[House Hearing, 117 Congress]
[From the U.S. Government Publishing Office]
THE ANNUAL TESTIMONY OF THE SECRETARY
OF THE TREASURY ON THE STATE OF THE
INTERNATIONAL FINANCIAL SYSTEM
=======================================================================
HYBRID HEARING
BEFORE THE
COMMITTEE ON FINANCIAL SERVICES
U.S. HOUSE OF REPRESENTATIVES
ONE HUNDRED SEVENTEENTH CONGRESS
SECOND SESSION
__________
APRIL 6, 2022
__________
Printed for the use of the Committee on Financial Services
Serial No. 117-78
[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]
______
U.S. GOVERNMENT PUBLISHING OFFICE
47-477PDF WASHINGTON : 2022
HOUSE COMMITTEE ON FINANCIAL SERVICES
MAXINE WATERS, California, Chairwoman
CAROLYN B. MALONEY, New York PATRICK McHENRY, North Carolina,
NYDIA M. VELAZQUEZ, New York Ranking Member
BRAD SHERMAN, California FRANK D. LUCAS, Oklahoma
GREGORY W. MEEKS, New York BILL POSEY, Florida
DAVID SCOTT, Georgia BLAINE LUETKEMEYER, Missouri
AL GREEN, Texas BILL HUIZENGA, Michigan
EMANUEL CLEAVER, Missouri ANN WAGNER, Missouri
ED PERLMUTTER, Colorado ANDY BARR, Kentucky
JIM A. HIMES, Connecticut ROGER WILLIAMS, Texas
BILL FOSTER, Illinois FRENCH HILL, Arkansas
JOYCE BEATTY, Ohio TOM EMMER, Minnesota
JUAN VARGAS, California LEE M. ZELDIN, New York
JOSH GOTTHEIMER, New Jersey BARRY LOUDERMILK, Georgia
VICENTE GONZALEZ, Texas ALEXANDER X. MOONEY, West Virginia
AL LAWSON, Florida WARREN DAVIDSON, Ohio
MICHAEL SAN NICOLAS, Guam TED BUDD, North Carolina
CINDY AXNE, Iowa DAVID KUSTOFF, Tennessee
SEAN CASTEN, Illinois TREY HOLLINGSWORTH, Indiana
AYANNA PRESSLEY, Massachusetts ANTHONY GONZALEZ, Ohio
RITCHIE TORRES, New York JOHN ROSE, Tennessee
STEPHEN F. LYNCH, Massachusetts BRYAN STEIL, Wisconsin
ALMA ADAMS, North Carolina LANCE GOODEN, Texas
RASHIDA TLAIB, Michigan WILLIAM TIMMONS, South Carolina
MADELEINE DEAN, Pennsylvania VAN TAYLOR, Texas
ALEXANDRIA OCASIO-CORTEZ, New York PETE SESSIONS, Texas
JESUS ``CHUY'' GARCIA, Illinois
SYLVIA GARCIA, Texas
NIKEMA WILLIAMS, Georgia
JAKE AUCHINCLOSS, Massachusetts
Charla Ouertatani, Staff Director
C O N T E N T S
----------
Page
Hearing held on:
April 6, 2022................................................ 1
Appendix:
April 6, 2022................................................ 49
WITNESSES
Wednesday, April 6, 2022
Yellen, Hon. Janet L., Secretary, U.S. Department of the Treasury 4
APPENDIX
Prepared statements:
Yellen, Hon. Janet L......................................... 50
Additional Material Submitted for the Record
Maloney, Hon. Carolyn:
Written statement of American Citizens Abroad................ 54
Yellen, Hon. Janet L.:
Written responses to questions for the record from
Representative Auchincloss................................. 61
Written responses to questions for the record from
Representative Emmer....................................... 91
Written responses to questions for the record from
Representative Foster...................................... 57
Written responses to questions for the record from
Representative Hill........................................ 89
Written responses to questions for the record from
Representative Huizenga.................................... 87
Written responses to questions for the record from
Representative McHenry..................................... 63
Written responses to questions for the record from
Representative Nikema Williams............................. 59
THE ANNUAL TESTIMONY OF
THE SECRETARY OF THE
TREASURY ON THE STATE
OF THE INTERNATIONAL
FINANCIAL SYSTEM
----------
Wednesday, April 6, 2022
U.S. House of Representatives,
Committee on Financial Services,
Washington, D.C.
The committee met, pursuant to notice, at 10:04 a.m., in
room 2128, Rayburn House Office Building, Hon. Maxine Waters
[chairwoman of the committee] presiding.
Members present: Representatives Waters, Maloney,
Velazquez, Sherman, Scott, Green, Cleaver, Perlmutter, Himes,
Foster, Beatty, Vargas, Gottheimer, Gonzalez of Texas, Lawson,
Axne, Casten, Pressley, Lynch, Adams, Tlaib, Dean, Garcia of
Illinois, Garcia of Texas, Williams of Georgia, Auchincloss;
McHenry, Lucas, Posey, Luetkemeyer, Huizenga, Wagner, Barr,
Williams of Texas, Hill, Emmer, Zeldin, Loudermilk, Mooney,
Davidson, Budd, Kustoff, Gonzalez of Ohio, Rose, Steil, and
Sessions,
Chairwoman Waters. The Financial Services Committee will
come to order.
Without objection, the Chair is authorized to declare a
recess of the committee at any time.
I intend to conclude today's hearing at approximately 1:00,
so that means everybody is going to be kept to the exact time
that they are allotted: 5 minutes.
Today's hearing is entitled, ``The Annual Testimony of the
Secretary of the Treasury on the State of the International
Financial System.''
I now recognize myself for 4 minutes to give an opening
statement.
I would like to welcome Treasury Secretary Janet Yellen,
who today is presenting testimony for the first time on the
state of the international financial system. This is a very
timely hearing given that it is the international financial
system established by the United States and its allies after
World War II that enables the West to hit the Russian economy
with unprecedented force in response to the travesty and
brutality of Putin's war against Ukraine. The most powerful
sanctions to date have blocked Russia's largest financial
institution and its central bank from the global financial
system. I commend President Biden and Secretary Yellen for
their leadership in coordinating these efforts with our allies
and their support of these efforts.
I recently sent a letter to the trade associations
representing our nation's financial institutions, asking them
to report how U.S. businesses are doing their part to exit
Russia and block funding for Putin's war crimes, so I look
forward to their fulsome responses. The unity of our allies in
helping Ukraine did not occur by accident. In fact, this unity
is a direct result of the Biden Administration's efforts to
renew the U.S. commitment to global economic cooperation.
President Biden signaled this commitment last year with his
first budget proposal, which boosted U.S. contributions to the
Multilateral Development Banks (MDBs), global climate finance
efforts, and food insecurity programs by 73 percent. This was
followed by Secretary Yellen's support for a new allocation of
Special Drawing Rights at the International Monetary Fund,
which provided a $275 billion liquidity boost to emerging
economies to help them respond to the global pandemic.
There will also be a new test of the strength of the
international financial system and its international financial
institutions, which will center on the ability and willingness
of western nations to adequately respond to the humanitarian,
energy security, and food insecurity crisis caused by the war
in Ukraine. But our work is not done. This committee recently
marked up legislation to further isolate Russia and support
Ukraine, including my bill, the Nowhere to Hide Oligarchs'
Asset Act, that assists the Financial Crimes Enforcement
Network (FinCEN) in identifying the yachts, the luxury
apartments, and other assets of Putin's cronies, and we will
continue to keep the pressure on Putin.
Additionally, my committee intends to pay close attention
to the challenges faced in the Caribbean, including a lack of
access to international banking services. So, I want to see a
concerted effort by international financial institutions to
focus on the Caribbean and show the world that development is
possible even under the most challenging circumstances.
Secretary Yellen, I look forward to your testimony.
I now recognize the ranking member of the committee, the
gentleman from North Carolina, Mr. McHenry, for 4 minutes.
Mr. McHenry. Thank you, Madam Chairwoman, and thank you,
Secretary Yellen, for appearing before the committee. It has
been a long time coming. I know Democrats control the House,
the Senate, and the White House. But our expectation is that
the Treasury Secretary will comply with the law and appear
before our committee and other committees, as the law dictates.
So we are grateful you're here, but this is long overdue,
especially considering the Russia-Ukraine conflict. And also,
we note on Capitol Hill that the Chinese government is taking
notes, especially on the U.S. response in this conflict.
The Biden Administration sanctions have helped isolate the
Russian economy. That is good, but it was reactive at best. We
watched as Russia amassed troops at the border last fall, all
the while claiming no plans for invasion, a claim parroted by
Chinese officials as late as February 23rd. And at the same
time that all of this is happening with Russia and Ukraine, we
see China's continued activities in the Taiwan Strait, and they
are telling us that supporting Taiwan is, ``dangerous to our
relationship.'' We must remain clear-eyed about whom we're
dealing with here. China must feel the pinch of its no-limit
partnership with Russia. While the Biden Administration
eventually sanctioned Russia, it also unwittingly provided a
means by which China could help Russia circumvent those
sanctions.
Let me explain. Last year, the Treasury Department bypassed
Congress and approved a general allocation of International
Monetary Fund Special Drawing Rights (SDRs), sending Russia and
Belarus more than $18 billion, de facto $18 billion in no-
strings-attached liquidity. State sponsors of terrorism, like
Iran and Syria, received billions more, by the way. Republicans
warned that an SDR allocation ran counter to U.S. sanctions
policy. As the Putin regime continues its assault on Ukraine,
it is clear that our concerns were justified. And yet, even the
Office of Foreign Assets Control (OFAC) seeks to block Russia's
access to foreign reserves, at the same time our country
allowed SDRs to become a lifeline that the Russians may
exchange for Chinese currency, for the Chinese RMB.
Now, U.S. officials have to ask foreign countries not to
redeem the very same Russia SDRs this Administration pushed for
just a few months ago. This policy doesn't make any sense. That
was a bad decision. And I think it is important that the public
recognize and this Administration recognize that Congress is a
partner in this fight, this international fight that we have.
It is the Treasury Department that has a duty to keep us
informed. To date, we have yet to receive certain reports
related to the international financial institutions under
[inaudible]. This includes policies regarding China, Taiwan,
and efforts against terrorism financing generally.
I appreciate Treasury's work in terrorism and financial
intelligence. It is good work, but here, too, Treasury must
respect oversight of Congress, and it is simply unacceptable
that Treasury officials have dodged public hearings for as long
as they have. We have to work to ensure that we have maximum
pressure on Moscow so that the Putin regime changes course in
Ukraine. But at the same time, we cannot take our eyes off the
challenge that China poses and the risks that a rising China
poses to the stability of the world.
So, Secretary Yellen, thank you for being here, and with
that, Madam Chairwoman, I yield back.
Chairwoman Waters. Thank you very much, Ranking Member
McHenry.
I now recognize the gentleman from Connecticut, Mr. Himes,
for 1 minute.
Mr. Himes. Thank you, Madam Chairwoman, and Madam
Secretary. I have been in dozens of these hearings with at
least four Secretaries of the Treasury, but I can't remember a
hearing in which cooperation and unified action were more
necessary. As we speak, Russian troops are raping women, they
are murdering military-aged men, and they are targeting
children in Ukraine. I don't think anyone in this room will
ever forget the images that we saw of Russian barbarism in
Bucha.
So, our mission is clear. Democrats and Republicans,
Legislative and Executive Branches, we must do all we can to
help Ukraine win this war. We must show the Russian people that
the nation of Tolstoy and Tchaikovsky will be completely
isolated with a stone-age economy as long as they are governed
by a butcher. And whether it takes 1 year or 10, Vladimir Putin
must answer to the laws and the standards of decency that he
mocks. So, I have just one question today, which is, what more
can we do to help the people of Ukraine and the survival of our
democracy?
Chairwoman Waters. I now recognize the gentleman from
Kentucky, Mr. Barr, for 1 minute.
Mr. Barr. Secretary Yellen, thanks for being back with us,
and I just want to compliment my friend from Connecticut, Mr.
Himes. I couldn't say it better myself. I will say one thing we
could do more is to sanction the energy-related transactions,
which we are not doing.
Russia's war on Ukraine highlights the important role of
the Office of Foreign Assets Control (OFAC) within Treasury to
put economic pressure on Putin and the Russian military. U.S.
sanctions, coordinated with our allies, have had some effect,
but we can do more. As I said, the atrocities on display,
especially in recent days, necessitate that the U.S. use its
full sanctions power, including comprehensively limiting
Russia's ability to profit from oil and gas sales. We are not
sanctioning energy-related transactions. We need to do so now.
The International Monetary Fund (IMF) is also at a
crossroads. The IMF plays an important role in promoting
international macroeconomic stability, yet scandals at the top
of the organization and its mission creep into issues like
climate change create a lack of confidence in its leadership.
This hearing will focus on Treasury's representation of U.S.
interests at international financial institutions (IFIs), and I
look forward to today's testimony.
Chairwoman Waters. Thank you very much. I want to welcome
the Honorable Janet Yellen, Secretary of the United States
Department of the Treasury.
You will have 5 minutes to summarize your testimony. You
should be able to see a timer that will indicate how much time
you have left for your testimony.
And without objection, your written statement will be made
a part of the record.
Secretary Yellen, you are now recognized for 5 minutes to
present your testimony.
STATEMENT OF THE HONORABLE JANET L. YELLEN, SECRETARY, U.S.
DEPARTMENT OF THE TREASURY
Secretary Yellen. Thank you, Chairwoman Waters, Ranking
Member McHenry, and members of the committee. Thank you for
giving me the opportunity to speak to you today. I am here to
discuss Treasury's oversight of the international financial
institutions, or IFIs, and our role in promoting inclusive and
sustainable growth, and global monetary and financial stability
and development.
Over the last 2 years, the IFIs have led the way in helping
low-income and developing countries fight the COVID-19
pandemic. Since the beginning of the crisis, the IMF has
approved nearly $175 billion in emergency lending, concessional
financing, debt service relief, and precautionary support to
fund pandemic response and economic recovery efforts. The
Multilateral Development Banks, or MDBs, approved nearly $130
billion over the same period to address the health, economic,
and social impacts of the pandemic. Treasury has pressed the
World Bank to work with international partners to improve
vaccine readiness and support increased vaccine delivery in
developing countries. As long as this pandemic is raging
anywhere in the world, the American people will be vulnerable
to new variants.
The importance of the IFIs is even more paramount given
Russia's brutal and unprovoked invasion of Ukraine. Russia's
actions, including the atrocities committed against the
innocent Ukrainians in Bucha, are reprehensible, represent an
unacceptable affront to the rules-based global order, and will
have enormous economic repercussions in Ukraine and beyond.
Treasury is committed to holding Russia accountable for its
actions so it cannot benefit from the international financial
system. President Biden has rallied over 30 countries,
representing well over half the world's economy, to impose
swift, severe sanctions and export controls on Russia.
Treasury is also working with our partners to block Russia
from accessing benefits from the international financial
institutions. Both the World Bank and the European Bank for
Reconstruction and Development (EBRD) have ceased approving new
financing for Russia since the unlawful annexation of Crimea in
2014. Since the invasion, these institutions have announced
further measures to prevent Russia's and Belarus' access to
financial and non-financial assistance. Since the start of the
war, rapid IMF and World Bank assistance has allowed Ukraine
fiscal space to pay salaries for civilians, soldiers, doctors,
and nurses, while also meeting its external debt obligations.
The IMF, the World Bank, and the EBRD will be critical partners
in rebuilding Ukraine, and they will also provide vital support
to neighboring countries welcoming refugees.
Spillovers from the crisis are heightening economic
vulnerabilities in many countries that are already facing
higher debt burdens and limited policy options as they recover
from COVID-19. The IFIs will play a critical role in several
areas.
