are not going to do much about wage 
productivity.
    So I just hope that in your new position, you could take a 
look at this. There is legislation that some of my colleagues 
on the other side of the aisle are also doing to further 
analyze this issue.
    But I would just say that we have to do much, much more 
than we are doing as a Nation to get under this problem or else 
we will just continue to see these kinds of--it is almost that 
the problem becomes harder for us to deal with because of the 
large-scale populations that are in demand of affordable 
housing.
    Dr. Faulkender. Senator, if confirmed, I look forward to 
working with you and your team to see what we can do to make 
housing more affordable and increase home ownership.
    Senator Cantwell. Thank you.
    Thank you, Mr. Chairman.
    The Chairman. Well, thank you, Senator Cantwell.
    I do not see any other Senators here.
    I would like to thank you, everybody here for their 
attendance and participation today. I would, once more, like to 
thank Dr. Faulkender and Ms. Darling for their willingness to 
serve in these roles. We really appreciate it.
    We here at the committee appreciate the new tasks that you 
will have before you, should you be confirmed. And we trust 
that you will serve your agencies well.
    So anyway, I ask that any member who wishes to submit 
questions for the record, please do so by noon Friday, August 
31st.
    With that, we are grateful to you. We wish you the best. We 
are going to move ahead as fast as we can, and we will call 
this hearing adjourned.
    Thank you.
    [Whereupon, at 10:36 a.m., the hearing was concluded.]

                            A P P E N D I X

              Additional Material Submitted for the Record

                              ----------                              


Prepared Statement of Elizabeth Darling, Nominated to be Commissioner, 
 Administration on Children, Youth, and Families, Department of Health 
                           and Human Services
    Thank you, Mr. Chairman, Ranking Member Wyden, and members of the 
committee, for the opportunity to appear before you as President 
Trump's nominee to be the Commissioner for the Administration on 
Children, Youth, and Families, serving those who are in greatest need 
of hope and assurance that there can be a brighter future.

    I am proud to have my family and many friends and colleagues across 
the country watching this hearing today, including my two sons and 
their wives, my daughter and her husband, my two grandchildren, and my 
93-year-old mother. My father, who passed away 4 years ago, just before 
my parent's 68th anniversary, is with me in spirit. Also watching are 
members of the Gilpatrick family, who took my father into their home in 
1940. Their benevolence has shaped the course of my life.

    My youth was filled with opportunity. My parents modeled a strong 
work ethic and an unwavering sense of personal responsibility. I was 
keenly aware from an early age that others did not have the same 
advantages that a loving family can bring. My dad was orphaned at age 
8, grew up in a children's home, and found a foster family just as he 
was aging out of care. He was a living example of the hope that a 
stable, loving foster family can bring to the life of a child. Almost 
80 years later, this foster family is still a large part of my life.

    No doubt their magnanimity influenced the decision my husband and I 
made at the age of 28 to adopt a 16-year-old from a group foster home 
sponsored by our church. In many ways, our son served as a social 
service proving ground. He came to us after years of unimaginable 
abuse, and over the next 10 years as he sought to overcome its effects, 
we stood firm in our love--and plenty of it was tough love and enforced 
consequences--as he learned to take responsibility for the man he chose 
to be. I am very proud of who he is today, as I am of all three of my 
children.

    I've had the privilege of working for many years in State and 
Federal Government, including at HHS, on family and child welfare 
policies and priorities. I believe my success has been due in large 
part to an understanding of how government partners with faith-based 
and community organizations to get its work done, and how policies can 
either help or hinder service delivery and client outcomes.

    ACYF spans two bureaus--the Family and Youth Services Bureau and 
the Children's Bureau--which address a range of issues: child abuse and 
neglect, foster care and adoption, homeless and runaway youth, 
trafficked youth, adolescent pregnancy, and domestic violence. But 
these issues are connected. To address any one of these concerns in 
isolation is to ignore the underlying factors that characterize the 
complexity of each.

    With the recent passage of the Family First Prevention Services 
Act, I am energized and optimistic about its potential to be a catalyst 
for systemic change for those who support families experiencing 
challenges. And with today's knowledge and understanding of the effects 
of adverse childhood experiences and the resulting trauma that presents 
in a myriad of ways, I feel a sense of urgency to support and encourage 
all systems of care to deliver services through a multidisciplinary, 
trauma-
informed lens.

    I have seen what hope can do to change a life. I believe the 
families that require our services do not just benefit from ``best 
practices'' or from a ``continuum of care'' or from ``prevention 
services.'' At the core of my being I know it is about relationships, 
being in relationship with others, the human element, that one-on-one 
supportive dynamic that is difficult for government to provide but can 
often come through extended family, a place of worship, a community 
center, a school, a teacher, a coach, a pastor, a mentor.

    I bring to this position a deep understanding of the nonprofit 
sector and its capacity to do what government can't. If I am confirmed, 
I will be a tireless advocate for children, youth, and families in 
crisis, and all caregivers and service providers who seek to help and 
heal. Across this vast land, communities are coming together around 
issues they have identified and seek to address together, drawing on 
the strengths and resources of many to improve the health of their 
communities. Whether the issue is opioid abuse, teen suicide, cyber-
bullying, teen pregnancy, sex trafficking, domestic violence, or child 
abuse, I have seen that when communities come together, name a problem, 
and own it, the power of relationships and the human element can 
overcome many obstacles. And imagine if all were educated on the 
effects of trauma and understood the possibility of healing the deepest 
of wounds.

    I thank President Trump for the opportunity to serve as the 
Commissioner for ACYF, and I thank each of you for your consideration 
of my nomination.

                                 ______
                                 

                        SENATE FINANCE COMMITTEE

                  STATEMENT OF INFORMATION REQUESTED 
                               OF NOMINEE

                      A. BIOGRAPHICAL INFORMATION

 1.  Name (include any former names used): My name is Elizabeth Marie 
Darling; this is both my current and maiden name. Previous married 
names include Elizabeth Darling Seale and Elizabeth Seale-Scott.

 2.  Position to which nominated: The position to which I have been 
nominated is Commissioner, Administration for Children, Youth, and 
Families within the Administration for Children and Families at HHS.

 3.  Date of nomination: March 19, 2018.

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

 5.  Date and place of birth: I was born December 7, 1955 in Fort 
Worth, TX.

 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):

        Richfield High School, Waco, TX, 1971-1974, diploma.

        Saint Mary's University, San Antonio, TX, January 1978-May 1978 
        (6 credit hours).

        Baylor University, Waco, TX, 1974-1978, BS elementary education 
        (May 1978).

 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):

        March 2009-present: CEO, OneStar Foundation, Austin, TX 
        (appointed by former Governor Rick Perry and currently serving 
        under Governor Greg Abbott).

        July 2005-March 2009: COO, Corporation National and Community 
        Service, Washington, DC (5-year term appointment).

        March 2003-July 2005: Deputy Secretary, State of Maryland 
        Department of Human Resources, Baltimore, MD (appointed by 
        Governor Bob Ehrlich).

        March 2001-March 2003: Director, Center for Faith-Based and 
        Community Initiatives, U.S. DHHS, Washington, DC (appointed by 
        President George W. Bush) and Advisor on Presidential 
        Initiatives to the Commissioner, ACYF, Washington, DC.

        May 2000-March 2001: Project director, Baptist Child and Family 
        Services, San Antonio, TX.

        March 1980-May 2000: Full-time parent and volunteer board 
        member and fundraiser, various local and State nonprofits 
        including gubernatorial appointment as member and Vice-Chair, 
        Texas Human Services Board, Austin, TX (1997-2001).

        February 1978-March 1980: Classroom teacher, Coke Stevenson and 
        Hobby Middle Schools in Northside ISD, San Antonio, TX.

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):

        1997-2001: Board member and Vice-Chair, Texas Human Services 
        Board, Austin, TX (appointed by Governor George W. Bush).

        1996: Member, Governor's Advisory Task Force for Faith-Based 
        Community Service Programs. Strategic advisor during 
        development of publication, ``Faith in Action . . . A New 
        Vision for Church-State Cooperation in Texas'' (appointed by 
        Governor George W. Bush), Austin, TX.

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):

        June 2007-present: Co-trustee, Family Revocable Living Trust.
        July 2013-present Managing member/CEO, Onion Creek Press, LLC.
        March 2009-present: CEO, OneStar Foundation, Austin, TX.
        October 2017-present: Chair, America's Service Commissions 
        (ASC).
        April 2011-December 2016: Chair, Camp Fire National Board of 
        Trustees.

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

        Current

        Chair, America's Service Commissions (ASC).
        Member, Association of Fundraising Professionals (AFP).
        Member, Texas Society of Association Executives (TSAE).
        Member, American Society of Association Executives (ASAE).
        Member, National Rifle Association (NRA).
        Member, Texas State Rifle Association (TSRA).
        Member Airplane Owners and Pilots Association (AOPA).
        Member, Ninety-Nines International Organization of Women 
        Pilots.
        Member, Baylor Alumni Association.
        Member, Heritage Foundation.
        Member Republican National Committee.
        Member, Republican Party of Texas.

        Past

        Chair, Camp Fire National Board of Trustees.
        Member, Board Texas Association of Business (TAB).
        Member, Women's Fund Grants Committee Austin Community 
        Foundation.
        Member, Texas State Society.
        Member, Board of Trustees Buckner Baptist Benevolences: 
        Executive Committee, Budget and Development Committees.
        Member; Board Bexar County Detention Ministries.
        Vice Chair, Kendall County Republican Women's Club.

