Bessent testifies before House on Treasury Department priorities, budget

Not. We ought to make that clear. Are we at war or not?

I'm asking as relation to the cost of going up with for oil and gas that hasn't risen. Has it risen because of the war?

The conflict. So that's what we call it. Our people go into battle and lose their lives.

Mr. Larson, your expired.

Mr. Schwer.

Thank you, Mr. Chairman. And just, Mr. Secretary, you were already heading there. As everyone here, I'm sure knows, PCE, there's actually trimmed, there's which Kevin, new Secretary, head of the Fed prefers. There's actually four or five ways you do balancing on the calculations. So if any of you want joint economic, actually we have a whole chart of how those calculations work.

Mr. Secretary, you will find...

Yeah, Mr. Secretary, you'll find we often choose whatever number works best for the social media posting we're going to do in an hour. So, welcome to Congress. A conversation we've been having actually with some of your staff and some of the Ways and Means staff is something that often never comes up but we're going to have to understand it and find a better way to document it. We calculate about 17% of the US economy now is in the tax-exempt space. And within that space, those who receive the benefit of tax exemption, the basic concept is here's the community good you're doing for not having to pay taxes. Okay, there's something you're an expert on, the 990 form that documents to the IRS, to Treasury, to Congress what is that community benefit. I know your team has been working on this. I know some of the IRS team, we've been working on it. Is there a way to come up with a much more robust universal form so we can understand are these tax-exempt organizations meeting their societal obligation? And if they're not, we can help them meet that. But we don't have enough information today.

My team looks forward to continuing to work with Treasury on making that more robust, so we actually understand both those that are using nonprofit tax exempt as funnels to bad acts, but also are they meeting their community obligations. One that you're probably not going to get as a question from anyone else. We have a fixation of debt management. You know, we're the responsible as policy makers. We're responsible for the debt, not the administration. We do make the policy. What can we do as members of Congress, Joint Economic Committee, Ways and Means Committee to help you convince the markets, you know, please buy a 10-year note? Please. Where we have some visibility to see where we're going. I do have some concerns in the future where the entire world is binging on debt that we have some stressed auctions. What do we do as a country to actually not have that happen to us?

That is perfect, Mr. Secretary. And with that, I yield back, Mr. Chairman.

Mr. Davis.

Thank you, Mr. Chairman. And thank you, Mr. Secretary. Secretary Bessent, as of April 18th, taxpayers received about 3.4 million delayed refund letters. Illinoisans received 110,000. Texans, Floridians, and New Yorkers each received over 200,000 and Californians received 400,000. Almost three months ago on March 9th, Representative Su and I asked you for basic information to demonstrate that Americans are actually getting their delayed refunds. Last month, I requested a meeting with the appropriate staff at the IRS or Treasury for this information. It was not until this morning that I received a response from Treasury. And although the letter contains some high-level information, it is insufficient to reassure me that Americans are receiving their refunds quickly. For example, the information in this morning's letter is substantially outdated. Today's letter cited 2.2 million CP 553E notices when a separate document you sent me a few weeks ago cited 3.4 million notices as of April 18th. Also, the information in today's letter fails to convey the current number of unique taxpayers whose refunds were delayed. Nor does today's letter give a clear understanding of how quickly taxpayers are waiting on their delayed checks. So, Mr. Secretary, could you tell me when, before June 11th, will you or your staff meet with Representative Su and me to walk us through the evidence that taxpayers with delayed refunds received the funds owed to them?

Let me just continue. Mr. Chairman, could you assist me to make sure that we, the American people, receive the information, 3.4 million delayed notices of getting their refunds expeditiously. And also, I'd like to submit for the record a state-by-state breakout provided to me by the Internal Revenue Service where 3.4 million taxpayers live and whose refunds were delayed as of April 18th.

Without objection.

Thank you, Mr. Chairman. And Congressman, what was that number last year?

3.4 million.

No, no, no. I meant for the previous filing season and the year before that.

Well, I don't know the number for either one of those years, but let me move to my last question. I understand that the Southern Poverty Law Center has been indicted. And let me ask, is the Internal Revenue Service involved in that activity in any way?

And Internal Revenue is not urging or suggesting to any other entities that they may lose their tax exemption if they contribute to the Southern Poverty Law Center.

Thank you, Mr. Chairman. I give back.

Thank you, Mr. LaHood.

