The Senate Banking committee where treasury secretary steve new chin testifying on the treasury mnuchin testifying on the annual treasury report. We called thousands of Small Businesses in the state of nevada. Hundreds were on the line, questions were asked specifically what this new tax bill, what do you anticipate your Business Practices will be for this year . 90 , 90 of the Small Businesses in nevada said they were planning on expanding their business. That they are going to hire more employees. They are going to provide bonuses, pay raise, and increase their minimum wage for their business. The 0 90 said they would do parts, all, or some. It wasnt a professional survey, i was pleased to know that what the white house and what your department attempted to do in december, i do believe were being delivered on what were seeing in the state of nevada. We have had south point casino, said its going to double its 2,300 fulltime workers bonuses. Fountain blue, developers, said they are going to resume a stalled project. And that the effects of that would be creating approximately 10,000 jobs. Were seeing this across the state of nevada. I want to thank you, the white house, and all your efforts of putting us where were today and seeing this kind of expansion. What do you anticipate Economic Growth to be this year . Secretary mnuchin first of all thank you for your comments. I think as you know the tax rate on Small Businesses is the lowest its been in 1930s. Were seeing that in terms of a pickup in growth. Wed expect, again over the next several years, sustained Economic Growth of 3 or higher. Senator heller i was in your office and you showed me a comment, written note from the president saying he wants 5 growth. When will we get there . Secretary mnuchin he has delivered high ambitions for us. Senator heller what positive effects will we see in navy nevada . What positive impacts well see the next couple years through growth and Business Activities in the state of nevada . Secretary mnuchin one of the most important things is that we expect to see Wage Inflation for the average american worker. Their wages have gone nowhere. Its been a great time for financial people. And one of the benefits we tax bill ise of the wage growth. Senator heller what do you anticipate with capital coming back into the country . Apple just announce add new Data Center Expansion in reno. Its a 30 billion Capital Expenditure over the next five years. Can we anticipate, or what do you anticipate over the next five years with capital coming back into the United States due to this tax bill . Secretary mnuchin we expect a lot. I had the pleasure of meeting with tim cook recently to talk about their investment. Obviously they are bringing back hundreds of billions of dollars. They are paying a very large tax to do that. They have made a major commitment to invest in the United States. I also had the opportunity to meet with many c. E. O. s of International Companies that has a result of the tax bill are now committed to bring manufacturing into the u. S. We look forward to that. Senator heller mr. Secretary, im pleased that youre here. To the chairman, were seeing some huge expansions in the state of nevada. Some of it is causing problems. In northern nevada Housing Starts are behind. With the kind of expansion we have seen come from this legislation passed in december, the jobs act, its doing exactly that. That technology and Technical Companies coming to the state of nevada. We can list them from amazon to tesla to apple. The list of organizations moving into the northern and southern part of the state has been pretty credible. Im just pleased we have the treasury secretary in for what purpose does of the us in front of us today to expound on these issues. Thank you, mr. Chairman. Thank you, senator tester. Senator tester thank you, mr. Chairman. Ranking member, thank you for being here secretary mnuchin. Are you familiar with the marketplace fairness act . Sales tax . Secretary mnuchin i am. Senator tester will you and the president opposed to creating this . Secretary mnuchin i think the president is fundamentally supports the idea of some type of sales tax across the board. We look forward to working with you and others on that. Senator tester what youre saying is the president would support a National Online sales tax . Secretary mnuchin in my conversations with the president on that, he thinks that there are aspects of that that he likes a lot. He looks forward to working with you and others on it. Senator tester would you direct the Treasury Department to conduct a study on what i believe would be burdensome costs on Small Businesses and nonsales tax states . Secretary mnuchin i would be more than happy to work with your office on that. We think theres ways of dealing with that. Senator tester wed love to have that conversation to figure out how we could do that. N a previous question on entitlement reform, you had said that you had not made the social t to protect security and medicare. That the president had. Does that mean that youre looking to do reductions in Social Security and medicare . Secretary mnuchin not at all. Senator tester what does that mean . Secretary mnuchin it just meant, it was a comment i was referring to at the time. The president made that commitment, i have every reason to believe hell continue with that commitment. Senator tester do you believe personally youll support him . Secretary mnuchin whatever the president wants to do, i will support. Senator tester do you believe at a 30year fixed rate note would exist without a government guarantee . Secretary mnuchin i think that a 30year i think its critical that we have a 30year mortgage. I dont believe that the private markets on their own could support it. So i think one of the things were looking at is very Different Solutions around that. Senator tester i got you. I dont disagree with any of your comments you talked about with the g. S. E. Potential reform putting private money ahead of taxpayer dollars. The question i have, it relates to a previous person sitting at that desk a few days ago, that said he believed that the 30year fixed Rate Mortgage would occur without a governmentbacked guarantee. By your answer, i think you disagree. Do you believe that a 30year fixed rate, even with public dollars up front, you need that government backstop at some point in time . Secretary mnuchin again, im not trying to be cute. I think this is a complex thing. What i do believe is that fannie and freddie would not be able to exist without either an implicit or explicit government guarantee, and if there is an implicit garnetee, i would want taxpayers to be paid for it. This is something that were working with people and looking for solutions. Senator tester it is complicated. I agree. We need a 30year fixed Rate Mortgage in this country. As we talk about g. S. E. Reform, there are plenty of options on the table, we need to make sure we dont do something that puts that at risk. It would have incredible impacts on the Housing Market and affordability. Secretary mnuchin i agree with that. Senator tester lets talk about fsoc for a second. It was put in in doddfrank for nonbank financial dont need to give you a lecture. You know that. Taken theas basically companies that were designated and indeed designated them. I assume you did research on that and found out that they were not systemically risky . Secretary mnuchin actually, thats not the case. The only company that we dedesignated as a result of them not being financially systemic was a. I. G. , where they had delevered and cut their risk significantly. Thats why that judgment was made. Thats the only company we made that judgment. Senator tester that decision was the dedesignation for prudential and metlife didnt happen . Secretary mnuchin the decision on metlife had nothing to do with the risk of metlife. The decision was there was a recommendation as it relates to a legal case t had nothing to do with the riskiness. And metlife could be subject to designation in the future. The issue was more a legal issue. Senator tester prudential . Secretary mnuchin would follow the same issues. Senator tester the question is, could you confirm that the council is still functioning and actively looking at companies, financial products, and assess their risk to the Financial System . Are they still working . Secretary mnuchin absolutely. Senator tester thank you. Thank you. Senator cotton. Senator cotton thank you, mr. Chairman. Thank you, mr. Secretary. Senator brown started his remarks speaking of a swiss ski resort. I assume