    [House Hearing, 119 Congress]
    [From the U.S. Government Publishing Office]

                     THE ANNUAL TESTIMONY OF THE SECRETARY
                          OF THE TREASURY ON THE STATE
                     OF THE INTERNATIONAL FINANCIAL SYSTEM

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

                                    HEARING

                                   before the

                        COMMITTEE ON FINANCIAL SERVICES

                         U.S. HOUSE OF REPRESENTATIVES

                        ONE HUNDRED NINETEENTH CONGRESS

                                 FIRST SESSION
                                   __________

                                  MAY 7, 2025
                                   __________

                               Serial No. 119-20

           Printed for the use of the Committee on Financial Services

                    [GRAPHIC NOT AVAILABLE IN TIFF FORMAT]

                                www.govinfo.gov

                                   ______

                     U.S. GOVERNMENT PUBLISHING OFFICE

    60-550 PDF                WASHINGTON : 2026

                      HOUSE COMMITTEE ON FINANCIAL SERVICES

                        FRENCH HILL, Arkansas, Chairman

    BILL HUIZENGA, Michigan, Vice        MAXINE WATERS, California, Ranking
        Chairman                             Member
    FRANK D. LUCAS, Oklahoma             SYLVIA R. GARCIA, Texas, Vice
    PETE SESSIONS, Texas                     Ranking Member
    ANN WAGNER, Missouri                 NYDIA M. VELAZQUEZ, New York
    ANDY BARR, Kentucky                  BRAD SHERMAN, California
    ROGER WILLIAMS, Texas                GREGORY W. MEEKS, New York
    TOM EMMER, Minnesota                 DAVID SCOTT, Georgia
    BARRY LOUDERMILK, Georgia            STEPHEN F. LYNCH, Massachusetts
    WARREN DAVIDSON, Ohio                AL GREEN, Texas
    JOHN W. ROSE, Tennessee              EMANUEL CLEAVER, Missouri
    BRYAN STEIL, Wisconsin               JAMES A. HIMES, Connecticut
    WILLIAM R. TIMMONS, IV, South        BILL FOSTER, Illinois
        Carolina                         JOYCE BEATTY, Ohio
    MARLIN STUTZMAN, Indiana             JUAN VARGAS, California
    RALPH NORMAN, South Carolina         JOSH GOTTHEIMER, New Jersey
    DANIEL MEUSER, Pennsylvania          VICENTE GONZALEZ, Texas
    YOUNG KIM, California                SEAN CASTEN, Illinois
    BYRON DONALDS, Florida               AYANNA PRESSLEY, Massachusetts
    ANDREW R. GARBARINO, New York        RASHIDA TLAIB, Michigan
    SCOTT FITZGERALD, Wisconsin          RITCHIE TORRES, New York
    MIKE FLOOD, Nebraska                 NIKEMA WILLIAMS, Georgia
    MICHAEL LAWLER, New York             BRITTANY PETTERSEN, Colorado
    MONICA DE LA CRUZ, Texas             CLEO FIELDS, Louisiana
    ANDREW OGLES, Tennessee              JANELLE BYNUM, Oregon
    ZACHARY NUNN, Iowa                   SAM LICCARDO, California
    LISA MCCLAIN, Michigan
    MARIA SALAZAR, Florida
    TROY DOWNING, Montana
    MIKE HARIDOPOLOS, Florida
    TIM MOORE, North Carolina

                          Ben Johnson, Staff Director

                             C  O  N  T  E  N  T  S

                                  ----------

                             Wednesday, May 7, 2025
                               OPENING STATEMENT

                                                                       Page
    Opening Statement of Hon. French Hill, Chairman of the Committee
      on Financial Services, a U.S. Representative From Arkansas.....     1
    Opening Statement of Hon. Maxine Waters, Ranking Member of the
      Committee on Financial Services, a U.S. Representative From
      California.....................................................     3

                                   STATEMENTS

    Statement of Warren Davidson, Chair of the Subcommittee on
      National Security, Illicit Finance, and International Financial
      Institutions, a U.S. Representative From Ohio..................     4
    Statement of Joyce Beatty, Ranking Member of the Subcommittee on
      National Security, Illicit Finance, and International Financial
      Institutions, a U.S. Representative From Ohio..................     4

                                   WITNESSES

    Statement of Honorable Scott Bessent, Secretary, United States
      Treasury.......................................................     5
        Prepared statement...........................................     7

                                    APPENDIX

                       MATERIALS SUBMITTED FOR THE RECORD

                     RESPONSES TO QUESTIONS FOR THE RECORD

    Written responses to questions for the record from Representative
      French Hill....................................................    62
    Written responses to questions for the record from Representative
      Frank D. Lucas.................................................    66
    Written responses to questions for the record from Representative
      Ann Wagner.....................................................    67
    Written responses to questions for the record from Representative
      Daniel Meuser..................................................    68
    Written responses to questions for the record from Representative
      Zachary Nunn...................................................    68
    Written responses to questions for the record from Representative
      Bryan Steil....................................................    71
    Written responses to questions for the record from Representative
      Stephen F. Lynch...............................................    73
    Written responses to questions for the record from Representative
      Gregory W. Meeks...............................................    76
    Written responses to questions for the record from Representative
      Joyce Beatty...................................................    77
    Written responses to questions for the record from Representative
      Rashida Tlaib..................................................    77
    Written responses to questions for the record from Representative
      Sylvia R. Garcia...............................................    80
    Written responses to questions for the record from Representative
      Nikema Williams................................................    81
    Written responses to questions for the record from Representative
      Maxine Waters..................................................    84

                                  LEGISLATION

    H.R. ----, the Small Business Relief Act of 2025.................   117
    H.R. 2548, the Sanctioning Russia Act of 2025....................   121
    H.R. ----, the Preventing the Escalation of Armed Conflict in
      Europe Act of 2025 (PEACE Act of 2025).........................   152
    H.R. ----, the Special Drawing Rights Oversight Act of 2025......   157
    H.R. ----, the No New Burma Funds Act............................   162

                     THE ANNUAL TESTIMONY OF THE SECRETARY
                          OF THE TREASURY ON THE STATE
                     OF THE INTERNATIONAL FINANCIAL SYSTEM

                                  ----------

                             Wednesday, May 7, 2025

                         U.S. House of Representatives,
                               Committee on Financial Services,
                                                        Washington, DC.

        The committee met, pursuant to notice, at 10:05 a.m., in
    room 2128, Rayburn House Office Building, Hon. J. French Hill
    [chairman of the committee] presiding.
        Present: Representatives Hill, Lucas, Sessions, Huizenga,
    Wagner, Barr, Williams of Texas, Loudermilk, Davidson, Rose,
    Steil, Timmons, Stutzman, Meuser, Kim, Donalds, Garbarino,
    Fitzgerald, Lawler, De La Cruz, Ogles, Salazar, Downing,
    Haridopolos, Moore, Waters, Velazquez, Sherman, Meeks, Scott,
    Lynch, Green, Cleaver, Himes, Foster, Beatty, Vargas, Gonzalez,
    Casten, Pressley, Tlaib, Torres, Garcia, Williams of Georgia,
    Fields, Bynum, and Liccardo.
        Chairman Hill. The Subcommittee on Financial Services will
    come to order. Without objection, the Chair is authorized to
    declare a recess at any time.
        This hearing is titled: The Annual Testimony of the
    Secretary of the Treasury on the state of the International
    Financial System. Without objection, all members will have five
    legislative days within which to submit extraneous materials to
    the Chair for inclusion in the record. I now recognize myself
    for an opening statement.

        OPENING STATEMENT OF HON. FRENCH HILL, CHAIRMAN OF THE
      COMMITTEE ON FINANCIAL SERVICES, A U.S. REPRESENTATIVE FROM
                                ARKANSAS

        I want to welcome Treasury Secretary Bessent to his first
    appearance before our committee. The President is fortunate to
    have a cabinet official of this fine caliber. This annual
    hearing is meant to examine the international financial system.
        The International Monetary Fund (IMF), the World Bank, and
    the Regional Development Banks play a key role in advancing
    U.S. interests but in recent years, they have surrendered to
    mission creep.
        Under the Biden Administration, the IMF management tried to
    turn the fund into World Bank light, launching initiatives on
    climate change and social policy. If the Trump Administration
    wants to pull back the IMF's mission creep, it can start by
    scrapping the resilience and sustainability facility and
    instead focus on the poverty reduction and growth trust.
        Other reforms are just as vital. In 2021, the IMF
    management pushed through an allocation of special drawing
    rights, SDRs, that gave China over $40 billion in unconditional
    liquidity, with another $17 billion going to Russia, and $5
    billion each going to Iran and Venezuela. Congress had no say
    in the matter. Any future SDR allocations must have elected
    lawmakers buy it. Moving forward, we need leadership at the IMF
    that cares more about the fund's core mission rather than
    hurting the feelings of the Chinese Communist Party.
        Think about it. No one can say what the true growth rate is
    of the world's second largest economy. No one really
    understands how China manages its exchange rate. It narrowly
    has a trillion-dollar trade surplus and a Central Bank
    controlled by an authoritarian, dictatorial political party.
    Its opaque predatory lending to developing countries has seen
    no significant restructuring. All this is an indictment of the
    IMF's leadership, and we need greater transparency.
        Turning from the IMF, the World Bank and the Asian
    Development Bank still green-light a billion dollars per year
    for Chinese projects. I urge the Trump Administration to end
    all World Bank and Asian Development Bank assistance of China
    by end of President Trump's term.
        At the same time, I commend the World Bank for its recent
    openness to financing nuclear energy, which is a priority of
    mine and enjoys bipartisan support here in Congress. During the
    spring meetings last month, I met with officials from around
    the world who agree that nuclear power is an obvious fit for
    the development bank's core mission. I was pleased to see you,
    Mr. Secretary, echo your importance for nuclear energy and your
    remarks at the bank meetings as well.
        If we care about back-to-basics approach, the banks can go
    even further by recommitting themselves to public health,
    education, and infrastructure. For example: 70 percent of 10-
    year-olds in low-and middle-income countries cannot understand
    a simple written text; over 400,000 children die of malaria
    each year; half of Sub-Saharan Africa has no reliable
    electricity, but for too long the World Bank and others have
    spent more time and more money on climate change and entry
    empty rhetoric than trying to tackle these urgent development
    challenges.
        Mr. Secretary, our committee appreciated your remarks at
    the IMF and World Bank spring meetings where you outlined an
    active approach to these issues and noted the critical
    leadership role that the United States plays in our
    multilateral financial institutions.
        We should all be pleased that Treasury has a leader who has
    signaled that he will tackle these issues in a serious way. I
    look forward to discussing our international financial
    institutions with you as well as hearing from our members on
    the various priorities that are important to them. I yield
    back.
        The Chair now recognizes the Ranking Member of the
    committee, Ms. Waters, for 4 minutes for an opening statement.

    OPENING STATEMENT OF HON. MAXINE WATERS, RANKING MEMBER OF THE
      COMMITTEE ON FINANCIAL SERVICES, A U.S. REPRESENTATIVE FROM
                               CALIFORNIA

        Ms. Waters. Thank you, Mr. Chairman. Since the first day of
    the Trump Administration, Members of Congress and the American
    public have demanded transparency and accountability regarding
    the economic calamity this regime has caused. Instead, we have
    been met with flat outright lies, deception, and unfathomable
    level of gaslighting by officials like today's witness.
    Secretary Bessent, you are about to go down in history as the
    man who oversaw one of the most significant economic downfalls
    in modern history.
        The U.S. economy, which had the strongest recovery from the
    pandemic, compared to other large economies in the world is now
    falling behind. In the first quarter since Trump took office,
    the United States economy shrank without gross domestic
    products, decreasing by 0.3 percent. We are falling behind
    while Canada, Europe, and China are racing ahead. What happened
    to the Golden Age you and President Trump promised the American
    people?
        Secretary Bessent, you are also the face of what the Wall
    Street Journal has described as, and I quote, the dumbest trade
    war in history. As a result of this stupidity, U.S. stock
    markets had experienced the worst first 100 days of any
    Presidential term in more than 50 years. America's CEOs are
    sounding the alarm of what is to come. Empty shelves and higher
    prices that the American consumer will pay. Companies are
    already running out of inventory. Port volume is down and small
    businesses are warning that they will not survive this.
    Moreover, inflation remains a problem, and housing
    affordability continues to be a challenge, with homebuilders
    estimating Trump's tariffs will add $11,000 to each new home
    they build.
        I have no doubt that what I am telling you, I am telling
    you stuff you already know. It has already been reported that
    you yourself admitted in an April 22 closed-door investor
    Summit that Trump's tariffs on China are quote, unsustainable,
    unquote, but in public, you have twisted yourself into a
    pretzel trying to justify them. You are gaslighting the
    American people into believing that this chaos is all a part of
    some master plan.
        If the plan is to steer the U.S. economy into a recession
    as economists are predicting, then it is working. Economists
    say Trump tariffs will cost on the average each American family
    nearly $5,000 more per year.
        Mr. Bessent, because you and your ultra wealthy group of
    insiders can afford this, most Americans cannot. The American
    people also deserve to know why you handed Elon Musk and his
    Department of Government Efficiency (DOGE) minions access to
    Treasury's payment system and the Consumer Financial Protection
    Bureau's data base.
        Today, you need to tell the American people why you are
    dismantling agencies that protect consumers from financial
    fraud and abuse and weakening ones meant to support the small
    businesses struggling under the weight of your policies. You
    need to answer for this, and you need to answer for senior
    members of this administration who are trying to make a buck
    off of this market manipulation and blatant, brazen corruption.
        Chairman Hill, if I were you, I would swear this witness in
    before he begins his testimony.
        Chairman Hill. The gentlewoman yields back. The Chair
    recognizes the Chair of the Subcommittee on National Security,
    Illicit, Finance, and International Financial Institutions, Mr.
    Warren Davidson for 1 minute for an opening statement.
        Mr. Davidson.

      STATEMENT OF WARREN DAVIDSON, CHAIR OF THE SUBCOMMITTEE ON
    NATIONAL SECURITY, ILLICIT FINANCE, AND INTERNATIONAL FINANCIAL
             INSTITUTIONS, A U.S. REPRESENTATIVE FROM OHIO

        Mr. Davidson. Thank you, Chairman.
        Mr. Secretary, thank you for joining us today. We really
    appreciate you. As this committee gathers to discuss the state
    of the international financial system, your remarks at the
    conclusion of the IMF World Bank spring meetings hit the bull's
    eye. Your vision to steer the IMF and World Bank back to their
    core missions, macroeconomic stability, and economic
    development while cutting through mission creep is exactly what
    we need. By championing fiscal discipline, anti-corruption
    measures, and private-sector-led growth, you are paving the way
    for a sustainable global economy.
        America is done bank rolling China's gains and their trade
    scams. Your call for fairness in U.S. leadership nails it.
    Tying our dollars to hard reforms at these international
    institutions, that is accountability that we can and should
    trust. America first must mean that America's resources advance
    America's interest. So thank you for your clarity and your
    tireless efforts, Mr. Secretary.
        Let us make sure that the global financial system serves
    main street Americans, not globalist elites. Mr. Chairman, I
    yield back.
        Chairman Hill. The gentleman yields back.
        The Chair recognizes the Ranking Member of the Subcommittee
    on National Security, Illicit Finance, and International
    Financial Institutions, Mrs. Beatty, for 1 minute for an
    opening statement.

         STATEMENT OF HON. JOYCE BEATTY, RANKING MEMBER OF THE
        SUBCOMMITTEE ON NATIONAL SECURITY, ILLICIT FINANCE, AND
     INTERNATIONAL FINANCIAL INSTITUTIONS, A U.S. REPRESENTATTIVE
                               FROM OHIO

        Mrs. Beatty. Mr. Chairman, Ranking Member, and Mr.
    Secretary, first let me start by associating myself with the
    words of Ranking Member Waters. Mr. Secretary, hardworking
    American families have been struggling--as I am sure you should
    know--since the pandemic to put food on their tables and to
    keep their small businesses open. Just when the Biden
    Administration had started had to provide some relief, the
    Trump Administration came in and needlessly say tanked the
    economy.
        Despite promises to lower costs for American families, we
    see the direct opposite. I lay the blame on the Trump
    Administration. Inflation is up. Borrowing and housing costs
    are rising. The stock market is in chaos, endangering
    American's retirement savings, and the United States' economy
    shrank in the first quarter since Trump took office.
        Just to add insult to injury, Republicans are cutting
    Medicaid and food stamps to pay for huge tax cuts to
    billionaires. Our constituents deserve better. I yield back.
        Chairman Hill. The gentlewoman yields back.
        Today we welcome the testimony of Hon. Scott Bessent, the
    Secretary of the Treasury. We thank you for taking time to be
    with us. You will be recognized for 5 minutes to give an oral
    presentation of your testimony.
        Without objection, your written statement will be made part
    of the record.
        Mr. Secretary, you are now recognized for 5 minutes.

       STATEMENT OF HON. SCOTT BESSENT, SECRETARY, UNITED STATES
                                TREASURY

        Secretary Bessent. Chairman Hill, Ranking Member Waters,
    and members of the committee, I am grateful to join you today.
    At the IMF and World Bank spring meeting last month, I relayed
    an important message: America first does not mean America
    alone. To the contrary, America first seeks to expand U.S.
    leadership and international institutions like the IMF and the
    World Bank. By embracing a stronger leadership role, the United
    States will restore fairness to the international economic
    system.
        I look forward to answering your questions on this topic
    today, and I look forward to providing you with a broad
    overview of Treasury's achievements and future plans.
    Specifically, I would like to highlight the department's
    efforts to boost U.S. economic growth, improve government
    efficiency, and target illicit actors that threaten our
    national security.
        The core components of the Trump economic agenda are trade
    tax cuts and deregulations. These are not standalone policies.
    They are interlocking parts of an engine designed to drive
    economic growth and domestic manufacturing. Tax cuts can cause
    savings from deregulation and raise real incomes for families
    and businesses.
        Tariffs create an incentive for reshoring jobs and fair
    trade, and deregulation complement tariffs by making it easier
    to invest in energy and manufacturing projects. Already this
    agenda is bearing fruit.
        In the first hundred days of the new administration,
    464,000 new jobs were added to the economy. In April alone,
    over 177,000 American jobs were added; more than 40,000 more
    than economist predicted. All the while employment remains low
    while real hourly wages continue to grow.
        As important as spurring job growth is wrangling inflation
    and in this endeavor, the administration continues to make
    tangible progress. The consumer price index (CPI) for energy
    goods declined in March as did the price index for core goods.
    The CPI for all items declined for the first time since the
    coronavirus disease (COVID) pandemic.
        While the cost of goods is decreasing, so are energy
    prices. Complementary to our efforts to grow American
    prosperity, we are focused on improving efficiency across all
    levels of government, but especially the Internal Revenue
    Service (IRS). We just concluded a successful tax filing
    season, but the IRS still needs significant reforms to deliver
    efficient and cost-friendly results for the American people. In
    this endeavor, we have successfully cut 2 billion from the IRS
    information technology (IT) budget without any operational
    disruptions. We achieved these cost savings by eliminating
    renegotiating and de-scoping wasteful IT and professional
    service contracts and addressing longstanding efficiencies such
    as auto-renewed licenses unused for years. This intervention
    alone will save taxpayers hundreds of millions of dollars each
    year.
        We are also taking steps at the IRS to reduce
    administrative costs with a particular focus on paper
    processing, which has been a longstanding bipartisan goal. Last
    year, the IRS spent approximately 450 million on paper
    processing with nearly 6,500 full-time staff dedicated to the
    task. Through policy changes and automation, Treasury aims to
    reduce this expense to under 20 million by the end of President
    Trump's second term.
        In addition to making government more efficient, Treasury
    is committed to working alongside the White House to make
    America safe again. To that end, we have launched a maximum
    pressure campaign against violent cartels and terrorist
    networks. We have assessed tens of millions of dollars in civil
    penalties against organizations facilitating money laundering
    along the southern border. By leveraging sanctions, we are
    choking off the financial lifelines of terrorists, criminals,
    and hackers from Mexico and Guatemala to China and Iran.
        In the first hundred days of the new administration, we
    have set the table for a robust economy that allows main street
    to grow. With Congress and the White House working hand in
    hand, we expect to see even more positive results over the next
    few months.
        The key to expanding economic opportunity for all Americans
    is making the Trump tax cuts permanent. We are eager to work
    closely with members of this committee to pass this bill into
    law. Together, we can build a stronger, safer, and more
    prosperous America. Thank you.

