▶ 0:18:46Chair Cruz: I want to make the chairman of the senate armed services committee at home. Naturally make them feel welcome. Good morning, welcome. The senate committee on commerce, science, and transportation will come to order. We are considering the nomination of howard lutnick to be the next secretary of commerce. Mr. lutnick, congratulations on this important nomination.
▶ 0:19:12Chair Cruz: I know there are many members of this committee who are interested in hearing from you today. As the secretary of commerce, Mr. lutnick will be responsible not only for implementing major aspects of president trump's agenda, but also effectively and efficiently carrying out some of the sweeping laws that congress has passed in the past few years, like the chips and science act. Mr. lutnick is well qualified to accomplish this mission. Mr.
▶ 0:19:39Chair Cruz: Lutnick's story embodies the american spirit of resilience and achievement. The son of a history professor and an artist, Mr. lutnick was born and raised in new york. He lost both of his parents by the time he was 18 and he put himself through haverford college with the help of a generous scholarship from the school.
▶ 0:20:03Chair Cruz: Immediately after graduating, he started at cantor fitzgerald, one of the world's leading financial services firms, becoming its chairman at just 35 years old. On september 11, 2001, terrorists killed Mr. lutnick's brother and 658 cantor fitzgerald employees who were working on five floors in the north tower of the world trade center.
▶ 0:20:34Chair Cruz: It was the largest loss of life among any single organization on that tragic day. In the wake of that tragedy, Mr. lutnick not only rebuilt the company, but he grew it into a powerhouse with operations in more than 60 offices in 20 countries and over 13,000 employees. Mr. lutnick has also given back in incredible ways.
▶ 0:21:02Chair Cruz: The five years following the 9/11 attacks he ensured that the families of the cantor fitzgerald employees who were killed received 25% of the company's profits. He still donates his time today as a member of the board of directors of the national september 11 memorial and museum.
▶ 0:21:22Chair Cruz: He served on the board of haverford college for over 20 years and may generous gifts to the school, including an athletic center in honor of his brother and friend who died on 9/11, and an art gallery in honor of his mother who was an artist.
▶ 0:21:37Chair Cruz: Over the next few years, the department will be leading on key issues, such as export controls of emerging technologies, keeping the gulf open for oil and gas exploration, expanding access to spectrum, and ensuring america's leadership in ai innovation and commercial space, and helping lead the resurgence of manufacturing in america.
▶ 0:22:05Chair Cruz: My home state of texas as well as the rest of the nation will benefit from Mr. lutnick's leadership on all these fronts. I look forward to hearing from Mr. lutnick on these and other topics. I now turn to ranking member cantwell for her opening statement.
▶ 0:22:21Sen. Cantwell: Thank you, Mr. chairman. I would like to associate myself with your remarks because they are similar to the ones I was going to make when it relates to the charge of the commerce secretary. We look forward to hearing your testimony. Welcome to your family. As senator cruz said, you have a very compelling story. As I expressed when I met you, your resiliency as an individual is truly amazing.
▶ 0:22:46Sen. Cantwell: The secretary of commerce has a vital responsibility and a very broad mission agency with complex issues that affect many sectors of the economy. That is the challenge here. As my colleague just mentioned, one of those, the top of the list, is the bureau of industry and security that implement control and dual use technology, both commercial and military, for proliferation applications.
▶ 0:23:13Sen. Cantwell: This got bigger yesterday when we saw an announcement from china that took 600 billion dollars out of the valuation of a leading american company overnight. The issue of export controls and this organization within the department of commerce will be a very big issue for you. I want to say that I very much appreciate the former commerce secretary, secretary raimondo.
▶ 0:23:39Sen. Cantwell: I think that she was a standout in implementing the policy senator cruz mentioned, but also in trying to build consensus among the private sector of how to deal with these export issues. I hope you will follow that lead .
▶ 0:23:53Sen. Cantwell: In addition to this ai challenge that we face, the president in his january 20, 2025 memorandum on america first trade policy directs you, the secretary of commerce, to work with the secretary of state on the review of those export controls and to advise on modifications in light of developments with strategic adversaries and geopolitical rivals.
▶ 0:24:19Sen. Cantwell: An additional, if you will, nod to the president saying howard lutnick is the guy who has to control export issues. The department of commerce and private sector to ensure a vital advanced semi conductor manufacturing sector returns to the united states as soon as possible is a big priority for this committee. I'm glad to hear that chairman cruz mentioned it.
▶ 0:24:47Sen. Cantwell: States like texas, ohio, arizona, new york, and many others on the applications of grants through the department of commerce are counting on that continue to support to make sure this agenda gets done, that we are bringing the manufacturing supply chain of semiconductors and semiconductor advanced chips back to the united states as fast as possible. So, look forward to hearing your comments on that.
▶ 0:25:17Sen. Cantwell: You also oversee the national telecommunications and information administration charge I congress to manage spectrum sharing across all government agencies. The two people to my left, senator klobuchar and senator thune, I can't think of two bigger leaders on the 5g, 6g when and how is it going to get done, you will be tasked with negotiating between dod, ntia, and our international efforts at
▶ 0:25:47Sen. Cantwell: The world radio spectrum. You will oversee the national oceanic and atmospheric association, 60% of the commerce budget. I will never forget in a hearing when then secretary of commerce ron brown said I am the secretary of commerce, I oversee maritime and shipping and transportation and technology and telecom. I guarantee you if a member of congress is calling me, he is calling me about fish.
▶ 0:26:16Sen. Cantwell: [laughter] that says it all. Amen to that, as my colleague just said. All of the busyness that you are given by the president of the united states on these important issues, and in my opinion this is not the secretary of commerce of 20 years ago. No demeaning to the roles they played for either administration, but the secretary of commerce today is part of a critical consensus building in a foot race of competition with china.
▶ 0:26:48Sen. Cantwell: And determining with those rules are going to be. I don't believe you can get there without the consensus bodybuilding that we did on chips and science. That exercise helped us. A lot of people may have thought we were just trying to pass an initiative. I wasn't. I was trying to respond to our nation's competitive challenge and I would have done anything to work together to make sure that happened. You will be in charge of all of these things. My colleague, the chairman, mentioned space.
▶ 0:27:17Sen. Cantwell: I guarantee there is a lot of work to be done in space and you will be called to provide leadership with the new space office within the department of commerce. The complexities, you will be the decision-maker on a lot of rules. Which leads me to this next point. I will have a lot of questions about your involvement in the private sector. In the private sector, I am sure that you played by the rules. We will ask you those questions.
▶ 0:27:46Sen. Cantwell: The question is, you are going to be on the others of the table now. You are going to be the role maker. I'm -- the rule maker. I'm going to want to understand the issues of 1:1, of how we set rules. The president gave you a new responsibility as it related to the crypto rules.
▶ 0:28:04Sen. Cantwell: I am a fan of longchain technology and crypto, but in general I believe that markets need rules and people in your position are going to have to play an even larger leadership role. Those are the questions I will be asking. Thank you, Mr. chairman.
▶ 0:28:23Chair Cruz: Thank you. As demonstration you are big cheese, Mr. lutnick, you are to be introduced by the vice president of the united states. I am reliably informed that he is about three minutes out. We will do something in the senate we are quite familiar with. Filibuster. [laughter] I took the prerogative to ask the senate majority leader if he could fill three minutes with words of wisdom.
▶ 0:28:52Chair Cruz: I recognize senator thune to say whatever the hell he wants. [laughter]
▶ 0:28:59Sen. Thune: I cannot fill three minutes with wisdom, but as I do in the senate, I can fill them with words. Mr. lutnick, we are excited to have you nominated for this important position. As you will share and as the chairman shared your powerful and compelling life story.
▶ 0:29:22Sen. Thune: It is truly an example of the american success story and someone who has been able to pursue the american dream in the midst of a lot of adversity on the way. Thank you for being here to share your skill and your experience at a job that requires a lot of that. I expect that you will touch on this today. One of the issues that we worked a lot on is spectrum. We obviously need more spectrum licensed.
▶ 0:29:50Sen. Thune: You will oversee the national telecommunications, and ntia, and I look forward to working with you to ensure that the federal government is using spectrum efficiently in a way that addresses the needs that we have for more commercial use in both licensed and unlicensed technologies. I expect you to address the ntia odd brand equity and deployment program.
▶ 0:30:19Sen. Thune: As we know, it has not connected a single household. There is a reason for that. It is focused on all of the wrong things instead of building out broadband into unserved areas. Those are a couple of areas I expect that you will address. I see that my time to filibuster has ended. We look forward to working with you on ai, a critical issue and under this committee's jurisdiction. We wish you the best as you move forward.
▶ 0:30:46Chair Cruz: A predictably excellent job, leader thune. Your remarks were, spectrum good. We like, want more. All of which I enthusiastically agree. We are very pleased to welcome the vice president of the united states, an august title, but a former member of the committee of commerce, science, and transportation.
▶ 0:31:15Chair Cruz: We are glad to welcome you back to your committee and recognize you to introduce Mr. lutnick.
▶ 0:31:20Vp Vance: Good morning, Mr. chairman, ranking member can't welcome and I see senator curtis has my old chair. Hopefully you have as much fun as I did and do as much good as I tried to do. Senator marino and all members of the committee, I am thrilled to be here and introduce my friend howard lutnick, who I think will make an amazing commerce secretary for the united states of america.
▶ 0:31:47Vp Vance: One of my mentors in business said any good business has product people and salespeople. Howard is one of the few people who are a product guy and a sales guy. I want to talk about that. In america, it needs a commerce secretary who is a sales guy and product guy. He is the kind of guy who innovated products. He has a number of patents to his name.
▶ 0:32:15Vp Vance: Something I didn't know when I first got to know howard, but learned later. He is an incredible sales guy. This is a person who on the world stage will say more and do more and convince businesses that america is back, then america is growing and thriving, and I think that will benefit most importantly america n workers who have seen wages stagnate and real living standards decline.
▶ 0:32:44Vp Vance: Howard is the guy we need to reverse that trend and get american commerce back on track. Howard is more than anybody may be that I've ever met in the private sector aware, in part because of the fact he didn't grow up with everything handed to him, of the way in which what happens in the real economy affects real people. If we have a thriving, growing economy we will have stronger national security because we make more of our own stuff.
▶ 0:33:10Vp Vance: We will have an american workforce that is thriving, healthy, happy, and of course that is what we are ultimately all of us on the commerce committee most focused on. Howard is a force of nature. For those of you who don't know him and employees of the commerce department, I will say, with all apologies, you will work harder over the next four years then you have probably worked in your entire life.
▶ 0:33:38Vp Vance: Howard is the kind of guy who can have you work 90 hours a week and make you feel like you are still energetic at the end of the day because he is working 110 hours a week and he never lets his foot off the gas and he never forgets what the mission is that drives him to do all in the incredible things that he has done and that he will do as commerce secretary.
▶ 0:34:00Vp Vance: I want to say a couple of words about howard's biography, because I think it influences certainly how I think about him and hopefully informs how all of you will think about his nomination. This is not a guy who was handed everything. He grew up in a family where they often struggle to make ends meet. He built one of the most successful and biggest financial firms in the world. And of course, had it all destroyed by terrorists on 9/11, 2001. Howard did not die that day.
▶ 0:34:32Vp Vance: He lost 600 employees including, I believe, your brother, howard. He took his son to kindergarten on the upper east side so he was not in the towers when the planes hit. What he did in the wake of it is maybe more impressive than what he did before. One, he rebuilt the business to where it is today.
▶ 0:34:54Vp Vance: One of the great financial firms in the entire world.more importantly than that , he didn't forget the families of the employees who lost their lives that day. I will never forget. Talk about a good salesman. When I visited new york on the anniversary of 9/11 during the campaign, and as you know campaigns are very busy. There is a lot going on. Howard said, jd, you need to come by my office.
▶ 0:35:19Vp Vance: On 9/11 every day since 2001 we raise money for the families of the people who lost their lives that day. I said, howard, it is the middle of a presidential campaign and I am the vice presidential nominee. He said, trust me, you are coming. I showed up on the trading floor cantor fitzgerald and every person was working their tails off not to make money for howard lutnick or the business that day, but for the relief efforts and the families who they still take care of.
▶ 0:35:48Vp Vance: What is it now, 20 four years later? That is an incredible testament to the guy who doesn't forget where he came from, doesn't forget the people he lost that day, and I can't think of a better person to be the commerce secretary then a person who is a product guy, who is a sales guy, and who is an incredible human being who doesn't forget the employees that he lost that day. I want to make one final observation. Howard has a beautiful family. It is good to see all of the kids here and his lovely wife.
▶ 0:36:21Vp Vance: On the campaign trail, as you know, I have three little kids. I like to take my kids with me on the campaign trail whenever possible because I am a dad first. When you have little kids, sometimes little kids don't behave all the time. In fact, often they don't behave. I remember when we took our kids to howard's house on the campaign trail. We had a fundraiser that evening in a different place and we had a few hours. I told my wife we were taking the kids to howard lutnick's house.
▶ 0:36:50Vp Vance: Do you want to take our three kids, energetic and wound up, to someone's house? They will destroy something. They will embarrass us. I said howard's house, his wife's house, actually. We spent the afternoon with him. We went to our event. I will never forget afterwards. My wife said, we felt like the kids could just be kids.
▶ 0:37:14Vp Vance: Even though they didn't know howard and even though howard did not know them, he was a good enough guy to make it possible for our kids to just be kids. I think it's important to have the kind of person at commerce who cannot just do the job because howard can certainly do the job, who hasn't just been wildly successful because howard has been wildly successful, but is just a good dude.
▶ 0:37:43Vp Vance: Howard is a good dude and he will make us proud as our next commerce secretary. He makes me even prouder to call him a friend. God bless you, man. [applause]
▶ 0:37:54Chair Cruz: Mr. vice president, thank you. Welcome back. I will say to all of the employees at the commerce department, you must be very pleased to know that your incoming secretary will just be fine if you break something or cry on on the walls -- or crayon on the walls or spill your grape juice. You can do all that at the department of commerce. I recognize Mr. lutnick for his opening comments.
▶ 0:38:21Mr. Lutnick: Thank you chairman cruz, senator cantwell, committee. I deeply appreciate our friendship and that he was able to join me today. I'm profoundly grateful to president trump for the confidence and faith he has placed in me. It is an honor to appear before you as your nominee for secretary of commerce. My family is here with me today.
▶ 0:38:46Mr. Lutnick: I would like to introduce you to my wife allison behind me, who for 30 years has been my great partner, advisor, and the spectacular mother to our wonderful children. My oldest son kyle behind me, brandon, casey, and ryan.
▶ 0:39:03Mr. Lutnick: My extraordinary sister edie is here, as well as allison's brother rick, my sister-in-law abby, and many of my closest friend who have come down to support me.I grew up on long island, new york. My mother was an artist and art teacher. My father was a professor of american history. My mother jane taught me how to appreciate life. When I was 14 she was diagnosed with terminal cancer.
▶ 0:39:30Mr. Lutnick: She decided that if she was going to die before then she was going to live. I will never forget the day that she pulled me out of class. I rushed to the car and I said, are you ok? She said I am ok, let's go. We went to new york city, art galleries, the opera, late-night dinner, got home late, and of course she expected me to get to school on time the next day. My mother died in february of 1978 when I was 16 years old.
▶ 0:40:01Mr. Lutnick: A year and a half later, my father was diagnosed with lung cancer. He kept his diagnosis a secret from me because he wanted to make sure that I left to start college in the fall. He dropped me off at school and a week later he went for his first chemotherapy treatment at a local hospital. The nurse accidentally gave him the wrong dose and he died then and there. It was september 12, 1979. I was 18 years old. We all know losing one parent is heartbreaking.
▶ 0:40:31Mr. Lutnick: Losing both to -- is something different. It is life shattering. Without support from our extended family edie and I put my 15-year-old brother in the boarding school near my college and he would sleep with me in my dorm room on the weekends. The next year gary lived with my sister and spent the next two years living with her while she earned her law and business degree. The three of us became inseparable.
▶ 0:40:57Mr. Lutnick: As you can imagine, the pain that we suffered with gary and 657 of my friends and colleagues at cantor fitzgerald who were killed on 9/11. The company was located on the top five floors of the world trade center. I still can't say that without emotion. I'm sorry. No one in the office survived. I was taking my son kyle to his first day of kindergarten which is why I'm living today. The company was destroyed.
▶ 0:41:26Mr. Lutnick: On september 12, I hosted a call with my surviving employees and I laid out two choices. We could either attend our friends' funerals, 20 funerals per day for 33 straight days, or we could try to rebuild the company to take care of the 658 families we lost that day. This phone call led to one of the most extraordinary events in american business history.
▶ 0:41:53Mr. Lutnick: All of our employees, new and those who survived, agreed to donate 25% of their salaries to the families of 9/11 colleagues. Together, we raised $180 million over the next five years for those families. My employees stitched my soul back together. My employees never expected to be paid back, but I had other ideas.
▶ 0:42:19Mr. Lutnick: In 2008 we took a division of the company public and I gave each of those employees double of what they had given to those families.I worked at cantor my entire career, 41 years.rebuilding the company over the last 24 years is my greatest business achievement. After 9/11 we were down to 1000 employees. Today the company employs more than 18,000. I am so proud of my exceptional friends at cantor and newmark.
▶ 0:42:44Mr. Lutnick: I saw the strength of the american spirit during president trump's campaign and it fueled my desireto serve our nation .we need healthy businesses, small, medium, and large, the higher american workers to drive our economy. I will dedicate myself to making my government more responsive, working to make sure americans have an opportunity for success. I am an outcome-driven leader.
▶ 0:43:11Mr. Lutnick: Upon my confirmation I will take a thoughtful, rigorous approach to leading this great department and serving our country. Thank you. Thank you, Mr. chairman. I look forward to taking your questions.
▶ 0:43:25Chair Cruz: Thank you very much, Mr. lutnick. Thank you for that heartfelt opening statement. Your background is very impressive, not only have you lead several companies which are global leaders in financial services, real estate, and brokerage, you rebuilt cantor fitzgerald in the wake of the unspeakable tragedy of 9/11. I appreciate your willingness now to serve your nation. Let me start with just a general question. Why do you want to be the secretary of commerce?
