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tv   Bloomberg Markets European Close  Bloomberg  January 19, 2017 11:00am-12:01pm EST

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is an important part of the job. and there are many important parts of this job that i consider myself an expert on and there are certain parts of this job that, if confirmed, i will work diligently with this committee and others and there is obviously a significant staff. this is an important issue and as i've said, i am committed to be responsible in my position there. and make sure that i properly provide the support from the treasury department. and i would take my responsibility very seriously. tell you, without any specifics on a matter that is so important that you have direct responsibility over, i find it troubling that you won't discuss medicare. so let's go to terrorism finance. fighting isis and other terrorist groups. the treasury department plays a key role in fighting this battle. what would be your ideas on additional actions in strengthening how the department fights terror.
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steven mnuchin: let me first say that i strongly believe and understand that there are very important tools within the treasury department that can combat terrorism. of these tools, such as sanctions, are extremely effective and keep our armed services out of harm. so i am fully committed to the maximum amount of law to both in force the existing sanctions in a very strict way. and i will work with the president-elect as cc fit on additional sanctions and there are also other programs within the treasury that i believe are very effective in fighting terrorism. it is a very important part of the treasury. and i know that it has been done very effectively. >> we all agree it is important. what we are trying to do is assess your qualifications. and you are not willing to talk
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a medicare. you are not going to talk about specifics on terror. let me take one more crack on qualifications. this is something else. or you wouldsector have responsibilities on when a foreign investor makes an investment in the united states in a way that has national security applications. if a foreign investor with ties to a foreign government invests in president trump's, should the committee on foreign investment automatically and with close scrutiny examine the transaction? let me say yes, i think that would be appropriate. let me go back to the other question because i apologize if i didn't answer the specifics on your terrorism. are searching for any specifics in order to be able to assess your qualifications. senator, ihin: well, believe there are important sanctions as it relates to the sanctions in iran and other countries. i would absolutely enforce those and i would encourage the
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president to use additional sanctions when appropriate. i also understand that there are certain classified programs that i will be part of with the nsa and will also use that and work with the national security group to the maximum amount that is available by law. >> we didn't hear what he would do to fight isis. we didn't get specifics on medicare. the currentbout question with respect to the committee on foreign investment. you wered you do if dealing with president trumps business? steven mnuchin: i would deal with president trumps business no different than i would deal with any business that comes before the committee. and i would take my role as chair of that committee very seriously and significantly. i think it is an important issue. i think that perhaps previous secretaries have not enforced some of these things.
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necessarily, as much as they should have in protecting the american workers and people and technology. i think this is one of the most important jobs that i would have as secretary. >> the president is not like everybody else. he is the commander-in-chief and foreign government involvement in a business could compromise national security. so i will reflect on that answer as well. can i pursue one other additional question. >> go ahead. >> you ran a hedge fund in 2004 and i've been trying to get my bankaround the web of accounts and companies that were in the cayman islands. how many employees did you have? steven mnuchin: we didn't have any employees in anguilla. we didn't have any customers that resided in anguilla. >> did you have an office there? haven mnuchin: we did not
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an office ourselves there. >> so you just had a post office? hopefully other senators will defer times i can answer this for you because this is an important issue. >> i think he should have a chance to answer the question. that is a legitimate question you asked. go ahead and answer it. steven mnuchin: icon alike all other hedge funds and many private equity funds set up offshore entities that are primarily intended to accommodate nonprofits with intentions that want to invest in the offshore entities. as it relates to my own tax situation, these entities were taxed as u.s. corporations or u.s. partnerships and in no way did i use them, whatsoever, to avoid any u.s. taxes. they were merely as an accommodation to pension funds and nonprofit institutions.
