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tv   Treasury Secretary Testifies on 2022 Budget  CSPAN  June 18, 2021 4:25am-7:06am EDT

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[inaudible conversations] the meeting of the ways and means committee will come to order welcome to secretary ellen for joining us this morning the hearing is taking place with a witness permitted to attend for remote committee proceedings pursuant to house resolution eight before we begin i have a few housekeeping matters with recently updated guidance members who are present are
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not required to wear a face mask or practice social distancing a fully vaccinated if not wear a mask and socially distance or participate remotely consistent with regulations the committee will keep the microphone muted those in the hearing room are responsible to unmute themselves seeking recognition or when recognized for five minutes third we will dispense with the practice of observing the two ongoing in order of seniority i will alternate between majority and minority for three minutes each to accommodate the secretary schedule. when members are present in the hearing they must have cameras on if you need to step away to attend another proceeding turn off your camera and your microphone instead of logging out as we
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begin to return to normal operations here in the house now that being said will turn to the topic of today's hearing fiscal 2022 budget secretary ellen. for the past year half we focused energy on responding to the devastation, economic uncertainty and tragic loss of life but about by the covid 18 pandemic. today we are meeting with renewed optimism with an eye to the future not just the next year of recovery but the decade ahead. we are in position to look forward for the leadership of president biden arresting the nation from the depths of the crisis this winter to pass the american rescue plan to deploy vaccine to put workers back in the jobs to support with additional rounds of stimulus checks now the administration is encouraging us to think long-term that lays out the commitments for the future and
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children's future. the administration's thoughtful approach to economic recovery is no surprise given the central role. secretary ellen is one of the brightest most accomplished policymakers it has been my pleasure to know during my time in government. the first person in american history to lead the white house council of economic advisers, federal reserve board and treasury department. someone's advice i've sought out in the past on many occasions and i'm counting on as congress embarks on this historic round of lawmaking. i cannot think of a more qualified person to be before us today. rebuilding the nation's infrastructure is a critical element to build back better and high quality infrastructure for roads and bridges and water systems electric grids continue to be the backbone of our economy infrastructure investment
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isn't just economic stimulus but workforce development and climate change mitigation building on members work the presidents america's job plan for tax cuts for clean energy and efficient homebuilding and many other critical investments i look forward to discuss these at the secretary matter how sophisticated that public infrastructure may be to fully participate in working to take care of their families at home that's why it's so important we have these infrastructure investments to support human infrastructure that are contained in the american families plan these are proposing making significant investments of the earned income tax credit that child and dependent care credit
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medical leave and childcare these programs a make it easier for millions of americans to balance work and family. i'm grateful to secretary ellen the treasury department and the irs for helping to get us to the last round of stimulus checks as they went out the door smoothly i know we can have the same level of precision and care with these vital initiatives. we should empower the irs to collect whatever taxes are owed there's no better bank than fully funding the irs for every one dollar spent on tax administration we return almost five dollars to spend on infrastructure investment and social programs. that's why the president's proposed to increase the budget of the irs to ensure compliance and administer new programs like the advanced child tax credit and improve customer service for all
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taxpayers. comments have indicated we have policy challenges facing this committee and it is in collaboration with your agency we hope to address the madame secretary. i am grateful for your partnership as we work together to build a greater economic opportunity for the american people before i conclude i want to know our colleagues on the other side of the aisle will present a different view of the reality today with many strong disagreements the biden administration was to increase taxes on the middle class even know that's not true. to say the biden budget when in actuality investing in infrastructure are poised to create millions of good jobs that pay well.
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sure they will say tax cuts are still the answer and are responsible for the liquidity the democrats provided with direct stimulus payments to prevent a worse recession to help businesses stay afloat by giving american consumers enough money with those simultaneously with supply and demand you will hear arguments inflation will spiral out of control and economist agree the price movements are temporary and will abate once the supply chain catches up the inflation bogeyman should not deter decisive action that president biden has called for. madame secretary you are equipped to set the record straight these claims arise and thank you very much for joining us today now we recognize the ranking member for the purpose of an opening statement. >> thank you secretary ellen
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leading the federal reserve and the joint economic committee i respected you then and still do although i disagree strongly of those policies of the biden administration i hope we can work together to improve retirement savings independence from china export technology protect the private taxpayer information of every american and find consensus on what isn't funded on the backs of working families. >> when it promised climate change i didn't realize you may changing the climate of the us economy by cooling off the jobs recovery but you have succeeded president biden inherited life-saving vaccines to reopen the economy trillions of dollars of covid stimulus but yet for the first five months of this year the biden administration added 546,000 fewer jobs than the
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last five months of 2020 half a million jobs short already a new inflation and real wages have declined since president biden took office it should be surging with the april may jobs report are disastrous mainstream businesses are struggling to find workers labor force participation the worst rate inflation is that a 13 year hire many americans fear the impact of high prices and slow growth economy when the sugar high from the stimulus dissipates president biden is sabotaging the job recovery the anti- business policy with mainstream businesses to drive american jobs overseas these are some of the worst economic policies in our lifetime justified with a false narrative that president biden himself all
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tax cuts went to those at the top this it earns for pinocchio's and among to live fact check in the left-leaning policy center. and with those offshore investment ways quickly debunked as well. and then to flee over the obama biden administration come to a dead stop actually the biggest incentive is president biden's own reckless proposal with tax rates will have one third virtually all claims of tax cuts american workers over the crippling tax
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increases. and then to rob the family budget of $20000 over time the green new deal including the keystone xl pipeline will destroy nearly a million and a half good paying jobs but you set up bases will cost 1 million jobs over the next ten years with crippling tax increases to make america an economic loser. spirit the liberal tax policy center will face the tax increase in 2022 rising to 95 percent in later years and
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then to create add tax-sheltered to protect from higher income and capital gains taxes the president is proposing so higher taxes on the wealthy and i went out for the wealthy the push is also an embarrassing admission by president biden with the tax increases to drive jobs overseas and it's better to be a foreign company in a foreign worker then american company american worker it is not a victory it's a strength and the bottom line america cannot tax-and-spend about our way to prosperity to help people be build our lives of endless government checks and will not recover with the largest tax hikes in a generation of mainstream businesses working families and family-owned farms with the white house leading a global race to the bottom of growth and competitiveness our workers
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who lose another way us companies jobs and research investment living overseas. i yield back. >> me point out without objection all opening statements are part of the record minutes an honor for me to turn to madame secretary we received your written testimony ask you some major testimony and keep an eye on the clock i will notify you when time is expired. please exceed. >> thank you chairman and ranking members of the committee. >> madame secretary more volume? >> . >> can you hear me better now? >> now.