▶ 0:43:56Mr. Lutnick: I think america is in a place to teach the world and show the world what leadership is like, what a great economy is like, taking care of americans is like. To be part of that administration, be part of this historic trump administration is one of the great honors of my life.
▶ 0:44:20Mr. Lutnick: So, I'm just looking forward to being part of this administration, to play my part in helping drive our economy's growth, driving the support and dedication to our american people.
▶ 0:44:33Chair Cruz: In your business career you have been very successful and made a lot of money. You have told this committee in your questionnaire that you plan to divest your business interests in accordance with federal laws and regulations to avoid any conflict of interest. Can you explain what your plan is regarding your business interests and whether you will consult with the designated agency ethics officials?
▶ 0:44:58Mr. Lutnick: So, my plan is to only serve the american people. I will divest. I will sell all of my interests, all of my business interests, all of my assets, everything. I worked together with the office of government ethics and we reached an agreement on how to do that. I will be divesting within 90 days upon my confirmation.
▶ 0:45:25Mr. Lutnick: I should have no business interests and therefore no conflicts of interest.I made the decision that I made enough money in my life. I can take care of myself, I can take care of my family, and it is now my chance to serve the american people. Upon confirmation, my business will be for sale and someone else will lead them going forward.the office of government ethics and I have reached an agreement, we signed the document, I made it public. Going forward I will always consult. The commerce department has a great ethics department.
▶ 0:45:56Mr. Lutnick: I have already met with them and I plan to stay in close contact with them and avoid all conflicts so I can just serve america.
▶ 0:46:08Chair Cruz: Thank you for that. Let's move to one of the important responsibilities you will have as secretary of commerce. The national telecommunication and information administration, ntia, is the lead agency for managing federal government spectrum, including critical mid band spectrum. Over the past several years, majority leader thune, senator blackburn, and I have worked on a bill requiring ntia to identify federal spectrum that can be more efficiently used, freeing up some of that spectrum for commercial users.
▶ 0:46:38Chair Cruz: To dominate in next-generation wireless technologies, 5g and 6g, stay ahead of our adversaries come and advance strong economic growth, the U.S. must create a pipeline to expand commercial access to mid band spectrum. Will you commit to working closely with myself and members of this committee on solutions that will expand commercial sector access to this key spectrum while at the same time protecting U.S. national security interests?
▶ 0:47:08Mr. Lutnick: You have to ask me a tougher question than that. Absolutely, yes.
▶ 0:47:13Chair Cruz: All right, let's try -- [laughter. ] a natural follow-up. Why is furring more commercial spectrum important? Why should the american people care of we get this accomplished?
▶ 0:47:29Mr. Lutnick: We start with the ntia is the coordinator and advisor to the administration on spectrum. There are enormous amounts of spectrum held by the department of defense. For our country to reach the scale that it can be to be successful, we need to be the leader in the world in 5g and 6g. We have to work closely with the department of defense.
▶ 0:47:55Mr. Lutnick: We have to make sure, of course, to protect ourselves, but, with all due respect, if I'm going to be your secretary of commerce, I lean towards commerce. I would like to help us drive some of that spectrum towards our businesses to free us to try to be the leader in spectrum in the world.
▶ 0:48:16Chair Cruz: Thank you. I look forward to working with you on that. Let's turn to noaa, the national oceanic and atmospheric association. Last year and activist judge in maryland vacated noaa's existing biological opinion for that then gulf of mexico. I would note that president trump renamed the gulf. I am partial to calling it the goal for texas, but everyone can have their own opinion.
▶ 0:48:45Chair Cruz: They must file a new biological opinion on offshore work in the gulf by may 21. Noaa is notoriously slow moving on these biological opinions. If it fails to get this one done on time, it could shut down oil and gas operations in the gulf. Can you commit to hold noaa's feet to the fire to make sure it meets the may 20 first deadline for reissuing this biological opinion?
▶ 0:49:13Mr. Lutnick: I will work hard to make sure they meet that deadline and we do our job on time, rigorously and thoughtfully, and we will come if I have anything to do with it, get it in.
▶ 0:49:24Chair Cruz: Can you further commit that you will do everything to make sure noaa does not actively hamper energy production in the gulf such as by implementing unverified and unsafe vessel speed restrictions?
▶ 0:49:38Mr. Lutnick: I can commit to that. I don't understand -- I will study the work of noaa, but the speed restrictions seem illogical to our fishermen and businesses.they need to be studied, but you have to take care of americans as well. How about we put that at the top of the list? Let's take care of americans.
▶ 0:49:59Sen. Cantwell: Thank, Mr. chairman. Mr. lutnick, thank you for your symbol of resiliency. It really is quite remarkable. Thank you for sharing even those most personal moments. I'm sure it is hard to do, no matter how many times you've done it, so thank you. I want to go as fast as I can. If you can help me with short answers that would be great. I can cover more territory.
▶ 0:50:29Sen. Cantwell: Do you believe the investments we've made in the chips and science act should be preserved?
▶ 0:50:31Mr. Lutnick: I think they are an excellent down payment. As a structure, I think we need to get it right. I think we need to review them and get it right. The way the congress has set it, it is an excellent down payment and our ability to bring semiconductor manufacturing back to america.
▶ 0:50:48Sen. Cantwell: That is good to hear because the president has said a little differently. On noaa, do you believe in keeping noaa and its responsibilities together?
▶ 0:50:59Mr. Lutnick: Yes.
▶ 0:51:00Sen. Cantwell: We are hearing they may try to separate some of that out. You would fight that?
▶ 0:51:06Mr. Lutnick: I want to do it right. Right now commerce is doing it right and I want to continue to understand how to do it. I have no interest in separating. It is not on my agenda.
▶ 0:51:17Sen. Cantwell: Good to hear. I believe we need a noaa, there is no underlining policy in the law about noaa. The way we get good fisheries management is to put that in the law and make sure it is demanded. Not the whim of every scientist who comes along with a new administration, but we will talk about that later. Let's return to the rulemaking. I see you as a rule maker in a critical area, ai and exports.
▶ 0:51:49Sen. Cantwell: The challenges that we face as a nation. I'm trying to get to who you are deep down about this. How are you going to go about this challenging task? I have ideas about what I think make good principles here and why it is so important. If you want to move fast, you have to be collaborative. Others say it is my way or the highway, but that usually doesn't work. The ramifications, what we can do is work together collaboratively like we did on chips and science.
▶ 0:52:23Sen. Cantwell: Did you advise the president or anyone in his administration on his meme coins?
▶ 0:52:25Mr. Lutnick: I did not.
▶ 0:52:27Sen. Cantwell: Can you help me on the treasury issue, the fight between cantor fitzgerald and cme? The settling of treasuries at the london exchange? I don't understand how it relates to a hierarchy of putting the united states treasuries in some drastic situation which we didn't see before in our debt and the debt ceiling, this debate we are having. Are we going to pass a debt ceiling or not?
▶ 0:52:56Sen. Cantwell: Why do you believe settling in a london exchange would be good for U.S. treasuries?
▶ 0:52:59Mr. Lutnick: The people speaking about it did not understand it. All U.S. treasuries are held by banks, the federal reserve come in the united states of america. They can't leave. Wherever software is written, the treasuries themselves always stay in america. The settling of treasury futures is of course in america. The partner cantor fitzgerald chose was the london stock exchange that has been registered with the cme properly since 2000.
▶ 0:53:35Mr. Lutnick: It was just a lack of understanding. Good for the press, bad for knowledge. They just got it wrong.
▶ 0:53:37Sen. Cantwell: Someone tried to make my state the deep pockets on an enron default. I didn't appreciate it and I passed a law against manipulation. The secretary of treasury got asked by senator cornyn last week about what he thought about this and he said no, it should not never. U.S. treasury in a dead hierarchy of the failure should never have london making decisions before we make decisions.
▶ 0:54:03Sen. Cantwell: I will ask you more for the record about that, but I think Mr. bessent got it right and we can get a better answer from you. On the 1:1 issue, I get that tether had a problem. They basically weren't as a stable point exchange. You came into the picture. My question is, are you prepared -- do you think the market needs to comply with audits
▶ 0:54:36About Whether One: One ratios really exist on stable coins?
▶ 0:54:39Mr. Lutnick: I believe U.S. dollar stable coins should be audited, should be completely backed by U.S. treasuries 100%.
▶ 0:54:47Sen. Cantwell: How do we prove that, if necessary, is my question?
▶ 0:54:52Mr. Lutnick: A U.S. audit and 1:1 backed by U.S. treasuries, and lastly you cannot change the rules. If someone bought the stable coin you cannot change the price. If someone made a deposit with you you cannot say on withdrawal we will change the price.
▶ 0:55:13Sen. Cantwell: You believe in a robust audit process more open then it exists today?
▶ 0:55:14Mr. Lutnick: For sure.
▶ 0:55:15Sen. Cantwell: Did you ever own tether? Any tether?
▶ 0:55:21Mr. Lutnick: Cantor fitzgerald? Me? No. Cantor fitzgerald has no equity in tether.
▶ 0:55:35Sen. Cantwell: I'm not trying to be clever. I am trying to get did you or cantor fitzgerald own tether other than the 1:1 backing?
▶ 0:55:40Mr. Lutnick: I'm trying to answer --
▶ 0:55:43Sen. Cantwell: Did you as an investor ever invest or own tether or anyone at cantor fitzgerald other than the 1:1 backing own tether.
▶ 0:56:04Mr. Lutnick: Cantor fitzgerald has a bond with tether.
▶ 0:56:09Sen. Cantwell: In dealing with china, the ai problem, various interests, I have concerns -- I am a big crypto person in general. Cftc oversight. But, this issue about tether and the amount of illicit market funding of tether, the analysts who do this work now, I am for a more robust system, but the analysts to do it now think us much as $19 billion on tether could be illicit activity by the
▶ 0:56:40Sen. Cantwell: North koreans, the russians, the chinese. So, what do we do about that? What is your solution?
▶ 0:56:46Mr. Lutnick: The number one instrument of the world of criminals is the U.S. dollar. The number two is the euro. These are things people use. Tether is the largest stable coin. Criminals use it more than circle, the second, as a ratio of the same. It is like blaming apple because criminals use apple phones. It is just a product. We don't pick on the U.S.
▶ 0:57:15Mr. Lutnick: Treasury because criminals use dollars. I think it is just a product. They are, I asked them to and they are, signed up with all U.S. federal law enforcement. They follow all federal law enforcement instantly.
▶ 0:57:31Sen. Cantwell: That is like saying if you get a request from the fbi or doj you are going to comply with maybe that wallet is doing involved in illicit activity. I am asking a different question. When you know your customers and any money laundering requirements, why aren't we taking more seriously a potential $19 billion illicit market that is going against the united states?
▶ 0:58:00Sen. Cantwell: Obviously, we have other ways to track dollars and we use those. That is how we are successful. We passed a couple of things recently on fentanyl that helped us track and basically cracked down on this. On tether, it is a big, illicit market. Potentially $19 billion. I am wanting to know from you, because it is back to the crypto oversight, export controls, what do you recommend we do to get a handle on that?
▶ 0:58:28Mr. Lutnick: In my and cantor fitzgerald's due diligence, cantor did no business with anyone who wasn't ky see appropriate. At some point their product was bought by someone and used inappropriately, I think that it's important for us --
▶ 0:58:44Sen. Cantwell: You think secondary markets need rules?
▶ 0:58:47Mr. Lutnick: It is entirely secondary market.
▶ 0:58:51Sen. Cantwell: I am over my time, thank you, but could you answer? You can answer for the record or answer now.
▶ 0:58:58Mr. Lutnick: I think ai tools used by the U.S. government running through the block chain of stable coin issuers will rid the world of criminals using block chain for illicit activity. Our ability to oversee that block chain and rip through it with ai tools will eliminate it.
▶ 0:59:17Sen. Cantwell: Thank you for that answer. We will follow up. We need an aggressive -- the complexity on conflict of interest, not you per se, but in general is a very big challenge here. Thank you, Mr. chairman.
▶ 0:59:31Chair Cruz: Leader thune.
▶ 0:59:34Sen. Thune: Thank you. I believe you covered already the issue of spectrum, but we look forward to working with you on that. That is a critical issue for our economy and leadership in the world. I want to come back to the ntia program. I did not vote for the legislation that created this program, but it provided over $42 billion to expand internet access to rural areas.
▶ 1:00:02Sen. Thune: The program is yet to connect a single household. The biden administration included a number of requirements not envisioned by congress in the program including climate change mandates, rate regulation, owners labor requirements, and other concerning items, which is why they have not signed anybody up. There is not a single telecom in south dakota that serves a lot of underserved areas that can use the program because of all of these mandates and conditions put on it.
▶ 1:00:33Sen. Thune: My question is, do you commit to working with states to -- so funds can go to truly unserved areas?
▶ 1:00:43Mr. Lutnick: You want to get broadband into the hands of the people? Let's do it. Let's do it efficiently and swiftly. That's use satellites. Let's use wireless. That's use fiber. Let's do it the cheapest and most efficiently we can. I commit to making sure states execute and deliver on the promise. Sen. soon we also work -- Sen.
▶ 1:01:17Thune: Will you also make sure this looks at infrastructure that is built?
▶ 1:01:22Mr. Lutnick: Absolutely.
▶ 1:01:24Sen. Thune: I believe we need to craft a legislative framework for high-risk ai models without foreign speculations. As you and I know, the biden administration only view ai is a threat that should be controlled.
▶ 1:01:44Sen. Thune: I was pleased to see president trump's executive order reversing the biden sweeping ai initiative with a plan that strengthens U.S. global leadership in ai. Generally if confirmed, how do you approach ai regulation to harness major advancements?
▶ 1:02:09Mr. Lutnick: The department of commerce has led the world in cyber. Our cyber technology and cyber rules are the gold standard of the world. Let's leverage that model into the standards for artificial intelligence and use what we are great at and use it again. We want to make sure we protect and defend our country.
▶ 1:02:37Mr. Lutnick: But we want to make sure that we believe it has to be an american-driven leadership in ai. It is fundamental. Leverage what we are great at an issue standards and practices like we did in cyber that will encourage the sector to be the prominent winner. Have got to do that and make
▶ 1:02:58Sure We Win Sen. Thune: You are going to lead a light touch approach. That makes sense to me I hope as you move forward and as we work on a bill, that we get the work that we all need to work. Thank you. I have a minute left.
▶ 1:03:24Sure We Win Sen. Thune: I will give that back because senator wicker might need to use it fire to my questions. He said three minutes. It was not really three minutes. Thank you, Mr. chairman. >> -- Sen. klobuchar: this is why senator thune is the leader.
▶ 1:03:49Sure We Win Sen. Thune: We talked in my office about how I truly believe that we must make stuff, invent things, export to the world. We have made huge bipartisan progress on that front. Not everything has been done. We all know that, and we want to continue america's lead and competitive edge.
▶ 1:04:10Sure We Win Sen. Thune: One way we have done that -- senator cantwell ask you about this -- is about making ground race -- groundbreaking investments in chips and semiconductors. From the land of a thousand lakes, I have talked about these issues. I just want to follow-up on her question. Secretary raimondo has done an admirable work, I think, with both sides of the aisle on this. If you are going to continue to operate the chips program.
▶ 1:04:39Mr. Lutnick: It is vital for america that we bring semiconductor manufacturing to the united states of america. We need domestic manufacturing. The chips act was an excellent down payment to begin that process. We need to study it. But we need to make sure that you get the benefit of the bargain, and domestic manufacturing of semiconductors happens in america.
▶ 1:05:03Sen. Klobuchar: Are you going to keep operating this question mark a senator manchin, there are funds that have to be distributed. There is work that has to be done, coming out of that law.
▶ 1:05:13Mr. Lutnick: I expect to do enormous work to make sure you get the benefit of the bargain, that we get the money out appropriately, correctly, and we build in america. That is vital. I'm going to execute that.
▶ 1:05:27Sen. Klobuchar: Are you concerned about the proposed freeze that affected that program? It is on temporary hold because of a judge, but are you concerned about that?
▶ 1:05:36Mr. Lutnick: It lets me have the time to be confirmed and dig in and study all of the documents we have done so I can help get it out the door and get it done. We need manufacturing. I agree. We need to be manufacturing semiconductors in america. I'm going to do everything I can to make that happen.
▶ 1:05:54Sen. Klobuchar: Your back story is incredible, your motivation of your employees after this tragedy. Some of the people that went to work there went for other reasons. They are not making as much money. I personally have worked with the people who do trade enforcement for still working folks. Vice president vance and I care about this a lot. And it made a big difference.
▶ 1:06:22Sen. Klobuchar: Over to administrations, this enforcement -- president obama, trump, biden -- it was continued. I met with your employees, 100 of them, and heard about the work they did. How are you going to motivate those employees? I think they are feeling under pressure. Some of them have expertise. If they leave, it will be hard to hire someone, because they are not going to make as much money in the government as they might somewhere else.
▶ 1:06:50Mr. Lutnick: I think the members of the commerce department are extraordinary. We have externally scientists, extraordinary people with deep intellect and deep knowledge. My job is going to be to leverage them, to make them feel heard. We are going to be responsive, and we will create a great department of commerce for the people, where they feel respected, heard, and their knowledge used for the betterment of america, which is why they are there.
▶ 1:07:19Mr. Lutnick: They are going to know that I support them.
▶ 1:07:21Sen. Klobuchar: We talked about tariffs briefly, targeted or across-the-board. Give you my preference for targeted tariffs. Where are you on that?
▶ 1:07:33Mr. Lutnick: I prefer across-the-board. I think when you pick one product and another product -- avocados, white corn, tomatoes, yellow corn -- all you are doing is picking on farms. My way of thinking, and I have discussed this with the president, his country by country, macro. Let america make it more fair. We are treated horribly by the global trading environment.
▶ 1:08:01Mr. Lutnick: They all have higher tariffs, nontariff trade barriers. They treat us poorly. We need to be treated better. We need to be treated with respect. We can use tariffs to create reciprocity, fairness, and respect.
▶ 1:08:16Sen. Klobuchar: I'm sure we will be discussing this more. The last thing, just the broadband funding and the bipartisan infrastructure law -- all of us on this committee have worked on things like improving mapping. Senator wicker and I worked on that. You are welcome.