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and a small number of foreign investors. as treasury secretary, if i am confirmed, i would look at these rules and make sure. i think you did a good job in stopping one of the abuses of offshore deferred fees. but i would diligently look at these things. and i can assure you, i paid all my taxes as was required. >> we will come back to this ,uestion of offshore deals lockers. again, i'm troubled by this question of how you will on rig the system if you have a record of taking advantage of tax shelters that in effect have a 0% tax rate. thank you. you can see,n, as you are going to get questions what was legal at the time is still being criticized. but i'm sure you have heard allegations of "predatory
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lending" during the housing crisis. and an investor group that you had reformed in america failed institutions responsible for many low and no doc mortgage loans including one west. which was described here. which offered modifications above and beyond what other institutions were doing to more than 100,000 borrowers. at least that is the way it looks to me. meanwhile, during the foreclosure turmoil, the obama administration officials set up a national loan modification program called 8:00 a.m. p. that, many members of congress men on both sides of the aisle have repeatedly fell far short of the goals and have had significant design flaws. in testimony before congress in 2011, the special inspector identifiedl borofsky
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that there have been "countless published reports of who end up worse off or who have engaged in the civil effort to obtain the sustainable relief that the program promised." failed trial modifications often leave borrowers with more principal outstanding on their loans with deflated savings and a worse credit savings. using provocative language that we have heard supporting your actions, i guess you could say that the treasury secretary was a predatory loan modifier. using that type of logic. now mr. mnuchin. did one west have any interference with the program and was that program successful in preventing foreclosures on struggling american homeowners
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or could more have been done by the administration? thank you for: that question. it is a very important issue. when we did see the deal, we to continue the modification program. was after that that the obama administration came up with -- and we had no obligation. we felt it was the appropriate thing to go into the u.s. treasury program as were the other major banks. so we voluntarily went into the program. the loan modification program was a very prescriptive program, including us having to follow net present value calculations that were discovered by the treasury models to see which was atter, either foreclosing on
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home or providing a loan modification. and to the extent that the net present value was higher on foreclosing, we unfortunately had to follow the rules or we would have been severely penalized if we had not proceeded with foreclosures. >> these were not your rules? mr. mnuchin: no, these were driven by the mnuchin -- these were driven by the obama administration. >> let me ask one more question. there is an agreement that the tax has become more, located. when people get their tax liability incorrectly calculated are commonplace, reducing sentences, and creating an ever greater tax gap and the difference between what is owed it is clearpaid, that there is a major problem and something needs to be done. you have talked about your desire to simplify the tax code.
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thank you. i'm glad we're talking about that because i very much agree with you. so my question to you is, how do you address this problem? do you have any suggestions for how to make the revenue code less complex? or keep it from getting more complicated? would you recommend a moratorium on tax legislation or registration or should it be to raise revenue for the government and stop trying to achieve other social or societal goals? i agree withn: you, completely. one of the things -- it has been a great honor to travel with the president-elect. i have been the chief architecture of his economic plans. we believe the critical issue is creating economic growth and passing tax reform is a major component of that. the tax reform plan, we believe that taxable vocation and fewer deductions are critical.
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you mentioned about the tax gap and that is something i have been studying and it is something i'm quite interested in. particularly surprised when looking at the irs numbers, that the irs headcount has gone down dramatically, almost 30% over the last number of years. i don't think there is any other government agency that has gone down already percent. and especially an agency that collects revenues, this is something i'm concerned about. perhaps, the irs started with way too many people. thei am concerned about staffing of the irs. it is an important part of fixing the tax gap. and i'm also concerned about the lack of first rate technology at the irs. the issue of making sure that we protect the american public's privacy when they give information to the irs, cyber alsoity around that, and
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customer service. for the hard-working americans who are paying taxes. you are next. >> like i told you when we met in the office, i don't have any gotcha questions or would let you know. let me go along the lines of the first statement i want to make. i don't expect you to answer unless you have some misunderstanding of our position discussed in our office. progrowth tax reform will be a top priority for you. i agree and look forward to working with you and donald trump on that point. as part of any tax reform proposal, it will be important that adequate transition rules are included to provide transition smooth transitions for businesses that may be negatively impacted. our meeting,ed in