First, food security. Together, Russia and Ukraine account
for nearly a third of the world's wheat exports. Russia's
invasion disrupted the flow of food for millions of people
around the world and caused prices to spike. The IFIs and food
security funds are already working to address both the short-
term and long-term effects of the invasion on global food
prices and supplies.
Second, energy security. The invasion of Ukraine has also
underscored the need for sustainable, affordable, clean, and
secure energy for economic growth and security for the United
States, as well as for governments that partner with the IFIs.
The MDBs' promotion of energy efficiency and capital investment
to diverse energy sources like solar, wind, and other non-
fossil, fuel-based energy sources, and away from suppliers,
such as Russia, strengthens energy security and reduces short-
term fossil fuel price risks, all while addressing the long-
term threat of climate change.
Public finance alone cannot meet this challenge. Treasury
is encouraging the MDBs to undertake reforms and adopt more
ambitious targets for mobilizing private capital, particularly
through their private-sector windows. Many low-income countries
are facing growing debt burdens as the pandemic continues into
a 3rd year. The IFI supported the G20's Debt Service Suspension
Initiative from 2020 to 2021, which helped eligible countries
free up resources to use toward pandemic support. The IMF and
the World Bank are now supporting the common framework for debt
treatments, which seeks to help low-income countries address
their longer-term debt-related vulnerabilities.
The recent record replenishment of the World Bank's
concessional window, the International Development Association
(IDA), will help deliver critical financing to the world's
poorest and most vulnerable to address these impacts at a
moment of urgent need.
Finally, the Biden Administration is seeking congressional
authorization to provide financing to bolster the Poverty
Reduction and Growth Trust (PRGT), the IMF's existing
concessional facility, and the new IMF Resilience and
Sustainability Trust (RST). The PRGT has been stretched by the
exceptional amount of COVID-19 financing provided and needs
additional funding. The new RST will provide targeted financing
alongside IMF programs to support countries' efforts to
strengthen energy security and pandemic preparedness.
I look forward to working with you to continue to advance
U.S. economic leadership abroad and to create opportunities for
Americans at home. I am happy to answer your questions.
[The prepared statement of Secretary Yellen can be found on
page 50 of the appendix.]
Chairwoman Waters. Thank you very much.
I now recognize myself for 5 minutes for questions.
While you will probably get a lot of questions today about
Ukraine, this is an international financial architecture that
we're looking at. And for years, I have been concerned about
how our Caribbean neighbors are treated in the international
community by U.S. financial institutions and by our own
government. In particular, I am concerned that, as a result of
U.S. Government actions and overly-cautious U.S. banks,
countries like Barbados, the Bahamas, Jamaica, and others have
been cut off from access to capital and credit de-risking, as
this issue is called, as direct and negative effects on the
ability of the Caribbean to build businesses, employ citizens,
facilitate economic development, and allow families to send and
receive funds from abroad. De-risking has consequences for the
United States as well.
The Caribbean region is both geographically and
historically close to the United States, and it is not only an
important trading partner, but also a strong, reliable ally in
security cooperation. That is why this committee passed
legislation which was signed into law through the Anti-Money
Laundering Act of 2020, that directs the Treasury to lead a
government-wide strategy on de-risking and provide that
strategy to Congress later this year.
Madam Secretary, can you speak to the importance of the
Caribbean region to the United States and what the Treasury is
doing to address de-risking, including Treasury's progress on
the strategy?
Secretary Yellen. Thank you for that question, Chairwoman
Waters. Financial inclusion, of course, is a very important
goal of the United States and the Treasury Department, and
we've been concerned about de-risking in the Caribbean and
other areas of the world. I would say that, in spite of that,
the United States has one of the lowest costs of sending
remittances of any country in the world, and we have seen
remittances increase considerably. The data that we have on the
Caribbean shows that there has been a significant increase in
remittances there, and into Latin America more generally.
There are diverse drivers of de-risking. One issue is
profitability concerns of banks that have led them to cut back,
and also, changes in global business strategy following the
2009-2010 financial crisis. Our Anti-Money Laundering/Combating
the Financing of Terrorism (AML/CFT) rules may be a further
contributor to de-risking, and to the extent that is true, we
think the best way forward is for jurisdictions to make
meaningful and publicly-visible improvements to their AML/CFT
regimes. That is something which will give foreign financial
institutions confidence that they are operating in an
environment in which they can mitigate the risks effectively,
and Treasury is happy to engage in dialogues and provide
support to jurisdictions that are seeking to make those
changes.
Chairwoman Waters. Thank you. In the interest of time, I
yield back.
The gentleman from North Carolina, Mr. McHenry, who is the
ranking member of the committee, is now recognized for 5
minutes.
Mr. McHenry. Secretary Yellen, thank you for being here. As
we know, Russia is still earning hundreds of millions of
dollars each day in hard currency through its oil and gas
exports. Even though the President banned Russian oil imports,
which I welcome, Treasury continues to provide sanctions
licensing for banks transacting and transactions related to
Russian energy. This includes financial services allowing other
countries to import Russian oil and gas. Why are these licenses
being provided?
Secretary Yellen. We are working very closely with our
partners to have a coordinated set of sanctions, and our goal
from the outset has been to impose maximum pain on Russia,
while, to the best of our ability, shielding the United States
and our partners from undue economic harm.
Mr. McHenry. I have publicly commended the Administration's
approach on sanctions. What I am particularly asking about are
the licenses permitting bank transactions related to Russian
energy.
Secretary Yellen. In following up on what I just indicated,
unfortunately, many of our European partners remain heavily
dependent on Russian natural gas, as well as oil, and they are
committed to making the transition away from that dependence as
quickly as possible. We are doing all we can to help. But in
the meantime, we issued this license, and they have taken steps
to make sure that there can be a continued flow of Russian
natural gas and oil.
Mr. McHenry. And if the Europeans take stronger action
against Russian energy, your Department would take stronger
action as well?
Secretary Yellen. We are working closely with them on
sanctions and want to remain aligned with them.
Mr. McHenry. I want to pivot to China, because I think the
government of China is watching us very closely. It is pretty
clear that when Russian troops amassed in the Eastern Ukraine
border last fall, the Administration lacked a cohesive strategy
to respond. Many of us have warned that a similar situation is
occurring between China and Taiwan. Now, for example, Chairman
Xi has vowed to, ``smash,'' any attempts at independence by
Taiwan. We have seen an unprecedented incursion by the Chinese
into Taiwanese airspace, including sending dozens of planes
into Taiwan's air defense identification zone. Has the
Administration issued a warning of sanctions or a threat of
sanctions to Beijing to deter military action by China against
Taiwan?
Secretary Yellen. Clearly, the Administration and the
Treasury Department are opposed to any unilateral change in the
status quo with respect to Taiwan, and we are working very
closely with our partners and the Administration to make sure
that we have tools at our disposal to respond to provocations
in that regard. I am not going to come in on hypotheticals in
what we would do in any particular scenario, but I will assure
you that we are closely coordinating with all of our
interagency partners to make sure that we will be able to
respond appropriately.
Mr. McHenry. Has the Administration contemplated a sanction
strategy in the event of a Chinese move against Taiwan?
Secretary Yellen. I am not going to comment on specifics.
We have put sanctions in place on China with respect to forced
labor and Xinjiang and provocations with Hong Kong, but
certainly, we are concerned about Taiwan and will act as
appropriate.
Mr. McHenry. And that would include sanctioning senior
leaders of the Chinese government, as has been done with Russia
and Russian oligarchs? Are you open to all tools available in
the event that China moves aggressively towards Taiwan?
Secretary Yellen. Absolutely. I believe we have shown that
we can. In the case of Russia, we have threatened significant
consequences. We have imposed significant consequences, and I
think that you should not doubt our ability and resolve to do
the same in other situations.
Mr. McHenry. Thank you.
Chairwoman Waters. Thank you very much. The gentlewoman
from New York, Ms. Velazquez, who is also the Chair of the
House Committee on Small Business, is now recognized for 5
minutes.
Ms. Velazquez. Thank you, Madam Chairwoman. Secretary
Yellen, many of us on this committee are concerned about the
potential use of cryptocurrencies and other digital assets to
evade international sanctions imposed on Russia for its illegal
invasion of Ukraine. The U.S. and other G7 nations recently
pledged to work together to ensure that the Russian state, its
elites, and oligarchs will not be able to utilize digital
assets to sidestep these sanctions. How is the Treasury
Department working to carry out this pledge?
Secretary Yellen. We are concerned about sanctions
avoidance, and we recognize that digital assets present
opportunities for doing exactly that. So, first, I would say
that we are monitoring for any attempts to use cryptocurrency
to evade our sanctions and we have ample enforcement authority
which we won't hesitate to use. We are carefully tracking,
using all of the tools at our disposal, the assets of oligarchs
and other sanctioned individuals. We are working very closely,
and exchanging information on this with our partners in the
Russian Elites, Proxies, and Oligarchs (REPO) Task Force. The
Department of Justice announced a new task force called
KleptoCapture, which is designed to use U.S. law enforcement
resources to identify and prosecute sanctions evasion, and
FinCEN issued an alert to financial institutions to help them
recognize suspicious transactions in this regard.
Ms. Velazquez. Thank you for that answer. Secretary Yellen,
I want to commend the Treasury Department on yesterday's
announcement sanctioning the virtual currency exchanges,
Garantex and Hydra, Russia's most prominent darknet market. On
the one hand, I think this announcement demonstrates the
concern I have about how the dark web and cryptocurrencies can
be utilized for illicit and criminal behavior, and that cyber
criminals operating in Russia often operate with the support of
Vladimir Putin and his regime, but, more importantly, it sends
a message to Putin and cybercriminals around the world that the
United States, in coordination with its allies, will continue
to disrupt this network and cut of all avenues for potential
sanctions evasion by Russia.
Secretary Yellen, one of the many tragedies of Russia's
illegal invasion of Ukraine is the refugee crisis it has
created. The United Nations estimates that 500,000 Ukrainians
have already fled, and early estimates suggest that refugee
totals could reach up to 4 million. Support for Ukrainian
refugees could cause hosting countries as much as $30 billion
over the next year, according to some estimates. How is the
Treasury Department working to assess and possibly alleviate
the economic and financial impact the refugee crisis is having
in other countries in the region?
Secretary Yellen. Thank you for that. We are very concerned
about the refugee crisis. We are monitoring this situation very
carefully and recognize the enormous burden that it is going to
place on host governments that are already struggling with
other stresses because of the pandemic and their proximity to
the conflict.
We are working with other agencies and also with
international partners to support the host governments and the
refugees themselves, and there will be a variety of channels,
bilateral support, multilateral support. We are working with
the international financial institutions and, as an example,
the European Bank for Reconstruction and Development recently
announced a 2 billion euro package to support Ukraine and other
afflicted countries, but this will be a high priority for us.
Ms. Velazquez. Thank you. I yield back.
Chairwoman Waters. Thank you very much. The gentlewoman
from Missouri, Mrs. Wagner is now recognized for 5 minutes.
Mrs. Wagner. Thank you, Madam Chairwoman, and Secretary
Yellen, thank you for joining us today. Last month, I
introduced the Isolate Russian Government Officials Act to
ensure that Russia becomes a pariah in certain international
organizations. I was very pleased to see the committee pass
this legislation unanimously in March. Could you please reply
with a simple yes or no, unless you feel the need to elaborate,
regarding Russia's involvement with the following groups that
are within Treasury's jurisdiction? Secretary Yellen, should
Russia be removed from the G20?
Secretary Yellen. President Biden has made it clear, and I
certainly agree with him, that it cannot be business as usual
for Russia in any of the financial institutions. He has asked
that Russia be removed from the G20, and I have made clear to
my colleagues in Indonesia that we will not be participating in
a number of meetings if the Russians are there--
Mrs. Wagner. And I am going to go down a few others,
because this is all codified now in my legislation that I hope
will make it to the House Floor. So, I am pleased to hear you
are echoing the position of the Administration and certainly of
this legislation vis-a-vis the G20. Should Russia be removed
from the Financial Action Task Force (FATF)?
Secretary Yellen. That is one that I haven't looked into. I
will get back to you on that one, but its role certainly should
be minimal.
Mrs. Wagner. Please do, as it is, again, part of this
legislation.
The media reported last month that Russia had, ``stepped
back,'' from participating in the Financial Stability Board
(FSB), but it is still listed as a member. Should Russia be
removed from the FSB?
Secretary Yellen. Certainly, its role should be minimal.
Mrs. Wagner. I would hope it would be removed from the FSB,
and this is what the legislation does. It passed unanimously
out of committee. I would hope that the Administration, and I
believe that it has indicated such--
Secretary Yellen. These are not unilateral decisions of the
United States, and each one of these organizations has its own
set of members--
Mrs. Wagner. We need to make a strong stance ourselves as
leaders in these organizations.
Secretary Yellen. We have made clear that we do not want
Russia to participate actively in these organizations.
Mrs. Wagner. So, that would be the FSB. Later this month,
the IMF and the World Bank will hold their spring meetings.
Will Russia be represented at those meetings, even virtually,
and will you urge participants to refuse to interact with
Russian officials?
Secretary Yellen. Russia is a member of the IMF. And in
spite of the fact that the great majority of IMF members, I
think, agree that Russia's actions are horrific, it doesn't
look like it would be possible, given the rules, to remove
Russia's--
Mrs. Wagner. I understand that, but what I am saying is the
U.S. must lead and be strong in our resolve on the sanctions
and in making them the pariah in these organizations. I hope
that you would urge participants to refuse interacting with
Russian officials vis-a-vis the IMF and the World Bank.
Secretary Yellen. We will denounce Russia's actions in all
four of those.
Mrs. Wagner. Thank you very, very much. Moving on to China,
as you know, China has faced major challenges in its real
estate sector, including debt problems at one of its largest
developers, Evergrande. China's opaque lending abroad creates
contingent liabilities of unknown size, and Chinese regulators
have warned about a rise in non-performing loans. Beijing has
also announced restrictions on private investment in news
media, which would only tighten the Chinese Communist Party's
control over information and make China's economy more opaque.
In your view, Madam Secretary, which parts of the Chinese
financial system poses the greatest risk to stability beyond
China's borders, and what is Treasury doing on the FSOC, the
FSB, and elsewhere, to mitigate this risk?
Secretary Yellen. I do think that there are significant
risks in the Chinese financial system, and the property sector
is an example of one where there is severe risks. And
importantly, a slowdown in the property sector beyond its
global implications would probably weigh on China's growth
outlook, which would have impacts on its economic partners.
This is something we are carefully monitoring.
Mrs. Wagner. If you have information on that, I would
appreciate it in writing. We can follow up.
I yield back.
Chairwoman Waters. Thank you. The gentleman from Georgia,
Mr. Scott, who is also the Chair of the House Agriculture
Committee, is now recognized for 5 minutes.
Mr. Scott. Thank you, Madam Chairwoman. Secretary Yellen,
you and the Treasury Department have refused to sanction
Russian oligarch, Alisher Usmanov, who is worth $20 billion and
who is also Vladimir Putin's favorite oligarch, and I want to
know why. Why would the U.S. Treasury Department issue a
special license exempting this oligarch and making it legal for
his entities to continue doing business as usual with our
American companies when Putin is murdering children, bombing
hospitals, raping children, raping women? Why?
Secretary Yellen. We have sanctioned a large number of
Russian--
Mr. Scott. No, but my question is this. There has to be a
reason. We need to get answers to this. The international world
is wondering why, and there has to be a reason, with the
terrible deeds, the crimes that this Administration is taking,
and here you have Putin's favorite oligarch worth $20 billion
being exempted and given the right to continue doing business.
Answer me, please. The world wants to know.
