Proposal. As well as Economic Growth and the impact of the tax cuts and job that jobs act. Jobs act. Todaym pleased to be here to discuss the budget. Trumps Economic Freedom agenda is working. Reform andegulatory trade deals are improving the lives of hardworking americans. Unemployment remains historically low. And it is at or near alltime lows for africanamericans, hispanic americans, and veterans. The Unemployment Rate for women reached its lowest point in 70 years. Before President Trump came into Office Experts were predicting that we would grow by 14,000 jobs for month per month. We averaged 175,000. Wages for unsupervised workers in 2019. 3 which meant that roy wages rose faster for workers than it did for their bosses. Last months Labor Participation rate prime age adults reached 83. 1 . An 11 year high. American families are earning more each year, thanks to the tax cuts and jobs act, paying significantly lower taxes. They also have more Career Opportunities than ever before. Americas economic strength and competitiveness is a bright spot in the world as other nations experience headwinds. In the year to come we are expecting even greater Economic Growth in the United States as we finalize trade deals with some of our most important trading partners. The phase one deal with china will result in critical , enforceable protections for businesses and a tremendous boost for our farmers. The usmca will add to our success by setting some of the highest standards ever in a trade agreement. We are proud to have earned the support of a Broad Coalition of industries. We are pleased that it was passed by congress with strong bipartisan support. I particularly want to thank the members of this committee for their work on this important issue. In addition, President Trumps economic policies will result in Economic Growth, will reduce our National Debt and deficits over time. In order to secure critical funding to rebuild a military, the military, Democrat Members of congress insisted on increasing other Government Spending, which resulted in overall spending of 8 . The administration is committed to working with members from both sides of the aisle to address spending going forward. The president s 2021 budget for the Treasury Department makes it clear that as we continue to prioritize Economic Growth as well as national security. Of particular for this committee, we are requesting 12 billion for the irs, this includes funding to implement the Taxpayer First act, and the third year of integrated Business System modernization. We continue to bring the irs into the 21st century by updating systems, utilizing data analytics, and other Technology Advances to enhance the effectiveness of audit enforcement activities. We are requesting Program Integrity cap adjustment to reduce the tax cap of the savings of over 64 billion over ten years. We also remain focused on improving Customer Service for taxpayers by reducing coal call and wait times, and enhancing Online Service capabilities. Im pleased to be here with you today, thank you very much i look forward to answer your questions. Sen. Grassley we will have a fiveminute rounds. Mr. Secretary, critics of tax reform have suggested that the treasury created loopholes for Big Companies and regulations as part of a secretive lobbying process. The idea process has occurred in secret is hard to understand given that the comment. In the administrative procedures act gives people opportunity for input. And i dont see how you cant do your job of implement a new law implementing a new law without listening to stakeholders. The preamble to each set of regulations make clear that the treasury meticulously analyzed, and addressed public comments. Sometimes taxpayers were happy with the outcome, sometimes they were not. I even heard some of these people in my state that werent happy about it. The Business Community certainly doesnt seem to think that they have received everything for which they have asked. Mr. Secretary, isnt it true that the treasurys decision about tax reform regulations have been base squarely on Technical Analysis and legislative intent, and not by corporate . Corporate lobbyist . Sec. Mnunchin yes, mr. Chairman, that is absolutely correct. Our job is to implement the legislation, not to make the legislation. On a regular basis we meet with lots of people to take input. We have reached out to the committee and its staff, and again we go through a notice and Comment Period with the public. Sen. Grassley second point im pleased to see that the president s budget calls for making the tax cuts and reforms benefiting individuals and Small Business permanent. This includes the doubling of the Child Tax Credit to 2000, a nearly double standard deduction, and lower overall individual taxes. It also includes a 20 qualified Business Income Deduction which greatly benefits small passthrough businesses. So, mr. Secretary in the treasurys estimation, have these tax measures be an important factors in the high levels of Consumer Confidence and Small Business optimism reported since the enactment of the tax reform . And also would you expect making these tax provisions permanent to have additional positive effects on consumer Small Businesses and the economy generally . Sec. Mnunchin yes we would, mr. Chairman. Sen. Grassley ok. Yesterday the house ways and means committee, argued that cbos adjustments in the Corporate Tax receipts is evidence that tax reform cost s more than projected. Largely because treasury has provided an additional windfall to Corporate Taxpayers. However, as i mentioned in my floor statement yesterday, joint tax committee, and cbo have confirmed that one cannot infer from cbos projections that projections tax reform regulations are inconsistent with the statute. In fact, cbo clarified that other factors for the change in projections, namely the economy abroad, trade developments and the reduction in the bureau of economics and analysis of Corporate Tax revenue estimates between 2016 to 