to do it since I'm an employee of the president. This that is absolutely ridiculous. Now, finally, you noted last year and quote that the firing for cause protections under the law were inappropriate and you recommended...
Because we live in the real world, don't we?
Are you personally responsible for everything President Trump says?
No. My role as the chairman of the...
Before President Trump says something as president of the United States, does he call you up and say, 'Stephen, I'm about to say this and I want your approval.' Does he do that?
And after the president says something, does he call you up and say, 'Stephen, was that okay? Are you okay with this?'
Nope. I have an advisory role.
Okay. Now sometimes intelligent adults, reasonable people disagree. Is that true?
Is it part of your job description when you disagree with something the president says to call a press conference and say he's wrong about this and let me explain to you why. Is that part of your job description?
Not as CEA. Is that part of any job description of any aide that you know of to President Biden?
How about for President Obama?
How about for President Clinton?
We don't live in La La Land, do we? Do we?
No.
Now, monetary policy is important and the Fed is in charge of it, but monetary policy is not the only thing that's important. Fiscal policy is important, isn't it?
Fiscal policy is extremely important.
And I don't care how low the Federal Reserve lowers interest rates. If the United States Congress is profligate in its spending, if it spends money like it's pond water, if it runs up $37 trillion in debt and deficit spends to the tune of 7% every year, that also has an impact on employment and economic growth and inflation, does it not?
Absolutely. And I think people often make a mistake by looking solely at monetary policy when fiscal policy is a driver.
And in fact, the Federal Reserve can lower short-term rates through the open market committee all you want, but that doesn't necessarily mean that long rates 10 years and above are going to go down, does it?
Right. Because the bond market counts too, doesn't it?
If the bond market thinks that inflation is on the horizon, those rates are going to keep going up or at least stay steady, isn't that accurate?
Yes. The Federal Reserve does not control the long end of the yield curve.
Okay. So, what Congress does matters, doesn't it?
My good friend Senator Warren says, 'You're Donald Trump's puppet.' Are you Donald Trump's puppet?
Not at all. I'm very independently minded as shown by my willingness to stray from consensus and have out of consensus views. And I believe that I will continue to be as independent in my thinking process if confirmed.
We're going to hold you to that, governor, future governor. You need to call him like you see him. There's nothing wrong with politicians in Washington offering their opinions. You can't stop them. But we need a monetary plan that was put together by something other than vodka and darts. And that's what we had the Federal Reserve for. Now, you're going to get a lot of advice from politicians. I'm not saying they're always wrong. Even a blind chicken finds a mealworm now and then, but you've got to call them like you see them and ignore all the rhetoric from all politicians. Will you give me that commitment?
Thank you.
Thank you, Senator Kim.
Thank you, Chairman. Dr. Miran, I wanted to just pick up on something that you said earlier. So, if I heard you correctly, if you are confirmed to this, you are not going to resign from your current position at the White House.
Thank you, Senator. I have been advised by counsel that the legal approach is to take an unpaid absence from the Council of Economic Advisers, cease my CEA activities, and if counsel advises me otherwise I will follow the law and follow counsel's advice.
I guess I just want to ask you why did counsel advise you in that way? You have every right to just say no I'm going to resign.
Well, I'm not a lawyer so I can't answer why they advised that way.
You can determine your own career. You know that right?
So you want to go back to the Council of Economic Advisers after this term. Is that correct?
Well, I don't know what will happen. The term for which I've been nominated is four and a half months. If I am nominated and confirmed for a longer term than just a handful of months I would absolutely resign.
I guess you tried to excuse this by saying that this is because the whole package of reforms wasn't adopted. But I guess I just want to read your own words back to you. You said shortcircuiting the revolving door between the Fed and the executive branch is critical to reducing the incentives for officials to act in the short-term political interest of the president. Do you still agree with that statement?
Thank you, Senator. As I said before, I believe that a reform of the Fed has to be...
I get that. I understand your excuse on that front, but do you agree with the statement I just read back to you?
I think that considerations like that need to be taken in context of an overall package of reforms and not looked at in isolation.
Okay. Well, look, I think that this very clearly shows that the reason we don't want actions like what is happening before us is because you could very well be continuing to act in a way that is in the political interest of the president because, you know, he is going to be your future boss again at the White House. And so it's one of those things where I'm just trying to think about why do you even want this job at the Fed for four months if you're just hedging your bets and continuing to hold your position at the White House. I wanted to just continue on a little bit here because you said something I wanted to dig into. You said excessive control by elected political actors (like the president) interferes in good policy and results in bad economic outcomes. Is that something you said?
Senator, I believe that political interference in monetary policy decisions can erode the outcomes and that it's important for the Federal Reserve to be insulated from the political cycle.
Okay. Insulated from the political cycle. And here you said excessive control. What is excessive control?
Well, I don't have a precise formal definition of that in my head, Senator.
Okay. Well, I guess what maybe I'll walk you through a couple things here. You were saying that you'd like to clarify that members serve at the will of the US president.
Senator, I believe that members can be removed for cause. I believe the Reserve Act specifies that members can be removed for cause after they've been...
I know. I'm just looking at your list of reforms that you like and it sounded like you were saying you said clarify that the members serve at the will of the president. I guess I wanted to just ask you, would it be appropriate for a new president to come in, get rid of everybody on the board and put in entirely new appointments at the beginning of each presidency? Is that appropriate?
You're referring to the reform proposal, not to current law.
I'm referring to your beliefs. Yes.
Well, so as I said before, the reform proposal was a package deal with a series of checks and balances, and that was one check, but there's offset by other balances and other checks that would diffuse power throughout the Federal Reserve system. That's why we refer to it as a form of monetary federalism.
You also said, quote, political independence is inherently undemocratic. Can you explain that to me?
Yes. So if you had a Federal Reserve that was entirely completely independent with no ability for the president to appoint officials, no ability for the Senate to provide its advice and consent, no ability for the Senate to hold hearings where they receive answers to their questions by Federal Reserve officials, I think that would be profoundly undemocratic and I think it's important that we have Democratic oversight as an example when the Senate holds its hearings getting testimony from federal officials.
One final question here. Has anyone in the administration asked you to commit formally or informally to lowering interest rates?
With that, I yield back.
Thank you, Senator Ricketts.
Great. Thank you, Mr. Chairman and ranking member for holding this hearing and thank you to our panelists, our nominees, and your willingness to serve our great nation. The ranking member was talking about inflation. I might note that on Labor Day the average price of gas was $3.15 a gallon and that's the lowest it's been since 2020 and people in my state tend to drive a lot and that's a big factor in household income and inflation and to me that says that the president's policies of unleashing American energy are important and that also actually rolls into another thing that's important for my state of Nebraska which is ethanol. Actually, last time I filled up with ethanol it saved me 45 cents a gallon versus regular 89 octane. So, everybody can fill up on ethanol, save money at the pump, clean up the environment. It's great for our farmers and ranchers. And you may say, why are you talking about that right now? Because I'm going to roll into another topic that is of interest here, which is communist threat. China is the threat to America. They want to supplant us as the world superpower and they've made it clear that they are going to use every lever of power to be able to undermine our national security. Confronting this threat requires comprehensive strategy that strengthens our safety, our financial system, secures our critical assets, and closes loopholes for communist China to seek and exploit things in our system. And one of the things that includes is combating our foreign adversaries' ownership of American agricultural land. And thus the tie-in back to my state. In 2010, Communist China owned 13,720 acres of American farmland. In 2023, Communist China owned 277,000 acres of that farmland, and that is a threat to our national security. A lot of that farmland was located by our sensitive military installations. Mr. Pilton, do you agree that that's a threat to our national security?
Senator, thank you very much for the question. I share your concern. In fact, the Chinese penetration in agriculture, agricultural land, real estate, critical technologies is something that we all should be very concerned about from a national security perspective. If I am confirmed to lead the CFIUS committee, then I would look forward to working with you as well as the members around the table, including the observing member of US Department of Agriculture, Secretary Brooke Rollins, who I've worked with very closely before. So I'd look forward to the opportunity to work with you, your staff, and this whole committee on these issues.
Well, good. I'll look forward to that. Under the Agricultural Foreign Investment Disclosure Act, AFIDA, foreign entities are required to disclose the transactions of American agricultural land to the USDA. Thus your comment about working with Secretary Rollins. USDA then shares the data with CFIUS agencies so they can identify and review the transactions that pose national security risk. However, the Government Accountability Office, GAO, published a report on the AFIDA process which flagged incomplete data reporting, process errors and delays. That's why I introduced the AFIDA Improvement Act. My bill will strengthen reporting requirements and improve data sharing coordination between USDA and CFIUS so that national security risks tied to foreign land purchases are flagged immediately. I look forward to working with you on this issue and more when you are confirmed. In your view, what other enforcement gaps or vulnerabilities in the CFIUS process pose these threats or what poses the greatest risk or threat from our foreign adversaries? Are there other things in the CFIUS process we can improve upon?
Thank you for the question, Senator. If I have the opportunity to be confirmed, obviously, CFIUS's focus is national security. And my priorities are going to be just that, including focusing on the critical technologies, artificial intelligence, quantum computing, other areas where America is and will continue and must continue to be a leader. Another priority that I have is the non-notification of covered transactions. These are transactions that should be reported that are not reported. And one of the things that I want to do if confirmed is sit down with the entire team including the advising groups, the intelligence community, law enforcement community that plays a role there and find out how we can use the different tools and authorities that CFIUS has to advance that. Finally, I'd like to focus on compliance and enforcement. Obviously, there's a front-end review of the transactions that come through CFIUS, but many times there are mitigation agreements and ongoing compliance, and we have to stay vigilant and ensure that folks are abiding by the agreements that they enter into. I'd also like to say that I think it's incredibly important because I know that CFIUS and national security is a bipartisan matter. So, having that feedback loop with the executive branch, this committee, and your colleagues is going to be very critical.
Yeah. Great. I look forward to working with you on this. And one other thing I'll just mention is looking at process improvement to streamline your processes to be able to do this more efficiently. And we can talk about more of that later. Thank you, Mr. Chairman.
Thank you, Senator Smith.
Thank you, Mr. Chair. Mr. Mayor, and welcome to the committee. Thank you to the chair and ranking member. I just have a couple of straightforward questions for you which will hopefully be easy to answer. So, you currently work in the White House as an economic adviser to the president. Correct?
Thank you, Senator. That is correct. I do currently work as the chairman of the Council of Economic Advisers in the White House.
Right. And so, in this role, you've had a hands-on role in implementing the president's political and policy agenda. Would that be fair to say?
That is not correct, Senator. The Council of Economic Advisers is an advisory organization. I have no statutory implementation powers whatsoever.
Well, you've been described as the architect of the Trump tariffs and a vocal proponent of the One Big Beautiful Bill. So, it seems to me that you've been part of the administration's policy and political agenda. Senator Kim referenced just a bit ago about the paper that you co-authored that argued that shortcircuiting the revolving door between the Fed and the executive branch is critical to reducing the incentives for officials to act in the short-term political interests of the president. You wrote this and I actually agree with it. So, I mean, here's my concern. Given the nature of your current role and your expressed concern and mine for insulating the Fed board members from the day-to-day political process, I just don't understand how your nomination doesn't break the rule or the goal that you've set out yourself. I mean you previously said that no one can go from being a high political operative to being politically neutral and I mean I agree with you when you have taken on a role of advocating it's very hard to step away from that and I don't know how you could be an exception to that. Last September you criticized the Fed's decision to cut rates as the biggest policy mistake in 2021. But now, where do you stand on that? President Trump is in office. You've done a complete 180. I don't understand what your position is on this now. And how can we expect you to be unbiased and neutral?
Thank you for the question, Senator. As I was saying to Senator Kennedy a few moments ago, I think it's a mistake to focus solely on monetary policy when thinking about the path of inflation and employment. And I think that the full suite of economic policies and otherwise affect those outcomes. And what the Fed ought to do is to be forward-looking in its expectations of where inflation and employment are going because those are the mandates that Congress assigned to it. My understanding of how economics works is that a wide variety of policies that have been implemented since January are actually quite disinflationary. Let me give you one example which is the border policy which you might not think of as an economic policy but the truth is that if you increase the number of occupants of housing by millions in a relatively short period of time without a dramatic expansion in the number of houses it's going to put upward pressure on rents. So...
