▶ 0:15:46Chair Crapo: The committee will come to order to meet to considerably -- consider favorably reporting congressman billy long to be the commissioner of the internal revenue service. As with other nominees the meeting will provide members with the opportunity to offer a marks on congressman long's nomination. We will then recess, briefly, following member statements and then proceed to this morning's nominations hearing.
▶ 0:16:14Chair Crapo: We will notify members of a time we had a location later today to conduct of the boat on congressman long's nomination. At his hearing he outlined his vision to transform the irs through systems modernization, renewed focus on efficiency, and a much-needed change in irs culture.
▶ 0:16:37Chair Crapo: It confirmed I look forward to working with him to make sure the irs focuses on helping american taxpayers to better understand and meet their responsibilities and that it forces the law with integrity and fairness to all. I was encouraged to hear him clearly commit that the irs will not and should not be politicized. I also would like to thank him for his time working through the finance committee's rigorous nomination process.
▶ 0:17:07Chair Crapo: In addition to responding to a large amount of questions for the record. At his hearing and in his written responses he clearly affirmed that all of his tax consulting work was as an independent contractor for capital edge strategies. He never performed work for white river or anyone else regarding native american tribal tax credits.
▶ 0:17:30Chair Crapo: With respect to the contributions to his senate campaign, he stated time and again that he followed federal election commission guidelines. In sum, he is uniquely suited for change of the irs and I will vote in favor of his nomination. I encourage my colleagues on both sides of the aisle to do the same. I now recognize the ranking member for his remarks.
▶ 0:17:55Sen. Wyden: Thank you, Mr. chairman. Over the last several years I have heard every member of this committee, all the democrats, all the republicans, talk about the importance of independence and neutrality at the irs. If you generally believe in those priorities, you cannot vote for billy long's nomination.
▶ 0:18:24Sen. Wyden: The nomination for irs commissioner. Here is what is known about congressman long. He wasn't on the ways and means committee. He wrote no original tax legislation in 12 years in the congress. He has no tax policy experience. But he has lots of tax fraud experience. When he left office he threw in with a bunch of fly-by-night operators selling tax deals that were sketchy at best.
▶ 0:18:56Sen. Wyden: He was paid to promote fake tribal tax credits by a company called white river energy. After their scheme got exposed as a fraud in a bloomberg deported mid-december, they reassured panicky investors that everything would work out. That they would soon have friends at the irs under donald trump to take the heat off.
▶ 0:19:26Sen. Wyden: He said he would be able to use his contacts to obtain favors and special private rulings. We have got this on tape. The cfo and several other white river employees started making big dollar donations to congressman long's senate campaign. It had been mothballed all the way back to 20. More than 165 thousand dollars came into the campaign after trump announced his nomination.
▶ 0:19:57Sen. Wyden: Much of it was from people affiliated with white river. Mr. long pocketed $130,000 of that himself. Now, he has repeatedly been asked to explain his role in the scheme I have described. What did he know about these fake tax credits? Who did he talk to about them?
▶ 0:20:20Sen. Wyden: Why didn't white river employees think it was a good idea -- why did white river employees think it was a good idea to donate to his dormant campaign? None of those questions were answered. Investigators obtained information from the irs that the tribal tax credits that he helped to sell were indeed fake and that the promoters could face prosecution. Staff read the confirmation allowed to him last month.
▶ 0:20:52Sen. Wyden: He became outraged. He demanded to know who at the irs had provided the information to the finance committee and said that he would find out immediately if he gets confirmed. If his involvement in that one tax scam was not enough, there is more. He was slinging employee retention tax credits long after they had technically expired, when a well-meaning waistcoat program for small businesses had been overrun by fraudsters.
▶ 0:21:23Sen. Wyden: Congressman long as on tape saying that everybody qualifies for the employee retention tax credit. That's a lie. He bragged about getting money for a funeral home even though the pandemic was a boom time for that kind of business because of the americans dying from covid-19. The finance committee investigators obtained another recording, this time of an executive at a firm called appreciation financial that sold these tax scam written tax credits.
▶ 0:21:52Sen. Wyden: He said he made congressman long his guest to the inauguration earlier this year. He said they had dinner and spent a few nights together. His exact quote on the subject of irs enforcement around retention credits is this -- we could be worried about promoter audits now that we don't have to worry about any of that with billy coming in, echoing the executive at white river in which the second tax credit promoter said he had been
▶ 0:22:23Sen. Wyden: Promised special favors by the congressman himself. Again, we have got it on tape. I haven't even mentioned his multiple letters urging politically motivated attacks against nonprofit organizations. That, colleagues, is going to be the opposite of new sally and independence that democrats and republicans talk about here in the committee. The fact is, these scandals I'm mentioning are too big to ignore.
▶ 0:22:53Sen. Wyden: Colleagues, I know for a fact that there will be more troubling information that comes to light. I close with this, it is not too late to go back and find somebody who isn't surrounded by scandal. Who has got the experience managing a large organization. Who has got some real experience working on tax policy. What is needed in our country now, more than ever, is an independent irs.
▶ 0:23:22Sen. Wyden: For that reason, I strongly oppose the long nomination and am going to urge my colleagues to do the same. Thank you, senator.
▶ 0:23:29Chair Crapo: Thank you. Normally, I would turn to any other senator interested in making a statement, but seeing none, unless there is objection, we will proceed to a recess, briefly, before the hearing scheduled for 10:34 other nominees and we will vote off the floor at a time to be agreed. Is there objection?
▶ 0:23:51Sen. Wyden: There isn't. I want to make sure it so all understand, the regular hearing at 10:30, 45 minutes from now.
▶ 0:23:59Chair Crapo: That's correct.
▶ 0:24:00Sen. Wyden: Thank you. With that, the committee stands in recess. -- chair crapo: with that, the committee stands in recess.
▶ 1:17:35Sen. Wyden: >> this hearing will come to order. Thank you to our nominees, Mr. barloon, Ms. dhillon, and Mr. morrissey for being here today. Congratulations on your nominations and think you all for your willingness to serve. Today we will first hear from job are loan, who is nominated to serve as -- joseph barloon, who is nominated to serve as deputy trade representative for the wto.
▶ 1:18:04Sen. Wyden: The wto is an important institution but in need of stronger american leadership. The last administration failed to engage the organization in a number of areas, including negotiations on rules for digital trade. This weakened existing disciplines, including property rights under the wto trips agreement. Mr. barloon is well-positioned to risk -- to restore U.S. leadership at the wto. During president trump's first term Mr.
▶ 1:18:34Sen. Wyden: Barloon served as the ustr general counsel and as an act deputy ustr. Those roles gave him first-hand experience in wto operations, including its dispute settlement system and the need for its reform. Mr. barloon, as our country's top wto official in geneva I look forward to learning more about how you would leverage your ustr and private sector experience to protect and promote america's interests.
▶ 1:19:06Sen. Wyden: The second nominee before us today, janet dhillon. Who is nominated to serve as the director of the pension benefit guarantee corporation. The pbgc plays an important role in securing workers' retirement benefits and your nomination comes at an important moment.
▶ 1:19:26Sen. Wyden: In addition to operating insurance programs that protect millions of americans' retirement benefits the pbgc has been charged with implementing a special natural assistance program. A program created to bailout employer pension plans. There has been bipartisan interest in addressing the underlying structural problems that have plagued the multi-employer pension system for years.
▶ 1:19:53Sen. Wyden: Rather than focus on long-term bipartisan solutions the american rescue plan pumped 90 billion taxpayer dollars into these plans, with no reforms to prevent more plans from failing. While the pbgc has encountered issues implementing this program, I appreciate the efforts of the pbgc staff and agency leadership to implement a program that is a departure from the agency's core mission. Ms.
▶ 1:20:21Sen. Wyden: Dhillon, you are well suited to take on these challenges, along with the responsibility of overseeing the insurance programs that protect millions of americans' retirement benefits. I look forward to working with you and hearing how you will approach this role. Finally, we will hear from brian morrissey. Who is nominated to serve as general counsel of the treasury department.
▶ 1:20:44Sen. Wyden: The general counsel of the treasury department must provide nonpartisan legal and policy advice to the secretary and other senior department officials. As congress works to enact new pro-growth tax policy the general counsel will be a vital team member during the department's efforts to craft regulations and other guidance related to the bill. Mr.
▶ 1:21:08Sen. Wyden: Morrissey is undoubtedly qualified for the job, having previously served as the deputy general counsel at the treasury department during the first trump administration. Mr. morrissey's nomination has also been supported by individuals on both sides of the aisle. Prior general counsel's in democratic and republican administrations reaching back to 1977 have written in support of his nomination. Mr. morrissey, I look forward to working with you, if confirmed.