13.  Political affiliations and activities:

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

       I have never been a candidate for public office.

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

       Member, Republican National Committee (donor).
       Member, Republican Party of Texas (donor).

        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.


------------------------------------------------------------------------
                                                             Year of
            Name of Recipient                 Amount       Contribution
------------------------------------------------------------------------
Texans for Elizabeth Jones                     $250.00             2008
------------------------------------------------------------------------
Texans for Elizabeth Jones                     $250.00             2008
------------------------------------------------------------------------
Don Willett                                    $500.00             2012
------------------------------------------------------------------------
Rick Perry                                   $2,000.00             2012
------------------------------------------------------------------------
Rick Perry                                   $2,000.00             2013
------------------------------------------------------------------------
Greg Abbott                                  $2,000.00             2014
------------------------------------------------------------------------
Greg Abbott                                  $2,000.00             2014
------------------------------------------------------------------------
Texans for Greg Abbott                         $500.00             2014
------------------------------------------------------------------------
Texans for Greg Abbott                       $1,000.00             2014
------------------------------------------------------------------------
Texans for Greg Abbott                         $250.00             2014
------------------------------------------------------------------------
Anthony Stacy                                  $500.00             2015
------------------------------------------------------------------------
Texans for Greg Abbott                         $100.00             2015
------------------------------------------------------------------------
Texans for Greg Abbott                         $100.00             2015
------------------------------------------------------------------------
Texans for Greg Abbott                       $1,000.00             2015
------------------------------------------------------------------------
Texans for Greg Abbott                         $100.00             2015
------------------------------------------------------------------------
Donald J. Trump for President, Inc.            $250.00             2016
------------------------------------------------------------------------
Donald J. Trump for President, Inc.            $500.00             2016
------------------------------------------------------------------------
Donald J. Trump for President, Inc.             $80.00             2016
------------------------------------------------------------------------
Donald J. Trump for President, Inc.            $164.00             2016
------------------------------------------------------------------------
Donald J. Trump for President, Inc.            $114.00             2016
------------------------------------------------------------------------
Donald J. Trump for President, Inc.            $500.00             2016
------------------------------------------------------------------------
Donald J Trump for President, Inc.             $400.00             2016
------------------------------------------------------------------------
Donald J Trump for President, Inc.             $400.00             2016
------------------------------------------------------------------------
Donald J Trump for President, Inc.             $400.00             2016
------------------------------------------------------------------------
Texans for Greg Abbott                         $100.00             2016
------------------------------------------------------------------------
Texans for Greg Abbott                         $100.00             2016
------------------------------------------------------------------------
Texans for Greg Abbott                         $100.00             2016
------------------------------------------------------------------------
Donald J. Trump for President, Inc.             $80.00             2017
------------------------------------------------------------------------
Donald J. Trump for President, Inc.            $164.00             2017
------------------------------------------------------------------------
Texans for Greg Abbott                         $100.00             2017
------------------------------------------------------------------------


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):

        1974 Red Cross Certificate of Merit.
        2009 Woman of the Year in Nonprofit and Social Services by 
        National Association of Professional and Executive Women.
        2014, 2015, 2016 NonProfit Times Power and Influence Top 50.
        2017 America's Service Commissions (ASC) named to the ASC 20.

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


------------------------------------------------------------------------
         Title                 Publisher         Date(s) of Publication
------------------------------------------------------------------------
What Kind of Leader     Texas Association of    January 2018 quarterly
 Are You?                Public Employee         newsletter
                         Retirement Systems
                         (TEXPERS)
------------------------------------------------------------------------
OneStar Inaugural       OneStar Website         December 2017
 Newsletter
------------------------------------------------------------------------
Interagency             Posted on OneStar       December 2009, 2010.
 Coordinating Group      Foundation Website      2011, 2012, 2013. 2014,
 Legislative Annual                              2015, 2016, 2017
 Reports to the Texas
 Legislature
------------------------------------------------------------------------
Re-Envisioning for      NonProfit Times         December 2016
 Continued Percussion
------------------------------------------------------------------------
Rebalancing Public      Gower                   August 2015
 Partnership--Innovati
 ve Practice Between
 Government and
 Nonprofits From
 Around the World
 (Chapter 3)
------------------------------------------------------------------------
An Army of Good         Austin Business         September 2014
                         Journal
------------------------------------------------------------------------
Parallax: Death and     Self Published (Onion   January 2014
 Deceit in Texas         Creek Press, LLC)
------------------------------------------------------------------------
Commentary: Make        The Monitor News,       February 2014
 Service Part of our     McAllen, TX
 Texan Identity
------------------------------------------------------------------------
Member Profile OneStar  Texas Association of    March 2013, Vol. 28,
 Foundation--Building    Business Report         Issue 3
 a Stronger Nonprofit
 Sector for a Better
 Texas
------------------------------------------------------------------------
Is Grant-making         Grantmakers for         June 2011
 Getting Smarter?        Effective
                         Organizations (GEO)
------------------------------------------------------------------------
No Time for Ostriches   Greenlights for         January 2011
                         Nonprofit Success
------------------------------------------------------------------------
HHS Center for Faith-   The White House         July 2001
 Based and Community
 Initiatives Barrier
 Report
------------------------------------------------------------------------
Down the Long Road Up   Flight Training         June 1996
                         Magazine
------------------------------------------------------------------------


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):

        I have delivered relatively few formal speeches in the last 5 
        years. Most required only skeletal talking points. The one 
        exception was the testimony listed below.

        March 28, 2017: Written and oral testimony before the Committee 
        on Education and the Workforce Subcommittee on Higher Education 
        and Workforce Training, ``Examining the Corporation for 
        National and Community Service and its Failed Oversight of 
        Taxpayer Dollars.''

        June 2012: Speech for the dedication of the new dining hall at 
        Camp El Tesoro, Granbury, TX. This was in my capacity as chair 
        of the national board of trustees for Camp Fire. This was a 
        short informal speech about my childhood experiences at this 
        camp and the promise for Camp Fire camp programs to enrich and 
        teach young people. These were informal talking points.

        July 2012: Round Rock Chamber of Commerce Power Luncheon, ``The 
        Nonprofit Sector and its Effect on the Economy.'' These are 
        talking points that include statistics on national, State and 
        local nonprofits, foundations, charitable giving, volunteering, 
        and social innovation.

        March 2012: Camp Fire Promise to Practice. These are talking 
        points drafted for local Camp Fire Council CEOs related to the 
        new Camp Fire logo, branding, curriculum and methodology for 
        engaging young people and their families.

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

        My qualifications to serve as Commissioner of the 
        Administration on Children, Youth, and Families are in 
        alignment with the stated requirements and competencies in the 
        position description.

        Twenty-seven years advancing child welfare and family policies 
        (related to child abuse and neglect, foster care, adoption, 
        family violence, teen pregnancy prevention, child and youth 
        development) through service on the Texas Human Services Board; 
        Advisor to the Commissioner for the Administration on Children, 
        Youth, and Families; Deputy Secretary of the Maryland 
        Department of Human Resources; COO of the Corporation for 
        National and Community Service; and CEO of OneStar Foundation 
        (the National Service Commission for AmeriCorps in Texas); as 
        well as decades of volunteer service on numerous nonprofit 
        boards related to child and family welfare.

        Five years national leadership as chair of the board for Camp 
        Fire, a 106 year-old youth development organization using 
        research-based methodologies for curriculum and service 
        delivery in councils across the country serving almost 185,000 
        youth.

        Extensive State and Federal management and budgeting experience 
        with oversight for hundreds of employees dispersed throughout 
        the country.

        Deep knowledge of the nonprofit and philanthropic sectors and 
        their capacity to partner with government.

                   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.

        I will sever all connections with my present employers, 
        business firms, associations, and organizations if I am 
        confirmed by the Senate.

 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.

        I have no plans, commitments, or agreements to pursue outside 
        employment, with or without compensation, during my service 
        with the government.

 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 person or entity has made a commitment or agreement to 
        employ my services in any capacity after I leave government 
        service.

 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.

        If confirmed by the Senate, I expect to serve out my full term 
        or until the next presidential election, whichever is 
        applicable.

                   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.

        My interest in BlackRock Health Sciences Opps Svc held within 
        my 401(k), posed a potential conflict of interest, therefore, 
        even though it appears on the OGE278e, please note that I 
        divested my interest in it on December 20, 2017, the date I 
        finalized the OGE278e.

        My co-trusteeship of the Ralph and Adelaide Darling Family 
        Revocable Living Trust poses a potential conflict of interest.

        My position as Managing Member/CEO of Onion Creek Press, LLC, a 
        vehicle for self-publishing, poses a potential conflict of 
        interest.

        My position as chair of the board of America's Service 
        Commissions poses a potential conflict of interest.

        My current employment as CEO/president of OneStar Foundation 
        poses a potential conflict of interest.

 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.

        June 2007-present: Co-trustee, Family Revocable Living Trust, 
        Austin, TX.
        July 2013-present: Managing member, Onion Creek Press, LLC, a 
        vehicle for self-publishing.

 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.

        In March 2017, I provided the Texas congressional delegation 
        with information on the impact of national service (AmeriCorps 
        and Senior Corps) in our State in response to proposed 
        elimination of the Corporation for National and Community 
        Service.

