Necessary for the function because it creates incentives to work hard and take risks. Left entirely to his own, the market system will produce more inequality in this economically necessary. Here in our country, we have much more inequality than is necessary for efficiency. I believe this is a moral problem from the standpoint of social equity. But excessive inequality not only undermines social and political cohesion, it is also recently been shown to have negative effects on growth and stability as well. Recent research at the imf has shown that excessive inequality slows growth, costa pricetoearnings gemelli to weaker demand and lower section. Reducing inequality is increasingly understood to contribute to Economic Growth. Inequality is also a political problem. We now have an increasing degree of resistance on the part of Many Americans to new trade agreements because they see themselves as the dems of globalization resident as participants benefit. I believe our International Economy policy has been too onesided, to focus on elevating the interest in mobility of capital over all other considerations. This is based on a misguided leaf that unfettered markets would not only create wealth and stability, but would also trigger benefits out to others in society. This is that what happening. In fact one of the most important lessons weve learned from the recent financial crisis as markets must be deeply embedded in systems of governance. The idea that markets are efficient and selfcorrecting has received a martyr blow. I believe in capitalism and the markets of the main engines of Wealth Creation in our country and elsewhere. In order to be truly support about the free market i believe you must also be supportive of government. This is because we need to have an appropriate sense of Public Policies in place to rein in the excesses of the market to help maintain stability and to ensure the benefits of capitalism and growth are broadly shared. But it sure got start dealing with equity. For example, we should be increasing the minimum wage. Extended Unemployment Insurance and providing trade adjustments and other systems. Those in the u. S. On the low skilled and who are disadvantaged by globalization. Until we do that people begin to feel secure homes will not have the support we need from our active engagement by the United States for the International Economy. Mr. Chairman, i thank you for holding this hearing today. Some of what ive alluded to in my statement are issues that are being dealt with as we consider the budget today. These issues ive alluded to include of course the unemployment benefit than i understand may not be in the budget agreement. Also, i believe that providing trade adjustment and other assistance for those that i appointed to that in the low skilled and are issues that we have not sufficiently dealt with and im looking forward to engaging you and others on this issue so we can get at how we will deal with this income inequality that is the central team of my testimony today. I yield back the balance of my time. The general idiots that are the chair now recognizes the gentleman from california mr. Campbell, chairman of Monetary Policy and trade subcommittee for three minutes. Thank you, mr. Chairman. Welcome, secretary lu. International Financial Institutions act. Theres no shortage of International Financial issues we can discuss. Ill let my written opening standpoint stands for itself. Wanting to be discussing that when you talk about it i am not here as as a reminder too that the Nine Congress authorized 100 billion to the imf in an account called arrangements. Now there is discussion of transferring 63 billion of that into permanent paid in capital. Theres a lot of concern about this, secretary lew. A number of concerns appear about this. We dont believe this is a bookkeeping entry. This was 63 billion significant analyst, were currently it is not. Second and third budget cuts theres a lot of concern whether what we are cutting a lot of domestic issues as the Ranking Member just mentioned, this is a time when we should be increasing funding to first world countries around the world. There is some concern whether a lot of this money could go to European Countries and yet they have some crises and problems but cant figure what the singer without taxpayers be involved. Theres concern about oaxaca is good with the imf making more loans to indebted to be encouraging that kind of indebtedness. Rather than trying to encourage these countries to get out of their debt and not to spend so much you borrow so much. Finally, dairy farms involved with the imac with additional contributions. A lot of concern about whether reforms are enough, whether they go far enough to change the government says it should be. Mr. Secretary, if the administration, a few if the president are committed to and want to 63 transferred, we need a couple of things. We need three things actually. We need first to value to make a formal request, which is not received by this committee for this monday. Secondly, we need to address these issues. We need the president. If this is a priority for 63 billion of u. S. Taxpayer money, we need here mr. Secretary and the president to vocally articulate why this is a priority in this era of limited budget and why these concerns that people have on this committee are not wellfounded here thank you. Look forward to your testimony. I yield back mr. Chairman. The chair now recognizes