Secretary Yellen. I can't give you the details on a
specific individual, but I can tell you that every day we
continue to impose additional sanctions. This morning, we
announced, just 15 minutes ago, a further set of sanctions,
including on Putin's children. And sometimes beyond blocking an
individual, when an individual owns companies, has an interest
in companies, it is important--
Mr. Scott. Let me ask you this. My time is marching on.
Tell me about your Office of Foreign Assets Control. What role
did they play in this decision?
Secretary Yellen. They play an important role in preparing
sanctions, acting against individuals--
Mr. Scott. Secretary Yellen, this is serious here. This is
becoming a black mark on our nation. We need an answer as to
why. You may have a legitimate one. If it is the Office of
Foreign Assets Control, we need to know if it had some
desperate situation such that to do otherwise would impact our
own nation or our security. Why?
Secretary Yellen. We work very closely with the State
Department and the National Security Council in deciding on
sanctions packages--
Mr. Scott. Was there any internal disagreement within the
Treasury Department's Office of Foreign Assets Control about
how certain oligarchs would be protected from the deep economic
impact on these sanctions, why Putin's number-one oligarch gets
a sense of false image of what we are doing? And let me tell
you, our reputation as the world leader is at stake when these
types of things are happening and there is no explanation for
it. So, help us with that.
Secretary Yellen. I am not going to offer comments on a
specific individual that we haven't sanctioned.
Mr. Scott. Have you refused to sanction other key
oligarchs? Is there a pecking order?
Secretary Yellen. We have imposed a large number of
sanctions on Russian oligarchs and continue to impose further
ones. We are not finished.
Chairwoman Waters. The gentleman's time has expired.
Madam Secretary, I would ask that you make arrangements
with Mr. Scott. If it is classified, you may meet with him, or
whomever you designate, but he needs an answer. Thank you.
Mr. Scott. Thank you, Madam Chairwoman.
Chairwoman Waters. The gentleman from Oklahoma, Mr. Lucas,
is now recognized for 5 minutes.
Mr. Lucas. Thank you, Madam Chairwoman. Secretary Yellen, I
would like to discuss with you today a significant concern for
me. The U.S. economy is facing significant challenges coming
off the heels of a global pandemic of which we are still
studying the effects. The U.S. economy is also experiencing
supply chain backlogs and inflation at a 40-year high, and the
Russian invasion of Ukraine exacerbates economic uncertainty.
In Oklahoma, small businesses, farmers, and ranchers are
navigating surging gas prices and volatile agricultural markets
for inputs like grain and fertilizer. In these uncertain times,
investors seek to protect their retirement savings, to hedge
risk, and of course, to safeguard their businesses.
As I am sure you can appreciate, providing liquid markets
to protect the U.S. economy in the face of substantial
headwinds should be a priority. Unfortunately, I am concerned
that the volume and significance of rulemaking proposals coming
out of the Securities and Exchange Commission in such a short
amount of time runs counter to this goal. Since November, the
SEC has proposed over 20 new major, far-reaching rule changes.
These rules impact every asset class under the SEC's
jurisdiction. The sheer amount and complexity of these
rulemakings, compounded with the short and simultaneous comment
periods, and I note that short and in, many cases, simultaneous
comment periods, could negatively impact markets and the public
that depends on them. It is important for Congress to be able
to fully understand the impact and potential unintended
consequences of the SEC's sweeping new proposals.
Here is my question, Madam Secretary. Can you speak to the
importance of market liquidity during times of massive economic
uncertainty?
Secretary Yellen. Certainly. Having liquid markets is
extremely important to businesses and consumers to be able to
engage in financial and hedging transactions that they count on
to deal with risk. So, I certainly agree with the idea that it
should be and is an important priority.
Mr. Lucas. And I realize you are not on the SEC, but the
current approach, I worry, could rattle markets by rolling out
extensive proposals during a time when strong capital markets
are just essential to our constituents' economic growth and
national security.
Second question, news reports suggest the Administration is
preparing to impose a new round of sanctions on Russia
following recent atrocities, including two of Russia's largest
financial institutions. The European Union is also said to be
preparing new sanctions. In your discussions with your
international counterparts, could you speak to the urgency with
which the EU plans to intensify Russian sanctions, particularly
focusing on a ban on Russian coal, oil, and natural gas
exports?
Secretary Yellen. I think our partners are as outraged by
the atrocities that are being committed in Russia as we are,
and we are working very actively with them to impose new
sanctions that will cause Russia significant pain. This
morning, we announced our own sanctions package that will now
fully block Russia's largest bank, Sberbank, from participating
in the U.S. financial system, as well as their largest private
bank, Alfa-Bank.
The President will sign a new Executive Order, prohibiting
new investment in Russia by all U.S. persons, and additional
sanctions have been placed on elites in some state-owned
enterprises. And Europe is also working at a rapid pace to
announce additional sanctions. I am not going to try to tell
you exactly what they are, but they certainly intend to add to
the sanctions they have in place.
Mr. Lucas. Absolutely, Madam Secretary, but you don't see a
reluctance on their part to target Russian energy exports, do
you, or a change in that reluctance?
Secretary Yellen. They recognize clearly the importance of
depriving Russia of export revenue to the maximum extent that
they possibly can, but regrettably have a dependence on oil and
natural gas. So, there are tradeoffs there that they are trying
to manage as best they can.
Mr. Lucas. With that, Madam Chairwoman, I yield back the
balance of my time.
Chairwoman Waters. Thank you. The gentleman from Texas, Mr.
Green, who is also the Chair of our Subcommittee on Oversight
and Investigations, is now recognized for 5 minutes.
Mr. Green. Thank you, Madam Chairwoman. And, Madam
Secretary, thank you very much for all of the many things that
you are trying to accomplish and the good things that you have
done. I also want to acknowledge the leadership of the
President, Madam Secretary. He has, in my opinion, brought the
world together for the most part to take on the invasion of
Ukraine, and I think that is a significant accomplishment. I
still have faith in the President, and I compliment him for his
ability to not only pull people together, but to try to
maintain this coalition, so that if this becomes a long-term
endeavor, we will still have allies with us. I think that is
important.
Madam Secretary, I have a copy of your statement for the
record, which indicates, ``As long as the pandemic is raging
anywhere in the world, the American people will still be
vulnerable to new variants.'' I believe this to be a truthful
statement and correct. As you know, Hong Kong is having some
concerns with the virus that are causing great lockdowns, with
millions of people involved. And as you also know, the Senate
had a deal for $10 billion. That $10 billion deal appears to be
stalled.
I see where you have encouraged the World Bank to continue
working closely with COVAX and the international partners to
improve vaccine readiness and to support increased vaccine
delivery to developing countries. Have you weighed in with the
Senate, Madam Secretary? This is pretty important for us to get
this deal done. Would you kindly give a response?
Secretary Yellen. My colleagues in the White House have
definitely weighed in regarding the provision of additional
funding to deal with a pandemic to be a critical priority and
are very concerned that we lack the funds that we need to
address COVID, and they are very focused on this and have
weighed in fully on the importance of this legislation.
Mr. Green. Just a follow-up. I do appreciate weighing in.
This is not only about the United States. It is about the
world. As you know, the deal is void of a monument for the rest
of the world, just the United States, and now that is being
held up.
Secretary Yellen. Yes.
Mr. Green. I think as we weigh in, and I am sure you are
doing this, expand it to make sure we include the rest of the
world. I appreciate the $10 billion deal, but your statement
rings true. As long as the pandemic is raging anywhere in the
world, the American people will still be vulnerable to new
variants. That is important. Can you give me the criticality
associated with not only having a deal for the United States
but also the rest of the world?
Secretary Yellen. We absolutely need additional funding to
help the rest of the world deal with the pandemic as well. We
are continuing to do everything that we can through the WHO,
the World Bank, the task force that they have put together, and
I think that is right.
I would repeat the words that you quoted me as saying, that
as long as the pandemic is raging in any part of the world, the
United States is not safe. There will be new variants, and I
think it is critically important. I would also like to add that
we have requested funding or the ability to lend funds to the
new Resilience and Sustainability Trust that the IMF is
establishing. One of the purposes of that trust is to provide
the resources for countries around the world, middle- and
lower-income countries, to be prepared for the next pandemic. I
wish we could feel that this will be our last, but we should
have learned our lessons that the globe needs to be prepared.
And I would ask again that Congress provide the authorization
that we need to lend resources to the IMF to help them prepare
the world for future pandemics.
Mr. Green. Thank you, Madam Chairwoman. I yield back.
Chairwoman Waters. Thank you. The gentleman from Florida,
Mr. Posey, is now recognized for 5 minutes.
Mr. Posey. Thank you, Chairwoman Waters. Secretary Yellen,
do you believe cutting the deficit spending and borrowing from
the Federal Reserve could make a significant contribution to
reducing inflationary pressures?
Secretary Yellen. I apologize. I didn't catch your
question. Could you say it again?
Mr. Posey. Certainly. Do you believe cutting the deficit
spending and borrowing from the Federal Reserve could make a
significant contribution of inflationary pressures?
Secretary Yellen. What about the Federal Reserve? Something
about the Federal Reserve, could you repeat that?
Mr. Posey. Yes. Do you believe cutting deficit spending--
got it?
Secretary Yellen. Cutting deficit spending?
Chairwoman Waters. Mr. Posey, you need to speak into the
microphone and speak up a little bit louder.
Mr. Posey. Yes, I think I have it at 100 percent here. Let
me try it again. Okay.
Do you believe that cutting deficit spending and borrowing
from the Federal Reserve could make a significant contribution
to the reduction of inflationary pressures?
Secretary Yellen. The Federal Reserve is charged with
controlling inflation and is taking steps to address the
inflationary situation here. And the Administration has just
proposed a budget that has, over the next decade, a trillion
dollars' worth of deficit reduction. So, I agree on the
importance of controlling inflation, and the Federal Reserve,
of course, is independent in making its judgments on what is
appropriate but will take action to help bring inflation down.
Mr. Posey. So, you do believe that cutting deficit spending
and borrowing from the Federal Reserve could make a
contribution to reducing inflationary pressures?
Secretary Yellen. I think the Federal Reserve has a role to
play in reducing inflationary pressures, yes.
Mr. Posey. And you think that cutting deficit spending can
help?
Secretary Yellen. We have proposed to do so in the fiscal
2023 budget that the Administration has just released.
Mr. Posey. So, I take it as a yes then? The simple answer
would be a yes?
Secretary Yellen. Yes. And we do have a substantial
reduction in deficits. The deficit is coming way down this
year.
Mr. Posey. Taxing unrealized capital gains would increase
the present value of taxes or long-term gains, obviously. How
will taxing unrealized capital gains impact the size of
investment and the allocation of capital among alternative
investments?
Secretary Yellen. Generally, tax policy and interest rates
all affect the cost of capital, and that is one factor that
influences investment. But although, in principle, the cost of
capital should be an important determinant of investment
spending, most experience in empirical research suggests that
the linkages are not terribly strong. Usually, expected output
is more important--
Mr. Posey. The Ukraine war is teaching us again that energy
is a strategic as well as an economic good. In light of that,
should we recalibrate the rush to transform the energy economy
and increase the contribution of fossil fuels in the short- to
medium-term, say the next 10 to 15 years?
Secretary Yellen. I'm sorry. You asked about fossil fuels
and what should we do about fossil fuels?
Mr. Posey. Yes. Do you think we should think about
recalibrating the rush to transform the economy by eliminating
them?
Secretary Yellen. Over time, to deal with climate change,
we need to reduce our dependence on fossil fuels, and I think
our energy security also will be greatly enhanced as we
transition to renewables. I think really the only way--
Mr. Posey. Do you think we should maybe delay the rush a
little bit in the current times that we are in, with the energy
being such an important force in the Ukraine right now?
Secretary Yellen. The President has proposed using reserves
from the strategic petroleum reserve and incenting producers to
raise, American producers to raise oil production to deal with
the short-run crisis that we face.
Chairwoman Waters. Thank you. The gentleman's time has
expired.
The gentleman from Missouri, Mr. Cleaver, who is also the
Chair of our Subcommittee on Housing, Community Development,
and Insurance, is now recognized for 5 minutes.
Mr. Cleaver. Thank you, Madam Chairwoman. And thank you,
Ranking Member McHenry, for this hearing, and, Madam Secretary,
thank you very kindly for your always candid comments.
This reckless and ruthless Russian invasion of Ukraine has
laid bare a number of things. One of them is, at least for me
and I think millions of other Americans, that we need to
desperately move toward creating our own sources of energy, at
least as many of them as we can--solar, fossil or biofuels,
whatever, say elastic--whatever we can do. And even though I
represent Kansas City, Missouri--I represent one-half of it--I
represent little towns that people haven't heard of like Malta
Bend and Orrick. And one of the things that they are talking
about is the increase in the cost of fertilizer. Most Americans
would not even remotely consider that, but they are talking
about the rise in the cost of fertilizer. And the fertilizer,
at least 20 percent of it, I think, or maybe somewhere in that
number, comes out of Belarus and Russia.
They are having an impact on us right now, and I am
wondering--I know that there are things that Treasury is doing
with the IMF, and the World Bank, and international financial
institutions (IFIs). Are there more things that Treasury can do
to push us toward a more sustainable nation in terms of energy
at least? I am concerned that our politics here in Washington
may prevent us from really looking at the fact that there is a
global existential threat brought about by climate change. I
guess we will have to deal with it on the political stage, but
are there other things that Treasury is doing or would like to
do as it relates to this issue?
Secretary Yellen. I share your concern about climate change
as an existential threat. I think it is one that demands really
immediate attention. President Biden has proposed a number of
policies that Congress hasn't yet passed which would increase
our reliance on renewables, on wind, on solar, on renewables,
and help shift us away from fossil fuels. And I think the
current situation in global energy markets and the risks that
we are experiencing in the global economy is due to what is
happening in Russia and Ukraine, which should strengthen our
resolve to address energy security to rid ourselves of
dependence on a global oil market where dictators in many
places really control the price and availability of our energy
supplies. And I think moving away from fossil fuels and toward
renewables is critical for our energy security, as well as for
addressing climate change.
Both things should be pushing us heavily in that direction.
And I hope that Congress will soon act to put in place tax
incentives for renewables, for electric vehicles, and for other
aspects of the climate agenda.
Mr. Cleaver. Thank you very kindly for your visit. Madam
Chairwoman, I yield back.
Chairwoman Waters. Thank you. The gentleman from Missouri,
Mr. Luetkemeyer, is now recognized for 5 minutes.
Mr. Luetkemeyer. Thank you, Madam Chairwoman. Secretary
Yellen, it's nice to see you this morning, and I appreciate
your being here. As you know, I am the ranking member on the
House Small Business Committee, and it is disappointing that we
are now at 345 days since you failed to do your statutory duty
by showing up there. Just a quick question: Do you intend to
show up at all at the Small Business Committee to do your job
of reporting on the PPP program?
Secretary Yellen. [Inaudible.]
Mr. Luetkemeyer. Microphone, please. Microphone.
Secretary Yellen. Sorry. I testified--
Mr. Luetkemeyer. Madam Secretary, I respect your comment,
but let us be honest here. You are required to appear before
the House Small Business Committee, and you are not there. You
are here this morning, thankfully. That is fine. You go to
other committee hearings, but you never show up at that one. I
was surprised that the Chair of the Small Business Committee,
Ms. Velazquez, didn't ask you this question, because it is very
plain in the law. It says you must show up, and you haven't
done it. My question is, do you intend to show up?
Secretary Yellen. I will have my staff work with yours to
discuss it.
Mr. Luetkemeyer. That would be fantastic. Thank you. I
think it is a repeat of the last question or time we have
talked about this, but at least it is a commitment to do
something.
