About this transcript: This is a full AI-generated transcript of Scott Bessent testifies before Congress from Reuters, published November 15, 2026. The transcript contains 25,803 words with timestamps and was generated using Whisper AI.
"the suspicious activity report and currency transaction reporting thresholds which as you know from your years in the private sector are decades out of date we heard the same under the testimony from the biden administration a treasury report to congress on updating the thresholds is now five years"
[0:00] the suspicious activity report and currency transaction reporting thresholds which as you know
[0:06] from your years in the private sector are decades out of date we heard the same under the testimony
[0:14] from the biden administration a treasury report to congress on updating the thresholds is now
[0:19] five years overdue so mr secretary what's your view on trying to tackle this issue of
[0:28] raising the threshold limits on suspicious activity reports and ctrs chairman hill very
[0:35] important question and thank you for asking we believe that the we must get this right
[0:43] because as you said it has gone on for years and we want to do that with a combination of potentially
[0:50] raising the thresholds and also giving credit to institutions for the duration that they have
[0:56] known their clients so we are in the midst of this and as always we will be looking after our
[1:04] smaller financial institutions small banks and community banks to obviate any excess expense that
[1:11] they are doing it while maintaining the safety and soundness of our financial system i think that's
[1:16] important and i also think just to answer the question from big or small that the information
[1:21] being provided is being used and helpful in our fight against the cartels and global terrorist
[1:27] illicit finance because a lot of financial institutions don't get the attitude that that's
[1:33] the case and i'm sensitive to law enforcement that's demanding that they wish the ctr limit were a dollar
[1:39] so that they could look at every single possible category but your leadership i think will be
[1:44] important we'd like to make progress on this it's a priority for the committee we also appreciate your work
[1:49] as noted in your statement about cutting iran's murderous regime off from workarounds of the
[1:57] existing sanctions your operation economic outcast is finally seeking to bring that game of hide and seek
[2:03] to close however i'm concerned that china clearly and the uae have done too little to sever themselves from
[2:11] trade and money movements from iran what discussions are you pursuing with those two governments particularly
[2:19] to get them in line with uh your goals i think that we have seen some very uh forward-facing statements
[2:26] from the uae they've announced that they have cut off financial transactions and trade the with iran
[2:35] and the one of my deputies was just there and had a very good discussion with the all the members of
[2:45] their financial system and as you would see two weeks ago we sanctioned the branches of an egyptian
[2:52] bank in dubai and that bank will be closing that bank transferred more than 1.8 billion dollars since
[3:01] 2025 but to iran so our message has been and it has been heard that we know who you are you know who you
[3:09] are stopped so we now have a cadence we have sanctioned three banks uh with china with china we have had some
[3:17] very good private discussions and i look forward to those continuing uh this weekend when i meet my
[3:24] chinese counterpart the depth the vice minister will we fun and i'm sure it will continue during uh
[3:32] president xi's straight state visit i appreciate that i think that'll be an important agenda item for
[3:38] the bilateral discussion mr secretary you also know that the supreme court is recently uh reviewing
[3:45] petitions that they review the corporate transparency act i personally support the supreme court reviewing
[3:51] this act because i think the private sector needs a definitive answer on the corporate transparency act i
[3:57] want to thank the treasury and the administration for targeting it in line with the work of mr davidson
[4:04] but i hope that if the department of justice contacts the treasury that you wouldn't object to
[4:09] that review at the court let me turn to the imf in the time i have remaining my opening statement was
[4:18] about going back to basics for the imf and i don't want to see china added increased its allocation in the
[4:28] special drawing rights basket of currencies i think that's a mistake it's not a market economy it doesn't
[4:33] have a freely traded currency um you called out china with the all 19 countries called out china at
[4:41] your g20 meeting would you agree that imf needs to hold china more accountable i i believe that the imf
[4:49] is in the advanced discussions with china on the nature of their imbalances and the potential threats to
[4:58] global uh financial stability that those imbalances may pose thank you i yield back i recognize the
[5:04] ranking member of the full committee mrs waters of california for your question uh thank you very much
[5:11] secretary mr americans and small businesses feel the pain of your reckless economic policies
[5:18] they're paying sky-high prices for beef gas electronics and really really everything on and around
[5:24] the kitchen table with the administration's chaotic tariffs reckless war in iran and other
[5:30] unsound policies the average american is paying three thousand five hundred dollars more than they
[5:37] otherwise would be for groceries gas energy and health care and that was the number before
[5:45] president trump started an unnecessary trade war with our neighbors and allies in canada now thanks to
[5:52] retaliation on wood and number even the kitchen table itself is unaffordable yet trump is not concerned
[5:59] about all of this the president has said repeatedly that there is no affordability crisis that it's a
[6:05] hoax he has said that he literally does not care that americans are paying more for gas and diesel
[6:12] caused by his war of choice with iran for your part you launched a so-called economic d-day against iran
[6:19] but markets barely blinked crude oil prices continue to increase and you have dismissed the effects on
[6:26] american households and businesses while middle and lower income americans feel the painful effects of
[6:33] the k-shaped economy you claim that neither it nor the economic difficulties exist so secretary bessa you
[6:42] have dared the markets to bet against you claiming that quote i am the house now quote unquote so despite your
[6:49] feeble efforts there continues to be a sell-off of u.s treasuries with 30-year treasury yields rising to
[6:58] levels that have not been seen since 2007 just yesterday in fact the 10-year treasury hit five percent
[7:06] mr secretary do you agree that these high treasury yields or interest rates on americans bonds means that
[7:14] loans paid by families to fix a roof or buy a car will also be expensive yes or no the the u.s bond
[7:24] market has been the best performing yes or no on market in the world yes or no mr secretary record
[7:30] reclaiming my time reclaiming my time reclaiming my time reclaiming my time reclaiming my time
[7:36] reclaiming my time in the past 20 years reclaiming my time you keep talking i'll keep reclaiming my time
[7:42] and i'm asking you mr secretary and i'm asking you mr secretary turn it to your trade policy if
[7:46] tariffs are not inflationary as you claimed in your previous testimony then why has inflation increased
[7:53] by more than three percent over the past year do you deny that inflation is too high at three percent yes
[8:01] or no the representative yes or no mr secretary you're not making yes or no mr secretary believe
[8:08] that you're claiming my time reclaiming my time reclaiming my time reclaiming my time
[8:17] i didn't hear you mr hill what'd you say i said it's the gentleman's time belong to the general lady indeed
[8:23] indeed it does and so that's not good enough sir you and president trump the so-called conservatives
[8:31] you have overseen an increase in the debt to a record 40 trillion dollars 40 trillion you have promised
[8:39] reduced deficit but delivered only higher numbers and paying for american households and this is so
[8:45] outrageous when you and others have claimed uh to be about uh getting rid of the deficit well but maybe
[8:53] none of that matters if president trump continues to blindly push for ai and data centers with
[9:00] absolutely no safeguards he's doing this even as constant threat skyrocket for america did you hear
[9:07] what bill gates had to say did you hear what elon musk had to say did you hear about anthropic did you
[9:13] hear about ammo day they all said stop it watch it ai is dangerous you got to be careful did you hear any of
[9:21] that yes or no they could stop anytime they want to did you hear any of that yes or no they could stop
[9:27] reclaiming my time reclaiming my time did you hear what your friends had to say what the big billionaires
[9:35] had to say did you understand that they said we're moving into a dangerous period of time we need to watch
[9:42] it we need to slow down did you hear that this administration has been at the forefront of examining
[9:48] the models we began model examination via more than five or six your friends said watch it be careful
[9:56] that we're moving into a dangerous time on ai and if you don't admit that it means that you're not
[10:02] willing to stand up to the truth because you heard it you know they're saying it these are the guys that
[10:08] you all work with these are the guys that you have to be more billionaires and trillionaires these people
[10:13] you know what they're saying people want you to give them regulatory you don't have any more time
[10:17] the chair the chair now recognizes the vice chairman of the full committee mr heisinger of michigan for
[10:22] five minutes thank you mr chairman and secretary besson this has become a common theme would you like
[10:26] to respond on my time that keeps eating into my time because you can't actually answer the question
[10:31] i'll give you 30 seconds if you'd like to respond to any of that uh to to uh which piece there's so many
[10:37] things that we're going to be doing um it's a smorgasbord i understand well we can move on uh
[10:42] interestingly enough the idiocy that we saw earlier um i'm going to be doing a hearing in the foreign
[10:48] affairs committee uh today titled trojan horses covert foreign malign influence operations which will be
[10:55] uh discussing organizations like code pink and the sing singum network which has funneled hundreds of
[11:02] millions of dollars into the u.s to fund idiots like this so that they can come and do things like
[11:10] this performance art that they are trying to do um so uh that is uh my apologies but i guess you can
[11:18] expect more and maybe we'll see if a few of these people can get arrested twice in a day when they show
[11:22] up at my two o'clock hearing um so mr secretary besson i understand treasury department and the broader
[11:28] administration have several major tech security efforts running at the same time from work at nist
[11:34] and the new quantum readiness task force uh to the launch of the ai and cyber security vulnerability
[11:39] clearinghouse called gold eagle how is treasury making sure these efforts work together while
[11:45] avoiding siloed or duplicative efforts so we have the a effort across the government all departments
[11:54] the treasury began with the financial services for which the we are responsible but whether it is
[12:02] the department of war uh the cyber security the white house office of technology we have been closely
[12:08] coordinating for more than six months on this who's lead on that uh it is an interagency process okay
[12:15] is there a lead within the interagency or or not i i would say the sean karen cross the uh and michael kratios
[12:23] okay all right um these efforts may prove critical and protecting our financial plumbing there's a
[12:30] lot of discussion about that uh specifically regarding the gold eagle clearinghouse is there
[12:35] anything that you can share or plan to publish in the near future about how entities in the financial
[12:40] services sector from traditional financial institutions to the layer one blockchain networks
[12:46] can qualify to participate i think it is important these uh the discussion that we're having here on the
[12:51] layer one blockchain networks as well no i think that's very important and that the as you would have
[12:58] seen in the news that as soon as the news of mythos came out i gathered the largest banks yeah who happened
[13:06] to be in dc at treasury to begin discussing this uh the largest banks they have very good cyber security
[13:13] resilience and they have been very helpful in terms of creating more resilience and that is moving down
[13:20] the capitalization chain from super regionals to regionals to small and community banks and then
[13:26] we are populating that out into the service providers is the real concern uh amongst the working group
[13:33] the plumbing side of this well it's the plumbing and it is the patching of a lot of open source code yeah
[13:41] okay um i want to work uh move on to something a little bit different you know uh you and i previously
[13:47] discoursed uh in various publications about our shared aspiration for the three percent target i
[13:56] happen to chair some co-chair a bipartisan fiscal uh forum the bff we chose that on purpose by the way
[14:03] and we have introduced with my colleague scott peters from california we've introduced a resolution
[14:08] that congress should adopt this fiscal target of three percent of uh of a budget deficit no more than
[14:15] a three percent of gross domestic product or lower i believe this is the most practical tangible goal
[14:22] we can set to turn to finally turn the tide on our national debt in fact we have up to 20 evenly
[14:28] bipartisan co-sponsors in the senate companion bill what's your current outlook on that three percent
[14:33] target and uh can you even explain why this first step is not just critical to the international
[14:38] financial finance system but also to families and workers across our nation well the reason the three
[14:44] percent is important because the at three percent is when we start bending the debt curve and actually
[14:50] start paying down uh debt the important thing to look at is the depth what you're referring to
[14:57] representative huzinga is the deficit to gdp which actually the in the first fiscal year the trump
[15:03] administration came down from the astounding level of about 6.3 percent uh the calendar year was 6.8 or
[15:10] 6.9 and the biden the breakaway spending we brought it down to about 5.7 5.8 percent for the fiscal year
[15:19] so we actually did have a fiscal contraction and we would have continued that fiscal contraction this
[15:24] year uh but for the tariff refunds if you want to be interrupted again show up at my subcommittee
[15:29] hearing at two o'clock today gentlemen he was back chair recognizes the ranking member of our subcommittee
[15:34] on capital markets mr sherman of california you're recognized for five uh mr chairman i want to thank
[15:40] you for focusing our attention on china its special drawing rights its access at least until 2031 to the
[15:47] world bank uh but we were alerted to uh concerns about china just a few minutes ago uh when we had a code
[15:56] pink style i assume it was code pink disruption of this hearing and i should point out that code pink
[16:02] is chiefly financed by uh uh china the communist and the chinese communist party uh one more reason to
[16:11] be concerned about china's role in international finance uh the war has driven up gas prices and has
[16:19] driven up interest rates before this war the 10-year was at four percent now it's virtually at five percent
[16:26] uh last year i urged the administration to fill our strategic petroleum reserve they did not as a
[16:35] result we have not been able to respond to the uh uh uh straight of hormuz problem as effectively as we
[16:42] could now we have those of the administration talking about a bitcoin reserve uh i've never no country
[16:50] that has ever won a war in history had a bitcoin reserve but if you don't have an oil reserve and if you
[16:57] don't have reserves of rare earth minerals uh then you are at strategic risk certainly any money that
[17:05] we would put in a bitcoin reserve which we could lose in a day uh should instead uh be in strategic
[17:12] reserves of things we actually need to run the economy we are told that tariffs don't uh drive
[17:18] inflation boy do we need financial literacy in this country uh this hearing focus is significantly on
[17:29] the role of the u.s dollar uh the role of the u.s dollar is undermined by an incredibly erratic
[17:36] federal administration that makes us the laughing stop of the world it is exacerbated by the crazy
[17:43] tariff policies now we have a war with canada and the crypto bros made it clear that the whole purpose
[17:50] of crypto was to displace or partially displace the dollar uh as the world's reserve currency what i'm
[17:58] particularly concerned about is that in the senate they are considering the clarity act without plugging
[18:06] the loophole in um that in stablecoin the deal with stablecoin was that we'd allow stablecoin oh my god
[18:17] but we at least we would prohibit interest on it now the crypto guys have spent uh tens of millions on
[18:23] legal fees to evade that prohibition on crypto in on interest on stablecoin um a recent study has shown
[18:31] that that could lead to a 1.5 trillion dollar reduction in bank deposits meaning that the primary
[18:39] way that we finance small business in this country would have 1.5 trillion dollars less not to mention
[18:45] that there'd be 1.5 trillion dollars less to deal with the community investment act uh and finally of
[18:52] course the stablecoin is a system designed to be ultra secret to defeat uh law enforcement and to
[19:01] ignore uh and evade our know our know your customer uh laws um now mr secretary one of the prince core
[19:11] principles of u.s banking systems accountability rests with identifiable people and institutions uh yet uh
[19:18] many d5 protocols and decentralized stablecoin arrangements operate through uh decentralized
[19:25] governance autonomous autonomous mechanisms that lack accountability uh given the record of the
[19:31] number of defi defi exploits reported in the first half of this year and the use of ai and exploiting
[19:37] code uh are you concerned that a growing share of global financial activity could migrate to systems
[19:44] where there's no accountable party and no know your customer uh requirements what implications would this have for
[19:52] uh our efforts against illicit finance and what effect would it have on the integrity of the international
[19:58] financial system well that's why i'm pushing the passage of the clarity act because it gives treasury more
[20:03] authorities via to seek out this evasion the clarity act emboldens and uh makes more popular uh the rival to the