2018, which then , of course, in turn informs cbos baseline. It strains credibility to blame tax reform for a change in the baseline from years before tax reform was even inactive. Mr. Secretary, is it your understanding that cbos downward adjustment is a result of a number of factors, and that it is, in fact, too early to determine the precise impact of tax reform on tax receipts . And also, does the administrations budget by cbo project a steady increase in corporate receipts throughout the current budget window . Sec. Mnunchin mr. Chairman, let me say that our analysis is always been higher than cbo, as ive said previously, we believe that the tax cuts will pay for themselves over a tenyear. Of time is how we score them. Two years in, we have updated our projections for the next eight years, and we believe that. Again let me just comment, the spending is increasing as well, but the trillion and half dollars in tax cuts we believe will pay for themselves. Sen. Grassley senator wyden. Sen. Wyden thank you very much, mr. Chairman. I want to start with what i think is a clear double standard with respect to responding to congressional oversight. I look at the record and it seems like democratic request s get shoved to the back of a filing cabinet, and somehow republican requests get the red carpet treatment. So i want to give you specific example and give you a chance to respond. Treasury gets two requests from Congressional Committee chairs, one request is backed up by clear statutory language, in tax code section 6103, requiring the treasury secretary shall provide tax documents to the committee. The other request doesnt have the same legal basis, and certainly, to me, it looks political. The request from the democratic chair, with a firm legal basis, was met with nothing but legal footdragging. The request that came from the republican chairs got vip treatment. They got, you know, a response out the door in a flash. It looks to me that there is a double standard here. That you all are tipping the scales of congressional oversight. What am i missing, mr. Secretary . Two committee chairs, different treatment. Sec. Mnunchin we responded to you, and as i explained the house disclosure of tax returns is subject to protections, which on the advice of counsel, we documented we have significant concerns. That is very different from what i believe is a request on a bipartisan basis, we have responded to thousands of requests to the committees from both republicans and democrats on an equal basis. As we said, treasury does not process sen. Wyden your stonewalling you are stonewalling about stonewalling. Sec. Mnunchin thats really not fair at all. Sen. Wyden two committee chairs, one gets no response. Republican gets a quick response. Sec. Mnunchin thats just not fair mr. Wyden, we have responded. Sen. Wyden it is a fact. Sec. Mnunchin we responded to your requests another, we are following the law of 6103. Sen. Wyden i gave you a specific example that shows a double standard. Sec. Mnunchin one has to do with sars thats under a different section which we have responded to your request and the democrats request on this committee equally with republicans. Sen. Wyden lets talk about Something Else where once again, it sure looks like there are sweetheart arrangements that do not meet the test of the public interest. Im talking about the state owned bank which has been accused of a billion dollar scheme to help iran evade our sanctions, and it sure looks like erdogan and his soninlaw have been personally implicated in it, and since taking office you have had seven meetings, seven with senior turkish, one with erdogan one with his soninlaw, they were directly implicated in sanctions schemes. You met with them. Doesnt this send a horrible picture to pose in the oval office with sanction violators . Is it just open season for sanction violators in your Treasury Department . Sec. Mnunchin mr. Wyden, i have met with hundreds of world leaders, and finance chairs, so meetings is nothing it is rare. Sen. Wyden what were the meetings about . Sec. Mnunchin i was just about to finish, those meetings were about many important strategic issues, as it relates to halt bank i cannot comment on the specifics because that is subject to inquiry, both the c as well asf ofa the department of justice. Sen. Wyden finally let me be clear, on these new loopholes, that were created, you made it out in some way that the minority was involved in. In this. Our input was never sought in connection with this whole array of the polls. I know because i would have been fighting them every step of the way. Thank you, mr. Chairman. Sen. Grassley since you brought up the first issue, with him i would like to give my view of that. Sen. Grassley since you brought up the first issue, with him i would like to give my view of that. Not to defend the secretary, but just a state where i am coming from, because i am the instigator some of these requests. Whether it is the majority or minority, or senator wyden right now, youve publicly expressed your frustration that treasury has responded to the committee and produced request that the documents, but treasury has not done the same for the minority. And i think that that is wrong, and ive done a lot of oversight work, with senator wyden, and we have worked together on most of this stuff, and we are even working together on this particular issue. As the department itself wrote in the letter yesterday, ill put this letter in the record without objection, to senator wyden, the categories and types of documents that i have sought from treasury have also been made available to senator wyden and his side of the aisle. My investigation with senator johnson has nothing to do with 6103. We are proceeding methodically with oversight, instead of running fast, skipping steps and failing to litigate privileged claims. At this point privileged claims dont even apply to our requests. So are you asking for a rebuttal to what i just said . Sen. Wyden yes, and i will be very