▶ 0:17:35>> the committee will come to order. I would like to thank you, secretary bessent, for appearing before the committee today to discuss the president's fiscal year 2027 budget for the treasury department and the president's broader economic agenda. A central part of that economic agenda is driven by the landmark bill enacted by republicans last year.
▶ 0:18:02The working families tax cuts act not only provided historic tax relief for americans but also made permanent critical progrowth tax policies that are already increasing domestic investment and boosting economic growth.
▶ 0:18:18The magnitude of this success today was made possible by the work of the treasury department and the irs in publishing immediate guidance on the new and restored tax policies in the lead up to the 2026 filing season. I appreciate all the hard work from treasury and the irs and their employees to release an initial guidance as quickly as they did.
▶ 0:18:42Doing so provided rules of the road for tens of millions of people, claiming at least one republicans' signature new tax cuts, from no tax on tips and over time to nude tax relief for our seniors. Contrary to the democrat narrative that the law only benefits the wealthy, these policies were claimed by over 60 million american working class citizens. Nearly half of all filers.
▶ 0:19:11At the end of the tax filing season over 7.5 million workers claimed the tips deduction. More than 29 million workers benefited from the no tax on overtime, and more than 35 million seniors' tax burdens were reduced, with an average additional deduction of over $7,500.
▶ 0:19:35Additionally, over 5.5 million children have already been signed up for the trump accounts, in large part due to treasury's work to implement and promote the program. These savings accounts offer an important opportunity for young idahoans and children across the country to begin building financial security. Hard-working americans cap tomorrow their money this tax filing season and millions of people got more money back compared to previous years.
▶ 0:20:06Over 320 billion dollars was refunded to taxpayers. An 18% increase from the last filing season. I note that again. An 18% increase from the last filing season. With an average refund of nearly $3300, more than an 11-percent increase on average. Even the average refund amount does not tell the whole story.
▶ 0:20:33Many working-class americans were owed money one filing in prior years instead received a refund this year. Because of the working families tax cuts. Treasury's initial guidance has also helped the business provisions of the working families tax cuts, like full expensing for equipment and factories, to drive domestic investment higher, productivity higher, and wages higher for american workers.
▶ 0:21:03Nearly 26 million small businesses now have an increased confidence, thanks to a permanent pro-growth 20% tax deduction. Estimates find that permanence will create one point 2 million jobs annually and boost small-business gdp by $750 billion over the next decade. The permanent restoration of full expensing for U.S.
▶ 0:21:30Research and development will support domestic innovation and growth by large and small businesses alike. To maximize that growth taxpayers need additional clarity from treasury and the irs so that they can plan and invest with certainty. Issuing final guidance for these tax provisions will provide that certainty and further encourage domestic investment.
▶ 0:22:01Implementing the new provisions from the working families tax cuts was no small task. But the 2026 filing season proceeded smoothly for tens of millions of americans. I look forward to hearing from you about plans for successful filing season's next year, as well as more work that needs to be done to implement the law and technological investments -- get technological investments made to more modernize the irs.
▶ 0:22:31Regarding irs modernization, ranking member wyden and I released the taxpayer assistance and service act earlier this year. This bipartisan bill, with more than 60 provisions in support across the tax community is focused on modernizing the irs, improving the taxpayer experience, and strengthening taxpayer rights.
▶ 0:22:56Any finance committee member priorities are included in the bill, along with a series of long-requested provisions from the tax professionals, as well as the national taxpayer advocate. I look forward to advancing this legislation in the very near future and welcome any comments from you on it. Beyond tax administration I'm hopeful for a similar support as we move forward with other priorities with the bipartisan foundation in this committee.
▶ 0:23:23Such as establishing clear and durable tax rules for digital assets. Mr. secretary, we are very glad to have you with us today and look forward to your remarks. With that, I turned to the ranking member for his opening statement.
▶ 0:23:37Sen. Wyden: Thank you very much, Mr. chairman. There is lots to work on. Colleagues, it was just a matter of time before the trump administration set a new high water mark for public corruption. That moment arrived a little more than two weeks ago with the settlement of trump's ridiculous irs lawsuit. This hearing is the first opportunity for congress to examine it.
▶ 0:24:02Sen. Wyden: Let's start by zooming out to get a full appreciation of how dirty this whole situation has been. Donald trump sued his own administration for $10 billion over a tax return leak that happened on his watch. A judge appeared ready to toss the lawsuit, so trump rushed a settlement for personal gain.
▶ 0:24:28Sen. Wyden: The acting attorney general went out yesterday and said they are not moving forward with the 1.8 billion dollars slush fund. The other part of the settlement apparently remains in place, and that is the part that presents the biggest direct benefit to trump. Todd blanche let trump off the hook for potentially 100 million dollars in back taxes by canceling what is reported to be a long-running dispute with the irs.
▶ 0:24:55Sen. Wyden: Then he let the entire trump family and the trump organization off the hook for any tax crimes they may have committed in the past. As of right now everybody in america is subject to audit, except the trump family. Unfortunately, the senate republican leader was quoted this morning saying this was business as usual.
▶ 0:25:23Sen. Wyden: That it is a standard settlement payment the reality is, that is totally wrong. Two former irs commissioner's have now confirmed that this is completely without precedent. It is the ultimate case of an ultra-wealthy individual living under one set of rules while everybody else lives under another. A wicked standard that benefits trump and family.
▶ 0:25:51Sen. Wyden: I take it as an admission of his own guilt when it comes to tax cheating. Trump and his family have been stuffing every dollar they can grab into their own pockets. If everything was on the level it seems to me you would not need todd blanche to get the irs off of his back. Secretary bessent owes the committee an explanation of what the treasury knows about the dirty settlement. That is because his department was involved from beginning to end.
▶ 0:26:22Sen. Wyden: Treasury was a defendant and a negotiator in the lawsuit. It was informed by irs attorneys that trump had no real case. It sure looks to me like treasury's top lawyer quit his job in objection to the settlement. This is an abuse of the irs that goes way beyond anything that I have any familiarity with. My view is, this committee needs to investigate this on a bipartisan basis.
▶ 0:26:52Sen. Wyden: Blanche allegedly dropped the insurrection fund. Doesn't change that. What is particularly shocking about a corrupt deal like this is it comes when so many american families are fearful about the economy. I was home last week, having four town hall meetings in parts of my state that our bright red, and what they talked to me about was the pain of inflation going up, wage growth going down, the job market flattening.
▶ 0:27:23Sen. Wyden: The trump administration doesn't seem to care. Last week secretary bessent was asked during an interview about price increases caused by the iran war. He said -- I quote -- "it was less than $200 in extra gasoline costs.
▶ 0:27:40Sen. Wyden: All democrats want to talk about his beef and gasoline." you might think that a political leader could not get anymore dismissive of people's economic concerns, but then donald trump topped it himself when asked if americans' financial situations made him think about ending the war he started. He said, "not even a little bit ago he continued, "I don't think about americans' financial situation.
▶ 0:28:10Sen. Wyden: I don't think about anybody or co. -- anybody." I have never heard the president of the united states talk in such a dismissive way about the hurt of the american people. Then he rambled through his ever-changing goals in this quagmire of a war. And all from the president. Americans are increasingly spending down their savings and getting into debt to get by.
▶ 0:28:37Sen. Wyden: People running the country are ratcheting up the cost of living with wars, tariffs, and cuts to health care basic services. It is cold comfort to somebody who had to max out their tax credit card to feed their kids that trump might get his face on a $250 till -- bill. But that is the priority that apparently the treasury department is focusing on these days.
▶ 0:29:02Sen. Wyden: Even outside of economic matters the treasury secretary is simply out of step with the american people. There is no better example than the fact there has been a cover-up of the massive file of epstein's financial records for a year and a half. This is part of the effort I have made -- it is the only one to follow the money in the epstein situation, yet there has been a denial of access to investigators and lying in public about their significance. That subject alone deserves its own hearing.
▶ 0:29:35Sen. Wyden: Senate investigators are trying to figure out who paid epstein for girls, and unfortunately, secretary bessent, is involved in preventing that from happening. The bottom line in this administration is, the machinery of government works to the benefit of donald trump before all else.
▶ 0:29:56Sen. Wyden: That is the corrupt framework that produces insurrection slush funds, protects pedophiles, and dismisses the concerns of people who are worried about being able to make rent and feed their families. There is an awful lot for the committee to discuss today. I look forward to question and answers. Senator crapo.
▶ 0:30:16Chair Crapo: Thank you, senator wyden. Secretary bessent, you may make your opening statement.
▶ 0:30:23Sec. Bessent: Chairman crapo, ranking member wyden, and members of the committee, thank you for convening today's hearing. I'm grateful for this opportunity to discuss president trump's 2027 budget, which builds on this administration's progress in unleashing a new era of --
▶ 0:30:41Chair Crapo: Could you pull the microphone a little closer?
▶ 0:30:44Sec. Bessent: At last appeared before this committee just a few weeks before the senate passed the working families tax cuts. On the heels of the most successful filing season in irs history I would be remiss if I did not begin by thanking the committee for helping to deliver this once in a generation bill to the president's desk. This day, under president trump, we celebrated how much more money hard-working americans cap.
▶ 0:31:11Sec. Bessent: Not how much the government took. Over 62 million tax returns claimed at least one of the president's signature new tax cuts. No tax on tips, no tax on overtime, deductibility of american car loan interest, and enhanced deduction for low and middle income seniors. The average refund and increased by over 11%, with refunds increasing by 18%. But as important as what this administration achieved is what prevented.
▶ 0:31:41Sec. Bessent: Opponents had their way our economy would have absorbed the largest tax hike in its history. Over $5 trillion. 90% of american taxpayers would have seen their standard deduction slashed, instead this committee held the line and the american people had a better tax day because of it.
▶ 0:32:08Sec. Bessent: Notably, president trump's pro-growth policies do not stop at putting more money back in the pockets of working and middle-class families. The extend to placing the american dream within the closer reach of their children. For context, nearly 40% of americans have no exposure to our great U.S. equity market. No stake in the companies they helped to build. Trump accounts represent a profound reimagining of that arrangement.
▶ 0:32:36Sec. Bessent: They want to ensure that every american child can benefit from private ownership and compound growth. That every american child is born a shareholder. Today to nearly 6 million trump accounts have been opened, with 1.4 million eligible for the $1000-seed contribution. Of course, tax cuts deliver relief for working-class americans. President trump's economic agenda is bolstered by two distinct but reinforcing levers. Trade and deregulation. Me briefly address both intern.
▶ 0:33:08Sec. Bessent: First, the president is undeterred in his determination to open markets for U.S. goods and services while rebuilding U.S. manufacturing capacity. Over the 12 months ending march 26 the trade deficit for goods declined by approximately 370 billion dollars compared to the same time ending march 2025. The economy has added 313,000 net private sector jobs and 13,000 manufacturing jobs in the past two months.
▶ 0:33:40Sec. Bessent: From capital expenditures rose at an annual rate of over 17% in the first quarter and companies are investing trillions to build and expand here at home. American industry is winning again, to the benefit of american workers. The whole of government approach, meanwhile, is coupling our manufacturing revival with a great regulatory reset. Properly-calibrated regulation is essential for economic growth, capital formation, implement, and higher wages.
▶ 0:34:07Sec. Bessent: At the outset of this administration president trump set the ambitious benchmark of the slashing 10 existing regulations before issuing a single new one. In 2025 we shattered the goal with a ratio of 129-1. As a result the regulatory actions generated more savings last year than those of the prior trump administration combined. Separately, any one of our initiatives on trade, tax cuts, and deregulation would be substantial. Taken together, they are transformative.
▶ 0:34:39Sec. Bessent: For president trump took office our trading partners exploded america's markets, a regulatory state's smothered businesses, and our tax was poised to punish taxpayers. Today his policies are driving bigger paychecks and broader prosperity. I thank you on this committee for its partnership in this critical work and I look forward to building upon our stride through the presidents budget.
▶ 0:35:04Sec. Bessent: Thank you, and I had hoped to keep this -- in terms of the economy. Senator wyden has mendacious lease land of the treasury building, in an attempt to cover up his son having an investment meeting with jeffrey epstein. To ask for funding. Thank you.
▶ 0:35:28Sen. Wyden: Mr. chairman?
▶ 0:35:30Chair Crapo: Yes.
▶ 0:35:32Sen. Wyden: Let's be clear here. Nobody is interested in the ramblings of a capo in the most corrupt regime in history. You want to get facts. That is what we are here for.
▶ 0:35:47Chair Crapo: Thank you, and I will ask my questions first today.
▶ 0:35:50Sec. Bessent: We would like to hear what adam wyden and jeffrey epstein talked about. Your s' -- son's investment position was rick' is cabaret. Did your son and jeffrey epstein talk about pole dancing as he begged for money using your limited credibility? >> should I just proceed?
▶ 0:36:11Chair Crapo: I'm going to proceed with my questions, and, Mr. secretary, I'm going to start with regard to the issues that senator wyden raised. There have been a lot of accusations about the settlement agreement between the president and the irs over the leak of his tax returns. On monday the department of justice announced it would abide by the district court's ruling in joining the creation or operation of the anti-weaponization fund.
▶ 0:36:42Chair Crapo: That was established under the settlement agreement. Yesterday acting attorney general todd blanche announced at a hearing that we are not moving forward with the fund, period. With respect to other parts of the settlement agreement I would like to give you the opportunity to set the record straight. Understanding that there is ongoing litigation, what can you share with us about treasury and the irs' role in the settlement agreement?