the gentleman from illinois, mr. Foster for one minute. Thank you, mr. Chairman. Thank you, secretary lew for joining us. When you left your first tour of duty in the white house in 2001, we are paying down our debt to the chin of a couple hundred billion dollars a Year Contract to pay her debt down to zero by roughly 2008. In the next eight years we saw a surplus for running reverse in a structural deficit exceeding 1 trillion a year over the next eight years. Were also sitting on eight straight years of uninterrupted job growth. Roughly 22 million jobs in eight years. We saw in eight years following her first departure zero net job growth or 20 Million People enter the job market with zero jobs produced by them. Weve made significant progress since entering the worst recession since the great depression. Receiving 45 straight months of consecutive private sector job growth and theres much work left to be done and i thank you for preparing today. The gentleman yield back. The chair recognizes gentleman from washington, mr. Hack for one minute. Thank you, mr. Chairman. Secretary lew thank you for appearing today. Are here and i am interested in is actually taken place figure Treasury Department has he speak. The Bank Secrecy ActAdvisory Group is meeting right now and it is confronting the question of how to allow Legal Marijuana businesses to access the banking system. As you know the voters in my seat in colorado last year approved initiatives to make marijuana legal for adults. These policies go into effect in the new year but we need cooperation from the federal government to make it work. If federal banking regulations continue to prohibit marijuana businesses from using the banking system, the saw cash businesses will be a magnet for robberies organized crime. You have the power to prevent that, secretary lew. I hope the Advisory Group is a new workable titans today and i hope you swiftly approve it. The time of the gentleman has expired. The chair recognizes gemology from new york, ms. Maloney for 30 seconds. Is my pleasure to welcome secretary lew from the great state of new york are new yorkers are proud of your public service. My question concerns gst refund. You mention in your testimony or growing economy and that your main job is to create jobs. Many economists have testified one of the most important things we could do is bring certainty to Housing Finance. I hope your comment on the efforts of the administration to support Housing Finance reform and certainty in that area. Welcome i look forward to your testimony. Directionality has expired. We welcome the testimony of the honorable jack lew secretary treasurer of the United States. Secretary lew appeared before a Committee Earlier this year. I believe he needs no further introduction. Without objection, secretary lews written statement will be made part of the record. After his oral remarks, again welcome to the committee. Youre now recognized for oral testimony. Thank you, mr. Chairman. testimony. Thank you, mr. Chairman. Ranking member waters member subcommittee appreciate the opportunities testify today. Thank you for the flexibility for scheduling through a number of us could attend Memorial Services for nelson mandela. There are signs the conditions improving in advanced countries led by the United States. Despite political headwinds come our economy is growing. Over the past 45 minutes businesses created more than a billion jobs. While moving in the right direction, we have more to do to create jobs to not put our economy and a firmer foundation. Astronaut, economic progress is part of the Global Economy and the Global Economy continues to face many challenges. A long recession in the euro area seem to be ending. Significant progress is achieving Financial Stability. Europe is a positioned to boost demand employment which is high in many countries. Japan can authorities have taken forceful actions to begin ending deflation. To achieve sustained success japan is to undertake Structural Reforms to strengthen domestic. Reselling emergingmarket sodas post crazy stimulus waned. Emerging markets need to make reforms that increase resilience and address structural constraints to growth. Canister leadership recently announced bold commitments to reform. The character of reforms will shape chinas economic transition or domestic consumption led growth in a way for resource intensive growth. An important part of my job is to work to create the most favorable external environment for u. S. Jobs and businesses. The International Financial institution from International Monetary fund multilateral banks are indispensable in a sufferer. We must preserve our leadership in these institutions. Thats why its so Important Congress act to approve the governments reform. At the g20 2010 we preserve the veto without increasing the u. S. Financial commitment to the imf. Right now u. S. Approval is the only remaining step needed for these important reforms to go into effect. If we fail to act them or risk a loss of influence at the imf. To implement the quota reforms the administration has provided draft legislation to reduce u. S. Participation in the arrangements to borrow and simultaneously increase the size of the u. S. Quota in the imf by an equal amount. Our investment in the imf is safe and sound. It does so subject to appropriate conditions and this repayment record is outstanding. Investments of multilateral banks also provide substantial returns