▶ 1:21:38Sen. Wyden: Thank you wall, again, for your time today, and with that I recognize ranking member wyden or his opening remarks.
▶ 1:21:45Sen. Wyden: Thank you very much. We discussed three important nominations. The general counsel of the treasury, the head of the pension benefit guarantee corporation, and deputy U.S. trading representative. I'm going to start with the nominee to be treasury's top lawyer. Ryan morrissey is a well-qualified nominee who has the right sort of experience inside the federal government and in the private sector.
▶ 1:22:13Sen. Wyden: The real question is, how does somebody approach being in-house counsel for an administration that makes sport out of breaking the law. -- the law? The trump administration has illegally fired treasury employees. The president is determined to crack down on free speech by weaponizing the irs. It is stopping all over taxpayer privacy laws in what I believe are extraordinarily dangerous approaches.
▶ 1:22:44Sen. Wyden: I have serious concerns about the trump administration watering down a key anti-mondrian laundry -- anti-money laundering law. This was a bipartisan effort led by senator whitehouse and I with the current secretary of state, senator rubio -- former senator rubio. It took years to get it passed. Undermining it is a gift to financial criminals. Mr. morrissey's credentials, in my view, having discussed matters with him yesterday, are not really the issue.
▶ 1:23:16Sen. Wyden: If he is confirmed he is going to be surrounded by corruption and lawlessness the minute he walks through the door. He can expect to face him hard-hitting questions on these and other issues today as he and I have discussed. Next up, janet dhillon's nomination to be the head of the pension benefit guarantee corporation. It would be fair to say you don't get a lot of discussion in coffee shops across the land about the pbgc.
▶ 1:23:46Sen. Wyden: But the agency gets the job done month after month, year after year, helping millions of workers and retirees who probably did not realize the agency is a lifeline that ensures they are able to enjoy a dignified retirement.
▶ 1:24:01Sen. Wyden: It is a key to guaranteeing people receive the benefits they have earned through years and years of hard work in 2021 democrats passed a law called the butch lewis statute that strengthened the pbgc and saved the pensions of more than a million and a half retirees and beneficiaries. In the process the agency has done important work in cutting down on improper payments and recovering dollars that should not have gone out.
▶ 1:24:30Sen. Wyden: These payments account for less than 1% of the funds that have rescued the pensions of so many americans under the butch lewis law. There has been an effort by some republicans to attack the statute and undermined the pbgc finances. In my view that would be a recipe for disaster for millions of americans. My democratic colleagues and I want to make sure nobody metals with the law.
▶ 1:24:56Sen. Wyden: If you do, you are driving millions of americans into destitution and endangering the retirements of many more. Ms. dhillon has some experience in federal service, but even more in private practice. During the first trump administration she was chair of the equal opportunity employment commission, and senators have raised concerns about her tenure in that role. A whole lot of vulnerable americans had nowhere to turn when they faced discrimination in the workplace.
▶ 1:25:25Sen. Wyden: It was a big win for big corporations who wanted to get away with sweeping discrimination cases under the rug. My colleagues on the senate health committee were denied an opportunity to get answers about Ms. dhillon's work at the eeoc, and they also were not able to talk with her about her plans for the pension benefit corporation if she is confirmed. My hope is that we will begin to be able to make up for that today. Finally, Mr.
▶ 1:25:54Sen. Wyden: Barloon's nomination to serve as deputy U.S. trade representative to the wto. Donald trump is charging ahead with poisonous tariffs and erratic trade threats that have raised prices for families and wrecked supply chains for american businesses. A better strategy would be fixing the trade system to make sure that U.S. workers, farmers, and companies are able to get a fair shake. That, in my view, includes fixing the work -- the wto.
▶ 1:26:23Sen. Wyden: There has been a lot of talk about how it needs reform, so out -- so what I would like to hear today is how the trump administration and Mr. barloon are going to move beyond these cliches and platitudes and threats and get something done. I also have concerns about Mr. barloon's statements with respect to his work for foreign entities. He gave inconsistent answers to questions by our staff about whether he advised a foreign government on trade matters.
▶ 1:26:53Sen. Wyden: So, we need some clear answers on this from the nominee on why he did and why he didn't fully disclose these matters during the vetting process. Thanks to all three of you for joining us here today. I look forward to your questions and answers.
▶ 1:27:07Chair Crapo: Thank you, senator wyden. In a moment our nominees will share their opening statements. Before doing so I will provide a short introduction for each nominee. Disturb our loan is a partner in the law firm skadden arcs. He served as general counsel to ustr lighthizer and as acting deputy ustr. As general counsel Mr. barloon led U.S.
▶ 1:27:37Chair Crapo: Enforcement actions against several, -- several countries and was responsible for the litigation on behalf of the U.S. at the world trade organization. In addition he was the chief U.S. council for adoption end up limitation of numerous trade agreements, including the united states-mexico-canada agreement, usmca. Ms. dhillon previously served as the chair of the equal employment opportunity commission during president trump's first term.
▶ 1:28:06Chair Crapo: She has also served as general counsel in the private sector, including at dollar tree stores, burlington stores, jcpenney, and us airways. Ms. dhillon also practiced that the law firm of skadden arps. Mr. morrissey is currently a partner of sidley austin. During president trump's first term he served as deputy general counsel for the treasury department and in senior roles at the department of justice. He has also served as a law clerk to clarence thomas.
▶ 1:28:38Chair Crapo: Before each of you give your opening statements I have four obligatory questions we ask all nominees before the senate finance committee. First, is there anything that you are aware of in your background that might present a conflict of interest with the duties of the office to which you have been nominated? You can each just answer briefly across the line. No senator. No -- >> no senator.
▶ 1:29:08Chair Crapo: You know of anything that will prevent you from discharging the duties of the office to which you have been nominated? >> no, senator.
▶ 1:29:17Chair Crapo: Do you agree to respond to any reasonable summons to appear and testify before any duly-constituted committee of congress if you are confirmed? >> yes, senator. >> yes, senator.
▶ 1:29:30Chair Crapo: Do you commit to providing a prompt response in writing to any questions addressed to you by any senator of this committee? >> yes, senator. >> yes, senator.
▶ 1:29:41Chair Crapo: Thank you. We will begin with Mr. barloon's opening statement, followed by Ms. dhillon, and then Mr. morrissey.
▶ 1:29:49Mr. Barloon: Chairman crapo, ranking member wyden, and members of this committee, I am honored to appear before you today as president trump's nominee for deputy united states trade representative and united states ambassador to the wto. I am grateful to president trump and ambassador greer for their trust and confidence. I appreciate the time that members and staff of the committee have spent with me and I look forward to working with you if I am confirmed.
▶ 1:30:20Mr. Barloon: I also want to express my appreciation to my family, many of whom are present today. I am grateful to my father and my late mother, as well as my four siblings. I am particularly thankful for the support of my wife, susan, my children, joseph, claire, and timothy. I was honored in 2019 when robert lighthizer asked me to join ustr as general counsel. And he subsequently asked me to serve as acting deputy.
▶ 1:30:50Mr. Barloon: I learned a tremendous amount, working every day with ambassador lighthizer and admire his commitment to making trade work for ordinary americans. While at ustr I also worked side-by-side with jamison greer. His deep knowledge of trade laws, his commitment to our country, and his skills in forging consensus and exhibiting leadership were extraordinary. I am very much looking forward to working with ambassador greer again if I am confirmed.
▶ 1:31:20Mr. Barloon: The united states has benefited tremendously from international trade over the course of our history. But in recent decades many americans have been hurt by trade policies and practices that did not always place the american economy and the american worker first, and that depended on a faith that all of our trading partners play by the rules. A faith we now know to be misplaced.
▶ 1:31:44Mr. Barloon: President trump's america first trade policy aims to make trade work for the benefit of all americans by creating jobs, promoting innovation, strengthening the national defense, raising wages for our workers, and restoring our manufacturing capabilities. Early in my tenure as general counsel I traveled to geneva and met with senior wto officials and representatives from many of our key trading partners.
▶ 1:32:11Mr. Barloon: As general counsel I supervised the litigation of wto disputes and our office issued a comprehensive report on the wto appellate body. These experiences made clear to me the many ways in which the wto has fallen short of its great promise. The wto was designed to be an organization of like I did members committed to market-oriented policies.
▶ 1:32:35Mr. Barloon: The wto was founded to promote reciprocal arrangements to reduce trade barriers, predicated on free and fair competition in global markets. But the wto has strayed from its founding purpose and has failed to achieve these objectives. There are many reasons for this failure. Chief among them are the admission to the wto of non-market economies that are not committed to its founding principles, as well as the failure of many members to meet their applications -- to meet their obligations.