[20:19] u.s dollar which is crypto or at least uh they are the newest rival to the u.s dollar and they've said
[20:26] that their purpose it's as if america owns coke and your suggestion is let's invest and glorify pepsi
[20:35] uh we don't need the competition especially when we're doing such a terrible job of running our economy
[20:41] and of looking strong in the world and i yield back chair recognizes the gentleman from wisconsin mr
[20:47] fistro you're recognized for five minutes mr secretary thanks for being here today um i want to go back
[20:53] to uh china if i could a little bit more basic kind of approach uh the imf is supposed to promote
[21:01] obviously global financial stability but it appears kind of on a regular basis china continues to use opaque
[21:10] lending practices uh they manage kind of the exchange rate and they're certainly delaying
[21:16] uh debt restructuring i guess you would call it in developing countries um what what are we doing
[21:25] or what can we do to use our influence the united states use its influence at the imf to hold china
[21:32] more accountable and make sure that beijing doesn't continue blocking all these debt restructurings and
[21:41] distorting they're basically distorting kind of the international system right i was wondering give us your
[21:47] thoughts on that so congressman very very important problem we addressed it at the g20 and the we will
[21:54] see the first debt restructuring uh since then uh and it is because look the chinese the chinese system of
[22:03] lending includes many tolling agreements many the hidden provisions and transparency in debt restructuring
[22:11] is the is the ultimate uh feature for successful debt restructuring the imf has joined us in believing
[22:20] that that must happen and that we must have transparency it is also my opinion that this widely
[22:28] talked about belt and road initiative has gone from a lending operation to a collection operation
[22:34] as they have bankrupted many or are bankrupting many of their borrowers and so let me follow up so at the
[22:41] g20 i know the discussions happened but um just the efforts by china and and really other countries
[22:48] in reducing kind of uh the reliance on the dollar so um can you just kind of tell us why maintaining the dollar
[22:57] status as as the primary reserve currency matters i know that seems like you know this is the financial services
[23:04] committee that what what is your opinion on that and what's your take on that well contrary to the gentleman from
[23:10] california uh that the u.s the uh is in fact the leader and the leader does not fear competition
[23:18] competition makes us better and we we have thus far uh dismissed competition uh what we have seen is as
[23:26] a share of global transactions the u.s dollar uh continues the uh to thrive the share of global transactions
[23:34] in dollars actually went up this year and the only thing that we have seen is a diminishment
[23:40] in the reserve assets and that is just through the decrease uh mostly the uh of russia and china
[23:48] in their reserve holdings but we have seen many other countries and as a matter of fact we just had
[23:56] two of the most successful treasury auctions in 20 years which speaks to the credibility of our system
[24:02] and what this administration is doing and the global competence in us what it will oftentimes focus on
[24:10] um what the administration can do and what should congress be doing to preserve uh not not just the
[24:17] dollar as the currency but just to stabilize the markets overall well we will be talking about a fiscal
[24:24] consolidation that is coming and the as the previous representative uh asked me uh that is important
[24:33] we have to get our house in order and you know as i say a strong dollar is not a price on a screen it
[24:39] is a set of behaviors and what we have seen in this administration where we are creating regulatory
[24:46] certainty tax certainty trade certainty and energy certainty that is bringing in trillions of
[24:52] dollars into the u.s so it is to help us fortify those policies very good thank you for being here
[24:59] today i yield back gentleman yields back chair recognizes the ranking member of our subcommittee
[25:05] on digital assets mr lynch of massachusetts you're recognized for five minutes uh thank you very much
[25:10] mr chairman and and i want to thank the secretary for being here uh mr secretary as uh secretary of the
[25:17] treasury you have direct uh influence on uh the ability to advise the president on matters of ai not only
[25:26] from an economic standpoint but also from a regular stand regulatory standpoint as well as a national
[25:34] security standpoint uh sometimes when i hear the president talk about ai i and and and i have the
[25:41] honor of being the ranking democrat on this this committee on on ai and crypto uh when i listen to
[25:47] the president i i do not believe he has a uh i don't think he has a grasp of of what we're dealing with
[25:58] with ai i i i i i i'll be honest i don't think the president could spell ai if i gave him the first
[26:04] letter uh he is he is calling it a hoax i think your your own leadership at treasury and the things you
[26:13] have tried to do and anticipated are far more logical and thoughtful than what i'm hearing from the white
[26:25] house and i think i'm not trying to put you on the spot here but i i know you have suggested some
[26:33] things in the area of ai that are thoughtful and and cautionary and deliberate and yet i hear the
[26:44] president saying this is all a hoax you know and and uh i'm just i'm just trying to figure out do you
[26:51] think the president understands that that when we talk about building an ai we're not manufacturing it
[26:59] like a car sometimes he he talks in those terms we're really growing we're growing ai in a lab
[27:06] and and and and now based on the statements from anthropic and open ai and others including elon musk
[27:16] it's it's it's we're having a control problem we're having an alignment problem you know this this
[27:26] incident with uh hugging face we we've we've lost control do you think the president understands that
[27:36] that it is not as simple as as what he has described do you do do you understand do you think
[27:45] the president understands that it probably doesn't matter whether the good guys develop a super
[27:52] intelligence or the bad guys develop a super intelligence if you don't have control of that
[27:59] entity and it has preferences and goals that are inimical to the existence of humanity it won't
[28:12] matter it's the entity itself that they're creating that is going to prove there's going to present
[28:19] the threat to us and to to your kids grandkids all of our all you know humanity in general does the
[28:27] president get that mr secretary well congressman i look forward to working with you on this and i
[28:34] the uh i i do take exception it does matter whether the good guys or the bad guys have this as a person
[28:40] who manages the china the relationship with china on ai it matters a great deal if but mr
[28:46] secretary here's my point though we're having control problems so if we build something we can't
[28:53] control and the chinese build something they can't control and and the entity itself is what is the
[29:00] danger to us all at the end of the day if if we create a super intelligence that is beyond our control
[29:10] and does not follow our instructions and it's been very difficult on the value loading piece of this
[29:17] where we try to we try to imbue the ai with with with values that humans have that we have as
[29:25] a democracy we have failed in that that has been impossible to do so far and yet we've got this
[29:31] race and i hear from my and i have great respect for uh mr hill and my my republican colleagues on this
[29:40] we keep hearing about this race this race against china we we can't slow down we need to beat them
[29:46] well we don't control the entity that we're trying to create and neither does china i bet they've had
[29:52] breaches they've had breaches but they haven't reported them anthropic has open ai has uh you
[30:00] know come on musk has has congressman kimmy had a breach and sent chinese weapons plans back to
[30:07] anthropic what what i'm saying is i hope there's a way that you might be able to talk sense to the
[30:17] president about ai and the threat that you and i know it presents i would say the president is
[30:23] completely aligned with jensen wang the ceo of nvidia the chair your gentleman's time has expired
[30:32] chair recognizes the gentleman from new york chairman of the house homeland security committee
[30:36] mr garbarino you're recognized for five minutes thank you chairman hill and secretary thank you for
[30:41] being here and again thank you for your work on uh getting salt in the one big beautiful bill that
[30:47] put a lot of money back in my constituents that was a lot of your work congress well but it was your
[30:52] with your partnership in your meeting that we got across the finish line so thank you very much for
[30:55] that um i want to talk about uh foreign banking organizations um from 2020 to 2023 they underwrote
[31:03] approximately 11 trillion dollars more than 40 percent of the financing raised in the united states
[31:08] they also employ more than 200 000 u.s workers and contribute 30 billion dollars in payroll
[31:12] secretary given these substantial contributions what is what steps is treasury taking including
[31:17] through its coordination with financial regulators to ensure our policies continue to attract foreign
[31:22] investment and allow foreign banks to compete on a level playing field helping ensure the u.s
[31:27] remains the world's financial center representative that is an excellent question because the u.s
[31:31] has around the globe we have a very unusual regulatory system in that we have three
[31:38] federal regulators the federal reserve the fdic and the officer office of the controller the currency
[31:45] then there are state level regulations so we are trying to make sure that all the regulators are
[31:52] aligned with best practices the and uh tailoring regulation for the both the risk in the system and the size of
[32:01] the banks that's great i mean as we know regulation banks is is very important but when you overrank
[32:07] overregulate like the eu and some other places do you know you lose investment we want to make sure
[32:12] we're protected but actually still have investment so i love that you're doing that that's why they're
[32:15] trying to unify their capital markets and be more like us everybody wants to be like us um i have
[32:24] another question under a u.s generally accepted accounting principles clearers are treated as agents
[32:29] rather than principles meaning client cleared trades typically do not come onto the clearest balance sheet
[32:35] many u.s broker dealers that are subsidiaries of foreign parent companies must also comply
[32:40] with the international financing reporting standards uh the or ifrs which has not made the same
[32:45] clarification absent ifrs guidance those firms could be required to carry clear trades on their
[32:51] balance sheets significantly impairing their ability to participate in the treasury market
[32:56] i'm concerned that excluding major market participants because of accounting it can accounting
[33:00] inconsistency could restrict treasury market liquidity and run counter to the goal of the
[33:04] treasury clearing mandate we do not want international standards uh standard setting bodies hindering the
[33:11] successful implementation of our treasury clearing efforts do you share this concern secretary and would
[33:15] you be willing to weigh in where possible to help this get corrected before the uh go live date
[33:21] yes so we'd be willing we'd be willing it was pleasure to work with your staff on this and we are dedicated to
[33:28] keeping the u.s uh treasury market the the deepest the broadest the uh and the most robust so uh we
[33:36] want to make sure that we prioritize safeguards but we also they want to prioritize the uh our standing in
[33:44] the world thank you very much for that and we look forward to working with you and your team on that
[33:49] um now turning to digital assets as treasury implements the genius act congress was deliberate in
[33:54] distinguishing between financial intermediaries and developers of decentralized technologies
[33:59] that do not do not custody cust that do not custody customer assets or control transactions
[34:06] secretary besson how is treasury ensuring its regulations preserve those distinctions and do
[34:11] not inadvertently impose intermediary style requirements on software developers or other
[34:15] technology providers so congressman we're in the rule making process right now and i can't
[34:21] comment on that but we have taken substantial input from congress and stakeholders as we aim to
[34:27] uh keep america the crypto capital of the world i understand that we are in the rule making process
[34:32] but again i just want to make clear congress did intend that they were excluded so and when in the
[34:38] rule drafting just uh just please uh remember that um and last i want to return i want to turn to
[34:43] retirement security um in 2022 secure 2.0 became law to help create more opportunities for americans to
[34:50] save for retirement secretary can you provide an update on the implementation of secure 2.0 and how those
[34:55] efforts fit into the president's executive order uh yes um we we are again working to implement that
[35:04] and to uh do that in a safe and sound manner as quickly as possible okay do we have a timeline or
[35:13] sorry do we is there a timeline my staff will contact your staff okay i appreciate that um mr secretary
[35:20] and uh i am out of time so i yield back gentleman yields back chair recognizes the general woman from
[35:26] colorado miss peterson you're recognized for five minutes thank you mr chairman and thank you mr
[35:32] secretary for being with us today uh there is so much that i'd like to address in the short time that
[35:38] i have um i think that the greatest concern that the american people have right now it's not just the
[35:44] crippling economy by the illegal terrorists uh the consequences of the illegal war the people who are
[35:52] struggling every day to make ends meet but it is the endless corruption and the selling off of the american
[36:01] people's priorities for the benefit of trump and his family and his cronies in just the last few days
[36:09] i couldn't believe the news that was coming out that jared kushner uh is pursuing his own business deals
[36:18] while he's supposed to be engaging in middle east peace talks the russian oligarch paying for a post
[36:27] wedding celebrations the 60 minutes show that exposed the video footage of people offering pardons as long
[36:37] as they'd give trump hundreds of thousands of dollars the corruption is unprecedented in every way
[36:45] and there are real consequences to everyday americans we're also very concerned about january 6th violent
[36:53] insurrectionists being paid out and trying to exempt trump and his family members from a deal that you
[37:02] are overseeing with the irs from uh any uh pursuing exempting them from from any crimes that they might have
[37:11] committed in the past so i want a commitment from you i've sent a letter asking for information on this
[37:19] i've yet to receive a response but can you commit right now today that there is a legal revocation of
[37:28] the irs deal that you are overseeing and will you please give us a commitment that you will give us these
[37:35] documents that were requested representative you were confused that i do not oversee it it is it is done by the
[37:40] department of justice and we take instruction from the attorney general but mr secretary you oversee
[37:46] the irs you oversee the dollars coming in and out of the treasury general supersedes that authority
[37:52] okay mr mr secretary you oversee you're supposed to protect the american people and our tax dollars can
[38:00] you commit that you will not distribute any of these funds right now for all of us today well it's the
[38:06] subject of litigation so i can't talk about it but i'm not sure which funds you're talking about okay
[38:11] mr secretary any funds that would pay out january 6 insurrectionists whatever people whatever fund we
[38:18] want to call it any taxpayers going out to to pay out these insurrectionists as well as exempting trump
[38:26] and his family from any investigations with their their dealings again that's in litigation but it is a
[38:32] matter for the attorney general all right mr secretary the hardest part of my job right now is being in
[38:41] my district and having to speak to people directly about the impacts of this administration what it's
[38:47] having on their daily lives i am shocked when i see you on tv talking about how the k economy is done
[38:54] that the economy has never been better that couldn't be further from the truth i people are struggling
[39:01] to make ends meet the skyrocketing tariffs are hitting businesses with an unexpected average 25 000 a
[39:08] month in colorado canada is our greatest trading partner so huge implications for the trade war that
[39:16] trump has pursued 50 percent uh tariffs on on products that that that we rely on so our families are getting
[39:26] health care ripped away our economy uh has been crippled from failed policies and yet we hear you
[39:36] what what i hear from people is that you're you're one of the the smart people in the administration
[39:42] you know better you know what's happening to the people across this country and yet you continue to
[39:48] stand in and say trump's talking points and my ask is that we deserve we need better you are a voice
[39:56] that we need of reason and a check on donald trump when when we feel like we have none uh mr secretary
[40:08] i want to read a couple of stories i have countless stories from people reaching out to my office
[40:15] about the consequences every day margie says my husband and i both have good jobs but with child
[40:20] care costs that are hitting more than our mortgage and grocery bills i feel like it goes up every week
[40:26] it's been brutal and these two things are just the tip of the iceberg it shouldn't be this hard
[40:31] for a family of four to survive gentleman's time has expired chair recognizes the gentleman from
[40:37] new york mr lawler you're recognized for five minutes thank you mr chairman mr secretary thank
[40:42] you for being here and thank you for your leadership on operation economic outcast could you please
[40:48] describe the impact operation economic outcast is having on the iranian economy as we speak well
[40:55] congressman i i would just quote the president of iran the speaker of the parliament and the head of
[41:00] the central bank who said that the economy is in dire straits he was the warning both his hardline irgc
[41:09] compatriots and the iranian people so we have seen the currency collapse we have seen inflation through the
[41:16] roof and unbelievably in a country with the third highest the energy resources in the world they now have
