Transcripts For CNBC Squawk Alley 20170119

Threaten strengthening how the department fights terror. I strongly believe and understand that there are very, very important tools within the Treasury Department that can come pat terrorism and that many of these tools such as sanctions are extremely effective and keep our Armed Service out of harm. So i am fully committed to the maximum amount of law to both enforce the existing sanctions in a very strict way and i will work with the president elect as he sees fit on additional sanctions and there are also other programs within treasury that i believe are very, very effective in fighting terrorism. Its a very important part of the treasury. And i know that that has been done very effectively. We all agree its important. What were trying to do is assess your qualifications. You havent been willing to talk medicare, havent been willing to talk specifics on terror. Lets talk about qualifications on the committee on Foreign Investment because this is Something Else you would have responsibilities on to protect our country on when a foreign investor makes an investment in the United States in a way which has National Security implications. If a foreign investor with ties in a Foreign Government invests in President Trumps business should the committee examine this transaction . Senator, first let me say i think that would be appropriate. Let me go back to your other question because i apologize if i didnt answer the specifics on your terrorism i was searching for any specifics in toward be able to assess your qualifications. Well, senator, again, i believe there are some important sanction as it relates to sanction against iran and other countries. I would absolutely enforce those and encourage the president to use additional sanctions when appropriate. I also understand that there are certain classified programs that i will be part of as the nsa and also use that and work with the National Security group to the maximum amount available bylaw. So we didnt hear what you would do to fight isis, we didnt get any specifics on medicare. Lets had hear about this most current question with respect to the committee on Foreign Investment. What would you do if youre dealing with President Trumps business. Ill deal with President Trumps business no different than ideal with any business that comes before the committee. I would take my role as chair of that committee very significantly. I think its a very important issue. I think in perhaps previous secretaries have not enforced some of these things. Innocently as much as perhaps they should have in protecting the American Workers and American People and american technology. I think this is one of the most important jobs that i would have as secretary mr. Mnuchin the president is not like everybody else. Hes the commanderinchief and any Foreign Government involvement in his business could compromise National Security. Ill reflect on that answer as well. Can i pursue one other additional question mr. Chairman. Mr. Mnuchin you ran a hedge fund for a few years starting in 2004 and ive been trying to get my arms around the mnuchin web of Bank Accounts and Shell Companies that were in the Cayman Islands. How many employees did you have in anguila. We didnt have any employees. How many customers did you have . We didnt have any customers that resided in agguila. Did you have an office there we did not have an office ourselves there. So you just had a post office box . Senator, let me explain to you just yes or no answer. Im already over my time. Hopefully the other senators will defer you some time so i can answer this for you. Mr. Chairman wait. Should go ahead and answer. He should have a chance to answer the question. Its a legitimate question. You go ahead and answer it. Okay. I like, all other hedge funds and many, many private equity funds set up offshore entities that are primarily intended to accommodate nonprofits and pensions that want to invest through these offshore entities. As it reflects my own tax situation these entities were either taxed as u. S. Corporations or u. S. Partnerships and in no way did i use them whatsoever to avoid any u. S. Taxes. They were merely as an accommodation to Pension Funds and Nonprofit Institutions and a small number of Foreign Investors and as treasury secretary if im confirmed i would look at these rules and make sure. I think you did a good job in stopping one of the abuses of offshore deferred fees, diligen things and i paid all my taxes as required. Well come back to this question of offshore deals that are commonly called the blockers. Again, im very troubled about this question of how youre going to unrig the system if youve got at that record of taking advantage of tax shelters that in effect have zero percent tax rate. Thank you, mr. Chairman. Mr. Mnuchin, as you can see youre going to get questions like this, and what was legal at the time still being criticized. But im sure you heard about allegations you profited from predatory lending during the housing crisis. An Investor Group you headed formed by reformed indymac failed institution responsible for many low and no doc Mortgage Loans to a viable institution called one west which you described which offered Loan Modifications often above and beyond what other institutions were doing to more than 100,000 borrowers. At least thats what it looks to me. During all the foreclosure turmoil, the Obama Administration official set up a National Loan Modification Program called hhm prcphhmp. Many members of congress on the other side and aisle fell short of its goals and had significant design flaws. In testimony before congress in 2011, special Inspector General identified that quote there have been countless publ lesless pubs of participants having worse off for engaging in a futile effort to obtain sustainable relief that the program promised. Failed modifications left borrowers with more owing on their loans. Worse credit scores. Using