▶ 0:18:56The committee will come to order. Before this uh before this hearing begins, I want to acknowledge the passing of our former colleague Charlie Wrangle. Um he started from from humble roots in Harlem and rose to be a member of the Ways and Means Committee for more than 40 years and ultimately he became chairman of this committee as his portrait sets to my right.
▶ 0:19:23Um, as a member of this committee, Chairman Wrangler, he recognized the United States and Africa, the relationship between them, of its importance, and was a leader in helping create the African Growth and Opportunity Act, or AGOA, as so many of us refer to. He wrote that after sustaining wounds during the Korean War, he said he hadn't had a bad day since. It's a pretty powerful statement.
▶ 0:19:52There can be no doubt that Charlie Wrangle was a joyful warrior in the US House. Um, in our prayers are with his family and I'd love to turn it over to ranking member Neil if he'd like to say a few words as well. Thank you very much, Mr. Chairman, and thank you for this recognition of our departed colleague. Charlie Wrangler was one of the finest people that I have met in my long political career.
▶ 0:20:16saw him as a mentor, saw him as a guide, but also saw him as an individual who overcame extraordinary odds in his own life. And he spoke of the anecdotes that are should be powerful to all of us as we recall his contributions including uh sitting in the chair when the Affordable Care Act was written.
▶ 0:20:35And I also think that uh despite whatever setbacks he had in a nation that was pretty segregated when he was growing up as a young man, he might have been a high school dropout. He might have been an individual who was pushing a cart at the Fulton Street Fish Market, but he also saw opportunity. And he always referred to America as this great country of ours.
▶ 0:21:01And I think that in his early days, there might have been reason for him not to think it was quite as great as the nation he came to serve as a war hero at the Yaloo River. But it was also part of urban lore. It was part of the story of how we've all arrived here. And Charlie Wrangle was a very important part of that mosaic. I will share one very funny story because his sense of humor was gratifying to all of us.
▶ 0:21:26he could take the steam out of an argument in 10 seconds after he listened very carefully to what somebody had to But I think meeting the Chinese government was one of the funniest moments that I had with him. We met uh in the capital and at that time the Chinese government they had not really made the sort of reforms that many of us have come to see today. They were not dressed in Madison Avenue garb at that time. They were dressed in military uniforms, men and women.
▶ 0:21:55And we were all wondering how uh Chairman Wrangle would greet Madame Wui and probably uh 25 members of the Chinese cabinet. And Charlie welcomed them by saying, "I want to welcome all of you to the Capitol.
▶ 0:22:13The last time I was with all of you, you shot me." and recall that he was shot at the Yaloo River, but he never forgot, as I said earlier, his reference to this great country of ours. So, I appreciate the fact that you've offered us some time. I know that there will be a funeral mass at St. Patrick's Church tomorrow morning for him. He was a man of deep faith and abiding loyalty to this great country of ours. Thank you.
▶ 0:22:42Thank you, Ranking Member Nil. Um, I want to start off first by thanking you, Secretary Besson, for coming here straight from London. Um, after after fighting for America's interest and negotiations with China, I also want to thank you for your close collaboration and ongoing work with Congress to deliver the one big beautiful bill um to President Trump's desk as soon as possible.
▶ 0:23:09You have noted how the different parts of President Trump's economic agenda, tax relief, fairer trade, and deregulation are working together to ignite a new era of American prosperity. Only five months into the Trump administration, Americans are already seeing real results from his agenda. Inflation is coming down. Just look at the price of eggs.
▶ 0:23:37They are down 61% since President Trump took office. Wages are increasing faster than prices, helping families recover from Biden's 21% inflation tax. 9 trillion has been pledged by the private sector to be invested in new facilities, in factories, and American workers.
▶ 0:24:00In April, we saw the monthly trade deficit cut in half with both US exports increasing and imports decreasing. More than 70 countries have requested rapid negotiations to improve our trade relationships to be fairer to American workers, manufacturers, businesses, and farmers.
▶ 0:24:24And we are creating new jobs in the private sector rather than more federal taxpayerf funed bureaucrats. Democrats have tried to obstruct the success every step of the way. Just last month, they voted for the largest tax hike in American history.
▶ 0:24:42In order to bring this progress to a screeching halt, Congress must pass the one big beautiful bill to save American families from a looming $1,700 tax increase and instead give Americans a $1,300 tax cut. 77 million Americans voted to make the 2017 Trump tax cuts permanent.
▶ 0:25:09No tax on tips, no tax on overtime, tax relief for seniors, and no tax on autoloan interest payments. Democrats fought each of these tooth and nail. 40 million families will benefit from the increased child tax credit. Millions of Americans, millions of American children born each year will now have savings accounts started in their name. Democrats voted against both of those items.
▶ 0:25:3891% of taxpayers who use the standard deduction will benefit from a doubled deduction that is made permanent and further increased. Democrats voted against that as well. Washington Democrats voted against cutting taxes for bluecollar families. They described these as tax cuts for millionaires.
▶ 0:26:01Well, people making over 1 million will pay an even greater share of the tax burden than today, while families making less than $100,000 get a 13% tax cut. Nearly 30 million small businesses will benefit from a pass through deduction that is both expanded and made permanent.
▶ 0:26:252 million family farms and small businesses will benefit from a death tax exemption that is permanent, larger, and indexed to inflation. Democrats oppose this help for Main Street businesses and familyowned farms. The renewal of progrowth tax policies will attract more investment, new plants, and facilities, save 1.1 million manufacturing jobs, and help boost America's GDP by over 3.5%.
▶ 0:26:57Democrats couldn't fulfill these goals and instead shoveled your tax dollars toward mega banks, China, and radical wealthy environmentalist. We're replacing that bad tax policy with good tax policy that broadly benefits workers, families, farmers, and small businesses. In fact, we are cutting spending by 1.6 trillion, the largest mandatory spending cut in US history.
▶ 0:27:28Democrats brag about cutting spending under President Clinton. But he needed a Republican Congress to get it done. Illegal immigrants will no longer be eligible for refundable tax credits and other benefits. Democrats voted to allow this practice to continue. Instead, Republicans one big beautiful bill rewards working families.
▶ 0:27:52Take-home pay will rise by as much as 13,300 and 7.4 million new jobs will be created or saved, including 1 million small business jobs annually. and they and they need it after four years of Washington Democrats doing the opposite. This bill breaks with Democrats on surrendering American tax revenue to foreign governments. Instead, we put America first.
▶ 0:28:20We give President Trump the tools needed to stand up to foreign nations that unfairly tax American businesses. We will defend our tax sovereignty if these countries choose. If these countries choose to withdraw their unfair taxes, this policy will have achieved its goal.
▶ 0:28:42I'm looking forward to my Senate colleagues quickly passing the one big, beautiful bill so that we can get it to the president's desk by July 4th. This committee will work closely with the Treasury Department to ensure implementation of this law gives workers, families, farmers, and small businesses the tax relief they are owed and as soon as possible. I also want to acknowledge another component of President Trump's economic agenda that is central to this committee's responsibility.
▶ 0:29:12The president's trade and tariff actions. Even the Biden administration acknowledged the success of the first term Trump tariffs by keeping them in place. Democrats had no issues with that. But now the president now that President Trump is back in office and once again aggressively leveraging tariffs to create fair treatment for American manufacturers, farmers, and workers. Democrats dislike tariffs.
▶ 0:29:43Again, I'm encouraged by the progress we have made to tear down unfair trade barriers and the ongoing consultation consultation Secretary Besson and others in the administration have had with us to ensure better trade agreements that open market access for American products and services and hold foreign trading partners accountable. Thank you, Secretary, for your hard work in advancing the president's agenda.
▶ 0:30:11I look forward to continuing to work with you and appreciate you taking time to answer our questions today. I uh am pleased to recognize the ranking member, Mr. Neil, for his opening statement. Thank you, Mr. Chairman, and welcome, Mr. Secretary. Forgive me if I point out that we've all heard this argument tax cuts and growth, 2011, 203, $2.3 trillion of tax cuts.
▶ 0:30:382017, let's borrow $2.3 trillion in tax cuts as we project economic growth. But somehow tax cuts pay for themselves because that's the theology that became so popular. When there's a Democrat sitting in the White House, it's always about the national debt. When there's a Republican sitting in the White House, it's always about tax cuts. During our conversation that went pretty well, Mr. Secretary, I did remind you that you are a successor to Alexander Hamilton.
▶ 0:31:07I have known the men and women who have had the title that you have today. It'll be the title at the end of your life you perhaps other than a family person will cherish the most. The people that have had this job, they don't fudge the numbers. The people that have had this job, they don't bend to political considerations. They give advice based upon reality and the success you've had in your career. Since Republicans reclaimed power, they've had a trifecta. What have we seen?
▶ 0:31:36It's the constant chaos whether it's been the Doge shadow operating as they rifle through confidential data, the blatant weaponization of the IRS as they've attempted to change tax collection policy in this country. They have misled us. They have circumvented oversightes. They have misled the public. And they have bent the levers of power to benefit those in the Oval Office. This committee is rubber stamping all of it. That is not our job.
▶ 0:32:07Members on this committee know I questioned Democratic presidents when I disagreed with them publicly and stayed with my disagreement if I thought it was based on principle. We see none of that any longer. It's what is stated at the White House that everybody acquiesces to on the Republican side. A blank check for the president. Never mind that we'll let wealthy tax cheats go. Never mind that the theology of tax cuts paying for themselves doesn't stand up.
▶ 0:32:34Never mind the pathology that if we only have tax cuts, it'll always work out. Well, they're attempting now to ram through what a very prominent former best friend of the president had to say. He called the tax bill an abomination. The Trump congressional Republicans certainly are about to make history. They're going to be responsible for adding $4 trillion to the national debt and simultaneously cutting healthcare for 16 million Americans.
▶ 0:33:04The changes that have taken place, the chaos of the tariff bill, we don't object to tariffs when implied and suggested for an outcome. We object to the chaotic nature of how those tariffs are being applied. We've driven away friends across the globe. We've driven away careful allies. I negotiated USMCA.
▶ 0:33:26It was done the right way and the president at the time said it was the best trade bill in the history of the Today, it's the worst trade bill in the history of the world. That's what we object to on the Democratic side. You've had a reputation, Mr. Secretary, for sound fact-based decision-making.
▶ 0:33:46I hope it continues to set you apart from other members of the But we shouldn't be attacking the I have many days when I've disagreed with the Joint Committee on Taxation. I've had many days when I've disagreed with the Congressional Budget Office. I've had many days when I've disagreed with the World Bank. But I don't suggest it's partisan. I don't suggest that they're making up the numbers.
▶ 0:34:12I suggest it's an honest disagreement and I don't come back to the argument that they don't know what they're talking about. The math here is true. It's projected correctly. $4 trillion at least to the national debt. That takes us from 36 to 4041 trillion of debt.
▶ 0:34:36When the new administration took office, they said clearly that the reality of their economic policies would be there for all to see. Well, you know what? They were accurate in that statement. The American people are being left behind in a system that is rigged, and I don't use that very often. The rich right now in America do not need a tax cut. Downward pressure on wages created by a lot of different issues should be reasoned and considered here in this committee.
▶ 0:35:05We could find an agreement with the Republican party on an awful lot of things if we left the position clear as we did in the previous administration where those under $400,000 would have tax relief, not those over $400,000. Oversight is the sacred obligation of this Congress. Republicans need to at least from time to time ask a few real questions of the administration before the white flag of surrender goes up to these arguments.
▶ 0:35:36Thank you, Mr. Chairman. Thank you. Today's sole witness is United States Secretary of the Treasury Scott Bessant. The committee has received your written testimony and it will be made part of the formal hearing record. Secretary Bessant, you have five minutes to deliver your remarks and you may begin when you are ready. Chairman Smith, Ranking Member Neil, and members of the committee. I'm grateful to join you today.
▶ 0:36:02Treasury is committed to working with Congress to improve our nation's finances, create new jobs, and strengthen the economy. We look forward to coordinating with you on the president's budget, his tax priorities in the coming weeks. As part of this effort, I wish to highlight today the Treasury Department's efforts to advance President Trump's economic agenda on tax and trade. First, tax.
▶ 0:36:29I'm pleased to report the Treasury has just completed its most successful tax filing season in years, and we did so while improving efficiencies and cutting cost at the Critics of the president's efforts to ma modernize the IRS warned that the effort would result in a 10% shortfall in receipts. Instead, the opposite happened.
▶ 0:36:55April receipts this year were up 9.5% over the previous year and receipts in May were up 14.7% over the previous year. Most remarkably, the president was able to achieve these results while reducing two billion in waste and planned IT spending at the This success has taken place against the backdrop of one of the most consequential tax proposals ever to come before Congress.
▶ 0:37:25The one big beautiful bill act or as I will call it today, O tripleb. The one big beautiful bill will make the 2017 tax cuts permanent. This will provide individuals and businesses with certainty and build economic momentum. The legislation is squarely aimed at boosting the working and middle class and invi in reinvigorating American manufacturing.
▶ 0:37:52According to the Council of Economic Advisors, the one big beautiful bill will raise take-home pay between 7,800 for the average family of four. It will increase wages between 6,100 to 11,600 for the average worker. And it will cement no tax on tips, no tax on overtime, and tax cuts for seniors.
▶ 0:38:18The one big beautiful bill will also incentivize unprecedented investment in US manufacturing. The legislation will provide 100% expensing for new factories as well as existing factories that expand operations and support made in America. It will streamline burd burdensome permitting processes that often stand in the way of new manufacturing projects.
▶ 0:38:45It's time for this country to start building things again and the O tripleB makes this possible. The administration is grateful for the leadership of this committee in shephering the one big beautiful bill through the House. We are working closely with members of the Senate to get this legislation to the president's desk. Trade is the second topic I wish to highlight.
▶ 0:39:10The progress we have made on tax issues over the last four months complements the significant progress we have made in rebalancing the global economy. Since I last testified before Congress in May, the president announced a historic US UK UK trade deal. This arrangement, which creates a 5 billion export opportunity for American ranchers, farmers, and manufacturers, is a preview of what's to come.
▶ 0:39:40Dozens dozens of countries have engaged the administration thus far with offers to improve their trade relations with the United States. This includes China. I have just returned in the middle of last night from successful negotiations in London with a Chinese delegation that will not only stabilize the economic relationship between our two economies but make it more balanced.
▶ 0:40:07China has a singular opportunity to stabilize its economy by shifting away from excess production towards greater But the country needs to be a reliable partner in trade negotiations.
▶ 0:40:22If China will course correct by upholding its end of the initial trade agreement we outlined in Geneva, and I believe after our talks in London, they will, then the rebalancing of the world's largest two largest economies is possible. By challenging the decades old status quo on tax and trade, President Trump is breathing breathing new life into the American economy.
▶ 0:40:49More than 500,000 private sector payroll jobs have been added since January. Most importantly, inflation in the US is at its slowest pace since 2021. And the numbers we receive today take us back to the slowest pace since 2020. Most importantly, we are decelerating cost increases for shelter, food, and energy.
▶ 0:41:18After four years of price increases, diminishing the US standard of living, inflation is showing substantial improvement due to the administration's policies. Furthermore, the labor market remains strong with low unemployment and plentiful labor demand as job openings remain high. This strength has been exemplified in the recent performance of the stock market and consumer confidence data.
▶ 0:41:45The president's bold leadership on these issues has lays laid the ground for a golden age economy. With your help, we can build on that foundation to create even more prosperity and abundance for the American people. We hope you will enjoy us will join us is in this endeavor. Thank you all and I look forward to your questions. Thank you. We'll now proceed to the question and answer session.
▶ 0:42:10One of the one of the more absurd attacks we hear from our Democrat colleagues is that that the one big beautiful bill is focused on the wealthy, not the working class.
▶ 0:42:23I'm sure the waitress who will keep more of her hard-earned money under the no tax on tips policy or the linemen burning the midnight oil to restore power and seeing a tax cut under the no tax on overtime policy would be surprised to learn that Democrats consider them wealthy.
▶ 0:42:44Secretary Bessant, whether it is those policies or the tax relief in the bill for seniors, the double child tax credit and standard deduction, or the fact that the tax burden on the truly wealthy will actually rise under this bill? How does the one big beautiful bill deliver primarily for working families?
▶ 0:43:11Thank you for that question, Chairman As we saw in President Trump's first term, substantial growth was created. Non-inflationary growth. Real wages rose and working Americans did better. Hourly workers did better than supervisory workers. We believe that this will happen again.
▶ 0:43:41as you outlined, no tax on tips, no tax on overtime, tax breaks for seniors on social security, and the ability to deduct auto loans on new cars made in America, as was available when I bought my first car in 1978, will be restored.
▶ 0:44:05All of this will help working Americans overcome this horrendous affordability crisis that this administration inherited. The Biden administration negotiated a global tax scheme through the Organization for Economic Cooperation and Development that would rob American taxpayers of $120 and would discriminate against American businesses.
▶ 0:44:35President Trump issued a day one executive order opposing the Biden administration's global tax surrender. In the one big beautiful bill, Congress provides the president in line with that directive directive specific targeted authorities to fight back in the event nations impose a discriminatory tax on American businesses such as a UTPR.
▶ 0:45:05Last week, members of this committee met with an an ambassador who was specifically concerned about how this provision would give the US the ability to stand up for American businesses and respond to an unfair tax his country has imposed on American job creators.
▶ 0:45:27Secretary Besson, why is it important for the Treasury Department and the president to have strong protective measures like the one provided in the one big beautiful bill to fight against foreign taxes that discriminate against American companies? And how will the administration ensure that the use is targeted and in a manner to protect or replace US tax revenue? Uh, Mr.
▶ 0:45:57Chairman, for whatever reason, the previous administration chose to outsource American sovereignty on tax matters, and the Trump administration believes that is unacceptable. Many other countries would seek to pull in revenues from US multinational corporations into their treasuries.
▶ 0:46:21And rest assured that the provisions in the one big beautiful bill to combat this are a staking out of our fiscal sovereignty. The US tax system will stand next to what is called pillar two and other countries are welcome to relinquish their fiscal and tax sovereignty to other nations. the United States will not.
▶ 0:46:51So, this bill will allow us to prevent our corporate revenues from being drained into foreign treasuries, and that is in the hundreds of billions of dollars. Thank you, Secretary. President Trump is also using tariffs to level the playing field and demand fair treatment for American workers, farmers, and manufacturers.
▶ 0:47:19Secretary, you are on the front lines of the president's economic policy agenda, including through your lead role in trade negotiations to demand fair treatment from China over the last couple days.
▶ 0:47:34How do the president's trade policies and tariffs and the total reset of our unfair trade and investment relationship with China that President Trump has led fit into the broader effort to reor America's economy toward one that serves the working class instead of just the wealthy elites? Uh Mr.
▶ 0:47:59Chairman, China currently has the most imbalanced economy in the history of the world. They now have an approximate 30% share of global and they continually grow their manufacturing base. They are in the midst of a real estate downturn.
▶ 0:48:19Some may cause a crisis and they are trying to export their way out of it rather than take domestic measures such as increasing consumption, dealing with banking problems or dealing with the real estate crisis.
▶ 0:48:36They cannot be allowed to export their way back to which would mean substantial decreases in the standards of living, not only for the United States working Americans, but for working citizens across the world.
▶ 0:48:56Our negotiations with all countries seek to bring fairness and I will echo President Trump's remarks as the there are 18 important trading partners that we are in wholesome negotiations with.
▶ 0:49:15Many of them are coming to us with unimaginably good trade deals to bring down tariffs, non-tariff trade barriers, which the academic research has shown to be can be even more pernitious than the tariffs, currency manipulation, and the subsidy of labor and industry. But as these countries come to us and I look at the list and I think how could this have happened?
▶ 0:49:46How could this have happened that these that the United States they became party to such fair unfair and unbalanced trade and as President Trump has said I don't blame the other countries. If you could get away with it you should.
▶ 0:50:05It was those sitting behind the resolute desk or those making trade policy who've allowed this to happen over 40 years and we are determined to rebalance that for the American people. Thank you, Secretary. I now recognize the ranking member for any questions he might have. Thank you, chairman.
▶ 0:50:24So maybe we could stick to a couple of facts here as previously uh discussed and that is that if you made a million dollars last year, you're going to get about $84,000 in tax relief with this bill. If you made under $50,000, you are likely to get about a dollar a day. President said that we'd have 90 trade agreements in 90 days.
▶ 0:50:47were 89 short because of the manner in which some of these allies have been offended. We want trade balance for sure, but we also want to make sure that it's done in a manner that will last, not subject to the whims of the administration. I understand, Mr.
▶ 0:51:10secretary that you don't agree with some of the economic forecasts that have been projected as it relates to the big beautiful bill. So Pin Wharton says this bill will add trillions of dollars to the national The Yale Budget Lab says this will add trillions of dollars to the national debt. Well, we're all for two. But how about Maya McInness? Not exactly known for their socialist leanings.
▶ 0:51:38They say this will add trillions of dollars to the national debt. Well, let's go to the Tax Foundation, hardly a left-leaning political organization. They say this will add trillions of dollars to the national debt because the money is going to be borrowed. Here, facts should matter. The advice of experts should matter. We have seen the bond market's reaction to some of these proposals. They're jittery. But you know what? in this committee.
▶ 0:52:09We listen. The administration is putting its head in the sand on this debt issue. The facts are going to be hard to escape. So, let me turn to the impact of budget reconciliation as it relates to healthcare. In addition to adding trillions to the US debt, the bill will cause 16 million Americans to lose part or all of their health insurance, according to CBO.
▶ 0:52:39We know what the consequence will be of losing health insurance for the American family. More visits to the emergency room, more postponed treatments, more bankruptcies that will come because of it. The problems that people have with health insurance only mean that later on the problems pile up.
▶ 0:53:03Bad health challenge that is now going to occur for our rural hospitals surely many of which will be forced to close. Cutting more than a trillion five from Medicaid, Medicare and the Affordable Care Act certainly will mean job losses. No industry can sustain 1.5 trillion in cuts while we borrow money for a big tax cut that despite what has been said here today still favors people overwhelmingly at the top.
▶ 0:53:32Let me say in regard to the testimony, Mr. Secretary, that you've offered. There's another key consideration here. You're suggesting that the improvements at the IRS have all taken place in the last 6 months. It's because of what we did with the inflation reduction act. That's why the improvements have taken place, the technological upgrades that have taken place as well. We have a pretty good understanding of this. We want to use artificial intelligence for better tax collections, but all of this just happened in the last 6 months.
▶ 0:54:02That's our understanding based upon the The Commonwealth Fund cuts to Medicaid and SNAP are going to lead to the loss of over 1 million jobs. The American Hospital Association estimates that tens of thousands of hospital jobs will be lost as a result of these cuts. Furthermore, a professor at Yale has said that this will conservatively cause tens of thousands of unnecessary deaths. Worse healthcare, job losses, more borrowed money.
▶ 0:54:32The American people deserve considerably better than what we're being told. But let me offer this challenge, Mr. Secretary. We would be prepared on the minority on the minority side to work with the administration and direct tax relief back to people under $400,000 of joint income as opposed to the suggestion that is being offered here today. And if you disagree with the number that I offered about tax relief for somebody who made a million dollars last year, let me give you the last 30 seconds to speak to that.
▶ 0:55:04Uh Mr. The representative Neil, I I have great respect for you. We've had good conversations, but respectfully, if I weigh a,000 pounds and you weigh 50 and I gain 10 pounds or I gain 10%, I have gained a 100,000.
▶ 0:55:24that during President Trump's first tax cuts, the share of taxes paid by the high end of taxpayers, the increased by more than 7%. And I can't I'm sorry I chuckled when you talked about the IT at the IRS. The program is 35 years behind schedule. 35 years and is wasting$2 billion dollar a year.
▶ 0:55:54That's why we put the extra money in. Uh, no, no, no, no, no. The extra money went in for bodies and acknowledged that standards were being lowered to bring in new agents. The money money is not the issue here. It is how the money is spent. That's exactly right. We agree on that. How the money is spent. And the last point that I would make, it has been spent poorly. Let me make this last point, Mr. Secretary.
▶ 0:56:21Do you agree with the idea that in 2017 that the federal government coming emanating from this committee borrowed $2.3 trillion for that tax cut? What I the belief is that everyone on the Democratic side voted for the biggest blowout for the deficit in history and that we are suffering from that. This past tax year, we will have between a 6.5 and 6.7% deficit.