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>> is a pleasure to be with you taking office in january confronting our economy was the pandemic those on the other side of the crisis to meet their recovery and things to this conference in the american rescue plan but we have to be clear eyed about something the pandemic was not only economic problem but only for a single american infected with covid-19 millions of people in this country going up against a series of long-term structural economic challenges to undermine the ability to make a good living. for instance wage inequality
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and healthy economies with distribution for those making the highest income and those making the lowest all of the highest earners as the any income grow with the distribution they see it stagnate. generational think gaps persist. at the same time labor force participation has been dropping even before the pandemic know what the workforce lagged far behind wealthy nations and this is with the reordering that for most of the 20th century they are catching up and rising together it is a
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divergence among the local economies and to be more prosperous as others are stagnating climate change on top of this the average change of disasters is expected to double every five years and of course there's racial inequality when i started to study economics in 1963 the average wealth was 50 percent of the white family maybe that isn't surprising jim crow laws were still in effect. but what is surprising almost 60 years later and that ratio has barely changed. these destructive forces of geographic regions decline with labor force participation in the persistence of racial inequality all of these are
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combined to block two more prosperous parts of the economy there are clear reasons with those types of investment and those that lead to higher wages and helping people be join the workforce and the infrastructure can spur growth in the communities. we have not done that not as much as we should we need ambitious fiscal policy and that this is a short summary of the presidents budget benefit that includes both the american jobs and families plan with the foundation of
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the economy through a series of smart policies including childcare some more parents can join the workforce modernization of infrastructure to reduce submissions and making education available to all and the list goes on. we need to make these investments at some point and now it is the most strategic time to make them we expect those payments will below the start to the coming decades we have a window to invest in ourselves. in fact the budget is strategic and fiscally responsible. it pays for itself with the long-overdue reformation of the tax code to make it fair with the vast majority of americans those making less
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than $400,000 a year there are some trade-offs in fiscal policy that this through structurally sound economy is not one of them and with that i will take your questions. >> thank you madame secretary im pleased to learn the united states supreme court has upheld the aca is a lot of the land we look forward to building on that landmark. [applause] and even more pleased to point out it was in / to each member will be recognized for three minutes to accommodate the treasury secretaries time we went to make sure everyone has a chance to at least one question following that statement madame secretary after the 2017 tax law appropriation tax revenue fell by one third proponents would
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increase investment and grow jobs that in 2018 and 2019 investment was largely on the same path it was before the law. would you describe who benefited most from the tax law and how policies with the benefit system from the american jobs and investment proposal quick. >> the 2017 tax law is about one.$5 trillion over a decade. that legislation goes from economic growth all of the macro indicators continue to follow trends that we placed before the legislation we felt the same thing before and after although the legislation
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didn't have the growth that analysis of the legislation very clearly provided the largest access with the income distribution. corporate shareholders were beneficiaries of those tax cuts. the biden administration tax and budget policy in contrast seek to provide a starker foundation for lasting economic growth the budget proposes posting in research and education and childcare, infrastructure, clean energy with that fundamentals to create shared prosperity.
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but in investing in the irs to improve compliance with tax laws. >> madame secretary you know my interest of labor participation rates we talked about it many times but the drop in labor participation for women how much of the drop in short-term economics is attributable versus longer-term mechanisms that underlie structural inequities and what particular proposals in the presidents budget best address labor force participation quick. >> thank you chairman neil —-dash chairman neil but that
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is partly that is something that reflects a longer-term trend in the us economy. coming into the pandemic we saw it gradually dropping over time with the slightest improvement prior to the pandemic that participation also in long-term decline but that was is an acute drop of labor force participation particularly for women. these trends are the motivation behind the policies like paid the van childcare
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that explains one third of that gap in the women's labor force participation between the us and other countries we propose paid family leave to help women stay attached to the labor force outcomes of the labor market for more equitable and subsidies for child care cost which we propose to extend beyond the american and rescue plan with labor force participation and employment among mothers and increase gdp growth. >> let me recognize the ranking member to inquire. >> thank you madame secretary i believe your cherry pick data is misleading at best stand flat wrong in many areas i will be concise if you will.
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listing the trade is a huge tax windfall for the wealthy and the shelter against the tax increases does the president support including the giveaway to the rich in the infrastructure package? >> the president has not made a proposal with respect. he recognizes it is a tremendous concern in a number of states and wants to work with congress to see if there is a way to mitigate the harms it has caused but he has not made a proposal with the budget to do so. >> does he support including that in the infrastructure package quick. >> it's not a part of the infrastructure past gauge. >> but with the president supported if it is in their?
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>> i will not negotiate here i know he's working with members of congress on a bipartisan basis. >> can you please confirm the greenback accuracy that president biden is planning to rollback the middle-class tax cuts on the jobs act to increase taxes on middle-class families by $20000 over time is the green book accurate. >> are you referring. >> to the rollback. >> in 2026. >> the greenback the rollback of the tax cuts in job sac is that accurate madame secretary? >> that is existing law. >> respectfully i think we all realize that was done in was
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senate reconciliation the senate has already passed twice as the president planning to rollback the tax cuts are middle-class families quick. >> he hasn't taken a position on what tax policy should be. >> the green book reflects that and me well check on that accuracy will the president signed the infrastructure bill that is not completely paid for? >> the president is looking to work with members on both sides of the aisle to pass the infrastructure bill that addresses the economy's needs and he himself has proposed a budget that is totally paid for and reducing deficits beyond that time.
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>> and respectfully i was hoping for a little more direct but again we welcome you here. thank you. >> let me recognize the gentle man from california. >> thank you mr. chairman for holding today's hearing and madame secretary thank you for joining us today. thank you for your comments on the green book i want to note it is the first greenback we have seen in four years. [laughter] madame secretary when it comes to pay for infrastructure one of the simplest and easiest and least controversial tools at our disposal is to make sure everyone pays the taxes they already oh. we know from the work the investigative press has done
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and your agency also that this is not the case just this past week we saw some revealing articles in "the new york times" about not only people paying their taxes but the use of waivers in order to create a convoluted web of partnerships to allow people to avoid paying their taxes we had a subcommittee hearing on this matter recently and i think everybody agrees that people need to pay their taxes. i'm pleased the president has put forward in his budget and 80 billion-dollar increase for irs enforcement over the next ten years and that's a lot of money. but the return on that many will benefit not only infrastructure but the economy
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and taxpayers acknowledge the system is fair. 's i would like to get your take on that and the use of fee waivers that allows private firms to treat them as capital gains. >> first of all the president's proposal with respect to the irs is a very important way to address what is a huge tax gap estimated at a loss of 7 trillion in revenue over the course of the next decade. the beneficiaries are largely wealthy taxpayers and the corporations that they own resulting in the inequitable tax system when workers take
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what they oh and others do not and what the budget is proposing with the $80 billion of additional resources first to make investments that have a large fixed cost like information technology with the data analytic approaches and those who can bring enforcement action with high net worth individuals and complicated corporate structures. the second piece provides the irs with information and then to give the irs sent
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disability with those income streams by adding two pieces of information for the financial institutions with the irs and this would include data over the course of a year. with respect to climate equity and the abuses that we see their the important aspect of the president's proposal is raising the rate on capital gains and if that's for wealthy individual high income individuals it is taxed which reduces the benefits of trying to turn into capital gains and
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in addition the president has proposed to get rid of the carried interest provision. >> let me recognize the gentleman from california. >> thank you madame secretary for participating in today's hearing. the administration's budget projection on inflation originally you project and will be well below 2 percent that we pass that figure was seven months ago. and then recently cpi came out having the rate at six.6 percent so what specifically did we get wrong to be this far off on inflation target? and just a matter of a few months? why did it happen. >> the administration's budget
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in february projected inflation during 2021 and two.1 percent. clearly in recent months inflation has been higher than that it's important to remember that prices really collapsed. >> .
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>> but if it ends at 300-dollar a month federal unemployment benefits program , we have roughly 9 million jobs that are open 9 million people looking for work there's not one business in this country that is not short of employees. and i hope the administration is aware of this in every single state. are you willing to stand here today to say it's time for the other 24 states that are still using the $300 surplus addition to the weekly unemployment benefit should this come to in and for the other 24 states that have not ended it? >> it is coming to when and in september under the existing law and states are in
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different situations. some states have extremely high unemployment that will likely want to continue to providing to people who are out of work. so states should have the flexibility to do appropriate for their circumstances but in any event that supplement will and in september. >> i yield back. >> to votes are now in the floor it is the intention to keep going with the hearing we will encourage members to vote and come right back i recognize the gentleman from new jersey. >> thank you mr. chairman. madame secretary you are here because democrats and republicans have respected your credibility on these matters regardless of what position you are in and i
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trust your credibility will continue to be excellent that only the american people that those of us who were elected to office. madame secretary, the 2017 tax can targeted my constituents my caffeine the state and local tax deduction at $10000. it is the oldest reduction on the books . . . . in the middlee
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fact of the matter is if the threshold is $10,000, you know better than i do that so far from what we had when we had total deduction. we have the case for and made the case for the full repeal of the cap. there is a disparate effect on taxpayers but when the administration's proposal came out, there's not a single mention. imagine the 14 states that are most hit by this.