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

        To avoid potential conflict of interest, I will resign as co-
        trustee of the Ralph and Adelaide Darling Family Revocable 
        Living Trust, upon confirmation.

        To avoid potential conflict of interest, I will resign as 
        managing member/CEO of Onion Creek Press, LLC, a vehicle for 
        self-publishing, upon confirmation.

        To avoid potential conflict of interest, I will resign as chair 
        of the board of America's Service Commissions, upon 
        confirmation.

        To avoid potential conflict of interest, I will resign as CEO/
        president of OneStar Foundation, upon confirmation.

 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.

        (Please see copies from OGE).

                       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.

        I have never 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.

 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.

        I have never 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.

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

        Month/year: December 1984
        Adoption of Jon Matthew Lewis
        By Daniel and Elizabeth Seale
        Name change Jonathon Kyle Seale
        Dallas County Courthouse
        600 Commerce Street
        Dallas, TX 75202

        Month/year: May 2000
        Uncontested divorce for irreconcilable differences
        Elizabeth Darling Seale v. Daniel Kyle Seale
        Bexar County Court House
        100 Dolorosa
        San Antonio, TX 78205

        Month/year: December 2003
        Contested divorce ultimately resolved by agreement
        Elizabeth Seale-Scott v. George Robert Scott, III
        Fairfax County Circuit Court
        4110 Chain Bridge Road
        Fairfax, VA 22030

        There were 2 post-divorce contempt actions filed in the same 
        case/court against Mr. Scott for violations of the divorce 
        agreement in 2005 and 2009.

        Month/year: October 2011
        Post-divorce contempt action against Mr. Scott to register 
        Virginia contempt order in Florida (where Mr. Scott was then 
        living) and enforce Virginia orders. Elizabeth Darling v. 
        George Robert Scott III
        Circuit Court 16th Judicial Circuit Monroe County, Florida
        302 Fleming Street
        Key West, FL 33040

        The final judgment of March 2012 found Mr. Scott in violation 
        of both Virginia orders and found that he took the actions to 
        post an offensive website and send disparaging materials 
        through the mail ``anonymously'' from Florida. He was ordered 
        to remove all webpages and social media postings. The court 
        also named a forensic attorney and granted her the authority to 
        ``take any and all measures to remove such content or material 
        immediately upon discovery of it and to further instruct the 
        host entities not to allow the same or any like or similar 
        content or material to be restored or to be re-established.'' 
        Mr. Scott was ordered to pay attorney's fees.

        Month/year: January 2015
        Frivolous lawsuit filed by Mr. Scott alleging a conspiracy
        George R. Scott III v. James Richard Perry, Elizabeth M. 
        Darling, The Texas Governor's Office, and The OneStar 
        Foundation of Texas
        U.S. District Court for the Western District of Texas
        501 West Fifth Street, Suite 1100
        Austin, TX 78701

        The case was dismissed on all counts by the court and sanctions 
        were awarded against Mr. Scott for having filed it. Further, 
        the court barred Mr. Scott from filing anything similar in the 
        future without going through the judge first.

 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.

        I have never been convicted (including pleas of guilty or nolo 
        contendere) of any criminal violation other than a minor 
        traffic offense.

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

        I believe I have had the opportunity above to share with the 
        committee information pertinent to my nomination. I am honored 
        and eager to serve.

                     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?

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

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

        If I am confirmed by the Senate, I am willing to provide such 
        information as is requested by such committees.

                                 ______
                                 
        Questions Submitted for the Record to Elizabeth Darling
                 Questions Submitted by Hon. John Thune
    Question. While feedback on the passage of the Family First Act has 
been positive, one thing that continues to concern those working on the 
front lines in South Dakota is the shortage of foster families. In 
particular, we are in the greatest need of homes for Native American 
children, groups of siblings, and kids with medical needs. When kids 
cannot be placed with families, what ideas will you bring to this 
position to help empower states to find more qualified foster families?

    Answer. Foster parent recruitment is an ongoing challenge, and with 
the FFPSA, there is still great need as we look to foster parents to 
care for some of the higher-needs children. If confirmed, I will look 
to the States to find those with the most effective recruitment and 
retention practices. All children deserve a loving home and the best 
possible chance for successful adulthood. I believe that communities 
must come together to provide culturally relevant, ACE and trauma-
informed, integrated systems of care for all children and youth in care 
and their biological and foster parents as well. I also believe that 
the best recruitment often comes from within the culture itself, 
speaking in familiar terms and setting norms that are often more easily 
embraced than if approached by a government entity or even a well-
intended but culturally insensitive caseworker or volunteer.

    Question. As you know, both the Children's Bureau and the Family 
and Youth Services Bureau at the Administration on Children, Youth, and 
Families fund important programs to support tribal child welfare 
programs and family violence prevention efforts. If confirmed, will you 
commit to working to understand the unique needs of Indian country and 
finding culturally appropriate solutions to address challenges on the 
reservations?

    Answer. If confirmed, I commit to working to understand the needs 
of Indian country and working with you and your staff to address their 
unique issues.

                                 ______
                                 
                 Questions Submitted by Hon. Ron Wyden
    Question. Family First is being implemented through guidance and 
not regulations, which means there is no formal process for the public, 
States, and stakeholders to comment.

    Members on both sides of the aisle have expressed concerns about 
elements of the recent guidance coming from the Children's Bureau, 
which you would oversee. It's my view that elements of that guidance 
are not consistent with congressional intent.

    If confirmed, would you commit to revisiting and revising this 
guidance?

    Answer. If confirmed, I will commit to working to ensure the Family 
First Prevention Services Act is fully implemented, as adopted by 
Congress, and will be taking a close look at current and proposed 
guidance from within ACYF.

    Question. Do you support proposals that would cap Federal funding 
for foster care services?

    Answer. If confirmed, I commit to learning more about various 
funding strategies, including capped allocation strategies. I support 
maximum flexibility to allow States to be innovative and collaborative 
across systems, both public and private, to address local needs in the 
most effective way possible. The FFPSA gives States the opportunity to 
bring communities together to provide preventive and supportive 
services for families, youth, and children with the goal of reducing 
the number of child removals and the need for ever-increasing State and 
Federal funding.

    Question. Do you believe taxpayer-funded child welfare agencies 
should be allowed to refuse to serve children and families on the basis 
of their faith background, sexual orientation, or gender identity?

    Answer. All young people in foster care, including those who face 
unique challenges, need the support of a nurturing family to help them 
negotiate adolescence and grow into healthy adults. I will work to 
ensure all children in out-of-home care will find a loving and 
respectful home. Should I be confirmed, I will commit that all ACYF-
funded programs will treat all children and youth fairly and with 
compassion and respect for their human dignity. Should I have the 
opportunity to serve as Commissioner of ACYF, I will be committed to 
seeing that the agency supports the well-being of all the children and 
youth its programs touch. I will promote positive youth development for 
all young people to increase their chances for success as healthy 
adults.

                                 ______
                                 
              Questions Submitted by Hon. Robert Menendez
    Question. During your hearing, you spoke about your support for a 
multidisciplinary community-based trauma-informed integrated system of 
care.

    As Commissioner, how will you work to ensure the trauma-informed 
care uses up-to-date evidence-based best practices?

    Answer. If confirmed, I will work with the HHS Secretary and ACF 
Assistant Secretary to build the body of evidence-based practices. I 
would promote the most efficient system changes to facilitate the 
implementation of the most up-to-date, 
evidence-based, and trauma-informed care for families, youth, and 
children.

    Question. How will you ensure all partners adhere to the highest 
standards of care and hold them accountable to ensure the safety and 
well-being of all children under your care regardless of where they are 
located?

    Answer. I believe that, by investing in recruitment and retention 
strategies that include community-based, trauma-informed, 
multidisciplinary, integrated services that foster parents and foster 
family homes will have a greater chance of success in caring for 
children and youth who are in their care. Accountability can be 
reinforced and facilitated through the gathering of timely, appropriate 
and accurate data for tracking and monitoring the safety and well-being 
of all children in care.

    Question. How will you work to leverage existing Federal resources 
and coordinate across HHS to provide consistent trauma-informed care?

    Answer. Through many HHS agencies, including SAMHSA, ACF, and ACYF, 
the Department has been intentional about integrating the concept of 
trauma-informed care throughout their programs. HHS provides resources 
for States and providers in the successful implementation of trauma-
informed methodologies. If confirmed, I will support and work to 
augment the body of learning around successful trauma-informed 
practices.

    Question. As Family First prepares to go live, will you commit to 
providing States the resources and guidance to achieve Family First's 
goals of prevention and keeping families together?

    What specific ideas do you have to help States extract maximum 
value from the flexibility Family First provides them in meeting the 
needs of children?

    Answer. If confirmed, I will commit to providing States with the 
information and resources available to achieve the goals of FFPSA. 
Family First has brought the concept of true prevention to the 
forefront of the discussion within child welfare. Successfully reducing 
the numbers of children and youth entering care will require a whole-
community, person-centered approach that engages multiple systems of 
care.

                                 ______
                                 
              Questions Submitted By Hon. Thomas R. Carper
    Question. One of the challenges facing our Nation's foster care 
system is the risk of improper prescribing of psychotropic drugs to 
foster children.

    I'm a firm believer in addressing root causes, and oftentimes, the 
underlying causes of foster children's trauma are brushed aside in 
favor of prescribing these mind-altering medications, which are simply 
not the solution for some of their problems.

