tv Politics and Public Policy Today CSPAN April 1, 2016 5:00pm-7:01pm EDT
from the previous day. you testified to the same thing that says we stress that no decision regarding what to do in a situation was made during the recent debt limit impasses, i will leave it to others to speak to the truthfulness of that statement and the truthfulness of what you have said to this committee. it's not what i want to focus on today. i want to focus on the next piece of the puzzle. >> congressman, if i might -- >> i will, but and i'll give other folks a chance, i'm trying not to take the -- >> when somebody questions the truthfulness of a statement i think i'm permitted an opportunity to respond. >> it's not what i want to talk about. >> you've mischaracterized what i said. >> in fairness -- >> order, mr. chairman. >> the gentlelady will state her point of order. >> the clerk will stop the clock. >> thank you. >> i have a point of order that the committee is not exercising proper decorum. >> may i speak to the point of order, mr. chairman?
>> mr. chairman, if i may, when it is implied that the treasurer is not being truthful, he should be given an opportunity to respond to that. it should not be left, saying i have accused you of not being truthful, but i want to move on and i would say if we are to comply with proper decorum, you would allow the treasurer to respond to what has been said as his being untruthful. >> may i speak to the point? >> any other member wish to be heard on the point of order? gentleman from south carolina. >> i've already indicated to the witness that i intend to leave him time at the end of my five minutes to respond. i do intend to do that. i would like to get through my presentation first and to give him the opportunity to respond to all of my points. in addition, no one is stopping him from receiving time from the opposition, the other side, the other party to speak to my points, which we regularly do in this committee. >> perhaps, if no other member
wishes to be heard. i would like to ask unanimous consent that the secretary be given 30 seconds in which to address the issue that he wanted to address. and then we will go back to the gentleman from south carolina. if so would the gentlelady withdraw her point of -- >> mr. chairman, i appreciate your offer, i hardly think 30 seconds is sufficient. if the chairman would reconsider the amount of time to be in compliance with decorum, i certainly would agree to that. i hardly think 30 seconds is sufficient. >> mr. secretary, i will simply by unanimous consent yield you as much reasonable time, as you may consume. and the, if the gentlelady cares to withdraw and we will give the secretary a moment to address the issue that was raised by the
gentleman from south carolina. >> thank you, mr. chairman. i withdraw. >> thank you, mr. chairman. and i'm from new york, so i talk fast. all i wanted to say is when i testified on a number of occasions, i stated what was correct then and is correct now. the decision has never been made by the only people who can make the decision, that's the president of the united states on the advice of the treasury secretary, what to do. that decision was not made. i can't tell what you different officials and different organizations said to each other. but i can tell you the decision wasn't made. and we should never have to make a decision about how the u.s. government defaults. which is what happens if congress fails to raise the debt limit. i don't think defaulting on payments to veterans is any better than defaulting on payments to foreign bond holders. >> think we're getting a little far afield of the question now, but thank you, mr. secretary. now we will go back to the gentleman from south carolina. >> i thank the chairman. let's get to the question that i wanted to ask, mr. lew, which goes to the next slide. which is why no one at treasury
wanted to tell us, the next slide is from september 24th, another internal new york fed document, it says agree the close hold here is crazy. counterproductive and adds risk to an already risky situation. an internal document of the new york fed. next slide, the last sentence says it's totally unclear whether and whether trso intends to share this thing with the affected business areas. especially given their request that i refrain from sharing this document. a request that i'm obviously ignoring because i think it's outrageous they're keeping such a close hold on this type of such a late date. trso is one of your internal working groups. the next slide please. another internal new york fed documents, two interesting comments from powell. number two, he understands why treasury wants to maximize pressure on congress by limiting communications about contingency planning. mr. lew, this speaks to the very heart of why we've been beating you up on this for the last three or four years.
this is the question i wanted to ask from the very beginning. who at treasury made the decision to try to maximize pressure on congress by limiting communications about contingency planning? >> congressman, the decision that we made was to make sure congress and the american people understood the risk of what happens if the debt limit is breached. that was our decision, we zo not believe that there is a path towards prioritization that works. >> mr. lew, you said that 100 times. >> it's becoming redundant. my question is this, i'm not asking you about informing us the risks of a debt ceiling. i'm asking you specifically about the comments within the new york fed. which is your agent, and with -- >> congressman. >> let me finish, it is clear if all the documents we received from them through you, that they were integrally involved with this as far back as 2011 and clearly people within the new york fed thought that you were
whole withholding information from congress about contingency planning. and i want to know who told them that and why. >> i can't speak do what other people thought. i can tell you that -- >> if i asked mr. powell that, what would he say? >> between 2011 and 2013, there were serious questions about whether the pipes could even handle this kind of decision. >> we've covered all that. >> what we know for sure, we know you can't do that all the payments to the federal government. we can talk about the substance. >> who made the decision not to tell congress? and who made the decision not to tell the public? >> congressman i'm telling you we decided to share with the congress and the public what we knew, which was that if there were no debt limits -- >> you never shared with us -- >> it would be a terrible thing. >> or the public, the contingency planning and the prioritization. >> the contingency planning may or may not work. i can't sit you and tell you that there's a plan. there's no plan to manage through a default. >> the time of the gentleman has expired. the chair now recognizes the gentleman from missouri, mr. cleaver, ranking member of the our housing and insurance subcommittee.
>> mr. secretary, is there a plan? >> as i was just trying to say, congressman, these are questions about technically could you choose to pay bond holders, including foreign bond holders and not pay american citizens things that they're due? and we did i acknowledge to this committee there's a technical capability to pay principal and interest, including to all of the foreigners who own u.s. bonds. i think we have to pay our bond-holders. i think we also have do pay our veterans, have to pay medicare, pay for the lights to go on in this room and veterans hospitals around the country. i think the notion that there's a workable plan for the government of the united states to default is the highest form of irresponsibility. and that's what's really the issue here. >> thank you, i'm duly, i came here with interested in oil. more than anything else. there was a time when we said, we've got to produce more oil.
to reduce our dependence on imported oil from the middle east because of the chaos. i'm wondering now, today, aaa does this daily. gasoline price deal and so today the average price around the country is $1.99. i'm wondering what, what is the impact on the world economy and on us here at home. of the almost unprecedented drop in oil prices. and also gasoline at the pump. >> congressman, there's no simple answer, because different countries. somebody who came of age in the policy world in the 1970s and '80s. the notion that low oil prices and low gasoline prices would be bad for the u.s. economy is something that i find hard to embrace. there's no question, but that it is very hard right now with the u.s. as a producer in many parts
of the country, in the parts of our economy that are focused on oil production, it's very hard. overall for the u.s. economy, lower oil prices actually are like a tax cut. it lowers the cost of individuals and businesses to do their business. around the world there are very variable conditions depending on whether you're a producer or consumer. generally there are more consumers than producers. so i think low oil prices actually are something of a boost to global demand. at the same time it's caused a lot of uncertainty and in terms of the economies of countries that are oil producers. it's created volatility in the markets, it's not without its costs there will be firms that fail. that has consequences, i think that the challenge we have is to use this moment of low energy prices, to redouble our commitment to find alternatives so we continue over time to see a sustained world of moderated energy costs, even when things
change and there are external factors that are driving prices up. i think that the reason for the price being down now, has been viewed in different ways by different analysts, some view it as being a shortage of demand, a weak global economy. some view it as being an excess of supply. there are more producers in the world. now and there's more energy, more oil on the market. the reality is it's a little bit of both. we need a stronger global economy. when the global economy is stronger, we need to look beyond the moment. which is why all the energy work we do with the strategy remains very important. >> i'm not sure whether or not this congress will do a major infrastructure program during my lifetime. a tragic, tragic from my vantage point.
but when the price of oil drops and the drop in price at the pump, it impacts the revenue that we have historically used for highway and transportation bills. so at a time when our infrastructure is hemorrhaging all over the country, the money that is being made available, both on the staid tax as well as the federal tax on oil, is so low. that's the one negative that i -- >> obviously, it is reduced the revenues into the highway trust fund. i firmly believe we should find other ways of expanding the investment we make in infrastructure. we proposed using tax reform. business tax reform as a way to bring one-time money in for the next several years to get the kind of increase in infrastructure investment we need for our economy. i wish that that was something we could make progress on. even this year.
