[Senate Hearing 117-582]
[From the U.S. Government Publishing Office]


                                                       S. Hrg. 117-582

                NOMINATIONS OF LILY LAWRENCE BATCHELDER,
                  JONATHAN DAVIDSON, BENJAMIN HARRIS,
                          AND J. NELLIE LIANG

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

                                HEARING

                               BEFORE THE

                          COMMITTEE ON FINANCE
                          UNITED STATES SENATE

                    ONE HUNDRED SEVENTEENTH CONGRESS

                             FIRST SESSION

                                 ON THE

                             NOMINATIONS OF

  LILY LAWRENCE BATCHELDER, TO BE ASSISTANT SECRETARY FOR TAX POLICY, 
    DEPARTMENT OF THE TREASURY; JONATHAN DAVIDSON, TO BE ASSISTANT 
SECRETARY FOR LEGISLATIVE AFFAIRS, DEPARTMENT OF THE TREASURY; BENJAMIN 
 HARRIS, TO BE ASSISTANT SECRETARY FOR ECONOMIC POLICY, DEPARTMENT OF 
 THE TREASURY; AND J. NELLIE LIANG, TO BE UNDER SECRETARY FOR DOMESTIC 
                  FINANCE, DEPARTMENT OF THE TREASURY

                               __________

                              MAY 25, 2021

                               __________

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            Printed for the use of the Committee on Finance

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                    U.S. GOVERNMENT PUBLISHING OFFICE                    
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                          COMMITTEE ON FINANCE

                      RON WYDEN, Oregon, Chairman

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

                    Joshua Sheinkman, Staff Director

                Gregg Richard, Republican Staff Director

                                  (ii)
                                  
                            C O N T E N T S

                              ----------                              

                           OPENING STATEMENTS

                                                                   Page
Wyden, Hon. Ron, a U.S. Senator from Oregon, chairman, Committee 
  on Finance.....................................................     1
Crapo, Hon. Mike, a U.S. Senator from Idaho......................     3
Bennet, Hon. Michael F., a U.S. Senator from Colorado............     4
Warren, Hon. Elizabeth, a U.S. Senator from Massachusetts........     6

                        ADMINISTRATION NOMINEES

Batchelder, Lily Lawrence, nominated to be Assistant Secretary 
  for Tax Policy, Department of the Treasury, Washington, DC.....     7
Davidson, Jonathan, nominated to be Assistant Secretary for 
  Legislative Affairs, Department of the Treasury, Washington, DC     8
Harris, Benjamin, Ph.D., nominated to be Assistant Secretary for 
  Economic Policy, Department of the Treasury, Washington, DC....    10
Liang, J. Nellie, Ph.D., nominated to be Under Secretary for 
  Domestic Finance, Department of the Treasury, Washington, DC...    11

               ALPHABETICAL LISTING AND APPENDIX MATERIAL

Batchelder, Lily Lawrence:
    Testimony....................................................     7
    Prepared statement...........................................    45
    Biographical information.....................................    46
    Responses to questions from committee members................    58
Bennet, Hon. Michael F.:
    Opening statement............................................     4
Crapo, Hon. Mike:
    Opening statement............................................     3
    Prepared statement...........................................    81
Davidson, Jonathan:
    Testimony....................................................     8
    Prepared statement...........................................    82
    Biographical information.....................................    83
    Responses to questions from committee members................    87
Harris, Benjamin, Ph.D.:
    Testimony....................................................    10
    Prepared statement...........................................    90
    Biographical information.....................................    91
    Responses to questions from committee members................   103
Liang, J. Nellie, Ph.D.:
    Testimony....................................................    11
    Prepared statement...........................................   114
    Biographical information.....................................   115
    Responses to questions from committee members................   124
Warren, Hon. Elizabeth:
    Opening statement............................................     6
Wyden, Hon. Ron:
    Opening statement............................................     1
    Prepared statement...........................................   147

 
                      NOMINATIONS OF LILY LAWRENCE
                      BATCHELDER, TO BE ASSISTANT
                       SECRETARY FOR TAX POLICY,
                      DEPARTMENT OF THE TREASURY;
                   JONATHAN DAVIDSON, TO BE ASSISTANT
                   SECRETARY FOR LEGISLATIVE AFFAIRS,
                      DEPARTMENT OF THE TREASURY;
                    BENJAMIN HARRIS, TO BE ASSISTANT
                     SECRETARY FOR ECONOMIC POLICY,
                    DEPARTMENT OF THE TREASURY; AND
                      J. NELLIE LIANG, TO BE UNDER
                    SECRETARY FOR DOMESTIC FINANCE,
                       DEPARTMENT OF THE TREASURY

                              ----------                              


                         TUESDAY, MAY 25, 2021

                                       U.S. Senate,
                                      Committee on Finance,
                                                    Washington, DC.
    The hearing was convened, pursuant to notice, at 9:30 a.m., 
via Webex, in Room SD-215, Dirksen Senate Office Building, Hon. 
Ron Wyden (chairman of the committee) presiding.
    Present: Senators Cantwell, Carper, Cardin, Brown, Bennet, 
Casey, Warner, Whitehouse, Hassan, Warren, Crapo, Grassley, 
Thune, Portman, Toomey, Cassidy, Lankford, and Daines.
    Also present: Democratic staff: Michael Evans, Deputy Staff 
Director and Chief Counsel; Ian Nicholson, Investigator and 
Nominations Advisor; Joshua Sheinkman, Staff Director; and 
Tiffany Smith, Chief Tax Counsel. Republican staff: Gregg 
Richard, Staff Director; and Jeffrey Wrase, Deputy Staff 
Director and Chief Economist.

   OPENING STATEMENT OF HON. RON WYDEN, A U.S. SENATOR FROM 
             OREGON, CHAIRMAN, COMMITTEE ON FINANCE

    The Chairman. The Finance Committee meets to discuss four 
nominations that will round out President Biden's team leading 
the Treasury Department. Lily Batchelder is nominated to serve 
as Assistant Secretary for Tax Policy. Professor Batchelder is 
not only a leader when it comes to crafting tax policies that 
bring working Americans into the economic winner's circle, she 
is also a friend of the committee.
    Along with Senator Bennet, I serve on the Intelligence 
Committee. I am not going to get into any classified kind of 
matters, but suffice to say this is a group that has plenty of 
friends here in the committee, and they were actually kind of 
duking it out almost to see who would introduce our nominees. 
And all kidding aside, we are just particularly proud of 
Professor Batchelder, who is an alum of the committee, and we 
are glad that she is here.
    From 2010 till 2014, she served as Chief Tax Counsel to 
then-Chairman Max Baucus, and later became Deputy Director of 
the National Economic Council under President Obama. She has 
always been an advocate for the proposition that tax policy is 
not just about revenue. She knows, for example, that tax policy 
can drive inequality or help solve it and create high-skill, 
high-wage jobs for the country. So we are always happy to 
welcome Professor Batchelder to the committee.
    While we are on the topic of those whom we know well, I 
appreciate Jon Davidson, who is nominated to serve as Assistant 
Secretary for Legislative Affairs. He too is well-known and 
respected in these corridors. For decades he served as Chief of 
Staff to Senator Bennet. People who worked with the two of them 
know that Senator Bennet's team has been the gold standard when 
it comes to designing and building support for policies that 
help working families and the middle class in the country get 
ahead.
    Mr. Davidson brings decades of Capitol Hill experience to 
his nomination. He played a key role in the transition that 
helped the Biden administration hit the ground running on 
January 20th.
    Ben Harris has been nominated to serve as Assistant 
Secretary for Economic Policy. If President Biden is known for 
one thing, it is his lifelong principled commitment to working 
people in downtrodden communities like Scranton, PA. It takes a 
lot of hard work and a lot of planning, never more so than 
during a severe jobs crisis, to build an agenda of fresh, bold 
economic policies reflecting those core Biden principles.
    Dr. Harris has been right at the heart of that process. His 
work has proven wrong anybody who thought that the Biden 
administration was going to take half measures rather than big 
strides to help people get ahead in the wake of the COVID 
crash.
    And finally, Nellie Liang is nominated to serve as Under 
Secretary for Domestic Finance. So many have followed her work 
and have been in touch with me to praise her work. I think it 
is important to note that at the outset, because there has not 
been a 
Senate-confirmed official in this job since 2014. So I am 
pleased that President Biden has put forward such a highly 
qualified nominee.
    Dr. Liang has 3 decades of experience at the Federal 
Reserve. She was the first-ever Director of the Division of 
Financial Stability on its creation in 2010, coming out of the 
Great Recession. Her experience in that job is going to be key 
to her work at the Treasury Department leading an office on 
protecting our economy from risks and from downturns.
    The bottom line, the group joining the committee today is 
an all-star team of economic policymakers focused on giving 
everybody in the country a fair shot and a fair opportunity to 
get ahead, not just those at the top. The nominees are highly 
qualified and a strong addition to Secretary Yellen's 
leadership team at the Treasury Department, along with Deputy 
Secretary Adeyemo. This committee is going to lean often on 
their expertise.
    Tomorrow the committee is going to have a debate as well, 
so colleagues know, aimed at bringing our system's energy 
taxes, 44 separate energy taxes, into the 21st century and 
creating a wave of new, clean energy jobs for our country.
    The committee is working on changes to the international 
corporate tax system, based on the proposition that, again, 
everybody ought to pay their fair share, even the big mega-
corporations that got a huge tax handout from the 2017 Trump 
tax law. And the committee is working with Treasury on the new 
Child Tax Credits, as well as efforts to close the tax gap and 
rebuild the IRS resources to crack down on cheating by high-
flyers.
    So there are lots of areas that I know our nominees are 
going to be asked about this morning. I want to thank them 
again, and welcome Senator Crapo's opening remarks, and then we 
have some formalities and we have some introductions.
    Senator Crapo?
    [The prepared statement of Chairman Wyden appears in the 
appendix.]

             OPENING STATEMENT OF HON. MIKE CRAPO, 
                   A U.S. SENATOR FROM IDAHO

    Senator Crapo. Thank you, Chairman Wyden.
    Today we welcome four nominees for positions at the 
Department of Treasury. Congratulations to each of you on your 
nomination.
    Treasury is responsible for implementing laws and 
congressional intent concerning tax, economic, fiscal, 
financial, and national security issues. Over time, the 
Treasury Department's responsibilities have expanded. With 
increased responsibility comes the need for transparency and 
accountability.
    Each of our nominees, if confirmed, should recognize this 
committee's oversight responsibilities to the American people 
regarding Treasury policies and activities, including 
activities at the IRS.
    So far in this Congress the Department has not adequately 
recognized the need to be transparent and accountable to this 
committee. Today I am interested in learning more about policy 
positions and advocacy of our nominees. I expect to learn even 
more from what need to be robust, complete, and detailed 
responses to questions for the record that members will ask 
after today's hearing.
    This is particularly important, as I do not support many of 
the tax and financial policies put forward by the 
administration--and some of the nominees here today. While we 
do not have to agree on every policy, we do need to agree on a 
reasoned debate and dialogue driven by the facts.
    Americans are still recovering from the largest negative 
economic shock in modern records stemming from the pandemic. We 
continue to hear of businesses having difficulty finding 
employees willing to work at market wages. Inflation has risen, 
igniting the prospect of a budget-crushing increase in interest 
rates. This is no time to enact massive increases in domestic 
and international taxes, to further impede labor market 
adjustments, or to punish low- and middle-income workers with 
higher energy costs and increased gas prices at the pump.
    The Tax Cuts and Jobs Act of 2017 spurred economic activity 
and helped lead to historic lows in unemployment rates, 
particularly for minority workers, and robust wage growth that 
especially benefited the low-wage workers.
    Reversing those gains with job-killing taxes is not the way 
to go. It is important to find bipartisan solutions to reignite 
growth and increase jobs and wages for workers.
    Mr. Davidson, in your role as Assistant Secretary for 
Legislative Affairs, you would advise the Secretary on 
congressional relations and help coordinate Treasury's 
interactions with Congress. As I have said before, there is 
work to be done at Treasury to improve transparency and 
accountability, and interactions with both sides of the aisle 
in Congress.
    Dr. Harris, the Assistant Secretary for Economic Policy 
analyzes and reports on current and prospective economic 
developments both here and abroad, and assists in formulating 
economic policies. Economic analysis is often speculative, but 
all views must be heard. Discussions must be based on positive, 
actual descriptions of what we know or do not know. Normative 
advocacy has its place, but should not be the only basis for 
our policy discussions.
    Ms. Batchelder, the Assistant Secretary for Tax Policy 
develops, recommends, and implements Federal tax policy on 
behalf of the Treasury. I do not agree with some of the 
normative policies for which you advocate and need assurance 
that, if confirmed, you and others at Treasury give opposing, 
reasoned views a fair shake.
    Finally, Dr. Liang, the Under Secretary for Domestic 
Finance oversees and assists in areas of domestic finance, 
banking, and other economic matters. I have concerns that some 
in the administration desire to reimagine financial markets to 
become more driven by political preferences of one side, and I 
look forward to learning more about your positions.
    I again stress the need for each of you, if confirmed, to 
work across the aisle and to be transparent and responsive. I 
look forward to your testimony and to detailed responses to 
your questions.
    Thank you.
    [The prepared statement of Senator Crapo appears in the 
appendix.]
    The Chairman. Thank you, Senator Crapo.
    Now we are going to have the introductions. Senator Bennet 
will introduce Mr. Davidson.

         OPENING STATEMENT OF HON. MICHAEL F. BENNET, 
                  A U.S. SENATOR FROM COLORADO

    Senator Bennet. Thank you, Mr. Chairman, and thank you and 
Ranking Member Crapo for allowing me to introduce Jonathan 
Davidson, President Biden's nominee to serve as Assistant 
Secretary of the Treasury for Legislative Affairs.
    President Biden could not have made a better choice. And I 
can think of few people who understand how government works, 
and especially Congress, better than Jon. Jon served, as you 
said, Mr. Chairman, on Capitol Hill for over 2 decades. He 
worked his way up from a job as a body person to the late 
Senator Sarbanes, to eventually become his Chief of Staff. Jon 
spent time in the House of Representatives working for John 
Sarbanes before returning to this body as Chief Counsel to 
Senator Warner, and then, despite his better judgment, as my 
Chief of Staff. [Laughter.]
    Jon served in that role for over a decade, which is 
virtually my entire time in the Senate. I still believe that 
Jon was the best Chief of Staff in the entire U.S. Senate, 
particularly when you consider the hand he was dealt. As my 
colleagues may remember, I came to this body with no experience 
in elected office. I was appointed to the job at a time when 
only 3 percent of Coloradans knew who I was. I had no shortage 
of ideas about what I wanted to do, but I had no idea how to do 
them. Jon was the perfect partner. And even though we are not 
that distant in age, he was always more patient, more savvy, 
more strategic about how to operate the levers of the Senate to 
make progress for Colorado and the country than I was.
    And over the past 10 years, as my Chief of Staff, Jon 
helped me navigate almost every issue before this committee, 
from trade and tax policy to fiscal matters, economic 
competitiveness, and support for working families. Jon combined 
an expertise about the issues with a deep appreciation for what 
mattered to people's lives.
    Jon is unusual for someone who has had such a distinguished 
career on the Hill, because there is no trace of ego about him. 
He has always been about the work, which is making our 
institutions deliver for everyday people. Jon reveres this 
body. He appreciates how, at their best, our institutions can 
transform the vastly different perspectives across the country 
into an enduring result that makes a difference in people's 
lives.
    He knows that democracy is hard work. There are no 
shortcuts, and Jon would not take one even if there were one. 
He has always led with integrity and inexhaustible drive. He is 
an excellent manager and mentor of people, and he has certainly 
been an important mentor to me over the past 10 years. I do not 
know anyone who has worked harder, and I do not know anyone who 
has taken less credit for what he has achieved.
    When Senator Brown, Chairman Wyden, and I helped pass the 
Child Tax Credit earlier this year--the single biggest 
investment in families in half a century--it was largely 
because Jon had helped pave the way with years of hard work 
behind the scenes far from the bright lights and TV cameras. 
That is who he is.
    Whatever I have achieved in this job over the past 10 years 
is a credit to Jon's leadership and partnership. And whatever 
my failings in this job--and there have been plenty--they 
inevitably go back to times when I did not listen to Jon.
    Let me end with this: Jonathan Davidson is a first-rate 
public servant, a patriot, and a friend. And as much as it 
pains me to see him leave our team, I take comfort knowing that 
Treasury will gain a highly effective and respected leader at 
this pivotal juncture for the country, and that this committee 
will have a faithful interlocutor at the Department of 
Treasury. I cannot thank Jon enough for his service to 
Colorado, and I am so grateful to his wife Erin and his kids 
Leo, Mia, and Serena for allowing Jon to give so much of 
himself to our team over the past 10 years. I urge my 
colleagues from both sides to confirm this exceptional nominee.
    The Chairman. A terrific sendoff, Senator Bennet.
    Senator Bennet. Thank you.
    The Chairman. Senator Warren?

          OPENING STATEMENT OF HON. ELIZABETH WARREN, 
               A U.S. SENATOR FROM MASSACHUSETTS

    Senator Warren. Thank you, Chairman Wyden, and thank you, 
Ranking Member Crapo.
    I am pleased to have the opportunity to introduce Professor 
Lily Batchelder of Massachusetts, who has been nominated to be 
our next Assistant Secretary for Tax Policy. Now Lily already 
has an impressive track record of fighting for equity and 
efficiency in our tax system, in government and in academia. 
And she has the expertise to get the technical details of tax 
policy right to make sure that it really delivers on creating a 
fair system that works for everyone.
    Lily received her bachelor's degree in political science 
with honors and distinction from Stanford University, her MPP 
from the Harvard Kennedy School, and her J.D. from Yale Law 
School. She is currently the Robert C. Kopple Family Professor 
of Law at NYU School of Law, where her academic research has 
covered many critical issues, including making sure that the 
rich pay their share, all the way to examining how tax policies 
impact families.
    She has written about the benefits of a wealth tax--go, 
Lily!--and she has detailed how Trump's child care proposals 
have left out low-income families. She also recently co-founded 
NYU's Tax Law Center. It serves as a strong public interest 
voice on tax laws to balance out lobbying by the wealthy and 
big corporations.
    Lily also has extensive public service experience. She was 
appointed by President Obama to serve as Deputy Director in the 
White House National Economic Council and Deputy Assistant to 
the President, where she was responsible for tax and budget 
issues, including tax reform, retirement policy, and low-income 
benefits. She also served as majority Chief Tax Counsel on the 
Senate Finance Committee and thus, as the chairman pointed out, 
is well-known already to many of us.
    This is a critical time for tax policy. We must make big, 
bold investments in American families. And we must make equally 
big and bold changes to our tax policies to make sure that the 
wealthy and the giant corporations are paying their fair share.
    Lily Batchelder has the experience, she has the expertise, 
and she has the principle to work with Congress on the 
legislation and on the implementation that are required to make 
much-needed reforms to our tax policy.
    Lily is a person of deep values and great integrity. So I 
want to say ``welcome,'' Professor Batchelder. We are pleased 
to have you here. We are looking forward to today's discussion. 
And, like Senator Bennet, I urge all of my colleagues to get to 
know you. I believe they will want to support you in this 
hearing, and want to support you in your work at the Department 
of the Treasury.
    Thank you.
    The Chairman. Thank you, Senator Warren.
    And now we have our nominees. What we have to do is, we are 
going to hear their openers, and then we have a standard set of 
questions, and then the members will start talking about what 
they are interested in.
    Ms. Batchelder, please?

    STATEMENT OF LILY LAWRENCE BATCHELDER, NOMINATED TO BE 
ASSISTANT SECRETARY FOR TAX POLICY, DEPARTMENT OF THE TREASURY, 
                         WASHINGTON, DC

    Ms. Batchelder. Ranking Member Crapo and members of the 
committee, thank you for the opportunity to appear before you 
today. And thank you, Senator Warren, for the very kind 
introduction, and to Chairman Wyden.
    It is an honor to appear before this committee, having 
served as the Chief Tax Counsel under former Chairman Baucus 
for 4 years. And being a tax person, that was a dream job, and 
I am humbled today to be considered for another dream job, 
which is serving as Treasury Assistant Secretary for Tax 
Policy.
    I have great respect for this committee and the critical 
nature of this work. We face immense challenges as a country in 
navigating the pandemic and the economic recovery, in tackling 
long-term fiscal challenges, and in doing so in a way that 
increases opportunity for all Americans.
    If I am fortunate enough to be confirmed, I would strive to 
be a strong partner to you in this work. I have spent most of 
my career working on tax policy, and I am passionate about its 
role in advancing shared prosperity and economic mobility. Tax 
revenue funds many of our critical social programs. Tax 
benefits can curtail or exacerbate our disparities by income, 
wealth, race, ethnicity, gender, and geography.
    At the same time, well-constructed and well-implemented tax 
policy can minimize any associated gaming or distortions to 
business activity, while poorly constructed policy can do the 
reverse,
    This is one of the things I love about tax. It is 
simultaneously about high-level values, but also practical 
technical details that create opportunities to work across the 
aisle.
    There are many aspects to this position which I look 
forward to, if I am confirmed. I would hope to contribute to 
and advance President Biden's policy agenda to further our 
economic recovery, build back better, promote racial and gender 
equity, and address the climate crisis.
    This would include working with you and your staffs to make 
sure any agreements you reach are drafted in technically sound 
ways. I would also work to ensure that Treasury issues timely 
and sound guidance on tax issues consistent with congressional 
intent and responsive to input from a broad range of 
stakeholders.
    Finally, I would strive to serve as a strong partner to the 
IRS on tax implementation and administration. This would 
include new programs they have been tasked with implementing 
like the fully refundable Child Tax Credit, and also their 
ongoing duties like taxpayer service.
    For many years the IRS has been asked to undertake a very 
large and expanding set of responsibilities with, until 
recently, flat or declining funding. I would work to assist 
them in any way the Office of Tax Policy could, because we all 
benefit from a well-
functioning IRS.
    If confirmed, I am committed to engaging with you on a 
bipartisan basis. Over the course of my career, I have worked 
in the public, private, academic, and nonprofit sectors. These 
experiences have taught me to see tax policy from multiple 
perspectives and how to work effectively and constructively 
with people who may have different views than my own.
    My family could not join me today because of the pandemic, 
which I see as a good thing, because we have a 15-month-old 
daughter, Maia, who would probably be tearing apart this 
hearing room and waving to each of you, but she reminds me 
every day why public service is important: to make a better 
world for her, and even more so for all the children growing up 
without the financial security and other advantages we are 
lucky to be able to provide her with.
    I want to thank my family, especially my partner Peter, my 
parents, brothers, and in-laws, for their love and support. 
Without that support, including their care for Maia, I probably 
would not be in a position to undertake this role with such 
large responsibilities that I take so seriously.
    Thank you for considering my nomination, and I look forward 
to your questions.
    [The prepared statement of Ms. Batchelder appears in the 
appendix.]
    The Chairman. Thank you, Ms. Batchelder.
    Mr. Davidson?

   STATEMENT OF JONATHAN DAVIDSON, NOMINATED TO BE ASSISTANT 
SECRETARY FOR LEGISLATIVE AFFAIRS, DEPARTMENT OF THE TREASURY, 
                         WASHINGTON, DC

    Mr. Davidson. Thank you, Chairman Wyden. Mr. Chairman, 
Ranking Member Crapo, members of the Finance Committee, I 
appreciate the opportunity to appear before you today. I am 
honored by President Biden's nomination and having a chance to 
serve under Secretary Yellen.
    And, Senator Bennet, I would like to express deep gratitude 
to you for your way overly kind introduction. And all of the 
words that you said, I could easily turn around and say about 
you. I am deeply grateful for the work I have been able to do 
with the Senator. I have spent almost half my career with him, 
and I have learned so much about the long game, and decency, 
and thoughtfulness from Senator Bennet and his team.
    I am also so proud of our work that we were able to do 
together during that time. Most recently, it has been an 
absolute thrill to see his and Senator Brown's American 
Families Act, not to be mistaken for the American Families 
Plan, become law, which will lift nearly 50 percent of this 
country's children out of poverty in one single year.
    I would also like to thank Senator Warner, from whom I have 
learned so much as well, for his friendship and extraordinary 
support. And, as Senator Bennet mentioned, I started my career 
with Paul Sarbanes, who passed away late last year. He was 
another mentor, as is Senator Bennet, and is dearly missed by 
me and my family. He was someone who made me understand and 
appreciate the historical conscience of the Senate. And I want 
to extend gratitude to John Sarbanes, his son, who has been so 
successful in the House of Representatives and helped me learn 
to navigate the ways of that body.
    Finally, and most importantly, I would like to thank my 
family--my kids Leo, Mia, and Serena--who all make us so proud 
almost all of the time. And I know nominees often throw around 
hyperboles, but my wife Erin Sheehy is the reason I have been 
able to make it through anything difficult in my adult life. 
She has been absolutely critical throughout this process, and I 
have said more than a few times she has carried me and my 
family.
    And the same goes for my brother, who is the best older 
brother anyone could ever have, and to my father, who has been 
an example of the very best in parenthood, and in life 
generally. He taught me about politics, diplomacy, and public 
service. And finally, my mom, whom we lost earlier this year, 
but whose relentless commitment to the underdog continues to 
inspire me every day. Thank you, and I love you all.
    The partnership between Treasury and this committee, and 
Congress overall, is so important to the Federal Government and 
to the country. Just like all of you, the Treasury Department 
is working hard to help us recover from the pandemic and the 
related economic crisis.
    Treasury is implementing significant relief and recovery 
efforts and working on policies to strengthen our economy, to 
repair gaps in our Nation's infrastructure, and to remedy 
uneven access to the American Dream. And it has done all of 
that work on top of its substantial day-do-day responsibilities 
like financing the government and implementing foreign economic 
sanctions.
    I fully appreciate how much we need to work closely with 
this committee in its legislative and oversight functions to 
succeed in these efforts. If I am confirmed, my goal will be to 
serve as a reality broker between Treasury and Capitol Hill. 
Where we can provide information to members of Congress to help 
them do their jobs and aid their constituents, we should do so 
fully. Where we cannot, we should provide a clear and cogent 
explanation as to why not.
    I am privileged to have spent the majority of my career 
working on Capitol Hill. I have learned so much about trust and 
character up here, and I have also learned to be cognizant of 
the fact that there is always even more that I do not know. I 
recognize that almost everyone who comes to work here has good 
intentions. Most of the members and staff are true patriots who 
want to help our country.
    I also know that most of the good work we can all do 
together happens beneath the political din and sensationalized 
conflict, something I learned from Senator Bennet. If 
confirmed, I will listen to you and work with you to make real 
progress for every American.
    To conclude, I want to thank the chairman, the ranking 
member, and their staffs. We all recognize how much work, in 
addition to nominations, everyone has to do on this committee. 
And I am grateful for the effort it took to prepare for and 
conduct this hearing.
    Thank you, and I look forward to your questions.
    [The prepared statement of Mr. Davidson appears in the 
appendix.]
    The Chairman. Thank you, Mr. Davidson.
    Dr. Harris?

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

    Dr. Harris. I would like to begin by thanking Chairman 
Wyden and Ranking Member Crapo for considering my nomination. I 
would also like to express heartfelt gratitude to President 
Biden for his nomination, and to Secretary Yellen for placing 
her trust in me to serve in this role.
    Please allow me to also acknowledge my oldest daughter 
Lillian, who is behind me. As a father, I have tried to instill 
in my daughters a deep appreciation for the value of democracy, 
and it is a true privilege to invite Lily to witness the inner 
workings of our democratic system firsthand.
    Seated here today, I suspect they share the same humility 
felt by many others before me. It is truly an honor to be 
considered as a successor to a storied group who have held this 
role previously, including economists of remarkable talent 
serving under both the Republican and Democratic 
administrations.
    Prior Assistant Secretaries for Economic Policy include 
Phill Swagel, Rich Clarida--now respectively CBO Director and 
Vice Chair of the Fed--who held this role under President 
George W. Bush. Prior Assistant Secretaries also include Janice 
Eberly, Karen Dynan, and Alan Kruger, all of whom I have had 
the privilege to report to at some point in my career, and all 
of whom I admire deeply.
    Should I be confirmed, I will strive to live up to the 
legacies set by these economists and others who have served in 
this role. Under the leadership of these prior Secretaries, the 
Office of Economic Policy at the Treasury Department has earned 
a reputation for providing unbiased, high-quality empirical 
analysis to the Treasury Secretary and other policymakers.
    As an ardent supporter of evidence-based policy, I regard 
this approach as a critical step to making sound and effective 
policy. After roughly 2 decades spent working in the policy 
arena, one of the most important lessons I have learned is that 
good policy usually follows good analysis.
    Indeed, I believe that a commitment to following the data 
and evidence should help lead our economic decision-making as 
we transition between recession and recovery. In times of 
marked uncertainty such as the current period, it is my view 
that embracing robust and timely analysis is the only way to 
get it right.
    I cannot tell you with certainty how our economy will 
emerge from this crisis, but I do know that we will better 
understand the challenges facing our country if we prioritize 
data and evidence.
    If confirmed, I am eager to work with the members of this 
committee and your staffs on a collaborative and bipartisan 
basis. As a former Hill staffer, I am well aware of the 
importance of cooperation between the executive and legislative 
branches, and understand that superior policy is a byproduct of 
robust collaboration and frequent communication.
    This preference for collaboration is further driven by my 
deep respect for this committee, which regularly confronts the 
most vexing and important economic challenges facing our 
country. It is not lost on me that I have much to learn from 
the insight of this committee's members and its staff.
    I would like to conclude by thanking my family--my wife 
Jessica and my daughters Lily, Juliette, and Annie--for their 
support and patience. Through my three prior stints in public 
service, they have learned that my desire to serve the American 
public comes at a cost to them, and I am grateful that they are 
willing to share my time with the U.S. Treasury Department.
    Thank you for your consideration.
    [The prepared statement of Dr. Harris appears in the 
appendix.]
    The Chairman. Thank you very much.
    Next is Dr. Liang. Welcome.

  STATEMENT OF J. NELLIE LIANG, Ph.D., NOMINATED TO BE UNDER 
  SECRETARY FOR DOMESTIC FINANCE, DEPARTMENT OF THE TREASURY, 
                         WASHINGTON, DC