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congress has already effectively put in place transition rules -- some alternative veteran including the production tax credit, it is schedule to phase out over the next few years, ending in 2020. based on our conversation i believe we are in agreement that you would support the current phase out as part of any tax reform proposal. question two, i have been a strong proponent of the irs private debt collection program, as has senator schumer. in 2015, congress updated and made mandatory the irs private debt collection program. this program is designed to chip away at the tax gap by requiring the irs to contract with private debt collectors. these are the tax debts not being worked by the irs. and absent this program would
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likely never be collected. adding up to $187 million in 2017. that $187 million, the treasury department has provided debt collectors to provide a net of $8 billion. this is not due to the lack of inactive tax debt available for the irs to assume -- to assign. according to the government accountability office report, the irs has over $130 billion of outstanding debt on its books. so hamstringing this program by refusing to release an active debt for the program ought to be considered unacceptable by anybody. can you give me assurances that the department of treasury, under your leadership, will work to implement the program to the
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full extent of authorized law and bring in this tax money that is not being collected? steven mnuchin: yes. thank you for having spent time with me. i appreciate the opportunity to speak to you about a lot of important issues. on these issues, i absolutely agree with you that we do need to have phase out rulings will we change things and i support the phaseout of that as you suggested. and on the irs, i think that most aspects of taxes should be handled by the irs but as you described, to the extent that we have 100 plus billion dollars of receivables that are just sitting there and that we can collect tens of millions of dollars are hundreds of millions of dollars for the american public, particularly in an environment where we are looking for money for so many programs, i agree with you, it seems like a theory obvious thing to do. >> this will be my last question. in 2006 i was successful in enacting legislation or to
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the irs whistleblower program. the program has been one of the most effective programs in addressing tax evasion, leading to the recovery of more than three point 4 million -- $3.4 billion that would be last to taxes. there is ongoing concern with poor communication with whistleblowers who wait in the dark years with no feedback from the bureaucracy. another concern is that the irs has chosen to interpret the whistleblower law ordinarily to the depths of was the depth of whistleblowers in several instances. her example, the irs has interpreted the terms collected proceeds, which is a base for determining the amount of an award to exclude criminal penalties and other proceeds such as penalties assessed for
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undisclosed foreign bank accounts. two questions and i will say them both. should you be confirmed, can i count on you to be supportive of the whistleblower program and work to ensure its success? would you be willing to review the irs administration program including it's a very narrow interpretation of the words collected proceeds? you have my assurance. and let me further go on to say that the majority of americans voluntarily file their tax returns honestly. but we are all aware that there is tax fraud. and there is tax evasion, as you've said. and we need to be diligent. and i believe he was a blower laws are very important, a very important part of that. i will work hard on that. >> thank you. >> thank you. welcome.
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congratulations on your nomination. welcome to your beautiful family as well. i want to follow up on information we just received in addition to your recent financial disclosures -- i haven't had a lot of time to take a look at that, we received it last night. you failed to include your position as the director of the cayman islands corporation as well as manager chairman or director of seven additional corporations and holding companies, nearly $100 million in real estate, as well as a number of other things, artwork held by your children. so a number of things. as treasury secretary, and as we go into tax reform, would you support closing tax loopholes in the u.s. tax code that is extremely wealthy people use,
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such as yourself, to avoid paying taxes? we've heard about the cayman islands for years and the buildings that have had thousands of companies that have used them as addresses. would you be willing to close the loopholes? steven mnuchin: let me comment. i appreciated the opportunity to meet with you and i've traveled to your state many times and have great admiration for your state. the president-elect had a very significant economic speech in veryit and we have been focused on time in your state so i appreciate everything that you have done there. -- i realized on last night you did get a memo on changes to my senate questionnaire. thank you for giving me the opportunity to comment on that. i think, as you all can appreciate, filling up these government forms is quite, located. there were many things i expected in this job, including
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having to sell everything. of the amount of paperwork and filling out the forms, even for me, having experience in business was quite a job. in effort to get the committee information early, we submitted a preliminary questionnaire prior to us having the 278 form finished and prior to signing to the agreement with the ethics office. so let me say, any oversight was unintentional. we were understanding that it completed ono be that. we worked tirelessly with the committee staff.
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they works really thorough and i appreciate their work and we delivered over 5000 pages. i can assure you they read all of the page is because when i had the opportunity to meet with the staff with my lawyers and accountants, we had very specific questions. i appreciate the additional information. my question goes to what you are actually disclosing. particularly, the cayman islands. did you use the cayman island corporations towards paying taxes? would you support closing tax loopholes that wealthy people have consistently used in the cayman islands to avoid paying taxes? steven mnuchin: let me be clear. i did not use a cayman island and deceit in any way to avoid taxes for myself. i paid taxes on all of that income.