provocative language weve heard supporting your axes during the foreclosure crisis i guess you could say then secretary treasury secretary geithner was at that predatory loan modifier. Using that type of logic. Now, mr. Mnuchin did one west have any interplay with obama mr. Stations program and was that Program Successful in preventing foreclosures on struggling american homeowners or could more have been done by the administration . Senator, thank you very much for that question. That is a very important issue. When we did the indymac deal with the fdic we committed to the fdic we would continue the Loan Modification Program. It was after that that the Obama Administration came up with hhmp. We had no obligation to do that. We could have continued to do fdic Loan Modifications but we felt it was the appropriate thing to do voluntarily go into u. S. Treasury hhmp program. So we voluntarily went into that program. That Loan Modification Program was a Prescriptive Program to see which was better either foreclosuring on a home or providing a loan modification. To the extent the net present value was higher on foreclosuring we, unfortunately, had to follow the hhmp rules or severe lly penalized if we didn proceed with foreclosures. Those were not your rules. These were rules driven by the administration. Which administration . The Obama Administration. Let me ask one more question. The tax law has become much too complicated. Stories of people getting their Tax Liability incorrectly calculated is commonplace. Creating a tax gap between a difference of whats owed versus whats paid. Its clear that theres a major problem and something needs done address the problem. To your credit, mr. Mnuchin you talked about your desire to simplify the tax code. Thank you. Im glad youre talking about that. My question to you is how to address this problem. Do you have any suggestions for how to make the Internal Revenue code less complex or at least keep it from getting more complicated and would you realm moratorium on tax regulations and should the tax laws raise revenue for the government and stop trying to achieve so many other social goals or societal goals . Yes, senator i agree with you completely. One of the things its bean great honor to travel with the president elect and ive been one of the chief architects of his economic plans. We believe the most critical issue is creating economic growth, and passing tax reform is major component of that. And our tax reform plan we believe the tax simplification and fewer deductions are absolutely critical. You mentioned about the tax gap and thats something ive been reading about and studying. I was particularly surprised that at looking at the irs numbers the irs head count has gone down dramatically, almost 30 over the last number of years. I dont think theres any other Government Agency thats gone down 30 especially for an agency that collects revenue this is something im concerned about. Now, perhaps the irs just started with way too many people, but i am concerned about the staffing of the irs. Thats an important part of fixing the tax gap and im also very concerned about the lack of first Rate Technology at the irs, the issue of making sure that we protect the American Publics privacy when they give information to the irs, Cyber Security around that and also Customer Service for the many hardworking americans hat are paying taxes. Senator grassley, youre next. Like i told you when we met in our office, i dont have any gotcha questions so i would let you know. Let me go along the line of the first statement i want to make. I dont expect to you answer unless you have some misunderstanding of our position discussed in my office. Pro growth tax reform will be a top priority for you. I agree and look forward to working with you and president elect trump on that point. As part of any tax reform proposal it will be important that adequate transition rules are included to provide a smooth transition for businesses that may be unpredictably negatively impacted. As we discussed in our meeting, congress has already effectively put in place transition rules for some alternate energy cluing wind, the production tax credit is currently scheduled to phase out over the next few years ending in 2020. Based upon our conversation i believe that we are in agreement that you would support the current phase out as part of any tax reform proposal. Question two. Ive been a strong proponent of the irs private Debt Collection as senator schumer. In 2015 Congress Updated and made mandatory the irs private Debt Collection program. This program is designed to chip away at the tax gap by requiring the irs to contract with private debt collectors to collect inactive tax debt owed. These are the tax debts not being worked by the irs. And absent this program would likely never be collected. Adding up to 187 million in 2017. Out of that 187 million the Treasury Department has provide debt collectors to collect a net of 8 million. This certainly is not due to the lack of inactive tax debt available for the irs to assign. According to the Government Accountability Office Report the irs has over 130 billion of outstanding debt on its books. So hamstringing this program by refusing to release inactive debt for the programming ought to be considered unacceptable by anybody. So can you give me assurances that the department of treasury under your leadership will work to implement the program to the full extent of authorized law and bring in this tax money thats not being collected . Yes, senator. First of all, thank you for having spend time with me. I appreciate the opportunity to speak fwou a lot of important issues. On these issues i absolutely agree with you that we do need to have phase out rules when we change thing and i support the phase out of that as you suggested and then on the irs, i think that most aspects of taxes should be handled. As youve described to the extent we have 100 plus billion of