Lawmakers Grill Treasury Secretary Scott Bessent In The Senate Finance Committee

[00:00:00] Speaker ?: Thank you. Thank you. Thank you. Thank you. Thank you. Thank you. Thank you. Thank you. Thank you. Thank you. Thank you. Thank you. Thank you. Thank you. Thank you. Thank you. Thank you. Thank you. Thank you. Thank you. Thank you. Thank you. Thank you. Thank you. Thank you. Thank you. Thank you. Thank you. Thank you. Thank you. Thank you. Thank you. [00:16:00] Speaker 1: Thank you. Thank you. Thank you. Thank you. Thank you. Thank you. Thank you. Thank you. Thank you. Thank you. Thank you. Thank you. Thank you. [00:22:29] Speaker 2: Thank you. Thank you. Thank you. Thank you. Thank you. Thank you. Thank you. Thank you. Thank you. Thank you. to health care and basic services. It's cold comfort to somebody who had to max out their tax credit card to feed their kids that Trump might get his face on a $250 bill. But that's the kind of priority that apparently the Treasury Department is focusing on these days. Even outside of economic matters, the Treasury Secretary is simply out of step with the American people. There's no better example than the fact that there's been a cover up of the massive file of Epstein's financial records for a year and a half. This is part of the effort I've made. It's the only one to follow the money in the Epstein situation. And yet there's been a denial of access to committee investigators and lying in public about their significance. That subject alone deserves its own hearing. Senate investigators are trying to figure out who paid Epstein for girls. And unfortunately, Secretary President Biden is involved in preventing that from happening. The bottom line in this administration is the machinery of government works to the benefit of Donald Trump before all else. That's the corrupt framework that produces insurrection slush funds, protects pedophiles and dismisses the concerns of people who are worried about being able to make rent and to feed their families. There is an awful lot for the committee to discuss today. Mr. Chairman, Mr. Chairman, Mr. Chairman, Mr. Chairman and I look forward to question and answers. Senator Crapo. Thank you, Senator Wyden. Secretary Bessett, you may make your opening statement. [00:29:09] Speaker 3: Mr. Chairman Crapo, Ranking Member Wyden and members of the committee, thank you for convening today's hearing. I'm grateful for this opportunity to discuss President Trump's 2027 budget, which builds on this administration's progress in unleashing a new era of economic expansion. Could you pull the microphone a little bit closer. I last appeared before this committee, just a few weeks before the Senate passed the working families tax cuts. So on the heels of the most successful filing season in IRS history, I'd be remiss if I did not begin by thanking the committee for helping to deliver this once in a generation bill to the president's desk. This day, under President Trump, we celebrated how much more money hardworking Americans kept, not how much the government took. Over 62 million tax returns claimed at least one of the president's signature new tax cuts. No tax on tips, no tax on tips, no tax on overtime, deductibility of American car loan interest, and enhanced deduction for low and middle income seniors. All told, the average refund increased by over 11 percent, with refunds increasing by 18 percent. But as important as what this legislation achieved is what it prevented. If opponents of the working family tax cuts had their way, our economy would have absorbed the largest tax hike in its history, over $5 trillion. Ninety percent of American taxpayers would have seen their standard deduction slashed, while 40 million families would have seen their child tax credit halved. Instead, this committee held the line, and the American people had a better tax day because of it. Notably, President Trump's pro-growth policies don't stop at putting more money back in the pockets of working middle-class families. They extend to placing the American dream within the closer reach of their children. For context, nearly 40 percent of Americans have no exposure to our great U.S. equity market. No stake in the companies they helped to build. Trump accounts represent a profound reimagining of that arrangement. They want sure that every American child can benefit from private ownership and compound growth, that every American child, in short, is born a shareholder. To date, nearly 6 million Trump accounts have been opened, with 1.4 million eligible for the $1,000 seed contribution. Of course, as his tax cuts deliver relief for working-class Americans, President Trump's economic agenda is bolstered by two other distinct but reinforcing levers, trade and deregulation. Let me briefly address both in turn. First, the president has undeterred his determination to open markets for U.S. goods and services, while rebuilding U.S. manufacturing capacity. Over the 12 months ending March 26, the trade deficit for goods declined by approximately $370 billion compared to the same time frame ending March 2025. The economy has added 313,000 net private sector jobs and 13,000 manufacturing jobs in the past two months. Firm capital expenditures rose at an annual rate of over 17 percent in the first quarter, and companies are investing trillions to build and expand here at home. American industry is winning again to the benefit of American workers. A whole-of-government approach, meanwhile, is coupling our manufacturing revival with a great regulatory reset. Properly calibrated regulation is essential for economic growth, capital formation, employment, and higher wages. So at the outset of this administration, President Trump set the ambitious benchmark of slashing 10 existing regulations before issuing a single new one. In 2025, we shattered the goal with a ratio of 129 to 1. As a result, the regulatory actions generated more savings last year than those of the prior Trump administration combined. Separately, any one of our initiatives on trade, tax cuts, and deregulation would be substantial. Taken together, they are transformative. Before President Trump took office, our trading partners exploited America's markets, our regulatory states smothered businesses, and our tax code was poised to punish workers and job traders. Today, his policies are driving lower taxes, bigger paychecks, and broader prosperity. So I thank you on this committee for its partnership in this critical work, and I look forward to building upon our stride through the President's budget for the year ahead. Thank you. And I do want, I had hoped to keep this, in terms of the economy, Senator Wyden has mendaciously slandered the Treasury Building in an attempt to cover up his son having an investment meeting with Jeffrey Epstein to ask for funding. Thank you. Thank you. [00:34:14] Speaker 2: Mr. Chairman? [00:34:18] Speaker 3: Yes. [00:34:19] Speaker 2: Let's be clear here. Nobody is interested in the ramblings of a capo in the most corrupt regime in American history. We want to get some facts about this deal. That's what we're here for. Thank you. [00:34:34] Speaker 1: Well, thank you, and I will ask my questions first today. [00:34:37] Speaker 3: And we would like to hear what Adam Wyden and Jeffrey Epstein talked about. Your son's largest investment position was Rick's cabaret. So did your son and Jeffrey Epstein talk about pole dancing as he begged him for money using your limited credibility? [00:34:57] Speaker 1: Should I just proceed? I'm going to proceed with my questions, and, Mr. Secretary, I'm going to start with regard to the issues that Senator Wyden raised. There have been a lot of accusations about the settlement agreement between the president and the IRS over the leak of his tax returns. On Monday, the Department of Justice announced that it would abide by the district court's ruling in joining the creation or operation of the anti-weaponization fund that was established under the settlement agreement. Yesterday, Acting Attorney General Todd Blanche announced at a hearing that we are not moving forward with the fund, period. With respect to other parts of the settlement agreement, I'd like to give you the opportunity to set the record straight. Understanding that there is ongoing litigation, what can you share with us about Treasury and the IRS's role in the settlement agreement? Specifically, since IRS CEO Frank Bisignano signed the settlement agreement, what can you share with us about Mr. Bisignano's role in reaching that agreement? [00:36:09] Speaker 3: Thank you for the question, Mr. Chairman. As we have done throughout this matter, the Department of Treasury is following the direction of the Department of Justice. And as you noted, Acting Attorney General Todd Blanche testified yesterday that the government will not be moving forward with the fund. We intend to comply with that direction. I do not have any additional details into what that means at this time, but I will note that even with the Acting Attorney General Blanche's statements yesterday, this matter is still subject to ongoing litigation, so I'm unable to comment further on it. As with all department litigation, the Department of Treasury and the IRS were represented by the Justice Department. So any additional questions about the settlement or the fund should be addressed to the Justice Department and Acting Attorney General Todd Blanche. Thank you, Senator. [00:37:02] Speaker 1: All right. Thank you. And with regard to the working families' tax cuts, affordability remains top of mind for families across this country. Last summer, Republicans acted to prevent what would have been the largest tax increase in American history and delivered meaningful pro-growth tax relief through the working families' tax cuts, providing much-needed support to American workers and families. Can you talk about Treasury's work so far to implement this groundbreaking tax relief, and what parts of the law do you view as the most helpful in addressing affordability issues? Thank you, Senator. [00:37:40] Speaker 3: Thank you, Senator. Since the working families' tax cut was passed in record time on July 4th, I would describe the benefits as a barbell. On one side, we have seen for American business immediate -- the immediate expensing of capital goods and factories, which have led to more jobs and construction jobs. On the other side, we have seen the president's signature policies, no tax on tips, no tax on overtime, reduced taxes on Social Security, and deductibility of American-made cars on the loans for those. Ninety-nine percent of the filers claiming any of those four deductions had incomes under $200,000. We saw record tax refunds, and we are not able to measure the delta in the refunds because we can only calibrate someone who had gotten a refund the year before so that we cannot calibrate if someone had paid in. And as I have traveled across the country, many people have said paid a substantial amount last year. I've gotten a very large refund this year, and I think, very importantly, too, the certainty that our small businesses have gotten. [00:39:00] Speaker 1: Thank you. The Senate Finance Committee is engaged in productive bipartisan discussions on the taxation of digital assets. As the digital asset industry continues to grow and evolve, there's an increasing need for durable, common-sense rules of the road that provide certainty for taxpayers, support innovation, and help ensure that the United States remains competitive in the global digital markets. Does Treasury support congressional efforts to develop comprehensive digital asset taxation? And in your view, what are the risks of continued inaction, both in terms of taxpayer compliance and America's ability to remain competitive in the rapidly growing digital asset economy? [00:39:41] Speaker 3: Well, Senator, since President Trump issued his executive order, Treasury has been working tirelessly to implement the action on digital assets. We saw Congress pass stablecoin legislation, Clarity Act, which I would encourage everyone to get behind. It's very necessary to bring U.S. best practices onshore, and we work tirelessly in terms of custodianing these assets and keeping them, making the U.S. the innovation capital of the world. [00:40:16] Speaker 1: Thank you very much. My time has expired, and I encourage all my colleagues to note when their time expires, we want to keep moving expeditiously. Senator Wyden. [00:40:24] Speaker 2: Thank you very much, Mr. Chairman. Secretary, yesterday, Acting Attorney General Todd Blanche indicated that the administration is not moving forward with the slush fund, but there's been no indication of what this means for the Trump alleged IRS audit immunity. So my first question is, does the IRS audit immunity given to Trump his family and his businesses still stand? I'd like a yes or no answer to that. [00:40:53] Speaker 3: You can ask me a question, you can't tell me how to answer it. [00:40:58] Speaker 2: I got five minutes, I'm going to use them for these questions. [00:41:01] Speaker 3: Okay, so that we understand what's at stake here. [00:41:12] Speaker 2: This immunity deal is the biggest scam against the taxpayer in American history, and Americans are going to pay taxes, and Trump and his Klan won't. So we'll start with that. Now, my second question is, every president's tax return gets audited, Mr. Secretary. Who originated the May 19 addendum canceling Trump's audits? Was it Trump, DOJ, or Treasury? [00:41:38] Speaker 3: Again, sir, as Albert Einstein said, doing the same thing and expecting a different answer is the definition of insanity. [00:41:45] Speaker 2: You've given no answers on this subject, and that's why I'm going to ask these questions. Does the DOJ have the authority to settle a tax dispute unilaterally? [00:41:57] Speaker 3: The DOJ acts as the attorney, they have four Treasury and the IRS. [00:42:02] Speaker 2: So the tax code says the DOJ can only settle a tax dispute if you, the Treasury Secretary, first deferred the dispute to DOJ in the case we're talking about. So here, Trump, his kids, all of the business entities they own, potentially thousands of tax returns, and unless you referred every single one of those tax returns to DOJ, the addendum is invalid, or the Treasury and the IRS believe have been more involved in this scandal, as far as I can tell, than you've led us to believe. So I'm going to keep digging into the timetable here. Career IRS attorneys wrote a 25-page memo preparing defenses against Trump's lawsuit, and they recommended DOJ move to have Trump's lawsuit dismissed. The IRS reportedly gave this memo to Treasury officials in April before the settlement. Did you see that memo? [00:42:56] Speaker 3: Again, uh, there's continuing litigation and I'm unable to answer. [00:43:01] Speaker 2: Will you provide this committee with a copy of the IRS memo? [00:43:07] Speaker 3: Again, sir, there's continuing litigation. [00:43:11] Speaker 2: Mr. Chairman, I'm going to continue my questions, but I would like to ask you now to authorize the 6103 waiver and for Mr. Besson to waive the attorney-client privilege, which I guess is part of what he's up to. [00:43:25] Speaker 1: I will not -- I'm not quite sure what you're asking, but I will not agree to ask him to waive his attorney-client privilege. [00:43:33] Speaker 2: The way we're going to get to the bottom of it is to have the committee look at these matters in a bipartisan way, and I'm just going to continue with the questions that highlight my argument. The Biden administration prosecuted Charles Littlejohn, the Booz Allen contractor who leaked Trump's tax returns. Booz Allen, which helped with the prosecution, held contracts with the Treasury Department for years. Three days before Trump filed his lawsuit this year, you abruptly canceled all the contracts. It is hard to see that timing be a coincidence. Did you know in advance that Trump was going to file a suit against the IRS? I did not. All right, I've written to you twice asking for records related to this decision. And both times you refused, I'll ask again. Will you send the committee all records documenting this decision so we can review this in a bipartisan fashion? [00:44:25] Speaker 3: Again, there is ongoing litigation, and Senator, how we got here was a violation of President Trump's 6103 rights. And it wasn't just President Trump. There were 400,000 tax returns that were leaked by Mr. Littlejohn. And I will point out that Mr. Littlejohn was not prosecuted to the fullest extent of the law. The Biden administration, he was eligible to be prosecuted on three counts. The Biden administration chose light touch and only prosecuted him on two counts. [00:44:56] Speaker 2: We're going to continue these questions, and I