Bessent testifies on U.S. financial stability in Senate hearing

[0:00] I said, well, you can stay. He said, no, I'm not that sad to stay. So welcome new members of your staff, from my staff, and they're looking forward to working with you and working for you. [0:10] As chairman of the Banking Committee, I'm committed to enacting pro-growth, pro-affordability policies. [0:17] From the Genius Act to the Road to Housing, I am proud of the bipartisan work this committee has done to promote economic growth and affordability. [0:27] As we build on that progress, it's important to remember that affordability is not an abstract concept. [0:35] It's about whether families can afford a home, save for the future, and feel confident that hard work still pays off in America. [0:45] Today, I want to focus on the gains we have made in affordability, growth, and how they fit together with financial stability. [0:54] For many Americans, including families and small businesses at home in South Carolina, [0:59] one of the fastest-growing states, I might add, in the country, these issues are not hypothetical. [1:06] They shape everyday decisions about work, housing, and opportunity. [1:10] Secretary Bess, as you pointed out in your FSOX 2025 report, economic growth and economic security are critical to financial stability. [1:19] As a fellow Charlestonian, fellow South Carolinian, you understand firsthand how economic growth, population growth, and opportunity intersect at the community level. [1:31] FSOX was created to identify and respond to systemic risk. [1:36] But for far too long, FSOX has focused on a climate agenda that damaged financial stability... [1:45] and, as you pointed out, Secretary Besant, treated nearly every single sector of the economy, financial market, and major financial institutions as a potential financial stability vulnerability. [1:57] Under your leadership, FSOX has rightly recognized that long-term economic growth is critical. [2:03] FSOX is the first in the country. [2:03] the first in the country. [2:03] It is the first in the country. [2:03] It is the first in the country. [2:03] We do not accept any lifestyle changes. [2:03] We do not accept any lifestyle changes. [2:03] and economic security are core components of financial stability. A system that slows growth, [2:11] limits opportunity, or prices families out of basic financial services is not a stable system. [2:18] It's a fragile one. Thank you for refocusing FSOC on household balance sheets and household [2:25] financial resilience. When families have savings, access to affordable credit, and confidence in [2:31] their financial future, they are better equipped to weather storms, weather economic shocks, and [2:37] the system becomes more resilient. Strong households also strengthen local communities, [2:43] and strong communities contribute to a more resilient national economy. That's why I'm [2:49] interested on how FSOC balances systemic risk and its oversight with the need of economic growth, [2:55] innovation, and affordability. Reassessing bank regulatory and supervisory frameworks to remove [3:01] undue risk from the financial system. [3:01] Isn't about weakening safeguards. It's about making sure the financial system works as intended [3:09] for the people it serves. Coordination matters too. Businesses should not be caught in the [3:16] crossfire of conflicting rules, duplicative supervision, or regulatory whiplash. When [3:22] regulators fail to coordinate, the consequences don't stay in Washington. They show up in higher [3:28] costs, fewer choices, and less access. [3:32] At the kitchen table. Finally, I want to recognize Treasury's work implementing the Genius Act. This [3:40] framework has the potential to expand dollar dominance, increase global demand for dollar [3:45] dominated assets like U.S. Treasuries, reduce systemic risk, and support economic growth and [3:51] innovation. At the end of the day, affordability, growth, and financial stability must move forward [3:56] together. For families and small businesses across the country, including back home in South Carolina, [4:01] that means an economy that is growing, and that is a economy that is growing, and that is a economy that is growing, [4:03] a financial system that is resilient, and policies that keep opportunity within reach. I am confident that our [4:11] economy will continue to grow, and our financial system will remain resilient. Thank you, Mr. Secretary, for being here, [4:18] and I look forward to your testimony. Ranking Member Warren, you are now recognized for your opening statement. [4:24] Thank you, Mr. Chairman. So, Secretary Besant, as one of President Trump's top economic advisors, you have a lot to answer for. [4:35] SENATOR BESSANT, AS ONE OF PRESIDENT TRUMP'S TOP ECONOMIC Advisors, [4:37] SENATOR BESSANT, AS ONE OF PRESIDENT TRUMP'S top минимum of столько businesses, [4:38] SECRETARY BESSANT RENNER, say any book [4:42] pad or any [4:50] QUEBE TALKSHOP will help TRUMP's [4:51] USE OF TRUMP'S PANCAKE EVENING. [4:57] HE SAYS President Obama paid by [4:58] retracting the [5:03] COVID-19horizon. [5:05] Pulled by canceling Democrats in their [5:05] hands. [5:05] Itsey. [5:05] There have been massive tax cuts for billionaires, big bank supervision has been cut to the bone, [5:13] and sidelining the cops who go after white-collar crime. [5:17] Meanwhile, middle-class families get the short end of the stick. [5:21] Unemployment is growing and prices are up. [5:24] But American families can't even get the basic respect of a straight answer from Team Trump. [5:31] The president lies about prices being lower when every family who's walked into a grocery store knows that prices are up. [5:39] Secretary Bessette tells workers that the Trump administration has created a blue-collar boom, [5:46] while Donald Trump's own Labor Department reports that manufacturing jobs are down by 71,000 since Trump took office. [5:56] But American families aren't fooled. [5:59] When Secretary Bessette, [6:01] and President Trump try to tell them that the sky is not blue and that water is not wet, [6:08] hardworking people know in their pocketbooks just how big those lies are. [6:14] They also know that Trump and his team don't have any plans to fix what is broken. [6:20] Secretary Bessette is here today in his role as chair of the Financial Stability Oversight Council. [6:26] Congress created FSOC after the 2008 financial crash [6:30] to protect [6:31] American families from large financial institutions that load up on debt and then turn around and crash our economy. [6:38] Secretary Bessette could have used FSOC over the last year to tighten regulations so that we don't face more bank failures like [6:48] Silicon Valley Bank or First Republic Bank that crashed less than three years ago. [6:55] Instead, he has helped to get rid of the guardrails so that banks can load up on [7:00] even more debt. [7:01] He's boosted profitability for giant banks and pay for CEOs while making it more likely that all of this ends in yet another taxpayer bailout. [7:14] And what has he done for consumers? [7:16] Secretary Bessette tried to shut down the Consumer Financial Protection Bureau, [7:21] the agency that has returned more than $21 billion directly to Americans cheated by big banks and giant corporations. [7:30] He's effectively told the banks they can cheat as many people as they want and he and Donald Trump will look the other way. [7:38] But it's not just about rolling back safeguards. [7:42] Secretary Bessette is ignoring emergence risks in the economy. [7:46] The private credit market looks like a ticking time bomb. [7:52] Late last year Moody's found that banks had [7:56] $300 billion of exposure and that the risk of a financial crisis is very high. [7:58] And that the risk of a financial crisis is very high. [7:59] And that the risk of a financial crisis is very high. [8:00] And that the risk of a financial crisis is very high. [8:00] And that the risk of a financial crisis is very high. [8:01] The risk posed by these shadowy holdings is growing. [8:05] And as Jamie Dimon said, quote, [8:08] When you see one cockroach, there are probably more. [8:12] But Secretary Bessette and FSOC have their eyes shut tight and have decided [8:17] they don't see any cockroaches at all. [8:20] Here's all you need to know about what's happening under President Trump's and Secretary Bessette's watch. [8:27] Middle class families are paying higher prices for just about everything. [8:31] Middle class families are paying higher prices for just about everything. [8:31] while it becomes harder and harder to get a raise or find a job. [8:36] Meanwhile, Wall Street CEOs are getting the kid-glove treatment [8:41] as Trump policies may be edging the economy closer and closer to another disastrous financial crash. [8:50] Now, President Trump is so busy raking in cash from foreign governments [8:54] and building his gold-encrusted ballroom [8:58] that he's completely out of touch with how his economy is making life harder for millions of Americans. [9:06] We are only one year into Donald Trump's second term, [9:10] and if Trump and Besson don't wake up and change course quickly, [9:15] the economy may keep delivering for billionaires, [9:19] but it's going to get even worse for American families. [9:23] Thank you, Mr. Chairman. [9:25] Secretary Besson. [9:32] Chairman Scott. [9:34] Ranking Member Warren and members of the committee, [9:36] thank you for inviting me to discuss the Financial Stability Oversight Council's 2025 annual report. [9:42] This report is the culmination of extensive collaboration among FSOC members. [9:48] I'd like to thank them for their hard work and dedication [9:51] in advancing the President's bold vision for a better America. [9:56] Since day one, President Trump has focused on building parallel prosperity, [10:01] an era of economic expansion where Wall Street and Main Street, [10:04] as well as the U.S. economy and the U.S. economy grow together. [10:05] To that end, Treasury has tirelessly pursued pro-growth policies to unlock the potential [10:11] available to all Americans when they are free to save, invest, build businesses, and drive [10:17] their own economic destinies. [10:19] The Financial Stability Oversight Council plays an important role in delivering on this agenda. [10:25] Too often in the past, we have seen regulation by reflex. [10:29] Rather than preempting crises, regulators have frequently reacted to them after the fact. [10:33] They've played the role of hazmat cleanup team instead of preventing dangerous spillovers in the first place. [10:40] Regulation by reflex has led to a regulatory myopia that has undermined safety and soundness. [10:48] Under President Biden, the bank regulators preoccupied themselves with reputation risk, [10:54] now discredited climate-related financial risk, and other risks with no clear nexus to safety and soundness. [11:01] At the same time, they centered supervision on management, [11:05] and other governance matters that distracted examiners and banks' risk managers from the real risk to safety and soundness. [11:12] The result, predictably, was the second, third, and fourth largest bank failures in U.S. history under his administration. [11:19] Besides undermining safety and soundness, regulation by reflex has driven excessive regulation. [11:26] That can lead to economic stagnation, and economic stagnation is itself a threat to financial stability. [11:35] Federal agencies must avoid the temptation to create a zero-risk financial system, [11:42] which would result in what others have called the stability of the graveyard. [11:46] FSOC should aim to identify vulnerabilities that could lead to systemic crises [11:52] and encourage the private sector to mitigate those risks before recommending additional regulation. [11:58] FSOC should also work with its members to support efforts to avoid or pare back existing regulation [12:04] that stifles pro-growth legislation, [12:06] and to reduce risk of defaults and financial stress. [12:09] The best way to achieve these goals is by centering economic growth and economic security at the heart of FSOC's agenda. [12:18] Promoting economic growth and economic security is essential to ensuring financial stability. [12:25] Economic growth strengthens households, business, and financial institution balance sheets, [12:32] creating capital buffers that reduce the risk of defaults and financial stress. [12:37] An economic [12:38] security reinforces domestic production capacity, raising living standards, while reducing vulnerability [12:46] to external shocks and supply chain disruptions. [12:49] FSOC's annual report prioritizes economic growth and economic security accordingly with [12:55] a specific focus on our four policy areas – Treasury markets, cybersecurity, regulatory [13:01] modernization, and AI. [13:04] First, the Council is ensuring that the U.S. Treasury market remains the deepest and most [13:08] liquid in the world. [13:09] The Council is supporting efforts by member agencies to strengthen this market against [13:14] future shocks, including through the Interagency Working Group on Treasury Market Surveillance [13:20] and the Market Resilience Working Group. [13:22] Ongoing monitoring and targeted reforms by individual agencies remain essential to financial [13:27] stability. [13:28] Second, the Council is taking action to protect our financial system from increasingly sophisticated [13:34] cyberattacks. [13:35] Nation-state actors and criminal groups continue to target our financial stability. [13:38] To address this risk, the Council is supporting expanded information sharing, joint monitoring, [13:46] and scenario-based exercises, and is emphasizing the need for regulated firms to manage cyber [13:52] risk tied to third-party service providers. [13:56] Third, the Council is committed to supporting efforts to modernize supervisory and regulatory [14:02] frameworks for banks and credit unions. [14:04] Going forward, regulation and supervision should address material risk, enhance transparency, [14:09] and reduce unnecessary burdens, particularly for community banks. [14:19] Fourth, the Council is prioritizing the responsible use of artificial intelligence to strengthen [14:24] financial stability. [14:26] The Council is working with public and private sector partners, including international counterparts, [14:31] to enhance system resilience while closely monitoring emerging risk. [14:35] I will close by highlighting our progress and enhancing the utility of our annual report. [14:40] In this year's report, FSOC shifted away from the U.S. Treasury Market Surveillance Working [14:43] Committee from its past approach, where nearly every major market and financial sector was [14:48] described as a financial stability vulnerability. [14:51] By introducing a new structure centered on fostering economic growth and security, we [14:56] are tuning out the white noise to concentrate on the issues that matter most for U.S. financial [15:01] stability. [15:02] With this overview, I look forward to taking your questions. [15:07] Thank you, Secretary. [15:08] To all the members, we have essentially full attendance, and it looks like everyone wants [15:14] to ask a question. [15:14] So I will be pretty consistent on calling us to five minutes. [15:20] I just want to make sure that you guys have a little time to prepare for that. [15:24] Just so long as it's everybody else. [15:27] Well, of course. [15:28] Yes, yes, yes, yes. [15:29] We'll work on that. [15:30] Okay. [15:32] Secretary, I'd love to give you a couple minutes to respond to some of the things the ranking [15:37] member said, starting with the fact that two of the three largest bank failures in American [15:45] history happened under President Biden, not President Trump. [15:48] Correct? [15:50] Correct. [15:52] Number two, under President Biden, we saw devastation in household after household after [16:03] household. [16:03] He dug a big hole where the average family was losing, at the end of his term, over $1,000 [16:11] a month in spending power. [16:13] Accurate? [16:15] I would say workers suffered under policies championed by the Biden-Warren economy. [16:23] And Trump? [16:24] President Trump has had to fill that hole. [16:29] As a matter of fact, we've seen some of the strongest GDP growth that we've seen in decades. [16:36] We've seen strong GDP growth in spite of many, but not all, of the members on my right side [16:44] of the room voting for the longest government shutdown in history. [16:48] Despite that, we have seen extremely strong economic growth. [16:52] If you look at the success, and this doesn't get a lot of attention. [16:55] But let's make sure that it gets more today. [16:56] If you look at the success of the Working Families Tax Cut Bill, for those folks in [17:01] blue-collar America, for the folks who are working every single day, sometimes two jobs, [17:07] trying to make sure that their ends meet, when they look at sitting down at the kitchen [17:10] table wondering if anyone is paying attention in Washington to the suffering and the challenges [17:16] around the country in their household, the answer today is absolutely, positively, unequivocally, [17:23] yes. [17:23] We know that. [17:24] Because in the working families tax cut bill, if you look at the success of the Working [17:25] Families Tax Cut Bill, we saw tips, if you earn tips in America, your taxes went down [17:34] significantly. [17:35] Is that an accurate statement? [17:38] Yes, yes, sir. [17:39] No tax on tips, no tax on overtime, no tax on Social Security, deductibility of auto [17:45] loans for American-made