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there was no benefit to me. it was set up to benefit nonprofit funds that want to invest through offshore. >> so you helped others avoid paying taxes? steven mnuchin: again, they followed the law. i am committed to tax symbols occasion. i think it makes no sense that we would in courage hedge fund managers to set up entities in the cayman islands or anywhere else, where i didn't have physical people. set upre people who offshore businesses and cut their people offshore and you have heard of inversions and those types of things. they are perfectly legal and they hurt the american workers. in the hedge fund world, these are set up to make accountants rich. and i would love to work with the irs to close these tax
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issues that make no sense and make sure that we are collecting the proper amount of taxes. >> see you support closing those loopholes? >> i support changing the tax laws to make sure they are simpler and more effective, yes. >> thank you. mr. mnuchin, i appreciate you being here and your willingness to go through this and to serve the american people. visiony need the kind of that trump has enunciated for the country. and that you have committed to help achieve. i impair of raising you here but i believe you said in essence that we have a regulatory excess in the united states in many instances. and is inhibiting lending inhibiting capital formation, two very important things that are critical to a progrowth
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economy. could you elaborate on that? sure. let me first say that i absolutely believe in proper regulation. and before i had the opportunity to put in a bid for the bank, had to be issued a charger and they worked very closely with the ots at the time, and i was a big fan of you merging the ots with the occ and getting rid of another revelatory agency. but at the time i worked with the ots and the fed and the regulators explained to me at the time, and i told them that i understood, the responsibility of being giving a banking charger. i took that very seriously. i enjoyed working with very smart regulators and i have tremendous respect for them. of thetter of fact, one few things the wall street journal actually wrote nice about me, they made a comment that i told everybody we had to
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ourt the regulators like best clients which i do believe. the regulators and relationships with them, nothing was more important, given the trust they had put in us. having said that, i witnessed ,irsthand multiple regulators the occ and the fdic and the consumer protection bureau and the federal reserve and in certain cases there was overlapping regulation, my biggest concern, and i fully support regulation for banks with fdic insurance, the my biggest concern is that this regulation is killing community banks. we are losing the community banking business. we are losing the ability for small and medium-sized banks to to small andns medium-sized businesses in the community where they understand the credit risks better than anybody else. that we all
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appreciate the engine of growth is with small and medium-sized businesses. and in my role at working with the different regulatory's and regulators, i would make sure that we did what we could to have proper regulation but eliminate overlap as well as making sure that the banks are lending to small and medium-size businesses so we don't end up with a world we only have four egg banks. >> you went right into my next question. because it is closely related. as you know, as the secretary of you will have a close and personal role with cap stock. and it works closely with some such a joy mandates and ignoring others. other ones that the dodd-frank requires it to do is -- and this is the statutory -- advise
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congress and make recommendations in such areas that will enhance the integrity and efficiency competitiveness .nd stability today, i'm not aware of it fulfilling the role. you are watching donald trump taking off for one of the last times in the trump force one. that is the plane that is his plane as he had sue washington, d.c.. but reports say he is coming back tonight before heading out again for an inauguration on friday. mark: let's break away from the steven mnuchin hearing and get to the world economic forum in doubt most where john mikel's weight and francine lacqua are standing by with a market moving interview. this is the interview of the day. may, theto theresa
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prime minister of the u.k., talking about finance and it was a lengthy interview. the main take away is that she was more friendly to the markets. >> most of us expected her to say that finance doesn't matter, i value other things. this time, she was very straightforward. this is saying that what matters to me. and i spent that has a lot to do with the people here who are possibly telling her they were likely to move. francine: does this mean that she will be more nuanced? in davos, will she speak to newsmakers and business, she changes tone? john: possibly. she would be a first politician. but in this case, it is real jobs. all of the people we have spoken to, some on television and many more in the background, they have all said the same thing.
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they don't really value financial services and she is trying to roll back on that last bit. here is the u.k. prime minister, theresa may. i have hadmake: positive meetings with banks here and ceos from tech companies and others and the message i brought here is that we want to build a truly global britain. in britain that is an advocate for free markets around the world. i want to negotiate a good free trade agreement with the european union. when we come out, i want the best possible access for trade, trading and operating within the european single market. both goods and services. i value financial services.