[41:24] three to four hour uh gas lines because they have to import their fuel so the economic outcast is
[41:32] possible because of the blockade so the combination of the blockade and the the months that we spent
[41:40] mapping the nodes through the payment system that we are cracking down on them and i believe that these
[41:47] violent outbursts that we are seeing from them is a result of a wounded and cornered animal appreciate
[41:53] it keep up the strong work on that front i want to raise an issue related to holocaust era restitution
[42:00] there's growing evidence that certain swiss bank accounts holding assets belonging to holocaust
[42:06] victims and their families were never accounted for or included in the original 1998 swiss bank
[42:12] settlement and testimony to that effect was made to the u.s senate earlier this year mr secretary given
[42:18] treasury's role in overseeing matters of international finance and asset recovery are you
[42:23] aware of these uh reports on unaccounted for accounts uh yes yes sir and do you believe it would be
[42:31] appropriate for the department to revisit or press for the settlement to be reopened or expanded to
[42:36] ensure these assets are properly identified and returned to survivors and their descendants our
[42:42] international affairs department would be happy to work with your staff on that congressman great thank
[42:46] you uh the treasury department has been very active in the ai space both within the financial sector
[42:51] itself and more broadly in the tech stack can you share more information about treasury's involvement
[42:57] with efforts to create baseline standards for ai developers and how banks should be thinking about ai
[43:03] within their institutions yes so as i said earlier this began back in in march and we have engaged on a
[43:13] daily weekly and monthly basis we have we began with the largest banks and with their
[43:21] chief information officers with their leadership and we have transferred much of that via into project gold
[43:30] eagle which is a a clearinghouse for everything that we learn about resiliency within this and we continue
[43:39] to engage with them and i can tell you that the financial sector have been they have from the largest banks
[43:46] to the smallest banks from domestic banks to international banks have been very good partners
[43:52] and they are working on resiliency appreciate it the european union has been attempting to assert
[43:58] regulatory authority on american enterprise through the corporate sustainability due diligence directive
[44:04] cs3d would force u.s companies many with only modest european exposure to comply with sweeping eu mandated
[44:11] supply chain audits liability standards and the esg driven operational changes given the administration's
[44:19] stated goal of restoring strong economic growth how do you assess the impact of this kind of foreign
[44:24] regulatory overreach on america's ability to reach a sustained three percent growth rate uh well
[44:30] congressman i used to be a lifeguard and one of the first things they teach you on lifeguarding is
[44:34] that a drowning person may grab you and try to pull you down with them so at the g20 we offered an agenda of
[44:43] growth uh which includes substantial deregulation and we hope that the eu will follow a fantastic report
[44:50] from the former head of the ecb mario draghi on how they can solve their growth problems but the way to do
[44:57] it is not to encumber the dynamic economies it is for them to free themselves uh in new york and
[45:08] uh in california they have very aggressive uh escheapment practices and try to sweep unclaimed
[45:15] property uh into the state to effectively pay for their bloated budgets um how are you and the
[45:23] administration going to protect the trump accounts uh from being swept up by california and new york
[45:30] uh in these uh grandiose escheapment uh practices that they have uh put forth replicado
[45:37] and i are working on the safer act and would love to work with you on that uh yes that could be a
[45:42] problem you know again drowning people try to pull everyone down with them and you know we we can
[45:48] secretary let me ask you to respond to mr lawlor in writing on that question chair recognizes the
[45:54] ranking member of our subcommittee on oversight investigations mr green you're recognized for
[45:58] five minutes thank you uh thank you for appearing today mr secretary um quick question for you
[46:05] at the purchase of a meme coin what does one get to evidence to purchase sorry a person purchasing a
[46:16] meme coin at the time of purchase you get something to evidence to purchase i assume it's an electronic
[46:23] receipt an electronic receipt and how does one acquire value after having purchased the meme coin
[46:32] uh again value value can take they have many different things that how does one acquire value when
[46:39] one buys gold how do you value when you let's talk about the meme coin right now you you would get it
[46:46] through appreciation there or or many people may just buy it via for uh capital stability well um some
[46:56] people buy it assuming that they'll make some sort of profit as a result of the purchase and is it fair to
[47:03] say that that profit in many instances will be based upon another person buying at a higher price
[47:10] that that's the way a market system works congressman well in this market system the president's dollar
[47:18] meme coin allowed him to make 635 million dollars last year investors lost 3.81 billion dollars the coin
[47:31] fell from 75 dollars at launching to one dollar and 65 cents those purchases that were made by persons
[47:42] buying the meme coin they purchased a digital token which amounts to nothing they don't get anything beyond
[47:55] the token in the wallet nothing more than that and there is this term that i'm not fond of but
[48:05] it's a term that's utilized the term is the greater food theory it takes someone who's willing to pay
[48:12] more for nothing than the original investor for the person to make a profit that's speculative
[48:22] but it's also called something else it's called a ponzi scheme these things have been legalized
[48:32] under this administration ponzi schemes have cost persons lots of money and people who
[48:42] imposed them have gone to jail they've been prosecuted but in the trump world we now have
[48:51] legalized this scam to the extent that when a person buys the trump coin there's a transaction fee
[49:00] that's paid when it's sold there's a transaction fee the president makes money on the buy the purchase
[49:06] and on the sale and if the president happens to have taken a few of these coins himself at the
[49:14] genesis of this process he makes a profit when it goes up and if he takes his profit off the top
[49:24] as other investors do who buy in early they do well but the masses of people they're the people who are
[49:32] losing the 3.81 billion dollars these schemes have not traditionally been legal how do you justify
[49:46] legalizing these ponzi schemes well representative i'm unfamiliar with this uh i don't think it meets
[49:55] the criteria for a ponzi scheme a ponzi scheme is a different kind of financing excuse me if i may just
[50:02] ask you pardon me for interrupting but explain to me how it differs from a ponzi scheme when the
[50:09] profits that are made are dependent upon someone else paying more for what you purchased which is
[50:17] nothing we'll call it a digital token so how how is that how is that different from every market is
[50:26] dependent on if you want to make money on someone paying more whether you i know but if whether whether
[50:31] you sell your house whether you sell stock sir if i may if it's gold you have a tangible asset
[50:38] there are tangible assets this is an intangible asset it doesn't exist except in the minds of
[50:47] equities and bonds are an intangible asset okay well this one is the one that the president has used
[50:53] to take advantage of people i i would hope that our country would see that the president is a corrupt
[51:01] person i yield back gentleman yields back chair recognizes the chair of our subcommittee on housing
[51:07] and insurance mr flood of nebraska you're recognized for five minutes thank you mr chairman mr secretary
[51:13] when you appeared before the house ways and means committee in june congressman herne raised the issue
[51:18] of third-party litigation financing you said at the time that you look forward to working with him on the
[51:23] issue especially where foreign money is coming into our system sponsoring lawsuits and paying no taxes
[51:30] more recently you warned wall street on x that quote tax rules should reward investment not abusive
[51:37] financial engineering end quote and said treasury would not tolerate financial products designed to
[51:42] exploit the tax code well i think that specifically describes third-party litigation to a t these
[51:51] transactions allow investors to take ordinary income from litigation recoveries and convert it into capital
[51:56] gains income through financial fiscal engineering mr secretary will you commit to having the treasury
[52:03] and the irs examine the tax treatment of third-party litigation financing including arrangements that
[52:09] have foreign investors i'm concerned that we've got sovereign growth funds that are gaming our justice
[52:15] system and getting these nuclear verdicts and then paying themselves back big time uh so my question is
[52:22] will you work to uh uh with us to ensure that tplf proceeds are subject to the appropriate u.s tax
[52:30] treatment look forward to working with you and your staff on that and as long i have long believed
[52:38] that this is a malignancy within our legal and financial system and it should be stated that you look
[52:44] at home insurance premiums in america they have been skyrocketing yes weather peril but also third-party
[52:50] litigation financing is also driving that second question uh mr secretary some of my colleagues today have
[52:56] claimed that crypto will destabilize the u.s dollar but i have a hard time understanding how a payment
[53:03] stablecoin under the genius act that must be backed dollar by dollar in a u.s financial institution how
[53:11] could that undermine the very dollar that it's tied to i know you're working hard to implement genius
[53:16] how do you expect this statutory framework for stable coins to strengthen the dollar's position as
[53:21] the world's reserve currency which is one of the reasons we all voted for it how to increase the global
[53:26] demand for dollar denominated assets and ensure that this emerging technology ultimately reinforces
[53:32] not threatens the strength of the u.s dollar with stable coins the the highest demand stable coins are
[53:39] indeed u.s dollar backed so we believe that as we finish the rule making which we're in the midst of
[53:47] now and working on congressional intent and speaking to the stakeholders that we will see a increase
[53:55] in demand for u.s safe haven assets u.s dollar assets especially treasury bills and that will likely
[54:04] buttress the rest the u.s dollar vis-a-vis other currencies especially especially as other countries
[54:11] implement the central bank digital currencies which could be seized at any moment as we have seen in
[54:18] numerous cases thank you very much for that as you know the bank secrecy act is the top regulatory cost
[54:24] center for financial institutions and i'm pleased that the administration is looking at modernizing
[54:30] aml controls with a new program rule when it comes out will it be strong enough to actually change
[54:36] supervisory practice on the ground level uh to focus on risk yes that you know what we are seeing is
[54:43] that many of the suspicious activity reports that we see are even ex post and uh much to my dismay when
[54:53] i arrived at treasury we also saw that many of the sars that which are in the hundreds of thousands to
[55:00] millions filed every year end up in a digital filing cabinet so at fincen we are operationalizing fincen
[55:08] so that we can both follow the leads follow pathways on those and communicate with local law enforcement
[55:16] in a more robust way i want to touch on community banks which don't have the resources or large compliance
[55:22] teams and fewer bsa reports a month could make a big difference a threshold increase would
[55:27] meaningful uh meaningfully reduce the compliance burden for them is that something we can include
[55:32] in the final aml rule we we are working on that now and we are working on both that perhaps a
[55:40] threshold increase based on the length of time the customer has been with an institution and
[55:49] congressman as you know no one knows their customers better than small and community banks right so
[55:55] how can we uh integrate their knowledge and the fact that they do know their customer they see them
[56:01] as opposed to we we find that most of the deficiencies are with the very large banks thank you very
[56:08] much mr chairman i yield back gentleman yields back chair recognizes the ranking member of our subcommittee
[56:13] on housing and insurance mr cleaver of missouri you're recognized for five minutes thank you mr chairman
[56:24] mr secretary thank you for for uh for being here um the the president um bowed at the republican
[56:36] convention mid decade mid term uh convention in dallas that um he would give five thousand dollars to
[56:48] each american uh if republicans win the uh election um i think he called it a trump dividend um first of
[57:05] all you know i'm concerned about the direction we're going in terms of uh one part of our government
[57:16] taking complete control over the government um and we know that uh things like this happened before but
[57:27] um do you believe that the president can make a declaration uh about five thousand dollars for
[57:40] each american without the consent of congress oh we we are currently examining that the at treasury
[57:48] and the when the republicans win in november if we need to i look forward to working with speaker
[57:54] johnson on it on what yeah if necessary on the five thousand dollar dividend so that so it is a thing
[58:03] i'm not sure what a thing means it is a thing when it is real the president's declaration about five
[58:18] thousand dollars per american what is real so it's been researched and the president's intent is very
[58:24] real uh as a treasury secretary um i'm sure you do you have any apprehensions about a 1.8 trillion
[58:36] dollar uh deficit that would be impacted um even more negatively if every american received five
[58:47] thousand dollars from the federal government well first first of all i think putting more money in the
[58:51] american people's pocket it should be an objective for everyone and i i believe there are ways to do it
[59:00] uh that are that would not affect the deficit yeah and and ways to do it without involving congress
[59:08] uh again that if congress is needed i look forward to working with speaker johnson if not then not well
[59:16] yeah spending uh begins on the house of representatives and uh five thousand dollars per person it would seem
[59:25] to me uh would have to move through the legislative body uh we're seeing a slow and in my estimation
[59:33] dangerous um reduction uh in the equality of the of the the three branches of the government uh and i
[59:43] always think about uh 1973 the uh war powers act i think the bombing was secretly taking place in
[59:53] cambodia without the knowledge of people in in congress uh and so i'm not sure uh i'm well i'm assuming
[1:00:03] you you're meeting with mr speaker johnson now working out some some details sorry are you working
[1:00:13] on details with speaker johnson on the five thousand dollars if it becomes clear that we need congressional
[1:00:19] authority i will with speaker john meet with speaker johnson and i look forward to it uh there was also a
[1:00:29] pledge for two thousand dollars uh for for individuals before this by the president um and it's
[1:00:36] concerning uh if we can i don't my time is gone but i am very concerned about releasing uh unchecked
[1:00:45] super intelligence uh when uh people are declaring that it's an existential threat to humanity um senator
[1:00:57] kennedy has suggested uh that we had that we passed some kind of law that required a kill switch
[1:01:04] are you familiar with that i i'm not sir well the kill switch based on what the senator has suggested
[1:01:14] would be the switch that would be the ultimate switch that would shut down ai uh if uh this threat
[1:01:24] surfaced the reality of the time has expired invite the secretary to respond in writing to that question
[1:01:31] chair now recognizes the gentleman from iowa mr nunn you're recognized for five minutes thank you very
[1:01:37] much mr chairman secretary besson thank you very much for spending time with us today here in dc
[1:01:42] most importantly thank you for coming to places like iowa and hearing front line folks share with you
[1:01:48] how the investment of rural capital which this committee has done which you have led has really
[1:01:54] helped impact local lenders whether they're banks credit unions small businesses take root and really grow
[1:02:01] you spent some time with me recently in des moines and you heard directly from folks who have said you
[1:02:05] know the lending options available to them because of your leadership here the rollback in regulation
[1:02:12] is helping them grow businesses we had one of our companies had their best year ever as a direct
[1:02:17] result of both the tax cuts but the rollback of red tape i want to say thank you very much for your
[1:02:22] leadership most importantly thanks for hearing from folks right in the middle of america on how much
[1:02:27] this helps grow the heart of the heartland it was representative it was a pleasure to be there and
[1:02:32] it's really a tale of two states that i've been in minnesota which is top five for personal income tax
[1:02:38] top five for current uh for corporate income tax and the the people who are leaving and the businesses
[1:02:46] that feel trapped as opposed to iowa which is booming that's right i also want to highlight and i want
[1:02:52] to thank my colleague across the aisle emmanuel cleaver here on efforts we've done for things like rural
[1:02:57] housing and this is an area where making sure all of america gets the opportunity to have an american
[1:03:03] dream the treasury has been a partner in making sure that our local lenders have the access to capital
[1:03:09] necessary to make that successful i also want to speak today on something that i think has um you know
[1:03:15] really driven what we have been a leader here on the financial services committee we've led in both
[1:03:19] crypto we've led in digital assets including stablecoin and now we're looking at this artificial
[1:03:24] intelligence that has exploded in the last year alone our committee has passed unanimously my ai plan
[1:03:32] act to be able to identify ways that the federal government can learn from what's happening both in
[1:03:37] the private sector while at the same time not putting prohibitive restrictions on innovation here
[1:03:43] in the united states i also think it's unique that the treasury has an opportunity here to help us wage an