receivables that are just sitting there and that we can collect tens of millions or hundreds of millions of dollars for the American Public, particularly an environment where were looking for money for so many programs, this to me i agree with you seems like a very obvious thing to do. This will have to be my last question. In 2006 i was successful in enacting legislation to enhance the irs Whistle Blower Program. The program has been one of the most effective programs in addressing tax evasion. Leading to the recovery of more than three and four tenths in billion dollars in taxes that would have been lost to fraud. Theres resistance in the irs to the Whistle Blower Program and ongoing concern has been poor communication with whistle blowers who often wait in the dark years with no feedback from the bureaucracy. Another concern is that the irs has chosen to interpret the whistle blower law narrowly to the detriment of whistle blowers in several instance. For example, the irs has interpreted the terms collected proceeds, which is the base for determining the amount of an award to exclude criminal penalties and certain other proposeds such aspen analyticals assessed for undisclosed foreign Bank Accounts. Two questions and ill state them both. Should you be yirmconfirmed can count on you to be supportist of the whistle blower and would you be willing to review the irs Administration Program including its very narrow interpretation of the words collected proceeds . Absolutely, senator. You have my you a suassurance. The majority of americans voluntarily file their tax returns honestly. But we are all aware that there is tax fraud. And there is tax evasion as youve said and we need to be diligent and tibl whistle blower laws are a very important part of that. So i will work very hard with you on that. Thank you, senator. Thank you very much. Senator stabenow. Thank you very much mr. Chairman and welcome. And congratulations on your nomination and welcome to your beautiful family as well. I do want to follow up on information that we just received last night that were additions to your recent financial disclosures. I havent had a lot of time to take a look at that. We just received it last night. But you failed to include your position as director of Cayman Islands corporation as well as manager chairman or director of seven additional shell corporations and holding companies, nearly 100 million in real estate. As well as a number of other things including 906,556 worth of artwork held by children. As treasury secretary and as we go into tax reform, would you support closing tax loopholes in the u. S. Tax code that extremely wealthy people use such as yourself have used to avoid paying tax. We heard about the Cayman Islands for years and the buildings that have had thousands of companies that have used it as addresses, and would you be willing to close those loopholes . First of all let me comment i very much appreciated the opportunity to meet with you and i traveled to your state many times and have great admiration for your state. The president elect had a very significant economic speech in detroit and weve been very focused on time in your state. So i appreciate everything that youve done there. Let me just comment on i realized last night you got a memo on some changes to my Senate Questionnaire so thank you for giving me the opportunity to comment on that. I think as you all can appreciate, filling out these government forms is quite complicated. There were many things i expected in this job including having to sell everything. But the amount of paper work in filling out the forms even for me having experience in business was quite a job. In an effort to get the Committee Information early, we submited a preliminary questionnaire prior to us having the 278 form finished and prior to signing the agreement with the ethics office. Let me first say any oversight, it was unintentional. You did mention that there was 100 million of real estate. I was advised by my lawyer that we didnt need to disclose that on the questionnaire because it didnt need to be disclosed on the 278. There was some confusion about the complexity. We worked tirelessly with the kmeelt sta need staff and i want to thank the staff they worked very long hours. They were extremely thorough. I appreciate their work. We delivered over 5,000 pages. I can assure you they actually read all those 5,000 pages because when i had an opportunity meet with the staff with my lawyers and accountants we answered some very specific, some very specific questions excuse me. I dont want to interrupt. I have very limited time. I appreciate the Additional Information and the clarification but my question goes to what you were actually disclosing, and particularly the Cayman Islands. Did you use the Cayman Island corporation to avoid paying tax. Would you support closing tax loopholes that very wealthy people have consistently used in the Cayman Islands to avoid paying taxes. Thats really my question. Let me be year. Again, i didnt use a cayman entity in anyway to avoid paying taxes on myself. So there was no benefit to me from the cayman entity. As i stayed cayman entity was set up to accommodate nonprofit and Pension Funds that to invest through offshore. So you helped others avoid again, im not going make a comment. Again, they didnt devoid. They followed the law. Because i have experience as a Hedge Fund Manager i am committed to tax simplification. I think it makes no sense we would encourage Hedge Fund Managers to set up entities in the Cayman Islands or any where else where as you pointed out i didnt have any physical people. This is not like there are people who set up offshore businesses and put all their people offshore and you heard of invefrgss and those types of things. They are perfectly legal and hurt the American Workers. In the Hedge Fund World this is set up to make accountants rich and i want to work with the irs to close these tax issues that