▶ 1:33:05Mr. Barloon: Moreover, the wto's spewed settlement system drifted from the limited role its founders envisioned and took on a roll more akin to a world trade court , purporting to create new law that would bind the united states and other members. Despite these failings I believe the wto may still be able to reform in ways that will help it achieve its founders' goals. U.S.
▶ 1:33:29Mr. Barloon: Farmers, fishermen, ranchers, and businesses of all types will benefit from increasing access to the markets of wto members. This can be done by ensuring that wto members follow the rules. If confirmed my role will be to work in good faith with representatives of other wto members to help advance the interests of the united states, whether directly through wto bodies or indirectly through dialogue and collaboration with
▶ 1:33:59Mr. Barloon: Members that share our concerns and are committed to the wto principles of fairness and reciprocity. Thank you for considering my nomination, and I look forward to answering your questions.
▶ 1:34:09Chair Crapo: Thank you very much. Ms. dhillon.
▶ 1:34:11Ms. Dhillon: Thank you, chairman crapo, and members of the committee, for the opportunity to appear before you today. It is an honor to be here as president trump's nominee to be director of the pension benefit guaranty corporation, and I think the president for his nomination. With me here today is my husband. We will celebrate our wedding anniversary in august and I am grateful every day for his love and support. I grew up in southern california.
▶ 1:34:43Ms. Dhillon: The daughter of two public school teachers. While my parents were never wealthy, they were able to retire comfortably with the security of the pensions they earned as schoolteachers. I witnessed firsthand the positive impact that a financially-secure retirement has on retirees and their families. After college and law school I worked in private practice for 13 years.
▶ 1:35:07Ms. Dhillon: I then moved to an in-house role and served as a general counsel for several fortune 500 companies. In 2017i was privileged to be nominated by president trump to be a commissioner on the eeoc. After confirmation I served as chair and commissioner of the eeoc, and following the 2020 election I served as a commissioner on that five-member body.
▶ 1:35:34Ms. Dhillon: As chair I led the eeoc's response to the covid-19 pandemic, providing timely compliance assistance to the much-cited what you should know series. I am proud of the eeoc's results during my tenure. In fiscal year 2020 the eeoc secured a then-record amount of recovery, $535 million, for victims of discrimination in the workplace.
▶ 1:36:03Ms. Dhillon: At the same time the agency reduced its backlog of pending private-sector charges to the lowest lel in 14 years and its backlog of hearing requests declined by almost 16%. I believe that my roles in leadership positions in the private sector, as well as my experience leading a federal government agency, provide me with experience that will equip me well for the position of director of the pbgc.
▶ 1:36:31Ms. Dhillon: If I have the privilege of being confirmed I will work to ensure that the agency operates with excellence and that its actions are fully transparent. Today over 31 million workers, retirees, and beneficiaries rely on the pbgc to protect their retirement security. Pbgc itself, overseen by its board of directors, manages assets valued at over $150 billion.
▶ 1:36:59Ms. Dhillon: Despite its outsized role in protecting the retirement security of the american worker, the pbgc has faced challenges. For instance, the special financial assistance program authorized under the last administration required pbgc to quickly develop and implement rules and processes to review applications and authorize payments to multi-employer pension panel -- pension plans. This work was unprecedented and complicated. The speed at which the pbgc worked was admirable.
▶ 1:37:30Ms. Dhillon: But there were lapses. The payment to multi-employer plans for dead participants was unfortunate, and the length of time it took to address was troubling. The pbgc is now running a surplus, particularly with respect to the single employer plan program and that surplus is expected to grow. It raises questions about the size of the premiums employer plan sponsors are required to pay.
▶ 1:37:57Ms. Dhillon: I realize pbgc does not set those premiums, and I recognize that the size of the premiums has a budgetary impact. Nonetheless, I think this is an issue worth debating and if I am confirmed I look forward to working and engaging with congress on this important topic. There are also historical issues involving the pbgc that remain of concern. The treatment of the delphi salary workers during the general motors bankruptcy continue to raise questions.
▶ 1:38:28Ms. Dhillon: I'm ready to work with this committee and congress to address all of these issues and more. If confirmed, I will put my experience in the private sector and that of eating the federal government agency to work to review all of the aspects of the pbgc's operations, ensure the agency is operating with excellence, and is responsive to congressional oversight. Thank you for your consideration, and I look forward to your questions.
▶ 1:38:54Chair Crapo: Thank you. Mr. morrissey.
▶ 1:38:58Mr. Morrissey: Thank you, chairman crapo, ranking member wyden, and members of this committee. It is an honor to appear before you today as you consider my nomination to serve as general counsel of the department of the treasury. I would like to thank president trump for this opportunity to serve our country, and I would like to thank secretary bessent for his confidence in me. I am also grateful to the members and staff of this committee, who have taken the time to meet with me.
▶ 1:39:29Mr. Morrissey: I appreciated these opportunities to discuss your priorities and if confirmed I look forward to working together. I would also like to thank my family. First, my wife is here today. Karen and I met as classmates at the notre dame law school, and since then we have both been blessed with opportunities for public service at points in our careers. First as law clerks at the U.S. supreme court, and later as lawyers in the department of justice.
▶ 1:39:57Mr. Morrissey: I'm grateful for cara's support and love in all of our many adventures. Next, our three sons, each of whom we are proud of. Daniel, age 12, sean, age nine, and brendan, age three. Finally, my parents, brian and catherine morrissey, and care's parents. -- cara's parents.
▶ 1:40:22Mr. Morrissey: They're not enough words to adequately thank each of you for the countless sacrifices made raising us and those you continue to make for our family today as we raise our boys. I had the privilege to serve at treasury during the president's first term, including during the pandemic, when much of our work focused on implementing the important legislation congress enacted to see the country through that storm.
▶ 1:40:45Mr. Morrissey: If confirmed it would be an honor to return to the department and contribute to its efforts to meet the new challenges and new opportunities we face today. It would also be a special privilege to lead treasury's legal division, which I know from personal experience is home to some of the finest and most dedicated lawyers in the world. I would be honored to become colleagues with them once again. Treasury's responsibilities are vitally important.
▶ 1:41:16Mr. Morrissey: The liberty and prosperity of all americans depends in no small measure on treasury's ability to successfully protect the integrity of our financial system and tax code, to advance policies that foster economic growth, and to use the united states' economic power to combat threats to our national security. The legal division does not set policy in any of these areas.
▶ 1:41:42Mr. Morrissey: Rather, our role is to ensure that the actions treasury takes to fulfill its mission are lawful, durable, and clear. First and foremost, we are responsible for ensuring that the treasury's actions are faithful to the laws congress has entrusted the department to administer and ultimately to the constitution we all take an oath to serve.
▶ 1:42:07Mr. Morrissey: Second, we are called upon to provide policymakers with our best judgment on how those department's legal authorities appropriately may be used to solve the challenges of the day, while minimizing litigation and other risks. And third, we have a duty to ensure the treasury's legal actions are clear.
▶ 1:42:26Mr. Morrissey: As I have learned from both sides of the table, serving in government, and representing clients in the private sector, the first step to compliance is ensuring that the rules of the road are clearly stated and adequately explained. If confirmed, my legal advice will always be rooted in these principles. If confirmed, I will also remain focused on the importance of a close working relationship with congress.
▶ 1:42:55Mr. Morrissey: That was an enduring lesson from my time at treasury during the pandemic, when there was no time to waste in ensuring that the department implemented the laws congress passed to combat that threat lawfully, swiftly, and effectively. I hope to rely on that experience in our future work together.
▶ 1:43:15Mr. Morrissey: And, finally, if confirmed I pledge to the committee that I will honor legal division's proud tradition of integrity, excellence, and professionalism, and that I will work every day to serve as a faithful steward of that office, who aims to build upon its strong foundation and pass it off stronger to future leadership. Thank you again for your time today and I look forward to your questions.
▶ 1:43:37Chair Crapo: Thank you, Mr. morrissey. I will start with you, Mr. barloon. As ustr's former general counsel you supervised U.S. litigation in the wto dispute settlement system. It is not a perfect system, particularly because many disputes drag on for years, but it can be a useful tool. Particularly for expanding agricultural market access.
▶ 1:44:02Chair Crapo: While I understand there is a need to reform wto dispute settlement, we should not count it as a tool altogether. If confirmed, would you support the united states super -- pursuing offensive wto in cases where appropriate, particularly for america's agriculture industries?
▶ 1:44:20Mr. Barloon: Thank you for that question, chairman crapo, and, yes, most definitely I will do so. During my time in the first trump administration we did pursue disputes at the wto.
▶ 1:44:35Mr. Barloon: I don't believe there are disputes pursued more recently, but I certainly think there is a role for the wto dispute settlement system, particularly to gain access for our farmers and businesses.