>> the gentleman's time has expired, mr. messer? recognized for five minutes. >> thank you, chairman. thank you, secretary lew. i want to start with something i think ought not be that controversial. it's around the extraordinary measures that are taken to try to lengthen the amount of time before we breach the debt. as you know, it was $350 billion i believe you guys were able to shift around in your department from varying accounts, an incredible power shifting billions from retirement accounts, government workers pensions and the like. but it is remarkable how little transparency is required in those extraordinary measure, so we offered an amendment that passed unanimously on the floor, and i would like your opinion on it, that would just require the department of treasury to articulate publicly what extraordinary measures you intend to use. what if any costs there would be to those measures. and how long to put an estimate
out before it would extend our effort to, before we breach that limit. >> congressman i'm not familiar with the amendment. i'm happy to look at it we do have both in my time and previously always communicated with congress and informed congress as we've used extraordinary measures. so there hastransparency. >> in all fairness, after the fact, you've reported transparency. but no one in the public -- what accounts you're moving around. >> it's contemporaneous. >> you haven't given us a date certain of when that extension would be. >> you don't always know precisely because it depends on the day to day cash flow. that's why operating the government is something as large as the government -- >> at a minimum, it's not required by law that you do it. >> i'd have to check. we do it whether it's required or not, i would have to check. i'm not trying to be argumentive. it's not a good thing, i don't like having to deploy extraordinary measures, it
creates anxiety in the u.s. and global economy for no good purpose. and we have so many risks out there that we don't control, not having anxiety about the federal government being able to pay its bills is something we do control. >> of course, i don't think any of us like the extraordinary measures, it seems if we do them, the public ought to know what we're doing, when we're doing it and how long it's going to extend it and how much it's going to cost. we'll work with your staff. hopefully we can reach agreement there. it's a commonsense merx we should put forward. i would like to return to the question of having the technical puta capacity to prioritize debt and how far your staff has pursued it. you i think have said before the committee, not try to put words in your mouth, you've articulated for at least a year that you have the technical capacity to -- >> i don't remember the exact date. i remember i testified this committee last year, said i don't remember the date. >> you've said that for a while. >> but i've also said that the technical capacity doesn't actually give me the comfort that we know it works.
>> you've said here it's irresponsible to preach the debt and you don't think we ever should. i think it's irresponsible to not explore a plan what you can do under your technical capacity. i guess i'm just asking you this. have you instructed your staff are you working through it you said you don't know what it looks like in the real world. has your team looked at what it might look like? >> they've looked at the work that's been done in these table top exercises, but you'd have to go into a nonpayment regime to actually test it. i don't think any of us wants to do that. there's a table top sense that you could pay principal and interest through the system that pays principal and interest. but we've never tried to cut it off and do it that way. what i've also said is we don't have the ability over the whole federal payment system to do that. >> are you suggesting the only way to really know is we would have to do it? >> i mean ultimately, ultimately you would end up only learning if you crossed that threshold
and if the president made the decision to pay those bills and not others. >> have you guys put together reports of what this would look like? is there an analysis that could be shown to congress of what your team believes? >> i don't recall what the, what the nature of the form of the analysis was. i've mostly had conversations. >> it seems to me that you know, unless we agree that the debt limit should just go away. we're going to have to have one. it is still a possibility that that debt limit be breached. as you said if you have the technical capacity at treasury to do something about it we ought to do more than just have a table top discussion. we ought to have an analysis of what that would look like provided by you, so both the president and congress could see what that looks like. >> to be clear, the people who are corresponding on those oe-mails that you showed don't have the ability to make that decision. only the president can make that decision. >> it sounds like now we don't have the information to make that decision. >> we did in 2011. now if you asked me the technical capacity. i would say yes there's the technical capacity through a
table top exercise, it may work, it might not work. >> are you in the habit of making big decisions in treasury at table top analysis? >> most decisions we make are not the kinds of avoidable decisions to create a crisis that this one would be. this one would be a self-inflicted wound. there's no reason to ever test it. >> thank you, i yield back, mr. chairman. >> gentleman yields back. the chair recognizes the gentleman from massachusetts, mr. capuano for five minutes. >> thank you, mr. chairman. mr. secretary, i had no intention of coming over this morning, i know you're a big boy, you can take care of yourself. unfortunately i made a huge mistake, i actually turned the tv on, i was watching the hearing and honestly i was a little bit embarrassed, a little bit angry. and i thought i would come over here and just do two things. number one i know one of the first things i heard was a big concern about the deficit and the debt. and it's a legitimate concern. but apparently you are personally responsible for all of it.
i just first of all, i'm impressed by that power and that incredible presence. but nobody mentioned anything about the bush tax cuts, that were totally unnecessary. nobody mentioned two wars that were, one of which was totally unnecessary. and all the money we spent in iraq. without paying for it. no one mentioned those items. no one mentioned the recession. no one mentioned the vote that this house, two votes this house took late last year, that increased the deficit by almost $2 trillion, one of which votes on the tax extension, 100% of my colleagues on the other side of the aisle voted for that. 100% of them. 64% of them on the other side of the aisle voted for the omnibus. no people saying, well i share the blame of this terrible, terrible thing. that kind of -- i don't like the deficit, i don't like debt like anybody else. at the same time i think those
of us who participated in that should stand up and own what we should own as opposed to putting all of the blame on one individual. that's number one. number two, to be perfectly honest, i've had differences with you and we've discussed them. i still have differences. that's fine. those are reasonable, thoughtful differences. i hope you see them that way. we can disagree and still be respectable. still like and respect your professionalism. and honestly my questions have been answered. i just wanted to take the last three minutes of my time to offer you an opportunity to do one of two things. either you can address any of the items you were not given the opportunity to address by anybody on this board or you can take three minutes and take a deep breath, put your feet up. take a relax. i'm not trying to get you out of the zone but at the same time no one else is giving you the opportunity to answer questions. if you want to take the opportunity, fine. if you don't, i'm perfectly fine to sit here and read my blackberry for the next two minutes. >> thank you, congressman. i think if you look at the fiscal path that we've been on
as a country for the last two decades, i've spent as much as my time as anyone else trying to reach a responsible fiscal policy. in the 1990s we had a surplus because we worked on a bipartisan basis to reach balanced agreement and save the surplus, not spend it. you've described what happened in the years after my tenure and it created a big big problem. we spent that surplus and then we had a recession that put us into a deficit, and then we had to spend to get out of the recession. and we're now in a place that we are doing a lot better. the economy is growing. but we are not at a place where i would say kind of grinding the economy down by trying to reach balance prematurely would be a good thing to do. i think with the conversation about infrastructure, some of the back and forth this morning illustrates that there are pressing needs in this country to get our economy and the people of this country where they need to be.
so i would hope that we could have the kind of bipartisan discussion about tax and spending policies that over the next 20, 30 years that get us where we need to be. but over the next ten years we've gone from a skyrocketing deficits and debt that was crossing through 100% of gpd to a stable situation where we've reduced the deficit from 10 to 2.5% of gdp and stabilized the debt. for somebody whose last testimony in the clinton was prting paying off the debt. i wish a lot of the things that happened afterwards that squandered the deficit hadn't happened. we don't get to go back and change that. but it would be a terrible thing if we accepted the myth that these last few years have been anything but an improvement, a dramatic improvement in our fiscal position. i could fill 40 seconds, but i think i'll stop. >> mr. chairman, i'm not yielding back just yet.