make no sense and make sure were collecting the proper amount of tax. Would you support closing those loopholes . I would support changing the tax laws to make sure that they are simpler and more effective, yes. Senator crapo. Thank you very much. Mr. Mnuchin i appreciate you being here and your willing nose go through this and to serve the American People. We truly need the kind of vision that President Trump has enunciated for the country and youve helped work with him to achieve for the country. As a part of that one of the things youve already mentioned today and im paraphrasing you but i believe you said we have a regulatory excess in the United States in many circumstances that can, and is inhibiting lending and inhibiting capital formation, two very important things that i think are critical to a pro growth economy. Could you elaborate on that . Sure. Let me first say i absolutely believe in proper regulation. And before i had the opportunity to put in a bid for indymac bank i had to be issued a charter and i worked very closely with what was the ots at the time and by the time i was a big fan of you merging the ots with the occ in getting rid of another regulatory agency. At the time i worked with the ots and the fed and the regulators explained to me at the time and i told them that i understood the responsibility of being given a banking charter. I took that very, very seriously. I must say that i enjoyed work with vvery smart regulators and i have tremendous respect for them. Matter of fact, one of the few things that the wall street journal wrote nice about me, they made a comment that i told everybody we had to treat the regulators like our best clients which i believe. The regulators and the relationships with them in following the regulations nothing was more important given the trust they had put in us. Having said that i witnessed firsthand multiple regulators, the occ, the ofdic, the consumer protecti protection bureau. My biggest concern and i fully support regulation for banks with fdic insurance but my biggest concern is that this regulation is killing community banks. Were losing the Community Banking business. Were losing the ability for small and medium size banks to make good loans to small and medium size businesses in the community where they understand those credit risks better than anybody else. And i think that we all appreciate the engine of growth is with small and medium size businesses and in my role and work the different regulators, i would make sure that we did what we could to have proper regulation but eliminate overlap as well as make sure that the banks are lending to small and medium size businesses and we dont end up in a world where we only have four big banks in this country. You led into my next question. In a closely related matter, as you know, as the secretary of treasury youll have a very Important Role as the chair person of fsoc and in my view fsoc has focused on very heavily to concussion on statutory mandates, some statutory mandates while ignoring others. One of the statutory mandates that the doddfrank act requires fsoc to do and this is the statutory language advise congress and make recommendation in such areas that will enhance the integrity, efficiency, competitiveness and stability of u. S. Financial markets. To date frankly im not aware of fsoc fulfilling that role. We dont get a lot of advice from fsoc. We get a lot of directive in the country. Will you pledge as the kmarn of fsoc you will ensure the Council Considers ways to make the u. S. Markets more efficient and work with congress to achieve those outcomes i absolutely will, senator. Let me just comment, i do support the volcker rule. The concept of proprietary trading does not belong in banks with fdic insurance. But Federal Reserve just put out its own report that the volcker rule has completely limited liquidity in many markets and the Federal Reserve is concerned that the interpretation of the volcker rule doesnt allow banks to create enough liquidity for customers. So thats something i would, i would absolutely want to look at. Senator, i want to thank you for now in great esteem of having the minutia rule with the buffett rule and volcker rule. I take that as a great compliment. Thank you for putting me in with these other great people. Thank you. Good morning. I enjoyed our visit yesterday. Were you a director of Dune Capital International limited a Cayman Islands corporation. I was. Thats correct. Did you move a hedge fund Dune Capital Partners llc to anguilla . So, senator, first let me just comment. When we talk about moving, okay, you know, its not as if i had 50 people sitting as weve talked about. I understand. I do want to comment and, yes. So dune capital llc, which was our master fund and not to get into the nuances of this, but when one runs an onshore fund and offshore fund theres certain efficiencies of keeping the assets in whats called a master fund, and because we set up the Master Funding in a anguilla i was required im running out of time. Ive got to get to the question. Sorry. The question is both of those were for a tax consequence located in the caymans as well as anguilla and so the question is you said you support tax reform. Do you support closing those kind of tax avoidance provisions . The anguilla and the Cayman Islands type tax avoidance in the tax code. So let me just comment that when i did move it i had to apply to the irs. And the irs approved it as a foreign eligible entity to be taxed as a u. S. Partnership. So from my standpoint it made no difference to me whether it was located in delaware thats not my question. Im giving you a slightly answer. Its a complicated issue. Can you just tans question. The short answer is yes as ive said before. I think i would work with the irs and with congress. Okay. As ive said. It makes no sense, okay, that we have all these requirements to set up these offshore entities which, again, didnt benefit me, but did