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i believe global britain will do just that. john: and you don't think they serve a bit more value to the economy? theresa may: initial services are of huge value. it is important. to thelook ahead, britain of the future and a global britain and britain outside the european union, i want to ensure we have a good relationship and partnership with the eu so we can have a free trade agreement, which i believe will work for the european union. that stability for jobs and prosperity in the u.k.. do you think a customs union is enough to keep that? theresa may: what i want is to make this as frictionless as possible. i want for the u.k. to be able to negotiate free-trade agreements around the world.
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australia today has reiterated its commitment to a free trade deal with the united kingdom. we have countries around the world who want to talk to us about this. -- we haveour already started talking about the free trade agreement. have a truly global britain bringing prosperity and jobs to the u.k.. do you think finance was too dominant when you arrived? two reason make: to have the events of 2008, we have rebalancing in the u.k. and elsewhere, in terms of financial services. other sectors are also of value to us in the u.k.. but what i want to see is a free-trade agreement with the european union that enables us to have a strong, economic partnership with countries in the eu that i believe will not just benefit the u.k. but will be at the benefit of the european union as well. john: there is a rule coming in
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for the union as a whole about charging 1000 pounds or letting something on foreign workers working inside the european union. is that the sort of idea that you might do in britain? british firm hired european union workers, they would have to pay a levy or something along that line? may: what people voted for in getting out of the european union, the voting for ensuring that it was the u.k. government that would take decisions about immigration from the eu once we are outside of the eu. we are working on what that system would look like. and there are a number of ways in which we could use that control. what we want is for the decision to be made by the u.k. government and that is what we will be doing. -- therewhat extent was an element you have to interpret as a mandate that it is something to do with the global elite and that there is a necessity about redirecting the
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british economy in a more broadway? theresa may: for those who believe that free trade and free markets and globalization, it is important that we recognize that for some people, they feel they are left as passing by and they are just getting by, rather than getting on. and it is important, and so i have said this from the very beginning, that i want a country and economy that works for everyone. one of the things we will be doing in the u.k. is introducing a modern industrial strategy. that is about ensuring that businesses can grow and are encouraged to grow in the u.k. and it also ensures the benefits of prosperity being available across the whole country. that we see economic growth and prosperity for everyone. john: one part of that which you alluded to in your leadership speech was the idea of restricting the takeovers in the name of the national interest. i think you mentioned
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pharmaceuticals, an area where you would want to stop foreigners for coming in? make: i have reiterated that here. it is the importance of companies actually recognizing the responsibilities and obligations that they have to the communities in which they are operating. particularg at the issue of investment in critical national infrastructure in the u.k. and ensuring that we can sharpen up and increase our ability to look at national security issues when we look at that. john: so there might be a national interest test when it comes to foreigners coming into british companies? make: we are looking specifically at questions of national infrastructure and questions of national security. but in this area, as other areas, we will be publishing proposals in due course. because we want to hear from businesses, we want their reaction to the proposals we
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have. speech,u said, in your that he wanted to intervene in dysfunctional markets. i wondered what would be an example of a dysfunctional market and what do you want to do in it? two reason make: i want to show that the government has a role to play. and what is important, and the reason for doing this is that because i believe if we don't do something about it, if we don't show that everybody plays by the same rules, that particular concern that people have, then andtrust in business globalization and free markets and free trade will erode. in the lower income group, we know that trust is down. and i think it is important for us to reestablish that trust. part of that is people feeling not just that markets are working properly but also feeling that everyone is playing by the same rules. are there any particular
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businesses or markets that you mean by that? theresa may: we are looking at how markets are operating in the u.k.. what is behind this is that it is ensuring that people can feel they have confidence, confidence in markets and business. i think that is important for all of us. those of us who support free trade, it is an important part of growth. those of us who believe that enterprise is the engine of prosperity, we need to ensure that people have trust in it. john: you don't see the conflict of interest in being free trade on one hand but then wanting to intervene, do you not see a conflict of interest? theresa may: what i've talked about is the national security aspect. i don't see a contradiction between saying that we want to trade around the world and make sure that markets are working properly. i think that is what gives people the confidence in
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globalization, which sadly has been eroding. gone down bynd has about 1/5 and so far, you seem to be fairly relaxed about it, if i can put it that way. i wonder, is there a level, when it goes to parity with the dollar, where you begin to worry about the pound? theresa may: we have seen different movements in the pound. and what we have also seen through other economic data is the strength of the u.k. economy. lastoint was made that year we were the fastest-growing economy and we have seen figures which showed unemployment coming down once again. so we do see a fundamental strength in the u.k. economy. and i believe that is a good strikes and it is an economy that people want to invest in. major companies like google and facebook make investments, softbank taking over in the u.k., significant investments in the u.k..