With regards to the subject we have in front of us this
morning, I want to ask you the same question that I asked
Chairman Powell the other day, which was, I am thankful and
agree with a lot of the sanctions that you are putting on the
Russian economy, and oligarchs, and all of the other things you
are doing. I don't disagree with those things. I think we voted
that you added more. My concern was or is that it got done
late. Instead of being reactive, we should have been proactive.
We knew that the Russians were building three hospitals on the
Ukrainian border. We knew they were going in, and yet we did
nothing until after the fact.
My question to you this morning is, knowing that this was
going to happen, we did nothing. The ranking member made a
comment this morning about China, knowing that they are going
to go in. In fact, there is a published report in the
newspapers last week which said that China was going to go into
Taiwan this fall and decided not to do it. I don't know if that
report is true or not, but it was in the paper. Therefore, I
think we need to take it seriously. And if that is the case,
are you working with the Administration? Are you putting plans
in place as the Treasury Secretary to come with some deterrence
with sanctions right now before they get in there and not wait
till after they invade Taiwan?
Secretary Yellen. We told Russia that we would impose very
heavy costs on it if it invaded Ukraine, and the purpose was to
deter that action. You wouldn't deter the action by putting in
place sanctions before--
Mr. Luetkemeyer. Yes, you can. Madam Secretary, with all
due respect, you can do that. When they built the hospitals on
the border, you said that is an insurgence action on your part.
Therefore, we are going to do this. If you build another one,
we are going to do this. If you build another one, we are going
to do that. If you invade, we are going to do this. That can't
be done. There is a way to deter that if it is structured
correctly. And my question is, are you thinking about doing
this with China, yes or no?
Secretary Yellen. We are certainly working together in the
Administration to have in place a wide range of tools and
strategies.
Mr. Luetkemeyer. Okay. With regards to other actions that
are going on right now, Madam Secretary, I am very concerned
about a speech that was made recently by one of the members of
FSOC. Do you think the financial stability of United States
would be threatened if roughly a quarter of the deposits of
United States were not insured by the FDIC? Do you think it
will hurt the financial stability of our country if 25 percent
of the bank deposits in this country were not insured by the
FDIC?
Secretary Yellen. I am not sure what you are referring to,
but I would certainly say that deposit insurance has played a
critical role in making runs everywhere.
Mr. Luetkemeyer. I am sure you would agree that this is
extremely important. The FDIC insurance underpins the stability
of our banking economy.
Because what happened was Mr. Chopra--and I have his speech
right here--made a speech last week in which he made a comment
that he thought it was okay to limit access. One of the
punitive actions he took as a suggestion, as a result of
continued violations by bankers and big banks especially, was
to limit access to deposit insurance and put banks directly
into receivership. Don't take my remarks wrong here. I think if
these guys are doing bad things, they need to be punished,
maybe fined, thrown in jail, I don't care. But what you are
doing when you undermine the financial system by saying pulling
FDIC insurance, you are hurting the consumers, the customers of
those banks. And this is a gentleman who has intended or should
be worried about consumers. I would hope that you would be
concerned about that.
Chairwoman Waters. The gentleman's time has expired.
The gentlewoman from Ohio, Mrs. Beatty, who is also the
Chair of our Subcommittee on Diversity and Inclusion, is now
recognized for 5 minutes.
Mrs. Beatty. Thank you, Chairwoman Waters. I would like to
also thank Secretary Yellen for appearing before the committee
today. Actually, I appreciate your leadership as Treasury
implements the sanctions against Putin's regime, particularly
as more details of war crimes and atrocities committed in
Ukraine come to light.
First, let me say I welcome your testimony that the
international financial institutions will be providing support
to the countries that are welcoming refugees. And this is
something that I have been concerned about since the very
beginning of the humanitarian crises. As you may know, last
month when this committee marked up legislation related to the
Ukraine crises in Russian sanctions, I was pleased to have a
bipartisan provision added that will address the United States,
well, really you in your capacity as Secretary, to use our
position on the IFIs to encourage economic support for
refugees, including those of African descent who have been
faced with particular hardship.
Can you tell me how the financing made available by the
IFIs will be used to aid refugees, and how can we ensure that
these funds are being distributed equitably?
Secretary Yellen. I think that the international financial
institutions have a critically important role in helping
refugees and helping countries that are hosting refugees. And
we will have meetings of the international financial
institutions, the IMF, and the World Bank the week after next,
and we will be involved in active discussions with them about
how to fashion programs to make sure that aid is distributed
effectively. Bilaterally, we will also be involved in that and
the European Union will as well.
Mrs. Beatty. Thank you. I am going to try to get in two
more questions, but while I have you, let me quickly follow up
on something that you and I have talked about. And let me just
say up front, your staff has worked extremely well with my team
in putting Harriet Tubman in her rightful place on the $20
note.
But I guess I have a concern, and while I am thankful for
your engagement, I am not pleased with the timeline that is
left out. I realize you inherited a lot. I know we had been
working with your predecessor during the Obama Administration,
and we thought we had made great headway. And I understand the
technical limitations for the security features, the production
capacity, and all of that, but I really don't see any reason
why the concept and design steps couldn't be moved much faster.
Getting the design for each stage would mean a lot to the
people who have been working on this and waiting on this for
far too long, for too many years.
I know this is a problem that you inherited with the delays
made by your predecessor, and I would ask for a commitment from
you to move this process along. And I guess what I want to hear
today is if we could take maybe the part that shows her
imaging. We have a piece of legislation, bipartisan with
overwhelming [inaudible] to get to the $200 sign on this that
we can [inaudible] that stage of the image, if you could take a
few seconds and respond.
Secretary Yellen. What I can say is I promise for my own
part to do everything I possibly can to expedite this process,
and I know that there was no action on it during the previous
Administration. We are still adhering to the original timeline
that was announced. I am trying to remember when it was first
announced. Maybe it was 2014 if I am not mistaken.
Mrs. Beatty. You are correct.
Secretary Yellen. It is a frustratingly time-consuming
process, and it involves developing technologically-
sophisticated security features, new security features, the
generation--
Mrs. Beatty. I hate to cut you off, but my time is going to
expire. I do want to show that we have an image, and we are
going to do the legislation to lock in this image [inaudible]
support us in that. Thank you, and my time is up.
Chairwoman Waters. Thank you. The gentlelady's time has
expired.
The gentleman from Michigan, Mr. Huizenga, is now
recognized for 5 minutes.
Mr. Huizenga. Thank you, Madam Chairwoman, and Secretary
Yellen, it's good to have you back here in person and to see
you again.
Very, very briefly--don't filibuster me on this one,
please--but the last time you appeared here with Chair Powell,
you had claimed that you felt inflation was, at that point,
transitory. Do you still believe that today? Very briefly,
please.
Secretary Yellen. When I used the word, ``transitory,'' I
was thinking that it is related to the pandemic, and that when
the pandemic goes away, that would make a big difference. I
still believe that.
Mr. Huizenga. Do you still believe it is transitory?
Secretary Yellen. I believe that the pandemic,
unfortunately, has been and will be longer lasting than I
anticipated.
Mr. Huizenga. So basically, you are saying the pandemic is
still happening. That is why we are still seeing inflation?
Secretary Yellen. I think that is one of the contributors
to it.
Mr. Huizenga. Okay. Let me get into the meat of what we
need to talk about here about what is happening on
international situations. Madam Chairwoman, thank you for
including my legislation in the 16 bills that were actually
noticed for this hearing today. I had a bill, the Russian
Sovereign Debt Prohibition Act, which was noticed, and this
bill would simply prohibit U.S. financial institutions from
financing Russian sovereign debt regardless of the day the bond
was issued, extending the Biden Administration's current
restrictions on new bonds that are being issued. And I know
that it was supposed to be considered in the March markup, but
something happened, and somehow it fell off. I think we are
trying to do everything we can to tighten those restrictions,
and I respectfully ask that the chairwoman include that
legislation in the next package of bills that we might
consider.
Yesterday, I reintroduced another bill that I had
previously called, the No U.S. Financing for Iran Act, a bill
that would effectively prevent U.S. financial institutions from
engaging with the government of Iran, while prohibiting both
the IMF and the Export-Import Bank from providing them
financing. Specifically, my bill would prohibit the exchange of
Special Drawing Rights, and it is similar to what my colleague,
Mr. Hill, has worked on regarding Russia.
Secretary Yellen, can you certify that the Biden
Administration will oppose the exchange of Iran's SDRs, the
Special Drawing Rights with any country even if the
Administration concludes a new nuclear agreement with Tehran?
Secretary Yellen. Iran has not been able to use its Special
Drawing Rights. The United States would not exchange SDRs for
dollars, nor have our partners. And I don't see that change--
Mr. Huizenga. Okay. So, you commit to continuing that?
Secretary Yellen. We will have to see what happens if they
sign a bill, but I have no--
Mr. Huizenga. That is a different answer than, ``We have no
intention to.''
Secretary Yellen. There is no change in U.S. policy. We
have not been willing to, in any way, aid Iran in using its
SDRs, and I don't envision that changing.
Mr. Huizenga. Okay. The Washington Post had an article over
the weekend saying that Tehran has demanded that we lift the
Islamic Revolutionary Guard Corps designation as a foreign
terrorist organization. That same article quoted a high-ranking
Iranian official who said that effectively, an agreement to
revive the nuclear deal with the U.S. is closed. Do you think
that is a fair assessment, first of all? And as you know,
President Trump had put in that original designation back in
2019. It is still heavily-sanctioned, and there has been some
enforcement actions, but designations have been lifted. Does
the Biden Administration continue to believe that the
Revolutionary Guard is a foreign terrorist organization?
Secretary Yellen. They are designated as such. There are
active negotiations taking place over the Joint Comprehensive
Plan of Action (JCPOA), but I can't comment on the details of
what is happening in those.
Mr. Huizenga. Can't or won't?
Secretary Yellen. I don't believe I can or should.
Mr. Huizenga. Okay. So you may have that knowledge, but you
are not able to share it?
Secretary Yellen. I am not deeply involved in the details
of those negotiations.
Mr. Huizenga. Okay. Have you or anyone else at Treasury
been directed to reduce Iranian sanctions enforcement so as to
not interfere with those Vienna talks?
Secretary Yellen. We haven't changed our sanctions.
Mr. Huizenga. That is not my question. Have you been
instructed to or requested to? You may have ignored it. I guess
that is what I am trying to find out.
Secretary Yellen. There has been no change in any
Administration policy, to the best of my knowledge.
Mr. Huizenga. And I will follow up with some written
questions as well. I appreciate it. I yield back.
Chairwoman Waters. The gentleman from California, Mr.
Vargas, is now recognized for 5 minutes.
Mr. Vargas. Thank you very much, Madam Chairwoman, for this
hearing, and I especially want to thank the Secretary for being
here. I appreciate it.
Madam Secretary, I want to apologize that I wasn't here for
the whole hearing. I have another hearing that is running at
the same time, which happens around here quite a bit, as you
know. But it sounded like someone was trying to put words in
your mouth about the issue of inflation being transitory or
related to the pandemic. Could you say a little bit more about
that, because I think a lot of people are starting to forget
that we are in a pandemic and so much of this inflation is tied
to that? Could you comment on that, please?
Secretary Yellen. Yes, certainly. In part, the inflation
represents the impact of supply bottlenecks. For example, a
third of the inflation we have had reflects higher prices of
new and used cars. And, unfortunately, the auto companies were
unable to get sufficient semiconductors to produce cars at
capacity. Inventories are highly depleted, cars, both new and
used, are in tremendous demand, and their prices have risen.
But also, we have had enormous demand for goods, for imports
particularly coming from East Asia that have resulted in higher
shipping costs, higher trucking costs. These disturbances,
these inflationary developments are pandemic-related because we
saw enormous shifts away from services and towards goods during
the pandemic, a huge increase in the demand for durable goods
that strained the capacity of the U.S. and global economies to
meet those demands in a timely fashion. And that is what I mean
in part by being pandemic-related.
We do have a very tight labor market. Core inflation is
also quite high. Addressing the pandemic, I believe, will help.
The Federal Reserve also has a job to do with respect to
inflation.
Mr. Vargas. Madam Secretary, I am a car guy. I collect
cars, and I pay attention to the prices of cars. I normally
collect old ones, not new ones. But the truth of the matter is,
you normally don't pay MSRP for a new car. You normally pay
below that. That is what you negotiate. But a lot of these cars
have been selling above MSRP, and, again, it is because of the
same issue. It is the pandemic. I think that is what you were
saying in layman's terms--you weren't saying in layman's terms,
but I say, in layman's terms. That is why cars are so
expensive.
Secretary Yellen. Sure. Inventories of cars are depleted
because the American car companies aren't able to produce at
their capacity. They just can't get the semiconductors that
they need to embody into these cars. And that is because the
demand for goods and for technology devices that incorporate
semiconductors became so enormous during the pandemic. It takes
a long time to increase semiconductor manufacturing capacity.
American companies are in the process of doing it. But at the
moment, I think if you go to a car lot and try to go to a
dealership, you see almost no inventory available to purchase,
and that is why you pay more than MSRP.
Mr. Vargas. That is right, and now I do want to put some
words in your mouth. I believe they are your words. And I think
you were saying the war in Ukraine threatens to inflict, and I
think this is what you said, ``enormous economic
repercussions.'' Again, you may have commented already, but I
have 30 seconds left. Could you comment on that?
Secretary Yellen. Sure. The sanctions that we have placed
on Russia are pushing up the price of energy. We think it is a
price that is important to pay to punish Russia for what it is
doing in Ukraine, but energy prices are going up. The price of
wheat and corn that Russia and Ukraine produce are going up.
And metals that play an important industrial role--nickel,
titanium, palladium that goes into catalytic converters--the
costs of those things are going up, fertilizer, potash, and
this is going to escalate inflationary pressures as well.
Mr. Vargas. Thank you. I yield back.
Chairwoman Waters. Thank you. The gentleman from Kentucky,
Mr. Barr, is now recognized for 5 minutes.
Mr. Barr. Thank you, Secretary Yellen, for your testimony.
Let me follow up with Ranking Member McHenry's line of
questioning about the energy loophole in the sanctions on
Russian banks. I have talked to Deputy Secretary Adeyemo about
this, and he is a very impressive guy, and he is open-minded to
my line of inquiry. I hope you are as well. I have a bill
called the No Energy Revenues for Russian Hostilities Act that
would close that loophole or give the Administration the option
to create an escrow arrangement which requires all Russian
energy revenues to be allocated for humanitarian purposes,
which is similar to arrangements currently in place with Iran.
To the extent that you have concerns or the Administration
has diplomatic concerns or sensitivities with respect to our
European allies over dependence on Russian gas, this
legislation or this approach would enable you to retain the
ability to waive or license specific transactions to help our
European allies get those supplies of gas, but then escrow the
proceeds of those transactions and have a carrot approach, not
just a stick, but a carrot approach, build up those revenues
and say to Putin, withdraw, you get your gas revenues, but only
if you withdraw from Ukraine and only if you use these proceeds
for humanitarian purposes. Would you be open to that approach?
Secretary Yellen. I think something along those lines is a
constructive suggestion, and I think it is an approach that is
worth exploring. We have made it. We have a way for Russia to
sell oil and gain the proceeds in the form of a general
license, but the license is temporary. It will expire. We
probably need a better mechanism. I think it is a constructive
suggestion.
Mr. Barr. Thank you, and your Deputy, Mr. Adeyemo, was open
to that as well. I appreciate that you are looking at that.
Again, it is a bill that I have, the No Energy Revenues for
Russian Hostilities Act. I think this is the loophole that we
need to close. This is what President Zelensky is asking for
when he says we need to be tougher on sanctions. This is what
is financing Putin's war is the foreign currency that is being
used through these energy transactions. This is what we need to
cut off to the extent we can.
Secretary Yellen. I would just emphasize that we need the
flexibility to work with our partners on this.
Mr. Barr. I understand.
