[Senate Hearing 117-165]
[From the U.S. Government Publishing Office]


                                                        S. Hrg. 117-165

               ANTICIPATED NOMINATION OF JANET L. YELLEN

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

                                 HEARING

                               BEFORE THE

                          COMMITTEE ON FINANCE
                          UNITED STATES SENATE

                    ONE HUNDRED SEVENTEENTH CONGRESS

                             FIRST SESSION

                                 ON THE

                       ANTICIPATED NOMINATION OF

      JANET L. YELLEN, TO BE SECRETARY, DEPARTMENT OF THE TREASURY

                               __________

                            JANUARY 19, 2021

                               __________

                                     
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            Printed for the use of the Committee on Finance

                              __________
 
                    U.S. GOVERNMENT PUBLISHING OFFICE                    
46-951 PDF                 WASHINGTON : 2022                     
          
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                          COMMITTEE ON FINANCE

                     CHUCK GRASSLEY, Iowa, Chairman

MIKE CRAPO, Idaho                    RON WYDEN, Oregon
PAT ROBERTS, Kansas                  DEBBIE STABENOW, Michigan
MICHAEL B. ENZI, Wyoming             MARIA CANTWELL, Washington
JOHN CORNYN, Texas                   ROBERT MENENDEZ, New Jersey
JOHN THUNE, South Dakota             THOMAS R. CARPER, Delaware
RICHARD BURR, North Carolina         BENJAMIN L. CARDIN, Maryland
ROB PORTMAN, Ohio                    SHERROD BROWN, Ohio
PATRICK J. TOOMEY, Pennsylvania      MICHAEL F. BENNET, Colorado
TIM SCOTT, South Carolina            ROBERT P. CASEY, Jr., Pennsylvania
BILL CASSIDY, Louisiana              MARK R. WARNER, Virginia
JAMES LANKFORD, Oklahoma             SHELDON WHITEHOUSE, Rhode Island
STEVE DAINES, Montana                MAGGIE HASSAN, New Hampshire
TODD YOUNG, Indiana                  CATHERINE CORTEZ MASTO, Nevada
BEN SASSE, Nebraska

             Kolan Davis, Staff Director and Chief Counsel

              Joshua Sheinkman, Democratic Staff Director

                                  (ii)


                            C O N T E N T S

                              ----------                              

                           OPENING STATEMENTS

                                                                   Page
Grassley, Hon. Chuck, a U.S. Senator from Iowa, chairman, 
  Committee on Finance...........................................     1
Wyden, Hon. Ron, a U.S. Senator from Oregon......................     3

                         CONGRESSIONAL WITNESS

Feinstein, Hon. Dianne, a U.S. Senator from California...........     6

                         ADMINISTRATION NOMINEE

Yellen, Hon. Janet L., Ph.D., Secretary-Designate, Department of 
  the Treasury, Washington, DC...................................     7

               ALPHABETICAL LISTING AND APPENDIX MATERIAL

Feinstein, Hon. Dianne:
    Testimony....................................................     6
Grassley, Hon. Chuck:
    Opening statement............................................     1
    Prepared statement...........................................    51
Wyden, Hon. Ron:
    Opening statement............................................     3
    Prepared statement with attachment...........................    52
Yellen, Hon. Janet L., Ph.D.:
    Testimony....................................................     7
    Prepared statement...........................................    54
    Biographical information.....................................    55
    Responses to questions from committee members................    73

                                 (iii)

 
                   ANTICIPATED NOMINATION OF JANET L.
                        YELLEN, TO BE SECRETARY,
                       DEPARTMENT OF THE TREASURY

                              ----------                              


                       TUESDAY, JANUARY 19, 2021

                                       U.S. Senate,
                                      Committee on Finance,
                                                    Washington, DC.
    The hearing was convened, pursuant to notice, at 10:16 
a.m., in Room SD-106, Dirksen Senate Office Building, Hon. 
Chuck Grassley (chairman of the committee) presiding.
    Present: Senators Crapo, Cornyn, Thune, Portman, Toomey, 
Scott, Cassidy, Lankford, Daines, Young, Sasse, Wyden, 
Stabenow, Cantwell, Menendez, Carper, Cardin, Brown, Bennet, 
Casey, Warner, Whitehouse, Hassan, and Cortez Masto.
    Also present: Republican staff: Nicholas Wyatt, Tax, 
Infrastructure, and Nominations Policy Advisor. Democratic 
Staff: Michael Evans, Deputy Staff Director and Chief Counsel; 
Ian Nicholson, Investigator; Joshua Sheinkman, Staff Director; 
David Berick, Chief Investigator; and Peter Gartrell, 
Investigator.

 OPENING STATEMENT OF HON. CHUCK GRASSLEY, A U.S. SENATOR FROM 
              IOWA, CHAIRMAN, COMMITTEE ON FINANCE

    The Chairman. Today, we welcome the Honorable Janet Yellen 
to consider an anticipated nomination for her to become 
Secretary of the Treasury.
    The role of Treasury Secretary covers responsibilities over 
a large number of issues, including taxes; fiscal management, 
including the debt; financial sanctions; and economic policies. 
The Treasury Secretary also serves as Chair of the Financial 
Stability Oversight Council, which has wide-ranging financial 
oversight and regulatory authorities. Dr. Yellen has a history 
in academics, think tanks, the Federal Government, and at the 
Federal Reserve.
    This hearing takes place in the midst of an ongoing 
pandemic, along with significant divisions in Congress and in 
the Nation. I hope we can move away from partisan divisiveness 
and personalized attacks against each other. Dr. Yellen, if 
confirmed, you can be instrumental in helping generate an 
environment for bipartisan efforts and reasoned debate.
    You have expressed that you have interest in aggressively 
pursuing mitigation efforts toward climate change, which you 
see as a global existential threat. The incoming administration 
has also identified interest in raising taxes, coupled with 
massive spending programs, and working to reduce income 
inequality. And Senator Schumer has said that he'd like to 
change America. I'll be interested in hearing more about those 
and other things as we continue to consider your nomination.
    As I've already indicated to you, I think it would be a big 
mistake to raise taxes on individuals and businesses as they 
struggle through an economic recovery and a pandemic. I know 
that the incoming administration has said they'd like to pursue 
a two-pronged strategy, with a massive stimulus followed by tax 
hikes, coupled with even more spending, maybe on 
infrastructure. We are already closely examining President-
elect Biden's proposal for around $1.9 trillion of stimulus, 
which even some prominent Democrat economists have said does 
not seem to be well-targeted. With the trillions already in the 
pipeline, and close to $1 trillion of relief enacted just a few 
short weeks ago, it is important to focus efforts on pandemic 
relief. Now is not the time to enact a laundry list of liberal 
structural economic reforms. Dr. Yellen, if you are confirmed, 
I hope that you will work with us on the proposal.
    Moving forward, President-elect Biden has stated numerous 
times that no one making under $400,000 would see their taxes 
raised. For example, last year on CNBC President-elect Biden 
stated what we can think of as the new Biden Rule that, quote, 
``nobody making under 400,000,'' and he said ``bucks, would 
have their taxes raised, period,'' end of quote.
    While I do not think we need to be raising taxes, I will 
pay close attention to see that the incoming administration 
abides by that new Biden Rule and does not go after taxing 
small businesses and the middle class.
    On my part, let me tell you that I believe in free and fair 
trade, both internationally and domestically. International 
trade is important to American businesses, and especially 
important to the agricultural sector and the farmers across 
America. I will make sure that the incoming administration does 
not overlook the importance of agriculture or the interests of 
rural America.
    I am against foreign countries trying to tap into the U.S. 
tax base with unilateral digital services taxes under their 
self-
proclaimed ``rights'' to invade our tax base. They do not have 
that right.
    I do not support socialism, or Marxism, or so-called 
democratic socialism that would end with command-and-control 
policies. I also do not support any rapid or drastic wiping out 
of industries and their workers based mostly on ideology and 
often on misleading analyses, with some notion of taking care 
of the carnage through massive government income and wealth 
redistribution.
    Prior to the pandemic, although there were economic and 
structural challenges to the economy, we saw a very historic 
50-year low in unemployment rates, record lows in gaps between 
minority unemployment and the overall unemployment rate, 
inclusive growth with real wages growing faster for lower 
earners, record highs in real median household income, stronger 
median income growth for minorities than others, and reductions 
in income inequality and poverty.
    Although those were goals of Democrats, we did not hear 
much about the accomplishments from members of the other party. 
Those accomplishments came about in an environment in which tax 
burdens were lowered and made more progressive, and regulation 
was made more efficient.
    Instead of welcoming the accomplishments, we have heard 
from the other side that we need to change America. I would 
like to see us continue with the accomplishments we saw prior 
to the pandemic.
    Now let me close with a comment on transparency. This 
committee has traditionally expressed bipartisan interest in 
reminding all nominees who come before this committee that 
transparency is important for our members. That means that I 
expect that you will respond to inquiries from any Senator on 
this committee no matter on which side of the aisle they sit. 
Prompt and thorough responses to our inquiries and 
investigations are what we expect.
    With that now, Senator Wyden?
    [The prepared statement of Chairman Grassley appears in the 
appendix.]

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

    Senator Wyden. Thank you very much, Mr. Chairman.
    I want to begin, Chairman Grassley, by thanking you and 
Senator Crapo for the help in scheduling Chair Yellen's hearing 
this morning. And, Senator Grassley, I also want to thank you 
for joining me last week in exposing the pharmaceutical 
companies' insulin price-gouging scheme. America knows that 
they are getting mugged at the pharmacy counter. Now this 
committee can use a fresh investigation that helps lay out a 
plan to finally end one of the all-time big anti-consumer rip-
offs, which is what is going on with insulin.
    Mr. Chairman, I thank you for that. Now to turn to Chair 
Yellen.
    This is the second time in 12 years that a Republican 
President leaves the office with the economy in ruin. Today, 
there is also a surging pandemic and armed troops guarding our 
Capitol from far-right insurrectionist attack.
    The Biden administration is not going to begin with 
inaugural balls. It is going to begin with all-out triage. My 
top economic priority is avoiding the mistake Congress made in 
the last recession, which was taking a foot off the gas pedal 
before recovery took hold. Congress did not do enough in 2009 
to help the unemployed and struggling homeowners. And if 
stepping off the gas was not bad enough, 2 years later House 
Republicans passed policies that yanked out the spark plugs and 
let the air out of the tires as well.
    In Oregon, it took 7\1/2\ years for unemployment to return 
to its pre-recession level. That cannot happen again, or else 
millions and millions of people will go through years of 
needless hardship. Some will never recover the lives that they 
had prior to the pandemic.
    Unemployment is again rising. Federal Reserve data shows 
that workers of modest income are facing Great Depression-level 
joblessness. One out of five are out of work. And Donald Trump 
repeatedly pressed a false and manipulative choice between 
public health and economic recovery, and now America has 
neither.
    The good news is Chair Yellen knows that going small on 
economic relief would be a big mistake. Chair Yellen is exactly 
the right person to lead the Treasury Department. Nobody could 
be better qualified for this job. And, Mr. Chairman, I would 
ask unanimous consent at this point to put into the record a 
letter signed by eight former living Treasury Secretaries 
urging swift confirmation of Janet Yellen.
    The Chairman. Without objection, so ordered.
    [The letter appears in the appendix on p. 54.]
    Senator Wyden. Thank you, Mr. Chairman.
    And I just say to my colleagues, all of those Treasury 
Secretaries do not just come together by osmosis. They believe 
deeply in the challenge ahead of us in this country, and they 
all think Janet Yellen is up to the job. And nobody deserves 
more credit than Chair Yellen for the longest economic 
expansion that we have seen in our history, which lasted until 
the pandemic hit.
    Federal Reserve Chair Yellen changed decades of 
conventional economic wisdom that put too much focus on 
inflation and deficits. She was correct that policymakers 
should focus more on wages, employment, and inequality, and 
that the economy safely could run a little hotter.
    Now, she took some heat at the time from Republicans, but 
later they tried to attribute Janet Yellen's success to the 
outgoing administration. But the numbers show the successes of 
Chair Yellen's approach. Unemployment went down. Wages went up. 
And a lot of working Americans were better off than they were 
before.
    Who better to lead the Treasury Department and help kick 
off the next economic expansion than the person who did so much 
to bring about the last one? Right out of the gate, the Biden 
administration and Congress need to send major relief to 
America's working families. That means increasing relief checks 
to $2,000. And it means extending enhanced unemployment 
benefits to all of those who have lost their jobs through no 
fault of their own.
    At Mitch McConnell's insistence, the December economic 
package reduced unemployment benefits from the CARES Act and 
extended them only until the middle of March. There are 
groceries in my refrigerator that are going to last longer than 
Mitch McConnell's unemployment agenda.
    Now this has been a common story, a common story of 
Washington letting key economic lifelines expire. They get 
extended. They expire. They get extended. Congress cannot go on 
with this snooze-button legislating. Our workers and our 
economy need a government that is predictable and reliable. 
That means the Congress needs to tether the extension of 
unemployment benefits to economic conditions on the ground, 
with automatic triggers. Those benefits should not be subject 
to the whim of one elected official.
    The tattered patchwork of State unemployment insurance 
systems also needs fixing. My home State of Oregon saw this 
when the COVID crash hit. In other cases, it was because of 
Republican lawmakers having intentionally hobbled unemployment 
insurance programs. Workers suffer because of it, particularly 
black and Hispanic workers. Congress needs to reform the 
program, which I think should include bringing all workers into 
the system, increasing base benefits, and ensuring that it can 
hold up in a crisis.
    Also, part of our work has to involve fixing America's 
broken-down, dysfunctional tax code. And to me, it has to start 
with the proposition that corporations, millionaires, and 
billionaires all have to pay their fair share. I am developing 
a proposal to reform the taxation of capital gains for the top 
three-tenths of 1 percent of taxpayers. My plan would tax 
wealth like work, and it would minimize the ability of those 
who are particularly well-off and have all the accountants and 
all the lawyers to just defer, and defer, and defer paying 
their taxes.
    If you are a nurse--and I was just home for the last close 
to 10 days with virtual town halls, and talking to folks in a 
socially distanced way, and one of the things I discussed is, 
if you are a nurse in Oregon taking care of COVID patients, you 
have to pay taxes with every paycheck. You do not get to defer 
your taxes if you are a nurse treating COVID patients. But if 
you are a billionaire, you can defer, and defer, and defer 
paying taxes and, in many instances, figure out a way to pay 
nothing at all.
    My plan would put a stop to that unfairness, and the 
revenue would help preserve the Social Security guarantee for 
decades to come with additional funds for other priorities.
    Now, the outgoing administration had a different approach. 
They were big on corporate tax giveaways, and they actually 
increased incentives to ship jobs overseas instead of 
eliminating them. I want those mistakes fixed.
    Before I wrap up, I want to turn to an existential threat 
for, particularly our kids and our grandkids, and that is 
climate change. The Treasury Department is going to have a key 
role to play on these climate issues.
    Much of America's energy policy is tax policy. Having 
worked with my friend from Washington State, Senator Cantwell, 
we know there are now 44 energy tax breaks on the books. And 
some of them look like they just came from yesteryear.
    I have a bill to replace these 44 breaks with 3 that go 
right to the heart of a new set of priorities: reducing carbon 
emissions and promoting innovation. The three are for clean 
electricity, clean transportation, and energy conservation. I 
am also developing a proposal that would make polluters pay for 
the cost of climate change, with much of the revenue returned 
directly to the American people through annual cash payments.
    The Treasury Department plays a big role--as Chairman 
Grassley noted--in trade. Over the last 4 years the American 
people got a lot of tough talk about trade, but there was a big 
gap between the tough talk and delivering on the big promises.
    This administration drove away our economic allies. It 
actually isolated us in the crucial fight against trade cheats 
in China and elsewhere. Members of this committee are also 
concerned about currency manipulation and other tactics that 
rip off high-skill, high-wage jobs at a time when wage growth 
has got to be right at the top of our economic agenda.
    I am looking forward to working with Secretary Yellen on 
all these issues, and more. And I certainly hope--and Chairman 
Grassley and I have been talking about it--that with her 
stellar, extraordinary qualifications, we can get her 
nomination approved as quickly as possible. And it seems to me, 
with the economic crunch we are facing, it ought to be approved 
on Day One.
    Now I will close by saying everybody has a constitutional 
right to be foolish, but nobody can question Chair Yellen's 
qualifications. This country has never had a woman as Treasury 
Secretary. What a shame. Anybody who doubts Chair Yellen's 
commitment to policies that give everybody a chance to get 
ahead, just has not been paying attention.
    So, colleagues, I look forward to working with all the 
members, Democrats and Republicans, throughout this session. 
And I think it is very appropriate that we begin with the 
consideration of a person who is so extraordinarily qualified, 
and who I very much appreciate being willing to return to 
public service. President-elect Biden could not have made a 
better choice, colleagues, than Janet Yellen.
    Thank you, Mr. Chairman.
    The Chairman. Thank you.
    [The prepared statement of Senator Wyden appears in the 
appendix.]
    The Chairman. The chair now recognizes and welcomes Senator 
Feinstein from California, for the purposes of introduction.

              STATEMENT OF HON. DIANNE FEINSTEIN, 
                 A U.S. SENATOR FROM CALIFORNIA

    Senator Feinstein. And I thank the chair. Thank you very 
much, Senator, and other Senators. It is just fine to be here 
this morning.
    I have known Janet since she became President of the 
Federal Reserve Bank of San Francisco in 2004. She has been 
professor, and now emeritus at the University of California, 
Berkeley since 1980--that is 40 years.
    Janet has an impressive record. She served twice on the 
Federal Reserve Board of Governors and was the first woman to 
chair the Fed from 2014 to 2018. She also served as Chair of 
the Council of Economic Advisors under President Clinton, and 
she is currently professor emeritus at the University of 
California, Berkeley, as well as a distinguished fellow at the 
Brookings Institution.
    Some have joked that Janet's husband of 42 years, George, 
won the Nobel Prize in Economic Sciences, yet he is regarded by 
many as the second most accomplished economist in his own home. 
But it can be said that all of these accomplishments did not 
come easily for a women in the male-dominated field of 
economics.
    Out of 24 students who received doctorates in economics at 
Yale in 1971, Janet was the only woman. And she has been a 
trailblazer her entire career. Now she brings to us the 
experience and leadership needed at Treasury at this critical 
juncture.
    I believe that Janet Yellen really understands that the 
economy is not an abstract series of charts and figures, but a 
collection of real individuals, families, communities, 
problems, and businesses that need help. And these are the many 
reasons that Janet received bipartisan praise when President-
elect Biden announced her nomination in December.
    For one, her deep policy expertise matches her 
understanding of the impact of economic policy on people. She 
is also a pragmatic and steady hand who recognizes the need for 
fiscal discipline. In short, she is the ideal candidate to head 
Treasury at a time when we can afford nothing less.
    So I urge and hope that this committee will rapidly approve 
her nomination, and I thank you for the privilege, Mr. 
Chairman. Thank you.
    The Chairman. Thank you, Senator Feinstein.
    I want to go back to Senator Wyden, because he asked to 
speak on another point, before I got to Dr. Yellen.
    Senator Wyden. Mr. Chairman, just on your point earlier, 
because we need to get to Chair Yellen, I very much share your 
view with respect to transparency. You and I have worked on 
those issues.
    I also want to put on the record that the Treasury's record 
over the past 4 years on this was dismal, on things like 
FinCEN. It has got to do better, but do it in a bipartisan way. 
Thank you.
    The Chairman. Thank you very much.
    Now, I did not congratulate Dr. Yellen on her appointment. 
I do that now, and ask her to make her opening statement.