▶ 0:37:12Chair Crapo: Specifically, since ceo frank busy nonno signed the settlement agreement, what can you share with us about his role in reaching that agreement?
▶ 0:37:20Sec. Bessent: Thank you for the question, Mr. chairman. As we have done throughout this matter the department of treasury is following the direction of the department of justice, and as you noted acting attorney general todd blanche testified yesterday that the government will not be moving forward with the fund. We intend to comply with that direction. I do not have any additional details into what that means at this time.
▶ 0:37:46Sec. Bessent: But I will note that even with the acting attorney general blanche's estate and yesterday this matter is still subject to litigation, so I am unable to comment further on it. As with all department litigation the treasury department and the irs were represented by the justice department. So, any questions about the settlement or fund should be addressed to the justice department and acting attorney general todd blanche. Thank you, senator.
▶ 0:38:14Chair Crapo: Ride, thank you. With regard to the working families tax cuts, affordability remains top of mind for families across this country. Last summer republicans acted to prevent what would have been the largest tax increase in american history. And delivered pro-growth tax relief through the working families tax cuts, providing much-needed support to american workers and families.
▶ 0:38:40Chair Crapo: Can you talk about treasury's work so far to implement this groundbreaking tax relief and what parts of the law do you view as most helpful in addressing affordability issues?
▶ 0:38:51Sec. Bessent: Thank you, senator. Since the working families tax cut was passed in record time on july 4, I would describe the benefits as a barbell. On one side we have seen for american business an immediate -- the immediate expensing of capital goods and factories, which led to more jobs and construction jobs.
▶ 0:39:19Sec. Bessent: On the other side we have seen the president's signature policies -- no tax on tips, no tax on overtime, reduced taxes on social security, and deductibility of american-made cars, on the loans for those -- 99% of the filers claiming any of those four deductions had incomes under $200,000. 90% had incomes under $100,000.
▶ 0:39:41Sec. Bessent: We saw record tax refunds and we are not able to measure the delta in the refund because we can only calibrate someone who had gotten a refund the year before. So, we cannot calibrate of someone had paid in.
▶ 0:40:00Sec. Bessent: As I have traveled across the country many people said, paid a substantial amount last year, I have a large refund this year, and I think very importantly too, the certainty that our small businesses have gotten.
▶ 0:40:12Chair Crapo: Thank you. The senate finance committee is engaged in productive bipartisan discussions on digital assets. As the digital acid industry continues to grow and evolve there is an increasing need for durable, commonsense rules of the road that provide certainty for taxpayers.
▶ 0:40:37Chair Crapo: Goes treasury support congressional efforts to develop comprehensive digital asset taxation, and in your view what are the risks of continued inaction? Both in terms of taxpayer compliance and america's ability to remain competitive in the rapidly-growing economy?
▶ 0:40:53Chair Crapo: Sec. Bessent: since president trump issued his executive order treasury has been working tirelessly to implement the action on digital assets. We saw congress passed stable coin legislation, clarity act, which I would encourage everyone to get behind. It is very necessary to bring U.S.
▶ 0:41:15Chair Crapo: Best practices onshore and we worked tirelessly in terms of custody-ing these assets and making the U.S. the innovation capital of the world.
▶ 0:41:29Chair Crapo: Thank you very much. I encourage my colleagues to note when their time expires. We want to keep moving expeditiously. Senator wyden?
▶ 0:41:37Sen. Wyden: Thank you very much. Yesterday acting attorney general todd blanche indicated the administration is not moving forward with the slush fund. There has been no indication of what this means for the trump-a legend irs audit immunity. My first question is, does the irs audit immunity given to trump, his family, and his business is still stand? I would like a yes or no answer to that.
▶ 0:42:12Sen. Wyden: I've got five minutes. I'm going to use them for these questions. >> as I said, I am unable to comment -- [inaudible]
▶ 0:42:23Chair Crapo: So that we hundred -- Sen. wyden: so that we understand what is at stake here, this immunity deal is the biggest scam against the american taxpayer in history and americans are going to pay taxes and trump and his clan won't. So, we will start with that. My second question is, every president's tax return gets audited. Who originated the may 19 addendum canceling trump's audits? Was it trump, doj, or treasury?
▶ 0:42:51Sec. Bessent: As albert einstein said, doing the same thing and expecting a different answer is the definition of insanity.
▶ 0:42:58Sen. Grassley: We have given no answers on this subject and that is why I'm going to ask these questions.
▶ 0:43:03Sec. Bessent: There is ongoing litigation.
▶ 0:43:05Sen. Grassley: Does the doj have the authority to settle a tax dispute?
▶ 0:43:12Sec. Bessent: The doj serves as the attorney for the irs.
▶ 0:43:17Sen. Grassley: It can only settle a tax dispute if you first further the dispute to doj in the case we are talking about. So, here trump, his kids, all of the business entities they own, potentially thousands of tax returns, and unless you were referred every single one of those returns to doj the addendum is invalid. The treasury and the irs believe have been more involved in this scandal as far as I can tell then you have led us to believe.
▶ 0:43:47Sen. Grassley: I'm going to keep digging into the timetable here. Career irs attorneys wrote a 25-page memo preparing defenses against trump's lawsuit. They recommended doj move to have trump's lawsuit dismissed. The irs reportedly gave this memo to treasury officials in air before the settlement. Did you see that memo?
▶ 0:44:12Sec. Bessent: Again, there is continuing litigation and I'm unable to answer.
▶ 0:44:14Sen. Wyden: Will you provide this committee with a copy of the irs memo?
▶ 0:44:18Sec. Bessent: Again, there is continuing litigation.
▶ 0:44:23Sen. Wyden: Mr. chairman, I'm going to canada -- to continue my questions, but I would like to ask you now to authorize a waiver and for Mr. bessent to waive the attorney-client privilege which I guess is part of what he is up to.
▶ 0:44:36Chair Crapo: I will not -- I'm not quite sure what you're asking, but I will not agree to ask him to waive his attorney-client privilege.
▶ 0:44:45Sen. Wyden: That's the way were going to get to the bottom of it, is to have the committee look at these matters in a bipartisan way and I'm going to continue with the questions that highlight my argument. The biden administration prosecuted charles little. Bruce allen contractor who linked to trump's tax returns. Who's alan, which helped with the prosecution, held contracts with the treasury department for years. We days before trump filed his lawsuit this year your bob -- you abruptly canceled the contract.
▶ 0:45:13Sen. Wyden: It is hard to see that timing vehicle incidents. Did you know in advance that trump was going to file suit against the irs?
▶ 0:45:21Sec. Bessent: I did not.
▶ 0:45:22Sen. Wyden: All right. I have written to you twice asking for records related to this decision. Both times he refused. Will you send the khamenei all records documenting this decision so we can review this in a bipartisan fashion?
▶ 0:45:37Sec. Bessent: Again, there is ongoing litigation, and how we got here was a violation of president trump's 61 03 it wasn't just president trump. There were 400,000 tax returns that were leaked by Mr. littlejohn, and I will point out that Mr. littlejohn was not prosecuted to the fullest extent of the law. He was eligible to be prosecuted on three counts.
▶ 0:46:05Sec. Bessent: The biden administration shows a light touch and only prosecuted himself on two counts.
▶ 0:46:09Sen. Wyden: We are going to continue these questions and I come back to my point, Mr. chairman. We need you to support this 60 10 three waiver so this committee on a bipartisan basis can look into a matter like this. We are talking about the president of the united states. It doesn't get any more important. I will close my opening effort to try to ferret out the facts here, Mr.
▶ 0:46:33Sen. Wyden: Chairman, by saying the secretary, this whole settlement, in my view, is the most brazen abuse of power ever in our history. As of now every american is subject to audit except donald trump and his family. I think that is absurd, and you have been dodging questions. Each one of these you had a legal argument for saying nothing.
▶ 0:46:56Sen. Wyden: I suspect you cleared the way for trump's lawsuit when you canceled the contracts and I suspect people up to the highest levels of the treasury department had a hand in crafting this unbelievably-corrupt gift of a settlement, and I want to work with every senator on this committee to get to the bottom of this, because we are not getting facts. And, sec., in spite of the fact that he owes answers to the american people is just dodging and weaving. Thank you.
▶ 0:47:24Chair Crapo: Senator grassley.
▶ 0:47:26Sen. Grassley: I'm going to start first with a comment and accommodation to the department. In regard to a program that senator wyden and I have been involved in, and I think the department is doing the right thing, but I think you are getting pressure to change.
▶ 0:47:48Sen. Grassley: So, I want to commend you and the irs for protecting the integrity of the conservation using deduction by holding those engaged in abusive syndicated conservation easements, hold them accountable.
▶ 0:48:06Sen. Grassley: These abusive transactions generally rely on inflated appraisals that result in taxpayer investors saving two dollars in taxes for every one dollar spent. So, to be perfectly clear, these arrangements perverted a charitable deduction to turn a significant profit.
▶ 0:48:31Sen. Grassley: In 2020 finance committee report that senator wyden's and my investigation of these arrangements clearly shows that both promoters and the taxpayer investors understood them to be tax shelters.
▶ 0:48:52Sen. Grassley: So, I encourage you and the irs to stand by recent settlement offers and ignore those who I think are lobbying you to water it down.
▶ 0:49:03Sec. Bessent: Thank you for your comment, senator.
▶ 0:49:06Sen. Grassley: In 1981, at the time of growing deficits and elevated inflation, fed chairman paul volcker advised congress to cut spending and to pursue pro-growth policies. He urged congress to focus on reforms that would incentivize americans, in his words, to invest, save, and work.
▶ 0:49:35Sen. Grassley: The working families tax cut law had adhered to the volcker approach. It had reduced spending by over $1 trillion while making provisions of the 2017 tax law focused on spurring domestic investment permanent, like the expensing for new factories and factory improvements.
▶ 0:49:57Sen. Grassley: How important has the working family tax law been in terms of promoting economic growth, job creation, and wage growth?
▶ 0:50:07Sec. Bessent: Senator, it has been essential to the success we have seen. For the past four quarters the U.S. economy has grown at 2.6%, and that is despite the democrat government shutdown in the fall and that is despite the iranian conflict, which will make our country safer.
▶ 0:50:30Sec. Bessent: And what we are doing on the household side, as I said, almost 50% of the tax returns we received had one of the president's four signature policies.
▶ 0:50:44Sec. Bessent: On the other side, the pro-growth tax policy for our corporations, immediate expensing of capital equipment, of structures, including farm structures, and the hundred percent expensing for our certainty, senator, it is the certainty that allows deacons small businesses to be able to plan for the future, for hiring capital expenditures, and it is this capital stock and investment that generates high
▶ 0:51:15Sec. Bessent: Returns and increases productivity and productivity increases are what increase the real standards of living, sir.
▶ 0:51:21Sen. Grassley: This will have to be my last question. You have been a proponent of targeting annual deficits on 3% of gdp, which roughly aligns with the post-world war ii average. During the last two years the biden administration, we saw a deficit of 6.2% and 6.3%.
▶ 0:51:48Sen. Grassley: In 2025 president trump's year in office, the deficit came in at 5.8 percent of gdp. How does president trump's budget and the regulatory agenda ensure the annual deficit stays on a downward trend toward that 3% that you advocate?
▶ 0:52:05Sec. Bessent: Senator, as I said , we do not have a collection problem, we have a spending problem. And we have a growth problem. If we can constrain spending and grow our economy then we have the ability to pay down debt and get back to the 3% target which I believe we can achieve something with a three in front of it by the end of president trump's term.
▶ 0:52:35Chair Crapo: Senator warner.
▶ 0:52:39Sen. Warner: Secretary bessent, good to see you again. Yesterday the administration took an action that I thought I could no longer be surprised. But I was surprised. The president put in bill posey as the director of national intelligence.
▶ 0:53:00Sen. Warner: Now, I know it is not your area, but the whole law that was set up establishing the director of national intelligence was to make sure this position was filled by someone with a great deal of national security experience. Mr. poultry currently it is within your domain. Does Mr. paul to even have a security clearance?
▶ 0:53:22Sec. Bessent: Senator, I do not.
▶ 0:53:29Sen. Warner: Being the head of the fha j, isn't that a full-time job?
▶ 0:53:31Sec. Bessent: It is a very important position.
▶ 0:53:36Sen. Warner: If bill poultry is to remain and moonlight as the director of national intelligence -- I don't understand. To me it seems insulting to that thousands of men and women who work in the intelligence community. Again, Mr. paul t, reports to you.
▶ 0:53:58Sec. Bessent: No, it is an independent administration.
▶ 0:54:02Sen. Warner: Let me ask you this. How would you describe Mr. pou tly's temperament?
▶ 0:54:13Sec. Bessent: I spoke with him yesterday and congratulated him and said I would work with him on fha matters and wished him luck. As he gets up to speed at dni and told him we had pressing issues on iran.
▶ 0:54:29Sen. Warner: You are totally comfortable with the notion that Mr. poutly, who you have had quite a number of differences with, is going to be both director of fhfa, and director of national intelligence?
▶ 0:54:47Sec. Bessent: Many players squabble and go out on the field.
▶ 0:54:51Sen. Warner: Mr. poulty has had a record of not respecting confidential information. He has weaponize mortgage information. I think everyone would acknowledge the factual basis of that payment the idea he is going to be given the keys to the most classified secrets that keep our country safe, I just would have wished that someone in the white house would have gone to the emperor and said come on this when you got no clothes.