Secretary Yellen. This coalition has been critical to our
success.
Mr. Barr. I agree, Madam Secretary.
Secretary Yellen. We have to be careful not to be
unilateral in our approach.
Mr. Barr. I agree with that, but this bill and this
approach would give us that flexibility. It would enable you to
provide some of those transactions, allow some of the
transactions to go through for our European allies, but build
those proceeds up in an escrow account and give an incentive
for Putin to withdraw.
Let me ask you another question, switching gears here. As
someone who served as both Chair of the Federal Reserve, and
now in your capacity as Treasury Secretary and the Chair of
FSOC, you have a unique view into the regulatory landscape for
the financial services industry. One of the things that I have
always wanted to learn more about is how our regulators
developed frameworks with international standard-setting
bodies; decisions made at Basel and the FSB are highly
impactful to the U.S. economy. And I don't feel like Congress
really has any insight or visibility into what the United
States advocates for in these negotiations.
What types of materials and briefings were you given as Fed
Chair, and now as FSOC Chair, with respect to what we commit to
in these groups? What types of materials can we get for this
committee to ensure that the advocacy is in line with the
policy goals of the Congress?
Secretary Yellen. We can try to provide you with materials
and briefings. The Financial Stability Board (FSB) and the Bank
for International Settlements (BIS) publish their work papers
on their websites. There is no regulatory enforcement through
those agencies there. These are fora in which we discuss with
partners around the world what would be desirable regulations,
but it doesn't in any way inhibit what we can do or compel us
to do anything in the United States. We do what is in our
interest, but it is a way to try to have a global system that
is coordinated and coherent.
Mr. Barr. Thank you, Madam Secretary. I yield back.
Chairwoman Waters. Thank you. The gentleman from Illinois,
Mr. Foster, who is also the Chair of our Task Force on
Artificial Intelligence, is now recognized for 5 minutes.
Mr. Foster. Thank you, Madam Chairwoman, and Secretary
Yellen.
Secretary Yellen, I understand that you will be giving a
speech tomorrow regarding digital asset regulation. I don't
want to force you to reveal any spoilers here. I do want to
touch on something that I believe is just at the core of
developing any well-regulated digital asset ecosystem. And that
is, how can participants securely and reliably assert their
digital identity online and offline with the appropriate
controlled anonymity that is being developed in the E.U. and
elsewhere? I was very encouraged that Assistant Secretary for
Terrorist Financing and Financial Crimes Elizabeth Rosenberg
recently announced that the Treasury plans to make 2022, ``a
year of action for digital identity.'' There are really a host
of reasons why Treasury may be the most appropriate authority
to help deploy a secure digital identity framework.
I am also very encouraged that the technical components for
privacy preserving, call it a crypto financial driver's
license, are actually in place. The mobile ID or digital
driver's license that are being rolled out by a number of
States are based on interoperable standards originally
developed at the National Institute of Standards and Technology
(NIST), and are now being adopted by international standards
organizations around the world, and they have actually been
implemented for both iPhone and Android. These allow a modern
cellphone to be used as a very high-quality privacy-preserving
biometric second factor that will be absolutely crucial in
combating identity fraud and many other online misbehaviors.
Your Department's work towards combating illicit finance and
preventing government benefits fraud, soon a central bank
digital currency, would all greatly benefit from an improved
and internationally-operable digital identity framework.
Can you speak a little bit about how Treasury might be
well-equipped for such an effort that will really require an
extraordinary level of international and interagency
cooperation?
Secretary Yellen. I believe this is a very important
initiative. I am not an expert on the details, but I would say
to you that the Treasury has very wide-ranging equities in the
digital identity space, in part because we administer public
benefits and tax refunds, and because we have a broader role in
the financial system. So, we absolutely want to explore how we
can develop and implement digital identities solutions that
will coordinate across the government.
And we are at this point flushing out actions that we can
take to advance this agenda. If you have specific ideas, we
would welcome the opportunity to discuss them with you when I
can have my staff give a briefing on what we are thinking of
that as well, if that would be useful. But I would like to--
Mr. Foster. Yes, thank you for that.
Secretary Yellen. --have the benefit of your thinking on
this.
Mr. Foster. Yes, and I think that the international
collaboration will be essential from the start. If you are
really going to have a central bank digital currency, you need
a means of authenticating yourself as a legitimate participant
for a central bank digital currency, and you want foreign
nationals to participate in your central bank digital currency,
you are going to have to have agreements, at least among the
free democracies of the world, as to how this is really going
to work. And so I urge you, it seemed very much in line with
the Biden Administration's push towards getting the free
democracies of the world to act coherently to do things like
preventing corruption, financial fraud, and it is going to be
really at the heart of this.
And can you say a little bit about the Executive Order
related to crypto that has come out and how you see Treasury's
participation going in that?
Secretary Yellen. The Executive Order related to digital
assets?
Mr. Foster. Right.
Secretary Yellen. Yes. The President has asked the
agencies, but Treasury plays an important role in assessing the
future of money and that entails the role of digital assets,
how we can create an environment in which responsible
innovation can flourish, but there is adequate protection of
consumers, investors, financial stability concerns, risks of
illicit finance. We need a regulatory framework that I think we
don't have at this point, and we want to make recommendations
as to how we can safely do this. Also, look at the pros and
cons of the central bank digital currency.
Chairwoman Waters. Thank you. The gentleman's time has
expired.
The gentleman from Texas, Mr. Williams, is now recognized
for 5 minutes.
Mr. Williams of Texas. Thank you, Madam Chairwoman. And in
full disclosure, Madam Secretary, I am a car dealer. There is a
lot of conversation going on about my industry. I would love to
talk to you one day about it after COVID, what life is after
COVID in the car industry.
I also want to follow-up on Mr. Luetkemeyer's question on
the Small Business Committee, of which I am also a member. You
seemed to not answer the question again, and you said you
needed to talk to your staff first. I don't understand why you
need to talk to your staff to attend a meeting you are required
to attend. So, can you say you will come and see us?
Secretary Yellen. Certainly--
Mr. Williams of Texas. Okay.
Secretary Yellen. I am certainly prepared to discuss it.
Mr. Williams of Texas. Thank you. You spent the last few
months touting the new international tax regime that you have
been negotiating with other large economies. And recently,
numerous American businesses have raised concerns about some of
the details that have started to come to light, and independent
experts that have examined the deal found that the U.S.
companies are disproportionately negatively impacted.
Foreign companies, our competitors in other words, have
negotiated protections for key industries. Luckily for our
business community, whatever international agreements you make,
all of them may need congressional approval. And you will
either need to get the deal classified as a treaty, which would
require the approval of 67 Senators or a revenue-generating
proposal, which would need to pass both Chambers of Congress.
So regardless of how the agreement is ultimately classified,
you will not be able to follow through on any of your promises
without significant buy-in from Congress.
And I guarantee you that the support you need to make these
drastic changes to international tax law do not exist. They are
not here in the House or the Senate, because right now we are
hearing from U.S. companies that this deal makes them less
competitive. So, Madam Secretary, how will you prove your
congressional engagement as these negotiations progress?
Secretary Yellen. We have been engaged over the last
several years in briefings on both sides of the aisle, members
of the committees about the tax agreement and have kept people
up to date, Members of Congress up to date on the negotiations
that have taken place in the OECD bill. So-called pillar two is
really ready for enactment, and a package that would have met
our commitments was in the House, passed a reconciliation bill
that hasn't progressed in the Senate. But we think that the
idea that this does harm the competitiveness of American
businesses, I really have to push back strongly against this.
I think the United States now is the only country in the
world that has a minimum global tax. And what this deal does is
commit 137 countries around the world to establishing a global
minimum tax, which will greatly enhance the competitive
position of our firms that are the only ones that face this
now. And for the globe, it will stop the race to the bottom in
terms of countries lowering their tax rates and leaving
countries unable to raise the tax revenues that businesses need
us to have to invest in infrastructure and other things that
will make our economy competitive.
Mr. Williams of Texas. Just a bit of raising taxes is not a
winnable position, I don't think, and that is where I stand,
and where a lot of people stand. Last week, the Federal Reserve
Bank of San Francisco released a study which showed an
inflation spike last March after Democrats forced the American
Rescue Plan through Congress. They analyzed the current U.S.
inflation rate against other developed economies and concluded
that upwards of 3 percent of the inflation we are experiencing
can be attributed to government spending. We know how the
government spends.
Unfortunately, some people in Congress are trying to revive
the Build Back Better Act to spend trillions more dollars in a
time when the economy is already overheated. They often cite
the same economist who incorrectly claimed inflation was
transitory. We talked about that today, as the ones who now say
Build Back Better will reduce inflation. So, we cannot double
down on the reckless government spending continue to drive up
inflation. I can tell you as a small business owner, I know
what that is doing to our business.
Madam Secretary, I have a two-part question. First, who in
this country is hurt the most by the inflation? That would be
my first question.
Secretary Yellen. Households or consumers are hurt by
inflation, and low-income consumers probably bear the biggest
burden.
Mr. Williams of Texas. Okay. My time is up, and I yield
back.
Chairwoman Waters. Thank you very much.
The gentleman from California, Mr. Sherman, who is also the
Chair of our Subcommittee on Investor Protection,
Entrepreneurship, and Capital Markets, is now recognized for 5
minutes.
Mr. Sherman. Madam Secretary, at the beginning of this
year, we faced $16 trillion of legacy LIBOR, where the parties
would not know how much interest should be paid by the borrower
to the lender. We have solved that problem. I want to thank you
and your staff for your help in drafting the LIBOR Act. And
then, I want to thank the other part of your staff for promptly
issuing tax regulations to clarify what I think was obvious,
but it always deserves clarification when you are dealing with
$16 trillion, and that is that there was no sale or exchange as
a result of the change in index.
The Chair of the Small Business Committee brought up in her
comments the issue of cryptocurrency and Russians using that to
evade our sanctions. I want to commend to all members of this
committee, the bill I have dropped today, the Russian Digital
Asset Sanctions Compliance Act, which would give the
Administration the authority to tell crypto exchanges that they
have to shut down all Russian wallets or some portion of
Russian wallets. The crypto exchanges have announced that they
are going to do business as usual with all those that they
believe are Russian citizens or Russian companies unless and
until laws are passed that require them to do otherwise. This
is in real contrast to so much of the rest of the private
sector, which has voluntarily cut off Russia, particularly
their oligarchs and government.
The ranking member of the committee brought up the issue of
a possible invasion of Taiwan. I look forward to working with
him and others on this committee on a bill that would strip
China of its most favored nation status or normal trade
relationship with the United States automatically should there
be an invasion or blockade of Taiwan. We have, of course,
focused on Ukraine, and I will in a second, but an even greater
disaster is occurring in the world, and that is in the
Ethiopian region of Tigray, where 500,000 people have been
killed. This has been done not only by the Ethiopian
government, but the government of Eritrea, which has imposed a
blockade that threatens to kill hundreds of thousands, if not
millions of people.
Given the short time, I am going to ask you to respond, for
the record, what additional sanctions can we impose,
particularly on Eritrea, which has crossed international
borders for the purpose of engaging in a coordinated genocide
against the people of Tigray?
It is hard to seize Russian oligarch assets if you don't
know who owns what. The Washington Post reported on March 16th
that finding yachts and mansions is easier than uncovering
money in private equity funds that don't need to comply with
the same anti-corruption rules. U.S. private equity, hedge
funds, venture capitals are not currently required to disclose
beneficial ownership information of their investors to FinCEN
nor they are required to provide that information to the SEC.
In February, the House passed the America COMPETES Act,
which included an amendment that I authored requiring the
issuers of large issuances of exempt securities to file
beneficial ownership with the SEC. So, we do need to know about
this $11 trillion of private securities market if we are going
to know what is owned by which government agencies in Moscow or
which Russian oligarchs. Congresswoman Maloney's Corporate
Transparency Act now requires Treasury to establish a Federal
beneficial ownership database administered by FinCEN. Madam
Secretary, can you give us information on the time frame when
we expect this database to be set up?
Secretary Yellen. At FinCEN, we are working very hard to
establish that database as rapidly as possible and have come
out with one of the two proposed rules that we need. It is a
very complex undertaking. We want to get it right. I want to
respond on the issue about private equity firms and hedge funds
that we share the concerns of Members of Congress who have
raised this issue, and we are actively considering a rule that
would address potential gaps in the AML/CFT coverage for
investment advisors. And I do believe that this is something
that needs to be addressed.
Mr. Sherman. Thank you. You may just have to respond to
this for the record, but we now have a climate counselor in the
Administration to coordinate a broad range of work regarding
climate-related finance, economic, and tax policy. I hope you
can provide us with an update on Treasury's efforts to
coordinate with our international partners.
Secretary Yellen. I would be happy to.
Mr. Sherman. Thank you.
Chairwoman Waters. Thank you. The gentleman from Arkansas,
Mr. Hill, is now recognized for 5 minutes.
Mr. Hill. Thank you, Madam Chairwoman. Madam Secretary,
it's so good to have you back before the committee, and I
appreciate my colleagues discussing at length the role of the
Special Drawing Rights issues that you and I have talked about
several times. But I think it does merit noting that the $17.5
in equivalent SDRs that were issued last summer by the IMF to
Russia boosted their total SDR balance to 72 percent, meaning
that the largest portion of their SDRs are from last year's
allocation. And it is really their gold and their SDRs that, in
my view, are still subject to the ability to avoid sanctions. I
think it is a real risk, and that is why I am also glad,
Chairwoman Waters, that we marked up H.R. 6899 that encourages
you, as our Treasury Secretary, to make sure that the U.S.
works very hard to make sure that Russia and Belarus cannot in
any way exchange their SDR. So, thank you for that work.
I want to follow up, though, on our conversation we had
last summer. You made some commitments to the committee and to
the public about the enhanced rules that the IMF would do about
that SDR issuance. You told us in March last year you were
working with the IMF to craft rules that would make it
difficult to exchange. Did the IMF release those rules?
Secretary Yellen. The IMF has given countries guidelines
about appropriate use of SDRs, and there is a disclosure
framework so that we can monitor how they are being used. I
don't quite know where you can access those, but I know that
they have been produced.
Mr. Hill. I think it will be useful for the committee to
have that access to those guidelines. And do you know if any
SDRs were exchanged since they were issued for payment in any
form of debt?
Secretary Yellen. I can't give you a detailed rundown, but
I can tell you that the United States--
Mr. Hill. No, I know the United States isn't doing it. That
isn't the question. This is in your capacity of overseeing our
role as the largest shareholders in the IMF. I know that the
U.S. is in good standing here, but one of the concerns last
year was that you couldn't obtain that commitment from anybody.
We didn't ask anybody to commit to it in advance of it being
issued, so we have not seen that guidance. We don't know what
transactions have taken place, if any, over the past year, so I
think that would be very helpful.
Secretary Yellen. We will try to work with you on that.
Mr. Hill. Thank you very much. And this is all why I
introduced H.R. 1568, the Special Drawing Rights Oversight Act,
which would require congressional approval for all allocations
of SDRs equal to 25 percent of the U.S. quota rather than the
100 percent under current law; limit unilateral allocations to
once every 10 years rather than every 5 years; and require
congressional consultations 180 days before consenting to an
allocation rather, than 90 days. We don't need to reiterate how
much we have, I think, demonstrated that last year's SDR issue
across the board to all members of the IMF was a mistake, as
noted by Ranking Member McHenry.
On the subject of FinCEN, do you believe that FinCEN should
have the nationwide authority to review any transaction of any
amount on any subject out in the financial space over $10,000?
In other words, expand the geographic targeting that they do to
a nationwide audience. Do you think that is appropriate?