      STATEMENT OF HON. JANET L. YELLEN, Ph.D., SECRETARY-
     DESIGNATE, DEPARTMENT OF THE TREASURY, WASHINGTON, DC

    Dr. Yellen. Chairman Grassley, Ranking Member Wyden, 
members of the committee, it is an honor to appear before you. 
And, Senator Feinstein, thank you for that very kind 
introduction.
    Senator Feinstein. You are welcome.
    Dr. Yellen. I have immense respect for the task before this 
committee: rebuilding the American economy from the sharpest 
downturn in history. If I am fortunate enough to be confirmed, 
I would strive to be a good partner in that work. I have spent 
almost my entire life thinking about economics and how it can 
help people during hard times.
    My father was a doctor in Bay Ridge, Brooklyn. It was more 
of a working-class neighborhood back then. His patients would 
take the bus from their jobs at factories or docks, and they 
would come to our stoop, because that is where my dad's office 
was, in our basement.
    He was the kind of doctor who treated the whole patient. He 
knew about their lives, about when they had been fired or could 
not pay. Those remain some of the clearest moments in my 
childhood.
    My parents had been children of the Depression, and they 
had a visceral reaction to economic hardship. Economics is 
sometimes considered a dry subject, but I have always tried to 
approach my science the same way my father approached his: as a 
means to help people.
    And this committee, I believe, has viewed it the same way, 
especially during these last few months. When economists look 
back on the pandemic, I expect they will conclude that 
Congress's actions averted a lot of suffering. But more must be 
done. Economists do not always agree, but I think there is a 
consensus now that without further action, we risk a longer and 
more painful recession now, and longer-term scarring of the 
economy later.
    The pandemic has caused widespread devastation. Whole 
industries have paused their work. Eighteen million 
unemployment insurance claims are being paid every week. Food 
bank shelves are going empty. The damage has been sweeping. And 
as the President-elect said last Thursday, our response must be 
too.
    Over the next few months, we are going to need more aid to 
distribute the vaccine, to reopen schools, to help States keep 
firefighters and teachers on the job. We will need more funding 
to make sure unemployment insurance checks still go out, and to 
help families who are at risk of going hungry or losing the 
roof over their heads.
    Neither the President-elect nor I propose this relief 
package without an appreciation for the country's debt burden. 
But right now, with interest rates at historic lows, the 
smartest thing we can do is act big. In the long run, I believe 
the benefits will far outweigh the costs, especially if we care 
about helping people who have been struggling for a very long 
time.
    People worry about a K-shaped recovery, but well before 
COVID-19 infected a single American, we were living in a K-
shaped economy, one where wealth built upon wealth, while 
working families fell farther and farther behind. This is 
especially true for people of color.
    At the Fed, I became accustomed to the institution's dual 
mandate: to promote stable prices and maximum employment. As 
Treasury Secretary, I think there will be a dual mission too: 
helping Americans endure the final months of this pandemic and 
keeping people safe while getting them back to work. That is 
our first task. But then there is the longer-term project. We 
have to rebuild our economy so that it creates more prosperity 
for more people and ensures that American workers can compete 
in an increasingly competitive global economy.
    Members of the committee, these are very ambitious goals, 
and I know we will need to work together. You can count on me 
to do that in a bipartisan way.
    My husband and son are watching us on C-SPAN from the other 
room. They are not only wonderful people, they are also 
wonderful and opinionated economists themselves. So I am used 
to debate about these issues in the house, and I would welcome 
it in the Senate.
    Thank you. I look forward to your questions.
    [The prepared statement of Dr. Yellen appears in the 
appendix.]
    The Chairman. Thank you, Dr. Yellen. Before I go to 
questioning, I have four obligatory questions that we ask all 
nominees before this committee. And they are usually stated in 
exactly the same way.
    First, is there anything that you are aware of in your 
background that might present a conflict of interest with the 
duties of the office to which you have been nominated?
    Dr. Yellen. No, Senator Grassley, I do not believe I have 
any conflict of interest.
    The Chairman. Okay. Do you know of any reason, personal or 
otherwise, that would in any way prevent you from fully and 
honorably discharging the responsibilities of the office to 
which you have been nominated?
    Dr. Yellen. No, I do not.
    The Chairman. Do you agree, without reservation, to respond 
to any reasonable summons to appear and testify before any duly 
constituted committee of the Congress, if you are confirmed?
    Dr. Yellen. I will testify, if they ask, before any 
committee of Congress.
    The Chairman. And finally, do you commit to providing a 
prompt response in writing to any questions addressed to you by 
any Senator of this committee?
    Dr. Yellen. Yes, I commit to that.
    The Chairman. In regard to that last one, I hope--I think 
Senator Biden, as Senator, would agree with me that when the 
Trump administration first came in, they issued some sort of a 
regulation that they were going to only answer questions for 
committee chairmen. We finally got them off of it. I do not 
know whether they answered every question of every Senator or 
not--they probably did not--but I hope that we do not hear that 
from this administration, that you have to be chairman of a 
committee to get an answer to your question.
    Before I ask the first question--but it is kind of along 
the lines of the question I was going to ask you--I just heard 
your opening comment about learning so much from your father 
about the workers of America and about the business of America. 
I hope you will continually remind people that you have that 
background, and that you take it into consideration every 
opportunity you can. Because I think people think you, being in 
public service for such a long time, may have forgotten that, 
just like I think a lot of people think that, after Chuck 
Grassley has been in the United States Senate for 40 years, he 
has forgotten the 10 years he spent on the assembly line with 
the workers of Iowa. And it is important that they be reminded 
of these backgrounds.
    Dr. Yellen, how will you work at Treasury to ensure that 
the interests of American workers and businesses in rural 
America are not ignored?
    Dr. Yellen. Senator Grassley, thank you for that question. 
It will be my core focus, if I am confirmed as Treasury 
Secretary, to focus on the needs of America's workers, those 
living in cities and in rural areas, and to make sure that we 
have a competitive economy that offers good jobs and good 
wages. And I really look forward to working with President-
elect Biden and his team, first to address the critical issues 
we face as a country now with the pandemic causing such misery 
for so many small businesses that have failed or are at risk of 
failing and need our help, and the unemployed workers who have 
been so badly affected by the impact of the pandemic, 
especially in the service sector.
    It has disproportionately hit the service sector and the 
workers who are employed in that sector, and it has been 
particularly brutal in its impacts on minorities and on women. 
And I will be focused from Day One on providing support to 
America's workers and to small businesses, putting into effect 
as quickly and efficiently as I can the relief in the bill that 
was recently passed and then, over time, working for a second 
package that I think we need to get through these dark times 
before the vaccination program enables us to go back to life as 
we knew it. But over time, I look forward to working with 
President-elect Biden and his team to build back better, and to 
address many of the challenges that have faced America and that 
have had such an adverse impact on America's workers and small 
businesses.
    We need to invest in our infrastructure. We need to invest 
in R&D. We need to invest in training and workforce 
development, so that we have an economy that is productive and 
competitive, and workers and families can thrive.
    The Chairman. Thank you very much for that answer. That was 
kind of a shotgun approach to questioning. I now have a rifle 
approach.
    Democrats have been arguing for repeal of the $10,000 cap 
on State and local tax deductions, often referred to as SALT, 
even as part of a pandemic relief effort. Yet, even left-
leaning commentators such as the Tax Policy Center point out 
that a SALT repeal would provide the top one-tenth of 1 percent 
of households with an average tax cut of about $144,000, with 
essentially no benefit going to the bottom half of the 
household earners.
    Do you think it makes sense for the pandemic relief efforts 
to prioritize six-figure tax cuts for the wealthiest few, when 
millions of middle-class American families are struggling to 
make ends meet? And would you oppose including a repeal of the 
SALT cap in any further relief or stimulus measure?
    Dr. Yellen. Senator Grassley, thank you for that question. 
I certainly believe in a fair and progressive tax code where 
wealthy individuals and corporations pay their fair share. This 
deduction--the SALT deduction--was eliminated only a few years 
ago. And before making a decision about what should be done 
going forward, I think it is critical to study and evaluate 
what the impact has been on State and local governments and 
their ability to provide critical services. And I promise to 
work with those at Treasury and throughout the administration 
in evaluating what impact that has had on States and local 
governments, on households, on small businesses, and study this 
issue further.
    The Chairman. I have to go to Senator Wyden now. My next 
question would have dealt with an issue that he and I have 
worked very closely on in regard to the unfair digital services 
tax that we see other companies putting on our country, and I 
will submit questions like that for answer in writing.
    Go head, Senator Wyden.
    Senator Wyden. Thank you, Mr. Chairman. And, Chair Yellen, 
great to have you in the virtual house. I am going to see if I 
can cover a fair amount of ground quickly.
    I think we all understand that the country has been hit by 
an economic wrecking ball. And so my first question to you 
would be, what economic policies will give Americans the 
biggest bang for the buck in the immediate term?
    Dr. Yellen. Well, I think relief that we provide to those 
who are in the greatest need, and to small businesses, has the 
best chance of providing both relief to those who have been so 
badly affected by the pandemic and creating a great deal of 
spending per dollar spent, which will create jobs throughout 
the economy, having the biggest bang for the buck.
    So I see, for example, extended unemployment insurance, 
SNAP benefits, and so forth, as having a very large bang for 
the buck. Of course, in a way, the biggest bang for the buck 
comes from the money we spend on public health to make sure 
that we have widespread vaccinations quickly, so schools can 
reopen, and so we can get past the pandemic and reopen 
businesses and the economy safely and avoid scarring that will 
occur if there is permanent job loss.
    Senator Wyden. Good. I also appreciate your comment with 
respect to extended unemployment, because that is one of the 
policies that allows us in the future, in terms of reforms, to 
tie benefits to economic conditions on the ground so it gives 
you time to fully get us to that longer-term economic recovery. 
So that is very helpful.
    The second question I want to talk to you about is China, 
because we all understand that China's cheating has taken a 
huge toll on our workers, and particularly on creating more 
high-paying jobs.
    Now I think that the President-elect is absolutely on the 
right course, saying he is going to mobilize the allies to work 
with us in terms of dealing with China. That is going to take a 
little bit of time. So what I would like to hear from you again 
is, in the near term, what do you believe you can do, perhaps 
your first couple of steps, to start to mobilize our country to 
make sure that workers get a fair shake in view of all this 
China economic cheating?
    Dr. Yellen. Well, China is clearly our most important 
strategic competitor. As you said, we need to work with allies. 
We also need to strengthen our own economy so that we can 
compete. And 
President-elect Biden will soon come forward with a package to 
accomplish that by investing in our infrastructure, investing 
in our people, and creating a more competitive economy in 
research and development.
    We need to take on China's abusive, unfair, and illegal 
practices. China is undercutting American companies by dumping 
products, erecting trade barriers, and giving illegal subsidies 
to corporations. It has been stealing intellectual property and 
engaging in practices that give it an unfair technological 
advantage, including forced technology transfers. And these 
practices, including China's low labor and environmental 
standards, are practices that we are prepared to use the full 
array of tools to address. Of course it is important over time 
to work with our allies.
    Senator Wyden. Very good. I am going to see if I can get 
two other questions in and go maybe 30 seconds over, like the 
chairman. You heard me talk with respect to climate change, 
about refocusing our tax code so we can really zero in on 
eliminating carbon emissions.
    Can you give us one step that you think you could begin 
with to tackle this climate question?
    Dr. Yellen. Well, this is one of the most critical issues 
facing our country and the world. And it poses an existential 
threat. It will be a focus of President-elect Biden and his 
entire administration.
    The infrastructure plan that President-elect Biden will 
come forward with will involve investing in clean technology, 
renewable energy, and promoting the use of electric vehicles. 
And in the process of addressing this very significant 
challenge, there is also the opportunity of creating good jobs 
in the process. And that will be a benefit.
    Treasury will cooperate by looking at ways that we can 
direct investment, enabling private firms to have the 
information they need to support sustainable investing.
    Senator Wyden. One last question, very quickly. The Wall 
Street Journal is reporting on your comments to affirm the 
United States's commitment to a market-determined exchange 
rate, if you are confirmed.
    Well, obviously Americans are interested in your thoughts 
on the dollar. Could you briefly outline for the committee your 
thoughts on the dollar?
    Dr. Yellen. Thank you, Senator Wyden. I believe in a strong 
and equitable U.S. economy that delivers good jobs with rising 
wages for all Americans. Maintaining confidence in the long-
term strength of the U.S. economy, and the stability of the 
U.S. financial system, is good for America, as well as our 
trading and investing partners.
    I look forward to working with Congress to make the U.S. 
economic recovery as strong as possible. I believe in market-
determined exchange rates. The value of the U.S. dollar and 
other currencies should be determined by markets. Markets 
adjust to reflect variations in economic performance and 
generally facilitate adjustments in the global economy.
    The United States does not seek a weaker currency to gain 
competitive advantage. And we should oppose attempts by other 
countries to do so. The intentional targeting of exchange rates 
to gain commercial advantage is unacceptable.
    If confirmed, I will work to implement the President-
elect's promise to oppose any and all attempts by foreign 
countries to artificially manipulate currency values to gain an 
unfair advantage in trade.
    Senator Wyden. Thank you, Mr. Chairman.
    The Chairman. I am going to turn the gavel over to Senator 
Crapo. He will be the next person to ask questions. The 
Republicans have a rule that you can only be chairman of the 
committee for 6 years, and so this could be my last hearing as 
chairman of the committee. And it has been a great privilege to 
chair one of the most important committees in Congress.
    I first joined this committee in 1981 during the 102nd 
Congress and became chairman briefly in 2001, before the switch 
in party membership changed the balance. And then I chaired it 
two times since. I will continue to serve on this committee of 
course, but leading this committee has been one of the 
highlights of my years in the Senate.
    Once the Senate organizes, Ranking Member Wyden will become 
chairman. But as I turn the gavel over to Senator Crapo, I know 
this committee will be in the good hands of Senator Wyden and 
Senator Crapo over the next 2 years.
    Thank you very much. Senator Crapo?
    Senator Crapo. Well, thank you very much, Senator Grassley.
    I want to commend him, even though he just stepped out of 
the room, for his great service, and for the opportunity to 
serve under his leadership as the chairman.
    I will just take a brief moment here to say Senator Wyden 
and I have worked together for years on a bipartisan basis and 
have built a lot of really big successes. I look forward to 
working with you, Senator Wyden, as we move forward.
    And, Dr. Yellen, I appreciate your service. I have worked 
with you as well. As you know, when we discussed this a little 
while back, we had a good working relationship while you were 
at the Fed, and I look forward to developing and continuing 
that good working relationship as we move forward.
    My first question is going to be on tax policy. Prior to 
the Tax Cuts and Jobs Act, the TCJA, the United States had one 
of the highest corporate tax rates among developed countries. 
As a part of the TCJA, Congress lowered the corporate tax rate 
to ensure that our domestic businesses could remain globally 
competitive. But even now, the corporate tax rate in America is 
still the 11th highest among developed countries, according to 
the Tax Policy Center.
    As a result of the COVID-19 pandemic, U.S. companies are 
struggling to stay in business and to keep employees on 
payroll. President-elect Biden's proposals include a 
significant increase in the corporate tax rate that would hit 
already vulnerable businesses and put U.S. companies once again 
at a strong competitive disadvantage with the rest of the 
world.
    What is your view of raising taxes on struggling businesses 
during the COVID-19 pandemic?
    Dr. Yellen. Well, thank you for that question, Senator 
Crapo. I too want to say that I both enjoyed my working 
relationship with you during my years at the Fed and look 
forward to a very productive working relationship going 
forward.
    On the 2017 tax cuts, the President-elect has said that 
eventually, as part of a larger package that would include 
significant spending and investment proposals--but not now 
while the pandemic is really depressing the economy--he would 
want to repeal parts of the 2017 tax cuts that benefited the 
highest-income Americans and large companies. And he wants to 
reverse the law's incentives to offshore operations and 
profits.
    But he has been very clear that he does not support a 
complete repeal of the 2017 tax law. There are some areas, 
though, that he would amend. For example, a provision in that 
law had the unfortunate byproduct of rewarding companies for 
moving their operations offshore. And the President-elect would 
reverse that.
    We look forward to actively working with other countries, 
through the OECD negotiations on taxes on multinational 
corporations, to try to stop what has been a destructive global 
race to the bottom on corporate taxation. And in that context, 
we would assure the competitiveness of American corporations, 
even with a somewhat higher corporate tax.
    Senator Crapo. Well, I appreciate that last observation. As 
we discussed on the phone last week, I encouraged you to make, 
as one of your top considerations for any changes to our 
business tax policies, the competitiveness of the U.S. 
businesses and the need to make sure that the United States 
remains an attractive place for investment and capital 
formation and job creation. So I look forward to working with 
you on that.
    Can you explain again your views on the importance of these 
kinds of considerations when assessing potential changes to tax 
policy?
    Dr. Yellen. Well, Senator Crapo, I strongly agree with your 
view that it is necessary for U.S. companies to be globally 
competitive. And that is why these OECD negotiations are so 
important. It would enable us to collect a fair share from 
corporations, while maintaining the competitiveness of our 
businesses, and diminish the incentives that American companies 
now have to offshore activities. That is certainly something we 
do not want to reward.
    Senator Crapo. Well, I look forward to working with you on 
those OECD negotiations and the other aspects of tax policy 
that we just discussed.
    One last quick question. As chairman of the Banking 
Committee, I worked in a bipartisan manner to pass the Foreign 
Investment Risk Review Modernization Act; the Export Control 
Reform Act; and, as part of the NDAA, the Anti-Money Laundering 
Act of 2021.
    The Treasury Department plays a major role in implementing 
these statutes and managing our relationship with China through 
the Office of Terrorism Financing and the interagency process 
for CFIUS and other export control decisions.
    Do you agree to commit to work with me as the Treasury 
Department moves forward on the export control decisions for 
foreign investment and modernizing our anti-money-laundering 
bank secrecy provisions, as well as beneficial ownership rules?
    Dr. Yellen. Senator, you have my pledge that I will work 
closely with you on these very important matters. And I want to 
thank you and Congress for passing a law that will enable us to 
identify an official ownership of shell corporations and really 
make a big difference in our ability to address terrorist 
financing and improve the effectiveness of sanctions.
    Senator Crapo. Thank you. I appreciate your attention to 
this.
    Senator Stabenow is next. I believe she is remote.
    Senator Stabenow. Well, good morning. First I want to say 
``thank you,'' Senator Crapo, to you. Congratulations on your 
incoming position, and also to Senator Wyden, Senator Grassley, 
who I think are off to a great start in the committee, doing 
this in a bipartisan way, and I look forward to a lot more 
opportunities.
    Also, Madam Chair, I have to tell you, as I have indicated 
to you before, I was extremely excited to hear of your 
nomination. I cannot think of anyone with more competence, more 
experience, more integrity, to serve as Secretary of the 
Treasury. And it is just extra special that you come in as the 
first woman to do so. So, congratulations.
    Dr. Yellen. Thank you so much, Senator Stabenow.
    Senator Stabenow. You are welcome.
    Let me first say that I do not believe we have an economy 
unless somebody makes something, and somebody grows something. 
That is what we do in Michigan; we do both. But I want to talk 
about the ``making'' part of it now, as we have talked before, 
and how we have to make more of it in America. And I think 
Michigan certainly is part of leading the way.
    And to tackle the big issue around the climate crisis, as 
well as global leadership in manufacturing and so on, certainly 
electrifying our vehicle fleet is a very important part of 
that.
    So just to refresh, the U.S. auto industry accounts for 
about 3\1/2\ percent of our gross domestic product. And for us 
in the United States, GM is investing heavily in electric 
vehicles, some $27 billion to bring 30 different EVs to the 
marketplace in the next 4 years--very aggressive. Ford is doing 
the same kind of thing. Ford is doing the same with $11.5 
billion, including their electrifying of their F-150 truck. So 
there are very exciting things happening. The same with FCA 
with their popular Jeep line. All good news that we are doing 
that.
    However, when we talk about China, it is not just stealing 
our patents and currency manipulation and other things that I 
have deep concerns about, but what we are seeing is that over 
the last decade the Chinese Government has invested $100 
billion in the EV industry. And what is very concerning is that 
of the 142 lithium ion mega-factories under construction, out 
of 142, 107 of them are in China, and only 9 of them are in the 
United States.
    So it is no surprise that by 2025, 54 percent of the EV 
sales are projected to occur in China. So we have to get ahead 
of this. I know, looking at the Build Back Better plan of our 
President-elect, I know that he cares and you care about this 
as well, but I wonder if you could speak for a moment on what 
we need to do, particularly around the consumer incentives, 
until we get enough people purchasing these. Consumer 
incentives are critical. Senator Alexander and I had a 
bipartisan bill to extend the current consumer credit. This 
needs to get done this year, and Senator Schumer--I am working 
with him on a broader package that is very important to take us 
to the next step in electric vehicles.
    But I wonder if you might talk about what we need to do, or 
do you support the consumer credit that we need to create the 
market for purchasing EVs?
    Dr. Yellen. Thank you for that question, Senator.
    Climate change is a critical problem facing the country, 
and President-elect Biden is committed to a wide range of 
policies to address it, and in the process, making sure that in 
doing that, we create good jobs for American workers. As you 
have suggested, it is important that we make things in America.
    And electric vehicles are a very important way of both 
creating good jobs and addressing climate change. The 
President-elect is supportive of restoring full incentives for 
electric vehicles. He wants to ensure a robust electric vehicle 
market. And on top of that, that will involve building 
infrastructure and making sure that our workers have the skills 
that are needed to succeed in electric vehicles.
    Senator Stabenow. Thank you. Along with that, we know that 
a lot of the jobs in electric vehicles now are the component 
parts. They are mid-sized employers, the auto suppliers in the 
supply chain that is so critical right now, and we are making 
these component parts. And our auto suppliers are very excited 
to do that.
    But I am concerned that with what has happened under COVID 
that the piece that just did not happen as I believe it 
should--and despite Senator Mark Warner, who did such wonderful 
work that I supported and worked with our auto suppliers on to 
deal with our mid-level businesses--we just, I believe, have 
not done fully what we need to do to support those jobs.
    Do you have any thoughts on where we need to go for mid-
level employers that employ about 50 million people in this 
country?
    Dr Yellen. Yes, I think that you are absolutely right, 
Senator Stabenow, that the largest corporations that have 
access to capital markets have not had trouble raising money. 
We have a heavy focus on small businesses, trying to get them 
the aid they need, and mid-sized businesses have had problems. 
The Main Street lending program the Fed set up was not very 
effective at reaching them. And so that is an important area 
for us to focus on, making sure that capital is available for 
those businesses so that they can continue to create jobs and 
thrive in our economy.
    Senator Stabenow. Thank you----
    Senator Crapo. Senator Stabenow----
    Senator Stabenow. I am out of time. I would just--not a 
question, but just, Madam Chair, you and I have talked about 
the multiemployer pension crisis. I am deeply concerned about 
that and the over 1.3 million workers and families who are 
affected. So I look forward to talking with you more and 
developing a way to protect those middle-class Americans.
    Thank you, Mr. Chairman.
    Senator Crapo. Thank you. And I have been notified by staff 
that those who are remote may not have the clock in front of 
them, so I will try to remind those who are remote when their 
time runs out.
    Next is Senator Thune.
    Senator Thune. Thank you, Mr. Chairman.
    Dr. Yellen, welcome. Congratulations. I am going to try and 
roll a lot of thoughts and questions into sort of one big 
package here. But the one thing that concerns me, that nobody 
seems to be talking about anymore, is the massive amount of 
debt that we continue to rack up as a Nation. And in fact the 
President-elect has proposed a couple-trillion-dollar fiscal 
plan on top of that which we have already done, which would add 
somewhere on the order of about $5.3 trillion to the deficit. 
And that is according to the Committee for a Responsible 
Federal Budget, of which you have been a board member.
    That is 25 percent of GDP. And it would move the additional 
debt above 100 percent debt-to-GDP, which are categories that 
we have not been in literally since the 1940s.
    And so what I am concerned about is, we seem to have no 
concern now about borrowing money in the short term, and the 
argument is that interest rates are low, it is like free money. 
It is not. It has to be paid back.
    And at some point, people who are lending us money are 
going to say the risk/return ratio is not sufficient for the 
risk and are going to demand a higher interest rate. That will 
happen at some point. Interest rates will start to normalize 
and we will have to refinance at a higher interest rate. And 
pretty soon the interest on the debt exceeds what we spend on 
even national security for our country.
    Republicans traditionally have believed that we ought to 
reduce spending; that we need to reform entitlement programs; 
that we need to have policies in place that create great growth 
in the economy, all of which make the debt look smaller by 
comparison. Democrats have argued we need more revenue, more 
taxes. And Senator Crapo also already sort of got at that 
issue.
    But I just want to know what you think. Because I know in 
the past you have expressed concerns about the debt and the 
deficit. The two previous administrations have not been very 
interested in entitlement reform. We have not only the debt 
that we are adding to in the short term because of the 
pandemic, but we have structural problems that are long-term 
that are going to continue to drive that debt higher in the 
future.
    What are your thoughts with respect to reforming 
entitlements, with respect to the amount of the debt situation 
we find ourselves in right now, and when is it enough? When is 
it too much? When do we hit that point where the thing starts 
to collapse? That is what really concerns me. And nobody is 
talking about it really, in either party anymore. It was 
something that used to occupy a lot of our discussions in the 
past, but nobody seems to care much about it. And for me, that 
is a huge warning sign on the horizon, the fact that we have an 
ever-growing deficit, an ever-growing debt, and no apparent 
interest in taking the steps that are necessary to address it.
    Dr. Yellen. Senator, I agree with you that it is essential 
that we put the Federal budget on the path that is sustainable, 
and that we are responsible to make sure that what we do with 
respect to deficits and debt leave future generations better 
off.
    But the most important thing, in my view, that we can do 
today to put us on a path of fiscal sustainability is to defeat 
the pandemic, to provide relief to the American people, and 
then to make long-term investments that will help the economy 
grow and benefit future generations.
    To avoid doing what we need to do now to address the 
pandemic and the economic damage that it is causing, would 
likely leave us in a worse place fiscally and with respect to 
our debt situation, than taking the steps that are necessary 
and doing that through deficit demands. We really have to worry 
about scarring of workers due to this pandemic and the loss of 
small businesses that can really harm the long-run potential 
productivity of our economy and leave us with long-run problems 
that would make it difficult to get back on the growth path 
that we were on.
    And it is really critically important to provide this 
relief now. And I believe it would be a false economy to stint. 
But over the longer term, I would agree with you that the long-
term fiscal trajectory is a cause for concern. It is something 
we will eventually need to attend to, but it is also important 
for America to invest in our infrastructure, invest in our 
workers, invest in our R&D, the things that make our economy 
grow faster and make it more competitive, and it is important 
to remember that we are in a very low interest rate 
environment. And that is something that existed before the 
pandemic hit.
    Interest rates were low even before the financial crisis of 
2008. This has been a trend in developed economies. You can see 
it across the developed world. And it represents structural 
shifts that are likely to be with us a long time.
    So, although the debt-to-GDP ratio has increased, it is 
important to note that the interest burden of the debt, 
interest as share of GDP, is no higher now than it was before 
the financial crisis in 2008, in spite of the fact that our 
debt has escalated.
    And of course interest rates can increase. Eventually we 
have to make sure that primary deficits in the budget are 
sufficiently small that we are on a sustainable path. But right 
now the challenge is to get America back to work, and to defeat 
the pandemic.
    Senator Crapo. Thank you.
    Senator Cantwell?
    Senator Cantwell. Thank you, Mr. Chairman, and I too want 
to congratulate the nominee. I want to thank President-elect 
Biden for nominating a woman and, Dr. Yellen, for your 
willingness to serve.
    I can already see by the words that you have chosen--women, 
workers, workforce, workforce training--that you are likely to 
deliver economic policies that are more focused on Main Street 
than Wall Street. And I hope that is what I am hearing, because 
I believe that we need wage growth in America; that Americans 
from all walks of life need more access to wage growth. And I 
hope the policies of the Biden administration and you will help 
deliver that.
    I have four areas that I would like to quickly go over, if 
I could, that are important to these policies. First, I want to 
make sure that you are going to protect Federal taxpayers and 
their investments as far as the private banking that exists in 
America, and that you will protect and continue to enforce the 
important laws that are on the books, and use the Federal 
Stability Oversight Council to make sure that we are protecting 
depositors from having the Federal Government again ever having 
to bail out Wall Street, and to make sure that we are focusing 
on Main Street instead.
    Dr. Yellen. Senator Cantwell, I could not agree with you 
more. Our focus should be on Main Street, not Wall Street. And 
we should demand, as Dodd-Frank insisted, that the largest 
institutions--particularly those that pose systemic risks--have 
adequate capital and liquidity and plans by which, if they were 
to fail, they could be resolved without posing burdens on 
taxpayers.
    Through my time at the Fed, I worked very hard to 
strengthen the banking system, to make sure that these 
institutions do not operate in ways that would harm Main 
Street. And I am pleased to see that, when the pandemic hit and 
there was a good deal of financial disruption, especially the 
largest banks have been able to, due to the reforms that were 
put in place, continue to lend, to survive with adequate 
capital, and to support the needs of households and businesses.
    And you have my absolute pledge that this will continue to 
be my focus----
    Senator Cantwell. Thank you. Thank you. I have to jump to 
the next one that is very important. I have an economy that has 
one in four jobs related to trade. I have not been a fan of the 
Trump administration's, what I would call ``unilateral 
protectionism.'' I do not think that this is the direction for 
an economy where 95 percent of consumers live outside the 
United States of America. We have digital trade issues that 
need to be resolved. We have national security issues that need 
to be resolved.
    So a recent Oxford Economics trade war study said that the 
Trump administration's trade war cost us 245,000 American jobs, 
and the Federal Reserve Bank of New York and Columbia 
University found that U.S. companies lost $1.7 trillion in the 
price of their stocks as a result of U.S. tariffs imposed in 
the trade war.
    So I am asking you, do you repudiate basically unilateral 
protectionism?
    Dr. Yellen. Senator, I believe we should try to address 
unfair trade practices. And the best way to do that is to work 
with our allies, rather than unilaterally. And when the unfair 
practices have to do with things like stealing intellectual 
property, engaging in forced technology transfer, or subsidies 
that provide an unfair technological advantage, I think we 
should focus directly on those practices and work with our 
allies to make sure they are addressed.
    Senator Cantwell. Well, we in the Pacific Northwest believe 
in an export economy. And so we want an export economy to take 
place, so you have to have trade. And so we want to continue to 
focus on that.
    I do believe in using sanctions, though. And I think the 
Trump administration failed to be as aggressive on sanctions. I 
want to make sure that you will use that as an economic tool, 
particularly as it relates to cyber-attacks on our 
infrastructure.
    In the last few weeks, there have been so many momentous 
occasions that I think we have lost sight of the incredible 
impact of what happened with the hacking of our information 
system. And I want to know that you will use sanctions when 
necessary on people who have attacked our infrastructure.
    Dr. Yellen. Sanctions are a critically important tool to 
address cybersecurity and other threats. And you can be sure 
that I will be focused on making sure that they are used 
strategically and appropriately. And I intend to ask my Deputy, 
if he is confirmed, Adewale Adeyemo, to quickly begin a review 
of our sanctions policy to make sure we are doing this in a 
strategic way, and in the most effective way we can.
    Senator Cantwell. Thank you. And I look forward to working 
with you on increasing affordable housing tax credits. My 
colleague, Senator Young, and I continue--we know you 
understand how much affordable housing is important to our 
country and our economy.
    Thank you, Mr. Chairman.
    Senator Crapo. Thank you. And I agree with you on that as 
well.
    Next is Senator Menendez.
    Senator Menendez. Thank you, Mr. Chairman. And, Dr. Yellen, 
congratulations on your nomination. I look forward to 
supporting you.
    I know that Senator Grassley asked you a question on SALT. 
I hope when you study it, you look at the fact that there are 
States like New Jersey that give billions more than we get 
back, and States like Iowa that get $5 billion more than they 
pay in Federal taxes, or Kentucky that gets $111 billion more 
than it pays in Federal taxes, or Florida that gets $60 billion 
more than it pays in Federal taxes.
    So you cannot have States continue to be economic engines, 
and then also be hurt in this case by the property tax 
deduction. So it should be a total--a total look at the 
equation, and I hope you will do that as part of your review.
    Dr. Yellen. I will do that.
    Senator Menendez. Now since 2020, over the last year, State 
and local governments have laid off 1.3 million workers. That 
is 1.3 million doctors and nurses and teachers and school 
custodians, 1.3 million essential workers we rely on to fight 
for us on the front lines in the battle on COVID.
    It is economic malpractice, from my perspective, what is 
happening. Could you explain some of the lessons that were 
learned from the 2008 Great Recession and the consequences of 
Congress failing to adequately address the fiscal crises facing 
State and local governments that are causing these and other 
impending layoffs?
    Dr. Yellen. Well, as you know, in 2008 when the economy 
suffered such a serious downturn, State and local governments 
saw a huge shortfall in revenue and an increased need to spend 
on safety-net type programs. And they faced massive deficits.
    And although Congress and the administration passed the 
American Recovery and Reform Act and spent at the Federal 
level, there was a huge offset just from the total economic 
point of view. It came about because State and local 
governments have to balance their budgets, and they were forced 
to slash their workforces.
    And the same thing as you just described is happening now. 
And so----
    Senator Menendez. And that was a drag on the economy, was 
it not?
    Dr. Yellen. It was a tremendous drag on the economy. And 
the same would be true now. And as you mentioned, we are seeing 
layoffs, especially with teachers, but prospectively policemen 
and firefighters and----
    Senator Menendez. So it would not be a good time to 
withhold fiscal support from State and local governments?
    Dr. Yellen. Not in my view.
    Senator Menendez. Right. Now you stated that the economic 
fallout of the pandemic is, quote, ``an American tragedy,'' and 
I agree. What makes it uniquely an American tragedy is that 
minority communities--and as the longest-serving Latino in 
Congress, I can tell you that community, African Americans, and 
other minority communities have borne the disproportionate 
brunt of the COVID-related economic fallout.
    In December, nearly 10 percent of African American workers 
and 9.3 percent of Latino workers were unemployed, compared to 
6 percent of the other population. Twenty-eight percent of 
black renters and 24 percent of Latino renters were not caught 
up on their rent, compared to 12 percent of white renters. 
Fifty-five percent of African American adults and 51 percent of 
Latino adults reported difficulty in covering their expenses, 
compared to 31 percent for white Americans. That is a very dark 
and dire picture.
    If confirmed, you will be in a position to promote policies 
to reduce racial inequality, especially as we continue to fight 
the COVID-19 pandemic. Can you give me a sense of how you plan 
to ensure that our response to the economic crisis will also 
help the minority communities that are being disproportionately 
hurt?
    Dr. Yellen. Senator, you cited some dramatic and disturbing 
statistics. And they are absolutely right. This pandemic is 
taking just an unbelievable toll on low-income workers--and on 
minorities especially.
    And because I am so concerned about the impact on minority 
communities, the very first meeting that I had after my 
nomination was announced was with representatives of racial 
justice and equity groups to hear from them what their needs 
are. And I promise you that I will be fully focused on putting 
into place, at every level, relief for these communities.
    An example would be the State Small Business Credit 
Initiative that is contained in President-elect Biden's package 
announced last week. There is money there to capitalize lending 
to small businesses, and a proposal to provide grants to loans 
for small entrepreneurs.
    And of course with respect to food security, evictions, 
unemployment insurance, and relief that these households need--
paid leave, the minimum wage--all of these things I believe 
will be very beneficial.
    Senator Menendez. My time has expired, but I just want to 
say I hope as part of that--I like a lot of what you said--I 
hope you also diversify the Treasury Department, which really 
needs to have voices at the table to help you meet those 
challenges.
    Dr. Yellen. I completely agree with you, Senator.
    Senator Menendez. Thank you, Mr. Chairman.
    Senator Crapo. Thank you.
    Senator Toomey?
    [No response.]
    Senator Crapo. Is Senator Toomey on line? I am told that he 
is not. So we will move on to Senator Carper.
    [No response.]
    Senator Crapo. I am told you are here, Senator Carper. Oh, 
excuse me. All right, we will go on to Senator Scott.
    Senator Scott. Good morning.
    Senator Crapo. I hear you. Go ahead, Senator Scott.
    Senator Scott. Excellent. Can you hear me?
    Senator Crapo. I can hear you. Now we can see you also. Go 
ahead.
    Senator Scott. Excellent. Thank you, Mr. Chairman, and 
thank you--I want to continue to call you ``Chair Yellen,'' Dr. 
Yellen, and it is so good to see you again and thank you for 
your willingness to serve during these challenging times, 
without question.
    I will hop right to it, because Chairman Crapo will keep me 
to my 5 minutes. The first question I have is about the 
pandemic relief package that has been presented. You know as 
well as I do that in December we passed a package that included 
$80 billion for schools to reopen and $280 billion to restart 
the Paycheck Protection Program for a second round. It also 
included billions of dollars for the vaccines, which I think is 
certainly an area where we need to invest even more than we 
have so far, without question. But the $1.9-trillion package 
that has been presented to us is a package that focuses on some 
priorities that I think will actually hurt our economy as much 
as they would improve our economy.
    One in particular is the issue of raising the minimum wage 
to $15 an hour. In talking to businesses around the country, 
and specifically at home, the one thing that even the 
Congressional Budget Office recognizes is that by increasing 
the minimum wage to $15 an hour, it could shutter somewhere 
around 3.7 million jobs on the high end, a minimum of 1.3 
million jobs in our economy. And the last thing this economy 
needs, as we attempt to recover, is a loss of 1.3 to 3.7 
million jobs.
    But in addition to that, it would increase the cost of 
doing business significantly. It would certainly devastate the 
opportunity to develop new jobs in rural America and in rural 
South Carolina as well. And for those minorities newly coming 
into the workforce, it would actually have a disproportionate 
impact on those folks who, as you said in your testimony, you 
want to target for relief and opportunity.
    To say it differently, over 110,000 restaurants have closed 
during the pandemic. Thousands of those restaurants are in 
South Carolina. By increasing the minimum wage to $15 an hour 
and eliminating tips for servers at restaurants, we will do 
actually what I would consider an existential threat to those 
restaurants and, frankly and more importantly, to those 
employees of restaurants.
    How do we grapple with parts of this package that really 
are philosophical in nature and deny the practical reality that 
comes from them?
    Dr. Yellen. Well, Senator, I appreciate that question. 
President-elect Biden has proposed raising the minimum wage to 
$15 an hour because right now we have millions of American 
workers who are putting their lives on the line to keep their 
communities functioning, and sometimes even working multiple 
jobs, but are not earning enough to put food on the table and a 
roof over their heads. And they are suffering in countless 
ways, especially during this pandemic, and really struggling to 
get by. And raising the minimum wage would really help many of 
those workers.
    And that is the reason for doing it. Now in terms of 
potential job loss, there is now a large economics literature 
on this. And much of it suggests that raising minimum wages--
this is when researchers often look at what happens when one 
State raises its minimum wage and a neighboring State leaves it 
alone, to see how businesses fare in the two different places 
with different treatments.
    And the findings are that the job loss is very minimal, if 
anything. So I think that the likely impact on jobs is minimal. 
That is my reading of the research. And of course all 
businesses are struggling, and it is critical to help those 
businesses. I appreciate the PPP package in the recently passed 
bill. I pledge that we will do everything we possibly can to 
get that money out to struggling businesses effectively.
    It is critically important to help those businesses. The 
money that has been allocated to a city that applies to support 
them and their lending, especially in low- and moderate-income 
communities, that is critically important aid, and President-
elect Biden has proposed yet more aid to these businesses so 
that they can survive this pandemic and get back on their feet.
    Senator Scott. Well, thank you for your answer, Dr. Yellen. 
I would say that there is no doubt that when you artificially 
increase the minimum wage, you are going to permanently 
decrease the number of jobs in the economy. When we have a 
market-driven increase of the minimum wage, we see production 
go up, and the value of work increases as well.
    My final question in my time that I have left, which 
doesn't look like much----
    Senator Crapo. Actually, your time has expired.
    Senator Scott. Yes, sir. Let me just say this for the 
record, and perhaps you can answer it on the record for me. 
When we think about enough being enough, if there was another 
downturn in our economy, whether it's based on another pandemic 
or some other act, what are we doing to make sure that we have 
the resources necessary for that next downturn in 2 or 3 years, 
as opposed to using every weapon in the quiver today for what 
is a recovery that has started? I think it would be prudent for 
us to save some of the resources for the next time we need to 
respond to a global crisis of some sort.
    Thank you, Dr. Yellen. And I will look to have that answer 
just in writing, ma'am.
    Dr. Yellen. Yes, thank you.
    Senator Crapo. Thank you, Senator Scott.
    Next, we will go back to Senator Toomey.
    Senator Toomey. Thank you, Mr. Chairman. Can you hear me?
    Senator Crapo. Yes.
    Senator Toomey. Thank you. And, Dr. Yellen, welcome and 
thank you for your past service to the country and for your 
willingness to serve in this capacity. I look forward to 
working with you, but I have to admit that the contours of the 
stimulus bill as proposed by the Biden administration are going 
to make that difficult. The ink is barely dry on the second-
largest stimulus package in American history, nearly a trillion 
dollars after nearly $3 trillion earlier in the year, and we 
are looking at another spending blowout. The only organizing 
principle that I can discern is, it seems to spend as much 
money as possible, seemingly for the sake of spending it. An 
additional $1,400 per person, regardless of the person's 
circumstances, guaranteeing that there will be several thousand 
dollars in payments going to families with six-figure incomes 
who have had no income interruption whatsoever, just makes 
absolutely no sense.
    Increasing unemployment payments such that a majority of 
unemployed workers will make more money being unemployed than 
they make working, can only slow the return to a normal, 
healthy labor market. Sending States more money than they have 
lost in lost revenue or in additional spending is just not a 
good idea. And I completely agree with Senator Scott. Obviously 
an arbitrary 
government-mandated minimum wage increase is going to cost 
jobs. If not, then of course we would just raise the minimum 
wage to $20, or $30, or $50 an hour. Obviously it will result 
in some job losses.
    So these proposals are not targeted at those people who 
really need them. It cannot be justified on the grounds of 
effectiveness. And it is going to be hard to get to a 
bipartisan agreement based on this.
    I will say I am pleased to hear your testimony that you 
think that the tax increases, the really massive tax increases 
that 
President-elect Biden is proposing, will be delayed. By the 
way, it is implicit the economic damage that those tax 
increases will do.
    It is quite a staggering list. Huge increases in individual 
rates. Adding a 12.4-percent payroll tax on upper-income people 
will have many Americans with combined State and local marginal 
tax rates well into the 60 percentages. Huge increases on 
corporate America, which will make America a less attractive 
place to headquarter a multinational company, which will make 
it less attractive to invest here.
    And I would point out that we reached record low 
unemployment rates and rising wages, especially for the lowest-
income people, after our tax reform. I am not sure why we want 
to go back on that.
    But let me zero in on one particular idea that some of our 
colleagues have suggested--and I think Senator Wyden was 
alluding to this during his opening comments--and this is the 
idea that, separate and apart from the Biden administration's 
proposal to double the taxes on capital gains, some are 
suggesting that we start to impose taxes on unrealized gains. 
An asset appreciates, and we charge a tax on that, even though 
there is no liquidity event, there is no sale, there is no 
actual realized gains. We will, I guess, have a mark-to-market, 
if that is even possible in some cases, and impose a tax on 
that.
    So my question for you, Dr. Yellen, is, without getting 
into any particular bill, do you support the idea of taxing 
unrealized appreciation of assets?
    Dr. Yellen. Well, I do believe that capital gains should at 
some point be taxed. Right now, step-up of bases at death 
provides a route by which a very large share of capital gains 
are never taxed at all.
    Senator Toomey. That is a separate issue. That is a 
distinct issue. The idea of an annual tax on an unrealized 
appreciation of assets is what I am asking about.
    Dr. Yellen. Well, what I wanted to say is that there are 
simply different ways of addressing the issue of how to make 
sure that some taxes are collected on capital gains, and this 
mark-to-market approach is one method, but certainly not the 
only method. And there may be technical challenges associated 
with it. So I would want to have the administration look at 
different approaches.
    Senator Toomey. And, Mr. Chairman, are we operating on a 5-
minute clock?
    Senator Crapo. Yes, we are, and your time just ran out.
    Senator Toomey. I see that. I look forward to the second 
round.
    Senator Crapo. All right; thank you.
    Next is Senator Carper on the line.
    Senator Carper. Thanks, Mr. Chairman.
    Dr. Yellen, good morning, and we are delighted that you are 
joining us and for your being nominated. And again on behalf of 
all of us, thank you for your extraordinary service to our 
country for almost as long as I have been a member.
    When I was new in the Senate, one of the people I did not 
really know very well was Ted Kennedy, and I suggested we maybe 
have a cup of coffee just to get to know each other. And it 
actually turned out to be lunch. When we were having lunch, I 
said: ``Why is it that, even though you are considered the most 
liberal Democrat in the Senate, you have lots of Republicans in 
the Senate who want you to be their lead co-sponsor on the big 
bills? Why is that?''
    And I will never forget what he said, Dr. Yellen. He said, 
``I'm always willing to compromise on policy. I'm never willing 
to compromise on principles.'' Always willing to compromise on 
policy; never willing to compromise on principles.
    Our President-elect knows--having served in the Senate for 
the better part of 4 decades, he knows the need to be able to 
find consensus and develop consensus. Ted Kennedy kept his 
word. He never compromised on principle. He was always willing 
to compromise on policy.
    Could you talk about the principles that the administration 
and Congress should not be willing to compromise on with 
respect to the next COVID relief package?
    Dr. Yellen. Well, I think that the administration should be 
insistent that we have the resources to address the public 
health challenges to mount a vigorous national campaign to make 
sure that vaccinations are as rapid as possible. Not only is 
this going to prevent needless suffering and loss of life, but 
it is also the best and most effective way to get our economy 
back on track, and to get to re-employ all the workers who have 
been suffering in businesses that are really struggling to 
survive. So that is something----
    Senator Carper. Dr. Yellen, I could not agree more. I could 
not agree more. I would like to say, the main thing is to keep 
the main thing the main thing. And the main thing for this 
economic recovery is to reel in this pandemic. The best way to 
do this, as we are getting new vaccines almost by the month 
now, is to vaccinate the heck out of our country.
    Dr. Yellen. I completely agree with you. And I think that 
that is a top priority. And then I would say another principle 
that is really critical is that we have to relieve the 
suffering that this pandemic has caused. It has been----
    Senator Carper. How do we do that? How do we maybe target 
that a little bit better, or differently, than is proposed in 
this relief package from the incoming administration?
    Dr. Yellen. Well, we need to look at how to target it. It 
needs to go to the businesses that are most at risk, small 
businesses, particularly businesses in low- and moderate-income 
areas that received less than a proportionate share of PPP 
relief in the first round of PPP aid. So we need to target 
small business relief to those most vulnerable businesses. We 
need to make sure that people are not going hungry in America, 
that they can put food on the table, that they are not losing 
their homes and ending up out on the street because of 
evictions.
    We really need to address those forms of suffering. And I 
think we should not compromise on it. And if we do not do so, 
that suffering and the loss of spending it will cause will 
cause other people to lose jobs and permanent scarring. It will 
harm the economy over the longer term.
    Senator Carper. Thank you for that. We have millions of 
people who have lost their jobs. In many cases, their employers 
are out of business. And the folks who have lost their jobs do 
not have the skills to be able to do the jobs that are out 
there being taken. We heard some ideas how to address that.
    One is to use our community college system across the 
country to provide not just the ability to get a 2-year degree, 
but in some cases, a certificate for a job that needs to be 
done. Could you speak about that?
    Dr. Yellen. I am strongly supportive of supporting the 
community college system. I think it provides a wide range of 
very valuable training. In some cases it is helping people to 
go on to college, but in many cases providing training, as you 
indicated, to workers who have lost their jobs who need new 
skills and a new credential to be able to move into jobs that 
are available in expanding sectors. And I think investing in 
that system, making sure it is available to anybody who needs 
it and can benefit from it, is really important.
    Senator Carper. Well, thanks so much. Mr. Chairman, I may 
have used up my time----
    Senator Crapo. Yes, you have.
    Senator Carper. I will mention a question for the record, 
and then I will stop.
    Senator Crapo. Go ahead.
    Senator Carper. I am going to ask you a question for the 
record. I am going to ask you to share your thoughts with us on 
the need for measures such as temporary refundability. It's 
about clean energy tax credits that can help the clean energy 
industry secure project financing and get back on its feet. I 
will ask you that question for the record, but I just wanted to 
ask it here.
    Thanks for your extraordinary service. It is great to be 
with you, as always. Thanks, Mr. Chairman.
    Senator Crapo. Thank you.
    Senator Cardin?
    Senator Cardin. Thank you, Mr. Chairman.
    And, Dr. Yellen, thank you very much for your long public 
service and your willingness to take on this challenge. We 
thank your family also, because we know it is going to be a 
family sacrifice. I am sure your discussions at your dinner 
table will be very interesting.
    Let me follow up on Senator Cantwell's question as it 
relates to sanctions. You indicate that you are going to have a 
review of the use of sanctions, and absolutely on cyber-
attacks. But we are also suffering today in a decline of the 
democracy. Human Rights Watch said the last 4 years were a 
disaster for human rights. American values have been under 
attack. We have a decline in the number of democratic states in 
the world.
    So Congress has passed sanction regimes in order to deal 
with strengthening the democratic states. And we have done that 
on specific issues. We have done it on the global Magnitsky 
statute, and I just really want to encourage you, as you are 
reviewing the use of sanctions, to recognize that we have real 
challenges today, and the United States has to exercise its 
leadership.
    Senator Young and I have introduced legislation to deal 
with corruption. Corruption is one of the most corrosive 
elements in the decline of democratic states, and we are 
suggesting using a tier system on how countries are dealing 
with corruption. Some of it will be dealing with human 
trafficking--with consequences.
    So my first question is about your willingness to work with 
us in Congress so that we can be united in the use of sanctions 
globally to advance U.S. values.
    Dr. Yellen. You have my pledge, Senator Cardin. I look 
forward to working with you. These are very important 
challenges and goals. Sanctions are a tool that can be very 
effective, and I pledge to work with you on implementing them 
in a way that does address these abuses.
    Senator Cardin. Thank you.
    My second point is an area that has been mentioned by many 
members, including yourself in your opening statement, and that 
is dealing with our minority community, the under-banked 
community, the under-served community, as we come out of COVID-
19.
    I have the honor of being a lead Democrat on the Small 
Business Committee and have worked with Senator Rubio in 
developing a lot of the tools that were in the first two major 
COVID relief packages. And we learned a lot from that.
    It is difficult to get to the under-served communities, and 
we really do need to concentrate and find better ways to deal 
with them. We did learn that small businesses that are stressed 
much prefer a grant than a loan, even a forgivable loan, 
because they really do not want to put another loan on their 
books.
    So we have looked at ways to develop grants that are 
targeted to the most vulnerable small businesses. We know that 
they need resource partners so that they are not last in line, 
but first in line in order to be able to get help. We know that 
there is a very limited amount of venture capital, particularly 
in emerging markets, for minority small businesses. And we 
certainly know the smaller the small businesses are, the more 
vulnerable they are.
    So my plea to you is that, as you are developing these 
packages, please work with us and what we have found that has 
worked, and what has not worked, so we can really help the most 
vulnerable of our small businesses, the most vulnerable of our 
communities, as we look for tools to help those communities 
that are targeted to provide the relief to communities that 
have been left out for way too long.
    Dr. Yellen. Senator, I pledge to work with you closely on 
that. This is a very high priority objective of President-elect 
Biden. The proposal that he put forward last Thursday does 
contain funding for additional grants to these very hard-hit 
businesses, and also funds, a small business opportunity fund 
that would be able to be leveraged and enable various State and 
nonprofit programs to leverage a large volume of lending to 
businesses that have been hard-hit and that have opportunities.
    But we will look for ways to target it and work with you 
closely to understand what is best.
    Senator Cardin. I thank you for that. My last question 
deals with the lack of retirement security for Americans. 
Before COVID-19, we were not doing what we needed to do. As a 
result of COVID-19, more and more households are not saving 
anything for retirement today.
    We passed some legislation in the past, the SECURE Act. I 
have worked with Senator Portman on bipartisan legislation. We 
are working on bipartisan legislation in this Congress. I would 
just urge you to be an active partner with us in how we can 
increase retirement security options for workers in this 
country.
    Dr. Yellen. I completely agree with the priority that you 
place on this, Senator Cardin. Really, so many families are not 
prepared for retirement and have not been able to save for it. 
It is a huge problem, and the pandemic is making it worse, as 
hard-hit families are running down their savings. I think in 
this economy, everyone needs access to a workplace retirement 
saving plan, and I look forward to working with you to address 
this issue.
    Senator Cardin. Thank you very much. And thank you for your 
willingness to serve.
    Dr. Yellen. Thank you.
    Senator Crapo. Thank you.
    Senator Cassidy?
    Senator Cassidy. Hey, Dr. Yellen. Nice to see you again. 
And again, thank you for our conversation before.
    You used the word ``targeted'' multiple times in your 
response to Senate Cardin. Senator Carper suggested that 
perhaps the Biden plan could be a little bit more targeted. The 
extra $1,400 to families, some of whom, you know, are working, 
they see no decrease in their income, many of whom actually--an 
analysis from the first check, the $1,200, showed that for many 
it turned out to be discretionary income. They put it in 
savings, and there are some reports that there was more money 
invested in the stock market.
    So do you--since you mentioned ``targeted,'' would you view 
this additional $1,400 stimulus check as a targeted relief?
    Dr. Yellen. Well, I believe that in the President-elect's 
proposal it would go to individuals earning $75,000 or less, or 
couples earning $150,000 or less. Some families presumably do 
not greatly need the money, but there are many families who 
were under stress, people have had to drop out of the labor 
force while receiving unemployment----
    Senator Cassidy. I only have 5 minutes. But on the other 
hand, the unemployment insurance that has gone out there was 
very directed relief for those who have had to drop out of the 
workforce. I totally accept that. But it seems like the $1,400 
on top of the unemployment, and on top of some of the other--
you know, the rent relief, for example, seems to be less 
targeted. And I go back there because ``targeted'' keeps on 
coming up.
    Dr. Yellen. It is less targeted. But there are many 
families that are bearing unacceptable financial burdens that 
are not addressed by unemployment compensation. People who have 
had to drop out of the labor force because their children are 
out of school, who simply cannot participate because they need 
to take care of family priorities----
    Senator Cassidy. Can I interrupt again, just because--I do 
not mean to be rude. I only have 5 minutes, and I only have 
2\1/2\ left.
    There is also money for education. And I will note that in 
the COVID relief package just passed, plus the CARES package, I 
think we have put in a net of $66 billion for education. The 
total of Federal outlay is typically only $57 billion. So we 
actually are over 100 percent of what the schools already get. 
Again, if we are looking at what is targeted--although I am 
sure there is always somebody who has need--it seems as if that 
need would have been met with an over 100-percent increased 
subsidy to a school. So I will just mention that.
    Let me ask you a couple more things. The previous 
administration considered issuing 50-year bonds to take 
advantage of the low interest rates, and to retire some of the 
shorter-term bonds. Is that something that you would consider? 
Because I think they decided against it, but I am just 
wondering what your appetite would be. What would you think 
this administration's appetite would be for that?
    Dr. Yellen. Well, there is an advantage to funding the 
debt, especially when interest rates are very low, by issuing 
long-term debt. And I would be very pleased to take a look at 
this issue, examine what the market would be like for bonds at 
that maturity, and I am interested in hearing your thoughts on 
this issue and working with you on that.
    Senator Cassidy. Let me also ask about infrastructure, 
because that may involve borrowing. In infrastructure, clearly 
the problem of the big package has been, how do we finance it? 
Now if we spend roughly $450 billion on increased stimulus 
checks, well, intuitively that is going to take away some of 
the appetite for more deficit spending for an infrastructure 
package. But obviously, putting Americans back to work with an 
infrastructure program would be very beneficial for Americans.
    I will just say that editorially. It does seem that there 
is only going to be a certain limit for borrowing if we do not 
have a source of revenue to pay for it.
    Let me go back to the infrastructure. What thoughts do you 
have on infrastructure? And is this one of the programs that 
you see the Biden administration would be considering not 
raising revenue for but probably just borrowing in order to pay 
for it to get the economic benefit?
    Dr. Yellen. Well, I think that--so let me just say that 
President-elect Biden has proposed an ambitious Build Back 
Better program that involves infrastructure. It involves clean 
energy, investing in manufacturing, R&D training, and we have 
yet to decide exactly how that should be financed. Remember 
that companies often borrow to invest in projects that have 
sufficiently high returns where there is a net benefit. And 
there are at least some investment programs for the public 
sector that have been shown to have extremely high returns 
where I think one could argue for borrowing to finance them.
    But that is something that we will have to look at 
carefully, the financing of those programs.
    Senator Cassidy. Thank you very much. I yield back. Thank 
you.
    Senator Crapo. Thank you, Senator Cassidy. And to all of 
the Senators, we have a limited time available in this room. We 
still have time to get through all the questions, but I am 
going to ask all the members to please pay very close attention 
to the clock.
    With that, we go next to Senator Brown.
    Senator Brown. Thank you, Mr. Chairman. Dr. Yellen, 
welcome. I am looking forward to working with you to make the 
World War II-level investment we need to defeat the pandemic 
and build a better economy that honors the dignity of all work.
    Last week on the way out the door, the current Treasury 
Secretary rushed through an agreement with the Federal Housing 
Finance Agency that locks in big changes to the GSEs, leaving 
you to deal with the consequences. In the Banking and Housing 
Committee, I have laid out a path for reforming our housing 
finance system. I look forward to working with you on these 
principles, and on implementing the $25-billion Emergency 
Rental Assistance program we passed last month.
    We also need to make sure that the IRS is enforcing our tax 
code in a fair way. I want to work with you to make sure the 
IRS's auditing and enforcement activities do not have disparate 
impacts for black and brown communities, as soon-to-be-chair 
Wyden has brought up also.
    Another critical issue is fixing the multiemployer pension 
crisis. There are over a million Americans relying on us to 
save the pension that they have already earned. I am glad 
Senator Stabenow raised that earlier. I look forward to working 
with her and with you to address this problem, which gets worse 
by the month.
    Many of us also were excited that the President-elect 
included an expansion of the Earned Income Tax Credit and the 
Child Tax Credit in the rescue plan, especially the 
refundability of it. That is going to make a huge difference in 
the lives of so many families. I thank my colleague, Senator 
Bennet, for his partnership on this.
    For the first time ever--and we have talked about this--we 
can give families the option to get their CTC checks monthly. 
That is what my Working Family Tax Relief Act calls for. If we 
combine that with the plan to give every American access to a 
no-fee checking account at a community bank or credit union, or 
the Post Office, we can give millions of families the security 
of a steady financial boost and give them more power over their 
lives. They will not have to worry about a predatory financial 
institution charging them exorbitant fees just to use their own 
money.
    So I have two quick ``yes'' or ``no'' questions. If we make 
monthly distribution optional for families, will you ensure 
that IRS makes every effort to implement it as fast as 
possible?
    Dr. Yellen. Yes, I will. I will need to consult with IRS, 
but I will try to get it implemented as rapidly as possible.
    Senator Brown. And, Madam Chair, if the IRS needs 
additional funding to make this happen, will you make sure the 
President-elect's budget proposal includes the funds the IRS 
will need?
    Dr. Yellen. Yes.
    Senator Brown. Thank you.
    Turning now to the impact, following on from Senator 
Menendez, on State and local governments, how that affects 
millions of workers: my State faces a $2.4-billion budget gap. 
My State--all States need help for the layoffs of teachers and 
firefighters and sanitation workers and children's service 
workers. I am glad President-elect Biden understands that and 
is calling for that $350 billion in new aid.
    Just, if you would expand a bit, briefly, what are the 
costs if our country fails to make this investment in local and 
State governments?
    Dr. Yellen. Well, we are already seeing substantial layoffs 
of teachers. And with budget shortfalls, we are going to see 
further layoffs of essential workers, including policemen and 
firefighters and sanitation workers. And not only is this going 
to be a further hardship for these essential workers in the 
communities that they serve, but it is also going to have 
ripple effects through the economy as they contract their 
spending and create further job losses throughout the economy.
    And so I think it is very important that we provide this 
aid. It is also critical to get children back to school. The 
State and local governments and their school systems need the 
resources to reopen schools. It is President-elect Biden's plan 
to try to have that happen within the next 100 days, but the 
schools need more resources that State and local governments 
would be hard-pressed to provide.
    Senator Brown. Thank you, Madam Chair. A number of my 
colleagues have talked today about competitiveness. It is clear 
from your comments you understand that corporations paying 
their fair share and reforming our tax code puts workers first, 
American jobs first, and actually helps America competitively. 
So investing in workers through the dignity of work helps us be 
more competitive.
    Mr. Chairman, I will just close with this. I wanted to talk 
for a moment about the work that you and I did in the Banking 
and Housing Committee. I appreciate Chair Yellen's comments 
today in The New York Times about restoring FSOC to its 
intended role.
    I look forward to working with the chair and with Ranking 
Member Toomey on that, climate change, creating clean energy 
jobs, implementing, as you and I have talked about, Madam 
Chair, our anti-money laundering bill where we are losing 
billions of tax dollars to these anonymous overseas shell 
corporations, revenue that could be used to do a lot of the 
things that we have talked about today.
    So I am thrilled that you are returning to public service. 
And, Mr. Chair, I thank you for your forbearance.
    Dr. Yellen. Thank you, Senator.
    Senator Crapo. Thank you, Senator Brown.
    Senator Lankford?
    Senator Lankford. Thank you. Dr. Yellen, thanks again for 
stepping back into government service. It is not an easy thing 
for anyone to be able to step in, and especially in this 
season. So thanks for stepping back in again to be able to do 
that.
    Let me ask you a whole multitude of questions, and I will 
try to be rapid and be able to walk through some of these. You 
made a comment to Senator Thune earlier saying eventually we 
are going to have to deal with the issue of debt.
    What is kind of the warning sign that you look for? And is 
there an upper limit to the Federal debt that we should be 
watching for? And in your perspective, what are the key signs? 
Because if you use the word ``eventually,'' that would tell me 
that you do not think it is infinite. What is that upper limit?
    Dr. Yellen. Well, I would agree with you. I think there is 
no single metric that summarizes a number for all fiscal 
situations. But one metric that I do think is useful to keep in 
mind is the interest burden of the debt. What share of our 
economy, of GDP, is going to pay interest on the debt? The 
higher that gets, the more we find we have to use tax revenue 
just to pay the interest on the debt. And eventually that can 
lead to having to curtail other services, other spending, or 
eventually lead to runaway debt accumulation that would be an 
unsustainable path.
    During the low interest rate environment like we are in, 
what we are seeing is that, even though the amount of debt 
relative to the economy has gone up, the interest burden has 
not.
    So I would keep the interest burden in mind as a metric. 
Right now it is low, but longer-term we have to make sure that 
the deficits that we run in the Federal budget are consistent 
with stability in that kind of ratio.
    Senator Lankford. I would submit that we have to find an 
earlier warning sign. Because once interest rates start ticking 
up, in some ways it is too late because you have so much debt 
and the interest rates begin to tick up. If you find that 
moment when it is unsustainable, it rapidly gets worse.
    You made a comment in an interview in 2018 that I want to 
be able to follow up with you on. In this particular interview, 
you said, the United States' debt path was unsustainable, and 
that ``if I had a magic wand, I would raise taxes and cut 
retirement spending.'' Do you remember what you meant by that? 
It was a comment that you made in 2018, and I am not playing 
quiz show with you to try to go back and be able to review 
that. I want to know just your perspective in 2018. If you had 
a magic wand, because of an unsustainable debt path, you would 
raise taxes and cut retirement spending.
    Dr. Yellen. Well, we have long known that as our population 
ages, and if medical expenses and health-care costs continue to 
rise over time at rates faster than the general level of other 
prices, that there would be increasing shortfalls in both 
Social Security and Medicare--and that eventually we would need 
to find ways to address it.
    And it does not have to be--these are very important 
programs. I think it is important to remember that, once upon a 
time, poverty in the United States--if you looked at who the 
poor population was, it was the elderly. And these programs 
have played an essential role in giving Americans a safe and 
secure and dignified retirement. So we need to preserve these 
programs, and certainly preserve the benefits, especially for 
lower-income Americans who depend on them.
    Senator Lankford. You are not discouraging retirement 
savings, or tax incentives for individuals who choose----
    Dr. Yellen. No, I think--I mean, I think we should also 
have incentives and ways to help people save for retirement 
above and beyond that. But I would want to see these benefits 
preserved.
    One thing that we could do to diminish imbalances is to 
find ways to deliver health care more cheaply and more 
efficiently. And there are a lot of ideas for doing that. And I 
would look first to those kinds of things to achieve 
sustainability.
    Senator Lankford. Okay, so really what you meant by that 
was not cut retirement spending. It was cut the amount that 
retirees spend on health care? Is that what you are saying?
    Dr. Yellen. Well, that would be an important way to find 
ways to deliver these health-care services more efficiently.
    Senator Lankford. Thank you. I will have several questions 
for follow-up on the record about the role of OCC. Obviously 
that is a different role. You had mentioned before, taxes not 
right now. It would be hard to be able to do that right now. I 
want to get a feel from you on what the initial metrics are you 
are looking for before we can raise taxes, to be able to deal 
with that. And also sanction issues with Iran and how that 
specifically plays into the coming decisions you will have to 
make. So I will submit those for the record, and I appreciate 
your testimony.
    Dr. Yellen. Thank you.
    Senator Crapo. Thank you, Senator Lankford. I appreciate 
the Senator's paying attention to the clock.
    Senator Bennet?
    Senator Bennet. Thank you. Thank you, Mr. Chairman; it is 
good to see you. And thanks, Dr. Yellen, for your willingness 
to serve. I think we are very, very lucky that you are willing 
to do it, especially at this time.
    And I wanted to say one word to my colleagues. I heard the 
discussion today about the deficit. And I share the view that 
in the long term we need to figure out how to create a 
sustainable fiscal path for our country. I share that view. I 
also believe that we made some poor choices in terms of what we 
borrowed money to spend on. We had two wars in the Middle East 
that lasted for 20 years that cost us something like $5.6 
trillion, all of which was borrowed, none of which was paid 
for. We have cut taxes by $5 trillion, almost all of it to the 
wealthiest people in America. And we borrowed every penny to do 
that. And, as Dr. Yellen was just saying, I do not think 
anybody can take pride in this health-care system in America 
that costs twice as much as any other health-care system in the 
world, and we are borrowing a whole bunch of money to do that.
    What we have not done is invested in our human capital, our 
people. What we have not done is invested in our infrastructure 
in America, in the next generation of Americans. So it is not 
just a matter of what the balance sheet looks like; it is also 
a question of what are the choices that we are making? And I 
hope together we are going to make some choices with this new 
administration to invest in the American people and give them a 
fighting chance in this terrible pandemic, and in this slowing 
economy.
    And it brings me to my question for you, Dr. Yellen. I 
cannot actually see you, but I wanted to talk about the 
decision that the Biden administration made to include the 
expanded Child Tax Credit and to make it fully refundable, to 
take it up from the level that it is today to $3,000. Sherrod 
Brown, my colleague from Ohio, and I have been working on that 
for almost a decade. If this manages to make it through the 
Congress, we will have cut childhood poverty in America by 45 
percent. By some estimates, the cost of childhood poverty in 
this country is a trillion dollars.
    You were mentioning a minute ago in your answer to the 
Senator from Oklahoma the importance of programs like Medicare 
in ending the poverty we see among seniors, or diminishing it. 
We have a crisis in our country, because so many of our 
children are growing up in poverty.
    It would seem to me that, of all the things we have talked 
about today, at least from my perspective, I cannot think of 
anything that would make a greater difference in the prospects 
of the next generation, and of this country's prospects, than 
cutting childhood poverty almost in half in the way that you 
have proposed in the Biden recovery package.
    I wonder, Dr. Yellen, if you could say a word or two about 
the importance of that proposal.
    Dr. Yellen. Well, Senator Bennet, I very much agree with 
all of the points that you just made, that childhood poverty is 
way too high in America. And one of the best ways that we can 
reduce that is providing a refundable Child Tax Credit at a 
level that really makes a dent in that. And I think that this 
proposal is really important because, as you said, it will 
substantially reduce childhood poverty, give families the 
ability to invest in their children, and give them the kind of 
tools that they need to succeed in this economy.
    Senator Bennet. You know, one of the things we suggested in 
our bill--I think Senator Brown talked a little bit about 
this--is the idea that the Treasury Secretary could set up 
monthly advance Child Tax Credit payments.
    I wonder, just in the last seconds that I have, whether you 
agree that monthly payments would aid in smoothing families' 
incomes and spending levels over the course of the year, better 
helping them make ends meet during this difficult time?
    Dr. Yellen. I agree. These families have serious liquidity 
issues, and not having to wait until tax day to receive these 
payments would be very beneficial. So I would certainly explore 
with the IRS if it is possible to make these available in 
advance on a monthly basis.
    Senator Bennet. Well, we look forward to working with you 
on that. I am out of time. Mr. Chairman, thank you.
    Senator Crapo. Thank you, Senator.
    Senator Daines?
    Senator Daines. Thank you, Mr. Chairman. And thank you, Dr. 
Yellen, for being here today. I look forward to meeting with 
you one-on-one later this week as well.
    Before the pandemic, we had a booming economy. The national 
unemployment rate was 3.5 percent, the lowest level we had seen 
in 50 years. Wages were growing for workers across the board. 
In fact, importantly, the wages for lower-income Americans were 
finally growing faster than those for high-income earners. And 
I believe this is due, in no small part, to the impact of the 
Tax Cuts and Jobs Act signed into law in December of 2017.
    I am concerned by President-elect Biden's plans to increase 
taxes. I think that raising taxes in general is not a good 
idea, but particularly in the middle of a pandemic. It will be 
very harmful for growth.
    If you think about Montana, in our State 99 percent of our 
businesses are small businesses. And our small businesses, our 
mom and pop shops across our State, every corner, they have 
been hit hard by the pandemic. And this targeted relief has 
helped some, but the last thing we should be doing, in my 
opinion, is raising taxes--not ever, in fact, but especially 
not during or after a pandemic.
    Dr. Yellen, I would like to get your thoughts on this 
topic. Do you agree that raising taxes while the economy is 
still recovering from the pandemic is a bad idea?
    Dr. Yellen. Well, Senator, the focus right now is on 
providing relief, and on helping families keep a roof over 
their head and food on the table, and not on raising taxes. But 
longer-term, I think it is important to the Biden program of 
Build Back Better, investing in people, investing in 
infrastructure, investing in research and development, in 
manufacturing and things that will create good jobs and make 
our economy more productive. We need to think about taxes in 
the context of the package that aims to do those things.
    And to the extent that financing is required for these very 
valuable investments, I believe it should be coming in a fair 
way. Taxes--collections relative to the economy have declined 
over time, and although the corporate tax cuts I think did 
improve the competitiveness of American businesses--and 
President-elect Biden is not proposing to raise the corporate 
tax to the level before that act--it is very important that 
corporations and wealthy individuals pay their fair share.
    And the proposals that he will make will be in the context 
of an overall package that is very beneficial to the economy. 
And I think working in the context of the OECD negotiations on 
global taxation, we have much greater leverage to keep our 
firms, American firms, competitive if we avoid a race to the 
bottom in corporate taxation globally. And that is one of the--
--
    Senator Daines. I know we will have a chance to have 
probably a vigorous and robust discussion about that, but I 
want to remind everybody on this committee that it is the pass-
throughs and the non-C corps that are the primary drivers of 
economic growth in a State like Montana. It is small 
businesses. But we will have that discussion at a later point.
    I want to shift gears about a bill I have with Senator 
Warren on the Retirement Savings Lost and Found Act. This 
really gets back to retirement policies to help Americans 
ensure that they are saving for their retirement. This bill 
recognizes, as people switch jobs--which Americans are doing at 
higher rates than ever before--many unknowingly leave behind 
employer-sponsored retirement savings accounts. This bill 
addresses the problem by requiring Treasury and Social Security 
to create a national lost and found registry, using data 
employers are already required to report to the Treasury 
Department.
    Dr. Yellen, would you support this concept? It is a bill I 
have with Senator Warren. And would you commit to working 
together to make sure this will be administered smoothly by the 
Treasury?
    Dr. Yellen. Absolutely. I think it is an important 
objective that you have outlined there. And if it does become 
law, of course we will do everything possible to make sure that 
it is implemented effectively.
    Senator Daines. Okay. Dr. Yellen, I am out of time. Thank 
you for your answers.
    Senator Crapo. Thank you.
    Senator Casey?
    Senator Casey. Thank you, Mr. Chairman. Dr. Yellen, thank 
you for your service to the American people again, and for----
    Dr. Yellen. I am sorry, I cannot hear you.
    Senator Crapo. Senator Casey, can you hear us?
    Senator Casey. I can hear you.
    Senator Crapo. Oh, we can hear you again. Why don't you 
start again.
    Senator Casey. Okay. Well, Doctor, thanks so much. I hope 
you can hear me.
    Dr. Yellen. Now I can hear you.
    [Pause.]
    Senator Crapo. Senator Casey, we cannot hear you anymore. 
Can you hear us?
    [Pause.]
    Senator Crapo. I take it that we have a technical 
difficulty. When we can get Senator Casey back connected, we 
will return to him.
    Is Senator Whitehouse--I think he had to step out----
    Senator Whitehouse. No, I am here.
    Senator Crapo. Oh, good. Go ahead, Senator Whitehouse.
    Senator Whitehouse. Okay, great. Bob, I am sorry to bump 
you. I hope your technology improves. Dr. Yellen, welcome back. 
It is good to be with you.
    The American political system right now is rotten with dark 
money. Anonymous donors are all over our political system with 
huge contributions that have been aptly described as a tsunami 
of slime flowing through our country. ProPublica has chronicled 
the inconsistent statements made by some of these groups 
between what they report to the IRS and what they report to 
election officials. Both statements are under oath, so when 
they are inconsistent, that raises a red flag.
    I just wanted to flag for you that when you are confirmed, 
I intend to ask you to direct a review of the IRS 501(c) 
policies. Because it is my belief that for a long time the 
policies of the IRS have been very misaligned with a statutory 
direction that Congress gave the IRS over these agencies, and 
that to a degree, the IRS was bullied into taking these non-
statutory positions because there was so much blowback from the 
dark money forces and from their mouthpieces when they tried to 
intervene.
    I think the 501(c) problem, and the extent to which 
anonymous money is now interfering in our politics, is deadly 
serious. And I hope when I ask you, you will take an honest 
look at this and not appoint someone to do it who will give it 
a whitewash, and instead take a really good, hard look at what 
went wrong.
    Dr. Yellen. Senator, I would be very glad to work with you 
on that. You are pointing to a very disturbing situation, and I 
will need to get up to speed on where things are with that. But 
I would be glad to initiate a serious review of this matter.
    Senator Whitehouse. Good. Another serious matter is Freddie 
Mac warning of a coastal property value crash around the 
country because of climate change-driven sea-level rise; 40 
sovereign banks warning of systemic global risk to the economic 
system from climate change; economists warning of a carbon 
bubble that will clobber the U.S. economy.
    And given how serious all of that is, I am wondering where 
your senior-level climate person will be in the Department of 
Treasury. There is no specific office. How are you going to 
staff addressing climate at the most senior levels of Treasury?
    Dr. Yellen. Well, I will look to appoint someone at a very 
senior level to lead our efforts and to create a hub within 
Treasury in which we particularly focus on financial system-
related risks and tax policy incentives toward climate change.
    I think we need to seriously look at assessing the risks to 
the financial system from climate change. The Federal Reserve 
has recently said that they would be joining the network of 
supervisors for greening of the financial system. There are 
methodologies to do that, and we will focus on that.
    Senator Whitehouse. In a word or two, how seriously do you 
think we should take Freddie Mac's warnings of coastal property 
value crash, the sovereign bank warnings of systemic risk, and 
so many economists' warnings of a carbon bubble crash?
    Dr. Yellen. I think we should take these risks very, very 
seriously. I think climate change is an existential threat, and 
both the impact of climate change itself, and policies to 
address it, could have major impacts creating stranded assets, 
generating large changes in asset prices, credit risks, and so 
forth that could affect the financial system. So these are very 
real risks.
    Senator Whitehouse. And systemic risk is a mild phrase, but 
it conveys a very powerful message, does it not?
    Dr. Yellen. Yes, it does. I agree with you.
    Senator Whitehouse. Last question: I believe that foreign 
corruption and kleptocracy are inimical to our national 
security interests. For too long, the U.S. has been a haven for 
international corruption and kleptocracy through our shell 
corporations. With intense leadership from Mike Crapo--who I 
want to give a big shout-out to here--and Sherrod Brown, we got 
into the national defense bill the Beneficial Ownership Reform 
Incorporation Transparency bill, another tedious name for 
something that is actually very brutal and essential. And I am 
interested in who you think will lead the effort of cleaning up 
that mess using this new statute within Treasury, and how high 
up within Treasury you will place responsibility for cleaning 
up the dark money shell corporation problem that America has 
fomented.
    Dr. Yellen. So let me start by saying that this is a very 
important problem and that the act that was recently passed by 
Congress gives us an enormously potent tool to address this 
problem.
    We will try to get up and running as quickly as possible 
and devote ourselves to building that database so that we can 
address these issues. And we will be certainly looking to give 
this very high priority.
    Senator Whitehouse. You agree it has a national security 
dimension?
    Dr. Yellen. Absolutely.
    Senator Whitehouse. That is it for me. Thank you very much, 
Dr. Yellen. I really look forward to working with you, and to 
Bob Casey, my apologies for jumping ahead of you.
    Senator Crapo. Thank you, Senator Whitehouse.
    Senator Portman?
    Senator Portman. Thank you, Mr. Chairman. And to Dr. 
Yellen, thank you very much for your time you gave me recently 
to talk about many of the issues that I know have come before 
the committee today. I am going to revisit one that I am sure 
has been talked about, which is the fiscal discipline question. 
A Treasury Secretary can be very powerful within an 
administration, providing a voice for fiscal sanity, and I 
would urge you to do that.
    Our conversation was about the relatively low interest rate 
environment and the fact that you think that investments are 
needed, and that going into further deficits and adding to our 
debt is appropriate. I would hope, again, that although we do 
have relatively low rates today, knowing that that could 
change, we should not get too comfortable with that, and 
second, that we have historic levels of deficits now, and as a 
percent of our GDP, not seen since World War II, which is 
frightening.
    One quick story. When I was OMB Director under the Bush 
administration--this is a long time ago, 14 years ago--I wanted 
to propose a balanced budget over 5 years. And there was an 
ability to do that, only 14 years ago. Think about that, a 
balanced budget not over 10 years, over 5 years in the budget.
    There was quite a debate in the administration at the time 
and, frankly, I think I was on the losing end of it until 
somebody weighed in. And that was Hank Paulson, who was then 
Secretary of the Treasury. And I will always be grateful to him 
for that. I think it was the right thing to do. At least it 
showed that we could get to a balanced budget by making some 
tough decisions, and the Treasury Secretary obviously was 
someone whom people were listening to from an economic point of 
view.
    So with that, I do not know that I have posed a question, 
but I would love to hear your response to what you see as your 
responsibility to be a voice of fiscal sanity within the 
administration.
    Dr. Yellen. I completely agree with you, Senator Portman, 
that the Treasury Secretary has to be a voice for fiscal 
sanity. And I pledge--I pledge to do that. Our finances need to 
be on a sustainable, long-run course, and that is very 
important for us to focus on. I pledge--I pledge to do that.
    Right now, short-term, I feel that we can afford what it 
takes to get the economy back on its feet, to get us through 
the pandemic, and to relieve the burdens that it is placing on 
households and small businesses. And research from other 
countries suggests that often spending money to address a weak 
economy ends up creating a lower debt burden in the long run 
than failing to provide that support. So that will be my focus 
in the short run: getting the economy back on its feet.
    But longer-run, there are challenges in achieving fiscal 
sustainability. We have to make sure ultimately the deficits 
that we run, if we do that, are consistent with fiscal 
sustainability. The world has changed. I believe the future is 
likely to bring low interest rates for a long time, but of 
course it is a risk that interest rates can rise. And we need 
to consider that risk as well in crafting a sustainable and 
responsible policy.
    Senator Portman. Thank you. I will look forward to working 
with you on coming up with ways to deal with that long-term 
structural deficit, because we all know about it. We all know 
it is there. It is the mandatory spending side of the ledger. 
And I have talked to you about this in our conversations 
privately, but I do look forward to working with you on that.
    The Tax Cuts and Jobs Act was passed in 2017, and the 
resulting economic improvements were dramatic. We had, as of 
February, as I recall, 16 straight months of wage gains of 3 
percent or more, before COVID hit. It is unbelievable. We had a 
poverty rate at record levels since poverty rates began to be 
measured back in the 1950s. We have never had a rate as low as 
we had going into the pandemic. Obviously unemployment was low, 
historically low for many groups, including blacks, Hispanics, 
and others.
    So this is a good thing. We had an opportunity economy that 
many of us talk about, but it actually was happening. And I 
think a lot of it was because of the investment that businesses 
were making, small and large alike, because of the tax reform 
that really made it more advantageous to invest in America: 
$482 billion in equipment, buildings, and--most importantly to 
me--employees by U.S. businesses during this time period after 
the 2017 bill and before the pandemic hit.
    Let me ask you, if I could, about one part of that. And 
that is the corporate rate. My understanding is that President-
elect Biden has talked about raising the corporate rate, and 
also raising the amount of taxes that one would pay for global 
income, both of which I think are going to result in less 
investment in the United States. The whole reason we lowered 
the rate was to be sure we were more or less competitive with 
the rest of the developed world. Our rate is still, frankly--
when you include the State income tax--higher than the average, 
but it is at about the average, whereas before, we had the 
highest rate among all the developed countries. And what people 
were doing was investing overseas, not in America. We were 
losing jobs, and we were losing businesses. Companies were 
inverting, we were losing investment, and much of that has 
started to come back. It has been a good thing.
    The bill introduced a concept of not just lower rates, but 
also this global intangible low-tax income, the GILTI regime, 
which is very complicated, but basically it is anti-base 
erosion, meaning that it effectively acts like a minimum tax on 
foreign earnings of U.S. companies. Prior to that, companies 
could just defer their taxes forever because our rates were so 
high people would defer, and defer, and defer. Now they have to 
pay it. And you know, it is kind of a minimum tax.
    The high U.S. tax rate we had before made the deferral 
necessary, but it also caused this lock-out of foreign earnings 
as a barrier to U.S. investment, again creating incentives for 
acquisitions of U.S. companies by foreign companies that could 
get a better deal.
    So we both lowered the rate and eliminated deferral. As a 
result, we have created a more level playing field. I just am 
worried about these proposals to both increase the corporate 
tax and to double the rate, as I understand it, on GILTI, on 
this minimum tax, from 10\1/2\ to 21 percent. It would put us 
again in a noncompetitive situation relative to our OECD 
trading partners. And you know, the OECD right now is 
considering a global minimum tax rate of 12.5 percent. So they 
are going the opposite way, because they get it. This creates 
more jobs in their countries.
    So I hope that you will push back against that, 
understanding that you may not approve all of the tax cuts and 
tax reforms that were in there, but certainly on the business 
side, this created an incentive to invest in America.
    Senator Crapo. Senator Portman----
    Senator Portman [continuing]. The ability to write off your 
investment.
    Senator Crapo. Senator Portman, we are on a time schedule 
here because another committee needs to take this room. So 
could I ask that to be a question for the record?
    Senator Portman. Well, I would love to hear your response 
in the record for that. Again, I appreciate our conversation on 
that and other issues, and I look forward to hearing from you. 
Thank you.
    Senator Crapo. And, Dr. Yellen, I know you have responded 
to that type of question a couple of times, but if you could 
give a very thorough response to the question for the record, 
because I thought that was a very well-stated question----
    Senator Portman. Thank you, Mr. Chairman.
    Senator Crapo. Thank you.
    Next we will return to Senator Casey.
    Senator Casey. Mr. Chairman, you can hear me now?
    Senator Crapo. Yes. We got it.
    Senator Casey. Thanks. Dr. Yellen, thank you for your 
willingness to serve the American people again. We are grateful 
for that.
    I wanted to focus my questions, maybe two broad questions, 
mostly on children. But they will touch on other issues as 
well.
    First of all, the role of both child care and early 
childhood education, talking about early care learning, the 
importance of that to the economy--and in particular to labor 
force participation by women, which we know is a major 
challenge we have. The pandemic has exposed the importance of 
caregiving on our economy: those who care for and support 
children, who support and care for seniors and people with 
disabilities. We are seeing more clearly now, probably than 
ever, the importance of quality, affordable care for those 
Americans, and the connections between that care and our 
economy.
    In President-elect Biden's American Rescue Plan, he 
included a provision very close to my bill, the Child and 
Dependent Care Tax Credit, the expansion of that. So I just 
wanted to ask you about both the question of child care and the 
care economy as an economic imperative to the country.
    If you could, discuss your ability to elevate this issue, 
both as it relates to COVID-19 as well as the importance in 
terms of the short- and long-term competitiveness of our 
economy.
    Dr. Yellen. Well, thank you for that question, Senator. I 
feel this is a really critical area, both because of the 
pandemic and longer-term. The availability of child care and 
paid leave greatly affects the ability of women to participate 
in the labor force. And once upon a time, we had one of the 
highest labor force participation rates for women of any 
developed country, and that has really changed, and we are no 
longer anywhere near the top.
    And where we stand out is that the United States does much 
less on the front of child care and paid leave than most other 
developed economies. And I agree that the competitiveness of 
our economy and wanting women to be able to participate is 
really critical to address the shortages, and it has been more 
than evident in the pandemic. It is women who have suffered a 
disproportionate loss in jobs, who have a disproportionate 
burden of caring for children who are out of school, and for 
relatives who are ill and need help. And it has really impacted 
them mightily because of a lack of these supports.
    Senator Casey. Well, I appreciate that, because it is, I 
think, very much apparent now because of the pandemic how 
important those programs are, and those strategies for 
caregiving.
    My last question, before my time runs out, Dr. Yellen, is 
about kid savings accounts. This has been an idea that has been 
around, proposed over the last 20 years. I have worked with 
Senator Wyden on the Young American Savers Act. It is a measure 
that I proposed, a similar measure in the debate on the 2017 
tax bill. The Democrats all voted for it.
    I think it is time, finally, to enact this savings account 
to support equity building for our Nation's kids so we can also 
at the same time support emergency savings for their parents.
    Could you discuss briefly--and I know we only have less 
than a minute left--the role of asset building in securing the 
middle class?
    Dr. Yellen. Well, just very briefly, Senator, I certainly 
agree that assets are not only essential for people in dealing 
with an emergency, it is shocking that such a large fraction of 
Americans would not have $400 to deal with an emergency. And it 
is necessary for home ownership, for business formation, for 
saving. And we have huge wealth disparities--even greater than 
income disparities--and a racial wealth gap has also worsened 
over time.
    So looking for strategies to address that gap and promote 
asset building, I think should be very much at the forefront of 
policy.
    Senator Casey. Well, Dr. Yellen, thanks so much. Good luck 
in your confirmation. I will have some other questions for the 
record. Thank you, Mr. Chairman.
    Dr. Yellen. Thank you, Senator.
    Senator Crapo. Thank you, Senator Casey.
    Senator Hassan?
    Senator Hassan. Well, thank you, Mr. Chairman and Ranking 
Member Wyden, for holding this important hearing and doing it 
today. Thank you, Dr. Yellen, for appearing before the 
committee, and for your willingness to serve our country during 
this difficult time. Having someone with your expertise at the 
Treasury is going to be pivotal to helping struggling families 
and businesses as we work to contain the virus, protect and 
create jobs, and rebuild the economy.
    I have three questions that I think we can cover in our 
time. As we discussed when we met earlier this month, Dr. 
Yellen, I am working on a bipartisan effort with Senator Young 
to expand the research and development tax credit for small 
businesses. New businesses and innovative startups are a major 
source of job creation, which is going to be key to rebuilding 
our economy after we contain the virus.
    Dr. Yellen, could you speak to the importance of R&D 
investments to creating jobs and to the economic recovery? And 
at the Treasury, will you work with us to explore ways to 
support R&D through the tax code?
    Dr. Yellen. Thank you, Senator. Certainly I look forward to 
working with you. This is a very important matter. R&D is 
essential to innovation and to the growth of our economy. It 
has made a huge contribution. And I think you are absolutely 
right that new businesses, and innovative businesses, have 
driven job creation.
    So finding ways to support R&D investments, including by 
small or new businesses, is something I look forward to working 
with you on.
    Senator Hassan. Well, thank you, Dr. Yellen. As we continue 
to assist struggling businesses to keep their employees on 
payroll, we also need to strengthen support for the risk-takers 
and innovators who create new jobs and help us grow the 
economy.
    Toward that end, the recent economic relief package 
contained a bipartisan bill that I introduced with Senator Burr 
to allow small businesses to both participate in the Paycheck 
Protection Program and to claim the Employee Retention Credit. 
Unfortunately, according to the National Federation of 
Independent Businesses, one of the supporters of our bill, many 
small businesses remain unaware that they can receive up-front 
payments of the Employee Retention Credit to help keep workers 
on payroll and cover employee health-care costs.
    Dr. Yellen, how can Treasury increase awareness of the 
Employee Retention Credit so that small businesses can quickly 
and effectively receive the full range of economic relief 
available?
    Dr. Yellen. Well, Senator, first let me say that I think 
allowing these businesses to utilize both PPT and the Employee 
Retention Credit was a very worthwhile innovation and should 
really help a lot of businesses. So we want to make sure that 
they know about it.
    I will discuss this, I promise, with the IRS to see if 
there is something that they can do, but perhaps we can also 
work with nonprofits and with groups like the Federation for 
Small Businesses to see if we can find ways to publicize it so 
that they are aware that this is a benefit that is available.
    Senator Hassan. Well, thank you. I think this is an 
important factor in helping us accelerate the recovery and 
protecting jobs. So thank you for your willingness to work with 
us on that.
    I want to switch topics a little bit to the issue of 
terrorist financing. In previous Finance hearings with outgoing 
Secretary Mnuchin, I have raised the importance of Treasury 
programs that combat the financing of terrorist and criminal 
organizations. The bipartisan National Defense Authorization 
Act passed earlier this month included a provision led by 
Senator Warner that established an advisory group with Treasury 
to counter new ways that terrorists use emerging financial 
technology. One area of growing concern, for example, is the 
potential for terrorists and criminals to use cryptocurrency to 
finance their activities.
    So, Dr. Yellen, can you outline some of these emerging 
technological concerns and how Treasury should combat new forms 
of terrorist criminal financing?
    Dr. Yellen. Senator, I think you are absolutely right that 
the technologies to accomplish this change over time, and we 
need to make sure that our methods for dealing with these 
matters of terrorist financing change along with changing 
technology. Cryptocurrencies are of particular concern. I think 
many are used, at least in the transactions sense, mainly for 
illicit finance, and I think we really need to examine ways in 
which we can curtail their use and make sure that anti-money-
laundering does not occur through those channels.
    Senator Hassan. Thank you, Doctor. Thank you, Mr. Chairman. 
My time is up. I look forward to working with you, Dr. Yellen.
    Dr. Yellen. I look forward to working with you as well.
    Senator Crapo. Thank you. And next is Senator Cortez Masto.
    Senator Cortez Masto. Thank you, Mr. Chairman----
    Senator Wyden. Senator Crapo, with leave from my colleague 
from Nevada, and in no way taking from her time, I would just 
like to take maybe 90 seconds to describe where I think we are 
with respect to the Yellen nomination. I hope that will be 
acceptable to my colleague from Nevada. I will be very quick, 
and this does not come off of her time.
    Senator Crapo. Yes.
    Senator Wyden. The majority and minority have been talking, 
and we now have an agreement that Senate Finance Committee 
members will have their questions in for the nominee tomorrow.
    Senator Crapo. Close of business tomorrow.
    Senator Wyden. Close of business tomorrow. So my hope would 
be, Senator Crapo, that we could have Chair Yellen on the floor 
of the United States Senate on Thursday. And obviously we are 
taking it a day at a time, and we have made some headway here 
in the last hour regarding deadlines for member questions. I 
mean, this is a person who has been confirmed again and again 
and again, and all these past Treasury Secretaries are in 
support of her. So I appreciate the discussions that we have 
had in the last hour. We have made some progress. I hope she 
will be on the floor on Thursday. Thank you.
    Senator Crapo. Well, thank you, Senator Wyden. And I will 
talk with Senator Grassley, and we will work with members on 
our side to work expeditiously. Thank you.
    Now, Senator Cortez Masto.
    Senator Cortez Masto. Thank you. Thank you, Mr. Chairman.
    Dr. Yellen, congratulations. Thank you for the courtesy 
meeting last week. I am going to try to keep it brief. It has 
been a long morning and afternoon for you, and I thank you so 
much for your patience. I enjoyed listening to all of your 
responses to my colleagues.
    Two issues: hospitality--and we have talked about that. And 
the other is housing. So let me just talk a little bit about--
as you well know, in Nevada we have been so hard-hit. Before 
the pandemic, the travel and tourism industry was one of the 
largest sectors of the economy. In 2019, travel generated $1.1 
trillion in spending and supported 15.8 million American jobs. 
But the COVID-19 pandemic has devastated the travel industry 
more than any other sector of the economy. And according to 
Oxford Economics, the U.S. lost $510 billion in travel spending 
and 4.5 million travel jobs in 2020.
    So my question to you is, what are your recommendations for 
addressing this hardest-hit service sector and its workers, 
like those in Nevada and across the country?
    Dr. Yellen. Well, Senator Cortez Masto, I am really aware 
of just how badly the Nevada economy has been impacted by the 
pandemic because of the focus on travel, tourism, leisure 
activities. This is, as you said, the hardest-hit sector with 
the most pain and job loss, and getting this pandemic addressed 
and over with so people can go back about their lives and 
travel and enjoy leisure activities is top of the agenda--and 
in the meantime, making sure that we support the workers and 
the businesses that have been so badly affected, giving them 
what they need to get through this and come out the other side, 
and to help State and local governments in a variety of ways 
reopen schools and make sure that you do not have to fire 
emergency workers because of the budget pressures that your 
State faces, and others.
    Senator Cortez Masto. Thank you, Dr. Yellen. Let me be a 
little bit specific. Last fall, Senator Cramer and I introduced 
a bipartisan bill. It is the Hospitality and Commerce Job 
Recovery Act. What it does is, it provides refundable tax 
credits for businesses and individuals to boost demand for 
travel, once it is safe to travel again.
    I am curious what your thoughts are. Can tax credits be an 
effective tool to incentivize spending and help certain sectors 
like the service sector and travel sector recover and the 
economy turn around?
    Dr. Yellen. Well, Senator, I would be glad to take a look 
at that and work with you and examine the details more fully.
    Senator Cortez Masto. I appreciate that. Thank you.
    As you said in your introduction, you know that the sector, 
particularly the service sector, has been so disproportionately 
impacted, we need to continue to provide relief and investments 
in this sector. So I am hopeful that you and the Biden 
administration will work with us moving forward.
    Housing--I know I have about a minute left. Let me ask you 
this--and this was an issue. Nevada is literally dealing with 
an affordable housing crisis that started even before this 
pandemic. I know it is happening across the country. And we 
talked a little bit about this.
    Could you really address how the Treasury Department can 
work with us, as well as the Biden-Harris administration, to 
address what we see in the affordable housing crisis across the 
country?
    Dr. Yellen. It is a huge problem, Senator. And we really 
need to devise effective ways to work on this and support 
affordable housing. Things like the Low-Income Housing Tax 
Credit, I think, have been very important, and we will need to 
come up with other innovative strategies. This really is a 
crisis in many parts of the country.
    Senator Cortez Masto. Well, I know my colleague, Senator 
Cantwell, mentioned this to you as well during this hearing. I 
look forward to working with you, as well as the Biden 
administration, to address this issue.
    Thank you again for your willingness to serve.
    Dr. Yellen. Thank you, Senator. I appreciate it.
    Senator Crapo. Thank you, Senator Cortez Masto.
    Senator Young?
    Senator Young. Dr. Yellen, it is good to see you again. I 
enjoyed our visit the other day. Congratulations once again on 
your nomination.
    Dr. Yellen. Thank you.
    Senator Young. I would like to ask you, for starters, some 
questions about our hardest-hit businesses. You know, it has 
been widely reported that we are in the midst of a K-shaped 
recovery where Wall Street is doing pretty well. So many of our 
small businesses are doing well. In fact, we have seen record 
profits from a number of them. Meanwhile, a number of our Main 
Street firms are, if not hollowed out, certainly just 
pockmarked with businesses that are shuttered on account of 
this pandemic and associated public health measures.
    In your July 17th testimony before a House subcommittee, 
you indicated, Doctor, that there would be scars left on the 
economy. And by that I infer you probably meant an erosion of 
skills in our workforce, a loss of innovation that tends to 
occur among the small firms, to say nothing of the future 
opportunities for growth.
    In the State of Indiana, it is estimated that one in four 
small businesses faces closure, including generations-deep 
family businesses that have really become pillars within given 
communities. So there is a social and cultural dimension to 
this as well. That's all if economic conditions do not improve.
    Blessedly, we have invented these vaccines, and the economy 
will be opening up. And we have a relief package that we came 
together on and passed for the American people before year's 
end. In light of that relief that we have offered, it seems to 
be making a difference. There seem to be some sunnier days 
ahead.
    What do you expect the need to be for additional small 
business assistance? And why do you expect that need to exist 
to a particular level?
    Dr. Yellen. Well, unfortunately, I fear we have some very 
difficult months ahead before the vaccine has been widely 
enough disseminated to really open up the economy and let 
people get back to their regular lives of going out to eat in 
restaurants, and engaging in entertainment, and things that 
involve face-to-face contact.
    So I think the PPP funding included in the last bill is 
tremendously important. We are going to do everything we can to 
work with the Small Business Administration to get that support 
out as quickly and as effectively as we can.
    These small businesses are the lifeblood of their 
communities and provide a disproportionate share of jobs in 
America. And so supporting them--I think of scarring as not 
only affecting workers, but when businesses fail that have been 
the backbones of their communities, that is permanent job loss 
for workers and a tragedy for the communities.
    So this is certainly something we want to do. And if more 
funding is needed, we would come back and ask for that. We have 
asked for some money for grants to the smallest businesses, and 
some funding to support State and local nonprofits in getting 
assistance out.
    Senator Young. Well, and I have to say, that seems prudent 
to me, Doctor. It is my sense, informed by conversations with 
people on the ground as well as economists, that there will be 
additional assistance needed for some of our hardest-hit 
businesses. But we are going to have to continue to monitor 
that. I think that is the right approach.
    I also sense it is prudent--again after consultation with 
others--to hold off certain campaign promises that might have 
been made, and I want to get your perspective on that, in 
particular, tax increases in the middle of a global pandemic 
which has triggered this massive economic downturn.
    Dr. Yellen. So the focus now is not on tax increases. It is 
on programs to help us through the pandemic. But we also, the 
President-elect also wants to pursue his Build Back Better 
agenda to strengthen the economy and make sure that we create 
good jobs at good wages for workers and invest in 
infrastructure and our people. And in that context, there may 
be a need for additional financing. We should not think about 
tax increases in the abstract. I think anything that is 
proposed should be focused on corporations, and on individuals, 
and in the context of a larger program.
    Senator Young. Yes, Doctor. So I will not focus on the 
abstract. Let me get very particular. Are there any elements of 
the revenue-raising portions of the Build Back Better plan that 
you believe should be reconsidered?
    Dr. Yellen. I am not sure what you have in mind. There have 
been a few things that have been specified, but probably not a 
complete program. President-elect Biden has proposed increasing 
the corporate tax and making American companies that offshore 
jobs, reducing those incentives, and in doing that, I think 
worrying about the competitiveness of American business would 
propose to do this in the context of global agreements on 
corporate minimum taxes.
    Senator Young. I am grateful for the answer. I will have to 
probably submit some follow-up questions for the record 
pertaining to the loss of jobs. But should companies invert--
that is, send their headquarters overseas to have lower tax 
rates--which was one of the reasons that the rate was lowered 
initially, but nonetheless----
    Dr. Yellen. We need to avoid that, for sure.
    Senator Young. Yes. Good. We agree on that as a matter of 
principle.
    You and I discussed my proposal with Senator Bennet to 
create a long-term working capital loan program for our 
hardest-hit businesses. It is called the RESTART Act. Sixty 
bipartisan co-sponsors were earned here in the United States 
Senate, roughly 180 in the House of Representatives, and 
thousands of small businesses in Indiana and across the country 
were supportive of this.
    To the extent we need additional small business relief, and 
you have indicated we might, is this something that you might 
work on with me and Senator Bennet to try and perfect and 
perhaps implement in a bipartisan way?
    Dr. Yellen. Absolutely; I would look forward to working 
with you on that.
    Senator Young. Thank you so much.
    Senator Crapo. Thank you, Senator Young.
    Senator Sasse?
    Senator Sasse. Thank you, Mr. Chairman.
    Dr. Yellen, congratulations on your nomination, obviously 
an important capstone to a very distinguished career.
    I want to focus on a set of topics that involve the 
national security equities of the Treasury Department, more 
than some of the topics of the last couple of questions. It is 
my view that whenever the Senate is fulfilling our advice and 
consent obligations with regard to any senior position that has 
national security equities, one of our obligations is to make 
sure that the nominee in question regards herself or himself as 
having a national security portfolio.
    And secondarily, I think is it clear that there is a 
bipartisan consensus in the Senate now--I come to you having 
just been in the Intelligence Committee hearing, first open and 
then closed--and the bipartisan consensus is overwhelming that 
the number one long-term geopolitical threat the United States 
faces, not just in the next 4 years but probably in the next 4 
decades, is the Chinese Communist Party.
    So I want to ask you two questions about that first. Dr. 
Yellen, do you believe that the Secretary of the Treasury is a 
national security position in the President's Cabinet?
    Dr. Yellen. Absolutely. I think Treasury, along with the 
rest of the administration, needs to stay laser-focused on 
that. We have many tools that are implemented through Treasury 
to address national security concerns. The Treasury leads the 
CFIUS process, and we have sanctions and enforcement actions 
that can serve to dismantle financial and support networks of 
those who seek to do us harm. And certainly leadership of 
Treasury is important, and it is a priority.
    Senator Sasse. Thank you. I am glad to hear you say that, 
Dr. Yellen. Both the CFIUS point and the portfolio and 
sanctions regime. I also in the past have chaired the 
subcommittee of Banking that deals with sanctions. And I agree 
with you that you have a very important and professional staff 
in that area, and I am glad to hear that you regard it as a 
priority.
    Do you regard the Chinese Communist Party as an existential 
threat to the United States?
    Dr. Yellen. Well, I regard China as our most important 
strategic competitor, and feel it is necessary to devise an 
administration-wide and multi-faceted approach to address the 
threats that China causes.
    And certainly we need to target illicit activities that are 
linked to theft of intellectual property and trade secrets, 
illegal efforts to acquire critical technologies and sensitive 
U.S. data, and fentanyl traffic, among other things.
    Senator Sasse. Thank you. I agree with your list. In 
addition, I wonder if you would regard Chairman Xi and his 
regime as guilty of genocide in Xinjiang at present?
    Dr. Yellen. I think it is guilty of horrendous human rights 
abuses, yes.
    Senator Sasse. Thank you. I do think the word, not to 
quibble here--I will not make you respond precisely to the word 
``genocide,'' but I think it is important for us to recognize 
what has been happening in Xinjiang is a genocide. And so it is 
not just one issue among many, where we can sort of varnish it 
as merely a geopolitical competitor. Chairman Xi's regime is 
evil, and they are raping and torturing Uigur women at present. 
So I think we need to be well-aware of the nature of the regime 
we are dealing with.
    Obviously one of the most important pieces for the purposes 
of thinking about the future of the U.S. economy is the long-
term technology race we face with China. For years, American 
economic and technological innovation have fueled the CCP's 
mastery of the digital economy, and then they have gone on to 
use that mastery of the digital economy to do a parade of 
horribles, some of which you just listed, importantly.
    Could you walk us through how you think about a review of 
our technological interdependence with China? And do you 
believe that some degree of decoupling is going to be incumbent 
upon us in the next 4 years?
    Dr. Yellen. Well, I think that we face a significant 
competition with China. And to address the subsidies that China 
has put in place, and other policies to erode our technological 
edge, I think first and foremost we have to make sure that we 
as an economy make the investments that enable us to compete 
with China, investments in manufacturing and infrastructure and 
training and research and development, that are ultimately our 
sources of economic strength.
    But we need to aggressively counter unfair practices that 
China uses, whether it is forced technology transfer or to 
invest in ways in the United States that are dangerous to our 
national security.
    Senator Sasse. Thank you. I agree with you that there are a 
number of strategic areas where we are under-investing, from AI 
to quantum to biotech to robotics, machine learning, et cetera. 
But as relates to 5G in particular, and Huawei, could you use 
that as a case study to walk us through kind of how you think 
our policy should be unfolding in the 5G space, and how we 
should be trying to bring together allies to battle the unfair 
practices that we see from Huawei around the world?
    Senator Crapo. And, Senator Sasse, may I ask that you make 
that a QFR? Because we are running against a tight deadline 
here.
    Senator Sasse. Yes, Mr. Chairman. Dr. Yellen, I will make 
that a QFR. And again, congratulations on your nomination, and 
we look forward to working with you on these topics.
    Dr. Yellen. Thank you, Senator Sasse.
    Senator Crapo. Thank you, Senator Sasse.
    We are running up against a tight deadline here, because we 
have to have this room available for another committee. But we 
are going to return to two Senators, Senator Toomey and Senator 
Menendez, and then we will wrap up the hearing.
    And with that, Senator Toomey?
    Senator Toomey. Thank you very much, Mr. Chairman.
    Dr. Yellen, I want to talk just a little bit about housing 
reform, housing finance reform, I should say, which I think in 
some ways is the great unfinished business of the financial 
crisis. As you know, the GSEs, Fannie Mae and Freddie Mac, are 
still in conservatorship, still perceived as too big to fail. 
Now they hold no capital.
    But Secretary Mnuchin and Director Calabria of the HFHA did 
take some significant steps, it seems to me, steps in the right 
direction. While I would have preferred going further, at least 
there is an end to the automatic profit sweep. There is the 
opportunity to build up capital through retained earnings. 
There is a capital target now for the GSEs, and there are rules 
that are meant to limit the acquisition of the riskiest loans 
by the GSEs.
    Have you had a chance to look at these reforms? And have 
you determined that you would support leaving them in place?
    Dr. Yellen. Senator Toomey, it is a very important matter. 
Nothing is more important to the future of housing in the 
United States than what we do with Fannie and Freddie. And I 
need to look carefully at what has been put in place, and 
ultimately we need to find a solution that has bipartisan 
support and to work with Congress to craft an approach.
    Senator Toomey. Okay. Will you commit to developing and 
releasing reform principles both on the regulatory side as well 
as on the legislative side?
    Dr. Yellen. We will certainly give priority to studying 
this issue and coming up with ideas about what should be done.
    Senator Toomey. Okay. And just quickly to follow up on a 
conversation we had the other day about the FSOC designations, 
you know one of my concerns has always been that SIFI 
designations raise the expectations of a taxpayer bailout, 
should a problem occur. In a way, it designates these firms 
that are so designated as too big to fail.
    Interestingly, certain categories of financial institutions 
have not been designated. And it occurs to me that certain 
business models are inherently less of a risk to our financial 
system--for instance, asset managers that simply hold assets on 
behalf of investors, as opposed to banks that intermediate 
credit and transform maturity.
    So asset managers have not been designated as SIFIs thus 
far. Do you agree with the decision that has been made not to 
designate asset managers as SIFIs thus far?
    Dr. Yellen. Well, when I served on FSOC as Fed Chair, it 
was proposed to look at activities that asset managers engage 
in that might pose systemic risks. And a paper was issued that 
mentioned problems of possibly looking at high-leverage and 
hedge funds. A working group was formed that was to look at--I 
think it has since been disbanded--the matter of whether or not 
some hedge funds have dangerous levels of leverage. Open-ended 
mutual funds that promise daily redemption and liquidity that 
invest in assets that are relatively illiquid can pose 
problems.
    And I think we saw some of those problems in March. I think 
these are--this is an activities-based approach that FSOC was 
pursuing. And I thought that that was the right approach.
    So you know, I would hope to look again at some of those 
approaches.
    Senator Toomey. I will just point out, the decision was 
made not to designate them. And I think that was the right 
decision. And I would point out that money market funds have 
been remarkably stable and successful.
    But I appreciate that, and I look forward to working with 
you on these and other issues. Thank you, Mr. Chairman.
    Senator Crapo. Thank you, Senator Toomey.
    Is Senator Menendez back? I am being told that he has not 
been able to make it back. And so that will conclude the 
questioning.
    Dr. Yellen, you have made it through to the end of the 
hearing. I know this was a long day for you, and we appreciate 
the fact that you are willing to serve. We congratulate you on 
your nomination. And as you probably heard in some of the 
discussion, a number of the Senators will want to submit to you 
questions for the record. Some have already been stated here 
during the questioning period. Others will be submitted in 
writing.
    Those questions for the record are due by close of business 
tomorrow. And as Senator Wyden indicated, the committee does 
want to move expeditiously. So we ask you, Dr. Yellen, to 
please respond to these questions for the record as quickly as 
possible.
    We would like some thorough answers to all of these 
questions, but please respond to these as quickly as possible.
    And with that, again, Dr. Yellen, thank you so much for 
being here with us today. And this hearing is concluded.
    [Whereupon, at 1:22 p.m., the hearing was concluded.]