cars, and every Democrat voted against that and in favor of the largest [17:50] tax hike in history. [17:52] On top of that, because we understand that raising children have never [17:57] been more expensive, and frankly, if you looked at the attempt of my friends on the left on child [18:03] care, some of their proposals would have taken child care from average of $15,300 to $29,000, [18:12] and some of the estimates given by their bill that they wanted to get passed under President [18:17] Biden. [18:18] We actually increased the child tax credit to $2,250, $2,200, $2,200, right? [18:25] $2,200. [18:25] $2,200. [18:26] When you compare the two economies and compare the two levels of leadership that we're seeing, [18:31] in great contrast, back-to-back leadership, there's no question that if you're looking [18:35] for someone focusing on working-class Americans, undeniably, that would be the Trump economy [18:43] and the Trump administration. [18:46] Mr. Chairman, during Joe Biden's tenure, CPI was 4.7% on an annualized basis, cumulative, [18:55] cumulative CPI was 21%. [18:58] There was a loss of real purchasing power for working families. [19:01] Thus far, we've seen an increase in real wages, CPI for 2025 was 2.7%, and we have seen it fall [19:11] for the past three months to 2.1, and there is an index called Truflation, which is observed [19:18] inflation, not measured inflation, which comes with a lag that just fell below 1%. [19:23] Wow. [19:24] I only have a minute left. [19:25] I'm holding it right now. [19:26] I'm going to go back to the question that you asked me earlier. [19:28] I'm going to go back to the question that you asked me earlier. [19:29] I'm going to go back to the question that you asked me earlier. [19:30] I'm going to go back to the question that you asked me earlier. [19:31] I'm holding everyone to the same standard, including myself. [19:34] Probably not my last question, but I'm getting close to the end. [19:37] When inflation in 2021 hit 9%, bad or good for the American economy? [19:47] Terrible. [19:48] Terrible for the American economy. [19:50] Terrible for the American people. [19:51] Number two, when President Trump has been able to keep inflation under 3%, still heading [19:57] towards our goal of 2%, much, much better for our economy, and as a result, interest [20:02] rates have been able to come down consistently. [20:06] Yes, we've seen the interest rates come down this year, and the 10-year U.S. Treasury had [20:13] its best year since 2020, when the bond markets and our G7 colleagues actually had rate hikes. [20:22] We had rate decreases. [20:24] Only have 10 seconds. [20:25] At the end of the day, home ownership and affordability is more likely now in the Trump [20:30] economy than it ever would have been under the Biden economy. [20:34] Ranking member? [20:34] Thank you, Mr. Chairman. [20:37] So for a solid year while he ran for president, Donald Trump promised pretty much every day [20:42] that he was going to lower costs on day one, on day one, if he was elected. [20:47] Those were his words, not mine. [20:50] So Secretary Besant, you are one of the president's top economic advisors. [20:54] Let's just start with a little truth telling about the Trump economy one year in. [21:01] Affordability is the top concern for Americans across the country. [21:05] Donald Trump has called affordability, I want to get this right, a hoax. [21:10] He's called it a scam. [21:11] He's called it a con job. [21:13] You are the Secretary of Treasury. [21:15] You know the numbers. [21:17] Is affordability a hoax, a scam, or a con job? [21:24] Senator, it may be a bit nuanced for you, but what President Trump is referring to is [21:30] the media saying that the affordability crisis was generated by this administration, when [21:34] it was you and President Trump. [21:35] Yes. [21:36] President Biden, who destroyed the buying power of the American people. [21:41] So there is an affordability crisis, and you were front and center in it. [21:45] So let me make sure that I understand. [21:47] Donald Trump is not saying that affordability, what's happening to families right now, is a hoax? [21:53] He is saying that trying to lay the blame at this administration, rather than the Biden-Warren economy, is a hoax. [22:01] Okay, so it all happened before he got it. [22:05] It's happened since then. [22:06] Nothing is a hoax here. [22:08] 21.5% cumulative inflation. [22:11] Let me just ask about what's happened in the one year that Donald Trump has been president. [22:16] Last week, President Trump said, quote, we have the groceries going down. [22:23] Did grocery prices drop in 2025? [22:27] Numerous prices have. [22:29] Did grocery prices drop in 2025? [22:33] Numerous grocery prices have. [22:34] I'm sorry. [22:36] I don't know if you can't hear me. [22:38] Did grocery prices drop in 2025? [22:42] Numerous grocery prices have gone down. [22:45] Some of them. [22:46] And in fact, we have seen inflation at 2.1% for the past three months. [22:51] Have you seen the Bureau of Labor Statistics, that is Donald Trump's own Bureau of Labor Statistics numbers, [22:59] that report that grocery prices were 2.4% higher [23:04] at the end of 2025 than they were at the end of 2024? [23:10] Trump's own Department of Agriculture has projected that those prices would climb higher in 2026. [23:19] And under Donald Trump, families are paying more and more for groceries. [23:24] So if you're just going to insult people by denying the facts that are out there and tell people they're doing great when they're struggling, [23:33] I think that's just another way to say you don't have a plan to bring down these prices. [23:40] You're not willing to admit the failures of the Trump administration. [23:44] I will ask you a question in just a sec here. [23:48] It's not just groceries. [23:50] The numbers from Trump's own economic agency show that Americans are paying more for utility bills, [23:57] more for health care, more for housing construction. [24:01] Families aren't fooled by these lies. [24:04] Mr. Secretary, you owe it to American families to own up what's going on. [24:09] And Secretary Besson, I have one more question for you while I have you here. [24:14] You ran the search for Donald Trump's Fed Chair nominee. [24:18] And Trump promised, quote, anyone that disagrees with me will never be Fed Chairman. [24:24] Kevin Warsh got the nod last Friday. [24:27] And then over the weekend, Donald Trump joked [24:29] that he would sue Mr. Warsh if he failed to lower interest rates. [24:34] At least I think it was a joke. [24:37] But just in case, this should be an easy one, Mr. Secretary. [24:41] Can you commit right here and now that Trump's Fed nominee, Kevin Warsh, [24:46] will not be sued, will not be investigated by the Department of Justice [24:51] if he doesn't cut interest rates exactly the way that Donald Trump wants? [24:56] I... [24:59] That is up to the President. [25:01] Can you commit that you will... [25:03] I'm sorry. [25:04] You can't say that he won't be sued if he doesn't drop interest rates? [25:09] And he won't be criminally investigated? [25:12] That was supposed to be the softball. [25:14] The President also made a joke about you that I won't repeat, Senator Warren. [25:16] That was the easy one. [25:17] Oh, actually, I will. [25:18] He said he had reservations. [25:19] You know, if this was a joke, why not just say so? [25:22] You can't commit... [25:23] It was a joke. [25:24] And he made a joke about you, too, Senator Warren. [25:26] Yes, he did. [25:27] He got a lot of laughs. [25:28] Got a lot of laughs. [25:29] Yeah. [25:30] So I don't know if you want to respond to that. [25:31] You know, I do want to respond. [25:32] I don't think the American people are laughing. [25:33] But what I can tell you is Mr. Warsh is highly qualified. [25:34] They're the ones who are struggling with affordability. [25:35] And why don't you tell the nation what you told me, that you held up Chair Powell's [25:44] renomination. [25:45] We're going to move on to the next one. [25:46] Senator Rounds, the floor is yours. [25:48] Thank you, Mr. Chairman. [25:51] Mr. Secretary, first of all, thanks for being here and for your service to our nation. [25:56] I'm going to come back in, talk a little bit on the text. [25:58] I'm going to talk a little bit on the technical side for just a minute. [26:02] The FSOC's 2025 annual report recommends that its member agencies use the council's artificial [26:10] intelligence working group to identify regulatory impediments to the responsible adoption of [26:15] AI by financial institutions. [26:18] From your perspective, what are the biggest impediments today that prevent banks from [26:24] adopting AI responsibly, especially for compliance? [26:28] Fraud detection and risk management. [26:31] Well, as you know, AI is an exciting and new technology. [26:38] And there's a great amount of learning to do here. [26:41] So FSOC, Treasury, the regulatory agencies are working with our private partners to implement [26:50] in a gradual way robust usage of AI. [26:55] AI can be a great tool. [26:58] AI, we have to also think that AI can be a risk through state and non-state actors. [27:04] So it is a public-private partnership. [27:07] And we are pushing very hard across the agencies and at Treasury. [27:13] FSOC's report also recognizes that overly complex and subjective supervision like reliance [27:20] on vague concepts, such as reputational risk, as you mentioned in your opening statement, [27:25] restricts valuable activities. [27:28] Given FSOC's push for clearer standards and responsible AI adoption, would a time-limited [27:34] AI sandbox for financial institutions with clear guardrails help firms test AI tools [27:40] in a controlled setting while regulators evaluate risks and benefits? [27:44] Senator, that is clearly the one very interesting option. [27:51] And we are considering that moving forward. [27:53] We'd be happy to work with your staff on that. [27:56] I feel very passionate about that part of it. [27:58] I would look forward to working with your team as well, sir. [28:01] I'm also just curious. [28:04] We've talked now and the discussion will go on and on about how we build the economy and so forth. [28:12] But I think just for the American public, since they probably don't get an opportunity to just have a back and forth [28:17] with the Secretary of the Treasury very often, let's talk a little bit about how we really reduce the price [28:23] of getting a home for an American family. [28:27] I think a lot of it has to do with bringing down the interest rates that charge in the 30-day period. [28:30] Can you share with us a little bit, you know, we talked about Treasuries and you mentioned that the rate of Treasuries, [28:37] the cost of Treasuries is coming down. [28:39] Can you share a little bit about what it takes to bring down the price of Treasuries with regard to the growth of GDP? [28:44] And when Treasury rates come down, what that does for an average American homebuyer who's looking at a 30-year mortgage? [28:50] Well, I'd be glad to, Senator, because President Trump is focused on Main Street and not Harvard Square. [28:56] So a mortgage rate is too complex. [29:00] A mortgage rate is two components. [29:03] We could say that it is derivative of the 10-year, but it's really a seven and a half year. [29:08] And we have seen that decline. [29:10] And then it is the spread between the 10-year bond and the actual mortgage security. [29:17] And we have seen that is at multi-year lows. [29:20] So what we saw in January was the lowest mortgage rates in almost three years. [29:26] You know, we've got $37 trillion in debt. [29:29] We've got a lot of folks back out there saying if you've got that much debt and you're paying interest on it, [29:34] that competes with folks that want to loan you money on a mortgage. [29:39] Can you talk about what it means to build GDP and how someone who is looking at laying out bonds and so forth, [29:47] as you build GDP, what that does and how that impacts a homeowner? [29:50] Well, yes, because two things, sir. [29:54] We brought down the fiscal deficit for the calendar year. [29:57] So from 2024 to 2027, we brought down the fiscal deficit. [29:58] So from 2024 to 2025, at 2024, the deficit to GDP, which is a very important number, was 6.9, 7%, [30:06] highest when we weren't at war or in a recession. [30:10] We brought it down to 5.4. [30:12] That was a combination of the holding spending and growing the economy. [30:18] And as we continue to do that, interest rates will naturally decline, and it pushes out inflation. [30:27] What we can see from an MIT survey, [30:29] the study was that the Democrats' spending was responsible for almost half of the great inflation. [30:36] The overspending, according to MIT, was responsible for that and penalized American homeowners. [30:43] So by controlling the budget, growing, and in a responsible way, we will bring down mortgage rates. [30:51] And I would say that building costs are now down in the year. [30:55] Thank you. [30:56] Thank you, Mr. Chairman. [30:57] Yes, sir. [30:58] Thank you, Mr. Chairman. [30:59] Mr. Secretary, the President announced on January 9th, in his words, quote, [31:03] effective January 20th, 2026, I, as President of the United States, [31:08] am calling for a one-year cap on credit card interest rates of 10%. [31:13] In remarks at the World Economic Forum in Davos, the President further said, quote, [31:17] the profit margin for credit card companies now exceeds 50%. [31:21] He also indicated that Americans are paying 28% interest rates. [31:26] You were one of his top economists. [31:28] And I'm advised, Mr. Secretary, do you support interest rate caps to improve affordability on credit? [31:33] I wholeheartedly support President Trump's policy. [31:36] And I think that what you've just said would be in direct contrast to what Senator Warren said about this administration favoring the big banks. [31:44] But those are facts. [31:46] Well, I don't think my statement indicates at all what Senator Warren said or meant. [31:53] I wanted an answer. [31:54] You gave me one. [31:55] But let's look at the current situation. [31:58] We already have legislation that protects service members by putting a 36% cap not just on credit cards but all credit relationships. [32:08] And it protects them from being exploited. [32:11] And as my youth, I was a company commander and saw it firsthand. [32:16] Would it make sense as a first step to provide a 36% interest rate for all Americans, not just service members? [32:26] 36% doesn't seem like much protection to me, Senator. [32:28] Well, it's better than some of the things that are being presented to service members without the rates. [32:37] These new plans to buy commodities and sometimes the rates go to 500. [32:45] And still today, you have intrapreneurs who are charging extraordinary rates. [32:50] And particularly to vulnerable populations, which I know they don't congregate at Harvard Square, but they also don't hang out in New Haven either. [32:57] So thank you. [32:58] So I think that would be a sound step, Mr. Secretary. [33:03] Senator, you haven't seen all of New Haven. [33:07] I haven't. [33:08] But I've seen a lot of it. [33:10] The parts that you might have missed. [33:14] The situation at Fannie and Freddie is significant. [33:19] We have significant federal interest financially in Fannie and Freddie. [33:23] But under the director, Mr. Pulte, these taxpayer-owned assets are no longer in compliance. [33:29] They're no longer in compliance with the law or with stock exchange listing standards. [33:34] Pulte has appointed himself as director of both boards, even though the law says, quote, [33:40] the director may not hold any office position or employment in Fannie or Freddie. [33:46] A majority of the Fannie board has not been determined to be independent. [33:49] The audit committee is no longer comprised entirely of independent members. [33:53] And the committee has been, the governance has been sacked by political affiliates. [34:00] These all are prohibited by law and regulation. [34:03] So how will you bring them into compliance, Mr. Secretary? [34:06] That would be FHFA, not Treasury. [34:10] Excuse me. [34:12] You are one of the largest, or the taxpayers are, you provided them, Treasury did, not you personally, [34:19] a $200 million bailout, billion bailout in 2008. [34:24] And you have no interest in Fannie or Freddie? [34:27] I'm very interested in Fannie and Freddie. [34:29] And I'm interested in its fulfilling. [34:31] It's the mission to the American people to keep mortgage rates low. [34:35] What about following the laws? [34:37] So, again, you should ask Director Pulte. [34:43] I do not see, I don't think this creates a financial. [34:48] All right. [34:49] You have nothing to do with Fannie or Freddie. [34:51] Director Pulte has said that you and him are, quote, very aligned and we meet regularly about the conservatorship. [34:59] By the way, it's in conservatorship because of Secretary Paulson, your predecessor. [35:02] According to Fannie and Freddie's annual reports, the companies, quote, continue to rely on financial support from Treasury pursuant to our senior preferred stock purchase agreement under which taxpayers own one million preferred shares and a warrant to purchase up to 80% of their shares. [35:17] Treasury staff manages those shares and warrants for the taxpayers. [35:21] Your predecessor, Hank Paulson, placed these companies into conservatorship. [35:25] So you have the premise or the power to place Fannie and Freddie into conservatorship. [35:31] I would think that