    As a senior member of the Homeland Security and Governmental 
Affairs Committee, I've been pleased to work with colleagues on both 
sides of the aisle--including members on this committee: Senator Wyden 
and Senator Grassley--on the best ways we can work with HHS, States, 
and stakeholders to help curb this difficult issue.

    How do you believe States and Medicaid managed care organizations 
can play a role in ensuring appropriate oversight of improper 
psychotropic prescriptions?

    If confirmed, how would you work with Congress, States, and 
stakeholders to help address this ongoing problem?

    Answer. I am concerned about safe, appropriate, and effective use 
of psychotropic medications among children in foster care. I look 
forward to working with Administrator Verma and the CMS team to promote 
coordination for behavioral health care that is evidence-based and 
trauma-informed to ensure that children in out-of-home care receive 
high-quality health care when entering the child welfare system and 
that their needs are reassessed in an appropriate and timely manner. I 
am specifically excited to work with CMS on the new Integrated Care for 
Kids (InCK) model that is aimed at reducing expenditures and improving 
the quality of care for children covered by Medicaid and the Children's 
Health Insurance Program (CHIP).

    Question. In your testimony, you indicated that stakeholders in the 
child welfare system can learn a lot when they look at care through a 
trauma-informed lens.

    And as you know, LGBT children face difficulties in the foster care 
system because of discrimination or poor treatment based on their 
sexual orientation or gender identity.

    Do you believe that a child welfare provider should be allowed to 
deny services to same-sex couples or LGBT children based on their 
religious or moral convictions?

    If confirmed, in what ways would you and ACYF work with religious 
affiliated foster care providers who choose to deny services to LGBT 
couples and children in order to help these children find a loving and 
respectful home?

    Answer. All young people in foster care, including those who face 
unique challenges, need the support of a nurturing family to help them 
negotiate adolescence and grow into healthy adults. I will work to 
ensure all children in out-of-home care will find a loving and 
respectful home.

    Should I be confirmed, I will commit that the programs within ACYF 
will treat all children and youth fairly and with compassion and 
respect for their human dignity. I am committed to seeing that the 
agency supports the well-being of all the children and youth its 
programs touch, and promotes positive youth development that includes 
quality care and nurturing for success as healthy adults.

    Question. If confirmed, one of your responsibilities would be to 
oversee adolescent pregnancy programs in child welfare.

    When I was Governor of Delaware, I helped establish the Family 
Services Cabinet Council to help address issues like unintended 
pregnancies.

    In Delaware, which has one of the highest unintended pregnancy 
rates in the country, one of the things we've been doing is to help 
increase access to contraception, specifically LARCs (long-acting 
reversible contraceptives).

    But some studies have indicated foster youth have trouble accessing 
contraception. In your experience, what are the barriers to foster 
youth getting full access to contraception?

    If confirmed, how would you work with States and child welfare 
providers to lower these barriers to contraception?

    Answer. If confirmed, I will work to ensure that the programs 
within the Family and Youth Services Bureau promote the prevention of 
pregnancy and the spread of sexually transmitted diseases by providing 
the information and skills needed for sexual risk avoidance and to 
increase the protective factors needed to promote optimal health, as 
well as medically accurate information on contraception.

                                 ______
                                 
               Questions Submitted by Hon. Sherrod Brown
                         supporting caseworkers
    Question. As you know, children are entering the child welfare 
system at alarming rates and the child welfare workforce is struggling 
to meet their needs. Child welfare workers play a critical role in 
ensuring children have safe and healthy homes. We must ensure workers 
are properly trained to navigate complex cases of child abuse and 
neglect and are equipped with the proper resources to support our 
children. This will help keep our children safe, reduce staff turnover 
rates, and retain a qualified workforce.

    If confirmed, how will you work to ensure States maintain the 
supports necessary to properly train and retain a high-quality child 
welfare workforce?

    Answer. I believe that, by investing in ACE and trauma-informed 
recruitment, training and retention strategies, child welfare workers 
will be better equipped for the challenging role they play in working 
with biological, foster, and adoptive families. Child welfare workers 
are often overlooked and their own care and welfare neglected. If 
confirmed, I will promote a philosophy of care and healing for child 
welfare workers based on a multidisciplinary, community-based system 
that promotes and supports these front-line workers. I will also 
promote the importance of sound, up-to-date interoperable technology 
systems that ensure timely, appropriate, accurate data to inform policy 
and practice. Such systems also have the promise of reducing 
unnecessary and redundant data entry that affects the amount of time 
caseworkers can actually respond to, and interact with, children, 
families, and youth.
                      preventing child fatalities
    Question. In my State, there have been a number of tragic child 
abuse-related deaths, which is unacceptable. It is critical that we do 
more to support State efforts to prevent these tragedies. It is 
particularly important to identify early risk factors of abuse and 
neglect to swiftly intervene before it is too late.

    What role do you think the Administration on Children, Youth, and 
Families should play to support States in the development of child 
abuse prevention plans required by law? What impact do you think 
increased data sharing and cross-agency collaboration would have on 
preventing child abuse-related deaths? If confirmed, how would you 
prioritize the prevention of early risk factors to prevent future 
tragedies?

    Answer. If confirmed, I commit to promoting the importance of 
increased data sharing and cross-agency collaboration to better 
understand the link between early warning signs, such as a call to a 
hotline, and child maltreatment and fatalities. I will also work within 
HHS and with States to better understand where common definitions might 
be employed to better aggregate fatality data so we can promote and 
encourage practices that we know can and do often prevent child 
fatalities.
     implementing the family first prevention services act (ffpsa)
    Question. The Administration on Children, Youth, and Families will 
have a major role in implementing provisions from the Family First 
Prevention Services Act, which was signed into law as part of the 
Bipartisan Budget Act earlier this year.

    As Congress considers the FY 2019 and FY 2020 appropriations bills, 
are there steps that can be taken to ensure States like Ohio have 
adequate resources to adjust to the new system under Family First so 
that States do not face the cliff effect of an immediate loss in 
funding? If confirmed, what will you do to advocate for adequate 
resources for States under the new system, and ensure States have the 
tools they need to be successful?

    Answer. I will commit to ensuring the Family First Prevention 
Services Act is fully implemented, as adopted by Congress. The move to 
support families and children at imminent risk of removal is a bold 
step in addressing prevention services (mental health, substance abuse, 
parent skills training) to ideally slow the number of children and 
youth who are removed from their family and placed in out-of-home care. 
I believe that the proper resources are needed to implement FFPSA 
fully.
                            kinship supports
    Question. As you know, the addiction epidemic has had a 
particularly devastating impact on States like Ohio. As a result, 
children are left without anyone to care for them and grandparents and 
relatives have taken on the role of caretaker. In many cases, 
grandparents do not receive any additional support to provide for their 
grandchildren. In my State, kinship supports and interventions play a 
critical role to prevent unnecessary placements into foster care and 
improve outcomes for children.

    If confirmed, what are your plans to ensure grandparents and other 
family members involved in kinship care have the resources necessary to 
provide for these children? How would you work to ensure grandparents 
and relatives receive the assistance they need to raise their children 
without unnecessary restrictions?

    Answer. If confirmed, I will be a tireless advocate for kinship 
care and the supports necessary to allow family caregivers to assume 
the care of children and youth affected by family addiction. I strongly 
believe that such support must come through a multidisciplinary, ACE 
and trauma-informed, integrated system of care that is community-based. 
Such a system includes courts, Court Appointed Special Advocates 
(CASA), medical professionals, teachers, attorneys ad litem, judges, 
law enforcement, child welfare workers, and many others coming together 
as a system of caring supports and resources for kin caregivers and the 
biological parent(s) who are affected by addiction.

                                 ______
                                 
              Questions Submitted by Hon. Claire McCaskill
    Question. Children who have a history of interactions with the 
child welfare system are at increased risk of becoming trafficking 
victims. If confirmed, what specific actions would you plan on taking 
to reduce this risk? Additionally, what steps would you encourage State 
agencies to take to address this issue?

    Answer. If confirmed, I will work with the Family and Youth 
Services Bureau and other pertinent offices to promote and support 
multidisciplinary, trauma and Adverse Childhood Experience (ACE)-
informed, integrated systems of care for trafficked youth. Timely, 
appropriate and accurate data is critical to the successful 
implementation of such a system of care. I will work with ACYF 
leadership and State agencies to enhance the ease of, and access to, 
background checks and to ensure timely follow up with sponsors after 
placement to ensure that adequate supports are in place to for child 
and youth safety, in order to reduce the risk that such children become 
trafficking victims.

    Question. In your opening statement, you mentioned that you have an 
understanding of ``how policies can either help or hinder service 
delivery and client outcomes.'' Can you provide examples of policies 
that have hindered service delivery within the child welfare system?

    Answer. Most, if not all, States require that every child-placing 
agency certify and train respite caregivers and babysitters, which is 
critical to the safety and well-being of children and youth in care. 
When multiple child placing agencies have different certification and 
training standards, individuals who want to help support foster parents 
by providing respite care must go through each different agency's 
protocols, which can be costly and time intensive. One solution I am 
aware of was agreed to by over a dozen child-placing agencies in 
partnership with the State's child welfare agency. This collaborative 
created a common certification and training program that increased 
exponentially the number of respite caregivers available to foster 
parents. This State policy was a barrier; however, working with the 
community, the issue was effectively addressed.