                            A P P E N D I X

              Additional Material Submitted for the Record

                              ----------                              


              Prepared Statement of Hon. Chuck Grassley, 
                        a U.S. Senator From Iowa
    Today, we welcome the Honorable Janet Yellen to consider an 
anticipated nomination for her to become Secretary of the Treasury.

    The role of Treasury Secretary covers responsibilities over a large 
number of issues, including taxes; fiscal management, including the 
debt; financial sanctions; and economic policies. The Treasury 
Secretary also serves as Chair of the Financial Stability Oversight 
Council, which has wide-ranging financial oversight and regulatory 
authorities. Dr. Yellen has a history in academics, think tanks, the 
Federal Government, and at the Federal Reserve.

    This hearing takes place in the midst of an ongoing pandemic along 
with significant divisions in Congress and in the Nation. I hope we can 
move away from partisan divisiveness and personalized attacks against 
each other. Dr. Yellen, if confirmed, you can be instrumental in 
helping generate an environment for bipartisan efforts and reasoned 
debate.

    You've expressed that you have interest in aggressively pursuing 
mitigation efforts toward climate change, which you see as a global 
existential threat.

    The incoming administration has also identified interest in raising 
taxes, coupled with massive spending programs, and working to reduce 
income inequality. And Senator Schumer has said that he'd like to 
change America. I'll be interested in hearing more about those and 
other things as we continue to consider your nomination.

    As I've already indicated to you, I think it would be a big mistake 
to raise taxes on individuals and businesses as they struggle through 
an economic recovery and a pandemic. I know that the incoming 
administration has said they'd like to pursue a two-pronged strategy, 
with a massive stimulus followed by tax hikes coupled with even more 
spending, maybe on infrastructure.

    We are already closely examining President-elect Biden's proposal 
for around $1.9 trillion of stimulus, which even some prominent 
Democrat economists have said does not seem to be well-targeted. With 
the trillions already in the pipeline, and close to $1 trillion of 
relief enacted just a few short weeks ago, it is important to focus 
efforts on pandemic relief. Now is not the time to enact a laundry list 
of liberal structural economic reforms. Dr. Yellen, if you are 
confirmed, I hope that you will work with us on the proposal.

    Moving forward, President-elect Biden has stated numerous times 
that no one making under $400,000 would see their taxes raised. For 
example, last year on CNBC, Biden stated what we can think of as the 
new Biden Rule that ``nobody making under 400,000 bucks would have 
their taxes raised, period. . . .'' While I don't think we need to be 
raising taxes, I will pay close attention to see that the incoming 
administration abides by that new Biden Rule and doesn't go after 
taxing small businesses and the middle class.

    On my part, let me tell you that I believe in free and fair trade, 
both internationally and domestically. International trade is important 
for American business, and especially important to the agricultural 
sector and farmers across America. I will make sure that the incoming 
administration does not overlook the importance of agriculture, or 
overlook the interests of rural America.

    I am against foreign countries trying to tap into the U.S. tax base 
with unilateral digital services taxes, under their self-proclaimed 
``rights'' to invade our tax base. They don't have that right.

    I don't support socialism, or Marxism, or so-called Democratic 
socialism that would end with command-and-control policies. I also 
don't support any rapid or drastic wiping out of industries and their 
workers based mostly on ideology and often on misleading analyses, with 
some notion of taking care of the carnage through massive government 
income and wealth redistribution.

    Prior to the pandemic, although there were economic and structural 
challenges in the economy, we saw historic 50-year lows in unemployment 
rates, record lows for gaps between minority unemployment and the 
overall unemployment rate, inclusive growth with real wages growing 
fastest for low earners, record highs in real median household income, 
stronger median income growth for minorities than others, and 
reductions in income inequality and poverty.

    While those are goals of Democrats, we did not hear much from them 
about these accomplishments. Those accomplishments came about in an 
environment in which tax burdens were lowered and made more 
progressive, and regulation was made more efficient.

    Instead of welcoming the accomplishments, we have heard from the 
other side that we need to change America. I would like to see us 
continue with the accomplishments we saw prior to the pandemic.

    Now, let me close with a comment on transparency. This committee 
has traditionally expressed bipartisan interest in reminding all 
nominees that transparency is important to our members. That means that 
I expect that you will respond to inquiries from any Senator on this 
committee, no matter which side of the aisle they sit on. Prompt and 
thorough responses to our inquiries and investigations is what we 
expect.

                                 ______
                                 
                 Prepared Statement of Hon. Ron Wyden, 
                       a U.S. Senator From Oregon
    Let me just say I share your views on the importance of cooperation 
between the Treasury Department and members of this committee on both 
sides of the aisle. But the fact is, the Treasury's record on this 
matter over the past 4 years was beyond dismal. Requests from my office 
were routinely met with useless, perfunctory responses, and in many 
cases my requests were outright rejected for flimsy reasons. In fact, I 
believe Secretary Mnuchin's responsiveness to requests from Democrats, 
particularly in regard to requests for FinCEN information, merits 
continued oversight. At the same time FinCEN was stonewalling my and 
other Democratic colleagues' requests, the agency was fast-tracking 
Republican requests.

    I believe that under Chair Yellen's leadership, there will be a 
return to the productive relationship we expect between Treasury and 
the bipartisan members of this committee.

    This is the second time in 12 years that a Republican President 
will leave office with the economy in ruins. Today there's also a 
surging pandemic and armed troops guarding the Capitol from far-right 
insurrectionist attack. The Biden administration won't begin with 
inaugural balls; it'll begin with all-out triage.

    My top economic priority going forward is avoiding the mistake 
Congress made in the last recession--taking a foot off the gas pedal 
before recovery took hold. Congress didn't do enough in 2009 to help 
the unemployed and struggling homeowners. If stepping off the gas 
wasn't bad enough, 2 years later House Republicans passed policies that 
yanked out the spark plugs and let the air out of the tires too. In 
Oregon, it took 7\1/2\ years for unemployment to return to its pre-
recession level. That cannot happen again, or else millions and 
millions of people will go through years of needless hardship. Some 
will never recover the lives they had prior to the pandemic.

    Unemployment is once again rising. Federal Reserve data shows that 
workers of modest incomes are facing Great Depression-level 
joblessness. One in five are out of work. The President pushed a false 
choice between public health and economic recovery, and now the country 
has neither.

    The good news is, Chair Yellen is exactly the right person to lead 
the Treasury Department through these big economic challenges. Nobody 
could be better qualified for this job. Nobody deserves more credit 
than Chair Yellen for the longest economic expansion in our history, 
which lasted until the pandemic hit.

    At the Federal Reserve, Chair Yellen challenged decades of 
conventional economic wisdom that put too much focus on inflation and 
deficits. She was correct that 
policy-makers needed to focus more on wages, employment, and 
inequality--and that the economy safely could run a little hotter.

    Republicans criticized her at the time, and later they tried to 
attribute her success to the outgoing administration. But the numbers 
show the successes of Chair Yellen's approach. Unemployment went down, 
wages went up, and a lot of working Americans were better off than they 
were before. Who better to lead the Treasury Department and help kick-
start the next economic expansion than the person who was so integral 
to the last one?

    Right out of the gate, the Biden administration and Congress need 
to send major relief to America's working families. Increasing relief 
checks to $2,000 is key. So is extending enhanced unemployment 
benefits. At Leader McConnell's insistence, the December package 
reduced unemployment benefits from the CARES Act and extended them only 
until the middle of March. There are groceries in my refrigerator that 
will last longer.

    This is a common story in Washington: key economic lifelines 
expired, extended, expired, extended. Congress cannot go on with this 
``snooze button legislating.'' Our workers and our economy need a 
government that's reliable and predictable. That means the Congress 
needs to tether the extension of unemployment benefits to economic 
conditions on the ground with automatic triggers.

    The tattered patchwork of State unemployment insurance systems also 
needs fixing. States including Oregon were overwhelmed when the COVID 
crash hit. In other cases it was because Republican lawmakers have 
intentionally hobbled their UI programs. Workers suffer because of it, 
particularly black and Hispanic workers. Congress needs to increase 
base benefits, bring all workers into the system, and ensure it can 
hold up in a crisis.

    Congress also needs to fix our broken tax code, starting with the 
proposition that corporations, millionaires, and billionaires must pay 
a fair share. I'm developing a proposal to reform the taxation of 
capital gains for the top three-tenths of 1 percent of taxpayers. My 
plan would equalize tax rates for wage and capital income and minimize 
the benefit of deferring taxes.

    If you're a nurse taking care of COVID patients, you can't defer 
your taxes--they come straight out of every paycheck. But if you're a 
billionaire, you can defer, defer, defer--and then never pay any tax at 
all. My plan would put a stop to that unfairness. The revenue would 
preserve the Social Security guarantee for decades to come, with 
additional funding for other priorities.

    The outgoing administration was big on corporate tax giveaways, and 
it increased incentives to ship jobs overseas instead of eliminating 
them. I want to fix those mistakes.

    The Treasury Department will have a key role to play on climate. 
Much of America's energy policy is tax policy. There are currently 44 
energy tax breaks on the books. I have a bill to replace them with 
three focused incentives: clean electricity, clean transportation, and 
energy conservation. I'm also developing legislation that would make 
polluters pay for the costs of climate change, with a substantial 
portion of the revenue returned directly to the American people through 
annual cash payments.

    The Treasury Department also plays a big role in trade. Over the 
last 4 years, the American people heard a lot of tough talk about 
trade, but the administration failed to deliver on most of its big 
promises. It drove away our economic allies, isolating us in the fight 
against trade cheats in China and elsewhere. Members of this committee 
are also concerned about currency manipulation and other tactics used 
to rip off American jobs.

    I'm looking forward to working with Chair Yellen on all these 
issues and more. With the country facing the worst economic crisis in a 
century, it's critical that the Senate approves her nomination on Day 
One. Everybody's got a constitutional right to foolishness, but nobody 
can honestly question Chair Yellen's qualifications. It's a shame that 
this country has never had a woman Treasury Secretary. Anybody who 
doubts Chair Yellen's commitment to policies that give everybody a 
chance to get ahead just hasn't been paying attention.

    Chair Yellen, thank you for your willingness to return to public 
service. President-elect Biden couldn't have made a better choice.

                                 ______
                                 
             Letter From Former Secretaries of the Treasury
We write today to encourage the swift confirmation of Dr. Janet Yellen 
as the 78th United States Secretary of the Treasury. Our Nation faces 
urgent economic and national security challenges, and we believe that 
delaying the confirmation of our government's principal economic 
official would create unnecessary risk during this critical time.

Unprecedented economic conditions have created immense hardship and 
threaten to further undermine our security and prosperity. With 
millions of Americans out of work, long-term unemployment rising, and 
activity stalled in large sectors of the economy, daunting challenges 
will face the incoming administration. Addressing these pressing issues 
will require thoughtful engagement by the Department of the Treasury. 
Any gap in its leadership would risk setting back recovery efforts.

The Secretary of the Treasury also has a vital global role. As the 
chief economic diplomat for the United States and an essential leader 
in international economic policy, the Secretary not only represents our 
Nation to foreign governments and international bodies, but also can 
drive international cooperation to solve vexing global issues. Between 
the recent turmoil in the United States and the magnitude and urgency 
of international economic fallout from COVID-19, our allies are looking 
for reassurance that our country will be a trusted and reliable 
partner. Any delay in confirming Dr. Yellen will only allow concern and 
confusion to grow among our allies.

Beyond domestic and international economic leadership, the Secretary of 
the Treasury is also a critical participant in law enforcement and 
national security efforts. Treasury leads the country's efforts to 
monitor and combat financial crimes, terrorist financing, and other 
illicit financial activity among state and non-state actors. The 
threats to our national security from those who seek to exploit 
financial systems or evade sanctions are real and require sustained 
attention. At a time when our Nation's adversaries are actively looking 
for national security vulnerabilities, any gaps in leadership at 
Treasury will only serve to embolden them.

Finally, a word about Dr. Yellen. As former Treasury Secretaries, we 
are well-aware of the demands of the job and the steepness of the 
learning curve for new officials. It is our view--based on personal 
experience for many of us--that Dr. Yellen's experience, knowledge, 
judgment, and character make her uniquely qualified for this role. Our 
assessment of her integrity and ability is widely shared, including by 
the Senate, which has confirmed her several times, including most 
recently in 2014, and before which she has regularly testified. It is 
hard to imagine a better-prepared nominee to meet this great moment of 
need than Dr. Yellen. We urge the Senate Committee on Finance to move 
expeditiously to report her nomination to the full Senate to allow a 
highly qualified public servant to take up her urgent responsibilities.

Sincerely,

George P. Shultz                    John W. Snow

James A. Baker III                  Henry M. Paulson, Jr.

Robert E. Rubin                     Timothy F. Geithner

Lawrence H. Summers                 Jacob J. Lew

                                 ______
                                 
          Prepared Statement of Hon. Janet L. Yellen, Ph.D., 
            Secretary-Designate, Department of the Treasury
    Chairman Grassley, Ranking Member Wyden, members of the committee, 
it is an honor to appear before you. And, Senator Feinstein, thank you 
for that very kind introduction.

    I have immense respect for the task before this committee: 
rebuilding the American economy from its sharpest downturn in history. 
If I am fortunate enough to be confirmed, I would strive to be a good 
partner in that work. I've spent almost my entire life thinking about 
economics and how it can help people during hard times.

    My father was a doctor in Bay Ridge, Brooklyn. It was more of a 
working-class neighborhood back then. His patients would take the bus 
up from their jobs at factories or docks, and they'd come to our stoop 
because that's where my dad's office was--in our basement.

    He was the kind of doctor who treated the whole patient. He knew 
about their lives; about when they'd been fired or couldn't pay. Those 
remain some of the clearest moments in my childhood. My parents had 
been children of the Depression, and they had a very visceral reaction 
to economic hardship.

    Economics is sometimes considered a dry subject, but I have always 
tried to approach my science the same way my father approached his: as 
a means to help people. And this committee, I believe, has viewed it 
the same way--especially during these last few months. When economists 
look back on the pandemic, I expect they'll conclude that Congress's 
actions averted a lot of suffering.

    But more must be done. Economists don't always agree, but I think 
there is a consensus now: without further action, we risk a longer, 
more painful recession now--and long-term scarring of the economy 
later.

    The pandemic has caused widespread devastation. Whole industries 
have paused their work. Eighteen million unemployment insurance claims 
are being paid every week. Food bank shelves are going empty. The 
damage has been sweeping, and as the President-elect said last 
Thursday, our response must be too.

    Over the next few months, we are going to need more aid to 
distribute the vaccine, to reopen schools, and to help States keep 
firefighters and teachers on the job. We'll need more funding to make 
sure unemployment insurance checks still go out, and to help families 
who are at risk of going hungry or losing the roof over their heads.

    Neither the President-elect, nor I, propose this relief package 
without an appreciation for the country's debt burden. But right now, 
with interest rates at historic lows, the smartest thing we can do is 
act big. In the long run, I believe the benefits will far outweigh the 
costs, especially if we care about helping people who have been 
struggling for a very long time.

    People worry about a K-shaped recovery, but well before COVID-19 
infected a single American, we were living in a K-shaped economy, one 
where wealth built on wealth while working families fell further and 
further behind. This is especially true for people of color.

    At the Fed, I became accustomed to the institution's dual mandate--
to promote stable prices and maximum employment. As Treasury Secretary, 
I think there will be a dual mission too: helping Americans endure the 
final months of this pandemic and keeping people safe while getting 
them back to work. That's our first task. But then there is the longer-
term project. We have to rebuild our economy so that it creates more 
prosperity for more people and ensures that American workers can 
compete in an increasingly competitive global economy.

    Members of the committee, these are very ambitious goals, and I 
know we will need to work together. You can count on me to do that in a 
bipartisan way.

    My husband and son are watching us on C-SPAN from the other room. 
They are not only wonderful people, they are also wonderful--and 
opinionated--economists themselves. So I am used to debate about these 
issues in the house. I'd welcome it in the Senate.

    Thank you, and I look forward to your questions.

                                 ______
                                 

                        SENATE FINANCE COMMITTEE

                  STATEMENT OF INFORMATION REQUESTED 
                               OF NOMINEE

                      A. BIOGRAPHICAL INFORMATION

 1.  Name (include any former names used): Janet Louise Yellen.

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

 3.  Date of nomination: November 30, 2020 (date of announcement of 
nomination).

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

 5.  Date and place of birth: August 13, 1946, Brooklyn, New York, 
United States.

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

 7.  Names and ages of children:

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

        Fort Hamilton High School, 1961-1963 (diploma received May 
        1963).

        Brown University, B.A., 1963-1967 (degree received May 1967).

        Yale University, Ph.D. economics, 1967-1971 (degree received 
        December 1971).

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

        Brookings Institution, Washington, DC, Distinguished Fellow in 
        Residence (2018-Present).

        Federal Reserve Board of Governors, Washington, DC, Chair 
        (2014-2018); Vice Chair (2010-2014).

        Federal Reserve Bank of San Francisco, San Francisco, CA. 
        President and CEO (2004-2010).

        White House Council of Economic Advisors, Washington, DC. Chair 
        (1997-1999).

        Federal Reserve Board of Governors, Washington, DC. Member 
        (1994-1997).

        University of California, Berkeley, Berkeley, CA. Eugene E. and 
        Catherine M. Trefethen Professor of Business and Professor of 
        Economics (1999-2004).

        University of California, Berkeley, Berkley, CA. Bernard T. 
        Rocca Jr. Professor of International Business and Trade (1992-
        1994).

        University of California, Berkeley, Berkeley, CA. Professor 
        (1985-1992).

        University of California, Berkeley, Berkeley, CA. Associate 
        Professor (1982-1985).

        University of California, Berkeley, Berkeley, CA. Assistant 
        Professor (1980-1982).

        London School of Economics, London, England. Lecturer (1978-
        1980).

        Federal Reserve Board of Governors, Washington, DC. Economist 
        (1977-1978).

        Congressional Budget Office, Washington, DC. Consultant (1975-
        1976).

        Federal Reserve Board of Governors, Washington, DC. Consultant 
        (1974-1975).

        Harvard University, Cambridge, MA. Assistant Professor (1971-
        1976).

        Yale University, New Haven, CT. Teaching Fellow and Research 
        Assistant (1969-1971).

        Department of Labor, Washington, DC. Summer Intern (1967).

10.  Government experience (list any current and former advisory, 
consultative, honorary, or other part-time service or positions with 
Federal, State, or local governments held since college, including 
dates, other than those listed above):

        Governor Gavin Newsom's Task Force on Business and Jobs 
        Recovery. Member (2018-2020).

        California Assembly Select Committee on Asian Trade Advisory 
        Board (2003).

        National Academy of Sciences (2000).

        President's Interagency Committee on Women's Business 
        Enterprise. Chair (1997-1999).

        Congressional Budget Office. Panel of Economic Advisers (1993).

        National Science Foundation. Committee of Visitors, Advisory 
        Panel in Economics, Visiting Committee (1977-2004).

11.  Business relationships (list all current and former positions held 
as an officer, director, trustee, partner (e.g., limited partner, non-
voting, etc.), proprietor, agent, representative, or consultant of any 
corporation, company, firm, partnership, other business enterprise, or 
educational or other institution):

        American Economic Association. President (2020).

        Magellan Financial Group, Sydney, Australia (work done in 
        Washington, DC). Consultant (2019-2020).

        Committee for a Responsible Federal Budget. Board of Directors 
        (2018-2020).

        Washington Speakers Bureau, Washington, DC (spoke in many 
        different locations). Paid Speaker (2018-2020).

        Delta Dental of California. Director (2003-2004).

        Yale University. Fellow of the Corporation (2000-2006).

        Bay Area Council. Member of the Executive Committee (2007-
        2010).

        Barter Trust. Adviser (1999-2000).

12.  Memberships (list all current and former memberships, as well as 
any current and former offices held in professional, fraternal, 
scholarly, civic, business, charitable, and other organizations dating 
back to college, including dates for these memberships and offices):

        Bretton Woods Committee. Advisory Council (2019-present).

        Aspen Institute. Economic Strategy Group (2018-present).

        Group of Thirty. Member (2009-2010). Senior Member (2018-
        present).

        Climate Leadership Council. Founding Member (2017-present).

        Yale Program on Financial Stability. Advisory Board (2019-
        present).

        Tobin Center for Economic Policy at Yale University. Advisory 
        Board (2020-present).

        Bloomberg New Economic Forum. Advisory Board (2018-present).

        Washington Center for Equitable Growth. Steering Committee 
        (2018-present).

        National Economic Education Delegation. Honorary Board Member 
        (2018-present).

        National Liberal Club. Member (2018-present).

        British Academy. Member (2016-present).

        Children's Hospital of Oakland, Board of Directors. Honorary 
        Member (2008-2010).

        Western Economic Association. President (2003-2004).

        University of California. Professor Emeritus (2006-present).

        Women's Economic Roundtable. Advisory Board (1999-2004).

        Council on Foreign Relations. Term Member (1976-1981). Member 
        (2005-present).

        American Economic Association. Member (1971-Present). Advisory 
        Committee (1986-1987). Nominating Committee (1988-1990). Vice 
        President (2004-2005). President (2019-2020).

        Pacific Council on International Policy. Board of Directors 
        (2004-2008).

        Western Economics Association. President (2003-2004).

        Macroeconomic Advisers. Senior Adviser (2003-2004).

        Delta Dental of California. Member of Board of Directors (2003-
        2004).

        Jerome Levy Economics Institute. Board of Advisers (2002-2004).

        Economists for Peace and Security. Trustee (2002-2010).

        American Academy of Arts and Sciences. Member (2001-present).

        The Faculty Club, University of California at Berkeley. Member 
        (1982-present). Director (2000-2002).

        Yale Club of San Francisco. Member (1993-1996, 2000-2004).

        National Bureau of Economic Research. Research Associate (1999-
        2010).

        Center for International Political Economy. Advisory Board 
        (1999-2004).

        Brookings Panel on Economic Activity. Advisory Board (1999-
        2004). Senior Advisor (1989-1994). Member (1987-1988, 1990-
        1991).

        OECD High Level Sustainable Development Group. Member (1999-
        2001).

        OECD Economic Policy Committee. Chair (1997-1999).

        British Ambassador's Advisory Committee for the Marshall 
        Fellowships. Member of Advisory Committee (1997-1997).

        Rollingwood Citizens Association. Member (1996-1999).

        Chevy Chase Recreation Association. Member (1994-1999).

        International Trade and Finance Association. Member (1990-
        1994).

        Journal of Economic Perspectives. Associate Editor (1987-1991).

        Hadassah. Member (1987-present).

        Committee on the Status of Women in the Economics Profession. 
        Member (1985-1996).

        Congregation Beth El. Member (1983-1994).

        Hiller Highlands Country Club. Member (1978-present).

        Yrjo Jahnsson Foundation. Lecturer on Macroeconomics (1977-
        1978).

13.  Political affiliations and activities:

        a.  List all public offices for which you have been a candidate 
        dating back to the age of 18.

       None.

        b.  List all memberships and offices held in and services 
        rendered to all political parties or election committees, 
        currently and during the last 10 years prior to the date of 
        your nomination.

       None.

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

       Democratic National Committee. $25,000 (September 24, 2020).

       Biden for President. $2,800 (August 15, 2020).

       Biden for President. $2,800 (March 1, 2020).

       Democratic Congressional Campaign Committee. $250 (February 6, 
2019)

       McCaskill for Missouri. $2,500 (October 20, 2018).

       Democratic Congressional Campaign Committee. $15,000 (October 8, 
2018).

       Donna Shalala for Congress. $1,000 (April 5, 2018).

14.  Honors and awards (list all scholarships, fellowships, honorary 
degrees, honorary society memberships, military medals, and any other 
special recognitions for outstanding service or achievement received 
since the age of 18):

        Phi Beta Kappa (1966).

        Graduated summa cum laude, with highest honors in economics, 
        Brown University (1967).

        National Science Foundation Graduate Fellowship (1967-1971).

        Honorary Woodrow Wilson Fellowship (1967).

        Guggenheim Fellow (1986-1987).

        Maria and Sidney Rolfe Award for National Economic Service, 
        Women's Economic Round Table (1997).

        Wilbur Lucius Cross Medal, Yale University (1997).

        Honorary Doctor of Laws degree, Brown University (1998).

        Honorary Doctor of Humane Letters degree, Bard College (2000).

        Fellow, American Academy of Arts and Sciences (2001).

        Berkeley Fellow (2012).

        Distinguished Fellow, American Economic Association (2012).

        Fellow, Econometric Society (2014).

        Honorary Doctor of Commercial Science, New York University 
        (2014).

        Honorary Doctor of Social Science, Yale University (2015).

        Honorary Doctor of Science, London School of Economics and 
        Political Science (2015).

        Honorary Doctor of Laws, University of Warwick (2015).

        Blackwell Award, Hobart and William Smith Colleges (2015).

        Honorary Doctor of Laws, University of Baltimore (2016).

        Radcliffe Medal, Radcliffe Institute for Advanced Study, 
        Harvard University (2016).

        Paul H. Douglas Award for Ethics in Government (2017).

        President's Medal, Brown University (2018).

        Alice Award, National Woman's Party (2018).

        Women of Power and Influence Award, National Organization for 
        Women (2018).

        Global Leadership Award, Columbia School of International and 
        Public Affairs (2018).

        Brooklyn Public Library Annual Award (2018).

        Council on Economic Education, Visionary Award (2019).

        Foundation Medal. University of California at Santa Cruz 
        (2019).

        Dean's Medal, Brandeis International Business School (2019).

        Truman Medal for Economic Policy (2019).

        Honorary Degree, Tel Aviv University (2019).

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

        ``Consequences of a Tax on the Brain Drain for Unemployment and 
        Income Inequality in Less Developed Countries'' (with Rachel 
        McCulloch), Journal of Development Economics, September 1975; 
        reprinted in J. Bhagwati, editor, The Brain Drain and Taxation: 
        Theory and Empirical Analysis, North Holland, 1976, https://
        www.sciencedirect.com/science/article/abs/pii/03043878759000
        48.

        ``Commodity Bundling and the Burden of Monopoly'' (with William 
        James Adams), Quarterly Journal of Economics, August 1976, 
        https://www.jstor.org/stable/1886045?seq=1.

        ``The Limits of the Market in Resource Allocation'' (with 
        Kenneth Arrow and Steven Shavell), Japan Trade Council, 
        monograph, 1977. (No link available online).

        ``Factor Mobility, Regional Development and the Distribution of 
        Income'' (with Rachel McCulloch), Journal of Political Economy, 
        February 1977, https://www.journals.uchicago.edu/doi/abs/
        10.1086/260546.

        ``What Makes Advertising Profitable?'' (with William James 
        Adams), The Economic Journal, September 1977, https://
        academic.oup.com/ej/article-abstract/87/347/427/
        5220926?redirectedFrom=fulltext.

        ``Factor Market Monopsony and the Allocation of Resources'' 
        (with Rachel McCulloch), Journal of International Economics, 
        January 1980, https://www.sciencedirect.com/science/article/
        abs/pii/0022199680900562.

        ``On Keynesian Economics and the Economics of the Post-
        Keynesians,'' American Economic Review, Papers and Proceedings, 
        May 1980, https://www.
        washingtonpost.com/blogs/wonkblog/files/2013/10/
        postkeynesians.pdf; reprinted in John Maynard Keynes: Critical 
        Assessments, Vol. 4, John Wood, editor, Croom Helm Ltd., 1983.

        ``Can Capital Movements Eliminate the Need for Technology 
        Transfer?'' (with Rachel McCulloch), Journal of International 
        Economics, May 1982, https://www.sciencedirect.com/science/
        article/abs/pii/0022199682900770.

        ``Technology Transfer and the National Interest'' (with Rachel 
        McCulloch), International Economic Review, May 1982, https://
        ideas.repec.org/a/ier/iecrev/v23y1982i2p421-28.html.

        ``Efficiency Wage Models of Unemployment,'' American Economic 
        Review, Papers and Proceedings, May 1984, https://
        econpapers.repec.org/article/aeaaecrev/
        v_3a74_3ay_3a1984_3ai_3a2_3ap_3a200-205.htm; reprinted in New 
        Keynesian Economics, Vol. 2, Coordination Failure and Real 
        Rigidities, N. Gregory Mankiw and David Romer, editors, MIT 
        Press, 1991.

        ``Unemployment Through the Filter of Memory'' (with George 
        Akerlof), Quarterly Journal of Economics, August 1985, https://
        academic.oup.com/qje/article- abstract/100/3/747/1821525.

        ``A Near-Rational Model of the Business Cycle With Wage and 
        Price Inertia'' (with George Akerlof), Quarterly Journal of 
        Economics, September 1985, https://www.jstor.org/stable/
        1882925?seq=1; reprinted in New Keynesian Economics, Vol. 1, 
        Imperfect Competition and Sticky Prices, N. Gregory Mankiw and 
        David Romer, editors, MIT Press, 1991.

        ``Can Small Deviations From Rationality Make Significant 
        Differences to Economic Equilibria?'' (with George Akerlof), 
        American Economic Review, September 1985, https://
        econpapers.repec.org/article/aeaaecrev/v_3a75_3ay_3a
        1985_3ai_3a4_3ap_3a708-20.htm.

        ``Efficiency Wage Models of the Labor Market'' (with George 
        Akerlof), an edited collection of papers with an introduction 
        by the authors, Cambridge University Press, 1986, https://
        www.cambridge.org/core/books/efficiency-wage-models-of-the-
        labor-market/B7BACB7EE736DBEC56D86F5F0068FA55.

        ``Rational Models of Irrational Behavior'' (with George 
        Akerlof), American Economic Review, Papers and Proceedings, May 
        1987, https://econpapers.
        repec.org/article/aeaaecrev/v_3a77_3ay_3a1987_3ai_3a2_3 
        ap_3a137-42.htm.

        ``Fairness and Unemployment'' (with George Akerlof), American 
        Economic Review, Papers and Proceedings, May 1988, https://
        econpapers.repec.org/article/aeaaecrev/
        v_3a78_3ay_3a1988_3ai_3a2_3ap_3a44-49.htm.

        ``Comments and Discussion'' of ``The New Keynesian Economics 
        and the Output-Inflation Trade-off'' (with George Akerlof and 
        Andrew Rose), Brookings Papers on Economic Activity, 1988, Vol. 
        1, https://www.brookings.edu/wp-content/uploads/1988/01/
        1988a_bpea_ball_mankiw_romer_akerlof_rose_yellen.pdf.

        ``Job Switching and Job Satisfaction in the U.S. Labor Market'' 
        (with George Akerlof and Andrew Rose), Brookings Papers on 
        Economic Activity, 1988, Vol. 2, https://www.brookings.edu/
        bpea-articles/job-switching-and-job-satisfaction-in-the-u-s-
        labor-market/.

        ``Is There a J-Curve?'' (with Andrew Rose), Journal of Monetary 
        Economics, July 1989, https://econpapers.repec.org/article/
        eeemoneco/v_3a24_3ay_3a1989_3ai_
        3a1_3ap_3a53-68.htm.

        ``Symposium on the Budget Deficit,'' Journal of Economic 
        Perspectives, Spring 1989, https://www.aeaweb.org/
        articles?id=10.1257/jep.3.2.17.

        ``Comments and Discussion'' of ``The Beveridge Curve'' (with 
        George Akerlof), Brookings Papers on Economic Activity, 1989, 
        Vol. 1, https://www.brookings.
        edu/wp-content/uploads/1989/01/
        1989a_bpea_blanchard_diamond_hall_yellen
        .pdf.

        ``The Fair Wage Effort Hypothesis and Unemployment'' (with 
        George Akerlof), Quarterly Journal of Economics, May 1990, 
        https://www.jstor.org/stable/2937787?seq=1.

        ``Waiting for Work'' (with George Akerlof and Andrew Rose), 
        Federal Reserve Bank of San Francisco, June 1990, https://
        www.nber.org/papers/w3385.

        ``How Large Are the Losses From Rule of Thumb Behavior in 
        Models of the Business Cycle?'' (with George Akerlof) in 
        William Brainard, William Nordhaus and Harold Watts, eds., 
        Money, Macroeconomics and Economic Policy: Essays in Honor of 
        James Tobin, Cambridge, Mass: M.I.T. Press, 1991, https://
        books.
        google.com/
        books?id=dahiA2ryJH0C&pg=PA59&lpg=PA59&dq=%22How+Large
        +are+the+Losses+from+Rule+of+Thumb+Behavior+in+Models+of+the+Bus
        iness+
        Cycle?%22&source=bl&ots=qjQP-Y5Beh&sig=ACfU3U0hlP3x3Ke3y-
        -bLmIzFvv
        bHl5oqQ&hl=en&sa=X&ved=2ahUKEwj4v87euPTtAhUkxVkKHT49AvYQ6AEw
        AXoECAEQAg#v=onepage&q=%22How%20Large%20are%20the%20Losses%20
        from%20Rule%20of%20Thumb%20Behavior%20in%20Models%20of%20the%20
        Business%20Cycle%3F%22&f=false.

        ``East Germany in From the Cold: The Economic Aftermath of 
        Currency Union'' (with George Akerlof, Andrew Rose, and Helga 
        Hessenius), Brookings Papers on Economic Activity, 1991, Vol. 
        1, https://www.brookings.edu/bpea-articles/east-germany-in-
        from-the-cold-the-economic-aftermath-of-currency-union/.

        ``Comments and Discussion'' of ``Unemployment, Non-Employment 
        and Wages: Why Has the Natural Rate Increased Through Time?'' 
        (with George Akerlof), Brookings Papers on Economic Activity, 
        1991, Vol. 2, https://www.
        brookings.edu/book/brookings-papers-on-economic-activity-19912-
        macroeconom
        ics/.

        Comment on ``East German Economic Reconstruction,'' by Rudiger 
        Dornbusch and Holger C. Wolf, in The Transition in Eastern 
        Europe, Olivier Jean Blanchard, Kenneth A. Froot, and Jeffrey 
        Sachs, editors, NBER and University of Chicago Press, 1994, 
        https://www.nber.org/system/files/chapters/c6019/c6019.
        pdf.

        ``Gang Behavior, Law Enforcement and Community Values'' (with 
        George Akerlof), in Henry Aaron, Thomas Mann and Timothy 
        Taylor, eds., Values and Public Policy, Brookings Institution, 
        1994, https://www.brookings.edu/wp-content/uploads/2016/06/
        gang-behavior-law-enforcement-community-values-aker
        lof-yellen.pdf.

        ``An Analysis of Out-of-Wedlock Childbearing in the United 
        States'' (with George Akerlof and Michael Katz), Quarterly 
        Journal of Economics, May 1996, https://www.jstor.org/stable/
        2946680?seq=1.

        ``New Mothers, Not Married: Technology Shock, Demise of Shotgun 
        Marriage, and the Increase in Out-of-Wedlock Births'' (with 
        George Akerlof), Brookings Review, Fall 1996, https://
        www.jstor.org/stable/20080682?refreqid=excelsior
        %3A36435cf3223ac5171fa71415db3b1a52.

        ``An Analysis of Out-Of-Wedlock Births in the United States'' 
        (with George Akerlof), Brookings Policy Brief, August 1996, No. 
        5, https://www.
        brookings.edu/research/an-analysis-of-out-of-wedlock-births-in-
        the-united-states
        /.

        ``Why Kids Have Kids: Don't Blame Welfare, Blame `Technology 
        Shock' '' (with George Akerlof), Slate, November 15, 1996, 
        https://slate.com/news-and-politics/1996/11/why-kids-have-
        kids.html.

        ``Monetary Policy: Goals and Strategy,'' Business Economics, 
        July 1996, https://www.jstor.org/stable/23487605?seq=1.

        ``The `New' Science of Credit Risk Management,'' Federal 
        Reserve Bank of Minneapolis, September 1996, https://
        www.minneapolisfed.org/article/1996/the-new-science-of-credit-
        risk-management.

        ``Plan Helps Families, Nation,'' USA Today, July 30, 1997 at 
        12A. (No link available online).

        ``Trends in Income Inequality and Policy Responses,'' Looking 
        Ahead, October 1997; and James Auerbach and Richard Belous 
        eds., The Inequality Paradox: Growth of Income Disparity, 
        National Policy Association, 1998, https://books.google.com/
        books/about/The_Inequality_Paradox.html?id=W0GsAAAAIA
        AJ.

        ``The Continuing Importance of Trade Liberalization,'' Business 
        Economics, January 1998, https://www.jstor.org/stable/
        23487688?seq=1.

        ``Economic Report of the President,'' February 1998 (with 
        Jeffrey Frankel and Rebecca Blank), https://www.govinfo.gov/
        content/pkg/ERP-1998/html/ERP-1998-frontmatter.htm.

        ``Economic Report of the President,'' February 1999 (with 
        Jeffrey Frankel and Rebecca Blank), https://www.govinfo.gov/
        content/pkg/ERP-1999/pdf/ERP-1999-frontmatter.pdf.

        The Fabulous Decade: Macroeconomic Lessons From the 1990s (with 
        Alan Blinder), The Century Foundation Press, New York, 2001. 
        Reprinted in The Roaring Nineties: Can Full Employment be 
        Sustained? Edited by Alan B. Krueger and Robert Solow, Russell 
        Sage Foundation and Century Foundation, New York, 2001, https:/
        /www.brookings.edu/book/the-fabulous-decade/. Korean 
        translation published by the Korea Institute of Public Finance, 
        2003.

        ``Is He Making the Grade?'', The International Economy, 
        15(5),21 (2001). (No link available online).

        ``Overview Panel Commentary,'' in Economic Policy for the 
        Information Economy, Proceedings of a Symposium Sponsored by 
        the Federal Reserve Bank of Kansas City, Jackson Hole, 
        Wyoming--August-September 2001, https://www.
        kansascityfed.org//media/files/publicat/sympos/2001/papers/
        s02yell.pdf?la=
        en.

        ``Comments and Discussion'' of ``From Reunification to Economic 
        Integration: Productivity and the Labor Market in Eastern 
        Germany'' by Michael Burda and Jennifer Hunt, Brookings Papers 
        on Economic Activity, 2001, Vol. 2, https://www.brookings.edu/
        bpea-articles/from-reunification-to-economic-integration-pro
        ductivity-and-the-labor-market-in-eastern-germany/.

        ``Yale Economics in Washington,'' Foreword to James Tobin, 
        World Finance and Economic Stability, Edward Elgar, 2002, 
        https://www.abebooks.com/servlet/BookDetailsPL?bi=30749104869.

        ``The Binge Mentality in the Federal Budget,'' The New York 
        Times, July 22, 2002, https://www.nytimes.com/2002/07/22/
        opinion/the-binge-mentality-in-the-federal-budget.html.

        ``Government Needs a Return to Fiscal Discipline,'' The Times 
        Union (Albany, NY), October 27, 2002, at BI, http://
        nl.newsbank.com/nl-search/we/Archives?
        p_product=AL&p_theme=al&p_action=search&p_maxdocs=200&s_dispstri
        ng=ye
        llen%20AND%20date(10/27/2002%20to%2010/27/2001)&p_field_date-
        0=YMD_
        date&p_params_date-0=date:B,E&p_text_date-0=10/27/
        2002%20to%2010/27/2001)&p_field_advanced-0=&p_text_advanced-
        0=(yellen)&xcal_numdocs=20&p_
        perpage=10&p_sort=YMD_date:D&xcal_useweights=no.

        ``Discussion'' of ``Robust Monetary Policy Rules,'' by 
        Athanasios Orphanides and John Williams, Brookings Papers on 
        Economic Activity, 2002, Vol. 2, https://www.jstor.org/stable/
        1209203?refreqid=excelsior%3A1634969a8065ba8afc5c3c1f
        1c7af02f&seq=1.

        ``Waiting for Work,'' with George Akerlof and Andrew Rose, in 
        Economics for an Imperfect World: Essays in Honor of Joseph 
        Stiglitz, edited by Richard Arnott, Bruce Greenwald, Ravi 
        Kanbur, and Barry Nalebuff, M.I.T. Press, 2003, https://
        mitpress.mit.edu/books/economics-imperfect-world.

        Comments on Daniel Benjamin and David Laibson, ``Good Policies 
        for Bad Governments: Behavioral Political Economy,'' Federal 
        Reserve Bank of Boston Conference: ``How Humans Behave: 
        Implications for Economics and Economic Policy,'' June 2003, 
        https://www.bostonfed.org/news-and-events/events/economic-
        research-conference-series/how-humans-behave-implications-for-
        economics-and-economic-policy.aspx.

        ``Putting State's Budget Conundrum in Perspective,'' with 
        George Akerlof and Alan Auerbach, Sacramento Bee, July 23, 2003 
        at B7. (No link available online).

        ``Overview Panel Commentary,'' in Monetary Policy and 
        Uncertainty: Adapting to a Changing Economy; Proceedings of a 
        Symposium Sponsored by the Federal Reserve Bank of Kansas City, 
        Jackson Hole, Wyoming--August 2003, https://
        www.kansascityfed.org/publicat/sympos/2003/pdf/Yellen2003.pdf.

        ``Coordinating Monetary and Fiscal Policies in Stabilizing the 
        Economy,'' edited by Adam S. Posen and Benn Steil, Blackwell 
        Publishers, 2004. (No link available online).

        ``Foreword'' to ``Painting the White House Green: Rationalizing 
        Environmental Policy Inside the Executive Office of the 
        President,'' edited by Randy Lutter and Jason Shogren, 
        Resources for the Future, 2004, https://www.routledge.com/
        Painting-the-White-House-Green-Rationalizing-Environmental-
        Policy-Inside/Lutter/p/book/9781891853722.

        ``Discipline and Judgment in Monetary Policy: The Greenspan 
        Years,'' presented at AEA session on ``Innovations and Issues 
        in Monetary Policy: The Last 15 Years,'' January 2004; American 
        Economic Review: Papers and Proceedings, May 2004, https://
        www.aeaweb.org/articles?id=10.1257/0002828041302307.

        ``Reflections on China's Economy,'' Economic Letter, Federal 
        Reserve Bank of San Francisco, November 5, 2004, https://
        www.frbsf.org/economic-research/publications/economic-letter/
        2004/november/reflections-on-china-economy/.

        ``Productivity and Inflation,'' Economic Letter, Federal 
        Reserve Bank of San Francisco, February 18, 2005, https://
        www.frbsf.org/economic-research/publications/economic-letter/
        2005/february/productivity-and-inflation/.

        ``Policymaking on the FOMC: Transparency and Continuity,'' 
        Economic Letter, Federal Reserve Bank of San Francisco, 
        September 2, 2005, https://www.
        frbsf.org/economic-research/publications/economic-letter/2005/
        september
        /policymaking-on-the-fomc-transparency-and-continuity/.

        ``Stabilization Policy: A Reconsideration'' (with George 
        Akerlof), Presidential Address to the Western Economic 
        Association, Economic Inquiry, 2004 (44)1: pp. 1-22, https://
        www.ssc.wisc.edu/mchinn/yellen_akerlof_stabilizationpolicy.

        ``2006: A Year of Transition at the Federal Reserve,'' Economic 
        Letter, Federal Reserve Bank of San Francisco, January 27, 
        2006, https://www.frbsf.org/economic-research/publications/
        economic-letter/2006/january/2006-a-year-of-transition-at-the-
        federal-reserve/.

        ``Enhancing Fed Credibility,'' Economic Letter, Federal Reserve 
        Bank of San Francisco, March 17, 2006, https://www.frbsf.org/
        economic-research/publications/economic-letter/2006/march/
        enhancing-fed-credibility/.

        ``Enhancing Fed Credibility: `Too Much of a Good Thing Can be 
        Wonderful.'--Mae West,'' Business Economics, April 2006, pp. 
        45-51, https://www.jstor.org/stable/
        23490589?refreqid=excelsior%3Af7c48dcfe0b051f01856563035e195a3.

        ``Prospects for the Economy,'' Economic Letter, Federal Reserve 
        Bank of San Francisco, April 28, 2006, https://www.frbsf.org/
        economic-research/publications/economic-letter/2006/april/
        prospects-for-the-economy/.

        ``Monetary Policy in a Global Economy,'' Economic Letter, 
        Federal Reserve Bank of San Francisco, June 2, 2006, https://
        www.frbsf.org/economic-research/publications/economic-letter/
        2006/june/monetary-policy-in-a-global-environment/.

        ``A Monetary Policymaker's Passage to India,'' Economic Letter, 
        Federal Reserve Bank of San Francisco, July 7, 2006, https://
        www.frbsf.org/economic-research/publications/economic-letter/
        2006/july/a-monetary-policymaker-passage-to-india/.

        ``Economic Inequality in the United States,'' Economic Letter, 
        Federal Reserve Bank of San Francisco, December 1, 2006, 
        https://www.frbsf.org/economic-research/publications/economic-
        letter/2006/december/economic-inequality-in-the-united-states/.

        ``The Public Good: Knowledge as the Foundation for a Democratic 
        Society'' (with Randel, Don Michael, Sandra Day O'Connor, Mark 
        Noll, Gwen Ifill, E. L. Doctorow, John W. Rowe, and Ralph J. 
        Cicerone), Bulletin of the American Academy of Arts and 
        Sciences 61(1), 2007, https://www.jstor.org/stable/4048
        1112?refreqid=excelsior%3A4ab4c0ed864ff3711b3495376bc9e9af.

        ``Update on China: A Monetary Policymaker's Report,'' Economic 
        Letter, Federal Reserve Bank of San Francisco, March 9, 2007, 
        https://www.frbsf.org/economic-research/publications/economic-
        letter/2007/march/china-monetary-policy/.

        ``The U.S. Economy and Monetary Policy,'' Economic Letter, 
        Federal Reserve Bank of San Francisco, July 13, 2007, https://
        www.frbsf.org/economic-research/publications/economic-letter/
        2007/july/us-economy-monetary-policy-july
        -2007/.

        ``Recent Financial Developments and the U.S. Economic 
        Outlook,'' Economic Letter, Federal Reserve Bank of San 
        Francisco, September 14, 2007, https://www.frbsf.org/economic-
        research/publications/economic-letter/2007/september/us-
        economic-outlook/.

        ``The U.S. Economy and Monetary Policy,'' Economic Letter, 
        Federal Reserve Bank of San Francisco, December 7, 2007, 
        https://www.frbsf.org/economic-research/publications/economic-
        letter/2007/december/us-economy-monetary-policy-december-2007/.

        ``Prospects for the Economy in 2008,'' Economic Letter, Federal 
        Reserve Bank of San Francisco, February 8, 2008, https://
        www.frbsf.org/economic-research/publications/economic-letter/
        2008/february/economy-prospects-2008/.

        ``Economic Conditions in Singapore and Vietnam: A Monetary 
        Policymaker's Report,'' Economic Letter, Federal Reserve Bank 
        of San Francisco, February 22, 2008, https://www.frbsf.org/
        economic-research/publications/economic-letter/2008/february/
        economic-conditions-singapore-vietnam-monetary-policy/.

        ``The Financial Markets, Housing and the Economy,'' Economic 
        Letter, Federal Reserve Bank of San Francisco, April 18, 2008, 
        https://www.frbsf.org/economic-research/publications/economic-
        letter/2008/april/financial-markets-housing-economy/.

        ``The U.S. Economic Situation and the Challenges for Monetary 
        Policy,'' Economic Letter, Federal Reserve Bank of San 
        Francisco, September 19, 2008, https://www.frbsf.org/economic-
        research/publications/economic-letter/2008/september/us-
        economy-monetary-policy-september-2008/.

        ``The Mortgage Meltdown, Financial Markets, and the Economy,'' 
        Economic Letter, Federal Reserve Bank of San Francisco, 
        November 7, 2008, https://www.frbsf.org/economic-research/
        publications/economic-letter/2008/november/mortgage-financial-
        markets-economy/.

        ``The Path to Recovery,'' Origination News, 17(12),4 (September 
        2008). (No link available online).

        ``Economic Conditions in Korea and Japan: A Monetary 
        Policymaker's Report,'' Economic Letter, Federal Reserve Bank 
        of San Francisco, December 19, 2008, https://www.frbsf.org/
        economic-research/publications/economic-letter/2008/december/
        economy-korea-japan-monetary-policy/.

        ``U.S. Monetary Policy Objectives in the Short and Long Run,'' 
        Economic Letter, Federal Reserve Bank of San Francisco, January 
        9, 2009, https://www.
        frbsf.org/economic-research/publications/economic-letter/2009/
        january/us-monetary-policy-objectives/.

        ``A Minsky Meltdown: Lessons for Central Bankers,'' Economic 
        Letter, Federal Reserve Bank of San Francisco, May 1, 2009, 
        https://www.frbsf.org/economic-research/publications/economic-
        letter/2009/may/minsky-central-bank-asset-price-bubbles/.

        ``A View of the Economic Crisis and the Federal Reserve's 
        Response,'' Economic Letter, Federal Reserve Bank of San 
        Francisco, July 6, 2009, https://www.
        frbsf.org/economic-research/publications/economic-letter/2009/
        july/economic-crisis-federal-reserve/.

        ``Linkages Between Monetary and Regulatory Policy: Lessons From 
        the Crisis,'' Economic Letter, Federal Reserve Bank of San 
        Francisco, November 23, 2009, https://www.frbsf.org/economic-
        research/publications/economic-letter/2009/november/monetary-
        regulatory-policy-crisis/.

        ``Hong Kong and China and the Global Recession,'' Economic 
        Letter, Federal Reserve Bank of San Francisco, February 8, 
        2010, https://www.frbsf.org/economic-research/publications/
        economic-letter/2010/february/hong-kong-china-global-recession/
        .

        ``The Outlook for the Economy and Inflation, and the Case for 
        Federal Reserve,'' Economic Letter, Federal Reserve Bank of San 
        Francisco, March 29, 2010, https://www.frbsf.org/economic-
        research/publications/economic-letter/2010/march/outlook-
        economy-inflation-federal-reserve-independence/.

        ``Closing Panel Presentation,'' Journal of Money, Credit and 
        Banking 42 (2010): 243-48, https://onlinelibrary.wiley.com/doi/
        full/10.1111/j.1538-4616.2010.003
        38.x.

        ``Macroprudential Supervision and Monetary Policy in the Post-
        Crisis World,'' Business Economics 46:1, 2011, pp.3-12, https:/
        /www.federalreserve.gov/newsevents/speech/yellen20101011a.htm.

        ``Many Targets, Many Instruments: Where Do We Stand?'', in What 
        Have We Learned?: Macroeconomic Policy After the Crisis, edited 
        by George Akerlof, Olivier Blanchard, David Romer, and Joseph 
        Stigliz, 31-36, Cambridge, Mass.: M.I.T. Press, 2014, https://
        www.jstor.org/stable/j.ctt9qf899.

        ``Perspectives on Inequality and Opportunity From the Survey of 
        Consumer Finances,'' The Russell Sage Foundation Journal of the 
        Social Sciences, 2(2), May 2016, https://www.jstor.org/stable/
        10.7758/rsf.2016.2.2.02#metadata_info_tab_
        contents.

        ``Inflation, Uncertainty, and Monetary Policy,'' Business 
        Economics 52, 2017, pp. 194-207, https://ideas.repec.org/a/pal/
        buseco/v52y2017i4d10.1057_s11369-017-0057-x.html.

        ``A debt crisis is coming. But don't blame entitlements,'' 
        Washington Post (2018), April 8, 2018, https://
        www.washingtonpost.com/opinions/a-debt-crisis-is-coming-but-
        dont-blame-entitlements/2018/04/08/968df5c2-38fb-11e8-9c0a-
        85d477d
        9a226_story.html.

        ``Monetary policy at the effective lower bound'' (with Kristin 
        J. Forbes, James Hamilton, Eric T. Swanson), Brookings Papers 
        on Economic Activity, August 14, 2018, https://
        www.brookings.edu/wp-content/uploads/2018/09/Yellen_final-
        draft.pdf.

        ``Seven questions for Janet Yellen on financial stability,'' 
        Brookings, January 3, 2019, https://www.brookings.edu/blog/up-
        front/2019/01/03/seven-questions-for-janet-yellen-on-financial-
        stability/.

        ``Economists' Statement on Carbon Dividends: Bipartisan 
        agreement on how to combat climate change'' (co-signatory), 
        Wall Street Journal, January 17, 2019, https://clcouncil.org/
        economists-statement/.

        ``America Needs an Independent Fed'' (with Paul Volcker, Alan 
        Greenspan, and Ben Bernanke), Wall Street Journal, August 5, 
        2019, https://www.wsj.com/articles/america-needs-an-
        independent-fed-11565045308.

        ``The Federal Reserve Must Reduce Long-term Damage From 
        Coronavirus'' (with Ben Bernanke), Financial Times, March 13, 
        2020, https://www.ft.com/content/01f267a2-686c-11ea-a3c9-
        1fe6fedcca75.

        ``Former Fed Chairs Bernanke and Yellen testified on COVID-19 
        and response to economic crisis'' (with Ben S. Bernanke), July 
        17, 2020, https://www.
        brookings.edu/blog/up-front/2020/07/17/former-fed-chairs-
        bernanke-and-yellen-testified-on-covid-19-and-response-to-
        economic-crisis/.

        ``The Senate Is on Vacation While Americans Starve'' (with 
        Jared Bernstein), New York Times, August 24, 2020, https://
        www.nytimes.com/2020/08/24/opinion/coronavirus-federal-
        reserve.html.

        ``Mainstreaming the Transition to a Net-Zero Economy,'' Group 
        of 30's Working Group, October 2020, https://group30.org/
        images/uploads/publications/
        G30_Mainstreaming_the_Transition_to_a_Net-Zero_Economy_2.pdf.

16.  Speeches (list all formal speeches and presentations (e.g., 
PowerPoint) you have delivered during the past 5 years which are on 
topics relevant to the position for which you have been nominated, 
including dates):

        ``Main Street or Wall Street: A New Mandate for Central 
        Banks,'' New Economy Forum (11/16/20).

        ``IC20 Central Banks: Crisis Panacea?'' Bretton Woods Committee 
        (10/12/20).

        ``How the Fed will respond to the COVID-19 recession in an era 
        of low rates and low inflation,'' Brookings Institution (9/1/
        20).

        ``Former Federal Reserve Chairs on Responding to Our Nation's 
        Economic Crisis,'' Testimony with Chairman Ben Bernanke before 
        the Select Subcommittee on the Coronavirus Crisis (7/17/20).

        ``Conversation with Janet Yellen,'' Magellan Financial Group 
        (7/1/20).

        ``A Decade of Dodd-Frank,'' co-hosted by the Brookings 
        Institution and the Center on Finance, Law and Policy at the 
        University of Michigan (6/30/20).

        ``COVID-19 and the economy: What Washington has done and the 
        challenges to State and local governments,'' Brookings 
        Institution (3/30/20).

        ``A Fed duet: Janet Yellen in conversation with Ben Bernanke,'' 
        Brookings Institution (2/27/2020).

        ``The economy and the 2020 election: If the Economy Is Doing So 
        Well, Why Are So Many Struggling?'', Brookings Institution (2/
        26/20).

        ``DA conversation with David Malpass and Janet Yellen,'' the 
        Bipartisan Policy Center (2/4/2020).

        ``Changing Thinking in Economics and Changing the Profile of 
        Economists,'' Economic Policy Institute (10/29/19).

        ``What's (Not) Up With Inflation?'', Hutchins Center on Fiscal 
        and Monetary Policy at Brookings Institution (10/3/19).

        ``The Gender and Racial Diversity of the Federal Government's 
        Economists,'' Hutchins Center on Fiscal and Monetary Policy at 
        Brookings Institution (9/23/19).

        ``The State of American Capitalism,'' Aspen Economic Strategy 
        Group (7/28/19).

        ``Global Perspectives with Janet L. Yellen,'' Federal Reserve 
        Bank of Dallas (4/10/19).

        ``A Conversation With Janet Yellen,'' Vanderbilt University (4/
        4/19). (No link available online.)

        ``Keynote,'' Standard Chartered's Middle East Summit (3/18/19).

        ``Monetary Policy, Currencies and Manipulation,'' Dollars and 
        Sense Podcast, Brookings Institution (2/19/19).

        ``Federal Reserve Chairs: Joint Interview'' (with Jay Powell 
        and Ben Bernanke), American Economic Association Annual Meeting 
        (1/4/19).

        ``Janet Yellen in Conversation With Paul Krugman,'' The 
        Graduate Center, CUNY (12/10/18).

        ``Tools for Managing Financial Crises,'' Yale School of 
        Management (11/26/18).

        ``Managing the Next Financial Shock,'' New Economy Forum (11/6/
        18).

        ``In Conversation With Janet Yellen,'' NACD Global Board 
        Leaders' Summit (10/17/18).

        ``Conversation With Janet Yellen,'' 19th World Knowledge Forum 
        (10/12/18).

        ``The Tenth Anniversary of the Financial Crisis,'' Griswold 
        Center for Economic Policy Studies (9/21/18).

        ``A Fed Duet,'' Hutchins Center on Fiscal and Monetary Policy 
        (2/27/18).

        ``The Current Economic Outlook and Monetary Policy,'' The Joint 
        Economic Committee (11/29/17).

        ``Remarks accepting the 2017 Paul H. Douglas Award for Ethics 
        in Government,'' at the Institute of Government and Public 
        Affairs at the University of Illinois (11/7/17).

        ``A Challenging Decade and a Question for the Future,'' 
        National Economists Club (10/20/17).

        ``The U.S. Economy and Monetary Policy,'' Group of 30 
        International Banking Seminar (10/15/17).

        ``Community Banking in the 21st Century,'' Fifth Annual 
        Community Banking Research and Policy Conference (10/4/17).

        ``Inflation, Uncertainty, and Monetary Policy,'' 59th Annual 
        Meeting of the National Association for Business Economics (9/
        26/17).

        ``Financial Stability a Decade After the Onset of the Crisis,'' 
        Federal Reserve Bank of Kansas City (8/25/17).

        Semiannual Monetary Policy Report to the Congress. The 
        Committee on Banking, Housing, and Urban Affairs, U.S. Senate 
        (7/13/17).

        Semiannual Monetary Policy Report to the Congress. The 
        Committee on Financial Services, U.S. House of Representatives 
        (7/12/17).

        ``So We All Can Succeed: 125 Years of Women's Participation in 
        the Economy,'' Brown University (5/5/17).

        2017 annual conference of the National Community Reinvestment 
        Coalition (3/28/17).

        ``Welcoming Remarks'' at ``Strong Foundations: The Economic 
        Futures of Kids and Communities,'' 10th Biennial Federal 
        Reserve System Community Development Research Conference (3/23/
        17).

        ``From Adding Accommodation to Scaling It Back,'' The 
        Executives' Club of Chicago (3/3/17).