        [The prepared statement of Secretary Bessent follows:]

    [GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]

        Chairman Hill. Thank you, Mr. Secretary. We will now turn
    to member questions. The Chair recognizes himself for 5 minutes
    for questions.
        Mr. Secretary, as I noted in my opening statement, I was
    pleased to see your endorsement of nuclear energy projects
    during the World Bank spring meetings last month. On a
    bipartisan basis, this committee recently passed my
    International Nuclear Energy Financing Act, which would
    establish trust funds at the World Bank, the European Bank for
    Reconstruction Development, and potentially another
    multilateral development banks. Senators from both sides of the
    aisle also support this concept.
        Would you support the idea of trust funds to benefit
    nuclear energy financing at the multilateral development bank?
        Secretary Bessent. Mr. Chairman, this administration
    supports an across-the-board effort to increase the nuclear
    power via for civilian use throughout the world. We think that
    the World Bank should make that a key effort.
        Chairman Hill. Thank you. I also referenced my work over
    the past 5 years with the Treasury and others about IMF
    reforms. You also referenced that in your talk. Recently, the
    IMF shareholders agreed to a quota increase. I appreciate the
    agreement--that this agreement does nothing to increase the
    voting power of China or Russia. If Congress were to approve
    this agreement, it would allow future administrations, to
    green-light more general special drawing rights, allocations
    close to a trillion dollars. That would mean $60 billion of new
    unconditional liquidity for the Chinese Communist Party, $25
    billion for Moscow, and $7 billion each for the regimes in
    Caracas and Iran with no sign off from Congress.
        Even if rogue regimes Financial Transmission Rights (FTRs)
    are rejected by Western countries, which we have seen in the
    case of sanction countries, they still could be exchanged
    behind the scenes for Chinese renminbi (RMB), for example. I
    believe this is unacceptable.
        Would Treasury under your leadership work with me to reform
    the SDR allocation process at the IMF?
        Secretary Bessent. Mr. Chairman, we believe the SDR process
    at the IMF should serve the goals of the United States of
    America and not other States. As I said in my speech during IMF
    week, this administration is aligned with you via in your goals
    on the SDR. Furthermore, we believe that the IMF needs to get
    back to basics in working with countries when there is a market
    failure in financial markets rather than helping large, well-
    financed countries.
        Chairman Hill. Thank you. We look forward to following up
    with you and walking through this. It will not be an easy task
    but with international leadership from the United States, I
    think we can get there, and I think we will all benefit. That
    means countries in trouble will benefit instead of just the
    general allocation approach.
        The President, since he has been in office has championed
    high-profile investment issues involving China. As everyone
    knows, he has been negotiating U.S. investors' acquisition of
    control, for example, over TikTok. In his State of the Union
    address, President Trump announced a major investment would see
    Americans take control of two ports near the Panama Canal that
    are currently owned by a Hong Kong-based.
        I am concerned that recently established outbound
    investment restrictions could make deals like this even more
    challenging. Under the regulations, U.S. investors do not
    actually know which companies are off limits, and Americans
    face bureaucratic hurdles if they want to take control from
    Chinese owners.
        What are your views on revising outbound programs to change
    this? Since the President wants strategically to see American
    investors take control perhaps of some Chinese-owned entities,
    how do we make sure we get outbound rules right?
        Secretary Bessent. Mr. Chairman, I want to thank you and
    the members of this committee for leadership on this. I had a
    very good discussion with two Members yesterday where we talked
    about the importance of establishing an either red light or
    green light and not having a yellow zone for outbound
    investment. The Outbound Investment Security Program is an
    important national security tool in our effort to restrict the
    People's Republic of China (PRC) from exploiting the benefits
    of U.S. investment. We have been receiving notifications from
    the outbound program. We are monitoring the market, and we are
    trying to ensure that the investment community is aware and
    familiar with the program.
        We appreciate the answers from Congress. While legislation
    will be important and helpful, we would like a bit more time to
    process, including the work mandated by the President to inform
    legislation.
        Chairman Hill. I appreciate that. I look forward to working
    with you. I yield back.
        I will now turn to the distinguished Ranking Member of the
    committee, Ms. Waters, for 5 minutes.
        Ms. Waters. Thank you very much, Mr. Chairman. Secretary
    Bessent, this is the first time we have met. Is that correct?
        Secretary Bessent. No, ma'am. We actually met one New
    Year's Eve in the Bahamas. I was----
        Ms. Waters. I do not remember that.
        Secretary Bessent. You were much better at the Electric
    Side than I was, and I was with the Prime Minister of the
    Bahamas yesterday. Prime Minister Davis sends his regards.
        Ms. Waters. Were you with my husband when he was the
    Ambassador to the Bahamas appointed by Clinton?
        Secretary Bessent. No.
        Ms. Waters. You are not going to like this. This is the
    first--I did not remember that, but that is odd because you
    have been in Treasury, and I have sent you five letters to ask
    about what was going on under your leadership and only received
    a couple of cursory replies from your staff. Why did you not
    respond?
        Secretary Bessent. Ma'am?
        Ms. Waters. I guess you do not know why you did not
    respond. Secretary Bessent, you have worked in finance before,
    right? You will find bipartisan support on this committee with
    small businesses and the institutions that finance them.
        I worked with Trump's first Treasury Secretary to pass 12
    billion in support for community development financial
    institutions and minority banks and credit unions. I was
    surprised when Trump first tried to eliminate the Community
    Development Financial Institutions (CDFIs), but it caught you
    by surprise also.
        You said that the CDFI fund played an important role in
    expanding financial access. Unfortunately, you were not very
    persuasive last week. Trump proposed to basically cut all CDFI
    funding.
        Now, let us discuss your job before becoming Secretary.
    Your hedge fund had a secret sauce for how you would make money
    for investors; a proprietary trading strategy. As CEO, you
    guarded that strategy. You never allowed unrelated persons to
    access your firm's computer records, data, personnel files, and
    algorithms, right? I am sure you would not have allowed just
    anyone unfettered access to copy, change, or to use those
    records, right? I suspect not and that makes good sense.
        What does not make good sense is why as Treasury Secretary
    and acting Consumer Financial Protection Bureau (CFPB)
    Director, you would allow DOGE unfettered access to the
    government system that handles trillions of dollars in
    payments, to the proprietary business records of entities
    regulated by the CFPB, or most alarmingly to the tax records of
    hundreds of millions of Americans; but you still threw up the
    gates of our finance system open to Elon Musk and his ban of
    22-year-olds.
        Yes or no; do you know the level type or nature of the
    clearances and security training required for individuals to
    access the information held in the computers of Treasury, IRS,
    or CFPB?
        Secretary Bessent. Yes, I do, and I think we would have a
    disagreement over the definition of the word ``unfettered.''
        Ms. Waters. Mr. Secretary, did all the individuals working
    with DOGE who were given access to Treasury and CFPB's computer
    databases receive all of the required clearances and security
    training before they were granted access?
        Secretary Bessent. Again, they were granted read-only
    access at Treasury. There were two----
        Ms. Waters. Let me just say----
        Secretary Bessent [continuing]. two DOGE employees----
        Ms. Waters [continuing]. please, you cannot filibuster
    here. This is not the filibuster playground.
        What you did was you let these strangers into our Treasury
    with access to all of the data, all of the personnel
    information, and you just opened the door. Why did you do that?
        Secretary Bessent. No, ma'am. They were Treasury employees.
        Ms. Waters. Oh, are you saying today in front of this
    committee that all of them were Treasury employees; that the
    25-year-old who is being identified who worked for Elon Musk
    was not allowed--was allowed into the Treasury? Was that person
    there?
        Secretary Bessent. He was a Treasury employee as was Tom
    Krause, the senior person on the DOGE team. There were only two
    people that----
        Ms. Waters. There were DOGE employees also.
        Secretary Bessent. Sorry?
        Ms. Waters. Do you know, or were you aware that there were
    DOGE employees coming into our Treasury, getting all of our
    personal information?
        Secretary Bessent. Ma'am, there is no such thing as a DOGE
    employee; there were Treasury employees.
        Ms. Waters. I tend to disagree with you based on the
    information that I have. Has any information been downloaded by
    anyone working with DOGE from any of Treasury's or CFPB's
    computers? Answer yes or no.
        Secretary Bessent. Not to my knowledge.
        Ms. Waters. You better learn. I will yield back.
        Chairman Hill. The gentlewoman yields back.
        The gentleman from Michigan, the Vice Chairman of our
    committee, Mr. Huizenga is recognized for 5 minutes.
        Mr. Huizenga. Thank you, Mr. Secretary, for being here. I
    just have to note that it is ironic that this has been declared
    a no filibuster zone by the same people who walked out of a
    hearing yesterday in filibuster.
        So--and I just to give you one quick brief moment. Are you
    saying that there were no unauthorized or unsanctioned persons
    that had access to the systems that you are in control of?
        Secretary Bessent. Again, there were two employees----
        Mr. Huizenga. Yes.
        Secretary Bessent [continuing]. that were very strict
    guardrails, and they were there for an Enterprise Resource
    Planning (ERP) function.
        Mr. Huizenga. Yes, so they were authorized, and they were
    sanctioned?
        Secretary Bessent. Yes
        Mr. Huizenga. So not unknown and Elon Musk was not one of
    those two people?
        Secretary Bessent. No, to my knowledge, Mr. Musk has never
    been in the Treasury building.
        Mr. Huizenga. Okay. All right. I have hit on Burma and a
    little crypto, and if we have time, China. I want to thank you
    for your actions that Treasury took this past Monday regarding
    Burma. The KNA, the Karen National Army has become a haven for
    Transnational Criminal Organizations that run illicit
    operations such all human trafficking and smuggling. The group
    has strong ties to the Burmese Army which has targeted
    religious and ethnic minorities such as the Rohingya since the
    civil war stuff broke out in 2021.
        While the United States and our allies continue to impose
    sanctions against the military junta, unfortunately the
    atrocities continue.
        My district, the Fourth District of Michigan is home to
    approximately 5,000 of these ethnic Burmese, and I am just
    asking you, we need to do more to protect the people of Burma
    and to stop the genocide.
        Yesterday I reintroduced the Brave Burma Act, a bipartisan
    piece of legislation that would require the President to
    determine on an annual basis whether to impose stronger
    blocking sanctions against the Myanmar oil and gas enterprise,
    the Myanmar Economic Bank, and foreign persons operating in the
    jet fuel sector of the Burmese economy, which has been a
    tremendous amount of their revenue; and further limits the
    junta's ability to borrow at the IMF, which I think is one of
    the issues that the Chairman was touch being on. These actions
    would target the heart of the military junta's revenue.
        Can I get your commitment that you are going to continue to
    work with my staff and us on a bipartisan basis as we try to
    address these issues in Burma?
        Secretary Bessent. Congressman, we are happy to work with
    your staff on this legislation and thank you for your
    leadership on this issue. I share your concern about imposing
    consequences on persons who threaten the peace, security, and
    stability of Burma. The Treasury has the tools to continue to
    take action for the people of Burma and working with you, we
    will continue to do so.
        Mr. Huizenga. That is great. What is frustrating is that
    while some of these sanctions have been put in place, sanctions
    are only as good as the willingness to enforce them. We have
    seen them receiving financial support from the junta from
    around the world, especially frankly as they ramped up
    production during the last administration. I will note it is
    not just Burma; it is places like Iran that this illicit
    activity that has gone around the sanctions has been allowed.
    In some cases, Treasury has granted these licenses. I sat on
    the Foreign Affairs Committee as well, and we see this all the
    time.
        I want to touch on crypto. Yesterday, as I had mentioned,
    the committee held a hearing with House Agriculture or
    attempted to hold a hearing with the House Agriculture
    Committee. It turned into a very important roundtable as well
    regarding digital asset market structure reform.
        Can you quickly explain how important it is to--it is for
    America to take the lead here, especially as we see China
    leaping ahead?
        Secretary Bessent. Yes, sir. We believe that the United
    States should be the premier destination for digital assets and
    as members of this committee and the Senate are attempting to
    do. Create good market structure via around that so that U.S.
    best practices are used around the world.
        Mr. Huizenga. That is really the point, right, is having
    American U.S. best practices to sort of set the pace for others
    to follow rather than us trying to fill in the holes that
    others--that may be created by as others set that pace.
        Secretary Bessent. Yes, sir. Also the digital assets that
    are an important source of innovation that will drive the--that
    can drive usage of the U.S. dollar around the world. As with
    stable coin legislation, there is speculation that there may be
    up to $2 trillion of demand over the next few years for U.S.
    Government securities from digital assets.
        Mr. Huizenga. My time has expired, but I will send you my
    question regarding Chinese debt trap diplomacy. With that I
    yield back.
        Chairman Hill. The gentleman yields back.
        The gentlewoman from New York, Ranking Member of the Small
    Business Committee, Ms. Velazquez, is recognized for 5 minutes.
        Ms. Velazquez. Mr. Chairman, I want to raise a point of
    order.
        Chairman Hill. Yes, ma'am.
        Ms. Velazquez. I do not want the clock eating my time. I
    would like for the witness to be sworn in before I ask my
    questions.
        Chairman Hill. The Chair does not see a need for that. You
    may ask your questions. Your time can start--start the
    gentlewoman's time over for 5 minutes.
        Ms. Velazquez. Secretary Bessent, you were on CNBC earlier
    this week, making claims saying we are very close, and maybe we
    will see some deals this week on tariffs. Tell us, tell the
    American people, tell small businesses and consumers, tell
    retirees, specifically which countries are you close to
    striking deals with?
        Secretary Bessent. I am sorry, Congresswoman, but that
    would not benefit the United States.
        Ms. Velazquez. No, no, no. I am asking you a question,
    based on the statement that you made on CNBC.
        Secretary Bessent. I am telling you that it would be
    detrimental to the interest of the United States for me to
    answer that question.
        Ms. Velazquez. Why would that be detrimental?
        Secretary Bessent. Because as the negotiations may still be
    in process as we speak, as we are not at the end of the week
    yet, I am sure that you, through your question, would not want
    to compromise U.S. negotiations. Would you?
        Ms. Velazquez. Reclaiming my time.
        Secretary Bessent, the President goes into a press
    conference and claims that there are negotiations going on:
    then the next day there is no negotiations going on.
        Why would you not answer my question, and that would be
    considered detrimental to American people to the American
    economy? I do not understand. Despite your claim----
        Secretary Bessent. Congresswoman, I am happy to say there
    are negotiations going on. I am not going to reveal the
    details.
        Ms. Velazquez. How long do you think those negotiations
    will take before they are concluded?
        Secretary Bessent. There are numerous countries--as I have
    said, if you saw my CNBC interview, which you referenced, that
    there are 18 important trading partners, and we are moving
    forward in all deliberate speed with those.
        Ms. Velazquez. Okay. Do you consider these negotiations
    advanced negotiations?
        Secretary Bessent. Some of them are quite advanced.
        Ms. Velazquez. So you expect this deal to be more than
    memorandums of understanding? You expect them to be fully
    negotiated trade deals?
        Secretary Bessent. I via believe that they will be the
    agreements in principle, and then we will paper them over in
    the coming months. Once we reach an agreement, then I am sure
    that the other countries will live up to them.
        Ms. Velazquez. Okay. In congressional testimony yesterday,
    you said the United States has not started negotiating with
    China on tariff reductions. Does that continue to be your
    position, yes or no?
        Secretary Bessent. As you may have read----
        Ms. Velazquez. Yes or no, sir.
        Secretary Bessent [continuing]. as you may have read in the
    press, I will be going to Switzerland, and the negotiations
    will begin on Saturday.
        Ms. Velazquez. Okay. So the President told you that would
    be your answer today?
        Secretary Bessent. I----
        Ms. Velazquez. Can you tell who from the Trump
    Administration is engaged in those discussions?
        Secretary Bessent. Which discussions?
        Ms. Velazquez. With China.
        Secretary Bessent. For trade discussions?
        Ms. Velazquez. Pardon?
        Secretary Bessent. I'm sorry.
        Ms. Velazquez. Trade discussions, yes, sir.
        Secretary Bessent. The trade negotiations will be led by
    myself and Ambassador Jamieson Greer of the United States Trade
    Representative (USTR).
        Ms. Velazquez. What about Pete Navarro?
        Secretary Bessent. I'm sorry?
        Ms. Velazquez. Peter Navarro. Is he----
        Secretary Bessent. He will not be joining us in June.
        Ms. Velazquez. Thank God for that. Are those negotiations
    considered advanced?
        Secretary Bessent. Pardon?
        Ms. Velazquez. Are those negotiations considered advanced?
        Secretary Bessent. As I said on Saturday, we will begin,
    which I believe is the opposite of advanced.
        Ms. Velazquez. Secretary Bessent, as Treasury Secretary and
    a senior member of President Trump's assistant economic team,
    has President Trump given you the authority to finalize any
    trade agreement with China or any other trading partner?
        Secretary Bessent. As President Trump has stated, he will
    have the final decision on any trade agreement.
        Ms. Velazquez. So you are telling me of these increased
    prices, the stock market losses, the production delays are all
    based on the wings of Donald Trump; that you could strike the
    best deal with Canada, Mexico, or even China that is completely
    in our favor, giving us everything that----
        Chairman Hill. The gentlewoman's time has expired.
        Ms. Velazquez. Especially if President Trump decides at any
    certain moment----
        Chairman Hill. The gentlewoman's time has expired.
        Ms. Velazquez [continuing]. for whatever reason not to take
    the deal, that will be it. I yield back.
        Chairman Hill. The gentleman from Oklahoma, Mr. Lucas, who
    is the Chair of our task force on monetary policy is recognized
    for 5 minutes.
        Mr. Lucas. Thank you, Mr. Chairman. As the dust has
    continued to settle after last month's episode of Treasury
    market volatility, can you give an updated assessment of those
    events and how would you characterize the functioning of the
    market during that period? The dust up in Treasury.
        Secretary Bessent. The market was very well-functioning. It
    was volatile, but the underlying infrastructure worked quite
    smoothly, sir.
        Mr. Lucas. Does the Treasury Department have the tools
    necessary to address market volatility? You have said you may
    increase the use of the buyback program. Are these or other
    authorities that--are there other authorities that might be
    helpful to address the challenges of the market?
        Secretary Bessent. Yes, sir. We have a very large toolkit
    that we can deploy as does the Federal Reserve.
        Mr. Lucas. Taking a step back, Mr. Secretary. Can you
    provide us with a sense of what regulations the administration
    is working on to bolster resilience in the Treasury market and
    the timelines when you would expect those changes to be
    announced? This is a core issue on the task force I and a
    number of my colleagues are working on.
        Secretary Bessent. Sir, the auction sizes, the current
    issuance sizes leave us well positioned to address potential
    changes in borrowing needs. I can tell you that investor
    participation in auctions, there has been broad investor
    support. Our awaited average maturity is about 61.2 months,
    which is quite wholesome. We have implemented a buyback program
    with two objectives--liquidity support and cash management.
        Mr. Lucas. One last question along that line. I have long
    said that the administration should look at reforming
    regulations like the supplemental leverage ratio to relieve
    some of the constraints that market participants are facing in
    Treasury market. I hope you will consider looking at that.
        Secretary Bessent. Sir, Treasury does not look at that, but
    I believe that it is a high priority for the re-regulators, the
    Office of the Comptroller of the Currency (OCC), the Federal
    Deposit Insurance Corporation (FDIC), and the Federal Reserve.
        Mr. Lucas. Thank you. As the Securities Exchange Commission
    (SEC) continues to implement their clearing rule, a number of
    firms, including those outside the United States are looking to
    provide clearing services for U.S. Treasuries and their
    derivatives.
        How are you working with the SEC and the Commodities
    Futures Trading Commission (CFTC) to ensure the integrity of
    the Treasury markets as these firms look to intermediate?
        Secretary Bessent. Sir, the Treasury market is a global
    market, and we welcome new participants, and we want to make
    sure that best practices employed in the United States are also
    employed globally.
        Mr. Lucas. The reason I ask that is if you could
    specifically comment on the clearing of U.S. sovereign debt
    outside of the United States, what risk could that potentially
    present? I come at that from the perspective if there is a
    challenge in the market, if it is a U.S.-based entity, then the
    regulators who would make the difficult decisions are here. If
    it is outside of the United States, they might have a different
    perspective.
        Secretary Bessent. We are constantly studying that, sir. As
    of now, we do not believe that it presents a risk. I will--as
    we continue our studies, I will have my staff interact with
    your team.
        Mr. Lucas. Absolutely, Mr. Secretary. One final question.
    Primary dealerships have become an expensive proposition for
    firms, which in one explanation for participants leaving the
    market. It is one of the many explanations. Should we be
    looking at ways to make the environment friendlier to investors
    wanting to become primary dealers?
        Secretary Bessent. Sir, we have saw at the recent auction
    very low participation by the primary dealers, which tells me
    that there may be the regulatory function there that is
    preventing them from using their balance sheet for the benefit
    of the U.S. Treasury.
        Mr. Lucas. So clearly the task force that Chairman Hill was
    kind enough to set up and yourself, we have work to do. Thank
    you, Mr. Secretary.
        Mr. Huizenga. Would you yield.
        Mr. Lucas. I will yield to the gentleman from Michigan.
        Mr. Huizenga. Thank you and I can get my China question in.
    **I appreciate my colleague doing that. I want to talk a little
    bit about the international financial institutions, the FEE,
    such as IMF World Bank, and they are falling short of
    addressing key challenges. So China, whether it is in Africa or
    Burma has really engaged in a debt trap diplomacy. How should
    the IMF really help borrowers take the fund's advice when it
    keeps giving China a free pass?
        Secretary Bessent. Congressman, as I said, in a public
    interview after one of my IMF speeches, it is time for China to
    graduate from developing country status. It is the second
    largest economy in the world. They are a large important
    economy, and they should no longer be granted the status of a
    developing economy.
        Chairman Hill. I would like to invite you, Mr. Secretary,
    to continue that answer in writing. I thank the Vice Chairman
    and Mr. Lucas.
        Let me call on the gentleman from California, the Ranking
    Member for our Capital Market Subcommittee, Mr. Sherman.
        Mr. Sherman. First, a parliamentary inquiry since the last
    speaker had an extra 30 seconds. Can I have an extra 30
    seconds?
        Chairman Hill. I would be happy to do that.
        Mr. Sherman. Mr. Chairman, I agree with you that special
    drawing rights should be increased to only with congressional
    input and I agree with Mr. Huizenga that we have focus on Burma
    Myanmar.
        I ask unanimous consent to put in the record a chart
    showing how the value of the dollar compared to other
    currencies has declined precipitously since Trump's so-called
    liberation date; and also put into the record a CBO report
    issued just an hour ago that shows that Republican proposals to
    change Medicaid would in one case take one and a half million
    people would lose their Medicaid benefits, and in another
    proposal would cost 3.9 American or Medicaid benefits.
        Chairman Hill. Without objection.