▶ 1:08:37Sen. Klobuchar: And the work that must be done on getting broadband to some of the farthest corners of our country -- we have an investment , a once in a generation investment, on the bipartisan infrastructure law. And the freeze would have affected this work, temporarily on hold. Talk about your support for broadband.
▶ 1:08:57Mr. Lutnick: You passed the bill and have not put out any of the money, or nobody has gotten broadband. So it is time for a new commerce secretary to get broadband out the people and give you the benefit of the bargain. I want to give congress the benefit of the bargain. You have appropriated money for broadband. Let's get it in their hands. Be confirmed, study it, get the team working on it.
▶ 1:09:26Mr. Lutnick: When the pause and's, to get it out the door, get it done.
▶ 1:09:29Chair Cruz: Thank you. Senator wicker?
▶ 1:09:33Sen. Wicker: I look forward to working with you. I think this is going to be a fun and productive time for the american people. The leader was correct. Some movers of this committee voted for the infrastructure act, and some of us did not, and it was bipartisan. I think we all agree that broadband is one of the infrastructure issues of our time. It is really the rural electric asian issue of the century. Do you agree with that?
▶ 1:10:01Mr. Lutnick: It is vital.
▶ 1:10:05Sen. Wicker: It is absolutely vital. I will point out, because we talked about it, that not one single household has been connected. I'm told there has been an endless round of back-and-forth negotiations about the application process. It seems to me that a man like you is going to be able to cut through that, and at least tell the states, your application, we know what that is about, and we are going to respond to your application.
▶ 1:10:35Mr. Lutnick: I expect states to provide the most efficient way, the most cost efficient and effective way to get broadband to every house. I heard a story where they were planning to run fiber for $200,000 to a house that was worth one or two any $5,000. The waste of america is over in the commerce department. We are going to get broadband to people, but we are going to do it cost-effectively, and get you the benefit.
▶ 1:11:07Sen. Wicker: If we can squeeze it in, I'm glad we mentioned noaa. The noaa national data buoy center is at the john c stennis space center in mississippi. It is the national premier rocket propulsion facility. If you come see us, let me show you the great potential we have there at stennis space center.
▶ 1:11:35Mr. Lutnick: It sounds fun. I plan to.
▶ 1:11:38Sen. Wicker: Very good. Let's say by april.
▶ 1:11:42Mr. Lutnick: Give me till may? [laughter]
▶ 1:11:47Sen. Wicker: We have a deal. Also, in addition -- in addition to infrastructure, the chips and science act, as you mentioned that she mentioned the chips and science act as it connects with this fiscal year's ndaa.
▶ 1:12:08Sen. Wicker: One of the things we did in the chips and science act was $10 billion authorized for 20 regional tech hubs. The first round has largely been approved. In ndaa, we funded $220 million. It was authorized for $10 million.
▶ 1:12:35Sen. Wicker: $220 million for tech hubs and the potential for another $280 million for a second round. I understand your department has a choice. It can either double up on those that have already been awarded, or it can try to drive regional and global competitiveness by looking at other applications. That is what I hope you will do.
▶ 1:13:06Sen. Wicker: I want you to understand that there are a lot of us who want you to work to maintain and grow the tech programs, particularly in rural areas. And I would suggest that the southeast did not do so well in the first application. Would you agree to take a closer look at assets in the southeast region?
▶ 1:13:33Sen. Wicker: Include biotech companies, logistical expertise, research, national labs, as well as workforce within areas that are already collaborating to deliver biotechnologies that meet commercial needs faster. Thank you very much. I look forward to working with you.
▶ 1:13:52Chair Cruz: Thank you. Senator schatz.
▶ 1:13:56Sen. Schatz: We are hearing everyone and before the five minutes is up. Thank you for your time and your willingness to serve, and for your family's willingness to support you in this endeavor. I want to start with the senses. Work of the census bureau as you know is critical to the functioning of our democracy. It is included in our constitution and article one, section two, and in the 14th amendment, requiring an accurate census.
▶ 1:14:24Sen. Schatz: The 14th amendment specifically requires a count of the whole number of persons in any state. Not a trick question, but to get you on the record, if confirmed, will you ensure the census bureau is carried out in april?
▶ 1:14:35Mr. Lutnick: I will yield to the 14th amend meant of the united states constitution rigorously.
▶ 1:14:42Sen. Schatz: Will you ensure that there is a census. -- census? Since we will count each whole person, I promise we will count each whole person. That is what the constitution says, and we will stick right to it rigorously.
▶ 1:15:00Sen. Schatz: I know this has been a bit of a lovefest.
▶ 1:15:07Mr. Lutnick: Stick to it. Several shots depends how you answer. -- Sen. schatz: it depends how you answer. From project 2025 -- noaa should be dismantled and many of its functions illuminated, sent to other agencies, privatized, or placed under the control of sports and territories. Do you agree with that?
▶ 1:15:37Mr. Lutnick: No.
▶ 1:15:40Sen. Schatz: We are still having our lovefest.
▶ 1:15:42Mr. Lutnick: Still a lovefest.
▶ 1:15:44Sen. Schatz: On to fish. I want to talk to you about the hawaii river line fishery. You are one of the largest food producers in the state, and certainly the largest exporter of any kind of agricultural product in the state. In fact, if you are eating good ahi on the east coast, there is a good chance it was on a fedex plane overnight. If you are eating bad ahi, I don't know where it comes from.
▶ 1:16:12Sen. Schatz: We have an unusual management situation because of our national fisheries commission. It is important to noaa. I want to quote the former senator from maryland who took a very keen interest in noaa. She used to say nothing about me without me. I think this goes for the gulf coast states and the mid-atlantic and everyone else who has a fisheries matter.
▶ 1:16:38Sen. Schatz: You I have your assurance that before noaa, national fisheries, or anyone makes a move regarding our fishery in the pacific, that you will consult with our office and our congressional delegation in the state of hawaii?
▶ 1:16:53Mr. Lutnick: I would be delighted to consult with your office. I don't know about before you make a move. There are lots of people who do different things. But on things that matter to you, I will happily commit to working with your office. I would appreciate your input.
▶ 1:17:12Sen. Schatz: Elections have consequences. A bunch of eo's got posted over the last two weeks. A lot of biden eo's were repealed. That is what happens when you have a new administration. But in particular, president trump rolled back the biden eo on the ai safety institute.
▶ 1:17:38Sen. Schatz: And I think there are a lot of people in industry and elsewhere who, however anyone ended up voting, however anyone ended up litigating ai policy with the previous administration -- there was a sense that this was one place we kind of agreed there ought to be a safety institute. What do we do in-place of this, and how quickly can we get it done? There were very few things we were not arguing about as it relates to ai policy.
▶ 1:18:05Mr. Lutnick: The department of commerce has the gold standard in cybersecurity standards. I think ai standards along the lines of that gold standard, that same model -- it will be very effective. You think of it as standards. I think you could get bipartisan agreement. You could find a way to set those standards in a way that takes care of the comments of a light enough touch.
▶ 1:18:35Mr. Lutnick: We need to protect america. We also need to make sure it is an american driven ai model in the world. That is important to us. Standards would be a good way to think about it.
▶ 1:18:48Sen. Schatz: I will submit this for the record. That is fine. Sometimes institutes do excellent work, and sometimes they are ignored. What it is unclear to me what we are doing instead of the ai safety institute and on a federal bipartisan basis to find out what takes its place.
▶ 1:19:07Chair Cruz: Thank you. Senator fischer.
▶ 1:19:10Sen. Fischer: Thank you, and it is very good to see you today. Thank you for your testimony. I appreciate everyone who sits at that table and is willing to serve this nation. If confirmed, you will lead a massive federal agency across 13 bureaus. Start with, I want to highlight one that you have already heard of, the ntia. It has critical influence over the U.S. economy and over our security as well.
▶ 1:19:41Sen. Fischer: Among its roles, as I know you know, and as I know you have heard today, ntia coordinates spectrum management, ensuring that federal airwaves are being used most effectively. The spectrum becomes more scarce . Critical federal operations, especially those essential for our national security, have been seen as obstacles.
▶ 1:20:04Sen. Fischer: At the onset, I want to make it clear to you that dod airwaves are not lying dormant and that proposals to clear them would jeopardize our national security . We have constellations of dod satellites that rely on spectrum. Our nuclear command and control relies on spectrum. Advanced fighter aircraft like f-35's rely on spectrum.
▶ 1:20:39Sen. Fischer: We are investing tens of billions of dollars in developing six generation aircraft that will rely on spectrum. We have radar systems on our navy ships, tracking incoming missiles around the world. These allowed us to help defend israel from over 300 missile and drone attacks last year. They rely on spectrum.
▶ 1:21:07Sen. Fischer: I could go on and on, as my colleagues know, but this is all to say that I hope we can work together so we can come up with a really strong strategy for federal spectrum management in the future.
▶ 1:21:23Sen. Fischer: I am from nebraska, and in a grass cut's agricultural and manufacturing industries -- and nebraska's agricultural and manufacturing industries lie on export markets for our products, talking about trade, and the need under this administration for trade to be front and center. We know that we did not see much of that happen in previous administration.
▶ 1:21:52Sen. Fischer: We know other countries may try to retaliate against our agricultural and their manufacturing industries. Can you work with your colleagues in other agencies to understand the impact of retaliatory tariffs on agriculture and manufacturing?
▶ 1:22:08Mr. Lutnick: I will.
▶ 1:22:14Sen. Fischer: Can you talk about what opportunities you believe are out there so we can expand certain export markets over the next four years under this administration?
▶ 1:22:22Mr. Lutnick: A think our farmers, ranchers, and our fishermen are treated with disrespect.
▶ 1:22:31Sen. Fischer: Always the fish.
▶ 1:22:32Mr. Lutnick: You have to include them. How often do we eat seafood? Come on. They are treated with disrespect around the world. They are. Our farmers, ranchers, and our fishermen are treated with disrespect. The countries take advantage of american kindness, american gratitude we used to rebuild the war -- the world after the world wars and after the korean war and after the vietnam war. We need that disrespect to end.
▶ 1:23:01Mr. Lutnick: I think tariffs are a way to create reciprocity, to be treated fairly, to be treated appropriately. I think it will help our farmers, our ranchers, our fishermen to flourish. This administration is going to drive. That is why I am honored to serve president trump in that reciprocity and that fairness and the end of the disrespect. These countries have the reliance on the american economy, and they need to start to respect us, and respect us now.
▶ 1:23:35Sen. Fischer: You heard about the funding from senator thune and other members of this committee as well. I hope you can take that to heart and help our states get through some of those regulations that are out there. It has been an impediment to us. I would like to talk a little bit in the last few seconds about technology and competitiveness.
▶ 1:24:07Sen. Fischer: Talking about the U.S. ai capabilities and that we are in a dead heat with china -- this week, we heard about deepseek, and I think it is having us examine where we are right now. If confirmed, giving the commerce department's threat of influence on that issue, how will you address different threats that we see coming from the ccp within these information and technology markets?
▶ 1:24:34Mr. Lutnick: I take a very jaundiced view of china. I think they only care about themselves and seek to harm us. We need to protect ourselves. We need to drive our innovation and we need to stop helping them. Open platforms, meta's open platform let deepseek rely on it. Nvidia chips, which they bought tons of, and found ways around it, drive the deepseek model. It has to end.
▶ 1:25:06Mr. Lutnick: If they're going to compete with us, let us compete, but stop using our tools to compete with us. I'm going to be very strong on that. I'm thrilled to oversee and I am thrilled to coordinate and empower bis with tariffs that will improve the strength. When we say no, the answer has got to be no.
▶ 1:25:29Sen. Fischer: I look forward to working with you, sir. Thank you.
▶ 1:25:31Chair Cruz: Senator murphy. Sorry, senator baldwin.
▶ 1:25:35Sen. Baldwin: Thank you, chair and ranking member. Thank you for your willingness to serve. I'm going to ask first some more general question, and then I want to dig into some details you have heard a little bit about from my colleagues. The department of commerce does significant work to ensure that U.S.
▶ 1:25:58Sen. Baldwin: Companies are able to compete with china and also does a lot of work to arrive innovation in america. I want to ask very broadly, how will you utilize the programs within the commerce department, including those authorized by the bipartisan ships in science act to promote american innovation?
▶ 1:26:19Mr. Lutnick: For the example, we want to bring semiconductors back to america. We want to look at the supply chain and bring that back to america. We want to create great jobs in america so that we can go back to innovating, which is where we begin. Intel began the chips, right? And then the world sort of leveraged our chips. Tsmc leveraged us and sort of took it from us. Who drove them? Apple. Who is apple?
▶ 1:26:49Mr. Lutnick: It is america. We want to bring that innovation back and make sure our great companies -- let's be clear. We have them all. There is no other country that has the incredible technology companies, pharma companies -- let's bring manufacturing and innovation. Have them do that manufacturing in america with american workers. Let's drive that.
▶ 1:27:16Sen. Baldwin: Thank you. A key part of the bipartisan ships in science act, have you have heard from me when we met privately, as well as from others, is the tech hub program. I'll bet when you were having your one-on-one meetings with others on this committee, you heard about their tech hubs, as you heard about ours. Wisconsin's bio health tech hub decisions the state as a global leader in crystallized medicine.
▶ 1:27:47Sen. Baldwin: -- in personalized medicine. It taylor's treatment to unique history and genetic code. Last week, I spoke with many in the consortium that presented the wisconsin application, and their number one question was, can we count on future funding? The fear -- the first trench of funding has been disbursed, but there are millions more that have been committed to the tech hub over the next five years.
▶ 1:28:16Sen. Baldwin: This week, the administration announced a freeze on all federal financial assistance passed by congress, including on a bipartisan basis, as most bills out of this committee and out of the senate are. Mr. lutnick, I'm looking for a yes or no. Should wisconsin's biotech hub the concerned that they may not receive future tranches of funding that were pledged?
▶ 1:28:40Mr. Lutnick: I think the best answer I can give you is I have to look into it and understand. I cannot give you an answer as I sit here right now, because I don't know the details. I try to answer everything as best I possibly can. If I don't know the details, all I can say is I don't know the details.
▶ 1:28:59Sen. Baldwin: I think you will hear from a lot on this panel particularly. His is a key part of how we lead innovation in the united states. The support for our bipartisan work on this will be very important. You and I spoke also about the impact the trade war will have on wisconsin's farmers and manufacturers. I know senator fischer just asked you about this also.
▶ 1:29:28Sen. Baldwin: I wanted to say their experience under the first trump administration makes them really nervous this time around. According to the department of agriculture, america's farmers lost $27 billion in export sales in 2018 and 2019, a large part because of the china tariffs.
▶ 1:29:50Sen. Baldwin: A generous share of wisconsin's milk production ends up in dairy products exported to places outside of the U.S., and proposed tariffs on mexico, canada, and china -- three of the main export destinations for U.S. dairy products -- are likely to reduce their exports to a degree that would harm our milk prices and processor profitability significantly.
▶ 1:30:19Sen. Baldwin: And I have been hearing from wisconsin manufacturers who are very concerned about supply chains and their own facilities that are in other countries. Wisconsinites are concerned that prices are going to go up. What would you say to wisconsin farmers, wisconsin manufacturers, who are concerned about their exports, their supply chains, and retaliatory tariffs.
▶ 1:30:42Mr. Lutnick: Are farmers, ranchers, and fishermen are the best in the world, and they are treated poorly. Canada, as we spoke about, treats our dairy farmers horribly. That has got to end. If canada is going to rely on america for its economic growth, how about you treat our farmers, ranchers, and fishermen with respect?
▶ 1:31:06Mr. Lutnick: I think the president and our trump administration is going to improve the lives and is focused on improving the lives of our producers, our farmers, and ranchers. These are vital. I'm going to work hard for example for your dairy farmers. They do better in canada than they have ever done before. That is a key focus of this administration. Up a baldwin can you commit to the american people that prices will not go up?
▶ 1:31:32Mr. Lutnick: I can commit that the economy of the united states of america will be much better. A particular product's price may go up, but it is not inflationary. The top countries are tariffs. India and china have the most tariffs and no inflation. It is just a nonsense that tariffs cause inflation. It is nonsense.
▶ 1:31:54Sen. Baldwin: Thank you for your time.
▶ 1:31:56Chair Cruz: Thank you. Senator brown.
▶ 1:32:01Sen. Brown: The reason we are short and her questions is because you are short on your answers. It is pleasing. And you for being direct. Want to indicate to you that we will have an opportunity to be well acquainted. I chair the appropriations subcommittee that funds the department of commerce. You have impressed me. That is what I was looking for.
▶ 1:32:21Mr. Lutnick: Yes to your first question.
▶ 1:32:25Sen. Brown: Me show you my questions. Let me tell you something about the grant -- you have an opportunity to make this b-grant program work. Let me also tell you the dollars are subject to taxes. So the company that receives the grant to get broadband into rural and underserved areas has to pay taxes on the money received.
▶ 1:32:53Sen. Brown: This is not something you can directly do something about, what we have legislation to eliminate the tax. It seems to me that if you want that grant program to work and actually get the dollars to the people across the country, including kansas, we broadband services, reducing the amount of money that is available by taxing the grant makes no sense. Am I missing something here?
▶ 1:33:15Mr. Lutnick: What you have said is entirely sensible.
▶ 1:33:20Sen. Brown: That is not my first question. That was too easy. We are looking to solve that problem. Your support at some point in time may be helpful to us. I want to talk about trade policy. I was going to ask about your vision for agriculture. I want to highlight kansas as one of those states -- this is a very rural committee. Members of this committee often come from rural parts of the country. There are significant challenges to farmers and ranchers.
▶ 1:33:47Sen. Brown: Also, I would add to that list -- we have a lot of small manufacturers who make farm equipment, and the consequence of a lousy farm economy has a consequence, but so do tariffs on steel, metals, aluminum, and the manufacturing product of process -- in the first administration, president trump included a robust 301 tariff exclusion process for american business. An exclusion process was part of the department of commerce.
▶ 1:34:21Sen. Brown: The exclusion from a tariff -- do you have thoughts about that?
▶ 1:34:23Mr. Lutnick: The president signed an eo directing congress and the ustr to do a rigorous study. I'm going to let the experts drive this study. On a more simple view of tariffs, I think the president is of a like mind, which is that the steel and aluminum had 560,000 applications for exclusions. It just seems that is too many.
▶ 1:34:52Mr. Lutnick: I think we need to simplify it and make it more effective.