▶ 1:44:51Chair Crapo: Thank you. The prior administration abandoned key, long-standing digital trade commitments in the e-commerce negotiations at the wto. These included promoting the fleet -- the free flow of data, combating forced data localization, preventing forced technology transfer, and promoting open, competitive markets for digital goods and services.
▶ 1:45:19Chair Crapo: And we expect to see the ustr actively promote these digital trade commitments at the wto? Particularly and especially given the policy vacuum china and russia will otherwise fail?
▶ 1:45:31Chair Crapo: Thank you for that question, senator. Yes, I believe advancing digital trade should be a key component of U.S. trade policy. And I believe that there are many areas, such as the ones you mentioned, and then discriminatory policies of some of our training partners regarding digital trade in our companies that need to be addressed at the wto and I look forward to working with you and your office if I'm confirmed on that issue.
▶ 1:45:59Chair Crapo: Thank you very much. Ms. dhillon, the democrats' special financial assistance program provided nearly $90 billion to pay for failing multi-employer plans without requiring any reforms to how those plans operate. As a result, the shortcomings of the system remain.
▶ 1:46:28Chair Crapo: Although the pbgc does not create policy, congress does rely on the pbgc for technical assistance. In this committee we value your insight. Can you discuss the changes congress should consider to strengthen the multi-employer pension system?
▶ 1:46:44Ms. Dhillon: Thank you, senator, for that question, and I agree with your statement that the special financial assistance program, while it certainly provided benefits to the members of those multi-employer plans that were in critical financial condition what it did not do was address the overall structural issues with the multi-employer pension pan -- plan system.
▶ 1:47:14Ms. Dhillon: While the programs that qualify for financial assistance have received funds, there is still an issue of the remaining program. So, if I am confirmed I would want to work with the experts at the pbgc to provide input and technical assistance to the policymakers in congress to address the continuing issues with multi-employer pension plan system.
▶ 1:47:39Chair Crapo: Thank you very much. Mr. morrissey, in your role as deputy general counsel during the first trump administration you undoubtedly became very involved in what we now fondly call the t cja, tax cuts and jobs act, which is going to expire at the end of this year if we do not extend it.
▶ 1:48:04Chair Crapo: You advise leaders across the department on a broad range of legal issues that arise from the many important programmatic and policy responsibilities that congress has entrusted to the department. In that law, as well as others. Can you discuss how your experience in the first administration will help you as you advised treasury personnel on regulations related to this forthcoming tax legislation?
▶ 1:48:27Mr. Morrissey: Thank you for the question. It is important in any year when congress is considering tax legislation, as you mentioned, that the legal division at treasury is working proactively with the irs and office of tax policy that if there is new legislation passed we are working with them to get rules and guidance out that are appropriate for taxpayers and preparers and that we are doing it swiftly, so that preparers can rely on that in the next tax
▶ 1:48:57Mr. Morrissey: Season.
▶ 1:48:57Chair Crapo: Thank you very much. Senator wyden?
▶ 1:49:00Sen. Wyden: Thank you very much, Mr. chairman. If you are confirmed, Mr. morrissey, you would be one of the top lawyers in government. The top lawyer at treasury. So, I want to go through some of the priorities I have, and particularly people often say I am a privacy hawk.
▶ 1:49:23Sen. Wyden: I think it is an honor to be called a privacy hawk and I want to walk you through some of the realities of privacy policy today, and in particular doge stomping all over taxpayer privacy. The center for taxpayer rights and others have sued the administration, arguing it broke the law by allowing doge and dhs to access tax return information.
▶ 1:49:47Sen. Wyden: At risk, then, was the most private personal and financial data virtually everybody in the united states. Home addresses, bank accounts, income levels, social security numbers, and much more. We had the acting irs commissioner and chief privacy officer resigning or pushed out over this.
▶ 1:50:08Sen. Wyden: So, my first question to you is, what would you do if on day one you walked in to a massive violation of privacy rights affecting millions of taxpayers?
▶ 1:50:23Mr. Morrissey: Thank you, senator wyden, and for the time you and your staff took to meet with me. I appreciated that opportunity. Senator, I think maintaining the privacy protection for taxpayer information is one of the most important responsibilities treasury and irs have. I think treasury has an obligation to look for ways to be more efficient, to look for ways to modernize systems.
▶ 1:50:48Mr. Morrissey: Whenever that is done I am committed to making sure it is done in a way that complies with 6103 and all of the statutory protections for taxpayer information.
▶ 1:51:01Sen. Wyden: So, you told me you are familiar with taxpayer privacy law, and what else would you do besides what you just said? Because to tell me that you will comply with a law is not a whole lot for somebody who has got real expertise, by their admission, in privacy law. I was pleased when you said privacy law is important. I would just like to figure out what the heck you would do.
▶ 1:51:26Mr. Morrissey: It would depend on whatever the particular program is that is being raised, but anytime we are discussing how the irs or treasury is maintaining taxpayer information it is important that we are fulfilling statutory responsibilities for the privacy protections for that information and also the day get -- data integrity responsibilities.
▶ 1:51:47Sen. Wyden: Doesn't a lawyer have an obligation to stop representing a client who is breaking the law?
▶ 1:51:54Mr. Morrissey: Senator, my job is general counsel is to work with all policy components at treasury to make sure they are fulfilling the statutory mission of the department in a lawful and appropriate way. That is what I will be committed to do if confirmed.
▶ 1:52:09Sen. Wyden: Are you telling me a lawyer doesn't have an obligation to stop representing a client who is breaking the law? Because that is a very real world question given what is going on with doge.
▶ 1:52:21Mr. Morrissey: Senator, my obligation is to work with all of our policy components to make sure they understand the legal obligations that this congress has put upon their debt Sen.
▶ 1:52:33Wyden: We have gone past that. I want to know what you do.
▶ 1:52:36Mr. Morrissey: I'm committed to making sure those components follow the law.
▶ 1:52:41Sen. Wyden: I will just tell you again, for somebody who is really -- has really worked in the privacy space, I expect more. As I indicated in the office, I think you have the expertise. I think you have the track record. But you are walking into an awfully corrupt situation, and that is why I asked you about a very real example. Me ask you about one other matter. That is staffing at the irs.
▶ 1:53:09Sen. Wyden: 20 state attorneys general and others argued the administration illegally fired probationary employees and lied to cover it up saying they were fired for poor performance. Two district courts agreed and temporarily ordered the employees to be rehired. So, what would you do if confirmed to deal with this kind of illegal and deceptive activity and make sure it does not continue?
▶ 1:53:32Mr. Morrissey: Thank you, senator. It is important for treasury, working with the irs, to make sure the irs is working appropriately. If there are operational or personnel changes designed to enhance collections or customer service, that we are doing those in compliance with all laws. That would include personnel laws. If performance reviews are part of that it is appropriate and important for the personnel reviews to reflect -- new Sen.
▶ 1:53:59Wyden: Are you can --
▶ 1:54:04Sen. Wyden: Are you concerned that taxpayers will not get refunds next to jacob I'm looking for some of the real-world consequences, because you are a real lawyer, unlike me. I would like to know what you would do to do with the refund issue, for example.
▶ 1:54:19Mr. Morrissey: Senator, I think it is important that the irs be focused on modernization efforts and improving and enhancing its operational capabilities. But I am committed to making sure that in doing that the irs is fulfilling all of its statutory responsibilities, and that includes responsibilities related to refunds.
▶ 1:54:37Chair Crapo: Thank you. Senator grassley.
▶ 1:54:41Sen. Grassley: I'm going to submit to each of you questions for answers in writing. I want to spend my time talking to Mr. barloon. Not in questions, but some frustration I have about the process of negotiations that are going on now with trade. I have no problems with the president's goal. At this point I have no problems with maybe what is going on, but I don't know what is going on and I don't think most of the people know what is going on.
▶ 1:55:13Sen. Grassley: He would be nice if we had some positive signals coming. But because you work for lighthouse or, and at the end of his first term there is special trade representative, he was starting to negotiate with countries in africa. Remember kenya, who started out and was going to lead to other countries that maybe we don't even know from the name that they are in africa?
▶ 1:55:42Sen. Grassley: But, they were seen as a wonderful opportunity for the united states. And we have 110 countries that have come to the united states after liberation day, that they said they wanted to negotiate with us.
▶ 1:55:59Sen. Grassley: And I know we have real serious negotiations going on with maybe 15 to 20 countries right now, and I would like those to be successful, but I think we are missing a wonderful opportunity for all of those countries that we don't even think about doing trade with. And this goes from experiences we have had negotiating with lesser countries and very successful negotiations.