▶ 0:55:25Sen. Warner: It is an embarrassment. The gin take ai. -- agentic ai. As we think about ai agents I think we need a strong fiduciary regime around those agents.
▶ 0:55:55Sen. Warner: If your agent goes off and buys a bunch of retail stuff are you and you get it home and the human being says, I don't want this stuff, who bears the burden? As you think about the notion -- when we talked about agentic agents, do you believe we need some level of fiduciary regime?
▶ 0:56:16Sec. Bessent: The president's executive order yesterday strikes a good balance between innovation and safety. That is a calculus we are trying to optimize for. I have been in contact with all of the large language model labs. I was in san francisco on saturday, meeting with them. We have convened at treasury.
▶ 0:56:39Sec. Bessent: We have convened the largest banks, and they are working diligently on their standards, because by their nature they have the strongest cybersecurity departments. I think the rest of industry can learn from them.
▶ 0:56:56Sen. Warner: Again, we may agree to disagree. The notion of a voluntary regime -- fiduciary duty would imply some duty. I have talked to the bank. They think with mythos they are totally unprotected and the idea we are going to have a voluntary regime, I believe, will put our banking system at risk. Clearly our national security at risk. I felt like the president's earlier draft made a lot of sense. I was disappointed it was watered down.
▶ 0:57:27Sec. Bessent: The only difference in the draft was 90 to 30 days.
▶ 0:57:31Sen. Warner: The draft I saw earlier had a stronger than strictly voluntary. But I want to get my last point in quickly. We've still got to get the cdf I money out. We have 32 senators, 16 on each side, including the chairman. Money is sitting there. It needs to get out.
▶ 0:57:53Sec. Bessent: Yes sir. We have gotten out what we have been allocated from omb. Omb did not apportion it until april 8, and we are getting that funding out.
▶ 0:58:06Sen. Warner: It is june. It still has not awarded a single dollar of the money.
▶ 0:58:10Chair Crapo: Senator scott.
▶ 0:58:13Sen. Scott: Good to see you again.
▶ 0:58:18Sec. Bessent: Hope all is well in charleston. I don't get back much.
▶ 0:58:22Sen. Scott: Finally back to the holy city. Hope we see you more often. Let me say to you and your staff, the issue of homeownership, we worked in the banking committee on the 21st century road to housing. Your team has been fantastic to work with and this is an issue that is not a republican issue or democrat issue. Every member of the democrats out of the aisle, as well as republicans, worked to make sure we keep america's priorities first. That makes 2026 the year of affordability.
▶ 0:58:52Sen. Scott: Your team has been fed -- fantastic to work with. I want to have a question for the record around an issue of clean electricity production tax credit. An issue I would love to get a response from you later on. I do want to ask you a question, Mr. secretary. Economic security is national security. The treasury department plays a critical role in the united states' national security apparatus.
▶ 0:59:21Sen. Scott: With the emergence of digital assets I was curious if you could touch on the treasury's role in fulfilling trump's executive order that set up the bitcoin strategic reserve and digital asset stockpile. You get me an update on where things stand with the implement -- implementation of the executive order?
▶ 0:59:38Sec. Bessent: Yes, and I cannot agree with you more. I give a speech at the reagan library outline my thoughts on that and how for 25 years the U.S. has been asleep and under president trump's leadership we are moving forward very quickly on that and part of that is our digital assets initiative. The strategic bitcoin reserve is something -- this is new technology. This is new ground.
▶ 1:00:10Sec. Bessent: We are proceeding with all deliberate speed and we are making sure that as we are doing this in this complicated process that we use best practices and things will be durable for the future and look forward to working with you and your team on that and I look forward to the clarity act being passed this summer.
▶ 1:00:28Sen. Scott: Great. Thank you. Another question on ira accounts. President trump signed another executive order to increase america's access to iras, for those workers who lack employer-a sponsored retirement plan. The order directs you to prepare legislative recommendations for building upon the trump ira.gov.
▶ 1:00:54Sen. Scott: Do you have a timeline with something in mind that would be helpful for us to appreciate as it relates to a trump accounts 2.0?
▶ 1:01:04Sec. Bessent: We have the launch of trump accounts on july 4 and we are consumed with that, so it will be july 4, a saturday. They will begin trading and go live on july 6. And then we will be laser-focused on the ira accounts directly after that.
▶ 1:01:23Sen. Scott: I do think it is important for us to take some time on the finance committee to recognize issues facing the american people. Half-hour workers do not have access to -- maybe not half of our workers, but a significant portion do not have access to an ira.
▶ 1:01:41Sen. Scott: Having this focus is powerful and important and recognizes the importance of making sure everybody has a chance to accumulate equity in this country, which typically comes through homeownership or an equity position in the stock market. This approach provides access to that opportunity and, as you note, it would probably be just inappropriate and shocking if I did not mention opportunity zones. Because I do every single time I see you.
▶ 1:02:08Sen. Scott: I do think it is one of those consequential pieces of legislation that has a generational impact for the poorest communities in this country. Governors are currently working on figuring out where they want designations within their states in this window. I would love to have an update from you as it relates to streamlining the opportunity zone nomination process, as well as if there are any best practices that governors should take into consideration that you have become aware of?
▶ 1:02:39Sen. Scott: It would be great to hear.
▶ 1:02:40Sec. Bessent: Yes, senator. As a reminder, every democrat voted against opportunity zones. What was especially great about this bill is it expanded, created stronger rural opportunity zones. That is part of our guidance to the states. Treasury is engaging with state officials ahead of the next nomination around.
▶ 1:03:04Sec. Bessent: We are working to provide transition guidance so that investors will have the clarity they need to keep putting capital to work in the communities that need them the most.
▶ 1:03:13Sen. Scott: I know I have two seconds [inaudible] a bipartisan legislation. Every mayor I have run into around the country, blue or red, love opportunity zones.
▶ 1:03:31Sec. Bessent: Senator, several of your colleagues from the other side of the aisle have called me because they were distressed that their state may be losing an opportunity zone. I pointed out that they voted against them, but because of your good will will be working with them.
▶ 1:03:41Sen. Scott: God bless you.
▶ 1:03:45Chair Crapo: We all love opportunity zones. Senator hassan.
▶ 1:03:49Sen. Ossoff: On cue for holding thank you for holding this important hearing. I want to start with a question that I think should get bipartisan support. The treasury inspector general recently said that the treasury could prevent one billion dollars in fraud if congress moved up certain deadlines for businesses to file information returns.
▶ 1:04:16Sen. Ossoff: This would give treasury the information it needs earlier in the year to stop fraudsters from stealing taxpayers' identities. Will you commit to working on a bipartisan basis with members of this committee to advance this proposal and help the treasury stop identity theft and fraud?
▶ 1:04:33Sec. Bessent: We look forward to working with both sides of the aisle on that, senator.
▶ 1:04:37Sen. Hassan: Thank you. Just an observation. There has been discussion of a so-called settlement of a lawsuit between the president and the irs. I just want to note that the so-called settlement is being challenged because of collusion, it appears, by the president and the irs, the point where I'm not sure a settlement agreement exists, because a court is determining whether this is legitimate to begin with.
▶ 1:05:08Sen. Hassan: What the acting attorney general did say yesterday was that despite the slush fund being off the table -- at least for now -- grant of immunity for tax liability to the president and his family was going to be on the books. This is a sweetheart deal for the president. It apparently is still going forward, unless a court puts a stop to it, and I think it is going to be important for the secretary to level with the american people about how much this sweetheart deal will cost them.
▶ 1:05:39Sen. Hassan: Some sources suggest it is $100 million. Off the top. The president said he does not think about americans' financial situations. Do you think about the financial situation of the american people?
▶ 1:05:50Sec. Bessent: I do, and as the ranking member distorted my statement, as he often does, I prefaced my statement with, we understand that these are challenging times for the american people, that we will get over this, and at present the average household has paid about $200 more in gasoline. We think about this every day.
▶ 1:06:12Sen. Hassan: I'm glad you do, but do you think your boss should too?
▶ 1:06:16Sec. Bessent: I believe his -- remarks were taken out of context.
▶ 1:06:21Sen. Hassan: Here is what he said. He said "I don't think about americans' financial situation. I don't think about anybody." do you think about how the american people are paying more for gas, groceries, and utilities since the president clearly said he didn't? And you speak with the president regularly. You trying to tell him the truth about how much costs have increased for the american people?
▶ 1:06:46Sec. Bessent: I'm going to have to disagree with you on some of that, because I have groceries are going down, and to be clear, since president trump took office food prices, or as many people like to call them, groceries, food at home in the statistical data ends up 2.5% --
▶ 1:07:04Sen. Hassan: When is the last time you are a grocery store? The average granite stater has paid the hundred thousand -- $3000 more since donald trump took office for basic's and services. While, the country lost 100,000 manufacturing jobs in 2025. Do tell the president this information or not?
▶ 1:07:29Sec. Bessent: Except for inflation, which I believe is going to be a short-term blood, the economic data is very strong. The jobs data has been very strong. The manufacturing ism has been very strong --
▶ 1:07:42Sen. Hassan: Actually, that is incorrect.
▶ 1:07:45Sec. Bessent: Which part was incorrect, senator?
▶ 1:07:48Sen. Hassan: What is very clear to me is neither you, nor the president, nor this administration is willing to acknowledge how much more people are paying at the gas pump, the grocery store, for health care offer all aspects of american life. Nor have you acknowledged the number of factory jobs lost in 2025. Let's move onto another issue.
▶ 1:08:08Sec. Bessent: Americans are paying 2.5 percent more for groceries since president trump took office, which is half the annual amount under biden administration --
▶ 1:08:18Sen. Hassan: Were not talking about biden, were talking about this administration and its promise to lower costs and the fact this president says he doesn't care. Mr. secretary, my time is limited. I would like to reclaim a little bit of my time because I have one more question. The administration has claimed its top priority is lowering costs for american families, the president continues to pursue vanity projects at a significant cost to taxpayers.
▶ 1:08:48Sen. Hassan: He requested $1 billion for the white house ballroom, spent $45 million on military birthday parade, reposed a $100 million arch at memorial circle, and now treasury is planning production of a $250 bill with his face on a. How does the president's ballroom or all of these other vanity products lower costs for american families or help constrain spending?
▶ 1:09:11Sec. Bessent: Senator, first of all, you're incorrect. There is no cost of to the american people if there is a new bill, for the ballroom. The decorative part of the ballroom is privately-funded and everything you are talking about --
▶ 1:09:26Sen. Hassan: The president requested $1 billion for the white house ballroom in our budget. He has been already $5 million on a military birthday parade.
▶ 1:09:35Sec. Bessent: Look, it goes on outside my office every day. I have watched her progress and it is national security matters that the billion dollars or four.
▶ 1:09:45Sen. Hassan: That is ridiculous and I think you know it. Thank you, Mr. chair.
▶ 1:09:49Chair Crapo: Senator johnson.
▶ 1:09:52Sen. Jones: And Mr. secretary, I don't recall in june 2022 when the average national price of gasoline was five dollars a gallon. We were experiencing inflation above 9%. I don't recall democrats being that exercised in having these hearings and battering the biden administration officials about why living is so unaffordable. Do you recall that in 2022?
▶ 1:10:20Sec. Bessent: What I do know is that pyromaniac's like fire, so they can't stop talking about what they did. And they -- you know, as I was trying to tell the senator, since president trump came into office food at home has increased by 2.5%, moving back toward the fed's 2% level, and every year averaged 5%. So, it is half the price.
▶ 1:10:48Sec. Bessent: We elevated the level, and to be clear, senator, what we have not heard is an apology to the american people.
▶ 1:10:54Sen. Johnson: The other thing we have not heard is a concern over the massive amount of fraud that we are being told about everyday. Democrats wanted to [indiscernible] the enhanced subsidy under obama care, even though once expired people got the subsidy anyway.
▶ 1:11:14Sen. Johnson: They could care less if -- 6 million people now -- the estimate is 6 million people, or phantom people, taking advantage of those subsidies, costing treasury $35 billion a year. No concern about that from the other side of the aisle. I want to focus on fraud. The lowest estimate on an annual basis is $250 billion a year.
▶ 1:11:36Sen. Johnson: We had the ceo of lexis-nexis -- I didn't realize he did this kind of research -- they put the figure at about $1 trillion. What do you estimate? Annual amount of fraud in the federal budget?
▶ 1:11:53Sec. Bessent: At least $500 billion, sir.
▶ 1:11:57Sen. Johnson: 3.3% of our budget. A recent story -- heard it on the radio this morning -- a fraudster in california in one year from may 22 to april 2020 3, 200 $70 million of claims. He was paid $178 million in california. Do you have any idea how much -- ok, he has been convicted.
▶ 1:12:26Sen. Johnson: Do you know how much of that was recovered?
▶ 1:12:27Sec. Bessent: Sir, what I can tell you is, once the money goes out the door it is difficult to recover. The best way to prevent fraud is to prevent it before it goes out the door. I will tell you the other heartbreaking part of this is I did a round in greater minneapolis and there were several owners of autism clinic stared -- valid clinics -- who are -- they having trouble getting funded and they are doing the right and for these families and for those children.
▶ 1:12:59Sen. Johnson: So, the fraud prevents the money going to the people who truly need it? That is my point. I don't think this is up-to-date. The -- the department of justice publishes indictments and prosecutions. About $4.7 billion is being prosecuted. Out of a total of somewhere between 250 billion dollars and $1 trillion in fraud. I know Dr.