come back to my point, Mr. Chairman. We need you to support this 6103 waiver so that this committee on a bipartisan basis can look into a matter like this. When you're talking about the president of the United States, it doesn't get any more important. And I'll just close my opening effort to try to ferret out the facts here, Mr. Chairman, by saying, Mr. Secretary, this whole settlement, in my view, is the most brazen abuse of power ever in our history. And as of now, every American is subject to audit except Donald Trump and his family. I think that's absurd, and you've been dodging questions. Each one of these, you had a legal argument for saying nothing. And I suspect you cleared the way for Trump's lawsuit when you canceled the contracts. And I suspect people right up to the highest level of the Treasury Department had a hand in crafting this unbelievably corrupt gift of a settlement. And I just want an understood colleagues. I want to work with every senator on this committee to get to the bottom of this, because we aren't getting the facts. And the secretary, in spite of the fact that he owes answers to the American people, is just dodging and bobbing and weaving. Thank you. [00:46:12] Speaker 1: Senator Grassley. [00:46:13] Speaker 4: I'm going to start first with a comment and a commendation to the department. In regard to a program that Senator Wyden and I have been involved in, and I think the department's doing the right thing, but I think you're getting pressure to change. So I want to commend you and the IRS for protecting the integrity of the conservation easement deduction by holding those engaged in abusive syndicated conservation easements, hold them accountable. These abusive transactions generally rely on highly inflated appraisals that result in taxpayer investors saving $2 in taxes for every $1 spent. So to be perfectly clear, these arrangements perverted a charitable deduction to turn a significant profit. In 2020, finance committee report that details Senator Wyden's in my investigation of these arrangements, clearly shows that both the promoters and the taxpayer investors understood them to be tax shelters. So I encourage you and the IRS to stand by recent settlement offers and ignore those who I think are lobbying you to water it down. Good. Thank you. Thank you for your comments, Senator. In 1981, at the time of growing deficits and elevated inflation, Fed Chairman Paul Volcker advised Congress to cut spending and to pursue crow growth policies. He urged Congress to focus on reforms that would incentivize Americans, in his words, to invest, to save, and to work. The working families tax cut law adhered to the Volcker approach. It reduced spending by over $1 trillion while making provisions of the 2017 tax law focused on spurring domestic investment permanent, like full expensing for new factories and factory improvements. How important has the working family tax law been in terms of promoting economic growth, job creation, and wage growth? [00:48:55] Speaker 3: Senator, it has been essential to the success that we have seen. For the past four quarters, the U.S. economy has grown at 2.6 percent, and that is despite the democratic government shutdown in the fall, and that is despite the Iranian conflict, which will make our country safer. And what we are doing, on the household side, as I said, they have almost 50 percent of the tax returns we received had one of the president's four signature policies. On the other side, the pro-growth, the tax policy for our corporations, immediate expensing of capital equipment, of structures, including farm structures, and the 100 percent expensing for R&D and certainty, Senator. It is the certainty that allows both big and small businesses to be able to plan for the future, for hiring for capital expenditures, and it is this capital stock and investment that generates high after-tax returns and increases productivity, and if productivity increases, or what increases real standards of living, sir? This will have to be my last question. [00:50:11] Speaker 4: You've been a proponent of targeting annual deficits of 3 percent of GDP, which roughly aligns with the post-World War II average. During the last two years, the Biden administration, we saw a deficit of 6.2 percent and 6.3 percent. In 2025, President Trump's first year in office, the deficit came in at 5.8 percent of GDP. How does President Trump's budget and deregulatory agenda ensure the annual deficit stays on a downward trend towards that 3 percent that you advocate? [00:50:52] Speaker 3: Senator, as I said all the way back as far as my confirmation hearing, we do not have a collection problem. We have a spending problem, and we have a growth problem. So if we can constrain spending and grow our economy, then we have the ability to pay down debt and get back to the 3 percent target, which I believe that we can achieve something with a 3 in front of it by the end of President Trump's term. [00:51:22] Speaker ?: Thank you. [00:51:22] Speaker 5: Senator Warner. Thank you, Mr. Chairman. Secretary Besant, good to see you again. Good morning, Senator. Yesterday, the administration took an action that, again, I thought I could no longer be surprised. But I was surprised. The President put in Bill Pulte as the Director of National Intelligence. Now, I know it's not your area, but the whole law that was set up establishing the Director of National Intelligence was to make sure that this position was filled by someone with a great deal of national security experience. Now, Mr. Pulte currently is within your domain. Do you know does Mr. Pulte even have a security clearance? [00:52:08] Speaker 3: Senator, I do not. [00:52:12] Speaker 5: And being head of the FHFA, isn't that a full-time job? [00:52:18] Speaker 3: It's a very important position. [00:52:21] Speaker 5: So the notion that Bill Pulte is going to remain as head of the FHFA and Moonlight as the Director of National Intelligence, I don't understand. But to me, it seems insulting to the thousands of men and women who work in the intelligence community. Again, Mr. Pulte reports to you -- [00:52:46] Speaker 3: No, it's an independent administration. [00:52:48] Speaker 5: But within -- let me just ask -- let me ask you this. How would you describe Mr. Pulte's temperament? [00:52:58] Speaker 3: Mr. I spoke with Director Pulte yesterday and congratulated him and said, I look forward to continue working with him on FHFA matters and wished him luck as he gets up to speed in DNI and told him that we had several pressing issues on Iran. [00:53:17] Speaker 5: Mr. Pulte, you're very -- you're totally comfortable with the notion that Mr. Pulte, who I -- at least in press reporting, you've had quite a number of differences with -- is going to be able to do both the Director of FHFA and the Director of National Intelligence. [00:53:31] Speaker 3: Well, sir, many teams squabble in the locker room and go out in the field. Okay. [00:53:36] Speaker 5: Well, Mr. Pulte has had a record of not respecting confidential information. He has weaponized mortgage information. I think everyone would at least acknowledge the factual basis of that. And the idea that he's going to suddenly be given the keys to the most classified secrets that keep our country safe. I just would have wished that someone in the White House would have gone to the emperor and said, on this one, you've got no clothes. And it's -- it's an embarrassment. Let me get to another topic. Agentec AI, you know, I'm -- I think -- I think there's great promise from AI. There's also downsides. But as we think about agentec AI agents -- I'm sending letters on this -- I think we need a strong fiduciary regime around those agents. I mean, one bank said to me recently, if your agentic AI agent goes off and buys a bunch of retail stuff for you, and you get it home, and then a human being says, "I don't want this stuff," who bears the burden? As you think about, you know, the notion when we've talked about this in the past of agentec AI agents, do you believe that we need some level of strong fiduciary regime? [00:55:02] Speaker 3: The president's executive order yesterday, I think, strikes a very good balance between innovation and safety, because that is a calculus we are trying to optimize for. I've been in contact with all of the large language model labs. I was in San Francisco on Saturday meeting with them, and we have convened -- at Treasury, we have convened the largest banks, and they are working diligently on their standards, because, by their nature, they have the strongest cybersecurity departments. I think that the rest of industry can learn from them. [00:55:44] Speaker 5: Well, again, we may agree to disagree, and the notion that a simply voluntary regime fiduciary duty would apply some duty, I've talked to many of the banks, they think, with mythos, they are totally unprotected. And the idea that we're going to have only a voluntary regime, I believe, will put our banking system at risk, clearly our national security at risk. And I felt like the president's earlier draft made a lot of sense. I was very disappointed it was watered-down Latin. [00:56:12] Speaker 3: But, Senator, the only difference in the draft was 90 to 30 days. [00:56:18] Speaker 5: Senator Bezman, the draft I saw earlier had a stronger than strictly voluntary regime. But I want to get my last point in quickly. We still got to get the CDFI money out. We got 32 senators, 16 on each side, including the chairman. The money is sitting there. It needs to get out. [00:56:40] Speaker 3: Yes, sir, that we have gotten out what we have been allocated from OMB. OMB did not apportion it until April 8th. And we are getting that funding out. [00:56:53] Speaker 5: It's June, but there still hasn't awarded a single dollar in the money. Thank you. [00:56:58] Speaker 1: Senator Scott. [00:56:59] Speaker 6: Thank you, Mr. Chairman. Secretary, thank you for taking some time to be here with us today. Good to see you again. Good to see you all. Thank you, Senator. I hope all is well in Charleston. I don't get back much. Well, we miss you there. So, find a way back to the Holy City. We need to see you more often. Let me just first say to you and particularly to your staff, as well, on the issue of homeownership. As you know, we worked in the banking committee for a long time on the 21st century road to housing. Your team has been fantastic to work with. And frankly, this is an issue that is not a Republican issue or Democrat issue. Every member of the Democrat side of the aisle, as well as Republicans, work together, hand in glove to make sure that we keep America's priorities first. And that makes 2026 the year of affordability. Your team has been fantastic to work with on the issue of housing. So, I want to say thank you on that one, number two. I will have a question for the record around an issue of 45Y, clean electricity production tax credit is an issue that I would love to get a response from you, not now but later on. But I do want to ask you a question, Mr. Secretary. As you know, economic security is national security. And the Treasury Department plays a critical role in the United States national security apparatus. With the emergence of digital assets, I was curious if you could touch on the Treasury's role in fulfilling President Trump's executive order that set up the Bitcoin strategic reserve and digital asset stockpile. Could you give me an update on where things stand with the implementation of the executive order? [00:58:25] Speaker 3: Yes, sir. And I couldn't agree more with you that economic security is national security. I gave a speech at the Reagan Library outlining my thoughts on that and how for 25 years the U.S. has been asleep and under President Trump's leadership. We are moving forward very quickly on that. And part of that is our digital assets initiative. The strategic Bitcoin reserve is something -- this is new technology, this is new ground. We are proceeding with all deliberate speed. And we are making sure that as we are doing this in this complicated process that we use best processes and things will be durable for the future. And I look forward to working with you and your team on that. Absolutely. And I look forward to the clarity act being passed this summer. Great. Thank you. [00:59:16] Speaker 6: Another question on IRA accounts. President Trump signed another executive order, 14403, to increase Americans' access to IRAs for those workers who lack employer-sponsored retirement plans. Also, the order directs you to prepare legislative recommendations for building upon the trumpira.gov. Do you have a timeline, something in mind, that would be helpful for us to appreciate as it relates to perhaps a Trump accounts 2.0? [00:59:48] Speaker 3: So, sir, we have the launch of Trump accounts on July 4th. Oh, good. And we are consumed with that. So, they will begin July 4th of Saturday. They will begin trading and go live on July 6th. And then we will be laser-focused on the IRA accounts directly after that. [01:00:11] Speaker 6: Excellent. I do think it's important for us to take some time on the Finance Committee to recognize one of the more important issues facing the American people as it relates to those half-hour workers do not have access to -- maybe not quite half our workers, but a significant portion of our workers do not have access to an IRA. And frankly, having this focus from the administration, I think, is powerful and important and recognizes the importance of making sure that everybody has a chance to accumulate equity in this country, which typically comes through either home ownership, business ownership, or an equity position in the stock market. This approach provides access to that opportunity. And speaking of opportunity, as you know, it would probably be just inappropriate and shocking if I did not mention opportunity zones, because I do every single time I see you, because I do think it's one of those consequential pieces of legislation that has a generational impact and a positive way for the poorest communities in this country. Governors across the country are right now currently working on figuring out where they want the designations within their states on this 10-year new window. I'd love to have an update from you as it relates to streamlining the opportunity zone nomination process, as well as if there are any best practices that governors should take into consideration that you have become aware of, it would be great to hear. [01:01:26] Speaker 3: Yes, Senator, and as a reminder, every Democrat voted against opportunity zones. Thank you. So what was especially great about this bill is it expanded, created stronger rural opportunity zones. So that is part of our guidance to the states. Treasury is engaging with state officials ahead of the next nomination round, and we're working to provide transition guidance so that investors will have the clarity they need to keep putting capital work in the communities that need them the most. [01:02:00] Speaker 6: Mr. Chairman, I know I have two seconds left, so I'll use those two seconds pretty quickly here. Heirs are bipartisan piece of legislation not supported by my friends on the other side, but every mayor that I've run into around the country, blue or red, love opportunity zones. Thank you. [01:02:14] Speaker 3: Yes, and Senator, several of your colleagues from the other side of the aisle have called me because they were distressed that their state may be losing an opportunity zone, and I pointed out that they voted against them, but because of your good will, we would be working with them. God bless you. Yes. [01:02:30] Speaker 1: We all love opportunity zones. Senator Hassan. [01:02:34] Speaker 7: Well, thank you, Chair Crapo and Ranking Member Wyden for holding this important hearing. Good morning, Secretary Bessenton. Thank you for testifying. Good morning. I want to start with a question that I think should get bipartisan support. The Treasury Inspector General for Tax Administration recently said that the Treasury could prevent a billion dollars in fraud if Congress moved up certain deadlines for businesses to file information returns. This would help give Treasury the information it needs earlier in the year to stop fraudsters from stealing taxpayers' identities and their tax refunds. Will you commit, sir, to working on a bipartisan basis with members of this committee to advance this proposal and help the Treasury stop identity theft and fraud? [01:03:19] Speaker 3: We look forward to working with both sides of the aisle on that, Senator. [01:03:23] Speaker 7: Thank you very much. And just an observation, Mr. Chair. There's been discussion of a so-called settlement of a lawsuit between the President and the IRS. I just want to note that the