brief because im asking a question of the Treasury Department. What were talking about is two instances where treasury documents were requested by committee chairs. In one instance, the secretary has stonewalled the response. In the other he fast tracked the request. Thats what looks like a double standard to me. Period, full stop. Sen. Grassley ok, senator lankford. Mr. Secretary, thank you for being here. Thanks for the insight that you bring to this. Obviously we will go through the president s budget proposal, as every four puzzle comes to capitol hill gets reviewed and, then get set aside, i will go through it but there are a lot of good ideas. I appreciate the hard work that goes into it. I will be interested to see how history looks at this economy, 25, 30, 50 years from now. But we look back at the reagan economy, and the clinton economy, and see the growth thats happening, and watching some pretty Remarkable Growth in this economy since the tax cuts. What you have overseen from the treasury right now, if im looking at this correct correctly, during the Previous Administration there were 3600 manufacturing job losses, during this administration, we have gained 12,300 gains in manufacturing alone. During that time period. So its dramatic turnaround. In the beginning of march of 2018, 21 consecutive months that they are more job openings in america, then there are people looking for jobs in america. That is pretty remarkable. And for the last 16 consecutive months, we have had Hourly Earnings for folks who received hourly pay at 3 or higher every single month. That is a remarkable economy. And thats happening right now. So thank you for your work. Because you put a lot of work into this, to be able to go through the process. I want to ask about the process in this. Ive done a lot of work as well with many members of this committee have in government shutdowns, on trying to get away from longterm, and try to get the solution on the debt ceiling, those are three things to hang out, there what were talking about budget issues, that also seems to be a part of the conversation on their, can you put an estimate on the cost on the financial cost of government shutdowns, on the cost for long term scars, and if there are alternate solutions with dealing with debt ceilings . Sec. Mnunchin i dont have the specific cost of those, but i will tell you that they are quite costly particular to crs have a very significant cost on the department of defense. Theres no question that that is a significant issue there. I would also just comment, i do you share your concerns about the debt ceiling. I think that we have done 80 of those last 50 years. I think everyone would agree, we cannot ever get to a point where we would default on the u. S. Government debt, and i would encourage congress to think about a process that we prove spending we simultaneously what is other peoples comments on debt ceiling and how they handle it . Sec. Mnunchin most people dont have debt ceilings the way we do. This is a National Anomaly for us, we have five 80 of them in the last 50 or 60 years, as far as a debt ceiling increase, is it they are clearly not managing our spending, they have become us senator white house as well, a bare trump in the bear trap in the bedroom, there are no good results. Its an issue we have to resolve. Sec. Mnunchin i would just say, i would appreciate this as a bipartisan issue, and obviously spending is approved on a bipartisan basis, and it is important that we get to a process where we increase the debt ceiling at the same time. I want to ask two quick questions, there was a bit of an unknown at one point that ive asked you out about before, a business cannot have more than 5 of income on things like alcohol sales and things are listening in the code particularly. They can have up to 5 of their income and still be a recipient in the opportunity zones. There is not a definition for cannabis businesses. Are they in that 5 amount . There is a federal prohibition on cannabis sales . Sec. Mnunchin i will have to get back to you on the specifics. It would be great to no get clarity on this they will need clarification on that one we have spoken about it before its difficult to get a federal tax benefit for something in this gains federal law. But that is not clearly defined in the last regulations. Another one is their quest in there is a request in this budget to be a to transition secret service, dhs back over to treasury where used to before. Can you give some definition on that . Sec. Mnunchin thank you, i appreciate the opportunity to comment on that. Let me just first say, that this has support, on a bipartisan basis, from the current president , and the last several president s. I think you know the secret service has a long history which started at the Treasury Department to counter counterfeiting. We think that there is tremendous integration moving it back in working with all of our terrorists Financing Activities and working on our cyber issues and again this is something that has tremendous support within the secret service. I look forward to more details on that. Thank you, mr. Chairman, and thank you mr. Secretary. I do want to start by just talking about the view from michigan, because certainly the numbers you are talking about are not what we see. And just for clarity under the Previous Administration, we had about 80,000 manufacturing jobs, up until the last three quarters we had about 12, 000, under the current administration, but for the last three quarters we see two quarters where we actually had lost manufacturing jobs, and the last quarter was flat. So the view from the ground is different than what youre seeing in certainly in michigan and in the midwest. We have not seen wages rising like youre talking about. We have a lot of folks working, one job, two jobs, three jobs, trying to hold things together, but that is not the same as having one good paying job, where you can actually take care of your family. Which is what i would hope