▶ 1:13:28Sen. Johnson: Oz suspended payments to hospice centers in california. Los angeles has one third of all hospice centers. This is bended payment to 400 and not one of them complained. I wouldn't one of those hospice centers not complain about losing their funding?
▶ 1:13:47Sec. Bessent: Again, senator, we could speculate that it is fraudulentthe key is transparen. We need to be able to say where this money is going, everything that went on in minneapolis, minnesota, there was transparency. There was a list you were able to see, received this much, this is the address, these are the people.
▶ 1:14:13Sen. Johnson: Democratic government officials ignored that. They had access and ignored it. They ignored that but in many states like new york state, illinois, the reviewed just refused any level of transparency.
▶ 1:14:29Sen. Johnson: I believe wisconsin as well, refusing to turn over records.
▶ 1:14:34Sec. Bessent: Should be a bipartisan issue.
▶ 1:14:41Sen. Johnson: What can you do to prevent it? I know vice president vance has got a fraud task force. We have got to get our arms around this and we're not going to get help from any side of the aisle -- we are not going to get any help from the other side of the aisle.
▶ 1:14:58Sec. Bessent: We are supporting vice president vance in this task force. There is been a new assistant attorney general on it to do this and this is an all government by the trump administration.
▶ 1:15:12Sen. Johnson: We wish you luck. It is crucial.
▶ 1:15:14Chair Crapo: Senator whitehouse.
▶ 1:15:17Sen. Whitehouse: Thank you. Welcome. Have you identified any precedent in treasury or irs history for the agreement not to audit, investigate, or pursue any tax claims against the trump family or businesses?
▶ 1:15:46Sec. Bessent: I can't identify any precedent where 400,000 tax returns, including people you just mentioned and all of their employees, were linked in a violation of the most -- one of the most sacred duties of the irs.
▶ 1:16:07Sen. Whitehouse: The leak was by a contractor. Can you tell me what contribution is being sought by treasury or by the irs for the harm done by the contractor, to a certain extent, organization and the irs are a victim of the contractor's malfeasance or negligence being pursued by way of the contractor.
▶ 1:16:33Sec. Bessent: The ranking member tester ties me for cutting the contractor's contracts off, and we have removed the contracts, the ability to do business with the treasury and irs.
▶ 1:16:48Sen. Whitehouse: But there is no contribution to this particular case?
▶ 1:16:53Sec. Bessent: I am unable to discuss most of this because of ongoing litigation.
▶ 1:17:02Sen. Whitehouse: I know everyone likes to say that.
▶ 1:17:03Sec. Bessent: We like to follow the law.
▶ 1:17:06Sen. Whitehouse: The congress has constitutional oversight functions that do not disappear simply because there is litigation, however convenient it may be by way of providing answers. So we have no precedent for it. No contribution is being sought from the contractor at fault.
▶ 1:17:27Sen. Whitehouse: Was there any consideration to the government in return for the benefits of no audit, no investigation, no challenge or pursuit of refunds or other entities?
▶ 1:17:45Sec. Bessent: Again, I am unable to comment because of litigation. Treasure is represented by the department of justice. In all matters, they act as our attorneys so I would suggest you direct your questions to acting attorney general blanche.
▶ 1:18:04Sen. Whitehouse: I have had a lot of time and people before us invite me to ask my questions of somebody who is not before us. You are the one who is before us, and I think you ought to know if there was any consideration offered or paid in return for that settlement. It is a very simple fact question. Was there or was or not consideration?
▶ 1:18:26Sec. Bessent: Again, there is ongoing litigation. I suggest you speak with the treasury attorneys.
▶ 1:18:35Sen. Whitehouse: If this kind of behavior is ok with the chairman, I will just pursue other questions. What goes around, comes run in terms of dodging questions.
▶ 1:18:44Chair Crapo: I believe it is very clear that witnesses of any kind cannot discuss ongoing litigation.
▶ 1:18:52Sen. Whitehouse: They can certainly discuss effect they are aware of, the fact there are some litigation out there does not mean the witness can't say, yeah, there was no consideration, yes, there was consideration. Was there a defense analysis memo? It is referenced in the judge's decision in florida. Was there a defense analysis memo prepared by the irs, more specifically, did you see it?
▶ 1:19:22Sec. Bessent: Again, I am not going be able to comment on these matters.
▶ 1:19:30Sen. Whitehouse: Mr. chairman, this makes no sense. I've been a lawyer on my life and I have some idea what is protected when you have an ongoing bit of litigation. Whether this individual has seen an official memo from within his own department is a very simple question to answer.
▶ 1:19:57Sen. Whitehouse: I think it is completely inappropriate to have this game of gotcha be pursued without any consequences. Last of all, here is another question. Was there any analysis of what harm the fell -- befell president trump from having his taxes released when every president since nixon released
▶ 1:20:28Sen. Whitehouse: Their taxes and he had promised to? Did anybody analyze whether there was actually any harm at all to him in the circumstances?
▶ 1:20:37Sec. Bessent: There was a crime rate the president's rights under 6103 of the irs code was violated. Equally as important, 400,000 taxpayers had that right violated, including every employee of the trump administration. The greens keepers, cashiers. None of you see --.
▶ 1:21:03Sen. Whitehouse: It doesn't answer the question of whether the president actually suffered harm. You're not answering that question, either.
▶ 1:21:11Chair Crapo: Senator cortez masto.
▶ 1:21:17Sen. Cortez Masto: Let me ask you this on a separate subject, federal law prohibits the image of a living person from appearing on a U.S. currency, and that includes the president of the united states. Isn't that correct?
▶ 1:21:31Sec. Bessent: That is correct, senator.
▶ 1:21:36Sen. Cortez Masto: Thank. There is reporting your U.S. treasurer brain and beach and a senior advisor michael brown have been repeatedly urging staff at the agency's bureau of engraving and printing to prepare prototypes of the note, 200 $50 bill, with president donald trump space on it.
▶ 1:21:55Sen. Cortez Masto: In fact, in august and september, each provided gross staff with mockup designs for the note including one that sows -- shows president donald trump face in the center of the $250 bill between the signatures of the president and your signature. It is also reported the artist who said he designed the mockup told "deposed" he had spoken with trump about it. Is it true your staff is pursuing a mockup of this bill with president trump space on it?
▶ 1:22:23Sec. Bessent: That was in coronation with pending legislation that in the congress to change the requirement that a person must be deceased to be on the currency.
▶ 1:22:37Sen. Cortez Masto: So you are acting before legislation is passed to authorize it?
▶ 1:22:41Sec. Bessent: Just as we did with the working families tax cut, we were prepared in advance. At treasury, we do things in advance. My predecessor seemed to scramble to do things at last minute.
▶ 1:22:55Sen. Cortez Masto: So if the law does not pass, do till -- do you still contingent move forward without the authorization from congress?
▶ 1:23:01Sec. Bessent: Of course not. We follow the law.
▶ 1:23:05Sen. Cortez Masto: In respect of the agreement in the lawsuit settlement that a lot of my colleagues have been talking about, shielding the president, his family, corporations from many future audits, you are the acting irs commissioner, correct?
▶ 1:23:19Sec. Bessent: That is incorrect. My term expired.
▶ 1:23:25Sen. Cortez Masto: So you have no position with the irs?
▶ 1:23:27Sec. Bessent: They report to treasury.
▶ 1:23:33Sen. Cortez Masto: There is no interaction you have right now or responsibility over the irs other than the commissioners have free write and you don't have any authority to stop anything?
▶ 1:23:45Sec. Bessent: There is no commissioner, so I assume those duties.
▶ 1:23:50Sen. Cortez Masto: So you are acting commissioner.
▶ 1:23:51Sec. Bessent: Incorrect.
▶ 1:23:53Sen. Cortez Masto: Let's get it straight to the public does your involvement. There is no commissioner. There 70 acting.
▶ 1:23:59Sec. Bessent: I previously had been the acting commissioner fu senator warren, who likes to send me letters, likes to send me letters --.
▶ 1:24:10Sen. Cortez Masto: For transparency, what is your role currently with the irs and your authority?
▶ 1:24:15Sec. Bessent: I am performing the duties of the commissioner.
▶ 1:24:23Sen. Cortez Masto: There were 400,000 taxpayers information that was also leaked by Mr. littlejohn, the contractor working for the irs. Do you intend to give them the same immunities as president trump and his family received?
▶ 1:24:38Sec. Bessent: Again, you are not here at the beginning. I had a statement that I read to the chairman that I am unable to provide any additional details due to litigation.
▶ 1:24:50Sen. Cortez Masto: The 400,000 taxpayers are part of the litigation? You said their information was also leaked. They are not part of the litigation. Do you intend to give them the same immunity that you gave donald trump and his family and corporations or part of the litigation?
▶ 1:25:07Sec. Bessent: You may have missed the first part of this, but treasury does not get any of that. We are represented by the justice department.
▶ 1:25:17Sen. Cortez Masto: You are the acting commissioner. As acting commissioner, you had said earlier good concerns about those 400,000 taxpayers whose documents were leaked by independent contractor with the irs. If you have concerns about those 400,000, do you intend as acting or whatever role it is you have as the irs commissioner, do you intend to give them the same type of treatment?
▶ 1:25:40Sec. Bessent: We will follow the instructions in the settlement.
▶ 1:25:46Sen. Cortez Masto: That was not part of the settlement. Clearly -- let me just say, that was not part of the settlement. It has been very clear you are dodging this and you are trying to use it as an excuse. It is outrageous.
▶ 1:26:00Sec. Bessent: I will follow the law is an excuse?
▶ 1:26:05Sen. Cortez Masto: When you're going to your confirmation you said your goal is to get the federal budget deficit to 3% of gdp by the end of president trump's term, however, in the budget proposal for this year projects a deficit of over 5% of gdp by 2029. Do you no longer intend to achieve that 3% goal?
▶ 1:26:24Sec. Bessent: I do. I said something with a 3 in front of it. In fact had a fiscal contraction last year. We are already in the range.
▶ 1:26:39Sen. Cortez Masto: You said something with a 3 in front of it. All right I appreciate you being here.
▶ 1:26:42Chair Crapo: Senator young.
▶ 1:26:44Sen. Young: Great to have you here today. You and I have discussed shipbuilding in the past and the importance of shipbuilding, I've seen you recently offer your thoughts about the importance of this issue and the importance of rebuilding our shipbuilding enterprise here in the united states.
▶ 1:27:07Sen. Young: Their president has also spoken quite forcefully about the threats associated with having a shipbuilding enterprise that is weak and unable to produce enough ships for the needs of our nation. His executive order on restoring america's maritime dominance and subsequent maritime action plan, he highlighted with some specifics the challenge and opportunities that we face.
▶ 1:27:35Sen. Young: I am grateful for his leadership, grateful for yours because we know china has invested heavily in this industry. They have a centrally planned economy in some respects and they have over invested in their capacity. I have been briefed china can actually build over 1000 oceangoing vessels in a year. The united states built one last year. One oceangoing commercial vessel.
▶ 1:28:04Sen. Young: For those who are skeptical of industrial policy, and I think it is a healthy skepticism, there is a reason we don't have a centrally planned economy. But from time to time, you need to deviate from the catechism. Adam smith himself, the father of free-market economics, identified shipbuilding as the one industry that a maritime nation cannot be allowed to have offshore. So you and several other members of the cabinet, Mr.
▶ 1:28:32Sen. Young: Secretary, have highlighted this need to restore our maritime industrial base. But we know we can't do it without giving the president of the united states additional authorities. Resources and authorities he needs. That is why congress in a bipartisan way needs to pass the ships for america act and pass it now. Mr. secretary, how are you thinking about these issues? Do I have your commitment to work with congress to start building ships in america again?
▶ 1:29:02Sec. Bessent: Senator, as you know, president trump signed an executive order to restore U.S. maritime capacity. Gave a speech at the break and library on friday where I talked about the critical industries that we needed to reshore and top of mind was the shipbuilding industry. As important as the industry as a reservoir of knowledge we have, should be get into a great power conflict.
▶ 1:29:30Sen. Young: That is it. We literally don't have because of cheerful scenario planning in the future, we haven't thought through how we are going to repair our navy vessels and if necessary, build new ones in a time of long war scenario. Long war is a war that might exceed just a couple of months. It is an acute issue. I agree with you, Mr. secretary.
▶ 1:29:53Sec. Bessent: We look forward to working with you to conduct logistics, resilience, and we want to work with you and your team toward reset.
▶ 1:30:05Sen. Young: That is highly encouraging. I will take you up on that, sir. I am going to pivot quickly to china's advantage as it relates to medical minerals, not just as it relates to the supply. But they have come up with a way to manipulate our markets. They shape prices, restrict -- they create all this uncertainty that keeps private capital from financing U.S. or allied critical minerals projects.
▶ 1:30:38Sen. Young: I have come up with a solution to help address this. We call it the secure minerals act. Mr. secretary, it is designed to create a strategic resilience reserve. This would be a government corporation and it would employ tools like loans, acquisitions, nonrecourse lending, advance market commitments, contracts for differences, and partner country co-investments. All these tools.
▶ 1:31:08Sen. Young: But the goal is of course not to compete with or replace private capital, it is to create enough price stability and demand certainty to build domestic interest or partner capacity. We want people investing in processing, digging new mines, and all the rest. Mr.
