Anticipated Nomination of Janet L. Yellen

Summary

Senate hearing document 117–165, Anticipated Nomination of Janet L. Yellen, a hearing before the Committee on Finance, United States Senate, on the anticipated nomination of Janet L. Yellen to be Secretary, Department of the Treasury, dated January 19, 2021. Opening statements come from Chairman Chuck Grassley and Senator Ron Wyden, and Senator Dianne Feinstein appears as a congressional witness. Hon. Janet L. Yellen, Ph.D., Secretary-Designate, is the administration nominee. Senator Wyden’s opening statement names, as a top economic priority, avoiding the mistake Congress made in the last recession, which was taking a foot off the gas pedal before recovery took hold.

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Issuer: Congressional materials
Document type: Congressional Hearing
Case: Chrg 117Shrg46951

Cite this document

“Anticipated Nomination of Janet L. Yellen.” Original at www.govinfo.gov. Archived at Pandemic Darlings, https://pandemicdarlings.com/source-documents/chrg-117shrg46951/, SHA-256 e35192ec80103319ec037146d9afddd5f6784535028a5d97c7a4db5d12469ba3.

Full text

S. HRG. 117–165

ANTICIPATED NOMINATION OF JANET L. YELLEN

HEARING
BEFORE THE

COMMITTEE ON FINANCE
UNITED STATES SENATE
ONE HUNDRED SEVENTEENTH CONGRESS
FIRST SESSION

ON THE

ANTICIPATED NOMINATION OF

JANET L. YELLEN, TO BE SECRETARY, DEPARTMENT OF THE TREASURY

JANUARY 19, 2021

(

Printed for the use of the Committee on Finance

U.S. GOVERNMENT PUBLISHING OFFICE
46–951—PDF WASHINGTON : 2022

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COMMITTEE ON FINANCE
CHUCK GRASSLEY, Iowa, Chairman
MIKE CRAPO, Idaho RON WYDEN, Oregon
PAT ROBERTS, Kansas DEBBIE STABENOW, Michigan
MICHAEL B. ENZI, Wyoming MARIA CANTWELL, Washington
JOHN CORNYN, Texas ROBERT MENENDEZ, New Jersey
JOHN THUNE, South Dakota THOMAS R. CARPER, Delaware
RICHARD BURR, North Carolina BENJAMIN L. CARDIN, Maryland
ROB PORTMAN, Ohio SHERROD BROWN, Ohio
PATRICK J. TOOMEY, Pennsylvania MICHAEL F. BENNET, Colorado
TIM SCOTT, South Carolina ROBERT P. CASEY, JR., Pennsylvania
BILL CASSIDY, Louisiana MARK R. WARNER, Virginia
JAMES LANKFORD, Oklahoma SHELDON WHITEHOUSE, Rhode Island
STEVE DAINES, Montana MAGGIE HASSAN, New Hampshire
TODD YOUNG, Indiana CATHERINE CORTEZ MASTO, Nevada
BEN SASSE, Nebraska

KOLAN DAVIS, Staff Director and Chief Counsel
JOSHUA SHEINKMAN, Democratic Staff Director

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CONTENTS

OPENING STATEMENTS
Page
Grassley, Hon. Chuck, a U.S. Senator from Iowa, chairman, Committee on
Finance .................................................................................................................. 1
Wyden, Hon. Ron, a U.S. Senator from Oregon .................................................... 3

CONGRESSIONAL WITNESS
Feinstein, Hon. Dianne, a U.S. Senator from California ...................................... 6

ADMINISTRATION NOMINEE
Yellen, Hon. Janet L., Ph.D., Secretary-Designate, Department of the Treas-
ury, Washington, DC ........................................................................................... 7

ALPHABETICAL LISTING AND APPENDIX MATERIAL
Feinstein, Hon. Dianne:
Testimony .......................................................................................................... 6
Grassley, Hon. Chuck:
Opening statement ........................................................................................... 1
Prepared statement .......................................................................................... 51
Wyden, Hon. Ron:
Opening statement ........................................................................................... 3
Prepared statement with attachment ............................................................. 52
Yellen, Hon. Janet L., Ph.D.:
Testimony .......................................................................................................... 7
Prepared statement .......................................................................................... 54
Biographical information ................................................................................. 55
Responses to questions from committee members ......................................... 73

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ANTICIPATED NOMINATION OF JANET L.
YELLEN, TO BE SECRETARY,
DEPARTMENT OF THE TREASURY

TUESDAY, JANUARY 19, 2021

U.S. SENATE,
COMMITTEE ON FINANCE,
Washington, DC.
The hearing was convened, pursuant to notice, at 10:16 a.m., in
Room SD–106, Dirksen Senate Office Building, Hon. Chuck Grass-
ley (chairman of the committee) presiding.
Present: Senators Crapo, Cornyn, Thune, Portman, Toomey,
Scott, Cassidy, Lankford, Daines, Young, Sasse, Wyden, Stabenow,
Cantwell, Menendez, Carper, Cardin, Brown, Bennet, Casey, War-
ner, Whitehouse, Hassan, and Cortez Masto.
Also present: Republican staff: Nicholas Wyatt, Tax, Infrastruc-
ture, and Nominations Policy Advisor. Democratic Staff: Michael
Evans, Deputy Staff Director and Chief Counsel; Ian Nicholson, In-
vestigator; Joshua Sheinkman, Staff Director; David Berick, Chief
Investigator; and Peter Gartrell, Investigator.
OPENING STATEMENT OF HON. CHUCK GRASSLEY, A U.S.
SENATOR FROM IOWA, CHAIRMAN, COMMITTEE ON FINANCE
The CHAIRMAN. Today, we welcome the Honorable Janet Yellen
to consider an anticipated nomination for her to become Secretary
of the Treasury.
The role of Treasury Secretary covers responsibilities over a
large number of issues, including taxes; fiscal management, includ-
ing the debt; financial sanctions; and economic policies. The Treas-
ury Secretary also serves as Chair of the Financial Stability Over-
sight Council, which has wide-ranging financial oversight and regu-
latory authorities. Dr. Yellen has a history in academics, think
tanks, the Federal Government, and at the Federal Reserve.
This hearing takes place in the midst of an ongoing pandemic,
along with significant divisions in Congress and in the Nation. I
hope we can move away from partisan divisiveness and personal-
ized attacks against each other. Dr. Yellen, if confirmed, you can
be instrumental in helping generate an environment for bipartisan
efforts and reasoned debate.
You have expressed that you have interest in aggressively pur-
suing mitigation efforts toward climate change, which you see as
a global existential threat. The incoming administration has also
identified interest in raising taxes, coupled with massive spending
programs, and working to reduce income inequality. And Senator
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Schumer has said that he’d like to change America. I’ll be inter-
ested in hearing more about those and other things as we continue
to consider your nomination.
As I’ve already indicated to you, I think it would be a big mis-
take to raise taxes on individuals and businesses as they struggle
through an economic recovery and a pandemic. I know that the in-
coming administration has said they’d like to pursue a two-pronged
strategy, with a massive stimulus followed by tax hikes, coupled
with even more spending, maybe on infrastructure. We are already
closely examining President-elect Biden’s proposal for around $1.9
trillion of stimulus, which even some prominent Democrat econo-
mists have said does not seem to be well-targeted. With the tril-
lions already in the pipeline, and close to $1 trillion of relief en-
acted just a few short weeks ago, it is important to focus efforts on
pandemic relief. Now is not the time to enact a laundry list of lib-
eral structural economic reforms. Dr. Yellen, if you are confirmed,
I hope that you will work with us on the proposal.
Moving forward, President-elect Biden has stated numerous
times that no one making under $400,000 would see their taxes
raised. For example, last year on CNBC President-elect Biden stat-
ed what we can think of as the new Biden Rule that, quote, ‘‘no-
body making under 400,000,’’ and he said ‘‘bucks, would have their
taxes raised, period,’’ end of quote.
While I do not think we need to be raising taxes, I will pay close
attention to see that the incoming administration abides by that
new Biden Rule and does not go after taxing small businesses and
the middle class.
On my part, let me tell you that I believe in free and fair trade,
both internationally and domestically. International trade is impor-
tant to American businesses, and especially important to the agri-
cultural sector and the farmers across America. I will make sure
that the incoming administration does not overlook the importance
of agriculture or the interests of rural America.
I am against foreign countries trying to tap into the U.S. tax
base with unilateral digital services taxes under their self-
proclaimed ‘‘rights’’ to invade our tax base. They do not have that
right.
I do not support socialism, or Marxism, or so-called democratic
socialism that would end with command-and-control policies. I also
do not support any rapid or drastic wiping out of industries and
their workers based mostly on ideology and often on misleading
analyses, with some notion of taking care of the carnage through
massive government income and wealth redistribution.
Prior to the pandemic, although there were economic and struc-
tural challenges to the economy, we saw a very historic 50-year low
in unemployment rates, record lows in gaps between minority un-
employment and the overall unemployment rate, inclusive growth
with real wages growing faster for lower earners, record highs in
real median household income, stronger median income growth for
minorities than others, and reductions in income inequality and
poverty.
Although those were goals of Democrats, we did not hear much
about the accomplishments from members of the other party. Those
accomplishments came about in an environment in which tax bur-

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dens were lowered and made more progressive, and regulation was
made more efficient.
Instead of welcoming the accomplishments, we have heard from
the other side that we need to change America. I would like to see
us continue with the accomplishments we saw prior to the pan-
demic.
Now let me close with a comment on transparency. This com-
mittee has traditionally expressed bipartisan interest in reminding
all nominees who come before this committee that transparency is
important for our members. That means that I expect that you will
respond to inquiries from any Senator on this committee no matter
on which side of the aisle they sit. Prompt and thorough responses
to our inquiries and investigations are what we expect.
With that now, Senator Wyden?
[The prepared statement of Chairman Grassley appears in the
appendix.]
OPENING STATEMENT OF HON. RON WYDEN,
A U.S. SENATOR FROM OREGON
Senator WYDEN. Thank you very much, Mr. Chairman.
I want to begin, Chairman Grassley, by thanking you and Sen-
ator Crapo for the help in scheduling Chair Yellen’s hearing this
morning. And, Senator Grassley, I also want to thank you for join-
ing me last week in exposing the pharmaceutical companies’ insu-
lin price-gouging scheme. America knows that they are getting
mugged at the pharmacy counter. Now this committee can use a
fresh investigation that helps lay out a plan to finally end one of
the all-time big anti-consumer rip-offs, which is what is going on
with insulin.
Mr. Chairman, I thank you for that. Now to turn to Chair Yellen.
This is the second time in 12 years that a Republican President
leaves the office with the economy in ruin. Today, there is also a
surging pandemic and armed troops guarding our Capitol from far-
right insurrectionist attack.
The Biden administration is not going to begin with inaugural
balls. It is going to begin with all-out triage. My top economic pri-
ority is avoiding the mistake Congress made in the last recession,
which was taking a foot off the gas pedal before recovery took hold.
Congress did not do enough in 2009 to help the unemployed and
struggling homeowners. And if stepping off the gas was not bad
enough, 2 years later House Republicans passed policies that
yanked out the spark plugs and let the air out of the tires as well.
In Oregon, it took 71⁄2 years for unemployment to return to its
pre-recession level. That cannot happen again, or else millions and
millions of people will go through years of needless hardship. Some
will never recover the lives that they had prior to the pandemic.
Unemployment is again rising. Federal Reserve data shows that
workers of modest income are facing Great Depression-level jobless-
ness. One out of five are out of work. And Donald Trump repeat-
edly pressed a false and manipulative choice between public health
and economic recovery, and now America has neither.
The good news is Chair Yellen knows that going small on eco-
nomic relief would be a big mistake. Chair Yellen is exactly the
right person to lead the Treasury Department. Nobody could be

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better qualified for this job. And, Mr. Chairman, I would ask unan-
imous consent at this point to put into the record a letter signed
by eight former living Treasury Secretaries urging swift confirma-
tion of Janet Yellen.
The CHAIRMAN. Without objection, so ordered.
[The letter appears in the appendix on p. 54.]
Senator WYDEN. Thank you, Mr. Chairman.
And I just say to my colleagues, all of those Treasury Secretaries
do not just come together by osmosis. They believe deeply in the
challenge ahead of us in this country, and they all think Janet
Yellen is up to the job. And nobody deserves more credit than
Chair Yellen for the longest economic expansion that we have seen
in our history, which lasted until the pandemic hit.
Federal Reserve Chair Yellen changed decades of conventional
economic wisdom that put too much focus on inflation and deficits.
She was correct that policymakers should focus more on wages, em-
ployment, and inequality, and that the economy safely could run a
little hotter.
Now, she took some heat at the time from Republicans, but later
they tried to attribute Janet Yellen’s success to the outgoing ad-
ministration. But the numbers show the successes of Chair Yellen’s
approach. Unemployment went down. Wages went up. And a lot of
working Americans were better off than they were before.
Who better to lead the Treasury Department and help kick off
the next economic expansion than the person who did so much to
bring about the last one? Right out of the gate, the Biden adminis-
tration and Congress need to send major relief to America’s work-
ing families. That means increasing relief checks to $2,000. And it
means extending enhanced unemployment benefits to all of those
who have lost their jobs through no fault of their own.
At Mitch McConnell’s insistence, the December economic package
reduced unemployment benefits from the CARES Act and extended
them only until the middle of March. There are groceries in my re-
frigerator that are going to last longer than Mitch McConnell’s un-
employment agenda.
Now this has been a common story, a common story of Wash-
ington letting key economic lifelines expire. They get extended.
They expire. They get extended. Congress cannot go on with this
snooze-button legislating. Our workers and our economy need a
government that is predictable and reliable. That means the Con-
gress needs to tether the extension of unemployment benefits to
economic conditions on the ground, with automatic triggers. Those
benefits should not be subject to the whim of one elected official.
The tattered patchwork of State unemployment insurance sys-
tems also needs fixing. My home State of Oregon saw this when
the COVID crash hit. In other cases, it was because of Republican
lawmakers having intentionally hobbled unemployment insurance
programs. Workers suffer because of it, particularly black and His-
panic workers. Congress needs to reform the program, which I
think should include bringing all workers into the system, increas-
ing base benefits, and ensuring that it can hold up in a crisis.
Also, part of our work has to involve fixing America’s broken-
down, dysfunctional tax code. And to me, it has to start with the
proposition that corporations, millionaires, and billionaires all have

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to pay their fair share. I am developing a proposal to reform the
taxation of capital gains for the top three-tenths of 1 percent of tax-
payers. My plan would tax wealth like work, and it would minimize
the ability of those who are particularly well-off and have all the
accountants and all the lawyers to just defer, and defer, and defer
paying their taxes.
If you are a nurse—and I was just home for the last close to 10
days with virtual town halls, and talking to folks in a socially
distanced way, and one of the things I discussed is, if you are a
nurse in Oregon taking care of COVID patients, you have to pay
taxes with every paycheck. You do not get to defer your taxes if you
are a nurse treating COVID patients. But if you are a billionaire,
you can defer, and defer, and defer paying taxes and, in many in-
stances, figure out a way to pay nothing at all.
My plan would put a stop to that unfairness, and the revenue
would help preserve the Social Security guarantee for decades to
come with additional funds for other priorities.
Now, the outgoing administration had a different approach. They
were big on corporate tax giveaways, and they actually increased
incentives to ship jobs overseas instead of eliminating them. I want
those mistakes fixed.
Before I wrap up, I want to turn to an existential threat for, par-
ticularly our kids and our grandkids, and that is climate change.
The Treasury Department is going to have a key role to play on
these climate issues.
Much of America’s energy policy is tax policy. Having worked
with my friend from Washington State, Senator Cantwell, we know
there are now 44 energy tax breaks on the books. And some of
them look like they just came from yesteryear.
I have a bill to replace these 44 breaks with 3 that go right to
the heart of a new set of priorities: reducing carbon emissions and
promoting innovation. The three are for clean electricity, clean
transportation, and energy conservation. I am also developing a
proposal that would make polluters pay for the cost of climate
change, with much of the revenue returned directly to the Amer-
ican people through annual cash payments.
The Treasury Department plays a big role—as Chairman Grass-
ley noted—in trade. Over the last 4 years the American people got
a lot of tough talk about trade, but there was a big gap between
the tough talk and delivering on the big promises.
This administration drove away our economic allies. It actually
isolated us in the crucial fight against trade cheats in China and
elsewhere. Members of this committee are also concerned about
currency manipulation and other tactics that rip off high-skill,
high-wage jobs at a time when wage growth has got to be right at
the top of our economic agenda.
I am looking forward to working with Secretary Yellen on all
these issues, and more. And I certainly hope—and Chairman
Grassley and I have been talking about it—that with her stellar,
extraordinary qualifications, we can get her nomination approved
as quickly as possible. And it seems to me, with the economic
crunch we are facing, it ought to be approved on Day One.
Now I will close by saying everybody has a constitutional right
to be foolish, but nobody can question Chair Yellen’s qualifications.

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This country has never had a woman as Treasury Secretary. What
a shame. Anybody who doubts Chair Yellen’s commitment to poli-
cies that give everybody a chance to get ahead, just has not been
paying attention.
So, colleagues, I look forward to working with all the members,
Democrats and Republicans, throughout this session. And I think
it is very appropriate that we begin with the consideration of a per-
son who is so extraordinarily qualified, and who I very much ap-
preciate being willing to return to public service. President-elect
Biden could not have made a better choice, colleagues, than Janet
Yellen.
Thank you, Mr. Chairman.
The CHAIRMAN. Thank you.
[The prepared statement of Senator Wyden appears in the ap-
pendix.]
The CHAIRMAN. The chair now recognizes and welcomes Senator
Feinstein from California, for the purposes of introduction.

STATEMENT OF HON. DIANNE FEINSTEIN,
A U.S. SENATOR FROM CALIFORNIA
Senator FEINSTEIN. And I thank the chair. Thank you very much,
Senator, and other Senators. It is just fine to be here this morning.
I have known Janet since she became President of the Federal
Reserve Bank of San Francisco in 2004. She has been professor,
and now emeritus at the University of California, Berkeley since
1980—that is 40 years.
Janet has an impressive record. She served twice on the Federal
Reserve Board of Governors and was the first woman to chair the
Fed from 2014 to 2018. She also served as Chair of the Council of
Economic Advisors under President Clinton, and she is currently
professor emeritus at the University of California, Berkeley, as well
as a distinguished fellow at the Brookings Institution.
Some have joked that Janet’s husband of 42 years, George, won
the Nobel Prize in Economic Sciences, yet he is regarded by many
as the second most accomplished economist in his own home. But
it can be said that all of these accomplishments did not come easily
for a women in the male-dominated field of economics.
Out of 24 students who received doctorates in economics at Yale
in 1971, Janet was the only woman. And she has been a trailblazer
her entire career. Now she brings to us the experience and leader-
ship needed at Treasury at this critical juncture.
I believe that Janet Yellen really understands that the economy
is not an abstract series of charts and figures, but a collection of
real individuals, families, communities, problems, and businesses
that need help. And these are the many reasons that Janet re-
ceived bipartisan praise when President-elect Biden announced her
nomination in December.
For one, her deep policy expertise matches her understanding of
the impact of economic policy on people. She is also a pragmatic
and steady hand who recognizes the need for fiscal discipline. In
short, she is the ideal candidate to head Treasury at a time when
we can afford nothing less.

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So I urge and hope that this committee will rapidly approve her
nomination, and I thank you for the privilege, Mr. Chairman.
Thank you.
The CHAIRMAN. Thank you, Senator Feinstein.
I want to go back to Senator Wyden, because he asked to speak
on another point, before I got to Dr. Yellen.
Senator WYDEN. Mr. Chairman, just on your point earlier, be-
cause we need to get to Chair Yellen, I very much share your view
with respect to transparency. You and I have worked on those
issues.
I also want to put on the record that the Treasury’s record over
the past 4 years on this was dismal, on things like FinCEN. It has
got to do better, but do it in a bipartisan way. Thank you.
The CHAIRMAN. Thank you very much.
Now, I did not congratulate Dr. Yellen on her appointment. I do
that now, and ask her to make her opening statement.
STATEMENT OF HON. JANET L. YELLEN, Ph.D., SECRETARY-
DESIGNATE, DEPARTMENT OF THE TREASURY, WASHING-
TON, DC
Dr. YELLEN. Chairman Grassley, Ranking Member Wyden, mem-
bers of the committee, it is an honor to appear before you. And,
Senator Feinstein, thank you for that very kind introduction.
Senator FEINSTEIN. You are welcome.
Dr. YELLEN. I have immense respect for the task before this com-
mittee: rebuilding the American economy from the sharpest down-
turn in history. If I am fortunate enough to be confirmed, I would
strive to be a good partner in that work. I have spent almost my
entire life thinking about economics and how it can help people
during hard times.
My father was a doctor in Bay Ridge, Brooklyn. It was more of
a working-class neighborhood back then. His patients would take
the bus from their jobs at factories or docks, and they would come
to our stoop, because that is where my dad’s office was, in our
basement.
He was the kind of doctor who treated the whole patient. He
knew about their lives, about when they had been fired or could
not pay. Those remain some of the clearest moments in my child-
hood.
My parents had been children of the Depression, and they had
a visceral reaction to economic hardship. Economics is sometimes
considered a dry subject, but I have always tried to approach my
science the same way my father approached his: as a means to help
people.
And this committee, I believe, has viewed it the same way, espe-
cially during these last few months. When economists look back on
the pandemic, I expect they will conclude that Congress’s actions
averted a lot of suffering. But more must be done. Economists do
not always agree, but I think there is a consensus now that with-
out further action, we risk a longer and more painful recession
now, and longer-term scarring of the economy later.
The pandemic has caused widespread devastation. Whole indus-
tries have paused their work. Eighteen million unemployment in-
surance claims are being paid every week. Food bank shelves are

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going empty. The damage has been sweeping. And as the Presi-
dent-elect said last Thursday, our response must be too.
Over the next few months, we are going to need more aid to dis-
tribute the vaccine, to reopen schools, to help States keep fire-
fighters and teachers on the job. We will need more funding to
make sure unemployment insurance checks still go out, and to help
families who are at risk of going hungry or losing the roof over
their heads.
Neither the President-elect nor I propose this relief package
without an appreciation for the country’s debt burden. But right
now, with interest rates at historic lows, the smartest thing we can
do is act big. In the long run, I believe the benefits will far out-
weigh the costs, especially if we care about helping people who
have been struggling for a very long time.
People worry about a K-shaped recovery, but well before COVID–
19 infected a single American, we were living in a K-shaped econ-
omy, one where wealth built upon wealth, while working families
fell farther and farther behind. This is especially true for people of
color.
At the Fed, I became accustomed to the institution’s dual man-
date: to promote stable prices and maximum employment. As
Treasury Secretary, I think there will be a dual mission too: help-
ing Americans endure the final months of this pandemic and keep-
ing people safe while getting them back to work. That is our first
task. But then there is the longer-term project. We have to rebuild
our economy so that it creates more prosperity for more people and
ensures that American workers can compete in an increasingly
competitive global economy.
Members of the committee, these are very ambitious goals, and
I know we will need to work together. You can count on me to do
that in a bipartisan way.
My husband and son are watching us on C–SPAN from the other
room. They are not only wonderful people, they are also wonderful
and opinionated economists themselves. So I am used to debate
about these issues in the house, and I would welcome it in the Sen-
ate.
Thank you. I look forward to your questions.
[The prepared statement of Dr. Yellen appears in the appendix.]
The CHAIRMAN. Thank you, Dr. Yellen. Before I go to ques-
tioning, I have four obligatory questions that we ask all nominees
before this committee. And they are usually stated in exactly the
same way.
First, is there anything that you are aware of in your background
that might present a conflict of interest with the duties of the office
to which you have been nominated?
Dr. YELLEN. No, Senator Grassley, I do not believe I have any
conflict of interest.
The CHAIRMAN. Okay. Do you know of any reason, personal or
otherwise, that would in any way prevent you from fully and hon-
orably discharging the responsibilities of the office to which you
have been nominated?
Dr. YELLEN. No, I do not.

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The CHAIRMAN. Do you agree, without reservation, to respond to
any reasonable summons to appear and testify before any duly con-
stituted committee of the Congress, if you are confirmed?
Dr. YELLEN. I will testify, if they ask, before any committee of
Congress.
The CHAIRMAN. And finally, do you commit to providing a prompt
response in writing to any questions addressed to you by any Sen-
ator of this committee?
Dr. YELLEN. Yes, I commit to that.
The CHAIRMAN. In regard to that last one, I hope—I think Sen-
ator Biden, as Senator, would agree with me that when the Trump
administration first came in, they issued some sort of a regulation
that they were going to only answer questions for committee chair-
men. We finally got them off of it. I do not know whether they an-
swered every question of every Senator or not—they probably did
not—but I hope that we do not hear that from this administration,
that you have to be chairman of a committee to get an answer to
your question.
Before I ask the first question—but it is kind of along the lines
of the question I was going to ask you—I just heard your opening
comment about learning so much from your father about the work-
ers of America and about the business of America. I hope you will
continually remind people that you have that background, and that
you take it into consideration every opportunity you can. Because
I think people think you, being in public service for such a long
time, may have forgotten that, just like I think a lot of people think
that, after Chuck Grassley has been in the United States Senate
for 40 years, he has forgotten the 10 years he spent on the assem-
bly line with the workers of Iowa. And it is important that they be
reminded of these backgrounds.
Dr. Yellen, how will you work at Treasury to ensure that the in-
terests of American workers and businesses in rural America are
not ignored?
Dr. YELLEN. Senator Grassley, thank you for that question. It
will be my core focus, if I am confirmed as Treasury Secretary, to
focus on the needs of America’s workers, those living in cities and
in rural areas, and to make sure that we have a competitive econ-
omy that offers good jobs and good wages. And I really look for-
ward to working with President-elect Biden and his team, first to
address the critical issues we face as a country now with the pan-
demic causing such misery for so many small businesses that have
failed or are at risk of failing and need our help, and the unem-
ployed workers who have been so badly affected by the impact of
the pandemic, especially in the service sector.
It has disproportionately hit the service sector and the workers
who are employed in that sector, and it has been particularly bru-
tal in its impacts on minorities and on women. And I will be fo-
cused from Day One on providing support to America’s workers and
to small businesses, putting into effect as quickly and efficiently as
I can the relief in the bill that was recently passed and then, over
time, working for a second package that I think we need to get
through these dark times before the vaccination program enables
us to go back to life as we knew it. But over time, I look forward
to working with President-elect Biden and his team to build back

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better, and to address many of the challenges that have faced
America and that have had such an adverse impact on America’s
workers and small businesses.
We need to invest in our infrastructure. We need to invest in
R&D. We need to invest in training and workforce development, so
that we have an economy that is productive and competitive, and
workers and families can thrive.
The CHAIRMAN. Thank you very much for that answer. That was
kind of a shotgun approach to questioning. I now have a rifle ap-
proach.
Democrats have been arguing for repeal of the $10,000 cap on
State and local tax deductions, often referred to as SALT, even as
part of a pandemic relief effort. Yet, even left-leaning commenta-
tors such as the Tax Policy Center point out that a SALT repeal
would provide the top one-tenth of 1 percent of households with an
average tax cut of about $144,000, with essentially no benefit going
to the bottom half of the household earners.
Do you think it makes sense for the pandemic relief efforts to
prioritize six-figure tax cuts for the wealthiest few, when millions
of middle-class American families are struggling to make ends
meet? And would you oppose including a repeal of the SALT cap
in any further relief or stimulus measure?
Dr. YELLEN. Senator Grassley, thank you for that question. I cer-
tainly believe in a fair and progressive tax code where wealthy in-
dividuals and corporations pay their fair share. This deduction—
the SALT deduction—was eliminated only a few years ago. And be-
fore making a decision about what should be done going forward,
I think it is critical to study and evaluate what the impact has
been on State and local governments and their ability to provide
critical services. And I promise to work with those at Treasury and
throughout the administration in evaluating what impact that has
had on States and local governments, on households, on small busi-
nesses, and study this issue further.
The CHAIRMAN. I have to go to Senator Wyden now. My next
question would have dealt with an issue that he and I have worked
very closely on in regard to the unfair digital services tax that we
see other companies putting on our country, and I will submit
questions like that for answer in writing.
Go head, Senator Wyden.
Senator WYDEN. Thank you, Mr. Chairman. And, Chair Yellen,
great to have you in the virtual house. I am going to see if I can
cover a fair amount of ground quickly.
I think we all understand that the country has been hit by an
economic wrecking ball. And so my first question to you would be,
what economic policies will give Americans the biggest bang for the
buck in the immediate term?
Dr. YELLEN. Well, I think relief that we provide to those who are
in the greatest need, and to small businesses, has the best chance
of providing both relief to those who have been so badly affected
by the pandemic and creating a great deal of spending per dollar
spent, which will create jobs throughout the economy, having the
biggest bang for the buck.
So I see, for example, extended unemployment insurance, SNAP
benefits, and so forth, as having a very large bang for the buck. Of

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course, in a way, the biggest bang for the buck comes from the
money we spend on public health to make sure that we have wide-
spread vaccinations quickly, so schools can reopen, and so we can
get past the pandemic and reopen businesses and the economy
safely and avoid scarring that will occur if there is permanent job
loss.
Senator WYDEN. Good. I also appreciate your comment with re-
spect to extended unemployment, because that is one of the policies
that allows us in the future, in terms of reforms, to tie benefits to
economic conditions on the ground so it gives you time to fully get
us to that longer-term economic recovery. So that is very helpful.
The second question I want to talk to you about is China, be-
cause we all understand that China’s cheating has taken a huge
toll on our workers, and particularly on creating more high-paying
jobs.
Now I think that the President-elect is absolutely on the right
course, saying he is going to mobilize the allies to work with us in
terms of dealing with China. That is going to take a little bit of
time. So what I would like to hear from you again is, in the near
term, what do you believe you can do, perhaps your first couple of
steps, to start to mobilize our country to make sure that workers
get a fair shake in view of all this China economic cheating?
Dr. YELLEN. Well, China is clearly our most important strategic
competitor. As you said, we need to work with allies. We also need
to strengthen our own economy so that we can compete. And
President-elect Biden will soon come forward with a package to ac-
complish that by investing in our infrastructure, investing in our
people, and creating a more competitive economy in research and
development.
We need to take on China’s abusive, unfair, and illegal practices.
China is undercutting American companies by dumping products,
erecting trade barriers, and giving illegal subsidies to corporations.
It has been stealing intellectual property and engaging in practices
that give it an unfair technological advantage, including forced
technology transfers. And these practices, including China’s low
labor and environmental standards, are practices that we are pre-
pared to use the full array of tools to address. Of course it is impor-
tant over time to work with our allies.
Senator WYDEN. Very good. I am going to see if I can get two
other questions in and go maybe 30 seconds over, like the chair-
man. You heard me talk with respect to climate change, about re-
focusing our tax code so we can really zero in on eliminating carbon
emissions.
Can you give us one step that you think you could begin with to
tackle this climate question?
Dr. YELLEN. Well, this is one of the most critical issues facing
our country and the world. And it poses an existential threat. It
will be a focus of President-elect Biden and his entire administra-
tion.
The infrastructure plan that President-elect Biden will come for-
ward with will involve investing in clean technology, renewable en-
ergy, and promoting the use of electric vehicles. And in the process
of addressing this very significant challenge, there is also the op-

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portunity of creating good jobs in the process. And that will be a
benefit.
Treasury will cooperate by looking at ways that we can direct in-
vestment, enabling private firms to have the information they need
to support sustainable investing.
Senator WYDEN. One last question, very quickly. The Wall Street
Journal is reporting on your comments to affirm the United
States’s commitment to a market-determined exchange rate, if you
are confirmed.
Well, obviously Americans are interested in your thoughts on the
dollar. Could you briefly outline for the committee your thoughts
on the dollar?
Dr. YELLEN. Thank you, Senator Wyden. I believe in a strong
and equitable U.S. economy that delivers good jobs with rising
wages for all Americans. Maintaining confidence in the long-term
strength of the U.S. economy, and the stability of the U.S. financial
system, is good for America, as well as our trading and investing
partners.
I look forward to working with Congress to make the U.S. eco-
nomic recovery as strong as possible. I believe in market-
determined exchange rates. The value of the U.S. dollar and other
currencies should be determined by markets. Markets adjust to re-
flect variations in economic performance and generally facilitate
adjustments in the global economy.
The United States does not seek a weaker currency to gain com-
petitive advantage. And we should oppose attempts by other coun-
tries to do so. The intentional targeting of exchange rates to gain
commercial advantage is unacceptable.
If confirmed, I will work to implement the President-elect’s prom-
ise to oppose any and all attempts by foreign countries to artifi-
cially manipulate currency values to gain an unfair advantage in
trade.
Senator WYDEN. Thank you, Mr. Chairman.
The CHAIRMAN. I am going to turn the gavel over to Senator
Crapo. He will be the next person to ask questions. The Repub-
licans have a rule that you can only be chairman of the committee
for 6 years, and so this could be my last hearing as chairman of
the committee. And it has been a great privilege to chair one of the
most important committees in Congress.
I first joined this committee in 1981 during the 102nd Congress
and became chairman briefly in 2001, before the switch in party
membership changed the balance. And then I chaired it two times
since. I will continue to serve on this committee of course, but lead-
ing this committee has been one of the highlights of my years in
the Senate.
Once the Senate organizes, Ranking Member Wyden will become
chairman. But as I turn the gavel over to Senator Crapo, I know
this committee will be in the good hands of Senator Wyden and
Senator Crapo over the next 2 years.
Thank you very much. Senator Crapo?
Senator CRAPO. Well, thank you very much, Senator Grassley.
I want to commend him, even though he just stepped out of the
room, for his great service, and for the opportunity to serve under
his leadership as the chairman.

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I will just take a brief moment here to say Senator Wyden and
I have worked together for years on a bipartisan basis and have
built a lot of really big successes. I look forward to working with
you, Senator Wyden, as we move forward.
And, Dr. Yellen, I appreciate your service. I have worked with
you as well. As you know, when we discussed this a little while
back, we had a good working relationship while you were at the
Fed, and I look forward to developing and continuing that good
working relationship as we move forward.
My first question is going to be on tax policy. Prior to the Tax
Cuts and Jobs Act, the TCJA, the United States had one of the
highest corporate tax rates among developed countries. As a part
of the TCJA, Congress lowered the corporate tax rate to ensure
that our domestic businesses could remain globally competitive.
But even now, the corporate tax rate in America is still the 11th
highest among developed countries, according to the Tax Policy
Center.
As a result of the COVID–19 pandemic, U.S. companies are
struggling to stay in business and to keep employees on payroll.
President-elect Biden’s proposals include a significant increase in
the corporate tax rate that would hit already vulnerable businesses
and put U.S. companies once again at a strong competitive dis-
advantage with the rest of the world.
What is your view of raising taxes on struggling businesses dur-
ing the COVID–19 pandemic?
Dr. YELLEN. Well, thank you for that question, Senator Crapo. I
too want to say that I both enjoyed my working relationship with
you during my years at the Fed and look forward to a very produc-
tive working relationship going forward.
On the 2017 tax cuts, the President-elect has said that eventu-
ally, as part of a larger package that would include significant
spending and investment proposals—but not now while the pan-
demic is really depressing the economy—he would want to repeal
parts of the 2017 tax cuts that benefited the highest-income Ameri-
cans and large companies. And he wants to reverse the law’s incen-
tives to offshore operations and profits.
But he has been very clear that he does not support a complete
repeal of the 2017 tax law. There are some areas, though, that he
would amend. For example, a provision in that law had the unfor-
tunate byproduct of rewarding companies for moving their oper-
ations offshore. And the President-elect would reverse that.
We look forward to actively working with other countries,
through the OECD negotiations on taxes on multinational corpora-
tions, to try to stop what has been a destructive global race to the
bottom on corporate taxation. And in that context, we would assure
the competitiveness of American corporations, even with a some-
what higher corporate tax.
Senator CRAPO. Well, I appreciate that last observation. As we
discussed on the phone last week, I encouraged you to make, as
one of your top considerations for any changes to our business tax
policies, the competitiveness of the U.S. businesses and the need to
make sure that the United States remains an attractive place for
investment and capital formation and job creation. So I look for-
ward to working with you on that.

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Can you explain again your views on the importance of these
kinds of considerations when assessing potential changes to tax
policy?
Dr. YELLEN. Well, Senator Crapo, I strongly agree with your
view that it is necessary for U.S. companies to be globally competi-
tive. And that is why these OECD negotiations are so important.
It would enable us to collect a fair share from corporations, while
maintaining the competitiveness of our businesses, and diminish
the incentives that American companies now have to offshore ac-
tivities. That is certainly something we do not want to reward.
Senator CRAPO. Well, I look forward to working with you on
those OECD negotiations and the other aspects of tax policy that
we just discussed.
One last quick question. As chairman of the Banking Committee,
I worked in a bipartisan manner to pass the Foreign Investment
Risk Review Modernization Act; the Export Control Reform Act;
and, as part of the NDAA, the Anti-Money Laundering Act of 2021.
The Treasury Department plays a major role in implementing
these statutes and managing our relationship with China through
the Office of Terrorism Financing and the interagency process for
CFIUS and other export control decisions.
Do you agree to commit to work with me as the Treasury Depart-
ment moves forward on the export control decisions for foreign in-
vestment and modernizing our anti-money-laundering bank secrecy
provisions, as well as beneficial ownership rules?
Dr. YELLEN. Senator, you have my pledge that I will work closely
with you on these very important matters. And I want to thank
you and Congress for passing a law that will enable us to identify
an official ownership of shell corporations and really make a big
difference in our ability to address terrorist financing and improve
the effectiveness of sanctions.
Senator CRAPO. Thank you. I appreciate your attention to this.
Senator Stabenow is next. I believe she is remote.
Senator STABENOW. Well, good morning. First I want to say
‘‘thank you,’’ Senator Crapo, to you. Congratulations on your in-
coming position, and also to Senator Wyden, Senator Grassley, who
I think are off to a great start in the committee, doing this in a
bipartisan way, and I look forward to a lot more opportunities.
Also, Madam Chair, I have to tell you, as I have indicated to you
before, I was extremely excited to hear of your nomination. I can-
not think of anyone with more competence, more experience, more
integrity, to serve as Secretary of the Treasury. And it is just extra
special that you come in as the first woman to do so. So, congratu-
lations.
Dr. YELLEN. Thank you so much, Senator Stabenow.
Senator STABENOW. You are welcome.
Let me first say that I do not believe we have an economy unless
somebody makes something, and somebody grows something. That
is what we do in Michigan; we do both. But I want to talk about
the ‘‘making’’ part of it now, as we have talked before, and how we
have to make more of it in America. And I think Michigan cer-
tainly is part of leading the way.

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And to tackle the big issue around the climate crisis, as well as
global leadership in manufacturing and so on, certainly electrifying
our vehicle fleet is a very important part of that.
So just to refresh, the U.S. auto industry accounts for about 31⁄2
percent of our gross domestic product. And for us in the United
States, GM is investing heavily in electric vehicles, some $27 bil-
lion to bring 30 different EVs to the marketplace in the next 4
years—very aggressive. Ford is doing the same kind of thing. Ford
is doing the same with $11.5 billion, including their electrifying of
their F–150 truck. So there are very exciting things happening.
The same with FCA with their popular Jeep line. All good news
that we are doing that.
However, when we talk about China, it is not just stealing our
patents and currency manipulation and other things that I have
deep concerns about, but what we are seeing is that over the last
decade the Chinese Government has invested $100 billion in the
EV industry. And what is very concerning is that of the 142 lith-
ium ion mega-factories under construction, out of 142, 107 of them
are in China, and only 9 of them are in the United States.
So it is no surprise that by 2025, 54 percent of the EV sales are
projected to occur in China. So we have to get ahead of this. I
know, looking at the Build Back Better plan of our President-elect,
I know that he cares and you care about this as well, but I wonder
if you could speak for a moment on what we need to do, particu-
larly around the consumer incentives, until we get enough people
purchasing these. Consumer incentives are critical. Senator Alex-
ander and I had a bipartisan bill to extend the current consumer
credit. This needs to get done this year, and Senator Schumer—I
am working with him on a broader package that is very important
to take us to the next step in electric vehicles.
But I wonder if you might talk about what we need to do, or do
you support the consumer credit that we need to create the market
for purchasing EVs?
Dr. YELLEN. Thank you for that question, Senator.
Climate change is a critical problem facing the country, and
President-elect Biden is committed to a wide range of policies to
address it, and in the process, making sure that in doing that, we
create good jobs for American workers. As you have suggested, it
is important that we make things in America.
And electric vehicles are a very important way of both creating
good jobs and addressing climate change. The President-elect is
supportive of restoring full incentives for electric vehicles. He
wants to ensure a robust electric vehicle market. And on top of
that, that will involve building infrastructure and making sure that
our workers have the skills that are needed to succeed in electric
vehicles.
Senator STABENOW. Thank you. Along with that, we know that
a lot of the jobs in electric vehicles now are the component parts.
They are mid-sized employers, the auto suppliers in the supply
chain that is so critical right now, and we are making these compo-
nent parts. And our auto suppliers are very excited to do that.
But I am concerned that with what has happened under COVID
that the piece that just did not happen as I believe it should—and
despite Senator Mark Warner, who did such wonderful work that

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I supported and worked with our auto suppliers on to deal with our
mid-level businesses—we just, I believe, have not done fully what
we need to do to support those jobs.
Do you have any thoughts on where we need to go for mid-level
employers that employ about 50 million people in this country?
Dr YELLEN. Yes, I think that you are absolutely right, Senator
Stabenow, that the largest corporations that have access to capital
markets have not had trouble raising money. We have a heavy
focus on small businesses, trying to get them the aid they need,
and mid-sized businesses have had problems. The Main Street
lending program the Fed set up was not very effective at reaching
them. And so that is an important area for us to focus on, making
sure that capital is available for those businesses so that they can
continue to create jobs and thrive in our economy.
Senator STABENOW. Thank you——
Senator CRAPO. Senator Stabenow——
Senator STABENOW. I am out of time. I would just—not a ques-
tion, but just, Madam Chair, you and I have talked about the mul-
tiemployer pension crisis. I am deeply concerned about that and
the over 1.3 million workers and families who are affected. So I
look forward to talking with you more and developing a way to pro-
tect those middle-class Americans.
Thank you, Mr. Chairman.
Senator CRAPO. Thank you. And I have been notified by staff
that those who are remote may not have the clock in front of them,
so I will try to remind those who are remote when their time runs
out.
Next is Senator Thune.
Senator THUNE. Thank you, Mr. Chairman.
Dr. Yellen, welcome. Congratulations. I am going to try and roll
a lot of thoughts and questions into sort of one big package here.
But the one thing that concerns me, that nobody seems to be talk-
ing about anymore, is the massive amount of debt that we continue
to rack up as a Nation. And in fact the President-elect has pro-
posed a couple-trillion-dollar fiscal plan on top of that which we
have already done, which would add somewhere on the order of
about $5.3 trillion to the deficit. And that is according to the Com-
mittee for a Responsible Federal Budget, of which you have been
a board member.
That is 25 percent of GDP. And it would move the additional
debt above 100 percent debt-to-GDP, which are categories that we
have not been in literally since the 1940s.
And so what I am concerned about is, we seem to have no con-
cern now about borrowing money in the short term, and the argu-
ment is that interest rates are low, it is like free money. It is not.
It has to be paid back.
And at some point, people who are lending us money are going
to say the risk/return ratio is not sufficient for the risk and are
going to demand a higher interest rate. That will happen at some
point. Interest rates will start to normalize and we will have to re-
finance at a higher interest rate. And pretty soon the interest on
the debt exceeds what we spend on even national security for our
country.

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Republicans traditionally have believed that we ought to reduce
spending; that we need to reform entitlement programs; that we
need to have policies in place that create great growth in the econ-
omy, all of which make the debt look smaller by comparison. Demo-
crats have argued we need more revenue, more taxes. And Senator
Crapo also already sort of got at that issue.
But I just want to know what you think. Because I know in the
past you have expressed concerns about the debt and the deficit.
The two previous administrations have not been very interested in
entitlement reform. We have not only the debt that we are adding
to in the short term because of the pandemic, but we have struc-
tural problems that are long-term that are going to continue to
drive that debt higher in the future.
What are your thoughts with respect to reforming entitlements,
with respect to the amount of the debt situation we find ourselves
in right now, and when is it enough? When is it too much? When
do we hit that point where the thing starts to collapse? That is
what really concerns me. And nobody is talking about it really, in
either party anymore. It was something that used to occupy a lot
of our discussions in the past, but nobody seems to care much
about it. And for me, that is a huge warning sign on the horizon,
the fact that we have an ever-growing deficit, an ever-growing debt,
and no apparent interest in taking the steps that are necessary to
address it.
Dr. YELLEN. Senator, I agree with you that it is essential that
we put the Federal budget on the path that is sustainable, and that
we are responsible to make sure that what we do with respect to
deficits and debt leave future generations better off.
But the most important thing, in my view, that we can do today
to put us on a path of fiscal sustainability is to defeat the pan-
demic, to provide relief to the American people, and then to make
long-term investments that will help the economy grow and benefit
future generations.
To avoid doing what we need to do now to address the pandemic
and the economic damage that it is causing, would likely leave us
in a worse place fiscally and with respect to our debt situation,
than taking the steps that are necessary and doing that through
deficit demands. We really have to worry about scarring of workers
due to this pandemic and the loss of small businesses that can real-
ly harm the long-run potential productivity of our economy and
leave us with long-run problems that would make it difficult to get
back on the growth path that we were on.
And it is really critically important to provide this relief now.
And I believe it would be a false economy to stint. But over the
longer term, I would agree with you that the long-term fiscal tra-
jectory is a cause for concern. It is something we will eventually
need to attend to, but it is also important for America to invest in
our infrastructure, invest in our workers, invest in our R&D, the
things that make our economy grow faster and make it more com-
petitive, and it is important to remember that we are in a very low
interest rate environment. And that is something that existed be-
fore the pandemic hit.
Interest rates were low even before the financial crisis of 2008.
This has been a trend in developed economies. You can see it

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across the developed world. And it represents structural shifts that
are likely to be with us a long time.
So, although the debt-to-GDP ratio has increased, it is important
to note that the interest burden of the debt, interest as share of
GDP, is no higher now than it was before the financial crisis in
2008, in spite of the fact that our debt has escalated.
And of course interest rates can increase. Eventually we have to
make sure that primary deficits in the budget are sufficiently small
that we are on a sustainable path. But right now the challenge is
to get America back to work, and to defeat the pandemic.
Senator CRAPO. Thank you.
Senator Cantwell?
Senator CANTWELL. Thank you, Mr. Chairman, and I too want to
congratulate the nominee. I want to thank President-elect Biden
for nominating a woman and, Dr. Yellen, for your willingness to
serve.
I can already see by the words that you have chosen—women,
workers, workforce, workforce training—that you are likely to de-
liver economic policies that are more focused on Main Street than
Wall Street. And I hope that is what I am hearing, because I be-
lieve that we need wage growth in America; that Americans from
all walks of life need more access to wage growth. And I hope the
policies of the Biden administration and you will help deliver that.
I have four areas that I would like to quickly go over, if I could,
that are important to these policies. First, I want to make sure
that you are going to protect Federal taxpayers and their invest-
ments as far as the private banking that exists in America, and
that you will protect and continue to enforce the important laws
that are on the books, and use the Federal Stability Oversight
Council to make sure that we are protecting depositors from having
the Federal Government again ever having to bail out Wall Street,
and to make sure that we are focusing on Main Street instead.
Dr. YELLEN. Senator Cantwell, I could not agree with you more.
Our focus should be on Main Street, not Wall Street. And we
should demand, as Dodd-Frank insisted, that the largest institu-
tions—particularly those that pose systemic risks—have adequate
capital and liquidity and plans by which, if they were to fail, they
could be resolved without posing burdens on taxpayers.
Through my time at the Fed, I worked very hard to strengthen
the banking system, to make sure that these institutions do not op-
erate in ways that would harm Main Street. And I am pleased to
see that, when the pandemic hit and there was a good deal of fi-
nancial disruption, especially the largest banks have been able to,
due to the reforms that were put in place, continue to lend, to sur-
vive with adequate capital, and to support the needs of households
and businesses.
And you have my absolute pledge that this will continue to be
my focus——
Senator CANTWELL. Thank you. Thank you. I have to jump to the
next one that is very important. I have an economy that has one
in four jobs related to trade. I have not been a fan of the Trump
administration’s, what I would call ‘‘unilateral protectionism.’’ I do
not think that this is the direction for an economy where 95 per-
cent of consumers live outside the United States of America. We

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have digital trade issues that need to be resolved. We have na-
tional security issues that need to be resolved.
So a recent Oxford Economics trade war study said that the
Trump administration’s trade war cost us 245,000 American jobs,
and the Federal Reserve Bank of New York and Columbia Univer-
sity found that U.S. companies lost $1.7 trillion in the price of their
stocks as a result of U.S. tariffs imposed in the trade war.
So I am asking you, do you repudiate basically unilateral protec-
tionism?
Dr. YELLEN. Senator, I believe we should try to address unfair
trade practices. And the best way to do that is to work with our
allies, rather than unilaterally. And when the unfair practices have
to do with things like stealing intellectual property, engaging in
forced technology transfer, or subsidies that provide an unfair tech-
nological advantage, I think we should focus directly on those prac-
tices and work with our allies to make sure they are addressed.
Senator CANTWELL. Well, we in the Pacific Northwest believe in
an export economy. And so we want an export economy to take
place, so you have to have trade. And so we want to continue to
focus on that.
I do believe in using sanctions, though. And I think the Trump
administration failed to be as aggressive on sanctions. I want to
make sure that you will use that as an economic tool, particularly
as it relates to cyber-attacks on our infrastructure.
In the last few weeks, there have been so many momentous occa-
sions that I think we have lost sight of the incredible impact of
what happened with the hacking of our information system. And
I want to know that you will use sanctions when necessary on peo-
ple who have attacked our infrastructure.
Dr. YELLEN. Sanctions are a critically important tool to address
cybersecurity and other threats. And you can be sure that I will be
focused on making sure that they are used strategically and appro-
priately. And I intend to ask my Deputy, if he is confirmed,
Adewale Adeyemo, to quickly begin a review of our sanctions policy
to make sure we are doing this in a strategic way, and in the most
effective way we can.
Senator CANTWELL. Thank you. And I look forward to working
with you on increasing affordable housing tax credits. My col-
league, Senator Young, and I continue—we know you understand
how much affordable housing is important to our country and our
economy.
Thank you, Mr. Chairman.
Senator CRAPO. Thank you. And I agree with you on that as well.
Next is Senator Menendez.
Senator MENENDEZ. Thank you, Mr. Chairman. And, Dr. Yellen,
congratulations on your nomination. I look forward to supporting
you.
I know that Senator Grassley asked you a question on SALT. I
hope when you study it, you look at the fact that there are States
like New Jersey that give billions more than we get back, and
States like Iowa that get $5 billion more than they pay in Federal
taxes, or Kentucky that gets $111 billion more than it pays in Fed-
eral taxes, or Florida that gets $60 billion more than it pays in
Federal taxes.

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So you cannot have States continue to be economic engines, and
then also be hurt in this case by the property tax deduction. So it
should be a total—a total look at the equation, and I hope you will
do that as part of your review.
Dr. YELLEN. I will do that.
Senator MENENDEZ. Now since 2020, over the last year, State
and local governments have laid off 1.3 million workers. That is 1.3
million doctors and nurses and teachers and school custodians, 1.3
million essential workers we rely on to fight for us on the front
lines in the battle on COVID.
It is economic malpractice, from my perspective, what is hap-
pening. Could you explain some of the lessons that were learned
from the 2008 Great Recession and the consequences of Congress
failing to adequately address the fiscal crises facing State and local
governments that are causing these and other impending layoffs?
Dr. YELLEN. Well, as you know, in 2008 when the economy suf-
fered such a serious downturn, State and local governments saw a
huge shortfall in revenue and an increased need to spend on safety-
net type programs. And they faced massive deficits.
And although Congress and the administration passed the Amer-
ican Recovery and Reform Act and spent at the Federal level, there
was a huge offset just from the total economic point of view. It
came about because State and local governments have to balance
their budgets, and they were forced to slash their workforces.
And the same thing as you just described is happening now. And
so——
Senator MENENDEZ. And that was a drag on the economy, was
it not?
Dr. YELLEN. It was a tremendous drag on the economy. And the
same would be true now. And as you mentioned, we are seeing lay-
offs, especially with teachers, but prospectively policemen and fire-
fighters and——
Senator MENENDEZ. So it would not be a good time to withhold
fiscal support from State and local governments?
Dr. YELLEN. Not in my view.
Senator MENENDEZ. Right. Now you stated that the economic
fallout of the pandemic is, quote, ‘‘an American tragedy,’’ and I
agree. What makes it uniquely an American tragedy is that minor-
ity communities—and as the longest-serving Latino in Congress, I
can tell you that community, African Americans, and other minor-
ity communities have borne the disproportionate brunt of the
COVID-related economic fallout.
In December, nearly 10 percent of African American workers and
9.3 percent of Latino workers were unemployed, compared to 6 per-
cent of the other population. Twenty-eight percent of black renters
and 24 percent of Latino renters were not caught up on their rent,
compared to 12 percent of white renters. Fifty-five percent of Afri-
can American adults and 51 percent of Latino adults reported dif-
ficulty in covering their expenses, compared to 31 percent for white
Americans. That is a very dark and dire picture.
If confirmed, you will be in a position to promote policies to re-
duce racial inequality, especially as we continue to fight the
COVID–19 pandemic. Can you give me a sense of how you plan to

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ensure that our response to the economic crisis will also help the
minority communities that are being disproportionately hurt?
Dr. YELLEN. Senator, you cited some dramatic and disturbing
statistics. And they are absolutely right. This pandemic is taking
just an unbelievable toll on low-income workers—and on minorities
especially.
And because I am so concerned about the impact on minority
communities, the very first meeting that I had after my nomination
was announced was with representatives of racial justice and eq-
uity groups to hear from them what their needs are. And I promise
you that I will be fully focused on putting into place, at every level,
relief for these communities.
An example would be the State Small Business Credit Initiative
that is contained in President-elect Biden’s package announced last
week. There is money there to capitalize lending to small busi-
nesses, and a proposal to provide grants to loans for small entre-
preneurs.
And of course with respect to food security, evictions, unemploy-
ment insurance, and relief that these households need—paid leave,
the minimum wage—all of these things I believe will be very bene-
ficial.
Senator MENENDEZ. My time has expired, but I just want to say
I hope as part of that—I like a lot of what you said—I hope you
also diversify the Treasury Department, which really needs to have
voices at the table to help you meet those challenges.
Dr. YELLEN. I completely agree with you, Senator.
Senator MENENDEZ. Thank you, Mr. Chairman.
Senator CRAPO. Thank you.
Senator Toomey?
[No response.]
Senator CRAPO. Is Senator Toomey on line? I am told that he is
not. So we will move on to Senator Carper.
[No response.]
Senator CRAPO. I am told you are here, Senator Carper. Oh, ex-
cuse me. All right, we will go on to Senator Scott.
Senator SCOTT. Good morning.
Senator CRAPO. I hear you. Go ahead, Senator Scott.
Senator SCOTT. Excellent. Can you hear me?
Senator CRAPO. I can hear you. Now we can see you also. Go
ahead.
Senator SCOTT. Excellent. Thank you, Mr. Chairman, and thank
you—I want to continue to call you ‘‘Chair Yellen,’’ Dr. Yellen, and
it is so good to see you again and thank you for your willingness
to serve during these challenging times, without question.
I will hop right to it, because Chairman Crapo will keep me to
my 5 minutes. The first question I have is about the pandemic re-
lief package that has been presented. You know as well as I do that
in December we passed a package that included $80 billion for
schools to reopen and $280 billion to restart the Paycheck Protec-
tion Program for a second round. It also included billions of dollars
for the vaccines, which I think is certainly an area where we need
to invest even more than we have so far, without question. But the
$1.9-trillion package that has been presented to us is a package

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that focuses on some priorities that I think will actually hurt our
economy as much as they would improve our economy.
One in particular is the issue of raising the minimum wage to
$15 an hour. In talking to businesses around the country, and spe-
cifically at home, the one thing that even the Congressional Budget
Office recognizes is that by increasing the minimum wage to $15
an hour, it could shutter somewhere around 3.7 million jobs on the
high end, a minimum of 1.3 million jobs in our economy. And the
last thing this economy needs, as we attempt to recover, is a loss
of 1.3 to 3.7 million jobs.
But in addition to that, it would increase the cost of doing busi-
ness significantly. It would certainly devastate the opportunity to
develop new jobs in rural America and in rural South Carolina as
well. And for those minorities newly coming into the workforce, it
would actually have a disproportionate impact on those folks who,
as you said in your testimony, you want to target for relief and op-
portunity.
To say it differently, over 110,000 restaurants have closed during
the pandemic. Thousands of those restaurants are in South Caro-
lina. By increasing the minimum wage to $15 an hour and elimi-
nating tips for servers at restaurants, we will do actually what I
would consider an existential threat to those restaurants and,
frankly and more importantly, to those employees of restaurants.
How do we grapple with parts of this package that really are
philosophical in nature and deny the practical reality that comes
from them?
Dr. YELLEN. Well, Senator, I appreciate that question. President-
elect Biden has proposed raising the minimum wage to $15 an hour
because right now we have millions of American workers who are
putting their lives on the line to keep their communities func-
tioning, and sometimes even working multiple jobs, but are not
earning enough to put food on the table and a roof over their
heads. And they are suffering in countless ways, especially during
this pandemic, and really struggling to get by. And raising the min-
imum wage would really help many of those workers.
And that is the reason for doing it. Now in terms of potential job
loss, there is now a large economics literature on this. And much
of it suggests that raising minimum wages—this is when research-
ers often look at what happens when one State raises its minimum
wage and a neighboring State leaves it alone, to see how busi-
nesses fare in the two different places with different treatments.
And the findings are that the job loss is very minimal, if any-
thing. So I think that the likely impact on jobs is minimal. That
is my reading of the research. And of course all businesses are
struggling, and it is critical to help those businesses. I appreciate
the PPP package in the recently passed bill. I pledge that we will
do everything we possibly can to get that money out to struggling
businesses effectively.
It is critically important to help those businesses. The money
that has been allocated to a city that applies to support them and
their lending, especially in low- and moderate-income communities,
that is critically important aid, and President-elect Biden has pro-
posed yet more aid to these businesses so that they can survive
this pandemic and get back on their feet.

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Senator SCOTT. Well, thank you for your answer, Dr. Yellen. I
would say that there is no doubt that when you artificially increase
the minimum wage, you are going to permanently decrease the
number of jobs in the economy. When we have a market-driven in-
crease of the minimum wage, we see production go up, and the
value of work increases as well.
My final question in my time that I have left, which doesn’t look
like much——
Senator CRAPO. Actually, your time has expired.
Senator SCOTT. Yes, sir. Let me just say this for the record, and
perhaps you can answer it on the record for me. When we think
about enough being enough, if there was another downturn in our
economy, whether it’s based on another pandemic or some other
act, what are we doing to make sure that we have the resources
necessary for that next downturn in 2 or 3 years, as opposed to
using every weapon in the quiver today for what is a recovery that
has started? I think it would be prudent for us to save some of the
resources for the next time we need to respond to a global crisis
of some sort.
Thank you, Dr. Yellen. And I will look to have that answer just
in writing, ma’am.
Dr. YELLEN. Yes, thank you.
Senator CRAPO. Thank you, Senator Scott.
Next, we will go back to Senator Toomey.
Senator TOOMEY. Thank you, Mr. Chairman. Can you hear me?
Senator CRAPO. Yes.
Senator TOOMEY. Thank you. And, Dr. Yellen, welcome and
thank you for your past service to the country and for your willing-
ness to serve in this capacity. I look forward to working with you,
but I have to admit that the contours of the stimulus bill as pro-
posed by the Biden administration are going to make that difficult.
The ink is barely dry on the second-largest stimulus package in
American history, nearly a trillion dollars after nearly $3 trillion
earlier in the year, and we are looking at another spending blow-
out. The only organizing principle that I can discern is, it seems
to spend as much money as possible, seemingly for the sake of
spending it. An additional $1,400 per person, regardless of the per-
son’s circumstances, guaranteeing that there will be several thou-
sand dollars in payments going to families with six-figure incomes
who have had no income interruption whatsoever, just makes abso-
lutely no sense.
Increasing unemployment payments such that a majority of un-
employed workers will make more money being unemployed than
they make working, can only slow the return to a normal, healthy
labor market. Sending States more money than they have lost in
lost revenue or in additional spending is just not a good idea. And
I completely agree with Senator Scott. Obviously an arbitrary
government-mandated minimum wage increase is going to cost
jobs. If not, then of course we would just raise the minimum wage
to $20, or $30, or $50 an hour. Obviously it will result in some job
losses.
So these proposals are not targeted at those people who really
need them. It cannot be justified on the grounds of effectiveness.