    Dr. Liang. Thank you, Chairman Wyden, Ranking Member Crapo, 
and members of this committee. Thank you for the opportunity to 
appear before you today.
    I am truly honored to have been nominated by President 
Biden to be Under Secretary for Domestic Finance at the 
Department of the Treasury, and by the trust of Secretary 
Yellen. I am grateful to the committee for considering my 
nomination. I am also grateful for the support and love of my 
husband of 37 years, Ken Howard, who is here with me today, and 
my children Greg and Kim, who may be watching.
    I would also like to recognize my parents, who immigrated 
to this country many decades ago with very little beyond their 
life value. But they believed that in this country, if their 
children went to school, worked hard, and committed to family 
and community, they would have many opportunities to contribute 
to this country's potential and share in its prosperity.
    I am an economist by training and have spent many years in 
public service. I have studied extensively and have seen up 
close how financial institutions and financial markets effect 
economic and financial stability. I am committed to applying 
those insights from that experience--as well as some data, 
research, and broad outreach--to policymaking.
    The pandemic revealed fragilities in the economy, 
especially in some communities that were least able to bear the 
burden. It also revealed the fragilities in parts of the 
financial system. If confirmed, I will work to support the 
President's and the Treasury Secretary's priorities, and work 
with this committee to promote a financial system that will 
lead to more sustainable and more equitable economic growth.
    In doing so, I will build on the strength of the U.S. 
financial system, which is the world's strongest, providing 
trillions of dollars of credit to households, businesses, and 
governments each year to support their spending and 
investments. This system has demonstrated time and again its 
ability to adapt to new changes in demand for services and in 
technologies, bringing about significant changes in how 
financial services are delivered.
    New technology today, such as in digital assets, will 
likely lead to more significant changes. If confirmed, I look 
forward to working with members of this committee and others to 
ensure that the evolving financial system continues to meet the 
needs of the American people. I will work to improve credit 
access to the underserved communities, including through 
implementation of programs at Treasury that provide both 
capital and technical assistance to small businesses and 
underserved communities.
    In addition, while our dynamic financial system spurs 
growth, it can also lead to regulatory gaps over time. I will 
work to ensure we are adopting policies that recognize these 
changes, to ensure customers and investors are informed and 
protected and risks to financial stability are mitigated.
    In addition, a critical responsibility for Treasury is to 
manage the costs of government financing. The Treasury 
securities market is the deepest, most liquid market in the 
world. The country benefits from the special attributes of 
Treasury securities. I believe it is critical that we ensure 
the Treasury market functions well in periods of stress.
    If confirmed, I will work to provide an assessment of 
recent changes in the market and recommend policies as needed 
to ensure a robust, resilient Treasury securities market. I 
recognize these efforts would take significant communication 
with the members of the staff and of this committee if I were 
to have the honor of serving in the Treasury Department, and I 
would very much look forward to working closely with you and 
your colleagues.
    Thank you again for the privilege of appearing before you 
today, and I look forward to answering your questions.
    [The prepared statement of Dr. Liang appears in the 
appendix.]
    The Chairman. Thank you very much, Dr. Liang.
    Now for all of you, there are some obligatory questions I 
am required to ask of each of you before we turn to member 
questions.
    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. Harris. No.
    Ms. Batchelder. No.
    Dr. Liang. No.
    Mr. Davidson. No.
    The Chairman. Second, 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. Harris. No.
    Ms. Batchelder. No.
    Mr. Davidson. No.
    Dr. Liang. No.
    The Chairman. Third, 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. Liang. Yes.
    Ms. Batchelder. Yes.
    Dr. Harris. Yes.
    Mr. Davidson. Yes.
    The Chairman. Finally, do you commit to provide a prompt 
response in writing to any questions addressed to you by any 
Senator of this committee?
    Dr. Liang. Absolutely.
    Dr. Harris. Yes.
    Ms. Batchelder. Yes.
    Mr. Davidson. Yes.
    The Chairman. Very good. I appreciate all of your 
responses.
    We are now going to go to the 5-minute rounds for members. 
I am going to start with you, Professor Batchelder.
    To me, as our tax policy point person, the debate really 
starts with the fact that there are two tax systems in America. 
There is one tax system for the nurse in Medford, OR who is 
treating COVID patients, and that nurse is required to pay 
taxes with every single paycheck. And then there is another tax 
system in America, and that is for billionaires who have 
accountants and lawyers who are deeply skilled, and to a great 
extent their taxes are optional. They can pay what they want 
when they want to.
    So, given this double standard with respect to taxes in 
America, it is especially important to make sure that the 
Internal Revenue Service collects the dollars that the American 
people are owed. And I am going to be introducing legislation 
shortly with colleagues to make sure that the IRS has the tools 
to be actually able to collect from wealthy tax cheats those 
funds that the American people are owed.
    So, my first question to you is, what is your sense of the 
size of the tax gap? And then, how often should the Internal 
Revenue Service update the amount? Because, when we looked at 
it last, it was like practically from yesteryear. And so, tell 
us, by way of starting, your sense of the size of the tax gap, 
and how often should the Internal Revenue Service update it, 
please.
    Ms. Batchelder. Thank you for the question, Mr. Chairman. 
And the tax gap, I think, is a critical issue that I would look 
forward to working on, if confirmed.
    In terms of the size of the tax gap, the most recent 
estimate is based on tax years 2011 to 2013. And overall, 
Treasury recently put out a report estimating that the tax gap 
amounts to at least $7 trillion over the next 10 years.
    I think that report from tax years 2011 to 2013 is probably 
an under-estimate, for several reasons. One is, it is just 
based on old data. The economy has grown, so you would need to 
update it for the growth of the economy and inflation. The 
second is that the IRS budget has been cut substantially as a 
share of GDP since then. And so probably the tax gap has grown 
as a result of weaker enforcement and weaker taxpayer services.
    Third, the tax gap is calculated based on very detailed 
audits of a small number of taxpayers. And those audits can 
miss a lot. So, there is a long line of research finding that 
the tax gap is especially large when there is limited or no 
information reporting. And you mentioned a nurse working with 
COVID patients probably has all of her income reported on her 
W-2. But there are other forms of income that are not wage 
income that there is no information reporting on. And those are 
disproportionately types of income that are earned by high-net-
worth individuals and large corporations.
    And those types of wealthy taxpayers also can severely 
outgun the IRS. So I remember in private practice I briefly 
worked on a client matter for a high-net-worth individual who 
had something like 30 different partnerships that they owned. 
And all these partnerships owned each other. And I could not 
make heads or tails of the issue, and they were supposed to be 
our client. So I can just imagine what it would be like to be 
an IRS employee trying to figure this out.
    The Chairman. I want to get into one other area, just on 
the issue of how often you think it would be appropriate for 
the IRS to update.
    Ms. Batchelder. Yes. That is something that, if confirmed, 
I would love to work on, it being much more frequent, ideally 
annually. I would certainly need to get briefed by Treasury 
staff and the IRS, but I think we can learn a lot by more 
frequent reporting.
    The Chairman. Let me get in one more. And that is, tax 
policy to a great extent is also about how we make this country 
more competitive, how we get the high-skill, high-wage jobs 
that we all want for our constituents.
    In this regard, Senator Brown and Senator Warner and I have 
all come together to lay out a proposal to really have a 
framework for international taxation. And in particular, what 
triggered my interest were these examples of companies stashing 
profits in tax havens instead of investing in America. And 
those are the kinds of changes that the three of us are trying 
to put in place.
    Give us, as part of my final question, your sense of how 
the committee ought to look at tax policy as it relates to 
competitiveness and making sure it is a tool to get those high-
skill, high-wage jobs for Americans?
    Ms. Batchelder. Yes. I share your concern about 
competitiveness. I think that should be one of the things that 
we always look at when evaluating tax policy proposals. And in 
the international sphere, we should also look very carefully at 
incentives to invert.
    And I am aware of the proposals that you and your 
colleagues have put forth and would be very eager to work with 
you, if confirmed, on the Office of Tax Policy assisting in any 
way we can. International tax is very technical, so I would be 
eager to work on that.
    The Chairman. We will look forward to it. Obviously, there 
are a lot of pieces that go into the mix of ensuring we can 
out-compete everybody, whether it is in education or 
infrastructure and the like. We are going to need your counsel 
on the tax issues.
    Senator Crapo?
    Senator Crapo. Thank you very much, Mr. Chairman.
    And, Ms. Batchelder, I would like to start out with you as 
well. You may be aware that yesterday I sent a letter to 
Secretary Yellen with strong concerns about her strategy at the 
OECD.
    I am very concerned that, from what I understand, the 
administration's proposal is to proceed with doubling our GILTI 
tax rate, the only existing international minimum tax that is 
in place, before there is even an OECD agreement in place with 
regard to other countries moving.
    I am also very concerned about whether the administration 
will insist that digital service taxes that unfairly 
discriminate against U.S. companies be eliminated as a 
condition in these negotiations.
    Could you please respond? First, do you agree that the 
United States should move ahead, changing its own tax policy 
with regard to the GILTI rate, before the OECD negotiations are 
even concluded?
    Ms. Batchelder. So I should say first that I would look 
forward to getting briefed on these issues, if I was lucky 
enough to be confirmed. In general, there are both the 
negotiations, as I understand it, going on with the OECD and 
then legislative proposals that the President has put forth. 
And if I was confirmed, I would be very eager to assist in 
conversations about those proposals. They would of course 
require the approval of Congress, and I would be eager to work 
and discuss areas of cooperation on a bipartisan basis.
    Senator Crapo. What about digital services taxes? Do you 
believe that a ban on digital service taxes, or at least 
managing them in a way that is fair and equal, should be a part 
of any agreement at the OECD?
    Ms. Batchelder. As I understand it, Treasury has put forth 
a different proposal than the previous discussions under which 
some other countries had been proposing digital service taxes. 
In general, I have a bias against taxes that target a specific 
industry, and certainly against those that are focused just on 
U.S. companies. And even if it was just an industry as a whole, 
I think there would need to be a very strong reason why a tax 
would focus on a specific industry.
    Senator Crapo. Well, I encourage you, if you are confirmed, 
to use your voice at Treasury to advocate that the United 
States not enter into an agreement, or not pursue raising our 
taxes, before there is even an OECD agreement, and that we 
protect against discriminatory digital taxes.
    Mr. Davidson, on the same issue, Treasury surely has 
performed analysis of how proposals that it is contemplating 
will affect U.S.-headquartered companies. Will you commit to 
advising Treasury to provide Congress with quantitative and 
qualitative analysis that it has performed on its international 
tax proposals in the OECD framework, if you are confirmed?
    Mr. Davidson. Excuse me. I was on mute. Treasury would like 
very much to work in a collaborative way, and to provide 
analysis, and hopefully we will meet that standard. If I am 
privileged to be confirmed, I would very much look forward to 
working with you and your staff on providing that kind of 
analysis.
    Senator Crapo. Well, thank you very much.
    And, Dr. Liang--actually, I want to hold off and move to 
Dr. Harris.
    Again, the President has, and various administration 
officials have, identified that under the administration's tax 
proposals nobody making under $400,000 a year will have their 
taxes increased. ``Nobody'' means an individual, as I read it.
    However, at various times some administration officials 
have changed that description to be a family, rather than an 
individual making less than $400,000, would not pay increases 
in taxes.
    Given that you are currently employed and working at 
Treasury, is it your understanding that the administration's 
position on taxation is that no individual making under 
$400,000 will pay more in taxes, or is it that no household 
making under $400,000 will pay more in taxes?
    Dr. Harris. Senator, it is my understanding that in the 
American Families and American Jobs Plan that was laid out by 
the Biden administration, the definition of the taxpayer who 
would be protected from any tax increase of any sort differs 
slightly for single taxpayers versus married taxpayers. And for 
single taxpayers, it is around $460,000, and for married 
taxpayers it is in the low 500,000s. I am sorry I do not have 
the exact numbers.
    Senator Crapo. All right; thank you.
    Dr. Liang, my time has run out. I was going to ask you an 
FSOC question, but I will send it to you in writing. Thank you.
    The Chairman. And just so we are clear on this question, 
the discriminatory digital tax--and I see Senator Grassley 
here, and he and I have teamed up on this for years. This is 
the equivalent of a digital dagger aimed directly at our high-
skill, high-wage companies. And there is going to be bipartisan 
opposition to it.
    Next is Senator Cantwell.
    Senator Cantwell. Thank you, Mr. Chairman. Thank you so 
much for the nominee's willingness to answer questions.
    I will start with Ms. Batchelder. I know that the President 
wants to do something to make housing more affordable, and my 
colleagues Senator Young, Senator Wyden, and I, and Senator 
Portman, have all led the charge of trying to increase the Low-
Income Housing Tax Credit. It is a very important tool.
    In 1986, the Low-Income Housing Tax Credit was started and 
built nearly 3.5 million affordable housing units. Our bill 
would try to rehabilitate over 2 million affordable housing 
units over the next 10 years. What is the President's plan for 
extending the Low-
Income Housing Tax Credit?
    Ms. Batchelder. I share your concern about the affordable 
housing crisis in this country. As I understand it, the 
President's American Jobs Plan includes a number of proposals, 
both tax and non-tax, to expand access to affordable housing, 
including a substantial expansion of the Low-Income Housing Tax 
Credit. And, if confirmed, I would look forward to working with 
you on these proposals and any others that would address this 
important issue.
    Senator Cantwell. So is there something right now that you 
think needs to change in the tax credit to make it an improved 
product?
    Ms. Batchelder. If confirmed, I would certainly want to get 
briefed on the issue. But as I understand it, the President has 
proposed a large expansion to it. And we certainly, in 
Washington State and elsewhere, need a lot more affordable 
housing. And so I think looking at ways to make it more 
effective and more available would be important.
    Senator Cantwell. Thank you.
    Another issue that I believe needs attention is the unfair 
competition that has basically impacted local journalism. In 
the COVID relief bill, we were able to propose a bipartisan 
support for making sure that newspapers could continue to 
retain a workforce. They lost--a huge impact--some as many as 
70 percent of their workers over the last decade because of 
what has been a challenging transition to digital formats, and 
also some unfair competitive practices.
    We are looking at continuing the focus of this, of the 
COVID bill, because that will run out in some period of time, 
but we do believe that these legal issues about either 
antitrust, or unfair competitive practices, will continue for 
some time. We think the legal battle and legal challenges to 
that will take a while.
    So I want to know if you or the administration are 
supportive of a continued tax incentive for retaining and 
keeping a local journalism workforce in the United States?
    Ms. Batchelder. That certainly sounds like a very important 
issue, Senator. And if I was confirmed, I would look forward to 
getting briefed on it and discussing it with your staff and 
working together.
    Senator Cantwell. If you could take that to your colleagues 
at Treasury, because we are definitely going to be proposing 
this. We are definitely going to want to continue to have 
competitive voices. I would love to even see the Treasury 
Secretary speak out about this. Why? Because we all know that 
perfect information helps us have functioning markets. And in 
fact, when we have not had perfect information, we have not had 
quite a functioning market.
    So competitiveness in journalism, the many voices to 
basically continue to review and get information correct, I 
think is essential to our economy. And so I will hope that 
people will take that information and help be supportive of 
this effort to retain this workforce, instead of continuing to 
lose, at a very dramatic moment, what is the essence of 
competitive voices.
    Some colleagues have suggested we are just going to have 
one publication over here, and one publication over there, and 
they are going to speak with these voices. That is not what our 
country has been built on. Our country has been built on the 
diversity of voices. And again, as I said, help us get not just 
FOIA and information, but really help us oversee it and make 
sure that our markets and the information that it takes for our 
economy to function actually have the right and perfect 
information.
    So, I look forward to hearing from both Treasury and the 
Biden administration on this issue.
    Thank you, Chairman Wyden.
    The Chairman. Thank you, Senator Cantwell.
    Next will be Senator Grassley, followed by Senator Carper.
    Senator Grassley. Ms. Batchelder, there was a big concern 
in my county meetings that I had over the last Easter break, 
and May break, about the stepped-up basis. Farmers and small 
businesses are very concerned about it.
    I want to give you a little bit of history that you 
probably know the details of as much as I do, but Congress 
experimented with something similar in the President's stepped-
up basis proposal in the Tax Reform Act of 1976. This proposal 
did not subject the gains to an immediate tax, but generally 
replaced the stepped-up basis with a carry-over basis. This 
proved very unworkable and led to outcries.
    I was just a member of the House at that time. I was not 
even on the Ways and Means Committee. But this outcry led me to 
work with then-Senator Harry S. Byrd of Virginia. And through 
what we did at that particular time, Congress almost 
immediately postponed the rule and ultimately repealed it in 
1980.
    Now the President's proposed transfer tax has some of the 
same problems of trying to determine basis after an owner has 
passed, particularly if the farm has been in the family for 
generations. It is almost impossible to, or nearly impossible 
to determine basis.
    So my question to you--but I want to put two questions 
together. So the first question is, given this proved 
unworkable in 1976, why do you think this time it is any 
different? And then, in regard to the second question along the 
same issue of stepped-up basis, the President's description of 
the proposal claims that it will have protections for family 
farmers and businesses, but has no specifics.
    So, one, about the unworkable proposal in 1976, why is it 
any different this time? And can you provide any detail on what 
protections family farmers and small businesses would have so 
we do not have a repeat?
    Ms. Batchelder. Thank you very much for the question, 
Senator. I am aware of the provision that was passed in the 
1970s and how it was repealed before it was enacted or went 
into effect.
    As I understand it, it was not a particularly well-designed 
provision. Actually, in the Bush tax cuts there was a provision 
that enacted carryover basis for the year of 2010. It was 
repealed after 2010. But we did have carryover basis during 
that year under the Bush tax cuts. And I have not heard of very 
large issues that happened because of that, but I would 
certainly want to learn more and would be eager to work with 
you on this issue.
    In terms of the treatment of family farms and businesses, 
as I understand it reading the proposal, it would delay any tax 
due for all family farms and businesses until they were no 
longer owned and operated by the family. And there are some 
precedents for this kind of provision that I worked on back in 
my time with former Chairman Baucus, but I would be eager to 
work with you and your staff, if confirmed, to make sure that 
that was drafted in a way that was workable and technically 
sound.
    Senator Grassley. Please understand that this is a major 
concern, particularly in agriculture, but I think also small 
business. I will direct my last question to you as well.
    The President and many of my Democrat colleagues often 
complain about companies paying zero tax. However, frequently 
the reason a profitable corporation pays no tax is because it 
is eligible for tax incentives such as green energy incentives. 
Recently there has been a proposal from both sides of the aisle 
to make incentives in the green energy space essentially 
refundable by providing a 
direct-pay option. This option is included in the chairman's 
technology-neutral proposal. Given concerns about companies 
paying no tax, do you have concerns that a direct-pay option 
could result in companies having a negative tax liability?
    Ms. Batchelder. Well, I would certainly want to get briefed 
in more detail on the proposals. But in general, it strikes me 
as valuable to look at technology-neutral incentives for clean 
energy. And I guess the rest of your question was about zero 
tax liability. I would say in general I have some work looking 
at taxpayers' payments over time, and I find it helpful to look 
at what it is individuals or companies are paying over time, 
rather than a 1-year snapshot.
    Senator Grassley. Thank you, Mr. Chairman.
    The Chairman. Thank you, Senator Grassley.
    Senator Carper is next.
    Senator Carper. Ms. Batchelder, welcome home. Great to see 
you. We want to welcome Benjamin Harris, and Nellie Liang, and 
Jonathan Davidson as well. Thank you. Congratulations on your 
nominations, and our thanks to you for your willingness to 
serve. Our thanks to your families, those who are present and 
those who are not, for their willingness to serve with you as 
well.
    If I could, Ms. Batchelder, in your testimony you state 
your desire to be a strong partner to the IRS. Should you be 
confirmed, how would you work with the IRS to effectively 
address the tax gap? Our friend, Commissioner Rettig, was 
sitting right where you are sitting several months ago, and he 
told us that if we would provide additional dollars for 
enforcement for the IRS, we would bring in somewhere between $5 
and $7 in additional revenue for every $1 that we invested. It 
sounds like a pretty good return to me.
    How would you help make that happen? Thank you.
    Ms. Batchelder. Thank you, Senator, for the question and 
the work on this important issue. And I would be very eager, if 
confirmed, to work with Commissioner Rettig and work with all 
of you and your staff on proposals to address the tax gap. As I 
understand it, the administration has put forward a proposal to 
expand investment in IRS resources and to increase information 
reporting by asking large financial institutions to provide 
some more information. And both of those could raise a 
substantial amount of revenue without changing the law in terms 
of what taxpayers owe, whatsoever.
    And there are a bunch of different ways that this happens. 
If the IRS receives more resources, they not only are able to 
look at more returns where there are--you know, a relatively 
small number of taxpayers do not pay the taxes they owe. The 
vast majority of Americans do pay all the taxes that they owe.
    It would also allow the IRS to invest in its IT systems, 
which are very antiquated. The foundation of those IT systems 
is written in a language called Fortran that, I confess, 
predates me, and I am not particularly young. And it would also 
allow the IRS to expand taxpayer services. And there is also 
evidence that when there are more taxpayer services, when 
taxpayers are able to reach someone on the phone, that 
increases their compliance.
    So, for all of these reasons, I would look forward to 
working with you on these proposals, and any others.
    Senator Carper. Thank you for that response.
    Let me ask one question for all the panelists. What tools--
I chair the Senate Committee on Environment and Public Works. 
We focus usually on climate change and other issues including, 
this very week, surface transportation legislation. But for 
each of you, what tools and policy levers under the 
jurisdiction of your prospective roles in Treasury should we 
utilize to tackle climate change and build a clean-energy 
economy? What tools and policy levers under the jurisdiction of 
your prospective roles in Treasury should we utilize to tackle 
climate change and build a clean-energy economy?
    And Jonathan Davidson, would you go first, please?
    Mr. Davidson. Thank you, Senator Carper, for that question.
    Senator Carper. Please be succinct, if you will, so 
everybody can make a comment. Go ahead, Jonathan.
    Mr. Davidson. Just briefly, I know the others will have 
responses, but I think leadership and collaboration are the 
tools that we should use. And if I am privileged to be 
confirmed in my role, I will look forward very much to working 
with you. I know how much of a leader you are in this area and 
in the cross-over between the infrastructure provisions that 
this administration is proposing and the need to address 
climate change. And so we look forward to your partnership with 
us, and vice versa.
    Senator Carper. Thank you so much.
    Nellie Liang? Dr. Liang?
    [Pause.]
    Senator Carper. I cannot hear you.
    Dr. Liang. Thank you, Senator. Investors are seeking 
information about climate change, and banks need to better 
assess their risks. At Treasury, we are working to help develop 
information to investors so they can make better informed 
investment decisions.
    The Secretary, as Chair of the Financial Stability 
Oversight Council, is also working with regulators to assess 
those risks. They are not, however, directing banks whom to 
lend to, or what investments to make, but are working to 
provide the information. Thank you.
    Senator Carper. Thank you.
    Dr. Harris, please.
    Dr. Harris. Thank you, Senator. I know you are a leader in 
this area. So I agree with Jonathan's answer around 
collaboration. I agree with Nellie's answer around 
transparency. I might also add that now is an important period 
for robust public investment in the way we produce and consume 
energy. So this can include, for example, subsidies for more 
efficient household appliances. It can also include policies 
like the clean energy standards that were included in the JOBS 
Act.
    Senator Carper. Lily, just a brief comment, please.
    Ms. Batchelder. Yes, I understand that the President has 
put forth a number of proposals in this space that I would be 
eager to work with the committee on, if confirmed, and I also 
know that you are marking up an energy tax bill tomorrow. So I 
think that is another example of something that, if confirmed, 
I would work on.
    The Chairman. Thank you, Senator Carper.
    Senator Portman is next, if he is there.
    Senator Portman. Thank you, Mr. Chairman. First of all, I 
welcome Professor Batchelder back to the committee. And for all 
the other Treasury nominees, you all have an important role to 
play here as we try to get this economy back on track post-
pandemic.
    We are very concerned, as you know, about what we see in 
terms of inflation. We are concerned about the jobs market. We 
have 8.1 million jobs open right now, which is the most in the 
history of our country. And a lot of employers in all of the 
States we represent are telling us they just cannot get 
workers.
    An interesting Wall Street Journal article today is about 
what all of us would suspect, which is that companies are 
learning how to automate more and spending more of their 
resources on technology and automation to avoid having to worry 
about not having enough workers.
    That is not a good sign, in my view, although it may lead 
to a more efficient economy. It may lead to, also, a lot of 
these jobs not being available in the future. And that concerns 
me a lot, and it is one reason we need to get back to work.
    The last thing we need to do is to make ourselves less 
competitive. We have a bill on the floor right now about making 
America more competitive compared to China and other countries, 
and yet we are talking about changes on the international tax 
front that would, once again, make America's workers 
uncompetitive globally. And I just do not get that.
    Professor Batchelder, we worked on this issue together when 
you were working with Senator Baucus, and we agreed as a 
general rule that we needed to go to a territorial system, and 
we needed to be sure that we allowed repatriation to occur 
without the big tax hurdle. And sure enough, that has happened: 
$1.6 trillion has come back, repatriated since the 2018 time 
period when the 2017 bill became effective; higher R&D here in 
the United States, more capital investment to the tune of 
hundreds of billions of dollars. So these are all good things, 
in addition to, of course, wages going up, which everyone 
expected who believed that by making us more competitive, we 
were really making our workers more competitive, which is what 
the CBO thinks.
    So, with that background, I would like to ask you briefly, 
Ms. Batchelder, about the tax increases, including this tax 
increase in what is called the Global Intangible Low-Taxed 
Income, also known as GILTI. It is what we have put in place as 
sort of an alternative to a minimum tax. Other countries do not 
have it at all. As you know, the vast majority of OECD 
countries do not. But we have put it in place, thinking this is 
a good thing to keep income from being shifted to low-tax 
jurisdictions.
    And now there is a proposal to increase the GILTI tax 
substantially--in fact, to double it. I would note that Deputy 
Assistant Secretary Clausing recently publicly confirmed 
Treasury's position is to retain the foreign tax credit haircut 
at 20 percent on GILTI also, yielding a rate of about 26 
percent plus.
    So I guess my question to you would be, explain to me how 
you feel about this. I mean, how can a U.S. company possibly 
compete globally, let us say a company in the United States 
that is competing globally with other global companies, when 
they are not facing this GILTI tax at all and yet we are saying 
that the U.S. company would have to pay 21 percent, maybe as 
high as 26 percent, on top of the corporate tax rate in the 
foreign country.
    How can a U.S. company working abroad, serving customers 
abroad, possibly compete with that?
    Ms. Batchelder. Thank you for the question, Senator. And I 
share your concern about the competitiveness of U.S. companies, 
and especially U.S. workers, and also about any tax provisions 
that create incentives to invert.
    Personally, I have a slightly different perspective on the 
likely effects of the President's proposals. While I agree that 
no other country has a minimum tax exactly like ours, they do 
have many provisions in place designed to limit the ability to 
shift profits to low-tax jurisdictions by companies resident in 
their countries that I think are analogous to GILTI.
    So, for example, many deny participation exemptions for 
certain foreign countries or lines of business, partially tax 
foreign earnings of their companies across the board. Many also 
include CFC rules that are akin to our subpart F provision but, 
unlike our subpart F provision, are not limited to passive 
income but applied to active income also. And some have 
interest expense limitations that are stronger than ours.
    So for these reasons, I support the President's proposals. 
But I will also say I am always eager to hear perspectives 
about how we can make sure that proposals in this space improve 
the competitiveness of American workers, and make sure that we 
do not have incentives to invert.
    Senator Portman. Okay. Well, we have a fundamental 
disagreement on that, I am afraid. And I think what you are 
saying today is a little different than what you used to say 
with Max Baucus. I do not think it is anything comparable to 
the 26-percent-plus rate in any of the OECD countries, 
certainly. And I look forward to further conversations with you 
about that, because I feel very strongly that this is going to 
hurt the very workers whom finally we have made competitive, 
and finally got their wages going up.
    So we look forward to that conversation. I hope you will be 
open to points of view, not so much of me and other members of 
this committee, but the people who are in the trenches making 
these decisions every day. I am concerned about some of the 
academics at Treasury and at the White House who have this 
theoretical view, but it is not consistent with the reality of 
people trying to sell stuff overseas using American capital and 
labor.
    The Chairman. My colleague's time has expired.
    Senator Cardin is next.
    Senator Cardin. Thank you, Mr. Chairman. And I also want to 
extend my thanks to all four of our nominees for their 
willingness to serve at this critical time in our Nation. But a 
special shout-out to Jonathan Davidson. I got to know Jonathan 
when he was on Senator Sarbanes' staff. I know how much Senator 
Sarbanes valued that relationship. Obviously he moved on to 
Congressman Sarbanes, then Senator Warner, and Senator Bennet.
    So a shout-out. We are very proud of this nomination, and 
we know that you will serve well in this role of congressional 
relations.
    I want to ask Ms. Batchelder a question concerning 
pensions. But let me set this up first, if I might. Treasury 
has a great deal of jurisdiction over the issues of fairness in 
our society. I have heard President Biden talk about narrowing 
the systemic discriminations in our system, and we know that we 
have discriminations in our tax code, and the chairman talked 
about that in his first question.
    We have challenges in entrepreneur opportunities. We have 
challenges in economic development. And we also have challenges 
in retirement savings. We have an opportunity in this Congress 
to move forward on a bipartisan proposal. Senator Portman and I 
have introduced legislation, bipartisan legislation that was 
introduced by the chair and ranking member of the Ways and 
Means Committee on the House side, and it really does advance 
the fairness in retirement savings.
    It provides easier ways for employers to offer plans to 
their employees. And when money is on the table, lower-wage 
workers and middle-income workers are more likely to 
participate. We expand dramatically the Saver's Credit, which 
has been a very valuable tool for low-income workers. We cover 
part-time workers. We provide for lifetime income options, 
which is again much more of a need for the lower-wage workers. 
And we deal with those who have student debt. And I want to 
thank Chairman Wyden for his leadership on that particular 
issue.
    So my question to you is that, knowing that we have a 
bipartisan opportunity, will this be a priority, if you are 
confirmed, to be able to work with us to move pension 
legislation, retirement savings legislation, in this Congress?
    Ms. Batchelder. Absolutely, Senator. I am aware of your 
longstanding work with Senator Portman on this issue and would 
be very eager, if confirmed, to work with you on extending 
access to easy ways for people to save. There is a lot of 
evidence that making it simple and easy for people to save for 
retirement increases the amount and likelihood of savings for 
retirement. And also there is sort of a patchwork of coverage, 
and particularly low-wage workers, workers of color, workers in 
rural areas, workers at small businesses, are less likely to 
have access to an employer-based easy way to save for 
retirement. And I would be eager to work with you with concerns 
on these issues.
    Senator Cardin. Thank you.
    I want to ask you one question about paid tax preparers, 
and the chairman has been very engaged in this also. We know 
about the complexities that have been put into our tax code. We 
hear about the challenges of taking the Earned Income Tax 
Credit and how so many of these mistakes have been made by the 
incompetency of paid tax preparers. And yet the IRS does not 
have the capacity to regulate.
    How high of a priority will it be to seek congressional 
authorization so the IRS can in fact regulate the paid tax 
preparers?
    Ms. Batchelder. I believe this proposal was in the recently 
issued Report on Tax Compliance by the Treasury Department. And 
I would be eager to work on any effort to regulate unregulated 
tax preparers and make sure--I should emphasize, when we talk 
about the tax gap, we should be thinking about it as people 
purposely not paying their taxes. There are also people who 
unwittingly may not pay all the taxes they are owed because 
unregulated preparers are giving them bad advice. So I will be 
eager to work on this issue.
    Senator Cardin. And the tax gap is huge, and we really need 
to deal with it. And it adds to the systemic discrimination in 
our system. But at the other end, there are taxpayers who are 
entitled to benefits who are not able to get those benefits 
because they cannot access them.
    So our program to provide assistance to lower-wage workers 
so they can get their benefits is also an important element in 
this.
    I look forward to working with you all on these issues, and 
again I thank you for your willingness to serve our Nation.
    Thank you, Mr. Chairman.
    The Chairman. Thank you, Senator Cardin.
    Senator Bennet?
    Senator Bennet. Thank you, Mr. Chairman.
    Mr. Davidson, we have had a lot of conversations over the 
years about what is working well here and what is not working 
so well here. And I wonder if you could share with the 
committee your thoughts about how we can achieve important 
priorities together in this tough political environment? And I 
would be interested to hear whether, if confirmed, you and the 
Department can play a role in facilitating greater cooperation, 
including on the important issues this committee addresses.
    Mr. Davidson. Thank you, Senator, for that question. I will 
start with an example. Just before I left your office and your 
team, we were able to work with Ranking Member Crapo 
preliminarily on some legislation. And he and his team were in 
a very difficult political environment, and stuck with that 
process all the way through--kept his word all the way through, 
and took arrows. And I think that a starting point for 
bipartisanship is that kind of courage. It is evidenced across 
a lot of the members of this committee, and again it goes back 
to working beneath the political crossfire.
    I also think, Senator, that one of the things that you 
taught me is that going and standing in the shoes of people who 
are not going to vote for you, and learning from those 
communities about how to fashion policy in a way that is 
designed for everybody in the country, and designed to serve 
the interests of people who are never going to agree with you, 
that is something that I have learned deeply through my work 
with you. And my ability to understand that has, I think, 
helped me understand the policy process a lot better.
    So I think there is a lot of evidence, especially on this 
committee, that there is plenty that we can do. And I think as 
long as we take the time to listen, and if we are patient and 
believe each other, I think there is progress to be made. But I 
appreciate the question.
    Senator Bennet. Mr. Chairman, I also want to call all the 
nominees' attention to the Social Impact Partnerships to Pay 
for Results Act, which was a bill that I wrote with Senator 
Young, bipartisan legislation that offers an innovative way to 
improve the effectiveness of certain social services.
    After a rigorous review, the SIPPRA Commission approved 
eight applications in November 2019, including projects in my 
State of Colorado, as well as those of Senators Young, 
Lankford, and Scott. And today the Treasury Department has only 
released one of the eight approved grants, 2 years after 
applications were due. The other seven projects, including the 
four States represented by Senators on this committee, are 
still delayed, leaving communities and families in limbo.
    I guess, Dr. Harris, if confirmed, can you commit to 
looking into this to make sure that we can figure it out?
    Dr. Harris. Senator, in a word, yes. I know you have been a 
champion for this important approach, and I will just quickly 
note that I have a background in evidence-based policy, and the 
SIPPRA approach is a favored strategy for those who truly want 
to see effective government. So this pay-for-results approach, 
I think, is critical, and I will 100-percent commit to making 
this program more effective.
    Senator Bennet. Thank you. And I also want to ask you one 
further question. In the last Congress, a bill that I wrote 
with Senator Portman and Senator Brown and Senator Young to 
help curb evictions and help provide a model for the Emergency 
Rental Assistance Program in the COVID relief packages, the 
version of the bill we are working to reintroduce in this 
Congress, will include a substantial permanent program to 
provide emergency rental assistance for eviction mitigation.
    What are your views on the eviction and housing crises? And 
what role should the Treasury and the Federal Government play 
in mitigating these crises?
    Dr. Harris. So I think that when economists have studied 
the economic disruption from evictions and foreclosures, we 
have realized that there are longstanding economic costs, and 
that policymakers should do everything we can to avoid them 
while having a well-functioning housing market.
    The actions taken by Congress to provide emergency 
assistance during COVID, I think, were critical in forestalling 
and avoiding that type of economic disruption. We need a more 
permanent system. So I am supportive of legislation which puts 
in place a better safety net for America's homeowners and 
renters.
    Senator Bennet. Thank you, Mr. Chairman. And with my final 
20 seconds, I want to thank all the nominees for your 
willingness to serve. We are very grateful to every one of you 
and to your families, and I hope you will express to the 
Treasury Secretary how grateful we are for her fulfilling her 
commitment to make the Child Tax Credit payable on a monthly 
basis starting in July. We deeply appreciate that.
    The Chairman. And thank you for your terrific work on this. 
And one of your partners will be next.
    Senator Brown?
    Senator Brown. Thank you. Thank you, Mr. Chairman. And 
thanks for the comments, and always pushing hard on the Child 
Tax Credit, Senator Bennet, my friend from Colorado.
    I want to start by commending each of the nominees for 
their commitment to public service. You have all had years of 
Federal experience. I thank you for your willingness to come 
back and serve your country.
    Mr. Davidson, a special shout-out to you. Thank you for 
your service to the questioner right before me, to Senator 
Bennet. You were a big part of our efforts over the years to 
expand the Earned Income Tax Credit and the Child Tax Credit, 
and I know your commitment will continue at Treasury. So thank 
you.
    And, Ms. Batchelder, I would like to start with you. One of 
the most important parts of the ARP was that expansion of the 
Child Tax Credit. The IRS Commissioner has told us that IRS is 
ready for the monthly distribution, as Senator Bennet just 
mentioned, starting in July.
    I just want to ask you to work with the IRS to ensure as 
many eligible families as possible take advantage of this 
credit. Will you commit to us that you will do that?
    Ms. Batchelder. Absolutely. This is such an exciting new 
program, and as you know, the expansion, including making the 
Child Tax Credit fully refundable, would cut child poverty by 
an estimated 40 percent. And if confirmed, I would be very 
committed to working with the Commissioner and the IRS, as well 
as any outside partners, to make sure as many eligible families 
as possible are taking advantage of that provision.
    Senator Brown. Thanks for saying that. And I noticed a 
moment ago Senator Portman was on the screen. And in his State 
and my State, 92 percent of children will be eligible for the 
Child Tax Credit--some in a big way refundable, others less so 
in higher-income groups, but 92 percent.
    Another question on take-up of refundable credits. As you 
know, one in five filers eligible for the EITC does not get it. 
What are your ideas for increasing take-up of the Earned Income 
Tax Credit? And would you consider acting on a recommendation 
to the Treasury Inspector General to send some EITC refunds 
automatically?
    Ms. Batchelder. Yes. Again, this is a critical program, 
together with the Child Tax Credit. The EITC is lifting 5.5 
million children out of poverty, even prior to the American 
Rescue Plan. And as you know, take-up is--well, 20 percent of 
people on average are not taking it up. And that is especially 
the case among folks who do not have dependent children living 
at home.
    If confirmed, I would be very eager to work with the IRS 
and outside partners on increasing take-up. And although I 
would certainly want to be briefed on the issue, I would very 
much consider working with the IRS on TIGTA's recommendation 
that you mentioned. It strikes me as an excellent way to get 
much-needed tax benefits to low-wage workers, many of whom 
would otherwise be taxed into poverty.
    And I would also be eager to explore ways to increase take-
up among workers with dependent children, whether it is through 
additional outreach, making sure that the letters that do go 
out are formatted in a way that makes them easy to understand 
and makes taxpayers more likely to act upon letters notifying 
them that they are probably eligible for the EITC, and thinking 
creatively about ways to make it easy for people to file 
returns so that they can get this much-needed tax benefit.
    Senator Brown. Thank you, Ms. Batchelder. I hope we know 
the contribution that those dollars going to low-income people 
make, the contribution they make to neighborhoods and 
communities as those dollars are spent at the grocery store, 
and the drug store, and spent in the community to pay rent, and 
all the things that will matter.
    I also serve as chair of the Senate Banking and Housing 
Committee, which oversees much of the work of the Office of 
Domestic Finance, including oversight of our housing finance 
system. We have an affordable housing crisis--everybody knows 
that--in this country. We need our entire housing system 
working together to address that crisis, including the GSEs.
    The Banking and Housing Committee has heard a lot of 
consensus on what we need to do to put the GSEs on a path to 
promote long-term stability and make sure they are focused on 
expanding access to affordable housing.
    So, two just really quick questions, and it can really be 
``yes'' or ``no.'' Dr. Liang, will you commit to working 
closely with me and my staff on the future of our housing 
system, and on GSEs?
    Dr. Liang. Senator Brown, I believe that is a very 
important initiative. Yes.
    Senator Brown. Thank you, Dr. Liang.
    Mr. Davidson, will you commit to working closely with me 
and my staff on issues related to the housing finance system?
    Mr. Davidson. Yes, Senator Brown. I know about your 
leadership on these issues and would look forward to that, if I 
am privileged to be confirmed.
    Senator Brown. Good. Thank you so much to all of you for 
your interest in public service.
    And, Mr. Chairman, I have 8 seconds, and I am done. Thank 
you, sir.
    The Chairman. Thank you very much, Senator Brown. That was 
very helpful.
    Senator Lankford is next.
    Senator Lankford. Mr. Chairman, thank you very much. Thanks 
to all the witnesses as well for your testimony and the work 
leading up to this.
    Ms. Batchelder, I want to get a chance to talk to you a 
little bit about China. That has been a frequent conversation 
for us on the Hill of late. We have quite a bit of conversation 
ongoing on China right now. And that deals with not only the 
economic advantages that China has, but also their competitive 
advantages with our companies as well, and how we can balance 
that out.
    I am concerned that there is dialogue going on right now 
about forming a tax agreement with the OECD, or proposing a tax 
proposal that does not require China to be included in that, 
which could put a significant disadvantage again to American 
companies.
    Help me understand your proposals and your thoughts on 
whether the United States should go first, or be able to form a 
tax agreement, or be able to increase our tax burdens on our 
companies, and have China not included in that agreement, or 
not know what China is going to do as well?
    Ms. Batchelder. Thank you for the question, Senator. And I 
share your concern about competitiveness, including vis-a-vis 
China. I would certainly need to be briefed on these issues, if 
I was fortunate enough to be confirmed.
    Though the one thing I would note is, as I understand the 
way that these negotiations are being structured, if there was 
an agreement on an international minimum tax, it would not be 
necessary for every country to sign on in order for it to apply 
with large force throughout the globe.
    So I believe there is that provision called a UTPR, which 
is an enforcement mechanism in Pillar 2, that would 
effectively--for example, if China was not part of this 
agreement, and I have no reason to think that they would not 
be, but hypothetically if they were not, it would apply the 
minimum tax to Chinese resident companies to a large extent as 
well.
    But again, I would need to be briefed on this issue and 
would very much look forward to discussing your concerns and 
perspectives on this.
    Senator Lankford. Yes; there is some conversation that 
China would actually get an exception under Pillar 2 in that. 
Are you aware of any of that conversation? And would you be 
agreeable to an exception for China?
    Ms. Batchelder. I am not aware of that discussion and would 
need to be briefed on the technical details.
    Senator Lankford. So obviously, Congress needs to be 
engaged in this. Any sort of agreement that is a treaty 
agreement, or is an agreement for changing tax policy, would 
require bipartisan cooperation and engagement on this issue. 
Congress wants to stay engaged, and the Senate certainly wants 
to be able to stay engaged. Do you know of any way that a tax 
agreement could be made with other nations that would have a 
direct effect on the United States' companies and United States 
citizens that would not go through Congress?
    Ms. Batchelder. I should say, first of all, that I would 
be, if confirmed, very eager to make sure that Congress and 
this committee are continually briefed on the negotiations, and 
make sure that my staff, if confirmed, was doing so as well.
    And as I understand it, any treaties require the advice and 
consent of the Senate. And so I would expect that to be the 
case. I, again, would need to be briefed on the issue. I could 
imagine scenarios where something that the U.S. is already in 
compliance with, then maybe there would not be the need for 
congressional action, but I would really need to be briefed on 
the issue.
    Senator Lankford. But you do not know of an issue, or a way 
that taxes could be increased on American companies, or 
American taxpayers, through an executive agreement that the 
administration would make without going through Congress?
    Ms. Batchelder. I am not aware of what you are discussing, 
no, or how that would work.
    Senator Lankford. Okay; that is helpful. There has been 
some conversation that the administration is examining ways to 
be able to change tax policies without going through Congress, 
and so we will follow up on that in the days ahead.
    Dr. Harris, I do want to ask you just about the economic 
effects of the unemployment assistance that is currently 
ongoing, and your thoughts on continued growth of unemployment 
assistance. We have seen a tremendous increase in the number of 
job openings in America.
    In my State, we have the largest number of job openings in 
the history of my State since we have kept records, and we are 
struggling under the additional unemployment benefits that have 
been given out, where people literally make more not working 
than they do working. And it has been very difficult to be able 
to incentivize people to return to work, even though there is a 
tremendous number of job openings. Do you see that as good 
economic policy in the days ahead, to be able to continue 
something like that?
    Dr. Harris. Senator, thank you for raising this point. I 
should note that, in my opening statement, I noted the 
importance of communication with Congress. I also believe in 
communication with the business sector. So in my discussions 
with various business leaders and companies, I have heard this 
concern, that they are having a hard time in certain instances 
hiring workers.
    I will say that I also committed to being evidence-based, 
and looking at studies that have come out of the San Francisco 
Fed and various other educational institutions, universities, I 
have not seen the evidence showing that the $300 plus-up has 
yet been a substantial detriment to hiring. And so I will 
continue to monitor that, and I think it is a valid point.
    Senator Lankford. I look forward to that dialogue. I would 
invite you to meet with any employers you would like to in 
Oklahoma, if you would like to come to Oklahoma. I could drive 
you around and let you get a chance to meet a lot of folks who 
would certainly disagree with the San Francisco Fed on that. 
With that, I will yield back.
    The Chairman. I thank my colleague. And we want to go on. I 
just want to be clear. On this unemployment issue, there are a 
lot of pieces to this puzzle. And on this committee, we have 
proposed a number of reform efforts. And the reality is, as a 
result of these Republican Governors and their actions over the 
last few weeks, several million persons, many of whom are going 
to be women and especially vulnerable, are going to end up with 
an income of zero. They will have lost not just the $300, but 
the extra week. If they are gig workers, they will lose that, 
and they may have exhausted their benefits.
    And I do not believe any member of Congress wants to see 
people destitute that way. So we are going to continue this 
debate. There have been a number of reform proposals in this 
committee. There are 53 different systems, if you look at the 
way they are set up administratively. We have proposed a 
uniform baseline.
    We are going to continue that discussion.
    And Senator Casey is next.
    Senator Casey. Mr. Chairman, thanks very much. I want to 
thank the nominees who are in front of us. I will direct my 
questions to Dr. Harris and Ms. Batchelder.
    I will start with children, and one challenge we all face. 
We know that both child care and early childhood education, 
often referred to as early care and education, both are central 
to the Nation's economic infrastructure and, frankly, our 
recovery. And it is particularly important to women's labor 
force participation. There is just no question about that.
    The COVID-19 pandemic has laid bare the importance of the 
caregiving economy--namely, those workers who care for and 
support children, seniors, and people with disabilities. We are 
seeing more clearly now than ever that quality and affordable 
care is central, both to the economy as well as the recovery 
itself.
    I was glad to see a measure that I had been leading for the 
last number of years to expand one of the three tax credits we 
have focused on in the Rescue Plan: the child and dependent 
care tax credit, shorthanded, the child care credit. That was 
included in the Rescue Plan which was enacted, but it also 
included--the expansion of it is included in President Biden's 
American Families Plan.
    So, Dr. Harris, I will focus for a moment on you. Both 
child care and the care economy are economic imperatives. Can 
you discuss how you intend to elevate this issue and speak to 
its importance in terms of our short-term and long-term 
competitiveness?
    Dr. Harris. Thank you, Senator. I will say that in 
economics, there are few consensus views. But one is that 
investments in child care yield long-term returns. And so I 
think that from the perspective of those who care about our 
economy over not just months and years but decades, investment 
in child care is critical.
    It is also a workforce issue. Caregivers right now only 
receive a typical wage rate of around $12.25. That is not 
enough, and I think it is inconsistent with their value to 
children and economic productivity.
    We also have a child care supply problem. And I know that 
there are efforts by members of the committee and others to 
expand the supply of child care. And lastly, of course, you 
just mentioned, Senator, there is a massive affordability 
problem. And that results in less labor force participation and 
puts our economy at a disadvantage relative to some of our 
competitors.
    So for all these different areas I have just laid out, I 
commit to continuing to study this issue, to elevate it, and to 
serve as a faithful advisor to the Treasury Secretary on this 
issue.
    Senator Casey. Well, I appreciate that, because we know now 
from all the data for 50 years, the connection between learning 
and earning. If they learn more now, they are going to earn 
more later. That is clear. So we cannot talk much about 
economic growth, or out-competing China or growing GDP, without 
early care and learning.
    Ms. Batchelder, I know that making this child-care credit 
permanent is a priority for the President, and I hope to work 
with you on this as well. It is a long-overdue expansion of the 
ABLE program, which is, for those who do not know, it is really 
a 529 plan for people with disabilities. And I look forward to 
that and working with you.
    I do not know if you have any comments on either issue.
    Ms. Batchelder. I would look forward to working with you on 
these issues, if confirmed, Senator. And I share your concern 
about child care. As a new mom, it has become particularly 
visceral to me how important access to quality child care is. 
And on the child and dependent care tax credit, I would also be 
particularly interested in looking at ways to partner with and 
support the IRS in making sure that people are claiming 
benefits to which they are entitled.
    Senator Casey. Thanks very much.
    And my last question pertains to a bill that I have been 
advocating for a number of years, an automatic stabilizers bill 
for regional and national recessions.
    We know that after 2008 we had folks who--huge numbers of 
Americans, I guess it was something on the order of 8 million, 
unemployed, but many for several years. And we did not have a 
strategy for those workers.
    We know that communities will continue to suffer from the 
persistent challenges flowing from the pandemic, whether it is 
a localized recession or a large, massive job loss in a 
particular community.
    Dr. Harris, I know that my staff has talked to you about 
this issue, but I just wanted to hear your views on legislation 
like that, or policy like that with respect to the economic 
recovery ahead, and how we have to focus on stabilizers for 
localized recession.
    Dr. Harris. Thank you, Senator. My view on automatic 
stabilizers is that they can be a critical part of a 
macroeconomic response to a downturn. But of course, our 
economy is not just a national economy, but the sum of local 
and State economies.
    So you know, while I commit to studying your bill and your 
approach in further detail, as described to me by your staff, 
it feels like a very worthwhile approach towards supporting 
local economies which may experience downturns in times when 
our national economy does not.
    Senator Casey. Well, thanks very much.
    Thank you, Mr. Chairman.
    The Chairman. Thank you, Senator Casey.
    Senator Warner is next.
    Senator Warner. Thank you, Mr. Chairman. And let me just 
follow up quickly on what my friend Bob Casey just talked 
about. I am all for automatic stabilizers. I know, Mr. 
Chairman, you have been in favor of that as well. But we have 
to have the IT systems to be able to allow that movement in 
benefits. I applaud the efforts you did, Mr. Chairman, at the 
beginning of CARES. I think many people wondered how we ended 
up with that $600-a-week plus-up in the midst of the crisis 
and, as you well know, I think we all were willing to have that 
move as the economic circumstances changed. But our IT systems 
are so old that they could not adjust. As a matter of fact, my 
understanding is the previous administration's Labor Secretary 
said it would take 6 months before the Department of Labor 
could even get their IT systems to adjust in a new fashion.
    So I agree with Senator Casey, but we have to make sure we 
make the investment in our IT, both at the State and the 
Federal level, to have that ability to change unemployment 
plus-ups as necessary.
    Ms. Batchelder, I wanted to talk to you about--as you know, 
Chairman Wyden and Senator Brown and I put forward some ideas 
on international tax, an extraordinarily complicated arena. And 
while I would argue some of the things--while I was generally 
not supportive or involved in the 2017 efforts--they did 
involve the issues around deferral, and they did grapple 
somewhat with the repatriation issue. But on the other hand, 
what they did was, I felt, gave away the store. They moved 
America from being near the top on international tax rate to 
literally the bottom. And we are now, depending on the cut, 
either 33rd out of all 35 OECD nations, or 35 out of 35. But 
being the world's largest economy and at the bottom in terms of 
collecting revenue from our businesses, I think it is unfair to 
the American people.
    And I guess I do not want us to go back up to the top, but 
I also think we do need to be somewhere in the middle, and some 
of the efforts around FDII and BEAT and the 10-percent implied 
guarantee for companies that go out and build factories in the 
high-tax jurisdictions like Germany, who does not treat us 
fairly, how do we get at this? How can we make sure that we 
keep American business competitive, Ms. Batchelder, but at the 
same time make sure that the American people actually get a 
fair share--and a responsible share--of revenues coming from 
our business partners?
    Ms. Batchelder. Thank you for the question, Senator. And, 
if confirmed, I would be eager to work with you and members of 
the committee on international tax provisions, and corporate 
tax provisions more broadly.
    I share your concern about competitiveness and would note 
that, in terms of the U.S. corporate rate, even under the 
President's proposal the rate would be lower than at any point 
since World War II, other than since the TCJA.
    So I would be very eager to work on the President's agenda, 
both in terms of the corporate tax and in terms of the 
international provisions specifically. And I recognize this is 
a highly technical area, so, if confirmed, I would look forward 
to, together with the Treasury staff, assisting you in any 
agreements that are reached in this area to make sure that they 
are technically sound and drafted so that they operate in the 
way that is intended.
    Senator Warner. Well, one of the things that could help 
move us forward and stop some of the forum-shopping that goes 
on by companies--and I hope Secretary Yellen will be 
successful--is having our partners in the OECD set some level 
of minimum corporate tax rate so that you cannot escape to the 
Ireland-type tax havens and, in a sense, avoid obligation.
    I was going to--I see my friend, Senator Cortez Masto, 
there. I was going to go ahead and make my commercial again to 
this panel about one of the things we can deal with in terms of 
the wealth gap--and I have talked with these nominees about 
this--which is to look at a new product, Chairman Wyden, that 
would in a sense have a first-generation home buyer pay the 
same mortgage payment that they would pay on a traditional 30-
year mortgage but, with an interest rate subsidy, actually 
create a 20-year mortgage product. And that would actually 
double the wealth accumulation for first-generation home 
buyers. And I look forward to working with the administration 
on that proposal.
    Let me just close with a personal note, that we have great 
nominees here. I want to single out, though, Jonathan Davidson, 
who helped me for the first number of years before my friend 
Michael Bennet stole him, where he became Chief of Staff. And I 
would respectfully ask all of my colleagues, even my Republican 
colleagues, to cut Jonathan a break and make sure he gets a 
resounding positive vote. He will do a good job on the 
legislative side for our Treasury team.
    Thank you, Mr. Chairman.
    The Chairman. Thank you, Senator Warner. And I want you to 
know two things. One, we are working on a first-time home buyer 
approach as well. So I think it is particularly constructive, 
what you are talking about, and also apropos of this whole 
question with respect to stabilizers and the like, and Senator 
Bennet and I have had a proposal on that. You have to update 
the technology.
    When we put together the $600 extra per week during the 
dire times in the Spring of 2020, I remember conversations with 
business leaders, and they were talking to me about COBOL 
programming. And some of them thought it was 20 years old. And 
I said, respectfully, we are talking about 60 years old.
    So we are going to make those investments in that 
legislation that this committee has been very much committed 
to.
    Senator Cortez Masto is next.
    Senator Cortez Masto. Thank you, Mr. Chairman. And 
congratulations to all the nominees.
    Ms. Batchelder, let me start with you. I have introduced a 
bill, the Hospitality and Commerce Job Recovery Act, to provide 
critical relief and help rebuild the hospitality industry that 
is so critical to my State in Nevada, as well as other States 
across the country. For the hospitality industry, which still 
has a ways to go in recovering from the pandemic, can you 
please discuss how you would use your role to ensure a full 
recovery for the travel and tourism sectors?
    Ms. Batchelder. Thank you for the question, Senator, and I 
would be eager to work with you on your proposals in this area, 
if I am lucky enough to be confirmed.
    I certainly can see why the pandemic could be devastating 
for the hospitality industry, and I think that is an important 
sector. We must make sure tax policies and other policies are 
helping it to recover adequately.
    Senator Cortez Masto. I appreciate that. And for my 
colleagues, please know that in Nevada, particularly southern 
Nevada, the unemployment rate is still higher than the national 
average. It has decreased. We are looking much better and 
getting people back to work, but there are still many 
businesses, including some of our hotels and casinos, that are 
closed right now.
    So it is going to take us time to come out of this, and 
that is why I am looking for a long runway to help our travel 
and tourism, including international travel, which has not 
started yet. And that is going to have a major impact on our 
travel and tourism industry across the country as well. So I 
just want to make sure everybody understands the impact to so 
many still, because of this pandemic.
    Ms. Batchelder, let me continue with you. I was proud to 
lead the effort in extending the solar investment tax credit to 
support creating clean, renewable energy jobs, but these 
activities, like so many others, were impacted and delayed by 
the COVID pandemic.
    Last year, Congress extended the legislative qualifying 
deadline, or the Continuity Safe Harbor project, that it must 
meet to be eligible for the investment tax credit, but 
unfortunately the previous administration made no such change 
to the current 4-year administrative Continuity Safe Harbor. 
Financiers, other decision-makers, are already bumping up 
against this discrepancy, and it is beginning to affect their 
decisions now for future activities.
    If confirmed, will you work with the administration to 
extend the safe harbor provision to ensure that projects that 
were delayed due to unforeseen circumstances during the COVID-
19 pandemic can still qualify for the full credit?
    Ms. Batchelder. Thank you, Senator. If I am confirmed, I 
would certainly want to be briefed on this issue, but it sounds 
very important, and I would be eager to learn from you and your 
staff and people in the industry, to understand the challenges 
that they are facing.
    Senator Cortez Masto. Thank you. And we look forward to 
working with you as well on this important issue.
    Dr. Liang, thank you for the opportunity to meet with you 
just recently. If confirmed, what initiatives would you and the 
Biden administration support to close the wealth gap and combat 
income stagnation?
    Dr. Liang. Thank you for that question. So I think the 
wealth gap is an important issue in this country, and the 
pandemic revealed this in the extreme. I believe there are 
opportunities that can be created to build wealth, and some of 
the initiatives in the Office of Domestic Finance would improve 
access to credit for small businesses, and credit to 
disadvantaged communities.
    Treasury is currently implementing those programs and will 
be making them long-term, continuing the relief program, so 
there will still be a longstanding commitment to those efforts. 
I think that can go a long way to providing and helping to 
close the wealth gap.
    Senator Cortez Masto. Thank you.
    Dr. Liang. And I look forward to working with you on this 
issue.
    Senator Cortez Masto. I do as well. And as you can hear, 
myself and many of my colleagues, we all feel the same way. So 
I appreciate your comments there.
    Mr. Davidson, thank you also, and congratulations on your 
nomination. As you know, the administration and individual 
States across the country have set ambitious goals for 
combating climate change, including my home State of Nevada, 
which is aiming to reach 50 percent renewable generation by 
2030, and 100 percent by 2050.
    In pursuit of these goals, I was proud to lead the effort 
in extending the solar tax credit and joining my colleagues 
Senators Carper, Burr, and Stabenow in introducing the Securing 
America's Clean Fuels Infrastructure Act, to provide incentives 
to support building necessary infrastructure as the country 
moves towards electric vehicles.
    If confirmed, how would you work with Congress to advance 
legislation like this that helps us build the clean energy 
economy and address the climate crisis?
    Mr. Davidson. Senator Cortez Masto, thank you for that. And 
I think one of the great privileges, if I am confirmed, would 
be to work with the expertise at Treasury and to make, 
hopefully, that expertise available as much as possible to the 
Congress, and to Senators who are leading on initiatives like 
the ones you described.
    If I am privileged enough to be confirmed for the position, 
I would love to engage with you and your staff to see how much 
progress we can make in the areas that you are leading on, 
especially in the climate areas.
    Senator Cortez Masto. Thank you. I thank you all.
    The Chairman. I thank my colleague for her leadership.
    We are going to be on a sprint now to see if we can get 
this done before the end of this vote.
    And Senator Daines is next.
    Senator Daines. Thank you, Mr. Chairman. By the way, that 
conversation on first-time home buyers is so important. I agree 
with you, and I think----
    The Chairman. We would like to make it bipartisan.
    Senator Daines. Yes. One of the concerns, though, I have is 
with the inflationary pressures now on the economy. The worst 
thing we could do is to see the inflation continue on. Of 
course, if interest rates go up, it would probably be the 
biggest impediment. So it is something we ought to keep an eye 
on. So, thank you.
    I would like to start off with a question for Professor 
Batchelder to help clarify some details in the tax proposals 
put forward by the administration. President Biden's current 
individual tax proposals result in two successful upper-middle-
income married workers facing a significant tax increase. 
However, an unmarried couple that lives together and earns 
potentially hundreds of thousands of dollars more, both 
collectively and individually, than the married workers would 
face no tax increase whatsoever.
    Professor Batchelder, would you advise the administration 
to revise its proposal to avoid marriage penalties?
    Ms. Batchelder. Thank you for the question, Senator. And 
marriage penalties, and marriage bonuses, are a tough issue. 
The U.S. is actually unusual in that we allow couples to file 
jointly. Most countries have married couples filing singly. And 
when one does that, you do not have the problem of marriage 
penalties or marriage bonuses.
    Senator Daines. Unusual compared to what countries?
    Ms. Batchelder. I do not have the exact number, but I would 
guess 95 percent.
    Senator Daines. I would hope America, who stands in support 
of marriage----
    Ms. Batchelder. Yes. Oh, this is not about pro- or anti-
marriage, but----
    Senator Daines. Well, but the policies are very anti-
marriage where, if you are not married, you have a much 
greater, significant tax advantage.
    Ms. Batchelder. Well, currently the way the code is 
structured, there are both marriage penalties and marriage 
bonuses. It depends on how the two members of the couple, how 
their earnings are relative to each other.
    So in some cases, when you get married, you collectively 
pay a lot less in tax. And in other cases, you pay more in tax. 
And that is a function of the fact that we do not do single 
filings.
    Senator Daines. So do you think the marriage penalty is 
good policy?
    Ms. Batchelder. I think it is a tough balance between 
marriage penalties and marriage bonuses, and I would be willing 
to discuss with you whether that balance has been struck in the 
best possible way.
    Senator Daines. Thank you.
    Dr. Liang, if the Federal Reserve in the future adopts 
yield curve control measures, how, if confirmed, would you 
advise the Treasury Secretary regarding potential coordination 
with respect to implications for any target by Treasury of the 
weighted average maturity of our outstanding debt?
    Dr. Liang. First, the position that I would be in would be 
at Treasury, which is independent of the Federal Reserve. And 
having spent many, many years at the Federal Reserve, I 
understand how fiercely they defend their independence. And I 
think it is important for macro-stability.
    In terms of interest rate policy, the Treasury Department 
issues Treasury debt to minimize the cost of financing the 
government debt. And it issues across the maturity spectrum, 
from short 4-week bills up to 30-year securities at this point.
    Generally the maturity is fairly stable, around 7 years, 
and fluctuates just with whether the government needs to 
finance short-term especially. If there is an issue of what the 
appropriate weighted average maturity is, we would be very 
interested in working with you on this issue. But the objective 
is to finance the government at low cost.
    Senator Daines. Thank you. You have a very distinguished 
background working on both sides certainly--the Fed and 
Treasury.
    Dr. Harris, where do you see inflation going in the next 1 
to 3 years, and----
    Dr. Harris. That is an important question right now, as we 
transition between--I'm sorry.
    Senator Daines. Yes, and do you worry at all about 
additional potential inflationary effects, if some of President 
Biden's proposals are enacted into law?
    Dr. Harris. Thank you, Senator. So when--this is such an 
important question right now as we are transitioning between a 
recession and the recovery. You see an increase in prices as 
Americans go out in the economy more, largely thanks to the 
actions taken by Congress to pass legislation to get our 
economy back on track.
    I share the same vision as, say, Goldman Sachs for example, 
which yesterday put out a report that saw inflation as largely 
transitory, most likely. Of course, there is uncertainty, so I 
do think it is critical that we economists continue to monitor 
inflation. But my view is, right now it is largely the result 
of a transitory shift to recovery and some certain supply chain 
disruptions.
    Senator Daines. Thanks, Dr. Harris.
    Thanks, Mr. Chairman.
    The Chairman. I thank my colleague.
    Senator Hassan?
    Senator Hassan. Well, thank you, Chair Wyden. And I want to 
thank you and the ranking member for this hearing. I also just 
want to thank this extraordinarily distinguished group of 
witnesses. I thank you all for the service you have already 
provided. Thank you for being willing to serve again. And 
please thank your families for us, because this is a family 
affair, as you all know.
    I want to start with a question to both Professor 
Batchelder and Dr. Harris. I would like to ask you about the 
importance of promoting workforce development. Today I 
introduced a bipartisan bill with Senators Young, Cortez Masto, 
and Scott that would modernize and expand tax-free education 
and training assistance that employers can provide to employees 
to meet their businesses' needs.
    Professor Batchelder, how can we leverage the tax code to 
give employers tools to hire and retain workers?
    Ms. Batchelder. Thank you, Senator. I am aware of your bill 
and have not been previously aware that the provision at issue 
had not been indexed for inflation in so long. So I would, if 
confirmed, be very eager to work with you on your ideas in this 
space and provide assistance in any way that we could from the 
Treasury.
    Senator Hassan. Thank you.
    Dr. Harris, how can promoting workforce development help 
businesses and workers during the recovery from COVID-19?
    Dr. Harris. So workforce development in economic models 
features front and center in economic growth. It is very 
difficult to imagine an economy which is experiencing healthy 
and robust and sustained growth without a healthy investment in 
workforce development.
    So I would describe it as critical. But particularly now, 
when we are seeing such a widespread shakeup in our economy and 
our workforce, in our labor market, in our general approach to 
doing business, it is just a critical aspect as we transition 
between recession and recovery. I do not see it being near 
reaching its potential without a substantial investment in the 
workforce.
    Senator Hassan. Well, thank you. And I would look forward 
to working with both of you on the bill that we just 
introduced.
    To Professor Batchelder, the American Rescue Plan included 
my bipartisan bill with Senator Braun to provide a tailored 
version of the Employee Retention Tax Credit to new businesses 
that actually started during the pandemic. You know, these 
people had the guts to start a business in the middle of a 
pandemic, and they could not take advantage of some of the 
things that we folded into the early rescue packages.
    So, at Treasury, will you ensure that new businesses 
receive clear and timely guidance ahead of assistance being 
available in July?
    Ms. Batchelder. Thank you, Senator. If confirmed, one of my 
priorities would be to ensure that Treasury is issuing, in 
conjunction with the IRS, sound guidance and prompt guidance in 
all areas, including this. And I would be very happy to look 
into this, if confirmed.
    Senator Hassan. Well, thank you. This really is important 
to businesses as they figure out how many people they can keep 
on payroll, and how the cash flow is going to go. So I look 
forward to that.
    Last question. Dr. Harris, the President's American Jobs 
Plan proposes investments in domestic research and development. 
I am working on a bipartisan basis to promote domestic R&D, 
including a bill with Senator Young and four other committee 
colleagues that would strengthen R&D tax incentives for 
startups, and for strategically critical industries.
    How can supporting domestic R&D help increase U.S. 
competitiveness, create jobs, and support critical U.S. 
industries?
    Dr. Harris. Senator, I should say I am incredibly eager to 
work with you and your bipartisan colleagues on this issue. I 
see investment in research as being a critical step towards 
ensuring America's long-run competitiveness. If you look at 
trends internationally, particularly China and other 
competitors, they are catching up in terms of the dollars they 
are spending. And in essence, if we want to see America 
continue to dominate on the world stage from an economic 
perspective, investment in research is critical.
    Senator Hassan. Thank you, very much. Again, thank you all 
for your willingness to serve. Take care, be safe, and thank 
you, Mr. Chair.
    The Chairman. Thank you, Senator Hassan.
    And Senator Warren, I believe, is on the web.
    Senator Warren. I am here. Thank you, Mr. Chairman.
    The Chairman. Great.
    Senator Warren. Thank you. So, congratulations to all of 
our nominees.
    I want to talk about how this economic crisis has affected 
women and families. This year, women's workforce participation 
hit its lowest levels since 1988. And 26 percent of women who 
became unemployed this year said it was due to a lack of child 
care.
    Dr. Harris, when you look at the data, do you agree that 
lack of child care is one factor that is now holding our 
economy back?
    Dr. Harris. I agree that--yes. I mean, I agree that lack of 
child care was a massive concern prior to the pandemic. It is a 
continued concern after the pandemic. And women's labor force 
participation, as you mentioned, Senator, is a critical aspect 
of long-term growth.
    And without a solution, particularly on the supply side for 
child care, on the affordability of child care, I do not think 
we will see the levels of participation that we need in order 
to see the levels of growth that we want.
    Senator Warren. Thank you, Dr. Harris. In fact, you were 
right when you referred to how it was already a problem before 
the pandemic. You know, this year the pandemic showed us what 
working families have always known: child care is critical 
infrastructure. And yet, for generations now we have under-
invested in our babies, and we have left parents to just try to 
work it out on their own.
    Even before the pandemic, half of all Americans lived in 
child-care deserts, which are areas where there are not enough 
licensed child-care slots for every child who needs one. And 
COVID only made this worse. I have thousands of child-care 
providers who have been forced to shut their doors
    At the same time, child-care workers, mostly women, and 
disproportionately women of color, are being paid poverty-level 
wages.
    So, Dr. Harris, let me ask you this: do you support a 
robust Federal investment in child care to support families, 
and to ensure that the caregiving jobs are good, middle-class, 
dependable jobs?
    Dr. Harris. Senator, I do support a robust investment in 
child care for a few reasons, including some of the ones I just 
mentioned. But also, it is not just about getting families and 
female workers back in the labor market, it is also just about 
making life easier for working families. It does not have to be 
so hard.
    You mentioned the workforce issues. I believe the typical 
wage--I mentioned this earlier in my testimony--the typical 
wage for a child-care worker is $12.25. That is inconsistent 
with their value towards children, and it is inconsistent with 
what we know about investment in child care and long-run 
productivity. So I am absolutely supportive of that.
    Senator Warren. Good. Well, thank you, Dr. Harris. I 
appreciate it.
    You know, I am glad that President Biden has put this issue 
front and center, but we need enough Federal funding to 
actually solve the problem, not just nibble around the edges on 
this. And that means a $700-billion investment to raise the 
wages of every child-care worker and guarantee affordable care 
for every family.
    We also need to provide enough high-quality spots for every 
child, and that is why I am introducing the Building Child Care 
for a Better Future Act this week with Chairman Wyden. This 
bill increases the child-care entitlement to States to $10 
billion a year. And it also creates a new $5-billion-a-year 
supply building program to help child-care providers open, get 
licensed, get trained, hire skilled staff, and provide high-
quality care.
    So let me ask you, Professor Batchelder. Could we fund 
transformative investments in child care--the kind we are 
talking about here--simply by giving the IRS the resources to 
make sure that the wealthy and the giant corporations are 
paying the taxes that they actually already owe?
    Ms. Batchelder. Yes, Senator, we could raise a large amount 
of revenue by reducing the tax gap and focusing that reduction 
on high-net-worth individuals and large corporations. The 
President has put forth a proposal that Treasury estimated 
would raise $700 billion in the first decade and $1.6 trillion 
in the following decade.
    And there are reasons to believe this might be an 
underestimate. It does not include the effects of upgrading IT 
systems or improving taxpayer services. And it also does not 
include the indirect effects of additional enforcement on 
voluntary compliance.
    There is a lot of evidence that people comply more when 
enforcement is improved, even if they are not personally 
audited. There was one statistic that amazed me in that 
report--and I had to write this down because there were so many 
zeros--that only 0.00004 percent of partnerships are audited. 
So just to talk about one industry that I know, there are some 
large law firms with thousands of attorneys. Partners earn over 
a million dollars a year, and I find it hard to believe, if one 
knows that your audit rate is 0.00004 percent, that that would 
not affect voluntary compliance.
    Senator Warren. Well, thank you, Professor Batchelder. This 
is why yesterday I introduced the Restoring the IRS Act. This 
bill provides mandatory funding for the IRS to ensure that it 
has the resources it needs to go after wealthy tax cheats, 
including the partnerships that you mentioned.
    Together with my wealth tax and Real Corporate Profits Tax, 
we could raise trillions of dollars without increasing the 
taxes on 99.9 percent of Americans by a single penny. These 
three proposals together generate more than enough revenue to 
pay every cent of the Building Child Care for a Better Future 
Act, plus every cent of the investments in child care in 
President Biden's American Jobs Plan and American Families 
Plan, and every cent of all the other critical investments in 
families and workers in those two plans combined.
    So, let us not waste this historic opportunity to invest in 
America's families. Thank you, Mr. Chairman.
    The Chairman. I thank my colleague.
    Senator Whitehouse is next.
    Senator Whitehouse. Thank you very much, Mr. Chairman.
    Ms. Batchelder, you all are going to be working on trying 
to clean up the offshore tax swamp with an international 
minimum tax so that it is not a race to the bottom in corporate 
tax avoidance. And I appreciate your work on that and stand 
ready to help wherever we can.
    As you know, several of my ideas are operative in that 
space. The point that I would like you to address here is what 
happens in America when an American company with a big offshore 
presence is able to garner for itself a lower overall tax rate 
than often the usually smaller American corporations that do 
not have the scale to get involved in offshore tax gimmickry or 
offshore international operations, and now have to compete with 
a company that gets the advantage of a lower tax rate from 
having offshore operations?
    It seems that that is an incentive to drive jobs offshore, 
and it seems that it is an unfair competitive advantage for the 
bigger company. Your thoughts?
    Ms. Batchelder. Thank you, Senator. Yes, these are very 
important issues that you raise. As you know, the President has 
put forth proposals to strengthen the GILTI tax to increase the 
rate and apply it on a country-by-country basis, which would, 
to a large extent, address the issue that you are raising in 
terms of larger companies which are more likely to have 
international operations being able to obtain lower tax rates 
on their foreign operations than they pay on operations within 
the U.S.
    And then also the OECD negotiations are an opportunity, for 
really the first time in a century, to overhaul the 
international tax architecture and prevent or mitigate a race 
to the bottom in corporate tax rates.
    So, if confirmed, I would look forward to working with you 
and with all the members of the committee and the Senate on 
these issues and understanding your perspectives on this.
    Senator Whitehouse. Great. Just one thing to flag for all 
the witnesses. Chairman Wyden has announced that he is going to 
be trying to put together a proper price on carbon emissions, 
something that a great many people support. There are probably 
four or five bills in the Senate right now pointing in that 
direction. And obviously a bill like that can create very 
significant revenue, and I just wanted to flag that prospect 
for you as you are thinking about what taxes and revenues look 
like, that the carbon pricing battle looms ahead. But I think 
we have a very good chance of getting a carbon fee on emissions 
so that pollution is no longer subsidized by these oil and gas 
companies.
    The second thing I want to flag is that we have asked 
Secretary Yellen to look at the saga of the 501(c)3s and the 
501(c)4s. My nutshell version of the story is that, as soon as 
Citizens United opened up unlimited money into politics, the 
next thing the big donors wanted was to hide who they were. And 
they went straight to the 501(c)4s, and then associated 
501(c)3s, to hide behind the IRS, I think very contrary to 
congressional intent. But with impeachment threats against the 
IRS Commissioner, with referrals to DOJ for prosecution of IRS 
personnel, they did their level best to try to batter the IRS 
into submission, not to enforce or not to amend the regulations 
for 501(c)3s and 501(c)4s--the result being a massive influx of 
anonymous money, dark money, into elections.
    I think it is important that we look back on that period 
and get a true narrative, one consistent with the Treasury IG 
report that showed that the original narrative cooked up by the 
dark money groups was false, and that we clear out the 
appropriations riders that were erected to defend the dark 
money operations so that Treasury can regulate again in this 
space, and that we clean up the swamp of dark money and the 
misuse of the 501(c)3s and 501(c)4s that are now so profoundly 
a part of our political system--and newly. We did not have this 
a decade ago, and now it is everywhere. And your world 
intersects with my world here, because I have to live with the 
pollution of our political dialogue caused by these groups.
    So we will follow up on those two things--carbon pricing 
and 501(c)3 abuse--but I wanted to flag them today.
    Thank you, Mr. Chairman.
    The Chairman. Thank you, Senator Whitehouse; important 
issues.
    Senator Thune?
    Senator Thune. Thank you, Mr. Chairman.
    The Chairman. I believe you are out there.
    Senator Thune. Yes, I am out there.
    The Chairman. Good. You are on.
    Senator Thune. Thanks, Mr. Chairman. And thanks to all our 
panelists for their willingness to serve.
    Let me ask a question about the 2017 law. The Tax Cuts and 
Jobs Act introduced section 199A, which provides a 20-percent 
deduction for pass-through businesses such as sole 
proprietorships, partnerships, and S corps, with respect to 
qualifying business income.
    TCJA introduced the provision in part to shrink the bias 
between corporate and noncorporate income, and most small 
businesses in the country operate in pass-through form, many of 
which have been hit hard by the pandemic. In fact, I think 98, 
99 percent of the businesses in my State are pass-throughs.
    Professor Batchelder, as the administration aims to 
increase taxes on corporations, what are your views on raising 
taxes on small businesses through the repeal of section 199A?
    Ms. Batchelder. Thank you for the question, Senator. As I 
understand it, the President has not proposed any changes to 
section 199A, and has also committed to not raising taxes on 
anyone earning less than $400,000.
    And I share your concern about small businesses and would 
be eager to discuss ways to strengthen small businesses, if 
confirmed.
    Senator Thune. So your understanding is that there is not 
going to be a proposal by the administration that would go 
after the 199A 20-percent deduction currently available to 
pass-through businesses with qualifying business income?
    Ms. Batchelder. Senator, I am not currently in the 
administration, so I could not speak to any future plans. But I 
have been reading everything that they have put out and have 
not seen any proposals to change 199A.
    Senator Thune. To follow up on that, President Biden has 
said that nobody earning $400,000 or less would be hit by new 
taxes, but it seems to me that some middle-class Americans 
would be hit by the administration's new death tax, eliminating 
so-called step-up in basis.
    Under its proposal, the untaxed gains on investment held at 
death would be taxed at the top rate of 39.6 percent, above an 
exemption of $1 million per individual. And there is a good 
chance that some parents might die with an estate that has 
gained a 
million-plus in value over the course of their lives, but their 
heir might be earning $40,000 to $50,000 a year, and that is 
especially true in the case of family farms and businesses 
where land values appreciate over decades, even though the 
farmer may be at times struggling just to break even.
    I understand the President has suggested an exemption for 
family farms and businesses, but it remains to be seen what 
that looks like. We have not seen any follow-up on that--other 
than a general statement about how it would work--and whether 
it in fact really protects anyone.
    Can you state, Professor Batchelder, with certainty that no 
taxpayer earning less than $400,000 would be hit by the Biden 
administration's step-up in basis tax proposal?
    Ms. Batchelder. So, as I read the proposal, it has proposed 
that no tax would apply to family farms or any small 
businesses, or for that matter any family-owned and -operated 
business, until it was no longer family-owned and -operated. So 
I read that as protecting those businesses, and would 
certainly, if confirmed, be eager to work with you and your 
staff on that provision.
    And as I understand it, that proposal also would exempt the 
first $1 million in gains, or $2 million per couple. And there 
is an additional exemption for residences. So I think it would 
apply to a very, very, very small percentage of the population.
    Senator Thune. So you do not think that under that 
proposal, if an heir is not liquid, that potentially a taxpayer 
could have to sell off some of their inherited assets to cover 
the tax liability?
    Ms. Batchelder. Again, as I read it, if the heir was 
inheriting a family-owned and -operated business, they would 
not need to pay the tax until they were no longer owning it and 
operating it.
    Senator Thune. All right.
    Dr. Harris--and I do not have a lot of time left--but under 
what circumstances would you second-guess the administration's 
own estimates of revenue gained through increased IRS funding 
measures?
    Dr. Harris. Thank you, Senator. So it is my understanding 
that the Office of Tax Analysis, which operates in an 
impressively independent way, has scored this as raising $700 
billion. There have been several suggestions that this is an 
understatement because they do not take into account certain 
behavioral effects. So I view the $700 billion as an 
understatement, if anything.
    Senator Thune. Okay. And do you--if the IRS receives 
additional funding or enforcement resources to narrow that tax 
gap, would you agree that any increase ought to come with 
commensurate accountability and transparency to taxpayers?
    Dr. Harris. Broadly speaking, I am in violent agreement 
that transparency is an important aspect of all areas of 
policy, and in particular when it comes to the IRS, which has, 
obviously, important implications for household finances.
    So when it comes to transparency, I think it is an 
important part of the IRS's job, and any policies or 
regulations the IRS puts forward, I agree that that should be a 
part of the deal.
    Senator Thune. Thank you, Mr. Chairman.
    The Chairman. I thank my colleague. And we have a vote on 
now, and I think we have heard from virtually all of our 
Senators. It seems to me all of you have demonstrated beyond 
any doubt that you are going to take these positions, and you 
are going to need no on-the-job training. And that is a 
judgment that I think every Senator who has been following 
these issues is going to reach.
    And clearly you are going to have your hands full, because 
a lot of the challenges for the days ahead are going to be very 
different. Tomorrow in this room we are going to start talking 
about changing the 44 provisions in the Federal tax code which 
are now a crazy quilt that does not provide the predictability 
and certainty we need for an economy driven by clean energy. 
And what we are going to be spelling out is basically that 
anybody in America, anybody--whether they are in renewable 
energy, or they are in fossil fuels--who can reduce carbon 
emissions can be part of an incentive system.
    It is new. It is what the times require. So I am very 
appreciative of all four of you, with a long track record of 
public service. And I think what you have shown today is that 
you are going to support policies that give everybody in 
America the chance to get ahead.
    And I will just close by saying I think that is what Build 
Back Better was supposed to be all about. And it also gives us 
a chance to build forward together, and that too is what our 
country is all about.
    With that, I remind my colleagues that questions for the 
record are due within a week. And with that, the Finance 
Committee is adjourned, and I thank our guests.
    [Whereupon, at 11:59 a.m., the hearing was concluded.]

                            A P P E N D I X

              Additional Material Submitted for the Record

                              ----------                              


    Prepared Statement of Lily Lawrence Batchelder, Nominated to be 
     Assistant Secretary for Tax Policy, Department of the Treasury
    Mr. Chairman, Ranking Member Crapo, and members of the committee, 
thank you for the opportunity to appear before you today. And thank 
you, Senator, for the very kind introduction.

    It is an honor to appear before this committee, having served as 
the Chief Tax Counsel under former Chairman Baucus for 4 years. Being a 
tax person, that was a dream job, and I am humbled to be considered for 
another dream job today, serving as the Treasury's Assistant Secretary 
for Tax Policy.

    I have great respect for this committee and the critical nature of 
its work. We face immense challenges as a country in navigating the 
pandemic and economic recovery, tackling long-term fiscal challenges, 
and doing so in a way that increases opportunity for all Americans. If 
I am fortunate enough to be confirmed, I would strive to be a strong 
partner to you in that work. I have spent most of my professional 
career working on tax policy, and am passionate about its role in 
advancing shared prosperity and economic mobility. Tax revenues fund 
many of our critical social programs. Tax benefits can curtail or 
exacerbate our vast disparities by income, wealth, race, ethnicity, 
gender, and geography. At the same time, well-constructed and well-
implemented tax policy can minimize gaming and distortions to business 
activity, while poorly constructed tax policy can do the reverse.

    This is one of the things I love about tax policy: it is 
simultaneously about high-level values and about practical, highly 
technical details that create opportunities for working across the 
aisle. There are many aspects of this position I look forward to if 
confirmed. I would hope to contribute to and advance President Biden's 
policy agenda to further our economic recovery, build back better, 
promote racial and gender equity, and address the climate crisis. This 
would include working with you and your staffs to help make sure any 
agreements you reach are drafted in technically sound ways. I would 
also work to ensure that Treasury issues timely and sound guidance on 
tax issues that is consistent with congressional intent and responsive 
to input from a broad range of stakeholders. Finally, I would strive to 
serve as a strong partner to the IRS on tax implementation and 
administration. This would include the exciting new programs they been 
tasked with implementing, like the fully refundable child credit, and 
also their ongoing duties, like taxpayer service. For many years, the 
IRS has been asked to undertake an immense and expanding set of 
responsibilities with, until recently, flat or declining funding. I 
would work to assist them in any ways Treasury's Office of Tax Policy 
can, because we all benefit from a well-functioning IRS.