that institutions leverage limited contribution from multiplying impact by attracting contributions from other nations. They also effectively promote our National Security and economic priority, including opening up markets in the ring bearers for u. S. Businesses abroad. His important to know the u. S. Will make a commitment to the International Development association of the world bank and African Development fund this year. These are the two largest sources of finance for the worlds poorest country. Their impact is enormous. Assuming 10 commitments to the International Financial institution, is crucial to continue to strengthen the worlds Financial System. The United States has led the global effort on International Regulatory reform with many core reforms largely completed at home. On tuesday double core will come a centerpiece of reforms is finalized. The rule is strong and comprehensive and will change behavior practiced across our Financial System to safeguard taxpayers are created by banks, proprietary trading and hedge fund and private equity fund. It also fulfills the president s vision by sending tough but workable restrictions are continuing to allow banks that markets function. Eskimo for the International Agenda in 2014, we will work with the g20 for the Financial Stability board to promote implementation of highquality regulation. We focus on advancing vigorous implementation of ensuring assets are consistent across borders and the highQuality Capital standards not. Will also focus on strengthening arrangements are in crossborder resolution of large complex Financial Institutions. Swift implementation of convergent requirements over the counter Derivatives Market and develop a roadmap to address risks posed by shadow banking. It us up at the forefront of efforts to use Financial Measures to be its key National Security and Foreign Policy goals. Nowhere have efforts by mark concentrated in easing sanctions to pressure to advance our policy and prevent iran from obtaining a Nuclear Weapon. Together with our International Partners and close ordination of Congress Come with both of us effective sanctions regime in history. Even as we explore the possibility of a longterm agreement with the ram that can provide verifiable assurance that her man cannot obtain a Nuclear Weapon we will continue to bursar sanctions vigorously other action this morning imposing sanctions on more than a dozen entities demonstrates. Chairman has a link in the Ranking Member waters, members of the committee come across the Global Landscape is much work ahead. With ongoing support and confident well continue to protect americans that all interests abroad and at home. Thank you amount for it to questions. Thank you, mr. Secretary. The chair yields and saw five minutes for purposes of questioning. The secretary as omb director in february of 11. Youre quoted as saying its an accurate statement that our current spending will not be increasing the debt. We stopped spending money we dont have. You said that while introducing the president have i told budget, which according to cbo added 12. 5 trying to the Gross National debt over a 10 year budget window. Under your watch 1. 4 trillion was added to the Gross National debt. Im trying to get some insight into the administrations view of our national debt. Do you still can buy those comments . Is there some context or are those comments . Mr. Chairman, at the time i was trying to explain the difference between a primary ballots, primary surplus and spending. Its been a common new commitments being made. The definition of primary balances when the only deficits related to pain interest on the national debt. Other than that were covering all of her expenses. Let me then to find to a statement the president made fairly recently about six weeks ago. Dont pretend as if americas went bankrupt at a time when deficit has been cut in half. Isnt it true, mr. Secretary and these deficits have only been cut relative to the largest deficit in our nations history as a world war ii . Mr. Chairman, if you look at the reduction in the deficit since 2009, we seem the most rapid reduction in the deficit as a percentage of gdp. Werent these the largest deficits in our nations history . We did come in at a time when we inherited a large deficit. Were in a financial crisis. Mr. Secretary, if you are unaware i would have your aides take a look into it. I think youd find that probably is true. Also come to cbo released their latest longterm outlook. Have you had a chance to look at it . It came out also roughly about six weeks ago. Unaware of it. Under current our current policy, and a science, deficits come in temporarily until 2015 and rites thereafter with no end in sight. Is not true, mr. Secretary . Mr. Chairman, i came prepared to discuss a wide range of issues. I can speak generally about this issue. Id be happy to. Isn i can speak generally about this issue. Id be happy to. Isnt it true the administration has never submitted a budget that balances in five years, tenors 50 years or anytime . Mr. Chairman, the administration submitted budgets that was out of control about it under control. The cheaper progress reducing the deficit. Has the Administration Never submitted a budget that balances over anytime . I dont believe the measure have an effect right now i get to ask the questions. So if you dont know i do know. There was supported in the far distant future. Not according to the congressional