    Question. The Family First Prevention Services Act was signed into 
law in February. Please explain how, if confirmed, you plan to approach 
oversight of the implementation of this act.

    Answer. If confirmed, I will work to improve child welfare 
accountability and oversight at all levels through effective monitoring 
and appropriate oversight by the Children's Bureau. I will work to 
achieve the goals of promoting family placements, improved caseworker 
training, annual State reviews, reporting of child maltreatment 
fatalities, promoting the importance and relevance of Child and Family 
Service Reviews and ensuring the process leads to meaningful 
improvement and reform. I will also work within ACF to better 
understand where common definitions are needed to ensure data 
integrity.

                                 ______
                                 
             Questions Submitted by Hon. Sheldon Whitehouse
    Question. You have talked about your interest in expanding the pool 
of available foster families to ensure that all foster children can be 
placed with safe, loving families. I am concerned about efforts in some 
States to allow child welfare organizations to refuse to work with 
certain potential adoptive families, citing their religious beliefs. Do 
you agree that child welfare organizations should be prohibited from 
discriminating against potential adoptive families if they receive 
Federal funding? Specifically, do you believe child welfare 
organizations should be prohibited from discriminating against LGBTQ 
families?

    Answer. All young people in foster care, including those who face 
unique challenges, need the support of a nurturing family to help them 
negotiate adolescence and grow into healthy adults. If confirmed, I 
will work to ensure all children in out-of-home care will find a loving 
and respectful home.

    Question. Organizations in my home State of Rhode Island have been 
working to expand the number of foster parents in Rhode Island with an 
eye toward recruiting diverse foster parents. For example, Foster 
Forward in Rhode Island has partnered with organizations like the NAACP 
to offer Spanish language training courses for prospective foster 
parents. If confirmed, how will you work to improve Federal support for 
initiatives to recruit diverse foster parents?

    Answer. Foster parent recruitment is an ongoing challenge, and with 
the FFPSA, the need is still greater as we look to foster parents to 
care for some of the highest need children. If confirmed, I will look 
to the states to find those with the most effective recruitment and 
retention practices. All children deserve a loving home and the best 
possible chance for successful adulthood. I believe that communities 
must come together to provide culturally relevant, ACE- and trauma-
informed, integrated systems of care for all children and youth in out-
of-home care and their biological and foster parents as well.

                                 ______
                                 
   Prepared Statement of Michael Faulkender, Ph.D., Nominated to be 
  Assistant Secretary for Economic Policy, Department of the Treasury
    Chairman Hatch, Ranking Member Wyden, and distinguished committee 
members, I am honored to be with you this morning as the nominee for 
Assistant Secretary for Economic Policy at the Department of Treasury. 
I am extremely grateful to Secretary Mnuchin and the President for 
selecting me for this position.

    I would like to take a moment to introduce the members of my family 
who are here with me today: my wife Maria of 14 years, our two children 
Lauren (12) and Catherine (8), and my dad and step-mom William and 
Connie Faulkender. I would not be here today without the unwavering 
support of my family members who are here with me today and those who 
were not able to attend but are watching from home.

    For the last 16 years, I have served as a finance professor, the 
last 10 years at the University of Maryland. I have also taught at 
Washington University in St. Louis, Northwestern University, and the 
University of Pennsylvania.

    My research examines the major factors behind firm financial 
decision-making such as investment, capital raising, capital 
distribution, risk management, and executive compensation. I have 
documented, written about, and taught to others how firms respond to 
the various incentives and frictions that exist in our economy. I have 
seen some of the intended results, but also some of the unintended 
consequences, of regulation.

    For the last year and a half, I have also had the privilege of 
serving as an associate dean, leading the faculty and staff in the 
delivery of our MBA and specialty masters programs and ensuring that 
our graduates have the applied technical and leadership skills that 
will propel them in their careers.

    As a career academic, my perspective on public policy has always 
been from outside the government, documenting the outcomes after the 
changes in law or regulation have been implemented. I am honored and 
incredibly excited by the opportunity to advise and participate in the 
crafting of those laws and rules.

    I believe that the academic community has an enormous depth of 
knowledge and rigor to bring to policy discussions and debates about 
the structure of our economy. As we continue to transition towards a 
more information-based economy and update the way that our economy is 
taxed and regulated, I believe that I can make a strong contribution to 
the important leadership role of the Department of the Treasury.

    Based on my conversations with people who have previously held this 
role, I know that the Department is home to a strong career staff of 
economists. If confirmed, I look forward to leveraging their 
substantial experience and expertise to serve the American people and 
address the economic opportunities and challenges confronting our 
Nation. The decisions made here in Washington have enormous 
consequences, so it is critical that proposals are subjected to 
rigorous and thoughtful assessment before being enacted and 
implemented. That is the approach I have taken to all of my academic 
work, and, if I am confirmed, that is the same standard I pledge to you 
will be generated by the Office of Economic Policy.

    It is an enormous privilege to appear before you today, and I look 
forward to your questions.

                                 ______
                                 

                        SENATE FINANCE COMMITTEE

                  STATEMENT OF INFORMATION REQUESTED 
                               OF NOMINEE

                      A. BIOGRAPHICAL INFORMATION

 1.  Name (include any former names used): Michael (Mike) William 
Faulkender.

 2.  Position to which nominated: Assistant Secretary for Economic 
Policy for the Department of the Treasury.

 3.  Date of nomination: April 9, 2018.

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

 5.  Date and place of birth: September 25, 1974, Sacramento, CA.

 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):

        El Camino Fundamental High School, Sacramento, CA, 1988 to 
        1992.

        University of California, Davis; BS managerial economics, 1992 
        to 1994.

        Northwestern University, Evanston, IL; Ph.D. finance, 1997 to 
        2002.

 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):

        First Interstate Bank.
        Customer service representative, Roseville, CA, 1994 to 1995.
        Customer service supervisor, Roseville and Sacramento, CA, 1995 
        to 1996.

        Wells Fargo Bank.
        Agent officer, Sacramento, CA, 1996.

        Kellogg School of Management, Northwestern University.
        Lecturer, 2001 to 2002.
        Visiting assistant professor of finance, 2007 to 2008.

        Olin School of Business, Washington University, St. Louis.
        Assistant professor of finance, 2002 to 2008.

        Robert H. Smith School of Business, University of Maryland.
        Assistant professor of finance, 2008 to 2012.
        Associate professor of finance, 2012 to 2017.
        Director of master of finance program, 2012 to 2017.
        Professor of finance, 2017 to present.
        Associate dean of masters programs, 2017 to present.

        The Wharton School, University of Pennsylvania.
        Visiting associate professor of finance, 2017.

        Bureau of Economic Analysis.
        Special sworn researcher, 2013 to present.

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):

        Bureau of Economic Analysis.
        Special sworn researcher, 2013 to present.

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):

        Associate dean, Robert H. Smith School of Business, University 
        of Maryland.

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

        Board member, Midwest Finance Association, 2016 to present.

        Associate editor, Journal of Finance, 2016 to 2017.

        Associate editor, Journal of Financial Services Research, 2010 
        to present.

        Co-editor, Finance Research Letters, 2013 to 2014.

        Member, American Finance Association, 2002 to present.

        Clarksville Overlook Homeowners Association:
          Member, 2008 to 2015.
          Treasurer, 2011 to 2012.
          President, 2013 to 2014.

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.

       I am a registered Republican and have previously donated to the 
party in small amounts.

        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.

       None that I can recall. I believe the last donation was in the 
mid-2000s.

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):

        Krowe Teaching Award, 2016.

        S.M.I.T.H. Faculty Award, voted by MBA students, 2016.

        Distinguished Teaching Award, 2013-2014 and 2014-2015.

        Most Engaged Professor Award, 2014, 2015, and 2017.

        ``Investment and Capital Constraints: Repatriations Under the 
        American Jobs Creation Act'' (with Mitchell Petersen), 
        recipient of Barclays Global Investors/Michael Brennan Best 
        Paper Award at Review of Financial Studies (May 2013).

        ``Cash Flows and Leverage Adjustments'' (with Mark Flannery, 
        Kristine Watson Hankins, and Jason Smith), recipient of the 
        Jensen Prize: second prize for 2012 best papers published in 
        the Journal of Financial Economics in the area of corporate 
        finance, Summer 2013.

        ``Does the Source of Capital Affect Capital Structure?'' (with 
        Mitchell Petersen), recipient of Barclays Global Investors/
        Michael Brennan Best Paper Award--runner up at Review of 
        Financial Studies, June 2007.

        ``Hedging or Market Timing? Selecting the Interest Rate 
        Exposure of Corporate Debt,'' nominated for the Brattle Prize 
        at Journal of Finance, 2005.

        James and Marcile Reid Chair, Olin Business School, 2006-2007.

        Reid Teaching Award, Olin Business School, January 2007.

        Reid Teaching Award, Olin Business School, September 2006.

        Fellow, Center for Financial Research, FDIC, 2004-2006.

        Doctoral Teaching Award, Kellogg School of Management, 2001-
        2002 academic year.

        University Scholar, Northwestern University, 1997-2000.

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

        ``Hedging or Market Timing? Selecting the Interest Rate 
        Exposure of Corporate Debt,'' Journal of Finance 60, April 
        2005, nominated for Brattle Prize.