[1:03:49] america first innovation while stimming the tide from groups like china a near competitor in this
[1:03:55] space from getting tactical advantages in the ai space that's everything from making sure that chips
[1:04:01] are made here in the united states to also ensuring that foreign actors don't take an opportunity to
[1:04:09] leapfrog america's frontier ai models secretary besson i wonder if you could speak to us about what the
[1:04:16] treasury is doing to help keep america's competitive advantage increase our innovation while at the same
[1:04:21] time as was noted here not allowing technology to get ahead of our capability to best help the american
[1:04:27] people good congressman thank you for that question and we are trying to maintain the optimal the growth
[1:04:36] rate so we we are solving for for both the innovation and safety and we have been working on that for more
[1:04:44] than six months since the these large language models since release of mythos which was the first what i
[1:04:51] would say step function increase the in agi as we or ai as we approach agi and one of the things i would
[1:05:02] say is that we need to develop more of an open source more open source models in the u.s we can't let these
[1:05:10] large labs capture have regulatory capture because that will stop innovation one of the ways we can
[1:05:17] push back against china because the chinese models they distill from the u.s models which is a polite
[1:05:25] scientific word for steel and the more we develop our own open source models here or open models here
[1:05:34] then the we will be able to eventually uh the chinese models people will not use them because
[1:05:41] again you know you you you are seeing uh in many of the chinese models many of the chinese models think
[1:05:47] they're mythos that's right that's right they think they're clawed so mr secretary i think you're
[1:05:51] absolutely right in the sense that made in american ai is good not only for the entire world it's one of
[1:05:56] the best safeguards we have to make sure the communist party of china doesn't become the mainstay for the
[1:06:02] future of artificial intelligence i'll end with this mr chair one of the efforts that we're trying
[1:06:06] to lead here is not only what we can do to make sure our partners in china when they come to the
[1:06:10] united states at the end of this month know that we are committed to this that they find no harbor
[1:06:15] and that we will be soft on this issue but also congress must lead and this is one of the reasons that
[1:06:20] we are presenting uh a letter to both the house republican and democrat leadership as well as the senate
[1:06:27] to make sure that we have a commission focused specifically on aspects that we can do to make sure
[1:06:32] artificial intelligence becomes first and foremost here in the united states and national security is
[1:06:36] prioritized i'd like to enter into the record without objection thank you very much mr gentlemen's
[1:06:41] time has expired chair recognizes the ranking member of our house intelligence committee mr
[1:06:45] himes from connecticut you're recognized for five minutes thank you uh mr chairman and thank you
[1:06:50] very much mr secretary for being here and purportedly we're here to talk about international monetary
[1:06:55] stuff uh the chairman and i were just in bolivia bolivia's hanging on by a thread waiting for them to
[1:07:00] approve an imf deal i just hold that up as an example of how important it is that you provide the
[1:07:05] leadership that of course keeps our neighbors uh stable and safe um that's not what i want to talk
[1:07:10] about though what i want to talk about is um let me start did you attend the uh midterm uh convention
[1:07:15] in texas last weekend i did you did okay um i'll tell you i saw two things at that convention number one
[1:07:22] uh it's a little bit like you quoting the um atlanta federal reserve uh as a gdp projection for the
[1:07:27] third quarter atlanta federal federal reserve has a gdp protection projection that is double what the
[1:07:34] survey of professional forecasters is saying it will be at 2.5 so i saw a lot of happy talk about
[1:07:39] the economy which by the way is political malpractice when the american people and this is in the michigan
[1:07:43] consumer sentiment survey see consumer sentiment lose 20 points since the beginning of the trump
[1:07:49] administration you have a political problem i don't expect you to comment on that but you have a
[1:07:54] political problem which is why my friends on the other side of the aisle are not talking much about
[1:07:58] the economy today congressman there's a survey problem because democrats are now poisoning the
[1:08:03] survey mr secretary you're better than that reclaiming my time i'm data-driven reclaiming my time it
[1:08:11] disappoints me to see somebody of your stature use the word conspiracy in the congress of the united
[1:08:15] states as long as we're going there the other thing that i heard in in texas was that we're all
[1:08:20] communists mr foster my friend here built a business employed lots of people we're not communists
[1:08:32] over here but i do worry about the other party there's been 10 000 ivy league phds written on what
[1:08:39] precisely communism is but can we agree just yes or no here can we agree that communism substitutes
[1:08:46] the control of the government and the ownership of the government over the hand of the free market
[1:08:52] is that a reasonable working definition of communism yes okay good good so can you think of any other
[1:08:59] administration since franklin delano roosevelt that has taken equity stakes government ownership
[1:09:06] in 39 companies that's a figure by the council on formerly can you think of another administration
[1:09:10] that has the united states government owning 39 american companies congressman as you said since
[1:09:17] franklin roosevelt that we we are the uh in a the fight of our life it's a simple question i don't
[1:09:24] know it's for strategic industries we've had market failures the biden administration completely okay
[1:09:29] okay okay mr chairman i i have five minutes here i'm not going to argue with you on whether that's a
[1:09:36] good idea i happen i'm a free market guy so i think it's a terrible idea tariffs that's why that's why we
[1:09:42] have no critical minerals that's why the mr secretary i do have a question at the end of this the
[1:09:48] government now owns 39 companies the government has imposed tariffs i don't like tariffs whether you
[1:09:53] think they're a good idea or a bad idea they are an intervention in the free market uh uh you yourself
[1:09:59] did a massive intervention in probably the most important market to the capital markets which is
[1:10:03] the treasury market the president recently five thousand dollars for a vote now you could in the legal
[1:10:09] world that would be called a bribe but you could think of it as an intervention in political markets
[1:10:13] and by the way i have no doubt that if i walk down there right now and said i will pay you five
[1:10:17] thousand dollars if you focus your buying on the three-year treasury that conversation would end with
[1:10:22] me in handcuffs but the question i have for you mr secretary relates to your intervention in the
[1:10:29] markets and i'm not going to ask you to agree with me here but i can think of no administration
[1:10:34] in the last 50 years that is quite as communist as the trump administration
[1:10:39] constant interventions in the operations of the free market but let's spend one minute on your
[1:10:43] intervention about a week and a half ago you spent some 10 billion dollars plus or minus to try to
[1:10:50] lower the yield on the 10-year bond this prices american mortgages when you started the 10-year bond was
[1:10:57] at 4.8 percent today it's at a 20-year high of 5.04 percent 20 basis point rise was your intervention
[1:11:04] successful and will there be more uh yes it was sir and wait wait wait 10-year went up by 20 basis
[1:11:12] points how can you say it was successful the well there is the counterfactual of what would it have
[1:11:18] done and we then proceeded to have the two most successful treasury auctions that we've had in 20
[1:11:24] years and the the u.s bond market it continues during past month during since president trump has come
[1:11:30] in it has been the best performing bond market in the developed world i have one last question you
[1:11:37] you didn't use our cash for that you let short-term bonds pay essentially for the purchase of long-term
[1:11:41] bonds but you've talked about maybe using a treasury general fund that's the american people's money do
[1:11:46] you have the intention of using the treasury general fund to continue this operation uh i i don't think
[1:11:53] you understand what the treasury general fund is the tga the is the checking account for the federal
[1:12:00] government they and if we can buy bonds cheaply which is what we do that we approximately 10 billion
[1:12:08] of i just asked a yes or no question about whether you intend to use that operation you can ask a question
[1:12:13] you can't tell me how to answer it mr himes your time has expired thank you go on because i wanted you to
[1:12:19] get that clarification and i invite the secretary to put that in writing the committee's of interest
[1:12:24] there thank you uh the gentleman true gentleman from montana mr downing you're recognized for five
[1:12:32] minutes well thank you mr chairman and uh uh secretary mr secretary thank you for being here uh i want to
[1:12:39] first start by applauding your efforts in the trump administration's efforts to reduce red tape and
[1:12:45] ensure that regulations are appropriately tailored you know i also want to quickly acknowledge uh the
[1:12:50] treasury's efforts to stand up trump accounts which really do have the potential to give kids a
[1:12:56] financial leg up but uh straight into my questions um as a former state insurance commissioner one of
[1:13:03] my biggest priorities is maintaining strong and competitive state-based insurance markets which
[1:13:08] in my experience is the best way to serve the needs of americans and during the biden
[1:13:13] administration administration i saw firsthand how the federal insurance office or fio was empowered
[1:13:20] and politicized to encroach on that system despite a key function of fio being to represent the u.s
[1:13:27] insurance industry on the international stage on a prudent on prudential matters and i saw all kinds of
[1:13:34] deviations from that including you know trying to get the u.s to adopt you know european capital
[1:13:40] standards rather than adopting the other way on the strongest most effective insurance market on the
[1:13:44] planet you know acting as a regulator when they clearly weren't a regulator and probably one of the
[1:13:49] biggest transgressions i saw there was in the previous administration's uh uh green new deal
[1:13:55] aspirations basically making data calls on our domestic insurers usurping the authority of our domestic
[1:14:01] regulators so uh mr secretary can you discuss the efforts treasury has made under your leadership to
[1:14:08] rein in those abuses we saw at fio during the previous administration and what further reforms uh might
[1:14:14] you support so congressman that's a very important distinction uh file was created under dodd frank but
[1:14:21] it is not a regulator the it is a convener the it is an observer the we the facilitate communication
[1:14:30] and the we we we do not exercise uh authorities uh we i i believe that the 50 states the insurance mechanism
[1:14:41] that we have in the u.s is extremely robust and the um i had the regulators the insurance commissioners
[1:14:49] come to treasury in the spring for some very uh detailed discussions on what's happening in private credit
[1:14:56] i was very impressed with the the depth and breadth the of their work and importantly the uh they
[1:15:03] regulate each other because to do business the uh in montana the new york the you know montana has to
[1:15:12] certify a new york company selling there so it is a very robust system right and um look i i think what
[1:15:21] we can do the uh is which is what we do identify the uh potential areas that we are concerned about
[1:15:30] they have for financial stability and then make sure that the uh that the insurance regulators are
[1:15:38] aware of them because as i've often said in risk management the biggest risk you're taking is one you
[1:15:43] don't know you have right well uh thank you for that and obviously you know we understand what the
[1:15:48] intent was behind fio but we have seen usurpations of what their authority was uh under the previous
[1:15:54] administration and i've championed efforts to reform and abolish fio you know the mccarran ferguson act
[1:16:00] of 1945 made clear the states have sole regulatory authority over the insurance industry which was
[1:16:05] upended by dodd frank when it was when it created fio so mr secretary do you believe that treasury should
[1:16:11] minimize its insurance activities to clearly define federal responsibilities and leave insurance
[1:16:17] regulation to the states 100 thank you so my legislation the mccarran ferguson restoration act
[1:16:23] really strikes a balance on abolishing fio while maintaining some key responsibilities so i i hope
[1:16:29] you'll take a care take a look at that uh moving on in the interest of time uh i was very pleased to
[1:16:34] see the final rule issued by fincen to permanently remove the invasive beneficial ownership and
[1:16:40] information requirements for u.s small businesses i've heard from countless companies as to how
[1:16:46] costly and unworkable this requirement would have been can you briefly discuss why exempting u.s
[1:16:51] businesses from this requirement was so critical to the administration's commitment to cut red tape
[1:16:57] well congressman i i think first of all it's important to know who we did exempt and it's foreign
[1:17:02] entities right so but by exempting 33 million small businesses from these onerous and expensive reporting
[1:17:11] requirements uh you know i believe it is a victory for common sense right um another burden i hear from
[1:17:18] our community banks in my district is how costly it is to comply with the bank secrecy act and anti-money
[1:17:23] laundering laws the ten thousand dollar domestic currency transaction report threshold has never been
[1:17:28] raised to account for inflation since the secrecy act became law in 1970 um you discussed this issue with
[1:17:35] chairman hill earlier but can you describe why it's important to keep these thresholds updated
[1:17:40] i invite you to describe them in writing to the gentleman from montana thanks for the question
[1:17:45] chair recognizes the ranking member of our task force of monetary policy mr vargas of california
[1:17:50] you're right now for poppin thank you very much mr chair and ranking member for the hearing appreciate
[1:17:55] mr secretary thank you for being here joining us i know you have a very tough job and i appreciate you
[1:18:00] taking it i do um i've been here since the beginning of the hearing so i have heard most of your
[1:18:08] testimony and some of the things i was going to ask you've already been asked but one of the things
[1:18:12] that i did hear that you did attend the mid-term republican convention in dallas and you did hear of
[1:18:20] course and you commented about the five thousand dollars in fact the actual quote from the president
[1:18:26] was this if republicans win you win with us and you get five thousand dollars so is that a good idea
[1:18:38] pardon me is that a good idea uh yes why i i think it's a good idea for the american people to
[1:18:46] they keep more of their money so they get five does that hurt the deficit or the debt does that increase
[1:18:52] the deficit or does it increase the debt they i i believe that there are ways to do it without
[1:18:58] increasing the debtor deficit why don't you go ahead and tell us then because it doesn't seem like
[1:19:02] that's been the case so far uh that is in process right now so it's somehow mysteriously or magically
[1:19:08] going to occur you can't tell us you can't give us i'm not ready to discuss it at present but at
[1:19:13] treasury we've been working on it for quite a while the reason i say this is because we hear this all the
[1:19:19] time that in fact this is going to reduce the debt reduce the debt i remember when president trump
[1:19:24] used to talk about how outrageous the 24 trillion dollar debt is now of course it's at 40 trillion
[1:19:30] so again we hear these miraculous things that are going to happen and they don't seem to appear
[1:19:36] but since we are talking about miraculous i studied to be a catholic priest for a long time and i had to
[1:19:41] study metaphysics to mystic philosophy in particular because you have to pass an exam as a jesuit called
[1:19:48] the de universum and we talk about ontology learn about ontology epistemology the notion of what is
[1:19:55] existence what is being how do you know these things i never thought i was going to have to
[1:19:59] research them once again but because of ai i do find myself once again going back to this information
[1:20:06] trying to figure out you know what exists what doesn't exist this is a dangerous thing and i'm
[1:20:13] not a techie but i i do know philosophy is as the systems learn more and more about us they do become
[1:20:22] very dangerous and you're in a position to do something important the people who are technically
[1:20:27] savvy more and more are saying these are very dangerous things and yet you were talking a little
[1:20:32] bit about how we have to do this for really efficiency purposes what are you doing for safety we've been
[1:20:42] working on safety the non-stop since the release of mythos and i can tell you what we shouldn't do on
[1:20:50] safety is to give these labs the a liability exemption which is what they are asking for
[1:20:57] the the best way to guarantee safety is that the creators are liable for what they build and generate
[1:21:05] and they put out into the economy and to the american people and to the world populace would you like to
[1:21:14] expand a little bit more on that because if it's if it's just the liability i'm a lawyer too i understand
[1:21:18] liability so if the safety issue is just a liability for you as you know oftentimes companies go ahead
[1:21:27] and take the risk because of the potential profit are you building in any other type of safety other
[1:21:33] than the risk the liability again that the the one thing we should not do is give them a blank check on
[1:21:42] liability because i i believe that the best liability or the best safety guard is that they will be held
[1:21:50] responsible and they are saying that we would like to all slow down but please give us a waiver on
[1:21:57] liability which should not be done and i would encourage everyone in this committee and in both
[1:22:03] houses not to consider that but i think that's a very good idea and i agree with you but what about
[1:22:08] the safety of being able to turn the system off like we we are working we've been working in this