i'm contemplating what i'm going to do with my last 26 seconds. >> and now we're done. thank you. >> the time of the gentlemen has expired. the chair now recognizes the gentleman from arizona, mr mr. schweikert. >> thank you. i was waiting for the offer of manis and pedis with the excess time. secretary lew, i would like to go a slightly different direction, and i know rhetorically our side focuses on what i believe is the crushing debt that is coming, and the other side hey, look how much better our world is.
but could we spend a couple of minutes looking at the head winds that come to the next administration? some of it is demographic. i'm holding a report right now, the coming pension crisis, talking about government pensions, both state, municipal here in the united states and around the world. i mean, it's saying municipal pensions, the unfunded liabilities is over 100% of gdp. i'm looking at an environment where gdp were back under 2% gdp. 14 years left in social security, trust fund, nine years left in medicare trust fund, 56 months left in social security disability. there's some really ugly things happening. and you and i know much of that we desperately need economic growth to cover these sins. how much in your team do you
actually do focusing on here's the debt management, here's the reality of what's happening, both because of lack of economic growth, demographics, other things? how much big boy actuarial math is happening at the treasury department saying this is our future? even our previous conversations about should we be selling long-term bonds, i mean truly long-term bonds to get beyond the demographic bubble. what are you modelling? >> what am i what? >> modelling, and you team. how much are you looking at this incredible wave of debt that's going to crush us? >> congressman, we've known for the last 50 years that the baby boom would retire at roughly now. >> congress just seemed to discover it a couple of years ago. >> congress dealt it with in 1983 in social security reforms that have been very effective because they reflected the way you work on a bipartisan basis to deal with what goes into the trust fund, what comes out of
the trust fund. >> but right now social security is at a 2.7% gdp that we're not hitting. social security trust fund is gone in 14 years. >> the thing that's important to remember is ongoing revenues in social security still continue to fund the bulk of the benefits, over 65% of the benefits. >> actually i think under the cbo study we're 2018 social security goes negative, that the tax revenue and i think interest revenue. and we pay ourselves what -- >> the point i'm making isn't that at some point the revenue goes negative but that the revenue keeps come in and will continue to pay for the bulk of social security's ongoing expenses. and the gap is what's the issue for the long term financing. >> think about that gap. we burn through -- today the trust fund has what, $2.8 trillion and we burned through that principle in 14 years, at the same time we're paying ourselves 3.1% interest and the tax revenue.
and social security is actually the easy one to fix compared to medicare. >> yeah. >> but also when i look at the public and private pension issues out there, i'm just wondering the scale of these things, is it just pushed off to the next presidency. >> look. i having spent 1983 working to fix social security. i had hoped five or six years ago we would have had the kind of conversation about that kind of bipartisan approach. it didn't happen. i think that we're in better shape because our fiscal position has improved. there's still more work to do. >> i need to correct that. i know that's our script here, but that isn't true. our modelling just a couple of years ago we weren't expected the anemic gdp group. a couple of years ago we were going to be at 4, 4.3, now today this quarter we're at 1.9.
let's collectively have a real conversation here. >> there's no question stronger gdp growth and economic growth will help us deal with an awful lot of challenges including funding social security and private pensions. i think that if you look where we were seven years ago, where with are now, we're in a stronger position to ask that question. >> we may be stronger but this is still crashing down upon us. >> that's where i guess i disagree. i don't think it's crashing upon us. i think we have time to deal it. >> 14 years of social security, 9 years in medicare, 56 months on social security disability and we should pretend things are fine in. >> no. i think the issues need to be addressed. i'm not disagreeing but i don't think it's a crisis for today. >> i need to yield back. i will beg of you, send me the information from your team on what you're actually doing to deal with this. >> time of the gentleman has expired. the chair now recognizes the gentleman from massachusetts, mr. lynch. >> thank you, mr. chairman and thank you to the ranking member as well.
welcome, mr. secretary. good to see you again. mr. secretary, the chair and the ranking member some time ago created a task force on terrorist financing here in this committee and together with myself and mr. fitzpatrick and mr. pittenger, we've been working basically in the middle east, north africa and my colleagues are leaving for central america in the not too distant future. the examples where we've had the greatest success in north africa and the middle east has been the result of coordination with your office, with fincen, and also in several countries, we've worked with treasury at ataches that a part of the u.s. embassies in those countries.
it goes from afghanistan to jordan to egypt, tunisia, morocco. all of those countries, the level of cooperation we've got from them, which has been considerable, has been the result of your work and the work of people like joe parker. i think he may be retired now. but he was very, very instrumental in setting up some of the financial intelligent units within these country to push back on money laundering and terrorist financing. the problem that we see is that it's spotty. even in joe parker's example, he handled -- he had a big portfolio. he had, you know, a big region where he would hop from country to country to help us convince the host country to adopt anti-money laundering statutes, just basic stuff, know your customer, helping the local banks prevent terrorists groups from using the legitimate financial system to spread terror.
and you know, it's ironic that today, you know, we've got isil taking credit for the attacks in brussels. obviously, all our prayers and thoughts are with the people of brussels this afternoon. is there a way to amplify what treasury is doing? is there a way -- i'm not saying you have to have 192 treasury attaches in every country around the globe but certainly there are problem areas we can use more help. and treasuries, people, the office of foreign asset control, the technical people, ota, the office of technical assistance, they have been great on this stuff. they can educate not only the foreign central banks but also they do a great job in forming our embassies at large in terms of what role they could be playing to shut off the financial system to these
terrorists groups. >> congressman, i couldn't be more proud of the work that our offices from ofac to the treasury attaches do. they are legally the leaders of the world on this. what they need is well-equipped partners around the world. i think the financial attaches are our eyes and ears around the world and we could use more of them. but what we really need to do is get people into country to provide the technical assistance. that's more of an ota function than a treasury attache function. the leading providers of technical assistance around the world to build these capabilities are ourselves through ota, the imf and fadth. we work closely with all three. obviously we are one of the three. we work closely with the other two. we met in december in the u.n.
and i chaired a meeting at the security council the first time that the finance ministers of the u.n. met in the security council and we had a unanimous solution to designate isil for the same treatment al qaeda given, which means even intermediaries are subject. it's for the world to come together to provide technical support to build in the kinds of capabilities that you describe. we have a lot of work to do. even in our most advanced partners, they're not where we are. their intelligence apparatus is not well developed. frankly, they don't have a comfort level with some of the surveillance that is making it impossible for them to see some of the things that are going on. we have information that we provide to countries like france and belgium to help them monitor and track after a terrible horrific incident like today respond. our people are engaged in that
and we'll work around the world to bill these capabilities. >> if ota would need more resources -- >> we proposed the doubling of ota over the next several years. i think it's critically important. we got more bang out of the buck for ota than anything else. >> the chair now recognized the gentleman from florida. california, mr. royce, chairman of the house foreign affairs committee. >> thank you very much, mr. chairman. secretary lew, i just wanted to talk trade. when there is a level glal playing field, american workers and the american economy win. on tpp i know you share the concern, as you've said, that data localization provisions are a trade barrier, pure and simple. as you explained. and as you know, tpp allows country to transfer data across borders and to be protected from server localization directives. however, electronic payments and
the financial services sector are excluded from the data localization part of the agreement. and you have talked about the possibility of having some kind of site agreement to thread the needle, as you explained on this issue. where are we in discussions now with our tpp partners? do you think a side deal is possible this year on this? >> congressman, what i've said is that data localization in general is a barrier free trade. we've opposed it vigorously in things like electronic payments systems where it's no more than an excuse to put a server in your country and create jobs and make it more expensive for international competition. in the area of financial services there are two competing important goods. one is to prevent the kind of nontariff barrier. from being put in effect. the other is to make sure that
prudential regulators have access to what they need when they need it. the reason this is hard, there's legitimate concerns that prudential regulators have. i'm working with them to have them work through in understanding how going forward we might be able to address it. >> i appreciate the state of priorities. >> in terms of tpp, i tried to be very careful. there is very limited room to change tpp. i don't want to raise -- >> terms of a side agreement, which you did raise that issue, we need to see demonstrable progress on this. i stand ready to help. many of my colleagues to. i think it's a prerequisite to get this issue solved in a credible way. let me go to my last question here. in july you testified to the senate that iranian banks will not be able to clear u.s. dollars through new york or hold correspondent account relationships with u.s. financial institutions or enter into financing agreements with u.s. banks.
