Bessent SPARS with lawmakers in fiery Capitol Hill hearing

[0:00] driven by the landmark bill enacted by Republicans last year. The Working Families Tax Cuts Act [0:06] not only provided historic tax relief for working-class Americans, but also made permanent [0:13] critical pro-growth tax policies that are already increasing domestic investment and boosting [0:19] economic growth. The magnitude of this success today was made possible by the work of the [0:25] Treasury Department and the IRS in publishing immediate guidance on the new and restored [0:31] tax policies in the lead-up to the 2026 filing season. I appreciate all the hard work from [0:38] Treasury and the IRS and their employees to release that initial guidance as quickly as [0:44] they did. Doing so provided rules of the road for tens of millions of people claiming at least [0:50] one Republican's signature nuke tax cuts from no tax on tips and overtime to increase tax [0:57] relief for our seniors. Contrary to the Democrat narrative that the law only benefits the wealthy, [1:04] these policies were claimed by over 60 million American working-class citizens, nearly half of [1:12] all filers. At the end of the tax filing season, over 7.5 million workers claimed the tips deduction. [1:20] More than 29 million workers benefited from the no tax on overtime, and more than 35 million seniors' [1:28] tax burdens were reduced, with an average additional deduction for them of over $7,500. [1:35] Additionally, over 5.5 million children have already been signed up for the Trump accounts, in large part due [1:44] to Treasury's work to implement and promote the program. These savings accounts offer an important [1:52] opportunity for young Idahoans and children across the country to begin building financial security. [1:58] Hardworking Americans kept more of their money this tax filing season, and millions of people got more [2:04] money back compared to previous years. Over $320 billion was refunded to taxpayers, an 18% increase from the last [2:15] filing season. I note that again, an 18% increase from the last filing season, with an average refund [2:25] of nearly $3,300, more than an 11% increase on average. And even the average refund amount does not tell the whole story. [2:35] Many working-class Americans, who owed money when filing in prior years, instead received a refund this year, because of the working families' tax cuts. [2:49] Treasury's initial guidance has also helped the business provisions of the working families' tax cuts, [2:54] like full expensing for equipment and factories, to drive domestic investment higher, productivity higher, [3:02] and wages higher for American workers. Nearly 26 million small businesses now have an increased [3:10] confidence thanks to a permanent pro-growth 20% tax deduction. Estimates find that permanence will [3:19] create 1.2 million jobs annually and boost small business GDP by $7,750 billion over the next decade. [3:31] The permanent restoration of full expensing for U.S. research and development will support domestic [3:38] innovation and growth by large and small businesses alike. To maximize that growth, taxpayers need additional [3:46] clarity from Treasury and the IRS so that they can plan and invest with certainty. Issuing final guidance for [3:56] these tax provisions will provide that certainty and further encourage domestic investment. Implementing the [4:04] new provisions from the working families' tax cuts was no small task, but the 2026 filing season [4:11] proceeded smoothly for tens of millions of Americans. I look forward to hearing from you about plans for [4:17] successful filing seasons next year, as well as the more work that needs to be done to implement the law and [4:24] technological investments made to modernize the IRS. Regarding IRS modernization, Ranking Member Wyden and [4:37] I released the Taxpayer Assistance and Service Act earlier this year. This bipartisan bill with more than 60 provisions and [4:46] supported across the tax community is focused on modernizing the IRS, improving the taxpayer experience, [4:54] and strengthening taxpayer rights. Many finance committee member priorities are included in the bill, [5:01] along with a series of long requested provisions from the tax practitioners, as well as the national [5:07] taxpayer advocate. I look forward to advancing this legislation in the very near future and welcome any [5:14] comments from you on it. Beyond tax administration, I'm hopeful for similar support as we move forward with other [5:23] priorities with a bipartisan foundation in this committee, such as establishing clear and durable [5:29] tax rules for digital assets. Mr. Secretary, we're very glad to have you with us today and look forward to [5:36] your remarks. And with that, I turn to the ranking member for his opening statement. Thank you very much, [5:42] Mr. Chairman. There is lots to work on. Now, colleagues, it was just a matter of time before the Trump [5:49] administration set the new high water mark for public corruption. That moment arrived a little [5:56] more than two weeks ago with the settlement of Trump's ridiculous IRS lawsuit. This hearing is the first [6:03] opportunity for Congress to examine it. So let's start by zooming out to get a full appreciation of how dirty [6:11] this whole situation has been. Donald Trump sued his own administration for $10 billion over a tax return [6:19] leak that happened on his watch. A judge appeared ready to toss the lawsuit, so Trump rushed a settlement [6:28] for personal gain. The acting attorney general went out yesterday and said they're not moving forward [6:34] with the $1.8 billion insurrection slush fund. The other part of this settlement apparently remains in [6:41] place, and that is the part that presents the biggest direct benefit to Trump. Todd Blanche let Trump [6:49] off the hook for potentially $100 million in back taxes by cancelling what's reported to be a long [6:56] running dispute with the IRS. Then he let the entire Trump family and the Trump organization off the hook [7:03] for any tax crimes they may have committed in the past. As of right now, everybody in America is subject [7:13] to audit except the Trump family. Unfortunately, the Senate Republican leader was quoted this morning [7:22] saying that this is business as usual, that it's a standard settlement. The reality is that's totally wrong. [7:33] Two former IRS commissioners have now confirmed that this is completely without precedent. It's the [7:41] ultimate case of an ultra wealthy individual living under one set of rules while everybody else lives under [7:47] another. A crooked double standard that benefits Trump and family. I take it as an admission of his own [7:57] guilt when it comes to tax cheating. Trump and his family have been stuffing every dollar they can grab into [8:03] their own pockets. If everything was on the level, it seems to me he wouldn't need Todd Blanche to get the IRS off his [8:09] back. Secretary Besson owes the committee an explanation of what the Treasury knows about the dirty [8:18] settlement. That's because his department was involved from beginning to end. Treasury was a [8:25] defendant and a negotiator in the lawsuit. It was informed by IRS attorneys that Trump had no real [8:31] case. And it sure looks to me like Treasury's top lawyer quit his job in objection to the settlement. [8:40] This is an abuse of the IRS that goes way beyond anything that I have any familiarity with. My view is [8:48] this committee needs to investigate this on a bipartisan basis. Blanche allegedly dropped the [8:55] insurrection fund doesn't change that. So what's particularly shocking about a corrupt deal like [9:03] this is it comes when so many American families are feel fearful about the economy. I was home last week [9:12] having four town hall meetings in parts of my state that are bright red. And what they talked to me about [9:19] was the pain of inflation going up, wage growth going down, the job market flattening. The Trump [9:25] administration doesn't seem to care. Last week, Secretary Besson was asked during an interview about price [9:32] increases caused by the Iran war. He said, I quote, it was less than $200 in extra gasoline costs. [9:40] All the Democrats want to talk about is beef and gasoline. Now, to me, you might think that a political [9:48] leader couldn't get any more dismissive of people's economic concerns. But then Donald Trump topped it [9:57] himself when asked if Americans financial situations made him think about ending the war that he started. [10:04] He said, and I quote, not even a little bit. He continued. I don't think about Americans financial situation. [10:12] I don't think about anybody, Mr. Chairman and colleagues. I've never heard a president of the [10:20] United States talk in such a dismissive way about the hurt of the American people. And then he rambled [10:27] through his ever changing goals in the quagmire of a war. No sympathy for struggling families [10:33] at all from the president. Americans are increasingly spending down their savings and going into debt [10:39] to get by. The people running the country are ratcheting up the cost of living with wars, [10:44] tariffs and cuts to health care and basic services. It's cold comfort to somebody who had to max out [10:51] their tax credit card to feed their kids that Trump might get his face on a $250 bill. But that's the [11:00] kind of priority that apparently the Treasury Department is focusing on these days. Even outside of [11:06] economic matters, the Treasury Secretary is simply out of step with the American people. There's no better [11:13] example than the fact that there's been a cover up of the massive file of Epstein's financial records [11:18] for a year and a half. This is part of the effort I've made. It's the only one to follow the money [11:26] in the Epstein situation. And yet there's been a denial of access to committee investigators [11:31] and lying in public about their significance. That subject alone deserves its own hearing. Senate [11:38] investigators are trying to figure out who paid Epstein for girls. And unfortunately, Secretary [11:45] Besant is involved in preventing that from happening. The bottom line in this administration [11:52] is the machinery of government works to the benefit of Donald Trump before all else. That's the [12:00] corrupt framework that produces insurrection slush funds, protects pedophiles and dismisses the concerns [12:07] of people who are worried about being able to make rent and to feed their families. There is an awful [12:14] lot for the committee to discuss today, Mr. Chairman. And I look forward to the question and answers. [12:19] Senator Crapo. Thank you, Senator Wyden. Secretary Besant, you may make your opening statement. [12:25] Chairman Crapo, Ranking Member Wyden and members of the committee, thank you for convening today's [12:35] hearing. I'm grateful for this opportunity to discuss President Trump's 2027 budget, which builds on [12:41] this administration's progress in unleashing a new era of economic expansion. Could you pull the microphone a [12:47] little bit closer? Sure. I last appeared before this committee just a few weeks before the Senate [12:52] passed the working families tax cuts. So on the heels of the most successful filing season in IRS [12:58] history, I'd be remiss if I did not begin by thanking the committee for helping to deliver this once in a [13:05] generation bill to the president's desk. This day, under President Trump, we celebrated how much more [13:11] money hardworking Americans kept, not how much the government took. Over 62 million tax returns claimed [13:19] at least one of the president's signature new tax cuts. No tax and tips, no tax and overtime, [13:25] deductibility of American car loan interest and enhanced deduction for low and middle income seniors. [13:31] All told, the average refund increased by over 11 percent with refunds increasing by 18 percent. But as [13:38] important as what this legislation achieved is what it prevented. If opponents of the working family tax [13:44] cuts had their way, our economy would have absorbed the largest tax hike in its history, over five trillion [13:52] dollars. Ninety percent of American taxpayers would have seen their standard deduction slashed, while 40 million [14:00] families would have seen their child tax credit halved. Instead, this committee held the line and the American [14:06] people had a better tax day because of it. Notably, President Trump's pro-growth policies don't stop at [14:14] putting more money back in the pockets of working middle class families. They extend to placing the [14:20] American dream within the closer reach of their children. For context, nearly 40 percent of Americans have no [14:26] exposure to our great U.S. equity market. No stake in the companies they helped to build. Trump accounts [14:34] represent a profound imagining reimagining of that arrangement. They want sure that every American [14:40] child can benefit from private ownership and compound growth, that every American child, in short, is born [14:47] a shareholder. To date, nearly six million Trump accounts have been open, with 1.4 million eligible for [14:53] the thousand dollar seed contribution. Of course, as his tax cuts deliver relief for working class Americans, [15:00] President Trump's economic agenda is bolstered by two other distinct but reinforcing levers, trade and [15:07] deregulation. Let me briefly address both in turn. First, the President has undeterred his determination to [15:14] open markets for U.S. goods and services while rebuilding U.S. manufacturing capacity. Over the 12 months ending [15:21] March 26, the trade deficit for goods declined by approximately $370 billion, compared to the same time frame ending [15:30] March 2025. The economy has added 313,000 net private sector jobs and 13,000 manufacturing jobs in the [15:41] past two months. Firm capital expenditures rose at an annual rate of over 17 percent in the first quarter, [15:47] and companies are investing trillions to build and expand here at home. American industry is winning [15:53] again to the benefit of American workers. A whole-of-government approach, meanwhile, is coupling our [15:59] manufacturing revival with a great regulatory reset. Properly calibrated regulation is essential for [16:05] economic growth, capital formation, employment, and higher wages. So, at the outset of this administration, [16:11] President Trump set the ambitious benchmark of slashing 10 existing regulations before issuing a [16:18] single new one. In 2025, we shattered the goal with a ratio of 129 to 1. As a result, the regulatory actions [16:27] generated more savings last year than those of the prior Trump administration combined. Separately, [16:33] any one of our initiatives on trade, tax cuts, and deregulation would be substantial. Taken together, [16:39] they are transformative. Before President Trump took office, our trading partners exploited [16:45] America's markets, our regulatory states smothered businesses, and our tax code was poised to punish [16:51] workers and job traders. Today, his policies are driving lower taxes, bigger paychecks, and broader [16:57] prosperity. So, I thank you on this committee for its partnership in this critical work, and I look [17:03] forward to building upon our stride through the President's budget for the year ahead. Thank you. [17:08] And I do want, I had hoped to keep this in terms of the economy. Senator Wyden has mendaciously [17:18] slandered the treasury building in an attempt to cover up his son having an investment meeting [17:25] with Jeffrey Epstein to ask for funding. Thank you. Chairman? Yes. Let's be clear here. Nobody is [17:40] interested in the ramblings of a capo in the most corrupt regime in American history. We want to get [17:46] some facts about this deal. That's what we're here for. Thank you. Well, thank you, and I will ask my [17:52] questions first today. And we would like to hear what Adam Wyden and Jeffrey Epstein talked about. [17:59] Your son's largest investment position was Rick's cabaret. So did your son and Jeffrey Epstein talk [18:05] about pole dancing as he begged him for money using your limited credibility? I'm going to proceed with [18:17] my questions. And Mr. Secretary, I'm going to start with regard to the issues that Senator Wyden raised. [18:26] There have been a lot of accusations about the settlement agreement between the president and [18:30] the IRS over the leak of his tax returns. On Monday, the Department of Justice announced that [18:36] it would abide by the district court's ruling in joining the creation or operation of the anti-weaponization [18:43] fund that was established under the settlement agreement. Yesterday, Acting Attorney General Todd [18:50] Blanche announced at a hearing that we are not moving forward with the fund, period. With respect to other [18:57] parts of the settlement agreement, I'd like to give you the opportunity to set the record straight. [19:03] Understanding that there is ongoing litigation, what can you share with us about Treasury and the [19:09] IRS's role in the settlement agreement? Specifically, since IRS CEO Frank Bizzignano signed the settlement [19:18] agreement, what can you share with us about Mr. Bizzignano's role in reaching that agreement? [19:23] Thank you for the question, Mr. Chairman. As we have done throughout this matter, [19:29] the Department of Treasury is following the direction of the Department of Justice. And as you noted, [19:35] Acting Attorney General Todd Blanche testified yesterday that the government will not be moving [19:40] forward with the fund. We intend to comply with that direction. I do not have any additional details [19:47] in to what that means at this time, but I will note that even with the Acting Attorney General Blanche's [19:54] statements yesterday, this matter is still subject to ongoing litigation, so I'm unable to comment further on it. [20:00] As with all department litigation, the Department of Treasury and the IRS were represented by the Justice [20:07] Department. So any additional questions about the settlement or the fund should be addressed to the Justice [20:13] Department and Acting Attorney General Todd Blanche. Thank you, Senator. [20:18] All right. Thank you. With regard to the working families tax cuts, affordability remains top of [20:26] mind for families across this country. Last summer, Republicans acted to prevent what would have been [20:31] the largest tax increase in American history and delivered meaningful pro-growth tax relief through the [20:37] working families tax cuts, providing much needed support to American workers and families. [20:43] Can you talk about Treasury's work so far to implement this groundbreaking tax relief and what parts of [20:49] the law do you view as the most helpful in addressing affordability issues? Thank you, Senator. [20:57] Since the working families tax cut was passed in record time on July 4th, I would describe the benefits [21:05] that as a barbell. On one side we have seen for American business immediate the immediate expensing of [21:15] capital goods and factories, which led to more jobs and construction jobs. The on the other side, [21:23] we have seen the president's signature policies, no tax on tips, no tax on overtime, reduced taxes on social security, [21:30] and deductibility and deductibility of American made cars on the loans for those. 