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the populations of the states are very interesting and of course the politics of the states are very interesting. i had many ideas on paving for this and i hope that is not a major issue and i know we may not get the full relief. i know that. but the administration's silence on this makes my constituents worry. let me leave the word there. madam secretary, will you commit to providing my constituents relief from the disaster -- >> we will work with you when other members figured out what is the best way to go about doing that. >> thank you very much, madam secretary. i meant every word i said.
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good luck. >> let me recognize the gentleman and remind all that because of the schedule we are on a tight timeline. i want to welcome the madam secretary today. appreciate the opportunity to work with her. my two questions if i could get your thoughts on deficits and debt. do they matter? when i got here there were 8 trillion and we are closing in on 30 trillion to make the argument 30, 35 trillion. i think it is in moral what we are doing and at some point, common sense tells you we are going to implode tego you pay-as-you-go and i know i mentioned this is going to be paid for over 15 years and another. i don't buy it because i've been here long enough to know that usually never happens.
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a lot of us have kids and grandkids and i think we are doing with that next couple of generations is absolutely positively not right. i would like to get your comments on the deficits and debt. like i said, 8 trillion. what's your thought. >> the deficits and debt due matter. we need to have a responsible and sustainable fiscal policy and as the treasury secretary that certainly is top of mind for me. some of the metrics were historically used what is sustainable conditions have changed a lot and we need to
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take that into account in charging what responsible fiscal policy is. not just because the economy is weak -- >> let me jump into my second question or comment. the real interest burden on the debt is a very important measure of the cost to society i don't buy a lot of that. i see the reality common sense and i want to mention the proposal they are looking at the
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tax rate most entities as you know 39% in many states they have a ten or 15 or 8% tax and it's going to be 50% or more on a lot of small businesses. is that your proposal, is that the president's proposal to have tax rates including over 50%? >> the president has proposed releasing the top three for back to 39.6%. but the higher rate on the capital gains and dividends would bring it to the levels -- >> it only applies to individuals earning over a million dollars. >> there's a lot of companies i will tell you a lot of businesses in every state 39.6
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plus 3.8 plus 7.8 the 50% and above in terms of the impacting small business which impacts jobs. thank you and i will yield back. >> the gentleman from oregon. >> thank you, mr. chairman. madam secretary, we deeply appreciate your efforts and leadership and if you are concerned about how we deal with the overall economy. i would make one footnote here. i am concerned about what we do with escalating healthcare costs for the federal government. i totally agree with extending access, but if we don't have some cost constraint at some point, we are going to have some serious problems. i would commend the experience started in the obama administration in oregon with 1115 waivers that have helped us keep the cost of medical inflation gone and the metrics and work that's going on now in
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maryland. it isn't exactly a real house but something the administration should look at. let me focus on making the transformational investments in clean energy. for the repealing tax preferences for fossil fuels and advocates for the reinstatement of the superfund tax. could you talk about the importance of these provisions, particularly when paired with long-term extensions of wind and solar tax credits and the direct pay options pioneered in the obama administration with the recovery act? >> thank you for that question. we have seen no policy
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justification and the american job plan proposes to end the fossil fuel subsidies that would help reduce incentives for producing oil and gas. there is large potential job creation there. there would be many multiples for the fossil fuel subsidies. because there is a continuing need to fund the mitigation of
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damages the policy proposed to do so to respond to the existential threat of the climate change. >> thank you very much. i appreciate the opportunity. >> let me recognize mr. smith to inquire. thank you madam secretary for your service and appearing here today. obviously my time is short. i have many concerns with the president's tax proposals, repealing the tax and capital gains will hurt nebraska's farmers, ranchers and businesses at the absolute worst possible time. your recommended exemption won't have most working farms,
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treasury only stretch out the pain and we have seen in the past exemptions simply are not workable. i am concerned about the president's proposal to raise the corporate rates with the g7 g7minimum tax agreements which would undermine the success of the more competitive investment and job creations making the company's return profits from abroad and paid the tax on them. obviously, many concerns to expand the enforcement to the mandatory standing would harm the vast majority of americans who are law-abiding taxpayers most and that your protections for the revenue would collect overly optimistic in light of much more pessimistic projections at least your testimony is straightforward about your goals with no attempt
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to pretend the proposals are about raising revenue or restoring the growth to pre- covid levels. i know it is a topic that a number of senators raised with you yesterday as well and i share those concerns. on june 6th bloomberg reported that you said the following in an article, quote, we have been hiding inflation that's too low and interest rates are too low for a decade. you went on to say and this is not out of context that isn't a bad thing. it's a good thing. and i would ask unanimous consent to submit the article for the record. >> so ordered. >> we know inflation hits hardest to those that can least afford it already. lower income folks retire and so forth. has treasury done and an analysis of what the impact of inflation would have on lower
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income americans and retirees and can you explain why the higher inflation would be good for them? >> i would like to explain what i meant by those remarks. on average, if it does a great deal to justify why that is a sensible goal. i believe i have a strong basis from what i said. for much of the last decade inflation in the united states is run meaningfully under that goal and there are costs to
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inflation being too low, as well as too high and one of the costs is that interest rates have been at the levels and the fed has been forced to rely on the other unconventional policies for inflation and low interest rates and the ability of the monetary policy actively to support the economy so what i am supportive of is the fed targets and interest rates at a slightly higher levels that would give the ability to use monetary policy to address weakness in the economy. >> thank you. let me recognize the gentleman from connecticut to inquire.
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>> especially having to deal with covid and again to thank the administration for focusing on the science both as it relates to covid and this pandemic and also as it relates to the climate change. in the hearing we had on social security, one of our colleagues asked a question of the panelists that said what's better off, funding social security or climate change and the gentleman responded from what is that a trick question, we need to do both. and i commend this administration for understanding the need for us to address these and equities. my first question with regards to the 2017 tax cut. it was any of that paid for?
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>> no, it was not paid for. >> 2 trillion in tax cuts and i believe the statistics will bear out and 83% of the tax cuts are going to the wealthiest 1% in this country. clearly unfair and as you said in your opening remarks, covid had to be addressed but it also underscored in an existing problem that we had with regards to social security and specifically with women who as you acknowledge in your statement as well in the labor force and working hard predominantly women of color and black males on social security checks get a below poverty level
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check. i'm glad the president has signaled that social security is a sacred trust between the people and the government proposals that could be addressed bipartisan only. what do you say to that in equity that exists as you said social security is a critical system that workers in retirement and disabilities. >> thank you. i yield back. >> are you on the call?