[1:22:15] administration on that uh you know you might recall that we forced anthropic to withdraw a model because
[1:22:22] we did not they believe that it passed the safety criteria and they received a lot you know we we were
[1:22:30] the you know held up as they're doing something that was terrible okay i have 17 seconds less i would
[1:22:38] just urge you to focus more on the safety i think you're a very capable person i don't agree with you on
[1:22:43] everything but i think you're a very capable person i hope you focus on the safety because i do think
[1:22:48] there's a lot of danger again thank you for being here yes sir the chair now recognizes gentleman from
[1:22:53] florida mr heredopoulos for five minutes thank you mr chairman and thank you as you go through these
[1:23:01] questions and uh i've never studied to be a priest but i am a former history professor and i've learned
[1:23:06] that socialism doesn't work and i think we all recognize and seeing what's happening in central europe
[1:23:12] right now with their declining economies and the last thing i want to do is go in that direction
[1:23:16] i also see the opportunities now happening in latin america where they're opening up their markets
[1:23:20] as we've seen success in places like argentina uh mr check i'm gonna get a couple questions with you
[1:23:25] if i could about argentina and japan and i have greatly concerned some of the reaction to some of your good
[1:23:31] policy that directions first of all it's it is correct that japan is our largest holder of u.s treasuries
[1:23:37] is that correct it is okay and second i think we've seen almost a 90 reduction in argentina in their
[1:23:43] inflation rates since they've moved to the the free market is my understanding at this point as well
[1:23:48] and the reason i'm bringing this question up i know there's a little bit of a public conversation
[1:23:52] between uh the senator from massachusetts and yourself and maybe for not only dedication of this
[1:23:56] committee but uh the public to understand what we did in argentina to help a fellow ally um and and what
[1:24:04] we did there which we actually helped the world economy as opposed to hinder it look in argentina we we
[1:24:10] had a fully collateralized swap line on which they they just drew a small amount the the goal uh was to
[1:24:18] protect the capital of the american people we actually made tens of millions of dollars and we
[1:24:24] successfully bridged an american ally you know as everyone said a trump ally no this is american ally and
[1:24:31] the javier mole has taken argentina the out of this far left anti-american governments
[1:24:41] and it has been a beacon for latin america so when the congressman from connecticut talked about
[1:24:48] being in bolivia that we we were seeing with argentina with bolivia with chile with colombia
[1:24:55] with with ecuador the all these countries the having realized that these far left policies have never
[1:25:03] worked anywhere and did not work for them now want leadership in a market-based economy and the building
[1:25:10] that idea when when you were at your situation recently with japan again our number one bondholder
[1:25:15] at this point in america it has to be frustrating as a person who's actually an expert on the economy
[1:25:20] to hear the chattering class talking about some of the decisions they made and not understanding a
[1:25:25] fundamental understanding whether it be credit swaps or otherwise uh well and some in the senate
[1:25:32] and and that said um what what is the benefit of helping out an ally like japan when they run into a
[1:25:37] situation like they did recently again we had been engaged uh with the japanese on their currency
[1:25:44] interventions in constant dialogue uh the ministry of finance there uh is very transparent with us and
[1:25:54] for a nominal amount again uh not the goal but a nominal amount where the u.s treasury has made tens
[1:26:00] of millions of dollars we were able to signal our support for the japanese policy the of a stronger
[1:26:08] yen and a stronger yen is better for american exports a stronger yen uh means that the japanese
[1:26:15] government will not have to sell u.s assets to finance foreign currency intervention and and in
[1:26:21] our last minute and a half like it i know there's been a lot of unique statements made from the other
[1:26:25] side of the of the aisle we you got a little bit of time left do you want to address a couple of the
[1:26:30] comments i know that you have cut off in a few different circumstances well the congressman what i would
[1:26:35] like to do is this was just released during the hint hearing it's several inconvenient facts the census
[1:26:41] bureau uh covering uh 2025 uh they have just published the poverty rate declined uh 50 basis points
[1:26:50] to 10.2 percent real median household income increased by two thousand two hundred and fifty dollars
[1:26:56] two point six percent to eighty seven thousand four hundred sixty dollars the highest on record pre-tax
[1:27:01] income for black americans is up 4.8 percent white americans 2.9 well thank you mr secretary and one
[1:27:08] last thing if i could mr chairman uh there there's i talk about opportunity zones in florida i'd like
[1:27:13] to just make a request of the treasury department to take a look at some of those ideas for the future
[1:27:17] we're booming right now because of the space industry in florida and we're looking for new ways to find
[1:27:22] that investment so we stay number one in space but with that mr secretary thanks so much for your time
[1:27:26] and mr chairman i yield back gentleman yields back the chair recognizes the gentleman from illinois
[1:27:31] mr caston for five minutes well secretary percent um what is the total amount of money associated
[1:27:37] with the sale of venezuelan assets that's flowed through treasury accounts or accounts managed by
[1:27:41] treasury since january uh that just a minute uh we we are not giving out the total amount of
[1:28:02] disbursements uh i'm asking for the total amount of money president trump said in july that it was more
[1:28:07] than 13 billion would you agree that it was more than 13 billion in july again they i i'm not going to
[1:28:13] give out that amount uh okay has treasury hired an independent auditor to review those flows uh that
[1:28:19] kp kpmg okay thank you all this part all disbursements are subject to kp yes and will their and will
[1:28:25] their audit review the flows through the qatari managed account that was initially set up will their
[1:28:30] audit review the qatari flows uh kpmg is reviewing everything since they have been hired would will that
[1:28:38] include the qatari flows again secretary rubio said it would i'm just asking you to confirm what secretary
[1:28:42] rubio then i agree with secretary rubio because state okay have you personally reviewed any of
[1:28:47] their audits there have been no audits published yet so you have you reviewed their work products
[1:28:53] what's that have you reviewed any of their initial work my staff reviews them every day okay art do you
[1:28:58] know are any of the cash flows that are flowing flowing to the u.s government u.s persons or u.s
[1:29:02] corporations uh i have no knowledge of that okay because president trump said on july 27th we've paid for
[1:29:09] that war many times over we're taking in a lot of money billions and billions of dollars from venezuela
[1:29:13] who is the we that he is referring to well i i think president trump may have been referring to the
[1:29:19] oil deal that the department of war has done with venezuela but but he he seemed to imply that we
[1:29:25] the united states people are taking in money to offset those costs that would suggest flows to u.s
[1:29:30] persons again that this is the uh one one of the largest uh assets that maybe ever to go on the
[1:29:38] the u.s balance sheet congress and and well okay are the accounts that the treasury is managing tied
[1:29:45] only to the sale of oils or are you also taking control of other venezuelan assets
[1:29:51] it is many venezuelan assets so you've asserted control over venezuelan assets i know interior
[1:29:57] recently said they're taking control of venezuelan gold sales so we're also taking control of those
[1:30:01] assets and the dispersions yeah you can't testify as we sit here whether or not those are flowing to
[1:30:06] u.s persons uh no um can you identify where or what u.s bank those funds are being held uh no secretary
[1:30:18] rubio had indicated that they were being held by citibank do you dispute what secretary rubio said
[1:30:23] or do you not know i agree with him um is citibank earning any fees or other charges on those
[1:30:29] deposits uh i'm i believe that they are likely earning their traditional fees okay so that would
[1:30:36] be a u.s person who money is flowing to what is that that would be a u.s entity citibank is a u.s
[1:30:41] entity that would be a u.s entity that venezuelan funds are falling to um in february you promised to
[1:30:47] provide this committee with a copy of treasury's agreement with the venezuelan government regarding
[1:30:50] the control of the payments associated with the qatari account when can we expect to receive that
[1:30:55] document i'll check with my staff um do you know is that document the same as the current agreement
[1:31:01] was that modified after the flows moved from from qatar into a u.s account which apparently is managed
[1:31:06] by citibank again uh that account is audited no i'm asking whether you whether the agreement that you
[1:31:15] have promised to provide between treasury and the government of venezuela has been modified since
[1:31:20] the flows moved from the qatari account if there's an auditor it's obviously been substantial this is not
[1:31:25] an audit question this is a no if they are taking direction i'm asking about the agreement i'm not
[1:31:32] sure you know what you're asking um please don't judge me and i'll try not to judge you the you are
[1:31:38] asserting that you have control over assets that were not coercive and they're standing in front of
[1:31:43] creditors that's predicated on the existence of an agreement between the u.s government and the
[1:31:47] venezuelan government that you promised to provide with us do you understand what i'm asking you i'm not
[1:31:52] sure you understand what you're asking secretary rubio testified to the senate that the qatari
[1:32:00] account was necessary because if the venezuelan money was in a u.s account it would be subject to
[1:32:05] claim by foreign creditors are you of the opinion that those funds which are now in u.s counts are
[1:32:11] protected from foreign creditors yes under whose legal opinion are you relying uh they they are the
[1:32:19] they are funds of the venezuelan central bank which is protected from foreign creditors but but why would
[1:32:25] they not have been protected when they were well look let me get one last thing the gao is conducting
[1:32:29] an audit of this whole process right now will treasury commit to working fulsomely and openly
[1:32:33] with the gao to make sure that we get answers to the questions you can't provide the gentleman's time
[1:32:37] is expired is that a yes the gentleman's time is a hard yes yield back the chair recognizes the chair
[1:32:43] of our task force on monetary policy mr lucas of oklahoma for five minutes thank you mr chairman
[1:32:49] mr secretary thank you for the bold leadership and action you've taken to cool the fever building in the
[1:32:55] treasury market can you describe market functioning during this time and how the department is
[1:33:01] safeguarding the world's most important asset class while ensuring the market remains anchored in facts
[1:33:08] well sir we have the proof because the u.s treasury market continues to be the best performing market
[1:33:17] whether it is over one month in the developed world whether it's over one month or whether it is over
[1:33:23] the period since president trump came to office and as i said the proof of our credibility and that this
[1:33:32] operation was successful we traditionally when we are bidding for 3 billion of assets get 20 billion of
[1:33:40] offers when we were bidding for 6 billion we only received 10 billion and we have a very strict pricing
[1:33:47] guideline so we are buying these assets at a discount creating liquidity and creating value for the
[1:33:54] american people that money then gets recycled back into the treasury market as dealers balance sheets
[1:34:00] become freed up as we see demand from foreign investors shift more towards the equity markets here in
[1:34:09] the united states how is the department thinking about the potential for volatility risk in our treasury market
[1:34:15] while recognizing the depth and liquidity benefits that more price sensitive buyers provide
[1:34:22] congressman i believe it is not either or for american assets uh i believe that the money that is
[1:34:29] flowing into american assets reflect reflects a preference uh away from other global assets so it is not
[1:34:38] either or and as i said we we are seeing we we saw the two of the best treasury auctions for a long
[1:34:45] dated paper for 10 and 30 years uh that we've seen in 20 years do you feel confident that the treasury
[1:34:53] department has the tools necessary to address any concerns over yield levels or are there additional
[1:35:00] authorities that might be helpful now again as i said that yield levels that we do not set the equilibrium
[1:35:08] price things rarely exist in equilibrium they are either moving away from it or moving toward it
[1:35:15] my job is to make sure that when i believe that they have moved too far away to move it back toward
[1:35:20] equilibrium and i believe we have the necessary tools continuing on a similar topic can you describe
[1:35:26] your work with the prudential regulators on their much improved basel reproposal to ensure access to
[1:35:33] clearing efficiencies in the cash and repo treasury markets as the clearing rule goes into effect at the end of
[1:35:39] the year yes we have substantially engaged with them to make sure that the u.s clearing houses and financial
[1:35:48] institutions are not disadvantaged and that the the u.s remains the premier market in the world and the
[1:35:56] destination for capital over in the ag committee this week we're discussing how to continue supporting
[1:36:01] the work of our colleagues at usda to support our farmers and ranchers the people who feed and fuel the
[1:36:07] country our producers are working diligently to rebuild our herds while the fed continues to
[1:36:12] consistently report high demand for american beef talk to us about the importance of our cattle ranchers
[1:36:17] to the overall health of the american economy and what do you expect in the farm economy after we emerge
[1:36:23] from the contraction in the beef cycle the beef cycle as you know the is a long and idiosyncratic cycle
[1:36:32] and we got hit the in the cycle at the same time uh with the this uh you know it's an invocative name
[1:36:39] the screw worm that forced us to cut back on uh mexican and uh to the extent there wasn't any central american beef
[1:36:49] so it was one two i i believe that in my conversations with secretary rollins that we will move
[1:36:55] beyond the screw worm epidemic uh perhaps the in the next six or 12 months that should help stabilize
[1:37:04] the market and then the financial health of our farmers is essential for coming out on the other
[1:37:10] side of this beef cycle thank you for your awareness of these important issues mr secretary and with that
[1:37:15] i yield back mr chairman gentleman yields back the chair recognizes the gentleman from new jersey mr
[1:37:20] gottheimer for five minutes hi mr secretary the the 10-year treasury hit five percent as of september
[1:37:26] 14th as you know the highest since 2007 and has dragged the 30-year mortgage to a one-year high near
[1:37:33] seven percent pricing families in my district and in many places around the country out of their
[1:37:37] first homes and the 10-year keeps climbing uh do you believe it's important that we make credible
[1:37:44] progress on the deficit and you think that's a serious part of actually tackling this affordability crisis
[1:37:50] uh yes and i believe the 10-year yield reflects many things but the need to address the deficit is
[1:37:58] one of those thank you mr secretary deposit insurance has been stuck at 250 000 for years and
[1:38:05] when svb and signature bank failed business deposits fled our community banks overnight coverage has been
[1:38:11] frozen at 250 000 for for many years and it hasn't kept pace with inflation and today about half of all
[1:38:16] bank deposits some seven trillion sit uninsured do you believe deposit insurance reform would help
[1:38:22] strengthen confidence across the banking system and could help our community banks retain customers
[1:38:26] and stay competitive yes sir uh since a diverse resilient banking sector is part of what underpins
[1:38:33] the strength in the global financial system would you commit to working with many of us to toward
[1:38:38] deposit insurance reform in the future uh yes and and we have been working with members of this
[1:38:43] committee we i welcome the opportunity to work work across the aisle because what we see when there is
[1:38:50] deposit volatility during a period uh like the svb and the two other banks is that banks move from
[1:38:57] community banks to large banks and then they never migrate back right many of our community banks are
[1:39:03] really struggling because of it right and well they are struggling for a variety of reasons right for many
[1:39:09] that's one of the reasons yes but we've seen 45 percent of small and community banks disappear since
[1:39:14] 2009. yes i'm very worried about that thank you for bringing that up um mr secretary we have been
[1:39:21] warned just last week that unchecked advanced ai could pose an existential risk to humanity and the
[1:39:26] international rules of the road now being debated all depend on enforcing who can access advanced chips
[1:39:31] and capital we can't rely on self-policing in my opinion in third-party audits alone which is why
[1:39:36] clear rules of the road need to be adopted and put in place uh what role is treasury playing to ensure
[1:39:41] any guard rails on frontier ai can actually be enforced and how are you coordinating that
[1:39:46] internationally so that a race without rules doesn't endanger the whole system well congressman to go
[1:39:51] back to the first point you made uh that the ai runs on the advanced chips that the u.s has a
[1:39:59] substantial lead in so uh making sure that the other uh countries do not have access to those advanced
[1:40:07] chips uh is very important and at treasury as i said we we convened very early the after what i would
[1:40:16] call the mythos a step function gain of intelligence and have continued working uh our mandate is with the
[1:40:24] financial sector and then we have attempted to migrate that knowledge and the learning from the
[1:40:30] financial sector into other sectors through the gold eagle forum you're coordinating uh across
[1:40:37] government working with your partners across the government on this yes sir thank you i appreciate