Secretary Yellen. I am not sure. I need to get back to you
on that. I know that FinCEN has some concerns with geographic
coverage because of the prevalence of internet transactions and
would like to see some change--
Mr. Hill. I would like to hear your personal view on that
because with no limitations, that would mean every transaction
over $10,000 will be subject to review by FinCEN staff and
added to a database. That seems unusual to me, and perhaps not
prudent, so I would like your personal view on that.
The last subject I wanted to raise with you is we have all
expressed some concerns, including the chairwoman, about the
performance of our managing director at the IMF, Kristalina
Georgieva, and I have concerns about her qualifications. Do you
share those concerns? Do you have all the faith in the world in
her leadership at the IMF?
Secretary Yellen. I believe that she has done a good job of
guiding the IMF. We have been very supportive of the work that
the World Bank did to look into the World Bank's doing business
report--
Mr. Hill. Thank you, Madam Chairwoman. I am going to send
to our oversight committee, Madam Chairwoman, a letter
requesting an investigation of the Director of the IMF. Thank
you.
Chairwoman Waters. Thank you.
We will now hear from the gentleman from Colorado, Mr.
Perlmutter.
Mr. Perlmutter. Thank you, Madam Chairwoman. Madam
Secretary, it's good to see you.
Secretary Yellen. Thank you.
Mr. Perlmutter. I want to give you the state of play of
safe banking, which is cannabis and banking. You and I have had
many conversations about this, but I want you to understand
where it is and to put the muscle of the Administration behind
getting it passed.
We have passed it now out of the House 6 times. Most
recently, it was amended onto the America COMPETES Act. The way
we passed it has been with sizeable bipartisan majorities. When
it was a standalone, we passed it 321-101, and it gets to the
Senate and gets stuck. And when Senator Crapo chaired the
committee basically from the Republicans point of view: too
big, too broad. Now, Senator Brown is the Chair of the
committee: too limited, too narrow. But we know that people are
still getting killed and robbed. And most recently, the Seattle
Times did an editorial last week because three people were
killed in Seattle last week--a robber, a police officer, and an
owner of a dispensary--because of all of the cash. In Oakland,
California, in November, there were 25 armed robberies in 1
week, and we had a young woman speak with us who was one of
those who was robbed, and then she got robbed again last week.
Small businesses, minority-owned businesses need access to
capital, which they would get if the banking system were open
to them. I was speaking to the national bank supervisors last
week, and I said to them, this isn't Ukraine, this issue isn't
Ukraine, this issue isn't nuclear winter, this issue isn't
climate change, but it is a real problem. And they said, yes,
you are sent there to solve problems and they expect this
problem to be solved. I would like to just get your sentiment
on this subject since you and I have talked about it for a very
long time.
Secretary Yellen. We have talked about it for a very long
time, and I agree with you. It is an important issue, and it is
an extremely frustrating one that we haven't been able to
resolve. I really appreciate your leadership in this area. We
have worked with you on this bill. We are supportive of it. As
you know, there is a conflict between State and national law,
banks are trapped in the middle of that, and some legislative
solution, I think, is necessary to move this forward. I share
your frustration that we haven't been able to make progress. I
think it does really require congressional action.
Mr. Perlmutter. And I thank you for that. And I guess I
just ask you to impress upon the Administration the need to
either get it passed as part of the America COMPETES Act, which
I think will be coming up the quickest, so that nobody else
dies because there is so much cash or standalone, but get it
out of the Senate and get it to the President.
Secretary Yellen. We would like to see that happen.
Mr. Perlmutter. Thank you very much. I will switch to
Ukraine for a second. One of the things that we have seen is,
President Biden has brought together all sorts of nations to
deal with sanctions on Russia and in response to the invasion.
However, Russia has been preparing for this moment for some
time and Putin has been attempting to sanction-proof his
economy. What should we make of the Russian rubles recovery
from the freefall it saw in early March, and is this a sign
that the Russian economy is more resilient than we originally
thought?
Secretary Yellen. The Russian economy is really reeling
from the sanctions that we put in place, and the market in
rubles is not a free market where the value that is established
in trading reflects the value if the currency could be freely
traded. Russians aren't allowed to sell assets. Foreigners who
own Russian assets are not allowed to sell rubles and take
their money from the country. There are capital controls in
place, and the restrictions that Russia and the Russian Central
Bank have put on Russians leads to a situation in which you
shouldn't really infer anything from the value of the currency.
Mr. Perlmutter. Thank you for your service, and my time has
expired.
Chairwoman Waters. Thank you very much. The gentleman from
Georgia, Mr. Loudermilk, is now recognized for 5 minutes.
Mr. Loudermilk. Thank you, Madam Chairwoman. And thank you,
Madam Secretary, for being here today.
I want to shift gears a little bit and talk about the
implementation of the Anti-Money Laundering and Beneficial
Ownership Reform Law that I know that you are working on right
now. And the new rules from FinCEN really will require regular
reporting of beneficial ownership from about 30 million
businesses along with about 2 million new businesses per year.
Now, the vast majority of these businesses are law abiding, and
their focus is on serving their customers, and making payroll.
They are law-abiding businesses, but they don't stay tuned into
what is going on here on Capitol Hill. They are not watching
the C-SPAN coverage of this today. They are trying to make a
living. And so, I see that it is going to be a real challenge
to make sure they are aware of these new rules.
Now, we don't want this to become a, ``gotcha,''
enforcement mechanism that is used by unfortunately too many
agencies now as punishment for someone who just isn't aware
that they have to give up this type of information, and, quite
frankly, most of them are small businesses. So, my question is,
what is your plan to work with State Governments to make sure
that small businesses are aware of the requirements and so they
all know how they have to comply?
Secretary Yellen. I think you raised an important point
that it is important to be in touch with these businesses. I
can't tell you in detail what the plan is, but I would be glad
to have people at Treasury discuss this with you and offer a
briefing and have a chance to hear your concerns and
suggestions.
Mr. Loudermilk. I think it is going to be imperative for us
to have a plan going in because, as I said, it should not turn
into a, ``gotcha,'' enforcement mechanism, to where a guy that
runs a small carpentry shop, who is more focused on the price
he is paying for lumber and sheetrock, et cetera, he is trying
to keep his businesses going, and all of a sudden gets a knock
on the door from a Federal agent who says, you never told us
who you are and your ownership. I hope that isn't the direction
that we are going, but I don't know. I think there needs to be
a plan going forward, and that Congress is aware of the plan of
how we are going to let these businesses know of the
requirements that have been put on them by Congress and by the
Federal Government to comply with this new law.
And so, I think there definitely should be a plan moving
forward because most of these businesses, they don't have
floors of compliance lawyers, they don't even have a lawyer.
They are just trying to get by. I also think that there is a
concern with many of us that the proposed rule's definitions
of, ``substantial control,'' and, ``ownership interests,'' are
overly complicated. I think it is going to make it hard to
apply them consistently across-the-board, especially with
various-sized businesses. And it is going to compound the
problem for banks and credit unions if FinCEN uses those same
definitions in an updated customer due diligence rule. As a
follow-up question, will Treasury and FinCEN take steps to try
to simplify these aspects of the rule before it is finalized?
Secretary Yellen. FinCEN has put out a proposed rule to
collect the information, and it does wish to minimize the
burden on entities that are required to report it. There have
been very significant public comments on the rule, and FinCEN
will consider them very carefully before trying to finalize a
rule in this area. This is a very legitimate concern, and one
that FinCEN needs to carefully work on.
Mr. Loudermilk. Right. And if I am not mistaken, FinCEN is
technically a part of the Department of the Treasury. Is that
correct?
Secretary Yellen. Yes.
Mr. Loudermilk. Of which you are the captain at the helm.
It sounds a little bit like you are deferring them to be an
independent agency over here, but they do answer to you. Is
that correct?
Secretary Yellen. That is correct.
Mr. Loudermilk. And so, what I am asking is, are you going
to give direction in these areas to simplify substantial
controlling ownership interest, or make it such that this
doesn't turn into an issue where we find potentially millions
of businesses not in compliance with the law and wondering
where they are going to go? I am looking for some type of
direction. I am not hearing there is a plan, and I am not
hearing that this is the way we are going, and I'm just kind of
hoping that is the way we go.
Secretary Yellen. I agree with you. This is a very
legitimate concern that needs to be addressed, and we will
address it.
Mr. Loudermilk. Okay. Thank you.
Chairwoman Waters. The gentleman's time has expired.
The gentleman from Florida, Mr. Lawson, is now recognized
for 5 minutes.
Mr. Lawson. Thank you, Madam Chairwoman, and thanks for
having this hearing.
Secretary Yellen, I am hearing from some small community
development financial institutions (CDFIs) that they are
concerned that proposed changes being made by the CDFI Fund
will make it harder to become certified as a CDFI and access
the important capital that Congress has been providing them.
This is especially troubling coming out of a pandemic. Can I
get a commitment from you today that we will look into this and
make sure that the Administration and the CDFI Fund will not
make changes to the certification process for community
institutions to become CDFIs more difficult?
Secretary Yellen. We will be happy to discuss this in
greater detail with you. I am not sure I exactly understand
what the issue is, but I can have my staff contact you and
learn more. We are certainly very supportive of CDFIs and want
to make sure that they can become established and receive all
the additional funding that Congress has made available. These
are critical institutions in supporting the provision of
capital, especially in low-income minority neighborhoods.
Mr. Lawson. Okay. Thank you, and I look forward to
receiving that information. Secretary Yellen, I am hearing from
those representing credit unions that when they apply for CDFI
funds, some are waiting over 6 months for a status update on a
decision on their certification as a CDFI. Can you look into
it, what may be causing the delay in getting timely updates and
decisions and let us know if this is something that needs
statutory relief from Congress? Are there other ways that this
can be addressed?
Secretary Yellen. We will be glad to work with you on that
and have a look.
Mr. Lawson. Okay. Secretary Yellen, with the creation of
the interagency law enforcement team, how is the information
that Treasury collects being shared with the task force and
have you found the creation of the task force useful?
Secretary Yellen. I'm sorry. The task force on what? I
didn't quite catch that.
Mr. Lawson. Have you found the task force useful?
Secretary Yellen. Which task force?
Mr. Lawson. I'll tell you what, I say with the Capture, the
creation of the intelligence law enforcement team.
Secretary Yellen. I'm sorry. Are you referring to the
Klepto Task Force?
Mr. Lawson. Yes, Klepto. Have you found any information to
be useful?
Secretary Yellen. The KleptoCapture Task Force, is that
it??
Mr. Lawson. Yes, yes.
Secretary Yellen. This was just recently established by the
Department of Justice to help us go after oligarchs to make
sure that we are able to identify and seize their property. And
I think they have already had notable success in seizing some
property, and it is going to be an important initiative in
helping us make sure that sanctions work.
Mr. Lawson. Okay. With that, Madam Chairwoman, I yield
back.
Chairwoman Waters. Thank you very much. The gentleman from
West Virginia, Mr. Mooney, is now recognized for 5 minutes.
Mr. Mooney. Thank you, Madam Chairwoman. Secretary Yellen,
a recent study on Chinese lending by AidData revealed that
China has established itself as a lender of first resort for
many low- and middle-income countries. China's lending terms
are often less generous than those of Western and multilateral
creditors, yet the Multilateral Development Banks are not
appealing enough to these countries, so they turn to loans from
China. China has financed hundreds of billions of dollars in
development projects around the world in the last 20 years.
China is not extending their funds to these countries out of
kindness. They are using their financing to aggressively expand
their influence around the world. My question is, why is it
that so many countries take a Chinese loan when financing from
Multilateral Development Banks is available, and what are you
doing to change this?
Secretary Yellen. My sense is that many developing
countries would much prefer high-standards capacity-building
MDB loans to Chinese loans. And it is not that they prefer
Chinese borrowing to MDB borrowing, but that they really want
to have access to all of the financing that is available to
them and they use both. We feel very strongly, and this is part
of the commitment the President made to B3W, Build Back Better
World, to helping developing countries build infrastructure in
ways that involve sustainable debt, transparency, and high-
quality lending practices, rather than often-predatory Chinese
lending practices.
And I think, to make sure that we have that capacity, we
need to bolster U.S. leadership in the multilateral system, and
to make sure that we meet our financial obligations to these
institutions. So, they need to be adequately resourced, and we
don't yet have confirmed executive directors, which is also
important.
Mr. Mooney. Okay. Thank you for your response to that
question. As a lead-in to my second question, I like to use our
current situation with Russia as a good example of why China's
influence abroad is an important issue, a very important issue.
In response to its aggression in Ukraine, America responded
with sanctions that will isolate and weaken Russia. Such a
response does not work if we act alone. We need other countries
to join our effort in order to apply more pressure to Vladimir
Putin and Russia. My concern is that, with China's growing
influence abroad, it would be more difficult to isolate and
weaken them in the case of a Chinese military aggression.
Secretary Yellen, how concerned are you that China's lending
around the world could interrupt attempts to respond to Chinese
aggression?
Secretary Yellen. I would say, generally, I am concerned
about Chinese lending around the world. As I mentioned, I think
often, Chinese lending can be predatory and result in
unsustainable debt and influence on countries, and that I would
very much like to see the United States and its partners expand
our lending in ways that diminish China's influence in this
space. And, of course, it is a way in which China exerts
influence on many countries that borrow from it, but we need an
alternative, and we need to finance it and we need a response.
Mr. Mooney. Thank you. I think in my last minute, I have
time for one more question. The Chinese Communist Party is
carrying out what is widely acknowledged as genocide of the
Uyghurs. And yet only one member of the Politburo has been
sanctioned pursuant to the Global Magnitsky Act, and that
individual sanction was during the Trump Administration. Why
aren't we sanctioning China's top leadership for what they are
doing to the Uyghurs?
Secretary Yellen. We have put sanctions on individuals who
were involved in Xinjiang and the Uyghurs situation. Whom
exactly to sanction in China is something that is part of
broader foreign policy concerns that the State Department plays
an important role in determining. It is not just a matter for
Treasury.
Mr. Mooney. Thank you. I would just like to close by saying
we need to act quickly to stop China's negative influence from
growing further. Thank you. I yield back.
Chairwoman Waters. Thank you. The gentleman from New
Jersey, Mr. Gottheimer, who is also the Vice Chair of our
Subcommittee on National Security, International Development
and Monetary Policy, is now recognized for 5 minutes.
Mr. Gottheimer. Thank you, Madam Chairwoman, and thank you,
Madam Secretary, for joining us today
The U.S. faces an increasingly complex series of challenges
before it between the Russian invasion of Ukraine, competition
with China, and the continued threat of both homegrown and
domestic terrorism. It is critical that Congress work together
in a bipartisan manner to address these issues. The world is
watching our response to these critical issues before us, and
it is imperative we act together to demonstrate leadership in
such areas as stopping the financing of terrorist and ensuring
the U.S. emerges as a leader in emerging technology.
Secretary Yellen, the New Jersey Office of Homeland
Security and Preparedness just released its 2022 Terrorism
Threat Assessment. The report cited homegrown violent
extremists, such as those inspired by ISIS and other
extremists, as the top terrorist threat facing New Jersey
citizens. What is the Treasury Department doing to combat the
financing of domestic terrorists, whether the funding comes
from overseas or from U.S. sources, and is it a major concern
for you and your work?
Secretary Yellen. Yes, it certainly is a major concern, and
we are using sanctions policy and other resources to try to
address this threat.
Mr. Gottheimer. Can you speak a little bit about, if you
would, where do you see gaps? Now that you have been in the job
for a bit, where do you see gaps in your authority which we
could help address here in Congress? What would be most helpful
for you to help fight these threats to our country?
Secretary Yellen. Generally, we have great powers to impose
sanctions and to use them under Executive Orders to address
threats that we see. There may be some discrete areas. I think
one came up earlier in this hearing about geographical
targeting, in the case of FinCEN's collection abilities, but we
can work with you and give you greater detail on areas where it
might be possible to have our authority bolstered. But, in
general, we have substantial powers in these areas.