99% of the filers claiming [21:38] any of those four deductions had incomes under $200,000, 90% had incomes under $100,000. We saw record [21:48] tax refunds and we are not able to measure the delta in the refunds because we can only calibrate someone who had [21:56] gotten a refund the year before so that we cannot calibrate if someone had paid in. And as I have [22:03] traveled across the country, many people have said paid a substantial amount last year, I've gotten a [22:08] very large refund this year, and I think very importantly too, the certainty that our small businesses have gotten. [22:16] Thank you. The Senate Finance Committee is engaged in productive bipartisan discussions on the taxation of [22:23] digital assets. As the digital asset industry continues to grow and evolve, there's an increasing [22:29] need for durable common sense rules of the road that provide certainty for taxpayers, support innovation, [22:34] and help ensure that the United States remains competitive in the global digital markets. [22:40] Does Treasury support congressional efforts to develop comprehensive digital asset taxation? And in your [22:46] view, what are the risks of continued inaction, both in terms of taxpayer compliance and America's [22:52] ability to remain competitive in the rapidly growing digital asset economy? Senator, since President Trump [22:59] issued his executive order, Treasury has been working tirelessly to implement the action on digital assets. [23:08] We saw Congress pass stablecoin legislation, Clarity Act, which I would encourage everyone to get [23:16] behind. It's very necessary to bring U.S. best practices onshore, and we work tirelessly in terms of [23:25] custodying these assets and keeping them, making the U.S. the innovation capital of the world. Thank you very much. [23:34] My time has expired, and I encourage all my colleagues to note when their time expires, we want to keep moving [23:39] expeditiously. Senator Wyden. Thank you very much, Mr. Chairman. Secretary, yesterday, Acting Attorney General Todd Blanche [23:46] indicated that the administration is not moving forward with the slush fund, but there's been no [23:51] indication of what this means for the Trump alleged IRS audit immunity. So my first question is, does the [23:59] IRS audit immunity given to Trump, his family and his businesses still stand? I'd like a yes or no answer to [24:09] that. I got five minutes. I'm going to use them for these questions. Okay. So that we understand what's at [24:28] stake here. This immunity deal is the biggest scam against the taxpayer in American history, and [24:36] Americans are going to pay taxes, and Trump and his clan won't. So we'll start with that. Now, my second [24:43] question is, every president's tax return gets audited, Mr. Secretary. Who originated the May 19th [24:49] addendum canceling Trump's audits? Was it Trump, DOJ, or Treasury? Again, sir, as Albert Einstein said, [24:57] they're doing the same thing and expecting a different answer is the definition of insanity. [25:02] You've given no answers on this subject, and that's why I'm going to ask these questions. [25:06] And because, as I said, there's ongoing litigation. Does the DOJ have the authority to settle a tax [25:11] dispute unilaterally? The DOJ acts as the attorney for Treasury and the IRS. So the tax code says the DOJ [25:21] can only settle a tax dispute if you, the Treasury Secretary, first deferred the dispute to DOJ in [25:27] the case we're talking about. So here, Trump, his kids, all of the business entities they own, [25:33] potentially thousands of tax returns. And unless you referred every single one of those tax returns to DOJ, [25:40] the addendum is invalid, or the Treasury and the IRS believe have been more involved in this scandal, [25:48] as far as I can tell, than you've led us to believe. So I'm going to keep digging into the timetable here. [25:54] Career IRS attorneys wrote a 25-page memo preparing defenses against Trump's lawsuit, [26:00] and they recommended DOJ move to have Trump's lawsuit dismissed. The IRS reportedly gave this memo to Treasury [26:07] officials in April before the settlement. Did you see that memo? Again, there's continuing litigation, [26:15] and I'm unable to answer. Will you provide this committee with a copy of the IRS memo? Again, there's [26:24] continuing litigation. Mr. Chairman, I'm going to continue my questions, but I would like to ask you now to [26:32] authorize the 6103 waiver and for Mr. Besson to waive the attorney-client privilege, which I guess is part of [26:39] what he's up to. I'm not quite sure what you're asking, but I will not agree to ask him to waive his [26:48] attorney-client privilege. The way we're going to get to the bottom of it is to have the committee look [26:52] at these matters in a bipartisan way, and I'm going to continue with the questions that highlight my [26:58] argument. The Biden administration prosecuted Charles Littlejohn, the Booz Allen contractor who [27:03] leaked Trump's tax returns. Booz Allen, which helped with the prosecution, held contracts with the [27:09] Treasury Department for years. Three days before Trump filed his lawsuit this year, you abruptly [27:15] canceled all the contracts. It is hard to see that timing be a coincidence. Did you know in advance [27:22] that Trump was going to file a suit against the IRS? I did not. All right, I've written to you twice [27:29] asking for records related to this decision. Both times you refused. I'll ask again, will you send the [27:35] committee all records documenting this decision so we can review this in a bipartisan fashion? [27:42] Again, there is ongoing litigation, and Senator Howie got here was a violation of President Trump's 6103 [27:50] rights, and it wasn't just President Trump. There were 400,000 tax returns that were leaked by Mr. [27:58] Littlejohn, and I will point out that Mr. Littlejohn was not prosecuted to the fullest extent of the law. [28:03] He was eligible to be prosecuted on three counts. The Biden administration chose a light touch and [28:10] only prosecuted him on two counts. We're going to continue these questions, and I come back to my [28:18] point, Mr. Chairman. We need you to support this 6103 waiver so that this committee on a bipartisan [28:25] basis can look into a matter like this. When you're talking about the President of the United States, [28:29] it doesn't get any more important, and I'll just close my opening effort to try to ferret out the [28:35] facts here, Mr. Chairman, by saying, Mr. Secretary, this whole settlement, in my view, is the most brazen [28:42] abuse of power ever in our history, and as of now, every American is subject to audit except Donald Trump and [28:50] his family. I think that's absurd, and you've been dodging questions. Each one of these, you had a legal [28:56] argument for saying nothing, and I suspect you cleared the way for Trump's lawsuit when you [29:01] canceled the contracts, and I suspect people right up to the highest level of the Treasury Department [29:06] had a hand in crafting this unbelievably corrupt gift of a settlement, and I just want it understood [29:13] colleagues. I want to work with every senator on this committee to get to the bottom of this because [29:19] we aren't getting the facts, and the Secretary, in spite of the fact that he owes answers to the American [29:24] people, is just dodging and bobbing and weaving. Thank you. Senator Grassley. I'm going to start first [29:32] with a comment and a commendation to the department in regard to a program that Senator Wyden and I have [29:42] been involved in, and I think the department's doing the right thing, but I think you're getting pressure [29:48] to change. So I want to commend you and the IRS for protecting the integrity of the conservation easement [29:58] deduction by holding those engaged in abusive syndicated conservation easements, hold them accountable. [30:08] These abusive transactions generally rely on highly inflated appraisals that result in taxpayer [30:17] investors saving $2 in taxes for every $1 spent. So to be perfectly clear, these arrangements perverted [30:28] a charitable deduction to turn a significant profit. In 2020, Finance Committee report that details Senator [30:39] Wyden's and my investigation of these arrangements clearly shows that both the promoters and the taxpayer [30:48] investors understood them to be tax shelters. So I encourage you and the IRS to stand by recent [30:59] settlement offers and ignore those who I think are lobbying you to water it down. Good. Thank you for your [31:09] comments, Senator. In 1981, at the time of growing deficits and elevated inflation, [31:16] Fed Chairman Paul Volcker advised Congress to cut spending and to pursue crow growth policies. He urged [31:28] Congress to focus on reforms that would incentivize Americans, in his words, to invest, to save, and to work. The [31:37] working families tax cut law adhered to the Volcker approach. It reduced spending by over $1 trillion, [31:45] while making provisions of making provisions of the 2017 tax law focused on spurring domestic investment [31:54] permanent, like full expensing for new factories and factory improvements. How important has the working [32:03] family tax law been in terms of promoting economic growth, job creation, and wage growth? Senator, it has been [32:13] essential to the success that we have seen. For the past four quarters, the U.S. economy has grown at 2.6 percent. And that [32:22] is despite the Democratic government shutdown in the fall. And that is despite the Iranian conflict, which will make our country [32:29] safer. And what we are doing on the household side, as I said, almost 50 percent of the tax returns we received had one of the [32:43] President's four signature policies. On the other side, the pro-growth, the tax policy for our corporations, immediate [32:53] expensing of capital equipment, of structures, including farm structures, and the 100 percent [33:00] expensing for R&D and certainty. Senator, it is the certainty that allows both big and small businesses [33:08] to be able to plan for the future for hiring for capital expenditures. And it is this capital stock and [33:14] investment that generates high after-tax returns and increases productivity. And if productivity increases, [33:21] or what increases real standards of living, sir? This will have to be my last question. [33:28] You've been a proponent of targeting annual deficits of three percent of GDP, which roughly [33:37] aligns with the post-World War II average. During the last two years, the Biden administration, [33:43] we saw a deficit of 6.2 percent and 6.3 percent. In 2025, President Trump's first year in office, [33:53] a deficit came in at 5.8 percent of GDP. How does President Trump's budget and deregulatory agenda [34:02] ensure the annual deficit stays on a downward trend towards that three percent that you advocate? [34:09] Senator, as I said all the way back as far as my confirmation hearing, we do not have [34:15] a collection problem. We have a spending problem and we have a growth problem. So if we can constrain [34:22] spending and grow our economy, then we have the ability to pay down debt and get back to the three percent [34:31] target, which I believe that we can achieve something with a three in front of it by the end of President Trump's term. [34:37] Senator Warner. Thank you, Mr. Chairman. Secretary Besant, good to see you again. [34:44] Good morning. Yesterday, the administration took an action that, again, I thought I could no longer [34:53] be surprised, but I was surprised. The President put in Bill Pulte as the Director of National Intelligence. [35:02] Now, I know it's not your area, but the whole law that was set up establishing the Director of National [35:10] Intelligence was to make sure that this position was filled by someone with a great deal of national [35:16] security experience. Now, Mr. Pulte currently is within your domain. Do you know, does Mr. Pulte even [35:24] have a security clearance? Senator, I do not. Okay. And being head of the FHFA, isn't that a full-time job? [35:34] It's a very important position. So the notion that Bill Pulte is going to remain as head of the FHFA [35:45] and Moonlight as the Director of National Intelligence, I don't understand. To me, [35:50] it seems insulting to the thousands of men and women who work in the intelligence community. [35:55] Again, Mr. Pulte reports to you. No, it's an independent administration. [36:05] But within, let me just ask, let me ask you this. How would you describe Mr. Pulte's temperament? [36:15] I spoke with Director Pulte yesterday and congratulated him and said I look forward to continue working [36:21] with him on FHFA matters and wished him luck as he gets up to speed in DNI and told him that we had [36:30] several pressing issues on Iran. So you're very, you're totally comfortable with the notion that [36:36] Mr. Pulte, who I, at least in press reporting, you've had quite a number of differences with, [36:42] is going to be able to do both the Director of FHFA and the Director of National Intelligence? [36:48] Well, sir, many teams squabble in the locker room and go out in the field. [36:52] Okay. Well, Mr. Pulte has had a record of not respecting confidential information. He has [37:01] weaponized mortgage information. I think everyone would at least acknowledge the factual basis of [37:07] that. And the idea that he's going to suddenly be given the keys to the most classified secrets [37:14] that keep our country safe. I just would have wished that someone in the White House would have [37:21] gone to the emperor and said on this one, you got no clothes. And it's, it's an embarrassment. [37:30] Let me get to another topic. Um, agentic AI, you know, I, I'm, I think, I think there's great [37:42] promise from AI. There's also downsides, but as we think about agentic AI agents, I'm sending letters [37:51] on this, I think we need a strong fiduciary regime around those agents. I mean, when Mike said to me [37:57] recently, if your agentic AI agent goes off and buys a bunch of retail stuff for you and you get [38:03] it home and then human being says, I don't want this stuff, who bears the burden? As you think about, [38:10] you know, the notion when we've talked about this in the past of agentic AI agents, do you believe that [38:16] we need some level of strong fiduciary regime? The president's executive order yesterday, [38:22] I think strikes a very good balance between innovation and safety, because that is a calculus [38:29] we're trying to optimize for. I've been in contact with all of the large language model labs. I was in [38:37] San Francisco on Saturday meeting with them and we have convened at Treasury. We have convened, uh, [38:44] the largest banks and they are working, uh, diligently via on their standards because, uh, [38:52] by their nature, they have the strongest cybersecurity departments. I think that the rest of industry can [38:59] learn from them. Well, again, we may agree to disagree in the notion that it is simply voluntary [39:05] regime. Fiduciary duty would apply some duty. I've talked to many of the banks. They think [39:10] with me, those, they are totally unprotected. And the idea that we're going to have only a voluntary [39:15] regime, I believe will put our banking system at risk, clearly our national security at risk. [39:22] And I felt like the president's earlier draft made a lot of sense. I was very disappointed. It was, [39:27] it was a watered down Latin. The only difference in the draft was 90 to 30 days. [39:35] So the draft I saw earlier had a stronger than strictly voluntary regime, but the, [39:42] I want to get my last point in quickly. We still got to get the CDFI money out. We got 32 [39:49] senators, 16 on each side, including the chairman. You know, the money is sitting there. It needs to get [39:54] out. Yes, sir. That we have gotten out what we have been allocated, uh, from OMB. OMB did not apportion it [40:05] until April 8th. Uh, and we are getting that funding out. It's June, but there still hasn't [40:12] awarded a single dollar of the money. Thank you. Senator Scott. Thank you, Mr. Chairman, Secretary. [40:18] Thank you for taking some time to be here with us today. Good to see you again. Good to see you [40:21] all, Senator. Hope all is well in Charleston. I don't get back much, but we miss you there. So find [40:26] a way back to the Holy city. We need to see you more often. Let me just, uh, first say to you and [40:31] particularly to your staff as well on the issue of home ownership. As you know, we worked in the [40:35] banking committee for a long time on the 21st century road to housing. Uh, your team has been [40:39] fantastic to work with. And frankly, this is an issue that is not a Republican issue or Democrat [40:43] issue. Uh, every member of the Democrat side of the aisle, as well as Republicans work together, [40:48] hand in glove to make sure