that gives you a little bit of leverage talking to Mr. Pulte about why he's not following the law. [35:37] You're reneging on responsibilities, Mr. Secretary. [35:40] And you're also having, being the senior person here, your behavior, to some of my colleagues, is absolutely childish. [35:48] Thank you. [35:50] Thank you, Senator. [35:51] Good to see him. [35:53] Senator Kennedy. [35:56] Hello, Mr. Secretary. [35:57] I'm over here. [35:58] How are you? [35:59] Good. [36:00] Mr. Secretary, as you're also head of the IRS, we've had some tough ice storms. [36:04] Yes. [36:05] Would you and your colleagues consider an extension to allow people to file taxes a little bit later? [36:14] Senator, I've been in touch with the governor of the great state of Louisiana, and he and I and my staff are working on that. [36:21] It is traditional to grant extensions for events like this. [36:26] Good. [36:27] If Canada came to the United States, let me preface this by saying I understand the tariffs. [36:37] They have a number of purposes. [36:40] But the foremost reason for tariffs is to try to stop other countries from taking advantage of us through either their tariffs or trade barriers. [36:51] If Canada, for example, came to the United States and said, we're going to zero tariffs in the United States, all of them are off on our end, would you, Mr. President, speaking to our president, go to zero tariffs? [37:11] Yes. [37:12] And then just let Canadian companies and American companies compete on a level playing field? [37:19] Absolutely not. [37:20] As we saw last week when Prime Minister, two weeks ago when Prime Minister Carney went to China, he lowered tariffs on Chinese EVs from 100 percent to 6 percent. [37:31] U.S. has 100 percent tariff on Chinese EVs. [37:35] We couldn't let that, we couldn't let our northern border be used as a way for Chinese EVs to come into the U.S. [37:41] Right. [37:42] Okay. [37:44] I'm going to lead you a little bit because Senator Scott is a she-bear when it comes to time. [37:53] The poverty rate, according to the Census Bureau, is 11 percent, isn't it, in America? [38:01] I'll take it. [38:02] I'll take your word, Senator. [38:03] And that's, the Census Bureau defines poverty, is it not? [38:09] Yes, sir. [38:11] Is it not true that the Census Bureau in defining poverty, and it's true, [38:18] in determining that our poverty rate is 11 percent or 36 million Americans, which makes us look bad, [38:26] only will consider direct cash payments from the federal government to poor people, such as, let's say, SSI payments or TANF payments? [38:36] Correct. [38:37] Okay. [38:38] And isn't it true that the Census Bureau in determining poverty doesn't include things, doesn't include non-cash payments, doesn't include Medicaid or food stamps? [38:49] Or housing subsidies or refundable tax credits? [38:54] Isn't that true? [38:55] That is correct, Senator. [38:56] Yeah. [38:57] Let me give you an example. [38:59] Mom, two kids, poverty level for her and her kids is $27,000. [39:09] Mom works part-time. [39:12] She makes $11,000. [39:14] According to our Census Bureau, she's poor. [39:18] She's below the poverty line. [39:20] But, you know, I'm not saying that. [39:22] But she also receives, she works, I recall I said, makes $11,000 a year. [39:32] She receives $4,100 in refundable earned income tax credits, $3,400 in refundable child tax credits, which means she gets a check, [39:43] $9,200 in food stamps, $9,500 in housing subsidies, $900 in utility bill subsidies, [39:52] $16,000 in food stamps. [39:54] That's $6,000 in Medicaid, $31,000 a year in free school lunches, and $6,000 in TANF payments. [40:04] If you add that up, that's $64,100 a year, according to math. [40:11] I'll believe your arithmetic, Senator. [40:14] Okay. [40:15] But using the Census Bureau's definition of poor, they don't include all these payments. [40:23] They just include her income and the TANF payment. [40:27] Does that make sense to you? [40:30] No, sir. [40:31] And you should bring that up with the Commerce Department. [40:34] I know, but you've got influence. [40:36] I know how close you and the Commerce Secretary are. [40:39] I'm hoping you could bring it up with somebody above. [40:45] The President says we're opposites, and I'm tall. [40:50] I'm not going to comment on that. [40:52] Would you talk to the President about this? [40:54] If you include all cash and non-cash payments, the poverty rate in America is 1%. [41:01] That's a good point to end on. [41:03] Thank you, Senator. [41:04] I told you he was a she-bear. [41:05] I'm not quite sure. [41:07] Senator Moreno, you and I will talk about the she-bear later. [41:11] Let's go on to Senator Van Hollen. [41:16] Thank you, Mr. Chairman. [41:18] Mr. Secretary, I think you would agree that the credibility of the Secretary of the Treasury is important, [41:24] and I want to give you a chance to retract a statement that you made on national TV. [41:32] Alex Preddy was shot 10 times and killed by federal agents in Minneapolis. [41:37] The administration, some administration called him a, quote, domestic terrorist. [41:44] You suggested that Alex Preddy was culpable in his own killing because he had a gun in his waistband holster, [41:53] which he was licensed to carry. [41:55] When asked, you said, quote, I'm sorry this gentleman is dead, but, and you went on to say he had a weapon, [42:03] suggesting that he was culpable. [42:05] He was culpable in his own killing. [42:07] So, Mr. Secretary, today, would you like to retract that statement? [42:13] I would not. [42:15] And would you like to express remorse over the death of Ashley Babbitt here in the Capitol? [42:22] Oh, I have expressed remorse over that. [42:25] So I've done that, Mr. Secretary. [42:27] Mr. Secretary, please don't. [42:29] So you think, I just, I have other questions, but I actually would have expected you to take this opportunity [42:36] to rephrase your response to that question. [42:38] So you think the fact that he legally had a gun justified his killing? [42:43] I didn't say that at all. [42:45] You said, do you think he was culpable, partly to blame in his own killing because he had a gun? [42:50] I did not say that. [42:54] I'm asking you a question now. [42:56] Do you believe he was in any way culpable for his own killing because he legally carried a gun? [43:02] Again, this is an AFSOC hearing. [43:04] Yeah, but you're the Secretary of the Treasury. [43:06] Why don't we talk about financial stability and oversight? [43:09] I'm happy to, Mr. Secretary, but your credibility is important. [43:12] And in that response, you really, I think, you know, let down the country because we expect honesty after that kind of terrible tragedy. [43:24] Let me ask you about AFSOC. [43:26] I'm glad that you've all established a household resilience committee because people are being financially squeezed from every side. [43:35] And. [43:36] I've got a whole bunch of quotes here from candidate Donald Trump on the campaign trail. [43:41] Starting the day I take office, I will rapidly drive down prices and we will make America affordable again. [43:48] It's interesting he used that phrase since he's been making fun of the affordability phrase recently. [43:55] But I listened to your exchange with Senator Warren and the facts show very clearly that inflation has not been eliminated. [44:04] Has it? [44:05] Well, it is undesirable to completely. [44:07] Eliminate inflation. [44:08] What is desirable is to get back to the Fed's 2% target. [44:11] And for the past three months, we've been at 2.1% Senator. [44:15] Yeah. [44:16] No. [44:17] Yeah. [44:18] The 21.5% under the Biden administration. [44:20] Yeah. [44:21] Look, look, Mr. I know how you're playing games. [44:24] You're doing the aggregate over the Biden administration. [44:26] The last few months. [44:27] And you are. [44:28] No, the number 2.7 is your own number for last year, the year of the Trump administration. [44:32] So let me ask you. [44:33] And you're being a deconstructionist and saying day one. [44:36] And great. [44:37] Well, I'm just reading the president's own statements. [44:40] I mean, I'm glad you all have the same talk. [44:42] Chairman, I ask you now to consent that these statements be placed in the record. [44:47] Objection. [44:49] All right. [44:50] Look, Mr. Secretary, you used to believe that tariffs would increase inflation in prices. [45:01] Isn't that true? [45:02] I wrote that in a letter to my investors. [45:05] But a year before, I also wrote that I thought Senator Warren would be the Democratic president. [45:10] So I wrote that down because I didn't want to be presented as an intellectual nominee. [45:11] Okay. [45:12] But Mr. Secretary, please. [45:13] So my predictions have been bad. [45:14] Please. [45:15] Have been bad. [45:16] Okay. [45:17] Mr. Secretary, it was January 2024. [45:18] You said that increased tariffs would raise prices. [45:21] No, I said they could. [45:22] And I also said it would strengthen the dollar. [45:25] And the opposite has happened. [45:27] Prices have not gone up due to 150 years of data from the San Francisco Fed. [45:32] Mr. Secretary, you're again, you're cherry picking your cherry picking numbers. [45:37] As I already said- [45:38] It is a fact that- [45:39] that prices continue to go up. And I understand that is desirable over the long term. I understand [45:45] that you said just at this hearing that building costs are down. I just want to point out for the [45:50] record that the National Association of Home Builders said on January 29th, not very long ago, [45:55] that costs are up. Construction costs account for about 65 percent of average home prices in 2024. [46:02] And they say, and I'm quoting, record high for construction costs since the inception of the [46:10] series in 1998. Not the Biden administration, 1998. Thank you, Mr. Chairman. Is that a 2024 number, [46:19] Senator Hagerty? This is a number from the home builders. I'm happy to share it with you. Thank [46:23] you, Senator Hagerty. Thank you, Mr. Chairman. Secretary Besson, it's always great to have you [46:27] here. Good to see you, Senator. There's not a day that goes by that I don't get someone complimenting [46:32] on the... [46:33] Great work that you and your team are doing at the Department of Treasury. If you'd like an extra [46:36] moment to respond to Senator Van Hollen, I would be more than welcome to... No, I think he speaks [46:41] for himself. Okay. Well, Secretary, over the years, excessive and misguided regulation distorted [46:47] markets and imposed undue cost on the American people. I'm particularly concerned about this [46:53] dynamic in our banking system. As you and I wrote together in the Wall Street Journal, Dodd-Frank [46:58] sought to end, quote, too big to fail. But in fact, it created a regulatory environment in which [47:03] communities can be more effective. And I think that's a great point. And I think that's a great [47:04] point. And I think that's a great point. The fact that the banks are too small to succeed. Policy [47:08] errors have entrenched the dominance of the largest banks and made it even more difficult for [47:12] community banks, which lack the market-distorting perception of being too big to fail. For smaller [47:18] banks, the result has been a bloodbath. The U.S. has lost 3,600 community banks since 2010, [47:25] nearly a 50% decline in the community banks in our state, in our nation. Secretary, I propose [47:31] bipartisan legislation to increase the deposit insurance limit for non-interest-bearing [47:36] transactions such as the U.S. and the U.S. and the U.S. and the U.S. and the U.S. and the U.S. and [47:37] accounts. This is not a wholesale increase in the deposit insurance limit. It's a narrow reform [47:42] targeting only non-interest-bearing accounts, typically payroll accounts. How does this bill, [47:48] this targeted expansion of coverage, fit into the administration's vision for supporting community [47:53] banks? Senator, as you know, I, along with you, am one of the great and another member of this [47:59] committee. They are a great advocate of this because what we have seen is depositors, investors [48:05] believe that large banks have an implicit [48:08] guarantee on all of their deposits during a time of crisis, during a stress event. As we saw in [48:14] March of 2023, deposits flee from small banks because they do not, are not believed to have [48:22] that implicit guarantee. So if we can have an account for which small businesses, normally [48:29] their payroll accounts, can deposit funds with the surety that they will be returned, then it [48:35] will stop that deposit beta, [48:37] allow Main Street to flourish. What we have seen since the great financial crisis due to [48:43] overregulation, 50, 5-0% of community and small banks have disappeared. And that is what is [48:52] harming Main Street. Yeah. Well, thank you, Mr. Secretary. And I think that's precisely why the [48:57] National Association of Community Banks have supported my legislation and the legislation [49:02] you and I wrote about in the Wall Street Journal. Last year, Mr. Secretary, President Trump [49:07] signed my bill, the Genius Act, into law. Private sector estimates suggest that stablecoin adoption [49:12] may reach between $1 trillion and $3 trillion by the end of this decade. As you know, the Genius Act [49:18] requires stablecoins to be backed by high-quality liquid assets, such as U.S. Treasuries. How does [49:24] the U.S. leadership in crypto and stablecoins fit into Treasury's strategy for maintaining the [49:29] dollar's role in the center of the global financial system? Well, Senator, I want to congratulate you [49:34] and your colleagues, both sides of the aisle, but thank you for your leadership on this issue. [49:39] This can be an important source of funding for the U.S. government as we push down the funding for [49:46] the U.S. government that helps everyday Americans, whether it is for mortgages or any other borrowing [49:54] requirements. It keeps taxes low. And we believe that with the U.S. having the safest, soundest, [50:02] best practices, we can draw in new sources of funding via the stablecoin mechanism. [50:09] If you think about the impact of the passage of the Genius Act, it was a major statement in terms [50:15] of keeping innovation onshore. And I'd just like to get your perspective in terms of the stability [50:20] and clarity that we provided with the Genius Act and what that means for keeping innovative capacity [50:26] here in America. Well, it's innovative capacity and digital assets, and remaining the leader in [50:31] that is imperative. And what we don't want to have are central bank digital assets, which we are [50:37] seeing in the rest of the world. And Senator, I want to thank you for your time today. Thank you. [50:39] Senator, as you and I have often discussed, we are going to see a choice between American private [50:46] sector assets with our best practices in regulation or between central bank digital assets, whether in [50:53] Europe, whether in China, in the rest of the world. And I think the world is going to choose the U.S. [50:58] dollar and the private sector well-regulated choice that U.S. stablecoins will provide. [51:06] Well, I couldn't agree more. And I think that underscores [51:10] my sensitivity to not undoing ex post facto the good work that we did in Genius. I want to see us [51:17] put in place international reciprocal regimes that work. I want to increase the demand for U.S. [51:22] Treasuries as you do. And I'm going to encourage my colleagues to preserve the Genius Act, given all [51:27] the hard work that went into it. Thank you, Mr. Chairman. [51:29] Good. Thank you for your leadership, Senator. [51:31] Thank you, Mr. Secretary. [51:35] Senator Cortez-Bastin. [51:39] Thank you. Thank you, Mr. Chairman. [51:40] It was a question, but I want to make sure it's right. [51:42] Thank you. Thank you, Ranking Member. [51:45] Thank you for being here. I appreciate your opening comments and your report of Financial [51:52] Stability Oversight Council's 2025 Annual Report. You stated in your opening comments that the [51:58] Treasury has tirelessly pursued pro-growth policies to unlock the potential available to [52:04] all Americans when they are free to save, invest, build businesses, and drive their [52:11] own economic destiny. So let's talk about building businesses under this administration. [52:16] And this is nothing new to you because we've been talking and I've been talking to you about this [52:20] for the last year. In Nevada, travel and tourism are the backbone of our economy. [52:24] Tourism makes up nearly 30% of Nevada's economy, generating $24.4 billion in total wages. [52:33] This administration's blanket tariffs and insulting rhetoric towards our closest allies [52:40] are damaging America's tourism economy. For instance, the U.S. saw 12 straight months of [52:47] declining visitors from Canada last year. The top international market for Las Vegas, [52:52] that's roughly a 20% decrease for my state. That is countless dollars, jobs that my state, [53:01] we are losing, paychecks that won't go to Nevada residents, including [53:05] the over 400,000 hospitality workers across the state who are dealing with this issue. [53:12] So my question to you is, will you apologize for driving away visitors and hurting our [53:18] working families? A couple of things, [53:22] Senator. One is the Canadian economy is doing poorly. So perhaps part of that, [53:26] maybe we should deconstruct the why Canadian tourism is down. And two, [53:33] that it's a choice by the Canadians in terms of where