I'm sorry to interrupt you, but I just have a little bit of time left and I'm not disagreeing with the fact that the Fed has a broad portfolio and that it is a complex thing, but what I'm concerned about is because of the role that you've had in the Trump administration and now as the president tries to move you to the Fed that we are all so concerned about the open question about the independence of the Fed because of the things that President Trump has said. I mean, so I think we can be pretty clear about what's happening here. This nomination, your nomination, is getting rushed through because the president is frustrated with the Fed for not cutting rates and he wants loyalists on the Fed board. I mean, that's just pretty obvious, I think, to what's going on here. So, I just think it's important that we not lose sight of what's happening and also not lose sight of why the president wants to see rate cuts go down because the economy is in a struggle right now because of the trade war, because of everything else that he is doing and this flailing that is happening I think is the result of it. So my view here Mr. Chair and ranking member is that it is extremely important for this committee to take a stand against politicizing the Fed. That is the best thing for the long-term health of our economy. And that this is not the right step to take if that is our goal. Thank you, Mr. Chair.
Thank you, Senator Britt.
Thank you so much, Mr. Chair. Ranking member, Mr. Miran, I appreciate your conversation with me yesterday. Your commitment to Fed independence and just taking so much time talking through questions with me. I look forward to supporting your nomination. To all of you, we appreciate you being here. Mr. Burke, I want to start with you. The role you've been nominated for, it focuses on counterterrorist and illicit financing. And look, this is something that we saw the last administration literally go to the wayside. When you look at what happened with Iran, us not using every tool in our toolbox to squeeze them dry financially. What happened was billions of dollars obviously moving into the oil regime. We now have an administration that is taking this seriously, understanding that Iran is the largest state sponsor of terrorists and every single dollar that they have, they use to advance that goal. My question for you is looking at President Trump's maximum pressure campaign driving that, I think we've seen real successes here but can you speak generally to the seriousness of this and how critical is it that we enforce the sanctions that are on the books to the fullest extent particularly when we're talking about the Iranian regime?
Thank you, Senator. I very much appreciate the question and I share your concern about the need for sanctions to be effective and I think one way to do that is to understand and as you mentioned President Trump has re-implemented the maximum pressure campaign on Iran and I know from my previous time at Treasury working on that issue what that actually means. It's a multifaceted approach. It's not just about imposing new sanctions on new targets but it's actually complemented by extensive diplomatic engagement with partners and allies around the world and also the private sector to identify the risks associated with exposure to Iran so they can take action as well to curtail that Iranian activity and we've certainly seen that in the past when there is a maximum pressure campaign and that has an effect on Iran's ability to raise funds and move those funds through the system. We also saw just this week, Secretary Bessent announced new sanctions on Iran and had a video message that explained this process. And also what's very important to complement that maximum pressure is that the world understands the United States is intent on targeting actors around the world who continue to support Iran's activity. And that's what the actions this week did. And Secretary Bessent made reference to some of the impacts that those actions have seen in terms of reducing Iran's oil revenue, but also reducing its ability and disrupting its ability to move funds and to move logistics around the world to procure or trade in oil. So, if confirmed, I look forward to supporting that effort.
Excellent. I want to kind of drill down on secondary sanctions. I mean, we know particularly in the last administration where we had lax sanctions, where they weren't enforcing them, allowing countries in Southeast Asia to openly disregard our sanction policy and sell Iranian crude oil to China. We saw it happen. I think it's absolutely unacceptable. And I'd argue one of our most effective tools is actually secondary sanctions to discourage foreign countries and entities from doing business with Iran. And I'd like to know what are your thoughts on that and how can we better utilize the secondary sanctions available to us to use them against these nations that attempt to undermine the United States and aid Iran.
Thank you, Senator. I think it's a very important concept and it goes to the multifaceted maximum pressure campaign approach. Secondary sanctions are intended to change behavior. And I think when you add that extensive diplomatic engagement, which has been used very successfully in the past with the credible threat of US action to those actors who continue to support that illicit behavior, secondary sanctions would be very effective at changing that behavior.
Well, I want to stay on national security for a second and Mr. Pinkerton, I'm going to come to you. When looking at China, the CCP is clearly looking to undermine America at every single turn. And one of the ways I feel like they've done that obviously is buying up American agriculture and farmland. I think many of us on this side have been fighting against that with bills and legislation trying to push back. I know that this committee continues to be engaged particularly in the CFIUS realm and the ability to properly review the foreign land purchases near sensitive military sites. I can assure you that China is not allowing America to buy up land around sensitive military sites there in China. Right. So my question to you is will you commit to working with us to ensure that we actually are able to move the needle in this regard if confirmed to this role.
Senator, thank you very much for the question. I will absolutely commit to working with you and this committee on these really important national security matters. When it comes to farmland, I think Secretary Rollins has said food security is national security and I completely agree with that. And also working very closely with the Department of Defense to ensure that those bases remain secure and working on some of the legislation that's been presented from this committee. So, from a technical assistance perspective and also meeting with you and your staff, I'd be honored to work with you on that.
Look, we need to get this done. Time is of the essence. So, thank you all.
Senator Cortez Masto.
Thank you, Mr. Chairman. Congratulations to all the nominees. Won't be able to answer or get to all questions for all of you, so I'll submit most of them to the record. I only have five minutes, but Mr. Hobs, let me start with you. I'm very interested in how we increase the affordable supply of housing in Indian country. So can you talk a little bit about that? What HUD intends to do to help us increase that supply?
Thank you, Senator and thank you for the question. It is a priority of mine. It's a priority of Secretary Turner and President Trump to engage with our stakeholders in Indian country. I recently visited Alaska and the Napakia tribe. I've been to Wisconsin and the Oneida tribe. And one of the things that we're consistently discussing is how to reduce the regulatory burden on tribes. A number of them are actually coming into HUD next week at our tribal interagency advisory committee and we'll be meeting with them and one of the key topics is looking at NEPA, some of our radon regulations and others that really are overly burdensome and just artificially increase the costs of them executing their Indian housing block grants.
Thank you. I look forward to hearing and working with HUD to do more to make sure that we can prioritize this in Indian country and we are working on housing and affordable housing there. So, thank you. Mr. Miran, let me talk to you. I know you've probably received some of these questions as well. My office and I suspect those of my colleagues are being inundated with calls and letters from small business owners. These small business owners say they cannot keep their doors open with prices rising 50 to 145% for toys, shoes, coffee, auto parts, fruits, and vegetables. These business owners are worried they will have to lay off their employees or some of them already have or close their doors and stop serving their neighbors. Yet you told me in February and I quote, 'The economic burden of tariffs imposed by the United States is borne by the country whose exports are tariffed.' Do you still believe that?
Thank you, Senator. So the theory of incidence in public finance and economics, which is a very well-established old literature that's not very controversial, that generally rests upon what economists would call long run elasticities. And...
I don't need an economic theory. I already went through that in finance classes at UNLV, University of Nevada, Las Vegas. I just need to know your position. Do you still believe what your statement was that the economic burden of tariffs imposed by the United States is borne by the country whose exports are tariffed? Do you still believe that? Yes or no?
Thank you, Senator. In the long run, I 100% believe that. In the short run, I've always maintained there could be volatility.
And does that volatility mean that individual taxpayers and businesses are paying those tariffs and having to close their doors? Is that what you are saying is a volatility that small businesses may have to close their doors and they're just going to have to suck it up?
Thank you, Senator. I don't believe that there is any material evidence of that to date.
So let me just say on CNN you were interviewed about an auto parts maker in Detroit just had to lay off 100 workers and shut down a warehouse. The owner specifically blamed tariffs and you stated it's always convenient to blame political changes when your business fails. Is that how you still believe? This business owner doesn't know what he's doing?
Thank you, Senator. I was not familiar with the circumstances of that particular business or those particular 100 workers at that time.
So then why didn't you say that at the interview and why did you make a statement like you did? It's always convenient to blame political changes when your business fails. That seems like you're disregarding our businesses altogether. Let me ask you this. Do you believe tariffs are taxes?
Thank you, Senator. Economically speaking, any policy can be modeled as a tax. So in that sense, exactly what I said, any economic policy can be modeled.
Well, what I'm saying is that the answer to your question is that any economic policy can be modeled as a tax.
Your question is yes, tariffs are taxes.
My answer is that any economic policy can be modeled as such.
Under the last administration, we saw a surge in manufacturing jobs and construction with the US economy adding over a half million manufacturing jobs and construction of factories doubling. Unfortunately, under this administration, we have seen the exact opposite. In August, the US manufacturing sector contracted for the sixth consecutive month due to Trump's tariffs and chaotic trade policy. Earlier this year, you said that manufacturing construction will surge as a result of Trump's tariff and tax policies. Were you wrong?
Senator, I do not believe that that's the case. I believe that they will because the uncertainty from the tax situation is resolved. I believe that just a few months ago there was a huge amount...
So, would you say it's transitory?
Well, I think people were concerned that Congress would allow the biggest tax hike in history to throw the economy into a recession and there would be substantial disincentives for investing in the United States. Fortunately, Congress has not allowed that to happen. The One Big Beautiful Bill has become the One Big Beautiful Act and the uncertainty around the tax situation has resolved, replaced with enormous incentives for investing in America in the form...
So, you weren't wrong. We just have to wait and see.
Well, the bill was only enacted recently.
Thank you, Mr. Chairman. I know my time is up. Thank you. Thank you, Senator Moreno.
Thank you to all of you for being here. Congratulations on being appointed. I sit back and wonder how President Trump is getting such highly qualified nominees as you. It's always an inspiration to see all of you willing to serve your country. I'll start with you, Mr. Hobs, for the obvious reason, which is that you're from Ohio. Congratulations on your appointment. I think you're an inspiration to a lot of people who maybe sit around this room and see what's possible in their careers. And I give the chairman huge props for developing quite an assortment of very qualified people. How do you balance the idea that we're spending a record amount of money to tackle homelessness and yet homelessness continues to increase in this country?
Thank you, Senator, and it's an honor to sit before my home state senator today. Homelessness is an absolute crisis and you know the HUD's budget has more than doubled in the past four years and yet homelessness continues to rise and rise and rise and that's because the solution to homelessness isn't just a house. It's also addressing mental health. It's addressing substance abuse and crime and vagrants on our city streets. And President Trump is leading on that with his recent executive order.
That's great. And we had Secretary Turner out to Columbus, Ohio, a place called Vista Village that does exactly that. So, it's great to see you guys leaning in and looking for innovative solutions. Mr. Curts, I know that you claim to be from Georgia, but your heart is in Ohio. Is that correct?
I am quite the Browns fan. Yes, sir.
There you go. Perfect. I just want to make sure. And that's not easy, by the way. Let me just point out that's not easy to do.
That's leading the question. Leading questions.
So, thank you for being here as well and talk a little bit about what you think what you're going to be doing when it comes to tackling the housing sector that you're going to be overlooking.
Yes, Senator. So, thank you for the question and again, thank you for the time that we were able to share earlier this week with you and your staff as well. Ultimately, the issue of housing availability and affordability is going to be tackled and accomplished at the local level. What the federal government can do is we can lead on this issue and we can provide resources to execute to that end. What we're seeing currently is the programs that we have established here at the Department of Housing and Urban Development and specifically within my office have a very onerous and duplicative set of requirements to draw down that money. So essentially, in order for any community in our states and localities to take money from HUD, they have to have people on staff full-time who have the expertise in how to write one of these grants. That boxes out countless communities throughout our country that are ready and willing to develop, but barely have enough people in their offices to just turn the lights on. So what I look forward to doing if confirmed is joining Secretary Turner's team and looking to take inventory of those programs and looking at ways to make them more effective and efficient to that end.