benefit certain nonprofits and pensions, and we should address the issues for nonprofits and pensions and understand why they need to invest through these offshore funds. I wouldnt want to do anything thats detrimental to the pension holders or these nonprochts but i would commit to work with your office, senator and make sure we fix the system. All right. We talked about inbank yesterday and talked about it becoming one west. You said you bought the indy bank the portfolio of reversed mortgages and to your credit you said once it became one west that you did not sell any more reverse mortgages. And yet, you as the ceo, i want you to comment on the fact that of the reverse mortgages that you acquired from indy bank, some of the folks were not treated very well. I mentioned to you yesterday a 90yearold lakeland woman was foreclosured on because of a 27 cent payment error. I did not mention two others, foreclosuring on an 80yearold orange park florida woman that your bank claimed didnt live in the home when, in fact, she did and she happened to have the foreclosure papers served on her in the home that the bank said she didnt live in. Another example a married couple in their 50s trying to make the best of everything. They asked for a loan modification of west bank and then which they were eligible for and instead they were foreclosu foreclosed on. Explain to the committee if you would and i think youre an earnest, well intentioned person but youre sitting there as ceo and this stuff is happening that is very unfair to little people. Why . First of all, senator, again, thank you for taking the opportunity to meet with me. I appreciated that and the time to speak about these important issues. Let me first say, to the extent that we make any errors or we ever foreclosed on anybody, i completely understand that the hardship that created. As i mentioned we did go through an independent foreclosure review and unfortunately there were some issues, very, very low rates relative to everybody else and we paid money to those people to make them whole and i earnestly feel terrible for any mistakes at the bank. Let me comment on, also, that once a week i chaired an internal committee that dealt with customer complaints. So any complaint that went to our regulators, that went to a snarkts went to a member of the house, or went to what we called the, came through those, we had a special group of people that reviewed every single one of those complaints, responded to all of your offices and responded directly to the barrow borrower. We had a committee come in and test us. It was a big concern both from the fdic and occ when we took over indymac the amount of complaints speck dramatically. As i shared with you the reverse Mortgage Business was not something we wanted to buy, that we agreed buy that as part of an overall solution. What we were trying to do is create a Regional Bank and that business really had no part it. There were about a billion and a half reverse mortgages that the bank owned. There were to 6r billion of reverse mortgages that we didnt own that we serviced for third parties. And the majority of all those third parties were hud guaranteed mortgages and as i pointed out i think theres some very significant issues with the hud program. One is as ive mentioned is a problem with taxes and insurance that if theres a shortage on tax and insurance because somebody out lives their expectancy hud forcedous to foreclose. Theres another problem a nonborrower spouse where the spouse wasnt on mortgage at the time that you had to foreclose on the spouse. We discussed these issues with hud. If im confirmed i would look forward to discussing these with dr. Carson and hope hud would seriously consider looking at these things though its not under my responsibilities, i would share my concerns. These are government guaranteed programs where we are foreclosing on Senior Citizens and i can assure nothing was more pain staking to me in the whole place and i will tell you i cant talk about specific loans because of privacy but there are certain things that were in the press and the most troubling loan we had was actually to the octomom and we worked very, very hard. That was a terrible situation and we worked very, very hard to move her to another home that they could afford. I can assure you that as chairman of the bank i took these issues very seriously. Its not to say that we didnt hatch certain mistakes. There were mistakes. We regret those mistakes. As i mentioned, we had hundreds of thousands of delinquent loans. And just as an aside when you talk about Loan Modifications, banks are hively incentive to do Loan Modifications. Anybody who thinks we made more money foreclosing on a loan than mody fact loan have no understanding of this. We were highly incentive. Foreclosing on people is a terrible thing but cost try to the bank. We believed in Loan Modifications and financially incented to do so when we could. Mr. Chairman i look forward a second round. Senator menendez. Thank you. Congratulations on your nomination. I have a different line of questioning. The information that came to us this morning made me concerned. On december 19th of last year, you signed a notarized affidavit on questionnaire to finance committee certifying it was true, accurate and complete. Question 11 of this questionnaire asked nominees to quote list all, all positions held as an officer, direct jobs trustee, partner, paranoia tore, agent, consultant of any corporation, firm, other Business Enterprise or educational or other institutions. That seems to be pretty pervasive. Almost like an open book test. And yet you did not answer in that questionnaire listing your position as director of the Cayman Islands corporation. And nearly 100 million in real estate. And that questionnaire was corrected only after the Committee Staff having done their Due Diligence brought the missing information to your attention. Now, after that you admitted to being the