that we keep America's priorities first. And that makes 2026 the year of [40:54] affordability. Your team has been fantastic to work with on the issue of housing. So I want to say thank you [40:59] on that one. Number two, I will have a question for the record around an issue of 45. Why clean [41:05] electricity production tax credit is an issue that I would love to get a response from you, [41:09] not now, but later on. But I do want to ask you a question. Um, Mr. Secretary, as you know, [41:14] economic security is national security and the treasury department plays a critical role. [41:21] The United States national security apparatus with the emergence of digital assets. I was curious [41:26] if you could touch on the treasury's role in fulfilling president Trump's executive order [41:31] that set up the Bitcoin strategic reserve and digital asset stockpile. Could you give me an update [41:37] on where things stand with the implementation of the executive order? Yes, sir. And I couldn't agree [41:44] more with you that economic security is national security. I gave a speech at the Reagan library, [41:49] outlining my thoughts on that and how for 25 years, the U.S. has been asleep and under [41:55] President Trump's leadership. We are moving forward very quickly on that. And part of that is our digital [42:03] assets initiative. The strategic Bitcoin reserve is something. This is new technology. This is new [42:12] ground. We are proceeding with all deliberate speed. And we are making sure that as we are doing this, [42:19] in this complicated process that we use best practices and things will be durable for the future. [42:26] And look forward to working with you and your team on that. Absolutely. And I look forward to [42:30] the clarity act being passed this summer. Great. Thank you. Another question on IRA accounts. President [42:38] Trump signed another executive order in the 14403 to increase America's Americans access to IRAs for those [42:45] workers who lacks employer-sponsored retirement plans. Also, the order directs you to prepare [42:52] legislative recommendations for building upon the trumpira.gov. Do you have a timeline, something [42:59] in mind that would be helpful for us to appreciate as it relates to perhaps a Trump accounts 2.0? [43:04] So, sir, we have the launch of Trump accounts on July 4th. Okay. And we are consumed with that. So, [43:14] they will begin July 4th of Saturday. They will begin trading and go live on July 6th. And then we [43:22] will be laser-focused on the IRA accounts directly after that. Excellent. I do think it's important [43:29] for us to take some time on the Finance Committee to recognize one of the more important issues facing [43:33] the American people as it relates to those. Half our workers do not have access to, maybe not quite half [43:38] our workers, but a significant portion of our workers do not have access to an IRA. And frankly, [43:43] having this focus from the administration, I think, is powerful and important and recognizes the [43:47] importance of making sure that everybody has a chance to accumulate equity in this country, [43:52] which typically comes through either home ownership, business ownership, or an equity position in the [43:56] stock market. This approach provides access to that opportunity. And speaking of opportunity, [44:02] as you know, it would probably be just inappropriate and shocking if I did not mention opportunity zones, [44:08] because I do every single time I see you, because I do think it's one of those consequential pieces [44:13] of legislation that has a generational impact in a positive way for the poorest communities in [44:17] this country. Governors across the country are right now currently working on figuring out where they [44:24] want the designations within their states on this 10-year new window. I'd love to have an update from you [44:30] as it relates to streamlining the opportunity zone nomination process, as well as if there are any [44:37] best practices that governors should take into consideration that you have become aware of. It'd [44:43] be great to hear. Yes, Senator. And as a reminder, every Democrat voted against opportunity zones. [44:49] Thank you. So what was especially great about this bill is it expanded, created stronger rural [44:58] opportunity zones. So that is part of our guidance to the states. Treasury is engaging with state officials [45:05] ahead of the next nomination round, and we're working to provide transition guidance so that investors [45:11] will have the clarity they need to keep putting capital work in the communities that need them the most. [45:16] Mr. Chairman, I know I have two seconds left, so I'll use those two seconds pretty quickly here. [45:20] The heirs of bipartisan visa legislation not supported by my friends on the other side, [45:24] but every mayor that I've run into around the country, blue or red, love opportunity zones. Thank you. [45:30] Yes, and Senator, several of your colleagues from the other side of the aisle have called me because [45:36] they were distressed that their state may be losing an opportunity zone, and I pointed out that they [45:41] voted against them, but because of your goodwill, we would be working with them. God bless you. Yes. [45:46] We all love opportunity zones. Senator Hassan. Well, thank you, Chair Crapo and Ranking Member Wyden [45:54] for holding this important hearing. Good morning, Secretary Bessent, and thank you for testifying. [45:59] Good morning. I want to start with a question that I think should get bipartisan support. The Treasury [46:07] Inspector General for Tax Administration recently said that the Treasury could prevent a billion dollars in [46:13] fraud if Congress moved up certain deadlines for businesses to file information returns. This would [46:19] help give Treasury the information it needs earlier in the year to stop fraudsters from stealing taxpayers' [46:25] identities and their tax refunds. Will you commit, sir, to working on a bipartisan basis with members of [46:30] this committee to advance this proposal and help the Treasury stop identity theft and fraud? [46:35] We look forward to working with both sides of the aisle on that, Senator. [46:40] Thank you very much. And just an observation, Mr. Chair, there's been discussion of a so-called [46:46] settlement of a lawsuit between the President and the IRS. I just want to note that the so-called [46:54] settlement is being challenged because of collusion, it appears, by the President and the IRS to the [47:01] point where I'm not sure a settlement agreement actually exists because the court is considering [47:06] whether this is a legitimate lawsuit to begin with. But what the Acting Attorney General did say [47:12] yesterday was that despite the slush fund being off the table, at least for now, that the grant of [47:19] immunity for tax liability to the President and his family still was going to be on the books. So, [47:25] this is a sweetheart deal for the President. It apparently is still going forward, [47:29] unless a court puts a stop to it. And I think it's going to be important for the Secretary to level [47:35] with the American people about how much this sweetheart deal will cost them. Some news reports [47:39] suggest it's at least $100 million just off the top. Now, Secretary Besant, in May, the President said [47:47] that he does not think about Americans' financial situations. Do you think about the financial [47:53] situation of the American people? I do. And as the Ranking Member distorted my statement, [47:58] as he often does, I had prefaced my statement with, we understand that these are challenging times for [48:05] the American people, that we will get over this, and that at present, the average household has paid [48:11] about $200 more in gasoline. And we think about this every day. Well, I'm glad that you do. Do you [48:18] think your boss should, too? I believe his remarks were taken out of context. [48:25] No, look, here's what he said. He said, quote, I don't think about Americans' financial situation. [48:31] I don't think about anybody. So, I'm asking you, that's the direct quote. Do you think about how [48:36] the American people are paying more for gas, groceries and utilities, since the President clearly said he [48:42] didn't? And you speak with the President regularly. Are you trying to tell him the truth about how [48:48] much costs have increased for the American people? Well, Senator, I'm going to have to disagree with [48:52] you on some of that, because I have groceries are going down. And to be clear, since President Trump [48:58] took office, food prices, or as many people like to call them groceries, food at home in the statistical [49:04] data is up 2.5%. When's the last time you were in a grocery store? Because my husband and I were just [49:10] in one. And look, the average Granite Stater, the average Granite Stater is paid, let me be clear, [49:16] the average Granite Stater has paid $3,000 more since Donald Trump took office for basic goods and [49:22] services. Meanwhile, the country lost 100,000 manufacturing jobs in 2025. So, do you tell the [49:30] President this information or not? That, again, Senator, except for inflation, which is, I believe, [49:36] going to be a short-term blip, the economic data is very strong. The jobs data has been very strong. [49:42] The manufacturing ISM has been very strong. No, actually, that's incorrect. So, let's move on, [49:48] because what's clear to me... Which part was incorrect, Senator? No, what is very clear to me is that [49:53] neither you nor the President nor this Administration are willing to acknowledge how much more people are [49:59] paying at the gas pump, at the grocery store, in utilities, for healthcare, for all aspects of [50:05] American life, nor have you acknowledged the number of manufacturing jobs that were lost in 2025. [50:10] Senator, Senator, Americans are paying 2.5% more for groceries since President Trump took office, [50:18] which is half the annual amount under Biden administration... We're not talking about Biden, [50:24] we're talking about this Administration and its promise to lower costs, and the fact that this [50:29] President says he doesn't care. Now, let's go on to... Mr. Secretary, my time is limited. I'd like to [50:36] reclaim a little bit of my time, because I have one more question. The Administration has claimed [50:41] that its top priority is lowering costs for American families, but the President instead continues to [50:47] pursue vanity projects at a significant cost to taxpayers. He requested a billion dollars for the White [50:53] House Ballroom, spent $45 million on military birthday parade, proposed a $100 million arch at [50:59] Memorial Circle, and now Treasury is planning production of a $250 bill with his face on it. [51:05] Mr. Secretary, how does the President's requested billion dollar ballroom or all of these other vanity [51:11] products lower costs for American families or help constrain spending? Senator, first of all, [51:17] you're incorrect. There is no cost to the American people. If there is a new bill for the ballroom, [51:25] the decorative part of the ballroom is privately funded, and everything that you were talking about... [51:30] The President requested a billion dollars for the White House Ballroom in our budget. He has spent $45 [51:36] million on a military birthday parade, so... That all... Look, it goes on outside my office every day. I've watched it [51:43] progress, and it is national security matters that the billion dollars is for. That's ridiculous, [51:49] and I think you know it. I'll yield back my time. Thank you, Mr. Chair. Senator Johnson. [51:56] Thank you, Mr. Chairman. Yeah, Mr. Secretary, I don't recall back in, let's say June of 2022, [52:01] when the average national price of gasoline was $5 a gallon, when we were experiencing 40-year high [52:09] inflation, about 9%. I don't recall Democrats being all that exercised and coming to these hearings and [52:15] battering the Biden administration officials and why, you know, living is so unaffordable. Do you recall [52:22] that back in 2022, 2023? Well, what I do know, sir, is that pyromaniacs like fire, so they can't stop [52:29] talking about what they did. And they... As I was trying to tell the Senator, since President Trump came into office, [52:37] food at home has increased by 2.5%, moving close, moving back toward the Fed's 2% level, and every year [52:47] averaged 5%, so it is half the price. We elevated the level, and to be clear, Senator, what we have not [52:55] heard is an apology to the American people. So the other thing we haven't heard is a concern over the [53:02] massive amount of fraud that we are being told about every day. Democrats wanted a clean extension [53:11] of the enhanced subsidy under Obamacare, even though once it expired, people got the subsidy anyway. But [53:18] they couldn't care less if there are maybe 6 million people now is what the current estimate is. 6 million [53:22] people, or phantom people, taking advantage of those subsidies costing the Treasury 25 to 35 billion [53:30] dollars a year. No concern about that from the other side of the aisle. I want to focus on fraud. [53:36] The lowest estimate on an annual basis comes from GAO at 250 billion dollars a year. We had the CEO of [53:43] LexisNexis, who didn't realize he did this kind of research, they put the annual figure about a [53:47] trillion dollars. I think you've come up with your own figure. What do you estimate annual amount of fraud [53:53] in the federal budget? At least 500 billion, sir. So again, this is a range of somewhere between 3.3 [53:59] and 13.3 percent of our budget. A recent story I heard on the radio this morning of a fraudster [54:08] in California in one year, from May 22nd to April 2023, 270 million dollars of claims. He was paid 178 [54:20] million dollars in fraud in California out of Medi-Cal. Do you have any idea how much, okay, he's been [54:27] prosecuted, he's been convicted. Do you how much of that 178 million dollars was recovered? Sir, what I [54:33] can tell you is once the money goes out the door, it's very difficult to recover. The best way to prevent [54:38] the fraud is to prevent it before it goes out the door. And Senator, I will tell you the other heartbreaking [54:43] part of this is I did a round table in greater Minneapolis and there were several owners of autism [54:53] clinics there, valid clinics that who are they are having trouble getting funded and they are doing [54:59] the right thing for these families and for those children. Right, so the fraud prevents the money [55:05] going to the people who truly need it. It's really intended for and and and that's my point the I don't [55:11] think this is up to date but it's the the most recent figure we have. The Department of Justice publishes [55:16] their list of indictments and prosecutions about 4.7 billion dollars is being prosecuted out of a total [55:25] of somewhere between 250 and one 250 billion one trillion dollars in fraud. So I know Dr. Oz suspended [55:33] payments to what 400 hospice centers in California in Los Angeles. Los Angeles has a third of all hospice [55:40] centers. They suspended payment to 400 and not one of them complained. Why wouldn't one of those 400 [55:48] hospice centers not complain about losing their funding? Again, Senator, we could speculate that it's [55:56] it's fraudulent and the key here, Senator, is transparency. We need to be able to see where [56:02] this money is going for the everything that went on in Minneapolis and Minnesota. There was transparency. [56:09] There was a list of the layering center you were able to see received this much. This is the address. [56:16] These are the people. But Democrat government officials ignored that transparency, didn't they? [56:20] It was right. They had access to it. They ignored it. Well, they ignored that. But in many states, [56:25] like New York State, Illinois, they refuse any level of transparency. I believe that's true of [56:30] the governor of Wisconsin as well, refusing to turn over records on, you know, some of the welfare [56:38] benefits that Wisconsinites get, correct? It should be a bipartisan issue. So what can you do? [56:44] I mean, to prevent it? I mean, Dr. Oz obviously just suspended payments. I'd imagine you're somewhat [56:49] limited there. I mean, I know Vice President Vance has got a fraud task force. We've got to get our [56:56] arms around this and we're not going to get any help from the other side of the aisle. So it's going to [56:59] have to be done through executive action. What can you actually do? [57:02] We are supporting Vice President Vance in this task force. There has been a new assistant attorney general [57:09] appointed to do this, and this is an all-of-government effort by the Trump administration. [57:14] Well, we wish you luck. It's crucial. Thank you, Mr. Chairman. [57:17] Thank you. Senator Whitehouse. [57:19] Thanks very much. Secretary, welcome. Have you identified any precedent in Treasury or [57:34] IRS history for the agreement not to audit, investigate, or pursue any tax claims against [57:48] the Trump family or businesses? I can't identify any precedent where 400,000 tax returns, [57:59] including the people you just mentioned, and all of their employees, were leaked in a violation of the [58:06] most one of the most sacred duties of the IRS. So let me cut to that then. The leak was by a [58:12] contractor. Can you tell me what contribution is being sought by Treasury or by the IRS for the harm [58:24] done by the contractor? To a certain extent, your organization and the IRS are the victim of the [58:31] contractor's malfeasance or negligence. What is being pursued by way of contribution by that [58:37] contractor? Well, the ranking member chastised me for cutting the contractor's contracts off, [58:44] and we have removed their contracts, their ability to do business with Treasury and the IRS. [58:51] But there is no contribution into this particular case? Again, Senator, you weren't here earlier, [58:59] but I'm unable to discuss most of this because of ongoing litigation. Yeah, I know you like, [59:04] everybody likes to