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thank you mr. chairman and madam secretary for being here. it's time to be honest with of the american people. the modern monetary theory in my opinion has become the de facto policy of america and i am very troubled by that position. the president's budget spending and adding they are worried about the tax cut bill but your own budget has $13.5 trillion to the national debt. my question to you took issue with those that suggest you don't have to worry about interest rate payments. hosted in hong kong it's a very wrong minded theory because that is how you get hyperinflation so
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my question is yes or no do you oppose modern monetary theory. >> i would stick by what i said previously. on the other hand, it is the case that interest rates have been very low not just a recent phenomenon but something that has occurred over decades and that does matter to the sustainable level of care and what is a responsible fiscal policy and that is the point that i've tried to emphasize. >> i only have a minute left here. because you share a concern like i do and we are concerned as we see the numbers coming down and you recognize it is a scenario that can be resulted are we not in a position as a country facing hyperinflation as a risk
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to our stability and position as a world leader in the economic perspective and what are we doing about inflation to make sure that it doesn't become hyperinflation under the policy? >> i don't believe we are at risk of hyperinflation within several months of high inflation as our economy gets back in full swing to the pandemic and prices recover. >> why do we and the 3 trillion under president biden's own proposal? >> we are part of the pope proposing critical investments in our economy and in public infrastructure that will make the economy more productive and
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address long-term structural challenges to make it more resilient to climate change and we do higher participation. these are policies intended to improve the sanctioning of the economy and address inequities. >> thank you for your service. >> welcome and congratulations on making history being the first female treasury secretary in the nation's history but more importantly, you are the right job and skill set and we look forward to working with you and the administration as we emerge and make america even stronger. first couple comments and then a question on the minimum tax but my first comment i led a bipartisan letter with many members on the committee expressing concerns about the
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final brakes coming out of treasury involving section 199a the so-called glitch and we hope to be able to follow up with you and your team. as one of the original sponsors of legislation that created the opportunity zones i would hope with your health and the administration will make it work the way that it was intended there's a way of doing this and doing it well so we would like to follow up with you. also you probably read the op-ed that senators carper and corn kornmansubmitted to the "washinn post" titled don't see his leadership in the asia-pacific and their argument that i concur is we need to develop a plan or strategy to get back into the tpp which is now the
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comprehensive and progressive transpacific partnership trade agreement. the fastest growing. it makes no sense to be on the outside looking in and the structural reforms we are demanding china to make are contained in the agreement and at some point suspecting they will want to be a party of that as well so we hope to be able to work with you and the administration to develop that path to rejoin the tpp where we belong, and i think it is doable. on the minimal tax i congratulate you on the progress that you have made in the announcement that came out. obviously a lot more work needs to go into the reaching consensus to avoid the race to the bottom certain multinationals trying to become stateless in the modern economy and avoiding their fair share of taxation. how confident are you you will be able to develop the consensus to move forward on that basis?
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>> i'm very optimistic about it. we've taken a first step. i'm pleased to see the unanimity in the g7 that we should establish and that it should be at least 15% of i recently contributed to and op-ed and i was joined in writing that by the finance ministers of germany, south africa, mexico and indonesia. this approach is not confined. there are countries around the world who think this would be an important step forward to see a
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great deal of support. there are countries that have concerns. we have to address those but i'm hopeful and optimistic. >> thank you and i will yield back. >> congressman rice. >> i very much appreciate your commentary [inaudible] congressman, i am having a hard time hearing you. that is better. thank you.
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>> in the year before the pandemic we had the same [inaudible] [inaudible] the american rescue plan [inaudible]
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[inaudible] [inaudible]
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the gentleman's time has expired. >> thank you so much, madam secretary. first, madam secretary, the discussion you had about opportunity zones the treasury is interested in supporting how to assist the opportunity zones
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to get into those areas that need it most. they've already had the tax credits and support of others to expand that and underserved the community is so i'm grateful for that. another area that i wanted to talk with you about is when we talk about areas with unique challenges, the virgin islands and other areas. for the lack of natural resources and the small island limitations on scale. it created a tax on the investments in the u.s. territories as a result of the
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guilty provision because the u.s. territories, corporations are considered corporations we in fact had an unintended consequence of having those companies have a detriment to being in the virgin islands. the exclusion for the first 10% we are concerned that this will have an even greater impact on this incentivizing company to come into the virgin islands and puerto rico and the other territories because of this guilty provision. and i'm asking if you will commit to working to develop appropriate resolutions to this issue including the investment in the territory while at the same time making sure they are
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in fact good actors. >> it's a complex issue and we are going to see if we can find a constructive approach to address this concern. let me recognize the gentleman from arizona. thank you mr. chairman. adjust quickly because it is getting quite old, the 83% comment for the top 1% i would like to submit to the record the
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actual facts. madam secretary, we have been doing a project at our own office. they didn't line up and now that we are seeing some outside groups. from the tax hike that many as the revenues would cover about half spending proposals and knowing your commitment that you intend to cover all the new spending with new revenues and receipts. how are you going to cover that.
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it wasn't a part of the budget or the american family job plan. the scoring that's been proposed for the parts of the proposal is less than our scoring. the tearing of the three-minute clock and we all have to live by the joint tax scores that's how
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you move towards reconciliation. some of the scores coming out actually only gave you almost one third of the revenue calculations under the capital gains tax and lost 33 billion. you are nowhere near covering this increase in spending and made a commitment that you are covering the spending. we've proposed a series of spending proposals and tax changes.
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with that i yield back. without objection the reference to an article will be included in the record. let me recognize the gentleman from texas. thank you mr. chairman and madam secretary for an extraordinary bit of leadership in trying to stop the race to the bottom some colleagues have suggested perhaps those that are indifferent to the tax avoidance and how can we set the rate higher than the global minimum tax without putting the american corporations at a competitive
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disadvantage. the tax proposals raising country by country with a global tax of at least 15% to get between the tax on the foreign earnings and imposed by other jurisdictions will actually be narrower with a guilty of 21% and the gap is today the global minimum tax. we would have a narrow gap than we have today and i think it is clear from the experience of the last couple of years that even the larger gap created by the
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2017 act hasn't been a big impediment for the u.s. firms. so moving towards the higher rate domestically we will motivate and give ambitions to other countries to move fire as well. >> overall in your revenue proposal is in the object of not only to avoid more national debt with respect to compliance with the existing tax code i think it is extremely unfair they are largely complying with paying the taxes they are due and the income individuals and
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corporations and tax compliance have streams of revenue that are less well captured by the irs and compliance far lower and we think that it's critical to bring that in addition to taxing income from capital dividends and capital gains at lower rates than workers face on their wages. thank you for being here. one of the things i want to cover with you is the safety of tax information.
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what they are putting out for people to see a raise is a tremendous question in the american people's minds. the idea this could be taking place we have 15 years and thousands and thousands of these things we could reveal. there should be an absolute outrage. can you tell me on what basis any american can be confident that their tax information is not going to be published given that we don't even know how this happened and it looks like it could be only one source of that i would suggest coming from the inside of the irs but your opinion you are going to call for that, to. >> we can't tolerate at the the disclosure of the confidential
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personal data for the inspector general in the department of justice, the irs commissioners looking into this. because we are on such a sort of schedule i've seen this happen and so have you. i haven't seen any type of investigation that led to anybody being prosecuted. our outrage and so what are you going to do about it but the answer is nothing. if you tell me there isn't a double standard you will have to come from a completely different angle. one thing i want to cover with you and this is incredible we have expanded our money supply
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by 180%. now we are talking about trillions more and i would say. to see how this is accelerated since january and today they would swear that there's somebody out there counterfeiting 24 hours a day, seven days a week filling our economy with money no longer worth anything. being caused by the fact what we are putting out is no longer worth. and that is one heck of a thing to be facing. we are putting ourselves in a very dangerous position of saying yeah, right. it's showing the money supply and the incredible amount of new
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money that is entering every single day. at some point we have to say i don't believe the price -- i'm a car dealer. nobody could tell me if you hang onto that it will be more, not less. for the business in general i appreciate you being here today. we should have a deep investigation for what took place in the tax return. >> thank you, madam secretary. to take an act to ensure we have the ability to provide for and care for the families.
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the permanent modernization of the child tax credit. in addition, i raised the importance of three others tax credits. they spend at least 30% of their gross income on rent and utility. but only have a limited number of family and the eligible taxpayer afford housing. the disadvantages.
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it's refundable during the great recession. to help millions of low and middle income families and to ensure that billionaires pay their fair share of taxes on the hundreds of millions. madam secretary can you speak about the administrations boldness to enhance the responsible tax credit to help struggling workers and families. >> sure. let me just say on housing affordability we absolutely recognize as a key challenge and we've made proposals there to expand low income housing tax
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credits that help address the supply-side of the problem and on the demand side we would be interested in working with you on the kind of proposal that you've made. you mentioned ideas on the adoption of the tax credit and the american opportunity. those are also important on areas that are a priority for us and we would like to work with you on those as well. in terms of education support if you look at the presidents set of proposals in the budget, to support education and two years of community college there's a major increase in pell grants.