he was referring to davos where the president addressed the Word Economic Forum last week. To my knowledge, all they do is have their party once a year. In another ski resort, bassle, they report to exercise Great Authority without accountability at the Financial Stability board. Lets address what happens in that swiss ski resort, mr. Secretary. I and other members of the committee recently sent the administration a letter, which raised concerns about the operation of the Financial Stability board. Were concerned its mored of into a global regulatory body morphed into a global regulatory body. As a quasienforcement tool pressuring u. S. Companies adopting global standards. Im concerned about that regulatory creep into u. S. Jurisdictions, especially considering how dissimilar our Financial Markets are from any foreign markets. For example, we have thousands of small lenders. We have independent asset managers. And Insurance Industry regulated by our states primarily. Simple question. Are f. S. B. Rules voluntary or binding . Secretary mnuchin they are voluntary. Senator cotton are they suitable to be used by u. S. Agencies orgulatory agencies or private litigation . Secretary mnuchin again, im going to defer to the lawyers on that. But my view is not necessarily. Senator cotton thank you. In 2015, four chinese banks sought an exemption there an f. S. B. Rule related to how much capital they have to hold. Given i agree with you these rules are voluntary, its strange they would have to seek an exemption from such a rule. Can you imagine a scenario which a u. S. Bank or firm would have to seek an exemption from an f. S. B. Rule . Secretary mnuchin the u. S. Banks are regulated by the u. S. Regulators. I think the purpose of the International Standards from our standpoint is to make sure that there is a level Playing Field for our banks. And that to the extent foreign banks have a lot less capital that there are certain standards that they would adhere to. But that is not legally binding. Senator cotton thank you. Talk now about the fsoc process for identifying systemically important Financial Institutions, especially under the last administration, as it relates to the f. S. B. In july, 2013, the f. S. B. Determined that three u. S. Insurers, a. I. G. , metlife, and prudential were globally systemic important insurers. But at that time only a. I. G. Had been designated by the fsoc as a systemically Important Institution in the United States. Pluedention wasnt designated prudential wasnt designated until december of 2013, metlife, december, 2014. E the f socks operates for months before they designated that, your predecessor at treasury antichair of the fed, two of the most important members at fsoc, had already determined as members of the f. S. B. To designate prudential and metlife as globally systemically important. If they are on a global scale, it must be systemically important in its home country. I wonder, then, how the fsoc designation process in the last administration for prudential and metlife could be considered fair and objective . The treasury and fed after all had already determined as members of the f. S. B. That they were globally systemic. Do you believe that this decision was simply a show trial y the fsoc in 2013 and 2014 . Secretary mnuchin senator, since i wasnt there, i cant comment on specifics. I understand your concerns. I would say fundamentally i do believe that there should be better transparency at fsoc to the extent that companies are designated, they should understand why they are designated. And the basis of the risks. Senator cotton can we be concern we will not see a repeat of such a scenario which the f. S. B. Designates a u. S. Firm as globally systemically important before the fsoc designates it as systemically important in the United States . Secretary mnuchin i would not expect that to be the case. Senator cotton thank you. I think its a very important issue, financial exports around the world havent exactly covered themselves in glory for the last 25 years. Our nations, not just the United States, but in europe faced some turbulent political times with populace candidates and parties on both sides, right and left, across our nation, defeating more conventional politicians and parties because after failure of our countrys leaders to deliver stable, prosperous conditions for our citizens. I think its important to remember that were countries that are governed by our citizens not by our experts. Certainly not by unelected xperts at swiss ski resorts. Senator shoths. Senator shoths thank you, mr. Chairman. Thank you for being here. I want to try to get in three questions. The first is about the debt ceiling and debt limit. I heard the Vice President was at least opened to the notion of repealing the statute overall. That is very attractive to me. Having been here under a democratic president with a Democratic Senate and republican senate, can i say definitively that utilizing the debt ceiling statute as a sort of opportunity to take up policy ransom only harms our country. So im wondering whether you would be willing to work with us on a statutory fix to just repeal this thing once and for all. I understand the political difficulty of doing it, because on the record youre increasing the a debt that the country is under. But the fact of the matter is, there is no evidence that having a statutory requirement that we do this every six months or 12 months or 18 months reduces spending at all. Reduces the deficit at all. Im wondering if you could work with us. We need a political Political Support on the republican side. I know they want to get rid of this as badly as we do, but they need cover from the administration. Well need to work with you on this if youre opened to it. Secretary mnuchin i have spoken to both the president and the Vice President. Were very opened to Bipartisan Solutions to figure out something as an alternative to the Current System i think many of us would agree doesnt work well. Senator schatz thank you, your comments on the dollar in davos surprised a lot of people, raised a lot of eyebrows. I want to give you an opportunity to expand on them or clarify them if you wish. Secretary mnuchin sure. Thank you. I have tried to clarify this now many times. This was a clearly a situation where at a press gaggle i made a comment that had three parts to it. That was extremely balanced and very specific. It was not anything new. The molest took the press took one part out of this and kept on playing it over and over. Let me be very clear. I absolutely support a long dollar, strong dollar as being in the longterm best interest of the country. And i strongly support we have a free currency market that we dont intervene in in and have relied upon the most liquid market in the world. The shortterm is not a concern of us, and it was no way intended to talk down the dollar. Whatsoever. Senator schatz thank you. Yesterday the administration declined to impose sanctions required under the bipartisan russia sanctions law that passed with overwhelming majorities from the house and senate. Its not clear which parts are waiveable and which parts are not. Were still doing the analysis. Whats clear to the extent there is discretion to weigh or delay, the administration has to have factual findings. So can you tell us what those findings are . Secretary mnuchin senator, again, i think thats a very unfair characterization of what we have done. As i have said, there was an extraordinary amount of work that went into this. The classified report is hundreds of pages. I look forward to congress reviewing this. Our sanctions Going Forward will be based upon a lot of the work that the Intelligence Community did. It was our interpretation that we had to deliver the report to congress yesterday, which we did and we fulfilled. Again i want to commend a lot of career professionals, senator schatz you are saying you didnt delay . Secretary mnuchin we did not delay senator schatz its just not implemented yet. That sounds like a delay secretary mnuchin no. I think as you know our sanctions are based upon an enormous amount of intel work. There was an enormous amount of work that went into creating this report and thats what we did. And now we will take the basis of that report and look at kind of, as we do in the normal course, where its appropriate, to put sanctions. No way to be interpreted as were not putting sanctions on any of the people in that report. Senator schatz ork. One final question ill take for the record. On sifi designations, im trying towns the underlying statute, im trying to