they want to go. [53:40] And so if you think that should we pull down all of our trade barriers with China so that 1.4% [53:50] billion people can fill up the hotel rooms in Las Vegas? [53:52] So this is the data from the Commerce Department. This administration's Commerce [53:59] Department on National Travel and Tourism Office, year over year declines in travelers from October [54:05] 24th to the 25th. It's not just from Canada. It's from Germany. It's from the Netherlands. [54:11] It's from Australia. It's New Zealand. It's India. It's Vietnam. It's Philippines. [54:16] We are seeing under this administration, a U.S. travel, [54:22] travel forecast that is dealing with now nearly a 70 billion travel trade deficit for 2025. [54:30] So how do you intend to address the tourism travel issue that we are losing money [54:37] in this country because of the policies of this administration? [54:41] Is overall the occupancy in Las Vegas down or more Americans going? [54:48] I'm talking about internationally. It's not just me. It's Florida. It's other, [54:52] it's the United States. It's the United States. It's the United States. It's the United States. [54:52] It's the United States. It's the United States. It's the United States. It's the United States. [54:52] It's other states that are dealing with a decline in tourism. And this is my conversation with you [54:57] for the last year. That seems to be this administration keeps ignoring. It is a billion [55:03] trillion dollar industry to this country. And you don't seem to think it is important. [55:08] Let me talk about something else, though. You mentioned you mentioned no, [55:13] I'll give you an opportunity. But you mentioned how you're trying to help [55:17] my service industry. And I supported this. No tax on tips because I think more people should keep [55:22] money in their pocket. But if you're in a service industry, and you don't have tourism coming, [55:28] and you don't have a job, doesn't really matter if your tips are taxed. If you're not getting tips, [55:33] there's a problem. You just have to come to my state, talk to my service industry, [55:38] talk to the individuals to see they are not feeling better. No matter how much you and this [55:44] administration start talking about how wonderful this economy is, they're not seeing it. It is a [55:49] problem. And I'm asking and I think some of my colleagues as well, let's fix it. There's [55:55] affordable issues. Affordability issues. Affordability issues. Affordability issues. [55:57] Affordability issue in this country. And we need to address it working together. Let's solve this [56:03] problem. Let's not come up with facts. Let's not tell the American public something that they don't [56:08] see in their own bank account. Let's just work together to figure it out. That's all I'm asking. [56:15] I'm asking you to work with us. One final thing. It's not just my service industry. It is small [56:20] businesses across the country who are being squeezed. We have seen it time and time again, [56:25] the tourists. I listen, [56:27] the facts are there. You can debate with me the facts, but the truth of the matter is [56:32] many of our small businesses are being squeezed right now. Higher prices, absorbing higher costs. [56:38] Some of them have had to shutter. The small businesses are the backbone of our industry. [56:42] We've got to do a better job for them. I know my time is up. Thank you, Mr. Chairman. [56:47] Thank you, ma'am. Senator Tillis. [56:50] Thank you, Mr. Chairman. Mr. Bisson, thank you for being here. I'm going to give you a breather. [56:58] I got a statement to make that I don't expect you to respond to. [57:01] Mr. Chairman, I seek unanimous consent to put into the record the statement of various [57:08] banking committee members with respect to the testimony of Chair Powell and his last hearing [57:16] here. Without objection. [57:18] Thank you. Mr. Chairman, that's a list of members who have indicated that they did not see criminal [57:24] intent in his comments here before he was in the banking committee. The reason I brought this up is [57:29] I had a reporter yesterday [57:32] challenge me on why it was inappropriate for a sitting member to question a pending investigation. [57:43] I never do that. But I told the reporter I did it because I was actually a witness at the alleged [57:51] scene of the crime. The entire case against Senator Powell is encapsulated in his answers to [58:01] questions before this committee. [58:04] And now, including the chair, we have witnesses at the alleged scene of the crime [58:11] having, I mean, say, we're disappointed with Chair Powell. I actually like Warsh as a potential [58:17] chair. But we've all said that he was testifying and we didn't see a crime. [58:23] And so I'm reminded, I don't know about you all, I watch Forensic Files. I've [58:27] been watching it for years. And I'm kind of thinking about the scene would go like this. [58:34] In spite of seven eyewitnesses saying no crime was committed, the prosecutor thinks otherwise, [58:45] and then you hear that music and you cut the commercial. I do think it's fine for me, [58:51] being a witness at the scene of the alleged crime, saying that we got a majority of people on this [58:57] side of the aisle that didn't think a crime got committed either. If we do this sort of stuff, [59:02] I believe that future hearings for the Treasury Secretary and other members [59:10] will be a lot like that Chappelle's get on I plead the fifth they're gonna have [59:17] they're gonna be flanked with attorneys and anytime that they think that they're [59:22] in the middle of a perjury trap they're probably just gonna say I'll submit it [59:27] to the record after consultation with my attorneys is that really the way we want [59:32] oversight to go in the future I don't expect an answer to the question but I [59:37] did want to get that off my chest so I gave a more fulsome answer to that [59:41] reporter who asked why it was that I was opining on an active investigation mr. [59:49] secretary I'm thrilled that you're in the role you're in I think you're a [59:52] steady influence I know that I've been public about criticizing certain [59:57] president's advisors you're certainly not one of them but I do have a question [1:00:01] I actually ran into [1:00:03] Senator [1:00:04] Warren on the floor and I said my goodness [1:00:07] Elizabeth I call her Elizabeth when we're talking on the floor I said you [1:00:12] have convinced President Trump to put artificial caps on credit card rates [1:00:18] good on you now I'm gonna do everything I can to kill it but good on you [1:00:24] I think you even talked to the president about that right mr. mr. secretary what [1:00:30] would happen if we put at well I don't know where you are on the policy but what [1:00:35] What would happen to, let's just say one area, asset-backed securities? [1:00:41] If we imposed an artificial 10% cap on credit card interest rates, and then if you have [1:00:47] time in the minute, this is the only question I'm going to ask you. [1:00:51] What would it likely do for credit card issuers who are still going to have to wait for risk [1:00:56] in terms of debanking or unbanking or reducing access to a credit? [1:01:02] So if you could get to the first one, which has to do with asset-backed securities. [1:01:05] If you have time, you can go to the second one. [1:01:07] Thank you. [1:01:08] Yes. [1:01:09] I think we at Treasury are still examining what it would do to the asset-security market. [1:01:14] I think it would depend on the length the president's called for one year. [1:01:21] And we would also see if they were able to cut costs, Senator, because what's happened [1:01:26] is we've seen a migration where credit card companies used to compete on APR, or the interest [1:01:31] rate, to reward. [1:01:32] And the rewards go mostly to the upper end. [1:01:36] So again, the profitability of credit card companies doesn't have to be hit if they concentrate [1:01:44] more on competing on rates than rewards. [1:01:46] Thank you, sir. [1:01:53] Senator Warner? [1:01:54] Thank you, Mr. Chairman. [1:01:55] And boy, I didn't hear Senator Kennedy this morning, but Senator Telich, you were like [1:01:59] out-Kennedy-ing Kennedy today in terms of your presentation. [1:02:04] That's a high bar. [1:02:05] Mr. Secretary, good to see you. [1:02:07] No, no. [1:02:08] Mr. [1:02:09] We will not extend to you any more questions. [1:02:10] I've got to get my time. [1:02:12] In a House move, I reclaim my time. [1:02:16] Four minutes and 38 seconds. [1:02:17] Please use them. [1:02:18] You actually have an over... [1:02:19] All right, Mr. Secretary, I've got a bunch of stuff. [1:02:22] One, one of the reasons I voted for you and encouraged others was your support for CDFIs. [1:02:27] One of the things I'm really proud of, Senator Crapo and I have had an active bipartisan [1:02:33] CDFI caucus. [1:02:34] And last October, oh my gosh, Senator Crapo got 105 Republican members of Congress, including [1:02:39] eight Republicans on this committee, to say, CDFI is the best. [1:02:42] To say CDFIs, it's a good program. [1:02:45] Yet the CDFI fund at $324 million in fiscal year 25, it's now February 26th, and none [1:02:51] of these funds have been released. [1:02:57] And I know we've talked about this, Treasurer, I know it works with OMB and some difficulties [1:03:01] there. [1:03:03] And we're hearing from CDFIs how this is dramatically affecting. [1:03:06] When can we expect those funds to get released? [1:03:09] Senator, I can't give you an answer. [1:03:11] OMB will decide the terms and the timing of this. [1:03:14] The CDFI apportionments. [1:03:15] Mr. Secretary, I got to tell you, you know, you're the Treasury Secretary, you run this [1:03:22] program. [1:03:23] You had 105 Republicans say, we need to get the money out. [1:03:27] Sir, unlike the Federal Reserve, I can't print magic money. [1:03:31] Well, you sure as heck could call the OMB director and say, this is a program that you [1:03:36] have legal authority over. [1:03:38] It is important. [1:03:39] Matter of fact, as we talked about, President Trump, in many ways, I know he's forgotten [1:03:43] this. [1:03:44] But in 2019, became the godfather of CDFI. [1:03:46] When in the last Trump COVID package, he put $12 billion into this program. [1:03:56] So I urge you, please, Mr. Secretary, pick up the phone and call. [1:04:00] I know it would be difficult. [1:04:01] I wouldn't want to talk to the OMB director either that much, but please talk to him and [1:04:05] see if you can get those dollars released. [1:04:08] It is so important. [1:04:10] And I hope the eight of my Republican colleagues will at least say, attaboy, Warner, on this [1:04:16] one. [1:04:17] Thank you, Mr. Chairman. [1:04:18] I reserve my time back. [1:04:21] I want to add, I know we're spending a lot, I feel like I'm in crypto hell. [1:04:31] I know, Cynthia, I'm welcome to it. [1:04:33] And God bless you. [1:04:35] And actually, and I really appreciate what you did on the stablecoins bill. [1:04:44] And I think we got a lot of broad bipartisan support, at least many of us, I think all [1:04:51] of my Republicans. [1:04:52] Many of my Democratic friends agree, we want these products built in America, crypto's [1:04:57] here to stay, and we need clear rules of the road. [1:05:02] And stablecoin was simple compared to market structure. [1:05:06] But you have, one of the things that we see in crypto, and we are working our tail off. [1:05:11] You can please, I think the chairman and I've spent, and Cynthia and others spent more time [1:05:16] on this than, anyway, I'm going to use up my time. [1:05:21] But there are a lot of issues around national security that you have unique perspectives [1:05:26] on, with FinCEN, with the Secret Service. [1:05:29] We sure as heck don't want it to take away from prosecutors some of the tools they have [1:05:34] to go against bad guys. [1:05:36] We've got to have some area to close down some of the gaps in DeFi. [1:05:40] And again, there's bipartisan agreement on this, but boy, we need, I think we're starting [1:05:46] to get some of the technical assistance. [1:05:48] But if you can just make clear that this is a real problem, and we'll deal with yields [1:05:54] and rewards. [1:05:55] We'll deal with a host of other issues. [1:05:56] But these national security issues around DeFi are real, and we need to not create a [1:06:03] set of rules that leaves huge exemptions, and candidly, takes away some of the prosecutorial [1:06:09] powers that exist today. [1:06:10] Senator, I look forward to working with you on that. [1:06:14] We've had problems, and historically, there's problems when the technology gets ahead of [1:06:19] the legislation. [1:06:20] So, if we can work with you on the legislation for the... [1:06:26] It's for both OFAC and DeFi. [1:06:27] It's for both OFAC and FinCEN. [1:06:29] We... [1:06:30] We love your technical assistance, and I think, Mr. Chairman and Senator Olmos, that [1:06:36] you will be invited to our next round robin on that, and that may be later today or tomorrow [1:06:40] or Monday. [1:06:41] So... [1:06:42] Good. [1:06:43] And if you could convince some of the... [1:06:44] There seems to be a nihilist group in the industry who would prefer no regulation over [1:06:48] this very good regulation. [1:06:50] Amen, brother. [1:06:51] So, weigh in. [1:06:52] I do. [1:06:53] Weigh in. [1:06:54] Early and often, Senator. [1:06:55] Weigh in. [1:06:56] One last comment. [1:06:57] One last comment. [1:06:58] Oh, oh. [1:06:59] Hey. [1:07:00] Senator. [1:07:01] Hey. [1:07:02] Agentic AI, we've got to come back and talk about. [1:07:03] Agentic AI, huge possibilities with AI, but we've got to be careful about that. [1:07:06] Thank you, Mr. Chairman. [1:07:07] Unbelievable. [1:07:08] Okay. [1:07:09] Senator Lummis. [1:07:10] Thank you. [1:07:11] I'm going to pursue this line of questioning. [1:07:13] Thank you, Mr. Secretary, for being here. [1:07:17] You've had a chance to travel the world since you took the oath of office. [1:07:22] Is China trying to use digital assets and blockchain? [1:07:26] Blockchain to build an alternative to American financial leadership? [1:07:32] We don't know that for sure. [1:07:34] There are lots of rumors of Chinese digital assets, of Chinese digital assets that may [1:07:41] be backed by something other than the RMB, perhaps gold-based. [1:07:47] We haven't seen that. [1:07:48] They have a very large sandbox in Hong Kong, and HKMA is actively traveling the world, [1:07:56] looking at different mechanisms. [1:07:58] So I would not be surprised. [1:08:01] Based on what you know now, what is your opinion about the importance of having clear rules [1:08:09] of the road market structure legislation in the United States? [1:08:14] Look, I think that it's impossible to proceed without it. [1:08:19] We have to get this Clarity Act across the finish line, and any market participants who [1:08:24] don't want it should move to LCC. [1:08:25] Okay. [1:08:26] Thank you. [1:08:27] Thank you. [1:08:30] Thank you for that, Ms. Alvedor. [1:08:31] So as a industry, what is the benefit to having this industry embedded in the U.S. economy? [1:08:40] Well, again, as I said, there seem to be people who want to live in the U.S., but not have [1:08:49] rules for this important industry, and we've got to bring safe, sound, and smart practices, [1:08:56] and the oversight of the U.S. government. [1:08:59] Okay. [1:08:59] US government but also allow for the freedom that is that is crypto and I [1:09:04] think it's a balance that is being worked out it was worked out in the [1:09:08] Genius Act and I'm confident with leadership of people on both sides of [1:09:13] the aisle that we can get clarity across the line this year can you see a day [1:09:18] when conventional banks and digital asset banking are offering the same [1:09:26] types of products giving each an advantage to offering a broader array [1:09:32] of financial products to the American consumer all right I think that can [1:09:37] happen over time and we've actually been working with small and community banks [1:09:42] to discuss how they can be part of the digital asset revolution also among the [1:09:47] things that have challenged us in these last months is concerned by community [1:09:52] banks and big banks that the stablecoin business [1:09:57] bill the Genius Act and market structure it could cause a bleeding of deposits [1:10:05] from small banks what's your reaction to that concern look I've been a champion [1:10:10] of these small banks and deposit volatility is very undesirable because [1:10:15] it is the stability of those deposits that allows them to lend into their [1:10:21] communities AG small business real estate and we will continue to work to [1:10:26] make sure that we have a stable economy and we will continue to work to make [1:10:27] sure that there is no deposit volatility associated with this well as an AG [1:10:32] borrower I commend you on that because I have borrowed from community banks on [1:10:39] our AG operation for decades and we're dependent on our community banking [1:10:44] relationships in rural America to help sustain us and grow our businesses so I [1:10:50] very much appreciate that I want to switch to digital asset taxation for [1:10:56] just a minute [1:10:56] so among the things that I'm exploring and the Senate Finance Committee has a [1:11:03] package of bills that looks really good to me on digital asset taxation but one [1:11:09] of them that's kind of vexing that I could use some guidance on is the issue [1:11:15] of de minimis with regard to