iran will continue to be denied access to the world's largest financial and commercial market. and i've received reports from the administration that it is now considering providing iran with access to the u.s. financial system. so are these reports, which contradict your previous testimony correct, and is the administration planning to ease restrictions on iran's access it u.s. banks, specifically, are you considering permitting iranian banks to clear transactions in dollars with u.s. banks or foreign financial institutions, including offshore clearing houses? the reason i raise is it because iran remains if foremost state sponsor of terrorism in u.s. judgment, a country of particular concern for its abuses of religious freedom, as a primary money laundering concern, as we say about iran.
this is clearly an explicit recognition that any financial transaction with the iran and u.s. dollars risks supporting the regime's illicit activities and the international community agrees. iran remains on the blacklist of the financial action task force on money laundering. so that's why i raise this issue. >> congressman, we have reached an agreement with iran that has caused iran to roll back its nuclear program which has done an enormous amount to increase the security of the united states. part of the agreement was for iran to have nuclear sanctions lifted. we made clear that we would lift the nuclear sanctions but keep in place sanctions on terrorism, sanctions on human rights. we'll continue to do that. >> they need to -- >> we've continued to make clear that we do not consider -- >> we're not going to give them access to the u.s. dollar or u.s. financial system?
>> the question -- we're continuing to look at how we comply with the joint comprehensive plan of action to make sure that iran gets relief under the nuclear portions while we keep pressure on iran on these other issues. >> yeah, but remember the basic commitment that was given to us in congress. the iranian banks will not be able to clear u.s. dollars through new york. that's the commitment and they're still in violation of ballistic missiles and abusing its people. thank you. >> time expired. the chair recognizes the gentleman from california, mr. sherman. >> thank you, mr. secretary. often when you come here i ask about contentious issues, ask you to break up the big banks. i've said something about tpp that wasn't entirely favorable. this hearing has been
contentious so i'm going to devote my five minutes to things it won't be quite mr. capuano, but these will be the least contentious issues you deal with today. it basically involved working with me on a few issues that will never be on the front page of a newspaper, at least not this side of europe. we have tax treaties with hundreds of countries around the world, at least -- hundreds is not the right -- scores of countries around the world. we devote a substantial amount of money to trying to achieve our international development goals so we can always provide foreign aid to armenia, and that costs us some money. but we can also achieve the goals by having a tax treaty. we're currently negotiating a treaty dealing with tax enforcement, but the gold
standard of tax treaties is your basic tax treaty on double taxation. the armenian embassy tells me they're willing to start with our basic framework and negotiate a tax treaty. they've negotiating a tax treata with canada. so at that what was able to do it. you see your department working toward a tax treaty with armenia? >> the primary purpose for the bilateral tax treaty is to avoid double taxation. we're not aware of a double taxation problem in armenia. >> we have a chicken and egg circumstance. you don't get the business investment because you don't have the tax treaty and you don't need the tax treaty because you don't have the business investment. given this congress has provided well over a billion dollars of aid to armenia, it would seem that having one member of your
staff work on this for a while to achieve the same objectives -- >> i appreciate that. obviously to negotiate a tax treaty is quite labor intensive. to look at things -- we have been looking at comments that come in, happy to follow up. >> okay. the next issue relates to the porter ranch gas leak. biggest gas leak in history. 5,000 of my constituents have left their home. and this is not something i told your staff i would be asking you about, but section 139 -- what we have is people living in hotels at the expense of the gas company and now they're told you may be taxed on the money being paid for that hotel. you can't live in your home because of the gas leak. now the good news is congress passed section 139 c 3 which says that you can avoid this
travesty because gross income doesn't include payments for the living off site. if it results from any other event which is determined by the secretary to be catastrophic in nature. and i wonder if you can work with me toward making a fair determination that the largest gas leak in history which displaced 5,000 families for months meets this standard. >> congressman, thank you for bringing this to our attention. i wasn't aware of it until then. our staff has been talking to your staff and reached out to the relevant parties. they haven't completed the analysis but we understand the timeliness of this given it's tax season. we'll continue to work on it. >> i look forward to working with you. i would hope that you would direct your staff to lean in the direction of fairness. i know -- i'm a former tax lawyer myself.
i know that a very strong argument can be made on this. and we have a similar issue, not one that's quite as pressing, but we have a drought in southern california and this is the most environmental administration in history and people are being told that if they accept a payment -- not even a payment. if the local water utility pays for the cost or part of the cost of ripping out their lawn and replacing it with cactus or replacing it with rocks or something else that uses less water that they could be having to pay an income tax on what they're doing to help the community. and i hope that you could direct your staff, again not to change the law, but to lean in an environmental direction. >> i was not aware of but we'll follow up on it. >> the time of the gentleman expired. the chair now recognizes the gentleman from new hampshire, mr. guinta. >> thank you for being here.
i want to follow up on what the gentleman from california was talking about relative to tpp. you said last week in a subcommittee, quote, because we have a principle position that data localization is bad, we're working to see if there's a way to thread the needle. >> the other half of that is there were real concerns and we have to balance. >> can you quickly tell me what a side agreement may look like? >> i can't tell you right now. if i knew where this was headed i would be happy to say so. the challenge that we have is the prudential regulators feel that they need to be certain that they can get access to what they need when they need it. during the financial crises there was an incident where with a major institution they were denied access in a timely way and it interfered with the crisis management and resolution. so the question is how to make sure that they get what they need -- >> i understand that.