director of the offshore entity Dune Capital International limited, a Cayman Island corporation. You admitted to moving your hedge fund Dune Capital Partners llc offshore to anguilla in 2005 even though all the business was conducted in new york city. So, you know, i have a ton of other questions on policy. But first and foremost is truth and veracity, what americans need in their treasury secretary to know they will be asked to do difficult things or challenging things that they understand that this is the system. Isnt what you did here is take these companies, put them offshore so you could help your clients who you were making money from avoid u. S. Taxation . No thats not true at all. Then why would you zmoosh thats not true, senator. You just described that the purposes of creating these offshore entities were to help pensions and other entities. And the only reason to go offshore as senator grassley said when he was, i think, the chairman of the committee is the difference between investing in the United States or the Cayman Islands is the possibility of avoiding u. S. Taxes. Your clients, you made it very clear you paid your taxes. Okay ill accept your word on that. But the people or the entities that you were helping and making money from, you were helping them avoid u. S. Taxes, otherwise they could have invested here. Senator, let me first tans first part of your question, which i will tell you and i said this before and ill repeat it again. I assure you that these forms very complicated. I dont have the form in front of me but i believe it said to the best of my knowledge this is true. When i certified those forms i thought it was correct. Perhaps it was a mistake in giving the Committee Information early and i should have waited until i had finished the 278 and it was not just a function of our office. We were in the process of correcting things. It doesnt take a Rocket Scientist to understand the word list all positions. All positions. Senator, in all due respect i had a lot of complicated entities. Youre referring i didnt list the director. I listed the entity. The fact i didnt list itches the director was not an intention to hide anything. My lawyer who is quite sophisticated in this stuff and has done this for many, many nominees before believed that we filled out the form correctly and that lets get to the heart of my question. The heart of my question is didnt you create these offshore entities that most americans cant take advantage of in order to help your clients who you were making money from avoid u. S. Taxes . No. Not necessarily. Okay. So first of all i want to says its important that the committee what were you doing it for then . This was done so that different entities could invest. So sometimes it had nothing to do with tax. It had to do with what they could invest and couldnt invest in. As i said to you, if you want to put me on for the entire hedge fund and pension fund, you know, we should have an irs session to go through these issues and i would be more than happy to work with you and your offices to go through. These are very complicated issues. I appreciate that. Let me make the complication simple. One does not go and create offshore entities at the end of the day other than to avoid in some form or fashion the tax laws of the United States. Thats pretty simple. And so that may be the legal in which case we should definitely close it. You have to question whether or not thats the essence of what we want as leadership and so i would like to hear you be more determinative of saying yes well close all of those down if i can convince the president elect and congress because what you may have done was legal but certainly to help people and entities to avoid u. S. Taxes. First of all, im committed to work with you and your office on tax simplification and to cut down and make sure that we dont let anybody avoid taxes. In certain cases which is not a function of avoiding taxes it was to create eligible investments for certain nonprofits. Im on board with what you said. I would be happy to work with you office to simplify the tax code. Whose investments were ultimately eligible to avoid taxes. It may have been an eligibility issue and not a tax issue. I agree this does not make sense and i would work with you and your office. I committed to that to make sure why people need to move things. Were not creating jobs there. This is where entities are housed. I agree it will create a lot less work for the Tax Accountants and lawyers and make the American Public more money and move our irs resources otherwise. I agree with you completely, senator. Your time is up, senator. Its ironic and hypocritical of my friends on the other side of the aisle to find religion on offshore account holdings. Evidently memories are short at least two of president obamas nominees that now serve in his cabinet have Cayman Island holdings including the currents treasury secretary who also ran a Business Unit at citigroup, bailed out mega bank which he received close to a Million Dollars in bonus. That unit has been sanctioned by the sec for selling toxic assets that quote harmed investors. With regard to the nominees disclosure to the committee as part of the committees bipartisan vetting process mr. Mnuchin in good faith submitted answers to Committee Questionnaires and other materials that were later modified. His file is now complete. To meet the demands of some of my democratic colleagues the disclosures now include Financial Information thats usually kept confidential. Such as the value of personal residences. The committee appreciates mr. Mnuchins efforts to work through the complicated request for information on what is by any reasonable measure an exhaustive vetting process but i think, lets be fair here. Mr. Chairman, so were clear the bipartisan staff called out these offshore investments of both democrats and republicans. Secretary lui and others. Thats the reason people even knew that mr. Mnuchin