so-called settlement is being challenged because of collusion, it appears, by the President and the IRS to the point where I'm not sure a settlement agreement actually exists because the court is considering whether this is a legitimate lawsuit to begin with. But what the Acting Attorney General did say yesterday was that despite the slush fund being off the table, at least for now, that the grant of immunity for tax liability to the President and his family still was going to be on the books. So this is a sweetheart deal for the President. It apparently is still going forward unless a court puts a stop to it. And I think it's going to be important for the Secretary to level with the American people about how much this sweetheart deal will cost them. Some news reports suggest it's at least $100 million just off the top. Now, Secretary Besant, in May, the President said that he does not think about Americans' financial situations. Do you think about the financial situation of the American people? [01:04:38] Speaker 3: I do. And as the ranking member distorted my statement, as he often does, I had prefaced my statement with, we understand that these are challenging times for the American people, that we will get over this, and that at present the average household has paid about $200 more in gasoline. And we think about this every day. [01:05:00] Speaker 7: Well, I'm glad that you do. Do you think your boss should, too? [01:05:04] Speaker 3: I believe his remarks were taken out of context. No, look. Here's what he said. [01:05:10] Speaker 7: He said, quote, "I don't think about Americans' financial situation. I don't think about anybody." So I'm asking you -- that's the direct quote -- do you think about how the American people are paying more for gas, groceries, and utilities, since the President clearly said he didn't? And you speak with the President regularly. Are you trying to tell him the truth about how much costs have increased for the American [01:05:33] Speaker 3: people? Well, Senator, I'm going to have to disagree with you on some of that, because I have groceries are going down. And to be clear, since President Trump took office, food prices, or as many people like to call them groceries, food at home in the statistical data, ends up 2.5 percent -- [01:05:50] Speaker 7: When's the last time you were in a grocery store? Because my husband and I were just in one. And look, the average Granite Stater -- the average Granite Stater is paid -- let me be clear. The average Granite Stater has paid $3,000 more since Donald Trump took office for basic goods and services. Meanwhile, the country lost 100,000 manufacturing jobs in 2025. So do you tell the President this information or not? [01:06:15] Speaker 3: Again, Senator, except for inflation, which is, I believe, going to be a short-term blip, the economic data is very strong. The jobs data has been very strong. The manufacturing ISM has been very strong. No, actually, that's incorrect. [01:06:30] Speaker 7: So let's move on, because what's clear to me -- [01:06:32] Speaker 3: Which part was incorrect, Senator? [01:06:34] Speaker 7: No, what is very clear to me is that neither you nor the President nor this administration are willing to acknowledge how much more people are paying at the gas pump, at the grocery store, in utilities, for healthcare, for all aspects of American life, nor have you acknowledged the number of manufacturing jobs that were lost in 2025. Now, let's move on to another issue. [01:06:56] Speaker 3: Senator, Americans are paying 2.5% more for groceries since President Trump took office, which is half the annual amount under Biden administration. We're not talking about Biden. We're talking about this administration and its promise to lower costs and the fact that this President says he doesn't care. [01:07:14] Speaker 7: Now, let's go on to it. We brought it down. Mr. Secretary, my time is limited. I'd like to reclaim a little bit of my time, because I have one more question. The administration has claimed that its top priority is lower in costs for American families, but the President instead continues to pursue vanity projects at a significant cost to taxpayers. He requested a billion dollars for the White House ballroom, spent $45 million on military birthday parade, proposed $100 million arch at Memorial Circle, and now Treasury is planning production of a $250 bill with his face on it. Mr. Secretary, how does the President's requested billion-dollar ballroom or all of these other vanity products lower costs for American families or help constrain spending? [01:07:59] Speaker 3: Mr. Secretary, Senator, first of all, you're incorrect. There is no cost to the American people. If there is a new bill for the ballroom, the decorative part of the ballroom is privately funded, and everything that you were talking about -- [01:08:13] Speaker 7: The President requested a billion dollars for the White House ballroom in our budget. He has spent $45 million on a military birthday parade, so -- [01:08:22] Speaker 3: That all -- look, it goes on outside my office every day. I've watched it progress, and it is national security matters that the billion dollars is for. [01:08:31] Speaker 7: That's ridiculous, and I think you know it. I'll yield back my time. Thank you, Mr. Chair. [01:08:37] Speaker 1: Senator Johnson. [01:08:39] Speaker 8: Thank you, Mr. Chairman. Yeah, Mr. Secretary, I don't recall back in, let's say, June of 2022, when the average national price of gasoline was $5 a gallon. When we were experiencing 40-year high inflation, about 9 percent. I don't recall Democrats being all that exercised and coming to these hearings and battering the White administration officials of why, you know, living is so unaffordable. Do you recall that back in 2022, 2023? [01:09:06] Speaker 3: Well, what I do know, sir, is that pyromaniacs like fire, so they can't stop talking about what they did. And they -- as I was trying to tell the senator, since President Trump came into office, food at home has increased by 2.5 percent, moving back toward the Fed's 2 percent level. And every year averaged 5 percent, so it is half the price. We elevated the level. And to be clear, Senator, what we have not heard is an apology to the American people. [01:09:41] Speaker 8: So the other thing we haven't heard is a concern over the massive amount of fraud that we are being told about every day. Democrats wanted to -- a clean extension of the enhanced subsidy under Obamacare, even though once it expired, people got the subsidy anyway. But they couldn't care less if there are maybe 6 million people now is what the current estimate is. 6 million people or phantom people taking advantage of those subsidies costing the Treasury $25 to $35 billion a year. No concern about that from the other side of the aisle. I want to focus on fraud. The lowest estimate on the annual basis comes from GAO at $250 billion a year. We had the CEO of LexisNexis who didn't realize he did this kind of research. They put the annual figure about a trillion dollars. I think you've come up with your own figure. What do you estimate? Annual amount of fraud in the federal budget. At least $500 billion, sir. So again, this is a range of somewhere between 3.3% and 13.3% of our budget. A recent story, I heard it on the radio this morning, a fraudster in California in one year, from May 22nd to April 2023, $270 million of claims. He was paid $178 million in fraud in California out of Medi-Cal. Do you have any idea how much -- okay, he's been prosecuted, he's been convicted. Do you know how much of that $178 million was recovered? [01:11:15] Speaker 3: Sir, what I can tell you is once the money goes out the door, it's very difficult to recover. The best way to prevent the fraud is to prevent it before it goes out the door. And, Senator, I will tell you, the other heartbreaking part of this is I did a round table in greater Minneapolis, and there were several owners of autism clinics there, valid clinics, that -- who are -- they are having trouble getting funded, and they are doing the right thing for these families and for those children. Right. [01:11:47] Speaker 8: So the fraud prevents the money going to the people who truly need it. Exactly. It's really intended for. And that's my point. The -- I don't think this is up to date, but it's the -- the most recent figure we have. The Department of Justice publishes their list of indictments and prosecutions. About $4.7 billion is being prosecuted out of a total of somewhere between $250 billion and $1 trillion in fraud. So I know Dr. Oz suspended payments to, what, 400 hospice centers in California? And Los Angeles has a third of all hospice centers. They suspended payment to 400, and not one of them complained. Why wouldn't one of those 400 hospice centers not complain about losing their funding? [01:12:35] Speaker 3: Again, Senator, we could speculate that it's -- it's fraudulent. And the key here, Senator, is transparency. We need to be able to see where this money is going. For everything that went on in Minneapolis and Minnesota, there was transparency. There was a list of the layering center. You were able to see. Receive this much. This is the address. These are the people. [01:13:00] Speaker 8: But Democrat government officials ignored that transparency, didn't they? It was written -- they had access to it. They ignored it. [01:13:06] Speaker 3: Well, they ignored that. But in many states, like New York State, Illinois, they refuse any level of transparency. [01:13:12] Speaker 8: I believe that's true of the governor of Wisconsin, as well, refusing to turn over records on, you know, some of the welfare benefits that Wisconsinites get, correct? It should be a bipartisan issue, sir. So what can you do? I mean, to prevent it. I mean, Dr. Oz obviously just suspended payments. I'd imagine you're somewhat limited there. I mean, I know Vice President Vance has got a fraud task force. We've got to get our arms around this. And we're not going to get any help from the other side of the aisle. So it's going to have to be done through executive action. What can you actually do? [01:13:46] Speaker 3: We are supporting Vice President Vance in this task force. There has been a new assistant attorney general appointed to do this. And this is an all-of-government effort by the Trump administration. Well, we wish you luck. It's crucial. Thank you, Mr. Chairman. Thank you, Mr. Chairman. [01:14:01] Speaker 1: Thank you, Senator Whitehouse. [01:14:05] Speaker 9: Thanks very much. Secretary, welcome. Have you identified any precedent in Treasury or IRS history for the agreement not to audit, investigate or pursue any tax claims against the Trump family or businesses? [01:14:36] Speaker 3: I can't identify any precedent where 400,000 tax returns, including the people you just mentioned, and all of their employees were leaked in a violation of the most -- one of the most sacred duties of the IRS. [01:14:52] Speaker 9: So let me cut to that then. The leak was by a contractor. Can you tell me what contribution is being sought by Treasury or by the IRS for the harm done by the contractor? To a certain extent, your organization and the IRS are the victim of the contractor's malfeasance or negligence. What is being pursued by way of contribution by that contractor? [01:15:22] Speaker 3: Well, the ranking member chastised me for cutting the contractor's contracts off. And we have removed their contracts, their ability to do business with Treasury and the IRS. [01:15:34] Speaker 9: But there is no contribution into this particular case. [01:15:40] Speaker 3: Again, Senator, you weren't here earlier, but I'm unable to discuss most of this because of ongoing litigation. Yeah, I know you like -- everybody likes to say that, but the constitutional -- We like to follow the law, Senator. [01:15:53] Speaker 9: And the law is that the Congress has constitutional oversight functions that do not disappear simply because there is litigation, however convenient it may be, by way of providing answers. So we have no precedent for it. No contribution is being sought from the contractor at fault. Was there any consideration to the government in return for the benefits of no audit, no investigation, no challenge or pursuit of refunds or other penalties? [01:16:34] Speaker 3: Again, Senator, I'm unable to comment because of litigation. Treasury is represented by the Department of Justice in all matters. They act as our attorneys, so I would suggest that you direct your questions to Acting Attorney General Blanche. [01:16:50] Speaker 9: Yeah, well, I've had a lot of times people who are before us invite me to ask my questions of somebody who's not before us, but you're the one who is before us. And I think you have to know if there was any consideration offered or paid in return for that settlement. It's a very simple fact question. Was there or was there not consideration? [01:17:14] Speaker 3: Again, there's ongoing litigation, and I suggest that you speak with the Treasury attorneys. [01:17:19] Speaker 9: If this kind of behavior is okay with the chairman, I'll just pursue other questions. But, you know, what goes around comes around in terms of dodging questions. [01:17:32] Speaker 1: I believe it's very clear that witnesses of any kind cannot discuss ongoing litigation. [01:17:39] Speaker 9: They can certainly discuss a fact that they are aware of. The fact that there is some litigation out there doesn't mean that a witness can't say, yeah, there was no consideration or, yes, there was consideration. Was there a defense analysis memo is referenced in the judge's decision in Florida? Was there a defense analysis memo prepared by the IRS? And more specifically, did you see it? Again, I'm not going to be able to comment on these matters. Mr. Chairman, this just makes no sense at all. I've been a lawyer all my life. I have some idea of what is protected when you have a ongoing bit of litigation. Whether this individual has seen an official memo from within his own department is a very simple question to answer. And I think it's completely inappropriate to have this game of dodgem be pursued without any consequences. Well, last of all, here's another question. Was there any analysis of what harm befell President Trump from having his taxes released when every president since Nixon released their taxes and he had promised to? Did anybody analyze whether there was actually any harm at all to him in those circumstances? [01:19:26] Speaker 3: So there was a crime. President's rights under 6103 of the IRS code was violated. And equally as important, 400,000 taxpayers had that right violated, including every employee of the Trump administration, the housekeepers at Durrell, the greenskeepers, the cashiers. And you're welcome to pursue all of that. [01:19:49] Speaker 9: None of you seem to care. But it doesn't answer the question of whether the president actually suffered harm. And you're not answering that question either. Senator Cortez Mastel. [01:20:03] Speaker 10: Welcome, Secretary Besson. Let me ask you this on a separate subject. Federal law prohibits the image of a living person from appearing on a U.S. currency. And that includes the president of the United States. Isn't that correct? [01:20:20] Speaker 3: That is correct, Senator. [01:20:22] Speaker 10: Thank you. There's reporting that your U.S. Treasurer, Brandon Beach, and his senior advisor, Mike Brown, have been repeatedly urging staff at the agency's Bureau of Engraving and Printing to prepare prototypes of the note, a $250 bill with President Donald Trump's face on it. And in fact, in August and September, Beach provided Bureau staff with mock-up designs for the note, including one that shows President Donald Trump's face in the center of the $250 bill between the signatures of the president and your signature. It is also reported that the artist who said he designed the mock-up, told the post that he had spoken with Trump about it. Is it true that your staff is pursuing a mock-up of this bill with President Trump's face on it? [01:21:12] Speaker 3: That was in coordination with pending legislation in the Congress to change the requirement that a person must be deceased to be on the currency. [01:21:24] Speaker 10: So you're acting before legislation has even passed to authorize it, is that correct? [01:21:29] Speaker 3: Just as we did with the working families tax cut, we were prepared in advance. At Treasury, we do things in advance. My predecessors seem to scramble to do things at the last minute. [01:21:40] Speaker 10: So if the law does not pass, do you intend to still move forward without the authorization from Congress? [01:21:47] Speaker 3: Of course not. We will follow the law. [01:21:49] Speaker 10: Thank you. Let me ask you