▶ 1:34:55Sen. Moran: Let me ask a question about tourism. You, within the department of commerce, have the national travel and tourism office. There is a creation of a large-scale sporting event task force. We would encourage you to implement it. This arises because of major events that are soon to occur in the united states.
▶ 1:35:25Sen. Moran: Fifa and soccer tournaments across the country. The U.S. olympics coming to los angeles. These are huge events that developed lots of economic activity in the country and need the attention of the department of commerce. Does this make sense to you?
▶ 1:35:43Mr. Lutnick: That is a good idea.
▶ 1:35:47Sen. Moran: Thank. Finally, kansas, 200 50 million years ago, was covered by an ocean. Therefore, I have a fish question. [laughter] the previous administration proposed a rule that sought to amend vessel speed regulations in an effort to further protect the endangered north atlantic right whale. The intent find this rule, I suppose, is commendable, although the industry was not consulted in its promulgation.
▶ 1:36:19Sen. Moran: Do I have your commitment that as secretary, your department will work with the U.S. marine industry including marine and maritime technology providers? There is science and technology that is being left behind, and I want to make sure it is considered in the effort to protect marine life while also leveraging that technology available.
▶ 1:36:39Mr. Lutnick: Absolutely.
▶ 1:36:41Sen. Moran: Thank you, sir.
▶ 1:36:43Chair Cruz: Thank you. Senator markey?
▶ 1:36:46Sen. Markey: Thank, Mr. chairman. On monday night, president trump's budget office issued a memo that directed agencies to cut off all federal spending. All federal spending outside of payments to individuals. The trump administration issued this order even though the spending was authorized and appropriated by congress and intended to benefit the american people.
▶ 1:37:17Sen. Markey: The article one power of the purse, the benefit is supposed to flow to the american people. The freeze could affect semiconductor grants, broadband grants, fisheries, disaster relief, habitat conservation -- all programs in the department of commerce. Do you believe this action by president trump was law?
▶ 1:37:43Mr. Lutnick: I rely on the president. If his advisers say it was, then I will rely on that, on his advisers.
▶ 1:37:54Sen. Markey: Well, that is an unacceptable response, because this action has caused mass confusion, disrupted critical payment systems, and violated directly federal spending statutes outside of this committee and congress.
▶ 1:38:12Sen. Markey: So how can we be sure that if congress passes an appropriation for the department of commerce, that you are going to feel fully obligated to execute that law and spend the funding as it is written? Will you spend it as we wrote it?
▶ 1:38:34Mr. Lutnick: It is my promise that I will try my best to give this committee and the congress the benefit of the bargain, and you have passed. If you want broadband, if you want chips in america, my job is to execute on that plan. This cause will allow my -- this cause will allow me time to study and attacked this rigorously.
▶ 1:39:03Mr. Lutnick: I promise I will give you as best as I can the benefit of the bargain, that you have appropriated it for. That is my objective.
▶ 1:39:11Sen. Markey: That is exactly right. We do it. We do the negotiation. Article two, the president is supposed to execute. President trump directed you to unlawfully withhold federal spending that was authorized by congress. Would you comply with that?
▶ 1:39:28Mr. Lutnick: I guess I will be spinning a lot of time with lawyers, but I do not think that is the way it will work. Upon markey it is already working. -- Sen. markey: it is already work. We know the president is already unlawfully in violation of the statute. He fired inspectors general. That was not in compliance with the law. What happened two nights ago with the freezing of all federal funds -- that is in violation of the law.
▶ 1:40:00Mr. Lutnick: The benefit of the bargain. Again, my question to you is, given the unprecedented times we are in, and the commerce committee going back to being the first committee in congress, we are wondering, obviously, whether or not you are going to ensure that the law that we pass , the funding that is going out to all of these companies, all
▶ 1:40:31Mr. Lutnick: Of these individuals -- will you ensure that an unlawful act is not followed at the department of commerce?
▶ 1:40:38Mr. Lutnick: Interestingly, the beads program has not connected anyone yet and the chips has not really distribute it much money. So the timing is not really impacted. We will work hard. I commit to you to work hard to deliver to this committee the benefit of the bargain. You appropriated. You should expect me to deliver efficiently and effectively the outcomes that you anticipated, or better.
▶ 1:41:05Mr. Lutnick: That is my objective, and that is my promise to you.
▶ 1:41:10Sen. Markey: And you understand the president has already violated the law on inspectors general. You are already in violation of article one's power of the purse. And we believe quite clearly this issue is going to be a pattern, and we need to know that the cabinet secretaries that we are voting on are going to comply with the law.
▶ 1:41:35Sen. Markey: That is the bargain that was struck with the american people, to make sure they get the funding, they get the programs which are going to protect their freedoms as well. I am not hearing a clear answer on that.
▶ 1:41:47Mr. Lutnick: I will comply with the law. That's a clear answer for sure.
▶ 1:41:53Sen. Markey: But the law is not the president. The law is what we have passed. That is the law. And what is happening right now is that the president is seeking to arrogate all of that constitutional power into his hands, and that is not the law. That is an abuse of the law. That is a violation of constitutional separation of powers and an irrigation of power into one office.
▶ 1:42:18Sen. Markey: I understand the unitary government theory that is out there, but it is not constitutional. We do not have that as our system of government in our nation. So we are going to be very, very attentive to how, in fact, you will be conducting as secretary of commerce, because the people deserve the benefit of the bargain that was faithfully executed and constructed by this committee, in terms of the benefits that flow to the american people.
▶ 1:42:48Sen. Markey: Thank you.
▶ 1:42:49Chair Cruz: Senator sullivan.
▶ 1:42:51Sen. Sullivan: Thank you, Mr. chairman, Mr. lutnick. Congratulations to you and your family. Thank you for that powerful opening statement. I appreciated our meeting. I am really enjoying this hearing. All the focus on fish is great. And in all seriousness, certain secretaries, most secretaries in my view, have not embraced their role that they are really important to the fishing community.
▶ 1:43:21Sen. Sullivan: You and I talked about this is really important to my state. Alaska is the superpower of seafood. Over two thirds of all seafood harvested in america -- commercial, subsistence, sport -- is harvested in alaskan waters, over two thirds. We are it. We are the 800 pound gorilla. Tens of thousands of alaskans are connected to this industry and we are a huge powerhouse in terms of american exports.
▶ 1:43:54Sen. Sullivan: Mr. lutnick, the vice president in his opening statement called you a product guy, a sales guy, a good dude. That is a quote from the vice president, "good dude." want to also maybe give you the title of godfather of american fishermen, or the patron saint of american fishermen.
▶ 1:44:15Mr. Lutnick: This is working for me. This is really working for me.
▶ 1:44:20Sen. Sullivan: Keep our focus on these great americans. Look at "deadliest catch," and things like that. And to be a leader -- that is not always happening. That has not usually happen with the secretaries of commerce. Can you commit with me on doing that?
▶ 1:44:38Mr. Lutnick: I love to fish and I'm happy to commit to the fishermen of the united states of america. They are one of our great assets and it is easy for me to promise to take care of them.
▶ 1:44:47Sen. Sullivan: And since you love to fish, this next question might be the easiest one you got all day. I need a commitment from you to come to alaska. You can bring your family.
▶ 1:44:56Mr. Lutnick: As long as I can bring my family.
▶ 1:45:00Sen. Sullivan: You can go fishing and meet these great american fishermen who are my constituents. It would be great for you to get up there soon to meet them. Can I get your commitment to do that?
▶ 1:45:09Mr. Lutnick: It is my pleasure.
▶ 1:45:12Sen. Sullivan: We already talked about the last four years have been tough on my state. This is a chart showing all over the place the last frontier lockup, we called it. 70 executive orders and actions from the biden administration, singularly focused on shutting down alaska. 70. This is not -- fortunately, this is now a thing of the past. We are when to get rid of that. On day one, the president issued this executive order.
▶ 1:45:43Sen. Sullivan: President trump -- it is called unleashing alaska's extraordinary resource potential. And it is long. And very detailed. The secretary of commerce has mentioned -- it is the policy of the united states. This is from president trump on day one. To fully avail itself of alaska's vast lands and resources for the benefit of the nation and the american citizens who call alaska home.
▶ 1:46:15Sen. Sullivan: Your mention of this as secretary of commerce -- can I get your commitment to work with me on implement every aspect of this really great trumpet day one executive order? Thank you. You mentioned disrespect for our fishermen. You and I talked about what we have been enduring for the last 10 years.
▶ 1:46:39Sen. Sullivan: Russia instituted a ban on any exports of american seafood in 2014, and yet we had open borders essentially for them the last 10 years, taking market share -- literally the most disrespectful, unfair trading situation I can see anywhere in the world, coming into our market share. We could not export one fish to russia. I worked really hard to get that changed. We got a band.
▶ 1:47:10Sen. Sullivan: And then the russians start sending their fish to china, to essentially create a loophole, and then to come into the U.S.. We shut that down, finally. Can you work with me to make sure we don't have that incredibly unfair -- russia bands everything and they can import everything here. Ridiculous. Same with china. You are a sales guy, a product sky.
▶ 1:47:34Sen. Sullivan: I want you to commit to me to promote american freedom fish, alaska freedom fish, and don't allow communist fish from russia and china coming into our markets.
▶ 1:47:44Mr. Lutnick: We've got to get rid of those communist fish. [laughter]
▶ 1:47:49Sen. Sullivan: Can I get a commitment on that?
▶ 1:47:51Mr. Lutnick: I do. [laughter]
▶ 1:47:55Sen. Sullivan: No communist fish. Freedom. That's what we want. Finally, the chairman is going to focus this committee a lot on energy, which I think is great. I know you care about unleashing our extraordinary energy potential.
▶ 1:48:13Sen. Sullivan: One of the biggest areas of focus to the trump day one io -- eo on unleashing alaska's extraordinary resource potential is moving forward and finally getting done this massive alaska lng project we have been working on for a number of years. We have all the permits from the trumpet ministration. Biden blocked those.
▶ 1:48:37Sen. Sullivan: This would create thousands of jobs, would revitalize the american steel industry, would reduce our trade deficit by about $10 million a year. And you commit to work with me, president -- the secretaries of interior and energy, and other cabinet officials, including our asian allies, to make this project a reality which would be great for our workers, great for our trade deficit, and really
▶ 1:49:08Sen. Sullivan: Boost america's national security?
▶ 1:49:08Mr. Lutnick: I can.
▶ 1:49:10Chair Cruz: As a texan, I do want to clarify for the record that red snapper are not communist fish. And in a nod to my alaskan friend, neither are pink salmon. Senator peters?
▶ 1:49:26Sen. Peters: Thank you, Mr. chairman. Congratulations on your nomination. I appreciate the wide ranging discussion we had in my office recently. I know that tariffs are certainly powerful and a positive tool that can be used, and that might need to be used strategically. They need to be used thoughtfully. That is why I called for 100% tariffs on chinese vehicles last year.
▶ 1:49:55Sen. Peters: I'm going to continue to fight for aggressive trade policy when it comes to our relations with china. As the senator from michigan, and particularly focused on manufacturing. We know how to make things in michigan. We cannot be a great country if we do not make things. That is what we do them I state. In that sector, as well as creating good paying jobs that come from manufacturing.
▶ 1:50:24Sen. Peters: Concern the president trumps plan to impose tariffs on canada and mexico, in a matter of days is what we are hearing, could hurt our manufacturers, who do considerable trade back and forth, as we discussed in the office. Michigan is the home -- of two of the top three border crossings in america, we are too. A lot of auto parts go back and forth.
▶ 1:50:53Sen. Peters: It is a highly integrated industry and our auto companies are very concerned about what those tariffs might mean particularly to the cost of vehicles. Already, something we have discussed -- I have been concerned about the high cost of vehicles. Any families cannot afford them now. If tariffs are put in place, the seamless trade that goes on with canada -- that could have an impact on prices and make cars even more unaffordable.
▶ 1:51:23Sen. Peters: I don't think that is something the american people want to see. I think that would hurt consumers and also those workers. The question for you is, talk me through how those tariffs will be implemented, what you are thinking will happen. And how it will have an impact on prices, particularly in the short term. All this stuff takes time. When it comes to manufacturing, that is not an industry that can turn on a dime.
▶ 1:51:55Sen. Peters: It is much more complicated.
▶ 1:51:57Mr. Lutnick: The big terrace view is going to be studied. The president launched that in an executive order where he asked the commerce department and the ustr to study the tariff model long-term. Short-term issue is illegal migration, and worse still, fentanyl coming into this country, and killing over 100,000 americans. There is no war we could have that we kill 100,000 americans.
▶ 1:52:25Mr. Lutnick: The president is focused on ending fentanyl coming into the country. You know that the labs in canada are run by mexican cartels. This tariff model is simply to shut their borders with respect. Respect america. If you are our biggest trading partner, show us respect. Trust the border. It is not a tariff. It is an action of domestic policy.
▶ 1:52:53Mr. Lutnick: Shut your border and stop allowing fentanyl into our country, killing her people. This is a separate tariff to create action from mexico and action from canada. As far as I know, they are acting swiftly. If executed, there will be no tariff. If they don't, there will be. It is an action oriented model.
▶ 1:53:20Mr. Lutnick: The ordinary tariffs need to be studied and examined, and that will start, as the eo said.
▶ 1:53:28Sen. Peters: So that is a separate tariff. What would be the time left -- timeline on that?
▶ 1:53:33Mr. Lutnick: I think studies will come out at the end of march and april and you will hear about those at that time. A big macro issue with tariffs are being studied. The micro issue, that needs to end. We need to protect americans from fentanyl. Our trading partners in canada and mexico should stop disrespecting us and allowing this to come through our border.
▶ 1:53:59Sen. Peters: I am with you all the way being a northern border state. I am a ringing member of homeland security. I want to do that. What is going to happen in april? What could that mean in terms of the increased cost to americans if not properly implemented or properly thought through? What sort of assurances can you give us that we will not see that when the second set of tariffs are implemented? It sounds like that is your plan.
▶ 1:54:27Mr. Lutnick: We are going to study those, the actions and economy of america and how it works. If you think about it, we need to grow domestic manufacturing. Michigan is one of the great places where we build things. The car manufacturing went to canada, went to mexico. It is important that that come back to michigan and come back to ohio. Come back to the great states of america that can build.
▶ 1:54:56Mr. Lutnick: I think a thoughtful tariff policy that drives domestic manufacturing -- that went especially to the workers in michigan.
▶ 1:55:06Sen. Peters: Thank you.
▶ 1:55:07Chair Cruz: Senator blackburn?
▶ 1:55:11Sen. Blackburn: We are delighted that your friends and family are here to support you. We hope you will serve our nation well as commerce secretary. You have heard a good bit about spectrum today and the ntia, the fcc, the work they are doing. I want to highlight how critical getting that spectrum now -- we need a lot of that mid band spectrum going to auction.
▶ 1:55:40Sen. Blackburn: We have auction authority that has lapsed. Chairman cruz is working to move us forward to re-implement that. We would like your support there. We realize how important it is to have connectivity all across the country. We want to do this without preference for whether it is wireline, wireless, fixed wireless, satellite. The point is to get people connected.
▶ 1:56:09Sen. Blackburn: Your attention on that issue will be welcomed. Thank you for that. I want to talk with you a little bit about china. This is something in tennessee that many of our innovators and manufacturers talk about. China is now the leader in 57 critical and emerging technologies when it came to holding frameworks and patents.
▶ 1:56:40Sen. Blackburn: They were the leader in three in the mid to early to thousands, 2010. Now, they are leading in 57. We are very concerned about this. Senator welch and I worked on this issue of looking at these critical and emerging technologies. What we have found is that one of the issues is the U.S. patent office, which is one of those agencies that you oversee.
▶ 1:57:13Sen. Blackburn: Many of the innovators in tennessee talked to me about the frustration that they had with trying to get a patent, and the amount of time it takes. The backlog of applications is 820,000. It takes 21 months to get a patent pending.
▶ 1:57:37Sen. Blackburn: As you know, some of our auto engineers, some of her health care engineers that are working on algorithms and new delivery systems, we don't have that long to get that kind of assurance. Work with us. We need to do a pilot project so we can push forward ai and quantum and some of these patents that are requested in these areas if we are going to go back to beating china.
▶ 1:58:07Mr. Lutnick: The backlog is unacceptable. My pursuit will be the rigorous reduction of that to get it down . It used to historically be 5000. I thought that was unacceptable. I am a patent holder. I have used the patent office for many years. It could be much more productive. The chinese are abusing us. They don't give us protection in china. They come and use our patent office against us.
▶ 1:58:40Mr. Lutnick: We are going to work on ending that and making sure our american inventors get taken care of quickly and effectively.
▶ 1:58:45Sen. Blackburn: When I saw you held over 400 patents, I thought this is someone that can help straighten out the U.S. pto, which needs to be done. The other thing I want to talk about is supply chains. This comes up for you in commerce. Gary peters and I have done a good it of work on auto manufacturing, as tennessee has become such a manufacturing center.
▶ 1:59:12Sen. Blackburn: And you are going to be key in securing these supply chains for the american auto manufacturing sector, and we want to make certain that whether it is autos, whether it is equipment for data centers and computers, facilities like the one going into memphis in my state -- the supply chain issues have been noticed. They have been harmful.
▶ 1:59:43Sen. Blackburn: They have been expensive. Many times, really a loss for our manufacturing entities. Whether it is the components that are needed for high-tech assembly, we need to make certain that we straighten out the supply chain system, so that we are able to repatriate U.S. manufacturing.
▶ 2:00:08Mr. Lutnick: Exactly. We need to bring manufacturing and supply chain domestic so that the production is domestic and flows through and employs great americans to do so, completely. >> thank you, you'll back.
▶ 2:00:21Chair Cruz: Thank you. Senator duckworth?
▶ 2:00:25Senator Duckworth: Mr. lott nick, welcome. Yesterday, trump paused grants and loans and for the second week in a row's actions so anxiety and confusion. When congress directs federal agency how to direct funds when the funds of an obligated, the funding must be dispersed. That is federal law.
▶ 2:00:53Senator Duckworth: This kind of chaos will make america less globally competitive, not more. Other nations are watching and figuring out how to get themselves an advantage while we deal with the chaos of a poorly executed development administration recently awarded $51 million to the illinois fermentation and agriculture bio manufacturing tech hub.