Well, thank you and Mr. Botton and Mr. Burke. One of the things that's really been a great tool for President Trump to combat these narco terrorists is designating these groups as foreign terrorist organizations. Are you willing to work with our office to see how we can expand that especially in Colombia where these terror groups are really wreaking havoc? Mr. Pinkerton, start with you.
Senator, thank you for the question. I certainly look forward to working with you and providing any support that I can from the CFIUS perspective.
Thank you.
Thank you, Senator. Yes, if confirmed, I look forward to continuing that discussion with you and your staff.
Perfect. Dr. Miran, just some really quick questions for you. I know you've taken a lot of questions already. Have you ever relied on a mortgage application with the objective of getting a lower interest rate?
Thank you, Senator. I have never done that.
Well, you're already ahead of the game then. That's good news. Do you think that it's appropriate for the Federal Reserve to weigh in on DEI?
Thank you, Senator. I don't believe that that is a responsibility...
About the climate cult. Do you think that's something that the Federal Reserve should be weighing in on?
It is not something the Federal Reserve should be weighing in on.
Do you think that they should have been weighing in on the wisdom of the pandemic spending that set records for government spending? You think it was wise for the Fed to encourage that?
I don't believe it was wise for the Fed to advocate for one fiscal program over another.
Do you think it was wise to claim that inflation was transitory when it was destroying working Americans for three or four years?
I don't believe that was wise either.
And do you think it's wise for the Federal Reserve chairman to advocate for the forgiveness of student debt?
I would not make such a recommendation myself.
So it seems like what we're talking about here, Mr. Chairman, is restoring the independence of the Fed. And to the ranking member, she's not here, but I want to congratulate her for her wisdom in voting against Jay Powell, who is an inspiration to every ineffective, inept leader in America. And hopefully we can get that Federal Reserve stronger again with independent-minded people who actually take politics out of it.
Are you finished, sir? You've got one more time. Thank you so much, Senator Moreno. Senator Warner.
Thank you, Mr. Chairman. It's good to see you all, Mr. Burke. I enjoyed our time. I will say to my friend from Ohio, I want to congratulate the nominees. They are not appointed yet. That's our job to decide whether they move from being nominees to appointments. I do in light of what my friend from Ohio said. Mr. Brand, I know you're not a lawyer, but in America, should everybody have due process?
Thank you, Senator. I believe...
Don't thank me because I got a lot of questions. So it's a fairly simple answer. Do you believe that Americans should have due process?
I believe that Americans are entitled to it for criminal proceedings.
Okay. And do you believe there is a presumption of innocence?
Again, I'm not a lawyer, but that's my understanding in criminal proceedings.
Okay. So regardless of what charge has been made and I understand there's not even maybe this morning something was open but the idea that people... well first of all that the director of FHFA is suddenly going on a mortgage witch hunt and thank goodness I've never had a mortgage so I wonder what goes around comes around. But I think it's kind of unusual. I'm not going to relitigate the whole thing, but that senior government officials aren't even granted some level of due process and basic presumptions of innocence before any evidence has been provided. Senator Reid wanted me to follow up. He asked about federal governance proposals. One that you said whether you would not serve in executive branch for four years following the end of your Fed term and to advise President Trump to voluntarily announce a refrain from removing any incumbent board members. And you said my understanding as well it's all part of a package deal but in your federal reforms you proposed you said if we can implement this in a piecemeal fashion one policy at a time if legislatively easier. How does that, is it package deal or we can take these one at a time?
Thank you, Senator. It is a package deal but whether that package is one big beautiful bill or a number of different bills would be I think the Senate and the House's prerogative. It wouldn't be...
All right. Let me keep moving on. I'm not going to ask you to filibuster on why you think the BLS data has been going downhill or cooked when frankly it has been the gold standard and I am hugely concerned that BLS leaders are being fired because the numbers didn't come out the way the president wanted. How are you going to make things better when we've seen a raft of senior professionals at BLS leave those positions because of this threat of political interference?
Thank you for the question, Senator. I do believe that the data from the Bureau of Labor Statistics has deteriorated in quality and reliability over the decades.
Is that due to a political bias at the BLS?
Well, it's due to... the root cause, there's two issues at play. One is declining response rates over time and two is an inability or refusal to do something to correct for those declining response rates.
So, and that's going to be solved by cutting professional staff.
Well, I believe that it needs an overhaul and fresh pair of eyes and I'm excited for...
So are you making the accusation that the BLS data is being politically influenced? I just need to know that.
I'm making the statement that BLS leadership did nothing to arrest the deterioration in data quality.
Is it appropriate for the president of the United States to call out and fire BLS leadership simply because he doesn't like the results?
I do not make personnel decisions, nor do I have a legal training in constitutional employment law or for that matter any type of law. So I'm just not the right person to...
I don't know. Your answer doesn't give me a lot of confidence. I know I'm not going to relitigate all of the Fed independence issues, but if you're not willing to call out a frontal attack on the BLS and if you're not willing, you say the information has deteriorated and not willing to acknowledge that loss of the professional staff is not going to improve that situation. It really makes me concerned. Last question is, do you think that the Fed by being politicized and simply responding to lowering interest rates will be able to overcome any resistance from the bond market if the bond market says, 'Oh my gosh, we've lost the independence of the Fed.' Can you speak to that for a few seconds?
Well, I don't anticipate the bond market saying that. So I don't anticipate such a hypothetical speculative situation.
If the bond market were to respond that way, what action would you take?
Well, it's impossible to respond to a hypothetical like that without knowing lots more context about what was going on in financial markets and supply and demand in the economy as a whole. That's the type of hypothetical about which it's impossible to speculate without a much more wholesomely specified set of conditions.
I give you credit for your ability to filibuster. Senator, thank you, Mr. Chairman.
Senator Hagerty.
Thank you, Mr. Chairman. Let's talk about the Fed's independence. That's been a big issue here today. There's been a lot of talk about it, and I find it particularly rich that the Federal Reserve's independence is suddenly a big issue from a party that's long sought to systematically inject its ideology into the work of the central bank. Let me get into some specifics here to make my point. President Biden once called for adding racial equity to the Fed's dual mandate. He appointed a Fed governor who sought to redirect capital from fossil fuels to green energy by using the Fed's oversight function to influence bank lending decisions. Biden even endorsed Democrats' efforts to make the Fed conduct monetary policy based on racial outcomes. Furthermore, the Fed itself has undermined its own credibility by caving to progressive pressures. The Fed joined the Network for Greening the Financial System. This is a group that promotes leftist climate ideology. Partisanship at the Federal Reserve Board and regional reserve banks has come at the expense of effective supervisory practices. Need look no further than the failures of the San Francisco Fed in their failure to supervise Silicon Valley Bank. As Mr. Miran testified, quote, independence of monetary policy is a critical element for its success. This is exactly the right perspective and it's critical to the leadership that we need to steer the Fed away from politics and back toward data-driven monetary policy. So, Mr. Miran, I'd like to start with you. At the CEA, you analyze the impact of tariffs on inflation and through that analysis, I think you determined that the tariffs that were being considered and imposed by President Trump would not have a substantial impact on inflation. That analysis seems to have turned out to be...
I'd like to ask you how your analysis on inflation and tariffs will inform your perspective on monetary policy should you be confirmed.
Thank you, Senator. I do believe that there's no evidence that tariffs have had any inflationary effect in the sense of moving the aggregate price level. The Council of Economic Advisers just put out an update to a previous study where we looked at the import components of every single good and we identified that imported goods have actually been getting cheaper relative to domestically produced goods, which is the opposite of what you'd expect to see if tariffs were inflationary. Moreover, there's no sense in which US goods inflation has diverged from goods inflation internationally, which again is something you would expect to see if tariffs were inflationary because the US is implementing significant tariffs but other countries are not. Moving forward, I expect my view of inflation to be informed by the broad suite of economic policies and not just monetary policy and indeed I think this is a subject which has received insufficient attention in the past. So for example, if you consider border policies I was discussing before, moving millions of new residents into a relatively fixed supply of housing will be extremely inflationary because it pushes rents up. CEA has estimated that the open border policies of the last several years resulted in a 6 and a half percentage point increase in rents which explains about 30% of the increase since 2022. So that's hugely inflationary. So it is my view that the change to border policies is actually quite deflationary in effects and we're working on quantifying that.
Well, I think there are a number of other deflationary activities underway. You think about the development of AI, the implications on productivity there. You think about the deregulatory undertakings of this administration that are going to cut overhead cost and compliance cost dramatically and streamline government efficiency in a way that I think will again be deflationary. Our efforts to get back to energy dominance which had lowered the cost of energy all again feeding into a much more deflationary cycle than an inflationary one. So I hope that the Fed gets to the right point and back to the original point. We got to take politics out of this and I applaud the president for nominating you. You've been very clear that you want to get out of the political arena. You want the Fed to get out of the political arena that it's been operating in whether it be racial equity, green projects or timing of interest rate adjustments to politics. I very much appreciate that. Mr. Burke, I'd like to turn to you very quickly. You're going to go to work for if you're confirmed, you're going to work with one of my friends, John Hurley. The under secretary is extraordinarily competent and he needs a great team. I'd like for you to comment if you would. I chair the National Security, Trade, and International Finance Subcommittee of the Banking Committee. Senator Warner, who was here just a minute ago, is the ranking member. I'd like your thoughts now and later on how you could best work with our subcommittee as you undertake your role in terrorism finance.
Thank you very much, Senator, for that question and of course, if confirmed, I look forward to working with Under Secretary Hurley and you and your staff and the committee on those issues. I do think it's very important as we look at implementing regulatory frameworks and identifying risks that are posed to the financial system from whether it's terrorists or criminals and particularly in the use of new products that we identify what those risks are. We understand how that works in the financial system and then we can apply the appropriate mitigants to address that risk going forward. So again, if confirmed, I look forward to working with you more on that.
Well, Mitch, Mr. Mitchell sitting behind you knows how to contact our office and if you're confirmed, I expect to see you soon thereafter. Thank you. Thanks very much.
Thank you, Mr. Chairman.
Senator, Senator Goe.
Thank you, Mr. Chairman. Mr. Miran, who's Arthur Burns?
Thank you, Senator. I believe Arthur Burns was a chairman of the Federal Reserve in the 1970s.
1970, 1970. Under which president?
Under a variety of presidents in that decade.
Specifically. Do you remember what Arthur Burns was doing before he joined the Federal Reserve as chairman?
Thank you, Senator. I believe that Arthur Burns like a number of others like Janet Yellen, Ben Bernanke, Alan Greenspan were all chairman or chairwoman of the Council of Economic Advisers prior to becoming chairman or chairwoman of the Federal Reserve.
Actually, he went from CEA under Eisenhower and then became counselor to Richard Nixon, then became Federal Reserve chairman. And likely the reason they did that is to give some level of at least separation at least it was on the surface. What happened during Arthur Burns' tenure while he was serving in his capacity as chairman and with Richard Nixon at the helm?
Thank you, Senator. Can you narrow the question a little bit please?
Sure. What happened to the economy and to the independence of the Federal Reserve under Richard Nixon while Mr. Burns was the chairman of the Federal Reserve?
So again I think that's a bit of an open-ended question. I'd prefer to if you could narrow it a bit because a lot of things happened in that period.
Was there stagflation in that period?
It was an outcome during that period. Yes.
Was there public scrutiny about the fact that the president was trying to pressure the Federal Reserve to drop interest rates even though all economic indicators said that was a bad idea?
There were news stories about fractious relationships between the Federal Reserve and President Nixon, I believe.
Yep. And would you say that what occurred in terms of the pressuring of the Federal Reserve by President Nixon to drop interest rates probably caused directly stagflation?
No, I wouldn't say that, Senator. I believe that the inflation of the 1970s was caused primarily by two errors of the Federal Reserve, plus unfortunate supply shocks from energy markets and geopolitics in the Middle East. But the errors the Federal Reserve made in that period was a conflation of nominal and real interest rates. And by failing to raise nominal interest rates by more than inflation went up, they actually kept real interest rates relatively steady.