▶ 1:56:27Sen. Grassley: And I'm talking about in the past the negotiations we have had with australia, bahrain, domestic -- dominican republic, colombia, panama, peru, morocco, obama -- oman, I mean, and singapore. Since these agreements with these countries were implemented the data is pretty clear.
▶ 1:56:55Sen. Grassley: The combined trade and goods surplus with these shifting countries has grown from about $7 billion to almost $56 billion. 689% increase. If these were a country it would be by far the largest trade in goods surplus the united states has within a country in the world.
▶ 1:57:21Sen. Grassley: So, while we are spending our time negotiating very difficult negotiations with these big trading partners that we consider -- I'm talking about europe, united kingdom, south korea, japan, india, indonesia, china. Hopefully those mature.
▶ 1:57:47Sen. Grassley: And if these are successful it is a big deal, but we are forgetting about all of these smaller countries that it seems to me we have absolute proof that it delivers the goods, positive for our trade balance, and it seems to me we ought to be spending some kind -- sometime almost parallel with these 18 countries we are negotiating and spend some time with negotiating with far easier
▶ 1:58:21Sen. Grassley: Countries that are probably very anxious to make deals with the united states. Now, I would ask you for action. If you don't have any that is ok with me, but I have a minute and eight seconds. You can use it if you want to use it.
▶ 1:58:37Mr. Barloon: Thank you for that question, senator, and for your comments. I very much enjoyed meeting with you in your office as we discussed -- your office. As we discussed, my parents were born and raised in iowa.
▶ 1:58:54Mr. Barloon: I agree that we have achieved tremendous success by having arrangements and agreements with a number of different countries, and some that you would not necessarily think of. Particularly for opening agricultural access.
▶ 1:59:12Mr. Barloon: Certainly if I'm confirmed I will do what I can at the wto to meet with representatives of all countries and to try to further that agenda, and do what I can to try to get agreements so that we can get better trade relations with all of these countries.
▶ 1:59:30Sen. Grassley: Thank you.
▶ 1:59:31Chair Crapo: Thank you, senator grassley. Senator whitehouse.
▶ 1:59:36Sen. Whitehouse: Thanks very much, chairman. Mr. morrissey, section 721 seven of the internal revenue code says it is unlawful for the president or for cabinet secretary is to request directly or indirectly that the internal revenue service audit or investigate any particular taxpayer. Are you clear on that provision?
▶ 2:00:04Mr. Morrissey: Senator, thanks for the question, and for the time you and your staff took to meet with me on this. Yes, I am clear and aware of that.
▶ 2:00:13Sen. Whitehouse: And it is criminal act?
▶ 2:00:16Mr. Morrissey: That statute includes potential criminal penalties.
▶ 2:00:20Sen. Whitehouse: Let me turn to the corporate transparency act, which we also talked about, and which also has both law enforcement and national security components to it. And since chairman crapo and chairman grassley are both here, let me take a moment to thank them for their leadership in getting that will through.
▶ 2:00:43Sen. Whitehouse: It sort of developed in the judiciary committee under senator grassley and moved to the banking come in the -- making committee to get past there. I want to thank them for their good work. We did good work here too. So, just a couple of observations. The foundation for defense of democracies has said that the existing proposed fenced in final rule "would deliver a profound blow to U.S.
▶ 2:01:10Sen. Whitehouse: Law enforcement and national security interests. And noted that norco traffickers widely use U.S. anonymous shell companies to hide their identities come longer cash, and commit crimes. The hudson institute warned that the interim final rule " undermines U.S. foreign policy and national security. The george w. Bush institute agrees that it undermines the intended purpose to safeguard the national security of the united states.
▶ 2:01:41Sen. Whitehouse: The quincy institute said the rule is a threat to U.S. national security. The national district attorneys association predicted ever stating consequences for law enforcement's ability to fight criminal enterprises that exploit shall countries, longer monday, and fund human trafficking and terrorism. The national narcotics officers association said requiring businesses to disclose their true beneficial owners under the cta is a critical tool for law enforcement.
▶ 2:02:12Sen. Whitehouse: Do you understand the national security and law enforcement imperatives that caused this bipartisan law to be passed in the last trump administration, with the active support of the administration?
▶ 2:02:23Mr. Morrissey: Senator, thank you, and thank you for our discussion of this in your office. Yes, I am familiar with that statute and the important responsibilities the treasury has to root out illicit finance. I think this is the information covered by this is some of the, you know, is very important information.
▶ 2:02:43Sen. Whitehouse: I would urge you to bring that awareness with you into your position at treasury. I believe that there is a international illicit economy that has now sufficiently -- is now sufficiently robust and takes on all kinds of different miscreants.
▶ 2:03:07Sen. Whitehouse: Whether you are a kleptocratic who has looted your country so that it doesn't have good roads or hospitals, but you have billion's of dollars to stash away, or whether you are a fentanyl trafficker dealing with billions of dollars that needs to be hidden and squirreled away, or a human trafficker or arms trafficker or international criminal organization, or one of putin's cricket oligarchs, they are all served by this illicit
▶ 2:03:37Sen. Whitehouse: Economy and I think it is very much in the united states' both law enforcement, domestically, and national security, international interests to make sure that we are attacking that illicit economy. Because the entities that it serves and the individuals that it serves are most certainly our enemies. So, I hope that you understand that.
▶ 2:04:06Sen. Whitehouse: I will ask you -- I have 30 seconds left, so I will ask you to comment on what you think is the case with respect to the danger to the united states of that international, illicit economy that aids and abets or gives aid and comfort to our enemies.
▶ 2:04:22Mr. Morrissey: Thank you, senator. Yes, illicit finance can foster a range of criminal activities that undermine national security. There it drug trafficking, learning -- money laundering, human trafficking. When the department considers regulating in this space it is imperative that law enforcement has the information it needs and that we are regulating responsibly and in a way that does not impose undue burdens on lobbying -- law-abiding taxpayers.
▶ 2:04:50Sen. Whitehouse: My time is expired and I think the ranking member.
▶ 2:04:54Chair Crapo: Senator blackburn is next.
▶ 2:04:57Sen. Blackburn: Thank you, and congratulations to each of you. We are pleased to have you before us today, and hope that we can find bipartisan agreement in moving you swiftly so that you can do the job that you have been nominated to do. Mr. morrissey, let me come to you. First I want to talk about small business.
▶ 2:05:23Sen. Blackburn: In tennessee well over 75% of our employers are classified as small businesses, and they actually file as a pass-through entity. And we want them to stay productive and healthy and grow. And continue that good employment.
▶ 2:05:49Sen. Blackburn: During the biden administration what we realized was that there treasury, their irs, their administration did not share our view of the importance of these businesses, and in order to push a lot of their agenda they targeted for audits these small businesses.
▶ 2:06:11Sen. Blackburn: My service in the house, my service in the senate, we had never had so many questions and so many complaints as we are coming in about the mistreatment and targeting of these small businesses. If you are confirmed, you would be called on to provide counsel to those at the treasury department on the matter.
▶ 2:06:41Sen. Blackburn: So, how would you advise them? And also, does it bother you and trouble you that there is this targeting? And then, how would you advise at treasury and at the irs in moving forward with this?
▶ 2:07:01Mr. Morrissey: Senator blackburn, thank you very much for the question and the time you and your staff took to meet with me and discuss some of these issues. It is highly important when the irs is act, or any that has enforcement authority, that the department is acting impartially based on the facts and evidence and using neutral and objective criteria. On the enforcement side, that is what I would be committed to do. You mentioned rulemaking as well.
▶ 2:07:31Mr. Morrissey: I think it is important when treasury and the irs our country -- are considering rulemakings, whether they apply to small businesses or others. We are responsibly assessing the costs and benefits and making sure any statutory requirement has a cost-benefit rationale. That is what I would be committed to advising.
▶ 2:07:52Sen. Blackburn: Thank you for that. Also we talked about pillar two and the concerns they are. As I told you, I had created a chart of who paid what in pillar two, and it was astounding that what you have is U.S. companies responsible for nearly 40%. And it is amazing that the biden administration ever agreed to that. And you have china over here with 7%.
▶ 2:08:24Sen. Blackburn: That they are paying on that. So, how would you advise secretary bessent and others in the administration about the importance of protecting U.S. companies in these negotiations?
▶ 2:08:37Mr. Morrissey: Thank you, senator, and I appreciated our discussion of pillar two. Whenever treasury is representing the united states and international bodies like the oecd and others there are two principles that are important to keep in mind. First is that our actions should always respect the sovereignty of the united states, in particular the congress to establish tax policy.
▶ 2:09:04Mr. Morrissey: And second, that when proposals are made in those bodies that undermine U.S. interests that we are acting proactively to make sure we are using our seat at those bodies to stand up for american interests.
