With us today, secretary of treasury mr. Ma mnuchin, thank you for joining us. Today we look forward discussing the departments budget request as well as some of the assumptions and policies included in the president s overall request for this upcoming here of 2018. The president s budget proposes cutting spending by 3. 6 trillion over the next ten years while making key investigatements to spur Economic Growth and job creation. And weve all heard what the critics have said and there might abe few critics in here today, but mr. Secretary i am not one of them. I believe the president s budget is honest and impressive. It includes major middle income and business tax cuts through tax reform allowing allowing individuals and constituents all across the country to keep more of their paycheck for themselves. It also has a patrol ondollars public and private plan for national infrastructure. It rescues families from a failing healthcare law. It builds upon our spending cuts and further reduces the size of many federal agencies, if not eliminating agencies altogether. The president rightly wants to have fewer bureaucrats around to regulate our lives and in doing that, it will free up funding for Border Security and for strengthening our military. So i look forward to continuing the discussion on the president s vision for balancing the budget here today. The department of treasurys mission is vast and it plays a vital role in helping to shape and implement the president s economic policies. This includes working to reform the tax code, monitoring risk and fostering growth in the Financial System, increasing access to credit for Small Businesses, and promoting Economic Prosperity for all americans. For this upcoming year, the department is requesting to spend 11. 2 billion which is nearly 400 million less than last year. Thats a cut over last year. Treasurys Largest Bureau is the Internal Revenue service ait accounting for nearly 94 of all of treasurys budget. And while the budget proposes cutting irss top line by 2 , it is also prioritized by requesting to support infrastructure and its i. T. Department and modernization and improving cybersecurity overall. Im interested in hearing from you today, mr. Secretary, on how funding for these priorities will improve the taxpayer experience. The request before us also includes 117 million for the office ever terrorism and Financial Intelligence. This is a 5 million reduction from last year as well. But this office does a lot and its not just oversees policy, but it also has a Critical Role of enforcing sanctions against rogue nations and nuclear prolive fer ratetors. Freezing accounts of terrorists, money launderers and drug lords and producing intelligence for treasury leadership and National Security officials. This office also has the dual purpose of safeguarding our Financial System against elicit use and protecting our systems from National Security threats. Im also interested to know about the challenges facing the treasury and dealing with so many looming threats ensuring that the department has adequate resources to help keep our country safe. The secretarys budget also includes 27 million for a newly created cybersecurity enhancement account. Now this account was established in our most recent government funding bill to strengthen the treasury cybersecurity posture and mitigate threats to the u. S. Financial infrastructure. Cybersecurity is one of the most urgent challenges fatsing tcing country. I hope to hear from you mr. Secretary honor how were going to use these resources to protect against and respond quickly to the Cyber Threats that we see. Before closing, i want to say that im grateful for the swift action that the administration has taken to jump start our economy. Over the last few months, the administration has issued executive orders to right size and streamline the federal government, reduce waste, and duplication and cut red tape. The positive effects are already being felt. Since january 20th, less than five months ago, business enthusiasm has risen at extraordinary rates. Our Gross Domestic Product as increased 1. 2 . Nearly 600,000 new jobs have been created, and unemployment is down another half a percent to 4. 3 , the lowest in a decade. Now thats exciting. What does all this mean . This means that more people are experiencing the dig knittive work and the fulfillment of providing for their families. So mr. Secretary, i look forward to learning more today about the trush ooir yourerys continued role in spurring ore Economic Growth and job creation and mr. Mnuchin, thank you again for taking the time to meet with us and be with us here today and we look forward to hearing your testimony in a few minutes. Right now id like to recognize a Ranking Member, mr. Quigley, for me opening remarks he may have. Thank you, mr. Chairman. Thank you mr. Secretary for being here today. The role the trerk uberry department plays in both domestic and Global Economy cannot be overstated. Not only do you and your department oversee the federal governments ability to collect trillions in revenue and finance government operations, but you are also charged with investigating and protecting our Financial System from the illicit and criminal activities of both foreign and domestic adversaries. Thats why i was so disappointed with this years treasury budget request which slashes fund big 372 million. For the irs