So you're telling me that no matter what many and I reclaim my time here what a lot of us whether it was our basic understanding of economics historically speaking what everyone understands was direct pressure on the Federal Reserve to actually drop interest rates that were not matching the economic situation had zero contribution to stagflation that really plagued America for almost 10 years?
No, I don't believe there's that consensus that you portrayed. I don't believe that consensus exists. Indeed there were two...
I yield back, take back my time. You understand why we're concerned because we've seen this playbook, right? Let me read something to you. The president looked wild, talked like a desperate man, fuminated with hatred against the press, took some of us to task. Apparently, meaning me, chairman of the Council of Economic Advisers and Paul McCracken, or both for not putting a gay and optimistic face on every piece of economic news, however discouraging, propounded the theory that confidence can best be generated by appearing confident and coloring, if need be, the news. That sounds a lot like Donald Trump. That was actually Richard Nixon complaining to the Fed chairman Arthur Burns trying to get him to bring down interest rates. And of course he did eventually and the country ended up paying almost with one decade of purely bad economic news as well as stagflation. So I don't understand how you don't see why many people are worried about the fact that you're going to go into a temporary position, hold your other position within the White House, and we don't feel like the Sword of Damocles is going to be hanging over your head if you don't lower interest rates, right? And so I think it's a very reasonable request that should you be nominated that you resign as CEA director and should you want to come back later then you go back to the nomination process. But the fact that this president who we know is willing to hold government officials hostage we just saw what happened with the BLS director is going to be able to hold that over your head and we are going to question whether or not you're going to be making the right decisions for this country not for your personal career. I think that is something that is extremely dangerous to the bond market, to our economy and could really lead us into a direction that could make some permanent damage to the reputation of the Federal Reserve. Thank you. I yield back.
Senator Lummis.
Thank you, Mr. Chairman, and thank you, Mr. Banks. Mr. Pilkerton, excuse me. It's not just egg land that we need to watch out for. In 2022 in a business park about a mile from F.E. Warren Air Force Base in Cheyenne a Chinese-owned business set up a digital asset mining business and it was more than two years before a public tip pointed it out to be a Chinese-owned business. The Biden administration ordered divestment which happened near the end of his term. How can we assure that and what steps could you take at CFIUS to make sure that we do know when a Chinese-owned business is located near a critical in this case land-based nuclear missile site?
Senator, thank you very much for that question. And I absolutely share your concern. That example is incredibly concerning. And it goes back to something that I referenced before the idea of focusing on companies that were not notified of where there would be. In this instance, the term is a covered transaction. We can't protect against what we don't know about. So I would look forward if confirmed to working through all the authorities within CFIUS as it currently stands, working with the various communities who would be able to provide intelligence information as well as law enforcement to work on these issues and if given the opportunity once again would love to work with you on this.
Thanks Mr. Pilkerton. Dr. Miran, I think we all want to see independence at the Fed when it comes to monetary policy, but there's more than one function at the Fed. There's monetary policy and there's bank supervision. Now, in the case of bank supervision, the bank supervision and payment regulations are clearly regulatory functions. So, they're not subject to that kind of independence. They are subject to the direction of the president. Now what I've seen in the last four years is the Federal Reserve Board and the Reserve Banks hiding behind the monetary policy independence with respect to bank supervision and payments. There's no basis in the law for bank supervision to be completely independent just the way it is for monetary policy. Do you agree with that that those are different functions?
Thank you, Senator. Yes, I do agree that they are different functions.
Now thanks because as I have seen it Chokepoint 2.0 which is the Federal Reserve's function as bank supervisor debanking people which is one of the key reasons that people are getting into digital assets like the president's own children. When you get debanked and you have 20,000 employees that you need to make payroll for and they're told we're closing all your bank accounts. Where are they going to go? They're going to go to digital assets because you don't have to trust a bank and you don't have to trust the government. Well, our own Fed is driving people into digital assets because finally there's something out there you don't have to trust in order to keep your wealth. Do you think the Federal Reserve Board and Reserve Banks have been independent from politics in the last several years?
Thank you, Senator. I don't believe that it was a set of nonpartisan, non-political objective technocrats that decided that the Federal Reserve should be the institution that fights climate change. I don't believe that Operation Chokepoint was a non-political act either. And so if confirmed to the Federal Reserve, I intend to fully respect independence with respect to monetary policy. As you say on regulatory work there's a lot of work to be done and I applaud the work this committee has done on Operation Chokepoint and other matters that you mentioned.
Can you help us as a member of the Reserve to set up a system that clearly demarks the independence on monetary policy but recognizes that the president through his regulatory supervision and oversight of the executive branch does have a role in bank supervision?
Thank you, Senator. If confirmed, it is absolutely an issue that I would greatly welcome working with you and your team on.
Thank you. I yield back.
Senator Warnock.
Thank you, Chair. On Monday, August 25th, President Trump escalated his continuing assault on the independence of the Federal Reserve by attempting to illegally fire Fed Governor Lisa Cook. Lisa Cook is a first rate economist and a Georgian that we're all very proud of. No president has ever attempted to fire a Fed governor before. This stems from unsubstantiated allegations that Governor Cook has denied. Everyone understands what's happening here. The president's tariffs are damaging the economy. We can all see that. The economy is struggling as he's created a 10% tax on virtually everything making Americans poorer and poorer all to give a tax cut to billionaires and now he's insisting that the Fed cut interest rates to try and mask the fact that his economic policies are failing miserably. Families deserve a Fed that will work for them, not for the president. And Lisa Cook is simply being scapegoated for Trump's failed economic policies. Dr. Miran, the Fed's job is to maximize employment and keep prices stable. That's it. Not to soothe the president's ego, not to inflate his poll numbers, not to carry out his political agenda. A strong central bank serves families, investors, and the entire world by just relying on economic data and focusing on employment and prices. There's a reason why our economy, even when it struggles, is the envy of the world. There's a reason why people invest in America. And I think that the independence of the Fed has a lot to do with that. You seem to believe the opposite. For example, in this Manhattan Institute paper published last year that I would like to enter into the record, you propose reforming the Federal Reserve by explicitly tying Fed board membership to the result of elections, giving the president control over the Fed, and allowing the president to have complete authority to fire Fed governors. Congress would need to implement these reforms. Is that correct?
Thank you, Senator. That is not correct. I did not recommend giving the president control over the Fed because what I recommended doing was a package of checks and balances and one of the other checks and balances included in that package was strengthening the system of regional reserve banks and ensuring that they vote at every meeting which would then give them the majority over the board of governors.
I've read your paper and I disagree with your characterization of the argument. Do you think our economy would be better off with President Trump setting interest rates unilaterally?
Thank you, Senator. I don't believe that's a situation which is currently happening.
But my question is do you think our economy would be better off if he were able to set interest rates unilaterally? Yes or no?
I think the president has had a series of excellent calls on monetary policy over the recent years. However, I do think that independence of the central bank from the political cycle is key to its long-term success in delivering superior economic outcomes.
So, if a Fed governor disagrees with the president over interest rates, should the president be able to fire them basically based solely on that policy disagreement?
I'm afraid that I have no legal training, particularly not in constitutional employment law. So, that question is not one that I am capable of answering.
Do you think the president should be able to fire someone based solely on a policy disagreement? You've been nominated to serve on the Fed.
Again, I have no means with which to evaluate that claim, lacking any form.
Do you think it's appropriate for the president to threaten to fire them as he's threatened to fire Chair Powell?
Again, it's not my prerogative to have views on such a question.
Well, I think you have opined on such questions. Here's the problem with your answer. Trust in institutions takes years. It takes decades to build. And this political assault on the Fed's independence threatens market stability, reducing investment in our country, costing jobs, and jeopardizing the retirement accounts of millions of Americans. Dr. Miran, in your view, what happens when businesses and consumers and investors lose faith in the Fed's ability to act independently from politics, whether it's from the left or the right?
Thank you, Senator. Should financial markets and households and firms come to view the Fed as not independent, it presumably will have a material effect on bond yields and inflation expectations that would be adverse for economic outcomes.
I think that there's a reason again that America's economy is the envy of the world. I think the independence of the Fed is an important part of that and based on the statements that I have seen so far, I'm convinced that you're not going to exercise that kind of independence, I think you're conflicted in this role. That you would be a mouthpiece and a proxy vote on the Fed board for President Trump if you were confirmed. And I find that deeply alarming and concerning as I think about the retirement accounts of people of Georgia as well as the strength of our overall economy. Thank you so very much.
I yield myself five minutes. Mr. Burke, Americans are dying at record rates from fentanyl. Over 74,000 overdose deaths in 2022 alone. Much of this fentanyl is trafficked into the United States through cartels with ties to Chinese precursor companies. President Trump rightfully designated these cartels as foreign terrorist organizations and signed the HALT Fentanyl Act to fight against it. How are you going to enforce tougher sanctions on the financial networks that enable this flow of poison into our communities?
Thank you, Senator, for that question and I very much share your concern about the risk posed by that activity. I'm encouraged by the actions that have been taken already by this administration to target cartels with additional authorities and indeed as you're aware, FinCEN has implemented measures against banks in Mexico that continue to support some of those activities as well. I think going forward and if I'm confirmed I look forward to getting more information about the details a lot of that's intelligence driven as it should be to understand where there are networks and nodes and typologies to move money through the system that can be vulnerable to disruption with the right tools and developing those tools using all the range of authorities available at Treasury and implementing that robustly including through diplomatic engagement with other countries where we need cooperation on doing that. So, if confirmed, I look forward to working on that.
I look forward to that, too. Thank you, Mr. Hobbs. Each year, HUD distributes tens of billions of dollars of housing assistance to families in poverty through programs like the housing choice voucher program in Section 8. Unfortunately, these programs punish people for working and for getting married. How will you specifically reduce these harmful penalties that discourage marriage and career advancement as they jeopardize housing support?
Thank you, Senator, for the question. And that's an issue I hold very deeply. Unfortunately it is currently statute that we take about 30% of a low-income person's income, whether they get married, we'll take their spouse's income, or they get a job increase, we'll take 30 cents on the dollar. And as you said, it's incredibly disincentive to work and marriage. But one thing we are doing is we're exploring every opportunity and every regulatory and statutory flexibility we can to empower local public housing authorities to promote self-sufficiency. We're looking at things such as time limits. We're looking at things such as work requirements, the family self-sufficiency program, and others can be utilized towards this end. But I would love to be able to work with this body on those statutory obstacles.
Great. I look forward to working with you on that too when you're confirmed. Mr. Curts, last month, Senator Warner and I introduced the REside Act, a bipartisan piece of legislation that was passed through this committee as part of Chairman Scott's Road to Housing package. It's a common sense proposal that directs existing funds through the home improvement partnership program to renovate blighted industrial buildings into homes for working families. When I was home for the August recess, I met with mayors, Republican and Democrat, of small and big cities all through the state of Indiana, and they very much welcome this type of solution to the housing crisis in their communities. But how else can in your new role when you're confirmed, can you innovate proposals like this to help tackle our dire housing supply crisis?
Well, Senator, thank you for the question and I do commend this committee for the actions that they've taken specifically in that Road to Housing Act and it's part of what is so exciting about working in this space is that I think we all agree on what the goals are here which is to again increase the amount of affordable housing and to decrease the amount of homeless Americans that we have. What you touched on is that again that we need to innovate in this space. So renovating old buildings like you just mentioned is a huge opportunity. They're looking at the HUD housing code for manufactured homes is another opportunity. And in fact, this Monday, the Department of Housing and Urban Development will be having a demonstration on the National Mall of all the new type of housing availabilities we have there. Looking at making it easier for pre-fabricated homes to go and be put in place in our cities and really going back to those mayors and those local communities as you just mentioned and hearing from them what their community is yearning for and what will work for them there is a way to continue to move that ball forward.
Thank you. Look forward to working on those issues with you as well. Thank you to all of you. I support your confirmation to the important roles that you play. With that, I yield to Senator Blunt Rochester.