[1:40:42] that on september 8th treasury sanctioned three dozen more entities tied to iran's aviation sector
[1:40:48] airlines and cargo operators tehran uses to move weapons personnel and illicit cargo as part of
[1:40:52] operation economic outcast however some of the enablers you named uh aren't in iran their firms in
[1:40:58] turkey the uae kazakhstan and malaysia third countries several of them are our partners supplying
[1:41:04] the parts and logistics that keep planes like mahan air in the air a sanction is only as strong as our
[1:41:09] willingness to enforce it against the facilitators as well what is treasury doing to hit those third
[1:41:15] country facilitators with secondary sanctions and force their governments to cut the network off so
[1:41:19] that cut off from the global financial system is a consequence and not just a warning so that warning will
[1:41:26] take effect and we'll start biting on september 23rd and we will fulsomely enforce those just as we have
[1:41:35] with the three banks that we have over the past three weeks got it so you're going to look across the
[1:41:39] board at all those who are tied not just to the main actors no we we've made it known we we know for
[1:41:44] those of you who are enabling the regime you know who you are we know who you are and we the aviation
[1:41:51] authority is a new authority a new sanction authority and we are going to exercise that very vigorously
[1:41:57] excellent i think we need to be aggressive so thank you thank you so much sir thank you i yield back
[1:42:01] thank you sir the chair recognizes the gentleman from tennessee mr rose for five minutes thank you uh
[1:42:08] thank you chairman and and thank chairman hill and ranking member waters for holding this important
[1:42:12] hearing and thank you secretary bassett for being here with us today secretary bassett as you may be
[1:42:17] aware i introduced hr 7993 the somaliland economic access and opportunity act my bill would require the
[1:42:25] department of the treasury to submit a report to congress examining the principal legal regulatory and
[1:42:31] policy barriers barriers limiting somaliland's access to the u.s financial system the report would
[1:42:37] examine issues including somaliland's international status sanctions exposure compliance with know your
[1:42:44] customer and anti-money laundering and counterterrorism financing standards remittance flows access to
[1:42:50] international financial institutions and the steps necessary to incorporate somaliland into the swift
[1:42:57] financial messaging and payment system it would also provide recommendations to strengthen financial
[1:43:03] transparency expand lawful financial access and reduce the risks of money laundering terrorism financing
[1:43:09] and other illicit activity somaliland is a valuable partner for the united states and has the potential
[1:43:16] to become an even greater partner its strategic position along the gulf of aden near some of the
[1:43:22] world's most important shipping routes makes it particularly important to u.s security and economic interest
[1:43:29] at a time when china is expanding its influence throughout the horn of africa somaliland can serve as a
[1:43:35] reliable and constructive regional partner i just had the opportunity a few moments ago to meet with the
[1:43:41] president of somaliland who is visiting uh here in washington this week secretary bassett do you believe that
[1:43:47] stronger financial ties between the united states and somaliland could advance u.s security and economic interest
[1:43:56] and help counter china's growing influence in the corner of africa the representative i'm going to defer to the state
[1:44:04] department on the recognition of somaliland but that historically that stronger economic engagement with
[1:44:10] the united states by any country uh creates sustainable development and creates more resources well thank you
[1:44:19] for that and uh i guess being more pointed i would say uh do you support uh if and may perhaps you haven't
[1:44:27] had a chance to familiarize yourself with the bill is not really um talking about uh explicit recognition but
[1:44:35] about clearing the way for somaliland to continue to build uh economic access to the world market so
[1:44:43] would ask uh for your support of and and you're uh taking a look at the somaliland economic access and
[1:44:50] opportunity act and its requirement that the department of treasury provide congress with a comprehensive
[1:44:55] assessment of the barriers limiting somaliland's access to the united states financial system would you
[1:45:02] support that i i i will support the looking at your bill i will have my international affairs department
[1:45:10] give me a briefing next week and then we will engage with your staff thank you and and does the
[1:45:15] department of treasury based on your current knowledge have the technical expertise personnel and capacity
[1:45:21] to conduct a comprehensive assessment of the legal regulatory and policy barriers limiting somaliland's
[1:45:27] access to the u.s financial system within 180 day period yes sir okay um and and if not how much
[1:45:37] additional time would be required that would be helpful to know secretary bessett in june of 2024 i was
[1:45:42] proud to join a letter led by my friend and colleague from florida congressman and member of this
[1:45:46] committee congressman byron donald's urging the world bank to con to reconsider its long-standing
[1:45:51] position on nuclear energy financing i was encouraged to see the world bank reverse that
[1:45:55] position in june 2025 and begin re-entering the nuclear energy space this is an important step
[1:46:02] toward giving developing countries access to reliable affordable and secure energy options can you
[1:46:07] describe how the administration is using america's voice and vote at the imf to support responsible
[1:46:14] nuclear energy projects and expand financing opportunities yes so the uh mr bongo who heads the world bank
[1:46:24] we have made it clear to him that this is a priority and indeed he has adopted this as a priority and
[1:46:31] this is the first time in decades that the world bank has moved forward on nuclear energy and i think it
[1:46:38] is an important part for the poorest countries in engaging in their increasing their welfare levels
[1:46:46] and increasing their prosperity and developing truly sustainable energy thank you secretary i appreciate
[1:46:53] your leadership on that issue i see my time is winding down so i will yield back the remainder of my time
[1:46:58] thank you again for being here gentleman yields back the chair recognizes the general woman from
[1:47:02] massachusetts miss presley for five minutes thank you mr secretary i want to continue where we left off
[1:47:09] the last time you testified before this committee as you know hundreds of thousands of black workers
[1:47:14] have been pushed out of the workforce and unemployment rates over the last year haven't been this high
[1:47:19] since the coven 19 pandemic to put it simply more people out of work now than they were before trump
[1:47:25] took office in 2025. secretary besson in february you testified under oath that you would analyze black
[1:47:33] unemployment data and report back on its impacts to the financial stability of the u.s economy have you
[1:47:40] begun working on this report yet i would check with my staff i have not seen it can you make a commitment
[1:47:47] to honor what you said on the record under oath of course okay and when can i expect that report i will
[1:47:55] check with my staff and they will communicate to you via a date certain secretary besson let me be frank here
[1:48:01] something that is having um this sort of impact at one point there were 300 000 uh black women who
[1:48:10] have been pushed out of the the the workforce most of them from the federal government devastating
[1:48:16] many black families and that 80 percent of those families black women are the primary breadwinner
[1:48:24] so this is something of great consequence i have to also say again being frank that you're on thin ice
[1:48:30] with me because you sat here uh in the midst of the tariffs conversation and i asked for you to be a
[1:48:36] partner in pushing for an exemption of baby products and you told me that i had a partner in you in that
[1:48:41] in that advocacy and nothing came of that so twice you've come before this committee made a commitment
[1:48:49] under oath and you've not followed up i i would say watch this space after uh president she's visit so
[1:48:58] okay i don't know what that means but but people are struggling you've made commitments you haven't
[1:49:02] kept any of them and it's outrageous moving on i have a lot of ground to cover and i i have too much
[1:49:08] of my time secretary besson when donald trump reclaiming my time when donald trump launched the
[1:49:14] unnecessary and unconstitutional war with iran how long did he say that would last i don't recall
[1:49:19] i'll jog your memory four to five weeks it's been six months so he lied and we're all paying the cost
[1:49:25] since the war started gas prices are up 52 percent yes or no are you aware of that
[1:49:31] gas prices are gas prices are up 52 percent since the war started are you aware of this issue yes or
[1:49:37] no from what to what i i think that's not a good number okay i'm gonna take that as uh a yes you're
[1:49:44] playing like you don't know but you know okay secretary besson working people reclaiming my time
[1:49:50] secretary besson working people are paying more for utilities now than they were five years ago
[1:49:56] more than 40 20 more are you aware of that i am aware of that okay moving on secretary besson
[1:50:03] people are also paying over three times more on health insurance have you heard about this issue
[1:50:07] yes or no i am aware that obama okay no failure yes or no are you aware you can ask stop filibustering
[1:50:14] and stop acting like you don't know what the facts are moving on answer it secretary besson the joint
[1:50:20] economic committee found the tariffs cost families on average seventeen hundred dollars have you heard
[1:50:25] about this issue i have not you heard about this issue your boss donald trump said that he was going
[1:50:32] to give people uh or a uh he would reimburse them he would send them a check for the cost of these
[1:50:38] tariffs and he hasn't done that because he lies on everything well moving on democratic you know about
[1:50:43] these issues and i'm questioning your integrity you know roughly is recognized miss presley is
[1:50:48] recognized thank you mr secretary you know about these issues the american people are suffering you
[1:50:53] know better you go on television and you say that trump's economic agenda is a great comeback and that
[1:50:58] makes me question not only your integrity but if you're operating in the same reality as the people
[1:51:04] whom you are accountable to and you are enabling him and it's shameful secretary besson the families in my
[1:51:10] district and across this country are struggling to afford a home buy food raise their kids pay these
[1:51:15] high utility bills and they deserve a government that's going to make their life easier not harder
[1:51:20] but that's exactly what is happening on your watch as the secretary of treasury you're responsible for
[1:51:25] overseeing all of our economy you don't have anyone else to blame but yourself and donald trump and it
[1:51:30] is shameful that you're being an accessory to this and being complicit to this you are a smart man and
[1:51:35] you know better i yield back gentleman yields back the chair recognizes the chair of the house small
[1:51:40] business committee mr williams of texas for five minutes uh mr chairman thank you for being here it's
[1:51:45] going to be a little calmer on this side uh first of all i'm from texas i'm a car dealer and i employ
[1:51:50] hundreds of people and business is great and i appreciate that and with that in my with that i'd like
[1:51:56] to give you some time to respond to what you just uh had to take well i mean one thing is that black
[1:52:01] pre-tax income is leading the country it's up 4.8 percent in 2025 so the uh and i i think it's not
[1:52:10] very wise to be lectured this is the equivalent of lizzie borden lecturing someone on family values
[1:52:17] the democrats towards the american people 21.5 percent the stated inflation and for working
[1:52:26] families up in the 30s due to groceries due to rent due to insurance due to cars
[1:52:32] so you know they created a price level a gigantic step the worst inflation in the a generation or two
[1:52:41] and the american people are recovering from that we have seen real wage growth what is an inconvenient
[1:52:48] fact is that real wages are up under president trump and they went down between four and eight percent
[1:52:54] for working americans under the last administration so i tell people i feel like an emergency room doctor
[1:53:01] for people who have been backed over by a truck you had to stabilize the patient and now the patient
[1:53:08] is up and able to walk and is going to get back on his or her feet well you've been a good doctor for
[1:53:14] main street i can tell you that so i appreciate that with that being said in august of this year
[1:53:20] fincent issued a new rule excluding american businesses and owners from their beneficial ownership
[1:53:25] reporting requirements and this was a great news for main street i can tell you and however many small
[1:53:31] business owners in many districts and across the country has spent significant time and money in
[1:53:35] preparation for the original boi rule uh before the exclusion so uh the question would be can you
[1:53:41] walk us through the steps treasury plans to take to effectively communicate this change to small
[1:53:46] businesses like mine and whether there are plans to address costs already incurred under the prior
[1:53:51] requirement uh congressman what we can do is is alleviate future costs from being incurred and tell the
[1:53:59] businesses that that this data will be deleted that we are doing everything we can to move this process
[1:54:08] with the nra to conclusion and delete the data and that the 33 million small businesses that were on the
[1:54:15] hook for this what i would say is virtually useless information they will not have to endure this again
[1:54:23] well thank you for that answer and in 2025 americans lost 16 billion dollars to fraud and scams the highest
[1:54:29] figure ever reported small businesses regularly find themselves as targets for the scammers through
[1:54:35] attacks like payment fraud and impersonation scams and main street america often lacks the resources of
[1:54:40] larger firms to recover from these scams and many scam networks operate overseas so they can move stolen
[1:54:47] funds to the international financial system before victims even realize they've been defrauded so a question
[1:54:53] mr secretary is how is the treasury planning to fight the scam networks targeting small businesses
[1:54:59] and what role do sanctions and other treasury tools play in cutting off these networks across the u.s
[1:55:05] financial system yep so we've used our available tools and resources to address what is a growing
[1:55:12] problem we look forward to continuing with congress and agencies to ensure that the full force of the
[1:55:17] government is against these scammers and it is unacceptable for them to take money out of the pockets of
[1:55:23] american citizens especially our seniors my last question uh in july director gacki of vincent uh testified
[1:55:30] in front of uh this committee about raising the reporting thresholds for suspicious activity reports
[1:55:36] and currency transaction reports was a priority for treasury leadership and i'd like to follow up on that
[1:55:41] quickly and i know that chairman hill touched on this earlier today in community banks and credit unions
[1:55:46] which we all do business with face an unequal compliance burden lenders are being forced to divert
[1:55:50] resources away from underwriting and customer service which has restricted credit availability for
[1:55:55] small borrows who depend on these on this and these thresholds have not been adjusted to some time
[1:56:01] and inflation alone has pulled a growing volume of routine transactions and mandatory reporting so
[1:56:07] quickly can you provide us with a concrete timeline for finalizing the aml programs rule and sar and ctr
[1:56:13] threshold changes and can you commit that the final rule would mean meaningfully reduce compliance burden
[1:56:19] for community banks and credit unions as opposed to a marginal adjustment congressman i can't give you
[1:56:25] an exact time i can commit to your last point that this is very important rule making and we need to
[1:56:33] get it right because of the burden on small and community banks and we are looking at their special
[1:56:39] place in the financial system in terms of their reporting requirements and their enhanced knowledge of
[1:56:46] their customers my time is up i yield back thanks for your leadership thank you gentleman yields
[1:56:50] back the chair recognizes the gentleman from new york mr torres for five minutes thank you mr
[1:56:55] chair mr secretary are you familiar with the facts of the hugging face hack i am so i want to
[1:57:00] wonder the facts as i understand them a swarm of open ai agents secretly communicated and coordinated
[1:57:06] for about two months without open ai fully realizing what was happening specifically from july 8th to july
[1:57:12] 13th roughly 1200 ai agents exchanged more than 70 000 messages and files through an unauthorized message
[1:57:20] board again without opening i recognizing the scale of what was happening the ai swarm managed to escape its
[1:57:27] sandboxes gain access to the public internet and ultimately hack into the private infrastructure of
[1:57:33] hugging face of the 1200 ai agents involved in the hugging face hack or in the lead up to it do you know how
[1:57:40] many of them blew the whistle and alerted human researchers that an ai swarm had escaped their
[1:57:46] sandboxes and hacked into a private company my understanding is zero the answer is zero so of the
[1:57:52] 1200 agents in the ai swarm not a single one blew the whistle does that concern you well i think we would
[1:58:00] have to understand what each agent was doing and they uh but there's a concern out of 1200 not a single
[1:58:07] one blew the whistle does that concern you well again they're representative exactly what is an agent
[1:58:13] it is not a human that it can be a very limited the uh it could be a very limited program that or it
[1:58:23] could have been tasked with something but a program that escaped its sandbox and hacked into a private
[1:58:27] company is it fair to say that the hugging face incident illustrates how a misaligned or misused ai
[1:58:35] might find and exploit vulnerabilities in the very computer systems that operate our critical
[1:58:40] infrastructure including our financial system i i i agree and that i think we have to
[1:58:48] again we haven't seen where was the liability for that incident well given that agreement do you