especially Bitcoin and other digital assets that [1:11:22] might be used as a means of exchange so the issue is that the digital asset [1:11:26] taxation issue is a will it be a capital gain or will it be exempt from [1:11:32] capital gains when it's used as a means of exchange to purchase things and if [1:11:38] it's going to be a subject to a capital gain how do you calculate what the [1:11:44] capital gain is if somebody has a blended portfolio of Bitcoin some of [1:11:50] which were purchased when it was three hundred dollars some of which were [1:11:54] purchased today at seventy five thousand dollars or something like that and some of [1:11:56] and some of which were purchased a year ago at over $100,000. [1:12:00] How do you calculate the capital gain? [1:12:05] Do you have some thoughts about that or who I could consult with in your shop? [1:12:10] It's a very complicated subject. [1:12:12] We'd be very happy to have our Office of Tax Policy work with your team. [1:12:15] I'll be over. [1:12:16] Thank you, Mr. Secretary. [1:12:18] We look forward to seeing you. [1:12:21] Senator Smith. [1:12:22] Thank you, Mr. Chair. [1:12:24] Mr. Secretary, would you consider food and ag to be an important part of the U.S. economy? [1:12:32] Extremely. [1:12:35] Thank you. [1:12:36] I agree with you on that. [1:12:37] The U.S. food and ag sector is a massive economic force contributing over $9.5 trillion, supporting over 24 million jobs. [1:12:45] So, Mr. Chair, what I'd like to do is to submit a letter for the record. [1:12:50] This is a letter sent on Tuesday to the ag committees in both the House and the Senate. [1:12:54] It's signed by Mr. Trump. [1:12:56] Twenty-seven former and current leaders in the ag sector from all across the country. [1:13:00] It's a very bipartisan letter. [1:13:02] Folks from corn, pork, milk, grains, renewable fuels, Farm Bureau, former USDA officials from both Democratic and Republican administrations. [1:13:12] Without objection. [1:13:14] Thank you. [1:13:15] Secretary Besson, as you no doubt know, and as this letter points out, farm bankruptcies have doubled. [1:13:23] Barely half of all farms are profitable this year. [1:13:25] The U.S. is running an historic farm. [1:13:27] There's an historic agriculture trade deficit, which is a sharp reversal from record surpluses. [1:13:32] And farmers are paying higher prices for everything, from health care to farm inputs, grocery and utility bills. [1:13:40] And I want to just read you a piece of this letter, which says, consider the impact of the China trade war on soybeans alone. [1:13:49] In 2018, when the China tariffs were initially proposed, whole U.S. soybean exports represented 47% of the world market. [1:13:55] Today, it's down to just 24.4%. [1:14:00] The letter goes on. [1:14:01] So, Secretary Besson, my question for you is, when can farmers expect this turbulence and this chaos to stop and input prices to begin to stabilize or at least come down for them? [1:14:15] Well, Senator, as you know, input prices spiked under the Biden administration. [1:14:22] Secretary Besson, when can we expect... [1:14:25] Again, it's market-based. [1:14:27] And as someone who, until the end of last year, was involved in the ag sector, I can tell you it was a record harvest. [1:14:36] So it is a problem of abundance. [1:14:38] But costs are up. [1:14:40] We are working to bring the costs down. [1:14:43] Input costs are up, I believe, Mr. Secretary, in large part because tariffs are driving those costs up. [1:14:49] And this is causing massive uncertainty and chaos in the farm sector, [1:14:54] which is really hurting many, many farmers in my state and around the country. [1:14:58] Senator, it was very unfortunate that the Chinese decided to use our great farmers, soybean farmers, as a pawn in trade negotiations. [1:15:08] We have administrations come out with a $12 billion package, and we have guarantees from the Chinese. [1:15:15] They bought $12 billion of soybeans just since October. [1:15:20] They are committed to buying... [1:15:22] Mr. Secretary... [1:15:23] Not 12 million tons. [1:15:25] They will buy 12, 25 million tons for the next three years to stabilize the market. [1:15:31] But what is happening for farmers in Minnesota is this constant on again, off again, tariffs on, tariffs off. [1:15:37] It is chaotic, it is confusing, and it is destroying our markets. [1:15:42] It has nothing to do with the tariffs on, tariffs off. [1:15:44] Well, I think it has a lot to do... [1:15:45] And these farmers, sir, believe that it has a lot to do with Trump tariff policy. [1:15:51] I want to just... [1:15:52] Mr. Chair, if I may... [1:15:53] Before I close, I want to link this conversation to some of the challenges that are happening in the ag sector [1:16:00] and the larger economic challenges in Minnesota caused by the immigration action that is happening in Minnesota right now. [1:16:07] Because the truth is that ag country is heavily impacted by this. [1:16:12] This mass deportation plan is having a huge impact on the ability of farmers in my state to be able to get access to labor. [1:16:20] And I'm talking about people who are here legally. [1:16:22] And I know that my colleagues on both sides of the aisle that represent farm country understand you are hearing this from your farmers and ranchers as well. [1:16:34] And it is having huge impacts on dairy and fruit and veggies. [1:16:39] It is a major problem, not just in the farm sector, but all across my state. [1:16:46] Where just in Minneapolis alone, separate from agriculture, small businesses are losing an estimated $20 billion. [1:16:52] Because of customers just not being able to show up. [1:16:58] Being afraid. [1:16:59] Workers being unable to go to work because they're afraid of going out. [1:17:04] The bottom line here, colleagues, is that this mass deportation plan was supposed to go after the worst of the worst. [1:17:11] But what's really happening is that these poorly trained and aggressive agents are breaking families apart. [1:17:19] They are hurting children. [1:17:20] They are separating from their families. [1:17:22] They are targeting and detaining and arresting people that have done nothing wrong. [1:17:25] And that is morally reprehensible. [1:17:28] And Mr. Secretary, it is reprehensible that you blame Alex Prudy, a U.S. citizen, for his own death shot in the back by these federal agents. [1:17:38] Senator, your time is up. [1:17:40] Thank you, Mr. Chairman. [1:17:42] I'd like to just respectfully respond to my colleague and give you an opportunity to actually respond as well, Mr. Secretary. [1:17:50] When I look back over the last four years. [1:17:52] Over the last four years of the Biden administration, it was failed policies for our agriculture industry. [1:17:58] Number one, President Biden walked away from the trade deals and the trade gains that President Trump had gotten for our ag industry. [1:18:06] Number two, with record high inflation, it hit our farmers worse than anyone. [1:18:12] Both the energy, the war on energy of the Biden administration, plus the amount and the payment of equipment, plus the fact that input costs had literally been frozen. [1:18:22] And the second thing is that the Biden administration failed to pass a farm bill, didn't even try. [1:18:27] So here you had record high cost with energy, equipment, labor, inflation, and then you cap what they can make. [1:18:37] And I don't remember one person on the other side of the aisle saying, let's move a farm bill. [1:18:42] Let's help these people. [1:18:43] Let's drive down energy costs. [1:18:46] And so I would just like to say, Mr. Secretary. [1:18:50] I feel like our ag industry is not going to be the same. [1:18:52] Our industry is at the forefront of what we're looking at right now. [1:18:56] And I would like to give you an opportunity to respond. [1:18:58] Well, one of the things I will respond to is that in my first meeting with my Chinese counterpart, the vice premier, I asked him, under the phase one purchase agreements, they were actually exceeded in 2020. [1:19:13] Signed in January 2020, the level of the agreement was exceeded. [1:19:19] Every time President Trump has spoken with party chair Xi. [1:19:22] He suggested he buys more soybeans. [1:19:25] And slowly that tapered off. [1:19:29] And we said, why? [1:19:30] He said, Biden didn't enforce. [1:19:32] Biden didn't enforce the purchase agreements. [1:19:35] Yeah, walked away from it. [1:19:36] So speaking of something else we walked away from in the Biden administration was actually being tough on Iran when it came to sanctions. [1:19:42] I appreciate the maximum pressure strategy that President Trump has gone back to. [1:19:47] I'd like to ask you, what more can we be doing as we see us place pressure on the Ayatollah? [1:19:51] Who is no friend of the United States of America? [1:19:54] And as we see what he is doing to the citizens of his own country and the streets, what more can we be doing to make sure that we are placing the pressure that we need to on the greatest state sponsor of terrorism? [1:20:08] And that is the Ayatollah and Iran. [1:20:10] Well, what we can do at Treasury and what we have done is created a dollar shortage in the country. [1:20:17] At a speech at the Economic Club of New York in March, I outlined this. [1:20:21] I outlined this strategy. [1:20:23] It came to a swift and I would say grand culmination in December when one of the largest banks in Iran went under. [1:20:33] There was a run of the bank. [1:20:34] The central bank had to print money. [1:20:36] The Iranian currency went into free fall. [1:20:38] Inflation exploded. [1:20:40] And hence, we have seen the Iranian people out on the street. [1:20:43] We will continue monitoring all the partners, all the Iranian partners. [1:20:48] The good news, Senator, is that we have seen. [1:20:51] We can see it with our fence in. [1:20:54] We have seen the Iranian leadership wiring money out of the country like crazy. [1:21:01] So the rats are leaving the ship. [1:21:04] And that is a good sign that they know the end may be near. [1:21:09] I want to switch quickly to regulatory tailoring. [1:21:13] It is obviously my belief that proper tailoring actually ensures that supervision is grounded in economic reality rather than subject ideology. [1:21:22] Can you speak a little bit to the work that you and EFSOC agencies are doing to more properly calibrate our regulatory framework, whether it is capital rules or stress testing or even adjusting to outdated thresholds? [1:21:37] Again, we are looking at all the thresholds. [1:21:41] One thing that happened, too big to fail became too small to succeed, as Senator Hagerty said. [1:21:47] And we don't want to see more of our small banks go under. [1:21:51] What we want to see before the great financial crisis and the success of regulation on the system was we would see about 50 new banks formed every year by definitionally small banks. [1:22:04] And we need to get back to doing that. [1:22:06] We need to get back to small banks. [1:22:08] I was talking to a community banker, 17 employees, three compliance people. [1:22:14] And last, I've got 30 seconds, but there have been claims made by the other side of the aisle, even tweets put out. [1:22:20] I can provide that for you if you need that. [1:22:23] But some pretty serious accusations and saying we have a tweet actually from the ranking member that says, and I want you to be able to correct the record if this is true, but essentially claims that the IRS has gutted enforcement and dismantled the DOJ or forced tax fraud investigators to actually stop doing their job. [1:22:41] Does that have any legitimacy at all? [1:22:43] Because I think that gives us all concern if that's the truth. [1:22:45] Complete sophistry. [1:22:47] We've identified $10 billion in tax crimes. [1:22:49] Up 15% from 2024. [1:22:52] $4.5 billion in tax fraud. [1:22:54] Up 110% from last year. [1:22:56] Thank you. [1:22:58] Thank you. [1:22:59] Senator Warnock. [1:23:00] Thank you, Chair Scott. [1:23:03] And welcome, Secretary Besant. [1:23:05] President Trump promised that his administration would usher in a, quote, golden age of American manufacturing. [1:23:15] In September 2024, at a rally in my home state of Georgia, Donald Trump said, quote, [1:23:23] We're going to have a manufacturing boom. [1:23:26] Secretary Besant, we're now more than one year into the Trump administration, yes or no. [1:23:31] Has there been a manufacturing boom in the United States? [1:23:36] There are the beginnings of a manufacturing boom. [1:23:40] We have intentions, factory groundbreakings, sir. [1:23:44] So your answer to that is yes, there's been a manufacturing boom? [1:23:47] We are at the beginning of a manufacturing boom. [1:23:51] Okay. [1:23:52] You and I could agree to disagree. [1:23:55] But more importantly, manufacturers are telling us something different. [1:23:58] Manufacturers are struggling because of the president's policies, and that's what they keep telling us and the facts keep telling us. [1:24:04] In fact, just this past Monday, the Wall Street Journal published this article entitled, [1:24:11] U.S. Manufacturing is in Retreat and Trump's Tariffs Aren't Helping. [1:24:17] I request consent to enter this article into the hearing record. [1:24:20] Mr. Chairman? [1:24:21] Without objection. [1:24:23] Secretary Besant. [1:24:24] Do you know how many manufacturing jobs the United States has lost since Liberation Day in April 2025 when the president first announced his tariffs? [1:24:33] Yes, Senator, because you were out of the room, but it was already brought up. [1:24:37] We do many things, sir. [1:24:38] I don't need you to tell me where I was. [1:24:40] 72,000. [1:24:41] And I will point out that the Wall Street Journal is not called the Main Street Journal, and they care more about Wall Street than Main Street. [1:24:49] Sir, I'm not asking you to opine on the Wall Street Journal. [1:24:52] I have three minutes. [1:24:53] Just answer the questions that I'm actually asking you. [1:24:56] So 72,000 manufacturing jobs, according to the Federal Reserve Bank of St. Louis. [1:25:03] Thank you for answering the question. [1:25:04] Manufacturers shed workers. [1:25:07] Shed workers in each of the eight months after President Trump unveiled his tariffs on what he called Liberation Day. [1:25:18] I would submit that it's a strange liberation and a curious freedom that leaves you unemployed. [1:25:25] Our smaller businesses are struggling to keep up with the tariff chaos. [1:25:31] Big manufacturers may have the resources to shift suppliers. [1:25:36] And I need you to understand the spirit of my questions. [1:25:38] I spend a lot of time talking to the people in Georgia who've given me the great honor of representing them in the United States Senate. [1:25:47] And so this is about them, and especially our small businesses. [1:25:54] They don't have the ear of the president. [1:25:57] They don't have access to Mar-a-Lago. [1:25:59] And so they're not able to insulate their company from the worst of the tariffs. [1:26:04] Secretary Besant, small businesses without the same resources or unfettered access to the president, [1:26:10] what should those businesses do for the relief if they can't get into Mar-a-Lago? [1:26:16] Again, sir, small business confidence is up. [1:26:20] And we are seeing that the one big beautiful bill gives the full expensing for equipment, factories, and ag. [1:26:30] Structures. [1:26:31] They are telling us that it's more expensive to make basic things. [1:26:36] We are moving in the wrong direction. [1:26:40] The facts don't lie. [1:26:41] The president lies often. [1:26:42] But the facts don't lie. [1:26:45] In fact, if you're saying we're at the beginning, basically your answer to those small businesses is wait a little while? [1:26:53] Is that the answer? [1:26:55] You ask about manufacturing. [1:26:57] That's right. [1:26:59] I'm asking you. [1:27:00] And I am saying. [1:27:01] I'm asking you. [1:27:02] I'm asking you about this manufacturing boom. [1:27:04] Will we see something different a year from now? [1:27:05] We are going to see it. [1:27:06] I was just at my home state, Senator Scott's state, South Carolina, that we are seeing a boom there. [1:27:13] And I believe Georgia has very good pro-business policies. [1:27:16] I'm sure you will see a boom there also. [1:27:18] The factory build intentions are quite high. [1:27:21] I'll tell you what I see. [1:27:22] I see, as I talk to folks, that it's more expensive to build things in America. [1:27:27] I see that we've lost 72,000 jobs a year into this administration. [1:27:31] We've lost manufacturing jobs every month since he called for Liberation Day. [1:27:38] And meanwhile, folks who are working in these small businesses trying to make their lives work, they're seeing higher costs. [1:27:45] They're seeing their costs go up for groceries. [1:27:48] They're seeing their costs go up for electricity. [1:27:51] They're seeing their costs go up for health care. [1:27:53] And I think the American people are still waiting for a solution. [1:27:57] So far, we haven't seen one coming out of this Trump tariffs regime. [1:28:01] The Baptist preacher is done, and I have no time left. [1:28:05] Thank you very much, Mr. Secretary. [1:28:07] Senator Ricketts. [1:28:11] Thank you very much, Chairman Scott and Ranking Member Warren, for this hearing. [1:28:14] And Secretary Besant, thanks very much for being here. [1:28:16] Appreciate it. [1:28:17] It's good to see you, Senator. [1:28:18] Good seeing you. [1:28:19] And I want to thank you and commend you for updating the 45Z Clean Fuel Production