        [The information referred to was not submitted prior to
    printing.]

        Mr. Sherman. I also ask unanimous consent to put in the
    record a letter I sent to the Secretary responded to by his
    assistant secretary, dealing with direct file, which means you
    do not have to pay Turbo Tax because the IRS has the software.
    The response that I got, an absurd response was basically,
    well, as long as--you know, we just want to make sure Turbo Tax
    makes a lot of money. So we are not going to do that.
        I would point out that the IRS could send every American
    for their voluntary use a proposed first draft of the tax
    returns since you already have the W-2, you already have the
    1099, and you do not have all the input errors that come for
    people doing their own returns. That is something that your
    administration is stopping. I would ask you----
        Chairman Hill. Without objection.

        [The information referred to was not submitted prior to
    printing.]

        Mr. Sherman. Yes, I would ask you, Mr. Secretary, to
    provide for the record within 1 week your best estimate of when
    the United States will hit the debt ceiling and exhaust our
    borrowing capacity. Can I count on you to provide that for the
    record?

        [The information referred to was not submitted prior to
    printing.]

        Secretary Bessent. Sir, the so-called X date is a moving
    target.
        Mr. Sherman. I would like your best shot.
        Secretary Bessent. As I stated yesterday, we are moving on
    to the warning track, and we do not want to be on the warning
    track----
        Mr. Sherman. I would ask you to provide--to Congress the
    best information you can, but I am going to go on to another
    question.
        I represent one of the two areas devastated by the Los
    Angeles fires. I spoke directly and on camera to President
    Trump and asked him to exempt building materials from these
    tariffs. The National Association of Home Builders says that
    these tariffs will add $11,000 to the cost of these fire
    victims rebuilding their homes.
        Can you assure us that in a country where we have a
    devastating housing shortage in general, where we have
    thousands of people in Los Angeles that have to rebuild their
    homes in particular, that these fire victims are not going to
    face this additional cost to rebuild their home?
        Secretary Bessent. I will look into the end of that matter
    and----
        Mr. Sherman. That is exactly what the President said in
    January.
        Secretary Bessent. I was in Los Angeles this weekend, and I
    toured the devastation. And----
        Mr. Sherman. Thank you. I hope you saw the devastation in
    the Palisades, and I hope you will not be imposing another
    $11,000 cost on every home builder.
        Now as to capital markets where I devote most of my time,
    all of us on the subcommittee agree that we are trying to get
    people to invest in American stocks and build the American
    economy. In fact, our tax code has hundreds of billions of
    dollars of incentives to get people to invest in America. China
    also has incentives to get the Chinese people to invest in
    Chinese stocks. There is a difference.
        China only provides those incentives if you--to Chinese
    people if they invest in Chinese stocks. American billionaires
    like investing in China, making tens and hundreds of millions
    of dollars in profit.
        Can you think of a reason why the American Tax Code should
    provide enormous tax benefits like the capital gains allowance
    to American billionaires who invest in Chinese stocks? Why is
    that in our national interest?
        Secretary Bessent. Sir, it is not just available to
    billionaires. If you were to buy a----
        Mr. Sherman. Right. Why do we not want to----
        Secretary Bessent. A Chinese Exchanged Traded Fund (ETF),
    a----
        Mr. Sherman. Why would we be neutral on whether I buy an
    American ETF or a China ETF? Do we not prefer American capital
    be invested in America or are we just fine with encouraging
    Americans to invest abroad.
        Secretary Bessent. Sir, we do not want to close the capital
    account, and we do want to investors to be able to maximize
    their judgment where they certainly----
        Mr. Sherman. Let me go on to one more thing.
        Secretary Bessent. I have said I would not bet against the
    United States, but----
        Mr. Sherman. Please, next question. Next question. Abu
    Dhabi and the United Arab Emirates just announced that they
    were going to give $2 billion to a stable coin put forward by
    World Liberty Financial. This stable coin pays no interest. You
    and I are both finance people. I just want to check my math.
        Assuming a 4 percent rate of return, is this interest-free
    loan of $2 billion worth $80 million every year to World
    Liberty Financial and its Trump owners?
        Secretary Bessent. Sir, I have not seen that. I do not know
    the expense ratio. As far as I know, no stable coins pay
    interest.
        Mr. Sherman. So The New York Times is wrong. Please read
    the article. I yield back.
        Chairman Hill. The gentleman yields back.
        The gentleman from Texas, Mr. Sessions, is recognized for 5
    minutes.
        Mr. Sessions. Mr. Chairman, thank you very much. Secretary,
    welcome. We are delighted that you are here. Part of the
    challenge against you this morning--and I am sure some days--is
    the explanation of the tariff matter that President Trump has
    initiated and sticking by. I would like to go by just my input
    on that if I could. That I think that President Trump sees the
    relationship with China by what it really is, and that is an
    unfair relationship. One in which needs to be not only looked
    at, but really something done about it.
        I know that while we have permanent normal trade relations
    (PNTR), it should mean that we treat them same way they treat
    us, but that is not happening. President Trump, as part of
    these changes, has changed the de minimis rule. That de minimis
    rule was the amount of money that a package when it comes into
    our country, under this circumstance, whether it was looked at
    or not, whether a tariff was paid upon it, then I believe that
    there were Chinese companies taking advantage of that. Some 4
    million packages a day were coming to the United States, and I
    say we are coming because I do not believe that rate is still
    occurring.
        As a result of that, what happened is it contributed to the
    Fentanyl issue that we had. Because we did not look at these
    packages with the same viewpoint that others did.
        My point in bringing this up is that I believe that with
    the new numbers of 177,000 net new American jobs being created
    in the private sector, that there is an understanding by people
    who want to invest in America, that this President is finally
    taking on the Chinese who undermined not just intellectual
    property but undermined with their government, the Chinese
    Government, undercutting the price and manufacture of many
    products that were American-made. Many of them or some of them
    might be power tools. Of course, we know Craftsman is an
    American-made product. It is not uncommon and was not uncommon
    for their tools brought on the internet at $400 or $500 and for
    a Chinese product to be brought for $40 or $50. That undermined
    not just our intellectual property, but actually undermined the
    manufacturing that takes place in this country. I am delighted
    that you and the President are engaged in balancing that out. I
    think that is what these 177,000 new American jobs net provided
    for us because it is people who want to invest in the United
    States knowing that finally we have a President that will
    protect that onslaught of Chinese goods undercutting American,
    not just jobs in intellectual property, but the events that
    take place therein.
        I think this President has done a great job and I want to
    offer my support for that. Because I think that part of what
    the President has done is set a new challenge and mark for
    Americans now to pick up that part that was before challenged
    by China.
        Mr. Secretary, Russia still earns over $700 million a day
    in fossil fuel revenue that helps its war against Ukraine, and
    I think that most of us here would like to see Russia held
    accountable.
        Can you talk to me about sanction or sanctions that are or
    are being considered against Russia energy firms as it relates
    to selling their products to China?
        Secretary Bessent. Yes, sir. I will tell you that the Biden
    Administration exercised with regards to Russia and Ukraine
    support a big dichotomy. On one hand, they were giving aid to
    government of Ukraine. On the other hand, their sanctions
    against the Russian federation were very, very weak against--
    the sanctions were just against some of the lower-level oil
    companies. There was a price cap that has never worked.
        On his way out the door and in a fit of the bravery, the
    National Security Advisor Jake Sullivan raised the sanctions
    because the Biden Administration had been worried about
    upsetting the oil price, pushing up oil prices during an
    election year.
        The Trump Administration through our energy abundance and
    signaling to the energy markets, crude oil is down about 20
    percent thus far this year. I read with great interest this
    morning that Russian generation revenues were down 12 percent
    last month which will put a dent in the Russian war machine,
    sir.
        Mr. Sessions. Mr. Secretary, I hope you will find today as
    valuable for us and yourself. I hope you will know that we----
        Chairman Hill. The gentleman from----
        Mr. Sessions. Thank you, Mr. Chairman. I yield back my
    time.
        Chairman Hill. The gentleman from New York, Mr. Meeks, is
    recognized for 5 minutes.
        Mr. Meeks. Thank you, Mr. Chairman.
        Mr. Bessent, let me--and I am just a plain, simple man, the
    average everyday American looking at this hearing today. Can
    you tell me first does trade deficits constitute a national
    emergency?
        Secretary Bessent. The hollowing out of U.S.
    manufacturing----
        Mr. Meeks. No, just yes or no.
        Secretary Bessent. The national emergency, sir.
        Mr. Meeks. It does. You are telling me the trade deficits
    equals a national create----
        Secretary Bessent. Persistent and prolonged, yes, sir.
        Mr. Meeks. Do you not know also, sir, that for the last 4
    decades we have had trade deficits in the United States of
    America, and nobody said it was an emergency? Democratic and
    Republican Presidents? You know what that says to me? That is
    not an emergency because it has not been for 4 decades. It says
    to me that we should bring tariffs back to the U.S. Congress so
    that we can make that determination as the Constitution has
    said and not try to go around Congress. That's just
    unbelievable to me.
        Let me ask this question. Maybe I missed it. Who was the
    President, or who has been the President since January 20,
    2025.
        Secretary Bessent. Donald J. Trump.
        Mr. Meeks. Okay, who was the President in 2024?
        Secretary Bessent. One believes President Biden.
        Mr. Meeks. One believes? Are you one of those nonbelievers
    that the election--the American people did not vote?
        Secretary Bessent. I--I I am not.
        Mr. Meeks. You are not? You said ``one believes?''
        Do you believe in the Constitution of the United States,
    Mr.----
        Secretary Bessent. I believe in the Constitution of the
    United States.
        Mr. Meeks. So you believe in it? Without any second
    thought, you do not have to think about it, you believe in it,
    and you would abide by it? Is that correct?
        Secretary Bessent. I have, and I do, sir.
        Mr. Meeks. Okay. Do you know that a President has said he
    may or may not; he does not know?
        Let me ask this question. I could not believe my ears,
    Sunday during NBC'S Meet the Press, President Trump credited
    himself for the strong economy in 2024 when Joe Biden was
    President, but then he blamed President Biden for a weak
    economy in 2025 when he was President.
        Now, I am not so sure how the American people put that
    together. In 2024, strong economy, he tried to take the credit.
    In 2025 when he is the President, he blames Joe Biden. That
    does not make sense to me. I do not think it makes sense to
    most Americans, and I hope, Mr. Secretary, you are a
    businessman, it does not make sense to you either. It cannot
    possibly make sense to you.
        **Let me ask this question. If a government, say, look,
    Argentina--I remember when I came here--Argentina kept failing
    to pay its debt, not once or twice or three times, and we were
    all upset about it. We knew that they needed a host; somebody
    to take over their government. Somebody should have helped the
    President of Argentina.
        If the United States or did not pay its debt or something
    we would be very upset about that if we could not pay our debt.
    I mean, that is one of our focuses. Is that not correct?
        Secretary Bessent. Sir, the United States will always meet
    its debt obligations.
        Mr. Meeks. Always. Let me ask you this. Donald Trump, the
    dealmaker--and you did not answer Ms. Velazquez' questions--no
    deal. I thought you said 3 weeks ago that there would be deals
    but Donald Trump, not once, not twice, not three times, not
    four times, not five times, but six times failed to pay his
    debts on his business and went bankrupt, and you are going to
    call that a good businessman.
        Chairman Hill. The gentleman's time has expired.
        Mr. Meeks. I would not invest in that economy--
        Chairman Hill. The gentleman's time has expired.
        Chairman Hill. The gentlewoman from Missouri,
        Mrs. Wagner, the Chair of our Subcommittee Capital Markets,
    is recognized for 5 minutes.
        Mrs. Wagner. I thank you, Mr. Chairman. I will try to keep
    my tone down and I thank Secretary Bessent for your testimony.
    I, sir, am going to try to stick to the actual title of this
    hearing and why we are supposed to be here today, which is the
    state of the international financial system.
        Here we go. Mr. Secretary, under the Biden Administration,
    Congress required treasury to determine whether any Chinese
    financial institutions were engaged in oil purchases from Iran,
    no matter how small or how large the transaction. This
    determination would subject these Chinese entities to secondary
    sanctions, sir. Just last week the President himself ordered
    such sanctions for any purchase of Iranian oil, which helps,
    obviously, the Ayatollah finance terrorism around the world.
        Mr. Secretary, can you describe how-well, I think we all
    know how Iran uses oil sales to fund it is proxies, including
    Hamas, Hezbollah, the Houthis in Yemen, to the extent there is
    any Yemen left, Treasury is now over half a year late with its
    statutory determination on Chinese buyers of Iranian oil.
        I have three questions, sir, related to missing this
    deadline. The first is, why has it not been submitted to
    Congress, had the previous administration done anything to
    prepare this determination, and third, when can Congress expect
    to receive it?
        Secretary Bessent. To all three of those I will have my
    staff get back to you on that. Representative Wagner, what I
    will tell you is that since I have become Treasury Secretary,
    the Treasury has repeatedly sanctioned so-called Chinese's
    teapot refiners who are very large buyers of Iranian oil. These
    are independent refiners away from the State-owned enterprise--
    enterprises. We have begun that program over the past few
    weeks, and we will continue as needed.
        Mrs. Wagner. Good. I know that you are in negotiations
    with, I will say, that 18th country, which is China. We are
    thrilled to hear of your trip there, and I hope that this is
    something that you will discuss with them in terms of their
    purchasing of Iranian oil that does nothing but lift up a
    regime that is funding terrorism throughout our world, I will
    say.
        What actions has Treasury taken to combat cooperation
    between Iran and China on illicit finance and money laundering?
        Secretary Bessent. Again, the secondary sanctions on these
    teapot refiners have been a very fulsome effort, and we will
    continue that. When President Trump left office, Iranian oil
    exports were between 100-and 300,000 barrels per day. Now they
    are 1.6 million barrels per day, which allows the regime to
    finance its terror proxies, not just in the Middle East, but
    all around the world.
        Mrs. Wagner. Correct. Yes, we have seen it and we have
    lived it. It has caused unbelievable death, devastation and
    grief and resources and loss of life throughout our world. I am
    proud that the President himself endorsed sanctions just last
    week for any purchase, any purchase, not just from China, of
    Iranian oil. I hope that these--we can get a report on what has
    been happening with China.
        Switching gears. In February several members of this
    committee and the Senate, including myself, and the Chairman,
    and the Senate Banking Committee, sent you a letter voicing
    concerns about the European Union's corporate sustainability
    due diligence directive, or CSDDD. This directive, which was
    finalized by the EU last year, will require many American
    companies to evaluate their supply chains and end certain
    business activities not based on U.S. law, but do U.N.
    principles.
        This directive not only hurts our economic competitiveness,
    but also undermines our jurisdictional sovereignty, sir. It
    would force both public and private companies to comply with
    regulations that have not been approved by Congress, while also
    exposing them to increased litigation and risk in the European
    Union (EU).
        I am running out of time, Mr. Chairman, but this is
    something I feel very strongly about. It is in with the
    international realm here, and I have two questions regarding
    this.
        Chairman Hill. The gentlewoman's time has expired.
        Mrs. Wagner. That I will submit for the record. Thank you.
        Chairman Hill. They will be submitted for the record. I
    recognize Mr. Scott, the gentleman from Georgia, for 5 minutes.
        Mr. Scott. Thank you, Chairman. Secretary Bessent, let me
    ask you this: Do you agree that the FDIC plays a very essential
    role in safeguarding our depositors, insuring prudent bank
    supervisors and maintaining the safety and soundness of our
    financial system?
        Secretary Bessent. Congressman, I agree that a well-
    functioning FDIC is essential to the U.S. financial system.
        Mr. Scott. On Monday, you said this, and I quote, you said
    this, that the President tasks you with helping him choose the
    leader of the financial regulators so that we are all in line,
    all regulators to be safe, sound and smart, and you went on to
    list the key positions that you have done that, including a new
    Vice Chairman for Supervision of the Federal Reserve (Fed), a
    new head of the OCC, and Paul Atkins of the Securities and
    Exchange Commission, and a new CFTC Commission. As of this
    morning we have no FDIC Chairman full-time. It is now under
    temporary leadership of an acting Chair named Travis Hill with
    the President having no current plans to either formally
    nominate him or find a replacement. The Nation is watching us,
    why we do not have the head of the FDIC. My question is, have
    you not helped President Trump in selecting a Chairman to lead
    the FDIC?
        Secretary Bessent. Congressman, I would point out that
    under the previous administration, there was only an acting
    Chair of the OCC for 5 years. 5 years. Mr. Hill is the acting,
    and as a matter of fact, the head of the OCC, the head of the
    CFTC has not been confirmed, so those are, in fact, acting
    also. Mr. Hill is a very capable regulator, having been on the
    board of the FDIC----
        Mr. Scott. Yes, I am not--you are filibustering here.
        Secretary Bessent. We are pursuing----
        Mr. Scott. I am not questioning that.
        Secretary Bessent. With all deliberate speed.
        Mr. Scott. Have you been instructed by President Trump to
    refrain from offering a list of viable candidates to lead the
    FDIC?
        Secretary Bessent. No, sir. I am constantly reviewing the
    list and thinking about who is best to lead that important
    institution.
        Mr. Scott. I want you to know that I wrote a letter to the
    Trump Administration--here it is--expressing grave concern with
    the erosion of financial regulatory agency independence. Mr.
    Chairman, I would like to submit this for the record.
        Chairman Hill. Without objection.