    If confirmed, I am committed to engaging with you on a bipartisan 
basis. Over the course of my career, I have worked in the public, 
private, academic, and nonprofit sectors. These experiences have helped 
me to see tax policy from multiple perspectives, and have taught me how 
to work effectively and constructively with people who may hold 
different views than my own.

    My family could not join me today because of the pandemic, which 
might be a good thing, because our 15-month-old daughter Maia would 
probably be destroying the hearing room while waving to each of you if 
she were here. But she reminds me every day why public service is 
important--to make a better world for her, and even more so for all the 
children growing up without the financial security and other advantages 
that we are lucky to be able to provide her with.

    I also want to thank my family, especially my partner Peter, my 
parents, brothers, and in-laws, for their love and support. Without 
that support, including their care for our daughter Maia, I wouldn't be 
in a position to undertake the responsibilities associated with this 
role, which I take so seriously.

    Thank you for considering my nomination, 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): Lily Lawrence Batchelder.

 2.  Position to which nominated: Assistant Secretary for Tax Policy, 
U.S. Department of the Treasury.

 3.  Date of nomination: April 15, 2021.

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

 5.  Date and place of birth: March 19, 1972; Boston, MA.

 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):


------------------------------------------------------------------------
                                    Dates        Degree        Date of
          Institution            Attended *     Received      Degree *
------------------------------------------------------------------------
Yale Law School                  9/99-6 /02            JD         6 /02
------------------------------------------------------------------------
Harvard Kennedy School           9/97-6 /99           MPP         6 /99
------------------------------------------------------------------------
Stanford University              9/90-6 /94            AB         6 /94
------------------------------------------------------------------------
Milton Academy                   9/86-6 /90   High School         6 /90
------------------------------------------------------------------------
* All months are estimates based on my best recollection.


 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):


------------------------------------------------------------------------
                                                             Dates of
     Employer      Title/Description       Location        Employment *
------------------------------------------------------------------------
NYU School of Law  Robert C. Kopple   New York, NY         9/19-present
                    Family Professor
                    of Taxation
------------------------------------------------------------------------
NYU School of Law  Frederick I. and   New York, NY            9/17-9/19
                    Grace Stokes
                    Professor of Law
------------------------------------------------------------------------
NYU School of Law  Professor of Law   New York, NY            5/15-9/17
                    and Public
                    Policy
------------------------------------------------------------------------
National Economic  Deputy Director    Washington, DC          3/14-5/15
 Council, The       and Deputy
 White House        Assistant to the
                    President
------------------------------------------------------------------------
U.S. Senate        Majority Chief     Washington, DC          5/10-2/14
 Committee on       Tax Counsel
 Finance
------------------------------------------------------------------------
NYU School of Law  Professor of Law   New York, NY           12/08-5/10
                    and Public
                    Policy
------------------------------------------------------------------------
Harvard Law        Roscoe Pound       Cambridge, MA           1/09-1/09
 School             Visiting
                    Associate
                    Professor of Law
------------------------------------------------------------------------
NYU School of Law  Associate          New York, NY           9/07-12/08
                    Professor of Law
                    and Public
                    Policy
------------------------------------------------------------------------
NYU School of Law  Assistant          New York, NY            1/05-9/07
                    Professor of Law
                    and Public
                    Policy
------------------------------------------------------------------------
Skadden, Arps,     Associate (Tax)    Washington, DC          8/02-1/05
 Meagher, and                          and New York, NY
 Flom
------------------------------------------------------------------------
U.S. Senate        Summer Law Clerk   Washington, DC          7/01-8/01
 Committee on       (Tax)
 Finance
------------------------------------------------------------------------
Cleary, Gottlieb,  Summer Associate   New York, NY            5/01-7/01
 Steen, and
 Hamilton
------------------------------------------------------------------------
Office of the      Summer Law Clerk   Washington, DC          6/00-8/00
 Deputy Attorney
 General, U.S.
 Department of
 Justice
------------------------------------------------------------------------
Harvard Center     Project Manager,   Cambridge, MA and       6/99-8/99
 for                Africa             Nairobi, Kenya
 International      Competitiveness
 Development        Report
------------------------------------------------------------------------
Boston Consulting  Summer Consultant  Bethesda, MD            6/98-8/98
 Group
------------------------------------------------------------------------
NY State Senator   Director,          Brooklyn, NY           12/95-7/97
 Marty Markowtiz    Community
                    PAffairs
------------------------------------------------------------------------
Neighbors          Client Advocate    Brooklyn, NY            9/94-8/95
 Together/ Jesuit
 Volunteer Corps
------------------------------------------------------------------------
Bell Street Gym,   Recreation Leader  East Palo Alto,         6/94-8/94
 Sports, and                           CA
 Youth Center
------------------------------------------------------------------------
* All months are estimates based on my best recollection.


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):

        None.

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):


------------------------------------------------------------------------
  Organization/
     Business      Title/Description       Location          Dates *
------------------------------------------------------------------------
Peter G. Peterson  Consultant         New York, NY         2020-present
 Foundation
------------------------------------------------------------------------
Tax Law Center at  Faculty Director   New York, NY         2020-present
 NYU Law *
------------------------------------------------------------------------
NYU School of Law  Receive research   New York, NY         2015-present
 Foundation         grants                                    2005-2010
------------------------------------------------------------------------
Tax Analysts *     Board Member       Falls Church, VA     2018-present
------------------------------------------------------------------------
Tax Law Review *   Associate Editor   New York, NY         2018-present
------------------------------------------------------------------------
National Academy   Member, Study      Washington, DC          2019-2021
 of Social          Panel on
 Insurance *        Economic
                    Security
 
                   Member, Study                              2003-2005
                    Panel on Paying
                    Benefits from
                    Individual
                    Accounts in
                    Federal
                    Retirement
                    Policy
------------------------------------------------------------------------
National Tax       Board Member       Washington, DC          2017-2020
 Association *
 
                   Co-Chair, Program                               2017
                    Committee for
                    Spring Symposium
 
                   Member, Program                                 2009
                    Committee for
                    Fall Conference
------------------------------------------------------------------------
New York Times     Op-ed writing      New York, NY            2015-2019
------------------------------------------------------------------------
Aspen Institute    Received           Washington, DC      2019 (paid in
                    honorarium for                                2021)
                    book chapter
------------------------------------------------------------------------
Economic Policy    Received speaking  Washington, DC               2019
 Institute          honorarium
------------------------------------------------------------------------
Cleary, Gottlieb,  Provided training  New York, NY                 2019
 Steen, and         and coaching
 Hamilton
------------------------------------------------------------------------
Georgetown         Visiting           Washington, DC               2018
 University Law     Professor of Law
 Center *
 
                   Dean's Visiting                                 2017
                    Scholar
------------------------------------------------------------------------
Urban-Brookings    Visiting Fellow *  Washington, DC         2018, 2016
 Tax Policy
 Center
 
                   Election Campaign                          2015-2016
                    Review Panel *
 
                   Affiliated                                 2009-2010
                    Scholar *
 
                   Contributions to                                2008
                    online
                    publication
------------------------------------------------------------------------
Center on Budget   Consultant         Washington, DC          2016-2018
 and Policy
 Priorities
------------------------------------------------------------------------
Bipartisan Policy  Member, Debt       Washington, DC          2017-2018
 Center *           Limit Working
                    Group
------------------------------------------------------------------------
Stanford           Received tenure    Stanford, CA                 2018
 University         letter
                    honorarium
------------------------------------------------------------------------
University of      Received speaking  Gainesville, FL              2018
 Florida            honorarium
------------------------------------------------------------------------
Hopewell Fund      Consultant                                      2018
------------------------------------------------------------------------
Bloomberg          Op-ed writing      New York, NY                 2017
------------------------------------------------------------------------
Democracy: A       Honorarium for     Washington, DC               2017
 Journal of Ideas   article
------------------------------------------------------------------------
Washington Center  Honorarium for     Washington, DC               2016
 for Equitable      article
 Growth
------------------------------------------------------------------------
Center for         Honorarium for     Washington, DC               2010
 American           article
 Progress
 
                   Advisory Board,                            2009-2010
                    Doing What Works
                    Project *
------------------------------------------------------------------------
Rockefeller        Member, Search     Albany, NY              2008-2010
 Institute of       Committee
 Government *
------------------------------------------------------------------------
American College   Advisory Board     Washington, DC          2007-2010
 of Tax Counsel*    Member,
                    Tannenwald
                    Foundation for
                    Excellence in
                    Tax Scholarship
------------------------------------------------------------------------
Center for         Advisory Board     Chicago, IL             2007-2009
 Economic           Member
 Progress *
------------------------------------------------------------------------
Neighbors          Board Chair        Brooklyn, NY            2007-2008
 Together
 
                   Chair of                                   2005-2008
                    Nominations
                    Committee
 
                   Vice Chair                                 2006-2007
 
                   Secretary                                  1996-1999
 
                   Board Member                          2002-2008 1996-
                                                                   1999
------------------------------------------------------------------------
Harvard Kennedy    Wiener Fellow      Cambridge, MA                2001
 School, Wiener
 Center on Social
 Policy *
------------------------------------------------------------------------
New America        Research           Washington, DC          1998-1999
 Foundation *       Associate
------------------------------------------------------------------------
* Denotes unpaid.


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):

        AAA (member).

        National Academy of Social Insurance (member).

        National Tax Association (member).

        Various museums and botanical gardens (currently Marie Selby 
        Gardens in Sarasota, FL; recently Hillwood Gardens in 
        Washington, DC).

        New York bar (lapsed).

        Washington, DC bar (lapsed).

        Massachusetts bar (lapsed).

        Tax Coalition (lapsed).

        Junior League of Brooklyn (lapsed).

13.  Political affiliations and activities:

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

       N/A

        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.

       I have not held an office or position in a political campaign or 
election committee during the past 10 years. I have periodically 
responded to requests for advice or questions about my research from 
campaigns on an informal basis. To the best of my recollection, these 
include the Biden, Buttigieg, Castro, Gillibrand, Harris, O'Rourke, and 
Warren 2020 presidential campaigns, the Clinton 2016 presidential 
campaign, and the Perriello 2017 gubernatorial campaign.

        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.


        Fetterman for PA                                $50      1/28/21
 
        Biden for President                            $500      9/29/20
 
        Biden Victory Fund                             $500      9/29/20
 
        Biden for President                          $1,000      9/15/20
 
        DSCC                                           $500      9/15/20
 
        Biden for President                            $250      4/28/20
 
        John Turner for Texas                          $100      8/28/18
 
        Stacy Abrams for Georgia                       $200         2018
 
        Phil Weiser for Colorado                        $50       9/5/17
 
        Tom Perriello for Virginia                     $200       6/5/17
 
        Tom Perriello for Virginia                     $200       3/1/17
 
        Tom Perriello for Virginia                     $200       1/6/17
 
        Hillary for America                             $50     10/10/16
 
        Hillary for America                            $300     10/10/16
 
        Hillary for America                            $250      7/26/16
 
        Hillary Victory Fund                           $250      7/26/16
 


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):

        Academic Writing Resident Fellow, Rockefeller Foundation 
        Bellagio Center (Summer 2017).

        Clifford L. Porter Prize for Best Paper on Taxation, Yale Law 
        School (2002).

        Clifford L. Porter Prize for Best Paper on Taxation, Yale Law 
        School (2001).

        Kennedy Fellow, Harvard Kennedy School (1997-1999).

        Firestone Medal for Excellence in Undergraduate Research, 
        Stanford University (1994).

        David Starr Jordan Fellow, Stanford University (1990-1994).

        South African Issues Fellow, Stanford University (1991).

        Note: List excludes fellow positions listed in question (11) 
        above.

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):

        Articles and Working Papers

        Accounting for Behavioral Biases in Business Tax Reform: The 
        Case of Expensing, https://papers.ssrn.com/sol3/
        papers.cfm?abstract_id=2904885 (conditional acceptance at 
        Journal of Law, Finance and Accounting).

        Optimal Tax Theory as a Theory of Distributive Justice, https:/
        /papers.
        ssrn.com/sol3/papers.cfm?abstract_id=3724691.

        Taxing the Rich: Issues and Options, https://papers.ssrn.com/
        sol3/papers.
        cfm?abstract_id=3452274 (with David Kamin).

        The Shaky Case for a Business Cash-Flow Tax, https://
        papers.ssrn.com/sol3/papers.cfm?abstract_id=3724003, 70 
        National Tax Journal 900 (2017).

        Assessing President Trump's Child Care Proposals, https://
        papers.ssrn.com/sol3/papers.cfm?abstract_id=3062318, 70 
        National Tax Journal 759 (2017) (with Elaine Maag, Chye-Ching 
        Huang, and Emily Horton).

             Earlier version published as: Who Benefits from President 
        Trump's Child Care Proposals, https://www.taxpolicycenter.org/
        publications/who-benefits-president-trumps-child-care-
        proposals/full, Tax Policy Center Research Report (February 28, 
        2017) (with Elaine Maag, Chye-Ching Huang, and Emily Horton).

        Families Facing Tax Increases under Trump's Tax Plan, https://
        papers.
        ssrn.com/sol3/papers.cfm?abstract_id=2842802, Tax Policy Center 
        Research Report (October 28, 2016).

             Reprinted: Tax Notes (November 7, 2016).

        What Should Society Expect from Heirs? The Case for a 
        Comprehensive Inheritance Tax, https://papers.ssrn.com/sol3/
        papers.cfm?abstract_id=1274466, 63 Tax Law Review 1 (2009) 
        (symposium issue on article).

        Government Spending Undercover: Spending Programs Administered 
        by the IRS, https://papers.ssrn.com/sol3/
        papers.cfm?abstract_id=1589242, Center for American Progress 
        (April, 2010) (with Eric Toder).

        Estate Tax Reform: Issues and Options, https://papers.ssrn.com/
        sol3/papers.
        cfm?abstract_id=1320304, Tax Notes (February 2, 2009).

        Taxing Privilege More Effectively: Replacing the Estate Tax 
        with an Inheritance Tax, https://papers.ssrn.com/sol3/
        papers.cfm?abstract_id=993314, Brookings Institution Hamilton 
        Project Discussion Paper 2007-07 (June 2007).

        Efficiency and Tax Incentives: The Case for Refundable Tax 
        Credits, https://papers.ssrn.com/sol3/
        papers.cfm?abstract_id=941582, 59 Stanford Law Review 23 (2006) 
        (with Fred T. Goldberg, Jr. and Peter R. Orszag).

        Taxing the Poor: Income Averaging Reconsidered, https://
        papers.ssrn.com/sol3/papers.cfm?abstract_id=1624711, 40 Harvard 
        Journal on Legislation 395 (2003).

        Case Note, The Costs of Uniformity: Federal Foreign 
        Policymaking, State Sovereignty, and the Massachusetts Burma 
        Law, https://openyls.law.yale.edu/handle/20.500.13051/16895, 18 
        Yale Law and Policy Review 485 (2000).

        Book Chapters

        Leveling the Playing Field between Inherited Income and Income 
        from Work through an Inheritance Tax, https://papers.ssrn.com/
        sol3/papers.cfm?abstract
        _id=3526520, in Tackling the Tax Code: Efficient and Equitable 
        Ways to Raise Revenue (eds. Jay Shambaugh and Ryan Nunn, 
        Brookings Institution, 2020).

        Policy Options for Taxing the Rich, https://papers.ssrn.com/
        sol3/papers.
        cfm?abstract_id=3634117, in Maintaining the Strength of 
        American Capitalism (eds. Melissa Kearney and Amy Ganz, The 
        Aspen Institute, 2019) (with David Kamin).

        The ``Silver Spoon'' Tax: How to Strengthen Wealth Transfer 
        Taxation, https://papers.ssrn.com/sol3/
        papers.cfm?abstract_id=2862144, in Delivering Equitable Growth: 
        Strategies for the Next Administration (Washington Center for 
        Equitable Growth, 2016).

        Fiscal Considerations in Curbing Climate Change, in Climate 
        Finance: Regulatory and Funding Strategies for Climate Change 
        and Global Development, https://www.jstor.org/stable/
        j.ctt9qg9zb?turn_away=true (eds. Richard Stewart, Benedict 
        Kingsbury, and Bryce Rudyk) (NYU Press, 2009).

        Taxing Privilege More Effectively: Replacing the Estate Tax 
        with an Inheritance Tax, in The Path to Prosperity: Hamilton 
        Project Ideas on Income Security, Education and Taxes, https://
        www.jstor.org/stable/10.7864/j.ctt1262d6 (Jason Furman and 
        Jason Bordoff, eds.) (Brookings Institution Press, 2008).

        Working Papers

        The Mommy Track Divides: The Impact of Childbearing on Wages of 
        Women of Differing Skill Levels, https://www.jstor.org/stable/
        10.7864/j.ctt1262d6, NBER Working Paper W16582 (December 2010) 
        (with David Ellwood and Ty Wilde).

        Dead or Alive: An Investigation of the Incidence of Estate 
        Taxes and Inheritance Taxes, https://papers.ssrn.com/sol3/
        papers.cfm?abstract_id=1134113, 3rd Annual Conference on 
        Empirical Legal Studies Papers (October 2008) (with Surachai 
        Khitatrakun).
        Congressional Testimony

        Opportunities and Risks in Individual Tax Reform, https://
        papers.ssrn.com/sol3/papers.cfm?abstract_id=3037228, Testimony 
        before the United States Senate Committee on Finance (September 
        13, 2017).

        Addressing Budgetary Challenges Through a Neglected Type of 
        Automatic Spending: Tax Expenditures, https://republicans-
        budget.house.gov/uploaded
        files/batchelder_testimony.pdf. Testimony before the United 
        States House Committee on the Budget (June 9, 2016).

        Reform Options for the Estate Tax System: Targeting Unearned 
        Income, Testimony before the United States Senate Committee on 
        Finance, https://papers.ssrn.com/sol3/
        papers.cfm?abstract_id=1601652 (March 12, 2008).

        Household Income Volatility and Tax Policy: Helping More and 
        Hurting Less, Testimony before the Joint Economic Committee, 
        https://papers.ssrn.com/sol3/papers.cfm?abstract_id=1601619 
        (February 28, 2007).

        Op-eds and Short Pieces

        Tax the Rich and Their Heirs, https://www.nytimes.com/2020/06/
        24/opinion/sunday/inheritance-tax-inequality.html, New York 
        Times (June 24, 2020).

        Trump Is a Bad Businessman. Is He a Tax Cheat, Too?, https://
        www.nytimes.
        com/2019/05/09/opinion/trump-tax-returns.html, New York Times 
        (May 9, 2019).

        How to Make Trump-Style Wealth Pay Its Fair Share, https://www.
        nytimes.com/2018/10/04/opinion/trump-wealth-tax-evasion.html, 
        New York Times (Octobter 4, 2018).

        The GOP Tax Plan Creates One of the Largest New Loopholes in 
        Decades, https://www.latimes.com/opinion/op-ed/la-oe-
        batchelder-kamin-tax-deduction-pass-through-income-20171231-
        story.html, Los Angeles Times (December 31, 2017) (with David 
        Kamin).

        Trump's Giant Loophole, https://www.nytimes.com/2017/05/30/
        opinion/trump-tax-plan-pass-through-business.html, New York 
        Times (May 30, 2017).

        Trump's Child Care Plan for the Rich, https://
        www.bloomberg.com/opinion/articles/2017-02-28/trump-s-child-
        care-plan-for-the-rich, Bloomberg View (February 28, 2017) 
        (with Chye-Ching Huang).

        A Business Cash-Flow Tax Could Reduce Investment, Contrary to 
        What Some Economists Think, https://www.taxpolicycenter.org/
        taxvox/business-cash-flow-tax-could-reduce-investment-contrary-
        what-some-economists-think, Tax Vox (January 24, 2017).

        Fixing the Estate Tax, https://democracyjournal.org/magazine/
        43/fixing-the-estate-tax/, 43 Democracy (Winter, 2017).

        If You're Not Saving for Retirement or a Rainy Day, Then myRA 
        Should Be yourRA, https://www.huffpost.com/entry/if-youre-not-
        saving-for-r_b_8478238, Huffington Post (November 5, 2015) 
        (with Jared Bernstein).

        We Must Not Allow Scare Tactics to Derail the Conflict-of-
        Interest Rule, https://www.huffpost.com/entry/we-must-not-
        allow-scare-t_b_8337342, Huffington Post (October 20, 2015) 
        (with Jared Bernstein).

        Is Your Financial Adviser Making Money Off Your Bad 
        Investments?, https://www.nytimes.com/2015/09/30/opinion/is-
        your-financial-adviser-making-money
        -off-your-bad-investments.html. New York Times (September 29, 
        2015) (with Jared Bernstein).

        Important Tools to Lift Wages and Reduce Poverty, Particularly 
        for Women, https://obamawhitehouse.archives.gov/blog/2014/03/
        26/minimum-wage-and-tipped-minimum-wage-important-tools-lift-
        wages-and-reduce-poverty-p, White House Blog (March 26, 2014) 
        (with Betsey Stevenson).

        Tax Expenditures: What Are They and How Are They Structured?, 
        in The Tax Policy Briefing Book (Tax Policy Center, eds.) 
        (July, 2008).

             Note: I believe the version I wrote is no longer available 
        on the web because it has been replaced with an updated 
        version.

        What Are the Options for Reforming the Taxation of Carried 
        Interest?, in The Tax Policy Briefing Book (Tax Policy Center, 
        eds.) (June, 2008).

             Note: I believe the version I wrote is no longer available 
        on the web because it has been replaced with an updated 
        version.

        What is Carried Interest and How Should It Be Taxed?, in The 
        Tax Policy Briefing Book (Tax Policy Center, eds.) (June, 
        2008).

             Note: I believe the version I wrote is no longer available 
        on the web because it has been replaced with an updated 
        version.

        Reforming Tax Incentives into Uniform Refundable Credits, 
        https://www.
        degruyter.com/document/doi/10.2202/1932-0183.1091/html, 2:2 
        Basic Income Studies (December 2007) (with Fred T. Goldberg, 
        Jr.).

        What is an Inheritance Tax?, in The Tax Policy Briefing Book 
        (Tax Policy Center, eds.) (October 2007).

             Note: I believe the version I wrote is no longer available 
        on the web because it has been replaced with an updated 
        version.

        Taxing Privilege More Effectively: Replacing the Estate Tax 
        with an Inheritance Tax, https://www.hamiltonproject.org/
        assets/legacy/files/downloads_and_links
        /Taxing_Privilege_More_Effectively-
        _Replacing_the_Estate_Tax_with_an_Inheri
        tance_Tax_Brief.pdf, Brookings Institution Hamilton Project 
        Policy Brief No. 2007-07 (June, 2007).

             Reprinted: Tax Notes (June, 18, 2007).

        Reforming Tax Incentives into Uniform Refundable Credits, 
        https://www.
        brookings.edu/wp-content/uploads/2016/06/pb156.pdf, Brookings 
        Institution Policy Brief #156 (April 2006) (with Fred T. 
        Goldberg, Jr. and Peter R. Orszag).

        Amicus Briefs and Group Analysis of Policy Proposals

        The Games They Will Play: Tax Games, Roadblocks, and Glitches 
        under the 2017 Tax Legislation, https://papers.ssrn.com/sol3/
        papers.cfm?abstract_id=
        3089423, 103 Minnesota Law Review 1439 (2019) (with 12 law 
        professors and practitioners). Earlier version posted as: The 
        Games They Will Play: Tax Games, Roadblocks, and Glitches under 
        the House and Senate Tax Bills, https://papers.ssrn.com/sol3/
        papers.cfm?abstract_id=3084187 (December 13, 2017) (with 12 law 
        professors and practitioners).

        Brief of Amici Curiae Tax Law Professors and Economists in 
        Support of Petitioner in South Dakota v. Wayfair, https://
        papers.ssrn.com/sol3/papers.cfm
        ?abstract_id=3064293, No. 17-494 (Supreme Court of the United 
        States, filed November 2, 2017) (note that I am a signatory but 
        not the author of the brief).

        Brief Amicus Curiae on behalf of 19 Tax Law and Administrative 
        Law Professors, Altera v. Commissioner, https://
        papers.ssrn.com/sol3/papers.cfm?abstract
        _id=2805432, Nos. 16-70496, 16-70497 (9th Circuit, filed July 
        5, 2016). (Note: I am a signatory but not the author of the 
        brief).

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):

        ``Issues Specific to Inheritance Taxes,'' NYU--UC Berkeley--
        UCLA conference on Taxing Capital (September 25, 2020).

        ``Optimal Tax Theory as a Theory of Distributive Justice''

             Harvard Law School Faculty Workshop (October 10, 2019).
             NYU Tax Policy and Public Finance Colloquium (September 3, 
        2019).
             University of San Diego Richard C. Pugh Lecture (February 
        28, 2019).
             Indiana University Maurer School of Law Tax Policy 
        Colloquium (January 31, 2019).
             Stanford Law School Tax Policy Workshop (January 15, 
        2019).
             Georgetown University Law Center Faculty Workshop 
        (November 29, 2018).
             National Tax Association 111th Annual Conference on 
        Taxation (November 17, 2018).
             University of Richmond School of Law Faculty Workshop 
        (September 21, 2018).

        ``Taxing the Rich: Issues and Options''

             National Tax Association 112th Annual Conference on 
        Taxation (November 22, 2019).
             NYU Robert C. Kopple Family Professor of Taxation Chair 
        Lecture (September 4, 2019).

        ``The Triumph of Injustice,'' https://stonecenter.gc.cuny.edu/
        panel-the-triumph-of-injustice/, panelist, CUNY Stone Center on 
        Socio-Economic Inequality (October 23, 2019).

        ``Toward Tax Fairness: A Proposal to Fix the Unfair U.S. Tax 
        Code,'' https://www.americanprogressaction.org/events/toward-
        tax-fairness/, panelist, Center for American Progress 
        (September 12, 2019).

        ``Ways We Can Tax the Very Rich,'' panelist, Economic Policy 
        Institute conference on Taxing the (Very) Rich (June 25, 2019).

        ``Effects of the New Tax Law on Corporate and Business Tax 
        Planning Decisions,'' https://www.youtube.com/
        watch?v=otESVdyMrrc, panelist, Urban-Brookings Tax Policy 
        Center and UNC Tax Center conference on Effects of Corporate 
        and Business Provisions of the Tax Cuts and Jobs Act (June 6, 
        2019).

        ``Section 199A and the Regulations Thereunder,'' moderator, 
        University of Virginia Law School Tax Study Group (April 12, 
        2018).

             Note: Since I was only the moderator, I did not have 
        prepared remarks.

        ``The 2017 Tax Bill and the Future of Tax Reform,'' discussant, 
        National Tax Association 111th Annual Conference on Taxation 
        (November 16, 2018).

             Note: Since I was only discussing other people's 
        presentations, I did not have prepared remarks.

        ``Reform Options: Taxation of Individuals,'' Washington Center 
        for Equitable Growth convening on Approaches to Progressive Tax 
        Reform After the Tax Cuts and Jobs Act (November 1, 2018).

        ``Tax Policy After the Tax Cuts and Jobs Act of 2017,'' 
        panelist, American Accounting Association Annual Meeting 
        (August 6, 2018).

        ``Improving Retirement Savings Choices through Smart Defaults''

             Boston College Tax Policy Workshop (November 28, 2017).
             Virginia Autumn Invitational Tax Conference (November 17, 
        2017).
             National Tax Association 110th Annual Conference on 
        Taxation (November 9, 2017).
             New School Economics Department Political Economy of Aging 
        Workshop (March 10, 2017).
             NYU School of Law Faculty Workshop (February 27, 2017).

        ``Accounting for Behavioral Biases in Business Tax Reform: The 
        Case of Expensing''

             International Tax Policy Forum (June 2, 2017).
             American Law and Economics Association annual meeting (May 
        13, 2017).
             Duke Law School Tax Policy Workshop (March 30, 2017).
             Tulane Law School Tax Roundtable (March 24, 2017).
             NYU Tax Policy and Public Finance Colloquium (January 23, 
        2017).
             Tax Economists Forum, Washington, DC (December 20, 2016).
             Journal of Law, Finance, and Accounting Annual Conference 
        (November 12, 2016).
             National Tax Association Annual Conference on Taxation 
        (November 11, 2016).
             University of North Carolina School of Law Faculty 
        Workshop (October 27, 2016).
             Oxford University Centre for Business Taxation Annual 
        Symposium (June 29, 2016).

        ``The Tax Cuts and Jobs Act: A Tax System for the 21st 
        Century?'', panelist, National Tax Association 48th Annual 
        Spring Symposium (May 17, 2018).

        ``The Tax Cuts and Jobs Act: Tax Administration Challenges,'' 
        https://www.
        youtube.com/watch?v=R5yD-WMbviw, panelist, 3rd Annual Donald C. 
        Lubick Symposium, Urban-Brookings Tax Policy Center (April 9, 
        2018).

        ``The Tax Bill: Bad Process, Bad Policy,'' https://
        www.americanprogress.org/events/tax-bill-bad-process-bad-
        policy/, panelist, Center for American Progress (March 1, 
        2018).

        ``U.S. Tax Reform: Where Are We Now?'', https://
        www.youtube.com/watch?v=-Jsdscrig1Y, panelist, City University 
        of New York Graduate Center (February 28, 2018).

        ``The New Tax Bill: Key Provisions, (Questionable) Assumptions, 
        and Likely (Unintended) Consequences,'' panelist, Latham and 
        Watkins Forum, NYU School of Law (February 7, 2018).

        ``Dream Hoarders by Richard Reeves,'' discussant, Ellen Bellet 
        Gelberg Tax Policy Lecture, University of Florida Levin College 
        of Law (February 2, 2018).

             Note: Because this was an informal panel discussion of 
        another person's book, I did not have prepared remarks.

        ``Tax Legislation in the 116th Congress,'' panelist, 
        Association of American Law Schools 112th Annual Meeting 
        (January 5, 2018).

        ``U.S. Tax Reform,'' panelist, Council on Foreign Relations 
        (December 4, 2017).

             Note: Because this was an informal panel discussion, I did 
        not have prepared remarks.

        ``Tax Reform in Theory and in Practice,'' panelist, National 
        Tax Association 110th Annual Conference on Taxation (November 
        9, 2017).

        ``Tax Cuts and Jobs Act,'' United States House of 
        Representatives Democratic Caucus Dinner (November 6, 2017).

        ``Destination-Based Taxes under an Income Base,'' panel 
        moderator, NYU/UCLA Tax Policy Conference on New Approaches to 
        Calculation and Allocation of the International Tax Base 
        (October 27, 2017).

             Note: Because I was only the moderator, I did not have 
        prepared remarks.

        ``Tax Reform,'' panelist, New York University Journal of Law 
        and Business and The Classical Liberal Institute conference on 
        America's Place in the World: Tax Reform and Protectionism 
        (October 12, 2017).

             Note: Because this was an informal panel discussion, I did 
        not have prepared remarks.

        ``Opportunities and Risks in Individual Tax Reform,'' Testimony 
        before the United States Senate Committee on Finance (September 
        13, 2017).

        ``The Shaky Case for a Business Cash-Flow Tax''

            National Tax Association spring symposium (May 19, 2017).

        ``Does Health Care Reform Provide a Roadmap for Retirement 
        Savings Reform?''

            NYU School of Law Summer Workshop (August 11, 2016).

             Southeastern Association of Law Schools Annual Conference 
        (August 7, 2016).

             Note: Both of these were informal workshops to discuss 
        early stage research ideas so I did not have prepared remarks.

        ``Addressing Budgetary Challenges Through a Neglected Type of 
        Automatic Spending: Tax Expenditures,'' https://
        budget.house.gov/legislation/hearings/congressional-budgeting-
        need-control-automatic-spending-and-unauthorized, Testimony 
        before the United States House Committee on the Budget (June 9, 
        2016).

        ``U.S. Tax Legislative Process and Political Landscape,'' 
        panelist, 17th Annual NYU/KPMG Tax Symposium on U.S. Tax 
        Reform--A Perfect Storm (March 10, 2017).

             Note: Because this was an informal panel discussion, I did 
        not have prepared remarks.

        ``Trump's Economic Agenda: The Path from Rhetoric to Reality,'' 
        panelist, NYU School of Law Forum (March 1, 2017).

             Note: Because this was an informal panel discussion, I did 
        not have prepared remarks.

        ``The Presidential Candidates' Tax Plans,'' moderator, NYU 
        School of Law (October 25, 2016).

             Note: Because I was only the moderator, I did not have 
        prepared remarks.

        ``Presidential Politics and The Economy,'' https://www.c-
        span.org/video/?4168
        59-1/bloomberg-politics-hosts-forum-presidential-candidates-
        economic-plans, panelist, Bloomberg Politics at the Table 
        (October 13, 2016).

        ``Tax Reform Barriers and Opportunities in the Current 
        Political Environment,'' luncheon speaker at Urban-Brookings 
        Tax Policy Center Leadership Council (September 16, 2016).

             Note: Because this was an informal panel discussion, I did 
        not have prepared remarks.

        ``Tax Reform: What Do the Candidates Say,'' panel presentation 
        at 2016 Tax Coalition Issues Forum (May 5, 2016).

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

        I bring deep experience in tax policy and management, having 
        held senior positions in the executive and legislative 
        branches, including Chief Tax Counsel for the Senate Committee 
        on Finance and Deputy Director of the National Economic Council 
        at the White House, where I covered tax and budget issues. I 
        have also taught, researched, and written on tax policy at NYU 
        School of Law for more than a decade, most recently as the 
        Robert C. Kopple Family Professor of Taxation. Prior to NYU, I 
        was a tax associate at Skadden, Arps, Meagher, and Flom. 
        Earlier in my career, I worked in direct service in low-income 
        communities. I believe these experiences in the public, 
        private, academic, and nonprofit sectors have helped me to see 
        tax policy from multiple perspectives and work effectively with 
        people who may hold different views than my own.

        My work on tax policy is broad and has covered personal income 
        taxes, business tax reform, international tax reform, wealth 
        transfer taxes, excise taxes, retirement savings policy, and 
        tax expenditures.

        I would be honored to apply this experience to the Treasury's 
        critical work as we navigate the current pandemic and economic 
        recovery and as we tackle long-term challenges.

                   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.

        I will go on an unpaid leave of absence from my tenured faculty 
        position at NYU School of Law (2 years, subject to extension) 
        once confirmed. NYU will not provide any housing benefits or 
        make any contributions to any retirement plans on my behalf 
        while I am on leave. Pursuant to NYU's standard policy, NYU 
        will continue to pay premiums for my term life insurance 
        coverage for 12 months.

 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.

        I have tenure at NYU School of Law.

 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.

        NYU grants a 2-year leave of absence for public service. My 
        expectation is to serve for 2 years.

                  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, or publicly expressed support and/or 
        concerns, about the following bills, regulations, and tax 
        administration issues: the Coronavirus Aid, Relief, and 
        Economic Security Act of 2020 (H.R. 748) and its 
        implementation; wealth transfer tax reforms; reforms to the 
        taxation of capital income and wealth; EITC and Child Tax 
        Credit reforms; IRS funding, the FreeFile Alliance, and related 
        initiatives; the Department of Labor fiduciary rule; the Tax 
        Cuts and Jobs Act of 2017 (H.R. 1) and the regulations 
        thereunder; and State auto-IRA proposals. On my own behalf, I 
        have also testified before Congress on the topics of individual 
        tax reform and tax expenditures.

 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 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.

                       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.

        No.

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

        N/A.

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

        N/A.

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

        N/A.

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

        My previous work for the Senate Finance Committee has 
        sensitized me to the importance of being responsive to Congress 
        and working in a bipartisan manner.

                     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 Lily Lawrence Batchelder
             Question Submitted by Hon. Benjamin L. Cardin
    Question. On May 8, 2021, the Internal Revenue Service (IRS) issued 
Notice 2021-31, providing guidance on temporary premium assistance for 
COBRA continuation coverage enacted as part of the American Rescue Plan 
Act of 2021.

    Notice 2021-31 included guidance in the form of 86 Questions and 
Answers. My question for the record relates to Question 62, reprinted 
below. The issue raised in Question 62 is of significant concern to me. 
While I appreciate the Treasury Department and IRS indicate they need 
additional time to address the issue, the COBRA subsidy is available 
for a time-limited period and guidance for this instance is required to 
ensure the benefit of subsidized COBRA is realized consistent with 
congressional intent.

    There is some urgency to resolving this issue, so I would like to 
know more than that the Department and IRS are continuing to consider 
the issue. I want to make sure people in the situation captured by 
Question 62 receive the benefit of the COBRA subsidy. Therefore, please 
tell me the date by which we can expect resolution of the issue in 
Question 62 and the publication of additional guidance to allow for 
full implementation of the COBRA subsidy.

    Q-62. In the case of an insured plan subject solely to State law 
requiring the insurer to provide continuation coverage, is the employer 
eligible to take the premium assistance credit directly if the employer 
pays the full premium to the insurer?

    A-62. No. Under Sec. 6432(b)(3), in the case of an insured plan 
subject solely to State law with respect to the requirement to provide 
continuation coverage, the premium payee is the insurer providing the 
coverage under the group health plan. The Treasury Department and the 
IRS are aware that this requirement may create administrative issues 
for certain Small Business Health Options Program (SHOP) exchanges that 
aggregate premiums paid by participating employers or where State rules 
require full payment of premiums by the employer; the Treasury 
Department and the IRS are continuing to consider this issue.

    Answer. Currently, I am not privy to any discussions about guidance 
or potential timelines. If confirmed, I am committed to raising the 
issue promptly with the Office of Tax Policy (OTP) and IRS staff and 
responding as soon as practicable.

                                 ______
                                 
              Questions Submitted by Hon. Elizabeth Warren
    Question. Strengthening U.S. tax policies and setting high 
international standards on taxation are important pieces of getting 
giant corporations to pay their fair share. President Biden has put 
forward a number of important tax proposals, including raising the 
corporate tax rate to 28 percent and the global intangible low-tax 
income (GILTI) minimum tax to 21 percent. The Treasury Department has 
also committed to negotiating a global minimum tax at the OECD; 
however, recently it put forward a proposal for a rate of ``at least 15 
percent,'' which is much lower than proposed corporate tax and GILTI 
rates. Treasury described 15 percent as ``a floor'' and stated that 
``discussion should continue to be ambitious and push that rate 
higher.''\1\
---------------------------------------------------------------------------
    \1\ Department of the Treasury, ``READOUT: U.S. Department of the 
Treasury's Office of Tax Policy Meetings'', May 20, 2021, https://
home.treasury.gov/news/press-releases/jy0189.

    Will you, if confirmed, push for a global minimum tax rate that is 
---------------------------------------------------------------------------
higher than 15 percent? Please explain why or why not.

    Answer. Yes, if confirmed, I would push for a higher rate. I 
believe it is important to stop the race to the bottom on corporate tax 
rates.

    Question. If you will push for a global minimum tax rate that is 
higher than 15 percent, how will you accomplish that, given Treasury's 
expressed openness to a 15-percent rate and other obstacles?

    Answer. It is my understanding that the administration's proposal 
was an opening bid to secure momentum toward a global minimum tax, and 
that the administration's SHIELD proposal would work as an incentive to 
push the rate higher.

    Question. In 2018, the Trump administration expanded a requirement 
for a nonsensical cost-benefit analysis of tax regulations by the 
Office of Information and Regulatory Affairs (OIRA). OIRA's regulatory 
cost-benefit analysis framework does not take into account revenue 
impacts as a cost or benefit, and discounts changes in the distribution 
of the tax burden, which should be two primary considerations in 
evaluation of tax regulations.\2\
---------------------------------------------------------------------------
    \2\ Greg Leiserson, ``Cost-Benefit Analysis of U.S. Tax Regulations 
Has Failed. What Should Come Next?'' Washington Center for Equitable 
Growth, September 20, 2020, https://equitablegrowth.org/research-paper/
cost-benefit-analysis-of-u-s-tax-regulations-has-failed-what-should-
come-next/.

    Do you agree that OIRA's framework runs contrary to the Biden 
administration's goals of raising revenue to pay for crucial 
infrastructure investments and doing so in an equitable way? Please 
---------------------------------------------------------------------------
explain why or why not.

    If you do agree that OIRA's framework conflicts with Biden 
administration goals, how will you, if confirmed, prevent OIRA review 
from undermining implementation of the administration's tax reforms?

    Answer. President Biden has repeatedly emphasized his strong 
commitment to infrastructure investment and to funding that investment 
in fair and equitable ways as described in the American Jobs Plan. The 
post-enactment interpretation of legislation via tax regulations can be 
a critical factor in achieving the intended goals of legislation and 
whether or not projected revenues are raised. I do not believe anyone 
in the administration, including at Treasury or OMB, would be 
interested in imposing requirements or processes that did not advance 
the President's agenda or add value to the rule-making process. If 
confirmed I would be supportive of revisiting the 2018 MOA between 
Treasury and OIRA and considering whether there is a more appropriate 
framework for evaluating tax regulations, while still preserving OIRA's 
important role and input in the overall rule-making process. I would be 
committed to gathering input from a wide variety of stakeholders as 
part of any such process.

    Question. The tax system raises many concerns with respect to 
racial equity and yet does not provide data based on race and 
ethnicity, making it more difficult for us to understand and address 
the ways in which our tax code and enforcement are exacerbating 
inequities. We have yet to see any results from Treasury based on the 
ongoing racial equity assessment or new Equitable Data Working Group, 
on which you will serve, if confirmed.

    Will you commit to a vigorous racial equity review of all tax 
policies and practices, including a review of disproportionate IRS 
auditing of low-income, black taxpayers and use of predatory private 
debt collectors, again with a disproportionate impact on low-income, 
black Americans? Please explain why or why not.

    Answer. My understanding is that the Treasury Department, under the 
leadership and guidance of Deputy Secretary Wally Adeyemo, is 
undertaking an examination at Treasury and Treasury agencies akin to 
what you have outlined. If confirmed, I look forward to working with 
Deputy Secretary Adeyemo on ensuring a thorough review of policies and 
Treasury practices is conducting through a racial equity lens.

    Question. The Earned Income Tax Credit (EITC) is one of the 
government's most effective tools to fight poverty, increase financial 
stability, and promote work among low-income workers and their 
families.\3\ Despite the EITC's importance for supporting working 
families and their economic mobility, tax refunds received by EITC 
recipients who have defaulted on their Federal student loans are 
subject to offset. Borrower advocates have documented the harm that 
EITC offsets cause financially distressed student loan borrowers, 
including impairing their ability to get and keep jobs and pay for 
basic necessities, and exacerbating housing instability.\4\ The 
Treasury Department, however, does not provide public data on the 
amount and value of EITC refunds that are seized from borrowers each 
year.
---------------------------------------------------------------------------
    \3\ Center on Budget and Policy Priorities, ``Policy Basics: The 
Earned Income Tax Credit,'' December 10, 2019, https://www.cbpp.org/
research/federal-tax/the-earned-income-tax-credit.
    \4\ Persis Yu, ``Voices of Despair: How Seizing the EITC Is Leaving 
Student Loan Borrowers Homeless and Hopeless During a Pandemic,'' 
National Consumer Law Center, July 2020, https://www.nclc.org/images/
pdf/student_loans/voices-of-despair-seizing-eitc-in-pandemic.pdf.

    Do you believe the EITC should be exempt from seizure through the 
---------------------------------------------------------------------------
Treasury Offset Program? Please explain why or why not.

    Will you commit to analyzing and releasing data on the composition 
of tax refund offsets to identify how many borrowers have had their 
EITC seized through the Treasury Offset Program in recent years?

    Answer. My understanding is that this analysis would largely need 
to be handled by the IRS. If confirmed, I am committed to requesting a 
briefing by the relevant offices to better understand the issue and 
working with them to respond.

    Question. The American Rescue Plan that President Biden signed into 
law in March 2021 includes a provision that excludes from income any 
student loan debt that is modified or discharged beginning December 31, 
2020 until January 1, 2026, including private and institutional 
loans.\5\ The average student borrower who earns $50,000 in income 
would save approximately $2,200 in taxes for every $10,000 of forgiven 
student loans.\6\
---------------------------------------------------------------------------
    \5\ Office of Senator Elizabeth Warren, ``Warren, Menendez Bill to 
Make Student Loan Relief Tax-Free Passes as Part of COVID Relief 
Package, Clearing a Hurdle for Broad Loan Forgiveness,'' March 6, 2021, 
https://www.warren.senate.gov/newsroom/press-releases/warren-menendez-
bill-to-make-student-loan-relief-tax-free-passes-as-part-of-covid-
relief-package-clearing-a-hurdle-for-broad-loan-forgiveness.
    \6\ Id.

    While Congress has provided this crucial relief for student loan 
borrowers through 2026, Treasury can extend it indefinitely by issuing 
a Revenue Procedure to ensure that borrowers will not be taxed for 
canceled debt. This Rev. Proc. could rely on the general welfare 
exclusion, which grants the IRS the clear authority to conclude ``that 
payments to individuals by governmental units under legislatively 
provided social benefit programs for the promotion of the general 
welfare are not includible in a recipient's gross income.''\7\ There is 
recent precedent for the IRS to issue Rev. Procs. to shield Federal 
student loan borrowers from tax liabilities. In 2015, the Obama-Biden 
IRS issued Rev. Proc. 2015-57, which was the first in a series of Rev. 
Procs. that ensured that student loans canceled by the Department of 
Education under borrower defense to repayment would not result in a tax 
liability for borrowers.\8\ A similar rationale could be incorporated 
into a proposed Rev. Proc. regarding IDR forgiveness or administrative 
debt cancellation.
---------------------------------------------------------------------------
    \7\ For example, Rev. Rul. 2003-12, https://www.irs.gov/pub/irs-
drop/rr-03-12.pdf.
    \8\ Rev. Proc. 2015-57, https://www.irs.gov/pub/irs-drop/rp-15-
57.pdf.

    What steps will you take to ensure that the implementation of the 
American Rescue Plan provision protects all student borrowers, 
including those with private loans, whose debt is fully or partially 
forgiven from being saddled with thousands of dollars in surprise 
---------------------------------------------------------------------------
taxes?

    Will you commit to issuing a Rev. Proc. to indefinitely extend this 
relief for student borrowers beyond 2026?

    Answer. I share your concern regarding the heavy student loan debt 
burdens that many Americans face. While a long-term, comprehensive 
legislative solution to the problems associated with both borrowing and 
discharge in the student loan context would be optimal, if confirmed I 
would be open to using all of the tools at the disposal of Treasury and 
the IRS to ensure that borrowers do not face unexpected tax bills.

                                 ______
                                 
                 Questions Submitted by Hon. Mike Crapo
    Question. There have been repeated references made by the 
administration to individual taxpayers and corporations paying ``their 
fair share.'' For example, an April Treasury document describing the 
Made in America Tax Plan often refers to fair share. From Treasury's 
document, however, it appears that the plan envisions enactment of 
proposals that would merely move the country ``Toward a Fairer Tax 
System.''

    As a prospective adviser to the administration on tax policy, 
please define what constitutes a ``fair share'' and the appropriate 
measure to use to determine whether or not an individual is paying 
their fair share.

    Given your definition and measure, for tax year 2021, what is the 
fair share for a single filer on taxable income: up to $9.950; $9,951 
to $40,525, $40,526 to $86,375, $86,376 to $164,925, $164,926 to 
$523,600, over $523,600?

    Please define what constitutes a ``fair share'' and the appropriate 
measure to use to determine whether or not a corporation is paying its 
fair share.

    Why do you believe that the Made in America Tax Plan proposes only 
to move ``toward'' a ``fairer'' tax system, thereby foregoing movement 
to a fully fair system and leaving fairness gains unfulfilled to remain 
on the table for future tax policy modifications?

    Answer. The United States exhibits relatively high levels of income 
and wealth inequality and low levels of intergenerational economic 
mobility compared to other high-income countries. This makes a 
progressive tax system especially important.

    A progressive tax system is one where tax rates rise with income, 
so that higher- income people pay a higher share of their income in tax 
than lower-income households. I support a more progressive tax system 
and one that taxes income from wealth more like income from work, as 
President Biden has proposed. It is worth noting that President Biden 
has committed to not raising taxes on anyone with income under 
$400,000.

    Question. The Made in America Tax Plan, outlined by Treasury in an 
April 2021 document, identifies a proposal of ``replacing fossil fuel 
subsidies with incentives for clean energy production.'' The plan 
proposes to ``remove subsidies for fossil fuel companies.''

    Please identify your understanding of what subsidies the plan would 
remove, and how they differ from like ``subsidies'' in place for other 
companies performing similar activities but not involving ``fossil 
fuels.''

    If enacted, do you believe that the plan would lead to higher gas 
prices at the pump in the near term, defined as the period 2022-2024?

    If so, would you have any concern that such an effect would have 
disproportionate adverse effects on low- to middle-income workers whose 
expenditures on ``fossil fuel'' related consumables such as gasoline 
and heating fuel tend to be higher shares of their incomes than for 
upper earners?

    Answer. I have not been privy to discussions within Treasury. Thus, 
my understanding of Treasury's Green Book proposals is identical to 
what was published in the Green Book. It describes these proposals 
under the heading ``eliminate fossil fuel subsidies.'' I am not aware 
of studies finding a substantial effect on gas prices as a result of 
such changes.

    Question. You have been employed by New York University, which 
holds billions of dollars in endowment funds. Some of those funds have 
come from donations from people's wealth and estates. Your employer 
does not use all of its endowment funds to help students or 
researchers. Rather, it carries some of those funds forward, presumably 
to help ensure that resources can be made available for future students 
and researchers. That is, your employer builds dynastic wealth.

    Families in the United States wish to do the same, yet you seem to 
believe that bequest motives mainly show up as undue benefit to the 
``rich'' or ``ultra-rich.'' People wish to accumulate wealth over time, 
and they choose not to consume all the accumulation in their lifetimes 
so that future members of their family can benefit. While that seems 
like altruism to me, it apparently seems like some sort of undeserved 
dynasty building to you.

    Since New York University is building and accumulating dynastic 
wealth, from which you derive benefits, should Congress increase 
taxation of university endowments and use the proceeds to spend on what 
you and others may view as more worthy social investments?

    Answer. The taxation of large university endowments is a complex 
issue. As you suggest, not all of the benefits of large endowments flow 
to students from disadvantaged backgrounds. At the same time, 
universities may produce positive externalities, whether through basic 
research or increasing the next generation's human capital. As I 
understand it, President Biden has not proposed any changes to the 
taxation of endowments. If confirmed, I would look forward to working 
with Congress to address the issues that endowments raise, including 
through any legislative proposals in this space.

    Question. Your writing on inheritances, estates, bequests, and the 
like is largely premised on your norms and beliefs that inequality has 
risen substantially, to the point of overall social concern, and that 
intergenerational mobility has shrunk. Are you aware of any research 
suggesting that your beliefs about inequality are overstated and, if 
so, please identify the relevant research and discuss why you do or do 
not find such research compelling?

    Answer. As best as I recall, my recent work on inheritance, 
estates, and bequests has generally focused on disparities within the 
U.S. in income, wealth, inheritances, and intergenerational mobility, 
and on how the U.S. compares along these dimensions to other high-
income countries, not on time trends. That said, I am always interested 
in seeing new data.

    Question. Among other things, you wrote, in a New York Times 
opinion article titled ``Tax the Rich and Their Heirs,'' about a 
hypothetical heir's inheritance, and corresponding effective tax rate. 
You identify that: ``Some will argue that this example ignores any 
income and payroll tax the wealthy parents paid when they originally 
earned the $50 million. But if the couple paid their personal chef's 
wages out of after-tax income, we wouldn't think their personal chef 
should get credit for the taxes they paid.'' Given this rather 
confusing comparison, could you provide your understanding of the 
concept and measures of wealth, the concept and measures of income, and 
what are the distinguishing features that differentiate the two 
concepts?

    Answer. In this example, I was comparing an adult who inherits $50 
million from his parents (let's call them Jack and Jane) to someone who 
works as a personal chef for Jack and Jane. Under current law, the heir 
does not owe income or payroll tax on the $50 million that he inherits, 
while the personal chef owes both income and payroll tax on his salary 
from Jack and Jane. Let's say that Jack and Jane earned all of their 
money from working and paid income and payroll taxes on all of their 
earnings. Some argue that their heir should not have to pay income or 
payroll tax on his inheritance because Jack and Jane effectively paid 
those taxes on his behalf. In other words, the heir should get credit 
for the income and payroll taxes his parents paid. I was noting that, 
under this theory, their personal chef should also get credit for the 
income and payroll taxes Jack and Jane paid and, therefore, all the 
chef's salary should be tax-exempt. But current law does not provide 
such an exemption for the personal chef.

    Question. During development of the Tax Cuts and Jobs Act, you 
appeared highly critical of the effort, including procedural aspects of 
legislating an outcome, up to and including criteria to allow 
provisions to be passed in a reconciliation setting. You participated 
in producing highly speculative quantitative analyses of tax proposals 
from Republicans, sometimes before they were even produced in detailed 
enough form to perform quantitative analysis. What was your objective 
in providing premature, speculative quantitative analyses of proposals 
that did not yet even exist, but could be portrayed in partisan 
fashion?

    Answer. In my quantitative work I try to clearly state my 
assumptions and, where there is a partisan valence, adopt assumptions 
that are the least favorable to whatever point I am making, even if 
such assumptions may be less accurate. It seems like you may be 
referring to my work estimating the effects of President Trump's 
childcare proposals. In that work, we detailed our assumptions 
throughout, noting how the assumptions underlying our estimates 
probably understated the regressivity of his proposals.

    More generally, I think it can helpfully inform the complicated 
legislative process for outside groups to estimate the revenue or 
distributional effects of legislative proposals before every detail has 
been specified. For example, my recollection is that there typically is 
no legislative language for tax legislation until after it has been 
voted out of the Finance Committee because the committee engages in 
conceptual mark-ups. It would seem to be somewhat late for the public 
only to have access to preliminary estimates of tax legislation after 
it has been voted out of committee. That said, I believe strongly that 
any estimates by outside groups should be done with care, integrity, 
and transparency.

    Question. Federal Reserve notes represent lawful money, and are 
liabilities of the U.S. Federal Government. Liabilities of the U.S. 
Federal Government are overseen and managed by Treasury. The Senate 
Finance Committee is the authorizing committee for Treasury and its 
operations, and has oversight responsibility over Treasury operations 
and activities.

    The Federal Reserve is experimenting with formulating a central 
bank digital currency, which has the potential of enabling, along a 
blockchain, fiscal policy actions and would involve issuance of 
liabilities backed by the U.S. Federal Government. Given that, if 
confirmed, you would be working at the Treasury, with responsibilities 
over Federal liabilities that are authorized by Congress, and would 
likely be working on issues of financial ``stability:''

    Do you believe that a central bank digital currency can pose a 
threat to financial stability, in that such Federal liabilities, if 
held in accounts at the Federal Reserve or Treasury, would be viewed as 
safe havens in flights to safety, and away from riskier liabilities of 
firms provided in financial markets, during periods of market stress?

    Do you believe that a central bank digital currency, designed by 
the Federal Reserve, should be constructed in a way that could easily 
and rapidly allow for deployment of accounts that could have balances 
modulated in accord with business cycle developments, thereby providing 
automatic stabilizers or welfare transfers? Do you support such a 
design and construction, which will engineer a significant transfer of 
fiscal authority, upon one mere act of Congress, from Congress to the 
Federal Reserve?

    Answer. I am not familiar with these issues and their tax aspects. 
If I am fortunate enough to be confirmed, I would seek a briefing by 
the relevant Treasury staff.

    Question. As a tax expert, what definition can you provide that 
determines whether a country is a ``tax haven.'' Have you ever publicly 
characterized Switzerland or Puerto Rico as tax havens, and do you 
believe that they are according to your working definition?

    Answer. Some researchers define tax havens as jurisdictions with 
effective tax rates less than 10 percent; other researchers use metrics 
based on secrecy. I do not recall using this term myself with respect 
to those jurisdictions.

    Question. Are there any proposals or issues on which you intend to 
engage with members of this committee to achieve bipartisan results? If 
so, please describe what those issues are.

    Answer. If confirmed, I would be eager to engage with members of 
the committee to seek bipartisan agreement wherever possible.

    Question. Please describe any bipartisan accomplishments you 
participated in substantively during your service on President Obama's 
National Economic Council.