would be all of our goals. So we do have, when we talk about the tax code as well, construction trades meeting with them this week, theyre not happy that the tax bill doesnt allow them to write off the cost of buying tools now, which are necessary for their job. And yet big corporations can write off what they need. Theyre not very happy about the fact that they cant write off mileage anymore when they move from one job to the other, or if they move from california to michigan to get a job. That is no longer something that they can take themselves write off. And when i tried to close loopholes that allow corporations to take jobs overseas, we couldnt get that in this tax package. So my view is a little bit different. But i want to focus on something where people did get hit, and have not yet recovered in the economy and that is pensions. Folks at work hard their whole lives, and trusted everybody, corporations, governments systems that said that maybe ill take a little bit less, and wages put money in a pension plan so i have it when i retire with my family, and when we saw what happened in the stock market, present talks oldtime the stock market, its soaring thats highly measures, things so its true top 10 , wealthiest folks doing very very well, but one of the ways that working people are dealing is whats been lost in the stock market, and in the crash, and that results in in reductions, in reductions. As a result of the financial crash, we know that there was over 1. 2 trillion just in ira and 401 k loss, not counting the pension system. And so my question relates to, what are you guys gonna do. What do you support in terms of what needs to be done for the pension benefit guaranty corporation. We know that we have 1 million and a half americans, that are going to lose the plans that they paid into their whole life. They are totally risk for the next 20 years, and all we need is one big failure, like central states, and we will see the federal backstop go insolvent. So this is a very very big issue. We have a proposal put forward, passed by the house of representatives called the Butch Lewis Act that would give them time to recover. We are certainly willing to weigh in, our government to give huge loans to wall street, but yet the folks who lost their pensions are very afraid, and are still waiting for somebody to recognize what they lost. What are your ideas, what do you plan to do to protect Peoples Pensions . Sec. Mnunchin well, thank you. I agree with you the pension issue is a serious issue, i am well aware of the issues as you also know we administer certain functions associated with the multiemployers. I acknowledge there are some significant issues, i work i look forward to working with this committee, that consider legislation to address these issues, and we stand ready to provide assistance on a bipartisan basis. I guess my question would be does the president support the Butch Lewis Act that came over from the house of representatives that is before the senate . Sec. Mnunchin i cannot comment on that specifically, but the president is interested in looking at a bipartisan basis, these pension issues. I personally have met with some of the people from these pensions at various with various members of the committee. I just want you to know this, while we are all basically not acting, at this point other than we are able to come together on miners which was positive, but the reality is i have folks in michigan who now have gotten a 70 cut, 70 cut. In their pension. Thats pretty significant, pretty terrifying for people, so we need action. We need action. We know what it is, we know what needs to happen, we know the numbers, we need to act. And people are counting on us to do that. So im anxious to know what the president will do to act. Welcome, mr. Secretary, i want to start off by talking a little bit about Climate Change and energy policy, tax policy, and help us create some jobs, and address Climate Change in an appropriate way. I just got back from a trip with some friends to antarctica last month, and he said it was pretty warm, she was surprised. We were really surprised this past weekend when the temperature there hit 65 degrees at the south pole, antarctica. People say, was that a record . It sure was. Northern california had wildfires, a place called paradise which went up in smoke. Australia had wildfires last month. The midwest, huge floods, hard to get the crops into the ground, seeds into the ground. The last five years with a hottest five years on record, this is the hottest january on record. Something is happening here, just what it is is not exactly clear. I think something is happening and it is clear, way too much carbon in the atmosphere. What are the ways we can address that . One of one of those ways is to the administration has proposed, our tax policy. The administration has proposed to illuminate some Clean Energy Tax incentives, and undermined goals that the president has said over and over again that he wants to achieve. But the president s budget proposal, prematurely eliminate Clean Energy Tax incentives, and what it would do, i did mention a couple of those tax incentives for electric vehicles, or fuels vehicles fueled by hydrogen, and a tax policy that incentivizes people to buy vehicles with less fuel. We have some incentive proposing tax, policies that actually lead to reducing carbon and our planet in regards to mobile sources, we are getting just the opposite why is that . Sec. Mnunchin let me just comment, because you addressed a lot of different issues. The president very much supports clean air and clean water the Administration Proposed reducing epa funding by almost a third. Sec. Mnunchin i think you addressed different credits including electric car credits and others. I would be happy to come and talk to you about the different policies. I do not know what you want me to comment on specifically on this. I will just be as direct as i can be. The source of the missions on our planet is mobile