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89–659—PDF 2013

S. HRG. 113–389 

NOMINATIONS OF SARAH BLOOM RASKIN 

AND RHONDA SCHMIDTLEIN 

HEARING 

BEFORE THE

COMMITTEE ON FINANCE 

UNITED STATES SENATE 

ONE HUNDRED THIRTEENTH CONGRESS 

FIRST SESSION 

ON THE

NOMINATIONS OF 

SARAH BLOOM RASKIN, TO BE DEPUTY SECRETARY, DEPARTMENT OF 

THE TREASURY; AND RHONDA SCHMIDTLEIN, TO BE A MEMBER OF 

THE UNITED STATES INTERNATIONAL TRADE COMMISSION 

NOVEMBER 20, 2013 

( 

Printed for the use of the Committee on Finance 

COMMITTEE ON FINANCE 

MAX BAUCUS, Montana, Chairman 

JOHN D. ROCKEFELLER IV, West Virginia 

RON WYDEN, Oregon 

CHARLES E. SCHUMER, New York 

DEBBIE STABENOW, Michigan 

MARIA CANTWELL, Washington 

BILL NELSON, Florida 

ROBERT MENENDEZ, New Jersey 

THOMAS R. CARPER, Delaware 

BENJAMIN L. CARDIN, Maryland 

SHERROD BROWN, Ohio 

MICHAEL F. BENNET, Colorado 

ROBERT P. CASEY, Jr., Pennsylvania 

ORRIN G. HATCH, Utah 

CHUCK GRASSLEY, Iowa 

MIKE CRAPO, Idaho 

PAT ROBERTS, Kansas 

MICHAEL B. ENZI, Wyoming 

JOHN CORNYN, Texas 

JOHN THUNE, South Dakota 

RICHARD BURR, North Carolina 

JOHNNY ISAKSON, Georgia 

ROB PORTMAN, Ohio 

PATRICK J. TOOMEY, Pennsylvania 

AMBER COTTLE, Staff Director 

CHRIS CAMPBELL, Republican Staff Director 

(II) 

C O N T E N T S 

OPENING STATEMENTS 

Page 

Baucus, Hon. Max, a U.S. Senator from Montana, chairman, Committee 

on Finance ............................................................................................................ 1 

Hatch, Hon. Orrin G., a U.S. Senator from Utah ................................................. 3 

Cardin, Hon. Benjamin L., a U.S. Senator from Maryland ................................. 7 

WITNESS 

Sarbanes, Hon. Paul, former U.S. Senator from Maryland ................................. 5 

ADMINISTRATION NOMINEES 

Raskin, Sarah Bloom, nominated to be Deputy Secretary, Department of 

the Treasury, Washington, DC ........................................................................... 8 

Schmidtlein, Rhonda, nominated to be a member of the United States International Trade Commission, Washington, DC ................................................... 10 

ALPHABETICAL LISTING AND APPENDIX MATERIAL 

Baucus, Hon. Max: 

Opening statement ........................................................................................... 1 

Prepared statement .......................................................................................... 27 

Cardin, Hon. Benjamin L.: 

Opening statement ........................................................................................... 7 

Hatch, Hon. Orrin G.: 

Opening statement ........................................................................................... 3 

Prepared statement .......................................................................................... 29 

Raskin, Sarah Bloom: 

Testimony .......................................................................................................... 8 

Prepared statement .......................................................................................... 31 

Biographical information ................................................................................. 34 

Responses to questions from committee members ......................................... 46 

Sarbanes, Hon. Paul: 

Testimony .......................................................................................................... 5 

Schmidtlein, Rhonda: 

Testimony .......................................................................................................... 10 

Prepared statement .......................................................................................... 80 

Biographical information ................................................................................. 82 

Responses to questions from committee members ......................................... 89 

(III) 

(1) 

NOMINATIONS OF SARAH BLOOM RASKIN, TO 

BE DEPUTY SECRETARY, DEPARTMENT OF 

THE TREASURY; AND RHONDA SCHMIDTLEIN, 

TO BE A MEMBER OF THE UNITED STATES 

INTERNATIONAL TRADE COMMISSION 

WEDNESDAY, NOVEMBER 20, 2013 

U.S. SENATE, COMMITTEE ON FINANCE, Washington, DC. 

The hearing was convened, pursuant to notice, at 10:18 a.m., in 

room SD–215, Dirksen Senate Office Building, Hon. Max Baucus 

(chairman of the committee) presiding. 

Present: Senators Wyden, Menendez, Cardin, Brown, Hatch, 

Grassley, Crapo, and Thune. 