understand the underlying statute is about the stability of the system and you seem to be introducing a new criteria which has to deal with the burden on the institution thats designated systemically significant and im trying to figure out why that would matter under the policy objectives of the law itself. If we are trying to figure out if something is systemically significant it actually shouldnt matter whether there is a burden on the institution designated. If we wanted to provide you with that discretion we would have written the law accordingly. Ill just take that for the record. Sorry for going over. Senator crapo thank you. Senator corker. Senator corker thank you, mr. Secretary, for being here. As you know we talked a lot about the tax reform a great deal in our office. Ill have to say i was surprised. I saw Christine Legard at the event last week and i went there because of my Foreign Policy activities and i will say she revised upward world Economic Growth because what the United States has done which is quite shocking to me actually. To see what other countries are doing in response to what we id with tax reform is pretty amazing. I did say it seems to be having an impact far beyond what we did beyond our own country. On the russia issue, im very interested in this. I was a big part of this passing, working very closely with crapo and brown. I think what they have done is exactly the right thing. We gave a period of time to warn people about doing business with russia. That was a purpose of it. Our diplomats were involved in that. They did keep numbers of transactions from occurring. They put together this report and now the process is they will begin sanctioning. So just for what its worth, someone as you know thats more than glad to offer criticism if i think it needs to be offered, in this particular case i do think they handled it in a way that it is supposed to be handled. I look forward to sanctions being put in place for those violators. On the issue of Housing Finance reform which senator crapo brought up earlier. I know you have been involved in this in the past, understand it well. Let me go through a series of questions quickly. The conservatorship that we now have is unsustainable, is that correct . Secretary mnuchin yes. I believe so. Senator corker and if we have a new model of Housing Finance reform, and there are both on both sides of the aisle that are working together and have worked together in the past, if we have a government guarantee in the future, would it not be your preference that that be at the actual security level and not at the entity level . Secretary mnuchin that would be my preference. Senator corker so i think most of us understand whereas last time taxpayers had to bail out with hundreds of billions of dollars the entities. What we really care about is the individual borrowers and their securities are guaranteed, is that correct . Secretary mnuchin thats what would create a sustained liquid market. Senator corker i assume if we were able to pass something here you would want significant private capital in advance of an explicit guarantee where if we are issuing guarantees whereas was not the case in the past, these whatever entities are actually paying for those so the government is getting something for the eagle stamp thats causing that 30year mortgage to be guaranteed, is that correct . Secretary mnuchin thats correct. So taxpayers would be compensated for any unlikely risk. Senator corker and i assume if we were to put in place a new regime, we will want to do what we could to end the toobigtoo fail situation we have today, is that correct . Secretary mnuchin i believe so. Senator corker so let me in the event we dont act, we passed jumpstart which said we can only revise these entities through a process of us acting, that ended december 31 at midnight. So now the administration, if they so chose, and i think you committed to the fact you are not going to leave things as they are, what would be your options if we dont act and i hope that we will i mean, what would be your options with these entities . Secretary mnuchin there are certain administrative options we have. These entities are very complicated and i would just say my strong preference would be to work with congress on a bipartisan basis to reach a longterm solution. Senator corker yeah. But in the event of this great bipartisanship doesnt survive and we dont get this done, its a very complicated topic, what are some of the steps you might take . For instance, i know in past administrations, the notion of putting these entities into receivorship and moving forward with a clean slate has been laid out. Is that something you have thought about . Secretary mnuchin again, we thought about and considered lots of things. I dont really want to go through in this format publicly all the different alternatives. You and i have spoken. I will be more than happy to come and speak with you. There are lots of alternatives. I do want to be careful to say they do have lots of impacts. Senator corker i appreciate your leadership on this issue and extreme knowledge. I will just say to the chairman, i know this is one of your goals. Got an y believe we opportunity to do something thats a very complex topic that matters. We have an administration thats willing to work with us. And i think for the first time we have an opportunity because of just all the things that have occurred that we have a lot of interest out there. Lets face it. We have people that have shareholders we have shareholders in these entities today. I understand that some of the rubs that have existed there. I think we got an opportunity, though, to really deal with all of the interest in a manner that is fair but also move our nation ahead in a manner that we dont have these two behemoths that are 100 right now backed by the federal government. I hope well get there. Senator crapo thank you, senator. Senator warren. Senator warren thank you, mr. Chairman. After the 2008 financial crisis, congress created the Financial Stability Oversight Council in order to monitor the risk in the Financial System and one of fay socks main fsocs is to, quote, ion dent fight gaps that could pose risks to the Financial Stability of the United States. Now, mr. Secretary, you are the head of fsoc. Despite that role you appear to support a bill that this committee has passed that would roll back the rules on banks between 50 billion and 250 billion in assets. Thats about 30 of the 40 largest banks in this country. So what i want to understand today is, why youre so confident that that wouldnt pose a risk to the Financial Stability of the country. So mr. Secretary, how much do these 30 banks hold collectively in assets, deposits, securities, and so on . Secretary mnuchin well, first all, i think that we have very significant regulators that will continue to regulate those senator warren thats not my question. Excuse me, mr. Secretary. I am asking a straightforward question. We are talking about changing the rules. Secretary mnuchin yes. Senator warren that 30 of the 40 largest Financial Institutions would lose their designation, automatic designation as systemly financial institution, that 30, how much do they collectively hold in assets . Secretary mnuchin its a large number. Senator warren a large number. How about 4 trillion . How about 4 trillion, does that sound about right . Secretary mnuchin thats correct. Senator warren whats that portion of the g. D. P. . Thats about a quarter of the g. D. P. During the 2008 financial crisis, do you know how much the taxpayers had to pay out in bailout money to those 30 of the 40 largest banks in the country in order to keep them up and floating . Secretary mnuchin again, i assume you have that number there, too. I dont have it in front of me. Senator warren its 50 billion. Nearly 50 billion. So im a little surprised that as the head of f sock and the secretary of the fsoc and the secretary of the treasury that you would support a bill without knowing how much youre actually reducing the regulation on in these giant Financial Institutions. These banks hold the equivalent about a quarter of the entire economy. They got 50 billion in bailout money less than a decade ago, and yet you think we can roll back, reduce our oversight of them now. So let me ask do you think that these 50 billion to 250 billion banks cant pose a risk to the Financial System . Secretary mnuchin again, there could be banks, ok, that do pose a risk and could be designated. The purpose of this is many of those banks are Community Large community, Regional Banks that