this means a cust 260 million after factor in builtin costs such as statutory pay raises, inflation, the cut is in real terms closing to 630 million, thats on top of the nearly 1 billion thats been cut from the agency since 2010. In order to meet this will new draconian funding level, the is would need to reduce staffing by 6,000 adding to the more than 17,000 that the agency had already lost or the last seven years. This is simple lay formula for expanding the tax gap empowering tax cheats and confusing honest taxpayers. Yourself, mr. Secretary, had previously said that the irs is, quote, under resourced to perform its duties and that further cuts will, quote where are hamper ow ability to collect revenue. I was also deeply troubled by the elimination of the Community DevelopmentFinancial Institutions fund which plays a vital role in spurring Economic Growth and revitalization in our most underserve and knee glektsed communities. In my hometown of chicago, cdfis are investing tens of million every year to provide lowincome families with affordable hows rg neighborhoods with Safe Community centers and Small Businesses with capital grow and high local workers. For the cost of less than 80 cents per american, this Program Helps cdfis across the country support the creation of tens of thousands of jobs financing for over 13,000 businesses, and more than 33,000 of Affordable Housing units. And thats just for last year. This is not only a hugely successful program, but its bipartisan. Which is evidence through the increased funding it received in this years omnibus. There are numerous other cuts to the department that are harmful as well, including questionable reductions to cybersecurity enhars meant at a time when hacking and Identity Theft are at an alltime high. Cuts to gro pro grams that safe grard our system from criminals and ebb force trade and economic sanctions and unwise reductions to various inspectors general offices. Particularly the premature 50 cut to the special Inspector General for tarp which is still charged with auditing the 38 billion in open tarp programs that will last until 2023. But i want to briefly touch been something that you bring up in your written testimony, and thats the issue of financial regulation. Last friday the president tweeted his support for the house passed bill to repeal dodd frank. It is surprising to see how easily some folks forget that less than a decade ago a financial crisis sparked the biggest global recession since the Great Depression and pushed our economy to the brink of collapse. Main street businesses families suffered even greater than loss greater losses than wall street as home values declined, Retirement Savings shrank and credit dried up. And how did we get there . A disastrous combination of irresponsible lend, over complex derivatives, highly leverage and under capitalized banks and inadequate oversight. No person wore argue that the status quo which all molt most crippled our economy was working before the crisis. We need to make our Financial Markets safer, more transparent and more accountable and thats exactly what dodd frank has done. We can all agree that rules need to be tweaked to make sure that small banks are not overly burdened with rules intended for those that pose a success Systemic Risk to our economy and dodd frank came up short orn reforming fannie mae and freddie mac. But gutting dodd frank and rolling back the clock isnt the answer. The answer lies in democrats and republicans working together in a bipartisan way toy continue to improve the sacht and soundness of our Financial System. I look forward to discussing these and other issues with you today. Thank you, mr. Chairman. Mr. Quigley. Id now like to remembering nieds chairman of the full committee. Thank you for the time. I also want to welcome secretary mnuchin to the committee and you fill some historic shoes. Good luck to you mr. Secretary. We look forward to your testimony and hearing your frank and candid views on many issues, some of which have already been brought up. Todays hearing spart of a process we follow to determine the best use of taxpayers dollars. After all the power of the purse lies in this build rg not elsewhere and its congresss obligation to make spending decisions on behalf of the American People. There is quite a lot of focus at home on the issue of the viability of the Internal Revenue service. I do share some of those concerns. We obviously want an agency thats responsible and helpful to our constituent and while im hopeful that congress will be able to reform our burdensome outdated tax towed doed make filing taxes a simpler process im still troubled by the problems that appear to playing that agency. Im eager to hear we are eager to hear how you plan to address some of these concerns. And like the chairman, i share concern about the treasurys office of terrorism and Financial Intelligence which plays such a Critical Role in keeping our nation safe by safeguarding our Financial System against illicit use and combating rogue nations, tourists, facilitators, as well as money launders, drug king pins and other National Security threats. These efforts include disrupting isis finances and enforcing sanctions against bad actors like iran and north korea and theyre constantly trying to penetrate our system and do it damage. Given the current National Security challenges we face, we must ensure that