i appreciate that. relative to tpp. obviously u.s. financials institutions as well as european allies have asked for this particular area. i understand you're including or working on tpp, is that correct? >> we continue to work on tpp and we think it's important that the negotiations be opened up. in the course of the tpp negotiations. >> in your role i'm sure that you know market participants spent a lot of significant time in proprietary investment strategies and that differences exist from the 2012 report of the council of inspectors general on financial oversight. can you tell me how fsoc is addresses the differences that exist to ensure that federal agency members are properly safeguarding information in. >> i think each of the regulators has an obligation to protect information that's within their area. one of the challenges we have is that to do the systemic review that fsoc is charged with
requires sharing information in an appropriate way. what we do is limit the data and make it so that each of the parties can be certain that they're complying with the responsibilities that they have to protect -- >> to that end, would you provide our commit awitee with brief policies and procedures outline what the fsoc regulators are doing? >> i'm happy to follow up afterwards and find out exact lay what you're looking for. >> can you commit to something in writing to show us what the policies and procedures are for regulators? >> i'm not sure i'm the right one to address each of the regulators -- >> as chairman of fsoc. >> let me follow up with you. obviously, each regulator speaks to its own statutory requirements. >> i appreciate your willingness to follow up. if we could put up a slide, it puts up a concern that i want to echo that some of my colleagues have brought up already. that's document production. i have a slide here that shows the financial services committee
requested information from treasury on the plan to renovate the leased office building. obviously, four different letters. 288 days have passed since we've heard from this matter going back to june 9th of 2015. second example, thursday september 17th, 2015, about six months ago almost to the day, i or our undersecretary came to testify at the hearing. i personally submitted questions for the record. that was six months ago. i still have not received a response. i have those items here. can i ask when i can expect to get a response and why the delay? >> congressman, i'm happy to take that back. there was a june 9th letter requesting information an all august 25th response where treasury informed the committee that report by the inspector general found the work authorization related to the renovation was finalized after
the cfpb director was appointed. >> not sure that they actually addressed the specific issues in the four letters. that being said, the september 17th request that i issued six months ago still has not -- can you follow up on that? >> i'm happy to follow up on that. >> finally, i want to move to economy. you're aware that the president's budget includes a deficit of almost $800 billion at the ten-year-end of the budget window? >> i'm familiar with the president's budget, yes. >> and are you aware that the gross federal debt under the president's budget increases almost $8 trillion from 19.4 to 27.4 in 2026? >> yes. but i'm also aware that gpd grows and we've stabilized the deficit. >> let's get the gdp. my understanding that the president's budget projects gdp growth never exceeds 22.6%, is
that correct? >> i don't remember the decimal number but it's the right range. >> thank you. i've run out of time. i yield back. >> the chair now recognizes the gentleman from illinois, mr. foster. >> thank you. i would like to return to the actual subject of this hearing. the capital outflows in china are now in excess of a trillion dollars a year. the institute of international finance estimated outflows in january alone of about $113ble. billion. now when you have a trillion dollars in capital flight and a $10 trillion economy, it seems to me that this effect alone is more that enough of an explanation of the slowdown of growth in china. would you agree that it's a major contributor? >> i'm not sure how much to attribute the capital flight to the slower groel egrowth or the growth to the capital flight. >> i think that there has been capital moving out of china. some to repay foreign debt, some of it is money leaving the country. it's hard to know exactly where the line is. and there are stronger views
than there are data on the subject in a lot of the analysis i've read. i think china has a serious economic challenge. it has to go through this from an industrial economy and export driven economy to an more market-driven economy. the faster they established confidence that that transition is under way and they will stick to it, the faster they see progress on stemming the capital. >> the structural problem they have to have is basically the pile up of health is a universal wealth. this $1 trillion contifts of wealthy chinese pulling their money out of china and spending that money and it seems like when the wealthy in china break
their tom pact to reinvest productively in their own country and instead invest in less productive assets offshore. it lowers not only chinese growth, but when productive assets when making new factories are replaced from investments of the rich. and this is sort of a universal investment and they have low return on investment. it's a major contributor to the economic slow down in the world. >> there is no question that both wealthy individuals and firms have a lot of cash.
they could be a lot more in the investment. why is there a sense of concern that global growth and demand is weak. >> demand is weak because of the wealth distribution. there is no shortage of consumers that would buy stuff in china if they had the money to do so. >> i think in china, there is no question but that the right policy is to give the consumer in china more resources. they had confidence that there is a safety net and they don't have the social safety net we had. savings are high because through a combination of the one one-child rule and the safety net, people feel the only way to take care of their future is by saving. when china has a volatile stock market, often times it's small
investors who are leveraged. they have a lot of things that they need to fix. they had a more market area of the economy. they need to build a better safety net so they feel free to spend and they have wealth and income distribution issues and corruption issues that they need to attend to. whether it's the elites or having the corporations and entities support them, and it's a complicated one.
>> that's the main trust of my question. the cross talk between them. thank you, my time is up. >> the gentlemen from new mexico, mr. pierce. in cuba this week, the first president in 98 years to visit. have you been involved in the discussions about normalizing relations and trade with cuba? >> yeah. >> so the period stated in december that he would like to go to cuba and what progleress d
there been? >> i didn't ask the purpose, he made the comment and you are in the discussions. i would like to know what progress cuba has made and the possibilities for ordinary cubans. >> the purpose of the changes that we have made is to open -- >> that's not my question. i apologize. i have five minutes. >> i have an answer to your question if i can get beyond the first few words. i'm happy to answer at your pleasure. >> i'm waiting breathlessly quiet. >> one of the things we will be doing is opening communication lines and telecommunications and bringing computers in and people to people contact. that is going to contribute to an environment that is very different than what we have seen that hasn't worked.
i am not suggesting that cuba is changing and i don't think the president suggested that. >> the president suggested that they needed to change and they didn't. if we pursue this normalization and do you think treaty obligations should take place like the extradition of 70 fugitives up and down there. one guy killed a new mexico cop in 1971 and has been living a life of freedom down there. would you hope we get to see him back into mexico and see if he is guilty or not. >> i'm going to have to defer to my colleagues who have expertise on things like that. >> you don't have an opinion about that. >> you don't have enough facts and opinions. >> i have opinions on the rules of law and democracy and we have been seeing it for the the last 50 years and the policy of embargo has done nothing to
improve it. i am hopeful that the policy change we put in place will lead to the kinds of changes we all want to see. >> judging from president castro's comments, he said you can't ask me this many questions. it's a laugh. >> do you know david cohen. he was here in 2014. you alluded to that earlier. you said it's hard to get in there and blow up the oil. what does that mean? it's hard to get in there? >> we got good at it actually. we targeted points of vulnerability and the tanker trucks that moved oil in the country. >> you know what i just read? they are getting a million a day. now they made less than $365
million a year. in december of 2015, it's 500 and that talks about trucks getting into the line and they wait months in the line to get one truck of oil and our airplanes are flying overhead. in the line that is five clock teres long. what exactly does it mean that we are being successful at interrupting? if the revenue is going up and keep in mind the price of oil in 2014 was at 70, 70 down to 30, they are doubling the revenues. it doesn't sound like they are being respected. >> we have to keep at it and we have to keep up with changes. >> i only have a few seconds.
and it is not difficult to wait. are. >> it is an important issue and i think you would want to know the answers. >> you have uavs sitting up there and when the tanker gets full, you pop it around. >> that's not what we do and we have been getting in there and they were not with people. the reality is, this is going to be an ongoing challenge and not going to be solid and once and for all. the fact that they had to cut salaries because they are carved of cash means they are making progress. >> time has expired. >> thank you, ranking member.
waters and thank you mr. secretary. let me go back to the subject of international monetary financial policy and start by thanking you and those in your office for working with my staff and office on somalian remittance. we have the population in the country with the weak central banking, they had great difficulties and you have been responsive and you sent a team to work on something difficult. let me spin off on this because sitting here through this entire hearing has been disappointing to me. because they lump us all together and talk about the congress and what we are doing. i read an article in the american banker and hoped we would have learned from this and
last week we had another one of your colleagues here with the cfpb. this article talks about how ineffective it is when you are rude and disrespectful and don't allow people to answer the question. people who are well versed and seasoned. i would like to enter this into the record fist possible. >> all are allowed under general leave and without objection. >> thank you. >> i want to ask you about the subpoenas. while i am in article after article when an individual or people like your staff receive subpoenas that it is very customary for them to contact
the parties and tried to respectfully and informally work out the differences. so i also applaud you for that. it is important for the american audience and they want to know who they are talking about. and when i think about your rich history, i think about you not only being the 76th secretary of treasurer, a white house chief of staff and you mentioned in reference being an omb director and tons of other jobs. you worked for a congress person. you worked for a speaker of the house, tip o'neill. most impressively, you married your childhood sweetheart and you are still married. the all american dream with two children. let's talk about and you your
role. harvard graduate. georgetown law school graduate. your friends say you are meticulous and some say you are a brilliant scholar. it's important when we hear them question after question that you have clearly not only answered the question, but gone far beyond the call of duty where he was responsive for the policies for the trillions and trill yons of dollars. you have shared with us how we reduced the unemployment and so i say to you, is this
congresswoman proud to sit here and i say to you, the two most important words that i was taught. the two most powerful words that one can say. that's thank you. my further taught me that a long time ago. she said sometimes it's better to listen than to talk louder than the person. you were asked the question, what would happen if a person in a regular job were sitting there. let's change that around and ask, what if a regular person talked to us in that loud voice, pointings their congress and not letting you answer the question. you don't have to answer that. we know what the answer would be. my father who knew me best said remember to always say i'm sorry. i'm sorry for what you had to go through. >> the time has expired.