Mr. Gottheimer. Thank you, and I look forward to working
with you on that. If I can move on. I have been a strong
supporter of establishing appropriate guardrails around the
cryptocurrency space. They will both protect consumers and
encourage innovation here in the United States. This includes
my discussion draft, the Stablecoin Innovation and Protection
Act, which would establish guidelines in issuing qualified
stablecoins. What I am particularly concerned about is ensuring
that bad actors are not able to use cryptocurrency of any kind
to launder money or fund nefarious activities. Can you talk a
little bit about efforts Treasury is taking to with actors like
terrorists or Russian oligarchs to prevent them from using
crypto and avoid sanctions regimes?
Secretary Yellen. Yes.
Mr. Gottheimer. I know you talked about this a little, but
if you can expand on that, I would be grateful. Thank you.
Secretary Yellen. Sure. We are aware of the possibility
clearly that crypto could be used as a tool to evade sanctions,
and we are carefully monitoring to make sure that doesn't
occur. But I would say we have a good deal of authority in this
area and are using it and will use it, and it is harder on a
large scale for an economy to actually use crypto to evade
sanctions. Even large-scale transactions would become apparent
by those who regularly examine the blockchain. We would see
that there were large transactions taking place. Exchanges,
those who use crypto need to get in and out of it to buy things
in hard currencies and exchanges are subject to AML/CFT
regulations. So, they are part of the financial system that is
subject to those regulations.
And trying to use crypto on a large scale, we think is
something that is not easy to do, so it is a channel we are
worried about. We haven't seen significant evasion through
crypto so far, but we will monitor carefully and use
authorities that we do have to make sure that this isn't a
major avenue for evasion.
Mr. Gottheimer. In the crypto space, I am hearing from many
Members of Congress, from those in the space, both consumer
groups but also, of course, entrepreneurs, and businesses that
are developing in cryptocurrency. I guess I am out of time, so
I will yield back.
Chairwoman Waters. Thank you.
Mr. Gottheimer. Thank you.
Chairwoman Waters. The gentleman from Ohio, Mr. Davidson,
is now recognized for 5 minutes.
Mr. Davidson. Thank you, Madam Chairwoman, and, Madam
Secretary, thank you. I appreciate your testimony today. And I
am just curious, do you believe that pursuing globalization
through executive policies is aligned with our goals of
promoting an internationally-competitive environment through
domestic policy?
Secretary Yellen. I'm sorry, promoting globalization--
Mr. Davidson. Globalization.
Secretary Yellen. Through what?
Mr. Davidson. Did we sign a treaty or something with Basel?
Did I miss something, that the Senate affirmed a U.S. treaty
with some of this international global framework? And the
reason I ask is just one of the most recent examples is this
global minimum tax imposed under OECD Pillar Two, and it says
it would protect national sovereignty. Your rationale seems
perplexing because I am not sure anyone would think that
sovereignty is derived from some sort of international
agreement, particularly on tax policy. And, of course, in our
Constitution, it says all bills for raising revenue shall
originate in the House of Representatives. So, what is the
logic of us submitting to some non-sovereign international
framework on the tax policy?
Secretary Yellen. Any change in tax law in the United
States must be legislated by Congress without question, so
there is no agreement that imposes any requirements on--
Mr. Davidson. So just a coordination, kind of like Basel
isn't binding, but we do implement it and kind of gold plate
it, for example, not to conflate Basel with tax policy. But
when you talk about bank regulation, prudential regulation,
some of the components that are allegedly in these stress tests
that even Congress isn't allowed access to and the people
submitting to them aren't allowed to share the results of those
even to Congress, who wants to determine whether we have the
right regulatory framework in there. A lot of this is coming
out of this global cooperation, so what is the nature of that?
Secretary Yellen. We have a global financial system, and
for it to be regulated effectively, regulatory systems across
countries need to be coordinated with one another. And
supervisors are all asking themselves, what is the best way to
proceed to have a safe, sound financial system?
Mr. Davidson. I think my point is that it is not the treaty
of the United States, and it is not a power that Congress
delegated, that we shouldn't be able to hear candid answers.
And so, there are big black holes in terms of what we are able
to get from this. And I just want to follow up on one area, in
particular, because I think you are saying something that is
encouraging here.
In December, you submitted answers to Senator Toomey in
response to questions that he submitted for the record. One
question pertained to draft guidance issued by the Financial
Action Task Force (FATF). A particular question asked if
Treasury believed non-custodial services should be subjected to
money services business registration in light of FATF guidance
that was issued in the fall. In your answer, you stated that
the FATF guidance was aligned with prior FinCEN guidance, and
that neither approach proposed to regulate the technology
itself. Rather, you asserted that both FATF and FinCEN guidance
were focused on financial activity. Do you still stand by that
statement?
Secretary Yellen. I believe so. I don't know if you have
something particular in mind that goes against that, but--
Mr. Davidson. My concern is, picking up on that FinCEN
guidance, for example, we introduced a bill called the Keep
Your Coins Act, which protects self-custody. And the reason we
feel the need to protect it is because Treasury, under
Secretary Mnuchin, and under your leadership, has proposed to
enter into a rulemaking that would potentially prohibit self-
custody, or, as the language has been used, self-hosted
wallets, but it is really self-custody of private property
without an intermediary.
And I was really encouraged by your dialogue with Mr.
Gottheimer there in terms of your view on some of the digital
asset space, and I know that you have a speech coming up on
that I think tomorrow. But in light of the President's
Executive Order, do you believe that it would be fitting for
Treasury or other components of Treasury, such as the SEC, to
enter into rulemaking, while we are in the midst of that
Executive Order?
Secretary Yellen. To enter into a rulemaking?
Mr. Davidson. Rulemaking speeches, statements of policy or
guidance. Should we take those kinds of things as guidance in
light of the Executive Order?
Secretary Yellen. The President has issued an Executive
Order asking his government to examine issues connected with
digital assets. I am giving a speech tomorrow to describe the
Executive Order and the approach that we are taking, but in
most areas, we haven't come out yet with recommendations. An
exception to that is in the area of stablecoins, where I
believe my Under Secretary testified to you. The President's
Working Group is sufficiently concerned about rapid growth and
did come out with recommendations there.
Mr. Davidson. Thank you, and I hope Congress will
participate fully. And my time has expired, so I yield back.
Chairwoman Waters. The gentleman from Illinois, Mr. Casten,
who is also the Vice Chair of our Subcommittee on Investor
Protection, Entrepreneurship, and Capital Markets, is now
recognized for 5 minutes.
Mr. Casten. Thank you, Madam Chairwoman, and thank you,
Secretary Yellen.
I would like to understand a little bit about the energy
sanctions that we have on Russia and the potential sanctions
that we could impose, and I am delighted to see that there
seems to be some strong bipartisan support for sanctioning
Russia's oil exports. If I am doing my math right, Russia
exported about 4.7 million barrels a day last year, the second
largest producer, 11 million barrels per day production,
somewhere between 4 and 5.
Secretary Yellen. I believe they produced about 10 or 11
million barrels a day.
Mr. Casten. Total production, but the exports are between
four and five.
Secretary Yellen. Something like that, yes.
Mr. Casten. That is ballpark. We are, of course, a very
small take of that import.
Secretary Yellen. Very small.
Mr. Casten. What I would like to understand is that as we
are thinking with our NATO allies and others about sanctioning
of that, let us call it 5, how much realistically can we block
from the sale in international markets? Can we get the whole 5?
Can we get half of that? What do we think is the amount of pain
we could impose on Russia by blocking those exports?
Secretary Yellen. The United States has banned oil imports.
Mr. Casten. Sure, but we are, like, half a million barrels
a day--
Secretary Yellen. The issue with blocking oil exports from
Russia is that many countries, especially in Europe, are very
dependent on that oil, and we are likely to see skyrocketing
prices if we did put a complete ban on oil. And as I said at
the outset, our concern has been in designing sanctions. We
want to impose the maximum pain we can on Russia, but also
taking care not to impose undue pain on Americans and on our
partners. We wish we were a lot less dependent on oil than--
Mr. Casten. I am sympathetic, and I am not trying to ask a
politically leading question. I am just trying to understand,
and I realize natural gas is a bit of a different issue with
Germany's situation. But with respect to oil, I have seen
ranges of 1 to 3 million barrels a day that the civilized world
could block, and I am trying to understand because there is a
big supply/demand balance question on the other side. And I am
wondering, as we think both about the tools we have to block
Russia and the global inflationary measures, I don't know how
to think about that except in saying how many million barrels a
day are we going to take off the market.
Secretary Yellen. To the extent that we diminish Russia's
ability to export oil and force Russia to keep oil in the
ground, which is occurring to a meaningful extent right now, we
do want to worry about overall supplies and making sure that
they are at least roughly adequate. That is why President Biden
announced a release, a major release, a million barrels a day
of crude from the Strategic Petroleum Reserve over the next 6
months in the hope that, an expectation that high prices will
induce firms in the United States and elsewhere. It is enough
time to ramp up production. If we are successful with that, it
might be possible to put tougher restrictions on Russia.
Mr. Casten. Okay. Maybe we can follow up offline, because
the concern I have is that if we are looking at 1 to 3 million
barrels a day of shutdown, there is no country that has the
ability to ramp that up. And, of course, the Strategic
Petroleum Reserve is a finite resource. And I think we have a
lot of things that we could do on the demand side of course,
right? I am delighted to see the move on heat pumps and things
we could do to lower oil use, but I am nervous about what is
there. And I would like us to understand, if we are, on a
bipartisan basis as we should be committed to reducing Russian
oil exports, then we need to have a really good visibility on
what that does to global prices for oil markets and to what
degree can we reduce our dependency on those through other
measures.
Secretary Yellen. Right. The demand for oil is highly
inelastic in the short run. And so--
Mr. Casten. As is the supply.
Secretary Yellen. --too large a restriction on supply could
have very large price effects. And that is what we are trying
to balance, that we would ideally like to impose as much pain
as possible on Russia, but we need to take into account the
consequences.
Mr. Casten. Okay. I am out of time, but I will send you a
question for the record. I really have the same question about
food, but if I look at wheat production and corn production and
sunflower oil production, there is the same dynamic there, and
I would like us to understand how we hurt Russia and understand
the implications.
Secretary Yellen. Same basis--
Chairwoman Waters. The gentleman's time has expired.
Mr. Casten. Thank you. I yield back.
Chairwoman Waters. The gentleman from North Carolina, Mr.
Budd, is now recognized for 5 minutes.
Mr. Budd. I thank the Chair, and I thank you, Madam
Secretary, for being here today.
Considering that one of the topics of discussion today is
our effort to counter terrorist financing, I would like to
discuss the fact that the U.S. Government has already sent
taxpayer money to convicted terrorists. I sent you a letter on
January 11th regarding the revelation that the convicted Boston
Marathon bomber had received a $1,400 economic impact payment
under President Biden's American Rescue Plan. Now, this was
revealed in court filings in the State of Massachusetts. For
background, this is a man who planted a bomb at the 2013 Boston
marathon that killed 3 people, including an 8-year-old boy, and
he maimed dozens more, and he then went on to murder an MIT
police officer. And as of July 2021, the IRS found that 560,000
incarcerated individuals received stimulus checks, which
totaled $783 million.
Madam Secretary, my first question is this: Can you provide
an updated number on how many incarcerated individuals received
stimulus checks from President Biden's American Rescue Plan?
Secretary Yellen. Sorry, I don't have that number at my
fingertips. I believe that the law required it. This wasn't a
matter of IRS discretion. I believe the IRS followed the law.
Mr. Budd. Thank you. I want to shift gears just a minute.
Rather than how many individuals, can you now provide an
updated amount of Federal tax dollars that were sent to Federal
prisoners?
Secretary Yellen. Again, I don't have that. I don't have
that for you, but this wasn't a discretionary decision by the
IRS.
Mr. Budd. From what we know, at least $783 million in
taxpayer funds have been sent to Federal prisoners, which
includes murderers, rapists, and terrorists. Madam Secretary,
does the Biden Administration believe it is acceptable that
hundreds of millions of dollars, three-quarters of a billion
dollars of taxpayer money, do you think it is okay with the
Biden Administration that that goes to Federal prisoners?
Secretary Yellen. The IRS is carrying out the law, and this
is a law that Congress passed.
Mr. Budd. It is very interesting, and I have the yeas and
nays here from March 6, 2021. It was Cassidy Amendment 1162 on
the Senate side. It was an amendment over there to block
Federal money, taxpayer dollars from going to prisoners, but
every single Senate Democrat last year blocked that amendment
to the American Rescue Plan that would have prevented these
payments to prisoners. So, we see that the Biden Administration
didn't support that, but does the Biden Administration support
sending taxpayer money to Federal prisoners, like the Boston
bomber in particular?
Secretary Yellen. As I said, Treasury is charged with
carrying out programs that Congress passes, and that is what we
are doing. And I don't have an opinion to share with you beyond
saying that--
Mr. Budd. I understand that, but it seems--
Secretary Yellen. --we are implementing a law that Congress
passed.
Mr. Budd. I am just as confounded as it seems you are at
this, because with the majority in the Senate side, they had
the authority to stop it but did not, or if they didn't have
the authority, why didn't they support the amendment that would
have given you the authority to send that? The Biden
Administration, it just seems, was very irresponsible with this
because they could have prevented this and yet they did not. I
just want to be very clear with you, Madam Secretary. I do not
think that Federal prisoners should be getting stimulus checks,
period. Every taxpayer dollar is sacred and should be treated
that way, so I strongly urge your Department to do better when
it comes to safeguarding taxpayer dollars.
I yield back.
Chairwoman Waters. The gentlewoman from Iowa, Mrs. Axne,
who is also the Vice Chair of our Subcommittee on Housing,
Community Development, and Insurance, is now recognized for 5
minutes.
Mrs. Axne. Thank you, Madam Chairwoman, and thank you,
Secretary Yellen, for being here. It is good to see you today.
And I want to start out by thanking you so much for helping the
great State of Iowa get the funds that we needed transferred
from the State over to Polk County to keep a roof over people's
heads, and how quickly the Treasury Department responded to the
request from me and the State to make that happen. It has made
a big difference, and I really appreciate it.
Secretary Yellen. Thank you.
Mrs. Axne. Again, I thank you as well for yesterday's event
where the President signed the Executive Order and for helping
us address that family glitch so that a couple hundred thousand
more Americans can get healthcare coverage and we can lower the
cost for others. In States like Iowa, that means a world of
difference, so thank you so much for all you do.
Secretary Yellen. Thank you for that. We were glad to be
able to address that.
Mrs. Axne. Wonderful. Here is the deal. I know a lot of
people, and you are hearing it today, are very interested in
how the sanctions are working against Russia. I have heard from
multiple folks and in briefings, et cetera, that the sanctions
seem to be working well. But as that is basically one of our
key tools that we are using right now in this issue, I would
like to hear more from you if you think that those sanctions
are working in the way they should, and if they are
strengthening what we have in place, and if there is any
suggestions that you also have?
Secretary Yellen. I do believe the sanctions are having a
devastating effect on Russia. Russia has become almost
completely isolated from the international financial system.
American and foreign firms are leaving Russia. It is losing
access to goods that Russians who are accustomed to buying are
being deprived of. The Central Bank of Russia had amassed a war
chest of reserves of over $600 billion that they counted on to
be able to deal with the impacts of sanctions on their economy
and to help financial institutions and firms that were badly
affected. And our sanctions on the Central Bank, jointly with
our partners, have deprived them of access to certainly over
half of that, and another 30 or 35 percent is tied up in gold
and other forms of wealth that are not highly liquid. So, we
have really deprived them of access to a war chest that they
were counting on.