Thank you, Mr. Chairman and thank you to the nominees. Dr. Miran, in your testimony, you spoke about the independence of the Federal Open Market Committee. You also said that the independence of monetary policy is critical. So I'd like to begin with a yes or no question as well. Do you believe the Federal Reserve should remain an independent entity? Yes or no?
Thank you, Senator. As I said in my opening statement, the independence of the Federal Reserve is critical to delivering superior long run outcomes for the economy.
And I'm really glad to hear this, especially since you've said on the record, quote, 'I've always been clear that the independence of the Fed is of paramount importance.' During this hearing, senators on both sides of the aisle have spoken to the independence and independence from political influence of the Fed and literally almost every person, almost everyone, Democrats and Republicans have spoken to that. So this shouldn't be a controversial opinion. Yet, in the past eight months, this administration has tried time and time again to exert more influence over the Federal Reserve, an independent agency. Here are a few headlines from news articles that I'll be submitting for the record from Forbes. Trump might greenlight major lawsuit against Fed Chair Jerome Powell. NPR. Trump floats firing the Federal Reserve chair as White House criticism boils. From the Wall Street Journal, Uncharted Waters: Trump's attempt to take charge of the Fed. From CBS News, Trump's unprecedented firing of Fed Governor Lisa Cook raises untested questions. Mr. Chair, I ask unanimous consent to submit these articles for the record. The president has tried and failed to fire Chairman Powell. So now he's on to his latest target, Governor Lisa Cook. She is currently confronting what appears to be an intentional smear campaign and attempted firing. She has and has continued to serve our country admirably. Ranking member Warnock referenced Nixon, but to my knowledge in the 111-year history of the Fed, no president has attempted to influence the Fed so blatantly and egregiously as our current president. Dr. Cook is a Truman scholar, a Marshall scholar, graduate of Spelman College, went on to Oxford. Her body of work is a direct rebuke of the failed promises of trickle down economics. And it's not lost on me that she is the only and first ever black woman to serve on the Federal Reserve Board of Governors. First Chairman Powell, now Governor Cook, who's next? Many of my colleagues have spoken to Dr. Miran's potential conflict of still being employed by the White House and potentially serving on the Fed board. Even in the questioning about what are some of the qualifications, what are the powers that the president has? One of the things that you said, Mr. Miran, is I have no legal training on the issue around removal of Fed governors. But that didn't prevent you from writing a 25-page document that talked about that exact topic. The bottom line, the strength of our economy relies on an independent Federal Reserve, and Americans rely on a strong economy to afford the basic goods and services needed to survive and thrive. I hope that I can count on my colleagues to voice all of the collective support for a Federal Reserve Board to stay strong and do that amongst or against any of the president's attacks on this independent operation. I again am very concerned for where we're going as a country when there aren't those checks and balances and again my colleagues across the aisle all spoke pretty much unanimously to the independence of this agency and so I look forward to seeing us put our proverbial money where our mouth is. Thank you and I yield back. Senator Van Hollen.
Thank you. And I want to start by associating myself with the comments of my colleague Senator Blunt Rochester with respect to all her comments, especially with respect to Lisa Cook and what's happening there. Dr. Miran, I've been following closely these proceedings and your responses. I just want to confirm that you would like to keep open the option of returning to the Council of Economic Advisers after your four-month stint should you be confirmed. Is that right?
Thank you, Senator. As I said before, the advice that I received from counsel was to...
I'm just asking about your personal ambitions and interests. Do you want to keep open that option? Well, you know, four and a half months from now is on the one hand a short time, but it's also a very long time. And I have no idea what the world is going to look like.
But the fact that I mean, you could resign, could you not?
I could and as I said earlier, if I were nominated to a term that's longer than four and a half months and confirmed to that term, I would resign.
So, I just don't know why you have such a hard time responding to my question, which is you want to keep open the option of returning should your term be four months. That's what you want to do, right?
I am following the advice of counsel.
Did the counsel advise you that you could resign if you wanted to?
Yes, counsel did advise that I could if I wanted to.
Of course you could. And so you want to keep open the option of returning to the Council of Economic Advisers. So my question here is pretty simple. It would be up to President Trump as to whether or not you were able to return to the Council of Economic Advisers, right?
Well, as the Council of Economic Advisers is a part of the president's administration, the president would be able to decide who staffs that agency.
Exactly. Right. He could decide not to bring you back, right? This is pretty straightforward.
Yeah. The president can decide who staffs that agency.
Yeah. And so, do you think that President Trump would want to have you back at the Council of Economic Advisers if you defied his wishes in your votes and actions on the Federal Reserve? Should you be confirmed?
I do not know the inside of anyone else's mind. What I can tell you is that if I am confirmed to the Federal Reserve, I will act independently based on my own independent analysis of the economy and economic policy.
Well, let me help you out. And I think a couple of your boss's tweets would be reflective of his state of mind. This is a tweet from the first of this month. Quote, 'Jerome, too late. Powell, a stubborn must substantially lower interest rates. Now, if he continues to refuse, the board should assume control and do what everybody knows has to be done.' So, are you seriously telling me that if you were to vote and exercise judgment that was not consistent with what the president of the United States wants that the president would not have you back at the Council of Economic Advisers, the job that you want to hold open for yourself?
Thank you, Senator. I actually interpret that statement as an exhortation to independent action by encouraging the members of the Federal Open Market Committee to vote their own views as opposed to taking direction from a chairman of the Federal Reserve. So I interpret those words as rather the opposite of what you do.
Have you not seen the tweets where the president has threatened to try to fire Powell? Have you not seen those?
I've seen posts on Truth Social.
Okay. Well, I mean, he has done it repeatedly. And so, for you to suggest that the president would somehow welcome you back with open arms at the Council of Economic Advisers, should you vote in a way that is opposed by the president of the United States, is just not credible in any way given the president's repeated actions. Let me ask you about the situation over at the Bureau of Labor Statistics. Here's another tweet, actually the same day as the earlier one. Today's job numbers were rigged in order to make Republicans and me look bad. I have a very simple question. Dr. Miran. Do you think that the statistics were rigged in order to make the president look bad?
I think the statistics were allowed to deteriorate in quality steadily over the long...
That's a very different issue. We may agree or disagree on that, but that's very different than suggesting that they were intentionally rigged. Are you seriously suggesting as the president did that the numbers were rigged? Just a yes or no.
I believe that the numbers were allowed to deteriorate without taking corrective action.
I mean, it's nonresponsive.
Thank you. And good afternoon. Normally for a nominations hearing, we use our five minutes to ask questions of the witnesses. And unfortunately, these are not normal times. You know, I've been watching hearings from another part of the Senate today, and I believe that to make a long story short, this administration is making Americans both sicker and poorer. And so today, the nomination of Dr. Miran to be a member of the Federal Reserve's Board of Governors is an attempt to rewrite the tragic story that the Trump economy is telling the American people. This administration wants to find someone else to blame for the chaos that we're all experiencing. And that's why they are illegally attempting to fire a current member of the Federal Reserve. That's why they fired the leader responsible for providing objective economic data to the American public because they did not like the facts. Dr. Miran, who's before us today, is one of the chief architects of the Trump economy. So, let's talk about that economy. The American people remember just eight months ago when this administration took over. This president promised to end inflation on day one. He promised energy and electricity prices would be slashed. He insisted that housing prices would decrease and he said that he would make America affordable again. Eight months later, what we know is that President Trump has no wins to celebrate. His promises have proven fraudulent. Prices have not gone down. In fact, they've gone up. The Trump tariffs, of which Dr. Miran is a strong proponent, are harming Maryland families and businesses. Prices of groceries and other goods continue to rise, and middle and working-class Americans are worried. This week, a new poll found that a record low number of Americans now believe that their hard work will improve their standard of living. I believe that Dr. Miran knows the Trump economy is in fact failing and that's why he's publicly celebrated Trump's firing of the leader of the Bureau of Labor Statistics because you know what? He did not like the facts. It's pretty obvious to me and to everyone else paying attention. Trump's economy is an unmitigated disaster. It's harder than ever. I just met with a number of young people who came to me and it's harder than ever for a young American to buy a home and they know it. And the American dream is slipping further out of reach for millions of people. America's promise has always rested on the idea that its citizens can have a fair shot at the American dream. Yet, President Trump's economy is destroying that foundation. And this is an ugly story. The American people are struggling as a result. And this administration is searching for a scapegoat. That's why the president is now imposing political influence on the Federal Reserve. How disgusting that is. Which is bound to hurt Marylanders' retirements, savings, and mortgages. The president's unprecedented illegal firing of Dr. Lisa Cook won't improve our economic outlook and it will continue the chaos and reduce confidence from American families and businesses. This president and the administration he's assembled has made it harder for Americans to build wealth and to get ahead. It is a devastating legacy that seems only to worsen by the week. So Dr. Miran's nomination would only take us further down this disastrous economic path that this administration has set. This nomination won't make the lives of Americans better. And it will not in fact lower cost of inflation or fight it. It won't give 20 million Americans their health care back. It won't provide for our nation's most vulnerable. And it will not restore confidence that the Federal Reserve is safeguarding the American economy. For these reasons, I cannot support Dr. Miran's nomination and I cannot sit back while the president injects chaos into the economy to settle political grievances. Too many Marylanders and too many Americans are suffering because of the sheer economic ignorance of this president and the cowardice of nominees who know better but refuse to speak up. So, thank you so much and I yield back.
That concludes the question and answer portion of today's hearing. Prior to adjourning, I have some final housekeeping announcements. Before I do that though, I'd like to thank our nominees for testifying before the committee today and thank you for your willingness to serve our country. For senators, all follow-on questions for the record must be submitted by 12:00 p.m. Friday, September 5th. And for our witnesses, please respond by Monday, September 8th at 10:00 a.m. to the written questions you receive in order to facilitate this committee promptly processing these nominations. This concludes my brief stint as Chairman Banks of the Senate Banking Committee. With that, the hearing is adjourned.
Get started here this morning. Today we once again convene to consider a slate of well-qualified nominees put forward by President Trump. Each nominee here shares a commitment to ensuring the American economy remains strong, competitive, and secure. From housing affordability to protecting our financial systems from bad actors to maintaining confidence in the Federal Reserve. The work of these nominees directly impacts the lives of everyday Americans and the prosperity of states like my home state, South Carolina. More than 450,000 small businesses operating in South Carolina alone. Decisions made in Washington have a direct impact on local jobs and economic growth. The Senate Banking Committee must ensure that those entrusted with these roles are capable, accountable, and focused on advancing opportunity for all Americans. The nominees before us will play a key role in addressing these economic challenges and ensuring America's workforce remains competitive. Let me briefly highlight the impressive credentials of each nominee before us today. Mr. Ben Hobbs, nominated to serve as HUD's assistant secretary for public and Indian housing. He is someone I know very well. As opposed to reading about him, I'll just simply say that from opportunity zones to his work on my staff, he has proven to be an excellent, excellent person committed to the success and the prosperity of everyday Americans. The one thing we need more of are people who are sacrificial in providing service to our country in varied roles throughout. And it has been my honor and privilege to watch Ben succeed and now get paid a lot more money than I will ever get paid. Thank you for being here. Next we'll go to Mr. Ronnie Curts. I know that you're not going to make that much money doing your job anyway, so you get the point. Mr. Ronnie Curts, nominated to be HUD's assistant secretary for community planning and development, bringing practical on the ground experience from his leadership in the state of Georgia. He knows firsthand the responsibilities of this position from code enforcement to zoning, building inspections, and public hearings. That kind of hands-on knowledge is critical at HUD, where decisions must balance local realities with national priorities. Together, their experience will help guide federal programs to better serve communities, and I look forward to their leadership in carrying out our Road to Housing Act when it becomes law. Dr. Stephen Miran, nominated to serve as a governor of the Federal Reserve Board, is well known on this committee. As chair of the Council of Economic Advisers, he has already helped guide the Trump administration toward policies that have boosted domestic production, reduced trade deficits, and increased revenues for the Treasury Department. His expertise will strengthen the Fed at this critical moment. Mr. Christopher Pilkerton, nominated to be the Treasury's assistant secretary for investment security and will lead CFIUS and the department's outbound investment screening efforts. He brings the legal and financial experience needed to keep America secure from hostile foreign influence and to ensure US investment does not aid our adversaries in key sectors. Mr. Jonathan Burke, nominated to be Treasury's assistant secretary for terrorist financing, has a proven track record both in government and in the private sector. From his early days at Treasury to his work implementing rigorous anti-financial crimes controls in the private sector, Mr. Burke understands the stakes of his mission protecting the American economy from those who would do it harm. Each of these nominees represent President Trump's commitment to unleashing the golden age of American prosperity. An age where families can access safe housing, where small businesses in South Carolina and across the nation can thrive and where the United States can stop those who would do financial harm and stay ahead of those who want to undermine our economic strength. Thank you, members.