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thank you, madam secretary. we've heard president biden and pelosi and the democrats repeat over and over in a budget statement of one. it's very clear his administration values the dependence on governments and getting washington greater command and control over our daily lives at $17 trillion for the national debt. a skyrocketing and unsustainable levels. a sentiment you shared as recently as february, 2020, mr. secretary. it failed to support small businesses and promises to raise
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taxes on low income hard-working americans, but the devil is in the details. once we get past of the astounding level we see that this budget weaponize is to target americans, the $80 billion in the funding would add 87,000 agents more than doubling the size of the agency. i can't even imagine the violations of the american's privacy that will undoubtedly be heard. i wouldn't be surprised if it is something similar to the actions that took place under president obama. in case anyone has forgotten used her role as a director of these organization units to target and discriminate against of the groups based on inappropriate criteria and including the names and
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principles. when congress started asking questions, she covered it up, destroying 422 backup tapes and over 24,000 e-mails. she faced zero repercussions and was rewarded with a zero pension inspired by the lack of consequences last week we learned employees had a tax returns of build support for president biden's political agenda. think about that. for the second straight the democratic administration we had an employer with personal tax information for political persons. given the willingness to target conservatives it's scared everyone who opposes the president and so adam sec., has anyone been held accountable for this breach. >> i'm sorry, we didn't find
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anna irs employee is responsible for this information becoming public. we don't know what happened, and we are investigating and we have referred this matter as an extremely serious matter and we have referred it to the independent investigative authorities to figure out what did happen but we have to be very careful not to jump to conclusions. >> let me recognize the gentlelady from california to inquire. thank you for joining us today. it's going to take a long time to heal from the devastation of the pandemic and unfortunately we can't wave a magic wand nor should we because the communities i represent if we
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tried to step back to the normal. the major investments they need to make in their roads and water systems. i'm glad to see the president's budget makes sure we cannot miss this historic opportunity to move the country forward in advance.
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can you explain why it's better to keep working parents attached to the workforce. so we have the talent and the workforce that we need to grow and it's also important for women that they have the opportunity to realize their potential. for the childcare and paid leave than do in the united
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states one of the reasons we've been so worried about the pandemic and the effects particularly on women dropping out of the labor force would write about the potential that's the rationale for many of the proposals. the gentlelady from indiana to inquire. >> we saw the rapid unemployment
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with no signs to get americans back to work so many states removed the verification measures to speed up the processing of benefits and this made it easier for the international crime syndicates to file a claim using stolen ideas and taxpayers to the tune of hundreds of billions of dollars and millions have had their identity stolen. my understanding is they've instructed to zero out the forms that are confirmed as the result of identity theft. states should then send the reform from the unemployment benefit for the taxpayers by concern the irs will not keep track of how much we are talking about. can you tell me how many state
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agencies including those. >> i do not have an answer for you. i will look into it and get back to you on that. >> is there any record keeping going on resulting from unemployment fraud, who is keeping track of this? that is my concern. this whole issue is being addressed by the agency task force and promised to look into it carefully and get back to you with more details. >> see you can't just tell the states -- somebody is really keeping record of this? this is $400 billion now. >> it is a significant issue. i agree with you at about that.
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>> thank you very much. i will yield back. >> the gentlelady from washington state. >> thank you, mr. chairman and madam secretary for your testimony and for coming before the committee today. i am very thankful to see the attention and strong commitment the administration has made it to address the affordable housing crisis much more is needed and bold action so we can truly tackle this a growing crisis. i've been leading the effort in the house to expand and strengthen the housing credit through the bipartisan improvement act together buyer
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and wenstrup. the affordable housing would allow us not only to build and preserve affordable housing which is increasingly important not only for residents of the communities they live in. it would make more than 2 million more affordable homes available in the country and specifically in low income, rural and tribal communities. our legislation also includes several roles and building more affordable homes and high opportunity areas. for example it would lift the cap on what areas can currently be designated as difficult development areas that have been high cost and relive to the area of income to allow for the development by giving critical projects a basis boost and more equity to invest in affordable housing. our proposal would prohibit approval of the contribution requirements that have allowed not in my backyard or the in the opposition that have derailed affordable housing development
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and the proposals are complementary to what the administration has proposed while having the benefits of broad bipartisan support in congress. last congress our bill had the bipartisan support of more than half of congress so that momentum continues to grow. given our broad consensus of support, madam secretary, i hope the administration would be willing to support our proposal so that our in the affordable housing improvement act to increase the mutual goal of creating more affordable housing. we have a tremendous opportunity to make progress on this issue, and i hope that you will help us. >> well, first of all, let me thank you for your leadership in this area. it's very important. it is a key goal to improve the affordability of housing and he
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is proposed in the budget a significant increase in the low income housing tax credit. you know, there is also a proposal that has resulted in the revamping of the housing units. but we would like to work with you on it. >> thank you. we have bipartisan support so i hope you will work with us on our legislation and i will yield back. >> the gentleman from illinois, mr. lahood, to inquire. >> thank you, mr. chairman. secretary ellen, welcome. i traveled across my district in the last couple of weeks and what i heard consistently from my small and medium and large businesses is the lack of workers. but let me just talk a little bit further about that. the manufacturing in quincy, illinois can hire 50 new welders tomorrow. that in illinois looking for
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truck drivers and a restaurant in peoria, illinois, and find enough waiters and waitresses or cooks. opens and assigns meat market in peoria heights could hire numerous people at their operation there. consistently throughout my district, small, medium, large businesses, family owned entities can't find workers and there is a collective frustration with them as they compete against of the government. when i talk about competing against federal government, it relates to the unemployment insurance and the fact that we are this incentivizing work when it comes to finding people to fill these jobs. on why they can't get workers to fill these jobs because of the unemployment insurance. i think that there are many reasons why firms are not seeing
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the labor shortages. it's not only a matter of the unemployment benefits on childcare and the fact that schools are on normal schedules remains a significant barrier for many families and we are really only now getting up to vaccination rates that many people have felt uncomfortable with.
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in the penalties for failure for jobs. >> let me make my last point here. they are ending in september and states have. >> all i would say is that statement to my small business that doesn't mean anything to them. >> let me recognize the gentlelady from california to inquire. treasury has provided unprecedented amount of relief over the last year. first round to the advanced.
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however some have difficulty using those. how does the 2020 or 2022 budget increase this technology and capacity for more physical checks for taxpayers if not an option and the technology to give taxpayers choices with such payment methods? >> you know, the main goal of the fiscal services is to try to pay people by direct deposit and they were distributed in that
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way with the checks and also we have the appropriations for the irs and for the limitations as you mentioned on the capacity to print checks but we would like to see the direct deposits. >> to see the assets to their long and large established payment protection program as congress tries to keep it afloat during the pandemic. however, including the subsequent rounds are so critical in these underserved businesses and communities and
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we know that [inaudible] how does the budget request support the small businesses especially as we look to rebuild the economy after this pandemic? >> it proposes additional it's in a better position to be able to support in the important work that they do but very importantly, in the act that was passed in december or january there's a huge infusion of the funds into the cdf eyes, roughly $12 billion for direct support and grants and very importantly for the equity capital that we are moving forward on with the
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treasury right now. this would vastly increase their capacity and it's an important change. we are now in the midst of a ratio consistent with committee practice, so the chair will recognize the gentlelady from wisconsin to inquire. >> thank you so much, mr. chair. i do want to join the others in thanking the secretary for taking so much time with us. i really appreciate the american family plan that the president is putting forward and i do appreciate the changes that we have made it to the child tax credit and the earned income tax credit and i hope that we will be able to achieve a permanent change to advance those payments. i brought the subject up before as we try to level the playing
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field for those dropping out of the workforce at precipitous rates as you've indicated earlier in your testimony, i wonder has the administration thought about the $522 billion of uncompensated care that people provide to their relatives, 10,000 people turning 65 every day. all of them are not in nursing homes. they are in homes being provided care. $522 billion, 30 billion for free care. when we start talking about the people that are exploited, who are they. primarily i think that might explain some of the low participation rates. i had a proposal to the expand the earned income tax credit to include the uncompensated care.