[1:58:54] does the administration support any new ai safety regulation in light of the lessons learned from
[1:59:01] the hugging face hack we we have been working the with the labs the with the our financial partners
[1:59:07] on that and you you wouldn't notice is there any specific law regulation that you would support
[1:59:13] in light of the hugging face hack i haven't seen anything yet okay the the leaders of the frontier ai
[1:59:19] labs particularly open ai and anthropic have been effectively disclosing to the public that their
[1:59:25] increasingly powerful ai models could pose an existential risk to humanity if a company is publicly disclosing
[1:59:32] that its own product could pose an existential risk to humanity should that company be permitted to
[1:59:37] access the public capital markets through an ipo i think the liabilities have to be the very well
[1:59:46] outlined in the s1 and in the prospectus and as a former investor now in the public sector i'm not sure
[1:59:54] how one would quantify that i want to move on to the economy on august 4th during an interview on cnbc
[2:00:01] squawk box you said the following quote i got sick of hearing about this k-shaped economy
[2:00:06] i can say here definitively the k-shaped economy is over then on august 6th you wrote on x quote earnings
[2:00:13] growth for mainstream workers at the 25th earnings percentile was 5.5 percent year over year in the
[2:00:20] latest data this quarter you cite wage growth of 5.5 percent is that inflation adjusted that's nominal
[2:00:28] it's nominal okay so the average cpi inflation rate in the second quarter of 2026 was 3.9 percent
[2:00:35] so when you once you adjust the 5.5 percent nominal wage growth for 3.9 inflation you're left with a
[2:00:44] real wage growth of only about 1.5 percent a fact that you neglected to mention in your post also left
[2:00:51] unmentioned is the fact that lower income households depend disproportionately on wages while higher income
[2:00:56] households own a disproportionate share of financial assets from mid-january 2025 to mid-september 2026
[2:01:04] real wages rose cumulatively by 0.5 percent over the same period of time the s p 500 rose cumulatively
[2:01:12] by over 20 percent in real terms so mr secretary how can you possibly declare that the k-shaped economy
[2:01:20] is over when during president trump's second term the assets of wall street are booming while the real
[2:01:26] wages of main street have barely grown well it's the opposite of president biden's term
[2:01:31] because there was no no let me finish when does what can i ask what's the statute of limitations on
[2:01:37] the joe biden blame game that the what's what's the is it because we're approaching the two-year mark
[2:01:42] of the trump administration i i was in a car accident as a teenager my back still did did joe biden wage
[2:01:47] the war in iran did he disrupt the strait of humus did he shut down one-fifth of the world's oil supply
[2:01:52] and l and g exports like when in doubt playing joe biden is that the modus operandi of this
[2:01:56] administration i yield back expired gentleman yields back the chair recognizes the chair of
[2:02:01] the house republican conference mrs mclean of michigan for five minutes thank you mr chair i wish we
[2:02:07] weren't digging ourselves out of the biden economy but here we are so i want to start by saying first
[2:02:12] of all thank you for trying to right the ship right because we all remember what a disastrous economy it
[2:02:19] was inflation uh over nine percent right i think we remember that shutting american oil and gas
[2:02:28] production down so we were dependent but hey uh let's not talk about that let's talk about what
[2:02:35] we're trying to actually do i think george orwell called it memory holding i think so don't let the
[2:02:42] facts get in the way of a good story right um but thank you for being here mr secretary i really
[2:02:47] appreciate it you and your team actually did a tremendous job on the working families tax cuts
[2:02:53] a year later the receipts are in i know the media doesn't want to cover this i know the other side
[2:02:59] of the aisle doesn't want to talk about it but michigan families are taking home almost ten thousand
[2:03:05] dollars more a year we put money back in people's pockets um and now i want to talk a little bit about
[2:03:14] if we could switch gears a little bit who's stealing money out of their pockets last year
[2:03:20] if my memory serves me correctly scammers robbed michigan um families of uh and seniors of nearly 204
[2:03:29] million dollars that's nearly six hundred thousand dollars walking out of my state every um every single
[2:03:36] day which is a lot of money and real money to people when most americans think of a scammer they think of
[2:03:42] you know some guy with a baseball hat on in their parents basement but that's not really what we're
[2:03:49] dealing with today i think it's much more sinister mr secretary can you talk about really who is at the
[2:03:56] other end of that call who's really scamming the american people it's a variety of organized crime
[2:04:03] uh both state and non-state actors across the globe could be north north korea could be in south southeast
[2:04:13] asia these camps that are set up and it can be the bands in the u.s so at treasury we are examining this
[2:04:22] with our agency partners including the fbi homeland security we are shutting them down and in many cases
[2:04:32] recovering those assets for the hard-working people of michigan and i thank you for doing that um so
[2:04:39] often these are massive organized chinese crime syndicates is that a fair statement or is am i overstating
[2:04:47] that many of them are they are run out uh they are run outside of mainland china uh in other southeast asian
[2:04:56] countries um kind of seems like a common sense question but um sometimes my colleagues on the
[2:05:03] other side of the aisle don't operate in in the arena of common sense when we find these fraudsters
[2:05:11] and we shut them down do you think that's a good thing i i think it is the one of the best things
[2:05:18] that we can do uh for hard-working americans especially our seniors yeah so we work hard uh as
[2:05:27] taxpayers um we we give that money to the government who should be good stewards of our hard-working
[2:05:34] taxpayer dollars when we actually find these scammers we should shut them down i think that makes common
[2:05:41] sense i think that makes sense i'm not really sure when votes come up that colleagues on the other side
[2:05:46] of the aisle don't want to vote that way but um i think it's a good thing to shut scammers down
[2:05:51] can you talk at all uh uh about um when you went after them you seized 15 billion dollars in bitcoin
[2:05:59] from the from the prince group the largest forfeiture in american history i'm sure we all saw that covered
[2:06:06] on the news um perhaps not but i think you need to take a victory lap on that think about that you went
[2:06:12] after them and you seized 15 billion dollars in bitcoin from the prince group the largest forfeiture in
[2:06:20] american history how'd you pull that off well again it was a combination our vincent they are some of
[2:06:30] the most dedicated people that i've ever seen since we implemented operation economic outcast we have
[2:06:36] people working from six in the morning till 10 at night and it is for the love of their job that we
[2:06:44] commemorated uh 9 11 on monday with this group and they uh they were enabled then to make sure that
[2:06:55] nothing like that ever happens again and i can tell you that they never stop working on this well if
[2:07:01] you do do me a favor tell them thank you because we appreciate it and we appreciate every dollar that
[2:07:07] you keep in our pocket well that's very important gentlemen's time is expired they don't get the thanks
[2:07:11] they deserve the chair now recognizes the gentlewoman from texas miss garcia for five minutes thank you
[2:07:16] mr chairman and uh welcome uh mr treasury secretary uh less than two years after the trump administration
[2:07:23] took office we are looking at higher prices and more uncertainty in our economy than we have faced in
[2:07:29] decades our country has been forced into a new war in the middle east started by donald trump that is now
[2:07:36] hurting mine in everyone else's district in the past six months gas prices have been up nearly 50
[2:07:44] nationwide and there was no end in sight same for diesel this administration has shown no ability to
[2:07:51] get us out of this reckless war that had started and it is everyday americans who are paying the price
[2:07:59] mr secretary the administration has no real plan it seems to end this war your economic d-day has done
[2:08:05] little to affect any change in this conflict instead of truly isolating iran economically by cutting it
[2:08:12] off from its top trading partner china you have used sanctions to target its heritage and nationality
[2:08:19] the office of foreign assets control recently suspended iran general license g which allows
[2:08:27] iranian citizens to take interest exams like they all said the the law law entrance uh law school
[2:08:33] interest exam the gre which is for graduate students gmat and toefl and a number of others
[2:08:39] do you truly think this is going to affect the war mr secretary or is this just another xenophobic
[2:08:45] policy from this administration aimed at disenfranchising religious minorities and immigrants in this
[2:08:51] country congresswoman do you actually believe that taking the sat will empower people who are being
[2:08:58] starved by their regime as that regime gives billions to their proxies rather than funding
[2:09:03] its people sure my question to you do you think that this is a policy aimed at these at uh the war and
[2:09:13] things that are going on or just another attack and religious minorities and immigrants i i i would
[2:09:20] say that that that is completely specious charge oh it is well you know we got a call from someone who is
[2:09:28] just not not allowed to take the lsat and they would totally disagree with you sir well instead it only
[2:09:34] hurts and discriminates anyone with iranian heritage including iran americans it will also hurt our
[2:09:41] communities because there are so many people that are iranian descent that are heavily represented in
[2:09:47] medicine engineering higher education technology and business with no planned strategy in regard for how
[2:09:54] this affects americans donald trump and you have thrust us into a messy war in iran you have lost the trust of
[2:10:01] the american people and have made a mockery of our country's reputation on the global stage you have
[2:10:07] personally said that one of this administration's primary foreign policy priorities is maintaining
[2:10:12] strong relationships within the western hemisphere instead we're at odds with the second largest economy
[2:10:18] in north america and our second largest trading partner because of how this administration has treated
[2:10:24] them in just the greater houston community area canada represents a vital 12 billion dollar trade
[2:10:30] relationship so how does the trade war with canada one of our closest allies help help the american
[2:10:36] people well first of all it was prime minister carney who said we are at war sure the question is how
[2:10:42] does a trade war with canada one of our closest allies help the american people sure the the terms of the
[2:10:48] terms of trade that the canadians have received the four years they have been the unbalanced and
[2:10:55] imbalanced and trying to bring them back so how does that help the american people that the that will help
[2:11:00] the american people the as the we have better terms of trade that there will be more jobs as we we just
[2:11:08] saw sapporo brewery japanese verb announced that they were relocating into the u.s that helps the american people
[2:11:15] so that's one example hopefully we'll we'll you'll be able to there are many examples well sir would
[2:11:21] you send me a list then with with pleasure and you know as you are from texas i will remind you
[2:11:27] that the texas economy is bigger than the canadian economy well i know that sir i'm from texas i'm a
[2:11:32] native texans unlike some one of our senators do you have an end goal for this new trade war can you
[2:11:38] lay out a better long-term scenario for the american people than free trade with our neighbors
[2:11:43] the free trade has not always been fair trade whether canada imports the steel from overseas
[2:11:52] and it gets backdoored into the u.s markets whether they try to do that with chinese evs
[2:11:57] that again we want fair trade the representative so you think that the the free trade agreement that
[2:12:04] even donald trump approved the last time was not fair again we have seen many things why don't you
[2:12:10] check with our wisconsin dairy farmers that who are unable to sell well sir i'm also concerned about
[2:12:16] beef farmers in texas who trade policies have impacted them my question was it has an impact
[2:12:22] gentle ladies time has expired thank you i now recognize myself for five minutes thank you today
[2:12:29] uh for being here today mr secretary uh this committee's long had concerns that an outbound investment
[2:12:34] screening regime would prove overly broad vague maybe even unworkable so i know you can't really
[2:12:41] get into details but as treasury writes the updated rule can you assure us that it will be narrowly
[2:12:47] tailored and sufficiently clear so that investors have bright line standards and can easily understand
[2:12:53] their obligations under these uh yes sir that we we have about 18 months of dealing with the outbound
[2:13:02] and now the as we perfect the coins act that we will make sure that the all outbound and potential
[2:13:10] outbound uh investors know know their duties their obligations and uh adhere to them thank you mr
[2:13:18] secretary as uh chairman hill noted earlier it was outrageous when the biden administration increased
[2:13:24] the weight of china's rmb in the international monetary monetary funds sdr basket i have legislation that would
[2:13:32] oppose any such increase until china starts playing by the rules can you commit to opposing any increase
[2:13:38] for the rmb in the next sdr basket review i will commit to working closely with you and your staff
[2:13:45] on that uh thank you mr secretary you know a lot of the policies of this administration i wish you
[2:13:51] great success in in bringing china into the things they've frankly already agreed to do i mean the trade
[2:13:57] policies that people complain about i was in manufacturing before i came to congress and we
[2:14:03] weren't competing against other companies we were competing against a foreign government that had decided
[2:14:07] they would own and dominate other industries uh it was disadvantaging in american companies
[2:14:13] so uh frankly the trump administration is taking aim at you know why would we why would we confront uh
[2:14:21] people like china well because they're taking america for granted they're assuming xi xi ping's going to be in
[2:14:27] charge in china longer than president trump is going to maintain the resolve not just in his
[2:14:32] administration but going forward to counter china china committed to be a market economy in the world
[2:14:38] trade order as part of their acceptance into the world trade organization is china a market economy mr
[2:14:44] secretary no sir and at the g20 in ashville we had a communique drafted that criticized non-market
[2:14:54] economies and china would not sign on to that and so i issued a chair statement so 19 to 1 and if you
[2:15:03] could imagine getting all these countries from around the world to agree to that china was a lone holdout
[2:15:08] so i think they've answered the question for you thank you mr secretary that was well played as are so
[2:15:14] many other things that uh you've you've had initiatives on i want to highlight the the scam operations and
[2:15:19] when you look at um you know the illicit finance we certainly have tools uh in place to to gather
[2:15:26] financial intelligence it's always supposed to be with deference to our constitutional safeguards for
[2:15:33] privacy speech we've seen debanking and weaponized government under previous administrations
[2:15:39] and you've restored uh under this administration sanity and common sense uh in many ways there
[2:15:47] um so i guess how do you view balancing uh our constitutional safeguards with the need to be
[2:15:53] effective at shutting down these transnational organizations well i i i think the uh the scammers
[2:16:02] could be divided really into three categories domestic and so we work at those every day but many of
[2:16:09] them are u.s citizens and we adhere to their rights but law enforcement is very vigorous and going after
[2:16:17] them state actors as in north korea and then private sector actors many many of them in southeast asia
[2:16:25] and we have committed substantial resources and again i want to compliment our interagency partners
[2:16:32] whether it's the fbi our homeland on that yeah thank you and some great wins there i think in particular
[2:16:39] shutting down the prince group uh these kinds of uh operations are substantial portions of southeast
[2:16:45] asian state actor economies so there's certainly an intersection there and uh it was just over in
[2:16:51] foreign affairs talking about your work with the state department on those initiatives and so applaud
[2:16:57] that another area that we're seeing um you know these things come to a head uh is with defense
[2:17:04] production act treasury working with other departments coins touches on that and as we use the defense
[2:17:11] production act we're working to reauthorize and modernize that can you commit to work with us to get that
[2:17:15] reauthorized uh yes sir and the my staff would like to engage with you on that especially in the
[2:17:23] syphios area uh thank you mr secretary my time has expired and i now recognize the gentlewoman from
[2:17:29] georgia miss williams for five minutes thank you mr chairman and thank you ranking member waters for
[2:17:34] convening this hearing today and thank you mr secretary for being here mr secretary last year before this
[2:17:39] committee you told us that the core components of the trump economic agenda are trade tax cuts and
[2:17:45] deregulation and that this combination would raise real incomes for families and reassure jobs this
[2:17:51] summer you went even further on cnbc declaring the k-shaped economy is over i'm not here for talking
[2:17:58] points spin or clever framing of numbers that don't really hold up under a microscope or in the pockets
[2:18:05] of the american people i'm here to ask questions for the families that are still struggling in my
[2:18:09] district to keep up with the basic cost of living despite your proclamations in front of g20
[2:18:15] finance ministers and on cnbc they deserve honest answers and that's what my questions aim to get
[2:18:21] to they don't need a trump besant rebrand on their budget they need an honest accounting from you mr
[2:18:27] secretary so according to the bureau of labor statistics real hourly wages fail 0.3 percent over