senator warren sorry. Are you saying a bank of 200 billion is a Community Bank . Secretary mnuchin theyre Regional Banks. Senator warren are you saying Regional Banks cant pose a risk to the Financial System . Secretary mnuchin i didnt say that. I said many of those banks dont, ok . There is something i believe there is bipartisan support for. Senator warren and my understanding secretary mnuchin again, i think senator warren if they dont pose a risk, you can always alter under the current rules how you regulate them. The question is the immediate designation so you keep them on the watch list. You know, its clear to me that these banks do pose a risk to the economy and thats the reason that Congress Said they should be on a watch list. But let me take a specific example. In the years leading up to the financial crisis, countrywide financial issued one out of every five mortgages in the country. It did more subprime and teaser Rate Mortgages than almost anyone and it turned around and sold them to wall street banks. It basically created all these grenades, took the pins out, threw them in the economy and helped blow up the American Economic system. At the height of its impact on the Financial System, about 18 months before the crash, countrywide was a 200 billion bank which is actually smaller than some of the banks that would be deregulated by this bill. So my question is, mr. Secretary, why would you be so eager to take these banks off the watch list to deregulate it and make it easier for them to follow whatever practices they want to follow . Secretary mnuchin first of all, senator, i share your concerns about countrywide. I think there was lots of mistakes that went on there, particularly with the mortgages that they underwrote and lots of blame to go around. Again, we believe that these entities below this size can be regulated by their primary regulators. But let me just say, this is something that requires bipartisan support, and its up for congress to decide whether they want to raise the limits. Senator warren thank you, mr. Secretary, but as i understand it, you have been pushing on ising the raising the rate raising the level from 50 billion to 250 billion. If you think that means we will be taking on more risk in the system, and i think thats what it means, i wish you would tell us so. You know, the banks have record profits right now. They are rolling in money. They just got a giant tax giveaway. They got even more money. They do not need another chance to blow up this economy. Thank you, mr. Chairman. Senator crapo senator toomey. Senator toomey thank you, chairman. Let me stay on this topic since my colleague from massachusetts brought it up. I think an important point that needs to be stressed here, and i am curious to see if you agree, mr. Secretary, but these banks that are 50 billion to 250 billion and under this bipartisan regulatory relief measure would no longer be automatically designated as sifis, they are extremely heavily regulated anyway. Outside of a sifi designation, absent a sifi designation, is it not true that these banks are subject to a huge wrath of regulations that has nothing to do with the sifi designation . Secretary mnuchin thats true. They could be regulated by four different entities. Senator toomey multiple regulators. Isnt it also true these banks now have huge capital standards, the industry is generally extremely heavily capitalized, isnt it also true they have very high liquidity requirements, new requirements that didnt exist prior to the crash . And isnt it also true that most of these entities engage in pretty ordinary, plain anilla banking as opposed to the exotic as the truly enormous banks, are those all relatively secretary mnuchin relative statements. Senator toomey i think those are the reasons why its perfectly reasonable to not automatically designate for yet another regulatory overlay those banks that dont create the systemic risk. Let me briefly thank you and congratulate you for your work and that of your team on tax reform. You folks in your organization were terrific to work with, and the collaboration between the administration and Congress Allowed us to produce something thats enormously constructive. I think you mentioned in response to a question that it is the view of treasury that we are likely to have approximately 3 Economic Growth for some time, did i understand that correctly . Secretary mnuchin that is true. I just want to particularly thank you and senator scott and others who worked very closely with us on the tax plan. Senator toomey well, thank you. I would just point out the Congressional Budget Office forecasted prior to the tax reform that our Economic Growth would average 1. 9 . We are now at approximately 3 before the tremendous benefits of this tax reform have fully kicked in and were already at the 3 . If we sustain anything close to 3 , just for the record, the federal government will take in much more revenue as a result of a bigger economy than we were projected to take in with 1. 9 growth, is that true . Secretary mnuchin that is very accurate. Senator toomey i think its a very important factor. I want to touch briefly on the discussion of mortgages. I am eager to see us make some progress on this. I would im pleased that there seems to be a consensus we should have private capital in front of taxpayer risk on guarantees. I would disagree with your view, but this is understandably a subjective matter that a government guarantee is a necessary precondition to have a liquid 30year mortgage. As you know very well, the average life or the duration, however you choose to measure it, of a 30year mortgage is less than that, typically depending on Interest Rates and how you look at it anywhere to maybe seven years to 12 years is about right and we have a number of other nonguaranteed 30year securities that play a very Important Role in the capital market. I would just urge us to consider what i think is a very likely probability that we could have a very robust 30year Mortgage Market without requiring the taxpayers to be at risk. Very quickly. Im running out of time, mr. Chairman mr. Secretary. North korea, we recently were seeing stories now yesterday or todays wall street journal reports, Behavioral Changes by the regime in north korea that might be linked to the sanctions that are making fuel, for instance, more difficult for them to obtain. I hope thats true. I think that strikes me as constructive, but i and my colleague on the committee from maryland, senator van hollen, have legislation called the brink act which i think you are aware and which your staff has been very helpful. This would require new additional round of sanctions against Financial Institutions that are facilitating business with north korea. I think this is very important, and i hope youll support our effort to get that done. It came out of this committee with unanimous vote, i believe. Secretary mnuchin thank you. Se senator heitkamp. Senator heitkamp thank you, mr. Secretary, for coling. A couple followon secretary, for coming. Just a couple followon points. No one wants to limit the ability of the economy to thrive. I think its critically important we make the public understand that we simply went the bill from designating automatically to basically allowing the regulators to designate someone some entity as a sifi. We havent abandoned that process so i want to make that point. Also want to make another point. I think its fascinating when people here cite c. B. O. Statistics but they dont want to take all of c. B. O. Its called cherry picking. Cherry pick the statistics that most that makes your argument. Whether its we are going to have a 1. 9 projected growth when the growth has been over 2 for a prolonged period of time. So i want to talk a little bit about c. B. O. Projections because the love fest that were having here need to have a little discussion about c. B. O. Forecasts on deficits which as you know moodys has recently issued a report are the considerations and results of the tax bill. Its not exactly consistent with the story that were hearing today. So c. B. O. Forecasts that the administrations 1. 5 trillion tax bill will send deficits to 4. 6 of Gross Domestic Product by 2020 versus 3. 6 under the forecast made last july. So, you know, talking about, you know, they were forecasting lack of growth. Obviously the forecast today is that were growing the debt. The publicly held debt, which doubled as a share of g. D. P. During and after the recession, was projected before the tax cut to rise from 78 to this year to 91 over the coming decade. The c. B. O. Now expects the tax ange to send this ratio to 97. 