        ``Semiannual Monetary Policy Report to the Congress,'' The 
        Committee on Financial Services, U.S. House of Representatives 
        (2/15/17).

        ``Semiannual Monetary Policy Report to the Congress,'' The 
        Committee on Banking, Housing, and Urban Affairs, U.S. Senate 
        (2/14/17).

        ``The Economic Outlook and the Conduct of Monetary Policy,'' 
        The Stanford Institute for Economic Policy Research (1/19/17).

        ``The Goals of Monetary Policy and How We Pursue Them,'' The 
        Commonwealth Club (1/18/17).

        ``Welcoming Remarks'' at ``Conversation With the Chair: A 
        Teacher Town Hall Meeting,'' Federal Reserve Board (1/12/17).

        ``The Economic Outlook,'' The Joint Economic Committee, U.S. 
        Congress (11/17/16).

        ``Macroeconomic Research After the Crisis,'' 60th Annual 
        Economic Conference. Federal Reserve Bank of Boston (10/14/16).

        ``Banking and the Economy: A Forum for Minority Bankers,'' 
        Federal Reserve Bank of Kansas City (9/29/16).

        ``Supervision and Regulation,'' The Committee on Financial 
        Services, U.S. House of Representatives (9/28/16).

        ``The Federal Reserve's Monetary Policy Toolkit. Designing 
        Resilient Monetary Policy Frameworks for the Future,'' Federal 
        Reserve Bank of Kansas City (8/26/16).

        ``Semiannual Monetary Policy Report to the Congress,'' The 
        Committee on Financial Services, U.S. House of Representatives 
        (6/22/16).

        ``Semiannual Monetary Policy Report to the Congress,'' The 
        Committee on Banking, Housing, and Urban Affairs, U.S. Senate 
        (6/21/16).

        ``Current Conditions and the Outlook for the U.S. Economy,'' 
        The World Affairs Council of Philadelphia (6/6/16).

        ``When the Federal Reserve Speaks . . . The World Listens'' 
        (with former Fed Chairs Ben Bernanke, Paul Volcker, and Alan 
        Greenspan), International House in New York (4/7/2016).

        ``The Outlook, Uncertainty, and Monetary Policy,'' The Economic 
        Club of New York (3/29/16).

        ``Semiannual Monetary Policy Report to the Congress,'' The 
        Committee on Banking, Housing, and Urban Affairs, U.S. Senate 
        (2/11/16).

        ``Semiannual Monetary Policy Report to the Congress,'' The 
        Committee on Financial Services, U.S. House of Representatives 
        (2/10/16).

        ``The Economic Outlook,'' The Joint Economic Committee, U.S. 
        Congress (12/3/15).

        ``The Economic Outlook and Monetary Policy,'' The Economic Club 
        of Washington (12/2/15).

        In addition to the speeches listed above, Dr. Yellen served as 
        a paid speaking guest, as arranged by the Washington Speakers 
        Bureau, for the following organizations on the following 
        dates:\1\
---------------------------------------------------------------------------
    \1\ Dr. Yellen did not deliver prepared remarks during any of these 
appearances.


------------------------------------------------------------------------
      Arranging Organization             Date             Location
------------------------------------------------------------------------
Moore Capital                       03/27/18        Washington, DC
------------------------------------------------------------------------
Jefferies                           04/02/18        New York, NY
------------------------------------------------------------------------
BTIG                                04/03/18        New York, NY
------------------------------------------------------------------------
Strategas Research Partners         04/04/18        New York, NY
------------------------------------------------------------------------
Cisco                               04/12/18 and    Kiawah Island, SC
                                     04/13/18
------------------------------------------------------------------------
Nomura                              04/16/18        New York, NY
------------------------------------------------------------------------
Deutsche Bank                       05/01/18        New York, NY
------------------------------------------------------------------------
UBS                                 05/02/18        New York, NY
------------------------------------------------------------------------
Apollo Global Management            05/09/18        New York, NY
------------------------------------------------------------------------
Itau                                05/16/18        New York, NY
------------------------------------------------------------------------
Experian                            05/21/18        Scottsdale, AZ
------------------------------------------------------------------------
Morgan Stanley                      06/05/18 and    New Orleans, LA
                                     06/06/18
------------------------------------------------------------------------
Stifel Financial                    06/13/18        Boston, MA
------------------------------------------------------------------------
Charles Schwab                      06/14/18        Avon, CO
------------------------------------------------------------------------
Neuberger Berman                    06/20/18        New York, NY
------------------------------------------------------------------------
Credit Suisse                       06/25/18        London, England
------------------------------------------------------------------------
Amundi Asset Management             06/28/18        Paris, France
------------------------------------------------------------------------
Federal Home Loan Bank of Chicago   08/03/18        Chicago, IL
------------------------------------------------------------------------
University of San Francisco         08/29/18        San Francisco, CA
------------------------------------------------------------------------
Association of Foreign Investors    09/07/18        Washington, DC
 in Real Estate
------------------------------------------------------------------------
Carlyle Investment Management       09/13/18        Washington, DC
------------------------------------------------------------------------
BCA Research                        09/24/18        Toronto, Canada
------------------------------------------------------------------------
BNP Paribas                         09/25/18        New York, NY
------------------------------------------------------------------------
Mitsui                              09/27/18        New York, NY
------------------------------------------------------------------------
National Association of Corporate   09/30/18        Washington, DC
 Directors
------------------------------------------------------------------------
Vanguard                            10/01/18 and    Chicago, IL
                                     10/02/18
------------------------------------------------------------------------
Barclays                            10/08/18        Chicago, IL
------------------------------------------------------------------------
Vanguard                            10/08/18 and    Chicago, IL
                                     10/09/18
------------------------------------------------------------------------
World Knowledge Forum               10/12/18        Seoul, South Korea
------------------------------------------------------------------------
Mortgage Bankers Association        10/15/18        Washington, DC
------------------------------------------------------------------------
Macquarie Holdings                  10/26/18        La Quinta, CA
------------------------------------------------------------------------
Finance Montreal                    10/29/18        Montreal, Canada
------------------------------------------------------------------------
Charles Schwab                      10/30/18        Washington, DC
------------------------------------------------------------------------
Chicago Mercantile Exchange         11/13/18        Naples, FL
------------------------------------------------------------------------
Caixin                              11/13/18        Naples, FL
------------------------------------------------------------------------
JP Morgan Chase                     11/14/18        New York, NY
------------------------------------------------------------------------
Turnaround Management               11/15/18 and    Chicago, IL
                                     11/16/18
------------------------------------------------------------------------
Bank of America                     11/29/18        New York, NY
------------------------------------------------------------------------
Citadel                             12/11/18        New York, NY
------------------------------------------------------------------------
UBS                                 01/06/19        Atlanta, GA
------------------------------------------------------------------------
Wealth Vest                         01/09/19        Washington, DC
------------------------------------------------------------------------
National Retail Federation          01/14/19        New York, NY
------------------------------------------------------------------------
ING                                 01/15/18        Amsterdam,
                                                     Netherlands
------------------------------------------------------------------------
PricewaterhouseCoopers              01/23/19        Davos, Switzerland
------------------------------------------------------------------------
City National Bank                  01/28/19 and    New York, NY;
                                     01/29/19 and    Washington, DC;
                                     01/30/19 and    Orange County, CA;
                                     01/30/19 and    Los Angeles, CA;
                                     01/31/19        and San Francisco,
                                                     CA
------------------------------------------------------------------------
Structured Finance Industry Group   02/26/19        Las Vegas, NV
------------------------------------------------------------------------
Standard Chartered Bank             03/03/19        Dubai, UAE
------------------------------------------------------------------------
Citi                                03/06/19 and    New York, NY and
                                     03/11/19 and    London, England
                                     03/12/19
------------------------------------------------------------------------
Entrust                             03/07/19        New York, NY
------------------------------------------------------------------------
Credit Suisse--Hong Kong            03/25/19        Hong Kong
 Development Council
------------------------------------------------------------------------
Texas Christian University          03/28/19        Fort Worth, TX
------------------------------------------------------------------------
BNP Paribas                         04/02/19        Brussels, Belgium
------------------------------------------------------------------------
Institute for Supply Management     04/09/19        Houston, TX
------------------------------------------------------------------------
PIMCO                               05/05/19 and    Newport Beach, CA
                                     05/06/19
------------------------------------------------------------------------
National Investment Center          09/12/19        Chicago, IL
------------------------------------------------------------------------
Bank of America                     10/02/19        New York, NY
------------------------------------------------------------------------
Barclays                            10/15/19        New York, NY
------------------------------------------------------------------------
Citadel                             10/17/19 and    Hong Kong and New
                                     12/3/19         York, NY
------------------------------------------------------------------------
Google                              10/30/19        Washington, DC
------------------------------------------------------------------------
Magellan Financial Group            10/31/19        Washington, DC
------------------------------------------------------------------------
Prudential Global Investment        11/06/19        New York, NY
 Management
------------------------------------------------------------------------
HSM                                 11/21/19        New York, NY
------------------------------------------------------------------------
Stifel Financial                    12/04/19        New York, NY
------------------------------------------------------------------------
Hong Kong Development Council       01/13/20        Hong Kong
------------------------------------------------------------------------
CFA Society Atlanta                 02/05/20        Atlanta, GA
------------------------------------------------------------------------
Magellan Financial Group            03/31/20 and    Teleconferences
                                     05/12/20 and
                                     08/20/20
------------------------------------------------------------------------
Citi                                4/30/20 and 5/  Webinars
                                     19/20 and 5/
                                     20/20 and 6/
                                     15/20 and 7/
                                     15/20 and 10/
                                     14/20
------------------------------------------------------------------------
Fiserv                              05/26/20        Webinar
------------------------------------------------------------------------
Ares Management                     05/26/20        Webinar
------------------------------------------------------------------------
Salesforce                          06/24/20        Webinar
------------------------------------------------------------------------
Goldman Sachs                       06/17/20        Webinar
------------------------------------------------------------------------
Barclays                            07/29/20        Webinar
------------------------------------------------------------------------
Magellan Financial Group \2\        11/16/20        Teleconferences
------------------------------------------------------------------------
Principal Financial Investors       09/17/20        Webinar
------------------------------------------------------------------------
Credit Suisse                       09/30/20        Webinar
------------------------------------------------------------------------
Pillsbury Winthrop Shaw Pittman     10/09/20        Webinar
------------------------------------------------------------------------
PMI                                 10/22/20        Webinar
------------------------------------------------------------------------
Standard Chartered Bank             10/27/20        Webinar
------------------------------------------------------------------------
Advisor Group                       10/28/20        Webinar
------------------------------------------------------------------------
Citadel                             10/09/20 and    Webinars
                                     10/20/20 and
                                     10/26/20 and
                                     10/27/20
------------------------------------------------------------------------
Daiwa Securities                    11/05/20        Webinar
------------------------------------------------------------------------
Deloitte                            11/20/20        Webinar
------------------------------------------------------------------------
\2\ Dr. Yellen's engagement on November 16, 2020 was not arranged by
  Washington Speakers Bureau.


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

        I served as chairman of the Board of Governors of the Federal 
        Reserve System from February 2014 to February 2018 and as vice 
        chairman between October 2010 and February 2014. I served as 
        President and Chief Executive Officer of the Federal Reserve 
        Bank of San Francisco from 2004 to 2010 and as Governor of the 
        Federal Reserve System between August 1994 and February 1997. 
        Through this service, and my background in macroeconomics, I 
        acquired an understanding of major issues facing the U.S. and 
        global economies, and the roles of monetary and fiscal policy 
        in supporting economic growth, job creation, and price 
        stability. I participated during these years in financial 
        crisis interventions and helped to establish a Division of 
        Financial Stability at the Federal Reserve Board. As Chair, I 
        participated as a member of the Financial Stability Oversight 
        Council. I also oversaw banking supervision and regulation, and 
        the operation of the payments system. This background will 
        inform my work at Treasury as Chair of FSOC, and on financial 
        regulation more generally. This experience is also relevant to 
        Treasury's role with respect to the Bureau of Printing and 
        Engraving and the Mint. During my term as Chair of the Federal 
        Reserve, I actively participated in the G20 and G7 Ministers 
        and Central Bank Governors meetings and those of the IMF. As 
        Treasury Secretary, I would participate in these same 
        international bodies. I also was deeply involved in the Federal 
        Reserve's work in Community Development and met regularly with 
        representatives of community organizations, developing an 
        understanding of the particular challenges facing low- and 
        moderate-income communities in obtaining access to credit and 
        stable jobs. This background will inform my work at the 
        Treasury Department in these same areas. I also gained 
        experience at the Federal Reserve in managing a large and 
        diverse organization--skills that will be needed at Treasury as 
        well.

        My training is as a professional economist with a specialty in 
        macroeconomics and international economics. I have published 
        original research on a wide variety of topics in international 
        and macroeconomics. I am best known for my work exploring the 
        causes of price and wage rigidity. This work provides a basic 
        rationale for the use of monetary policy and fiscal policy to 
        stabilize the economy. My research has also focused on the 
        causes and consequences of unemployment.

        From 1980 until I joined the Federal Reserve Board as a 
        Governor in 1994, and for 5 years after leaving the Council of 
        Economic Advisers, I served on the faculty of the Walter A. 
        Haas School of Business at the University of California, 
        Berkeley, where I taught international and macroeconomics in 
        the MBA and executive education programs of the school. 
        Beginning in 1999, I also held a faculty appointment in the 
        Department of Economics.

        I received my B.A. summa cum laude from Brown University in 
        1967 and my Ph.D. in economics from Yale University in 1971. 
        From 1971 to 1976 I served on the faculty of the Economics 
        Department at Harvard University, after which I served as an 
        economist in the International Finance Division of the Federal 
        Reserve Board. I was also a faculty member at the London School 
        of Economics and Political Science before moving to Berkeley.

                   B. FUTURE EMPLOYMENT RELATIONSHIPS

 1.  Will you sever all connections (including participation in future 
benefit arrangements) with your present employers, business firms, 
associations, or organizations if you are confirmed by the Senate? If 
not, provide details.

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

        No.

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

        No.

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

        Yes.

                   C. POTENTIAL CONFLICTS OF INTEREST

 1.  Indicate any current and former investments, obligations, 
liabilities, or other personal relationships, including spousal or 
family employment, which could involve potential conflicts of interest 
in the position to which you have been nominated.

        Any potential conflict of interest will be resolved in 
        accordance with the terms of my ethics agreement, which was 
        developed in consultation with ethics officials at the 
        Department of the Treasury and the Office of Government Ethics. 
        I understand that my ethics agreement has been provided to the 
        committee. I am not aware of any potential conflict other than 
        those addressed by my ethics agreement.

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

        Any potential conflict of interest will be resolved in 
        accordance with the terms of my ethics agreement, which was 
        developed in consultation with ethics officials at the 
        Department of the Treasury and the Office of Government Ethics. 
        I understand that my ethics agreement has been provided to the 
        committee. I am not aware of any potential conflict other than 
        those addressed by my ethics agreement.

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

        In my personal capacity, and solely on my own behalf, I have 
        provided technical advice and publicly supported the following 
        bills: The Paycheck Recovery Act (H.R. 6918), The Worker Relief 
        and Security Act (H.R. 7821), and The HEROES Act (H.R. 6800). 
        On my own behalf, I have also testified before Congress and 
        advocated for the need of additional fiscal support during the 
        COVID crisis.

 4.  Explain how you will resolve any potential conflict of interest, 
including any that are disclosed by your responses to the above items. 
(Provide the committee with two copies of any trust or other 
agreements.)

        Any potential conflict of interest will be resolved in 
        accordance with the terms of my ethics agreement, which I 
        understand has been provided to the committee.

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

                       D. LEGAL AND OTHER MATTERS

 1.  Have you ever been the subject of a complaint or been 
investigated, disciplined, or otherwise cited for a breach of ethics 
for unprofessional conduct before any court, administrative agency 
(e.g., an Inspector General's office), professional association, 
disciplinary committee, or other ethics enforcement entity at any time? 
Have you ever been interviewed regarding your own conduct as part of 
any such inquiry or investigation? If so, provide details, regardless 
of the outcome.

        In 2015 the Federal Reserve's Inspector General's office 
        investigated Medley Global Advisers' publication of important 
        information expected to appear in Fed meeting minutes the next 
        day. I was interviewed in connection with this unauthorized 
        disclosure and fully cooperated. The Inspector General's 
        investigation was completed.

 2.  Have you ever been investigated, arrested, charged, or held by any 
Federal, State, or other law enforcement authority for a violation of 
any Federal, State, county, or municipal law, regulation, or ordinance, 
other than a minor traffic offense? Have you ever been interviewed 
regarding your own conduct as part of any such inquiry or 
investigation? If so, provide details.

        No.

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

        To my knowledge, in my personal capacity I have never been a 
        party in interest to any administrative agency proceeding or 
        civil litigation. As a Governor and Chair of the Federal 
        Reserve Board, I was named in my official capacity as a party 
        in a number of lawsuits. I can provide information on any of 
        those lawsuits if requested by the committee.

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

        No.

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

        None.

                     E. TESTIFYING BEFORE CONGRESS

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

        Yes.

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

        Yes.

                                 ______
                                 
   Questions Submitted for the Record to Hon. Janet L. Yellen, Ph.D.
               Questions Submitted by Hon. Chuck Grassley
                      individual/family tax issues
    Question. During the campaign, President Biden pledged not to 
increase taxes on anyone making under $400,000. However, a significant 
tax increase will go into effect on millions of middle-class taxpayers 
in 2026 unless Congress acts to extend the tax cuts and reforms enacted 
in 2017. Given President Biden's campaign pledge, will you, if 
confirmed as Treasury Secretary, work with Republicans in Congress to 
make these tax cuts permanent in order to prevent a massive tax 
increase on American Families?

    Answer. Expiration of particular aspects of the Tax Cuts and Jobs 
Act of 2017 will impact taxpayers with incomes under $400,000. As 
noted, President Biden pledged during the campaign that no American 
taxpayer with income under this threshold will be subject to a tax 
increase. If confirmed as Treasury Secretary, I will work with members 
of Congress to address the expiration of various aspects of the 2017 
tax law, including in particular those that impact middle-class 
taxpayers and families with incomes below the $400,000 threshold.

    Question. At various times during the campaign, President Biden 
suggested he would repeal the Tax Cuts and Jobs Act either in full or 
in part. Please indicate (yes or no) whether the incoming Biden 
administration supports the following:

    Would the Biden administration support repealing the doubling of 
the Child Tax Credit from $1,000 to $2,000? If no, would the 
administration support making this provision permanent?

    Would the Biden administration support repealing the enhanced 
standard deduction, which increased the standard deduction from $6,500 
to $12,000 for singles, from $13,000 to $24,000 for married couples, 
and from $9,550 to $18,000 for heads of household in 2018? If no, would 
the administration support making this provision permanent?

    Would the Biden administration support repealing the reduced tax 
rates put in place for middle-class taxpayers, which included reducing 
the 15-percent bracket to 12 percent? If no, would the administration 
support making this provision permanent?

    Would the Biden administration support repealing the qualified 
business income deduction, which allows small businesses to deduct up 
to 20 percent of their qualified business income? If no, would the 
administration support making this provision permanent?

    Answer. During the campaign, the President advanced a series of 
principles around tax policy in general, and the 2017 tax cut in 
particular. In describing how he wants to repeal the parts of the 2017 
tax cuts that benefited the wealthiest Americans and large companies, 
he clarified that the repeal of certain aspects of the tax law would be 
restricted only to those taxpayers making more than $400,000 a year, 
with a firm commitment that taxpayers earning less than this amount 
would not see their taxes increase. At the same time, throughout the 
campaign and following the presidential election, President Biden has 
proposed a series of tax cuts and policy initiatives, such as an 
expansion in the Child Tax Credit and additional financial support for 
small businesses, aimed at strengthening the progressivity of the tax 
code and aiding small businesses during the recovery. If confirmed, I 
will work with Congress to implement a fair, efficient, pro-growth tax 
code that provides relief for middle-class families, workers, and small 
business owners.

    Question. Senate and House Democrats have argued for repealing the 
$10,000 cap on the State and local tax (SALT) deduction as part of 
pandemic relief efforts. According to the Tax Policy Center, a joint 
project of the Urban Institute and Brookings Institution where you are 
a distinguished fellow, such a proposal included in a House-passed 
pandemic relief measure would provide the top 0.1 percent of households 
an average tax cut of nearly $144,000. At the same time it effectively 
would give no benefit to the bottom half of households. In your 
opinion, does it make sense for pandemic relief efforts to prioritize 
six-figure tax cuts for the wealthiest few when millions of middle-
class American families are struggling to make ends meet? Would you 
oppose including a repeal of the SALT cap in any further relief or 
stimulus measures?

    Answer. See response to the next question.

    Question. President Biden's position on the SALT cap was less than 
clear during the campaign. Third-party analyses of his campaign 
proposals have come to different conclusions on his intentions. For 
instance, the Tax Policy Center assumes he would not repeal the SALT 
cap, but would allow it to expire at the end of 2025. However, an 
analysis by the American Enterprise Institute assumes his intent is to 
repeal the SALT cap. Can you please clarify what the incoming 
administration's position is regarding the SALT cap?

    Answer. In response to both questions, as I noted at the hearing, I 
certainly believe in a fair and progressive tax code where wealthy 
individuals and corporations pay their fair share. On this issue, as 
with many others, it is important to consider the entire equation. For 
example, it is critical to study and evaluate what the impact of the 
SALT cap has had on State on local governments, and those who rely upon 
their services. I will work with those at Treasury and throughout the 
administration in evaluating those impacts, as well as other aspects of 
this issue.

    Question. President Biden has proposed reducing the estate-tax 
exemption amount from the current level of approximately $11.5 million 
to only $3.5 million, coupled with an increase in the top estate-tax 
rate from 40 percent to 45 percent. This change would 
disproportionately affect farmers and small business owners in Iowa and 
across the Nation through wasteful compliance costs and increased 
taxes. If confirmed, will you work to promote tax policy that will not 
harm farmers and small business owners and their families?

    Answer. If confirmed, I look forward to working with you to advance 
a range of policies that the President has proposed to strengthen rural 
America and small businesses.

    On the President's estate tax proposal in particular, it may be 
helpful to note that only about the wealthiest 6 out of every 1,000 
estates would face any tax--less than 1 percent--and every couple with 
assets under $7 million would be fully exempt from the estate tax.
                         retirement tax issues
    Question. Millions of retirees and participants in multiemployer 
pension plans face an impending crisis. Many plans are in poor 
financial health, and the PBGC's multiemployer pension insurance fund 
is projected to be insolvent in 2026 according to PBGC's latest annual 
report. I am committed to finding a bipartisan solution that can 
resolve this crisis. If confirmed, will you commit to working with this 
committee and other interested Senators on a long-term solution that 
will secure the retirement benefits for these retirees while also 
reforming the underlying system and ensuring taxpayer dollars will not 
be used to finance a private-sector system in perpetuity?

    Answer. This is a critical time for the PBGC. Millions of working 
people and retirees are counting on it to help pay and secure their 
hard-earned pensions. I know Congress has been trying to address the 
multiemployer pension crisis for a number of years and, if confirmed, I 
will work with this committee and the Department of Labor to find and 
enact a comprehensive solution to this problem. The President supports 
passage of the Butch-Lewis Act, which offers low-interest loans to 
financially troubled multiemployer plans--helping them to meet their 
commitments.

    Question. As part of his tax plan, President Biden has promised to 
change the tax benefits of contributing to tax-deferred retirement 
accounts. Under the Biden plan, instead of contributing pre-tax dollars 
to a retirement account such as a 401(k), workers would be entitled to 
a tax credit equal to after-tax amounts contributed. If enacted, this 
approach would significantly change the way Americans save for 
retirement and could end up discouraging retirement saving. If 
confirmed, will you commit to working with this committee to ensure 
that any changes to the retirement savings system don't disincentivize 
workers from saving?

    Answer. During the campaign, President Biden called for the 
equalization of the tax benefits for retirement saving across the 
income scale. There are many possible options for making retirement 
contributions more generous to middle-income families. I look forward 
to studying this issue further, as a way of building wealth for the 
middle class.

    Question. As you know, Congress passed the SECURE Act in 2019, 
which made improvements to the retirement savings system. There is 
bipartisan support for additional legislation that would further 
incentivize retirement savings and make it easier for small businesses 
to provide employees with a retirement plan. If confirmed, will you 
support this effort?

    Answer. I look forward to working with you to find ways to improve 
the retirement savings system. During the campaign, President Biden 
proposed to give small businesses a tax break for starting a retirement 
plan and giving workers the chance to save at work. In addition, under 
the President's plan, almost all workers without a pension or 401(k)-
type plan will have access to an ``automatic 401(k),'' which would 
provide the opportunity to easily save for retirement at work--putting 
millions of middle-class families on the path to a secure retirement.

    Question. Multiemployer pension plans are not the only pension 
plans facing a looming crisis. Many State and local government pension 
plans are severely underfunded and, in too many cases, have been 
mismanaged. Absent reform, these public pension plans may soon be 
unable to pay benefits to retirees, and making matters worse, these 
State and local programs have never been covered by the Pension Benefit 
Guaranty Corporation's insurance program of last resort. This crisis 
has caused some to suggest that the Federal Government should bail out 
these State-based pension plans. Instead of taxpayers in all States 
bearing the responsibility for subsidizing the failing pension plans of 
a few States, other options should be explored. For example, private-
sector solutions such as annuities could help transfer some of the risk 
away from the troubled plans. If confirmed, will you commit to working 
with this committee and other interested Senators to evaluate all 
possible solutions to this crisis that will secure the retirement 
benefits for many public-sector retirees while avoiding the need for 
taxpayers to subsidize State and local pension benefits?

    Answer. If confirmed, I look forward to working with members of 
this committee and other Senators to explore this issue and evaluate 
potential policies that might address it.
                      domestic business tax issues
    Question. Prior to the Tax Cuts and Jobs Act (TCJA), the United 
States had one of the highest corporate income tax rates among 
developed countries. TCJA lowered the corporate rate to ensure that our 
domestic businesses would remain globally competitive. Even at 21 
percent, the United States still holds the 11th highest corporate tax 
rate out of the top 36 developed countries, according to the Tax Policy 
Center.\1\
---------------------------------------------------------------------------
    \1\ https://www.taxpolicycenter.org/fiscal-fact/oecd-corporate-tax-
rate-ff-01042021.

    President Biden has proposed increasing the 21-percent rate to 28 
percent. If enacted, the United States once again would have one of the 
highest business tax rates among developed countries. Unfortunately, 
not just U.S. companies would be affected by the rate increase. There 
is an economic consensus that a significant portion of the corporate 
income tax falls on workers in the form of reduced wages and benefits. 
Even the Tax Policy Center, which is a joint venture of the Urban 
Institute and Brookings Institution where you are a Distinguished 
Fellow, assumes 20 percent of the corporate tax falls on workers. 
Similarly, the Joint Committee on Taxation and Congressional Budget 
Office have both concluded that 25 percent of the corporate tax is 
borne by workers. If the corporate tax rate is increased to 28 percent 
as proposed, American workers will also feel the burden through fewer 
---------------------------------------------------------------------------
jobs, reduced wages, and less benefits.

    What are your views on increasing the corporate tax rate above that 
of most developed countries, particularly if a significant portion of 
the rate increase would also be borne by American workers?

    With the unemployment rate continuing to be high due to the COVID-
19 pandemic, wouldn't an increase in the corporate tax rate that is 
borne in significant part by labor hinder efforts to restore the 
historically low unemployment rates we saw in 2019?

    Answer. As I discussed in my testimony, President Biden's economic 
strategy and investments in people, infrastructure, research and 
development--will create good-paying jobs and make our economy more 
productive. The President believes that it is critical that we raise 
additional revenues from the wealthiest Americans and corporations to 
cover our long-term obligations to our Nation's seniors and many 
others.

    Question. The Tax Cuts and Jobs Act (TCJA) introduced section 199A 
of the Internal Revenue Code, which provides a 20-percent deduction for 
pass-through businesses, such as sole proprietorships, partnerships and 
S corporations, with qualifying business income. Section 199A was 
intended to provide parity for pass-through businesses that did not 
benefit from the reduction in the corporate tax rate. Most small 
businesses operate in pass-through form, and many of these small 
businesses have been hardest hit by the COVID-19 pandemic.

    How do you view raising taxes on small businesses through the 
repeal of section 199A?

    Answer. President Biden is committed to improving the economic 
environment for small businesses through a variety of strategies. This 
begins with providing necessary support during the pandemic so that 
small business owners can keep their lights on, and continues with an 
assortment of policies that will provide much-
needed capital to aspiring entrepreneurs--especially those in 
underserved communities and without existing banking relationships.

    For example, in the emergency package he unveiled last week, 
President Biden proposed policies that would provide small businesses 
with the funding they need to reopen and rebuild. In that package, 
President Biden proposed to (1) provide $15 billion in grants to more 
than 1 million of the hardest hit small businesses and (2) leverage $35 
billion in government funds into $175 billion in additional small 
business lending and investment to help entrepreneurs innovate, create 
and maintain jobs, build wealth, and provide the essential goods and 
services that communities depend on.

    President Biden is also committed to a tax code which rewards work, 
not just wealth, and this extends to the work supplied by small 
business owners. As section 199A is a relatively new provision, I 
commit to studying its impact on small businesses since its inception 
to determine the extent to which it is helping to improve the prospects 
of America's small business owners.

    Question. Currently, under section 174 of the Internal Revenue 
Code, U.S. businesses can immediately deduct research and experimental 
(R&E) costs, incentivizing research investment and job creation in the 
United States. Beginning next year, however, U.S. businesses will be 
required to capitalize and amortize those costs over 5 years rather 
than immediately deducting them. Immediate expensing of research 
expenditures provides a critical incentive for investment in 
innovation.

    President Biden's ``Made in America'' tax proposals suggest that 
the Biden administration plans to encourage investment in 
manufacturing, jobs, and innovation in the United States. Would you 
support maintaining the current immediate deductibility of R&E 
expenses, particularly during the COVID-19 pandemic when advances in 
innovation are critical?

    Answer. See immediately below for a combined response to both 
questions.

    Question. As a result of the Tax Cuts and Jobs Act (TCJA), business 
interest deductions were limited to 30 percent of earnings before 
interest, taxes, depreciation and amortization (EBITDA). However, after 
this year, the limitation will be reduced further to 30 percent of 
earnings before interest and taxes (EBIT). As a result, U.S. businesses 
with significant depreciation, such as manufacturers, will see the 
amount of interest they can deduct drastically limited, thereby 
increasing the cost of capital. What are your views on further limiting 
the ability of U.S. businesses to deduct interest, particularly at a 
time when some U.S. companies are borrowing to keep their doors open 
and employees on payroll?

    Answer. President Biden has proposed an array of reforms that would 
ensure the wealthiest taxpayers and corporations pay their fair share. 
These and other proposals will be further developed as part of the 
budget process, and, if confirmed, I look forward to continued 
conversations with you about the President's legislative agenda.

    If confirmed, I will carefully consider the concerns you raise 
regarding deductibility of research expenditures and limitations on 
business interest deductions, paying particular attention to any 
effects on small businesses during the recovery.

    Question. President Biden has proposed a new 15-percent corporate 
minimum tax based on book income, rather than taxable income as 
currently used in the tax code. As you know, book income, as reported 
on a company's financial statements, is designed to provide information 
on the company's performance for investors and creditors based on 
generally accepted accounting principles. On the other hand, taxable 
income is computed in accordance with the Internal Revenue Code and 
regulations as the basis for imposing taxes.

    Under the tax code, U.S. taxpayers are permitted to adjust their 
taxable income by allowable deductions, many of which reflect 
incentives that Congress intended to encourage certain behavior. For 
example, bonus depreciation is intended to encourage U.S. companies to 
invest more in capital expenditures, like equipment and fixed assets. 
Imposing a minimum tax would effectively remove the benefit and 
undermine the legislative intent of those provisions. Further, it would 
require companies and the IRS to calculate tax liability under 
different tax bases, creating significant complexity for taxpayers and 
the IRS.

    Given the important differences between accounting principles and 
the deductions permitted by the tax code, do you agree there are 
legitimate reasons for substantial differences between book income and 
taxable income and that book income is not an appropriate basis for a 
new alternative tax regime?

    Answer. The minimum book tax proposal was directed at asking those 
companies with low or zero tax liabilities to pay their fair share. 
Research has identified many examples of corporations with a large gap 
between their tax and book income. A minimum book tax could help 
recapture the tax revenue lost to gaming and tax avoidance. I look 
forward to working with you and others on this committee on this issue, 
if confirmed.

    Question. Under the Coronavirus Aid, Relief, and Economic Security 
(CARES) Act, Congress created a temporary rule allowing U.S. businesses 
to carry back net operating losses (NOLs) incurred in 2018, 2019, and 
2020 to the prior 5 years. In the Health and Economic Recovery Omnibus 
Emergency Solutions (HEROES) Act, House Democrats proposed to repeal 
the CARES Act NOL provisions, effectively imposing a retroactive tax 
increase on businesses experiencing losses as a result of the pandemic. 
The expected revenue effect of the changes proposed in the HEROES Act 
was nearly $250 billion. Do you support this kind of retroactive tax 
change that would significantly increase taxes on businesses 
experiencing losses? Do you agree with former President Obama's sound 
advice when he said during the aftermath of the financial crisis, ``The 
last thing you want to do is raise taxes in the middle of a 
recession''?

    Answer. During the campaign, President Biden proposed an array of 
reforms that would ensure the wealthiest taxpayers and corporations pay 
their fair share, including proposals to increase the corporate tax 
rate to 28 percent and ensure robust taxation of overseas profits. 
These proposals will be further developed as part of the budget process 
and, if confirmed, I look forward to continued conversations with you 
about the President's legislative agenda. To the second part of your 
question, as I stated in my testimony, the administration's immediate 
focus is ending the pandemic and helping families get through the 
economic and public health crisis.
                       international business tax
    Question. Senator Wyden and I have been aligned in our opposition 
to digital services taxes that unfairly discriminate against U.S. 
companies. To date, it has been the administration's position that any 
solution reached at the OECD should not ``ring-fence'' the digital 
economy, as it would disproportionately burden the U.S. business 
community and adversely affect U.S. fiscal security. Will you continue 
to negotiate towards a multilateral agreement at the OECD that does not 
unfairly target U.S. companies and compromise the U.S. tax base?

    Answer. Yes, we are committed to the cooperative multilateral 
effort to address base erosion and profit shifting through the OECD/G20 
process, and to resolving the digital taxation disputes in that 
context.

    Question. A multilateral agreement reached at the OECD may require 
Congress to ratify a multilateral treaty and enact implementing 
legislation. It will become increasingly important that Congress be 
closely engaged with the OECD process to ensure members are on board 
with any potential legislative changes that may be necessary. As 
negotiations continue at the OECD, will you commit to keeping the tax-
writing committees apprised of negotiations and developments occurring 
at the OECD?

    Answer. If confirmed, I very much look forward to working with the 
tax-writing committees as we work through the OECD to update global tax 
rules in ways that stop the race to the bottom on corporate taxation, 
and prevent global profit-shifting, while securing the competitiveness 
of U.S. companies.

    Question. Pillar 2 of the OECD's proposed ``unified approach'' 
would effectively create a global minimum tax. The Treasury Department 
to date has made it a priority that the U.S. global intangible low-
taxed income (or GILTI) tax regime would be treated as a ``deemed 
compliant'' regime under any multilateral agreement. Do you plan to 
continue to advocate for GILTI to be treated as a deemed-compliant 
regime under Pillar 2?

    Answer. The Biden-Harris administration will pursue a comprehensive 
multinational agreement to update global tax rules in ways that 
establish effective minimum taxation rules, prevent global profit-
shifting, and ensure that corporations pay their fair share. We will 
pursue in a manner that will maintain competitiveness and diminish the 
incentives that American companies now have to offshore activities. I 
look forward to working with you and your staff on this important 
issue.

    Question. As part of the proposed Pillar 2 approach, the OECD has 
proposed an ``undertaxed payment rule'' that would complement the 
global minimum tax. The undertaxed payment rule effectively would tax a 
business on a payment made if the recipient business is not subject to 
a certain level of tax with respect to the payment. U.S. businesses 
have voiced concerns that payments received by a U.S. company from a 
foreign affiliate could be subject to the undertaxed payment rule if 
the payment receives preferential treatment under the foreign derived 
intangible income (FDII) regime or through the application of another 
preferential rate or credit regime. Will you advocate to preserve the 
application of U.S. tax law, including FDII and other preferential 
rates and credits, if Pillar 2 includes an undertaxed payment rule?

    Answer. See response to the previous question.

    Question. The Tax Cuts and Jobs Act (TCJA) created several new 
international tax regimes, including global intangible low-taxed income 
(GILTI), foreign derived intangible income (FDII) and the base erosion 
anti-abuse tax (BEAT). The Treasury Department has published extensive 
proposed regulations that were analyzed, refined, and finalized through 
a thorough review and comment process, consistent with the 
Administrative Procedure Act (APA). What are your plans for reviewing 
and/or revising regulations in these areas?

    Answer. If confirmed, I will implement and enforce tax laws fairly. 
Any review of regulations will be done to ensure they are consistent 
with the law and congressional intent.

    Question. President Biden has claimed that the Tax Cuts and Jobs 
Act (TCJA) incentivized U.S. companies to move manufacturing and 
intangible property overseas. As I've previously pointed out, these 
claims aren't supported by the facts. The nonpartisan Joint Committee 
on Taxation has concluded that the TCJA international provisions ``are 
expected to reduce the incentives for this `profit-shifting' activity, 
resulting in an increase in the U.S. tax base.''\2\
---------------------------------------------------------------------------
    \2\ Joint Committee on Taxation, ``Macroeconomic Analysis of the 
Conference Agreement for H.R. 1, the Tax Cuts and Jobs Act,'' JCX-69-17 
(December 22, 2017) at 6.

    Further, available data confirms that TCJA is actually encouraging 
companies to invest more in the United States. Data from the Bureau of 
Economic Analysis (BEA) show that, among U.S. multinationals, 
employment, investment, research, and production in the United States 
has increased at a faster rate in 2018 than the average rate over the 
past 20 years and faster than the growth rate of U.S. multinational 
companies abroad.\3\ BEA data also illustrates that the quarterly 
average of dividend repatriations to the United States from foreign 
entities has tripled in the years since the enactment of the TCJA.\4\ 
Do you agree that significant changes should not be made to the 
international tax system until the data on U.S. and foreign investment 
and repatriation are fully analyzed and understood, and it can be 
confirmed that any such change would not reduce the rate of employment, 
investment, research, and production in the United States?
---------------------------------------------------------------------------
    \3\ https://www.bea.gov/news/2020/activities-us-multinational-
enterprises-2018.
    \4\ https://www.bea.gov/news/2020/us-international-transactions-
third-quarter-2020.

    Answer. I look forward to working with the dedicated career 
professionals at the Treasury Department to ground tax policy-making in 
the best available research and evidence. President Biden has laid out 
an ambitious set of tax proposals that would ensure that the wealthy 
and corporations pay their fair share, including proposals to increase 
the corporate rate to 28 percent and eliminate incentives for American 
companies to offshore operations. These and other proposals will be 
developed further as part of the budget process, during which they will 
---------------------------------------------------------------------------
benefit from the expertise of Treasury's professional tax staff.

    Question. President Biden has proposed doubling the tax rate on 
global intangible low-taxed income (GILTI) earned by foreign 
subsidiaries of U.S. companies from 10.5 percent to 21 percent. The 
Biden proposal also would eliminate GILTI's exemption for deemed 
returns under 10 percent of qualified business asset investment (QBAI). 
While described as a ``loophole,'' QBAI is intended to represent 
earnings attributable to physical infrastructure in a foreign country. 
Because GILTI is intended to target intangible income, income 
attributable to tangible income should not be subject to tax.

    While President Biden has described GILTI as an incentive for U.S. 
companies to shift operations overseas, before the Tax Cuts and Jobs 
Act (TCJA), many U.S. companies paid no U.S. tax on their foreign 
earnings. An increase in the GILTI rate to 21 percent would make U.S. 
companies far less competitive with their foreign counterparts because 
most foreign countries do not subject a company's foreign earnings to 
the same level of tax as domestic earnings. Coupled with the 
elimination of QBAI, raising the rate to 21 percent would actually 
incentivize U.S. companies to invert or be acquired by foreign 
companies, particularly given that the OECD is currently considering a 
global minimum tax around 13 percent.

    What is your view on the United States imposing a 21-percent tax on 
foreign earnings if the OECD is planning to implement a global minimum 
tax at or around 13 percent? Wouldn't that harm our U.S. companies by 
making them far less competitive?

    Answer. I appreciate the concern with regard to the competitiveness 
of our U.S. companies amidst a changing international tax landscape. A 
global minimum tax agreed to at the OECD could, however, stop the 
destructive global race to the bottom on corporate taxation and help 
discourage harmful profit-shifting.

    Question. President Biden's ``Made in America'' proposal includes a 
10-percent penalty on goods and services imported by U.S. companies 
from foreign affiliates. This policy would only penalize U.S. 
companies, putting them at a competitive disadvantage with similarly 
situated foreign companies. It also ignores the reality of global 
supply chains. If our country penalizes imports from foreign countries, 
couldn't this policy encourage foreign countries to tax goods or 
services imported from the United States?

    Answer. The President's objective is to create incentives for 
American companies to create and maintain jobs at home. President 
Biden's Offshoring Tax Penalty is specifically aimed at those who 
offshore manufacturing and service jobs to foreign nations in order to 
sell goods or provide services back to the American market when those 
jobs could have been done by U.S. workers.

    Question. As you are likely aware, there are three new tax treaties 
with Poland, Chile, and Hungary that have been pending with the Senate 
for a number of years. For each of these new treaties, there is an open 
question as to how to resolve an interaction with the base erosion 
anti-abuse tax (or BEAT), an international provision enacted as part of 
the Tax Cuts and Jobs Act after these treaties were concluded. Will you 
make it a priority for the Treasury Department to work with this 
committee and the Senate Foreign Relations Committee to ensure that 
these treaties are ratified and implemented as quickly as possible?

    Answer. If confirmed, I look forward to working with the relevant 
committees of jurisdiction to address the ratification issues that have 
arisen with respect to the outstanding, concluded, but, as yet, 
unratified tax treaties with Chile, Hungary, and Poland.

    Question. The Treasury Department and Office of Management and 
Budget (OMB) currently have a memorandum of understanding in place 
under which OMB's Office of Information and Regulatory Affairs (OIRA) 
reviews significant tax regulations issued by the Treasury Department. 
What is your view of the OIRA review process for significant tax 
regulations, and do you intend to preserve the arrangement requiring 
OIRA to review Treasury regulations?

    Answer. I am committed to a robust and rational regulatory process. 
Regulatory decisions should be made based on careful consideration of 
the effects of potential regulatory choices.

    Question. Technical corrections are an inevitable but essential 
component of any newly enacted legislation, including the Tax Cuts and 
Jobs Act (TCJA). Without enactment of the TCJA technical corrections, 
the legislation will not operate fully as intended. Unfortunately, the 
TCJA technical corrections haven't advanced in Congress due to 
political issues, leaving taxpayers with unnecessary uncertainty, 
compliance burdens, and hampering efforts to prevent abuse. Will you 
work with the tax-writing committees to provide technical advice and 
support enactment of technical corrections to TCJA and other tax 
legislation?

    Answer. If confirmed, I would be committed to working with the tax-
writing committees on technical corrections on all legislation.
                            other tax issues
    Question. Recently President Biden spoke about the need to help 
small businesses during the pandemic. In so doing, he qualified his 
remarks by saying, ``Our priority will be black-, Latino-, Asian-, and 
Native American-owned small businesses, women-owned businesses, and 
finally having equal access to resources needed to reopen and 
rebuild.''\5\ Can you commit that, if you are confirmed, the Treasury 
Department will enforce the law equally for all Americans regardless of 
their race, sex, sexual orientation, or political beliefs?
---------------------------------------------------------------------------
    \5\ https://twitter.com/Transition46/status/1348403213200990209.

    Answer. If confirmed, I would be committed to ensuring that the 
Treasury Department and the IRS administer tax laws in a fair and even-
handed manner, applying the law equally to all Americans. This includes 
by helping small business owners from historically marginalized 
---------------------------------------------------------------------------
communities have access to resources needed to reopen and rebuild.

    Question. You have mentioned that there is more than a $7-trillion 
so-called ``tax gap'' projected for the next 10 years. The tax gap is 
often mentioned as a way to pay for things, but I have yet to see much 
in terms of concrete results from talk about closing the tax gap.

    We have heard from many, including Treasury Secretary Mnuchin, that 
additional funding for the IRS to perform more audits, for example, 
could be fruitful. But it won't be fruitful if funds are used to target 
tax-exempt organizations whose political beliefs do not align with the 
administrations.

    According to an October, 2020, post on the IRS website from an IRS 
enforcement official: ``Despite common misperceptions about IRS 
examination rates, the reality is that the likelihood of an audit 
significantly increases as income grows.'' There are other useful facts 
offered, some of which don't align with what we often see put forward 
by so-called activists.

    Will you commit to working with the committee, on both sides, to 
separate the myths from the facts and help ensure that any additional 
resources for the IRS are used most efficiently?

    Answer. If confirmed, I would be committed to ensuring that the 
Treasury Department and the IRS administer tax laws in a fair and even-
handed manner, keeping politics out of the process. I will work with 
Congress to ensure that any increase in the IRS budget and staff is 
used fairly and efficiently.

    Question. In 2006, I authored important updates to the IRS 
whistleblower program. Since that time, the program has been one of the 
most effective programs in addressing tax evasion, leading to the 
recovery of more than $6.1 billion in taxes that would have otherwise 
been lost to fraud. While over the years the IRS has taken a number of 
steps to improve the administration of whistleblower program, there is 
always room for improvement. According to the Fiscal Year 2020 IRS 
Whistleblower Report, over the past 2 years awards to whistleblowers 
have markedly declined while award-processing times have continued to 
steadily climb. As Treasury Secretary, will you commit to supporting 
the whistleblower program and to work with me, the IRS, and 
stakeholders to make improvements where necessary to ensure the 
program's continued success?

    Answer. Whistleblowers are an important asset to the integrity of 
the agency and tax system more generally, and I will work to create an 
agency culture that respects whistleblowers and the laws that protect 
them.

    Question. I have been a strong proponent of the bipartisan IRS 
private debt collection program, along with Senator Schumer. In 2015, 
Congress updated and made mandatory the IRS private debt collection 
program. This program is designed to chip away at the tax gap by 
requiring the IRS to contract with private debt collectors to collect 
inactive tax debt due but unpaid. These are the tax debts not being 
worked by the IRS and, absent this program, would likely never be 
collected. The program has proven its ability to collect hundreds of 
millions of dollars in otherwise uncollectible tax debts on an annual 
basis, including generating nearly half a billion dollars in net 
revenue in fiscal year 2020 alone. At the same time, it has generated 
additional resources for the IRS that have enabled the IRS to hire 400 
compliance personnel and collect millions more in additional revenue. 
As Treasury Secretary, can you assure me that the Treasury Department 
will continue to operate the program to the full extent authorized 
under the law, including by ensuring that all inactive debts as defined 
by the statute are provided to the collection companies in a timely 
fashion?

    Answer. If confirmed, I will work with the IRS to make sure that 
taxes are collected in an efficient and effective manner.

    Question. In late 2019, the IRS announced that it was increasing 
its enforcement efforts against participants and promoters of 
syndicated conservation-easement transactions. This past summer, 
Senator Wyden and I released a report following our investigation into 
these transactions, showing them to be highly abusive tax shelters. The 
IRS estimates that promoters of these tax shelters have generated about 
$36 billion worth of illicit deductions for their customers between 
2010 and 2018. As Treasury Secretary, will you commit to maintaining 
the IRS's enforcement efforts against syndicated conservation-easement 
transactions and work with this committee to enact legislation to 
prohibit abusive conservation-easement transactions?

    Answer. If confirmed, I will work to ensure that the IRS's 
enforcement efforts are aimed at abusive tax shelters of any kind, and 
look forward to considering and working with you on the specific issue 
you raised.

    Question. Over the last decade, accounts known as donor advised 
funds have grown substantially in popularity and are now estimated to 
hold over $120 billion worth of assets. These funds allow donors to 
claim a charitable tax deduction when they give money to the fund but 
before any of those dollars are provided to working charities. Do you 
foresee the Treasury Department regulating in this area to increase the 
flow of money out of these funds and into the hands of working 
charities?

    Answer. I believe it is imperative that we continuously examine 
various tax preferences and deductions to ensure they are achieving 
their desired social and economic objectives. I look forward to working 
with the Treasury and the IRS, if confirmed, to learn more about areas 
such as this when developing a robust tax regulatory agenda to ensure 
the country's tax laws are implemented and enforced fairly and 
effectively.
         matters related to fsoc, ofr, and financial regulation
    Question. The Financial Stability Oversight Council is charged, in 
part, with identifying risk to the financial stability of the U.S.

    How do you define financial stability, and how do you measure it?

    How do you define systemic risk, and how do you measure it?

    What are the limiting principles that allow one to separate risks 
that are systemic from those that are not?

    Answer. As you know, the Financial Stability Oversight Council 
(FSOC) was created by Congress under the Dodd-Frank Wall Street Reform 
and Consumer Protection Act (DFA) following the Financial Crisis that 
brought the U.S. economy and financial system to the brink of collapse. 
When the executive branch implements laws passed by Congress, including 
carrying out the duties and fulfilling the responsibilities of the 
FSOC, we should look to the law that created the FSOC.

    While the DFA does not define either financial stability or 
systemic risk explicitly, various provisions in the DFA use language 
that appears to indicate congressional intent in how the law should be 
viewed and executed. For instance, the long title of the legislation 
itself is instructive: ``An Act to promote the financial stability of 
the United States by improving accountability and transparency in the 
financial system, to end too big to fail, to protect the American 
taxpayer by ending bailouts, to protect consumers from abusive 
financial services practices, and for other purposes.'' That is, 
Congress intended for the executive branch to promote financial 
stability by implementing those provisions that Congress carefully 
crafted and spelled out in the DFA after numerous hearings, meetings, 
and discussions and after a lengthy, and thorough legislative process, 
ranging from the enhanced prudential supervision provisions in title I 
(which is entitled ``Financial Stability Act of 2010''), orderly 
liquidation authority in title II, and consumer protection provisions 
in title X.

    Indeed, one of the missions of the FSOC itself as spelled out by 
Congress with regard to financial stability in the DFA is as follows: 
``to identify risks to the financial stability of the United States 
that could arise from the material financial distress or failure, or 
ongoing activities, of large, interconnected bank holding companies or 
nonbank financial companies, or that could arise outside the financial 
services marketplace.'' This provision appears rooted in the 
experiences of the Financial Crisis, when the U.S. economy was close to 
ruin following the failures and near failures of large, interconnected 
bank holding companies and nonbank financial companies that threatened 
and undermined financial stability.

    One of the criticisms of the prior regulatory architecture was that 
each functional regulator was in its silo and none was charged with 
holistically monitoring the financial system for risks that could 
threaten financial stability. Therefore, a core mission of the FSOC 
given by Congress is to monitor the financial system for risks--
systemic risks--that could threaten financial stability by convening 
and coordinating with a group of regulators and staying vigilant in its 
mission.

    In terms of systemic risk, the DFA includes provisions that discuss 
systemic risk beyond titles I and II of the DFA. For instance, a number 
of provisions address systemic risk in title VII (``Wall Street 
Transparency and Accountability Act of 2010'') as well as title VIII 
(``Payment, Clearing, and Settlement Supervision Act of 2010''). In 
title VII, Congress clearly had systemic risk in mind when creating a 
paradigm for regulating derivatives for the first time, for example 
mandating that ``In order to minimize systemic risk, under no 
circumstances shall a derivatives clearing organization be compelled to 
accept the counterparty credit risk of another clearing organization.''

    And in title VIII, Congress further set forth provisions relating 
to systemic risk in addressing systemically important financial market 
utilities:

    ``The purpose of this title is to mitigate systemic risk in the 
financial system and promote financial stability by--
    (1) authorizing the Board of Governors to promote uniform standards 
for the--
    (A) management of risks by systemically important financial market 
utilities; and
    (B) conduct of systemically important payment, clearing, and 
settlement activities by financial institutions;
    (2) providing the Board of Governors an enhanced role in the 
supervision of risk management standards for systemically important 
financial market utilities;
    (3) strengthening the liquidity of systemically important financial 
market utilities; and
    (4) providing the Board of Governors an enhanced role in the 
supervision of risk management standards for systemically important 
payment, clearing, and settlement activities by financial 
institutions.''

    Question. Large financial institutions are required to submit 
``living wills'' to regulators, and ``stress tests'' are performed on 
those institutions. Part of the reason offered for those examinations 
of the institutions is that it is instructive to assess roadmaps of how 
institutions are arranged, and how they might respond to stressed 
conditions.

    President Biden, in December of 2020, criticized the Federal 
Government as having been caught off guard and unprepared for 
cyberattacks, in association with breaches of the SolarWinds/Orion 
platform.

    Members of the Senate Finance Committee and House Financial 
Services Committee during the Obama administration requested, numerous 
times and through many mechanisms, detailed information from the U.S. 
Treasury and Federal Reserve about contingency plans at Treasury and 
the Federal Reserve for any inability of the Federal Government to make 
timely payments on Federal debt obligations. Such an inability could 
arise because of cyber-attacks, a super-storm such as Sandy, breach of 
the debt limit, or other factors that temporarily knocks out Federal 
processing systems in financial networks or legal authorities to pay. 
Inquiries were made of you, Dr. Yellen, when you served as Chair of the 
Federal Reserve Board, though many believe that your responses were not 
complete or fully revelatory.

    If requested, will you commit to providing Finance Committee 
members, who have oversight responsibility over Federal debt, with 
details of Treasury's contingency plans for what to do in the event 
that, for whatever reason, the Federal Government is temporarily unable 
to make timely payments on debt obligations?

    Answer. I respect congressional oversight and look forward to 
addressing your questions about debt management, if confirmed. The 
market for U.S. debt is the most liquid and the deepest government 
securities market. It is essential that we take every step to ensure 
this never changes. This includes continuing to maintain the effective 
operations of our debt management team. I am committed to taking steps 
to ensure that we avoid the risks you outlined. As for one of the 
scenarios mentioned in the question--breach of the debt limit--as you 
know there are a handful of steps that a Treasury Secretary can take to 
delay the harmful impacts of a binding debt limit, and previous 
secretaries in both Democratic and Republican Administrations have 
taken steps to address this. Ultimately, the ability to avoid a debt 
ceiling impasse rests with Congress. Again, I would certainly want to 
work closely with Congress to address in advance the issue of the debt 
limit to avoid its harmful effects.

    Question. You have identified to the committee that you ``helped to 
establish a Division of Financial Stability at the Federal Reserve 
Board.'' Presumably, that Division has at its disposal resources from 
the Federal Reserve's budget to perform research on financial 
stability. At the same time, the Office of Financial Research likely 
engages in research on financial stability.

    Why is it efficient or productive to have multiple agencies 
performing like research?

    If implications of research from differing agencies differ, 
presumably disagreements or understandings could be reached 
bureaucratically within the FSOC structure, but is there any reason to 
be concerned about setting up structures that could lead to lack of 
accountability and abilities for agencies to point fingers at one 
another for failures in the event that we realize financial 
instability?

    Answer. Congress created the Office of Financial Research (OFR) in 
the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010 
to support the Financial Stability Oversight Council (FSOC) in its 
mission, among others, to monitor the financial system for risks that 
could threaten financial stability:

    ``The purpose of the Office is to support the Council in fulfilling 
the purposes and duties of the Council, as set forth in subtitle A, and 
to support member agencies, by--
    (1) collecting data on behalf of the Council, and providing such 
data to the Council and member agencies;
    (2) standardizing the types and formats of data reported and 
collected;
    (3) performing applied research and essential long-term research;
    (4) developing tools for risk measurement and monitoring;
    (5) performing other related services;
    (6) making the results of the activities of the Office available to 
financial regulatory agencies; and
    (7) assisting such member agencies in determining the types and 
formats of data authorized by this Act to be collected by such member 
agencies.''

    While a division of the Federal Reserve would presumably support 
the Federal Reserve, the OFR by statute is mandated to support the 
entire FSOC by, among others, providing data to the member agencies of 
the FSOC as well as making the results of its activities available to 
financial regulatory agencies.

    It may be that each member agency has some capability related to 
financial stability from that agency's perspective. It appears clear 
from the statutory language, however, that Congress created the FSOC 
to, among others, play a coordinating role among the member agencies to 
provide a holistic view of overall risks to the financial system, and 
created the OFR to support the FSOC in its endeavors in terms of data 
and research.

    Question. You and other anticipated Biden nominees for Treasury 
positions have signaled that you have interest in somehow building up 
the Office of Financial Research (OFR). That Office, set up by the 
Dodd-Frank Act, promised a lot in terms of essentially scanning the 
financial landscape to find heat maps of risks to a weakly defined 
notion of ``financial stability,'' but delivered little of use. The OFR 
similarly utilized taxpayer resources on a quest to expand Legal Entity 
Identifiers to help monitor the financial landscape and activities; 
again, lots of promise, but little return for the investment of 
taxpayer resources. What, in particular and in terms of details, do you 
intend to do to beef up the OFR, and why do you think it will be useful 
outside of employing yet more government researchers and bureaucrats 
and arranging more seminar and research conferences?

    Answer. Congress created the Office of Financial Research (OFR) in 
the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010 
to support the Financial Stability Oversight Council (FSOC) in its 
mission, among others, to monitor the financial system for risks that 
could threaten financial stability. In creating the OFR, Congress 
explicitly mandated that the OFR would fund itself not from taxpayer 
dollars, but instead from assessments on large, complex bank holding 
companies and nonbank financial companies designated for supervision by 
the Federal Reserve.

    The mission of the OFR is an important one--that of supporting the 
FSOC with data and research capabilities--but it is by no means a cure-
all for all policy questions and issues and, like any other 
organization, it is only as capable as the staff and the resources 
allocated allow it to be. It has been reported that the staffing level 
at the OFR has been reduced significantly in the past 4 years, and 
while it cannot be said with certainty at this point exactly what the 
specific staffing level or scope of assignment should be, it seems 
clear that there should be an assessment of staffing for the OFR to 
appropriately fulfill its statutory mission of providing support for 
the FSOC.

    Question. In a 2012 paper titled ``Behaviorally Informed 
Regulation,'' authors Michael S. Barr, Sendhil Mullainathat, and Eldar 
Shfir proposed, among other things, a scheme in which credit-card 
issuing firms could charge late fees that ``they deemed appropriate, 
but the bulk of such fees would be placed in a public trust to be used 
for financial education and assistance to troubled borrowers.'' Firms 
could keep a share of the fees, but ``the bulk'' of the fees would 
effectively be nationalized and presumably controlled by the Federal 
Government's behaviorists. Do you support such a scheme of effectively 
nationalizing late fees on things like credit cards?

    Answer. With the establishment of the Consumer Financial Protection 
Bureau (CFPB), that agency is responsible for consumer financial 
protection regulation. Congress enacted the CARD Act, which reformed 
credit card practices. My understanding is that these reforms have 
improved consumer experiences and reduced consumer costs.

    Question. What would a ``new Dodd Frank'' entail?

    Do you think that the Dodd-Frank legislation failed and there is, 
therefore, a need for a new one?

    Answer. Dodd-Frank Wall Street Reform and Consumer Protection Act 
of 2010 (DFA) was enacted by Congress in the aftermath of the Financial 
Crisis to address, among others, issues raised by the large, complex 
financial institutions whose material distress and failure threatened 
financial stability, and to strengthen the financial system to better 
withstand future crises.

    The FSOC was one of the reforms to come out of the DFA, whose 
statutory mission is to monitor threats to financial stability. Other 
reforms included enhanced prudential standards, living wills, and 
stress tests, among others, that helped to strengthen the financial 
system compared to the pre-Financial Crisis era. While the DFA was 
helpful in providing authorities to address issues highlighted by the 
Financial Crisis, the passage of time has also shed light on new issues 
that may be necessary to deal with. If confirmed, I would be glad to 
work with Congress to discuss whether and how to further strengthen our 
oversight of the financial system.

    Question. Do you intend to, in effect, resurrect and expand on the 
``operation chokepoint'' efforts of the Obama administration through 
regulatory actions to have financial firms channel or restrict credit 
according to partisan and normative views, perhaps under the guise of 
``reputation risk''?

    Answer. As you know, regulatory actions generally would be the 
purview of the prudential regulators--not the Treasury Department--and 
the regulators operate as independent agencies not under the 
supervision of the Treasury Department. That said, I understand that 
this is an issue of importance, and if confirmed, I would be happy to 
discuss this issue further to ensure that I'm fully appreciative of 
your concerns.

    Question. Do you intend to take regulatory actions using 
authorities at the Financial Stability Oversight Council to have 
financial firms channel or restrict credit according to partisan and 
normative views?

    Answer. Congress created the Financial Stability Oversight Council 
(FSOC) under the Dodd-Frank Wall Street Reform and Consumer Protection 
Act (DFA) following the Financial Crisis to, among others, monitor 
threats to financial stability. In my view, maintaining the stability 
of the U.S. financial system is not, and should not be, a partisan 
issue, and if I have the honor of being confirmed, I would faithfully 
execute the laws that Congress passed to safeguard our economy and our 
financial system. And in carrying out the duties of the Treasury 
Secretary under the statutes enacted by Congress, I hope to work with 
Congress to understand the views and concerns of members of Congress.
                     climate change and regulation
    Question. In your October 2020 Group of Thirty (G30) paper, from a 
working group on climate change and finance that you co-chaired with 
Mark Carney, titled ``Mainstreaming the Transition to a Net-Zero 
Economy,'' you call for establishment of independent ``Carbon 
Councils,'' and advocate for governments to delegate decisions to those 
councils to determine policies toward climate change that are insulated 
from ``short-term political preferences.''

    Please describe whether you will advocate for such global climate 
councils, which would remove decision-making and authority from 
Congress, and why you think that would be good for constituents that 
members of Congress represent and for the democratic process?

    You also call for governments to set clear timelines for making 
climate-related financial disclosures by private-sector entities 
``mandatory by 2023.'' What would that mean for the U.S., and is that 
something you will try to do administratively, perhaps through an 
interpretation of FSOC authorities?

    Answer. Climate change is an existential threat to not only our 
environment, but also our economy. President Biden has released a 
detailed plan to combat climate change, including rejoining the Paris 
Agreement, investing in sustainable infrastructure, and creating new 
green jobs. If confirmed, I will support him in implementing that plan 
at the Treasury. As we discussed in the Finance Committee policy 
meeting prior to my confirmation hearing, the views expressed in this 
paper are not views that I've discussed with President Biden and are 
not part of the President's planned approach to address the climate 
crisis. President Biden and I both respect Congress's vital role in 
addressing this issue and we hope to work with members of this 
committee and others in Congress to pass legislation needed to combat 
this urgent threat.