        ``Does the Source of Capital Affect Capital Structure?'' (with 
        Mitchell Petersen), Review of Financial Studies 19, Spring 
        2006, recipient of Barclays Global Investors/Michael Brennan 
        Best Paper Award--runner up (2006).

        ``Corporate Financial Policy and the Value of Cash'' (with Rong 
        Wang), Journal of Finance 61, August 2006.

        ``Executive Compensation: An Overview of Research on Corporate 
        Practices and Proposed Reforms'' (with Dalida Kadyrzhanova, N. 
        Prabhala, and Lemma Senbet), Journal of Applied Corporate 
        Finance, Winter 2010.

        ``Inside the Black Box: The Role and Composition of 
        Compensation Peer Groups'' (with Jun Yang), Journal of 
        Financial Economics 96, May 2010.

        ``The Two Sides of Derivatives Usage: Hedging and Speculating 
        With Interest Rate Swaps'' (with Sergey Chernenko), December 
        2011, Journal of Financial and Quantitative Analysis vol. 46, 
        issue 6.

        ``Cash Flows and Leverage Adjustments'' (with Mark Flannery, 
        Kristine Hankins, and Jason Smith), 2012, Journal of Financial 
        Economics vol. 103, issue 3, recipient of the Jensen Prize: 
        second prize for 2012 best papers published in the Journal of 
        Financial Economics in the area of corporate finance.

        ``Investment and Capital Constraints: Repatriations Under the 
        American Jobs Creation Act'' (with Mitchell Petersen), Review 
        of Financial Studies 25, November 2012, recipient of Barclays 
        Global Investors/Michael Brennan Best Paper Award (2012).

        ``Is Disclosure an Effective Cleansing Mechanism? The Dynamics 
        of Compensation Peer Benchmarking'' (with Jun Yang), Review of 
        Financial Studies, 26, March 2013.

        ``Taxes and Leverage at Multinational Corporations'' (with 
        Jason Smith), 2016, Journal of Financial Economics vol. 122, 
        issue 1, lead article.

        ``Understanding Precautionary Cash at Home and Abroad'' (with 
        Kristine Hankins and Mitchell Petersen), 2018, working paper.

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):

        Not applicable. I have given a few graduation speeches in my 
        capacity as associate dean.

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

        For the past 20 years, I have been studying and researching 
        economics and finance. My recent research has been at the 
        intersection of finance and public policy. That work analyzing 
        how corporations have responded to various laws and regulations 
        will serve me well in advising the administration and the 
        Congress on how pending legislation or regulation may impact 
        corporate and individual decision-making. In addition, I have 
        held administrative roles that will prepare me to lead a team 
        of economists in the mission of the office.

                   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.

        I will take an unpaid leave of absence from the University of 
        Maryland. I will resign from my position as associate dean of 
        masters programs at the Smith School of the University of 
        Maryland. I have resigned from the Midwest Finance Association 
        board of directors.

 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.

        I will not pursue outside employment during my service.

 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.

        I will retain my tenured professor of finance position at the 
        University of Maryland and expect to return there upon 
        completion of my service.

 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.

        I expect to serve until the next presidential election, subject 
        to maintaining my tenure status at the University of Maryland 
        (I must renew my leave annually).

                   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.

        My father-in-law is managing director of Apollo Enterprises, a 
        privately held conglomerate engaged in engineering, 
        construction, manufacturing, and farming in Zambia. His 
        business partner is Alexander Chikwanda, formerly the Minister 
        of Finance of Zambia.

 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.

        During the course of the nomination process, I have engaged in 
        discussions with career ethics staff and the Office of 
        Government Ethics regarding potential issues arising out of my 
        financial holdings, past income, and past employment 
        relationships. These have been addressed in my ethics 
        agreement. I am not aware of any other potential conflicts of 
        interest.

 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.

        Much of my research has public policy implications, and some of 
        it has been cited in white papers that advocate particular 
        legislative outcomes. In addition, I have been interviewed by 
        numerous journalists over time regarding a variety of 
        legislation and regulation.

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

        I have executed an ethics agreement following discussions with 
        career staff in the Treasury Department and the Office of 
        Government Ethics and will abide by the terms of such 
        agreement. In addition, I am committed to following all 
        applicable ethics laws. If I identify a potential conflict of 
        interest, I will consult with ethics counsel.

 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.

        Copies have been provided.

                       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.

        No.

 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.

        I was sued over a traffic accident that occurred in June 2010. 
        The civil lawsuit was filed in 2013 and settled by State Farm 
        in 2014 for 2014. The civil claim was dismissed. The case was 
        filed in Prince George's Country, MD as Porter v. Faulkender, 
        case number CAL13-03328.

 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.

        None.

                     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.

                                 ______
                                 
    Questions Submitted for the Record to Michael Faulkender, Ph.D.
               Questions Submitted by Hon. Orrin G. Hatch
    Question. The tax cuts and reform bill that President Trump signed 
into law last December includes significant incentives for capital 
investment through full expensing, or what's known as 100-percent 
``bonus'' depreciation. The effects of strong capital investment 
include higher productivity and higher wages. My friends on the other 
side of the aisle like to point at current data suggesting that the tax 
bill is a failure because we aren't yet seeing enormous upticks in 
those measures. Dr. Faulkender, do you believe that it may take a 
period of time for such increased capital investment to provide the 
intended results--sustained higher productivity and wages? Do you think 
that these are the types of incentives needed to build a strong 
foundation for further and higher sustained economic growth?

    Answer. Incoming economic data show a notable rise in business 
investment in the first half of this year, likely in part due to the 
new tax law. Meanwhile, business survey data and other forecasts 
provide preliminary signs that manufacturing and small businesses have 
raised expectations of capital expenditures over at least the next 
year.

    The full effects of the tax bill on the real economy will take a 
few years to be fully realized. First, companies often make their large 
capital expenditure decisions as part of their strategic planning 
process that occurs over a number of months, if not the entire fiscal 
year. Once those decisions are made, sizable capital improvements will 
require planning, contracting, and potentially raising outside capital. 
All of those take time. Then the actual building of the new facilities 
must take place. Only then will the employees of that new facility 
start working and the productivity improvements be realized.

    The economics literature argues that tax incentives like bonus 
depreciation are worthwhile because they are only realized by companies 
if they do new activities. Tax incentives are part of the menu of 
Federal actions that facilitate economic growth. Smart and efficient 
regulation, reliable infrastructure, an educated workforce, and 
improved access to capital are others. If confirmed, I look forward to 
working with policymakers to analyze how all of these can be deployed 
to improve economic growth and wages.

    Question. Several of the provisions in the tax cuts and reform bill 
are scheduled to expire or phase out, including the 100-percent bonus 
depreciation provision. Do you think that such expirations and phase-
outs lead to uncertainty in the markets and dampens the intended 
incentive effects? Would you recommend that to provide the strongest 
incentive effect and long-term economic benefits, these provisions 
should be made permanent as soon as possible?

    Answer. Many corporate activities, particularly those arising from 
large capital expenditures, have operational effects that last decades. 
The greater certainty there is regarding what the economic, tax, and 
regulatory environment will look like, the greater willingness there is 
by investors and companies to fund long-term investments. In my 
experience and in my reading of the economic literature, temporary 
provisions and phase-outs often alter when investment takes place and 
is not as beneficial for raising long-term investment levels. Higher 
investment is more likely when lower rates and greater incentives are 
permanent.

                                 ______
                                 
              Question Submitted by Hon. Patrick J. Toomey
    Question. I disagree with the premise that a trade deficit with 
another nation indicates a harmful economic relationship and could be 
better managed by government officials who impose tariffs and other 
trade restrictions. The notion that trade deficits are harmful or 
counterproductive fails to recognize that both exports and imports are 
beneficial to the United States, since unrestricted access to imports 
provides consumers with a larger selection of affordable goods and 
services. Moreover, a trade deficit indicates a capital surplus; 
dollars sent abroad to purchase goods and reinvested in the United 
States. As such, trade deficits are an inappropriate measure of 
economic success between two countries, and trade balances are a 
function of long-term saving and investment, not trade policies.

    When the United States experiences strong economic growth and low 
unemployment, its trade deficit with another country tends to increase, 
as American consumers have more disposable income to purchase goods and 
services. By restricting trade in order to reduce our trade deficit, 
American consumers, employers, and businesses lose out and the economy 
cannot achieve its full potential.

    Should policymakers measure the success of a trading relationship 
solely based on whether a country runs a trade surplus or deficit? Do 
you believe that a country is ``stealing'' or engaged in illicit 
activities if it maintains a trade surplus with another country?

    Answer. Over extended periods of time, economic theory would argue 
that the aggregate trade of a country must come into balance. Extended 
periods of deficits or surpluses cannot go forever and will either be 
reversed by changes in trade behavior or significant changes in 
currency valuations. Note that this result is at the country level 
regarding its total external trade; it is not a statement about a 
particular bilateral trading arrangement. A range of factors--economic 
and otherwise--can contribute to policymakers considering a bilateral 
trading relationship as successful. If confirmed, I would be happy to 
work with you on this issue.