▶ 1:31:33Sen. Young: Secretary, as the administration considers tariffs on process critical minerals and derivative products, should those tariffs be paired with a financing mechanism like the strategic resilience reserve to make the capacity we need commercially viable?
▶ 1:31:49Sec. Bessent: We are working on project vault to do much of what you're talking about. It is the critical minerals and as you said, the predatory pricing that china has done for 25, 30 years just like in shipbuilding, critical minerals is one of the key industries that we are focused on.
▶ 1:32:13Sen. Young: My hope would be we could work with you to get more legal certainty to that very important project that you're working on so that after the trump administration leaves -- which will be just a couple of years -- there can be a legacy of enduring law and operations so that we have addressed this challenge related to our critical minerals vulnerability. Might I work with you on that effort?
▶ 1:32:35Sec. Bessent: We look forward to working with you, senator, and it is a priority for this administration. Treasury and for myself.
▶ 1:32:50Sen. Young: Thank you, Mr. secretary.
▶ 1:33:02Chair Crapo: Senator daines.
▶ 1:33:04Sen. Daines: Thank you. Sec. Bessent, it is good to have you here today. Grateful for all you are doing, steady hand of wisdom there in the west wing as you're working to solve the difficult challenges we face as a nation. Thank you for your service and appreciate you being here today.
▶ 1:33:24Sen. Daines: I want to start by emphasizing how pleased I was when I saw the irs settlement offer for taxpayers involved with conservation easement tax disputes. For years, I've been sounding the alarm here at capitol hill on the abusive, syndicated conservation easements falsely reclaiming a charitable donation solely to turn a profit.
▶ 1:33:52Sen. Daines: I am an avid outdoorsman, from montana, protecting our farmers and ranchers and championing conservation is one of my biggest priorities as I represent the state of montana here the past 13 years. I know it is a shared priority for you and this administration, which is why I commend you for your help in implementing and enforcing this settlement. Thank you.
▶ 1:34:16Sen. Daines: I also want to thank you for your hard work as we work together over much of the last year on the working family tax cuts act that was passed and signed into law. We are seeing some great results in montana.
▶ 1:34:30Sen. Daines: In fact, montanans receiving an average only $3600 tax cut on their tax return this year and about 105,000 montana small businesses will benefit from permanent tax relief to that 20% cost reduction -- pass-through deduction. We know it supports more jobs.
▶ 1:34:58Sen. Daines: We did something here that is going to be helpful to create more jobs and job growth and income growth here for so many american people.
▶ 1:35:06Sec. Bessent: Senator, I have clear recollection of you in the cabinet room expressing to myself, white house staff, the president, the need for permanence. I think that will be one of your great lasting achievements once you retire.
▶ 1:35:23Sen. Daines: Thank you. I know we both knew there permanence was an important part of the equation to remove the uncertainty that is oftentimes found in the tax with expiring tax provisions. There is enough uncertainty on capitol hill, sadly, that happens because of whether it is overreach in regulations or uncertain tax, to cut off the table was one of the great achievements we faced.
▶ 1:35:53Sen. Daines: I think we will see the benefits of this bill for many years to come. On capitol hill, need time we passed 800 pages in length, the more you dig in, the worse it gets. Oftentimes the big important barrel spending bills, in this case, the more you dig into that working family tax cut bill, the better it gets.
▶ 1:36:12Sec. Bessent: Circ of the statistics are unbelievable -- sir, the statistics are unbelievable. We saw the irs 61 million filers filed for at least one of the signature policies. We are seeing an industrial renaissance because of the immediate expensing for equipment, factories, and farm.
▶ 1:36:39Sen. Daines: It is music to our ears and predicted would happen. I also believe to think about our china strategy, having that 100% expensing on the r&d investment incentivize innovation will be another lasting legacy from what we accomplished together over the course of last year.
▶ 1:36:59Sen. Daines: I would like to ask you an open-ended question around how passing that largest tax cut or preventing the largest tax increase in american history, wi-fi making it permanent is that making the american taxpayer better off?
▶ 1:37:17Sec. Bessent: Sir, I believe as you said, giving great certainty whether it is to households, small business, or large business, it provides for them to create capital stock, capital spending, and increase productivity, and increased productivity is what leads to higher standards of living across the country.
▶ 1:37:44Sen. Daines: Last question I have is on digital assets. Digital assets have moved from the margins more to the mainstream. It is clear our tax code has not kept up. We bear that responsibility now to put a tech structure in place and take the lead here on the finance committee.
▶ 1:38:04Sen. Daines: As many of this committee know, that is why we have been developing a framework that could give us clearer rules for digital asset taxation following the pass of the genius act, digital assets are becoming more degraded in the financial system. I believe will play a grueling role in our economy and potentially keep driving the investment in the united states. If the numbers speak for themselves. The total crypto market cap reached $4 trillion for the first time in history.
▶ 1:38:34Sen. Daines: The stablecoin transaction volume was $33 trillion, 72% increase from 2024. The number of crypto mobile wallet users reached an all-time high, of 20% from last year. I do believe it is important we provide some clarity and that is our responsibility here.
▶ 1:38:57Chair Crapo: The time of the judgment has expired.
▶ 1:39:02Sen. Daines: If I could have one final question? Sec. Bessent, see administration continues its work in digital assets, we commit to working with congress on implementing digital asset taxation legislation?
▶ 1:39:19Sec. Bessent: I will commit to that. And tax certainty as we have seen with every other industry is the key to innovation.
▶ 1:39:26Chair Crapo: The time has expired. The chairman's returned. >> thank you. Welcome to the committee. Though I've not been in the room, we had this thing called closed-circuit television and the congress so I've been able to watch the hearing in my office.
▶ 1:39:47Chair Crapo: Many of my colleagues have tried to get at this so-called anti-weaponization fund that was created in a settlement with the president after he sued his own irs for $10 billion that includes this provision that bars the irs from auditing or taking any enforcement action on any of the president's tax returns or those of his family.
▶ 1:40:11Chair Crapo: I understand, I've heard you repeat many times that you cannot respond to this because of ongoing litigation. I want to associate myself with a point that senator whitehouse made which is that I don't quite understand how we are able to do our oversight responsibilities if we can't ask any questions when anything is even in the vicinity of ongoing litigation. Let me see if I can ask a question that I don't think has anything to do with the ongoing litigation.
▶ 1:40:40Chair Crapo: My first question, did brian morrissey, your former general counsel, ever raise concerns over the establishment of the anti-weaponization fund before he left his position, before he resigned?
▶ 1:40:54Sec. Bessent: That is attorney-client privilege.
▶ 1:41:00Sen. Smith: ?
▶ 1:41:01Sec. Bessent: That would have been a privilege conversation.
▶ 1:41:05Sen. Smith: -- treasury agree with the justice department and thinking that the court decision blocking payments out of the slush fund was incorrectly decided?
▶ 1:41:15Sec. Bessent: Again, we do not have agency in this. We defer that the department of justice that act as our attorneys and they represent as so you should refer any of those questions to acting attorney general blanche.
▶ 1:41:33Sen. Smith: I will come back to that. Do you at least commit to following any and all court decisions regarding the establishment of the administration of the slush fund? Do you see those court decisions as legitimate, that you would follow?
▶ 1:41:44Sec. Bessent: We follow the law.
▶ 1:41:47Sen. Smith: So that means you would follow a court decision. You would not have your own opinion about the law, you would follow the decision of the court?
▶ 1:41:54Sec. Bessent: We follow -- we will always follow the law.
▶ 1:41:59Sen. Smith: You will follow the decision of the court.
▶ 1:42:02Sec. Bessent: We follow the law.
▶ 1:42:06Sen. Smith: You said acting attorney general blanche is representing treasury and the irs. I am wondering, Mr. chair, if maybe the committee should call acting attorney general blanche to appear before our committee if sec. Bessent is unwilling to answer any questions about the irs, which as my colleague senator cortez masto established, sec. Bessent is overseeing. I don't expect a response to that, Mr.
▶ 1:42:33Sen. Smith: Chair crapo but I asked a question recently, how are we going to find answers to these questions if we can't get them from the secretary?
▶ 1:42:42Chair Crapo: The secretary said many times, the attorney client privilege and relationship they have with justice department --.
▶ 1:42:52Sec. Bessent: You asked if I would follow the law. I'm following the law.
▶ 1:42:58Sen. Smith: But I noted you did not say you would follow the court and their interpretation of the law, he said he would follow the law which is different as we know this administration. I have just a few minutes, minute and a half left and I want to get to the farm economy. This is something you and I have discussed many times when he first came into my office. You called yourself a soybean farmer.
▶ 1:43:21Sen. Smith: Though I think minnesota and farmers would just minnesota farmers would differentiate between wealthy landowners who rent their land versus people who do the farming. I can tell you in minnesota, Mr. secretary, a lot of farmers are really feeling the pain. According to the farm bureau, farm bankruptcies were up almost 50% this last year. Minnesota has the most farm bankruptcies in the country in the first quarter of 2026.
▶ 1:43:51Sen. Smith: And the farm bureau tells us six out of 10 farmers are reporting declining financial situations, so it is rough out there. Fertilizer prices are up. Diesel prices are up. Could you just explain to me and to farmers in minnesota how does increased prices, driven by the war in iran, are worth the pain they are feeling right now?
▶ 1:44:18Sec. Bessent: Do you believe iran could have a nuclear weapon?
▶ 1:44:23Sen. Smith: This is my time to ask you the questions. How do you respond to minnesota farmers who cannot afford the fertilizer they need?
▶ 1:44:33Sec. Bessent: If you look in the dictionary from the definition of a farmer is someone who owns the farm and farmed the land. As our former farmer, I will tell you, and maybe you know, that 75% of their fertilizer had already been purchased this year.
▶ 1:44:51Sen. Smith: That is not what my farmers in minnesota are telling me. They are telling me they cannot afford their fertilizer and they know the reason why.
▶ 1:44:57Sec. Bessent: There is no doubt that farmers have been struggling, but much of that -- there was a record crop last year, senator britt what to record crops lead to? Lower prices.
▶ 1:45:11Sen. Smith: I will take that back to my producers in minnesota that they have somebody in the department of treasury, former farmer, who is feeling their pain. Thank you.
▶ 1:45:26Chair Crapo: Senator lankford.
▶ 1:45:29Sen. Lankford: A year later after passing the working families tax cut act, I have to tell you it has been remarkable how fast treasury has moved. We worked a lot together on things like full expensing and making that permanent and trying to be able to get that established long-term. That makes an enormous difference from farmers and ranchers were trying to buy equipment right now. Commodity prices are down, fertilizer prices are up.
▶ 1:45:59Sen. Lankford: But I would say fertilizer prices started spiking under the biden administration, not in the past two weeks and certainly not in the past two months. Gasoline prices now are what they were during the biden administration. There was not a war in iran and there was 9% inflation during that time period. There's been a tremendous event of growth in the economy which I appreciate your partnership on. We have worked a lot on the chargeable donation side of things.
▶ 1:46:30Sen. Lankford: -- charitable donation side of things. I appreciate the information that treasury and irs has put out that helps folks that are donating now to nonprofits and the work we have done together. There is to do on the donor funds. There was a biden administration regulations that came out that were directly targeted at the donor advised funds that have caused real problems. Those are folks that are directly helping nonprofits and charities all over the country.
▶ 1:46:58Sen. Lankford: But they are feeling real pain from some additional changes in regulation. I know this administration has been very aggressive at reviewing regulations and looking at it. I would ask you to review as well the biden administration regulations on donor advised funds because that is directly taking money away from people that need it the most and folks that want to be able to help.
▶ 1:47:18Sec. Bessent: I will be happy to instruct our office of tax policy to work with you and your staff on this. I know it is an important issue for you.
▶ 1:47:27Sen. Lankford: I look forward to that cooperation. I want to talk a little bit about what you have done so far on the sanctions on drug smuggling and specifically targeting all these cartels that are in mexico and central america and south america and trying to be able to go after that. You've seen progress with new techniques to be able to target individuals and entities to try to limit the amount of smuggling.
▶ 1:47:58Sen. Lankford: I would like an update, dollars have been allocated and you've have asked for additional dollars directly related to terrorism and drug smuggling cartels. This is a budget hearing. How have the budget dollars previously been used? What are you asking additional dollars for?
▶ 1:48:11Sec. Bessent: We have designated the mexican cartels as foreign terrorist organizations. We have also put in effect only U.S.-mexican border in certain counties called geographical orders. So we can better identify problems in our banking system and money that is been laundered. This is a combination with the crimes enforcement network and ofec.
▶ 1:48:43Sec. Bessent: If we use it to follow the money and then to sanction -- we sanctioned about this time lester, two mexican financial institutions that were riddled with drug money.
▶ 1:48:59Sen. Lankford: So you're doing a lot of things to the shuttle fleet moving iranian oil and others as well. Give me an update on success dealing with that targeting specific sanctions on running illicit movement of oil and other goods they're trying to be able to move.
▶ 1:49:15Sec. Bessent: We began with the maximum campaign pressure in march 2025. We have continued that. Proximally seven or eight weeks ago, the president instructed me to take it to maximum rate we call it operation economic fury.
▶ 1:49:37Sec. Bessent: The iranians, one of the many mistakes they have made, was targeting with missiles their gulf neighbors. Many of them were not transparent with us what may or may not have been going on in their banking system. We achieved a greater level of transparency and we have seized a substantial amount of crypto assets and sanctioned ships. In fact, the navy has seized some of the ships.