>> we had occasion to talk and we discussed at some length information sharing. they had transparency units and the role in sharing together how important that was. to the extent that they are sharing, in terms of related to trade-based money laundering that she would be successful. between homeland security and fencing, your response to me is i start out with a strong bias that we ought to work with a government and we ought to collaborate. i started out sympathetic to this initiative. that was your statement them. in response to my questions to
you, we got a response back from the staff for the record that stated the following. treasury with contact in which they can better inform to combat financing. we can achieve this goal through the relationship. while at the same time maintaining the autonomy. the information was so vital and they were not accessing and that restricts your ability to be able to intercept what you need. can you respond to the different viewpoint between your staff? >> i'm not sure it's a different
viewpoint. our activities and tracking down terrorist financing depend on the constant agencies like dhs. the question whether or not -- >> you entered into an agreement with information sharing. i do know that full access would put a lot of information that is not necessary into a place that it shouldn't be and how do we make sure the right information is fully share and we protect systems where it's at issue for the other information as well. i'm happy to follow-up after we talked at the meeting.
it has not been brought to my attention in terms of a problem. >> there should be a sense of autonomy coming from the staff. that's directly opposite in terms of what i heard. i am familiar with the work you had and what you contributed. we have a greater need. among the agencies and with the allies around the world. >> i do believe that the practices we have at treasury lead the world in how to get the right information into the right hands. we provide enormous numbers of leads to the agencies. you are asking about a query.
>> i need follow-up on that if you could. two other questions. i had an important role in bringing them into compliance. what's the response of what we do with countries like this who financing. >> what tools do we have. >> we are making progress. >> it's a nice word, but i don't have much time. not being complicit with the financing component.
do you believe that these banks will be able to access that they can have access and work with the financial institutions? >> brief answer, please. >> what i said is that we will comply with the joint comprehensive plan of action. we will keep others in place part was to give them money they have a right to and we will work on making that happen. it is not going to be our goal to block transactions that are legitimate under the joint plan of action and we will enforce on other areas like terrorism and the like. >> time has expired and they recognize the gentlemen from washington. >> i ask consent to enter into
the record. >> these are allowed under objection. in fact on the dates of march 18th, you extended an offer to sit down and work through the issue of the supply of certain materials and responses to request. that being in addition my best count, more than 5,000 pages of documents you committed. is that correct? >> that's correct. >> i would like to associate myself with the remarks of the gentle lady from ohio. >> i was first elected 40 years ago this year. my muscle memory as a fairly young man was strict rules
prohibiting other people's motives. i have been surprised in my now 39 months here that that is allowed on too often an occasion. i took the time to look up the house rules. that's the observer of the acceptable standards of dignity, propriety, courtesy and decor um observed so the specific words with respect. >> i am sorry. you didn't deserve that and i frank 3 found it to be an egregious breech of our own rules. on to the substance, last fall i think it was under the secretary here and i queried him as to
whether or not we had actually reached out to the newly formed infrastructure bank to see about ways in which he would collaborate and cooperate with the new deep pool of funds available. it seemed to me the degree in which we are reaching out, the president quoted the reform and my question is, have we reached timeout them and is this an area where we might cooperate more to invest in infrastructure. >> i appreciate your comments with regard to the infrastructure bank, we have made clear from the start we think it's a good thing and we didn't have an objection and principal and it was critical
that a new institution adhere to high standards. our pressure for high standards and by china itself. as they approached making their first commitments and they are saying all the right things about adhering to high standards. the way they collaborated is through the older financial institutions where if they can collaborate on projects, they piggy back on the safeguards and the standards of the older institutions. we offered on a bilateral basis to provide technical advice. a lot has been learned over the last 70 years.
they say it will be open for fair courteousing actions and they will want to participate in that. >> on the subject of infrastructure, it seems what we consider to be infrastructure is what we involve with over the centuries. the roads and bridges and aqua ducts and railroads and later sewers. 20th century foams and water treatment lines and in the 21st century broadband. when it comes to the development, we might want to answer and the framework in under developed nations for whom not having a regulatory framework is a great impediment
development. >> thank you, mr. chairman. >> time has expired. they now recognize the gentle lady from missouri. i want to bring up the negotiations that have been occurring in the eu. the president will be traveling to german tow discuss efforts to advance negotiations on this trade deal. however as we all know, financial services continues to be an nash is not on the table. as you said last year, you support increasing market access and view talks on regulation with i believe the word was skepticism. different regimes when they are not equivalent when they affect
market access significantly. is there a difference? >> from the market access and it would be unusual for the regulatory issues to be covered in a trade agreement. we don't think it's appropriate for the issues to be handled there. there a lot of places where we collaborate including with the european friends to try to reach agreement on goals we all shared in terms of high standards. i don't think that a trade agreement that could end up chipping away with our protections would be the place for prudential regulations. >> they said that previous mechanisms to engage in the regulatory coherence have fallen short such as the financial
markets's dialogue. doesn't this represent a unique opportunity surge to get communications and coordination between the u.s. and the eu right? >> i heard in the last few months the rec nation it would not be acceptable to us. i heard a renewed interest to us as a place to try to drive the discussions which we think is a right to do it. >> i heard differently. i find your response concerning. on the subject moving on of comparing eu and u.s. in terms of service regulations, i would like to bring up the call for evidence that is ongoing and looking at burdens and other
unintended consequences. the commissioner and jonathan hill said, you can't expect to get everything right or predict exactly how rules are going to interact. do you disagree with the statement? that is appropriate and we take that view of analysis in terms of what we do. that's such as what the eu is doing. do you support a dialogue. similar to what the eu is doing to look at the impacts that all of our post financial crisis regulations have had in growth and financial stability. >> they are in the middle of a regular process of every years
of reviewing and looking back and seeing which regulations require and that's the right way for it to happen. they each have the responsibility. they had the federal agencies that was there. i was struck it was not going in the independent agencies. >> they have yet to be implemented. how have they looked at future regulations and how these fit in with the current structure. >> our view is that we always need to be looking at the risks of the future and not the past. we have to make sure that the system does not become out of date. we do that domestically and
internationally as we participate in various multilateral bodies. >> i think i have run out of time. >> the chair recognizes the gentlemen from kentucky. >> thank for your testimony today. i wanted to follow-up as a member of the financing task force. as you know the work of treasury is important with particularly the office of technical assistance. and counter terrorists in many developing countries. my question to you is given the role of the office of technical assistance and development at the state department, which of these takes the lead in providing that assistance to allies and other countries?