        [The information referred to was not submitted prior to
    printing.]

        Mr. Scott. We remain highly alarmed by this growing
    perception that our financial regulators have acquiesced to
    political pressure from this administration. Perhaps even from
    the President of the United States. If I were President, I
    would not have this vacancy at a time when we are running
    tariffs all over the country, when our economy is in these
    kinds of difficulties. The Nation is watching us. Russia is
    operating us as the President is going around the country
    dealing with upsetting Canada, places around the world. I just
    want to know where are we going? When are we going to have a
    Chairman? Are we going to have it? Answer me truthfully, has
    President Trump asked you to delay this appointment, and if so,
    why?
        Secretary Bessent. Sir, that statement is incorrect. He has
    not asked me to delay that appointment. I believe that your
    question is when are we going to have an FDIC nominee, and we
    have OCC nominees, we have a CFTC nominee, we have a Vice-
    Chair----
        Chairman Hill. The gentleman's tire has expired.
        Mr. Scott. Mr. Chairman----
        Secretary Bessent. I would ask you to urge your Senate
    colleagues to, on the Democratic side, to vote for them.
        Mr. Scott. When is he going to do it?
        Chairman Hill. Mr. Scott, your time is expired. Excellent
    discussion.
        Mr. Scott. Thank you.
        Chairman Hill. I recognize the distinguish Chair of our
    Financial Institution Subcommittee, Mr. Barr of Kentucky, for 5
    minutes
        Mr. Barr. Secretary Bessent, thank you and President Trump
    for in February issuing the national security memorandum
    entitled, ``America First Investment Policy,'' directing
    Federal agencies to address outbound investments in China.
        In March, as you know, Senator Cornyn and I reintroduced my
    bill to restrict outbound investment into China, specifically
    into Chinese military industrial complex entities primarily
    through OFAC sanctions. Tell me, Mr. Secretary, what do you
    think about that legislation and the context of the President's
    national security memorandum?
        Secretary Bessent. Congressman, I want to thank you for
    your leadership on this matter. My team and I appreciate your
    input and molding this important issue. One of the most
    important financial issues of our time. It is a new national
    security tool that we restrict the PRC from exploiting the
    benefits, and we appreciate that Congress wants to move forward
    with legislation that is important and helpful, and we would
    like a bit more time for our process, including the work
    mandated by the President, to inform the legislation so that it
    is durable because of the importance of this.
        Mr. Barr. Thank you, and I look forward to working with you
    and the President to align our legislation with the President's
    policy on this. I want to give you and President Trump another
    tool of economic statecraft to increase President Trump's
    leverage in his negotiations with General Secretary Xi. This is
    a very important issue. As you probably noticed, there was
    recently a $75 million venture investment into a Chinese
    artificial intelligence firm, Manus. Is Manus AI on the Chinese
    Military-Industrial Complex Companies (CMIC) Treasury entity
    list?
        Secretary Bessent. I will have my staff get back to you on
    that, sir
        Mr. Barr. I think the answer is no, and that is why we need
    this legislation so that our outbound restrictions look not
    just at entities, but also technologies of national security
    concern, like militarized artificial intelligence that this
    entity Manus AI is doing.
        I would also note that the waiver authority that I embed in
    this legislation with Senator Cornyn would give you, as
    Treasury Secretary, the ability to authorize BlackRock or other
    United States firms to invest in Panama to displace the
    Chinese. Thank you for your collaboration with us on that.
        Secretary, you said that with President Trump we are going
    to re-privatize the American economy. That is music to my ears.
    That is music to the American people's ears.
        When Federal bank regulators are talking about reproposing
    the Basel III Endgame proposal, they have been saying now for a
    long time we should do it in a capital neutral way abandoning
    former Vice Chair Barr's approach of a huge gold plating of
    bank capital.
        Since the Federal Reserve started to use the term,
    ``capital neutrality'' in 2019, however, capital has increased
    by 10 to 20 percent making the concept of capital neutrality
    really arbitrary. Large banks are now subject to stress tests,
    Comprehensive Capital Analysis and Review (CCAR), Global
    Systemically Important Bank (GSIB) surcharge, and a number of
    liquidity and resolution requirements.
        When looking at our bank capital regulations in the context
    of an America-first agenda, Mr. Secretary, should we be aiming
    for capital neutrality or should we be instead looking at
    capital levels that actually promote American competitiveness?
        Secretary Bessent. Congressman, as you know, I have been
    very concerned about our community banks, our small banks, our
    small regional banks, and the growth of private credit outside
    the regulated system tells me that the--many of the regulations
    may be too tight, and that the business is pulled into the so-
    called shadow market. I think we want to safely and soundly
    expand the regulated financial system and get them on equal
    footing, and I think that these capital levels that are
    predictable are very important for that.
        Mr. Barr. Last question about China investment in
    Venezuela. Last week, Venezuelan's Vice President Rodriguez
    asked Chinese officials to increase oil purchases as the
    country is feeling the squeeze on its energy sales.
        Tell me what you think about the Office of Foreign Assets
    Control (OFAC) licenses for United States companies operating
    in Venezuela when those American firms could displace China to
    enhance American energy dominance.
        Secretary Bessent. It is a very acute balancing act there
    between displacing China, but United States entities providing
    hard currency for the Maduro regime, and we are constantly----
        Chairman Hill. The gentleman's time has expired.
        Mr. Barr. I look forward to working with you on that issue.
    I yield back.
        Chairman Hill. I recognize the distinguish gentleman from
    Massachusetts, our Ranking Member of the Digital Assets
    Financial Technology and Artificial Intelligence Subcommittee,
    Mr. Lynch, for 5 minutes.
        Mr. Lynch. Thank you, Mr. Chairman. Mr. Secretary, thank
    you for coming before this committee and helping us with our
    work.
        Mr. Secretary, between March 11th and March 15th, 2025, you
    and more than a dozen senior officials, including--of the Trump
    Administration, including Secretary Hegseth, Director of
    National Intelligence, Tulsi Gabbard, National Security
    Advisor, Mike Walsh, used a commercially available, non-
    governmental encrypted, non-secure app to discuss and
    coordinate imminent United States military strikes in Yemen in
    a group chat entitled, ``Houthis PC small group.''
        Particularly, Defense Secretary Hegseth shared actionable
    intelligence, including sensitive and classified details of an
    imminent military operation against Houthis rebels and other
    military plans. These included precise launch times for U.S.
    jet fighter assets, targeting locations for those Houthis
    rebels who were, by the way, equipped with antiaircraft
    systems. Mr. Hegseth shared the targeting sequencing against
    Houthis rebels and described the weapon systems, the U.S.
    weapons systems involved. National Security Council has
    confirmed that this chat, Signal chat was authentic and that
    you had participated.
        You realize that for you, Mr. Secretary, because of the
    responsibilities you have, even outside the principles
    committee, that group, you have a target on your back from our
    adversaries, China, North Korea, Russia and others. Can I ask
    you, have you been briefed on the proper protocols for
    discussing information such as active military plans?
        Secretary Bessent. I have by my general counsel.
        Mr. Lynch. Very good.
        Secretary Bessent. If you will look----
        Mr. Lynch. I have a bunch of questions, so I am just trying
    to narrow this down because this is really, really a concern.
    Just reclaiming my time, so let me ask you.
        Secretary Bessent. That chat was in my chief of staff's
    name, which is widely available.
        Mr. Lynch. Sir, let me ask the questions and you provide
    the answers. Okay. How about that.
        Secretary Bessent. Waiting for the question.
        Mr. Lynch. Are you preserving records, Mr. Secretary, of
    these communications as required by the Public Records Act?
        Secretary Bessent. Yes, sir.
        Mr. Lynch. Good. Okay.
        Secretary Bessent. My general counsel has photographs.
        Mr. Lynch. Are you still discussing sensitive military
    intelligence on a nonsecure line?
        Secretary Bessent. I have never done that.
        Mr. Lynch. Okay. The National Security Council says you
    were on a chat that discussed those details. Are you saying
    that was not the case?
        Secretary Bessent. I have said that I never discussed them.
        Mr. Lynch. Someone discussed it with you. You were on
    that--you were on a nonsecure line for a meeting with other
    secretaries, right? Those people I just mentioned, you were not
    on that chat?
        Secretary Bessent. I was, but you----
        Mr. Lynch. Okay. That is what I am talking about. You could
    have, you could have intervened, you could have brought it up,
    you could have said this is an insecure line, we should not be
    doing this, we are putting our sons and daughters in uniform at
    risk, pre-attack, you could have done all of that.
        Mr. Hegseth, this is not involving you, but Mr. Hegseth
    afterwards did the same thing with a family chat, his wife, his
    brother, his sister, family attorney. You do understand the
    troublesome nature of that, right? Are you dismissing that and
    calling this a roaring success as others have done? As the
    White House has done?
        This is troubling, and I just want the reassurances for
    this committee, and for other Members of Congress, other
    committees, and for most importantly, for the families of
    Americans who send their sons and daughters into harm's way,
    they put on that uniform, I just want the reassurances that we
    are not doing--you know, this buffoonery has to stop, right, at
    some point. There are serious consequences to not complying
    with security protocols.
        Mr. Secretary, you are a smart guy. You are a smart guy.
    You did not create this situation. You were drawn into it. I am
    just trying to reassure the committee that this stuff is not
    happening anymore.
        Chairman Hill. Gentleman's time has expired.
        Mr. Lynch. Allow the gentleman to answer? It would be a yes
    or no.
        Chairman Hill. I think the gentleman's time has expired.
        Secretary Bessent. Congressman, I am happy to say that
    because of my age, I pick up the phone and call people.
        Mr. Lynch. There you go.
        Chairman Hill. The gentleman's time has expired. The
    gentleman from Georgia, the Vice-Chairman of our Financial
    Institution Subcommittee, Mr. Loudermilk, recognized for 5
    minutes.
        Mr. Loudermilk. Thank you, Mr. Chairman. Secretary, thank
    you for being here. I think you and I are both aware of the
    paradox of the U.S. Reserve currency status. The so-called
    Triffin Dilemma says that to maintain the benefits of the
    global reserve currency status, we may always run a concurrent
    account deficit, which, in turn, risks undermining global
    confidence in the dollar.
        The U.S. enjoys an exorbitant privilege from the dollar's
    reserve status. This means that among other benefits there is a
    high demand for dollar dominated assets worldwide,
    substantially lowering borrowing costs. It also allows us to
    run sustained trade deficits and drives capital investment into
    the United States.
        My first question is, how is our current reserve status
    different from what it was under the Bretton Woods system when
    the dollar was convertible to a fixed amount of gold rather
    than floating?
        Secretary Bessent. Sir, it is now based on the full faith
    and credit of the United States rather than backed by gold.
        Mr. Loudermilk. Okay. Does the demand for dollars and the
    U.S. debt worldwide, and the reduced borrowing cost that come
    with it, contribute in a meaningful way to some of our failings
    as fiscal stewards?
        Secretary Bessent. I would say that the unfettered ability
    to borrow has made us more prolific as there is very little
    potential for market discipline to date. There is the potential
    that the market may discipline U.S. Government 1 day, and I am,
    along with the administration, President Trump, trying to set
    the country on a path to avoid that.
        Mr. Loudermilk. We appreciate that. I have long said that I
    do not feel that there is the political will within Congress
    anymore to restrict spending and balance the budget, and so I
    appreciate the work that you are doing there.
        Is there a world where we can have our cake and eat it too?
    In other words, is there a policy configuration where the U.S.
    can maintain the best elements of its exorbitant privilege
    while also having a balanced export economy?
        Secretary Bessent. Yes, sir, there is. I would point out
    that the exorbitant privilege, as I believe it was a French
    politician called it, does not always result in the lowest
    interest rates. Japan's interest rates are lower than ours.
    China's interest rates are lower than ours. Most of the EU
    interest rates are lower than ours.
        Mr. Loudermilk. Okay. I want to shift gears just slightly.
    For several years, I have called for Financial Crimes
    Enforcement Network (FinCen) to raise the threshold for
    currency transaction reports from $10,000 to some higher value.
    Working on legislation has been for the last several years, and
    I do have legislation again this year on that.
        If adjusted for inflation from the 1970s, this threshold
    would be somewhere between $74,000 and $80,000, but we have
    not. We are still stuck at that $10,000 limit.
        In your opinion, what threshold value best balances privacy
    and compliance costs against the utility that these reports
    have for law enforcement?
        Secretary Bessent. Congressman, I am not sure what the
    equilibrium level is. What we have discovered--so you were
    talking about the threshold for a suspicious activity report.
        Mr. Loudermilk. Or the concerns--currency transaction
    report.
        Secretary Bessent. We are now examining that, and we are
    finding that sometimes higher is better; sometimes lower is
    better. We have discovered that there are approximately 40
    counties on the United States Mexico border that account for a
    substantial amount of nefarious behavior by the cartels, so we
    have lowered that to $200, and we are finding great efficacy
    there in pushing the cartels back into Mexico and not allowing
    them to deal in the United States. I would say, sir, it is a
    moving target.
        Mr. Loudermilk. Okay. I can understand and appreciate that.
    One of the issues that we have from a nationwide status is the
    compliance cost that goes to small financial institutions, and
    even from law enforcement, the complaint is trying to find the
    list of financing currently is like looking for a needle in the
    haystack because of the pure volume of reports that are being
    made. My argument has been from--in a nationwide status, and I
    am sure we can work on something to make exemptions during
    times like you are talking about now and locations, but it is
    not to increase the size of the haystack, but reduce the
    haystack so it becomes more prevalent, the illicit financing.
        Secretary Bessent. Look, Congressman, I am hypersensitive
    to the needs of the small community banks and the undue burden
    that much compliance is placing on them, and we are working
    across a variety of ways to lower the costs.
        Mr. Loudermilk. I look forward to working with you on these
    things.
        Mr. Steil [presiding]. The gentleman yields back. The
    Ranking Member on the Oversight Investigations Subcommittee,
    the gentleman from Texas, Mr. Green, is recognized.
        Mr. Green. Thank you, Mr. Chairman. I thank the Ranking
    Member, and I thank the witness for appearing.
        Mr. Treasurer, when you testified before the Senate, you
    indicated that the CDFI fund is a very important program. It is
    very important to us. Is this correct?
        Secretary Bessent. I did, sir.
        Mr. Green. Is it true that you would not agree that it is a
    woke program, has cultural Marxism associated with it, and that
    it is--that it is abused. You would not agree with that, would
    you?
        Secretary Bessent. Sir, I think the CDFI fund is performing
    its statutory functions as required.
        Mr. Green. So you would not agree, then, that it is woke.
    Is its statutory function to be woke?
        Secretary Bessent. I have never seen that in the statute,
    sir.
        Mr. Green. What about Marxism, is that associated with it
    in the statute?
        Secretary Bessent. Again, sir, I have never seen that.
        Mr. Green. Now, given that the President desires to cut
    into this program, you are the Secretary of the Treasury, what
    are you going to do about it to protect it?
        Secretary Bessent. Sir, the skinny budget does propose a
    new $100 million award program that would provide access to
    affordable financing.
        Mr. Green. Does that, does that take care of the many
    billions that we put in, $12 billion to support the CDFI, that
    is a lot--quite a distance from the $12 billion, sir. What are
    you going to do about it?
        Secretary Bessent. Look, I understand----
        Mr. Green. Did you advise the President?
        Secretary Bessent. Sorry.
        Mr. Green. Do you advise the President?
        Secretary Bessent. I advise the President on a wide range
    of matters.
        Mr. Green. Is this considered a part of a wide range of
    matters? Would you advise the President that he should not cut
    these funds?
        Secretary Bessent. I look forward to working with you and
    the committee to ensure these programs operate efficiently for
    taxpayers.
        Mr. Green. What about efficiently for taxpayers and
    efficiently as a result of them being in the place to do so? If
    you do not have the money, they cannot be efficient. They
    cannot serve taxpayers if they do not have the money. Sixty-one
    percent of these programs are in Republican districts.
        Secretary Bessent. Is there a question?
        Mr. Green. Yes, it is a question in the sense that I am
    asking you to suggest to the President that this is important
    and that you not cut it.
        Secretary Bessent. So the skinny--as I said----
        Mr. Green. A $100 million is quite a distance from $12
    billion.
        Secretary Bessent. That is not the annual--$12 billion is
    not the annual appropriations.
        Mr. Green. No, but $12 billion is what we, a bipartisan
    group of folks put into the CDFI, as well as into the minority
    depository institutions. We do not want to see that cut.
        Let us go to another area. Do you agree that when a tariff
    is imposed upon a product that is coming into this country,
    that the tariff is collected at the border?
        Secretary Bessent. Yes, sir.
        Mr. Green. Do you agree that money that is collected goes
    into the Treasury's coffer?
        Secretary Bessent. Yes, sir.
        Mr. Green. Do you agree, also, that if the person that is
    importing this product is of the opinion that it is something
    that his clientele, his customers desire, that he will pay that
    tariff?
        Secretary Bessent. Yes, sir.
        Mr. Green. Do you agree that when he pays that tariff, he
    is likely to pass it on to his customers, his consumers?
        Secretary Bessent. Sir, the laws of economics would say
    that there are very elasticity----
        Mr. Green. I understand, but do you agree he is likely to
    do that? Do you agree that he does it sometimes? Do you agree
    that he does it sometimes?
        Secretary Bessent. Again----
        Mr. Green. Do you agree that he ever--does he ever do it?
        Secretary Bessent. Sure.
        Mr. Green. So your position is as the great treasurer you
    are, that this is not passed on to the taxpayers?
        Secretary Bessent. It could be--
        Mr. Green [continuing]. and consumers. It could be? Is it
    ever? It is hard to say yes, is it not? It really is. Listen,
    sir, you do not have to--listen, do not fear--do not fear the
    President, sir. Is it ever passed on--have you ever heard of
    this tax money being collected and passed on to the consumer to
    pay? Have you ever heard of that?
        Secretary Bessent. The most recent studies from----
        Mr. Green. Okay. Let us go on to this point. I have a
    better point to make. Excuse me. I am reclaiming my time. I
    have a better point. Listen for just a second. I only have a
    little bit of time. When it goes into the coffers, that money
    is then going to be a part of the tax dollars that can be
    accorded to persons in terms of a tax cut. Is this true?
        Secretary Bessent. It is part of the overall----
        Mr. Green. Yes, it is true, which means that the consumer,
    the person who pays that tax, that is tariff tax, when he makes
    that purchase, is going to put his money in your coffer, our
    coffer, and then the President later on can say you got a tax
    cut, but it is really the money that the consumer has put into
    your coffer. That is true. I yield back.
        Mr. Steil. The gentleman yields back. The gentleman from
    Ohio, the Chair of the National Security Illicit Finance and
    International Financial Institution Subcommittee, Mr. Davidson,
    is recognized for 5 minutes.
        Mr. Davidson. Thank you, Chairman. Mr. Secretary, I applaud
    your eloquent message at the Milken Institute clarifying the
    Trump Administration's coherent and effective strategy and
    thank you for helping lead that.
        My committee on National Security Illicit Finance and
    International Finance Institutions aligns completely with your
    efforts on illicit finance on trade with the pending
    reauthorization of the Defense Production Act, the national
    interest with outbound investment of laws and clarity, and on
    focused international financial institutions. I remain highly
    concerned about the future of money, and frankly, probably the
    important policy debate we are having. I will save that part
    for future hearings.
        On illicit finance, I applaud your FinCEN final interim
    rule removing beneficial ownership reporting requirements for
    U.S. companies and citizens.
        The prior approach was collecting information on millions
    of Americans and companies, even homeowners' associations,
    under the guise of illicit finance. Lots of noise and very
    little signal. By narrowing the scope of the rule you are
    focusing on the signal.
        Given the shift in focus, millions of Americans have shared
    sensitive personal identifiable information. Mr. Secretary, as
    the committee moves forward clarifying the rule, would you
    commit to supporting the deletion of data already collected
    under the previous rule?
        Secretary Bessent. Sir, my staff is working on what will
    happen to that data, and we will get back to you on that.
        Mr. Davidson. Appreciate it. We will work with you, and
    certainly hope you safeguard it always, but it would be
    especially safe if it was deleted.
        Speaking of legislation, my bill, the Chinese Currency
    Accountability Act of 2025, it would require the Secretary, you
    in this case, to instruct the United States Governor of--the
    United States Executive Director at the IMF to use the voice
    and vote of the United States to oppose any increase in the
    weight of the Chinese research and development (R&D) in the
    basket of currencies used to determine the value of special
    drawing rights. This bill has passed the House on a bipartisan
    basis, most recently in February, and it still awaits Senate
    action.
        Mr. Secretary, far more effective than while waiting for
    the Senate is your leadership on this issue. Will you advocate
    for opposing an increase in the R&D until China straightens