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And it is going to be hard to get to a bipartisan agreement based
on this.
I will say I am pleased to hear your testimony that you think
that the tax increases, the really massive tax increases that
President-elect Biden is proposing, will be delayed. By the way, it
is implicit the economic damage that those tax increases will do.
It is quite a staggering list. Huge increases in individual rates.
Adding a 12.4-percent payroll tax on upper-income people will have
many Americans with combined State and local marginal tax rates
well into the 60 percentages. Huge increases on corporate America,
which will make America a less attractive place to headquarter a
multinational company, which will make it less attractive to invest
here.
And I would point out that we reached record low unemployment
rates and rising wages, especially for the lowest-income people,
after our tax reform. I am not sure why we want to go back on
that.
But let me zero in on one particular idea that some of our col-
leagues have suggested—and I think Senator Wyden was alluding
to this during his opening comments—and this is the idea that,
separate and apart from the Biden administration’s proposal to
double the taxes on capital gains, some are suggesting that we
start to impose taxes on unrealized gains. An asset appreciates,
and we charge a tax on that, even though there is no liquidity
event, there is no sale, there is no actual realized gains. We will,
I guess, have a mark-to-market, if that is even possible in some
cases, and impose a tax on that.
So my question for you, Dr. Yellen, is, without getting into any
particular bill, do you support the idea of taxing unrealized appre-
ciation of assets?
Dr. YELLEN. Well, I do believe that capital gains should at some
point be taxed. Right now, step-up of bases at death provides a
route by which a very large share of capital gains are never taxed
at all.
Senator TOOMEY. That is a separate issue. That is a distinct
issue. The idea of an annual tax on an unrealized appreciation of
assets is what I am asking about.
Dr. YELLEN. Well, what I wanted to say is that there are simply
different ways of addressing the issue of how to make sure that
some taxes are collected on capital gains, and this mark-to-market
approach is one method, but certainly not the only method. And
there may be technical challenges associated with it. So I would
want to have the administration look at different approaches.
Senator TOOMEY. And, Mr. Chairman, are we operating on a 5-
minute clock?
Senator CRAPO. Yes, we are, and your time just ran out.
Senator TOOMEY. I see that. I look forward to the second round.
Senator CRAPO. All right; thank you.
Next is Senator Carper on the line.
Senator CARPER. Thanks, Mr. Chairman.
Dr. Yellen, good morning, and we are delighted that you are join-
ing us and for your being nominated. And again on behalf of all of
us, thank you for your extraordinary service to our country for al-
most as long as I have been a member.

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When I was new in the Senate, one of the people I did not really
know very well was Ted Kennedy, and I suggested we maybe have
a cup of coffee just to get to know each other. And it actually
turned out to be lunch. When we were having lunch, I said: ‘‘Why
is it that, even though you are considered the most liberal Demo-
crat in the Senate, you have lots of Republicans in the Senate who
want you to be their lead co-sponsor on the big bills? Why is that?’’
And I will never forget what he said, Dr. Yellen. He said, ‘‘I’m
always willing to compromise on policy. I’m never willing to com-
promise on principles.’’ Always willing to compromise on policy;
never willing to compromise on principles.
Our President-elect knows—having served in the Senate for the
better part of 4 decades, he knows the need to be able to find con-
sensus and develop consensus. Ted Kennedy kept his word. He
never compromised on principle. He was always willing to com-
promise on policy.
Could you talk about the principles that the administration and
Congress should not be willing to compromise on with respect to
the next COVID relief package?
Dr. YELLEN. Well, I think that the administration should be in-
sistent that we have the resources to address the public health
challenges to mount a vigorous national campaign to make sure
that vaccinations are as rapid as possible. Not only is this going
to prevent needless suffering and loss of life, but it is also the best
and most effective way to get our economy back on track, and to
get to re-employ all the workers who have been suffering in busi-
nesses that are really struggling to survive. So that is some-
thing——
Senator CARPER. Dr. Yellen, I could not agree more. I could not
agree more. I would like to say, the main thing is to keep the main
thing the main thing. And the main thing for this economic recov-
ery is to reel in this pandemic. The best way to do this, as we are
getting new vaccines almost by the month now, is to vaccinate the
heck out of our country.
Dr. YELLEN. I completely agree with you. And I think that that
is a top priority. And then I would say another principle that is
really critical is that we have to relieve the suffering that this pan-
demic has caused. It has been——
Senator CARPER. How do we do that? How do we maybe target
that a little bit better, or differently, than is proposed in this relief
package from the incoming administration?
Dr. YELLEN. Well, we need to look at how to target it. It needs
to go to the businesses that are most at risk, small businesses, par-
ticularly businesses in low- and moderate-income areas that re-
ceived less than a proportionate share of PPP relief in the first
round of PPP aid. So we need to target small business relief to
those most vulnerable businesses. We need to make sure that peo-
ple are not going hungry in America, that they can put food on the
table, that they are not losing their homes and ending up out on
the street because of evictions.
We really need to address those forms of suffering. And I think
we should not compromise on it. And if we do not do so, that suf-
fering and the loss of spending it will cause will cause other people

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to lose jobs and permanent scarring. It will harm the economy over
the longer term.
Senator CARPER. Thank you for that. We have millions of people
who have lost their jobs. In many cases, their employers are out
of business. And the folks who have lost their jobs do not have the
skills to be able to do the jobs that are out there being taken. We
heard some ideas how to address that.
One is to use our community college system across the country
to provide not just the ability to get a 2-year degree, but in some
cases, a certificate for a job that needs to be done. Could you speak
about that?
Dr. YELLEN. I am strongly supportive of supporting the commu-
nity college system. I think it provides a wide range of very valu-
able training. In some cases it is helping people to go on to college,
but in many cases providing training, as you indicated, to workers
who have lost their jobs who need new skills and a new credential
to be able to move into jobs that are available in expanding sectors.
And I think investing in that system, making sure it is available
to anybody who needs it and can benefit from it, is really impor-
tant.
Senator CARPER. Well, thanks so much. Mr. Chairman, I may
have used up my time——
Senator CRAPO. Yes, you have.
Senator CARPER. I will mention a question for the record, and
then I will stop.
Senator CRAPO. Go ahead.
Senator CARPER. I am going to ask you a question for the record.
I am going to ask you to share your thoughts with us on the need
for measures such as temporary refundability. It’s about clean en-
ergy tax credits that can help the clean energy industry secure
project financing and get back on its feet. I will ask you that ques-
tion for the record, but I just wanted to ask it here.
Thanks for your extraordinary service. It is great to be with you,
as always. Thanks, Mr. Chairman.
Senator CRAPO. Thank you.
Senator Cardin?
Senator CARDIN. Thank you, Mr. Chairman.
And, Dr. Yellen, thank you very much for your long public serv-
ice and your willingness to take on this challenge. We thank your
family also, because we know it is going to be a family sacrifice.
I am sure your discussions at your dinner table will be very inter-
esting.
Let me follow up on Senator Cantwell’s question as it relates to
sanctions. You indicate that you are going to have a review of the
use of sanctions, and absolutely on cyber-attacks. But we are also
suffering today in a decline of the democracy. Human Rights Watch
said the last 4 years were a disaster for human rights. American
values have been under attack. We have a decline in the number
of democratic states in the world.
So Congress has passed sanction regimes in order to deal with
strengthening the democratic states. And we have done that on
specific issues. We have done it on the global Magnitsky statute,
and I just really want to encourage you, as you are reviewing the

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use of sanctions, to recognize that we have real challenges today,
and the United States has to exercise its leadership.
Senator Young and I have introduced legislation to deal with cor-
ruption. Corruption is one of the most corrosive elements in the de-
cline of democratic states, and we are suggesting using a tier sys-
tem on how countries are dealing with corruption. Some of it will
be dealing with human trafficking—with consequences.
So my first question is about your willingness to work with us
in Congress so that we can be united in the use of sanctions glob-
ally to advance U.S. values.
Dr. YELLEN. You have my pledge, Senator Cardin. I look forward
to working with you. These are very important challenges and
goals. Sanctions are a tool that can be very effective, and I pledge
to work with you on implementing them in a way that does address
these abuses.
Senator CARDIN. Thank you.
My second point is an area that has been mentioned by many
members, including yourself in your opening statement, and that
is dealing with our minority community, the under-banked commu-
nity, the under-served community, as we come out of COVID–19.
I have the honor of being a lead Democrat on the Small Business
Committee and have worked with Senator Rubio in developing a lot
of the tools that were in the first two major COVID relief packages.
And we learned a lot from that.
It is difficult to get to the under-served communities, and we
really do need to concentrate and find better ways to deal with
them. We did learn that small businesses that are stressed much
prefer a grant than a loan, even a forgivable loan, because they
really do not want to put another loan on their books.
So we have looked at ways to develop grants that are targeted
to the most vulnerable small businesses. We know that they need
resource partners so that they are not last in line, but first in line
in order to be able to get help. We know that there is a very limited
amount of venture capital, particularly in emerging markets, for
minority small businesses. And we certainly know the smaller the
small businesses are, the more vulnerable they are.
So my plea to you is that, as you are developing these packages,
please work with us and what we have found that has worked, and
what has not worked, so we can really help the most vulnerable of
our small businesses, the most vulnerable of our communities, as
we look for tools to help those communities that are targeted to
provide the relief to communities that have been left out for way
too long.
Dr. YELLEN. Senator, I pledge to work with you closely on that.
This is a very high priority objective of President-elect Biden. The
proposal that he put forward last Thursday does contain funding
for additional grants to these very hard-hit businesses, and also
funds, a small business opportunity fund that would be able to be
leveraged and enable various State and nonprofit programs to le-
verage a large volume of lending to businesses that have been
hard-hit and that have opportunities.
But we will look for ways to target it and work with you closely
to understand what is best.

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Senator CARDIN. I thank you for that. My last question deals
with the lack of retirement security for Americans. Before COVID–
19, we were not doing what we needed to do. As a result of
COVID–19, more and more households are not saving anything for
retirement today.
We passed some legislation in the past, the SECURE Act. I have
worked with Senator Portman on bipartisan legislation. We are
working on bipartisan legislation in this Congress. I would just
urge you to be an active partner with us in how we can increase
retirement security options for workers in this country.
Dr. YELLEN. I completely agree with the priority that you place
on this, Senator Cardin. Really, so many families are not prepared
for retirement and have not been able to save for it. It is a huge
problem, and the pandemic is making it worse, as hard-hit families
are running down their savings. I think in this economy, everyone
needs access to a workplace retirement saving plan, and I look for-
ward to working with you to address this issue.
Senator CARDIN. Thank you very much. And thank you for your
willingness to serve.
Dr. YELLEN. Thank you.
Senator CRAPO. Thank you.
Senator Cassidy?
Senator CASSIDY. Hey, Dr. Yellen. Nice to see you again. And
again, thank you for our conversation before.
You used the word ‘‘targeted’’ multiple times in your response to
Senate Cardin. Senator Carper suggested that perhaps the Biden
plan could be a little bit more targeted. The extra $1,400 to fami-
lies, some of whom, you know, are working, they see no decrease
in their income, many of whom actually—an analysis from the first
check, the $1,200, showed that for many it turned out to be discre-
tionary income. They put it in savings, and there are some reports
that there was more money invested in the stock market.
So do you—since you mentioned ‘‘targeted,’’ would you view this
additional $1,400 stimulus check as a targeted relief ?
Dr. YELLEN. Well, I believe that in the President-elect’s proposal
it would go to individuals earning $75,000 or less, or couples earn-
ing $150,000 or less. Some families presumably do not greatly need
the money, but there are many families who were under stress,
people have had to drop out of the labor force while receiving un-
employment——
Senator CASSIDY. I only have 5 minutes. But on the other hand,
the unemployment insurance that has gone out there was very di-
rected relief for those who have had to drop out of the workforce.
I totally accept that. But it seems like the $1,400 on top of the un-
employment, and on top of some of the other—you know, the rent
relief, for example, seems to be less targeted. And I go back there
because ‘‘targeted’’ keeps on coming up.
Dr. YELLEN. It is less targeted. But there are many families that
are bearing unacceptable financial burdens that are not addressed
by unemployment compensation. People who have had to drop out
of the labor force because their children are out of school, who sim-
ply cannot participate because they need to take care of family pri-
orities——

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Senator CASSIDY. Can I interrupt again, just because—I do not
mean to be rude. I only have 5 minutes, and I only have 21⁄2 left.
There is also money for education. And I will note that in the
COVID relief package just passed, plus the CARES package, I
think we have put in a net of $66 billion for education. The total
of Federal outlay is typically only $57 billion. So we actually are
over 100 percent of what the schools already get. Again, if we are
looking at what is targeted—although I am sure there is always
somebody who has need—it seems as if that need would have been
met with an over 100-percent increased subsidy to a school. So I
will just mention that.
Let me ask you a couple more things. The previous administra-
tion considered issuing 50-year bonds to take advantage of the low
interest rates, and to retire some of the shorter-term bonds. Is that
something that you would consider? Because I think they decided
against it, but I am just wondering what your appetite would be.
What would you think this administration’s appetite would be for
that?
Dr. YELLEN. Well, there is an advantage to funding the debt, es-
pecially when interest rates are very low, by issuing long-term
debt. And I would be very pleased to take a look at this issue, ex-
amine what the market would be like for bonds at that maturity,
and I am interested in hearing your thoughts on this issue and
working with you on that.
Senator CASSIDY. Let me also ask about infrastructure, because
that may involve borrowing. In infrastructure, clearly the problem
of the big package has been, how do we finance it? Now if we spend
roughly $450 billion on increased stimulus checks, well, intuitively
that is going to take away some of the appetite for more deficit
spending for an infrastructure package. But obviously, putting
Americans back to work with an infrastructure program would be
very beneficial for Americans.
I will just say that editorially. It does seem that there is only
going to be a certain limit for borrowing if we do not have a source
of revenue to pay for it.
Let me go back to the infrastructure. What thoughts do you have
on infrastructure? And is this one of the programs that you see the
Biden administration would be considering not raising revenue for
but probably just borrowing in order to pay for it to get the eco-
nomic benefit?
Dr. YELLEN. Well, I think that—so let me just say that Presi-
dent-elect Biden has proposed an ambitious Build Back Better pro-
gram that involves infrastructure. It involves clean energy, invest-
ing in manufacturing, R&D training, and we have yet to decide ex-
actly how that should be financed. Remember that companies often
borrow to invest in projects that have sufficiently high returns
where there is a net benefit. And there are at least some invest-
ment programs for the public sector that have been shown to have
extremely high returns where I think one could argue for bor-
rowing to finance them.
But that is something that we will have to look at carefully, the
financing of those programs.
Senator CASSIDY. Thank you very much. I yield back. Thank you.

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Senator CRAPO. Thank you, Senator Cassidy. And to all of the
Senators, we have a limited time available in this room. We still
have time to get through all the questions, but I am going to ask
all the members to please pay very close attention to the clock.
With that, we go next to Senator Brown.
Senator BROWN. Thank you, Mr. Chairman. Dr. Yellen, welcome.
I am looking forward to working with you to make the World War
II-level investment we need to defeat the pandemic and build a bet-
ter economy that honors the dignity of all work.
Last week on the way out the door, the current Treasury Sec-
retary rushed through an agreement with the Federal Housing Fi-
nance Agency that locks in big changes to the GSEs, leaving you
to deal with the consequences. In the Banking and Housing Com-
mittee, I have laid out a path for reforming our housing finance
system. I look forward to working with you on these principles, and
on implementing the $25-billion Emergency Rental Assistance pro-
gram we passed last month.
We also need to make sure that the IRS is enforcing our tax code
in a fair way. I want to work with you to make sure the IRS’s au-
diting and enforcement activities do not have disparate impacts for
black and brown communities, as soon-to-be-chair Wyden has
brought up also.
Another critical issue is fixing the multiemployer pension crisis.
There are over a million Americans relying on us to save the pen-
sion that they have already earned. I am glad Senator Stabenow
raised that earlier. I look forward to working with her and with
you to address this problem, which gets worse by the month.
Many of us also were excited that the President-elect included an
expansion of the Earned Income Tax Credit and the Child Tax
Credit in the rescue plan, especially the refundability of it. That is
going to make a huge difference in the lives of so many families.
I thank my colleague, Senator Bennet, for his partnership on this.
For the first time ever—and we have talked about this—we can
give families the option to get their CTC checks monthly. That is
what my Working Family Tax Relief Act calls for. If we combine
that with the plan to give every American access to a no-fee check-
ing account at a community bank or credit union, or the Post Of-
fice, we can give millions of families the security of a steady finan-
cial boost and give them more power over their lives. They will not
have to worry about a predatory financial institution charging
them exorbitant fees just to use their own money.
So I have two quick ‘‘yes’’ or ‘‘no’’ questions. If we make monthly
distribution optional for families, will you ensure that IRS makes
every effort to implement it as fast as possible?
Dr. YELLEN. Yes, I will. I will need to consult with IRS, but I will
try to get it implemented as rapidly as possible.
Senator BROWN. And, Madam Chair, if the IRS needs additional
funding to make this happen, will you make sure the President-
elect’s budget proposal includes the funds the IRS will need?
Dr. YELLEN. Yes.
Senator BROWN. Thank you.
Turning now to the impact, following on from Senator Menendez,
on State and local governments, how that affects millions of work-
ers: my State faces a $2.4-billion budget gap. My State—all States

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need help for the layoffs of teachers and firefighters and sanitation
workers and children’s service workers. I am glad President-elect
Biden understands that and is calling for that $350 billion in new
aid.
Just, if you would expand a bit, briefly, what are the costs if our
country fails to make this investment in local and State govern-
ments?
Dr. YELLEN. Well, we are already seeing substantial layoffs of
teachers. And with budget shortfalls, we are going to see further
layoffs of essential workers, including policemen and firefighters
and sanitation workers. And not only is this going to be a further
hardship for these essential workers in the communities that they
serve, but it is also going to have ripple effects through the econ-
omy as they contract their spending and create further job losses
throughout the economy.
And so I think it is very important that we provide this aid. It
is also critical to get children back to school. The State and local
governments and their school systems need the resources to reopen
schools. It is President-elect Biden’s plan to try to have that hap-
pen within the next 100 days, but the schools need more resources
that State and local governments would be hard-pressed to provide.
Senator BROWN. Thank you, Madam Chair. A number of my col-
leagues have talked today about competitiveness. It is clear from
your comments you understand that corporations paying their fair
share and reforming our tax code puts workers first, American jobs
first, and actually helps America competitively. So investing in
workers through the dignity of work helps us be more competitive.
Mr. Chairman, I will just close with this. I wanted to talk for a
moment about the work that you and I did in the Banking and
Housing Committee. I appreciate Chair Yellen’s comments today in
The New York Times about restoring FSOC to its intended role.
I look forward to working with the chair and with Ranking Mem-
ber Toomey on that, climate change, creating clean energy jobs, im-
plementing, as you and I have talked about, Madam Chair, our
anti-money laundering bill where we are losing billions of tax dol-
lars to these anonymous overseas shell corporations, revenue that
could be used to do a lot of the things that we have talked about
today.
So I am thrilled that you are returning to public service. And,
Mr. Chair, I thank you for your forbearance.
Dr. YELLEN. Thank you, Senator.
Senator CRAPO. Thank you, Senator Brown.
Senator Lankford?
Senator LANKFORD. Thank you. Dr. Yellen, thanks again for step-
ping back into government service. It is not an easy thing for any-
one to be able to step in, and especially in this season. So thanks
for stepping back in again to be able to do that.
Let me ask you a whole multitude of questions, and I will try to
be rapid and be able to walk through some of these. You made a
comment to Senator Thune earlier saying eventually we are going
to have to deal with the issue of debt.
What is kind of the warning sign that you look for? And is there
an upper limit to the Federal debt that we should be watching for?
And in your perspective, what are the key signs? Because if you

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use the word ‘‘eventually,’’ that would tell me that you do not think
it is infinite. What is that upper limit?
Dr. YELLEN. Well, I would agree with you. I think there is no sin-
gle metric that summarizes a number for all fiscal situations. But
one metric that I do think is useful to keep in mind is the interest
burden of the debt. What share of our economy, of GDP, is going
to pay interest on the debt? The higher that gets, the more we find
we have to use tax revenue just to pay the interest on the debt.
And eventually that can lead to having to curtail other services,
other spending, or eventually lead to runaway debt accumulation
that would be an unsustainable path.
During the low interest rate environment like we are in, what we
are seeing is that, even though the amount of debt relative to the
economy has gone up, the interest burden has not.
So I would keep the interest burden in mind as a metric. Right
now it is low, but longer-term we have to make sure that the defi-
cits that we run in the Federal budget are consistent with stability
in that kind of ratio.
Senator LANKFORD. I would submit that we have to find an ear-
lier warning sign. Because once interest rates start ticking up, in
some ways it is too late because you have so much debt and the
interest rates begin to tick up. If you find that moment when it is
unsustainable, it rapidly gets worse.
You made a comment in an interview in 2018 that I want to be
able to follow up with you on. In this particular interview, you said,
the United States’ debt path was unsustainable, and that ‘‘if I had
a magic wand, I would raise taxes and cut retirement spending.’’
Do you remember what you meant by that? It was a comment that
you made in 2018, and I am not playing quiz show with you to try
to go back and be able to review that. I want to know just your
perspective in 2018. If you had a magic wand, because of an un-
sustainable debt path, you would raise taxes and cut retirement
spending.
Dr. YELLEN. Well, we have long known that as our population
ages, and if medical expenses and health-care costs continue to rise
over time at rates faster than the general level of other prices, that
there would be increasing shortfalls in both Social Security and
Medicare—and that eventually we would need to find ways to ad-
dress it.
And it does not have to be—these are very important programs.
I think it is important to remember that, once upon a time, poverty
in the United States—if you looked at who the poor population
was, it was the elderly. And these programs have played an essen-
tial role in giving Americans a safe and secure and dignified retire-
ment. So we need to preserve these programs, and certainly pre-
serve the benefits, especially for lower-income Americans who de-
pend on them.
Senator LANKFORD. You are not discouraging retirement savings,
or tax incentives for individuals who choose——
Dr. YELLEN. No, I think—I mean, I think we should also have
incentives and ways to help people save for retirement above and
beyond that. But I would want to see these benefits preserved.
One thing that we could do to diminish imbalances is to find
ways to deliver health care more cheaply and more efficiently. And

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there are a lot of ideas for doing that. And I would look first to
those kinds of things to achieve sustainability.
Senator LANKFORD. Okay, so really what you meant by that was
not cut retirement spending. It was cut the amount that retirees
spend on health care? Is that what you are saying?
Dr. YELLEN. Well, that would be an important way to find ways
to deliver these health-care services more efficiently.
Senator LANKFORD. Thank you. I will have several questions for
follow-up on the record about the role of OCC. Obviously that is a
different role. You had mentioned before, taxes not right now. It
would be hard to be able to do that right now. I want to get a feel
from you on what the initial metrics are you are looking for before
we can raise taxes, to be able to deal with that. And also sanction
issues with Iran and how that specifically plays into the coming de-
cisions you will have to make. So I will submit those for the record,
and I appreciate your testimony.
Dr. YELLEN. Thank you.
Senator CRAPO. Thank you, Senator Lankford. I appreciate the
Senator’s paying attention to the clock.
Senator Bennet?
Senator BENNET. Thank you. Thank you, Mr. Chairman; it is
good to see you. And thanks, Dr. Yellen, for your willingness to
serve. I think we are very, very lucky that you are willing to do
it, especially at this time.
And I wanted to say one word to my colleagues. I heard the dis-
cussion today about the deficit. And I share the view that in the
long term we need to figure out how to create a sustainable fiscal
path for our country. I share that view. I also believe that we made
some poor choices in terms of what we borrowed money to spend
on. We had two wars in the Middle East that lasted for 20 years
that cost us something like $5.6 trillion, all of which was borrowed,
none of which was paid for. We have cut taxes by $5 trillion, al-
most all of it to the wealthiest people in America. And we borrowed
every penny to do that. And, as Dr. Yellen was just saying, I do
not think anybody can take pride in this health-care system in
America that costs twice as much as any other health-care system
in the world, and we are borrowing a whole bunch of money to do
that.
What we have not done is invested in our human capital, our
people. What we have not done is invested in our infrastructure in
America, in the next generation of Americans. So it is not just a
matter of what the balance sheet looks like; it is also a question
of what are the choices that we are making? And I hope together
we are going to make some choices with this new administration
to invest in the American people and give them a fighting chance
in this terrible pandemic, and in this slowing economy.
And it brings me to my question for you, Dr. Yellen. I cannot ac-
tually see you, but I wanted to talk about the decision that the
Biden administration made to include the expanded Child Tax
Credit and to make it fully refundable, to take it up from the level
that it is today to $3,000. Sherrod Brown, my colleague from Ohio,
and I have been working on that for almost a decade. If this man-
ages to make it through the Congress, we will have cut childhood

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poverty in America by 45 percent. By some estimates, the cost of
childhood poverty in this country is a trillion dollars.
You were mentioning a minute ago in your answer to the Senator
from Oklahoma the importance of programs like Medicare in end-
ing the poverty we see among seniors, or diminishing it. We have
a crisis in our country, because so many of our children are grow-
ing up in poverty.
It would seem to me that, of all the things we have talked about
today, at least from my perspective, I cannot think of anything that
would make a greater difference in the prospects of the next gen-
eration, and of this country’s prospects, than cutting childhood pov-
erty almost in half in the way that you have proposed in the Biden
recovery package.
I wonder, Dr. Yellen, if you could say a word or two about the
importance of that proposal.
Dr. YELLEN. Well, Senator Bennet, I very much agree with all of
the points that you just made, that childhood poverty is way too
high in America. And one of the best ways that we can reduce that
is providing a refundable Child Tax Credit at a level that really
makes a dent in that. And I think that this proposal is really im-
portant because, as you said, it will substantially reduce childhood
poverty, give families the ability to invest in their children, and
give them the kind of tools that they need to succeed in this econ-
omy.
Senator BENNET. You know, one of the things we suggested in
our bill—I think Senator Brown talked a little bit about this—is
the idea that the Treasury Secretary could set up monthly advance
Child Tax Credit payments.
I wonder, just in the last seconds that I have, whether you agree
that monthly payments would aid in smoothing families’ incomes
and spending levels over the course of the year, better helping
them make ends meet during this difficult time?
Dr. YELLEN. I agree. These families have serious liquidity issues,
and not having to wait until tax day to receive these payments
would be very beneficial. So I would certainly explore with the IRS
if it is possible to make these available in advance on a monthly
basis.
Senator BENNET. Well, we look forward to working with you on
that. I am out of time. Mr. Chairman, thank you.
Senator CRAPO. Thank you, Senator.
Senator Daines?
Senator DAINES. Thank you, Mr. Chairman. And thank you, Dr.
Yellen, for being here today. I look forward to meeting with you
one-on-one later this week as well.
Before the pandemic, we had a booming economy. The national
unemployment rate was 3.5 percent, the lowest level we had seen
in 50 years. Wages were growing for workers across the board. In
fact, importantly, the wages for lower-income Americans were fi-
nally growing faster than those for high-income earners. And I be-
lieve this is due, in no small part, to the impact of the Tax Cuts
and Jobs Act signed into law in December of 2017.
I am concerned by President-elect Biden’s plans to increase
taxes. I think that raising taxes in general is not a good idea, but

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particularly in the middle of a pandemic. It will be very harmful
for growth.
If you think about Montana, in our State 99 percent of our busi-
nesses are small businesses. And our small businesses, our mom
and pop shops across our State, every corner, they have been hit
hard by the pandemic. And this targeted relief has helped some,
but the last thing we should be doing, in my opinion, is raising
taxes—not ever, in fact, but especially not during or after a pan-
demic.
Dr. Yellen, I would like to get your thoughts on this topic. Do you
agree that raising taxes while the economy is still recovering from
the pandemic is a bad idea?
Dr. YELLEN. Well, Senator, the focus right now is on providing
relief, and on helping families keep a roof over their head and food
on the table, and not on raising taxes. But longer-term, I think it
is important to the Biden program of Build Back Better, investing
in people, investing in infrastructure, investing in research and de-
velopment, in manufacturing and things that will create good jobs
and make our economy more productive. We need to think about
taxes in the context of the package that aims to do those things.
And to the extent that financing is required for these very valu-
able investments, I believe it should be coming in a fair way.
Taxes—collections relative to the economy have declined over time,
and although the corporate tax cuts I think did improve the com-
petitiveness of American businesses—and President-elect Biden is
not proposing to raise the corporate tax to the level before that
act—it is very important that corporations and wealthy individuals
pay their fair share.
And the proposals that he will make will be in the context of an
overall package that is very beneficial to the economy. And I think
working in the context of the OECD negotiations on global tax-
ation, we have much greater leverage to keep our firms, American
firms, competitive if we avoid a race to the bottom in corporate tax-
ation globally. And that is one of the——
Senator DAINES. I know we will have a chance to have probably
a vigorous and robust discussion about that, but I want to remind
everybody on this committee that it is the pass-throughs and the
non-C corps that are the primary drivers of economic growth in a
State like Montana. It is small businesses. But we will have that
discussion at a later point.
I want to shift gears about a bill I have with Senator Warren on
the Retirement Savings Lost and Found Act. This really gets back
to retirement policies to help Americans ensure that they are sav-
ing for their retirement. This bill recognizes, as people switch
jobs—which Americans are doing at higher rates than ever be-
fore—many unknowingly leave behind employer-sponsored retire-
ment savings accounts. This bill addresses the problem by requir-
ing Treasury and Social Security to create a national lost and
found registry, using data employers are already required to report
to the Treasury Department.
Dr. Yellen, would you support this concept? It is a bill I have
with Senator Warren. And would you commit to working together
to make sure this will be administered smoothly by the Treasury?

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Dr. YELLEN. Absolutely. I think it is an important objective that
you have outlined there. And if it does become law, of course we
will do everything possible to make sure that it is implemented ef-
fectively.
Senator DAINES. Okay. Dr. Yellen, I am out of time. Thank you
for your answers.
Senator CRAPO. Thank you.
Senator Casey?
Senator CASEY. Thank you, Mr. Chairman. Dr. Yellen, thank you
for your service to the American people again, and for——
Dr. YELLEN. I am sorry, I cannot hear you.
Senator CRAPO. Senator Casey, can you hear us?
Senator CASEY. I can hear you.
Senator CRAPO. Oh, we can hear you again. Why don’t you start
again.
Senator CASEY. Okay. Well, Doctor, thanks so much. I hope you
can hear me.
Dr. YELLEN. Now I can hear you.
[Pause.]
Senator CRAPO. Senator Casey, we cannot hear you anymore.
Can you hear us?
[Pause.]
Senator CRAPO. I take it that we have a technical difficulty.
When we can get Senator Casey back connected, we will return to
him.
Is Senator Whitehouse—I think he had to step out——
Senator WHITEHOUSE. No, I am here.
Senator CRAPO. Oh, good. Go ahead, Senator Whitehouse.
Senator WHITEHOUSE. Okay, great. Bob, I am sorry to bump you.
I hope your technology improves. Dr. Yellen, welcome back. It is
good to be with you.
The American political system right now is rotten with dark
money. Anonymous donors are all over our political system with
huge contributions that have been aptly described as a tsunami of
slime flowing through our country. ProPublica has chronicled the
inconsistent statements made by some of these groups between
what they report to the IRS and what they report to election offi-
cials. Both statements are under oath, so when they are incon-
sistent, that raises a red flag.
I just wanted to flag for you that when you are confirmed, I in-
tend to ask you to direct a review of the IRS 501(c) policies. Be-
cause it is my belief that for a long time the policies of the IRS
have been very misaligned with a statutory direction that Congress
gave the IRS over these agencies, and that to a degree, the IRS
was bullied into taking these non-statutory positions because there
was so much blowback from the dark money forces and from their
mouthpieces when they tried to intervene.
I think the 501(c) problem, and the extent to which anonymous
money is now interfering in our politics, is deadly serious. And I
hope when I ask you, you will take an honest look at this and not
appoint someone to do it who will give it a whitewash, and instead
take a really good, hard look at what went wrong.
Dr. YELLEN. Senator, I would be very glad to work with you on
that. You are pointing to a very disturbing situation, and I will

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need to get up to speed on where things are with that. But I would
be glad to initiate a serious review of this matter.
Senator WHITEHOUSE. Good. Another serious matter is Freddie
Mac warning of a coastal property value crash around the country
because of climate change-driven sea-level rise; 40 sovereign banks
warning of systemic global risk to the economic system from cli-
mate change; economists warning of a carbon bubble that will clob-
ber the U.S. economy.
And given how serious all of that is, I am wondering where your
senior-level climate person will be in the Department of Treasury.
There is no specific office. How are you going to staff addressing
climate at the most senior levels of Treasury?
Dr. YELLEN. Well, I will look to appoint someone at a very senior
level to lead our efforts and to create a hub within Treasury in
which we particularly focus on financial system-related risks and
tax policy incentives toward climate change.
I think we need to seriously look at assessing the risks to the fi-
nancial system from climate change. The Federal Reserve has re-
cently said that they would be joining the network of supervisors
for greening of the financial system. There are methodologies to do
that, and we will focus on that.
Senator WHITEHOUSE. In a word or two, how seriously do you
think we should take Freddie Mac’s warnings of coastal property
value crash, the sovereign bank warnings of systemic risk, and so
many economists’ warnings of a carbon bubble crash?
Dr. YELLEN. I think we should take these risks very, very seri-
ously. I think climate change is an existential threat, and both the
impact of climate change itself, and policies to address it, could
have major impacts creating stranded assets, generating large
changes in asset prices, credit risks, and so forth that could affect
the financial system. So these are very real risks.
Senator WHITEHOUSE. And systemic risk is a mild phrase, but it
conveys a very powerful message, does it not?
Dr. YELLEN. Yes, it does. I agree with you.
Senator WHITEHOUSE. Last question: I believe that foreign cor-
ruption and kleptocracy are inimical to our national security inter-
ests. For too long, the U.S. has been a haven for international cor-
ruption and kleptocracy through our shell corporations. With in-
tense leadership from Mike Crapo—who I want to give a big shout-
out to here—and Sherrod Brown, we got into the national defense
bill the Beneficial Ownership Reform Incorporation Transparency
bill, another tedious name for something that is actually very bru-
tal and essential. And I am interested in who you think will lead
the effort of cleaning up that mess using this new statute within
Treasury, and how high up within Treasury you will place respon-
sibility for cleaning up the dark money shell corporation problem
that America has fomented.
Dr. YELLEN. So let me start by saying that this is a very impor-
tant problem and that the act that was recently passed by Con-
gress gives us an enormously potent tool to address this problem.
We will try to get up and running as quickly as possible and de-
vote ourselves to building that database so that we can address
these issues. And we will be certainly looking to give this very high
priority.

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Senator WHITEHOUSE. You agree it has a national security di-
mension?
Dr. YELLEN. Absolutely.
Senator WHITEHOUSE. That is it for me. Thank you very much,
Dr. Yellen. I really look forward to working with you, and to Bob
Casey, my apologies for jumping ahead of you.
Senator CRAPO. Thank you, Senator Whitehouse.
Senator Portman?
Senator PORTMAN. Thank you, Mr. Chairman. And to Dr. Yellen,
thank you very much for your time you gave me recently to talk
about many of the issues that I know have come before the com-
mittee today. I am going to revisit one that I am sure has been
talked about, which is the fiscal discipline question. A Treasury
Secretary can be very powerful within an administration, providing
a voice for fiscal sanity, and I would urge you to do that.
Our conversation was about the relatively low interest rate envi-
ronment and the fact that you think that investments are needed,
and that going into further deficits and adding to our debt is appro-
priate. I would hope, again, that although we do have relatively
low rates today, knowing that that could change, we should not get
too comfortable with that, and second, that we have historic levels
of deficits now, and as a percent of our GDP, not seen since World
War II, which is frightening.
One quick story. When I was OMB Director under the Bush ad-
ministration—this is a long time ago, 14 years ago—I wanted to
propose a balanced budget over 5 years. And there was an ability
to do that, only 14 years ago. Think about that, a balanced budget
not over 10 years, over 5 years in the budget.
There was quite a debate in the administration at the time and,
frankly, I think I was on the losing end of it until somebody
weighed in. And that was Hank Paulson, who was then Secretary
of the Treasury. And I will always be grateful to him for that. I
think it was the right thing to do. At least it showed that we could
get to a balanced budget by making some tough decisions, and the
Treasury Secretary obviously was someone whom people were lis-
tening to from an economic point of view.
So with that, I do not know that I have posed a question, but
I would love to hear your response to what you see as your respon-
sibility to be a voice of fiscal sanity within the administration.
Dr. YELLEN. I completely agree with you, Senator Portman, that
the Treasury Secretary has to be a voice for fiscal sanity. And I
pledge—I pledge to do that. Our finances need to be on a sustain-
able, long-run course, and that is very important for us to focus on.
I pledge—I pledge to do that.
Right now, short-term, I feel that we can afford what it takes to
get the economy back on its feet, to get us through the pandemic,
and to relieve the burdens that it is placing on households and
small businesses. And research from other countries suggests that
often spending money to address a weak economy ends up creating
a lower debt burden in the long run than failing to provide that
support. So that will be my focus in the short run: getting the econ-
omy back on its feet.
But longer-run, there are challenges in achieving fiscal sustain-
ability. We have to make sure ultimately the deficits that we run,

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if we do that, are consistent with fiscal sustainability. The world
has changed. I believe the future is likely to bring low interest
rates for a long time, but of course it is a risk that interest rates
can rise. And we need to consider that risk as well in crafting a
sustainable and responsible policy.
Senator PORTMAN. Thank you. I will look forward to working
with you on coming up with ways to deal with that long-term struc-
tural deficit, because we all know about it. We all know it is there.
It is the mandatory spending side of the ledger. And I have talked
to you about this in our conversations privately, but I do look for-
ward to working with you on that.
The Tax Cuts and Jobs Act was passed in 2017, and the result-
ing economic improvements were dramatic. We had, as of Feb-
ruary, as I recall, 16 straight months of wage gains of 3 percent
or more, before COVID hit. It is unbelievable. We had a poverty
rate at record levels since poverty rates began to be measured back
in the 1950s. We have never had a rate as low as we had going
into the pandemic. Obviously unemployment was low, historically
low for many groups, including blacks, Hispanics, and others.
So this is a good thing. We had an opportunity economy that
many of us talk about, but it actually was happening. And I think
a lot of it was because of the investment that businesses were mak-
ing, small and large alike, because of the tax reform that really
made it more advantageous to invest in America: $482 billion in
equipment, buildings, and—most importantly to me—employees by
U.S. businesses during this time period after the 2017 bill and be-
fore the pandemic hit.
Let me ask you, if I could, about one part of that. And that is
the corporate rate. My understanding is that President-elect Biden
has talked about raising the corporate rate, and also raising the
amount of taxes that one would pay for global income, both of
which I think are going to result in less investment in the United
States. The whole reason we lowered the rate was to be sure we
were more or less competitive with the rest of the developed world.
Our rate is still, frankly—when you include the State income tax—
higher than the average, but it is at about the average, whereas
before, we had the highest rate among all the developed countries.
And what people were doing was investing overseas, not in Amer-
ica. We were losing jobs, and we were losing businesses. Companies
were inverting, we were losing investment, and much of that has
started to come back. It has been a good thing.
The bill introduced a concept of not just lower rates, but also this
global intangible low-tax income, the GILTI regime, which is very
complicated, but basically it is anti-base erosion, meaning that it
effectively acts like a minimum tax on foreign earnings of U.S.
companies. Prior to that, companies could just defer their taxes for-
ever because our rates were so high people would defer, and defer,
and defer. Now they have to pay it. And you know, it is kind of
a minimum tax.
The high U.S. tax rate we had before made the deferral nec-
essary, but it also caused this lock-out of foreign earnings as a bar-
rier to U.S. investment, again creating incentives for acquisitions
of U.S. companies by foreign companies that could get a better
deal.

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So we both lowered the rate and eliminated deferral. As a result,
we have created a more level playing field. I just am worried about
these proposals to both increase the corporate tax and to double the
rate, as I understand it, on GILTI, on this minimum tax, from 101⁄2
to 21 percent. It would put us again in a noncompetitive situation
relative to our OECD trading partners. And you know, the OECD
right now is considering a global minimum tax rate of 12.5 percent.
So they are going the opposite way, because they get it. This cre-
ates more jobs in their countries.
So I hope that you will push back against that, understanding
that you may not approve all of the tax cuts and tax reforms that
were in there, but certainly on the business side, this created an
incentive to invest in America.
Senator CRAPO. Senator Portman——
Senator PORTMAN [continuing]. The ability to write off your in-
vestment.
Senator CRAPO. Senator Portman, we are on a time schedule
here because another committee needs to take this room. So could
I ask that to be a question for the record?
Senator PORTMAN. Well, I would love to hear your response in
the record for that. Again, I appreciate our conversation on that
and other issues, and I look forward to hearing from you. Thank
you.
Senator CRAPO. And, Dr. Yellen, I know you have responded to
that type of question a couple of times, but if you could give a very
thorough response to the question for the record, because I thought
that was a very well-stated question——
Senator PORTMAN. Thank you, Mr. Chairman.
Senator CRAPO. Thank you.
Next we will return to Senator Casey.
Senator CASEY. Mr. Chairman, you can hear me now?
Senator CRAPO. Yes. We got it.
Senator CASEY. Thanks. Dr. Yellen, thank you for your willing-
ness to serve the American people again. We are grateful for that.
I wanted to focus my questions, maybe two broad questions,
mostly on children. But they will touch on other issues as well.
First of all, the role of both child care and early childhood edu-
cation, talking about early care learning, the importance of that to
the economy—and in particular to labor force participation by
women, which we know is a major challenge we have. The pan-
demic has exposed the importance of caregiving on our economy:
those who care for and support children, who support and care for
seniors and people with disabilities. We are seeing more clearly
now, probably than ever, the importance of quality, affordable care
for those Americans, and the connections between that care and
our economy.
In President-elect Biden’s American Rescue Plan, he included a
provision very close to my bill, the Child and Dependent Care Tax
Credit, the expansion of that. So I just wanted to ask you about
both the question of child care and the care economy as an eco-
nomic imperative to the country.
If you could, discuss your ability to elevate this issue, both as it
relates to COVID–19 as well as the importance in terms of the
short- and long-term competitiveness of our economy.

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Dr. YELLEN. Well, thank you for that question, Senator. I feel
this is a really critical area, both because of the pandemic and
longer-term. The availability of child care and paid leave greatly af-
fects the ability of women to participate in the labor force. And
once upon a time, we had one of the highest labor force participa-
tion rates for women of any developed country, and that has really
changed, and we are no longer anywhere near the top.
And where we stand out is that the United States does much less
on the front of child care and paid leave than most other developed
economies. And I agree that the competitiveness of our economy
and wanting women to be able to participate is really critical to ad-
dress the shortages, and it has been more than evident in the pan-
demic. It is women who have suffered a disproportionate loss in
jobs, who have a disproportionate burden of caring for children who
are out of school, and for relatives who are ill and need help. And
it has really impacted them mightily because of a lack of these sup-
ports.
Senator CASEY. Well, I appreciate that, because it is, I think,
very much apparent now because of the pandemic how important
those programs are, and those strategies for caregiving.
My last question, before my time runs out, Dr. Yellen, is about
kid savings accounts. This has been an idea that has been around,
proposed over the last 20 years. I have worked with Senator Wyden
on the Young American Savers Act. It is a measure that I pro-
posed, a similar measure in the debate on the 2017 tax bill. The
Democrats all voted for it.
I think it is time, finally, to enact this savings account to support
equity building for our Nation’s kids so we can also at the same
time support emergency savings for their parents.
Could you discuss briefly—and I know we only have less than a
minute left—the role of asset building in securing the middle class?
Dr. YELLEN. Well, just very briefly, Senator, I certainly agree
that assets are not only essential for people in dealing with an
emergency, it is shocking that such a large fraction of Americans
would not have $400 to deal with an emergency. And it is nec-
essary for home ownership, for business formation, for saving. And
we have huge wealth disparities—even greater than income dis-
parities—and a racial wealth gap has also worsened over time.
So looking for strategies to address that gap and promote asset
building, I think should be very much at the forefront of policy.
Senator CASEY. Well, Dr. Yellen, thanks so much. Good luck in
your confirmation. I will have some other questions for the record.
Thank you, Mr. Chairman.
Dr. YELLEN. Thank you, Senator.
Senator CRAPO. Thank you, Senator Casey.
Senator Hassan?
Senator HASSAN. Well, thank you, Mr. Chairman and Ranking
Member Wyden, for holding this important hearing and doing it
today. Thank you, Dr. Yellen, for appearing before the committee,
and for your willingness to serve our country during this difficult
time. Having someone with your expertise at the Treasury is going
to be pivotal to helping struggling families and businesses as we
work to contain the virus, protect and create jobs, and rebuild the
economy.

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I have three questions that I think we can cover in our time. As
we discussed when we met earlier this month, Dr. Yellen, I am
working on a bipartisan effort with Senator Young to expand the
research and development tax credit for small businesses. New
businesses and innovative startups are a major source of job cre-
ation, which is going to be key to rebuilding our economy after we
contain the virus.
Dr. Yellen, could you speak to the importance of R&D invest-
ments to creating jobs and to the economic recovery? And at the
Treasury, will you work with us to explore ways to support R&D
through the tax code?
Dr. YELLEN. Thank you, Senator. Certainly I look forward to
working with you. This is a very important matter. R&D is essen-
tial to innovation and to the growth of our economy. It has made
a huge contribution. And I think you are absolutely right that new
businesses, and innovative businesses, have driven job creation.
So finding ways to support R&D investments, including by small
or new businesses, is something I look forward to working with you
on.
Senator HASSAN. Well, thank you, Dr. Yellen. As we continue to
assist struggling businesses to keep their employees on payroll, we
also need to strengthen support for the risk-takers and innovators
who create new jobs and help us grow the economy.
Toward that end, the recent economic relief package contained a
bipartisan bill that I introduced with Senator Burr to allow small
businesses to both participate in the Paycheck Protection Program
and to claim the Employee Retention Credit. Unfortunately, accord-
ing to the National Federation of Independent Businesses, one of
the supporters of our bill, many small businesses remain unaware
that they can receive up-front payments of the Employee Retention
Credit to help keep workers on payroll and cover employee health-
care costs.
Dr. Yellen, how can Treasury increase awareness of the Em-
ployee Retention Credit so that small businesses can quickly and
effectively receive the full range of economic relief available?
Dr. YELLEN. Well, Senator, first let me say that I think allowing
these businesses to utilize both PPT and the Employee Retention
Credit was a very worthwhile innovation and should really help a
lot of businesses. So we want to make sure that they know about
it.
I will discuss this, I promise, with the IRS to see if there is some-
thing that they can do, but perhaps we can also work with non-
profits and with groups like the Federation for Small Businesses to
see if we can find ways to publicize it so that they are aware that
this is a benefit that is available.
Senator HASSAN. Well, thank you. I think this is an important
factor in helping us accelerate the recovery and protecting jobs. So
thank you for your willingness to work with us on that.
I want to switch topics a little bit to the issue of terrorist financ-
ing. In previous Finance hearings with outgoing Secretary
Mnuchin, I have raised the importance of Treasury programs that
combat the financing of terrorist and criminal organizations. The
bipartisan National Defense Authorization Act passed earlier this
month included a provision led by Senator Warner that established

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an advisory group with Treasury to counter new ways that terror-
ists use emerging financial technology. One area of growing con-
cern, for example, is the potential for terrorists and criminals to
use cryptocurrency to finance their activities.
So, Dr. Yellen, can you outline some of these emerging techno-
logical concerns and how Treasury should combat new forms of ter-
rorist criminal financing?
Dr. YELLEN. Senator, I think you are absolutely right that the
technologies to accomplish this change over time, and we need to
make sure that our methods for dealing with these matters of ter-
rorist financing change along with changing technology. Crypto-
currencies are of particular concern. I think many are used, at
least in the transactions sense, mainly for illicit finance, and I
think we really need to examine ways in which we can curtail their
use and make sure that anti-money-laundering does not occur
through those channels.
Senator HASSAN. Thank you, Doctor. Thank you, Mr. Chairman.
My time is up. I look forward to working with you, Dr. Yellen.
Dr. YELLEN. I look forward to working with you as well.
Senator CRAPO. Thank you. And next is Senator Cortez Masto.
Senator CORTEZ MASTO. Thank you, Mr. Chairman——
Senator WYDEN. Senator Crapo, with leave from my colleague
from Nevada, and in no way taking from her time, I would just like
to take maybe 90 seconds to describe where I think we are with
respect to the Yellen nomination. I hope that will be acceptable to
my colleague from Nevada. I will be very quick, and this does not
come off of her time.
Senator CRAPO. Yes.
Senator WYDEN. The majority and minority have been talking,
and we now have an agreement that Senate Finance Committee
members will have their questions in for the nominee tomorrow.
Senator CRAPO. Close of business tomorrow.
Senator WYDEN. Close of business tomorrow. So my hope would
be, Senator Crapo, that we could have Chair Yellen on the floor of
the United States Senate on Thursday. And obviously we are tak-
ing it a day at a time, and we have made some headway here in
the last hour regarding deadlines for member questions. I mean,
this is a person who has been confirmed again and again and
again, and all these past Treasury Secretaries are in support of
her. So I appreciate the discussions that we have had in the last
hour. We have made some progress. I hope she will be on the floor
on Thursday. Thank you.
Senator CRAPO. Well, thank you, Senator Wyden. And I will talk
with Senator Grassley, and we will work with members on our side
to work expeditiously. Thank you.
Now, Senator Cortez Masto.
Senator CORTEZ MASTO. Thank you. Thank you, Mr. Chairman.
Dr. Yellen, congratulations. Thank you for the courtesy meeting
last week. I am going to try to keep it brief. It has been a long
morning and afternoon for you, and I thank you so much for your
patience. I enjoyed listening to all of your responses to my col-
leagues.
Two issues: hospitality—and we have talked about that. And the
other is housing. So let me just talk a little bit about—as you well

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know, in Nevada we have been so hard-hit. Before the pandemic,
the travel and tourism industry was one of the largest sectors of
the economy. In 2019, travel generated $1.1 trillion in spending
and supported 15.8 million American jobs. But the COVID–19 pan-
demic has devastated the travel industry more than any other sec-
tor of the economy. And according to Oxford Economics, the U.S.
lost $510 billion in travel spending and 4.5 million travel jobs in
2020.
So my question to you is, what are your recommendations for ad-
dressing this hardest-hit service sector and its workers, like those
in Nevada and across the country?
Dr. YELLEN. Well, Senator Cortez Masto, I am really aware of
just how badly the Nevada economy has been impacted by the pan-
demic because of the focus on travel, tourism, leisure activities.
This is, as you said, the hardest-hit sector with the most pain and
job loss, and getting this pandemic addressed and over with so peo-
ple can go back about their lives and travel and enjoy leisure ac-
tivities is top of the agenda—and in the meantime, making sure
that we support the workers and the businesses that have been so
badly affected, giving them what they need to get through this and
come out the other side, and to help State and local governments
in a variety of ways reopen schools and make sure that you do not
have to fire emergency workers because of the budget pressures
that your State faces, and others.
Senator CORTEZ MASTO. Thank you, Dr. Yellen. Let me be a little
bit specific. Last fall, Senator Cramer and I introduced a bipartisan
bill. It is the Hospitality and Commerce Job Recovery Act. What it
does is, it provides refundable tax credits for businesses and indi-
viduals to boost demand for travel, once it is safe to travel again.
I am curious what your thoughts are. Can tax credits be an effec-
tive tool to incentivize spending and help certain sectors like the
service sector and travel sector recover and the economy turn
around?
Dr. YELLEN. Well, Senator, I would be glad to take a look at that
and work with you and examine the details more fully.
Senator CORTEZ MASTO. I appreciate that. Thank you.
As you said in your introduction, you know that the sector, par-
ticularly the service sector, has been so disproportionately im-
pacted, we need to continue to provide relief and investments in
this sector. So I am hopeful that you and the Biden administration
will work with us moving forward.
Housing—I know I have about a minute left. Let me ask you
this—and this was an issue. Nevada is literally dealing with an af-
fordable housing crisis that started even before this pandemic. I
know it is happening across the country. And we talked a little bit
about this.
Could you really address how the Treasury Department can work
with us, as well as the Biden-Harris administration, to address
what we see in the affordable housing crisis across the country?
Dr. YELLEN. It is a huge problem, Senator. And we really need
to devise effective ways to work on this and support affordable
housing. Things like the Low-Income Housing Tax Credit, I think,
have been very important, and we will need to come up with other

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innovative strategies. This really is a crisis in many parts of the
country.
Senator CORTEZ MASTO. Well, I know my colleague, Senator
Cantwell, mentioned this to you as well during this hearing. I look
forward to working with you, as well as the Biden administration,
to address this issue.
Thank you again for your willingness to serve.
Dr. YELLEN. Thank you, Senator. I appreciate it.
Senator CRAPO. Thank you, Senator Cortez Masto.
Senator Young?
Senator YOUNG. Dr. Yellen, it is good to see you again. I enjoyed
our visit the other day. Congratulations once again on your nomi-
nation.
Dr. YELLEN. Thank you.
Senator YOUNG. I would like to ask you, for starters, some ques-
tions about our hardest-hit businesses. You know, it has been wide-
ly reported that we are in the midst of a K-shaped recovery where
Wall Street is doing pretty well. So many of our small businesses
are doing well. In fact, we have seen record profits from a number
of them. Meanwhile, a number of our Main Street firms are, if not
hollowed out, certainly just pockmarked with businesses that are
shuttered on account of this pandemic and associated public health
measures.
In your July 17th testimony before a House subcommittee, you
indicated, Doctor, that there would be scars left on the economy.
And by that I infer you probably meant an erosion of skills in our
workforce, a loss of innovation that tends to occur among the small
firms, to say nothing of the future opportunities for growth.
In the State of Indiana, it is estimated that one in four small
businesses faces closure, including generations-deep family busi-
nesses that have really become pillars within given communities.
So there is a social and cultural dimension to this as well. That’s
all if economic conditions do not improve.
Blessedly, we have invented these vaccines, and the economy will
be opening up. And we have a relief package that we came together
on and passed for the American people before year’s end. In light
of that relief that we have offered, it seems to be making a dif-
ference. There seem to be some sunnier days ahead.
What do you expect the need to be for additional small business
assistance? And why do you expect that need to exist to a par-
ticular level?
Dr. YELLEN. Well, unfortunately, I fear we have some very dif-
ficult months ahead before the vaccine has been widely enough dis-
seminated to really open up the economy and let people get back
to their regular lives of going out to eat in restaurants, and engag-
ing in entertainment, and things that involve face-to-face contact.
So I think the PPP funding included in the last bill is tremen-
dously important. We are going to do everything we can to work
with the Small Business Administration to get that support out as
quickly and as effectively as we can.
These small businesses are the lifeblood of their communities
and provide a disproportionate share of jobs in America. And so
supporting them—I think of scarring as not only affecting workers,
but when businesses fail that have been the backbones of their

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communities, that is permanent job loss for workers and a tragedy
for the communities.
So this is certainly something we want to do. And if more fund-
ing is needed, we would come back and ask for that. We have
asked for some money for grants to the smallest businesses, and
some funding to support State and local nonprofits in getting as-
sistance out.
Senator YOUNG. Well, and I have to say, that seems prudent to
me, Doctor. It is my sense, informed by conversations with people
on the ground as well as economists, that there will be additional
assistance needed for some of our hardest-hit businesses. But we
are going to have to continue to monitor that. I think that is the
right approach.
I also sense it is prudent—again after consultation with others—
to hold off certain campaign promises that might have been made,
and I want to get your perspective on that, in particular, tax in-
creases in the middle of a global pandemic which has triggered this
massive economic downturn.
Dr. YELLEN. So the focus now is not on tax increases. It is on
programs to help us through the pandemic. But we also, the
President-elect also wants to pursue his Build Back Better agenda
to strengthen the economy and make sure that we create good jobs
at good wages for workers and invest in infrastructure and our peo-
ple. And in that context, there may be a need for additional financ-
ing. We should not think about tax increases in the abstract. I
think anything that is proposed should be focused on corporations,
and on individuals, and in the context of a larger program.
Senator YOUNG. Yes, Doctor. So I will not focus on the abstract.
Let me get very particular. Are there any elements of the revenue-
raising portions of the Build Back Better plan that you believe
should be reconsidered?
Dr. YELLEN. I am not sure what you have in mind. There have
been a few things that have been specified, but probably not a com-
plete program. President-elect Biden has proposed increasing the
corporate tax and making American companies that offshore jobs,
reducing those incentives, and in doing that, I think worrying
about the competitiveness of American business would propose to
do this in the context of global agreements on corporate minimum
taxes.
Senator YOUNG. I am grateful for the answer. I will have to prob-
ably submit some follow-up questions for the record pertaining to
the loss of jobs. But should companies invert—that is, send their
headquarters overseas to have lower tax rates—which was one of
the reasons that the rate was lowered initially, but nonetheless——
Dr. YELLEN. We need to avoid that, for sure.
Senator YOUNG. Yes. Good. We agree on that as a matter of prin-
ciple.
You and I discussed my proposal with Senator Bennet to create
a long-term working capital loan program for our hardest-hit busi-
nesses. It is called the RESTART Act. Sixty bipartisan co-sponsors
were earned here in the United States Senate, roughly 180 in the
House of Representatives, and thousands of small businesses in In-
diana and across the country were supportive of this.

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To the extent we need additional small business relief, and you
have indicated we might, is this something that you might work on
with me and Senator Bennet to try and perfect and perhaps imple-
ment in a bipartisan way?
Dr. YELLEN. Absolutely; I would look forward to working with
you on that.
Senator YOUNG. Thank you so much.
Senator CRAPO. Thank you, Senator Young.
Senator Sasse?
Senator SASSE. Thank you, Mr. Chairman.
Dr. Yellen, congratulations on your nomination, obviously an im-
portant capstone to a very distinguished career.
I want to focus on a set of topics that involve the national secu-
rity equities of the Treasury Department, more than some of the
topics of the last couple of questions. It is my view that whenever
the Senate is fulfilling our advice and consent obligations with re-
gard to any senior position that has national security equities, one
of our obligations is to make sure that the nominee in question re-
gards herself or himself as having a national security portfolio.
And secondarily, I think is it clear that there is a bipartisan con-
sensus in the Senate now—I come to you having just been in the
Intelligence Committee hearing, first open and then closed—and
the bipartisan consensus is overwhelming that the number one
long-term geopolitical threat the United States faces, not just in
the next 4 years but probably in the next 4 decades, is the Chinese
Communist Party.
So I want to ask you two questions about that first. Dr. Yellen,
do you believe that the Secretary of the Treasury is a national se-
curity position in the President’s Cabinet?
Dr. YELLEN. Absolutely. I think Treasury, along with the rest of
the administration, needs to stay laser-focused on that. We have
many tools that are implemented through Treasury to address na-
tional security concerns. The Treasury leads the CFIUS process,
and we have sanctions and enforcement actions that can serve to
dismantle financial and support networks of those who seek to do
us harm. And certainly leadership of Treasury is important, and it
is a priority.
Senator SASSE. Thank you. I am glad to hear you say that, Dr.
Yellen. Both the CFIUS point and the portfolio and sanctions re-
gime. I also in the past have chaired the subcommittee of Banking
that deals with sanctions. And I agree with you that you have a
very important and professional staff in that area, and I am glad
to hear that you regard it as a priority.
Do you regard the Chinese Communist Party as an existential
threat to the United States?
Dr. YELLEN. Well, I regard China as our most important stra-
tegic competitor, and feel it is necessary to devise an administra-
tion-wide and multi-faceted approach to address the threats that
China causes.
And certainly we need to target illicit activities that are linked
to theft of intellectual property and trade secrets, illegal efforts to
acquire critical technologies and sensitive U.S. data, and fentanyl
traffic, among other things.

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Senator SASSE. Thank you. I agree with your list. In addition, I
wonder if you would regard Chairman Xi and his regime as guilty
of genocide in Xinjiang at present?
Dr. YELLEN. I think it is guilty of horrendous human rights
abuses, yes.
Senator SASSE. Thank you. I do think the word, not to quibble
here—I will not make you respond precisely to the word ‘‘genocide,’’
but I think it is important for us to recognize what has been hap-
pening in Xinjiang is a genocide. And so it is not just one issue
among many, where we can sort of varnish it as merely a geo-
political competitor. Chairman Xi’s regime is evil, and they are rap-
ing and torturing Uigur women at present. So I think we need to
be well-aware of the nature of the regime we are dealing with.
Obviously one of the most important pieces for the purposes of
thinking about the future of the U.S. economy is the long-term
technology race we face with China. For years, American economic
and technological innovation have fueled the CCP’s mastery of the
digital economy, and then they have gone on to use that mastery
of the digital economy to do a parade of horribles, some of which
you just listed, importantly.
Could you walk us through how you think about a review of our
technological interdependence with China? And do you believe that
some degree of decoupling is going to be incumbent upon us in the
next 4 years?
Dr. YELLEN. Well, I think that we face a significant competition
with China. And to address the subsidies that China has put in
place, and other policies to erode our technological edge, I think
first and foremost we have to make sure that we as an economy
make the investments that enable us to compete with China, in-
vestments in manufacturing and infrastructure and training and
research and development, that are ultimately our sources of eco-
nomic strength.
But we need to aggressively counter unfair practices that China
uses, whether it is forced technology transfer or to invest in ways
in the United States that are dangerous to our national security.
Senator SASSE. Thank you. I agree with you that there are a
number of strategic areas where we are under-investing, from AI
to quantum to biotech to robotics, machine learning, et cetera. But
as relates to 5G in particular, and Huawei, could you use that as
a case study to walk us through kind of how you think our policy
should be unfolding in the 5G space, and how we should be trying
to bring together allies to battle the unfair practices that we see
from Huawei around the world?
Senator CRAPO. And, Senator Sasse, may I ask that you make
that a QFR? Because we are running against a tight deadline here.
Senator SASSE. Yes, Mr. Chairman. Dr. Yellen, I will make that
a QFR. And again, congratulations on your nomination, and we
look forward to working with you on these topics.
Dr. YELLEN. Thank you, Senator Sasse.
Senator CRAPO. Thank you, Senator Sasse.
We are running up against a tight deadline here, because we
have to have this room available for another committee. But we are
going to return to two Senators, Senator Toomey and Senator
Menendez, and then we will wrap up the hearing.

