Your agency, the department of treasury, as responsibility for fostering our nations Economic Growth and ensuring fiscal stability across our financial system. Our countrys growing debt and underperforming economy should be front and center in these conversations. America is faced with a mammoth nation debt that is over a patrol dollars and an economy thats holding back growth. We had a modest 2 rait over the next 30 years pro protections doubled from 77 in 2017 to 150 in 2047. In order for congress to tackle this enormous fiscal challenge it must reduce spending and ensure outlay growth does not outpace our economy. But wels must focus on the other critical part of the equation, growing our gross domestic product. Ive suggested including longterm debt to gdp targets in the federal budget process which would provide key goals and bench marks for the budgets of both congress and the president. If baseline projections do not comply with these targets, the administration would need to submit a plan to bring the current law projections back into compliance. Congress will be asked to raise the debt ceiling again this year to cover spending thats already obligated or essentially already spent. We must also prioritize changing the trajectory of our overspending. The administration has proposed a budget that balances and its been years since the white house has even attempted to accomplish that be goal, but Congress Must implement these reductions and deficit spending and Economic Growth policies to put our nation on a better fiscal path. One way to promote Economic Growth is through tax reform that does not increase the debt. Both parties and many administrations have recognized the inefficiencies in our tax code and the negative impact it has on Economic Growth. If we can broaden the business while lowering tax rates and simplify our tax laws, it will help limit government distortion of marketbased decisions, increase investment, and growth of businesses. I appreciate that President Trump and the treasury have identified guiding tax reform principles and want 10 to gauge congress about navigating a path forward. We do need a simpler, fairier, and more transparent tax system. We all agree that tax reform is long overdue and we need to take the steps to reform our tax system while promoting economic and job growth. Im confident that having an administration that set tax reform and stronger Economic Growth has priorities and that has committed to, would with skon gress will allow us to get a bill across the finish line. How the Budget Committee scores a comprehensive overhaul of our tax code is one question well continue to work on with the administration. Past scoring practices do not include the reaction of the general economy to major policy changes. That means lawmakers are only getting a partial picture of how an important policy might actually affect the economy. Dynamic scoring can add missing economic information that static scores do not provide making the score more complete. The joint committee on taxation has multiple Dynamic Models which they combine with different assumptions about Federal Reserve policy and labor supply elas stis sity that produce a range of results. Theyve reason providing these models for decades. In order to provide us with critical information on major policies that can promote growth and theyve consistently recognized the link between taxes and output in the economy. Having the joint Tax Committee select a single best point estimate for congress to weigh against the current law baseline is how we enforce the budget. This committee continues ton discuss how dynamic feedback can be used for enforcement and we welcome input from the administration and the treasury on this matter. Treasury also plays a key role in many of the other growth policies proposed by President Trump, regulatory relief, international trade, incentivizing private investment in the infrastructure to name a few. The zriegs has proposed a financial deregulation plan to rid the Banking System of red tape caused by the dodd frank act and announced to withdraw from the paris climate agreement. Each step gets us closer to 3 Economic Growth which returns our economy to its historic average rate. The Budget Committee sets congress preferred legislative path for growth. I look forward to considering a fiscal year 2018 budget that promotes the economy, creates jobs, and tackles our mammoth National Debt. Thank you for being willing to serve and i thank you for the great people that youve gotten to hip out. Senator sanders. Thank you, mr. Chairman, for holding this important hearing. Mr. Ma mnuchin, welcome. Mr. Chairman, during his campaign for president , donald trump told us that at a time of massive income and wealth and equality, the very, very rich are getting richer, almost everybody else is getting poorer, that he, donald trump, wars going to stand up for the working families of this country. He was going to take on the establishment, and he was especially harsh on his words about wall street greed. He said he was going to drain the swamp. He said, and i quote, we cant fix a rigged system by relying on the people who rigged it in the first place, end of quote. He said, im not going to let wall street get away with murder. Wall street has caused tremendous problems for us, end of quote. Thats an exact quote from donald trump. He included language, pushed language into the republican platform, which i happen to agree with stating, quote, we support reenstating the glass seeing it will act of 1933 which probts commercial banks from engaging in highrisk investment rishd of quote. He said was