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it's a lot cheaper than if we imposed it on medicaid for example. unskilled care, having people come into your home under medicaid is $220 billion a year and then the skilled nursing homes just because -- i wonder if the administration will work with me on this what i think is an important thing in leveling the field for women and while we are on the topic i just want you to respond to whether or not the administration is willing to work on the domestic violence replacement check or the eip and i would yield for your answer. >> we would very much like to work with you on both of those things. the idea of extending is an interesting one. our plan, the american family
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plan does extend to workers without children, but there's undoubtedly more to do and this is a very important area so we look forward to working with you. >> and on the payments to domestic victim violence -- thank you so much. i will yield back. let me recognize the gentleman from texas to inquire. thank you mr. chairman and madam secretary, congratulations and thank you for your service to the country. we only have three minutes. i love the dialogue a bit in the interest of time i'm going to share observations and deep concerns about the president's and this administration's massive tax and spend proposals. i would say taken all together it is a major surrender of america's economic policy. it's a fundamental retreat from
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the policies that gave america unprecedented prosperity and i know you know well all the metrics, unemployment, record wage increase, jobs coming back to this country overseas as a result of those incentives and taken together, this is a unilateral energy disarmament. we will enrich and empower the likes of russia and china who are expanding their conventional fuel sources and supplying that energy to our allies. i'm deeply, deeply concerned with the largest expansion of government redistribution of wealth and transfer of power in the history of the united states of america. you mentioned a couple phrases i would like to key in on. one was a stronger economy and the other was fair tax codes. let's start with a strong economy. i don't think americans have to have a phd or be experts in monetary or fiscal policy to
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know when you subsidize people to the point instead of going back to work there is no surprise we have a labor shortage. we can't get people back to work. small businesses are suffering. we are spending our way into debt beyond unsustainable and we are seeing runaway inflation and there is a direct result to the massive reckless spending that we have seen. we are also full on assault now on our bread and butter and our lifeline and the lifeblood of the economy in terms of oil and gas and is driven by climate radical alarmist audiology. it's not balanced stewardship of the environment and economic growth by any stretch and everybody is deeply concerned about that especially my oil and gas producers that give the nation not only the greatest economy in the world and at an affordable clean supply of
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energy but also energy independence. let me key in on fairness in the last remaining seconds. i have a message from west texas and my family farmers, madam secretary. they do not believe this is fair in any stretch. what you're going to do if you pass this, double the capital gains tax, you will have the largest fire sale of farm equipment and farming operations in the history of the united states. they simply can't afford it, madam secretary. what do i tell them about the fairness of the tax code in that regard and i will yield back. >> i think the gentleman. let me recognize the gentleman from michigan to inquire. thank you, mr. chairman. thank you for being with us. i have a couple areas i want to ask about but before i get to that, i've heard from my state officials that because in michigan and other states, state
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legislatures have two appropriate all regardless of their source. the legislature drags their feet and they are now only getting round to appropriating the rescue plan dollars, so i would ask that you work with those states to make sure if there are extensions required that they be granted so they can get those dollars out. the areas i want to address one has to do with something you and i have talked about in various roles that you've held and that is chronically distressed communities. i've been working on a revamped trade adjustment assistance for communities proposal with two parts. one deals with direct government support and technical assistance for communities to prepare and economic redevelopment plan and fund certain activities related to that and second, targeting the tax credit for investment in those most highly distressed communities. your testimony focuses on inequality in the economy and i
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believe that there is economic inequality along the geographic and basically on the basis of the place so i would hope we can work together and i would love any comments you have as to whether you are open to the tax credit for the most chronically distressed communities and secondly, as we have discussed previously as well, i am imploring that the administration work with us to work for an equitable resolution for the delphi salary retirees to get their intentions. as you are aware as the result of the general motors bankruptcy proceedings which the u.s. government had a significant role in, the delphi salary employees lost in some cases 70% of the earned income pensions benefits. this is an issue that needs to be resolved and has resulted in tremendous pain for these families and i would ask you work with us to try to address that and if you could comment on those issues i would appreciate it.
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>> sure. starting with the delphi issue i know there was a serious impact and that the retirees haven't really been helped by other benefits that have been cast for example for the employer plan so we would look forward to working with you and discussing what can be done. with respect to the distressed communities, this is a critical priority for president biden. there are many, many pieces of the proposals that are in this budget that would attempt to address that issue creating greater opportunities and particularly opportunities targeted in distressed
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communities or low income communities. we have proposed a tax credit for that. but we would certainly be happy to discuss that with you. >> let me recognize the gentleman mr. boyle to inquire. >> thank you mr. chairman and secretary for being here. i was very pleased in your prepared statement to read and listen when you said and to paraphrase you that while covid-19 created a number of problems that there were problems that existed prior to covid-19 and in many ways the pandemic showed a spotlight on those pre-existing issues. so, towards that point i believe perhaps the single most vital accomplishment of the american rescue plan was what we did on the child tax credit, so i'm very happy to see the fy 22
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budget proposing to make those refundable tax credits as well as the others permanent. can you please talk about why that is so necessary in this country and a reminder that what we just did will cut child poverty by one half, by 50% in the united states of america? >> you just gave the most important statistic showing why it's important. child poverty is incredibly high in the united states and this is a targeted approach that has the potential to really address that. as you mentioned, the support that was provided to the child credit in the american rescue plan is estimated to cut child poverty by 50% and of course president biden was to see that extended so that if a core part
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of his proposal. >> thank you, madam secretary. >> i'm sorry, didn't mean to cut you off. in the minute i have remaining what we now perhaps do something very stupid and defend the irs. while i know the tax collector hasn't been popular at any point in human history, it is obviously a very necessary and important public service dedicated as the irs perform. i was quite struck when the commissioner gave such a high figure in the recent testimony i think over on the senate side about the amount of taxes that go uncollected. could you offer your thoughts? i know that this is a very hard number two pin but if you were to offer a number of how much tax is owed but isn't being collected not because of legal avoidance but because of other
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underpayment issues. >> the estimate that i tend to use is $7 trillion over the next decade in the tax cap the commission cited numbers and possible estimates that are even higher than that. >> let me recognize the gentleman from georgia to inquire. >> thank you, mr. chairman. madam secretary, glad to have you with us today. a couple quick questions. can you share a list of the businesses that will be in the scope under the foundation and can you talk about whether or not you think more than half the companies listed will be american companies and how many chinese companies do you anticipate being on the list? >> what's being discussed are
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companies with sales i believe the cutoff is 20 billion and they would be u.s. companies, chinese companies and other companies. >> i understand that, but surely on a proposal this large you would have some idea of the number of the companies and number of chinese companies that would be there. if you would simply commit to giving us those numbers so we can look at the data as well, these are major decisions and we need to be able to make informed decisions on that and so far, we haven't seen what is behind the curtain and i don't think that it's right for the administration to do that without congress having full view of the numbers and the data. second question i have for you. the fed has raised their forecast on inflation for 2020. it's going up.