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And with that, Senator Toomey?
Senator TOOMEY. Thank you very much, Mr. Chairman.
Dr. Yellen, I want to talk just a little bit about housing reform,
housing finance reform, I should say, which I think in some ways
is the great unfinished business of the financial crisis. As you
know, the GSEs, Fannie Mae and Freddie Mac, are still in con-
servatorship, still perceived as too big to fail. Now they hold no
capital.
But Secretary Mnuchin and Director Calabria of the HFHA did
take some significant steps, it seems to me, steps in the right direc-
tion. While I would have preferred going further, at least there is
an end to the automatic profit sweep. There is the opportunity to
build up capital through retained earnings. There is a capital tar-
get now for the GSEs, and there are rules that are meant to limit
the acquisition of the riskiest loans by the GSEs.
Have you had a chance to look at these reforms? And have you
determined that you would support leaving them in place?
Dr. YELLEN. Senator Toomey, it is a very important matter.
Nothing is more important to the future of housing in the United
States than what we do with Fannie and Freddie. And I need to
look carefully at what has been put in place, and ultimately we
need to find a solution that has bipartisan support and to work
with Congress to craft an approach.
Senator TOOMEY. Okay. Will you commit to developing and re-
leasing reform principles both on the regulatory side as well as on
the legislative side?
Dr. YELLEN. We will certainly give priority to studying this issue
and coming up with ideas about what should be done.
Senator TOOMEY. Okay. And just quickly to follow up on a con-
versation we had the other day about the FSOC designations, you
know one of my concerns has always been that SIFI designations
raise the expectations of a taxpayer bailout, should a problem
occur. In a way, it designates these firms that are so designated
as too big to fail.
Interestingly, certain categories of financial institutions have not
been designated. And it occurs to me that certain business models
are inherently less of a risk to our financial system—for instance,
asset managers that simply hold assets on behalf of investors, as
opposed to banks that intermediate credit and transform maturity.
So asset managers have not been designated as SIFIs thus far.
Do you agree with the decision that has been made not to des-
ignate asset managers as SIFIs thus far?
Dr. YELLEN. Well, when I served on FSOC as Fed Chair, it was
proposed to look at activities that asset managers engage in that
might pose systemic risks. And a paper was issued that mentioned
problems of possibly looking at high-leverage and hedge funds. A
working group was formed that was to look at—I think it has since
been disbanded—the matter of whether or not some hedge funds
have dangerous levels of leverage. Open-ended mutual funds that
promise daily redemption and liquidity that invest in assets that
are relatively illiquid can pose problems.
And I think we saw some of those problems in March. I think
these are—this is an activities-based approach that FSOC was pur-
suing. And I thought that that was the right approach.

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So you know, I would hope to look again at some of those ap-
proaches.
Senator TOOMEY. I will just point out, the decision was made not
to designate them. And I think that was the right decision. And I
would point out that money market funds have been remarkably
stable and successful.
But I appreciate that, and I look forward to working with you on
these and other issues. Thank you, Mr. Chairman.
Senator CRAPO. Thank you, Senator Toomey.
Is Senator Menendez back? I am being told that he has not been
able to make it back. And so that will conclude the questioning.
Dr. Yellen, you have made it through to the end of the hearing.
I know this was a long day for you, and we appreciate the fact that
you are willing to serve. We congratulate you on your nomination.
And as you probably heard in some of the discussion, a number of
the Senators will want to submit to you questions for the record.
Some have already been stated here during the questioning period.
Others will be submitted in writing.
Those questions for the record are due by close of business to-
morrow. And as Senator Wyden indicated, the committee does want
to move expeditiously. So we ask you, Dr. Yellen, to please respond
to these questions for the record as quickly as possible.
We would like some thorough answers to all of these questions,
but please respond to these as quickly as possible.
And with that, again, Dr. Yellen, thank you so much for being
here with us today. And this hearing is concluded.
[Whereupon, at 1:22 p.m., the hearing was concluded.]

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APPENDIX
ADDITIONAL MATERIAL SUBMITTED FOR THE RECORD

PREPARED STATEMENT OF HON. CHUCK GRASSLEY,
A U.S. SENATOR FROM IOWA

Today, we welcome the Honorable Janet Yellen to consider an anticipated nomina-
tion for her to become Secretary of the Treasury.
The role of Treasury Secretary covers responsibilities over a large number of
issues, including taxes; fiscal management, including the debt; financial sanctions;
and economic policies. The Treasury Secretary also serves as Chair of the Financial
Stability Oversight Council, which has wide-ranging financial oversight and regu-
latory authorities. Dr. Yellen has a history in academics, think tanks, the Federal
Government, and at the Federal Reserve.
This hearing takes place in the midst of an ongoing pandemic along with signifi-
cant divisions in Congress and in the Nation. I hope we can move away from par-
tisan divisiveness and personalized attacks against each other. Dr. Yellen, if con-
firmed, you can be instrumental in helping generate an environment for bipartisan
efforts and reasoned debate.
You’ve expressed that you have interest in aggressively pursuing mitigation ef-
forts toward climate change, which you see as a global existential threat.
The incoming administration has also identified interest in raising taxes, coupled
with massive spending programs, and working to reduce income inequality. And
Senator Schumer has said that he’d like to change America. I’ll be interested in
hearing more about those and other things as we continue to consider your nomina-
tion.
As I’ve already indicated to you, I think it would be a big mistake to raise taxes
on individuals and businesses as they struggle through an economic recovery and
a pandemic. I know that the incoming administration has said they’d like to pursue
a two-pronged strategy, with a massive stimulus followed by tax hikes coupled with
even more spending, maybe on infrastructure.
We are already closely examining President-elect Biden’s proposal for around $1.9
trillion of stimulus, which even some prominent Democrat economists have said
does not seem to be well-targeted. With the trillions already in the pipeline, and
close to $1 trillion of relief enacted just a few short weeks ago, it is important to
focus efforts on pandemic relief. Now is not the time to enact a laundry list of liberal
structural economic reforms. Dr. Yellen, if you are confirmed, I hope that you will
work with us on the proposal.
Moving forward, President-elect Biden has stated numerous times that no one
making under $400,000 would see their taxes raised. For example, last year on
CNBC, Biden stated what we can think of as the new Biden Rule that ‘‘nobody mak-
ing under 400,000 bucks would have their taxes raised, period. . . .’’ While I don’t
think we need to be raising taxes, I will pay close attention to see that the incoming
administration abides by that new Biden Rule and doesn’t go after taxing small
businesses and the middle class.
On my part, let me tell you that I believe in free and fair trade, both internation-
ally and domestically. International trade is important for American business, and
especially important to the agricultural sector and farmers across America. I will
make sure that the incoming administration does not overlook the importance of ag-
riculture, or overlook the interests of rural America.
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I am against foreign countries trying to tap into the U.S. tax base with unilateral
digital services taxes, under their self-proclaimed ‘‘rights’’ to invade our tax base.
They don’t have that right.
I don’t support socialism, or Marxism, or so-called Democratic socialism that
would end with command-and-control policies. I also don’t support any rapid or
drastic wiping out of industries and their workers based mostly on ideology and
often on misleading analyses, with some notion of taking care of the carnage
through massive government income and wealth redistribution.
Prior to the pandemic, although there were economic and structural challenges in
the economy, we saw historic 50-year lows in unemployment rates, record lows for
gaps between minority unemployment and the overall unemployment rate, inclusive
growth with real wages growing fastest for low earners, record highs in real median
household income, stronger median income growth for minorities than others, and
reductions in income inequality and poverty.
While those are goals of Democrats, we did not hear much from them about these
accomplishments. Those accomplishments came about in an environment in which
tax burdens were lowered and made more progressive, and regulation was made
more efficient.
Instead of welcoming the accomplishments, we have heard from the other side
that we need to change America. I would like to see us continue with the accom-
plishments we saw prior to the pandemic.
Now, let me close with a comment on transparency. This committee has tradition-
ally expressed bipartisan interest in reminding all nominees that transparency is
important to our members. That means that I expect that you will respond to in-
quiries from any Senator on this committee, no matter which side of the aisle they
sit on. Prompt and thorough responses to our inquiries and investigations is what
we expect.

PREPARED STATEMENT OF HON. RON WYDEN,
A U.S. SENATOR FROM OREGON

Let me just say I share your views on the importance of cooperation between the
Treasury Department and members of this committee on both sides of the aisle. But
the fact is, the Treasury’s record on this matter over the past 4 years was beyond
dismal. Requests from my office were routinely met with useless, perfunctory re-
sponses, and in many cases my requests were outright rejected for flimsy reasons.
In fact, I believe Secretary Mnuchin’s responsiveness to requests from Democrats,
particularly in regard to requests for FinCEN information, merits continued over-
sight. At the same time FinCEN was stonewalling my and other Democratic col-
leagues’ requests, the agency was fast-tracking Republican requests.
I believe that under Chair Yellen’s leadership, there will be a return to the pro-
ductive relationship we expect between Treasury and the bipartisan members of this
committee.
This is the second time in 12 years that a Republican President will leave office
with the economy in ruins. Today there’s also a surging pandemic and armed troops
guarding the Capitol from far-right insurrectionist attack. The Biden administration
won’t begin with inaugural balls; it’ll begin with all-out triage.
My top economic priority going forward is avoiding the mistake Congress made
in the last recession—taking a foot off the gas pedal before recovery took hold. Con-
gress didn’t do enough in 2009 to help the unemployed and struggling homeowners.
If stepping off the gas wasn’t bad enough, 2 years later House Republicans passed
policies that yanked out the spark plugs and let the air out of the tires too. In Or-
egon, it took 71⁄2 years for unemployment to return to its pre-recession level. That
cannot happen again, or else millions and millions of people will go through years
of needless hardship. Some will never recover the lives they had prior to the pan-
demic.
Unemployment is once again rising. Federal Reserve data shows that workers of
modest incomes are facing Great Depression-level joblessness. One in five are out
of work. The President pushed a false choice between public health and economic
recovery, and now the country has neither.
The good news is, Chair Yellen is exactly the right person to lead the Treasury
Department through these big economic challenges. Nobody could be better qualified

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53
for this job. Nobody deserves more credit than Chair Yellen for the longest economic
expansion in our history, which lasted until the pandemic hit.
At the Federal Reserve, Chair Yellen challenged decades of conventional economic
wisdom that put too much focus on inflation and deficits. She was correct that
policy-makers needed to focus more on wages, employment, and inequality—and
that the economy safely could run a little hotter.
Republicans criticized her at the time, and later they tried to attribute her success
to the outgoing administration. But the numbers show the successes of Chair
Yellen’s approach. Unemployment went down, wages went up, and a lot of working
Americans were better off than they were before. Who better to lead the Treasury
Department and help kick-start the next economic expansion than the person who
was so integral to the last one?
Right out of the gate, the Biden administration and Congress need to send major
relief to America’s working families. Increasing relief checks to $2,000 is key. So is
extending enhanced unemployment benefits. At Leader McConnell’s insistence, the
December package reduced unemployment benefits from the CARES Act and ex-
tended them only until the middle of March. There are groceries in my refrigerator
that will last longer.
This is a common story in Washington: key economic lifelines expired, extended,
expired, extended. Congress cannot go on with this ‘‘snooze button legislating.’’ Our
workers and our economy need a government that’s reliable and predictable. That
means the Congress needs to tether the extension of unemployment benefits to eco-
nomic conditions on the ground with automatic triggers.
The tattered patchwork of State unemployment insurance systems also needs fix-
ing. States including Oregon were overwhelmed when the COVID crash hit. In other
cases it was because Republican lawmakers have intentionally hobbled their UI pro-
grams. Workers suffer because of it, particularly black and Hispanic workers. Con-
gress needs to increase base benefits, bring all workers into the system, and ensure
it can hold up in a crisis.
Congress also needs to fix our broken tax code, starting with the proposition that
corporations, millionaires, and billionaires must pay a fair share. I’m developing a
proposal to reform the taxation of capital gains for the top three-tenths of 1 percent
of taxpayers. My plan would equalize tax rates for wage and capital income and
minimize the benefit of deferring taxes.
If you’re a nurse taking care of COVID patients, you can’t defer your taxes—they
come straight out of every paycheck. But if you’re a billionaire, you can defer, defer,
defer—and then never pay any tax at all. My plan would put a stop to that unfair-
ness. The revenue would preserve the Social Security guarantee for decades to come,
with additional funding for other priorities.
The outgoing administration was big on corporate tax giveaways, and it increased
incentives to ship jobs overseas instead of eliminating them. I want to fix those mis-
takes.
The Treasury Department will have a key role to play on climate. Much of Amer-
ica’s energy policy is tax policy. There are currently 44 energy tax breaks on the
books. I have a bill to replace them with three focused incentives: clean electricity,
clean transportation, and energy conservation. I’m also developing legislation that
would make polluters pay for the costs of climate change, with a substantial portion
of the revenue returned directly to the American people through annual cash pay-
ments.
The Treasury Department also plays a big role in trade. Over the last 4 years,
the American people heard a lot of tough talk about trade, but the administration
failed to deliver on most of its big promises. It drove away our economic allies, iso-
lating us in the fight against trade cheats in China and elsewhere. Members of this
committee are also concerned about currency manipulation and other tactics used
to rip off American jobs.
I’m looking forward to working with Chair Yellen on all these issues and more.
With the country facing the worst economic crisis in a century, it’s critical that the
Senate approves her nomination on Day One. Everybody’s got a constitutional right
to foolishness, but nobody can honestly question Chair Yellen’s qualifications. It’s
a shame that this country has never had a woman Treasury Secretary. Anybody
who doubts Chair Yellen’s commitment to policies that give everybody a chance to
get ahead just hasn’t been paying attention.

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Chair Yellen, thank you for your willingness to return to public service. President-
elect Biden couldn’t have made a better choice.

LETTER FROM FORMER SECRETARIES OF THE TREASURY
We write today to encourage the swift confirmation of Dr. Janet Yellen as the 78th
United States Secretary of the Treasury. Our Nation faces urgent economic and na-
tional security challenges, and we believe that delaying the confirmation of our gov-
ernment’s principal economic official would create unnecessary risk during this crit-
ical time.
Unprecedented economic conditions have created immense hardship and threaten to
further undermine our security and prosperity. With millions of Americans out of
work, long-term unemployment rising, and activity stalled in large sectors of the
economy, daunting challenges will face the incoming administration. Addressing
these pressing issues will require thoughtful engagement by the Department of the
Treasury. Any gap in its leadership would risk setting back recovery efforts.
The Secretary of the Treasury also has a vital global role. As the chief economic dip-
lomat for the United States and an essential leader in international economic policy,
the Secretary not only represents our Nation to foreign governments and inter-
national bodies, but also can drive international cooperation to solve vexing global
issues. Between the recent turmoil in the United States and the magnitude and ur-
gency of international economic fallout from COVID–19, our allies are looking for
reassurance that our country will be a trusted and reliable partner. Any delay in
confirming Dr. Yellen will only allow concern and confusion to grow among our al-
lies.
Beyond domestic and international economic leadership, the Secretary of the Treas-
ury is also a critical participant in law enforcement and national security efforts.
Treasury leads the country’s efforts to monitor and combat financial crimes, ter-
rorist financing, and other illicit financial activity among state and non-state actors.
The threats to our national security from those who seek to exploit financial sys-
tems or evade sanctions are real and require sustained attention. At a time when
our Nation’s adversaries are actively looking for national security vulnerabilities,
any gaps in leadership at Treasury will only serve to embolden them.
Finally, a word about Dr. Yellen. As former Treasury Secretaries, we are well-aware
of the demands of the job and the steepness of the learning curve for new officials.
It is our view—based on personal experience for many of us—that Dr. Yellen’s expe-
rience, knowledge, judgment, and character make her uniquely qualified for this
role. Our assessment of her integrity and ability is widely shared, including by the
Senate, which has confirmed her several times, including most recently in 2014, and
before which she has regularly testified. It is hard to imagine a better-prepared
nominee to meet this great moment of need than Dr. Yellen. We urge the Senate
Committee on Finance to move expeditiously to report her nomination to the full
Senate to allow a highly qualified public servant to take up her urgent responsibil-
ities.
Sincerely,
George P. Shultz John W. Snow
James A. Baker III Henry M. Paulson, Jr.
Robert E. Rubin Timothy F. Geithner
Lawrence H. Summers Jacob J. Lew

PREPARED STATEMENT OF HON. JANET L. YELLEN, PH.D.,
SECRETARY-DESIGNATE, DEPARTMENT OF THE TREASURY
Chairman Grassley, Ranking Member Wyden, members of the committee, it is an
honor to appear before you. And, Senator Feinstein, thank you for that very kind
introduction.
I have immense respect for the task before this committee: rebuilding the Amer-
ican economy from its sharpest downturn in history. If I am fortunate enough to
be confirmed, I would strive to be a good partner in that work. I’ve spent almost
my entire life thinking about economics and how it can help people during hard
times.

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My father was a doctor in Bay Ridge, Brooklyn. It was more of a working-class
neighborhood back then. His patients would take the bus up from their jobs at fac-
tories or docks, and they’d come to our stoop because that’s where my dad’s office
was—in our basement.
He was the kind of doctor who treated the whole patient. He knew about their
lives; about when they’d been fired or couldn’t pay. Those remain some of the clear-
est moments in my childhood. My parents had been children of the Depression, and
they had a very visceral reaction to economic hardship.
Economics is sometimes considered a dry subject, but I have always tried to ap-
proach my science the same way my father approached his: as a means to help peo-
ple. And this committee, I believe, has viewed it the same way—especially during
these last few months. When economists look back on the pandemic, I expect they’ll
conclude that Congress’s actions averted a lot of suffering.
But more must be done. Economists don’t always agree, but I think there is a con-
sensus now: without further action, we risk a longer, more painful recession now—
and long-term scarring of the economy later.
The pandemic has caused widespread devastation. Whole industries have paused
their work. Eighteen million unemployment insurance claims are being paid every
week. Food bank shelves are going empty. The damage has been sweeping, and as
the President-elect said last Thursday, our response must be too.
Over the next few months, we are going to need more aid to distribute the vac-
cine, to reopen schools, and to help States keep firefighters and teachers on the job.
We’ll need more funding to make sure unemployment insurance checks still go out,
and to help families who are at risk of going hungry or losing the roof over their
heads.
Neither the President-elect, nor I, propose this relief package without an apprecia-
tion for the country’s debt burden. But right now, with interest rates at historic
lows, the smartest thing we can do is act big. In the long run, I believe the benefits
will far outweigh the costs, especially if we care about helping people who have been
struggling for a very long time.
People worry about a K-shaped recovery, but well before COVID–19 infected a
single American, we were living in a K-shaped economy, one where wealth built on
wealth while working families fell further and further behind. This is especially true
for people of color.
At the Fed, I became accustomed to the institution’s dual mandate—to promote
stable prices and maximum employment. As Treasury Secretary, I think there will
be a dual mission too: helping Americans endure the final months of this pandemic
and keeping people safe while getting them back to work. That’s our first task. But
then there is the longer-term project. We have to rebuild our economy so that it cre-
ates more prosperity for more people and ensures that American workers can com-
pete in an increasingly competitive global economy.
Members of the committee, these are very ambitious goals, and I know we will
need to work together. You can count on me to do that in a bipartisan way.
My husband and son are watching us on C–SPAN from the other room. They are
not only wonderful people, they are also wonderful—and opinionated—economists
themselves. So I am used to debate about these issues in the house. I’d welcome
it in the Senate.
Thank you, and I look forward to your questions.

SENATE FINANCE COMMITTEE

STATEMENT OF INFORMATION REQUESTED
OF NOMINEE
A. BIOGRAPHICAL INFORMATION
1. Name (include any former names used): Janet Louise Yellen.
2. Position to which nominated: Secretary of the Treasury.
3. Date of nomination: November 30, 2020 (date of announcement of nomination).

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56
4. Address (list current residence, office, and mailing addresses):

5. Date and place of birth: August 13, 1946, Brooklyn, New York, United States.
6. Marital status (include maiden name of wife or husband’s name):

7. Names and ages of children:

8. Education (list all secondary and higher education institutions, dates attended,
degree received, and date degree granted):
Fort Hamilton High School, 1961–1963 (diploma received May 1963).
Brown University, B.A., 1963–1967 (degree received May 1967).
Yale University, Ph.D. economics, 1967–1971 (degree received December 1971).
9. Employment record (list all jobs held since college, including the title or descrip-
tion of job, name of employer, location of work, and dates of employment for
each job):
Brookings Institution, Washington, DC, Distinguished Fellow in Residence
(2018–Present).
Federal Reserve Board of Governors, Washington, DC, Chair (2014–2018); Vice
Chair (2010–2014).
Federal Reserve Bank of San Francisco, San Francisco, CA. President and CEO
(2004–2010).
White House Council of Economic Advisors, Washington, DC. Chair (1997–
1999).
Federal Reserve Board of Governors, Washington, DC. Member (1994–1997).
University of California, Berkeley, Berkeley, CA. Eugene E. and Catherine M.
Trefethen Professor of Business and Professor of Economics (1999–2004).
University of California, Berkeley, Berkley, CA. Bernard T. Rocca Jr. Professor
of International Business and Trade (1992–1994).
University of California, Berkeley, Berkeley, CA. Professor (1985–1992).
University of California, Berkeley, Berkeley, CA. Associate Professor (1982–
1985).
University of California, Berkeley, Berkeley, CA. Assistant Professor (1980–
1982).
London School of Economics, London, England. Lecturer (1978–1980).
Federal Reserve Board of Governors, Washington, DC. Economist (1977–1978).
Congressional Budget Office, Washington, DC. Consultant (1975–1976).
Federal Reserve Board of Governors, Washington, DC. Consultant (1974–1975).
Harvard University, Cambridge, MA. Assistant Professor (1971–1976).
Yale University, New Haven, CT. Teaching Fellow and Research Assistant
(1969–1971).
Department of Labor, Washington, DC. Summer Intern (1967).
10. Government experience (list any current and former advisory, consultative, hon-
orary, or other part-time service or positions with Federal, State, or local gov-
ernments held since college, including dates, other than those listed above):
Governor Gavin Newsom’s Task Force on Business and Jobs Recovery. Member
(2018–2020).
California Assembly Select Committee on Asian Trade Advisory Board (2003).
National Academy of Sciences (2000).
President’s Interagency Committee on Women’s Business Enterprise. Chair
(1997–1999).
Congressional Budget Office. Panel of Economic Advisers (1993).

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57
National Science Foundation. Committee of Visitors, Advisory Panel in Econom-
ics, Visiting Committee (1977–2004).
11. Business relationships (list all current and former positions held as an officer,
director, trustee, partner (e.g., limited partner, non-voting, etc.), proprietor,
agent, representative, or consultant of any corporation, company, firm, partner-
ship, other business enterprise, or educational or other institution):
American Economic Association. President (2020).
Magellan Financial Group, Sydney, Australia (work done in Washington, DC).
Consultant (2019–2020).
Committee for a Responsible Federal Budget. Board of Directors (2018–2020).
Washington Speakers Bureau, Washington, DC (spoke in many different loca-
tions). Paid Speaker (2018–2020).
Delta Dental of California. Director (2003–2004).
Yale University. Fellow of the Corporation (2000–2006).
Bay Area Council. Member of the Executive Committee (2007–2010).
Barter Trust. Adviser (1999–2000).
12. Memberships (list all current and former memberships, as well as any current
and former offices held in professional, fraternal, scholarly, civic, business, char-
itable, and other organizations dating back to college, including dates for these
memberships and offices):
Bretton Woods Committee. Advisory Council (2019–present).
Aspen Institute. Economic Strategy Group (2018–present).
Group of Thirty. Member (2009–2010). Senior Member (2018–present).
Climate Leadership Council. Founding Member (2017–present).
Yale Program on Financial Stability. Advisory Board (2019–present).
Tobin Center for Economic Policy at Yale University. Advisory Board (2020–
present).
Bloomberg New Economic Forum. Advisory Board (2018–present).
Washington Center for Equitable Growth. Steering Committee (2018–present).
National Economic Education Delegation. Honorary Board Member (2018–
present).
National Liberal Club. Member (2018–present).
British Academy. Member (2016–present).
Children’s Hospital of Oakland, Board of Directors. Honorary Member (2008–
2010).
Western Economic Association. President (2003–2004).
University of California. Professor Emeritus (2006–present).
Women’s Economic Roundtable. Advisory Board (1999–2004).
Council on Foreign Relations. Term Member (1976–1981). Member (2005–
present).
American Economic Association. Member (1971–Present). Advisory Committee
(1986–1987). Nominating Committee (1988–1990). Vice President (2004–2005).
President (2019–2020).
Pacific Council on International Policy. Board of Directors (2004–2008).
Western Economics Association. President (2003–2004).
Macroeconomic Advisers. Senior Adviser (2003–2004).
Delta Dental of California. Member of Board of Directors (2003–2004).
Jerome Levy Economics Institute. Board of Advisers (2002–2004).
Economists for Peace and Security. Trustee (2002–2010).
American Academy of Arts and Sciences. Member (2001–present).

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58
The Faculty Club, University of California at Berkeley. Member (1982–present).
Director (2000–2002).
Yale Club of San Francisco. Member (1993–1996, 2000–2004).
National Bureau of Economic Research. Research Associate (1999–2010).
Center for International Political Economy. Advisory Board (1999–2004).
Brookings Panel on Economic Activity. Advisory Board (1999–2004). Senior Ad-
visor (1989–1994). Member (1987–1988, 1990–1991).
OECD High Level Sustainable Development Group. Member (1999–2001).
OECD Economic Policy Committee. Chair (1997–1999).
British Ambassador’s Advisory Committee for the Marshall Fellowships. Mem-
ber of Advisory Committee (1997–1997).
Rollingwood Citizens Association. Member (1996–1999).
Chevy Chase Recreation Association. Member (1994–1999).
International Trade and Finance Association. Member (1990–1994).
Journal of Economic Perspectives. Associate Editor (1987–1991).
Hadassah. Member (1987–present).
Committee on the Status of Women in the Economics Profession. Member
(1985–1996).
Congregation Beth El. Member (1983–1994).
Hiller Highlands Country Club. Member (1978–present).
Yrjö Jahnsson Foundation. Lecturer on Macroeconomics (1977–1978).
13. Political affiliations and activities:
a. List all public offices for which you have been a candidate dating back to the
age of 18.
None.
b. List all memberships and offices held in and services rendered to all political
parties or election committees, currently and during the last 10 years prior
to the date of your nomination.
None.
c. Itemize all political contributions to any individual, campaign organization,
political party, political action committee, or similar entity of $50 or more for
the past 10 years prior to the date of your nomination.
Democratic National Committee. $25,000 (September 24, 2020).
Biden for President. $2,800 (August 15, 2020).
Biden for President. $2,800 (March 1, 2020).
Democratic Congressional Campaign Committee. $250 (February 6, 2019)
McCaskill for Missouri. $2,500 (October 20, 2018).
Democratic Congressional Campaign Committee. $15,000 (October 8, 2018).
Donna Shalala for Congress. $1,000 (April 5, 2018).
14. Honors and awards (list all scholarships, fellowships, honorary degrees, hon-
orary society memberships, military medals, and any other special recognitions
for outstanding service or achievement received since the age of 18):
Phi Beta Kappa (1966).
Graduated summa cum laude, with highest honors in economics, Brown Univer-
sity (1967).
National Science Foundation Graduate Fellowship (1967–1971).
Honorary Woodrow Wilson Fellowship (1967).
Guggenheim Fellow (1986–1987).
Maria and Sidney Rolfe Award for National Economic Service, Women’s Eco-
nomic Round Table (1997).

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59
Wilbur Lucius Cross Medal, Yale University (1997).
Honorary Doctor of Laws degree, Brown University (1998).
Honorary Doctor of Humane Letters degree, Bard College (2000).
Fellow, American Academy of Arts and Sciences (2001).
Berkeley Fellow (2012).
Distinguished Fellow, American Economic Association (2012).
Fellow, Econometric Society (2014).
Honorary Doctor of Commercial Science, New York University (2014).
Honorary Doctor of Social Science, Yale University (2015).
Honorary Doctor of Science, London School of Economics and Political Science
(2015).
Honorary Doctor of Laws, University of Warwick (2015).
Blackwell Award, Hobart and William Smith Colleges (2015).
Honorary Doctor of Laws, University of Baltimore (2016).
Radcliffe Medal, Radcliffe Institute for Advanced Study, Harvard University
(2016).
Paul H. Douglas Award for Ethics in Government (2017).
President’s Medal, Brown University (2018).
Alice Award, National Woman’s Party (2018).
Women of Power and Influence Award, National Organization for Women
(2018).
Global Leadership Award, Columbia School of International and Public Affairs
(2018).
Brooklyn Public Library Annual Award (2018).
Council on Economic Education, Visionary Award (2019).
Foundation Medal. University of California at Santa Cruz (2019).
Dean’s Medal, Brandeis International Business School (2019).
Truman Medal for Economic Policy (2019).
Honorary Degree, Tel Aviv University (2019).
15. Published writings (list the titles, publishers, dates, and hyperlinks (as applica-
ble) of all books, articles, reports, blog posts, or other published materials you
have written):
‘‘Consequences of a Tax on the Brain Drain for Unemployment and Income In-
equality in Less Developed Countries’’ (with Rachel McCulloch), Journal of De-
velopment Economics, September 1975; reprinted in J. Bhagwati, editor, The
Brain Drain and Taxation: Theory and Empirical Analysis, North Holland,
1976, https://www.sciencedirect.com/science/article/abs/pii/03043878759000
48.
‘‘Commodity Bundling and the Burden of Monopoly’’ (with William James
Adams), Quarterly Journal of Economics, August 1976, https://www.jstor.org/
stable/1886045?seq=1.
‘‘The Limits of the Market in Resource Allocation’’ (with Kenneth Arrow and
Steven Shavell), Japan Trade Council, monograph, 1977. (No link available on-
line).
‘‘Factor Mobility, Regional Development and the Distribution of Income’’ (with
Rachel McCulloch), Journal of Political Economy, February 1977, https://
www.journals.uchicago.edu/doi/abs/10.1086/260546.
‘‘What Makes Advertising Profitable?’’ (with William James Adams), The Eco-
nomic Journal, September 1977, https://academic.oup.com/ej/article-abstract/
87/347/427/5220926?redirectedFrom=fulltext.

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60
‘‘Factor Market Monopsony and the Allocation of Resources’’ (with Rachel
McCulloch), Journal of International Economics, January 1980, https://
www.sciencedirect.com/science/article/abs/pii/0022199680900562.
‘‘On Keynesian Economics and the Economics of the Post-Keynesians,’’ Amer-
ican Economic Review, Papers and Proceedings, May 1980, https://www.
washingtonpost.com/blogs/wonkblog/files/2013/10/postkeynesians.pdf; re-
printed in John Maynard Keynes: Critical Assessments, Vol. 4, John Wood, edi-
tor, Croom Helm Ltd., 1983.
‘‘Can Capital Movements Eliminate the Need for Technology Transfer?’’ (with
Rachel McCulloch), Journal of International Economics, May 1982, https://
www.sciencedirect.com/science/article/abs/pii/0022199682900770.
‘‘Technology Transfer and the National Interest’’ (with Rachel McCulloch), Inter-
national Economic Review, May 1982, https://ideas.repec.org/a/ier/iecrev/
v23y1982i2p421-28.html.
‘‘Efficiency Wage Models of Unemployment,’’ American Economic Review, Papers
and Proceedings, May 1984, https://econpapers.repec.org/article/aeaaecrev/
v_3a74_3ay_3a1984_3ai_3a2_3ap_3a200-205.htm; reprinted in New Keynesian
Economics, Vol. 2, Coordination Failure and Real Rigidities, N. Gregory
Mankiw and David Romer, editors, MIT Press, 1991.
‘‘Unemployment Through the Filter of Memory’’ (with George Akerlof), Quar-
terly Journal of Economics, August 1985, https://academic.oup.com/qje/article-
abstract/100/3/747/1821525.
‘‘A Near-Rational Model of the Business Cycle With Wage and Price Inertia’’
(with George Akerlof), Quarterly Journal of Economics, September 1985,
https://www.jstor.org/stable/1882925?seq=1; reprinted in New Keynesian Eco-
nomics, Vol. 1, Imperfect Competition and Sticky Prices, N. Gregory Mankiw
and David Romer, editors, MIT Press, 1991.
‘‘Can Small Deviations From Rationality Make Significant Differences to Eco-
nomic Equilibria?’’ (with George Akerlof), American Economic Review, Sep-
tember 1985, https://econpapers.repec.org/article/aeaaecrev/v_3a75_3ay_3a
1985_3ai_3a4_3ap_3a708-20.htm.
‘‘Efficiency Wage Models of the Labor Market’’ (with George Akerlof), an edited
collection of papers with an introduction by the authors, Cambridge University
Press, 1986, https://www.cambridge.org/core/books/efficiency-wage-models-of-
the-labor-market/B7BACB7EE736DBEC56D86F5F0068FA55.
‘‘Rational Models of Irrational Behavior’’ (with George Akerlof), American Eco-
nomic Review, Papers and Proceedings, May 1987, https://econpapers.
repec.org/article/aeaaecrev/v_3a77_3ay_3a1987_3ai_3a2_3 ap_3a137-42.htm.
‘‘Fairness and Unemployment’’ (with George Akerlof), American Economic Re-
view, Papers and Proceedings, May 1988, https://econpapers.repec.org/article/
aeaaecrev/v_3a78_3ay_3a1988_3ai_3a2_3ap_3a44-49.htm.
‘‘Comments and Discussion’’ of ‘‘The New Keynesian Economics and the Output-
Inflation Trade-off ’’ (with George Akerlof and Andrew Rose), Brookings Papers
on Economic Activity, 1988, Vol. 1, https://www.brookings.edu/wp-content/
uploads/1988/01/1988a_bpea_ball_mankiw_romer_akerlof_rose_yellen.pdf.
‘‘Job Switching and Job Satisfaction in the U.S. Labor Market’’ (with George
Akerlof and Andrew Rose), Brookings Papers on Economic Activity, 1988, Vol.
2, https://www.brookings.edu/bpea-articles/job-switching-and-job-satisfaction-
in-the-u-s-labor-market/.
‘‘Is There a J-Curve?’’ (with Andrew Rose), Journal of Monetary Economics, July
1989, https://econpapers.repec.org/article/eeemoneco/v_3a24_3ay_3a1989_3ai_
3a1_3ap_3a53-68.htm.
‘‘Symposium on the Budget Deficit,’’ Journal of Economic Perspectives, Spring
1989, https://www.aeaweb.org/articles?id=10.1257/jep.3.2.17.
‘‘Comments and Discussion’’ of ‘‘The Beveridge Curve’’ (with George Akerlof),
Brookings Papers on Economic Activity, 1989, Vol. 1, https://www.brookings.
edu/wp-content/uploads/1989/01/1989a_bpea_blanchard_diamond_hall_yellen
.pdf.

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61
‘‘The Fair Wage Effort Hypothesis and Unemployment’’ (with George Akerlof),
Quarterly Journal of Economics, May 1990, https://www.jstor.org/stable/
2937787?seq=1.
‘‘Waiting for Work’’ (with George Akerlof and Andrew Rose), Federal Reserve
Bank of San Francisco, June 1990, https://www.nber.org/papers/w3385.
‘‘How Large Are the Losses From Rule of Thumb Behavior in Models of the
Business Cycle?’’ (with George Akerlof) in William Brainard, William Nordhaus
and Harold Watts, eds., Money, Macroeconomics and Economic Policy: Essays
in Honor of James Tobin, Cambridge, Mass: M.I.T. Press, 1991, https://books.
google.com/books?id=dahiA2ryJH0C&pg=PA59&lpg=PA59&dq=%22How+Large
+are+the+Losses+from+Rule+of+Thumb+Behavior+in+Models+of+the+Business+
Cycle?%22&source=bl&ots=qjQP-Y5Beh&sig=ACfU3U0hlP3x3Ke3y-¥bLmIzFvv
bHl5oqQ&hl=en&sa=X&ved=2ahUKEwj4v87euPTtAhUkxVkKHT49AvYQ6AEw
AXoECAEQAg#v=onepage&q=%22How%20Large%20are%20the%20Losses%20
from%20Rule%20of%20Thumb%20Behavior%20in%20Models%20of%20the%20
Business%20Cycle%3F%22&f=false.
‘‘East Germany in From the Cold: The Economic Aftermath of Currency Union’’
(with George Akerlof, Andrew Rose, and Helga Hessenius), Brookings Papers on
Economic Activity, 1991, Vol. 1, https://www.brookings.edu/bpea-articles/east-
germany-in-from-the-cold-the-economic-aftermath-of-currency-union/.
‘‘Comments and Discussion’’ of ‘‘Unemployment, Non-Employment and Wages:
Why Has the Natural Rate Increased Through Time?’’ (with George Akerlof),
Brookings Papers on Economic Activity, 1991, Vol. 2, https://www.
brookings.edu/book/brookings-papers-on-economic-activity-19912-macroeconom
ics/.
Comment on ‘‘East German Economic Reconstruction,’’ by Rudiger Dornbusch
and Holger C. Wolf, in The Transition in Eastern Europe, Olivier Jean Blan-
chard, Kenneth A. Froot, and Jeffrey Sachs, editors, NBER and University of
Chicago Press, 1994, https://www.nber.org/system/files/chapters/c6019/c6019.
pdf.
‘‘Gang Behavior, Law Enforcement and Community Values’’ (with George
Akerlof), in Henry Aaron, Thomas Mann and Timothy Taylor, eds., Values and
Public Policy, Brookings Institution, 1994, https://www.brookings.edu/wp-con-
tent/uploads/2016/06/gang-behavior-law-enforcement-community-values-aker
lof-yellen.pdf.
‘‘An Analysis of Out-of-Wedlock Childbearing in the United States’’ (with George
Akerlof and Michael Katz), Quarterly Journal of Economics, May 1996, https://
www.jstor.org/stable/2946680?seq=1.
‘‘New Mothers, Not Married: Technology Shock, Demise of Shotgun Marriage,
and the Increase in Out-of-Wedlock Births’’ (with George Akerlof), Brookings
Review, Fall 1996, https://www.jstor.org/stable/20080682?refreqid=excelsior
%3A36435cf3223ac5171fa71415db3b1a52.
‘‘An Analysis of Out-Of-Wedlock Births in the United States’’ (with George
Akerlof), Brookings Policy Brief, August 1996, No. 5, https://www.
brookings.edu/research/an-analysis-of-out-of-wedlock-births-in-the-united-states
/.
‘‘Why Kids Have Kids: Don’t Blame Welfare, Blame ‘Technology Shock’ ’’ (with
George Akerlof), Slate, November 15, 1996, https://slate.com/news-and-poli-
tics/1996/11/why-kids-have-kids.html.
‘‘Monetary Policy: Goals and Strategy,’’ Business Economics, July 1996, https://
www.jstor.org/stable/23487605?seq=1.
‘‘The ‘New’ Science of Credit Risk Management,’’ Federal Reserve Bank of Min-
neapolis, September 1996, https://www.minneapolisfed.org/article/1996/the-
new-science-of-credit-risk-management.
‘‘Plan Helps Families, Nation,’’ USA Today, July 30, 1997 at 12A. (No link
available online).
‘‘Trends in Income Inequality and Policy Responses,’’ Looking Ahead, October
1997; and James Auerbach and Richard Belous eds., The Inequality Paradox:
Growth of Income Disparity, National Policy Association, 1998, https://
books.google.com/books/about/The_Inequality_Paradox.html?id=W0GsAAAAIA
AJ.

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62
‘‘The Continuing Importance of Trade Liberalization,’’ Business Economics, Jan-
uary 1998, https://www.jstor.org/stable/23487688?seq=1.
‘‘Economic Report of the President,’’ February 1998 (with Jeffrey Frankel and
Rebecca Blank), https://www.govinfo.gov/content/pkg/ERP-1998/html/ERP-
1998-frontmatter.htm.
‘‘Economic Report of the President,’’ February 1999 (with Jeffrey Frankel and
Rebecca Blank), https://www.govinfo.gov/content/pkg/ERP-1999/pdf/ERP-
1999-frontmatter.pdf.
The Fabulous Decade: Macroeconomic Lessons From the 1990s (with Alan Blind-
er), The Century Foundation Press, New York, 2001. Reprinted in The Roaring
Nineties: Can Full Employment be Sustained? Edited by Alan B. Krueger and
Robert Solow, Russell Sage Foundation and Century Foundation, New York,
2001, https://www.brookings.edu/book/the-fabulous-decade/. Korean trans-
lation published by the Korea Institute of Public Finance, 2003.
‘‘Is He Making the Grade?’’, The International Economy, 15(5),21 (2001). (No
link available online).
‘‘Overview Panel Commentary,’’ in Economic Policy for the Information Econ-
omy, Proceedings of a Symposium Sponsored by the Federal Reserve Bank of
Kansas City, Jackson Hole, Wyoming—August–September 2001, https://www.
kansascityfed.org/∼/media/files/publicat/sympos/2001/papers/s02yell.pdf?la=
en.
‘‘Comments and Discussion’’ of ‘‘From Reunification to Economic Integration:
Productivity and the Labor Market in Eastern Germany’’ by Michael Burda and
Jennifer Hunt, Brookings Papers on Economic Activity, 2001, Vol. 2, https://
www.brookings.edu/bpea-articles/from-reunification-to-economic-integration-pro
ductivity-and-the-labor-market-in-eastern-germany/.
‘‘Yale Economics in Washington,’’ Foreword to James Tobin, World Finance and
Economic Stability, Edward Elgar, 2002, https://www.abebooks.com/servlet/
BookDetailsPL?bi=30749104869.
‘‘The Binge Mentality in the Federal Budget,’’ The New York Times, July 22,
2002, https://www.nytimes.com/2002/07/22/opinion/the-binge-mentality-in-
the-federal-budget.html.
‘‘Government Needs a Return to Fiscal Discipline,’’ The Times Union (Albany,
NY), October 27, 2002, at BI, http://nl.newsbank.com/nl-search/we/Archives?
p_product=AL&p_theme=al&p_action=search&p_maxdocs=200&s_dispstring=ye
llen%20AND%20date(10/27/2002%20to%2010/27/2001)&p_field_date-0=YMD_
date&p_params_date-0=date:B,E&p_text_date-0=10/27/2002%20to%2010/27/
2001)&p_field_advanced-0=&p_text_advanced-0=(yellen)&xcal_numdocs=20&p_
perpage=10&p_sort=YMD_date:D&xcal_useweights=no.
‘‘Discussion’’ of ‘‘Robust Monetary Policy Rules,’’ by Athanasios Orphanides and
John Williams, Brookings Papers on Economic Activity, 2002, Vol. 2, https://
www.jstor.org/stable/1209203?refreqid=excelsior%3A1634969a8065ba8afc5c3c1f
1c7af02f&seq=1.
‘‘Waiting for Work,’’ with George Akerlof and Andrew Rose, in Economics for an
Imperfect World: Essays in Honor of Joseph Stiglitz, edited by Richard Arnott,
Bruce Greenwald, Ravi Kanbur, and Barry Nalebuff, M.I.T. Press, 2003,
https://mitpress.mit.edu/books/economics-imperfect-world.
Comments on Daniel Benjamin and David Laibson, ‘‘Good Policies for Bad Gov-
ernments: Behavioral Political Economy,’’ Federal Reserve Bank of Boston Con-
ference: ‘‘How Humans Behave: Implications for Economics and Economic Pol-
icy,’’ June 2003, https://www.bostonfed.org/news-and-events/events/economic-
research-conference-series/how-humans-behave-implications-for-economics-and-
economic-policy.aspx.
‘‘Putting State’s Budget Conundrum in Perspective,’’ with George Akerlof and
Alan Auerbach, Sacramento Bee, July 23, 2003 at B7. (No link available online).
‘‘Overview Panel Commentary,’’ in Monetary Policy and Uncertainty: Adapting
to a Changing Economy; Proceedings of a Symposium Sponsored by the Federal
Reserve Bank of Kansas City, Jackson Hole, Wyoming—August 2003, https://
www.kansascityfed.org/publicat/sympos/2003/pdf/Yellen2003.pdf.

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63
‘‘Coordinating Monetary and Fiscal Policies in Stabilizing the Economy,’’ edited
by Adam S. Posen and Benn Steil, Blackwell Publishers, 2004. (No link avail-
able online).
‘‘Foreword’’ to ‘‘Painting the White House Green: Rationalizing Environmental
Policy Inside the Executive Office of the President,’’ edited by Randy Lutter and
Jason Shogren, Resources for the Future, 2004, https://www.routledge.com/
Painting-the-White-House-Green-Rationalizing-Environmental-Policy-Inside/
Lutter/p/book/9781891853722.
‘‘Discipline and Judgment in Monetary Policy: The Greenspan Years,’’ presented
at AEA session on ‘‘Innovations and Issues in Monetary Policy: The Last 15
Years,’’ January 2004; American Economic Review: Papers and Proceedings,
May 2004, https://www.aeaweb.org/articles?id=10.1257/0002828041302307.
‘‘Reflections on China’s Economy,’’ Economic Letter, Federal Reserve Bank of
San Francisco, November 5, 2004, https://www.frbsf.org/economic-research/
publications/economic-letter/2004/november/reflections-on-china-economy/.
‘‘Productivity and Inflation,’’ Economic Letter, Federal Reserve Bank of San
Francisco, February 18, 2005, https://www.frbsf.org/economic-research/publi-
cations/economic-letter/2005/february/productivity-and-inflation/.
‘‘Policymaking on the FOMC: Transparency and Continuity,’’ Economic Letter,
Federal Reserve Bank of San Francisco, September 2, 2005, https://www.
frbsf.org/economic-research/publications/economic-letter/2005/september
/policymaking-on-the-fomc-transparency-and-continuity/.
‘‘Stabilization Policy: A Reconsideration’’ (with George Akerlof), Presidential Ad-
dress to the Western Economic Association, Economic Inquiry, 2004 (44)1: pp.
1–22, https://www.ssc.wisc.edu/∼mchinn/yellen_akerlof_stabilizationpolicy.
‘‘2006: A Year of Transition at the Federal Reserve,’’ Economic Letter, Federal
Reserve Bank of San Francisco, January 27, 2006, https://www.frbsf.org/eco-
nomic-research/publications/economic-letter/2006/january/2006-a-year-of-tran-
sition-at-the-federal-reserve/.
‘‘Enhancing Fed Credibility,’’ Economic Letter, Federal Reserve Bank of San
Francisco, March 17, 2006, https://www.frbsf.org/economic-research/publica-
tions/economic-letter/2006/march/enhancing-fed-credibility/.
‘‘Enhancing Fed Credibility: ‘Too Much of a Good Thing Can be Wonderful.’—
Mae West,’’ Business Economics, April 2006, pp. 45–51, https://www.jstor.org/
stable/23490589?refreqid=excelsior%3Af7c48dcfe0b051f01856563035e195a3.
‘‘Prospects for the Economy,’’ Economic Letter, Federal Reserve Bank of San
Francisco, April 28, 2006, https://www.frbsf.org/economic-research/publica-
tions/economic-letter/2006/april/prospects-for-the-economy/.
‘‘Monetary Policy in a Global Economy,’’ Economic Letter, Federal Reserve Bank
of San Francisco, June 2, 2006, https://www.frbsf.org/economic-research/publi-
cations/economic-letter/2006/june/monetary-policy-in-a-global-environment/.
‘‘A Monetary Policymaker’s Passage to India,’’ Economic Letter, Federal Reserve
Bank of San Francisco, July 7, 2006, https://www.frbsf.org/economic-research/
publications/economic-letter/2006/july/a-monetary-policymaker-passage-to-
india/.
‘‘Economic Inequality in the United States,’’ Economic Letter, Federal Reserve
Bank of San Francisco, December 1, 2006, https://www.frbsf.org/economic-re-
search/publications/economic-letter/2006/december/economic-inequality-in-the-
united-states/.
‘‘The Public Good: Knowledge as the Foundation for a Democratic Society’’ (with
Randel, Don Michael, Sandra Day O’Connor, Mark Noll, Gwen Ifill, E. L.
Doctorow, John W. Rowe, and Ralph J. Cicerone), Bulletin of the American
Academy of Arts and Sciences 61(1), 2007, https://www.jstor.org/stable/4048
1112?refreqid=excelsior%3A4ab4c0ed864ff3711b3495376bc9e9af.
‘‘Update on China: A Monetary Policymaker’s Report,’’ Economic Letter, Federal
Reserve Bank of San Francisco, March 9, 2007, https://www.frbsf.org/eco-
nomic-research/publications/economic-letter/2007/march/china-monetary-pol-
icy/.
‘‘The U.S. Economy and Monetary Policy,’’ Economic Letter, Federal Reserve
Bank of San Francisco, July 13, 2007, https://www.frbsf.org/economic-re-

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search/publications/economic-letter/2007/july/us-economy-monetary-policy-july
-2007/.
‘‘Recent Financial Developments and the U.S. Economic Outlook,’’ Economic
Letter, Federal Reserve Bank of San Francisco, September 14, 2007, https://
www.frbsf.org/economic-research/publications/economic-letter/2007/sep-
tember/us-economic-outlook/.
‘‘The U.S. Economy and Monetary Policy,’’ Economic Letter, Federal Reserve
Bank of San Francisco, December 7, 2007, https://www.frbsf.org/economic-re-
search/publications/economic-letter/2007/december/us-economy-monetary-pol-
icy-december-2007/.
‘‘Prospects for the Economy in 2008,’’ Economic Letter, Federal Reserve Bank of
San Francisco, February 8, 2008, https://www.frbsf.org/economic-research/pub-
lications/economic-letter/2008/february/economy-prospects-2008/.
‘‘Economic Conditions in Singapore and Vietnam: A Monetary Policymaker’s Re-
port,’’ Economic Letter, Federal Reserve Bank of San Francisco, February 22,
2008, https://www.frbsf.org/economic-research/publications/economic-letter/
2008/february/economic-conditions-singapore-vietnam-monetary-policy/.
‘‘The Financial Markets, Housing and the Economy,’’ Economic Letter, Federal
Reserve Bank of San Francisco, April 18, 2008, https://www.frbsf.org/eco-
nomic-research/publications/economic-letter/2008/april/financial-markets-
housing-economy/.
‘‘The U.S. Economic Situation and the Challenges for Monetary Policy,’’ Eco-
nomic Letter, Federal Reserve Bank of San Francisco, September 19, 2008,
https://www.frbsf.org/economic-research/publications/economic-letter/2008/
september/us-economy-monetary-policy-september-2008/.
‘‘The Mortgage Meltdown, Financial Markets, and the Economy,’’ Economic Let-
ter, Federal Reserve Bank of San Francisco, November 7, 2008, https://
www.frbsf.org/economic-research/publications/economic-letter/2008/november/
mortgage-financial-markets-economy/.
‘‘The Path to Recovery,’’ Origination News, 17(12),4 (September 2008). (No link
available online).
‘‘Economic Conditions in Korea and Japan: A Monetary Policymaker’s Report,’’
Economic Letter, Federal Reserve Bank of San Francisco, December 19, 2008,
https://www.frbsf.org/economic-research/publications/economic-letter/2008/
december/economy-korea-japan-monetary-policy/.
‘‘U.S. Monetary Policy Objectives in the Short and Long Run,’’ Economic Letter,
Federal Reserve Bank of San Francisco, January 9, 2009, https://www.
frbsf.org/economic-research/publications/economic-letter/2009/january/us-
monetary-policy-objectives/.
‘‘A Minsky Meltdown: Lessons for Central Bankers,’’ Economic Letter, Federal
Reserve Bank of San Francisco, May 1, 2009, https://www.frbsf.org/economic-
research/publications/economic-letter/2009/may/minsky-central-bank-asset-
price-bubbles/.
‘‘A View of the Economic Crisis and the Federal Reserve’s Response,’’ Economic
Letter, Federal Reserve Bank of San Francisco, July 6, 2009, https://www.
frbsf.org/economic-research/publications/economic-letter/2009/july/economic-
crisis-federal-reserve/.
‘‘Linkages Between Monetary and Regulatory Policy: Lessons From the Crisis,’’
Economic Letter, Federal Reserve Bank of San Francisco, November 23, 2009,
https://www.frbsf.org/economic-research/publications/economic-letter/2009/
november/monetary-regulatory-policy-crisis/.
‘‘Hong Kong and China and the Global Recession,’’ Economic Letter, Federal Re-
serve Bank of San Francisco, February 8, 2010, https://www.frbsf.org/eco-
nomic-research/publications/economic-letter/2010/february/hong-kong-china-
global-recession/.
‘‘The Outlook for the Economy and Inflation, and the Case for Federal Reserve,’’
Economic Letter, Federal Reserve Bank of San Francisco, March 29, 2010,
https://www.frbsf.org/economic-research/publications/economic-letter/2010/
march/outlook-economy-inflation-federal-reserve-independence/.

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‘‘Closing Panel Presentation,’’ Journal of Money, Credit and Banking 42 (2010):
243–48, https://onlinelibrary.wiley.com/doi/full/10.1111/j.1538-4616.2010.003
38.x.
‘‘Macroprudential Supervision and Monetary Policy in the Post-Crisis World,’’
Business Economics 46:1, 2011, pp.3–12, https://www.federalreserve.gov/
newsevents/speech/yellen20101011a.htm.
‘‘Many Targets, Many Instruments: Where Do We Stand?’’, in What Have We
Learned?: Macroeconomic Policy After the Crisis, edited by George Akerlof,
Olivier Blanchard, David Romer, and Joseph Stigliz, 31–36, Cambridge, Mass.:
M.I.T. Press, 2014, https://www.jstor.org/stable/j.ctt9qf899.
‘‘Perspectives on Inequality and Opportunity From the Survey of Consumer Fi-
nances,’’ The Russell Sage Foundation Journal of the Social Sciences, 2(2), May
2016, https://www.jstor.org/stable/10.7758/rsf.2016.2.2.02#metadata_info_tab_
contents.
‘‘Inflation, Uncertainty, and Monetary Policy,’’ Business Economics 52, 2017, pp.
194–207, https://ideas.repec.org/a/pal/buseco/v52y2017i4d10.1057_s11369-
017-0057-x.html.
‘‘A debt crisis is coming. But don’t blame entitlements,’’ Washington Post (2018),
April 8, 2018, https://www.washingtonpost.com/opinions/a-debt-crisis-is-com-
ing-but-dont-blame-entitlements/2018/04/08/968df5c2-38fb-11e8-9c0a-85d477d
9a226_story.html.
‘‘Monetary policy at the effective lower bound’’ (with Kristin J. Forbes, James
Hamilton, Eric T. Swanson), Brookings Papers on Economic Activity, August 14,
2018, https://www.brookings.edu/wp-content/uploads/2018/09/Yellen_final-
draft.pdf.
‘‘Seven questions for Janet Yellen on financial stability,’’ Brookings, January 3,
2019, https://www.brookings.edu/blog/up-front/2019/01/03/seven-questions-
for-janet-yellen-on-financial-stability/.
‘‘Economists’ Statement on Carbon Dividends: Bipartisan agreement on how to
combat climate change’’ (co-signatory), Wall Street Journal, January 17, 2019,
https://clcouncil.org/economists-statement/.
‘‘America Needs an Independent Fed’’ (with Paul Volcker, Alan Greenspan, and
Ben Bernanke), Wall Street Journal, August 5, 2019, https://www.wsj.com/ar-
ticles/america-needs-an-independent-fed-11565045308.
‘‘The Federal Reserve Must Reduce Long-term Damage From Coronavirus’’
(with Ben Bernanke), Financial Times, March 13, 2020, https://www.ft.com/
content/01f267a2-686c-11ea-a3c9-1fe6fedcca75.
‘‘Former Fed Chairs Bernanke and Yellen testified on COVID–19 and response
to economic crisis’’ (with Ben S. Bernanke), July 17, 2020, https://www.
brookings.edu/blog/up-front/2020/07/17/former-fed-chairs-bernanke-and-
yellen-testified-on-covid-19-and-response-to-economic-crisis/.
‘‘The Senate Is on Vacation While Americans Starve’’ (with Jared Bernstein),
New York Times, August 24, 2020, https://www.nytimes.com/2020/08/24/
opinion/coronavirus-federal-reserve.html.
‘‘Mainstreaming the Transition to a Net-Zero Economy,’’ Group of 30’s Working
Group, October 2020, https://group30.org/images/uploads/publications/
G30_Mainstreaming_the_Transition_to_a_Net-Zero_Economy_2.pdf.
16. Speeches (list all formal speeches and presentations (e.g., PowerPoint) you have
delivered during the past 5 years which are on topics relevant to the position
for which you have been nominated, including dates):
‘‘Main Street or Wall Street: A New Mandate for Central Banks,’’ New Economy
Forum (11/16/20).
‘‘IC20 Central Banks: Crisis Panacea?’’ Bretton Woods Committee (10/12/20).
‘‘How the Fed will respond to the COVID–19 recession in an era of low rates
and low inflation,’’ Brookings Institution (9/1/20).
‘‘Former Federal Reserve Chairs on Responding to Our Nation’s Economic Cri-
sis,’’ Testimony with Chairman Ben Bernanke before the Select Subcommittee
on the Coronavirus Crisis (7/17/20).

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‘‘Conversation with Janet Yellen,’’ Magellan Financial Group (7/1/20).
‘‘A Decade of Dodd-Frank,’’ co-hosted by the Brookings Institution and the Cen-
ter on Finance, Law and Policy at the University of Michigan (6/30/20).
‘‘COVID–19 and the economy: What Washington has done and the challenges
to State and local governments,’’ Brookings Institution (3/30/20).
‘‘A Fed duet: Janet Yellen in conversation with Ben Bernanke,’’ Brookings Insti-
tution (2/27/2020).
‘‘The economy and the 2020 election: If the Economy Is Doing So Well, Why Are
So Many Struggling?’’, Brookings Institution (2/26/20).
‘‘DA conversation with David Malpass and Janet Yellen,’’ the Bipartisan Policy
Center (2/4/2020).
‘‘Changing Thinking in Economics and Changing the Profile of Economists,’’
Economic Policy Institute (10/29/19).
‘‘What’s (Not) Up With Inflation?’’, Hutchins Center on Fiscal and Monetary
Policy at Brookings Institution (10/3/19).
‘‘The Gender and Racial Diversity of the Federal Government’s Economists,’’
Hutchins Center on Fiscal and Monetary Policy at Brookings Institution (9/23/
19).
‘‘The State of American Capitalism,’’ Aspen Economic Strategy Group (7/28/19).
‘‘Global Perspectives with Janet L. Yellen,’’ Federal Reserve Bank of Dallas (4/
10/19).
‘‘A Conversation With Janet Yellen,’’ Vanderbilt University (4/4/19). (No link
available online.)
‘‘Keynote,’’ Standard Chartered’s Middle East Summit (3/18/19).
‘‘Monetary Policy, Currencies and Manipulation,’’ Dollars and Sense Podcast,
Brookings Institution (2/19/19).
‘‘Federal Reserve Chairs: Joint Interview’’ (with Jay Powell and Ben Bernanke),
American Economic Association Annual Meeting (1/4/19).
‘‘Janet Yellen in Conversation With Paul Krugman,’’ The Graduate Center,
CUNY (12/10/18).
‘‘Tools for Managing Financial Crises,’’ Yale School of Management (11/26/18).
‘‘Managing the Next Financial Shock,’’ New Economy Forum (11/6/18).
‘‘In Conversation With Janet Yellen,’’ NACD Global Board Leaders’ Summit (10/
17/18).
‘‘Conversation With Janet Yellen,’’ 19th World Knowledge Forum (10/12/18).
‘‘The Tenth Anniversary of the Financial Crisis,’’ Griswold Center for Economic
Policy Studies (9/21/18).
‘‘A Fed Duet,’’ Hutchins Center on Fiscal and Monetary Policy (2/27/18).
‘‘The Current Economic Outlook and Monetary Policy,’’ The Joint Economic
Committee (11/29/17).
‘‘Remarks accepting the 2017 Paul H. Douglas Award for Ethics in Govern-
ment,’’ at the Institute of Government and Public Affairs at the University of
Illinois (11/7/17).
‘‘A Challenging Decade and a Question for the Future,’’ National Economists
Club (10/20/17).
‘‘The U.S. Economy and Monetary Policy,’’ Group of 30 International Banking
Seminar (10/15/17).
‘‘Community Banking in the 21st Century,’’ Fifth Annual Community Banking
Research and Policy Conference (10/4/17).
‘‘Inflation, Uncertainty, and Monetary Policy,’’ 59th Annual Meeting of the Na-
tional Association for Business Economics (9/26/17).
‘‘Financial Stability a Decade After the Onset of the Crisis,’’ Federal Reserve
Bank of Kansas City (8/25/17).