say that. We like to follow the law, Senator. And the law is that the Congress [59:12] has constitutional oversight functions that do not disappear simply because there is litigation, [59:19] however convenient it may be, by way of providing answers. So we have no precedent for it. No [59:26] contribution is being sought from the contractor at fault. Was there any consideration to the government [59:37] in return for the benefits of no audit, no investigation, no challenge or pursuit of refunds [59:49] or other penalties? Again, Senator, I'm unable to comment because of litigation. Treasury is represented [59:57] by the Department of Justice in all matters. They act as our attorneys. So I would suggest that you [1:00:04] direct your questions to Acting Attorney General Blanche. Yeah, well, I've had a lot of times people [1:00:11] who are before us invite me to ask my questions of somebody who's not before us, but you're the one who [1:00:17] is before us. And I think you ought to know if there was any consideration offered or paid in return for [1:00:25] that settlement. It's a very simple fact question. Was there or was there not consideration? [1:00:31] Again, there's ongoing litigation. And I suggest that you speak with the Treasury attorneys. [1:00:40] If this kind of behavior is OK with the chairman, I'll just pursue other questions. But, you know, what goes around [1:00:46] comes around in terms of dodging questions. I believe it's very clear that witnesses of any kind [1:00:53] cannot discuss ongoing litigation. They can certainly discuss a fact that they are aware of. The fact that [1:01:01] there is some litigation out there doesn't mean that a witness can't say, yeah, there was no consideration [1:01:07] or yes, there was consideration. Was there a defense analysis memo? It's referenced in the judge's decision [1:01:17] in Florida. Was there a defense analysis memo prepared by the IRS? And more specifically, did you see it? [1:01:28] Again, I'm not going to be able to comment on these matters. Mr. Chairman, this just makes no sense at [1:01:36] all. I've been a lawyer all my life. I have some idea of what is protected when you have a [1:01:41] an ongoing bid of litigation. Whether this individual has seen an official memo from within [1:01:55] his own department is a very simple question to answer. And I think it's completely inappropriate [1:02:03] to have this game of dodgem be pursued without any consequences. Well, last of all, here's another [1:02:12] question. Was there any analysis of what harm befell President Trump from having his taxes released [1:02:26] when every president since Nixon released their taxes and he had promised to? Did anybody analyze [1:02:37] whether there was actually any harm at all to him in those circumstances? [1:02:42] So there was a crime. The president's rights under 6103 of the IRS code was violated. And equally as [1:02:52] important, 400,000 taxpayers had that right violated, including every employee of the Trump administration, [1:02:59] the housekeepers at Doral, the greenskeepers, the cashiers. And you're welcome to pursue all of that, [1:03:06] but it doesn't answer the question of whether the president actually suffered harm. And you're not [1:03:12] answering that question either. Senator Cortez Masto. [1:03:17] Welcome, Secretary Besson. Let me ask you this on a separate subject. Federal law prohibits the image [1:03:28] of a living person from appearing on a U.S. currency, and that includes the president of the United States. [1:03:35] Isn't that correct? That is correct, Senator. Thank you. There's reporting that your U.S. Treasurer [1:03:43] Brandon Beach and his senior advisor Mike Brown have been repeatedly urging staff at the agency's [1:03:50] Bureau of Engraving and Printing to prepare prototypes of the note, a $250 bill with President Donald Trump's [1:03:58] face on it. And in fact, in August and September, Beach provided Bureau staff with mock-up designs for [1:04:05] the note, including one that shows President Donald Trump's face in the center of the $250 bill between [1:04:11] the signatures of the president and your signature. It is also reported that the artist who said he [1:04:18] designed the mock-up told the post that he had spoken with Trump about it. Is it true that your staff [1:04:23] is pursuing a mock-up of this bill with President Trump's face on it? That was in coordination with [1:04:30] pending legislation in the Congress to change the requirement that a person must be deceased to be [1:04:40] on the currency. So you're acting before legislation has even passed to authorize it. Is that correct? [1:04:46] Just as we did with the working families tax cut, we were prepared in advance. At Treasury, we do things [1:04:52] in advance. My predecessors seem to scramble to do things at the last minute. So if the law does not [1:04:59] pass, do you intend to still move forward without the authorization from Congress? Of course not. We [1:05:04] will follow the law. Thank you. Let me ask you this question with respect to the agreement and the [1:05:12] lawsuit settlement that a lot of my colleagues have been talking about, shielding the president, [1:05:18] his family and corporations for many future audits. You are the acting IRS commissioner, correct? [1:05:24] That is incorrect. What is your position right now with the IRS? My term expired. So you have no [1:05:29] position with the IRS whatsoever? The IRS is a bureau that reports to Treasury. When there is no commissioner, [1:05:35] those duties float up to me. All right. So there's no interaction that you have right now or responsibility [1:05:42] over the IRS other than the commissioners there. The commissioner has free reign and you don't have [1:05:47] any authority to stop anything. No, there is no commissioner. So I assume those duties. [1:05:53] So there is no commissioner. So you're acting commissioner. No, that's incorrect. Okay. So for [1:05:57] purposes of the public, let's get it straight. So the public knows your involvement. There is no [1:06:01] commissioner. There's somebody that is acting. I had previously been the acting commissioner. Senator [1:06:08] Warren, who likes to send me a lot of letters, was kind enough to send me a letter. Yeah, [1:06:12] I'm just trying to figure out your role with the IRS. For the purposes of public and transparency, [1:06:17] what is your role currently with the IRS and your authority? I am performing the duties of the [1:06:21] commissioner. Oh, so you are. Okay. Got it. So let me ask you this, because you've talked about not [1:06:27] only Donald Trump and his family, but there were 400,000 taxpayers information that was also leaked [1:06:34] by Mr. Littlejohn, the contractor working for the IRS. Do you intend to give them the same immunity as [1:06:40] President Trump and his family received? Again, you were not here at the beginning. [1:06:46] I had a statement that I read to Chairman Crapo that I am unable to provide any additional details. [1:06:52] Well, that's not part of the litigation. Due to litigation. That's the 400,000 taxpayers [1:06:56] aren't part of the litigation. You have said there were 400,000 taxpayers information that was also [1:07:02] leaked. They're not part of that litigation. Do you intend to give them the same immunity that you gave [1:07:08] Donald Trump and his family and corporations that were part of the litigation? [1:07:12] Senator, you may have missed the first part of this, but Treasury does not give any of that. [1:07:18] We are represented by the Justice Department. That's right. You're the acting commissioner. [1:07:23] As acting commissioner, you had said earlier you had concerns about those 400,000 taxpayers whose [1:07:29] documents were leaked by an independent contractor with the IRS. If you have concerns about those 400,000, [1:07:36] do you intend as acting or whatever role it is you have as the IRS commissioner, do you intend to [1:07:43] give them the same type of treatment? We will follow the instructions and the settlement by... [1:07:50] That was not part of the settlement. That was not part of the settlement. So clearly... [1:07:55] Let me just say that was not part of the settlement. It's been very clear you're dodging this and you're [1:08:00] trying to use it as an excuse. It's just outrageous on behalf of the American public. [1:08:04] That I am represented by counsel and that I will follow the law as an excuse, Senator? [1:08:08] When you were going through your confirmation process, you stated that your goal was to get [1:08:12] the federal budget deficit to 3% of GDP by the end of President Trump's term. However, [1:08:17] in the administration's budget proposal for this year projects a deficit of over 5% of GDP by 2029. [1:08:26] Do you no longer intend to achieve that 3% goal? I do. I said something with a 3 in front of it. [1:08:34] And we in fact had a fiscal contraction last year. So we are already in the 5 range. [1:08:41] You said something with a 3 in front of it. All right. I appreciate you being here. [1:08:47] Senator Young. Secretary Besson, great to have you here today. You and I have discussed [1:08:53] shipbuilding in the past and the importance of shipbuilding. I've seen you recently offer [1:09:00] your thoughts about the importance of this issue and the importance of rebuilding our shipbuilding [1:09:07] enterprise here in the United States. The president has also spoken quite forcefully about the threats [1:09:14] associated with having a shipbuilding enterprise that is weak and unable to produce enough ships for [1:09:24] the needs of our nation. In fact, his executive order on restoring America's maritime dominance and [1:09:30] a subsequent maritime action plan, he highlighted with some specificity the challenges and the [1:09:37] opportunities that we face. So I'm grateful for his leadership, grateful for yours, because we know [1:09:45] China has invested heavily in this industry. They, of course, have a centrally planned economy in so many [1:09:51] respects and they've over invested in their capacity. I've been briefed that China can actually build over [1:09:58] a thousand ocean-going vessels in a year. The United States built one last year, one ocean-going commercial vessel. [1:10:06] For those who are skeptical of industrial policy, and I think that's a healthy skepticism. There's a reason [1:10:12] we don't have a centrally planned economy, but from time to time you need to deviate from the catechism. [1:10:20] Adam Smith himself, the father of free market economics, identified shipbuilding as the one industry that [1:10:28] a maritime nation cannot be allowed to have offshore. So you and several other members of the cabinet [1:10:36] Mr. Secretary have highlighted this need to restore our maritime industrial base. But we know we can't [1:10:43] do it without giving the president of the United States additional authorities, resources and authorities [1:10:49] he needs. And that is why Congress in a bipartisan way needs to pass the Ships for America Act and pass it [1:10:57] now. Mr. Secretary, how are you thinking about these issues? And do I have your commitment to work with [1:11:03] Congress to start building ships in America again? So, Senator, as you know, President Trump signed an [1:11:12] executive order to restore U.S. maritime capacity. I gave a speech at the Reagan Library on Friday [1:11:19] where I talked about the critical industries that we needed to reshore. And top of mind there was the [1:11:25] shipbuilding industry. And as important as the industry is the reservoir of knowledge that we have, [1:11:31] should we get into a great power conflict? That's exactly it. We literally don't have, [1:11:38] because of cheerful scenario planning in the future, we haven't thought through how we're going to repair [1:11:43] all our Navy vessels. And if necessary, build new Navy vessels in a time of a long war scenario. Long [1:11:49] war is a war that might exceed just a couple of months. So it's an acute issue. I agree with you, [1:11:56] Mr. Secretary. So, Senator, we look forward to working with you to connect industrial capacity, [1:12:02] logistics, resilience, and we want to work with you and your team toward this end. [1:12:08] That's highly encouraging. I'll take you up on that, sir. I'm going to pivot very quickly to [1:12:16] China's advantage as it relates to critical minerals, not just as it relates to the supply, [1:12:24] but they've come up with a way to manipulate our markets. They shape prices, they restrict exports, [1:12:30] they absorb losses. They create all this uncertainty that keeps private capital from financing U.S. [1:12:39] or allied critical minerals projects. And I've come up with a solution to help address this. We call it [1:12:46] the Secure Minerals Act. And Mr. Secretary, it's designed to create a strategic resilience reserve. [1:12:56] And this would be a government corporation, and it would employ tools like loans, acquisitions, [1:13:02] non-recourse lending, advanced market commitments, contracts for differences, and partner country [1:13:09] co-investments. So all these different financial tools. But the goal is, of course, not to compete [1:13:16] with or replace private capital. It's to create enough price stability and demand certainty to build [1:13:24] domestic and trusted partner capacity. We want people investing in processing and digging new mines and all [1:13:33] the rest. So, Mr. Secretary, as the administration considers tariffs on process critical minerals and [1:13:41] derivative products, my question is, should those tariffs be paired with a financing mechanism like the [1:13:48] Strategic Resilience Reserve to make the capacity we need commercially viable? [1:13:54] So through Ex-Im Bank, we are working on Project Vault to do much of what you were talking about. And it is [1:14:04] critical to have critical minerals. And as you said, the predatory pricing that China has done for 25, [1:14:10] 30 years, just like in shipbuilding, critical minerals is one of the key industries that we're focused on. [1:14:16] Well, my hope would be that I can work with you to give more legal certainty to that [1:14:20] very important project, Project Vault you're working on, so that after the Trump administration [1:14:26] leaves, which will just be in a couple of years, there can be a legacy of enduring law and operations [1:14:33] so that we've addressed this challenge related to our critical minerals vulnerability. Might I work with [1:14:39] you on that effort? We look forward to working with you, Senator, and it is a priority for this [1:14:44] administration and for Treasury and indeed for myself. Thank you, Mr. Secretary. [1:15:08] Senator Daines. Mr. Chairman, thank you. Secretary Besson, it's good to have you here this morning. [1:15:14] Good to see you, Senator. I'm grateful for all you are doing. [1:15:18] A steady hand of wisdom there in the West Wing as you are [1:15:22] working and solving some of our difficult challenges we face in the nation. So thanks for your service and appreciate you being here today. [1:15:27] I want to start by emphasizing how pleased I was when I saw the IRS's settlement offer for taxpayers [1:15:37] involved with conservation easement tax disputes. For years, I've been sounding the alarm here on Capitol [1:15:43] Hill on the abusive syndicated conservation easements that falsely were claiming a charitable donation [1:15:52] solely to turn a profit. I'm an avid outdoorsman, a guy from Montana. Protecting our farmers and ranchers [1:16:00] and championing conservation is one of my biggest priorities as I represent the state of Montana here [1:16:06] the past 13 years. I know this is a shared priority for you in this administration, which is why I commend [1:16:13] you for your help in implementing and enforcing this settlement. So it's a thank you. Thank you. [1:16:20] I also want to thank you for your hard work because we worked together [1:16:24] over much of the last year on the Working Family Tax Cuts Act that was passed and signed the law. [1:16:31] We're seeing some great results in Montana. In fact, Montana has received an average nearly $3,600 [1:16:39] tax cut on their tax return this year and about 105,000 Montana small businesses will benefit from [1:16:47] permanent tax relief to that 20 percent pass-through deduction. And we know the pass-through side [1:16:56] of the equation actually supports more jobs than the Secor side. So we did something here that's going [1:17:03] to be helpful to create more jobs and importantly job growth and income growth here for so many American [1:17:10] people. Senator, I have very clear recollection of you in the cabinet room expressing to myself, White [1:17:20] House staff, the president, the need for permanence. So I think that that will be one of your great [1:17:25] lasting achievements once you retire. Well, Secretary Besson, thank you. And I know we both knew that [1:17:31] permanence was an important part of the equation to remove the uncertainty that is oftentimes found in the [1:17:38] tax code with expiring tax provisions. And there's enough uncertainty on Capitol Hill, sadly, that [1:17:46] happens because of whether it's overreaching regulations or uncertain tax policy. But to take [1:17:50] that off the table, I think, was one of the great achievements that we faced. But thank you for your [1:17:55] kind words. And I do think that we're going to see the benefits of this bill for many years to come. [1:18:01] On Capitol Hill, anytime we pass something that's 800 pages plus in length, usually the more you dig into [1:18:06] something, the worse it gets, oftentimes with big pork barrel spending bills. In this case, [1:18:12] the more you dig into that working family tax cut bill, the better it gets. [1:18:17] Sir, the statistics are unbelievable. And we saw at the IRS that 61 million filers, [1:18:27] they filed for at least one of the signature policies. And we are seeing an industrial renaissance [1:18:35] because of the immediate expensing for equipment, factories and farm structures. [1:18:41] Well, it's music to our ears. It's what we predicted would happen. You put that kind of [1:18:46] incentive structure in place. And I also believe to think about