    Answer. During my previous government service, I served as former 
Chairman Baucus's Chief Tax Counsel in his work on negotiating tax 
aspects of the American Taxpayer Relief Act of 2012; Moving Ahead for 
Progress in the 21st Century Act of 2012; Middle Class Tax Relief and 
Job Creation Act of 2012; FAA Modernization and Reform Act of 2012; 
Temporary Payroll Tax Cut Continuation Act of 2011; VOW to Hire Heroes 
Bill of 2011; U.S.-Korea Free Trade Agreement of 2011; Airport and 
Airway Trust Fund Reauthorization Act of 2011; Tax Relief, Unemployment 
Insurance Reauthorization, and Job Creation Act of 2010; and Small 
Business Jobs Act of 2010. I believe all of these bills were passed on 
a bipartisan basis. I served in the Obama administration for a much 
shorter period of time during which little or no tax legislation was 
passed. However, I did facilitate policy processes that arguably helped 
lay the groundwork for the Protecting Americans from Tax Hikes Act of 
2015, which was passed on a bipartisan basis after I returned to 
teaching.

    Question. Some believe that, independent of revenue raised or lost 
because of implementation of a wealth or inheritance or estate tax, it 
is important to institute such taxes so ``billionaires'' and high-
wealth individuals do not hoard such wealth, or because inequality 
harms democracy in speculative unmeasured and conjectural ways. You 
have devoted a substantial amount of your professional activities in 
advocacy of significant increases or implementations of wealth, 
inheritance, gift taxes and the like.

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

    If so, what social problem do you intend to solve by implementing 
significantly high taxes on intergenerational transfers, what evidence 
suggests that your solutions would accomplish your objective, and is 
there overwhelming support for your normative objectives?

    If I, as a parent, wish to forgo consumption over my life cycle, 
accumulate wealth, and bequeath resources to children and grandchildren 
that I love, is there a social problem that I am generating by doing 
so? If so, please tell me what that is, or whether you believe that 
what I choose to do can be accepted by you, but only up to some limits 
that you deem appropriate?

    Answer. My work on wealth transfer taxes is focused on furthering 
the goal of everyone having a chance to succeed in the United States, 
and ensuring that we do not miss out on individuals' talents because of 
barriers to upward mobility. My understanding is that President Biden 
did not propose any changes to the estate or gift taxes in his budget.

    Question. You identified during the hearing on your nomination that 
you would like to participate in work, if confirmed, at Treasury aimed 
at increasing enforcement and tax collections at the IRS. Given your 
background in research, and what appear to be increased efforts at IRS 
to engage in normative research, you may also be interested in working 
with IRS researchers. In the May 2021 U.S. Department of the Treasury 
publication titled, ``The American Families Tax Compliance Agenda,'' 
research that includes income attribution methodology utilized by 
researchers Emmanuel Saez and Gabriel Zucman is referred to, as well 
as, research in what appears to be the Critical Tax theory branch of 
research performed principally by tax law professors.

    Are you aware of any critiques of income and wealth valuation 
methods utilized by researchers Saez and Zucman and, if so, do you 
believe the critiques have merit?

    Economist Larry Summers has characterized some of the work by Saez 
and Zucman as being ``substantially inaccurate and substantially 
misleading.'' Many economists have criticized some of their methodology 
and data manipulation as problematic, and some of their wealth 
valuation methods are enormously sensitive to perturbations in discount 
and interest rates. Do you believe that caution should be exercised in 
using income and wealth inequality measures put forward by those 
researchers in guiding fiscal policies?

    Could you describe your understanding of Critical Tax theory?

    The May 2021 Treasury publication cites the article titled ``Should 
the IRS Know Your Race? The Challenge of Colorblind Tax Data.'' Do you 
believe that the IRS should require that racial identification should 
be part of filed tax returns? Please explain why or why not.

    Do you support consideration at the IRS of urging legislation to 
provide increased disclosure of taxpayers' private information for 
research purposes?

    Do you believe that research at the IRS should allow for partisan 
policy positions to play a role?

    Answer. I am aware of a spirited debate among economists about the 
best way to measure wealth and accrued gains on wealth. It is a 
complicated issue and unfortunately, we do not have good data on wealth 
in the U.S. This means that all estimates of the wealth distribution 
are necessarily imperfect, and thoughtful, nonpartisan research can 
produce different estimates. In my view, each of the various 
methodological approaches have pros and cons. I have not written about 
critical tax theory and would need to research the various definitions 
to determine which I thought was the most accurate.

    I support understanding more about the effects of tax provisions 
and proposals along many dimensions. If confirmed, I am committed to 
working with Treasury, and with the administration as a whole, to 
better understand these impacts, including on disadvantaged groups. The 
use of identifying information on tax returns is a complicated issue. 
If confirmed, I would look forward to being briefed on these issues, 
including on the use of IRS data for research. I believe it is vitally 
important to make sure that such research protects taxpayer privacy. 
The IRS is a nonpartisan organization and its research is not conducted 
by political appointees. I believe it is important for its research to 
remain nonpartisan.

    Question. During your hearing it was suggested that the TCJA 
changes to international taxation amounted to ``[giving] away the 
store,'' the implication being that the TCJA changes in this area were 
a tax cut that amounted to an unfair ``giveaway'' to the international 
operations of taxpaying businesses. It seemed in your response that you 
agreed with the characterization. Can you clarify: were the TCJA 
changes to international taxation a ``giveaway'' tax cut and, if so, 
how? I ask because according to the revenue estimates prepared by the 
JCT, the TCJA's international tax changes were not a tax cut at all, 
but a $324-billion tax increase.

    Answer. I do not recall referring to the TCJA changes to 
international taxation as a giveaway. That said, my understanding is 
that JCT estimated that the TCJA international provisions resulted in a 
slight revenue loss if one excludes the repatriation provision. While 
the repatriation provision raised revenue within the budget window, it 
presumably lost revenue on net over a longer period of time. This is 
because it was a tax cut relative to prior law, which would have taxed 
foreign earnings at the full U.S. rate (then 35 percent) less foreign 
tax credits when repatriated, rather than at the TCJA repatriation rate 
of 8 percent or 15.5 percent.

    Question. Do you consider it to be an unfair ``loophole'' for a 
taxpayer to pay a lower rate on their capital gains than on their 
ordinary income? If so, would it not be more appropriate to require all 
capital gains to be paid at the taxpayer's ordinary rates, rather than 
the President's current proposal, which would continue to allow a 
taxpayer earning $900,000 to benefit from what you consider to be an 
unfair loophole?

    Answer. The current tax code contains many provisions that favor 
income from wealth over income from work. The Biden administration's 
tax proposals aim to shift some of the current priorities and 
incentives in the tax code so that we recognize and reward the value of 
work as much as we do income from wealth. If confirmed, I look forward 
to working with Congress to implement a system that provides 
appropriate incentives for investment but does not do so at the cost of 
disfavoring workers and small businesses.

    Question. In your testimony on the President's proposal to increase 
the minimum tax rate on active foreign-source income earned by U.S. 
companies operating abroad to an ``all-in'' 26-percent rate you allude 
to various non-minimum tax regimes of foreign countries that somehow 
make them ``comparable'' to both the current U.S. GILTI regime and the 
President's proposal. Can you provide specific detail as to how the 
current law of the U.S.'s major trading partners is comparable to the 
U.S.'s with respect to minimum taxes on active foreign-source income?

    Answer. Our major trading partners with territorial tax systems 
generally have robust anti-base erosion measures in their domestic law 
to mitigate the incentive to shift profits offshore that can be created 
by such systems. My understanding is that these anti-base erosion 
measures generally take the form of ``controlled foreign corporation'' 
(CFC) rules and limitations on interest deductions (earnings stripping 
rules). Certain jurisdictions also limit or deny application of their 
territorial system (i.e., their participation exemption) to certain 
business entities or business lines. Most European Union (EU) countries 
apply their CFC rules within the EU to address shifting of profits to 
low-tax EU countries by targeting certain arrangements deemed to be 
artificial (i.e., lacking real economic activities) based on specified 
criteria.

    The criteria for determining whether CFC rules apply to a foreign 
subsidiary generally vary, with some countries applying objective 
standards (generally based on ownership), others applying more 
subjective standards (e.g., effective management, level of taxation, 
place of incorporation, etc.), and others applying a combination of 
such standards. There is also disparity in the types of income that is 
subject to various CFC rules. According to an April 2019 report by the 
Tax Foundation, among the OECD countries with CFC rules, approximately 
half tax solely passive income and the other half tax both passive and 
active income.\9\
---------------------------------------------------------------------------
    \9\ Bunn et al., ``Anti-Base Erosion Provisions and Territorial Tax 
Systems in OECD Countries,'' Tax Foundation (April 2019).

    Given how complex and multi-faceted anti-base-erosion regimes are, 
it is difficult to make judgements about which countries' regimes are 
more or less onerous, even without considering the impact of taxpayer 
planning. Additional background on the similarities between our 
provisions for taxing foreign earnings of our resident companies and 
the provisions of our major trading partner can be found at Altshuler 
et al., ``Lessons the United States Can Learn From Other Countries' 
Territorial Systems for Taxing Income of Multinational Corporations,'' 
Tax Policy Center (2014) and Joint Committee on Taxation, ``Background 
and Selected Issues Related to the U.S. International Tax System and 
---------------------------------------------------------------------------
Systems That Exempt Foreign Business Income,'' JCX-33-11 (2011).

    Question. In your testimony you indicated that an appropriate 
``balance'' must be struck between the tax code's ``marriage bonus'' 
and ``marriage penalty.'' Can you elaborate specifically on how the 
President's proposal to increase taxes on a married couple with a 
combined income of $509,300 but not an unmarried couple with a combined 
income of $905,398 strikes this balance ``in the best possible way''?

    Answer. Under what is sometimes called the marriage taxation 
``trilemma,'' an income tax cannot simultaneously have progressive 
marginal tax rates, tax all married couples with identical combined 
incomes the same, and tax couples the same regardless of whether they 
are married or unmarried. Current law creates a complicated pattern of 
marriage penalties and bonuses. My understanding is that President 
Biden's proposals tend to preserve this pattern. In my view, the best 
balance between marriage penalties and marriage bonuses is a 
complicated issue on which reasonable people can disagree. If I am 
fortunate enough to be confirmed, I would look forward to working with 
Congress to identify the best balance for the situation you described.

    Question. As you know, the Child Tax Credit (CTC)--which was a 
Republican-led proposal and which I voted for all those years ago--was 
intended to operate as a family support provision in order to somewhat 
ameliorate a working family's inability to pay taxes as their family 
size increased. Further, save for the changes enacted in the American 
Rescue Plan, all successful efforts to expand the CTC since then have 
continued to ground the provision in supporting working families. In 
your testimony, you applaud the recent expansions of the CTC as being a 
powerful new anti-poverty tool. This is confusing to me, particularly 
given your subsequent acknowledgment of the various recent expansions 
of the earned income tax credit (EITC) and their powerful anti-poverty 
role (which was, as you know, the intent of the provision). Is the CTC, 
which was never intended to operate as an anti-poverty provision, and 
which clearly lacks the targeting of the EITC, the most appropriate 
mechanism to address child poverty--particularly when we still have 
(and have continued to expand) the EITC?

    Answer. I believe that child poverty is a serious national 
challenge that we should continually strive to address. Both the EITC 
and CTC have long served to lessen child poverty, in part because both 
are fully or partially refundable. Prior to the American Rescue Plan, 
the two provisions lifted an estimated 5.5 million children above the 
poverty line.\10\ Researchers have estimated that the American Rescue 
Plan would cut child poverty by more than 50 percent.\11\ I fully 
support President Biden's commitment to ending child poverty.
---------------------------------------------------------------------------
    \10\ Marr et al., ``Congress Should Adopt American Families Plan's 
Permanent Expansions of Child Tax Credit and EITC, Make Additional 
Provisions Permanent,'' Center on Budget and Policy Priorities (May 24, 
2021).
    \11\ Parolin et al., ``The Potential Poverty Reduction Effect of 
the American Rescue Plan,'' Center on Poverty and Social Policy at 
Columbia University (March 11, 2021).

    Question. The Tax Cuts and Jobs Act 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. As I understand it, President Biden's budget does not 
propose any changes to section 199A.

                                 ______
                                 
                 Questions Submitted by Hon. John Thune
    Question. As a follow-up to the question asked at the hearing, can 
you state with certainty that no taxpayer earning less than $400,000 
will be hit by the Biden administration's step-up in basis tax 
proposal?

    Answer. As I understand the proposal, the only taxpayers who could 
be affected are those with more than $1 million in capital gains income 
because the proposal allows an exclusion of up to $1 million of gains 
per person (indexed for inflation). The exclusion is portable between 
spouses, effectively meaning that couples would not be affected unless 
they had more than $2 million of capital gains income. Moreover, the $1 
million per-person exclusion applies in addition to the existing 
exclusion for gains on homes, which allows taxpayers to exclude up to 
$250,000 of gain on principal residences ($500,000 for couples), as 
well as the existing exclusion for qualified small business stock.

    Question. Under the Biden administration's step-up in basis 
proposal, the untaxed gains on investments held at death would be taxed 
at a top rate of 39.6 percent, above an exemption of $1 million per 
individual. There is a good chance that some parents might die with an 
estate that has gained $1 million-plus in value over the course of 
their lives, but their heir might be earning $40,000 or $50,000 a year.

    Under such a scenario, is it plausible that an heir earning less 
than $400,000 would be impacted by the administration's step-up in 
basis tax proposal?

    Answer. Please see my answer to the question above. Thank you.

    Question. Under the Biden administration's step-up in basis tax 
proposal, and depending on the heir's liquidity, could taxpayers 
potentially have to sell off some of their inherited assets to cover 
the new tax liability?

    Answer. In the Treasury Green Book description of this proposal, 
there are several measures to address this concern. For example, it 
proposes that payment of tax on the appreciation of certain family-
owned and operated businesses would not be due until the business is 
sold or ceases to be family-owned and operated. It also proposes a 15-
year fixed-rate payment plan for illiquid appreciated assets.

                                 ______
                                 
                Questions Submitted by Hon. Rob Portman
    Question. At the hearing, we discussed the status of the Global 
Intangible Low-Taxed Income (``GILTI'') as a unique American tax policy 
compared to our major trading partners. Under GILTI, U.S.-based 
businesses are taxed on their outbound active business income. You 
differed in that characterization of GILTI, stating: (1) ``While I 
agree that no other country has a minimum tax exactly like ours, they 
do have many provisions in place designed to limit the ability to shift 
profits to low-tax jurisdictions by companies resident in their 
countries that I think are analogous to GILTI''; (2) ``Many deny 
participation exceptions for certain foreign countries or lines of 
business''; and (3) ``Partially tax foreign earnings of their companies 
across the board.''

    Since GILTI only applies to U.S.-based businesses, policymakers 
should have a common understanding of what the rest of the playing 
field is among America's trading partners. That's why I asked the 
question and that's why I'm following up on it. I'd like you to provide 
more detail on your responses.

    Please list those countries, which are major trading partners of 
the U.S., with provisions analogous to GILTI that apply to active 
business income, rather than passive income (which has long been 
subject to tax under the U.S. subpart F rules). Please explain how 
those provisions are similar to GILTI in their application to active 
business income, such as foreign manufacturing income. Where 
applicable, please explain whether any such rules do not apply among EU 
members because the EU fundamental freedoms prevent one EU country from 
applying its controlled foreign corporation (``CFC'') rules (or 
analogous regimes) to foreign branches or subsidiaries located in 
another EU country--whether active income or passive income--unless the 
income is earned in an artificial arrangement. Please explain the 
practical effect of these and other limitations (such as treaty 
exceptions) to any foreign country's CFC rules in evaluating whether 
they are truly analogous to the breadth and scope of GILTI. And please 
provide a specific list of countries with CFC regimes that you consider 
more onerous than GILTI, and a general description of how those regimes 
operate.

    Answer. Our major trading partners with territorial tax systems 
generally have robust anti-base erosion measures in their domestic law 
to mitigate the incentive to shift profits offshore that can be created 
by such systems. My understanding is that these anti-base erosion 
measures generally take the form of ``controlled foreign corporation'' 
(CFC) rules and limitations on interest deductions (earnings stripping 
rules). Certain jurisdictions also limit or deny application of their 
territorial system (i.e., their participation exemption) to certain 
business entities or business lines. Most European Union (EU) countries 
apply their CFC rules within the EU to address shifting of profits to 
low-tax EU countries by targeting certain arrangement deemed to be 
artificial (i.e., lacking real economic activities) based on specified 
criteria.

    The criteria for determining whether CFC rules apply to a foreign 
subsidiary generally varies, with some countries applying objective 
standards (generally based on ownership), others applying more 
subjective standards (e.g., effective management, level of taxation, 
place of incorporation, etc.), and others apply a combination of such 
standards. There is also disparity in the types of income that is 
subject to various CFC rules. According to an April 2019 report by the 
Tax Foundation, among the OECD countries with CFC rules, approximately 
half tax solely passive income and the other half tax both passive and 
active income.\12\
---------------------------------------------------------------------------
    \12\ Bunn et al., Anti-Base Erosion Provisions and Territorial Tax 
Systems in OECD Countries, Tax Foundation (April 2019).

    Given how complex and multi-faceted anti-base-erosion regimes are, 
it is difficult to make judgements about which countries' regimes are 
more or less onerous, even without considering the impact of taxpayer 
planning. Additional background on the similarities between our 
provisions for taxing foreign earnings of our resident companies and 
the provisions of our major trading partners can be found at Altshuler 
et al., Lessons the United States Can Learn From Other Countries' 
Territorial Systems for Taxing Income of Multinational Corporations, 
Tax Policy Center (2014) and Joint Committee on Taxation, Background 
and Selected Issues Related to the U.S. International Tax System and 
---------------------------------------------------------------------------
Systems That Exempt Foreign Business Income, JCX-33-11 (2011).

    My understanding is that the President's proposal to replace the 
section 59A Base Erosion and Anti-Abuse Tax (BEAT) with the Stop 
Harmful Inversions and Low- Tax Developments (SHIELD) would provide a 
strong incentive for our major trading partners to change their CFC 
rules to more closely align with our reformed GILTI regime.

    Question. As we negotiate with the Organisation for Economic Co-
operation and Development (``OECD''), the administration has taken the 
position that we should encourage our OECD counterparts to increase 
their corporate tax rates. However, we've been less than successful at 
having our counterparts live up to their word. For instance, as part of 
an effort to resolve a trade dispute, the U.S. negotiated changes to 
the Domestic International Sales Corporation (DISC) provision of the 
Code, which provided a tax exemption for certain export related trade 
income. In return, the Europeans agreed to change their border 
adjustment regimes to eliminate the export subsidies they conferred. 
Despite their ``agreement,'' and after Congress had legislated the 
agreed to changes in the form of the Foreign Sales Corporation (FSC), 
our EU partners reneged on their commitment and mounted a World Trade 
Organization challenge to the FSC.

    In fact, the EU has complained bitterly about the 
``extraterritorial'' reach of our States' use of formulary 
apportionment in the early 1980s. The U.S. went through tremendous 
effort to resolve the dispute--weighing heavily on the various States 
to give up the practice. Fast forward to the past few years, we now 
have the French adopting an approach to digital taxation that mirrors 
unitary taxation.

    Why should we trust that the EU and other OECD partners will 
increase corporate tax rates simply because we ask them to?

    Answer. It is my understanding that leading economies in the EU 
have already committed to supporting a global minimum tax, in part 
because of their own domestic needs and in part because of their 
commitment to a multilateral solution to a race to the bottom in 
effective corporate tax rates. It is also my understanding that Pillar 
2 contains a mechanism such that, once a sufficient number of leading 
economies join, will incentivize other jurisdictions to adopt minimum 
taxes as well and penalize those that defect. My understanding is that 
the SHIELD proposal, which Congress could enact without a multilateral 
agreement or any action by other countries, works similarly.

    Question. How do you plan to protect U.S. companies from unfair 
taxation--such as DSTs?

    Answer. If confirmed, I look forward to being briefed by my staff 
on this and other issues. But my understanding is that Pillar 1 would 
replace discriminatory measures, such as DSTs, with a nondiscriminatory 
approach to market-based taxation. It is also my understanding that, as 
part of the Pillar 1 negotiations, Treasury has asked for the 
standstill and rollback of DSTs.

    Question. In a bipartisan way, Senators have been monitoring the 
progress of the OECD process and have 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?

    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 am committed to updating members of the 
committee on the negotiations and sharing available and relevant 
economic analyses.

    Question. If confirmed as Assistant Secretary for Tax Policy, one 
of the most important roles of the office you will lead, in my 
estimation, will be working out the details of the President's tax 
proposals and turning them into legislative proposals with accompanying 
projected revenue estimates. There have been some recent Treasury 
Department statements, including to this committee, regarding tax 
revenue that appear to be misleading. That's concerning because we rely 
on the Treasury Department as a source of unbiased information.

    I'll give you an example of one. It relates to the revenue raised 
by the Base Erosion and Anti- abuse Tax (``BEAT''). The statement has 
been made that BEAT has been ineffective based on the BEAT revenue 
table, but, of course, BEAT taxes paid are only a small part of the 
revenue raised by the BEAT, which was intended to change behavior, so 
the revenue raised by BEAT would be reflected significantly in 
corporate tax revenues, not necessarily in BEAT revenues.

    For this committee to make sound policy, we must have thorough and 
complete analysis. Can you commit that, if confirmed, you will ensure 
that the analysis the Treasury Department presents is thorough and 
complete and not misleading?

    Do you further commit to revise any prior statements of the Office 
of Tax Policy that may not have been based on complete data or were 
otherwise misleading?

    Answer. The Office of Tax Policy provides professional, high-
quality analyses and estimates that are done by its highly qualified 
career staff. If confirmed, I am committed to ensuring that their work 
continues to be done in a complete, high-quality, and professional 
manner.

    Question. The treatment of conservation easements transactions is 
an important issue to my State of Ohio, particularly in relation to 
easements for historic preservation. These easements protect iconic 
buildings in places like downtown Cleveland and Columbus from simply 
being bulldozed. This program has saved numerous historically 
significant buildings and facilitated the revitalization of entire 
neighborhoods in my State. And, it goes without saying, the issue is 
crucial to land conservation which I know is a priority of the 
President as articulated in his thirty by thirty goal. Due to the lack 
of guidance from the IRS in this area, taxpayer certainty on 
conservation easements is elusive. As the bipartisan Senate Finance 
Committee report indicated last year, it is important that Treasury and 
the IRS make clear what the rules of the road are to allow taxpayers to 
appropriately utilize this preservation tool and to protect the 
integrity of the conservation easement tax deduction, as Congress 
intended. I have asked similar questions on this topic to both 
Secretary Yellen and Deputy Secretary Adeyemo, but I know that this 
would fall more directly under your purview as Assistant Secretary of 
Tax Policy.

    If confirmed, will you commit to work with my office and 
stakeholders, to facilitate a notice and comment period, and to 
expedite clear guidance from the Office of Tax Policy and the Internal 
Revenue Service to further congressional intent?

    Answer. Should I be confirmed, I look forward to working with my 
Office of Tax Policy (OTP) colleagues to understand the status and 
priorities in the current guidance plan, and potentially resetting some 
of those priorities. I can commit to working with your office to 
understand how this issue should fit into the Treasury and OTP agenda.

    Question. The administration's proposed book minimum tax is 
dependent on the Financial Accounting Standard Board's (``FASB'') 
accounting standards for income and loss recognition. Additionally, 
under the Alternative Minimum Tax regime (pre-Tax Cuts and Jobs Act), a 
credit was available for the book minimum tax in excess of regular tax 
to mitigate the issue of timing differences between book and tax that 
would result in paying tax twice.

    Is there concern in relinquishing taxing incentives and control to 
the FASB?

    How would the proposal address taxpayers that use accounting 
methods other than GAAP?

    In thinking about constructing a book minimum tax, how would you 
address timing differences between book and tax that would result in 
paying tax twice?

    Answer. I have not been privy to discussions within Treasury, 
including about proposals in the Green Book. If confirmed, I would look 
forward to being briefed by the Office of Tax Policy staff on the 
details of this proposal and its likely effects. Regarding your third 
question, the Green Book States that under the proposal ``taxpayers 
would be allowed to claim a book tax credit (generated by a positive 
book tax liability) against regular tax in future years but this credit 
could not reduce tax liability below book tentative minimum tax in that 
year.''

    Question. The proposed Stopping Harmful Inversions and Ending Low-
Tax Developments (``SHIELD'') rule would look to the effective tax rate 
of the foreign payee (determined on a jurisdiction by jurisdiction 
basis), and if the rate were below a specified level, then the 
deduction would be denied for a U.S. corporation or U.S. branch for 
Federal income tax purposes. Payments made directly to a low-taxed 
jurisdiction would be subject to the SHIELD as follows: payments giving 
rise to deductions would be denied in their entirety, while payments 
for costs of goods sold (``COGS'') and third party payments would be 
``disallowed up to the amount of the payment.''

    Treasury recently released its General Explanations of the 
administration's Revenue Proposals (referred to as ``the Green Book''). 
With respect to the SHIELD, the score for repealing section 59A and 
implementing the SHIELD would raise $309 billion. What factors account 
for the large revenue raised by the provision? Does it reflect the 
likelihood that the Inclusive Framework will not reach agreement?

    With respect to the SHIELD, please explain the interplay of the 
Sixteenth Amendment and the ability deny cost of goods sold in whole or 
in part.

    The SHIELD appears to treat some countries and companies worse than 
others are treated. Does the SHIELD override any of our current treaty 
obligations? How would the structure of the SHIELD ensure that is does 
not constitute a violation of Article 24 of our model tax treaty? 
Alternatively, would the U.S. need to amend its tax treaties to take 
into account the SHIELD?

    Answer. I have not been privy to discussions within Treasury, 
including about proposals in the Green Book. If confirmed, I would look 
forward to being briefed by the Office of Tax Policy (OTP) staff on the 
questions you raise.

    Question. The Green Book proposes a GILTI rate of 21 percent. 
However, I understand Secretary Yellen offered a 15-percent rate for 
Pillar 2 of the ongoing OECD negotiations.

    What would you propose to ensure that U.S. companies are not 
unfairly disadvantaged with this higher rate? Or would you propose a 
15-percent rate for GILTI should the OECD consensus result in a 15-
percent rate?

    Answer. It is my understanding that the administration's GILTI 
reform proposal in the President's Budget, paired with the 
administration's multilateral Pillar 2 proposal, is meant to improve 
American competitiveness by reducing the differential between the GILTI 
minimum tax rate, which applies to the foreign earnings of U.S.-
resident multinationals, and the rate applicable to the foreign 
earnings of multinationals resident in other countries with weak anti-
base-erosion regimes. Right now, that differential is quite large. The 
GILTI rate is at least 10.5 percent to 13.125 percent, while the rate 
on multinationals resident in countries with very weak anti-base-
erosion measures is effectively zero. The President's GILTI and 
multilateral proposals would narrow this differential substantially. 
Moreover, other proposals in the President's budget would further 
strengthen U.S. competitiveness, including his anti-inversion proposals 
and the SHIELD proposal, which would incentivize other jurisdictions to 
adopt strong minimum taxes and could be enacted by Congress without any 
multilateral agreement. Even so, many believe there are many non-tax 
reasons why a company would want to be resident in the U.S. and that 
there is thus room for some divergence between our tax system and that 
of other countries.

    Question. Why should the U.S. move first on changes to GILTI when 
it will likely take several years for the Inclusive Framework countries 
to reach consensus and implement legislation and treaty changes?

    Answer. As alluded to in my answer to the question above, 
strengthening GILTI would improve U.S. competitiveness by eliminating 
current law incentives to book profits in foreign jurisdictions 
(whether higher- or lower-taxed) instead of in the U.S. Additionally, 
these changes can raise substantial revenue which can be used to make 
infrastructure and other investments to further improve U.S. 
competitiveness. The President's anti-inversion proposals would 
backstop these changes and the SHEILD proposals would create strong 
incentives for other countries to adopt robust minimum taxes, thus 
ensuring our tax system is competitive. All of these proposals can be 
enacted by Congress without a multilateral agreement being reached or 
implemented.

    Question. Do the proposed changes in the Inclusive Framework 
require legislative changes? Do the proposed changes also require 
modifying U.S. treaties or the adoption of a multilateral instrument?

    Answer. It is my understanding that Pillar 1 would require a 
multilateral treaty, but I look forward to being briefed further on 
this if confirmed.

                                 ______
                                 
               Questions Submitted by Hon. James Lankford
                                  oecd
    Question. The U.S. was the first to enact a global minimum tax when 
Congress enacted the GILTI as part of the Tax Cuts and Jobs Act. No 
other country currently has a global minimum tax. In fact the GILTI is 
harsher in many aspects than the Pillar 2 minimum tax under 
consideration at the OECD. Yet, the Biden administration is proposing 
raising the GILTI rate even higher--to 21 percent--while our 
international counterparts have yet to enact any minimum tax.

    Do you believe that the U.S. should increase rates on its own 
companies, by doubling the GILTI rate and moving a second time, before 
our international counterparts and competitors have yet to enact their 
own minimum taxes?

    Answer. Strengthening GILTI would improve U.S. competitiveness by 
eliminating current law incentives to book profits in foreign 
jurisdictions (whether higher- or lower-taxed) instead of in the U.S. 
Additionally, these changes can raise substantial revenue which can be 
used to make infrastructure and other investments to further improve 
U.S. competitiveness. The President's anti-inversion proposals would 
backstop these changes and the SHEILD proposals would create strong 
incentives for other countries to adopt robust minimum taxes, thus 
ensuring our tax system is competitive. All of these proposals can be 
enacted by Congress without a multilateral agreement being reached or 
implemented.

    Question. There's been bipartisan support on the Hill for the OECD 
negotiations--a primary driver of that support stems from bipartisan 
opposition to digital services taxes (DSTs), many of which discriminate 
against US companies. However, we know--and even heard again a few 
weeks ago--that the EU will move forward with plans to enact a digital 
levy this summer even with an agreement at the OECD.

    Can you commit to ensuring that any OECD agreement will require 
elimination of other countries' DSTs and similar discriminatory 
unilateral measures?

    Answer. It is my understanding that Pillar 1 would replace 
discriminatory measures, such as DSTs, with a nondiscriminatory 
approach to market-based taxation. It is also my understanding that, as 
part of Pillar 1, Treasury has asked for the standstill and rollback of 
DSTs and other similar unilateral measures. But I look forward to being 
briefed on these issues, including the status of the EU digital levy.

    Question. A final agreement reached at the OECD will require 
Congress to ratify a multilateral treaty and enact implementing 
legislation. Given the aggressive timeline being suggested for an OECD 
agreement, it will be increasingly important for Congress to be closely 
engaged with the OECD process, as approval of a treaty will require 
bipartisan support.

    As negotiations continue, will you not only commit to keeping the 
tax-writing committees apprised of negotiations and developments, but 
also commit to providing meaningful opportunities for our input to 
shape these negotiations--to ensure that promises are not made at the 
OECD that might not have bipartisan support?

    Answer. If confirmed, I am committed to keeping Congress closely 
apprised of the OECD process and its developments, and to listening to 
congressional input on the negotiations.

    Question. I am concerned about recent comments from Pascal Saint-
Amans that indicate that the OECD may consider carve-outs on Pillar 2 
to address China's concerns. Even if there is an agreement on a global 
rate, if foreign competitors are not subject to the same tax base for 
Pillar 2, U.S. companies will be at a significant competitive 
disadvantage.

    Do you agree that no agreement should be reached on Pillar 2 where 
the U.S.'s biggest competitors, like China, are not subject to the same 
terms as the United States?

    Answer. It is my understanding that part of the goal of Pillar 2 is 
to create a level playing field for the U.S. relative to our economic 
competitors. With that goal in mind, I look forward to being briefed on 
this issue.
                     effective corporate tax rates
    Question. We've repeatedly heard from Secretary Yellen that the 
proposed changes to the U.S.'s corporate and international tax laws are 
intended to stop a global ``race to the bottom'' on corporate tax 
rates. However, comparing statutory (Federal and State) corporate 
income tax rates of the U.S. and the OECD average excluding the U.S. 
shows that the OECD rate has been relatively steady since 2008, 
hovering between roughly 23 percent and 25 percent. However, it is 
clear that the U.S. rate at that time, 38.9 percent until 2017, was 
clearly out of sync with the rest of the developed world, including 
some of our top competitors. Given this data, the modification to the 
corporate rate in 2017 doesn't appear to be a ``race to the bottom'' by 
the U.S. at all--instead, it was bringing the U.S. closer in line with 
other OECD countries so that our companies could compete, while also 
broadening the tax base and encouraging companies to bring their income 
back to the U.S. Further, since that time, we haven't seen plunging 
rates at the OECD, as Secretary Yellen's commentary suggests.

    Do you believe that we're experiencing a ``race to the bottom'' on 
global tax rates? If so, what evidence are you relying on to make this 
claim?

    Answer. My understanding of OECD data is that it finds that in 
1985, the average statutory tax rate among OECD countries was 43 
percent; by 2000, it was 30 percent, and in 2020, 22 percent.
                           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?

    As you may know, earlier this year, Senator Coons and I, as well as 
several other colleagues, a few of which also sit on the Finance 
Committee, introduced the Universal Giving Pandemic Response and 
Recovery Act, which would expand and extend the charitable deduction 
for non-itemizers that is currently in the code.

    Will you commit to working with my colleagues and I to expand the 
charitable deduction for individuals that do not itemize on their 
taxes?

    Answer. I share your concern about promoting charitable giving, and 
agree that tax incentives can affect behavior, including charitable 
giving. If confirmed, I would look forward to working with Congress to 
find the most cost-effective ways to encourage charitable giving.
                                 energy
    Question. President Biden and congressional Democratic leadership 
have made it clear that they intend to phase out domestic conventional 
energy production. With that will go high-paying jobs back in Oklahoma. 
In addition, this position threatens our overall diversity of fuels and 
energy independence, making us vulnerable to instabilities, technology 
failures, significant weather events, and things of the like.

    If these jobs are already at risk of being eliminated, and 
effective tax rates on companies are further increased, how do you 
expect these employers will make up the job loss?

    How will the proposed changes to our domestic corporate and 
international tax laws impact our domestic energy producers' ability to 
compete with foreign-owned energy businesses?

    Answer. The Biden administration is strongly committed to American 
job creation, and the American Jobs Plan put that goal first and 
foremost. Investments in clean energy, housing, infrastructure, and 
research would provide a strong incentive for high-quality American 
jobs. The domestic corporate and international tax proposals would 
further this goal by funding such investments, and by reducing 
incentives to move profits and jobs offshore.

    Question. Our energy security has changed vastly in the last few 
decades. Fifty years ago, energy supply disruptions in other parts of 
the world had the power to lead to the contraction of our economy and 
disrupt the everyday lives of Americans. Due to aggressive action to 
discover and develop resources at home, global supply shocks no longer 
pose the crisis-level risk they once did. We cannot take this for 
granted, but need to put policies in place that allow domestic 
production to continue to serve as a stabilizing force for our economy.

    Do you believe maintaining energy independence should be a central 
goal of the Treasury Department?

    Answer. I believe all Americans should have access to safe, secure, 
and affordable energy, now and into the future. If confirmed, I am 
committed to working towards that goal.

                                 ______
                                 
                 Questions Submitted by Hon. Todd Young
    Question. Despite the Biden administration's commitment not to 
raise taxes on the middle class, the Democrats' so-called COVID relief 
package--passed this March with zero Republican votes-- prohibits 
States from lowering tax rates over the next 4 years if such State 
accepted COVID relief funding. The Treasury Department has since 
announced that States will have to justify any tax cut by demonstrating 
such cut was offset by other revenues.

    The State of California, which is set to receive more than $27 
billion in this latest COVID relief package, recently announced a 
budget surplus of up to $76 billion, and expects to be providing 
certain families with rebates of up to $600.

    Do you believe there is a meaningful significance between a tax 
decrease and a tax rebate?

    If confirmed, do you commit to examining whether California's 
rebate proposal, if enacted, violates the Democrats' ``no tax cut'' 
rule?

    Answer. I understand there are interactions between the Federal 
programs enacted under the American Rescue Plan and State policies 
being put in place because of COVID-19. If confirmed, I would look 
forward to being briefed on the implementation of these programs and 
their interactions with the tax system.

    Question. President Biden has repeatedly and consistently affirmed 
that he will not raise taxes on the middle class, particularly those 
making under $400,000 per year. However, I am concerned about many of 
President Biden's proposals that will indirectly harm the middle class, 
including his proposal to return America's corporate tax rates to one 
of the highest among OECD member nations. Countless studies have shown 
that workers bear the brunt of corporate tax hikes. Nonpartisan 
research from the Congressional Budget Office has indicated that up to 
70 percent of the burden from corporate tax hikes are borne by labor in 
the form of reduced wage growth or by the consumer from higher prices, 
while the middle class is further hit by the remaining burden on 
capital through a weakened 401(k).

    While there is some disagreement on the exact proportion, even the 
most liberal models suggest that labor shares no less than a quarter of 
the burden, with most empirical research suggesting that the split is 
at least 50-50. In either case, economists agree that labor bears a 
substantial share of the corporate tax incidence and should be taken 
into account when analyzing the economic impact of a tax hike.

    What portion of the corporate tax rate do you believe is borne by 
workers? Do you agree that there is a contradiction between the 
President's pledge to protect middle-class taxpayers from an increased 
tax bill while at the same time supporting burdensome and inflationary 
policies that reduce opportunities and raise the cost of living?

    Answer. The incidence of the corporate tax is a heavily debated 
topic within economics, but the nonpartisan, career economists at JCT 
and Treasury assign the vast majority of the burden to the owners of 
capital.\13\ I would tend to defer to their judgement.
---------------------------------------------------------------------------
    \13\ Joint Committee on Taxation, Modeling the Distribution of 
Taxes on Business Income, JCX-14-13 (2013); Cronin et al., 2012). 
Cronin et al, Distributing the Corporate Income Tax: Revised U.S. 
Treasury Methodology, OTA Technical Paper No. 5 (U.S. Department of the 
Treasury, Office of Tax Analysis, 2012).

    These models also assume that the deficits created by corporate tax 
cuts will be offset sometime in the future, but do not account for the 
potential costs of those offsets for typical workers. It is worth 
noting that other tax options (such as labor income taxes and payroll 
---------------------------------------------------------------------------
taxes) are estimated to fall almost entirely on labor.

    Question. Since 1954, companies of all sizes, all along the supply 
chain and in major sectors from aerospace to electronics, from 
automobiles to pharmaceuticals and from manufacturing to information 
technology, have been able to deduct research and development (R&D) 
expenses in the year in which they are incurred. Starting in 2022, 
however, companies will be required to amortize or deduct these 
expenses over a number of years under I.R.C. section 174. Doing so 
would reduce the after-tax cash flow for R&D activities and drive down 
the rate of return on R&D investment. I am concerned that private 
sector R&D will become more expensive resulting in harmful outcomes if 
section 174 is allowed to go into effect in 2022.

    President Biden's Fiscal Year 2022 budget recognizes the importance 
of R&D to America. The budget states: the United States is falling 
behind its biggest competitors in R&D (p. 9); R&D innovation creates 
thousands of good-paying jobs (p. 10); R&D is key to developing clean 
energy technology (p. 22); the administration supports historic 
increases in R&D spending across numerous Federal agencies (p. 16); the 
technology of the future will be created in America by American 
businesses using American workers (p. 29); and the administration vows 
to reestablish the United States as a global leader in R&D (p. 17).

    Yet nowhere in the President's Fiscal Year 2022 budget is repeal of 
section 174 listed as an administration priority. Similarly, the 
General Explanations of the administration's Fiscal Year 2022 revenue 
proposals (the ``Green Book'') contains no mention of section 174. I 
believe that a key variable in securing America's leadership in 
emerging technologies is reinstatement of the immediate deductibility 
of R&D expenses, as has been the case for the last 67 years. Senator 
Hassan and I have introduced S. 749, the American Innovation and Jobs 
Act, to repeal section 174. A similar bipartisan bill was introduced in 
the House by Congressmen Larson and Estes, H.R. 1304, the American 
Innovation and R&D Competitiveness Act of 2021.

    I would appreciate your views on whether you agree that repeal of 
section 174 should occur before it goes into effect in 2022 and whether 
the Department of the Treasury actively supports 174 repeal.

    Answer. The President's budget proposes repealing the Foreign-
Derived Intangible Income deduction (FDII) and dedicating the revenue 
raised from FDII repeal to increase incentives for R&D. If confirmed, I 
would look forward to learning more about the most cost-effective ways 
to encourage R&D, including from you and your staff, and working with 
Congress on designing this proposal.

                                 ______
                                 
             Follow-Up Questions Submitted for the Record 
                      to Lily Lawrence Batchelder
            Follow-Up Questions Submitted by Hon. Mike Crapo
    Question. There have been repeated references made by the 
administration to individual taxpayers and corporations paying ``their 
fair share.'' For example, an April Treasury document describing the 
Made in America Tax Plan often refers to fair share. From Treasury's 
document, however, it appears that the plan envisions enactment of 
proposals that would merely move the country ``Toward a Fairer Tax 
System.''

    As a prospective adviser to the administration on tax policy, 
please define what constitutes a ``fair share'' and the appropriate 
measure to use to determine whether or not an individual is paying 
their fair share.

    Follow-up: Your response did not provide your definition of what 
constitutes a fair share or what you take to be an appropriate measure.

    Answer. There are a number of different measures that I think can 
be helpful in assessing tax fairness. One measure is the concept of 
horizontal equity, which compares tax burdens borne by taxpayers in 
similar circumstances. Another is the concept of vertical equity, which 
considers whether taxpayers who are better off owe an appropriate level 
of tax compared to those who are less well off. Better or worse off can 
be assessed along multiple dimensions, including income, number of 
dependents, health status, etc. The concept of fair share can also 
depend on macroeconomic circumstances, because the appropriate measure 
of a tax code's fairness may depend on key economic indicators such as 
the labor and capital share, and the share of corporate profits that 
represent supranormal returns. In addition, the concept of ``fair 
share'' can relate to the gap between taxes owed and actually paid, 
with individuals who evade taxes defined as individuals who do not pay 
their fair share. In important ways, we currently have a tax system 
where some individuals do not pay their fair share.

    Follow-up: You did not directly respond to the questions below.

    Answer. See answers below.

    Question. Given your definition and measure, for tax year 2021, 
what is the fair share for a single filer on taxable income: up to 
$9.950; $9,951 to $40,525, $40,526 to $86,375, $86,376 to $164,925, 
$164,926 to $523,600, over $523,600?

    Answer. This would depend on the context of the tax or taxes that 
apply to such individuals and the specific circumstances of single 
filers within these income ranges.

    Question. Please define what constitutes a ``fair share'' and the 
appropriate measure to use to determine whether or not a corporation is 
paying its fair share.

    Answer. This would depend on the context of the tax or taxes that 
apply to the corporation and the corporation's specific circumstances.

    Question. Why do you believe that the Made in America Tax Plan 
proposes only to move ``toward'' a ``fairer'' tax system, thereby 
foregoing movement to a fully fair system and leaving fairness gains 
unfulfilled to remain on the table for future tax policy modifications?

    Answer. I can only speculate because I am not currently in the 
administration but there are many possibilities. For example, there are 
so many differences between individual taxpayers that it is probably 
not possible to adjust for every single dimension of difference, even 
if doing so might be ideal from a fairness perspective. More generally, 
there are often trade-offs between fairness, efficiency, and 
simplicity.

    Question. The Made in America Tax Plan, outlined by Treasury in an 
April 2021 document, identifies a proposal of ``replacing fossil fuel 
subsidies with incentives for clean energy production.'' The plan 
proposes to ``remove subsidies for fossil fuel companies.''

    Please identify your understanding of what subsidies the plan would 
remove, and how they differ from like ``subsidies'' in place for other 
companies performing similar activities but not involving ``fossil 
fuels.''

    If enacted, do you believe that the plan would lead to higher gas 
prices at the pump in the near term, defined as the period 2022-2024?

    If so, would you have any concern that such an effect would have 
disproportionate adverse effects on low- to middle-income workers whose 
expenditures on ``fossil fuel'' related consumables such as gasoline 
and heating fuel tend to be higher shares of their incomes than for 
upper earners?

    Follow-up: Your response identified that you ``have not been privy 
to discussions within Treasury. Thus, my understanding of Treasury's 
Green Book proposals is identical to what was published in the Green 
Book.'' Some of your responses to questions asked by other Finance 
Committee members concerning proposals in the Green Book seem, 
incongruently, to provide your interpretation or understanding of what 
was published in the Green Book, including your impression of the goal 
of certain provisions and whether they would be successful at 
accomplishing those goals. Nonetheless, and independent of whether you 
have been privy to discussions within Treasury, you did not respond to 
the first question.

    Answer. While I have not been privy to discussions within Treasury 
about the Green Book proposals, I have followed media stories about 
them and am familiar in some cases with proposals by members of 
Congress, prior administrations, or outside experts that appear to be 
similar. To the extent I did provide my interpretation or understanding 
of other Green Book proposals, I was doing so on this basis. In this 
case, I am not aware of media stories or press statements providing 
additional details.

    According to the Treasury Green Book, ``The proposal would repeal: 
(1) the enhanced oil recovery credit for eligible costs attributable to 
a qualified enhanced oil recovery project; (2) the credit for oil and 
gas produced from marginal wells; (3) the expensing of intangible 
drilling costs; (4) the deduction for costs paid or incurred for any 
tertiary injectant used as part of a tertiary recovery method; (5) the 
exception to passive loss limitations provided to working interests in 
oil and natural gas properties; (6) the use of percentage depletion 
with respect to oil and gas wells; (7) 2-year amortization of 
independent producers' geological and geophysical expenditures, instead 
allowing amortization over the 7-year period used by integrated oil and 
gas producers; (8) expensing of exploration and development costs; (9) 
percentage depletion for hard mineral fossil fuels; (10) capital gains 
treatment for royalties; (11) the exemption from the corporate income 
tax for publicly traded partnerships with qualifying income and gains 
from activities relating to fossil fuels; (12) the Oil Spill Liability 
Trust Fund excise tax exemption for crude oil derived from bitumen and 
kerogen-rich rock; and (13) accelerated amortization for air pollution 
control facilities. Unless otherwise specified, the proposal provisions 
would be effective for taxable years beginning after December 31, 2021. 
In the case of royalties, the proposal provision would be effective for 
amounts realized in taxable years beginning after December 31, 2021. 
The repeal of the exemption from the corporate income tax for publicly 
traded partnerships with qualifying income and gains from activities 
relating to fossil fuels would be effective for taxable years beginning 
after December 31, 2026.''

    The ways in which these subsidies differ from like subsidies in 
place for other companies performing similar activities not involving 
fossil fuels vary, and depend on what one considers to be similar 
activities. Other companies may not be eligible for a like subsidy. 
Alternatively, other companies may be eligible for a like subsidy, but 
one with a shorter or longer duration, a different structure (e.g., 
credit, permanent deduction, or deferral), a different magnitude, or a 
different eligible activity (e.g., production versus investment). 
Additionally, some tax benefits might be beneficial for activities that 
are more prominent in the fossil fuel industry (e.g., the costs of 
exploration) than in other energy industries.

    Question. You have been employed by New York University, which 
holds billions of dollars in endowment funds. Some of those funds have 
come from donations from people's wealth and estates. Your employer 
does not use all of its endowment funds to help students or 
researchers. Rather, it carries some of those funds forward, presumably 
to help ensure that resources can be made available for future students 
and researchers. That is, your employer builds dynastic wealth.

    Families in the United States wish to do the same, yet you seem to 
believe that bequest motives mainly show up as undue benefit to the 
``rich'' or ``ultra-rich.'' People wish to accumulate wealth over time, 
and they choose not to consume all the accumulation in their lifetimes 
so that future members of their family can benefit. While that seems 
like altruism to me, it apparently seems like some sort of undeserved 
dynasty building to you.

    Since New York University is building and accumulating dynastic 
wealth, from which you derive benefits, should Congress increase 
taxation of university endowments and use the proceeds to spend on what 
you and others may view as more worthy social investments?

    Follow-up: Your response boiled down to stating that your 
understanding is that President Biden has not proposed any changes to 
the taxation of endowments. The question above asks for your position.

    Answer. My focus regarding dynastic wealth has been on inheritances 
that are so extraordinarily large that the heir and their spouse--and 
potentially multiple generations of the same family--can live off the 
inheritance for the rest of their lives without ever working and still 
be far better off than most American families. I have proposed taxing 
income in the form of such extraordinarily large inheritances at rates 
that are more on par with income from working. I do not recall 
characterizing modest or even large (but not extraordinarily large) 
inheritances as dynastic wealth and have proposed exempting them from 
wealth transfer taxes.

    University endowments raise different issues from such 
extraordinarily large inheritances. Among other factors, universities 
tend to serve large numbers of people from different socioeconomic 
backgrounds, not a single family line, and (if they are nonprofits) are 
governed by an independent board with a duty to ensure that the 
university uses its resources in pursuit of its charitable mission. On 
the other hand, policies like admissions preferences for descendents of 
major donors and legacies may contribute to hereditary economic power. 
I do not have a fixed view on the appropriate tax treatment of 
university endowments. These are important issues, and I am keen to 
engage with multiple perspectives and experts on this topic.

    Question. Your writing on inheritances, estates, bequests, and the 
like is largely premised on your norms and beliefs that inequality has 
risen substantially, to the point of overall social concern, and that 
intergenerational mobility has shrunk. Are you aware of any research 
suggesting that your beliefs about inequality are overstated and, if 
so, please identify the relevant research and discuss why you do or do 
not find such research compelling?

    Follow-up: Your response appears to say that your work has focused 
on disparities within the U.S. in, among other things, income and 
wealth, and not on time trends. An important part of the question above 
is in reference to inequality, as in a within-period distribution of 
income or wealth--both static, and not time trend-related. Your answer 
is confusing and it would be concerning if you are unaware of differing 
estimates of the extent of income and wealth within-period inequality. 
Indeed, you refer to ``income and wealth inequality'' in your research 
(e.g., ``Taxing the Rich: Issues and Options''). To assist in 
attempting to learn of your knowledge, are you aware of large 
disparities across researchers in findings on measures of income and of 
wealth inequality, measured discretely and not as a time series? If so, 
what do those disparities suggest about our knowledge of income and 
wealth inequality in the U.S.?

    Answer. I am aware of disparities across researchers in measures of 
income and wealth inequality on a static basis. For example, in a tax 
colloquium that I co-teach, we have invited Gerald Auten, Gabriel 
Zucman, and Eric Zwick to present their work on these subjects, and 
they (together with their respective co-authors) arrive at different 
estimates of both the static level of income and wealth inequality, and 
how it has changed over time. Estimates of wealth inequality are 
particularly complicated because we do not have good data on the total 
magnitude of wealth in the United States, so that variable has to be 
imputed or derived from survey data. Additionally, there are complex 
methodological choices that have different impacts on researchers' the 
total amount of income or wealth, as well as its distribution. These 
are choices on which reasonable people may disagree, and the literature 
and our understanding of inequality is substantially enhanced by robust 
debate on these topics. In my view, each of the various methodological 
approaches have pros and cons. On pages 19-20 of ``Taxing the Rich: 
Issues and Options,'' my co-author and I discuss some of these pros and 
cons as they relate to the aggregate amount and distribution of wealth. 
Overall, my view is that these disparities suggest uncertainty about 
the precise levels of income and wealth inequality in the U.S. But they 
do not fundamentally challenge the conclusion that, among high-income 
countries, the U.S. has among the highest levels of income and wealth 
inequality after taxes and transfers, and one of the lowest levels of 
intergenerational economic mobility.

    Question. Among other things, you wrote, in a New York Times 
opinion article titled ``Tax the Rich and Their Heirs,'' about a 
hypothetical heir's inheritance, and corresponding effective tax rate. 
You identify that: ``Some will argue that this example ignores any 
income and payroll tax the wealthy parents paid when they originally 
earned the $50 million. But if the couple paid their personal chef's 
wages out of after-tax income, we wouldn't think their personal chef 
should get credit for the taxes they paid.'' Given this rather 
confusing comparison, could you provide your understanding of the 
concept and measures of wealth, the concept and measures of income, and 
what are the distinguishing features that differentiate the two 
concepts?

    Follow-up: It is not clear in your response what you describe as a 
``theory'' is such an object, and do you believe that your response 
adequately appreciates fundamental distinctions between stock and flow 
variables?

    Answer. There are many definitions of income, and the tax code 
includes numerous deductions and exclusions that narrow its definition 
of income in practice. Conceptually, tax experts often define income as 
personal consumption plus changes in net worth (Haig-Simons income). 
Personal consumption does not include spending for the purposes of 
earning income (e.g., buying inventory if one owns a store), but does 
include other ways an individual or household chooses to spend their 
money. Income is a flow. Under the Haig-Simons definition, if an heir 
inherits $50 million, they have $50 million of income, just as they 
would if they earn $50 million in salary or win $50 million from the 
lottery. The tax code currently provides a statutory exclusion for 
income in the form of gifts or bequests received (section 102) so that 
they are subtracted from gross income when arriving at adjusted gross 
income and taxable income.

    Question. Are there any proposals or issues on which you intend to 
engage with members of this committee to achieve bipartisan results? If 
so, please describe what those issues are.

    Follow-up: You did not respond directly to what was asked. Are 
there any proposals or issues on which you intend to engage to achieve 
bipartisan results and, if so, what are they?

    Answer. I hope to achieve bipartisan results to create a fairer, 
more efficient tax code and raise revenue to make urgent investments in 
American families and workers. Some examples of issues on which I would 
be eager to engage with members of the committee include strengthening 
our Nation's infrastructure, improving our international tax system 
including in partnership with other countries, reducing the tax gap, 
decreasing the disparities between our taxation of capital and labor, 
promoting clean energy in a technology-neutral way, improving our 
retirement savings system, and simplifying tax compliance.

    Question. You identified during the hearing on your nomination that 
you would like to participate in work, if confirmed, at Treasury aimed 
at increasing enforcement and tax collections at the IRS. Given your 
background in research, and what appear to be increased efforts at IRS 
to engage in normative research, you may also be interested in working 
with IRS researchers. In the May 2021 U.S. Department of the Treasury 
publication titled, ``The American Families Tax Compliance Agenda,'' 
research that includes income attribution methodology utilized by 
researchers Emmanuel Saez and Gabriel Zucman is referred to, as well 
as, research in what appears to be the Critical Tax theory branch of 
research performed principally by tax law professors.

    Are you aware of any critiques of income and wealth valuation 
methods utilized by researchers Saez and Zucman and, if so, do you 
believe the critiques have merit?

    Economist Larry Summers has characterized some of the work by Saez 
and Zucman as being ``substantially inaccurate and substantially 
misleading.'' Many economists have criticized some of their methodology 
and data manipulation as problematic, and some of their wealth 
valuation methods are enormously sensitive to perturbations in discount 
and interest rates. Do you believe that caution should be exercised in 
using income and wealth inequality measures put forward by those 
researchers in guiding fiscal policies?

    Follow-up: You did not directly respond to the second question 
posed above.

    Answer. As mentioned in my previous response, estimates of wealth 
inequality are particularly complicated because we do not have good 
data on the total magnitude of wealth in the U.S. so that variable has 
to be imputed or derived from survey data. But there are also 
complicated methodological choices involved in estimating how this 
total amount of income or wealth is distributed across individuals and 
households, choices on which reasonable and thoughtful researchers may 
disagree. In my view, each of the various methodological approaches, 
including those taken by Sarin and Summers and by Saez and Zucman, have 
pros and cons, and the academic debate and our understanding of these 
complicated questions has been helpfully shaped by their work, and many 
others as well. Overall, my view is that these differences in estimates 
suggest uncertainty about the precise levels of income and wealth 
inequality in the U.S. But they do not fundamentally challenge the 
conclusion that, among high-income countries, the U.S. has among the 
highest levels of income and wealth inequality after taxes and 
transfers, and one of the lowest levels of intergenerational economic 
mobility.

    Question. During your hearing it was suggested that the TCJA 
changes to international taxation amounted to ``[giving] away the 
store,'' the implication being that the TCJA changes in this area were 
a tax cut that amounted to an unfair ``giveaway'' to the international 
operations of taxpaying businesses. It seemed in your response that you 
agreed with the characterization. Can you clarify: were the TCJA 
changes to international taxation a ``giveaway'' tax cut and, if so, 
how? I ask because according to the revenue estimates prepared by the 
JCT the TCJA's international tax changes were not a tax cut at all, but 
a $324-billion tax increase.

    Follow-up: (i) For the record, my question did not state that you 
referred to the TCJA tax. Your response suggests that section 965 was a 
tax cut relative to prior law, which would have taxed foreign earnings 
at the full U.S. rate. As your response suggests, however, the revenue 
estimate for section 965 projected a revenue increase of $338.8 billion 
in the 10-year budget window, and that estimate would have taken into 
account any loss associated with profits that otherwise would have been 
subject to tax at 35 percent. Your conclusion appears to be taking the 
section 965 provision out of the context of the rest of the TJCA 
provisions. Is your presumption about revenue loss based on any 
particular analysis or based on a specific time period?

    Answer. My presumption that the repatriation provision lost revenue 
on net over time was assuming a longer time period. JCT estimated that 
the repatriation provision starts to lose revenue in 2027. In addition, 
they estimated that the international provisions as whole start losing 
revenue in 2027.\14\
---------------------------------------------------------------------------
    \14\ Joint Committee on Taxation, ``Estimated Budget Effects of the 
Conference Agreement for H.R. 1, the Tax Cuts and Jobs Act,'' JCX-67-17 
(December 18, 2017).