▶ 2:01:20Senator Duckworth: We have discussed tech hubs and how important they are, important across the country. This is cutting edge work. Keeping america global and competitive. If confirmed, would you commit to dispersing grant funding from the department of commerce on time and without delay?
▶ 2:01:39Mr. Lutnick: If you add rigorously making it as efficient as possible, I can say yes.
▶ 2:01:46Sen. Duckworth: If trump directed you to do something illegal or constant -- in constitutional, which you refuse to obey?
▶ 2:01:54Mr. Lutnick: He won't.
▶ 2:01:56Sen. Duckworth: Would you refuse an unconstitutional or illegal order?
▶ 2:02:02Mr. Lutnick: The legal department of the department of commerce is excellent. I would go and get their advice and guidance. But this won't happen. It just won't happen.
▶ 2:02:13Mr. Lutnick: So, your answer is?
▶ 2:02:16Mr. Lutnick: It's a hypothetical, it won't happen.
▶ 2:02:20Sen. Duckworth: He has given illegal orders before. He asked the department of defense to shoot protesters in the leg.
▶ 2:02:27Mr. Lutnick: I don't know that.
▶ 2:02:29Sen. Duckworth: We can send you that information. All right. As we discussed last month, policy is critical for national security. Supporting small and medium-sized manufacturing, developing strong relationships with export controls to keep critical materials out of the hands are bad actors helps to keep the country safe in the economy strong and I enjoyed our conversation about the fact that our economy at the department of
▶ 2:03:00Sen. Duckworth: Commerce is incredibly important to america's national security on a global scale and I think we enjoyed our conversation on that. Agriculture and manufacturing are critical for the nation as a whole as a part of that national strength. Not only generate good paying jobs, but advance U.S. innovation in a highly competitive global economy. You touched on that today and I enjoyed your remarks. If confirmed, how would you work to advance agricultural and manufacturing industries at home and abroad?
▶ 2:03:32Mr. Lutnick: Farmers, ranchers, and fishermen are treated with disrespect overseas. Europe comes up with all of these sort of policies that our ranchers cannot sell steak. If you saw a european steer and an american steer, it's laughable. American steer's are three times the size. The stakes are so much more beautiful.
▶ 2:03:57Mr. Lutnick: They make up this nonsensical set of rules so that our ranchers and farmers cannot sell there. It's nonsense. They don't like our fertilizer a little bit? We need to change those rules and end of the disrespect to our farmers, ranchers, and fishermen . That is one of the things I'm just really excited about.
▶ 2:04:15Mr. Lutnick: I am going to it's clear in they need to be able to sell their wares around the world and need to help end the disrespect that they get elsewhere.
▶ 2:04:33Sen. Duckworth: I agree with you that our farmers are a national treasure and we should give them all the support they need in order to be successful. When done well, joint ventures with partner nations can boost economic growth, as well as enhance national security. This confirmed, what would you do to foster an environment of joint ventures with partner nations, especially those with whom we have national security agreements like japan or korea, to enhance economy and security?
▶ 2:05:03Mr. Lutnick: Our great allies have taken advantage of us. Like the steel in japan, appliances in korea. They have taken advantage of us. It is time for them to partner with us and bring that production back home. So, I think we are going to work closely with our allies to increase manufacturing productivity at home and I think that your way of thinking about it by saying work together to bring it home, it's really important for us and really important for the workforce.
▶ 2:05:33Sen. Duckworth: Thank you. I'm overtime.
▶ 2:05:36Chair Cruz: Thank you senator young.
▶ 2:05:41Senator Young: Good to see you, Mr. let nick. I enjoyed our visit in the office. One of the things you demonstrated to me in that roughly one hour of visiting is that you really understand that science and technology are going to play really important roles going forward in our economic growth, national security, demonstrating an understanding that china has prioritized, through a number of recent initiatives, boosting science and tech funding and progress in
▶ 2:06:15Senator Young: A number of different technology fronts. How do you envision, Mr. let nick, should you be confirmed, increasing support and funding for basic research so that the united states remains at the forefront of global innovation and job creation?
▶ 2:06:29Mr. Lutnick: We have the greatest university system in the world. We need to encourage that productivity from our universities, from our great scientists. We need to enhance their ability to put -- get patents to protect them and drive the model of ai innovation and make sure that the baseline innovation is american. I mean, these things are vital for us.
▶ 2:06:57Mr. Lutnick: We need to have standards, cyber security standards for ai innovation that keep things american the way you think about it. It's vital for us to do it here and now.
▶ 2:07:09Sen. Young: Have you given any thought to the leakage of our investments and the breakthroughs that are made, the intellectual property leakage to adversary countries and parties and how we might continue to be vigilant against that?
▶ 2:07:25Mr. Lutnick: How can it be more clear than this week, when deepseek, chinese ai, says they were able to create things it dirt cheap. How? By leveraging what they have taken from us, stolen from us, or leveraged from us. It's outrageous and needs to be addressed.
▶ 2:07:43Sen. Young: Indeed. Thank you. It is of paramount importance that the united states continue to lead in an international collaboration and engagement on ai as you just alluded to. I would say that the voluntary standards that have been done at nist need to be continued to be done in some way.
▶ 2:08:12Sen. Young: If confirmed, this will be under your purview. It has been a vitally important nonregulatory agency when it comes to U.S. leadership on ai, focusing on voluntary standards rather than heavy-handed regulations. So, what are your thoughts on artificial intelligence and the role the department of commerce of play and continued innovation?
▶ 2:08:39Sen. Young: Will you commit to continuing to support the great standards work being done at nist?
▶ 2:08:45Mr. Lutnick: I think they have some of the greatest scientist in the world, they understand ai technology, quantum technology. This is a central hub of knowledge of the american government, which I'm really excited to oversee. I think standards is the right model.
▶ 2:09:03Mr. Lutnick: As I have said, the way we have done cybersecurity, the gold standard of the world, everyone in the world follows our model, we should try to have a light touch model like that with ai, set the standard so that the world heeds our standards and goes with our standards, that would be very important for america and it is something I'm going to try.
▶ 2:09:24Sen. Young: You can imagine a future through which your leadership and those of others in the administration we are able to tease out our own standards and harmonize them with other countries. Non-china countries. And then for those countries to produce products and export them to the rest of the world, they would have to abide by our standards of transparency, openness, consumer protection and all the rest of it.
▶ 2:09:52Sen. Young: I think you are headed on the right track, they are, and I hope we will have an opportunity to work on that should you be confirmed. Let me turn, sir, to digital trade. Despite the strength of U.S. digital services, the previous administration abandoned U.S. leadership on digital trade. They reversed decades of bipartisan policy that promoted our digital exports.
▶ 2:10:20Sen. Young: This includes withdrawing support for key digital trade provisions at the wto, ignoring bipartisan congressional correctives, leaving american companies vulnerable to discriminatory trade barriers in digital protectionism abroad. Mr. let nick, if confirmed will you commit to restoring U.S. leadership in digital trade by advancing strong digital trade rules and prioritize leasing U.S. exports?
▶ 2:10:48Mr. Lutnick: Yes.
▶ 2:10:49Sen. Young: Fantastic. I'm out of time.
▶ 2:10:52Chair Cruz: Senator rosen?
▶ 2:10:55Senator Rosen: Mr. let nick, thank you for being here, pleasure to meet your family. I appreciated the conversation we had a head of the hearing and I look forward to your responses on how to carry out the department mission to support american innovation.
▶ 2:11:14Senator Rosen: With the unconstitutional move by the administration to freeze federal funding like the tech hubs program, building out a real broadband infrastructure, important in nevada, I'm skeptical on the ability of this administration to deliver on that mission. I remain concerned that the policies outlined by this administration will raise prices on everyday goods and have the potential to make housing and energy more expensive.
▶ 2:11:43Senator Rosen: With that, I am going to turn to a few critically important things to the economy and nevada that we have touched on. Of course, everybody knows about southern nevada, las vegas, they are travel and tourism, key to the nevada economy, top driver of every state in the nation.
▶ 2:12:04Senator Rosen: That is why several years ago, when I was chair of the subcommittee on tourism, trade, and export promotion, cross the aisle we passed bipartisan legislation with a great assistant secretary of commerce for domestic tourism. Unfortunately, we did not nominate anyone for the position even after we secured funding in last year's spending bill.
▶ 2:12:27Senator Rosen: With tourism as a top economic driver everywhere, it's important -- important, urban and rural, that every state in the nation has someplace wonderful to see and we as americans love to do that. Yes or no, will you quickly work with me to fill this open position with a qualifying nominee to be sure the department supports travel and tourism across the united states?
▶ 2:12:53Mr. Lutnick: Yes.
▶ 2:12:54Sen. Rosen: Moving on quickly to nevada, something else, we have a lot of sunshine. One of my top priorities, we have a lot of stars and a lot of sun and some of the darkest skies and biggest skies on the strip. A lot of sunshine up and down the state. One of my top priorities has been to protect the solar industry and the great paying jobs it creates in nevada.
▶ 2:13:20Sen. Rosen: We have a lot of solar power in nevada and I want to keep these good paying jobs here in america and reduce our up -- our reliance on china as it comes to the solar energy industry. We can talk more about solar manufacturing, but with that in mind, will you work with me to make sure the new tariffs by the administration do not hurt american solar jobs by making components of the supply chain prohibitively expensive?
▶ 2:13:49Sen. Rosen: I believe that failure to do so will hurt our many small businesses in nevada, small and large, in nevada and across the country, as this is a booming industry.
▶ 2:14:00Mr. Lutnick: I would be glad to commit to studying that.
▶ 2:14:03Sen. Rosen: Thank you. I want to move on to something that everyone has been talking about, the broadband defunding. Ntia approved the application to a mock $16 million to affordable reliable high-speed innards that in the top 10 largest states, we are one of the most madness and a deep frontier state with a significant challenge.
▶ 2:14:33Sen. Rosen: Even before omb guidance is issued and they halted federal funding, some of the administration advocated for drastically altering the program , clawing back funds already allocated to the states because of our geography and geology. We are years into the process in nevada, as well as a few other states. We are on the edge of buildout. Before you answer the questions, let me remind you at the outset that laws are not just simply suggestions of congress.
▶ 2:15:05Sen. Rosen: Can you commit that nevada will not have to restart, as it has been a years long process, and will receive the full allocated amount the congress allocated to it under the program? Given that the plan has already been approved?
▶ 2:15:20Mr. Lutnick: I can commit to you that if it has been rigorously done and deeply efficient and it is the most efficient use to get broadband to your constituents, then it is easy for me to commit to it. You wouldn't mind if we made it.
▶ 2:15:37Sen. Rosen: The project has already been approved. We are complying with all requirements and the guidelines and are about to build out laws and allocations from allocations from congress. They are not simply suggestions, it is the law. Just asking, like others, if you will allocate what has already been complied with and what is ready to be built?
▶ 2:16:03Mr. Lutnick: I will read through that, I can commit to read through the document, understand it with precision to make sure that the outcome you appropriated for, broadband to your citizens, I am totally committed to that. But I want to make sure it is done efficiently and effectively.
▶ 2:16:22Sen. Rosen: That's not the question. The question is with -- will you comply with the appropriators of the U.S. congress?
▶ 2:16:30Mr. Lutnick: I would say at the same way again.
▶ 2:16:33Sen. Rosen: That laws or suggestions?
▶ 2:16:36Mr. Lutnick: Absolutely not.
▶ 2:16:38Sen. Rosen: Thank you.
▶ 2:16:39Chair Cruz: Senator budd?
▶ 2:16:43Senator Budd: Welcome to you and your family. Thank you for your willingness to do this, to step away from quite a roll. Also, your family as well who supports you. We want to talk for a minute about something mentioned several times, deepseek.
▶ 2:17:03Senator Budd: The release of the chinese ai model that was allegedly trained on the batch of export compliant older generation semi conductors for a fraction of the costs of our models, it shows that china, however they got there, they might not be as far behind as we assumed. If confirmed, how would you approach the issue to make sure that the U.S. wins the ai race against china?
▶ 2:17:26Senator Budd: And as you enter this role, keep on your hat as an entrepreneur without losing that, reflecting on why, nader gary tan, who said that as a result of this deep-sea sea disruption a few days ago, said 1000 flowers will bloom specifically as a result of deepseek. How do you see this as an opportunity and how do we win?
▶ 2:17:51Mr. Lutnick: This show that our export controls not backed by tariffs are like a whack a mole model where they get prevented over here and china figures out a way around it over there. We have got to find a way to back our export controls with a tariff model so that we tell china that you think we are your most important trading partner and when we say no, the answer is no. It's a respect thing.
▶ 2:18:23Mr. Lutnick: They have disrespected us. Figured out the ways around it. I do not believe that deepseek was done above board. That's nonsense, ok? They stole things. They broke in. They took our ip. It has got to end. I will be rigorous in our pursuit of restrictions and enforcement. Keeping us in the lead. We must stay in the lead.
▶ 2:18:48Sen. Budd: Thanks for that. Next question to ask you about, the risk of our models being hosted on chinese servers for american users. At the risk of reverse engineering models. The broader question is about ip. Can you dig in to how you want to enforce american intellectual property?
▶ 2:19:10Mr. Lutnick: The chinese use our patent office against us. They have huge applications that are growing like fire. They are trademarks. They would say senator budd, then they would say s budd, they go right around your trademark and abuse it. We need to stop that.
▶ 2:19:32Mr. Lutnick: We need to address it, stop it, and it, and have countries understand that if you do not respect our company's ip there, you should not respect the same treatment here. Reciprocity is a word that really is effective. We are treated horribly, we want that to change and you should expect the same treatment here.
▶ 2:19:58Sen. Budd: With your financial background, the deepseek founding company, I think it was also a hedge fund, I'm still getting information on this. Is there perhaps a financial play from china because of the loss in market cap, perhaps even a short sale play on the markets?
▶ 2:20:16Mr. Lutnick: I don't know.
▶ 2:20:18Sen. Budd: Is it worth looking at?
▶ 2:20:20Mr. Lutnick: Of course.
▶ 2:20:22Sen. Budd: Thank you. Are you concerned that in the U.S. we are focused and even here in congress are focused on regulating our own ai activities at the expense of china unlocking artificial general intelligence before we do?
▶ 2:20:37Mr. Lutnick: Yes.
▶ 2:20:39Sen. Budd: What do you think we need to do here to prevent us falling into the trap?
▶ 2:20:44Mr. Lutnick: We were successful on the internet of creating greatest technology companies in the world because of the american touch we put on it. Did it the american way and that is why the tech companies of the world are ours. We need to do the same thing with ai, making sure we set standards the world meets so that they are american standards the world meets. Doing it the american way, we know it's the winning way. Our allies know that.
▶ 2:21:15Mr. Lutnick: We need to set those standards.
▶ 2:21:17Sen. Budd: Following up on a different topic that involves fish, the previous administration withdrew their whale strike reduction rule that would have had disastrous consequences for those in north carolina and on the coastal communities.
▶ 2:21:36Sen. Budd: Would you and your office continue working with the fishing and boating industry to develop policies and procedures to protect marine life without limiting access to the north carolina and national coastal waterways.
▶ 2:21:48Mr. Lutnick: Easy.
▶ 2:21:49Sen. Budd: Thank you.
▶ 2:21:51Chair Cruz: Senator kim?
▶ 2:21:53Sen. Budd: Senator kim: great to see you in your file -- your family, Mr. lepic. I represent the state of new jersey and I remember where I was when I saw the towers come down.
▶ 2:22:06Sen. Budd: As you were talking, I spent time on this hearing kind of counting through the people we lost in new jersey, how many of them were from cantor fitzgerald and if my number is right, it was over 230 that worked for cantor fitzgerald, which is roughly about one third of the victims from new jersey.
▶ 2:22:26Sen. Budd: I just wanted to express that with you, the people of new jersey certainly remember that day, will never forget it and the work that you did in that your colleagues did to try to help the victims families, I appreciate that.
▶ 2:22:39Mr. Lutnick: Thank you.
▶ 2:22:40Sen. Kim: In that sense of national security on that day I said I would dedicate the rest of my life to national security issues. Some of the things we talked about today actually, the goal is towards that direction.
▶ 2:22:55Sen. Kim: That's what brought the bipartisanship science act together, a sense of entering a new era of national security concerns and I guess I heard what you said about ships in science being an excellent down payment. What do you believe our role is in the U.S. government when it comes to building up industries and trying to be competitive?
▶ 2:23:21Sen. Kim: Are you someone that sees a role for government investment directly, like we had with chips in science, or are you someone that believes it needs to be more hands-off, more market driven that kind of capacity? Can you give me insight into how you would approach this?
▶ 2:23:38Mr. Lutnick: I think you gave the department of commerce the tools to bring domestic semiconductor manufacturing home . So, I think it needed that jumpstart and in a bipartisan way you created the jumpstart. I believe it was necessary and important.
▶ 2:23:59Mr. Lutnick: You are going to see this department of commerce bring domestic manufacturing semiconductor's, to the united states of america and drive it here. We are too reliant on taiwan. We need to have for national security, like for our business, production in america.
▶ 2:24:21Sen. Kim: I agree we want to see that manufacturing come back. Senator budd and others were talking about concerns around semiconductor manufacturing, ai, and other types of technologies. I guess what I'm trying to think through being a member of this committee and elsewhere, is there a 2.00 that we can build upon with chips and science?
▶ 2:24:46Sen. Kim: Have that coalition stay together and maybe not necessarily with chips anymore, but a different element of critical manufacturing or critical technology innovation, would that be something you are supportive of and applying it in a different sector?
▶ 2:25:09Mr. Lutnick: My job is to give you the benefit of the bargain. You passed chips in science. My job is to bring domestic production of semiconductor's home to america. Then we will have the full supply chain so that we are independent from the national security perspective. If I need help, I will come to you and talk to you about that, but first I need to execute what you have given me, chips in science, give me the benefit of the bargain.
▶ 2:25:37Mr. Lutnick: I'm not the kind of person who asks for more appropriations if we haven't delivered the first time.
▶ 2:25:42Sen. Kim: I hope that this is something we can work on together if you are confirmed, I think it's important. On top of that I would say look, you have a job not just selling things to the american people but I would hope that as you engage with the president, I'm not positive where he stands on chips and science. He calls it a bag deal -- bad deal, ridiculous program.