5 . You know, if were going to use c. B. O. Statistics, lets use c. B. O. Statistics. And this is its like we handed a credit card and at the same time we handed a credit card with debt on it to the next generation. Were failing to fix over 50,000 bridges. Thats another way to hand debt and deficit on. I know the administrations looking at an infrastructure plan that could in fact be adopted here. Its not going to be robust enough. Right now if you look at the corps of engineers. E corps of engineers has a queue of projects. If they dont take another dime, it would take another 17 years in current dollars to finish those projects. We now made a choice, we made an economic choice and we made an economic gamble, but lets not pretend we havent taken a risk here, that this is all rosy. If we do not pretend we are being fiscally responsible every day were here. I am going to leave it at that. I want to talk about something that hits people every day and thats the insecurity and multi employer pensions. We got a plan which the Ranking Member has ably presented, the butchlewis plan. Its incredibly important to thousands of north dakotans, thousands of people. The president promised to help exactly these people who now are being threatened with dramatic cuts in their pensions. Will this Administration Support the butch lewis bill and help us get it on the spending package . Secretary mnuchin first of all, let me thank you for your comments on the regulatory issue because youre right. It doesnt preclude the regulators from designating i think that was an important point. The multiemployer pensions, its a very complicated issue i had the opportunity to study this the last year and meet with workers on this issue and we look forward to working with you on Different Solutions. Senator heitkamp whats your plan . These are the people that the president said he would work with. We are trying to fix this. We havent gotten a lot of help from the other side of the aisle. We need you guys. We need the administration thats made a commitment to stand up for these workers who are threatened with, in my case, some 70 reduction in their pensions. That is unfathomable, thats unspeakable, and so can you help us . And whats your idea . If you dont like butchlewis, whats your idea . But lets get this done. Secretary mnuchin we look forward to working with senator heitkamp you know, i hear that all the time, i look forward to working with you. You know, this problem has been hanging out there. We have a solution on the table. We need a result. Its not enough to have a process. We need a result for these pensions. And i want to thank the Ranking Member for the excellent work that he and his staff have done on this. Were proud to stand with you, and if thats not the solution, tell me what is. But these folks need to be made whole. Senator crapo senator scott. Senator scott thank you, mr. Chairman. Secretary, good to see you again. Let me say at the beginning as senator toomey did, thank you for your hard work on the tax reform package. You have helped accomplish something thats not been done in over 30 years. And specifically thank you for helping the i. R. S. Get the new withholdings done in time for hopefully the february 15 paychecks. My understanding is somewhere around eight out of 10 employees will see more money in their takehome pay. That is significant progress for folks who are living paycheck to paycheck. They are going to have a greater appreciation in intangible way of the success of this administration and frankly of your leadership so thank you for that. Id also like to say thank you because between the president s executive order last spring and the treasurys report last november, the administration has made solid progress on the issue of nonbank sifi designations. But imagine getting pulled over for speeding in a neighborhood without any speed limit sign. Kind of how you get designated sifi from a nonbanking perspective. Then imagine the ticket doesnt have any instructions on how to pay it. Thats how you find your way out of being a sifi. I like to make sure folks back at home who are not involved in the financial industry at all understands and appreciates the complexity of something that is as profound as sifi designation but do so in language that we all understand and appreciate and that is just how dizzying this process is for the average person to understand and appreciate, but the impact on those folks because of designations is significantly higher costs in doing business. There should be clarity around what gets you labeled as a sifi and what gets you off of being a designated. Without a doubt, fsoc should release public explanations for its designations. So my question for you, and i know you agree with much of this, is what specific steps are you and fsoc taking to bring about these needed reforms . Secretary mnuchin thank you, senator. I thought that was a good and interesting analogy. I share your view on transparency. Doesnt mean people cant get tickets but we have to post the speed limit. So we are working with the committee on looking at guidelines and trying to figure out how we can have more transparency in the process. Senator scott thank you. Whats the level of involvement of other councilmembers in recent fsoc decisions . Secretary mnuchin very active. Senator scott good. Theres been some questions about that and i think its important to recognize that fsoc is still meeting. Secretary mnuchin absolutely. We have had public and private meetings and robust discussions with the principals and the staff. A lot of work has been done this year. Senator scott thank you. Next question. Not congress, not you, but the District Court now requires a costbenefit analysis which i support. My question is, can you walk me through what an fsoc costbenefit analysis will look like, and whats taken into consideration . Secretary mnuchin were working on that, and as we develop those thoughts, we look forward to coming to your office and reviewing those before they are implemented. Senator scott that will be an important part of the process. Thank you. Last question or just a statement. Last may i asked you reevaluate the need to include property and Casualty Insurance premiums under the reporting requirements. In october treasury issued a priority guidance plan that included doing just that. I appreciate your responsiveness and i hope i can count on the same level of responsively as we work with you on bond rating inclusions on the investor guidelines. Thank you. Senator crapo senator cortez masto. Good timing. Senator cortez masto i did time that perfectly. Thank you for being here, mr. Secretary. Interesting morning. So let me start off just a comment. I heard some of the conversation back and forth and i think in response to one of my colleagues, you made the comment its been a great time for financial people. That concerns me. Across many people this country who are still struggle and thats who we should be looking to is the working families. The other thing i want to point out, i am from nevada. We had the worst recession we have ever seen. We are still coming out of it. In fact there was a report that came out that shows that nevadas Economic Forecast is doing very well. Experts are bullish on nevadas overall economy this year, anticipated recovery. They cite four key markers for that outlook wages, because the average private weekly wage for nevada worker peaked in october, representing a 2 year over year. Construction. Its the Fastest Growing sector. Discouraged workers. The number who left the labor force because they couldnt find a job has dropped. And nevadas g. D. P. Has shown significant Continual Growth over the past five years. That is an incredible statistic considering we were the hardest hit in 2007 because of the economy. What i just cited to you was a report that came out in january 1, 2017, before you or President Trump were even in office. So the comments i am hearing today that somehow this tax reform bill contributed to where we are today in nevada to me is a misnoemer and it doesnt give misnomer and it doesnt give respect to the governor and every single republican and democrat in the state thats worked nevada to come out. But i hope the actions you do will help nevada and i think its questionable now where thats going to lead in the year to come. The other area thats very difficult in the state of nevada right now, and we have been having this conversation, is Affordable Housing. One in four renters pays more than 30 of their income for