this question with respect to the agreement and the lawsuit settlement that a lot of my colleagues have been talking about shielding the president, his family and corporations from any future audits. You are the acting IRS commissioner, correct? [01:22:07] Speaker 3: That is incorrect. [01:22:08] Speaker 10: What is your position right now with the IRS? [01:22:10] Speaker 3: My term expired. [01:22:11] Speaker 10: So you have no position with the IRS whatsoever? [01:22:14] Speaker 3: The IRS is a bureau that reports to Treasury. When there is no commissioner, those duties float up to me. All right. [01:22:21] Speaker 10: So there's no interaction that you have right now or responsibility over the IRS other than the commissioners there. The commissioner has free reign and you don't have any authority to stop anything? [01:22:33] Speaker 3: No, there is no commissioner. So I assume those duties. [01:22:36] Speaker 10: So there is no commissioner. So you're acting commissioner. [01:22:39] Speaker 3: No, that's incorrect. Okay. [01:22:41] Speaker 10: So for purposes of the public, let's get it straight. So the public knows your involvement. There is no commissioner. [01:22:46] Speaker 3: There's somebody that is acting. I had previously been the acting commissioner. Okay. Senator Warren, who likes to send me a lot of letters, was kind enough to send me a letter. Yeah. I'm just trying to figure out your role with the IRS. [01:22:58] Speaker 10: For the purposes of the public and transparency, what is your role currently with the IRS and your authority? [01:23:03] Speaker 3: I am performing the duties of the commissioner. [01:23:06] Speaker 10: Oh, oh, so you are. Okay. Got it. So let me ask you this, because you've talked about not only Donald Trump and his family, but there were 400,000 taxpayers information that was also leaked by Mr. Littlejohn, the contractor working for the IRS. Do you intend to give them the same immunity as President Trump and his family received? [01:23:26] Speaker 3: Again, you were not here at the beginning. I had a statement that I read to Chairman Crapo that I am unable to provide any additional details. Well, that's not part of the litigation. Due to litigation. [01:23:38] Speaker 10: That's the 400,000 taxpayers aren't part of the litigation. You have said there were 400,000 taxpayers information that was also leaked. They're not part of that litigation. Do you intend to give them the same immunity that you gave Donald Trump and his family and corporations that were part of the litigation? [01:23:55] Speaker 3: Senator, you may have missed the first part of this, but Treasury does not give any of that. We are represented by the Justice Department. That's right. [01:24:05] Speaker 10: You're the acting commissioner. As acting commissioner, you had said earlier you had concerns about those 400,000 taxpayers whose documents were leaked by an independent contractor with the IRS. If you have concerns about those 400,000, do you intend as acting or whatever role it is you have as the IRS commissioner, do you intend to give them the same type of treatment? [01:24:29] Speaker 3: We will follow the instructions and the settlement by -- That was not part of the settlement. By the -- That was not part of the settlement. By the -- [01:24:37] Speaker 10: So clearly -- We will follow the -- We will follow the -- Let me just say that was not part of the settlement. We will follow the instructions. We will follow the instructions. It's been very clear you're dodging this and you're trying to use it as an excuse. It's just outrageous on behalf of the American public. That I am representing my counsel -- [01:24:49] Speaker 3: Let me just move on. And that I will follow the law as an excuse, Senator? [01:24:52] Speaker 10: When you were going through your confirmation process, you stated that your goal was to get the federal budget deficit to 3% of GDP by the end of President Trump's term. However, in the administration's budget proposal for this year, projects a deficit of over 5% of GDP by 2029. Do you no longer intend to achieve that 3% goal? [01:25:13] Speaker 3: I do. I said something with a 3% in front of it. And we, in fact, had a fiscal contraction last year. So we are already in the 5% range. [01:25:24] Speaker 10: You said something with a 3% in front of it. All right. Thank you. I appreciate you being here. [01:25:30] Speaker 11: Senator Young. Secretary Besson, great to have you here today. You and I have discussed shipbuilding in the past and the importance of shipbuilding. I have seen you recently offer your thoughts about the importance of this issue and the importance of rebuilding our shipbuilding enterprise here in the United States. The President has also spoken quite forcefully about the threats associated with having a shipbuilding enterprise that is weak and unable to produce enough ships for the needs of our nation. In fact, his executive order on restoring America's maritime dominance and a subsequent maritime action plan, he highlighted with some specificity the challenges and the opportunities that we face. So I'm grateful for his leadership, grateful for yours, because we know China has invested heavily in this industry. They, of course, have a centrally planned economy in so many respects, and they've over invested in their capacity. I've been brief that China can actually build over a thousand ocean going vessels in a year. The United States built one last year, one ocean going commercial vessel for those who are skeptical of industrial policy. And I think that's a healthy skepticism. There's a reason we don't have a centrally planned economy. But from time to time, you need to deviate from the catechism. Adam Smith himself, the father of free market economics, identified shipbuilding as the one industry that a maritime nation cannot be allowed to have offshore. So you and several other members of the cabinet, Mr. Secretary, have highlighted this need to restore our maritime industrial base. But we know we can't do it without giving the president of the United States additional authorities, resources and authorities he needs. And that is why Congress, in a bipartisan way, needs to pass the Ships for America Act and pass it now. Mr. Secretary, how are you thinking about these issues? And do I have your commitment to work with Congress to start building ships in America again? [01:27:50] Speaker 3: So, Senator, as you know, President Trump signed an executive order to restore U.S. maritime capacity. I gave a speech at the Reagan library on Friday where I talked about the critical industries that we needed to reshore. And top of mind, there was the shipbuilding industry. And as important as the industry is the reservoir of knowledge that we have, should we get into a great power conflict. [01:28:18] Speaker 11: That's exactly it. We literally don't have because of cheerful scenario planning in the future. We haven't thought through how we're going to repair all our Navy vessels and, if necessary, build new Navy vessels in a time of a long war scenario. Long war is a war that might exceed just a couple of months. So it's an acute issue. I agree with you, Mr. Secretary. [01:28:41] Speaker 3: So, Senator, we look forward to working with you to connect industrial capacity, logistics, resilience. And we want to work with you and your team toward this end. [01:28:51] Speaker 11: That's highly encouraging. I'll take you up on that, sir. I'm going to pivot very quickly to China's advantage as it relates to critical minerals, not just as it relates to the supply. But they've come up with a way to manipulate our markets. They shape prices. They restrict exports. They absorb losses. They create all this uncertainty that keeps private capital from financing U.S. or allied critical minerals projects. And I've come up with a solution to help address this. We call it the Secure Minerals Act. And, Mr. Secretary, it's designed to create a strategic resilience reserve. And this would be a government corporation. And it would employ tools like loans, acquisitions, non-recourse lending, advanced market commitments, contracts for differences, and partner country co-investments. So all these different financial tools. But the goal is, of course, not to compete with or replace private capital. It's to create enough price stability and demand certainty to build domestic and trusted partner capacity. We want people investing in processing and digging new mines and all the rest. So, Mr. Secretary, as the administration considers tariffs on process critical minerals and derivative products, my question is, should those tariffs be paired with a financing mechanism like the strategic resilience reserve to make the capacity we need commercially viable? [01:30:37] Speaker 3: Sir, through Exim Bank, we are working on Project Vault to do much of what you were talking about. And it is critical to have critical minerals. And as you said, the predatory pricing that China has done for 25, 30 years, just like in shipbuilding, critical minerals is one of the key industries that we're focused on. [01:30:59] Speaker 11: Well, my hope would be that I can work with you to give more legal certainty to that very important project, Project Vault you're working on, so that after the Trump administration leaves, which will just be in a couple of years, there can be a legacy of enduring law and operations so that we've addressed this challenge related to our critical minerals vulnerability. Might I work with you on that effort? [01:31:23] Speaker 3: We look forward to working with you, Senator, and it is a priority for this administration and for Treasury and indeed for myself. [01:31:31] Speaker 11: Thank you, Mr. Secretary. [01:31:42] Speaker 1: Are you ready? You want to go with him? [01:31:53] Speaker 12: Yes, sir. Senator Daines. [01:31:55] Speaker ?: Mr. Chairman, thank you. [01:31:56] Speaker 12: Secretary Besson, it's good to have you here this morning. Good to see you, Senator. And I'm grateful for all you are doing. A steady hand of wisdom there in the West Wing as you are working and solving some of our difficult challenges we face as a nation. So thanks for your service and appreciate you being here today. And I want to start by emphasizing how pleased I was when I saw the IRS's settlement offer for taxpayers involved with conservation easement tax disputes. For years I've been sounding the alarm here on Capitol Hill on the abusive syndicated conservation easements that falsely were claiming a charitable donation solely to turn a profit. I'm an avid outdoorsman, a guy from Montana, protecting our farmers and ranchers and championing conservation is one of my biggest priorities as I represent the state of Montana here the past 13 years. I know this is the shared priority for you in this administration, which is why I commend you for your help in implementing and enforcing this settlement. So it's a thank you. Thank you. I also want to thank you for your hard work as we work together over much of the last year on the Working Family Tax Cuts Act that was passed and signed the law. We're seeing some great results in Montana. In fact, Montana has received an average nearly $3,600 tax cut on their tax return this year and about 105,000 Montana small businesses will benefit from permanent tax relief to that 20% pass through deduction. And we know the pass through side of the equation actually supports more jobs than the Secor side. So we did something here that's going to be helpful to create more jobs and importantly job growth and income growth here for so many American people. [01:33:54] Speaker 3: And Senator, I have very clear recollection of the you in the Cabinet Room expressing to myself, White House staff, the president, the need for permanence. So I think that that will be one of your great lasting achievements once you retire. [01:34:11] Speaker 12: Well, Secretary Besson, thank you. And I know we both knew that permanence was an important part of the equation to remove the uncertainty is oftentimes found in the tax code with expiring tax provisions. And there's enough uncertainty on Capitol Hill, sadly, that happens because of whether it's overreaching regulations or uncertain tax policy. But to take that off the table, I think was one of the great achievements that we face. But but thank you for your kind words. And I do think that we're going to see the benefits of this bill for many years to come on Capitol Hill. Any time we pass something that's 800 pages plus in length, usually the more you dig into something, the worse it gets oftentimes with big pork barrel spending bills. In this case, the more you dig into that working family tax cut bill, the better it gets. [01:35:01] Speaker 3: Sir, the statistics are unbelievable. And we saw at the IRS that 61 million filers filed for at least one of the signature policies. And we are seeing an industrial renaissance because of the immediate expensing for equipment, factories and farm structures. [01:35:24] Speaker 12: Well, it's music to our ears. It's what we predicted would happen. You put that kind of incentive structure in place. And I also believe to think about our China strategy, having that 100 percent expensing and the R&D investment to incentivize innovation will be another lasting legacies from what we accomplished together over the course of last year. I'd like just to ask you open in a question around how passing that largest tax cut or set another way preventing the largest tax increase in American history. Why, by making it permanent, is that making the American taxpayer better off? [01:36:06] Speaker 3: Sir, I believe that the -- as you said, giving great certainty, whether it's to households, small business, or large business, that provides for them to create capital stock, capital spending, and increase productivity. And increase productivity is what leads to higher standards of living across the country. [01:36:32] Speaker 12: Last question I have is on digital assets. Digital assets have moved from the margins now more to the mainstream. It's been clear that our tax code hasn't kept up. We bear that responsibility now to put a tax structure in place. I'm taking the lead here in the Finance Committee. As many in this committee know, that's why we've been developing now a framework that could give us clearer rules for digital asset taxation. Following the past of the Genius Act, digital assets are becoming more integrated in our financial system. And I believe we're going to play a growing role in our economy and the potential to keep driving investment in the United States. The numbers speak for themselves. The total crypto market cap reached $4 trillion for the first time in history. Stable coin transaction volume was $33 trillion, a 72% increase from 2024. The number of crypto mobile wallet users reached an all-time high, up 20% from last year. I do believe it's important that we provide some clarity as it relates to tax dollars. And that's our responsibility here that I'm working on at the moment. [01:37:45] Speaker 2: The time of the gentleman has expired. [01:37:48] Speaker 12: Can I finish one final question, if I could? Sure. Secretary Besant, as the administration continues its work in digital assets, will you commit to working with Congress on implementing digital asset taxation legislation? I anticipate that there must be a two-way street. [01:38:07] Speaker 3: I will commit to that. And tax certainty, as we've seen with every other industry, is the key to innovation. All right. [01:38:15] Speaker 2: Mr. Secretary, thank you. The time of the gentleman has expired. The chairman's return. Senator Smith. [01:38:20] Speaker 13: Thank you, Mr. Chair and Ranking Member, and welcome to the committee, Secretary Besant. So, though I've not been in the room, we have this thing called closed-circuit television in the Congress, so I've been able to watch the hearing in my office. And many of my colleagues have tried to get at this so-called anti-weaponization fund that was created in a settlement with the president after he sued his own IRS IRS for $10 billion. That includes this provision that bars the IRS from auditing or taking any enforcement action on any of the president's tax returns or those of his family. And I understand you're -- I've heard you repeat many times that you cannot respond to this because of ongoing litigation. And I want to just associate myself with the points that Senator Whitehouse made, which is that I don't quite understand how we're able to do our oversight responsibilities if we can't ask any questions when anything is even in the vicinity of ongoing litigation. So, let me see if I can ask a question that I don't think has anything to do with the ongoing litigation. And my first question is this, Secretary Besant, did