▶ 0:56:52So, I find it very difficult to be lectured to by people who created the largest deficit in history when we were not at war and not in a recession. So, I negotiated with Secretary Minutuchin the pandemic relief bill, if that's the reference point. That's where overwhelmingly the money went. That was not a bad infusion of money. It worked.
▶ 0:57:17Economist magazine and the Financial Times said in January the American economy was the envy of the world. I yield back my time. Well, the the spending was not the en envy of the I'm pleased to recognize the vice chairman of the committee, Mr. Buchanan. Mr. Secretary, uh, thank you for being here today. There's no doubt that your knowledge of finance and global markets bring a unique welcome perspective to the Treasury and this country is fortunate to have your leadership.
▶ 0:57:47Since coming to Congress, I've seen administrations from both parties. I'll say that upfront. In terms of what's happened with the debt deficit, I want to get your perspective. I mean, the reality is last 20 years over 20 trillion dollar in additional debt. Uh I remember in the 80s, frankly, where we had the junk barn markets. I look at all these younger people out here, what we're leaving them is deplorable. And I just want to make sure that uh we're giving as much consideration as we can to that.
▶ 0:58:18Um 49 out of 50 governors have to balance the budget. I I it's my biggest issue up here. It's not about one party or the other. It's both parties have done little or nothing in this area and it needs to get addressed. When you spend last year, you take in five trillion, spend seven trillion and and you average over a trillion dollars a year for over the last 20 years. We need to get real about it because I you know again in the 70 in the 80s all the junk bond I seen what happened with the markets and all that.
▶ 0:58:46So can you make I know you touched on it but could you we'll get into the progrowth things in a minute. Can you just touch on your thoughts about where we're at and where we're going as relates to that. I know we've got people looking at making cuts but I do want to get your perspective on Congressman, I' I've enjoyed our conversations in the past. You as a very successful private businessman understand the the power of this tax bill especially in the expensing.
▶ 0:59:14You and I have discussed it in great detail. And uh look we do not have a revenue problem. We have a spending problem. We are right in line with the long-term revenues of approximately 17 to 18% of GDP. What we've seen here is a blowout in the spending.
▶ 0:59:39And as I was saying last fiscal year was something we have never seen before. We have never seen a deficit to GDP this large when we were not at war or not in a recession or not in a pandemic. Yeah, Mr. Secretary, war I have five minutes. Let me just mention just real quickly.
▶ 1:00:02Uh you mentioned I just want to get this in uh that 100% expensing is like jet fuel and 199 is huge. These are huge opportunities to make a big difference for small business. But to me there it's because I'm so passionate about it because they're the job creators. So can you comment on that? Your thoughts in terms of 199A and 100% expensing. Uh Congressman, I'll very quickly comment on two things.
▶ 1:00:31It it is the 100% expensing that is powerful and we are adding not only expensing for equipment as in President Trump's first term we are adding 100% for factory structures. So if you want to build your factory here in the US we want it to be tax efficient. We want you to have regulatory certainty. We want you to have quick permitting. And that is likely the single most powerful aspect.
▶ 1:01:01The u as the the ranking member discussed on the 400,000 level that unfortunately is a disaster for small business in the 199. Most small businesses are pass through entities and those small businesses are substantially above that 400,000 threshold. Yeah. Let me just add just in a closing point I I do want to make on the whole thing of full expensing.
▶ 1:01:30It's the probably the most powerful tool whether you're buying or selling someone that's been in business for 40 years or so. I can tell you firsthand it's a powerful tool. It's a job creating tool. I did want to have you comment the other thing on making I'd say in Florida I was chairman of the Florida chamber. One of the big issues there is about making the tax whatever we do on taxes making it permanent. So they got more certainty they can do planning investing in terms of going forward. Do you want to add anything to that? Uh yes sir.
▶ 1:01:58I was with a group of business leaders earlier this week and they were telling me that they are in fact holding back on capex because they need for the tax bill to pass so that they will have certainty that the 100% expensing will come back. I think that we will see the a sharp upward break in terms of capex as soon as we pass the one big beautiful bill. Thank you and thanks for your leadership.
▶ 1:02:28We're excited you're here today. Thank you. Thank you, Mr. Dogget. Thank you. Uh if beauty is in the eye of the beholder, certainly I can understand, Mr. Secretary, why you and the members of the Trump cabinet are so enthusiastic about this beautiful bill. uh gives so much to those at the top. And of course, Trump appointees are not just in the top 1%, but the top 1,000th of 1%.
▶ 1:02:53Uh I applaud your personal success, but isn't it true that for you and for a number of cabinet members and other Trump appointees, simply not having your taxes restored to the level that existed when President Bush and President Obama were in office at 39.6% 6% will provide you very substantial personal benefit. Yes or no? Uh that is not a yes or no question sir. All right.
▶ 1:03:21If you can't answer as many people Thank you. Reclaiming my time. If you can't answer I have different tax. Reclaiming my time please sir. If and and it is shown Mr. Chairman I don't want my time taken uh if uh the witness will not yield. I would recommend Mr. Dogget that if you asked a question, at least allow them to answer. You can recommend it, but you're taking my time uh for answering the questions. Continue. Let me say I understand you can't answer that with a yes or no.
▶ 1:03:48I'm concerned about the weaponization of the Internal Revenue Tax Code by the president and your role in it. Section 7217 of the Internal Revenue Code makes it unlawful for the president and his partners like you requesting IRS to conduct or terminate an audit or other investigation or particular taxpayer. Section 6103, as you're familiar, protects taxpayer privacy. Yet, in violation of both, the president began threatening Harvard in April.
▶ 1:04:18And on May 2nd, he declared, "We're going to be taking away Harvard's tax exempt status. It's what they deserve. and you've been part of the Wii. Uh when you said on May 23rd that you publicly declared that you were moving forward on this uh that there were a substantial number of rules that Harvard may have violated. Uh can you tell me yes or no whether you can pledge to avoid any interference in IRS audits or investigations of particular taxpayers?
▶ 1:04:49And if you can't answer that yes or no, just say so and then I'll move on to the next question. Sir, that is without question that I will follow the law. All right, sir. Uh, can you tell us whether yes or no, you can report back to this committee in 30 days after investigating to assure us that there have not been any requests by the president, any political appointee or any family member of the president to direct or influence the audit or termination of an audit or investigation of any taxpayer
▶ 1:05:19or entity. well, Congressman, as you said, th this is all private matters, so it would be out of line for me to report back on any of this. But I can assure you that I will follow the law and all proper procedures. Thank you. I'm just asking you whether you can report back in 30 days whether there has been any attempt.
▶ 1:05:44I'm not asking for the specifics of who was involved by the president or any of the other people I mentioned. uh to influence or direct any audit or investigation of a taxpayer. Can you do that, Serge? I I can report right here. I I am not in the habit of repeating private conversations, but the president and I have never had a conversation on Harvard's tax status. I I will report that right here. We don't need I'm not asking just about Harvard. If they pick on Harvard, they can pick on anyone.
▶ 1:06:11And I'm just asking for a simple report on whether there have been any efforts of that, whether from the president or one of his associates. uh and it would seem to me that would be easy to do. But let me move also to the question of privacy as it relates to data sharing. Do you agree that there is no authorization for the IRS to share tax data broadly with Doge or federal agencies for the general purpose of data consolidation?
▶ 1:06:37Uh section 6103 protects taxpayers precisely protects taxpayers information. uh we have followed all proper procedures and including in terms of the data sharing with the Department of Homeland Security, we are allowed to share taxpayers information for those taxpayers who are believed to be criminals or have committed a crime.
▶ 1:07:03I'm asking you about Doge and its apparent effort to have an omnibus information sharing agreement with agencies. Do you agree that you cannot share taxpayer data without statutory authorization from this Congress and you don't have any for that purpose? We will follow the direction of the regulations and the court.
▶ 1:07:20Sir, are you are you sharing any uh taxpayer information with Doge for this omnibus information sharing agreement where they seem to probe into the privacy of every American consolidating with social security and other private information. Are is there such sharing going on now, sir? Well, f first of all, I would push back on that You can do so. And I will I will tell you and there seems to be a misunderstanding among many people on your side of the aisle on what Doge is.
▶ 1:07:51Doge employees, I understand you had some misunderstanding about it and Mr. Musk yourself, but uh let me ask you again just simply on the question I'm asking. Are you sharing uh any uh of this data with Doge uh without congressional authorization? Uh as I said, we are following all of the laws. Thank you. I would appreciate an answer to my question, but uh I will yield back since my time is expired. Mr. Smith is recognized. Thank you, Mr.
▶ 1:08:21Chairman, and thank you, Mr. Secretary, for sharing your time here today. And I've not been around here as long as Mr. Neil has, but I I do want to bring in a bit of a historical perspective um that I think is relevant looking back.
▶ 1:08:37You know, we we can argue about CBO and JCT and uh it's an imperfect system and I think that's manifested itself in in various hits and misses on projections whether it goes all the way back to the original parts of the cost of Medicare that was way underestimated or whether it was the the structure of a more market-based approach with Medicare modernization act that precedes my time here but actually cost a lot less than was
▶ 1:09:07projected. You go to the receipts post 2017 tax action. This the receipts exceeded what was projected. So we we have an imperfect system but it's what we have and and I think we need to to go on that. Now you take things a step further and I I remember uh the president's economic adviser Mr. Hasset pointing out that with co yes there was bipartisan action.
▶ 1:09:34I'll I'll say that a few of those components still give me heartburn as much as an emergency uh that we found ourselves in. But when at the beginning of COVID when unemployment spiked and the GDP dipped we Congress acted by the end of 2020 GDP was back to about New President Biden was advised not to spend what he insisted on spending.
▶ 1:10:03I would I would suggest they're probably grappling with going back to uh the Obama stimulus and they think that the only mistake of the Obama's stimulus so-called was it didn't spend enough money rather than address the bure bureaucratic approach that uh you know like the joke was shovel ready maybe wasn't what it was described to be but we have these imperfect projection systems and yet we've got the reality of
▶ 1:10:34And I think this is important to note and and especially on the IRS uh structure and and the the desire to spend money on more people at the IRS because that could generate more audits and that would generate more revenue and then we can spend that revenue that good grief still wasn't enough to cover what the actual IRA costs came in and came to be.
▶ 1:10:58So, we have to deal with these realities and and it's because they're imperfect systems that we just have to have to uh acknowledge. And so, that's why, Mr. Secretary, I I had not heard the numbers on the IRS, especially in in these these efforts most recently, that we were told that if we push back on on the number of new IRS agents and auditors, we were going to undermine the revenues.
▶ 1:11:27And yet a different approach that focused more on technology because there there was a willingness to focus more on technology here on this side of the dis than there was with just hiring more people that actually even uh in the best of scenarios did not come come to be thank goodness I might add but we are in a situation now where in 2017 we did what was right and I'm glad that there was bipartisan support to extend end a
▶ 1:11:57lot of what we did in 2017 that did not have bipartisan support then now that didn't pass the Senate. We are where we are and now heading into a a situation where what we have at hand with this reconciliation bill is good for workers. It's good for workers.
▶ 1:12:17It's good for economic expansion and and uh encouraging investment and increasing productivity so that we can grow the economy without triggering inflation. President Biden was warned not to push more spending by Democrats, I might add. I think of Mr. Summers primarily advising against that did it anyway. We are still paying the price.
▶ 1:12:44We're trying to dig out from a lot of that and and that's why we're doing the bill that we are. Uh and gosh, I I have other things that I'd love to ask questions on, but I I think it's important to realize that we need to deal with reality here. That's what we are doing. And uh Mr. Secretary, thank you.
▶ 1:13:03I look forward to further conversations whether it's trade, whether it's IRS, whether it's uh various things that we need to do to get our country to a better place realizing that the solutions are really in the private sector and triggering everything we can on on our side to to encourage the private sector to provide more opportunity. Thank you. I yield back. Thank you, Mr. Thompson. Thank you, Mr. Chairman. Mr. Secretary, thank you for being here.
▶ 1:13:29You know, the economic outlook of the United States has soured a bit since President Trump assumed office. We've gone from record lows in unemployment, historic growth and lowering inflation to unprecedented trade wars, volatile markets, and low consumer sentiment. And for the record, Mr.
▶ 1:13:46Chairman, I would like to enter surveys from consumers from the University of Michigan, a uh trade war uh impacting the shipping economy and the OCED uh uh article on the uh downward uh turn uh in uh economic turn in the US. Without objection. Thank you. Uh this is only made worse by the Republicans big ugly bill and the administration's proposed budget. I have a few items I want to raise with you, Mr.
▶ 1:14:16Secretary, but given our limited time, I want to focus on the projected impact of the reconciliation legislation. Economists from the CBO, the JCT, the University of Pennsylvania, Yale University, the Committee for Responsible Budget, and the Bipartisan Policy Center have all projected that this legislation will add trillions of dollars to our national debt.
▶ 1:14:43Experts have also projected that close to 16 million Americans will lose access to their health care and 11 million Americans will lose access to nutrition benefits. These figures aren't coming from Democratic talking points. They're coming from economic experts with years of expertise. Yet, Mr. Secretary, you have time and again gone public and said that you dispute these claims.
▶ 1:15:12I believe you're a very intelligent and very competent individual. You're a Yale graduate, an adjunct professor, served as the managing partner of the George Soros Fund Management Office in London, and led Keysquare Capital Management, a global hedge fund, and you're a billionaire. So the question I have is why is it that you seem intent on disavowing any and all expert opinions that are inconvenient to your political agenda?
▶ 1:15:42Unfortunately, it strikes me that you are hellbent on ignoring the warnings of any independent experts whose opinions may not serve your goals. When you worked in finance and your analyst told you that a proposal was a bad idea, I suspect that you listened to your analysis and didn't just accept the deal because the person proposing it said they were wrong and that their deal was a good deal. That would be wrong.
▶ 1:16:12It would be irresponsible and it would be dangerous. I would submit that in the position that you have now, it is even worse. It's more wrong. It's more irresponsible and it's more dangerous. Mr. Secretary, can you point to one independent study, one study performed by an expert PhD economist who is not on the payroll of this administration that says that this legislation will not add to our national debt?
▶ 1:16:45Well, Congressman, if yes or no, can you point to one? If we want to look at the CBO, which No, I'm asking you is is there an independent expert that you can point to that says that this bill will not add to our national debt? Yes or no? Yes, there is. Yes. What are they? Art Laugher. Pardon me? Art Laugher. Art Great.
▶ 1:17:14That I I don't think that one counts. Uh, Mr. Secretary, did the uh 2001 Bush tax cuts add to our debt? Sorry. Did the 2001 Bush tax cuts add to our debt? Yes or no? Again, Congress. Yes or no? I I think it's important to look at framing here. I'm reclaiming my time. It's clear that you're not going to answer the questions that are asked. And let me make it real simple for you. The Bush tax cuts added to the debt.
▶ 1:17:45The second round of Bush tax cuts added to our national debt. The last Trump tax cuts added to our national debt. And every expert will tell you that the proposed Trump tax cuts will also add to our national debt. That is the honest answer.
▶ 1:18:03And I would have expected you could have just given us a yes or no on whether or not these preposterous tax cuts that will benefit clearly the most wealthy people, the people who don't need a tax cut in this environment will add to our national debt. This is bad public policy. It's bad for the American taxpayers. It's bad for our economy and it's atrocious for our future in regard to the national debt.
▶ 1:18:33And I yield back. Next, we have the chairman of our tax committee, um, Mr. Kelly. Thank you, Mr. Chairman. Thank you for holding the meeting, Mr. Secretary. Thanks for being here today. I I u we get into these back and forths and it comes down to who struck John. I think both sides of the aisle can talk about things and policies in the past that caused wherever we are today to be wherever we are today. The question isn't about the history of how we got here. The question is how do we remedy it?
▶ 1:19:03How do we fix it going forward? Uh, I'm from the private sector and and I really do believe before anybody should ever serve in public office, they should have been in the private sector and worked where they got paid on commission only and had lost their job at least once and had faced an in unbelievable task of trying to keep your business open when there was no revenue coming in. So, uh, I really I don't want to grill you and all these things of asking you a question and not allowing you to answer it because that seems to become the thing.
▶ 1:19:31Uh, I'm I'm just I'd rather go back to consistency and certainty. The hardest thing for anybody in the private sector is trying to figure out what the next administration's going to do or what's going to happen at midterms and whether I'm going to make an investment or not going to make an investment because that can change overnight. I get that. I get that. And I'm sitting here now. I'm trying to figure out no wonder hardworking American taxpayers have lost faith in the way we operate. But I wanted I just want to ask you this because I think it's really critical. So, I have kind of a a little bit of a football background.
▶ 1:20:01I I look at this. We're in the fourth quarter now. It's a two-minute warning and no timeouts left. I want you to share with us uh what could happen and forget the PTOIC amnesia about who's responsible for it. Let's go to what actually is going to happen if this bill doesn't get passed. How is it going to affect hardworking American taxpayers? Uh Congressman, good to see you again. It is what we call in economics a sudden stop. It would be cataclysmic. Cataclysmic. It would be the largest tax hike in history.
▶ 1:20:32It would be a disaster for businesses, for working Americans, the and for our status in the world. That to have this happen, we would see increases in taxes on thousands of dollars of working Americans. we would see business contract and we would see a substantial increase in the unemployment rate.
▶ 1:21:01So, as you look at what what's taking place right now and and I think there's always the back and forth about uh do these tariffs work, do they not work? Just from a standpoint, your background is incredible is is incredible for you to be in this position today. So, I want to thank you for doing that because you stepped out of a pretty comfortable life where people weren't firing questions at you and not allowing you to answer them just going forward.
▶ 1:21:23Just going forward and you told people just now what's going to happen if we don't get this So, what is it that in addition to what we could do that we're not already Uh, Congressman, it is certainty and permanence. As we have seen the corporate tax rate is permanent. That is we are not arguing on that here. Businesses have great certainty.
▶ 1:21:52Households do not. Small businesses do not. And this administration, myself especially given my small town roots, they are laser focused that Main Street can do well here. And Main Street is a series of small business owners who work every week to make payroll.
▶ 1:22:19On average, nine employees, and this would be cataclysmic for them. On the other side, having permanence, being able to invest, being able to hire more workers, the being able to expand, the will lead a main street resurgence. We will also see a manufacturing resurgence.
▶ 1:22:45Approximately 9% of Americans are now engaged in the manufacturing sector. History has shown us that wage growth occurs more readily in the manufacturing sector for workingclass Americans than in the service sector.
▶ 1:23:03So, the combination of small business and manufacturing along with the president's tax agenda for no tax on tips, no tax on overtime, a tax cut for seniors, and the ability to buy a new Americanmade car and deduct the interest that will solve this horrendous affordability crisis. Because the way to think about it, Congressman, we are dealing with two things here.
▶ 1:23:33We are dealing with affordability and we are dealing with inflation. Affordability is the stock of inflation. And we are working to pull that down. That can be pulled down two ways. Through price levels or increase real wages. I think we can do both. But the real Phillip here would be increase real wages for working Americans.
▶ 1:23:58On the other side, we just saw the uh yet another fantastic inflation number. Much of that due to decrease in energy Thank you for being here. And again, for you to step out of your private life was very comfortable to step into this arena. I can't tell you how much I appreciate it. Thank you for so much for being with us today and your service. We appreciate it. Thank you, sir. Thank you, M. Mr. Larson. Thank you, Mr. Chairman, and thank you, Mr.
▶ 1:24:25secretary for coming before the uh committee as well. Uh it's it's pretty clear and now who needs to get into arguments when you need answers and um but you can see the frustration on this side.
▶ 1:24:44I appreciate your loyalty to the president and understanding your responsibility, but it seems pretty clear that in the time that we're given to ask a question, etc., the reason that people are seeking yes and no answers is because of the time that's allotted. Has nothing to do with uh you personally or whatever. You're obviously very bright and intelligent. Uh so, Mr.
▶ 1:25:13Secretary, would you agree that um I give great credit to Representative Massie who stood on the floor and addressed the uh Congress during the debate on this bill and he never criticized the president. He never criticized a fellow Republican. What he did was address the facts and he laid them out very clearly.
▶ 1:25:41Let me uh quote what he had to say here. This bill is a debt bomb ticking. Congress can do funny math, fantasy math if it wants, but bond investors don't. This week, they sent us a message.
▶ 1:26:00Moody's downgraded our credit rating and the bond investors who buy and finance our debt demanded higher interest rates on a 10-year note, 20-year note, and 30-year note. What does this mean? Very soon, the government will be paying 16,000 in interest for uh paying 16,000 of interest interest alone per US What are we telling them instead of taking care of that problem?
▶ 1:26:30We are going to give them a tax break. The frustration you hear up here, of course, is that there's denial that tax breaks don't add to the national debt. Was Moody's wrong?
▶ 1:26:46Was Representative Massiey's assessment I can tell you that uh clearly Representative Massie doesn't understand the bond market and that any 24-hour window as he has just said is incorrect. That I will point out that the US tenure, which I repeatedly referenced, is the only major 10-year bond that has a lower yield this year.
▶ 1:27:15So to has a lower yield today than it did on January 1st or January 20th. German yields are higher. Japanese yields are substantially higher, but US 10 year yields are lower. So I'm not sure what's on Representative Massiey's mind. So Massie is wrong. And Moody's was wrong, too. Uh Moody's even the Democrats say that.
▶ 1:27:43What do you mean even the Democrats? The last time that the US I don't know what what do you what do you have to do with Moody's? You know, in 2011 when the US was downgraded, Larry Summers, then NEC head called M called Moody's a lagging indator. Is Moody's wrong or right? Yes or no? Uh Moody's is a lagging indicator.
▶ 1:28:05and anyone who I can understand the frustration and I appreciate your intelligence and ability to talk over but when we're addressing the American people and we're in a hearing like this someone as bright and as capable as you are could explain to the American people and still remain loyal to the president loyal to the our colleagues on this dis who supported the bill there is a strong
▶ 1:28:35difference of and that's what is being expressed here. Opinion. There's no focus or dedication on the actual facts. We'll find that out. And people on this aisle are saying, "Well, don't worry. There's going to be no impact on kids not getting food, 16 million people being kicked off of their health insurance. That's that's some mirage.
▶ 1:29:04That's some some fictitious notion that Democrats have made up. And this national debt stuff, well, whether it's Moody's, whoever it is who has come out, whether it's the Wharton school, uh, they're all wrong or misguided or uninformed as Secretary Massie was. I yield back. Mr. Schwiker. Thank you, Mr. Chairman. Um, Mr. Secretary, how's the jet lag? been better.
▶ 1:29:34Yeah, it it's better. Look, it's impressive. Um, but I I don't know if you get frequent flyer miles for all this traveling. Uh, no, but I I take my responsibilities reporting to Congress very seriously. No, we appreciate you making the effort to get here. Um, I'm going to give you something that's a little bit different, but it's more um some of the things we specialize with the Joint Economic Committee and those we'd like to actually engage.
▶ 1:30:01This is probably more um technical staff on what we can do to actually there's things we can do policy-wise, um um productwise in regards to moving away from from notes and bills and being able to create some additional interest liquidity on on the bonds. Um moving out in the curve.
▶ 1:30:25Um in with past Treasury secretaries, we've done presentations on everything from Professor Schuler's Schiller's um Trill's idea where it's it's a bond, but actually has a slight attachment to as an equity interest in the US tax receipts.
▶ 1:30:43So therefore it's sympathetic with um tax revenues to things you've actually written about or your team around you have written about um certain you know gold indexes and other things for long-term debt. Um my interest is very much and this is a intellectual conflict many of us in Congress have the substantial portion of growth of debt is demographics.
▶ 1:31:08You know, we don't like to tell people the truth, but we have a dramatic shortage of young people in the country. Um, today, compared to 20 years ago, we have double the number of people 65, but our 18-year-olds are exactly the same as 20 years ago. It's demographics, and we're going to try to make demographics partisan because that's what we do.
▶ 1:31:30How does someone like me work with your team to actually give you product ideas messaging to the markets and liquidity that going along on the curve is is stable and we're going to be there to protect our full faith in credit.
▶ 1:31:53Uh Congressman, you you raised a very important issue and what you're talking about is something called the dependency uh the US is the only major industrialized economy where that ratio is roughly st roughly stable. It is in slight decline.