rent and utilities. Half of renters pay more than half of their income from rent. Only half a million benefit from section 8 or other h. U. D. R usda assisted housing. Four families receive no housing at all, one in four. Value has gone down. Some say this could result in 200,000 fewer affordable units built in the next decade. Wages are stagnant or increasing modestly but the rent is going up. When will the treasury address affordable rental housing crisis . Secretary mnuchin its an important issue and we look forward to working with you on it. Senator cortez masto ok. That seems to be the standard answer for everything. Let me ask you this. Will the president s proposed infrastructure bill include funding to invest in our Affordable Housing infrastructure . Secretary mnuchin i think when the president releases it there will be the opportunities in Affordable Housing as in other things. Senator cortez masto are you working with the president now to address those needs . Secretary mnuchin not specifically Affordable Housing but, yes, the overall infrastructure and that can be part of it. Senator cortez masto when will a scoring card be issued . Apparently there hasnt been one in two years. Secretary mnuchin i didnt know that but i will look into it and get back to you. Senator cortez masto half of workers do not have access to a retirement account at work. The National Savings rate is going down. How does the Treasury Department help people save for retirement . Secretary mnuchin again, thats something i looked at very carefully. And really the desire or the reason to get rid of it had nothing to do with our view on savings and we do want to. Its the cost of maintaining it, there were very, very few people who were using it with the staggering cost and we would rather reallocate that money to other ways we can help people in saving and retirement. Enator core tes mast cortez masto are you looking at those . Secretary mnuchin we are looking at different programs to encourage solutions. Senator cortez masto i want to know what you are looking at to make sure you are reaching out to my staff and working with us as well. I notice my time is all up basically up so i will submit the rest of my questions for the record. Thank you. Senator crapo thank you. Senator tillis. Senator tillis thank you, mr. Chairman. Secretary, thank you for being here. I want to go back. In over 10 years since the financial crisis, we have a bipartisan bill thats intended to provide regulatory relief for Community Banks and Regional Banks. Can you tell me a little bit about why you think thats important and what benefits are ultimately accrued to businesses and customers of those banks . Secretary mnuchin sure. First of all, i believe that too many of the banking assets are held in the large banks, and one of the ways to distribute risk is to allow the Smaller Banks to continue to grow effectively and not have them burdened by unnecessary regulations. So i think that, one, this accomplishes more diversification in the banking, and i also think lending is very important in terms to growing the economy. And in many cases, the local bank, the Community Bank, the Regional Bank has those relationships. They know how to lend and we want to encourage them to lend. Senator tillis do you think people wanting to start up a bank we got a very unhealthy, i think, situation in the banking ecosystem today and thats the number of de novo banks that have come up. Its a very disturbing trend in north carolina. We lost about half of ours since the financial crisis in a state that had a vibrant environment before in north carolina. Do you feel like a part of the reason why were just not seeing that churn on banks is at least in part attributed to the fact they have a regulatory hurdle that they would have to climb that makes it difficult for them to make the Business Model work . Secretary mnuchin i do. Senator tillis i want to ask also, tax reform. If you were lets say in december we failed to pass tax reform. And so the current tax regimen would be the next regimen for 10 years. Where do you think economically where we would be in a 10year period . Secretary mnuchin substantially lower than we are and probably in the low twos. Senator tillis its clear some states were turning before the president took office. I think we saw an significant increase last year largely attributed to a calming regulatory overreach. And this year i think it will be a combination of continuing that regulatory reform, right sizing regulations and benefits of tax reform. As businesses start looking ahead and looking at how the tax how the tax cuts affect their business, weve seen hundreds of businesses announce pay raises. Were seeing de facto minimum wages being created in the Banking Industry and Retail Industry as a result of announcements that have been made by large organizations. Weve seen pay increases, bonuses, plans for capital deployment. I dont think theres any doubt that the vast majority of those incurred as a result of the tax plan and they would not have occurred if we havent passed that to the president s desk. Do you agree with that . Secretary mnuchin i do. Senator tillis theres one piece that i think has been criticized and that has to deal with stock buybacks. Some people say using some of the resources that come through tax reform to do stock buybacks is a bad thing. I dont necessarily disagree with that. Can you tell me what occurs when a company does a stock buyback, what theyre likely to do with the resources . Secretary mnuchin sure. Its just a reallocation of capital. So companies have a decision. They can reinvest money in their business. They can pay dividends or they can buy back stock. To the extent they buy back stock or pays dividends, thats capital that flows out to investors that can be recycled and put into other businesses so its a natural flow of funds from businesses that have excess capital, businesses that need to raise capital. Senator tillis it ultimately contributes to an increase in the deppped and Economic Growth . Secretary mnuchin yes, it does. Senator tillis the last uestion i have for you actually relates what you will do as secretary for regulatory relief within your own rulemaking authorities. Can you give me some sense of what your priorities are over the next year or so in terms of areas that you think through the rulemaking process, not through congressional action, that we could see some of the i know you cant get to specifically what you want to do, but in the areas of regulations that you think that need to be looked at and maybe right sized, what can we expect . Secretary mnuchin again, well look across the board in the financial area. Senator tillis secretary, i appreciate you being here. I actually appreciate you offering to work with us and artner with us and do on a bipartisan basis come up with good outcomes that on the banking regulatory relief bill, i see one member who worked with us to get that out of the out of the committee and to the senate and hopefully to the house. We look forward to working with you on a continuing basis, on a bipartisan basis to get regulations right and get the economy moving more quickly than it is at this time. Thank you. Senator crapo senator jones. Senator jones thank you, mr. Chairman. Thank you, mr. Secretary, for your appearance here today. I want to go back, though. I want to defer a couple of my questions at the top of my time here to go back to senator heitkamps questions concerning the pension bill that the Ranking Members bill thats pending which i told him i would sign on. Thats an important bill for folks in my state and i think we can agree theres a looming crisis in that. I appreciate your answer about, you know, looking forward to working with us but i kind of like to start that process now. And if you could, give me your ideas, give me your thoughts what you looked at the bill. What about the bill is ok, anything, and are there other things that we need to be looking at to try to solve that crisis . Secretary mnuchin first of all, thank you. And id be more than happy and come meet with you. Again, this is a significant problem. I dont believe theres a simple solution. Its complicated. Id be happy to go through in aspects but its something i look forward to working with senator brown and chairman crapo and figure out what are the various Different Solutions so we have a lot of resources at treasury. As you know, one of the things we look at is restructurings. We have a prescribed formula what we can do and what we cant do. As you say, i am aware of the problem that exists. Senator