                                 ______
                                 
                 Question Submitted by Hon. John Thune
    Question. It has been 10 years since the Federal Government entered 
into a conservatorship with Fannie Mae and Freddie Mac. These 
government-sponsored enterprises are vitally important to the secondary 
mortgage market and to mortgage lenders across the Nation, including to 
community banks. While Congress must make reforms to the 
conservatorship of Fannie Mae and Freddie Mac legislatively, what 
additional reforms, if any, do you believe are appropriate for the 
Federal Housing Finance Agency (FHFA) and the Department of the 
Treasury to continue pursuing at the administrative level? 
Additionally, what are your views on the proposed rulemaking that FHFA 
recently initiated to revise certain capital requirements for Fannie 
Mae and Freddie Mac?

    Answer. It is my understanding that the objective of policymakers 
is for Fannie Mae and Freddie Mac to continue their mission of 
generating liquidity in the consumer mortgage market and borrower 
access to 30-year mortgages without requiring Federal funding or 
impairment of financial markets. To do that, we must ensure that the 
mortgages they securitize meet minimum quality requirements, that 
originators are held accountable for the veracity of the information 
generated on the loans, that their loan portfolios not needlessly take 
on excess risk, that the FHFA have the necessary authority and 
wherewithal to ensure compliance, and that the two GSEs maintain 
sufficient capital buffers. Financial economists such as myself can 
support policymakers by modeling the likely impact of specific policy 
proposals on such a goal. I defer to others on which of these things 
can be done under existing authority and which require new legislation.

    As a financial economist, I support strong required levels of 
capital. Sufficient skin in the game curbs unnecessarily risky activity 
arising because of implicit or explicit guarantees (moral hazard) and 
ensures that private investors take most, if not all, of the losses 
that arise from poor investments. Risk taking is necessary to a 
thriving private economy. However, if the benefits of that risk-taking 
behavior are going to flow to private investors than so too must the 
losses be borne by the private investors.

    If confirmed, I would be happy to work with you on this issue.

                                 ______
                                 
                 Questions Submitted by Hon. Ron Wyden
    Question. Administration's economic claims about the Republican tax 
cuts. Mr. Faulkender, at your nominations hearing, I asked you whether 
you agreed with the administration's frequently repeated claims about 
the economic effects of the Republican tax cuts. You responded by 
saying you had only skimmed the Joint Committee on Taxation's dynamic 
estimates of H.R. 1's effect on economic growth, so you were unable to 
offer an opinion. In the policy meeting with Finance Committee staff, 
you similarly responded to a question on the administration's claims 
about the tax cuts effects on wage growth that you had not read 
materials by Council of Economic Advisers Chairman Kevin Hassett, and 
so could not weigh in. In that policy meeting, you were also advised 
that questions on the administration's economic claims regarding the 
tax cuts would likely come from me and others at the hearing.

    This nominations hearing is essentially a job interview for the 
position of Treasury Assistant Secretary for Economic Policy. My guess 
is that if a private-sector employer asked you to familiarize yourself 
with key materials ahead of your interview, you would ensure that you 
mastered the content so as to be properly prepared. I am asking you to 
do the same thing now in responding to this question for the record. To 
be precise, this is the third time you are being asked to weigh in on 
the administration's key claims about the tax bill's economic impacts.

    Treasury Secretary Steven Mnuchin, who will be your boss if you are 
confirmed, said last fall that, ``Not only will this tax plan pay for 
itself, but it will pay down debt.''\1\ The official Joint Committee on 
Taxation report has said that, even taking dynamic scoring into effect, 
the tax cuts will cost over $1 trillion before debt service.\2\ 
Virtually all mainstream economists have dismissed the notion that 
these tax cuts will pay for themselves, let alone also pay down the 
debt.
---------------------------------------------------------------------------
    \1\ Kate Davidson, The Wall Street Journal, ``Treasury Secretary 
Steven Mnuchin: GOP Tax Plan Would More Than Offset its Cost,'' 
September 28, 2017.
    \2\ Joint Committee on Taxation, ``Macroeconomic Analysis of the 
Conference Agreement for H.R. 1, the `Tax Cuts and Jobs Act','' JCX-69-
17, December 22, 2017.

    Do you agree with Secretary Mnuchin's statement that the tax plan 
will pay for itself and even pay down the debt? Please provide a 
---------------------------------------------------------------------------
substantive explanation why or why not.

    Answer. On the corporate side, the reduction in the corporate tax 
rate will make it more attractive for multinationals to locate economic 
activity in the United States for many years to come. In addition, 
there is reason to believe that provisions in the bill will reduce the 
effectiveness of some of the transfer pricing activities of 
multinationals that shielded income from U.S. taxation and previously 
resulted in those activities being recognized in an offshore tax 
jurisdiction. These supply-side actions plus provisions like bonus 
depreciation indicate that economic activity in the United States will 
be higher than it otherwise would have been. These are structural 
changes that make the U.S. economy more competitive in the long run to 
ensure that technological innovations are more likely to occur here, 
and the benefits realized here, rather than abroad. Also, limits to 
interest deductions and other deduction eliminations will increase the 
tax base. The possibility does exist that these tax changes coupled 
with reductions in burdensome regulation may increase the corporate tax 
base enough to offset the reduction in the tax rate applied to 
corporate income.

    On the individual side, much of the differing views among 
economists on the overall revenue implications of the tax bill arise 
from different forecasts of how the Federal Reserve will respond to the 
current economic climate, where the U.S. economy is near full 
employment, consumers do not appear to be confronting difficulties 
borrowing, and consumer confidence is high. Given the position for 
which I have been nominated and the independence of the Federal 
Reserve, I do not want to speculate about potential future actions by 
the Fed.

    If confirmed, I look forward to leading the Office of Economic 
Policy in monitoring changes in economic behavior and estimating the 
overall impact on Federal revenue, employment, the use of social 
services, wages, and ultimately the Federal deficit. I would be happy 
to discuss these issues with you further.

    Question. Second, President Trump, his Council of Economic Advisers 
Chairman Kevin Hassett, and others in the administration have said 
repeatedly that the Republican tax cuts will raise average wages by 
$4,000. Yet, to date, real wages have remained pancake flat.\3\
---------------------------------------------------------------------------
    \3\ For example, see the Bureau of Labor Statistics, Real Earnings 
for July 2018 (released August 10, 2018).

    Do you agree with the President and the CEA Chairman that American 
workers will see a $4,000 wage increase due to the tax cuts? Please 
---------------------------------------------------------------------------
provide a substantive explanation why or why not.

    Answer. I have not spoken to Chairman Hassett about this matter or 
personally modeled and estimated the impacts of tax reform on average 
wages in the coming years. A benefit of tax reform is that 
multinationals are more likely to locate operations here in the United 
States rather than abroad. Absent tax reform, this offshoring of 
earnings would likely have continued, and the incentive to keep foreign 
profits abroad would have only continued to rise. Thus, I think we will 
see a higher pass-through to workers because of tax reform than we were 
seeing recently. There is also literature to suggest that much of the 
increased compensation employees are realizing is not going to wages 
but is instead paying for the costs of benefits.

    As noted above, if confirmed, I look forward to leading the Office 
of Economic Policy in monitoring changes in economic behavior and 
estimating the overall impact on Federal revenue, employment, the use 
of social services, wages, and ultimately the Federal deficit. I would 
be happy to discuss these issues with you further.

                                 ______
                                 
             Questions Submitted by Hon. Sheldon Whitehouse
    Question. Do you agree that carbon emissions produced by burning 
fossil fuels are the primary driver of climate change?

    Answer. As a financial economist, my training is in the area of why 
and how firms raise capital, allocate capital, manage risk, and respond 
to various economic incentives. I have not done research, nor have I 
received training, in the area of climate science or energy generation. 
I will have to defer to researchers in those fields to provide expert 
analysis regarding the primary drivers of climate change and the 
environmental impacts of fossil fuels.

    Question. Do you agree that carbon emissions are a negative 
externality of producing and consuming fossil fuels?

    Answer. As my career has focused on financial economics, I have not 
conducted in-depth research into the positive or negative economic 
impacts of the production and consumption of fossil fuels. I defer to 
my colleagues who have given these issues the attention they deserve.

    Question. Do you agree that implementing policies to ensure that 
the price of a good reflects its true cost is a broadly accepted 
principle among economists?

    Answer. Yes, there is an appropriate role for policymakers to use 
regulation and taxation to address externalities such that the 
generator of those externalities incurs the costs of them. As an 
economist, I can help policymakers understand the likely economic 
impact of such policy choices.

    Question. A 2015 survey of professional economists by the New York 
University School of Law revealed that 81 percent of the economists 
surveyed agreed that pricing carbon is the most efficient way to reduce 
carbon emissions. Do you agree with this consensus?

    Answer. Although I have not conducted in-depth analysis of specific 
proposals to price carbon, pricing or taxing a product is generally an 
effective way to incentivize using less of that product.

    Question. Recently, organizations as diverse as Freddie Mac, the 
Union of Concerned Scientists, and the insurance industry trade 
publication Risk and Insurance have been warning of the risk of a 
collapse in coastal real estate values. For example, Freddie Mac 
writes, ``While technical solutions may stave off some of the worst 
effects of climate change, rising sea levels and spreading flood plains 
nonetheless appear likely to destroy billions of dollars in property 
and to displace millions of people. The economic losses and social 
disruptions may happen gradually, but they are likely to be greater in 
total than those experienced in the housing crisis and the Great 
Recession.'' Given these warnings, do you think that the administration 
should be pursuing policies to limit carbon emissions?