▶ 1:32:14Many other economies uh Italy, Japan in particular they are seeing the dependency ratio blow out and hence uh their productive capability. Uh we would welcome the opportunity to engage with you and your staff on any ideas that you may have.
▶ 1:32:35Uh right now we are uh committed to the wholesome the regular cadence of Treasury issuance as it is. Uh I would add that in my lifetime and I can't believe you know to to go back to experts we always see you know it's this industrial revolution it's that industrial re I'm not sure we're on whether we're on the fourth or fifth but I do believe that we are
▶ 1:33:05on an industrial revolution an AI revolution that may lead to a productivity that could be very important Mr. executive, you're stealing one of my speeches, but um synthetic biology, um AI, um automation, and that's actually a side conversation on and the actual statistical information of how much of that's going to be labor substitute by automation and therefore we may not get the same wage
▶ 1:33:35growth in the academic literature, but that's that's going to geeking out a little bit. Um my my great interest is I don't believe many of us on this committee have spent enough time whether it be a Democrat in the White House or Republican on debt management and the fact we on this committee have the responsibility to work with you and Treasury to have as much stability in that model because today
▶ 1:34:05we borrow what about $72,000 a second you know outside the math for extraordinary measures. I I haven't done it by second, but I think on on a daily basis, but Congressman, I can tell you the thing that would give us the greatest debt stabil stability is the increasing the debt ceiling. No, because that don't I don't disagree. That is a cataclysmic outcome that we will never allow to happen. Mr. Secretary, absolutely agree.
▶ 1:34:33Um visibility capacity is important but even your own numbers in nine years we borrow about $100,000 a second almost solely driven by demographics health care Medicare and interest I beg of you it's hard to do in front of these microphones because it's uncomfortable to talk about but it's math and it's the reality of what we are as people we need to work together um to provide visibility to these debt markets and with that I yield back.
▶ 1:35:04Thank you. I now recognize Mr. Davis from Illinois. Thank you, Mr. Chairman. Mr. Secretary, today's Secretary Benson appears here to praise the Republican one big beautiful That is the most cruel, draconian, that I've voted on since I've been here.
▶ 1:35:31government I seriously believe should help people and not hurt them. I reject this bill that makes poor people poorer, sick people sicker, and hungry people I reject this bill that rips health care from 16 million Americans with over expected to lose their health insurance
▶ 1:36:03including 102,000 children and 27,000 seniors in my district alone. I reject this bill that threatens my constituent Deborah and her two children whom she adopted from foster care.
▶ 1:36:23The picture behind me shows Deborah's children who are medically fragile and rely solely on Medicaid for their health I reject this bill that will close in my district and kick people out of their nursing homes.
▶ 1:36:45Not only in my district, but across the country, especially in urban inner city communities and rural communities for sure. I reject this bill that explodes poverty and suffering while giving wealthy trillions in tax cuts.
▶ 1:37:09And I reject this bill's irresponsible explosion of the deficit that triggers statutory cuts to critical programs supporting children and families.
▶ 1:37:23These payo reductions would eliminate funding for the maternal infant and early childhood home visiting program known as MACV that have proven to improve mother and child health family safety and child development.
▶ 1:37:43It would eliminate the guaranteed funding for the Mary Lee Allen Promoting Safe and Stable Families Program that we know helps prevent child malreatment and strengthen families.
▶ 1:37:58It would eradicate the social services block grant that provides substantial investment in child care, child welfare, and adult protective These egregious cuts alone will cost Illinoisans over $72 million and hurt Illinois children, seniors, and I reject this bill that gives tax cuts
▶ 1:38:29to the wealthy paid for by denying and poor people, senior citizens, sick people, unhealthy people, the health care, food assistance, housing assistance, and economic development opportunities that they This bill reminds me that there is
▶ 1:39:00rotten in Denmark. There is something wrong with the thinking that puts such a bill in front of us. This bill is actually what we call the Robin Hood in reverse. Take from the poor. Take from the disabled. take from the sick, take from the hungry, and give to the wealthy.
▶ 1:39:29It is not good. It is immoral. I reject it, and I yield back the balance of my time. The gentleman yields back. Uh, Mr. Leood is recognized for five minutes. Thank you, Mr. Chairman. Um, Mr. Secretary, uh, thank you for being here. Thanks for your service to our country. Um, I would argue, Mr. secretary that President Trump got elected last November on two issues.
▶ 1:39:53Uh fixing the unmititigated disaster at our southern border and fixing the economy and obviously you pay a play a big role in um in fixing the economy and working with us on that. go back a year ago, uh we had high inflation, high interest rates, uh unaffordable energy costs, supply chain frustrations, and that factored in into people going to the polls and wanting a change on the economy.
▶ 1:40:19And as we think about the bill that we've put together, the one big beautiful bill, uh there's lots of things in this bill that help this economy. Uh but fundamental to that is making permanent things like 199A, bonus depreciation, research and development tax credit, the affordable housing tax credit, unleashing American energy, all included in this bill. And I think we predicate this bill on how do we have predictability and certainty long-term in this economy.
▶ 1:40:48and those investments that are made by small, medium, and large companies, whether you're a a plumber in Peori, Illinois, or you're a Fortune 100 company, you want predictability and certainty. And as been alluded to earlier, if we do nothing and this bill doesn't pass, you're going to have $4.5 trillion of tax increases. And if you think there's uncertainty in the economy now, wait until that happens.
▶ 1:41:12And so, um, the the other, uh, I think observation that's been made is there's a lot of money and resources sitting on the sidelines waiting to be invested, but we need that predictability and certainty, and I would argue we do that in this bill. I wanted to ask you if you can comment on what this bill will do to the economy and uh, on predictability and certainty. Good, Congressman. Thank you for that.
▶ 1:41:39And I I would also like to talk about what this bill will not do to the economy because what we saw in the tax bill of the under the Biden administration, which I believe was immoral, was rampid inflation, rampid inflation, which is the best way to steal from working Americans.
▶ 1:42:02and the basket of goods and services that working Americans require had a substantially higher inflation rate than the 21% reported by the Bureau of Statistics. So in excess of 30% of purchasing power was stolen from working families. We had in the summer of 2024 we had a record amount of food bank usage in the United States of America.
▶ 1:42:31At the same time that the previous administration's tax bill, the we had a record number of trips to Europe and that is not an America. We want record trips to Europe, record food bank usage. So anyone who voted for that tax bill, that was the outcome. What we are doing is trying to get back, as you said, to President Trump's private sector job growth creation.
▶ 1:42:58And the tax bill will incentivize private sector growth. Equally important, this administration's economic plan is a three-legged stool. It is trade, it is taxes, and it is And what we saw under the Biden administration that created the great inflation was we saw a the impetus in spending as the government flooded the
▶ 1:43:28zone but we saw substantial regulatory increase. So a demand shock was met with supply constraints. What we are doing the with the help the of this committee the and congressmen like you, we are create creating a private sector demand shock that is going to be met with a deregulatory release.
▶ 1:43:55So we will go back to 2018 and 2019 we will have strong growth and will be non-inflationary. Thank you Mr. Secretary. I yield back. Thank you. Uh, Miss Sanchez is recognized for five minutes. Thank you, Mr. Chairman. Welcome, Mr. Secretary. Um, there was no tax bill passed during the Biden administration, and I know that because I served on this committee during that administration. So, I just wanted to clarify that.
▶ 1:44:21Um, and in the interest of time, because we our time here is limited, I'm going to ask you to please limit your answers to yes or no questions, and I'm going to jump straight into those questions. Um, Mr. Mr. Secretary, do you still believe that the president's tariffs are going to be a one-time price adjustment for American If if prices go up, they will be one time. Okay.
▶ 1:44:44Well, unfortunately, you appear to be talking out of both sides of your mouth because you yourself have admitted after conversations with Walmart that some tariff costs are going to get passed on to consumers. And in fact, we've already seen that prices are rising on many everyday goods. Congress, Congresswoman, please don't interrupt me. The time is mine. The time is mine. Please don't interrupt me. I will ask you questions and I will grant you an opportunity to answer them, but please don't interrupt me during my time with Okay.
▶ 1:45:14I know I'm a woman, but please try to limit yourself to answering my questions. No, I'm sorry, but we get talked over all the time and I and I don't want that to happen at this hearing. I would remind members, the gentle lady is recognized. Please proceed. Thank you. The time is mine. Clothing is going up 20%. Shoe prices in canned goods like chicken noodle soup and canned fruit and microwave meals have gone up 15%. Toys are getting more expensive.
▶ 1:45:42Walmart just raised the prices of dinosaur action figures by 38%. And baby born dolls by 43%. Household goods like drills, tool kits, vacuums have also gone up. Stanley Black & Decker recently announced higher prices for all of their products. And these are just some of the products that are affected. On average, Trump's tariffs are estimated to cost households $3,000 more for the same goods than they would have last year. And that's money that could be going that that's incorrect.
▶ 1:46:11And I'm not sure who estimated the best estimates are that consumers will pay $3,000 more for the same goods. And that estimate is from that they did last year. That estimates from who? I will get you I will get you the estimates, right? because but that's money that but that's money that could be going to paying goods or paying rent and groceries and it's clear that Trump's trade wars are hurting American families.
▶ 1:46:38Um yet all we have to show for the economic pain are rule news reports of these flimsy trade deals and I understand Mr. Secretary that you are co-leading the China trade negotiations. Do you think that China is a reliable trading partner? Uh, I think we will see.
▶ 1:46:56Well, um, pardon me for being skeptical of this administration's ability to get anything meaningful out of trade negotiations with with China because this administration is too swamped with trying to negotiate with 90 countries around the world. And to me, a poorly negotiated trade deal with China is probably not worth the paper that it's written on because this is China's t tax or this is China's track record. These are facts.
▶ 1:47:21In the Trump administration's phase one trade deal, China promised to increase purchases of US goods and services by $200 billion over two years. Countless reports and you yourself have noted that China has failed to meet these purchase commitments. Those were purchase commitments that were negotiated by Trump in his first administration. They met their agreements under President Trump in 2020 and President Biden did not enforce them and the Chinese delegation.
▶ 1:47:50Told me that they did not believe they needed to adhere to I'm reclaiming my time. That's incorrect. China has also not made the structural reforms that they promised Trump that they would. Many US companies still reported widespread intellectual property theft and counterfeiting. So, excuse me if the last attempt by the Trump administration to secure meaningful change from chi China doesn't exactly inspire any confidence in the current negotiations.
▶ 1:48:17And you know, quite frankly, negotiating trade agreements with China requires more time and effort than this administration has given so far. And that's why I was alarmed to hear this morning that Trump said that the US China deal was done after just two days of talks in London. Mr. Secretary, the press release on this so-called deal looks more like a framework. Congress, who has the constitutional authority over trade, needs the details of this supposed deal.
▶ 1:48:46So, I'm asking if you will provide this committee with the actual details of this deal. Um, because there has been, unlike what was said earlier, there has been no consultation with with our side of the aisle at least on the China negotiation. Will you commit to giving us the specifics of that deal? The details. The Congresswoman, I flew back at 4:00 a.m. this morning to be here this morning and we are a simple yes or no question. No, it is not a simple yes or no question.
▶ 1:49:15We are in in the midst of constructing it. And back to your question, China has proven an unreliable partner in strategic. Will you commit to consulting with us on trade deal with China? Gentleoman's time is expired. I would ask the witness had to answer that last woman's time has expired. I never yes or no question. It's very simple.
▶ 1:49:37Representative, I raised many of your concerns to the Chinese delegation and it will be a longer process the trade deal today or last night. The was for a specific goal and it will be a much longer process. And I will note that the previous administration did nothing. But excuse me, the recogn's time. Five minutes. Mr.
▶ 1:50:06Secretary, thank you for your service. Uh I think my best contribution now in five minutes is to separate fact from fiction and help debunk some of these tired old baseless and false claims from my Democrat colleagues. Let's start with Miss Sanchez and her claim that they didn't pass the tax bill. That's not wrong. That is completely false. The inflation reduction act was a tax and spending bill. They levied taxes on corporations. They increased taxes on stock buybacks. It was a tax and spend bill. We marked it up in the tax committee.
▶ 1:50:37What you won't find though, Mr. Secretary, is a tax increase on the billionaires. You won't find a a tax increase in their tax bill on millionaires. They didn't raise the tax rate for the top 10%, the top 20%, the top 30%. They didn't raise taxes on their millionaire. They didn't create the wealth tax that they're going to criticize us for.
▶ 1:51:02In fact, in fact, we're preventing the all marginal rates from increasing by extending the tax cuts and jobs act and including the top rate from going to 39% from 37. They didn't increase it from 37 to 39%. They had total Democrat control and they didn't do it. Fain indignation is what that is. Now, let's go through some more facts.
▶ 1:51:27If we don't pass the Tax Cuts and Jobs Act, because they're successful in stopping it, there'll be a 22% on average tax increase for all Americans. Is that true or false? True. They'll lose about five $6,000 the median household income. They'll lose about five $6,000 of their family budget. True or false? At least that amount. Tax Cuts and Jobs Act. Did did the top 10% uh did the top 1% pay a greater share of taxes after the tax cuts in job?
▶ 1:51:57A much higher percentage, sir. Did did the did the top 1% that paid 38% of the entire cost of the federal government actually after TCJA pay a higher uh percentage of the cost of the federal government going from 38% to 45%. True or false? Yes, sir. 7% more. And and and the and the top 10% was paying 70%. Top 10% earners in this country pay 70% of the freight of the federal government after the tax cuts and jobs act.
▶ 1:52:26They were they are now paying 75%. Is that true or false? It is correct. So uh the the another false claim during the Tax Cuts and Jobs Act passage was that that this was a tax cut for the rich and for corporations. Is it true or false that the Washington Post gave the Democrats four Pinocchio saying three out of four dollars in the tax cuts benefited individuals, not corporations? I don't read the Washington Post. Well, they gave four Pinocchios.
▶ 1:52:52Even the Washington Post could not tolerate that uh uh misleading and false claim. The top the bottom 10% wages grew twice as fast as the top 10. True or false? After the Tax Cuts and Jobs Act? Uh yes, sir. And household net worth increased substantially faster for the the bottom. True or false? Did the poverty rate sink to an all-time record low after the Tax Cuts and Jobs Act? Yes, sir.
▶ 1:53:22Did we have the lowest unemployment rate among minorities and women after the Tax Cuts and Jobs Act? Yes, sir. How could these things be true and what they're saying true, Mr. Secretary? Uh I I will leave that to to the American people because these are this is empirical data who had a referendum on November 5th. They sure did. And this is this is empirical data. These are verifiable facts. Now let's let's move to this notion.
▶ 1:53:52I got a minute left that somehow we've increased the national debt in the one big beautiful bill act. Uh forget for a minute that they under their control uh full Democratic control added $8 trillion and under uh President Biden $8 trillion to the national debt. 40-year high inflation.
▶ 1:54:13Soaring interest all because their failed economic policies, paying people not to work, expanding welfare without work requirements, taxes, barrage of regulation, record regulatory cost on small businesses, and the list goes on. Okay. And we've all suffered, especially working people. As you said, it was a regressive tax, that 20 plus% increase in the cost of essential goods and services.
▶ 1:54:38But if you take CBO's static scores, the cost of the bill is about $4.16 trillion. If you take the 1.7 trillion in savings, the largest spending reduction in the history of the United States by twofold, and you put a conservative growth rate, because CBO's growth rate is 1.8 in their baseline, that 1.8 is based on the last four years of failed economic policies and unbridled spending.
▶ 1:55:05It's not based on the policies embedded in the one big beautiful bill act. President Trump grew the GDP by one percentage point for 1.8 to 2.8. Even Joe Biden had an annual average of 27. We put 26 in there as an assumption which yields $2.6 trillion. The net effect is we reduced the deficit and then some. Yes, sir. Thank you, Mr. Secretary. I appreciate you being here. God bless America and go West Texas. The gentleman's time is expired.
▶ 1:55:35I now recognize Miss Su for five minutes. Uh thank thank you Mr. Chairman and and welcome um Mr. Treasurer U Secretary of the Treasury. Um I actually uh with all due respect only get five minutes. So I'm going to ask my constituents have sent me a list of questions that they just want yes or no answers to. And out of respect for the time and the fact that the that they want some clarity, I hope that you'll just say yes or no.
▶ 1:56:01Um, the first question is, will the big beautiful bill add to the national debt? Yes or no? Is that a yes or a no? That's a no. Yes. Sorry. What did you say? I'm sorry. The it it remains to be seen.
▶ 1:56:20Well, I mean, look, the CBO, the Congressional Budget Office official score of this bill, uh, says that it increases the federal uh, deficit by $2.4 trillion. Sorry to interrupt. Congresswoman, the CBO also said the tariff income over the 10-year window would be 2.8 trillion. So, that would be, you want to talk about dynamic scoring and all that. There's nothing dynamic about that. You're quoting the CBO. I'm quoting the CBO.
▶ 1:56:49So let let's level set. We can level set. But the reality is that I have constituents back home who are really scared. They're scared that prices have gone up. This administration is has promised that prices will go down. That's absolutely has not occurred for them. And every time they hear the word tariff, they think of the fact that it's another tax on them that will be passed on to them for goods and services.
▶ 1:57:15Uh at any rate, not only did the CBO um say that they it will that this bill will increase the deficit by 2.4 trillion, um the committee for responsible federal budget said 2.5 trillion. Uh the Yale budget lab 2.4 trillion. The point I'm trying to make is that um you will add add to the national debt over the span of this time.
▶ 1:57:38Um the second question that they wanted me to ask is will all Americans have a net benefit from this beautiful big bill? It is my my it's difficult to yes or no. I again it's impossible to say all Americans that three it is ridiculous for me to give an answer for 337 million.
▶ 1:58:00I can tell you what a lot of I can say the balance of probability is is that Americans will will get a substantial increase especially if you're referring to working people in your district uh they should do very well as they did the tables tell us um you know the distribution tell the the numbers don't lie the average task cut in 2027 for people in this bill making $1 million is about $81,500.
▶ 1:58:32So, someone who makes a million and no one in my district makes a million to my knowledge um will get a tax increase will get a tax benefit of of $81,000. That's $223 a day.
▶ 1:58:46Now, the average uh tax rate uh in 2027 for people making under $50,000, which in my district is about 63% of the people that I represent, they will only get a tax break uh or tax uh increase of $265, which is 73 cents per day.
▶ 1:59:06Um that's pittance when you think about the fact that um the IRS which you have been this administration has decimated closing field offices everywhere uh laying off or or or or taking or or um dismissing thousands of workers from the IRS.
▶ 1:59:24Uh the folks in my district often get um um you know bombarded with uh inquiries about their earned income tax credits and billionaires that are going to get $81, uh $500 more uh don't. So I I mean the point that I'm trying to make is that not all Americans will benefit the same. We know that because people make different things.
▶ 1:59:46But the fact of the matter is, if you're only saving me $268 and you're taking away my health care, you're taking away my health, which 16 million Americans will have no health care will lose their health care. And they have to lose their health care in order for you guys to actually pay for your bill. I mean, to pay for your bill by kicking people off uh health insurance and giving them no health care to me is immoral and not fair.
▶ 2:00:13Um the last question that I was asked to um uh to ask you was when will we hit the debt ceiling? I know that this big beautiful bill also means a debt uh increase in the debt ceiling and frankly I heard you say that that is something that's an imperative. I would agree with that. When do we uh foresee us hitting the debt ceiling? Congresswoman, I I want to congratulate you. You have a very sophisticated constituency to ask questions like this.
▶ 2:00:41uh that the the so-called exate is a with all due respect just because you're poor doesn't mean you're ignorant. Uh, as I said, very sophisticated. Yeah, it was a Can you answer the question? I'm in the I'm in the habit of saying I'd like to know whether habit of saying thank you to compliments u that the the so-called X date is a moving target. So when do you for I mean you're the you're the secretary of transport.
▶ 2:01:09So tell me when do you predict given where we are right now we will hit the ceiling? Some point in the middle to late summer. Is that August, July? Again, it it is imprecise. Well, sir, I just think that it is it is an abomination that we are actually giving bigger tax cuts to the wealthiest Americans who don't need a tax cut. The gentleoman's time. Meanwhile, we're taking away food assistance and health care from people who desperately need. Gentleoman's time.
▶ 2:01:40I now recognize Mr. Estus for five minutes. Well, thank you, Mr. Chairman and Secretary of Ascent. Thank you for being here. I know you uh uh have been very busy in the last two days and appreciate you coming back with uh struggling through the jet lag that you're uh you're you're obviously feeling. I I just want to I I have some remarks here. I just want to throw out a couple of comments that uh have been talked about.
▶ 2:02:01I mean, and I believe you you mentioned this earlier, is that after tax cuts and jobs act, the top 1% went from paying only 40% of the tax burden to now paying over 46% of the tax burden. So, as we've put in this good tax cuts and jobs act, the top 1% are actually paying more.
▶ 2:02:23And uh I know a lot of questions from the other side of the aisle have talked a lot about the deficit and uh as you mentioned in your early remarks uh the country's been fairly consistent in in maintaining tax revenue at about a 17 to 18% of of GDP. Uh unfortunately the problem we're dealing with now is spending has ballooned up to roughly 23% or 24% of GDP which is creating that problem that we we have an imbalance. So I I I really want I have several things I want to cover.
▶ 2:02:52Uh first I want to talk a little bit about section 8.99. Um it's a common sense provision that's based on two bills that uh chairman Smith and I introduced. Uh it's not new. It's not revenge as some in the media have been proclaiming and in wailing about the last the last few weeks. Uh it's a reasonable approach to uh make sure that foreign countries don't pill for the US Treasury with UTPRs or or DSTs. And the fact is, if we do nothing, we're seating our tax authority to other countries.
▶ 2:03:20And the JCT is warning us that we will lose 122 billion in tax revenue over the next 10 years. Ways and Means could have responded with much more severity in terms of the bill that we looked at. We took a measured approach that maintains our tax sovereignty and that uh either discourages our uh allies from moving forward with these discriminatory taxes or will raise our tax revenues by 116 billion over the next 10 years. Um I'd like to submit, Mr.
▶ 2:03:47Chairman, for the record an oped uh from Bloomberg that covered this topic. Mr. Chairman, object without objection. So order. Thank you. Um, Secretary Present, um, are are the fears that Wall Street has over the 8.99 grounded in truth and what's behind the stir and why wasn't there outcry from the uh Wall Street and economist uh during the last administration working with OECD to in a manner that put America last?
▶ 2:04:12Uh sir, I I believe that there is quite a bit of misinformation on 8.99 and I also believe that if businesses came back, took a deep breath and much of the push back is coming from overseas companies and overseas companies are worried that their countries may try to usurp US authority.
▶ 2:04:41So if a European country they try to unfairly tax a US company or take money away from the US then it would be it would fall perhaps on that corporate. So they should look to their own capitals. This is a fiscal bill not a revenge bill. Right. I agree with that.
▶ 2:05:09I think I think that some of these companies need to be lobbying their own government instead of trying to lobby 100% Congress administration. Um something else that I've been pushing over the the last six years has been research and development expensing. Uh Mr. Chairman, I'd like to submit this Wall Street or this uh Washington Examiner OpEd titled, "We're a nation of innovators, but our tax code no longer encourages it." Without objection. So order.
▶ 2:05:33Immediate expensing for research and development is a jobs provision with threequarters of re R&D expending uh spent on wages and salaries. Also has broad bipartisan support. I believe we need to provide businesses with certainty by making uh immediate write off a permanent uh because it takes longer than four years to actually develop more new new methods methods and technologies.
▶ 2:05:55Uh, Secretary, can you help explain why it's critical for our country to return to immediate R&D expensing uh hopefully on a a permanent basis as we finish this bill? uh sir we are the technolog undisputed technological leader in the world from AI to life sciences and one of the reasons for that the is has been the expensing of R&D and we are pushing very hard to make this the best location for uh whether
▶ 2:06:26it is high-tech investing whether it is biio medicine or any other what the manufacturing process that we want to bring back. Uh part part of the problem I believe is that the manufacturing process has been separated from the R&D process. So we need to have both of them here sitting side by side in the United States. Yes. Thank you. And there there's so many other provisions I could do, but I'm I'm out of time. Mr. Chairman, I'll yield back. Thank you. Thank you.