We have imposed restrictions on exports of a wide range of
equipment. That is including semiconductors that are critical
to Russia's ability to continue to build defense in high-
technology sectors. We have sanctioned hundreds of Russian
oligarchs and members of the Russian government. We have
sanctioned firms in the defense sector, in the aerospace
sector. And we continue to work with our allies to put in place
additional sanctions as Putin ramps up his horrific crimes in
the Ukraine. Just this morning, we announced that we are
putting in place full blocking sanctions against Russia's
largest bank that has over a third of the assets of the Russian
banking system. We are prohibiting Americans from investing in
Russia and further sanctioning elites. And this is, I believe,
going to have a devastating effect on the economy and already
is doing so.
Every week, we have put in place new sanctions, working
closely to coordinate with our partners. We have a huge
coalition, and countries that have rarely, if ever, imposed
sanctions, including Switzerland and Singapore, have joined
with our coalition, and I do believe that they are working.
Mrs. Axne. Thank you, Secretary Yellen. That was a great
overview. I did want to talk about the supply chain because of
the lockdown in China. I am running out of time, but I
appreciate all of the work you are doing and the update on the
sanctions. Thank you.
Chairwoman Waters. Thank you very much. The gentleman from
Tennessee, Mr. Kustoff, is now recognized for 5 minutes.
Mr. Kustoff. Thank you, Madam Chairwoman. Thank you for
calling today's hearing, and thank you, Secretary Yellen, for
being here today.
One thing I hear from constituents at home, and I think
every other Member of Congress hears from their constituents,
is that everything is expensive. It is just expensive to live
today, and there are a lot of factors for inflation. I get
that. I do want to ask you, going back to the American Rescue
Plan, before we voted on it, Larry Summers, one of your
predecessors under President Clinton, talked about the package,
and he said, ``I think this is the least responsible
macroeconomic policy that we have had in the last 40 years.''
He is right, isn't he, Madam Secretary?
Secretary Yellen. Well, he is not right, and I am sorry, I
have to differ with his assessment. You have an American
economy that is enjoying the strongest job market that we have
had in decades. Americans feel confident of their ability to
get jobs and to move to better jobs. To think that a year, 2
years after a pandemic struck our country and unemployment was
in the double digits, rather than waiting for a decade, as we
had to, after the financial crisis, to recover the jobs that we
lost, this country is a enjoying a 3.6 percent unemployment
rate, and has seen the creation of over 500,000 jobs a month in
recent months. Americans' financial conditions overall are very
strong. If you ask the largest banks in the country that keep
track of checking account balances of their customers at all
levels of income and wealth--
Mr. Kustoff. Let me reclaim my time, Madam Secretary. To
put you on the record, you are saying that people feel good
about the economy today? The American people feel good about
the economy?
Secretary Yellen. They are concerned about inflation, and
that is entirely understandable, and I am concerned about it.
And the Administration--
Mr. Kustoff. Because they are seeing the highest inflation
that they have seen in 40 years, correct?
Secretary Yellen. Yes, it is, and it is a significant
problem that must be dealt with.
Mr. Kustoff. Let me ask you about this. Yesterday, San
Francisco Fed President Mary Daly was speaking. She was talking
about inflation being at a 40-year high, and she said that is
as harmful as not having a job. She is right about that, isn't
she?
Secretary Yellen. Of course, it erodes the ability of
households to purchase a wide array of goods and services, so,
yes, it is. But remember that, especially for the lowest-income
Americans, wage increases have been more rapid than inflation,
and for pensioners' social security--
Mr. Kustoff. Reclaiming my time, the wages are not keeping
up with everyday goods and services, correct?
Secretary Yellen. For low-income Americans, on average--
Mr. Kustoff. For every American.
Secretary Yellen. --that is not true. For low-income
Americans, their wage gains have exceeded that, and--
Mr. Kustoff. How about for middle-class Americans, are wage
gains exceeding the price increases, or are price increases
exceeding wage gains for middle-class Americans?
Secretary Yellen. Over the last year, the price increases
have exceeded the wage gains for middle--
Mr. Kustoff. Let me ask you about sanctions in my remaining
time. A big priority of Chairwoman Waters has been sanctions
against the Russian oligarchs, I think of everybody, and we
applaud those efforts. As it relates to President Putin, what
degree of confidence do you have that any of these sanctions
that we have levied have personally touched him or his assets?
Secretary Yellen. We have levied sanctions against
President Putin, and this morning, I believe we levied
sanctions against his daughters. Look, did all the sanctions,
including those that we have imposed against him and the threat
that we told him that we would make this very painful and
impose sanctions greater than anything any country had ever
seen, did it deter--
Mr. Kustoff. Let me ask it another way. Is he feeling the
effect of the sanctions? Is President Putin feeling the effects
of the sanctions? Do we have any--
Secretary Yellen. Is he what?
Mr. Kustoff. Is President Putin feeling the effects of the
United States sanctions that have been assessed against him?
Secretary Yellen. I don't know personally if he is feeling
them yet, but Russia is certainly feeling the effects of these
sanctions. And his defense establishment and other critical
sectors of the Russian economy are absolutely feeling the
effects of these sanctions as they find it impossible, for
example, to find the parts that they need to keep their
automobile factories running and to build their war machine and
replenish it. Thank you.
Mr. Kustoff. Madam Chairwoman, I yield back.
Chairwoman Waters. Thank you. The gentlewoman from New
York, Mrs. Maloney, who is also the Chair of the House
Committee on Oversight and Reform, is now recognized for 5
minutes.
Mrs. Maloney. Thank you, Chairwoman Waters, and thank you
so much for being here, Secretary Yellen. As you know, I am
very focused on Treasury's implementation of my Corporate
Transparency Act, which will require companies to disclose
their true beneficial ownership to FinCEN. This was the most
important, up-to-date, anti-money laundering law in a
generation, and I believe this should be a top priority of the
Treasury Department.
The law gave Treasury 1 year to finalize the rules
implementing their bill, and that deadline was over 3 months
ago. So far, Treasury has not finalized any part of the rule
and has only proposed half of it. This is deeply disappointing,
especially because the sanctions on Russian oligarchs have
shown the importance of being able to look behind anonymous
shell companies to find these bad actors. And as we speak,
Russian oligarchs are busy moving their money out of our reach,
and, in some cases, they are likely moving their money into the
U.S. because they know they can hide it anywhere they want
anonymously until Treasury finally finishes implementing my
bill.
This is not about Treasury having insufficient resources
either. I have worked with Chairwoman Waters and my colleagues
on the Appropriations Committee to secure an additional $355
million for Treasury and FinCEN, which is more than enough to
write the rule. The second half of the rule, which Treasury
hasn't even proposed yet, is the most important part because it
deals with who has access to the beneficial ownership database
and on what terms.
Secretary Yellen, will you commit to proposing the access
rule for the Corporate Transparency Act before the end of the
month?
Secretary Yellen. I can't give you a definite promise on
timing. These are extremely complex rules. There are
relationships between the two parts of the rule, and they have
to be coordinated. Treasury has received very extensive
comments on the first part of the rule that it has to consider
in preparing the second part of the rule. They are not fully
separable. So, this is tremendously important legislation. I
congratulate you and Congress for passing this. It is a
critically important effort. It is very complex. We have to get
this right. I can't agree to a deadline. I am not positive when
we are going to get that out.
Mrs. Maloney. I will tell you it is critically important,
especially with what is happening in the world with Ukraine.
And if you can't commit to the end of the month, when will you
be proposing the access rule? Can you give us an estimate for
when we will be able to see this rule?
Secretary Yellen. Certainly this year, within the coming
months.
Mrs. Maloney. Secretary Yellen, my message to you today is
a very simple one: Please speed up the process for the
beneficial ownership rulemaking. This is taking far too long,
and we need action now, not in a few months, but now. We don't
know who is behind buildings in New York and elsewhere, which
are just bank accounts. There are no lights in the buildings.
People don't live there. They are anonymous shell companies.
And law enforcement wants to know, the public wants to know,
the Ukrainian people want to know who owns this property, and
we can't get to it until the rules have been made, and we are
way, way behind, and it is an emergency.
Now, I would like to move on to the substance of the rule.
There are a number of things Treasury could do in the access
rule to make the beneficial ownership database more usable and
more effective for law enforcement and others, for example,
making the forms that companies fill out very clear and easy to
understand, and having companies submit the information in
machine-readable format. Open Ownership, which is an internet,
national non-profit that focuses on beneficial ownership, has a
number of additional recommendations for Treasury's database.
Secretary Yellen, what is Treasury doing to ensure that the
beneficial ownership database is as usable and effective as
possible for the users of the database?
Secretary Yellen. It has been a key consideration since the
outset, and I would be glad to give you a briefing on what
FinCEN is doing on that front. Thank you.
Chairwoman Waters. The gentlewoman's time has expired.
The gentleman from Ohio, Mr. Gonzalez, is now recognized
for 5 minutes.
Mr. Gonzalez of Ohio. Thank you, Madam Chairwoman, and
thank you, Madam Secretary, for being here today.
I want to jump right into some China, World Bank, debt-trap
diplomacy questions, if I could. When we think about the
developing world and how we can help them develop their
economies responsibly and sustainably, in many instances,
countries in the developing world are choosing between
different financing packages. Way too often, they are choosing
China and the usurious terms that come along with that. From a
tools standpoint, what do we need, either at the IFIs or the
DFC, to have more competitive offerings for the developing
world so that they are choosing our packages over China's, and/
or are we even at the table when these conversations are taking
place?
Secretary Yellen. I think we need the Multilateral
Development Banks to be adequately financed so they have the
capacity to offer sufficient financing. There is an enormous
need for infrastructure investment throughout the developing
world. Countries are starved for the resources, and many don't
have access to private capital markets.
Mr. Gonzalez of Ohio. Just to interrupt quickly, is it your
contention that these banks are not funded appropriately, like
the World Bank, the IMF? They do not have adequate capital to
make competitive offerings, is that what you are suggesting?
Secretary Yellen. In some cases, they are adequately
funded. In other cases, there probably is a need for additional
resources. We ourselves are in arrears, substantial arrears, in
terms of meeting our own commitments and in terms of trying to
generate new commitments. For example, we feel very strongly
that the IMF's new Resilience and Sustainability Trust can make
an important contribution to energy security and to pandemic
preparedness, and Congress hasn't given us the authority to
lend money to that. If the United States wins, we believe it
could catalyze $100 billion from a group of countries.
Mr. Gonzalez of Ohio. Got it. One of the issues I have been
working on since I got here is Chinese influence at the IFIs,
in particular, the World Bank, where when I have spoken to
previous executive directors of both parties, what you often
hear is that China has essentially bought their influence or
they have more or less bought their votes in various ways, and
it makes it very difficult to defeat anything that China wants.
And as a response, one of the things that I introduced and it
was signed into law was the Accountability for World Bank Loans
to China Act. This law has various reporting requirements but
also requires the Treasury Department to advocate for a prompt
end to World Bank loans to China. China historically blocks
that.
According to Treasury, there has been low progress on this
front. Why has there been low progress, and what should we do?
And do you personally believe China should graduate from the
loan program at the World Bank?
Secretary Yellen. Do I what?
Mr. Gonzalez of Ohio. Do you personally believe China
should graduate from the loan program?
Secretary Yellen. I absolutely do, and we have advocated
for it very strongly.
Mr. Gonzalez of Ohio. Thank you. Another provision within
the enacted legislation is a report to this committee on the
indebtedness of countries to China through the Belt and Road
Initiative, as well as the U.S. effectiveness in promoting debt
transparency at the IMF and the World Bank. In your estimation,
how effectively are we countering China's efforts to engage in
debt trap diplomacy, and how transparent are they, or how have
we done in terms of getting the transparency we need to report
to this committee?
Secretary Yellen. Transparency is very important. It is a
focus of both the IMF and the World Bank, and they have taken
steps. We all have to try to increase transparency, especially
of China's lending to these countries, and we are not where we
need to be on this. China agreed to participate in the common
framework for countries with unsustainable debt, and hasn't
really fully met its obligations there either, and so all of
these are frustrations.
Mr. Gonzalez of Ohio. Thank you. Quickly, I only have 20
seconds left, and I just want to get you back on the record on
something. You mentioned that at present, there is no evidence
that the cryptocurrency markets are being used in major ways by
the Russians to evade sanctions or launder money related to the
Ukraine crisis. Would you just reconfirm that that is in fact
what you said?
Secretary Yellen. We have not seen major use of crypto as a
way of evading sanctions. We will be on the lookout for it. It
is early days, but we have not seen that yet.
Mr. Gonzalez of Ohio. Thank you. I yield back.
Chairwoman Waters. Thank you. The gentlewoman from
Massachusetts, Ms. Pressley, who is also the Vice Chair of our
Subcommittee on Consumer Protection and Financial Institutions,
is now recognized for 5 minutes.
Ms. Pressley. Thank you, Madam Chairwoman. The IMF's
surcharge policy imposes extra, often hidden fees onto
countries with high levels of debt and has been widely
denounced by development experts and civil society
organizations as an unjust burden and a hindrance to our global
economic recovery. Secretary Yellen, these fees are coming at
the worst possible moment, when countries are in the midst of a
deadly global pandemic and in desperate need of humanitarian
assistance and public health services. Are you worried that the
IMF may be undermining the financial welfare stability of the
very places we are trying to support?
Secretary Yellen. I am supportive of the framework that
includes IMF surcharges. They are part of the IMF's risk
mitigation framework. And I see them as critical to protect the
IMF's resources and really making sure that they can play a
critical role as a global lender of last resort. We are going
to rely on the Multilateral Development Banks and the IMF to
provide more resources because of the Russian invasion of
Ukraine, and we need to make sure that the proper mechanisms
are in place, and I think that these surcharges should remain
in place.
Ms. Pressley. Secretary Yellen, respectfully, I disagree,
as do 17 other congressional colleagues who sent a letter to
you, urging you to reconsider in January. In 2009, even before
the pandemic struck, 64 countries spent more resources
servicing foreign debts than they did on healthcare
expenditures for their citizens.
Okay, moving on, given that Egypt and Armenia have
vaccinated less than 50 percent of their population, is it fair
to say that the money these countries are paying in surcharge
fees would be better spent on, say, vaccinating their people or
addressing poverty?
Secretary Yellen. Clearly, there are many countries that
require resources to address the pandemic, to address downturns
in their economy and the adverse impacts of the economy and of
the current global situation. And the IMF, and the World Bank,
and other MDBs are providing those resources that are very much
needed. So, I think this surcharge issue is separate and is a
risk mitigation, a policy that is appropriate.
Ms. Pressley. I think the detrimental impacts of these fees
and its governments' abilities to effectively combat the
pandemic is not really up for debate. But since you are not
willing to go on record in saying that you would suspend these
fees, would you at least be willing to go on record and say
that you would review this surcharge policy, at least a review
of it, some consideration, given the detrimental impacts?
Secretary Yellen. We can look at it, and meet with you to
discuss this issue, if that would be helpful.
Ms. Pressley. Absolutely. I look forward to that, and we
will follow up. Thank you, Madam Secretary. And we have to do
everything in our power to end the global pandemic, including
eliminating surcharges. Thank you. I yield.
Chairwoman Waters. Thank you. The gentlelady yields back.
I would now like to thank Secretary Yellen for her
testimony today.
The Chair notes that some Members may have additional
questions for this witness, which they may wish to submit in
writing. Without objection, the hearing record will remain open
for 5 legislative days for Members to submit written questions
to this witness and to place her responses in the record. Also,
without objection, Members will have 5 legislative days to
submit extraneous materials to the Chair for inclusion in the
record.
With that, this hearing is adjourned.
[Whereupon, at 1:02 p.m., the hearing was adjourned.]
A P P E N D I X
April 6, 2022
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