▶ 1:50:06Sec. Bessent: We are tracking mostly the irgc funds and we are freezing those for the day they could be given back to the iranian people.
▶ 1:50:16Sen. Lankford: I look forward to that. In oklahoma, we a massive influx of chinese illegal aliens that moved into our state and set up a grow operations for marijuana and started shipping it literally all over the country.
▶ 1:50:32Sen. Lankford: It was a tragic thing to be able to watch what happened to the human trafficking and labor trafficking and sex trafficking that these chinese individuals were doing in my state, not only to purchase land and be able to set up these operations, but I want to be able to follow-up with your team unjust ways we can work on following the money, legal chinese money coming in to buy american farmland and also to control some operational locations are some of our sensitive sites.
▶ 1:51:00Sen. Lankford: What you're doing -- I know you're doing sanctions on drug issues and such, but want to be able to follow up on that.
▶ 1:51:06Sec. Bessent: We look forward to working with you on that, senator.
▶ 1:51:09Chair Crapo: Senator warren.
▶ 1:51:11Sen. Warren: Sec. Bessent, let's start with something you and I agree strongly on. Last year you came out in support of a trading band for members of congress. I have introduced legislation to do exactly that.
▶ 1:51:27Sen. Warren: You explained the need for a ban on our trading stock by saying, "you look at some of these eye-popping returns every hedge fund would be jealous of them." and "if in a private citizen traded that way, the sec would be knocking on your door." strong words for someone who used to run a hedge fund.
▶ 1:51:52Sen. Warren: Last month president trump's latest financial disclosures came out and they showed he made more than 3400 stock trades worth more than a quarter of a billion dollars in just the first three months of 2026. That is roughly half of what all 535 members of congress made last year combined.
▶ 1:52:18Sen. Warren: The value of virtually every one of those stocks that the president traded in is directly affected by president trump's official actions. So secretary bessent, you and I agree it is a conflict of interest for members of congress to trade stocks. You also agreed that it is conflict of interest for president trump to trade stocks.
▶ 1:52:41Sec. Bessent: A couple of things, one, president trump is not sitting in the oval office engaging in high-frequency trading strategy. Clearly, he had an outside manager who was doing that. I think it is incumbent upon both houses of congress to get their house in order before you move --.
▶ 1:53:04Sen. Warner: You think it is ok -- let's be clear. You were a wall street guy so you know better. The investments that president trump has made are not blind. President trump literally signed the 113 page document publicly listing all of his individual stock trades at the same time that he is making decisions affecting those stocks.
▶ 1:53:31Sen. Warner: So you are going to sit here and say it is datacomp active interest?
▶ 1:53:36Sec. Bessent: I'm going to say this body needs to get his house in order first.
▶ 1:53:41Sen. Warner: How about we get the white house in line at the same time? I don't own any individual stocks. Buy houses in order, thank you.
▶ 1:53:51Sec. Bessent: Others on this committee can't say that.
▶ 1:53:55Sen. Warner: Let's look at some individual trades. On january 6, donald trump purchased up to $1 million worth of nvidia stock. One week later, his administration changed U.S. policy and loosened the rules on export controls so that nvidia could sell its chips to china. Now the price of nvidia stock is through the roof.
▶ 1:54:18Sen. Warner: Secretary bessent, you said last year if any private citizen traded the way members of congress to "the sec would be knocking on their door." my question is, should the sec be knocking on president trump's door to start an investigation over this trade?
▶ 1:54:36Sec. Bessent: Again, if this body wants to ban individual stock trading, which I would advocate for yourselves, start there. If you want legislative action to continue, that is your prerogative.
▶ 1:54:50Sen. Warner: So it is our prerogative, so he would support our saying that president trump should be investigated?
▶ 1:54:54Sec. Bessent: I would support --.
▶ 1:54:57Sen. Warner: And president trump should be investigated?
▶ 1:55:01Sec. Bessent: Get your house in order.
▶ 1:55:04Sen. Warner: How about the white house getting his house in order?
▶ 1:55:06Sec. Bessent: Please lead by example.
▶ 1:55:09Sen. Warner: I would like to see the president of the united states lead by example. You say there should be an investigation when that kind of activity takes place. How about we start with the white house? Let's do one more. President trump but tens of thousands of dollars worth of stock in robin hood and the bank of new york mellon corporation known as bny.
▶ 1:55:31Sen. Warner: April 6, your treasury department announced it had chosen the financial agent to implement the new trump accounts program bny and his partner robin hood, both stocks of course have risen since then. Secretary bessent, let me ask you, if these stock purchases that trump made were made using inside information, would that be illegal?
▶ 1:55:55Sec. Bessent: Again, I'm not aware -- I'm not going to speak to that.
▶ 1:56:00Sen. Warner: Would be worth investigating? You don't have to be a lawyer.
▶ 1:56:05Sec. Bessent: What we investigate many people in this committee, senator? Many people.
▶ 1:56:14Sen. Warner: You don't think the white house should follow the same set of rules that are already the law?
▶ 1:56:17Sec. Bessent: I think you should get your house on order here.
▶ 1:56:22Sen. Warner: My house is in order.
▶ 1:56:23Sec. Bessent: Many on your side of the aisle --.
▶ 1:56:27Sen. Warner: We need stronger anticorruption rules and conflict of interest rules in washington for everyone, and that includes the president and it includes congress. Instead of draining the swamp like donald trump is enriching himself by taking advantage of his position. That is not public service. He is the one who should lead by example.
▶ 1:56:51Chair Crapo: Senator barrasso.
▶ 1:56:56Sen. Barrasso: Talking about draining the swamp, I appreciate what you're doing, Mr. secretary, because you inherited a very troubling record of misconduct in terms of the irs politicization and you moved quickly and championed the efforts to turn that around. We saw under the obama administration, the irs spent years systematically targeting conservative nonprofit groups from a tea party groups, faith-based organizations, christian conservatives, biden administration and and there irs consider the same pattern.
▶ 1:57:26Sen. Barrasso: The recent showed investigator churches based on what their pastors preached. We can go on and on about the bible teachings that were typically affiliated with republican party rate of those were being attacked by previous administrations. This wasn't to be tax administration, this was government intimidation. The american people are not standing for it.
▶ 1:57:48Sen. Barrasso: Can you tell us with the treasury department is done to ensure something like this targeting by the previous administration and the obama administration's, these persecutions are going to stop?
▶ 1:57:57Sec. Bessent: Thank you for the question. We are working to ensure this will never happen again. Never happen again. It was an egregious example by the biden administration, the garden justice department, irs, and back to other irs -- the obama irs. There was a famous case with that.
▶ 1:58:23Sec. Bessent: And we have made it clear that 6103, taxpayer privacy, must be adhered to.
▶ 1:58:30Sen. Barrasso: I want to talk of the tax cuts we were able to pass last year and you are so helpful in our efforts to get the working families tax cuts bill passed. We see no the tax returns this year, over 60 million americans have claimed at least one of these republican new tax cuts. No tax on tips, no tax on tips, no caps on overtime, senior reduction, paychex are bigger.
▶ 1:58:53Sen. Barrasso: I think it is important for families to know all of the things that are in this legislation, you and I have talked about, but continued to travel as to other members and some are not aware of many things that are advantaged here. How is it the treasury department ensuring families across the country can access everything that this law has to offer them?
▶ 1:59:11Sec. Bessent: Sir, I have traveled across the country as having people on my staff. We push out to members on both sides the benefits and the breadth and depth of the tax bill that was passed july 4.
▶ 1:59:34Sec. Bessent: We were on what I call a carousel of pushing out the most important parts of the tax bill, for instance, on the school choice. We are working actively with states, red and blue states, to make sure dollars can go into those states either for public-private or additional tutor.
▶ 1:59:56Sen. Barrasso: I want to ask about retirement security. About 50 million have no access to retirement plan and wyoming, about 65,000 independent truckers, contractors, ranchers, self-employed individuals we see all across the country. President trump recently signed an executive order to try to change that and directs you in the treasury to provide workers with access to low-cost retirement plans with matching federal contributions.
▶ 2:00:23Sen. Barrasso: Under her leadership, treasuries working on legislative recommendations to build on this framework to help these individuals. What is your visioning for help in closing that retirement coverage gap?
▶ 2:00:32Sec. Bessent: We think the iras for independent workers are very important. We are working to finish our guidance on getting this up and running july 4 and then we will be all hands on deck for this. As you have said, we can see that anxiety level for americans in terms of retirement has never been higher. Social security is the building block for that. We are working to supplement that.
▶ 2:01:04Sen. Barrasso: A final question, it is considering the economic pressure on iran. How does your budget help ensure treasury has the tools you need to keep that economic pressure?
▶ 2:01:17Sec. Bessent: We have a dedicated staff that has done a fantastic job of outlining the black market and the flow of iranian oil and energy around the globe. We have frozen assets. We are holding those. We have severely disrupted the iranian economy and the iranian war machine. I think the inflation may be over 200%.
▶ 2:01:46Sec. Bessent: The currency has collapsed creatively believe more than 50% of the army is not getting paid and the police are not reporting to the police station.
▶ 2:01:54Chair Crapo: Senator lujan.
▶ 2:01:59Sen. Lujan: Should americans who illegally evade your taxes be investigated and prosecuted?
▶ 2:02:07Sec. Bessent: Yes.
▶ 2:02:09Sen. Lujan: Should people and organizations facilitating money-laundering for karen, north korea, or how must be prosecuted?
▶ 2:02:18Sec. Bessent: Yes.
▶ 2:02:22Sen. Lujan: What about laundering money for mexican drug cartels?
▶ 2:02:25Sec. Bessent: Yes.
▶ 2:02:30Sen. Lujan: Should someone who has insider-trading?
▶ 2:02:35Sec. Bessent: According to the locum they should.
▶ 2:02:37Sen. Lujan: The department of justice on behalf of your department settled with president trump by creating a $1.776 billion slush fund to pay for his supporters and criminals. You either directly or through your staff asked to sign the original agreement?
▶ 2:02:54Sec. Bessent: Again, senator, you are not here at the early part of the meeting.
▶ 2:02:59Sen. Lujan: I saw you on tv.
▶ 2:03:00Sec. Bessent: Congratulations for then you know I cannot answer those questions.
▶ 2:03:08Sen. Lujan: Are you familiar with the addendum?
▶ 2:03:10Sec. Bessent: I'm not sure what you're referring to.
▶ 2:03:13Sen. Lujan: They give away from the irs that has president trump and anyone that knows him or does business with him or part of a business, they get away scott free?
▶ 2:03:21Sec. Bessent: Again, I refer you to attorney general blanche.
▶ 2:03:28Sen. Lujan: Are you attorney blanche's client?
▶ 2:03:30Sec. Bessent: The irs and treasury are a client of the department of justice.
▶ 2:03:37Sen. Lujan: Is that a nice way of saying yes, our client? He is your lawyer. Already the secretary of treasury? Yes is the answer. Scott bessent, let me ask you this, are you the secretary --.
▶ 2:03:53Sec. Bessent: My personal capacity, todd blanche is not my attorney.
▶ 2:03:58Sen. Lujan: Mr. secretary, scott, let me ask you this, are you the secretary of treasury of the united states government?
▶ 2:04:05Sec. Bessent: Yes.
▶ 2:04:08Sen. Lujan: The department of justice represents the irs and department of treasury in this lawsuit.
▶ 2:04:12Sec. Bessent: Correct.
▶ 2:04:15Sen. Lujan: Are you aware of the addendum -- you are telling me doj get the president this without you knowing about it?
▶ 2:04:20Sec. Bessent: Again, they settled --.
▶ 2:04:24Sen. Lujan: I'm not a lawyer but you have a bunch behind you. You should see the faces they are making behind you. There are scowling at me.
▶ 2:04:31Sec. Bessent: I think that is a different reason, sir.
▶ 2:04:35Sen. Lujan: For whatever reason, they are doing it. Mr. secretary, my concern is this addendum has not been getting a lot of attention. There are colleagues on this panel that think this slush fund is a bunch of bullshit have up to say get rid of it. People need to say, are you ok with one person in america because the secretary of treasury, I'm guessing, conferred with the department of justice because your name on this lawsuit, sir.
▶ 2:05:04Sen. Lujan: These are all the transactions from the president as well. You were bragging to one of my colleagues you've been sanctioning people doing bad things in america. People that get sanctioned, like iran or terrace, are told to not do business in the united states with partners. Is that your understanding?
▶ 2:05:23Sec. Bessent: It is.
▶ 2:05:27Sen. Lujan: I congratulate you for that. This little giveaway to president trump and his family gets them off scott free. Does every american become part of this addendum? If someone did not pay their taxes or violated tax law or did bad things, they told, can't prosecute from your good? Everyone going back or is this only for president trump and his affiliates?
▶ 2:05:53Sec. Bessent: Do you have specific knowledge president trump is being audited?
▶ 2:05:58Sen. Lujan: I have specific knowledge of this addendum that you don't know a damn thing about from the department of treasury that they signed you up for. I'm asking this question because president trump's sons signed a deal, as you know, with liberty financial with a bunch of folks you sanctioned.
▶ 2:06:23Sen. Lujan: And now as part of this, there is an addendum that says president trump and his kids and anyone affiliated with him -- I don't know if it is correct wives, former wives, people that just did transactions with them, they were off scott free. That has a new ring to it, scott free trade because the department of treasury and the irs is not going to go after them, sir. This is wrong. This is lawless.
▶ 2:06:51Sen. Lujan: I hope our college look at this addendum, if I could offer it into the record.