▶ 2:09:14Sen. Blackburn: Great. Mr. barloon, let me come to you. We had quite a discussion on china, and I appreciated that. I did want to ask you and get on the record, how we deal with the wto.
▶ 2:09:30Sen. Blackburn: And china is in violation, in my opinion, of so many provisions, whether it is that they are making industrial subsidies or they are stealing intellectual property. They are using forced labor. So, there are so many violations that are there.
▶ 2:09:57Sen. Blackburn: How can we better utilize the wto as we look at terrace and non-tariff barriers, trade barriers to access different markets?
▶ 2:10:07Mr. Barloon: Thank you, senator, and I very much enjoyed our discussion as well. I agree this is a significant issue. That deal with the violations that we have seen from china, that has to be action on many fronts, but certainly at the wto. Two things in particular I would focus on would be to ensure that they actually abide by their notification obligations.
▶ 2:10:34Mr. Barloon: And number two, to stop taking advantage of special and differential treatment to not play by the same rules as all of the other members. And, finally, I would work very closely with other members at the wto, like-minded members, to address these issues.
▶ 2:10:50Sen. Blackburn: Thank you.
▶ 2:10:52Chair Crapo: Senator hassan is next, but senator whitehouse would like to make a procedural -- new Sen. whitehouse: I omitted to put into the record the letter that chairman grassley and I wrote to secretary bessent regarding the interim final rule, and if I may have that added to the record, related to my questioning of Mr. morrissey.
▶ 2:11:16Chair Crapo: Without objection, so ordered. Senator hassan.
▶ 2:11:20Sen. Hassan: Good morning to all three of you. Congratulations to you and your families on your nominations, and thank you for being here today to answer our questions. I'm going to start with a question to each of you to Mr. barloon, Ms. dhillon, and Mr. morrissey. If you are directed by the president to take an action that violated the law would you follow the law? Mr. barloon?
▶ 2:11:49Mr. Barloon: I do not anticipate that there would be such a situation. And certainly I will always follow the law.
▶ 2:11:55Sen. Hassan: Ms. dhillon?
▶ 2:11:57Ms. Dhillon: I also did not expect to ever be faced with that situation, but I would follow the law.
▶ 2:12:03Sen. Hassan: And Mr. morrissey?
▶ 2:12:05Mr. Morrissey: My responsibility is to follow the law, and that is what the president expected of the legal division when I served in his first administration and that is what I am committed to if I am confirmed.
▶ 2:12:16Sen. Hassan: Thank you for that commitment to follow the law. Given the events of the last several months your expectations may be too high, but we will leave it at that. Mr. morrissey, I want to follow up on some of the questions that senator whitehouse was asking.
▶ 2:12:33Sen. Hassan: Senator whitehouse asked you whether you were clear on what 26 usc section 7217 says about taxpayer privacy, among other things. But I want to make it clear to the american people what that section requires. So, would it be legal for the president to order irs employees to audit a particular person or particular small business?
▶ 2:13:01Sen. Hassan: For example, a new hampshire small business owner who said something the president didn't like?
▶ 2:13:09Mr. Morrissey: In any enforcement context, it is shortened that the only considerations of the facts and evidence with respect to the taxpayer, and not any political considerations.
▶ 2:13:25Senator: I'm going to stop you right there. Federal law is clear, it is illegal for the president to order an audit, isn't it?
▶ 2:13:33Mr. Morrissey: On all of these questions I'm committed to following the law.
▶ 2:13:40Senator Hassan: If they attempted to direct the irs against a small business, would you advise the secretary to not comply and advise treasury secretary's two reported to the inspector general?
▶ 2:13:54Mr. Morrissey: Anytime there is an enforcement question or when the department is considering enforcing federal law against a taxpayer, my advice is going to be that the only considerations that matter --
▶ 2:14:04Sen. Hassan: I understand that, but that is my question. The law is clear, I have a copy of 26 usc 72 17 eight I asked for unanimous consent that he entered. The law is clear. It is illegal for the president or cabinet members to order an audit. There are exceptions if they are just a pass-through area president cannot do it.
▶ 2:14:30Sen. Hassan: If a treasury employee is asked by the president or cabinet secretary to do it, they are required by the law to report it. So, are you going to enforce those provisions of the law? And advise the employee she said that is their obligation?
▶ 2:14:45Sen. Hassan: Yes, I'm committed to enforcing the law and complying.
▶ 2:15:09Sen. Hassan: Ordering an audit because they don't like that person or they don't like that person's politics? I want to know if you are willing to hold the president accountable to the law.
▶ 2:15:21Mr. Morrissey: I agree. The president has spoken forcefully about taking politics out of law enforcement. If I am advising anyone at the treasury department where the irs, that's the principle I'm focused on.
▶ 2:15:34Sen. Hassan: I will disagree with you that it is a principle the president is following. We are seeing one piece of evidence after the next that he is not following that principle and is in fact politicizing law enforcement and the rule of law in this country. Now, let me go on.
▶ 2:15:54Sen. Hassan: I will say one other thing, I agree with senator whitehouse about the importance of treasury ramping up sanction enforcement working with us sure that criminal entities, as they get more and more creative, that we keep up with them in terms of our sanctioning tools and enforcement, because a lot of people are getting very wealthy from this illicit economy and it's a real danger to this country.
▶ 2:16:25Sen. Hassan: My third question for the record, sorry I didn't get to it . [inaudible]
▶ 2:16:36Senator: Thank you, Mr. chairman. Congratulations to the nominees, welcome to your family members. Let me start with you, Mr. morrissey. 2013 he wrote an article about creating effective corporate compliance and ethics programs. You stated that individuals with substantial authority in the company cannot have a propensity to act criminally and unethically. Is that true?
▶ 2:17:02Mr. Morrissey: In a while, but it sounds familiar.
▶ 2:17:05Sen. Cortez Masto: Do you think that principle should apply to government agencies and in the public sector as well?
▶ 2:17:12Mr. Morrissey: Yes, tone from the top matters. That's often been a principal in corporate compliance. I think that commitment to the rule of law is important.
▶ 2:17:22Sen. Cortez Masto: Thank you. Do you think that taking money for promoting a fake tax shelter is unethical?
▶ 2:17:30Mr. Morrissey: I think it is important for anyone to comply with all applicable tax laws.
▶ 2:17:35Sen. Cortez Masto: Thank you. Let me jump back to you, Ms. dhillon, talking about pension risk transfers and how you plan to approach them. As you well know, it is a process in which companies offload pension obligations to third parties, typically insurance companies. There have been a few lawsuits filed by plan participants over this matter because of concerns over more risk for retirees.
▶ 2:18:04Sen. Cortez Masto: In the past, it is my understanding that the pbgc has taken a hands-off approach on this issue. So, if confirmed, would you change any pbgc policy related to those pension risk transfers? Do you have any views on reporting the oversight requirements of these contracts?
▶ 2:18:24Ms. Dhillon: Thank you for that question. The pbgc does not have the authority to stop these transfers or call standard terminations. The pbgc does audit a certain number of them. If there are errors in the calculations they pursue recovery on behalf of the beneficiary of those pension plans.
▶ 2:18:49Ms. Dhillon: Your question raises the broader issue of why it is that sponsors of single-employer employer plans are employing pension risk transfer techniques. I think there are a number of reasons. One of those reasons, I think, is the size of the premiums employers are paying on fully funded plans and where they make economic decisions to transfer these exposures to insurance companies something of the like.
▶ 2:19:19Ms. Dhillon: When that happens, the pbgc no longer receives the premium on behalf of those participants. It also no longer has that liability on its books. But it is a phenomenon that you have identified that we are seeing growing in the defined pension space.
▶ 2:19:37Sen. Cortez Masto: Because it is growing, do you see concerns in the future? Or is it something that you would look at through auditing purposes if you were to address a higher risk concern?
▶ 2:19:49Ms. Dhillon: As I indicated, the pbgc cannot stop these transfers. However, part of their purpose is defined by arisa to promote defined benefit pension plans. So, the fact that plans are being transferred to insurance companies in the like is of concern.
▶ 2:20:14Ms. Dhillon: Again, there are a lot of reasons for it and one of the reasons that their pension advocate identified was the size of the premiums employers were paying.
▶ 2:20:22Sen. Cortez Masto: Thank you, thank you. Mr. barloon, last week the court of international trade and a second federal court ruled that president trump's I.e. Put tariffs were illegal. The government appealed this decision of the federal court of appeals for the federal circuit.
▶ 2:20:41Sen. Cortez Masto: If this decision is up -- impelled, trump would be legally obligated to remove his global blanket tariffs, including those imposed on allies and partners with whom he signed trade agreements in his first term. If the decision is upheld on appeal, do you commit to following the rule of law and supporting the removal of these iepa tariffs?