jones and you acknowledge its a significant problem for those that have those pensions . Secretary mnuchin i will say its a significant problem. Its not one with a clear, simple solution, but we look forward to working with the committee. Senator jones ok. Thank you, mr. Secretary. The Small Business jobs act of 2010 was created to support a lot of local Small Businesses that help accelerate growth. That was an Important Initiative for alabama. I think we created a number of jobs. We got 31 million, but that has now that round one has effectively run out. Would you support a reauthorization of the sbci . Secretary mnuchin not necessarily but i wouldnt rule it out. Again, its something that i would work with congress and we need to look at more carefully. Senator jones all right. I wasnt here when the tax bill was brought to the floor and passed and im sure you may have talked about this add nauseum and i a ad and i apologize. You said it would help create Wage Inflation and create wainl growth. Thats the problem in my state. The Median Income is 47,000 a year which is below all but a handful of states. In some counties, that Median Income is below 30,000 a year. Could you just explain how the tax bill as it exists right now will help in places like alabama and particularly those rural areas where the Median Income is 27,000, 28,000 a year . Secretary mnuchin sure. That is a big concern of the president. As i commented that workers have not had the type of raises that they should have. Id be happy to go through with you the council of economic advisors put out a piece that showed the average would be about 4,000. We believe there is significant more investment into business that that will lead to wages going higher. Senator jones all right. The other thing thats coming up and were talking about i know the president will be talking about tonight, as been mentioned, is infrastructure and a huge infrastructure bill. We are talking about immigration and Border Security. The administration is asking for 25 billion this year to be placed for Border Security which generally Everyone Wants better Border Security. My concern, though, is the c. B. O. Reports that talk about the debt thats being created by that tax bill, 1 trillion over 10 years. I know we are going to try to tap in, as senator shelby, said private investment. This wont help in my rural area. You wont have a toll road in Dallas County over one bridge or certain roads there. How are we going to pay for all this . How will we pay for the 25 billion . How will we pay for the infrastructure if were having to wait to catch up and hopefully the tax bill will do exactly what you said and will grow the economy and well get more coming in, but how will we pay for that infrastructure now and the Border Security . Secretary mnuchin well, i think as you know we dont agree with the c. B. O. Analysis as to on the tax bill. We do think the revenues will go up significantly. On the infrastructure, its going to have to be a combination of, as i said, federal dollars, state dollars, and private dollars. I agree with you completely, theres many, many Infrastructure Projects that are not going to be privately funded. Senator jones all right. I see my time is up. Thank you, mr. Chairman. Senator crapo thank you. Senator rounds. Senator rounds thank you, mr. Chairman. Good morning, sir. Secretary mnuchin good morning. Senator roubds im just cure senator rounds im just curious. Appreciate the time you have been in the chair already. I will try to be brief and not repeat a lot of the items that have been laid out today. As you know on january 18, the fsoc and met life filed a joint motion to dismiss in the earlier fsoc appeal which was an effort to designate met life as a sifi. Initially thats september 27, september 29 they rescinded the American International group, a. I. G. This leaves prudential as the lone bank designated sifi. I understand fsoc is given the ability to designate nonbank sifis under section 113 under doddfrank. Given your comments on fsoc today, should the Banking Committee consider changes to section 113 . And to the structure of the fsoc more broadly, you mentioned Greater Transparency as necessary to fsoc. Would you recommend other changes as well, specifically with regard to this section . Secretary mnuchin again, i dont have specific recommendation to that section because i think there are things we can do at the committee level. As you mentioned in the case of a. I. G. , they were dedesignated because they significantly reduced their risk and that was the decision of the committee. In the case of met life, there was a legal view and a decision so i p the appeal and dont think we need legislative changes at this point. Senator rounds i know that senator scott had done a series costbenefit the analysis that were being used. Im just curious. I would like to follow up a little bit with his questioning. Will you push with internal guidance with fsoc to reflect Agency Action is appropriate only if a costbenefit analysis can show that it does more good than harm . Secretary mnuchin were going to go through reviewing those guidelines. I want to be careful to make conclusions before ive had a chance to review that with the committee members. But we are in favor of more transparency in the analysis of cost benefit. Senator rounds you will be interested in a further discussion with the members of when you say the Committee Secretary mnuchin excuse me, of fsoc. Not the committee. Senator rounds we will be happy to have that discussion with you as well. In the past, also on another issue, in the past there has been a great deal of concern surrounding the role of the Financial Stability bill, the f. S. B. , and the fsoc process. The f. S. B. Is an international body. The United States is represented in the f. S. B. , the body has no authority over u. S. Financial regulation. However, past actions such as the designation of prudential and met life raised questions over the influence of the f. S. B. And fsocs sifi designations. Can you commit or would you discuss with us your philosophy with regard to the role that the f. S. B. Will play or perhaps no role in future fsoc designations . Whats your thoughts and where do you see the Committee Going . Secretary mnuchin i dont see f. S. B. Having any role in future designations at fsoc. Senator rounds would that be a change from previous activity considerations in your opinion . Secretary mnuchin i cant comment on what the committee did before i was on it, although i share some of the concerns that have been raised. Senator rounds so more appropriate to perhaps take under advisement but most certainly independently from anything proposed by our International Group . Secretary mnuchin absolutely. Senator rounds we all watched the swings in bitcoin market. Bitcoin, along with cryptocurrency have jumped substantially. Do you see cryptocurrencies as a threat to Financial Stability . Secretary mnuchin im glad you brought up one of my favorite subjects. We have something new to talk about now. So i dont see it as a threat to Financial Stability but i see them as very important issues. We set up a subcommittee of fsoc to look at this. My primary concern about cryptocurrencies is twofold. One, i want to make sure that these are not used by bad guys, that they dont turn into old swiss numbered bank accounts. In the United States, if youre dealing with these cryptocurrencies and your wallets and other things you have the same b. S. A. , the same Money Laundering requirements as banks, we want to make sure around the world that exists and i also want to make sure that consumers understand the issues around cryptocurrencies. Senator rounds just a very quick followup on that particular issue. Do you think you have the tools available to you now, both in terms of legislative authority and the manpower to actually follow through and enforce with regard to the concerns you have expressed . Secretary mnuchin i do think we have them now but having said this this is an evolving world and wont be bashful in coming back and asking for more resources. Senator rounds thank you. Thank you, mr. Chairman. Senator crapo senator donnelly. Senator donnelly thank you. Mr. Secretary, thank you for being here. The recently enacted ndaa included an amendment i authored to require a comprehensive strategy from all agencies. That includes treasury within 90 days of enactment to address the threat posed by north korea. That was enacted in late november. This is due by march 15. Have you had any discussions about treasurys reporting requirements in