the only person in america, the only one, who could take on the corrupt political and economic establishment. He said, quote, we are gonna send the special interest packing and we are going to once again have a government of the people, by the people, and for the people, end of quote. Wow. Those are really dramatic statements. Here we have a president who ran hes going to take on wall street. He was going to stand up for the working families of this country. An those words no doubt must have gotten the billionaire class really, really nervous because he was taig saying all these things during the campaign. Unfortunately, as i think most americans understand, all of those words of donald trump were never meant to be taken seriously, it was Just Campaign rhetoric, good rhetoric, i must say, to get votes, but nothing that he ever had any intention of actually implementing. Donald trump talked about draining the swamp, talked about taking out wall street, but he now has more billionaires in his administration than any president in american history. Funny way to take on the establishment by having more billionaires in your administration than any president in american history. His administration, this is the guy whos going to take on wall street is filled with executive after executive from Goldman Sachs, one of the largest, the most powerful Financial Institutions on walling street. His economic advisers gary cone, chief economic adviser gary cone who was the president of Goldman Sachs and the man received 285 million severance package. His treasury wii delighted that your with us today, worked at Goldman Sachs for 17 years. Mr. Chairman, you one of the great scandals of our time which is still impacting millions of americans today is that virtually ever major wall street institution was involved in reckless, irresponsible, and illegal behavior which led to the great crash of 2008 which caused massive unemployment in this country, people lost their homes, people lost their savings. We had Financial Institutions who sold mortgagebacked securities that were worthless while they ripped off lowincome and work families throughout the country. In fact, among virtually every other major financial institution, as a result of their illegal activities Goldman Sachs alone paid a fib of more than 5 billion to the federal government. But instead of reforming wall street, which is what the president said he would do, instead of reinstating glass seeing it he will as he promised he would do during the campaign, President Trump endorsed a bill that passed the house last week that would deregulate wall street increasing the odds of yet another taxpayer bailout even bigger than 2008. Campaign for gls seeing it he will now he is deregulating wall street. In my few of Financial Institutions are too big to fail, they are too big to exist, it is time break them up. Now, mr. Chairman, with a cabinet of billionaires, it should come as no surprise that the budget that President Trump has proposed has been written by the billionaire class and for the billionaire class. Frankly, this budget that we have recently received is the most antiworking class budget, the most destructive budget in the modern history of america. This budget follows in the footsteps of the trump ryan healthcare bill which gives massive tax breaks to the people on top and throws 23 million americans off of health insurance, cuts medicaid by over 800 billion planned parent hood. The trump budget and i hope to be questioning mr. Ma mnuchin about this caused deaf stagt pain to tens of millions of families in our country by cutting nutrition programs, by slashing head start, by making massive cuts to affordable housing, by doing away with programs, life and death programs for working families. But guess what . Ghaes . Guess what . As part of a budget were looking at three billion dollars in tax breaks over a tenyear period to the top 1 . So the very rich get richer, working class in this country is shrinking roar trump budget gives unbelievable tax breaks to the wealthiest family in this country. It is immoral budget, it is a budgeting that must be defeated by the United States congress. So mr. Chairman, thank you for holding this hearing, theres a lot to discuss and i look forward to chatting with mr. Ma mnuchin on some of these issues. Thank you, senator sanders. Ill now introduce our witness. Our witness today is the honorable steve ma mnuchin, the secretary of the United States treasury. Secretary has a remarkable career including being a partner and chief Information Officer at the Goldman Sachs group, founder and ceo of the 1 west bank group and founder, chairman and koechlt of dune capital management. Prior to being sworn in he was a senior economic adviser to then president elect trump and finance chairman for his campaign. Apart from his professional roles, secretary ma mnuchin has been committed to various fill lan tlopic and charitable cause. Those cause include the ucla Health System board, la Police Foundation and Sculpture Garden right here in drks d. C. Just to name a few. Thank you for taking your time to be with us today and for being willing to serve. We look forward to receiving your testimony. Please begin. Thank you very much. Chairman enzi, Ranking Member sanders and members of the committee, its an honor to be here with you today. I am looking forward to working with members of congress in this committee on passing important legislation for American People. My number one priority as pressurery secretary is creating sustainable Economic Growth for all americans. The best way to achieve this is through a combination of tax