Thank you, Mr. Chairman. Mr. Secretary, welcome. Thank you for being here today. Thanks for your service. I want to touch on affordable housing. I think collectively, as we travel back to our districts, we continue to hear about the lack of affordable housing. And I would describe it as a rural, suburban, and urban problem. And last year in the working families tax cut bill, we included a number of provisions on affordable housing. And one of those was my bill that was included in there on the affordable housing tax credit. And as you're well aware, one of the most significant barriers to economic success in our communities is housing. And so in the working families tax cut bill, we included the affordable housing tax credit, which includes a permanent 12% increase in the 9% allocation of LIHTC credits beginning this year. Independent analysis have estimated that this will lead to the development of more than 1.2 million more affordable homes nationwide over the next 10 years because of what we did. From your perspective and the Department of Treasury, what will the expansion of the affordable housing tax credits mean for working families struggling to afford housing?

And Mr. Secretary, what do you see for as we try to address this problem, other mechanisms within Department of Treasury or legislatively that we ought to be looking at?

I want to switch topics. I also, beyond being on the Ways and Means Committee, I serve on our select committee on China, which is a bipartisan committee focused on how do we win the strategic competition against the CCP. And I also serve on our intelligence committee. And I want to focus on 45X. And that's a provision in the tax code. And so, last year in the working families tax cut bill, we included the foreign entity of concerns restrictions that pertain to curbing Chinese technology by manufacturers and mandating in that bill that they operate fully independent companies here with no reliance on Chinese entities. Despite these clear requirements, recent media reports indicate that many manufacturers continue to depend on the active support of Chinese engineers overseen by the CCP security officers embedded in their US facilities undermining the objective of fully transferring operational knowledge of these technologies to US companies. So, Mr. Secretary, what is Treasury doing to address and prevent Chinese penetration and involvement in these companies receiving the 45X tax credit?

And to your knowledge, have any of those investigations led to a fruitful prosecution or holding somebody accountable?

Thank you. And I'll look forward to the follow-up with you and your team on this. This is something obviously we got to be heavily focused on. Lastly, in my remaining time, I just want to focus on digital service taxes as it relates to Canada. And maybe obviously we have concerns. We credit the administration for what you've been able to do on DSTs in Europe. But there's still some concerns with our Canadian friends. Can you comment on where we're at with that?

Thank you, Mr. Secretary. Yield back.

Miss Sanchez.

Thank you, Mr. Chairman. Secretary, nice to have you back before our committee. Mr. Secretary, do you believe that all Americans should follow our tax laws?

Yes. Good. So do I. And do you believe that for those Americans who break our tax laws, they should be audited or held accountable?

Yes or no? Simple question.

Let me break it into two. If you're asking me, if you're asking, please don't interrupt me. Please answer that. I came here for answers. If you came here to waste time, I'm going to try to make sure you don't do that. Do you believe that people who lie on their tax return should be audited?

Okay. Do you think that people who break our laws should be held accountable or tax laws?

Okay. Thank you. Very simple. Not a hard question. I'm glad we agree. So, why is it that you are allowing President Trump to have complete immunity from being audited?

And what was your previous statement, sir?

Okay. Can you name the ongoing case concerning President Trump's immunity from audit?

Can you name...

Can you name them, please?

Great. You said that you can't because there's ongoing litigation. You'll get me the name of the ongoing litigation because the only ongoing litigation that I know of is surrounding the $1.8 million slush fund which has already been suspended. The fact is that the judge's ruling in the litigation that references that slush fund only addresses the anti-weaponization fund. It doesn't even address Trump's immunity from audit. So, I would like to ask unanimous consent to enter into the record the judge's order in the Floyd versus Department of Justice case.

Without objection.

Thank you. Now, Secretary, you said you're not an attorney. Is that correct?

Okay. Well, I am and I'm actually proud to be an attorney and know the laws and I know how to read a judicial ruling. Furthermore, I know that since 1962, the Supreme Court has held that ongoing litigation does not prevent someone from testifying in a congressional hearing. So, once again, I'm going to ask, why are you allowing President Trump and his family to have complete immunity from being audited?

Yes. But I just mentioned a Supreme Court case that doesn't bar you from testifying. It's pretty clear to me though, however, that you're not interested in answering questions. You're interested in arguing. Let me ask you this question. If President Biden amended a prior tax return and claimed that he was owed $1 billion, do you think that that would be audited or should it be audited?