>> obviously they have the subject matter knowledge most tapeable. they have resources and we collaborate to work in partnerships. one of the things you need to know is get to the countries they need to be. you get multiple improvements by building the infrastructure in this area. i have seen where they are there. >> obviously given the news and the tragedy in brussels, we continued to be reminded that we must confront terrorism and be
proactive and disengagement is not an option. i would hope that we certainly coordinate in terms of who takes the lead on providing that assistance because we know from our work and oversight that they have significant gaps in terms of the judicial systems. >> i don't think the problem is coordination. we just don't have enough people out there. obviously that task force makes recommendations. should we work to have recommendations on coordinating assistance to developing countries? >> we do work with them on coordinating. that is where most of the assistance is coming from and we
work closely together constantly. while we have many of the commerce department over a number of our embassies, there only a couple deployed worldwide, that seems to be an insufficient number given the threat environment. it wouldn't seem that we can project our economic or counter terrorism financing objectives without more treasury deployed worldwide. would you agree? >> i wouldn't say no. i would not suggest any inadequacy they have out there. they do a tremendous job. >> a couple dozen. wouldn't you agree that having them deployed in more places
would be at least as important as agriculture? we need to continue to work on that. let me ask you about the sequencing and might front run in the reserve process and the rule making and by requiring the fed to implement not bank centric standards. what we don't want is for the international community to make a run on that. do you share the concerns and what is treasury doing to ensure that the timeline accommodates the work of the fed going first? >> we discussed this earlier and
the covered agreement that would make clear the line between prudential and capitalists. we don't think others should make capital requirements. >> others adopted the rules for. >> time has expired. they recognize the gentlemen from pennsylvania. they put them at a disadvantage for the products they offer. they know they approved higher capital charges for u.s. products by labeling them as
non-traditional. they have not been subjected to a higher charge. this is a clear example of foreign firms. why does this exist and what are they doing to address it? to be sure they have the country of domicile is not recognized by the eu. one of the reasons is to have a frame for preventing that from happening. we are engaged and very much focussed on this. >> they elemented the head winds and many that we face are man made and self imposed.
that will cause two million jobs. you look at epa regulations throwing workers out of work. then you look at dodd frank as a way to have too big to fail. that inventory had shrunk and those had content cent rated in liquid assets. they highlight several factors contributing to fixed income markets namely bank capital. do you agree that they are a factor to increased liquidity.
we are open to looking at any of the factors. that's an important element in the financial system. by most measures of market liqu liquidity, we are now within historical ranges. that said, there is things going on in the markets that require more attention. that's one of the reason wees p put out a request. the way the markets perform and liquidity. we are in a world of electronic and algo rhythmic trading where many, many and most of the transactions are not what people think of as traditional individuals making and having an effect as well.
>> i don't attribute a great way to the notion that regulatory changes are a key driver. if you look at the stability of our financial system and the health of our economy. i'm not convinced they are a key driver. >> larry kummers put an oped in the "washington post" and he discussed a paper by the school of government and advocates for the 500 euro note and the 100 dollar bill. removing such currency would remove by having little downside
for legitimate business. they go on to call for a global agreement. steve foeshs said he is concerned that this would harm average americans and i wonder if you would have an opinion on this. >> i think there is a big difference between the $100 bill and the sisz frank note. very large bills are problematic. i think the $100 bill. >> they are problematic because? >> because the ease with which you can move large amounts of money is five fold. >> i yield back. >> the time has expired. the gentlemen from colorado, mr. tipton. >> thank you for taking the time to be here. i want to be able to visit with you.
i would like to go back to where they were and the impacts they were feeling. we had more consolidations and fewer applications starting into the communities and providing the access in regards to liquidity. a tale of two economies and given the opening statement that was glowing on the american economy, as you travel through the third district, we are continuing to see in many cases with the new business start ups. many expressed to me that the challenges being able to get capital and they have an
they want to make clear that they eased some. on the small business side, a lot of businesses before the crisis got access to capital by having individuals really tap into the home equity. in a lot of the community banks, lat year when we sat down and visited you expressed that you had not talked about this. when we reviewed them, they had not been raised once. what metrics had to be in place for those to take place? they need to use the flexibility
they have to not have a one-size fits all. i don't believe they have that. they need to look at what can they do to provide the kind of proper accommodation to not always talk about the same thing. the banks are quite small. and it's way bigger than the typical community bank. when people raise institutions of hundreds of billions of dollars, we are not talking about community banks anymore. >> unfortunately as he pointed out, we are seeing that trickle down effect regulations. they are impacting those. is that an important thing for to you address? >> two things at the same time. we have to make sure our system is safe and sound and we are not
explosioned to the crisis that did so much damage to the country in 2007, 2008. we have to be asking ourselves are there things that we can do to make it easier for small financial institutions? we are doing both. >> the banks are asking the community banks that did not cause the financial crisis. when can we expect to see action rather than talk? >> you know, the kinds of things we discussed in this hearing room and other hearing rooms, there areas like the regularity of reviews for small banks. we are open to having conversations. when we see a piece of legislation that would repeal major parts of reform, that's a place we are not going. can you have a conversation about the reasonable thing?
>> i committed questions to you on june 17th, 2015. i hope you will give prompt answers to my questions. >> they are all easy. >> on the subject of t tip, i know my colleague touched on that, but i want to have a nuanced question on that. you have been involved in the negotiating team. are you pleased and that's from the breechings of it. >> we are making progress. they should be part of the negotiation. i don't believe that we made progress and to shift the discussions to the existing
international bodies that are set up to deal with it. >> there is there is a real important issue over in the subject of data management and datacenters that was a big part of that for financial services or not included. >> the tpp. >> i'm sorry, tpp. i heard concerns that it's problematic. the financial services, our international services, the companies are not being treated. it's not like non-financial services. >> we opposed the requirements. i put a considerable amount of effort into making sure that was not required in parts of the services industry like electronic payments where it was no more than and in the area of financial institutions, they feel they need to guarantee
access to timely and appropriate prudential information. also the needs of regulators to be guaranteed information. we are trying to work our way through to see if we can thread the needle. tpp is closed so we can't reopen it. in a side piece, the question is going for the. >> i think the financial players provide data that they need to do their job. they are meading expectations and the biggest investments in
the world that are headquartered here. >> the problem did exist in the 2008 crisis. it's not ancient history. >> i understand and people changed a lot of things. >> we are trying to work our way through. they are fastill tated with the tarp on favorable terms and closed down that part of the program. a lot of small banks have not had that treatment and those in the community development program. if people bring you a market oriented offer to exit their tarp position that they can be done by the end of the obama administration.
>> it would be my hope to say that tarp was done. >> they were bringing the exits. >> it has been challenging to get proposals of the quality you describe. that's why it has been slow. >> i recently introduced a bill that was marked up and moved forward on commercial securities. i think they will put commercial securities in jeopardy from refinanced risks and treasuries should be interested in the bill we put forward. >> i'm happy to take a look at it. >> i would like to follow-up on
the discussion from new hampshire. one of the new regulators as a result of the financial regulations is the cfpb. they have a new office building for the employees downtown and it cost about $200 million. the taxpayers didn't own the building. they spent that amount of money to rehab it. i think that's a huge waste of taxpayer money. the director was here in march. he testified in front of the committee when he questioned him and i quote, it was the treasury who was in charge of all bureau operations at the time. my question to you is there have been follow-up letters that date back 288 days asking you specifically in who they were,
who in fact did they say it was you folks are in charge made the decision to waste that kind of money. do you know who that was? >> i responded earlier that we did follow-up on this and provide the inspector general findings. >> it was dated june 16 and the treasury is working to respond to the request. the treasury is working to respond to the request. it was signed and i am asking you for a commitment. if you don't mind, can you give me a specific day when you get back to us, who is public for wasting that kind of money. >> without agreeing to your characterization, when will you follow-up? >> give us the date when you are responsible for making that decision.
