Transcripts For CSPAN2 Treasury 20240706

When youre connected, youre not alone. Cox supports cspan as a Public Service along with these other Television Providers give you a front row seat to democracy. Treasury secretary janet yellen warning time is running out for congress to act on looming deadline to increase the federal debt limit. President biden suspected to be meeting to discuss the debt ceiling today. Secretary youngman made remarks during the independent Community Bankers of america. Good morning, everyone. Its great to be back and wonderful to see so many familiar faces. Id like to think with her leadership for this important work. Some of you may know this is not my first time speaking. One of my first speeches as chair of the Federal Reserve in washington politics. Our nation has seen significant economic technological change since then. It remains as firm as it was nearly a decade ago. Our Community Banks of the American Economy and Financial Wellbeing of American Families businesses. Id like to share my views about Community Banks and the recent developments in the Banking System and the debt limit situation. Community banks have always served as the cornerstone as cities and towns across the country but its proved even more important in recent years. Over the past two years the United States announced historic economic in the pandemic. The data is clear our country is back to work. 12 million jobs created since President Biden took office. In 2020, Unemployment Rate surged nearly 15 as the World Economy withstands and its now dropped to historic 3. 4 , more than a 50 year low. Its been inclusive and broadbased Unemployment Rate record low since that september and Unemployment Rates sustained earlier this year. This historic economic progress was not preordained, it was made possible by the partnership between the federal government and many institutions in this room. Community banks serve as the pillar of economic stability and local communities during the pandemic. Large banks active in the Banking Sector Smaller Banks have long played a role in the provision of financial services. As an example, Community Banks provide around 40 in Small Business loans and provide 60 of farm loans. Client relationships Specialized Knowledge of communities and able to extend big american businesses under trying circumstances. These actions help expand in your work achieved remarkable things. Many americans emerge from the pandemic in the stronger financial position than they were going into it. You take your responsibility to your communities very seriously. According to a survey, over a third of Community Banks were eliminated on credit cards during the pandemic. Some of the percentage sustained for the accounts. I saw your impact firsthand for relief efforts in the middle of the pandemic, collaborating with banks to deliver Economic Impact to millions of families. Our support helps americans put food on the table and a roof over their head. With your help and assistance, hundreds of thousands of homeowners facing foreclosure. We Work Together to deliver enhanced Child Tax Credit payments to cut Child Poverty nearly in half in 2021. We are continuing for much needed capital and underserved communities to programs like the state Small Business Credit Initiative and emergent Capital Investment program. In the prior iteration of the initiative, lenders listed 10 billion in access and accounted for 90 of programs supported loans thanks are playing an Important Role in the current program. The nation has recovered in health and financial proponents for our Community Bank stronger as well in 2020, Community Banks like all things reported pressures from the pandemic. The pressures have been a threat past two years earning has improved, Community Banks reported higher net income in 2022 since before the pandemic began. Growth has been strong and broadbased and according to the latest reports, capital ratios remain robust as the quality is favorable Community Banks have liquidity to serve customers. Performance is a testament to the Good Management of many Community Banks across the country. Let me turn to the topic on the minds of this room, the recent developments in the Banking System. In march, federal government took forceful action to strengthen the Banking System following the failures of two large regional banks. The situation is stabilized since then and aggregate deposit outflows expanding and the Funding Program is working. Like our Community Banks the u. S. Banking system remains sound. The strong liquidity and capital in the system i believe Decisive Action in march to provide additional liquidity in the system mitigated serious risk of broader financial Banking System. Let me be clear, we did not take these steps for specific institutions or classes of institutions, these actions were necessary to prevent difficult bees facing to specific banks from spilling over to other banks including banks on main street across the country. Rations in march were narrowly targeted. Management shareholders and debtholders would not be protected by the government. Taxpayers did not bear any costs in the resolution and i believe actions reduce the risk of further Bank Failures that would impose losses on the Deposit Insurance Fund paid for through fees on the banks. There have been after shots including resolution first public. I do not believe these developments are assigned of any shift in the Banking System. We remain vigilant and continue to closely monitor conditions. As ive said, effective tools at our disposal and we are prepared to take further action if needed and that includes the institution as it runs that poses a risk of contagion. Americans should rest assured their deposits are safe. Deposits will be there when they need them. Looking forward, President Biden said we must make sure we are not in this position again. Hes urged the banking agencies to consider commonsense reforms to strengthen oversight of regional banks. President biden and i are committed to do so while minimizing