our China strategy, having that 100% [1:18:52] expensing and the R&D investment to incentivize innovation will be another lasting legacies from [1:18:59] what we accomplished together over the course of last year. I'd like just to ask you open-ended [1:19:07] question around how passing that largest tax cut, or said another way, preventing the largest tax [1:19:13] increase in American history, why by making it permanent, is that making the American taxpayer better off? [1:19:22] Sir, I believe that, as you said, giving great certainty, whether it's to households, small business, [1:19:31] or large business, that provides for them to create capital stock, capital spending, and increase productivity. [1:19:41] And increased productivity is what leads to higher standards of living across the country. [1:19:47] The last question they have is on digital assets. Digital assets have moved from the margins now [1:19:57] more to the mainstream. It's been clear that our tax code hasn't kept up. We bear that responsibility [1:20:03] now to put a tax structure in place. I'm taking the lead here in the finance committee. As many in this [1:20:08] committee know, that's why we've been developing a framework that could give us clearer rules for [1:20:15] digital asset taxation. Following the past of the Genius Act, digital assets are becoming more [1:20:21] integrated in our financial system. And I believe we're going to play a growing role in our economy [1:20:26] and the potential to keep driving investment in the United States. Numbers speak for themselves. [1:20:31] The total crypto market cap reached $4 trillion for the first time in history. Stablecoin transaction [1:20:39] volume was $33 trillion, a 72% increase from 2024. The number of crypto mobile wallet users reached an [1:20:50] all-time high, up 20% from last year. I do believe it's important that we provide some clarity as [1:20:57] I like the tax code, and that's our responsibility here that I'm working on at the moment. [1:21:02] The time of the gentleman has expired. [1:21:04] Can I finish one final question, if I could? Secretary Besant, as the administration continues its [1:21:11] work in digital assets, will you commit to working with Congress on implementing digital asset taxation [1:21:21] legislation and anticipate that it very much be a two-way street? I will commit to that. And tax [1:21:26] certainty, as we've seen with every other industry, is the key to innovation. All right. Mr. Secretary, thank you. [1:21:32] The time of the gentleman has expired. The chairman's return. Senator Smith. [1:21:37] Thank you, Mr. Chair and Ranking Member, and welcome to the committee, Secretary Besant. So, [1:21:43] though I've not been in the room, we have this thing called closed-circuit television in the [1:21:46] Congress, so I've been able to watch the hearing in my office. And many of my colleagues have [1:21:54] tried to get at this so-called anti-weaponization fund that was created in a settlement with the [1:22:00] president after he sued his own IRS for $10 billion. That includes this provision that bars the IRS [1:22:07] from auditing or taking any enforcement action on any of the president's tax returns or those of his [1:22:14] family. And I understand you're ... I've heard you repeat many times that you cannot respond to this [1:22:19] because of ongoing litigation. And I want to just associate myself with the points that Senator Whitehouse [1:22:26] made, which is that I don't quite understand how we're able to do our oversight responsibilities [1:22:31] if we can't ask any questions when anything is even in the vicinity of ongoing litigation. So, [1:22:39] let me see if I can ask a question that I don't think has anything to do with the ongoing litigation. [1:22:44] And my first question is this, Secretary Besant, did Brian Morrissey, your former general counsel, [1:22:51] ever raise concerns over the establishment of the anti-weaponization fund before he left his position, [1:22:58] before he resigned? Again, that's attorney-client privilege, Senator. [1:23:03] Pardon me? That would have been a privilege conversation. [1:23:08] Well, let me ask this. Does Treasury agree with the Justice Department in thinking that the court decision [1:23:15] blocking payments out of the slush fund was incorrectly decided? Again, we do not have agency in this. [1:23:23] We defer the Department of Justice. The act is our attorneys and they represent us. So you should [1:23:33] refer any of those questions to Acting Attorney General Blanche. And okay, I'm going to come back to [1:23:38] that. But do you at least commit to following any and all court decisions regarding the establishment [1:23:43] or the administration of this slush fund? Do you see those court decisions as legitimate that you [1:23:48] would follow? We follow the law. You follow the law. So that would mean that you would follow a [1:23:53] court decision. You wouldn't have your own opinion about what the law is. You would follow the decision [1:23:58] of the court. Am I understanding you correctly? We will always follow the law. You'll follow the [1:24:04] decision of the court. We will follow the law. That's not what I'm saying. You know, Mr. Secretary, [1:24:08] you've said that Acting Attorney General Blanche is representing Treasury and the IRS here. Would [1:24:14] you have any? I mean, I'm wondering, Mr. Chair, if maybe the committee should call Acting Attorney [1:24:19] General Blanche to appear before our committee if Secretary Besson is unwilling to answer any questions [1:24:27] about the IRS, which as Catherine, my colleague, Senator Cortez Masto established as Secretary Besson is [1:24:34] overseeing. I don't expect a response to that, Mr. Chair, but I mean, I ask a question just reasonably. [1:24:40] How are we going to find answers to these questions if we can't get them from the Secretary? [1:24:47] Well, as the Secretary has said many times, the attorney-client privilege and the relationship [1:24:53] they have with Justice Department requires him not to answer the court. So, Senator, you asked if I would [1:24:57] follow the law on a court ruling. I am following the law here. Yeah, what I noted, Secretary Besson, [1:25:04] is you didn't say that you would follow the court and their interpretation of the law. You said you [1:25:08] would follow the law, which is different, as we know, with this administration. But I have just a few [1:25:13] minutes, a minute and a half left. I want to get, actually, to the farm economy. This is something that [1:25:18] you and I have discussed many times, starting when you first came into my office. You called yourself a [1:25:23] soybean farmer, though I think that Minnesota farmers would differentiate between [1:25:31] wealthy landowners who rent their land versus people who actually do the farming. [1:25:35] But I can tell you that in Minnesota, Mr. Secretary, a lot of farmers are really feeling the pain. [1:25:43] According to the Farm Bureau, farm bankruptcies were up almost 50 percent this last year. Minnesota [1:25:49] has the most farm bankruptcies in the country in the first quarter of 2026. And the Farm Bureau tells [1:25:57] us that six out of ten farmers are reporting declining financial situations. So it's rough out there. [1:26:05] Fertilizer prices are up. Diesel prices are up. Could you just explain to me and to farmers in Minnesota [1:26:14] how those increased prices driven by the war in Iran are worth the pain that they are feeling right now? [1:26:22] Senator, do you believe that Iran can have a nuclear weapon? [1:26:27] Mr. Secretary, this is my time to ask you the questions. How do you respond to Minnesota farmers [1:26:33] who cannot afford the fertilizer they need? Well, I think if you were to look in the dictionary, [1:26:40] the definition of a farmer is someone who owns a farm and farms the land. And so as a former farmer, [1:26:46] I will tell you that and maybe you know that 75 percent of the fertilizer had already been purchased [1:26:53] this year. That is not what my farmers in Minnesota are telling me, sir. They are telling me that they [1:26:58] cannot afford their fertilizer and they know the reason why. They know the reason. There is no doubt [1:27:03] that farmers have been struggling, but much of that that there was a record crop last year, [1:27:09] Senator. And what do record crops lead to? What my farmers are telling me? Lower prices. [1:27:16] So I'm sure I will take that back. I will take that back to my producers in Minnesota that they have [1:27:22] a they have somebody in this Department of Treasury, a former farmer who is feeling their pain. [1:27:29] Thank you. Senator Lankford. Sure. Thank you, Mr. Secretary. Thank you. You know, a year later, [1:27:37] after passing the Working Families Tax Cut Act, I have to tell you, it's been remarkable how fast [1:27:43] Treasury has moved on implementation in a lot of the areas. We worked a lot together on things like [1:27:49] full expensing and making that permanent and trying to be able to get that established long term. That [1:27:53] makes an enormous difference for our farmers and ranchers. They're trying to buy equipment right now [1:27:57] to be able to do the expensing. Commodity prices are down. Fertilizer prices are up. [1:28:03] But I would tell you, fertilizer prices started spiking under the Biden administration, not in the [1:28:09] past two weeks here and certainly not in the past two months. Gasoline prices now are what they were [1:28:15] during the Biden administration, the spike and there wasn't a war in Iran. And under the Biden [1:28:20] administration, we had nine percent inflation during that time period. So there's been tremendous amount [1:28:25] of growth in the economy here, which I appreciate your partnership on. We've also worked a lot on [1:28:30] the charitable donation side of things. And I appreciate the substantiation requirement [1:28:36] information that Treasury and IRS has put out that helps a lot of folks that are donating now to [1:28:41] nonprofits and the work that we've done together. There is still work to do on the donor advised funds. [1:28:47] There were some Biden administration regulations that came out that were directly targeted at the donor [1:28:53] advised funds that have caused real problems. Those are folks that are directly helping nonprofits and [1:29:00] charities all over the country on it. But they're feeling some real pain from some additional changes [1:29:05] in regulation. So I know this administration has been very aggressive at reviewing regulations and [1:29:11] looking at it. I would only ask you to review as well the Biden administration regulations on donor advised [1:29:17] funds because that's directly taking money away from people that need it the most [1:29:21] and folks that want to be able to help. Senator, I will be happy to instruct our office of tax policy [1:29:26] to work with you and your staff on this. I know it's an important issue for you. Yes, thank you. [1:29:31] I look forward to that cooperation together just to be able to look at it to be able to make sure the [1:29:34] regulations work for every American. I want to talk a little bit about what you've done so far on the [1:29:40] sanctions on drug smuggling and specifically targeting all these cartels that are in Mexico and in [1:29:48] Central America and South America and trying to be able to go after that. You've seen some progress. [1:29:52] Some new techniques have been done to be able to target individuals and entities to try to limit the [1:29:58] amount of smuggling. I want to just get an update from you. Dollars have been allocated. You've asked for [1:30:03] additional dollars directly related to terrorism and drug smuggling cartels. This is a budget hearing. [1:30:10] What's happened so far? Have those budget dollars previously been used? What are you asking for additional [1:30:14] dollars for in that? So, Senator, we have designated the Mexican cartels as foreign terrorist [1:30:21] organizations. We have also put it in effect on the U.S.-Mexican border in certain counties, [1:30:27] what are called geographical targeting orders, so that we can better identify problems in our banking [1:30:35] system and money that is being laundered through sooner. And this is a combination through FinCEN, [1:30:41] the Financial Crimes Enforcement Network and OFAC. So, if we use FinCEN to follow the money, [1:30:51] and then OFAC has been used to sanction. We sanctioned about this time last year two Mexican [1:30:57] financial institutions that were riddled with drug money. So, you're doing the same thing to a lot of [1:31:04] these, the shadow fleet that's out there moving Iranian oil and others as well. Give me an update on [1:31:10] success dealing with that targeting specific sanctions on Iranian illicit movement of oil [1:31:17] and other goods that they're trying to be able to move. [1:31:19] So, operation, we began with a maximum campaign pressure in March of 2025. We have continued that [1:31:30] and approximately seven or eight weeks ago, the president instructed me to take it up to maximum. [1:31:36] We call it Operation Economic Fury. And the Iranians, one of the many mistakes they have made, [1:31:45] was targeting with missiles their Gulf neighbors. We have good partners in the Gulf, but many of them [1:31:51] were not completely transparent with us what may or may not have been going on in their banking system. And [1:31:56] we have achieved a much greater level of transparency. And we have seized a substantial amount of crypto [1:32:03] assets. We have sanctioned ships. And in fact, the Navy has seized some of these ships. And we are [1:32:12] tracking mostly the IRGC funds. And we are freezing those for the day that they can be given back to the [1:32:19] Iranian people. Okay, I look forward to that. I know just got a few seconds left. In Oklahoma, we had a [1:32:25] massive influx of Chinese illegal aliens had moved into our state, set up illegal grow operations for [1:32:31] marijuana and started shipping it literally all over the country. It was a tragic thing to be able to [1:32:38] watch what happened to the human trafficking, the labor trafficking, trafficking, the sex trafficking [1:32:42] that these Chinese individuals were doing into my state, not only trying to be able to purchase land [1:32:48] and to be able to set up this operation. I want to be able to follow up with your team on just ways [1:32:53] that we can work on following the money of illegal Chinese money coming in to buy American farmland and [1:32:59] also try to be able to control some operational locations near some of our sensitive sites and [1:33:05] what you're doing there. I know you're doing a significant amount of sanctions on drug issues [1:33:09] and such, but want to be able to just follow up on that. We look forward to working with you on that, [1:33:13] Senator. Thank you. Thank you, Senator Warren. Thank you, Mr. Chairman. So Secretary Besson, [1:33:18] let's start with something you and I agree strongly on. Last year, you came out in support of a trading [1:33:25] ban for members of Congress and I have introduced legislation to do exactly that. You explain the [1:33:33] need for a ban on our trading stock by saying, quote, you look at some of these eye-popping returns, [1:33:41] every hedge fund would be jealous of them and that, quote, if any private citizen traded that way, [1:33:48] the SEC would be knocking on their door. Those are strong words from someone who used to run a hedge fund. [1:33:56] Last month, President Trump's latest financial disclosures came out and they show that he made [1:34:02] more than 3,400 stock trades worth more than a quarter of a billion dollars in just the first [1:34:11] three months of 2026. That's roughly half of what all 535 members of Congress made last year combined. [1:34:21] And the value of virtually every one of those stocks that the president traded in is directly affected [1:34:29] by President Trump's official actions. So Secretary Besson, you and I agree that it is a conflict of [1:34:35] interest for members of Congress to trade stocks. Do you also agree that it's conflict of interest for [1:34:43] President Trump to trade stocks or President Trump to trade stocks? Well, a couple of things, [1:34:47] Senator. One, President Trump is not sitting in the Oval Office engaging in a high-frequency trading [1:34:53] strategy. Clearly, he had an outside manager who was doing that. And I think it's incumbent upon both [1:35:03] houses of Congress to get their house in order before you move to the administration. Before you [1:35:09] think it's okay for the president to do this? Because let's be clear, you are a Wall Street guy, [1:35:14] so you know better. The investments that the Trump, that President Trump has made are not blind. [1:35:21] President Trump literally signed the 113-page document publicly listing all of his individual [1:35:30] stock trades at the same time that he is making decisions affecting those stocks. So you're going [1:35:35] to sit here with straight face and say it's not a conflict of interest for the president of the United [1:35:39] States to do that? I'm going to say this body needs to get its house in order first. How about we get [1:35:45] the White House in order at the same time? I would encourage you to do that. I don't trade in [1:35:50] individual stocks. I don't own any individual stocks. My house is in order. Thank you, [1:35:54] Senator. You're very rich. Mr. Secretary. Others on this committee can't say that, Senator. [1:35:59] Let's look at some individual trades. On January 6th, Donald Trump purchased up to a million [1:36:05] dollars worth of NVIDIA stock. One week later, his administration changed U.S. policy and loosened [1:36:13] the rules on export controls so that NVIDIA could sell its chips to China. Now the price of NVIDIA [1:36:20] stock is through the roof. So Secretary Bessett, you said last year if any private citizen traded the way [1:36:28] members of Congress do, quote, the SEC would be knocking on their door. So my question is, [1:36:34] should the SEC be knocking on President Trump's door to start an investigation over this trade? [1:36:41] Again, if this body wants to