Because you're not really here to answer questions. I don't understand why you wouldn't audit that and I don't understand why you wouldn't do the same for President Trump. So, the ruling...

The ruling by the Justice Department?

Excuse me. It's my time. You're not here to ask me questions. I'm here to ask you questions and hopefully you're here to try to answer some of them. I'm curious to know who counts as Trump's family for the purposes of this immunity. Is it his children, his in-laws, his grandchildren, his second or third cousin, his great great grandchildren? Do you know the answer to that question, Mr. Secretary?

I'm not the one that runs the Department of the Treasury or that oversees what is happening with this immunity that has been...

I hope that you're proud of your performance today, Mr. Secretary, because I think I hope you get some, I think it's pretty safe to say that this is probably the most corrupt Treasury Department in our nation's history. And while I am going, while you dance around questions to protect Trump, Americans are suffering in Trump's spiraling economy. Inflation is now rising faster than average hourly wages. Gas prices are at an all-time high with the war in Iran. The cost of groceries has risen 3.2% over the past years. And prices on most goods have gone up because of Trump's tariffs. So, I don't see how you could call that anything other than a failure of the most corrupt Treasury Department in history.

Your time is expired, Miss Sanchez.

Thank you. My time is expired. Secretary, I would love for you to respond to the accusations at your department because I think you were due the opportunity for that.

Yeah, that's great.

Mr. is recognized.

Grace to make a remark like that.

Apparently, my colleagues had a sudden interest in the rule of law. I wonder if you asked her if she thought illegal immigrants should be detained and deported or caught and released what the answer would be.

Well, Mr. Secretary, maybe we ought to ask the question. Should the sons of presidents who have multiple felony convictions, should they be held to the same standard of the American people in terms of crime and punishment? I wonder what the answer to that question would be. Let's not veer off. Apparently, wages and take-home pay aren't the only thing up in this country. Irony and hypocrisy is at an all-time high among my Democrat colleagues.

Now, we see why someone leaves California every two minutes. And that hypocrisy and irony starts with questions about price increases. It was the failed economic policies, one self-inflicted failed economic policy after the other that created the worst inflation crisis in a half a century. Unbridled spending. If you add the hikes in interest rates, it would be about $12 trillion in deficit spending. Waiving work requirement for able-bodied adults on welfare. Giving welfare and health care to illegal immigrants with the stroke of a pen by President Biden. Layers of taxes on American competitiveness. Layers of regulation on our small businesses. And you know what? We pay a premium right now and we will temporarily to defend our country, our children's future against a nuclear Iran, against a radical terrorist regime where we are under imminent threat. We will pay a premium at the pump. But gas prices were at a two-decade low in terms of disposable income. We had gas prices before the conflict below $3. President Biden and four years of Democrat policies, gas prices went from $3.30 to $5. Now, we pay a premium for national security in times of conflict. And when we have imminent threat, we're trying to stave off another addition of nuclear power to the axis of evil. But the premium that the Democrat policies imposed on the American people was for what? A mandate for electric vehicles. What did we get for that premium? We got hundreds of billions of dollars. It was supposed to be 200 billion. 800 plus billions of dollars in giveaways, corporate subsidies for green energy. That's what the American people got. They got higher energy prices, higher electric bills because of this radical climate agenda, the green new disaster. And that was the tradeoff from my Democrat colleagues. So, a little context to this conversation I think is helpful. The results, as you know, Mr. Secretary, were that the American people every year were losing $3,000 in wages. That they had a 21% regressive tax hike. 21%. They were losing $1,500 a year. I mean, are we in the golden age? Well, relative to the dark ages that we were thrust in by these failed policies, we are at the dawn of a golden age because wages are up. Take-home pay is up. GDP, you said, is 2.6%. Well, that's a percent over what CBO said after we passed the big beautiful bill. And on an annual average basis in a budget window, that's $3 trillion to reducing the deficit, which may be why the deficit was reduced over 10% in the first six months of this fiscal year compared to last fiscal year because we actually controlled discretionary spending and have saved up to now almost a half a trillion dollars. It's because Republicans actually cared about not frittering away tax dollars. And we rooted out waste, fraud, and abuse to a tune of over a trillion dollars because we had quadruple revenue from having restructured world trade order and set a level playing field for our farmers and manufacturers. Because of all of that, plus the growth, we have had a reduction in the deficit to GDP for the first time in almost a decade. I'm out of time. I think you're doing a great job. Keep it up. Don't listen to the noise.