▶ 2:26:06Sen. Kim: I'm hoping that you and others can try to help engage their to see what it is we can do to move in a different direction. One last thing before I conclude here. You talked about tariffs. You talked about it country by country across the board. When it comes to country by country, is there a prioritization list? Are you distinguishing between allies and adversaries?
▶ 2:26:30Sen. Kim: As I started the question about china being an overarching concern that all of us have, why aren't we prioritizing predominantly on china when we have not seen whether or not we will be using multilateral tools when it comes to tariffs allowing us to magnify our own effectiveness going up against such a large economy like china? Like when they need those allies and partners they burn the bridges with tariffs, targeting it through our allies and partners at this stage?
▶ 2:27:00Sen. Kim: I wonder your thoughts.
▶ 2:27:02Mr. Lutnick: Chinese tariffs should be the highest. Adversary should be the highest. The fact that we americans cannot sell an american car in europe is just wrong. He needs to be fixed. They are our ally who is taking advantage of us and disrespecting us.
▶ 2:27:24Sen. Kim: I have no problem with the sentiment, but I ask you that as we go through this we keep in mind just the tremendous threat we are under right now in terms of our economic national security. With that, I will give it back to the chair.
▶ 2:27:38Chair Cruz: Senator schmitt?
▶ 2:27:42Senator Schmitt: Great to see you, great to see your beautiful wife here today. You should be proud. We are fortunate as a country to have you step up in your willingness to do this. Your career has been laid out. Your work in building a company, you should be very proud of it. And of course after the events of 9/11, you are truly admirable.
▶ 2:28:08Senator Schmitt: I have also seen your -- this is -- you have been successful, so it's not lost on me your willingness to serve in this capacity and it is a testament to how much you love this country. I think that is your motivation and we appreciate it. I do have to say something, though. My democratic friends on the others of the aisle have suddenly found religion on following the law. It is remarkable to me.
▶ 2:28:39Senator Schmitt: The reason why we have the freeze on grant applications right now is because the department of commerce outside of the law interpreted it to say that you need to hire enough ex-convicts to build a chips factory. The dei requirement is life slow down. You required small contractors to have climate action plans.
▶ 2:29:04Senator Schmitt: Spare me the outrage about suddenly now being concerned about following the law. The biden administration was lawless. Through every agency, tentacle, and artery, it was infused, this stuff, this activism. I agree with you, article one is supreme. We never voted on any of it. We never voted on any of it. I look forward to you following the law, as you have indicated you will.
▶ 2:29:33Senator Schmitt: I wanted to touch on a couple of topics. I wasn't going to do that. I'm just sitting here, listening . Space. I came into this chamber and this body two years ago. I never would have imagined I would be the ranking member of the spacing and science committee dealing with commercial space issues that are fascinating. America really is the innovator here. You and I talked about it. This is a real race. We are talking about ai but it's a real race with china.
▶ 2:30:04Senator Schmitt: They are serious about this and playing meaningfully in space. We are the leader right now but we wouldn't, if we didn't have the competition that we have in the private sector, we wouldn't be talking about going to mars. I know that we talked about this, but in this public forum that falls under your purview. Also, there is a small, there is a small agency within the department that I think we probably need to give more prominence to deal with these issues.
▶ 2:30:31Mr. Lutnick: I think space in the data that we can collect from space is fundamental to america. It's american innovation. But they have got to be american companies, right? It's vital that these are american companies controlled by america, part of our oversight. It's vital. We have the lead. We have to focus on it, encourage it, I think it will be a great national asset of hours going forward.
▶ 2:31:04Sen. Schmitt: Many people touched on ai and an armed services you see a kind of military application, a commercial application. A lot of people see it in separate buckets, but for the chinese communist party it's a dual use.
▶ 2:31:27Sen. Schmitt: Civilizations come and go because they lose the military application and what we are talking about with ai, the energy required to go do this, the innovation, we are better innovators than them. They copy pretty well. What we can't allow them to do is be better innovators than us. Deepseek has been mentioned. It's possible, it's possible that they used something called distillation. They use something we do really well.
▶ 2:31:58Sen. Schmitt: They have a million agro -- algorithms to ask what we have, one million questions, essentially copying what we have done to gain the advantage that's possible, it's one expo nation for what we saw. My hope is that it is a kind of sputnik moment for us. That our focus is less about controlling this and some of those proposals of the last couple of years were about locking incumbents. That's the european model.
▶ 2:32:27Sen. Schmitt: I don't think we need to do that. But to have real innovation here and not be distracted with the woke ai. We saw this. The black george washington stuff. We cannot be distracted with this. Like, this is the real deal. Ai is the real race.
▶ 2:32:45Sen. Schmitt: I know that you are very focused on this and have talked about this, I don't want to ask you the same question, but as it relates to locking in incumbents, making sure we have robust competition in the space, can we talk about that? In the time I have left? Which is none.
▶ 2:33:01Mr. Lutnick: We need the lead. We have to focus on it. We need to get the nonsense off the chart and just focus on raw artificial intelligence, making us the leader with the standards that we are the leader. It is vital for us. Your points are well made.
▶ 2:33:22Sen. Schmitt: Look forward to working with you.
▶ 2:33:25Chair Cruz: Following up, I don't know if it is a sputnik moment, but it is a let nick moment. Senator rochester?
▶ 2:33:35Senator Rochester: Thank you. I want to thank you for taking the time to meet with you in my office last week. I appreciated talking to you about the critical role that apartment plays in unleashing and promoting economic opportunity in our country, across and around the world.
▶ 2:33:55Senator Rochester: As I shared with you, securing our supply chains, making them resilient is one of my top priorities and I am proud to co-lead to bipartisan legislation with ranking member cantwell and senator blackburn. This week we introduced the promoting resilient supply chains act. Senate 257 earlier this week. I know that in our conversation you expressed a very high level of confidence in the effectiveness of the presidential agenda.
▶ 2:34:28Senator Rochester: In what ways do you think proposing macro tariffs will impact the supply chain?
▶ 2:34:33I Think It -- Mr. Lutnick: It will assist us in bringing supply chain's home. We need them here. It's vital to our national interest and semi conductors and for pharmaceuticals. We have allowed our adversaries to take advantage of us, even our allies. It is time for us to take care of ourselves. Tariffs will encourage companies come back and build in america, something I think our workers need and I think you and I agree.
▶ 2:35:01Sen. Rochester: This was one of the major things we focused on as well, on shoring, near shoring, when I lead this in the house. We also talked about this department leading on mapping and monitoring threats to our supply chains, making them more resilient. Can I hear a commitment from you that you will as the head of this department, should you get it, lead and focus on mapping and monitoring those threats?
▶ 2:35:28Mr. Lutnick: Yes.
▶ 2:35:30Sen. Rochester: Senator moran ask about exclusions and you said that there were too many the first time the administration posed tariffs and you were just talking about drugs in particular. Are there exceptions that you would make? You said that there were too many, like producing life-saving drugs and drug components. Is this an area where you would make exceptions?
▶ 2:35:56Mr. Lutnick: It needs to be studied. The right answer is that there are substantial studies that need to be play out and I will then come back and gladly talk you about it.
▶ 2:36:08Sen. Rochester: We know that generic drugs are increasingly being produced overseas and as a country we are facing drug shortages. 270 one drug shortages. Do you think tariffs will increase the costs of drugs for americans?
▶ 2:36:23Mr. Lutnick: I think one of the problems we see with drugs is that we are the innovator of drugs in the world. All these other countries just disrespect us and basically force our companies and if we address the model, drug prices will come down.
▶ 2:36:48Sen. Rochester: One of my concerns is the impact to the costs of the american people. Economic institute averaging a 26 million dollar average loss for middle-class family. I'm not going to ask you questions about tariffs, I want to put a pin and that, that is one of the main priorities for us, making sure that people are safe and well, but that they can afford to live. I'm glad that you support know, you said in the meeting.
▶ 2:37:21Sen. Rochester: Yes or no, will you be maintaining programs at the economic development administration?
▶ 2:37:26Mr. Lutnick: Sen. rochester: yes.
▶ 2:37:27Sen. Rochester: Do you support dismantling the minority business development agency?
▶ 2:37:32Mr. Lutnick: I do not.
▶ 2:37:34Sen. Rochester: Do you believe they receive enough funding to carry out their mission successfully?
▶ 2:37:39Mr. Lutnick: I think it's small. It's hard for it to be successful. It can be effective. To be important to america, it's small. You have to put things in their size container. It's a small agency as you know.
▶ 2:37:57Sen. Rochester: Would love to work with you on that. As former secretary of labor in delaware, I shared with you, jobs is like one of the most important things to me. It is that important to me. Lisa jobs rod chester. This department plays a critical role. In a bipartisan way, your commitment to continue that. For tech hubs. Yes or no?
▶ 2:38:26Mr. Lutnick: Seems sensible.
▶ 2:38:28Sen. Rochester: Another example is nimble, it's an institute based of the university of delaware focused on biomedical, biopharmaceutical manufacturing. Do you support to nimble as it grows the bios -- pharmaceutical by a strength.
▶ 2:38:50Mr. Lutnick: I can commit to studying it. I don't know enough.
▶ 2:38:53Sen. Rochester: You could commit to coming to delaware to visit?
▶ 2:38:56Mr. Lutnick: Happy to.
▶ 2:38:58Sen. Rochester: I yelled back.
▶ 2:39:00Chair Cruz: Thank you to senator curtis and senator moreno agreed to let senator she he skip the line to preside over the senate in 20 minutes. Senator she he? I think that was wise discretion. >> especially for the colombian drug dealers. Make you for stepping away from your business empire. I don't like fish. I don't like fish. I'm a beef guy.
▶ 2:39:32Chair Cruz: Ai is getting tons of press, getting lots of investment. Great. There are industries that we need that have made this country great. We need them in the future. How do we bring back industries, resource industries like mining, timber. How do we make america a leader in those industries again?
▶ 2:39:53Mr. Lutnick: We have chased them away with a regulatory environment that makes no sense to me. Why would we mine, we don't mind lithium in america. We want to have electric cars. Granted, we all want clean air and clean water, but why do we mine, why have australian mind lithium with coal?
▶ 2:40:16Mr. Lutnick: Put it on a supertanker that pollutes the heck out of it, drive it all the way and put in trucks and drive it across the U.S. instead of mining it in the united states of america? It makes no sense at all. We need to change the regulatory environment and police america for the benefit of america.
▶ 2:40:35Sen. Sheehy: Used to be 36 timber mills in montana, now there are barely 4.5.
▶ 2:40:41Mr. Lutnick: Ridiculous, ridiculous.
▶ 2:40:44Sen. Sheehy: There wouldn't be ai without the components to build the chips and processes that we need and we should be getting that. As the most powerful person in our economy, I'm glad you are ready to tackle those issues. The greatest national security advantage we have had is not the military, government, congress, or economy.
▶ 2:41:13Sen. Sheehy: With the industrial complex, russia makes artillery shells eight times faster for 8% the costs. How can you in your new role, bring back not just manufacturing but the arsenal of democracy?
▶ 2:41:29Mr. Lutnick: To try to do manufacturing competitively in america. The american military-industrial complex has been monopolies only. Bring out competition. Drone manufacturing. I can push for it. A commerce view of things. Let's get competition in american ingenuity out there in new people producing.
▶ 2:41:59Mr. Lutnick: National security. Let's unleash america for the benefit of america. We have been to constrain for too long. That's over. It needs to be all about american ingenuity. If you unleash american ingenuity, the scale by which we will outrun, outpace, outperform the rest of the world will be incredible.
▶ 2:42:21Sen. Sheehy: Back to the fish I don't like. Noah, 70% of the surface is ocean. The bottom of the ocean has untold deposits of minerals. Oil, gas, resources we have barely touched. I would be interested in your thoughts on how you can leverage your position to expand undersea mining and resource extraction for the benefit of our economy.
▶ 2:42:47Mr. Lutnick: It's important for american national security, the key rare earth minerals, we create them ourselves. We have the greatest land of the world and under the sea is the rest, whatever we don't have on land. We need to take care of america. We can.
▶ 2:43:11Mr. Lutnick: By the end of the trump administration we need to understand and take care of ourselves, protect ourselves and take care of ourselves, it's vital.
▶ 2:43:21Chair Cruz: Thank you. Senator lujan?
▶ 2:43:27Senator Lujan: Thank you for being here with us today. Appreciated the conversation in our office as well. Starting on the subject that sounds like there has been a lot of conversation about in this space, I apologize for not being here for the entire hearing, I was over in finance.
▶ 2:43:44Mr. Lutnick: It's key.
▶ 2:43:46Sen. Lujan: I appreciate that.
▶ 2:43:48Mr. Lutnick: Yes or no, do you agree that reaching universal access to high-speed internet across the country is an important and possible goal to achieve? Sounds like a great goal.
▶ 2:44:01Sen. Lujan: Is it important that high-speed of an era is available at every school in america?
▶ 2:44:07Mr. Lutnick: Sounds important to do.
▶ 2:44:09Sen. Lujan: Do you believe it can be done?
▶ 2:44:12Mr. Lutnick: I do. We are the greatest country on earth.
▶ 2:44:16Sen. Lujan: Will you commit to investing infrastructure to get it done?
▶ 2:44:20Mr. Lutnick: With the tools I have available to me, I will do my best to get it done, it sounds like an excellent goal.
▶ 2:44:27Sen. Lujan: If you are asked to cut that program by the president of the united states?
▶ 2:44:32Mr. Lutnick: I work for him.
▶ 2:44:34Sen. Lujan: If the president asks you to cut broadband infrastructure funding, you will do that? Is that what I just heard?
▶ 2:44:42Mr. Lutnick: Again, I work for the president and I'm here to execute his policies. I think he agrees that broadband internet to america is important. For my conversations with him, he thinks it's important. Waste, money, and abuse.
▶ 2:45:10Mr. Lutnick: He agrees with me, he will allow me to achieve the goals he just suggested.
▶ 2:45:17Sen. Lujan: We should stand up to fraud. My question to you is if president trump asks you to cut infrastructure funding in this congress and a bipartisan way to build out internet to every school, which you agreed was an important issue, would you oppose that?
▶ 2:45:38Mr. Lutnick: I would not oppose it.
▶ 2:45:42Sen. Lujan: It's a simple thing. You have been in the boardroom long time. I'm not going back and forth with you. We have five minutes. I will ask you in writing, keep going. If you work for the president and he gives you an order, you're going to do it? Is that the case, if you are told to cut the infrastructure money as passed by the congress when it comes to broadband, yes or no?
▶ 2:46:08Mr. Lutnick: I would do it correctly. I believe that my objective is to give you the benefit of the bargain. That's my objective. You have appropriated it and my objective is to execute what has been appropriated. That is my objective. If the president has other objectives, I will talk with him about it. My objectives are to execute and give you the benefit of the bargain that is appropriate.
▶ 2:46:35Sen. Lujan: Mr. let that, I will slow down. If the president asks you to cut and infrastructure program, will you cut the program?
▶ 2:46:43Mr. Lutnick: I work for him. I will say it again and again.
▶ 2:46:47Sen. Lujan: Are you not going to answer the question?
▶ 2:46:50Mr. Lutnick: Trying to.
▶ 2:46:52Sen. Lujan: Yes or no?
▶ 2:46:54Mr. Lutnick: Yes. I work for the president.
▶ 2:47:00Sen. Lujan: I appreciate you being cute.
▶ 2:47:03Mr. Lutnick: I'm not being --
▶ 2:47:05Sen. Lujan: It's not cute to the american people who are being promised these programs. People without connectivity. Mr. kennedy was in the other room saying that every person in america is going to get access to an ai doctor to cure the cancers they got, whatever critical illness they have. It's not cute. This is serious business. We are talking about carrying the programs out of the country. I understand you are a successful person. We are asking simple questions.
▶ 2:47:37Sen. Lujan: We had an incredible conversation in the office. A respectful one. This is not that. I just don't understand. I'm not asking for a response. I'm not. Mr. chairman, one of the areas we agree is we should work in a bipartisan basis to get these things done. I have a reputation of being a bipartisan member in this office, working with my colleagues.
▶ 2:48:06Sen. Lujan: I supported several of these nominees. I came into the hearing with an open mind. Maybe I'm the only democrat that says no right now. This is ridiculous. We have a responsibility to communicate with each other for the people that we work for. You don't just work for donald trump, sir. You work for the american people if you get this position. You told me that in my office. As for the american people to bring the genius that you brought to your success. To deliver the grand bargain. To get things done.
▶ 2:48:36Sen. Lujan: That is the conversation that we had. I am beside myself with this little exchange. I truly am. I'm surprised. Mr. chairman, I go back. I've gone over my time. Disappointing.
▶ 2:48:48Chair Cruz: I would note for the record that having participated in dozens of confirmation hearings, I do not recall a single cabinet nominee for obama testified that he would defy an order from barack obama. I don't recall a single nominee for biden testifying that he would defy a cabinet order from biden. It's unsurprising that the trump cabinet nominees are not interested in testifying that they intend to defy orders from trump.
▶ 2:49:20Chair Cruz: If the answer is no, the answer is no. I think the chairman is moving on. I will wait until the second round to ask this.
▶ 2:49:29Chair Cruz: Senator curtis?
▶ 2:49:33Senator Curtis: That took a different turn. I was just about to brag that they saved the best for last. The committee. Now we are down to three. The vice president, he rarely speaks and innuendos but I think if you go back to his introduction, if you pointed out, this side of the room his where he sat, trying to employ the best minds of the committee on the side. I'm just going to touch on this for a question.
▶ 2:50:07Senator Curtis: This is the geography in utah. What I think I heard from you in the office, is it fair to assume that you would like every student in america to have the resources they need to be successful in school?
▶ 2:50:18Mr. Lutnick: Of course.
▶ 2:50:20Sen. Curtis: Is it possible congress didn't get it right when we set standards for how to get to the students? Is it fair to say that what you are after is the best way to get that to them, regardless?
▶ 2:50:34Mr. Lutnick: Correct.
▶ 2:50:36Sen. Curtis: Moving on for a minute, we talked about tech hubs. Not all members are here to defend themselves. We have the best tech hub in utah. Silicon slopes. It's a crazy bed of innovation. Bright and sharp minds. We talked about the tech hub support.