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john: a cheap currency was the incentive for some of those things and i worry about what points that becomes a phone or ability. theresa may: i think what people will look at is the fundamental strength of our economy and the opportunities that lie. this is an important part of the industrial strategy. looking at the economy for the future. looking at how we can ensure the environment in the u.k. is the right environment and best environment to do business. john: another complaint from here is the rest of europe. in the wayt reacted that some investors might want. they haven't tried to go through some of the structural reforms. do you think there is an element that the eurozone needs to move as well? two reason make: when i was talking about our objectives at the u.k. for brexit and the negotiations as part of the eu, thought it was important that the remaining states looked at the brexit vote
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and look to see if there were lessons for them from that vote. i think it is important that people feel they have confidence in the institutions they are dealing with. and that the institution is making decisions for them. john: you have put forward this version of britain which is free trading, this new version. i look across the atlantic and i see donald trump, who on the face of it takes a protectionist attitude towards trade. what do you say to him on that? theresa may: if we look around the world generally there is a question about free trade. it has been questioned and it goes back to what i was saying earlier about the people. sometimes they feel that globalization has been negative for them and it has left them behind. for is why it is important us to give that message and show responsible behavior that government is taking the right view to ensure the company -- ensure that the economy works for everyone. and to show people the value of free trade.
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because trading around the world is enterprise. it is the energy of our economy. john: do you think people blame globalization when technology costs the many more jobs? theresa may: it is interesting when you look at technology because technology is changing. technology often creates jobs. it creates jobs in areas that are unexpected. so it isn't quite a zero sum game. i think what people feel, very often, is that sometimes they see people playing by a different set of rules, sometimes there are some companies where the behavior of individuals within them suggest to the public that actually, there is one set of rules for those people and another set for ordinary and hard-working families. i want to show that people are paying by the same rules and that together, we can grow and develop the prosperity that will be good for everyone. speakingas theresa may
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with us earlier here today. quickly, let's check on the markets. this is a picture of the pound. this is the ftse 500. what theresa may was trying to do was pitch business for it the ceos that in the last 72 hours have told bloomberg that if it is a difficult brexit, a clean break that, they may try to pack their bags. you can see the pound-dollar there. to ouret straight executive editor for international government. this was a great interview because we had a little bit of time to really ask her how she sees the future. if you are a businessman and you are there watching bloomberg tv, what you take out of the interview? >> certainly, you look at the comments from banks and you can take away what she thinks, she is trying to be -- i think this is the warmest word she has said
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about the banking sector since her time as prime minister. these words to put against the skepticism we have heard from bankers on the record back in conversations. thanks in london, london-based are a making follow-up plans to move its restructuring people out of london. so i think she is trying to project a message to britain that perhaps they don't need to be as scared as some have suggested they are but bankers say the devils are the details and they're not seeing that. >> we need to remind our global audience that it isn't just jobs that may move but industries -- 60 billion pounds to the u.k. economy. >> that's right. every pressure on that. and she will say of course, we value them and has great importance with the financial services sector, but again, the refrain that you hear again and
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again for the bankers is that what is behind the scenes is not getting that much traction and not that much access to downing street. in the first few months they tried very hard to push their views and agenda but again, they didn't really get a sympathetic hearing. so i think bankers look at this and say, this is great language and it is positive that we need to make our plans to get from where we said, it will be a hard brexit. francine: how much do we know, what she said was that we value the contribution of financial services. she could have been more explicit in saying, i will try to fight for you. >> that she is a politician who likes to keep her cards close to her chest. it is an important point to make that the brexit hasn't even started yet. they haven't figured out how to trigger article 50 itself. possibly in all negotiating position. we don't even know where her red services,in financial
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saying maybe it isn't as much of a priority as much of a priority is immigration. so we will have to wait and see. francine: she seems to be speaking to a timetable when she will trigger article 50. >> yes, the prediction is that it will be at the end of march. she will deliver a speech in it is a comprehensive laying out of the strategy. if the to bet the notion that it could somehow be delayed. so end of march could be the next key date. francine: i landed back to you in new york. we have more interviews coming up. vonnie: thank you for that. micklethwaitjohn forebrain that interview with theresa may. the incomingn,