    itself out?
        Secretary Bessent. I look forward to working with Congress
    on this issue on whether additional legislation is needed to
    address the Chinese practices, or whether it could be done
    through trade negotiations.
        Mr. Davidson. I wish you great success in your pending
    negotiations. Certainly, if you look at the IFIs, things like
    Argentina's recent restructuring under the IMF, basically they
    built out the Belt and Road. They never really have to worry
    about the default at the Belt and Road. They are using their
    influence in the international financial institutions like the
    IMF and the World Bank to frankly cover risk at the Belt and
    Road. Hopefully that will be restructured.
        You have already covered outbound, and I really appreciate
    the dialog on that. I would like to turn to the Defense
    Production Act. I mean, when you look at how you have organized
    and communicated the President's approach there, and the
    administration's approach, national security is, of course,
    paramount to that. As we organize and update and reauthorize
    the Defense Production Act, of course it deals with the
    Department of Defense, deals with Commerce, who does a lot of
    those things, but it has been structured under the authority of
    the Department of Treasury. Would you commit to working with
    our committee on national security and finance together the
    input and get a final reauthorization across the finish line
    this year?
        Secretary Bessent. I think it is an important piece of
    legislation. We look forward to working with you on that.
        Mr. Davidson. Thank you, Mr. Secretary. Last, you have
    spoken eloquently about the kind of mission creep that comes in
    through some of our international financial institutions. As
    you know, the IMF set up a climate fund in 2022 known as the
    Resilience and Sustainability Trust. Given concerns about IMF
    mission creep, will you work to eliminate RST so that the IMF
    can get back to its core mission?
        Secretary Bessent. Congressman, at my speech during IMF
    week, I stressed the need to get back to basics at all of the
    multilateral development banks, especially the IMF.
        Mr. Davidson. Yes. Thank you. I mean, the World Bank is
    spending a massive amount on that. As Chairman Hill and I met
    with the Inter-American Development Bank, they highlighted
    things that they were doing to deal with natural disasters,
    that are important for tourism for them, so some of this is
    characterizing things that are really infrastructure for those
    countries as climate change maybe to appease the previous
    administration. I am confident you will get it right. To the
    extent we can be helpful in that as we reauthorize these
    programs and we consider doing that.
        I thank you for your clarity talking about American
    leadership there, so that American's interests are focused with
    the use of America's resources. Thank you for your steadfast
    work and your testimony today, and I yield back.
        Mr. Steil. The gentleman yields back. The gentleman from
    Illinois, the Ranking Member on the Financial Institution
    Subcommittee, Dr. Foster, is recognized for 5 minutes.
        Mr. Foster. Thank you, Mr. Chairman, and Secretary Bessent,
    for your appearance here today, as well as your very nice
    courtesy call where we were able to identify areas of common
    interest, like the digital citizenship.
        I would like to speak today about the strength of the U.S.
    dollar and the decline of U.S. manufacturing, which as you
    know, I am very concerned about. I started this company back
    when I was 19 years old that now provides over 1,500
    manufacturing jobs in the Midwest and it has not been easy.
        We lived--we started our company in the beginning of the
    Reagan inflation, then we had to live through all of the Bush
    policies and the China shock that occurred on his watch. We
    lived through just all the ups and downs of this, and it is not
    an easy thing.
        Now, in terms of the strength of the dollar, it is affected
    by many things, and it is including central bank policies,
    interest rates, tariffs, and the balance of trade. In the long
    run, I believe that the strength of the dollar reflects the
    world's confidence in the U.S. economy and the competence of
    U.S. leadership and the value of products made by American
    workers, and our reputation as a fair place to do business and
    the rule of law in America.
        Now, Secretary Bessent, earlier this week you ran an op-ed
    in The Wall Street Journal echoing many of the points you made
    in your testimony. In that op-ed, you promised, interalia, more
    jobs, more manufacturing, more deregulation, lower taxes, less
    national debt, all while maintaining a strong dollar.
        On the other hand, Stephen Marin, Trump's choice for the
    Chair of the Council of Economic Advisors, wrote a paper last
    year arguing for weakening the dollar through something he
    called the Mar-a-Lago Accords, which you have reportedly been
    placed in charge of negotiating.
        The President himself has just been all over the map on
    almost a daily basis on whether a strong dollar or a weak
    dollar will make America great again. My question is, what is
    it? Does the administration support a strong dollar or a weak
    dollar?
        Secretary Bessent. Sir, I will work a little backward, is
    Stephen Miran's paper was when he was in the private sector,
    and I think it related to a range of outcomes. Two, that I
    believe that the conditions for a strong dollar are important
    for international competence. Again, when we think of strong
    dollar, what is a strong dollar? Is it the composite on the
    Bloomberg of all currencies, is it a trade-weighted dollar?
    Then we can also look at bilateral relationships, because much
    of that could be not so much a strong dollar, but other
    countries manipulating and suppressing their currencies which
    would----
        Mr. Foster. We lived through that in the Bush
    Administration and his non-reaction to what China was doing. I
    know all about that, but I think it is interesting to look at
    the historical record here. I think, I have behind me a plot of
    the strength of the U.S. dollar under recent presidents. I
    believe your staff has a copy of a one-page handout that could
    be given to you if it is easier to read. What it says is
    remarkable. It says that under every President, every
    Republican President, Reagan, Bush, Bush Jr., Trump 1 and now
    Trump 2, the dollar has weakened.
        Under every Democratic President, without exception,
    Clinton, Obama, Biden, the dollar has gone up significantly. I
    do not think that is an accident. I think it is because of all
    the factors, including predominantly the confidence that the
    United States will maintain a well-regulated and well-governed
    economy and a fair place to do business.
        Now also on that handout, which I think--has that actually
    been given--do you have a copy of the handout with the graphs
    on it? It is double-sided, single page. We can get you another
    copy if you want. It also has the argument in favor of a weak
    dollar; it should make manufacturing easier in the United
    States. Make our--that is one of the arguments for it.
        If you look at the historical record here, if you just look
    at, for example, change in manufacturing employment under
    Democratic and Republican Presidents, it is remarkable. For
    longer than you or I have been alive, Democratic Presidents
    have increased manufacturing employment, and Republican
    Presidents have decreased manufacturing employment. From
    Franklin Delano Roosevelt (FDR), Truman, Kennedy, Johnson,
    Carter, Clinton, Obama and Biden all increased manufacturing
    employment. Eisenhower, Nixon, Ford, Reagan, Bush, Bush 2, it
    all dropped. Okay. I do not think this is an accident.
        The thing I want to ask you about is how do the Republicans
    manage to weaken the dollar and weaken manufacturing employment
    at the same time, because it seems like that is completely
    crossways to the narrative that we are hearing from this
    administration?
        Secretary Bessent. Sir----
        Mr. Steil. The gentleman's time has expired. The Secretary
    can answer in writing. The gentleman from Tennessee, the Vice
    Chairman on Oversight Investigation Subcommittee, Mr. Rose, is
    recognized for 5 minutes.
        Mr. Rose. Thank you, Chairman Steil. I want to thank
    Chairman Hill and Ranking Member Waters for holding this
    important hearing. Secretary Bessent, thank you for being here
    with us today and answering our questions
        Secretary Bessent, given that the Mint, the U.S. Mint's own
    Fiscal Year 2024 report shows that the nickel, the U.S. nickel
    now costs 13.78 cents to produce, and that experience in other
    countries suggest that our nickel production, or demand would
    double, triple, maybe even multiple times beyond that if we
    eliminate the penny. Is Treasury analyzing the risk that
    stopping penny production alone could actually worsen our
    coinage losses or seigniorage losses by pushing annual nickel
    losses well past $200 million.
        Secretary Bessent. Congressman Rose, that we have looked at
    this, and we believe that it is possible by changing the
    composition of the nickel to bring down the cost to $0.05 or
    less.
        Mr. Rose. Absolutely. That was going to be my next follow
    up question to you.
        Secretary Bessent. I will point out that the dime is very
    profitable.
        Mr. Rose. Yes, and it will sound like a little self-
    interest, but a Tennessee company is one of the folks that
    could lower the cost of the nickel and has made a proposal that
    I know you are----
        Secretary Bessent. We are investigating that with them and
    are very intent on maintaining those jobs, sir.
        Mr. Rose. I would just say from my deep dive into both
    penny and nickel production, it seems to me that there are
    significant savings beyond just saving on composition of the
    nickel, so I would encourage Treasury and the Mint to take a
    look at refocusing how we produce those coins to make them
    actually positive for the balance in terms of producing
    seigniorage for the United States. I am glad to hear that you
    are moving in that direction
        Secretary Bessent, the President has recently made budget
    requests that propose significant cuts to the Community
    Development Financial Institutions, or CDFIs, or the CDFI fund,
    and suggest to ending core CDFI programs. I know you have
    recently made public comments about the statutory basis for the
    CDFI programs. What is your position on the future of the CDFI
    fund, and do you believe it should continue to play a role in
    supporting access to capital in underserved communities across
    the country?
        Secretary Bessent. Congressman, as I told the Congressman
    on the other side of the aisle, we are creating a new $100
    billion award program that would provide access to affordable
    financing, and this will be mostly in rural America.
        Mr. Rose. Excellent. I am glad to hear that, and I
    understand we always need to address how these programs work
    and whether they are efficient, cost-effective, and produce the
    outcomes we want. I am glad to hear that you are making moves
    in that direction.
        I just want to pause at this point and say broadly, it is
    refreshing to have competent aggressive energetic leadership,
    and so, I commend you for that and very excited about the
    things that you are doing at the Treasury.
        Secretary, can you discuss the significance of confirming
    President Trump's regulatory appointees in advancing his
    America-first agenda? Specifically, how do these appointments
    impact the implementation of these important policies to move
    America forward?
        Secretary Bessent. Yes, sir. I believe that we need to get
    them appointed as soon as possible. We have some very good
    acting, the chairs or directors of these, but the sooner we can
    do it, the sooner we can get down to the business of making
    those institutions work better for the American people, and
    making sure that main street can prosper, because I have been
    very concerned, as I have mentioned today, I have met, I think,
    the--personal meetings with over 50 community bankers, I spoke
    to more than 300, and I think it is very important to get these
    regulators in place so that community banks, small banks, small
    regional banks can make sure that Main Street participates with
    the rest of the country.
        Mr. Rose. Thank you. I completely agree, and that is what
    we are hearing, what I am hearing from the regulated entities
    in my district and across Tennessee.
        Secretary, given the IMF's limited success in pushing China
    on transparency and debt restructuring, how can Treasury
    justify supporting the IMF's current leadership?
        Secretary Bessent. We are in constant discussions. It is
    leadership that I inherited. Thus far they seem very open to
    the Trump agenda, America first, and advancing the issues that
    most affect the United States and working Americans, so we will
    keep pushing them on that.
        Mr. Rose. Thank you, Mr. Secretary. Mr. Chairman, I yield
    back.
        Mr. Steil. The gentleman yields back. The gentlewoman from
    Ohio, the Ranking Member on the National Security illicit
    Finance and International Institution Subcommittee, Mrs.
    Beatty, is recognized for 5 minutes.
        Mrs. Beatty. Thank you, Mr. Chairman, and Ranking Member,
    and to you, Secretary Bessent.
        The Trump Administration has alleged that detecting and
    deteriorating transnational criminal organizations such as
    Iranian terrorist groups and their proxies is a priority for
    national security, but on March 2nd of 2025, your Department
    announced that it would not enforce any penalties or fines
    associated with the Beneficial Ownership Information (BOI)
    reporting rule, nor will it enforce the Corporate Transparency
    Act (CTA) against U.S. citizens, domestic reporting companies
    or their beneficial owners. I am a little confused of how you
    square those 2 things.
        My question is, can you explain to, or would you explain to
    the American public how you undermine the bipartisan CTA and
    expect law enforcement and national security agencies to
    quickly and effectively know the true owners behind shell
    companies registered in the United States now that foreigners,
    including a drug cartel, gang members, could register a company
    in the United States with no State or any Federal ownership
    reporting requirements. I remind you in your testimony, you
    talked about illicit actors; well, these are some of our
    illicit actors.
        Secretary Bessent. Congresswoman, an overwhelming majority
    of the domestic entities that you are describing are
    hardworking Americans with small businesses. We bifurcated the
    bill, and any foreign entities must still file.
        Ms. Beatty. So are you saying to me it is not true, that
    they must file and do--the foreign entities must file the BOI?
        Secretary Bessent. Yes. We bifurcated the CTA programs that
    domestics do not have to.
        Ms. Beatty. So maybe I am asking it the wrong way. So it
    appears that they are doing it, registering to avoid the
    transparency of who the companies are.
        Secretary Bessent. I am not sure what your question is. I
    would be happy to answer it.
        Ms. Beatty. So I guess I am looking at it as, and if you
    are saying it is not true, and that they now are complying and
    completing the BOI--so let us take it one step at a time. So
    you are saying everybody is completing the BOI. You are
    enforcing it.
        Secretary Bessent. No, ma'am. I am saying that we have
    bifurcated it. That U.S. nationals do not have to file, and
    that foreign nationals do.
        Ms. Beatty. Okay. So I guess when we look at this, if we
    are limiting enforcements of the rule just to the foreign
    entities, that creates a giant loophole whereby any foreign
    entity can register in the United States and evade or not do
    the BOI reporting requirements.
        Secretary Bessent. They would be subject to all--they would
    have to come through a U.S. financial institution, so they
    would be subject to all U.S. institution----
        Ms. Beatty. Including the BOI?
        Secretary Bessent. The----
        Ms. Beatty. Including the BOI? Including the BOI? Yes or
    no? Because the answer is no. I mean, you can say it however
    you want to, but the answer is no. This makes it easier--and
    this is what I want the American folks to know--it makes it
    easier for human and drug traffickers, cartels, terrorists,
    organizations and other criminals to do business in the United
    States. When you are limiting the enforcement just to foreign
    entities it exempts 99 percent of the entities that Congress
    intended the law to cover when it was passed into law.
        I think I do have my answer. We are just not agreeing on
    it, and we know why. Let me go to my second--it is my time. Let
    me go to my next question. It is my time. It is my time. You
    will not do this on my time.
        Now, I am going to ask for a few more seconds since he
    refused to comply with my time. Not his time.
        In 2016, former Secretary Jack Lew announced that Harriet
    Tubman was to be the new face of the $20 bill. Can you tell me
    what is the current status of this project?
        Secretary Bessent. No, ma'am, I cannot, but my staff will
    get back to you.
        Ms. Beatty. No. I want you to get back to me because, see,
    there seems to be an issue when it comes to things that affect
    people of color or people who live in poverty, whether it is
    what you are doing with Social Security, what you are doing
    with restricting funds----
        Mr. Steil. The gentlewoman's time has expired.
        Mrs. Beatty. So I want you----
        Mr. Steil. The gentlewoman's time has expired.
        Mrs. Beatty. Will you respond to me?
        Mr. Chairman, I need him to answer if he will--I am not a
    staff person.
        Mr. Steil. The gentlewoman can submit questions for the
    record.
        Mrs. Beatty. I am not asking him to have his staff report
    to me. Mr. Chairman, I am addressing it to you----
        Mr. Steil. The gentlewoman's time has expired.
        Mrs. Beatty [continuing]. to ask him to respect me. Mr.
    Chairman, I am talking to you.
        Mr. Steil. The gentlewoman's time has expired.
        Mrs. Beatty. I need him to address----
        Mr. Steil. The gentlewoman's time has expired.
        Mrs. Beatty. If we will answer me as--no, I am not going to
    yield. I am not going to stop until you----
        Mr. Steil. The gentlewoman's time has expired.
        Mrs. Beatty. You direct him to answer to me as a Member of
    Congress. Mr. Chairman, point of order to you. Mr. Chairman,
    point of order to you. I will not stop. I will not be silent--
    --
        Mr. Steil. The gentlewoman is not offering----
        Mrs. Beatty. Until you direct him to answer me.
        Mr. Steil. An appropriate parliamentary inquiry. Does the
    gentlewoman have a parliamentary inquiry?
        Mrs. Beatty. Yes, I do.
        Mr. Steil. Please state the parliamentary inquiry.
        Mrs. Beatty. As a member of the U.S. Congress addressing
    the Secretary, I am asking you to rule on asking this hostile
    witness to direct his response to me versus having him tell me
    that his staff will respond to me. My staff person did not ask
    him the question. I did.
        Mr. Steil. The gentlewoman does not state a parliamentary
    inquiry.
        Mrs. Beatty. Let me ask a point of privilege to you, Mr.
    Chairman, because I am not going to stop this this morning
    until you respond to me, then, if you will direct the Secretary
    to respond to me as a Member of Congress, or let me ask him.
        Mr. Steil. There is not a point of privilege. The
    gentlewoman's time has expired.
        Mrs. Beatty. If he will respond to me----
        Mr. Steil. The gentlewoman's----
        Mrs. Beatty. Will he respond to me----
        Mr. Steil. The gentlewoman will suspend. The gentlewoman
    will suspend.
        Mrs. Beatty. It could be simple if he will respond to me.
        Mr. Steil. The gentlewoman will suspend.
        Mrs. Beatty. If he responds to me----
        Mr. Steil. The gentlewoman will suspend.
        Mrs. Beatty. If he will respond to me----
        Ms. Waters. The gentlewoman makes a legitimate request. She
    has personal privilege.
        Mrs. Beatty. You could simply ask him to respond.
        Ms. Waters. She has personal privilege.
        Mrs. Beatty. Just ask him to respond if he will respond to
    a Member of Congress versus saying a staffer. It is as simple
    as that.
        Mr. Steil. I ask that members keep decorum and remain
    cordial during today's hearing.
        Mrs. Beatty. I am being cordial.
        Mr. Steil. The gentlewoman will suspend. The Chair has the
    time.
        Mrs. Beatty. Mr. Chairman, will you----
        Mr. Steil. The Chair has the time. The gentlewoman will
    suspend.
        Ms. Waters. The gentlewoman makes a legitimate request.
        Mr. Steil. I ask that members keep decorum and remain
    cordial during today's hearing.
        Mrs. Beatty. I am being cordial. I resent your statement to
    imply that I am not. I am a Member of the U.S. Congress. I am
    asking this Secretary----
        Mr. Steil. The gentlewoman may submit questions for the
    records (QFRs), for the record, which will be responded to by
    the Secretary.
        Mrs. Beatty. Thank you.
        Mr. Steil. The gentlewoman's time has expired. The
    gentleman from Texas, the Chairman of the Small Business
    Committee, Mr. Williams, is recognized for 5 minutes.
        Mr. Williams. Thank you, Mr. Chairman, and thank you, Mr.
    Secretary, for being here. This may be a little easier on you
    here. I will try to move it fast forward.
        The Chinese Community Party has enabled their economy to
    serve as a central hub for money laundering, human trafficking
    and the export of chemicals used to manufacture fentanyl.
    Increasingly Chinese nationals of financial works have informed
    operational lines, as with Mexican cartels, providing
    laundering services, digital payment platforms and chemical
    shipments to fuel the trafficking of fentanyl across our
    southern border.
        These criminal partnerships exploit the international
    financial system, impose a direct threat to U.S. national
    security, public health and financial integrity.
        My question, Mr. Secretary, is, can you elaborate on the
    steps Treasury has taken to disrupt the flow of illicit
    financing, money laundering and drug trafficking between
    Chinese entities and Mexican drug cartels?
        Secretary Bessent. Thank you, Congressman, for that very
    important question and know that they are interlinked, that the
    Chinese provide precursor drugs that are then converted into
    fentanyl by the Mexican cartels.
        Just today, I signed an order that will be made public
    within the next few days identifying Chinese entities who are
    engaged in the fentanyl trade.
        Mr. Williams. Great. Far too long, China has taken
    advantage of the international financial system and has become
    the world's largest creditor. The IMF and World Bank's focus on
    climate and social initiatives has resulted in a lack of
    accountability for the Chinese unreliable economic data,
    currency manipulation and opaque predatory lending practices.
        In addition to the lack of accountability, this shift in
    focus to climate has forced many developing countries to turn
    to Chinese financing.
        The United States must leverage its leadership of the
    world's stage to counter China's growing influence as a global
    lender and put an end to the deceptive economic practices.
        Secretary, how is Treasury working to prevent IMF and the
    World Bank recourses from indirectly legitimizing China's
    deathtrap diplomacy and economic depression?
        Secretary Bessent. Congressman, in various ways. One, as
    you would have noticed I would have said that when this
    horrible Russia-Ukraine conflict ends, that the--no one who--no
    country or person who financed the Russian war machine will be
    eligible for any rebuild in Ukraine, especially that financed
    by the World Bank or any of the other multilateral development
    banks.
        Also, we are working with the Organization for Economic
    Cooperation and Development (OECD), especially, to look at--and
    the IMF, and the World Bank, to look at the true debt levels
    for these countries. Everyone agrees, or everyone, save one
    country, agrees that this is a problem, that there are
    rapacious mineral deals, that there are towing arrangements,