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Semiannual Monetary Policy Report to the Congress. The Committee on Bank-
ing, Housing, and Urban Affairs, U.S. Senate (7/13/17).
Semiannual Monetary Policy Report to the Congress. The Committee on Finan-
cial Services, U.S. House of Representatives (7/12/17).
‘‘So We All Can Succeed: 125 Years of Women’s Participation in the Economy,’’
Brown University (5/5/17).
2017 annual conference of the National Community Reinvestment Coalition (3/
28/17).
‘‘Welcoming Remarks’’ at ‘‘Strong Foundations: The Economic Futures of Kids
and Communities,’’ 10th Biennial Federal Reserve System Community Develop-
ment Research Conference (3/23/17).
‘‘From Adding Accommodation to Scaling It Back,’’ The Executives’ Club of Chi-
cago (3/3/17).
‘‘Semiannual Monetary Policy Report to the Congress,’’ The Committee on Fi-
nancial Services, U.S. House of Representatives (2/15/17).
‘‘Semiannual Monetary Policy Report to the Congress,’’ The Committee on
Banking, Housing, and Urban Affairs, U.S. Senate (2/14/17).
‘‘The Economic Outlook and the Conduct of Monetary Policy,’’ The Stanford In-
stitute for Economic Policy Research (1/19/17).
‘‘The Goals of Monetary Policy and How We Pursue Them,’’ The Commonwealth
Club (1/18/17).
‘‘Welcoming Remarks’’ at ‘‘Conversation With the Chair: A Teacher Town Hall
Meeting,’’ Federal Reserve Board (1/12/17).
‘‘The Economic Outlook,’’ The Joint Economic Committee, U.S. Congress (11/17/
16).
‘‘Macroeconomic Research After the Crisis,’’ 60th Annual Economic Conference.
Federal Reserve Bank of Boston (10/14/16).
‘‘Banking and the Economy: A Forum for Minority Bankers,’’ Federal Reserve
Bank of Kansas City (9/29/16).
‘‘Supervision and Regulation,’’ The Committee on Financial Services, U.S. House
of Representatives (9/28/16).
‘‘The Federal Reserve’s Monetary Policy Toolkit. Designing Resilient Monetary
Policy Frameworks for the Future,’’ Federal Reserve Bank of Kansas City (8/
26/16).
‘‘Semiannual Monetary Policy Report to the Congress,’’ The Committee on Fi-
nancial Services, U.S. House of Representatives (6/22/16).
‘‘Semiannual Monetary Policy Report to the Congress,’’ The Committee on
Banking, Housing, and Urban Affairs, U.S. Senate (6/21/16).
‘‘Current Conditions and the Outlook for the U.S. Economy,’’ The World Affairs
Council of Philadelphia (6/6/16).
‘‘When the Federal Reserve Speaks . . . The World Listens’’ (with former Fed
Chairs Ben Bernanke, Paul Volcker, and Alan Greenspan), International House
in New York (4/7/2016).
‘‘The Outlook, Uncertainty, and Monetary Policy,’’ The Economic Club of New
York (3/29/16).
‘‘Semiannual Monetary Policy Report to the Congress,’’ The Committee on
Banking, Housing, and Urban Affairs, U.S. Senate (2/11/16).
‘‘Semiannual Monetary Policy Report to the Congress,’’ The Committee on Fi-
nancial Services, U.S. House of Representatives (2/10/16).
‘‘The Economic Outlook,’’ The Joint Economic Committee, U.S. Congress (12/3/
15).
‘‘The Economic Outlook and Monetary Policy,’’ The Economic Club of Wash-
ington (12/2/15).

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In addition to the speeches listed above, Dr. Yellen served as a paid speaking
guest, as arranged by the Washington Speakers Bureau, for the following orga-
nizations on the following dates:1

Arranging Organization Date Location

Moore Capital 03/27/18 Washington, DC

Jefferies 04/02/18 New York, NY

BTIG 04/03/18 New York, NY

Strategas Research Partners 04/04/18 New York, NY

Cisco 04/12/18 and Kiawah Island, SC
04/13/18

Nomura 04/16/18 New York, NY

Deutsche Bank 05/01/18 New York, NY

UBS 05/02/18 New York, NY

Apollo Global Management 05/09/18 New York, NY

Itau 05/16/18 New York, NY

Experian 05/21/18 Scottsdale, AZ

Morgan Stanley 06/05/18 and New Orleans, LA
06/06/18

Stifel Financial 06/13/18 Boston, MA

Charles Schwab 06/14/18 Avon, CO

Neuberger Berman 06/20/18 New York, NY

Credit Suisse 06/25/18 London, England

Amundi Asset Management 06/28/18 Paris, France

Federal Home Loan Bank of Chicago 08/03/18 Chicago, IL

University of San Francisco 08/29/18 San Francisco, CA

Association of Foreign Investors in Real Estate 09/07/18 Washington, DC

Carlyle Investment Management 09/13/18 Washington, DC

BCA Research 09/24/18 Toronto, Canada

BNP Paribas 09/25/18 New York, NY

Mitsui 09/27/18 New York, NY

National Association of Corporate Directors 09/30/18 Washington, DC

Vanguard 10/01/18 and Chicago, IL
10/02/18

Barclays 10/08/18 Chicago, IL

Vanguard 10/08/18 and Chicago, IL
10/09/18

1 Dr. Yellen did not deliver prepared remarks during any of these appearances.

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Arranging Organization Date Location

World Knowledge Forum 10/12/18 Seoul, South Korea

Mortgage Bankers Association 10/15/18 Washington, DC

Macquarie Holdings 10/26/18 La Quinta, CA

Finance Montreal 10/29/18 Montreal, Canada

Charles Schwab 10/30/18 Washington, DC

Chicago Mercantile Exchange 11/13/18 Naples, FL

Caixin 11/13/18 Naples, FL

JP Morgan Chase 11/14/18 New York, NY

Turnaround Management 11/15/18 and Chicago, IL
11/16/18

Bank of America 11/29/18 New York, NY

Citadel 12/11/18 New York, NY

UBS 01/06/19 Atlanta, GA

Wealth Vest 01/09/19 Washington, DC

National Retail Federation 01/14/19 New York, NY

ING 01/15/18 Amsterdam, Netherlands

PricewaterhouseCoopers 01/23/19 Davos, Switzerland

City National Bank 01/28/19 and New York, NY; Wash-
01/29/19 and ington, DC; Orange Coun-
01/30/19 and ty, CA; Los Angeles, CA;
01/30/19 and and San Francisco, CA
01/31/19

Structured Finance Industry Group 02/26/19 Las Vegas, NV

Standard Chartered Bank 03/03/19 Dubai, UAE

Citi 03/06/19 and New York, NY and Lon-
03/11/19 and don, England
03/12/19

Entrust 03/07/19 New York, NY

Credit Suisse—Hong Kong Development Council 03/25/19 Hong Kong

Texas Christian University 03/28/19 Fort Worth, TX

BNP Paribas 04/02/19 Brussels, Belgium

Institute for Supply Management 04/09/19 Houston, TX

PIMCO 05/05/19 and Newport Beach, CA
05/06/19

National Investment Center 09/12/19 Chicago, IL

Bank of America 10/02/19 New York, NY

Barclays 10/15/19 New York, NY

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Arranging Organization Date Location

Citadel 10/17/19 and Hong Kong and New
12/3/19 York, NY

Google 10/30/19 Washington, DC

Magellan Financial Group 10/31/19 Washington, DC

Prudential Global Investment Management 11/06/19 New York, NY

HSM 11/21/19 New York, NY

Stifel Financial 12/04/19 New York, NY

Hong Kong Development Council 01/13/20 Hong Kong

CFA Society Atlanta 02/05/20 Atlanta, GA

Magellan Financial Group 03/31/20 and Teleconferences
05/12/20 and
08/20/20

Citi 4/30/20 and Webinars
5/19/20 and
5/20/20 and
6/15/20 and
7/15/20 and
10/14/20

Fiserv 05/26/20 Webinar

Ares Management 05/26/20 Webinar

Salesforce 06/24/20 Webinar

Goldman Sachs 06/17/20 Webinar

Barclays 07/29/20 Webinar

Magellan Financial Group 2 11/16/20 Teleconferences

Principal Financial Investors 09/17/20 Webinar

Credit Suisse 09/30/20 Webinar

Pillsbury Winthrop Shaw Pittman 10/09/20 Webinar

PMI 10/22/20 Webinar

Standard Chartered Bank 10/27/20 Webinar

Advisor Group 10/28/20 Webinar

Citadel 10/09/20 and Webinars
10/20/20 and
10/26/20 and
10/27/20

Daiwa Securities 11/05/20 Webinar

Deloitte 11/20/20 Webinar
2 Dr. Yellen’s engagement on November 16, 2020 was not arranged by Washington Speakers Bureau.

17. Qualifications (state what, in your opinion, qualifies you to serve in the position
to which you have been nominated):
I served as chairman of the Board of Governors of the Federal Reserve System
from February 2014 to February 2018 and as vice chairman between October

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71
2010 and February 2014. I served as President and Chief Executive Officer of
the Federal Reserve Bank of San Francisco from 2004 to 2010 and as Governor
of the Federal Reserve System between August 1994 and February 1997.
Through this service, and my background in macroeconomics, I acquired an un-
derstanding of major issues facing the U.S. and global economies, and the roles
of monetary and fiscal policy in supporting economic growth, job creation, and
price stability. I participated during these years in financial crisis interventions
and helped to establish a Division of Financial Stability at the Federal Reserve
Board. As Chair, I participated as a member of the Financial Stability Over-
sight Council. I also oversaw banking supervision and regulation, and the oper-
ation of the payments system. This background will inform my work at Treas-
ury as Chair of FSOC, and on financial regulation more generally. This experi-
ence is also relevant to Treasury’s role with respect to the Bureau of Printing
and Engraving and the Mint. During my term as Chair of the Federal Reserve,
I actively participated in the G20 and G7 Ministers and Central Bank Gov-
ernors meetings and those of the IMF. As Treasury Secretary, I would partici-
pate in these same international bodies. I also was deeply involved in the Fed-
eral Reserve’s work in Community Development and met regularly with rep-
resentatives of community organizations, developing an understanding of the
particular challenges facing low- and moderate-income communities in obtain-
ing access to credit and stable jobs. This background will inform my work at
the Treasury Department in these same areas. I also gained experience at the
Federal Reserve in managing a large and diverse organization—skills that will
be needed at Treasury as well.
My training is as a professional economist with a specialty in macroeconomics
and international economics. I have published original research on a wide vari-
ety of topics in international and macroeconomics. I am best known for my work
exploring the causes of price and wage rigidity. This work provides a basic ra-
tionale for the use of monetary policy and fiscal policy to stabilize the economy.
My research has also focused on the causes and consequences of unemployment.
From 1980 until I joined the Federal Reserve Board as a Governor in 1994, and
for 5 years after leaving the Council of Economic Advisers, I served on the fac-
ulty of the Walter A. Haas School of Business at the University of California,
Berkeley, where I taught international and macroeconomics in the MBA and ex-
ecutive education programs of the school. Beginning in 1999, I also held a fac-
ulty appointment in the Department of Economics.
I received my B.A. summa cum laude from Brown University in 1967 and my
Ph.D. in economics from Yale University in 1971. From 1971 to 1976 I served
on the faculty of the Economics Department at Harvard University, after which
I served as an economist in the International Finance Division of the Federal
Reserve Board. I was also a faculty member at the London School of Economics
and Political Science before moving to Berkeley.

B. FUTURE EMPLOYMENT RELATIONSHIPS
1. Will you sever all connections (including participation in future benefit arrange-
ments) with your present employers, business firms, associations, or organiza-
tions if you are confirmed by the Senate? If not, provide details.
Yes.
2. Do you have any plans, commitments, or agreements to pursue outside employ-
ment, with or without compensation, during your service with the government?
If so, provide details.
No.
3. Has any person or entity made a commitment or agreement to employ your
services in any capacity after you leave government service? If so, provide de-
tails.
No.
4. If you are confirmed by the Senate, do you expect to serve out your full term
or until the next presidential election, whichever is applicable? If not, explain.
Yes.

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72
C. POTENTIAL CONFLICTS OF INTEREST
1. Indicate any current and former investments, obligations, liabilities, or other
personal relationships, including spousal or family employment, which could in-
volve potential conflicts of interest in the position to which you have been nomi-
nated.
Any potential conflict of interest will be resolved in accordance with the terms
of my ethics agreement, which was developed in consultation with ethics offi-
cials at the Department of the Treasury and the Office of Government Ethics.
I understand that my ethics agreement has been provided to the committee. I
am not aware of any potential conflict other than those addressed by my ethics
agreement.
2. Describe any business relationship, dealing or financial transaction which you
have had during the last 10 years (prior to the date of your nomination), wheth-
er for yourself, on behalf of a client, or acting as an agent, that could in any
way constitute or result in a possible conflict of interest in the position to which
you have been nominated.
Any potential conflict of interest will be resolved in accordance with the terms
of my ethics agreement, which was developed in consultation with ethics offi-
cials at the Department of the Treasury and the Office of Government Ethics.
I understand that my ethics agreement has been provided to the committee. I
am not aware of any potential conflict other than those addressed by my ethics
agreement.
3. Describe any activity during the past 10 years (prior to the date of your nomina-
tion) in which you have engaged for the purpose of directly or indirectly influ-
encing the passage, defeat, or modification of any legislation or affecting the ad-
ministration and execution of law or public policy. Activities performed as an
employee of the Federal Government need not be listed.
In my personal capacity, and solely on my own behalf, I have provided technical
advice and publicly supported the following bills: The Paycheck Recovery Act
(H.R. 6918), The Worker Relief and Security Act (H.R. 7821), and The HEROES
Act (H.R. 6800). On my own behalf, I have also testified before Congress and
advocated for the need of additional fiscal support during the COVID crisis.
4. Explain how you will resolve any potential conflict of interest, including any
that are disclosed by your responses to the above items. (Provide the committee
with two copies of any trust or other agreements.)
Any potential conflict of interest will be resolved in accordance with the terms
of my ethics agreement, which I understand has been provided to the com-
mittee.
5. Two copies of written opinions should be provided directly to the committee by
the designated agency ethics officer of the agency to which you have been nomi-
nated and by the Office of Government Ethics concerning potential conflicts of
interest or any legal impediments to your serving in this position.

D. LEGAL AND OTHER MATTERS
1. Have you ever been the subject of a complaint or been investigated, disciplined,
or otherwise cited for a breach of ethics for unprofessional conduct before any
court, administrative agency (e.g., an Inspector General’s office), professional as-
sociation, disciplinary committee, or other ethics enforcement entity at any
time? Have you ever been interviewed regarding your own conduct as part of
any such inquiry or investigation? If so, provide details, regardless of the out-
come.
In 2015 the Federal Reserve’s Inspector General’s office investigated Medley
Global Advisers’ publication of important information expected to appear in Fed
meeting minutes the next day. I was interviewed in connection with this unau-
thorized disclosure and fully cooperated. The Inspector General’s investigation
was completed.
2. Have you ever been investigated, arrested, charged, or held by any Federal,
State, or other law enforcement authority for a violation of any Federal, State,
county, or municipal law, regulation, or ordinance, other than a minor traffic
offense? Have you ever been interviewed regarding your own conduct as part
of any such inquiry or investigation? If so, provide details.

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No.
3. Have you ever been involved as a party in interest in any administrative agency
proceeding or civil litigation? If so, provide details.
To my knowledge, in my personal capacity I have never been a party in interest
to any administrative agency proceeding or civil litigation. As a Governor and
Chair of the Federal Reserve Board, I was named in my official capacity as a
party in a number of lawsuits. I can provide information on any of those law-
suits if requested by the committee.
4. Have you ever been convicted (including pleas of guilty or nolo contendere) of
any criminal violation other than a minor traffic offense? If so, provide details.
No.
5. Please advise the committee of any additional information, favorable or unfavor-
able, which you feel should be considered in connection with your nomination.
None.

E. TESTIFYING BEFORE CONGRESS
1. If you are confirmed by the Senate, are you willing to appear and testify before
any duly constituted committee of the Congress on such occasions as you may
be reasonably requested to do so?
Yes.
2. If you are confirmed by the Senate, are you willing to provide such information
as is requested by such committees?
Yes.

QUESTIONS SUBMITTED FOR THE RECORD TO HON. JANET L. YELLEN, PH.D.

QUESTIONS SUBMITTED BY HON. CHUCK GRASSLEY
INDIVIDUAL /FAMILY TAX ISSUES

Question. During the campaign, President Biden pledged not to increase taxes on
anyone making under $400,000. However, a significant tax increase will go into ef-
fect on millions of middle-class taxpayers in 2026 unless Congress acts to extend
the tax cuts and reforms enacted in 2017. Given President Biden’s campaign pledge,
will you, if confirmed as Treasury Secretary, work with Republicans in Congress to
make these tax cuts permanent in order to prevent a massive tax increase on Amer-
ican Families?
Answer. Expiration of particular aspects of the Tax Cuts and Jobs Act of 2017
will impact taxpayers with incomes under $400,000. As noted, President Biden
pledged during the campaign that no American taxpayer with income under this
threshold will be subject to a tax increase. If confirmed as Treasury Secretary, I will
work with members of Congress to address the expiration of various aspects of the
2017 tax law, including in particular those that impact middle-class taxpayers and
families with incomes below the $400,000 threshold.
Question. At various times during the campaign, President Biden suggested he
would repeal the Tax Cuts and Jobs Act either in full or in part. Please indicate
(yes or no) whether the incoming Biden administration supports the following:
Would the Biden administration support repealing the doubling of the Child Tax
Credit from $1,000 to $2,000? If no, would the administration support making this
provision permanent?
Would the Biden administration support repealing the enhanced standard deduc-
tion, which increased the standard deduction from $6,500 to $12,000 for singles,
from $13,000 to $24,000 for married couples, and from $9,550 to $18,000 for heads
of household in 2018? If no, would the administration support making this provision
permanent?
Would the Biden administration support repealing the reduced tax rates put in
place for middle-class taxpayers, which included reducing the 15-percent bracket to
12 percent? If no, would the administration support making this provision perma-
nent?

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Would the Biden administration support repealing the qualified business income
deduction, which allows small businesses to deduct up to 20 percent of their quali-
fied business income? If no, would the administration support making this provision
permanent?
Answer. During the campaign, the President advanced a series of principles
around tax policy in general, and the 2017 tax cut in particular. In describing how
he wants to repeal the parts of the 2017 tax cuts that benefited the wealthiest
Americans and large companies, he clarified that the repeal of certain aspects of the
tax law would be restricted only to those taxpayers making more than $400,000 a
year, with a firm commitment that taxpayers earning less than this amount would
not see their taxes increase. At the same time, throughout the campaign and fol-
lowing the presidential election, President Biden has proposed a series of tax cuts
and policy initiatives, such as an expansion in the Child Tax Credit and additional
financial support for small businesses, aimed at strengthening the progressivity of
the tax code and aiding small businesses during the recovery. If confirmed, I will
work with Congress to implement a fair, efficient, pro-growth tax code that provides
relief for middle-class families, workers, and small business owners.
Question. Senate and House Democrats have argued for repealing the $10,000 cap
on the State and local tax (SALT) deduction as part of pandemic relief efforts. Ac-
cording to the Tax Policy Center, a joint project of the Urban Institute and Brook-
ings Institution where you are a distinguished fellow, such a proposal included in
a House-passed pandemic relief measure would provide the top 0.1 percent of house-
holds an average tax cut of nearly $144,000. At the same time it effectively would
give no benefit to the bottom half of households. In your opinion, does it make sense
for pandemic relief efforts to prioritize six-figure tax cuts for the wealthiest few
when millions of middle-class American families are struggling to make ends meet?
Would you oppose including a repeal of the SALT cap in any further relief or stim-
ulus measures?
Answer. See response to the next question.
Question. President Biden’s position on the SALT cap was less than clear during
the campaign. Third-party analyses of his campaign proposals have come to dif-
ferent conclusions on his intentions. For instance, the Tax Policy Center assumes
he would not repeal the SALT cap, but would allow it to expire at the end of 2025.
However, an analysis by the American Enterprise Institute assumes his intent is
to repeal the SALT cap. Can you please clarify what the incoming administration’s
position is regarding the SALT cap?
Answer. In response to both questions, as I noted at the hearing, I certainly be-
lieve in a fair and progressive tax code where wealthy individuals and corporations
pay their fair share. On this issue, as with many others, it is important to consider
the entire equation. For example, it is critical to study and evaluate what the im-
pact of the SALT cap has had on State on local governments, and those who rely
upon their services. I will work with those at Treasury and throughout the adminis-
tration in evaluating those impacts, as well as other aspects of this issue.
Question. President Biden has proposed reducing the estate-tax exemption
amount from the current level of approximately $11.5 million to only $3.5 million,
coupled with an increase in the top estate-tax rate from 40 percent to 45 percent.
This change would disproportionately affect farmers and small business owners in
Iowa and across the Nation through wasteful compliance costs and increased taxes.
If confirmed, will you work to promote tax policy that will not harm farmers and
small business owners and their families?
Answer. If confirmed, I look forward to working with you to advance a range of
policies that the President has proposed to strengthen rural America and small
businesses.
On the President’s estate tax proposal in particular, it may be helpful to note that
only about the wealthiest 6 out of every 1,000 estates would face any tax—less than
1 percent—and every couple with assets under $7 million would be fully exempt
from the estate tax.
RETIREMENT TAX ISSUES

Question. Millions of retirees and participants in multiemployer pension plans
face an impending crisis. Many plans are in poor financial health, and the PBGC’s
multiemployer pension insurance fund is projected to be insolvent in 2026 according
to PBGC’s latest annual report. I am committed to finding a bipartisan solution that

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can resolve this crisis. If confirmed, will you commit to working with this committee
and other interested Senators on a long-term solution that will secure the retire-
ment benefits for these retirees while also reforming the underlying system and en-
suring taxpayer dollars will not be used to finance a private-sector system in per-
petuity?
Answer. This is a critical time for the PBGC. Millions of working people and retir-
ees are counting on it to help pay and secure their hard-earned pensions. I know
Congress has been trying to address the multiemployer pension crisis for a number
of years and, if confirmed, I will work with this committee and the Department of
Labor to find and enact a comprehensive solution to this problem. The President
supports passage of the Butch-Lewis Act, which offers low-interest loans to finan-
cially troubled multiemployer plans—helping them to meet their commitments.
Question. As part of his tax plan, President Biden has promised to change the tax
benefits of contributing to tax-deferred retirement accounts. Under the Biden plan,
instead of contributing pre-tax dollars to a retirement account such as a 401(k),
workers would be entitled to a tax credit equal to after-tax amounts contributed.
If enacted, this approach would significantly change the way Americans save for re-
tirement and could end up discouraging retirement saving. If confirmed, will you
commit to working with this committee to ensure that any changes to the retire-
ment savings system don’t disincentivize workers from saving?
Answer. During the campaign, President Biden called for the equalization of the
tax benefits for retirement saving across the income scale. There are many possible
options for making retirement contributions more generous to middle-income fami-
lies. I look forward to studying this issue further, as a way of building wealth for
the middle class.
Question. As you know, Congress passed the SECURE Act in 2019, which made
improvements to the retirement savings system. There is bipartisan support for ad-
ditional legislation that would further incentivize retirement savings and make it
easier for small businesses to provide employees with a retirement plan. If con-
firmed, will you support this effort?
Answer. I look forward to working with you to find ways to improve the retire-
ment savings system. During the campaign, President Biden proposed to give small
businesses a tax break for starting a retirement plan and giving workers the chance
to save at work. In addition, under the President’s plan, almost all workers without
a pension or 401(k)-type plan will have access to an ‘‘automatic 401(k),’’ which would
provide the opportunity to easily save for retirement at work—putting millions of
middle-class families on the path to a secure retirement.
Question. Multiemployer pension plans are not the only pension plans facing a
looming crisis. Many State and local government pension plans are severely under-
funded and, in too many cases, have been mismanaged. Absent reform, these public
pension plans may soon be unable to pay benefits to retirees, and making matters
worse, these State and local programs have never been covered by the Pension Ben-
efit Guaranty Corporation’s insurance program of last resort. This crisis has caused
some to suggest that the Federal Government should bail out these State-based pen-
sion plans. Instead of taxpayers in all States bearing the responsibility for sub-
sidizing the failing pension plans of a few States, other options should be explored.
For example, private-sector solutions such as annuities could help transfer some of
the risk away from the troubled plans. If confirmed, will you commit to working
with this committee and other interested Senators to evaluate all possible solutions
to this crisis that will secure the retirement benefits for many public-sector retirees
while avoiding the need for taxpayers to subsidize State and local pension benefits?
Answer. If confirmed, I look forward to working with members of this committee
and other Senators to explore this issue and evaluate potential policies that might
address it.
DOMESTIC BUSINESS TAX ISSUES

Question. Prior to the Tax Cuts and Jobs Act (TCJA), the United States had one
of the highest corporate income tax rates among developed countries. TCJA lowered
the corporate rate to ensure that our domestic businesses would remain globally
competitive. Even at 21 percent, the United States still holds the 11th highest cor-

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porate tax rate out of the top 36 developed countries, according to the Tax Policy
Center.1
President Biden has proposed increasing the 21-percent rate to 28 percent. If en-
acted, the United States once again would have one of the highest business tax
rates among developed countries. Unfortunately, not just U.S. companies would be
affected by the rate increase. There is an economic consensus that a significant por-
tion of the corporate income tax falls on workers in the form of reduced wages and
benefits. Even the Tax Policy Center, which is a joint venture of the Urban Institute
and Brookings Institution where you are a Distinguished Fellow, assumes 20 per-
cent of the corporate tax falls on workers. Similarly, the Joint Committee on Tax-
ation and Congressional Budget Office have both concluded that 25 percent of the
corporate tax is borne by workers. If the corporate tax rate is increased to 28 per-
cent as proposed, American workers will also feel the burden through fewer jobs,
reduced wages, and less benefits.
What are your views on increasing the corporate tax rate above that of most de-
veloped countries, particularly if a significant portion of the rate increase would also
be borne by American workers?
With the unemployment rate continuing to be high due to the COVID–19 pan-
demic, wouldn’t an increase in the corporate tax rate that is borne in significant
part by labor hinder efforts to restore the historically low unemployment rates we
saw in 2019?
Answer. As I discussed in my testimony, President Biden’s economic strategy and
investments in people, infrastructure, research and development—will create good-
paying jobs and make our economy more productive. The President believes that it
is critical that we raise additional revenues from the wealthiest Americans and cor-
porations to cover our long-term obligations to our Nation’s seniors and many oth-
ers.
Question. The Tax Cuts and Jobs Act (TCJA) introduced section 199A of the Inter-
nal Revenue Code, which provides a 20-percent deduction for pass-through busi-
nesses, such as sole proprietorships, partnerships and S corporations, with quali-
fying business income. Section 199A was intended to provide parity for pass-through
businesses that did not benefit from the reduction in the corporate tax rate. Most
small businesses operate in pass-through form, and many of these small businesses
have been hardest hit by the COVID–19 pandemic.
How do you view raising taxes on small businesses through the repeal of section
199A?
Answer. President Biden is committed to improving the economic environment for
small businesses through a variety of strategies. This begins with providing nec-
essary support during the pandemic so that small business owners can keep their
lights on, and continues with an assortment of policies that will provide much-
needed capital to aspiring entrepreneurs—especially those in underserved commu-
nities and without existing banking relationships.
For example, in the emergency package he unveiled last week, President Biden
proposed policies that would provide small businesses with the funding they need
to reopen and rebuild. In that package, President Biden proposed to (1) provide $15
billion in grants to more than 1 million of the hardest hit small businesses and (2)
leverage $35 billion in government funds into $175 billion in additional small busi-
ness lending and investment to help entrepreneurs innovate, create and maintain
jobs, build wealth, and provide the essential goods and services that communities
depend on.
President Biden is also committed to a tax code which rewards work, not just
wealth, and this extends to the work supplied by small business owners. As section
199A is a relatively new provision, I commit to studying its impact on small busi-
nesses since its inception to determine the extent to which it is helping to improve
the prospects of America’s small business owners.
Question. Currently, under section 174 of the Internal Revenue Code, U.S. busi-
nesses can immediately deduct research and experimental (R&E) costs, incentivizing
research investment and job creation in the United States. Beginning next year,
however, U.S. businesses will be required to capitalize and amortize those costs over

1 https://www.taxpolicycenter.org/fiscal-fact/oecd-corporate-tax-rate-ff-01042021.

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5 years rather than immediately deducting them. Immediate expensing of research
expenditures provides a critical incentive for investment in innovation.
President Biden’s ‘‘Made in America’’ tax proposals suggest that the Biden admin-
istration plans to encourage investment in manufacturing, jobs, and innovation in
the United States. Would you support maintaining the current immediate deduct-
ibility of R&E expenses, particularly during the COVID–19 pandemic when ad-
vances in innovation are critical?
Answer. See immediately below for a combined response to both questions.
Question. As a result of the Tax Cuts and Jobs Act (TCJA), business interest de-
ductions were limited to 30 percent of earnings before interest, taxes, depreciation
and amortization (EBITDA). However, after this year, the limitation will be reduced
further to 30 percent of earnings before interest and taxes (EBIT). As a result, U.S.
businesses with significant depreciation, such as manufacturers, will see the amount
of interest they can deduct drastically limited, thereby increasing the cost of capital.
What are your views on further limiting the ability of U.S. businesses to deduct in-
terest, particularly at a time when some U.S. companies are borrowing to keep their
doors open and employees on payroll?
Answer. President Biden has proposed an array of reforms that would ensure the
wealthiest taxpayers and corporations pay their fair share. These and other pro-
posals will be further developed as part of the budget process, and, if confirmed, I
look forward to continued conversations with you about the President’s legislative
agenda.
If confirmed, I will carefully consider the concerns you raise regarding deduct-
ibility of research expenditures and limitations on business interest deductions, pay-
ing particular attention to any effects on small businesses during the recovery.
Question. President Biden has proposed a new 15-percent corporate minimum tax
based on book income, rather than taxable income as currently used in the tax code.
As you know, book income, as reported on a company’s financial statements, is de-
signed to provide information on the company’s performance for investors and credi-
tors based on generally accepted accounting principles. On the other hand, taxable
income is computed in accordance with the Internal Revenue Code and regulations
as the basis for imposing taxes.
Under the tax code, U.S. taxpayers are permitted to adjust their taxable income
by allowable deductions, many of which reflect incentives that Congress intended to
encourage certain behavior. For example, bonus depreciation is intended to encour-
age U.S. companies to invest more in capital expenditures, like equipment and fixed
assets. Imposing a minimum tax would effectively remove the benefit and under-
mine the legislative intent of those provisions. Further, it would require companies
and the IRS to calculate tax liability under different tax bases, creating significant
complexity for taxpayers and the IRS.
Given the important differences between accounting principles and the deductions
permitted by the tax code, do you agree there are legitimate reasons for substantial
differences between book income and taxable income and that book income is not
an appropriate basis for a new alternative tax regime?
Answer. The minimum book tax proposal was directed at asking those companies
with low or zero tax liabilities to pay their fair share. Research has identified many
examples of corporations with a large gap between their tax and book income. A
minimum book tax could help recapture the tax revenue lost to gaming and tax
avoidance. I look forward to working with you and others on this committee on this
issue, if confirmed.
Question. Under the Coronavirus Aid, Relief, and Economic Security (CARES) Act,
Congress created a temporary rule allowing U.S. businesses to carry back net oper-
ating losses (NOLs) incurred in 2018, 2019, and 2020 to the prior 5 years. In the
Health and Economic Recovery Omnibus Emergency Solutions (HEROES) Act,
House Democrats proposed to repeal the CARES Act NOL provisions, effectively im-
posing a retroactive tax increase on businesses experiencing losses as a result of the
pandemic. The expected revenue effect of the changes proposed in the HEROES Act
was nearly $250 billion. Do you support this kind of retroactive tax change that
would significantly increase taxes on businesses experiencing losses? Do you agree
with former President Obama’s sound advice when he said during the aftermath of
the financial crisis, ‘‘The last thing you want to do is raise taxes in the middle of
a recession’’?

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Answer. During the campaign, President Biden proposed an array of reforms that
would ensure the wealthiest taxpayers and corporations pay their fair share, includ-
ing proposals to increase the corporate tax rate to 28 percent and ensure robust tax-
ation of overseas profits. These proposals will be further developed as part of the
budget process and, if confirmed, I look forward to continued conversations with you
about the President’s legislative agenda. To the second part of your question, as I
stated in my testimony, the administration’s immediate focus is ending the pan-
demic and helping families get through the economic and public health crisis.
INTERNATIONAL BUSINESS TAX

Question. Senator Wyden and I have been aligned in our opposition to digital
services taxes that unfairly discriminate against U.S. companies. To date, it has
been the administration’s position that any solution reached at the OECD should
not ‘‘ring-fence’’ the digital economy, as it would disproportionately burden the U.S.
business community and adversely affect U.S. fiscal security. Will you continue to
negotiate towards a multilateral agreement at the OECD that does not unfairly tar-
get U.S. companies and compromise the U.S. tax base?
Answer. Yes, we are committed to the cooperative multilateral effort to address
base erosion and profit shifting through the OECD/G20 process, and to resolving the
digital taxation disputes in that context.
Question. A multilateral agreement reached at the OECD may require Congress
to ratify a multilateral treaty and enact implementing legislation. It will become in-
creasingly important that Congress be closely engaged with the OECD process to
ensure members are on board with any potential legislative changes that may be
necessary. As negotiations continue at the OECD, will you commit to keeping the
tax-writing committees apprised of negotiations and developments occurring at the
OECD?
Answer. If confirmed, I very much look forward to working with the tax-writing
committees as we work through the OECD to update global tax rules in ways that
stop the race to the bottom on corporate taxation, and prevent global profit-shifting,
while securing the competitiveness of U.S. companies.
Question. Pillar 2 of the OECD’s proposed ‘‘unified approach’’ would effectively
create a global minimum tax. The Treasury Department to date has made it a pri-
ority that the U.S. global intangible low-taxed income (or GILTI) tax regime would
be treated as a ‘‘deemed compliant’’ regime under any multilateral agreement. Do
you plan to continue to advocate for GILTI to be treated as a deemed-compliant re-
gime under Pillar 2?
Answer. The Biden-Harris administration will pursue a comprehensive multi-
national agreement to update global tax rules in ways that establish effective min-
imum taxation rules, prevent global profit-shifting, and ensure that corporations
pay their fair share. We will pursue in a manner that will maintain competitiveness
and diminish the incentives that American companies now have to offshore activi-
ties. I look forward to working with you and your staff on this important issue.
Question. As part of the proposed Pillar 2 approach, the OECD has proposed an
‘‘undertaxed payment rule’’ that would complement the global minimum tax. The
undertaxed payment rule effectively would tax a business on a payment made if the
recipient business is not subject to a certain level of tax with respect to the pay-
ment. U.S. businesses have voiced concerns that payments received by a U.S. com-
pany from a foreign affiliate could be subject to the undertaxed payment rule if the
payment receives preferential treatment under the foreign derived intangible in-
come (FDII) regime or through the application of another preferential rate or credit
regime. Will you advocate to preserve the application of U.S. tax law, including FDII
and other preferential rates and credits, if Pillar 2 includes an undertaxed payment
rule?
Answer. See response to the previous question.
Question. The Tax Cuts and Jobs Act (TCJA) created several new international
tax regimes, including global intangible low-taxed income (GILTI), foreign derived
intangible income (FDII) and the base erosion anti-abuse tax (BEAT). The Treasury
Department has published extensive proposed regulations that were analyzed, re-
fined, and finalized through a thorough review and comment process, consistent
with the Administrative Procedure Act (APA). What are your plans for reviewing
and /or revising regulations in these areas?

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Answer. If confirmed, I will implement and enforce tax laws fairly. Any review
of regulations will be done to ensure they are consistent with the law and congres-
sional intent.
Question. President Biden has claimed that the Tax Cuts and Jobs Act (TCJA)
incentivized U.S. companies to move manufacturing and intangible property over-
seas. As I’ve previously pointed out, these claims aren’t supported by the facts. The
nonpartisan Joint Committee on Taxation has concluded that the TCJA inter-
national provisions ‘‘are expected to reduce the incentives for this ‘profit-shifting’ ac-
tivity, resulting in an increase in the U.S. tax base.’’2
Further, available data confirms that TCJA is actually encouraging companies to
invest more in the United States. Data from the Bureau of Economic Analysis (BEA)
show that, among U.S. multinationals, employment, investment, research, and pro-
duction in the United States has increased at a faster rate in 2018 than the average
rate over the past 20 years and faster than the growth rate of U.S. multinational
companies abroad.3 BEA data also illustrates that the quarterly average of dividend
repatriations to the United States from foreign entities has tripled in the years since
the enactment of the TCJA.4 Do you agree that significant changes should not be
made to the international tax system until the data on U.S. and foreign investment
and repatriation are fully analyzed and understood, and it can be confirmed that
any such change would not reduce the rate of employment, investment, research,
and production in the United States?
Answer. I look forward to working with the dedicated career professionals at the
Treasury Department to ground tax policy-making in the best available research
and evidence. President Biden has laid out an ambitious set of tax proposals that
would ensure that the wealthy and corporations pay their fair share, including pro-
posals to increase the corporate rate to 28 percent and eliminate incentives for
American companies to offshore operations. These and other proposals will be devel-
oped further as part of the budget process, during which they will benefit from the
expertise of Treasury’s professional tax staff.
Question. President Biden has proposed doubling the tax rate on global intangible
low-taxed income (GILTI) earned by foreign subsidiaries of U.S. companies from
10.5 percent to 21 percent. The Biden proposal also would eliminate GILTI’s exemp-
tion for deemed returns under 10 percent of qualified business asset investment
(QBAI). While described as a ‘‘loophole,’’ QBAI is intended to represent earnings at-
tributable to physical infrastructure in a foreign country. Because GILTI is intended
to target intangible income, income attributable to tangible income should not be
subject to tax.
While President Biden has described GILTI as an incentive for U.S. companies
to shift operations overseas, before the Tax Cuts and Jobs Act (TCJA), many U.S.
companies paid no U.S. tax on their foreign earnings. An increase in the GILTI rate
to 21 percent would make U.S. companies far less competitive with their foreign
counterparts because most foreign countries do not subject a company’s foreign
earnings to the same level of tax as domestic earnings. Coupled with the elimination
of QBAI, raising the rate to 21 percent would actually incentivize U.S. companies
to invert or be acquired by foreign companies, particularly given that the OECD is
currently considering a global minimum tax around 13 percent.
What is your view on the United States imposing a 21-percent tax on foreign
earnings if the OECD is planning to implement a global minimum tax at or around
13 percent? Wouldn’t that harm our U.S. companies by making them far less com-
petitive?
Answer. I appreciate the concern with regard to the competitiveness of our U.S.
companies amidst a changing international tax landscape. A global minimum tax
agreed to at the OECD could, however, stop the destructive global race to the bot-
tom on corporate taxation and help discourage harmful profit-shifting.
Question. President Biden’s ‘‘Made in America’’ proposal includes a 10-percent
penalty on goods and services imported by U.S. companies from foreign affiliates.
This policy would only penalize U.S. companies, putting them at a competitive dis-
advantage with similarly situated foreign companies. It also ignores the reality of
global supply chains. If our country penalizes imports from foreign countries,

2 Joint Committee on Taxation, ‘‘Macroeconomic Analysis of the Conference Agreement for
H.R. 1, the Tax Cuts and Jobs Act,’’ JCX–69–17 (December 22, 2017) at 6.
3 https://www.bea.gov/news/2020/activities-us-multinational-enterprises-2018.
4 https://www.bea.gov/news/2020/us-international-transactions-third-quarter-2020.

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couldn’t this policy encourage foreign countries to tax goods or services imported
from the United States?
Answer. The President’s objective is to create incentives for American companies
to create and maintain jobs at home. President Biden’s Offshoring Tax Penalty is
specifically aimed at those who offshore manufacturing and service jobs to foreign
nations in order to sell goods or provide services back to the American market when
those jobs could have been done by U.S. workers.
Question. As you are likely aware, there are three new tax treaties with Poland,
Chile, and Hungary that have been pending with the Senate for a number of years.
For each of these new treaties, there is an open question as to how to resolve an
interaction with the base erosion anti-abuse tax (or BEAT), an international provi-
sion enacted as part of the Tax Cuts and Jobs Act after these treaties were con-
cluded. Will you make it a priority for the Treasury Department to work with this
committee and the Senate Foreign Relations Committee to ensure that these trea-
ties are ratified and implemented as quickly as possible?
Answer. If confirmed, I look forward to working with the relevant committees of
jurisdiction to address the ratification issues that have arisen with respect to the
outstanding, concluded, but, as yet, unratified tax treaties with Chile, Hungary, and
Poland.
Question. The Treasury Department and Office of Management and Budget
(OMB) currently have a memorandum of understanding in place under which
OMB’s Office of Information and Regulatory Affairs (OIRA) reviews significant tax
regulations issued by the Treasury Department. What is your view of the OIRA re-
view process for significant tax regulations, and do you intend to preserve the ar-
rangement requiring OIRA to review Treasury regulations?
Answer. I am committed to a robust and rational regulatory process. Regulatory
decisions should be made based on careful consideration of the effects of potential
regulatory choices.
Question. Technical corrections are an inevitable but essential component of any
newly enacted legislation, including the Tax Cuts and Jobs Act (TCJA). Without en-
actment of the TCJA technical corrections, the legislation will not operate fully as
intended. Unfortunately, the TCJA technical corrections haven’t advanced in Con-
gress due to political issues, leaving taxpayers with unnecessary uncertainty, com-
pliance burdens, and hampering efforts to prevent abuse. Will you work with the
tax-writing committees to provide technical advice and support enactment of tech-
nical corrections to TCJA and other tax legislation?
Answer. If confirmed, I would be committed to working with the tax-writing com-
mittees on technical corrections on all legislation.
OTHER TAX ISSUES

Question. Recently President Biden spoke about the need to help small businesses
during the pandemic. In so doing, he qualified his remarks by saying, ‘‘Our priority
will be black-, Latino-, Asian-, and Native American-owned small businesses,
women-owned businesses, and finally having equal access to resources needed to re-
open and rebuild.’’5 Can you commit that, if you are confirmed, the Treasury De-
partment will enforce the law equally for all Americans regardless of their race, sex,
sexual orientation, or political beliefs?
Answer. If confirmed, I would be committed to ensuring that the Treasury Depart-
ment and the IRS administer tax laws in a fair and even-handed manner, applying
the law equally to all Americans. This includes by helping small business owners
from historically marginalized communities have access to resources needed to re-
open and rebuild.
Question. You have mentioned that there is more than a $7-trillion so-called ‘‘tax
gap’’ projected for the next 10 years. The tax gap is often mentioned as a way to
pay for things, but I have yet to see much in terms of concrete results from talk
about closing the tax gap.
We have heard from many, including Treasury Secretary Mnuchin, that addi-
tional funding for the IRS to perform more audits, for example, could be fruitful.
But it won’t be fruitful if funds are used to target tax-exempt organizations whose
political beliefs do not align with the administrations.

5 https://twitter.com/Transition46/status/1348403213200990209.

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According to an October, 2020, post on the IRS website from an IRS enforcement
official: ‘‘Despite common misperceptions about IRS examination rates, the reality
is that the likelihood of an audit significantly increases as income grows.’’ There are
other useful facts offered, some of which don’t align with what we often see put for-
ward by so-called activists.
Will you commit to working with the committee, on both sides, to separate the
myths from the facts and help ensure that any additional resources for the IRS are
used most efficiently?
Answer. If confirmed, I would be committed to ensuring that the Treasury Depart-
ment and the IRS administer tax laws in a fair and even-handed manner, keeping
politics out of the process. I will work with Congress to ensure that any increase
in the IRS budget and staff is used fairly and efficiently.
Question. In 2006, I authored important updates to the IRS whistleblower pro-
gram. Since that time, the program has been one of the most effective programs in
addressing tax evasion, leading to the recovery of more than $6.1 billion in taxes
that would have otherwise been lost to fraud. While over the years the IRS has
taken a number of steps to improve the administration of whistleblower program,
there is always room for improvement. According to the Fiscal Year 2020 IRS Whis-
tleblower Report, over the past 2 years awards to whistleblowers have markedly de-
clined while award-processing times have continued to steadily climb. As Treasury
Secretary, will you commit to supporting the whistleblower program and to work
with me, the IRS, and stakeholders to make improvements where necessary to en-
sure the program’s continued success?
Answer. Whistleblowers are an important asset to the integrity of the agency and
tax system more generally, and I will work to create an agency culture that respects
whistleblowers and the laws that protect them.
Question. I have been a strong proponent of the bipartisan IRS private debt collec-
tion program, along with 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 collec-
tors to collect inactive tax debt due but unpaid. These are the tax debts not being
worked by the IRS and, absent this program, would likely never be collected. The
program has proven its ability to collect hundreds of millions of dollars in otherwise
uncollectible tax debts on an annual basis, including generating nearly half a billion
dollars in net revenue in fiscal year 2020 alone. At the same time, it has generated
additional resources for the IRS that have enabled the IRS to hire 400 compliance
personnel and collect millions more in additional revenue. As Treasury Secretary,
can you assure me that the Treasury Department will continue to operate the pro-
gram to the full extent authorized under the law, including by ensuring that all in-
active debts as defined by the statute are provided to the collection companies in
a timely fashion?
Answer. If confirmed, I will work with the IRS to make sure that taxes are col-
lected in an efficient and effective manner.
Question. In late 2019, the IRS announced that it was increasing its enforcement
efforts against participants and promoters of syndicated conservation-easement
transactions. This past summer, Senator Wyden and I released a report following
our investigation into these transactions, showing them to be highly abusive tax
shelters. The IRS estimates that promoters of these tax shelters have generated
about $36 billion worth of illicit deductions for their customers between 2010 and
2018. As Treasury Secretary, will you commit to maintaining the IRS’s enforcement
efforts against syndicated conservation-easement transactions and work with this
committee to enact legislation to prohibit abusive conservation-easement trans-
actions?
Answer. If confirmed, I will work to ensure that the IRS’s enforcement efforts are
aimed at abusive tax shelters of any kind, and look forward to considering and
working with you on the specific issue you raised.
Question. Over the last decade, accounts known as donor advised funds have
grown substantially in popularity and are now estimated to hold over $120 billion
worth of assets. These funds allow donors to claim a charitable tax deduction when
they give money to the fund but before any of those dollars are provided to working
charities. Do you foresee the Treasury Department regulating in this area to in-
crease the flow of money out of these funds and into the hands of working charities?

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Answer. I believe it is imperative that we continuously examine various tax pref-
erences and deductions to ensure they are achieving their desired social and eco-
nomic objectives. I look forward to working with the Treasury and the IRS, if con-
firmed, to learn more about areas such as this when developing a robust tax regu-
latory agenda to ensure the country’s tax laws are implemented and enforced fairly
and effectively.
MATTERS RELATED TO FSOC, OFR, AND FINANCIAL REGULATION

Question. The Financial Stability Oversight Council is charged, in part, with iden-
tifying risk to the financial stability of the U.S.
How do you define financial stability, and how do you measure it?
How do you define systemic risk, and how do you measure it?
What are the limiting principles that allow one to separate risks that are systemic
from those that are not?
Answer. As you know, the Financial Stability Oversight Council (FSOC) was cre-
ated by Congress under the Dodd-Frank Wall Street Reform and Consumer Protec-
tion Act (DFA) following the Financial Crisis that brought the U.S. economy and
financial system to the brink of collapse. When the executive branch implements
laws passed by Congress, including carrying out the duties and fulfilling the respon-
sibilities of the FSOC, we should look to the law that created the FSOC.
While the DFA does not define either financial stability or systemic risk explicitly,
various provisions in the DFA use language that appears to indicate congressional
intent in how the law should be viewed and executed. For instance, the long title
of the legislation itself is instructive: ‘‘An Act to promote the financial stability of
the United States by improving accountability and transparency in the financial sys-
tem, to end too big to fail, to protect the American taxpayer by ending bailouts, to
protect consumers from abusive financial services practices, and for other purposes.’’
That is, Congress intended for the executive branch to promote financial stability
by implementing those provisions that Congress carefully crafted and spelled out in
the DFA after numerous hearings, meetings, and discussions and after a lengthy,
and thorough legislative process, ranging from the enhanced prudential supervision
provisions in title I (which is entitled ‘‘Financial Stability Act of 2010’’), orderly liq-
uidation authority in title II, and consumer protection provisions in title X.
Indeed, one of the missions of the FSOC itself as spelled out by Congress with
regard to financial stability in the DFA is as follows: ‘‘to identify risks to the finan-
cial stability of the United States that could arise from the material financial dis-
tress or failure, or ongoing activities, of large, interconnected bank holding compa-
nies or nonbank financial companies, or that could arise outside the financial serv-
ices marketplace.’’ This provision appears rooted in the experiences of the Financial
Crisis, when the U.S. economy was close to ruin following the failures and near fail-
ures of large, interconnected bank holding companies and nonbank financial compa-
nies that threatened and undermined financial stability.
One of the criticisms of the prior regulatory architecture was that each functional
regulator was in its silo and none was charged with holistically monitoring the fi-
nancial system for risks that could threaten financial stability. Therefore, a core
mission of the FSOC given by Congress is to monitor the financial system for
risks—systemic risks—that could threaten financial stability by convening and co-
ordinating with a group of regulators and staying vigilant in its mission.
In terms of systemic risk, the DFA includes provisions that discuss systemic risk
beyond titles I and II of the DFA. For instance, a number of provisions address sys-
temic risk in title VII (‘‘Wall Street Transparency and Accountability Act of 2010’’)
as well as title VIII (‘‘Payment, Clearing, and Settlement Supervision Act of 2010’’).
In title VII, Congress clearly had systemic risk in mind when creating a paradigm
for regulating derivatives for the first time, for example mandating that ‘‘In order
to minimize systemic risk, under no circumstances shall a derivatives clearing orga-
nization be compelled to accept the counterparty credit risk of another clearing orga-
nization.’’
And in title VIII, Congress further set forth provisions relating to systemic risk
in addressing systemically important financial market utilities:
‘‘The purpose of this title is to mitigate systemic risk in the financial system and
promote financial stability by—
(1) authorizing the Board of Governors to promote uniform standards for the—

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(A) management of risks by systemically important financial market utilities; and
(B) conduct of systemically important payment, clearing, and settlement activities
by financial institutions;
(2) providing the Board of Governors an enhanced role in the supervision of risk
management standards for systemically important financial market utilities;
(3) strengthening the liquidity of systemically important financial market utili-
ties; and
(4) providing the Board of Governors an enhanced role in the supervision of risk
management standards for systemically important payment, clearing, and settle-
ment activities by financial institutions.’’
Question. Large financial institutions are required to submit ‘‘living wills’’ to regu-
lators, and ‘‘stress tests’’ are performed on those institutions. Part of the reason of-
fered for those examinations of the institutions is that it is instructive to assess
roadmaps of how institutions are arranged, and how they might respond to stressed
conditions.
President Biden, in December of 2020, criticized the Federal Government as hav-
ing been caught off guard and unprepared for cyberattacks, in association with
breaches of the SolarWinds/Orion platform.
Members of the Senate Finance Committee and House Financial Services Com-
mittee during the Obama administration requested, numerous times and through
many mechanisms, detailed information from the U.S. Treasury and Federal Re-
serve about contingency plans at Treasury and the Federal Reserve for any inability
of the Federal Government to make timely payments on Federal debt obligations.
Such an inability could arise because of cyber-attacks, a super-storm such as Sandy,
breach of the debt limit, or other factors that temporarily knocks out Federal proc-
essing systems in financial networks or legal authorities to pay. Inquiries were
made of you, Dr. Yellen, when you served as Chair of the Federal Reserve Board,
though many believe that your responses were not complete or fully revelatory.
If requested, will you commit to providing Finance Committee members, who have
oversight responsibility over Federal debt, with details of Treasury’s contingency
plans for what to do in the event that, for whatever reason, the Federal Government
is temporarily unable to make timely payments on debt obligations?
Answer. I respect congressional oversight and look forward to addressing your
questions about debt management, if confirmed. The market for U.S. debt is the
most liquid and the deepest government securities market. It is essential that we
take every step to ensure this never changes. This includes continuing to maintain
the effective operations of our debt management team. I am committed to taking
steps to ensure that we avoid the risks you outlined. As for one of the scenarios
mentioned in the question—breach of the debt limit—as you know there are a hand-
ful of steps that a Treasury Secretary can take to delay the harmful impacts of a
binding debt limit, and previous secretaries in both Democratic and Republican Ad-
ministrations have taken steps to address this. Ultimately, the ability to avoid a
debt ceiling impasse rests with Congress. Again, I would certainly want to work
closely with Congress to address in advance the issue of the debt limit to avoid its
harmful effects.
Question. You have identified to the committee that you ‘‘helped to establish a Di-
vision of Financial Stability at the Federal Reserve Board.’’ Presumably, that Divi-
sion has at its disposal resources from the Federal Reserve’s budget to perform re-
search on financial stability. At the same time, the Office of Financial Research like-
ly engages in research on financial stability.
Why is it efficient or productive to have multiple agencies performing like re-
search?
If implications of research from differing agencies differ, presumably disagree-
ments or understandings could be reached bureaucratically within the FSOC struc-
ture, but is there any reason to be concerned about setting up structures that could
lead to lack of accountability and abilities for agencies to point fingers at one an-
other for failures in the event that we realize financial instability?
Answer. Congress created the Office of Financial Research (OFR) in the Dodd-
Frank Wall Street Reform and Consumer Protection Act of 2010 to support the Fi-
nancial Stability Oversight Council (FSOC) in its mission, among others, to monitor
the financial system for risks that could threaten financial stability:

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‘‘The purpose of the Office is to support the Council in fulfilling the purposes and
duties of the Council, as set forth in subtitle A, and to support member agencies,
by—
(1) collecting data on behalf of the Council, and providing such data to the Coun-
cil and member agencies;
(2) standardizing the types and formats of data reported and collected;
(3) performing applied research and essential long-term research;
(4) developing tools for risk measurement and monitoring;
(5) performing other related services;
(6) making the results of the activities of the Office available to financial regu-
latory agencies; and
(7) assisting such member agencies in determining the types and formats of data
authorized by this Act to be collected by such member agencies.’’
While a division of the Federal Reserve would presumably support the Federal
Reserve, the OFR by statute is mandated to support the entire FSOC by, among
others, providing data to the member agencies of the FSOC as well as making the
results of its activities available to financial regulatory agencies.
It may be that each member agency has some capability related to financial sta-
bility from that agency’s perspective. It appears clear from the statutory language,
however, that Congress created the FSOC to, among others, play a coordinating role
among the member agencies to provide a holistic view of overall risks to the finan-
cial system, and created the OFR to support the FSOC in its endeavors in terms
of data and research.
Question. You and other anticipated Biden nominees for Treasury positions have
signaled that you have interest in somehow building up the Office of Financial Re-
search (OFR). That Office, set up by the Dodd-Frank Act, promised a lot in terms
of essentially scanning the financial landscape to find heat maps of risks to a weak-
ly defined notion of ‘‘financial stability,’’ but delivered little of use. The OFR simi-
larly utilized taxpayer resources on a quest to expand Legal Entity Identifiers to
help monitor the financial landscape and activities; again, lots of promise, but little
return for the investment of taxpayer resources. What, in particular and in terms
of details, do you intend to do to beef up the OFR, and why do you think it will
be useful outside of employing yet more government researchers and bureaucrats
and arranging more seminar and research conferences?
Answer. Congress created the Office of Financial Research (OFR) in the Dodd-
Frank Wall Street Reform and Consumer Protection Act of 2010 to support the Fi-
nancial Stability Oversight Council (FSOC) in its mission, among others, to monitor
the financial system for risks that could threaten financial stability. In creating the
OFR, Congress explicitly mandated that the OFR would fund itself not from tax-
payer dollars, but instead from assessments on large, complex bank holding compa-
nies and nonbank financial companies designated for supervision by the Federal Re-
serve.
The mission of the OFR is an important one—that of supporting the FSOC with
data and research capabilities—but it is by no means a cure-all for all policy ques-
tions and issues and, like any other organization, it is only as capable as the staff
and the resources allocated allow it to be. It has been reported that the staffing level
at the OFR has been reduced significantly in the past 4 years, and while it cannot
be said with certainty at this point exactly what the specific staffing level or scope
of assignment should be, it seems clear that there should be an assessment of staff-
ing for the OFR to appropriately fulfill its statutory mission of providing support
for the FSOC.
Question. In a 2012 paper titled ‘‘Behaviorally Informed Regulation,’’ authors Mi-
chael S. Barr, Sendhil Mullainathat, and Eldar Shfir proposed, among other things,
a scheme in which credit-card issuing firms could charge late fees that ‘‘they deemed
appropriate, but the bulk of such fees would be placed in a public trust to be used
for financial education and assistance to troubled borrowers.’’ Firms could keep a
share of the fees, but ‘‘the bulk’’ of the fees would effectively be nationalized and
presumably controlled by the Federal Government’s behaviorists. Do you support
such a scheme of effectively nationalizing late fees on things like credit cards?
Answer. With the establishment of the Consumer Financial Protection Bureau
(CFPB), that agency is responsible for consumer financial protection regulation.
Congress enacted the CARD Act, which reformed credit card practices. My under-
standing is that these reforms have improved consumer experiences and reduced
consumer costs.