ban individual stock trading, which I would advocate for yourself, [1:36:48] start there. And if you want legislative action to continue, that's your prerogative. [1:36:54] So it's our prerogative. So you would support our saying that President Trump should be [1:36:58] investigated over this? Our trade should be investigated and President Trump should be [1:37:04] investigated. I would support you getting your house in order, Senator. And how about the White [1:37:08] House getting its house in order? Would you support that investigation? Please lead by example. [1:37:14] I would like to see the President of the United States lead by example. You say there should be an [1:37:20] investigation when that kind of activity takes place. How about we start with the White House? [1:37:24] Well, you create statute. The President does not. President Trump bought tens of thousands of [1:37:29] dollars worth of stock in Robin Hood and the Bank of New York Mellon Corporation, known as BNY. [1:37:35] On April 6th, your Treasury Department announced it had chosen the financial agent to implement the new [1:37:42] Trump Accounts Program, BNY and its partner, Robin Hood. Both stocks, of course, have risen since then. [1:37:50] So, Secretary Bessett, let me ask you a different question. If these stock purchases that Trump made [1:37:56] were made using inside information, would that be illegal? Again, I'm not a lawyer. I'm not going to [1:38:03] speak to that. Would it be worth investigating? You don't have to be a lawyer. You're the one who said [1:38:11] what should be investigated. Why don't we investigate many people in this committee, [1:38:14] Senator? Many people. Why don't we start here? And you don't think the White House should have [1:38:18] to follow the same set of rules that are already the law. I think you should get your house in order [1:38:24] here. My house is in order. Thank you, Mr. Secretary. And you should have your fellow [1:38:28] committee members, mostly on your side of the aisle, do the same. We need stronger anti-corruption [1:38:34] rules and conflict of interest rules in Washington for everyone. And that includes the President, [1:38:40] and it includes Congress. And instead of draining the swamp, what Donald Trump is doing is he is [1:38:46] enriching himself by taking advantage of his position. That is not public service. He's the [1:38:53] one who should lead by example. Senator Brassel. Thanks, Michelle. Well, talking about draining [1:38:59] the swamp, look, I appreciate what you're doing, Mr. Secretary, because you inherited a very troubling [1:39:05] record of misconduct in terms of the IRS politicization. And you moved quickly. You championed [1:39:12] the efforts to turn that around. We saw under the Obama administration, the IRS spent years [1:39:18] systematically targeting conservative nonprofit groups, Tea Party groups, faith-based organization, [1:39:23] Christians, conservatives. The Biden administration and their IRS continued that same pattern. [1:39:28] I think a recent Department of Justice report noted the Biden IRS investigated churches [1:39:33] based on what their pastors preached. We can go on and on about the Bible teachings [1:39:39] that were typically affiliated with Republican Party. Those were being attacked by previous [1:39:44] administrations. So this wasn't to me tax administration. This was government intimidation. [1:39:49] The American people aren't standing for it. Can you tell us what the Treasury Department has done to [1:39:53] ensure that something like this, that these targeting by the previous administration and the Obama [1:39:57] administration as well, that these these persecutions are going to stop? [1:40:01] Senator, thank you for the question. We are working to ensure that this will never happen again. [1:40:08] It never happened again. It was an egregious example by the Biden administration, [1:40:13] by the Biden Justice Department, by the Biden IRS, and back to other IRS, the Obama IRS. [1:40:21] There was a famous case with that. And we are we have made it clear that 6103, which is taxpayer privacy, [1:40:33] must be adhered to. Thanks. I want to talk about the tax cuts we were able to pass last year. And you [1:40:39] were so helpful in our efforts to get the working families tax cuts bill passed. We see now with the tax returns [1:40:45] this year over 60 million Americans have claimed at least one of these Republican new tax cuts, neither no tax on tips, [1:40:52] no tax on overtime, the senior deduction, refunds are up, paychecks are bigger. I think it's important for families to know all of the things that are in this legislation. [1:41:02] You and I have talked about, but I continue to travel as to other members around our home states and some people aren't aware of on many of the things that are advantaged here. [1:41:09] How is the Treasury Department ensuring that families across the country can access everything that this law has to offer them? [1:41:15] Sir, we I have traveled across the country, as many people on my staff, we push out to members on both sides, [1:41:27] the benefits and the the breadth and depth of the tax bill, which was passed July 4th. And every we were on a [1:41:39] what I would call a carousel of pushing out the most important parts of the tax bill. For instance, [1:41:46] on the school choice, we are working actively with states, red states and and blue states to make sure [1:41:53] that dollars can go into those states, either for public, private or additional tutoring. [1:41:59] I want to ask about an issue of retirement security, because about 50 million Americans have no access to a workplace [1:42:05] retirement plan. And in Wyoming, that's about 65,000 independent truckers, contractors, ranchers, [1:42:11] other self-employed individuals, as we see all across the country. President Trump recently signed [1:42:16] an executive order to try to change that in an order. It directs you and the Treasury to provide workers [1:42:22] with access to low cost retirement plans with matching federal contributions. Under your leadership, [1:42:28] Treasury is working on legislative recommendations to build on this framework to help these these [1:42:33] individuals. What's your vision for helping closing that retirement coverage gap? [1:42:37] We think that these IRAs for independent workers are very important. We are working to finish our [1:42:46] guidance on the Trump accounts to get those up and running July 4th. Then we will be all hands on deck [1:42:51] for this. And as you as you said, we can see that the anxiety level for Americans in terms of retirement [1:43:00] that has never been higher. Social Security is the building blocks for that. And we are working to [1:43:07] supplement that. And then a final question. And it's it's the continuing the economic pressure [1:43:13] on Iran. The president talks about maximum pressure. How does your budget help ensure that Treasury has the [1:43:19] the tools that you need to keep that economic pressure? That we have a dedicated dedicated staff [1:43:25] that has done a fantastic job of outlining the black market and the flow of Iranian, the oil and energy [1:43:36] around the globe. We have frozen assets. We are holding those and we have severely disrupted the [1:43:44] Iranian economy and the Iranian war machine. We think that inflation may be over 200 percent. [1:43:49] Their currency has collapsed. We believe that more than 50 percent of the army is not getting paid [1:43:55] and the police are not reporting to the police station. Thank you. Thank you, Mr. Chairman. [1:44:01] Thank you. Senator Lujan. Thank you, Mr. Chairman. Secretary Besant, should Americans who illegally [1:44:07] evade their taxes be investigated and prosecuted? Yes. Secretary Besant, should people and organizations [1:44:18] facilitating money laundering for Iran, North Korea or Hamas be prosecuted? Yes. What about laundering [1:44:26] money for Mexican drug cartels? Yes. Should a person who traded and profited on insider information be [1:44:34] prosecuted? According to the law, they should. Appreciate that. Mr. Secretary, as a result, [1:44:40] the President Trump's $10 billion lawsuit, the Department of Justice on behalf of your department [1:44:47] settled with President Trump by creating a $1.776 billion slush fund to pay for his supporters and [1:44:53] criminals. Were you either directly or through your staff asked to sign the original agreement? [1:45:00] Again, Senator, you were not here at the early part of the meeting. I saw you on TV. Well, [1:45:04] congratulations. And you would know that I'm unable to answer those questions and they should be [1:45:08] referred to Attorney General Blanche. Mr. Secretary, what about the addendum to this agreement? Are [1:45:12] you familiar with what the addendum is? I'm not sure what you're referring to. Are you familiar with [1:45:17] this giveaway from the IRS that says President Trump and anyone that knows him or does business with [1:45:22] them or part of a business, they get off scot-free? Are you aware of this? Again, I refer you to [1:45:29] Attorney General Blanche. Are you Attorney General Blanche's client? The IRS and Treasury are a client of the [1:45:38] Department of Justice. So is that a nice way of saying yes? You're a client. He's your lawyer. [1:45:45] He represents... You're the Secretary. Are you the Secretary of Treasury? Yes is the answer. [1:45:51] The Department of Justice... Scott Descent, let me ask you this question, sir. Are you the Secretary... [1:45:57] In my personal capacity, Tom Blanche is not my attorney. Correct, sir. [1:46:00] For the U.S. Treasury... Mr. Secretary... Scott, let me ask it this way. Scott, are you the Secretary [1:46:08] of Treasury for the United States Government? Yes. Appreciate that. The Department of Justice [1:46:13] represents the IRS and the Department of Treasury in this lawsuit, correct? Correct. [1:46:17] Are you aware of this addendum? You're telling me DOJ gave the President this without you knowing about it? [1:46:25] Again, they settle on our behalf. All right. That's not how the law works, sir. I'm not a lawyer, [1:46:30] but you have a bunch of them behind you. You should see the faces they're making at me behind you. They're [1:46:34] all scowling at me back over here. Well, I think that's a different reason, sir. Well, for whatever [1:46:39] it is, they're doing it. Mr. Secretary, my concern is that this addendum's not been getting a lot of [1:46:46] attention. There's colleagues on this panel that think this slush fund is a bunch of bullshit, [1:46:52] and they've called out to say get rid of it. Now, people need to say, are you okay with one person [1:46:57] in America because the Secretary of Treasury, I'm guessing, conferred with the Department of Justice [1:47:05] because you're named on this lawsuit, sir. These are all the transactions from the President as [1:47:10] well that I'm going to ask you this next question as well. You were bragging to one of my colleagues [1:47:15] that you've been sanctioning people doing bad things in America. People that get sanctioned, [1:47:20] like Iran or terrorists, they're told not to do business in the United States with partners. [1:47:26] Is that your understanding, sir? Me as a layman? It is. You hold these bad people accountable. [1:47:31] I congratulate you for that. So this little giveaway to President Trump and his family [1:47:37] gets them off scot-free. Does every American become part of this addendum? If someone didn't [1:47:47] pay their taxes or violated tax law or did bad things, are they told, can't prosecute you, [1:47:52] you're good? Everyone going back to the date of this or is this only for President Trump and his [1:47:56] affiliates? Senator, do you have specific knowledge that President Trump's being audited? Sir, I have [1:48:02] specific knowledge of this addendum that you don't know a damn thing about that is for the Department [1:48:06] of Treasury that your lawyer at the Department of Justice signed you up for. The reason I'm asking [1:48:13] this question is because President Trump's sons signed a deal, as you know, with World Liberty Financial [1:48:25] with a bunch of folks you sanctioned. And now, as part of this, there's an addendum that says [1:48:32] President Trump and his kids and anyone affiliated with him, I don't know if it's current wives, [1:48:38] former wives, people that just did transactions with him, they're off scot-free. That, you know, [1:48:44] that has a new way, a new ring to it. This is scot-free because the Department of Treasury and the IRS [1:48:50] is not going to go after him, sir. This is wrong. This is lawless. I hope our colleagues will look at this [1:48:55] addendum. If I could offer this into the record, Mr. Chairman, for those that haven't seen it yet. [1:48:59] Without objection. Come on, man. There's a better way of doing this, sir. That's all we're saying here. [1:49:06] So, look, I appreciate it if you don't want to talk about a lawsuit. That's your prerogative to answer [1:49:10] that way. But to say that you as a client, as Secretary of the U.S. Treasury, does not know what [1:49:17] the Department of Justice is giving away to people. Come on, man. That's just not on the up and up, sir. [1:49:22] I hope we can do better. Sir, you don't understand the way the protocol works. And we, [1:49:27] the, we receive advice and accept their settlement. You're telling me as the Secretary of U.S. Treasury, [1:49:34] you don't know that the President of the United States, who I think you work for, [1:49:39] got a sweetheart deal from the Department of Justice, who's your lawyer. I do know. You're in [1:49:44] line for the presidency, Scott. I do know that the President of the United States and 400, [1:49:48] many of his employees have the largest tax leak in history. And I know here's his filing [1:49:54] shirt of all the insider trading right here. Do you want to apologize on behalf of the American [1:49:58] government? Scott, you should apologize to the American people for fleecing them and giving this [1:50:02] away to Donald Trump, man. That's what you should do. We can agree to disagree. Senator Warnock. [1:50:08] That we'll agree on. Thank you, Brother Chairman. Last month, I asked the President's nominee [1:50:20] to lead the Federal Reserve what I thought was a simple question, but he tried to dodge it. [1:50:28] His answer was cute. I'm not sure the American people who are struggling were laughing. So I'll [1:50:33] ask you the same question and see if I can get a clearer answer. President Trump has said that his [1:50:38] grade of the economy, his words, is a quote, plus, plus, plus, plus, plus. He said this before he sent [1:50:49] energy and gas prices soaring with this illegal war in Iran, a war that's costing taxpayers billions [1:50:58] of dollars, a billion dollars or more per day turbo turbo charging inflation. So I'll ask the [1:51:04] Secretary of the Treasury the same question. Given all of the challenges facing ordinary Americans, [1:51:11] our political differences aside, what grade would you give the U.S. economy right now? [1:51:17] Which challenges other than temporarily elevated prices would you identify, Senator? [1:51:24] I'm asking you, what grade would you give the economy? I think we have the makings of one of [1:51:29] the strongest economies in history. We've had 2.6 percent growth and core inflation had dropped. [1:51:37] Food inflation, since President Trump began, as much as you all want to disagree, is 2.5 percent. [1:51:44] So you agree with the president? You would give the economy a plus, plus, plus, plus, plus? [1:51:50] I think we have all from where you sit. I think we have all the makings for a very strong economy. [1:51:54] I think that we have temporary elevated prices that will come back down. [1:52:01] I got it. So you're telling Americans it's not so bad. Americans give the Trump economy [1:52:08] a failing grade. You and I can disagree, but this is not about us. They give the economy a failing grade [1:52:16] because they can't afford anything. Folks back at home at Georgia, whom I represent, are struggling. [1:52:23] Let me finish to just make their lives work. And they know President Trump's Iran war and the tariff [1:52:30] taxes are only making things worse. Talk to farmers in Georgia. They'll tell you that. But I'm not so [1:52:37] sure folks fully grasp the long term crisis that's also brewing for our children and our grandchildren. [1:52:45] Wars do not pay for themselves. And this year, under the Trump administration's economic policies, [1:52:53] the 31 trillion dollar national debt exceeded GDP for basically the first time since World War II. [1:53:03] Think about that now. To be fair, debt did exceed GDP during the COVID-19 pandemic, but that was only [1:53:11] briefly as GDP crashed as a result of a once in a century pandemic. The big, ugly bill alone will [1:53:21] add nearly five trillion dollars to the national debt, something that I do care about. And I think [1:53:29] it matters. I think it's interesting that Republicans talk about it when Democrats are in charge. But I [1:53:34] haven't heard much discussion about the national debt lately. According to our nonpartisan scorekeepers [1:53:40] in the Congressional Budget Office, it will add five trillion dollars to national debt. Do you still [1:53:44] think that driving deeper into debt to extend billionaire tax cuts were a good investment? [1:53:50] Sir, that 90 percent of the filers who availed themselves on President Trump's signature policies [1:53:58] make below $100,000. And if you want to know who is responsible for the American people, [1:54:04] you all towards them during the Biden administration. I'm not sure if you were part of that, but we had 21.5 percent. [1:54:10] Look, Joe Biden has been out of office two years and the fact that you all keep talking about it tells you everything. [1:54:16] We had real negative wage growth. Sir, I'm asking you a basic question. [1:54:21] Do you think that going into debt to extend billionaire tax cuts was a good investment? Yes or no? [1:54:27] I disagree with the categorization of billionaire tax cuts when in fact most of the tax cuts went to [1:54:32] working. All