    and it is impossible to know and assist a country that has
    experienced economic hardship when we do not know the true
    levels, or if there is an undisclosed priority payment to
    another creditor.
        Mr. Williams. Let me try to get to my last question. I was
    encouraged to hear that you are taking a fresh look at the bank
    regulatory framework to better reflect the actual risk and to
    ensure a level playing field across the financial system. As
    part of that review, I hope you will consider where U.S.
    regulations may be putting banks and financial institutions at
    a disadvantage be to our foreign competitors. In particular, I
    urge you to weigh the combined impact or proposals like Basel
    III Endgame, the GSIB surcharge and leverage requirements,
    especially whether these changes could limit the bank's ability
    to support the economy and compete globally.
        In your work so far, are there any specific areas where you
    plan to address these concerns about regulatory--putting U.S.
    institutions at a disadvantage, such as in the reproposal of
    the Basel III Endgame rule by amending the GSIB surcharge
    regulation.
        Secretary Bessent. Congressman, we are looking across all
    areas and know that this is at the top of our agenda, that most
    countries have very concentrated banking systems. In many
    cases, the banking systems are larger than the Gross Domestic
    Product (GDP) of the countries. So they have very different
    needs than the United States. To strengthen the United States,
    lending and capital markets and economy is the breadth and
    depth of our financial institutions. We will continue to
    advocate for them both at home and abroad.
        Mr. Williams. Thank you for your service. I think you are
    doing a great job. I yield back.
        Mr. Steil. The gentleman yields back. The gentleman from
    California, the Ranking Member on the Task Force on Monetary
    Policy, Mr. Vargas, is recognized for 5 minutes.
        Mr. Vargas. Thank you very much, Mr. Chair, and Ranking
    Member for holding this hearing.
        Mr. Secretary, welcome. It is great to have you here. I
    want to thank my colleague and friend from Texas for asking the
    question about Russia. Do you consider Vladimir Putin a war
    criminal?
        Secretary Bessent. Yes.
        Mr. Vargas. Would you negotiate with a war criminal?
        Secretary Bessent. I think that is the nature of diplomacy.
    One must negotiate with both sides, sir.
        Mr. Vargas. So you will be negotiating then with a war
    criminal?
        Secretary Bessent. I believe that negotiation was needed
    with the Japanese after World War II.
        Mr. Vargas. Okay. Thank you for that answer.
        Are you familiar with what President Trump has called his
    one Big Beautiful Bill?
        Secretary Bessent. Yes, sir.
        Mr. Vargas. Would you describe the basics of that bill?
        Secretary Bessent. It is combination--the core of that bill
    is to make the 2017 Tax Cuts and Jobs Act permanent.
        Mr. Vargas. If this what he quotes, a Big Beautiful Bill
    passes, will the deficit go up or will the deficit go down?
        Secretary Bessent. I believe over time the deficit to GDP,
    which is the important number--even Secretary Yellen agrees
    with that--will stabilize and go down.
        Mr. Vargas. So next year, will it go down?
        Secretary Bessent. Sir?
        Mr. Vargas. Yes.
        Secretary Bessent. I believe--yes.
        Mr. Vargas. So if the past--if the Big Beautiful Bill
    passes, do you believe the deficit will go down next year?
        Secretary Bessent. The deficit to GDP will. Because, again,
    what is important is that we grow the economy faster than we
    are growing debt.
        Mr. Vargas. I understand that. I understand that. Of
    course, but you say that in the long term--I am asking the
    short term, will the deficit go down?
        Secretary Bessent. I believe the debt to GDP can go down.
        Mr. Vargas. What about the deficit itself? The amount of
    money--the amount of money that comes in as opposed to goes
    out, will the deficit go down next year?
        Secretary Bessent. Will it go down from 2024 and 2025, I
    believe it will because these are ordinary----
        Mr. Vargas. Okay. What about the long-term debt? Will it go
    up or down if this Big Beautiful Bill passes?
        Secretary Bessent. Again, sir, while the absolute----
        Mr. Vargas. I think the reason you are having a hard time
    answering----
        Secretary Bessent. I am not having a hard time answering
    because what is important----
        Mr. Vargas. I have given you plenty of time.
        Secretary Bessent [continuing]. is that the absolute level
    of debt, it is as Secretary Yellen said the debt to GDP. So if
    our GDP were a hundred--.
        Mr. Vargas. Everyone is talking about the $37 billion. Is
    it going to go up or down?
        Secretary Bessent. Sir?
        Mr. Vargas. Yes, is it going to go up or down?
        Secretary Bessent. It will likely go up.
        Mr. Vargas. Okay.
        Secretary Bessent. If the GDP goes up faster, we----
        Mr. Vargas. I think that is an interesting thing. My
    colleagues on the other side always talk about reducing the
    debt and reducing the deficit. Yet the hypocrisy of trying to
    pass the big beautiful bill that will cause both of them to go
    up.
        Secretary Bessent. No, sir, I did not say the deficit----
        Mr. Vargas. I know you did not say--you are trying not to
    say it, but that is exactly what is going to happen.
        Secretary Bessent. No, I actually said it would not go up.
        Mr. Vargas. I know you did.
        Secretary Bessent. Just to be clear----
        Mr. Vargas. You said the number would go up.
        Secretary Bessent. Just to be clear, last year I had 6.7
    percent deficit to GDP----
        Mr. Vargas. No, no, I am asking the number. No, no, no, I
    am asking the actual number. No, we are looking at----
        Secretary Bessent. If I can--the previous administration
    was the largest when we were not in recession and not----
        Mr. Vargas. I am not going to let you get away with that
    because it is very clear what is going to happen if they pass
    their bill. The deficit is going to go up, and the debt is
    going to go up, and we are going to see the hypocrisy of them
    always saying cut the budget, so the deficit is going to go
    down, and the debt is going to go down. It is not. It is going
    to go up.
        Now, I do want to ask you about the independence of the
    Fed.
        Secretary Bessent. Yes, sir.
        Mr. Vargas. You have kind of been on both sides of the
    fence on this. You seem to say that we need an independent Fed,
    but at the same time you said they should have been a shadow
    Fed.
        Secretary Bessent. Since taking office, I have refrained
    from commenting on Fed monetary policy and I have said that
    monetary policy is a jewel box that must be preserved.
        Mr. Vargas. Okay. Great. Last, I do want to ask this
    because a number of my colleagues have brought it up about
    elite, the coastal elites. Where did you go to school?
        Secretary Bessent. I grew up in Little River, South
    Carolina.
        Mr. Vargas. What university did you graduate from?
        Secretary Bessent. 500----
        Mr. Vargas. Wait. You graduated from Yale. You were part of
    the Fed's society, one of the big three.
        Secretary Bessent. Congressman, I worked three jobs to put
    myself through Yale----
        Mr. Vargas. I understand that too.
        Secretary Bessent. So the thing----
        Mr. Vargas. The thing that I was--the funny part is, let us
    talk about the coastal elites, you are a billionaire that went
    to Yale. I do not hold that against you.
        Secretary Bessent. Vice President Pence was--
        Mr. Vargas. I just find it interesting that my colleagues
    are always talking about the coastal elites. Yet the President
    and yourself are both coastal elites.
        Secretary Bessent. I made all my own money, sir.
        Mr. Steil. The gentleman yields back.
        I recognize myself for 5 minutes for the purpose of asking
    questions.
        Secretary, thank you for being here. Earlier today you
    referenced the Electric Slide,--I will share my concerns that
    during 4 years of the Biden Administration, we were sliding
    behind foreign competition, in particular, in the digital asset
    space from the Bahamas to China.
        I want to ask you, what would happen if we put our heads in
    the sand, if we object, if we walk out of that type of
    leadership role, which I think is so essential, to make sure
    that the United States continues to lead the way in Web3 as we
    did in Web2? In particular, how does the leadership in digital
    assets play into President Trump's broader agenda and,
    specifically, how do dollar-denominated stable coins impact
    dollar dominance in Treasury markets?
        Secretary Bessent. Congressman, thank you for that very
    important question. Our goal is to encourage firms to reshore,
    reshore, bring back to the United States best practices that
    are digital asset innovation and experimentation here in the
    United States without scaling back their ambition to influence
    global industry.
        The administration's efforts to promote clear regulatory
    frameworks for digital assets will contribute to this goal. So
    ongoing efforts from a fair access interoperability of payment
    technologies across all borders. We will continue these more
    private-sector solutions and discourage public-sector solutions
    that historic markets can stifle competition.
        Mr. Steil. Let me jump in because I think that is spot on.
    Let us talk about what happens if we fail to act. Yesterday,
    some members objected--walked out of a hearing to discuss
    market structure and digital assets, and an absolutely
    essential leadership role of the United States has to play.
        What happens if we walk out on our responsibility to lead
    in the digital asset space? What would occur if Web3 center of
    gravity shifts away from the United States to countries like
    China or other locations?
        Secretary Bessent. Numerous things could occur, sir. As we
    saw, under the previous administration, an entire ecosystem,
    the unregulated and renegade springs up outside the U.S and
    illicit actors abuse the value of these transfer systems. There
    is a technological loss here.
        Mr. Steil. Can you walk us through or share any of your
    impressions from the conversations you have had with your
    counterparts abroad as it relates to their experience with
    regulating in the digital asset space?
        Secretary Bessent. They believe it is very important and I
    believe that they are a little worried that the U.S. is willing
    to restore its leadership here. As I said earlier, there is a
    chance that digital assets can provide a substantial source of
    demand for the U.S. dollar.
        Mr. Steil. In my bill, the Stable Act, which regulates
    dollar-denominated stable coins, we give the Treasury the
    authority to identify which foreign stable coin regulatory
    regimes are comparable to ours. What are the key aspects of
    comparable regimes? Are there lessons or criteria that we can
    draw from other similar areas in the financial services space?
        Secretary Bessent. Congressman, I think that we had the
    blueprint with the bank regulation and adherence to anti-money
    laundering laws around the world. Financial stability, and
    the--I would guess that 70 percent of the countries would be
    very easy to judge, yes, no, and then there will be another
    group. That is why I believe that some of the bills encourage
    phasing this in.
        Mr. Steil. A lot of stable coins, a lot of digital asset
    space needs reliable banking services. Could you comment
    briefly on how the Treasury's working with bank regulators to
    ensure that financial institutions can safely participate in
    this emerging industry?
        Secretary Bessent. We have recently delivered a report to
    the President on this. We had safe and sound best practices. We
    want to work with the financial industry with new companies and
    entrepreneurs as well as incumbents. The banks--there is a
    solution to banks to participate in this business, whether it
    is through custody or their own coins.
        Mr. Steil. Let me shift gears really quickly in my final 30
    seconds. President Trump issued an executive order on
    modernizing payments to and from Americans' banks accounts. The
    executive order noted that the Treasury checks are 16 times
    more likely to be reported lost or stolen or returned as
    compared to electric transfer funds. Do you think we are making
    real progress in this space?
        Secretary Bessent. We are working via all speed ahead. A
    Congresswoman from Staten Island via told me of numerous losses
    of checks in the postal system, and we think it is both cost
    cutting and a good practice, sir.
        Mr. Steil. Thank you very much. Thanks for being here
    today.
        I now recognize the gentleman from Texas, Mr. Gonzales, for
    5 minutes.
        Mr. Gonzalez. Mr. Secretary, thank you for joining us this
    morning. According to The Wall Street Journal, oil and gas
    companies have lost over $280 billion in market value in April
    of this year alone, more than any other sector. This decline is
    attributed to a combination of factors but mostly attributed to
    the tariffs.
        At a recent Dallas Federal Reserve meeting, a veteran CEO
    said, quote, I have never felt more uncertainty about our
    business in my entire 40 years in the industry, and this
    turmoil is no accident. It is a direct result of Mr. Trump's
    vandalism.
        Just yesterday, Diamondback Energy, one of the largest
    Permian producers told shareholders that tariffs are adding
    significant costs of drilling activity. That is mostly due to
    the tariffs to our neighbors to the North and the South.
        Mr. Secretary, the chaos in the energy sector has eclipsed
    any gains from President Trump's industry-friendly regulatory
    rollbacks that they were so much looking forward to. Stable
    energy prices depend on stable policy. The Trump Administration
    pledged to support American energy sector. However, this
    decline demonstrates the opposite.
        Given these outcomes, how do you reconcile the
    administration's stated support for energy sector with policies
    that appear to have directly undermined its stability and
    global competitiveness?
        Secretary Bessent. Sir, I will take issue with the idea
    that it was tariffs. We have seen one of the largest decreases
    in the underlying price of crude in history.
        Mr. Gonzales. That is right.
        Secretary Bessent. So----
        Mr. Gonzales. A hundred percent--there is not a single
    energy CEO in America right now that would agree with you. They
    are all attributing to their downfall right now and the
    troubles that they are having to the tariffs, and they need
    some relief. What is the administration going to do?
        Secretary Bessent. Congressman, you and I must speak to
    different energy executives, because I speak to them quite
    often.
        Mr. Gonzales. I spoke to American Petroleum Institute (API)
    today.
        Secretary Bessent. I will note that the Organization of the
    Petroleum Exporting Countries (OPEC) has done a substantial--
    substantial supply increase and the history of substantial OPEC
    supply increase----
        Mr. Gonzalez. The tariffs are just making it worse. China
    is no longer buying our L and G, and neither is a lot of other
    countries around the world.
        Secretary Bessent. I think we have seen the--Harold Hamm,
    head of Continental Resources had said that he is reshoring his
    supply chain, and he believes that over time he did not save
    any money, any money by outsourcing the equipment.
        Mr. Gonzalez. Secretary, our energy industry is hurting,
    and they need your help. I know you are a smart man, and you
    are one of the most stable people in this administration. You
    need to talk to President about this. This is hurting the
    industry, and it is hurting the American people, and more needs
    to be done.
        I have another question that I want to talk to you about
    that is hopefully a little easier. It has to do with our
    shrimping and fishing industry. As you may know, our domestic
    shrimping and fishing continue to experience economic hardships
    caused by an increase of foreign imports, high fuel prices,
    labor shortage, immigration regulation, all to make matters
    worse.
        Plus we have flooded the domestic seafood markets with
    foreign farm-raised shrimps. Many which are subsidized by
    American Federal dollars in the international financial
    institutions.
        We need to put an end to this. What are we doing in terms
    of tariffs to help this industry that is hurting? I know--I
    mean, if we want to talk tariffs, there are some that work. I
    think this is certainly an industry that needs a lot of help.
    It has been ignored. It is on the verge of collapse. If we
    continue down this path, we will rely on imported seafood and
    certainly imported shrimp which is hurting the worse within the
    seafood industry.
        I do not know how familiar you are with this industry, but
    I am curious to hear your opinions and what can be done to
    improve this?
        Secretary Bessent. Sir, as I mentioned earlier, this
    coastal elite grew up in a fishing village that when I was
    young was 500 people, so I am very attuned to that. Again, on
    one hand you are saying you do not like tariffs. On the other,
    they are----
        Mr. Gonzalez. No, I do not like tariffs on our energy
    sector. Yes, we do need tariffs on certain industries. This is
    one of them that I think would make sense.
        Secretary Bessent. I agree and I would be happy to work
    with you on this. We have worked with the Alaska delegation
    extensively on what is happening with Russian illegal fishing
    and illegal or sales to China that is then transship back to
    the United States. We would be happy to work with you on that.
        Mr. Gonzales. I would love that. Okay. I will be in touch
    with you. Thank you so much. I yield back.
        Chairman Hill [presiding]. The gentleman yields back.
        The gentleman from South Carolina, Mr. Timmons, is
    recognized for 5 minutes.
        Mr. Timmons. Thank you, Mr. Chairman. Secretary Bessent,
    thank you for being here with us today. You are respected by
    the President, his economic team, leaders on Wall Street, and
    the broader international financial community. Your steady
    leadership is appreciated on both sides of the aisle. After an
    abysmal 4 years, it is encouraging to see thoughtful and
    serious leadership guiding this discussion once again.
        I would like to add a personal note. Both of us are proud
    to call South Carolina home. My family like yours also came to
    Charleston in the 1600s.
        I know you understand the economic landscape of South
    Carolina deeply, and that perspective is invaluable in the
    position that you hold.
        Let me start with a question about the textile industry.
    South Carolina and especially my district in the upstate has a
    long history in textiles. For over a hundred years, it was more
    than just an economic sector, it was part of the cultural and
    social fabric in our communities but there was a drastic shift
    in the seventies and the eighties.
        Well-intentioned regulations from Washington related to
    labor and the environment made the U.S. economy no longer
    competitive. While I agree with the policies that we should not
    dunk dyes and chemicals into the rivers, and we should not have
    120 degrees in factories and people should only work 40 hours a
    week, we need to focus on being competitive. Those regulations,
    all of it did was push all our textile jobs to China--or most
    of our textile jobs to China.
        China took advantage of it. They incentivized and
    subsidized textile manufacturing, capturing an enormous amount
    of the market share. Hundreds of thousands of jobs were lost in
    the South.
        Recently, you made a comment suggesting we do not need to
    bring the booming textile industry that once defined the
    regions where we both grew up back. That statement stirred some
    concern from some of the textile companies that survived in the
    district.
        I agree with your broader point that we should not return
    to producing low-quality goods just for the sake of
    manufacturing in the United States.
        I do want to ask, do you agree that we should prioritize
    support for the American textile industry that are still here
    and particularly leaders that are in innovation and high-tech
    manufacturing and people that are producing Berry Amendment
    products for our warfighters?
        Secretary Bessent. Congressman, what I mean and meant was
    the survivors in this industry, they had done it through
    innovation, and they will continue to innovate, and they are
    high-end textile manufacturers. I remember going to China in
    the 1990s and 2000s and seeing everything that had been
    outsourced there in the textile industry. Socks--sock city,
    underwear city--and those are the jobs you and I grew up with
    and many people or family and friends were involved with. I
    think that we, through good tariff policy, can make sure that
    these existing businesses can grow and thrive, especially in
    the high-end. Again, anyone who has survived has done it
    through innovation and hard work.
        Mr. Timmons. That is what I told them. I told them that we
    still support them, and we are going to make sure they continue
    to thrive.
        Secretary Bessent. A hundred percent, sir.
        Mr. Timmons. Absolutely. Absolutely. I want to turn to the
    automotive industry, specifically, Bavarian Motor Works (BMW),
    which operates its largest plant in the world in Spartanburg,
    South Carolina. That facility which opened in 1994 has helped
    make our State the top auto exporter in the United States and
    employed either directly or through nearby supply networks
    indirectly, almost 80,000 of my constituents. It is almost one
    in ten of them, and for foreign automakers like BMW are
    continuing to invest heavily U.S. manufacturing. Incredibly
    they have invested an additional $4 billion in the last 3
    years. That investment has real lasting benefits for American
    workers, exports, and innovation.
        It is President Trump's promise to the American people to
    renew the U.S. economy's competitiveness in the global economy,
    and this is an effort long overdue.
        My question is this: As President Trump renegotiates our
    trade relationships with the world, is it fair to stay that
    BMW--the type of investment that BMW has made a generational
    investment is what we are hoping to incentivize?
        Secretary Bessent. Yes Congressman. I regularly see at the
    Port of the Charleston the BMW X series sitting there for
    export. I think that the President recently met with the heads
    of the three German auto companies and is working toward a
    solution for more American content and more made in the United
    States rather than just as assemblers. There would be more jobs
    in your district.
        Mr. Timmons. That message was heard loud and clear and they
    are going to continue to invest. They have been a very good
    partner. I am just excited because interest rates are coming
    down, energy costs going down, regulatory relief--a more fair
    trade deal. We are going to be the best place to start to grow
    to build a business. I appreciate your leadership in that
    regard. Thank you, sir. I yield back.
        Chairman Hill. The gentleman yields back.
        The gentleman who is the Vice Ranking Member of the full
    committee, Mr. Casten, is recognized for 5 minutes.
        Mr. Casten. Thank you, Mr. Chair. Secretary Bessent, I am
    starting my seventh year in Congress. In those 7 years, I have
    never received more phone calls from my constituents on any
    issue than the hack into the Treasury payment system earlier
    this year.
        As you know well, this is the system that manages over $5
    trillion a year of Federal payments, payments to taxpayers,
    payments to Social Security beneficiaries, payors to embedded
    foreign assets who are overseas and under cover, and it has
    very personal information and their routing information. This
    is a purple district. People were nervous.
        We sent a letter to your office on 150 colleagues asking 20
    questions. Your response that we just received was
    nonresponsive on all 20.
        Mr. Chairman, I would like unanimous consent to enter those
    two letters into the record.
        Chairman Hill. Without objection.