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treasury secretary, if he is confirmed, is giving testimony to the senate finance committee. you can seeinues, there are many questions on hedge funds and files offshore and the use of entities by his hedge fund. we also have community banks. he says he supports rules but he wants to look at that. he says vocal rules do not the where trading operations have fdic insured entities attached to them. and we are heading right back into the hearing now. good faith,in, in submitted answers to community questionnaires to materials that were modified. -- file is not complete and my democratic colleagues, the disclosures now include
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financial information that is usually kept confidential. such as the value of personal residences. the committee appreciates his efforts to move through the complicated request for information on what is, by any reasonable mentor, and exhaustive process. but let's be fair. >> just so we clear. the bipartisan staff called out the offshore investments of both democrats and republicans to secretary lew and others. understood, that is the reason that people even knew that mr. mnuchin hadn't filled these forms out properly. we did it because the american people deserve to know about his offshore investments, even though they hadn't been originally disclosed fully. our track record has in bipartisan and we have called out those democrats and
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republicans as i mentioned. >> let's be fair about it. >> thank you. tonk you for being willing serve and go through this process. i want to thank you for meeting with me in my office and going through many of the accounting functions and initiatives that you will be managing, i don't ask those in these kinds of meetings, because i've noticed it puts the audience to sleep. they are very important and i was impressed with your answers. i'm impressed with your private sector experience. i've always said that every business looks really simple unless you are the one who has to make the decisions. and how far ahead you have to make decisions. and how you find employees and train employees and how you meet regulations. well, you've actually worked with the rules. you have actually been forced to
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learn some things that are going to be essential to your job. and it is a pretty unique situation. this is the biggest business in the world. we don't even make decisions timely. we are still working on last october 1 spending bill. and there a lot of things around here that have to change and some of them, you will be in a position to do that. and i have been impressed with the knowledge you have shown with this committee on different things that most of us have never had experience with. very impressive. will cover a couple of specific things here because i think the internal revenue service has often strayed from its core function of responsible and efficient revenue collection. i hope the trump administration will make sure that the internal revenue service stays on track with this purpose and improve the recent record on how it
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communicates with taxpayers and practitioners. the will have been able to get answers. but something more disturbing to me is that in recent years, the irs has inserted flyers with the tax refund check and those flyers, one of them was produced by the consumer financial protection bureau, outside of our oversight, and soliciting cases from taxpayers about their money. appropriate for an independent organization or any other organization to solicit information from taxpayers, nor is it appropriate for the irs to help facilitate this. as a treasury secretary, would you stop this kind of activity? you.n mnuchin: thank and again, thank you for taking the time to meet with me and thank you for your long-standing service to our country. and yes, absolutely would work
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with you on that. makes sensek it that the irs is doing that. i want to understand what the reasoning is but it seems to make no sense to me. and as i've said to you, i think is around big issues the irs with technology. and i would use my expertise and technology to ensure that we bring the irs up to date. andthat is a function of -- her stand old email systems, old privacy systems, we absolutely need to make sure that in this world of cyber security being such a big issue, we need to protect american taxpayer information. and there should be simple ways that the irs can interact with the american taxpayer. good service in the retail online business, there's no reason why we can't use that same type of technology for taxpayers to communicate and
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get their information securely with the irs. so i look for to working with you and your office on that. interject, you mean you will help us modernize the irs? >> it would be one of my great priorities. >> that'll be a wonderful thing. >> i have that as a bipartisan issue that we can agree on. >> in 2012 a introduced the united states job creation and international tax reform act which would help fix our tax code and promote u.s. economic and job growth. and that bill would help to right the ship by pulling out rules into the 21st century and making them more certain so that u.s. companies are not at a competitive disadvantage with companies. it would give american companies incentives to create jobs in the united states. so that they can win globally.