▶ 2:06:55Uh Miss Delenny is recognized for five minutes. Thank you, Mr. Chairman. Thank you, Mr. Secretary, for being here. Um Mr. Secretary, do you support the government having a consolidated database containing Americans sensitive financial health and personal information? Uh, I I support protecting Americans. Do you support the consolidated database?
▶ 2:07:17I I I support protecting Americans personal information based on I think it's very concerning that you're not able to say no. This is not a partisan question. In fact, just last week, um, Republican Representative Warren Davidson responded to reports that Doge is merging huge sets of data from across federal agencies into a centralized repository.
▶ 2:07:42He said, "It's dangerous when you start combining all those data points on an individual into one database. It's a power that history says will eventually be abused." End quote. Well, I could not agree more and would also add that this kind of database would be a gold mine for malicious actors who are eager to exploit American sensitive data. Um, and um, and Mr.
▶ 2:08:07Secretary, SEC, section 6103 sets forth the confidentiality and disclosure rules for tax returns and tax information. Just because Doge wants to compile people's sensitive information into one place doesn't mean the confidentiality rules go away. Is that We adhere to 6103. So it seems like you know that's should be a simple one too.
▶ 2:08:33Um we should absolutely be clear that the confidentiality rules did not go away. In fact, earlier in this hearing, you asserted that the Treasury Department is following, I think you said, the proper provisions within the Privacy Act. Um, all proper provisions within the Privacy Act and section 6103. So, my question for you is how can we be sure that's happening?
▶ 2:08:56I mean, especially knowing that the president illegally fired 18 inspectors general, including Treasury, acting Treasury IG uh Sherba. Um, how do we know? I I'm sorry you're just you saying that isn't good enough. We're an oversight body. How do we know? Uh, again, I will say that we are following the law the and that but but we need that's not good enough. Uh, Mr. Secretary, you should be coming.
▶ 2:09:25We should have officials within Treasury coming. We should and this is a statement to my colleagues on the other I'm here today. But you're not answering how we know that. You're just saying we are what what would an acceptable then let's bring then let's bring people who are building a database let's go through the details of exactly what you are doing with that data what protections are in place that we should have hearings doing that in fact we requested hearings on this from our partners on the other side of the aisle um refused to bring
▶ 2:09:55people from doge etc into this committee so we can be sure that that congress a consolidated database a a judge in the southern district of New New York has ruled that all of our protocols are Mr. Secretary, we are a co-equal branch of government. We are the oversight body. I'm answering I asked that question because it is part of my job not to have you just word and a judge's word how to satisfy.
▶ 2:10:22I think because we actually have the authority to get that detail. We are oversight. We are not just here to have you say don't worry about it. We are here to get detail. And I want you to be clear that it helps this is a risk to the American people. This is sensitive personal information. Um there is no clarity on how this is being protected. Um early on in this administration, people are given access to information with no controls. We have not had folks come into hearings. That's not good enough, Mr.
▶ 2:10:52Secretary. And I'm supportive of making sure that we are using technology in smart ways. I'm also very supportive of making sure that we are protecting people's personal information and we are following the law 6103 is clear and there is no and now this consolidation there's no approval on how this consolidation takes place and you can't even be clear to me that you that you know you're you're about where you stand in terms of making that happening.
▶ 2:11:19So I don't think representative may maybe it did not filter up to you but we provided a staff level briefing several weeks ago. Then let's bring folks I want to ask the questions frankly it's not about whether or not you had a staff level briefing. Let's bring experts to answer detailed questions in this in this body um so that we get those answers. You know I have a technology brown background.
▶ 2:11:44I'm happy to have those detailed conversations of exactly who's given access, how that access is given, um, and how we are making sure that information is protected. Um, we absolutely have to make sure that there are no violations that PE there are, um, there are the right protocols put in place. We have no data to say that we just have, you know, you're saying just trust me, it's okay. That's not good enough. And judge in the Southern District of New Gentleoman's time is expired. Mr. Chairman, I yield back. I now recognize Mr.
▶ 2:12:14Smucker for five minutes. Thank you, Mr. Chairman, and thank you, Secretary, for being with us and congratulations on what uh appears to be a a great deal with China potentially and a reset of our relationship and a deal that'll be great for American business. An excellent start, Congressman, but a start. Yeah.
▶ 2:12:34Um, I'm really uh continue to be proud of the work uh that we've done with the Tax Cuts and Jobs Act, the impact that it had on my constituents where average families in my district saw an increase of about $6,000 in their wages in the years following that inflation was low. I'll put up any day the record of the previous Trump administration with what we've seen, the disaster that we've seen in this past administration.
▶ 2:13:03And so grateful to have the opportunity to work with you to extend those benefits once again uh to every American. And I we're hearing a lot from the other side here today on things that just simp they're falsehoods about the bill, things that are not in this bill. And I just want to remind our listeners what Democrats are voting for by voting against this bill. They will be voting for a vote against this bill is a vote for the largest tax increase in American history.
▶ 2:13:33A tax increase that will affect average households at every tax bracket level. They're voting for a a decrease, in fact a 50% decrease in the child tax credit, which is so important, provides important relief uh to uh every American family. They're voting for allowing Medicaid dollars to go to people who are here in the country illegally at the expense of American citizens. Yes, sir.
▶ 2:14:021.4 million of them. And they are voting to allow Medicaid dollars that are intended for people who really need them to go to individuals who could be working but choose not to. They they are voting for Medicaid benefits not to go to women and children as they should. They're also voting against policies they voted for before that will be critical to to grow this economy and provide additional opportunity. Policies like full expensing.
▶ 2:14:32They voted for that uh uh last cycle uh or or last session. Uh full deductibility of R&D uh full expensing. I mentioned full expensive. And then we're adding full expensing for structures which will re-energize American manufacturing. all of the things Democrats will be voting against by voting uh against this bill.
▶ 2:14:55Yes, So I just I I want to again say that we're doing all this is going to be beneficial to every American and we're also doing it in a responsible way by finding savings that will drive more efficiencies in some of these programs but will ensure that we will not add to the debt assuming we meet very um
▶ 2:15:25I think um conservative estimates on growth. Do you agree with that? Uh yes sir. And to go back to the the CBO uh the the CBO produces a black box and that black box says the growth is 1.7 or 1.8% 8% whether we make the TCJA permanent and continue and that permanence causes stimulus or as you said whether we have the largest
▶ 2:15:56tax cut in history which would be cataclysmic obviously but it also assumes no change in growth. So obviously both cannot be true. Exactly right. So we're going to do this in a fiscal responsible way. Now, I do have one question for you, and I only have a minute left. One of the things that I was impressed with when um during your confirmation hearings and leading up to your appointment as secretary was your 333 plan.
▶ 2:16:24Uh and in particularly in the short amount of time I have, you have a stated goal at that time at least of getting to uh the deficit at being at 3% of uh GDP, which I know how much you're concerned about the debt. The Democrats today are raising concerns about the debt. I share those concerns. I think that's a great goal. Do you still uh hope to achieve that 3% uh debt to GDP deficit to GDP at by the end of Trump's term? Yes, sir.
▶ 2:16:53It's it's a deficit to GDP, which the other side of the aisle doesn't seem to want to talk about, or the total debt to GDP, uh which Secretary Yelen and I agree on. It it is those two numbers that matter.
▶ 2:17:07the absolute number the while while daunting those two ratios are much more important and I said that we would like to have a three in in front of the deficit to GDP by 2028 the end of President Trump's term which is the long-term average and I think this sets gentleman's time this sets the basis for being able to achieve that there's going to be a lot more work to do and I look forward to working with you that uh to achieve that goal thank you gentleman's time is expired I now recognize
▶ 2:17:38Miss Chu for 5 minutes. Secretary Bessant, my constituents are sick with worry about losing their healthc care coverage. The nonpartisan Congressional Budget Office just determined that more people will lose their coverage. 16 million people will lose their coverage as a result of this big ugly bill, which will be the largest loss of healthc care coverage for people in American history.
▶ 2:18:08Now, Republicans are saying that this will all be accomplished by cutting out waste, fraud, and abuse. But we should not be fooled. This is accomplished by 30 different measures, including increasing the amount of red tape that people will have to go through just to stay on Medicaid and on the Affordable Care Act or the ACA. In addition, the CBO says that this bill will cost Medicare over 500 billion dollars.
▶ 2:18:38I think of the many grandmothers and grandfathers who'd need nursing facilities as they face various illnesses like dementia or Alzheimer's. In my district, 62% of them rely on Medicaid to get any kind of care. But this bill requires all kinds of new paperwork to stay on these programs, including paperwork for seniors seeking to dy enroll in Medicaid and Medicare.
▶ 2:19:05Where will these seniors go if they lose their Medicaid because they didn't file yet another form all while having dementia? This is a life ordeath situation. But I guess Republicans believe as Senator Jodie Ernst said, "Well, we're all going to have to die." And then there is the ACA.
▶ 2:19:28I remember what it was like before the ACA where people could not get health insurance if they had a pre-existing condition like everyday conditions like asthma or even pregnancy. The ACA provided tremendous relief to millions. But this big ugly bill will require even more red tape to stay on the ACA.
▶ 2:19:50It demands that 2.5 million people like gig workers, like Uber drivers who don't even know what they'll earn in a week accurately estimate their income for the next year. It requires people to reenroll year after year rather than having an automatic enrollment, which is not required by any health insurance or Medicare. It reduces enrollment period so it can cut people off the program.
▶ 2:20:15And it takes away the premium tax credits that helped millions of families afford health coverage. And that is why at the hearing for this bill, I introduced an amendment to strike the provisions that undermine the coverage of the ACA. Every single Republican on this committee voted no. So, Secretary Besson, I I'm asking you a question which I only want a yes or no answer.
▶ 2:20:41How would you have voted on my amendment to protect the ACA and keep millions on their health insurance? No. Okay, that makes it clear. And Secretary Besson, I'd like to address the reason that 16 million people are going to lose their healthc care coverage. It's so that millionaires and billionaires can get big tax giveaways and become even richer.
▶ 2:21:06The nonpartisan joint committee on taxation just this week found that if this bill becomes law, the richest 5% of taxpayers in this country will get a bigger tax cut than the bottom 80% of taxpayers combined. to put dollar amounts on it. Someone earning $1 million will get a tax giveaway of in just one year.
▶ 2:21:34While someone earning less than 50,000 can only expect $265 in one year, which is only 73 cents a day. That millionaire will get a tax cut in one day. That's almost as big as what the middle class person will get over the entire year. And of course, this does not account for the burden of paying more for basic necessities because of Trump's tariffs.
▶ 2:22:04Nor does it account for the loss of life-saving benefits like Medicaid coverage or SNAP food assistance. When the University of Pennsylvania included the benefit cuts into their analysis, they found that the poorest 20% of households in this country will lose $30,000 over their lifetime if this bill gets signed into law. It's quite literally a reverse Robin Hood scheme, taking from the poor and giving to the ultra rich.
▶ 2:22:31That's why I had an amendment that said there should not be tax giveaways for those earning more than $10 million per year. And so, Secretary President, I only want a yes or no answer. Would you have voted yes or no on my amendment? Uh, again, I yield back. Mr. Hearn. Thank you, Mr. Chairman. Mr. Secretary, it's good to see you again. Thanks for uh sitting here.
▶ 2:23:00Um, your predecessor uh Janet Yellen uh pushed Congress for the last four years to adopt the OECD global tax deal. I'm grateful that you and the administration have been working to to stop this. There's a lot going on in that space. And as the current global tax deal is formulated, US multinationals are disadvantaged in two critical ways. First, they face two layers of minimum taxes, the existing robust US system and the emerging OECD system.
▶ 2:23:27And two, their traditional incomebased tax incentives face stricter scrutiny against the corporate welfare regimes in China and the EU. The global tax deal fosters a kind of a hunger game style race for government handouts, cash subsidies, and refundable tax credits. The system rewards political connections and authoritarian regimes over innovation. And Mr. Mr.
▶ 2:23:50Secretary, as you know, uh, countries are pressuring the US to sign on to the global tax deal and want to push subsidies out of the income tax system into the hands of bureaucrats, distorting markets, picking winners and losers, and leaving their taxpayers splitting the bill for political pet projects with dismal economic results. If other nations want to tie their economies and knots with that nonsense, that's their funeral. The US should not play the role of global nanny dictating domestic policy to sovereign states.
▶ 2:24:19Countries around the world are free to determine a domestic policy that meets their political and economic demands, but not at the expense of the US taxpayer and our great US companies. My concern, Mr. Secretary, is that there is an on andoff switch associated with the implementation of this global tax deal. A lot of uncertainty of what's happening after your time in office and the president's time in office. The tax sovereignty of this nation is under attack.
▶ 2:24:46The last administration gave away US leverage trying to sell the jurisdiction and purview of this committee to the OECD in Paris. And we must not let that happen. The global tax deal isn't just a friendly suggestion. It's a loaded gun aimed at countries that don't join the cabal. I for one don't want the US to be looking at the end of their loaded gun under the next administration or the one after that. Mr. Mr.
▶ 2:25:13Secretary, will you commit to working with us to put a nail in this coffin on the global tax deal once and for all? Uh, my staff met with the OECD in Paris just last week and we are pushing back and working toward a solution as soon as possible. Congressman, thank you for your work on that.
▶ 2:25:32And and then one last thing, the current tax code has certainly been biased against investments in structures, and I've been working on this issue for a number of years since I've been on Ways and Means, including a bill I introduced that implements a neutral cost recovery for structures. While we should continue to do more in this space to drive down the cost of investment in structures, I know this part of the big plan to get manufacturing back here quickly. I'm happy that we're moving in this right direction.
▶ 2:25:58long depreciation schedules as you know and as you've worked on erode the value of deductions hindering growth on domestic manufacturing. The provision that we included in the big one beautiful bill that allowed full expensings of factories coupled with restoration of 100% expensing for equipment and machinery will be crucial crucial for the proh President Trump's agenda to boost American manufacturing. We're hearing a lot of great things about that. Mr. Secretary, I want to reiterate my thanks.
▶ 2:26:26Certainly our the Republican parties thanks for your immense support in this provision to implement full expensing of factories and I'd like to yield the rest of my time to you to just talk about how that why that is so important to move quickly on this to get it done and what it's going to do for our economy. Uh Congressman, it provides great shity.
▶ 2:26:47uh but more than that it provides the impetus for businesses to uh make capital allocation very quickly and in a way it puts us on an even playing field with the countries that heavily subsidize their industry in the in the United States. We do try not to some some administrations like the past one try to pick winners and losers.
▶ 2:27:16uh we do not we try to set the best playing field and create the best environment. So the shity of immediate expensing is very powerful in terms of after tax return on capital after tax return on capital is what drives this economy. It is what drives productivity and it is what makes the United States the greatest economy in the world. Mr. Secretary, again, thank you for being here. Appreciate your words and I yield back.
▶ 2:27:46Miss Moore. Thank you so much, Mr. Chairman. I'd like to yield uh 5 seconds to the gentle lady from California, Miss Sanchez. Thank you, Miss Moore. I would ask unanimous consent to enter into the record the nonpartisan policy research Yale Budget Lab analysis, which shows that $3,000 cut to household income because of Trump's tariffs. Without objection. Thank you. I yield back to Miss Moore.
▶ 2:28:15The the Yale budget lab is staffed by Thank you. Thank you. This is my time. Biden official. Where's the gavl? Mr. Chairman, he's taking up my Request. Proceed. The clock's moving. Miss Moore. Thank you. I I want to join my colleagues in a bipartisan basis in regaling the life and times of Charlie Wrangle. Uh and actually, Mr. chairman, were he alive today, today would be his 95th birthday.
▶ 2:28:45And you know, even if it weren't his um I would I would have to have thought of Charlie Wrangle at this moment uh and the last real close personal conversation that I had with him when I uh considered your testimony here today, Mr.
▶ 2:29:02secretary and some of the other sorts of uh inquiries and uh comments of my colleagues here when they talked about the averages the average taxpayer is going to receive this or that. It's sort of like the, you know, the example that you almost gave here. You know, one taxpayer gets a million dollar tax refund, another one gets a $1 tax refund, and then the average tax refund is $500,50.
▶ 2:29:34This is I had a Jesuit education, so we learned about the tyranny of averages. You ignore the distribution and outliers. You mask variations and inequalities. It's asymmetrically distributed. It's skewed. because you have heard my colleagues talk about the real impact. Somebody under $50,000 a year is going to get $265,000 um $265 versus others that get millions.
▶ 2:30:04That is not a question. That was my comment. Um okay. So you and were fed uh focused on uh eliminating waste, fraud, and abuse. So, let me just sort of outline some of the waste, fraud, and abuse that you found and tell me yes or no. Was this what you found?
▶ 2:30:21$641 billion uh in subsidies for the ACA, $764 billion in Medicaid cuts, $300 billion in SNAP cuts, and then triggering a half trillion dollars in Medicare cuts. Was that all waste, fraud, and abuse? Yes or no? Uh again, ma'am, it's ve very difficult to give a Those are the cuts. Okay, I'll move on. You're not going to answer.
▶ 2:30:48Um what I'd like to know is the billion in debt uh and the tax increases of $4.5 trillion. Is that not spending? Are tax cuts spending and creating especially not just adding to the debt but the interest rates on the debt. Is that or is that not spending? Yes or no? tax cuts.
▶ 2:31:16If I give you a tax cut, am I spending out of the treasury to do that? Yes or no? Not if we not if we create more income than the nature. talking about a gamblers's fallacy with projecting growth has never been proven by anybody uh uh anything. So I will move on because I see my time is waning. Let me ask you some more questions.
▶ 2:31:40Do you think that a problem we have in our tax code is that we have $700 billion dollars a year uh in a tax gap because t uh because uh you know the very wealthy are evading illegally uh their tax responsibilities. Is that or is that not waste, fraud, and abuse? Would you characterize that as waste, fraud, and abuse? Represent my I mean I'm just a simple question.
▶ 2:32:09Is that waste, fraud, and abuse? My priorities are collection, privacy, and customer. So, but you didn't you're not we're not collecting it. And you're cut you cut 31% of the budget from the IRS that would would have actually, you know, processed these claims.
▶ 2:32:30Uh the largest budget cut was in the IT department that began its the modernization in 1990. Okay. The true cost of economic security billion uh has determined that 50% of Americans are financially insecure. 50% of Americans. So, do you think that any of them are going to suffer from the cuts in Medicaid, SNAP, and ACA, not to have these resources available to them? Yes or no?
▶ 2:33:00I believe that they will be better the better off under this tax bill just as they were under President Trump's last term as they were as opposed to the ravages of inflation under President Biden's term. Well, just let me just ask this. Why is this bill designed to take away some of the benefits that you claim people are going to have? They expire like the senior tax credit expires, the all of these things that these families are supposed to get.
▶ 2:33:28If you're so uh into uplifting their needs, why do they expire? Uh no tax on tips. No tax on tips expires. Sorry, it expires. And it's not really a decrease on tax on tips. you would like to join me in making it permanent and have your You're the secretary. You're the secretary, sir. You You wrote the budget. We would welcome you to join us. Excuse me. We would welcome you to join us. I'm ready to join you right now.
▶ 2:33:58Are you going to accept an amendment? Time is expired, More by over a minute. I was very generous, but wait, Mr. Chairman, you are always very generous. Let's be clear. I yield back. Thank you, Miss Moore. Um, the chair would like to inform the members that the committee will stand in recess for 10 minutes following Miss Miller's Miller's time. Miss Miller. Thank you, Mr. Chairman. I'm from West Virginia and I'm going to give you a little southern love.
▶ 2:34:27I graduated from Columbia College. My husband graduated from the Citadel. So, we've got some roots in common there. Thank you for being here today. You know, after four years of inflation and unmonitored spending and non-existent trade negotiations under the previous administration, I'm thrilled to have you and President Trump back at the helm to deliver on America first policies.
▶ 2:34:53Having businessmen rather than career politicians running the country is already making a huge difference. Ways and means Republicans have spent the better part of two years gearing up to reauthorize the 2017 tax cuts and jobs act and put more pro-working class tax policies in place. This committee passed the most significant tax bill in modern history last month and the House followed suit.
▶ 2:35:20It is now time for the Senate to do their job and get this big, beautiful bill to the president's desk. I want to talk about 1099K. One of my top priorities in the tax package is to repeal the Democrats absurd 1099K threshold. Under the Biden administration, Democrats changed the time- tested standard of $20,000 and 200 transactions to $600 when determining whether a taxpayer receives a 1099K or not.
▶ 2:35:49Before this committee, your predecessor acknowledged that this new threshold would be difficult to administer and to lead to the taxpayers's confusion. So instead of working with us to fix it, the Biden Treasury unconstitutionally delayed implementation and then changed the threshold to try and ease the taxpayers confusion in the election year.
▶ 2:36:11Unfortunately, there are still millions more 1099K forms that were sent out, and Republicans have worked to restore the 1099K threshold to the time-tested standard of $20,000 and 200 transactions by including my SA saving gig economy taxpayer act in the one big beautiful bill. Can you shed some light on how this policy and others being produced from your department will make life easier for our taxpayers?
▶ 2:36:38Uh, Representative, thank thank you for discussing these very important issues. As as I said, I believe the part of President Trump's economic plan is the deregulation and what you were describing the cutting back on paperwork that putting thresholds at proper level is indeed deregulation, lower paperwork.
▶ 2:37:04And I think you they correctly pointed out that uh the previous administration I'm not sure that anyone ever signed the the first the front of a paycheck or the back of a paycheck. I think they mostly received direct deposit from the US government because they're always government employees. So if you have never made payroll, if you are not processing paperwork, you don't understand the costs that are inherent in this.
▶ 2:37:33If you are a small business person, if if you are someone with a lawn care business, if if you are the someone as you said, we have a completely new economy today with the the gig economy, the whether it is Uber drivers, delivery people, the contract workers who uh work from home, uh the in programming fields.
▶ 2:38:00So I I think that it was tonedeaf, completely tonedeaf for the nature of the new economy. You are so right. And I also want to voiced my support for the ongoing trade negotiations that the president and you are working on. For too long, our trusted trade partners have quietly taken advantage of the United States. And I'm a firm believer that trade truly is the great equalizer and a powerful tool to bring the world together.
▶ 2:38:27However, sometimes the tool can be used effectively and not always with fairness. I'm particularly interested in the domestic steel industry from West Virginia. We've been producing quality steel for decades and some in my hometown in Huntington and my district is currently ramping up more steel production even further with new mills in Mason County.
▶ 2:38:50So, I'm supportive of the section 232 tariffs on steel that the president has pursued and I'm eager to work together with the administration to ensure that a level playing field is also applied to the US UK economic prosperity deal. The UK has a history of subsidizing its steel industry which in turn often undercuts our domestic steel producers.
▶ 2:39:13Can you commit to continuing working on securing fairness for our dis our domestic steel industry across trade deals? Uh, Representative Miller, I had the privilege of being with the president at the US Steel Factory in Pittsburgh the a week ago Friday and I I can tell you that the president's commitment to the US steel industry is unwavering that we are bringing back domestic production and the what we have seen
▶ 2:39:43and one of the previous questions about is China a reliable partner what we have seen during COVID since then is that there are strategic industries strategic industries in the United States where we must have an industrial base and I would put steel in the top three. Thank you. Can I yield back? Thank you. The committee will stand in recess for exactly 10 minutes.
▶ 2:51:37The committee will come to order. We'll we'll continue with questioning. Mr. I'm sorry, but I just can't stand it anymore. This massive, outrageous, porkfilled spending bill is a disgusting abomination. Shame on those who voted for it. You know, you did wrong. You know it. Those were the words of your uh former White House colleague and good friend Elon Musk.
▶ 2:52:06Another, this spending bill contains the largest increase in debt ceiling in US history. It is the debt slavery bill. A new spending bill should be drafted that doesn't massively grow the deficit and increase the debt ceiling by $5 Why do you believe Mr. Musk is right or I think you'd have to ask Mr. Musk. I will take the substance of what he said.
▶ 2:52:35Does it not add trillions of dollars, your bill, to the deficit and debt? Uh, it's not my belief that it does. It may be his. He could speak for himself. But of course, it's not just Mr. Musk. It is the Congressional Budget Office. It is conservativeleaning groups like Tax Foundation, Kato, left-leaning groups, and nonpartisan groups like CBO and JCT.
▶ 2:52:58So, this bill has actually united the left, the right, and the center, all saying it massively increases deficit and debt. But they're all wrong. And you're right, Congressman.