reform, regulatory relief, and protecting taxpayers. Th this also includes making difficult decisions with are the respect to our budget. We are bearing the cost of ek excess government commitments of previous years and this has forced us into hard choices. But the remarkable thing about Economic Growth is that it builds on itself. If we develop the right policies today, our children and grandchildren will reap the benefits of an evergrowing economy. Indeed, in the next ten years if we return to the modern historic average of about 3 annual gdp, our economy would grow by trillions of dollars. This will be meaningful to every man, woman, and child in this country and future generations. Tax reform will play a major real in our campaign for growth. It has been more than 30 years since we have had comprehensive tax reform in this country. This administration is committed to changing that. We have over 100 people working at treasury on this issue. We are working diligently to bring tax relief to lower and middle income americans as well as make American Business competitive again. All of this comes as we simplify the tax code and make it easier for hardworking americans to file their returns. Finally wroir li finally, i would like to speak about the importance of free and Fair International trade. Trade deals that disadvantage American Workers and business can hardly be considered either free or fair. A in metings with my International Counterparts i have stressed this dual importance. Just three weeks ago i had productive meetings with the finance ministers of the g7 and earlier i met with members of the imf and world bank. They understand our concerns and we have approached our International Dialogue with a renewed spifrt mutual understanding. In the president s joint session to congress he spoke about the marvels that this country is capable of when its citizens are set free to pursue their visions. Fundamental to that freedom is removing imprudent regulation and uncompetitive taxes from blocking their way. This has been a significant few months at treasury. We have been studying, developing, and implementing policies that will put this country on the path toward sustained Economic Growth. In the current months we will work with this committee and congress and what we will look back on is an important time for this nations economy and our history. Thank you and i look forward answering your questions today. Thank you, mr. Secretary. S we turn to questions, let me take a minute to explain the process for the committee members. Each member will have five minutes for questions beginning with myself and then senator sanders. Following the two of us, well alternate questions between republicans and the minority. All members who are in attendance when the hearing began will be recognized in order of seniority. Those who arrived after it began in order of arrival. Ill begin with my questions. Mr. Secretary, the original estimate for exhaustion of extraordinary measures was for the fall for the debt limit but theres been an interest in raising or suspending the debt ceiling prior to the august recess. You can give us an update on when the debt limit needs to be addressed . Sure. Thank you very much, mr. Chairman. First, let me say as i notified Congress Earlier in march when we had an issue with the debt limit, my strong preference is for the house and the senate to address this as soon as possible and my preference is for you to do this before you leave for the august recess. I think that the u. S. Drollar i the reserve currency in the world. We have the strongest credit and we need to maintain that. So i would urge you and the house to do this. In regards to the specific timing, we do have plans, if you dont do it before hand that we can fund the government through september when you get back, but, again, i urge given the importance of this, that we send a message to the rest of the world and to the markets that we take our credit very seriously. Thank you. The president s budget assumes deficit neutral tax reform and provides Core Principles for discussions with congress. It assumes that more efficient tax code can get our economy growing again. You can expand on the administrations view on tax reform and Economic Growth . Sure. Let me first say that fundamentally we believe that we can get back to 3 sustained Economic Growth. Thats not this year and thats not next year, but we can get there and thats going to be a combination through tax reform, regulatory relief, and trade. On the tax side, our fundamental principles are when we need to simplify personal taxes, cut down the number of brackets, cut down special interest deductions and make it is so that mofts americans can fill out their tax returns on a large postcard. On the business side, we have a very uncompetitive system. Our taxes are some of the highest in the world. We tax our companies or worldwide income. We have a schl deferral which leaves our companies to leave trillions of dollars offshore. We wont r want to correct that and we want to bring back trillions of dollars so it can be invested here in america to create american jobs. Thank you. Which which say good leadin to my next question in 2012 i introduced the United States job creation and International Tax reform act that would help fix our tax code and promote u. S. Economic and job growth. Bill could modernize our tax rules and make them more certain so u. S. Companies are not at a competitive u. S. Advantage with foreign companies. It would get American Companies incentives to create jobs in the United States and undertake activities here at home so they could win g