>> after this meeting we will get back. >> it's 288 days and i don't want to be rude, but that's an awful lot of time. >> they found that the they were finalized afterwards. they have responded, but i'm happy to go back. >> these are very simple questions i'm asking. they are not complicated at all. you as the treasury, if you are unwilling or unable to answer a simple question, it puts in doubt how you will be able to make the decisions that affect our capital markets. >> we're provided 200 pages of information on the condition of the building and when it was transferred. we have given a lot of color and i'm happy to look and see what you are looking for and see if we can be helpful. >> you won't give me a specific
commitment so let's move on. you are familiar with the budget that was submitted by president obama that never balances ever. you are also familiar i assume with the fact that it increases spending and increases taxes by 3.4 trillion. are you familiar with this budget? >> there is a variety of policies, but it would restore taxes. >> i'm sure you also know that this budget that never balances increases the debt and triples from when the time the president arrived. >> we stabilized that gdp. >> our budget assumes interest rates. >> i'm also assuming that you are familiar with the
projections that in three years, the annual interest payments on the debt at that time will be about $440 billion in year that will equal what we spend on medicate and you are familiar with the fact that in seven years, the omb projects the interest on the debt will exceed what we spend on national defense. my question to you, sir, they continue to commit budgets to us. they increased the taxes and the debt and never balanced. at what point do you think those interest payments, not the percent of the gdp represented, but when do the interest at the same times become a concern of yours? >> as gdp grows, nominal dollars grow and having cut the deficit from 10 to 2.5% put us on a stable path. we have more work to do. we are not in a moment of
crisis. we are in a sustainable place. >> i would debate you on that with all due respect. i am a treasurer of maine and 49 states have to balance their budgets. they spend what they want and borrow what they need. do you think a balanced budget to the constitution is something that we need? >> i do not. >> tell me why you do not. >> i think you are out of time. >> appreciate that. if the secretary would respond to that question. >> i think the responsibility for making the policy and the mechanical approach that would be very, very bad and happy. >> with all due respect, bills have been submitted. the american people have seen this congress and the administration cannot live within their means.
>> time has expired. today without objection, the members will have five additional days. for the witness to the chair will be afforded to the witness for his response. we have over 100 questions. that's from the june hearing. i would ask the witness to take this seriously the objection will have five legislative days to explain to the chair for inclusion in the record. this hearing stands adjourned.
later today on c-span, the semiannual munk debate from toronto with a look at the global refugee crisis and how developed nations should deal with it. we'll hear from a former u.n. high commissioner of human rights and the leader of the uk independence party. you can watch that debate tonight on c-span at 7:00 p.m. eastern. and tonight here on c-span3, american history tv. it's road to white house rewind with presidential debates from the 1960s and the 1980s. we start at 8:00 p.m. eastern with the 1960 west virginia democratic primary debate between then senators john f. kennedy and hubert humphrey. then a 1980 debate between ronald reagan and george h.w. bush and also a 1984 democratic primary debate.
i am a history buff. i do enjoy seeing the fabric of our country and how things -- just how they work and how they're made. >> i love american history tv. presidency. >> american artifacts, they're fantastic shows. >> i had no idea they did history. that's probably something i'd really enjoy. >> with american history tv, it gives you that perspective. >> i'm a c-span fan. former house intelligence committee chairman mike rodgers now a radio talk show host spoke about cyber attacks from china, russia's intervention in ukraine and the iranian nuclear program. from the heritage foundation, just over an hour. >> let's try to set the stage
for our discussion and if you could, paint a broad picture for us regarding how the president gets intelligence information. obviously he doesn't just turn on the news and watch it. but since you served president bush let's focus on your time in the white house and president george w. bush's routine. what was his intelligence routine? the daily routine that he had with respect to reseerveing intelligence briefings. what was your role in that? >> so, my sense is that it varies president to president. the presidents i know well are george h.w. bush and george w. bush. and certainly george w. bush even better. in president bush and vice president cheney, you had two
people who were a vid consumers of intelligence. believed in the importance of intelligence and it was how each of them in separate ways would start their day. vice president cheney, for example, would have his briefer in and david addington can talk in more detail, have his briefing in and get an intelligence briefing before he walked in to sit down with president bush to hear the intelligence briefing presented to president bush. and would comment on that and sometimes add items that he was aware of that maybe had not been covered by president bush's briefer. so you had two people who were avid consumers of intelligence. we tried to get intelligence to him and to them in different ways. of course, the one everybody knows about is the pdb, the president's daily brief which is a book with a series of intelligence pieces. that a briefer comes in, hands to the president of the united
states and walks the president through piece by piece. and some presidents get the briefing book before and dispense meeting with the briefer. some presidents get the briefing book before, and then talk about it with the briefer. president bush was someone who could actually read and listen at the same time. i have trouble doing either one, but certainly, have trouble doing both at the same time. he could both listen and read at the same time. and he started his day six days a week with that briefing. consuming intelligence means that you are not necessarily passive. but he would ask questions, and he would push, and he would many times say, now i'm not pressing you to change your opinions. i'm not pressing you to change your opinions, but i want to test you because i want to know what you know, and i want to know how confident you are in
what you're telling me because that allows a president to know how much weight the president gives to what they're being told. so there would be a back and forth. and most intelligence analysts, i think, like that. indeed, one of the things we started late in the bush administration is try to get -- usually a president has a briefer that briefs all of the elements in the pdb, but they're written by other analysts. we would try to get the analyst who actually wrote the piece to come in and sit down and brief the president and vice president and the rest of us sitting around so that the analyst could hear firsthand what was of interest to the ultimate consumer of that intelligence. >> i'm sure that was somewhat unnerving for some of these first-time analysts. >> it was unnerving, but the blowback we got from it was that they loved it. they loved it.
and it really showed in them in vivid turns the value of what they were doing. of course, that's what really we all like. we like being valued for what we do, and that was a real affirmation for those analysts. we did a couple other things. there is a tendency when you brief the president on intelligence, if you have a sort of hands-on president, the president would then say, well, what are we doing about it? let's talk about the policy initiatives that ought to come out of this intelligence. and the problem, of course, is he's talking policy without any of his national security principals who are supposedly his policy advisors sitting in the room. so one of the things we started to do is that those intelligence pieces that begged for a policy discussion we would schedule on wednesday, and we would invite the secretary of state, secretary of defense, chairman of the joint chiefs to join that meeting. so everybody could hear the intelligence presentation and then you could have an initial policy discussion if there's
something to be done with it. we'd then put it in the interagency process then for further work. the other thing we would do is on tuesday, we would have a threat briefing. i think it was tuesday, david. tuesday we'd have a threat briefing, and director of homeland security and the fbi director was there, and we would talk about the threats that they were working -- that were a problem for the country. and the president could, again, interact directly with those people responsible for dealing with those threats. and on thursday, the cia director would come in and join the intelligence briefing, and he would then talk about cia operations that were ongoing, again, so the president could hear directly from him and he could hear directly from the president. so we tried to mix it up, and in some sense have an intelligence week, if you will. and the last thing i will say is, we started -- i started
working with mike mcconnell, who was then the dni, and we would look two or three weeks ahead, and we'd look at the president's calendar, what trips was he taking, what foreign leaders were in town that he was meeting with, and what issues were coming up to him for decision through the interagency process. we'd map intelligence briefings against those so that the president would get the day or two before an intelligence briefing on egypt if he was meeting with the president of egypt, or on china if he was going on a trip to china, or on some issue if he was going to have to be asked to make a decision. we tried to really structure it so the intelligence would support the policy process. >> you've described the battle rhythm, the weekly battle rhythm of the intelligence briefings. what time in the morning are we talking about here? >> 8:00. >> all right. and who was in the room usually?
>> the president, the vice president, the chief of staff, the national security advisor, the dni, director of national intelligence. that was the core. then it would be supplemented on wednesday and tuesday and thursday, as i described, with other actors. but that was the core group of people. that were in the room. david, have i missed anybody? got it? >> negative response from addington. >> david addington's back there. he's going to correct me as i go. he's the repository of all the stuff. >> did you know personally governor bush? did you know him when he was running? when did you first meet president george w. bush? >> i was -- it was in the campaign period, probably late 1998, early 1999. i was asked by condi rice and paul wolfowitz to come down to sit in on a meeting and brief then-governor bush. that's how i got started to know him.