▶ 2:21:04Mr. Barloon: Thank you for the question. I believe that the president did have the authority to take the action that he took, but as you said, courts have ruled differently and those decisions have been stayed. There is an appeal and I think we need to wait and see what the courts do and follow the, Sen.
▶ 2:21:25Cortez Masto: Follow those decisions.
▶ 2:21:26Sen. Cortez Masto: You would follow the ultimate decisions of the courts?
▶ 2:21:29Mr. Barloon: Yes.
▶ 2:21:30Sen. Cortez Masto: Thank you. Mr. chairman?
▶ 2:21:33Chair Crapo: Thank you. It's your turn, if you want. Quick solo.
▶ 2:21:38Chair Crapo: You are allowed -- >> hello.
▶ 2:21:41Chair Crapo: You are allowed. Senator cantwell?
▶ 2:21:47Senator Cantwell: I wanted to, as our ambassador to geneva, thank you, Mr. barloon, congratulations on your nomination. Do you believe in rules-based trade?
▶ 2:22:02Mr. Barloon: Thank you for that question. Yes, I believe that it is important to have rules of the road for trading partners and to ensure that the rules are followed.
▶ 2:22:16Sen. Cantwell: Do you think that the white house has been following a rules-based trade regime?
▶ 2:22:21Mr. Barloon: I believe the white house has taken actions that are appropriate to deal with the situation that we have and yes, I believe those actions have been.
▶ 2:22:32Sen. Cantwell: I don't think I have been following a rules-based system. They seem to have been throwing everything at the wall to see what sticks and one of the reasons that "the wall street journal" has been so one note on this is that we are losing shelf space, so acting imperialistic and saying I'm going to throw a bunch of things out there because I want to on tariffs and having the courts reverse them, and now being challenged is not
▶ 2:23:02Sen. Cantwell: Rules-based trade. Rules-based trade would be knowing what the law actually says, using it appropriately, and it having an effect. Me, personally, coming from a trade based economy, I just ran into more constituents who are like you are making the financing of everything more expensive, especially medical. I was like well, we just had a hearing on this in that's what we heard, that we are making things more expensive. Personally I think we should be building alliances.
▶ 2:23:32Sen. Cantwell: I'm trying to understand, this is not a rules-based approach. This is not what the administration is pursuing. It is pursuing chaos and an almost imperialistic I am all-powerful and can do what I want, unbound. Two courts just sit you cannot and you are not following iepa, so now the administration is saying -- ok, I'm going to find other things and to be generally that broad.
▶ 2:24:00Sen. Cantwell: The problem with that is you will continue to hurt a lot of small businesses on this path. I'm trying to understand. Do you or the president support the wto? Or do you think that we should get out?
▶ 2:24:13Mr. Barloon: Thank you for the question, senator. I believe that there are significant problems with the wto. I think it has gone astray. We have seen that, for example, with the large civil aircraft carriers -- cases where four years there were subsidies that harmed our companies that were not effectively dealt with.
▶ 2:24:34Sen. Cantwell: In that case do you think that a faster process -- I don't mean to interrupt, but I want to know your thought, how would you have fixed the example that you just gave?
▶ 2:24:46Mr. Barloon: Thank you for the question. That's a very good question. After decades of litigation, in the end as general counsel we receive the largest award in the history of the wto, in many ways it was too little, too late. I think that you need to look at the tools in the toolbox. There may be other options you have to look at as well.
▶ 2:25:13Mr. Barloon: Certainly, if I'm confirmed to be the ambassador to the wto, I will work with all of those members to make sure they follow the rules and to advance the interests of the united states.
▶ 2:25:24Sen. Cantwell: You believe in a rules-based situation even though the president is really following those rules and think that we could promote some changes to wto for faster results in resolving conflicts?
▶ 2:25:37Mr. Barloon: Thank you. I do believe that there are potential reforms at the wto and I would be happy to talk with you in your office about what that might look like. I believe that there have been significant weaknesses in problems with dispute settlement in the past, but that we should engage in good faith with other members to try to see if we can improve the system.
▶ 2:26:04Sen. Cantwell: But I don't like about the imperialistic approach, practically, is that you are not arguing about the rules. I think that in a more integrated global economy, certainly a more connected information economy, you can argue for rules.
▶ 2:26:22Sen. Cantwell: I think that right now, for example, if we, japan, israel, and a couple of other companies best countries, india, got together to say that we think these are the rules of the road for buying technology from countries that are democracies and follow the rule of law and that anybody who borrows from other countries that have government backdoors, that's a foolish thing.
▶ 2:26:47Sen. Cantwell: So, you could, there are things like the cape town accord that say that if you buy airplanes from people who meet these standards, you get a discount. We are not using our cloud, is my point. I would rather use our cloud on the rules and build alliances around the rules, implementing them at the wto, getting that upperhand in what we already have a natural advantage in.
▶ 2:27:13Sen. Cantwell: But right now, we are throwing everything at the wall to see what sticks, the courts are turning it down, and in the meantime businesses are getting hurt. It's all problematic in the real issue is we are losing shelf space. When you lose show space, when the growers come back to get the product on, let we heard from the soybean people, they can't. I would love to talk further with you about this.
▶ 2:27:43Sen. Cantwell: I don't think it should take 10 or 15 years to get a wto decision on unfair airbus subsidization and payment of that resolved. I don't think it should take 10 or 12 or however many years it took.
▶ 2:28:04Sen. Cantwell: I think, leaning into that, which will be your day job, and being proud that the united states has these economic rules, I think that is a better way to go. Thank you, Mr. chairman.
▶ 2:28:15Chair Crapo: Senator warren?
▶ 2:28:19Senator Warren: Donald trump ran for president on the promise to lower costs. A promise that he abandoned almost as soon as he got elected. He also promised his "rich as hell" donors that he would deliver big tax breaks.
▶ 2:28:37Senator Warren: Right now senate republicans are working overtime to pass billionaire tax giveaways partly paid for by kicking 14 million people off of their health care and partly paid for by using magic math to pretend that those tax giveaways don't costs as much as they actually costs. Now, we have seen this play before.
▶ 2:28:59Senator Warren: 2017, the first tax giveaway to the wealthy by trump was supposed to costs just $1.5 trillion. That was after a bunch of budget gimmicks to keep the total down. Even that wasn't a big enough giveaway.
▶ 2:29:19Senator Warren: After it was past the treasury department under trump drafted regulations to implement the new law in corporations sent armies of lobbyists in to write even more loopholes into those tax laws. Mr. morrissey, you were deputy general counsel of treasury at this time, so you may remember that lobbyists from foreign banks like credit suisse and barklay's with the winners a big, new, international tax loopholes that they made to U.S.
▶ 2:29:49Senator Warren: Subsidiaries. Do you know how much those big banks pocketed from that extra giveaway engineered by the treasury department?
▶ 2:29:59Mr. Morrissey: I'm familiar with many of those regulations. But not that one.
▶ 2:30:04Sen. Warren: Not that one? I will tell you, it was $50 billion, according to the joint committee on taxation. Today, president trump and congressional republicans are working to pass a new set of tax cuts for billionaires, millionaires, and giant corporations. This one, the price tag is around $4 trillion.
▶ 2:30:31Sen. Warren: This time they are planning to pay for it in part by slashing medicaid and the affordable care act by nearly one trillion dollars, kicking 14 million americans off of their health care. It is hand out time for billionaires and austerity for everyone else. Mr.
▶ 2:30:50Sen. Warren: Morrissey, you are nominated to be general counsel at treasury, meaning that you would help in the drafting and implementation of this bill, if it passed, maybe adding another $15 billion a tax loophole there and another $50 billion tax loophole there. Mr. morrissey, I want to make sure that you think through what this means.
▶ 2:31:14Sen. Warren: Do you know how many people would have to lose their medicaid coverage just to pay for one of those $50 billion tax loopholes out of a $4 trillion trump tax giveaway?
▶ 2:31:28Mr. Morrissey: If I were to be confirmed, I would be committed to making sure that folks working in treasury on tax issues are cleared that the policy judgments in the space belong to the congress.
▶ 2:31:41Sen. Warren: That's not the question I'm asking. I know you want to duck this one. When you create a $50 billion tax giveaway, do you know how many americans lose medicaid coverage to make up $50 billion? Do you know what those numbers are? These are just numbers.
▶ 2:32:02Sen. Warren: The policy judgment
▶ 2:32:05Is -- Mr. Morrissey: The policy judgment is with the congress.