▶ 2:53:11I think that there are are a range of outcomes that I think that many do not include the progrowth measures just as they were wrong with the original TCJA and that has proven to be a resounding success just as I don't know if you were here to vote for the IRA the CBO scoring on that it has been three to four times more expensive.
▶ 2:53:38So, it's curious to me because you spent decades as an executive at George Soros's hedge fund being very successful, making billions of dollars. Back then, you would always rail against deficit and debt. What's happened again that it is smart spending that what are we spending for? Are we tax cuts that mostly go to billionaires such as yourself? uh while throwing 16 million people off their healthcare coverage.
▶ 2:54:08Well, I I would dispute that 16 million. I think you're conflating a lot of numbers. No, it's the Excuse me. Reclaiming my time. Those aren't my numbers. Just to be clear, as you know, it's the Congressional Budget Office projection. Uh I think you're adding up a lot of numbers that shouldn't be added. Excuse me. I am adding two specific numbers. The cut CBO found coming to Medicaid. No, if we're entitled to our own opinions, but not our own facts and not our own numbers.
▶ 2:54:31The CBO shows that 10.9 million will lose their health care coverage from the Medicaid cuts and another 5.1 million will lose their health care coverage due to the ACA cuts. 10.9 plus 5.1 is 16 million. So you are adding numbers. 1.4 million. Yes, correct. Do do you support Medicaid for illegal aliens? 1.4. I am asking the questions, not you. Although you'll be happy to know that my commonwealth home state commonwealth of Pennsylvania actually they check your citizenship status before you can enroll in Medicaid.
▶ 2:55:00But I understand why you're wanting to divert and change the subject. Let me move uh since we've taken up already most of my time. The World Bank yesterday had a a shocking growth projection. They slashed their growth projection for the United States by upwards of 40%. I'm just curious, do you agree or do you think they're wrong as well?
▶ 2:55:22because they specifically cited the trade uncertainty caused by your administration, the administration that you serve as Secretary of the Treasury, as being the primary reason why they've had to slash their growth projection to the lowest since 2008. Congressman, you cited the success that I may or may not have had in my previous career, but I could tell you I would not have had it if I followed World Bank projections.
▶ 2:55:51So it is interesting that you believe all of these groups are wrong. From your former colleague Elon Musk to left-leaning groups to right-leaning groups to center groups to the World Bank, everything is going hunky dory. The reality is I can see why you would have that opinion. You as a billionaire will reap the rewards of this tax cut while 16 million Americans will lose their health coverage. That is the sad reality of the situation.
▶ 2:56:21We could look at the who would be most harmed if these tax cuts expire. Well, you'll be happy to know that on this Democratic side of the the dis through an 18-hour markup, every single Democratic member voted to extend the tax cuts for everyone making under a billion dollars. I see my time has expired. I yield back. Dr. Murphy, thank you, Secretary, for coming in.
▶ 2:56:49apologize for the bellose manner in which you're being treated. I I think if we all want respectful um parlay and we actually want to learn things, we do it respectfully. You know, I'm going to I'm just going to take aside. I I am a physician in healthcare. I always want everybody to be able to access health care. But if I can say three words, illegal, ineligible, and able. So, let's go to the illegal part first. The last party let in anywhere between 13 and 20 million people in this country illegally.
▶ 2:57:18And now they're placing their health care burden on the rest of the American company, our American country. So let's talk about the illegals providing health care for illegals. By the way, those aren't American citizens. Two, ineligible. Last administration did not allow states to audit their Medicaid rules. Guess what you're supposed to do? You're supposed to say, "Hey, you're still fit eligibility. You're a impoverished child. You're a pregnant woman. You're uh a disabled person. You're impoverished uh senior citizen. You are eligible.
▶ 2:57:48But if you're not, you are not eligible for Medicaid. Period. Able-bodied. Who can be against able-bodied individuals working to get healthcare? I mean, my gosh. So, I I'm hearing this ridiculous statistic of 16 million people who should not be eligible, who are not eligible. Um, it is just embarrassing every time they bring this thing up.
▶ 2:58:10So anyway, um you know, I I do want to get back to the fact that our nation now, and it's this isn't this is blames on Republicans and Democrats, has gone far too long as far as where our economy is. We become a service economy. We become a government employment economy. Uh we don't we make some things, we assemble other things, but we don't manufacture things. We've talked about this. I look at this at what's happened in North Carolina, the drying up of cities, especially in the east. I want to talk a little bit about tariffs and this is a difficult discussion.
▶ 2:58:41Um, I'm hearing more and more from manufacturers in North Carolina that the tariffs in the short term are harming them. Specifically, tariffs on inputs used in manufacturing driving up costs and making products uncompetitive when exporting to third country markets. These export markets are highly competitive and US companies have to compete with the EU, with China, other countries to be able to offer their products cheaper. who can offer their products cheaper than us. I really just would like to know how we're going to navigate this.
▶ 2:59:11I really believe our tariff policy was necessary. You can only affect economic policy by one of two ways. Militarily, which no one wants, or by tariffs. And to get our country reverse back on a path it should be. We have to do this. But help me understand how the US is going to help our companies in this difficult time remain their competitiveness. Well, Congressman, as I discussed earlier, the most powerful thing we're going to do is give them great certainty in the permanence in this tax bill.
▶ 2:59:39We will also allow 100% expensing both for the new equipment the and for factory structures and that will provide a substantial savings and impetus. So I I believe that the that will uh aid in in the the manufacturing here.
▶ 3:00:03Uh we are also um working uh with with industry and again uh it it is across a wide range that we will see uh some companies will make less some will make more. Right. I I I appreciate that. You know, I I love to see our our growth in our manufacturing. During the last administration, we had three to seven million individuals who are able-bodied adult able-bodied adult of working age come off of the workforce.
▶ 3:00:33We need workers. And guess what? Some of those people will come off Medicaid and actually get insurance by their jobs. So again, just a little bit of truth real quickly. And and congressman as I said earlier that we have approximately 9% of American of the workforce that is in real wage increases acrew to manufacturing workers faster than lower in service economy workers.
▶ 3:01:04So I think we could still see real wage growth there also. Right. Facts matter. Quickly, I' I'd like to talk to you about trans shshipment. Trans shship shipment by Chinese companies have undermined President Trump's section 301 tariffs and the problem seems to be getting worse. Um, can you elaborate by any chance if any discussion with China was done about trans shshipment or is that in order? Is that going to be discussed?
▶ 3:01:25Uh well we uh as you can imagine they pushed back on the dimminimous uh exemption which we have gotten rid of and we are going to uh you know we are tariffing all the dimminimous imports.
▶ 3:01:40We are going to set a level and it will be a global level not only for Chinese imports although uh China floods the zone because that is their business model is to export their deflationary impulse which is unacceptable to the rest of the world uh especially for US citizens. So we are going to set a a global level for these dimminimous imports. Thank you. I uh it's nice to see an administration actually do something on trade.
▶ 3:02:10We did nothing in the last four years and I'm sorry if it hurts people's feelings um that they've tariffed against us and we're retaliating trying to do things better for the American people. Support what you do and thank you very much. Thank you, Mr. Kustoff. Thank you, Mr. Chairman, and thank you, Mr. Secretary, for uh for being here today and after after your long your long days of travel. So, thank you very much for being here. If I could ask you, Mr.
▶ 3:02:36Secretary, there's been a lot of uh a lot of attention lately and a lot of conversation around the bond markets and and rising yields for for US treasuries. If I could if I could get you to address that uh maybe some some reassurance. What maybe a couple of questions. First of all, what is your current assessment of the of the bond markets and uh your view of the upward pressure on Treasury yields recently?
▶ 3:03:06Uh, Congressman, if I could break that down into three pieces. One is the the smooth functioning of the bond market. So, even during the April high high volume uh high volatility period, the bond markets uh functioned very well, trades cleared. There was never a question of financial stability. Uh two, the at Treasury, our bond issuance is going quite well.
▶ 3:03:34We are actually seeing an uptick the in primary purchasers as opposed to you know so these are the endusers who would hold it as opposed to dealers or flippers. And then three as I said earlier the United States 10ear is the only major 10-year yield in the world that is down on the year down in the year.
▶ 3:03:58So for all the the sky is falling and cries of uh what's happening or that there a crisis is inevitable. Uh the US continues to uh be the most stable bond market.
▶ 3:04:19May you've had a lot of questions today about the one big beautiful bill and a lot of questions very detailed What would happen to the economy if Congress were to fail to pass the one big beautiful bill and the majority of the tax cuts from 2017 were to expire? Well, again, Congressman, there there are two parts there.
▶ 3:04:43So, one, the uh the OOT triple B as I call it uh contains the debt ceiling raise and extension. So, uh that cannot happen. that must be raised and extended and so we will not even talk about the ramifications of that because it will never happen.
▶ 3:05:03Two, as I said, it it would be an economic sudden stop where we would see the a cataclysmic event for working Americans, for job creation, for the financial system. Uh so it it's unthinkable that this could happen. It would be the largest tax increase in history. And again, I I'm not necessarily, you know, I was criticized for my criticism of the CBO.
▶ 3:05:32I'm not necessarily going after the men and women who work there. I'm going after their insufficient models because their insufficient models say that if we make permanent the tax bill that we don't get an increase in growth. But to your point, if somehow that the one big beautiful bill were not passed, that growth will remain the same, which is ob obviously the a ridiculous assumption.
▶ 3:06:02Wouldn't it be devastating for the economy if we failed to pass the one big beautiful bill? Uh sir, I I think it could set off the financial crisis the likes of which we have not seen since 089. Mr. Secretary, you you would rather be Treasury Secretary than chairman of the Federal Reserve, wouldn't you?
▶ 3:06:21Uh, sir, I I think I have uh with the uh uh other than some congressional reporting, the best job in in Washington. Uh and I I am happy to uh do what President Trump wants me to do. And I I think that we are making great progress at Treasury.
▶ 3:06:46I can tell you that having been in the business building now since January 28th, the professional staff is incredible. Incredible. And the political staff that we've brought in, everyone is working well together.
▶ 3:07:02Uh we are working to uh enhance the economy for the American people, maintain the reserve status of the US dollar and to your first question uh make sure that the US Treasury market which is the largest and soundest and bellweather for the world uh maintains that status and I would like to stay uh in my seat through 2029 to do that. Thank you, Mr. Secretary. Mr.
▶ 3:07:29Particularly, my colleagues on the other side of the aisle have repeatedly said that there are no outside experts who support the one big beautiful bill. And I I would like to correct that for the record for a moment. So, Mr. Chairman, if I could, I'd like to submit for the record a letter that was sent to President Trump, Speaker Mike Johnson, and Leader John Thun on June 3rd showing 300 economists support for the one big beautiful bill.
▶ 3:07:56may urge speedy adoption of legislation to enact progrowth tax policies. And Mr. Chairman, I'd like to submit that for the record. Without objection. Thank you, Mr. Secretary. I yield back. Good. And Congressman, I believe I may be been in London when that was published, so I look forward to perusing the names the of the economists on that list. Thank you, Mr. Secretary. Mr. Byer, thank you, Mr. Chairman. Mr.
▶ 3:08:21Secretary, the role of the Secretary of the Treasury is one of the most important and consequential in the entire federal government. You're responsible for our nation's economic prosperity, for ensuring the stability of our financial systems, and you're a successful guy with a Ivy League education. Well, I would assume that you would understand that to execute on these objectives, you must apply foundational, wildly acceptable principles to support economic growth.
▶ 3:08:47for example, a climate of economic stability and predictability, ensuring the economy has a strong and stable workforce, supporting science and innovation, and much more. Yet, at every turn, your policies fly in the face of these basic principles. The erratic tariffs offend the markets and consumer confidence into freef fall while driving up costs for businesses and consumers alike.
▶ 3:09:07The misguided and cruel immigration policies of this administration are forcing highly skilled talent to seek opportunities outside of the US have left businesses across the country without workers they need and our communities depend upon. And the indiscriminate sashing of our libraries, medical research centers, NIH, the National Science Foundation have forced our scientific progress backwards. At the same time, your public comments about the state of the economy suggest you don't even understand the severity of the damage that you're causing.
▶ 3:09:36For example, for months, despite every indication of the contrary, you've suggested the US dollar is not weakening, but instead that currencies of other grow countries are growing stronger. This might be more credible if the dollar hadn't weakened against gold. Most of all, that's akin to suggesting our sea levels aren't rising, that the land is shrinking. Demand for treasuries is weakening, the markets aren't buying what you're selling. The only time the markets have reacted positively is when the administration is in retreat from key policy areas.
▶ 3:10:03I want to say given your successful past, isn't this Is there a question there, sir? There's a question. Isn't this embarrassing? Oh, is it embarrassing? Uh, well, I'm sorry, Congressman, but you the seem not to have seen the economic data. The we h the GDP growth has been quite substantial. Job growth is solid. GDP growth is half what it was last year, sir. The job growth is solid. And we had job growth is a third what it was all last year.
▶ 3:10:33No, no, no. A and private sector job growth especially. And if you'd like to talk about inflation, would you? The in the inflation has been coming down. Yes. The inflation is good so far. We will see every economic thing I read which is much every day suggests the impact of the tariffs is not hid. Well, why why don't why don't we look at the data ra rather than the hysteria which is how I made my career. Let me move on.
▶ 3:10:58You like to use the phrase strategic uncertainty as a justification for the tariff myths, pretending that the erratic policies have been the result of a clever, thoughtful plan, which is impossible to believe. There's a common assertion with these tariffs that I'm struggling to understand. The committee just passed a reconciliation bill that's exploited the deficit by almost $3 trillion. The president tells us that's just fine because according to the CBO, if all of his tariff policies remain in place, we're going to see $2.8 trillion in new taxes from the tariffs.
▶ 3:11:26He used that number earlier today over the next 10 years. But here's my question. If you're supposedly cutting all these deals, 90 deals in 90 days, and the president's going to retain the power to adjust tariffs on a whim, how can we be reasonably expected that those $2.8 trillion in new tariff revenues are going to be real? Isn't this just one more example of how the lack of a plan is going to lead to an explosion in the nation's debt? How do you have your cake and eat it, too?
▶ 3:11:52You claim the tariff revenue is going to offset the increase in debt and yet you also say you're going to get rid of that tariff revenue by negotiating 90 new deals. Well, Congressman, two things. It sounds like you're questioning the CBO because that's a CBO score, not my number. You used it today. Yeah, but it's the CBO score. So, if you want to use CBO, let's use CBO.
▶ 3:12:14Two, they're claiming 2.4 trillion the in new debt and they're also saying 2.8 8 in tariff income the even in Washington math that's plus 400 billion that that does miss the 500 billion in new interest on the debt which adds it up to three trillion but finally you don't agree with the CBO either in my 45 seconds your counterpart secretary let recently declared on television Trump's president's tariffs are not going away quote unquote
▶ 3:12:44even with your deal on on China that you announced um Secretary Lutnik was asked by Senator Kennedy if could accept a deal that removed trade barriers with for places like Vietnam. And he gave an answer that was frankly all over the place and difficult to understand. We're less than a month away from Liberation Day part two. Um, very few of the trade deals have been announced yet. I think most people in Congress and around the world would like to know what's going on. Should America be preparing for Liberation Day 2.0?
▶ 3:13:14Should we plan what do we plan for January July 9th and July 2nd? Uh I I would say as I have repeatedly said that there are 18 important trading partners. Uh we are working for deal toward deals on those and it is highly likely that those countries that are negotiate or trading blocks as in the case of the EU who are negotiating in good faith we will roll the date forward to continue good faith negotiations.
▶ 3:13:44If someone is not negotiating, then we will not. Mr. Chairman, I yield back. Thank you, Mr. Stwie. Thank you, Mr. Chairman. Uh, Mr. Secretary, the uh the the Democrats in the left continue to say that this is just a tax cut for billionaires. So, I'd like to give you the opportunity to respond to that.
▶ 3:14:03Uh sir a as we saw last time the the impetus or the higher were on the upper bracket. So the top 10% the top 1% pay more. If I weigh 200 lb and my sister weighs 100 pounds which is approximately right and we both lose 10% weight then I lose 20 pounds and she lose 10 loes 10.
▶ 3:14:32So they prefer to speak in absolute rather than percentages. So the percent increase the as the U. Congressman Arrington said earlier that we went from approximately the top 10% paying 38% to 45%. So, uh, that, you know, it it it's a very loud talking point that lacks all logic.
▶ 3:15:02And so, who would be hurt the most if Trump's tax cuts and jobs act As I have said, a sudden stop in the economy always hurts uh the working Americans. So the the bottom 50% of wage earners would be hurt by far the most as they always are.
▶ 3:15:24And on the other side, they will be helped the most as they were the during the first tax cuts and jobs act. The working working Americans did better. The uh minority households did better. working households saw a substantial increase in their household net worth compared to the household net worth increase of the top 10%.
▶ 3:15:52So again in percentage terms which is what matters and congressman what also matters is how much do Americans keep what is the real the return because we just experienced this great inflation. The statistics said that inflation was 21%. The goods basket for most Americans because you know it includes the cars, insurance, groceries was in excess of 30%.
▶ 3:16:22So you know that inflation they're still trying to recover from this affordability crisis. And as I said earlier, there are two ways to recover from that. Lower the prices, which we're working hard to do. Gasoline prices are down substantially. uh or have real real wage increases which we believe that this bill will drive.
▶ 3:16:44Well, that's not even touching on the if we did not pass this bill, the increase on small businesses by the 199A deduction going up by almost 20%, the impact that would have on small businesses in our country. Exactly, Congressman. And as as I've said many times, uh, and I I get some somehow my friends on Wall Street accuse me of being a redistributionist when I say, uh, Wall Street's done great. It's time for Main Street to do great. Wall Street can still do fine.
▶ 3:17:15Both both can do well together, but it is Main Street's time. Main Street is driven by small business. We are working on regulations. I've had that I have probably met in including conferences over 300 small and community bankers to try to stop this regulatory noose that is around them so that they can grow the economy.
▶ 3:17:40So the one big beautiful bill had strong language blocking the use of ESG metrics in federal contracting and finance. How is Treasury ensuring that woke corporate activism is no longer subsidized or promoted with taxpayer dollars? Uh we we h have taken out all language at Treasury. Uh we are looking at it in all contracts and we are looking for the best outcomes.
▶ 3:18:07I think if you were to look at the chips act, which the Democrats thought was a great success, that there were so many woke bells and whistles in that that it was impossible to get the money out the door the by the commerce department during the tenure of the Biden administration. In the little time I have left, President Trump has made clear that US trade policy must put America workers first.
▶ 3:18:34How is Treasury working with USR and other agencies to ensure that financial and trade policy is aligned with the America first agenda? We we work every day on that and we are trying to uh the these trade deals or this trade situation did not happen overnight. It's happened over 20 or 40 years. As I said earlier, I agree with President Trump that I'm not blaming the countries. They got away with it.
▶ 3:19:02It was the administration Congress who let them get away with it. So we are pushing back the on high tariff countries, non-tariff trade barriers which could include things like local content uh requirements uh currency manipulation and then the as in the the case of China and many other countries uh subsidies to industry and labor. Thank you for your time today.
▶ 3:19:33I yield back. Mr. Fitzpatrick. Thank you, Mr. Chairman, Mr. Secretary. Thank you for joining us today. Um, I want to begin by discussing a bill which I've introduced here in the House. Um, Lindsey Graham in the Senate, the Sanctioning Russia Act. Uh, as you know, Mr. Secretary, this legislation requires sweeping sanctions on all those individuals, financial institutions, and other entities affiliated with the Russian invasion of Ukraine.
▶ 3:19:59It establishes a 500% tariff on all imports from Russia to the United States as well as on products from any nation which continues to enable this war through the purchase of Russian origin oil and natural gas. Uh Mr. Secretary, this committee and this Congress um have an obligation uh to provide uh the administration with the tools necessary to deliver lasting peace through strength.
▶ 3:20:24Um the sanctioning Russia act um has strong support from many on this dis and in the house and has 84 out of 100 US senators currently signing on as co-sponsors. Um so my first question Mr. Secretary uh how well is the department of treasury ready and able to implement legislation of this scope should it become law? Thank thank you for this this very important uh point.
▶ 3:20:50So economic tools remain an important facet of the administration's strategy to end the conflict. All the options are on the table. Treasury is ready to take action to facilitate a durable and lasting peace. Uh we have existing US sanctions and export controls on Russia that remain in place and continue to be enforced. Um I'm aware of the legislation.
▶ 3:21:13Uh I would encourage Congress to continue to let this administration uh have flexibility uh to support the negotiations. U we should be aware of unintended consequences. Uh specifically what resources does OFAC require uh to ensure that sanctions are executed swiftly as intended? Uh we we have all all the resources that we need sir. Okay.
▶ 3:21:43And I want to uh point out, Mr. Secretary, we appreciate the administration's support of this legislation to maximize the administration's leverage um to deal with uh with Mr. Putin. Uh separately from sanctions, but on a related topic, um can you speak to what steps the United States and particularly the Treasury Department, Mr. Secretary, I know you had a big role to play um in the mineral agreement. Thank you for that.
▶ 3:22:05Um any steps you can share uh of the Treasury Department taking to implement the April 30th agreement uh which establishes a joint reconstruction investment fund in support of the long-term economic success of Ukraine. Uh yes and ju just uh Congressman just as I have said with the US uh economic security is national security national security is economic security.
▶ 3:22:30Uh, President Trump and I believe that a strong, sound Ukrainian economy over the long term will be their best defense. When the Berlin wall came down, Poland and Ukraine economies were the same size. Now Poland's is three times larger.
▶ 3:22:48I I believe that we could imagine in two decades that Ukrainian economy through good management through a partnership like this and global investment could be larger than the Russian economy. And I think that that would provide a very uh prove and extreme deterrent for the whomever is running Russia.
▶ 3:23:13Then uh I I would say this partnership we are working on operationalizing it quickly. There's going to be we we had members of the Ukrainian economic team in our offices at Treasury last week. Uh there's going to be a big conference in Rome about rebuilding Ukraine.
▶ 3:23:32We are urging the World Bank the to focus on this and Congressman I believe that you will be in uh extreme agreement with me on this that we are dedicated and confirmed the fact that no country no country contributed to the Russian war machine through monies through troops or through uh military parts or any parts use four
▶ 3:24:02military Russian military weapons will be eligible to participate in the rebuilding of the Ukraine. You do not get to destroy a country, destroy people, ruin lives, and then get paid to rebuild it. Thank you for that, sir. Just very quickly revisiting, you said you wanted flexibility. Um, this legislation is designed to give the administration maximum u flexibility and pressure to end this conflict.
▶ 3:24:30It's got a ton of co-sponsors in the House, 84 out of 100 US senators. Is there any changes specifically you'd like to see made uh to that legislation? Congress, I'm happy to have my staff work with you on that and it it is good to see that some things can get done in a bipartisan basis. Thank you, sir. I yield back. Thank you, Mr. Evans. Thank you, Mr. Chairman.
▶ 3:24:56During this hearing, we have been hearing about the ways that the Trump administration claims it will help working people. the data shows the policies will do the The Trump administration wants to help the rich, not the poor. However, the Democrats on this committee are committed to helping the poor and the workingclass families.
▶ 3:25:26That is why we have protected legislation to protect affordable health care, increase the child tax credit, and make sure the rich pay their fair share. I've also introduced legislation called the tax the workers act.
▶ 3:25:48It is important to understand that where we are today that workers are demanding help and support. Workers should be able to keep more of their paycheck. Both younger and older workers will qualify. The earned income tax credit is one of the most effective tools to bust poverty.
▶ 3:26:14Congress should work on these type of mess to help needed assistance, not people who want favors from this corrupt I encourage my colleagues in this administration to reconsider their approach to governance and work with us to make this country better.
▶ 3:26:35Stop stealing from It's important to make sure that we make sure that people in the poor, not just the rich, that we have an opportunity here to really send a collective message. And I hope, Mr. Secretary, that we will take advantage of that. I yield back the balance of my time, Miss Tenny. Thank you, Mr. Speaker, or Mr. Chairman.
▶ 3:27:05And uh I just want to say uh thank you to uh the secretary for your remarkable testimony. I don't know if I've seen better testimony in in my short number of years in Congress, but I will say I've continue to be impressed and in honor of today's baseball game, uh President Trump's appointment with you, he definitely hit this one out of the park. So congratulations on your great work. I I I would just say it's on three hours sleep. So that's and that's even more incredible. Uh I know the the feeling of jet lag for sure.