regards to this north korean strategy . Secretary mnuchin i probably spend more time on north korea than almost any other subject. So the report will be part of this but we spend a lot of time at treasury discussing these issues. Senator donnelly i appreciate the fact that you discuss those issues. Will you be meeting the required reporting date of march 15 with treasurys strategy regarding north korea . Secretary mnuchin i have no reason to think we wont meet that deadline so i anticipate we will. Senator donnelly thank you. This has been mentioned before. Ill mention it again. Its absolutely critical to my state as well and it is in regard to the pension situation we find ourselves in. We are working to protect the pensions of coal miners, teamsters, participants of more than 140 multiemployer pension plans. And we must shore up this system before it grows even worse. I know you met some of the retirees in the past. We need your support to get this legislation across the finish line. Im also sponsoring a sponsor of the butch lewis act. Will you support the butch lewis legislation in order to ensure the solvency of these plans . Secretary mnuchin again, i am not willing to specifically support that legislation but i am willing to sit down with you and others on a bipartisan basis and figure out a olution. Senator donnelly do you have any legislation that you would support . Secretary mnuchin its a complicated issue. Its one of the more complicated issues ive come across in the last year. Senator donnelly when you meet with me will you bring specifics . Secretary mnuchin i will be more than happy to do that. Senator donnelly let me tell u about a meeting i had in oakland city, and it was with retired miners and they had just gotten their health benefits. They said, harry truman made this promise to us, and to be able to get this for one of the miners there, many can get the medicine he needed so his wife who was in a terminal medical condition could get that medicine and live out her remaining days in peace and without pain, thats how important that was. They said this pension piece is so we important to us dont find ourselves living hand to mouth at the end of the day. And youve been kind enough to meet with me. Will you meet with our miners and Truck Drivers to go through this to answer their questions . They are our friends and neighbors. Theyre citizens of my state. They want to know what the future holds. Secretary mnuchin we had a meeting last year and id be happy to conduct a meeting this year with workers across Different Industries that are affected by this. Senator donnelly thank you. Senator schatz and i held a hearing last spring on north korea and asked former Administration Officials how we can more effectively deploy sanctions. Unsurprisingly, as im sure its unsurprising to you too, the conversation focused largely on china. And the possibility of secondary sanctions on chinese institutions. I know treasury has imposed sanctions on a number of chinese entities that served as sources of trade and revenue for north korea. Have you seen that those secondary sanctions have been effective as a deterrent in regards to north korea . Secretary mnuchin yes, very much so. Senator donnelly when you look at this, does china, do you think, have a basic understanding of where and how north korea is using chinas banks and economy . Secretary mnuchin i do. Senator donnelly and does that activity occur at the largest chinese banks, including stateowned banks, or does north korea intentionally funnel primarily to the smaller chinese banks that are less susceptible to u. S. Pressure . Secretary mnuchin i dont want to go through the specifics of this in this setting but id be happy to come and talk to you about it. I will say we are having very, very specific ongoing dialogue with the chinese banks. I just sent my undersecretary over there. She met with a large group of people and regulators and were having very good dialogue with the banks over there, and we continue to have sanctions where appropriate. Senator donnelly i would i appreciate that and i would like that meeting to be sooner rather than later in light of the significantly dangerous situation we find ourselves in with north korea. Secretary mnuchin well follow up with you to get that on the books. Senator donnelly thank you, mr. Secretary. Mr. Chairman, thank you very much. Senator crapo senator reed. Senator reed thank you, mr. Secretary, for joining us today. In the 2017 fsoc annual report, they called for underscoring the necessary its sustained senior level attention on cybersecurity risks and potential systemic implications. Could you elaborate and give us more understanding of what youre doing because cyber seems to be in the headline of every paper every day, please . Secretary mnuchin well, thank you. It is a very important subject. Im spending a lot of time on this. Im happy to report, as i said earlier, i dont see anything at this moment that is a risk the financial sector, but we need to continue to invest lots of money and this has to be a combination of our Intelligence Community, our experts at treasury, our experts in the regulators as well as private industry. We need to be working very, very closely together, because this is something thats evolving every day. Senator reed i just apropos of this every day, i saw a story this week about the a. T. M. s that can be remotely controlled by bad people. One, if you have the right sort of magic word you can go up and demand money and it just falls out. If thats not check that would un upheaval in our banking system. Secretary mnuchin at first people put skimmers on and now they are using little doctor things. The a. T. M. s i think have been upgraded to where theyre ok. There are plenty of other cyberattacks we need to stay ahead of. Senator reed given the fact this is a onslaught by both organized, state sponsored entities, criminal entities, individual hackers that have lents, etc. , have you have adequate personnel in the Treasury Department to carry out this expanding work . Secretary mnuchin again, i would say right now we do but i wont be bashful to come back and ask for more resources as this evolves if we need it. Senator reed we talked about Digital Currencies. My colleague, senator rounds, raised the issue and you seem to enjoy questions about digital currency. I will give you another one. Fsoc is, as you point out, involves not just in terms of the stability of the Financial Systems with these Digital Currencies but also with nefarious activities by Money Laundering, avoiding sanctions. That raises the question of how closely are you alive with our Intelligence Community in terms of the intelligence problems here, i. E. Circumventing sanctions, criminals using it to support terrorist activities . You can go down a long laundry list. Whats your relationship with the Intelligence Community . Secretary mnuchin very closely. I meet with director pompeo and others lately. We have daily interaction and people going back and forth. So its very good working relationships. Senator reed have you noticed a significant increase in these types of nefarious actors using crypto currencies or is it just a problem thats stabilized or is it growing . Secretary mnuchin again, i want to be a little bit careful what i say in this format. What i would say, theres nothing something thats of significant current to us today, but it is something we need to actively monitor, and its a bigger concern of mine in other countries. So thats our big push, whether it be at the g7 or g20 to make sure other countries are regulating these activities the way we are. Senator reed just stepping back as a moment. As the chair person of the fsoc you have multiple agencies reporting to you. Weve raised multiple topics here today. Cryptocurrencies, cybersecurity, particularly. Do all your component agencies have the expertise, the relevant expertise and the personnel to fully engage with you . You might be very wellintentioned, but if you cant count on an agency that has significant responsibility, your intentions wont be at the end of the day up to the job. Secretary mnuchin again, i say right now i think we do, but one of the things we want to make sure is we have the proper coordination so when we have all these resources we can use them appropriately together and, again, as i said, i wont be bashful if the agencies need to come back and more resources you can see the rest of this Senate Banking committee on our website, cspan. Org. Right now were taking you to the u. S. Cap
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