Brian Morrissey, your former general counsel, ever raise concerns over the establishment of the anti-weaponization fund before he left his position, before he resigned? [01:39:43] Speaker 3: Again, that's attorney-client privilege, Senator. [01:39:47] Speaker 13: Pardon me? [01:39:48] Speaker 3: That would have been a privileged conversation. [01:39:50] Speaker 13: Well, let me ask this. Does Treasury agree with the Justice Department in thinking that the court decision blocking payments out of the slush fund was incorrectly decided? [01:40:03] Speaker 3: Again, we do not have agency in this. We defer the Department of Justice, the act as our attorneys, and they represent us. So, you should refer any of those questions to Acting Attorney General Blanche. [01:40:20] Speaker 13: Okay, I'm going to come back to that, but do you at least commit to following any and all court decisions regarding the establishment or the administration of this slush fund? Do you see those court decisions as legitimate that you would follow? We follow the law. You follow the law. So, that would mean that you would follow a court decision. You wouldn't have your own opinion about what the law is. You would follow the decision of the court. Am I understanding you correctly? [01:40:43] Speaker 3: We will always follow the law. [01:40:46] Speaker 13: You'll follow the decision of the court? We will follow the law. That's not what I'm saying. You know, Mr. Secretary, you've said that Acting Attorney General Blanche is representing Treasury and the IRS here. Would you have any -- I mean, I'm wondering, Mr. Chair, if maybe the committee should call Acting Attorney General Blanche to appear before our committee, if Secretary Besson is unwilling to answer any questions about the IRS, which, as Catherine, my colleague, Senator Cortez Masto established, is Secretary Besson is overseeing? I don't expect a response to that, Mr. Chair, but I mean, I asked a question just reasonably. How are we going to find answers to these questions if we can't get them from the Secretary? [01:41:30] Speaker 1: Well, as the Secretary has said many times, the attorney-client privilege and the relationship they have with Justice Department requires him not to answer the court. I'm aware. Senator, you asked if I would follow the law. [01:41:42] Speaker 3: On a court ruling, I am following the law here. [01:41:45] Speaker 13: What I noted, Secretary Besson, is you didn't say that you would follow the court and their interpretation of the law. You said you would follow the law, which is different, as we know, with this administration. But I have just a few minutes, a minute and a half left. I want to get, actually, to the farm economy. This is something that you and I have discussed many times, starting when you first came into my office. You called yourself a soybean farmer. Though I think that Minnesotas and farmers would -- Minnesota farmers would differentiate between wealthy landowners who rent their land versus people who actually do the farming. But I can tell you that in Minnesota, Mr. Secretary, a lot of farmers are really feeling the pain. According to the Farm Bureau, farm bankruptcies were up almost 50 percent this last year. Minnesota has the most farm bankruptcies in the country in the first quarter of 2026. And the Farm Bureau tells us that six out of ten farmers are reporting declining financial situations. So it's rough out there. Fertilizer prices are up. Diesel prices are up. Could you just explain to me and to farmers in Minnesota how those increased prices, driven by the war in Iran, are worth the pain that they are feeling right now? [01:43:06] Speaker 3: Senator, do you believe that Iran can have a nuclear weapon? [01:43:11] Speaker 13: Mr. Secretary, this is my time to ask you the questions. How do you respond to Minnesota farmers who cannot afford the fertilizer they need? [01:43:20] Speaker 3: Well, I think if you were to look in the dictionary, the definition of a farmer is someone who owns a farm and farms the land. And so as a former farmer, I will tell you that and maybe you know that 75 percent of the fertilizer had already been purchased this year. [01:43:37] Speaker 13: That is not what my farmers in Minnesota are telling me, sir. They are telling me that they cannot afford their fertilizer and they know the reason why. They know the reason. [01:43:45] Speaker 3: There is no doubt that farmers have been struggling. But much of that, that there was a record crop last year, Senator. And what do record crops lead to? [01:43:55] Speaker 13: What my farmers are telling me? Lower prices. [01:43:58] Speaker 3: So I'm sure. [01:43:59] Speaker 13: I will take that back. I will take that back to my producers in Minnesota, that they have a -- they have somebody in the Department of Treasury, a former farmer, who is feeling their pain. Thank you. Senator Lankford. [01:44:14] Speaker 14: Senator Lankford. Mr. Chairman, thank you. Mr. Secretary, thank you. You know, a year later, after passing the Working Families Tax Cut Act, I have to tell you, it's been remarkable how fast Treasury has moved on implementation in a lot of the areas. We worked a lot together on things like full expensing and making that permanent and trying to be able to get that established long term. That makes an enormous difference for our farmers and ranchers. They're trying to buy equipment right now to be able to do the expensing. Commodity prices are down. Fertilizer prices are up. But I would tell you, fertilizer prices started spiking under the Biden administration, not in the past two weeks here, and certainly not in the past two months. Gasoline prices now are what they were during the Biden administration. The spike, and there wasn't a war in Iran. And under the Biden administration, we had 9% inflation during that time period. So there's been tremendous amount of growth in the economy here, which I appreciate your partnership on. We've also worked a lot on the charitable donation side of things. And I appreciate the substantiation requirement information that Treasury and IRS has put out. That helps a lot of folks that are donating now to nonprofits and the work that we've done together. There is still work to do on the donor advised funds. There was some Biden administration regulations that came out that were directly targeted at the donor advised funds. That have caused real problems. Those are folks that are directly helping nonprofits and charities all over the country on it. But they're feeling some real pain from some additional changes in regulation. So I know this administration has been very aggressive at reviewing regulations and looking at it. I would only ask you to review as well the Biden administration regulations on donor advised funds, because that's directly taking money away from people that need it the most and folks that want to be able to help. [01:46:07] Speaker 3: Senator, I will be happy to instruct our office of tax policy to work with you and your staff on this. I know it's an important issue for you. [01:46:14] Speaker 14: Thank you. I look forward to that cooperation together just to be able to look at it to be able to make sure the regulations work for every American. I want to talk a little bit about what you've done so far on the sanctions on drug smuggling and specifically targeting all these cartels that are in Mexico and in Central America and South America and trying to be able to go after that. You've seen some progress, some new techniques have been done to be able to target individuals and entities to try to limit the amount of smuggling. I want to just get an update from you. Dollars have been allocated. You've asked for additional dollars directly related to terrorism and drug smuggling cartels. This is a budget hearing. What's happened so far? Have those budget dollars previously been used? What are you asking for additional dollars for in that? [01:46:59] Speaker 3: Senator, we have designated the Mexican cartels as foreign terrorists. We have also put it in effect on the U.S. Mexican border in certain counties, what are called geographical targeting orders so that we can better identify problems in our banking system and money that is being laundered through sooner. And this is a combination through FinCEN, the financial, the crimes enforcement network and OFAC. So if we are the if we use FinCEN to follow the money and then OFAC has been used to sanction. We sanctioned about this time last year to Mexican financial institutions that were riddled with drug money. [01:47:44] Speaker 14: So you're doing the same thing to a lot of these the shadow fleet that's out there moving Iranian oil and others as well. Give me an update on success dealing with that targeting specific sanctions on Iranian illicit movement of oil and other goods that they're trying to be able to move. [01:48:03] Speaker 3: So operation we began with a maximum campaign pressure in March of 2025. We have continued that and approximately seven or eight weeks ago. President instructed me to take it up to maximum. We call it operation economic fury and the Iranians one of the many mistakes they have made was targeting with missiles their Gulf neighbors. We have good partners in the Gulf, but many of them were not completely transparent with us what may or may not have been going on in their banking system. And we have achieved a much greater level of transparency and we have seized a substantial amount of crypto assets. We have sanctioned ships and in fact the Navy has seized some of these ships and we are tracking mostly the IRGC funds and we are freezing those for the day that they can be given back to the Iranian people. Okay. [01:49:04] Speaker ?: I look forward to that. [01:49:04] Speaker 14: I know just got a few seconds left. In Oklahoma, we had a massive influx of Chinese illegal aliens that moved into our state, set up illegal grow operations for marijuana and started shipping it literally all over the country. It was a tragic thing to be able to watch what happened to the human trafficking, the labor trafficking, trafficking, the sex trafficking that these Chinese individuals were doing into my state. Not only trying to be able to purchase land and to be able to set up this operation. I want to be able to follow up with your team on just ways that we can work on following the money of illegal Chinese money coming in to buy American farmland and also try to be able to control some operational locations near some of our sensitive sites and what you're doing there. I know you're doing a significant amount of sanctions on drug issues and such, but want to be able to just follow up on that. We look forward to working with you on that, Senator. [01:49:59] Speaker 15: Thank you. Thank you. Senator Warren. Thank you, Mr. Chairman. So, Secretary Besson, let's start with something you and I agree strongly on. Last year, you came out in support of a trading ban for members of Congress, and I have introduced legislation to do exactly that. Senator Warren, who explained the need for a ban on our trading stock by saying, quote, you look at some of these eye-popping returns, every hedge fund would be jealous of them. And that, quote, if any private citizen traded that way, the SEC would be knocking on their door. Those are strong words from someone who used to run a hedge fund. Last month, President Trump's latest financial disclosures came out, and they show that he made more than 3,400 stock trades worth more than a quarter of a billion dollars in just the first three months of 2026. That's roughly half of what all 535 members of Congress made last year combined. And the value of virtually every one of those stocks that the president traded in is directly affected by President Trump's official actions. So, Secretary Besson, you and I agree that it is a conflict of interest for members of Congress to trade stocks. Do you also agree that it's conflict of interest for President Trump to trade stocks? [01:51:29] Speaker 3: Well, a couple of things, Senator. One, President Trump is not sitting in the Oval Office engaging in a high-frequency trading strategy. Clearly, he had an outside manager who was doing that, and I think it's incumbent upon both houses of Congress to get their house in order before you move to the administrative branch. [01:51:52] Speaker 15: You think it's okay for the president to do this? I -- Because let's be clear. You are a Wall Street guy, so you know better. The investments that the Trump -- that President Trump has made are not blind. President Trump literally signed the 113-page document publicly listing all of his individual stock trades at the same time that he is making decisions affecting those stocks. So you're going to sit here with straight face and say it's not a conflict of interest for the president of the United States to do that? [01:52:24] Speaker 3: I am going to say this body needs to get its house in order first. [01:52:27] Speaker 15: How about we get the White House in order at the same time? [01:52:30] Speaker 3: I would encourage you to do that. Lead by -- I don't trade in individual stocks. [01:52:34] Speaker 15: I don't own any individual stocks. My house is in order. Thank you, Mr. Secretary. [01:52:38] Speaker 3: You're very rich. Thank you, Mr. Secretary. Others on this committee can't say that, Senator. So let's look -- [01:52:43] Speaker 15: Let's look at some individual trades. On January 6th, Donald Trump purchased up to a million dollars' worth of NVIDIA stock. One week later, his administration changed U.S. policy and loosened the rules on export controls so that NVIDIA could sell its chips to China. Now the price of NVIDIA stock is through the roof. So, Secretary Bessett, you said last year if any private citizen traded the way members of Congress do, quote, "The SEC would be knocking on their door." So my question is, should the SEC be knocking on President Trump's door to start an investigation over this trade? [01:53:24] Speaker 3: Again, if this body wants to ban individual stock trading, which I would advocate for yourself, start there. And if you want legislative action to continue, that's your prerogative. [01:53:37] Speaker 15: So it's our prerogative. So you would support our saying that President Trump should be investigated over this? [01:53:42] Speaker 3: I would support any -- [01:53:43] Speaker 15: Our trade should be investigated and President Trump should be investigated. [01:53:48] Speaker 3: I would support you getting your house in order, Senator. [01:53:50] Speaker 15: And how about the White House getting its house in order? Again, what -- Would you support that investigation? [01:53:54] Speaker 3: Please lead by example. [01:53:56] Speaker 15: I would like to see the President of the United States lead by example. You say there should be an investigation when that kind of activity takes place? How about we start with the White House? Well, you -- Let's do one more. You create statute. The President does not. President Trump bought tens of thousands of dollars' worth of stock in Robin Hood and the Bank of New York Mellon Corporation, known as BNY. On April 6th, your Treasury Department announced it had chosen the financial agent to implement the new Trump Accounts Program, BNY, and its partner, Robin Hood. Both stocks, of course, have risen since then. So, Secretary Besson, let me ask you a different question. If these stock purchases that Trump made were made using inside information, would that be illegal? [01:54:44] Speaker 3: Again, I'm not a lawyer. I'm not going to speak to that. And I think -- [01:54:49] Speaker 15: Would it be worth investigating? [01:54:51] Speaker 3: You don't have to be a lawyer. You're the one who said what should be investigated. Why don't we investigate many people in this committee, Senator? Many people. [01:54:59] Speaker 15: And you don't think the White House should have to follow the same set of rules that are already the law. [01:55:05] Speaker 3: I think you should get your house in order here. [01:55:08] Speaker 15: My house is in order. Thank you, Mr. Secretary. [01:55:10] Speaker 3: And you should have your fellow committee members, mostly on your side of the aisle, do the same. [01:55:15] Speaker 15: We need stronger anti-corruption rules and conflict of interest rules in Washington for everyone. And that includes the president and it includes Congress. And instead of draining the swamp, what Donald Trump is doing is he is enriching himself by taking advantage of his position. That is not public service. He's the one who should lead by example. [01:55:40] Speaker 1: Senator Brasel. [01:55:41] Speaker 16: Thanks, Michelle. Well, talking about draining the swamp, look, I -- I appreciate what you're doing, Mr. Secretary, because you inherited