▶ 3:27:34And uh just wanted to talk to you about a couple things. And uh you know, I'm a small business owner. Uh we uh you know, we have a I have a district that my entire northern border is Canada and and they're a very important trading partner on on so many levels. And uh we are, you know, we really I I was one of the people that was here in the in President Trump's first term and voted for the Tax Cuts and Jobs Act.
▶ 3:27:56And uh unlike the Democrats who are here, I I come from rural upstate New York and I will tell you as a small business owner and our business is in its 79th year, uh we're still in business. And the one thing that saved us was the tax cuts and jobs act. It was incredible to give us the small business benefits that we received that some of them you referred to today. Uh and I just wanted to highlight just a couple things just to touch on this issue and I I really thank Secretary of of Commerce uh Howard Lutnik for meeting with us and talking about us about this issue with us.
▶ 3:28:25But we do have a number of legacy businesses in my community. They're copper fabricators, aluminum fabricators, all dependent on smelting operations coming from Canada. And uh some of these companies are 100 years old, 200 years old. Paul Rivere built his copper business in my region. Rever copper, it's been there for over 200 years. And uh and they're a little concerned about the tariffs, although they wholeheartedly agree we need to bring our supply chains back.
▶ 3:28:53uh they wholeheartedly agree that our our area and our Erie Canal district, which I represent most of the Erie Canal, uh we were hollowed out by China and uh unfair trade and we we we want to continue to to do business and we and they all agree that we need to deal with reshoring and bringing our supply chains back uh with President Trump and and these are wonderful patriotic legacy businesses. Um we want to make sure that they are can be in business. Now again, let me add one more factor. They're surviving in upstate New York.
▶ 3:29:23So, we have some of the highest taxes, highest regulatory burden, highest minimum wage, uh, most expensive energy, worst energy state, you know, extremely, by the way, a catastrophic energy grid that we face if it weren't for the nuclear power, all of which the nuclear reactors are in my district and hydro power coming from Niagara Falls, another gift. We can't touch our wonderful natural gas uh reserves that we have in the Marcelus and Utica shell because of New York's far-left Democratic one party rule uh ridiculous unscientific policy.
▶ 3:29:54But we were we also have uh we where is is there a way that we can find some relief for some of these businesses uh on the tariff side and make sure that we can bring Canada back in the mix and and is there work being done uh not just on the fabrication side with copper, aluminum, steel but also on the agricultural side because I also have the fifth largest dairy district in the entire country and we have issues with the USR and with the Canada's unfair trade. So we have sort of both sides.
▶ 3:30:22Can you address that a little as I know President Trump really wants to help us. Where where's your position on this? So, Representative I I think that you have talked about the the balancing act that rebalancing trade constitutes because on one hand uh Canada has very dairy tariffs on on the US. I can't I can't remember the number but they're in the right. We'd like to revisit that that issue as well.
▶ 3:30:52The USR, we think they're unfair. We think they're they're in the hundreds of percents a after a bit. Uh we we are happy even though it's commerce and USR. My staff is happy to discuss with you, your constituents, your staff, what we can do to make the manufacturing up there resil more resilient. Companies that have been around since Paul Rivere are doing something right.
▶ 3:31:19So we want to be make sure that we can help them not only survive but thrive. And so we are happy to do that. And look, I I think that the the new Canadian government has made uh very good progress in writing some mistakes made by the previous leadership. So I think we are on a more sustainable path.
▶ 3:31:47I I'll be traveling with President Trump to the G7 on Sunday and you know I would expect excuse me I would expect that we would be meeting with Prime Minister Carney that we we really appreciate it and then just I mean we want to see these tariffs in place but we also want to see a balance as you say so that we can keep these legacy businesses and the thousands of jobs that they produce in our region and and uh everybody's all for reshoring and everyone's for making sure that we make these things in America because we can and must do that again
▶ 3:32:17in order to build our economy. And I just want to thank you again and I know you're on on a little bit of sleep, but we are grateful for your service and the wonderful job you're doing uh representing our nation. Thank you. Good. Well, thank you. And we we are dedicated to uh areas of the country like yours that especially experience the China shock to re rejuvenating the manufacturing base there. Miss Fishbach. Thank you, Mr. Chair, and and Mr. Secretary.
▶ 3:32:44I I would like to also thank you and just tell you what an incredible job you're doing and really appreciate that you are here even on so little sleep um here in front of the committee and and we kind of know how you feel since we did our 18-hour stint uh a couple of weeks ago now.
▶ 3:33:01But but sincerely um just thank you and thank you and um um I just so you know I represent a very rural district in western Minnesota and I also can uh border Canada so I I share the concerns that uh that Miss Tenny does and um you know agriculture is the major driver of our economy in my area and uh and small businesses and they're the lifeblood of you know the economy there but across America and uh I know
▶ 3:33:31that uh Mr. Stubie and Miss Tenny both asked about small businesses and with the advantages in the tax bill and what would happen if they didn't, but if you could not only those small businesses, if you maybe would expand on what would happen to our farming industry, what would happen to our farm communities um if we didn't pass this bill if it didn't go it become law?
▶ 3:33:53Well, Congresswoman, as you may or may not know, I I am a farmer and grew up in a rural area and u so we let's talk about the positive and then the cataclysmic.
▶ 3:34:07Uh the positive is that we are working very hard at Treasury uh to reinvigorate our community banks and small banks that they are responsible for 70% of a lending uh 40% of real estate lending and 30% of small business lending. So I I think that's one of the best things that we can do. Uh we are in our trade negotiations.
▶ 3:34:38We are constantly pushing to open other markets that have high non-tariff barriers or sometimes tariff barriers on American agriculture products with and we are pushing substantial purchase agreements for uh American farmers.
▶ 3:34:57Uh on the other side that look that no one will do well that if uh the tax if the one big beautiful bill fails that the the largest tax increase in history does not help anyone.
▶ 3:35:18Uh and I I am sure that farmers who are working people far farmer I I have a a special or farmers occupy a special place because they are working people but they are also small business people and they they are sophisticated. They have large equipment needs.
▶ 3:35:43So, the immediate expensing for new equipment, I had some business people tell me earlier uh this week that they were waiting for the tax bill. They they know that they're going to be able to get 100% expensing for the tax bill as President Trump said in his address to Congress. It will be retroactive to January 20th.
▶ 3:36:04But they need a 100% certainty because as I'm sure so many of your constituents operate on ra razor thin margins that without the shity of the tax bill without knowing they're going to get the 100% expensing uh that they will not be able to buy the new equipment that will yield that will give higher yields. Well and thank you Mr.
▶ 3:36:27secretary and I appreciate your comments on capital because that is one of the challenges not just not just for the egg community but the communities in general is that capital expenditure there's not as much available in rural areas and so I appreciate your work with those smaller banks and and trying to open markets but just just one other thing I wanted to ask about you know the Biden administration and you know the the 45 provision in the reconciliation bill and the Biden administration failed to finalize guidance on 45Z and and it's created you know,
▶ 3:36:57serious issues and uncertainty in the bofuels industry and um you know, we're you mentioned the uncertainty and we're feeling the uncertainty of that with the bofuel plants and um so can I get a commitment from you to expedite the process of finalizing the guidance for 45Z and can I also ask that you would work with myself and other members of this committee to make the credit the strongest it can be for American farmers? Yes.
▶ 3:37:24So what we what u I I am happy to put my staff in contact with yours immediately. We want to get this done quickly. Uh what we are trying to do is to make sure that 45C is more of a North American uh product and that there are not overseas actors specifically Chinese companies that backdoor into it through Mexico. So we we we will work quickly with your staff on that. Absolutely.
▶ 3:37:54And I would love to be um part of that part of that process because we need to do this for our farmers. And I am overtime with that. I yield back, Mr. Chair. Thank you, Mr. Schneider. You're recognized. Thank you, Mr. Chairman. Mr. Secretary, you come to this historic committee with both the honor and the responsibility to uphold the proud legacy of your predecessors, starting with Alexander Hamilton. As Mr. Neil earlier noted, "It's a fair expectation that when you come here, you don't quote fudge the numbers." Mr.
▶ 3:38:22Secretary, I'm disappointed that so much of what you have said today has stretched the truth, ignored the facts, and avoided directly directly answering our questions. But that really shouldn't surprise anyone as in your relatively short tenure secretary, you've established quite a record of dissembling, deflecting, and too many times just simply highlighting. And I'm going to highlight just a few. On June 1st on Face the Nation, you said thus far there have been no price increases because of the trunk tariffs. Simply not true.
▶ 3:38:50In fact, many companies have expressly stated that they've been forced to raise prices and others expect to do so. Public companies have noticed this in their as required by law reports to their investors. I ask unanimous consent to submit to the record an article published by CNBC titled, "Here are the retailers raising prices as Trump tariffs take hold." Without objection. And Costco has said I would point out this is my time inflation. This is my time.
▶ 3:39:16Costco has said increased prices because of tariffs for bananas, for pineapples, for flowers. Best Buy has raised prices and those changes took effect in make. Shark Ninja has raised prices for coffee machines. New Brands, Graco has said it has raised prices on baby gear by 20%. I ask unanimous consent to submit the entire May issue of musical merchandise review. the cover titled how tariffs are already impacting and will continue to threaten the music industry just as an example.
▶ 3:39:44I also had a constituent visiting this morning who manufactures here in the United States with US employees you using US produced aluminum selling to US consumers. He shared with me that the price of aluminum what's known as the Midwest premium rose 30 cents a pound after president doubled the tariffs on aluminum. Reuters reported on June 9th that the Midwest premium hit a record 62.5 cents per pound and that since Mr. Trump was elected, the price has risen nearly 190%.
▶ 3:40:13Another example, on May 18th, you said gasoline prices have collapsed under President Trump. According to AAA, when President Trump took office in January, the average price per gallon was $3.23. Prices have gone up and down, but last month the Bureau of Transportation Statistics said that gases were actually high price prices were actually higher. This week, AAA has the average current price at $312. None of this reflects a collapse in prices.
▶ 3:40:38And in March 7th, you said, "There's nothing nothing I'm going to do to hurt collections at the IRS." Yet, immediately after the end of this year's tax season, an internal IRS memo indicated you intend to cut 40% of the IRS workforce. You stated that the systems at IRS are grossly outdated. Your predecessor, Charles Reddig, sat in that chair. He was appointed by President Trump and he testified that we have a potentially $1 trillion annual tax gap.
▶ 3:41:05He said then and I believe now that better systems and more people working in compliance will help close that tax gap. And yet yet you are trying to stop the investments in new technology and cutting 40% of the workforce. Mr. Secretary, I frankly wonder if we and the American people should believe anything you say. But let me shift topics. Is there a question? Mr.
▶ 3:41:26Secretary, I am sure you saw the World Bank's forecast released yesterday that economic growth in in the United States this year will drop by half as a result of the pre president's tariff policies. It also lowered its forecast for global economic growth because of Mr. Trump's president tariffs and warned that if they increase further, the slowdown will be even more severe. I ask unanimous consent to insert into the record an article from the Wall Street Journal entitled World Bank sees US growth rate having as tariffs slow global economy.
▶ 3:41:56Without objection if so order. So let me now turn to investment in the US. Mr. Secretary, the US is the world's first choice for foreign direct investment or FDI. Yes or no? Is it good that foreign companies and foreign investors want to invest in the US? Always. FDI has grown every year since at least two 2018. Mr. Secretary, is it good or bad to see that FDI grow in US economy? Good. More than 8 million American workers work for companies with foreign ownership. Mr.
▶ 3:42:23Secretary, isn't part of what President Trump and you are trying to do is provide incentives for foreign companies to bring jobs back to the US. We're providing all companies bring jobs back to the US. Great. So, now let's discuss section 899, which uh my Republican colleagues passed in this house. It's a new set of taxes applying punitive taxes on investors, on individuals, and on companies that are doiciled in countries that levy unfair foreign taxes. They include many of our allies, members of the European Union, the UK, Australia, Canada, and others.
▶ 3:42:53Major investors and employers agree that if this revenge tax is implemented, employers will pull back on investment in their operations in the US. Indeed, the joint committee on taxation's revenue estimate confirms this. Later in the budget window, the provision begins to lose revenue. Mr. Secretary, this runs counter to yours and the president's stated goal of driving investment in the US.
▶ 3:43:14We should be welcoming foreign direct investment, trying to give incentives for it to come here, not we should not welcome foreign countries taking US companies tax revenue for their own treasuries. But you were punishing the companies and the individuals who want to invest in the United States, lowering investment in the United States, hurting American jobs, hurting American innovation, hurting the future for American workers. That that is a mischaracterization. Gentleman's time is expired. Mr. recognized. Thank you, Chairman.
▶ 3:43:45Secretary Besson, thank you for being here. Thank you for also clarifying some of the the perils of pillar 2. Um this is a tough discussion uh to be able to push back on what pillar 2 could ultimately do where we are losing so much revenue to foreign countries.
▶ 3:43:59That's the exact opposite of what took place in the tax cuts and jobs act where companies through the foreign derived intangible intangible income was actually encouraged to invest back in the US and we haven't seen the type of uh um inversions that we took that took place during many of the Obama years prior to 2017. Companies are repatriating their revenue and they're repatriating their support back into the US and we're going to continue to do that. Uh sir, uh again, thank you for being here.
▶ 3:44:26There's no question that there are billions of dollars worth of waste within the federal government and I applaud the work that the department is doing to address in particular improper payments and improve verification pay before payments go out. Those are those are sensible very bipartisan opportunities that we can we can address here and thank you for putting a lot of focus on that. I represent Ogden Utah and uh and the 7,000 IRS employees that work in and call Utah home.
▶ 3:44:50In talking to my constituents, many of whom are federal employees with decades of experience, I found that they want to be part of improving efficiency at the IRS. They know their jobs better than any of us, and I'm concerned that the on the job experience is not being utilized to its potential. Very simple. Sir, we've had some amazing opportunities to interact, and I've appreciated all of that with you and your team. Can we continue? Can we can we sit down with you and your team and discuss the specifics of the Ogden facility and how I and the Utons I represent can participate in increasing efficiency at the IRS?
▶ 3:45:20Uh, Congressman Moore, I appreciate our past interactions and my staff and I would be happy to do that and what I will tell you is that we are aiming for a culture change at the IRS. We have empowered we have we are cutting waste.
▶ 3:45:41There is a 35 35year-old m maybe may maybe close to your age uh u the tech update that where we are spending three and a half billion per year which is 10 times more 10 times more than a private sector bank would spend for the equivalent payments and what we are finding is that the hardworking people as you describe in Ogden are feeling empowered And
▶ 3:46:11that's what we want them to do. We want them to provide the solutions, not for the solutions to be provided from up high. I've walked through the systems with them, taking tours and stuff. They they are they're excited about the particular techn technological improvements that we can make and your investment and your focus on that is much appreciated. So, um, okay, with my remaining few minutes, let's try to connect correct some of the fallacies we've been hearing about the one big beautiful bill and its effect in particular on national debt, something that I'm very passionate about. Uh, correct me if I'm wrong on any of these statistics.
▶ 3:46:41Since World War II, the average annual real GDP growth rate sits at approximately 3.15%. In the last 10 years, even with COVID, the average is still at approximately 2.5%. Yes, sir. Those are the facts that I have here. Um, the bill that the House Republicans passed assumes a 2.6% growth rate and that would generate 2.6 2.6 6 trillion over the next 10 years.
▶ 3:47:06With the spending cuts, historic spending cuts that we've done ranging in about 1.6 cuts and otherwise other offsets. That assumed growth rate is enough to offset the tax cuts provided to the middle class through this bill. In fact, it will actually reduce the deficit by an assumed one 184 billion. Some quick yes or nos on those on those numbers.
▶ 3:47:29Do you think that with President Trump's deregulatory policies coupled with the tax policies of the one big beautiful bill that this 2.6% growth rate is possible to achieve? Uh I I think it is possible and we achieved it under President Trump's first term and I think we could easily see it over the 10-year window at at an average. And do you think it's possible that we could actually exceed a conservative 2.6% rate? Yes, sir.
▶ 3:47:56I believe that given this uh gigantic AI spend that we're seeing that the productivity increases from that may hit the US economy within the next 12 to 24 months and could accelerate our GDP growth. Accelerated GDP growth. And do you think that my colleagues from the minority party are correct when they say that the bill will add trillions of dollars to the national debt?
▶ 3:48:18I I I believe uh that they are Um, just to close here, it is not unfair for my colleagues on the Democrat side to use CBO scoring and any type of criticism. I did it with the the CBO scoring of the American Rescue Plan. The I just wish we could keep the argument to where it should be. We are assuming what I believe is a reasonable 2.6% growth rate.
▶ 3:48:47The CBO's taking a lower percent. That's great. I actually I think they're wrong in this case and I think they always undervalue the potential that we have and the reality that we have from this type of economic growth policies. We have not seen revenues tank or dip since 2017 when we enacted these. We have an opportunity here to create a strong GDP and that is the most important factor to being able to go and get after our debt to GDP ratio. Sir, thank you so much for the clarifications and I yield back. Miss Vandine, you're recognized for five minutes.
▶ 3:49:16Thank you very much, chairman. Um, if if uh my colleague Linda Sanchez is uh is is true, as it implies that women are constantly interrupted, you must be having a gender identity crisis today because you have not been allowed to finish a single sentence for my Democrat colleagues on the other side of the aisle. I won't allow you to have an opportunity to speak because you've got a lot to say.
▶ 3:49:38I mean, over the last four years, we've seen working families and small businesses have been sidelined, while green corporate welfare has soared and the IRS has turned into a political weapon, targeting audits instead of actually offering assistance. But now, thanks to President Trump's decisive leadership and your work at the Treasury, we're finally seeing a course correction. This committee's Republicans have been proud to partner with the administration and with your office on the one big beautiful bill. Legislation that delivers exactly what Americans have demanded.
▶ 3:50:08Permanent tax relief, higher wages, stronger supply chains, and a laser focus on working families. And this bill ends tax on tips and overtime, slashes wasteful green energy giveaways to China. And it puts America, not global climate conferences, at the center of our economic policy. And unlike the so-called inflation reduction act, which sent billions overseas and destabilized our energy grid, this is about made in America investments and letting working people keep more of what they earn.
▶ 3:50:36We're also seeing tariffs properly applied, being ad bringing adversaries to the table, reopening trade talks, and resetting unfair terms that have hurt US workers for decades. That's leverage. That's leadership. And finally, let's talk about the IRS. Under your leadership, we have seen billions in waste cut in one of the most efficient filing seasons in recent memory. You've shifted the agency from policing to public service where is where it belongs.
▶ 3:51:02And the one big beautiful bill builds on this by cracking down on fraud, requiring social security numbers for tax credits, and putting taxpayers first, not last. I know that you have not been able to answer a lot of questions today that were brought up. One of them has been specifically about the cuts that you've made at the IRS. Can you please explain the cuts that have been made and how that has added efficiencies? Uh, so I I would categorize the the cuts in two areas.
▶ 3:51:31And to be clear, some of some of them were not cuts. Some of them were voluntary retirements, people who wanted to move on. But a a large portion uh the IRA bill swelled the ranks of the collection agents and um because the Democrats did that because it gave them a good score that the CBO said if you hire more bodies then there should be more collections.
▶ 3:52:01Data I believe has shown that that is not true. It would be like saying, "Oh, I if we draft Scott Bessant and we have the him play against LeBron James, he will do fine." That these new auditors are not equipped to uh audit sophisticated taxpayers. They would undoubtedly uh be unleashed against working Americans.
▶ 3:52:30We saw from a whistleblower in the Atlanta IRS that um qualifications were lowered to bring in these new agents. So, uh we have just gone back to so we were filling bodies. We weren't actually filling the places with workers. A a and so we we've just gone back to the 2020 level and t the IRS collected taxes very well for hundreds of years before that.
▶ 3:52:58Um secondly, the tech upgrade has been a disaster. The it it began in 1990. It is still ongoing. Uh we have taken a look at that and we were able to save what we believe will be $2 billion a year the on on that and end up with a better system. And that's great. We actually have some bills that we've introduced here that we're hoping to be able to supply help on tech side. Yeah.
▶ 3:53:28and and that 35-year upgrade will be finished by the end of President Trump's term, and I think it will align with my policies of collection, privacy, customer service. Excellent. I want to give you a chance to answer the last question about the um foreign direct investment. You weren't able to. Can you please give a go ahead and finish your answer?
▶ 3:53:46So the the other thing I want to answer is the congressman conveniently truncated the World Bank article because it said that President Trump's policies uh were going to uh cause a uh decline in World Growth but World Bank president they uh endorsed President Trump's policies. He said that he was doing the right thing for America and that many trade frictions had been created.
▶ 3:54:14So, you know, if we were going to be honest, the whole article from the Wall Street Journal should go into the record. Uh, not just that. All right. Thank you very much. I heels. Thank you, Mr. Penetti. You're recognized for five minutes. Thank you, Mr. Chair. Secretary, good to see you. Thank you for being here. Um, as you said, as we know, you came directly from negotiations with China on trade issues. Uh, and that a framework was actually released today. and I do appreciate your willingness, the administration's willingness to seek these types of deals.
▶ 3:54:44However, I got to tell you, I'm really, really concerned about the sustainability of any agreement given the lack of congressional involvement and the use of this administration's tariffs under AIPA. Now unlike trade agreements, not frameworks, agreements that pass through Congress, these executive frameworks don't include dispute mechanisms, including independent arbiters to rule on disputes.
▶ 3:55:09And I think you believe and I believe I would say that makes enforcement extremely difficult and trade agreements I firmly believe need to be enforcable. Secretary, did the last administration uh when it had an agreement with China, the China phase one deal, did they come to Congress for a vote? The Biden administration? No. I I apologize. The last Trump administration. Thank you. Uh, no. Okay.
▶ 3:55:35And what happened was that China failed to meet all of its obligations under that phase 1 agreement. And although it committed to increasing its imports from the US by 200 billion from 20 to 21, it only followed through with 58% of its promised purchases. Now, under Trump's China phase 1 agreement, did companies have access to any neutral dispute resolution process or panel when those obligations were not met? Uh, I I would have to I'm not USR, so I'd have to get back to you. Okay. Thank you.
▶ 3:56:06And I I would always I would also say the Biden administration failed to reclaiming my time as I got to do. It didn't. Okay. So, this administration has tried these types of agreements before and it led to uninforcable agreements. Now, look, learn from Biden. Learn from Trump. I get it. I'm with you. Frameworks when it comes to trade, as I've say and my colleagues have heard me say, is like a hamburger without the meat. Okay? You need agreements. You need Congress involved.
▶ 3:56:34And that's what I'd ask that you please change track towards these more sustainable, comprehensive free trade agreements. And please get us involved. Use Congress. Help us use our authority. And I know we need to do more of that as well. Trust me. Uh Secretary, the national debt is 36 trillion. Correct. Approximately. Yes. 29 trillion of that debt is held by the public. Correct. Approximately. Yes.
▶ 3:56:58And I think that number is relevant is is relevant for assessing the debt as the rest of the debt is in intergovernmental holdings or money the government owes itself. And I believe it's more helpful to look at the debt held by the public as a share of the US economy. At the beginning of this year, the ratio stood at nearly 97% of the GDP. I mean that's not far off its peak of 106% of GDP after World War II. However, at that time, debt to GDP was on a downward trajectory.
▶ 3:57:29Now, from the end of World War II up until about 2008, the debt averaged only 40% of GDP, which was pretty manageable. But since 2008, that debt has jumped from 40 to 100% of GDP. And with this reconciliation bill that you're supporting, combined with other costs such as Social Security and Medicare, we are heading to a 250 to 300% of GDP debt within 30 years. That is a point that would cause economic calamity.
▶ 3:57:57Now, it's no wonder that Moody's downgraded the US credit score, citing the large annual fiscal deficits and growing interest cost. The budget deficit shows how quickly the problem is getting worse as well. The deficit was 1.8 8 trillion last fiscal year, but this reconciliation bill is set to increase that to over 4 trillion by the end of the decade, and it could send interest costs higher than 2 trillion by 2034. This would consume nearly onethird of all government revenue.