hadnt filled out these forms properly. We did it because the American People deserved to know about mr. Mnuchins offshore investments. But our track record has been bipartisan and we called out both democrats and republicans as i mentioned. I think so. Thats the purpose of it. But lets be fair about it too. Thank you, mr. Chairman. Thank you, mr. Mnuchin for being willing to serve and to go through this process. I want to bank you for meeting with me in my office and going through many of the accounting functions and initiatives that youll be manage. I dont ask those in these kind of meetings because i notice it puts the audience to sleep. They are very important and i was impressed with your answers. Im impressed with your privatesector experience. Ive always said that every business looks really simple unless youre the one who has to make the decision on it. How far ahead you have to make decision and how you fine employees and train employees and meet all the federal regulations. Well, youve actually worked with those rules. You actually have been forced to learn some things that are going to be story your job and thats pretty unique situation. This is the biggest business in the world. And we dont even make decision timely. Were still working on last october 1st spending bills. There are a lot of things around here that have to change and some of them youre going to be in a position to do and ive been really impressed with the knowledge that you already have shown with this committee on Different Things that most of us have never had any experience. Now, i covered a couple of specific things here because i think the Internal Revenue service has often strayed from its core function of responsible revenue collection. I hope the Trump Administration makes sure the irs stays on track while improving record with how it communicates with taxpayers and practice sensors. People havent been able to get answers. Something thats been more disturbing to me toil miscellaneous straight in recent years the inserted flyers with the tax refund checks, and those flyers, one pronounced by the Consumer Financial protection bureau, outside of our oversight and solicited cases from the taxpayers about their money. Its not appropriate for the cfpb, an independent organization or any other organization to solicit information from taxpayers, nor is it appropriate for the irs to help facilitate this. As the treasury secretary, would you stop this type of activity . Do you believe thats in the role of the irs . Senator, thank you. And, again, thank you for taking the time to meet with me and thank you for your Long Standing Service to our country. And, yes, i absolutely would work with you on that. I dont think it makes sense that the irs is doing that. I would want to understand what the reason is. But it seems to make no sense to me. And, you know, as ive said to you, i think one of the big issues is around the irs, technology. I would use my expertise in technology to make sure that we bring the irs up to date. And thats a function of, you know, i understand old email systems, old privacy systems. We absolutely need to make sure. And this world of Cyber Security and being such a big issue, we need to protect american taxpayers information. And there should be simple ways that the irs can interact with the american taxpayers. If you can get good service in the retail online business, there is no reason we cant use that same type of technology for taxpayers to communicate and get their information securely with the irs. So i look forward to working with you and your office on that. Thank you. Senator, if i could interject, you mean youre going to help us modernize the irs . It would be one of my great priorities, absolutely. My gosh. That would be a wonderful thing. I hope thats at least a bipartisan issue that we can all agree on. Since the chairman used part of my time, i would like to get this question here. In to 2012, i introduced the job creation and International Tax reform act that would help fix our tax code and promote u. S. Economic and job growth. And that bill would help to right the ship by pulling our International Tax rules into the 21st century and make them more certain so that the u. S. Companies are not at a competitive disadvantage with foreign companies. It would give American Companies incentives to create jobs in the United States and undertake activities here at home so that they can win globally. I would encourage u. S. Companies to develop and keep rights to their ideas and inventions in the United States, rather than shift them offshore. Do you agree that our current International Tax system is outdated in places that u. S. Companies at a competitive disadvantage with our foreign counterparts and would work with me on International Tax reform . Couldnt agree with you more. I think the fact that we have Companies Like apple that have hundreds of billions of dollars offshore, because of the differential and tax rights and their being penalized to bring back money. One of the things i think, you know, we all agree on, and ive talked to the president elect. He believes we can bring trillions of dollars back onshore so that that money is invested in american businesses and creating jobs. And i absolutely look forward to working with you and your office on tax reform, bringing down Business Rates for big businesses and small businesses, and making America Business the most competitive in the world, so that were not shipping jobs overseas and money overseas. Thank you. And i have some questions about the debt, and how were going to handle that and as budget chairman, im interested in that. Again, it gets into those number minutia minutias. Welcome, mr. Unusual mnuchin. Even now, i think a lot about how to create a nurturing government. I want to talk about that. But before i do, some of my colleagues have raised, i think appropriately, tax havens. You have mentioned the irs. In the past years, several times