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i would encourage u.s. companies to develop and keep rights to their ideas and inventions in the united states, rather than shipping them offshore. do you agree that our current international tax system is u.s.ted in places of companies at a disadvantage with their counterparts and will work with me on international tax reform? steven mnuchin: i couldn't agree with you more. i think the fact that we have companies like apple that left hundreds of dollars offshore because of the differential in tax price and they are being penalized to bring back one of the things -- we all agree on and i have talked to the president-elect and he believes we can bring trillions of dollars back onshore so that the money is invested in american businesses ending creating jobs. and i absolutely look forward to working with you and your office on tax reform, bringing down business rates for big businesses and small businesses and making american business the
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most competitive in the world. so that we are not shipping jobs overseas and money overseas. >> thank you. i have some questions about debt and how we will handle that. but again, that gets into the numbers so i will submit that. >> welcome. recovering governor from delaware. as governortime now, i speak a lot about how to create a nurturing environment for job creation and preservation. i will talk about that in just a moment. but before i do, i think my colleagues have mentioned tax havens. you mentioned irs. several times in the past couple of years, -- has that right where you sit, the commissioner of the irs, a vision ocean that was selected to serve for five years. i think he maybe has one more year. he is in his 70's.
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he took this job because he was asked to do this for his country. one of the finest public servants i know. there was an attempt to impeach him that was ludicrous. and he has said to as many times -- we give the irs less money than they need as they don't have the people they need and they don't have the technology that they need. for every dollar we invest we get at least four dollars back. sometimes as much as $10. this isn't so much a message for you, i think you've got it. -- ihe issue is for people was encouraged by your answer saying that. -- quickly, your take on steven mnuchin: real quick. ok. this is a consultative issue. yes. ok. thatiggest issue i have is
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i don't believe it should be funded out of profits from the federal reserve. i think it should be funded out of an appropriation process. good, thank you very much. when i think of the environment mentioned earlier about job creation. there are a lot of components to that. among them are funding research. making sure we are doing a good job protecting intellectual property. they come in since and regulation. affordable health care. finding ways to get that with a little bit less money. we have had people suggest to us is aone of the components substantial investment in infrastructure. as just a for a number of years that we use an approach we've taken four years, and that is the people and businesses that use the transportation system pay for them. i think that makes sense. there are other ideas as well. out how we love a
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vehicle is traveling. there are different motives to that. but there is an interest in the incoming administration with investment. to there is another time talk about that. the ways to grow gdp is to export. do a better job of exporting products and getting into other markets. the transpacific print outnership proposed to take a lot of barriers overseas and enable us to have access to the markets. and also renegotiate nafta. that to me seems like a pretty good deal. i understand there is interest renegotiating nafta. we did that. your thoughts on trade policies, especially the tpp? steven mnuchin: first of all, thank you. you have raised a bunch of very important issues. >> ask you to just go to that
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one issue, if you will. it isn't a trick question. steven mnuchin: i wrote down five that i want to comment on. trade agreements, as you know, the president-elect is very much interested in free and fair trade. and as you commented, this isn't about limiting imports. it is about growing to be as much as we can be. also commenting on intellectual property -- one of the biggest issues with that is that american intellectual property is not being kept and is being taken. in foreign countries. you mentioned nafta, the president-elect is interested in renegotiating nafta so that we can keep more jobs here. as you know, he has picked up the phone and called many ceos. less time a president or president-elect did that. i look for to working with you in your office. you have raised important issues.
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infrastructure, at the appropriate time, i'm happy to comment on infrastructure. >> thank you. one last quick question. comrades of immigration reform. one of the things we have learned is that -- smart interceptor investments. and also, comprehensive immigration reform. we've advised the business community for years to do this. reform -- igration steven mnuchin: i think immigration reform is important to the president-elect. it isn't completely in my lane. he looks for it to working with the house and senate on the important issue there. thoseyou don't share views, i want to say thank you for mentioning them. >> thank you for being willing to serve your country. we appreciate it very much. go on the irs.
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you do have allies on both sides. there are good, professional people who work there, under very difficult circumstances. i understand trump is calling on a freeze. i'm not sure how that coincides with you or desire to make sure we have adequate personnel at the irs but i assume you will have an opportunity to talk to the president and steven mnuchin: i can ensure you that the president-elect understands the concept of making money. that is a very quick conversation for donald trump. sen. cardin: i want to follow up on senator wyden's point on a couple of issues. i'm the ranking democrat on the senate foreign relations committee. i want to deal with the sanctions for one moment. i heard you in regards to enforcing the sanctions


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