    Follow-up: (ii) Further, does this mean you supported maintaining 
the prior international tax system of deferral with the 35-percent rate 
applicable upon repatriation? My understanding is many companies 
permanently deferred foreign earnings to avoid taxation at the full 
U.S. rate, so it is very unclear that companies would have paid tax at 
---------------------------------------------------------------------------
35 percent, if ever, on foreign earnings.

    Answer. Overall, I believe President Biden's proposals would result 
in an international tax system that is a vast improvement over the pre-
TCJA international tax system as well as the current system.

    Question. In your testimony on the President's proposal to increase 
the minimum tax rate on active foreign-source income earned by U.S. 
companies operating abroad to an ``all-in'' 26-percent rate you allude 
to various non-minimum tax regimes of foreign countries that somehow 
make them ``comparable'' to both the current U.S. GILTI regime and the 
President's proposal. Can you provide specific detail as to how the 
current law of the U.S.'s major trading partners is comparable to the 
U.S.'s with respect to minimum taxes on active foreign-source income?

    Follow-up: Your response does not detail how certain countries' 
regimes are ``comparable'' to the U.S. GILTI regime and the President's 
proposal. Please explain whether any foreign countries impose a minimum 
tax on CFC foreign earnings.

    (i) Your response also highlights CFC regimes generally as being 
comparable to the GILTI regime, as well as earnings stripping rules. 
However, this would include the U.S. subpart F rules, which have been 
in place since the 1960s, and section 163(j). Do you believe the 
subpart F rules are ``comparable'' to the GILTI regime?

    (ii) Notwithstanding the GILTI regime, if the U.S. has anti-base 
erosion and anti-earnings stripping measures like the subpart F rules 
and section 163(j) interest limitation, does this mean the U.S. rules 
would be ``comparable'' to foreign countries' rules if the U.S. did not 
have a GILTI minimum tax regime at all?

    (iii) Your response also references CFC regimes that tax active 
earnings. As an example, France's CFC rules can cover both passive and 
active income. However, their CFC rules do not apply to subsidiaries 
within the EU, and they also do not apply to non-EU CFCs if it can be 
shown the CFC is set up for genuine business reasons. Accordingly, that 
CFC regime cannot be described as imposing a GILTI-like minimum tax as 
it provides significant exceptions that fully exempt most CFCs. Please 
explain how these CFC rules are analogous to the GILTI regime.

    Answer. I believe I referred to other countries as having anti-base 
erosion regimes analogous to the U.S. anti-base erosion regime. I think 
of analogous as meaning similar in structural effects, and comparable 
as meaning similar in magnitude as well. I am not aware of studies 
identifying the myriad dimensions of anti-base erosion regimes in place 
in the U.S. and our major trading partners and quantifying their 
effects, all while controlling for differences that may exist across 
the companies resident in each jurisdiction. As a result, I could not 
say to what extent the anti-base erosion regimes of our major trading 
partners are stronger, weaker, or comparable to ours.

    As I mentioned in my testimony, I agree that no other country has a 
minimum tax on the foreign earnings of its resident multinationals 
exactly like ours, but I do think many have provisions designed to 
limit the ability of their resident companies to shift passive income 
and certain active income to low-tax jurisdictions, including within 
the EU. The U.S. subpart F (CFC) rules apply to limited categories of 
passive income, and are subject to numerous exceptions. A major 
innovation of GILTI was to immediately apply a discounted tax rate to 
most of the active foreign income of U.S. resident multinationals. 
According to the Tax Foundation, about half of OECD countries apply 
their CFC rules to both active and passive income, so in that sense 
their CFC rules are more stringent than our subpart F rules, and more 
analogous to our GILTI regime. Although, as you mentioned, the CFC 
regimes in other countries may apply only to certain active foreign 
income, when applicable, such regimes apply their full corporate 
statutory rate to that CFC income. In contrast, GILTI applies a 
discounted statutory rate and provides an additional exemption for a 
10-
percent return on foreign tangible assets.

    Question. A book advertised on Amazon.com by Edward Kleinbard 
titled ``What's Luck Got to Do with It?: How Smarter Government Can 
Rescue the American Dream (example of advertisement is at https://
www.amazon.com/dp/0190943572
?ie=UTF8&n=133140011), provides editorial review by you and, among 
others, Emmanuel Saez and Gabriel Zucman, and Senator Wyden. Your 
review identifies you as ``NYU School of Law, U.S. Treasury Department 
Assistant Secretary for Tax Policy.'' Please explain why your editorial 
review identifies you, prior to Senate confirmation, as Treasury's 
Assistant Secretary for Tax Policy, and how long such identification 
has been in place on Amazon.

    Answer. I was not aware that Amazon had identified me in this way 
until reading this question and am dismayed that they did so. As you 
can see from the book jacket, I am not identified in this way on the 
book itself, which is the only mention of my title that I personally 
approved. I have reached out to the publisher who originally requested 
the blurb to ask them to immediately correct the webpage. They have 
apologized, are investigating how the error was introduced, and said 
they are correcting the web pages with urgency.

    Question. Following the hearing on your nomination, a publication 
(The Secret IRS Files: Trove of Never-Before-Seen Records Reveal How 
the Wealthiest Avoid Income Tax--ProPublica) by ProPublica disturbingly 
alleges that ProPublica has gained access to a ``trove'' of more than 
15 years of confidential, legally protected private taxpayer 
information originating from the IRS. The ProPublica publication used 
the data target particular taxpayers and use distorted and highly 
misleading characterizations of their ``true'' tax rates. You have 
written at least one article on ``taxing the rich'' and appear to be an 
advocate of massive increases in IRS funding directed, partly, at 
focusing on high-income individuals and gathering troves of data on 
financial flows of financial accounts of private individuals and 
business for use at the IRS.

    Do you believe that ProPublica's calculation of ``true'' tax rates 
is methodologically reasonable and sound, and would you base any policy 
prescriptions while at Treasury, if confirmed, on such a construct?

    Does the ProPublica article concern you and, if so, why?

    Do you commit, if confirmed, to refrain from discussing or 
targeting individual taxpaying individuals or businesses on the basis 
of allegations from the popular press or social media about taxes that 
they have allegedly paid?

    Answer. I am uncertain what portion of my article on ``Taxing the 
Rich'' you are referring to. The main reference to IRS funding and 
information reporting proposals is in an analytic section discussing 
the challenges associated with wealth tax proposals (p. 25). I am in 
strong support of President Biden's proposals to reduce the tax gap.

    There are multiple ways to calculate tax rates, and I find that it 
is useful to consider different tax rates depending on the context. For 
example, marginal tax rates (the additional taxes due when $1 of 
additional income is earned) can be helpful for understanding the 
incentives created by the tax system. Implicit marginal tax rates (the 
additional taxes due or direct spending benefits lost when $1 of 
additional income is earned) can be helpful for understanding the 
incentives created by the fiscal system as a whole. Average tax rates 
(taxes due divided by total income) can be helpful for understanding 
the overall burden on taxpayers and how it is distributed. Effective 
marginal tax rates on corporations (the marginal tax rate on ``normal'' 
returns and not rents) and book tax rates (book tax liability dividend 
by book income) can be helpful for understanding incentives for 
businesses. Each of these different tax rates can be calculated in 
different ways. For example, the denominator used to calculate the 
average tax rate can be adjusted gross income as defined by the 
Internal Revenue Code, it can be something closer to gross income as 
defined in the Internal Revenue Code, or it can be something closer to 
Haig-Simons income. Outside groups use still other definitions. As I 
read the ProPublica article, it appears to be defining the ``true tax 
rate'' as the average tax rate using a denominator of something akin to 
Haig-Simons income. As with all of these tax rates discussed, I think 
that can provide helpful information in certain contexts.

    I am deeply concerned about the release of confidential taxpayer 
information. Absent an explicit statutory exception, doing so is a 
felony under sections 6103 and 7213 of the Internal Revenue Code. Based 
on press reports, it appears to be unclear who obtained and released 
the information in the ProPublica article and whether they were 
associated with the IRS in any way. I fully support the investigations 
of this matter that have been called for by the Treasury Secretary.

    If confirmed, my understanding is that I would not have access to 
confidential taxpayer information for individuals and businesses. In 
addition, my default position would be not to discuss specific 
taxpaying individuals or businesses. However, I would need to know the 
specific context to decide whether doing so was ever appropriate. For 
example, publicly traded businesses report tax information on their 
public, audited financial statements and individuals sometimes 
voluntarily release their tax returns, especially when running for high 
office. My initial instinct would be to not discuss individual or 
business taxpayers even in these cases, but I would need to know more 
about the specific context. For example, former Assistant Secretary for 
Tax Policy Mark Mazur was asked to testify at a congressional hearing 
on Apple's taxes. It would be difficult not to use a taxpayer's name in 
such a context.

                                 ______
                                 
                Prepared Statement of Hon. Mike Crapo, 
                       a U.S. Senator From Idaho
    Thank you, Chairman Wyden. Today we welcome four nominees for 
positions at the Department of the Treasury. Congratulations on your 
nominations.

    Treasury is responsible for implementing laws and congressional 
intent concerning tax, economic, fiscal, financial, and national 
security issues. Over time, the Treasury Department's responsibilities 
have expanded. With increased responsibility comes the need for 
transparency and accountability.

    Each of our nominees, if confirmed, should recognize this 
committee's oversight responsibilities to the American people regarding 
Treasury policies and activities, including activities at the IRS. So 
far this Congress, the Department has not adequately recognized the 
need to be transparent and accountable to this committee. Today, I am 
interested in learning more about policy positions and advocacy of our 
nominees.

    I expect to learn even more from what need to be robust, complete 
and detailed responses to questions for the record that members will 
ask after today's hearing. This is particularly important, as I do not 
support many of the tax and financial policies put forward by the 
administration and some of the nominees here today. While we do not 
have to agree on every policy, we do need reasoned debate and dialogue 
driven by facts.

    Americans are still recovering from the largest negative economic 
shock in modern records stemming from the pandemic. We continue to hear 
of businesses having difficulty finding employees willing to work at 
market wages. Inflation has risen, igniting the prospect of budget-
crushing increases in interest rates. This is no time to enact massive 
increases in domestic and international taxes, further impede labor 
market adjustments, or punish low- and middle-income workers with 
higher energy costs and increased gas prices at the pump.

    The Tax Cuts and Jobs Act of 2017 spurred economic activity and 
helped lead to historic lows in unemployment rates, particularly for 
minority workers, and robust wage growth that especially benefited low-
wage workers. Reversing those gains with job-killing taxes is not the 
way to go. It is important to find bipartisan solutions to reignite 
growth and increase jobs and wages for workers.

    Mr. Davidson, in your role as Assistant Secretary for Legislative 
Affairs, you would advise the Secretary on congressional relations and 
help coordinate Treasury's interactions with Congress. As I said 
before, there is work to be done at Treasury to improve transparency, 
accountability, and interactions with both sides of the aisle in 
Congress.

    Mr. Harris, the Assistant Secretary for Economic Policy analyzes 
and reports on current and prospective economic developments both here 
and abroad, and assists in formulating economic policies. Economic 
analysis is often speculative, but all views must be heard. Discussions 
must be based on positive, factual descriptions of what we know or do 
not know. Normative advocacy has its place, but should not be the only 
basis for policy discussions.

    Ms. Batchelder, the Assistant Secretary for Tax Policy develops, 
recommends, and implements Federal tax policy on behalf of Treasury. I 
do not agree with some of the normative policies for which you 
advocate, and need assurance that--if confirmed--you and others at 
Treasury give opposing, reasoned views a fair shake.

    Finally, Dr. Liang, the Under Secretary for Domestic Finance 
oversees and assists in areas of domestic finance, banking, and other 
economic matters. I have concerns that some in the administration 
desire to reimagine financial markets to become more driven by 
political preferences of one side, and look forward to learning more 
about your positions.

    I again stress the need for each of you, if confirmed, to work 
across the aisle, and be transparent and responsive.

    I look forward to your testimony and detailed responses to our 
questions.

                                 ______
                                 
  Prepared Statement of Jonathan Davidson, Nominated to be Assistant 
     Secretary for Legislative Affairs, Department of the Treasury
    Chairman Wyden, Ranking Member Crapo, and members of the Finance 
Committee, I appreciate the opportunity to appear before you today.

    I'd like to start by expressing my gratitude to Senator Bennet and 
his remarkable team, with whom I spent almost half of my Senate career 
and from whom I've learned so much about decency and thoughtfulness. 
I'm so proud of the work that I was fortunate to do with Senator Bennet 
during that time. Most recently, it has been an absolute thrill to see 
his and Senator Brown's American Family Act--not to be mistaken for the 
American Families Plan--become law, which will lift nearly 50 percent 
of children out of poverty in one single year.

    I'd also like to thank Senator Warner, from whom I've learned so 
much as well, for his friendship and extraordinary support.

    And I want to mention the Sarbanes family. Paul Sarbanes, who 
passed away late last year, was my mentor. He is dearly missed by me 
and my family. He is someone who made me understand and appreciate the 
historical conscience of the Senate. And I want to extend gratitude to 
John Sarbanes, his son, who has been so successful in the House of 
Representatives and helped me learn to navigate the ways of that body.

    Finally, and most importantly, I'd like to thank my family: my kids 
Leo, Mia, and Serena, who all make us proud--almost all the time. And I 
know nominees often throw around hyperbole, but my wife Erin Sheehy is 
the reason I've been able to make it through anything difficult in my 
adult life--and she has been absolutely critical throughout this 
process. I've said this more than a few times: she has carried me and 
our family. And the same to my brother, who is the best older brother 
anyone could ever have, and to my father, who has been an example of 
the very best in parenthood and life generally, and who taught me about 
politics, diplomacy, and public service. And finally, to my mom, whom 
we lost earlier this year, but whose relentless commitment to the 
underdog continues to inspire me every day. Thank you, and I love you 
all.

    The partnership between Treasury and this committee, its members, 
and Congress overall is so important to the Federal Government and to 
the country. Just like all of you, the Treasury Department is working 
hard to help us recover from the pandemic and the related economic 
crisis. Treasury is implementing significant relief and recovery 
efforts and working on policies to strengthen our economy, to repair 
gaps in our Nation's infrastructure, and to remedy uneven access to the 
American dream. And it's doing all that work on top of its substantial 
day-to-day responsibilities, like financing the government and 
implementing foreign economic sanctions. I fully appreciate how much we 
need to partner with this committee, in its legislative and oversight 
functions, to succeed in these efforts.

    If I'm confirmed, my goal will be to serve as a reality broker 
between Treasury and Capitol Hill. Where we can provide information to 
members of Congress to help them do their jobs and aid their 
constituents, we should do so fully. Where we cannot, we should provide 
a clear and cogent explanation as to why not.

    I am privileged to have spent the majority of my career working on 
Capitol Hill. I have learned so much about trust and character up here, 
and I have learned also to be cognizant of the fact that there is 
always even more that I don't know. I've come to recognize that almost 
everyone who comes to work here has good intentions. Most of the 
members and staff are patriots who want to help our country. I have 
also come to learn that most of the good work we can all do together 
happens beneath the political din and sensationalized conflict. If 
confirmed, I hope to listen to you and work with you, to make real 
progress for every American.

    In conclusion, I want to thank the chairman, the ranking member, 
and their staffs. We all recognize how much work in addition to 
nominations everyone has to do, and we are grateful for the effort it 
took to conduct this hearing. 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): Jonathan Clements Davidson 
(Jon).

 2.  Position to which nominated: Assistant Secretary of Treasury for 
Legislative Affairs.

 3.  Date of nomination: April 15, 2021.

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

 5.  Date and place of birth: July 26, 1971; Brooklyn, New York.

 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):

        Gilman School, High School Degree--1989 (attended 1985-1989)

        University of North Carolina at Chapel Hill, BA, Political 
        Science and International Studies--1994 (attended 1989-1994)

        Georgetown University Law Center, JD--2002 (attended 1999-2001)

        Columbia Law School (attended as visiting student 2001-2002)

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

        1992-1993: USAID (Bolivia)--Research Assistant. Compiled a 
        database of all USAID activities throughout Bolivia. Completed 
        a 6-month contract and returned to finish college.

        1994-2001: Office of Senator Paul Sarbanes (DC)--Deputy Press 
        Secretary (wrote press releases and congratulatory statements 
        and letters), Projects/
        Legislative Assistant/Senior Legislative (worked on 
        Appropriations matters and covered a range of policy areas 
        including Defense, Agriculture, Telecom, Commerce, and other 
        areas).

        1997: Organization for Security and Cooperation in Europe 
        (Bosnia)--Election Supervisor. Took a 1-month sabbatical to 
        monitor first municipal elections in Bosnia after the Dayton 
        Accords.

        2002: Kronish Lieb (NYC)--Summer Associate. Worked as a law 
        firm summer associate on a range of issues including a class 
        action suit related to Enron's collapse.

        2002-2003: U.S. District Court for the District of Vermont 
        (VT)-- Law Clerk. Worked on a range of issues including a 
        Federal death penalty case; wrote draft opinions and performed 
        other duties for the U.S. Federal District Court Judge. 
        Completed a 1-year clerkship.

        2003: Office of Federal Defenders (VT)--Volunteer. Volunteered 
        briefly for Federal Defenders.

        2003-2005: Office of Senator Paul Sarbanes (DC)--Legislative 
        Director and then Chief of Staff for Senator Paul Sarbanes--
        left to be his son's COS upon his retirement from the Senate. 
        Served as senior political and policy advisor to chairman of 
        the Senate Banking, Housing, and Urban Affairs Committee who 
        also sat on Foreign Relations and Budget committees. Managed 
        more than 50 staff across Washington, DC and Maryland.

        2005, 2006, 2007, 2014: American University School of Public 
        Policy (DC)--Adjunct Professor.

        2006-2008: Office of Congressman John Sarbanes (DC)--Chief of 
        Staff for Congressman John Sarbanes. Served as senior advisor 
        to freshman member of Congress. Hired staff and set up Capitol 
        Hill office and two district offices in Maryland. Crafted 
        communications, outreach, political, and legislative strategies 
        for Congressman.

        2009-2011: Office of Senator Mark Warner (DC)--Chief Counsel 
        for Senator Mark Warner. Served as co-chief of staff to Senator 
        who sat on Senate committees on Banking, Housing, and Urban 
        Affairs; Budget; and Commerce, Science, and Transportation. 
        Devised and executed legislative strategy on financial services 
        reform legislation, which led to Senator's authorship of ``too 
        big to fail'' titles of Dodd-Frank banking reform bill.

        2011-present: Office of Senator Michael Bennet (DC)--Chief of 
        Staff for Senator Michael Bennet. Serve as most senior advisor 
        to second term Senator who sits on Senate Committees on 
        Finance; Intelligence; and Agriculture, Nutrition, and 
        Forestry. Managed team of more than 50 staff in Washington, DC 
        and across Colorado. Oversaw multi-million-dollar Senate office 
        budget.

        2020-2021: Biden/Harris Transition--(DC) Economic Nominees 
        Confirmations Team Leader (volunteer).

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):

        None.

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):

        Membership interest in Baltimore Racing Development LLC (2011).

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):

        Member of the Steering Committee for the Pew Charitable Trusts 
        Bipartisan Senate Chiefs of Staff Initiative (2012-present).

        Member of the Congressional Advisory Board of the Faith and 
        Politics Institute (2018-present).

        Capitol Hill Little League member and coach (2009-2015, 2018).

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.

       Senior advisor to Bennet for Colorado and Colorado Common Sense 
(2011-present).

       Senior advisor to Bennet for America (2019-2020).

        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.

       None.

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):

        Athletic scholarship for baseball at UNC--Chapel Hill.

        Law Fellow at Georgetown University Law Center.

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):

        None.

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):

        No formal speeches given with prepared remarks.

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

        I have 25 years of congressional experience in various roles 
        for members with very different backgrounds. I have worked in a 
        diverse array of policy areas, including many which fall under 
        the purview of the Department of the Treasury. I believe that 
        this experience will help me foster working relationships on a 
        bipartisan basis with the members of this committee and others 
        across the Congress to make progress for :he American people.

                   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.

        N/A.

 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.

                       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.

        No.

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

        Yes; please see below for a description of a misdemeanor 
        conviction 26 years ago, described in response to question D4. 
        In addition, as part of my security clearance's Continuous 
        Evaluation process, I was informed I was arrested 30 years ago 
        when I was 19 for attempting to make a false driver's license 
        and that the charge was dismissed. I do not recall being 
        arrested but am disclosing it in the interest of transparency.

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

        Yes. I was sued by the individual involved in the altercation 
        described below in D4. We settled out of court, and I paid for 
        medical costs associated with injuries sustained in the 
        altercation.

 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.

        Yes. Twenty-six years ago (when I was 23), I was involved in a 
        physical altercation with someone who shouted a racial slur in 
        Washington, DC. I believed that I acted in self-defense but was 
        ultimately convicted of a misdemeanor (simple assault). I 
        received and completed a period of 6 months of probation.

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

        Because I have worked in Congress for over 2 decades, I 
        recognize the importance of working with members on both sides 
        of the aisle and being responsive to requests and inquiries 
        from Capitol Hill.

                     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 Jonathan Davidson
                 Questions Submitted by Hon. Mike Crapo
    Question. The Finance Committee is the authorizing committee for 
the Department of the Treasury. As established, Treasury, among other 
things, is ``to make report, and give information to either branch of 
the legislature . . . respecting all matters referred . . . by the 
Senate or House of Representatives.'' Congressional oversight of 
Treasury activities has been a long bipartisan tradition of the Finance 
Committee, and an important responsibility committee members have to 
the public. The Department of the Treasury's description of the office 
to which you have been nominated identifies that the office, among 
other things, acts to ``ensure accurate and prompt response'' to 
congressional inquiries. Thus far, Treasury's responsiveness to 
inquiries has been wanting. Do you commit, if confirmed, to ensure 
accurate, detailed, complete, and timely responses to inquiries of 
Treasury from members of the Finance Committee?

    Answer. I deeply respect the oversight function of this committee. 
If I am privileged to be confirmed, I would like very much to work in a 
collaborative way with members of the committee to provide timely, 
complete, detailed and accurate information in line with the 
traditional partnership that Treasury and the committee have had in the 
past.

    Question. Finance Committee staff recently obtained a briefing on 
activities of the newly formed Office of Recovery Programs and 
Treasury's activities regarding funding provided in the American Rescue 
Plan Act of 2021 to governments of states, localities, territories, the 
District of Columbia, and tribes. When asked about how the committee, 
as a ``stakeholder'' with oversight responsibilities can obtain 
documents submitted by those governments, it was suggested that the 
information can be obtained by perusing public websites and other 
information provided publicly. Do you believe that is a satisfactory 
resolution of a need by the authorizing committee in its oversight role 
to have abilities to access documents involving utilization of taxpayer 
resources with implications for the Federal fisc?

    Answer. I am committed to maintaining a strong working relationship 
with the Finance Committee on both sides. In my current role as 
Counselor to the Secretary, I am not aware of the request you cited. If 
confirmed, I would work with the ranking member and his staff to ensure 
that they receive documentation in a way that is accessible and user-
friendly to enable the committee to do its work in overseeing 
Treasury's role in implementing the recovery programs.

    Question. When, if ever, do you believe it is appropriate for the 
Department of the Treasury to withhold documents or data from the 
Finance Committee, and why in such instances, if any, do you believe 
that the committee and the American public should not be allowed such 
documents?

    Answer. If confirmed, my goal would be to encourage Treasury to 
provide requested information to the committee whenever possible, based 
on applicable laws, procedures, and protocols.

    Question. During the Obama administration, Treasury officials 
refused to provide information to Congress or the American people, as a 
debt limit breach was impending, about how much operating cash was 
available at Treasury to continue timely payment on due obligations. 
Treasury officials also refused to provide information about what their 
near-term projections were for operating cash balances, or confidence 
intervals surrounding their projections. Do you commit to, if 
confirmed, strongly urge the Treasury Secretary to provide the American 
people and Congress with timely information, when asked, about 
operating cash balances and projections of cash balances, or any other 
information that our constituents deserve to know about the State of 
Federal debt and operations at the Treasury Department?

    Answer. It is important that the debt ceiling be suspended or 
raised on a timely basis. If confirmed, I would urge Treasury to work 
in a transparent manner to ensure that Congress can fulfill its 
responsibility to preserve the full faith and credit of the United 
States.

    Question. During the Obama administration, Treasury officials at 
times refused to provide information about the Nation's fisc to members 
of the Finance Committee on the grounds that some of the information 
was ``market-sensitive.'' The unsatisfactory implication of the view 
that Treasury need not reveal whatever it wishes to conceal on the 
grounds of the information being market-sensitive (a term with no legal 
definition) is that unelected Treasury officials are entitled to know 
more about the Nation's finances than elected members of Congress and 
their constituents. If confirmed, do you commit to immediately 
providing members of this committee with a clear delineation of what 
information Treasury has that it deems, for whatever reason, to be 
sensitive in some regard, and a method that Treasury will agree to that 
enables sharing of the information with members of the Finance 
Committee who are all entitled to access to the information?

    Answer. Yes, I will commit to working with this committee to enable 
and facilitate the sharing of information to assist the committee in 
its oversight function. I would need to be fully briefed by Treasury 
staff to better understand the restrictions mentioned as part of this 
question. If confirmed, I would very much welcome this conversation so 
that we can provide satisfactory information to the committee.

    Question. As we near a lapse in the suspension of the statutory 
debt limit, and need to either increase the dollar-value of the limit 
or once again suspend the limit until some future date, there becomes a 
rising probability that Treasury will engage in so-called 
``extraordinary measures'' to ensure that Treasury can make timely 
payments on obligations to remain below whatever the statutory limit 
becomes upon the lapse in the suspension period. It is known that 
Treasury makes projections about how long extraordinary measures may 
last before Treasury is at risk of breaching the debt limit and 
exhausting operating cash balances. Treasury Secretary Yellen has 
identified that she ``would certainly want to work closely with 
Congress to address in advance the issue of the debt limit to avoid its 
harmful effects.'' I agree, and look forward to any such bipartisan 
work. The administration and Congress should do all they can to 
responsibly and agreeably avoid such a risk, but risks cannot simply be 
ignored. As we await bipartisan work to stave off the risk of a limit 
breach and exhaustion of operating cash, it is imperative that Treasury 
regularly provide Congress with updates on its projections of how long 
extraordinary measures would last under adverse contingencies. Will you 
commit to advising Treasury to provide Congress with regular updates of 
its projections, and provide me with what you believe to be a prudent 
update schedule between now and the earliest of whenever a limit 
resolution is attained or August 1, 2021?

    Answer. I share your concern with protecting the full faith and 
credit of the United States. This is a bipartisan responsibility, and 
if confirmed, I would want to work collaboratively with you and other 
members of Congress to ensure that the debt limit is timely raised or 
suspended. I respect the committee's need for information and data and 
look forward to working with the committee on this issue.

    Question. Treasury officials have been engaged in international 
negotiations on global taxation, including so-called Pillar 1 and 
Pillar 2 components of negotiations within an OECD framework. Treasury 
has surely performed analyses of how proposals it is contemplating or 
has made will affect U.S. headquartered companies. Will you commit to 
advising Treasury to provide Congress with quantitative and qualitative 
analyses it has performed on its international tax proposals in the 
OECD framework, if confirmed and immediately upon confirmation?

    Answer. As I mentioned during the hearing, I would welcome a 
collaborative approach such that the ranking member and his staff have 
sufficient visibility to enable bipartisan work in support of a strong 
U.S. position with respect to these negotiations. If confirmed, I look 
forward to working with the committee to provide data and analyses 
regarding this issue.

    Question. Will you commit to, if confirmed, working to provide the 
Finance Committee with regular (e.g., quarterly) updated listings of 
all fiscal agency agreements that the Treasury has with the Federal 
Reserve and all financial agency agreements that Treasury has with 
private firms?

    Answer. If confirmed, I commit to working with Treasury staff to 
understand this issue and to ensure that Treasury provides the Finance 
Committee with appropriate information regarding these arrangements.

    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 made of the Federal Reserve Board and Treasury did not 
receive adequate or substantive responses. It took subpoenas from 
Congress to identify that, in fact, Treasury and the Fed do have 
contingency plans, as we would hope is the case, for confronting 
emergencies.

    If you are confirmed, and if requested, do you commit to advising 
the Treasury Secretary to provide 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 
(e.g., superstorm, cyberattack, etc.), the Federal Government is 
temporarily unable to make timely payments on debt obligations?

    Answer. I cannot speak to the Obama administration's considerations 
regarding the flow of information to the committee, but if confirmed, 
my goal would be to ensure that Treasury is transparent regarding its 
plans for continuity of operations under exigent circumstances.

                                 ______
                                 
                Questions Submitted by Hon. Rob Portman
    Question. I am very concerned by the recent inflation indicators we 
are seeing. As you know, a Congressional Budget Office report earlier 
this year predicted that we would hit full recovery by the middle of 
2021 without additional spending. Yet, we are seeing even more spending 
that would continue into next year.

    Are you concerned about rising inflation, and how does that change 
your assessment of additional Federal spending?

    Answer. I believe that the current inflation rates we are seeing 
are indicative of a robust recovery and likely transitory due to the 
combined effects of reopening the economy and supply chain disruptions 
that are impacting prices in some categories of durable goods, like 
motor vehicles. We expect monthly inflation rates to moderate in the 
coming months as the effects of stimulus payments wane, supply chain 
disruptions ease, and price normalization in pandemic-impacted sectors 
runs its course.

    I believe that the administration's American Jobs Plan and American 
Families Plan will increase the productive capacity of the economy by 
improving physical infrastructure, reallocating workers to higher-
paying/higher-productivity industries like manufacturing, and raising 
labor force participation by addressing the childcare and eldercare 
issues that make it harder for Americans to work. By increasing the 
economy's capacity, the risks of an undesirable future increase in 
inflation will be lower, as it means the economy can grow faster and 
for longer before resource utilization tightens. Additionally, both 
plans are paid for over time, limiting the near-term increase in 
deficits and lowering deficits in the medium term.

    Question. I was interested to learn in your writings of your 
interest in retirement security--particularly as it relates to lifetime 
income. You may know that Senator Cardin and I have a sweeping 
bipartisan retirement bill. Amongst other changes, our bill reforms 
Qualified Longevity Annuity Contracts (``QLACs'') and makes it easier 
for retirees to purchase annuity products. This seems to dovetail well 
with the work you did at Brookings.

    Can you discuss why lifetime income--particularly later in life--is 
so crucial and the ways the private sector can play a role here?

    Can you commit to working with me on this if confirmed to your 
role?

    Answer. Throughout my career I have been an ardent supporter of 
more robust markets for lifetime income products as one strategy for 
strengthening retirement security. My focus on this topic was driven, 
in part, by the belief that one of the greatest risks in retirement is 
uncertain lifespans, and this uncertainty can be addressed through 
guaranteed lifetime income. Naturally, Social Security plays a critical 
role in the provision of this income, but many workers may seek 
additional opportunities to increase their level of guaranteed income 
beyond their Social Security benefits--and for these workers increased 
access to lifetime income products, especially those that are 
specifically tailored to address longevity risk, can be welfare-
enhancing. This view is in line with the perspective of many other 
economists who study aging and retirement policy. If confirmed, I look 
forward to working with you on this critical issue.

                                 ______
                                 
                 Question Submitted by Hon. Todd Young
    Question. The Assistant Secretary for Legislative Affairs holds an 
important role in assisting Congress in fulfilling its responsibility 
of oversight of the Treasury Department. As the committee of 
jurisdiction, the Senate Finance Committee will be working particularly 
closely with Treasury and needs full access to Treasury personnel in 
order to do its job.

    If confirmed, do you commit to working in a timely and transparent 
manner with myself and members of this committee, treating members and 
staff from the majority as well as the minority on equal footing?

    Answer. I deeply respect both the majority and minority members of 
this committee. If confirmed, I would like very much to work in a 
collaborative way with you and other members of this committee to 
provide timely and accurate information in line with the traditional 
partnership that Treasury and this committee have had in the past.

                                 ______
                                 
Prepared Statement of Benjamin Harris, Ph.D., Nominated to be Assistant 
       Secretary for Economic Policy, Department of the Treasury
    I would like to begin by thanking Chairman Wyden, Ranking Member 
Crapo, and all the members of the committee for considering my 
nomination. I would also like to express heartfelt gratitude to 
President Biden for his nomination and to Secretary Yellen for placing 
her trust in me to serve in this role.

    Please allow me to also acknowledge my oldest daughter Lillian, 
seated behind me. As a father, I have tried to instill in my daughters 
a deep appreciation for the value of democracy, and it is a true 
privilege to invite Lily to witness the inner workings of our 
democratic system firsthand.

    Seated here today, I suspect I share the same humility felt by many 
others before me. It is truly an honor to be considered as the 
successor to a storied group who have held this role previously, 
including economists of remarkable talent serving under both Republican 
and Democratic administrations. Prior Assistant Secretaries for 
Economic Policy include Phill Swagel and Richard Clarida, now 
respectively CBO director and Vice Chair of the Fed, who held this role 
under President George W. Bush. Prior Assistant Secretaries also 
include Janice Eberly, Karen Dynan, and Alan Kruger--all of whom I have 
had the privilege to report to at some point in my career and all of 
whom I admire deeply. Should I be confirmed, I will strive to live up 
to the legacy set by these economists and others who have served in 
this role.

    The Office of Economic Policy at the Treasury Department has earned 
a reputation for providing unbiased, high-quality empirical analysis to 
the Treasury Secretary and other policymakers. As an ardent supporter 
of evidence-based policy, I regard this approach as a critical step to 
making sound and effective policy. After roughly 2 decades spent 
working in the policy arena, one of the most important lessons I have 
learned is that good policy usually follows good analysis. Indeed, I 
believe that a commitment to following the data and evidence should 
help lead our economic decision-making as we transition from the 
recession to recovery. In times of marked uncertainty, such as the 
current period, it is my view that embracing robust and timely analysis 
is the only way to get it right. I cannot tell you with certainty how 
our economy will emerge from this crisis, but I do know that we will 
better understand the challenges facing our country if we prioritize 
evidence and data.

    If confirmed, I am eager to work with the members of this committee 
and your staffs on a collaborative and bipartisan basis. As a former 
Hill staffer, I am well aware of the importance of cooperation between 
the executive and legislative branches, and understand that superior 
policy is a byproduct of robust collaboration and frequent 
communication. This preference for collaboration is further driven by 
my deep respect for this committee, which regularly confronts some of 
the most vexing and important economic challenges facing our country. 
It is not lost on me that I have much to learn from the insight of this 
committee's members and staff. I would like to conclude by thanking my 
family--my wife Jessica and my daughters Lily, Juliette, and Annie--for 
their support and patience. Through my three prior stints in public 
service, they have learned that my desire to serve the American public 
comes at a cost to them, and I am grateful that they are willing to 
share my time with the U.S. Treasury Department.

    Thank you for your consideration.

                                 ______
                                 

                        SENATE FINANCE COMMITTEE

                  STATEMENT OF INFORMATION REQUESTED 
                               OF NOMINEE

                      A. BIOGRAPHICAL INFORMATION

 1.  Name (include any former names used): Benjamin Howard Harris.

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

 3.  Date of nomination: April 22, 2021.

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

 5.  Date and place of birth: July 17, 1977; Bainbridge Island, WA.

 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):

        Bainbridge High School, 1991-1995, High School Diploma, June 
        1995.

        Tufts University, 1995-1999, Bachelor of Arts, May 1999.

        Columbia University, 2002-2003, Master of Arts, May 2003.

        Cornell University, 2003-2005, Master of Arts, January 2006.

        George Washington University, 2007-2011, Master of Philosophy, 
        May 2010; Doctor of Philosophy, May 2011.

 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):

        Research Assistant, Brookings Institution, Washington, DC, 
        1999-2000.

        Fulbright Scholar, Fulbright U.S. Scholar Program, Windhoek, 
        Namibia, 2000-2001.

        Senior Research Assistant, Brookings Institution, Washington, 
        DC, 2001-2002.

        Research Assistant, Columbia University, New York, NY 2002-
        2003.

        Research Assistant, Cornell University, Ithaca, NY, 2003-2005.

        Economist/Senior Economist, U.S. House of Representatives 
        Budget Committee, Washington, DC, 2005-2007.

        Senior Research Associate/Research Economist, Brookings 
        Institution, Washington, DC, 2007-2011.

        Senior Economist, Council of Economic Advisers, Washington, DC, 
        2011-2013.

        Senior Research Associate, Urban Institute, Washington, DC 
        2013.

        Hamilton Project Policy Director, Economic Studies Fellow, and 
        Deputy Director of the Retirement Security Project, Brookings 
        Institution, 2013-2014.

        Chief Economist and Economic Adviser to the Vice President, 
        Executive Office of the President, Washington DC, 2014-2017.

        Visiting Associate Professor/Associate Research Professor and 
        Executive Director of the Kellogg Public-Private Interface, 
        Kellogg School of Management, Evanston, IL 2017-2021.

        Founder and President, Cherrydale Strategies, Arlington VA, 
        2017-2021.

        Counselor to the Treasury Secretary, United States Treasury 
        Department, 2021.

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):

        Committee Co-Chair, Chicago Recovery Task Force, 2020.

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):

        Founder and President, Cherrydale Strategies: I founded this 
        firm in 2017 to supply a wide range of economic consulting 
        services. The nature of these services varied substantially 
        across clients, but included providing economic policy guidance 
        to for-profit firms, editing and managing the Biden Forum (a 
        series of online essays published by the Biden Foundation), and 
        generating economic policy analysis and related support for 
        non-profit organizations. Specific roles served included:

        Chief Economist, Results for America.

        Senior Economic Policy Adviser, Rokos Capital Management.

        Biden Forum Chief Editor, Biden Foundation.

        Consultant, REX Homes.

        Consultant, Everytown for Gun Safety.

        Consultant, Partnership for a New American Economy.

        Research Fellow, Alliance for Lifetime Income.

    Other business relationships unrelated to Cherrydale Strategies 
include:

        Limited Partner, Peter H. Harris Family Limited Partnership.

        Limited Partner, Harris Family LLC.

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):

        National Tax Association.

        American Economic Association.

        American Risk and Insurance Association.

13.  Political affiliations and activities:

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

       I have not been a candidate for a public office.

        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.

       I have not held any such positions.

        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.

       I have not made any such political contributions.

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):

        As noted above, I was a Fulbright Scholar to Namibia from 2000-
        2001.

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):

Books

        Inequality and the Labor Market: The Case for Greater 
        Competition, 2021, https://www.brookings.edu/book/inequality-
        and-the-labor-market/, Washington, DC: Brookings Institution 
        Press. (Edited with Sharon Block.)

        Retiring Well: How Private Markets and Public Programs Can Give 
        Americans a Secure Retirement. (With Martin N. Baily.) Draft 
        completed December 2020.

Book Chapters and Journal Articles

        ``Changing Wealth Accumulation Patterns: Evidence and 
        Determinants.'' Forthcoming. In: Measuring and Understanding 
        the Distribution and Intra/
        Inter-Generational Mobility of Income and Wealth, edited by Raj 
        Chetty, John N. Friedman, Janet C. Gornick, Barry Johnson, and 
        Arthur Kennickell. Chicago, IL: University of Chicago Press. 
        (With Jason Fitchner, Hilary Gelfond, and William G. Gale.)

        ``Labor Market Competition: Framing the Issues.'' Forthcoming. 
        In: Inequality and the Labor Market: The Case for Greater 
        Competition, https://www.
        brookings.edu/book/inequality-and-the-labor-market/, edited by 
        Sharon Block and Benjamin H. Harris. Washington, DC: Brookings 
        Institution Press. (With Jared Bernstein.)

        ``Fostering More-Competitive Labor Markets through Transparent 
        Wages,'' https://www.brookings.edu/wp-content/uploads/2020/08/
        9780815738800_ch1.
        pdf. Forthcoming. In: Inequality and the Labor Market: The Case 
        for Greater Competition, edited by Sharon Block and Benjamin H. 
        Harris. Washington, DC: Brookings Institution Press.

        ``Better Financial Security in Retirement? Realizing the 
        Promise of Longevity Annuities,'' 2014, https://
        www.brookings.edu/research/better-financial-security-in-
        retirement-realizing-the-promise-of-longevity-annuities/. The 
        Journal of Retirement 3(4): 12-27. (With Katharine G. Abraham.)

        ``Entitlement Reform and the Future of Pensions,'' 2016, 
        https://repository.upenn.edu/prc_papers/91/. In Reimagining 
        Pensions: The Next 40 Years, edited by Olivia S. Mitchell and 
        Richard C. Shea. New York, NY: Oxford University Press. (With 
        C. Eugene Steuerle and Pamela J. Perun.)

        ``Developing and Disseminating Financial Guidelines for 
        American Households,'' 2013, https://papers.ssrn.com/sol3/
        papers.cfm?abstract_id=2316920. Journal of Retirement 1(2): 
        113-124. (With William G. Gale.)

        ``Reforming Taxes and Raising Revenues: Part of the Fiscal 
        Solution,'' 2011, https://www.jstor.org/stable/
        23607101?seq=1#metadata_info_tab_contents. Oxford Review of 
        Economic Policy 27(4): 563-588. (With William G. Gale.)

        ``A VAT for the United States: Part of the Solution,'' 2011, 
        https://www.
        brookings.edu/research/a-value-added-tax-for-the-united-states-
        part-of-the-solution/. In The VAT Reader: What a Federal 
        Consumption Tax Would Mean for America. Falls Church, VA: Tax 
        Analysts. (With William G. Gale.)

        ``Distributional Effects of Tax Expenditures in the United 
        States,'' 2011, https://www.taxpolicycenter.org/sites/default/
        files/alfresco/publication-pdfs/411922-Distributional-Effects-
        of-Tax-Expenditures.PDF. In Tax Expenditures: State of the Art, 
        edited by Lisa Philipps, Neil Brooks and Jinyan Li. Toronto: 
        Canadian Tax Foundation. (With Eric J. Toder and Katherine 
        Lim.)

        ``Activist Fiscal Policy,'' 2010, https://www.aeaweb.org/
        articles?id=10.1257/jep.24.4.141. Journal of Economic 
        Perspectives 24(4): 1-24. (With Alan Auerbach and William G. 
        Gale.)

        ``Capital Income Taxation and Progressivity in a Global 
        Economy,'' 2010, https://www.taxpolicycenter.org/publications/
        capital-income-taxation-and-progressivity-global-economy-0/
        full. Virginia Tax Review 30(1): 355-388. (With Rosanne 
        Altshuler and Eric J. Toder.)

        ``Introduction.'' 2009. In Automatic: Changing the Way America 
        Saves, https://www.jstor.org/stable/10.7864/j.ctt6wpgxf, edited 
        by William G. Gale, J. Mark Iwry, David John, and Lina Walker. 
        Washington, DC: Brookings Institution Press. (With William G. 
        Gale and J. Mark Iwry.)

        ``The Automatic 401(k): Revenue and Distributional Estimates,'' 
        2009. In Automatic: Changing the Way America Saves, https://
        www.jstor.org/stable/10.7864/j.ctt6wpgxf, edited by William G. 
        Gale, J. Mark Iwry, David John, and Lina Walker. Washington, 
        DC: Brookings Institution Press. (With Christopher Geissler.)

        ``Tax Credits for Electric Cars: Stimulating Demand through the 
        Tax Code,'' 2009. In Plug-In Vehicles: What Role for 
        Washington?, https://www.jstor.org/stable/10.7864/
        j.ctt1262t0?turn_away=true, edited by David Sandalow. 
        Washington DC: Brookings Institution Press.

        ``Health and Functional Status,'' 2009. In Counting Working-Age 
        People with Disabilities, https://research.upjohn.org/up_press/
        146/, edited by Andrew J. Houtenville, David C. Stapleton, 
        Robert R. Weathers II, and Richard V. Burkhauser. Kalamazoo, 
        Michigan: W.E. Upjohn Institute for Employment Research. (With 
        Gerry E. Hendershot and David C. Stapleton.)

        ``Distributional Effects of the 2001 and 2003 Tax Cuts: How Do 
        Financing and Behavioral Responses Matter?'', 2008, https://
        www.brookings.edu/wp-content/uploads/2016/06/
        06_taxcuts_gale.pdf. National Tax Journal 61(3): 365-80. (With 
        Douglas W. Elmendorf, Jason Furman, and William G. Gale.)

        ``Our Uncertain Demographic Future,'' 2004. In Coping with 
        Methuselah: the Impact of Molecular Biology on Medicine, 
        https://muse.jhu.edu/chapter/1978439/pdf, edited by Henry J. 
        Aaron and William B. Schwartz. Washington, DC: Brookings 
        Institution Press. (With Henry J. Aaron.)

        ``Uncertainty and Pension Policy,'' 2002. In The Report of 
        Collaboration Projects on Studying Economic and Social Systems 
        in the 21st Century, edited by Toshiaki Tachibanaki. Japan: 
        Economic and Social Research Institute. (With Henry J. Aaron.)

        ``The Individual AMT: Problems and Potential Solutions,'' 2002, 
        https://www.taxpolicycenter.org/publications/individual-amt-
        problems-and-potential-solutions/full. National Tax Journal 
        55(3): 555-596. (With Leonard E. Burman, William G. Gale, and 
        Jeffrey Rohaly.)

Other Publications

        ``Anticompetition in Buying and Selling Homes.'' Forthcoming. 
        Regulation. (With Roger P. Alford.)

        ``COVID-19 and Retirement: Impact and Policy Responses.'' 2020, 
        https://www.brookings.edu/wp-content/uploads/2020/07/ES-
        7.30.20-Baily-Harris-Doshi.pdf. Brookings Institution. (With 
        Martin N. Baily.)

        ``Evidence-Based Retirement Policy: Necessity and 
        Opportunity.'' 2020, https://www.brookings.edu/wp-content/
        uploads/2020/01/ES_20200123_GaleHarris
        Haldeman_final.pdf. Brookings Institution. (With William G. 
        Gale.)

        ``The Unfulfilled Promise of Reverse Mortgages: Can a Better 
        Market Improve Retirement Security?'' 2020, https://
        www.brookings.edu/wp-content/uploads/2019/10/
        ES_20191024_BailyHarrisWang-1.pdf. Brookings Institution. (With 
        Martin N. Baily.)

        ``Can Annuities Become a Bigger Contributor to Retirement 
        Security?'' 2019, https://www.brookings.edu/wp-content/uploads/
        2019/06/ES_20190624_Baily
        Harris_Annuities.pdf. Brookings Institution. (With Martin N. 
        Baily.)

        ``Working Longer Policies: Framing the Issues.'' 2019, https://
        www.
        brookings.edu/wp-content/uploads/2019/01/ES_20180124_Harris-
        Baily-Retirement-Proposals1.pdf. Brookings Institution. (With 
        Martin N. Baily.)

        `` `RESA' 2019 Legislative Proposals to Improve Retirement 
        Security and Saving.'' 2019, https://www.brookings.edu/wp-
        content/uploads/2019/03/RESA-paper-1.pdf. Brookings 
        Institution. (With Martin N. Baily and J. Mark Iwry.)

        ``The Retirement Revolution: Regulatory Reform to Enable 
        Behavioral Change.'' 2018, https://www.brookings.edu/wp-
        content/uploads/2018/06/The-Retirement-Revolution.pdf. 
        Brookings Institution. (With Martin N. Baily.)

        ``Information Is Power: Fostering Labor Market Competition 
        through Transparent Wages.'' 2018, https://
        www.hamiltonproject.org/assets/files/
        information_is_power_harris_pp.pdf. Hamilton Project, Brookings 
        Institution.

        ``The Tax Cuts and Jobs Act: A Missed Opportunity to Establish 
        a Sustainable Tax Code.'' 2018, https://www.brookings.edu/wp-
        content/uploads/2018/05/es_20180524_harris-
        looney_taxreform.pdf. Urban-Brookings Tax Policy Center. (With 
        Adam Looney.)

        ``Evaluating Tax Expenditures: Introducing Oversight into 
        Spending through the Tax Code.'' 2018, https://www.urban.org/
        sites/default/files/publication/
        98742/
        evaluating_tax_expenditures_introducing_oversight_into_spending_

        through_the_tax_code_0.pdf. Urban-Brookings Tax Policy Center. 
        (With Eugene Steuerle and Caleb Quakenbush.)

        ``The Benefits of Mortgage Interest and Property Tax 
        Deductions.'' 2013, https://www.urban.org/sites/default/files/
        publication/23166/1001693-The-Benefits-of-the-Mortgage-
        Interest-and-Property-Tax-Deductions.PDF. Tax Notes 140(9): 
        947. (With Amanda Eng.)

        ``State Economic Monitor: Quarterly Appraisal of State Economic 
        Conditions.'' 2013, https://www.taxpolicycenter.org/sites/
        default/files/alfresco/publication-pdfs/412856-State-Economic-
        Monitor.PDF. Urban-Brookings Tax Policy Center. (With Yuri 
        Shadunsky.)

        ``Tax Reform, Transaction Costs, and Metropolitan Housing in 
        the United States.'' 2013, https://www.urban.org/sites/default/
        files/publication/23686/412835-Tax-Reform-Transaction-Costs-
        and-Metropolitan-Housing-in-the-United-States.PDF. Urban-
        Brookings Tax Policy Center.

        ``Analysis of Specific Tax Provisions in President Obama's 
        FY2014 Budget.'' 2013, https://www.taxpolicycenter.org/sites/
        default/files/alfresco/publication-pdfs/412817-Analysis-of-
        Specific-Tax-Provisions-in-President-Obama-s-FY--Budget.PDF. 
        Urban-Brookings Tax Policy Center. (With Jim Nunns, Kim Rueben, 
        Eric Toder, and Roberton Williams.)

        ``State and Local Governments in Economic Recoveries: This 
        Recovery Is Different.'' 2013, https://www.taxpolicycenter.org/
        sites/default/files/alfresco/publication-pdfs/412807-State-and-
        Local-Governments-in-Economic-Recoveries-This-Recovery-is-
        Different.PDF. Urban-Brookings Tax Policy Center. (With Yuri 
        Shadunsky.)

        ``Creating an American Value-Added Tax.'' 2013, https://
        www.urban.org/sites/default/files/publication/23106/1001662-
        Creating-an-American-Value-Added-Tax.PDF. Hamilton Project, 
        Brookings Institution. (With William G. Gale.)

        ``Estate Taxes After ATRA.'' 2013, https://www.urban.org/sites/
        default/files/publication/23101/1001660-Estate-Taxes-After-
        ATRA.PDF. Tax Notes 138(8): 1005.

        ``Today's Unsustainable Budget Policy: A Recount.'' 2013, 
        https://www.
        urban.org/sites/default/files/publication/23276/412740-Today-s-
        Unsustainable-Budget-Policy-A-Recount.PDF. Urban-Brookings Tax 
        Policy Center. (With C. Eugene Steuerle and Caleb Quackenbush.)

        ``The Population of Workers Covered by the Auto IRA: Trends and 
        Characteristics.'' 2012, https://www.aarp.org/content/dam/aarp/
        research/public_policy
        _institute/econ_sec/2012/Population-of-Workers-Auto-IRA-Trends-
        and-Characteristics-Research-Report-AARP-ppi-econ-sec.pdf. AARP 
        Public Policy Institute. (With Ilana Fischer.)

        ``Economic Effects of Automatic Enrollment in Individual 
        Retirement Accounts: An Update.'' 2012, https://www.aarp.org/
        content/dam/aarp/research/public_policy_institute/econ_sec/
        2012/Economic-Effects-of-Auto-IRA-Research-Report-AARP-ppi-
        econ-sec.pdf. AARP Public Policy Institute. (With Rachel M. 
        Johnson.)

        ``Who Itemizes Deductions?'' 2011, http://www.urban.org/sites/
        default/files/publication/26856/1001486-Who-Itemizes-
        Deductions-.PDF. Tax Notes 130(3): 345. (With Daniel Baneman.)

        ``Tax Proposals in the 2012 Budget.'' 2011, https://
        www.taxpolicycenter.org/sites/default/files/alfresco/
        publication-pdfs/1001524-Tax-Proposals-in-the-Budget.PDF. 
        Urban-Brookings Tax Policy Center. (With Elaine Maag, Donald 
        Marron, Jim Nunns, Joseph Rosenberg, Kim Rueben, Eric Toder, 
        and Roberton Williams.)

        ``Tax Proposals in the 2011 Budget.'' 2010, https://
        www.urban.org/sites/default/files/publication/28376/412029-Tax-
        Proposals-in-the-Budget.PDF. Urban-Brookings Tax Policy Center. 
        (With Rosanne Altshuler, Daniel Halperin, Joseph Rosenberg, 
        Eric Toder, and Roberton Williams.)

        ``The Effect of Proposed Tax Reforms on Metropolitan Housing 
        Prices.'' 2010, https://www.taxpolicycenter.org/sites/default/
        files/alfresco/publication-pdfs/1001364-The-Effect-of-Proposed-
        Tax-Reforms-on-Metropolitan-Housing-Prices.
        PDF. Urban-Brookings Tax Policy Center Working Paper.

        ``Alternative to the Alternative: The Economic Effects of AMT 
        Reform.'' 2010, https://www.taxpolicycenter.org/sites/default/
        files/alfresco/publication-pdfs/412264-Alternative-to-the-
        Alternative-The-Economic-Effects-of-AMT-Reform.PDF. Tax Notes 
        129(9): 1001-1010. (With Daniel Baneman.)

        ``Tax Stimulus Report Card Conference Bill.'' 2009. https://
        www.
        taxpolicycenter.org/sites/default/files/alfresco/publication-
        pdfs/411839-Tax-Stimulus-Report-Card-Conference-Bill.PDF. 
        Urban-Brookings Tax Policy Center. (With Rosanne Althsuler, 
        Leonard Burman, Howard Gleckman, Dan Halperin, Elaine Maag, Kim 
        Rueben, Eric Toder, and Roberton Williams.)

        ``Corporate Tax Incidence and Its Implications for 
        Progressivity.'' 2009, https://www.taxpolicycenter.org/sites/
        default/files/alfresco/publication-pdfs/1001349-Corporate-Tax-
        Incidence-and-Its-Implications-for-Progressivity.PDF. Urban-
        Brookings Tax Policy Center Working Paper. November.

        ``Automatic Enrollment in Individual Retirement Accounts: 
        Revenue and Distributional Estimates.'' 2009, https://
        www.urban.org/sites/default/files/publication/29896/1001312-
        Automatic-Enrollment-in-IRAs-Costs-and-Benefits.PDF. Tax Notes 
        124(9): 903-914. (With Rachel M. Johnson.)

        ``Beyond the Storm: Reforms for 401(k) Plans.'' 2009, https://
        www.urban.org/sites/default/files/publication/29821/1001279-
        Beyond-the-Storm-New-Reforms-for--k-Plans.PDF. Tax Notes 
        123(9): 1131-1136. (With Lina Walker.)

        ``Taxes Under Obama and McCain.'' 2008, https://www.urban.org/
        sites/default/files/publication/31311/1001223-taxes-under-
        obama-and-mccain.pdf. The Economists' Voice 5(7). (With William 
        G. Gale.)

        ``Taxpayer Eligibility for IRAs.'' 2008, https://www.urban.org/
        sites/default/files/publication/31121/1001147-Taxpayer-
        Eligibility-for-IRAs.PDF. Tax Notes 118(8): 739. (With 
        Christopher Geissler.)

        ``Tax Rates on Capital Gains and Dividends under the AMT.'' 
        2008, https://www.taxpolicycenter.org/sites/default/files/
        alfresco/publication-pdfs/1001148-Tax-Rates-on-Capital-Gains-
        and-Dividends-Under-the-AMT.PDF. Tax Notes 118(10): 1031. (With 
        Christopher Geissler.)

         ``When Statutory and Marginal Rates Differ.'' 2008, https://
        www.urban.org/sites/default/files/publication/31321/1001230-
        when-marginal-and-statutory-tax-rates-differ.pdf. Tax Notes 
        121(7): 863. (With Ruth Levine.)

        ``A Guide to Disability Statistics from the National Health 
        Interview Survey.'' 2005. Rehabilitation Research and Training 
        Center on Disability Demographics and Statistics, Cornell 
        University: Ithaca, NY. (With Gerry Hendershot, and David C. 
        Stapleton.)

        ``The AMT: Out of Control.'' 2002, https://www.urban.org/sites/
        default/files/publication/60226/310565-The-AMT-Out-of-
        Control.PDF. Urban-Brookings Tax Policy Center Policy Brief #5. 
        September. (With Leonard E. Burman, William G. Gale, and 
        Jeffrey Rohaly.)

Op-eds and Blog Posts

        CNN Business, The Great Recession was especially bad for older 
        workers. The pandemic could be even worse, https://www.cnn.com/
        2020/06/18/perspectives/pandemic-older-workers/index.html, June 
        18, 2020.