Credit. [1:28:25] That is very important. [1:28:26] So thank you very much for getting that out. [1:28:28] Your guidance incorporates what we put in the Working Families Tax Cut. [1:28:32] Remember, that's how we rebranded the one big, beautiful bill. [1:28:35] And it supports Nebraska farmers and biofuel producers. [1:28:39] So that's really, really important. [1:28:41] It also ensures that feedstocks from faraway countries will not be allowed to get that credit, [1:28:47] which means American taxpayer dollars will stay here in America. [1:28:50] That was very important. [1:28:51] So, Secretary Besant, appreciate that. [1:28:54] Also, I want to just comment on one of my colleagues from the other side of the aisle talking about the ag economy. [1:28:59] I would note that under the Biden administration, [1:29:02] we had four years in a row of agricultural trade deficits [1:29:06] because the Biden administration was the first administration, going back to Jimmy Carter, [1:29:10] not to sign a major trade deal. [1:29:12] And that is one of the reasons why we have such a hard time right now in the ag. [1:29:19] And, in fact, when we talk about input prices, under the Biden administration, [1:29:22] June of 2022, diesel hit 575. [1:29:26] Now it's at 352. [1:29:27] So, again, we need to address the issues to help our farmers. [1:29:32] We need to get the farm economy out. [1:29:34] But a lot of the seeds of this was started in the Biden administration. [1:29:38] I also want to thank you for presenting FSOC's 2025 annual report. [1:29:44] In that, one of the things that perhaps you already touched upon, [1:29:49] and if I'm repeating myself, please forgive me for repeating what's happened here. [1:29:52] Forgive me. [1:29:53] But the Biden administration, under the Biden administration, [1:29:55] then Secretary Yellen actually undid all the good work of the Trump administration in 2019's FSOC [1:30:02] when they changed the activity-based designation guidance. [1:30:06] Yellen replaced it with her own guidance that was turning a last-resort safeguard [1:30:13] into a tool that could be weaponized and stifle innovation [1:30:16] and restrict access to capital that would grow our economy. [1:30:20] A little over two years ago, I sent a letter to then Secretary Yellen [1:30:23] about how the 2023 entity-based designation guidance was misguided, [1:30:28] lacked evidentiary support, and increased the likelihood of market distortions. [1:30:33] Secretary Brissett, do you agree with the characterizations of the 2023 guidance [1:30:36] that could do all these things, cause market distortions? [1:30:39] I believe in the activity-based guidance, and we are moving back to that, Senator. [1:30:46] Great. [1:30:48] And, Senator, if I could just point out that FSOC, under Secretary Yellen, [1:30:53] two weeks before three of the largest bank failures in U.S. history, [1:30:57] many of them due to bond market portfolios, identified climate as the biggest risk [1:31:03] to financial stability, they had not over-leveraged bond portfolios. [1:31:07] Seems like misplaced priorities given a financial service sector. [1:31:12] Secretary Yellen rolled out her new guidance, and then she stripped out the cost-benefit analysis of it. [1:31:17] In your view, does cost-benefit analysis matter in valuing, to use FSOC's SIFI designation authority? [1:31:25] Again, sir, without that, why would you do it? [1:31:30] What is your view on the activity-based designation? [1:31:34] The activity-based designation approach that was developed through the transparent and methodical process done in 2019. [1:31:41] We are re-adopting it, and we believe it is fulsome, robust, and smart-minded. [1:31:48] Great. [1:31:49] Thank you very much, Secretary. [1:31:51] Thanks to President Trump's leadership and your steady hand at the Department of Treasury, [1:31:55] the United States economy is doing very well. [1:31:57] I think the GDP growth in the last quarter, third quarter, was 4.4% annualized in 2025. [1:32:05] Labor markets remain resilient. [1:32:07] The unemployment rate is 1.2% below historical average. [1:32:12] Inflation is down from the highs of the 40-year high in the Biden administration, decreasing some 70% from the peak in the Biden administration. [1:32:21] American markets are strong. [1:32:23] We saw the largest tax cut in history signed into law, allowing us to avoid a $4.2 trillion tax increase. [1:32:30] We've got no tax on tips, no tax on overtime. [1:32:33] Seniors will not pay federal income tax. [1:32:35] The average refund is supposed to be $1,000 higher this year. [1:32:40] And the average Nebraska family will avoid a $2,400 tax increase. [1:32:44] Yet, despite all this progress, we're seeing consumer confidence is not really rebounding the way that the economy seems to be. [1:32:52] In your opinion, what more can we in the Senate be doing with regard to consumer confidence and making, you know, [1:32:59] obviously we had 40-year high inflation under the Biden administration, [1:33:02] but what more can we be doing in the Senate to be able to help out with confidence of consumers? [1:33:08] Other than telling consumers to turn off MSNBC, [1:33:12] because a large part of it is a survey problem where Democrats vote very low, Republicans are more realistic, [1:33:20] and then we end up, what we're seeing... [1:33:23] Senator Kim's time. [1:33:27] I appreciate your comments. [1:33:28] Yeah, thank you. [1:33:29] And by the way, for all members, they're going to close the vote at 12.05, so... [1:33:34] Okay. [1:33:35] Thank you, Chairman. [1:33:36] Sorry, Tim and Scott. [1:33:37] Thank you, Secretary, for coming on out here. [1:33:39] Just the other week, you took part in talks with Russia. [1:33:42] I guess I just wanted to ask you just your view of this. [1:33:45] Do you agree that Russia's invasion of Ukraine was illegal and a violation of sovereignty and law? [1:33:52] Senator, I've been saying that since my confirmation. [1:33:55] That's right. [1:33:56] Also, would you say that Vladimir Putin is a war criminal? [1:34:00] I've also been saying that since my confirmation. [1:34:03] Now, before you started, [1:34:05] the Treasury regularly targeted hundreds of actors and networks who sent critical goods to Russia's war machine [1:34:12] with rounds of sanctions every one or two months. [1:34:16] The previous administration added about 297 China-based entities and individuals to our sanctions list under the Russia Sanctions Program. [1:34:26] I want to ask you, do you know how many you have added and designated as part of the Russia Sanctions Program since you came in as Treasury Secretary? [1:34:34] I do not. [1:34:35] But I do know that President Trump sanctioned Rosneft and Lukoil, which was the major sanctions achievement, [1:34:41] and dwarfs everything else, dwarfs everything else, and has brought the Russians to the table for the talks that I was at last Saturday. [1:34:48] And you'll have bipartisan support for those sanctions. [1:34:50] But I'll just say that there is also bipartisan support on doing everything we can to crack down on Russia's war machine, not just on the energy side. [1:34:58] And so, as I said, the previous administration has added 297 China-based entities. [1:35:03] This administration has added zero. [1:35:05] That is the number zero. [1:35:06] So I just urge you— [1:35:07] The previous administration was extremely weak on sanctions and was on record as saying that they did not want to increase energy sanctions [1:35:15] because they were worried about the midterms, worried about the failed election of Vice President Harris, and in a display of cowardice— [1:35:24] I'm not asking you about that right now. [1:35:26] But on the way out the door, Jake Sullivan raised some of the energy sanctions. [1:35:33] President Trump took the most bold action. [1:35:38] So we have done more than anyone. [1:35:41] I'm asking you here, can you commit to this Congress that you will take action to sanction Russia's shadow fleet? [1:35:48] I will take it under consideration. [1:35:54] We will see where the peace talks go. [1:35:57] I see how this administration has taken this maximalist approach, adding pressure when it comes to Iran's shadow fleet, [1:36:04] talking about, you know, cutting off Venezuela's ships. [1:36:11] You know, I think that there needs to be consistency here. [1:36:13] And again, there is bipartisan support for this. [1:36:15] I wanted to just switch gears. [1:36:17] Would you agree that money laundering is a national security threat to this country? [1:36:21] Yes, sir. [1:36:22] Now, with Binance founder Zhao pleaded guilty to violating anti-money laundering laws and was sent to prison, [1:36:29] Binance then injected billions of dollars into Trump's family business, [1:36:33] World Liberty Financial, and Zhao asked for a pardon and received that. [1:36:37] I just wanted to ask you, is that a conflict of interest in your opinion? [1:36:40] I am unfamiliar with any of that. [1:36:43] I wear many hats. [1:36:44] The pardon hat is not one of them. [1:36:46] I'm just asking, do you see it as a conflict of interest, though? [1:36:50] Again, I'm not going to respond to that. [1:36:53] When you had the Russia talks, was Jared Kushner a part of the Russia talks? [1:36:58] Yes. [1:36:59] What is his official role in the U.S. government right now? [1:37:02] I believe that he is. [1:37:04] He is a special envoy. [1:37:06] So you believe that he has an official position and that is not an unpaid volunteer position? [1:37:11] Sorry, I believe that it is not an official position, [1:37:14] that he is designated as an interlocutor as we bring many people into the talk. [1:37:21] I just raised this because this is the problem that we're seeing right now when it comes to these conflicts of interest. [1:37:26] You know, we see the Trump family getting involved in different roles even though they don't have official positions. [1:37:32] You see Pakistan now announcing that they're going to use Trump's family's company's crypto for cross-border transactions and trade. [1:37:38] Does that not concern you? [1:37:40] Again, I'd be especially interested to hear if you have any information of why Mr. Kushner is conflicted in the Russia talks. [1:37:49] Look, what I'm saying is that if he wants to participate in that, he should go by the same financial disclosures and getting rid of conflicts of interest [1:37:59] that every other senior government official, including yourself, has. [1:38:01] And look, I'm just saying that when we're seeing Trump pardoning Binance founder Zhao, [1:38:08] when he's instead investigating Jerome Powell, [1:38:11] when we see that Trump is now suing the Treasury and the IRS for $10 billion, [1:38:16] he even said, I am supposed to work out a settlement with myself. [1:38:20] That's what Trump said. [1:38:21] Do you think that that is a conflict of interest? [1:38:23] That is a Justice Department issue. [1:38:25] No, it is suing your department. [1:38:30] The Justice Department represents Treasury. [1:38:32] I would suggest you contact Justice. [1:38:34] With that, I yield back. [1:38:37] Senator Kramer. [1:38:39] Thank you, Mr. Chairman. [1:38:40] Thank you, Mr. Secretary, for being here. [1:38:42] And let me say, I'm sorry you're no longer a North Dakota farmer. [1:38:46] You were a good one. [1:38:47] Sorry to see you go. [1:38:49] So I'm going to really shift gears here and talk about something that truly is bipartisan, [1:38:53] and that is the adoption tax credit. [1:38:56] And I know you wake up every morning thinking about it, [1:38:58] and I'm just going to ask you to look into it for me. [1:39:02] During last year's working families tax cut, the reconciliation package, [1:39:07] we took a version, we altered the adoption tax credit a bit [1:39:12] to include making it partially refundable up to $5,000. [1:39:16] And previously, up until 2011, there was a refundability part of the credit. [1:39:23] The adoption tax credit has always had this carry forward provision [1:39:26] that allowed, of course, families to carry over unused portions [1:39:32] into the next tax liability. [1:39:35] Our intent in the working families tax cuts was for the carry forward [1:39:40] to be eligible for the $5,000 refund as well. [1:39:45] And the JCT actually included that in their score, again, [1:39:50] which sort of validates the intent of Congress. [1:39:53] However, the IRS is interpreting the language to mean that the carry forward [1:39:58] is not eligible, affecting, of course, the adopted families. [1:40:02] But the IRS is interpreting the language from 2020 through 2024. [1:40:05] What the IRS did is they interpret the effective date of December 31st, 2024 [1:40:11] the same way Congress intended. [1:40:13] But there's a big difference now between Congress's intent here [1:40:16] and the IRS's interpretation of it. [1:40:19] I don't believe it was the administration's intent to make this what I believe [1:40:24] to be a mistake when the President signed it into law. [1:40:27] So I just wanted to bring it to your attention, mostly to highlight it [1:40:31] to see if you'd be willing to look into it for me. [1:40:34] Senator, I believe you're referring to the Section 7402. [1:40:39] And my tax office is very happy to work with your staff. [1:40:43] I look forward to that. [1:40:44] The underlying bill that created this language is very bipartisan. [1:40:49] Our colleague, my good friend, Amy Klobuchar and I co-chair the Adoption Caucus [1:40:54] or the coalition and work on these things closely together. [1:40:59] So we'd love to. [1:41:00] We'd love to work with you. [1:41:02] Okay, on another matter. [1:41:03] Yesterday in the House, my friend and colleague, Bill Huizenga, [1:41:09] Congressman Huizenga talked to you about the 3% budget resolution bill that he has. [1:41:14] I'm leading that resolution over here in the Senate. [1:41:18] The goal of it is to establish the goal of reducing the federal deficit to 3% of GDP. [1:41:25] Now, you referenced in your opening statement, I noticed, [1:41:28] that it's already been reduced somewhat. [1:41:30] It's gone up to 5.4%. [1:41:33] And one of the ways we can grow out of a deficit or we can get out of a deficit [1:41:37] or reduce a deficit is by growing out of it. [1:41:39] But I'd like to work on both sides of the ledger with you a little bit [1:41:42] because you have said that we don't have a revenue problem. [1:41:47] We have a spending problem. [1:41:48] And I absolutely 100% agree. [1:41:51] So maybe you could just speak for the remaining time, [1:41:55] although I would love to translate productivity sometimes [1:41:59] as a result of efficiency, which might be a little bit of a workforce challenge. [1:42:04] But that's another whole longer story. [1:42:06] But speak a little bit to that goal. [1:42:08] Is 3% by 2030, which is what our resolution is, is that realistic? [1:42:14] So, Senator, my target is for something that begins with a 3 [1:42:19] by the end of President Trump's term. [1:42:21] As I said, for calendar 2024, we're at 7%, the highest when we weren't at war, [1:42:27] not in a recession. [1:42:28] But we're at 5.4. [1:42:30] And what friends from the other side of the aisle, the tale of woe and gloom, [1:42:36] we have, over the past three quarters, we've averaged 4.1% GDP growth. [1:42:42] And we had a fiscal contraction last year. [1:42:46] They have brought down the spending, which is one of the reasons our bond market did well. [1:42:50] So we're at 5.4. [1:42:52] And as we move that down, we will see the economy improve. [1:42:57] And everyone could go down. [1:42:59] They can go to the Treasury website or the X account. [1:43:03] I'm old school. [1:43:04] I think go to the X account. [1:43:05] And they can see a study by MIT that shows that the budget deficit that was blown out [1:43:12] in 21 and 22 created the great inflation of 22. [1:43:16] So as we bring down government spending, it will bring down rates and bring down inflation. [1:43:23] And at the productivity growth levels we're at right now, I mean, who knows how quickly [1:43:30] that will go down. [1:43:31] I think we're in an exciting time that could be like we saw in the 90s. [1:43:34] I agree with you. [1:43:35] We're at the beginning of the boom. [1:43:37] I yield back two seconds. [1:43:38] We'll take them. [1:43:39] Thank you, sir. [1:43:40] Senator Gallego. [1:43:41] Thank you, Mr. Chair. [1:43:42] Secretary Besson, thank you again for being here today. [1:43:44] You know, we kind of touched on this earlier. [1:43:46] In addition to being Treasury Secretary, you are serving as acting director of the IRS. [1:43:51] So following up on Senator Kim's questioning, so you are fully aware that the President [1:43:55] is suing your agency for $10 billion? [1:43:58] Yes. [1:43:59] We would agree. [1:44:00] Would you agree that $10 billion is a good sum of money? [1:44:04] Yes, sir. [1:44:05] Where would that be cut from? [1:44:07] Let's say for some reason he actually wins that lawsuit. [1:44:09] Where would that $10 billion come from? [1:44:12] Again, it would come from... [1:44:16] Process wise. [1:44:17] I'm not asking like your opinion whether it's right or wrong. [1:44:19] It would come from Treasury. [1:44:20] It would come from Treasury. [1:44:21] Which comes from the general fund? [1:44:23] The Treasury general account. [1:44:25] So taxpayers? [1:44:26] Yes. [1:44:27] Thank you. [1:44:28] Part of the $440,000. [1:44:30] What difference does Senator Kim make? [1:44:31] Needs roughly about $318,000 a month to get us the full investment and probably about [1:44:32] $60,000 to get us the full investment to get us through the process. [1:44:33] Now