    Moreover, climate change poses a potential systemic risk to the 
American economy, and I believe we must seriously look at assessing the 
risks to the financial system from climate change. This will be an 
issue regulators will also have to think more about in the years ahead, 
and we need to ensure that we have appropriate processes and 
regulations necessary to assess and mitigate this risk.

    Question. The Climate 21 Project, which ``taps the expertise of 
more than 150 experts with high-level government experience, including 
nine former cabinet appointees, to deliver actionable advice for a 
rapid-start, whole-of-government climate response coordinated by the 
White House and accountable to the President,'' produced a ``Transition 
Memo'' for the Department of the Treasury. The 22-page memo provides a 
detailed listing, and timeline, for development of the unelected 
authors' preferred agenda for tackling climate challenges at Treasury.

    What recommendations of the Climate 21 Project's Transition Memo 
for Treasury do you intend to implement?

    Answer. The President and I plan to listen to and incorporate input 
from many stakeholders in developing the administration's climate 
policy. Some of the suggestions in the memo--including announcing a 
commitment to this issue and integrating climate into our international 
diplomacy--are actions President Biden has already made clear will be 
taken across this administration. Going forward, the President's 
climate agenda will follow from the ambitious plan he has laid out.

    Question. You have mentioned ``stranded assets'' several times 
during your confirmation process as a risk from climate change that you 
seem to believe could become some sort of aspect of a risk to financial 
stability.

    Is the anticipated shut-down of the Keystone XL project by the 
incoming administration an example of stranded assets, where 
investments have been made and the Federal Government intervenes to 
strand them and make them worthless?

    Is one of the largest risks to realizing large amounts of stranded 
assets a risk that the Federal Government will take unanticipated (when 
the investments were made) actions to make such assets essentially 
worthless, because of actions by the Federal Government intended to 
shut down production in sectors such as coal or other ``fossil fuels?''

    Answer. Stranded assets are a possible result when new forms of 
clean energy, transportation, and production displace those that have 
contributed to climate change. While government policy can play a role 
in setting market incentives, the transition from the finite supply of 
fossil fuels and other energy sources that contribute to climate change 
with renewable energy sources is not a decision or choice. Climate 
change is an existential threat to not only our environment, but also 
our economy. If confirmed, I will work with President Biden to help 
build a sustainable and more resilient economy.
                    treasury administrative matters
    Question. Do you intend to resurrect the Obama administrations 
failed and ill-
designed myRA retirement savings scheme, partly by misusing the 
permanent, indefinite appropriation provided to Treasury for 
compensating financial agents?

    Answer. The myRA retirement savings account, intended for people 
with taxable compensation income but who lack access to an employer-
sponsored retirement plan, was designed to remove common barriers to 
saving, and give people an easy way to get started. If confirmed, I 
would want to assess whether this product or any other vehicle to 
promote savings would be appropriate and in demand under these new 
economic conditions.

    Question. Will you commit to providing the committee with a 
frequently updated listing of financial agents, and their contractual 
responsibilities to Treasury, and all fiscal agency agreements with the 
Federal Reserve?

    Answer. The National Bank Acts of 1863 and 1864 grant the Treasury 
Department the authority to retain financial agents to provide services 
on its behalf. Financial agents have the fiduciary obligation to 
protect the interests of the United States. Financial Agency Agreements 
(FAA) entered into by Treasury do not constitute procurement contracts 
under the purview of Federal Acquisition Regulations. However, we are 
committed to providing information about our fiscal agents and 
financial agency agreements with full transparency and in a timely 
manner, to the extent required by all applicable laws and regulations, 
without compromising the integrity of the nature of the information 
requested.

    Question. In 2016, the Obama administration transferred $1.7 
billion to Iran in cash, ultimately delivered in the form of pallets of 
(non-U.S.) cash, purportedly as part of a settlement of a decades-old 
arbitration claim between the U.S. and Iran. The transaction involved 
use of the so-called Judgment Fund housed at Treasury's Bureau of the 
Fiscal Service and payments-system resources of the Federal Reserve. At 
the time, since the Judgment Fund did not allow processing of 
individual claims of amounts over 10 digits, $1.3 billion of payment 
was divided into 13 claims of $99,999,999.99 and one claim of 
$10,390,236.28. To my knowledge, members of the Senate Finance 
committee, who have oversight responsibility over Treasury, did not 
receive any advance notice or consultation regarding the outsized and 
unusual payments.

    Will you commit to informing the Finance Committee upon receipt of 
any request by a Federal agency or body to make Judgment Fund payments 
that are outsized and unusual prior to payments being made?

    Answer. I am committed to working with Congress generally, and the 
Finance Committee specifically, on oversight matters. If confirmed, I 
will consult with the Finance Committee on concerns related to payments 
from the Judgment Fund.

    Question. In a June 7, 2016 article in the Huffington Post titled 
``The Koch Brothers Are Trying to Handpick Government Officials. We 
Have to Stop Them,'' Senators Warren, Schumer, and Whitehouse put 
forward allegations, that have subsequently been shown to be false, 
against a Republican nominee for a Social Security Trustee position and 
a Republican nominee to a seat on the SEC. The authors identified that 
the two nominees had worked at a think tank that received financial 
support from the ``Koch brothers.'' The nominees, and officials at the 
think tank identified that their research was not guided or constrained 
by any institutional donors, though the authors seemed unconvinced, 
calling directly into question the integrity of the nominees.

    Given the sensitivity of some to institutional funding, especially 
if funding is provided to institutions that include conservative 
scholars, and given that the Charles Koch Foundation provided 
substantial funding to the Brookings Institution when you worked there, 
as did many ``wealthy corporations'' and billionaires:

    Should there be concern that you, in your position as Treasury 
Secretary, if confirmed, will, as the authors of the article referenced 
above warn, ``serve the wishes of wealthy corporations and their 
billionaire owners''?

    Should concerns about think-tank funders be limited to think tanks 
that allow scholars to pursue conservative thoughts?

    Should there be a double standard with respect to who is and who is 
not suspected of being influenced by corporations and ``billionaires'' 
depending on their political positions?

    Answer. As I said at my hearing, my lifelong commitment to putting 
people back to work, to making sure small businesses and working 
families have relief they need to survive economic downturns like this 
one, comes from my heart and has been the story of my life. That is 
what will influence me, if confirmed, as Treasury Secretary.

    Question. The American Economic Association, of which you were 
President, has a policy of publishing papers only if data and code used 
in the analysis are clearly and precisely documented and access to the 
data and code is non-exclusive to the authors.

    Do you agree that such a policy should be applied to analyses 
performed and models and data used by the Federal Government, including 
agencies, aside from any administrative data that are not allowed to be 
publicly shared?

    Answer. The American Economic Association is committed to the 
replicability of research published in its journals. In order to 
facilitate replication, authors of accepted papers that contain 
empirical work, simulations, or experimental work must provide 
information about the data, programs, and other details of the 
computations sufficient to permit replication. The American Economic 
Association provides funding for a data replication team that ensures 
that the results of papers published in its journals can be replicated 
running the same code and data that the authors used. Moreover, the 
availability of the code and data allows outside researchers to attempt 
broader definitions of replication, allowing the further development of 
evidence on the questions posed in the research and thus the 
advancement of science. Replication is an essential part of science, 
and therefore I am in support of facilitating replication. However, it 
is also important to note that replication comes after the original 
researchers have completed their work and have advanced to the stage of 
acceptance for publication. The association does not, for instance, 
require an author whose work is under consideration to submit their 
data and empirical strategy as they may need to continue their research 
before it is ready for publication. If confirmed, I look forward to 
advancing research and its replicability within the Federal Government.

    Question. Will you consult with the Finance Committee if Treasury 
officials or officials at the IRS are contemplating special 
arrangements, such as hiring as temporary IRS or other agency 
employees, to enable researchers from outside government to gain 
access, under the guise of performing academic research, to data 
otherwise not sharable with private citizens (such as sensitive tax 
information)?

    Answer. The IRS has, for many years, run the incredibly successful 
Statistics of Income (SOI) Joint Statistical Research Program. This 
program has helped provide new understandings of taxpayer behaviors 
that aid in administering the U.S. tax system, and new insights and 
understandings of the ways that existing tax policies affect 
individuals, businesses, and the economy. While this program was 
delayed due to COVID, a new call for researchers is planned for 
December 2021. These partnerships are cost-effective ways to learn 
about the many ways in which Federal Government policies impact 
Americans. Moreover, I appreciate how significant our economic needs 
are, and how we must leverage all of our resources to think creatively 
about how to best put the country's economy back on stable footing. It 
is equally as essential that appropriate precautions are taken to 
ensure that data privacy is preserved. If confirmed, I will work with 
the Treasury and the IRS to continue robust data protection and access 
practices. And I will do everything possible to protect Treasury data. 
I look forward to working with you and the entire Finance Committee to 
develop creative ways to better leverage the talent of government 
employees and outside researchers to improve tax and fiscal policy for 
all Americans.

    Question. If confirmed as Treasury Secretary, you will help manage 
the debt, including the maturity structure of outstanding U.S. debt.

    Do you believe that the optimal weighted-average maturity of the 
debt is above, below, or equal to where it now stands?

    Do you plan to consider issuing any new federal debt instruments?

    If you decide to issue any new Federal debt instruments, or decide 
to hold a higher average cash balance at Treasury, will you commit to 
informing the Finance committee, which has jurisdiction over the debt 
and Treasury operations, prior to so doing?

    If the Federal Reserve in the future adopts yield curve control 
measures, how will you coordinate with the Federal Reserve with respect 
to implications for any target by Treasury of the average-maturity of 
the debt?

    Answer. You raise important questions about the structure of the 
national debt. If confirmed, I look forward to reviewing current 
Treasury practices with respect to debt issuance, including analyzing 
the weighted-average maturity of the debt; discussing whether we have 
the right mix of Federal debt instruments; and understanding the cash 
balance needs of the Federal Government. I believe that congressional 
oversight and partnership on these issues is vital, and look forward to 
working with you on the full range of concerns regarding debt 
management that you have raised.
  matters related to treasury secretary's role as managing trustee of 
                social security and medicare trust funds
    Question. Social Security benefits are said to be ``earned 
benefits,'' in that for every dollar of FICA tax paid in for disability 
or retirement benefits, there is a commensurate benefit that accrues to 
the taxpayer. An old Franklin Roosevelt quote is often invoked to 
reinforce the earned-benefit notion; in 1941, Roosevelt stated that 
``We put those payroll contributions there so as to give the 
contributors a legal, moral, and political right to collect their 
pensions and their unemployment benefits. With those taxes in there, no 
damn politician can ever scrap my social security program.'' To some, 
it is important that Social Security programs remain as ones that can 
be characterized as earned benefits, meaning, again, that there is a 
benefit commensurate with every unit of tax paid in. Otherwise, some 
fear, dependence of Social Security benefits on partial general-fund 
revenue, or revenue cloaked as Trust Fund revenue but accruing to the 
Trust Funds as tax payments that do not carry any associated benefit 
accrual, would lead to Social Security being characterized as some sort 
of ``welfare,'' and benefits being thought of as mere transfers to 
which recipients do not necessarily have legal, moral, or political 
``rights.''

    What, to you, is meant by ``earned benefit'' in the context of 
Social Security benefits?

    Answer. Social Security was designed to ensure that every American 
is adequately prepared for retirement. The program recognizes that 
people who earn more may need a higher income in retirement to maintain 
a living standard in retirement that is commensurate with what they 
enjoyed while working. As such, higher earning Americans typically pay 
more into the system and receive greater Social Security payments in 
retirement. However, Social Security was also designed to reduce elder 
poverty by ensuring a minimum living standard in retirement regardless 
of earnings while working.

    Question. Do you believe it is important to maintain a link between 
a benefit and a tax, such that for every unit of Social Security taxes 
paid in there is a commensurate claim to a pecuniary benefit?

    Answer. The linkage between tax payments and Social Security 
benefits is particularly important for the lowest earning Americans who 
are contributing to Social Security even while facing pressing 
financial need in their daily lives. That their contributions are 
directly linked to their future well-being is essential. President 
Biden supports lifting the earnings cap on wealthy taxpayers with more 
than $400,000 in wages to pay the same rate on their income as other 
workers. Requiring such high earning tax payers to continue to pay into 
Social Security is not only crucial for the fiscal health of the 
program, but also for maintaining equity in the system.

    Question. Do you believe that Social Security, while not being a 
main driver of future deficits, does contribute to deficits in the on-
budget part of the, and the consolidated, Federal budget?

    Answer. Spending out of the Social Security Trust Fund is an 
indicator of the need to continually monitor and evaluate the Social 
Security program in order to ensure that this crucial safety net that 
has helped protect the elderly from poverty since its inception endurs. 
Social Security is off-budget, in part, because the Greenspan 
Commission determined that changes in the Social Security program 
should be made only for programmatic reasons. I appreciate that as the 
population ages, shortfalls in Social Security are likely to increase, 
and that may require consideration of reform. President Biden has 
called for a Social Security reform package that would boost benefits 
for vulnerable beneficiaries--including widows and widowers, workers 
with low lifetime incomes, and older beneficiaries--and provide an 
across-the-board increase for all beneficiaries. The plan also improves 
the long-run fiscal position of the Social Security Trust Fund by 
asking wealthy taxpayers to pay the same rate on their income as other 
workers. On the whole, President Biden's plan would provide older 
Americans a more secure retirement. I look forward to working with 
Congress, if confirmed, to discuss these important issues, and ensure 
that the Social Security program continues for decades to come without 
burdening middle-class taxpayers.

    Question. The Secretary of the Treasury is the Managing Trustee of 
the Social Security and Medicare Trust Funds. The Medicare Hospital 
Insurance Trust Fund is expected to be exhausted in a few short years. 
The Supplemental Medical Insurance Trust Funds is expected to continue 
to require General Fund transfers that can crowd out other spending 
priorities. Do you believe that the precarious state of Medicare's 
finances is a pressing problem that should be addressed by the Biden 
administration?

    Answer. While the last report of the Trustees found no material 
change in the solvency of the Medicare programs relative to the prior 
year, Covid has accelerated the depletion of the Medicare Hospital 
Insurance Trust Fund according to Congressional Budget Office 
projections released in September 2020. Thus the state of Medicare's 
finances remains something that requires close attention and 
evaluation. President Biden is committed to ensuring the stability of 
Medicare, and providing Americans with greater access to Medicare by 
lowering the eligibility age. These changes are part of President 
Biden's commitment to improve access to health care for all Americans.
                            general matters
    Question. Your record and statements indicate that you may find 
``behavioral economics'' to be useful. To some, behavioral economics is 
merely a way for economists to open up additional degrees of freedom 
into their analysis; and, with additional degrees of freedom, analyses 
lose rigor and results of the analyses become highly questionable and 
normative, in the minds of some. Some also believe that behavioral 
economics, and the ``nudges'' offered by them, often represent arrogant 
claims by elitists that, somehow, infallible ``experts'' or 
``technocrats'' are needed to nudge, guide, cajole, and regulate the 
fallible non-experts because those fallible people, for various 
possible ``behavioral'' reasons, simply don't make choices that are in 
their own best interests. Do you support behavioral economic analysis 
and, if so, what discipline is there to prevent behaviorists from try 
to regulate and constrain Americans simply because of normative 
preferences of the behaviorists?

    Answer. Behavioral economic analysis reflects the progress of 
economists in their quest to study how people make decisions given the 
many constraints they face. A fundamental premise is that people 
optimize, and do the best they can to make good decisions given their 
values, preferences, and opportunities. Over the past several decades, 
economists have discovered systematic ways in which individuals' 
decisions deviate from prior economists' assumptions. Behavioral 
economics seeks to replace old assumptions that have proven to be 
untrue using the insights of psychology and the evidence provided by 
experiments and observational data. As a result, economics has become a 
more rigorous social science. These insights give us a better 
understanding of how Americans are likely to experience and respond to 
public policy, and provide useful insight into the likely impact of 
policy on people's lives. Moreover, they provide accountability to 
ensure that policy choices have their intended effect. Your question 
refers to the insight of behavioral scientists that people are more 
likely to choose a default option rather than actively choosing the 
non-default option. That insight does suggest that good policy choices 
should recognize that the resulting default option will be chosen by a 
large share of Americans and therefore should be beneficial to a large 
share of Americans.

    Question. The so-called HEROES Act (H.R. 6800), which passed in the 
House of Representatives in May 2020, directs the Federal Reserve, in 
section 110801, in unusual and exigent circumstances, to purchase 
obligations issued by any State, county, district, political 
subdivision, municipality, or entity that is a combination of any of 
the several States, the District of Columbia, or any of the territories 
and possessions of the U.S. Such purchases would occur within proposed 
modifications to the Municipal Liquidity Facility that was established 
under section 13(3) of the Federal Reserve Act, and the modifications 
would have to be made to, among other things, ``ensure that any 
purchases made are at an interest rate equal to the discount window 
primary credit interest rate . . . commonly referred to as . . . the 
`Federal funds rate' ''; and, to ``ensure that an eligible issuer does 
not need to attest to an inability to secure credit elsewhere.'' Given 
that the Federal funds rate is near zero, section 110801 in effect 
requires that the Federal Reserve make near-zero interest rate loans to 
States, municipalities, and the like, independent of whether those 
jurisdictions are able to secure credit elsewhere--something that turns 
the Federal Reserve into an agency providing assistance that is close 
to grant making.

    Do you support the policies called for in section 110801?

    More generally, do you support requiring that the Federal Reserve 
make loans to potentially non-creditworthy borrowers at the Federal 
funds rate?

    More generally, do you support allowing the Federal Reserve to make 
grants to private or governmental entities?

    Answer. The country is currently facing an unprecedented pandemic 
that has exposed economic inequalities rooted in our financial system 
for generations. I believe that it is imperative that the government 
does its part to catalyze an economic recovery that is both equitable 
and sustainable, and supports policies that pursue these outcomes. 
Right now, taking too little action poses the greatest risk to the 
health of our economy, the livelihoods of the American people who drive 
that economy, and future generations. I support, and will pursue 
actions that provide aid to fully distribute the vaccine, reopen 
schools, deliver badly needed aid to State and local governments, 
support small business owners--and most importantly get people back to 
work, if confirmed. From Georgia to Montana and Nevada to Maine, first 
responders, educators, other essential workers need our help now.

    Question. You seem to oppose rule-based monetary policy, and 
instead prefer discretion. Do you symmetrically not support rules-based 
economic stabilizers, such as unemployment insurance tied formulaically 
to economic measures, and instead prefer fiscal-policy discretion that 
is consistent with a continuing role for Congress and representative 
democracy?

    Answer. Automatic stabilizers play a critical role in mitigating 
the negative impacts of recession. Our current system needs both 
updating and expansion, as evidenced by the economic strain placed on 
workers and families during the most recent downturn. Designing and 
implementing a modern and effective system of automatic stabilizers is 
an important step to take now, so that we can minimize the negative 
impacts of any future recessions. I am eager to work with Congress, if 
confirmed, on ways to automatically adjust the length and amount of 
relief depending on health and economic conditions so future 
legislative delay doesn't undermine the recovery and families' access 
to benefits they need.

    Question. You have, in recent years, identified that, in terms of 
long-term deficits, adjustments are needed in fiscal policies in light 
of demographics and what you referred to in 2017 as an ``unsustainable 
debt path.'' Abstracting from the serious recession- and crisis-related 
economic challenges that we face, what fiscal policy adjustments do you 
believe are needed, and do any of them not involve simply raising 
taxes?

    Answer. The most important thing we can do today to set us on a 
path to fiscal sustainability is defeat the pandemic, provide relief to 
the American people, and make long-term investments that will benefit 
future generations. There are long-term budget challenges. The 
President is committed to implementing responsible policies that grow 
the economy, ask high-income Americans and corporations to pay their 
fair share, and give our country even more capacity to face the 
challenges ahead.

    The President is committed to putting the country on a fiscally 
sustainable path and making sure that what we do now leaves future 
generations better off. Past experience suggests that, in times of 
economic weakness and low interest rates like today, taking the kind of 
action that the President supports to provide aid to Americans and help 
support the economy can lead to lower debt as a share of the economy 
even when financed by larger deficits in the short run. That's because 
the action leads to a healthier economy that generates more revenue and 
less in the way of future safety net spending.

    It is also urgent that we invest in the American people, in 
innovation, and in our physical infrastructure, because such spending 
will produce returns in the years ahead and leave future generations 
better off. Another important fiscal policy adjustment is the more 
efficient delivery of public services. For example, during the 
campaign, President Biden introduced several health reforms that would 
bend the growth in health costs, such as a plan to save billions by 
allowing the Federal Government to better negotiate drug prices. These 
reforms, coupled with higher rates of economic growth, can drive down 
long-term debt and deficits. In fact, the Penn-Wharton Budget Model 
found that the Biden health plan decreases the public debt by 4.6 
percent over 10 years and 10.7 percent over 30 years.

    Question. Do you support a wealth tax, and will you advocate for a 
wealth tax, including construction of an entirely new measurement and 
monitoring apparatus to track an entirely new tax base?

    Answer. President Biden has proposed to tax the investment income 
of families making more than $1 million at the same rate they pay on 
their wages and to tax some previously untaxed capital gains on the 
final return of wealthy taxpayers. These reforms would remove biases in 
the tax code that favor wealth over work.

    Question. Do you believe a wealth tax is constitutional?

    Answer. I would defer to constitutional scholars on this question, 
though I note that President Biden has not proposed a wealth tax.

    Question. What do you believe international evidence on the 
efficacy, or not, of wealth tax schemes tells us regarding whether or 
not it is useful to construct one in the U.S.?

    Answer. I would need to undertake a careful review of this 
literature before I could offer a nuanced assessment of the lessons we 
could draw from the international evidence on wealth taxes for a wealth 
tax in the U.S. context.

    Question. Former Treasury Secretary Lawrence Summers has written 
that ``Lack of income growth and opportunity for middle-class families 
is a fundamental problem in American society. So too is rising 
inequality. The role of moneyed interests in shaping policy is also a 
crucial political problem. Wealth taxation is not an effective approach 
to any of these problems.'' Do you agree with Summers's conclusion that 
wealth taxation is not an effective approach to the problems he 
identifies?

    Answer. I would need to undertake a careful review of this 
literature before I could offer a firm conclusion.

    Question. Economists Gabriel Zucman, Emmanuel Saez, and Thomas 
Piketty have established a clear political agenda, with what is 
apparently a purely normative animus toward rich people, and little 
else of policy substance, guiding their policy prescriptions. Those 
activists have become renowned for playing fast-and-loose with data, 
definitions, interpolations, and the like in order to force massaged 
data to conform with their normative prior policy preferences. With 
respect to claims about the progressivity of the U.S. tax system, for 
example, Zucman and Saez have claimed that the top 400 richest 
Americans pay a lower tax rate than the bottom 50 percent, which even 
liberal economist and former Treasury Secretary Lawrence Summers is 
quoted as having said is ``substantially inaccurate and substantially 
misleading.'' Numerous economists have questioned results, methodology, 
and attempts at Federal budget scoring of proposals put forward by 
Zucman, Saez, and Piketty in various co-authorship permutations. With 
the understanding that analyses, data, and claims from Zucman, Saez, 
and Piketty face credibility challenges, do you intend to rely on 
analyses and data that they produce in efforts to increase 
progressivity of the tax code in order to act on inequality?

    Answer. Tax policy-making should be grounded in the best available 
research and evidence. There is broad agreement in the economics 
profession that income and wealth inequality have increased in recent 
decades, though the precise magnitudes differ across studies and 
methodologies. Similarly, there is broad agreement that higher taxes on 
wealthy families can raise substantial amounts of revenue and make the 
tax code more progressive.

    There is no single best source of data or analysis for all 
purposes, but, if confirmed, I will work to ensure that Treasury's 
research and policy analysis is rigorous and based on the best 
available research.

    Question. Measures of income inequality differ according to data 
and techniques used. Are you aware of, and can you comment on, any 
analyses that use administrative data to find inequality increases over 
the recent past that are smaller than those found using other data?

    Answer. As noted above, there is a broad agreement in the economics 
profession that income and wealth inequality have increased in recent 
decades, though the precise magnitudes differ across studies and 
methodologies.

    Question. Some believe that, independent of revenue raised or lost 
because of implementation of a wealth tax, it is important to institute 
a wealth tax so ``billionaires'' and high-wealth individuals do not 
hoard such wealth.

    Do you support implementation of a wealth tax with the primary or 
sole intention of ensuring that there are fewer people with high wealth 
levels?

    If so, what social problem would you be intending to solve by 
implementing the wealth tax?

    Answer. As noted above, President Biden has proposed to tax the 
investment income of families making more than $1 million at the same 
rate they pay on their wages and to tax some previously untaxed capital 
gains on the final return of wealthy taxpayers. These reforms would 
remove biases in the tax code that favor wealth over work. He has not 
proposed a wealth tax.

    Question. According to a post on the Internal Revenue Service's 
website titled ``Audit Rates Increase as Income Rises,'' dated October 
20, 2020, and authored by Deputy Commissioner Sunita Lough: ``Despite 
common misperceptions about IRS examination rates, the reality is that 
the likelihood of an audit significantly increases as income grows.'' 
The posting provides data showing that higher-income taxpayers were 
audited at much higher rates in 2013-2015 than other taxpayers, and 
presents challenges surrounding audits of lower-income taxpayer 
receiving EITC (such as error rates on tax returns claiming EITC of 
around 50 percent and the improper payment rate involving EITC claims 
of more than $17 billion each year).

    Do you agree with the data provided by Deputy Commissioner Lough in 
the aforementioned posting?

    How would you address the seeming high error rates and high 
improper payment aggregate associated with taxpayers receiving EITC?

    Answer. It is also important to note that IRS estimates also show 
that EITC errors are responsible for less than 10 percent of taxes that 
are not paid on time, while studies show that the top 1 percent of 
filers may be responsible for more than a quarter of that ``tax gap.'' 
Furthermore, about a fifth of households who are eligible for the EITC 
do not file a tax return to claim it.

    If I have the privilege of being confirmed, I look forward to 
working with Treasury, the IRS, and Congress to ensure that IRS tax 
compliance and enforcement activity is focused towards the largest 
sources of the tax gap, and that the tax laws are fairly applied for 
working families and wealthy filers alike. I would also work to both 
reduce EITC error and ensure that working families in fact receive 
their hard-earned credits, such as by working with the Treasury 
Department and Congress to reduce complexity and barriers to accurate, 
easy tax filing.

    Question. On December 2, 2020, Project Syndicate published an 
article by Joseph Stiglitz titled ``What Yellen Must Do.'' In the 
article, Stiglitz wrote that ``some $500 billion of this `global money' 
[SDRs] could be issued overnight if only the U.S. Secretary of the 
Treasury would approve.'' And, he wrote: ``Biden could give the green 
light.''

    Do you agree with Stiglitz's recommendation, and do you plan to 
issue $500 billion of SDRs?

    More generally, will you commit to consulting with Congress, on 
both sides of the aisle, before pledging any additional funding, or 
rearrangement of existing funding, to multilateral international 
institutions such as the IMF?

    Answer. We must make sure that the IMF and World Bank are doing 
everything they can to ensure that developing countries have the 
resources for public health and economic recovery. We must also get the 
most vulnerable countries the debt relief they need at this critical 
time. I know that there are a variety of proposals out there. If 
confirmed, I will direct my team to analyze the full range of ways that 
the international community can strengthen its support for the most 
vulnerable countries during this emergency. I look forward to studying 
the issue further and pledge to adhere to the legal requirement to 
consult with Congress before making a decision on the U.S. position on 
an SDR allocation.

    Question. You have advocated for additional ``relief'' funding for 
State, local, and other units of government, based partly on forecasts 
of ``lost revenue.'' Those forecasts, since the onset of the pandemic, 
have been far off the mark. Moreover, they are often based on 
historical patterns between things like revenue and unemployment rates 
that obtained in past periods in which the economy was subject to 
recession-inducing forces, but nothing at all like we have seen since 
early 2020.

    Do you continue to advocate for additional State, local, and other 
government relief?

    If so, what data on revenue realizations guide your advocacy, and 
what studies of lack of State, local, and other government ``relief'' 
in past recessions lead you to believe that without additional funding 
now, recovery from a recession would be held back in some ways, and do 
you think that your assessment reflects a consensus from academic 
literature on the topic of efficacy of Federal relief aid to State, 
local, and other governments?

    Answer. Relief for State and local governments remains essential to 
combat the pandemic, restart our economy, and reopen our schools. 
States and localities need funds for public health and education, and 
to keep front line workers on the job. The last thing we would want 
would be for States and localities to lay off teachers, transportation 
workers, sanitation workers, or the health-care workers, firefighters, 
and police officers so essential for public health and safety.

    There is strong evidence from past recessions that a failure to 
support State and local governments will make this crisis worse. I 
understand that this recession is different from prior ones and have 
been closely following changes in State and local revenue and 
expenditure. Based on that ongoing review, it remains the case that 
State and local governments all across our country need the support of 
the Federal Government in this time of need.

    Question. The incoming administration desires to reset the Federal 
minimum wage to $15, despite warnings from the Congressional Budget 
Office that such a move could cost upwards of 3.7 million workers a 
job. Of course, given variations in the cost of living across the 
country, $15 for a worker in, say, New York City or Berkeley, CA, is 
far different than for a worker in, say, West Virginia. And paying $15 
an hour as an employer in Iowa is different, in terms of production 
costs, than in States with higher overall living costs. A $15 minimum 
hourly wage is only a bit below the May 2019 median hourly wage for all 
occupations for West Virginia.

    Do you agree with the 2019 analysis from the Congressional Budget 
Office that increasing the minimum wage, depending on how the increase 
is implemented, will result in 1.3 million workers becoming jobless, 
and there is a two-thirds chance that the change in employment could be 
a decrease of up to 3.7 million workers?

    Do you believe that many low-wage workers will become displaced by 
technology if a $15 minimum wage in enacted?

    Do you believe there are negative employment effects of increasing 
the minimum wage at both the extensive and the intensive margin?

    What economic literature do you rely on to make your assessments 
regarding effects of an increase in the minimum wage to $15, which is 
well outside the size of an increase that could be comfortably thought 
of as being within the relevant range of applicability of existing 
studies?

    Would you support implementation of indexation such that an 
increase in the Federal minimum wage to $x per hour is implemented, but 
with $x per hour applying to any States with price levels equal to the 
national median and the minimum wage in other States or municipalities 
indexed to State or municipal living costs using the Bureau of Economic 
Analysis's Regional Price Parities (RPPs) measure?

    Answer. Raising the minimum wage will lift tens of millions of 
Americans out of poverty while expanding access to opportunity for 
countless small businesses nationwide. It matters how it's implemented, 
and the President's minimum wage will be phased in over time, giving 
small businesses plenty of time to adapt. Raising the wages of the 
lowest-paid workers in America can unlock billions of dollars of 
consumer spending that could be used to fuel demand for the essential 
goods and services small businesses provide. With greater revenue 
coming in, entrepreneurs can not only pay their employees higher wages 
(which will increase productivity and retention), but also invest in 
new equipment, expand their operations, and grow their business.

    Question. Recent reports indicate that unemployment insurance fraud 
in California alone may total $8 to $10 billion. Fraud takes resources 
away from those to whom the Federal Government intends to help and 
places them in the hands of undeserving fraudsters, some of whom seem 
to recently have been parts of organized crime rings, perhaps with 
international scope. I've already asked the Department of Labor to 
investigate California's unemployment insurance system, since the 
Governor of the State does not seem very interested in being serious 
about reining in fraud. And, in the relief package that was enacted 
just a few weeks ago, I argued for strengthened anti-fraud protections, 
while Democrats did not want many--if any--protections, partly based on 
a notion that fraud detection could involve use of racial- or income-
biased risk-based fraud-detection systems.

    Do you believe, with billions of dollars of fraud in the 
unemployment insurance system, additional fraud detection is important?

    Do you believe that it is possible to enact legislation calling for 
systems of risk-based fraud detection without the result being use of 
systems or algorithms that have racial- or income-based biases?

    Answer. The unemployment insurance (UI) program has provided a 
lifeline to millions of Americans in need. Due to the depth of this 
economic crisis, State agencies have been working tirelessly, and are 
stretched thin under this massive workload trying to get benefits to 
qualified applicants. I am supportive of efforts to combat UI fraud 
that do not impede working families from accessing funds when they need 
them most. If confirmed, I look forward to working with Congress and 
the Department of Labor on this important issue.

    Question. You have referenced low interest rates as a partial 
rationale for massive expansions of Federal spending, and have 
identified that debt service costs are important to monitor with 
respect to future fiscal challenges.

    Do you believe that there are risks that, given the maturity 
structure of outstanding debt and associated ``rollover'' risks in 
Federal debt financing, interest rates could rise above what most 
currently expect, thereby increasing likelihood of a fiscal crisis?

    Is advocacy for massive expansions of Federal spending under a 
belief that long-term real interest rates will remain low for a long 
time into the future a risky bet, effectively using tax obligations of 
future generations as the wager, that rates will remain low for a long 
future period?

    Answer. In the current environment, the most pressing challenge is 
to overcome the pandemic and rebuild our economy. That will require 
additional relief, as proposed by President Biden. I look forward to 
working with the Congress to secure that relief. Presently, interest 
rates are at historically low levels, and our interest burden as a 
percentage of GDP is also quite low. Therefore, in the current 
environment, it makes sense to focus on the relief needed to support 
families and businesses. I look forward to working closely with 
Treasury's debt management professionals to ensure we have an effective 
borrowing strategy. Over the longer term, as I have often stated, we 
need to ensure that our country is on a sustainable path with respect 
to our debt burden. I look forward to working with Congress on these 
important issues, if confirmed.

    Question. In the past, I believe that you have identified that, 
outside of recession or an economic ``crisis,'' long-term fiscal 
sustainability, including existing unsustainable mandatory spending 
programs, is something that is important to be concerned about.

    Do you believe that now?

    If not, and if your views have changed over the past couple of 
years, please explain how your views have changed and what evidence led 
you to change your views.

    Answer. In the current environment, the most pressing challenge is 
to overcome the pandemic and rebuild our economy. That will require 
additional relief, as proposed by President Biden. I look forward to 
working with the Congress to secure that relief. Presently, interest 
rates are at historically low levels, and our interest burden as a 
percentage of GDP is also quite low. Therefore, in the current 
environment, it makes sense to focus on the relief needed to support 
families and businesses, rather than on the overall level of our 
national debt. Over the longer term, as I have often stated, we need to 
ensure that our country is on a sustainable path with respect to our 
fiscal position, including with respect to assuring that our safety net 
programs are robust and sustainable. I look forward to working with 
Congress on these important issues, if confirmed.

    Question. You identified during the hearing on your anticipated 
nomination that some public projects have been shown to promise 
``extremely high returns.'' One idea put forward by you and others is 
that ``investments'' by the Federal Government in things like 
infrastructure projects with ``high returns'' would be prudent in the 
face of low real financing costs.

    What are the public projects that you claim have been shown to 
promise ``extremely high returns.''

    How are those returns measured?

    How long will it take for the projects you identify as having 
extremely high returns to actually generate those returns (i.e., how 
``shovel-ready'' are they)?

    Answer. Public projects can generate meaningful economic gains 
through a variety of mechanisms. For example, projects can increase 
economic activity by raising productivity, increasing labor supply, or 
stimulating the macroeconomy in the face of falling growth. Estimates 
by economists regularly find that each $1 of public spending can boost 
economic activity by well-over $1.5--and sometimes substantially 
higher. Examples of stimulative investments can also include 
unemployment insurance for workers facing long-duration unemployment, 
temporary increases in food stamps, as well as funding needed 
infrastructure projects.

    The returns to public spending are measured through a variety of 
metrics, including increased economic activity, higher levels of 
employment, and even increased revenue. The amount of time required for 
these programs to generate returns can vary from one quarter to several 
years. In the case of investment in young children's education, it can 
take over a decade for the returns to fully materialize--although the 
gains persist for a generation.

    Question. Your response to my question on rural interests during 
the hearing on your anticipated nomination was somewhat disappointing. 
It sounded as though you are intending to pursue general policies aimed 
largely or solely at economic aggregates, with a notion that anything 
you do in the aggregate will be enough to ensure equitably shared 
returns for rural families and rural economies. Do you have any ideas 
for policies that focus on rural and agricultural interests, given that 
many in rural America have felt left out of any returns from 
globalization and Washington, DC-based decision making?

    Answer. I share your concerns that too many rural communities have 
been left behind by globalization and other forces, and I am committed 
to pursuing policies that specifically ensure that the unique needs of 
rural Americans are addressed. I believe there are opportunities, for 
example, in our efforts to expand access to capital and provide credit 
to entrepreneurs to pay special attention to ensuring that programs are 
available and accessible to rural small businesses. If confirmed, I 
look forward to working with you and members of the committee to 
achieve that goal.

    Question. Do you believe that underfunded State and local public 
pensions pose a risk to financial stability in the United States?

    Answer. States and localities face a wide range of conditions with 
regard to their public pensions, which can create varying challenges 
for their own fiscal situations--even if State and local public 
pensions are not typically considered a major risk factor to overall 
financial stability. If confirmed, I would look to pursue an economic 
agenda that would support the kind of broad-based economic growth that 
would also have a positive impact on public pensions.

    Question. Republicans in Congress during the Obama administration 
had developed proposals to help address State and local public pension 
challenges. Will you commit to working with Congress and members of the 
Finance Committee on both sides of the aisle in examining the issue?

    Answer. I look forward to learning more about proposals that 
members of this committee have developed on the issue, if confirmed.

    Question. Given what I expect will be proper efforts on your part 
to examine diversity at the Treasury Department, your views on 
diversity will impact your decision making. With respect to a recent 
lawsuit alleging that Harvard University's admissions processes 
discriminate against Asians:

    Why did you join an amicus brief to seemingly reinforce your view 
that statistical procedures and arguments used by your Berkeley 
colleague Professor David Card were more carefully executed than 
procedures and arguments used by the opposing side?

    Do you believe, given arguments and analyses that you have seen 
related to the case, that Harvard admissions do not discriminate 
against Asians?

    Using data from a lawsuit against Harvard, an April 2020 National 
Bureau of Economic Research paper (Working Pater 27068) by Arcidiacono, 
Kinsler, and Ransom identifies that they ``show that there is a 
substantial penalty against Asian Americans in admissions with limited 
scope for omitted variables to overturn the results.'' Do you find the 
results of that paper to be relevant to your views expressed in the 
amicus brief that you joined, and do the results weigh on your views of 
whether or not Harvard has discriminated against Asians through its 
admissions processes?

    Answer. I signed the amicus brief and supported the arguments that 
were laid out within it. I cannot speak further to the admissions 
process at Harvard, but as I said at my confirmation hearing, issues of 
diversity, inclusion, and racial equity are incredibly important, 
particularly at this moment in history when the pandemic has taken an 
unbelievable and disproportionate toll on low-income workers and 
especially people of color. And because I am so concerned about the 
impact on minority communities, the very first meeting that I had after 
my nomination was announced was with representatives of racial and 
economic justice groups to hear directly from them what their needs 
are. The focus of having diverse viewpoints and leadership within the 
Treasury Department will continue to be one of my top priorities.

    Question. The U.S. private motor coach, school bus, and domestic 
passenger vessel industries have suffered unprecedented economic losses 
and furloughed hundreds of thousands of employees over the past 10 
months due to the pandemic. Collectively, these industries have 
furloughed or laid off an estimated 308,000 employees due to the COVID-
19 pandemic. These businesses do not expect to see the start toward a 
return to ``normal'' business operations until mid- to late 2021, at 
the earliest, forcing their employees to remain out of work or be lost 
to other industries. Congress provided some relief for these industries 
in the legislation signed into law on December 27, 2020. That bill 
provided $2 billion in grants for these industries to be jointly 
administered by the Department of Treasury and the Department of 
Transportation.

    Because this is an entirely new program that needs to be 
established by the Department of the Treasury in consultation with the 
Department of Transportation, what can the Department of the Treasury 
do to expedite development of the program and distribution of the 
funds?

    Will you commit to expedite, if confirmed, this program and do 
everything possible to get funds to these companies as soon as 
possible?

    Will you commit to providing the Finance Committee with details of 
the guidance and criteria that Treasury will use to administer these 
funds as soon as they are developed?

    Answer. The $2-billion grant program included in the legislation 
signed last December is an important source of support for the private 
motor coach, school bus, and domestic passenger vehicle industries. I 
recognize the importance of these industries and the people they 
employ. If confirmed, I will work closely with leadership of the 
Department of Transportation to implement this program as quickly and 
effectively as possible, and I look forward to consulting and working 
with the Finance Committee on this important program.

                                 ______
                                 
          Follow-up Questions Submitted by Hon. Chuck Grassley
    Question. At various times during the campaign, President Biden 
suggested he would repeal the Tax Cuts and Jobs Act either in full or 
in part. Please indicate (yes or no) whether the incoming Biden 
administration supports the following:

    Would the Biden administration support repealing the doubling of 
the Child Tax Credit from $1,000 to $2,000? If no, would the 
administration support making this provision permanent?

    Would the Biden administration support repealing the enhanced 
standard deduction, which increased the standard deduction from $6,500 
to $12,000 for singles, from $13,000 to $24,000 for married couples, 
and from $9,550 to $18,000 for heads of household in 2018? If no, would 
the administration support making this provision permanent?

    Would the Biden administration support repealing the reduced tax 
rates put in place for middle-class taxpayers, which included reducing 
the 15-percent bracket to 12 percent? If no, would the administration 
support making this provision permanent?

    Would the Biden administration support repealing the qualified 
business income deduction, which allows small businesses to deduct up 
to 20 percent of their qualified business income? If no, would the 
administration support making this provision permanent?

    Dr. Yellen did not answer each question to indicate whether the 
Biden administration would support either the repeal or permanency of 
the specified provision.

    Answer. Both during the campaign and the transition, President 
Biden supported an expansion of the Child Tax Credit, namely making the 
credit fully refundable and raising the maximum value of the credit to 
$3,600 for families with young children, and $3,000 for others. During 
the campaign, he also firmly committed to a policy of avoiding tax 
increases on taxpayers with income under $400,000. Together, these 
suggest that the Biden-Harris administration will support higher levels 
and refundability of the Child Tax Credit. These improvements to the 
Child Tax Credit would be expected to have a dramatic effect on lifting 
children out of poverty nationwide, and I would welcome the opportunity 
to work with the committee on this effort.

    Between the elimination of personal exemptions and expansion of the 
standard deduction, the Tax Cuts and Job Act put in place a series of 
reforms that shifted the relative tax burden for families largely based 
on household size and itemization status. I will need to study the 
economic and distributional implications of these combined reforms 
before making a judgment and look forward to engaging with you and 
others in Congress on this important matter, if confirmed.

    During the campaign, President Biden supported repeal of the parts 
of the 2017 tax cuts that benefited the wealthiest Americans and 
largest companies; he clarified that the repeal of certain aspects of 
the tax law would be restricted only to those taxpayers making more 
than $400,00 a year, with a firm commitment that taxpayers earning less 
than this amount would not see their taxes increase.

    The goal of the Biden-Harris administration is to provide support 
for small businesses through a variety of mechanisms, including 
expanded access to the PPP program and an array of programs designed to 
provide capital to underserved communities. Before making a judgment on 
this particular provision, I would need to study not only it's specific 
impact on small businesses, but the combined impact of other small 
business initiatives. I hope to closely consult with Congress as I 
better understand the impact of extending this provision.

    Question. Senate and House Democrats have argued for repealing the 
$10,000 cap on the State and local tax (SALT) deduction as part of 
pandemic relief efforts. According to the Tax Policy Center, a joint 
project of the Urban Institute and Brookings Institution where you are 
a distinguished fellow, such a proposal included in a House passed 
pandemic relief measure would provide the top 0.1 percent of households 
an average tax cut of nearly $144,000. At the same time it effectively 
would give no benefit to the bottom half of households. In your 
opinion, does it make sense for pandemic relief efforts to prioritize 
six-figure tax cuts for the wealthiest few when millions of middle-
class American families are struggling to make ends meet? Would you 
oppose including a repeal of the SALT cap in any further relief or 
stimulus measures?

    In response to this question, Dr. Yellen indicated the 
administration needs additional time to examine the SALT cap to come to 
a decision on whether the cap is justified. Given the need for 
additional time to review this issue, does this mean the Biden 
administration would not be supportive of efforts to repeal the SALT 
cap as part of impending COVID relief/stimulus efforts?

    Answer. President Biden has released his proposal for an American 
Rescue Plan that would form the basis of a new COVID relief package. As 
you know, that proposal did not include a repeal of the SALT cap. As 
the process of passing related legislation moves to the next phase, I 
anticipate that, if confirmed, I would be in a position to evaluate a 
wide range of proposals, and that I would be able to do so during the 
course of any negotiations with the benefit of the expertise of the 
Treasury Department. I would also welcome the views of members of this 
committee and others in Congress as we consider what provisions to 
include in any final relief package.

    Question. Millions of retirees and participants in multiemployer 
pension plans face an impending crisis. Many plans are in poor 
financial health, and the PBGC's multiemployer pension insurance fund 
is projected to be insolvent in 2026 according to PBGC's latest annual 
report. I am committed to finding a bipartisan solution that can 
resolve this crisis. If confirmed, will you commit to working with this 
committee and other interested Senators on a long-term solution that 
will secure the retirement benefits for these retirees while also 
reforming the underlying system and ensuring taxpayer dollars will not 
be used to finance a private-sector system in perpetuity?

    In her response, Dr. Yellen noted that President Biden supports 
passage of the Butch Lewis Act. Since efforts in 2020 focused on an 
alternative approach using partition relief:

    Does the Biden administration support employing a partition 
approach to help failing multiemployer pension plans?

    Do you believe taxpayer dollars should be committed in perpetuity 
such that the government would effectively finance this private-sector 
pension system?


    Answer. I am aware that while members of Congress would like to 
seek a resolution to the multiemployer pension crisis, there are 
competing approaches to a resolution--including the Butch Lewis 
legislation and the partition approach. I respect the expertise of 
members of Congress, many of whom have been working to resolve this 
issue for years, and look forward to further consultation on this 
issue.

    I believe that workers should have access to their earned pension 
benefits, but also believe it is imperative to find an approach that 
does not create undue burdens on American taxpayers. This is a complex 
issue, and I am eager to work with members of Congress to find a 
solution to ensure that working families who rely on the commitment of 
a pension plan aren't left behind.

    Question. Prior to the Tax Cuts and Jobs Act (TCJA), the United 
States had one of the highest corporate income tax rates among 
developed countries. TCJA lowered the corporate rate to ensure that our 
domestic businesses would remain globally competitive. Even at 21 
percent, the United States still holds the 11th highest corporate tax 
rate out of the top 36 developed countries, according to the Tax Policy 
Center.\6\
---------------------------------------------------------------------------
    \6\ https://www.taxpolicycenter.org/fiscal-fact/oecd-corporate-tax-
rate-ff-01042021.

    President Biden has proposed increasing the 21-percent rate to 28 
percent. If enacted, the United States once again would have one of the 
highest business tax rates among developed countries. Unfortunately, 
not just U.S. companies would be affected by the rate increase. There 
is an economic consensus that a significant portion of the corporate 
income tax falls on workers in the form of reduced wages and benefits. 
Even the Tax Policy Center, which is a joint venture of the Urban 
Institute and Brookings Institution where you are a Distinguished 
Fellow, assumes 20 percent of the corporate tax falls on workers. 
Similarly, the Joint Committee on Taxation and Congressional Budget 
Office have both concluded that 25 percent of the corporate tax is 
borne by workers. If the corporate tax rate is increased to 28 percent 
as proposed, American workers will also feel the burden through fewer 
---------------------------------------------------------------------------
jobs, reduced wages, and less benefits.

    What are your views on increasing the corporate tax rate above that 
of most developed countries, particularly if a significant portion of 
the rate increase would also be borne by American workers?

    With the unemployment rate continuing to be high due to the COVID-
19 pandemic, wouldn't an increase in the corporate tax rate that is 
borne in significant part by labor hinder efforts to restore the 
historically low unemployment rates we saw in 2019?

    Dr. Yellen did not respond to the first question regarding her view 
on an increase in corporate tax being borne by American workers. Please 
provide a direct and substantive response.

    Answer. President Biden has proposed a slate of proposals that 
would strengthen the economy and benefit American workers. The question 
of corporate tax incidence is one that received substantial attention 
during the presidential campaign. The recent change in the corporate 
tax rate enacted as part of the TCJA provides an opportunity to study 
precisely how changes in the corporate rate impact wages, although 
virtually all public finance economists agree that these dynamics will 
play out over several years. Presently, there is little evidence of a 
material increase in wages and thus incidence on workers. I look 
forward to studying this issue further and consulting with both 
Congress and public finance experts, if confirmed.

    Question. President Biden has proposed a new 15-percent corporate 
minimum tax based on book income, rather than taxable income as 
currently used in the tax code. As you know, book income, as reported 
on a company's financial statements, is designed to provide information 
on the company's performance for investors and creditors based on 
generally accepted accounting principles. On the other hand, taxable 
income is computed in accordance with the Internal Revenue Code and 
regulations as the basis for imposing taxes.

    Under the tax code, U.S. taxpayers are permitted to adjust their 
taxable income by allowable deductions, many of which reflect 
incentives that Congress intended to encourage certain behavior. For 
example, bonus depreciation is intended to encourage U.S. companies to 
invest more in capital expenditures, like equipment and fixed assets. 
Imposing a minimum tax would effectively remove the benefit and 
undermine the legislative intent of those provisions. Further, it would 
require companies and the IRS to calculate tax liability under 
different tax bases, creating significant complexity for taxpayers and 
the IRS.

    Given the important differences between accounting principles and 
the deductions permitted by the tax code, do you agree there are 
legitimate reasons for substantial differences between book income and 
taxable income and that book income is not an appropriate basis for a 
new alternative tax regime?

    Dr. Yellen did not respond with her views on whether it is 
appropriate to use book-accounting rules as a basis for a new 
alternative tax regime. Please provide a direct and substantive 
response.

    Answer. I appreciate the potential complexities of using book 
income to calculate corporate tax burdens, but am also concerned about 
the zero or very low tax burdens borne by a subset of corporations. 
Ideally, the U.S. would implement a corporate tax code that limits 
opportunity for gaming, while also preserving access to tax provisions 
that encourage productive investment. This is a complex issue requiring 
further study of concerns related to basing corporate tax burdens on 
book income, and if confirmed, I hope to work with you and others in 
Congress, as well as the Treasury staff, on this issue.

    Question. Under the Coronavirus Aid, Relief, and Economic Security 
(CARES) Act, Congress created a temporary rule allowing U.S. businesses 
to carry back net operating losses (NOLs) incurred in 2018, 2019, and 
2020 to the prior 5 years. In the Health and Economic Recovery Omnibus 
Emergency Solutions (HEROES) Act, House Democrats proposed to repeal 
the CARES Act NOL provisions, effectively imposing a retroactive tax 
increase on businesses experiencing losses as a result of the pandemic. 
The expected revenue effect of the changes proposed in the HEROES Act 
was nearly $250 billion. Do you support this kind of retroactive tax 
change that would significantly increase taxes on businesses 
experiencing losses? Do you agree with former President Obama's sound 
advice when he said during the aftermath of the financial crisis, ``The 
last thing you want to do is raise taxes in the middle of a 
recession''?

    Dr. Yellen did not express support or opposition to introducing a 
retroactive tax increase during the pandemic on businesses experiencing 
losses. Please provide a direct and substantive response.

    Answer. President Biden has released his proposal for an American 
Rescue Plan that would form the basis of a new COVID relief package. As 
you know, that proposal did not include repealing the CARES Act NOL 
provisions. As the process of finalizing the package and advancing 
legislation moves to the next phase, I anticipate that I would be 
better positioned to evaluate and weigh in on a wide range of proposals 
and, if confirmed, would be better able to do so with the benefit of 
the expertise of the Treasury Department. I would also welcome the 
views of members of this committee and others in Congress as we 
consider what provisions to include in any final relief package.

    Question. Pillar 2 of the OECD's proposed ``unified approach'' 
would effectively create a global minimum tax. The Treasury Department 
to date has made it a priority that the U.S. global intangible low-
taxed income (or GILTI) tax regime would be treated as a ``deemed 
compliant'' regime under any multilateral agreement. Do you plan to 
continue to advocate for GILTI to be treated as a deemed-compliant 
regime under Pillar 2?

    Dr. Yellen did not answer whether the Treasury Department would 
continue to advocate for GILTI to be treated as a deemed-compliant 
regime under Pillar 2. Please provide a direct and substantive 
response.

    Answer. President Biden has proposed substantially reforming GILTI 
as part of his plan to ensure a fair and progressive tax code where 
wealthy individuals and corporations pay their fair share. If 
confirmed, I look forward to learning more from Treasury Department 
staff about the status of these negotiations and how they relate to 
other diplomatic efforts. As part of that process, I will consult with 
the staff about the extent to which such positions are appropriate, 
including whether it would be appropriate to treat the current U.S. 
GILTI regime as a ``deemed compliant'' regime.

    Question. As part of the proposed Pillar 2 approach, the OECD has 
proposed an ``undertaxed payment rule'' that would complement the 
global minimum tax. The undertaxed payment rule effectively would tax a 
business on a payment made if the recipient business is not subject to 
a certain level of tax with respect to the payment. U.S. businesses 
have voiced concerns that payments received by a U.S. company from a 
foreign affiliate could be subject to the undertaxed payment rule if 
the payment receives preferential treatment under the foreign derived 
intangible income (FDII) regime or through the application of another 
preferential rate or credit regime. Will you advocate to preserve the 
application of U.S. tax law, including FDII and other preferential 
rates and credits, if Pillar 2 includes an undertaxed payment rule?

    Dr. Yellen did not answer whether the Treasury Department would 
advocate to preserve the application of U.S. tax law, including FDII 
and other rates and credits, under Pillar 2. Please provide a direct 
and substantive response.

    Answer. If confirmed, I look forward to learning more from Treasury 
Department staff about the status of these negotiations and how they 
relate to other diplomatic efforts. As part of that process, I will 
consult with the staff about the extent to which it would be 
appropriate to advocate for a multilateral rule specific to the United 
States FDII regime in the context of a global discussion of a generally 
applicable undertaxed payments rule.

    Question. President Biden has proposed doubling the tax rate on 
global intangible low-taxed income (GILTI) earned by foreign 
subsidiaries of U.S. companies from 10.5 percent to 21 percent. The 
Biden proposal also would eliminate GILTI's exemption for deemed 
returns under 10 percent of qualified business asset investment (QBAI). 
While described as a ``loophole,'' QBAI is intended to represent 
earnings attributable to physical infrastructure in a foreign country. 
Because GILTI is intended to target intangible income, income 
attributable to tangible income should not be subject to tax.

    While President Biden has described GILTI as an incentive for U.S. 
companies to shift operations overseas, before the Tax Cuts and Jobs 
Act (TCJA), many U.S. companies paid no U.S. tax on their foreign 
earnings. An increase in the GILTI rate to 21 percent would make U.S. 
companies far less competitive with their foreign counterparts because 
most foreign countries do not subject a company's foreign earnings to 
the same level of tax as domestic earnings. Coupled with the 
elimination of QBAI, raising the rate to 21 percent would actually 
incentivize U.S. companies to invert or be acquired by foreign 
companies, particularly given that the OECD is currently considering a 
global minimum tax around 13 percent.

    What is your view on the United States imposing a 21-percent tax on 
foreign earnings if the OECD is planning to implement a global minimum 
tax at or around 13 percent? Wouldn't that harm our U.S. companies by 
making them far less competitive?

    Dr. Yellen's response provides that a ``global minimum tax agreed 
to at the OECD could, however, stop the destructive global race to the 
bottom on corporate taxation and help discourage harmful profit-
shifting.'' If a global minimum tax is agreed to at the OECD at or 
around 13 percent, would the Treasury Department propose that GILTI 
apply at the same rate as agreed to at the OECD or continue to pursue 
the 21-percent rate proposed during the campaign?

    Answer. I appreciate your concern regarding the competitiveness of 
our U.S. companies amidst a changing international tax landscape. As 
you note, President Biden has proposed substantially reforming GILTI as 
part of his plan to ensure a fair and progressive tax code where 
wealthy individuals and corporations pay their fair share. The U.S. has 
strong and unique attractions as a residence for multinational 
corporations and, as a result, U.S. companies would remain competitive 
even if they faced a somewhat higher 21 percent rate of tax on their 
foreign earnings. This is even more true if a global minimum tax were 
agreed to at the OECD.

    Question. President Biden's ``Made in America'' proposal includes a 
10-percent penalty on goods and services imported by U.S. companies 
from foreign affiliates. This policy would only penalize U.S. 
companies, putting them at a competitive disadvantage with similarly 
situated foreign companies. It also ignores the reality of global 
supply chains. If our country penalizes imports from foreign countries, 
couldn't this policy encourage foreign countries to tax goods or 
services imported from the United States?

    Dr. Yellen's response does not answer the question of whether this 
policy could encourage foreign countries to tax goods or services 
imported from the U.S. subsidiary of a foreign company. Please provide 
a direct and substantive response.

    Answer. Anticipating the response of other countries to a tax 
change passed in the United States is difficult, and relies on a 
variety of specific factors concerning the nature of the change and the 
foreign country in question. While I would--if confirmed--welcome the 
opportunity to further explore this question with you with more 
specificity, President Biden's proposal would support American 
businesses and workers.

    Question. I have been a strong proponent of the bipartisan IRS 
private debt collection program, along with Senator Schumer. In 2015, 
Congress updated and made mandatory the IRS private debt collection 
program. This program is designed to chip away at the tax gap by 
requiring the IRS to contract with private debt collectors to collect 
inactive tax debt due but unpaid. These are the tax debts not being 
worked by the IRS and, absent this program, would likely never be 
collected. The program has proven its ability to collect hundreds of 
millions of dollars in otherwise uncollectible tax debts on an annual 
basis, including generating nearly half a billion dollars in net 
revenue in fiscal year 2020 alone. At the same time, it has generated 
additional resources for the IRS that have enabled the IRS to hire 400 
compliance personnel and collect millions more in additional revenue. 
As Treasury Secretary, can you assure me that the Treasury Department 
will continue to operate the program to the full extent authorized 
under the law, including by ensuring that all inactive debts as defined 
by the statute are provided to the collection companies in a timely 
fashion?

    Dr. Yellen indicated that she would work with the IRS to ``make 
sure taxes are collected in an efficient and effective manner,'' but 
did not address whether the Treasury Department, under her leadership, 
would faithfully operate the private debt collection program as 
required by law.

    Answer. I look forward to working with Treasury, if confirmed, to 
ensure that the private-public partnership makes the tax system better 
for taxpayers while strengthening the IRS.

    Question. In a 2012 paper titled ``Behaviorally Informed 
Regulation,'' authors Michael S. Barr, Sendhil Mullainathat, and Eldar 
Shfir proposed, among other things, a scheme in which credit-card 
issuing firms could charge late fees that ``they deemed appropriate, 
but the bulk of such fees would be placed in a public trust to be used 
for financial education and assistance to troubled borrowers.'' Firms 
could keep a share of the fees, but ``the bulk'' of the fees would 
effectively be nationalized and presumably controlled by the Federal 
Government's behaviorists. Do you support such a scheme of effectively 
nationalizing late fees on things like credit cards?

    Dr. Yellen did not answer whether she supports such a scheme.

    Answer. I look forward to studying the specific reform proposal 
raised in the paper and referenced in the question. If I am confirmed, 
I am committed to working with you to address the issues of 
insufficient financial literacy, reasonable access to credit, and a 
well functioning and competitive financial system raised by the paper. 
I look forward to working with Congress to ensure that consumers 
everywhere are informed and safe in the financial marketplace.

    Question. You have mentioned ``stranded assets'' several times 
during your confirmation process as a risk from climate change that you 
seem to believe could become some sort of aspect of a risk to financial 
stability.

    Is the anticipated shut-down of the Keystone XL project by the 
incoming administration an example of stranded assets, where 
investments have been made and the Federal Government intervenes to 
strand them and make them worthless?

    Is one of the largest risks to realizing large amounts of stranded 
assets a risk that the Federal Government will take unanticipated (when 
the investments were made) actions to make such assets essentially 
worthless, because of actions by the Federal Government intended to 
shut down production in sectors such as coal or other ``fossil fuels?''

    Dr. Yellen did not identify whether she believes shut-down of 
Keystone XL is an example of a stranded asset. Dr. Yellen simply says 
that transition from fossil fuels and other energy sources to renewable 
energy sources is not a decision or choice. She did not comment 
substantively on whether shutdowns of energy-source sectors stemming 
from government regulation or other actions present a risk of a large 
amount of stranded assets being realized.

    Answer. As you know, President Biden revoked the permit for the 
Keystone XL Pipeline. That decision was consistent with the finding of 
the State Department--after exhaustive review--that the pipeline's 
significance for energy security and economy is limited. The revocation 
for the permit for the Keystone XL Pipeline may negatively impact some 
investors in the project, however, the continued development of the 
pipeline would have created environmental risks.

    I am committed to taking steps to better understand the physical 
and transition risks of climate change to our economy, if confirmed. 
President Biden has put forth a vision for investing in a clean energy 
economy that would recognize both the costs and risks of climate change 
on the economy, and the opportunities to create new, good-paying jobs.

    Question. Do you intend to resurrect the Obama administration's 
failed and ill-
designed myRA retirement savings scheme, partly by misusing the 
permanent, indefinite appropriation provided to Treasury for 
compensating financial agents?

    Dr. Yellen did not identify whether she intends to resurrect myRA, 
which would entail use of a permanent, indefinite appropriation for 
financial agents.

    Answer. I am very concerned about retirement adequacy in the United 
States, and am committed to identifying innovative, effective, and 
cost-efficient strategies for improving the financial well-being of 
American households. I am aware of the goals of the MyRA program, and 
some of the concerns surrounding the initiative's administration. If 
confirmed, I look forward to consulting with Treasury staff on the MyRA 
program and partnering with you and others in Congress to improve our 
country's retirement adequacy.

    Question. In a June 7, 2016 article in the Huffington Post titled 
``The Koch Brothers Are Trying to Handpick Government Officials. We 
Have to Stop Them,'' Senators Warren, Schumer, and Whitehouse put 
forward allegations, that have subsequently been shown to be false, 
against a Republican nominee for a Social Security Trustee position and 
a Republican nominee to a seat on the SEC. The authors identified that 
the two nominees had worked at a think tank that received financial 
support from the ``Koch brothers.'' The nominees, and officials at the 
think tank identified that their research was not guided or constrained 
by any institutional donors, though the authors seemed unconvinced, 
calling directly into question the integrity of the nominees.