▶ 2:51:04Sen. Curtis: You agree that we need to figure out how to support those in the federal government. Here today, they would say it's killing us. It's regulation and taxation. If we stay out of the way, could we let them be successful?
▶ 2:51:25Mr. Lutnick: I agree that it's a broad set of regulations holding back america. We need to unleash american ingenuity, get out of the way and let americans be the most extraordinary people that they are. I completely agree that a lesser regulatory environment will unleash america and we will be much better off with less of a hand on her head holding us down. More arms carrying us up.
▶ 2:51:58Mr. Lutnick: We will get that with the trump administration.
▶ 2:51:59Sen. Curtis: On the state tour we will go to silicon slope to have a conversation. I've got a lot more but we will go quickly. We have talked a lot about this chinese model. It's been done cheaper in the united states. Color me skeptical. How do we finally get to accountability for this?
▶ 2:52:30Sen. Curtis: I want a really productive relationship with china but without accountability, we can't get that. How can we get to accountability and acknowledge that this is talk on steroids. Could you address both of those quickly?
▶ 2:52:53Mr. Lutnick: The first answer his reciprocity with china. How you treat us is how you should expect to be treated by us. We let them off the hook for far too long. They treat us horrifically in china. Yet we let them ride roughshod over us here. It needs to end. The term reciprocity sounds fair , showing that they are treating us horribly. That is the first step, I think.
▶ 2:53:22Mr. Lutnick: A good word for this administration to repeat endlessly, reciprocity, treating others the way they treat us.
▶ 2:53:28Sen. Curtis: Earlier we mentioned the artificial intelligent safety institute beneath you. If it needs a new life or legs, we would love to work with the senate and yourself to give you the tools needed to do exactly that. When you were in my office, we talked about tariffs. It wanted to double down on a couple of points. They are disproportionately hard on small businesses.
▶ 2:53:56Sen. Curtis: We talked about perhaps longer runways for small businesses, things like that. We wanted to see if you had thoughts that matured on that. How do we watch out for the small businesses with tariffs?
▶ 2:54:08Mr. Lutnick: You laid it out when we spoke in the office and I will make sure it's a key part of the study, thinking about small businesses and the importers of those small businesses and how best to find our way to be acceptable to them in the model.
▶ 2:54:25Mr. Lutnick: For those not in the meeting, part of the conversation was having a longer runway. It's harder for them to pivot. I look forward to your discussions on that. Finally, just a comment without time for response, this concept of them making prices go up, we have to think about americans.
▶ 2:54:49Mr. Lutnick: If we are demanding of our businesses that they meet these regulations, human rights regulations, not demanding it of somebody else, we either need to stop demanding it here or demanded of them. With that, we are unfortunately out of time.
▶ 2:55:09Chair Cruz: Senator hickenlooper?
▶ 2:55:16Centre: I appreciate -- senator
▶ 2:55:17Hickenlooper: I bumped to out of the bottom three, I appreciate the comment about those being the best. [laughter] Mr. let nick, thank you for being our time. Thank you for all you have done. Some of the stories of how you responded to not just the crisis of 9/11, but many crisis in your life, it illuminates the kind of person you are and I respect that.
▶ 2:55:46Hickenlooper: I have got a couple of questions around aia and government, following it quickly. We know russia has used it to avoid sanctions. What is your sense in being efficient, how do we try to
▶ 2:56:20Hickenlooper: Crack down on these illicit uses of something like tether? What's your perspective? I'm not trying to say should be held accountable, I'm just trying to figure out how do you suggest if it's commerce or congress? How do we approach that?
▶ 2:56:34Mr. Lutnick: We only know illicit activity is done on the block chain because it's done on the block trying. When he use dollars, euros, we don't know about it. Pallets of hundred dollar bills. Anyone who is a U.S.-backed stable coin must onboard U.S. law enforcement.
▶ 2:57:06Mr. Lutnick: Our ai tools allowed into their models so that we can go find and catch illicit activity. Remember, it's a central book. That means it can be found and traced. It will rip illicit activity out of stable coins within a year or two. Our technology on their block chain will end it. That is what we should require. Makes perfect sense.
▶ 2:57:33Sen. Hickenlooper: You will collaborate with us to create the kind of legislation and rule
▶ 2:57:41And Mr. Lutnick: Law? Absolutely -- ruling law?
▶ 2:57:45Mr. Lutnick: Absolutely.
▶ 2:57:47Sen. Hickenlooper: Making a bank account, people need to know who you are to receive the account. Especially at the beginning.
▶ 2:58:00Mr. Lutnick: The stable coin issue is only an issue to the ky sea approved people. It's like dollars. I can withdraw it out of the bank but when I buy something, it goes on and on and on. It's a secondary market that is, those people are just using an electronic dollar in the same way that they use a real dollar and it's much easier to catch than it ever would be to catch a fiscal dollar. Much better.
▶ 2:58:28Sen. Hickenlooper: Got it. Got it. I won't go through the tech hub things. I know that senator curtis was adamant that they had perhaps the best tech hub. I want to point out that elevate quantum, which includes several mountain states, is a tech company we want to make sure that you come out not just to visit utah, it's a lovely place. The skiing is not the same as colorado, we need to make sure that we get you when you come out west, making multiple stops.
▶ 2:59:00Sen. Hickenlooper: I spent a lot of work on critical minerals. Obviously, they are a fundamental building block for aerospace and clean energy, semi conductors, ai, going down the list. When you talk about the extraction of minerals or the processing of those minerals, we are falling way behind.
▶ 2:59:24Sen. Hickenlooper: The department's international trade administration has the responsibility of growing our exports and overseeing trade. Really, I think, helping to secure the supply chain, essential supply chains for these critical minerals. How would he work to be sure that we have sufficient sourcing and processing capabilities in this country?
▶ 2:59:48Mr. Lutnick: You have to reduce the regulatory burdens on minors so that they can mine the critical returns. We need to bring domestic mining back. We can't stop mining in america and buying it overseas. It's just, it's not healthy for us from a national security perspective and it isn't healthy for the domestic economy. So, I think we are supposed to be mining in colorado. It's an amazing place that has incredible resources.
▶ 3:00:18Mr. Lutnick: We need to bring those resources for the use of america and improve the economy in colorado and also improve the national security of america.
▶ 3:00:26Sen. Hickenlooper: If I could have 20 seconds, in terms of that critical -- I agree with you completely, it's also the environmental and other countries extracting and processing these meet -- minerals, environmental standards are a fraction of what we require in this country. 5 Mr. lutnick: exactly.
▶ 3:00:44Sen. Hickenlooper: Argue in favor of a tariff system like senator curtis referred to, based on the environmental depredation that comes from processing and extracting foreign countries that have no standards, what it does to the atmosphere that we all utilize?
▶ 3:01:02Mr. Lutnick: That should be a key part of the study. Someone else's mind, with coal spewing into the air, we were worried about the fact that we would do it 100 times better for the atmosphere, but instead we don't do it. We buy it from them, spew it in the air, they put it on a tanker and drive it to us and pollute all the way across. It seems that taken as a whole, it's a logical. We should be doing it in colorado. Mining in nevada.
▶ 3:01:32Mr. Lutnick: We should be mining the green lithium in arkansas. That iron range, america is amazing. We are not using our assets to the best that we possibly can and it is time that we do.
▶ 3:01:46Sen. Hickenlooper: Supporting a accelerate the process.
▶ 3:01:51Mr. Lutnick: Sounds smart.
▶ 3:01:52Sen. Hickenlooper: Thank you.
▶ 3:01:54Chair Cruz: Senator moreno has agreed to let senator lummis go ahead.
▶ 3:02:01Senator Lummis: Welcome, Mr. let make. First of all, I want to thank you for the generosity to haverford college. As you know, my dollar is a graduate there. You were the chairman of the board while she was a student there. Your generosity to that school is exceptional. Never seen anything like it. I want to start there. I also want to ask this question in the form of a request.
▶ 3:02:32Senator Lummis: That is that you will not only advise the president of the U.S. about the ways that we can improve our economic standing, our jobs, our manufacturing, but you will inform this committee and its members of ways that we can help make that happen, case in point.
▶ 3:02:53Senator Lummis: The semiconductor industry has estimated a need for 115,000 additional workers by 2030 to meet the chips act goals. But what is happening is there were mandates for dei within the chips act preventing it from functioning as it was designed.
▶ 3:03:21Senator Lummis: There is a company called taiwan semiconductor manufacturing co. Trying to build semiconductor manufacturing in arizona. But the dei requirements that are ongoing that mandate the workforce that they must have simply cannot be met.
▶ 3:03:44Senator Lummis: So, they have faced significant delays in staffing their facility due to a lack of specialized workers in the U.S., particularly those from underrepresented groups in addition. The -- the dei requirements go on to include diversified suppliers.
▶ 3:04:12Senator Lummis: These companies that we want in this country to change the trajectory of the development of semi conductors so that we can do it in the united states can't do it because of the additional requirements, the layers of bureaucracy that we placed on them in the very chips act that was designed to help the country move forward.
▶ 3:04:36Senator Lummis: Some of these delays have caused that company, such as being one of them, to go overseas. Their finding in japan was that they could break ground and complete a facility and begin producing way before they can do it in the united states. C1 the japanese government provided incentives without attaching social band-aids.
▶ 3:05:09Senator Lummis: And they are also exploring expansion in germany and other countries that have fewer regulatory hurdles. My request is this. It is not just dei. It is an environmental requirements, it is labeled -- labor requirements.
▶ 3:05:33Senator Lummis: When we give with one hand, incentives to create an industry in the united states, to bring back manufacturing to the united states, and then the other hand takes it away. I'm asking you to help us identify where we have created hurdles to our own, our own ability to excel and achieve using ai and using chip
▶ 3:06:03Senator Lummis: Manufacturing and using our superior force of nature. You are called a force of nature. You are a force of nature. I know you. You are a force of nature. So many americans are. And yet we throw these hurdles up for our selves -- for ourselves. I want to ask you, please, help us get out of our own way.
▶ 3:06:27Mr. Lutnick: Easy for me to commit to.
▶ 3:06:30Sen. Lummus: I look forward to supporting your nomination. I yield back. >> thank you, senator marino.
▶ 3:06:37Sen. Murray: No I'm over here. >> over there, nice. >> thank you for being here. Question number one, do you still want the job? [laughter] >> I do. >> I can tell you do. You are in a position where you can literally do anything you want in your life.
▶ 3:07:00Sen. Murray: I think if the 23-year-old howard lutnick was sitting here today, I don't think he could have imagined it. Yet, you are choosing to serve this country, and you are making a great sacrifice to do that. For some of us, myself, I ran for office, I also do vested of all of my holdings. Not quite as many as yours.
▶ 3:07:26Sen. Murray: But to do that is a great sacrifice, and it shows how much you really care about this country. Thank you for that. My question is this, in your career, give us a sense of scale how many deals you have made.
▶ 3:07:43Mr. Lutnick: Thousands.
▶ 3:07:44Sen. Moreno: Maybe a couple bad ones you learn from? Just don't do the bad ones twice.
▶ 3:07:50Mr. Lutnick: Sadly true.
▶ 3:07:54Sen. Moreno: As long as you don't repeat the same mistake, it's all good, right? Imagine a scenario in which you are a european car manufacturer and you ship that car into america from a completely tariff free, it is a car that is extremely expensive, targeted at very wealthy people but it happens to be an electric vehicle. I will give the example of a rolls-royce specter. I'm sure you have lots of friends that have those. Fully electric, rolls-royce vehicle.
▶ 3:08:24Sen. Moreno: Do you imagine the united states government subsidizes that car and -- on leases to the 2000 to $7,500, is not a good deal?
▶ 3:08:35Mr. Lutnick: Are you joking? We have to end that. How about we end that as fast as we possibly can?
▶ 3:08:45Sen. Moreno: All my democrat colleagues voted for that bill. It is the inflationary reduction act that allows luxury european automobiles that are not even remotely made in america to get $7,500 if they are leased. Now, imagine a cadillac, with a big, good old american v-8 engine, gets tariff on the way to europe, let alone been given a subsidy.
▶ 3:09:15Sen. Moreno: Do you consider that to be a good example of terrible reciprocity with our allies?
▶ 3:09:21Mr. Lutnick: That is the example of a failed industrial policy of the united states of america. It is a failed industrial policy and needs to be changed and needs to be changed now. That is an american first, that is what america first means. Exactly what you are pointing out. Help us here stop having everyone l street us so poorly.
▶ 3:09:44Sen. Moreno: The current industry is near and dear to my heart. The only commitment I have is you have to visit ohio. National champion football team. Don't ask about our professional sports, please. Have you come to ohio and see the largest semiconductor manufacturing facity going up in columbus.
▶ 3:10:05Sen. Moreno: I think this is a good example of what you will change in the commerce department because to have a good strategy with bad implementation is a terrible deal. I look forward to having you there to help us get that plant implemented quicker and more efficiently. Would love to have you come to ohio.
▶ 3:10:22Mr. Lutnick: Ohio is great. I -- it has a great history of manufacturing. We have to bring that manufacturing back to ohio and to the united states of america. It has to come back and I'm committed to that.
▶ 3:10:33Sen. Moreno: One last line of questioning. There has been a lot of comments about tariffs raising prices and causing inflation, before doing this, you obviously were deep in the financial markets. During the time of 2017 through the end of president trump's term, how would you describe inflation?
▶ 3:10:56Mr. Lutnick: It was virtually nil.
▶ 3:10:58Sen. Moreno: From the moment joe biden came in office and started fiscal stimulus unlike anything I've ever seen in my lifetime, how would you describe inflation?
▶ 3:11:09Mr. Lutnick: Massively high.
▶ 3:11:10Sen. Moreno: Those were not done unilaterally by joe biden, right? Those bills were not just magically created by joe biden, they originated here and congress.
▶ 3:11:19Mr. Lutnick: Dated.
▶ 3:11:20Sen. Moreno: I would ask my democrat colleagues said this one out when they talk about what will happen inflation. With that, I yield my time back.
▶ 3:11:28Chair Cruz: Thank you, senator moreno. I appreciate senator moreno's very kind offer to provide those rolls-royce's to all members of this committee. We will happily go to ohio to pick them up. We are going to do another round, just a couple of us that will have more questions. Hopefully you will be out of here very soon. Let me start with this.
▶ 3:11:52Chair Cruz: In august of last year, I wrote to noah asking for information about its promotion of phone educational materials designed to fuel climate alarmism and manufacturer support for less -- for left-wing goals. Noa pushed a "climate emotions we'll" activity based on the work of a finished ego theologian, whatever the hell that is, which encouraged students to "navigate their emotions before and after engaging in climate action."
▶ 3:12:22Chair Cruz: As the curriculum funded by noa openly states "the goal is not to eliminate negative emotions because those who experience negative emotions about climate change are more likely to engage in climate action." seems that one goal of the noa curriculum is to generate feelings of fear and anxiety rather than to educate. I asked for the documents behind this and noaa refused to provide them. Mr.
▶ 3:12:49Chair Cruz: Let nick, if you are confirmed, will you commit to providing the documents I requested?
▶ 3:12:54Mr. Lutnick: Yes.
▶ 3:12:55Chair Cruz: Thank you. Let's turn to artificial intelligence. Nist is the nonregulatory federal agency, and the lead national laboratory for providing the management -- the measurements and standards that underpin U.S. congress.
▶ 3:13:12Chair Cruz: Success in the increasingly fierce competition for global and critical emerging technology like ai, relies in part on how well each country's respective firms and experts influence the development of technical standards. Unfortunately, under the biden administration, nist's mission was undermined by the creation of the ai safety institute. Which politicized ai standards.
▶ 3:13:38Chair Cruz: The ai safety institute took the worst lessons from the eu tech regulation, like requiring climate change assessments and "misinformation" as part of "measuring ai and its risks." when you are confirmed, will you return nist focus to the scientific mission of measurement science and ensure that nist ai standard guidance is based on scientific technical standards and not simply a
▶ 3:14:08Chair Cruz: Trojan horse for social policy, or importing the eu's tech agenda?
▶ 3:14:12Mr. Lutnick: Yes.
▶ 3:14:13Chair Cruz: Let's turn to be to. After four years, the biden administration did not connect a single american through the $42 billion program. Instead, it ordered nearly $1 billion in administrative funding to impose unnecessary burdens on states and to push extreme left-wing social policies like climate change and rate regulation. And fund otter ponds at the D.C. zoo.
▶ 3:14:45Chair Cruz: Again, otter ponds. That is what they are -- what their broadband funding went to. When I flagged this failures over the year -- over a year ago, the department ignored solutions, into and be's extreme wireless against wireless technology this redtape is not only stalled of element of the program, it has inflated the cost of expanding internet access.
▶ 3:15:09Chair Cruz: Will you commit to working with my office to conduct a thorough review of this program, and to refocus it on congress's core objective of deploying high-speed internet to unserved area in a tech neutral manner, and not to pursuing extraneous or partisan social goals?
▶ 3:15:28Mr. Lutnick: Yes, I would be happy to.
▶ 3:15:30Chair Cruz: Finally, congress created the tech hubs program under the chips and sciences act. The target areas that will advance technological innovation that allows us to compete globally. Unsurprisingly, under the biden administration, the tech hubs program became just another piggy bank for low performing blue states.
▶ 3:15:55Chair Cruz: For instance, the first round of funding went towards "sustainable, climate ready infrastructure" and "clean energy supply chain tech hubs." six days before leaving office, the biden administration pulled out an industrial sized shovel and was shoveling as much money out the door as they could. Including announcing nearly $210 million in additional awards six days before they left. Once again, texas received zero.
▶ 3:16:27Chair Cruz: Nada. Even though it has a designated semiconductor hub and a booming tech industry. Will you commit to reviewing the tech hub's program and restoring competitive, merit-based review processes across the department, rather than political cronyism?
▶ 3:16:47Mr. Lutnick: Yes.
▶ 3:16:48Chair Cruz: Thank you. Senator klobuchar.
▶ 3:16:54Sen. Klobuchar: Thank you very much. While we were sitting here actually, it appears that a known bureaucrat to me in the office of management and budget has withdrawn the memo, the two-page memo for the -- which will hopefully open up the ability for you, if you are confirmed, to distribute this funding.