▶ 3:58:27The CBO said the reconciliation bill would increase the deficit by three trillion. A reasonable federal budget committee estimates five trillion. Penn Wharton estimates 5.8 8 trillion. I get the warnings of rising debt and rising debt eventually causing an economic calamity, but it's already hurting the economy now as we're seeing higher interest rates, higher mortgage rates, and we very well may see elevated inflation and a drag on economic growth.
▶ 3:58:57Now, under the current debt trends, real income growth is projected to slow by 10% in the next 30 years. But if the debt rapidly rises, income growth could decline by 30%. Secretary, in your confirmation testimony, you stated that we must get our fiscal house in order, and you've talked about the national debt as a security problem, a security problem in in the in the past. Is this still your Congressman, could I ask where those numbers came from?
▶ 3:59:27I will get that to you, but I have those in my preparation, too. Be happy to get those to you. Once again, I hope it is still your view. I'm out of time, but I really hope it is still your view. And I hope that you not only support trade deals that deal with Congress. I hope that you support a bipartisan fiscal commission where Democrats and Republicans can actually come together, sit at the table, and actually work together on reducing our debt and deficit. Thank you, Mr. Secretary. I yield back. You know what, Mr. Can I give you some opportunity to answer a question? Which question?
▶ 3:59:57Well, I I I still I I know you're wondering where the figures came from. You need to know where the figures came from. A as as I've said before, when I look in the mirror in the morning, I see a deficit hawk and I they support everything to consolidate this debt, stabilize the debt to GDP and bring down that ratio in a controlled manner. We didn't get here overnight. We're not going to fix it overnight. I would like to fix it by the end of President Trump's term. Thank you, sir. Mr.
▶ 4:00:27P Street, you're recognized for five Thank you, Mr. Chair. Uh, Secretary Rousan, thank you for being in front of us today. Ways and Means. I consider myself a novice in economics. I'd love to read it and and work through it, even teach it once in a while. And um, I appreciate all that you've done under under this administration. I live in rural Iowa. Uh, you live, I think, in rural South Carolina. We love our areas that we live in.
▶ 4:00:57And for me, President Trump won rural America by about 90%. There's an ultimatum the way I see it, an ultimatum on what we need uh to change in government to make America great again. And I'd like to talk about that as as we look forward and as you're in your role and we have this big beautiful bill that's coming out. Can you talk a little bit about for Iowa or South Carolina, how this bill will grow our states economically?
▶ 4:01:28And I think about, you know, immediate expensing things like this. Uh can you just tell the public saying, "All right, this is how this going to be economics on steroids." With pleasure. So um and I I think it's a multi-prong approach. I would go back to the small and community banks because as I said small and community banks finance 70% of a loans. So we are working to stabilize and unshackle them.
▶ 4:01:57Uh the tax bill uh farm structures would count for immediate expensing. Yep. The in in the tax bill as would any farm equipment that would increase the efficiencies 179 depreciation, you name it. And uh as you know uh most farms are set up as pass through corporations.
▶ 4:02:25And again uh the these people I think do not consider themselves uh rich. They are not the ones being stereotyped and lampuned by the other side of the aisle here. Uh these are hardworking people who they do manual labor. They keep their books. Uh they uh buy equipment. They make business decisions.
▶ 4:02:49And you know, I I think that the certainty and the permanence here is is going to be very very important to to know that it is it is going to be there. And as I said, many business owners with whom I've spoken are holding back on on the expenditures. And you know, I'm glad you mentioned 90% of the farmers who supported President Trump.
▶ 4:03:14I actually within the past 48 hours with my Chinese counterpart, I told the vice premier that you did not make good on your egg purchases and President Trump's number one constituency, they are our farmers and we expect that that will be made good. Thank you, Secretary Bent. Thank you.
▶ 4:03:36I I mean that I mean our commodity prices, soybeans and corns, we rely on these export markets and and if Brazil and Argentina takes over these markets, we're we're in deep trouble. So I'm very grateful for that. And just talking about tariffs a little bit. Um we we we've been taking advantage of for decades. So now as we move forward, um we're trying to create a level playing field and and you talked about certainty. Can you just extrapolate on that just a little bit on on so for small business or large manufacturers or whatever they just want certainty.
▶ 4:04:07How does this project out over the next 6 to 12 months? So I I I think as I've said many times the this administration's economic program is a three-legged stool. Trade, tax, and deregulation. Uh the the trade has moved faster because the president has used a an emergency power tax.
▶ 4:04:29I congratulate the everyone in the Republican side of moving the one big beautiful bill through the House with Speaker Johnson's leadership and we we are working with your Senate colleagues. Uh Senator Thun has given the date of July 4th. Uh we'll see.
▶ 4:04:49And then uh deregulation I think is both the or the regulation of the Biden acted as a tax and it acted as an expense on the American people. Yep. Per household and it slowed economic growth. Yes.
▶ 4:05:08And I believe that as these regulations come off, whether it is permitting the whether it is you know for agg um whether it is water usage whether it is um the environmental that those will kick in the third fourth quarter and by 2026 will really take off.
▶ 4:05:32So I think on trade we are moving we want to move quickly but these are big issues and we want to do it right. Yep. And as I said there are 18 important trading partners. Uh we will get those and u you know I think we can have certainty there but the real certainty we need is this tax bill. Thank you Secretary Bant and thank you and and Trump for all you do. This is incredible. We're going to have a great economic future as we move forward. Thank you very much. Thank you.
▶ 4:06:02Thank you, Miss Malletus. Thank you, Mr. Chairman. Thank you, Mr. Secretary, for being here. Um, under the previous uh Biden administration, we had zero trade deals and in just 5 months, we're seeing more cooperation from Mexico and Canada as it relates to the border and fentanyl. Uh UK, you've you have a trade deal there. China, we have a framework. Congratulations on the success in last night's meeting. uh India, Japan, they are now at the table as are dozens of other countries.
▶ 4:06:32Um and I think it's really important as we approach that July 9th uh date there for lifting uh the hold of the pause on the tariffs. Um that we we take into account that we do have these partners who are working with us in good faith.
▶ 4:06:47uh and I hope and I urge the administration to not you know reinstate the tariffs for the nations that are at the table that are working with us to reduce the tariffs the trade deficits and uh increase our market access for our products and I would just like to get your opinion on that if you agree that we should have a more targeted approach let's focus on the most egregious offenders who are not as willing to work with us to rectify that well we we are focusing on the most egregious and there as I I've said there are 18 important trading
▶ 4:07:17partners uh most of them account for approximating partners are uh many of them the biggest problem. Uh many of them have as I've said have come with good offers and are working in good faith.
▶ 4:07:37It will be up to President Trump, but it is my belief that if someone is negotiating in good faith that an extension will be possible, that's great news. And in conversations with USR, Ambassador Greer, it's my belief that with smaller countries where we have lower levels of trade, we may be able to do a one-sizefits-all regional deal.
▶ 4:08:03So that that would cover a great deal of ground countries. I wish you a lot of success there and I appreciate that. And if I also want to keep in mind that if we want to build in America as the president, as you as I and this committee wants to do, we need to make sure that we have access to parts and supplies from abroad. So let's keep that in mind as as well as we're moving forward with the tariff discussions. I'm concerned about tariffs on pharmaceuticals in particular. It's a it's an access issue. It's an affordability issue.
▶ 4:08:33It's a national security issue. Um, as you know, right now we're relying heavily on foreign countries. Uh, particularly communist China. But, uh, domestic pharmaceutical production requires long-term investment and to establish a secure and self-reliant supply chain here at home. It's something that you can't just flip the switch on. It does take time. And certainly what the provisions you mentioned earlier that we put in our one big beautiful bill will help us get there, incentivize, expand facilities, build new facilities.
▶ 4:09:00But until we reach that full domestic production capability, the US remains dangerously dependent on foreign sources for life-saving medicines and medical inputs. And so I hope that, you know, we'll take that into account when we look at tariffs uh and and not place tariffs on, you know, pharmaceuticals that we desperately need here in the United States.
▶ 4:09:20Um I alongside with my colleague uh Congressman Schneider u we introduced bipartisan legislation HR2213 the medical supply chain resiliency act and uh we learned from co that we must uh obviously that our supply chain is too fragile and we need to do what we can uh to make it more accessible these pharmaceuticals.
▶ 4:09:41My legislation would address this by enhancing the president's ability to negotiate trade agreements with trusted trade partners to reduce or eliminate tariffs, quotas, and other barriers that create a disincentive to manufacturing here in the United States. It would ensure that critical medical goods and supplies uh and services are delivered safely, quickly, efficiently to patients uh here at home. And I hope that you will take a look at this bill.
▶ 4:10:06uh it has some good bipartisan support, good industry support uh and it really does complement what we did in the one big beautiful bill to incentivize and give the president that flexibility to negotiate with those those trading partners. Yeah, Cong Congresswoman I Congresswoman I could not agree with you more.
▶ 4:10:23Uh the only good outcome from COVID was it showed us our strategic deficiencies in areas like semiconductors uh and especially pharma as you a large part of our pharma uh does come from the PRC that actually gives them negotiating leverage. Uh I I think it would be a tragic tragic mistake if they were ever to flip off that switch but it's always there.
▶ 4:10:53They could they flipped off other switches. Uh you know India who is a more reliable durable partner uh is also a large supplier but we do need to bring that home. Well great I look forward to working with you on that and an endorsement from you of my legislation would be very welcome. Thank you for your leadership on that. Thank you very much, Mr. Horseford. Thank you, Chairman Smith, and to the ranking member. Uh, Mr. Secretary, good afternoon.
▶ 4:11:24Does taking health care away from 16 million Americans lower prices uh for working families? Yes or no? I I'm not sure what that question means. The bill, the big beautiful bill that was passed by this committee and uh the majority of the Republicans in the House would eliminate health care for 16 million Americans. I'm asking, does that lower the cost for working families?
▶ 4:11:54Yes or no? Again, which cost? Oil, fuel cost, food cost, household cost. Sorry. The cost that households have to cover every month. middle class working people. Uh again, I I I disagree with the characterization. So the answer is no. The the bill doesn't deal with that. Can you name one rural community whose hospital will be strengthened by this one big beautiful bill? Just one? Yes or no?
▶ 4:12:24Again, I I'm not HHS, but I will be happy to get to you on that. I would appreciate that answer. 16 million people stand to lose healthcare. That's thousands of hospitals that will be affected. We're talking about jobs and families that will be impacted. Worse, we're dealing with these tariffs, which are taxes that American Americans pay, which are raising the cost on medical equipment, putting further strain on rural hospitals in my district.
▶ 4:12:53Uh, but yet the billionaires under this plan will still get their tax break. Um, Mr. Secretary, under the bill, who gets the most benefits? a billionaire with a complex tax return or a working parent with one W2 under President Trump's first term a greater not not the first term I'm asking under this bill including this bill in terms of percent in as opposed to absolute numbers in terms of percent working
▶ 4:13:24families will have a greater in fact Mr. Secretary, every credible outside estimator says that the wealthiest win under this proposal and working people and the poor lose. They pay more. Working people pay more. That's the story of this big, beautiful bill. Help the ultra rich and leave everyone else paying the price. Are you yourself a beneficiary of any provision in this bill? Will you personally receive a tax cut under the provisions of the under this bill?
▶ 4:13:54Uh, two things, Congressman. Yes or no? It's a we had a referendum on November 5th and Mr. my time and and reclaiming my time, Mr. Chairman. Two, uh I Mr. Chairman, I'm reclaiming my time. And two, so Mr. Secretary, it's my time, Mr. Secretary. I'm asking you a yes or no question. I'm trying to answer you and it's a yes or no question. Saying it louder does not elicit an answer.
▶ 4:14:20Well, not answering the question at all proves that you're Are you the head uh the person that's the head of overseeing the implementation of our tax code a beneficiary under the provisions of any provisions of this bill? Again, this is an extension of an existing bill. So So are you a beneficiary? This is an extension. Okay, I will I will I will take that as a no, Mr. Secretary question.
▶ 4:14:47Did the TCJA help increase the supply of housing? Yes or no? Sorry. Did the TCJA help increase the supply of housing? Yes or no? Uh, I I don't know.
▶ 4:15:04And according to according to the Federal Reserve of Philadelphia comparing the pre and post TCJA housing market, they found that between January of 2015 to October of 2019, housing construction in fact slowed under TCJA. So, Mr. Secretary, do tariffs on steel, aluminum, and lumber raise the cost of construction? Yes or no?
▶ 4:15:30Uh again on the housing point the interest rates went up because the economy was stronger and under this in inflation was nent and under a budget uh report that just came out from the Yale budget lab. They just released data showing that because of the debt that was that is going to be added by this big ugly bill, mortgage rates will increase. Are you aware of that?
▶ 4:15:58Uh, I am aware that this bill is aware that the inflation people of Nevada who are struggling with the cost of rent and the ability to afford housing. These are the pressing issues that my constituents are concerned about and I hope that this administration understands the impact of the negative consequences of their proposal. This administration very much understand the impacts on working Americans and that's why working Americans voted for President Trump. Mr. secretary.
▶ 4:16:29Uh, thank you, Mr. Chairman. I want to thank the secretary. Number one, I just want to be clear, and I already know the answer to this, but it's a yes or no. Are you making more money today than you were when you were in the private sector? Less. No, I know that. And and and just to be clear, too, yeah, in 2017 when TCJA was enacted, my tax rate went up. Yeah, Mr.
▶ 4:16:58Secretary, I and I appreciate that. Uh I I do appreciate you being here. Um I do want to Well, the gentleman yield for one second. No, gentlemen will not yield. Not at all. Um but what I would like to say is that I represent central Ohio, including Columbus, Ohio, which is the second fastest growing city in the country. And while it is great, it presents a lot of issues as it relates to affordable housing. And I know that we've covered that here on the Ways and Means Committee.
▶ 4:17:28According to a report commissioned by the Building Industry Association of Central Ohio, housing permitting must increase approximately um in recent trends to meet the projected housing need of over 100,000 new housing units in just the next decade.
▶ 4:17:47Um, so obviously increasing affordable housing um is something that's very important to central Ohio and all across the 15th congressional district and it's been a top priority of mine in Congress. The bill that we have put forward. Well, there were some things that I disagreed with.
▶ 4:18:06Um the bill that we did did expand affordable housing supply by restoring the 12.5% allocation increase for LITC um while lowering the bond financing threshold to 25%. I think these are very very powerful things in the affordable housing world and something that I think we as members of Congress on both sides.
▶ 4:18:32I mean you're going to hear a lot of drama but the bottom line is I think there are a lot of things that we can agree with. Do want to ask you a couple questions um before we we move on to the next person. Um, over the last four years in a state like Ohio, families have been squeezed obviously by rising prices, cost of living, groceries, whatever.
▶ 4:18:55Um, with and I want to address the child tax credit because I think this is something that we did in our package that I'm very proud, very proud to have supported. So, I supported it um in this bill and it increases it by $500. Can you speak to how the Treasury views the role of modernizing the child tax credit in boosting family stability and workforce participation?
▶ 4:19:24Uh, and what's at stake at stake if we let these enhanced benefits expire? Well, Congressman Kerry, that is a fantastic point because not only does the one big beautiful bill add $500 to the child tax credit, it makes it permanent. Mhm.
▶ 4:19:44So if the bill does not pass then there there will be substantial dimmonition when we talk about uncertainty for working families in in terms of which parents should go to work which shouldn't uh in terms of supplies in in terms of their household balance sheets.
▶ 4:20:05So I think as with most things in this bill, the permanence the permanence as well as the increase in the child tax credit is what is very powerful here. And and can you address the if we did nothing right with if we did absolutely nothing, we're going to go up to $2,500. But if we did nothing, what does the child tax credit go back the um I I don't know the exact number.
▶ 4:20:35$1,000, right? Yeah. So, it's $1,000. So, I mean, it's have we're we're giving more money, but if we do nothing, it would go back to $1,000. I think I'm correct with that. Yep. And the 2500 is permanent. Yeah. There is shity there for families planning their budgets, planning the uh labor allocation, how they will work. Yeah. when they will work. Mr.
▶ 4:21:02Secretary, I I do appreciate your time and and and I want to let you know, I mean, as somebody that's on this committee, there are a lot of things that my colleagues on the other side and I agree with, and I just want you to know that I know that we will work continually hard to work with the administration uh to make sure that those things get through uh because it's for the betterment of the American people. So, Mr. Secretary, thank you for your time and I appreciate your service, sir. Thank you, Mr. Yakom. Thank you, Mr. chairman for holding this hearing today and um Mr. Secretary, thank you for being here.
▶ 4:21:33I want to applaud your work on rooting out waste, fraud, and abuse. You've seen a lot of hysteria and dire predictions about Doge, but recent uh a recent briefing by Treasury and Doge to our staff show there's plenty of unsexy work that happened behind the scenes. There's one example where the IRS had over a hundred licenses for a piece of software where it turned out they only needed two. There's a saying that character is what you're doing when no one's looking. The same applies to government spending.
▶ 4:22:03I appreciate your work in going line by line within your budget to find unnecessary spending and things like this that we can root out. One area of spending that I do think is well worth the investment is our taxpayer advocate service, which helps our case workers navigate the IRS bureaucracy that our constituents often face. Mr. Mr. Secretary, countries across the world are implementing taxes that target American companies.
▶ 4:22:30Canada's digital services tax, for example, is estimated to bring in $2.5 billion dollars of revenue for Canada. 2.3 billion of that is from American companies. The UK, EU, and others are contemplating digital services taxes and undertaxed profit rule measures that target American companies, which basically pulls money straight out of the US Treasury. Our one big beautiful bill gives the Treasury Department updated tools that will fight these unfair taxes.
▶ 4:23:00Obviously, the best way for companies or countries to avoid these tools and these taxes is to not have unfair taxes in the first place. Are you in conversation with any countries about their DSTs and UTPRs? And what is the status of those conversations? Uh yes and and to to be clear uh we we do not use 8.99 as a uh thing.
▶ 4:23:24Uh but other countries do pull substantial revenues out of the US tre treasury and our great internet companies which are unique to the US. They are an example. This digital service tax was especially egregious.
▶ 4:23:46Look the Canada is a close ally but like say one one's neighbor on a block sometimes the the your neighbor can take things for granted and they have put in a digital service tax and they are taking taxes retroactively and Mr. Secretary, how hard is the administration fighting and pushing back against? We we we it is a centerpiece of our tariff negotiations.
▶ 4:24:14So when when I talk about what are we pushing back on, we are pushing back on tariffs, non-tariff measures, currency manipulation, government subsidies, and unfair taxation and uh the uh fines such as the EU does on the same companies. Thank you, Mr. Secretary. And to follow up on one of my uh colleagues questions, has China threatened to cut off our pharmaceuticals? No. Thank you.
▶ 4:24:43Uh, speaking of China, uh, China has plowed nearly $2 trillion dollars over the last four years into increasing factory um, production and construction. But those factories aren't just turning out gizmos and gadgets for domestic consumption. It's doubling down on their over capacity. And the numbers bear that out. Exports from China rose 13% in 2023 and 17% in 2024. It seems like there's a global recognition of the threat po posed by Chinese overcapacity.
▶ 4:25:13The EU, Brazil, Indonesia, Thailand, and others have also imposed tariffs on China to counter the flood of cheap imports, not just us. You've talked in the past about a quote fortress North America, which we would coordinate with Canada and Mexico on Chinese overcapacity. Can you please give an update uh on administration efforts around this? Sure.
▶ 4:25:36So uh China accounts for approximately 30% of global manufacturing on their they're trying to go on their way to 40. That is unsustainable. I warned our allies that when we put up our tariff wall around China that the goods and services which I would say they are the equivalent of that Disney movie where the the brooms carry the buckets of water. That's the Chinese business model.
▶ 4:26:04And I warned them the goods will come ashore in Europe, in Canada, in Australia. And unfortunately I was proven correct. So they are seeing substantial uh price deflation from China especially in things like EVs. Um so we think that it's important not to have trans shshipment. So uh goods cannot move from China to Vietnam to the US. from China.
▶ 4:26:31And the reason I talked about Portress North America because the greatest opportunity for trans shipment is via Mexico or Canada using USMCA. Uh our trade partners are very responsive to this. They have made some very good offers on it. Thank you, Mr. Secretary and Mr. Chairman. I yield back. Mr. Gomez. Uh thank you, Mr. Chairman. Um Mr.
▶ 4:26:59Secretary, how are you doing so far? So good. Okay. I was just curious because I know um Elon Musk body checked you at the White House. I just No animosity to Elon Musk, right? You you know that? That's what I heard. So you believe you believe what you read on Breitbart is what you're telling us, Congressman? I didn't know. Uh if it's too sensitive for you, I won't ask that question. But um let me move on. I will take South Carolina over South Africa any day. Mr.
▶ 4:27:25Secretary, um, you believe that people should be judged on their merit, correct? Yes, sir. You believe people should be judged on their job performance. Correct? Yes, sir. Okay. Just want to make sure. And the reason why is that one of the first thing this administration promises to do was to lower taxes, not lower taxes, lower the cost of living on day one. So, let's get into that. Um, on June 1st, Mr.
▶ 4:27:49Secretary, you said in regards to tariffs that there have there have been no significant price increases and concerns are overstated. Listen, I get it for somebody that's worth 521 million. I listen, no sign uh tariffs are not going to impact you, but I want to talk about workingclass people, people in my district and across the country that are impacted by tariffs. Do you know what percentage of shoes are actually uh that are sold in the United States are made here?
▶ 4:28:19Uh I do not know that. But what I know is let me So let me reclaim my time. And the reason why the inflation let me let me tell you why. Because 1% 1% of the shoes sold in the United States are made here. 1% that means 99% of the shoes made are made somewhere else. As a dad of a toddler who's growing and growing and growing, we have to buy them a lot of shoes. So that's what we know that the prices are increasing on shoes.
▶ 4:28:45We also know that under the most favorite uh nation uh tariff rate that amount is about 20%. Then you add an additional 10% across the board that you guys have placed, we're going to see people, working people pay more for shoes, pay more for their clothes, pay more for essentials, and it's going to go up. And I get it. You're worth $521 million. I know that the president's a billionaire. I know Elon Musk, most of the cabinet me members are billionaires.
▶ 4:29:13And I know that you're on the lower end of that that economic ladder in the White House, but for somebody that's making $30,000 or less a year, it's significant. I worked minimum wage jobs growing up. My parents work four to five jobs a week to make ends meet. That's most people in this country. And one of the things that we know is this big billionaire bill is going to increase taxes on workingclass people.
▶ 4:29:40We know that most of the benefits go to the higher income folks. People that are making less than $30,000 a year according to the joint committee on taxation will be paying an additional 20 billion over 10 years. 20 billion $20 billion over 10 years. Just want to make sure that that is clear.
▶ 4:30:01And if it's uh and if we can avoid doing that, would you support an amendment to the bill that ensures people making under $30,000 don't see any tax increase? Uh Congressman, I started my first job when I was nine. I found my first W2 which was $37 a week. And I will point out that today's infl today's inflation number was.1%. 0.1 the lowest. Let me reclaim my time. So that's simple answer simple question.
▶ 4:30:30Will you support an amendment that makes sure that people making $30,000 a year don't pay more? Uh, I will support working Americans unlike Let me go on because I know you're not really answered that question. Let's go on to your 333 plan. What your 333 plan, which you doubled down on it today. 3% growth, 3% deficit to GDP, 3% uh million barrels of oil of domestic oil produced uh a year. Okay.
▶ 4:30:59Earlier this hearing, you doubled down on those targets and we agreed earlier in the uh when I first asked you merit based on merit based on job performance. So will you resign if the targets aren't reached? Those were all for the end of President Trump's administration. Well, I I plan on leaving then. Okay. Well, um how about we make a little wager? 50 bucks. You know, I'll be around. I I'll would you make will you make a wager?
▶ 4:31:29Come on. If it can go to If it can go to charity if it can go to charity with pleasure. Come on. Let's make a wager. 50 bucks to charity. To charity. And here's the why. Because most economists don't think that you're going to hit those targets. CBO actually thinks this budget bill is going to grow the deficit to 7% of GDP. If if you might not be willing to put your job on the line because you'll be gone by the time that the mess actually explodes. I get it.
▶ 4:31:57I mean, Swiker on this committee didn't even want to vote on this damn bill because he's a deficit hawk. So, the American people need a little bit clearer answers. They are struggling. They're they're they're trying to make ends meet. Rent is going up. Food costs are going up. Everything's going up. And the bill, the big billionaire bill, because it benefits mainly billionaires at the expense of working people. You're cutting their healthare.