    Given the sensitivity of some to institutional funding, especially 
if funding is provided to institutions that include conservative 
scholars, and given that the Charles Koch Foundation provided 
substantial funding to the Brookings Institution when you worked there, 
as did many ``wealthy corporations'' and billionaires:

    Should there be concern that you, in your position as Treasury 
Secretary, if confirmed, will, as the authors of the article referenced 
above warn, ``serve the wishes of wealthy corporations and their 
billionaire owners''?

    Should concerns about think-tank funders be limited to think tanks 
that allow scholars to pursue conservative thoughts?

    Should there be a double standard with respect to who is and who is 
not suspected of being influenced by corporations and ``billionaires'' 
depending on their political positions?

    Dr. Yellen did not respond to second and third questions above. 
Please provide direct and substantive responses to those questions.

    Answer. I am not directly familiar with the circumstances under 
consideration in this question. Therefore, I do not think I am in a 
position to answer concerning the fairness of the relevant critiques. 
As a general matter, I have valued insight and discussion with scholars 
and colleagues that have varied viewpoints from my own.

    I am not directly familiar with the circumstances under 
consideration in this question. Therefore, I do not think I am in a 
position to answer concerning the fairness of the relevant critiques.

    Question. Social Security benefits are said to be ``earned 
benefits,'' in that for every dollar of FICA tax paid in for disability 
or retirement benefits, there is a commensurate benefit that accrues to 
the taxpayer. An old Franklin Roosevelt quote is often invoked to 
reinforce the earned-benefit notion; in 1941, Roosevelt stated that 
``We put those payroll contributions there so as to give the 
contributors a legal, moral, and political right to collect their 
pensions and their unemployment benefits. With those taxes in there, no 
damn politician can ever scrap my social security program.'' To some, 
it is important that Social Security programs remain as ones that can 
be characterized as earned benefits, meaning, again, that there is a 
benefit commensurate with every unit of tax paid in. Otherwise, some 
fear, dependence of Social Security benefits on partial general-fund 
revenue, or revenue cloaked as Trust Fund revenue but accruing to the 
Trust Funds as tax payments that do not carry any associated benefit 
accrual, would lead to Social Security being characterized as some sort 
of ``welfare,'' and benefits being thought of as mere transfers to 
which recipients do not necessarily have legal, moral, or political 
``rights.''

    What, to you, is meant by ``earned benefit'' in the context of 
Social Security benefits?

    Do you believe it is important to maintain a link between a benefit 
and a tax, such that for every unit of Social Security taxes paid in, 
there is a commensurate claim to a pecuniary benefit?

    Dr. Yellen's response to the first question does not respond, in 
that it does not identify with any sense of precision what an ``earned 
benefit'' means to her in the context of Social Security benefits. 
Please provide a direct and substantive response to the question.

    Answer. I support a benefit formula which is based on contributions 
but which also acknowledges the gains from a progressive schedule. 
Social Security's progressive benefit formula is offset, in part, by 
the regressive payroll tax cap. This longstanding balance between 
linking benefits to contributions, while also maintaining a progressive 
benefit formula, is one of the many successes of the program.

    Question. The so-called HEROES Act (H.R. 6800), which passed in the 
House of Representatives in May 2020, directs the Federal Reserve, in 
section 110801, in unusual and exigent circumstances, to purchase 
obligations issued by any State, county, district, political 
subdivision, municipality, or entity that is a combination of any of 
the several States, the District of Columbia, or any of the territories 
and possessions of the U.S. Such purchases would occur within proposed 
modifications to the Municipal Liquidity Facility that was established 
under section 13(3) of the Federal Reserve Act, and the modifications 
would have to be made to, among other things, ``ensure that any 
purchases made are at an interest rate equal to the discount window 
primary credit interest rate . . . commonly referred to as . . . the 
`Federal funds rate' ''; and, to ``ensure that an eligible issuer does 
not need to attest to an inability to secure credit elsewhere.'' Given 
that the Federal funds rate is near zero, section 110801 in effect 
requires that the Federal Reserve make near-zero interest rate loans to 
States, municipalities, and the like, independent of whether those 
jurisdictions are able to secure credit elsewhere--something that turns 
the Federal Reserve into an agency providing assistance that is close 
to grant making.

    Do you support the policies called for in section 110801?

    More generally, do you support requiring that the Federal Reserve 
make loans to potentially non-creditworthy borrowers at the Federal 
funds rate?

    More generally, do you support allowing the Federal Reserve to make 
grants to private or governmental entities?

    Dr. Yellen's response is, at best, tangential to the specifics 
asked in the questions above. Please provide direct and substantive 
responses to the questions asked above.

    Answer. I have not fully studied the specific language or the 
policy implications of the text contained in section 110801 of H.R. 
6800.

    Without specific context for the economic circumstances and the 
underlying position of the borrower, it would be inappropriate for me 
to suggest whether lending by the Federal Reserve would be appropriate 
or not.

    The Federal Reserve's ability to extend assistance to private or 
government entities and the terms of such assistance is bound by the 
Fed's legal authority as provided by Congress, and the authorities laid 
out in the law will be the basis for whether providing such support is 
allowed.

    Question. You seem to oppose rule-based monetary policy, and 
instead prefer discretion. Do you symmetrically not support rules-based 
economic stabilizers, such as unemployment insurance tied formulaically 
to economic measures, and instead prefer fiscal-policy discretion that 
is consistent with a continuing role for Congress and representative 
democracy?

    Dr. Yellen's response provides her policy preferences, but does not 
provide a direct and substantive response to the question posed above. 
Please provide a direct and substantive response to those questions.

    Answer. I support both automatic stabilizers and discretionary 
fiscal policy. Automatic stabilizers help to ensure that assistance is 
provided as long as it is needed and is phased out when it is no longer 
required, improving the predictability of policy. But there is also an 
important discretionary role for Congress to provide fiscal support 
suited to unique circumstances, such as those currently resulting from 
the pandemic. I believe there are circumstances when automatic 
stabilizers are not only appropriate, but can be expanded and improved 
(including an examination of the proper role of tying stabilizers to 
economic trends), but discretionary fiscal policy can--and should--play 
a critical role in any relief effort as well. With respect to monetary 
policy, I believe that both rules and discretion play valuable roles. 
The Federal Open Market Committee regularly examines the prescriptions 
of a variety of monetary policy rules. And it has publicized those 
recommendations in its Monetary Policy Report to Congress. 
Nevertheless, the committee retains discretion needed to respond as 
deemed appropriate to the often unique circumstances prevailing at a 
particular time.

    Question. The incoming administration desires to reset the Federal 
minimum wage to $15, despite warnings from the Congressional Budget 
Office that such a move could cost upwards of 3.7 million workers a 
job. Of course, given variations in the cost of living across the 
country, $15 for a worker in, say, New York City or Berkeley, CA, is 
far different than for a worker in, say, West Virginia. And paying $15 
an hour as an employer in Iowa is different, in terms of production 
costs, than in States with higher overall living costs. A $15 minimum 
hourly wage is only a bit below the May 2019 median hourly wage for all 
occupations for West Virginia.

    Do you agree with the 2019 analysis from the Congressional Budget 
Office that increasing the minimum wage, depending on how the increase 
is implemented, will result in 1.3 million workers becoming jobless, 
and there is a two-thirds chance that the change in employment could be 
a decrease of up to 3.7 million workers?

    Do you believe that many low-wage workers will become displaced by 
technology if a $15 minimum wage is enacted?

    Do you believe there are negative employment effects of increasing 
the minimum wage at both the extensive and the intensive margin?

    What economic literature do you rely on to make your assessments 
regarding effects of an increase in the minimum wage to $15, which is 
well outside the size of an increase that could be comfortably thought 
of as being within the relevant range of applicability of existing 
studies?

    Would you support implementation of indexation such that an 
increase in the Federal minimum wage to $x per hour is implemented, but 
with $x per hour applying to any States with price levels equal to the 
national median and the minimum wage in other States or municipalities 
indexed to State or municipal living costs using the Bureau of Economic 
Analysis's Regional Price Parities (RPPs) measure?

    Dr. Yellen did not directly and substantively respond to the 
questions above. Please provide direct responses to those questions.

    Answer. President Biden has proposed raising the minimum wage to 
$15 as part of his American Rescue Plan. Doing so would benefit 
millions of workers--including many essential workers--who have 
struggled disproportionately during this K-shaped recovery. As a result 
of a minimum wage that has not been increased in 12 years, the 
inflation-adjusted minimum wage has fallen by nearly one-fifth. Raising 
the minimum wage to $15 would boost consumer spending power by low-wage 
workers, raise retention rates, and boost productivity--all of which 
would benefit workers and the economy at large. Moreover, the 
President's proposed agenda takes into account the interests of small 
business owners and pairs the minimum wage increase with immediate 
relief to small businesses as part of the crisis rescue package, as 
well as additional measures he will propose to build a stronger economy 
over the longer run.

    I believe that the President's plan to pass a $15 minimum wage 
would benefit both low-wage workers and the economy at large. Past 
increases in minimum wage levels, at both the Federal and State level, 
have not resulted in sizable displacements from technology.

    As I stated in my testimony, there is a robust economics literature 
on the minimum wage, and my reading of the findings of much of this 
literature is that the likely impact on employment is minimal, 
including at both the extensive and intensive margin.

    I believe that it is important that all policy choices, including 
the minimum wage, consider any and all costs and benefits. The minimum 
wage has been carefully studied over many decades and the findings show 
that historically the benefits from raising the minimum wage have been 
far larger than any costs. Indeed, a number of well-regarded studies 
that I am familiar with, including a series of studies by economists 
Arin Dube and Michael Reich, have found no materially negative effects 
on unemployment.

    President Biden has proposed a $15 Nation-wide minimum wage, and I 
believe that approach would greatly benefit struggling workers and 
strengthen the economy.

    Question. Recent reports indicate that unemployment insurance fraud 
in California alone may total $8 to $10 billion. Fraud takes resources 
away from those to whom the Federal Government intends to help and 
places them in the hands of undeserving fraudsters, some of whom seem 
to recently have been parts of organized crime rings, perhaps with 
international scope. I've already asked the Department of Labor to 
investigate California's unemployment insurance system, since the 
Governor of the State does not seem very interested in being serious 
about reining in fraud. And, in the relief package that was enacted 
just a few weeks ago, I argued for strengthened anti-fraud protections, 
while Democrats did not want many--if any--protections, partly based on 
a notion that fraud detection could involve use of racial- or income-
biased risk-based fraud-detection systems.

    Do you believe, with billions of dollars of fraud in the 
unemployment insurance system, additional fraud detection is important?

    Do you believe that it is possible to enact legislation calling for 
systems of risk-based fraud detection without the result being use of 
systems or algorithms that have racial- or income-based biases?

    Dr. Yellen did not provide a direct response to second question 
above. Please provide a direct and substantive response.

    Answer. I have not had the opportunity to explore the impacts of 
risk-based fraud detection systems and whether they create racial- or 
income-based inequities. Although the Unemployment Insurance system is 
administered by the Department of Labor, I would be happy to further 
discuss the broader issue with you, if confirmed.

    Question. Given what I expect will be proper efforts on your part 
to examine diversity at the Treasury Department, your views on 
diversity will impact your decision making. With respect to a recent 
lawsuit alleging that Harvard University's admissions processes 
discriminate against Asians:

    Why did you join an amicus brief to seemingly reinforce your view 
that statistical procedures and arguments used by your Berkeley 
colleague Professor David Card were more carefully executed than 
procedures and arguments used by the opposing side?

    Do you believe, given arguments and analyses that you have seen 
related to the case, that Harvard admissions do not discriminate 
against Asians?

    Using data from a lawsuit against Harvard, an April 2020 National 
Bureau of Economic Research paper (Working Pater 27068) by Arcidiacono, 
Kinsler, and Ransom identifies that they ``show that there is a 
substantial penalty against Asian Americans in admissions with limited 
scope for omitted variables to overturn the results.'' Do you find the 
results of that paper to be relevant to your views expressed in the 
amicus brief that you joined, and do the results weigh on your views of 
whether or not Harvard has discriminated against Asians through its 
admissions processes?

    Dr. Yellen did not respond to the last question above. Please 
provide a direct and substantive response.

    Answer. I signed the amicus brief because I was persuaded by the 
argument that Professor Card made and the strength of his empirical 
work.

    I have a long record throughout my career of drawing attention to 
issues of income inequality and racial equity, including my efforts as 
Chair of the Federal Reserve, and the work that I've continued to do 
since, to draw attention to the need to diversify the field of 
economics. I am committed to leveraging the full powers and authorities 
of the Treasury Department to address issues of inequality as well as 
diversity, equity and inclusion.

                                 ______
                                 
                 Questions Submitted by Hon. Mike Crapo
                                 taxes
    Question. A number of countries have imposed or plan to impose 
discriminatory digital services taxes (DSTs) that unfairly target U.S. 
companies. The Finance Committee has expressed bipartisan opposition to 
unilateral measures like DSTs, and advocated for countries to reach a 
multilateral agreement at the Organisation for Economic Co-operation 
and Development (OECD).

    Will you continue to negotiate toward a multilateral agreement at 
the OECD that does not unfairly target U.S. companies and compromise 
the U.S. tax base?

    Answer. Yes, we are committed to the cooperative multilateral 
effort to address base erosion and profit shifting through the OECD/G20 
process, and to working to resolve the digital taxation disputes in 
that context.

    Question. House and Senate Democrats have proposed lifting the 
limitation on the deduction for State and local taxes (SALT). Given the 
effect of the pandemic on our country and economy, Congress has passed 
significant relief bills that focus on unemployed Americans and smaller 
businesses that are struggling. The proposal to lift the SALT cap, on 
the other hand, would overwhelmingly benefit wealthy households. 
According to the Joint Committee on Taxation, over half the benefit 
from repealing the cap would go to taxpayers with incomes over $1 
million, and 94 percent of the benefit would go to taxpayers with 
incomes over $200,000.

    What is your view of lifting the SALT cap, and do you think now is 
the time for a tax break on high-income individuals and households?

    Answer. As I noted at the hearing, I certainly believe in a fair 
and progressive tax code where wealthy individuals and corporations pay 
their fair share. On this issue, as with many others, it is important 
to consider the entire equation. For example, it is critical to study 
and evaluate what the impact of the SALT cap has had on State on local 
governments, and those who rely upon their services. I will work with 
those at Treasury and throughout the administration in evaluating those 
impacts, as well as other aspects of this issue.

    Question. One area of bipartisan agreement is on the issue of 
retirement savings. Congress passed the SECURE Act in 2019. With my 
support, many of my colleagues in both houses and on both sides of the 
aisle are working to develop further legislation to promote retirement 
savings, which should be a top priority for the Finance committee.

    As Congress considers additional legislation, do you commit to 
working with Congress on a bipartisan basis to enact policies that will 
further enhance Americans' ability to save for retirement?

    Answer. President Biden has proposed giving small businesses a tax 
break for starting a retirement plan and giving workers the chance to 
save at work. In addition, under President Biden's plan, almost all 
workers without a pension or 401(k)-type plan will have access to an 
``automatic 401(k),'' which provides the opportunity to easily save for 
retirement at work--putting millions of middle-class families on the 
path to a secure retirement. I look forward to working with Congress to 
improve Americans' retirement security.
                         housing finance reform
    Question. Earlier this month, Treasury and FHFA announced revisions 
to the Preferred Stock Purchase Agreements (PSPAs) for Fannie Mae and 
Freddie Mac.

    What are your views on the content of these changes, and what are 
the conditions under which you would support an exit from 
conservatorship?

    Answer. It is critical that we have a housing finance system that 
works for all Americans, with widely available, affordable mortgage 
credit for home ownership as well as affordable rental housing. We need 
a system that promotes financial stability as a whole, as well as one 
that protects consumers and taxpayers and provides stability to 
households. A core feature of the U.S. housing finance system is the 
30-year fixed rate mortgage. I look forward to working across the 
administration and with the Congress in support of these goals, if 
confirmed.
              non-proprietary machine-readable data (fsoc)
    Question. Dr. Yellen, I have long advocated for use of non-
proprietary machine-readable data that is fully standardized, 
searchable, and transparent. This data modernization increases 
accountability to citizens and investors, and improves the government's 
ability to monitor and enforce compliance processes.

    In your role as Secretary of the Treasury and as the Chair of FSOC, 
will you encourage Federal agencies to use non-proprietary machine-
readable data formats that are easily downloadable?

    Answer. I am aware that this topic has been of high interest to you 
and your staff for many years, and I appreciate your focus on the 
issue. If confirmed, I will work with FSOC member agencies as well as 
the Office of Financial Research to review existing standards and 
practices to ensure that the Federal Government is able to make the 
most informed and transparent policy decisions possible.
                  climate change and bank disclosures
    Question. You have noted several times that you intend to make 
fighting climate change a priority as Treasury Secretary. Why do you 
think financial regulation is a more appropriate avenue to curb climate 
change rather than other agencies uniquely focused on agriculture and 
the environment?

    What kind of financial regulation are you looking at (financial 
disclosure, FSOC requirements, or something that impacts capital)?

    Answer. Climate change is an existential threat not only to our 
environment, but to our economy. Combating climate change will require 
leadership and action from various agencies, including Treasury. 
Structuring the right rules in the financial marketplace will ensure 
that institutions and their leaders are planning for the risk presented 
by climate change, protecting both the environment and the economy from 
crisis.
                         fair access to banking
    Question. First, and as you are fully aware, I am a strong opponent 
of Operation Chokepoint. During Chokepoint, we saw several politically 
disfavored industries, such as firearms and oil and gas, become 
essentially unbanked during this time, and in fact, it is still 
occurring today due to political pressure. I note all of this because I 
strongly support the OCC's fair access rule and believe that legal 
industries should be banked.

    How will you ensure that all federally legal industries have fair 
access to banks, even with the political pressure that they face?

    Answer. If confirmed, I plan to direct a review of all recently 
released rules and regulations. However, the fair access rule was 
promulgated by the OCC, which is an independent banking regulator.
                insurance capital standard transparency
    Question. The International Association of Insurance Supervisors 
(IAIS) continues its work to develop the global risk-based Insurance 
Capital Standard (ICS), which is intended to serve as a common language 
for supervisory discussions of group solvency and minimum Prescribed 
Capital Requirement (``PCR'') for Internationally Active Insurance 
Groups. The ICS is an effort to define comparable standards and 
determine solvency levels for Internationally Active Insurance Groups 
(IAIGs). However, there is concern that the ICS does not fit U.S. 
markets and is incompatible with the State-based regulation of 
insurance in the U.S.

    Treasury, the Federal Reserve Board (Fed), and the National 
Association of Insurance Commissioners (NAIC) have expressed these 
concerns about the ICS, and Team USA has also diligently been working 
on an alternative--the Aggregation Method--to meet the stated 
objectives of the IAIS in a less disruptive and costly manner. 
Furthermore, the Economic Growth, Regulatory Relief and Consumer 
Protection Act (EGRRCPA) also requires that the Treasury, Fed and FIO 
to study and report on the impact on consumers and markets in the U.S. 
before supporting or consenting to the adoption of any final 
international insurance capital standard.

    Will you commit to engaging with the FSB and IAIS so the 
Aggregation Method, the preferred approach of U.S. supervisors for 
measuring group-capital, is deemed to be outcome equivalent to the ICS?

    Answer. As with many questions of financial regulation, 
coordinating with our allies and with international bodies like the 
Financial Stability Board is essential to achieving regulatory outcomes 
that serve American interests and protect financial stability. And it 
is critical that international regulatory standards be designed to 
serve different markets with diverse structures and needs. Insurance is 
no different. I am committed to engaging with international bodies like 
FSB and IAIS to achieve regulatory outcomes consistent with the 
interests of American market participants and State-based regulators, 
and I will continue the Federal Insurance Office's efforts to study the 
effects of ICS on U.S. insurance markets, if confirmed.
                                  debt
    Question. For the last 3 years, you served on the Board of 
Directors of the Committee for a Responsible Federal Budget (CRFB). In 
its estimate of all of the Biden campaign proposals, the CRFB projects 
that even if all of the trillions of dollars in proposed Biden tax 
increases were enacted, the Biden plan would still increase deficits by 
$5.6 trillion over the next 10 years, under their central estimate.

    How sustainable is the current path of the U.S. debt and associated 
deficits, and what steps can you take to put the U.S. on more stable 
fiscal footing in the long term?

    Answer. In the current environment, the most pressing challenge is 
to overcome the pandemic and rebuild our economy. That will require 
additional relief, as proposed by President Biden. If confirmed, I 
would look forward to working with the Congress to secure that relief. 
Presently, interest rates are at historically low levels, and our 
interest burden as a percentage of GDP is also quite low. Therefore, in 
the current environment, it makes sense to invest in the relief needed 
to support families and businesses. Over the longer term, as I have 
often stated, we need to ensure that our country is on a sustainable 
path with respect to our debt burden. I look forward to working with 
Congress on these important issues, if confirmed.
              financial stability oversight council (fsoc)
    Question. You have mentioned that you supported the de-designations 
of some institutions previously designated by FSOC. You also mentioned 
that you agree it is important to regulate activities that heighten 
systemic risk, and that it in many cases that approach makes more sense 
than regulating individual firms. However, you have also said that 
individual firms also pose systemic risks and it is important to 
supervise and regulate them. Under the Trump administration, the FSOC 
has been meaningfully reoriented toward activities-based designation.

    Do you agree with the guidance issued by FSOC on activities-based 
designations, and exhausting all available remedies to financial risks 
prior to considering entity-based designation?

    Answer. As you know, the idea behind FSOC is to coordinate among 
regulators so that significant risks to our economy do not go 
unaddressed because they do not fall wholly into the purview of one 
regulator's jurisdiction. My view is that the FSOC should address risks 
whatever their origin. But our focus must remain on stability in our 
financial system and ensuring that we are prepared to mitigate market 
disruption in times of stress.

    I understand that the legal landscape has shifted somewhat since 
the Obama administration, but I believe the FSOC should have the tools 
to protect our economy from systemic threats, whether they're presented 
by a single firm or risky actions by an array of firms.

    However, designation was never meant to be a one-way street--the 
procedures required an annual review, and firms should continually be 
evaluated and are certainly able to adjust their business models to be 
less risky in an effort to be de-designated.
                   national security policy concerns
    Question. If confirmed, you will be the first Treasury Secretary to 
enter your term as a statutory member of the President's National 
Security Council, thus, ensuring that the economic and financial 
dimensions of national security are as carefully considered as more 
traditional military, intelligence and diplomatic concerns. The list of 
national security concerns that you will face as Secretary on Day One 
is long and growing, and includes the enforcement of U.S. sanctions 
against Iran, Russia, North Korea, Venezuela and companies in China 
linked to its military; and, too, investment decisions before the 
committee on Foreign Investment in the United States (CFIUS). From 
among these national security concerns, I have a number of questions.

    Foremost, then, will you commit to holding bad actors accountable, 
to dismantle the financial networks of terrorist organizations and 
others who seek to perpetrate harm against the United States and to 
ensure that U.S. foreign investment protects the national security 
interests of the United States?

    How should the United States persuade other nations to follow our 
lead when it comes to sanctions against various targets, whether it be 
Iran, North Korea or terrorist groups?

    What is your view of the Joint Comprehensive Plan of Action 
(JCPOA), the sanctions relief it provided Iran, and the continued 
enforcement of US sanctions mandated by law?

    Will you use the voice of the United States to oppose IMF and World 
Bank loans to Iran and other State sponsors of terror?

    China has long been one of the biggest violators of U.S. sanctions. 
If confirmed, how would you go about seeking better cooperation from 
China on sanction matters?

    Finally, how should the United States persuade other nations to 
follow our lead when it comes to sanctions against various targets, 
whether it be Iran, North Korea or terrorist groups?

    Answer. I commit to using Treasury's sanctions and enforcement 
authorities to identify and dismantle the financial networks of 
terrorists, proliferators, and others who seek to perpetrate harm 
against the United States. I furthermore commit to overseeing a 
rigorous review of foreign investments in the United States through the 
CFIUS process. This vital work to our national security is something we 
will do both independently and in coordination with partners abroad, 
through regular and formalized dialogue, information sharing, and joint 
actions. If such coordination does not succeed, the Treasury Department 
should be prepared to strongly urge other nations to join us in 
targeting dangerous terrorists and proliferators, and expose their 
complicity if necessary. When it comes to our competitor China, we must 
ensure that it is not allowed to violate our sanctions.

    With regard to the JCPOA, The Biden-Harris administration is 
committed to ensuring that Iran takes the appropriate steps to resume 
compliance. Iran will only enjoy sanctions relief under the JCPOA if it 
complies with its nuclear constraints. Furthermore, if confirmed, I 
will ensure that Treasury continues its important work to combat Iran's 
support for terrorism and abuse of human rights.

    When it comes to the IMF and World Bank, we must make sure that 
they are doing what they can to ensure developing countries have the 
resources for public health and economic recovery, and will evaluate 
how investment policies support global security and recovery working 
with our allies. The Biden-Harris administration will continue to 
maintain and impose sanctions on Iranian entities perpetrating human 
rights abuses, and evaluate tools to combat State sponsors of terror. 
In particular, President Biden is committed to working with our allies 
and partners to counter Iran's destabilizing activities in the region, 
including its support for violent proxies.
                      supporting middle east peace
    Question. The Treasury Department has played a key role supporting 
the historic peace agreements reached in 2020 between Israel, the UAE, 
Bahrain, Sudan, and Morocco. If confirmed, will you continue Treasury's 
work to support these agreements and expand business opportunities 
between these countries and the United States?

    Answer. The Biden-Harris administration has expressed support for 
the Abraham Accords, and I also support these historic agreements. I 
will work with others in the administration to foster economic 
cooperation between and among these countries, and with the United 
States.
                      opposing boycotts of israel
    Question. For more than 40 years, the Treasury Department has 
played a key role in fighting international efforts to boycott Israel. 
If confirmed, are you committed to fighting efforts to boycott, divest 
or sanction our ally Israel?

    Answer. President Biden has led efforts to oppose the 
delegitimization of Israel, whether in international organizations or 
by the boycott, divestment and sanctions (BDS) movement in the United 
States. I support President Biden's approach of opposing such efforts 
and if confirmed, will work as Treasury Secretary to oppose BDS 
activities directed at Israel.

                                 ______
                                 
                Questions Submitted by Hon. John Cornyn
         tax increases and repealing the tax cuts and jobs act
    Question. The Tax Cuts and Jobs Act provided tax relief to 
taxpayers by lowering individual rates and expanding the child tax 
credit. It also helped to create a more competitive tax system for U.S. 
companies in today's global market, helping to create jobs and lowering 
the unemployment rate to a level not seen in 50 years prior to the 
COVID-19 pandemic. I know many of my Democratic friends are very 
critical of this law and have called for its immediate repeal, although 
the House of Representative did not send the Senate a repeal bill last 
Congress. I also understand that the incoming administration is 
proposing over $3 trillion in higher taxes.

    In 2009, as the Nation was fighting to recover from the 2008 
recession, President Obama was asked about the possibility of raising 
taxes. He did not mince words. He said, ``The last thing you want to do 
is to raise taxes in the middle of a recession.''

    I am concerned about the pledge made by President Biden that he 
intends to repeal the Tax Cuts and Jobs Act ``on Day One.'' Is the 
administration still advocating that Congress do so even as the country 
continues to recover from the COVID-19 pandemic?

    It is imperative that this Congress and the administration do 
nothing to hamper a robust recovery. I am hoping that you agree that 
this is exactly the wrong time for Congress to be raising taxes. 
Placing unnecessary burden on most businesses during an economic 
recession will only serve to increase the cost of capital and hamper 
their ability to make the investments necessary to facilitate job and 
wage growth. Given the current economic conditions, do you think now is 
an appropriate time to raise taxes on the American people?

    Answer. With tax revenues at historical lows, ensuring that wealthy 
individuals and corporations pay their fair share should be considered 
part of any plan to put our country on a path to fiscal sustainability. 
President Biden has stated that he will not ask families making under 
$400,000 per year to pay more in taxes, and will enact more than one-
dozen middle-class tax cuts that will finally give working families the 
financial support they deserve.

    When it comes to the timing of the various fiscal policies enacted 
as part of the relief and recovery effort, the most critical elements 
are to deliver necessary services and economic relief, including 
vaccine distribution, additional aid to small business, and expanded 
unemployment insurance. This principle is reflected in the President's 
proposed COVID relief package.
                    u.s. debt and entitlement reform
    Question. We have passed almost $3.5 trillion in response to the 
COVID-19 pandemic; this includes a $900-billion bill signed into law 
less than a month ago. Now, the incoming administration is proposing 
another $1.9 trillion. If enacted, the total amount enacted in less 
than a year will almost total $5.5 trillion, which is larger than 
Japan's economy and is almost 25 percent of our GDP. This is an 
astonishing amount of money. It would also be more than what the 
Federal Government spent on everything--including defense, Social 
Security, Medicare, transportation--in 2019. We know this rate of 
spending is not sustainable. The Committee for a Responsible Federal 
Budget is already estimating that the budget deficit is set to exceed 
$2.3 trillion this fiscal year, the second-highest since World War II.

    The future appears to be bleak. The Congressional Budget Office 
estimates that the Federal debt held by the public surpasses its 
historical high of 106 percent of GDP in 2023 and continues to climb in 
most years thereafter. For example, by 2050, it will nearly be two and 
a half (2.5) times what it was at the end of 2019. The growth in future 
Federal spending, primarily from entitlements, drives the upward 
projection of the national debt. In fact, CBO forecasts that spending 
will grow from an average of 21.3 percent of GDP from 2010 to 2019 to 
an average of 29.3 percent from 2041 to 2050. And, keep in mind, these 
estimates do not include the recent legislation passed in response to 
the COVID-19 pandemic or any new spending proposals from the incoming 
administration.

    You have raised concerns about the debt almost every year over the 
past decade. You discussed the ``unsustainable'' path of the rising 
national debt as Vice Chair of the Federal Reserve, as Chair of the 
Federal Reserve, and as an economist at the Brookings Institution.

    Do you still have these same concerns? If not, why not?

    What is the incoming administration's plan to control spending and 
reform our entitlement programs?

    What reforms to the congressional budget and appropriations process 
does the incoming administration support?

    Answer. I believe that the current economic crisis calls for robust 
fiscal support, but also believe it is critical that we put our country 
on a path towards long-term fiscal sustainability. In this vein, I've 
called for more fiscal support since the early days of the pandemic and 
continue to do so. Without question, we have to be conscious of our 
debt, but it's clear that fiscal stimulus to support the economy and 
the working families most affected by the impact of COVID-19 is our 
most urgent priority.

    Today's low interest rates also increase the urgency of making 
investments in our people and in our infrastructure that will produce 
returns in the years ahead and leave future generations better off. The 
combination of persistently low rates and the need for investing in our 
people, communities, and environment offers our Nation a unique 
opportunity to make real progress in areas that have been neglected for 
too long.

    There are long-term budget challenges. We are committed to 
implementing responsible policies that grow the economy, ask high-
income Americans and corporations to pay their fair share, and give our 
country even more capacity to face the challenges ahead.

    These policies will help drive down the debt relative to the size 
of the economy. As part of this effort, the administration will 
consider and seek reforms to the budget and appropriations process that 
can help aid the effort to achieve fiscal sustainability.
                     financial institution lending
    Question. Federal financial policy issues cross over several 
Federal agencies, including the Treasury Department, the Securities and 
Exchange Commission, the Office of the Comptroller of the Currency, and 
the Federal Reserve. On this note, I applaud the Office of the 
Comptroller of the Currency for recently issuing a rule that would 
prohibit financial institutions from refusing to lend or provide other 
services to entire categories of lawful businesses. I think we can 
agree that that a borrower's credit characteristics should determine if 
they get a loan.

    I am concerned about media reports that the new administration 
supports policies that would restrict capital investments in America's 
energy sector. These restrictions will reverse the progress we have 
made. We know that things like horizontal drilling and fracking have 
transformed the global energy market, and America is no longer hostage 
to foreign oil. Now it is one thing to allow market forces to change 
the Nation's energy mix, it is an entirely different matter to 
blacklist entire industries from accessing the capital markets.

    Can you tell me if the incoming administration is considering 
policies that will limit access to capital for specific industries?

    If so, what role will the Treasury Department play in limiting 
capital for American oil and natural gas development?

    How will Treasury interact with the other Federal agencies, 
including the Federal Reserve on this effort?

    Answer. If confirmed, I believe our near-term focus from a policy 
perspective should be on COVID relief and economic recovery. It is the 
responsibility of the Treasury Secretary to strengthen the U.S. 
economy, foster widespread economic prosperity, and promote an economic 
agenda that leads to long-run economic growth. Meeting that challenge 
undoubtedly requires focus on the current economy, but also requires a 
commitment to the building blocks of enduring prosperity.

    The Treasury Department has a wide range of responsibilities to 
fulfill these commitments, including monitoring and overseeing various 
financial markets, administering our Nation's fiscal policies, engaging 
in international economic negotiations, and ensuring the stability of a 
wide range of factors related to the health of the U.S. economy.

    In addition, you raise important questions about rulemaking by the 
independent Federal financial regulatory agencies. If confirmed, I look 
forward to working with the Congress on these important issues.
               eliminating the cap on the salt deduction 
                 and benefits to high-income taxpayers
    Question. The Tax Cuts and Jobs Act imposed a $10,000 cap on the 
amount individuals can deduct for State and local taxes, also known as 
the SALT deduction. The Tax Policy Center estimates that 57 percent of 
the benefit of repealing the SALT cap would go to the richest one 
percent of taxpayers. In addition, the Joint Committee of Taxation 
estimates that if the cap were removed, over half of the dollar value 
of the benefit would flow to households making over $1 million. Last 
Congress, the House of Representatives passed the HEROES Act, which 
would roll back the SALT cap. Supporters of the HEROES Act argued its 
passage was necessary to help the Nation respond to the COVID-19 
pandemic.

    Do you agree with the analysis that eliminating the SALT cap 
created by the Tax Cuts and Jobs Act would provide a disproportionate 
direct benefit to upper-income taxpayers?

    Do you think repealing the SALT cap is an effective policy response 
to the current COVID-19 pandemic?

    Answer. As I noted at the hearing, I certainly believe in a fair 
and progressive tax code where wealthy individuals and corporations pay 
their fair share. On this issue, as with many others, it is important 
to consider the entire equation. For example, it is critical to study 
and evaluate what the impact of the SALT cap has had on State on local 
governments, and those who rely upon their services. I will work with 
those at Treasury and throughout the administration in evaluating those 
impacts, as well as other aspects of this issue.
            u.s. corporate tax rate and u.s. competitiveness
    Question. The Tax Cuts and Jobs Act helped make American workers 
more competitive in today's global marketplace. One way it did this was 
by reducing the corporate tax rate, which was at the time one of the 
highest of those countries who are in the Organisation for Economic Co-
operation and Development or ``OECD.'' Many analysts argue that our 
high corporate tax rate led many U.S.-based companies to relocate their 
headquarters to foreign countries through so-called ``corporate 
inversions.'' Now there are instances where companies are coming back 
to the United States.

    In your view, is it essential that the U.S. retain a combined, 
including State and Federal, corporate tax rate that allows it to stay 
competitive with its developed country peers?

    Answer. I believe it is necessary for U.S. companies to be globally 
competitive, and, if confirmed, would work through the OECD/G20 process 
to agree with our allies on a global tax regime that protects American 
competitiveness while ensuring corporations pay their fair share.

    Question. Do you believe cost recovery provisions are essential for 
businesses to reinvest and that all economic sectors should be given 
access to these provisions?

    Answer. I believe that businesses should be able to recover their 
costs so that the income tax taxes net income and not gross receipts. 
The timing of when businesses should receive such deductions is a 
complicated question, on which I look forward to working with you and 
the Treasury staff.
                  government-imposed minimum wage rate
    Question. The incoming administration's $1.9 trillion package calls 
for an increase in the Federal minimum wage to $15 per hour. In 2014, 
former President Obama wanted to raise the minimum wage to $10.10 per 
hour. At the time, the Congressional Budget Office (CBO) estimated that 
this would lead to about 500,000 Americans losing their jobs. As Chair 
of the Federal Reserve, you were asked before the Senate Banking 
Committee about the CBO analysis and you replied, in part, that ``there 
would be some amount of negative impact on employment'' and that you 
would not argue with the CBO assessment. Just last month, CBO again 
confirmed that increasing the Federal minimum wage would cause some 
American workers to lose their jobs and their family income to fall in 
some cases below the poverty threshold.

    Do you still agree with CBO's assessment that increasing the 
Federal minimum wage will lead to some Americans losing their jobs?

    As you know, industries that traditionally pay minimum wage are 
many of those that have been negatively impacted by the COVID-19 
pandemic; this especially includes restaurants and small businesses. 
Given CBO's assessment that increasing the minimum wage means job 
losses for American workers, how does increasing the Federal minimum 
wage help the Nation recover from the COVID-19 pandemic?

    Answer. It is the responsibility of the Treasury Secretary to 
strengthen the U.S. economy, foster widespread economic prosperity, and 
promote an economic agenda that leads to long-run economic growth. 
Meeting that challenge undoubtedly requires focus on the current 
economy, but also requires a commitment to the building blocks of 
enduring prosperity. A living wage is one of those building blocks. 
Raising the wages for the lowest paid workers in America can unlock 
billions of dollars of consumer spending that can be used to fuel 
demand for the essential goods and services that small businesses 
provide. This is especially true for the workers who put their lives on 
the line each and every day to provide essential goods and services to 
our communities.
  committee on foreign investment in the united states (cfius) reform
    Question. When we met virtually last month, we discussed how China 
seeks to acquire cutting-edge U.S. technology by any means necessary, 
including buying it, licensing it, or even stealing it through hacking 
or more traditional methods. I consider this a serious national 
security issue. Within the U.S. Government, the interagency body that 
is responsible for reviewing those types of transactions and 
determining their national security implications is known as the 
Committee on Foreign Investment in the United States, or as ``CFIUS.'' 
The Treasury Secretary chairs this committee.

    In 2018, Congress passed legislation I authored called the 
``Foreign Investment Risk Review Modernization Act.'' This legislation 
reformed and modernized the CFIUS process and the outgoing 
administration worked to implement this legislation.

    Can I ask for your commitment that, if you are confirmed as 
Treasury Secretary, you will work to make sure that these reforms 
continue to be implemented and that Treasury will work hand-in-hand 
with all the other relevant agencies who serve on CFIUS?

    I am also working on additional legislative proposals that build 
upon these reforms. Would you be willing to work with me in developing 
ways to further strengthen the CFIUS process?

    On July 10, 2020, I sent a letter to the Treasury Department 
requesting a classified briefing on the status of CFIUS's review of a 
wind farm project located near Laughlin Air Force Base in Val Verde 
County, Texas. To date, I have not received that briefing. Will you be 
willing to provide this briefing and update me on the status of this 
review?

    Answer. If confirmed, I will be fully committed to implementing the 
reforms to CFIUS passed in the Foreign Investment Risk Review 
Modernization Act. I plan to work closely with all CFIUS members to 
execute the committee's mandate and look forward to working with you on 
ways to strengthen the CFIUS process, which is so important to our 
national security. If confirmed, I will be happy to follow up with you 
on the question you raised and your request for a briefing.
      general business credits/building business back act of 2020
    Question. The CARES Act and its successor legislation focused on 
providing liquidity to those businesses that bore the burden of 
government action, including lockdowns that crushed economic activity. 
Members on both sides were proud to put in place the Paycheck 
Protection Program (``PPP'') for small businesses that kept workers on 
the payroll. Another example is the employee retention tax credit. 
Congress modified and extended both programs on a bipartisan basis. I 
think we all know that these employment-based incentives saved millions 
of jobs.

    I would like to draw your attention to a gap in the scope of the 
provision of liquidity for recovery. It affects major sectors of the 
economy. I am particularly concerned about that sector of the business 
community that is bigger than that defined for the PPP, but smaller 
than theFortune 100. The CARES Act set out lending facilities, such as 
the Main Street Lending Facility, but unfortunately, those facilities 
did not fill the gap.

    At a recent SEC roundtable held by the Securities and Exchange 
Commission, one participant observed, ``[G]etting credit into the large 
cap companies doesn't necessarily distribute credit to our small and 
medium-sized businesses that they need.'' During the last Congress, I 
introduced the ``Building Business Back Act of 2020'' to fill this gap. 
The proposal would accelerate the benefits of general business credits 
for which the government is already liable to the taxpayer and thus 
would not be new business tax relief. Rather it would simply ensure 
that these tax credits, sitting on company balance sheets, would be 
``monetized'' or converted to the liquidity these companies need today.

    A number of business stakeholders, including the Texas Association 
of Business, who employ millions of Americans, support this concept. In 
a letter to the Senate Finance committee, these organizations noted 
that ``By temporarily giving companies the option to monetize their 
general business credits, Congress can help ensure that the recovery is 
as strong as possible.''

    Question. I would like to work with you on this proposal as the 
Biden administration considers additional recovery proposals. Are you 
willing to commit to do so?

    Answer. If confirmed, I would welcome the opportunity to learn more 
about your legislation and work with you to get the economy back on 
track, particularly for small and mid-sized businesses which are the 
backbone of our economy. The country is currently facing an 
unprecedented pandemic that has exposed economic inequalities rooted in 
our financial system for generations. It is imperative that the 
government does its part to catalyze an economic recovery that is both 
equitable and sustainable.
                            u.s. innovation
    Question. Semiconductors underpin nearly all innovation today 
including military systems, telecommunications, health care, critical 
infrastructure, precision agriculture, and manufacturing. Almost 25 
percent of our economic growth can be attributed to semiconductor 
technology. Semiconductors are the 5th largest U.S. export and 
essential to U.S. economic competitiveness and national security--and 
are a critical supply chain.

    Unfortunately, the U.S. has lost substantial ground in 
manufacturing semiconductors while China is increasing their footprint. 
U.S. production has dropped from 24 percent to 12 percent and by 2030, 
Asia is projected to control 83 percent of the global manufacturing 
supply of semiconductors while domestic production could be less than 
10 percent. According to the Organisation for Economic Co-operation and 
Development (OECD), between 2014 and 2018, other foreign nations 
(including Ireland, Israel, South Korea, and Taiwan) gave more than $50 
billion to semiconductor firms to support construction of fabs in their 
countries, driving this capacity shift.

    The United States must compete with foreign nations and invest in 
advanced manufacturing and packaging capabilities to secure our supply 
chain and build a robust domestic ecosystem to protect our national 
security. For this reason, I worked with my colleague Senator Warner, 
on introducing the CHIPS for America Act last year. We joined our 
efforts with Senators Schumer and Cotton to include this language in 
the NDAA on a floor amendment that passed with 96 Senators supporting- 
these provisions are now law. But more work needs to be done. We were 
not able to include an investment tax credit that is part of the CHIPS 
Act and we need to make sure the CHIPS Act is fully funded in the 
future.

    Question. Given the global competition and incentives other 
countries currently offer, do you think the Federal Government has a 
responsibility to compete with these foreign countries, including 
China, to support reshoring manufacturing capabilities for critical 
industries to ensure supply chain security and create good-paying jobs 
here at home?

    Answer. The Biden administration will engage in a whole-of-
government approach to China that uses our available tools in a manner 
that is designed to achieve our economic, national security, and 
foreign policy goals. U.S. efforts to maintain its technological and 
innovation edge, including in sensitive ``dual-use'' technologies, must 
focus on reshoring critical supply chains. If confirmed, ensuring that 
the United States is able to compete in the global economy will be a 
top priority.
             digital services tax (dst) and u.s. leadership
    Question. It is important we confront countries who put in place 
discriminatory taxes targeting U.S. companies and appropriating revenue 
from the U.S. tax base. Unfortunately, these taxes are expanding to 
cover a wider range of digital services, bringing many new US companies 
into scope, including streaming services, cloud, and financial 
services.

    Recently the U.S. Trade Representative released section 301 reports 
on Austria, Spain, and the UK determining their digital services taxes 
(DSTs) are discriminatory towards U.S. companies, inconsistent with 
prevailing international tax principles, and highly restrictive of U.S. 
commerce and exports. These countries are joined by France, India, 
Italy, and Turkey--which are siphoning billions away from the U.S. tax 
base with similar discriminatory digital taxes.

    Will the administration engage these countries to protect American 
companies and the U.S. tax base from these efforts?

    Answer. I am certainly aware of the concerns U.S. companies have 
raised about digital services taxes. While the details of digital 
services taxes differ across jurisdictions, many have been designed in 
a way that unfairly singles out a few large U.S. digital platform 
companies. I look forward to consulting with the USTR and the Congress 
on these issues.

    Question. What steps will the administration take to challenge 
these taxes from a trade and diplomatic perspective?

    Answer. The administration is committed to a cooperative 
multilateral effort to address base erosion and profit shifting through 
the OECD/G20 process, and to working to resolve the digital taxation 
dispute in that context. I look forward to consulting with the United 
States Trade Representative and the Congress on these issues.

    Question. How do you plan to assert American leadership in the 
discussions on tax reform being held at the Organisation for Economic 
Co-operation and Development (OECD) while protecting the U.S. tax base 
and U.S. industries?

    Answer. At the OECD in particular, the administration will 
vigorously reengage with multilateral efforts to update global tax 
rules in ways that establish minimum taxation, prevent profit-shifting, 
and support a level playing field. More generally, the Biden-Harris 
administration will support multilateralism in international economic 
affairs not only in tax discussions at the OECD but across a range of 
issues, including with respect to bold and creative efforts to use all 
existing instruments at our collective disposal to help stabilize the 
global economy, and to set the foundation for a broad-based, inclusive 
global economic recovery. Recommitting to multilateral leadership writ 
large will also help reassert American economic leadership in 
international tax matters.
                           student loan debt
    Question. Student loan balances in this country have climbed over 
the past decade as the cost of college has significantly outpaced 
inflation--increasing by some estimates 3 percent per year. I 
understand that the incoming administration supports forgiving $10,000 
in student debt per borrower. Others have argued for canceling up to 
$50,000.

    The Committee for a Responsible Federal Budget recently noted that 
nearly two-thirds of the benefit from canceling $50,000 in student debt 
would go to the top 40 percent of households and over three-tenths 
would go to the top quintile.

    How would student loan forgiveness put a downward pressure on 
college costs?

    As may know, there already exist numerous repayment programs for 
individuals with student loan debt, with an average amount of $32,000. 
Why does the Federal Government need to offer further debt forgiveness 
to individuals who have made a personal decision to take out a loan?

    Answer. The rising costs of education and the potential impact that 
student loan debt have on a wide range of social and economic effects, 
ranging from putting home ownership out of reach, to forcing career 
choices, to delaying or eliminating retirement savings. Importantly, 
the burden of student debt disproportionately falls on students of 
color. A growing economic literature has raised serious concerns about 
the burden of student debt for some borrowers and its impact on 
lifelong wealth accumulation. Recent actions on student loan payment 
deferrals reveal that the Federal Government can have a role in 
addressing this problem. If confirmed, I will consult with the 
President and the Secretary of Education to discuss the various options 
and help identify the appropriate actions to alleviate this burden.
                   u.s. dollar in the global economy
    Question. Many economists and investors refer to the U.S. dollar as 
a ``reserve currency'' when referring to its use by other countries 
when settling their international trade accounts. This provides our 
economy with certain, distinct advantages.

    What policies will help the dollar maintain its position as a 
``reserve currency'' in the global economy?

    Answer. There are many important reasons that the U.S. dollar is 
the world's dominant reserve currency. The United States has the 
largest economy and the deepest and most liquid capital markets. Going 
forward, I am committed to maintaining a sound economy and confidence 
in our financial system. The Biden-Harris administration will make 
investments in the American people that will accelerate the U.S. 
economic recovery and lay the foundation for a strong and equitable 
U.S. economy in the years ahead.

    Question. What are your views regarding the value of the dollar 
relative to the major foreign currencies?

    Answer. The value of the U.S. dollar and other currencies should be 
determined by markets. Markets adjust to reflect variations in economic 
performance and generally facilitate adjustments in the global economy.
                             exchange rates
    Question. Through the Omnibus Trade and Competitiveness Act of 1988 
and Trade Facilitation and Trade Enforcement Act of 2015, Congress gave 
explicit authority to the Treasury Secretary to address currency 
undervaluation by U.S. trading partners and identified bilateral 
negotiations as the appropriate recourse in such instances. However, 
recently other parts of the executive branch have been wading into 
these issues. For example, USTR launched an investigation and issued a 
report under section 301 of the Trade Act of 1974 into Vietnam's 
currency valuation practices, and the Commerce Department has begun 
considering currency undervaluation as a countervailing subsidy.

    What are your thoughts on this matter and do you believe these 
actions by other agencies are outside the original intent of the 
existing statutes to address currency undervaluation?

    Answer. The President opposes attempts by foreign countries to 
artificially manipulate currency values to gain unfair advantage over 
American workers. The Biden-Harris administration will be examining how 
Treasury, Commerce and USTR can work together to put effective pressure 
on countries that are intervening in the foreign exchange market to 
gain a trade advantage.

    Question. Will you commit to reviewing the December 2020 report and 
reasserting Treasury's role in leading currency undervaluation issues?

    Answer. It is critical that we address any issue pertaining to 
exchange rates in a coordinated manner. I look forward to working with 
Congress and my colleagues in the administration to address foreign 
exchange intervention to gain an unfair trade advantage.
                                tariffs
    Question. We are currently engaged in a number of trade disputes 
with both allies and adversaries where tariffs have been used as the 
remedy of choice. These tariffs have each resulted in retaliatory 
tariffs against U.S. exporters including manufacturers and agricultural 
interests. Tariffs are taxes that are paid by U.S. businesses, raise 
costs for consumers and manufacturers and have led to markets being 
lost for our agricultural exporters. The current tariffs have had a 
negative impact on companies large and small, especially impacting the 
economic recovery of many U.S. businesses during COVID-19. President 
Biden has talked about the need to reevaluate the trade war and the 
economic impact caused by the tariffs.

    Do you commit to conducting an economic review of the tariffs and 
the impact they have had on the U.S. economy?

    Answer. The Biden administration will work towards a system that 
allows U.S. farmers and workers to compete on a level playing field. If 
confirmed, I am committed to working across the interagency to conduct 
a review of how we can best support American industry and 21st-century 
jobs.

    Question. With the China Phase One deal still underway and with 
built-in mechanisms for bilateral engagement, do you foresee being 
actively engaged in bilateral talks with China as your predecessor was 
?

    Answer. President Biden has said he will review all aspects of the 
Trump administration's trade policies toward China, including how 
completely Beijing has lived up to the terms of the Phase One 
Agreement. We are closely monitoring China's adherence to all of its 
Phase One commitments, including both the purchase commitments and 
structural commitments. President Biden has said that he is not going 
to make any immediate moves on the current China tariffs. As part of 
his review, he is going to consult with allies to galvanize collective 
pressure. We need a different approach that actually brings meaningful 
pressure on China.

    Question. What is your position on keeping the section 301 tariffs 
on China in place?

    Answer. President Biden has said that we will review the tariffs on 
China and consult with our allies and will not be making changes until 
we do both of these things. The Biden administration will make use of 
the full array of tools to counter China's abusive economic practices 
and hold Beijing accountable.
                       foreign trade zones (ftzs)
    Question. Tariff levels are nearing those of the Depression-era in 
the 1930s. At that time, the Smoot-Hawley Tariff Act was a contributing 
factor to those high tariff levels. Today, record tariff levels are a 
result of largely unilateral actions used through delegated authorities 
given to the executive branch in the trade acts of 1962 and 1974. 
Shortly after the Smoot-Hawley Act was enacted, Congress set out to 
explore ways to improve trade flows. One such action was the creation 
of the Foreign Trade Zones (FTZs) Act in 1934. This program has been in 
existence for nearly 90 years, and today's tariff environment deserves 
Congress's attention to improving the program and achieving our 
Nation's trade and economic objectives.

    As Secretary, you will be the executive officer of the FTZ board. I 
intend to examine the FTZ program and explore how its use can be 
beneficial in (1) working together with our partners and allies to 
reinvigorate trade flows; (2) restore critical supply chains; and (3) 
help rebuild our economy in the wake of COVID-19.

    Can you provide your views on the recently reinstated NAFTA-era 
restriction (section 601(b) of title VI of division O of Public Law 
116-260) that prevents products operating in FTZs from receiving 
reduced-tariff benefits under the U.S.-Mexico-
Canada (USMCA) trade agreement?

    Answer. I understand that this provision reinstated a rule from 
NAFTA's implementing legislation, which prevents goods produced in U.S. 
FTZs from receiving preferential treatment even if they meet rules of 
origin requirements. I support efforts to rebuild American 
manufacturing and exports. Foreign trade zones can offer American 
businesses the opportunity to compete on an even playing field with 
foreign companies by reducing tariffs and duties on foreign inputs. It 
is critical that our rules for FTZs ensure American producers receive 
this benefit and are able to compete on even footing with their foreign 
counterparts.

    Question. What is the purpose of this restriction, and do you 
believe that the U.S. has treaty obligations under USMCA (or other 
agreements) to keep this provision in place? If so, can you specify the 
articles under which the USMCA obligations apply for this provision? Is 
the intent of this provision limited to U.S. law?

    Answer. I was not involved in negotiating USCMA or developing this 
legislation, so I cannot speak to the purpose of this restriction or 
whether USMCA negotiators intended it. If confirmed, I will work to 
ensure free trade agreements protect American workers, including FTZ 
provisions.

    Question. How does the FTZ restriction mentioned above effect 
businesses that currently use duty drawback to reclaim duties on 
products produced in the U.S. and subsequently exported outside the 
country?

    Answer. In general, FTZs allow for immediate duty relief once FTZ 
status is achieved, whereas duty drawback requires a wait while the 
claim is processed.

    Question. Do you believe that the FTZ restriction mentioned above 
is unfair to the FTZ equivalents in Canada and Mexico that do not have 
similar restrictions in their domestic laws?

    Answer. We should strive for parity between our treaty implementing 
legislation and that of our treaty partners. I believe we should study 
the extent to which any differences in domestic FTZ treatment put 
American producers at a disadvantage and work to minimize disparities 
going forward.

    Question. What role, if any, do you believe the FTZ program can 
play in creating a controlled and audited environment for providing 
domestic production and manufacturing capacity of critical supply 
chains?

    Answer. I believe that under the right circumstances and with the 
right program design, FTZs can contribute to domestic manufacturing and 
supply chain security by reducing tariffs on foreign inputs used by 
domestic producers, encouraging value-added production by American 
manufacturers. If confirmed, I will seek to use all available trade 
tools to put workers first and restore American competitiveness.
             chinese national offshore oil company (cnooc)
    Question. The Chinese National Offshore Oil Company (CNOOC) was 
added to the section 1237 list of ``Communist Chinese Military 
Companies'' authorized under the 1999 NDAA of which the Treasury's 
Office of Foreign Assets Control (OFAC) was tasked with writing the 
legal and technical guidelines for how this listing may be applied. 
This action, as well as others, such as the addition of CNOOC and other 
Chinese oil companies to the Department of Commerce Entity List have 
potentially significant economic impacts to U.S. companies with 
investments, partnerships, and operations in China as well as 
significant unintended consequences with these actions being taken in 
series and combination.

    Will you commit to responsibly engaging industry stakeholders to 
inform how Treasury related sanctions align with economic impacts?

    How will the Treasury Department under your leadership administer 
effective and targeted sanctions policies that harm their intended 
target, change malign behavior, and protect US economic interests in 
the process?

    Answer. If confirmed, I commit to ensuring that the Treasury 
Department actively engages industry stakeholders on sanctions issues, 
seeking to carefully understand effects on markets, firms, and our 
national and economic security. Furthermore, the Treasury Department 
will conduct a careful review of sanctions to ensure that they are 
targeted, effective, and minimize unintended consequences.

                                 ______
                                 
                 Questions Submitted by Hon. John Thune
    Question. Rural communities across the country are hurting, and in 
many cases this was the reality before the pandemic. Can you comment on 
the administration's plans to help rural America access new capital and 
open markets?

    Answer. I appreciate that many rural communities are struggling, 
and if confirmed, I am committed to working with my administration 
colleagues to address both the immediate economic pain being felt in 
many parts of rural America as well as longer-term challenges. As we 
develop and implement policies to help small businesses access capital, 
I will pay particular attention to ensuring that our approach addresses 
some of the barriers that might be unique to rural areas.

    Question. If confirmed as Treasury Secretary, you would also head 
the Financial Stability Oversight Council (FSOC). Can you comment on 
some of the non-bank financial risks that you would be focusing on in 
your potential position as head of FSOC?

    Answer. As you know, the Financial Stability Oversight Council 
(FSOC) was created by Congress under the Dodd-Frank Wall Street Reform 
and Consumer Protection Act (DFA) following the Financial Crisis that 
brought the U.S. economy and financial system to the brink of collapse.

    One of the missions of the FSOC itself as spelled out by Congress 
with regard to financial stability in the DFA is as follows: ``to 
identify risks to the financial stability of the United States that 
could arise from the material financial distress or failure, or ongoing 
activities, of large, interconnected bank holding companies or nonbank 
financial companies, or that could arise outside the financial services 
marketplace.'' This provision appears rooted in the experiences of the 
Financial Crisis, when the U.S. economy was close to ruin following the 
failures and near-failures of large, interconnected bank holding 
companies and nonbank financial companies that threatened and 
undermined financial stability.

    The fundamental purpose behind FSOC is to facilitate coordination 
among regulators so that significant risks to our economy do not go 
unaddressed because they do not fall wholly into the purview of one 
regulator's jurisdiction. My view is that the FSOC should address risks 
whatever their origin. But our focus must remain on stability in our 
financial system and ensuring that we are prepared to mitigate market 
disruption in times of stress. A clear example of such market 
disruption is the recent disruptions in the Treasury market, and it 
should be part of the FSOC's responsibility to look into the Treasury 
market disruption and any potential interplay with non-bank financial 
risks.

                                 ______
                                 
                Questions Submitted by Hon. Rob Portman
    Question. The Tax Cuts and Jobs Act was the first time Congress has 
passed meaningful tax reform in 30 years, and for many Americans. 
Hundreds of U.S. businesses, large and small, have made investments 
totaling $482 billion in equipment, buildings, and--most importantly--
their employees. Prior to the pandemic, the TCJA helped American 
companies stay competitive by lowering the tax rate and providing 
relief to low-income and working families.

    Do you favor increasing the corporate tax rate from 21 percent?

    Answer. Yes. President Biden has proposed increasing the corporate 
tax rate to 28 percent.

    Question. President Biden has proposed raising the corporate tax 
rate from 21 percent to 28 percent and doubling the tax rate on GILTI 
from 10.5 percent to 21 percent. Moreover, the OECD is currently 
considering a global minimum tax rate of 12.5 percent. An increase in 
the GILTI rate to 21 percent would subject U.S. companies to 
significantly higher levels of tax than their foreign competitors, 
resulting in more profitable business opportunities for foreign 
companies and return to the inversion of U.S. companies or acquisition 
by foreign companies, resulting in a loss of U.S. jobs and investment.

    What is your view on the United States imposing a 21 percent tax on 
foreign earnings of US companies, and how do you see that as being 
competitive if the OECD is planning to implement a much lower global 
minimum tax at or around 12.5 percent?

    Answer. I appreciate your concern with regard to the 
competitiveness of our U.S. companies amidst a changing international 
tax landscape. A global minimum tax agreed to at the OECD would, 
however, stop the destructive global race to the bottom on corporate 
taxation. With a multilateral agreement in place, American companies 
would remain competitive even with a somewhat higher tax on their 
foreign earnings. Indeed, any gap between the U.S. minimum tax rate and 
a globally agreed rate would likely be smaller than the gap that exists 
today under the rules enacted under the Tax Cuts and Jobs Act.

    Question. Some provisions from TCJA expire in the next few years, 
including provisions that aided working class families such as doubling 
the child tax credit and increasing the limit on the alternative 
minimum tax which was hurting small businesses and middle class 
families. Other provisions which incentivize innovation by providing a 
deduction for research and development expenses such as section 174, 
will provide a more limited benefit after this year.

    Would you favor extending these provisions? If not, what policies 
would you support to ensure that we do not unfairly burden working-
class families and allow for innovation as a driver of our economy?

    Answer. President Biden is focused on supporting small businesses 
and working families through the severe hardship caused by the 
pandemic. He has recently proposed a comprehensive relief package that 
provides significant tax relief for working families through an 
expanded and refundable Child Tax Credit and an enhanced Earned Income 
Tax Credit. If confirmed, I would look forward to working with you and 
others in Congress to advance plans to fuel innovation by investing in 
American workers and American manufacturing, clean energy, critical 
infrastructure, and access to broadband.

    Question. As you know, the Organisation for Economic Co-operation 
and Development (OECD) has been working over the past 2 years with the 
goal of having agreement on new international tax rules by mid-2021. 
I'm very concerned by the precedent set by some of these digital 
services tax proposals, especially as the proposal widened to consider 
``consumer-facing businesses.'' What we don't want is for American 
companies across all industries to end up receiving little benefit from 
a multilateral solution while paying significant revenue into ``market 
countries.''

    What is your transition plan for the OECD negotiations?

    Answer. If confirmed, I will ensure the Treasury Department 
immediately and vigorously engages with the international tax 
negotiations at the OECD. I believe these negotiations present an 
opportunity to establish a more stable, equitable international 
corporate tax system.

    Question. How will the Department engage in the OECD negotiations 
and how it will prioritize this issue in relation to the multitude of 
domestic challenges facing the country?

    Answer. Please see the answer to the previous question.

    Question. In a bipartisan way, Senators have been monitoring the 
progress of the OECD process and repeatedly expressed an interest in 
protecting U.S. companies and the U.S. tax base during the discussions. 
I urge you to continue to press the Inclusive Framework members to 
treat U.S. businesses fairly in both Pillar One and Pillar Two; this 
will ensure that the U.S. tax base is protected and activities and 
income that should properly be taxed in the U.S. remain here.

    Will you commit to keeping the members of the Senate Finance 
Committee updated on the progress of the negotiations and to bringing 
any final agreement back to the Senate to discuss with members of this 
committee?

    Answer. If confirmed, I will certainly keep the Senate Finance 
Committee appropriately updated on the OECD/G20 negotiations. Any 
treaty arrangements would, of course, require the advice and consent of 
the Senate.

    Question. Further, will you commit to providing information to the 
members of the Senate Finance Committee about the economic effects of 
any proposals on different types of U.S. businesses (manufacturing, 
financial services, technology, consumer products, etc.)?