▶ 3:17:20Sen. Klobuchar: I do want to follow up in a different way on that question, those questions that senator lujan was asking. If a court finds that the president or someone does something illegal, will you respect that courts order?
▶ 3:17:37Mr. Lutnick: Of course.
▶ 3:17:39Sen. Klobuchar: Thank you. So, when we were in office, I had differed to senator cantwell on some of the conflicts issues, and I appreciated some of them that she raised. Since that time, I am particularly interested in scandinavia, because of my estate. We have a lot of connections there.
▶ 3:18:04Sen. Klobuchar: And going way back to walter mondale, we have had ambassadors to scandinavia, and I personally been to greenland. Maybe more than some of the other senators, I have been very much interested for a number of years in the former and no current president trump's focus on greenland. I know that cantor fitzgerald had a major interest. With that be a fair way to say it?
▶ 3:18:29Mr. Lutnick: No.
▶ 3:18:30Sen. Klobuchar: No? I'm just reading this -- it may be wrong. I know you have divested. I will start with that. But explained to me the cantor fitzgerald greenland connection.
▶ 3:18:44Mr. Lutnick: I think cantor fitzgerald took a mining public -- mining company public. In lieu of its fees, it took some shares. But minor from the view at large would be the way to think about it. I think I was informed that meanwhile, I did not know we had it until yesterday, by the way. I didn't know. I was informed it was just in lieu of feeds that it took some shares.
▶ 3:19:10Sen. Klobuchar: And it is going -- you have divested yourself and your family has an interest in it, which I assume is ok under the african laws, not in -- under the ethic laws.
▶ 3:19:26Mr. Lutnick: The right answer is I plan to divest upon my confirmation. And I will have sold everything and will have no business assets or business interests, or no conflict as agreed with the office of government ethics.
▶ 3:19:36Sen. Klobuchar: But one thing -- that is that but then we have the fact that the president has been pressuring denmark to sell greenland to the U.S. that's correct, right?
▶ 3:19:51Mr. Lutnick: I think he has had such conversations. I think that's right.
▶ 3:19:58Sen. Klobuchar: And the prime minister, I see them as a key ally for scandinavian countries, for many reasons. But the prime minister said no. Greenland is not for sale.
▶ 3:20:06Mr. Lutnick: I did not speak to the prime minister.
▶ 3:20:07Sen. Klobuchar: And you discussed mining in greenland with the president?
▶ 3:20:12Mr. Lutnick: Absolutely not.
▶ 3:20:14Sen. Klobuchar: Would you see that the interest for whatever interest cantor fitzgerald has in mining or other companies have, that if america bought a greenland or somehow obtained greenland, that would be more favorable to those terms?
▶ 3:20:36Mr. Lutnick: I doubt it but I would not have -- it would be irrelevant.
▶ 3:20:39Sen. Klobuchar: Ok. I think it is relevant.
▶ 3:20:42Mr. Lutnick: No, --
▶ 3:20:44Sen. Klobuchar: The president trying to expand into another country of our allies and trying to pressure them. I think it is relevant to commerce, to our national security.
▶ 3:20:54Mr. Lutnick: I'm sorry, that's not what I meant. I met the economics of it are irrelevant to cantor. I was not talking at all about -- sorry. I didn't mean that in the slightest.
▶ 3:21:05Sen. Klobuchar: Ok. I will follow up on some of this in writing. The last two questions, senator moran raised travel and tourism, and I leave that caucus together. As senator blunt and I work to create this brand-new usa, which allows our american companies -- it is paid for not by government money, paid -- paid for by private money leveraged with hotels and the like, leveraged with visa fees that foreign
▶ 3:21:36Sen. Klobuchar: Visitors pay. We have used that to promote our nation as a whole for tourism. We have seen some really positive results. Before that, maybe vegas or new york city would do it, but not the rest of the country. I just hope that you will work to strengthen programs like brand usa, and other tourism work that we do as jerry mentioned, senator moran mentioned, with the olympics coming and the like.
▶ 3:22:03Mr. Lutnick: I will.
▶ 3:22:04Sen. Klobuchar: Thank you. Last thing, human trafficking. This is a big priority of mine and several people on this committee. Under the last administration, the department of commerce collaborated with other federal agencies, community partners and individuals to raise awareness. If confirmed, what will you do to fight human trafficking in our supplying -- supply chains and economy?
▶ 3:22:27Mr. Lutnick: Everything I possibly can.
▶ 3:22:29Sen. Klobuchar: Thank you. One last thing. National weather service, part of noaa, will you work to maintain the national weather service? Very key in my state.
▶ 3:22:39Mr. Lutnick: I will. I think we can deliver the product or efficiently and less expensively, dramatically less expensively. But the outcome of delivering those services should not be changed.
▶ 3:22:51Sen. Klobuchar: Thank you. >> thank you, Mr. chairman. We are going fast now because I think we have a vote. Mr. lutnick, I want to clarify a couple things that have come through the dais here as members have asked questions. And as senator klobuchar just said, the omb memo that has raised such hackles and is confronting you, and many of the other nominees has been withdrawn. That's good news.
▶ 3:23:21Sen. Klobuchar: But, in these conversations, one thing you said, and this is making a point, it's not about the specificity -- I'm not sure -- when you are in these situations, you never know what to heck to say. Do wanted to bring drone manufacturing back to the united states. In this case, the state of washington has had a lot startups in the drone area. They have grown to bigger companies, acquired by boeing. It is a really great example of what we are trying to do.
▶ 3:23:51Sen. Klobuchar: It is a really great example of your "unleash american ingenuity," which I wholeheartedly agree with. When you come to this probably lesser-known aspect, or lesser unders -- it started as a third bill that this committee has passed over decades under the auspices, so the concept is what do we need to do?
▶ 3:24:24Sen. Klobuchar: As a technology age and r&d age which universities were publishing, and everybody was reading our publishing's, we were not patenting enough and we were not translating science fast enough for america competitiveness. The other aspect of chips and science is tech hubs, as my colleagues have brought up. Several people have brought these up.
▶ 3:24:48Sen. Klobuchar: We just want to get clarity on your opinion about that kind of activity. Forget for a second the individual ones. I could make a big case for why in aerospace, one of our largest exports, if we don't climb the next hill on material science and win that race, it will be very bad for the united states.
▶ 3:25:08Sen. Klobuchar: You do want to test bed large-scale r&d that does not get done by the private sector because it can't. It can't scale at that level. When you talked about the efforts of semiconductors, you said, I support getting money out the door.
▶ 3:25:30Sen. Klobuchar: Now on the tech hubs, we are trying to understand, do you believe in this translational science effort that is about trying to end -- I will never forget ramonda coming to seattle and they said, tell us where you are going and we will follow. We looked at each other like, what are they talking about? The people in seattle said, it is too expensive to do all of the innovation we need to do in america in seattle and silicon valley, and other places.
▶ 3:25:58Sen. Klobuchar: The point is, we have to spread it out. We have to go get places to do this kind of work. I just want to understand, do you believe in as funding that kind of r&d testbed scaling of important manufacturing competitiveness issues?
▶ 3:26:13Mr. Lutnick: I think american ingenuity exists strongly across the country. And we should find it, we should harness it, and we should unleash it. And that means working in each state and really trying to find the best and the brightest. I think if tech hubs can bring that out, and they can come together, and show the government, the federal government, that they can do it, I think it is very worthwhile.
▶ 3:26:41Sen. Cantwell: So you will be an advocate for those things and will not try to withhold the funds that have been allocated?
▶ 3:26:47Mr. Lutnick: I would not.
▶ 3:26:50Sen. Cantwell: On my colleague who asked about the ai safety institute, will you work with myself and senator young, and senator cruz, on an ai safety institute that we can get over the goal line that people feel good about?
▶ 3:27:05Mr. Lutnick: I think we talked about ai standards, which are fundamental would be delighted to work with your office to try to come up a model and method for the foundation of american ai standards that drive it out. That's why it is standards, not safety. They may end up with the same concept, but I am a proponent of standards.
▶ 3:27:27Sen. Cantwell: You will have a big standards job in the fact that you have missed. The notion is you are trying to get commonality. I certainly agree with senator cruz. America should not be pegging its force to what happens in europe. I think a better approach is for us to have -- that is why I want a privacy law. I don't want to create a bureaucracy, I want a strong line in the books.
▶ 3:27:52Sen. Cantwell: In this case, what we need for the industry to grow is for nist and commerce to do its job. I'm glad that you will work with all of us to do that. Because that is critically important. The hearing was a few minutes old, and a headline popped up, lutnick eager to tap pentagon spectrum for commercial use. Is that goodith you? Do you want to refine that?
▶ 3:28:22Mr. Lutnick: That's what I sent?
▶ 3:28:24Sen. Cantwell: Apparently. Is that accurate? Let's just say that.
▶ 3:28:31Mr. Lutnick: I think what would be the best way to say it would be working closely with the department of defense to make sure we protect our national security. If we can find spectrum and we can use it to enhance the united states of america's generational spectrum is important. Let's work together. Let's unleash the spectrum, if we can. We've got to protect it. The defense industry.
▶ 3:29:01Mr. Lutnick: But we can't just sleep through it. We've got to make sure we use that spectrum to the best it can be.
▶ 3:29:05Sen. Cantwell: I think what happened is that the department, ntia, lead a big dod discussion and tried to get people commonality around dynamic spectrum share a. And I think it holds a lot of promise. We all have to cooperate. Think there are some who just say, turn it all over. I think our colleagues are split on this. I want a resolution.
▶ 3:29:38Sen. Cantwell: I didn't coin this, but collaboration is the next phase of innovation. It is a ted talk done by somebody who I respected. The point is, not this ted, another ted, but you could do your own ted talk, and this is years ago. This is years ago. In an information age, you have a lot of information. But if you don't get around a table and agree, you can't get it implemented. That is where the united states needs to go.
▶ 3:30:05Sen. Cantwell: We need to collaborate on what we agree should move forward on the innovation. I hope on this point, where so much is at stake with five -- fiveg. I'm telling you, chips and science as part of it. We did not give billions like some other states. But manufacturing, it's because ai is meeting manufacturing with cheap electricity.
▶ 3:30:34Sen. Cantwell: We want this renaissance of manufacturing in the united states of america. I disagree with my colleague from ohio because we worked on this and I can tell you that investment is what is helping us. Chips and science is what is helping us grow the manufacturing base. Anyway, I hope you will work with us to create that level of collaboration around facts and information, so that we can keep moving forward on this. Thank you, Mr. chairman.
▶ 3:30:59Chair Cruz: Senator markey.
▶ 3:31:01Sen. Markey: I want to come back to broadband. Congress invested $40 billion, which are all americans that are benefiting from the digital revolution. The vast majority of that money will go toward ensuring that all americans, inner-city and rural, have access to high-speed broadband.
▶ 3:31:28Sen. Markey: Will you faithfully execute the dispensing of that $40 billion?
▶ 3:31:33Mr. Lutnick: I have said the goals are right, then I will try to get you the benefit of the bargain. Yes, I will do it as efficiently and as effectively as we can.
▶ 3:31:44Sen. Markey: I will repeat again, the bargain was one between democrats and republicans. We largely wanted to -- that is the bargain. It is the law.
▶ 3:32:01Mr. Lutnick: I agree. I said yes, I'm going to try to do it efficiently and effectively.
▶ 3:32:09Sen. Markey: We just needed to be faithfully executed given the omb designees saying they want to protect against marxism and our country and the budget. I know he is dead serious. And we are dead serious about our markets as well. The $40 billion is important to ensure access for everyone.
▶ 3:32:31Sen. Markey: But such access has limited value if americans don't have the skills or the knowledge to participate in that online world. Fortunately, congress thought ahead and provided $3 billion across three programs for precisely that type of education, for all americans. Will you faithfully execute and implement those programs?
▶ 3:32:56Mr. Lutnick: What you have appropriated efficiently and effectively I will.
▶ 3:33:02Sen. Markey: Kids marker between the haves and those who want to get a piece of the action too. We've got to educate. On the chips act, over the past several years, the commerce department has worked quickly to issue grants under this program. Mr. lutnick, will you commit to honor the chips grant contracts that have been finalized?
▶ 3:33:30Mr. Lutnick: I would have to read them and analyze them, and understand them, to commit to that.
▶ 3:33:37Sen. Markey: Finalize the bargains here as providing the money, in the bargain once the contractor.
▶ 3:33:46Mr. Lutnick: How do you know the contract that was signed was the bargain? I don't know that.
▶ 3:33:49Sen. Markey: I'm talking about contracts that have been finalized. That is the only contracts on talking about will you honor them?
▶ 3:33:57Mr. Lutnick: I can't say I can honor something I have not read. I will read it and I can happily sit with you after I have read and discuss it with you.
▶ 3:34:06Sen. Markey: Again, just honoring contracts. That's the bargain. I wish you could give us more certainty on that. Because the companies have made a variety of commitments in their community impact reports. As you pay out chips act awards, will you commit to enforcing the commitments these community impact reports require?
▶ 3:34:30Mr. Lutnick: Sure. To the extent moneys have been dispersed, I will commit to rigorously enforcing the documents that have been signed by those companies to make sure we get the benefit of the bargain. They have agreed to do things, I will rigorously enforce them.
▶ 3:34:46Sen. Markey: That is the bargain. These commitments were made as part of the final grant contracts. So it is unacceptable for the government to come back and ignore the terms of those agreements, because it was a bargain. And they have to get the benefit of that contract, which they signed. I'm going to be very much looking forward to see how you implement that. Let's turn to one final subject. Artificial intelligence.
▶ 3:35:17Sen. Markey: Ai has infiltrated every sector of our economy. We talked about this in my office. Housing, health care, employment, criminal justice system, social media, the list goes on and on. It's going to be in our society. While ai innovation is important, and we do want to use it to potentially find a cure for cancer and other diseases, that would be great. We also have to make sure the ai aged is not supercharge pre-existing bias and discrimination.
▶ 3:35:49Sen. Markey: Using super algorithms to look at people in our society, and make it easier to discriminate against them. Earlier this year, you seem to suggest the efforts to address discriminatory algorithms was "nonsense." I would like to have you expand a little bit. Is that accurate? Is that your view that as we move forward to ensure that ai algorithms don't allow for greater discrimination in our society, but that is not nonsense to have that as our goal?
▶ 3:36:18Mr. Lutnick: I think ai standards set by america are fundamental. And we should set fundamental standards trying to be, as I said, we were incredibly successful with the internet and our standards, and that created the greatness that is america and america technology. We are great the way we set standards in cyber. We have done a great job. It's the gold standard of the world.
▶ 3:36:46Mr. Lutnick: I would like us to pursue with commerce standard and ai that are like those two, which is setting the standard for the world.
▶ 3:36:58Sen. Markey: And I appreciate it. As the author of the three bills that moved americo to broadband, I understand that. But my question is, is there a senator side to cyberspace? Will you commit to working to prevent and mitigate discriminatory ai powered algorithms proliferating in our country?
▶ 3:37:18Mr. Lutnick: That makes sense.
▶ 3:37:20Sen. Markey: I look forward to working with you on that. Because I just think right now, we are hearing too much hype from the geniuses of what it will do, that is simultaneously -- somebody who has been discriminated against in the past, it is very likely the algorithms will be able to do that. Put real protections in place.
▶ 3:37:48Sen. Markey: We can already see the chinese will know how to come in without paying the price that our silicon valley geniuses have. And we have to make sure across the board, all of these companies, all of these algorithms meet the highest standards for protection. Thank you.
▶ 3:38:07Sen. Cantwell: Mr. chairman, if I could put for the record that a lot of the discussion about the ila j funding has connected 100,000 plus locations and billed 100 miles. The notion that nobody has gotten connected is just not correct. Thank you.
▶ 3:38:23Chair Cruz: Thank you, senator cantwell. I will note that it may be possible there are other programs that have connected people. The $40 billion bead program has connected zero phones and locations. I will also note for the record that you just had an exchange with senator markey about the chips and sciences program.
▶ 3:38:49Chair Cruz: The biden administration ignored the law and grafted onto it a host of left-wing social objectives, including mandates to open daycare's including the green new deal, including every policy agenda they had that was not in the law. And the idea that the commerce committee is somehow bound to follow the biden administration 's left-wing agenda that they could not get the votes for in the united states congress, is absurd.
▶ 3:39:19Chair Cruz: In my view, your obligation is to follow the law, not their extralegal policy addenda we are stuck onto those contracts. >> [indiscernible]
▶ 3:39:35Chair Cruz: The fact that the prior administration caused people to sign things that were not reflected in the law, there is no reason at all that they should be held to extralegal commitments that I recognize our policy objectives of democrats. But you did not have the votes to enact them into law. It was not an accident they were not in the law and it was purely disregarding the law that the biden administration forced them onto it.
▶ 3:40:05Chair Cruz: Fidelity to the law would be returning to the statute that was enacted to the law, not the policy preferences of the prior president. >> [indiscernible]
▶ 3:40:23Chair Cruz: There is nothing arm's-length when one side has $60 billion in the other side's strength to get it. It is not arm's-length. I understand they can do a highway robbery. But that is not an arm's-length negotiation. Yes, they want the money. Ok. >> [indiscernible]
▶ 3:40:44Chair Cruz: They are not bound by extralegal agreements and I feel confident the administration is going to follow actual federal law and not the policy preferences of the previous administration. We have an open vote we are about to miss. Let's not miss this vote.
▶ 3:41:02Sen. Cantwell: I will just say that we are all in agreement the united states needs to bring manufacturing to the united states and move ahead. Yes, please close this out. [applause]
▶ 3:41:11Chair Cruz: Mr. lutnick, my final question is required of all nominees. If confirmed, do you pledge to work collaboratively with this committee to provide timely responses to the committee's request, and appear before the committee when requested?
▶ 3:41:25Mr. Lutnick: I do.
▶ 3:41:26Chair Cruz: Thank you. I also have 29 letters of support from various organizations for Mr. lutnick's nomination to be secretary of commerce. I ask unanimous consent for the 29 letters to be inserted in the hearing record. Without objection, so ordered. Senators will have until the close of business on thursday, january 30, to submit questions for the record. The nominee will have until the end of the day on saturday, february 1, to respond to those questions.
▶ 3:41:55Chair Cruz: And we had testimony on how hard you work, so we are giving you a day. But we are moving promptly. That concludes today's hearing. The committee stands adjourned. [applause]