sources. There are ways to use tax policy to encourage people to drive vehicles including trucks there more energy inefficient, and instead of supporting tax policies that will do, that we get just the opposite. The other thing i would say that would be really helpful, the administration is talking about transportation infrastructure. When i was governor, i would propose i was governor for eight years we had tax cuts seven of eight years. Balanced budget every year. I proposed transportation infrastructure for my little state, but i also propose ways to play for it, and we need the support of the administration as we go through this year, figuring out what to do, but not just to say this is a great want this would be great, but how we can pay for it is a conversation that we can have when we get together. Sec. Mnunchin i appreciate that, and the president is very much interested in infrastructure, particular roads highways rail and others, ive had several meeting with richie neil, to see if we can find ways on a bipartisan action. The president mentioned the barrasso bill which ive helped to, right at the state of the union address, the need for transportation, i held my wallet, its not just enough to do stuff, but we have to figure out how to pay for it. Sec. Mnunchin i agree, and i was encouraged. I think it passed 240. The last thing i want to ask, tax policies and pay for themselves, when you adopted the tax policy about two years ago, we said it was going to pay for itself. I think whether its the cbo or any number of entities, said it doesnt really pay for itself. That has not paid for itself and it will not pay for itself. Do you have a rebuttal for that . The numbers around staggering. I think cbo said the estimated socalled tax cuts additional 228 billion to the deficit for 2019 how do you respond to that . Sec. Mnunchin i stand by our comments, that the tax cuts will pay for themselves, this will be simple math. We measure this over ten years, we have eight years left, i look forward to writing the committee a letter in eight years to go through the exact numbers. First two years our numbers are projections, as part of the budget process we go through estimating the next eight years based upon our estimates of growth and various different issues, we do believe it will pay for itself. That is different than a deficit because we have increased Government Spending and we cant pay for it twice. Thank you. Sen. Grassley senator menendez. Sen. Menendez thank you, mr. Chairman. Mr. Secretary, we are facing a precarious moment in our public where truth is under assault. All in the name of politics, blind allegiance to a Single Person is valued over fidelity to the constitution. I would like to go over a few points today and correct the record so the American People have the truth before them. President trump claims to have inherited a, quote, disaster of an economy from president obama. He takes credit for what he calls, and i quote, an economic turnaround of historic proportions. Mr. Secretary, how long has the u. S. Economy been posting positive gdp growth . Sec. Mnunchin its the longest running economic scenario weve been in. Sen. Menendez absolutely true. Gdp was positive for the past 10 years, growing for the final seven years of president obamas presidency. So, it has been growing for the last 10 years, including the final seven years of the Obama Presidency. And we can both agree that President Trump has been in office for about three years, is that correct . Sec. Mnunchin that we can definitely agree on. Sen. Menendez the economy was already growing for seven years before President Trump took office. Lets talk about jobs. President trump claimed he will be quote the greatest jobs president that god ever created. Closed quotes. He has repeatedly criticized president obamas job record. Lets compare the last three years of the Obama Presidency to the first three years of the trump presidency. Can you guess who created more jobs . Sec. Mnunchin i dont have the numbers in front of us, but we have created substantially more jobs than the Obama Administration projected at the beginning of this administration by a multiple of three. Tonight, stacey abrams. Lookseek, phillips wigle at how alert works to evaluate economic proposals and the president has his budget. Here, he talks about how the cbo works on climate issues. Working on some issues you mentioned on climate. Is an issue important to members, both chambers and parties. We are doing the things you would expect cbo to do, how does climate fit into the baseline. Militaryd insurance a installation and things like that, it is discretionary spending, annual appropriations. Bigger dollars are probably the overwhelming of effect on the economy. Andare looking at research how that feeds through to the budget. , the steps are climate, gdp, spending, and revenue and so on. Emmy any economic upanddown from Climate Change reduce back a baseline adjustment to do it it is implicit and we are working to make it explicit. Could that lead to a position where hypothetical the cbo could bill to reduce Carbon Emissions as being proEconomic Growth because it would theoretically reduce the effect of Climate Change . It is a good question. Under my predecessor, two directors ago, he did a lot of work on cap and trade legislation. The apparatus is there and were working to simply up the it. To update the analytic tools to develop the policies. You can see the entire at 10 00 this sunday a. M. And at 4 30 p. M. On cspan. You can also hear it on cspan radio and watch it online at cspan. Org. Acting white house budget ughtctor russell vote vo testified before the house budget committee. You can watch this in its entirety on our website. Welcome acting , director vought. You have the floor. And you have five minutes for your prepared statement. Thank you. Chairman and ranking members of the budget committee, im here today to does the budget for 2020 which we titled a budget for americas future. This is a budget that