        Barron's, Social Security Isn't the Only Retirement Crisis. 
        Look at Medicare and Medicaid, April 26, 2019.

        CNN Business, America's retirement system is a mess. This new 
        legislation can help, https://www.cnn.com/2019/04/16/
        perspectives/american-retirement-system/index.html, April 16, 
        2019.

        The Wall Street Journal, The Problem With Bonds in a Portfolio, 
        September 10, 2019.

        The Hill, To fix retirement, we need to understand it, https://
        thehill.com/opinion/finance/455755-to-fix-retirement-we-need-
        to-understand-it, August 2, 2019.

        The Wall Street Journal, Why Leveraged ETFs Are Too Risky for 
        Retirement Accounts, https://www.wsj.com/articles/why-
        leveraged-etfs-are-too-risky-for-
        retirement-accounts-
        01553015612#:%7E:text=Leveraged%20ETFs%20are%20espe
        cially%20risky,the%20event%20of%20a%20downturn, March 19, 2019.

        The Wall Street Journal, New Opportunity Zones Could Jumpstart 
        Depressed Economies. If Only We Knew, https://www.wsj.com/
        articles/new-opportunity-zones-could-jumpstart-depressed-
        economies-if-only-we-knew-01550755370, February 21, 2019.

        The Wall Street Journal, Why Older Couples Must Look Beyond 
        Life Expectancy When Planning for Retirement, https://
        www.wsj.com/articles/why-older-couples-must-look-beyond-life-
        expectancy-when-planning-for-retirement-01549380
        699, February 5, 2019.

        The Wall Street Journal, Six Questions to Ask a Financial 
        Adviser About Fees, https://www.wsj.com/articles/six-questions-
        to-ask-a-financial-adviser-about-fees-1522030140, February 13, 
        2019.

        The Wall Street Journal, Top Five Columns on Saving for 
        Retirement from the Experts in 2018, https://www.wsj.com/
        articles/top-five-columns-on-saving-for-retirement-from-the-
        experts-in-2018-11546020930, December 28, 2018.

        The Wall Street Journal, Five Top Ideas About Aging from the 
        Experts in 2018, https://www.wsj.com/articles/five-top-ideas-
        about-aging-from-the-experts-in-2018-11546617920, January 4, 
        2018.

        The Wall Street Journal, For Older Americans, Working a Little 
        Longer Is Less Costly Than It Used to Be, https://www.wsj.com/
        articles/for-older-americans-working-a-little-longer-is-less-
        costly-than-it-used-to-be-01545236587, December 19, 2018.

        Fortune, Why Businesses Should be Optimistic About the Midterm 
        Results, https://fortune.com/2018/11/15/midterm-elections-2018-
        results-business/, November 15, 2018.

        The Wall Street Journal, The Case for Revamping 401(k)s, 
        https://www.
        wsj.com/articles/the-case-for-revamping-401-k-s-1537754400, 
        September 23, 2018.

        The Wall Street Journal, How to Reduce Home-Ownership Risk, 
        https://www.wsj.com/articles/how-to-reduce-home-ownership-risk-
        1536026421, September 3, 2018.

        The Wall Street Journal, Why Annuities May Be Safer Than You 
        Think, https://www.wsj.com/articles/why-annuities-may-be-safer-
        than-you-think-15311
        02216, July 8, 2018.

        The Hill, Entrepreneurial spirit no longer just for the young, 
        https://thehill.com/opinion/finance/393896-entrepreneurial-
        spirit-no-longer-just-for-the-young, June 25, 2018.

        The Wall Street Journal, Why the Cost of Buying and Selling a 
        Home Remains High--and What We Can Do About It, https://
        www.wsj.com/articles/why-the-cost-of-buying-and-selling-a-home-
        remains-highand-what-we-can-do-about-it-152
        8732490, June 11, 2018.

        The Wall Street Journal, Americans Should be More Financially 
        Literate. But What Does That Mean?, https://www.wsj.com/
        articles/americans-should-be-more-financially-literate-but-
        what-does-that-mean-1525659015, May 6, 2018.

        CNBC.com, The looming debt crisis will hurt these Americans the 
        most, https://www.cnbc.com/2018/04/11/the-looming-debt-crisis-
        will-hurt-these-americans-the-most.html, April 11, 2018.

        The Wall Street Journal, Retirement Insurance Products Are 
        Disappearing. And That's Dangerous, https://www.wsj.com/
        articles/retirement-insurance-products-are-disappearing-and-
        thats-dangerous-1523635517, April 13, 2018.

        The Wall Street Journal, Six Questions to Ask a Financial 
        Adviser About Fees, https://www.wsj.com/articles/six-questions-
        to-ask-a-financial-adviser-about-fees-1522030140, March 25, 
        2018.

        The Wall Street Journal, How do your Financial Adviser's Fees 
        Compares? Good Luck Figuring it Out, https://www.wsj.com/
        articles/how-do-your-financial-advisers-fees-compare-good-luck-
        figuring-it-out-1518005413, February 7, 2018.

        The Wall Street Journal, How Retirement Savers Can Protect 
        Against the Risk of a Changing Tax Code, https://www.wsj.com/
        articles/how-retirement-savers-can-protect-against-the-risk-of-
        a-changing-tax-code-1515585643, January 10, 2018.

        The Hill, Don't confuse soaring stocks with real economic 
        growth, https://thehill.com/opinion/finance/366761-dont-
        confuse-soaring-stocks-with-real-economic-growth, December 29, 
        2017.

        The Wall Street Journal, Why Adjustable-Rate Mortgages Aren't 
        as Risky as You Think, https://www.wsj.com/articles/why-
        adjustable-rate-mortgages-arent-as-risky-as-you-think-
        1507515024, October 8, 2017.

        Fortune, Why your economic argument against immigration is 
        probably wrong, https://fortune.com/2017/09/11/daca-
        immigration-economy-donald-trump/, September 11, 2017.

        CNBC, Here's the biggest missing piece in the GOP tax plan, 
        https://www.cnbc.com/2017/09/28/trump-and-gop-tax-cut-plans-
        biggest-omission-commentary.html, September 28, 2017.

        The Hill, Unlike the national debt, your 401(k) is safe, 
        https://thehill.
        com/opinion/finance/357401-unlike-the-national-debt-your-401k-
        is-safe#:%7E:
        text=Earlier%20this%20week%2C%20Republicans%20in,for%20the%20GOP
        %20
        tax%20plan.&text=The%20tax%20benefit%20comes%20in,on%20their%20s
        avings
        %20upon%20withdrawal, October 27, 2017.

        The Hamilton Project. Major Decisions: Graduates' Earnings 
        Growth and Debt Repayment, https://www.hamiltonproject.org/
        assets/files/major_decisions_
        graduates_earnings_growth_debt_repayment.pdf, November 20, 
        2014.

        The Hamilton Project. Tidal Wave or Drop in the Bucket? 
        Differences in Water Use Across the United States, https://
        www.brookings.edu/blog/planetpolicy/2014/11/07/tidal-wave-or-
        drop-in-the-bucket-differences-in-water-use-across-the-united-
        states/, November 7, 2014.

        The Hamilton Project. In Times of Drought: Nine Economic Facts 
        about Water in the United States, https://www.brookings.edu/wp-
        content/uploads/2016/06/
        nineeconomicfactsaboutuswaterkearneyharris.pdf, October 14, 
        2014.

        The Hamilton Project. Economic Contributions of the U.S. 
        Fishing Industry, https://www.brookings.edu/blog/up-front/2014/
        09/03/economic-contributions-of-the-u-s-fishing-industry/, 
        September 3, 2014.

        The Hamilton Project. What's the Catch? Challenges and 
        Opportunities of the U.S. Fishing Industry, https://
        www.brookings.edu/wp-content/uploads/2016/06/Challenges--
        opportunities--fishing--industry--policybrief.pdf, September 3, 
        2014.

        The Hamilton Project. An Update to The Hamilton Project's Jobs 
        Gap Analysis, https://www.hamiltonproject.org/assets/files/
        an_update_to_the_hamilton_pro
        jects_jobs_gap_analysis.pdf, August 1, 2014.

        The Hamilton Project. Fighting Poverty Needs to be a National 
        Policy Priority, https://www.brookings.edu/blog/up-front/2014/
        06/13/fighting-poverty-needs-to-be-a-national-policy-priority/, 
        June 13, 2014.

        The Hamilton Project. Ten Economic Facts about Crime and 
        Incarceration in the United States, https://www.brookings.edu/
        wp-content/uploads/2016/06/v8--thp--10crimefacts.pdf, May 1, 
        2014.

        Brookings Institution. 3 Things We Can Learn about Property 
        Taxes from a Map, https://www.brookings.edu/blog/up-front/2014/
        04/07/3-things-we-can-learn-about-property-taxes-from-a-map/, 
        April 7, 2014.

        Brookings Institution. 3 Things We Can Learn about Income Tax 
        Burdens from a Map, https://www.brookings.edu/blog/up-front/
        2014/04/07/3-things-we-can-learn-about-income-tax-burdens-from-
        a-map/, April 7, 2014.

        Brookings Institution. 3 Things We Can Learn about Itemized 
        Deductions from a Map, https://www.brookings.edu/blog/up-front/
        2014/04/07/3-things-we-can-learn-about-itemized-deductions-
        from-a-map/, April 7, 2014.

        Brookings Institution. 3 Things We Can Learn about the Earned 
        Income Tax Credit from a Map, https://www.brookings.edu/blog/
        up-front/2014/04/07/3-things-we-can-learn-about-the-earned-
        income-tax-credit-from-a-map/, April 7, 2014.

        Brookings Institution. State of the Union Speech Promotes New 
        Retirement Savings Vehicles, https://www.brookings.edu/blog/up-
        front/2014/01/30/state-of-the-union-speech-promotes-new-
        retirement-savings-vehicles/, January 30th, 2014.

        Brookings Institution. How to Guard Against Outliving Your 
        Money, https://www.brookings.edu/opinions/how-to-guard-against-
        outliving-your-money/#:%7
        E:text=Longevity%20annuities%20might%20be%20an,the%20policy%20ho
        lder%
        20is%20alive, November 12, 2014.

        TaxVox. Making Saving Incentives More Equitable, https://
        www.brookings.
        edu/opinions/making-saving-incentives-more-equitable/, July 8, 
        2014.

        TaxVox. Tax Expenditures for Asset-Building: Costly, 
        Regressive, and Ineffective, https://www.brookings.edu/
        opinions/tax-expenditures-for-asset-building-costly-regressive-
        and-ineffective/, April 9, 2014.

        TaxVox. Stark Variation in Taxpayer Use of Itemized Deductions, 
        County by County, https://www.brookings.edu/blog/up-front/2014/
        03/06/stark-variation-in-taxpayer-use-of-itemized-deductions-
        county-by-county/, March 7, 2014.

        TaxVox. Variation in EITC Take-up, County by County, https://
        www.
        brookings.edu/blog/up-front/2014/01/30/variation-in-eitc-take-
        up-county-
        by-county/
        #:%7E:text=There%20is%20notable%20variation%20across,of%2027.1
        %20percent%20or%20higher, January 31, 2014.

        TaxVox. Rethinking Homeownership Subsidies, https://
        www.taxpolicycenter
        .org/taxvox/rethinking-homeownership-
        subsidies#:%7E:text=Instead%20of%20
        encouraging%20people%20to,interest%20deduction%20at%2015%20perce
        nt, January 6, 2014.

        TaxVox. The US Income Tax Burden, County by County, https://
        www.taxpolicy
        center.org/taxvox/us-income-tax-burden-county-county, December 
        16, 2013.

        TaxVox. Why the Next Debt Limit Debacle Might be Worse, https:/
        /www.tax
        policycenter.org/taxvox/why-next-debt-limit-debacle-might-be-
        worse, December 3, 2013.

        TaxVox. Sorting Through The Property Tax Burden, https://
        www.taxpolicy
        center.org/taxvox/sorting-through-property-tax-burden, November 
        18, 2013.

        TaxVox. What Changes in the Mortgage Deduction Would Mean for 
        Home Prices, https://www.taxpolicycenter.org/taxvox/what-
        changes-mortgage-deduction-would-mean-home-prices, June 5, 
        2013.

        TaxVox. Why State and Local Governments Are Hurting the 
        Recovery, https://www.taxpolicycenter.org/taxvox/why-state-and-
        local-governments-are-hurting-recovery, April 23, 2013.

        TaxVox. The President's Plan to Cap Retirement Saving Benefits, 
        https://www.taxpolicycenter.org/taxvox/presidents-plan-cap-
        retirement-saving-benefits-0, April 12, 2013.

        TaxVox. Hiking Dividend Taxes to Pay for a Corporate Rate Cut, 
        https://www.taxpolicycenter.org/taxvox/hiking-dividend-taxes-
        pay-corporate-rate-cut, April 1, 2013.

        TaxVox. Automatic Retirement Saving Inches Forward, https://
        www.taxpolicy
        center.org/taxvox/automatic-retirement-saving-inches-forward, 
        March 22, 2013.

        TaxVox. Five Reasons Why the Sequester's Automatic Spending 
        Cuts Are Bad Policy, https://www.taxpolicycenter.org/taxvox/
        five-reasons-why-sequesters-automatic-spending-cuts-are-bad-
        policy, February 15, 2013.

        TaxVox. Deficits After ATRA, https://www.taxpolicycenter.org/
        taxvox/deficits-after-atra, January 31, 2013.

        TaxVox. The government and short-run economic growth, https://
        www.
        taxpolicycenter.org/taxvox/government-and-short-run-economic-
        growth, January 31, 2013.

        TaxVox. Japan (Re)Tries Fiscal Stimulus, https://
        www.taxpolicycenter.org/taxvox/japan-retries-fiscal-stimulus, 
        January 15, 2013.

        TaxVox. Should Louisiana Dump its Income Tax for a Bigger Sales 
        Tax? https://www.taxpolicycenter.org/taxvox/should-louisiana-
        dump-its-income-tax-bigger-sales-tax, January 14, 2013.

        TaxVox. Why the Google Test Fails, https://
        www.taxpolicycenter.org/taxvox/why-google-test-fails, June 8, 
        2011.

        TaxVox. Taxes and Housing Prices, https://
        www.taxpolicycenter.org/taxvox/taxes-and-housing-prices, April 
        21, 2010.

        TaxVox. Is the Corporate Tax Progressive?, https://
        www.taxpolicycenter.org/taxvox/corporate-tax-progressive, 
        February 22, 2010.

        TaxVox. Is China Turning Bearish on the U.S. Treasury? https://
        www.
        csmonitor.com/Business/Tax-VOX/2010/0219/Is-China-Turning-
        Bearish-on-the-U.S.-Treasury, February 19, 2010.

        TaxVox. The Estate Tax and the Economy, https://
        www.taxpolicycenter.org/taxvox/estate-tax-and-economy, June 18, 
        2009.

        TaxVox. How Would Small Businesses Fare Under Obama's Tax 
        Plan?, https://www.taxpolicycenter.org/taxvox/how-would-small-
        businesses-fare-under-obamas-tax-plan, April 29, 2009.

        TaxVox. In Summary: A Comparison of the Candidates' Tax Plans. 
        November 3, 2008.

        TaxVox. Something to Agree On, https://www.taxpolicycenter.org/
        taxvox/something-agree, October 30, 2008.

        TaxVox. How McCain's Health Reforms Would Raise Marginal Tax 
        Rates, https://www.taxpolicycenter.org/taxvox/how-mccains-
        health-reforms-would-raise-marginal-tax-rates, October 9, 2008.

        TaxVox. Tax Credits for Electric Cars, https://
        www.taxpolicycenter.org/taxvox/tax-credits-electric-cars, 
        September 26, 2008.

        TaxVox. Getting Saving Incentives Right, https://
        www.taxpolicycenter.org/taxvox/getting-saving-incentives-right, 
        February 11, 2008.

        TaxVox. A Simple Tax Reform, https://www.taxpolicycenter.org/
        taxvox/simple-tax-reform, January 17, 2008.

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):

        S&P Global Good Governance Forum, Good Governance: Driving 
        Improved Financial Results, July 29, 2019.

        RegTech Data Summit, Keynote Address, April 10, 2019.

        Mastercard Middle East and Africa Advisory Board Meeting, 
        Fiscal Chaos or Business as Usual?, October 9, 2017.

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

        I have spent the vast bulk of the past 2 decades engaged in 
        economic policy, largely at the intersection of policymaking 
        and academia. I have served in several positions in well-
        respected think tanks, including the Brookings Institution and 
        the Urban Institute. This experience at think tanks has been 
        complemented by four stints in senior policymaking roles in the 
        Federal Government, including serving as the senior economist 
        with the House Budget Committee, a senior economist with the 
        Council of Economic Advisers, the chief economist and economic 
        adviser to the Vice President of the United States, and 
        currently as a counselor to the Treasury Secretary. More 
        recently, I have served in academia through my association with 
        Northwestern University's Kellogg School of Management, where I 
        am on leave as an associate research professor and executive 
        director of the Kellogg Public-Private Interface. In addition, 
        from 2017 through early 2021 I served as the chief economist 
        for the non-partisan evidence-based policy organization Results 
        for America. All told, these experiences have prepared me with 
        the knowledge and judgment to effectively serve as the 
        Assistant Treasury Secretary.

        I also hold an undergraduate degree in economics from Tufts 
        University, a master's degree in Quantitative Methods from 
        Columbia University, a second master's degree in economics from 
        Cornell University, and a Ph.D. in economics from George 
        Washington University. I also was awarded a Fulbright 
        Scholarship to Namibia earlier in my career.

                   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.

        N/A.

 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.

                       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.

        No.

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

        No.

 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.

        I do not have additional information to provide the committee.

                     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 Benjamin Harris
                 Questions Submitted by Hon. Mike Crapo
    Question. Former Treasury Secretary Lawrence Summers, discussing 
the nearly $2-trillion American Rescue Plan Act (ARPA) of 2021, is 
quoted as saying that: ``I think this is the least responsible 
macroeconomic policy we've had in the last 40 years.'' He also is 
reported to have said that: ``Now there's the real risk that 
macroeconomic policy will be very much destabilizing things.'' 
Economist Olivier Blanchard, former economic counselor and director of 
the Research Department at the International Monetary Fund and 
Professor of Economics emeritus at MIT, also expressed concerns. He has 
written, for example, about having misgivings about the size of ARPA, 
warning that: ``Much too much is both possible and harmful. I think 
this package is too much.'' Concerns remain over massive fiscal 
stimulus de-anchoring inflation expectations, increasing interest 
rates, and eventually stalling the recovery from the largest negative 
shock to the economy on record.

    Do you disagree with prominent progressive economists who have 
warned of the economic risks and irresponsibility of ARPA?

    Answer. I believe that the American Rescue Plan Act of 2021 (ARP) 
will return the U.S. economy to conditions of full employment in late 
2021 or early 2022 and view the risk of overheating or any other 
destabilizing outcome as low. The ARP was designed to bring an end to 
the pandemic by distributing vaccines, provide relief to the millions 
of American families whose lives continued to be disrupted by the 
pandemic, and deliver much-needed aid to hard-hit industries and State 
and local governments. These measures will ensure a rapid recovery back 
to pre-pandemic conditions. Indeed, growth this year is expected to be 
the strongest in decades.

    It is worth emphasizing that at the start of the administration, 
the risk of doing too little outweighed the risk of doing too much. 
Nearly 10 million jobs had been lost since April 2020, the course of 
the pandemic remained highly uncertain, and global growth prospects 
seemed sub-par and unlikely to provide a tailwind for the U.S. 
recovery. In my view, these risks justified the magnitude of the fiscal 
response, especially given that in the last two decades before the 
pandemic, inflation has run below the Federal Reserve's 2-percent 
target.

    A robust recovery--which I believe we are now seeing--will involve 
some degree of transitory inflation. In part, this reflects that fact 
that prices in some pandemic-impacted sectors like hotels, airlines, 
and restaurants actually fell in 2020 but are now moving back up to 
their pre-pandemic levels. In addition, elevated demand for goods like 
motor vehicles has interacted with global supply chain disruptions to 
cause some price increases. we expect the combined effects or reopening 
and higher demand to moderate in coming months, bringing inflation down 
closer to its underlying trend. The Federal Reserve has the tools to 
address inflation risks over the medium- and long-term. Inflation 
expectations have risen in recent months, but only after to falling to 
levels that were judged to be too low. We will continue to monitor 
inflation developments, but we see recent inflation readings as 
transitory and indicative of a robust recovery.

    Question. In a 2010 article on ``Taxes and Housing Prices,'' you 
wrote that ``. . . raising taxes on those in the top brackets could 
increase urban housing prices by as much as 10 percent, and even more 
in east and west coast cities where homes are most expensive. The 
drivers of this windfall: higher top rates on ordinary income and hikes 
in capital gains taxes. Obama's proposal to limit the benefit of 
itemized deductions to 28 percent could more than reverse this housing 
windfall. . . .''

    Your argument was that capital gains tax increases lead to 
increased value of the capital gains exclusion in housing. Similarly, 
increases in ordinary income tax rates, as you wrote, ``. . . would 
increase the value of owning a home, since as tax rates rise, so does 
the value of the mortgage interest deduction.'' So higher ordinary 
income tax rates, by your argument, will increase housing prices.

    There seem to be two conclusions from your analysis: one is that 
higher tax rates on upper earners and higher capital gains taxes, by 
enhancing the value of the mortgage interest deduction and the capital 
gains exclusion in housing, could lead to increases in housing prices. 
The second is that such ``windfalls'' could be offset through use, 
simultaneous with higher income and capital-gains taxes, of limits on 
benefits of itemized deduction, as President Obama had proposed, to ``. 
. . reverse this housing windfall.''

    The current administration is proposing higher capital gains taxes 
and higher income taxes for ``anyone'' earning $400,000 or more. Do you 
believe that, if implemented, the tax hikes would lead to higher 
housing prices, perhaps mostly at the high-end of housing valuations 
and, in turn, increase values of itemized deductions for upper earners 
that should then lead to consideration of limits on itemization in 
order to offset ensuing ``windfalls?''

    Answer. The study referred to in the question was written in 2010 
and used the most recent data available at the time, which was 
generally from around 2007. Evolutions in the housing market and other 
relevant data since that time make the specific conclusions of that 
modeling exercise slightly dated, as do moderate changes in the tax 
code (including, for example, the partial and temporary rollback of the 
mortgage interest deduction). However, the fundamental direction of the 
analysis holds: because housing is a tax-preferred asset, all else 
equal, raising taxes can increase its relative value while cutting 
taxes can lower it.

    Question. The Department of the Treasury recently issued an Interim 
Final Rule (31 CFR Part 35; RIN 1505-AC77) to implement the Coronavirus 
State Fiscal Recovery Fund and the Coronavirus Local Fiscal Recovery 
Fund established under the American Rescue Plan Act (ARPA). Part of the 
Rule involves Treasury's attempt to implement the invasive restriction 
ARPA places on States abilities to determine their own fiscal policies 
by not allowing Federal funds to be used to ``. . . either directly or 
indirectly offset a reduction in the net tax revenue of such State or 
territory resulting from a change in law, regulation, or administrative 
interpretation during the covered period that reduces any tax (by 
providing for a reduction in a rate, a rebate, a deduction, a credit, 
or otherwise) or delays the imposition of any tax or tax increase.''

    Through administrative fiat and interpretation, the Rule allows for 
some leeway and carve-outs for funds to be used for certain tax relief 
that the Treasury Department evidently finds acceptable, but bans 
others.

    In order to pass muster with Treasury, the rule says that a State 
or territory must ``identify and value'' tax revenue reductions in a 
given year ``based on estimated values produced by a budget model, 
incorporating reasonable assumptions.'' However, ``estimation 
procedures should not use dynamic methodologies,'' according to the 
rule, since Treasury believes its valuation scheme already adequately 
measures for macroeconomic growth. Moreover, according to the rule: 
``Relative to these dynamic scoring methodologies, scoring 
methodologies that do not incorporate projected effects of 
macroeconomic growth rely on fewer assumptions and thus provide greater 
consistency among States and territories.''

    While working at Treasury, were you involved in formulating the 
interim final rule related to ARPA's State and local recovery funds? If 
so, please describe what parts of the rule you worked on.

     Please describe in detail what you believe constitutes ``dynamic 
scoring methodologies.''

    Do you agree that Keynesian multiplier numbers are ``dynamic 
scoring methodologies,'' in that they measure cumulative (over time 
and, hence, dynamic) projected changes in economic measures resulting 
from an alteration in a policy parameter?

    Do you agree with the rule that ``scoring methodologies that do not 
incorporate projected effects of macroeconomic growth rely on fewer 
assumptions?'' If so, please explain in detail why and whether 
minimization of assumptions ought to be an objective for obtaining the 
best ``scores'' and econometric identification.

    The rule in more than one place refers to ``reasonable 
assumptions'' to be used in valuation estimation. Please describe what 
you believe to be ``reasonable assumptions,'' and what you believe to 
be unreasonable, with respect to identification of either direct or 
indirect effects on a State's net tax revenue resulting from a change 
in law, regulation, or administrative interpretation that reduces or 
delays any tax or tax increase?

    In the rule, Treasury identifies that tax revenue reductions 
stemming from a change in law, regulation, or administrative 
interpretation ``may also be reported based on actual values using a 
statistical methodology to isolate the change in year-over-year revenue 
attributable to'' tax changes that reduce tax revenue. As an economist, 
what would you advise to be acceptable statistical methodologies that a 
State could use to satisfy Treasury's requirements and objective of 
identification (in an econometric sense) and achieve econometric 
identification and consistent estimation?

    Answer. I was not deeply involved in formulating the interim final 
rule related to ARPA's State and local recovery funds. In addition, as 
to specific scoring methodologies referenced in the interim final rule, 
Treasury is in the midst of a notice and comment period for the rule, 
so I am not able to speak to those issues at this time. I look forward 
to being briefed on these issues should I have the honor of being 
confirmed.

    Question. The President and various administration officials have 
identified that, under the administration's tax proposals, ``nobody 
making under $400,000 a year'' will have their taxes increased. Nobody 
means that an individual is being discussed. Moreover, in the 
President's Social Security proposal with a cutoff for added taxes, 
that cutoff is at $400,000 for an individual.

    However, at various times, some administration officials have 
changed their description of the administration's stance to be that no 
``family,'' rather than individual, making less than $400,000 would 
face higher taxes. On Friday, March 26th, The Washington Post's fact 
checker wrote about the confusion caused by varying statements of 
policy intent by the administration, and how a switch to ``family'' or 
``household'' or the like would seem to renege on a promise made by the 
President during his campaign for election. The fact checker concluded 
by writing that ``Despite the confusion spawned by various 
administration references to `families,' the promise [that nobody, 
meaning individual, earning less than $400,000 would face a tax 
increase] appears to remain intact.'' I have questions to help clarify 
some unnecessary confusion.

    Given that you are currently employed and working at Treasury, is 
your understanding that the current stance of the administration with 
respect to taxation is that no individual making under $400,000 will 
face higher taxes if the administration's tax hike proposals are 
enacted? Or, is it household, rather than individual? Or, is it tax 
filing unit, rather than individual?

    Answer. The administration's tax proposals are focused on creating 
equity in the tax system by ensuring that corporations and wealthy 
individuals pay their fair share, to support necessary investments in 
American workers and families. The President has consistently committed 
to making sure that no taxpayer with income under $400,000 experiences 
tax increases as a result of the administration's proposals.

    Question. There have been repeated references made by the 
administration to individual taxpayers and corporations paying ``their 
fair share.'' (For example, see page 1 of the April 2021 U.S. 
Department of the Treasury ``The Made in America Tax Plan.'' It 
appears, though, that the plan envisions enactment of proposals that 
would merely move the country ``Toward a Fairer Tax System'' (p.5)).

    As a prospective adviser to the administration on economics, please 
define what constitutes a ``fair share'' and the appropriate measure to 
use to determine whether or not an individual is paying their fair 
share.

    Given your definition and measure, for tax year 2021, what is the 
fair share for a single filer on taxable income: up to $9.950; $9,951 
to $40,525, $40,526 to $86,375, $86,376 to $164,925, $164,926 to 
$523,600, over $523,600?

    Please define what constitutes a ``fair share'' and the appropriate 
measure to use to determine whether or not a corporation is paying its 
fair share.

    Why do you believe that the Made in America Tax Plan proposes only 
to move ``toward'' a ``fairer'' tax system, thereby foregoing movement 
to a fully fair system and leaving fairness gains unfulfilled to remain 
on the table for future tax policy modifications?

    Answer. The concept of ``fair share'' depends on the context of the 
specific tax and an individual's or corporation's specific 
circumstances. One particular measure relates to the concept of 
horizontal equity, which compares tax burdens borne by taxpayers of 
like circumstances. The concept of ``fair share'' can also depend on 
macroeconomic circumstances, as the appropriate measure of a tax code's 
fairness can depend on key economic trends such as the labor and 
capital share, or wage trends at various points in the wage 
distribution. The concept of ``fair share'' can also relate to the gap 
between owed and paid tax liability, with individuals who evade taxes 
explicitly defined as individuals who do not pay their fair share. The 
unfairness of evaded taxes was one of the motivations behind the tax 
compliance proposal advanced in the Biden administration tax agenda.

    Question. The Made in America Tax Plan, outlined by Treasury in an 
April 2021 document, identifies a proposal of ``replacing fossil fuel 
subsidies with incentives for clean energy production.'' The plan 
proposes to ``remove subsidies for fossil fuel companies.''

    Please identify your understanding of what subsidies the plan would 
remove, and how they differ from like ``subsidies'' in place for other 
companies performing similar activities but not involving ``fossil 
fuels.''

    Answer. As detailed in the ``General Explanations of the 
Administration's Fiscal Year 2022 Revenue Proposals'' (the Green Book) 
released at the end of May, the administration is proposing to remove 
13 specific subsidies for fossil fuel production. The proposal would 
repeal: (1) the enhanced oil recovery credit for eligible costs 
attributable to a qualified enhanced oil recovery project; (2) the 
credit for oil and gas produced from marginal wells; (3) the expensing 
of intangible drilling costs; (4) the deduction for costs paid or 
incurred for any tertiary injectant used as part of a tertiary recovery 
method; (5) the exception to passive loss limitations provided to 
working interests in oil and natural gas properties; (6) the use of 
percentage depletion with respect to oil and gas wells; (7) 2-year 
amortization of independent producers' geological and geophysical 
expenditures, instead allowing amortization over the 7-year period used 
by integrated oil and gas producers; (8) expensing of exploration and 
development costs; (9) percentage depletion for hard mineral fossil 
fuels; (10) capital gains treatment for royalties; (11) the exemption 
from the corporate income tax for publicly traded partnerships with 
qualifying income and gains from activities relating to fossil fuels; 
(12) the Oil Spill Liability Trust Fund excise tax exemption for crude 
oil derived from bitumen and kerogen-rich rock; and (13) accelerated 
amortization for air pollution control facilities.

    These provisions of the tax code are specific to the oil, gas, and 
coal industries. The objective of the plan is to bring the tax 
treatment of oil, gas, and coal producers back in line with other 
firms. These tax advantages are referred to variously as subsidies, tax 
expenditures, loopholes, or tax advantages.

    Question. If enacted, do you believe that the plan would lead to 
higher gas prices at the pump in the near term, defined as the period 
2022-2024?

    Answer. No, not noticeably.

    Question. If so, would you have any concern that such an effect 
would have disproportionate adverse effects on low- to middle-income 
workers whose expenditures on ``fossil fuel'' related consumables such 
as gasoline and heating fuel tend to be higher shares of their incomes 
than for upper earners?

    Answer. Please see my response to the question above.

    Question. The Tax Cuts and Jobs Act imposed a cap of $10,000 on the 
State and local (SALT) deduction, reducing tax benefits and what some 
call a ``tax expenditure'' which accrues disproportionately in favor of 
upper earners. Do you support proposals to lift or eliminate the 
$10,000 cap on the State and local tax (SALT) deduction?

    Answer. I believe in an equitable tax system where wealthy 
taxpayers and corporations pay their fair share. With respect to SALT, 
as Secretary Yellen has said, it will be important to develop a full 
understanding of the impact of the cap on State and local governments 
and those who rely on their services. As you know, repealing the SALT 
cap would come with potentially significant costs, and understanding 
these and their distribution is important. This is an issue I am eager 
to work on with you and your colleagues.

    Question. Given that an asset's tax basis is not updated for 
inflation, will the administration's proposals to tax capital gains at 
the same rate as ordinary income, generally eliminate the step-up in 
tax basis at death, and require immediate income recognition with 
respect to inherited assets result in taxpayer's paying tax on phantom 
gain--that is, simple inflation?

    Why does the administration consider it ``fair'' for taxpayers to 
pay tax on inflation with respect to their assets?

    Answer. The administration's proposed capital gains reforms, 
including those mentioned above, would retain substantial preferences 
for capital income--including, for example, the ability to time 
realization during life, zero or preferred capital gains tax rates for 
the vast majority of American families, no taxation on the first $2 
million in gains at death for every married taxpayer in the country 
(increased to a maximum of $2.5 million when including the exclusion 
for gains to owner-
occupied housing), and other preferences and considerations for family-
owned businesses and illiquid assets. In sum, the bulk of Americans 
would continue to pay low or no taxes on their capital gains.

    Question. The American Economic Association, of which you have been 
a member and Secretary Yellen has served as 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.

    If confirmed, you may be assigned to work on the annual trustees' 
reports on the financial conditions and outlook for Social Security and 
Medicare trust funds; you may have already been working on the reports.

    The 2019 Technical Panel on Assumptions and Methods, formed by the 
Social Security advisory board, wrote that ``The Panel recommends 
providing and supporting greater external access to the projection 
models used to produce the trustees report.''

    Do you agree that policy, such as the one adopted by the American 
Economic Association, of open sourcing and external accessibility of 
data and code used in published analyses is also good public policy 
that 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. On page 32 of the 2019 Technical Panel on Assumptions and 
Methods, the panel made the following recommendation under Section 3.2, 
``Increase transparency of the projections,'' Presentation 
Recommendation 8: ``The Panel recommends providing and supporting 
greater external access to the projection models used to produce the 
Trustees Report.'' The panel writes the following:

        OCACT regularly fields questions about its modeling techniques 
        and assumptions. Social scientists have recently increased 
        their focus on transparency of methods, while the open source 
        movement has gained momentum. Researchers would benefit from 
        the ability to assess OCACT's code directly. OCACT could post 
        its models' full code, along with adequate documentation, on 
        SSA's public website. SSA could allow researchers to apply for 
        access to the underlying data, similar to the Internal Revenue 
        Service call for proposals to use the IRS administrative data. 
        Social Security could also fund research projects on OCACT's 
        model. In the long run, we believe public trust in these 
        projection methods would increase if the methods were subject 
        to scrutiny and rigorous debate informed by public access. 
        Greater scrutiny from researchers also could help improve the 
        models in the long run.

    The full text of the 2019 Technical Panel Presentation 
Recommendation Number 8 is directed at Social Security's Office of the 
Chief Actuary and the Social Security Administration rather than the 
Social Security and Medicare trustees.

    However, I generally support efforts to explore possibilities for 
improvements in transparency and public access.

    For your convenience, already existing documentation on some of the 
Social Security's Office of the Chief Actuary's projection models is 
provided on their website, available here for the long-range OASDI 
projection model: https://www.ssa.gov/oact/TR/2020/
2020_LR_Model_Documentation.pdf.

    Here for the short-range OASDI projection model: https://
www.ssa.gov/oact/NOTES/pdf_studies/study121.pdf.

    Here for the demographic assumptions: https://www.ssa.gov/oact/TR/
2020/2020_Long-Range_Demographic_Assumptions.pdf.

    Here for the ultimate economic assumptions: https://www.ssa.gov/
oact/TR/2020/2020_Long-Range_Economic_Assumptions.pdf.

    And here for the disability assumptions: https://www.ssa.gov/oact/
TR/2020/2020_Long-Range_Disability_Assumptions.pdf.

    Question. Have you worked on the trustees' reports for the Social 
Security and Medicare trust funds at any time this year?

    Answer. I have had only very limited involvement with the Social 
Security and Medicare trustees reports this year.

    Question. The Social Security Act requires that trustees' reports 
for the Social Security and Medicare trust funds be issued annually, 
and no later than April 1st of each calendar year. According to a July 
2019 report by the U.S. Government Accountability Office (GAO), 2008 
was the last year in which the statutory deadline had been satisfied. 
The 2020 report was 21 days overdue, missing the deadline by fewer days 
than the past decade's average, yet still late.

    The 2019 GAO report recommended that the Secretary of the Treasury, 
as chairperson of the boards of trustees of the Social Security and 
Medicare trust funds: work to improve management of the report 
development schedule to provide trustees reports to Congress by the 
statutory deadline; and ``establish a policy to inform congressional 
committees of jurisdiction when the trustees determine that the reports 
are expected to miss the issuance deadline.'' While committees have 
received an email from Treasury officials identifying that this year's 
reports will be delayed for some indefinite period, we are unaware that 
any policy has been developed or followed.

    Will you commit to working to ensure that the Treasury Secretary 
follows GAO's recommendation to establish a policy to inform 
congressional committees of jurisdiction when trustees determine that 
the reports are expected to miss the issuance deadline?

    Answer. A policy has already been established to inform 
congressional committees of jurisdiction by electronic communication 
when it is determined that the reports are expected to miss the 
issuance deadline pursuant to the recommendation of the Government 
Accountability Office. For the 2021 reports, Treasury informed the 
committees of expected delays in the issuance of the reports on March 
19, 2021.

    Question. Will you commit to working to ensure that as part of that 
policy, the Treasury Secretary, on a regularly scheduled basis (e.g., 
every 15 days following determination that the issuance deadline will 
not be met), provide updated projections of when the reports will be 
issued?

    Answer. A policy has been established to inform congressional 
committees of jurisdiction by electronic communication when it is 
determined that the reports are expected to miss the issuance deadline 
pursuant to the recommendation of the Government Accountability Office. 
If confirmed, I would be happy to promote Treasury's communication with 
Congress regarding the status of the reports.

    Question. Will you commit to working to ensure that the Treasury 
Secretary and all trustees improve scheduling of trustee meetings in 
order to produce reports on or before the statutory issuance deadline?

    Answer. As Treasury indicated in its response (dated June 27, 2019) 
to the GAO report, Treasury takes seriously the April 1st reporting 
deadline. During the course of preparation of both the 2020 and 2021 
trustees' reports, Treasury made every attempt possible to move work on 
the reports along without sacrificing the quality of the reports.

    However, Treasury does not have the authority to impose particular 
outcomes or to require that decisions be made within specified 
timeframes. In particular, the preparation of the 2021 trustees' 
reports has inevitably been affected by the crisis response to the 
pandemic, by the presidential transition (including the turnover of 
trustees and staff), and by work to fully understand the effects of the 
pandemic on the trust funds, particularly in the near term.

    Question. Will you commit to providing the committee with source 
code used to make projections of the future financial conditions of the 
Social Security and Medicare trust funds, in order to improve 
transparency over methods and assumptions used to make projections of 
the financial conditions of trust funds into which American workers 
have paid into over their lifetimes and have entrusted to the Federal 
Government?

    Answer. Please see my written response to the question above. Any 
source code would reside with the Office of the Chief Actuary, which is 
an office within the Social Security Administration, and with the 
Office of the Actuary, which is an office within the Centers for 
Medicare and Medicaid Services.

    Question. If confirmed, you would likely work on the annual 
trustees' reports on the Social Security trust funds. Please read the 
Statement of Actuarial Opinion in both the 2014 and 2015 Annual Reports 
of the Board of Trustees of the Federal Old-Age and Survivors Insurance 
and Federal Disability Insurance Trust Funds (available at the webpage 
of the Social Security Administration's Office of the Chief Actuary) 
and identify:

    Whether you believe that the Actuarial Opinion of the 2014 report 
points to assumptions made in the trustees' report of that year that in 
any sense played up the potential future insolvency of Social Security, 
and if so, what those identified assumptions were and how they 
accentuated insolvency in the Actuary's opinion.

    Answer. The statement of actuarial opinion in the 2014 report under 
the Federal Budget Accounting heading includes the following:

        This report focuses on the actuarial status of the OASI and DI 
        Trust Funds and includes important information on (1) the years 
        in which trust fund asset reserves are projected to be depleted 
        and (2) the degree to which benefits scheduled in the law would 
        no longer be fully payable on a timely basis after reserve 
        depletion. However, the footnote on page 60 of this report 
        directs the reader to an appendix in the Medicare Trustees 
        Report, which States, ``The trust fund perspective does not 
        encompass the relationship between the Medicare and Social 
        Security trust funds and the overall Federal budget.'' The 
        reader of this report should consider this ``overall'' Federal 
        unified budget perspective with care because the assumptions 
        underlying unified budget accounting are inconsistent with the 
        assumptions of trust fund accounting.

    The text on page 60 of the 2014 report is as follows:

        The trust fund ratio serves an additional important purpose in 
        assessing the actuarial status of the program. If the projected 
        trust fund ratio is positive throughout the period and is 
        either level or increasing at the end of the period, then 
        projected adequacy for the long-range period is likely to 
        continue for subsequent reports. Under these conditions, the 
        program has achieved sustainable solvency. [Footnote 1]

    Footnote 1 reads:

        As noted in greater detail in the 2014 Medicare Trustees 
        Report, ``The trust fund perspective does not encompass the 
        interrelationship between the Medicare and Social Security 
        trust funds and the overall Federal budget.'' For an 
        explanation of that relationship, see appendix F of the 2014 
        Medicare Trustees Report.

    My view is that the statement of actuarial opinion in the 2014 
OASDI Trustees Report to which this question is referring is the 
discussion of Footnote 1 on page 60 of the that report, as excerpted 
above. Footnote 1 is appended to a paragraph in the 2014 OASDI report 
discussing the trust fund ratio. I believe this statement of actuarial 
opinion refers to this part of the actuarial statement, ``(1) the 
techniques and methodology used herein to evaluate the financial and 
actuarial status of the Federal Old-Age and Survivors Insurance and 
Disability Insurance Trust Funds are based upon sound principles of 
actuarial practice and are generally accepted within the actuarial 
profession'' rather than this piece of the actuarial statement, ``(2) 
the assumptions used and the resulting actuarial estimates are, 
individually and in the aggregate, reasonable for the purpose of 
evaluating the financial and actuarial status of the trust funds, 
taking into consideration the past experience and future expectations 
for the population, the economy, and the program.''

    With regard to part (1) of the actuarial statement referenced 
above, I regard this statement of actuarial opinion to be a clarifying 
statement by the Chief Actuary of Social Security discussing his views 
regarding the trust fund accounting concept that the trust fund ratio 
embodies as calculated and presented in the 2014 OASDI Trustees Report 
and the unified budget perspective as discussed in appendix F of the 
2014 Medicare Trustees Report.

    Question. And whether you believe that the actuarial opinion of the 
2015 report identifies questionable elements within the trustees' 2015 
report, and whether you believe that the actuary's opinion represents a 
public rebuke of the report.

    Answer. Please see my answer to the question above. Additionally, 
please note that the statement of actuarial opinion section of the 
OASDI trustees' report is outside the purview of the OASDI program 
trustees.

    Question. President Biden has proposed to subject earnings on 
taxpayers with more than $400,000 (unindexed) in wages to Social 
Security and Medicare payroll taxes, with a ``donut hole'' between the 
current ``tax max'' on earnings subject to payroll taxes and $400,000 
that would close over time as the wage-indexed tax max grows into and 
eventually above the unindexed $400,000 threshold. So, eventually, all 
wage earnings become subject to payroll taxes. However, presumably to 
avoid paying upper earners more in Social Security and other benefits, 
for every dollar of payroll taxes paid on earnings above the $400,000 
threshold, there is no commensurate Social Security benefit. This, of 
course, breaks the longstanding, traditional tie between paying in to 
the Social Security System and obtaining a benefit in return--the 
``earned benefit'' principle.

    Indeed, an old Franklin Roosevelt quote from 1941 is often invoked 
to reinforce the earned benefit principle 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 many Social Security advocates, 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.''

    Do you support upholding the earned benefit principle and not 
allowing a decoupling of payment into the Social Security system and 
commensurate benefit receipt?

    Alternatively, do you support violating the earned benefit 
principle by breaking the link for any FICA taxpayer between paying 
into the system and receipt of a commensurate benefit?

    Answer. While I am aware of certain members of Congress proposing 
Social Security reforms that match the one described in the question, I 
am not aware of President Biden proposing either an effective closure 
of exempted wages or specifically designating whether higher payroll 
taxes would or would not be matched with a change in benefits (i.e., 
preservation of the ``earned benefit principle''). In general, I am 
concerned about the long-term solvency of the Social Security program, 
and support reform which puts the program on a long-term path to fiscal 
solvency. Reforms should be judged on the extent to which they preserve 
the system, enhance efficiency, and protect American workers who have 
paid into the system for decades.

    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 Federal budget and the consolidated Federal budget?

    Answer. Future deficits are driven by a wide range of factors. In 
the case of Social Security, the extent to which the program impacts 
future deficits on-budget and unified deficits depends both on the 
funding status of the program and estimates of the economic 
implications of instituting changes to the program. For example, 
eliminating Social Security--a step that I do not support--would 
steeply raise poverty rates among Americans of all ages and could 
result in substantially higher expenditures for other social programs. 
However, I have not undertaken a robust modeling exercise regarding the 
impact of Social Security on Federal deficits.

    Question. Researchers Valerie Ramey and Sarah Subairy wrote, in a 
2015 VOXEU, CEPR article on government spending 
``multipliers'' and noted evidence from U.S. historical data, that:

        Overall, we find no evidence that the multiplier on government 
purchases is higher during high unemployment States. Most estimates of 
the multiplier are between 0.6 and 1.

        In addition, we do not find convincing evidence of 
significantly higher multipliers during periods at the zero lower bound 
or constant interest rates.

    They write: ``Our findings suggest that there is no evidence that 
fiscal multipliers differ by the amount of slack in the economy or the 
degree of monetary accommodation. These results imply that, contrary to 
recent conjecture, government spending multipliers were not necessarily 
higher than average during the Great Recession. Do you agree with the 
analysis and conclusions; and, if not, please describe why you believe 
the analysis is incorrect.

    Answer. On this question, I do not regard the Ramey and Zubairy 
analysis as definitive.

    An extensive literature in empirical macroeconomics has sought to 
measure the government spending multiplier. This literature uses a 
variety of empirical methods, some of which come to different 
conclusions about the size of the government multiplier. For example, 
Nakamura and Steinsson (2014), using U.S. State-level data on military 
procurement, find a government spending multiplier of 1.5, well above 
the Ramey and Zubairy estimate. Miyamoto, Nguyen, and Sergeyev (2018) 
find a government spending multiplier of 1.5 when interest rates are at 
the zero lower bound in the case of Japan. Chodorow-Reich (2019) 
provides a comprehensive review of government spending multipliers, 
with cross-sectional evidence supportive of higher multipliers and 
larger responses in periods of greater slack.

    It is also worth noting that the Ramey and Zubairy analysis looks 
at government spending multipliers during World War II. Extensive 
rationing of consumer goods during the war may lower their estimate of 
the government spending multiplier despite a high degree of monetary 
accommodation.

    Lastly, this literature is largely silent on the macroeconomic 
effect of transfers. Much of the fiscal response to the pandemic has 
come in the form of transfers rather than changes in direct government 
consumption. Overall, there continues to be active discussion about the 
size of the government spending multiplier and, more generally, the 
effects of fiscal policy, and how these effects may differ in periods 
of slack versus full employment.

                                 ______
                                 
                 Questions Submitted by Hon. John Thune

    Question. At the hearing, you stated that you believe the Treasury 
Department's plan to raise $700 billion over the next decade was too 
low of estimate. As you know, the administration proposed raising $700 
billion over the next decade largely through new tax compliance 
measures and $80 billion of new IRS funding.

    If the Treasury Department's projection was incorrect, as you 
assert, what is the correct number in your estimation and how do you 
arrive at that figure?

    Answer. Career economists in Treasury's Office of Tax Analysis 
estimated that the administration's compliance proposals will generate 
$700 billion over the course of the next decade. However, as the recent 
Treasury report makes clear, these estimates are thought to be 
conservative for several reasons. For example, the revenue potential of 
additional resources is based on IRS return on investment (ROI) 
estimates that only exist for adjustments detected through current 
enforcement-related activities. Benefits of other foundational changes 
in tax administration, like IT and taxpayer service improvements, are 
not accounted for. Additionally, although revenue estimates for 
increased information reporting includes the effects of this regime on 
voluntary compliance, estimates for increased enforcement actions do 
not account for deterrent effects, which are known to be quite 
significant.

    Question. The nonpartisan Congressional Budget Office estimated 
that increasing IRS funds by $40 billion over 10 years would increase 
revenues by $103 billion, resulting in a net $63 billion decrease in 
the deficit. It is not to say that better utilized or enhanced 
resources could not help find real money, but the projected return on 
investment is vastly different than the Treasury Department's 
projections--and deserves clarification as the administration portrays 
the figures as offsets for new spending proposals.

    Do you disagree with CBO's estimate? Why or why not?

    Answer. It is difficult to compare the administration's compliance 
initiatives to previous estimates because of differences in scale and 
scope of the comprehensive proposal the President put forth in the 
American Families Plan. Estimates from career economists at the Office 
of Tax Analysis suggest that providing the IRS the resources it needs 
to address sophisticated tax evasion and introducing a comprehensive 
financial reporting regime would raise $700 billion in additional 
revenue over the course of a decade: $240 billion in net tax revenue 
from $80 billion in additional IRS resources; and $460 billion from a 
new financial reporting regime.

    Question. Congressional Budget Office rules prohibit scoring hoped-
for but entirely certain revenue from enforcement proposals. Does the 
Treasury Department account for CBO's scorekeeping rules with its $700 
billion projection? Does your higher estimate account for CBO's 
scorekeeping rules? If not, how would the scorekeeping rules alter each 
projection and by what amount?

    Answer. Many in the academic and policymaking community have 
written about the budgetary scorekeeping rules and how they relate to 
tax compliance efforts. The nature of these rules is a matter on which 
those in the official scorekeeping community--the OMB, House and Budget 
Subcommittees, and CBO--will be best positioned to address. Should I 
have the privilege of being confirmed, in my role I look forward to 
working with these groups and you and your colleagues on this important 
question.

                                 ______
                                 
                Questions Submitted by Hon. Rob Portman
    Question. I am very concerned by the recent inflation indicators we 
are seeing. As you know, a Congressional Budget Office report earlier 
this year predicted that we would hit full recovery by the middle of 
2021 without additional spending. Yet, we are seeing even more spending 
that would continue into next year.

    Are you concerned about rising inflation, and how does that change 
your assessment of additional Federal spending?

    Answer. I believe that the current inflation rates we are seeing 
are indicative of a robust recovery and likely transitory due to the 
combined effects of reopening the economy and supply chain disruptions 
that are impacting prices in some categories of durable goods, like 
motor vehicles. We expect monthly inflation rates to moderate in the 
coming months as the effects of stimulus payments wane, supply chain 
disruptions ease, and price normalization in pandemic-impacted sectors 
runs its course.

    I believe that the administration's American Jobs Plan and American 
Families Plan will increase the productive capacity of the economy by 
improving physical infrastructure, reallocating workers to higher-
paying/higher-productivity industries like manufacturing, and raising 
labor force participation by addressing the childcare and eldercare 
issues that make it harder for Americans to work. By increasing the 
economy's capacity, the risks of an undesirable future increase in 
inflation will be lower, as it means the economy can grow faster and 
for longer before resource utilization tightens. Additionally, both 
plans are paid for over time, limiting the near-term increase in 
deficits and lowering deficits in the medium term.

    Question. I was interested to learn in your writings of your 
interest in retirement security--particularly as it relates to lifetime 
income. You may know that Senator Cardin and I have a sweeping 
bipartisan retirement bill. Amongst other changes, our bill reforms 
Qualified Longevity Annuity Contracts (``QLACs'') and makes it easier 
for retirees to purchase annuity products. This seems to dovetail well 
with the work you did at Brookings.

    Can you discuss why lifetime income--particularly later in life--is 
so crucial and the ways the private sector can play a role here?

    Can you commit to working with me on this if confirmed to you role?

    Answer. Throughout my career I have been an ardent supporter of 
more robust markets for lifetime income products as one strategy for 
strengthening retirement security. My focus on this topic was driven, 
in part, by the belief that one of the greatest risks in retirement is 
uncertain lifespans, and this uncertainty can be addressed through 
guaranteed lifetime income. Naturally, Social Security plays a critical 
role in the provision of this income, but many workers may seek 
additional opportunities to increase their level of guaranteed income 
beyond their Social Security benefits--and for these workers increased 
access to lifetime income products, especially those that are 
specifically tailored to address longevity risk, can be welfare 
enhancing. This view is in line with the perspective of many other 
economists who study aging and retirement policy. If confirmed, I look 
forward to working with you on this critical issue.

                                 ______
                                 
               Questions Submitted by Hon. James Lankford
    Question. We've seen comments from several prominent progressive 
economists warning of the massive size of the Democrats' American 
Rescue Plan--with Larry Summers even warning that this legislation was 
the ``least responsible macroeconomic policy we've had in the last 40 
years,'' and that ``now, the primary risk to the U.S. economy is 
overheating--and inflation.''

    I'm concerned that the level of stimulus--especially as discussion 
of spending trillions more on infrastructure and in the President's 
Budget continues--could lead to inflation and rising interest costs, 
and ultimately stall economic recovery.

    Just weeks ago, we saw that the Consumer Price Index (CPI) for 
April 2021 was up 4.2 percent from that time last year. This is the 
sharpest year-to-year increase since September of 2008. I understand 
that in April of 2020 we were in the midst of the COVID-19 pandemic, 
and that we need to be mindful of that when drawing comparisons. 
However, I also know that Americans, and my Oklahoma constituents, are 
feeling these rising prices directly, as food and household energy 
costs continue to rise, and I worry that some of these effects may not 
be temporary.

    Do you agree with Summers and others who warn of these economic 
risks and the irresponsibility of such high spending?

    Are you concerned by this level of inflation? If not, how long do 
you expect these high rates to continue?

    Do you think corresponding action will be necessary?

    How can we contain overheating risks and promote sustainable 
recovery and growth?

    Answer. A robust recovery--which I believe we are now seeing--will 
involve some degree of transitory inflation, as pandemic-impacted 
sectors that saw price decreases in 2020 return prices to their pre-
pandemic levels. Moreover, elevated demand for goods along with supply 
chain disruption due to the pandemic have led to some price increases 
for goods like motor vehicles. I expect the combined effects or 
reopening and higher demand due to stimulus payments to moderate in 
coming months, bringing inflation rates down. In particular, I expect 
monthly inflation rates to return to levels consistent with the Fed's 
2-percent PCE average inflation target later this year. To be clear, I 
recognize that even transitory inflation, especially for essential 
goods, can be difficult for American families.

    Inflation expectations remain within historical ranges, and the Fed 
retains the tools to address any inflation risks that materialize in 
the medium term.

    Overall, I believe the American Rescue Plan was fiscally 
responsible legislation that sought to quickly end the pandemic and 
restore the economy to full employment. At the start of the year, 
nearly 10 million jobs had been lost since April 2020, and the course 
of the pandemic remained highly uncertain. Under these conditions, the 
risk of doing too little outweighed the risk of doing too much. The 
American Jobs Plan and American Families Plan pose limited inflationary 
risk, since these proposals are fully paid for, phase in over the 
course of multiple years, and meaningfully increase economic potential. 
Together, these plans will boost productivity and reduce the odds of 
undesirable future inflation by investing in infrastructure, 
reallocating labor to higher-paying/higher- productivity industries, 
and increasing labor force participation by addressing longstanding 
childcare and eldercare challenges that serve as a barrier to work.

    In assessing the risks, it also important to keep in mind that 
prior to the pandemic, inflation had run below the Federal Reserve's 2-
percent target for a prolonged period and inflation expectations were 
widely regarded as too low. In my view, the temporary price increases 
we are seeing today as the economy rapidly reopens will not leave a 
lasting imprint on long-run inflation dynamics.

                                 ______
                                 
                 Question Submitted by Hon. Todd Young
    Question. The Social Impact Partnership to Pay for Results Act 
(SIPPRA), bipartisan legislation that I led with Senator Bennet and was 
enacted in early 2018, created a new Federal outcomes fund at the 
Department of Treasury, which you would oversee as the Assistant 
Secretary for Economic Policy. State and local jurisdictions across the 
country applied for SIPPRA funds. Applications were due on May 22, 
2019. That date is significant because, as of this hearing, it was more 
than 2 years ago.

    After thoroughly reviewing these applications, a bipartisan 
commission recommended eight finalists for outcomes-based funding 
awards. Yet despite a statutory deadline of late November 2019 for the 
Treasury Department to announce its first round of awards, 2 years 
later, only one award has been announced.

    The Federal Government has now taken eight times longer to review 
applications than applicants took to create projects and craft 
proposals. The Federal interagency review process, after the Commission 
finished its review process, now stretches into its nineteenth month. 
At least one finalist, a project from my home State of Indiana, exited 
the process due to this delay.