of those went to working Americans, according to the according, according Senator, [1:54:38] you are quoting the Congressional Budget Office, which according to the Yale Budget Office, the Yale [1:54:45] Budget Lab. The Yale Budget Lab is a bunch of Biden hats. Oh yeah, okay. Well, you should talk to the [1:54:51] people in Georgia. They will tell you, sir, that whatever tax relief you think you gave them [1:54:58] was more than taken up by these tariffs. They they they according to according to the Yale Budget [1:55:06] Lab, the administration's tariffs cost families three times as much as they got back in tax cuts. [1:55:11] But I don't have to talk to folks at Yale. I talk to the folks in Georgia. How about the Iran war, [1:55:16] which is costing tens of billions of dollars and counting? You previously said we have plenty of [1:55:20] money for the war. Wars increase in national debt. Is that spending still a good idea, sir? Yes or no? [1:55:25] Sir, do you think it's a good idea to spend so that Iran cannot have a nuclear weapon? Sir, I'm not, [1:55:31] sir, sir, do you think it's a good, so you do think it's a good idea? I think preventing, you think [1:55:37] the Iran war makes. I think just as many people historically, when President Obama was in office [1:55:42] said that Iran may not have a nuclear weapon. President Obama left office in 2016, sir. I know, [1:55:47] but I'm saying there are many people on this committee who said Iran should never have a nuclear [1:55:52] weapon at any cost. I agree with that. They should not have a nuclear weapon, and they're closer, [1:55:57] thanks to this administration's policy. Absolutely not, sir. And the Strait of Hormuz [1:56:03] is still closed. And you should tell the people in Georgia that this war is a good idea. I think [1:56:08] they'll disagree. Senator Cassidy. Hey, Secretary Besson. Thanks for being here, sir. We know Social [1:56:15] Security has gone insolvent in six years. Ask your predecessor in Trump I, what was the plan to do about [1:56:20] it? And he said that would be a second Trump administration deal. Now we're in the first half [1:56:26] of the president's second term. And obviously, we're now only six years away. At that time, [1:56:32] we were like 12 years away from insolvency. Social Security will account for 20 percent of federal [1:56:40] expenditures. And I was told once that it accounts for 20 percent of our long-term accrued liability, [1:56:45] uh, accrued debt. Um, what's the president's plan to address Social Security insolvency? Sir, [1:56:55] we have to get our short-term house in order first. We inherited a mess, 6.9 percent. If I may, [1:57:01] if I interrupt, I don't mean to be rude. If we wait to get our short-term house in order, [1:57:07] we will be three years away from insolvency. I've been working on this. It is amazing, [1:57:13] since I've been working on this over the last five years, it is amazing how much it's already [1:57:17] deteriorated. It's just amazing. Uh, in five years, it's gotten so worse. Are we really going to wait [1:57:27] until we get, I'm not challenging, I'm just asking, are we really going to wait until we're not going [1:57:33] to do anything? I'm just not sure about that. Senator, you've got to crawl, walk, run that the, [1:57:41] we, with these deficits, with this debt that was run up in the previous administration with 6.9 percent [1:57:47] deficit to GDP. But, but, but, but highest ever, when we weren't in war, weren't, weren't in recession, [1:57:53] we brought it down to 5.4. If I may, if I may, the, the Social Security Trust Fund is funded by the [1:58:00] Social Security Tax, which is segregated from general revenue. Now, if we speak about the debt and [1:58:08] deficit, whatever the, I'm not, I'm not touching that right now, except in so far as context, we have [1:58:13] to do something. That is general revenue, but wherever that comes from. If we're speaking about [1:58:17] social, that is segregated. That is a Social Security revenue problem and expenditure issue. [1:58:25] Um, so to me, that's segregated again. So is there a plan to do anything about the segregated fund with [1:58:32] the segregated revenue stream and a segregated expenditure pattern? Well, Senator Park, part of [1:58:37] it is, it's the revenues aren't, the, the source of the revenue is not segregated because the more [1:58:42] Americans who work, the more, the higher paying jobs they have, the more it goes into Social Security [1:58:48] Trust Fund. I accept that, but that's an indirect effect. And is that the only plan the administration [1:58:53] has currently to hopefully increase the number of jobs and the better paying jobs and, and hope that [1:58:58] that, because I've, I've run, I got a big spreadsheet on this. That is inadequate to address the problem. [1:59:03] Um, uh, every day, 10,000 boomers become eligible for social and the drain on this is just incredible. [1:59:12] It's just going down. That will not solve the problem. And again, I don't mean to be at all [1:59:18] confrontative. I'm just trying to set the context. I remember my first visit to your office, [1:59:22] you were kind enough to share the spreadsheet on a screen with me. Yeah. So, so, so I'm gathering [1:59:31] that the administration does not have a plan to address it. I'm saying that not in any way, [1:59:35] except to say by your answers that the only response so far would be the indirect spot, [1:59:40] indirect side of it. Um, now on a bipartisan basis, we have been working on something [1:59:47] that would attempt to address this. It is going to take the president, the administration at some [1:59:54] point being involved. At this point, it's, it's in Congress. Um, it involves creating an investment [2:00:00] fund, much as we have already done with the federal railroad retirement system, [2:00:04] a plan that Senator Wyden voted for when he was in the House of Representatives that took the federal [2:00:09] railroad retirement system from going insolvent. And now it's paying benefits with fewer workers and [2:00:15] more retirees and doing extremely well. It's also based upon what the Canadians have done with their [2:00:20] Canadian pension fund, which was also going insolvent. And they've been able to address that. [2:00:24] Can you, knowing that you'd have to vet it, but would the administration conceptually be okay [2:00:30] working with Congress to find a solution such as this? Uh, uh, again, Senator, uh, we, we will work [2:00:37] on anything, but we are going to guarantee that the benefits, uh, remain as they are. I accept that. [2:00:45] So in our plan, the senior citizen does not pay more taxes and the senior citizen does not get less [2:00:49] benefits. And so we, but we do find a way, um, that, that again, patterned after something that [2:00:55] Senator Wyden has previously supported on the federal railroad retirement system. And I mentioned [2:01:00] Senator Wyden, because by the way, he's a ranking member on the committee, um, patterned after that, [2:01:04] that has worked so successfully. Um, so, but we don't cut benefits and we don't raise taxes for seniors. [2:01:11] So if that's the criteria, I think, and hopefully we can get your support as we in Congress attempt to [2:01:15] work on this. Thank you, sir. Thank you, Senator. Thank, thank my colleague. Next up is Senator [2:01:21] Blackburn. Thank you, Mr. Chairman. And, um, Secretary, thank you for being here. I wish that everyone [2:01:31] on this panel would have seen your speech at the Reagan Library on Friday. I think it would have answered [2:01:39] a lot of questions and it lays out your vision for where you think we can, we can head economically. [2:01:48] Well, Senator, I think it was a very important economic speech, but the mainstream media preferred [2:01:52] to report on the $250 bill. So they're not serious people. Well, um, there are a lot of odd, um, [2:02:02] perceptions floating around. I want to talk a little bit about the working families tax cuts, [2:02:08] because that is something we have all heard from, uh, the people we represent. I've heard from so many [2:02:16] Tennesseans about this and getting those bigger returns, having lower tax bills that has, that is [2:02:28] something that has made a difference. And in particular, of course, the enhanced deduction for seniors, [2:02:37] that's that's a provision that I had pushed and having that $6,000 enhanced deduction, I think was [2:02:46] taken by 35 million Americans. And I think nearly 70% of them had incomes lower than $100,000. Is that [2:02:59] accurate? Yes, Senator. And 95% of them had incomes under $200,000. And that is something that is putting [2:03:08] money in the pocket of hardworking Americans and seniors who have saved all their life to be able to [2:03:18] retire. I think it gives them great certainty. It gives them the great clarity in terms of the folks who do [2:03:27] live there on a fixed income. Well, we certainly have gotten a lot of positive feedback on that. And [2:03:38] we look forward to seeing that continue. I do want to talk with you about penny production that ended last [2:03:45] year. And of course, we have a company artisan in Tennessee that made the pennies. And now they are, [2:03:53] and you had talked about keeping those jobs in Tennessee. And artisan is working on a zinc based [2:04:02] nickel that would save the taxpayer about $140 million a year. Because right now, the nickel takes 13.3 [2:04:12] cents to make. And there's legislation that is moving forward, the Common Sense Act, that would allow [2:04:20] our Treasury to use zinc for the nickel. And what I'd like to know is if the leadership at the Mint [2:04:30] is making certain that they're doing the technical work in anticipation of this legislation passing [2:04:40] that would allow the use of zinc for the nickel. Yes, they have begun preparation on that. And we look [2:04:49] forward to working with you and to making sure that there is a smooth transition. Thank you. I appreciate [2:04:55] that. I also want to talk about the R&D tax credit. And I have talked with Mr. Bisignano about this issue. [2:05:04] Also, I've heard from a lot of our manufacturers in Tennessee, and they have continued to raise with me [2:05:14] some misalignment that they see in this legislation. R&D, the way this tax credit is working, it does not [2:05:25] allow manufacturers to do shop floor R&D. And it does not allow them to deduct the expense of the products [2:05:38] that they are using in shop floor R&D. And we know that China is incenting R&D. And we have a lot of manufacturers [2:05:50] and people that are trying to bring business back. And they're doing this R&D work in their plants. So I would hope [2:06:00] that you and Mr. Bisignano can work together and get some clarity and provide some certainty for our [2:06:09] manufacturers. And be certain that these individuals can utilize that R&D tax credit. Will you do that? [2:06:20] I would be glad to work with you and your staff. As I said at the Reagan Library, I believe that [2:06:26] at one level we've lost the reservoir of knowledge by not doing this production. And I did a fireside [2:06:34] chat last night for a group called American Compass. And I said the same thing, that somehow we separated [2:06:40] R&D from the learning that goes on on the factory floor. And I think that that is a big mistake because [2:06:49] so much happens during the process in terms of innovation. Thank you for that. And I appreciate [2:06:56] your attention to it. I'm going to submit for the record one question to you on partnership audits [2:07:03] that needs some further attention. Thank you for being with us. Good to see you. Thank you, [2:07:10] Senator Blackburn. Senator Welch. Thank you very much, Mr. Secretary. I heard your comments earlier [2:07:17] when I was watching and I support Opportunity Zones. They've been helpful to Vermont. [2:07:22] But number two, I want to talk about what I think is a looming crisis that gets far too little [2:07:29] attention in this Congress. And that's the national debt. And I know you're familiar with this. I'm just [2:07:36] going to show the chart for others. The projection of the debt, first of all, January of 2025, [2:07:44] it was $36.2 trillion. It's now $39.2 trillion. And as you can see in this chart, the trajectory of [2:07:54] this debt is just going up and up and up. And the CBO right now says that debt held by the public is [2:08:04] 99% of the gross domestic product is scheduled to go up by 2030 to 120%. And we're now paying interest, [2:08:18] as you know, probably better than anybody of $970 billion. So taxpayer revenues are going $970 billion [2:08:27] to debt that exceeds our military budget. And obviously means that we can't spend it on other [2:08:34] things that folks in Mr. Crapo's district and folks in my district need. The federal interest payments [2:08:42] rose to 18.5% of all of our revenues. And the CBO says that's going to go up to 25.8% [2:08:52] by 2036. And we don't talk about it at all. It's not even a topic, which is astonishing to me because [2:09:02] it's such a threat. Now, there's three ways to address debt. One is we can cut spending. One is we [2:09:10] can raise revenues. And I don't want to talk about those two today. But there's one other where there, [2:09:16] I think, should be consensus. And that is we can collect the revenues that taxpayers owe. And that's [2:09:25] why I want to talk to you a little bit about the staffing cuts that I understand have taken place [2:09:31] at the IRS, which has reduced their capacity to collect revenues that are owed by taxpayers. [2:09:39] In fiscal year 2027, the IRS enforcement funding was cut by 18%, 28% or pardon me, 2800 staff positions [2:09:51] were reduced. And that's in addition to 26% of revenue agents lost in 2025. And I've got a revenue [2:10:00] chart here. And that was this was prepared by the Peterson Foundation. And I find them to be extremely [2:10:08] credible on debt issues. I don't know if you share my high opinion of not anymore. Well, I think they've [2:10:18] lost their way. Well, all right, we will disagree on that. I find them to be an extremely credible source. [2:10:24] But what this chart shows is that as you in as we increase the cutting of revenue agents, the loss of [2:10:36] owed revenue. This is owed revenue. We're not talking about increasing anybody's taxes. [2:10:42] You're talking about the tax gap. That's right. The tax gap is going to be $1.8 trillion. [2:10:48] So the obvious question here is why are we cutting the people who we need in the IRS to do the audits to [2:10:58] collect revenues that are due to the Treasury? Well, Senator, a couple of things. Let's backtrack to your [2:11:04] previous chart. The Peterson Institute's CBO project that we were going to grow at 1.8 percent. Thus [2:11:11] far, in this administration, we've grown at 2.2. Let me interrupt a minute. It's 1.8 forever. [2:11:18] We've grown at 2.6 percent. No, you're interested. Let me just stay on the revenue because whether we [2:11:23] grow at 1.8, as they say, or 2.8, whatever it is you say, you would agree with me that if I'm a taxpayer [2:11:30] and I owe money, I should pay it. And I can tell you that more bodies does not equal better collections. [2:11:37] So you just disagree. Here, let me read you something. So I think that you, they would agree, [2:11:45] TIGTA, which is the IRS, the internal reporting system, all of these employees who were hired, [2:11:55] that a whistleblower in Atlanta came out and said, a 25-year IRS CI employee who trained 2,700 new [2:12:03] IRS agents for the program. I'm going to have to interrupt because my time is running out. [2:12:07] I'll be happy to send this to you. Please do. [2:12:09] To show you why it's a complete fallacy. Last year, we had recoveries up, collections up. [2:12:14] Can I just get a little extra time? Thank you, Mr. Secretary. 