▶ 2:06:55Chair Crapo: Without objection.
▶ 2:06:57Sen. Lujan: Come on, man. There a better way of doing this. That is all we are saying. I appreciate you don't want to talk about a lawsuit. That is your prerogative to answer that way. But to say you as a client, secretary of the U.S. treasury, does not know what the department of justice is giving away two people, come on, man. That is not on the up and up.
▶ 2:07:18Sec. Bessent: You don't understand the way the protocol works. We received advice and accept their settlement.
▶ 2:07:26Sen. Lujan: Were telling as a secretary of U.S. treasury, you don't know that the president of the united states, who I think you work for, got a sweetheart deal from the department of justice and you are in line for the presidency, scott.
▶ 2:07:41Sec. Bessent: I do know the president of united states and 400 of his employees have the largest tax loop in history.
▶ 2:07:48Sen. Lujan: All of the insider-trading.
▶ 2:07:51Sec. Bessent: Want to apologize on behalf of the american government? Simple and you should apologize to the american people for giving us donald trump. That's what you should do.
▶ 2:08:02Chair Crapo: Senator warnock.
▶ 2:08:10Sen. Warnock: Last month I asked the president's nominee to lead the federal reserve what I thought was a simple question but he tried to dodge it. His answer was cute. I'm not sure the america people were struggling were laughing. So I will ask you the same question to see if I can get a clear answer.
▶ 2:08:32Sen. Warnock: President trump has said his rate of the economy, his words, is a "plus plus plus plus plus." he said this before he sent energy and gas prices soaring with this illegal war inran, a war costing billions of dollars more per day, turbocharging inflation. I will Mr.
▶ 2:09:00Sen. Warnock: Secretary the treasure the same question, given all of the challenges facing ordinary americans, our political differences aside, what grade would you give the U.S. economy right now?
▶ 2:09:12Sec. Bessent: Which challenges other than temporarily prices would you identify, senator
▶ 2:09:21Gallego Sen. Warnock: I'm asking what grade would you give the economy?
▶ 2:09:23Sec. Bessent: I thinki that the makings of one of the strongest economies in history. R2.6% growth. And core inflation dropped. Food inflation since president trump began, not as much as you all -- what to disagree. 2.5% print Sen. warnock: you agree with the president? You would give the economy a plus, plus, plus, plus from where you sit?
▶ 2:09:47Sec. Bessent: I think we have the makings of a strong economy. I think we have temporary elevated prices that will come back down.
▶ 2:09:57Sen. Warnock: I got it. You're telling americans, it is not so bad we had americans get the trump economy a failing grade. You and I can disagree but it is not about us. They get the economy a failing grade because they can't afford anything. Folks back at home in georgia whom I represent are struggling. Let me finish. Struggling to make your life's work.
▶ 2:10:23Sen. Warnock: They know president trump's iran war in the chair of texas are only making things worse. Talk to farmers in georgia, they will tell you that. But I'm not so sure folks fully grasp the long-term crisis that is also brewing for our children and our grandchildren. Wars do not pay for themselves.
▶ 2:10:46Sen. Warnock: And this year under the trump administration's economic policies, $31 trillion national debt exceeded gdp for basically the first time since world war ii. Think about that. To be fair, that did exceed gdp during the covid-19 pandemic, but that was only briefly. Crash as a result of a once in a century pandemic.
▶ 2:11:15Sen. Warnock: The big ugly bill alone will add nearly $5 trillion to the national debt. Something I do care about. I think it matters. I think it is interesting that republicans talk about when democrats are in charge. I have not heard much discussion about the national debt lately. According to our nonpartisan scorekeepers and the congressional budget office, we will add $5 billion to national debt. Do you still think driving deeper into debt to extend the leader tax cuts were a good investment?
▶ 2:11:45Sec. Bessent: Sir, 90% of the filers who availed themselves on president trump's signature policies make below $100,000. If you want to know who is responsible for the american people, you will the tort system and the biden administration. I'm not sure if you are part of that. With 21.5% --.
▶ 2:12:08Sen. Warnock: Biden has been out of the office for two years in effect you all keep talking about him -- sir, I'm asking a basic question. Do you think going into debt to extend billionaire tax cuts was a good investment, yes or no?
▶ 2:12:22Sec. Bessent: I disagree with the categorization of billionaire tax cuts when in fact most of the tax cuts went to working -- working americans --.
▶ 2:12:32Sen. Warner: According to --.
▶ 2:12:34Sec. Bessent: You're putting a congressional budget office which --.
▶ 2:12:39Sen. Warnock: According to iran hacks. -- bu -- biden hacks.
▶ 2:12:53Sen. Warner: There was that whatever tax relief you think you gave them, or taken up more by the tariffs. According to the yale budget lab , cost families three times as much as they got back in tax cuts. I talked to the folks in georgia. How about the iran war that is costing tens of billions of dollars? You purposely said we had money for the war.
▶ 2:13:20Sec. Bessent: Do you think it is a good idea to spend --.
▶ 2:13:27Sen. Warner: Sir, sir, so you do think it is a good idea? I think --.
▶ 2:13:33Sec. Bessent: I think just as many people historically when president obama was in office said iran may not --.
▶ 2:13:41Sen. Warnock: President obama left office in 2016.
▶ 2:13:44Sec. Bessent: That many people on this committee that said iran should never have a nuclear weapon.
▶ 2:13:51Sen. Warnock: I agree with that. And they are closer thanks to this administration. In the strait of hormuz is still closed. You should tell the people in georgia that this war is a good idea.
▶ 2:14:04Chair Crapo: Senator cassidy.
▶ 2:14:07Sen. Cassidy: Thank you for being here. We know social security is going to solve it in six years. Mr. president assessor trump 1 what was the plan to do and he said that would be a second trump administration deal. Nowhere in the first half of the president or president 's second term and ony six years away. At that time we were like 12 years away from insolvency.
▶ 2:14:32Sen. Cassidy: Social security will account for federal expenditures and I was told once that it accounts for 20% of our long-term reliability. --
▶ 2:14:52Sec. Bessent: We inherited a mess.
▶ 2:15:00Sen. Cassidy: If we wait to get our short-term house in order, we will be three years away from insolvency I've been working on this. It is amazing since I've been working on this over the last five years, it is amazing how much has already deteriorated. It is just amazing. In five years, it has gotten so worse.
▶ 2:15:22Sen. Cassidy: All we really going to wait until we get -- I am not challenging, I'm just asking, are we really going to wait until we're not going to do anything? I'm just not sure of that.
▶ 2:15:32Sec. Bessent: Crawl, walk, run -- with these deficits, with this debt was run up in the previous administration, 6.9% deficit and gdp. Highest ever when we were not at war and were in recession. We brought it down to 5.4%.
▶ 2:15:53Sen. Cassidy: The social security trust fund is funded by the social security tax, which is segregated from general revenue. If we speak about the debt and deficit, and I'm not touching it right now except so far as context we have to do something, that is general revenue but wherever that comes from. We are speaking about social. That is segregated. That is a social security revenue problem. An expenditure issue. To me, that is segregated.
▶ 2:16:25Sen. Cassidy: So is there a plan to do anything about the segregated fund with the segregated revenue stream in the segregated expenditure?
▶ 2:16:33Sec. Bessent: The source of the revenue, not separated because the more americans were, the more the higher-paying jobs they have --
▶ 2:16:47Sen. Cassidy: That is an indirect effect. Is that the only plan the administration has currently to increase the number of jobs and better paying jobs and -- I have the big spreadsheet on this. That is inadequate to address the problem. Every day 10,000 boomers become eligible for social. A drain on this is just incredible. It is just going down. That would not solve the problem.
▶ 2:17:20Sec. Bessent: You were kind enough to share the spreadsheet with me.
▶ 2:17:26Sen. Cassidy: I'm gathering the administration does not have a plan to address it. Not in any way except to say by your answer is that the only response would be indirect side of it. On a bipartisan basis, we have been working on something that would attempt to address this. It is going to take the president, the administration, some pointing involved. This point it is in congress.
▶ 2:18:01Sen. Cassidy: A plan that senator wyden voted for when he was in the house of c1 now it is paying benefits with more retirees. Also pay some of the canadians have done. They have been able to address that.
▶ 2:18:26Sen. Cassidy: Will they be ok working with congress to fund solution such as this?
▶ 2:18:32Sec. Bessent: We will work on anything. We have to guarantee that benefits remain. >> in are planned the senior citizen does not pay more taxes. But we find a way to do that. I mentioned him because he is the ranking member lee committee.
▶ 2:19:04Sec. Bessent: We do not cut benefits. That is to criteria, I think. Hopefully we can get your support.
▶ 2:19:12Sec. Bessent: Thank you. >> I think my colleague. Next up is senator blackburn.
▶ 2:19:23Sen. Blackburn: I wish everyone on this panel would've seen your speech. On friday. I think it would've answered a lot of questions. It lays out your vision for where you think we can head economically.
▶ 2:19:53Sec. Bessent: The mainstream media is not serious people.
▶ 2:19:57Sen. Blackburn: There are a lot about perceptions floating around. I want to talk about the working families tax cuts. That is something we have all heard from. The people we represent have heard from so many. About this.
▶ 2:20:20Sen. Blackburn: Getting those bigger returns, having lower tax bills, that is something that has made a difference. In particular, of course, the enhanced deduction for seniors. That is a provision that I had pushed.
▶ 2:20:37Sen. Blackburn: Having that $6,000 enhanced deduction I think was taken by 35 million americans and I think nearly 70% of them had incomes of lower than a thousand dollars. Is that accurate? ?
▶ 2:20:56Sec. Bessent: 95% of the had incomes under $200,000.
▶ 2:21:04Sen. Blackburn: That is something that is putting money in their pocket. Of hard-working americans and seniors who have saved all of their lives to be able to retire.
▶ 2:21:14Sec. Bessent: I think it gives them great certainty. Great clarity. For folks who live on a fixed income.
▶ 2:21:28Sen. Blackburn: We certainly have a lot of positive feedback on that. We look forward to seeing that continue. I do want to talk with you about penny production that ended last year. We have a company in tennessee that makes pennies. You had talked about keeping those jobs.
▶ 2:21:56Sen. Blackburn: They are working on a zinc based nickel that would save the taxpayer millions of dollars a year. Because right now the nickel takes 13.3 cents to make. There is legislation moving forward that would allow treasury to use zinc for the nickel.
▶ 2:22:22Sen. Blackburn: The part I would like to know is if the leadership at the meant -- mint is making sure they are doing the technical work in anticipation of this legislation passing that would allow the use of zinc for the nickel?
▶ 2:22:41Sec. Bessent: They have began preparation on that. Making sure there is a smooth transition.
▶ 2:22:50Sen. Blackburn: Thank you. I also want to talk about that tax credit. I have talked with this issue. I have heard from a lot of our manufacturers in tennessee and they have continued to raise with me some misalignment that they see in this legislation.
▶ 2:23:19Sen. Blackburn: The way this tax credit is working, it does not allow manufacturers to do shop floor r&d. It does not allow them to deduct the expense of the products that they are using. We know that china is doing that.
▶ 2:23:48Sen. Blackburn: We have people who are trying to bring business back. They are doing this r&d work in their plants. I would hope that you can work on getting some clarity and providing uncertainty for our manufacturers. Be certain that these individuals can utilize that r&d tax credit. Will you do that?
▶ 2:24:16Sec. Bessent: I will be happy to work with you and your staff. At one level we have lost the reservoir of knowledge by not doing this. I did a fireside chat last night. I said the same thing. Somehow we separated r&d from the learning that goes on on the factory floor.
▶ 2:24:44Sec. Bessent: I think that is a big mistake because so much happens during the process in terms of that.
▶ 2:24:49Sen. Blackburn: Thank you for that. I appreciate your attention to it. I will submit for the record one question to you on partnership audits that needs some further attention. Thank you for being with us.
▶ 2:25:03Sec. Bessent: Good to see you.
▶ 2:25:08Sen. Welch: I heard your comments earlier when I was watching. I support opportunities helpful to vermont. I want to talk about what I've thought was a looming crisis that gets far too little attention in this congress and that is the national debt. I know you are familiar with this. I will just show the chart for others.
▶ 2:25:35Sen. Welch: The protection of the debt, in january 2025 it was $36.2 trillion. It is now $39.2 trillion. As you can see in this chart, the trajectory of this debt is going up and up and up.
▶ 2:25:55Sen. Welch: The cbo right now says that debt held by the public is 99% of the gross domestic product is scheduled to go up to 120%. We are now paying interests, as you know probably better than anyone.
▶ 2:26:20Sen. Welch: Taxpayer revenues are going to debt that exceeds our military budget. Obviously that means we cannot spend on other things that folks in my district need. The federal interest payments rose to 18.5% with all of our revenues. The cbo says that will go up to 25.8%. By 2036.
▶ 2:26:53Sen. Welch: We do not talk about it at all. It is not even a topic. Which is astonishing to me because it is such a threat. There are three ways to address that. One is we can cut spending. We can raise revenues. I don't want to talk about those today. There is one other where I think there should be consensus. We can collect the revenues that taxpayers owe.
▶ 2:27:21Sen. Welch: That is why I want to talk to a little bit about the staffing cuts that I understand have taken place at the irs which has reduced their capacity to collect revenues that are owed by taxpayers. In fiscal year 2027, the irs enforcement was cut by 18%.