[2:18:34] the past 12 months mr secretary do you dispute that number yes or no i dispute it yes okay according
[2:18:42] to the bureau of labor statistics wage growth has slowed to 3.1 percent over the year the slowest
[2:18:48] pace in more than five years and down from 3.7 percent in february do you dispute that number yes or
[2:18:55] no i i believe medium wage growth i'm not sure where you're getting that number yes or no the number
[2:18:59] i've seen for medium well mr secretary i'm going to reclaim my time i'm going to reclaim my time
[2:19:04] because these numbers are from our agency the u.s bureau of labor statistics so it's not my numbers
[2:19:09] it's the numbers from the u.s government and wages are slowing at the exact moment the prices are
[2:19:16] rising and that is not a policy that is working that is a policy failing the people that is supposed
[2:19:22] to help families in this country are not asking for talking points they're asking why things are harder
[2:19:29] to buy they're asking why they continue to have more month than money so for my folks at home who may
[2:19:35] not be familiar with the term a k-shaped economy it's two arms in a graph that look like a k one line
[2:19:42] goes up representing wealthy americans and the high earners who are gaining ground and the other line
[2:19:47] unfortunately is going down representing slow growth for lower and middle income workers according to the
[2:19:53] federal reserve bank of atlanta's wage growth tracker the top quarter of earners has seen wage growth of
[2:19:59] 3.9 percent over the past year compared to 3.6 percent for the bottom quarter again not my numbers
[2:20:06] that is from the federal reserve bank of atlanta's wage growth tracker not my numbers mr secretary no
[2:20:12] matter how much it was 4.7 the time is mine mr secretary the time is mine that gap has not closed
[2:20:20] a single month of 2026 not one single month again not my numbers mr secretary so mr secretary given that
[2:20:28] data do you think your claim that the k-shaped economy is over was premature uh again from
[2:20:35] mr secretary do you think that's your proclamation that the k-shaped economy is over i'm not sure what
[2:20:41] i'm the data i have from the same agencies not the federal reserve of atlanta is 4.7 percent for
[2:20:49] the bottom 25 so you're saying the federal reserve bank of atlanta is incorrect i know you noticed earlier
[2:20:54] in your opening statement you quoted them so okay so do you want to do you want to agree with them
[2:20:59] and when you don't want me to do you want to agree with them that we're having a booming third quarter
[2:21:03] over four percent well mr secretary you don't seem to agree with all of their data well do you
[2:21:09] with all their data mr secretary i'm i'm asking the questions here and the time is mine if you're
[2:21:15] watching this at home and you're wondering why your paycheck doesn't stretch as far as it used to
[2:21:20] the numbers you just heard are not a coincidence y'all and not to you either mr secretary this
[2:21:25] administration was told on the record that its data shows wages falling behind inflation wage growth
[2:21:31] at a five-year low and no closing of the gap between the top and bottom and instead of a plan
[2:21:36] to fix it we got a trump rebrand at the end of your written testimony last year mr secretary you said
[2:21:43] together we can build a stronger safer and more prosperous america and i'm all for that i hope
[2:21:49] you can pivot back to that commitment to this committee and to the millions of americans who
[2:21:54] have entrusted this administration with their economic future thank you mr chairman and i yield
[2:21:59] back thank you uh i now recognize the chairman of our subcommittee on digital assets mr style of
[2:22:06] wisconsin for five minutes thank you very much mr chairman secretary thank you for being here with us
[2:22:11] today uh in particular appreciate all your work uh in making the united states uh the gold standard
[2:22:17] in the digital asset era uh huge vote coming up in the senate in the near future on clarity
[2:22:22] a bill that we worked hard on in this committee and appreciate all your support of that we're all
[2:22:26] optimistic the senate is in a position to move forward i'm going to also look at genius which was
[2:22:32] signed into law now over a year ago uh we're approaching the effective date january 18th you and
[2:22:37] your team at treasury uh have been doing a great job getting the rules and regulations uh in order and in
[2:22:43] place uh can you give us an update on uh where we're at in the rulemaking process and uh our ability
[2:22:49] uh to be able to hit the ground running uh come january uh yes sir i am confident that we will have that
[2:22:54] done we have uh during the rulemaking process we have heard from the tens of thousands of interested
[2:23:02] parties they have both from the public they have from stakeholders uh from community banks from the digital
[2:23:09] asset companies and we are working on the rulemaking uh to codify the congressional intent i appreciate
[2:23:18] that uh let me let me shift gears uh you gave a speech in july uh looking at flows of in particular
[2:23:25] foreign funds that was that were impacting uh the broader u.s political ecosystem uh you referenced how
[2:23:32] some of those funds may be flowing through non-profits as it relates and i think your term
[2:23:37] political terrorism this is something that we've been looking at since uh going back 25 years ago to
[2:23:42] the original uh 9 11 and the actions that were taken as we looked at how foreign funds were flowing
[2:23:48] in particular in my work as chair on the administration committee we've been looking at how non-profits
[2:23:55] may be misusing their their protected status to move funds from foreign actors and have an impact
[2:24:04] in our political discourse uh you've engaged uh the power of treasury uh to explore and examine that
[2:24:10] i've been very concerned that funds have flowed in from uh foreign actors uh into some uh 501c tax
[2:24:17] exempt entities in the united states with would then flow those funds through additional 501cs
[2:24:24] to shelter and shield uh the original donor of those funds can you comment on the work that you've been
[2:24:30] engaged at a treasury uh to address this uh this concern uh yes i can't direct the uh particular audits or
[2:24:42] examinations but what we have done the uh is the work with the president's the executive order 13224
[2:24:53] and that so as you said that goes back to the original uh violent acts of 2001 and we are actively
[2:25:04] looking there to see that whether there is foreign influence here whether we saw it today i i have no
[2:25:12] opinion i think people can decide for themselves um and being a non-profit is a privilege and anyone who
[2:25:24] the violates that privilege will lose that status yeah i think your comments in your speech about making
[2:25:31] sure that non-profits board of directors not only know the identity of the donors but also know the
[2:25:37] identity of their grantees is really important in a period of time where we know foreign actors are
[2:25:44] interested in altering our political discourse here in the united states in the legal loophole that allows
[2:25:51] a 501c uh to receive foreign funds uh often our our non-profits are for the altruistic purpose for which
[2:25:59] they were created the concern of course is that they're being exploited uh by foreign actors those
[2:26:04] funds come into a 501c they're being transferred uh to others and they're attempting to use those funds
[2:26:10] to the original donors international actors uh intent so i appreciate your work on this i appreciate the
[2:26:17] speech you gave on this topic uh in july appreciate all the work that's going on in treasury uh in
[2:26:22] particular going back to my first topic optimistic uh that we see a positive vote in the united states
[2:26:26] senate to move forward on clarity it's so important uh that we see us the united states be the leader
[2:26:33] in the digital asset space thank you for being here mr chair thank you congressman mr chairman i yield
[2:26:38] back thank you mr style i now recognize the ranking member of our subcommittee on financial
[2:26:42] institutions dr foster of illinois for five minutes hi there are you having fun yet it started off
[2:26:50] great it's okay i'd like to use i guess a few moments on i guess round three of the manufacturer and
[2:26:56] the finance professor as the first time you showed up in front of our committee i presented a graphic
[2:27:01] with the well-known information that whenever for longer than you and i have been alive every time you
[2:27:06] put a republican in the white house manufacturing employment declines every time you put a democrat
[2:27:11] in the white house it goes up without exception and you i guess volunteered during that hearing
[2:27:17] that that as a finance professor you'd give that an f now president trump came into office
[2:27:22] um promising millions of new manufacturing jobs would be rushing in as a response to his tariff
[2:27:29] policies and other things so we're now just nearly two years in and so far we have not seen millions of
[2:27:36] new manufacturing jobs in fact manufacturing employment is down last time i looked about 35 000 jobs
[2:27:41] so as a as a professor what what grade would you give your administration on restoring millions of
[2:27:48] manufacturing jobs uh congressman i i think you know better than this so the last two years of the
[2:27:54] biden administration we lost 200 000 manufacturing i'm not talking please could you just that this is
[2:28:01] not finance this is real world and in the real world one has to build factories and what we're seeing
[2:28:06] is a manufacturer i have built factories okay there's 1600 people in a manufacturing business in the
[2:28:12] midwest and i and our company has kept those in the midwest we in fact you just last year then you would
[2:28:18] reclaiming my time then you understand that we we have added 300 000 manufacturing jobs this year
[2:28:23] what you the net number of manufacturing jobs down 35 um 35 35 000 um okay that's all right i'm also
[2:28:33] congress's pet phd physicist and chip designer and ai programmer we keep one around for chuckles i guess
[2:28:39] and i'm very gratified that ai is now finally being recognized as a significant threat to our economy by
[2:28:46] seemingly everyone but the president uh do you agree with the president that the whole thing is
[2:28:50] some chinese hoax or do or do you regard ai as a real threat to our economy and our and our government
[2:28:57] and stability of the the i i i believe that as the president does that the ai is the most important
[2:29:06] technology of this century and that we must maintain u.s leadership and i think if you're a chip
[2:29:13] designer who's the greatest the chip company in the world nvidia the president is aligned with jensen
[2:29:18] wong on this well yeah they both want to make money because of the position they're in okay let's let's
[2:29:23] talk about the mythos rollout okay i was it was completely chaotic frankly you know this was not
[2:29:28] something new if you actually had people in contact with the technical people in ai firms you'd know
[2:29:34] that the next generation ai's their their their coding and their hacking capabilities were off the
[2:29:39] charts and you've known it months ahead of time instead you you had when it became public um you
[2:29:46] had early access to mythos granted to one of the giant banks in the country and then as you said
[2:29:52] earlier in your testimony you went down the capitalization chain uh first to the giant banks
[2:29:58] and then the mid-sized banks and at the very very end the the banks you were protecting were the small
[2:30:03] local community banks is that your plan going forward is that what's going to happen next time
[2:30:07] and the time after that that the the small banks are going to be left defenseless for cyber well
[2:30:12] again that's an unfair characterization that the we use the strength and the cyber security of the
[2:30:18] large banks and the we migrated their know-how because the small banks and the community banks
[2:30:25] who no one has championed more than i have the oh come on the number one thing the community banks
[2:30:31] have been asking for it was no interest on stable coins that was their number one ask for the last
[2:30:36] years and we're in the process of getting to work around so i don't don't tell me about how much you
[2:30:41] love well i've met with 500 community bankers this year how many have you met with uh you go to big
[2:30:47] rooms full of bankers they come to me individually and i talk to them in my district um so so i think i
[2:30:55] have a plan on how we're actually actually going to help small community banks on cyber security and how
[2:31:00] we're actually going to uh have a fair distribution of cyber defense and the next time mythos or a
[2:31:06] similar threat comes up and one of the things that can really concerns me is the seeming inability of
[2:31:12] your administration to attract and retain people with any technical competence you know leading your
[2:31:17] ai report was that your national director of cyber security guy called um shane karen cross who has a
[2:31:23] ba in international studies and his main credential is that he was a lawyer for the republican national
[2:31:28] committee your science advisor has a degree in hellenic studies and poli sci all right and his
[2:31:34] main main thing is that he was peter thiel's chief of staff and when i go down your org chart um how do
[2:31:40] you even decide when you're deciding about letting countries have access to ai chips which ai chips are
[2:31:47] really even significant for ai development well we we have a very good good handle the on the ai chip
[2:31:57] allocation and you know i would dispute i i think you don't know robert oppenheimer was not a
[2:32:02] physicist maybe you are hung up on degrees the gentleman's time has expired i now recognize the
[2:32:09] gentleman from california miss kim for five minutes thank you chairman and secretary bassin good to see
[2:32:15] you again thank you for joining us i want to start by thanking you for your great work in launching the
[2:32:21] trump accounts earlier this year and your hard work has actually created lifetime of opportunity
[2:32:28] that combined with your financial literacy efforts that will uplift the american working families
[2:32:35] as we consider uh extending this successful program i've been traveling up and down my districts and
[2:32:43] people are really really excited about this so i have uh introduced some legislation seats act to codify
[2:32:51] this so would what would be uh early feedback that you have received on trump accounts and also your
[2:32:58] thoughts on uh seats act i would greatly appreciate that so i think the trump accounts as i've said many
[2:33:05] times are the most important government benefit for young people since the gi bill as someone who has
[2:33:12] spent decades advocating for financial literacy i think that this will be a real-time financial literacy
[2:33:19] experiment and i think that we are going to create a generation a generation of shareholders uh you know
[2:33:27] unlike many people some in this room who had advocated for baby bonds this is giving every american
[2:33:34] a piece of our great capital markets of our innovation and the uh making them they uh you know realize the
[2:33:43] power of compounding and what we've done at treasury uh we have between seven and eight million families
[2:33:50] who signed up that we anticipate that within a month we will have 70 million and because we will go to
[2:33:57] auto enroll and the the enthusiasm uh and keep in mind that huge numbers of these families are making less
[2:34:05] less than 200 000 less than 100 000 and had no exposure to the equity market and i truly believe that we
[2:34:12] have to couple this financial literacy courses with trump accounts so hopefully either incorporating it or
[2:34:19] mandating this financial literacy program and constantly talking about trauma accounts at schools
[2:34:25] will be great would you agree yes i i couldn't agree more that in the school system at treasury we've created 15
[2:34:32] learning modules and both for children the beneficiaries of the account there's a four-year-old there's a
[2:34:40] six-year-old but importantly many of these are families who have never uh maybe the term wall street
[2:34:48] maybe they click through and now i'm talking about it i think they're gonna have a real interest here it
[2:34:53] will be something that families do around the table and you know i think that this is a unique
[2:34:58] opportunity to bring the 38 percent of households who have no equity exposure to make it a hundred percent
[2:35:04] and i'll join you right there keep on talking about it and have an ownership nation so i want to go to
[2:35:11] talk about the uh taiwan non-discrimination act which is my bill that was passed as part of ndaa last year
[2:35:18] and this legislation directs the imf representative to use the u.s voice
[2:35:23] and vote to support taiwan's membership in imf so i just wanted to ask as taiwan we've been talking
[2:35:32] to taiwanese government officials and as they get ready to formally submit a request to join imf
[2:35:39] i hope u.s will use our voice to support their petition to join or encourage them to do so as
[2:35:46] soon as possible be aware aware of your bill great thank you and um as chairman our former chairman
[2:35:54] mchenry um often used to say economic security is national security and strong taiwan is our best
[2:36:02] tools to counter chinese economic coercion so another aspect of chinese economic activity that concerns me
[2:36:09] is their use of state corporation and predatory lending to dominate critical mineral supply
[2:36:14] chain and control uh energy structure we have strong innovative private companies but they
[2:36:21] cannot go up against ccp on their own this is a matter of national security which is why i introduced
[2:36:27] dominance act uh this will strengthen our global uh critical mineral supply chains and secure our energy
[2:36:34] futures but our multilateral banks also provide key avenue to counter predatory chinese economic
[2:36:41] activities so could you uh talk about that and what u.s should be doing uh differently through the
[2:36:46] world bank and our own institutions to compete with china sure so as we did with the g20 in asheville
[2:36:53] we are pushing for greater transparency and to make sure that these countries do not get into a debt trap
[2:37:00] with rapacious lending as we've seen from china thank you very much secretary and um i yield back uh thank you
[2:37:10] miss kim mr secretary i want to thank you for your testimony today without objection all members will
[2:37:15] have five legislative days to submit additional written questions for the witness to the chairman the
[2:37:21] questions will be forwarded to the witness for his response mr secretary please respond not later than
[2:37:26] please respond not later than october 20th this hearing is adjourned thank you