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you've talked about this being transitory, kind of an interesting term here. but it doesn't feel transitory to families paying higher prices for groceries and gas, housing, housing affordability is becoming a question for way too many american families. can you give a timeframe of when this transitory inflation will end? >> i certainly can't give you a clear date. we are watching this very carefully. several months inflation has been high. we have an economy that came close to shutting down. >> but madam secretary, reclaiming my time here if it's transitory, then that gives an indication that you have clarity on the timeline, but you don't. one final question in my limited
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amount of time. talking about the oecd and how it disproportionately affects american companies, why in the world would we be saying i'm going to put this in simple terms, why would we be taking taxpayer dollars and money generated here in the u.s. and transferring it to europe to fund their social programs? that doesn't make sense. shouldn't we be looking at increasing revenues for americans and not other countries? >> the gentleman's time is expired. a brief answer, madam secretary. >> i think that the global economy has changed substantially in ways that the source of income and residency of corporations is not clearly the proper basis for all tax
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collection decisions. >> let me recognize the gentleman from virginia to inquire. >> thank you mr. chairman at andmadam secretary for coming te with us. my republican friends keep making these empty arguments that because someone somewhere illegally was able we should give all american businesses and exempt pass on paying their fair share. freedom is not free. i've been a businessman more than 45 years. is there any reason my family business should have a lower requirement that you or i or any others and what would be most helpful in improving the enforcement? >> the irs needs insight into streams of income that are
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currently opaque. there isn't reporting the w-2 or the 1099. according to our analysis, if the financial institutions were required to report directly to the irs, two additional pieces of information in addition to the interest earned on an account if they produce information on the aggregate annual inflow into that account and the aggregate annual outflows, that would be significant additions and wouldn't require very much reporting at all about an individual's transactions but it would be a significant help in identifying where there is possibly income that hasn't been appropriately reported.
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>> with illegal money-laundering as an aside the president's proposed multinational corporations be required to the liability on a country by country basis so they can't have the high income tax restrictions. some of the companies we talked to said it is complex and the prophets in one country could be offset by the losses of another. how do you respond to that concern? >> i think it's a very important provision to change to go to a country by country calculation because allowing u.s. companies to blend their income from different countries creates a kind of america last problem that companies are incentivized to go to low tax jurisdictions
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and high tax ones since they can blend the two streams. i would say the companies are already compiling the information that would be necessary to do this on a country by country basis, so i believe it is entirely feasible and practical. >> thank you very much. >> let me recognize the gentleman from pennsylvania to inquire. thank you mr. chairman. madam secretary, we must ensure that our tax code addresses the community needs as the representative talked about. the rehabilitation of schools act would allow those to qualify with school education facilities. i would like to ask you this. i appreciate the president's budget includes investment in public school infrastructure. what are your thoughts on the
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nation's public schools to address historical tax credits under the rehabilitation schools act? >> certainly that something we would be happy to discuss and work with you on. this is an important issue as you know the president's budget does contain money for the rehab of schools, something we would be happy to discuss. >> thank you. i will yield back my time. let me recognize the gentleman from kansas to inquire. thank you mr. chairman and madam secretary for your time. i will say a couple things and then dive right into a couple of questions. we had a great economy before covid started and there were a lot of things going right.
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i really want to make sure we emphasize remembering that we had growing wages across the scale particularly low and middle income folks. we had increased wages for minorities and high school graduates and an online school graduates and that is a big positive that we need to get back to and continue that process which was actually closing that wage income gap that's so important in the country. you made a comment in reference to how important that is. let me go into a couple of questions in the interest of time. i really have some concerns about this and i know there are some comments earlier about taxes and how much we should pay and obviously we have taxes because we need to fund the critical role of government but this is an issue that really does put the entire credibility of the department in your area
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of responsibility and risk and the entire credibility there. i want to ask you one question around that is will you seek criminal charges for anyone that releases misinformation whether the irs were treasury employees or if somebody took information from the irs and released it out into the public. >> i believe this is a criminal violation, and of course we would support whatever law enforcement finds appropriate to do. as i mentioned previously, we immediately referred this to independent parties, to the treasury inspector general and the doj to look into this and this is something that is illegal and yes wherever it
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occurred it is appropriate to pursue actions. >> thank you. just quickly another question going to the global tax proposal that's out there i have some major concerns for the u.s. competitiveness, job opportunities for americans by taking tax money collected by the federal government and allowing it to be taken to other countries and particularly with this negotiation already at the point where there's exemptions and carveouts being requested and we already know bringing up demands for carveouts and luxury goods, china is as well. how are we going to put in a policy that still helps other countries? >> it's going to take money away from the united states. we are going to raise to reapply to the foreign income and we would like to see the foreign
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countries doing exactly the same thing. >> i think the gentleman. we now are, as advertised, if members adhere to the questions that we talked about in terms of the three minute limit, it would satisfy the secretary's time and everyone will have a chance to inquire. the gentleman from illinois is recognized. >> .. >> we know the economic recovery from the pandemic leaves many behind including businesses that are permanently closed their doors are women who left the
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workforce for good. secretary ellen, for the small business owners who had to close their doors for good, what can we do to help them get back in business and what resources might help them get reopened? and for the women who left the workforce completely what can we do to help bring them back to give them the opportunity to continue their career or start their business? >> we try to get ppe ostp loans out to those business and we continue to have policies to provide small business loans and credit initiative really most important is to get the account one - - the economy
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back on its feet and then to open up again and other small businesses so then to run profitable businesses and i think we are seeing success there but for those in the workforce similarly we tried to direct a good deal of relief for those who are unemployed but the child credit in the economic impact payments and those proposals are to build back better so
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some of those policies stay in effect and then the women could stay in greater numbers going forward. >> i appreciate the focus other presidents plan and i look forward to working with you on that. >> thank you madame secretary you and your team made a ineffective and persuasive argument we need a global minimum tax. there is a race to the bottom businesses and people are fleeing higher tax countries like the us for lower tax countries when people flee the us we have less tax revenues available for infrastructure healthcare and climate change. my understanding that one of
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the goals is to mitigate the international pressure from tax competition is that pretty much correct? >> absolutely. we want to make sure that other countries don't lower taxes to attract businesses. >> i would argue we have a problem that needs to be addressed with a domestic tax competition as well he talked about the need to try to mitigate some of the harms of the salt cap that is hurting my state and other high tax states in the united states the top ten make up one third 115 million people. people who live in new york where i am from new jersey, massachusetts, californa connecticut and illinois we have higher taxes because we
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have lower rates of uninsured children we have higher union involvement, we pay teachers and workers more. we are competing where they have the highest rate of uninsured people at low rates of union workers because of right to work states a mass transit system that are high-tech that have the lowest carbon footprint where lower tax states it will have mass transit or sewers. they don't regulate utilities and when it gets cold the utility shut down because they are not regulated. we need your help to mitigate the harms as you said earlier, mitigate the harms caused by the salt. i know we will not negotiate that today but i just want to argue there is our logical
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consistency between your efforts and something i support strongly to stop the international tax competition to try to mitigate the harms with a global minimum tax we cannot have a global domestic tax but we can address the global competition the high tax and low tax states were lower services we can mitigate that with the salt the direction. >> thank you mr. chairman and for your time here today it's a pleasure to meet you and look forward to looking at your team in years to come what i heard about the economic impact i felt we may live on different planets in my district the constituents appreciated the impact of the wage increases for middle
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income households and republicans put money back in the pockets of hard-working americans and by the way nonpartisan budget scores even liberal think tanks found that is true every income group received a tax cut the left-leaning one - - leaning tax policy center was $780 that they say the biden plan would result in 75 percent of middle income families facing a tax hike in 2022 averaging $300 per family and went on tuesday by 2031, 95 percent will have higher taxes. $500 on average. so can we agree that the biden
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plan to let taxes increases the last thing americans need? >> with any family making less than $400,000 and he's living up to that pledge i would not agree there are tax increases proposed. >> for the record i want to ask in additional question but the pro problem on - - pro public release i find appalling that they refer to a true tax rate which would measure unrealized capital gain or wealth against reported incomes that would be a wealth tax. this by the way has been introduced in the senate senator warren has introduced
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a wealth tax so do you agree with senator warren's wealth tax quick. >> we propose a different approach resulting in higher taxation of capital gains for individuals and then would step up the basis which is a way of escaping the capital needs. >> the gentleman from california. >> thank you mr. chairman i do believe our country is lucky to also known as experience and accomplished as a policymaker as you.