    If confirmed, what steps will you take to avoid further unnecessary 
delays, and ensure that this outcomes fund lives up to the full 
potential envisioned in the original bipartisan legislation?

    Answer. Prior to serving at the Treasury Department as a counselor 
to Secretary Yellen, I served for several years as the chief economist 
to a non-partisan evidence-based policy group that advocated for 
programs, like SIPPRA, that more closely tie programmatic outcomes to 
funding. I remain a supporter of these approaches and hope to have the 
opportunity to work to ensure effective implementation of the promising 
program.

                                 ______
                                 
  Prepared Statement of J. Nellie Liang, Ph.D., Nominated to be Under 
       Secretary for Domestic Finance, Department of the Treasury
    Chairman Wyden, Ranking Member Crapo, and members of the committee, 
thank you for the opportunity to appear before you today. I am honored 
to have been nominated by President Biden to be Under Secretary for 
Domestic Finance at the Department of the Treasury, and by the trust of 
Secretary Yellen.

    I am grateful to the committee for considering my nomination. I am 
also grateful for the support of my husband of 37 years, Ken Howard, 
who is here with me today, and my children, Greg and Kim. I would also 
like to recognize my parents, who immigrated to this country many 
decades ago, with very little beyond their values. But they believed 
that in this country, if their children went to school, worked hard, 
and committed to family and community, they would have many 
opportunities to contribute to this country's potential and share in 
its prosperity.

    I am an economist by training and have spent many years in public 
service. I have studied and have seen up close how financial 
institutions and financial markets affect economic and financial 
stability. I am committed to applying the insights from this 
experience, as well as from data, research, and broad outreach, to 
policymaking.

    The pandemic revealed fragilities in the economy, especially in 
some communities that were least able to bear the burden. It also 
revealed fragilities in parts of our financial system. If confirmed, I 
will work to support the President's and the Treasury Secretary's 
priorities to promote a financial system that will lead to more 
sustainable and equitable economic growth.

    In doing so, I will build on the strengths of the U.S. financial 
system, which is the world's strongest, providing trillions of dollars 
of credit to households, businesses, and governments each year to 
support their spending and investments. The system has demonstrated 
time and again its ability to adapt to changes in the demand for 
services and in technology, bringing about significant changes in how 
financial services are delivered. Recent developments in digital assets 
have the potential to be even more transformative for financial 
services.

    If confirmed, I look forward to working with members of this 
committee and others to ensure that the evolving financial system 
continues to meet the needs of the American people. I will work to 
improve credit access to underserved communities, including through the 
implementation of various programs at Treasury that provide both 
capital and technical assistance to small businesses and low-income 
communities. In addition, while our dynamic financial system spurs 
growth, it can also lead to significant regulatory gaps over time. I 
will work to ensure that we are adopting policies that recognize these 
changes, to ensure consumers and investors are informed and protected, 
and that risks to financial stability are mitigated.

    In addition, a critical responsibility for Treasury is to manage 
the costs of government financing. The Treasury securities market is 
the deepest, most liquid market in the world. The country benefits from 
the special attributes of Treasury securities, and I believe it is 
critical that we ensure that the Treasury market operates well in 
periods of stress. If confirmed, I will endeavor to provide an 
assessment of changes in this market that have arisen from 
technological advances and shifts in market participants' behavior, and 
recommend policies, as needed, to ensure a resilient Treasury 
securities market.

    In short, if I were to have the honor of serving in this role, it 
will be my priority to promote an efficient and stable financial system 
that can meet the needs of a dynamic economy. I recognize that this 
effort will take constant communication with the members and staff of 
this committee. I very much look forward to working closely with all of 
you and your colleagues to accomplish these goals.

    Thank you again for the privilege of appearing before you today, 
and I look forward to answering your questions.

                                 ______
                                 

                        SENATE FINANCE COMMITTEE

                  STATEMENT OF INFORMATION REQUESTED 
                               OF NOMINEE

                      A. BIOGRAPHICAL INFORMATION

 1.  Name (include any former names used): Jean Nellie Liang.

 2.  Position to which nominated: Under Secretary for Domestic Finance, 
Department of Treasury.

 3.  Date of nomination: April 22, 2021.

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

 5.  Date and place of birth: October 23, 1957; Chicago, Illinois.

 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):

        Rich Central High School, 1971-1975, Diploma received June 
        1975.

        University of Notre Dame, B.A., 1975-1979, Degree received May 
        1979.

        University of Maryland, Ph.D., Economics, 1981-1986, Degree 
        received May 1986.

 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):

        Counselor, U.S. Department of Treasury, January 25th to 
        present.

        Senior Fellow, Brookings Institution, Washington, DC, 2017 to 
        present.

        Lecturer, Yale University, School of Management, New Haven, CT, 
        2018 to present.

        Visiting Scholar, International Monetary Fund, Washington, DC, 
        2017 to January 2021.

        Academic Advisor, Financial Stability Board, TBTF project, 
        Basel, Switzerland, June 2019 to January 2021.

        Consultant, Capula Investment Management, Greenwich, CT, 
        September 2020 to January 2021.

        Economist, Federal Reserve Board of Governors, Washington, DC 
        1986-2017.
            Economist, Division of Research and Statistics, 1986-1996.
            Chief, Capital Markets, Division of Research and 
        Statistics, 1996-2000.
            Assistant Director, Division of Research and Statistics, 
        2000-2006.
            Associate Director, Division of Research and Statistics, 
        2006-2010.
            Director, Division of Financial Stability, 2010-2017.

        Analyst, Wharton Econometrics Forecasting Association, 
        Washington, DC 1979-1980.

        Analyst, Data Resources Inc., Washington, DC, 1980-1981.

        Research Associate, Federal Trade Commission, Washington, DC 
        1985-1986.

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):

        Counselor, U.S. Treasury, January 2021 to present.

        Economist, Federal Reserve Board of Governors, Washington, DC 
        1986-2017.
            Economist, Division of Research and Statistics, 1986-1996.
            Chief, Capital Markets, Division of Research and 
        Statistics, 1996-2000.
            Assistant Director, Division of Research and Statistics, 
        2000-2006.
            Associate Director, Division of Research and Statistics, 
        2006-2010.
            Director, Division of Financial Stability, 2010-2017.

        Member of Congressional Budget Office Economic Advisory Panel, 
        2016 to 2020.

        Federal Trade Commission, Research Associate, 1985-1986.

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):

        Consultant to Financial Stability Board on Too-Big-to-Fail 
        project, June 2019 to January 2021.

        Consultant to Capula Investment Management, September 2020 to 
        January 2021.

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):

        American Economic Association, member, intermittent 1986 to 
        present.

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.

       None.

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):

       None.

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):

        I have done my best to identify titles, publishers, and dates 
        of books, articles, reports, and other published materials, 
        including a thorough review of personal files and searches of 
        publicly available electronic databases. If additional 
        materials are identified, they will be provided promptly to the 
        committee.

        Adrian, Tobias, Federico Grinberg, Nellie Liang, Sheheryar 
        Malik, Jie Yu (2021), ``The Term Structure of Growth-at-Risk,'' 
        American Economic Journal: Macroeconomics (forthcoming).

        Liang, Nellie and Pat Parkinson (2020). ``Enhancing Liquidity 
        of the U.S. Treasury Market under Stress,'' Working Paper, 
        Brookings Hutchins Center #72, Dec. https://www.brookings.edu/
        research/enhancing-liquidity-of-the-u-s-treasury-market-under-
        stress/.

        Liang, Nellie (2020). ``Corporate Bond Market Dysfunction 
        during COVID-19 and Lessons from the Fed's Responses,'' Working 
        Paper, Brookings Hutchins Center #69, Oct. https://
        www.brookings.edu/research/corporate-bond-market-dysfunction-
        during-covid-19-and-lessons-from-the-feds-response/.

        English, William and Nellie Liang (2020). ``Designing the Main 
        Street Lending Program: Challenges and Options,'' Journal of 
        Financial Crises 2(3), 1-40. https://
        elischolar.library.yale.edu/journal-of-financial-crises/vol2/
        iss3/1.

        Adams, Patrick, Tobias Adrian, Nina Boyarchenko, Domenico 
        Giannone, Nellie Liang, and Eric Qian (2020), ``What do 
        financial conditions tell us about risks-to-GDP growth?'' 
        Liberty Street Economics, May 21st. https://
        libertystreeteconomics.newyorkfed.org/2020/05/what-do-
        financial-conditions-tell-us-about-risks-to-gdp-growth.html.

        Adrian, Tobias, Fernando Duarte, Nellie Liang, Pawel Zabcyzk 
        (2020). ``NKV: A New Keynesian Model with Vulnerability,'' AEA 
        Papers and Proceedings, 110, May, 470-76.

        Liang, Nellie (2020). ``Banks should suspend share repurchases 
        for longer,'' April 8th. https://www.brookings.edu/blog/up-
        front/2020/04/08/banks-should-suspend-share-repurchases-for-
        longer/.

        Liang, Nellie (2020). ``What macroprudential policies are 
        countries using to help their economies through the COVID-19 
        crisis,'' April 6th. https://www.
        brookings.edu/blog/up-front/2020/04/06/what-macroprudential-
        policies-are-countries-using-to-help-their-economies-through-
        the-covid-19-crisis/.

        Liang, Nellie (2020). ``The Federal Reserve, which already has 
        moved aggressively, can do more for small businesses,'' March 
        30th. https://www.
        brookings.edu/blog/up-front/2020/03/30/the-federal-reserve-
        which-already-has-moved-aggressively-can-do-more-for-small-
        businesses/.

        Liang, Nellie (2020). ``Three important questions to answer 
        about U.S. financial stabilization policies amid the 
        coronavirus recession,'' convening by Emmanuel Saez and Gabriel 
        Zucman on the financial crisis, March 24, 2020. Washington 
        Equitable Center for Growth. https://equitablegrowth.org/three-
        important-questions-to-answer-about-u-s-financial-
        stabilization-policies-amid-the-coronavirus-recession/.

        Liang, Nellie (2020). ``The Fed should clarify how banks can 
        deploy capital and liquidity,'' March 20th. https://
        www.brookings.edu/blog/up-front/2020/03/20/the-fed-should-
        clarify-how-banks-can-deploy-capital-and-liquidity/.

        Villa, Kadija and Nellie Liang (2020), ``What are 
        macroprudential tools?'', February 11th. https://
        www.brookings.edu/blog/up-front/2020/02/11/what-are-
        macroprudential-tools/.

        Edge, Rochelle and Nellie Liang (2020), ``Financial Stability 
        Committees and Basel III Macroprudential Capital Buffers,'' 
        Working Paper, Brookings Hutchins Center #59, Jan. https://
        www.brookings.edu/research/stronger-financial-stability-
        governance-leads-to-greater-use-of-the-countercyclical-capital-
        buffer/.

        First Responders: Inside the U.S. Strategy for Fighting the 
        2007-2009 Global Financial Crisis, (2020), editors Ben 
        Bernanke, Timothy Geithner, and Henry Paulson, with Nellie 
        Liang, Yale University Press.

        Liang, Nellie, Meg McConnell, and Phillip Swagel (2020), 
        ``Evidence on the Outcomes from the Financial Crisis 
        Response,'' in First Responders: Inside the U.S. Strategy for 
        Fighting the 2007-2009 Global Financial Crisis, (2020), editors 
        Ben Bernanke, Timothy Geithner, and Henry Paulson, with Nellie 
        Liang, Yale University Press.

        Alvarez, Scott, William Dudley, and Nellie Liang (2020), 
        ``Nonbank Financial Institutions: New Vulnerabilities and Old 
        Tools.'' in First Responders: Inside the U.S. Strategy for 
        Fighting the 2007-2009 Global Financial Crisis (2020), editors 
        Ben Bernanke, Timothy Geithner, and Henry Paulson, with Nellie 
        Liang, Yale University Press.

        Aikman, David, Andreas Lehnert, Nellie Liang, and Michele 
        Modugno (2020). ``Credit, Financial Conditions, and Monetary 
        Policy Transmission,'' International Journal of Central 
        Banking, June.

        Liang, Nellie (2019), ``A risky mix: Looser financial 
        regulations when monetary policy is easing,'' October 15th. 
        https://www.brookings.edu/blog/up-front/2019/10/15/a-risky-mix-
        looser-financial-regulations-when-monetary-policy-is-easing/.

        Adrian, Tobias, Dong He, Nellie Liang, and Fabio Natalucci 
        (2019). ``A Monitoring Framework for Global Financial 
        Stability,'' Staff Discussion Note No. 19/06, International 
        Monetary Fund, Aug. https://www.imf.org/en/Publications/Staff-
        Discussion-Notes/Issues/2019/08/23/A-Monitoring-Framework-for-
        Global-Financial-Stability-46645.

        Kohn, Donald and Nellie Liang (2019), ``Understanding the 
        Effects of the U.S. Stress Tests,'' prepared for the Federal 
        Reserve System Conference Stress Testing: A Discussion and 
        Review, July. https://www.brookings.edu/research/understanding-
        the-effects-of-the-u-s-stress-tests/.

        Liang, Nellie (2019). ``Financial Stability and Monetary 
        Policy,'' Business Economics, Vol 54(3), July. https://doi.org/
        10.1057/s11369-019-00123-w.

        Adrian, Tobias and Nellie Liang (2019), ``How growth-at-risk 
        can help central bankers gauge financial stability risks,'' 
        April 11th. https://www.
        brookings.edu/blog/up-front/2019/04/11/how-growth-at-risk-can-
        help-central-bankers-gauge-financial-stability-risks/.

        Adrian, Tobias and Nellie Liang (2018), ``Monetary Policy, 
        Financial Conditions, and Financial Stability,'' International 
        Journal of Central Banking, Vol 14(1), pp. 73-131, Jan.

        Edge, Rochelle and Nellie Liang (2019), ``New Financial 
        Stability Governance Structures and Central Banks,'' Working 
        Paper, Brookings Hutchins Center #50, Feb. (revised), and in 
        Monetary Policy and Financial Stability in a World of Low 
        Interest Rates, Reserve Bank of Australia 2017 Conference 
        volume, Jonathan Hambur and John Simon (eds.).

        Adrian, Tobias, Federico Grinberg, Nellie Liang, and Sheheryar 
        Malik (2018), ``The Term Structure of Growth-at-Risk,'' 
        International Monetary Fund WP 18/180, August 2018; and 
        Brookings Hutchins Center Working Paper #42, Aug. https://
        www.brookings.edu/wp-content/uploads/2018/08/WP42-NL-
        updated.pdf.

        Liang, Nellie (2017). ``What Treasury's financial regulation 
        report gets right and where it goes too far.'' June 13th. 
        https://www.brookings.edu/blog/up-front/2017/06/13/what-
        treasurys-financial-regulation-report-gets-right-and-where-it-
        goes-too-far/.

        Liang, Nellie (2017). ``Higher capital is not a substitute for 
        stress tests,'' April 24th. https://www.brookings.edu/research/
        higher-capital-is-not-a-substitute-for-stress-tests/.

        Falato, Antonio, and J. Nellie Liang (2016). ``Do Creditor 
        Rights Increase Employment Risk? Evidence from Loan 
        Covenants,'' Journal of Finance, vol 71, no. 6, pp. 2545-2590.

        Adrian, Tobias, Daniel M. Covitz, and J. Nellie Liang (2015). 
        ``Financial Stability Monitoring,'' Annual Review of Financial 
        Economics, vol. 7, pp. 357-395.

        Covitz, Daniel, Nellie Liang, and Gustavo A. Suarez (2013). 
        ``The Evolution of a Financial Crisis: Collapse of the Asset-
        Backed Commercial Paper Market,'' Journal of Finance, vol. 68, 
        no. 3, pp. 815-848.

        Liang, Nellie (2014). ``Financial Stability: Lessons Learned 
        from the Recent Crisis and Implications for the Federal 
        Reserve,'' in Evanoff, Douglas D., Cornelia Holthausen, George 
        G. Kaufman, Manfred Kremer, eds., The Role of Central Banks in 
        Financial Stability: How Has It Changed?, World Scientific 
        Studies in International Economics, vol. 30. Hackensack, NJ and 
        Singapore: World Scientific, pp. 69-81.

        Liang, Nellie (2013). ``Systemic Risk Monitoring and Financial 
        Stability,'' Journal of Money Credit and Banking, vol. 45, pp. 
        129-135.

        Cordell, Larry, Karen Dynan, Andreas Lehnert, Nellie Liang, and 
        Eileen Mauskopf (2010). ``The Incentives of Mortgage Servicers: 
        Myths and Realities,'' in Kolb, Robert W. ed., Lessons from the 
        Financial Crisis. Hoboken, NJ: John Wiley and Sons, pp. 231-
        237.

        Brown, Jeffrey R., Nellie Liang, and Scott Weisbenner (2007). 
        ``Executive Financial Incentives and Payout Policy: Firm 
        Responses to the 2003 Dividend Tax Cut,'' Journal of Finance, 
        vol. 62, no. 4, pp. 1935-1965.

        Brown, Jeffrey R., Nellie Liang, and Scott Weisbenner (2007). 
        ``Individual Account Investment Options and Portfolio Choice: 
        Behavioral Lessons from 401(k) Plans,'' Journal of Public 
        Economics, vol. 91, no. 10, pp. 1992-2013.

        Brown, Jeffrey R., Nellie Liang, and Scott Weisbenner (2006). 
        ``401(k) Matching Contributions in Company Stock: Costs and 
        Benefits for Firms and Workers,'' Journal of Public Economics, 
        vol. 90, no. 6-7, pp. 1315-1346.

        Coronado, Julia, and Nellie Liang (2006). ``The Influence of 
        PBGC Insurance on Pension Fund Finances,'' in Blitzstein, 
        David, Olivia Mitchell S. and Stephen Utkus P., eds., 
        Restructuring Retirement Risks. Oxford and New York: Oxford 
        University Press, pp. 88-108.

        Amromin, Gene, Paul Harrison, Nellie Liang, and Steve Sharpe 
        (2005). ``How Did the 2003 Dividend Tax Cut Affect Stock Prices 
        and Corporate Payout Policy?'', Finance and Economics 
        Discussion Series 2005-57. Board of Governors of the Federal 
        Reserve System.

        Liang, Nellie (2005). ``Are Empowerment and Education Enough? 
        Underdiversification in 401(k) Plans: Comment,'' Brookings 
        Papers on Economic Activity, vol. 2005, no. 2, pp. 202-208.

        Helwege, Jean, and Nellie Liang (2004). ``Initial Public 
        Offerings in Hot and Cold Markets,'' Journal of Financial and 
        Quantitative Analysis, vol. 39, no. 3, pp. 541-569.

        Amromin, Gene, and Nellie Liang (2003). ``Hedging Employee 
        Stock Options, Corporate Taxes, and Debt,'' National Tax 
        Journal, vol. 56, no. 3, pp. 513-533.

        Fenn, George W., and Nellie Liang (2001). ``Corporate Payout 
        Policy and Managerial Stock Incentives,'' Journal of Financial 
        Economics, vol. 60, no. 1, pp. 45-72.

        Liang, Nellie, and Scott Weisbenner (2001). ``Who Benefits from 
        a Bull Market? An Analysis of Employee Stock Option Grants and 
        Stock Prices,'' Finance and Economics Discussion Series 2001-
        57. Board of Governors of the Federal Reserve System.

        Liang, J. Nellie, and Steven A. Sharpe (1999). ``Share 
        Repurchases and Employee Stock Options and Their Implications 
        for S&P 500 Share Retirements and Expected Returns,'' Finance 
        and Economics Discussion Series 1999-59. Board of Governors of 
        the Federal Reserve System.

        Fenn, George W., and Nellie Liang (1998). ``New Resources and 
        New Ideas: Private Equity for Small Businesses,'' Journal of 
        Banking and Finance, vol. 22, no. 6-8, pp. 1077-1084.

        Amel, Dean F., and J. Nellie Liang (1997). ``Determinants of 
        Entry and Profits in Local Banking Markets,'' Review of 
        Industrial Organization, vol. 12, no. 1, pp. 59-78.

        Fenn, George W., Nellie Liang, and Stephen Prowse (1997). ``The 
        Private Equity Market: An Overview,'' Financial Markets, 
        Institutions and Instruments, vol. 6, no. 4, pp. 1-105.

        Helwege, Jean, and Nellie Liang (1996). ``Is There a Pecking 
        Order? Evidence from a Panel of IPO Firms,'' Journal of 
        Financial Economics, vol. 40, no. 3, pp. 429-458.

        Fenn, George W., Nellie Liang, and Stephen Prowse (1995). ``The 
        Economics of the Private Equity Market,'' Staff Studies 168. 
        Board of Governors of the Federal Reserve System.

        Hannan, Timothy H., and J. Nellie Liang (1995). ``The Influence 
        of Thrift Competition on Bank Business Loan Rates,'' Journal of 
        Financial Services Research, vol. 9, no. 2, pp. 107-122.

        Berkovec, James A., and J. Nellie Liang (1993). ``Selection in 
        Failed Bank Auction Prices: An Econometric Model of FDIC 
        Resolutions,'' Finance and Economics Discussion Series 93-40. 
        Board of Governors of the Federal Reserve System.

        Hannan, Timothy H., and J. Nellie Liang (1993). ``Inferring 
        Market Power from Time-Series Data: The Case of the Banking 
        Firm,'' International Journal of Industrial Organization, vol. 
        11, no. 2, pp. 205-218.

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):

        I have done my best to identify speeches and presentations, 
        including a thorough review of personal files and searches of 
        publicly available electronic databases. If additional 
        materials are identified, they will be provided promptly to the 
        committee.

        Economic Policy Issues in the 2020 Presidential Campaign, 
        Princeton University Griswold Center, October 10, 2020 (no text 
        or link available).

        The 2020 Treasury Market Conference, hosted by the U.S. 
        Treasury, Federal Reserve Board, Federal Reserve Bank of New 
        York, Securities and Exchange Commission, and the Commodities 
        Futures Trading Commission, ``Enhancing the Resilience of the 
        U.S. Treasury Market,'' September 29th. https://
        www.newyorkfed.org/newsevents/events/markets/2020/0929-2020.

        Brookings Papers on Economic Activity conference, Discussant of 
        ``Business Credit Programs in the Pandemic Era,'' September 25, 
        2020, https://www.
        brookings.edu/events/bpea-fall-2020-covid-19-and-the-economy/.

        National Bureau of Economic Research, Panel Discussion of 
        COVID-19 and Macroeconomic Policy, July 8, 2020 (no text or 
        link available).

        COVID-19 and the financial system--How resilient are the banks? 
        How are they supporting the economy?, Brookings Webinar, June 
        4, 2020. https://www.brookings.edu/events/webinar-covid-19-and-
        the-financial-system-how-resilient-are-the-banks-how-are-they-
        supporting-the-economy/.

        COVID-19 and the financial system--How and why were financial 
        markets disrupted?, Brookings Webinar, May 27, 2020. https://
        www.brookings.edu/events/webinar-covid-19-and-the-financial-
        system-how-and-why-were-financial-markets-disrupted/.

        Government lending to small businesses during COVID-19--Why? 
        How? And will it work?, Brookings Webinar, April 14, 2020. 
        https://www.brookings.edu/events/government-lending-to-small-
        businesses-during-covid-19-why-how-and-will-it-work/.

        Financial regulations and financial stability, Barclays 
        Financial Regulatory Field Trip, June 18, 2020 (no text or link 
        available).

        Bank stress tests, Expert webinar, Evercore ISI, June 30, 2020 
        (no text or link available).

        Financial stability, Expert webinar, Evercore ISI, May 18, 2020 
        (no text or link available).

        Macroprudential policies and COVID-19 response. Washington 
        University Executive education, May 26, 2020 (no text or link 
        available).

        Brookings Papers on Economic Activity conference, Discussant of 
        ``When is Growth at Risk?'', March 2020. https://
        www.brookings.edu/product/brookings-papers-on-economic-
        activity-spring-2020-edition/.

        Evaluating U.S. financial stabilization measures for COVID-19, 
        Princeton University Benheim Center, March 26, 2020. https://
        bcf.princeton.edu/events/nellie-liang-on-evaluating-u-s-
        financial-stabilization-measures-for-covid-19/.

        ``The Repo Market Disruption: What happened, why, and should 
        something be done about it?'', December 5, 2019. Brookings 
        webinar. https://www.
        brookings.edu/events/the-repo-market-disruption-what-happened-
        why-and-should-something-be-done-about-it/.

        ``Financial Stability and Central Banks,'' 25th Anniversary of 
        central bank independence, Banco de Mexico, November 1, 2019 
        (no text or link available).

        Risks to financial stability, Bank Credit Analyst, September 
        2019 (no text or link available).

        Keynote conversation with Randal Quarles, Bipartisan Policy 
        Center, July 11, 2019. https://bipartisanpolicy.org/event/
        keynote-conversation-with-randal-quarles-federal-reserve-vice-
        chair-monetary-policy-financial-regulation-the-fed/.

        Federal Reserve System Conference, ``Stress Testing: A 
        Discussion and Review,'' Federal Reserve Bank of Boston, July 
        9, 2019. https://www.bostonfed.org/news-and-events/events/2019/
        stress-testing.aspx.

        Financial regulations and financial stability, Cornerstone 
        Research, 2018 (no text or link available).

        Macroprudential Stress tests, Moody's Analytics, 2018 (no text 
        or link available).

        Deutsche Bundesbank, Sveriges Riksbank, and De Nederlandsche 
        Bank, Fifth Annual Macroprudential Conference, ``Financial 
        Stability Committees and the Basel III Countercyclical Capital 
        Buffer,'' May 2019 (no text or link available).

        Brookings Institution, September 2018, ``The 2007-2009 
        Financial Crisis: An Economic Perspective,'' (with Andrew 
        Metrick), at Responding to the Global Financial Crisis: What We 
        Did and Why We Did it.'' https://www.brookings.edu/wp-content/
        uploads/2018/08/Overview-Presentation-9-11-18-FINAL.pdf.

        Bank of International Settlements, June 2018, ``Progress on 
        Dynamic Macroprudential Policies,'' at 17th Annual Research 
        Conference (no text or link available).

        Bank of International Settlements, March 2018, ``Term Structure 
        of Growth-at-Risk,'' Research Conference (no link available).

        Peterson Institute, October 2017, ``Rethinking Financial 
        Stability,'' at Rethinking Macroeconomic Policy Conference. 
        https://www.brookings.edu/blog/up-front/2017/12/04/rethinking-
        financial-stability-and-macroprudential-policy/.

        International Finance and Banking Society, July 2017, Keynote 
        address ``Financial Regulations and Macroeconomic Stability,'' 
        Oxford, UK. https://www.
        brookings.edu/wp-content/uploads/2017/07/
        liang_financialregulationsand
        macroeconomicstability.pdf.

        ECB Macroprudential Policy and Research Conference, May 2017, 
        paper discussant (no text or link available).

        Reserve Bank of Australia, March 2017, ``New Financial 
        Stability Governance and Central Banks,'' at Monetary Policy 
        and Financial Stability in a World of Low Interest Rates.

        Bank of England, Workshop on Macroprudential Policy for 
        Housing, November 2016, ``U.S. Implementation of 
        Macroprudential Policies,'' panel presentation (no text or link 
        available).

        MIT Golub Center for Finance and Policy, September 2016, 
        ``Causes of and Policy Responses to the U.S. Financial Crisis: 
        What Do We Know Now that the Dust has Settled?'', Systemic 
        Risk, moderator (no text or link available).

        Bank of Canada, CIGI, IMF, Peterson Institute Joint Workshop, 
        May 2016, ``Macroprudential and Monetary Policy in the U.S.,'' 
        Reinventing the Role of Central Banks in Financial Stability 
        (no text or link available).

        European Central Bank, April 2016, ``Financial Vulnerabilities, 
        Macroeconomic Dynamics, and Monetary Policy,'' paper 
        presentation (no text or link available).

        Federal Reserve Bank of San Francisco, March 2016, Discussant 
        of Lars Svensson, ``Cost-Benefit Analysis of Leaning against 
        the Wind: Are Costs Larger also with Less Effective 
        Macroprudential Policy?'', Macroeconomics and Monetary Policy 
        Conference (no text or link available).

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

        I am a professional economist with significant expertise in 
        researching policies to promote a robust and resilient 
        financial system to support economic growth and financial 
        stability. I was a member of the staff of the Board of 
        Governors of the Federal Reserve System for more than 30 years. 
        While at the Fed, I held a number of positions, each with 
        increasing responsibility. In 2010, I was appointed by the 
        Board to be the first director of what became the Division of 
        Financial Stability, created after the financial crisis to 
        coordinate the Board's work in this important area. Through my 
        service, I acquired substantial experience with financial 
        markets and financial institutions, and an understanding of the 
        major policy issues facing the U.S. to promote a financial 
        system that is efficient and fair. Since leaving the Fed in 
        2017, I have continued to research issues on the financial 
        system and its linkages to economic stability, while a senior 
        fellow at the Brookings Institution, a visiting scholar at the 
        International Monetary Fund, and a part-time lecturer at Yale 
        University School of Management.

        While at the Fed, I advised the Chairperson of the Federal 
        Reserve on risks to financial stability. I also prepared 
        materials for monetary policy decisions by the Federal Open 
        Market Committee (FOMC). I regularly briefed the FOMC on 
        financial market developments and financial stability risks and 
        directed the briefings of many other staff members. I led a new 
        office, created under Chairman Ben Bernanke and expanded under 
        Chair Janet Yellen, to focus specifically on the Fed's 
        responsibilities for promoting financial stability. I 
        established a systematic program to monitor potential risks to 
        financial stability and to develop policy options to address 
        the risks, and that program continues to be used today. I 
        represented the Board in inter-agency staff groups, including 
        those sponsored by the U.S. Financial Stability Oversight 
        Council and the Financial Stability Board, an international 
        body that monitors and makes recommendations about the global 
        financial system.

        I also helped to implement some of the Fed's emergency 
        responses to the financial crisis from 2007 to 2009, which were 
        designed to reduce the negative impact of stresses in financial 
        institutions and financial markets on the economy. I worked 
        directly to design and implement the supervisory stress tests 
        of the largest banking firms and the Fed's liquidity programs 
        to help prevent the collapse of the commercial paper market. I 
        recently co-edited a book, ``First Responders,'' with Ben 
        Bernanke, Timothy Geithner, and Henry Paulson, to produce 
        lessons learned from the many government programs taken to 
        respond to the financial crisis. I believe that this type of 
        book can help future policymakers to avoid repeating past 
        mistakes that can lead to prolonged hardships on many 
        households and businesses.

        I have maintained an active research agenda throughout my 
        career. I have published original research on a wide range of 
        topics. In recent years, my research has focused on linkages 
        between the financial system and macroeconomic growth and 
        stability. Since the onset of the COVID-19 pandemic, I have 
        studied the functioning of the Treasury securities market, 
        liquidity of corporate bond markets, and the design of loan 
        programs to support small businesses.

        This broad range of experiences will inform my work as Under 
        Secretary of Domestic Finance if I were to be confirmed. I have 
        substantial knowledge and experience in financial institutions 
        and markets, in periods of calm and in periods of intense 
        stress. This experience will help me to promote policies to 
        ensure that the financial system functions efficiently and 
        fairly, providing critical financial services needed to support 
        economic growth, while protecting consumers and investors. In 
        addition, I have demonstrated the ability to build and manage a 
        sizable, diverse, and highly productive organization when I 
        created a new division of financial stability at the Fed.

        I graduated from the University of Notre Dame in 1979 with a 
        B.A. in economics, summa cum laude, and from the University of 
        Maryland in 1986 with a Ph.D. in economics.

                   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.

        Contract with Yale University ends in May 2021.

 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.

        None.

 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.

                       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.

        No.

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

        No.

 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 J. Nellie Liang, Ph.D.
              Questions Submitted by Hon. Elizabeth Warren
    Question. The Treasury Offset Program (TOP) collects past-due 
Federal nontax debt and State tax and nontax debt by offsetting Federal 
payments to individuals. Under current law, $750 in monthly Social 
Security benefits is exempted from administrative offset, above which 
15 percent of benefits may be garnished.\1\ The intent of the exemption 
is to ensure that offsets do not leave beneficiaries without a 
sufficient level of benefits to ensure a basic standard of living. 
Social Security benefits represent about 33 percent of the income of 
elderly Americans, and 45 percent of single elderly beneficiaries rely 
on Social Security for more than 90 percent of their income.\2\
---------------------------------------------------------------------------
    \1\ 31 CFR Sec. 285.4.
    \2\ Social Security Administration, ``Fact Sheet: Social 
Security,'' 2021, https://www.ssa.gov/news/press/factsheets/basicfact-
alt.pdf.

    In 1998, the year Treasury regulations implemented the $750 
threshold, the threshold constituted 112 percent of the Federal poverty 
line for a single adult.\3\ However, because this threshold was not 
adjusted for cost of living, an increasing number of seniors 
experiencing garnishment are left with monthly benefits well below the 
poverty line. According to a 2016 GAO report, the $750 threshold 
represented just 76 percent of the 2016 poverty guideline.\4\ Among 
older Americans whose Social Security benefits were offset after 
defaulting on their Federal student loans, 64 percent had benefits 
below the poverty line in fiscal year 2015.\5\ Moreover, as GAO notes, 
``a growing number of these older borrowers already received Social 
Security benefits below the poverty guideline before offsets further 
reduced their incomes.''\6\
---------------------------------------------------------------------------
    \3\ GAO, ``Social Security Offsets: Improvements to Program Design 
Could Better Assist Older Student Loan Borrowers with Obtaining 
Permitted Relief,'' GAO-17-45, December 2016, https://www.gao.gov/
assets/gao-17-45.pdf.
    \4\ Id.
    \5\ Id.
    \6\ Id.

    Do you believe that $750 a month is a sufficient amount for Social 
Security beneficiaries who are already struggling to pay their debts to 
---------------------------------------------------------------------------
live on? Please explain why or why not.

    As Under Secretary for Domestic Finance, will you commit to 
revising Treasury regulations to raise the offset threshold for Social 
Security and other Federal benefit payments to at least 150 percent of 
the Federal poverty line and adjust the threshold for cost of living, 
before the end of the year?

    Will you commit to preserving the 15-percent withholding percentage 
for Social Security benefits and other Federal payments above the 
offset threshold amount?

    Do you believe Social Security benefits should be entirely exempted 
from administrative offset? Please explain why or why not.

    Answer. I understand that Treasury has recently begun a review of 
its offset program to determine whether additional regulatory or 
statutory changes could make the system more equitable and to determine 
what additional protections might assist low-income debtors. If I am 
confirmed, I look forward to working with others at Treasury and 
Congress on this issue.

    Question. Student loan debt is crippling millions of families 
across the country--especially those borrowers who have defaulted on 
their loans. Borrowers who have not made a loan payment for more than 
270 days are considered to be in default and can be subject to offset 
through the Treasury Offset Program and Administrative Wage Garnishment 
program.\7\ As research has shown, these programs may seize hundreds or 
thousands of dollars more from student loan borrowers than they would 
have been required to pay under an income driven repayment (IDR) plan, 
which requires borrowers pay a percent of their adjusted gross income 
above 150 percent of the Federal poverty line.\8\
---------------------------------------------------------------------------
    \7\ Federal Student Aid, ``Student Loan Delinquency and Default,'' 
https://studentaid.gov/manage-loans/default.
    \8\ Persis Yu, ``Pushed into Poverty: How Student Loan Collections 
Threaten the Financial Security of Older Americans,'' National Consumer 
Law Center, May 2017, https://www.nclc.org/images/pdf/student_loans/
student-loan-collections-threaten-fin-sec.pdf.

    Will you commit to revising the offset formulas under these 
programs to ensure that student loan borrowers pay no more than would 
---------------------------------------------------------------------------
have been required under an IDR plan?

    Answer. If confirmed, I look forward to engaging with you and your 
office on issues related to the offset program. Treasury collects 
student loan debts through the Treasury Offset Program (TOP) as 
directed by the Department of Education and as required by statute but 
does not collect these debts through administrative wage garnishment or 
use other tools to collect student loan debt. TOP is a collection tool 
and referring creditor agencies (not Treasury) determine when and to 
what extent they are required to use TOP. If the Department of 
Education determines that a debtor is not eligible for offset due to 
financial hardship (or for some other reason) or if Education 
determines that the debtor qualifies for a reduced offset, Treasury 
will implement Education's direction.

    Question. The Earned Income Tax Credit (EITC) is one of the 
government's most effective tools to fight poverty, increase financial 
stability, and promote work among low-income workers and their 
families.\9\ Despite the EITC's importance for supporting working 
families and their economic mobility, tax refunds received by EITC 
recipients who have defaulted on their Federal student loans are 
subject to offset. Borrower advocates have documented the harm that 
EITC offsets cause financially distressed student loan borrowers, 
including impairing their ability to get and keep jobs and pay for 
basic necessities, and exacerbating housing instability.\10\ The 
Treasury Department, however, does not provide public data on the 
amount and value of EITC refunds that are seized from borrowers each 
year.
---------------------------------------------------------------------------
    \9\ Center on Budget and Policy Priorities, ``Policy Basics: The 
Earned Income Tax Credit,'' December 10, 2019, https://www.cbpp.org/
research/federal-tax/the-earned-income-tax-credit.
    \10\ Persis Yu, ``Voices of Despair: How Seizing the EITC Is 
Leaving Student Loan Borrowers Homeless and Hopeless During a 
Pandemic,'' National Consumer Law Center, July 2020, https://
www.nclc.org/images/pdf/student_loans/voices-of-despair-seizing-eitc-
in-pandemic.pdf.

    Do you believe the EITC should be exempt from seizure through the 
---------------------------------------------------------------------------
Treasury Offset Program? Please explain why or why not.

    Will you commit to analyzing and releasing data on the composition 
of tax refund offsets to identify how many borrowers have had their 
EITC seized through the Treasury Offset Program in recent years?

    Answer. My understanding is that this analysis would largely need 
to be handled by the IRS. If confirmed, I am committed to requesting a 
briefing by the relevant offices to better understand the issue.

    Question. I have long been concerned about the practice of sending 
defrauded borrowers who are eligible for a student loan discharge under 
Borrower Defense to Treasury for debt collections and administrative 
offset. 31 U.S.C. 6402(d) authorizes the offset of any payments due to 
an individual against a ``past due, legally enforceable debt.''\11\ In 
regulations and in a memorandum of understanding between Treasury and 
Education, the Secretary of Education may only certify debts that it 
has affirmatively determined are ``legally enforceable.'' The 
Department of Education has previously argued that even when it is 
aware that a delinquent student loan may be eligible for discharge, and 
even when a borrower has filed a borrower defense application, it may 
still refer the debt to Treasury for collection by offset.\12\
---------------------------------------------------------------------------
    \11\ 31 CFR Sec. 6402.
    \12\ Order on Motions for Judgment, Darnelle E. Williams and 
Yessenia M. Taveras v. Elisabeth Devos, October 24, 2018, https://
predatorystudentlending.org/wp-content/uploads/2018/10/Ruling_Williams-
v.-DeVos_10.24.18.pdf.

    Treasury may define the term ``legally enforceable'' to clarify 
that Education cannot affirmatively determine a debt is legally 
enforceable where it is aware of actual or potential grounds for 
cancellation, whether they have been asserted by the borrower or not. 
---------------------------------------------------------------------------
Will you commit to do so?

    Answer. Treasury services many types of debts for many Federal and 
State agencies. The referring creditor agency is responsible for making 
decisions regarding the validity or enforceability of the debt. 
Different rules apply to the many programs on whose behalf Treasury 
collects debt, and Treasury does not have the programmatic expertise or 
the factual information needed to make appropriate decisions on behalf 
of the referring agencies. Federal agencies generally can determine 
whether a debt is legally enforceable or can determine whether it can 
suspend debt collection efforts, such as when a debtor has requested a 
waiver or review of the debt.

    Question. Last Congress, I introduced S. 2155, the Stop Wall Street 
Looting Act, to reform the private equity industry and end abusive 
leveraged buyouts, and I have continued my oversight of this industry, 
particularly throughout the pandemic.\13\ The private equity industry, 
which ``is behind many of the understaffed and underprepared nursing 
homes through which COVID-19 tore, the surprise medical bills that will 
greet those lucky enough to make it home, and the evictions sending 
people out onto the streets amidst a global pandemic,'' operates 
through aggressive financial engineering and extracting wealth from 
target companies, ``exploiting tax loopholes and pushing tax planning 
to the breaking point.''\14\
---------------------------------------------------------------------------
    \13\ Office of Senator Warren, ``Warren, Baldwin, Brown, Pocan, 
Jayapal, Colleagues Unveil Bold Legislation to Fundamentally Reform the 
Private Equity Industry,'' July 18, 2019, https://
www.warren.senate.gov/newsroom/press-releases/warren-baldwin-brown-
pocan-jayapal-colleagues-unveil-bold-legislation-to-fundamentally-
reform-the-private-equity-industry; Office of Senator Warren, ``Warren 
to Private Equity Industry Lobbyists: Don't Exploit the COVID-19 
Pandemic to Line the Pockets of the Wealthy at the Expense of 
Struggling Workers and Communities,'' press release, June 25, 2020, 
https://www.warren.senate.gov/oversight/letters/warren-to-private-
equity-industry-lobbyists-dont-exploit-the-COVID-19-pandemic-to-line-
the-pockets-of-the-wealthy-at-the-expense-of-struggling-workers-and-
communities.
    \14\ American Prospect, ``A Day One Agenda for Private Equity,'' 
Eleanor Eagan and Eileen Appelbaum, August 7, 2020, https://
prospect.org/day-one-agenda/a-day-one-agenda-for-private-equity/; 
Private Equity Stakeholder Project, ``Dividend Recapitalizations in 
Health Care: How Private Equity Raids Critical Health Care 
Infrastructure for Short Term Profit,'' October 20, 2020, https://
pestakeholder.org/report/dividend-recapitalizations-in-health-care-how-
private-equity-raids-critical-health-care-infrastructure-for-short-
term-profit/.

    Will you direct the Office of Capital Markets to review and report 
on the broader economic impact of private equity investments and their 
impacts on target companies, workers, and communities, as well as the 
---------------------------------------------------------------------------
tax and fee structures used by private equity funds?

    Section 120 of the Dodd Frank Act allows the Financial Stability 
Oversight Council (FSOC) to issue recommendations to primary financial 
regulators ``to apply new or heightened standards and safeguards'' of 
financial activities that could create or increase the risk of 
significant liquidity, credit, or other problems speaking among bank 
holding companies and nonbank financial companies, financial markets of 
the United States, or low-income, minority, or underserved 
communities.'' Do you believe that the private equity industry has 
created ``significant liquidity, credit, or other problems'' among low-
income, minority, or underserved communities?

    Answer. The economic and tax issues associated with the private 
equity industry are important ones that warrant study. I share your 
concern that private equity buyouts can create high leverage for 
businesses and harm communities. If confirmed, I will look forward to 
working with you to evaluate these issues.

    Question. In May 2020, the Federal Reserve, FDIC, and OCC issued a 
joint interim final rule (IFR) that allowed depository institutions to 
exclude U.S. Treasury securities and central bank reserves from the 
denominator of the Supplementary Leverage Ratio (SLR).\15\ A month 
earlier, the Fed granted similar relief at the holding company level 
through a separate IFR.\16\
---------------------------------------------------------------------------
    \15\ Board of Governors of the Federal Reserve System, ``Regulators 
temporarily change the supplementary leverage ratio to increase banking 
organizations' ability to support credit to households and businesses 
in light of the coronavirus response,'' May 15, 2020, https://www.
federalreserve.gov/newsevents/pressreleases/bcreg20200515a.htm.
    \16\ Board of Governors of the Federal Reserve System, ``Federal 
Reserve Board announces temporary change to its supplementary leverage 
ratio rule to ease strains in the Treasury market resulting from the 
coronavirus and increase banking organizations' ability to provide 
credit to households and businesses,'' April 1, 2020, https://
www.federalreserve.gov/newsevents/pressreleases/bcreg20200401a.htm.

---------------------------------------------------------------------------
    Do you believe that either of the IFRs were appropriate?

    Answer. The Federal Reserve, FDIC and OCC adopted the IFRs in 
response to the rush for liquidity and safety in the early stages of 
the COVID-19 pandemic. The carveout was temporary and intended to 
increase the ability of banking organizations to provide liquidity, by 
offsetting the pressures on the SLR from Fed asset purchases and 
resulting increases in bank reserves.

    Question. Do you support the inclusion of central bank reserves in 
the SLR denominator?

    Answer. I understand that the Federal Reserve is studying and 
inviting public comment on possible modifications to the SLR. As the 
Fed has acknowledged, it is important that any changes to the SLR do 
not erode bank capital levels.

    Question. Do you support the inclusion of U.S. Treasuries in the 
SLR denominator?

    Answer. I believe bank capital levels should not be eroded and that 
the SLR's function as a backstop to risk-weighted capital requirements 
should be maintained.

    Question. Do you believe that modifying the SLR is an appropriate 
response to address strains in the Treasury market?

    Answer. As noted above, the Federal Reserve, FDIC and OCC adopted 
the IFRs in response to the rush for liquidity and safety in the early 
stages of the COVID-19 pandemic. The carveout was temporary and 
intended to increase the ability of banking organizations to provide 
liquidity, by offsetting the pressures on the SLR from Fed asset 
purchases and resulting increases in bank reserves.

    Question. Will you commit to not making any recommendations to the 
regulatory agencies that could result in a reduction in capital 
requirements?

    Answer. Increases since the financial crisis in the quantity and 
quality of capital have significantly improved the safety and soundness 
of banking institutions and the stability of the U.S. financial system. 
I believe it is important not to erode bank capital levels.

    Question. The Dodd-Frank Wall Street Reform and Consumer Protection 
Act established FSOC to identify risks to the financial system and 
eliminate expectations that the government will shield creditors or 
counterparties from potential losses.\17\ FSOC has the ability to 
designate nonbank financial firms as Systemically Important Financial 
Institutions (SIFIs) that would be subject to enhanced prudential 
supervision by the Federal Reserve.\18\
---------------------------------------------------------------------------
    \17\ 12 U.S. Code Sec. 5322.
    \18\ 12 U.S. Code Sec. 5323.

    Do you believe there are companies that exist today whose failure 
---------------------------------------------------------------------------
would pose a threat to the financial stability of the United States?

    Do you believe that firms above a certain size threshold should be 
subject to automatic designation as SIFIs?

    Please describe the advantages and disadvantages of using 
activities-based regulation to address financial stability risks in 
lieu of company-wide designations. Are there risks that can only be 
addressed by the former? Are there risks that can only be addressed by 
the latter?

    Answer. Congress established FSOC to bring together the financial 
regulatory community to identify and respond to emerging threats to 
financial stability and to promote market discipline. FSOC should have 
the tools to protect our financial system from instability, whether 
arising from a single firm or the risky products or activities of an 
array of firms. The designation of individual nonbank financial 
companies for Federal Reserve supervision and enhanced prudential 
standards is one of the tools Congress provided to FSOC. The Dodd-Frank 
Wall Street Reform and Consumer Protection Act lists the criteria FSOC 
must consider in making any designation. If FSOC were to use this tool, 
it should do so in a manner that is transparent and accountable. Other 
tools may be more appropriate to address risks that stem not from one 
firm but from the products or activities of an array of firms. If 
confirmed, I will work closely with FSOC to identify, assess, and to 
respond to potential risks using whichever tools would be most 
efficient and effective given the nature of the risks.

    Question. Last year, Ceres issued a report with recommendations for 
agencies to ``protect[] the stability and competitiveness of the U.S. 
economy'' due to the ``need to recognize and act on climate change as a 
systemic risk.''\19\ The report argued that the ``wide-ranging physical 
impacts'' of climate change, ``combined with expected transitions to a 
net-zero carbon economy and other socio- economic ripples, are likely 
to manifest in both cumulative and unexpected ways and present clear 
systemic risks to U.S. financial markets--and the broader 
economy.''\20\ The Commodity Futures Trading Commission (CFTC) also 
issued a report that stated that agencies and regulators ``must 
recognize that climate change poses serious emerging risks to the U.S. 
financial system, and they should move urgently and decisively to 
measure, understand, and address these risks.''\21\
---------------------------------------------------------------------------
    \19\ Ceres, ``Addressing Climate as a Systemic Risk: A call to 
action for U.S. financial regulators,'' June 1, 2020, https://
www.ceres.org/resources/reports/addressing-climate-systemic-risk.
    \20\ Id.
    \21\ Commodity Futures Trading Commission, ``Managing Climate Risk 
in the U.S. Financial System: Report of the Climate-Related Market Risk 
Subcommittee, Market Risk Advisory Committee of the U.S. Commodity 
Futures Trading Commission,'' report, September 2020, https://
www.cftc.gov/sites/default/files/2020-09/9-9-
20%20Report%20of%20the%20Subcommittee%20on
%20Climate-Related%20Market%20Risk%20-
%20Managing%20Climate%20Risk%20in%20the%2
0U.S.%20Financial%20System%20for%20posting.pdf; Office of Senator 
Warren, ``Senator Warren Releases Statement on CFTC Report Concluding 
that `Climate Change Poses a Major Risk to the Stability of the 
Financial System,' '' press release, September 10, 2020, https://www.
warren.senate.gov/newsroom/press-releases/senator-warren-releases-
statement-on-cftc-report-concluding-that-climate-change-poses-a-major-
risk-to-the-stability-of-the-financial-system.

    Treasury has acknowledged that climate change poses financial risks 
to banks and the financial system alike.\22\ Failing to account for 
this in bank capital requirements would fail to price in the cost of 
climate risk.
---------------------------------------------------------------------------
    \22\ ``Treasury Announces Coordinated Climate Policy Strategy with 
New Treasury Climate Hub and Climate Counselor,'' April 19, 2021, 
https://home.treasury.gov/news/press-releases/jy0134.

    Do you support integrating climate risks into bank capital 
---------------------------------------------------------------------------
requirements? Please explain why or why not.

    Will you commit to working with the Federal Reserve and FSOC to 
integrate climate risk into bank capital requirements?

    Answer. Climate change has already impacted the economy and the 
financial sector, with more frequent and severe natural disasters 
damaging homes, businesses, and entire communities. These impacts are 
expected to increase. In addition, the economic and financial 
transitions needed to place the economy on a sustainable path may 
involve additional financial risks. As a result, it is important that 
financial institutions measure, disclose, and manage the risks that 
climate change poses to their businesses. Financial regulators must 
also adjust their regulatory and supervisory approaches in response to 
new identified risks, to support safety and soundness and financial 
stability, consistent with their existing mandates.

    Financial regulators have begun work in this area, and Secretary 
Yellen has identified climate-related financial risks as a priority for 
the work of the Financial Stability Oversight Council. Treasury is also 
actively engaged in implementing the executive order on climate-related 
financial risk, issued May 20, 2021, which calls for a number of steps 
to address climate-related risks, including the issuance of a report by 
FSOC on this topic. I support the assessment of climate-related 
financial risks by financial regulators, including work coordinated by 
FSOC, and steps to address identified vulnerabilities based on these 
assessments. It is critical that these assessments proceed in an 
expeditious and analytically sound manner.

                                 ______
                                 
                 Questions Submitted by Hon. Mike Crapo
    Question. The Financial Stability Oversight Council (FOSC), which 
you would participate in if confirmed, has vast authority and unclear 
objectives. It has the potential of being an unaccountable roving 
regulator with enormous authority and power.

    Among FSOC authorities are: abilities to break up firms that pose a 
``grave threat: to financial stability; ability to designate `systemic 
activities' and utilities and subject those designated to heightened 
oversight and standards; ability to designate any company for 
consolidated supervision; among other things.'' Many things in the 
FSOCs objectives involve undefined, nebulous, concepts such as 
``financial stability,'' and ``systemic risk.'' It has been nearly 
impossible to obtain workable definitions and measures of those 
concepts from regulators and authors of Dodd-Frank. Sometimes, requests 
for definitions of nebulous concepts such as financial stability are 
answered with similarly nebulous concepts, as with saying that: we have 
financial stability if we have financial resilience. That, 
unfortunately, simply moves from one rung of the ladder of opacity to 
another.

    Similarly, as we have seen with the Volcker Rule, which urged 
action against ``proprietary trading,'' it took many years and hundreds 
of pages of regulation to attempt to define what that even means. As 
yet, Congress has not received a working definition, in the opinion of 
some. Dr. Liang, given that, if confirmed, you could be involved in use 
of enormous power and authority over large sectors of financial markets 
and the economy, please respond to the following questions:

    How do you define financial stability, and how do you measure 
whether the financial system is stable and whether there is a threat to 
stability?

    How do you define systemic risk and what measure do you use to 
monitor it?

    How do you define ``excessive risk'' and what is the measure used 
to identify it?

    Answer. A stable financial system can be defined as one that is 
resilient to adverse events and can continue to provide necessary 
financial services to households and businesses and not cause serious 
harm to economic growth. Systemic risks can arise from financial 
vulnerabilities, such as high leverage, that amplify adverse shocks to 
other parts of the financial system and economy. Financial 
vulnerabilities are measured in a number of ways. The annual reports of 
FSOC and the Office of Financial Research provide various measures and 
assessments of vulnerabilities and potential systemic risks.

    Question. Do you believe that a breach of the U.S. statutory debt 
limit represents a grave threat to financial stability? If so, is an 
approaching lapse in the suspension of the debt limit something that 
the FSOC should be identifying as an impending risk to financial 
stability and responding to?

    Answer. I believe Congress should suspend or raise the debt limit 
in a timely manner. It is important that the Federal Government honor 
all of its obligations, to protect the full faith and credit of the 
United States. Failure to do so would raise debt-servicing costs for 
the U.S. government and cause significant disruptions to the U.S. and 
global financial systems. FSOC has addressed these risks in the past, 
including in its 2012 and 2014 annual reports.

    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 cyberattacks, 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 made of the Federal Reserve Board and Treasury did not 
receive adequate or substantive responses. It took subpoenas from 
Congress to identify that, in fact, Treasury and the Fed do have 
contingency plans, as we would hope is the case, for confronting 
emergencies.

    If you are confirmed, and if requested, do 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 (e.g., superstorm, 
cyberattack, etc.), the Federal Government is temporarily unable to 
make timely payments on debt obligations?

    Answer. If confirmed, I am committed to being responsive to all 
inquiries from the Senate Finance Committee.

    Question. Do you believe that money market funds remain runnable 
and do you think they represent threats to financial stability?

    Answer. Research indicates that some money market funds faced 
investor runs in March 2020. I support regulatory reforms to reduce the 
risk of investor runs that lead to severe stresses in short-term 
funding markets.

    Question. Do you believe that tri-party repo trades are, in effect, 
runnable, do you think they represent threats to financial stability, 
and do you think they are stable, independent of Federal intervention 
into repo markets?

    Answer. Reform efforts in the tri-party repo market following the 
financial crisis in 2008 substantially reduced the market's reliance on 
intraday credit, thus eliminating a key risk to financial market 
stability stemming from the tri-party repo market. In addition, these 
reforms improved market participants' risk-management practices. 
However, the market may remain vulnerable to collateral fire sales if a 
large tri-party repo borrower were to default.

    Question. Do you believe that underfunded pensions and other post-
employment benefit (OPEB) promises of State, local, and territorial 
governments are threats to financial stability or potential risks to 
stability of the financial system?

    Answer. Underfunded public pension funds are a significant source 
of fiscal pressure on several U.S. States, territories, and 
municipalities. The risks presented by these fiscal pressures upon the 
financial system warrant ongoing attention. If confirmed, I would look 
forward to working with you on this issue.

    Question. Do you believe that climate change is a threat to 
financial stability and, if so, what are measures of climate change and 
the associated connection to financial stability that Congress should 
use to monitor developments?

    Answer. Climate change has already impacted the economy and 
financial sector, with more frequent and severe natural disasters 
damaging homes, businesses, and entire communities. These impacts are 
expected to increase. In addition, the economic and financial 
transitions needed to place the economy on a sustainable path may 
involve additional financial risks. As a result, it is important that 
financial institutions measure, disclose, and manage the risks that 
climate change poses to their businesses. Financial regulators also 
should adjust their regulatory and supervisory approaches in response 
to new identified risks, to support safety and soundness and financial 
stability, consistent with their existing mandates.

    The data, methodologies, and metrics needed to quantify climate-
related financial risks remain under development. U.S. and 
international financial regulators are engaged in the development of 
consistent data and metrics. Secretary Yellen has identified climate-
related financial risks as a priority for the Financial Stability 
Oversight Council, which is engaging with regulators to help develop 
the information that financial institutions and investors need to make 
better investment decisions and mitigate risks to financial stability.

    Question. Do you believe that so-called ``stakeholder capitalism'' 
and mandated allowance for environmental, social, and governance (ESG) 
factors in investments by fiduciaries (including investments covered 
under ERISA) could pose threats to financial stability when populist 
sentiment shifts investor resources rapidly and violently across firms 
or entire sectors of the economy?