in the past couple years, john koskan has sat where you hit. Selected to serve a fiveyear term. I think he has maybe another year to run. He is in his 70s. He took this job not because it was something he aspired to do, but asked to do this for his country. Hes one of the finest public servants. I know. Often berated in the house of representatives, which i thought was lunacy. The accountability has said and you have said here today, we give the irs less money than they need. They dont have the people, the technology they need. For every dollar we invest, we get at least 4 back. So much as 10. This is not so much a message for you. I think youve got it. But the message is really for us, interested in raising revenues and not having to raise taxes. Thats a good place to start and i was encouraged what you had to say. Cfpb, 30 seconds, your take on the cfpb, how are they doing . Worth keeping . Well, first of all, its real quick. Okay. Thats a complicated issue. So but yes. Okay . The Biggest Issue i have with the cfpb is that i dont believe they should be funded out of profits from the fedal reserve. I think they should be funded out of an appropriation process. Okay. Thats good. Thanks very much. When i think of that nurturing environment i mentioned earlier for job creation and job preservation and a lot of components to it, among them are actually funding research, actually making sure that were doing a good job protecting intellectual property. Sensible tax code, common sense regulation. Affordable health care, finding ways to get better results, maybe for less money. Weve had people who suggested to us one of the components can actually go gdp is substantial investments in infrastructure. I have suggested for a number of years we use what an approach we have taken for years, and that is the people, the businesses that use our Transportation System would actually pay for them. We have done that for a half century. I think that makes sense. There are other ideas, as well. Vehicle miles traveled where sort of like, you know, figuring out how many miles a vehicle is traveling. Different approaches to that. But there is some interest in the administration, Incoming Administration and infrastructure investment. And theres another time to talk about that. One of the things ways to go gdp or grow jobs is to export, do a better job of exporting our products and getting into other markets. The transpacific trade partnership, tpp, proposed to take down a lot of barriers overseas and enable us to have better access to those markets. And also at the same time renegotiate at nafta, as you may know. That seemed to me like a pretty good deal. And i understand that theres interest in the administration renegotiating nafta. We did that in tpp, but your thoughts on the trade policy, especially the transpacific trade partnership. Well, first of all, thank you. You have raised a bunch of very, very important issues. Im just going to ask you to go to that one issue, if you would, please. And its not a trick question. I wrote down five i wanted to comment on. We just dont have time. Just on trade agreements. So on the trade agreements, i think, as you know, the president elect is very much interested in free and fair trade. And as youve commented on, this is not about limiting imports. This is about growing exports. There you go. As much as we can be. Youve also commented on intellectual property. I think one of the biggest problems in certain of our trade agreements is our American Intellectual property is not being kept and is being taken in foreign countries. Youve mentioned nafta, the president elect is very much interested in renegotiating nafta. So that we can keep more jobs here. I think as you know, hes picked up the phone and called many ceos. I cant remember the last time a president or president elect did that and worked for the American Workers. And i look forward to working with you and your office. You have raised some very, very important issues. Okay. And infrastructure, again, at the appropriate time, i am happy to comment on infrastructure. Thank you. Because thats very important to the president elect. One last quick one. Comprehensive Immigration Reform. One of the things we have learned is not only can we grow gdp but smart Infrastructure Investments and some other things, but also comprehensive Immigration Reform. We strongly urged by the Business Community for years to do it. Any take on that . Again, you know, i think you know immigration and Immigration Reform is very important to the president elect. Its not completely in my lane, but ive been with him so i understand his views on that. And i think he looks forward to working with the house and senate on a very important issue there. Well, if you dont share his views on comprehensive Immigration Reform, i would just ask you mentor him a bit. Thank you. Senator card dan mr. Mnuchin thank you very much for being willing to serve your country. I want to follow quickly on senator car pers point. You have allies on both sides of the aisle that will help you. Good professional people work there. Under very difficult circumstances. There are not enough people there, so i hope youll be effective with president elect trump, because i understand hes calling on a freeze. Im not sure how that coincides with your desire to make sure you have adequate personnel at irs. But i assume youll have an opportunity to talk to the president , and hopefully get the number of people you need. Because they cant do it with their current work force. I can assure you, the president elect understands the concept of where we add people and we make money. Good. Hell get that completely. Thats a very quick conversation with donald trump. I want to follow up with senator wydens point on a couple issues. First, i wear another role in this senate. Im the ranking democrat on the Senate Foreign relations committee. So i want to deal with these sanctions for one moment. I heard you in r