▶ 4:32:22You're making sure that they're uh they're gonna be paying more than 20 billion over the next 10 years if you're making 30,000 or less. And you guys are don't care. And I think you don't care because your net worth is $521 million. Okay. Your time has that would be a false that would be a false assumption. Thank you, Mr. Chairman. I yield back. That would be a false assumption.
▶ 4:32:46And I think the people who didn't care were the Biden administration who wiped out working families and lost in a massive man a massive referendum on November 5th. I would like to remind the committee that this is the Ways and Means Committee and have discussions on policies, not And don't call another member out by their name. If you're referring to another member, you say what state they're from.
▶ 4:33:17That is the rules of this committee. Thank you, Mr. Miller. Wow. Uh, thanks, Mr. Chairman, Mr. Secretary. How you doing? Good to see you. Good to see you, Congressman. You as well. I got to tell you, if I had to hang my hat in credibility on the Congressional Budget Office, man, I would be pretty embarrassed. Let's go through that just a little bit, and I'll dive into my remarks here.
▶ 4:33:41The Congressional Budget offices as credible as the Central Broadcasting Organization, which went bankrupt. Last time they did an assessment on the 2017 TCJA, they were off by gosh, what was it? The number was so small. It was around $1.2 trillion that the CBO is off. I'll let that speak for itself. Thank you for being here, Mr. Secretary. And and Congressman, I I would point out that they were wrong.
▶ 4:34:09the IRA's cost thus far has been more than 3x their projection. Oh, as I said it, Mr. Secretary, the green subsidies in the IRA. If I had to hang my hat and my credibility on the CBO, I would be embarrassed. And that is all we're hearing. So, let me get into the remarks and thank you for being here. Uh, over the past few years, we've seen the rapid rise of digital assets across the financial landscape.
▶ 4:34:33More and more Americans from everyday investors to institutional asset managers are engaging with these technologies and not just for speculation but as a part of broader shift toward more accessible decentralized financial tools. And it's not just individuals. Increasingly, United States businesses are integrating cryptocurrencies into their corporate strategies. This trend is unfolding across industries, but it's not without risk. As we know, without clear accounting and tax guidance, these decisions introduce new layers of market exposure.
▶ 4:35:03not just for shareholders but for the financial system as a whole. It has never been more evident we need clarity and par within the tax code. Uh first question I have Mr. Secretary experts estimate that enacting a clear federal stable coin framework could unlock up to two trillion in new demand for US treasuries largely from institutional and global buyers seeking high quality collateral.
▶ 4:35:27How do you view the potential benefits of stable coin legislation in strengthening domestic demand for treasuries and supporting broader access to credit products such as mortgages that Americans rely on? Congressman Miller, that is fantastic question and I have been in touch I a lot of discussions with your colleagues in the Senate from London over the weekend as they push through their stable coin legislation uh urging them to get it to a vote as quickly as possible
▶ 4:35:57because I believe that US dollarbacked stable coins as you said uh collateralized with Treasury bills could be a substantial portion they or create a substantial new buyer for US Treasury bills and I think equally as important it can lock in dollar dominance.
▶ 4:36:20Over history there's been a series of events that have kept the US as a reserve currency and I think passing this important stable coin legislation could be the that event for the 2020s. I could not agree more with you. That's why I'm excited to see the push for it. Uh would you agree, Mr.
▶ 4:36:41Secretary, that pairing that type of stable coin legislation with clear modernized tax guidance for digital assets would offer the greatest chance of encouraging responsible investment, giving both individuals and institutions the confidence and certainty they would need? Uh yes, sir. I I feel as well as well. I want to shift to our one big beautiful bill, Mr. Secretary.
▶ 4:37:02Uh, as we look toward the expiration of key provisions of the Tax Cuts and Jobs Act, I'd appreciate your thoughts on how extending the expanded standard deduction would improve middle class families and how Treasury is evaluating the trade-offs associated with that Well, we we've seen the the numbers and the largest tax increase in history uh would add the great distress to working families due
▶ 4:37:32to the economic distress and to many of the provisions as we just discussed, the child tax credit dropping from 2,000 to 1,000. And I don't even like to think about the havoc that it would wreak within the economy, especially within small businesses.
▶ 4:37:56And, you know, we hear a lot about, you know, how this is only, you know, a tax cut for a certain, you know, demographic or socioeconomic class within our society. The average American, if this were to not go through, would receive the largest tax hike in our country's history. that goes from the person who has zero dollars in their checking account to the most wealthiest individual that we have in the world. I I just want to make that abundantly clear.
▶ 4:38:22This piece of legislation without its support in getting through will give the American people the largest tax hike in government history. And that is what we are preventing with this legislation. Thank you, Mr. Secretary. And I yield back. Good. Thank you, Mr. Bean. Thank you very much, Mr. Chairman. Uh a happy birthday to you and a very good afternoon ways and means committee. Mr. Secretary, welcome. I'm sorry you have to put up with this including the profane language that we listen to a lot of folks up here. I don't know.
▶ 4:38:50Uh their mom must not have taught them any manners. Uh you sir could be anywhere. You don't have to do this. Uh the only thing I can imagine is love of country. And so I want to say thank you. A grateful nation says, "Thank you for your service. It's a it's an honor and thank you for trying. I know it bothers you as a financial guy and I was a former banker. Uh it bothers you that this country continues to go in the wrong direction financially.
▶ 4:39:18So, thank you for trying to turn the wheel as little as we possibly can." And I think we're all finding out that wheel can get sticky at times. So, thank you for putting some extra muscle in it. And uh part of turning that wheel is the uh is the one big beautiful bill which again thank you for your service. There's so many great things in it. I'm going to ask you that what's your favorite in just a bit. But first of all uh I've talked to some restaurant owners that have confusion and angst over the tax on tips.
▶ 4:39:46And so once this legislation is enacted, Treasury will need to update its administrative guidance regarding the treatment of tips. uh particularly regarding the adjustable gratuitities. You know, you've uh when the bill is already pre-filled out of tips and um will you and Treasury, I know you're going to head this direction anyway, commit that Treasury will clarify its guidance so recommended gratuitities such as those added to the bills of large parties where the customer retains the ability to
▶ 4:40:16adjust the amount are treated as tips rather than service charges. So the intended target that Congress wants to do it is you don't pay tax on tips. Mr. Secretary, what say you? Uh Congressman, uh we have a lot of data on tip income.
▶ 4:40:34So this should be a relatively easy endeavor and we will work to make this as seamless and as efficient as possible so that the working people who receive tips uh that it will be expedited and that the small business owners will experience as little paperwork as possible. Thank you, Mr. Secretary. That's the right answer. Uh I listen to you.
▶ 4:40:59you've been speaking and you've done marvelous work because you and Doge uh the Doge effort have said even before your tenure, Treasury was out of control, not even the most essential information in its computer dispersement systems, which has led to over $165 billion in improper payments. Just last year, we double paid things and then once we paid them, we couldn't figure out why we uh why we paid them.
▶ 4:41:27I listen to you of what's needed and guess what? I've got great news. Uh Mr. Secretary, uh tomorrow I along with Joanie Ernst, we're both involved in the Doge caucuses of uh of each house is coming up with a financial payment bill that says on every bill that the United States pays, we'll we'll have a brief description of the purpose of the payment, the appropriations account which the payment is to be withdrawn, the payment reported uh on usaspending.gov, gov.
▶ 4:41:56So, it's transparent, the world can see where we're spending the money, and then an annual update at all information related to these payments. It's exciting. It's what you asked for. U my question is, what do we need to do to get you on board this bill? And you can say you had me at hello if you want to, but uh how does that sound? Are you excited about that bill? Uh sir, I I'm excited about accountability on the payments. When I arrived at Treasury, there's something called a task. Treasury accounting symbol.
▶ 4:42:26Onethird one-third of the dispersements that we sent out every year did not have a task. Without a TAS, a payment cannot be linked back to an appropriation. So there are approximately you know imagine Tre Treasury the TGA is the checking account for the United States of America.
▶ 4:42:47Above that sits approximately 450 entities whether it's agencies that um they just send down payment requests and they'd automatically been sent out for the first time. We asked the that it act like a commercially viable enterprise and that task numbers be assigned.
▶ 4:43:12And eventually the goal should be perhaps the you and Senator Erns once you pass this, your second goal could be that these entities that sit above Treasury could all pass an audit. A no. Amen. We're working with your team now to make sure that everything that you want in that bill is uh is set. So, thank you very much. It sounds like we're going to uh make a great team. Uh last thing, anything that else we need to know in the one big beautiful bill. Is there any misinformation you want to clear up, Mr. Secretary?
▶ 4:43:41Uh well, I I don't think I have the the time to clear up the but you I I will say that I I believe that the economic impetus, the certainty there there is a duality between the critics of this administration. All I hear is tariffs. It's like TDS has become tariff derangement syndrome.
▶ 4:44:07And that all I hear about is uncertainty from tariffs, uncertainty from tariffs. but then this the same side wants to give us uncertainty on taxes. So let's get this bill done and get the certainty on taxes. We will have certainty on tariffs that within some window over the coming quarters. Amen. Then then the US economy can realize its full potential. Thank you, Mr. Secretary. I yield back.
▶ 4:44:36Thank you for being here today. Miss Thank you very much, Mr. Chairman. Um, thank you to the witness for being here this afternoon with us uh and making yourself available and answering questions and engaging with the members of this committee.
▶ 4:44:54Um, I first wanted to share that, you know, I think back on the last administration, this administration, the transition, there's always going to be changes, ideas and changes, uh, mechanisms in which we're done. But I think we need to talk truth about what the numbers were in each one of those. Now, we know that at the time of President Trump's unemployment was at less than 4%.
▶ 4:45:26Inflation was below 3%. And the numbers that have been put out about where inflation is now has not really changed monthtomonth. When we look at CPI, uh the Bureau of Labor statistics, those numbers have not changed significantly from the downward trajectory that happened from 2020. We have continually gone down in inflation.
▶ 4:45:52Economic growth at the time of inauguration was at 2.8% 8% in real terms and that was con according to world analysis one of the fastest growing economies in the world. The bottom 20% of workers saw the largest real wage gains during the Biden We're going to give jackets jacket here in this committee.
▶ 4:46:22Additionally, we have seen since January 20th that the stark market overall has gone down 1.3% and gas has gone up. Ma'am, that's incorrect. Excuse me. Let me let me let me get something straight with you first here. I've seen you interrupt everyone. When you come to someone's house, you respect their rules. And in this house, we don't interrupt individuals. And you're not going to interrupt my time. I'm going to give you time to respond.
▶ 4:46:52You may want to jot down some notes about things that you don't agree with me on so that you can respond to them at that time. But while I'm speaking as the person holding this time, you will refrain from speaking, sir, until I am done. Until I am done and then I will give you time to speak. Okay? Look look forward to facts. Thank you. I'll look forward to your response whether they're factual or incorrect either.
▶ 4:47:18Now, one of the things that I noticed um that the president, our present president has said that he was going to do was going to bring down the cost of living. But as we all know, costs have not gone down. Whether they have remained stagnant at the amount that they were at the time of the inauguration or before, or they have gone up, real costs have not gone down for the American individuals.
▶ 4:47:45I know that my colleagues want to talk about in this bill what is happening in terms of their support for the American worker. There's a discussion I hear from several colleagues that if this legislation is not passed, it will then trigger the largest tax hike. That's because you made the largest tax cut in 2017 with this bill. And it's not to say that we cannot negotiate as Congress has used to do something in between there.
▶ 4:48:14It does not have to be this bill. It could in fact be something in between there. But that's not what we're doing here in this disc in this Congress at this time. Additionally, we have seen that, you know, there's discussion about overtime taxes, overtime um the credit that's going, we know that only 12% of hourly workers receive overtime. And then the discussion about tips, which is only going to affect 2.5% of American workers.
▶ 4:48:44and only 40% of tip earners actually file federal taxes. So, we are not going to affect everyone that we need to affect. Unfortunately, everyday Americans, the outcome of the supposedly strategic legislation that we have here is very predictable. We're watching the cost of bread, bacon, butter rise, egg prices continuing to go up, and the rising cost is not going to happen.
▶ 4:49:12Um, one individual who I follow, James Sirwiki, a classmate of mine actually from prep school who was at Yale, uh, discusses that there's no acceleration of economic growth in this because there's not being meaningful cutting of tax rates. We are going to be reducing spending. That's correct. But there are intended unintended consequences to that as well. Additionally, let's talk about Doge.
▶ 4:49:42Two trillion, 1 trillion, 150 billion. Those were what we said the savings were going to be. I'm concerned that with this legislation as well, we are not going to see the real numbers. The numbers that are put out are not going to be in fact the real ones. Um, Mr. Chair, I yield Mr. Muran. Thank you, Mr. Chairman, and thank you, Secretary, for being here today. You didn't get a chance to respond to Miss Plask, so I'm gonna give you a chance to respond.
▶ 4:50:09Uh, Secretary Bessant, where did she go wrong in her statement? Well, first of all, I would fire the staffer who did that chart because it stopped in February 2025 and prices are down substantially since then. But that that's an inconvenient truth.
▶ 4:50:26Secondly, the S&P if if the congresswoman would care to check Bloomberg, the stock market, as judged by the S&P, which is the most widely held index by American 401ks, is up on the air up. It is up month. No, excuse me, ma'am. It's my time. Since Jan and we don't interrupt. Excuse me. We don't interrupt is what I was learned.
▶ 4:50:51Um, since January 1st, it is my business for 40 years to know what the stock market does and it is up on the year. So, thank you for that clarification, Secretary. I want to go back and look at a little bit more uh history, some recent history. When Democrats had the trifecta just a few years ago as part of their inflation reduction act, which actually skyrocketed inflation, they enacted their so-called corporate alternative minimum tax or CAMT as it's known.
▶ 4:51:19a wildly complex and burdensome 15% minimum tax for job creators across America. This policy was so difficult to implement that even Biden's Treasury Department could not finalize regulations after two years of the law being enacted. It's why I was pleased secretary to see that the IRS last week released guidance that provides relief from the CAMT. The guidance provides tax penalty relief for the 2025 year.
▶ 4:51:44Uh but perhaps more importantly, the IRS announced that it will not finalize the Biden administration's proposed CAMT regulations in their current current form, but will instead issue additional guidance in response to taxpayer comments. I know I personally heard from several constituents concerned about this disastrous minimum tax.
▶ 4:52:02Secretary Bessett, could you please elaborate on the recent action that the Treasury uh Department and the IRS took to provide taxpayer relief from the KMT and preview any future action the administration might take?
▶ 4:52:15uh sir the the the KMT is part of an over overall simplification for businesses and we have tried to do that across the board uh where we've seen it uh as several members in on the Republican side of the aisle have pointed out uh this is a pro business administration I would categorize the previous administration uh as few business people academic career
▶ 4:52:45career secretary. Let's go back even further in history. In 1963, President John F. Kennedy faced a critical economic situation due to years of excessively high tax rates, wasteful government spending, and undulating unemployment rates. His proposed solution at the time, what was it? It was lowering taxes both for individuals and for And by doing this and in doing this, this is what he said.
▶ 4:53:11He said, quote, "This will restore an idea that has helped make our country great, that a person who devotes his efforts to increasing his income, thereby adding to the nation's income and wealth, should be able to retain a reasonable share of the results. I happen to believe uh that the more hardworking that more hardworking Americans need to retain more and more of what they earn and the more of that that they retain the better.
▶ 4:53:36It brings liberty to their lives." This is the idea precisely that I think President Trump is trying to get to uh through his tax cuts and jobs act in 2017 and then once again in the one big beautiful bill. If you want to increase innovation, spur economic growth and raise overall revenues, you lower taxes for everybody and put more money in the hands of hardworking Americans, small businesses and farmers. Uh would you agree with that proposition, Secretary Bessant?
▶ 4:54:04And would you say that the one big beautiful bill is perhaps the most progrowth pro p p pro p pro p pro worker pro business legislation since the tcja maybe even more so uh the congressman Moran what you are alluding to the President Kennedy said was and I will tie it back to this horrendous inflation that we saw during the Biden administration his economic advisor was a Yale professor James Tobin and
▶ 4:54:35he asked Professor Tobin, "What is what is the governing factor on government spending? It's inflation, isn't it?" And I'm afraid that Secretary Yelen, who the was a dissertation student of Professor Tobin, uh did not heed that lesson as we got the great inflation uh during the past period from this government spending.
▶ 4:54:59uh and look I I I think that th this is the the nature of US enterprise. This is why we have the greatest economy in the world. This is why Europe c cannot get out of its own way. China has a command and control economy. That we push for Americans to be able to keep more of their own money to simplify starting businesses. And that is what we are trying to do.
▶ 4:55:28And that's why you know as as I said trade tax but deregulation is going to be very important here because you know what we are finding is that it is very difficult one of the reasons it's difficult to make or build things in this country is because of regulation.
▶ 4:55:47When if you try to build a pipeline, you need certainty that for us to be energy dominant to build an electric grid, if we are going to be the AI superpower that we are on our way to being, it will require a substantial increase in generation capacity. So permitting uh new electrical generation but equally as important permitting the transmission.
▶ 4:56:14Uh we need government to be a partner not an adversary. I wholeheartedly agree secretary Besson. The more liberty for our businesses and our individuals, our families and our farmers. The better for our economy. It spurs innovation and economic growth. With that I yield back. Thank you Mr. Swisy. Thank you Mr. Chairman. Uh thank you Mr. Secretary. It's been a long day. We appreciate the time that you've spent with us, especially considering your travel schedule and how tired you must be. Uh thank you very much for your service to our country. We're very grateful to you.
▶ 4:56:43Uh you complimented one of our colleagues earlier about it's great to see something bipartisan happening. There's very little bipartisan things going on right now, but to make bipartisan things happen, you have to talk to the other side. You have to negotiate with each other. And every problem we face in our country is complicated. And you can't solve a complicated problem in an environment of fear and anger where we just see everybody yelling and screaming at each other like this. So, I would love to work with you and I'm sure many of my other colleagues would like to work with you on the tariffs. As the the ranking member, Mr. Neil, mentioned earlier, we negotiated together on USMCA.
▶ 4:57:14We'd like to negotiate together using our congressional authority on tariffs. You talked about dimminimus earlier. The president did an executive order. I have a bill on dimminimus. Linda Sanchez, who's the chair of the subcommittee, has a bill on dimminimus, wants to do the same things that the administration does. Let's do it for real. Let's do it together. You talked about uh the president talked about negotiating drug prices could save a lot of money for the federal government for Medicaid and Medicare. Let's do it together. Let's negot We're in most Democrats are in favor of negotiating price drug prices for Medicaid and Medicare.
▶ 4:57:43Let's work together to accomplish these complicated issues. Immigration is a very big issue for me. I know that's not really your your area. Waste, fraud, and abuse. You know, uh Mr. Bean is part of a a Doge caucus. I'd love to work on going after waste, fraud, and abuse. But I think the Doge caucus, the Doge operation under Elon Musk did a terrible job. They cut the people overseeing the nuclear stockpile. They said, "We have to hire them back." They cut the people overseeing the aven flu. They had to hire them back. They cut the people overseeing the musles out of break.
▶ 4:58:13They had to hire them back. They started at $2 trillion. Then they said $1 million trillion dollars were going to cut. Then they said 150 billion we're going to cut and it's going to cost that much in lawsuits and all the inefficiencies that were created. Do you think that Doge under Mr. Musk did a good job. I I think that Doge under Mr. Musk has set in motion an ethos that I understand the ethos. But under Mr.
▶ 4:58:36Musk, do you think they did a good job that I that I hope we can continue throughout the government, but not the ethos of cutting people from the nuclear stockpile. That wasn't a good ethos, was it? As I say at Treasury, we move deliberately and fix things. Right. So, they didn't move very deliberately, did they? They think we was kind of scattershot. I that the congressman I I have the benefit of the Doge people who are full treasury employees who either I or I understand that I appreciate that. I want to ask you about Mr.
▶ 4:59:07overseeing of of Doge. But my senior staff interviewed these Doge people who are not Doge people. They are Treasury people have been incredibly and I I I believe you Mr. Secretary. Do you think that Mr. Musk did a good job overseeing Doge? I I I because it's been reported that you said he was a fraud, that it was the whole thing was a fraud. Do you agree with that statement or is that in inappropriately reported? Fake news. Fake news. Okay. So, Mr.
▶ 4:59:33Secretary, I agree with 75% of the stuff that's in the big uh bill that you guys talk about. We call it the big ugly bill, not the big beautiful bill. There's three things that I really don't like about it a lot. I don't like that we're continuing the cuts in uh tax breaks that we're giving to the wealthiest Americans from 39.6 down to 37. I think that's a deficit producing unnecessary tax cut that's going to just increase the deficit and not do anything to increase economic productivity in our country.
▶ 4:59:58The second thing I don't like is that we're cutting so much Medicaid for so many people in need and we're cutting the the food assistance program for so many people in need. And the third thing I don't like is this whole thing we've been hearing a lot about today, the deficits that have been created. Now, you don't agree with the CBO. We've heard that several times. You also disagree with the committee for responsible budget who said that there's going to be a $3 trillion de deficit from this. You disagree with that also, right? Yes. And you disagree with the Yale budget lab. You went to Yale. You don't agree with the Yale budget lab.
▶ 5:00:26They say there's going to be a $3 trillion deficit from this. Do you disagree with them also? Uh there are a lot of things I disagree with Yale on these. Do you disagree with the Penn Wharton budget model who said there's going to be a $3 trillion deficit from this bill? Yes. You disagree with Elon Musk who you you supposedly you do get along with now. It will massively increase the already gigantic deficit but to 2.5 trillion and burden American citizens with crushingly unsustainable debt. Do you disagree with Mr. Musk on that issue? Yes.
▶ 5:00:54Do you disagree with Ray Dallio who said that this is I I agree uh with Ray Dalio that we need to get our fiscal house in order. Do you disagree with Jamie Diamond who says it's going to cause a crack in the bond markets? Uh I met with Mr. diamond the other day and he wasn't necessarily referring to government finances. He Well, he said there's going to be a crack that's going to take place in either six months or six years. And let's ask you when do you think that's going to happen? I believe he was referring to market structure.
▶ 5:01:24Do you think that there's do you disagree with Mr. Frink from Black Rockck who said this is going to be an unsustainable problem as well? Uh I look I I believe that we have to get our fiscal house in order. Let me just ask one more question if I can. Do you think the interest rates right now are too high, too low, or just right?
▶ 5:01:41Uh I when I came into office as Treasury Secretary, I said that I would not discuss interest rates or Federal Reserve policy, I would not talk about the mistakes they're going to make, only the mistakes they've made. Uh but you said earlier that the good economy made the interest rates go up under the last tax bill. So you're proposing that this current tax bill will be uh good for the economy, make the economy stronger.
▶ 5:02:11Will that cause the interest rates to go up as an not commenting on Federal Reserve policy, but I'm talking about the inflationary effects of what you say would be a good economy. Well, I think you're conflating a good economy with strong growth. Under President Trump, we had strong growth and interest rates went up. You said you just said in your previous testimony that that caused interest rates to go up that the Fed raises rates the because growth is strong. If we have So do you think interest rates are going to go up under this bill?
▶ 5:02:38If if if we have strong non-inflationary growth perhaps we are already uh congressman the market lives in the future. Perhaps we have already priced in the growth and the passage of this bill. So we will see. I've already taken too much time, but let me just say I'm very concerned that the increasing deficits, the tariffs, and the reduction in the workforce happening from some of the deportations that are happening are all going to be inflationary. And they're all going to cause inflation. They're going to cause interest rates to stay high or get higher.
▶ 5:03:08And it's something that we all need to be concerned about. And these complicated problems that we face require us to work together to have the debate of lively minds to try and figure out how we can make our country better and stronger. and this one-way issue of it's my way or the highway, we're not going to work together. It's not gonna work. Way over. I was very reliant, but a minute 52 is a lot. Thank you, Mr. Chairman. Um, Secretary, thank you for um spending almost 5 hours in taking questions from this committee.
▶ 5:03:38I know some of the questions were out of line and unacceptable and I appreciate how you handled it and I appreciate how you represented the administration. Please be advised that members have two weeks to submit written questions to be answered later in writing. Those questions and your answers will be made part of the formal hearing record. With that, the committee stands adjourned.