        [The information referred to was not submitted prior to
    printing.]

        Mr. Casten. I want to get through a lot of those questions
    right now, Secretary Bessent. I would ask you to be as brief as
    you were in your response, but I would very much like a more
    fulsome answer in writing.
        In January, The New York Times reported that you pressured
    David Ludwig out of his role overseeing that after he refused
    to grant that access to people that Elon Musk had imposed. Can
    you confirm the accuracy of those reports.
        Secretary Bessent. That is incorrect.
        Mr. Casten. You met with him on January 30 and put him on
    administrative leave, and he left a day later. Is that
    accurate?
        Secretary Bessent. I--they did not put him on
    administrative leave. Administrative leave--I asked him to
    take--I met with him 90 minutes after----
        Mr. Casten. So you are denying The New York Times report?
        Secretary Bessent. I,
        Mr. Casten. Was it your choice----
        Secretary Bessent. I am adamantly saying that The New York
    Times is inaccurate.
        Mr. Casten. Okay. That is fine. That is yes or no. The New
    York times was inaccurate. Fine.
        Secretary Bessent. I placed him on administrative leave,
    and he was--subsequently resigned after sending numerous----
        Mr. Casten. Sir, I am just asking for a yes or no
    questions. If you want to be voluminous, please write me a
    letter.
        Was it your decision to terminate Mr. Ludwig, or were you
    pressured by others.
        Secretary Bessent. He resigned.
        Mr. Casten. Who had made the decision to put him on
    administrative leave? You or someone else?
        Secretary Bessent. Again, sir, he was not put on
    administrative. That is totally inaccurate.
        Mr. Casten. Fair enough. Tom Krause--you a fan of him, who
    is not playing that role?
        Secretary Bessent. Yes.
        Mr. Casten. You had mentioned earlier he was in that role.
    Do you agree that role includes duties that include the
    managing Treasury payment system to ensure your time at Social
    Security, payments overseeing auctions for U.S. Treasury bonds
    which determine interest rates, and ensuring the United States
    does not breach the debt.
        Would you agree that is all the part of the functions that
    Mr. Krause is now holding?
        Secretary Bessent. No.
        Mr. Casten. No? Shocking. Okay. Does Mr. Krause have any
    prior experience in government service?
        Secretary Bessent. No, he does not. Neither do I.
        Mr. Casten. Does Mr. Krause have any prior experience in
    the financial sector, which of course you do?
        Secretary Bessent. What's that?
        Mr. Casten. Just you can answer me. I am doing this solo.
    You do not need the people behind you to help you.
        Does Mr. Krause have any experience in the financial
    sector?
        Secretary Bessent. In the financial sector, yes. He has put
    together more than a hundred----
        Mr. Casten. No, no, no. Did he work for a bank? Did he work
    for a hedge fund? Did he work for a private equity firm?
        Secretary Bessent. He worked for a private equity firm.
        Mr. Casten. He is the CEO of a software company.
        Secretary Bessent. He has done over a hundred billion of
    tech deals.
        Mr. Casten. He runs a software company. He is still the CEO
    of that software company, is he not?
        Secretary Bessent. I am not sure.
        Mr. Casten. He is. Is it your view that job that he is
    holding is a part-time job?
        Secretary Bessent. I am not----
        Mr. Casten. Managing $5 trillion a year of distributions.
    That is a part-time job, or does that require full time?
        Secretary Bessent. No, sir, he is managing $5 trillion a
    year in distributions. He is doing a tech upgrade, and ERP
    system----
        Mr. Casten. That is all that Mr. Ludwig was doing was a
    tech upgrade?
        Secretary Bessent. Sorry?
        Mr. Casten. Mr. Ludwig who said I am not going to allow
    people to hack into the system; he was just doing a tech
    upgrade? Were you downgraded what that job function is?
        Secretary Bessent. Mr. Leverick was in charge of 1.5
    billion payments a year, which one-third did not have a task
    identification----
        Mr. Casten. Sir, come on. Come on, come on, come on.
        Secretary Bessent. Sir, he had----
        Mr. Casten. We are going to move along. The Chairman
    notably a moment ago did not swear you in so you are not under
    oath right now.
        February 4 in your response to a Senate Democrats letter
    you said that Mr. Krause will only have read-only access. A
    moment ago in response to our Chair, you said, and I quote:
    They were only granted read-only access at Treasury.
        You are not under oath right now--you could be, but you are
    not. Mr. Jueli testified under oath in a recent hearing saying
    that Marko Elez was write access to the Treasury payment
    system. Do you wish to correct your remarks to Chair with the
    Ranking Member that noone was given write access?
        Secretary Bessent. I would say that I----
        Mr. Casten. That no one was given the write access.
        Secretary Bessent. I never granted anything other than----
        Mr. Casten. Marko Elez was given write access.
        Secretary Bessent. I never granted anything other than
    read-only access.
        Mr. Casten. Mr. Elez left the Treasury Department in part
    after it was discovered that he said normalizing Indian Hate
    and I just want a eugenic immigration policy. Do you agree with
    those sentiments?
        Secretary Bessent. I do not at all.
        Mr. Casten. Do you think that someone who holds those
    sentiments should be employed in your department?
        Secretary Bessent. I had a conversation with the Vice
    President----
        Mr. Casten. This is----
        Secretary Bessent. I admired his grace.
        Mr. Casten. He then went to HHS----
        Chairman Hill. The gentleman's time has expired.
        I thank the gentleman from Illinois.
        The gentleman from Indiana is now recognized, Mr. Stutzman,
    for 5 minutes.
        Mr. Stutzman. Thank you, Mr. Chairman. Mr. Secretary, thank
    you for being here and, frankly, I apologize. The fact that you
    are getting a lot of accusations thrown at you, and you have
    not had much chance to respond to some of them, and that are
    fair questions that I know that you have good answers for.
        With respect to the individuals originally referenced by
    Ranking Member Waters who may have had access to certain
    Business and Financial Service (BFS) system, and in response to
    Mr. Casten, do you want to add any additional information on
    that matter?
        Secretary Bessent. I would say that is in litigation, and I
    never authorized access.
        Mr. Stutzman. Thank you. I just want to say thank you for
    your service and for your willingness to come serve in
    Washington, DC, at a critical time and the fact that you heeded
    President Trump's call. It is refreshing, honestly.
        We see a lot of ups and downs. Things that are happening
    around the world but, here at home, there is a reset that is
    happening, and that does create some volatility. I will tell
    you what, there is a lot of good news that I think the other
    side is missing. I found it ironic that this chart was handed
    out earlier. Of course, it tries to show that all the blame is
    on the Republican or Presidents over the past century or so but
    the one that really----
        [Chart.]
        Secretary Bessent. Congressman, if I may interrupt, as a
    former finance professor, that chart would get an F.
        Mr. Stutzman. I agree. It is interesting that you know this
    big drop-off right here after President Clinton--I live in one
    of the heaviest manufacturing districts in the country, and I
    know that businesses do not turn on a dime that quickly but
    that was because of different trade policies. Something
    happened during the President Clinton era that caused a lot of
    jobs to leave. That is what President Trump and you are trying
    to fix. Is that correct?
        Secretary Bessent. I think that thing was called NAFTA,
    sir.
        Mr. Stutzman. Exactly. Thank you for doing that because we
    saw jobs growing up in northeast Indiana and the auto industry,
    agriculture, and manufacturing just continue to have the slow
    decline. Manufacturing is critical to a nation, and
    manufacturing has built America. We have seen jobs leave
    because of bad policies over years.
        Because of President Trump and because of you, sir, we are
    now seeing headlines that say: Rolls-Royce Planning to Shift
    Production to the United States to Avoid Trump's Tariffs. We
    see headlines saying: Johnson and Johnson To Invest Over 55
    Billion in United States in the Next 4 Years.
        Even in my district, GM has announced that they are
    increasing truck production. I know coming from a manufacturing
    family that we are seeing opportunities. Is it going to happen
    overnight? Absolutely not, but it is at least giving us the
    opportunity to look forward and say there is an opportunity
    because you all are setting, resetting the table to look out
    for America first.
        I want to say thank you, and if you do not--and I have
    heard you say this before that President Trump has tasked you
    with reducing debt and deficits as well as keeping the economy
    strong, that is a huge task, but it is one that has to happen.
    I appreciate what you have been doing. Because the debt prices
    would just flat out limit us to any sort of recovery. It would
    be very difficult.
        I want to ask you really quick about the Federal Reserve's
    dual mandate. Generally speaking, should the Federal Reserve
    focus more on fighting inflation or providing maximum
    employment and what should the Fed focus on if the economy
    enters stagflation?
        Secretary Bessent. Sir, I would just comment on monetary
    policy in general rather than the Federal Reserve. I think the
    two are inexorably linked. As we saw during the terrible
    inflation during the Biden years, that employment picked up,
    but that was a slingshot effect. As we went--came into post-
    COVID recovery that financed the debt-fueled government
    spending, and we are trying to end that.
        So the Federal Reserve should focus on both, and it is at
    different times. Look, keeping inflation down, President Trump
    won because of, I believe, working real wages for working
    Americans flopped.
        Mr. Stutzman. Now, that is absolutely right, and we saw the
    cost of living go up. The last 4 years have been the hardest on
    Americans due to the former administration's policies and I
    know that there is a huge recovery, and people are still trying
    to recover and are hopeful and optimistic.
        My time is about to expire, I just wish you the best, and I
    want to say thank you. Working together here on this committee,
    there are plenty of places to work together and try to get us
    back on track rather than pointing fingers. So.
        Chairman Hill. The gentleman's time has expired. We now
    recognize the gentlewoman from Massachusetts, Ms. Pressley, for
    5 minutes.
        Ms. Pressley. Thank you. Secretary Bessent, you have heard
    from Democrats publicly and I am certain you have heard from
    Republicans privately that this administration's reckless and
    chaotic tariff policy is wreaking havoc on our economy. Rather
    than delivering that stability for our country, this Trump
    tariff tantrum has been inconsistent, counter-productive, and
    disconnected from reality.
        In my district in the Massachusetts Seventh, I am hearing
    it from everyone. Small businessowners are reeling from the
    unpredictable on again, off again tariffs. They are holding
    back on expansion, delaying hiring, and bracing for the impact.
    Local and State officials are telling me about the effect
    tariffs will have on our State budget. Simultaneously,
    Massachusetts will see energy bills increase while revenue from
    tourism will decrease.
        I want to focus on the constituent outreach that I received
    from everyday families who are just fighting to make ends meet.
    Yes or no. Mr. Secretary, do you know what a car seat is?
        Secretary Bessent. I have two children, yes.
        Ms. Pressley. I figured as much. It is correct you and your
    husband have two children. So I am sure you know that car seats
    are absolutely essential for families when traveling with
    babies and toddlers to school, to worship, to doctor's
    appointments, just everyday living. Not only are car seats
    essential but they are also the law of the land. It is the law
    of the land in 50 States. There is no getting around that.
        Mr. Secretary, what is your estimate of how many babies are
    born in the United States each year?
        Secretary Bessent. I would guess two to three million.
        Ms. Pressley. While the number fluctuates, there have
    consistently been more 3.5 million babies born in the United
    States. That means millions of families in this country are
    doing what? Buying a car seat. Because it is essential, and it
    is the law of the land in all 50 States. Now that cost is going
    up because Trump has announced up to 145 percent tariffs on
    Chinese imported products. Approximately, nine out of every ten
    car seats in the United States come from China. That is a steep
    cost. Steep costs, high for families all over the country. The
    price is up in Republican districts and in Democratic
    districts.
        It is not just the car seats that are impacted. We are
    talking about strollers, cribs, highchairs. No family is exempt
    from the harm of these Trump tariffs on essential baby products
    but do not just take my word for it.
        Mr. Chair, I would like to enter into the record a Yahoo
    finance article from May 2025, entitled: First-year baby
    expenses already topped $20,000, and tariffs are adding to the
    bill as China dominates key imports.
        Chairman Hill. Without objection.

        [The information referred to was not submitted prior to
    printing.]