if the President... [1:44:34] Okay and if the President prevails in this lawsuit, he is going to be able to pocket [1:44:35] that money? [1:44:36] What does that mean? [1:44:38] If the President prevails in this lawsuit, he is going to be able to go and hit the [1:44:39] money? [1:44:40] You know. [1:44:42] My question is, is the President and is there anyone in the President's office talk [1:44:43] to you about this lawsuit in any regard? [1:44:44] No. [1:44:45] So there is Maybe you are humans cannot answer me. [1:44:46] But they have not and the President said he will donate the proceeds to charity. [1:44:47] You may have missed that. [1:44:48] Okay. [1:44:49] There is a part of him who's been told that he will donate the proceeds to charity and [1:44:50] the proceeds to charity you may have missed that. So no one at all has [1:44:54] discussed this to you whatsoever? No sir and the president said he would. Have you [1:44:57] received, I didn't ask any more questions, have you received any advice [1:45:00] from Treasury's legal division about how to handle this potential conflict? This [1:45:05] is a Justice Department matter, they represent Treasury in it. Have someone [1:45:09] from the Department of Justice actually come and talk to you saying that this is [1:45:11] their purview and you need to stay out of it or what would have been, who has [1:45:15] discussed to you what is your role in this? Our general counsel who's sitting [1:45:19] behind me has told me that it is a Justice Department matter, the Justice [1:45:23] Department defends Treasuries and Treasury in matters like this. Okay so [1:45:27] you have, has been discussed with you. Do you have any final say at all in the [1:45:31] process of this or is the DOJ just going to instruct you to cut a check and or [1:45:35] settle and you have no independence to actually make a decision whether or not [1:45:38] the president deserves ten billion dollars? Again that is a DOJ matter. [1:45:43] And so the DOJ will entirely make that decision if, whether or not the [1:45:48] president should receive ten billion dollars. [1:45:49] You have no say at all? Correct. So you will just have to write the check if you [1:45:53] were told to write the check? Correct. And you would write the check willingly if [1:45:57] you're told by a DOJ to the president? I will follow the law Senator. Okay. I mean [1:46:03] I think for many of us this is very simple and I think if this had been [1:46:06] happening in any other countries it would look absolutely like a total [1:46:09] shakedown of the American taxpayer. Are you also aware that President Trump has [1:46:15] filed claims seeking two hundred and thirty million dollars from the Justice [1:46:17] Department for investigations conducted during his previous [1:46:20] candidacy? I'm unaware of the cumulative number. Okay. So if the president wins or [1:46:27] settles these claims that money will come also from the Treasury Judgment Fund [1:46:30] which you do control. Have you recused yourself from any decisions about paying [1:46:34] the president on these claims? Again I'll follow the law and I'm not involved with [1:46:39] any of this. It stems from justice. So you, even though the Treasury Judgment Fund [1:46:44] is called the Treasury Judgment Fund, you have no control over the Treasury [1:46:47] Judgment Fund? All right. We act as paymasks. [1:46:50] So you will sign it then? Sorry. You will sign the cheque then? If you're a [1:46:55] paymaster you would be the person signature is to the Treasury [1:46:58] Judgment Fund. I would assume it would be a wire transfer. Yes. I'm assuming [1:47:04] we're not that old-school. But that being said, so you have no say in this [1:47:10] whatsoever. You will only basically follow what the DOJ says but you're the [1:47:14] person that actually is the final person that pushes send essentially on the wire [1:47:18] transfer. Yes. And even if you feel that you're not a [1:47:23] or that it is unjust the fact that this president [1:47:25] is basically plundering US taxpayer dollars, [1:47:27] you will still hit that send button. [1:47:29] Even if I believe that 6103, [1:47:33] the IRS tax code was violated [1:47:35] and 440,000 taxpayers were leaked by Mr. Littlejohn. [1:47:40] Back to this other thing. [1:47:40] So now do you do believe though, [1:47:43] I mean do you understand why some of us [1:47:45] see a problem with that? [1:47:46] And let me ask just a very simple question. [1:47:49] Do you work for the President of the United States? [1:47:50] I work for the American people. [1:47:53] So can the President fire you? [1:47:55] He can. [1:47:56] He can fire you, correct? [1:47:57] Yes. [1:47:58] So isn't it a conflict of interest [1:48:00] that you're gonna be making these decisions [1:48:01] and the President has full power over you? [1:48:02] I think you're confused, Senator. [1:48:04] I am not part of the decision. [1:48:06] Well you're certainly a person that sends send [1:48:08] on the wire transfer and I think that's why [1:48:09] there's a lot of people there that actually [1:48:11] do not trust and do not trust the President's actions [1:48:13] to look at how he's best interest. [1:48:14] I guess you were saying that obeying the law. [1:48:15] I'm controlling the time here. [1:48:17] Obeying the law. [1:48:18] I'm controlling the law. [1:48:19] You're not obeying the law. [1:48:20] You're plundering US taxpayer dollars. [1:48:21] Obeying the law is to be. [1:48:22] Plundering US taxpayer dollars. [1:48:23] Obeying the law is to be. [1:48:24] Plundering US taxpayer dollars. [1:48:25] Obeying the law is to be. [1:48:25] Plundering. [1:48:26] Thank you, you're back. [1:48:29] Senator McCormick is now recognized. [1:48:33] Thank you. [1:48:34] Mr. Secretary, welcome. [1:48:36] In Pennsylvania, we're fortunate to have [1:48:38] abundant energy resources as you know [1:48:40] when you attended our summit. [1:48:41] A skilled workforce and world-class universities. [1:48:44] The pro-growth policies of President Trump [1:48:46] have enabled the Commonwealth to capitalize [1:48:48] on this optimism and investor conference [1:48:50] and it's attracted billions in investment and spurred growth. [1:48:54] The working families tax cuts are set to deliver [1:48:55] more than 600 billion dollars [1:48:57] a new relief to the middle class. [1:49:00] And still, there's more to be done. [1:49:02] Permitting reform, for example, would unlock billions, [1:49:05] perhaps trillions of dollars [1:49:07] that sits on the sideline right now. [1:49:09] And so, Secretary Besant, would you talk for a minute [1:49:12] about permitting reform and how important those reforms are [1:49:16] to unlock additional growth beyond the fantastic growth [1:49:20] we've seen so far? [1:49:21] Well, as I've often said, Senator, [1:49:23] the President's economic program is a three-legged [1:49:27] stool, trade, tax, and dereg, and permanent reform [1:49:31] is a very important part of the deregulatory agenda. [1:49:35] And as we've seen, more supply also pushes down inflation [1:49:43] and increases economic growth. [1:49:45] I think it is the deregulatory agenda [1:49:52] is the most unsung part of the President's agenda. [1:49:55] Yeah, I couldn't agree more with that. [1:49:57] And you know, there's going to be a big push, I think, [1:49:59] from the Senate. [1:50:00] There's already been legislation in the House. [1:50:02] And Mr. Secretary, looking forward to your support [1:50:04] for a permitting reform package, which I think could really [1:50:07] stimulate further the President's agenda. [1:50:11] Second question, the working families tax cuts [1:50:14] also created Trump accounts. [1:50:16] A new tool, creative, sort of really remarkable moment [1:50:19] to support families and build wealth for the next generation. [1:50:23] Can you talk just for a minute about the motivation [1:50:26] for the program, and what do you think this is going [1:50:28] to be able to accomplish? [1:50:30] Senator, 38% of American households [1:50:33] do not have any exposure to the US equity market. [1:50:37] So for the next four years, as $1,000 seed investment [1:50:40] are made to all newborns, it will bring them into the system [1:50:45] and set them on a path. [1:50:48] There can be contributions from family members, [1:50:51] from employers, from philanthropies, [1:50:54] from philanthropists. [1:50:56] And we believe that over 20 states will do this. [1:50:59] So it is going to be important. [1:51:00] It is going to, over time, allow all families to have [1:51:03] a share of the great American innovation and growth economy. [1:51:08] You know, as people I meet in Pennsylvania hear about this [1:51:12] and understand what it means for their kids, their families, [1:51:15] I mean, it's a really incredible step. [1:51:17] And I hope it's something we can really formalize and make [1:51:20] part of not just this great administration, [1:51:22] but future ones. [1:51:23] Well, I think too, Senator, thank you [1:51:25] for your leadership on this, that I have been a longtime [1:51:30] advocate. [1:51:30] I've been a longtime advocate of financial literacy. [1:51:33] And I think that this will be a real-time experiment [1:51:36] in financial literacy as the families, as the children, [1:51:39] are able to look at their accounts on their phone [1:51:42] and be part of this growth. [1:51:44] I think that it will become very real and engaging for them. [1:51:51] I agree. [1:51:52] Final question. [1:51:53] As you know, the trajectory of U.S. debt is unsustainable. [1:51:57] Net interest payments alone account for 14% of total government spending. [1:52:01] And higher debt levels combined with high interest rates put [1:52:04] upward pressure on the cost to service our debt. [1:52:07] Further, $10 trillion of government debt will mature over the next year [1:52:11] and roll over, which is a third, a little less than a third, I guess, [1:52:15] of debt outstanding. [1:52:16] Can you discuss briefly the conditions in the U.S. Treasury market [1:52:21] and the trends you're monitoring as we enter this period? [1:52:25] Senator, thus far the market has been very resilient. [1:52:29] We've had some of our best auctions. [1:52:31] In a long time this year we're seeing very good foreign demand. [1:52:36] But as you said, the trajectory, we have to get it back under control. [1:52:42] As I talked earlier, we need to get back to something with a three in front of it [1:52:48] in terms of deficit to GDP. [1:52:51] The reason I came out from behind my desk was I was worried that many people, [1:52:56] especially as Vice President Harris was campaigning, [1:53:00] I wanted to go into a European-style social democracy, low growth, [1:53:05] raise taxes, growth lower, more taxes, unsustainable debt. [1:53:09] So that's why at FSOC we are focused on growth as a desirable [1:53:16] but also a lack of growth as a financial stability risk. [1:53:20] Good. [1:53:21] I don't have time for a final question, but I will just say I want to compliment [1:53:24] you and the administration, and OFAC in particular, [1:53:27] for the maximum pressure campaign on Iran [1:53:30] and what that means for supporting freedom in Iran. [1:53:32] So thank you for that. [1:53:33] Thank you, your team. [1:53:34] Thank you. [1:53:35] Senator Blunt-Rochester. [1:53:37] Thank you, Ranking Member Warren and Mr. Secretary, [1:53:40] for your presentation of the 2025 Annual Report. [1:53:44] Mr. Secretary, in your testimony you talked about avoiding, [1:53:48] quote, regulation by reflex and focusing on growth instead of reacting [1:53:53] to every potential risk. [1:53:56] You say FSOC is, quote, tuning out the white noise to concentrate [1:54:00] on the issues that matter most. [1:54:02] From my constituent calls and emails and conversations, [1:54:08] I know for most families they don't experience economic policy [1:54:12] as white noise. [1:54:13] They experience it through higher rent, higher medical bills, [1:54:17] higher grocery prices, and just worrying that the next bill [1:54:22] or price increase will push them over the edge. [1:54:25] And it's why the Financial Stability Oversight Council's job [1:54:29] is so important. [1:54:30] And why it can't wait until markets break. [1:54:34] Its job is to spot problems early before families pay the price. [1:54:39] Housing-related risks have been showing up for decades. [1:54:44] On this committee we've worked on the road to housing in a bipartisan way. [1:54:50] And my first policy agenda actually as a senator was focused on housing. [1:54:55] So today I want to understand what Treasury has actually done [1:54:59] with these warnings. [1:55:01] Secretary Besant, in 2024, FSOC issued a report warning of weaknesses [1:55:07] in non-bank mortgage services, companies that now handle most U.S. mortgages. [1:55:12] Last year, on January 31, 2025, GAO also warned that trouble at these firms [1:55:19] could disrupt federally-backed mortgage markets. [1:55:22] So in light of these warnings by FSOC and GAO, what has Treasury done [1:55:27] in response to address the risks in the housing market? [1:55:30] Well, that was the Yellen Treasury. [1:55:34] And they said that everything was a risk. [1:55:37] Senator, that's why we are more focused. [1:55:40] But we are very focused on the mortgage market through Fannie and Freddie [1:55:44] and through the non-agency actors. [1:55:49] So is Treasury's position that this was overstated? [1:55:54] This risk was overstated? [1:55:56] As I said in my statement, if everything is a risk, nothing is a risk. [1:56:00] But I'm specifically asking on the issue of housing. [1:56:05] Yes. [1:56:06] I believe, and again, part of housing is being able to have tight spreads [1:56:12] in the mortgage market. [1:56:14] And we're at multi-year lows in the spreads versus Treasuries, [1:56:18] which tells me the mortgage market is very healthy. [1:56:21] And we had the lowest mortgage rate in the past three years in January. [1:56:25] Okay. [1:56:26] So the mortgage, you're saying it's healthy. [1:56:28] I know foreclosures are up. [1:56:30] 21% of mortgage delinquencies are four-year high. [1:56:34] I know all of that. [1:56:35] But separately, your 2025 annual report notes that FSOC created a [1:56:40] household resilience working group to identify early warning signs of [1:56:44] household financial stress. [1:56:46] It's my understanding that this working group was just created in December. [1:56:51] Has it met yet? [1:56:53] And what is it expected to produce? [1:56:56] Again, it's exactly as it seems. [1:56:59] It will be meeting. [1:57:01] Monthly. [1:57:02] It did not meet last month. [1:57:04] And we want to look at the household balance sheet and understand, again, [1:57:09] the question I got on consumer sentiment. [1:57:12] Is it sentiment or is it reality? [1:57:15] Where are the pressure points? [1:57:17] Because we do want to help working Americans and spot problems early. [1:57:21] So do you know what that, like, what are the outcomes? [1:57:23] What is it expected to produce? [1:57:25] Or could you share that? [1:57:27] Well, as it hasn't started yet, Senator, [1:57:30] I would look forward to sharing the work product with you as we move [1:57:34] through the year. [1:57:35] I would hope there is a plan. [1:57:37] Because I know usually if you set up a group, [1:57:40] there's a mission for the working group. [1:57:42] There's a plan, a set of expectations. [1:57:44] So look forward to hearing from you on that. [1:57:47] If you were to, you know, you mentioned in your testimony parallel prosperity. [1:57:53] And you mentioned Main Street and Wall Street. [1:57:56] If you were to rate how Wall Street, [1:57:58] how Wall Street is doing on a scale of 1 to 10, [1:58:03] 10 being it's doing well, [1:58:05] and Main Street on a scale of 1 to 10, [1:58:09] could you, what would you rate them? [1:58:11] Well, I'm not going to speculate, [1:58:14] but I will tell you the Wall Street Journal, [1:58:16] not the Main Street Journal, [1:58:17] criticized me for being a populist on my advocacy of Main Street. [1:58:22] And Main Street got killed during the Biden administration. [1:58:26] Wall Street did not. [1:58:27] So I only have 10 seconds. [1:58:29] We're trying to level. [1:58:30] In my 10 seconds, [1:58:31] I just want to say two things. [1:58:33] Number one, this is now your watch. [1:58:35] So I know there's been a lot of bringing up the Biden administration. [1:58:39] This is now your watch a year later. [1:58:41] And number two, families are truly hurting in this very present moment. [1:58:45] So I look forward to working with you and finding out about particularly housing [1:58:49] because it's one of the number one issues in this country across the dais. [1:58:53] Thank you. [1:58:54] And I yield back. [1:58:55] Senator Moreno. [1:58:56] Thank you, Mr. Secretary. [1:58:57] And also thank you for being so accessible. [1:58:59] You look at your predecessor, almost invisible. [1:59:03] You go out and you're on TV, [1:59:05] you're on the media to make certain that the American people and you're communicating with us on a regular basis. [1:59:10] That's a refreshing change. [1:59:12] I just have a question on your many TV appearances. [1:59:15] I noticed that you said that if the Democrats win, [1:59:18] they'll do it again. [1:59:19] Can you clarify what that means? [1:59:22] Yes. [1:59:23] We saw a spending surge during the Biden administration. [1:59:29] A blowout spending. [1:59:32] And again, the deficit to GDP numbers blowing out, [1:59:36] which according to MIT studies, [1:59:39] the spending was responsible for the inflation surge. [1:59:43] And at