30 seconds. [2:12:19] Number one, I absolutely believe that the people who owe money should be paying that money and that [2:12:25] we should have assertive enforcement in order to get that collected, regardless of what the growth [2:12:31] rate is. That's number one. Number two, one of the things that is happening is we've withdrawn from [2:12:38] the global effort for coordinated organization for economic cooperation and companies are now using [2:12:45] these low-tax dodge countries. American Express avoided $423 million in taxes by using the island of [2:12:53] Jersey, saying that's where they do their work. Black & Decker cut their bill by $27 million by using [2:12:59] Cyprus. Many companies use Malta. S&P Global cut its tax bill by $269 million. Is that something that we [2:13:12] should tolerate? No. Thank you. And will you do something about it? Again, it's a complicated [2:13:23] question, and I'm happy to come to your office, happy to do another phone call as we've done. All right. [2:13:29] I will follow up on that. But I do want to send this TIGTA report that shows that new agents were a disaster. [2:13:37] Senator Tillis. Thank you, Mr. Chairman. Treasurer, thank you for being here. You know, [2:13:42] you may have heard I've been a little bit critical of a few of the advisors of the president. You're [2:13:48] certainly not one of them. I'm glad you're there. I'm looking to stay on that side of the line, [2:13:52] Senator. I appreciate the work you're doing, and I love the fact that you show good judgment of [2:13:59] loving some of the North Carolina mountains with your family just like I do. So thank you for being [2:14:05] here. I do have one awkward question to ask you real quick, and then I want to get to [2:14:09] some of the trends and how you're going to work on them. Did you actually tell [2:14:17] Pulte you were going to punch him in the face? No, sir. I actually said I was going to kick his ass. [2:14:23] Good. Okay. Good. I share the emotion. Thank you. And as I said, that was last summer, [2:14:30] summer of 25, and many teams have fights in the locker room and then go out and win for the team on [2:14:37] the field. Yeah. No, I was just curious because everybody's going to be showing that. I made it [2:14:42] clear I'm not going to support Pulte for DNI, but I'm sure they're going to dredge that up. So I [2:14:47] thought I gave you an opportunity. I had a very good exchange with the director yesterday. I want [2:14:53] to keep the momentum going on the FH. Yeah, well, he lost me when he went after Powell. So we can move [2:14:58] on to your core job. I know back in 2028, you were trying to target a 3% deficit to GDP. I think that's [2:15:09] a laudable goal. There's a lot of work, a lot of work we have to do so you can put it back on us for [2:15:13] maybe not making progress. But now we're at 30-year yields at a 19-year high, where we are in 10-year [2:15:20] yields and even some of the interest expenses on the 5.3 of GDP. We're not trending in the right direction. [2:15:29] What are we going to do or what would be your advice? What is the administration going to do [2:15:33] to help Congress focus on the main thing to try and get our deficit to GDP ratios to what most [2:15:40] economists think are necessary, which is your laudable target? Yes. So, Senator, this year, [2:15:47] the U.S. has the presidency or the head of the G20. We're actually holding the finance minister's [2:15:54] meeting in Asheville, so maybe you'll join us. And we have outlined to the industrial nations, [2:16:01] or to the G20, that we believe that the most important factor for financial stability is economic [2:16:07] growth. That it is a lack of growth worldwide and the decision that many the trading blocs countries have [2:16:15] made. And I believe the most important thing that we can do, as I was trying to tell Senator Welch, [2:16:23] that the CBO projections are all at 1.8 percent. That we have grown at 2.6 percent thus far. That [2:16:31] includes the Democratic shutdown and the Iran conflict, which makes me believe we can grow at three. [2:16:37] So if the CBO is wrong in their first year, how can they project out 10 years? So I think that growth, [2:16:45] the constraining spending and a growth agenda will do this. [2:16:53] I may submit a question for the record. I have to believe that global growth and U.S. [2:16:58] growth is somewhat, we are seeing great growth numbers. But I do think there's a lot of uncertainty [2:17:04] out there, and I have to believe that that's keeping some capital on the sidelines. So we could [2:17:07] even see greater ones. One of the areas where I think we've had some confusion, I asked Ambassador [2:17:16] Greer last year whose throat do I get to choke if the Liberation Day tariffs didn't work out. I'm not [2:17:21] going to ask you that question. I think I know the answer to it. They didn't work out. But now you're [2:17:27] at least working with CBP on the refund process. How does that actually work? I know CBP has stood up a [2:17:34] portal. Now they're appealing the decision. So people that were applying for it can no longer [2:17:39] while this appeal is occurring. What is Treasury's role? [2:17:42] Senator, we're just purely a dispersing entity? [2:17:45] We're just a dispersing agent. [2:17:47] Okay, good. I guess the only other question I have going forward is how do we reconcile [2:18:00] the increased budget requirements with the goal of trying to reduce our deficit to GDP? Is it just [2:18:09] something we've got to put on hiatus now because we're dealing with high priority items? Or how do we [2:18:13] how do we talk and chew gum at the same time? Because we have a pretty massive increase in defense [2:18:18] spending, which I'm generally supportive of, but we have no way to pay for it. It's one of the reasons a [2:18:23] few years ago. I was one of only nine people that voted against the trillion dollar veterans bill [2:18:29] because it had no pay for. So how are we going to get to these things that are important but actually [2:18:34] pay the bills at the end of the day versus putting my grandkids in debt? Well, sir, you met my children. [2:18:40] I hate to put them in debt. And there are priorities because with the defense budget, if we don't have [2:18:51] national security, I think it's very linked to economic security. And I would like to see, as I [2:18:59] said, something with a three in terms of deficit to GDP by the time the president leaves. I think one of [2:19:05] the things that is the result of the working families tax cut is the immediate expensing of equipment, factories, [2:19:16] and R&D. And what we are seeing there is this is not a giveaway. This is creating productive capacity. So the [2:19:25] way to think about it now is that as we are not getting the tax revenue because a corporation small business [2:19:34] has immediately written that off, we are increasing productive capacity, which I think is almost like the [2:19:40] slingshot effect that we will start getting it in the second year, the third year, the fourth year. [2:19:45] Thanks. Thank you. Senator Cantwell. Thank you, Mr. Chairman. And I know it's been a long day [2:19:54] because I've been in a long hearing on the other side, just on the other side of the hallway. But [2:19:57] thank you for holding this hearing. Good to see the Treasury Secretary here. I want to express my [2:20:04] concerns about the Trump settlement with the IRS. I think taxpayers need to know that well-connected are [2:20:09] not given a free pass. I would love to talk to you about Jones Act waiver tax parity. I'd like to talk to [2:20:16] you about the fact that we have an insolvent highway trust fund. But I really want to ask you [2:20:22] where you see this landscape now with China having been very active in the Chinese meetings and [2:20:29] this issue of trying to move on from the tariff debate and get the Chinese into a manufacturing purchase [2:20:38] specifically of aviation aircraft. And so I know that this is something that the administration and [2:20:46] you have been personally involved in. And I just hope that as we look at pushing China to make big [2:20:55] purchases. I mean, I think it's kind of crazy that if they want to be successful, why not? Why not do what [2:21:01] Emirates is doing in the Middle East? Why don't they why doesn't China air become the big deliverer of [2:21:08] an air transportation system in the Far East and do it with a fuel efficient plane? So what do you think [2:21:14] the chances of that continuation of getting this on track and getting when the president comes here [2:21:21] to have some success? Senator, I think after a rocky period that we have very good stability in the [2:21:32] relationship. As I've said many times, we don't want to decouple, but we need to de-risk. There are many [2:21:40] industries we need to bring back, whether it's semiconductors, critical minerals, rare earths. [2:21:46] They are precursor medicines and chemicals. It's unacceptable that we rely on China for many of those. [2:21:57] Thus far, we have seen a willingness by the Chinese. They are very interested in the Boeing purchases. They [2:22:07] agreed to 200 airplanes during the visit. We will see if they commit to a larger number [2:22:16] when Xi Jinping arrives in Washington. And the other thing that we are pushing for [2:22:24] is for the Chinese to open their economy, because what has happened, we have this probably the most [2:22:30] unbalanced, imbalanced economy in modern history, and it is hurting their households to the benefit [2:22:38] of their manufacturing sector. China runs a massive budget deficit, about 10% of GDP. 4% goes to [2:22:47] industrial subsidies. And if they move some of that over to the households, which we brought up with [2:22:53] Chinese leadership during the visit, then there would be much more demand for not only American [2:22:58] industrial products like great Boeing airplanes, but more American goods. We have formed a board of [2:23:04] trade and we will be looking at non-critical industries or non-critical things that we can [2:23:12] trade with each other tariff-free. How will that work? I mean, I'm for the tariff-free part, [2:23:17] for sure. And particularly, you know, another issue, we have both very high-end manufacturing, [2:23:24] like aerospace, but we also have a lot of seafood in the Northwest. And China consumes something like [2:23:30] 45% of the world's seafood. And I guarantee you we're not, that market isn't open wide enough for our [2:23:37] products. So how would the board of trade help us with that? [2:23:39] Well, that's exactly what it's going to do. It's going to say, if we pick a number, 30 billion by 30 [2:23:46] billion. What are 30 billion of things that non-critical industries, non-critical things, [2:23:52] fireworks, Halloween costumes, very low-end consumer items that we do not want to re-shore, [2:23:58] that we want to buy from them? And what are things that they would like to buy from us? [2:24:02] The seafood, maybe energy, and then we will both agree that that basket on either side will have [2:24:14] no tariffs. Well, I hope, I think this is a particularly important market with a long-term [2:24:21] relationship. I know the challenges that we face in forcing them to open those markets, but I also think [2:24:26] that getting off the tariff debate and into an open ways to get more product flowing to me is a very [2:24:36] important thing. So thank you, Mr. Chairman. I see my time has expired, but I do want to again emphasize [2:24:41] I really am against the Trump settlement with the IRS. And I know you have oversight over that, [2:24:47] so I'm mentioning that to you. Thank you, Mr. Chairman. [2:24:50] Thank you. We are informed that Senator Marshall may be back. [2:24:54] Senator Wyden has asked for a second five-minute round, and as a ranking member, I've agreed to that. [2:25:02] So, Senator Wyden, why don't you begin, and then if Senator Marshall shows, he'll be the final. [2:25:06] Thank you, Mr. Chairman. I've got one question. I want here, [2:25:13] Mr. Secretary, to follow up on your answers about the Booth-Booz Allen contracts. Now, [2:25:19] you said you didn't know about Trump's lawsuit in advance, so I gather that for you it was a coincidence. [2:25:26] You canceled the contracts three days before Trump's lawsuit? [2:25:30] That would be correct, sir. [2:25:32] Okay. And you didn't talk to anybody outside Treasury? I assume that's what you're saying as well? [2:25:37] Again, as I said, I had no knowledge. [2:25:41] Okay. Mr. Chairman, I'm going to make a brief closing statement with respect to where we are, [2:25:49] because I think that this has been a critically important meeting, and what it has showed is that [2:25:55] almost all of the big questions with respect to immunity from audits remain unanswered. And my own [2:26:04] view is that we're going to keep digging into this. I know that I'm going to, and my own view is that [2:26:11] somebody broke the law. Either Mr. Besant or Frank Bisagnano, the CEO of the Internal Revenue Service, [2:26:21] were illegally involved in the audit immunity granted to Trump through the addendum. Or if Mr. [2:26:29] Besant continues to claim that Treasury and the IRS were not involved, the audit immunity grant in the [2:26:36] addendum is against the law, because Acting Attorney General Blanche doesn't have the authority to settle [2:26:44] tax disputes that may have not been referred to DOJ. So that's where we are. It's one or the other. [2:26:53] And my own view is that as we keep digging, somebody broke the law, and I'm determined to work with my [2:26:59] colleagues of both sides of the aisle to get to the bottom of this, because we are wrapping up with [2:27:06] virtually all of the big issues with respect to how this immunity, which basically nobody else in [2:27:13] America gets. That's the important point came into being, and we've got to get to the bottom of it and [2:27:19] make sure that it's correct and it doesn't happen again. And I thank you for the extra time. [2:27:23] And we've never seen anyone in America. They have their tax returns, the tax returns of all their [2:27:30] employees leaked without an apology, Senator. Would you like to apologize today? [2:27:35] I was very much at the bottom of saying that it was critically important that enforcement action [2:27:42] be taken, and I worked with my colleagues on both sides to move quickly. That's the fact. [2:27:47] Yeah, then why did Mr. Littlejohn, why was he only charged in two out of three potential charges? [2:27:52] It was, he got off. With that, what we will do is, Senator Marshall, you made it in just under the wire. [2:28:03] Senator Wyden has given his closing remarks. I will forego my closing remarks to allow you to give your [2:28:10] five minutes worth of questioning. Well, thank you, Chairman. That is very kind of you. Secretary Besant, [2:28:16] welcome. I know it's been a long, long morning, and I know you probably have answered these questions [2:28:21] already. One of my favorite quotes from you is, the table is set and it's time for the banquet. And I'm sure [2:28:27] you could, you probably could credit somebody else, but back in Kansas, we say the table's set and it's [2:28:32] time to eat. I want you to know, I've been all over the state of Kansas, and especially manufacturing [2:28:38] is growing, that there's new opportunities there. And I think a lot of it is from the working family [2:28:43] tax cuts bill has made that very possible. What I love about your background is you're a business [2:28:50] person that's come to Washington, D.C. What do you see happening with manufacturing because of that [2:28:55] working family tax cuts bill across the country? Senator, we're having a manufacturing renaissance. [2:29:02] We are seeing that we've created about 90,000 new non-residential construction jobs, which would [2:29:10] tell you that those are, they have some type of manufacturing facilities. Those in my hometown of [2:29:18] Charleston, South Carolina, Boeing is expanding their facility by 50 percent. And those are construction [2:29:25] jobs, and then that will become 1,000 high-paying manufacturing jobs. And we're seeing that all [2:29:31] over the country. We're all over the country. We are seeing pharmaceutical companies re-shore. We were [2:29:37] seeing, we saw John Deere, the CEO, building a new factory in Indiana and in North Carolina. So it is a [2:29:48] real manufacturing renaissance. And much of it is a result of the tax bill. I was in greater Minneapolis [2:29:55] visiting Winnebago. And they told me that because of the tax bill, they had a decision whether they [2:30:02] were going to start, create a battery research facility in Florida. And the full expensing gave [2:30:08] them the internal rate of return that they needed. So that's more jobs in the Sunshine State. [2:30:14] Great. Next question, and you don't have to answer now, you can give us a written one. But [2:30:19] the 45Z model, again, you put on your farmer's hat for a second. You understand how important 45Z is [2:30:24] to our farmers back home. I think there's the GREET model is waiting for the Treasury to [2:30:31] do their little work on that as well. So maybe your staff could give us an update unless you wanted [2:30:35] to say something. No, we'd be glad to do it, but we think it's very important, sir. Great. I want to [2:30:39] talk about child care just a second as well. Under Joe Biden, we saw the cost of health care, housing, [2:30:45] child care go up 50 percent. Inflation is cumulative. But again, our working family tax [2:30:51] cuts bill did some incredible things for child care. And all across the state of Kansas, again, [2:30:57] I'm seeing people being able to invest in this. But especially not only do the increased monies [2:31:03] were given to individuals, but the businesses having an opportunity to expand. Can you speak to a [2:31:08] a little bit about what your vision is on using that benefit? I think that's a great benefit. [2:31:15] The child deduction is now permanent, thanks to you all, 20 to the $100. So, [2:31:26] you know, I think that we have seen that the best way to do this is to engage the private sector. [2:31:34] Exactly. Then I'm just going to close with, I was just out of the Reagan Library and he spoke about [2:31:42] this, always spoke about this bright, shining city on a hill. And it's hard for me to imagine, [2:31:47] but the third quarter last year, Kansas led the country in GDP growth, 6.5 percent. And we never lead [2:31:56] any type of thing economically. And so I went back and, you know, tried to figure out the whys of this. And [2:32:01] certainly the cattle markets are good. Farming income in Kansas was up 80 percent. And a lot [2:32:08] of that was government related, but certainly a part of that was the cattle industries. And of course, [2:32:12] the cattle eat, of course, is corn as well. We saw some, but we're also seeing expansion in manufacturing. [2:32:21] What would be the message of hope you would give America that this economy, it really feels good to [2:32:28] me right back. Things are not perfect. We've got to work on the price of gas. Inflation is cumulative. [2:32:33] We're still feeling a sting. But give me that message of hope from your desk. [2:32:38] The underlying economy is extremely resilient. We have had tremendous job growth in the past few months. [2:32:46] We saw the ADP numbers, which are a precursor for non-farm payrolls, come out very strong today, [2:32:53] above trend. We are seeing trucking surveys do very well. And, you know, I think that the underlying [2:33:01] economy is very strong. We will get on the other side of this Iran conflict. Prices will come back [2:33:07] down. And I think that the economy is going to roar, sir. Okay. Thank you, Secretary, for sticking [2:33:12] around. Mr. Chairman, thank you so much. Thank you, Senator Marshall. And thank you, [2:33:19] Secretary Besant. That concludes all of the questioning and all of the commentary. We appreciate [2:33:27] you taking this time. You spent more than two and a half hours with us today. More than that, [2:33:32] we appreciate the service that you are giving and that all of those that the Treasury Department [2:33:35] are giving. And please extend that thanks to them for us. With that, we are concluded. I remind my [2:33:42] colleagues that the deadline for submitting any questions for the record is 5 p.m. on Wednesday, [2:33:48] June 10th. And the Finance Committee stands adjourned.