        Ms. Pressley. Look, I support improving manufacturing in
    America, but that is not going into effect overnight like these
    tariffs are. There needs to be an exemption to help America's
    families. Trump has used his power for tariff exemptions on
    thermal plastics, semiconductors, but what about baby products?
        Mr. Secretary, do you support an exemption to tariffs on
    items that parents need to care for their kids? Yes or no?
        Secretary Bessent. Congresswoman, what you are referring to
    are----
        Ms. Pressley. Yes or no?
        Secretary Bessent. What you are referring to are----
        Ms. Pressley. I am reclaiming my time because I do not want
    you to filibuster and give me some macroeconomic answer.
    Families at home are hurting, and they just--just give me a
    direct answer.
        Secretary Bessent. I am going to agree with you that----
        Ms. Pressley. So, yes, you do support an exemption on
    tariffs for products that are essential for families for their
    babies?
        Secretary Bessent. Exemptions on E-4 items of which----
        Ms. Pressley. I am sorry, I have to reclaim my time. I am
    reclaiming my time. I am--Mr. Chair, I am reclaiming my time.
    Give me my time back. I am reclaiming my time.
        I just want a simple yes or no. Do you support an exemption
    to tariffs on items that parents need to care for their kids?
    Because you all claim you are pro family. I cannot hear the
    words you say because I see the things that you do every day.
    So clear it up.
        Yes or no, do you support an exemption to tariffs on items
    that parents need to care for their babies?
        Secretary Bessent. It is under consideration.
        Ms. Pressley. Great. Good. I do not know what is stopping
    an exemption from going into effect today? So do it now. In
    Donald Trump's America, yesterday's price is not today's price.
    Costs are going up. Everyone is suffering, especially our
    families with young children.
        Mr. Secretary, I am making an appeal to you. On behalf of
    the people of this country, please tell occupant Trump to
    reverse course and stop hurting America's families. I yield
    back.
        Chairman Hill. The gentlewoman yields back.
        The gentleman from Pennsylvania, our Chair of our Oversight
    and Investigation Subcommittee, Mr. Meuser, is recognized for 5
    minutes.
        Mr. Meuser. Mr. Secretary, great to be with you. Thank you.
    Boy, oh, boy, I sure wish we had colleagues that were upset
    about the Biden 20-percent inflation and lack of wage growth
    along with that inflation and the high energy costs that were
    costing families throughout my district thousands of dollars. I
    wish we would have heard a peep about that. Yet, we have just
    angry, angry voices over the potentiality of bringing
    manufacturing back to the United States that, in fact, has not
    even gone into effect yet. It is nuts.
        Mr. Secretary, the ongoing litigation response to the
    Democrats' questions about the Treasury DOGE team, it is true
    that they can find all of the information--find all the
    available information there?
        Secretary Bessent. Yes, sir.
        Mr. Meuser. Okay. Thank you. Also, regarding the Beneficial
    Ownership Rule, which was a disaster for my small businesses--I
    mean all of them, 100 percent, complained about it--the
    original intent of the Corporate Transparency Act was to root
    out bad actors.
        The previous administration, however, turned it into a
    massive data collection with over 50 questions--originally
    there were four--that outraged small business, accountants,
    attorneys, anybody who had anything to do with it. In fact,
    only 20 percent of the small businesses were even able to
    comply by the January 1 deadline. Meanwhile they were
    threatened with fines up to $500 per day and up to $10,000,
    small businesses. They were beside themselves.
        You listened to the small businesses and did something
    immediately to correct course, exempting U.S. companies from
    reporting. My small businesses throughout my district,
    throughout Pennsylvania applaud you for eliminating a needless
    bureaucratic reporting regime. So thank you.
        Secretary Bessent. Congressman, I am just sorry that so
    many of them had to waste their hard-earned dollars either
    complying or preparing to comply.
        Mr. Meuser. And losing sleep and everything else. Some even
    going out of business because they found it preposterous. Thank
    you.
        Let us talk about removing the ideological, subjective,
    even capricious regulators that--how would you--under the Biden
    Administration, bank supervisors focused more on ideological
    concerns and less on material bright line financial rules
    versus the risks. How do you work with bank regulators to
    refocus supervision on bright line rules rather than an issue
    unrelated to safety and soundness?
        Secretary Bessent. Again, Congressman, very important
    point. We could see that we had three--under the previous
    administration, we had three of the largest bank failures in
    U.S. history. Two weeks before that, the Financial Stability
    Oversight Council published a report that said that climate was
    the biggest threat to the financial system, not the deposit
    volatility, not overleveraged bond portfolios. So we are
    promoting common sense back to basics.
        Mr. Meuser. Yes, thank you. Okay. The efforts related to
    the removal of reputational risk as a basis of supervisory
    criticism. Can you comment on that?
        Secretary Bessent. Yes, sir. Many people, many individuals,
    many organizations were debanked because of their political
    beliefs, and regulators used that as a litmus test. That it is
    a very capricious category in bank regulation. So we had moved
    to remove that as a criteria. We believed that financial ratios
    are much more important than whether you are a Democrat, a
    Republican, or an Independent.
        Mr. Meuser. Thank you. Yes. Well put. I appreciate the fact
    that you see things that way as should be seen.
        Capital requirements. Basel III Endgame, of course, and the
    G ship surcharge and other proposed capital rules might put
    U.S. banks at an international disadvantage. What do you
    believe--if you got an idea of the right level for capital
    requirements?
        Secretary Bessent. Sir, we are examining that now, and we
    will weigh in heavily at the BIS and the other rulemaking
    entities. Again, this one-size-fits-all. I believe one of the
    reasons we have seen the stagnation in many other countries is
    the regulatory, the framework, the very tight regulatory
    framework that they have put around their regulated financial
    institutions.
        Mr. Meuser. Thank you. I am almost out of time. I will
    yield back. Thank you very much, Mr. Secretary.
        Secretary Bessent. Thank you.
        Chairman Hill. I thank the gentleman.
        The gentleman from New York, Mr. Torres, is recognized for
    5 minutes.
        Mr. Torres. Thank you, Mr. Chair. During so-called
    Liberation Day, Donald Trump imposed tariffs on territories,
    populated not by humans, but by penguins. He imposed tariffs on
    countries with which the United States runs a trade surplus,
    not a trade deficit. He imposed tariffs on products that cannot
    be produced domestically which means a higher cost for American
    consumers without any benefit to American manufacturers. He
    imposed tariffs on impoverished nations like Lesotho, which
    cannot afford to buy as much from us as we buy from them.
        If President Joe Biden had put in place these absurd
    tariffs, every single Republican, without exception, would have
    condemned his trade policy at the height of incompetence.
        You, Mr. Bessent, would have joined that course of
    criticism. There is no doubt in my mind. Swap out Biden's name
    for Trump's and suddenly the moral outrage from Republicans
    vanishes like magic.
        I have a simple yes or no question. Do you think excessive
    taxation undermines the competitiveness of are American
    manufacturing.
        Secretary Bessent. Yes, sir.
        Mr. Torres. Now the Trump tariff regime is a breeding
    ground for the excessive taxation of American manufacturing.
    Consider as an example Intel's manufacturing of Central
    Processing Units (CPUs). Intel sources, foreign components,
    which are subject to the first layer of taxation. It then
    manufactures the CPUs in the United States before exporting it
    to China, which will face a second layer of taxation. Finally,
    China will export the CPU back to the United States where it
    will face a third layer of taxation. Taxation upon taxation
    upon taxation of American manufacturing goods.
        Do you think that kind of compounding taxation of American
    manufacturing goods like Intel CPU will strengthen or weaken
    American manufacturing?
        Secretary Bessent. Sir, I just want to be clear, you are
    saying that taxes raises costs?
        Mr. Torres. I am sorry?
        Secretary Bessent. Sir, you are saying that taxes raise
    costs?
        Mr. Torres. Taxing the intermediate goods that go into
    manufactured products raise costs, yes.
        Secretary Bessent. You are saying that taxes are
    inflationary?
        Mr. Torres. Taxes are inflation--yes.
        Secretary Bessent. Good, then we should cut taxes----
        Mr. Torres. In the context of tariffs, yes.
        Secretary Bessent. Then we should cut taxes, and you should
    join the----
        Mr. Torres. Can you answer my questions about the tariffs?
        Secretary Bessent. I am not sure I understand----
        Mr. Torres. Intel CPU would face three levels of taxation,
    the taxes on the foreign components, the tax--the United States
    taxes, and the Chinese taxes, or the Chinese tariffs.
        Do you think that kind of compounded taxation hinders or
    helps American manufacturing?
        Secretary Bessent. I think the strategic American
    manufacturer is very important like Intel, and I think we have
    to bring that back to the United States.
        Mr. Torres. Do you think taxing intermediate goods that go
    inside American manufactured products helps or hinders
    manufacturing?
        Secretary Bessent. I believe that as the Intel example you
    gave we have to bring these strategic industries back to the
    United States.
        Mr. Torres. We are not going to bring every component--a
    Boeing aircraft, 747, had six million components. There is no
    universe in which we are going to manufacture all six million
    components in the United States. If you impose a tax on those
    foreign components, you are hindering the manufacturing of
    Boeing 747 here in the United States. Do you even acknowledge
    that?
        Secretary Bessent. I acknowledge that the supply chains are
    wide, but we have also for the automakers, we have given an
    exemption--
        Mr. Torres. I am not asking about the automakers. I am
    asking about Boeing aircraft. Let me move on.
        Critical minerals are central to military defense of the
    United States. China controls almost all of the world's rare
    earth mining and almost all of the world's critical mineral
    processing and refining.
        The Trump Administration has chosen to wage a total trade
    war with China without first building a critical mineral supply
    chain here at home. Just like it would be foolish to enter a
    car race without enough fuel in the tank or enter our
    weightlifting competition without sufficient strength to lift
    the weights. It seems equally foolish to wage an all-out trade
    war on China without a domestic critical mineral supply chain,
    breaking China's strongest choke hold over the United States,
    the Chinese Communist Party's (CCP's) choke hold on critical
    minerals and rare earth elements is a precondition for winning
    the trade war against China. Do you agree with that?
        Secretary Bessent. I believe that we have to bring the rare
    earth--as you correctly said, processing back--or not even back
    to the United States, we have to have----
        Mr. Torres. Not even processing. It is rare earth mining as
    well and it is critical mineral processing and refining.
        Secretary Bessent. Strategic minerals----
        Mr. Torres. The weaponization of critical minerals against
    the United States is the opposite of making America safe again.
        Secretary Bessent. Rare earths are not that rare.
    Processing is rare.
        Mr. Torres. The binding is rare too. We have an
    insufficient mining industry here in the United States, and you
    know that.
        Secretary Bessent. Good. Then I hope you will join us in
    the deregulation of many of these onerous mining requirements.
        Mr. Torres. I think my time has expired.
        Chairman Hill. I appreciate the gentleman from New York.
        The gentlewoman from California, Mrs. Kim, is recognized
    for 5 minutes.
        Mrs. Kim. Thank you, Chairman Hill, and Ranking Member
    Waters for holding this hearing.
        Secretary Bessent, good to see you, and thank you so much
    for coming. Southern California, where I am from, and in the
    district that I represent serves as the primary gateway to
    Pacific Rim and Asian goods into the United States come through
    the ports of L.A. and Long Beach. We are already starting to
    see a drop in volume as the ports of L.A. and Long Beach are
    expected to see a 35 percent to 30 percent drop when compared
    to a year ago.
        Cargo volume is one of the largest drivers in the region,
    and long-term drop will not just impact families at the grocery
    stores and small businesses bottom line but also result in
    truckers and dock workers losing their jobs.
        Secretary Bessent, I would like to ask how can you ensure
    that our tariff policy will not unintentionally harm American
    small businesses and workers in the long term?
        Secretary Bessent. Congresswoman, we believe over the long
    term that it will drive growth in the economy. As I have said
    many times, it is a mistake to look at trade in isolation, the
    Trump economic policy as a three-legged stool: trade, taxes,
    and deregulation. We believe that the sum of the parts--that
    the whole is greater than the parts. As we complete each one of
    those that the United States will see substantial economic
    growth.
        Mrs. Kim. Thank you. I know that a lot of my constituents
    share these concerns that we raised. I would like to continue
    this discussion on this specific topic with you moving forward
    because I am concerned that these long-scale tariffs, if they
    continue in the long term, then American working families and
    small businesses will suffer under price hikes and a lack of
    certainty.
        I want to shift gears and discuss the Financial Stability
    Oversight Council, FSOC. Under the previous administration,
    Secretary Yellen rescinded the nonbank systematically important
    financial institution and replaced with a new framework with
    assessing the financial risk. This new framework overlooks the
    importance of prioritizing an activity-based standard and a
    cost-benefit analysis.
        Secretary Bessent, does FSOC intend to reassess the 2023
    guidance so that it is more closely aligned with the thoughtful
    process that was created in 2019?
        Secretary Bessent. Congresswoman, that is on our agenda.
        Mrs. Kim. Thank you. As you finalize that decision, I want
    to emphasize that my support for a return to an activity-based
    standard that more appropriately addresses the risk of
    nonbanks. Thank you.
        Secretary Bessent. Treasury would be happy to work with
    your team on that.
        Mrs. Kim. Thank you. Finally, I would like to urge you to
    continue your support for CDFI. CDFI fund programs are
    statutory, as you know. It has been critical in promoting the
    local economy in Orange County.
        Do you still agree that the CDFI fund has a critical role
    to play in fostering economic opportunity? I think I know the
    answer because you stated very clearly in public statements.
        Secretary Bessent. We believe that the--if CDFIs follow
    their statutory obligations and do not digress in the more
    ideological boundaries, that they can be important
    institutions.
        Mrs. Kim. Thank you. As you know, last week I attended the
    financial literacy roundtable that your team put together.
    Thank you so much for inviting me.
        Secretary Bessent. I think I just missed you.
        Mrs. Kim. Your team was very well represented. Again, I
    want to thank you so much because as a Co-Chair of the
    Financial Literacy and Wealth Creation Caucus, events like that
    bringing the stakeholders together and having a meaningful
    dialog in conversation I think is critically important, and we
    need to continue that.
        Can you talk about how you can continue to advance
    financial literacy initiatives? Now that we are past the
    financial literacy month, I mean, I was able to take the
    leadership and pass the bill that proclaims the month of April
    as the financial literacy month. I hope that we can continue to
    work in this space together.
        Secretary Bessent. As you should know that it is a strong
    core belief of mine that financial literacy is the only path to
    economic independence and well-being. The more Americans who
    can be educated--and I think we should probably go State to
    State and encourage each State to put in financial literacy
    standards for their students.
        Chairman Hill. The gentlewoman's time has expired.
        Mrs. Kim. Thank you very much.
        Chairman Hill. The gentlewoman from Texas, Ms. Garcia, is
    recognized for 5 minutes.
        Ms. Garcia. Thank you, Mr. Chairman, and thank you to
    Secretary for being with us today.
        I want to start first by just clarifying your testimony in
    its delivery. Why did you ask for your witness statement to be
    embargoed until this morning?
        Secretary Bessent. Pardon me? Pardon me?
        Ms. Garcia. Your testimony reads right at the top:
    Embargoed until delivery. Which means that we did not follow
    the usual practice of this committee of getting the testimony
    24 hours in advance so that committee members can review it and
    prepare for questions. Yours was posted at 10:01. The committee
    was at 10. It looks like you did not----
        Secretary Bessent. My staff is just telling me that it is
    standard practice.
        Ms. Garcia. It is your standard practice? It is not our
    standard practice as a committee.
        Secretary Bessent. I am told that it was standard practice.
        Ms. Garcia. Okay. You were told by whom, sir?
        Secretary Bessent. So, my comps team and legislative
    affairs team working with the committee.
        Ms. Garcia. Mr. Chairman, I think for the record I think
    you should clarify that to the gentleman that is not our
    standard. I know that--at least I did not know anything about
    this until I got it here. I do not think our committee staff on
    the Democratic side was notified that we would be getting all
    your testimony late. I just wondered why you had made that
    request. Clearly at the top: Embargoed until delivery.
        Secretary Bessent. Embargoed till delivery I think that was
    mostly meant for the press.
        Ms. Garcia. We are not press, sir. We are the Members of
    Congress that have oversight.
        Mr. Chairman, I would hope that you not condone this kind
    of late submission. It just does not help, frankly, for some of
    the atmosphere that is created. When we all just sit down and
    we still do not have your testimony, well, then, we just sort
    of do not feel really good about that. It is not our custom and
    practice.
        Secretary Bessent. Congresswoman, I appreciate the
    importance that you put on my statement.
        Ms. Garcia. Thank you. Notice is important, sir. You know
    what the poverty rate is in our country?
        Secretary Bessent. I believe that the poverty level is a
    fixed number.
        Ms. Garcia. No, do you know the poverty rate in this
    country?
        Secretary Bessent. I believe it is in the teens.
        Ms. Garcia. In the teens. Okay. It is about a little over
    11 percent. It just strikes me that most of all of your
    testimony is always about the tax cuts and cutting costs. It is
    always about tax cuts, and it is always about the rich. Nothing
    is ever said about poor other than you suggesting that you
    worked yourself through college.
        Secretary Bessent. No ma'am. No tax on tips. No tax on
    Social Security. No tax on overtime.
        Ms. Garcia. Sir, I read your testimony. That is not
    anywhere in here. That is not in here sir.
        Secretary Bessent. Deductibility of auto loans----
        Ms. Garcia. I am referring to your testimony, and what I
    have listened to. I said right upfront, I can see you, and I
    can hear you. You have not said one thing about what we are
    doing to help the poor. In fact----
        Secretary Bessent. None of your colleagues asked me.
        Ms. Garcia. Even when we were talking about the car seats,
    that impacts poor people more than anyone else. Because not
    only can they usually not even afford a car seat and have to go
    to a garage sale to find one, now it is going to be even
    higher. Your President is suggesting that he wants to give a
    $5,000 bonus to women to have babies, and then what? Just leave
    them out in the cold alone, no car seat, no food? No Medicaid?
    No CHIP program?
        Secretary Bessent. Congresswoman, I can tell you the worst
    thing----
        Ms. Garcia. I am asking you right now, sir----
        Secretary Bessent. The worst thing for working families
    will be the expiration of the 2010 Tax Cuts and Jobs Act----
        Ms. Garcia. As Secretary of Treasury, it is not just about
    the inflation rate. It is not just about the GDP. It is also
    about making sure that we keep the poverty rate in this country
    low. There are people who are living in poverty that never have
    lived in poverty before. You also had failed to say here, you
    say unemployment remains low. I mean, the subject should have
    read: Unemployment went up.
        Secretary Bessent. Ma'am----
        Ms. Garcia. Because it did.
        Secretary Bessent. Under the Biden Administration----
        Ms. Garcia. We are not talking about Biden, sir. We are
    talking about your testimony here today about the current
    President and his plans. Because I can tell you, I am from
    Houston. I am concerned, too, about some of the tariffs on
    energy. We have done a lot to increase trade in Houston,
    construction, everything after the pandemic, and all things
    were growing. Everything has been growing but now that the
    Trump tariffs have surfaced, it is threatening Houston's
    economy. I represent the area where almost all the entire ship
    channel is in. The petro chemical companies are in my district.
    The port is in my district. Everybody is trying to figure out
    just what all we are going to do.
        Chairman Hill. The gentlewoman's time has expired.
        Ms. Waters. Mr. Chairman.
        Chairman Hill. Ranking member.
        Ms. Waters. I ask unanimous consent to enter into the
    record the opinion and order by the United States District
    Court in the Southern District of New York in the Matter of New
    York versus Donald Trump that directly contradicts several
    responses the Secretary gave to me about DOGE's access to
    Treasury payment systems.
        Chairman Hill. Without objection.

        [The information referred to can be found in the appendix.]

        Chairman Hill. I want to thank our witness today. We
    appreciate Secretary Bessent's testimony.
        Without objection, all members will have 5 legislative days
    to submit additional written questions for the witness to the
    Chair. The questions will be forwarded to our witness for his
    response.
        Secretary Bessent, please respond no later than June 2,
    2025. This hearing is adjourned.

        [Whereupon, at 1:03 p.m., the committee was adjourned.]

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