the same time, we saw mass unfettered immigration, [1:59:46] 10, 15, 20 million illegal aliens coming into the country and depressing wages, [1:59:53] taking low end housing. [1:59:56] And a study from Wharton, [1:59:59] which showed that much of the low end housing inflation, [2:00:03] especially in rents, [2:00:04] came from the 20 million new arrivals. [2:00:07] The law of supply and demand applies both for housing and for suppressing wages. [2:00:14] So I would say when I talk about that, [2:00:17] there will be blowout spending, [2:00:19] which will lead to inflation, [2:00:21] and then the border will be reopened. [2:00:25] So clearly this deportation effort, [2:00:28] especially the self deportations, [2:00:29] is going to lead to lower housing prices. [2:00:31] And we've already seen it, correct? [2:00:33] We have. [2:00:34] And rental properties are ranked A through D. [2:00:38] And D and C properties, [2:00:39] we are seeing a substantial decrease. [2:00:42] But what we are also seeing is because of the supply that is coming on, [2:00:47] we are seeing a decrease in rents nationwide. [2:00:52] As I said earlier, [2:00:53] true inflation, [2:00:54] an agency that puts out, [2:00:57] uses a basket of inflation, [2:00:59] but gathered real time inflation measures is now below 1%. [2:01:04] Yeah. [2:01:05] And speaking of that, [2:01:06] so let's talk about that real quick, [2:01:07] because there's things that obviously federal policy impacts. [2:01:09] And so an underlying cost to a lot of these key baskets of goods is the price of gasoline. [2:01:14] What's happened in the last 12 months? [2:01:16] Well, [2:01:17] price of gasoline is down substantially nationwide, [2:01:23] and we expect it to continue going down. [2:01:27] Also, [2:01:28] diesel, [2:01:29] diesel has been put for farmers, [2:01:31] for truckers. [2:01:32] So energy feeds into everything, [2:01:35] whether it is food costs, [2:01:37] whether it is manufacturing, [2:01:39] and again, [2:01:40] more supply and being on the side of the energy industry has resulted in lower prices. [2:01:49] And the same thing can be said about the question you got at the beginning of this testimony about groceries. [2:01:55] Eggs is an underlying ingredient in a lot of foods. [2:01:58] What's happened to the price of eggs in the last 12 months? [2:02:00] Well, [2:02:01] the price of eggs is down substantially. [2:02:04] The president had to wear that for a few months, [2:02:08] and then the price of eggs collapsed, [2:02:12] thanks to a lot of measures taken by ag under his direction. [2:02:17] But of course, [2:02:18] we don't hear about egg prices anymore. [2:02:20] I will say in my hometown, [2:02:23] Senator Scott's hometown, [2:02:25] I've noticed that the egg surcharge has gone off the menu. [2:02:28] Right. [2:02:29] In the diner we both like. [2:02:30] Right. [2:02:31] But there's some things that the federal government can't control. [2:02:33] And we had a conversation about electricity prices. [2:02:36] What state would you surmise? [2:02:38] I'm not trying to quiz you here, [2:02:39] but what would you surmise? [2:02:41] Which state has the highest cost of kilowatt hour? [2:02:44] Well, [2:02:45] California has the highest cost in everything, [2:02:47] the highest taxes, [2:02:48] the highest homelessness. [2:02:49] But believe it or not, [2:02:51] Massachusetts wins this one at 31 cents per kilowatt hour. [2:02:54] Ohio's at 17. [2:02:56] And so a lot of that, [2:02:57] wouldn't you agree, [2:02:58] Mr. Secretary, [2:02:59] that a lot of that is state policies, [2:03:01] the policies initiated by those states? [2:03:03] A huge amount of state policy. [2:03:05] And whether it's Kathy Hochul, [2:03:08] governor of New York blocking pipeline, [2:03:11] whether the decision in New York, [2:03:13] they are sitting next to the Marcellus shell, [2:03:16] will not allow gas in. [2:03:18] And the pipelines to New England or down from Canada, [2:03:22] New England has made the decision to deindustrialize. [2:03:26] Even when I was a college student, [2:03:28] Connecticut was a hotbed of small manufacturing. [2:03:31] Well, [2:03:32] and again, [2:03:33] let me just say from an Ohio perspective, [2:03:34] we're happy to provide low cost energy to New England. [2:03:36] Would you be surprised to know that Massachusetts also has twice the core inflation as a national [2:03:41] average? [2:03:42] I wouldn't. [2:03:43] And seeing the statistics for how many people are leaving the state, [2:03:47] I understand why. [2:03:49] So in conclusion, [2:03:50] you'd like to see states do more of the things that states like Ohio do, [2:03:54] and less like the things that states like Massachusetts do. [2:03:57] And the last thing we want to do is take those policies and make them national. [2:04:00] Would you agree? [2:04:01] I agree, [2:04:02] sir. [2:04:06] Senator Ulster-Brooks. [2:04:07] First, [2:04:08] I want to thank Chair Scott and Ranking Member Warren for holding today's hearing. [2:04:13] I certainly want to say to you, [2:04:14] Secretary Best, [2:04:15] and thank you for being here today to discuss our economy, [2:04:19] which is very much on the minds of Marylanders. [2:04:22] Before I get to my questions, [2:04:23] I want to make a quick comment on market structure legislation. [2:04:27] Mr. Secretary, [2:04:28] I speak for many of my colleagues, [2:04:30] when I say that we really want to get to a good bipartisan bill. [2:04:35] We want to get it done. [2:04:37] And I've appreciated working with your team, [2:04:39] both during the Genius Act and market structure process, [2:04:42] and really appreciate their attention to the issue of stablecoin paying yield and interest. [2:04:48] I am confident, [2:04:50] feel really good that we are going to get a bipartisan compromise that protects innovation and our community banks. [2:04:57] And I really encourage your continued work [2:04:59] on that issue. [2:05:00] Now, [2:05:01] the 2025 FSOC report confirms that 60% of small business loans and 80% of agricultural loans come from community and regional banks. [2:05:10] And I am very proud to be partnering with Senator Haggerty. [2:05:14] He and I have a piece of legislation to increase stability for businesses and their customers by expanding the deposit insurance available for business checking accounts. [2:05:24] And so I joined many Maryland business owners, [2:05:26] credit unions, [2:05:27] and small banks [2:05:28] who believe a target [2:05:29] expansion of deposit insurance could strengthen confidence in our financial system. [2:05:34] The first question everyone wants answered about changes to deposit insurance, [2:05:39] and it's a valid one, [2:05:41] is who pays for it? [2:05:42] I'm committed to working across the aisle to make sure that we get this right. [2:05:46] And I asked your colleagues, [2:05:48] FDIC Chairman Travis Hill, [2:05:50] about cost and benefits in October. [2:05:53] And Chairman Hill testified that a targeted expansion of deposit insurance [2:05:58] would likely not increase deposit insurance premiums on small banks, [2:06:03] and that any increased premiums on large banks would be small or immaterial. [2:06:08] Do you agree with Chairman Hill? [2:06:10] And more broadly, [2:06:11] will you explain to the committee [2:06:13] why a targeted expansion of deposit insurance can strengthen our banking system [2:06:18] and boost business and consumer confidence? [2:06:21] Senator, [2:06:22] I want to thank you for your partnership [2:06:24] on genius, [2:06:25] on clarity. [2:06:26] I am hopeful [2:06:27] that we can get that across the line this spring. [2:06:29] And I've been an outspoken advocate for small banks [2:06:33] because they are Main Street. [2:06:35] We've seen 50% of our small banks disappear [2:06:38] since the great financial crisis. [2:06:41] And I believe that is one reason [2:06:43] Main Street has lagged. [2:06:46] And a large part of that is overregulation. [2:06:50] But another part of this is moral hazard. [2:06:53] That during times of financial stress, [2:06:56] like in March 2020, [2:06:57] or March 2023, [2:06:59] there's deposit volatility, [2:07:01] deposits flee banks [2:07:02] because they believe that [2:07:04] whether it's the three largest, [2:07:05] the seven largest banks, [2:07:07] that there is no risk of loss. [2:07:09] But if they stay with the community banks, [2:07:11] and I've met personally with more than 200 community bankers, [2:07:16] spoken to 1,000, [2:07:17] but the 200 I've met with tell me [2:07:19] they could have clients for 50, [2:07:21] their families had them for 100 years, [2:07:23] and the money goes to Wells Fargo [2:07:25] and doesn't come back. [2:07:26] And doesn't come back [2:07:27] because exactly what you said, [2:07:29] because there wasn't one business checking account [2:07:32] that normally a payroll account, [2:07:34] they say, [2:07:35] I just can't lose this money. [2:07:37] And once Wells Fargo gets it, [2:07:40] they don't want to give it back, [2:07:41] they offer. [2:07:42] And as you get a decrease in deposits [2:07:45] through the fractional banking system, [2:07:48] then there is a reverse multiplier for lending. [2:07:52] So the banks lower deposits, [2:07:54] less lending available for Main Street, [2:07:56] so I think that you and Senator Haggerty, [2:07:59] Senator Haggerty and I co-authored a piece [2:08:01] in the Wall Street Journal. [2:08:02] I think this is an extremely important piece of legislation. [2:08:05] I would encourage your colleagues to pass it, [2:08:08] and anything I can do to advocate for it, [2:08:10] please let me know. [2:08:11] Thank you. [2:08:12] Now, one other question here. [2:08:14] Mr. Secretary, [2:08:16] I want to thank you for your public support [2:08:17] for community development financial institutions. [2:08:20] And that said, [2:08:21] I also echo Senator Warner's concerns [2:08:23] about the congressionally appropriated funds [2:08:25] being released. [2:08:26] Maryland CDFIs include banks and credit unions [2:08:29] that provide crucial funding for businesses, [2:08:31] housing and access to capital in underserved communities. [2:08:34] So I want to specifically mention [2:08:36] two CDFIs serving in Maryland [2:08:38] that regularly participate [2:08:40] in the Banking Enterprise Award Program, [2:08:42] which allows them to provide credit [2:08:44] and financial services [2:08:45] in some of the most distressed neighborhoods in Maryland. [2:08:48] The White House Office of Management and Budget [2:08:50] has withheld the notice of funding availability [2:08:53] for the BEA program since March. [2:08:55] In March of 2025, [2:08:57] and that's 11 months. [2:08:58] And so if the notice is not published, [2:09:00] CDFI banks cannot apply for funding. [2:09:03] So in March, [2:09:04] you said CDFIs are a key component [2:09:06] in supporting Main Street America. [2:09:08] Do you still stand by this statement? [2:09:10] I am eagerly awaiting [2:09:15] to have it released from OMB [2:09:19] so that we can move it forward. [2:09:21] As soon as it is released, [2:09:23] we will follow our statutory duty [2:09:25] and release to CDFI [2:09:27] and CDFIs. [2:09:28] I'm also very happy to see CDFIs [2:09:30] getting back to a core mission [2:09:32] of prosperity [2:09:34] and resilience for their community. [2:09:36] Thank you so much, [2:09:37] Mr. Secretary. [2:09:41] Secretary Besant, [2:09:42] thank you for your leadership [2:09:43] and your service to our country. [2:09:45] You've talked many times [2:09:46] about the ongoing burdens [2:09:48] and effects of illegal immigration [2:09:49] on our country [2:09:50] as a result of the open border policies [2:09:52] of the Biden administration. [2:09:54] Last year, [2:09:55] you said, [2:09:56] quote, [2:09:58] if you're here illegally, [2:09:59] there's no place for you [2:10:00] in our financial system. [2:10:02] And you also announced [2:10:03] that the Treasury Department [2:10:04] would propose regulations [2:10:05] to cut off federal benefits [2:10:06] and tax credits [2:10:08] to illegal aliens. [2:10:09] And I wondered if you could give us [2:10:10] a status update on those rules. [2:10:12] How can we protect [2:10:13] hardworking Americans [2:10:14] from illegals [2:10:15] who exploit our U.S. financial [2:10:17] and credit system? [2:10:18] And what are we doing about it? [2:10:20] Yes, sir. [2:10:21] So we have moved forward on that. [2:10:24] We have, [2:10:26] through the regulators, [2:10:28] had them done [2:10:30] double down on the KYC, [2:10:33] Know Your Client, [2:10:34] and to make sure [2:10:36] that everyone [2:10:38] within the regulated banking system [2:10:41] is legal. [2:10:45] The other thing we have found out, [2:10:47] and we saw it in Minneapolis [2:10:50] as the hotbed [2:10:53] of waste, fraud, and abuse, [2:10:55] is outside of the banking system [2:10:57] in money service businesses, [2:10:59] that a lot of money [2:11:01] is being wired out of the country. [2:11:03] We don't know where. [2:11:04] So this is a vulnerability [2:11:05] we've spotted in our system. [2:11:08] And we are cracking down on that. [2:11:10] We've also cracked down [2:11:12] at the southern border [2:11:14] because we've found [2:11:15] that lots of cartels [2:11:17] are using [2:11:18] or money laundering there. [2:11:20] And we've done that [2:11:21] in a targeted basis [2:11:23] rather than increasing costs [2:11:25] to all banks. [2:11:26] Is it your sense that it's working? [2:11:28] Yes, sir. [2:11:29] And what else can we do? [2:11:30] We are considering [2:11:33] a re-underwriting [2:11:35] of the clients. [2:11:37] And again, [2:11:39] many people are familiar [2:11:42] with what is called [2:11:43] a Suspicious Activity Report, [2:11:45] a SAR. [2:11:46] We find that many of those come in [2:11:48] after the horse has left the barn. [2:11:50] So we are encouraging banks [2:11:52] to be more proactive, [2:11:54] know your client, [2:11:55] and re-underwrite. [2:12:00] Can you give us [2:12:03] maybe an education [2:12:04] a little bit about [2:12:05] why all this matters? [2:12:07] How does it affect [2:12:09] my dad, [2:12:10] retired factory worker [2:12:11] in Fort Wayne, Indiana, [2:12:14] the cost of illegal immigrants [2:12:15] in our financial system [2:12:17] and the credit system? [2:12:18] Just give us a lesson [2:12:19] on why it matters. [2:12:20] Well, again, [2:12:22] it creates instability. [2:12:24] And it also creates, [2:12:26] we've seen, [2:12:27] I cited it earlier today, [2:12:29] we've seen [2:12:30] there's a Wharton study [2:12:32] that shows [2:12:33] that it increases rents [2:12:35] for working Americans. [2:12:37] It takes jobs. [2:12:39] So we could think [2:12:41] that if we look at [2:12:42] household resilience [2:12:43] for working Americans, [2:12:44] they got clobbered [2:12:46] because all of supply and demand [2:12:48] applies for low-wage earners [2:12:51] as you increase the workforce [2:12:53] by 10, 15, 20 million [2:12:56] in a very compressed period, [2:12:58] then you are going to see [2:13:00] the wage decreases. [2:13:02] Secretary, [2:13:04] I wish that my parents [2:13:06] would have had access [2:13:07] to Trump accounts [2:13:08] when I was born [2:13:09] and set something like that up [2:13:10] for me and my brothers. [2:13:12] I mean, what a game changer [2:13:13] that can be [2:13:14] to help babies today, [2:13:17] young kids today, [2:13:19] achieve the American dream, [2:13:20] who grow up [2:13:21] on the other side of the tracks [2:13:22] and have something, [2:13:24] have an option [2:13:25] like a Trump account. [2:13:26] I praise you [2:13:27] and President Trump [2:13:28] in this administration [2:13:29] for what you've done [2:13:30] to work with Congress [2:13:31] to create Trump accounts. [2:13:33] One gentleman, Brad Gerstner, [2:13:35] who is a native Hoosier, [2:13:37] like me, [2:13:39] he grew up [2:13:40] a very humble background [2:13:42] and made it big [2:13:44] and now he's given back [2:13:45] and funding Trump accounts [2:13:47] for Hoosier kids [2:13:48] who are born today. [2:13:49] And I know it's going to make [2:13:51] a big difference [2:13:52] for the next generation of kids. [2:13:54] One thing I worry about though [2:13:55] are politicians down the road [2:13:58] who want to regulate [2:13:59] those accounts [2:14:00] or they want to put restrictions [2:14:02] or rules that prevent [2:14:04] those accounts from growing. [2:14:05] What can we do [2:14:06] to protect this great vision today [2:14:09] to make sure that politicians [2:14:10] later don't ruin it? [2:14:11] Well, I think it's two things. [2:14:14] Mission creep, [2:14:15] that we are committed [2:14:17] to the lowest cost index funds, [2:14:20] that it does not become something [2:14:22] for social engineering, [2:14:24] that it is return based, [2:14:26] low cost, [2:14:27] broadly diversified [2:14:29] so that everyone owns [2:14:30] a share of the U.S. economy. [2:14:32] And Senator, [2:14:33] I think the more [2:14:34] that people become invested, [2:14:36] invested in these, [2:14:37] the smaller the chance [2:14:38] for meddling is [2:14:39] because I think [2:14:40] they will be adamant. [2:14:42] Thank you for your leadership. [2:14:43] I yield back. [2:14:45] Thank you. [2:14:46] So for senators [2:14:47] who wish to submit questions [2:14:49] for the hearing record, [2:14:50] those questions are due [2:14:51] one week from today, [2:14:52] Thursday, February 12th. [2:14:54] Secretary Besant, [2:14:55] you have 45 days [2:14:56] from that day [2:14:57] to submit your responses [2:14:58] to questions for the record. [2:15:00] Thank you. [2:15:01] Committee's adjourned.