▶ 2:27:50Sen. Welch: That is in addition to 26 percent revenue agents lost in 2035. I have a revenue chart here. This was prepared by the peterson foundation. I find them to be extremely credible. On debt issues. I don't know if you share my have any of that.
▶ 2:28:11Sec. Bessent: Not anymore. [laughter] I think they have lost their way.
▶ 2:28:17Sen. Welch: We will disagree on that. What this chart shows is that as sweet and increase the cutting of revenue agents, the loss of owed revenue, we're are not talking about increasing anyone's taxes. This could be $1.8 trillion.
▶ 2:28:46Sen. Welch: The obvious question here is why are we cutting the people who we need in the irs to do the audits to collect revenues that are due to the treasure.
▶ 2:28:58Sec. Bessent: Let's backtrack to your previous point. The peterson institute projected that we would grow 1.8% thus far in this administration. We have grown at 2.2%.
▶ 2:29:11Sen. Welch: Let me interrupt. You are not staying on the revenue. You would agree with me that if I may taxpayer and I/o money I should pay it.
▶ 2:29:28Sec. Bessent: I can tell you that more bodies does not equal better collections.
▶ 2:29:33Sen. Welch: So we just disagree.
▶ 2:29:35Sec. Bessent: Let me read you something. I think you would agree. The internal reporting system. All of these employees were hired, a whistleblower came out and said that they 25 year employee.
▶ 2:29:59Sen. Welch: I will have to interrupt because what I is running out.
▶ 2:30:03Sec. Bessent: I think the evidence will show you why it is a complete fallacy.
▶ 2:30:08Sen. Welch: Can I just get a little extra time. Thank you. I absolutely believe that the people who owe money should be paying that money. And we should have asserted enforcement the collective. Regardless of what the growth rate is. That is number one.
▶ 2:30:29Sen. Welch: Number two, we have withdrawn from that. They are using these low tax stage countries. By using the island. That is where they do their work. They cut their bill by $27 million by using cyprus. Many companies use malta.
▶ 2:31:02Sen. Welch: S&p global cut its tax bill by billions of dollars. Is that something we should tolerate?
▶ 2:31:11Sec. Bessent: No.
▶ 2:31:12Sen. Welch: Thank you.
▶ 2:31:14Sec. Bessent: Will you do something about it?
▶ 2:31:17Sec. Bessent: It is a complicated question. I am happy to do another phone call. I do want to send this report that shows that new agents were a disaster.
▶ 2:31:36Sen. Tillis: I have been a little bit critical of the advisors of the president. You're certainly not one of them. I appreciate the work you are doing. I love the fact that you show good judgment. Thank you for being here.
▶ 2:32:02Sen. Tillis: I do have one awkward question to ask you real quick and that I want to get to some of the trends and how you will work on them. Did you actually tell him you were going to punch him in the face?
▶ 2:32:16Sec. Bessent: I said I was going to take his ass.
▶ 2:32:21Sen. Tillis: I share the emotion.
▶ 2:32:24Sec. Bessent: That was last summer. Many teams have fights in the locker room.
▶ 2:32:32Sen. Tillis: Yes. I was curious. I'm sure they will dredge that up.
▶ 2:32:45Sec. Bessent: We had a very good exchange yesterday. We want to keep the momentum going.
▶ 2:32:51Sen. Tillis: He lost me when he went after jay powell. We will move on. I know back in 2020 you were trying to target that. That is a laudable goal. There is a lot of work we have to do. Now we are at 30 year low yields at a 19 hi. Even some of the interest expenses.
▶ 2:33:23Sen. Tillis: We are not trending in the right direction. What are we going to do? What would be your advice? What will congress do to focus on the main thing to get our deficit to gdp ratios to what economists are thinking are necessary?
▶ 2:33:38Sec. Bessent: This year we are holding the finance ministers meeting. Maybe you will join us. We have outlined to the industrial nations that we believe the most important factor for financial stability. It is a lack of growth worldwide.
▶ 2:34:12Sec. Bessent: The decision many countries have made. I think the most important thing we can do as I was trying to tell senator welch, the cbo projections are all at 1.8%. But we have grown at 2.6% thus far. That includes the democratic shutdown and the iranian conflict. The cbo is wrong. How can they project out?
▶ 2:34:39Sec. Bessent: I think growth can lead to spending.
▶ 2:34:44Sen. Tillis: I may submit a question for the record. I have to believe that global growth and U.S. growth, we are seeing great growth numbers but I think there is a lot of uncertainty out there and I have to believe that that is keeping some capital on the sidelines.
▶ 2:35:07Sen. Tillis: One of the areas where I think we have had some confusion, I asked ambassador greer last year. They did not work out. You are working on the refund process. How does that actually work? I know they have stood up a portal. Now they are appealing the decision. So people who were applying for it can no longer apply.
▶ 2:35:38Sen. Tillis: What is treasury's role in this?
▶ 2:35:39Sec. Bessent: We are just a dispersing agent.
▶ 2:35:45Sen. Tillis: The only other question I have going forward, how do we reconcile the increased budget requirements for the goal of reducing our deficit to gdp? Is it something we have to put on hiatus now? How do we talk and chew gum at the same time?
▶ 2:36:14Sen. Tillis: We had a massive increase in defense spending that I'm generally supportive of but we have no way to pay for it. That is one of the reasons a few years ago I was one of only nine people who voted against a trillion dollar veterans bill because it had no way to pay for it. How will we get these things important?
▶ 2:36:31Sec. Bessent: You met by children. I would hate to put them in debt. There are priorities because with the defense budget, if we do not have national security, I think that is linked to economic security. I would like to see something like that by the time the president leaves.
▶ 2:37:03Sec. Bessent: One of the things that is the result of the working families tax cap is the immediate expensing of equipment, factories, and r&d. What we are seeing there is this is not a giveaway. This is creating productive capacity.
▶ 2:37:23Sec. Bessent: The way to think about it now is that as we are not getting the tax revenue because a corporation or small business has immediately written that off , we are increasing productive capacity which I think is almost like a slingshot effect that we will start getting in the second or third or fourth year. >> thank you.
▶ 2:37:46Sen. Catntwell: I know it has been a long day because I've been in a long I want to express my concerns about the trump's settlement with the irs. Taxpayers need to know that the well-connected are not given a free pass.
▶ 2:38:12Sen. Catntwell: I would like to talk to you about our consultant highway trust fund. I would ask you where you see this landscape now with china. Having been very active in the chinese meetings and of this issue of trying to move on and get the chinese into a manufacturing purchase, specifically of aviation.
▶ 2:38:41Sen. Catntwell: That is something that the administration and you were personally involved in. I just hope that as we look at pushing china to make big purchases, I think it is kind of crazy that if they want to be successful, why not do what the emirates are doing in the middle east? What is china aired out become the big deliver of air transportation systems in the far east and do it with a fuel-efficient plane?
▶ 2:39:11Sen. Catntwell: What do you think the chances of getting us on track when the president comes here to have some success?
▶ 2:39:20Sec. Bessent: After some time, we have very good stability in the relationship. We do not want to decouple. But we need to the risk. There are many companies we need to bring back. Precursor medicines and chemicals.
▶ 2:39:48Sec. Bessent: It is unacceptable that we rely on china for many of those. Thus far we have seen a willingness by the chinese. They are very interested. They agreed to 200 airplanes during the visit. We will see if they commit to a larger number.
▶ 2:40:18Sec. Bessent: The other thing we are pushing for is for the chinese to open their economy. We have probably the most unbalanced economy in modern history. It is hurting their households to the benefit of their manufacturing sector. China runs a massive budget deficit.
▶ 2:40:46Sec. Bessent: If they move some industrial subsidies over to households which we brought up with chinese leadership during the visit, there will be much more demand latches for american industrial products but more american goods. We have formed a board of trade and we will be looking at noncritical industries and things we can trade with each other.
▶ 2:41:11Sen. Cantwell: How will that work? We both have very high end like aerospace. And a lot of seafood in the northwest. Trying to consume 45% of the world seafood. I guarantee you that market is not open wide enough for our products. How with the bird of trade help us with that?
▶ 2:41:36Sec. Bessent: That is exactly what it will do. You can pick a number. Like fireworks or halloween costumes. We do not want those. What are things they would like to buy from us?
▶ 2:42:02Sec. Bessent: Seafood, maybe energy, then we will both agree that basket on either side will have no tariffs.
▶ 2:42:12Sen. Cantwell: I think this is a particularly important market with a long-term relationship. I know the challenges that we face. In forcing them to open those markets. I think getting out of the tariff debate and into an open way to get more product slowly is very important. Thank you.
▶ 2:42:36Sen. Cantwell: I do want to emphasize site really and against the trump's settlement with the irs and I know you have oversight over that. Thank you. >> thank you. I have agreed to that. Why don't you begin? >> thank you. I have one question.
▶ 2:43:10Sen. Cantwell: I want to follow up in your answers about that contract. You said you did not know about the trump lawsuit in advance. I gather for you it was a coincidence.
▶ 2:43:25Sec. Bessent: That would be correct. >> you did not talk to anybody outside of treasury?
▶ 2:43:32Sec. Bessent: As I said, I had no knowledge. >> ok. I will make a brief closing statement. In respect to where we are because I think this is been a critically important meeting. What it has showed it is almost all of the big questions remain unanswered.
▶ 2:44:02Sec. Bessent: My view is we will keep digging into this. I know that I will. My view is that somebody broke the law. They were illegally involved in this.
▶ 2:44:36Sec. Bessent: It is against the law. They cannot settle those disputes. That is where we are. It is one or the other. Somebody broke the law. I want to get to the bottom of this.
▶ 2:45:04Sec. Bessent: We are wrapping up almost all of the big issues. No one else in america gets this immunity. We have to get to the bottom of this. And make sure it does not happen again.
▶ 2:45:21Sec. Bessent: We have never seen anyone and americans have their tax returns and all of their employees delete without an apology. Would you like to apologize today?
▶ 2:45:33Sen. Wyden: I was very much at the bottom to say it was critically important that that action be taken. I moved with my colleagues to work quickly.
▶ 2:45:48Sec. Bessent: He got off completely. >> with that what we will do is you made it in just under the wire. I will forgo my closing remarks to allow you to get your five minutes with the questioning. >> thank you. That is very kind of you. I know it has been a long morning.
▶ 2:46:16Sec. Bessent: I know you've answered these questions already. One of my favorite quotes from you is the table is set and it is time for the banquet. We say it is time to eat. I have been all over the state of kansas. Manufacturing is growing. There are new opportunities.
▶ 2:46:45Sec. Bessent: What I love about your background is you are a business person who is come to washington. What do you see happening with manufacturing?
▶ 2:46:54Sec. Bessent: We are having a manufacturing renaissance. We have created about 90,000 new construction jobs. Those are some type of manufacturing facilities. Boeing is expanding their facility. Those are construction jobs.
▶ 2:47:25Sec. Bessent: Those will be high-paying jobs. We are seeing that all over the country. Pharmaceutical companies. We saw john deere, the ceo started building a new factory in indiana. In north carolina. It is a real manufacturing renaissance. Much of it was because of the tax bill. I was in greater minneapolis visiting winnebago.
▶ 2:47:57Sec. Bessent: They told me because of the tax bill they had a decision on whether if they would start a battery research facility in florida. The full extension gave them the internal rate of return that they needed. So that is for jobs in the sunshine state. >> put on your farm are set for a second. You understand what that is our farmers back home.
▶ 2:48:27Sec. Bessent: It is waiting for treasury to do a little work on that. Maybe your staff could get us an update.
▶ 2:48:32Sec. Bessent: We would be glad to do that. >> I want to talk about childcare for a second. Under joe biden we saw costs go up. Inflation is cumulative. But our working family tax cuts bill did some incredible things for child care. All across the state of kansas I've seen people being able to invest in this.
▶ 2:49:02Sec. Bessent: Business is having an opportunity to expand. Can you speak a little bit about what your vision is in using that benefit?
▶ 2:49:07Sec. Bessent: That is a great benefit. The child's adduction. It is now permanent. I think we have seen that the best way to do this is to engage the private sector. >> exactly. I was just at the reagan library.
▶ 2:49:40Sec. Bessent: He spoke of a bright, shining city on a hill. The third quarter last year, kansas led the country in gdp growth. 6.5%. We never leave anything economically. I was try to figure out why this happened. Certainly the cattle markets are good. Farming income was up 80% and a lot of that was government related but part of that was the cattle industry.
▶ 2:50:12Sec. Bessent: We saw manchin in manufacturing. What would be the message you would give america that this economy, it really feels good to me right now. Things are not perfect. We have to work on the price of gas. We are still feeling the staying of inflation. But give me that message of hope.
▶ 2:50:35Sec. Bessent: The underlying economy extremely resilient. We've had tremendous job growth in the past few months. Nonfarm payrolls came out very strong today. We are seeing tracking surveys to very well. The underlying economy is very strong. On the other side of this iran conflict prices will come back down.
▶ 2:51:05Sec. Bessent: I think the economy will roar. >> thank you for sticking around. >> thank you. That includes all of the questioning. And all of the commentary. We appreciate you taking this time. You spent more than 2.5 hours with us today. Please extend that thanks to everyone at the treasury department.
▶ 2:51:37Sec. Bessent: With that, we are concluded. The deadline for submitting any questions for the record is 5:00 p.m. On wednesday, june 10. The finance committee stands adjourned. [captioning performed by the national captioning institute, which is responsible for its caption content and accuracy. Visit ncicap.org]