Regulatory Burden particularly on our nations smallest bank which faces unique challenges. The president s proposals would impose no additional regulation on traditional Community Bank. [applause] for example, the president suggested unity banks and cost replenishing Deposit Insurance Fund resulting from Bank Failures in march and last week the fdic issued its proposal for special assessment as required by law. I was encouraged the proposed assessment would not apply to banking or administrations 5 billion or less on the insured positive and in practice, that means nearly all the assessment would be by large banks. [applause] its important to me to use our remaining time to speak about one specific decision in front of congress that will have significant applications to your businesses and broader domestic and Global Economy and that the debt limit. Yesterday i told congress the treasury will likely no longer be able to satisfy all government obligations with congress enacted to address the debt limit by early june potentially as early as june 1. Impossible to predict the exact date when treasury will be unable to fail bills. I will provide an additional update to congress because more information becomes available. Nonetheless, our current estimate underscores the urgency of this moment in its potential to act as soon as possible. In my assessment and across the board, the u. S. Default will generate economic financial catastrophe. Over the past few years American Families and businesses including many viewers have worked hard on historic economic recovery and a default would reverse all of the progress made and set us back even further. Our economy would find itself unprecedented economic and financial storm, millions of American Families that rely on payments for federal government would likely go unpaid and it ranges from 66 million Social Security beneficiaries to lanes of veterans and military families who served our country honorably. Widespread suffering americans who use the income they need to get behind and as a result, it could lead to a recession that destroys Many American jobs and businesses. Economic crisis would be exacerbated by possible disruptions federal government operation. Essential services that enable Global Commerce rely on the work of federal employees and contractors and that includes air Traffic Control and law enforcement, Border Security and National Defense and food safety and telecommunication systems. Federal agencies would be unable to pay all of their bills. Its unclear if and how critical Government Services would continue to function and of course the financial crisis for companies to default on their debt could multiply the severity of the downturn. U. S. Treasury works the surge in the bedrock of the Global Financial system and there is a reason for that. The world had never doubted america will pay principal and interest on its bonds on time. Its a fundamental principle with modern finance. The default would crack open the foundations upon which our Financial System is filled and its conceivable to receive a number of financial spread and worldwide panic triggering margin calls and fire sales. What could all of this at up to . The White House Council of economic advisers stimulated the impact of protracted default. If one could lead to a downturn in a Great Recession and stimulation over 8 million americans lose their jobs, businesses, a substantial dip in the value of the market is 45 . Years of retirement and other household savings. Analytics use specific models to project the effects of default but reached a similar conclusion in its study more than 7 million americans lose their jobs and Unemployment Rate surges to 8 and 10 trillion in household bills. If that sounds catastrophic, thats because it is. This crisis is entirely preventable, the solution is simple. Since 1960, congress raised or suspended the debt limit about 80 times under both republican and democratic administrations and congress should simply do so. Raising the debt limit is not authorizing new federal spending. It governments to make good on its existing commitment so let me be clear, if they do not address the debt limit, theres no good actions for the government to use generations of americans protect the credit of the United States and leadership. Theres no reason to squander that now and trigger manufactured crisis of our own creation every day congress does not act, we are experiencing increased Economic Cost to slow down the economy. In 2011 the debt ceiling crisis right before the government stopped making payments but that led to the first effort downgrade of our Credit Rating in history. Consumer confidence fell by 20 and s p 500 limited by about 17 and spread to mortgages and auto loans which makes it harder for household to afford houses and cars. Seeing the impact of this, investors have become more reluctant to hold debt since nearly june. The impact has increased the burden to american taxpayers as the leader of the Treasury Borrowing Advisory Committee since last week. In suspending your time pining around risk of u. S. Default having to get by without the payments promised and American Families have earned. The u. S. Economy hangs in the balance the likelihood, livelihoods of millions of americans do, to. Theres no time to waste, congress should address the debt limit as soon as possible. To close, id like to return to where i began. Economic progress over the past two years has been premised on the fact that communities are able access the families. Community banks have been at the forefront of the effort as they have been for decades. I look forward to working with you to promote strong Banking System and enhance the economic wellbeing of communities served. Thank you and have a great conference. [applause] for publican representative armstrong of north dakota spoke about several atomic tool that uses markers that quickly guide you to interesting highlights and key coverage. His interest anytime online at cspan. Org. Clean energy, this is 30 minutes. Republican