Thank you, Mr. Chairman. So, Mr. Chairman, I believe we're holding the wrong hearing today. President Trump has conducted a months-long campaign to seize control of the Federal Reserve. He's tried to intimidate and threatened to fire Chair Powell. And when that didn't work, he illegally attempted to fire Federal Reserve Board Governor Lisa Cook so that he could seize control of the Fed. Now, why does President Trump want to control the Fed? Well, because the president promised on day one, those were his words, on day one to cut costs for American families. And we are now on day 227 and costs are not down. Donald Trump has failed to deliver on his promises. The cost of groceries up, utility bills up, housing up, health care up, backpacks, back to school shoes and baby strollers up. Instead of taking responsibility for his failing economic agenda, instead of changing his tariff policies, instead of reversing his disastrous energy policies, and instead of restoring health care coverage that he helped rip away from 15 million Americans, Trump wants to make the Federal Reserve his scapegoat. Illegally removing a Fed governor is a key step in Trump's scheme to destroy the independence of the Fed and turn it into his own personal toy. He wants to install his lackey so that we will have a Fed that uses its power to please the president, but that can't be trusted to keep inflation under control. If Donald Trump seizes control, Fed decisions won't be driven by data. Instead, the Fed will follow Donald Trump's political whims. When the Fed loses its credibility, businesses and consumers stop trusting it to control inflation and start acting like inflation is here to stay. And that raises prices across the board for American families in the long run. This is not hypothetical. We've seen it before in other countries and right here in the United States. It happened in the 1970s when President Nixon bullied the Fed into keeping rates too low for too long and led to years of stagflation where both interest rates and unemployment and inflation stayed high. It happened more recently in Turkey and Argentina when their authoritarian leaders took over their central banks and inflation reached record highs, surging above 80% and 200% respectively. Deep down, even my Republican colleagues know that a presidential takeover of the Fed is a recipe for disaster. There are members of Congress who spent their careers being apologists for the Fed. Boy, I am not one of them. I have worked with Republicans, including Republicans on this committee, for years, on common sense reforms to make the Fed more transparent and more accountable to Congress and the public. Heck, I have been more vocal than anyone in the Senate in calling on the Fed to lower interest rates for years now. But that is not what President Trump is doing here. The hearing this committee should be having today is to investigate...
President Trump's ongoing assault on the independence of the Fed and his efforts to intimidate and illegally remove Fed policymakers. The committee should be putting our efforts toward stopping Trump's reckless takeover of the Fed, not holding a business-as-usual confirmation hearing to help grease the skids for Donald Trump to grab more power. Mr. Chairman, every single Democratic member of the committee wrote to you last week asking that you postpone this hearing. Dr. Myron's nomination and Trump's demand for quick confirmation before the September Fed meeting are directly tied to his illegal attempt to fire Governor Cook and to Trump's ongoing effort to take over the Fed. Dr. Myron, during your tenure as chairman of the Council of Economic Advisers, your primary achievement has been your willingness to make increasingly absurd economic claims on behalf of every single reckless Trump move. You have helped design Trump's chaotic tariff policies that are driving up costs for families. You also played cheerleader for the one big beautiful bill that cuts health care for 15 million Americans and spikes household electricity prices nationwide by up to 18% over the next decade. Even if the Republicans on this committee force through his confirmation, Dr. Myron's tenure will be tainted. No one, not the American public, not investors here at home, not the worldwide financial markets will trust him as an independent voice. Every claim he makes and every vote he takes will be tainted with the suspicion that he isn't an honest broker, but instead is Donald Trump's puppet. If we allow the Fed to become a political football, every American consumer, every American worker, and every American business will pay a long-term price. Thank you, Mr. Chairman.
I will now swear in the nominees. Will you please stand, rise, and raise your right hand? Do you swear or affirm that the testimony that you are about to give is the truth, the whole truth, and nothing but the truth? So, help you God. Do you agree to appear and testify before any duly constituted committee of the Senate? You may sit down. Your written statements will be made part of the record in its entirety. Please keep your oral comments, however, to five minutes. Mr. Hobbs, you are now recognized.
Thank you, Chairman Scott, Ranking Member Warren, and members of the committee for the opportunity to sit before you today as the nominee of assistant secretary for public and Indian housing at the Department of Housing and Urban Development. I am honored to be here, and I look forward to partnering with all of you to ensure low-income Americans have access to decent, safe, and affordable housing and are put on a path towards self-sufficiency. I would first like to thank President Donald Trump and Secretary Scott Turner for the nomination and their confidence in me to return to the Office of Public and Indian Housing in its most senior role. I would also like to extend my gratitude to my former boss, Chairman Scott, for the opportunity to work as a part of his staff here in the US Senate. As the current principal deputy assistant secretary for PIH, I would also like to express my appreciation to the entire staff of PIH who conduct themselves with professionalism and work tirelessly to improve our programs. Last, but certainly not least, I want to thank my lovely fiance Madison, my parents Fred and Rebecca, my brother Jacob, and all of my friends who are here today offering their unwavering support through this process and my career in public service. Growing up in the small town of Alliance, Ohio, my family instilled in me the values of hard work, faith, and cheerful service to others. I remember fondly my first job helping Papa bail hay in the summer, going to Sunday school with grandma, and doing regular community service projects with my Boy Scout troop. Growing up, I also witnessed poverty and how some of our best intended welfare programs often stifled the work ethic and family formation of some of my peers. My upbringing ignited in me a passion for public service and a drive to improve the social safety net and to help low-income Americans on the path to self-sufficiency. I'm currently on my second tour of duty at HUD PIH. During the first Trump administration, I served as a senior adviser and drove the development and implementation of several policies, including the 2016 expansion of the moving to work demonstration program and HUD's effort to reposition public housing to a more sustainable platform. Later in the first Trump administration, I served on the domestic policy council as a special assistant to the president and was the council's lead on affordable housing, economic development, welfare, and homelessness. It was in this role where I first met and worked with now Secretary Scott Turner on the White House Opportunity and Revitalization Council and on the implementing regulations for the opportunity zone tax incentive. I have been blessed to work as a congressional staffer in both the House and the Senate. While on staff for Chairman Jason Smith on the House Ways and Means Committee, my work focused on policies that promoted work, self-sufficiency, and tribal sovereignty. At the committee, I helped draft and pass several pieces of bipartisan legislation that strengthened work requirements for welfare and expanded tribal sovereignty in the child support program. While serving now Chairman Scott on the committee on aging, our work focused on his opportunity agenda to uplift millions of Americans. My policy dedication and background in housing, welfare reform, economic development, homelessness, older Americans, persons with disabilities, and tribal affairs in both the executive and the legislative branch have prepared me well to serve as the next assistant secretary of public and Indian housing. In my current role of PIH, I have made it a priority to get outside of the beltway and hear from our stakeholders. I have met with tribes, residents, staff, and public housing authorities around the country, including visits to Massachusetts, South Carolina, North Carolina, Ohio, New Jersey, Alabama, New York, Connecticut, Wisconsin, Alaska, and the District of Columbia. On these trips, I have heard and seen both heartwarming and heartbreaking stories. Heartwarming stories of a resident who transformed her life and moved from being a resident to the now deputy director of a housing authority and heartbreaking stories of a resident who has lived her entire life in deteriorating public housing from birth to her now senior years. If confirmed, I commit to you. I will work tirelessly to ensure we dramatically increase the number of heartwarming stories and put an end to these heartbreaking stories. I will do everything I can to execute Scott Turner, Secretary Turner's vision to ensure our housing programs are a trampoline for residents on the path to self-sufficiency, address the deteriorating conditions of public housing, and strengthen oversight and accountability of public housing authorities. Thank you, Chairman Scott, Ranking Member Warren, and distinguished members of the committee. I look forward to your questions.
Thank you, Mr. Hobbs. Next will be Mr. Kurtz.
Chairman Scott, Ranking Member Warren, and members of this committee, thank you for the opportunity to appear before you today. I am honored and humbled by President Trump's confidence in nominating me to be the assistant secretary of the Department of Housing and Urban Development for Community Planning and Development. I would also like to thank Secretary Turner for the vision he has outlined and servant leadership he has provided for this department. I'm energized and encouraged by the prospect of joining this team should I be confirmed to this position. As importantly, I would like to thank those who have been behind me every step of my life. From Duth, Georgia to Athens to Dunwoody to Grovetown to Washington DC, I've been blessed to be supported by those who have seen the best in me and helped me cultivate that. For that, I am forever grateful. Among the many friends, family, and colleagues here today and supporting me from afar, none are more important than my parents, my father and best friend, Jerry, and my mother and hero Sue. There are no words to capture the love you have given me, and my thanks will never be enough. These two raised me in a working-class home in Gwet County, Georgia, and taught me to love this country and strive to serve it. I'm the first member of my family to graduate college and in my time at the University of Georgia, I came to the realization that local government is where one can affect their communities most immediately. I since spent most of the past decade serving local governments in Georgia in the field of community development, first in the city of Dunwoody, a suburb in metro Atlanta, and then as the director of community development in Grovetown, nestled between rural Georgia and Augusta. In these roles, I dealt directly with citizens on a daily basis and implemented a variety of reforms to help drive their communities toward their vision. These opportunities have taught me several valuable lessons about development in this country. First, while is perhaps cliche, every community is different, and there is nothing more intimate and personal to a community than the nature of its housing stock. My home of Columbia County, Georgia, directly borders the city of Augusta, and the vision the citizens of these two communities have for their futures are almost polar opposites. This is to say nothing about the differences between these communities and those in metro Atlanta, let alone across this vast nation of ours. Second, government regulation, even at the smallest levels, has a way of stifling development. Many builders in Georgia who wanted nothing more than to add affordable homes to their communities have a story to tell about me as a local government servant, having to shepherd them through the endless costly hoops to do so. I've spent innumerable hours of my career rewriting ill-conceived sign regulations, antiquated zoning codes, and onerous tree ordinances, and then maneuvering the time-consuming public process to get them adopted. This lost time and money leads to a simple result: less affordable homes for hardworking Americans. The issues the position for which I am nominated addresses—community development, disaster relief, and homelessness—are issues that manifest locally and are solved locally. Misplaced federal regulation will only serve to stifle that.
Stephen, I'm about to say this and I want your approval. Does he do that?
And after the president says something, does he call you up and say, 'Stephen, was that okay? Are you okay with this?'
Nope. I have an advisory role.
Okay. Now, sometimes intelligent adults, reasonable people disagree. Is that true?
Is it part of your job description when you disagree with something the president says to call a press conference and say he's wrong about this and let me explain to you why. Is that part of your job description?
Is that part of any the job description of any aide that you know of to President Biden?
How about for President Obama?
How about for President Clinton?
No. We don't live in La La Land, do we? Do we?
No. Now, monetary policy is important and the Fed is in charge of it. But monetary policy is not the only thing that's important. Fiscal policy is important, isn't it?
Fiscal policy is extremely important.
And I don't care how low the Federal Reserve lowers interest rates. If the United States Congress is profligate in its spending, if it spends money like it's pond water, if it runs up 37 trillion in debt and deficit spends to the tune of 7% every year, that also has an impact on employment and economic growth and inflation, does it not?
Absolutely. And I think people often make a mistake by looking solely at monetary policy when fiscal policy is a key driver.