the department continues to invest in these critical programs. Again, i welcome you to the committee and i thank the chairman for his time. Id now like to recognize mrs. Lowey member of the full committee today. Thank you, mr. Chairman. Id like to thank chairman graves and Ranking Member quigley for fold holding this hearing and as a former new yorker im sorry you had to leave us secretary mnuchin, welcome and thank you for being here today. Mr. Secretary, your fiscal year 2018 budget request does not prioritize the taxpayers Economic Development or the ability of your department to sum combat terrorists financing and other National Security threats. Instead, your budget would decrease the irs funding by 260 million, eliminate all discretionary Grant Programs in the communitydevelopment Financial Institutions fund, and this is shocking to me as a former new yorker, i just dont get it, it would reduce the office of terrorism and Financial Intelligence by 6 million. According to the taxpayer advocate, during the 2017 tax season, americans who called the irs for assistance were on hold for an average of 47 minutes. And nechb even then, only 40 of the calls were even answered. With these cuts, Taxpayer Services will become even worse. The ability of the irs to identify wrongdoing is also in jeopardy. Without Adequate Funding levels for irs enforcement, we will simply not have enough manpower to catch bad actors, making it very clear, if you want to cheat on your taxes, this budget is for you. The fy 18 request falls far short in the fight against fiching scams and identity left schemes which appear to be never ending. In addition to depleting the irs of resources to being responsive to taxpayers seeking clarity on the tax code. Cdfi awardees originated 3. 6 billion in loans and investments, financed 13,000 businesses, and 33,500 Affordable Housing units. In our home state of new york, there are 79 certified cdfis that have financed 950 businesses for a total of 163 million in loans in fy 16 alone. Cdfis expand Economic Opportunity for underserved communities by supporting the growth and capacity of a National Network of Community Development lenders. This programs elimination is incomprehensible to me. Its cuts like this, mr. Secretary, that make it clear this budget request is merely an idaho i diddyio logical document fulfilling Campaign Promises and not an attempt to improve the lives of taxpayers. That being said, mr. Secretary, i do look forward to a productive discussion this afternoon and to working with you to achieve the Treasury Departments goals while serving the best interests of the american taxpayer. Thank you for appearing before us. Mr. Secretary, we welcome you today and certainly welcome fiveminute statement from you and if you have a statement thats longer than that i think we already have here wed be happy to indlud in as part of the record. But i appreciate you joining and feeding our questions kmaentsd today. Thank you its a pleasure to be here with you. Chairman graves, Ranking Member quickly and members of the subcommittee, thank you for inviting me to meet today. I look forward with working with this subcommittee working on benefits for the American People. One of the president s promises to the american taxpayer he would make sure their money is spent wisely. A budget should not be an end into itself but a means of improving the lives of americans. More money does not necessarily translate into better policy, and so the president has challenged every agency and department to identify greater efficiencies and savings that can be realized both immediately and in the years to come. The administration is froud submit a budget that achieves this goal. This budget makes some difficult choices because of necessary constraints. We carefully evaluated the ool low occasion of resources to eecht departments functions and made prudential reductions where needed. But these choices in no way diminish our ability to operate the government effectively. The president has made it clear, National Security is the top priority. And in accordance, treasurys request prioritizes National Security and cybersecurity programs. Another top goal of treasury is creating sustained Economic Growth. With all treasury does, we have this mission in mind. This muchneeded growth will be achieved through a combination tax reform, Regulatory Reform and trade. This means working with congress to pass legislation that allows taxpayers to keep more of their hardearned paychecks. If we develop the right policies today, we will secure a prosperous future for our children and grandchildren. The difference between recent sluggish growth and a return to a 3 or higher gdp is trillions of dollars in the economy making a meaningful difference in the lives of all americans. This budget prioritizes the funding for treasurys wide array of economy ig and financial tools including sanctions. And our enemies have changed, so too have our weapons to combat them. We are honing the economic and financial tools and our arsenal to dits disrupt the Financial Resources and procurement capability of those who wish to do us harm. Thin concludes actions against destabilizing regimes, terrorist networks rarnd drug traffickers. Stopping the flow of funding to dangerous, nonstate actors, working with foreign partners to keep their Financial Systems secure, protecting our own Financial System, these