    Answer. If confirmed, I would look forward to future conversations 
with the members of the Senate Finance Committee about the economic 
effects of proposals by the OECD.

    Question. Treasury has taken a leading role in Paycheck Protection 
Program with the SBA. However, the guidance has lagged and questions on 
forgiveness still linger.

    How would your Treasury Department work with banks and small 
businesses to ensure they have the guidance they need?

    Answer. If confirmed, I am committed to working with the SBA to 
ensure that small businesses and their lenders have clear guidance 
under the Paycheck Protection Program, especially with regard to 
forgiveness, so that the program can fully reach the goals Congress has 
set out for it and the impacted small businesses can benefit from this 
critical assistance.

    Question. President Biden's stimulus proposal would give loans and 
grants to small businesses. However, I worry about the potential for 
this to be less than targeted and to achieve certain partisan 
priorities. I believe it is critical that all of these programs are 
structured to protect the maximum number of jobs regardless of the 
political environment.

    How would your Department plan to structure this program?

    Answer. The relief bill late last year was just a down payment to 
get us through the next few months. As the December jobs report shows, 
many families are still in need. We have a long way to go before our 
economy fully recovers.

    Small businesses are the foundation of our economy and we must do 
everything possible to keep them afloat and back on track towards 
prosperous growth. The President looked at the latest data, consulted 
with experts, and put together a package that is necessary to spur an 
economic recovery, and lift more than 11 million Americans out of 
poverty in the process. If passed by Congress, I will, if confirmed, 
work to ensure the implementation of these programs catalyzes small 
business growth in a way that is both equitable and sustainable.

    Question. The bipartisan relief package we passed in December will 
help provide much-needed support to Americans as we continue to combat 
the pandemic. It is crucial that we first see how effectively the aid 
from December works to serve as a bridge until vaccines become widely 
available and we can get back to normal life. However, President Biden 
proposed a $1.9-trillion stimulus plan prior to seeing the impact of 
the $900-billion package passed in December.

    How will we know when we don't need more economic stimulus? What 
indicators would you rely on?

    Answer. The pandemic and resulting economic crisis have created 
severe pain for families across the country. Unemployment remains 
troublingly high and millions of families are facing hunger or the risk 
of eviction. Additional relief is needed to strengthen the economy, 
address our public health challenge, and provide relief to communities 
that have been hardest-hit.

    If confirmed, I will work hard to ensure that the package that 
passed in December is fully and efficiently implemented so that the 
assistance it provides gets to those who desperately need the help. 
And, I will continue to consult a range of economic indicators to 
understand how workers, households and communities are faring in the 
recovery. I would look forward to discussing the performance of various 
economic indicators with this committee.

    Question. Aside from aiding our economy as we recover from the 
pandemic, what would your priorities be as Treasury Secretary?

    Answer. It is the responsibility of the Treasury Secretary to 
strengthen the U.S. economy, foster widespread economic prosperity, and 
promote an economic agenda that leads to long-run economic growth. 
Meeting that challenge undoubtedly requires focus on the current 
economy, but also requires a commitment to the building blocks of 
enduring prosperity. Further, President Biden is committed to 
overcoming the economic and social crises facing our country and 
addressing persistent challenges such as climate change and racial 
inequality. If confirmed, I will be firmly committed to implementing 
policies designed to overcome these challenges.

    Question. Recently, the U.S. dollar has weakened. Do you believe in 
a strong dollar? If so, what can we do to increase the strength of the 
dollar?

    Answer. As I said at my hearing, I believe in a strong and 
equitable U.S. economy that delivers good jobs with rising wages for 
all Americans. Maintaining confidence in the long-term strength of the 
U.S. economy and the stability of the U.S. financial system is good for 
America as well as our trading and investing partners. I look forward 
to working with Congress to make the U.S. economic recovery as strong 
as possible.

    I believe in market-determined exchange rates. The value of the 
U.S. dollar and other currencies should be determined by markets. 
Markets adjust to reflect variations in economic performance and 
generally facilitate adjustments in the global economy.

    The United States does not seek a weaker currency to gain 
competitive advantage. We should oppose attempts by other countries to 
do so. The intentional targeting of exchange rates to gain commercial 
advantage is unacceptable. If confirmed, I will work to implement the 
President's promise to oppose any and all attempts by foreign countries 
to artificially manipulate currency values to gain an unfair advantage 
in trade.

    Question. As Chair of the Federal Reserve, you were a staunch 
defender of an independent Central Bank. Historically, the Treasury 
Department and Federal Reserve have coordinated on certain policies. 
Thus, in your new role you will coordinate with Chairman Powell at 
times.

    How will you ensure the Federal Reserve maintains its independence 
as it works with the Treasury Department?

    Answer. The Federal Reserve has long operated as an independent 
institution, and I respect and believe strongly in upholding those 
norms. Given my prior leadership at the Federal Reserve, I understand 
deeply why it is so important to maintain the tradition of the 
independence of the Fed in monetary policy. In areas where it will be 
appropriate and necessary for coordination between the Treasury and the 
Fed, I, if confirmed, will certainly take those responsibilities 
seriously and will be well-positioned to work seamlessly with Chairman 
Powell.

    Question. During our phone call, we discussed how improving 
retirement security is one of my top priorities in the coming Congress. 
There are many things that can be done on a bipartisan basis, which 
will be critical in such a narrowly divided Congress. I have worked on 
a bipartisan bill with Senator Cardin, which has four goals:

    First, the bill improves savings rates for lower-income and part-
time workers.

    Second, the legislation focuses on improving access to workplace 
plans at small businesses.

    Third, it allows older Americans who have not saved enough to save 
more.

    Finally, this bill recognizes that many Americans live longer and 
ensures they do not outlive their money.

    Can you commit to working on passing this bill in a bipartisan way 
in the coming Congress?

    Answer. I appreciate your commitment to the important work of 
improving retirement security and your work with Senator Cardin on this 
legislation.

    President Biden has proposed giving small businesses a tax break 
for starting a retirement plan and giving workers the chance to save at 
work. In addition, under President Biden's plan, almost all workers 
without a pension or 401(k)-type plan will have access to an 
``automatic 401(k),'' which provides the opportunity to easily save for 
retirement at work--putting millions of middle-class families on the 
path to a secure retirement.

    If confirmed, I look forward to working with you to improve 
Americans' retirement security.

    Question. As you know, pensions are part of the three-legged stool 
of retirement for many Americans. My bill addresses the defined 
contribution leg. However, many Americans are worried about whether 
they will be able to receive the pensions they earned after years of 
hard work. Many of these people cannot simply just start working again. 
I was on the Bipartisan Joint Select Committee looking to strengthen 
this system. Unfortunately, we came up short on reaching a deal--but we 
had some good discussions and came up with a few good ideas.

    However, good intentions and good ideas will not give the needed 
assurances to thousands of my constituents whose retirement security 
relies on their pensions and have received that heart-breaking notice 
that they may be forced to take benefit cuts.

    Can you commit to me to work with us in a bipartisan way to ensure 
we provide security to those Americans?

    Answer. If confirmed, I am committed to working with Congress and 
the Department of Labor to find and enact a comprehensive solution to 
the challenges facing multiemployer pension plans. The President also 
supports passage of the Butch Lewis Act, which offers low-interest 
loans to financially troubled multiemployer plans--helping them to meet 
their commitments.

    Question. The final leg of the stool is Social Security. American 
workers have faithfully paid into this system. Unfortunately, the OASI 
trust fund could run out of money by 2035. If Congress were to allow 
this to happen and we see benefit cuts, we would be breaking our 
promises to the American people. I'm actually worried that the current 
pandemic may have brought that date forward.

    The good news is that I believe we can work in a bipartisan 
fashion. I want to commit that I am willing to work with you, the 
incoming administration and my colleagues on both sides of the aisle on 
this critical issue.

    Can you discuss both the impact of benefit cuts on the American 
people and any solutions you have to avoid such a cliff?

    Answer. While the last report of the Trustees (issued in April 
2020) found no material change in the solvency of Social Security 
relative to the prior year, this analysis was done for the pre-COVID 
period. COVID has accelerated the depletion of all major trust funds 
according to Congressional Budget Office projections released in 
September 2020. An across-the-board benefits cut for Social Security 
recipients would plunge some elder Americans into poverty and would 
violate the trust of Americans who paid into Social Security for 
decades. Strengthening Social Security is essential in order to ensure 
a secure retirement, especially for our most vulnerable populations. 
President Biden has called for a Social Security reform package that 
would boost benefits for vulnerable beneficiaries--including widows/
widowers, workers with low lifetime incomes, and older beneficiaries--
and also provide an across-the-board increase for all beneficiaries. 
The plan also improves the long-run fiscal position of the Social 
Security Trust Fund. It does this by asking wealthy taxpayers with more 
than $400,000 in wages to pay the same rate on their income as other 
workers. On the whole, President Biden's plan provides older Americans 
a more secure retirement. If confirmed, I look forward to working with 
Congress to shore up the Social Security program for decades to come 
without burdening middle-class taxpayers.

    Question. As you know, the Treasury Secretary is the Chair of the 
Financial Stability Oversight Council (FSOC), which has enormous power 
to declare financial institutions to be systematically important 
financial institutions (SIFIs). This can subject them to increased 
regulation. It also gives them enormous power to liquidate institutions 
that are seen as a threat to the financial stability of the country. I 
was concerned during the Obama administration that many insurance 
companies and asset managers were declared SIFIs despite many outside 
observers not viewing them as ``too big to fail.''

    Can you discuss your thinking at the time on these issues? What 
measurements are you considering moving forward? As Chair of FSOC, what 
would your areas of focus be?

    Answer. As you know, FSOC was created in the aftermath of the 
Financial Crisis to coordinate among regulators and ensure significant 
risks to financial stability do not go unaddressed because they do not 
fall wholly into a single regulator's purview. I believe FSOC should 
address risks whatever their origin. But, our focus must remain on the 
stability in our financial system and ensuring that we are prepared to 
mitigate market disruption in times of stress.

    Question. The conservation easement deduction encourages taxpayers 
to donate property that has conservation value, a policy goal that 
myself and colleagues on both sides share. Since being made a permanent 
part of the tax code in 1980, the deduction has been a cornerstone in 
the fight to expand conservation for a cleaner, healthier environment. 
Unfortunately, the Internal Revenue Service is increasingly challenging 
taxpayers' deductions on what can best be described as technical 
drafting issues related to conservation easement deeds when the 
underlying issue seems to be a perceived over-valuation of the 
easement. Groups as diverse as the National Taxpayer Advocate, the Land 
Trust Alliance, the American Bar Association (ABA), and the National 
Taxpayer's Union have called on the IRS to publish safe harbor guidance 
so that potential donors can have certainty that their easement deeds 
won't wind up subject to litigation. It seems patently unfair that 
landowners are losing at audit and in the Tax Court on technical 
drafting issues when requests for guidance from IRS on these very same 
clauses has gone unanswered for over a decade.

    In fact, just last week the National Taxpayer Advocate in her 2020 
Annual Report to Congress again recommended that the IRS ``[d]evelop 
and publish additional guidance that contains sample easement 
provisions to assist taxpayers in drafting deeds that satisfy the 
statutory requirements for qualified conservation contributions, 
particularly the perpetuity requirement for those conservation 
easements that incentivize land preservation for future generations.''

    Will you commit to working with the IRS to publish sample deed 
language so that taxpayers can have certainty when making donations, 
helping to further this important policy goal? Once we have this 
guidance, I think it is important that we provide an opportunity for 
taxpayers to come into compliance with the new rules.

    Answer. Taxpayer certainty with regard to tax treatment in all 
issues is an important goal for the system at large. If confirmed, I 
will strive to meet that goal through the issuance of taxpayer 
guidance, and I appreciate the importance of creating certainty for 
taxpayers on this issue.

    Question. The pandemic has caused construction shutdowns, shortages 
of labor and materials, supply chain disruptions, financial 
uncertainty, shifting lending and transactional requirements, and 
indefinite delays on land transactions and project entitlements--all 
major obstacles for housing development and rehabilitation projects 
underway nationwide.

    What new mechanisms and Federal incentives do you envision once we 
get past the pandemic to address the deepening of America's housing 
affordability crisis?

    Answer. I believe it is critically important that we have a housing 
system that serves all Americans, and while the pandemic undoubtedly 
created challenges in the production of affordable housing, shortages 
of affordable housing predate the pandemic. I am committed to a 
Treasury Department that is focused on rebuilding our economy 
equitably. If confirmed, I would look forward to working with you and 
others in Congress to identify the correct (new or existing) solutions 
and incentives to address these important issues.

    Question. According to the Census Household Pulse Survey, 19 
percent of renters are currently unable to pay rent and, if that number 
remains steady, rent owed could amount to an additional $87.4 billion 
by the end of September 2021. I helped lead the creation of the first 
ever emergency rental assistance program through Treasury's Coronavirus 
Relief Fund in the coronavirus relief legislation enacted along with 
the omnibus at the end of last Congress. Emergency rental assistance is 
one of the most effective and sustainable ways to help tenants and 
housing providers get through this difficult time.

    Do you support additional funding for of emergency rental 
assistance through the Coronavirus Relief Fund, if necessary? And what 
other policies do you foresee implementing to sustain our Nation's 
housing stability?

    Answer. I am grateful to you for your leadership in developing 
effective and timely programs to support families who rent their homes 
and apartments, as well as housing providers, get through this 
difficult time. The relief that Congress provided is critical to 
supporting Americans in need. If confirmed, I would look forward to 
working with you and others in Congress to ensure that sufficient 
support is provided to help struggling families.

    Question. Any major investment in the Nation's infrastructure 
should recognize the important relationship between America's growing 
demand for rental housing and the industry's ability to meet it. In 
2016 at the end of the Obama/Biden administration, a tool-kit was 
released aimed at modernizing housing development regulations and 
removing local barriers. The tool-kit stressed the role that zoning, 
land use regulations and lengthy development approval processes have 
played as part of our housing affordability crisis.

    What steps will this administration take as part of the 
infrastructure package to incentivize States and localities to remove 
these barriers and regulation that discourage development and 
renovation?

    Answer. You raise important questions about the relationship 
between rental housing development and regulations at the Federal, 
State, and local levels. Rental housing is a critically important part 
of assuring housing affordability. If confirmed, I would look forward 
to working on ways to partner with you on these critical issues.

    Question. In my role on the Senate Homeland Security and 
Governmental Affairs Committee (HSGAC) this Congress, I will be focused 
on the oversight jurisdiction over government-wide affairs, 
particularly Federal Government-wide cybersecurity. The Treasury 
Department was one of the agencies impacted in the recent SolarWinds 
cyber-attack. HSGAC will be focused on learning more about the attack 
and how to improve our preparedness with these attacks.

    If confirmed, will you commit to working with Congress to provide 
timely and thorough information about the attack?

    Answer. The recent SolarWinds cyberattack that impacted a number of 
agencies across the Federal Government is an issue of grave concern. If 
confirmed, I look forward to working with Congress as we learn more 
about the attack and how to improve our preparedness.

    Question. As you are aware, I have a very strong interest in 
Ukraine and, as the co-chair of the Ukraine Caucus, have worked in a 
bi-partisan manner to support Ukraine with militarily, and economic 
assistance as well as pressuring them to continue on much needed anti-
corruption reform. Ukraine faces grave threats from Russia and since 
the Russian invasion on Crimea in 2014 and their blatant support of 
pro-separatist forces in the Donbas have suffered greatly. Our 
sanctions program has been very effecting in making the Russians pay a 
heavy economic price for their actions.

    Many of our sanctions are by executive orders. Can you make a 
commitment that you will encourage the President to keep these 
sanctions in effect and work with the Congress to strengthen these and 
other sanctions against our adversaries?

    Answer. I understand your strong interest in this important matter. 
If confirmed, I will work closely with the White House and counterparts 
at other agencies across the administration on U.S. policy toward 
Russia. I commit to rigorously enforcing sanctions targeting Russian 
actors for territorial aggression in eastern Ukraine and Crimea and 
other threats to U.S. national security.

    Question. Recent reports indicate that the Iranian regime and its 
military wing--the Iranian Revolutionary Guard Corps (IRGC)--may be 
siphoning money away from the NIMA system (FOREX Management Integrated 
System) in an effort to fund terror outside of Iran's boarders. This 
informal system was designed to give Iranian exporters access to a 
foreign exchange market so that they could convert their foreign 
earnings into rials. However, there are allegations that the IRGC has 
established a web of front companies which exploit this system to gain 
currency which is then given to IRGC affiliated groups throughout the 
region.

    What steps will you take as Treasury Secretary to ensure that the 
IRGC is not able to exploit loopholes in the international banking 
system, and in more informal networks such as NIMA, to fund terror 
outside its borders?

    Answer. If confirmed, I will ensure that the Treasury Department is 
closely focused on any Iranian efforts to evade sanctions and abuse the 
international banking system. Iran's support for terrorism is a very 
serious concern that, if confirmed, I will direct the dedicated 
Treasury staff to closely monitor and seek to disrupt with all 
available tools.

    Question. Following the Obama administration's adoption of the 
Joint Comprehensive Plan of Action (JCPOA) with Iran, the Treasury 
Department granted Iran a specific license to access the U.S. financial 
system.

    Should the Biden administration re-engage in negotiations with Iran 
regarding nuclear capabilities, would you also consider granting Iran a 
specific or general license to access theU.S. financial system?

    Answer. The Biden-Harris administration is committed to ensuring 
that Iran takes the appropriate steps to resume compliance with its 
nuclear commitments. We will carefully review what sanctions relief 
would be appropriate if Iran complies, and Iran will only enjoy 
sanctions relief under the JCPOA if it complies with its nuclear 
constraints.

    Question. Following the grant of the specific license to Iran, 
Treasury officials were asked by members of Congress if Iran was given 
access to the U.S. financial system as part of the JCPOA. Those 
Treasury officials, under oath, stated that Iran had not been given 
such access.

    Do you pledge to provide truthful information regarding the 
granting of any specific or general license in response to 
congressional inquiries?

    Answer. Yes, I will commit to provide truthful information 
regarding Iran sanctions and licensing in my communications with 
Congress.

                                 ______
                                 
           Follow-up Questions Submitted by Hon. Rob Portman
    Question. President Biden has proposed raising the corporate tax 
rate from 21 percent to 28 percent and doubling the tax rate on GILTI 
from 10.5 percent to 21 percent. Moreover, the OECD is currently 
considering a global minimum tax rate of 12.5 percent. An increase in 
the GILTI rate to 21 percent would subject U.S. companies to 
significantly higher levels of tax than their foreign competitors, 
resulting in more profitable business opportunities for foreign 
companies and return to the inversion of U.S. companies or acquisition 
by foreign companies, resulting in a loss of U.S. jobs and investment.

    What is your view on the United States imposing a 21 percent tax on 
foreign earnings of U.S. companies, and how do you see that as being 
competitive if the OECD is planning to implement a much lower global 
minimum tax at or around 12.5 percent?

    If the OECD agrees on a global minimum tax rate at or around 12.5 
percent, would you propose increasing the rate on foreign earnings from 
its current rate of 10.5 percent? Additionally, please explain your 
response that any gap between the U.S. minimum tax rate and a globally 
agreed rate would likely be smaller than the gap that exists today. The 
rate currently being considered at the OECD is at or around 12.5 
percent and the current GILTI rate is 10.5 percent, a difference of 2 
percent. If the GILTI rate is increased to 21 percent, there would 
likely be a much larger gap between the GILTI rate and the OECD rate 
(assuming the rate is at or around 12.5 percent).

    Answer. I appreciate your concern regarding the competitiveness of 
U.S. companies amidst a changing international tax landscape. As you 
note, President Biden has proposed substantially reforming GILTI as 
part of his plan to ensure a fair and progressive tax code where 
wealthy individuals and corporations pay their fair share. The U.S. has 
strong and unique attractions as a residence for multinational 
corporations, and, as a result, U.S. companies would remain competitive 
even if they faced a somewhat higher 21-percent rate of tax on their 
foreign earnings irrespective of the outcome of the OECD negotiations. 
This is even more true if a global minimum tax were agreed to at the 
OECD. Such a global minimum tax could stop the destructive global race 
to the bottom on corporate taxation and help discourage harmful profit-
shifting.

    Regarding the current gap, I was referring to the gap between the 
GILTI rate and the minimum tax rate on the foreign earnings of foreign-
resident multinationals under current law. Today, most other 
headquarters' jurisdictions impose no tax on the foreign earnings of 
their domestically-headquartered multinationals.

    Question. Following the Obama administration's adoption of the 
Joint Comprehensive Plan of Action (JCPOA) with Iran, the Treasury 
Department granted Iran a specific license to access the U.S. financial 
system.

    Should the Biden administration re-engage in negotiations with Iran 
regarding nuclear capabilities, would you also consider granting Iran a 
specific or general license to access the U.S. financial system?

    Answer. The Biden-Harris administration is committed to ensuring 
that Iran takes the appropriate steps to resume compliance with its 
nuclear commitments. We will carefully review what sanctions relief 
would be appropriate, if Iran complies--and Iran will only enjoy 
sanctions relief under the JCPOA if it complies with its nuclear 
constraints. As circumstances unfold and these reviews are conducted, I 
will commit to following up with congressional offices with more 
specificity.

    Question. Should the Biden administration re-engage in negotiations 
with Iran regarding nuclear capabilities, would you consider granting 
Iran a specific or general license to access the U.S. financial system? 
Please state either yes or no.

    Answer. Yes, if the Biden-Harris administration reenters the Iran 
nuclear deal, we would consider what sanctions relief would be 
appropriate. However, Iran will only enjoy sanctions relief under the 
JCPOA if it complies with its nuclear constraints. I fully appreciate 
the need to communicate with Congress on our Iran sanctions, and will 
plan to do that, if confirmed.

                                 ______
                                 
             Questions Submitted by Hon. Patrick J. Toomey
                               tax policy
    Question. President Biden has proposed several changes to the way 
U.S. corporations are taxed, including amending provisions of the 2017 
Tax Cuts and Jobs Act (Pub. L. 115-97). Among those changes President 
Biden has called for are significant modifications to the tax levied on 
``global intangible low-tax income'' (GILTI). Under current law, this 
category of income is subject to a minimum tax of between 10.5 and 
13.125 percent annually. As such, the United States is the only 
advanced economy that imposes a foreign minimum tax on the active 
foreign-source income of domestically headquartered multinational 
companies. The GILTI tax, in addition to other anti-base erosion 
provisions in the 2017 tax reform, was specifically designed to 
discourage profit shifting, and, along with the corporate income tax 
rate deduction, encourage U.S. companies to invest more in the U.S. 
rather than offshoring profitable economic activity.

    Specifically, President Biden's proposal would assess GILTI on a 
country-by-
country basis as opposed to the current aggregate approach; eliminate 
GILTI's exemption for deemed returns under 10 percent of ``qualified 
business asset income'' (QBAI); and double the tax rate assessed on 
GILTI. On the whole, these changes would make U.S. multinationals less 
competitive than they are today with a larger tax liability and a 
greater likelihood of inverting.

    If the proposed legislative changes to GILTI are adopted along with 
an increase in the corporate rate, do you acknowledge U.S. 
multinationals would face higher effective tax rates and thus become 
less competitive than they are today?

    Would a higher tax burden on U.S.-based multinationals make it less 
likely that a newly formed, or existing, U.S. multinational company 
would locate its headquarters in the United States?

    Answer. During the presidential campaign, the President proposed 
raising the corporate tax rate to 28 percent--which is the midpoint of 
the pre-2017 level and the rate imposed after the tax act. At 28 
percent, the corporate tax rate would be substantially below the level 
that had been in place for decades.

    The Biden agenda would couple this tax change with massive 
investment that would benefit American businesses of all stripes and 
improve our international competitiveness. This includes a sweeping 
plan to bolster America's infrastructure, ranging from surface 
transportation to broadband to airports and waterways. The plan would 
allow billions of dollars to worker training and college education, in 
addition to apprenticeship programs--all of which would raise the 
productivity of American workers. The Biden plan allocates hundreds of 
billions in research funds for renewable energy and other economic 
priorities, which ultimately make us more competitive on the world 
stage. Finally, President Biden has advanced a plan to quickly 
distribute vaccines to households while also providing a lifeline for 
the American economy. These critical actions will help businesses 
across the country, including those that are subject to the higher 28-
percent corporate tax rate.

    Finally, if confirmed I commit to vigorously engage in the OECD/G20 
negotiations to reform the international tax system. A global minimum 
tax agreed to at the OECD would stop the destructive global race to the 
bottom on corporate taxation. Indeed, any gap between the US minimum 
tax rate and a globally agreed rate would likely be smaller than the 
gap that exists today under the rules enacted under the Tax Cuts and 
Jobs Act.

    Congress relied on the Treasury Department to fully implement the 
Tax Cuts and Jobs Act consistent with congressional intent. Over the 
last 3 years, Treasury has issued various regulations to carry out this 
responsibility. Taxpayers have made plans and investment decisions in 
accordance with the law and accompanying regulations. It is important 
that taxpayers be able to rely on the established law and regulatory 
implementation.

    Question. Do you intend to use Treasury's regulatory authority to 
alter or repeal regulations pertaining to implementation of the Tax 
Cuts and Jobs Act?

    If so, will you and other Treasury officials consult with Congress 
in a bipartisan manner prior to exercising rulemaking authority?

    Answer. I will work to ensure the country's tax laws are 
implemented and enforced fairly. Any review of regulation will seek to 
ensure they are consistent with the law. Going forward, the Treasury 
Department will work in coordination with Congress on important issues 
such as these.

    Currently, the OECD is in the midst of multilateral negotiations on 
tax challenges arising from digitalization. Negotiations thus far have 
centered upon two ``pillars,'' one focusing on allocation of taxing 
rights and the other on a global anti-base erosion proposal.

    The Trump administration was at first extensively involved in the 
negotiations, and expressed support for reforming the international tax 
system in order to provide for greater tax certainty and so that 
countries will drop their digital services taxes. However, negotiations 
were put on pause in 2020.

    Question. As Treasury Secretary, will you commit to re-engaging in 
multilateral negotiations through the OECD process to address issues of 
tax challenges through digitalization?

    Answer. If confirmed, I will commit to vigorously engaging in a 
cooperative multilateral effort to address base erosion and profit 
shifting through the OECD/G20 process, and to working to address the 
tax challenges raised by the digitalization of the economy in that 
context.

    Question. Will you commit to closely examining the economic effects 
of any proposals on diverse sectors of the U.S. economy, and to 
supporting policies that promote long-term growth, as well as a 
transition period during which the new rules are implemented?

    Answer. I appreciate your concern regarding the economic effects of 
any agreements reached in the OECD negotiations. If confirmed, I commit 
to examining the economic effects of any OECD proposals, and to 
supporting policies that promote equitable growth.

    Question. Will you commit to keeping the Senate and the members of 
the Senate Finance Committee updated on the progress of the 
negotiations, and to bringing any final agreement back to the Senate to 
discuss with members of this committee?

    Answer. If confirmed, I will commit to keeping the Senate and the 
members of the Senate Finance Committee appropriately updated on the 
OECD/G20 negotiations. Further, any treaty arrangements would of course 
require the advice and consent of the Senate and I commit to satisfying 
any such requirements.

    Instead of waiting for agreement at the OECD level, a number of 
countries have chosen to unilaterally implement their own digital 
services taxes (DSTs). As of January 15, 2021, over a dozen countries 
have already imposed DSTs, with many more countries having either 
published proposals or announced an intention to publish a proposal to 
enact a DST.

    The details of these DST proposals vary by country, but the policy 
frequently discriminates against non-resident businesses and imposes 
double taxation. Additionally, the DSTs of certain countries appear to 
be designed to specifically target United States digital companies.

    In retaliation for these DSTs, the Trump administration has 
initiated investigations under section 301 of the Trade Act of 1974, 
into DSTs that have been adopted or are being considered by a number of 
U.S. trading partners. In several of these investigations, the United 
States Trade Representative has authorized the use of tariffs as a 
response.

    Question. Do you agree that a multilateral solution to digital 
taxation is a better approach than relying upon retaliatory tariffs?

    Answer. I am aware of the concerns U.S. companies have raised about 
digital services taxes. I agree that retaliatory tariffs also impose 
costs of their own on American households. I am committed to a 
cooperative multilateral effort to address base erosion and profit 
shifting through the OECD/G20 process, and will commit to work to 
resolve the digital taxation dispute in that context.

    Several Democrats in Congress have endorsed a financial 
transactions tax (FTT). One such proposal would levy a 0.5-percent tax 
on stock trades and a 0.1-percent tax on bond trades. A FTT would 
significantly damage capital markets by raising transaction costs, 
decreasing trading volumes, and reducing liquidity. Over half of 
American households are invested in equity and fixed-income 
securities--either directly or indirectly--so this proposal would be 
destructive for American investors. President Biden has not included a 
FTT in his official tax policy platform.

    Question. Do you believe that a FTT would reduce liquidity in 
capital markets? Would it raise costs and lower returns for the 
majority of Americans who are investors?

    Answer. You raise an important question about financial transaction 
taxes (FTT). As you may know, President Biden has not put forward a 
financial transaction tax proposal. FTTs vary widely in their design, 
and have different impacts on markets. I have not yet had an 
opportunity to study particular FTT designs and evaluate their impacts.
                 financial stability oversight council
    Question. I am concerned about the Financial Stability Oversight 
Council's (FSOC) designations of Systemically Important Financial 
Institutions (SIFIs). A SIFI designation is troubling in part because 
it creates moral hazard: it formalizes an institution's ``too big to 
fail'' status and creates the expectation that the taxpayers will bail 
out a SIFI that falls into financial distress.

    Also troubling is FSOC's history of exercising its SIFI designation 
powers. Under the Obama administration, FSOC made overreaching SIFI 
designations of non-banks in a manner completely lacking transparency, 
and without providing a clear path for de-designation. Perhaps the 
best-known example of this was FSOC's designation of MetLife. A D.C. 
District Court judge overturned the designation, holding that FSOC had 
acted arbitrarily and capriciously by ignoring its own guidance on 
designation and failing to do a cost-benefit analysis, the bedrock of 
reasoned regulatory decision-making in our system.

    Since then, in 2019, FSOC issued a policy that made several 
improvements to the non-bank designation process. These included 
emphasizing that designation is a last resort, requiring cost-benefit 
analysis and an assessment not only of the impact of a risk but also 
the likelihood that it will be realized, as well as creating both pre-
designation and post-designation ``off-ramps'' to help firms and 
regulators avoid or reverse SIFI designation by mitigating systemic 
risks.

    Congress still needs to reform Dodd-Frank to prevent FSOC from 
reverting to its troubling prior patterns of engaging in over-
designation and arbitrary processes. In the meantime, I hope that as 
the FSOC Chair, you will exercise restraint in making any SIFI 
designations, and commit to a transparent and fair process.

    Will you commit that, if confirmed, you will ensure FSOC continues 
to treat SIFI designation as a last resort; maintains a clear process 
for SIFI designation; conducts cost-benefit analysis for all 
designations; and provides institutions with the opportunity to avoid 
designation and, if designated, a clear path to reverse such 
designation?

    Answer. You have raised a series of important questions regarding 
the Financial Stability Oversight Council. I will respond to the series 
of questions in one set of responses.

    The Financial Crisis exposed enormous weaknesses in our financial 
system, and in our system of financial oversight. The crisis crushed 
the U.S. economy and caused enormous devastation to businesses and 
families. Taxpayers were exposed to significant risks. The weaknesses 
in our financial system led to an extremely slow recovery that hurt 
millions of Americans. In response, Congress enacted the Dodd-Frank Act 
to reform financial regulation, including regulation of the non-bank 
financial sector that had caused so much harm to the American economy. 
One important aspect of the Financial Crisis was that non-bank firms 
such as AIG and Lehman Brothers were not subject to meaningful and 
effective prudential supervision at the Federal level.

    Congress established the Financial Stability Oversight Council to 
bring together the financial regulatory community to identify and 
respond to emerging threats to financial stability, and to promote 
market discipline. The Council is tasked with identifying ``risks to US 
financial stability that could arise'' and ``respond to emerging 
threats to the United States financial system.'' To help achieve this, 
the SIFI designation authority is statutorily provided in order for 
FSOC to address risks that non-bank financial companies may pose to 
U.S. financial stability in the event of their material financial 
distress or failure. FSOC should have the tools to protect our economy 
from systemic threats, whether they're presented by a single firm or 
actions by an array of firms.

    I agree that designation should not be undertaken lightly, that 
there should be a clear process for designation, and that designation 
was never meant to be a one-way street. Procedures should require an 
annual review, and firms, if designated, should be regularly evaluated 
and are certainly able to adjust their business models to be less risky 
in an effort to be de-designated. As you may know, I disagreed with the 
procedural changes put in place by the prior administration because I 
think they did not show fealty to the statute Congress enacted and 
risked re-exposing taxpayers, households, businesses, and our economy 
to the failure of non-bank firms.

    Question. In a virtual event hosted by the Brookings Institution in 
June 2020, you proposed to expand FSOC's power to regulate directly the 
activities of non-bank financial institutions. You said, in part: ``I 
personally think we need a new Dodd-Frank. . . . We need to change the 
structure of FSOC and build up its powers to be able to deal more 
effectively with all of the problems that exist in the shadow banking 
sector. I think the structure is inherently flawed. I think the 
agencies need a definite financial stability mandate.''

    Expanding FSOC's role to allow it to directly regulate financial 
stability, instead of coordinating the activities of regulators, would 
also entrust regulation of specific markets to a body made up of the 
heads of agencies with highly specific regulatory specialties and 
expertise in distinct and disparate regulated markets. This means that 
FSOC has members, who lack expertise in particular types of activities 
or regulated entities, but would be responsible for devising and 
implementing a compulsory regulatory regime to govern these same 
businesses.

    Additionally, FSOC represents a highly politicized viewpoint. Its 
members are the political heads of all of the financial regulators. 
Despite purporting to represent several multi-member commissions with 
commissioners from both political parties, FSOC's members are the heads 
(i.e., chairs) of those commissions. They are not obligated to submit 
their FSOC activities to a vote by their commissions, and can act 
unilaterally. And, FSOC is significantly less transparent and 
accessible than the underlying agencies.

    Question. What do you consider to be ``shadow banking'' 
organizations?

    Answer. One way that is commonly used to describe non-bank firms 
that engage in activities similar to banks is to describe them as 
``shadow banking'' organizations. The term is meant to encapsulate a 
range of activities that may pose systemic risk to the financial 
system.

    Question. As a practical matter, the financial regulators have 
extraordinary powers over the institutions they regulate. What 
additional regulatory powers are you suggesting FSOC should receive?

    If FSOC or any of its component regulators were to identify a new 
problem in the regulatory system that they lacked the authority to 
address, wouldn't the appropriate response be to come to Congress and 
recommend that the duly elected representatives of the people enact 
legislation to address the problem rather than increasing the already 
vast powers of the financial regulators?

    Answer. With respect to the important questions you raise, I would 
suggest that while the independent financial regulatory agencies and 
FSOC have significant authorities, it is difficult to regulate 
systemically risky activities that cut across markets. If I am 
privileged to be confirmed as Treasury Secretary, I would look forward 
to working with the members of FSOC and the Congress to explore these 
questions further.

    I am concerned about recent proposals to advance a liberal 
environmental policy agenda through the regulation of banks and other 
financial institutions. Particularly troubling are calls to implement 
climate stress tests on banks. Financial regulators lack the expertise 
to make environmental policy.

    More importantly, generating environmental regulation is not the 
mission of financial regulators. Rather than regulating the safety and 
soundness of a financial institution, climate stress tests and other 
climate policies in the banking space are designed to prevent those 
institutions from holding certain assets as a form of indirect 
punishment against disfavored industries such as oil and gas. Moreover, 
the climate stress tests are not a function of climate change itself 
impacting the firm's assets, but rather the risk that government--
specifically unelected bureaucrats--will implement policies to ban or 
restrict them. Thus, climate change regulation is a self-fulfilling 
prophecy for the government: your oil and gas assets are unprofitable 
because we have decided to make them so.

    Moreover, as the last year has demonstrated, banks are in a 
resilient position even when facing a severe unexpected financial 
downturn. As Federal Reserve Governor Randy Quarles noted in November 
2020: ``Liquidity and capital remain high and, indeed, have increased 
at our largest banks over the course of the COVID event. Firms have 
sharply increased their reserves, setting aside resources today against 
losses they may incur tomorrow. Banks are well positioned to serve as a 
bulwark against broader financial and economic stress.'' Adding an 
additional stress testing regime to the existing one would impose 
significant economic costs, but is not likely to result in a material 
additional benefit to stability.

    Question. Will you commit not to use the Treasury Department to 
advance environmental policy through financial regulation?

    Will you commit not to use FSOC to urge other agencies to advance 
environmental policy through financial regulation?

    Answer. In the questions above, you raise important questions about 
the connection between environmental policy and financial regulation. I 
agree with Federal Reserve Chairman Jerome Powell that it is important 
for financial regulators to assess all the risks facing the financial 
system, including risks from climate change. If I am privileged to 
serve as Treasury Secretary, I would look forward to working with the 
members of FSOC and the Congress to explore these questions further.
                            capital markets
    Question. Despite the efforts of the Securities and Exchange 
Commission (SEC) over the past 4 years, it still appears to be too 
costly for a company to go and stay public. Going public used to be a 
capital-raising event but it is now all too often a liquidity event for 
early investors like venture capital funds and a company's founders. 
The 1990s saw an average of around 550 IPOs annually. During the last 
decade, the number of IPOs were almost one-third that figure, at around 
200 annually. Similarly, during the 1990s there was an annual average 
of about 7,200 total public companies. Now, there are 40 percent fewer 
public companies, with an annual average of around 4,300 public 
companies. Although there was an increase in IPOs in 2020, a number of 
these IPOs were non-traditional special purpose acquisition companies 
(SPACs). Thus, 2020 may represent an aberration from the long-term 
decline of IPOs. Do you agree that part of the IPO decline can be 
addressed by lowering the costs of going and staying public?

    Answer. You raise important questions about the structure of our 
capital markets and the vitality of the American economy. The causes 
and consequences of changes in the composition of capital markets and 
American businesses are complex. If I have the privilege of being 
confirmed as Treasury Secretary, I would look forward to studying these 
issues further and to working with the Congress on these important 
matters.

    Question. In October 2017, the Treasury Department released a 
report and recommendations on improving the capital markets. Which 
recommendations in the report do you agree with?

    Answer. The United States has the deepest and most liquid capital 
markets in the global economy. The President is committed to 
maintaining a sound economy and confidence in our financial system. If 
confirmed, I look forward to studying the findings of the 2017 report 
to see how Treasury can build even further on our already-strong 
capital markets while ensuring strong investor protections.

    Question. Going public may not be appropriate for all businesses, 
such as a small family-run business. Private markets play an important 
role in capital formation and job creation. Two years ago, new 
companies accounted for more than 25 percent of all employment gains. 
According to the SEC, in 2019, registered offerings accounted for $1.2 
trillion (30.8 percent) of new capital raised, while exempt offerings 
accounted for approximately $2.7 trillion (69.2 percent) of new capital 
raised. Do you agree that private markets are important to the economic 
growth of the United States?

    Answer. I agree with you that both public and private markets are 
important to the economic growth of the United States. If I am 
privileged to be confirmed as Treasury Secretary, I would look forward 
to working with you on these issues.

    Question. A small business in need of $500,000 often cannot raise 
that amount of funds from friends and family. However, $500,000 is 
often too small of an amount for a bank to make a loan or a venture 
capital firm to make an investment in a small business. How would you 
encourage further capital formation to fill this need?

    Answer. I agree with you that small businesses often have critical 
capital needs that are not being met. Small businesses are the bedrock 
of the American economy and of our communities. Oftentimes, small 
businesses struggle to get access to bank loans, and venture capital 
investments are even harder to obtain, especially for businesses not 
located in a handful of large cities with significant venture capital 
presence. These means that many small businesses all across the country 
that would otherwise be successful founder through no fault of their 
own. Congress took an important step in the Omnibus legislation by 
providing additional small business relief and creating a new 
initiative at Treasury to support Community Development Financial 
Institutions that serve small businesses and other borrowers in 
economically distressed communities. If I am fortunate enough to be 
confirmed as Treasury Secretary, I would be honored to work with you 
and other members of Congress to expand access to capital for small 
businesses throughout the United States.

    Question. Entrepreneurs, including minority and female 
entrepreneurs, need capital to transform their ideas into new 
businesses that will create jobs. Would minority and female 
entrepreneurs benefit from more opportunities to raise capital in the 
private markets?

    Answer. I agree with you that entrepreneurs, including minority and 
female entrepreneurs, need better access to capital to launch and grow 
their businesses and to create jobs. There are a wide variety of 
potential ways to improve access to capital for entrepreneurs, and if 
confirmed as Treasury Secretary, I would look forward to working with 
Congress on strategies to expand access to capital for entrepreneurs.

    Question. Retail investors could benefit from increased 
diversification of their investment portfolios and potentially higher 
investment returns if they had increased access to private investments, 
such as venture capital and private equity. Defined benefit plans 
frequently invest a portion of their assets in private investments. A 
2018 study by the Center for Retirement Research indicates that a 
defined benefit plan may hold, on average, 19 percent of its assets in 
private investments. However, most Americans do not have a defined 
benefit plan and currently there is very little or no exposure to 
private investments in target date funds offered by employers' 401(k) 
plans. Do you support providing employees at least a limited exposure 
to private investments through diversified funds with long investment 
horizons, such as target date funds designed for workers with a 
retirement date more than 20 years in the future?

    Answer. I agree that diversification in investments is a desirable 
outcome in principle, but there are many possible options for achieving 
that outcome. I look forward to studying this issue further, as 
building wealth for the middle-class, closing racial wealth gaps, and 
protecting the retirement safety of American workers are top 
imperatives for this administration.
                      data collection and security
    Question. In your role as Treasury Secretary, will you explore how 
to modernize data collection and data standards for Federal agencies, 
particularly to enhance data security and consistency and coordination 
between such agencies?

    Answer. If confirmed as Treasury Secretary, in my role as chair of 
FSOC, I will work with the financial regulatory community and the 
Office of Financial Research to review existing data capture standards 
and practices. The goal will be to ensure that the Federal Government 
is able to make the most informed and transparent policy decisions 
possible, informed by secured processes and consistent metrics.
                           national security
    Question. The Office of Foreign Asset Control (OFAC) within the 
Treasury Department administers economic and trade sanctions based on 
U.S. foreign policy and national security goals.

    Will you commit to have OFAC work with my staff to identify the 
ways in which current sanctions laws on North Korea and China, 
including the BRINK Act (Pub. L. No. 116-92) and the Hong Kong Autonomy 
Act (Pub. L. No. 116-149), can be more rigorously implemented?

    Answer. Yes, I can commit to having OFAC personnel discuss with 
your staff the current sanctions on North Korea and China, including 
whether the current sanctions are effective and whether such sanctions 
should be strengthened and, if so, how to do so.

    Question. Do you agree that Iran is the world's largest state 
sponsor of terrorism?

    Answer. Yes. I do agree with that statement.

    Question. Unless an Iranian government entity designated by OFAC as 
a Specially Designated Global Terrorist (SDGT) has permanently and 
verifiably ceased its support for terrorism, do you agree that lifting, 
rescinding, or significantly weakening such a designation would result 
in the Iranian government's enhanced capacity to support, finance, or 
commit acts of terrorism?

    Answer. The Biden-Harris administration has made a commitment, as 
part of an overall review of the United States' posture toward Iran, to 
review current U.S. sanctions on Iran. I believe such a review should 
take into account how the lifting or lessening of such sanctions might 
impact Iran's ability to support terrorism and how to counter such 
support as effectively as possible.

    Question. Will you commit to have OFAC provide regular and 
reoccurring staff-level briefings on the Iran sanctions program to the 
Senate Banking Committee while you are Treasury Secretary?

    Answer. Yes, I will commit to working with the Senate Banking 
Committee to ensure that adequate briefings are provided on the Iran 
sanctions program.

    Question. A primary goal of the Financial Crimes Enforcement 
Network (FinCEN) within the Treasury Department is to safeguard the 
financial system from illicit use and combat money laundering-related 
crimes, including terrorism. In 2011, under President Barack Obama, 
FinCEN found Iran was a jurisdiction of ``primary money laundering 
concern'' under section 311 of the PATRIOT Act. In 2019, under 
President Donald Trump, FinCEN finalized its finding that Iran was a 
jurisdiction of primary money laundering concern and took special 
measures to ensure that the Iranian financial system remained closed 
off from the United States.

    Do you agree with the determinations made by FinCEN during the 
Obama and Trump administrations that Iran is a jurisdiction of primary 
money laundering concern?

    Answer. Yes, I believe Iran is a jurisdiction of primary money 
laundering concern.

    Question. Will you keep in place the Treasury Department's section 
311 special measures on Iran as long the country continues to finance 
terrorism and fails to clean up its financial system?

    Answer. I believe we should keep in place various rigorous 
restrictions on Iran targeting its malign support for terrorism until 
such time as this ceases. I also believe that we should closely examine 
all such measures in the policy review the Biden-Harris administration 
will be conducting regarding the United States' overall posture toward 
Iran.

    Question. The FY21 NDAA (Pub. L. No. 116-283) instructs the 
Director of FinCEN to ``reach out to members of the small business 
community'' when promulgating the regulations needed to carry out title 
LXIV of the law, which establishes new beneficial ownership reporting 
requirements. How will the Treasury Department implement this directive 
and how will it ensure that its regulatory process adheres to the 
Regulatory Flexibility Act (5 U.S.C. Sec. 601 et seq.)?

    Answer. I agree strongly on the need for Federal banking agencies, 
including but not limited to FinCEN, to consult with the small business 
community when promulgating regulations, including on the promulgation 
of rules and guidance to implement the beneficial ownership reporting 
requirements. If confirmed, I will ensure this consultation occurs.

    Question. The United States dollar serves as the world's premier 
reserve currency. What level of U.S. public debt is a threat to the 
dollar's status as the world's reserve currency?

    Answer. There are important reasons that the U.S. dollar is the 
world's dominant reserve currency. The United States has the largest 
economy, and the deepest and most liquid capital markets. We are 
committed to maintaining a sound economy and confidence in our 
financial system. Indeed, the Biden-Harris administration will make 
investments in the American people that will accelerate the U.S. 
economic recovery and lay the foundation for a strong and equitable 
U.S. economy in the years ahead. The world can be certain that the 
United States will not seek a weaker currency to gain competitive 
advantage.

                                 ______
                                 
                 Questions Submitted by Hon. Tim Scott
    Question. As I noted at your nomination hearing on Tuesday, we 
recently passed into law a historic, bipartisan $900-billion package to 
address the ongoing COVID-19 pandemic through additional targeted 
relief. This package provided more than $80 billion for schools to 
reopen safely, supported greater investment into rural broadband, sent 
more than $280 billion to restart the PPP for a second round, and even 
provided a second round of direct relief checks to Americans.

    Yet here we are again, less than a month later, preparing to see 
another $1.9 trillion dollar package rammed through by way of President 
Biden's American Rescue Plan. The American Rescue Plan includes a third 
round of stimulus checks to the tune of $1,400-per-person, raises the 
Federal minimum wage to $15 an hour, and includes $400 per week 
enhanced unemployment benefits. With $4 trillion added to the debt last 
year alone, our national debt is now at its highest level relative to 
our economy since the end of World War II. At some point, we will start 
paying a price for this.

    In your opinion, at what point should we start taking serious 
action to rein in the debt?

    Should the mounting debt influence the size of additional COVID 
relief packages, and, in your view, when and how will we know that 
enough stimulus spending has been achieved?

    Answer. As I said at my hearing, I agree that it is essential that 
we put the Federal budget on a sustainable path. But, I believe the 
most important thing we can do to achieve that goal is to defeat the 
pandemic, provide relief to the American people and make critical 
investments that will help the economy grow. To avoid doing that would 
run the risk of causing greater long-term fiscal damage. So, I agree 
that the long-term fiscal trajectory is a cause for continuous focus 
and attention, but I believe addressing that issue over the long term 
requires first taking sufficient and appropriate action to take on the 
pandemic and address the current economic crisis.

    Question. As we know, the American Rescue Plan also includes $400 
per week in enhanced unemployment benefits. However, this $1.9 trillion 
package seemingly skips over the opportunity to pair this with 
incentives for workers to build skills during this time. Such 
incentives allow workers to combat skill atrophy and re-enter the 
workplace from a more competitive place. The Skills Renewal Act, which 
I joined Senators Sasse and Klobuchar in introducing last year, would 
resolve this issue by creating a new, targeted credit for skills 
building.

    Are you supportive of incentives to drive skills building and 
economic mobility, and do you believe concepts like this should be 
included in future COVID relief packages?

    If confirmed, will you commit to working with me to achieve greater 
incentives for skills building, in particular for low-income Americans?

    Answer. I believe that alongside efforts to provide financial 
relief and assistance to the unemployed and to struggling households, 
there is an important role for building skills and providing new 
opportunities for upward mobility. As we develop legislation to respond 
to the immediate crisis and build a strong recovery I would--if 
confirmed--welcome the opportunity to work with you to improve 
opportunities for skills building that can provide existing workers and 
the unemployed paths to higher-paying jobs.

    Question. The American Rescue Plan would also increase the Federal 
minimum wage to $15 an hour. In July of 2019, the CBO released a report 
finding that raising the Federal minimum wage to $15 an hour could 
cause up to 3.7 million people to lose their jobs. In particular, the 
consequences will be especially brutal for small businesses, which 
already operate within razor-thin budget margins.

    Taking into account the plethora of other forms of direct 
assistance provided in this $1.9 package, was there any consideration 
for a more moderate figure or delaying when this would go into effect?

    Was there any consideration given for how this would harm small 
businesses, which employ nearly half of all Americans and which have 
already suffered a 32-percent reduction in revenues because of the 
pandemic?

    Answer. The proposal to raise the minimum wage seeks to address the 
imbalanced nature of the recovery and will benefit millions of 
essential workers. I believe the workers who have risked their health 
to provide necessary services to American households should be paid a 
wage that allows them to afford basic necessities like food and rent.

    The minimum wage increase would be phased in over time, giving 
small businesses plenty of time to adapt. This increase would also 
unlock billions of dollars of consumer spending that would fuel demand 
for the essential goods and services small businesses provide. With 
more revenue, small business owners could pay their employees higher 
wages--which will increase productivity and retention--and invest in 
new equipment, expand their operations, and grow their business.

    Question. As you may know, my home State of South Carolina is a 
manufacturing powerhouse and a leader in trade. Under the Trump 
administration, and prior to the pandemic, we saw 1.2 million new 
manufacturing and construction jobs created here in the U.S., thanks to 
the pro-growth policies we put in place. Yet the ongoing trade wars 
have undoubtedly also restricted the ability for firms to experience 
greater growth and expansion. One thing I continue hear from my 
constituents is, ``when are the tariffs going away?''

    Your predecessor, Secretary Mnuchin, was very active in negotiating 
the China Phase One deal as well as other measures related to tariffs. 
If confirmed, how will you address the continued use of tariffs?

    Answer. President Biden will review all aspects of the Trump 
administration's trade policies toward China, including how completely 
Beijing has lived up to the terms of the Phase One agreement negotiated 
with the Trump administration. As part of his review, the President 
will consult with allies to galvanize collective pressure on China and 
support American workers and businesses.

    Question. What kinds of monetary, fiscal, and tax policies do you 
believe would most help improve the lives of those who work in our 
manufacturing sector?

    Answer. America needs a stronger, more resilient domestic supply 
chain in a number of areas supporting domestic innovation, U.S. jobs, 
and national security. President Biden is calling for new incentives to 
spur domestic production of critical products in the United States. 
This will include new targeted financial incentives, including tax 
credits, investments, matching funds for State and local incentives, 
R&D support, and other incentives to encourage the production of 
designated critical materials such as semiconductors in the United 
States. He is also calling for the U.S. to close supply chain 
vulnerabilities across a range of critical products on which the U.S. 
is dangerously dependent on foreign suppliers.

    Question. What in your view are the most important policies you 
would pursue as Treasury Secretary to promote an innovative and 
competitive manufacturing sector?

    Answer. There is a wide array of policies that can help improve the 
strength of American manufacturers. This includes reforming and 
eliminating harmful tax policies which reward offshoring and penalize 
U.S. companies for manufacturing within U.S. borders, including some of 
the international tax reforms enacted as part of the Tax Cuts and Jobs 
Acts. In addition, government procurement can prioritize products made 
by American companies employing American workers, as in the policy laid 
out by President Biden during the campaign which promised to shift 
critical supply chains back to the U.S. through expanded procurement 
purchasing power. Empowering domestic manufacturers also includes 
pursuing innovative policies, like the Manufacturing Extension 
Partnership, which provides technical assistance to small 
manufacturers. Lastly, like all small businesses, American 
manufacturers benefit from accessible and affordable access to capital 
to grow and expand their businesses, and, if confirmed, I would 
prioritize policies that provide much-needed capital to aspiring 
entrepreneurs.

    Question. As you know, I have a professional insurance background 
from my time before Congress as a small business owner serving policy-
holders that are now my constituents. I believe that the International 
Capital Standard (ICS) framework as proposed would negatively impact 
the U.S. insurance market and its consumers, specifically as it relates 
to long-duration products like annuities that fill a critical need for 
South Carolinians who depend on these fixed-income products to support 
themselves during retirement. The ICS would increase the costs 
associated with offering these long-term products and make them less 
readily available. Furthermore, the ICS would negatively impact the 
ability of U.S. insurers to bring new and more affordable products to 
market that fulfill the growing and changing financial needs of 
everyday Americans.

    The European regulators that have dominated this process thus far 
oversee markets with much different conditions than ours here at home. 
They lack the State guarantee funds we have to protect consumers in the 
event of an insurer default or insolvency. They lack a robust private-
sector retirement product market like the one we have. We should reject 
foreign rules of the road when they pose a threat to the prosperity and 
well-being of the American consumer.As a member of ``Team USA,'' the 
Treasury Department has advocated for the recognition of our 
policyholder-centric, State-based U.S. insurance regulatory system by 
the International Association of Insurance Supervisors (IAIS). It is 
imperative that the U.S. regulatory capital framework is recognized 
internationally so that American consumers and insurers are not 
adversely affected by the application of an ICS that was clearly not 
designed to meet our needs.

    Will you be a strong voice as Treasury Secretary to advocate 
internationally for the recognition of the U.S. insurance regulatory 
capital framework? If so, how specifically?

    Related to regulatory capital, the IAIS is in the second year of a 
5-year monitoring period that will end in a decision as to whether the 
Aggregation Method (AM), which leverages the results of our existing 
regulatory capital framework, produces comparable outcomes to the ICS. 
The Treasury Department's Federal Insurance Office plans to complete a 
study of the impacts that ICS adoption will have on the U.S. consumers, 
insurers, and insurance markets. Under your direction, how would FIO 
plan to use the study and its results in order to support the 
assessment that the AM and ICS produce comparable outcomes?

    Answer. It is critical that international regulatory standards are 
designed to serve different markets with diverse structures and needs. 
When it comes to the U.S., this means respecting our system of market-
based insurance provision and State-based insurance regulation. I am 
committed to engaging with international bodies like FSB and IAIS to 
achieve regulatory outcomes consistent with the interests of American 
market participants and State-based regulators, and I will continue the 
Federal Insurance Office's efforts to study the effects of ICS on U.S. 
insurance markets. I look forward to studying this issue further and 
incorporating this research into my approach to advocating on behalf of 
U.S. insurers and State regulators, if confirmed.

    Question. It has now been over 11 years since the government bailed 
out Fannie Mae and Freddie Mac and placed the institutions into 
conservatorship. Under the Trump administration, former Treasury 
Secretary Mnuchin and former HUD Secretary Carson, in consultation with 
FHFA Director Calabria, developed a plan for administrative and 
legislative reform of the Federal housing finance system. While those 
reformative actions have been a positive step forward, the GSEs are 
still more highly leveraged then they were before the financial crisis 
and taxpayers remain on the hook in the event of the next market 
downturn. I remain strongly committed to comprehensive reform of our 
housing finance system by Congress and look forward to working with 
Ranking Member Toomey and Treasury on this issue.

    In your view, what role should the government play in providing an 
explicit backstop to the GSEs?

    If confirmed, how will you work with FHFA to address housing policy 
and build on the achievements of this administration in the near-term?

    Answer. You raise important questions about the housing finance 
system. We need a system that promotes financial stability, protects 
consumers and taxpayers, and provides stability and affordability to 
households. A core feature of the U.S. housing finance system is the 
30-year fixed rate mortgage. I look forward to working across the 
administration and with the Congress in support of these goals, if 
confirmed. Treasury's support for Fannie Mae and Freddie Mac as set 
forth in the Preferred Stock Purchase Agreements has been crucial to 
providing stability throughout the conservatorship. I look forward to 
carefully reviewing the recent changes reflected in the agreements.

    Question. During your tenure at the Federal Reserve, you were 
intimately involved in systemic risk regulation and have significant 
experience on FSOC. I was especially pleased by your recent exchange 
with Senator Toomey during Tuesday's hearing in which you indicated 
that you are supportive of FSOC emphasizing an activities-based 
approach to systemic risk instead of favoring designating individual 
entities as systemically important.

    Should FSOC be required to follow a transparent framework for 
designating individual entities as systemically important after it 
exhausts all other alternatives?

    Answer. As you know, the key tenant of the FSOC is to coordinate 
among regulators so that significant risks to our economy do not go 
unaddressed because they do not fall wholly into the purview of one 
regulator's jurisdiction. My view is that the FSOC should address risks 
whatever their origin. But our focus must remain on stability in our 
financial system and ensuring that we are prepared to mitigate market 
disruption in times of stress.

    I understand that the legal landscape has shifted somewhat since 
the Obama administration, but I believe the FSOC should have the tools 
to protect our economy from systemic threats, whether they're presented 
by a single firm or risky actions by an array of firms. I understand 
this is an important issue, and if I have the honor of being confirmed, 
I look forward to working with you as we refine our process for 
activities-based approach.

    Question. As you may know, last year 3.2 million baby boomers 
retired, effectively doubling the amount of retirees from 2019, 
according to the Department of Labor.

    As America's aging population grows, what is your approach to 
ensuring a secure retirement, especially for our most vulnerable 
populations?

    Answer. Having a strong Social Security program is essential in 
order to ensure a secure retirement for all Americans, especially for 
our most vulnerable populations. President Biden has called for a 
Social Security reform package that would boost benefits for vulnerable 
beneficiaries--including widows and widowers, workers with low lifetime 
incomes, and older beneficiaries--and provide an across-the-board 
increase for all beneficiaries. The plan also improves the long-run 
fiscal position of the Social Security Trust Fund by asking wealthy 
taxpayers to pay the same rate on their income as other workers. I look 
forward to working with Congress to ensure the strength of the Social 
Security program for decades to come without burdening middle-class 
taxpayers, if confirmed.

    In addition, President Biden is committed to reforming the tax 
benefits associated with individual retirement saving so that all 
Americans are supported in their efforts to save for retirement. I look 
forward to studying this issue further, as building wealth for the 
middle-class and closing racial wealth gaps is a top imperative for 
this administration. Finally, older workers have experienced enormous 
job loss in our current recession. Helping older workers who were not 
yet ready to retire return to work is an essential part of ensuring 
that they will be prepared for retirement.

                Question Submitted by Hon. Bill Cassidy
    Question. In the Consolidated Appropriations Act of 2020, Pub. L. 
116-93, I was able to secure funds for the Financial Crimes Enforcement 
Network (FinCEN) to contract with an external vendor to thoroughly 
assess the risk that Trade-Based Money Laundering (TBML) and other 
forms of illicit finance pose to our national security.\7\
---------------------------------------------------------------------------
    \7\ See H. Comm. Prt. 38-678, at 635 (2019), available at: https://
www.govinfo.gov/content/pkg/CPRT-116HPRT38678/pdf/CPRT-
116HPRT38678.pdf.

    The inclusion of this funding stemmed from the FY2020 Financial 
Services and General Government Appropriations Act.\8\ Further detail 
on the study is provided here:
---------------------------------------------------------------------------
    \8\ S. 2524, 116th Cong. (2019).

        Trade-Based Money Laundering.--The United States has robust 
        anti-money laundering and counter-terrorist financing 
        regulations in place, yet transnational criminal organizations 
        and terror organizations continue to fund their illicit 
        operations. Rather than utilizing the formal financial system, 
        many of these entities fund their organizations and operations 
        through the use of trade transactions, known as trade-based 
        money laundering (TBML). TBML disguises proceeds of crime by 
        moving value through trade transactions. It is very hard to 
        identify and investigate, which is why the use of trade to 
        launder money has become such an attractive option to criminal 
---------------------------------------------------------------------------
        and terrorist organizations.

        The Federal Government achieves an impressive level of success 
        in identifying, investigating, and prosecuting money laundering 
        offenses that occur through the formal financial system, yet 
        TBML has been a challenge for U.S. agencies given the fluid 
        nature of trade. Given that criminal and terrorist 
        organizations use trade to finance their operations, it is 
        necessary for the United States to understand the full breadth 
        of risks posed by trade-based money laundering and other forms 
        of illicit finance.

        The committee recommendation includes $2,000,000 for FinCEN to 
        contract with an external vendor that will thoroughly assess 
        the risk that TBML and other forms of illicit finance pose to 
        our national security.\9\
---------------------------------------------------------------------------
    \9\ S. Rep. No. 116-111, at 19 (2019), available at: https://
www.appropriations.senate.gov/imo/media/doc/
FY2020%20FSGG%20Appropriations%20Act,%20Report%20116-111.pdf.

    Combating TBML is a top legislative priority of mine, and I am 
eagerly awaiting the results of the aforementioned study. Please 
provide me with an update on the status of the study. When do you 
anticipate completion of the study? Will you ensure that the study is a 
priority and that I receive monthly updates on its status until it is 
---------------------------------------------------------------------------
completed?

    Answer. I agree that Trade-Based Money Laundering is a serious 
concern. If confirmed, I will promptly look into the status of the 
report and provide periodic updates to your office.

                                 ______
                                 
               Questions Submitted by Hon. James Lankford
                                  tax
    Question. In your appearance before the Senate Finance Committee on 
January 19, 2021, you made clear that recovering from the pandemic 
would be the first priority for the incoming Biden administration. You 
reiterated the need for the U.S. to be competitive and that we must 
encourage growth here at home. However, we also know that the incoming 
Biden administration has proposed increasing the corporate tax rate, 
reversing pieces of the Tax Cuts and Jobs Act, increasing the minimum 
wage, and imposing new regulations.

    Can you confirm that tax increases will not be imposed while the 
economy and American businesses are still recovering from the pandemic?