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Question. What would a ‘‘new Dodd Frank’’ entail?
Do you think that the Dodd-Frank legislation failed and there is, therefore, a need
for a new one?
Answer. Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010
(DFA) was enacted by Congress in the aftermath of the Financial Crisis to address,
among others, issues raised by the large, complex financial institutions whose mate-
rial distress and failure threatened financial stability, and to strengthen the finan-
cial system to better withstand future crises.
The FSOC was one of the reforms to come out of the DFA, whose statutory mis-
sion is to monitor threats to financial stability. Other reforms included enhanced
prudential standards, living wills, and stress tests, among others, that helped to
strengthen the financial system compared to the pre-Financial Crisis era. While the
DFA was helpful in providing authorities to address issues highlighted by the Fi-
nancial Crisis, the passage of time has also shed light on new issues that may be
necessary to deal with. If confirmed, I would be glad to work with Congress to dis-
cuss whether and how to further strengthen our oversight of the financial system.
Question. Do you intend to, in effect, resurrect and expand on the ‘‘operation
chokepoint’’ efforts of the Obama administration through regulatory actions to have
financial firms channel or restrict credit according to partisan and normative views,
perhaps under the guise of ‘‘reputation risk’’?
Answer. As you know, regulatory actions generally would be the purview of the
prudential regulators—not the Treasury Department—and the regulators operate as
independent agencies not under the supervision of the Treasury Department. That
said, I understand that this is an issue of importance, and if confirmed, I would be
happy to discuss this issue further to ensure that I’m fully appreciative of your con-
cerns.
Question. Do you intend to take regulatory actions using authorities at the Finan-
cial Stability Oversight Council to have financial firms channel or restrict credit ac-
cording to partisan and normative views?
Answer. Congress created the Financial Stability Oversight Council (FSOC) under
the Dodd-Frank Wall Street Reform and Consumer Protection Act (DFA) following
the Financial Crisis to, among others, monitor threats to financial stability. In my
view, maintaining the stability of the U.S. financial system is not, and should not
be, a partisan issue, and if I have the honor of being confirmed, I would faithfully
execute the laws that Congress passed to safeguard our economy and our financial
system. And in carrying out the duties of the Treasury Secretary under the statutes
enacted by Congress, I hope to work with Congress to understand the views and
concerns of members of Congress.
CLIMATE CHANGE AND REGULATION

Question. In your October 2020 Group of Thirty (G30) paper, from a working
group on climate change and finance that you co-chaired with Mark Carney, titled
‘‘Mainstreaming the Transition to a Net-Zero Economy,’’ you call for establishment
of independent ‘‘Carbon Councils,’’ and advocate for governments to delegate deci-
sions to those councils to determine policies toward climate change that are insu-
lated from ‘‘short-term political preferences.’’
Please describe whether you will advocate for such global climate councils, which
would remove decision-making and authority from Congress, and why you think
that would be good for constituents that members of Congress represent and for the
democratic process?
You also call for governments to set clear timelines for making climate-related fi-
nancial disclosures by private-sector entities ‘‘mandatory by 2023.’’ What would that
mean for the U.S., and is that something you will try to do administratively, per-
haps through an interpretation of FSOC authorities?
Answer. Climate change is an existential threat to not only our environment, but
also our economy. President Biden has released a detailed plan to combat climate
change, including rejoining the Paris Agreement, investing in sustainable infra-
structure, and creating new green jobs. If confirmed, I will support him in imple-
menting that plan at the Treasury. As we discussed in the Finance Committee pol-
icy meeting prior to my confirmation hearing, the views expressed in this paper are
not views that I’ve discussed with President Biden and are not part of the Presi-
dent’s planned approach to address the climate crisis. President Biden and I both

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respect Congress’s vital role in addressing this issue and we hope to work with
members of this committee and others in Congress to pass legislation needed to
combat this urgent threat.
Moreover, climate change poses a potential systemic risk to the American econ-
omy, and I believe we must seriously look at assessing the risks to the financial sys-
tem from climate change. This will be an issue regulators will also have to think
more about in the years ahead, and we need to ensure that we have appropriate
processes and regulations necessary to assess and mitigate this risk.
Question. The Climate 21 Project, which ‘‘taps the expertise of more than 150 ex-
perts with high-level government experience, including nine former cabinet ap-
pointees, to deliver actionable advice for a rapid-start, whole-of-government climate
response coordinated by the White House and accountable to the President,’’ pro-
duced a ‘‘Transition Memo’’ for the Department of the Treasury. The 22-page memo
provides a detailed listing, and timeline, for development of the unelected authors’
preferred agenda for tackling climate challenges at Treasury.
What recommendations of the Climate 21 Project’s Transition Memo for Treasury
do you intend to implement?
Answer. The President and I plan to listen to and incorporate input from many
stakeholders in developing the administration’s climate policy. Some of the sugges-
tions in the memo—including announcing a commitment to this issue and inte-
grating climate into our international diplomacy—are actions President Biden has
already made clear will be taken across this administration. Going forward, the
President’s climate agenda will follow from the ambitious plan he has laid out.
Question. You have mentioned ‘‘stranded assets’’ several times during your con-
firmation process as a risk from climate change that you seem to believe could be-
come some sort of aspect of a risk to financial stability.
Is the anticipated shut-down of the Keystone XL project by the incoming adminis-
tration an example of stranded assets, where investments have been made and the
Federal Government intervenes to strand them and make them worthless?
Is one of the largest risks to realizing large amounts of stranded assets a risk that
the Federal Government will take unanticipated (when the investments were made)
actions to make such assets essentially worthless, because of actions by the Federal
Government intended to shut down production in sectors such as coal or other ‘‘fos-
sil fuels?’’
Answer. Stranded assets are a possible result when new forms of clean energy,
transportation, and production displace those that have contributed to climate
change. While government policy can play a role in setting market incentives, the
transition from the finite supply of fossil fuels and other energy sources that con-
tribute to climate change with renewable energy sources is not a decision or choice.
Climate change is an existential threat to not only our environment, but also our
economy. If confirmed, I will work with President Biden to help build a sustainable
and more resilient economy.
TREASURY ADMINISTRATIVE MATTERS

Question. Do you intend to resurrect the Obama administrations failed and ill-
designed myRA retirement savings scheme, partly by misusing the permanent, in-
definite appropriation provided to Treasury for compensating financial agents?
Answer. The myRA retirement savings account, intended for people with taxable
compensation income but who lack access to an employer-sponsored retirement plan,
was designed to remove common barriers to saving, and give people an easy way
to get started. If confirmed, I would want to assess whether this product or any
other vehicle to promote savings would be appropriate and in demand under these
new economic conditions.
Question. Will you commit to providing the committee with a frequently updated
listing of financial agents, and their contractual responsibilities to Treasury, and all
fiscal agency agreements with the Federal Reserve?
Answer. The National Bank Acts of 1863 and 1864 grant the Treasury Depart-
ment the authority to retain financial agents to provide services on its behalf. Fi-
nancial agents have the fiduciary obligation to protect the interests of the United
States. Financial Agency Agreements (FAA) entered into by Treasury do not con-
stitute procurement contracts under the purview of Federal Acquisition Regulations.
However, we are committed to providing information about our fiscal agents and fi-

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nancial agency agreements with full transparency and in a timely manner, to the
extent required by all applicable laws and regulations, without compromising the in-
tegrity of the nature of the information requested.
Question. In 2016, the Obama administration transferred $1.7 billion to Iran in
cash, ultimately delivered in the form of pallets of (non-U.S.) cash, purportedly as
part of a settlement of a decades-old arbitration claim between the U.S. and Iran.
The transaction involved use of the so-called Judgment Fund housed at Treasury’s
Bureau of the Fiscal Service and payments-system resources of the Federal Reserve.
At the time, since the Judgment Fund did not allow processing of individual claims
of amounts over 10 digits, $1.3 billion of payment was divided into 13 claims of
$99,999,999.99 and one claim of $10,390,236.28. To my knowledge, members of the
Senate Finance committee, who have oversight responsibility over Treasury, did not
receive any advance notice or consultation regarding the outsized and unusual pay-
ments.
Will you commit to informing the Finance Committee upon receipt of any request
by a Federal agency or body to make Judgment Fund payments that are outsized
and unusual prior to payments being made?
Answer. I am committed to working with Congress generally, and the Finance
Committee specifically, on oversight matters. If confirmed, I will consult with the
Finance Committee on concerns related to payments from the Judgment Fund.
Question. In a June 7, 2016 article in the Huffington Post titled ‘‘The Koch Broth-
ers Are Trying to Handpick Government Officials. We Have to Stop Them,’’ Senators
Warren, Schumer, and Whitehouse put forward allegations, that have subsequently
been shown to be false, against a Republican nominee for a Social Security Trustee
position and a Republican nominee to a seat on the SEC. The authors identified that
the two nominees had worked at a think tank that received financial support from
the ‘‘Koch brothers.’’ The nominees, and officials at the think tank identified that
their research was not guided or constrained by any institutional donors, though the
authors seemed unconvinced, calling directly into question the integrity of the nomi-
nees.
Given the sensitivity of some to institutional funding, especially if funding is pro-
vided to institutions that include conservative scholars, and given that the Charles
Koch Foundation provided substantial funding to the Brookings Institution when
you worked there, as did many ‘‘wealthy corporations’’ and billionaires:
Should there be concern that you, in your position as Treasury Secretary, if con-
firmed, will, as the authors of the article referenced above warn, ‘‘serve the wishes
of wealthy corporations and their billionaire owners’’?
Should concerns about think-tank funders be limited to think tanks that allow
scholars to pursue conservative thoughts?
Should there be a double standard with respect to who is and who is not sus-
pected of being influenced by corporations and ‘‘billionaires’’ depending on their po-
litical positions?
Answer. As I said at my hearing, my lifelong commitment to putting people back
to work, to making sure small businesses and working families have relief they need
to survive economic downturns like this one, comes from my heart and has been the
story of my life. That is what will influence me, if confirmed, as Treasury Secretary.
Question. The American Economic Association, of which you were President, has
a policy of publishing papers only if data and code used in the analysis are clearly
and precisely documented and access to the data and code is non-exclusive to the
authors.
Do you agree that such a policy should be applied to analyses performed and mod-
els and data used by the Federal Government, including agencies, aside from any
administrative data that are not allowed to be publicly shared?
Answer. The American Economic Association is committed to the replicability of
research published in its journals. In order to facilitate replication, authors of ac-
cepted papers that contain empirical work, simulations, or experimental work must
provide information about the data, programs, and other details of the computations
sufficient to permit replication. The American Economic Association provides fund-
ing for a data replication team that ensures that the results of papers published in
its journals can be replicated running the same code and data that the authors
used. Moreover, the availability of the code and data allows outside researchers to
attempt broader definitions of replication, allowing the further development of evi-

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dence on the questions posed in the research and thus the advancement of science.
Replication is an essential part of science, and therefore I am in support of facili-
tating replication. However, it is also important to note that replication comes after
the original researchers have completed their work and have advanced to the stage
of acceptance for publication. The association does not, for instance, require an au-
thor whose work is under consideration to submit their data and empirical strategy
as they may need to continue their research before it is ready for publication. If con-
firmed, I look forward to advancing research and its replicability within the Federal
Government.
Question. Will you consult with the Finance Committee if Treasury officials or of-
ficials at the IRS are contemplating special arrangements, such as hiring as tem-
porary IRS or other agency employees, to enable researchers from outside govern-
ment to gain access, under the guise of performing academic research, to data other-
wise not sharable with private citizens (such as sensitive tax information)?
Answer. The IRS has, for many years, run the incredibly successful Statistics of
Income (SOI) Joint Statistical Research Program. This program has helped provide
new understandings of taxpayer behaviors that aid in administering the U.S. tax
system, and new insights and understandings of the ways that existing tax policies
affect individuals, businesses, and the economy. While this program was delayed
due to COVID, a new call for researchers is planned for December 2021. These part-
nerships are cost-effective ways to learn about the many ways in which Federal
Government policies impact Americans. Moreover, I appreciate how significant our
economic needs are, and how we must leverage all of our resources to think cre-
atively about how to best put the country’s economy back on stable footing. It is
equally as essential that appropriate precautions are taken to ensure that data pri-
vacy is preserved. If confirmed, I will work with the Treasury and the IRS to con-
tinue robust data protection and access practices. And I will do everything possible
to protect Treasury data. I look forward to working with you and the entire Finance
Committee to develop creative ways to better leverage the talent of government em-
ployees and outside researchers to improve tax and fiscal policy for all Americans.
Question. If confirmed as Treasury Secretary, you will help manage the debt, in-
cluding the maturity structure of outstanding U.S. debt.
Do you believe that the optimal weighted-average maturity of the debt is above,
below, or equal to where it now stands?
Do you plan to consider issuing any new federal debt instruments?
If you decide to issue any new Federal debt instruments, or decide to hold a high-
er average cash balance at Treasury, will you commit to informing the Finance com-
mittee, which has jurisdiction over the debt and Treasury operations, prior to so
doing?
If the Federal Reserve in the future adopts yield curve control measures, how will
you coordinate with the Federal Reserve with respect to implications for any target
by Treasury of the average-maturity of the debt?
Answer. You raise important questions about the structure of the national debt.
If confirmed, I look forward to reviewing current Treasury practices with respect to
debt issuance, including analyzing the weighted-average maturity of the debt; dis-
cussing whether we have the right mix of Federal debt instruments; and under-
standing the cash balance needs of the Federal Government. I believe that congres-
sional oversight and partnership on these issues is vital, and look forward to work-
ing with you on the full range of concerns regarding debt management that you
have raised.
MATTERS RELATED TO TREASURY SECRETARY’S ROLE AS MANAGING TRUSTEE OF
SOCIAL SECURITY AND MEDICARE TRUST FUNDS

Question. Social Security benefits are said to be ‘‘earned benefits,’’ in that for
every dollar of FICA tax paid in for disability or retirement benefits, there is a com-
mensurate benefit that accrues to the taxpayer. An old Franklin Roosevelt quote is
often invoked to reinforce the earned-benefit notion; in 1941, Roosevelt stated that
‘‘We put those payroll contributions there so as to give the contributors a legal,
moral, and political right to collect their pensions and their unemployment benefits.
With those taxes in there, no damn politician can ever scrap my social security pro-
gram.’’ To some, it is important that Social Security programs remain as ones that
can be characterized as earned benefits, meaning, again, that there is a benefit com-
mensurate with every unit of tax paid in. Otherwise, some fear, dependence of So-

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cial Security benefits on partial general-fund revenue, or revenue cloaked as Trust
Fund revenue but accruing to the Trust Funds as tax payments that do not carry
any associated benefit accrual, would lead to Social Security being characterized as
some sort of ‘‘welfare,’’ and benefits being thought of as mere transfers to which re-
cipients do not necessarily have legal, moral, or political ‘‘rights.’’
What, to you, is meant by ‘‘earned benefit’’ in the context of Social Security bene-
fits?
Answer. Social Security was designed to ensure that every American is adequately
prepared for retirement. The program recognizes that people who earn more may
need a higher income in retirement to maintain a living standard in retirement that
is commensurate with what they enjoyed while working. As such, higher earning
Americans typically pay more into the system and receive greater Social Security
payments in retirement. However, Social Security was also designed to reduce elder
poverty by ensuring a minimum living standard in retirement regardless of earnings
while working.
Question. Do you believe it is important to maintain a link between a benefit and
a tax, such that for every unit of Social Security taxes paid in there is a commensu-
rate claim to a pecuniary benefit?
Answer. The linkage between tax payments and Social Security benefits is par-
ticularly important for the lowest earning Americans who are contributing to Social
Security even while facing pressing financial need in their daily lives. That their
contributions are directly linked to their future well-being is essential. President
Biden supports lifting the earnings cap on wealthy taxpayers with more than
$400,000 in wages to pay the same rate on their income as other workers. Requiring
such high earning tax payers to continue to pay into Social Security is not only cru-
cial for the fiscal health of the program, but also for maintaining equity in the sys-
tem.
Question. Do you believe that Social Security, while not being a main driver of
future deficits, does contribute to deficits in the on-budget part of the, and the con-
solidated, Federal budget?
Answer. Spending out of the Social Security Trust Fund is an indicator of the
need to continually monitor and evaluate the Social Security program in order to
ensure that this crucial safety net that has helped protect the elderly from poverty
since its inception endurs. Social Security is off-budget, in part, because the Green-
span Commission determined that changes in the Social Security program should
be made only for programmatic reasons. I appreciate that as the population ages,
shortfalls in Social Security are likely to increase, and that may require consider-
ation of reform. President Biden has called for a Social Security reform package that
would boost benefits for vulnerable beneficiaries—including widows and widowers,
workers with low lifetime incomes, and older beneficiaries—and provide an across-
the-board increase for all beneficiaries. The plan also improves the long-run fiscal
position of the Social Security Trust Fund by asking wealthy taxpayers to pay the
same rate on their income as other workers. On the whole, President Biden’s plan
would provide older Americans a more secure retirement. I look forward to working
with Congress, if confirmed, to discuss these important issues, and ensure that the
Social Security program continues for decades to come without burdening middle-
class taxpayers.
Question. The Secretary of the Treasury is the Managing Trustee of the Social Se-
curity and Medicare Trust Funds. The Medicare Hospital Insurance Trust Fund is
expected to be exhausted in a few short years. The Supplemental Medical Insurance
Trust Funds is expected to continue to require General Fund transfers that can
crowd out other spending priorities. Do you believe that the precarious state of
Medicare’s finances is a pressing problem that should be addressed by the Biden
administration?
Answer. While the last report of the Trustees found no material change in the
solvency of the Medicare programs relative to the prior year, Covid has accelerated
the depletion of the Medicare Hospital Insurance Trust Fund according to Congres-
sional Budget Office projections released in September 2020. Thus the state of Medi-
care’s finances remains something that requires close attention and evaluation.
President Biden is committed to ensuring the stability of Medicare, and providing
Americans with greater access to Medicare by lowering the eligibility age. These
changes are part of President Biden’s commitment to improve access to health care
for all Americans.

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GENERAL MATTERS

Question. Your record and statements indicate that you may find ‘‘behavioral eco-
nomics’’ to be useful. To some, behavioral economics is merely a way for economists
to open up additional degrees of freedom into their analysis; and, with additional
degrees of freedom, analyses lose rigor and results of the analyses become highly
questionable and normative, in the minds of some. Some also believe that behavioral
economics, and the ‘‘nudges’’ offered by them, often represent arrogant claims by
elitists that, somehow, infallible ‘‘experts’’ or ‘‘technocrats’’ are needed to nudge,
guide, cajole, and regulate the fallible non-experts because those fallible people, for
various possible ‘‘behavioral’’ reasons, simply don’t make choices that are in their
own best interests. Do you support behavioral economic analysis and, if so, what dis-
cipline is there to prevent behaviorists from try to regulate and constrain Americans
simply because of normative preferences of the behaviorists?
Answer. Behavioral economic analysis reflects the progress of economists in their
quest to study how people make decisions given the many constraints they face. A
fundamental premise is that people optimize, and do the best they can to make good
decisions given their values, preferences, and opportunities. Over the past several
decades, economists have discovered systematic ways in which individuals’ decisions
deviate from prior economists’ assumptions. Behavioral economics seeks to replace
old assumptions that have proven to be untrue using the insights of psychology and
the evidence provided by experiments and observational data. As a result, economics
has become a more rigorous social science. These insights give us a better under-
standing of how Americans are likely to experience and respond to public policy, and
provide useful insight into the likely impact of policy on people’s lives. Moreover,
they provide accountability to ensure that policy choices have their intended effect.
Your question refers to the insight of behavioral scientists that people are more like-
ly to choose a default option rather than actively choosing the non-default option.
That insight does suggest that good policy choices should recognize that the result-
ing default option will be chosen by a large share of Americans and therefore should
be beneficial to a large share of Americans.
Question. The so-called HEROES Act (H.R. 6800), which passed in the House of
Representatives in May 2020, directs the Federal Reserve, in section 110801, in un-
usual and exigent circumstances, to purchase obligations issued by any State, coun-
ty, district, political subdivision, municipality, or entity that is a combination of any
of the several States, the District of Columbia, or any of the territories and posses-
sions of the U.S. Such purchases would occur within proposed modifications to the
Municipal Liquidity Facility that was established under section 13(3) of the Federal
Reserve Act, and the modifications would have to be made to, among other things,
‘‘ensure that any purchases made are at an interest rate equal to the discount win-
dow primary credit interest rate . . . commonly referred to as . . . the ‘Federal
funds rate’ ’’; and, to ‘‘ensure that an eligible issuer does not need to attest to an
inability to secure credit elsewhere.’’ Given that the Federal funds rate is near zero,
section 110801 in effect requires that the Federal Reserve make near-zero interest
rate loans to States, municipalities, and the like, independent of whether those ju-
risdictions are able to secure credit elsewhere—something that turns the Federal
Reserve into an agency providing assistance that is close to grant making.
Do you support the policies called for in section 110801?
More generally, do you support requiring that the Federal Reserve make loans to
potentially non-creditworthy borrowers at the Federal funds rate?
More generally, do you support allowing the Federal Reserve to make grants to
private or governmental entities?
Answer. The country is currently facing an unprecedented pandemic that has ex-
posed economic inequalities rooted in our financial system for generations. I believe
that it is imperative that the government does its part to catalyze an economic re-
covery that is both equitable and sustainable, and supports policies that pursue
these outcomes. Right now, taking too little action poses the greatest risk to the
health of our economy, the livelihoods of the American people who drive that econ-
omy, and future generations. I support, and will pursue actions that provide aid to
fully distribute the vaccine, reopen schools, deliver badly needed aid to State and
local governments, support small business owners—and most importantly get people
back to work, if confirmed. From Georgia to Montana and Nevada to Maine, first
responders, educators, other essential workers need our help now.
Question. You seem to oppose rule-based monetary policy, and instead prefer dis-
cretion. Do you symmetrically not support rules-based economic stabilizers, such as

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unemployment insurance tied formulaically to economic measures, and instead pre-
fer fiscal-policy discretion that is consistent with a continuing role for Congress and
representative democracy?
Answer. Automatic stabilizers play a critical role in mitigating the negative im-
pacts of recession. Our current system needs both updating and expansion, as evi-
denced by the economic strain placed on workers and families during the most re-
cent downturn. Designing and implementing a modern and effective system of auto-
matic stabilizers is an important step to take now, so that we can minimize the neg-
ative impacts of any future recessions. I am eager to work with Congress, if con-
firmed, on ways to automatically adjust the length and amount of relief depending
on health and economic conditions so future legislative delay doesn’t undermine the
recovery and families’ access to benefits they need.
Question. You have, in recent years, identified that, in terms of long-term deficits,
adjustments are needed in fiscal policies in light of demographics and what you re-
ferred to in 2017 as an ‘‘unsustainable debt path.’’ Abstracting from the serious
recession- and crisis-related economic challenges that we face, what fiscal policy ad-
justments do you believe are needed, and do any of them not involve simply raising
taxes?
Answer. The most important thing we can do today to set us on a path to fiscal
sustainability is defeat the pandemic, provide relief to the American people, and
make long-term investments that will benefit future generations. There are long-
term budget challenges. The President is committed to implementing responsible
policies that grow the economy, ask high-income Americans and corporations to pay
their fair share, and give our country even more capacity to face the challenges
ahead.
The President is committed to putting the country on a fiscally sustainable path
and making sure that what we do now leaves future generations better off. Past ex-
perience suggests that, in times of economic weakness and low interest rates like
today, taking the kind of action that the President supports to provide aid to Ameri-
cans and help support the economy can lead to lower debt as a share of the economy
even when financed by larger deficits in the short run. That’s because the action
leads to a healthier economy that generates more revenue and less in the way of
future safety net spending.
It is also urgent that we invest in the American people, in innovation, and in our
physical infrastructure, because such spending will produce returns in the years
ahead and leave future generations better off. Another important fiscal policy ad-
justment is the more efficient delivery of public services. For example, during the
campaign, President Biden introduced several health reforms that would bend the
growth in health costs, such as a plan to save billions by allowing the Federal Gov-
ernment to better negotiate drug prices. These reforms, coupled with higher rates
of economic growth, can drive down long-term debt and deficits. In fact, the Penn-
Wharton Budget Model found that the Biden health plan decreases the public debt
by 4.6 percent over 10 years and 10.7 percent over 30 years.
Question. Do you support a wealth tax, and will you advocate for a wealth tax,
including construction of an entirely new measurement and monitoring apparatus
to track an entirely new tax base?
Answer. President Biden has proposed to tax the investment income of families
making more than $1 million at the same rate they pay on their wages and to tax
some previously untaxed capital gains on the final return of wealthy taxpayers.
These reforms would remove biases in the tax code that favor wealth over work.
Question. Do you believe a wealth tax is constitutional?
Answer. I would defer to constitutional scholars on this question, though I note
that President Biden has not proposed a wealth tax.
Question. What do you believe international evidence on the efficacy, or not, of
wealth tax schemes tells us regarding whether or not it is useful to construct one
in the U.S.?
Answer. I would need to undertake a careful review of this literature before I
could offer a nuanced assessment of the lessons we could draw from the inter-
national evidence on wealth taxes for a wealth tax in the U.S. context.
Question. Former Treasury Secretary Lawrence Summers has written that ‘‘Lack
of income growth and opportunity for middle-class families is a fundamental prob-
lem in American society. So too is rising inequality. The role of moneyed interests

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in shaping policy is also a crucial political problem. Wealth taxation is not an effec-
tive approach to any of these problems.’’ Do you agree with Summers’s conclusion
that wealth taxation is not an effective approach to the problems he identifies?
Answer. I would need to undertake a careful review of this literature before I
could offer a firm conclusion.
Question. Economists Gabriel Zucman, Emmanuel Saez, and Thomas Piketty have
established a clear political agenda, with what is apparently a purely normative ani-
mus toward rich people, and little else of policy substance, guiding their policy pre-
scriptions. Those activists have become renowned for playing fast-and-loose with
data, definitions, interpolations, and the like in order to force massaged data to con-
form with their normative prior policy preferences. With respect to claims about the
progressivity of the U.S. tax system, for example, Zucman and Saez have claimed
that the top 400 richest Americans pay a lower tax rate than the bottom 50 percent,
which even liberal economist and former Treasury Secretary Lawrence Summers is
quoted as having said is ‘‘substantially inaccurate and substantially misleading.’’
Numerous economists have questioned results, methodology, and attempts at Fed-
eral budget scoring of proposals put forward by Zucman, Saez, and Piketty in var-
ious co-authorship permutations. With the understanding that analyses, data, and
claims from Zucman, Saez, and Piketty face credibility challenges, do you intend to
rely on analyses and data that they produce in efforts to increase progressivity of
the tax code in order to act on inequality?
Answer. Tax policy-making should be grounded in the best available research and
evidence. There is broad agreement in the economics profession that income and
wealth inequality have increased in recent decades, though the precise magnitudes
differ across studies and methodologies. Similarly, there is broad agreement that
higher taxes on wealthy families can raise substantial amounts of revenue and
make the tax code more progressive.
There is no single best source of data or analysis for all purposes, but, if con-
firmed, I will work to ensure that Treasury’s research and policy analysis is rigorous
and based on the best available research.
Question. Measures of income inequality differ according to data and techniques
used. Are you aware of, and can you comment on, any analyses that use administra-
tive data to find inequality increases over the recent past that are smaller than
those found using other data?
Answer. As noted above, there is a broad agreement in the economics profession
that income and wealth inequality have increased in recent decades, though the pre-
cise magnitudes differ across studies and methodologies.
Question. Some believe that, independent of revenue raised or lost because of im-
plementation of a wealth tax, it is important to institute a wealth tax so ‘‘billion-
aires’’ and high-wealth individuals do not hoard such wealth.
Do you support implementation of a wealth tax with the primary or sole intention
of ensuring that there are fewer people with high wealth levels?
If so, what social problem would you be intending to solve by implementing the
wealth tax?
Answer. As noted above, President Biden has proposed to tax the investment in-
come of families making more than $1 million at the same rate they pay on their
wages and to tax some previously untaxed capital gains on the final return of
wealthy taxpayers. These reforms would remove biases in the tax code that favor
wealth over work. He has not proposed a wealth tax.
Question. According to a post on the Internal Revenue Service’s website titled
‘‘Audit Rates Increase as Income Rises,’’ dated October 20, 2020, and authored by
Deputy Commissioner Sunita Lough: ‘‘Despite common misperceptions about IRS
examination rates, the reality is that the likelihood of an audit significantly in-
creases as income grows.’’ The posting provides data showing that higher-income
taxpayers were audited at much higher rates in 2013–2015 than other taxpayers,
and presents challenges surrounding audits of lower-income taxpayer receiving
EITC (such as error rates on tax returns claiming EITC of around 50 percent and
the improper payment rate involving EITC claims of more than $17 billion each
year).
Do you agree with the data provided by Deputy Commissioner Lough in the afore-
mentioned posting?

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How would you address the seeming high error rates and high improper payment
aggregate associated with taxpayers receiving EITC?
Answer. It is also important to note that IRS estimates also show that EITC er-
rors are responsible for less than 10 percent of taxes that are not paid on time,
while studies show that the top 1 percent of filers may be responsible for more than
a quarter of that ‘‘tax gap.’’ Furthermore, about a fifth of households who are eligi-
ble for the EITC do not file a tax return to claim it.
If I have the privilege of being confirmed, I look forward to working with Treas-
ury, the IRS, and Congress to ensure that IRS tax compliance and enforcement ac-
tivity is focused towards the largest sources of the tax gap, and that the tax laws
are fairly applied for working families and wealthy filers alike. I would also work
to both reduce EITC error and ensure that working families in fact receive their
hard-earned credits, such as by working with the Treasury Department and Con-
gress to reduce complexity and barriers to accurate, easy tax filing.
Question. On December 2, 2020, Project Syndicate published an article by Joseph
Stiglitz titled ‘‘What Yellen Must Do.’’ In the article, Stiglitz wrote that ‘‘some $500
billion of this ‘global money’ [SDRs] could be issued overnight if only the U.S. Sec-
retary of the Treasury would approve.’’ And, he wrote: ‘‘Biden could give the green
light.’’
Do you agree with Stiglitz’s recommendation, and do you plan to issue $500 bil-
lion of SDRs?
More generally, will you commit to consulting with Congress, on both sides of the
aisle, before pledging any additional funding, or rearrangement of existing funding,
to multilateral international institutions such as the IMF?
Answer. We must make sure that the IMF and World Bank are doing everything
they can to ensure that developing countries have the resources for public health
and economic recovery. We must also get the most vulnerable countries the debt re-
lief they need at this critical time. I know that there are a variety of proposals out
there. If confirmed, I will direct my team to analyze the full range of ways that the
international community can strengthen its support for the most vulnerable coun-
tries during this emergency. I look forward to studying the issue further and pledge
to adhere to the legal requirement to consult with Congress before making a deci-
sion on the U.S. position on an SDR allocation.
Question. You have advocated for additional ‘‘relief ’’ funding for State, local, and
other units of government, based partly on forecasts of ‘‘lost revenue.’’ Those fore-
casts, since the onset of the pandemic, have been far off the mark. Moreover, they
are often based on historical patterns between things like revenue and unemploy-
ment rates that obtained in past periods in which the economy was subject to reces-
sion-inducing forces, but nothing at all like we have seen since early 2020.
Do you continue to advocate for additional State, local, and other government
relief ?
If so, what data on revenue realizations guide your advocacy, and what studies
of lack of State, local, and other government ‘‘relief ’’ in past recessions lead you to
believe that without additional funding now, recovery from a recession would be
held back in some ways, and do you think that your assessment reflects a consensus
from academic literature on the topic of efficacy of Federal relief aid to State, local,
and other governments?
Answer. Relief for State and local governments remains essential to combat the
pandemic, restart our economy, and reopen our schools. States and localities need
funds for public health and education, and to keep front line workers on the job.
The last thing we would want would be for States and localities to lay off teachers,
transportation workers, sanitation workers, or the health-care workers, firefighters,
and police officers so essential for public health and safety.
There is strong evidence from past recessions that a failure to support State and
local governments will make this crisis worse. I understand that this recession is
different from prior ones and have been closely following changes in State and local
revenue and expenditure. Based on that ongoing review, it remains the case that
State and local governments all across our country need the support of the Federal
Government in this time of need.
Question. The incoming administration desires to reset the Federal minimum
wage to $15, despite warnings from the Congressional Budget Office that such a
move could cost upwards of 3.7 million workers a job. Of course, given variations

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in the cost of living across the country, $15 for a worker in, say, New York City
or Berkeley, CA, is far different than for a worker in, say, West Virginia. And pay-
ing $15 an hour as an employer in Iowa is different, in terms of production costs,
than in States with higher overall living costs. A $15 minimum hourly wage is only
a bit below the May 2019 median hourly wage for all occupations for West Virginia.
Do you agree with the 2019 analysis from the Congressional Budget Office that
increasing the minimum wage, depending on how the increase is implemented, will
result in 1.3 million workers becoming jobless, and there is a two-thirds chance that
the change in employment could be a decrease of up to 3.7 million workers?
Do you believe that many low-wage workers will become displaced by technology
if a $15 minimum wage in enacted?
Do you believe there are negative employment effects of increasing the minimum
wage at both the extensive and the intensive margin?
What economic literature do you rely on to make your assessments regarding ef-
fects of an increase in the minimum wage to $15, which is well outside the size of
an increase that could be comfortably thought of as being within the relevant range
of applicability of existing studies?
Would you support implementation of indexation such that an increase in the
Federal minimum wage to $x per hour is implemented, but with $x per hour apply-
ing to any States with price levels equal to the national median and the minimum
wage in other States or municipalities indexed to State or municipal living costs
using the Bureau of Economic Analysis’s Regional Price Parities (RPPs) measure?
Answer. Raising the minimum wage will lift tens of millions of Americans out of
poverty while expanding access to opportunity for countless small businesses nation-
wide. It matters how it’s implemented, and the President’s minimum wage will be
phased in over time, giving small businesses plenty of time to adapt. Raising the
wages of the lowest-paid workers in America can unlock billions of dollars of con-
sumer spending that could be used to fuel demand for the essential goods and serv-
ices small businesses provide. With greater revenue coming in, entrepreneurs can
not only pay their employees higher wages (which will increase productivity and re-
tention), but also invest in new equipment, expand their operations, and grow their
business.
Question. Recent reports indicate that unemployment insurance fraud in Cali-
fornia alone may total $8 to $10 billion. Fraud takes resources away from those to
whom the Federal Government intends to help and places them in the hands of
undeserving fraudsters, some of whom seem to recently have been parts of orga-
nized crime rings, perhaps with international scope. I’ve already asked the Depart-
ment of Labor to investigate California’s unemployment insurance system, since the
Governor of the State does not seem very interested in being serious about reining
in fraud. And, in the relief package that was enacted just a few weeks ago, I argued
for strengthened anti-fraud protections, while Democrats did not want many—if
any—protections, partly based on a notion that fraud detection could involve use of
racial- or income-biased risk-based fraud-detection systems.
Do you believe, with billions of dollars of fraud in the unemployment insurance
system, additional fraud detection is important?
Do you believe that it is possible to enact legislation calling for systems of risk-
based fraud detection without the result being use of systems or algorithms that
have racial- or income-based biases?
Answer. The unemployment insurance (UI) program has provided a lifeline to mil-
lions of Americans in need. Due to the depth of this economic crisis, State agencies
have been working tirelessly, and are stretched thin under this massive workload
trying to get benefits to qualified applicants. I am supportive of efforts to combat
UI fraud that do not impede working families from accessing funds when they need
them most. If confirmed, I look forward to working with Congress and the Depart-
ment of Labor on this important issue.
Question. You have referenced low interest rates as a partial rationale for massive
expansions of Federal spending, and have identified that debt service costs are im-
portant to monitor with respect to future fiscal challenges.
Do you believe that there are risks that, given the maturity structure of out-
standing debt and associated ‘‘rollover’’ risks in Federal debt financing, interest
rates could rise above what most currently expect, thereby increasing likelihood of
a fiscal crisis?

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Is advocacy for massive expansions of Federal spending under a belief that long-
term real interest rates will remain low for a long time into the future a risky bet,
effectively using tax obligations of future generations as the wager, that rates will
remain low for a long future period?
Answer. In the current environment, the most pressing challenge is to overcome
the pandemic and rebuild our economy. That will require additional relief, as pro-
posed by President Biden. I look forward to working with the Congress to secure
that relief. Presently, interest rates are at historically low levels, and our interest
burden as a percentage of GDP is also quite low. Therefore, in the current environ-
ment, it makes sense to focus on the relief needed to support families and busi-
nesses. I look forward to working closely with Treasury’s debt management profes-
sionals to ensure we have an effective borrowing strategy. Over the longer term, as
I have often stated, we need to ensure that our country is on a sustainable path
with respect to our debt burden. I look forward to working with Congress on these
important issues, if confirmed.
Question. In the past, I believe that you have identified that, outside of recession
or an economic ‘‘crisis,’’ long-term fiscal sustainability, including existing unsustain-
able mandatory spending programs, is something that is important to be concerned
about.
Do you believe that now?
If not, and if your views have changed over the past couple of years, please ex-
plain how your views have changed and what evidence led you to change your
views.
Answer. In the current environment, the most pressing challenge is to overcome
the pandemic and rebuild our economy. That will require additional relief, as pro-
posed by President Biden. I look forward to working with the Congress to secure
that relief. Presently, interest rates are at historically low levels, and our interest
burden as a percentage of GDP is also quite low. Therefore, in the current environ-
ment, it makes sense to focus on the relief needed to support families and busi-
nesses, rather than on the overall level of our national debt. Over the longer term,
as I have often stated, we need to ensure that our country is on a sustainable path
with respect to our fiscal position, including with respect to assuring that our safety
net programs are robust and sustainable. I look forward to working with Congress
on these important issues, if confirmed.
Question. You identified during the hearing on your anticipated nomination that
some public projects have been shown to promise ‘‘extremely high returns.’’ One idea
put forward by you and others is that ‘‘investments’’ by the Federal Government in
things like infrastructure projects with ‘‘high returns’’ would be prudent in the face
of low real financing costs.
What are the public projects that you claim have been shown to promise ‘‘ex-
tremely high returns.’’
How are those returns measured?
How long will it take for the projects you identify as having extremely high re-
turns to actually generate those returns (i.e., how ‘‘shovel-ready’’ are they)?
Answer. Public projects can generate meaningful economic gains through a vari-
ety of mechanisms. For example, projects can increase economic activity by raising
productivity, increasing labor supply, or stimulating the macroeconomy in the face
of falling growth. Estimates by economists regularly find that each $1 of public
spending can boost economic activity by well-over $1.5—and sometimes substan-
tially higher. Examples of stimulative investments can also include unemployment
insurance for workers facing long-duration unemployment, temporary increases in
food stamps, as well as funding needed infrastructure projects.
The returns to public spending are measured through a variety of metrics, includ-
ing increased economic activity, higher levels of employment, and even increased
revenue. The amount of time required for these programs to generate returns can
vary from one quarter to several years. In the case of investment in young children’s
education, it can take over a decade for the returns to fully materialize—although
the gains persist for a generation.
Question. Your response to my question on rural interests during the hearing on
your anticipated nomination was somewhat disappointing. It sounded as though you
are intending to pursue general policies aimed largely or solely at economic aggre-
gates, with a notion that anything you do in the aggregate will be enough to ensure

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equitably shared returns for rural families and rural economies. Do you have any
ideas for policies that focus on rural and agricultural interests, given that many in
rural America have felt left out of any returns from globalization and Washington,
DC-based decision making?
Answer. I share your concerns that too many rural communities have been left
behind by globalization and other forces, and I am committed to pursuing policies
that specifically ensure that the unique needs of rural Americans are addressed. I
believe there are opportunities, for example, in our efforts to expand access to cap-
ital and provide credit to entrepreneurs to pay special attention to ensuring that
programs are available and accessible to rural small businesses. If confirmed, I look
forward to working with you and members of the committee to achieve that goal.
Question. Do you believe that underfunded State and local public pensions pose
a risk to financial stability in the United States?
Answer. States and localities face a wide range of conditions with regard to their
public pensions, which can create varying challenges for their own fiscal situa-
tions—even if State and local public pensions are not typically considered a major
risk factor to overall financial stability. If confirmed, I would look to pursue an eco-
nomic agenda that would support the kind of broad-based economic growth that
would also have a positive impact on public pensions.
Question. Republicans in Congress during the Obama administration had devel-
oped proposals to help address State and local public pension challenges. Will you
commit to working with Congress and members of the Finance Committee on both
sides of the aisle in examining the issue?
Answer. I look forward to learning more about proposals that members of this
committee have developed on the issue, if confirmed.
Question. Given what I expect will be proper efforts on your part to examine di-
versity at the Treasury Department, your views on diversity will impact your deci-
sion making. With respect to a recent lawsuit alleging that Harvard University’s ad-
missions processes discriminate against Asians:
Why did you join an amicus brief to seemingly reinforce your view that statistical
procedures and arguments used by your Berkeley colleague Professor David Card
were more carefully executed than procedures and arguments used by the opposing
side?
Do you believe, given arguments and analyses that you have seen related to the
case, that Harvard admissions do not discriminate against Asians?
Using data from a lawsuit against Harvard, an April 2020 National Bureau of
Economic Research paper (Working Pater 27068) by Arcidiacono, Kinsler, and Ran-
som identifies that they ‘‘show that there is a substantial penalty against Asian
Americans in admissions with limited scope for omitted variables to overturn the
results.’’ Do you find the results of that paper to be relevant to your views expressed
in the amicus brief that you joined, and do the results weigh on your views of
whether or not Harvard has discriminated against Asians through its admissions
processes?
Answer. I signed the amicus brief and supported the arguments that were laid
out within it. I cannot speak further to the admissions process at Harvard, but as
I said at my confirmation hearing, issues of diversity, inclusion, and racial equity
are incredibly important, particularly at this moment in history when the pandemic
has taken an unbelievable and disproportionate toll on low-income workers and es-
pecially people of color. And because I am so concerned about the impact on minor-
ity communities, the very first meeting that I had after my nomination was an-
nounced was with representatives of racial and economic justice groups to hear di-
rectly from them what their needs are. The focus of having diverse viewpoints and
leadership within the Treasury Department will continue to be one of my top prior-
ities.
Question. The U.S. private motor coach, school bus, and domestic passenger vessel
industries have suffered unprecedented economic losses and furloughed hundreds of
thousands of employees over the past 10 months due to the pandemic. Collectively,
these industries have furloughed or laid off an estimated 308,000 employees due to
the COVID–19 pandemic. These businesses do not expect to see the start toward
a return to ‘‘normal’’ business operations until mid- to late 2021, at the earliest,
forcing their employees to remain out of work or be lost to other industries. Con-
gress provided some relief for these industries in the legislation signed into law on

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December 27, 2020. That bill provided $2 billion in grants for these industries to
be jointly administered by the Department of Treasury and the Department of
Transportation.
Because this is an entirely new program that needs to be established by the De-
partment of the Treasury in consultation with the Department of Transportation,
what can the Department of the Treasury do to expedite development of the pro-
gram and distribution of the funds?
Will you commit to expedite, if confirmed, this program and do everything possible
to get funds to these companies as soon as possible?
Will you commit to providing the Finance Committee with details of the guidance
and criteria that Treasury will use to administer these funds as soon as they are
developed?
Answer. The $2-billion grant program included in the legislation signed last De-
cember is an important source of support for the private motor coach, school bus,
and domestic passenger vehicle industries. I recognize the importance of these in-
dustries and the people they employ. If confirmed, I will work closely with leader-
ship of the Department of Transportation to implement this program as quickly and
effectively as possible, and I look forward to consulting and working with the Fi-
nance Committee on this important program.

FOLLOW-UP QUESTIONS SUBMITTED BY HON. CHUCK GRASSLEY
Question. At various times during the campaign, President Biden suggested he
would repeal the Tax Cuts and Jobs Act either in full or in part. Please indicate
(yes or no) whether the incoming Biden administration supports the following:
Would the Biden administration support repealing the doubling of the Child Tax
Credit from $1,000 to $2,000? If no, would the administration support making this
provision permanent?
Would the Biden administration support repealing the enhanced standard deduc-
tion, which increased the standard deduction from $6,500 to $12,000 for singles,
from $13,000 to $24,000 for married couples, and from $9,550 to $18,000 for heads
of household in 2018? If no, would the administration support making this provision
permanent?
Would the Biden administration support repealing the reduced tax rates put in
place for middle-class taxpayers, which included reducing the 15-percent bracket to
12 percent? If no, would the administration support making this provision perma-
nent?
Would the Biden administration support repealing the qualified business income
deduction, which allows small businesses to deduct up to 20 percent of their quali-
fied business income? If no, would the administration support making this provision
permanent?
Dr. Yellen did not answer each question to indicate whether the Biden adminis-
tration would support either the repeal or permanency of the specified provision.
Answer. Both during the campaign and the transition, President Biden supported
an expansion of the Child Tax Credit, namely making the credit fully refundable
and raising the maximum value of the credit to $3,600 for families with young chil-
dren, and $3,000 for others. During the campaign, he also firmly committed to a
policy of avoiding tax increases on taxpayers with income under $400,000. Together,
these suggest that the Biden-Harris administration will support higher levels and
refundability of the Child Tax Credit. These improvements to the Child Tax Credit
would be expected to have a dramatic effect on lifting children out of poverty nation-
wide, and I would welcome the opportunity to work with the committee on this ef-
fort.
Between the elimination of personal exemptions and expansion of the standard
deduction, the Tax Cuts and Job Act put in place a series of reforms that shifted
the relative tax burden for families largely based on household size and itemization
status. I will need to study the economic and distributional implications of these
combined reforms before making a judgment and look forward to engaging with you
and others in Congress on this important matter, if confirmed.
During the campaign, President Biden supported repeal of the parts of the 2017
tax cuts that benefited the wealthiest Americans and largest companies; he clarified

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that the repeal of certain aspects of the tax law would be restricted only to those
taxpayers making more than $400,00 a year, with a firm commitment that tax-
payers earning less than this amount would not see their taxes increase.
The goal of the Biden-Harris administration is to provide support for small busi-
nesses through a variety of mechanisms, including expanded access to the PPP pro-
gram and an array of programs designed to provide capital to underserved commu-
nities. Before making a judgment on this particular provision, I would need to study
not only it’s specific impact on small businesses, but the combined impact of other
small business initiatives. I hope to closely consult with Congress as I better under-
stand the impact of extending this provision.
Question. Senate and House Democrats have argued for repealing the $10,000 cap
on the State and local tax (SALT) deduction as part of pandemic relief efforts. Ac-
cording to the Tax Policy Center, a joint project of the Urban Institute and Brook-
ings Institution where you are a distinguished fellow, such a proposal included in
a House passed pandemic relief measure would provide the top 0.1 percent of house-
holds an average tax cut of nearly $144,000. At the same time it effectively would
give no benefit to the bottom half of households. In your opinion, does it make sense
for pandemic relief efforts to prioritize six-figure tax cuts for the wealthiest few
when millions of middle-class American families are struggling to make ends meet?
Would you oppose including a repeal of the SALT cap in any further relief or stim-
ulus measures?
In response to this question, Dr. Yellen indicated the administration needs addi-
tional time to examine the SALT cap to come to a decision on whether the cap is
justified. Given the need for additional time to review this issue, does this mean the
Biden administration would not be supportive of efforts to repeal the SALT cap as
part of impending COVID relief/stimulus efforts?
Answer. President Biden has released his proposal for an American Rescue Plan
that would form the basis of a new COVID relief package. As you know, that pro-
posal did not include a repeal of the SALT cap. As the process of passing related
legislation moves to the next phase, I anticipate that, if confirmed, I would be in
a position to evaluate a wide range of proposals, and that I would be able to do so
during the course of any negotiations with the benefit of the expertise of the Treas-
ury Department. I would also welcome the views of members of this committee and
others in Congress as we consider what provisions to include in any final relief
package.
Question. Millions of retirees and participants in multiemployer pension plans
face an impending crisis. Many plans are in poor financial health, and the PBGC’s
multiemployer pension insurance fund is projected to be insolvent in 2026 according
to PBGC’s latest annual report. I am committed to finding a bipartisan solution that
can resolve this crisis. If confirmed, will you commit to working with this committee
and other interested Senators on a long-term solution that will secure the retire-
ment benefits for these retirees while also reforming the underlying system and en-
suring taxpayer dollars will not be used to finance a private-sector system in per-
petuity?
In her response, Dr. Yellen noted that President Biden supports passage of the
Butch Lewis Act. Since efforts in 2020 focused on an alternative approach using par-
tition relief:
Does the Biden administration support employing a partition approach to help
failing multiemployer pension plans?
Do you believe taxpayer dollars should be committed in perpetuity such that the
government would effectively finance this private-sector pension system?

Answer. I am aware that while members of Congress would like to seek a resolu-
tion to the multiemployer pension crisis, there are competing approaches to a reso-
lution—including the Butch Lewis legislation and the partition approach. I respect
the expertise of members of Congress, many of whom have been working to resolve
this issue for years, and look forward to further consultation on this issue.
I believe that workers should have access to their earned pension benefits, but
also believe it is imperative to find an approach that does not create undue burdens
on American taxpayers. This is a complex issue, and I am eager to work with mem-
bers of Congress to find a solution to ensure that working families who rely on the
commitment of a pension plan aren’t left behind.

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Question. Prior to the Tax Cuts and Jobs Act (TCJA), the United States had one
of the highest corporate income tax rates among developed countries. TCJA lowered
the corporate rate to ensure that our domestic businesses would remain globally
competitive. Even at 21 percent, the United States still holds the 11th highest cor-
porate tax rate out of the top 36 developed countries, according to the Tax Policy
Center.6
President Biden has proposed increasing the 21-percent rate to 28 percent. If en-
acted, the United States once again would have one of the highest business tax
rates among developed countries. Unfortunately, not just U.S. companies would be
affected by the rate increase. There is an economic consensus that a significant por-
tion of the corporate income tax falls on workers in the form of reduced wages and
benefits. Even the Tax Policy Center, which is a joint venture of the Urban Institute
and Brookings Institution where you are a Distinguished Fellow, assumes 20 per-
cent of the corporate tax falls on workers. Similarly, the Joint Committee on Tax-
ation and Congressional Budget Office have both concluded that 25 percent of the
corporate tax is borne by workers. If the corporate tax rate is increased to 28 per-
cent as proposed, American workers will also feel the burden through fewer jobs,
reduced wages, and less benefits.
What are your views on increasing the corporate tax rate above that of most de-
veloped countries, particularly if a significant portion of the rate increase would also
be borne by American workers?
With the unemployment rate continuing to be high due to the COVID–19 pan-
demic, wouldn’t an increase in the corporate tax rate that is borne in significant
part by labor hinder efforts to restore the historically low unemployment rates we
saw in 2019?
Dr. Yellen did not respond to the first question regarding her view on an increase
in corporate tax being borne by American workers. Please provide a direct and sub-
stantive response.
Answer. President Biden has proposed a slate of proposals that would strengthen
the economy and benefit American workers. The question of corporate tax incidence
is one that received substantial attention during the presidential campaign. The re-
cent change in the corporate tax rate enacted as part of the TCJA provides an op-
portunity to study precisely how changes in the corporate rate impact wages, al-
though virtually all public finance economists agree that these dynamics will play
out over several years. Presently, there is little evidence of a material increase in
wages and thus incidence on workers. I look forward to studying this issue further
and consulting with both Congress and public finance experts, if confirmed.
Question. President Biden has proposed a new 15-percent corporate minimum tax
based on book income, rather than taxable income as currently used in the tax code.
As you know, book income, as reported on a company’s financial statements, is de-
signed to provide information on the company’s performance for investors and credi-
tors based on generally accepted accounting principles. On the other hand, taxable
income is computed in accordance with the Internal Revenue Code and regulations
as the basis for imposing taxes.
Under the tax code, U.S. taxpayers are permitted to adjust their taxable income
by allowable deductions, many of which reflect incentives that Congress intended to
encourage certain behavior. For example, bonus depreciation is intended to encour-
age U.S. companies to invest more in capital expenditures, like equipment and fixed
assets. Imposing a minimum tax would effectively remove the benefit and under-
mine the legislative intent of those provisions. Further, it would require companies
and the IRS to calculate tax liability under different tax bases, creating significant
complexity for taxpayers and the IRS.
Given the important differences between accounting principles and the deductions
permitted by the tax code, do you agree there are legitimate reasons for substantial
differences between book income and taxable income and that book income is not
an appropriate basis for a new alternative tax regime?
Dr. Yellen did not respond with her views on whether it is appropriate to use
book-accounting rules as a basis for a new alternative tax regime. Please provide
a direct and substantive response.

6 https://www.taxpolicycenter.org/fiscal-fact/oecd-corporate-tax-rate-ff-01042021.

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Answer. I appreciate the potential complexities of using book income to calculate
corporate tax burdens, but am also concerned about the zero or very low tax bur-
dens borne by a subset of corporations. Ideally, the U.S. would implement a cor-
porate tax code that limits opportunity for gaming, while also preserving access to
tax provisions that encourage productive investment. This is a complex issue requir-
ing further study of concerns related to basing corporate tax burdens on book in-
come, and if confirmed, I hope to work with you and others in Congress, as well
as the Treasury staff, on this issue.
Question. Under the Coronavirus Aid, Relief, and Economic Security (CARES) Act,
Congress created a temporary rule allowing U.S. businesses to carry back net oper-
ating losses (NOLs) incurred in 2018, 2019, and 2020 to the prior 5 years. In the
Health and Economic Recovery Omnibus Emergency Solutions (HEROES) Act,
House Democrats proposed to repeal the CARES Act NOL provisions, effectively im-
posing a retroactive tax increase on businesses experiencing losses as a result of the
pandemic. The expected revenue effect of the changes proposed in the HEROES Act
was nearly $250 billion. Do you support this kind of retroactive tax change that
would significantly increase taxes on businesses experiencing losses? Do you agree
with former President Obama’s sound advice when he said during the aftermath of
the financial crisis, ‘‘The last thing you want to do is raise taxes in the middle of
a recession’’?
Dr. Yellen did not express support or opposition to introducing a retroactive tax
increase during the pandemic on businesses experiencing losses. Please provide a
direct and substantive response.
Answer. President Biden has released his proposal for an American Rescue Plan
that would form the basis of a new COVID relief package. As you know, that pro-
posal did not include repealing the CARES Act NOL provisions. As the process of
finalizing the package and advancing legislation moves to the next phase, I antici-
pate that I would be better positioned to evaluate and weigh in on a wide range
of proposals and, if confirmed, would be better able to do so with the benefit of the
expertise of the Treasury Department. I would also welcome the views of members
of this committee and others in Congress as we consider what provisions to include
in any final relief package.
Question. Pillar 2 of the OECD’s proposed ‘‘unified approach’’ would effectively
create a global minimum tax. The Treasury Department to date has made it a pri-
ority that the U.S. global intangible low-taxed income (or GILTI) tax regime would
be treated as a ‘‘deemed compliant’’ regime under any multilateral agreement. Do
you plan to continue to advocate for GILTI to be treated as a deemed-compliant re-
gime under Pillar 2?
Dr. Yellen did not answer whether the Treasury Department would continue to
advocate for GILTI to be treated as a deemed-compliant regime under Pillar 2.
Please provide a direct and substantive response.
Answer. President Biden has proposed substantially reforming GILTI as part of
his plan to ensure a fair and progressive tax code where wealthy individuals and
corporations pay their fair share. If confirmed, I look forward to learning more from
Treasury Department staff about the status of these negotiations and how they re-
late to other diplomatic efforts. As part of that process, I will consult with the staff
about the extent to which such positions are appropriate, including whether it would
be appropriate to treat the current U.S. GILTI regime as a ‘‘deemed compliant’’ re-
gime.
Question. As part of the proposed Pillar 2 approach, the OECD has proposed an
‘‘undertaxed payment rule’’ that would complement the global minimum tax. The
undertaxed payment rule effectively would tax a business on a payment made if the
recipient business is not subject to a certain level of tax with respect to the pay-
ment. U.S. businesses have voiced concerns that payments received by a U.S. com-
pany from a foreign affiliate could be subject to the undertaxed payment rule if the
payment receives preferential treatment under the foreign derived intangible in-
come (FDII) regime or through the application of another preferential rate or credit
regime. Will you advocate to preserve the application of U.S. tax law, including FDII
and other preferential rates and credits, if Pillar 2 includes an undertaxed payment
rule?
Dr. Yellen did not answer whether the Treasury Department would advocate to
preserve the application of U.S. tax law, including FDII and other rates and credits,
under Pillar 2. Please provide a direct and substantive response.

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Answer. If confirmed, I look forward to learning more from Treasury Department
staff about the status of these negotiations and how they relate to other diplomatic
efforts. As part of that process, I will consult with the staff about the extent to
which it would be appropriate to advocate for a multilateral rule specific to the
United States FDII regime in the context of a global discussion of a generally appli-
cable undertaxed payments rule.
Question. President Biden has proposed doubling the tax rate on global intangible
low-taxed income (GILTI) earned by foreign subsidiaries of U.S. companies from
10.5 percent to 21 percent. The Biden proposal also would eliminate GILTI’s exemp-
tion for deemed returns under 10 percent of qualified business asset investment
(QBAI). While described as a ‘‘loophole,’’ QBAI is intended to represent earnings at-
tributable to physical infrastructure in a foreign country. Because GILTI is intended
to target intangible income, income attributable to tangible income should not be
subject to tax.
While President Biden has described GILTI as an incentive for U.S. companies
to shift operations overseas, before the Tax Cuts and Jobs Act (TCJA), many U.S.
companies paid no U.S. tax on their foreign earnings. An increase in the GILTI rate
to 21 percent would make U.S. companies far less competitive with their foreign
counterparts because most foreign countries do not subject a company’s foreign
earnings to the same level of tax as domestic earnings. Coupled with the elimination
of QBAI, raising the rate to 21 percent would actually incentivize U.S. companies
to invert or be acquired by foreign companies, particularly given that the OECD is
currently considering a global minimum tax around 13 percent.
What is your view on the United States imposing a 21-percent tax on foreign
earnings if the OECD is planning to implement a global minimum tax at or around
13 percent? Wouldn’t that harm our U.S. companies by making them far less com-
petitive?
Dr. Yellen’s response provides that a ‘‘global minimum tax agreed to at the OECD
could, however, stop the destructive global race to the bottom on corporate taxation
and help discourage harmful profit-shifting.’’ If a global minimum tax is agreed to
at the OECD at or around 13 percent, would the Treasury Department propose that
GILTI apply at the same rate as agreed to at the OECD or continue to pursue the
21-percent rate proposed during the campaign?
Answer. I appreciate your concern regarding the competitiveness of our U.S. com-
panies amidst a changing international tax landscape. As you note, President Biden
has proposed substantially reforming GILTI as part of his plan to ensure a fair and
progressive tax code where wealthy individuals and corporations pay their fair
share. The U.S. has strong and unique attractions as a residence for multinational
corporations and, as a result, U.S. companies would remain competitive even if they
faced a somewhat higher 21 percent rate of tax on their foreign earnings. This is
even more true if a global minimum tax were agreed to at the OECD.
Question. President Biden’s ‘‘Made in America’’ proposal includes a 10-percent
penalty on goods and services imported by U.S. companies from foreign affiliates.
This policy would only penalize U.S. companies, putting them at a competitive dis-
advantage with similarly situated foreign companies. It also ignores the reality of
global supply chains. If our country penalizes imports from foreign countries,
couldn’t this policy encourage foreign countries to tax goods or services imported
from the United States?
Dr. Yellen’s response does not answer the question of whether this policy could
encourage foreign countries to tax goods or services imported from the U.S. sub-
sidiary of a foreign company. Please provide a direct and substantive response.
Answer. Anticipating the response of other countries to a tax change passed in
the United States is difficult, and relies on a variety of specific factors concerning
the nature of the change and the foreign country in question. While I would—if con-
firmed—welcome the opportunity to further explore this question with you with
more specificity, President Biden’s proposal would support American businesses and
workers.
Question. I have been a strong proponent of the bipartisan IRS private debt collec-
tion program, along with 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 collec-
tors to collect inactive tax debt due but unpaid. These are the tax debts not being
worked by the IRS and, absent this program, would likely never be collected. The

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program has proven its ability to collect hundreds of millions of dollars in otherwise
uncollectible tax debts on an annual basis, including generating nearly half a billion
dollars in net revenue in fiscal year 2020 alone. At the same time, it has generated
additional resources for the IRS that have enabled the IRS to hire 400 compliance
personnel and collect millions more in additional revenue. As Treasury Secretary,
can you assure me that the Treasury Department will continue to operate the pro-
gram to the full extent authorized under the law, including by ensuring that all in-
active debts as defined by the statute are provided to the collection companies in
a timely fashion?
Dr. Yellen indicated that she would work with the IRS to ‘‘make sure taxes are
collected in an efficient and effective manner,’’ but did not address whether the
Treasury Department, under her leadership, would faithfully operate the private
debt collection program as required by law.
Answer. I look forward to working with Treasury, if confirmed, to ensure that the
private-public partnership makes the tax system better for taxpayers while
strengthening the IRS.
Question. In a 2012 paper titled ‘‘Behaviorally Informed Regulation,’’ authors Mi-
chael S. Barr, Sendhil Mullainathat, and Eldar Shfir proposed, among other things,
a scheme in which credit-card issuing firms could charge late fees that ‘‘they deemed
appropriate, but the bulk of such fees would be placed in a public trust to be used
for financial education and assistance to troubled borrowers.’’ Firms could keep a
share of the fees, but ‘‘the bulk’’ of the fees would effectively be nationalized and
presumably controlled by the Federal Government’s behaviorists. Do you support
such a scheme of effectively nationalizing late fees on things like credit cards?
Dr. Yellen did not answer whether she supports such a scheme.
Answer. I look forward to studying the specific reform proposal raised in the
paper and referenced in the question. If I am confirmed, I am committed to working
with you to address the issues of insufficient financial literacy, reasonable access to
credit, and a well functioning and competitive financial system raised by the paper.
I look forward to working with Congress to ensure that consumers everywhere are
informed and safe in the financial marketplace.
Question. You have mentioned ‘‘stranded assets’’ several times during your con-
firmation process as a risk from climate change that you seem to believe could be-
come some sort of aspect of a risk to financial stability.
Is the anticipated shut-down of the Keystone XL project by the incoming adminis-
tration an example of stranded assets, where investments have been made and the
Federal Government intervenes to strand them and make them worthless?
Is one of the largest risks to realizing large amounts of stranded assets a risk that
the Federal Government will take unanticipated (when the investments were made)
actions to make such assets essentially worthless, because of actions by the Federal
Government intended to shut down production in sectors such as coal or other ‘‘fos-
sil fuels?’’
Dr. Yellen did not identify whether she believes shut-down of Keystone XL is an
example of a stranded asset. Dr. Yellen simply says that transition from fossil fuels
and other energy sources to renewable energy sources is not a decision or choice.
She did not comment substantively on whether shutdowns of energy-source sectors
stemming from government regulation or other actions present a risk of a large
amount of stranded assets being realized.
Answer. As you know, President Biden revoked the permit for the Keystone XL
Pipeline. That decision was consistent with the finding of the State Department—
after exhaustive review—that the pipeline’s significance for energy security and
economy is limited. The revocation for the permit for the Keystone XL Pipeline may
negatively impact some investors in the project, however, the continued develop-
ment of the pipeline would have created environmental risks.
I am committed to taking steps to better understand the physical and transition
risks of climate change to our economy, if confirmed. President Biden has put forth
a vision for investing in a clean energy economy that would recognize both the costs
and risks of climate change on the economy, and the opportunities to create new,
good-paying jobs.
Question. Do you intend to resurrect the Obama administration’s failed and ill-
designed myRA retirement savings scheme, partly by misusing the permanent, in-
definite appropriation provided to Treasury for compensating financial agents?