    Answer. I have not conducted in-depth analysis of the economic 
impact of climate change. However, in serving as an associate dean at a 
major university, I have experience leading economists and other 
faculty and staff working across a range of fields. If confirmed, I 
look forward to better understanding how the work of the Office of 
Economic Policy and other relevant agencies can support policymakers in 
these areas.

    Question. Many academic economists are also warning of the risk of 
a ``carbon bubble.'' The Bank of England is concerned, warning that 
``investments in fossil fuels and related technologies . . . may take a 
huge hit.'' Some economic modeling also suggests that should the carbon 
bubble burst, the U.S. economy would take a particularly big hit, as 
our oil and gas industry is composed of high-cost producers. These 
models suggest that the U.S. might see a greater than 5 percent decline 
in GDP and millions of lost jobs. Given these warnings, do you think 
that the administration should be pursuing policies to limit carbon 
emissions?

    Answer. The economic impact of a shift to an alternative energy 
source would depend upon who creates that alternative source. If it is 
U.S. companies that create and expand that alternative, the decline in 
impacted industries would be offset by the gains in the U.S. companies 
providing the substitute form of energy. As long as American companies 
are the ones fulfilling U.S. energy needs, the impact from shifting 
from one source to another on the U.S. economy as a whole should be 
negligible. This will indeed most likely happen if the U.S. continues 
to lead other nations in the areas of research and innovation. However, 
there may be other implications outside of the macro-economic impact 
that policymakers may wish to consider.

    Question. Nobel Prize-winning economist Joseph Stiglitz recently 
supplied testimony in a case in which several children are suing the 
U.S. government for its failure to reduce carbon emissions. Stiglitz 
warns of the economic risks of climate change, but also states that 
``[R]etrofitting the global economy for climate change would help to 
restore aggregate demand and growth. [C]limate policies, if well 
designed and implemented, are consistent with growth, development, and 
poverty reduction. The transition to a low-carbon economy is 
potentially a powerful, attractive, and sustainable growth story, 
marked by higher resilience, more innovation, more livable cities, 
robust agriculture, and stronger ecosystems.'' Given Stiglitz's 
testimony, do you think that the administration should be pursuing 
policies to limit carbon emissions?

    Answer. While I am familiar with some of Stiglitz's economic 
publications, I am not familiar with this testimony. I am also not 
familiar with the low-cost form of energy that Professor Stiglitz 
recommends that we transition to. As Stiglitz appears to imply in the 
excerpt above, the specifics of such policies would have bearing on 
their economic impact.

    Question. A Government Accountability Office (GAO) report found 
that the economic costs of climate change in the U.S. in 2017 exceeded 
$300 billion. This report also estimated that taxpayers would be on the 
hook for more than $1 trillion in climate change-related costs through 
2039. Given GAO's conclusions, do you think that the administration 
should be pursuing policies to limit carbon emissions?

    Answer. As noted above, I have not conducted in-depth analysis of 
the economic impact of climate change but have experience leading 
economists and other faculty and staff working across a range of 
fields. If confirmed, I look forward to better understanding how the 
work of the Office of Economic Policy and other relevant agencies can 
support policymakers in these areas.

                                 ______
                                 
              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 Michael Faulkender to be Treasury Assistant Secretary for 
Economic Policy and Elizabeth Darling to be Health and Human Services 
(HHS) Commissioner on Children, Youth, and Families.

    This morning we are meeting to discuss the nominations of Michael 
Faulkender, to be Treasury Assistant Secretary for Economic Policy, and 
Elizabeth Darling, to be Commissioner on Children, Youth, and Families 
at the Department of Health and Human Services.

    If confirmed, Dr. Faulkender will support the Secretary of the 
Treasury directly as one of the foremost economic officials in our 
government. That role is an important one. And with the important 
changes from tax reform just starting to take effect, Dr. Faulkender's 
economic analysis will be key. The Office of Economic Policy in the 
Department of Treasury analyzes and reports on both current and 
prospective economic developments in the United States and world 
economies.

    In his role, Dr. Faulkender would lead that office, as well as 
assist in determining appropriate economic policies and participate in 
creating the administration's budget. This is a brief overview of a 
rather complex job, one with serious and critical duties. But I believe 
Dr. Faulkender is up to the task.

    As you will hear in a few minutes when we introduce both of our 
witnesses, Dr. Faulkender has had a distinguished career in academia, 
where he has risen to the level of an associate dean at the University 
of Maryland's Robert H. Smith School of Business and won many teaching 
awards as well.

    But as mentioned, we are also here today to consider Ms. Darling. 
Ms. Darling has a broad range of experience at the Federal, State, and 
local levels, especially in areas fostering collaboration between 
government and community-based organizations. If confirmed, Ms. Darling 
will oversee two important child welfare agencies within HHS.

    First is the Children's Bureau, which manages the multibillion-
dollar child welfare entitlement programs, including foster care, a 
program that recently received a significant bipartisan overhaul from 
Congress. Ms. Darling will also lead the Family and Youth Services 
Bureau, the office serving runaway or homeless youth and supporting 
victims of domestic violence.

    These are important programs that directly affect the lives of 
millions of Americans each year. And the work ahead will not be easy. 
However, I am confident that Ms. Darling's prior experience at HHS 
under the Bush administration, and her work in Maryland and Texas, make 
her a qualified candidate for this important position.

    Together, the nominations of both Dr. Faulkender and Ms. Darling 
represent an example of two well-qualified candidates being nominated 
to key positions within the executive branch, and confirming these two 
nominees will help us ensure our government can fulfill the promises we 
have made to the American people.

                                 ______
                                 
                 Prepared Statement of Hon. Ron Wyden, 
                       a U.S. Senator From Oregon
    The gods have a way of dropping Earth-shaking news right before 
Finance Committee hearings. This morning's hearing is no different, and 
the news that broke last night about the prosecutions of two Trump 
associates now has ramifications for one of the nominations before the 
committee today.

    The President's personal lawyer and his former campaign chairman 
are confessed or convicted felons. They join a long and growing list of 
Trump associates who've broken the law. Mr. Manafort, relevant to this 
committee, stole from every American taxpayer when he committed tax 
fraud. Mr. Cohen's crimes are also relevant to our investigative work 
in multiple areas. But the Trump Treasury Department is continuing to 
stonewall this committee's attempts to investigate these matters of 
criminal tax evasion, corruption, and foreign influence in our 
elections. That is why I am maintaining holds on all Treasury 
nominations.

    Yesterday's news makes one issue clear: by refusing to answer our 
questions, the Trump Treasury Department is helping to cover up 
criminal activity. This stonewalling has gone on far too long. When the 
Treasury decides to play ball and provide satisfactory answers to the 
questions Democratic members of this committee are asking--not just 
Republicans--then it will no longer be necessary to hold nominees.

    Onto the two nominations before the committee this morning. If 
confirmed, Dr. Michael Faulkender will head up the Office of Economic 
Policy at the Treasury Department. He'll be in charge of some of the 
most important economic analysis that comes out of the executive 
branch.

    It's a significant job, in no small part because the Trump 
administration--particularly when it comes to tax--has proven to be a 
purveyor of economic fiction. And you don't have to take my word for 
it. You can ask any typical American worker if they've gotten the 
$4,000 raise they were promised they'd get as a result of the Trump tax 
law. You can also ask any respected, mainstream economist whether tax 
handouts to the wealthy and corporations pay for themselves.

    A lot of these rainbow and unicorn tax fantasies came straight from 
the White House. But during the debate on the tax bill, Secretary 
Mnuchin also fabricated a story about Treasury, and the Office of 
Economic Policy in particular, putting out a comprehensive analysis 
that would prove these fantasy claims to be true. But what Treasury did 
release wasn't a full report--it was a single page, and it failed to 
meet the middle-school math-class standard of ``showing your work.''

    So first of all, I hope that if Dr. Falkender is confirmed, he'll 
get the office back in the game on these big legislative issues. And 
second, I hope he will give the Congress and the public reason to 
believe Treasury's economic analysis is trustworthy.

    That won't be an easy job, because this administration often seems 
to be allergic to facts. But given how vital a role this office plays 
at the Treasury--and not just on tax policy, but on international 
trade, financial markets, and much more--this is an important post.

    Second, Ms. Elizabeth Darling is nominated to serve as Commissioner 
of the Administration on Children, Youth, and Families. Over the last 
few years, the Finance Committee worked extensively on a bipartisan 
basis to pass the largest overhaul of our child welfare system in 
decades. If confirmed, Ms. Darling will have a big role to play in 
implementing that legislation, so both sides of this committee will 
look forward to working with her on that front.

    But in the meantime, I'm concerned that the Trump administration is 
turning its attention toward proposals that would undo much of the 
progress that's been made with respect to child welfare. First, there 
is an effort by this administration to slash child welfare funding in 
the long run. It's the same type of hit job the President's budget-
crunchers want to inflict on Medicaid--capping funding and crippling 
the ability of States to serve many of the most vulnerable youngsters 
and families out there.

    There's also an attempt underway to allow child welfare providers 
to discriminate against potential foster parents simply because they 
are LGBTQ Americans or people of particular faith backgrounds. The 
acting head of the Administration for Children and Families says he 
wants to move further in that direction.

    Colleagues, this is wrong. Not only is it a discriminatory policy 
based on nothing but intolerance, it would almost certainly deny a lot 
of children the opportunity to grow up in safe and loving homes.

    I'll have questions for Ms. Darling on these issues, and I hope she 
will stand up against these policies if she's confirmed.

                                  [all]