    Answer. If confirmed, my immediate priority would be taking the 
steps we need to address the current crisis--getting the pandemic under 
control, providing relief to struggling families and businesses, and 
supporting the communities that have been hardest hit. The American 
Rescue Plan that President Biden released reflects that focus, through 
measures that support the public health response and offer economic 
support to households. As I said in my testimony, in addition to this 
immediate relief, the President also intends to pursue measures that 
support a stronger economy over the longer term, and in that context, 
there will likely be opportunities to help pay for permanent 
investments through measures that close loopholes and ask the wealthy 
to pay their fair share.

    Question. I am concerned about any tax increases on our small 
businesses, especially in the wake of a global pandemic. In response to 
questions from my colleagues, you've said the ``focus is on providing 
relief, and on helping families and not on raising taxes,'' and that 
the administration would push for tax increases ``longer-term.''

    When is longer-term and what economic signals will you be watching 
for before recommending a tax increase?

    Answer. As I noted in my testimony, our first task is to provide 
immediate support to the economy by combating the pandemic, providing 
relief to families and businesses, and supporting hard-hit communities. 
In offering the American Rescue Plan, President Biden proposed an 
approach that would focus first on putting the Nation and its economy 
on a path out of this crisis. If confirmed, I would look forward to 
working with Congress to first pass these measures, and then to pursue 
policies that would build a stronger economy over the long term.
                           charitable giving
    Question. As you may know, Congress enacted a non-itemizer 
charitable deduction last year, allowing single filers to deduct up to 
$300 in cash gifts (up to $600 for joint filers) for charitable 
donations that they make. Recent data has shown an uptick in small 
gifts since enactment, and charitable giving numbers for 2020 are 
expected to be the highest on record. While there are many reasons that 
Americans give to charity, the data suggests that the charitable 
deduction, now available to those taking the standard deduction, could 
have some impact on this increase.

    Do you agree that tax incentives can encourage behavior, such as 
charitable giving, and that incentives like the charitable deduction 
should be available to all taxpayers?

    Answer. A robust economic literature has established that tax 
incentives can in many cases influence behavior. In the case of 
charitable giving, it is likely that a diverse confluence of factors 
contributed to observed trends in giving, including those related to 
tax incentives and demand for services provided by charities owing to 
the pandemic. As Treasury Secretary, I would be committed to studying 
the impact of changes in tax law--such as the expansion in tax benefits 
for charitable giving--and helping to advance reforms that would enable 
the tax code to achieve its desired objectives. Moreover, I am 
committed to a fair and progressive tax code and will study the impacts 
of making such benefits available to a wider swath of taxpayers.
                            social security
    Question. According to the 2020 Annual Report from the Board of 
Trustees of the Federal Old-Age and Survivors Insurance and Federal 
Disability Insurance Trust Funds, released on April 22, 2020, on a 
combined basis, the Old-Age and Survivors Insurance and Disability 
Insurance trust funds will be unable to pay full benefits beginning in 
2035. If confirmed, you would be Chairman of the Board of Trustees of 
the Social Security and Medicare trust funds and Managing Trustee.

    In that role as Chair, do you believe that it is imperative that we 
address the trust funds' shortfall sooner than later?

    Will you commit to working together to stabilize the long-term 
financial trajectory of the trust funds?

    Answer. While the last report of the Trustees (issued in April 
2020) found no material change in the solvency of Social Security 
relative to the prior year, this analysis was done for the pre-COVID 
period. COVID has accelerated the depletion of all major trust funds 
according to Congressional Budget Office projections released in 
September 2020. Strengthening Social Security is essential in order to 
ensure a secure retirement, especially for our most vulnerable 
populations. President Biden has called for a Social Security reform 
package that would boost benefits for vulnerable beneficiaries--
including widows/widowers, workers with low lifetime incomes, and older 
beneficiaries--and also provided an across-the-board increase for all 
beneficiaries. The plan also improves thelong-run fiscal position of 
the Social Security Trust Fund. It does this by asking wealthy 
taxpayers with more than $400,000 in wages to pay the same rate on 
their income as other workers. On the whole, President Biden's plan 
provides older Americans a more secure retirement. I look forward to 
working with Congress to shore up the Social Security program for 
decades to come without burdening middle-class taxpayers.
                                  occ
    Question. Is it your opinion that under the National Bank Act a 
Federal charter requires deposit taking intuitions to engage in the 
``business of banking''?

    Answer. You raise an important question about the legal 
interpretation of the National Bank Act by an independent Federal 
financial regulator, the Office of the Comptroller of the Currency. I 
respect the independence of the Comptroller of the Currency and I 
understand the importance of the question you are raising with respect 
to the OCC's interpretation of the National Bank Act. If confirmed as 
Treasury Secretary, I look forward to discussions with you on these 
important topics that have consequential implications for the future of 
banking and how we think about what banking is and should be.
                               sanctions
    Question. You mentioned in your testimony that you intend to 
conduct a review of all sanctions currently in place upon your 
confirmation to this position. If confirmed, you will inherit a broad 
portfolio of sanctions against Iran that have been enacted over the 
last 4 years.

    Do you intend to pursue sanctions relief with Iran, or will you 
continue exerting pressure in an effort to prevent Iran from securing 
nuclear weapons?

    What is your strategy to utilize these sanctions against Tehran for 
its nuclear enrichment activities? Do you intend to use the leverage 
these sanctions provide as a tool to secure concessions from the 
Iranian regime, and will you work with your interagency counterparts to 
pressure Iran to permanently suspend all uranium enrichment?

    Do you intend to build on these sanctions with additional measures 
that target Iran's illicit activities and support for international 
terrorism?

    Answer. With regard to the JCPOA, the Biden-Harris administration 
is committed to ensuring that Iran takes the appropriate steps to 
resume compliance with its nuclear commitments under the JCPOA. Iran 
will only enjoy sanctions relief if it complies with these nuclear 
constraints. Furthermore, if confirmed, I will coordinate with 
interagency partners on broader concerns with Iran and ensure that 
Treasury continues its important sanctions work to combat Iran's 
support for terrorism, abuse of human rights, and other illicit 
activities.
international development banks and multilateral financial institutions
    Question. The Secretary of the Treasury is the Governor of the 
United States at the World Bank, International Monetary Fund, and 
Inter-American Development Bank.

    Will you use the voice and vote of the United States to oppose 
loans to Iran and other state sponsors of terrorism by the IMF and 
World Bank?

    Answer. The Executive Directors will represent and vote consistent 
with the U.S. position and U.S. law at these institutions.

    Question. Will you use the voice and vote of the United States to 
oppose World Bank loans to countries such as China that have exceeded 
the graduation threshold of gross national per capita income?

    Answer. The Executive Directors will represent and vote consistent 
with the U.S. position and U.S. law at these institutions.

    Question. What is your strategy to leverage U.S. influence and to 
combat China's malign influence at these international financial 
institutions?

    Answer. The Biden administration will be willing to make use of the 
full array of tools to hold China accountable. Our approach to date has 
focused on a unilateral approach--and, as a result, could have been 
more effective. Going forward, we should strive to meet this important 
challenge by building a united front of U.S. allies and partners, 
including through multilateral institutions, to confront China's 
abusive behaviors.

    Question. China has increased its investments in Latin America as 
part of its Belt and Road Initiative. What is your strategy to utilize 
U.S. influence and leadership at the Inter-American Development Bank to 
provide an alternative to China's predatory lending to our friends in 
Latin America?

    Answer. Competition with China, in Latin America and elsewhere, is 
one of the central challenges of the 21st century--and we also need to 
compete with China's economic statecraft. The Biden-Harris 
administration will craft an alternative vision that promotes 
democratic governance and transparency in our global health and 
development work. We will distinguish ourselves from China's approach 
to development, including the Belt and Road Initiative, by ensuring 
that social and economic safeguards are built into the projects we 
support. We will focus on partnerships and on strengthening local 
capacity. In addition, we will work with allies and partners to 
advocate for the highest environmental, social, and labor standards to 
promote development investments that are both beneficial and 
sustainable over the long term.

    Question. How do you intend to approach Lebanon's request for 
emergency assistance from the International Monetary Fund? Will you use 
the voice and vote of the United States to deny Beirut's requests 
without clear, measurable commitments to public sector reforms and 
anti-corruption efforts?

    Answer. The Executive Directors will represent and vote consistent 
with the U.S. position and U.S. law at these institutions.

    Question. Will you oppose Special Drawing Rights (SDR) at the IMF 
for developing countries as a COVID relief measure if they will use 
some or all of the funds to pay back Belt and Road Initiative loans 
from China?

    Answer. It is important that the IMF and World Bank are doing what 
they can to ensure developing countries have the resources for public 
health and economic recovery. We should also do what we can to get the 
most vulnerable countries the debt relief they need at this critical 
time.

    I know that there are a variety of proposals out there. If 
confirmed, I will direct my team to analyze the full range of ways that 
the international community can strengthen its support for the most 
vulnerable countries during this emergency.

    The Biden-Harris administration is committed to ensuring that 
creditors providing debt relief to poor countries are transparent about 
their respective exposures and agree to receive comparable treatment.

    The imperative for disclosure and transparency is especially 
important for Chinese lenders. We will work together with allies, 
borrowing countries and multilateral institutions through the G20's new 
``Common Framework'' to ensure comparable creditor treatment as well as 
ensure that scarce resources meant to alleviate health and economic 
burdens on the world's poor are not simply used to repay China or 
private creditors.

                                 ______
                                 
                Questions Submitted by Hon. Steve Daines
    Question. Congress recently enacted legislation that would require 
small businesses to disclose information to the U.S. government about 
their beneficial ownership. The legislation, included in the National 
Defense Authorization Act, provides new authority to the Treasury 
Department to assist law enforcement with preventing criminal activity. 
I worry that this new authority could also unintentionally subject 
small businesses to new compliance costs and privacy issues.

    Will you commit to working with small businesses, and other 
stakeholders, to address their concerns as the requirements for 
disclosure of beneficial ownership information go into effect?

    Answer. I agree on the need for Federal banking agencies, including 
but not limited to FinCEN, to consult with the small business community 
when promulgating regulations, including on the promulgation of rules 
and guidance to implement the beneficial ownership reporting 
requirements. If confirmed, I will ensure that appropriate consultation 
occurs.

    Question. In Montana, we have tribal and rural populations across 
the State that feel neglected by their Federal Government, which tends 
to focus on the loudest voices in big cities.

    What will you do to make sure that tribal and rural interests in 
Montana and across America have their voices heard and reflected in 
Treasury's policies?

    Answer. If confirmed, I will focus closely on ensuring that 
Treasury activities are designed and performed in ways that attend to 
rural and tribal communities, including by ensuring that appropriate 
communication and resources are made available through our recovery 
efforts. Tribal Consultations are conducted through the Office of 
Economic Policy and the Treasury Tribal Advisory Committee and advise 
the Secretary on matters related to taxation and dispensing technical 
assistance to Native American financial institutions officers. As 
Secretary, if confirmed, I will ensure that these areas act in concert 
and are more impactful. I will also work to remove obstacles and work 
with Congress on potential solutions to increase impact efficiency 
because I recognize that this crisis has hit tribal communities 
particularly hard and we have to ensure that they are getting the 
assistance that they need.

    Question. China is rapidly innovating in the digital asset and 
financial technology space, beginning a pilot of a central bank digital 
currency in late 2020.

    What are your plans to ensure the United States remains a cutting-
edge leader in global financial services?

    What are some concrete steps you plan to take to promote 
responsible innovation at the Treasury, specifically at FinCEN, OFAC 
and the OCC?

    Answer. I believe the United States must be a leader in the digital 
asset and financial technology areas. This requires us to develop a 
regulatory framework that fosters innovation and promising new 
technologies while addressing legitimate concerns about the use of such 
technologies to finance terrorism and engage in other malign activities 
that threaten U.S. national security and pose risks to the financial 
system. I look forward to working with other Federal banking and 
securities agencies, the Federal Reserve, and Congress in developing 
and implementing such a framework.

    Question. Secretary Mnuchin issued proposed rules in December 2020 
that expands the reach of the Bank Secrecy Act (BSA) beyond its 
traditional scope as applied to digital assets, including, for the 
first time, customer counterparty requirements. Secretary Mnuchin did 
this without meaningful industry consultation and attempted to hold a 
truncated public comment period over the holidays. Will you pledge to 
revisit the scope of these rules to ensure adequate public comment and 
consistency with the past scope of the BSA?

    Answer. I am aware of the rules proposed by FinCEN in December 2020 
regarding how certain digital assets are treated under the Bank Secrecy 
Act. I agree on the need to ensure adequate consultation with and input 
from stakeholders If confirmed, I intend to ensure a full and 
substantive review of the proposals, which will include an assessment 
of how to ensure proper input from stakeholders.

    Question. Certain digital asset characteristics may require 
paradigm-shifts in BSA supervision, e.g., more use of digital asset 
analytics and other risk-based tools and less reliance on financial 
institution filings. This is especially important after the recent data 
breach at the Treasury.

    Are you open to considering new BSA approaches that may be more 
effective in the financial technology space?

    Answer. I agree that we need to look at BSA rules and oversight in 
light of the evolution of digital assets and other financial 
technologies. I understand that FinCEN in September 2020 issued an 
advance notice of proposed rulemaking regarding BSA reporting and other 
requirements, including the solicitation of comments on whether and how 
to use risk-based methodologies to improve anti-money laundering 
measures. I think the ANPRM is one means of soliciting and assessing 
whether risk-based approaches may be more effective, and I look forward 
to engaging with stakeholders to ensure that BSA reporting and 
oversight efforts are updated to address emerging risks and new means 
of promoting effective compliance.

    Question. President Biden has stated he will prioritize financial 
incentives for the private sector to develop and implement a range of 
technologies to create jobs while reducing carbon emissions. One very 
promising, vital technology is Carbon Capture, Utilization and 
Sequestration (CCUS). Congress enacted section 45Q of the Internal 
Revenue Code on a bipartisan basis, and Treasury just last week 
published final regulations to implement those tax credits. These 
regulations will provide more legal certainty than had been the case 
previously, and it appears these regulations have widespread approval 
among the various interests supporting CCUS development. However, there 
is more that Congress can do to expand the value of the existing 45Q 
credits, the duration of the credits, and the applicability of the 
credits in order to induce the kind of expeditious and large scale 
implementation of CCUS technology that would appear to underlie the 
Biden administration's aspirations.

    Can you please advise how you intend to facilitate the expanded use 
of the existing 45Q credits and whether the Biden administration will 
support efforts to expand the 45Q credit?

    Answer. Climate change is an existential threat and one of the 
dominant forces shaping the world and our economy. Meeting this 
challenge is an urgent need, and I am committed to doing whatever I can 
to address this impending crisis. Using the tax code to set incentives 
for businesses and individuals to adopt climate-friendly policies is a 
critical tool in this battle. President Biden has been supportive of 
CCUS and of tax incentives to increase its availability and 
affordability. If confirmed, I will support the President in developing 
and implementing his climate agenda and using the tools at my disposal 
to tackle the challenge of climate change.

                                 ______
                                 
                 Questions Submitted by Hon. Todd Young
    Question. As a response to the COVID-19 pandemic, last year 
Congress passed the two single largest relief packages in history. And 
just last week, President Biden proposed a nearly $2-trillion plan for 
further relief on top of his $5-trillion Build Back Better agenda.

    While I believe the Federal Government's response to the economic 
crisis so far was vital, I can't ignore the effect this level of 
spending has had on our national debt, which continues to spiral out of 
control.

    In testimony before the House last summer, you noted that despite 
the short-term importance of COVID relief, ``at some point, we will 
have to think through how to ensure the long-run sustainability of 
Federal finances.''

    As the national debt approaches $30 trillion, how important do you 
believe it is for us to immediately prioritize the fiscal health of the 
U.S. government once our economy has recovered?

    In FY 2020, the Federal budget deficit tripled from the previous 
fiscal year to over $3.1 trillion, largely in response to the pandemic. 
That being said, what realistic steps can be taken to slow or reverse 
course on this growing expansion of the Federal budget deficit?

    Answer. I believe that the current economic crisis calls for robust 
fiscal support, but also believe it is critical that we put our country 
on a path towards long-term fiscal sustainability. In this vein, I've 
called for more fiscal support since the early days of the pandemic and 
continue to do so. Without question, we have to be conscious of our 
debt, but it's clear that fiscal stimulus to support the economy and 
the working families most affected by the impact of COVID-19 is our 
most urgent priority.

    That being said, near-term fiscal support is not inconsistent with 
long-term fiscal sustainability, and the Biden administration will 
formulate policies to address these long-term fiscal concerns. During 
the presidential campaign, President Biden called for a series of 
offsets to pay for his permanent spending programs, proposed a Social 
Security reform package that would extend Social Security's solvency 
date, and introduced several health reforms that would bend the growth 
in health costs. Combined, these policies--coupled with pro-growth 
investments across the budget--will help drive down the debt relative 
to the size of the economy.

    Question. A number of my colleagues have rightly asked you about 
the fiscal emergency that is our national debt. While I understand your 
concern to prioritize economic recovery in the immediate term, I was 
hoping to further understand your views on the contours of this crisis.

    In your response to Senator Thune's question during the hearing 
regarding the danger of interest rates creeping back up if U.S. debt 
becomes a riskier investment, you noted that developed economies have 
experienced an environment of low interest rates since before the 2008 
financial crisis. Further, you referred to certain ``structural 
shifts'' in those economies that will help to ensure the interest 
burden of our debt will remain steady as a percent of GDP.

    Could you please expand on what these structural shifts have been 
and how they have contributed to the ongoing low interest rates in the 
developed world?

    Considering the magnitude of the problem if interest rates did go 
up, what factors would you look for that may indicate rates are likely 
to rise?

    Answer. There has been a shift in economic thinking quantifying the 
costs of rising debt. This shift in the projected link between debt and 
interest rates is driven by a complex and changing set of 
circumstances, including widely available capital for lending, enduring 
faith in the credit of the United States government, monetary decisions 
by the Federal Reserve, and the relative appeal of non-interest bearing 
assets. Naturally, these rates could experience a rise for a host of 
reasons. As Treasury Secretary, it would be incumbent upon me to 
closely monitor these factors and consult with the President and Vice 
President on the economic consequences of the trajectory of interest 
rates.

    Question. The Federal Reserve's emergency lending facilities that 
were created by the CARES Act were allowed to expire at the end of 
2020, with only a few seeing short-term extensions. Compared to 
programs administered by the SBA, these programs saw a slow rollout and 
reduced impact.

    Do you believe the Federal Reserve should play a central role in 
further support for small and medium-sized businesses?

    If so, are there any lending facilities in particular that you 
would be interested in reviving?

    Answer. The country is currently facing an unprecedented pandemic 
that has exposed economic inequalities rooted in our system for 
generations. I believe that it is imperative that the government does 
its part to catalyze an economic recovery that is both equitable and 
sustainable, and supports policies that pursue these outcomes. Treasury 
will look to quickly and effectively implement the programs and support 
passed by Congress at the end of this past year. It will be critical to 
provide support to small businesses and individuals that are still 
struggling to make it through the crisis. The Federal Reserve will 
continue to provide support to the economy through its ongoing programs 
and the use of its available tools but as mandated by Congress, the 
13(3) facilities funded by the CARES Act will not be available.

    Right now, taking too little action poses the greatest risk to the 
health of our economy, the livelihoods of the American people who drive 
that economy, and future generations. I support, and will help the 
administration to pursue actions that provide aid to fully distribute 
the vaccine, reopen schools, deliver badly needed aid to State and 
local governments, support small business owners--and most importantly 
get people back to work. If I'm confirmed, I will look forward to 
working with your office and others in Congress to help to ensure that 
this additional support particularly gets to the small and mid-sized 
businesses that have been hardest hit during the crisis.

    Question. On June 5, 2020, the United States Trade Representative 
(USTR) announced an investigation into the Digital Services Tax (DST) 
being implemented by several countries, expanding on the USTR's 
existing investigation into France's DST. Earlier this month, the USTR 
announced a suspension of planned retaliatory tariffs against France, a 
country that is set to raise almost $500 million from U.S. tech firms.

    Absent an international agreement regarding the DST issue, how do 
you believe the United States should respond to the unilateral 
implementation of such taxes by other nations?

    Answer. If confirmed, I will be strongly supportive of and firmly 
committed to cooperative multilateral efforts to work to resolve the 
DST disputes. If such disputes were not resolvable through 
international negotiations, I would work with the United States Trade 
Representative to determine our best alternative course of action.

    Question. President Biden has made it clear that he would like to 
roll back many of the tax reforms achieved through the Tax Cut and Jobs 
Act of 2018 and implement a sweeping list of new tax increases.

    While the revenue raised by his plan is estimated to pay for just 
under half of his proposed spending, analysis from the Tax Foundation 
and others indicate the long-term economic effect of this plan will 
reduce GDP by around 1.5 percent and eliminate some 500,000 jobs. In 
addition, as we discussed during the hearing, President Biden's 
proposal to increase the corporate tax rate would incentivize corporate 
inversion, further reducing the tax base. I have grave concerns about 
President Biden's plans.

    What is your agenda for tax policy if confirmed as Treasury 
Secretary? What will you prioritize in the first year? What are your 
long-term goals?

    Answer. Our Nation is facing unprecedented challenges. As we 
rebuild, we must pursue policies that promote equitable growth and 
restore American competitiveness. We must create an economy that works 
for everyone. I am intent on helping this administration build a 
sustainable and durable economy that is built on a foundation that 
prioritizes equity and inclusivity. President Biden and I believe that 
this economic recovery must be one that focuses on individuals and 
families and rewards hard work. These values must be reflected in our 
tax system as well. We recognize that our tax system cannot be tilted 
toward corporate interests and the wealthy, while those that are 
sustained predominately by wages bear an unequal burden. Biden will 
require corporations and the wealthiest Americans to pay their fair 
share.

    In the short term, the emergency legislative package the President 
proposed last week included additional economic impact payments and 
expanded refundable credits. During the campaign, President Biden made 
longer-term proposals that included an increase in the corporate tax 
rate, reforms to ensure robust taxation of foreign profits, and 
requiring that families that make more than $1 million pay the same tax 
rate on their investment income that they do on their wages. I look 
forward to consulting with and working with Congress in both the short 
and long term to enact these proposals into law.

    Question. How would you prevent corporations from moving their 
profits overseas in order to avoid the increased taxes proposed by 
President Biden?

    Answer. I appreciate your concern with preventing profit-shifting 
and inversion transactions. President Biden has proposed reforms to the 
tax on global intangible low-taxed income (GILTI) that would ensure 
appropriate taxation of corporations' foreign profits alongside a 
higher statutory corporate rate. These changes to the tax on GILTI 
would discourage profit shifting abroad. In addition, a global minimum 
tax agreed to at the OECD would stop the destructive global race to the 
bottom on corporate taxation. A multilateral agreement along these 
lines would thus further discourage profit shifting and base erosion.

    Question. Bitcoin and other digital and cryptocurrencies are 
providing financial transactions around the globe. Like many 
technological developments, this offers potential benefits for the U.S. 
and our allies.

    At the same time, it also presents opportunities for States and 
non-state actors looking to circumvent the current financial system and 
undermine American interests. For example, the Central Bank of China 
just issued its first digital currency.

    What do you view as the potential threats and benefits these 
innovations and technologies will have on U.S. national security? Do 
you think more needs to be done to ensure we have appropriate 
safeguards and regulations for digital and cryptocurrencies in place?

    Answer. I think it important we consider the benefits of 
cryptocurrencies and other digital assets, and the potential they have 
to improve the efficiency of the financial system. At the same time, we 
know they can be used to finance terrorism, facilitate money 
laundering, and support malign activities that threaten U.S. national 
security interests and the integrity of the U.S. and international 
financial systems. I think we need to look closely at how to encourage 
their use for legitimate activities while curtailing their use for 
malign and illegal activities. If confirmed, I intend to work closely 
with the Federal Reserve Board and the other Federal banking and 
securities regulators on how to implement an effective regulatory 
framework for these and other fintech innovations.

    Question. Over a dozen countries have now issued sovereign bonds 
with ultra-long-term maturity rates as long as 100 years. Some analysts 
have suggested the issuance of longer-term, lower-interest debt 
instruments here in the U.S. might have a positive effect on our 
national debt given the low interest rate environment.

    While interest rates are low and knowing that our national debt is 
an ever-
growing problem, what are your thoughts on these so-called ``century 
bonds,'' and is this an issue the Treasury Department might revisit if 
you are confirmed?

    Answer. President Biden is committed to fiscal responsibility and 
making sure that what we do now leaves future generations better off. 
The most important thing we can do today to set us on a path to fiscal 
sustainability is defeat the pandemic, provide relief to the American 
people, and make long-term investments that will grow the economy and 
benefit future generations. Today, the demand for existing Treasury 
instruments remains robust and is sufficient to meet US financing 
needs. Introducing new, ultra-long-term instruments would add new 
complexities to this market and deserves further study in light of the 
many factors that determine U.S. Treasury market policy.

    Question. As a part of the Build Back Better agenda, President 
Biden has called for Federal investment in American research and 
development in order to counter China's push for technological 
dominance in the 21st century. Out of similar concerns, last year I 
introduced the Endless Frontier Act with Senator Schumer, which would 
increase Federal R&D spending, bring emerging technologies to the 
marketplace more quickly, and ensure the Federal Government's efforts 
reflected the importance of technology innovation in the decades to 
come.

    Do you agree that the U.S. is at risk of losing our technological 
leadership in the world? If so, what role do you believe the Treasury 
Department can play in contributing to a robust foundation for 
innovative research in emerging technologies across the United States?

    Answer. The U.S. has long been a technological leader on the global 
stage. Maintaining this leadership position requires continued 
investment in areas like research, technical assistance, education, and 
worker training--while also protecting intellectual property developed 
within our borders. The Biden administration has enthusiastically 
endorsed all of these strategies, and as Treasury Secretary I would be 
committed to finding the most effective ways to implement them. Indeed, 
the Treasury Department is a focal point on many issues relating to 
global competitiveness, ranging from tax policies that encourage 
investment in research to implementing policies to ensure free and fair 
trade with our competitors. If we embrace the strategies outlined by 
President Biden during the campaign, I believe we will maintain our 
position as a technological leader.

    Question. We were facing a housing affordability crisis well before 
the pandemic, but COVID-19 has only exacerbated it. My colleague 
Senator Cantwell and I successfully fought for inclusion in the 
December 2020 COVID relief package a permanent minimum 4 percent credit 
rate for the Low-Income Housing Tax Credit (LIHTC). As you may know, 
LIHTC is a model public-private partnership that is responsible for 
virtually all of the affordable rental housing in our country built 
over the past 3 decades. This provision was part of Senator Cantwell's 
and my Affordable Housing Credit Improvement Act legislation, which 
would also increase the annual credit allocation, lower the ``50-
percent test'' bond-financing threshold to protect the financial 
viability of projects that utilize Private Activity Bonds (PABs), and 
institute basis boosts to enhance projects focused on serving extremely 
low-income and formerly homeless households and rural and tribal 
communities.

    Will you support further legislative measures to strengthen and 
improve LIHTC?

    Answer. I am grateful for your leadership in expanding housing 
affordability through the Low-Income Housing Tax Credit and supportive 
of your work. The measure that Congress enacted through your leadership 
is a critically important initiative that will help to make the LIHTC 
more effective and to increase housing affordability across the 
country. If I am privileged to be confirmed as Treasury Secretary, I 
would be honored to work with you on additional measures to strengthen 
and improve the LIHTC.

                                 ______
                                 
                 Questions Submitted by Hon. Ben Sasse
    Question. Could you please expand on your answer to my question 
about how you would approach a review of our technological 
interdependence with China and clarify whether or not you believe that 
some degree of decoupling from China will be required in the next 4 
years? Beyond investing more at home in manufacturing, infrastructure, 
and R&D sectors, what are the most effective coercive economic tools at 
Treasury's disposal to both encourage decoupling from China and to 
punitively address China's most egregious trade practices?

    Answer. We need a comprehensive strategy and a more systematic 
approach that actually addresses the full range of these issues, rather 
than the piecemeal approach of the past few years. We have to play a 
better defense, which must include holding China accountable for its 
unfair and illegal practices and making sure that American technologies 
are not facilitating China's military buildup, human rights abuses, or 
other malign activities. The Biden administration will be willing to 
make use of the full array of tools to counter China's abusive 
practices and hold Beijing accountable. We also have to play a much 
better offense, by investing in the sources of our technological 
strength.

    Question. In my opinion, Huawei is the textbook example of the 
supply chain problem the United States and the freedom-loving world 
faces with continued technological linkages with the CCP. The CCP's 
tech puppet with known security flaws cornered the international market 
for critical technology by using stolen IP and massive State subsidies. 
Can you use 5G and Huawei as a case study to reflect on how you think 
decoupling is unfolding in the 5G space and how it should, or should 
not, serve as a model for broader technological decoupling from China 
policy action?

    Answer. President Biden is firmly committed to making sure that 
Chinese companies cannot misappropriate and misuse American 
technology--and to ensuring that U.S. technology does not support 
China's malign activities. I am not in a position to comment on 
specific regulatory actions, but I can assure that we intend to review 
these issues carefully and will be committed to protecting U.S. 
national security and America's technological edge.

    Question. Can you please describe the CCP's military-civil fusion 
policy?

    Answer. This is a very important matter. If confirmed, I will 
closely review the Treasury Department's role in responding to China's 
civil-military fusion policy

    Question. Do you support Chinese companies having access to U.S. 
capital markets when these companies are neither as transparent as they 
should be or have known links to the Chinese military?

    Answer. We need to address the challenges that China poses to our 
national security and economy. I agree that transparency and disclosure 
is critical to our capital markets. This is part of the reason why our 
capital markets remain the deepest and most liquid in the world. I look 
forward to working with regulators and my colleagues within the Biden 
administration to ensure that companies listed in the U.S. follow the 
law.

    Question. Do you support sanctions and prohibitions on American 
companies and financial instruments investing in Chinese entities with 
close ties to the Chinese military?

    Answer. As with many policy actions taken by the previous 
administration, the Biden-Harris administration will undertake a 
rigorous review to determine the appropriate policy response.

    Question. Will you support the continued implementation of the 
November 12, 2020 E.O. prohibiting U.S. individual investors from 
investing in Chinese military companies and their subsidiaries, as 
defined by the DOD and placed on a public list authorized by section 
237 of the 1999 NDAA (the so-called Pentagon PLA list)?

    Answer. As with many policy actions taken by the previous 
administration, the Biden-Harris administration will undertake a 
rigorous review to determine the appropriate policy response.

    Question. What economic tools are most effective to address the 
following: the endemic corruption in the Chinese Communist Party, the 
Party's ongoing genocide of Uyghurs in Xinjiang, and the crackdown on 
the pro-democracy movement in Hong Kong?

    Will you commit to having Treasury lead a campaign of sanctions, 
investment restrictions, and whatever coercive economic measures are 
appropriate to hold the Chinese Communist Party accountable for 
corruption and human rights abuses in China?

    What sanctions would you advocate to the President to impose if the 
PRC took military action against Taiwan?

    Answer. I am committed to working in collaboration with my 
colleagues across the Biden administration to hold China accountable 
for its violation of international law. The Treasury Department has an 
array of tools at its disposal that can and should be effectively 
deployed to address these challenges.

    Question. I read with interest some recent comments you made at the 
Asian Financial forum. I believe you commented in part that the 
agreement we will sign this week falls short in part because it leaves 
in place substantial tariffs. As a follow-on, I'd like to ask you the 
following. If it were the case that both China and the United States 
were suddenly to eliminate every bilateral tariff applicable to 
transactions in goods and services and we were to eliminate every non-
tariff barrier to trade, would you expect the CCP to abandon:

    Its pervasive practices of requiring IP transfers as an explicit or 
implicit contract term;

    Its systematic and strategic harvesting of digital data from 
parties that consume digital services as a condition of commercial 
relationships and contracts concluded with Chinese firms;

    Its domestic law that eliminates the legal barrier between ``state-
owned'' and ``private'' firms domiciled in mainland China?

    Doesn't it follow that a narrow consideration of relative tariff 
levels or other barriers to trade that act as taxes on commercial 
exchanges cannot fully capture the economics of trade between the U.S. 
and China?

    Answer. China is America's most serious economic competitor. 
Strategic competition with China is a defining feature of the 21st 
century. China poses challenges to our security, prosperity, and 
values. China is engaged in conduct that hurts American workers, blunts 
our technological edge, and threatens our alliances and our influence 
in international organizations. Winning the economic competition with 
China requires us to make transformative investments at home in 
American workers, infrastructure, education, and innovation. We cannot 
maintain our edge over the long term unless we run faster at home. As 
President Biden has said, we need to be far more effective in 
galvanizing allies to join with us to push back on unfair Chinese 
practices that threaten U.S. values and interests. And we will be 
willing to make use of the full array of tools to counter China's 
abusive economic practices and hold Beijing accountable. In all of 
these areas, we look forward to working with you and with others in 
Congress to take on the China challenge.

    Question. Is the PRC a market economy? Has it fulfilled its 
commitments under accession protocols to the WTO?

    Should the U.S. and other market economies continue to grant the 
PRC the benefits of being a market economy in the WTO while they have 
not fulfilled their commitment after two decades?

    Do you think China provides illegal subsidies or support to its 
tech champions?

    Answer. The economic dimension of U.S.-China competition is 
crucial. And we will take on the challenge of China's abusive, unfair, 
and illegal practices. China is undercutting American companies by 
dumping products, erecting barriers, and giving illegal subsidies to 
corporations. It is stealing intellectual property and engaging in 
other practices to give it an unfair technological advantage, including 
forced technology transfer.

    Question. At present, our Federal debt-to-GDP ratio is higher than 
at any time in our Nation's history. The ballooning debt is 
attributable partly to the COVID pandemic but also to years of 
Washington's ever-increasing spending habits. The cost of servicing 
that debt is currently low due to investor wariness and the dollar's 
dominance as the world's reserve currency. However, despite what modern 
monetary theorists may claim, irresponsible borrowing cannot remain 
consequence-free forever.

    Once the economy and investor confidence rebounds, what would be 
the effect on our ability to service rising debt if the dollar's 
dominance as the reserve currency was to weaken and interest rates rose 
accordingly?

    Answer. There are several reasons that the U.S. dollar is the 
world's dominant reserve currency. The United States has the largest 
economy, and the deepest and most liquid capital markets. We are 
committed to maintaining a sound economy and confidence in our 
financial system. The Biden-Harris administration will make investments 
in the American people that will accelerate the U.S. economic recovery 
and lay the foundation for a strong and equitable U.S. economy in the 
years ahead. The world can be certain that the United States will not 
seek a weaker currency to gain competitive advantage.

    Question. Over the last 20 years the dollar's share of foreign bank 
reserves decreased by 10 percent. Hostile nations including Russia and 
China are seeking to exacerbate this trend by divesting their dollar 
reserves where possible and by developing new forms of international 
payment systems to circumvent reliance on the dollar; a proposition 
increasingly attractive to countries displeased with the United States' 
sanctions regime. These concerns are shared by some of our biggest 
financial stakeholders. Goldman Sachs issued a warning last year that 
``the dollar is in danger of losing its status as the world's reserve 
currency'' while JPMorgan noted that investors are starting to have 
``more confidence in the euro as an alternative.''

    What is your response to these concerns expressed by our financial 
institutions? What can, and should, the United States be doing to 
ensure the dominance of the dollar as the global reserve currency, not 
merely for the next 10 years, but for the next 50 years?

    The dollar currently accounts for about 60 percent of global 
currency reserves, down from 70 percent 20 years ago. Is this 
measurement of the dollar's percentage share of total global reserves 
the best indicator of the dollar's continued dominance as ``the world's 
currency''?

    If the percentage of global reserves is not the best indicator of 
the dollar's financial dominance, what is a better indicator?

    If the percentage of global reserves is the best indicator, then 
how would our continued ability to support our insatiable spending with 
cheaply borrowed money be affected if the dollar's global reserves were 
to decline further to 50 percent by 2030? How far can the dollar's 
share of global reserves fall before our borrowing ability is severely 
impacted?

    Answer. There are several reasons that the U.S. dollar is the 
world's dominant reserve currency. The United States has the largest 
economy, and the deepest and most liquid capital markets. We are 
committed to maintaining a sound economy and confidence in our 
financial system.

    Question. The Department of Treasury released the final regulations 
on section 199(a) for cooperatives and their patrons. This has been an 
issue over which the cooperative industry stakeholders have been 
actively engaged with Congress and the Treasury Department for some 
time. Nebraska has over 30 locally owned farmer cooperatives that serve 
approximately 60,000 farmers.

    I request that your team review the congressional action taken in 
the Consolidated Appropriations Act of 2018, review the comments 
submitted through the public record and review the final rule 
published. I would further ask you to conduct an economic analysis on 
the impact of the final rule on farmers and share this analysis with 
this committee.

    Answer. I appreciate the importance of this issue, and I look 
forward to working with Treasury staff to ensure that section 199A has 
been implemented fairly.

    Question. Do you feel the United States' trade deficit is a useful 
metric to evaluate trade with countries? What measurements of bilateral 
trade flows will be used in the Biden administration to negotiate, 
conclude and present bilateral or multilateral trade agreements to the 
Congress for consideration?

    Answer. The overall U.S. trade deficit, especially in manufactured 
goods, represents a challenge and an opportunity. If confirmed, I will 
work with President Biden to restore American manufacturing and the 
export strength that comes with it. Bilateral deficits can also be 
indicators of unfair trade practices, which I will vigorously oppose if 
confirmed. At the same time, bilateral trade deficits must be 
understood in the overall context of our trade relationship with each 
country, not as a single catch-all metric. If confirmed, I look forward 
to working with Congress to pursue a rules-based trading system that 
protects Americans from manipulative, anti-competitive practices, puts 
workers first, and assures that trade rules reward countries that meet 
rather than shirk their climate commitments.

    Question. What is your view on the Trump administration's decision 
to impose tariffs on China and the Phase One agreement between China 
and the United States?

    Answer. President Biden has said that he is not going to make any 
immediate moves on the current China tariffs but rather engage in a 
comprehensive review of all aspects of the Trump administration's trade 
policies toward China, including how completely Beijing has lived up to 
the terms of the Phase One agreement. As part of his review, he is 
going to consult with allies to galvanize collective pressure. We need 
an approach that actually brings meaningful pressure on China.

    Question. What advice will you provide to President Biden and the 
United States Trade Representative on currency manipulation in China, 
Vietnam, or other countries?

    Answer. The President has committed to opposing efforts by 
countries to artificially manipulate their currencies to gain an unfair 
trade advantage. I am supportive of that commitment and, if confirmed, 
will work in coordination with the administration to oppose any such 
efforts.

    Question. Taiwan is the United States 11th largest trading partner, 
with $76 billion in total goods exchanged during 2018. Taiwan has 
expressed a willingness to be a strong economic partner and has taken 
steps to removed barriers to agriculture goods. Do you agree that a 
trade agreement between the United States and Taiwan should be a 
priority and will you work with the United States Trade Representative 
to support a trading framework that is beneficial to promoting security 
and economic growth between the United States and Taiwan?

    Answer. President Biden has been clear that he will not sign any 
new free trade agreements before the U.S. makes major investments in 
American workers and our infrastructure. Our economic recovery at home 
must be our top priority. This does not mean that President Biden will 
not pursue a robust trade agenda. If confirmed, I will work with 
President Biden to reach out to our allies, rebuild bridges, and pursue 
trade agreements that support American prosperity and put workers 
first.

    Question. The decision to keep schools closed in many areas of the 
country has had more to do with politics than local coronavirus spread 
and too often science has been ignored in deciding how to best serve 
kids. I believe that by keeping schools closed we are kneecapping the 
next generation and hindering the ability of our economy to rebound. 
What is the economic cost of school closures, and how will this impact 
our ability to compete with Europe, Asia and the vast majority of the 
world that managed to keep schools open over the last year?

    Answer. I believe that the best way to get people back to work and 
open schools is to get the virus under control and to provide schools 
with the resources necessary to be able to safely open. President Biden 
has made a commitment to get the virus sufficiently under control and 
to safely reopen schools. No parent wants to choose between their 
child's safety and education or between their children's safety and 
their ability to work. Over 2.5 million children have tested positive 
for COVID and the number of cases among children is continuing to rise. 
Women with children have left the labor force in record numbers. 
Helping women return to work and children return to school is an 
essential part of the economic recovery. If confirmed, I look forward 
to working with President Biden to achieve his goal of safely reopening 
schools and providing the support necessary to help our Nation's 
children make up for their lost learning and recover from the emotional 
toll of the pandemic.

    Question. Do we have a sense of the percentage of individual 
earners making less than $75,000 per year who have had their financial 
status change due to the pandemic? Wouldn't the data show that the vast 
majority of those whose status has changed would be eligible for 
unemployment insurance, which also supports earners who are not 
unemployed but have had their hours or incomes reduced?

    If yes, what in your view is the benefit of an additional across-
the-board stimulus and how would this help the economy more than 
targeted forms of aid?

    Isn't it true that the safe opening of businesses would provide 
more of a boost to the economy than any stimulus check?

    In your hearing, several of my colleagues brought up unemployment 
insurance and needed reforms to the system. In your view, does an 
individual earning more on unemployment insurance than they earned 
through their former employment create a disincentive to work and/or 
impact the ability of the economy to rebound?

    Answer. President Biden supports increasing the stimulus amount to 
mitigate the losses that families have experienced and to help the 
economy quickly recover from the damage done by the pandemic. In 
addition, I believe that it is critically important that we provide 
sufficient aid to unemployed workers, many of whom have experienced a 
devastating loss of income with no current opportunity to safely work. 
President Biden is committed to tackling the spread of the virus and 
quickly vaccinating the population so that businesses can safely open 
and Americans can get back to work. Economic data and analysis should 
guide our reforms to the unemployment insurance system.

    Question. Many believe that the rush to automation and 
technological advancement has been accelerated by the pandemic. Do you 
agree with this view, and if yes, how do you see this trend affecting 
the economic outlook over the next 5 and 10 years? How is this likely 
to affect productivity and wages?

    Answer. It is too early to know how the pandemic has impacted these 
trends, but we must ensure that the recovery is an inclusive one. The 
pandemic has accelerated the disparity between the wealthiest Americans 
and the most vulnerable, as some have continued to accumulate financial 
gains while millions have lost their jobs or their lives. Rising 
inequality is a drag on our economic growth: when extreme inequality 
leaves so many unable to afford even basic necessities, let alone reach 
their full potential, it holds back our entire economy. If confirmed, I 
will work with President Biden and with Congress to implement his 
recovery plan and to begin investing in American innovation and 
production to reinvigorate growth, enhance productivity and shared 
prosperity, and raise wages.

    Question. Farmers and ranchers in my State that applied and 
received a round 1 paycheck protection plan (PPP) loan that has been 
subsequently forgiven believe they would be eligible to amend their 
application, apply again, and receive an increase under the new PPP 
terms. Those farmers that received a round 1 loan but that has not been 
forgiven are not eligible for an amended or increased amount. Those 
farmers ineligible for an amended application would need to apply 
separately for a loan from the round 2 PPP program then would have to 
have experienced a 25-percent reduction in revenue from any quarter in 
2019 to the corresponding quarter in 2020. This is a challenging set of 
criteria to meet.

    Please review the applicable guidelines and their implementation 
through the Small Business Administration and consider issuing an 
informational guidance document to stakeholders and the SBA that offers 
more flexibility to complex agriculture businesses. I further request 
the Treasury Department share this information with members of this 
committee.

    Answer. I will look into this issue and will follow up with you and 
members of this committee.

    Question. In your testimony, you discussed the need to implement 
domestic policies--including increased investment in manufacturing, 
infrastructure, and research and development--that will allow us to 
remain competitive against international players, such as China. 
However, in contrast to this, President Biden has called for an 
increase in the corporate tax rate, which would push us back to one of 
the highest corporate income tax rates in the developed world and thus 
hamper our competitiveness on the global stage. Could you please 
elaborate on what specific investments you feel will increase our 
competitiveness and how those policies balance against an increase in 
the corporate income tax rate?

    Answer. During the presidential campaign, President Biden proposed 
raising the corporate tax rate to 28 percent--which is the midpoint of 
the pre-2017 level and the rate imposed after the tax act. At 28 
percent, the corporate tax rate would be substantially below the level 
that had been in place for decades.

    The Biden agenda would couple this tax change with massive 
investment that would benefit American businesses of all stripes and 
improve our international competitiveness. This includes a sweeping 
plan to bolster America's infrastructure, ranging from surface 
transportation to broadband to airports and waterways. The plan would 
add billions of dollars to worker training and college education, in 
addition to apprenticeship programs--all of which would raise the 
productivity of American workers. The Biden plan allocates hundreds of 
billions in research funds for renewable energy and other economic 
priorities, which ultimately make us more competitive on the world 
stage. And perhaps most importantly, President Biden has advanced a 
plan to quickly distribute vaccines to households while also providing 
a lifeline for the American economy. These critical actions will help 
businesses across the country, including those that are subject to the 
higher 28-percent corporate tax rate.

    Question. Beginning in 2022, taxpayers will be required to amortize 
their research and development expenses over 5 years (instead of being 
allowed to immediately expense them). This change will raise the cost 
of conducting research here in the U.S. and leave us less competitive 
internationally. In your testimony you highlighted the importance of 
investment in domestic R&D, and I feel that this change could run 
counter to that goal. Could you please elaborate on the 
administration's plans to increase R&D activities in the U.S. and your 
views on this upcoming change in treatment of R&D expenses? 
Additionally, could you commit to working with Congress to ensure we 
have competitive tax policies that support domestic research and 
development?

    Answer. The tax change you describe was part of the 2017 Tax Cuts 
and Jobs Act. The Biden agenda would complement this tax change with 
massive investment that would benefit American businesses of all 
stripes and improve our international competitiveness. This includes a 
sweeping plan to bolster America's infrastructure, ranging from surface 
transportation to broadband to airports and waterways. The plan would 
add billions of dollars to worker training and college education, in 
addition to apprenticeship programs--all of which would raise the 
productivity of American workers. The Biden plan allocates hundreds of 
billions in research funds for renewable energy and other economic 
priorities, which ultimately make us more competitive on the world 
stage. And perhaps most importantly, President Biden has advanced a 
plan to quickly distribute vaccines to households while also providing 
a lifeline for the American economy.

    Question. Beginning in 2022, an important provision of the code 
that allows for full expensing of short-lived assets will begin to 
phase out. This provision has lowered the cost of capital for new 
investments and encouraged owners to invest back into their own 
businesses here in the U.S. I believe it would be unwise to increase 
the cost of capital and disincentive investments here in the U.S., 
especially as the economy is coming out of a global pandemic. As we 
look at proposals for immediate economic recovery as well as long-term 
economic health, I believe that allowing full expensing could be one of 
the best pro-growth tools at our disposal. Could you please elaborate 
on any views you have on immediate expensing as well as any other pro-
growth proposals you have to lower the cost of investing here in the 
U.S.?

    Answer. You raise an important issue about the need for pro-growth 
tools as the economy remains in a concerning position. If confirmed, I 
am committed to working with Congress to strengthen American 
competitiveness and increase domestic investment. As discussed above, 
this includes research funds, a sweeping plan to bolster America's 
infrastructure, and investments in raising the productivity of American 
workers, who are the engine of research and development. Together these 
proposals, along with those to eliminate incentives to offshore jobs, 
will make us more competitive on the world stage. These and other 
proposals will be further developed as part of the budget process, and, 
if confirmed, I look forward to continued conversations with you about 
the President's legislative agenda.

    Question. Even prior to this current pandemic, our economy was 
rapidly changing. I share your goal of ensuring that Americans are 
prepared and have the skills necessary to compete. Could you please 
elaborate on what role you believe tax policy will play in ensuring 
Americans are prepared to compete in the workforce of the future? 
Further, are there any particular provisions currently in the code that 
you believe are working well or could be modified to address these 
needs?

    Answer. To ensure Americans are able to compete in the 21st 
century, we must make higher education and training more affordable and 
ensure greater gender and racial equity in the workforce. Tax policy 
can be one of several tools to help achieve those goals--for example, 
by expanding access to education and affordable child care. Without 
adequate child care and paid leave policies, many parents are unable to 
complete the training they seek or are unable to take jobs that are 
most likely to help advance their careers. Alongside investments in 
education and care-giving and measures that provide family, medical and 
sick leave, incentives in the tax code can help make our workforce more 
competitive. President Biden is also committed to a tax code which 
rewards work, not just wealth, and such reforms are essential for 
ensuring an economy in which all Americans can share in the returns to 
American competitiveness. If confirmed, I would look forward to working 
with the committee to identify ways tax policy could support workers 
seeking pathways for new skills and upward mobility.

                                 ______
                                 
                 Questions Submitted by Hon. Ron Wyden
                            public trustees
    The two public trustees for Medicare and Social Security first 
signed a trustees report in 1985. In the 35 reports since 1985, the 
public trustees have been vacant for nine reports, or roughly 25 
percent.

    Will you commit to consult with the Committee on Finance and other 
stakeholders before nominating individuals as public trustees?

    Answer. Consultation with the Senate's committees of jurisdiction 
and other stakeholders is a crucial step in ensuring the right 
individuals serve in these important, Senate-confirmed roles. It is 
vital that the public have a seat at the table when it comes to 
oversight of the Social Security and Medicare Trust Funds and the 
crucial benefits they provide to America's middle class.
                       international cooperation
    Question. The United States has long played a crucial role in the 
global economy by confronting systemic challenges and working with 
like-minded partners to address the tough problems. We know that the 
big stuff requires collective action.

    At the summits like the G7 and G20, consensus-based statements 
reflect the collective views of the United States and our allies on 
major issues such as monetary policy, security, and multilateral rules-
based trading. Rather than working with allies to find areas of 
agreement and make progress toward addressing our collective 
challenges, the Trump administration had a record of unnecessarily 
isolating the United States on everything from climate change to trade.

    Do you agree with me that it is critical for the United States to 
refocus our efforts with our allies in the G7, G20, Asia-Pacific 
Economic Cooperation (APEC), and other international fora to find 
solutions to the major issues facing the United States and the world?

    Answer. The global economy is estimated to have shrunk by more than 
4 percent in 2020, the worst contraction since WWII. An estimated 90 
million people have fallen into extreme poverty as a result of the 
pandemic and its economic impact. Challenges of this magnitude need 
collective solutions in an interdependent global economy. I strongly 
agree that fora such as the G7, G20, and APEC offer the United States 
critical opportunities for leadership and for promoting cooperative 
actions so that the responsibility for crisis response and for 
addressing longer term structural global problems can be shared with 
our allies. In addition, our actions at home to promote an equitable 
and inclusive recovery will be more effective and yield greater gains 
for our workers and businesses if complemented and amplified by similar 
policies and actions by our partners. We must lead and shape decisions 
in these fora to promote global adherence to the policies, rules-based 
system, and financial burden-sharing that will deliver shared 
prosperity, equal opportunity, and economic justice.
                                 cfius
    Question. In its dealings with Huawei, ZTE, and others, the Trump 
administration has demonstrated a troubling willingness to put national 
security issues on the table when seeking economic or trade deals from 
our trading partners. If confirmed, as chairman of the Committee on 
Foreign Investment in the United States (CFIUS), you will be 
responsible for evaluating the national security implications of 
specific foreign investments and recommending whether to modify or 
reject them. In this capacity, CFIUS is intended to focus solely on 
genuine national security concerns raised by a covered transaction, and 
not on other national interests.

    Do you agree that genuine national security concerns should be the 
key factor when determining whether to reject or modify a proposed 
investment? What steps will you take to mitigate the risk of other 
factors, including geopolitical concerns, trade policy, or other 
conflicts, influencing the Secretary's decisions on CFIUS matters?

    Answer. I think the CFIUS process plays a critical role in 
protecting U.S. national security interests. The CFIUS statute sets 
forth the rigorous criteria that the administration is required to use 
in assessing certain foreign investments in the United States, and I 
pledge that the Treasury Department will follow the statutory criteria 
in guiding its decision making in CFIUS reviews.
                                 fincen
    Question. The last 4 years have seen an unacceptable level of 
politicization at FinCEN. Treasury officials worked hand-in-glove with 
Republicans to produce information intended only to smear President 
Biden and his family, while at the same time slow-walking or ignoring 
valid congressional requests from Democrats. Under Secretary Mnuchin's 
leadership, I believe FinCEN was used as an opposition research wing of 
the Trump campaign, undermining trust and confidence in the 
institution. I consider these abuses serious and unprecedented and plan 
to conduct serious oversight of the matter.

    Will you commit to cooperating with oversight of this matter, and 
working to restore trust and accountability at FinCEN?

    Answer. I have the utmost regard for the oversight responsibilities 
of Congress. To that end, I commit to cooperating with Congress in its 
oversight of FinCEN, and to working with you and your colleagues to 
build trust and confidence in FinCEN's important work and mission.
                         digital services taxes
    Question. What will be the Biden administration's approach to 
prevent countries from adopting, and prevent collection where a country 
has already adopted, digital services taxes that target American 
companies? Similarly, what will be the Biden administration's approach 
to the ongoing OECD negotiations regarding taxation and digitalization?

    Answer. I am aware of the concerns U.S. companies have raised about 
digital services taxes. I am committed to a cooperative multilateral 
effort to address base erosion and profit shifting through the OECD/G20 
process, and to work to resolve the digital taxation dispute in that 
context.

                                 ______
                                 
               Questions Submitted by Hon. Maria Cantwell
    Question. I share the concerns you expressed during your nomination 
hearing that climate change poses an ``existential threat'' and support 
your plans to make the Treasury Department a leader in addressing the 
risks it poses to our economy.

    I understand that you have given several speeches, interviews, and 
signed onto plans with other economists, business leaders, and advocacy 
groups in support of carbon pricing. Do you continue to believe that an 
economy wide price on carbon, applied upstream where fossil fuels enter 
the economy, is the most efficient mechanism to decrease carbon 
emissions at the necessary scale and speed?

    Answer. We cannot solve the climate crisis without effective carbon 
pricing. The President supports an enforcement mechanism that requires 
polluters to bear the full cost of the carbon pollution they are 
emitting. I am deeply engaged on this issue and, if confirmed, will 
continually discuss my views and thinking with the President and our 
entire team. President Biden has amassed a phenomenal team including 
some of the most informed thinkers on this issue. We are all committed 
to doing everything we can to solve this crisis.

    Question. Do you believe that a predictable, market-based carbon 
price will incentivize the markets to reduce carbon emissions faster 
and more efficiently than could be achieved through direct regulation 
of emissions within specific industry sectors?

    Answer. Senator, please see my answer above. Thank you.

    Question. Do you believe that concerns over carbon pricing 
disproportionally harming lower-income households would be addressed if 
the majority of revenue raised was distributed back to consumers 
through equal per capita monthly dividends?

    Answer. Like you, Senator, it is very important to me that, as we 
work to solve the climate crisis and move toward a low-carbon future, 
we ensure that American families-- especially the most vulnerable--
share in the economic gains that can come from a clean energy economy.

    The President's agenda includes investments in clean energy and 
energy efficiency technologies that create good-paying jobs, and clean 
electricity standards that will achieve carbon-pollution free 
electricity by 2035. If confirmed, I will provide advice to the 
President regarding the best way to achieve his agenda, including his 
plan to achieve net-zero emissions no later than 2050, based on the 
principle that that polluters must bear the full cost of the carbon 
pollution they are emitting.

    Question. Do you believe the experience gained by the Treasury 
Department issuing stimulus checks during the COVID crisis prove that 
the Treasury Department would be capable of efficiently and cost-
effectively issuing monthly dividend payments to every American?

    Answer. Thanks to hardworking career staff across the IRS, BFS, 
Treasury Departmental Offices, and other government agencies, 
approximately 160 million American households received their Economic 
Impact Payments in an efficient and cost-effective manner. This program 
was put in place quickly and was able to meaningfully ease the economic 
pain of the recession for millions of families. We have also learned 
from this experience. Some Americans have not been able to claim the 
benefits to which they are entitled. These individuals are often the 
most in need of assistance, and often reside in underbanked and 
underserved communities. If confirmed, I would be committed to 
improving tax administration in a variety of ways, including the 
distribution of stimulus checks, and I would investigate the extent to 
which investments in IRS IT systems could improve the taxpayers 
experience and improve outreach to vulnerable taxpayers. I look forward 
to working with you on these issues.

                                 ______
                                 
            Questions Submitted by Hon. Robert P. Casey, Jr.
    Question. The 2017 tax bill eliminated the deduction for 
unreimbursed expenses workers incur as part of their job--this means 
that police and firefighters were no longer able to deduct unreimbursed 
cost of their uniforms or equipment. Truck drivers could no longer 
deduct travel expenses and workers in unions could no longer deduct the 
cost of their dues.

    I have a bill, the Tax Fairness for Workers Act, to reinstate these 
deductions and make the deduction for union dues above the line. It is 
a measure I hope will be included in the President's budget.

    Will you commit to working with my office on this proposal which 
supports workers and union jobs?

    Answer. One of the guiding principles of President Biden's tax plan 
is that the tax code should reward work, not wealth. If confirmed, I 
look forward to learning more about this proposal and working with your 
office on this issue. I would also look forward to working with you and 
other members of Congress to advance proposals to strengthen worker 
organizing, collective bargaining, and unions.

    Question. Since Congress passed the Achieving a Better Life 
Experience Act in December 2014, over 65,000 people with disabilities 
have opened ABLE accounts worth more than half a billion dollars. ABLE 
accounts allow people with disabilities save for their future while 
continuing to be eligible for Federal benefits; savings that can lead 
to economic independence. Despite strong participation, ABLE accounts 
are only available to individuals with an onset of disability before 
age 26, leaving out millions of people. I have bipartisan legislation 
to expand the program's eligibility to people with disabilities 
acquired prior to 46 years of age.

    Two questions: will you, in your role as Treasury Secretary, work 
to increase the awareness and use of ABLE Accounts?

    Will you commit to working with my office to enact the ABLE Age 
Adjustment Act, which will expand the number of people with 
disabilities eligible to open an ABLE account?

    Answer. The Biden-Harris administration is committed to expanding 
opportunities and supporting financial security for people with 
disabilities. During the campaign, President Biden committed to working 
to pass the ABLE Age Adjustment Act, and, if confirmed, I look forward 
to working with you to increase the awareness and use of ABLE Accounts.

                                 ______
                                 
             Questions Submitted by Hon. Sheldon Whitehouse
    Question. The IMF estimates that annual fossil fuel subsidies in 
this country alone total more than $600 billion annually. Would you 
agree that until we eliminate or at least greatly reduce this massive 
negative externality, it is going to be difficult to transition to a 
low-carbon economy?

    Answer. Both the President and I believe we can turn the threat of 
climate change into an opportunity to boost our economy and 
reinvigorate old and new industries to create high-paying middle-class 
jobs across America.

    President Biden has a comprehensive plan to invest in the United 
States, create a clean energy economy, and address the crisis of 
climate change. I am focused on the President's agenda, including 
investments in the clean energy economy, to address climate change and 
create good paying jobs and energy efficiency technologies, as well as 
clean electricity standards that will achieve carbon-pollution-free 
electricity by 2035.

    I will provide advice to the President regarding the best way to 
achieve this agenda, including advice regarding his plan to achieve 
net-zero emissions no later than 2050, based on the principle that 
polluters must bear the full cost of the carbon pollution they are 
emitting.

    As we do this, we must ensure that American families--especially 
the more vulnerable--aren't unduly burdened by increased energy prices 
as we move toward a low-carbon future.

    Question. Do you believe putting a price on carbon is one of, if 
not the most effective policies we can pursue in order to reduce 
emissions consistent with scientific targets?

    Answer. I am fully supportive of effective carbon pricing, and I 
know that the President is as well. We cannot solve the climate crisis 
without effective carbon pricing. The President does support an 
enforcement mechanism that requires polluters to bear the full cost of 
the carbon pollution they are emitting. I am engaged on this issue and 
will continue to discuss my views and thinking with the President and 
our entire team. President Biden's team includes some of the most 
informed thinkers on this issue. We are all committed to doing 
everything we can to solve this crisis.

    Question. If confirmed, you will serve as chair of the Financial 
Stability Oversight Council (FSOC). Would it be prudent for FSOC to 
conduct a system-wide assessment of climate-related financial risks, 
including those related to coastal property values and fossil fuel 
assets? Would it be helpful to create a climate-related financial risk 
subcommittee within FSOC to focus on these issues?

    Answer. As you know, the Financial Stability Oversight Council 
(FSOC) was created by Congress under the Dodd-Frank Wall Street Reform 
and Consumer Protection Act (DFA) following the Financial Crisis that 
brought the U.S. economy and financial system to the brink of collapse.

    It is the responsibility of the Treasury Secretary to strengthen 
the U.S. economy, foster widespread economic prosperity, and promote an 
economic agenda that leads to long-run economic growth. Meeting that 
challenge undoubtedly requires focus on the current economy, but also 
requires a commitment to the building blocks of enduring prosperity.

    The Treasury Department has a wide range of responsibilities to 
meet these commitments, on its own and through the FSOC, including 
monitoring and overseeing various financial markets, administering our 
Nation's fiscal policies, engaging in international economic 
negotiations, and ensuring the stability of a wide range of factors 
related to the health of the U.S. economy, including threats from 
climate change. If confirmed, I look forward to working with you on 
this important issue.

    Question. There have been numerous studies and reports documenting 
climate-
related economic risk. Much of the research and thought leadership in 
this space is taking place in Europe. Will you commit to developing and 
promoting research into climate-related financial and economic risks at 
the Treasury's Office of Financial Research?

    Answer. Congress created the Office of Financial Research (OFR) in 
the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010 
to support the Financial Stability Oversight Council in its mission, 
among others, to monitor the financial system for risks that could 
threaten financial stability. Assessing and monitoring climate-related 
financial and economic risk are important issues. If confirmed, I look 
forward to working with you with regard to OFR's research into climate-
related financial and economic risk.

                                 ______
                                 
                Question Submitted by Hon. Maggie Hassan
    Question. Members of this committee from both parties support 
protecting the U.S. tax base during the OECD Base Erosion and Profit 
Shifting discussions. Could you please share your plans to analyze the 
economic effects of OECD proposals on different U.S. industries and 
your plans to keep the Finance Committee updated throughout the OECD 
process?

    Answer. If confirmed, I will certainly keep the Senate Finance 
Committee appropriately updated on the OECD/G20 negotiations. Any 
treaty arrangements would of course require the advice and consent of 
the Senate. An analysis of the economic effects of the OECD proposals 
is absolutely appropriate and I will look forward to future 
conversations with the members of the Senate Finance Committee during 
which we can share our consideration of these different effects.

                                  [all]