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Dr. Yellen did not identify whether she intends to resurrect myRA, which would
entail use of a permanent, indefinite appropriation for financial agents.
Answer. I am very concerned about retirement adequacy in the United States, and
am committed to identifying innovative, effective, and cost-efficient strategies for
improving the financial well-being of American households. I am aware of the goals
of the MyRA program, and some of the concerns surrounding the initiative’s admin-
istration. If confirmed, I look forward to consulting with Treasury staff on the MyRA
program and partnering with you and others in Congress to improve our country’s
retirement adequacy.
Question. In a June 7, 2016 article in the Huffington Post titled ‘‘The Koch Broth-
ers Are Trying to Handpick Government Officials. We Have to Stop Them,’’ Senators
Warren, Schumer, and Whitehouse put forward allegations, that have subsequently
been shown to be false, against a Republican nominee for a Social Security Trustee
position and a Republican nominee to a seat on the SEC. The authors identified that
the two nominees had worked at a think tank that received financial support from
the ‘‘Koch brothers.’’ The nominees, and officials at the think tank identified that
their research was not guided or constrained by any institutional donors, though the
authors seemed unconvinced, calling directly into question the integrity of the nomi-
nees.
Given the sensitivity of some to institutional funding, especially if funding is pro-
vided to institutions that include conservative scholars, and given that the Charles
Koch Foundation provided substantial funding to the Brookings Institution when
you worked there, as did many ‘‘wealthy corporations’’ and billionaires:
Should there be concern that you, in your position as Treasury Secretary, if con-
firmed, will, as the authors of the article referenced above warn, ‘‘serve the wishes
of wealthy corporations and their billionaire owners’’?
Should concerns about think-tank funders be limited to think tanks that allow
scholars to pursue conservative thoughts?
Should there be a double standard with respect to who is and who is not sus-
pected of being influenced by corporations and ‘‘billionaires’’ depending on their po-
litical positions?
Dr. Yellen did not respond to second and third questions above. Please provide
direct and substantive responses to those questions.
Answer. I am not directly familiar with the circumstances under consideration in
this question. Therefore, I do not think I am in a position to answer concerning the
fairness of the relevant critiques. As a general matter, I have valued insight and
discussion with scholars and colleagues that have varied viewpoints from my own.
I am not directly familiar with the circumstances under consideration in this
question. Therefore, I do not think I am in a position to answer concerning the fair-
ness of the relevant critiques.
Question. Social Security benefits are said to be ‘‘earned benefits,’’ in that for
every dollar of FICA tax paid in for disability or retirement benefits, there is a com-
mensurate benefit that accrues to the taxpayer. An old Franklin Roosevelt quote is
often invoked to reinforce the earned-benefit notion; in 1941, Roosevelt stated that
‘‘We put those payroll contributions there so as to give the contributors a legal,
moral, and political right to collect their pensions and their unemployment benefits.
With those taxes in there, no damn politician can ever scrap my social security pro-
gram.’’ To some, it is important that Social Security programs remain as ones that
can be characterized as earned benefits, meaning, again, that there is a benefit com-
mensurate with every unit of tax paid in. Otherwise, some fear, dependence of So-
cial Security benefits on partial general-fund revenue, or revenue cloaked as Trust
Fund revenue but accruing to the Trust Funds as tax payments that do not carry
any associated benefit accrual, would lead to Social Security being characterized as
some sort of ‘‘welfare,’’ and benefits being thought of as mere transfers to which re-
cipients do not necessarily have legal, moral, or political ‘‘rights.’’
What, to you, is meant by ‘‘earned benefit’’ in the context of Social Security bene-
fits?
Do you believe it is important to maintain a link between a benefit and a tax,
such that for every unit of Social Security taxes paid in, there is a commensurate
claim to a pecuniary benefit?

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Dr. Yellen’s response to the first question does not respond, in that it does not
identify with any sense of precision what an ‘‘earned benefit’’ means to her in the
context of Social Security benefits. Please provide a direct and substantive response
to the question.
Answer. I support a benefit formula which is based on contributions but which
also acknowledges the gains from a progressive schedule. Social Security’s progres-
sive benefit formula is offset, in part, by the regressive payroll tax cap. This long-
standing balance between linking benefits to contributions, while also maintaining
a progressive benefit formula, is one of the many successes of the program.
Question. The so-called HEROES Act (H.R. 6800), which passed in the House of
Representatives in May 2020, directs the Federal Reserve, in section 110801, in un-
usual and exigent circumstances, to purchase obligations issued by any State, coun-
ty, district, political subdivision, municipality, or entity that is a combination of any
of the several States, the District of Columbia, or any of the territories and posses-
sions of the U.S. Such purchases would occur within proposed modifications to the
Municipal Liquidity Facility that was established under section 13(3) of the Federal
Reserve Act, and the modifications would have to be made to, among other things,
‘‘ensure that any purchases made are at an interest rate equal to the discount win-
dow primary credit interest rate . . . commonly referred to as . . . the ‘Federal
funds rate’ ’’; and, to ‘‘ensure that an eligible issuer does not need to attest to an
inability to secure credit elsewhere.’’ Given that the Federal funds rate is near zero,
section 110801 in effect requires that the Federal Reserve make near-zero interest
rate loans to States, municipalities, and the like, independent of whether those ju-
risdictions are able to secure credit elsewhere—something that turns the Federal
Reserve into an agency providing assistance that is close to grant making.
Do you support the policies called for in section 110801?
More generally, do you support requiring that the Federal Reserve make loans to
potentially non-creditworthy borrowers at the Federal funds rate?
More generally, do you support allowing the Federal Reserve to make grants to
private or governmental entities?
Dr. Yellen’s response is, at best, tangential to the specifics asked in the questions
above. Please provide direct and substantive responses to the questions asked above.
Answer. I have not fully studied the specific language or the policy implications
of the text contained in section 110801 of H.R. 6800.
Without specific context for the economic circumstances and the underlying posi-
tion of the borrower, it would be inappropriate for me to suggest whether lending
by the Federal Reserve would be appropriate or not.
The Federal Reserve’s ability to extend assistance to private or government enti-
ties and the terms of such assistance is bound by the Fed’s legal authority as pro-
vided by Congress, and the authorities laid out in the law will be the basis for
whether providing such support is allowed.
Question. You seem to oppose rule-based monetary policy, and instead prefer dis-
cretion. Do you symmetrically not support rules-based economic stabilizers, such as
unemployment insurance tied formulaically to economic measures, and instead pre-
fer fiscal-policy discretion that is consistent with a continuing role for Congress and
representative democracy?
Dr. Yellen’s response provides her policy preferences, but does not provide a direct
and substantive response to the question posed above. Please provide a direct and
substantive response to those questions.
Answer. I support both automatic stabilizers and discretionary fiscal policy. Auto-
matic stabilizers help to ensure that assistance is provided as long as it is needed
and is phased out when it is no longer required, improving the predictability of pol-
icy. But there is also an important discretionary role for Congress to provide fiscal
support suited to unique circumstances, such as those currently resulting from the
pandemic. I believe there are circumstances when automatic stabilizers are not only
appropriate, but can be expanded and improved (including an examination of the
proper role of tying stabilizers to economic trends), but discretionary fiscal policy
can—and should—play a critical role in any relief effort as well. With respect to
monetary policy, I believe that both rules and discretion play valuable roles. The
Federal Open Market Committee regularly examines the prescriptions of a variety
of monetary policy rules. And it has publicized those recommendations in its Mone-
tary Policy Report to Congress. Nevertheless, the committee retains discretion need-

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ed to respond as deemed appropriate to the often unique circumstances prevailing
at a particular time.
Question. The incoming administration desires to reset the Federal minimum
wage to $15, despite warnings from the Congressional Budget Office that such a
move could cost upwards of 3.7 million workers a job. Of course, given variations
in the cost of living across the country, $15 for a worker in, say, New York City
or Berkeley, CA, is far different than for a worker in, say, West Virginia. And pay-
ing $15 an hour as an employer in Iowa is different, in terms of production costs,
than in States with higher overall living costs. A $15 minimum hourly wage is only
a bit below the May 2019 median hourly wage for all occupations for West Virginia.
Do you agree with the 2019 analysis from the Congressional Budget Office that
increasing the minimum wage, depending on how the increase is implemented, will
result in 1.3 million workers becoming jobless, and there is a two-thirds chance that
the change in employment could be a decrease of up to 3.7 million workers?
Do you believe that many low-wage workers will become displaced by technology
if a $15 minimum wage is enacted?
Do you believe there are negative employment effects of increasing the minimum
wage at both the extensive and the intensive margin?
What economic literature do you rely on to make your assessments regarding ef-
fects of an increase in the minimum wage to $15, which is well outside the size of
an increase that could be comfortably thought of as being within the relevant range
of applicability of existing studies?
Would you support implementation of indexation such that an increase in the
Federal minimum wage to $x per hour is implemented, but with $x per hour apply-
ing to any States with price levels equal to the national median and the minimum
wage in other States or municipalities indexed to State or municipal living costs
using the Bureau of Economic Analysis’s Regional Price Parities (RPPs) measure?
Dr. Yellen did not directly and substantively respond to the questions above.
Please provide direct responses to those questions.
Answer. President Biden has proposed raising the minimum wage to $15 as part
of his American Rescue Plan. Doing so would benefit millions of workers—including
many essential workers—who have struggled disproportionately during this K-
shaped recovery. As a result of a minimum wage that has not been increased in 12
years, the inflation-adjusted minimum wage has fallen by nearly one-fifth. Raising
the minimum wage to $15 would boost consumer spending power by low-wage work-
ers, raise retention rates, and boost productivity—all of which would benefit workers
and the economy at large. Moreover, the President’s proposed agenda takes into ac-
count the interests of small business owners and pairs the minimum wage increase
with immediate relief to small businesses as part of the crisis rescue package, as
well as additional measures he will propose to build a stronger economy over the
longer run.
I believe that the President’s plan to pass a $15 minimum wage would benefit
both low-wage workers and the economy at large. Past increases in minimum wage
levels, at both the Federal and State level, have not resulted in sizable displace-
ments from technology.
As I stated in my testimony, there is a robust economics literature on the min-
imum wage, and my reading of the findings of much of this literature is that the
likely impact on employment is minimal, including at both the extensive and inten-
sive margin.
I believe that it is important that all policy choices, including the minimum wage,
consider any and all costs and benefits. The minimum wage has been carefully stud-
ied over many decades and the findings show that historically the benefits from
raising the minimum wage have been far larger than any costs. Indeed, a number
of well-regarded studies that I am familiar with, including a series of studies by
economists Arin Dube and Michael Reich, have found no materially negative effects
on unemployment.
President Biden has proposed a $15 Nation-wide minimum wage, and I believe
that approach would greatly benefit struggling workers and strengthen the econ-
omy.
Question. Recent reports indicate that unemployment insurance fraud in Cali-
fornia alone may total $8 to $10 billion. Fraud takes resources away from those to

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whom the Federal Government intends to help and places them in the hands of
undeserving fraudsters, some of whom seem to recently have been parts of orga-
nized crime rings, perhaps with international scope. I’ve already asked the Depart-
ment of Labor to investigate California’s unemployment insurance system, since the
Governor of the State does not seem very interested in being serious about reining
in fraud. And, in the relief package that was enacted just a few weeks ago, I argued
for strengthened anti-fraud protections, while Democrats did not want many—if
any—protections, partly based on a notion that fraud detection could involve use of
racial- or income-biased risk-based fraud-detection systems.
Do you believe, with billions of dollars of fraud in the unemployment insurance
system, additional fraud detection is important?
Do you believe that it is possible to enact legislation calling for systems of risk-
based fraud detection without the result being use of systems or algorithms that
have racial- or income-based biases?
Dr. Yellen did not provide a direct response to second question above. Please pro-
vide a direct and substantive response.
Answer. I have not had the opportunity to explore the impacts of risk-based fraud
detection systems and whether they create racial- or income-based inequities. Al-
though the Unemployment Insurance system is administered by the Department of
Labor, I would be happy to further discuss the broader issue with you, if confirmed.
Question. Given what I expect will be proper efforts on your part to examine di-
versity at the Treasury Department, your views on diversity will impact your deci-
sion making. With respect to a recent lawsuit alleging that Harvard University’s ad-
missions processes discriminate against Asians:
Why did you join an amicus brief to seemingly reinforce your view that statistical
procedures and arguments used by your Berkeley colleague Professor David Card
were more carefully executed than procedures and arguments used by the opposing
side?
Do you believe, given arguments and analyses that you have seen related to the
case, that Harvard admissions do not discriminate against Asians?
Using data from a lawsuit against Harvard, an April 2020 National Bureau of
Economic Research paper (Working Pater 27068) by Arcidiacono, Kinsler, and Ran-
som identifies that they ‘‘show that there is a substantial penalty against Asian
Americans in admissions with limited scope for omitted variables to overturn the
results.’’ Do you find the results of that paper to be relevant to your views expressed
in the amicus brief that you joined, and do the results weigh on your views of
whether or not Harvard has discriminated against Asians through its admissions
processes?
Dr. Yellen did not respond to the last question above. Please provide a direct and
substantive response.
Answer. I signed the amicus brief because I was persuaded by the argument that
Professor Card made and the strength of his empirical work.
I have a long record throughout my career of drawing attention to issues of in-
come inequality and racial equity, including my efforts as Chair of the Federal Re-
serve, and the work that I’ve continued to do since, to draw attention to the need
to diversify the field of economics. I am committed to leveraging the full powers and
authorities of the Treasury Department to address issues of inequality as well as
diversity, equity and inclusion.

QUESTIONS SUBMITTED BY HON. MIKE CRAPO
TAXES

Question. A number of countries have imposed or plan to impose discriminatory
digital services taxes (DSTs) that unfairly target U.S. companies. The Finance Com-
mittee has expressed bipartisan opposition to unilateral measures like DSTs, and
advocated for countries to reach a multilateral agreement at the Organisation for
Economic Co-operation and Development (OECD).
Will you continue to negotiate toward a multilateral agreement at the OECD that
does not unfairly target U.S. companies and compromise the U.S. tax base?

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Answer. Yes, we are committed to the cooperative multilateral effort to address
base erosion and profit shifting through the OECD/G20 process, and to working to
resolve the digital taxation disputes in that context.
Question. House and Senate Democrats have proposed lifting the limitation on the
deduction for State and local taxes (SALT). Given the effect of the pandemic on our
country and economy, Congress has passed significant relief bills that focus on un-
employed Americans and smaller businesses that are struggling. The proposal to lift
the SALT cap, on the other hand, would overwhelmingly benefit wealthy house-
holds. According to the Joint Committee on Taxation, over half the benefit from re-
pealing the cap would go to taxpayers with incomes over $1 million, and 94 percent
of the benefit would go to taxpayers with incomes over $200,000.
What is your view of lifting the SALT cap, and do you think now is the time for
a tax break on high-income individuals and households?
Answer. As I noted at the hearing, I certainly believe in a fair and progressive
tax code where wealthy individuals and corporations pay their fair share. On this
issue, as with many others, it is important to consider the entire equation. For ex-
ample, it is critical to study and evaluate what the impact of the SALT cap has had
on State on local governments, and those who rely upon their services. I will work
with those at Treasury and throughout the administration in evaluating those im-
pacts, as well as other aspects of this issue.
Question. One area of bipartisan agreement is on the issue of retirement savings.
Congress passed the SECURE Act in 2019. With my support, many of my colleagues
in both houses and on both sides of the aisle are working to develop further legisla-
tion to promote retirement savings, which should be a top priority for the Finance
committee.
As Congress considers additional legislation, do you commit to working with Con-
gress on a bipartisan basis to enact policies that will further enhance Americans’
ability to save for retirement?
Answer. President Biden has proposed giving small businesses a tax break for
starting a retirement plan and giving workers the chance to save at work. In addi-
tion, under President Biden’s plan, almost all workers without a pension or 401(k)-
type plan will have access to an ‘‘automatic 401(k),’’ which provides the opportunity
to easily save for retirement at work—putting millions of middle-class families on
the path to a secure retirement. I look forward to working with Congress to improve
Americans’ retirement security.
HOUSING FINANCE REFORM

Question. Earlier this month, Treasury and FHFA announced revisions to the Pre-
ferred Stock Purchase Agreements (PSPAs) for Fannie Mae and Freddie Mac.
What are your views on the content of these changes, and what are the conditions
under which you would support an exit from conservatorship?
Answer. It is critical that we have a housing finance system that works for all
Americans, with widely available, affordable mortgage credit for home ownership as
well as affordable rental housing. We need a system that promotes financial sta-
bility as a whole, as well as one that protects consumers and taxpayers and provides
stability to households. A core feature of the U.S. housing finance system is the 30-
year fixed rate mortgage. I look forward to working across the administration and
with the Congress in support of these goals, if confirmed.
NON-PROPRIETARY MACHINE-READABLE DATA (FSOC)

Question. Dr. Yellen, I have long advocated for use of non-proprietary machine-
readable data that is fully standardized, searchable, and transparent. This data
modernization increases accountability to citizens and investors, and improves the
government’s ability to monitor and enforce compliance processes.
In your role as Secretary of the Treasury and as the Chair of FSOC, will you en-
courage Federal agencies to use non-proprietary machine-readable data formats that
are easily downloadable?
Answer. I am aware that this topic has been of high interest to you and your staff
for many years, and I appreciate your focus on the issue. If confirmed, I will work
with FSOC member agencies as well as the Office of Financial Research to review
existing standards and practices to ensure that the Federal Government is able to
make the most informed and transparent policy decisions possible.

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CLIMATE CHANGE AND BANK DISCLOSURES

Question. You have noted several times that you intend to make fighting climate
change a priority as Treasury Secretary. Why do you think financial regulation is
a more appropriate avenue to curb climate change rather than other agencies
uniquely focused on agriculture and the environment?
What kind of financial regulation are you looking at (financial disclosure, FSOC
requirements, or something that impacts capital)?
Answer. Climate change is an existential threat not only to our environment, but
to our economy. Combating climate change will require leadership and action from
various agencies, including Treasury. Structuring the right rules in the financial
marketplace will ensure that institutions and their leaders are planning for the risk
presented by climate change, protecting both the environment and the economy
from crisis.
FAIR ACCESS TO BANKING

Question. First, and as you are fully aware, I am a strong opponent of Operation
Chokepoint. During Chokepoint, we saw several politically disfavored industries,
such as firearms and oil and gas, become essentially unbanked during this time,
and in fact, it is still occurring today due to political pressure. I note all of this be-
cause I strongly support the OCC’s fair access rule and believe that legal industries
should be banked.
How will you ensure that all federally legal industries have fair access to banks,
even with the political pressure that they face?
Answer. If confirmed, I plan to direct a review of all recently released rules and
regulations. However, the fair access rule was promulgated by the OCC, which is
an independent banking regulator.
INSURANCE CAPITAL STANDARD TRANSPARENCY

Question. The International Association of Insurance Supervisors (IAIS) continues
its work to develop the global risk-based Insurance Capital Standard (ICS), which
is intended to serve as a common language for supervisory discussions of group sol-
vency and minimum Prescribed Capital Requirement (‘‘PCR’’) for Internationally Ac-
tive Insurance Groups. The ICS is an effort to define comparable standards and de-
termine solvency levels for Internationally Active Insurance Groups (IAIGs). How-
ever, there is concern that the ICS does not fit U.S. markets and is incompatible
with the State-based regulation of insurance in the U.S.
Treasury, the Federal Reserve Board (Fed), and the National Association of Insur-
ance Commissioners (NAIC) have expressed these concerns about the ICS, and
Team USA has also diligently been working on an alternative—the Aggregation
Method—to meet the stated objectives of the IAIS in a less disruptive and costly
manner. Furthermore, the Economic Growth, Regulatory Relief and Consumer Pro-
tection Act (EGRRCPA) also requires that the Treasury, Fed and FIO to study and
report on the impact on consumers and markets in the U.S. before supporting or
consenting to the adoption of any final international insurance capital standard.
Will you commit to engaging with the FSB and IAIS so the Aggregation Method,
the preferred approach of U.S. supervisors for measuring group-capital, is deemed
to be outcome equivalent to the ICS?
Answer. As with many questions of financial regulation, coordinating with our al-
lies and with international bodies like the Financial Stability Board is essential to
achieving regulatory outcomes that serve American interests and protect financial
stability. And it is critical that international regulatory standards be designed to
serve different markets with diverse structures and needs. Insurance is no different.
I am committed to engaging with international bodies like FSB and IAIS to achieve
regulatory outcomes consistent with the interests of American market participants
and State-based regulators, and I will continue the Federal Insurance Office’s efforts
to study the effects of ICS on U.S. insurance markets, if confirmed.
DEBT

Question. For the last 3 years, you served on the Board of Directors of the Com-
mittee for a Responsible Federal Budget (CRFB). In its estimate of all of the Biden
campaign proposals, the CRFB projects that even if all of the trillions of dollars in

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proposed Biden tax increases were enacted, the Biden plan would still increase defi-
cits by $5.6 trillion over the next 10 years, under their central estimate.
How sustainable is the current path of the U.S. debt and associated deficits, and
what steps can you take to put the U.S. on more stable fiscal footing in the long
term?
Answer. In the current environment, the most pressing challenge is to overcome
the pandemic and rebuild our economy. That will require additional relief, as pro-
posed by President Biden. If confirmed, I would look forward to working with the
Congress to secure that relief. Presently, interest rates are at historically low levels,
and our interest burden as a percentage of GDP is also quite low. Therefore, in the
current environment, it makes sense to invest in the relief needed to support fami-
lies and businesses. Over the longer term, as I have often stated, we need to ensure
that our country is on a sustainable path with respect to our debt burden. I look
forward to working with Congress on these important issues, if confirmed.
FINANCIAL STABILITY OVERSIGHT COUNCIL (FSOC)

Question. You have mentioned that you supported the de-designations of some in-
stitutions previously designated by FSOC. You also mentioned that you agree it is
important to regulate activities that heighten systemic risk, and that it in many
cases that approach makes more sense than regulating individual firms. However,
you have also said that individual firms also pose systemic risks and it is important
to supervise and regulate them. Under the Trump administration, the FSOC has
been meaningfully reoriented toward activities-based designation.
Do you agree with the guidance issued by FSOC on activities-based designations,
and exhausting all available remedies to financial risks prior to considering entity-
based designation?
Answer. As you know, the idea behind FSOC is to coordinate among regulators
so that significant risks to our economy do not go unaddressed because they do not
fall wholly into the purview of one regulator’s jurisdiction. My view is that the
FSOC should address risks whatever their origin. But our focus must remain on sta-
bility in our financial system and ensuring that we are prepared to mitigate market
disruption in times of stress.
I understand that the legal landscape has shifted somewhat since the Obama ad-
ministration, but I believe the FSOC should have the tools to protect our economy
from systemic threats, whether they’re presented by a single firm or risky actions
by an array of firms.
However, designation was never meant to be a one-way street—the procedures re-
quired an annual review, and firms should continually be evaluated and are cer-
tainly able to adjust their business models to be less risky in an effort to be de-
designated.
NATIONAL SECURITY POLICY CONCERNS

Question. If confirmed, you will be the first Treasury Secretary to enter your term
as a statutory member of the President’s National Security Council, thus, ensuring
that the economic and financial dimensions of national security are as carefully con-
sidered as more traditional military, intelligence and diplomatic concerns. The list
of national security concerns that you will face as Secretary on Day One is long and
growing, and includes the enforcement of U.S. sanctions against Iran, Russia, North
Korea, Venezuela and companies in China linked to its military; and, too, invest-
ment decisions before the committee on Foreign Investment in the United States
(CFIUS). From among these national security concerns, I have a number of ques-
tions.
Foremost, then, will you commit to holding bad actors accountable, to dismantle
the financial networks of terrorist organizations and others who seek to perpetrate
harm against the United States and to ensure that U.S. foreign investment protects
the national security interests of the United States?
How should the United States persuade other nations to follow our lead when it
comes to sanctions against various targets, whether it be Iran, North Korea or ter-
rorist groups?
What is your view of the Joint Comprehensive Plan of Action (JCPOA), the sanc-
tions relief it provided Iran, and the continued enforcement of US sanctions man-
dated by law?

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Will you use the voice of the United States to oppose IMF and World Bank loans
to Iran and other State sponsors of terror?
China has long been one of the biggest violators of U.S. sanctions. If confirmed,
how would you go about seeking better cooperation from China on sanction matters?
Finally, how should the United States persuade other nations to follow our lead
when it comes to sanctions against various targets, whether it be Iran, North Korea
or terrorist groups?
Answer. I commit to using Treasury’s sanctions and enforcement authorities to
identify and dismantle the financial networks of terrorists, proliferators, and others
who seek to perpetrate harm against the United States. I furthermore commit to
overseeing a rigorous review of foreign investments in the United States through
the CFIUS process. This vital work to our national security is something we will
do both independently and in coordination with partners abroad, through regular
and formalized dialogue, information sharing, and joint actions. If such coordination
does not succeed, the Treasury Department should be prepared to strongly urge
other nations to join us in targeting dangerous terrorists and proliferators, and ex-
pose their complicity if necessary. When it comes to our competitor China, we must
ensure that it is not allowed to violate our sanctions.
With regard to the JCPOA, The Biden-Harris administration is committed to en-
suring that Iran takes the appropriate steps to resume compliance. Iran will only
enjoy sanctions relief under the JCPOA if it complies with its nuclear constraints.
Furthermore, if confirmed, I will ensure that Treasury continues its important work
to combat Iran’s support for terrorism and abuse of human rights.
When it comes to the IMF and World Bank, we must make sure that they are
doing what they can to ensure developing countries have the resources for public
health and economic recovery, and will evaluate how investment policies support
global security and recovery working with our allies. The Biden-Harris administra-
tion will continue to maintain and impose sanctions on Iranian entities perpetrating
human rights abuses, and evaluate tools to combat State sponsors of terror. In par-
ticular, President Biden is committed to working with our allies and partners to
counter Iran’s destabilizing activities in the region, including its support for violent
proxies.
SUPPORTING MIDDLE EAST PEACE

Question. The Treasury Department has played a key role supporting the historic
peace agreements reached in 2020 between Israel, the UAE, Bahrain, Sudan, and
Morocco. If confirmed, will you continue Treasury’s work to support these agree-
ments and expand business opportunities between these countries and the United
States?
Answer. The Biden-Harris administration has expressed support for the Abraham
Accords, and I also support these historic agreements. I will work with others in
the administration to foster economic cooperation between and among these coun-
tries, and with the United States.
OPPOSING BOYCOTTS OF ISRAEL

Question. For more than 40 years, the Treasury Department has played a key role
in fighting international efforts to boycott Israel. If confirmed, are you committed
to fighting efforts to boycott, divest or sanction our ally Israel?
Answer. President Biden has led efforts to oppose the delegitimization of Israel,
whether in international organizations or by the boycott, divestment and sanctions
(BDS) movement in the United States. I support President Biden’s approach of op-
posing such efforts and if confirmed, will work as Treasury Secretary to oppose BDS
activities directed at Israel.

QUESTIONS SUBMITTED BY HON. JOHN CORNYN
TAX INCREASES AND REPEALING THE TAX CUTS AND JOBS ACT

Question. The Tax Cuts and Jobs Act provided tax relief to taxpayers by lowering
individual rates and expanding the child tax credit. It also helped to create a more
competitive tax system for U.S. companies in today’s global market, helping to cre-
ate jobs and lowering the unemployment rate to a level not seen in 50 years prior
to the COVID–19 pandemic. I know many of my Democratic friends are very critical

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of this law and have called for its immediate repeal, although the House of Rep-
resentative did not send the Senate a repeal bill last Congress. I also understand
that the incoming administration is proposing over $3 trillion in higher taxes.
In 2009, as the Nation was fighting to recover from the 2008 recession, President
Obama was asked about the possibility of raising taxes. He did not mince words.
He said, ‘‘The last thing you want to do is to raise taxes in the middle of a reces-
sion.’’
I am concerned about the pledge made by President Biden that he intends to re-
peal the Tax Cuts and Jobs Act ‘‘on Day One.’’ Is the administration still advocating
that Congress do so even as the country continues to recover from the COVID–19
pandemic?
It is imperative that this Congress and the administration do nothing to hamper
a robust recovery. I am hoping that you agree that this is exactly the wrong time
for Congress to be raising taxes. Placing unnecessary burden on most businesses
during an economic recession will only serve to increase the cost of capital and ham-
per their ability to make the investments necessary to facilitate job and wage
growth. Given the current economic conditions, do you think now is an appropriate
time to raise taxes on the American people?
Answer. With tax revenues at historical lows, ensuring that wealthy individuals
and corporations pay their fair share should be considered part of any plan to put
our country on a path to fiscal sustainability. President Biden has stated that he
will not ask families making under $400,000 per year to pay more in taxes, and will
enact more than one-dozen middle-class tax cuts that will finally give working fami-
lies the financial support they deserve.
When it comes to the timing of the various fiscal policies enacted as part of the
relief and recovery effort, the most critical elements are to deliver necessary services
and economic relief, including vaccine distribution, additional aid to small business,
and expanded unemployment insurance. This principle is reflected in the President’s
proposed COVID relief package.
U.S. DEBT AND ENTITLEMENT REFORM

Question. We have passed almost $3.5 trillion in response to the COVID–19 pan-
demic; this includes a $900-billion bill signed into law less than a month ago. Now,
the incoming administration is proposing another $1.9 trillion. If enacted, the total
amount enacted in less than a year will almost total $5.5 trillion, which is larger
than Japan’s economy and is almost 25 percent of our GDP. This is an astonishing
amount of money. It would also be more than what the Federal Government spent
on everything—including defense, Social Security, Medicare, transportation—in
2019. We know this rate of spending is not sustainable. The Committee for a Re-
sponsible Federal Budget is already estimating that the budget deficit is set to ex-
ceed $2.3 trillion this fiscal year, the second-highest since World War II.
The future appears to be bleak. The Congressional Budget Office estimates that
the Federal debt held by the public surpasses its historical high of 106 percent of
GDP in 2023 and continues to climb in most years thereafter. For example, by 2050,
it will nearly be two and a half (2.5) times what it was at the end of 2019. The
growth in future Federal spending, primarily from entitlements, drives the upward
projection of the national debt. In fact, CBO forecasts that spending will grow from
an average of 21.3 percent of GDP from 2010 to 2019 to an average of 29.3 percent
from 2041 to 2050. And, keep in mind, these estimates do not include the recent
legislation passed in response to the COVID–19 pandemic or any new spending pro-
posals from the incoming administration.
You have raised concerns about the debt almost every year over the past decade.
You discussed the ‘‘unsustainable’’ path of the rising national debt as Vice Chair of
the Federal Reserve, as Chair of the Federal Reserve, and as an economist at the
Brookings Institution.
Do you still have these same concerns? If not, why not?
What is the incoming administration’s plan to control spending and reform our
entitlement programs?
What reforms to the congressional budget and appropriations process does the in-
coming administration support?
Answer. I believe that the current economic crisis calls for robust fiscal support,
but also believe it is critical that we put our country on a path towards long-term

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fiscal sustainability. In this vein, I’ve called for more fiscal support since the early
days of the pandemic and continue to do so. Without question, we have to be con-
scious of our debt, but it’s clear that fiscal stimulus to support the economy and the
working families most affected by the impact of COVID–19 is our most urgent pri-
ority.
Today’s low interest rates also increase the urgency of making investments in our
people and in our infrastructure that will produce returns in the years ahead and
leave future generations better off. The combination of persistently low rates and
the need for investing in our people, communities, and environment offers our Na-
tion a unique opportunity to make real progress in areas that have been neglected
for too long.
There are long-term budget challenges. We are committed to implementing re-
sponsible policies that grow the economy, ask high-income Americans and corpora-
tions to pay their fair share, and give our country even more capacity to face the
challenges ahead.
These policies will help drive down the debt relative to the size of the economy.
As part of this effort, the administration will consider and seek reforms to the budg-
et and appropriations process that can help aid the effort to achieve fiscal sustain-
ability.
FINANCIAL INSTITUTION LENDING

Question. Federal financial policy issues cross over several Federal agencies, in-
cluding the Treasury Department, the Securities and Exchange Commission, the Of-
fice of the Comptroller of the Currency, and the Federal Reserve. On this note, I
applaud the Office of the Comptroller of the Currency for recently issuing a rule
that would prohibit financial institutions from refusing to lend or provide other
services to entire categories of lawful businesses. I think we can agree that that a
borrower’s credit characteristics should determine if they get a loan.
I am concerned about media reports that the new administration supports policies
that would restrict capital investments in America’s energy sector. These restric-
tions will reverse the progress we have made. We know that things like horizontal
drilling and fracking have transformed the global energy market, and America is
no longer hostage to foreign oil. Now it is one thing to allow market forces to change
the Nation’s energy mix, it is an entirely different matter to blacklist entire indus-
tries from accessing the capital markets.
Can you tell me if the incoming administration is considering policies that will
limit access to capital for specific industries?
If so, what role will the Treasury Department play in limiting capital for Amer-
ican oil and natural gas development?
How will Treasury interact with the other Federal agencies, including the Federal
Reserve on this effort?
Answer. If confirmed, I believe our near-term focus from a policy perspective
should be on COVID relief and economic recovery. It is the responsibility of the
Treasury Secretary to strengthen the U.S. economy, foster widespread economic
prosperity, and promote an economic agenda that leads to long-run economic
growth. Meeting that challenge undoubtedly requires focus on the current economy,
but also requires a commitment to the building blocks of enduring prosperity.
The Treasury Department has a wide range of responsibilities to fulfill these com-
mitments, including monitoring and overseeing various financial markets, admin-
istering our Nation’s fiscal policies, engaging in international economic negotiations,
and ensuring the stability of a wide range of factors related to the health of the U.S.
economy.
In addition, you raise important questions about rulemaking by the independent
Federal financial regulatory agencies. If confirmed, I look forward to working with
the Congress on these important issues.
ELIMINATING THE CAP ON THE SALT DEDUCTION
AND BENEFITS TO HIGH-INCOME TAXPAYERS

Question. The Tax Cuts and Jobs Act imposed a $10,000 cap on the amount indi-
viduals can deduct for State and local taxes, also known as the SALT deduction.
The Tax Policy Center estimates that 57 percent of the benefit of repealing the
SALT cap would go to the richest one percent of taxpayers. In addition, the Joint

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Committee of Taxation estimates that if the cap were removed, over half of the dol-
lar value of the benefit would flow to households making over $1 million. Last Con-
gress, the House of Representatives passed the HEROES Act, which would roll back
the SALT cap. Supporters of the HEROES Act argued its passage was necessary to
help the Nation respond to the COVID–19 pandemic.
Do you agree with the analysis that eliminating the SALT cap created by the Tax
Cuts and Jobs Act would provide a disproportionate direct benefit to upper-income
taxpayers?
Do you think repealing the SALT cap is an effective policy response to the current
COVID–19 pandemic?
Answer. As I noted at the hearing, I certainly believe in a fair and progressive
tax code where wealthy individuals and corporations pay their fair share. On this
issue, as with many others, it is important to consider the entire equation. For ex-
ample, it is critical to study and evaluate what the impact of the SALT cap has had
on State on local governments, and those who rely upon their services. I will work
with those at Treasury and throughout the administration in evaluating those im-
pacts, as well as other aspects of this issue.
U.S. CORPORATE TAX RATE AND U.S. COMPETITIVENESS

Question. The Tax Cuts and Jobs Act helped make American workers more com-
petitive in today’s global marketplace. One way it did this was by reducing the cor-
porate tax rate, which was at the time one of the highest of those countries who
are in the Organisation for Economic Co-operation and Development or ‘‘OECD.’’
Many analysts argue that our high corporate tax rate led many U.S.-based compa-
nies to relocate their headquarters to foreign countries through so-called ‘‘corporate
inversions.’’ Now there are instances where companies are coming back to the
United States.
In your view, is it essential that the U.S. retain a combined, including State and
Federal, corporate tax rate that allows it to stay competitive with its developed
country peers?
Answer. I believe it is necessary for U.S. companies to be globally competitive,
and, if confirmed, would work through the OECD/G20 process to agree with our al-
lies on a global tax regime that protects American competitiveness while ensuring
corporations pay their fair share.
Question. Do you believe cost recovery provisions are essential for businesses to
reinvest and that all economic sectors should be given access to these provisions?
Answer. I believe that businesses should be able to recover their costs so that the
income tax taxes net income and not gross receipts. The timing of when businesses
should receive such deductions is a complicated question, on which I look forward
to working with you and the Treasury staff.
GOVERNMENT-IMPOSED MINIMUM WAGE RATE

Question. The incoming administration’s $1.9 trillion package calls for an increase
in the Federal minimum wage to $15 per hour. In 2014, former President Obama
wanted to raise the minimum wage to $10.10 per hour. At the time, the Congres-
sional Budget Office (CBO) estimated that this would lead to about 500,000 Ameri-
cans losing their jobs. As Chair of the Federal Reserve, you were asked before the
Senate Banking Committee about the CBO analysis and you replied, in part, that
‘‘there would be some amount of negative impact on employment’’ and that you
would not argue with the CBO assessment. Just last month, CBO again confirmed
that increasing the Federal minimum wage would cause some American workers to
lose their jobs and their family income to fall in some cases below the poverty
threshold.
Do you still agree with CBO’s assessment that increasing the Federal minimum
wage will lead to some Americans losing their jobs?
As you know, industries that traditionally pay minimum wage are many of those
that have been negatively impacted by the COVID–19 pandemic; this especially in-
cludes restaurants and small businesses. Given CBO’s assessment that increasing
the minimum wage means job losses for American workers, how does increasing the
Federal minimum wage help the Nation recover from the COVID–19 pandemic?
Answer. It is the responsibility of the Treasury Secretary to strengthen the U.S.
economy, foster widespread economic prosperity, and promote an economic agenda

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that leads to long-run economic growth. Meeting that challenge undoubtedly re-
quires focus on the current economy, but also requires a commitment to the building
blocks of enduring prosperity. A living wage is one of those building blocks. Raising
the wages for the lowest paid workers in America can unlock billions of dollars of
consumer spending that can be used to fuel demand for the essential goods and
services that small businesses provide. This is especially true for the workers who
put their lives on the line each and every day to provide essential goods and services
to our communities.
COMMITTEE ON FOREIGN INVESTMENT IN THE UNITED STATES (CFIUS) REFORM

Question. When we met virtually last month, we discussed how China seeks to
acquire cutting-edge U.S. technology by any means necessary, including buying it,
licensing it, or even stealing it through hacking or more traditional methods. I con-
sider this a serious national security issue. Within the U.S. Government, the inter-
agency body that is responsible for reviewing those types of transactions and deter-
mining their national security implications is known as the Committee on Foreign
Investment in the United States, or as ‘‘CFIUS.’’ The Treasury Secretary chairs this
committee.
In 2018, Congress passed legislation I authored called the ‘‘Foreign Investment
Risk Review Modernization Act.’’ This legislation reformed and modernized the
CFIUS process and the outgoing administration worked to implement this legisla-
tion.
Can I ask for your commitment that, if you are confirmed as Treasury Secretary,
you will work to make sure that these reforms continue to be implemented and that
Treasury will work hand-in-hand with all the other relevant agencies who serve on
CFIUS?
I am also working on additional legislative proposals that build upon these re-
forms. Would you be willing to work with me in developing ways to further
strengthen the CFIUS process?
On July 10, 2020, I sent a letter to the Treasury Department requesting a classi-
fied briefing on the status of CFIUS’s review of a wind farm project located near
Laughlin Air Force Base in Val Verde County, Texas. To date, I have not received
that briefing. Will you be willing to provide this briefing and update me on the sta-
tus of this review?
Answer. If confirmed, I will be fully committed to implementing the reforms to
CFIUS passed in the Foreign Investment Risk Review Modernization Act. I plan to
work closely with all CFIUS members to execute the committee’s mandate and look
forward to working with you on ways to strengthen the CFIUS process, which is
so important to our national security. If confirmed, I will be happy to follow up with
you on the question you raised and your request for a briefing.
GENERAL BUSINESS CREDITS /BUILDING BUSINESS BACK ACT OF 2020

Question. The CARES Act and its successor legislation focused on providing li-
quidity to those businesses that bore the burden of government action, including
lockdowns that crushed economic activity. Members on both sides were proud to put
in place the Paycheck Protection Program (‘‘PPP’’) for small businesses that kept
workers on the payroll. Another example is the employee retention tax credit. Con-
gress modified and extended both programs on a bipartisan basis. I think we all
know that these employment-based incentives saved millions of jobs.
I would like to draw your attention to a gap in the scope of the provision of liquid-
ity for recovery. It affects major sectors of the economy. I am particularly concerned
about that sector of the business community that is bigger than that defined for the
PPP, but smaller than theFortune 100. The CARES Act set out lending facilities,
such as the Main Street Lending Facility, but unfortunately, those facilities did not
fill the gap.
At a recent SEC roundtable held by the Securities and Exchange Commission, one
participant observed, ‘‘[G]etting credit into the large cap companies doesn’t nec-
essarily distribute credit to our small and medium-sized businesses that they need.’’
During the last Congress, I introduced the ‘‘Building Business Back Act of 2020’’ to
fill this gap. The proposal would accelerate the benefits of general business credits
for which the government is already liable to the taxpayer and thus would not be
new business tax relief. Rather it would simply ensure that these tax credits, sitting
on company balance sheets, would be ‘‘monetized’’ or converted to the liquidity these
companies need today.

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A number of business stakeholders, including the Texas Association of Business,
who employ millions of Americans, support this concept. In a letter to the Senate
Finance committee, these organizations noted that ‘‘By temporarily giving compa-
nies the option to monetize their general business credits, Congress can help ensure
that the recovery is as strong as possible.’’
Question. I would like to work with you on this proposal as the Biden administra-
tion considers additional recovery proposals. Are you willing to commit to do so?
Answer. If confirmed, I would welcome the opportunity to learn more about your
legislation and work with you to get the economy back on track, particularly for
small and mid-sized businesses which are the backbone of our economy. The country
is currently facing an unprecedented pandemic that has exposed economic inequal-
ities rooted in our financial system for generations. It is imperative that the govern-
ment does its part to catalyze an economic recovery that is both equitable and sus-
tainable.
U.S. INNOVATION

Question. Semiconductors underpin nearly all innovation today including military
systems, telecommunications, health care, critical infrastructure, precision agri-
culture, and manufacturing. Almost 25 percent of our economic growth can be at-
tributed to semiconductor technology. Semiconductors are the 5th largest U.S. ex-
port and essential to U.S. economic competitiveness and national security—and are
a critical supply chain.
Unfortunately, the U.S. has lost substantial ground in manufacturing semiconduc-
tors while China is increasing their footprint. U.S. production has dropped from 24
percent to 12 percent and by 2030, Asia is projected to control 83 percent of the
global manufacturing supply of semiconductors while domestic production could be
less than 10 percent. According to the Organisation for Economic Co-operation and
Development (OECD), between 2014 and 2018, other foreign nations (including Ire-
land, Israel, South Korea, and Taiwan) gave more than $50 billion to semiconductor
firms to support construction of fabs in their countries, driving this capacity shift.
The United States must compete with foreign nations and invest in advanced
manufacturing and packaging capabilities to secure our supply chain and build a
robust domestic ecosystem to protect our national security. For this reason, I worked
with my colleague Senator Warner, on introducing the CHIPS for America Act last
year. We joined our efforts with Senators Schumer and Cotton to include this lan-
guage in the NDAA on a floor amendment that passed with 96 Senators supporting-
these provisions are now law. But more work needs to be done. We were not able
to include an investment tax credit that is part of the CHIPS Act and we need to
make sure the CHIPS Act is fully funded in the future.
Question. Given the global competition and incentives other countries currently
offer, do you think the Federal Government has a responsibility to compete with
these foreign countries, including China, to support reshoring manufacturing capa-
bilities for critical industries to ensure supply chain security and create good-paying
jobs here at home?
Answer. The Biden administration will engage in a whole-of-government approach
to China that uses our available tools in a manner that is designed to achieve our
economic, national security, and foreign policy goals. U.S. efforts to maintain its
technological and innovation edge, including in sensitive ‘‘dual-use’’ technologies,
must focus on reshoring critical supply chains. If confirmed, ensuring that the
United States is able to compete in the global economy will be a top priority.
DIGITAL SERVICES TAX (DST) AND U.S. LEADERSHIP

Question. It is important we confront countries who put in place discriminatory
taxes targeting U.S. companies and appropriating revenue from the U.S. tax base.
Unfortunately, these taxes are expanding to cover a wider range of digital services,
bringing many new US companies into scope, including streaming services, cloud,
and financial services.
Recently the U.S. Trade Representative released section 301 reports on Austria,
Spain, and the UK determining their digital services taxes (DSTs) are discrimina-
tory towards U.S. companies, inconsistent with prevailing international tax prin-
ciples, and highly restrictive of U.S. commerce and exports. These countries are
joined by France, India, Italy, and Turkey—which are siphoning billions away from
the U.S. tax base with similar discriminatory digital taxes.

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Will the administration engage these countries to protect American companies
and the U.S. tax base from these efforts?
Answer. I am certainly aware of the concerns U.S. companies have raised about
digital services taxes. While the details of digital services taxes differ across juris-
dictions, many have been designed in a way that unfairly singles out a few large
U.S. digital platform companies. I look forward to consulting with the USTR and
the Congress on these issues.
Question. What steps will the administration take to challenge these taxes from
a trade and diplomatic perspective?
Answer. The administration is committed to a cooperative multilateral effort to
address base erosion and profit shifting through the OECD/G20 process, and to
working to resolve the digital taxation dispute in that context. I look forward to con-
sulting with the United States Trade Representative and the Congress on these
issues.
Question. How do you plan to assert American leadership in the discussions on
tax reform being held at the Organisation for Economic Co-operation and Develop-
ment (OECD) while protecting the U.S. tax base and U.S. industries?
Answer. At the OECD in particular, the administration will vigorously reengage
with multilateral efforts to update global tax rules in ways that establish minimum
taxation, prevent profit-shifting, and support a level playing field. More generally,
the Biden-Harris administration will support multilateralism in international eco-
nomic affairs not only in tax discussions at the OECD but across a range of issues,
including with respect to bold and creative efforts to use all existing instruments
at our collective disposal to help stabilize the global economy, and to set the founda-
tion for a broad-based, inclusive global economic recovery. Recommitting to multilat-
eral leadership writ large will also help reassert American economic leadership in
international tax matters.
STUDENT LOAN DEBT

Question. Student loan balances in this country have climbed over the past decade
as the cost of college has significantly outpaced inflation—increasing by some esti-
mates 3 percent per year. I understand that the incoming administration supports
forgiving $10,000 in student debt per borrower. Others have argued for canceling
up to $50,000.
The Committee for a Responsible Federal Budget recently noted that nearly two-
thirds of the benefit from canceling $50,000 in student debt would go to the top 40
percent of households and over three-tenths would go to the top quintile.
How would student loan forgiveness put a downward pressure on college costs?
As may know, there already exist numerous repayment programs for individuals
with student loan debt, with an average amount of $32,000. Why does the Federal
Government need to offer further debt forgiveness to individuals who have made a
personal decision to take out a loan?
Answer. The rising costs of education and the potential impact that student loan
debt have on a wide range of social and economic effects, ranging from putting home
ownership out of reach, to forcing career choices, to delaying or eliminating retire-
ment savings. Importantly, the burden of student debt disproportionately falls on
students of color. A growing economic literature has raised serious concerns about
the burden of student debt for some borrowers and its impact on lifelong wealth ac-
cumulation. Recent actions on student loan payment deferrals reveal that the Fed-
eral Government can have a role in addressing this problem. If confirmed, I will
consult with the President and the Secretary of Education to discuss the various op-
tions and help identify the appropriate actions to alleviate this burden.
U.S. DOLLAR IN THE GLOBAL ECONOMY

Question. Many economists and investors refer to the U.S. dollar as a ‘‘reserve
currency’’ when referring to its use by other countries when settling their inter-
national trade accounts. This provides our economy with certain, distinct advan-
tages.
What policies will help the dollar maintain its position as a ‘‘reserve currency’’ in
the global economy?

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Answer. There are many important reasons that the U.S. dollar is the world’s
dominant reserve currency. The United States has the largest economy and the
deepest and most liquid capital markets. Going forward, I am committed to main-
taining a sound economy and confidence in our financial system. The Biden-Harris
administration will make investments in the American people that will accelerate
the U.S. economic recovery and lay the foundation for a strong and equitable U.S.
economy in the years ahead.
Question. What are your views regarding the value of the dollar relative to the
major foreign currencies?
Answer. The value of the U.S. dollar and other currencies should be determined
by markets. Markets adjust to reflect variations in economic performance and gen-
erally facilitate adjustments in the global economy.
EXCHANGE RATES

Question. Through the Omnibus Trade and Competitiveness Act of 1988 and
Trade Facilitation and Trade Enforcement Act of 2015, Congress gave explicit au-
thority to the Treasury Secretary to address currency undervaluation by U.S. trad-
ing partners and identified bilateral negotiations as the appropriate recourse in
such instances. However, recently other parts of the executive branch have been
wading into these issues. For example, USTR launched an investigation and issued
a report under section 301 of the Trade Act of 1974 into Vietnam’s currency valu-
ation practices, and the Commerce Department has begun considering currency
undervaluation as a countervailing subsidy.
What are your thoughts on this matter and do you believe these actions by other
agencies are outside the original intent of the existing statutes to address currency
undervaluation?
Answer. The President opposes attempts by foreign countries to artificially manip-
ulate currency values to gain unfair advantage over American workers. The Biden-
Harris administration will be examining how Treasury, Commerce and USTR can
work together to put effective pressure on countries that are intervening in the for-
eign exchange market to gain a trade advantage.
Question. Will you commit to reviewing the December 2020 report and reasserting
Treasury’s role in leading currency undervaluation issues?
Answer. It is critical that we address any issue pertaining to exchange rates in
a coordinated manner. I look forward to working with Congress and my colleagues
in the administration to address foreign exchange intervention to gain an unfair
trade advantage.
TARIFFS

Question. We are currently engaged in a number of trade disputes with both allies
and adversaries where tariffs have been used as the remedy of choice. These tariffs
have each resulted in retaliatory tariffs against U.S. exporters including manufac-
turers and agricultural interests. Tariffs are taxes that are paid by U.S. businesses,
raise costs for consumers and manufacturers and have led to markets being lost for
our agricultural exporters. The current tariffs have had a negative impact on compa-
nies large and small, especially impacting the economic recovery of many U.S. busi-
nesses during COVID–19. President Biden has talked about the need to reevaluate
the trade war and the economic impact caused by the tariffs.
Do you commit to conducting an economic review of the tariffs and the impact
they have had on the U.S. economy?
Answer. The Biden administration will work towards a system that allows U.S.
farmers and workers to compete on a level playing field. If confirmed, I am com-
mitted to working across the interagency to conduct a review of how we can best
support American industry and 21st-century jobs.
Question. With the China Phase One deal still underway and with built-in mecha-
nisms for bilateral engagement, do you foresee being actively engaged in bilateral
talks with China as your predecessor was ?
Answer. President Biden has said he will review all aspects of the Trump admin-
istration’s trade policies toward China, including how completely Beijing has lived
up to the terms of the Phase One Agreement. We are closely monitoring China’s ad-
herence to all of its Phase One commitments, including both the purchase commit-
ments and structural commitments. President Biden has said that he is not going

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to make any immediate moves on the current China tariffs. As part of his review,
he is going to consult with allies to galvanize collective pressure. We need a dif-
ferent approach that actually brings meaningful pressure on China.
Question. What is your position on keeping the section 301 tariffs on China in
place?
Answer. President Biden has said that we will review the tariffs on China and
consult with our allies and will not be making changes until we do both of these
things. The Biden administration will make use of the full array of tools to counter
China’s abusive economic practices and hold Beijing accountable.
FOREIGN TRADE ZONES (FTZS)

Question. Tariff levels are nearing those of the Depression-era in the 1930s. At
that time, the Smoot-Hawley Tariff Act was a contributing factor to those high tariff
levels. Today, record tariff levels are a result of largely unilateral actions used
through delegated authorities given to the executive branch in the trade acts of
1962 and 1974. Shortly after the Smoot-Hawley Act was enacted, Congress set out
to explore ways to improve trade flows. One such action was the creation of the For-
eign Trade Zones (FTZs) Act in 1934. This program has been in existence for nearly
90 years, and today’s tariff environment deserves Congress’s attention to improving
the program and achieving our Nation’s trade and economic objectives.
As Secretary, you will be the executive officer of the FTZ board. I intend to exam-
ine the FTZ program and explore how its use can be beneficial in (1) working to-
gether with our partners and allies to reinvigorate trade flows; (2) restore critical
supply chains; and (3) help rebuild our economy in the wake of COVID–19.
Can you provide your views on the recently reinstated NAFTA-era restriction (sec-
tion 601(b) of title VI of division O of Public Law 116–260) that prevents products
operating in FTZs from receiving reduced-tariff benefits under the U.S.-Mexico-
Canada (USMCA) trade agreement?
Answer. I understand that this provision reinstated a rule from NAFTA’s imple-
menting legislation, which prevents goods produced in U.S. FTZs from receiving
preferential treatment even if they meet rules of origin requirements. I support ef-
forts to rebuild American manufacturing and exports. Foreign trade zones can offer
American businesses the opportunity to compete on an even playing field with for-
eign companies by reducing tariffs and duties on foreign inputs. It is critical that
our rules for FTZs ensure American producers receive this benefit and are able to
compete on even footing with their foreign counterparts.
Question. What is the purpose of this restriction, and do you believe that the U.S.
has treaty obligations under USMCA (or other agreements) to keep this provision
in place? If so, can you specify the articles under which the USMCA obligations
apply for this provision? Is the intent of this provision limited to U.S. law?
Answer. I was not involved in negotiating USCMA or developing this legislation,
so I cannot speak to the purpose of this restriction or whether USMCA negotiators
intended it. If confirmed, I will work to ensure free trade agreements protect Amer-
ican workers, including FTZ provisions.
Question. How does the FTZ restriction mentioned above effect businesses that
currently use duty drawback to reclaim duties on products produced in the U.S. and
subsequently exported outside the country?
Answer. In general, FTZs allow for immediate duty relief once FTZ status is
achieved, whereas duty drawback requires a wait while the claim is processed.
Question. Do you believe that the FTZ restriction mentioned above is unfair to the
FTZ equivalents in Canada and Mexico that do not have similar restrictions in their
domestic laws?
Answer. We should strive for parity between our treaty implementing legislation
and that of our treaty partners. I believe we should study the extent to which any
differences in domestic FTZ treatment put American producers at a disadvantage
and work to minimize disparities going forward.
Question. What role, if any, do you believe the FTZ program can play in creating
a controlled and audited environment for providing domestic production and manu-
facturing capacity of critical supply chains?
Answer. I believe that under the right circumstances and with the right program
design, FTZs can contribute to domestic manufacturing and supply chain security

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by reducing tariffs on foreign inputs used by domestic producers, encouraging value-
added production by American manufacturers. If confirmed, I will seek to use all
available trade tools to put workers first and restore American competitiveness.
CHINESE NATIONAL OFFSHORE OIL COMPANY (CNOOC)

Question. The Chinese National Offshore Oil Company (CNOOC) was added to the
section 1237 list of ‘‘Communist Chinese Military Companies’’ authorized under the
1999 NDAA of which the Treasury’s Office of Foreign Assets Control (OFAC) was
tasked with writing the legal and technical guidelines for how this listing may be
applied. This action, as well as others, such as the addition of CNOOC and other
Chinese oil companies to the Department of Commerce Entity List have potentially
significant economic impacts to U.S. companies with investments, partnerships, and
operations in China as well as significant unintended consequences with these ac-
tions being taken in series and combination.
Will you commit to responsibly engaging industry stakeholders to inform how
Treasury related sanctions align with economic impacts?
How will the Treasury Department under your leadership administer effective
and targeted sanctions policies that harm their intended target, change malign be-
havior, and protect US economic interests in the process?
Answer. If confirmed, I commit to ensuring that the Treasury Department actively
engages industry stakeholders on sanctions issues, seeking to carefully understand
effects on markets, firms, and our national and economic security. Furthermore, the
Treasury Department will conduct a careful review of sanctions to ensure that they
are targeted, effective, and minimize unintended consequences.

QUESTIONS SUBMITTED BY HON. JOHN THUNE
Question. Rural communities across the country are hurting, and in many cases
this was the reality before the pandemic. Can you comment on the administration’s
plans to help rural America access new capital and open markets?
Answer. I appreciate that many rural communities are struggling, and if con-
firmed, I am committed to working with my administration colleagues to address
both the immediate economic pain being felt in many parts of rural America as well
as longer-term challenges. As we develop and implement policies to help small busi-
nesses access capital, I will pay particular attention to ensuring that our approach
addresses some of the barriers that might be unique to rural areas.
Question. If confirmed as Treasury Secretary, you would also head the Financial
Stability Oversight Council (FSOC). Can you comment on some of the non-bank fi-
nancial risks that you would be focusing on in your potential position as head of
FSOC?
Answer. As you know, the Financial Stability Oversight Council (FSOC) was cre-
ated by Congress under the Dodd-Frank Wall Street Reform and Consumer Protec-
tion Act (DFA) following the Financial Crisis that brought the U.S. economy and
financial system to the brink of collapse.
One of the missions of the FSOC itself as spelled out by Congress with regard
to financial stability in the DFA is as follows: ‘‘to identify risks to the financial sta-
bility of the United States that could arise from the material financial distress or
failure, or ongoing activities, of large, interconnected bank holding companies or
nonbank financial companies, or that could arise outside the financial services mar-
ketplace.’’ This provision appears rooted in the experiences of the Financial Crisis,
when the U.S. economy was close to ruin following the failures and near-failures
of large, interconnected bank holding companies and nonbank financial companies
that threatened and undermined financial stability.
The fundamental purpose behind FSOC is to facilitate coordination among regu-
lators so that significant risks to our economy do not go unaddressed because they
do not fall wholly into the purview of one regulator’s jurisdiction. My view is that
the FSOC should address risks whatever their origin. But our focus must remain
on stability in our financial system and ensuring that we are prepared to mitigate
market disruption in times of stress. A clear example of such market disruption is
the recent disruptions in the Treasury market, and it should be part of the FSOC’s
responsibility to look into the Treasury market disruption and any potential inter-
play with non-bank financial risks.

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QUESTIONS SUBMITTED BY HON. ROB PORTMAN
Question. The Tax Cuts and Jobs Act was the first time Congress has passed
meaningful tax reform in 30 years, and for many Americans. Hundreds of U.S. busi-
nesses, large and small, have made investments totaling $482 billion in equipment,
buildings, and—most importantly—their employees. Prior to the pandemic, the
TCJA helped American companies stay competitive by lowering the tax rate and
providing relief to low-income and working families.
Do you favor increasing the corporate tax rate from 21 percent?
Answer. Yes. President Biden has proposed increasing the corporate tax rate to
28 percent.
Question. President Biden has proposed raising the corporate tax rate from 21
percent to 28 percent and doubling the tax rate on GILTI from 10.5 percent to 21
percent. Moreover, the OECD is currently considering a global minimum tax rate
of 12.5 percent. An increase in the GILTI rate to 21 percent would subject U.S. com-
panies to significantly higher levels of tax than their foreign competitors, resulting
in more profitable business opportunities for foreign companies and return to the
inversion of U.S. companies or acquisition by foreign companies, resulting in a loss
of U.S. jobs and investment.
What is your view on the United States imposing a 21 percent tax on foreign
earnings of US companies, and how do you see that as being competitive if the
OECD is planning to implement a much lower global minimum tax at or around
12.5 percent?
Answer. I appreciate your concern with regard to the competitiveness of our U.S.
companies amidst a changing international tax landscape. A global minimum tax
agreed to at the OECD would, however, stop the destructive global race to the bot-
tom on corporate taxation. With a multilateral agreement in place, American compa-
nies would remain competitive even with a somewhat higher tax on their foreign
earnings. Indeed, any gap between the U.S. minimum tax rate and a globally agreed
rate would likely be smaller than the gap that exists today under the rules enacted
under the Tax Cuts and Jobs Act.
Question. Some provisions from TCJA expire in the next few years, including pro-
visions that aided working class families such as doubling the child tax credit and
increasing the limit on the alternative minimum tax which was hurting small busi-
nesses and middle class families. Other provisions which incentivize innovation by
providing a deduction for research and development expenses such as section 174,
will provide a more limited benefit after this year.
Would you favor extending these provisions? If not, what policies would you sup-
port to ensure that we do not unfairly burden working-class families and allow for
innovation as a driver of our economy?
Answer. President Biden is focused on supporting small businesses and working
families through the severe hardship caused by the pandemic. He has recently pro-
posed a comprehensive relief package that provides significant tax relief for working
families through an expanded and refundable Child Tax Credit and an enhanced
Earned Income Tax Credit. If confirmed, I would look forward to working with you
and others in Congress to advance plans to fuel innovation by investing in American
workers and American manufacturing, clean energy, critical infrastructure, and ac-
cess to broadband.
Question. As you know, the Organisation for Economic Co-operation and Develop-
ment (OECD) has been working over the past 2 years with the goal of having agree-
ment on new international tax rules by mid-2021. I’m very concerned by the prece-
dent set by some of these digital services tax proposals, especially as the proposal
widened to consider ‘‘consumer-facing businesses.’’ What we don’t want is for Amer-
ican companies across all industries to end up receiving little benefit from a multi-
lateral solution while paying significant revenue into ‘‘market countries.’’
What is your transition plan for the OECD negotiations?
Answer. If confirmed, I will ensure the Treasury Department immediately and
vigorously engages with the international tax negotiations at the OECD. I believe
these negotiations present an opportunity to establish a more stable, equitable inter-
national corporate tax system.