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to have you at the helm of the treasury in have your hand on the wheel so thank you for that. thank you will agree the response to the pandemic has been remarkable. i do believe because of our efforts, especially the american rescue plan the economy can avoid scarring when consumers are ready to spend again that's why as we recover from the pandemic we should not hesitate to make long-overdue investments in infrastructure environment and families. but as you will agree we have to do it carefully and monitor the economic conditions to ensure the indicators of inflation are transitory. interest rates are low government borrowing is cheaper you will agree it will not last forever. the federal reserve expects inflation will be three.4 percent this year a
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four.higher than march and higher than the federal reserve target however the fed chose to keep interest rates at zero with the chairman power all noting this could be due to a large rapid shift of demand and the fed has the tools to deal with the more persistent inflation. the chair also noted some price increases such as lumber and used cars are due to temporary shocks looking at the prices yesterday he may be right looking at inflation this year how much can we attribute a short-term demand and transitory conditions and how is administration thinking about inflation as it relates to the economic recovery and infrastructure investment? >> very carefully with price movement and recent inflation to understand what is driving
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them. and i agree with the general comments that the chair made yesterday about transitory factors we opening the economy that was once largely shut to see a huge shift in demand from surfaces to goods and is suffering from a number of bottlenecks and shortages semi conductors affecting the car industry. it is just about be reopening. we are hearing about worker shortages. people permanently lost jobs and it will take a while for them to settle into a new permanent thing. so i believe there will be a
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bumpy process of reopening but we are well on track but watching inflationary pressures carefully, when it comes to addressing it looking at what we can do to ease supply bottlenecks carefully and the proposals of the president's budget the american rescue plan was standing that is on a much smaller scale over a longer period of time and i don't believe this will add to inflationary pressure in the economy. >> i recognize the gentle lady from florida. >> thank you mr. chairman good afternoon secretary ellen. i help to lead the bipartisan effort to help businesses retain or rehire workers rather than lay them off.
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that ran parallel with the pandemic we establish the ert see with c.a.r.e.s. act and then in the covid package now most recently extended through the end of 2021 with the rescue plan act. i'm proud to say the ert see could help businesses retain or rehire 13 million workers. it hasn't attracted a ton of attention but it's a big initiative to help those who want to help employees provide been focused on implementation i sent you a letter asking for an update on the treasury efforts to inform employers about ert see we remade that requirement for treasury and fda as part of legislation. second, we provided treasury with a memo laying out all the different challenges we have heard from employers they have
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been facing when they try to claim the ert see. your staff responded in later today we will receive a briefing they can you get bride update to implement the ert see? are employers aware of the credit? can the irs process these claims efficiently? >> first of all i agree the ert see is a very important and useful tax credit and it is critical employers know about it i know the one thing the irs has been doing is working with those who provide tax services with firms like intuit so if they work with larger businesses filing tax
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returns that the source of information to the businesses about the availability of this credit and i gather from conversations that i have had with executives at the firms there is good awareness of this credit that i believe that people will brief you this afternoon their doing what they can to get out information about the availability of this important credit. >> i yield back. >> the gentle man from oklahoma. >> my time here today is short so i will be brief with yes or no questions. i've been a job creator the past 35 years living on the receiving end of big government policy i've spoken to literally hundreds of business owners the last month
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they and i disagree with your assertion that the extra 300-dollar week benefit contributes to the worker shortage in america. madame secretary i know you answer these questions but i want to get clarity do you think we should extend the 300-dollar per week benefit beyond september 6? >> it expires september we have no plans to extended. >> that's great news for those job creators. we will look forward to seeing that occur. since the passage of 2017 historic tax reform zero companies have moved overseas 4000 prior to that there have been zero inversion since passage of the tax cuts and jobs act tax provisions putting america first to put america jobs home madame secretary do support us
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multinationals bringing ip and jobs back to america? >> yes i do. >> do you believe bringing ip back to america? >> what. >> do think the tax implications to take a piece of paper anywhere in the world that what we did but that 2017 tax cut encouraged american businesses to repatriate those properties quick. >> that is a complicated question i cannot give that a yes or no. >> a 32nd answer quick. >> we are proposing to change that to make it into a more effective tax credit. >> madame secretary are you going after the very thing that other countries have to
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reach out to bring manufacturing to their countries with their tax sovereignty to do what they need to do by trying to justify them raising taxes so we can raise hours higher on the multinationals we have based here? >> capital is globally mobile and fight - - labor far less so and the consequences that it becomes globally hard to tax capital. countries compete for business by lowering tax rates. >> with my remaining three seconds wouldn't you say we've had no inversion? that must've been a real incentive for american jobs to stay in america i yield back. >> the gentleman from california. >> thank you mr. chairman. first i represent the 34th
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congressional district, downtown l.a., east los angeles, tale of two city or districts one that is very well off like hancock park and another working class and poor that felt pandemic very differently. one struggled and once exceeded and where the working classes decimated in coming to staying in their homes and i'm glad to see the president's budget is making substantial
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investment with the automatic cash payments tied economic conditions so the federal government so there is no delay. you know that $1400 stimulus check was critical for many individuals including in my district do you think it's a good idea that has merit for direct cash payments to be tied economic conditions quick. >> it's something we should analyze and discuss more i am broadly supportive of the idea of making it more automatic if
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it goes doubt of movements of the economy quickly like the employment rate when it rises it tends to stabilize the economy and takes a long time for congress exactly for unemployment insurance that something i'm supportive of with respect to stimulus checks there are different causes of weakness in the economy sometimes stimulus checks are a really good approach and looking into the economic consequences of that but we would be happy to work with you. >> i look forward in my time is up and i yield back to the chairman but thank you for answering that question. >> the gentle man from
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nevada. >> thank you very much mr. chairman secretary ellen and according to the homebuilders association nevada has us shortage of 79620 affordable housing units available to extremely low income renters we also struggle with long-standing priority for me and that priority las vegas was recently selected to participate in the local food local places program to develop the urban agriculture park and co-op in a historic westside located in my district and novel pool of low income tax credits that are allocated based on a formula
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determined by the secretary can you briefly explain how you plan to carry out this proposal? it sounds like a program my home state of nevada would greatly benefit from. >> sure. a portion of the housing tax credits proposed to allocate to opportunities owns to have the conditions in place to succeed in a demonstrated ability to improve on their fortunes and often it's very difficult to find affordable housing in these neighborhoods. so the new program word target some of the housing tax credit
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on the particular neighborhoods. it's something that would be largely invisible with low income housing tax credit but in a way that would be beneficial for people living in poverty areas. >> i look forward to working so to address this issue you commit to working with my office on this important issue? >> it is a very important issue i'm not aware of any program specifically but we will work with you on that. >> thank you madame secretary thank you and your entire team at treasury with the equity
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and inclusion were thank you for your commitment and other important issues and i yield back. >> the gentle lady from west virginia. >> thank you madame secretary for being here today as many colleagues have raised, we are gravely concerned with the promises made over the course president biden's campaign the policy proposed of the budget and the ability of treasury to complete his duties effectively. democrats once looked building the economy for families act around by the treasury department and massive amounts of unemployment insurance
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fraud i am not convinced of the department's ability to operate a program of this magnitude and hoping you could help me understand why this is the right approach you have limited times of you keep your responses short do they have field offices to appeal to and interact face-to-face with american citizens. >> to the best of my knowledge we don't we have set up a new office of recovery programs to make sure we have the strength and the oversight to carry out many of the programs assigned to us. >> does the treasury have call centers.
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>> not for that program but we do have call sensors for other things. >> does the treasury have access to wage and income data to be required an individual's earnings and benefits? >> i cannot answer as a detailed question. >> are there comparable programs that you can point me to? >> we are running many programs authorized by the c.a.r.e.s. act of the american rescue plan. >> what kinds of functional and expertise does the treasury have to implement the benefits program like this?
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>> you have seen as sufficiently with services and the irs getting economic impact payments out to millions of americans quickly and efficiently and we are working with irs to implement monthly payments of the child tax credit it will go out one month ago one - - one month from now. >> your time is up. >> thank you to the secretary for joining us today. and those questions will be made part of a formal hearing record and with that we are
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adjourned. [inaudible conversations]
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