And in fact, the Federal Reserve can lower short-term rates through the open market committee all you want, but that doesn't necessarily mean that long rates 10 years and above are going to go down, does it?
Right. Because the bond market counts too, doesn't it?
If the bond market thinks that inflation is on the horizon, those rates are going to keep going up or at least stay steady, isn't that accurate?
Yes. The Federal Reserve does not control the long end of the yield curve.
Okay. So, what Congress does matters, does it?
My good friend Senator Warren says, 'You're Donald Trump's puppet.' Are you Donald Trump's puppet?
Not at all. I'm very independently minded as shown by my willingness to stray from consensus and have out of consensus views. And I believe that I will continue to be as independent in my thinking process if confirmed.
We're going to hold you to that, governor, future governor. You need to call him like you see him. There's nothing wrong with politicians in Washington offering their opinions. You can't stop them. But we need a monetary plan that was put together by something other than vodka and darts. And that's what we had the Federal Reserve for. Now, you're going to get a lot of advice from politicians. I'm not saying they're always wrong. Even a blind chicken finds a mealworm now and then. But you've got to call them like you see them and ignore nothing wrong with people giving their advice, but ignore all the rhetoric from all politicians. Will you give me that commitment?
Thank you. Thank you, Senator Kim.
Thank you, Chairman. Dr. Myron, I wanted to just pick up on something that you said earlier. So, if I heard you correctly, if you are confirmed to this, you are not going to resign from your current position at the White House.
Thank you, Senator. I have been advised by counsel that the legal approach is to take an unpaid absence from the Council of Economic Advisers, cease my CEA activities, and if counsel advises me otherwise I will follow the law and follow counsel's advice.
I guess I just wanted to ask you why did counsel advise you in that way? You have every right to just say no I'm going to resign.
Well, I'm not a lawyer so I can't answer why they advised that way.
You can determine your own career. You know that right?
So you want to go back to the Council on Economic Advisers after this term. Is that correct?
Well, I don't know what will happen. You know the term for which I've been nominated is four and a half months. If I am nominated and confirmed for a longer term than just a handful of months I would absolutely resign.
So I guess you tried to excuse this by saying that this is because the whole package of reforms wasn't adopted. But I guess I just want to read your own words back to you. You said short-circuiting the revolving door between the Fed and the executive branch is critical to reducing the incentives for officials to act in the short-term political interest of the president. Do you still agree with that statement?
Thank you, Senator. As I said before, I believe that a reform of the Fed has to be...
I get that. I understand your excuse on that front, but do you agree with the statement I just read back to you?
I think that considerations like that need to be taken in context of an overall package of reforms and not looked at in isolation.
Okay. Well, look, I think that this very clearly shows that the reason we don't want actions like what is happening before us is because you could very well be continuing to act in a way that is in the political interest of the president because, you know, he is going to be your future boss again at the White House. And so it's one of those things where I'm just trying to think about why do you even want this job at the Fed for four months if you're just hedging your bets and just continuing to hold your position at the White House. I wanted to just continue on a little bit here because you said something I wanted to dig into. You said excessive control by elected political actors (like the president) interferes in good policy and results in bad economic outcomes. Is that something you said?
Senator, I believe that political interference in monetary policy, in making decisions, can erode the outcomes and that it's important for the Federal Reserve to be insulated from the political cycle.
Okay. Insulated from the political cycle. And here you said excessive control. What is excessive control?
Well, I don't have a precise formal definition of that in my head, Senator.
Okay. Well, I guess what maybe I'll walk you through a couple things here. You were saying that you'd like to clarify that members serve at the will of the US president.
Senator, I believe that members can be removed for cause. I believe the Federal Reserve Act specifies that members can be removed for cause after they've been...
I know. I'm just looking at your list of reforms that you like and it sounded like you were saying you said clarify that the members serve at the will of the president. I guess I wanted to just ask you, would it be appropriate for a new president to come in, get rid of everybody on the board, and put in entirely new appointments at the beginning of each presidency? Is that appropriate?
You're referring to the reform proposal, not to current law.
I'm referring to your beliefs. Yes.
Well, so as I said before, the reform proposal was a package deal with a series of checks and balances, and that was one check, but there's offset by other balances and other checks that would diffuse power throughout the Federal Reserve system. That's why we refer to it as a form of monetary federalism.
You also said, quote, 'political independence is inherently undemocratic.' Can you explain that to me?
Yes. So if you had a Federal Reserve that was entirely completely independent with no ability for the president to appoint officials, no ability for the Senate to provide its advice and consent, no ability for the Senate to hold hearings where they receive answers to their questions by Federal Reserve officials. I think that would be profoundly undemocratic and I think it's important that we have democratic oversight as an example when the Senate holds its hearings getting testimony from federal officials.
One final question here. Has anyone in the administration asked you to commit formally or informally to lowering interest rates?
Thank you, Senator Ricketts.
Great. Thank you, Mr. Chairman and ranking member for holding this hearing and thank you to our nominees and your willingness to serve our great nation. The ranking member was talking about inflation. I might note that on Labor Day the average price of gas was $3.15 a gallon and that's the lowest it's been since 2020 and people in my state tend to drive a lot and that's a big factor in household income and inflation and to me that says that the president's policies of unleashing American energy are important and that also actually rolls into another thing that's important for my state of Nebraska which is ethanol. Actually last time I filled up with ethanol it saved me 45 cents a gallon versus regular 89 octane. So, everybody can fill up on ethanol, save money at the pump, clean up the environment. It's great for our farmers and ranchers. And you may say, why are you talking about that right now? Because I'm going to roll into another topic that is of interest here, which is communist threat. China is the threat to America. They want to supplant us as the world superpower and they've made it clear that they are going to use every lever of power to be able to undermine our national security. Confronting this threat requires comprehensive strategy that strengthens our safety, our financial system, secures our critical assets, and closes loopholes for communist China to seek and exploit things in our system. And one of the things that includes is combating our foreign adversaries' ownership of American agricultural land. And thus the tie-in back to my state. In 2010, Communist China owned 13,720 acres of American farmland. In 2023, Communist China owned 277,000 acres of that farmland, and that is a threat to our national security. A lot of that farmland was located by our sensitive military installations. Mr. Pilton, do you agree that that's a threat to our national security?
Senator, thank you very much for the question. I share your concern. In fact, the Chinese penetration in agriculture, agricultural land, real estate, critical technologies is something that we all should be very concerned about from a national security perspective. If I am confirmed to lead the CFIUS committee, then I would look forward to working with you as well as the members around the table, including the observing member of US Department of Agriculture, Secretary Brooke Rollins, who I've worked with very closely before. So I look forward to the opportunity to work with you, your staff, and this whole committee on these issues.
Well, good. I'll look forward to that. Under the Agricultural Foreign Investment Disclosure Act, AFIDA, foreign entities are required to disclose the transactions of American agricultural land to the USDA. Thus your comment about working with Secretary Rollins. USDA then shares the data with CFIUS agencies so they can identify and review the transactions that pose national security risks. However, the Government Accountability Office, GAO, published a report on the AFIDA process which flagged incomplete data reporting, process errors and delays. That's why I introduced the AFIDA Improvement Act. My bill will strengthen reporting requirements and improve data sharing coordination between USDA and CFIUS so that national security risks tied to foreign land purchases are flagged immediately. I look forward to working with you on this issue and more when you are confirmed. In your view, what other enforcement gaps or vulnerabilities in the CFIUS process that pose these threats or what poses the greatest risk or threat from our foreign adversaries? Are there other things in the CFIUS process we can improve upon?
Thank you for the question, Senator. If I have the opportunity to be confirmed, obviously, CFIUS's focus is national security. And my priorities are going to be just that, including focusing on the critical technologies, artificial intelligence, quantum computing, other areas where America is and will continue and must continue to be a leader. Another priority that I have is the non-notification of covered transactions. These are transactions that should be reported that are not reported. And one of the things that I want to do if confirmed is sit down with the entire team including the advising groups, the intelligence community, law enforcement community that plays a role there and find out how we can use the different tools and authorities that CFIUS has to advance that. Finally, I'd like to focus on compliance and enforcement. Obviously, there's a front-end review of the transactions that come through CFIUS, but many times there are mitigation agreements and ongoing compliance, and we have to stay vigilant and ensure that folks are abiding by the agreements that they enter into. I'd also like to say that I think it's incredibly important because I know that CFIUS and national security is a bipartisan matter. So, having that feedback loop with the executive branch, this committee, and your colleagues is going to be very critical.
Yeah. Great. I look forward to working with you on this. And one other thing I'll just mention is, looking at process improvement to streamline your processes to be able to do this more efficiently. And we can talk about that, more of that later. Thank you, Mr. Chairman.
Thank you, Senator Smith.
Thank you, Mr. Chair. Mr. Myron, and welcome to the committee. Thank you to the chair and ranking member. I just have a couple of straightforward questions for you which will hopefully be easy to answer. So, you currently work in the White House as an economic adviser to the president. Correct?
Thank you, Senator. That is correct. I do currently work as the chairman of the Council of Economic Advisers in the White House.
Right. And so, in this role, you've had a hands-on role in implementing the president's political and policy agenda. Would that be fair to say?
That is not correct, Senator. The Council of Economic Advisers is an advisory organization. I have no statutory implementation powers whatsoever.
Well, you've been described as the architect of the Trump tariffs and a vocal proponent of the one big beautiful bill. So, it seems to me that you've been part of the administration's policy and political agenda. Senator Kim referenced just a bit ago about the paper that you co-authored that argued that short-circuiting the revolving door between the Fed and the executive branch is critical to reducing the incentives for officials to act in the short-term political interests of the president. You wrote this and I actually agree with it. So, I mean, here's my concern. Given the nature of your current role and your expressed concern and mine for insulating the Fed board members from the day-to-day political process, I just don't understand how your nomination doesn't break the rule or the goal that you've set out yourself. I mean you previously said that no one can go from being a high political operative to being politically neutral and I mean I agree with you when you have taken on a role of advocating it's very hard to step away from that and I don't know how you could be an exception to that. Last September you criticized the Fed's decision to cut rates as the biggest policy mistake in 2021. But now, I mean where do you stand on that? Is you know that President Trump is in office. You've done a complete 180. I don't understand what your position is on this now. And how can we expect you to be unbiased and neutral?
Thank you for the question, Senator. As I was saying to Senator Kennedy a few moments ago, I think it's a mistake to focus solely on monetary policy when thinking about the path of inflation and employment. And I think that the full suite of economic policies and otherwise affect those outcomes. And what the Fed ought to do is to be forward-looking in its expectations of where inflation and employment are going because those are the mandates that Congress assigned to it. My understanding of how economics works is that a wide variety of policies that have been implemented since January are actually quite disinflationary. Let me give you one example which is the border policy which you might not think of an economic policy but the truth is that if you increase the number of occupants of housing by millions in a relatively short period of time without a dramatic expansion of the number of houses it's going to put upward pressure on rents. So the...
I'm sorry to interrupt you, but I know I just have a little bit of time left and I'm not disagreeing with the fact that the Fed has a broad portfolio and that it is a complex thing, but what I'm concerned about is because of the role that you've had in the Trump administration and now as the president tries to move you to the Fed that we and we are all so concerned about the open question about the independence of the Fed because of the things that President Trump has said. I mean, so I mean, I think we can be pretty clear about what's happening here. This nomination, your nomination, is getting rushed through because the president is frustrated with the Fed for not cutting rates and he sees he wants loyalists on the Fed board. I mean, that's just pretty obvious, I think, to what's going on here. So, I just think it's important that we not lose sight of this. to not lose sight of what's happening and also not lose sight of why the president wants to see rate cuts go down because the economy is in a struggle right now because of the trade war, because of everything else that he is doing and this flailing that is happening I think is the result of it. So my view here Mr. Chair and ranking member is that it is extremely important for this committee to take a stand against politicizing the Fed. That is the best thing for the long-term health of our economy. And that this is not the right step to take if that is our goal. Thank you, Mr. Chair.
Thank you, Senator. Senator Britt.