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Question. How will the Department engage in the OECD negotiations and how it
will prioritize this issue in relation to the multitude of domestic challenges facing
the country?
Answer. Please see the answer to the previous question.
Question. In a bipartisan way, Senators have been monitoring the progress of the
OECD process and repeatedly expressed an interest in protecting U.S. companies
and the U.S. tax base during the discussions. I urge you to continue to press the
Inclusive Framework members to treat U.S. businesses fairly in both Pillar One and
Pillar Two; this will ensure that the U.S. tax base is protected and activities and
income that should properly be taxed in the U.S. remain here.
Will you commit to keeping the members of the Senate Finance Committee up-
dated on the progress of the negotiations and to bringing any final agreement back
to the Senate to discuss with members of this committee?
Answer. If confirmed, I will certainly keep the Senate Finance Committee appro-
priately updated on the OECD/G20 negotiations. Any treaty arrangements would,
of course, require the advice and consent of the Senate.
Question. Further, will you commit to providing information to the members of
the Senate Finance Committee about the economic effects of any proposals on dif-
ferent types of U.S. businesses (manufacturing, financial services, technology, con-
sumer products, etc.)?
Answer. If confirmed, I would look forward to future conversations with the mem-
bers of the Senate Finance Committee about the economic effects of proposals by
the OECD.
Question. Treasury has taken a leading role in Paycheck Protection Program with
the SBA. However, the guidance has lagged and questions on forgiveness still linger.
How would your Treasury Department work with banks and small businesses to
ensure they have the guidance they need?
Answer. If confirmed, I am committed to working with the SBA to ensure that
small businesses and their lenders have clear guidance under the Paycheck Protec-
tion Program, especially with regard to forgiveness, so that the program can fully
reach the goals Congress has set out for it and the impacted small businesses can
benefit from this critical assistance.
Question. President Biden’s stimulus proposal would give loans and grants to
small businesses. However, I worry about the potential for this to be less than tar-
geted and to achieve certain partisan priorities. I believe it is critical that all of
these programs are structured to protect the maximum number of jobs regardless
of the political environment.
How would your Department plan to structure this program?
Answer. The relief bill late last year was just a down payment to get us through
the next few months. As the December jobs report shows, many families are still
in need. We have a long way to go before our economy fully recovers.
Small businesses are the foundation of our economy and we must do everything
possible to keep them afloat and back on track towards prosperous growth. The
President looked at the latest data, consulted with experts, and put together a pack-
age that is necessary to spur an economic recovery, and lift more than 11 million
Americans out of poverty in the process. If passed by Congress, I will, if confirmed,
work to ensure the implementation of these programs catalyzes small business
growth in a way that is both equitable and sustainable.
Question. The bipartisan relief package we passed in December will help provide
much-needed support to Americans as we continue to combat the pandemic. It is
crucial that we first see how effectively the aid from December works to serve as
a bridge until vaccines become widely available and we can get back to normal life.
However, President Biden proposed a $1.9-trillion stimulus plan prior to seeing the
impact of the $900-billion package passed in December.
How will we know when we don’t need more economic stimulus? What indicators
would you rely on?
Answer. The pandemic and resulting economic crisis have created severe pain for
families across the country. Unemployment remains troublingly high and millions
of families are facing hunger or the risk of eviction. Additional relief is needed to

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strengthen the economy, address our public health challenge, and provide relief to
communities that have been hardest-hit.
If confirmed, I will work hard to ensure that the package that passed in December
is fully and efficiently implemented so that the assistance it provides gets to those
who desperately need the help. And, I will continue to consult a range of economic
indicators to understand how workers, households and communities are faring in
the recovery. I would look forward to discussing the performance of various eco-
nomic indicators with this committee.
Question. Aside from aiding our economy as we recover from the pandemic, what
would your priorities be as Treasury Secretary?
Answer. It is the responsibility of the Treasury Secretary to strengthen the U.S.
economy, foster widespread economic prosperity, and promote an economic agenda
that leads to long-run economic growth. Meeting that challenge undoubtedly re-
quires focus on the current economy, but also requires a commitment to the building
blocks of enduring prosperity. Further, President Biden is committed to overcoming
the economic and social crises facing our country and addressing persistent chal-
lenges such as climate change and racial inequality. If confirmed, I will be firmly
committed to implementing policies designed to overcome these challenges.
Question. Recently, the U.S. dollar has weakened. Do you believe in a strong dol-
lar? If so, what can we do to increase the strength of the dollar?
Answer. As I said at my hearing, I believe in a strong and equitable U.S. economy
that delivers good jobs with rising wages for all Americans. Maintaining confidence
in the long-term strength of the U.S. economy and the stability of the U.S. financial
system is good for America as well as our trading and investing partners. I look for-
ward to working with Congress to make the U.S. economic recovery as strong as
possible.
I believe in market-determined exchange rates. The value of the U.S. dollar and
other currencies should be determined by markets. Markets adjust to reflect vari-
ations in economic performance and generally facilitate adjustments in the global
economy.
The United States does not seek a weaker currency to gain competitive advan-
tage. We should oppose attempts by other countries to do so. The intentional tar-
geting of exchange rates to gain commercial advantage is unacceptable. If confirmed,
I will work to implement the President’s promise to oppose any and all attempts
by foreign countries to artificially manipulate currency values to gain an unfair ad-
vantage in trade.
Question. As Chair of the Federal Reserve, you were a staunch defender of an
independent Central Bank. Historically, the Treasury Department and Federal Re-
serve have coordinated on certain policies. Thus, in your new role you will coordi-
nate with Chairman Powell at times.
How will you ensure the Federal Reserve maintains its independence as it works
with the Treasury Department?
Answer. The Federal Reserve has long operated as an independent institution,
and I respect and believe strongly in upholding those norms. Given my prior leader-
ship at the Federal Reserve, I understand deeply why it is so important to maintain
the tradition of the independence of the Fed in monetary policy. In areas where it
will be appropriate and necessary for coordination between the Treasury and the
Fed, I, if confirmed, will certainly take those responsibilities seriously and will be
well-positioned to work seamlessly with Chairman Powell.
Question. During our phone call, we discussed how improving retirement security
is one of my top priorities in the coming Congress. There are many things that can
be done on a bipartisan basis, which will be critical in such a narrowly divided Con-
gress. I have worked on a bipartisan bill with Senator Cardin, which has four goals:
First, the bill improves savings rates for lower-income and part-time workers.
Second, the legislation focuses on improving access to workplace plans at small
businesses.
Third, it allows older Americans who have not saved enough to save more.
Finally, this bill recognizes that many Americans live longer and ensures they do
not outlive their money.

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Can you commit to working on passing this bill in a bipartisan way in the coming
Congress?
Answer. I appreciate your commitment to the important work of improving retire-
ment security and your work with Senator Cardin on this legislation.
President Biden has proposed giving small businesses a tax break for starting a
retirement plan and giving workers the chance to save at work. In addition, under
President Biden’s plan, almost all workers without a pension or 401(k)-type plan
will have access to an ‘‘automatic 401(k),’’ which provides the opportunity to easily
save for retirement at work—putting millions of middle-class families on the path
to a secure retirement.
If confirmed, I look forward to working with you to improve Americans’ retirement
security.
Question. As you know, pensions are part of the three-legged stool of retirement
for many Americans. My bill addresses the defined contribution leg. However, many
Americans are worried about whether they will be able to receive the pensions they
earned after years of hard work. Many of these people cannot simply just start
working again. I was on the Bipartisan Joint Select Committee looking to strength-
en this system. Unfortunately, we came up short on reaching a deal—but we had
some good discussions and came up with a few good ideas.
However, good intentions and good ideas will not give the needed assurances to
thousands of my constituents whose retirement security relies on their pensions and
have received that heart-breaking notice that they may be forced to take benefit
cuts.
Can you commit to me to work with us in a bipartisan way to ensure we provide
security to those Americans?
Answer. If confirmed, I am committed to working with Congress and the Depart-
ment of Labor to find and enact a comprehensive solution to the challenges facing
multiemployer pension plans. The President also supports passage of the Butch
Lewis Act, which offers low-interest loans to financially troubled multiemployer
plans—helping them to meet their commitments.
Question. The final leg of the stool is Social Security. American workers have
faithfully paid into this system. Unfortunately, the OASI trust fund could run out
of money by 2035. If Congress were to allow this to happen and we see benefit cuts,
we would be breaking our promises to the American people. I’m actually worried
that the current pandemic may have brought that date forward.
The good news is that I believe we can work in a bipartisan fashion. I want to
commit that I am willing to work with you, the incoming administration and my
colleagues on both sides of the aisle on this critical issue.
Can you discuss both the impact of benefit cuts on the American people and any
solutions you have to avoid such a cliff ?
Answer. While the last report of the Trustees (issued in April 2020) found no ma-
terial change in the solvency of Social Security relative to the prior year, this anal-
ysis was done for the pre-COVID period. COVID has accelerated the depletion of
all major trust funds according to Congressional Budget Office projections released
in September 2020. An across-the-board benefits cut for Social Security recipients
would plunge some elder Americans into poverty and would violate the trust of
Americans who paid into Social Security for decades. Strengthening Social Security
is essential in order to ensure a secure retirement, especially for our most vulner-
able populations. President Biden has called for a Social Security reform package
that would boost benefits for vulnerable beneficiaries—including widows/widowers,
workers with low lifetime incomes, and older beneficiaries—and also provide an
across-the-board increase for all beneficiaries. The plan also improves the long-run
fiscal position of the Social Security Trust Fund. It does this by asking wealthy tax-
payers with more than $400,000 in wages to pay the same rate on their income as
other workers. On the whole, President Biden’s plan provides older Americans a
more secure retirement. If confirmed, I look forward to working with Congress to
shore up the Social Security program for decades to come without burdening middle-
class taxpayers.
Question. As you know, the Treasury Secretary is the Chair of the Financial Sta-
bility Oversight Council (FSOC), which has enormous power to declare financial in-
stitutions to be systematically important financial institutions (SIFIs). This can sub-
ject them to increased regulation. It also gives them enormous power to liquidate

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institutions that are seen as a threat to the financial stability of the country. I was
concerned during the Obama administration that many insurance companies and
asset managers were declared SIFIs despite many outside observers not viewing
them as ‘‘too big to fail.’’
Can you discuss your thinking at the time on these issues? What measurements
are you considering moving forward? As Chair of FSOC, what would your areas of
focus be?
Answer. As you know, FSOC was created in the aftermath of the Financial Crisis
to coordinate among regulators and ensure significant risks to financial stability do
not go unaddressed because they do not fall wholly into a single regulator’s purview.
I believe FSOC should address risks whatever their origin. But, our focus must re-
main on the stability in our financial system and ensuring that we are prepared to
mitigate market disruption in times of stress.
Question. The conservation easement deduction encourages taxpayers to donate
property that has conservation value, a policy goal that myself and colleagues on
both sides share. Since being made a permanent part of the tax code in 1980, the
deduction has been a cornerstone in the fight to expand conservation for a cleaner,
healthier environment. Unfortunately, the Internal Revenue Service is increasingly
challenging taxpayers’ deductions on what can best be described as technical draft-
ing issues related to conservation easement deeds when the underlying issue seems
to be a perceived over-valuation of the easement. Groups as diverse as the National
Taxpayer Advocate, the Land Trust Alliance, the American Bar Association (ABA),
and the National Taxpayer’s Union have called on the IRS to publish safe harbor
guidance so that potential donors can have certainty that their easement deeds
won’t wind up subject to litigation. It seems patently unfair that landowners are los-
ing at audit and in the Tax Court on technical drafting issues when requests for
guidance from IRS on these very same clauses has gone unanswered for over a dec-
ade.
In fact, just last week the National Taxpayer Advocate in her 2020 Annual Report
to Congress again recommended that the IRS ‘‘[d]evelop and publish additional
guidance that contains sample easement provisions to assist taxpayers in drafting
deeds that satisfy the statutory requirements for qualified conservation contribu-
tions, particularly the perpetuity requirement for those conservation easements that
incentivize land preservation for future generations.’’
Will you commit to working with the IRS to publish sample deed language so that
taxpayers can have certainty when making donations, helping to further this impor-
tant policy goal? Once we have this guidance, I think it is important that we provide
an opportunity for taxpayers to come into compliance with the new rules.
Answer. Taxpayer certainty with regard to tax treatment in all issues is an impor-
tant goal for the system at large. If confirmed, I will strive to meet that goal
through the issuance of taxpayer guidance, and I appreciate the importance of cre-
ating certainty for taxpayers on this issue.
Question. The pandemic has caused construction shutdowns, shortages of labor
and materials, supply chain disruptions, financial uncertainty, shifting lending and
transactional requirements, and indefinite delays on land transactions and project
entitlements—all major obstacles for housing development and rehabilitation
projects underway nationwide.
What new mechanisms and Federal incentives do you envision once we get past
the pandemic to address the deepening of America’s housing affordability crisis?
Answer. I believe it is critically important that we have a housing system that
serves all Americans, and while the pandemic undoubtedly created challenges in the
production of affordable housing, shortages of affordable housing predate the pan-
demic. I am committed to a Treasury Department that is focused on rebuilding our
economy equitably. If confirmed, I would look forward to working with you and oth-
ers in Congress to identify the correct (new or existing) solutions and incentives to
address these important issues.
Question. According to the Census Household Pulse Survey, 19 percent of renters
are currently unable to pay rent and, if that number remains steady, rent owed
could amount to an additional $87.4 billion by the end of September 2021. I helped
lead the creation of the first ever emergency rental assistance program through
Treasury’s Coronavirus Relief Fund in the coronavirus relief legislation enacted
along with the omnibus at the end of last Congress. Emergency rental assistance

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is one of the most effective and sustainable ways to help tenants and housing pro-
viders get through this difficult time.
Do you support additional funding for of emergency rental assistance through the
Coronavirus Relief Fund, if necessary? And what other policies do you foresee imple-
menting to sustain our Nation’s housing stability?
Answer. I am grateful to you for your leadership in developing effective and time-
ly programs to support families who rent their homes and apartments, as well as
housing providers, get through this difficult time. The relief that Congress provided
is critical to supporting Americans in need. If confirmed, I would look forward to
working with you and others in Congress to ensure that sufficient support is pro-
vided to help struggling families.
Question. Any major investment in the Nation’s infrastructure should recognize
the important relationship between America’s growing demand for rental housing
and the industry’s ability to meet it. In 2016 at the end of the Obama/Biden admin-
istration, a tool-kit was released aimed at modernizing housing development regula-
tions and removing local barriers. The tool-kit stressed the role that zoning, land
use regulations and lengthy development approval processes have played as part of
our housing affordability crisis.
What steps will this administration take as part of the infrastructure package to
incentivize States and localities to remove these barriers and regulation that dis-
courage development and renovation?
Answer. You raise important questions about the relationship between rental
housing development and regulations at the Federal, State, and local levels. Rental
housing is a critically important part of assuring housing affordability. If confirmed,
I would look forward to working on ways to partner with you on these critical
issues.
Question. In my role on the Senate Homeland Security and Governmental Affairs
Committee (HSGAC) this Congress, I will be focused on the oversight jurisdiction
over government-wide affairs, particularly Federal Government-wide cybersecurity.
The Treasury Department was one of the agencies impacted in the recent Solar-
Winds cyber-attack. HSGAC will be focused on learning more about the attack and
how to improve our preparedness with these attacks.
If confirmed, will you commit to working with Congress to provide timely and
thorough information about the attack?
Answer. The recent SolarWinds cyberattack that impacted a number of agencies
across the Federal Government is an issue of grave concern. If confirmed, I look for-
ward to working with Congress as we learn more about the attack and how to im-
prove our preparedness.
Question. As you are aware, I have a very strong interest in Ukraine and, as the
co-chair of the Ukraine Caucus, have worked in a bi-partisan manner to support
Ukraine with militarily, and economic assistance as well as pressuring them to con-
tinue on much needed anti-corruption reform. Ukraine faces grave threats from Rus-
sia and since the Russian invasion on Crimea in 2014 and their blatant support of
pro-separatist forces in the Donbas have suffered greatly. Our sanctions program
has been very effecting in making the Russians pay a heavy economic price for their
actions.
Many of our sanctions are by executive orders. Can you make a commitment that
you will encourage the President to keep these sanctions in effect and work with
the Congress to strengthen these and other sanctions against our adversaries?
Answer. I understand your strong interest in this important matter. If confirmed,
I will work closely with the White House and counterparts at other agencies across
the administration on U.S. policy toward Russia. I commit to rigorously enforcing
sanctions targeting Russian actors for territorial aggression in eastern Ukraine and
Crimea and other threats to U.S. national security.
Question. Recent reports indicate that the Iranian regime and its military wing—
the Iranian Revolutionary Guard Corps (IRGC)—may be siphoning money away
from the NIMA system (FOREX Management Integrated System) in an effort to
fund terror outside of Iran’s boarders. This informal system was designed to give
Iranian exporters access to a foreign exchange market so that they could convert
their foreign earnings into rials. However, there are allegations that the IRGC has
established a web of front companies which exploit this system to gain currency
which is then given to IRGC affiliated groups throughout the region.

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What steps will you take as Treasury Secretary to ensure that the IRGC is not
able to exploit loopholes in the international banking system, and in more informal
networks such as NIMA, to fund terror outside its borders?
Answer. If confirmed, I will ensure that the Treasury Department is closely fo-
cused on any Iranian efforts to evade sanctions and abuse the international banking
system. Iran’s support for terrorism is a very serious concern that, if confirmed, I
will direct the dedicated Treasury staff to closely monitor and seek to disrupt with
all available tools.
Question. Following the Obama administration’s adoption of the Joint Comprehen-
sive Plan of Action (JCPOA) with Iran, the Treasury Department granted Iran a
specific license to access the U.S. financial system.
Should the Biden administration re-engage in negotiations with Iran regarding
nuclear capabilities, would you also consider granting Iran a specific or general li-
cense to access theU.S. financial system?
Answer. The Biden-Harris administration is committed to ensuring that Iran
takes the appropriate steps to resume compliance with its nuclear commitments. We
will carefully review what sanctions relief would be appropriate if Iran complies,
and Iran will only enjoy sanctions relief under the JCPOA if it complies with its
nuclear constraints.
Question. Following the grant of the specific license to Iran, Treasury officials
were asked by members of Congress if Iran was given access to the U.S. financial
system as part of the JCPOA. Those Treasury officials, under oath, stated that Iran
had not been given such access.
Do you pledge to provide truthful information regarding the granting of any spe-
cific or general license in response to congressional inquiries?
Answer. Yes, I will commit to provide truthful information regarding Iran sanc-
tions and licensing in my communications with Congress.

FOLLOW-UP QUESTIONS SUBMITTED BY HON. ROB PORTMAN
Question. President Biden has proposed raising the corporate tax rate from 21
percent to 28 percent and doubling the tax rate on GILTI from 10.5 percent to 21
percent. Moreover, the OECD is currently considering a global minimum tax rate
of 12.5 percent. An increase in the GILTI rate to 21 percent would subject U.S. com-
panies to significantly higher levels of tax than their foreign competitors, resulting
in more profitable business opportunities for foreign companies and return to the
inversion of U.S. companies or acquisition by foreign companies, resulting in a loss
of U.S. jobs and investment.
What is your view on the United States imposing a 21 percent tax on foreign
earnings of U.S. companies, and how do you see that as being competitive if the
OECD is planning to implement a much lower global minimum tax at or around
12.5 percent?
If the OECD agrees on a global minimum tax rate at or around 12.5 percent,
would you propose increasing the rate on foreign earnings from its current rate of
10.5 percent? Additionally, please explain your response that any gap between the
U.S. minimum tax rate and a globally agreed rate would likely be smaller than the
gap that exists today. The rate currently being considered at the OECD is at or
around 12.5 percent and the current GILTI rate is 10.5 percent, a difference of 2
percent. If the GILTI rate is increased to 21 percent, there would likely be a much
larger gap between the GILTI rate and the OECD rate (assuming the rate is at or
around 12.5 percent).
Answer. I appreciate your concern regarding the competitiveness of U.S. compa-
nies amidst a changing international tax landscape. As you note, President Biden
has proposed substantially reforming GILTI as part of his plan to ensure a fair and
progressive tax code where wealthy individuals and corporations pay their fair
share. The U.S. has strong and unique attractions as a residence for multinational
corporations, and, as a result, U.S. companies would remain competitive even if they
faced a somewhat higher 21-percent rate of tax on their foreign earnings irrespec-
tive of the outcome of the OECD negotiations. This is even more true if a global
minimum tax were agreed to at the OECD. Such a global minimum tax could stop
the destructive global race to the bottom on corporate taxation and help discourage
harmful profit-shifting.

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Regarding the current gap, I was referring to the gap between the GILTI rate and
the minimum tax rate on the foreign earnings of foreign-resident multinationals
under current law. Today, most other headquarters’ jurisdictions impose no tax on
the foreign earnings of their domestically-headquartered multinationals.
Question. Following the Obama administration’s adoption of the Joint Comprehen-
sive Plan of Action (JCPOA) with Iran, the Treasury Department granted Iran a
specific license to access the U.S. financial system.
Should the Biden administration re-engage in negotiations with Iran regarding
nuclear capabilities, would you also consider granting Iran a specific or general li-
cense to access the U.S. financial system?
Answer. The Biden-Harris administration is committed to ensuring that Iran
takes the appropriate steps to resume compliance with its nuclear commitments. We
will carefully review what sanctions relief would be appropriate, if Iran complies—
and Iran will only enjoy sanctions relief under the JCPOA if it complies with its
nuclear constraints. As circumstances unfold and these reviews are conducted, I will
commit to following up with congressional offices with more specificity.
Question. Should the Biden administration re-engage in negotiations with Iran re-
garding nuclear capabilities, would you consider granting Iran a specific or general
license to access the U.S. financial system? Please state either yes or no.
Answer. Yes, if the Biden-Harris administration reenters the Iran nuclear deal,
we would consider what sanctions relief would be appropriate. However, Iran will
only enjoy sanctions relief under the JCPOA if it complies with its nuclear con-
straints. I fully appreciate the need to communicate with Congress on our Iran sanc-
tions, and will plan to do that, if confirmed.

QUESTIONS SUBMITTED BY HON. PATRICK J. TOOMEY
TAX POLICY

Question. President Biden has proposed several changes to the way U.S. corpora-
tions are taxed, including amending provisions of the 2017 Tax Cuts and Jobs Act
(Pub. L. 115–97). Among those changes President Biden has called for are signifi-
cant modifications to the tax levied on ‘‘global intangible low-tax income’’ (GILTI).
Under current law, this category of income is subject to a minimum tax of between
10.5 and 13.125 percent annually. As such, the United States is the only advanced
economy that imposes a foreign minimum tax on the active foreign-source income
of domestically headquartered multinational companies. The GILTI tax, in addition
to other anti-base erosion provisions in the 2017 tax reform, was specifically de-
signed to discourage profit shifting, and, along with the corporate income tax rate
deduction, encourage U.S. companies to invest more in the U.S. rather than
offshoring profitable economic activity.
Specifically, President Biden’s proposal would assess GILTI on a country-by-
country basis as opposed to the current aggregate approach; eliminate GILTI’s ex-
emption for deemed returns under 10 percent of ‘‘qualified business asset income’’
(QBAI); and double the tax rate assessed on GILTI. On the whole, these changes
would make U.S. multinationals less competitive than they are today with a larger
tax liability and a greater likelihood of inverting.
If the proposed legislative changes to GILTI are adopted along with an increase
in the corporate rate, do you acknowledge U.S. multinationals would face higher ef-
fective tax rates and thus become less competitive than they are today?
Would a higher tax burden on U.S.-based multinationals make it less likely that
a newly formed, or existing, U.S. multinational company would locate its head-
quarters in the United States?
Answer. During the presidential campaign, the President proposed raising the
corporate tax rate to 28 percent—which is the midpoint of the pre-2017 level and
the rate imposed after the tax act. At 28 percent, the corporate tax rate would be
substantially below the level that had been in place for decades.
The Biden agenda would couple this tax change with massive investment that
would benefit American businesses of all stripes and improve our international com-
petitiveness. This includes a sweeping plan to bolster America’s infrastructure,
ranging from surface transportation to broadband to airports and waterways. The
plan would allow billions of dollars to worker training and college education, in ad-

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dition to apprenticeship programs—all of which would raise the productivity of
American workers. The Biden plan allocates hundreds of billions in research funds
for renewable energy and other economic priorities, which ultimately make us more
competitive on the world stage. Finally, President Biden has advanced a plan to
quickly distribute vaccines to households while also providing a lifeline for the
American economy. These critical actions will help businesses across the country,
including those that are subject to the higher 28-percent corporate tax rate.
Finally, if confirmed I commit to vigorously engage in the OECD/G20 negotiations
to reform the international tax system. A global minimum tax agreed to at the
OECD would stop the destructive global race to the bottom on corporate taxation.
Indeed, any gap between the US minimum tax rate and a globally agreed rate
would likely be smaller than the gap that exists today under the rules enacted
under the Tax Cuts and Jobs Act.
Congress relied on the Treasury Department to fully implement the Tax Cuts and
Jobs Act consistent with congressional intent. Over the last 3 years, Treasury has
issued various regulations to carry out this responsibility. Taxpayers have made
plans and investment decisions in accordance with the law and accompanying regu-
lations. It is important that taxpayers be able to rely on the established law and
regulatory implementation.
Question. Do you intend to use Treasury’s regulatory authority to alter or repeal
regulations pertaining to implementation of the Tax Cuts and Jobs Act?
If so, will you and other Treasury officials consult with Congress in a bipartisan
manner prior to exercising rulemaking authority?
Answer. I will work to ensure the country’s tax laws are implemented and en-
forced fairly. Any review of regulation will seek to ensure they are consistent with
the law. Going forward, the Treasury Department will work in coordination with
Congress on important issues such as these.
Currently, the OECD is in the midst of multilateral negotiations on tax challenges
arising from digitalization. Negotiations thus far have centered upon two ‘‘pillars,’’
one focusing on allocation of taxing rights and the other on a global anti-base ero-
sion proposal.
The Trump administration was at first extensively involved in the negotiations,
and expressed support for reforming the international tax system in order to provide
for greater tax certainty and so that countries will drop their digital services taxes.
However, negotiations were put on pause in 2020.
Question. As Treasury Secretary, will you commit to re-engaging in multilateral
negotiations through the OECD process to address issues of tax challenges through
digitalization?
Answer. If confirmed, I will commit to vigorously engaging in a cooperative multi-
lateral effort to address base erosion and profit shifting through the OECD/G20
process, and to working to address the tax challenges raised by the digitalization
of the economy in that context.
Question. Will you commit to closely examining the economic effects of any pro-
posals on diverse sectors of the U.S. economy, and to supporting policies that pro-
mote long-term growth, as well as a transition period during which the new rules
are implemented?
Answer. I appreciate your concern regarding the economic effects of any agree-
ments reached in the OECD negotiations. If confirmed, I commit to examining the
economic effects of any OECD proposals, and to supporting policies that promote eq-
uitable growth.
Question. Will you commit to keeping the Senate and the members of the Senate
Finance Committee updated on the progress of the negotiations, and to bringing any
final agreement back to the Senate to discuss with members of this committee?
Answer. If confirmed, I will commit to keeping the Senate and the members of
the Senate Finance Committee appropriately updated on the OECD/G20 negotia-
tions. Further, any treaty arrangements would of course require the advice and con-
sent of the Senate and I commit to satisfying any such requirements.
Instead of waiting for agreement at the OECD level, a number of countries have
chosen to unilaterally implement their own digital services taxes (DSTs). As of Jan-
uary 15, 2021, over a dozen countries have already imposed DSTs, with many more

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countries having either published proposals or announced an intention to publish
a proposal to enact a DST.
The details of these DST proposals vary by country, but the policy frequently dis-
criminates against non-resident businesses and imposes double taxation. Addition-
ally, the DSTs of certain countries appear to be designed to specifically target
United States digital companies.
In retaliation for these DSTs, the Trump administration has initiated investiga-
tions under section 301 of the Trade Act of 1974, into DSTs that have been adopted
or are being considered by a number of U.S. trading partners. In several of these
investigations, the United States Trade Representative has authorized the use of
tariffs as a response.
Question. Do you agree that a multilateral solution to digital taxation is a better
approach than relying upon retaliatory tariffs?
Answer. I am aware of the concerns U.S. companies have raised about digital
services taxes. I agree that retaliatory tariffs also impose costs of their own on
American households. I am committed to a cooperative multilateral effort to address
base erosion and profit shifting through the OECD/G20 process, and will commit to
work to resolve the digital taxation dispute in that context.
Several Democrats in Congress have endorsed a financial transactions tax (FTT).
One such proposal would levy a 0.5-percent tax on stock trades and a 0.1-percent
tax on bond trades. A FTT would significantly damage capital markets by raising
transaction costs, decreasing trading volumes, and reducing liquidity. Over half of
American households are invested in equity and fixed-income securities—either di-
rectly or indirectly—so this proposal would be destructive for American investors.
President Biden has not included a FTT in his official tax policy platform.
Question. Do you believe that a FTT would reduce liquidity in capital markets?
Would it raise costs and lower returns for the majority of Americans who are inves-
tors?
Answer. You raise an important question about financial transaction taxes (FTT).
As you may know, President Biden has not put forward a financial transaction tax
proposal. FTTs vary widely in their design, and have different impacts on markets.
I have not yet had an opportunity to study particular FTT designs and evaluate
their impacts.
FINANCIAL STABILITY OVERSIGHT COUNCIL

Question. I am concerned about the Financial Stability Oversight Council’s
(FSOC) designations of Systemically Important Financial Institutions (SIFIs). A
SIFI designation is troubling in part because it creates moral hazard: it formalizes
an institution’s ‘‘too big to fail’’ status and creates the expectation that the tax-
payers will bail out a SIFI that falls into financial distress.
Also troubling is FSOC’s history of exercising its SIFI designation powers. Under
the Obama administration, FSOC made overreaching SIFI designations of non-
banks in a manner completely lacking transparency, and without providing a clear
path for de-designation. Perhaps the best-known example of this was FSOC’s des-
ignation of MetLife. A D.C. District Court judge overturned the designation, holding
that FSOC had acted arbitrarily and capriciously by ignoring its own guidance on
designation and failing to do a cost-benefit analysis, the bedrock of reasoned regu-
latory decision-making in our system.
Since then, in 2019, FSOC issued a policy that made several improvements to the
non-bank designation process. These included emphasizing that designation is a last
resort, requiring cost-benefit analysis and an assessment not only of the impact of
a risk but also the likelihood that it will be realized, as well as creating both pre-
designation and post-designation ‘‘off-ramps’’ to help firms and regulators avoid or
reverse SIFI designation by mitigating systemic risks.
Congress still needs to reform Dodd-Frank to prevent FSOC from reverting to its
troubling prior patterns of engaging in over-designation and arbitrary processes. In
the meantime, I hope that as the FSOC Chair, you will exercise restraint in making
any SIFI designations, and commit to a transparent and fair process.
Will you commit that, if confirmed, you will ensure FSOC continues to treat SIFI
designation as a last resort; maintains a clear process for SIFI designation; conducts
cost-benefit analysis for all designations; and provides institutions with the oppor-

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tunity to avoid designation and, if designated, a clear path to reverse such designa-
tion?
Answer. You have raised a series of important questions regarding the Financial
Stability Oversight Council. I will respond to the series of questions in one set of
responses.
The Financial Crisis exposed enormous weaknesses in our financial system, and
in our system of financial oversight. The crisis crushed the U.S. economy and caused
enormous devastation to businesses and families. Taxpayers were exposed to signifi-
cant risks. The weaknesses in our financial system led to an extremely slow recov-
ery that hurt millions of Americans. In response, Congress enacted the Dodd-Frank
Act to reform financial regulation, including regulation of the non-bank financial
sector that had caused so much harm to the American economy. One important as-
pect of the Financial Crisis was that non-bank firms such as AIG and Lehman
Brothers were not subject to meaningful and effective prudential supervision at the
Federal level.
Congress established the Financial Stability Oversight Council to bring together
the financial regulatory community to identify and respond to emerging threats to
financial stability, and to promote market discipline. The Council is tasked with
identifying ‘‘risks to US financial stability that could arise’’ and ‘‘respond to emerg-
ing threats to the United States financial system.’’ To help achieve this, the SIFI
designation authority is statutorily provided in order for FSOC to address risks that
non-bank financial companies may pose to U.S. financial stability in the event of
their material financial distress or failure. FSOC should have the tools to protect
our economy from systemic threats, whether they’re presented by a single firm or
actions by an array of firms.
I agree that designation should not be undertaken lightly, that there should be
a clear process for designation, and that designation was never meant to be a one-
way street. Procedures should require an annual review, and firms, if designated,
should be regularly evaluated and are certainly able to adjust their business models
to be less risky in an effort to be de-designated. As you may know, I disagreed with
the procedural changes put in place by the prior administration because I think they
did not show fealty to the statute Congress enacted and risked re-exposing tax-
payers, households, businesses, and our economy to the failure of non-bank firms.
Question. In a virtual event hosted by the Brookings Institution in June 2020, you
proposed to expand FSOC’s power to regulate directly the activities of non-bank fi-
nancial institutions. You said, in part: ‘‘I personally think we need a new Dodd-
Frank. . . . We need to change the structure of FSOC and build up its powers to
be able to deal more effectively with all of the problems that exist in the shadow
banking sector. I think the structure is inherently flawed. I think the agencies need
a definite financial stability mandate.’’
Expanding FSOC’s role to allow it to directly regulate financial stability, instead
of coordinating the activities of regulators, would also entrust regulation of specific
markets to a body made up of the heads of agencies with highly specific regulatory
specialties and expertise in distinct and disparate regulated markets. This means
that FSOC has members, who lack expertise in particular types of activities or regu-
lated entities, but would be responsible for devising and implementing a compulsory
regulatory regime to govern these same businesses.
Additionally, FSOC represents a highly politicized viewpoint. Its members are the
political heads of all of the financial regulators. Despite purporting to represent sev-
eral multi-member commissions with commissioners from both political parties,
FSOC’s members are the heads (i.e., chairs) of those commissions. They are not obli-
gated to submit their FSOC activities to a vote by their commissions, and can act
unilaterally. And, FSOC is significantly less transparent and accessible than the un-
derlying agencies.
Question. What do you consider to be ‘‘shadow banking’’ organizations?
Answer. One way that is commonly used to describe non-bank firms that engage
in activities similar to banks is to describe them as ‘‘shadow banking’’ organizations.
The term is meant to encapsulate a range of activities that may pose systemic risk
to the financial system.
Question. As a practical matter, the financial regulators have extraordinary pow-
ers over the institutions they regulate. What additional regulatory powers are you
suggesting FSOC should receive?

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If FSOC or any of its component regulators were to identify a new problem in the
regulatory system that they lacked the authority to address, wouldn’t the appro-
priate response be to come to Congress and recommend that the duly elected rep-
resentatives of the people enact legislation to address the problem rather than in-
creasing the already vast powers of the financial regulators?
Answer. With respect to the important questions you raise, I would suggest that
while the independent financial regulatory agencies and FSOC have significant au-
thorities, it is difficult to regulate systemically risky activities that cut across mar-
kets. If I am privileged to be confirmed as Treasury Secretary, I would look forward
to working with the members of FSOC and the Congress to explore these questions
further.
I am concerned about recent proposals to advance a liberal environmental policy
agenda through the regulation of banks and other financial institutions. Particularly
troubling are calls to implement climate stress tests on banks. Financial regulators
lack the expertise to make environmental policy.
More importantly, generating environmental regulation is not the mission of fi-
nancial regulators. Rather than regulating the safety and soundness of a financial
institution, climate stress tests and other climate policies in the banking space are
designed to prevent those institutions from holding certain assets as a form of indi-
rect punishment against disfavored industries such as oil and gas. Moreover, the cli-
mate stress tests are not a function of climate change itself impacting the firm’s as-
sets, but rather the risk that government—specifically unelected bureaucrats—will
implement policies to ban or restrict them. Thus, climate change regulation is a self-
fulfilling prophecy for the government: your oil and gas assets are unprofitable be-
cause we have decided to make them so.
Moreover, as the last year has demonstrated, banks are in a resilient position
even when facing a severe unexpected financial downturn. As Federal Reserve Gov-
ernor Randy Quarles noted in November 2020: ‘‘Liquidity and capital remain high
and, indeed, have increased at our largest banks over the course of the COVID
event. Firms have sharply increased their reserves, setting aside resources today
against losses they may incur tomorrow. Banks are well positioned to serve as a bul-
wark against broader financial and economic stress.’’ Adding an additional stress
testing regime to the existing one would impose significant economic costs, but is
not likely to result in a material additional benefit to stability.
Question. Will you commit not to use the Treasury Department to advance envi-
ronmental policy through financial regulation?
Will you commit not to use FSOC to urge other agencies to advance environ-
mental policy through financial regulation?
Answer. In the questions above, you raise important questions about the connec-
tion between environmental policy and financial regulation. I agree with Federal Re-
serve Chairman Jerome Powell that it is important for financial regulators to assess
all the risks facing the financial system, including risks from climate change. If I
am privileged to serve as Treasury Secretary, I would look forward to working with
the members of FSOC and the Congress to explore these questions further.
CAPITAL MARKETS

Question. Despite the efforts of the Securities and Exchange Commission (SEC)
over the past 4 years, it still appears to be too costly for a company to go and stay
public. Going public used to be a capital-raising event but it is now all too often
a liquidity event for early investors like venture capital funds and a company’s
founders. The 1990s saw an average of around 550 IPOs annually. During the last
decade, the number of IPOs were almost one-third that figure, at around 200 annu-
ally. Similarly, during the 1990s there was an annual average of about 7,200 total
public companies. Now, there are 40 percent fewer public companies, with an an-
nual average of around 4,300 public companies. Although there was an increase in
IPOs in 2020, a number of these IPOs were non-traditional special purpose acquisi-
tion companies (SPACs). Thus, 2020 may represent an aberration from the long-
term decline of IPOs. Do you agree that part of the IPO decline can be addressed
by lowering the costs of going and staying public?
Answer. You raise important questions about the structure of our capital markets
and the vitality of the American economy. The causes and consequences of changes
in the composition of capital markets and American businesses are complex. If I
have the privilege of being confirmed as Treasury Secretary, I would look forward

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to studying these issues further and to working with the Congress on these impor-
tant matters.
Question. In October 2017, the Treasury Department released a report and rec-
ommendations on improving the capital markets. Which recommendations in the re-
port do you agree with?
Answer. The United States has the deepest and most liquid capital markets in
the global economy. The President is committed to maintaining a sound economy
and confidence in our financial system. If confirmed, I look forward to studying the
findings of the 2017 report to see how Treasury can build even further on our al-
ready-strong capital markets while ensuring strong investor protections.
Question. Going public may not be appropriate for all businesses, such as a small
family-run business. Private markets play an important role in capital formation
and job creation. Two years ago, new companies accounted for more than 25 percent
of all employment gains. According to the SEC, in 2019, registered offerings ac-
counted for $1.2 trillion (30.8 percent) of new capital raised, while exempt offerings
accounted for approximately $2.7 trillion (69.2 percent) of new capital raised. Do you
agree that private markets are important to the economic growth of the United
States?
Answer. I agree with you that both public and private markets are important to
the economic growth of the United States. If I am privileged to be confirmed as
Treasury Secretary, I would look forward to working with you on these issues.
Question. A small business in need of $500,000 often cannot raise that amount
of funds from friends and family. However, $500,000 is often too small of an amount
for a bank to make a loan or a venture capital firm to make an investment in a
small business. How would you encourage further capital formation to fill this need?
Answer. I agree with you that small businesses often have critical capital needs
that are not being met. Small businesses are the bedrock of the American economy
and of our communities. Oftentimes, small businesses struggle to get access to bank
loans, and venture capital investments are even harder to obtain, especially for
businesses not located in a handful of large cities with significant venture capital
presence. These means that many small businesses all across the country that
would otherwise be successful founder through no fault of their own. Congress took
an important step in the Omnibus legislation by providing additional small business
relief and creating a new initiative at Treasury to support Community Development
Financial Institutions that serve small businesses and other borrowers in economi-
cally distressed communities. If I am fortunate enough to be confirmed as Treasury
Secretary, I would be honored to work with you and other members of Congress to
expand access to capital for small businesses throughout the United States.
Question. Entrepreneurs, including minority and female entrepreneurs, need cap-
ital to transform their ideas into new businesses that will create jobs. Would minor-
ity and female entrepreneurs benefit from more opportunities to raise capital in the
private markets?
Answer. I agree with you that entrepreneurs, including minority and female en-
trepreneurs, need better access to capital to launch and grow their businesses and
to create jobs. There are a wide variety of potential ways to improve access to cap-
ital for entrepreneurs, and if confirmed as Treasury Secretary, I would look forward
to working with Congress on strategies to expand access to capital for entre-
preneurs.
Question. Retail investors could benefit from increased diversification of their in-
vestment portfolios and potentially higher investment returns if they had increased
access to private investments, such as venture capital and private equity. Defined
benefit plans frequently invest a portion of their assets in private investments. A
2018 study by the Center for Retirement Research indicates that a defined benefit
plan may hold, on average, 19 percent of its assets in private investments. However,
most Americans do not have a defined benefit plan and currently there is very little
or no exposure to private investments in target date funds offered by employers’
401(k) plans. Do you support providing employees at least a limited exposure to pri-
vate investments through diversified funds with long investment horizons, such as
target date funds designed for workers with a retirement date more than 20 years
in the future?
Answer. I agree that diversification in investments is a desirable outcome in prin-
ciple, but there are many possible options for achieving that outcome. I look forward
to studying this issue further, as building wealth for the middle-class, closing racial

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wealth gaps, and protecting the retirement safety of American workers are top im-
peratives for this administration.
DATA COLLECTION AND SECURITY

Question. In your role as Treasury Secretary, will you explore how to modernize
data collection and data standards for Federal agencies, particularly to enhance
data security and consistency and coordination between such agencies?
Answer. If confirmed as Treasury Secretary, in my role as chair of FSOC, I will
work with the financial regulatory community and the Office of Financial Research
to review existing data capture standards and practices. The goal will be to ensure
that the Federal Government is able to make the most informed and transparent
policy decisions possible, informed by secured processes and consistent metrics.
NATIONAL SECURITY

Question. The Office of Foreign Asset Control (OFAC) within the Treasury Depart-
ment administers economic and trade sanctions based on U.S. foreign policy and na-
tional security goals.
Will you commit to have OFAC work with my staff to identify the ways in which
current sanctions laws on North Korea and China, including the BRINK Act (Pub.
L. No. 116–92) and the Hong Kong Autonomy Act (Pub. L. No. 116–149), can be
more rigorously implemented?
Answer. Yes, I can commit to having OFAC personnel discuss with your staff the
current sanctions on North Korea and China, including whether the current sanc-
tions are effective and whether such sanctions should be strengthened and, if so,
how to do so.
Question. Do you agree that Iran is the world’s largest state sponsor of terrorism?
Answer. Yes. I do agree with that statement.
Question. Unless an Iranian government entity designated by OFAC as a Spe-
cially Designated Global Terrorist (SDGT) has permanently and verifiably ceased its
support for terrorism, do you agree that lifting, rescinding, or significantly weak-
ening such a designation would result in the Iranian government’s enhanced capac-
ity to support, finance, or commit acts of terrorism?
Answer. The Biden-Harris administration has made a commitment, as part of an
overall review of the United States’ posture toward Iran, to review current U.S.
sanctions on Iran. I believe such a review should take into account how the lifting
or lessening of such sanctions might impact Iran’s ability to support terrorism and
how to counter such support as effectively as possible.
Question. Will you commit to have OFAC provide regular and reoccurring staff-
level briefings on the Iran sanctions program to the Senate Banking Committee
while you are Treasury Secretary?
Answer. Yes, I will commit to working with the Senate Banking Committee to en-
sure that adequate briefings are provided on the Iran sanctions program.
Question. A primary goal of the Financial Crimes Enforcement Network (FinCEN)
within the Treasury Department is to safeguard the financial system from illicit use
and combat money laundering-related crimes, including terrorism. In 2011, under
President Barack Obama, FinCEN found Iran was a jurisdiction of ‘‘primary money
laundering concern’’ under section 311 of the PATRIOT Act. In 2019, under Presi-
dent Donald Trump, FinCEN finalized its finding that Iran was a jurisdiction of pri-
mary money laundering concern and took special measures to ensure that the Ira-
nian financial system remained closed off from the United States.
Do you agree with the determinations made by FinCEN during the Obama and
Trump administrations that Iran is a jurisdiction of primary money laundering con-
cern?
Answer. Yes, I believe Iran is a jurisdiction of primary money laundering concern.
Question. Will you keep in place the Treasury Department’s section 311 special
measures on Iran as long the country continues to finance terrorism and fails to
clean up its financial system?
Answer. I believe we should keep in place various rigorous restrictions on Iran
targeting its malign support for terrorism until such time as this ceases. I also be-
lieve that we should closely examine all such measures in the policy review the

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Biden-Harris administration will be conducting regarding the United States’ overall
posture toward Iran.
Question. The FY21 NDAA (Pub. L. No. 116–283) instructs the Director of
FinCEN to ‘‘reach out to members of the small business community’’ when promul-
gating the regulations needed to carry out title LXIV of the law, which establishes
new beneficial ownership reporting requirements. How will the Treasury Depart-
ment implement this directive and how will it ensure that its regulatory process ad-
heres to the Regulatory Flexibility Act (5 U.S.C. § 601 et seq.)?
Answer. I agree strongly on the need for Federal banking agencies, including but
not limited to FinCEN, to consult with the small business community when promul-
gating regulations, including on the promulgation of rules and guidance to imple-
ment the beneficial ownership reporting requirements. If confirmed, I will ensure
this consultation occurs.
Question. The United States dollar serves as the world’s premier reserve currency.
What level of U.S. public debt is a threat to the dollar’s status as the world’s reserve
currency?
Answer. There are important reasons that the U.S. dollar is the world’s dominant
reserve currency. The United States has the largest economy, and the deepest and
most liquid capital markets. We are committed to maintaining a sound economy and
confidence in our financial system. Indeed, the Biden-Harris administration will
make investments in the American people that will accelerate the U.S. economic re-
covery and lay the foundation for a strong and equitable U.S. economy in the years
ahead. The world can be certain that the United States will not seek a weaker cur-
rency to gain competitive advantage.

QUESTIONS SUBMITTED BY HON. TIM SCOTT
Question. As I noted at your nomination hearing on Tuesday, we recently passed
into law a historic, bipartisan $900-billion package to address the ongoing COVID–
19 pandemic through additional targeted relief. This package provided more than
$80 billion for schools to reopen safely, supported greater investment into rural
broadband, sent more than $280 billion to restart the PPP for a second round, and
even provided a second round of direct relief checks to Americans.
Yet here we are again, less than a month later, preparing to see another $1.9 tril-
lion dollar package rammed through by way of President Biden’s American Rescue
Plan. The American Rescue Plan includes a third round of stimulus checks to the
tune of $1,400-per-person, raises the Federal minimum wage to $15 an hour, and
includes $400 per week enhanced unemployment benefits. With $4 trillion added to
the debt last year alone, our national debt is now at its highest level relative to our
economy since the end of World War II. At some point, we will start paying a price
for this.
In your opinion, at what point should we start taking serious action to rein in
the debt?
Should the mounting debt influence the size of additional COVID relief packages,
and, in your view, when and how will we know that enough stimulus spending has
been achieved?
Answer. As I said at my hearing, I agree that it is essential that we put the Fed-
eral budget on a sustainable path. But, I believe the most important thing we can
do to achieve that goal is to defeat the pandemic, provide relief to the American peo-
ple and make critical investments that will help the economy grow. To avoid doing
that would run the risk of causing greater long-term fiscal damage. So, I agree that
the long-term fiscal trajectory is a cause for continuous focus and attention, but I
believe addressing that issue over the long term requires first taking sufficient and
appropriate action to take on the pandemic and address the current economic crisis.
Question. As we know, the American Rescue Plan also includes $400 per week in
enhanced unemployment benefits. However, this $1.9 trillion package seemingly
skips over the opportunity to pair this with incentives for workers to build skills
during this time. Such incentives allow workers to combat skill atrophy and re-enter
the workplace from a more competitive place. The Skills Renewal Act, which I joined
Senators Sasse and Klobuchar in introducing last year, would resolve this issue by
creating a new, targeted credit for skills building.

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Are you supportive of incentives to drive skills building and economic mobility,
and do you believe concepts like this should be included in future COVID relief
packages?
If confirmed, will you commit to working with me to achieve greater incentives
for skills building, in particular for low-income Americans?
Answer. I believe that alongside efforts to provide financial relief and assistance
to the unemployed and to struggling households, there is an important role for
building skills and providing new opportunities for upward mobility. As we develop
legislation to respond to the immediate crisis and build a strong recovery I would—
if confirmed—welcome the opportunity to work with you to improve opportunities
for skills building that can provide existing workers and the unemployed paths to
higher-paying jobs.
Question. The American Rescue Plan would also increase the Federal minimum
wage to $15 an hour. In July of 2019, the CBO released a report finding that raising
the Federal minimum wage to $15 an hour could cause up to 3.7 million people to
lose their jobs. In particular, the consequences will be especially brutal for small
businesses, which already operate within razor-thin budget margins.
Taking into account the plethora of other forms of direct assistance provided in
this $1.9 package, was there any consideration for a more moderate figure or delay-
ing when this would go into effect?
Was there any consideration given for how this would harm small businesses,
which employ nearly half of all Americans and which have already suffered a 32-
percent reduction in revenues because of the pandemic?
Answer. The proposal to raise the minimum wage seeks to address the imbal-
anced nature of the recovery and will benefit millions of essential workers. I believe
the workers who have risked their health to provide necessary services to American
households should be paid a wage that allows them to afford basic necessities like
food and rent.
The minimum wage increase would be phased in over time, giving small busi-
nesses plenty of time to adapt. This increase would also unlock billions of dollars
of consumer spending that would fuel demand for the essential goods and services
small businesses provide. With more revenue, small business owners could pay their
employees higher wages—which will increase productivity and retention—and in-
vest in new equipment, expand their operations, and grow their business.
Question. As you may know, my home State of South Carolina is a manufacturing
powerhouse and a leader in trade. Under the Trump administration, and prior to
the pandemic, we saw 1.2 million new manufacturing and construction jobs created
here in the U.S., thanks to the pro-growth policies we put in place. Yet the ongoing
trade wars have undoubtedly also restricted the ability for firms to experience great-
er growth and expansion. One thing I continue hear from my constituents is, ‘‘when
are the tariffs going away?’’
Your predecessor, Secretary Mnuchin, was very active in negotiating the China
Phase One deal as well as other measures related to tariffs. If confirmed, how will
you address the continued use of tariffs?
Answer. President Biden will review all aspects of the Trump administration’s
trade policies toward China, including how completely Beijing has lived up to the
terms of the Phase One agreement negotiated with the Trump administration. As
part of his review, the President will consult with allies to galvanize collective pres-
sure on China and support American workers and businesses.
Question. What kinds of monetary, fiscal, and tax policies do you believe would
most help improve the lives of those who work in our manufacturing sector?
Answer. America needs a stronger, more resilient domestic supply chain in a
number of areas supporting domestic innovation, U.S. jobs, and national security.
President Biden is calling for new incentives to spur domestic production of critical
products in the United States. This will include new targeted financial incentives,
including tax credits, investments, matching funds for State and local incentives,
R&D support, and other incentives to encourage the production of designated crit-
ical materials such as semiconductors in the United States. He is also calling for
the U.S. to close supply chain vulnerabilities across a range of critical products on
which the U.S. is dangerously dependent on foreign suppliers.

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Question. What in your view are the most important policies you would pursue
as Treasury Secretary to promote an innovative and competitive manufacturing sec-
tor?
Answer. There is a wide array of policies that can help improve the strength of
American manufacturers. This includes reforming and eliminating harmful tax poli-
cies which reward offshoring and penalize U.S. companies for manufacturing within
U.S. borders, including some of the international tax reforms enacted as part of the
Tax Cuts and Jobs Acts. In addition, government procurement can prioritize prod-
ucts made by American companies employing American workers, as in the policy
laid out by President Biden during the campaign which promised to shift critical
supply chains back to the U.S. through expanded procurement purchasing power.
Empowering domestic manufacturers also includes pursuing innovative policies, like
the Manufacturing Extension Partnership, which provides technical assistance to
small manufacturers. Lastly, like all small businesses, American manufacturers
benefit from accessible and affordable access to capital to grow and expand their
businesses, and, if confirmed, I would prioritize policies that provide much-needed
capital to aspiring entrepreneurs.
Question. As you know, I have a professional insurance background from my time
before Congress as a small business owner serving policy-holders that are now my
constituents. I believe that the International Capital Standard (ICS) framework as
proposed would negatively impact the U.S. insurance market and its consumers,
specifically as it relates to long-duration products like annuities that fill a critical
need for South Carolinians who depend on these fixed-income products to support
themselves during retirement. The ICS would increase the costs associated with of-
fering these long-term products and make them less readily available. Furthermore,
the ICS would negatively impact the ability of U.S. insurers to bring new and more
affordable products to market that fulfill the growing and changing financial needs
of everyday Americans.
The European regulators that have dominated this process thus far oversee mar-
kets with much different conditions than ours here at home. They lack the State
guarantee funds we have to protect consumers in the event of an insurer default
or insolvency. They lack a robust private-sector retirement product market like the
one we have. We should reject foreign rules of the road when they pose a threat
to the prosperity and well-being of the American consumer.As a member of ‘‘Team
USA,’’ the Treasury Department has advocated for the recognition of our policy-
holder-centric, State-based U.S. insurance regulatory system by the International
Association of Insurance Supervisors (IAIS). It is imperative that the U.S. regu-
latory capital framework is recognized internationally so that American consumers
and insurers are not adversely affected by the application of an ICS that was clearly
not designed to meet our needs.
Will you be a strong voice as Treasury Secretary to advocate internationally for
the recognition of the U.S. insurance regulatory capital framework? If so, how spe-
cifically?
Related to regulatory capital, the IAIS is in the second year of a 5-year monitoring
period that will end in a decision as to whether the Aggregation Method (AM),
which leverages the results of our existing regulatory capital framework, produces
comparable outcomes to the ICS. The Treasury Department’s Federal Insurance Of-
fice plans to complete a study of the impacts that ICS adoption will have on the
U.S. consumers, insurers, and insurance markets. Under your direction, how would
FIO plan to use the study and its results in order to support the assessment that
the AM and ICS produce comparable outcomes?
Answer. It is critical that international regulatory standards are designed to serve
different markets with diverse structures and needs. When it comes to the U.S., this
means respecting our system of market-based insurance provision and State-based
insurance regulation. I am committed to engaging with international bodies like
FSB and IAIS to achieve regulatory outcomes consistent with the interests of Amer-
ican market participants and State-based regulators, and I will continue the Federal
Insurance Office’s efforts to study the effects of ICS on U.S. insurance markets. I
look forward to studying this issue further and incorporating this research into my
approach to advocating on behalf of U.S. insurers and State regulators, if confirmed.
Question. It has now been over 11 years since the government bailed out Fannie
Mae and Freddie Mac and placed the institutions into conservatorship. Under the
Trump administration, former Treasury Secretary Mnuchin and former HUD Sec-
retary Carson, in consultation with FHFA Director Calabria, developed a plan for

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administrative and legislative reform of the Federal housing finance system. While
those reformative actions have been a positive step forward, the GSEs are still more
highly leveraged then they were before the financial crisis and taxpayers remain on
the hook in the event of the next market downturn. I remain strongly committed
to comprehensive reform of our housing finance system by Congress and look for-
ward to working with Ranking Member Toomey and Treasury on this issue.
In your view, what role should the government play in providing an explicit back-
stop to the GSEs?
If confirmed, how will you work with FHFA to address housing policy and build
on the achievements of this administration in the near-term?
Answer. You raise important questions about the housing finance system. We
need a system that promotes financial stability, protects consumers and taxpayers,
and provides stability and affordability to households. A core feature of the U.S.
housing finance system is the 30-year fixed rate mortgage. I look forward to working
across the administration and with the Congress in support of these goals, if con-
firmed. Treasury’s support for Fannie Mae and Freddie Mac as set forth in the Pre-
ferred Stock Purchase Agreements has been crucial to providing stability through-
out the conservatorship. I look forward to carefully reviewing the recent changes re-
flected in the agreements.
Question. During your tenure at the Federal Reserve, you were intimately in-
volved in systemic risk regulation and have significant experience on FSOC. I was
especially pleased by your recent exchange with Senator Toomey during Tuesday’s
hearing in which you indicated that you are supportive of FSOC emphasizing an
activities-based approach to systemic risk instead of favoring designating individual
entities as systemically important.
Should FSOC be required to follow a transparent framework for designating indi-
vidual entities as systemically important after it exhausts all other alternatives?
Answer. As you know, the key tenant of the FSOC is to coordinate among regu-
lators so that significant risks to our economy do not go unaddressed because they
do not fall wholly into the purview of one regulator’s jurisdiction. My view is that
the FSOC should address risks whatever their origin. But our focus must remain
on stability in our financial system and ensuring that we are prepared to mitigate
market disruption in times of stress.
I understand that the legal landscape has shifted somewhat since the Obama ad-
ministration, but I believe the FSOC should have the tools to protect our economy
from systemic threats, whether they’re presented by a single firm or risky actions
by an array of firms. I understand this is an important issue, and if I have the
honor of being confirmed, I look forward to working with you as we refine our proc-
ess for activities-based approach.
Question. As you may know, last year 3.2 million baby boomers retired, effectively
doubling the amount of retirees from 2019, according to the Department of Labor.
As America’s aging population grows, what is your approach to ensuring a secure
retirement, especially for our most vulnerable populations?
Answer. Having a strong Social Security program is essential in order to ensure
a secure retirement for all Americans, especially for our most vulnerable popu-
lations. President Biden has called for a Social Security reform package that would
boost benefits for vulnerable beneficiaries—including widows and widowers, workers
with low lifetime incomes, and older beneficiaries—and provide an across-the-board
increase for all beneficiaries. The plan also improves the long-run fiscal position of
the Social Security Trust Fund by asking wealthy taxpayers to pay the same rate
on their income as other workers. I look forward to working with Congress to ensure
the strength of the Social Security program for decades to come without burdening
middle-class taxpayers, if confirmed.
In addition, President Biden is committed to reforming the tax benefits associated
with individual retirement saving so that all Americans are supported in their ef-
forts to save for retirement. I look forward to studying this issue further, as building
wealth for the middle-class and closing racial wealth gaps is a top imperative for
this administration. Finally, older workers have experienced enormous job loss in
our current recession. Helping older workers who were not yet ready to retire return
to work is an essential part of ensuring that they will be prepared for retirement.

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QUESTION SUBMITTED BY HON. BILL CASSIDY
Question. In the Consolidated Appropriations Act of 2020, Pub. L. 116–93, I was
able to secure funds for the Financial Crimes Enforcement Network (FinCEN) to
contract with an external vendor to thoroughly assess the risk that Trade-Based
Money Laundering (TBML) and other forms of illicit finance pose to our national
security.7
The inclusion of this funding stemmed from the FY2020 Financial Services and
General Government Appropriations Act.8 Further detail on the study is provided
here:
Trade-Based Money Laundering.—The United States has robust anti-money
laundering and counter-terrorist financing regulations in place, yet trans-
national criminal organizations and terror organizations continue to fund
their illicit operations. Rather than utilizing the formal financial system,
many of these entities fund their organizations and operations through the
use of trade transactions, known as trade-based money laundering (TBML).
TBML disguises proceeds of crime by moving value through trade trans-
actions. It is very hard to identify and investigate, which is why the use
of trade to launder money has become such an attractive option to criminal
and terrorist organizations.
The Federal Government achieves an impressive level of success in identi-
fying, investigating, and prosecuting money laundering offenses that occur
through the formal financial system, yet TBML has been a challenge for
U.S. agencies given the fluid nature of trade. Given that criminal and ter-
rorist organizations use trade to finance their operations, it is necessary for
the United States to understand the full breadth of risks posed by trade-
based money laundering and other forms of illicit finance.
The committee recommendation includes $2,000,000 for FinCEN to contract
with an external vendor that will thoroughly assess the risk that TBML
and other forms of illicit finance pose to our national security.9
Combating TBML is a top legislative priority of mine, and I am eagerly awaiting
the results of the aforementioned study. Please provide me with an update on the
status of the study. When do you anticipate completion of the study? Will you en-
sure that the study is a priority and that I receive monthly updates on its status
until it is completed?
Answer. I agree that Trade-Based Money Laundering is a serious concern. If con-
firmed, I will promptly look into the status of the report and provide periodic up-
dates to your office.

QUESTIONS SUBMITTED BY HON. JAMES LANKFORD
TAX

Question. In your appearance before the Senate Finance Committee on January
19, 2021, you made clear that recovering from the pandemic would be the first pri-
ority for the incoming Biden administration. You reiterated the need for the U.S.
to be competitive and that we must encourage growth here at home. However, we
also know that the incoming Biden administration has proposed increasing the cor-
porate tax rate, reversing pieces of the Tax Cuts and Jobs Act, increasing the min-
imum wage, and imposing new regulations.
Can you confirm that tax increases will not be imposed while the economy and
American businesses are still recovering from the pandemic?
Answer. If confirmed, my immediate priority would be taking the steps we need
to address the current crisis—getting the pandemic under control, providing relief
to struggling families and businesses, and supporting the communities that have
been hardest hit. The American Rescue Plan that President Biden released reflects
that focus, through measures that support the public health response and offer eco-

7 See H. Comm. Prt. 38–678, at 635 (2019), available at: https://www.govinfo.gov/content/
pkg/CPRT-116HPRT38678/pdf/CPRT-116HPRT38678.pdf.
8 S. 2524, 116th Cong. (2019).
9 S. Rep. No. 116–111, at 19 (2019), available at: https://www.appropriations.senate.gov/imo/
media/doc/FY2020%20FSGG%20Appropriations%20Act,%20Report%20116-111.pdf.