    Answer. Fiduciaries ordinarily have a duty to beneficiaries not to 
be influenced by the interest of any third person or by motives other 
than pursuing financial benefits for those beneficiaries. Some forms of 
ESG investment can be consistent with these requirements when the 
fiduciary's motive is to benefit the beneficiary by pursuing improved 
risk-adjusted investment returns. Improved disclosure of companies' ESG 
factors provides fiduciaries and other investors with better 
information to pursue such investment strategies. A financial system 
that provides investors with the tools to pursue a variety of 
investment strategies enables investors to manage their risks.

    Question. Secretary Yellen has identified that she plans to listen 
to and incorporate input from ``many stakeholders in developing the 
administration's climate policy.'' Since that policy may involve 
activities you would be involved in, if confirmed, will you commit to 
including Republicans in Congress as stakeholders from which you will 
be willing to receive input in developing policy, and will you identify 
how you intend to gather the input?

    Answer. It is important that policies be based on input from a 
variety of stakeholders, including members of Congress. If confirmed, I 
commit to working with members of Congress, including Republican 
members, on a wide range of issues.

    Question. Do you believe that climate change poses a systemic risk 
to the American economy, or a potential systemic risk? If you believe 
there is a risk or potential risk, please explicitly define exactly 
what that is, including what sectors of the economy are at risk and 
shares of GDP represented by those sectors.

    Answer. The possible risks and impacts may reach across the economy 
through the direct impact of climate change on certain regions or 
economic sectors and through the spillovers of such impacts through the 
financial system and broader economy. Climate change has already 
impacted the economy and the financial sector, with more frequent and 
severe natural disasters damaging homes, businesses, and entire 
communities. These impacts are expected to increase and may have 
spillovers to the broader economy. In addition, the economic and 
financial transitions needed to place the economy on a sustainable path 
may involve additional financial and economic risks. In light of these 
complex channels, climate change may impact all sectors of the economy 
through both new risk channels and new investment opportunities. As a 
result, it is important that financial institutions measure, disclose, 
and manage the risks that climate change poses to their businesses. 
Financial regulators must also adjust their regulatory and supervisory 
approaches in response to new identified risks, to support safety and 
soundness and financial stability, consistent with their existing 
mandates.

    Financial regulators have begun work in this area, and Secretary 
Yellen has identified climate-related financial risks as a priority for 
the work of the Financial Stability Oversight Council. Treasury is also 
actively engaged in implementing the executive order on climate-related 
financial risk, issued May 20, 2021, which calls for a number of steps 
to address climate-related risks, including the issuance of a report by 
FSOC on this topic. I support the assessment of climate-related 
financial risks by financial regulators, including work coordinated by 
FSOC, and steps to address identified vulnerabilities based on these 
assessments. It is critical that these assessments proceed in an 
expeditious and analytically sound manner.

    Question. If the Federal Reserve in the future adopts yield curve 
control measures, how, if confirmed, would you advise the Treasury 
Secretary regarding coordination (or not) with the Federal Reserve with 
respect to implications for any target by Treasury of the weighted-
average maturity of outstanding debt?

    Answer. The Federal Reserve is responsible for implementing 
monetary policy, while Treasury seeks to fund the government at the 
lowest cost over time. The two agencies exercise their respective 
authorities independently from each other. Treasury does not coordinate 
with the Federal Reserve with regard to the Federal Reserve's 
implementation of monetary policy.

    Question. The Charles Koch Foundation provided substantial funding 
to the Brookings Institution when you worked there, as did many 
``wealthy corporations'' and billionaires. Given the sensitivity of 
some to institutional funding, especially when funding is provided to 
institutions that include conservative scholars, do you believe there 
should be concern that you, in your position, if confirmed, at Treasury 
would, as alleged against a conservative scholar in the past ``serve 
the wishes of wealthy corporations and their billionaire owners?'' Do 
you believe that concerns about think-tank funders should be limited to 
organizations that allow scholars to pursue conservative thoughts?

    Answer. I am proud of the work I performed during my long career in 
public service and at the Brookings Institution. If I have the honor to 
be confirmed at Treasury, I will serve the President and the American 
people.

    Question. Do you believe that underfunded pensions and other post-
employment benefit promises of State, local, and territorial government 
should be subjected to stress tests?

    Answer. Underfunded public pension funds are a significant source 
of fiscal pressure on several U.S. States, territories, and 
municipalities. The risks presented by these fiscal pressures on the 
financial system warrant ongoing attention. If confirmed, I plan to 
study this issue closely.

    Question. If confirmed, you would likely provide advice to the 
Treasury Secretary on FSOC work. Would you advise that the Treasury 
Secretary take or urge any actions 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. I have not previously worked on issues related to your 
question, but if confirmed, I would be happy to work with you on this 
issue.

    Question. If confirmed, your work will touch on payment system 
issues. Recently, the Federal Reserve has been engaged with 
``stakeholders'' and other central banks to work on developing a 
Central Bank Digital Currency (CBDC). As part of that work, some 
political advocates would like the Fed to consider construction of a 
distributed ledger scheme to enable accounts for all Americans (or, 
perhaps all residents of America) which, once an initial signoff from 
Congress is somehow obtained, allow the Fed to engage in fiscal policy. 
Those policies could involve automatic stabilization, such as 
injections of funds into accounts in downturns or absorption of funds 
from accounts in expansions, universal basic income, perhaps with smart 
contracting allowing the Fed to be able to determine what fund-holders 
could or could not purchase in transactions. Do you commit to informing 
members of this committee, if confirmed, about any work within the 
Federal Government, or joint work of Treasury and the Federal Reserve, 
on development of a government-provided digital currency or payment 
system ledger, and inform members of the committee at the immediate 
onset of any such work?

    Answer. The Federal Reserve is currently exploring numerous issues 
associated with the design of a digital dollar, and Chairman Powell has 
committed that the Federal Reserve would not proceed with a digital 
dollar without support from Congress. Treasury plays a critical role in 
the operation and maintenance of key systems of the Nation's financial 
infrastructure and has a strong interest in the Nation's currency. The 
research and exploration being undertaken by the Federal Reserve and 
others should help us better understand the need for and objectives of 
any potential CBDC as well as key design choices and their implications 
for consumer protection and financial stability. If confirmed, I will 
promote Treasury's engagement with Congress and the Federal Reserve on 
this important issue.

    Question. Climate change, we are told by some, involves risks that 
the Federal Reserve says we do not yet understand. The Fed also says 
they are examining implications of climate change for the economy, 
financial institutions, and financial stability. A Fed official 
identifies that ``financial markets face challenges in analyzing and 
pricing climate risks.'' The President, on May 20th, issued an 
executive order on climate-related financial risk, calling, among other 
things, for the Treasury Secretary, as Chair of the FSOC, to 
essentially go find those as-yet unknown and not understood risks.

    Do you agree with the Fed that financial markets are challenged in 
analyzing and pricing climate risks?

    If so, can you identify what those mispriced risks are, and why you 
know what they are while others who participate in markets do not?

    If you do not know what those risks are, and, if confirmed, wish to 
assist Treasury in finding them, please describe the process you will 
use to discover as-yet undiscovered risks. Please, also, describe steps 
you would take to ensure that Treasury relays the findings immediately 
upon discovery, and make the discoveries immediately available to the 
public, if confirmed?

    If confirmed, do you commit to identifying to members of this 
Committee actions that Treasury may recommend or rules Treasury may 
propose to alter relevant laws (e.g., Pub. L. 93-406, ``ERISA''; Pub. L 
99-335, ``FERS,'' and the like) and rules (e.g., 85 Fed. Reg. 72846; 85 
Fed. Reg. 81658) governing the life savings and pensions of U.S. 
workers and families as well as things like fiduciary duties prior to 
taking such actions or promulgating such rules?

    Answer. Climate change has already impacted the economy and the 
financial sector, with more frequent and severe natural disasters 
damaging homes, businesses, and entire communities. These impacts are 
expected to increase. In addition, the economic and financial 
transitions needed to place the economy on a sustainable path may 
involve additional financial risks. As a result, it is important that 
financial institutions measure, disclose, and manage the risks that 
climate change poses to their businesses. Financial regulators must 
also adjust their regulatory and supervisory approaches in response to 
new identified risks, to support safety and soundness and financial 
stability, consistent with their existing mandates.

    Financial regulators have begun work in this area, and Secretary 
Yellen has identified climate-related financial risks as a priority for 
the work of the Financial Stability Oversight Council. Treasury is also 
actively engaged in implementing the executive order on climate-related 
financial risk, issued May 20, 2021, which calls for a number of steps 
to address climate-related risks, including the issuance of a report by 
FSOC on this topic. I support the assessment of climate-related 
financial risks by financial regulators, including work coordinated by 
FSOC, and steps to address identified vulnerabilities based on these 
assessments. It is critical that these assessments proceed in an 
expeditious and analytically sound manner.

    I believe it is important that Treasury work with members of 
Congress on these issues.

    Question. While the position to which you have been nominated does 
not engage much with Federal tax policy, there are interplays between 
activities you would be engaged in, if confirmed, and taxation, and it 
is presumed that you understand the administration's general policies 
toward taxation. Given that, how would you define the concept of a 
taxpaying individual business or company paying its ``fair share,'' and 
how would you advise Treasury?

    Answer. As you point out, the position for which I have been 
nominated is not responsible for decisions related to Federal tax 
policy, so I would defer to my colleagues on this issue.

    Question. Do you believe that tax credit bonds are efficient means 
of subsidizing State and local borrowing, and can you explain whether 
there are disadvantages to such bonds and, if so, what are the 
disadvantages?

    Answer. I would want to study the issue further. If I am confirmed, 
I would be happy to work with your office on this issue or to direct 
you to the relevant officials within Treasury.

    Question. Tax analysts sometimes use, often in ad hoc ways, a 
concept of a ``normal return'' and sometimes things like 
``supernormal'' returns. As an economist, what to you is meant by a 
``normal return'' to an economic activity (e.g., to teaching, or a tech 
entrepreneur, or an industry sector)? How would you advise, if 
confirmed, Treasury to measure normal returns in a particular sector of 
the economy? As a researcher while you worked at the Brookings 
Institution, were you earning normal returns to your human capital, or 
supernormal returns?

    Answer. The measurement of normal and supernormal returns is an 
important analytical concept in the economics of the taxation of 
capital. Loosely speaking, normal (nominal) returns represent 
compensation for the time value of money (such as interest costs) and 
for the effect of generalized inflation on the value of an asset. 
Supernormal returns refer to returns beyond the normal return. My 
personal expertise in this area is very limited, as I have focused on 
financial economics and policy, and I would defer to tax experts within 
Treasury and elsewhere on the proper methodologies in this technical 
area, including how to apply the concepts to wage income.

    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, whether under exigent and 
unusual circumstances or otherwise?

    Answer. I believe that the Federal Reserve's emergency facilities 
implemented last year were successful in promoting the stability of 
U.S. financial markets. I have not had an opportunity to study the 
HEROES Act but would be happy to work with you on this issue if I am 
confirmed.

    Question. If confirmed, you will participate in oversight of multi-
trillion-dollar markets for Treasury issuances, with obvious 
implications for exchange rates of actions taken in managing and 
regulating activities surrounding Treasury markets. Do you support a 
``weak dollar'' or ``strong dollar'' position for Treasury and, 
whichever, please explain what a weak or strong dollar policy means to 
you.

    Answer. The role for which I have been nominated is not responsible 
for making determinations regarding the strength of the U.S. dollar, 
but if confirmed I would be happy to follow up with you on this issue.

    Question. The GSEs--Fannie Mae and Freddie Mac--have been in 
government conservatorship for close to 13 years. While some important 
administrative reforms have been undertaken in this period, such as the 
creation of the Uniform MBS and the credit risk transfer programs, can 
you discuss the additional reforms you believe are necessary for the 
GSEs to operate in a safe and sound manner? How should Treasury balance 
protecting the taxpayers' interest in the GSEs with the need to advance 
their housing mission--how do you see this balance playing out?

    Answer. I appreciate the considerable effort that you and other 
members of Congress have devoted to evaluating the U.S. housing finance 
system and developing proposed reforms. The Biden administration is 
committed to housing finance policy that expands fair and equitable 
access to homeownership and affordable rental opportunities, protects 
taxpayers, and promotes financial stability. If confirmed, I look 
forward to working across the administration and with Congress on 
housing finance policy, including regarding the GSEs' conservatorships.

    Question. The Federal Financing Bank is an agency under the purview 
of the Department of the Treasury. We have seen it be used in some 
relatively interesting ways during its tenure, especially during the 
financial crisis, as liquidity dried up in the marketplace, including 
purchasing certificates or securities evidencing undivided beneficial 
ownership interests in agency-insured loans. As we work to wind down 
some of the extraordinary measures put into place to see us through the 
pandemic, can we get your assurance that you will work with Congress 
prior to enacting any new, extraordinary measures, such as expansion of 
the FFB?

    Answer. The FFB is authorized to purchase obligations issued, sold, 
or guaranteed by a Federal agency. As such, it does not have 
independent authority to extend Federal credit or assume risk for the 
taxpayer, but can only provide financing where Congress has first 
authorized a program agency to borrow money, guarantee or insure a loan 
or bond, or sell assets off its balance sheet. If confirmed, I will 
work with Congress to ensure use of the FFB is consistent with law and 
the Federal Government's policies.

                                 ______
                                 
                 Questions Submitted by Hon. John Thune
    Question. If confirmed, you would participate in the Financial 
Stability Oversight Council, which is in charge of identifying risks to 
the financial stability of the country. In terms of risk calculus, it's 
becoming popular among some to say that the debt-to-GDP is no longer 
meaningful. This year, the Federal Government's publicly held debt is 
projected to reach 102 percent of GDP--the highest debt-to-GDP ratio 
since 1946 according to the Congressional Budget Office. And the 
deficit is expected to reach 10.3 percent of GDP.

    In your judgment, what are the top three risks to the stability of 
the U.S. financial system (ex. inflation, cryptocurrency bubble, 
excessively loose monetary policy) and how concerning do you find the 
trajectory of the U.S. deficit?

    Answer. Risks to financial stability can arise from clear threats, 
such as cyberattacks. The increased frequency of cyberattacks is a 
significant risk to financial stability. Risks can also arise because 
the financial system is not sufficiently resilient to events that 
cannot be reliably predicted. FSOC has announced that it will be 
evaluating the resilience of nonbank financial intermediation in light 
of significant stresses in financial markets at the onset of the 
pandemic in March 2020. In addition, FSOC has announced that it is 
working with financial regulators to assess risks to financial 
institutions and markets from climate change, arising from more 
frequent climate events and transition risks as the economy and 
financial system take steps to mitigate the impact of climate change.

    With respect to the trajectory of the deficit, I believe the 
American Rescue Plan Act of 2021 is helping to preserve the economy's 
potential by preventing the loss of human capital and business 
enterprise value, which helps the economy's long-term fiscal situation. 
Looking ahead, the President has proposed investments in infrastructure 
and workers to make the economy more productive, and has proposed ways 
to pay for those investments, mitigating concerns about growth in the 
Federal debt.

    Question. If you are confirmed, and if requested, do you commit to 
providing Finance Committee members, who have oversight responsibility 
over the Federal debt, with timely responses about the statutory debt 
limit and timelines that Treasury will engage in so-called 
``extraordinary measures'' to ensure that Treasury can make all 
necessary payments and obligations? Would you commit to working with me 
to find bipartisan solutions to reduce undue risks associated with the 
debt limit?

    Answer. It is important that the Federal Government honor all of 
its obligations, to protect the full faith and credit of the United 
States. Failure to do so would cause significant disruptions to the 
U.S. and global financial systems and raise debt-
servicing costs for the U.S. Government and all other credit 
instruments that are benchmarked to Treasury interest rates, including 
mortgages and corporate debt.

    I commit to providing timely responses to inquiries from Finance 
Committee members related to the debt limit, and I would be happy to 
work with you and other members of Congress to find bipartisan 
solutions to reduce undue risks associated with the debt limit.

                                 ______
                                 
                 Question Submitted by Hon. Rob Portman
    Question. Independent monetary policy is a cornerstone of our 
economic growth and the dollar's position as a reserve currency.

    Can you pledge that you will not only respect the independence of 
our central bank, but that you will ensure you never give the 
appearance of interference in its decision-making?

    Answer. I believe that an independent central bank leads to better 
macroeconomic performance. If I am honored to be confirmed, I pledge 
that I will respect the independence of the Federal Reserve in its 
monetary policy decisions and will not interfere in its decision-
making.

                                 ______
                                 
             Questions Submitted by Hon. Patrick J. Toomey
              money market funds and open-end mutual funds
    Question. If confirmed, will you respect the SEC's jurisdiction to 
regulate money market funds?

    Answer. Yes, I will respect the SEC's jurisdiction.

    Question. At a recent Financial Stability Oversight Council (FSOC) 
meeting, Secretary Yellen expressed potential systemic concerns 
resulting from ``liquidity risks'' associated with open-end mutual 
funds and money market funds. I'm concerned this will be used to 
justify an overreaching regulatory regime for both products.

    Do you believe that money market funds should be eliminated as an 
investment vehicle?

    Answer. Money market funds are a useful investment vehicle and are 
a source of demand for short-term debt issuers. However, as events in 
2008 and in 2020 have shown, certain types of money market funds are 
prone to investor runs during episodes of broader market stress. 
Reforms introduced over the past decade have been inadequate to 
eliminate investor runs, and I support additional reforms to make the 
funds more robust to future market stress.

    Question. Do you support retaining the viability of open-end mutual 
funds as an investment vehicle?

    Answer. Yes, open-end mutual funds are a useful vehicle for 
investors and a source of demand for securities issuers. In 2020, about 
47 percent of U.S. households owned U.S.-registered mutual funds. The 
Securities and Exchange Commission has taken steps in recent years to 
improve the liquidity risk management of open-end mutual funds and to 
improve investor awareness of risks. If confirmed, I would be happy to 
work with you and your office on the regulation of open-end mutual 
funds.

    Question. Do you believe that the in-kind redemption mechanism for 
exchange-traded funds (ETFs) presents different liquidity concerns than 
cash redemptions from traditional mutual funds? If you believe there is 
a difference, please explain how that affects your views on how to 
regulate ETFs.

    Answer. I believe that any liquidity concerns for ETFs differ from 
those of traditional mutual funds, as illustrated in the financial 
market stress at the onset of the pandemic in March 2020. The 
Securities and Exchange Commission has been reviewing its ETF 
regulations in recent years, and if confirmed, I would look forward to 
engaging with them on this issue.

    Question. You have previously argued that the SEC's 2014 rules 
governing money market funds are ``working well.'' However, the March 
2020 market volatility demonstrated that the new gates established by 
these rules actually led to less stability and greater volatility by 
creating a ``first mover advantage.''

    In light of this experience, have your views on the structure of 
money market fund regulation evolved? Please explain why or why not.

    Answer. Research on the events of March 2020 showed that the option 
for certain types of money market funds to impose redemption fees or 
gates during times of stress appear to have had the effect of 
exacerbating the problems faced by these funds. I support revising the 
regulations applicable to these funds to reduce the risk of investor 
runs and to make money market funds more robust to future stress 
events.

    Question. On December 22, 2020, President Trump's Working Group on 
Financial Markets issued a report on the March 2020 pressures in the 
short-term funding markets and the resulting adverse effects on money 
market funds. The report identified 10 potential money market fund 
reforms without recommending any particular reform.

    Which, if any, of these reforms do you support?

    Answer. The SEC issued a public request for comment on the 
President's Working Group report and currently is evaluating the 
comments in considering potential reforms. I have not studied the 
report sufficiently to identify which of its reform options would most 
efficiently and effectively reduce money market funds' risk of investor 
runs, but if confirmed, I would look forward to addressing this issue.

    Question. In October 2017, the Treasury Department released a 
report and recommendations on asset management and insurance.

    Which recommendations in the report, if any, do you agree with?

    Answer. The U.S. asset management and insurance industries 
facilitate the deepest and most liquid capital markets in the world and 
provide diverse investment opportunities for investors while offering 
critical services to consumers. I have not studied all the 
recommendations in the 2017 report, but I support the general 
principles that we should protect U.S. interests in international 
standard-setting and we should avoid duplicative and conflicting 
standards. If confirmed, I look forward to working with you to see how 
Treasury can strengthen our asset management and insurance industries 
while ensuring strong investor protections and promoting sustainable 
economic growth.

    Question. On July 12, 2016, former Federal Reserve Governor Daniel 
Tarullo described the term ``shadow banking'' as evoking a ``sense of 
something hidden, furtive even'' in a speech.

    Do you believe this term should apply to open-end mutual funds 
registered with the SEC?

    Answer. Financial services in this country are provided by a 
variety of types of financial institutions and arrangements. That 
diversity is a strength of our financial system. I believe that a 
useful categorization of the financial sector is between bank and 
nonbank financial intermediation. I would place open-end mutual funds 
registered with the SEC in the nonbank financial intermediation 
category.

    Question. In 2018, the House of Representatives voted 406-4 in 
favor of the JOBS and Investor Confidence Act. Section 1501 of that 
legislation would have replaced the Dodd-Frank Act's stress test 
requirement applicable to SEC- and CFTC-regulated entities with an 
authorization to adopt rules requiring periodic analyses of financial 
condition, including available liquidity, of such entities under 
adverse economic conditions.

    Do you support this modification that the JOBS and Investor 
Confidence Act would have made?

    Answer. I believe that risks from SEC- and CFTC-regulated entities 
that are subject to the Dodd-Frank Act's stress tests are different 
from the risks posed by the largest, most complex banking 
organizations, and that regulations should reflect the differences in 
their risks.
                             systemic risk
    Question. I am concerned about the FSOC's 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.

    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.

    Will you commit that, if confirmed, you will support ensuring that 
FSOC: continues to treat SIFI designation as a last resort; maintains a 
transparent process for SIFI designation; conducts robust cost-benefit 
analysis for all designations; and provides institutions with the 
opportunity to avoid designation and, if designated, a path to reverse 
such designation?

    Answer. Congress established FSOC to bring together the financial 
regulatory community to identify and respond to emerging threats to 
financial stability and to promote market discipline. FSOC should have 
the tools to protect our financial system from instability, whether 
arising from a single firm or the risky products or activities of an 
array of firms. The designation of individual nonbank financial 
companies for Federal Reserve supervision and enhanced prudential 
standards is one of the tools Congress provided to FSOC. The Dodd-Frank 
Act lists the criteria FSOC must consider in making any designation. If 
FSOC were to use this tool, it should do so in a manner that is 
transparent and accountable--and FSOC should maintain clear procedures 
regarding how a designated firm may seek to have its designation 
rescinded. Other tools may be more appropriate to address risks that 
stem not from one firm but from the products or activities of an array 
of firms. If confirmed, I will work closely with FSOC to identify, 
assess, and to respond to potential risks using whichever tools would 
be most efficient and effective given the nature of the risks. 
Similarly, opportunities to avoid designation or to reverse a 
designation should be transparent and accountable.

    Question. Under what conditions, if any, would you advise Secretary 
Yellen to support the FSOC or the Financial Stability Board (FSB) 
designating mutual funds, ETFs, and money market funds as non-bank 
SIFIs?

    Answer. I believe that FSOC should use the tools provided by the 
Dodd-Frank Act to protect our economy from systemic risks. The 
Secretary has said that while designation may be an appropriate tool to 
address certain risks arising from an individual firm, other tools may 
be more appropriate to address risks that arise from the products or 
activities of an array of firms.

    Question. Asset managers provide investment advice to clients. They 
do not bear the risk of investments made by their clients. Asset 
managers do not own the assets that they manage.

    Should asset managers be designated by the FSOC or the FSB as non-
bank SIFIs? If so, under what conditions?

    Answer. While designation can be an important tool to address 
potential risks associated with a nonbank financial company, other 
tools may be more appropriate for addressing vulnerabilities arising 
from products or activities of an array of firms, such as asset 
managers.
                            capital markets
    Question. Despite the efforts of the 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.

    Do you agree that part of the IPO decline can be addressed by 
lowering the costs of going and staying public?

    Answer. Many factors, including the costs of going and staying 
public, have influenced the number of new IPOs and the current number 
of listed public companies in the U.S. If I am confirmed, I will work 
to promote access to capital for U.S. companies and expand investment 
opportunities for U.S. investors.

    Question. In October 2017, the Treasury Department released a 
report and recommendations on improving the capital markets.

    Which recommendations in the report, if any, do you agree with?

    Answer. The U.S. capital markets provide critical capital for 
businesses, diverse investment opportunities for investors, and 
important services for consumers. If confirmed, I would work to promote 
the strength of U.S. capital markets and a financial system that will 
lead to sustainable economic growth. If confirmed, I would be happy to 
work with you on achieving this mission.

    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. Yes, both public and private capital markets are important 
to U.S. economic growth, as each entails features that help meet the 
capital needs of companies of various sizes and in various stages of 
development.

    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. Small businesses are a vital part of the U.S. economy. The 
Treasury Department has long supported programs, such as the Jumpstart 
Our Business Startups (JOBS) Act and the State Small Business Credit 
Initiative (SSBCI), aimed at increasing access to capital for small 
businesses. Unfortunately, some businesses continue to face challenges 
in raising the capital they need to flourish. The Biden administration 
has led on this issue, improving access to funding for small businesses 
through the American Recovery Plan. If I am confirmed, I look forward 
to working with you to improve access to credit and capital for small 
businesses.

    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. Access to capital is a significant barrier to minority and 
female entrepreneurs who seek to create jobs and grow wealth in their 
communities. I strongly support the Biden administration's critical 
investments, including those being implemented now by Treasury, that 
expand access to entrepreneurial capital. More opportunities to raise 
capital would benefit entrepreneurs and communities and is important 
for U.S. economic growth.

    Question. Retail investors could benefit from increased 
diversification of their investment portfolios and potentially higher 
investment returns if they had greater 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 support policies that can help employees and other retail 
investors build wealth in order to save for a secure retirement. There 
are many important differences between investing in public and private 
markets, and between the structures and goals of defined benefit and 
defined contribution plans. If I am confirmed, I look forward to 
working with you on this issue.
                                climate
    Question. In May 2021, President Biden issued an executive order on 
climate-
related financial risks, which directs the Treasury Department to issue 
a report on how such risks could be incorporated into financial 
regulation and supervision. I am very troubled by the potential misuse 
of financial regulation to further environmental policy objectives.

    Do you believe it is appropriate for financial regulators to engage 
in environmental policy and, if so, under what authority?

    Answer. Climate change has already impacted the economy and the 
financial sector, with more frequent and severe natural disasters 
damaging homes, businesses, and entire communities. These impacts are 
expected to increase. In addition, the economic and financial 
transitions needed to place the economy on a sustainable path may 
involve additional financial risks. As a result, it is important that 
financial institutions measure, disclose, and manage the risks that 
climate change poses to their businesses. Financial regulators must 
also adjust their regulatory and supervisory approaches in response to 
new identified risks, to support safety and soundness and financial 
stability, consistent with their existing mandates.

    Financial regulators have begun work in this area, and Secretary 
Yellen has identified climate-related financial risks as a priority for 
the work of the Financial Stability Oversight Council. Treasury is also 
actively engaged in implementing the executive order on climate-related 
financial risk, issued May 20, 2021, which calls for a number of steps 
to address climate-related risks, including the issuance of a report by 
FSOC on this topic. I support the assessment of climate-related 
financial risks by financial regulators, including work coordinated by 
FSOC, and steps to address identified vulnerabilities based on these 
assessments. It is critical that these assessments proceed in an 
expeditious and analytically sound manner.
                              bank capital
    Question. You have previously acknowledged that leverage capital 
ratios should serve as a simple and transparent backstop to risk-based 
capital ratios. Yet, as the Federal Reserve continues to rapidly expand 
its balance sheet with at least $120 billion in assets purchases per 
month, bank balance sheets continue to grow, putting further pressure 
on the leverage ratios.

    If confirmed, what steps would you take to ensure that leverage 
ratios continue to serve as a backstop rather than a binding 
constraint?

    Answer. Leverage ratios are an important backstop to the risk-based 
capital requirements of banking organizations. I support the banking 
regulators' efforts to consider the appropriate setting of leverage 
ratios in light of changes in reserves. I also support regulators' 
efforts to ensure that changes do not erode bank capital levels.
                            treasury market
    Question. Over the past few years, there have been several 
disruptions in the U.S. Treasury market (both cash and futures), which 
is generally considered to be the deepest and most liquid market in the 
world. In response to these disruptions, you have endorsed four 
specific regulatory reforms: a new standing repo facility, mandatory 
central clearing, amendments to bank capital rules, and additional data 
collection.

    If confirmed, how would you prioritize this effort? What steps 
would you take to ensure that any reforms do not further disrupt the 
Treasury market?

    Answer. I am deeply committed to promoting the strength and 
resilience of the U.S. Treasury market. Treasury is engaged in an 
interagency process to study recent disruptions to the Treasury market 
and will consider a range of potential policy proposals. If confirmed, 
I would be happy to discuss this important issue with you and your 
staff.

    Question. While FINRA-registered broker-dealers are required to 
report their trading activities of Treasury securities to TRACE, other 
Treasury market participants are not required to do so.

    What do you believe would be the most important benefits with 
obtaining more complete market transaction data?

    Answer. Addressing TRACE data gaps will help to make available the 
necessary information to adequately monitor liquidity conditions in the 
Treasury market, which will help enable us to identify any 
vulnerabilities over time in this vital market.

    Question. Some observers of the Treasury market have expressed 
concerns about regulatory fragmentation, with responsibilities divided 
between five or more agencies.

    Do you believe that the current regulatory framework for oversight 
of the Treasury market is adequate? If not, what changes do you believe 
should be made?

    Answer. I agree with the observation that the current regulatory 
framework suffers from some degree of fragmentation and there are 
likely opportunities to be found that could reduce fragmentation and 
create greater efficiencies.

    That said, the current regulatory system is working; the regulatory 
agencies have good working relationships and have been able to work 
jointly to address financial market regulatory issues that have arisen.
                         housing finance reform
    Question. Over the last several Republican and Democratic 
administrations, the Treasury Department has played an active role in 
advocating reform of the housing finance system.

    Do you believe Treasury should continue to play a leadership role 
in housing finance reform?

    Answer. I appreciate the considerable effort that you and other 
members of Congress have devoted to evaluating the U.S. housing finance 
system and developing proposed reforms. The Biden administration is 
committed to housing finance policy that expands fair and equitable 
access to homeownership and affordable rental opportunities, protects 
taxpayers, and promotes financial stability. If confirmed, I look 
forward to working across the administration and with Congress on 
housing finance policy, including regarding the GSEs' conservatorships.

    Question. In January 2021, the Treasury Department and FHFA amended 
the Preferred Stock Purchase Agreement with each GSE to provide that 
Treasury will deliver to Congress a housing finance reform proposal by 
the end of September 2021.

    If confirmed, will you work to ensure that Treasury delivers that 
proposal by September, if not sooner?

    Answer. Treasury is assessing the GSEs' current status, including 
the recent amendments to the PSPAs, in addition to implementing 
programs authorized in the American Rescue Plan to help homeowners and 
renters. If confirmed, I will work to ensure that Treasury engages with 
Congress on housing finance reform in a timely manner.

                                 ______
                                 
                 Questions Submitted by Hon. Todd Young
    Question. Since the onset of the coronavirus pandemic, the United 
States government has pumped trillions of dollars into the economy and 
swelled the money supply. Since the start of his term in office, 
President Biden has laid out plans for over $7 trillion in Federal 
spending. We have heard from Secretary Yellen that Republicans' 
inflation concerns arising from this staggering government spending 
were outweighed by the need for additional stimulus, despite the fact 
that a trillion dollars of COVID relief had yet to be spent prior to 
the passage of the $1.9-trillion American Rescue Plan Act.

    What macroeconomic effects from this Federal spending spree should 
we expect over the next several years?

    Given the April CPI revealed the largest increase in inflation 
since 2008, do you agree with Secretary Yellen's recent comments at the 
Wall Street Journal's CEO Council Summit that there is no real 
inflation problem brewing?

    Are you concerned about any effects that further spending--as 
proposed by the President, despite the trillions in deficit spending 
already passed into law--will have on our economy over the next few 
years?

    Answer. The American Rescue Plan Act of 2021 provided critical 
assistance to household, businesses, and communities so that they could 
weather the severe adverse effects of the COVID pandemic. This 
assistance will strengthen the economic recovery and help to preserve 
the economy's potential. I support the President's proposed additional 
investments in infrastructure, families, and workers, which will 
increase productivity and boost U.S. economic growth in coming years. 
In addition, the President has proposed increased revenues to pay for 
these investments and to mitigate debt growth. It is important to 
monitor risks and to respond appropriately if risks materialize.

    Question. The $2-trillion ``COVID relief'' bill that was passed by 
Congress this March without bipartisan support included hundreds of 
billions of dollars in unrelated or unnecessary spending. For example, 
$350 billion was directed towards State and local aid funds despite 
recent analysis showing State revenues making a stronger comeback than 
expected: Bureau of Economic Analysis data reveals that State and local 
revenue last quarter was roughly 7 percent above pre- pandemic levels 
before accounting for Federal funding, and California Governor Gavin 
Newsom announced an enormous $75 billion budget surplus for the State 
despite it receiving the largest share of the State funding in the 
American Rescue Plan.

    Do you believe this deficit spending is a responsible use of 
Federal dollars?

    If the coronavirus pandemic subsides with trillions of relief 
dollars in reserve, should such funds be returned to the Treasury--in 
other words, returned to taxpayers? If no, why not?

    Answer. If confirmed for this position, one of my responsibilities 
would be to oversee the financing of the Federal Government's 
obligations, but determinations regarding the appropriate level of 
spending and whether to redirect previously appropriated funding are 
made by Congress.

    If confirmed, I would support following all applicable requirements 
regarding the disposition of any unused relief funds.

                                 ______
                                 
             Follow-Up Questions Submitted for the Record 
                       to J. Nellie Liang, Ph.D.
            Follow-Up Questions Submitted by Hon. Mike Crapo
    Question. The Financial Stability Oversight Council (FSOC), which 
you would participate in if confirmed, has vast authority and unclear 
objectives. It has the potential of being an unaccountable roving 
regulator with enormous authority and power.

    Among FSOC authorities are: abilities to break up firms that pose a 
``grave threat to financial stability; ability to designate `systemic 
activities' and utilities and subject those designated to heightened 
oversight and standards; ability to designate any company for 
consolidated supervision; among other things.'' Many things in the 
FSOCs objectives involve undefined, nebulous concepts such as 
``financial stability,'' and ``systemic risk.'' It has been nearly 
impossible to obtain workable definitions and measures of those 
concepts from regulators and authors of Dodd-Frank. Sometimes, requests 
for definitions of nebulous concepts such as financial stability are 
answered with similarly nebulous concepts, as with saying that: we have 
financial stability if we have financial resilience. That, 
unfortunately, simply moves from one rung of the ladder of opacity to 
another.

    Similarly, as we have seen with the Volcker Rule, which urged 
action against ``proprietary trading,'' it took many years and hundreds 
of pages of regulation to attempt to define what that even means. As 
yet, Congress has not received a working definition, in the opinion of 
some. Given that, if confirmed, you could be involved in use of 
enormous power and authority over large sectors of financial markets 
and the economy, please respond to the following questions.

    How do you define financial stability, and how do you measure 
whether the financial system is stable and whether there is a threat to 
stability?

    Follow-up: The question I posed identifies that ``sometimes, 
request for definitions of nebulous concepts such as financial 
stability are answered with similarly nebulous concepts, as with saying 
that: we have financial stability if we have financial resilience.'' 
Your response begins with: ``A stable financial system can be defined 
as one that is resilient. . . .'' Defining nebulous things with 
reference to other nebulous things is not instructive. Your response 
then ends by saying that there are a number of ways to measure 
financial vulnerabilities. My question is: how do you, with your 
experience, define and measure financial stability?

    Answer. I agree financial stability is difficult to measure 
precisely, in the same way it is difficult to measure economic 
stability. I believe a working framework for assessing financial 
stability is in terms of risks, which reflects the interaction of 
possible external shocks to the financial system and the resilience of 
the financial system, which measures the ability of the financial 
system to either absorb or significantly amplify negative shocks and 
damage real economic activity.

    Large negative shocks increase risks to financial stability, but 
such shocks, by definition, are difficult to predict. The resilience of 
a financial system can be assessed by its vulnerabilities. Substantial 
research on historical financial crises spanning decades and across 
many countries point to some common financial vulnerabilities. Key 
financial vulnerabilities include high leverage of financial 
intermediaries; significant mismatches between the funding of their 
assets and the maturity, liquidity, or currency of their liabilities; 
and complex interlinkages across financial intermediaries. Financial 
systems with such vulnerabilities are more likely to become 
dysfunctional when large negative shocks occur, severely disrupting the 
provision of credit and other financial services, which increases the 
risk of severe recession and failures of financial intermediaries that 
could require taxpayer support. Such instability is more likely when 
vulnerabilities are at large, complex financial institutions, as 
strains at such institutions have been shown to be accompanied by 
spillovers across the financial system through direct connections and 
contagion.

    The additional information of the concept of resilience can be 
illustrated by an example. Financial institutions can suffer losses 
because of significant negative shocks to the value of their assets. 
Such losses would not indicate heightened risks to financial stability 
if the financial institutions had sufficient capital and stable funding 
and were able to bear the losses on their own, without transmission to 
other firms or the financial system. But if the initial losses were to 
raise significant concerns about solvency or liquidity risks at other 
firms owing to interlinkages, the losses would be transmitted and could 
be amplified further if the other firms were also highly levered and 
had significant funding mismatches. These potential follow-on effects--
and risks to financial stability--are greater when these 
vulnerabilities are higher and resilience is lower.

    While assessing vulnerabilities is not simple, financial stability 
monitoring frameworks have made progress in measuring financial 
vulnerabilities, including frameworks to which I have contributed in 
research papers. These frameworks emphasize that there are numerous 
ways to measure financial vulnerabilities and that such assessments 
must look beyond simple single indicators. As an example, there are 
many ways to measure leverage in the financial system, each of which 
informs assessments of financial vulnerabilities at the many different 
types of financial intermediaries in the United States. For banks, 
various financial stability reports for the United States, including 
from FSOC, OFR, and the Federal Reserve, cite several regulatory risk-
weighted capital ratios and supplementary leverage ratios, as well as 
market-based measures of the probability of default of the largest 
banking firms and capital buffers under the Federal Reserve's CCAR 
assessments. For leverage in other parts of the financial sector, these 
reports may include equity-to-asset ratios for broker-dealers, 
insurers, and private funds; margins at CCPs; and surveys of terms and 
standards of credit provided to financial firms.

    All of these reports recognize that any individual measure is not 
sufficient to measure leverage for all types of financial firms and 
over time. In addition, measurement itself may change behavior, and it 
is important for monitoring frameworks to update measures to reflect 
any changes.

    If confirmed, I would be happy to discuss with you and your staff 
these issues related to measuring resilience and risks to financial 
stability.

    Question. How do you define systemic risk and what measure do you 
use to monitor it?

    Follow-up: Your response seems to say that: systemic risks can 
arise from financial vulnerabilities, and vulnerabilities can be 
measured in many ways. Given that you, if confirmed, may impose 
guidance, rules, or regulations governing significant amount of 
resources under the guise of protecting the financial system from risks 
and vulnerabilities, it is instructive to know how you would propose 
risks or vulnerabilities be measured. Multiple measures provide 
insights, but also degrees of freedom to impose arbitrary and 
capricious rules and regulations. So, can you provide a definition and 
measure(s) of systemic risk or vulnerabilities that are limiting?

    Answer. Systemic risk is the likelihood that liquidity pressures, 
losses, or failures of individual financial intermediaries spill over 
to the broader financial system and economy, increasing the risk of a 
severe recession and need for taxpayer support to prevent the 
disorderly failure of a financial institution.

    There is ongoing research to develop measures of systemic risk. 
This research demonstrates the value of considering a wide range of 
metrics. Some examples include measures of financial contagion based on 
market prices, which indicate when an individual firm failure would be 
more likely to spread to other financial institutions. Other approaches 
look at financial vulnerabilities and gauge the degree of systemic risk 
by quantifying the degree to which such measures are useful predictors 
of severe economic recessions and financial crises. For example, some 
research points to excess growth in nonfinancial credit-to-GDP ratios 
as a reliable predictor of financial crises, where excess is defined as 
growth rates higher than rates in the previous business cycle 
expansion. Other work, including by me, has explored whether indicators 
of higher financial sector leverage or looser-than-average financial 
conditions are able to predict the probability that a recession will be 
more severe. This type of research provides some guidance, but not 
rules, for how authorities could assess if systemic risk was elevated 
relative to historical experience.

    Given the limited experience with specific measures of systemic 
risk, I would not support focusing on a narrow set of measures. At the 
same time, I believe it is important to monitor vulnerabilities and 
consider how they could propagate and amplify possible negative shocks 
to the broader financial system and economy when such vulnerabilities 
are meaningfully higher than historical averages or in ranges that have 
increased the probability of severe recessions or financial crises in 
the past.

    If confirmed, I would be happy to discuss with you and your staff 
issues related to measuring systemic risk and risks to financial 
stability.

    Question. Do you believe that a breach of the U.S. statutory debt 
limit represents a grave threat to financial stability? If so, is an 
approaching lapse in the suspension of the debt limit something that 
the FSOC should be identifying as an impending risk to financial 
stability and responding to?

    Follow-up: (i) Your response puts forward your belief that Congress 
should suspend or raise the limit. Do you agree that suspending or 
raising the limit cannot be done by Congress alone?

    Answer. It is my understanding that suspending or raising the debt 
limit must be accomplished in legislation passed by Congress and signed 
into law by the President.

    Follow-up: (ii) Do you believe that a breach of the limit 
represents a grave threat to financial stability?

    Answer. I believe that not paying the obligations of the U.S. 
government would undermine the confidence in U.S. Treasury securities. 
That would be a grave threat to financial stability if investors were 
to reassess the value of Treasury securities, given that Treasury 
securities are viewed widely as a risk-free, highly liquid asset and 
are used as a benchmark to price nearly all other global financial 
assets.

    Follow-up: (iii) Your response identifies that the FSOC has 
addressed risks associated with debt limits. They have, though 
typically inside broad reports that are not contemporaneous with 
buildup of the relevant risks. If such a risk is impending, do you 
believe the FSOC should be contemporaneously identifying the risk and 
responding to the risk?

    Answer. FSOC could identify impending risks associated with the 
debt limit, but in past impasses, Treasury has made public statements 
regarding the need to suspend or raise the debt limit. When Treasury 
makes a public statement, I do not believe that FSOC needs to 
contemporaneously identify the risk.

    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 made of the Federal Reserve Board and Treasury did not 
receive adequate or substantive responses. It took subpoenas from 
Congress to identify that, in fact, Treasury and the Fed do have 
contingency plans, as we would hope is the case, for confronting 
emergencies.

    If you are confirmed, and if requested, do 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 (e.g., superstorm, 
cyberattack, etc.), the Federal Government is temporarily unable to 
make timely payments on debt obligations?

    Do you believe that money market funds remain runnable and do you 
think they represent threats to financial stability?

    Do you believe that tri-party repo trades are, in effect, runnable, 
do you think they represent threats to financial stability, and do you 
think they are stable, independent of Federal intervention into repo 
markets?

    Do you believe that underfunded pensions and other post-employment 
benefit (OPEB) promises of State, local, and territorial governments 
are threats to financial stability or potential risks to stability of 
the financial system?

    Follow-up: Your response indicates that underfunded public pensions 
are fiscal pressures on States, territories, and municipalities that 
warrant attention. Do you believe those pressures represent threats or 
potential threats to stability of the financial system?

    Answer. These fiscal pressures represent substantial economic risks 
and financial risks, though they may not pose threats to financial 
stability. Threats to financial stability would be more likely if the 
realization of fiscal pressures led to municipal bond defaults and 
losses were transmitted and amplified through financial vulnerabilities 
to the broader financial system. These risks could be of concern to 
policymakers if the amplifications to the financial system and economy 
were substantial, leading to economic recessions or losses in the 
financial system that would require taxpayer support.

    Question. Do you believe that climate change is a threat to 
financial stability and, if so, what are measures of climate change and 
the associated connection to financial stability that Congress should 
use to monitor developments?

    Follow-up: Your answer suggests that more frequent natural 
disasters, presumably caused by climate change, and the associated 
damage: could be a threat to financial stability; unidentified ``new 
identified risks'' must be monitored, measured, and reported; and some 
in the Federal Government are at work figuring out what new risks may 
be present, how to measure them, and how to tell investors about those 
things that are not yet fully know, measured, or reported. Is that a 
correct representation of your response?

    Answer. I believe climate change is creating risks that are larger 
for investors and institutions when evaluating new credit extensions 
and business operations than in the past owing to the increasing impact 
of climate change on the global economy. Many in the private sector and 
researchers, among others, view larger potential risks, as well as 
potential opportunities, as requiring new approaches and data. As a 
result, I see a role for the government, working with the private 
sector, to improve disclosures about the effects of climate change on 
companies by facilitating efforts to improve comparability and 
consistency across companies so that investors can make better-informed 
decisions. The government can further provide a useful forum for 
discussions among investors, companies, and regulators on developing 
consistent disclosures and data to help to assess potential risks. I do 
not believe that the Federal Government is telling investors what the 
new risks are and how to measure them.

    If I were to be confirmed, I would be happy to work with you and 
your staff on this important issue.

    Question. Do you believe that so-called ``stakeholder capitalism'' 
and mandated allowance for environmental, social, and governance (ESG) 
factors in investments by fiduciaries (including investments covered 
under ERISA) could pose threats to financial stability when populist 
sentiment shifts investor resources rapidly and violently across firms 
or entire sectors of the economy?

    Follow-up: Do you believe that Federal financial regulators should 
mandate incorporation of ESG factors in required financial disclosures 
of private companies, and are there any possible systemic risks as 
suggested in my question?

    Answer. The question of whether ESG factors should be mandatory in 
financial disclosures of private firms would be an issue for the SEC. I 
have not studied this issue, but would be happy to work with you on it 
if I were to be confirmed.

    In terms of whether rapid and unexpected shifts in sentiment could 
pose systemic risks, it would depend on whether substantial 
vulnerabilities were present to amplify such changes in sentiment, as I 
described in my response to the question above. A high degree of common 
asset holdings and common business models could be a vulnerability 
because all investors or firms could react in the same way to a 
negative event, but unless holdings are substantial and accompanied by 
high leverage, a shift may not create a significant risk to financial 
stability. Absent vulnerabilities, a shift in sentiment would mainly 
represent a change in investors' valuations of a type of asset.

    Question. Secretary Yellen has identified that she plans to listen 
to and incorporate input from ``many stakeholders in developing the 
administration's climate policy.'' Since that policy may involve 
activities you would be involved in, if confirmed, will you commit to 
including Republicans in Congress as stakeholders from which you will 
be willing to receive input in developing policy, and will you identify 
how you intend to gather the input?

    Do you believe that climate change poses a systemic risk to the 
American economy, or a potential systemic risk? If you believe there is 
a risk or potential risk, please explicitly define exactly what that 
is, including what sectors of the economy are at risk and shares of GDP 
represented by those sectors.

    If the Federal Reserve in the future adopts yield curve control 
measures, how, if confirmed, would you advise the Treasury Secretary 
regarding coordination (or not) with the Federal Reserve with respect 
to implications for any target by Treasury of the weighted-average 
maturity of outstanding debt?

    Follow-up: Your response indicates that monetary policy 
implementation and debt management are distinct and should not be 
coordinated by Treasury and the Federal Reserve (Fed). Give that, and 
given that the Treasury Burrowing Advisory Council regularly briefs 
Treasury officials about the interplay between Treasury security 
purchases by the Fed and Treasury's debt management policies, do you 
believe that Fed balance-sheet activities involving Treasury security 
purchases should be taken as a given by Treasury, to which Treasury's 
debt-management policies should adapt; or, should the Fed take 
Treasury's policies and adapt its balance-sheet activities in response?

    Answer. I believe the mandates for Federal Reserve monetary policy 
and Treasury's debt management are distinct. Treasury's objective is to 
fund the Federal Government at the lowest cost over time. Relevant 
factors include the demand for Treasury securities across different 
maturities, which are purchased by a wide range of investors with 
various preferences, and many types of investors are discussed by the 
Treasury Borrowing Advisory Council. If I were to be confirmed, I would 
expect to learn more about Treasury's issuance practices and how it 
meets its objective of lowest cost over time.

    Question. The Charles Koch Foundation provided substantial funding 
to the Brookings Institution when you worked there, as did many 
``wealthy corporations'' and billionaires. Given the sensitivity of 
some to institutional funding, especially when funding is provided to 
institutions that include conservative scholars, do you believe there 
should be concern that you, in your position, if confirmed, at Treasury 
would, as alleged against a conservative scholar in the past ``serve 
the wishes of wealthy corporations and their billionaire owners?'' Do 
you believe that concerns about think-tank funders should be limited to 
organizations that allow scholars to pursue conservative thoughts?

    Do you believe that underfunded pensions and other post-employment 
benefit promises of State, local, and territorial government should be 
subjected to stress tests?

    Follow-up: Your response indicates that underfunded State, local, 
and territorial benefit promises are a significant source of fiscal 
pressure on those jurisdiction, but you will study the issue further 
before being able to answer whether you believe those underfunded 
promises should be subject to stress tests. Is that an accurate 
assessment?

    Answer. Before determining whether underfunded pensions and similar 
obligations should be subject to stress tests, I would want to study 
this issue further. The question of whether stress tests would be 
beneficial in this context would depend on whether stress tests would 
be helpful to reduce underfunding.

    Question. If confirmed, you would likely provide advice to the 
Treasury Secretary on FSOC work, if confirmed. Would you advise that 
the Treasury Secretary take or urge any actions 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?''

    If confirmed, your work will touch on payment system issues. 
Recently, the Federal Reserve has been engaged with ``stakeholders'' 
and other central banks to work on developing a Central Bank Digital 
Currency (CBDC). As part of that work, some political advocates would 
like the Fed to consider construction of a distributed ledger scheme to 
enable accounts for all Americans (or, perhaps all residents of 
America) which, once an initial signoff from Congress is somehow 
obtained, allow the Fed to engage in fiscal policy. Those policies 
could involve automatic stabilization, such as injections of funds into 
accounts in downturns or absorption of funds from accounts in 
expansions, universal basic income, perhaps with smart contracting 
allowing the Fed to be able to determine what fund-holders could or 
could not purchase in transactions. Do you commit to informing members 
of this committee, if confirmed, about any work within the Federal 
Government, or joint work of Treasury and the Federal Reserve, on 
development of a government-provided digital currency or payment system 
ledger, and inform members of the committee at the immediate onset of 
any such work?

    Follow-up: (i) Do you believe that there are important privacy and 
legal-authority issues associated with the Federal Reserve designing a 
CBDC, in addition to the consumer protection and financial stability 
issues that you identify?

    Answer. Yes, I believe there are important privacy issues 
associated with a possible CBDC and that such issues would depend on 
its structure. I would defer to legal counsel on the legal-authority 
issues.

    Follow-up: (ii) Your response identifies that Federal Reserve and 
others' research and explorations with respect to CBDC should help us 
``understand the need for'' any potential CBDC. Do you believe there is 
a need for a CBDC and, if so, what is the need?

    Answer. I do not presume a need for a CBDC. My earlier response was 
meant to convey that research on how changes in consumer demand for 
financial services because of new technologies and the provision of 
those services by the private sector could be helpful to assess whether 
there is any need for a CBDC.

    Question. Climate change, we are told by some, involves risks that 
the Federal Reserve says we do not yet understand. The Fed also says 
they are examining implications of climate change for the economy, 
financial institutions, and financial stability. A Fed official 
identifies that ``financial markets face challenges in analyzing and 
pricing climate risks.'' The President, on May 20th, issued an 
executive order on climate-related financial risk, calling, among other 
things, for the Treasury Secretary, as Chair of the FSOC, to 
essentially go find those as-yet unknown and not understood risks.

    Do you agree with the Fed that financial markets are challenged in 
analyzing and pricing climate risks?

    If so, can you identify what those mispriced risks are, and why you 
know what they are while others who participate in markets do not?

    Follow-up: Your response did not address the second question.

    Answer. I do not presume to know all the potential financial risks 
from climate change. Members of the private sector have emphasized how 
risks from climate change may be difficult to gauge in light of limited 
data and experience. I believe that working with the private sector to 
produce consistent and comparable information will be helpful to better 
understand these issues.

    Question. If you do not know what those risks are and, if 
confirmed, wish to assist Treasury in finding them, please describe the 
process you will use to discover as-yet undiscovered risks. Please, 
also, describe steps you would take to ensure that Treasury relays the 
findings immediately upon discovery, and make the discoveries 
immediately available to the public, if confirmed?

    Follow-up: Your response did not address the question.

    Answer. If confirmed, I would work to develop information that is 
helpful to the private sector and regulators to identify potential 
financial risks and rewards from climate change. Any process would 
start with developing better data to enable risk identification and 
assessment. Treasury can play an important role to convene businesses, 
investors, and regulators to identify the information that would be 
useful.

    If confirmed, I will ensure that Treasury relays information on any 
actions taken and findings from work on assessing climate-related 
financial risks. The executive order on climate-related financial risk 
requires the Secretary of the Treasury to engage with members of the 
FSOC to identify actions the regulatory agencies are taking to assess 
climate risks and to issue a report within 180 days.

                                 ______
                                 
                 Prepared Statement of Hon. Ron Wyden, 
                       a U.S. Senator From Oregon
    The Finance Committee meets this morning to discuss four 
nominations that will round out President Biden's team leading the 
Treasury Department.

    Lily Batchelder is nominated to serve as Assistant Secretary for 
Tax Policy. Professor Batchelder is not only a leader when it comes to 
crafting tax policies that bring working Americans into the economic 
winner's circle, she's also a friend of the committee.

    From 2010 until 2014 she served as Chief Tax Counsel to then-
Chairman Max Baucus, and later became the Deputy Director of the 
National Economic Council under President Obama. She has always been an 
advocate of the proposition that tax policy isn't just about raising 
revenue. She knows, for example, that tax policy can drive inequality--
or help to solve it--and help create high-wage, high-skill jobs in 
America. We are always happy to welcome Professor Batchelder back to 
the committee.

    While we're on the topic of friends of the Finance Committee, Jon 
Davidson is nominated to serve as Assistant Secretary for Legislative 
Affairs. Mr. Davidson is well-known and highly respected in these 
corridors. For a decade he's served as Chief of Staff to Senator 
Bennet. Folks who spend their days working on economic policy know that 
Senator Bennet's team is the gold standard when it comes to designing 
and building support for policies that help working families and the 
middle class get ahead. Mr. Davidson brings decades of Capitol Hill 
experience to his nomination, and he played a key role in the 
transition that helped the Biden administration hit the ground running 
on January 20th.

    Ben Harris is nominated to serve as Assistant Secretary for 
Economic Policy. If President Biden is known for any one thing, it's 
his lifelong, principled commitment to working people in downtrodden 
communities like Scranton, PA. It takes a lot of hard work and 
planning--never more so than during a severe jobs crisis--to build an 
agenda of fresh, bold economic policies reflecting those core Biden 
principles. Dr. Harris has been right at the heart of that process. His 
work has proven wrong anybody who thought the Biden administration was 
going to take half-steps rather than huge strides to help people get 
ahead in the wake of the COVID crash.

    Nellie Liang is nominated to serve as Under Secretary for Domestic 
Finance. There hasn't been a Senate-confirmed official in this position 
since 2014, so I'm pleased that President Biden has put forward such a 
highly qualified nominee. Dr. Liang has 3 decades of experience at the 
Federal Reserve. She was the first-ever Director of the Division of 
Financial Stability upon its creation in 2010, coming out of the Great 
Recession. Her experience in that position is going to be key to her 
work at the Treasury, leading an office focused on protecting our 
economy from risks and downturns.

    Bottom line, the group joining the committee today is an all-star 
team of economic policymakers focused on policies that give everybody 
in America a chance to get ahead, not just those at the top. These 
nominees are as highly qualified as they come. They're going to be 
strong additions to Secretary Yellen's leadership team at the Treasury, 
along with Deputy Secretary Adeyemo. And this committee is going to 
lean often on their expertise in the months ahead, as it continues work 
on several major economic challenges.

    Tomorrow the committee will have a debate on proposals aimed at 
bringing our energy tax system into the 21st century and creating a 
wave of clean energy jobs in America. The committee is working on 
changes to the international corporate tax system based on the 
proposition that everybody ought to pay a fair share--even the big 
mega-corporations that got a huge tax handout from the 2017 Trump tax 
law. The committee is working with the Treasury on the new child tax 
credits, as well as efforts to close the tax gap and rebuild IRS 
resources to crack down on cheating by high-flyers. And there are many 
other areas of the President's economic agenda that will involve a lot 
of hard work in this committee.

    So the Finance Committee will be keeping these nominees busy in the 
months ahead. I want to thank them for joining the committee today, and 
I look forward to their testimony.

                                   [all]