▶ 2:32:08Sen. Warren: It's not a policy question I'm asking. If you are at the treasury department and talking about being in a position where you could create a $50 billion loophole, I know you could do that, you've done it in the past, when you have done the pluses and minuses of doing this that you have some idea of how many americans will lose their medicaid coverage in order to make up for a $50 billion loophole.
▶ 2:32:33Sen. Warren: Do you have any idea how many people have to lose medicaid coverage to create $50 billion?
▶ 2:32:40Mr. Barloon: Whatever judgments --
▶ 2:32:43Sen. Warren: 10? A thousand? Any idea with the number is? Do you not have any idea what that number is? Or do you just not want to say it?
▶ 2:32:55Mr. Morrissey: My role would be on the legal side. The policy judgments.
▶ 2:32:59Sen. Warren: I will take that as you just don't want to have to admit it. It's 700,000 people to make up for a $50 billion loophole. It's like cutting off every single medicaid recipient in the state of nevada just to fund another loophole like the ones you managed to do last time around when you gave foreign banks this special loophole. That's what this bill is all about.
▶ 2:33:29Sen. Warren: Taking from struggling families to give handouts to billionaires and big corporations. According to independent experts, the big beautiful trump bill will take money away from the bottom 40% of families and turn around and shovel nearly $400,000 to everyone who is in the top .1%.
▶ 2:33:54Sen. Warren: Finishing this up, at a time when families are struggling with higher costs under trump, do you really think that his big, beautiful bill should take away money from working-class americans?
▶ 2:34:07Mr. Morrissey: I think the tax legislation of 2017 raised living standards and help americans across the spectrum and of congress decides to take action I am committed to working with treasury to implement that.
▶ 2:34:20Sen. Warren: I got to say, tax cuts for the wealthiest, $50 billion loophole here, another one there, so what if hundreds of thousands of people lose their medicaid and access to health care? That is what this bill is all about and I think it's obscene. Thank you.
▶ 2:34:42Chair Crapo: Thank you. Senator wyden has stepped away to vote, he should be back momentarily and wanted to ask a couple of more questions. Until he returns, I will ask another couple of questions. The first one, Mr. barloon: the first one, Mr. barloon, is for you. Back to the U.S. trw po reform. The five-year report indicates a poor record with elusive prospects for reform.
▶ 2:35:12Chair Crapo: So, this is certainly outside the control of the united states, but some of that inability is a result of the prior administration's inability of an enacted agenda for reform and refusal to talk partners what it wanted. Ustr also relied on consultants only focus on interest-based negotiations. Whatever that meant. How would you encourage progress on wto reform?
▶ 2:35:42Mr. Barloon: Thank you for the question. In the past the U.S. has been a leader in the wto, certainly a leader in its foundation and if confirmed, I will do my best to work with other members there and take a leading role for the U.S. and bring about much needed reform.
▶ 2:36:03Chair Crapo: Thank you very much. Ms. dhillon, in contrast to the multiemployer system, pbgc with a single employer insurance fund is healthy. According to their latest annual performance report, the single employer funded was in a positive net position of 54 billion dollars at the end of fiscal year 2024.
▶ 2:36:29Chair Crapo: Given the overall positive financial position, what lessons or structural differences in the single-employer pension system should congress consider applying to the multiemployer system?
▶ 2:36:42Ms. Dhillon: Thank you for the question, I think it is an important one and from a historical perspective it's interesting, when arisa was passed, the expectation was that single-employer plans would be more risky than multiemployer plans, because those would have multiple employers funding them. So, they were structured very differently. You don't have the variable premiums, premiums are lower.
▶ 2:37:11Ms. Dhillon: There is less restrictions as opposed to the single-employer plans. Now as we look here today to your point, the single-employer plan program at the pbgc is running a significant surplus, where is the multiemployer plan program, we have plans in distress. The most severely financially distressed plans have been addressed to the sfa, but we still have, we still have plans that are distressed.
▶ 2:37:42Ms. Dhillon: I think that congress has done a lot of work here, the senate did a lot of work here, the joint select committee I think had some very good ideas for ways to address these structural issues. If I'm confirmed I would look forward to working with the committee and congress to examine those, those, those proposed solutions to potentially apply to the multiemployer program.
▶ 2:38:05Chair Crapo: Well, thank you very much. Mr. morrissey, I don't really have another question for you, but as we wait I thought I would respond to some of the things said and get your opinion on this. I know that you are not in the policymaking zone right now. We are. Some of the things that were said about the tax bill probably need to be set straight.
▶ 2:38:30Chair Crapo: The bill has gotten a score, and alleges a score of $4.3 trillion, meaning it's going to increase the deficit by $4.3 trillion. The way that happens is it's going to cause a $4.3 trillion tax increase on people if we don't extend the current tax law.
▶ 2:38:49Chair Crapo: We are having this big battle over current policy and so forth , but of that $4.3 trillion tax increase that is going to happen if we don't act, 2.6 trillion of it is tax increase on people making less than $400,000 per year. It's actually less than 200,000 because that 400 number is for a married couple. Not 1.7 trillion of it is small business of it is pastor organizations.
▶ 2:39:24Chair Crapo: Another sizable amount is for tax credits to business for research and development, loans and appreciation. Which generates super investment in the U.S. in terms of capital. We ought to understand what we are talking about when we hear these kinds of allegations. With that, senator wyden has arrived. We were looking forward to your next questions, senator.
▶ 2:39:50Sen. Wyden: Thank you,. Thank you for your courtesy. Mr. barloon, do you agree that trade agreements have to be approved and implemented by the congress? That's the way we try to proceed during the biden administration. I'm going to be working with all of my colleagues on both sides of the aisle to deal with it. What is your position on that question?
▶ 2:40:13Mr. Barloon: Thank you. I believe it depends on the scope and breadth of the agreement.
▶ 2:40:21Sen. Wyden: So, you are not taking a position, but on the basic proposition to this yes or no question, is it important that these agreements are approved and implemented by congress? That's the way it was done with president biden.
▶ 2:40:42Mr. Barloon: First of all, I think it's very important for ustr to consult with and work with you and members as with you and members a of this committee. I pledge to do that.
▶ 2:40:56Sen. Wyden: Let the record note that you are not willing when asked to say that as a policy proposition that you support what was done with the predecessor to donald trump. Let me ask you about one other matter with respect to your work. You advised last year a foreign company owned by the government of singapore.
▶ 2:41:21Sen. Wyden: When the committee staff followed up about this, you said that you advised them on potential trade policy agreements. But this wasn't disclosed. What's going on here?
▶ 2:41:34Mr. Barloon: Thank you. Certainly, I wholly and accurately respond to all questions. I believe the language there was potential developments. I have never directly represented, aided, or advised any foreign entity in any trade agreement or trade dispute with the united states.
▶ 2:41:56Sen. Wyden: So, just last year a company fully owned by a foreign government hating you to advise them on international trade, and you didn't think that this was something that the committee ought to know about? In my view, that is troubling. One last point. Mr.
▶ 2:42:17Sen. Wyden: Morrissey, as someone who is a lawyer in name only, my wife agreed to marry me and said you handled the panther league laid folks, you are not a real lawyer. You are a very good lawyer. But I'm concerned that the responses that you gave to my questions and some of my colleagues don't indicate that you are walking into a five-alarm fire at the treasury building.
▶ 2:42:50Sen. Wyden: We have to make sure that yes, we follow the rule of law, but that also we here are two basic approaches to protect public safety. With respect to privacy in this question of following laws that could have implications for terrorism, I felt that those were not adequately addressed today. And you can count on the fact that if you are confirmed, you and I have conversations about this.
▶ 2:43:19Sen. Wyden: I am going to watchdog us every step of the way. These issues around privacy and the other matters we talked about here go to the heart of what the rule of law is all about. You have confirmed that you are going to be in a very important position to make sure that is secure. Senator crapo, thank you again for the courtesy of letting me go vote and yield back. I didn't want to clear up --
▶ 2:43:46Chair Crapo: I did want to clear up one of those points. With regards to what you disclosed about representations, did you ever advise or even discuss it any foreign entity and ongoing trade negotiations were dispute with the united states?
▶ 2:44:01Mr. Barloon: I did not.
▶ 2:44:03Chair Crapo: Thank you. I believe that is -- we don't have any others coming, right? We've got another vote going, I doubt another senator will show up. Senator wyden and I are done with her questions. I want to thank our nominees for appearing before us today.
▶ 2:44:26Chair Crapo: I believe that you are each clearly qualified to serve in the respective positions to which you have been nominated and I look forward to voting for each of your nominations and I urge all of my colleagues to do the same. With that, I remind my colleagues that the deadline for submitting questions for the record is 5 p.m. On friday, june 6. With that, the hearing is concluded. We stand adjourned.