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nomic support to households. As I said in my testimony, in addition to this imme-
diate relief, the President also intends to pursue measures that support a stronger
economy over the longer term, and in that context, there will likely be opportunities
to help pay for permanent investments through measures that close loopholes and
ask the wealthy to pay their fair share.
Question. I am concerned about any tax increases on our small businesses, espe-
cially in the wake of a global pandemic. In response to questions from my col-
leagues, you’ve said the ‘‘focus is on providing relief, and on helping families and
not on raising taxes,’’ and that the administration would push for tax increases
‘‘longer-term.’’
When is longer-term and what economic signals will you be watching for before
recommending a tax increase?
Answer. As I noted in my testimony, our first task is to provide immediate sup-
port to the economy by combating the pandemic, providing relief to families and
businesses, and supporting hard-hit communities. In offering the American Rescue
Plan, President Biden proposed an approach that would focus first on putting the
Nation and its economy on a path out of this crisis. If confirmed, I would look for-
ward to working with Congress to first pass these measures, and then to pursue
policies that would build a stronger economy over the long term.
CHARITABLE GIVING

Question. As you may know, Congress enacted a non-itemizer charitable deduction
last year, allowing single filers to deduct up to $300 in cash gifts (up to $600 for
joint filers) for charitable donations that they make. Recent data has shown an up-
tick in small gifts since enactment, and charitable giving numbers for 2020 are ex-
pected to be the highest on record. While there are many reasons that Americans
give to charity, the data suggests that the charitable deduction, now available to
those taking the standard deduction, could have some impact on this increase.
Do you agree that tax incentives can encourage behavior, such as charitable giv-
ing, and that incentives like the charitable deduction should be available to all tax-
payers?
Answer. A robust economic literature has established that tax incentives can in
many cases influence behavior. In the case of charitable giving, it is likely that a
diverse confluence of factors contributed to observed trends in giving, including
those related to tax incentives and demand for services provided by charities owing
to the pandemic. As Treasury Secretary, I would be committed to studying the im-
pact of changes in tax law—such as the expansion in tax benefits for charitable giv-
ing—and helping to advance reforms that would enable the tax code to achieve its
desired objectives. Moreover, I am committed to a fair and progressive tax code and
will study the impacts of making such benefits available to a wider swath of tax-
payers.
SOCIAL SECURITY

Question. According to the 2020 Annual Report from the Board of Trustees of the
Federal Old-Age and Survivors Insurance and Federal Disability Insurance Trust
Funds, released on April 22, 2020, on a combined basis, the Old-Age and Survivors
Insurance and Disability Insurance trust funds will be unable to pay full benefits
beginning in 2035. If confirmed, you would be Chairman of the Board of Trustees
of the Social Security and Medicare trust funds and Managing Trustee.
In that role as Chair, do you believe that it is imperative that we address the
trust funds’ shortfall sooner than later?
Will you commit to working together to stabilize the long-term financial trajectory
of the trust funds?
Answer. While the last report of the Trustees (issued in April 2020) found no ma-
terial change in the solvency of Social Security relative to the prior year, this anal-
ysis was done for the pre-COVID period. COVID has accelerated the depletion of
all major trust funds according to Congressional Budget Office projections released
in September 2020. Strengthening Social Security is essential in order to ensure a
secure retirement, especially for our most vulnerable populations. President Biden
has called for a Social Security reform package that would boost benefits for vulner-
able beneficiaries—including widows/widowers, workers with low lifetime incomes,
and older beneficiaries—and also provided an across-the-board increase for all bene-
ficiaries. The plan also improves thelong-run fiscal position of the Social Security

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Trust Fund. It does this by asking wealthy taxpayers with more than $400,000 in
wages to pay the same rate on their income as other workers. On the whole, Presi-
dent Biden’s plan provides older Americans a more secure retirement. I look forward
to working with Congress to shore up the Social Security program for decades to
come without burdening middle-class taxpayers.
OCC

Question. Is it your opinion that under the National Bank Act a Federal charter
requires deposit taking intuitions to engage in the ‘‘business of banking’’?
Answer. You raise an important question about the legal interpretation of the Na-
tional Bank Act by an independent Federal financial regulator, the Office of the
Comptroller of the Currency. I respect the independence of the Comptroller of the
Currency and I understand the importance of the question you are raising with re-
spect to the OCC’s interpretation of the National Bank Act. If confirmed as Treas-
ury Secretary, I look forward to discussions with you on these important topics that
have consequential implications for the future of banking and how we think about
what banking is and should be.
SANCTIONS

Question. You mentioned in your testimony that you intend to conduct a review
of all sanctions currently in place upon your confirmation to this position. If con-
firmed, you will inherit a broad portfolio of sanctions against Iran that have been
enacted over the last 4 years.
Do you intend to pursue sanctions relief with Iran, or will you continue exerting
pressure in an effort to prevent Iran from securing nuclear weapons?
What is your strategy to utilize these sanctions against Tehran for its nuclear en-
richment activities? Do you intend to use the leverage these sanctions provide as
a tool to secure concessions from the Iranian regime, and will you work with your
interagency counterparts to pressure Iran to permanently suspend all uranium en-
richment?
Do you intend to build on these sanctions with additional measures that target
Iran’s illicit activities and support for international terrorism?
Answer. With regard to the JCPOA, the Biden-Harris administration is com-
mitted to ensuring that Iran takes the appropriate steps to resume compliance with
its nuclear commitments under the JCPOA. Iran will only enjoy sanctions relief if
it complies with these nuclear constraints. Furthermore, if confirmed, I will coordi-
nate with interagency partners on broader concerns with Iran and ensure that
Treasury continues its important sanctions work to combat Iran’s support for ter-
rorism, abuse of human rights, and other illicit activities.
INTERNATIONAL DEVELOPMENT BANKS AND MULTILATERAL FINANCIAL INSTITUTIONS

Question. The Secretary of the Treasury is the Governor of the United States at
the World Bank, International Monetary Fund, and Inter-American Development
Bank.
Will you use the voice and vote of the United States to oppose loans to Iran and
other state sponsors of terrorism by the IMF and World Bank?
Answer. The Executive Directors will represent and vote consistent with the U.S.
position and U.S. law at these institutions.
Question. Will you use the voice and vote of the United States to oppose World
Bank loans to countries such as China that have exceeded the graduation threshold
of gross national per capita income?
Answer. The Executive Directors will represent and vote consistent with the U.S.
position and U.S. law at these institutions.
Question. What is your strategy to leverage U.S. influence and to combat China’s
malign influence at these international financial institutions?
Answer. The Biden administration will be willing to make use of the full array
of tools to hold China accountable. Our approach to date has focused on a unilateral
approach—and, as a result, could have been more effective. Going forward, we
should strive to meet this important challenge by building a united front of U.S. al-
lies and partners, including through multilateral institutions, to confront China’s
abusive behaviors.

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Question. China has increased its investments in Latin America as part of its Belt
and Road Initiative. What is your strategy to utilize U.S. influence and leadership
at the Inter-American Development Bank to provide an alternative to China’s pred-
atory lending to our friends in Latin America?
Answer. Competition with China, in Latin America and elsewhere, is one of the
central challenges of the 21st century—and we also need to compete with China’s
economic statecraft. The Biden-Harris administration will craft an alternative vision
that promotes democratic governance and transparency in our global health and de-
velopment work. We will distinguish ourselves from China’s approach to develop-
ment, including the Belt and Road Initiative, by ensuring that social and economic
safeguards are built into the projects we support. We will focus on partnerships and
on strengthening local capacity. In addition, we will work with allies and partners
to advocate for the highest environmental, social, and labor standards to promote
development investments that are both beneficial and sustainable over the long
term.
Question. How do you intend to approach Lebanon’s request for emergency assist-
ance from the International Monetary Fund? Will you use the voice and vote of the
United States to deny Beirut’s requests without clear, measurable commitments to
public sector reforms and anti-corruption efforts?
Answer. The Executive Directors will represent and vote consistent with the U.S.
position and U.S. law at these institutions.
Question. Will you oppose Special Drawing Rights (SDR) at the IMF for devel-
oping countries as a COVID relief measure if they will use some or all of the funds
to pay back Belt and Road Initiative loans from China?
Answer. It is important that the IMF and World Bank are doing what they can
to ensure developing countries have the resources for public health and economic
recovery. We should also do what we can to get the most vulnerable countries the
debt relief they need at this critical time.
I know that there are a variety of proposals out there. If confirmed, I will direct
my team to analyze the full range of ways that the international community can
strengthen its support for the most vulnerable countries during this emergency.
The Biden-Harris administration is committed to ensuring that creditors pro-
viding debt relief to poor countries are transparent about their respective exposures
and agree to receive comparable treatment.
The imperative for disclosure and transparency is especially important for Chi-
nese lenders. We will work together with allies, borrowing countries and multilat-
eral institutions through the G20’s new ‘‘Common Framework’’ to ensure com-
parable creditor treatment as well as ensure that scarce resources meant to allevi-
ate health and economic burdens on the world’s poor are not simply used to repay
China or private creditors.

QUESTIONS SUBMITTED BY HON. STEVE DAINES
Question. Congress recently enacted legislation that would require small busi-
nesses to disclose information to the U.S. government about their beneficial owner-
ship. The legislation, included in the National Defense Authorization Act, provides
new authority to the Treasury Department to assist law enforcement with pre-
venting criminal activity. I worry that this new authority could also unintentionally
subject small businesses to new compliance costs and privacy issues.
Will you commit to working with small businesses, and other stakeholders, to ad-
dress their concerns as the requirements for disclosure of beneficial ownership infor-
mation go into effect?
Answer. I agree on the need for Federal banking agencies, including but not lim-
ited to FinCEN, to consult with the small business community when promulgating
regulations, including on the promulgation of rules and guidance to implement the
beneficial ownership reporting requirements. If confirmed, I will ensure that appro-
priate consultation occurs.
Question. In Montana, we have tribal and rural populations across the State that
feel neglected by their Federal Government, which tends to focus on the loudest
voices in big cities.

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What will you do to make sure that tribal and rural interests in Montana and
across America have their voices heard and reflected in Treasury’s policies?
Answer. If confirmed, I will focus closely on ensuring that Treasury activities are
designed and performed in ways that attend to rural and tribal communities, includ-
ing by ensuring that appropriate communication and resources are made available
through our recovery efforts. Tribal Consultations are conducted through the Office
of Economic Policy and the Treasury Tribal Advisory Committee and advise the Sec-
retary on matters related to taxation and dispensing technical assistance to Native
American financial institutions officers. As Secretary, if confirmed, I will ensure
that these areas act in concert and are more impactful. I will also work to remove
obstacles and work with Congress on potential solutions to increase impact effi-
ciency because I recognize that this crisis has hit tribal communities particularly
hard and we have to ensure that they are getting the assistance that they need.
Question. China is rapidly innovating in the digital asset and financial technology
space, beginning a pilot of a central bank digital currency in late 2020.
What are your plans to ensure the United States remains a cutting-edge leader
in global financial services?
What are some concrete steps you plan to take to promote responsible innovation
at the Treasury, specifically at FinCEN, OFAC and the OCC?
Answer. I believe the United States must be a leader in the digital asset and fi-
nancial technology areas. This requires us to develop a regulatory framework that
fosters innovation and promising new technologies while addressing legitimate con-
cerns about the use of such technologies to finance terrorism and engage in other
malign activities that threaten U.S. national security and pose risks to the financial
system. I look forward to working with other Federal banking and securities agen-
cies, the Federal Reserve, and Congress in developing and implementing such a
framework.
Question. Secretary Mnuchin issued proposed rules in December 2020 that ex-
pands the reach of the Bank Secrecy Act (BSA) beyond its traditional scope as ap-
plied to digital assets, including, for the first time, customer counterparty require-
ments. Secretary Mnuchin did this without meaningful industry consultation and
attempted to hold a truncated public comment period over the holidays. Will you
pledge to revisit the scope of these rules to ensure adequate public comment and
consistency with the past scope of the BSA?
Answer. I am aware of the rules proposed by FinCEN in December 2020 regard-
ing how certain digital assets are treated under the Bank Secrecy Act. I agree on
the need to ensure adequate consultation with and input from stakeholders If con-
firmed, I intend to ensure a full and substantive review of the proposals, which will
include an assessment of how to ensure proper input from stakeholders.
Question. Certain digital asset characteristics may require paradigm-shifts in BSA
supervision, e.g., more use of digital asset analytics and other risk-based tools and
less reliance on financial institution filings. This is especially important after the
recent data breach at the Treasury.
Are you open to considering new BSA approaches that may be more effective in
the financial technology space?
Answer. I agree that we need to look at BSA rules and oversight in light of the
evolution of digital assets and other financial technologies. I understand that
FinCEN in September 2020 issued an advance notice of proposed rulemaking re-
garding BSA reporting and other requirements, including the solicitation of com-
ments on whether and how to use risk-based methodologies to improve anti-money
laundering measures. I think the ANPRM is one means of soliciting and assessing
whether risk-based approaches may be more effective, and I look forward to engag-
ing with stakeholders to ensure that BSA reporting and oversight efforts are up-
dated to address emerging risks and new means of promoting effective compliance.
Question. President Biden has stated he will prioritize financial incentives for the
private sector to develop and implement a range of technologies to create jobs while
reducing carbon emissions. One very promising, vital technology is Carbon Capture,
Utilization and Sequestration (CCUS). Congress enacted section 45Q of the Internal
Revenue Code on a bipartisan basis, and Treasury just last week published final
regulations to implement those tax credits. These regulations will provide more
legal certainty than had been the case previously, and it appears these regulations
have widespread approval among the various interests supporting CCUS develop-

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ment. However, there is more that Congress can do to expand the value of the exist-
ing 45Q credits, the duration of the credits, and the applicability of the credits in
order to induce the kind of expeditious and large scale implementation of CCUS
technology that would appear to underlie the Biden administration’s aspirations.
Can you please advise how you intend to facilitate the expanded use of the exist-
ing 45Q credits and whether the Biden administration will support efforts to expand
the 45Q credit?
Answer. Climate change is an existential threat and one of the dominant forces
shaping the world and our economy. Meeting this challenge is an urgent need, and
I am committed to doing whatever I can to address this impending crisis. Using the
tax code to set incentives for businesses and individuals to adopt climate-friendly
policies is a critical tool in this battle. President Biden has been supportive of CCUS
and of tax incentives to increase its availability and affordability. If confirmed, I will
support the President in developing and implementing his climate agenda and using
the tools at my disposal to tackle the challenge of climate change.

QUESTIONS SUBMITTED BY HON. TODD YOUNG
Question. As a response to the COVID–19 pandemic, last year Congress passed
the two single largest relief packages in history. And just last week, President Biden
proposed a nearly $2-trillion plan for further relief on top of his $5-trillion Build
Back Better agenda.
While I believe the Federal Government’s response to the economic crisis so far
was vital, I can’t ignore the effect this level of spending has had on our national
debt, which continues to spiral out of control.
In testimony before the House last summer, you noted that despite the short-term
importance of COVID relief, ‘‘at some point, we will have to think through how to
ensure the long-run sustainability of Federal finances.’’
As the national debt approaches $30 trillion, how important do you believe it is
for us to immediately prioritize the fiscal health of the U.S. government once our
economy has recovered?
In FY 2020, the Federal budget deficit tripled from the previous fiscal year to over
$3.1 trillion, largely in response to the pandemic. That being said, what realistic
steps can be taken to slow or reverse course on this growing expansion of the Fed-
eral budget deficit?
Answer. I believe that the current economic crisis calls for robust fiscal support,
but also believe it is critical that we put our country on a path towards long-term
fiscal sustainability. In this vein, I’ve called for more fiscal support since the early
days of the pandemic and continue to do so. Without question, we have to be con-
scious of our debt, but it’s clear that fiscal stimulus to support the economy and the
working families most affected by the impact of COVID–19 is our most urgent pri-
ority.
That being said, near-term fiscal support is not inconsistent with long-term fiscal
sustainability, and the Biden administration will formulate policies to address these
long-term fiscal concerns. During the presidential campaign, President Biden called
for a series of offsets to pay for his permanent spending programs, proposed a Social
Security reform package that would extend Social Security’s solvency date, and in-
troduced several health reforms that would bend the growth in health costs. Com-
bined, these policies—coupled with pro-growth investments across the budget—will
help drive down the debt relative to the size of the economy.
Question. A number of my colleagues have rightly asked you about the fiscal
emergency that is our national debt. While I understand your concern to prioritize
economic recovery in the immediate term, I was hoping to further understand your
views on the contours of this crisis.
In your response to Senator Thune’s question during the hearing regarding the
danger of interest rates creeping back up if U.S. debt becomes a riskier investment,
you noted that developed economies have experienced an environment of low inter-
est rates since before the 2008 financial crisis. Further, you referred to certain
‘‘structural shifts’’ in those economies that will help to ensure the interest burden
of our debt will remain steady as a percent of GDP.

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Could you please expand on what these structural shifts have been and how they
have contributed to the ongoing low interest rates in the developed world?
Considering the magnitude of the problem if interest rates did go up, what factors
would you look for that may indicate rates are likely to rise?
Answer. There has been a shift in economic thinking quantifying the costs of ris-
ing debt. This shift in the projected link between debt and interest rates is driven
by a complex and changing set of circumstances, including widely available capital
for lending, enduring faith in the credit of the United States government, monetary
decisions by the Federal Reserve, and the relative appeal of non-interest bearing as-
sets. Naturally, these rates could experience a rise for a host of reasons. As Treas-
ury Secretary, it would be incumbent upon me to closely monitor these factors and
consult with the President and Vice President on the economic consequences of the
trajectory of interest rates.
Question. The Federal Reserve’s emergency lending facilities that were created by
the CARES Act were allowed to expire at the end of 2020, with only a few seeing
short-term extensions. Compared to programs administered by the SBA, these pro-
grams saw a slow rollout and reduced impact.
Do you believe the Federal Reserve should play a central role in further support
for small and medium-sized businesses?
If so, are there any lending facilities in particular that you would be interested
in reviving?
Answer. The country is currently facing an unprecedented pandemic that has ex-
posed economic inequalities rooted in our system for generations. I believe that it
is imperative that the government does its part to catalyze an economic recovery
that is both equitable and sustainable, and supports policies that pursue these out-
comes. Treasury will look to quickly and effectively implement the programs and
support passed by Congress at the end of this past year. It will be critical to provide
support to small businesses and individuals that are still struggling to make it
through the crisis. The Federal Reserve will continue to provide support to the econ-
omy through its ongoing programs and the use of its available tools but as man-
dated by Congress, the 13(3) facilities funded by the CARES Act will not be avail-
able.
Right now, taking too little action poses the greatest risk to the health of our
economy, the livelihoods of the American people who drive that economy, and future
generations. I support, and will help the administration to pursue actions that pro-
vide aid to fully distribute the vaccine, reopen schools, deliver badly needed aid to
State and local governments, support small business owners—and most importantly
get people back to work. If I’m confirmed, I will look forward to working with your
office and others in Congress to help to ensure that this additional support particu-
larly gets to the small and mid-sized businesses that have been hardest hit during
the crisis.
Question. On June 5, 2020, the United States Trade Representative (USTR) an-
nounced an investigation into the Digital Services Tax (DST) being implemented by
several countries, expanding on the USTR’s existing investigation into France’s
DST. Earlier this month, the USTR announced a suspension of planned retaliatory
tariffs against France, a country that is set to raise almost $500 million from U.S.
tech firms.
Absent an international agreement regarding the DST issue, how do you believe
the United States should respond to the unilateral implementation of such taxes by
other nations?
Answer. If confirmed, I will be strongly supportive of and firmly committed to co-
operative multilateral efforts to work to resolve the DST disputes. If such disputes
were not resolvable through international negotiations, I would work with the
United States Trade Representative to determine our best alternative course of ac-
tion.
Question. President Biden has made it clear that he would like to roll back many
of the tax reforms achieved through the Tax Cut and Jobs Act of 2018 and imple-
ment a sweeping list of new tax increases.
While the revenue raised by his plan is estimated to pay for just under half of
his proposed spending, analysis from the Tax Foundation and others indicate the
long-term economic effect of this plan will reduce GDP by around 1.5 percent and
eliminate some 500,000 jobs. In addition, as we discussed during the hearing, Presi-

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dent Biden’s proposal to increase the corporate tax rate would incentivize corporate
inversion, further reducing the tax base. I have grave concerns about President
Biden’s plans.
What is your agenda for tax policy if confirmed as Treasury Secretary? What will
you prioritize in the first year? What are your long-term goals?
Answer. Our Nation is facing unprecedented challenges. As we rebuild, we must
pursue policies that promote equitable growth and restore American competitive-
ness. We must create an economy that works for everyone. I am intent on helping
this administration build a sustainable and durable economy that is built on a foun-
dation that prioritizes equity and inclusivity. President Biden and I believe that this
economic recovery must be one that focuses on individuals and families and rewards
hard work. These values must be reflected in our tax system as well. We recognize
that our tax system cannot be tilted toward corporate interests and the wealthy,
while those that are sustained predominately by wages bear an unequal burden.
Biden will require corporations and the wealthiest Americans to pay their fair
share.
In the short term, the emergency legislative package the President proposed last
week included additional economic impact payments and expanded refundable cred-
its. During the campaign, President Biden made longer-term proposals that included
an increase in the corporate tax rate, reforms to ensure robust taxation of foreign
profits, and requiring that families that make more than $1 million pay the same
tax rate on their investment income that they do on their wages. I look forward to
consulting with and working with Congress in both the short and long term to enact
these proposals into law.
Question. How would you prevent corporations from moving their profits overseas
in order to avoid the increased taxes proposed by President Biden?
Answer. I appreciate your concern with preventing profit-shifting and inversion
transactions. President Biden has proposed reforms to the tax on global intangible
low-taxed income (GILTI) that would ensure appropriate taxation of corporations’
foreign profits alongside a higher statutory corporate rate. These changes to the tax
on GILTI would discourage profit shifting abroad. In addition, a global minimum
tax agreed to at the OECD would stop the destructive global race to the bottom on
corporate taxation. A multilateral agreement along these lines would thus further
discourage profit shifting and base erosion.
Question. Bitcoin and other digital and cryptocurrencies are providing financial
transactions around the globe. Like many technological developments, this offers po-
tential benefits for the U.S. and our allies.
At the same time, it also presents opportunities for States and non-state actors
looking to circumvent the current financial system and undermine American inter-
ests. For example, the Central Bank of China just issued its first digital currency.
What do you view as the potential threats and benefits these innovations and
technologies will have on U.S. national security? Do you think more needs to be
done to ensure we have appropriate safeguards and regulations for digital and
cryptocurrencies in place?
Answer. I think it important we consider the benefits of cryptocurrencies and
other digital assets, and the potential they have to improve the efficiency of the fi-
nancial system. At the same time, we know they can be used to finance terrorism,
facilitate money laundering, and support malign activities that threaten U.S. na-
tional security interests and the integrity of the U.S. and international financial sys-
tems. I think we need to look closely at how to encourage their use for legitimate
activities while curtailing their use for malign and illegal activities. If confirmed,
I intend to work closely with the Federal Reserve Board and the other Federal
banking and securities regulators on how to implement an effective regulatory
framework for these and other fintech innovations.
Question. Over a dozen countries have now issued sovereign bonds with ultra-
long-term maturity rates as long as 100 years. Some analysts have suggested the
issuance of longer-term, lower-interest debt instruments here in the U.S. might
have a positive effect on our national debt given the low interest rate environment.
While interest rates are low and knowing that our national debt is an ever-
growing problem, what are your thoughts on these so-called ‘‘century bonds,’’ and
is this an issue the Treasury Department might revisit if you are confirmed?

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Answer. President Biden is committed to fiscal responsibility and making sure
that what we do now leaves future generations better off. The most important thing
we can do today to set us on a path to fiscal sustainability is defeat the pandemic,
provide relief to the American people, and make long-term investments that will
grow the economy and benefit future generations. Today, the demand for existing
Treasury instruments remains robust and is sufficient to meet US financing needs.
Introducing new, ultra-long-term instruments would add new complexities to this
market and deserves further study in light of the many factors that determine U.S.
Treasury market policy.
Question. As a part of the Build Back Better agenda, President Biden has called
for Federal investment in American research and development in order to counter
China’s push for technological dominance in the 21st century. Out of similar con-
cerns, last year I introduced the Endless Frontier Act with Senator Schumer, which
would increase Federal R&D spending, bring emerging technologies to the market-
place more quickly, and ensure the Federal Government’s efforts reflected the im-
portance of technology innovation in the decades to come.
Do you agree that the U.S. is at risk of losing our technological leadership in the
world? If so, what role do you believe the Treasury Department can play in contrib-
uting to a robust foundation for innovative research in emerging technologies across
the United States?
Answer. The U.S. has long been a technological leader on the global stage. Main-
taining this leadership position requires continued investment in areas like re-
search, technical assistance, education, and worker training—while also protecting
intellectual property developed within our borders. The Biden administration has
enthusiastically endorsed all of these strategies, and as Treasury Secretary I would
be committed to finding the most effective ways to implement them. Indeed, the
Treasury Department is a focal point on many issues relating to global competitive-
ness, ranging from tax policies that encourage investment in research to imple-
menting policies to ensure free and fair trade with our competitors. If we embrace
the strategies outlined by President Biden during the campaign, I believe we will
maintain our position as a technological leader.
Question. We were facing a housing affordability crisis well before the pandemic,
but COVID–19 has only exacerbated it. My colleague Senator Cantwell and I suc-
cessfully fought for inclusion in the December 2020 COVID relief package a perma-
nent minimum 4 percent credit rate for the Low-Income Housing Tax Credit
(LIHTC). As you may know, LIHTC is a model public-private partnership that is
responsible for virtually all of the affordable rental housing in our country built over
the past 3 decades. This provision was part of Senator Cantwell’s and my Affordable
Housing Credit Improvement Act legislation, which would also increase the annual
credit allocation, lower the ‘‘50-percent test’’ bond-financing threshold to protect the
financial viability of projects that utilize Private Activity Bonds (PABs), and insti-
tute basis boosts to enhance projects focused on serving extremely low-income and
formerly homeless households and rural and tribal communities.
Will you support further legislative measures to strengthen and improve LIHTC?
Answer. I am grateful for your leadership in expanding housing affordability
through the Low-Income Housing Tax Credit and supportive of your work. The
measure that Congress enacted through your leadership is a critically important ini-
tiative that will help to make the LIHTC more effective and to increase housing af-
fordability across the country. If I am privileged to be confirmed as Treasury Sec-
retary, I would be honored to work with you on additional measures to strengthen
and improve the LIHTC.

QUESTIONS SUBMITTED BY HON. BEN SASSE
Question. Could you please expand on your answer to my question about how you
would approach a review of our technological interdependence with China and clar-
ify whether or not you believe that some degree of decoupling from China will be
required in the next 4 years? Beyond investing more at home in manufacturing, in-
frastructure, and R&D sectors, what are the most effective coercive economic tools
at Treasury’s disposal to both encourage decoupling from China and to punitively
address China’s most egregious trade practices?
Answer. We need a comprehensive strategy and a more systematic approach that
actually addresses the full range of these issues, rather than the piecemeal ap-

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proach of the past few years. We have to play a better defense, which must include
holding China accountable for its unfair and illegal practices and making sure that
American technologies are not facilitating China’s military buildup, human rights
abuses, or other malign activities. The Biden administration will be willing to make
use of the full array of tools to counter China’s abusive practices and hold Beijing
accountable. We also have to play a much better offense, by investing in the sources
of our technological strength.
Question. In my opinion, Huawei is the textbook example of the supply chain
problem the United States and the freedom-loving world faces with continued tech-
nological linkages with the CCP. The CCP’s tech puppet with known security flaws
cornered the international market for critical technology by using stolen IP and
massive State subsidies. Can you use 5G and Huawei as a case study to reflect on
how you think decoupling is unfolding in the 5G space and how it should, or should
not, serve as a model for broader technological decoupling from China policy action?
Answer. President Biden is firmly committed to making sure that Chinese compa-
nies cannot misappropriate and misuse American technology—and to ensuring that
U.S. technology does not support China’s malign activities. I am not in a position
to comment on specific regulatory actions, but I can assure that we intend to review
these issues carefully and will be committed to protecting U.S. national security and
America’s technological edge.
Question. Can you please describe the CCP’s military-civil fusion policy?
Answer. This is a very important matter. If confirmed, I will closely review the
Treasury Department’s role in responding to China’s civil-military fusion policy
Question. Do you support Chinese companies having access to U.S. capital mar-
kets when these companies are neither as transparent as they should be or have
known links to the Chinese military?
Answer. We need to address the challenges that China poses to our national secu-
rity and economy. I agree that transparency and disclosure is critical to our capital
markets. This is part of the reason why our capital markets remain the deepest and
most liquid in the world. I look forward to working with regulators and my col-
leagues within the Biden administration to ensure that companies listed in the U.S.
follow the law.
Question. Do you support sanctions and prohibitions on American companies and
financial instruments investing in Chinese entities with close ties to the Chinese
military?
Answer. As with many policy actions taken by the previous administration, the
Biden-Harris administration will undertake a rigorous review to determine the ap-
propriate policy response.
Question. Will you support the continued implementation of the November 12,
2020 E.O. prohibiting U.S. individual investors from investing in Chinese military
companies and their subsidiaries, as defined by the DOD and placed on a public list
authorized by section 237 of the 1999 NDAA (the so-called Pentagon PLA list)?
Answer. As with many policy actions taken by the previous administration, the
Biden-Harris administration will undertake a rigorous review to determine the ap-
propriate policy response.
Question. What economic tools are most effective to address the following: the en-
demic corruption in the Chinese Communist Party, the Party’s ongoing genocide of
Uyghurs in Xinjiang, and the crackdown on the pro-democracy movement in Hong
Kong?
Will you commit to having Treasury lead a campaign of sanctions, investment re-
strictions, and whatever coercive economic measures are appropriate to hold the
Chinese Communist Party accountable for corruption and human rights abuses in
China?
What sanctions would you advocate to the President to impose if the PRC took
military action against Taiwan?
Answer. I am committed to working in collaboration with my colleagues across the
Biden administration to hold China accountable for its violation of international
law. The Treasury Department has an array of tools at its disposal that can and
should be effectively deployed to address these challenges.

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Question. I read with interest some recent comments you made at the Asian Fi-
nancial forum. I believe you commented in part that the agreement we will sign this
week falls short in part because it leaves in place substantial tariffs. As a follow-
on, I’d like to ask you the following. If it were the case that both China and the
United States were suddenly to eliminate every bilateral tariff applicable to trans-
actions in goods and services and we were to eliminate every non-tariff barrier to
trade, would you expect the CCP to abandon:
Its pervasive practices of requiring IP transfers as an explicit or implicit contract
term;
Its systematic and strategic harvesting of digital data from parties that consume
digital services as a condition of commercial relationships and contracts concluded
with Chinese firms;
Its domestic law that eliminates the legal barrier between ‘‘state-owned’’ and ‘‘pri-
vate’’ firms domiciled in mainland China?
Doesn’t it follow that a narrow consideration of relative tariff levels or other bar-
riers to trade that act as taxes on commercial exchanges cannot fully capture the
economics of trade between the U.S. and China?
Answer. China is America’s most serious economic competitor. Strategic competi-
tion with China is a defining feature of the 21st century. China poses challenges
to our security, prosperity, and values. China is engaged in conduct that hurts
American workers, blunts our technological edge, and threatens our alliances and
our influence in international organizations. Winning the economic competition with
China requires us to make transformative investments at home in American work-
ers, infrastructure, education, and innovation. We cannot maintain our edge over
the long term unless we run faster at home. As President Biden has said, we need
to be far more effective in galvanizing allies to join with us to push back on unfair
Chinese practices that threaten U.S. values and interests. And we will be willing
to make use of the full array of tools to counter China’s abusive economic practices
and hold Beijing accountable. In all of these areas, we look forward to working with
you and with others in Congress to take on the China challenge.
Question. Is the PRC a market economy? Has it fulfilled its commitments under
accession protocols to the WTO?
Should the U.S. and other market economies continue to grant the PRC the bene-
fits of being a market economy in the WTO while they have not fulfilled their com-
mitment after two decades?
Do you think China provides illegal subsidies or support to its tech champions?
Answer. The economic dimension of U.S.-China competition is crucial. And we will
take on the challenge of China’s abusive, unfair, and illegal practices. China is un-
dercutting American companies by dumping products, erecting barriers, and giving
illegal subsidies to corporations. It is stealing intellectual property and engaging in
other practices to give it an unfair technological advantage, including forced tech-
nology transfer.
Question. At present, our Federal debt-to-GDP ratio is higher than at any time
in our Nation’s history. The ballooning debt is attributable partly to the COVID
pandemic but also to years of Washington’s ever-increasing spending habits. The
cost of servicing that debt is currently low due to investor wariness and the dollar’s
dominance as the world’s reserve currency. However, despite what modern mone-
tary theorists may claim, irresponsible borrowing cannot remain consequence-free
forever.
Once the economy and investor confidence rebounds, what would be the effect on
our ability to service rising debt if the dollar’s dominance as the reserve currency
was to weaken and interest rates rose accordingly?
Answer. There are several reasons that the U.S. dollar is the world’s dominant
reserve currency. The United States has the largest economy, and the deepest and
most liquid capital markets. We are committed to maintaining a sound economy and
confidence in our financial system. The Biden-Harris administration will make in-
vestments in the American people that will accelerate the U.S. economic recovery
and lay the foundation for a strong and equitable U.S. economy in the years ahead.
The world can be certain that the United States will not seek a weaker currency
to gain competitive advantage.

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Question. Over the last 20 years the dollar’s share of foreign bank reserves de-
creased by 10 percent. Hostile nations including Russia and China are seeking to
exacerbate this trend by divesting their dollar reserves where possible and by devel-
oping new forms of international payment systems to circumvent reliance on the
dollar; a proposition increasingly attractive to countries displeased with the United
States’ sanctions regime. These concerns are shared by some of our biggest financial
stakeholders. Goldman Sachs issued a warning last year that ‘‘the dollar is in dan-
ger of losing its status as the world’s reserve currency’’ while JPMorgan noted that
investors are starting to have ‘‘more confidence in the euro as an alternative.’’
What is your response to these concerns expressed by our financial institutions?
What can, and should, the United States be doing to ensure the dominance of the
dollar as the global reserve currency, not merely for the next 10 years, but for the
next 50 years?
The dollar currently accounts for about 60 percent of global currency reserves,
down from 70 percent 20 years ago. Is this measurement of the dollar’s percentage
share of total global reserves the best indicator of the dollar’s continued dominance
as ‘‘the world’s currency’’?
If the percentage of global reserves is not the best indicator of the dollar’s finan-
cial dominance, what is a better indicator?
If the percentage of global reserves is the best indicator, then how would our con-
tinued ability to support our insatiable spending with cheaply borrowed money be
affected if the dollar’s global reserves were to decline further to 50 percent by 2030?
How far can the dollar’s share of global reserves fall before our borrowing ability
is severely impacted?
Answer. There are several reasons that the U.S. dollar is the world’s dominant
reserve currency. The United States has the largest economy, and the deepest and
most liquid capital markets. We are committed to maintaining a sound economy and
confidence in our financial system.
Question. The Department of Treasury released the final regulations on section
199(a) for cooperatives and their patrons. This has been an issue over which the co-
operative industry stakeholders have been actively engaged with Congress and the
Treasury Department for some time. Nebraska has over 30 locally owned farmer co-
operatives that serve approximately 60,000 farmers.
I request that your team review the congressional action taken in the Consoli-
dated Appropriations Act of 2018, review the comments submitted through the pub-
lic record and review the final rule published. I would further ask you to conduct
an economic analysis on the impact of the final rule on farmers and share this anal-
ysis with this committee.
Answer. I appreciate the importance of this issue, and I look forward to working
with Treasury staff to ensure that section 199A has been implemented fairly.
Question. Do you feel the United States’ trade deficit is a useful metric to evaluate
trade with countries? What measurements of bilateral trade flows will be used in
the Biden administration to negotiate, conclude and present bilateral or multilateral
trade agreements to the Congress for consideration?
Answer. The overall U.S. trade deficit, especially in manufactured goods, rep-
resents a challenge and an opportunity. If confirmed, I will work with President
Biden to restore American manufacturing and the export strength that comes with
it. Bilateral deficits can also be indicators of unfair trade practices, which I will vig-
orously oppose if confirmed. At the same time, bilateral trade deficits must be un-
derstood in the overall context of our trade relationship with each country, not as
a single catch-all metric. If confirmed, I look forward to working with Congress to
pursue a rules-based trading system that protects Americans from manipulative,
anti-competitive practices, puts workers first, and assures that trade rules reward
countries that meet rather than shirk their climate commitments.
Question. What is your view on the Trump administration’s decision to impose
tariffs on China and the Phase One agreement between China and the United
States?
Answer. President Biden has said that he is not going to make any immediate
moves on the current China tariffs but rather engage in a comprehensive review of
all aspects of the Trump administration’s trade policies toward China, including
how completely Beijing has lived up to the terms of the Phase One agreement. As

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part of his review, he is going to consult with allies to galvanize collective pressure.
We need an approach that actually brings meaningful pressure on China.
Question. What advice will you provide to President Biden and the United States
Trade Representative on currency manipulation in China, Vietnam, or other coun-
tries?
Answer. The President has committed to opposing efforts by countries to artifi-
cially manipulate their currencies to gain an unfair trade advantage. I am sup-
portive of that commitment and, if confirmed, will work in coordination with the ad-
ministration to oppose any such efforts.
Question. Taiwan is the United States 11th largest trading partner, with $76 bil-
lion in total goods exchanged during 2018. Taiwan has expressed a willingness to
be a strong economic partner and has taken steps to removed barriers to agriculture
goods. Do you agree that a trade agreement between the United States and Taiwan
should be a priority and will you work with the United States Trade Representative
to support a trading framework that is beneficial to promoting security and eco-
nomic growth between the United States and Taiwan?
Answer. President Biden has been clear that he will not sign any new free trade
agreements before the U.S. makes major investments in American workers and our
infrastructure. Our economic recovery at home must be our top priority. This does
not mean that President Biden will not pursue a robust trade agenda. If confirmed,
I will work with President Biden to reach out to our allies, rebuild bridges, and pur-
sue trade agreements that support American prosperity and put workers first.
Question. The decision to keep schools closed in many areas of the country has
had more to do with politics than local coronavirus spread and too often science has
been ignored in deciding how to best serve kids. I believe that by keeping schools
closed we are kneecapping the next generation and hindering the ability of our econ-
omy to rebound. What is the economic cost of school closures, and how will this im-
pact our ability to compete with Europe, Asia and the vast majority of the world
that managed to keep schools open over the last year?
Answer. I believe that the best way to get people back to work and open schools
is to get the virus under control and to provide schools with the resources necessary
to be able to safely open. President Biden has made a commitment to get the virus
sufficiently under control and to safely reopen schools. No parent wants to choose
between their child’s safety and education or between their children’s safety and
their ability to work. Over 2.5 million children have tested positive for COVID and
the number of cases among children is continuing to rise. Women with children
have left the labor force in record numbers. Helping women return to work and chil-
dren return to school is an essential part of the economic recovery. If confirmed, I
look forward to working with President Biden to achieve his goal of safely reopening
schools and providing the support necessary to help our Nation’s children make up
for their lost learning and recover from the emotional toll of the pandemic.
Question. Do we have a sense of the percentage of individual earners making less
than $75,000 per year who have had their financial status change due to the pan-
demic? Wouldn’t the data show that the vast majority of those whose status has
changed would be eligible for unemployment insurance, which also supports earners
who are not unemployed but have had their hours or incomes reduced?
If yes, what in your view is the benefit of an additional across-the-board stimulus
and how would this help the economy more than targeted forms of aid?
Isn’t it true that the safe opening of businesses would provide more of a boost to
the economy than any stimulus check?
In your hearing, several of my colleagues brought up unemployment insurance
and needed reforms to the system. In your view, does an individual earning more
on unemployment insurance than they earned through their former employment
create a disincentive to work and /or impact the ability of the economy to rebound?
Answer. President Biden supports increasing the stimulus amount to mitigate the
losses that families have experienced and to help the economy quickly recover from
the damage done by the pandemic. In addition, I believe that it is critically impor-
tant that we provide sufficient aid to unemployed workers, many of whom have ex-
perienced a devastating loss of income with no current opportunity to safely work.
President Biden is committed to tackling the spread of the virus and quickly vacci-
nating the population so that businesses can safely open and Americans can get

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back to work. Economic data and analysis should guide our reforms to the unem-
ployment insurance system.
Question. Many believe that the rush to automation and technological advance-
ment has been accelerated by the pandemic. Do you agree with this view, and if
yes, how do you see this trend affecting the economic outlook over the next 5 and
10 years? How is this likely to affect productivity and wages?
Answer. It is too early to know how the pandemic has impacted these trends, but
we must ensure that the recovery is an inclusive one. The pandemic has accelerated
the disparity between the wealthiest Americans and the most vulnerable, as some
have continued to accumulate financial gains while millions have lost their jobs or
their lives. Rising inequality is a drag on our economic growth: when extreme in-
equality leaves so many unable to afford even basic necessities, let alone reach their
full potential, it holds back our entire economy. If confirmed, I will work with Presi-
dent Biden and with Congress to implement his recovery plan and to begin invest-
ing in American innovation and production to reinvigorate growth, enhance produc-
tivity and shared prosperity, and raise wages.
Question. Farmers and ranchers in my State that applied and received a round
1 paycheck protection plan (PPP) loan that has been subsequently forgiven believe
they would be eligible to amend their application, apply again, and receive an in-
crease under the new PPP terms. Those farmers that received a round 1 loan but
that has not been forgiven are not eligible for an amended or increased amount.
Those farmers ineligible for an amended application would need to apply separately
for a loan from the round 2 PPP program then would have to have experienced a
25-percent reduction in revenue from any quarter in 2019 to the corresponding
quarter in 2020. This is a challenging set of criteria to meet.
Please review the applicable guidelines and their implementation through the
Small Business Administration and consider issuing an informational guidance doc-
ument to stakeholders and the SBA that offers more flexibility to complex agri-
culture businesses. I further request the Treasury Department share this informa-
tion with members of this committee.
Answer. I will look into this issue and will follow up with you and members of
this committee.
Question. In your testimony, you discussed the need to implement domestic poli-
cies—including increased investment in manufacturing, infrastructure, and research
and development—that will allow us to remain competitive against international
players, such as China. However, in contrast to this, President Biden has called for
an increase in the corporate tax rate, which would push us back to one of the high-
est corporate income tax rates in the developed world and thus hamper our competi-
tiveness on the global stage. Could you please elaborate on what specific invest-
ments you feel will increase our competitiveness and how those policies balance
against an increase in the corporate income tax rate?
Answer. During the presidential campaign, President Biden proposed raising the
corporate tax rate to 28 percent—which is the midpoint of the pre-2017 level and
the rate imposed after the tax act. At 28 percent, the corporate tax rate would be
substantially below the level that had been in place for decades.
The Biden agenda would couple this tax change with massive investment that
would benefit American businesses of all stripes and improve our international com-
petitiveness. This includes a sweeping plan to bolster America’s infrastructure,
ranging from surface transportation to broadband to airports and waterways. The
plan would add billions of dollars to worker training and college education, in addi-
tion to apprenticeship programs—all of which would raise the productivity of Amer-
ican workers. The Biden plan allocates hundreds of billions in research funds for
renewable energy and other economic priorities, which ultimately make us more
competitive on the world stage. And perhaps most importantly, President Biden has
advanced a plan to quickly distribute vaccines to households while also providing
a lifeline for the American economy. These critical actions will help businesses
across the country, including those that are subject to the higher 28-percent cor-
porate tax rate.
Question. Beginning in 2022, taxpayers will be required to amortize their research
and development expenses over 5 years (instead of being allowed to immediately ex-
pense them). This change will raise the cost of conducting research here in the U.S.
and leave us less competitive internationally. In your testimony you highlighted the
importance of investment in domestic R&D, and I feel that this change could run

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counter to that goal. Could you please elaborate on the administration’s plans to in-
crease R&D activities in the U.S. and your views on this upcoming change in treat-
ment of R&D expenses? Additionally, could you commit to working with Congress
to ensure we have competitive tax policies that support domestic research and devel-
opment?
Answer. The tax change you describe was part of the 2017 Tax Cuts and Jobs
Act. The Biden agenda would complement this tax change with massive investment
that would benefit American businesses of all stripes and improve our international
competitiveness. This includes a sweeping plan to bolster America’s infrastructure,
ranging from surface transportation to broadband to airports and waterways. The
plan would add billions of dollars to worker training and college education, in addi-
tion to apprenticeship programs—all of which would raise the productivity of Amer-
ican workers. The Biden plan allocates hundreds of billions in research funds for
renewable energy and other economic priorities, which ultimately make us more
competitive on the world stage. And perhaps most importantly, President Biden has
advanced a plan to quickly distribute vaccines to households while also providing
a lifeline for the American economy.
Question. Beginning in 2022, an important provision of the code that allows for
full expensing of short-lived assets will begin to phase out. This provision has low-
ered the cost of capital for new investments and encouraged owners to invest back
into their own businesses here in the U.S. I believe it would be unwise to increase
the cost of capital and disincentive investments here in the U.S., especially as the
economy is coming out of a global pandemic. As we look at proposals for immediate
economic recovery as well as long-term economic health, I believe that allowing full
expensing could be one of the best pro-growth tools at our disposal. Could you please
elaborate on any views you have on immediate expensing as well as any other pro-
growth proposals you have to lower the cost of investing here in the U.S.?
Answer. You raise an important issue about the need for pro-growth tools as the
economy remains in a concerning position. If confirmed, I am committed to working
with Congress to strengthen American competitiveness and increase domestic in-
vestment. As discussed above, this includes research funds, a sweeping plan to bol-
ster America’s infrastructure, and investments in raising the productivity of Amer-
ican workers, who are the engine of research and development. Together these pro-
posals, along with those to eliminate incentives to offshore jobs, will make us more
competitive on the world stage. These and other proposals will be further developed
as part of the budget process, and, if confirmed, I look forward to continued con-
versations with you about the President’s legislative agenda.
Question. Even prior to this current pandemic, our economy was rapidly changing.
I share your goal of ensuring that Americans are prepared and have the skills nec-
essary to compete. Could you please elaborate on what role you believe tax policy
will play in ensuring Americans are prepared to compete in the workforce of the fu-
ture? Further, are there any particular provisions currently in the code that you be-
lieve are working well or could be modified to address these needs?
Answer. To ensure Americans are able to compete in the 21st century, we must
make higher education and training more affordable and ensure greater gender and
racial equity in the workforce. Tax policy can be one of several tools to help achieve
those goals—for example, by expanding access to education and affordable child
care. Without adequate child care and paid leave policies, many parents are unable
to complete the training they seek or are unable to take jobs that are most likely
to help advance their careers. Alongside investments in education and care-giving
and measures that provide family, medical and sick leave, incentives in the tax code
can help make our workforce more competitive. President Biden is also committed
to a tax code which rewards work, not just wealth, and such reforms are essential
for ensuring an economy in which all Americans can share in the returns to Amer-
ican competitiveness. If confirmed, I would look forward to working with the com-
mittee to identify ways tax policy could support workers seeking pathways for new
skills and upward mobility.

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QUESTIONS SUBMITTED BY HON. RON WYDEN
PUBLIC TRUSTEES

The two public trustees for Medicare and Social Security first signed a trustees
report in 1985. In the 35 reports since 1985, the public trustees have been vacant
for nine reports, or roughly 25 percent.
Will you commit to consult with the Committee on Finance and other stake-
holders before nominating individuals as public trustees?
Answer. Consultation with the Senate’s committees of jurisdiction and other
stakeholders is a crucial step in ensuring the right individuals serve in these impor-
tant, Senate-confirmed roles. It is vital that the public have a seat at the table when
it comes to oversight of the Social Security and Medicare Trust Funds and the cru-
cial benefits they provide to America’s middle class.
INTERNATIONAL COOPERATION

Question. The United States has long played a crucial role in the global economy
by confronting systemic challenges and working with like-minded partners to ad-
dress the tough problems. We know that the big stuff requires collective action.
At the summits like the G7 and G20, consensus-based statements reflect the col-
lective views of the United States and our allies on major issues such as monetary
policy, security, and multilateral rules-based trading. Rather than working with al-
lies to find areas of agreement and make progress toward addressing our collective
challenges, the Trump administration had a record of unnecessarily isolating the
United States on everything from climate change to trade.
Do you agree with me that it is critical for the United States to refocus our efforts
with our allies in the G7, G20, Asia-Pacific Economic Cooperation (APEC), and other
international fora to find solutions to the major issues facing the United States and
the world?
Answer. The global economy is estimated to have shrunk by more than 4 percent
in 2020, the worst contraction since WWII. An estimated 90 million people have fall-
en into extreme poverty as a result of the pandemic and its economic impact. Chal-
lenges of this magnitude need collective solutions in an interdependent global econ-
omy. I strongly agree that fora such as the G7, G20, and APEC offer the United
States critical opportunities for leadership and for promoting cooperative actions so
that the responsibility for crisis response and for addressing longer term structural
global problems can be shared with our allies. In addition, our actions at home to
promote an equitable and inclusive recovery will be more effective and yield greater
gains for our workers and businesses if complemented and amplified by similar poli-
cies and actions by our partners. We must lead and shape decisions in these fora
to promote global adherence to the policies, rules-based system, and financial bur-
den-sharing that will deliver shared prosperity, equal opportunity, and economic
justice.
CFIUS

Question. In its dealings with Huawei, ZTE, and others, the Trump administra-
tion has demonstrated a troubling willingness to put national security issues on the
table when seeking economic or trade deals from our trading partners. If confirmed,
as chairman of the Committee on Foreign Investment in the United States (CFIUS),
you will be responsible for evaluating the national security implications of specific
foreign investments and recommending whether to modify or reject them. In this ca-
pacity, CFIUS is intended to focus solely on genuine national security concerns
raised by a covered transaction, and not on other national interests.
Do you agree that genuine national security concerns should be the key factor
when determining whether to reject or modify a proposed investment? What steps
will you take to mitigate the risk of other factors, including geopolitical concerns,
trade policy, or other conflicts, influencing the Secretary’s decisions on CFIUS mat-
ters?
Answer. I think the CFIUS process plays a critical role in protecting U.S. national
security interests. The CFIUS statute sets forth the rigorous criteria that the ad-
ministration is required to use in assessing certain foreign investments in the
United States, and I pledge that the Treasury Department will follow the statutory
criteria in guiding its decision making in CFIUS reviews.

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FINCEN

Question. The last 4 years have seen an unacceptable level of politicization at
FinCEN. Treasury officials worked hand-in-glove with Republicans to produce infor-
mation intended only to smear President Biden and his family, while at the same
time slow-walking or ignoring valid congressional requests from Democrats. Under
Secretary Mnuchin’s leadership, I believe FinCEN was used as an opposition re-
search wing of the Trump campaign, undermining trust and confidence in the insti-
tution. I consider these abuses serious and unprecedented and plan to conduct seri-
ous oversight of the matter.
Will you commit to cooperating with oversight of this matter, and working to re-
store trust and accountability at FinCEN?
Answer. I have the utmost regard for the oversight responsibilities of Congress.
To that end, I commit to cooperating with Congress in its oversight of FinCEN, and
to working with you and your colleagues to build trust and confidence in FinCEN’s
important work and mission.
DIGITAL SERVICES TAXES

Question. What will be the Biden administration’s approach to prevent countries
from adopting, and prevent collection where a country has already adopted, digital
services taxes that target American companies? Similarly, what will be the Biden
administration’s approach to the ongoing OECD negotiations regarding taxation and
digitalization?
Answer. I am aware of the concerns U.S. companies have raised about digital
services taxes. I am committed to a cooperative multilateral effort to address base
erosion and profit shifting through the OECD/G20 process, and to work to resolve
the digital taxation dispute in that context.

QUESTIONS SUBMITTED BY HON. MARIA CANTWELL
Question. I share the concerns you expressed during your nomination hearing that
climate change poses an ‘‘existential threat’’ and support your plans to make the
Treasury Department a leader in addressing the risks it poses to our economy.
I understand that you have given several speeches, interviews, and signed onto
plans with other economists, business leaders, and advocacy groups in support of
carbon pricing. Do you continue to believe that an economy wide price on carbon,
applied upstream where fossil fuels enter the economy, is the most efficient mecha-
nism to decrease carbon emissions at the necessary scale and speed?
Answer. We cannot solve the climate crisis without effective carbon pricing. The
President supports an enforcement mechanism that requires polluters to bear the
full cost of the carbon pollution they are emitting. I am deeply engaged on this issue
and, if confirmed, will continually discuss my views and thinking with the President
and our entire team. President Biden has amassed a phenomenal team including
some of the most informed thinkers on this issue. We are all committed to doing
everything we can to solve this crisis.
Question. Do you believe that a predictable, market-based carbon price will incent-
ivize the markets to reduce carbon emissions faster and more efficiently than could
be achieved through direct regulation of emissions within specific industry sectors?
Answer. Senator, please see my answer above. Thank you.
Question. Do you believe that concerns over carbon pricing disproportionally
harming lower-income households would be addressed if the majority of revenue
raised was distributed back to consumers through equal per capita monthly divi-
dends?
Answer. Like you, Senator, it is very important to me that, as we work to solve
the climate crisis and move toward a low-carbon future, we ensure that American
families— especially the most vulnerable—share in the economic gains that can
come from a clean energy economy.
The President’s agenda includes investments in clean energy and energy efficiency
technologies that create good-paying jobs, and clean electricity standards that will
achieve carbon-pollution free electricity by 2035. If confirmed, I will provide advice
to the President regarding the best way to achieve his agenda, including his plan

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to achieve net-zero emissions no later than 2050, based on the principle that that
polluters must bear the full cost of the carbon pollution they are emitting.
Question. Do you believe the experience gained by the Treasury Department
issuing stimulus checks during the COVID crisis prove that the Treasury Depart-
ment would be capable of efficiently and cost-effectively issuing monthly dividend
payments to every American?
Answer. Thanks to hardworking career staff across the IRS, BFS, Treasury De-
partmental Offices, and other government agencies, approximately 160 million
American households received their Economic Impact Payments in an efficient and
cost-effective manner. This program was put in place quickly and was able to mean-
ingfully ease the economic pain of the recession for millions of families. We have
also learned from this experience. Some Americans have not been able to claim the
benefits to which they are entitled. These individuals are often the most in need
of assistance, and often reside in underbanked and underserved communities. If con-
firmed, I would be committed to improving tax administration in a variety of ways,
including the distribution of stimulus checks, and I would investigate the extent to
which investments in IRS IT systems could improve the taxpayers experience and
improve outreach to vulnerable taxpayers. I look forward to working with you on
these issues.

QUESTIONS SUBMITTED BY HON. ROBERT P. CASEY, JR.
Question. The 2017 tax bill eliminated the deduction for unreimbursed expenses
workers incur as part of their job—this means that police and firefighters were no
longer able to deduct unreimbursed cost of their uniforms or equipment. Truck driv-
ers could no longer deduct travel expenses and workers in unions could no longer
deduct the cost of their dues.
I have a bill, the Tax Fairness for Workers Act, to reinstate these deductions and
make the deduction for union dues above the line. It is a measure I hope will be
included in the President’s budget.
Will you commit to working with my office on this proposal which supports work-
ers and union jobs?
Answer. One of the guiding principles of President Biden’s tax plan is that the
tax code should reward work, not wealth. If confirmed, I look forward to learning
more about this proposal and working with your office on this issue. I would also
look forward to working with you and other members of Congress to advance pro-
posals to strengthen worker organizing, collective bargaining, and unions.
Question. Since Congress passed the Achieving a Better Life Experience Act in
December 2014, over 65,000 people with disabilities have opened ABLE accounts
worth more than half a billion dollars. ABLE accounts allow people with disabilities
save for their future while continuing to be eligible for Federal benefits; savings that
can lead to economic independence. Despite strong participation, ABLE accounts are
only available to individuals with an onset of disability before age 26, leaving out
millions of people. I have bipartisan legislation to expand the program’s eligibility
to people with disabilities acquired prior to 46 years of age.
Two questions: will you, in your role as Treasury Secretary, work to increase the
awareness and use of ABLE Accounts?
Will you commit to working with my office to enact the ABLE Age Adjustment
Act, which will expand the number of people with disabilities eligible to open an
ABLE account?
Answer. The Biden-Harris administration is committed to expanding opportuni-
ties and supporting financial security for people with disabilities. During the cam-
paign, President Biden committed to working to pass the ABLE Age Adjustment
Act, and, if confirmed, I look forward to working with you to increase the awareness
and use of ABLE Accounts.

QUESTIONS SUBMITTED BY HON. SHELDON WHITEHOUSE
Question. The IMF estimates that annual fossil fuel subsidies in this country
alone total more than $600 billion annually. Would you agree that until we elimi-

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nate or at least greatly reduce this massive negative externality, it is going to be
difficult to transition to a low-carbon economy?
Answer. Both the President and I believe we can turn the threat of climate
change into an opportunity to boost our economy and reinvigorate old and new in-
dustries to create high-paying middle-class jobs across America.
President Biden has a comprehensive plan to invest in the United States, create
a clean energy economy, and address the crisis of climate change. I am focused on
the President’s agenda, including investments in the clean energy economy, to ad-
dress climate change and create good paying jobs and energy efficiency technologies,
as well as clean electricity standards that will achieve carbon-pollution-free elec-
tricity by 2035.
I will provide advice to the President regarding the best way to achieve this agen-
da, including advice regarding his plan to achieve net-zero emissions no later than
2050, based on the principle that polluters must bear the full cost of the carbon pol-
lution they are emitting.
As we do this, we must ensure that American families—especially the more vul-
nerable—aren’t unduly burdened by increased energy prices as we move toward a
low-carbon future.
Question. Do you believe putting a price on carbon is one of, if not the most effec-
tive policies we can pursue in order to reduce emissions consistent with scientific
targets?
Answer. I am fully supportive of effective carbon pricing, and I know that the
President is as well. We cannot solve the climate crisis without effective carbon pric-
ing. The President does support an enforcement mechanism that requires polluters
to bear the full cost of the carbon pollution they are emitting. I am engaged on this
issue and will continue to discuss my views and thinking with the President and
our entire team. President Biden’s team includes some of the most informed think-
ers on this issue. We are all committed to doing everything we can to solve this cri-
sis.
Question. If confirmed, you will serve as chair of the Financial Stability Oversight
Council (FSOC). Would it be prudent for FSOC to conduct a system-wide assess-
ment of climate-related financial risks, including those related to coastal property
values and fossil fuel assets? Would it be helpful to create a climate-related finan-
cial risk subcommittee within FSOC to focus on these issues?
Answer. As you know, the Financial Stability Oversight Council (FSOC) was cre-
ated by Congress under the Dodd-Frank Wall Street Reform and Consumer Protec-
tion Act (DFA) following the Financial Crisis that brought the U.S. economy and
financial system to the brink of collapse.
It is the responsibility of the Treasury Secretary to strengthen the U.S. economy,
foster widespread economic prosperity, and promote an economic agenda that leads
to long-run economic growth. Meeting that challenge undoubtedly requires focus on
the current economy, but also requires a commitment to the building blocks of en-
during prosperity.
The Treasury Department has a wide range of responsibilities to meet these com-
mitments, on its own and through the FSOC, including monitoring and overseeing
various financial markets, administering our Nation’s fiscal policies, engaging in
international economic negotiations, and ensuring the stability of a wide range of
factors related to the health of the U.S. economy, including threats from climate
change. If confirmed, I look forward to working with you on this important issue.
Question. There have been numerous studies and reports documenting climate-
related economic risk. Much of the research and thought leadership in this space
is taking place in Europe. Will you commit to developing and promoting research
into climate-related financial and economic risks at the Treasury’s Office of Finan-
cial Research?
Answer. Congress created the Office of Financial Research (OFR) in the Dodd-
Frank Wall Street Reform and Consumer Protection Act of 2010 to support the Fi-
nancial Stability Oversight Council in its mission, among others, to monitor the fi-
nancial system for risks that could threaten financial stability. Assessing and moni-
toring climate-related financial and economic risk are important issues. If con-
firmed, I look forward to working with you with regard to OFR’s research into cli-
mate-related financial and economic risk.

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QUESTION SUBMITTED BY HON. MAGGIE HASSAN
Question. Members of this committee from both parties support protecting the
U.S. tax base during the OECD Base Erosion and Profit Shifting discussions. Could
you please share your plans to analyze the economic effects of OECD proposals on
different U.S. industries and your plans to keep the Finance Committee updated
throughout the OECD process?
Answer. If confirmed, I will certainly keep the Senate Finance Committee appro-
priately updated on the OECD/G20 negotiations. Any treaty arrangements would of
course require the advice and consent of the Senate. An analysis of the economic
effects of the OECD proposals is absolutely appropriate and I will look forward to
future conversations with the members of the Senate Finance Committee during
which we can share our consideration of these different effects.

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