a very troubling record of misconduct in terms of the IRS politicization. And you moved quickly. You championed the efforts to turn that around. We saw under the Obama administration the IRS spent years systematically targeting conservative nonprofit groups. Tea Party groups, faith-based organizations, Christians, conservatives. The Biden administration and their IRS continued that same pattern. I think a recent Department of Justice report noted the Biden IRS investigated churches based on what their pastors preached. We can go on and on about the Bible teachings that were typically affiliated with Republican Party. Those were being attacked by previous administrations. So this wasn't, to me, tax administration. This was government intimidation. The American people aren't standing for it. Can you tell us what the Treasury Department has done to ensure that something like this, that these targeting by the previous administration and the Obama administration as well, that these persecutions are going to stop? [01:56:45] Speaker 3: Senator, thank you for the question. We are working to ensure that this will never happen again. Never happen again. It was an egregious example by the Biden administration, by the Biden Justice Department, by the Biden IRS, and back to other IRS, the Obama IRS. There was a famous case with that. And we are -- we have made it clear that 6103, which is taxpayer privacy, must be adhered to. [01:57:18] Speaker 16: Thanks. I want to talk about the tax cuts we were able to pass last year, and you were so helpful in our efforts to get the working families tax cuts bill passed. We see now with the tax returns this year, over 60 million Americans have claimed at least one of these Republican new tax cuts. Neither no tax on tips, no tax on overtime, the senior deduction. Refunds are up. Paychecks are bigger. I think it's important for families to know all of the things that are in this legislation. You and I have talked about it, but I continue to travel as to other members around our home states, and some people aren't aware of many of the things that are advantaged here. How is the Treasury Department ensuring that families across the country can access everything that this law has to offer them? [01:57:59] Speaker 3: Sir, we -- I have traveled across the country, as have many people on my staff. We push out to members on both sides the benefits and the breadth and depth of the tax bill, which was passed July 4th. And every -- we're on a -- what I would call a carousel of pushing out the most important parts of the tax bill. For instance, on the school choice, we are working actively with states, red states and blue states, to make sure that dollars can go into those states, either for public, private, or additional tutoring. [01:58:41] Speaker 16: I want to ask about an issue of retirement security, because about 50 million Americans have no access to a workplace retirement plan. And in Wyoming, that's about 65,000 independent truckers, contractors, ranchers, other self-employed individuals, as we see all across the country. President Trump recently signed an executive order to try to change that. And in order -- it directs you and the Treasury to provide workers with access to low-cost retirement plans with matching federal contributions. Under your leadership, Treasury is working on legislative recommendations to build on this framework to help these -- these individual. What's your vision for helping closing that retirement coverage gap? [01:59:20] Speaker 3: We think that these IRAs for independent workers are very important. We are working to finish our guidance on the Trump accounts to get those up and running July 4th. Then we will be all hands on deck for this. And as you've said, we can see that the anxiety level for Americans in terms of retirement has never been higher. Social Security is the building blocks for that. And we are working to supplement that. [01:59:52] Speaker 16: And then a final question, and it's the continuing the economic pressure on Iran. The president talks about maximum pressure. How does your budget help ensure that Treasury has the tools that you need to keep that economic pressure? [02:00:05] Speaker 3: We have a dedicated staff that has done a fantastic job of outlining the black market and the flow of Iranian -- the oil and energy -- around the globe. We have frozen assets. We are holding those. And we have severely disrupted the Iranian economy and the Iranian war machine. We think that inflation may be over 200 percent. Their currency has collapsed. We believe that more than 50 percent of the army is not getting paid. And the police are not reporting to the police station. [02:00:41] Speaker 1: Thank you, Mr. Chairman. Thank you. Senator Lujan. [02:00:45] Speaker 17: Thank you, Mr. Chairman. Secretary Besant, should Americans who illegally evade their taxes be investigated and prosecuted? Yes. Secretary Besant, should people and organizations facilitating money laundering for Iran, North Korea, or Hamas be prosecuted? Yes. What about laundering money for Mexican drug cartels? Yes. Should a person who traded and profited on insider information be prosecuted? According to the law, they should. Appreciate that. Mr. Secretary, as a result of President Trump's $10 billion lawsuit, the Department of Justice, on behalf of your department, settled with President Trump by creating a $1.776 billion slush fund to pay for his supporters and criminals. Were you either directly or through your staff asked to sign the original agreement? I saw you on TV. [02:01:43] Speaker 3: Again, Senator, you are not here at the early part of the meeting. I saw you on TV. Well, congratulations. And you would know that I'm unable to answer those questions and they should be referred to. [02:01:52] Speaker 17: Mr. Secretary, what about the addendum to this agreement? Are you familiar with what the addendum is? I'm not sure what you're referring to. Are you familiar with this giveaway from the IRS that says President Trump and anyone that knows them or does business with them or part of a business, they get off scot-free? Are you aware of this? [02:02:11] Speaker 3: Again, I refer you to Attorney General Blanche. Are you Attorney General Blanche's client? The IRS and Treasury are a client of the Department of Justice. So is that a nice way of saying yes? [02:02:26] Speaker 17: You're a client. He's your lawyer. He represents -- You're the secretary. Are you the secretary of Treasury? Yes is the answer. The Department of Justice -- Scott Bessent, let me ask you this question, sir. Are you the secretary -- [02:02:40] Speaker 3: In my personal capacity, Tom Blanche is not my attorney. Correct, sir. [02:02:44] Speaker 17: For the U.S. Treasury -- [02:02:46] Speaker 3: Mr. Secretary -- [02:02:47] Speaker 17: Scott, let me ask it this way. Scott, are you the secretary of Treasury for the United States government? Yes. Appreciate that. The Department of Justice represents the IRS and the Department of Treasury in this lawsuit, correct? Correct. Are you aware of this addendum? You're telling me DOJ gave the president this without you knowing about it? Again, they settle on our behalf. That's not how the law works, sir. I'm not a lawyer, but you have a bunch of them behind you. You should see the faces they're making at me behind you. They're all scowling at me back over here. Well, I think that's a different reason, sir. Well, for whatever it is, they're doing it. Mr. Secretary, my concern is that this addendum's not been getting a lot of attention. There's colleagues on this panel that think this slush fund is a bunch of bullshit. And they've called out to say get rid of it. Now, people need to say, are you okay with one person in America because the Secretary of Treasury, I'm guessing, conferred with the Department of Justice because you're named on this lawsuit, sir. These are all the transactions from the president as well. I'm going to ask you this next question as well. You were bragging to one of my colleagues that you've been sanctioning people doing bad things in America. People that get sanctioned, like Iran or terrorists, they're told not to do business in the United States with partners. Is that your understanding, sir, me as a layman? It is. You hold these bad people accountable. I congratulate you for that. So this little giveaway to President Trump and his family gets them off scot-free. Does every American become part of this addendum? If someone didn't pay their taxes or violated tax law or did bad things, are they told, can't prosecute you, you're good? Everyone going back to the date of this, or is this only for President Trump and his affiliates? Senator, do you have specific knowledge that President Trump's being audited? Sir, I have specific knowledge of this addendum that you don't know a damn thing about that is for the Department of Treasury that your lawyer at the Department of Justice signed you up for. The reason I'm asking this question is because President Trump's sons signed a deal, as you know, with World Liberty Financial with a bunch of folks you sanctioned. And now, as part of this, there's an addendum that says President Trump and his kids and anyone affiliated with him, I don't know if it's current wives, former wives, people that just did transactions with him, they're off scot-free. You know, that has a new way, a new ring to it, this thing, scot-free, because the Department of Treasury and the IRS is not going to go after him, sir. This is wrong. This is lawless. I hope our colleagues will look at this addendum. If I could offer this into the record, Mr. Chairman, for those that haven't seen it yet? Without objection. [02:05:43] Speaker 1: Come on, man. [02:05:45] Speaker 17: There's a better way of doing this, sir. That's all we're saying here. So, look, I appreciate it if you don't want to talk about a lawsuit. That's your prerogative to answer that way. But to say that you as a client, as Secretary of the U.S. Treasury, does not know what the Department of Justice is giving away to people. Come on, man. That's just not on the up and up, sir. I hope we can do better. [02:06:07] Speaker 3: You don't understand the way the protocol works, and we receive advice and accept their settlements. [02:06:14] Speaker 17: You're telling me as the Secretary of U.S. Treasury, you don't know that the President of the United States, who I think you work for, got a sweetheart deal from the Department of Justice, who's your lawyer. I do know. You're in line for the presidency, Scott. [02:06:29] Speaker 3: I do know that the President of the United States and 400 -- many of his employees have the largest tax leak in history. I know. Here's his filing shirt of all the insider trading. Right here. Do you want to apologize on behalf of the American government? [02:06:41] Speaker 17: Scott, you should apologize to the American people for fleecing them and giving this away to Donald Trump, man. That's what you should do. We can agree to disagree, Senator. [02:06:50] Speaker 3: Senator Warnock. [02:06:51] Speaker 17: That we'll agree on. [02:06:56] Speaker 18: Thank you, brother chairman. Last month, I asked the president's nominee to lead the Federal Reserve what I thought was a simple question, but he tried to dodge it. His answer was cute. I'm not sure the American people who were struggling were laughing. So I'll ask you the same question and see if I can get a clearer answer. President Trump has said that his grade of the economy, his words, is a quote, plus, plus, plus, plus, plus, plus. He said this before he sent energy and gas prices soaring with this illegal war in Iran, a war that's costing taxpayers billions of dollars, a billion dollars or more per day turbo charging inflation. So I'll ask the secretary of the Treasury the same question. Given all of the challenges facing ordinary Americans, our political differences aside, what grade would you give the U.S. economy right now? [02:08:01] Speaker 3: Which challenges other than temporarily elevated prices would you identify, Senator? I'm asking you what grade would you give the economy? I think we have the makings of one of the strongest economies in history. We've had 2.6 percent growth. So you -- And core inflation had dropped, food inflation, since President Trump began, as much as you all, they want to disagree. I got it. It's 2.5 percent. [02:08:27] Speaker 18: So you agree with the president? You would give the economy a plus, plus, plus, plus, plus. [02:08:33] Speaker 3: I think we have all -- From where you sit. I think we have all the makings for a very strong economy. I think that we have temporary elevated prices that will come back down. [02:08:44] Speaker 18: I got it. So you're telling Americans it's not so bad. Americans give the Trump economy a failing grade. You and I can disagree, but this is not about us. They give the economy a failing grade because they can't afford anything. Folks back at home at Georgia, whom I represent, are struggling. Let me finish. To just make their lives work. And they know President Trump's Iran war and the tariff taxes are only making things worse. Talk to farmers in Georgia. They'll tell you that. But I'm not so sure folks fully grasp the long-term crisis that's also brewing for our children and our grandchildren. Wars do not pay for themselves. And this year, under the Trump administration's economic policies, the $31 trillion national debt exceeded GDP for basically the first time since World War II. Think about that. Now, to be fair, debt did exceed GDP during the COVID-19 pandemic, but that was only briefly. As GDP crashed as a result of a once in a century pandemic. The big ugly bill alone will add nearly $5 trillion to the national debt. Something that I do care about. And I think it matters. I think it's interesting that Republicans talk about it when Democrats are in charge. But I haven't heard much discussion about the national debt lately. According to our nonpartisan scorekeepers in the Congressional Budget Office, it will add $5 trillion to national debt. Do you still think that driving deeper into debt to extend billionaire tax cuts were a good investment? [02:10:32] Speaker 3: Sir, that 90% of the filers who availed themselves on President Trump's signature policies make below $100,000. And if you want to know who is responsible for the American people, you all towards them during the Biden administration. I'm not sure if you were part of that. But we had 21.5%. Look, Joe Biden has been out of office two years. And the fact that you all keep talking about it tells you everything. Tells you everything. [02:11:00] Speaker 18: So, so -- And -- Sir, I'm asking you a basic question. Do you think that going into debt to extend billionaire tax cuts was a good investment? Yes or no? [02:11:10] Speaker 3: I disagree with the categorization of billionaire tax cuts when, in fact, most of the tax cuts went to working -- No, all of those -- Went to working Americans. The tax -- The tax -- According to the -- According -- Senator, you are quoting the Congressional Budget Office, which -- According to the Yale Budget Office, the Yale Budget Lab -- The Yale Budget Lab is a bunch of Biden hats. [02:11:32] Speaker 18: Oh, yeah, okay. The -- Well, you should talk to the people in Georgia. They will tell you, sir, that whatever tax relief you think you gave them was more than taken up by these tariffs. They -- they -- according to the -- according to the Yale Budget Lab, the administration's tariffs cost families three times as much as they got back in tax cuts. But I want to talk to folks at Yale. I talked to the folks in Georgia. How about the Iran War, which is costing tens of billions of dollars and counting? You previously said we have plenty of money for the war. War has increased the national debt. Is that spending still a good idea, sir? Yes or no? Sir, the -- Do you think it's a good idea to spend so that Iran cannot have a nuclear weapon? Sir, I'm not -- Sir, sir, do you think it's a good -- so you -- you do think it's a good idea? [02:12:18] Speaker 3: Do you think the Iran War makes -- I think just as many people, historically, when President Obama was in office, said that Iran may not have a nuclear weapon -- President Obama left office in 2016, sir. I know, but I'm saying there are many people on this committee who said Iran should never have a nuclear weapon at any cost. I agree with that. And they seem to -- [02:12:38] Speaker 18: They should not have a nuclear weapon, and they're closer, thanks to this administration's policies. Absolutely not, sir. And the Strait of Hormuz is still closed. And you should tell the people in Georgia that this war is a good idea. I think they'll disagree. Thank you very much, sir. Senator Cassidy. [02:12:54] Speaker 19: Hey, Secretary Besson. Thanks for being here, sir. We know Social Security has gone insolvent in six years. Asked your predecessor in Trump 1 what was the plan to do about it, and he said that would be a second Trump administration deal. Now we're in the first half of the president's second term, and obviously, we're now only six years away. At that time, we were like 12 years away from insolvency. Social Security will account for 20% of federal expenditures, and I was told once that it accounts for 20% of our long-term accrued liability -- accrued debt. What's the president's plan to address Social Security insolvency? [02:13:38] Speaker 3: Sir, we have to get our short-term house in order first. We inherited a mess, 6.9 -- [02:13:43] Speaker 19: Mr. If I may interrupt, and I don't mean to be rude, if we wait to get our short-term house in order, we will be three years away from insolvency. I've been working on this. It is amazing -- since I've been working on this over the last five years, it is amazing how much it's already deteriorated. It's just amazing. In five years, it's gotten so worse. Are we really going to wait until we get -- I'm not challenging. I'm just asking. Are we really going to wait until we're not going to do anything? I'm just not sure about that. [02:14:20] Speaker 3: Senator, you've got to crawl, walk, run that the -- we -- with these deficits, with this debt that was run up in the previous administration with 6.9% deficit to GDP. But -- But -- First ever, when we weren't in war or weren't in recession, we brought it down to 5.4%. We're going to continue moving. [02:14:39] Speaker 19: If I may, if I may, the Social Security Trust Fund is funded by the Social Security Tax, which is segregated from general revenue. Now, if we speak about the debt and deficit, whatever -- I'm not touching that right now. Except insofar as context, we have to do something. That is general revenue, but wherever that comes from. If we're speaking about social, that is segregated. That is a Social Security revenue problem and expenditure issue. So, to me, that's segregated, again. So, is there a plan to do anything about the segregated fund with a segregated revenue stream and a segregated expenditure pattern? [02:15:19] Speaker 3: Well, Senator, part of it is the revenues aren't -- the source of the revenue is not segregated, because the more Americans who work, the more -- the higher-paying jobs they have, the more it goes into the Social Security Trust Fund. [02:15:32] Speaker 19: I accept that, but that's an indirect effect. And is that the only plan the administration has currently to hopefully increase the number of jobs and the better-paying jobs and hope that -- because I've run -- I got a big spreadsheet on this. That is inadequate to address the problem. Every day, 10,000 boomers become eligible for social. And the drain on this is just incredible. It's just going down. That will not solve the problem. And, again, I don't mean to be at all confrontative. I'm just trying to set the context. [02:16:04] Speaker 3: I remember my first visit to your office. You were kind enough to share the spreadsheet on a screen with me. Yeah. [02:16:11] Speaker 19: So, I'm gathering that the administration does not have a plan to address -- and I'm saying not in any way except to say by your answers that the only response so far would be the indirect -- indirect side of it. Now, on a bipartisan basis, we have been working on something that would attempt to address this. It is going to take the president, the administration -- at some point being involved. At this point, it's in Congress. It involves creating an investment fund, much as we have already done with the Federal Railroad Retirement System, a plan that Senator Wyden voted for when he was in the House of Representatives that took the Federal Railroad Retirement System from going insolvent, and now it's paying benefits with fewer workers and more retirees and doing extremely well. It's also based upon what the Canadians have done with their Canadian pension fund, which was also going insolvent, and they've been able to address that. Knowing that you'd have to vet it, but would the administration conceptually be okay working with Congress to find a solution such as this? [02:17:16] Speaker 3: Again, Senator, we will work on anything, but we are going to guarantee that the benefits remain as they are. I accept that. [02:17:28] Speaker 19: So in our plan, the senior citizen does not pay more taxes and the senior citizen does not get less benefits. And so -- but we do find a way that, again, patterned after something that Senator Wyden has previously supported on the Federal Railroad Retirement System -- and I mentioned Senator Wyden because, by the way, he's a ranking member on the committee -- patterned after that that has worked so successfully. So -- but we don't cut benefits and we don't raise taxes for seniors. So that's the criteria, I think, and hopefully we can get your support as we in Congress attempt to work on this. Thank you, sir. Thank you, Senator. [02:18:00] Speaker 2: Thank you, Senator. Thank -- thank my colleague. Next up is Senator Blackburn. [02:18:05] Speaker 20: Thank you, Mr. Chairman, and Secretary, thank you for being here. I wish that everyone on this panel would have seen your speech at the Reagan Library on Friday. I think it would have answered a lot of questions, and it lays out your vision for where you think we can -- we can head economically. [02:18:31] Speaker 3: Well, Senator, I think it was a very important economic speech, but the mainstream media preferred to report on the $250 bill. So they're not serious people. [02:18:40] Speaker 20: Well, there are a lot of odd perceptions floating around. I want to talk a little bit about the working families tax cuts, because that is something we have all heard from the people we represent. I've heard from so many Tennesseans about this. And getting those bigger returns, having lower tax bills, that has -- that is something that has made a difference. And in particular, of course, the enhanced deduction for seniors, that's a provision that I had pushed. And having that $6,000 enhanced deduction, I think, was taken by 35 million Americans. And I think nearly 70 percent of them had incomes lower than $100,000. Is that accurate? [02:19:43] Speaker 3: Yes, Senator. And 95 percent of them had incomes under $200,000. [02:19:48] Speaker 20: And that is something that is putting money in the pocket of hard-working Americans and seniors who have saved all their life to be able to retire. [02:20:02] Speaker 3: I think it gives them great certainty. It gives them the great clarity in terms of the folks who do live on a fixed income. [02:20:15] Speaker 20: Well, we certainly have gotten a lot of positive feedback on that. And we look forward to seeing that continue. I do want to talk with you about penny production that ended last year. And, of course, we have a company, Artisan, in Tennessee that made the pennies. And now they are -- and you had talked about keeping those jobs in Tennessee. And Artisan is working on a zinc-based nickel that would save the taxpayer about $140 million a year. Because right now the nickel takes 13.3 cents to make. And there's legislation that is moving forward, the Common Sense Act, that would allow Treasury to use zinc for the nickel. And what I'd like to know is if the leadership at the Mint is making certain that they're doing the technical work in anticipation of this legislation passing that would allow the use of zinc for the nickel. [02:21:28] Speaker 3: Yes. They have begun preparation on that. And we look forward to working with you and to making sure that there is a smooth transition. Thank you. [02:21:38] Speaker 20: I appreciate that. I also want to talk about the R&D tax credit. And I have talked with Mr. Bisignano about this issue also. I've heard from a lot of our manufacturers in Tennessee. And they have continued to raise with me some misalignment that they see in this legislation. R&D, the way this tax credit is working, it does not allow manufacturers to do shop floor R&D. And it does not allow them to deduct the expense of the products that they are using in shop floor R&D. And we know that China is incenting R&D. And we have a lot of manufacturers and people that are trying to bring business back. And they're doing this R&D work in their plants. So I would hope that you and Mr. Bisignano can work together and get some clarity and provide some certainty for our manufacturers. And be certain that these individuals can utilize that R&D tax credit. Will you do that? [02:23:03] Speaker 3: I would be glad to work with you and your staff. As I said at the Reagan Library, I believe that at one level we've lost the reservoir of knowledge by not doing this production. And I did a fireside chat last night for a group called American Compass. And I said the same thing, that somehow we separated R&D from the learning that goes on on the factory floor. Right. And, you know, I think that that is a big mistake because so much happens during the process in terms of innovation. [02:23:37] Speaker 20: Thank you for that. And I appreciate your attention to it. I'm going to submit for the record one question to you on partnership audits that needs some further attention. Thank you for being with us. [02:23:50] Speaker 1: Good to see you. Thank you, Senator Blackburn. Senator Welch. [02:23:55] Speaker 21: Thank you very much, Mr. Secretary. I heard your comments earlier when I was watching and I support opportunity zones that have been helpful to Vermont. But number two, I want to talk about what I think is a looming crisis that gets far too little attention in this Congress. And that's the national debt. And I know you're familiar with this. I'm just going to show the chart for others. The projections of the debt. First of all, January of 2025, it was 36.2 trillion. It's now 39.2 trillion. And as you can see in this chart, the trajectory of this debt is just going up and up and up. And the CBO right now says that debt held by the public is 99 percent of the gross domestic product is scheduled to go up by 2030 to 130 20 percent. And we're now paying interest, as you know, probably better than anybody of $970 billion. So taxpayer revenues are going $970 billion to debt that exceeds our military budget. And obviously means that we can't spend it on other things that folks in Mr. Crapo's district and folks in my district need. [02:25:23] Speaker ?: We can't do that. We can't do that. [02:25:24] Speaker 21: The federal interest payments rose to 18.5 percent of all of our revenues. And the CBO says that's going to go up to 25.8 percent by 20 by 2036. And we don't talk about it at all. It's not even a topic, which is astonishing to me because it's such a threat. Now, there's three ways to address debt. One is we can cut spending. One is we can raise revenues. And I don't want to talk about those two today. But there's one other where there, I think, should be consensus. And that is we can collect the revenues that taxpayers owe. And that's why I want to talk to you a little bit about the staffing cuts that I understand have taken place at the IRS, which has reduced their capacity to collect revenues that are owed by taxpayers. In fiscal year 2027, the IRS enforcement funding was cut by 18 percent, 28 percent or, pardon me, 2,800 staff positions were reduced. And that's in addition to 26 percent of revenue agents lost in 2025. And I've got a revenue chart here. And that was this was prepared by the Peterson Foundation. And I find them to be extremely credible on debt issues. I don't know if you share my high opinion of the people. Not anymore. [02:26:59] Speaker 3: Well, I think they've lost their way. Well, all right. [02:27:03] Speaker 21: We will disagree on that. I find them to be an extremely credible source. But what this chart shows is that as you in as we increase the cutting of revenue agents, the loss of owed revenue. This is owed revenue. We're not talking about increasing anybody's taxes. [02:27:25] Speaker 3: You're talking about the tax gap. [02:27:27] Speaker 21: That's right. The tax gap is going to be one point eight trillion dollars. So the obvious question here is why are we cutting the people who we need in the IRS to do the audits to collect revenues that are due to the Treasury? [02:27:45] Speaker 3: Well, Senator, a couple of things. Let's backtrack to your previous chart. The Peterson Institute CBO project that we were going to grow 1.8 percent thus far in this administration. We've grown at two point. Let me interrupt. It's 1.8 forever. We've grown at 2.6 percent. No, you're interested. [02:28:04] Speaker 21: Let me just stay on the revenue because whether we grow at 1.8 as they say or 2.8 whatever it is you say, you would agree with me that if I'm a taxpayer and I owe money, I should pay it. [02:28:16] Speaker 3: And I can tell you that more bodies does not equal better collections. So you just disagree. Here. Let me read you something. So I think that you would agree, TIGTA, which is the IRS, the internal reporting system, all of these employees who were hired, that a whistleblower in Atlanta came out and said, a 25 year IRS CI employee who trained 2,700 new IRS agents for the program. I mean, I have to interrupt because my time is running out. [02:28:50] Speaker 21: I'll be happy to send this to you. Please do. [02:28:52] Speaker 3: To show you why it's a complete fallacy. Last year we had recoveries up, collections up. [02:28:58] Speaker 21: Can I just get a little extra time? Thank you, Mr. Secretary. 30 seconds. Number one, I absolutely believe that the people who owe money should be paying that money and that we should have assertive enforcement in order to get that collected, regardless of what the growth rate is. That's number one. Number two, one of the things that is happening is we've withdrawn from the global effort for coordinated organization for economic cooperation and companies are now using these low tax Dodge countries like American Express avoided 423 million in taxes by using the island of Jersey, saying that's where they do their work. Black and Decker cut their bill by 27 million by using Cyprus. Many companies use Malta. S&P Global cut its tax bill by 269 million. Is that something that we should tolerate? [02:30:00] Speaker 3: No. [02:30:01] Speaker 21: Thank you. And will you do something about it? [02:30:04] Speaker 3: Again, it's a complicated question, and I'm happy to come to your office, happy to do another phone call as we've done. All right. [02:30:12] Speaker 21: I will follow up on that. [02:30:13] Speaker 3: But I do want to send this TIGTA report that shows that new agents were a disaster. [02:30:19] Speaker ?: Thank you. Senator Tillis. [02:30:20] Speaker 1: Senator Tillis. [02:30:22] Speaker 22: Thank you, Mr. Chairman. Treasurer, thank you for being here. You know, I've -- you may have heard I've been a little bit critical of a few of the advisors of the president. You're certainly not one of them. I'm glad you're there. [02:30:33] Speaker 3: I'm looking -- I'm looking to stay on that side of the line, Senator. [02:30:36] Speaker 22: And I appreciate -- I appreciate the work you're doing. And I love the fact that you show good judgment of loving some of the North Carolina mountains with your family just like I do. So thank you for being here. I do have one awkward question to ask you real quick, and then I want to get to some of the trends and how you're going to work on them. Did you actually tell Pulte you were going to punch him in the face? No, sir. I actually said I was going to kick his ass. Good. [02:31:08] Speaker 3: Okay. Good. I share the emotion. Thank you. As I said, that was last summer, summer '25. And many teams have fights in the locker room and then go out and win for the team on the field. Yeah. [02:31:22] Speaker 22: Yeah. I was just curious, because everybody's going to be showing that. I made it clear I'm not going to support Pulte for D&I, but I'm sure they're going to dredge that up. So I thought I gave you an opportunity to -- [02:31:32] Speaker 3: I had a very good exchange with the director yesterday. I want to keep the momentum going on the FH. Yeah. [02:31:39] Speaker 22: Well, he lost me when he went after Powell. So we can move on to your core job. Yeah. I know back in 2028 you were trying to target a 3% deficit to GDP. I think that's a laudable goal. There's a lot of work. A lot of work we have to do so you can put it back on us for maybe not making progress. But now we're at 30-year yields at a 19-year high, you know, where we are in 10-year yields and even some of the interest expenses on the 5.3 of GDP. We're not trending in the right direction. What are we going to do? Or what