Thank you so much, Mr. Chair, Ranking Member. Mr. Myron, I appreciate your conversation with me yesterday. Your commitment to Fed independence and just taking so much time talking through questions with me. I look forward to supporting your nomination. To all of you, we appreciate you being here. Mr. Burke, I want to start with you. The role you've been nominated for, it focuses on counter-terrorist and illicit financing. And look, this is something that we saw the last administration literally allow to go to the wayside. When you look at what happened with Iran, us not using every tool in our toolbox to squeeze them dry financially. What happened was billions of dollars obviously moving into the oil regime. We now have an administration that is taking this seriously, understanding that Iran is the largest state sponsor of terrorists and every single dollar that they have, they use to advance that goal. My question for you is looking at President Trump's maximum pressure campaign driving that, I think we've seen real successes here but can you speak generally to the seriousness of this and how critical is it that we enforce the sanctions that are on the books to the fullest extent particularly when we're talking about the Iranian regime?
Thank you, Senator. I very much appreciate the question and I share your concern about the need for sanctions to be effective and I think one way to do that is to understand and as you mentioned President Trump has re-implemented the maximum pressure campaign on Iran and I know from my previous time at Treasury working on that issue what that actually means. It's a multifaceted approach. It's not just about imposing new sanctions on new targets but it's actually complemented by extensive diplomatic engagement with partners and allies around the world and also the private sector to identify the risks associated with exposure to Iran so they can take action as well to curtail that Iranian activity and we've certainly seen that in the past when there is a maximum pressure campaign and that has an effect on Iran's ability to raise funds and move those funds through the system. We also saw just this week, Secretary Bessent announced new sanctions on Iran and had a video message that explained this process. And also what's very important to complement that maximum pressure is that the world understands the United States is intent on targeting actors around the world who continue to support Iran's activity. And that's what the actions this week did. And Secretary Bessent made reference to some of the impacts that those actions have seen in terms of reducing Iran's oil revenue, but also reducing its ability and disrupting its ability to move funds and to move logistics around the world to procure or trade in oil. So if confirmed, I look forward to supporting that effort.
Excellent. I want to kind of drill down on secondary sanctions. I mean, we know particularly in the last administration where we had lax sanctions, where they weren't enforcing them, allowing countries in Southeast Asia to openly disregard our sanction policy and sell Iranian crude oil to China. We saw it happen. I think it's absolutely unacceptable. And I'd argue one of our most effective tools is actually secondary sanctions to discourage foreign countries and entities from doing business with Iran. And I'd like to know what are your thoughts on that and how can we better utilize the secondary sanctions available to us to use them against these nations that attempt to undermine the United States and aid Iran.
Thank you, Senator. I think it's a very important concept and it goes to the multifaceted maximum pressure campaign approach. Secondary sanctions are intended to change behavior. And I think when you add that extensive diplomatic engagement, which has been used very successfully in the past with the credible threat of US action to those actors who continue to support that illicit behavior, secondary sanctions would be very effective at changing that behavior.
Well, I want to stay on national security for a second and Mr. Pinkerton, I'm going to come to you. When looking at China, the CCP is clearly looking to undermine America at every single turn. And one of the ways I feel like they've done that obviously is buying up American agriculture and farmland. I think many of us on this side, particularly on this side, have been fighting against that with bills and legislation trying to push back. I know that this committee continues to be engaged particularly in the CFIUS realm and the ability to properly review the foreign land purchases near sensitive military sites. I can assure you that China is not allowing America to buy up land around sensitive military sites there in China. Right. So my question to you is will you commit to working with us to ensure that we actually are able to move the needle in this regard if confirmed to this role.
Senator, thank you very much for the question. I will absolutely commit to working with you and this committee on these really important national security matters. When it comes to farmland, I think Secretary Rollins has said food security is national security and I completely agree with that. And also working very closely with the Department of Defense to ensure that those bases remain secure and working on some of the legislation that's been presented from this committee. So, from a technical assistance perspective and also meeting with you and your staff, I'd be honored to work with you on that.
Look, we need to get this done. Time is of the essence. So, thank you all.
Thank you, Mr. Chairman. Congratulations to all the nominees. Won't be able to answer or get to all questions for all of you, so I'll submit most of them to the record. I only have five minutes, but Mr. Hobbs, let me start with you. I'm very interested in how we increase the affordable supply of housing in Indian country. So can you talk a little bit about that? What HUD intends to do to help us increase that supply?
Thank you, Senator and thank you for the question. It is a priority of mine. It's a priority of Secretary Turner and President Trump to engage with our stakeholders in Indian country. I recently visited Alaska and the Napakia tribe. I've been to Wisconsin and the Oneida tribe. And one of the things that we're consistently discussing is how to reduce the regulatory burden on tribes. A number of them are actually coming into HUD next week at our tribal interagency advisory committee and we'll be meeting with them and one of the key topics is looking at NEPA, some of our radon regulations and others that really are overly burdensome and just artificially increase the costs of them executing their Indian housing block grants.
Thank you. I look forward to hearing and working with HUD to do more to make sure that we can prioritize this in Indian country and we are working on housing and affordable housing there. So, thank you. Mr. Myron, let me talk to you. I know you've probably received some of these questions as well. My office and I suspect those of my colleagues are being inundated with calls and letters from small business owners. These small business owners say they cannot keep their doors open with prices rising 50 to 145% for toys, shoes, coffee, auto parts, fruits, and vegetables. These business owners are worried they will have to lay off their employees or some of them already have or close their doors and stop serving their neighbors. Yet you told me in February and I quote, 'The economic burden of tariffs imposed by the United States is borne by the country whose exports are tariffed.' Do you still believe that?
Thank you, Senator. So the theory of incidence in public finance and economics, which is a very well-established old literature that's not very controversial, that generally rests upon what economists would call long-run elasticities. And...
I don't need an economic theory. I already went through that in finance classes at UNR, University of Nevada, Reno. I just need to know your position. Do you still believe what your statement was that the economic burden of tariffs imposed by the United States is borne by the country whose exports are tariffed? Do you still believe that? Yes or no?
Thank you, Senator. In the long run, I 100% believe that. In the short run, I've always maintained that there could be volatility.
And does that volatility mean that individual taxpayers and businesses are actually paying those tariffs and having to close their doors? Is that what you are saying is a volatility that we're going to—small businesses may have to close their doors and they're just going to have to suck it up?
Thank you, Senator. I don't believe that there is any material evidence of that to date.
So let me just say on CNN you were interviewed about an auto parts maker in Detroit just had to lay off 100 workers and shut down a warehouse. The owner specifically blamed tariffs and you stated it's always convenient to blame political changes when your business fails. Is that how you still believe? This business owner doesn't know what he's doing?
Thank you, Senator. I was not familiar with the circumstances of that particular business or those particular 100 workers at that time.
So then why didn't you say that at the interview and why did you make a statement like you did? It's always convenient to blame political changes when your business fails. That seems like you're disregarding our businesses altogether. Let me ask you this. Do you believe tariffs are taxes?
Thank you, Senator. Economically speaking, any policy can be modeled as a tax. So in that sense, exactly what I said, any economic policy can be modeled...
Well, what I'm saying is that the answer to your question is that any economic policy can be modeled as a tax, whether it's...
Your question is yes, tariffs are taxes?
My answer is that any economic policy can be modeled as such.
Under the last administration we saw a surge in manufacturing jobs and construction with the US economy adding over a half million manufacturing jobs and construction of factories doubling. Unfortunately, under this administration, we have seen the exact opposite. In August, the US manufacturing sector contracted for the sixth consecutive month due to Trump's tariffs and chaotic trade policy. Earlier this year, you said that manufacturing construction will surge as a result of Trump's tariff and tax policies. Were you wrong?
Senator, I do not believe that that's the case. I believe that they will because the uncertainty from the tax situation is resolved. I believe that just a few months ago there was a huge amount...
But would you say it's transitory?
Well, I think people were concerned that Congress would allow the biggest tax hike in history to throw the economy into a recession and there would be substantial disincentives for investing in the United States. Fortunately, Congress has not allowed that to happen. And the one big beautiful bill has become the one big beautiful act and the uncertainty around the tax situation has resolved, replaced with enormous incentives for investing in America in the form of...
So you weren't wrong. We just have to wait and see.
Well, the bill was only enacted recently.
Thank you, Mr. Chairman. I know my time is up. Thank you.
Thank you, Senator Moreno.
Thank you to all of you for being here. Congratulations on being appointed. I sit back and wonder how President Trump is getting such highly qualified nominees as you. It's always an inspiration to see all of you willing to serve your country. I'll start with you, Mr. Hobbs, for the obvious reason, which is that you're from Ohio. Congratulations on your appointment. I think you're an inspiration to a lot of people who maybe sit around this room and see what's possible in their careers, and I give the chairman a huge props for developing quite an assortment of very qualified people. How do you balance the idea that we're spending a record amount of money to tackle homelessness and yet homelessness continues to increase in this country?
Thank you, Senator, and it's an honor to sit before my home state senator today. Homelessness is an absolute crisis and you know, the HUD's budget has more than doubled in the past four years and yet homelessness continues to rise and rise and rise. And that's because the solution to homelessness isn't just a house. It's also addressing mental health. It's addressing substance abuse and crime and vagrants on our city streets. And President Trump is leading on that with his recent executive order.
That's great. And we had Secretary Turner out to Columbus, Ohio, place called Vista Village that does exactly that. So, it's great to see you guys leaning in and looking for innovative solutions. Mr. Kurtz, I know that you claim to be from Georgia, but your heart is in Ohio. Is that correct?
I am quite the Browns fan. Yes, sir.
There you go. Perfect. I just want to make sure. And that's not easy, by the way. Let me just point out that's not easy to do.
That's leading the question. Leading questions.
So, thank you for being here as well. And talk a little bit about what you think what you're going to be doing when it comes to tackling the housing sector that you're going to be overlooking.
Yes, Senator. So, thank you for the question and again, thank you for the time that we were able to share earlier this week with you and your staff as well. Ultimately, the issue of housing availability and affordability is going to be tackled and accomplished at the local level. What the federal government can do is we can lead on this issue and we can provide resources to execute to that end. What we're seeing currently is the programs that we have established here at the Department of Housing and Urban Development and specifically within my office have a very onerous and duplicative set of requirements to draw down that money. So essentially in order for any community in our states and localities to take money from HUD, they have to have people on staff full-time who have the expertise in how to write one of these grants. That boxes out countless communities throughout our country that are ready and willing to develop but barely have enough people in their offices to just turn the lights on. So, what I look forward to doing if confirmed is joining Secretary Turner's team and looking to take inventory of those programs and looking at ways to make them more effective and efficient to that end.
Well, thank you and Mr. Pilton and Mr. Burke. One of the things that's really been a great tool for President Trump to combat these narco-terrorists is designating these groups as foreign terrorist organizations. Are you willing to work with our office to...
See how we can expand that, especially in Colombia where these terror groups are really wreaking havoc? Mr. Pickle, they're going to start with you.
Senator, thank you for the question. I certainly look forward to working with you and providing any support that I can from the Cyius perspective.
Thank you.
Thank you, Senator. Yes, if confirmed, I look forward to continuing that discussion with you and your staff.
Perfect. Dr. Myin, just some really quick questions for you. I know you've taken a lot of questions already. Have you ever relied on a mortgage application with the objective of getting a lower interest rate?
Thank you, Senator. I have never done that.
Well, you're already ahead of the game then. That's good news. Do you think that it's appropriate for the Federal Reserve to weigh in on DEI?
Thank you, Senator. I don't believe that is a responsibility.
About the climate cult. Do you think that's something that the Federal Reserve should be weighing in on?
It is not something the Federal Reserve should be weighing in on.
Do you think that they should have been weighing in on the wisdom of pandemic spending that set records for government spending? Do you think it was wise for the Fed to encourage that?
I don't believe it was wise for the Fed to advocate for one fiscal program over another.
Do you think it was wise to claim that inflation was transitory when it was destroying working Americans for three or four years?
I don't believe that was wise either.