would be your advice? What is the administration going to do to help Congress focus on the main thing to try and get our deficit to GDP ratios to what most economists think are necessary, which is your laudable target? [02:32:26] Speaker 3: Yes. So, Senator, this year the U.S. has the presidency or the head of the G20. We're actually holding the finance ministers meeting in Asheville. Yeah. So, maybe you'll join us. And we have outlined to the industrial nations or to the G20 that we believe that the most important factor for financial stability is economic growth. That it is a lack of growth worldwide and the decision that many trading blocs countries have made. And I believe the most important thing that we can do, as I was trying to tell Senator Welch, that the CBO projections are all at 1.8%. That we have grown at 2.6% thus far. That includes the Democratic shutdown and the Iran conflict, which makes me believe we can grow at 3. So, if the CBO is wrong in their first year, how can they project out 10 years? So, I think that growth, the constraining spending and a growth agenda will do this. [02:33:32] Speaker 22: The -- and I may submit a question for the record that has to -- I have to believe that global growth and U.S. growth is somewhat -- we are seeing great growth numbers. But I do think there's a lot of uncertainty out there, and I have to believe that that's keeping some capital on the sidelines so we can even see greater ones. One of the areas where I think we've had some confusion, I asked Ambassador Greer last year whose throat do I get to choke if the Liberation Day tariffs didn't work out. I'm not going to ask you that question. I think I know the answer to it. They didn't work out. But now you're at least working with CBP on the refund process. How does that actually work? I know CBP has stood up a portal. Now they're appealing the decision so people that were applying for it can no longer while this appeal is occurring. What is Treasury's role in that? [02:34:26] Speaker 3: Senator, we're just a -- Purely a dispersing entity? We're just a dispersing agent. Okay. [02:34:31] Speaker 22: Good. The -- I guess the only other question I have going forward is the -- how do we reconcile the increased budget requirements with the goal of trying to reduce our deficit to GDP? Is it just something we've got to put on hiatus now because we're dealing with high-priority items? Or how do we -- how do we talk and chew gum at the same time? Because we have a pretty massive increase in defense spending, which I'm generally supportive of. But we have no way to pay for it. It's one of the reasons a few years ago I was one of only nine people that voted against a trillion-dollar veterans bill because it had no pay for. So how are we going to get to these things that are important but actually pay the bills at the end of the day versus putting my grandkids in debt? [02:35:21] Speaker 3: Well, sir, you met my children. I hate to put them in debt. And there are priorities because with -- with the defense budget, if we don't have national security, I think it's very linked to economic security. And I would like to see, as I said, something with a three in terms of deficit to GDP by the time the president leaves. I think one of the things that is the result of the working families tax cut is the immediate expensing of equipment, factories, and R&D. And what we were seeing there is this is not a giveaway. This is creating productive capacity. So the way to think about it now is that as we are not getting the tax revenue because a corporation, small business, has immediately written that off, we are increasing productive capacity, which I think is almost like the slingshot effect, that we will start getting it in the second year, the third year, the fourth year. Thank you. [02:36:30] Speaker 1: Thanks. Thanks. [02:36:32] Speaker ?: Thanks. [02:36:33] Speaker 1: Thank you. Senator Cantwell. [02:36:35] Speaker 23: Thank you, Mr. Chairman. And I know it's been a long day because I've been in a long hearing on the other side -- just on the other side of the hallway. But thank you for holding this hearing. Good to see the Treasury Secretary here. I want to express my concerns about the Trump settlement with the IRS. I think taxpayers need to know that well-connected are not given a free pass. I would love to talk to you about the Jones Act waiver tax parity. I'd like to talk to you about the fact that we have an insolvent highway trust fund. But I really want to ask you where you see this landscape now with China, having been very active in the Chinese meetings and this issue of trying to move on from the tariff debate and get the Chinese into a manufacturing purchase, specifically, of aviation. And so I know that this is something that the administration and you have been personally involved in. And I just hope that as we look at pushing China to make big purchases -- I mean, I think it's kind of crazy that if they want to be successful, why not do what Emirates is doing in the Middle East? Why don't they -- why doesn't China Air become the big deliverer of an air transportation system in the Far East and do it with a fuel efficient plane? So what do you think the chances of that continuation of getting this on track and getting -- when the president comes here to have some success? [02:38:08] Speaker 3: So, Senator, I think after a rocky period that we have very good stability in the relationship. As I've said many times, we don't want to decouple, but we need to de-risk. There are many industries we need to bring back, whether it's semiconductors, critical minerals slash rare earths, our precursor medicines and chemicals. It's unacceptable that we rely on China for many of those. Thus far, we have seen a willingness by the Chinese. They are very interested in the Boeing purchases. They agreed to 200 airplanes during the visit. We will see if they commit to a larger number when Xi Jinping arrives in Washington. And the other thing that we are pushing for is for the Chinese to open their economy. Because what has happened, we have this -- probably the most unbalanced, imbalanced economy in modern history. And it is hurting their households to the benefit of their manufacturing sector. China runs a massive budget deficit, about 10% of GDP. 4% -- 4% goes to industrial subsidies. And if they move some of that over to the households, which we brought up with Chinese leadership during the visit, then there would be much more demand for not only American industrial products, like great Boeing airplanes, but more American goods. We have formed a board of trade. And we will be looking at non-critical industries -- or non-critical things that we can trade with each other tariff-free. [02:39:57] Speaker 23: How will that work? I mean, I'm for the tariff-free part, for sure. And particularly, you know, another issue -- we have both very high-end manufacturing like aerospace, but we also have a lot of seafood in the Northwest. And China consumes something like 45% of the world's seafood. And I guarantee you we're not -- that market isn't open wide enough for our products. So how would the Board of Trade help us with that? [02:40:22] Speaker 3: Well, that's exactly what it's going to do. It's going to say -- if we pick a number -- 30 billion by 30 billion. What are 30 billion of things that -- non-critical industries, non-critical things -- fireworks, Halloween costumes, very low-end consumer items -- that we do not want to re-shore, that we want to buy from them? And what are things that they would like to buy from us? The seafood? Maybe energy? And then we will both agree to that -- that -- that basket on either side will have no tariffs. [02:40:58] Speaker 23: Well, I hope -- I think this is a particularly important market with a long-term relationship. I know the challenges that we -- we face in forcing them to open those markets. But I also think that -- I think getting off the tariff debate and into an open ways to get more product flowing, to me, is a very important thing. So, thank you, Mr. Chairman. I see my time has expired. But I do want to, again, emphasize I really am against the -- the -- the Trump settlement with the IRS. And I know you have oversight over that. So, I'm mentioning that to you. Thank you, Mr. Chairman. [02:41:34] Speaker 1: Thank you. We are informed that Senator Marshall may be back. Senator Wyden has asked for a second five-minute round. And as a ranking member, I've agreed to that. So, Senator Wyden, why don't you begin? And then, if Senator Marshall shows, he'll be the final one. [02:41:50] Speaker 2: Thank you, Mr. Chairman. [02:41:51] Speaker ?: I've got one question. [02:41:53] Speaker 2: I want here, Mr. Secretary, to follow up on your answers about the Booth-Booth Allen contracts. Now, you said you didn't know about Trump's lawsuit in advance. So, I gather that, for you, it was a coincidence you canceled the contracts three days before Trump's lawsuit? [02:42:13] Speaker 3: That would be correct, sir. Okay. [02:42:16] Speaker 2: And you didn't talk to anybody outside Treasury? I assume that's what you're saying, as well? Again, as I said, I had no knowledge. Okay. Mr. Chairman, I'm going to make a brief closing statement with respect to where we are, because I think that this has been a critically important meeting. And what it has showed is that almost all of the big questions with respect to immunity from audits remain unanswered. And my own view is that we're going to keep digging into this. I know that I'm going to. And my own view is that somebody broke the law. Either Mr. Besant or Frank Bisignano, the CEO of the Internal Revenue Service, were illegally involved in the audit immunity granted to Trump through the addendum. Or if Mr. Besant continues to claim that Treasury and the IRS were not involved, the audit immunity grant in the addendum is against the law because acting Attorney General Blanche doesn't have the authority to settle tax disputes that may have not been referred to DOJ. So that's where we are. It's one or the other. And my own view is that as we keep digging, somebody broke the law and I'm determined to work with my colleagues of both sides of the aisle to get to the bottom of this because we are wrapping up with virtually all of the big issues with respect to how this immunity, which basically nobody else in America gets. So that's that's the important point came into being and we've got to get to the bottom of it and make sure that it's correct and it doesn't happen again. And I thank you for the extra time. [02:44:07] Speaker 3: And we've never seen anyone in America. They have their tax returns. The tax returns of all their employees leaked without an apology, Senator. Would you like to apologize today? [02:44:19] Speaker 2: I was very much at the bottom of saying that it was critically important that enforcement action be taken. And I worked with my colleagues on both sides to move quickly. That's the fact. [02:44:31] Speaker 3: Yeah. Then why did Mr. Littlejohn, why was he only charged in two out of three potential charges? It was he got off. [02:44:41] Speaker 1: With that, what we will do is Senator Marshall, you made it in just under the wire. Senator Wyden has given his closing remarks. I will forego my closing remarks to allow you to give your five minutes worth of questioning. [02:44:56] Speaker 24: Well, thank you, Chairman. That is very kind of you. Secretary Bessent, welcome. I know it's been a long, long morning and I know you probably have answered these questions already. One of my favorite quotes from you is, "The table is set and it's time for the banquet." And I'm sure you probably could credit somebody else, but back in Kansas we say, "The table is set and it's time to eat." I want you to know I've been all over the state of Kansas, and especially manufacturing is growing, that there's new opportunities there. And I think a lot of it is from the working family tax cuts bill has made that very possible. What I love about your background is you're a business person that's come to Washington, D.C. What do you see happening with manufacturing because of that working family tax cuts bill across the country? [02:45:43] Speaker 3: Senator, we're having a manufacturing renaissance. We're seeing that we've created about 90,000 new non-residential construction jobs, which would tell you that those are some type of manufacturing facilities. Those in my hometown of Charleston, South Carolina, Boeing, is expanding their facility by 50%. And those are construction jobs, and then that will become 1,000 high-paying manufacturing jobs. We're seeing that all over the country. We're all over the country. We are seeing pharmaceutical companies re-shore. We saw John Deere, the CEO, building a new factory in Indiana and in North Carolina. So it is a real manufacturing renaissance, and much of it is a result of the tax bill. I was in greater Minneapolis visiting Winnebago, and they told me that because of the tax bill, they had a decision whether they were going to start create a battery research facility in Florida. And the full expensing gave them the internal rate of return that they needed. So that's more jobs in the Sunshine State. [02:46:58] Speaker 24: Great. The next question, and you don't have to answer it now. You can give us a written one. But the 45Z model, again, you put on your farmer's hat for a second. You understand how important 45Z is to our farmers back home. I think there's the GREET model is waiting for the Treasury to kind of do their little work on that as well. So maybe your staff could give us an update unless you wanted to say something. [02:47:19] Speaker 3: No, we'd be glad to do it, but we think it's very important, sir. [02:47:22] Speaker 24: Great. I want to talk about child care just a second as well. Under Joe Biden, we saw the cost of health care, housing, child care go up 50%. Inflation is cumulative. But again, our working family tax cuts bill did some incredible things for child care. And all across the state of Kansas, again, I'm seeing people being able to invest in this. But I especially -- not only do I -- the increased monies were given to individuals, but the businesses having an opportunity to expand. Can you speak to a little bit about what your vision is on using that benefit? [02:47:55] Speaker 3: I think that's a great benefit. The child deduction is now permanent, thanks to you all, $20 to the $100. So, you know, I think that we have seen that the best way to do this is to engage the private sector. [02:48:17] Speaker 24: Exactly. And then I'm just going to close with -- I was just out at the Reagan Library, and he spoke about this -- always spoke about this bright, shining city on a hill. And it's hard for me to imagine, but the third quarter last year, Kansas led the country in GDP growth, 6.5%. And we never lead any type of thing economically. And so I went back and, you know, tried to figure out the whys of this. And certainly the cattle markets are good. Farming income in Kansas was up 80%, and a lot of that was government-related. But certainly a part of that was the cattle industries. And, of course, the cattle eat, of course, is corn as well. We saw some -- but we're also seeing expansion in manufacturing. What would be the message of hope you would give America that this economy -- it really feels good to me right back. And things are not perfect. We've got to work on the price of gas. Inflation's cumulative. We're still feeling a sting. But give me that message of hope from your desk. [02:49:21] Speaker 3: The underlying economy is extremely resilient. That we have had tremendous job growth in the past few months. We saw the ADP numbers, which are a precursor for nonfarm payrolls, come out very strong today above trend. We are seeing trucking surveys do very well. And, you know, I think that the underlying economy is very strong. We will get on the other side of this Iran conflict. Prices will come back down. And I think that the economy is going to roar, sir. [02:49:54] Speaker 24: Okay. Thank you, Secretary, for sticking around. Mr. Chairman, thank you so much. [02:50:00] Speaker 1: Thank you, Senator Marshall. And thank you, Secretary Besant. That concludes all of the questioning and all of the commentary. We appreciate you taking this time. You spent more than two and a half hours with us today. More than that, we appreciate the service that you are giving and that all of those at the Treasury Department are giving. And please extend that thanks to them for us. With that, we are concluded. I remind my colleagues that the deadline for submitting any questions for the record is 5:00 p.m. on Wednesday, June 10th. And the Finance Committee stands adjourned. [02:50:52] Speaker ?: Thank you. Thank you. Thank you.