Also present: Democratic Staff: Mac Campbell, General Counsel; 

Rory Murphy, International Trade Analyst; Lynn Becker, Deputy 

Clerk; Carla Martin, Senior Advisor; and Tiffany Smith, Tax Counsel. Republican Staff: Chris Campbell, Staff Director; Nicholas 

Wyatt, Tax and Nominations Professional Staff Member; Rebecca 

Eubank, Staff Assistant; and Jeff Wrase, Chief Economist. 

OPENING STATEMENT OF HON. MAX BAUCUS, A U.S. SENATOR 

FROM MONTANA, CHAIRMAN, COMMITTEE ON FINANCE 

The CHAIRMAN. The hearing will come to order. 

Abigail Adams, the wife of President John Adams, once asked, 

and I quote, ‘‘If we do not lay out ourselves in the service of mankind, whom should we serve?’’ 

Joining us today are two people nominated to serve in critical 

roles in the government: Sarah Bloom Raskin, the President’s 

nominee to be Deputy Secretary of the Treasury; and Rhonda 

Schmidtlein, nominee to be a member of the International Trade 

Commission. 

I reviewed your backgrounds and your economic policy experience. You are both well-qualified and have proven yourselves to be 

extraordinary public servants. 

Ms. Raskin, you served as Maryland’s Commissioner of Financial 

Regulation during the financial crisis, and, for many years, you 

served as counsel on the Senate Banking Committee. Your current 

role as Federal Reserve Governor gives you valuable insight into 

our Nation’s economy. 

Your nomination also marks a milestone. If confirmed, you would 

be the highest-ranking woman in the history of the Treasury Department. [Applause.] 

2 

It is not often I get applause, especially in the middle of an opening statement. [Laughter.] 

Senator HATCH. It was not for you. 

The CHAIRMAN. No. 

If there is one thing to be sure of about being Deputy Secretary 

of Treasury, it is that you will have to wear many hats, and I am 

confident that you can. And you will need to, because the Treasury 

faces a lot of challenges. 

First and foremost, the Treasury must keep working to strengthen our economy. The 7.3-percent unemployment rate is far too 

high, and the tepid economic growth over the last few years cannot 

continue. We must do better. 

Treasury must also help foster and manage our relationships 

with important trading partners around the world, including 

China. We are at the pivotal stage with our trade agenda. There 

are huge opportunities for us to boost exports and reinforce trade 

ties, and Treasury must help seize them. 

Your responsibilities at Treasury will also include helping to rebuild the trust of the American people in the Internal Revenue 

Service. At the confirmation hearing for your predecessor, I 

stressed the importance of transparency at Treasury and fairness 

at the IRS. Four years later, I stress these same points to you, Ms. 

Raskin. 

The revelations about IRS’s inappropriate screenings of 501(c)(4)s 

shook the public’s confidence. You will be part of the team that 

works to regain it. 

You will also be part of the team at Treasury responsible for 

helping Congress create sound tax reform policy. That team will 

need to be available and ready to act when the time comes. Tax 

reform is an important endeavor, and we have to get it right. And 

I, frankly, tell you I very much appreciated Secretary Lew’s comments yesterday in support of tax reform. We need to work together to make our tax system more fair, more simple for American 

businesses and families. 

Ms. Schmidtlein, you have an extensive legal background in 

trade. You have worked as a trade lawyer for the Department of 

Justice, USTR, and in the private sector. 

If confirmed, this committee will ask a lot of you. You will need 

to fairly consider the cases before the ITC and enforce our trade 

laws objectively. You will need to ensure that the ITC continues to 

provide us with high quality, timely advice to advance our trade 

agenda. 

That agenda includes a singular opportunity to boost jobs and 

growth in our country. Between ongoing talks with nations across 

the Pacific and in Europe, we are negotiating trade deals covering 

two-thirds of global GDP. The ITC plays a critical role in providing 

Congress and our negotiators with the facts they need to ensure 

that these trade deals work for American families and for American workers and businesses. 

As you take on this ambitious agenda, keep in mind the story of 

former ITC Chairman Will Leonard. In 1975, the ITC faced daunting hurdles. First, Congress had just expanded ITC’s role in the 

Trade Act of 1974. With a small number of employees, the agency 

was being asked to do a whole lot more. 

3 

Second, his office building, a third of which was condemned, was 

falling apart. In a cramped, unpainted meeting room, Chairman 

Leonard met with the ITC staff, and here is what he said, and I 

am quoting him: ‘‘If we are excited and interested in our work, our 

surroundings will take on a glow that could never be transmitted 

by mere paint and plaster. It is my pledge to you that we can make 

this place hum.’’ 

If you apply Chairman Leonard’s lesson, I have no doubt that 

you will succeed. And do not worry, the offices are no longer in disrepair. 

Over the last 20 years, seven of eight nominees for Deputy Secretary of the Treasury have been unanimously confirmed by the 

Senate, as have all of the last 14 nominees for the ITC. I hope we 

can carry on that tradition. 

Thank you both for your service. You are top-notch candidates. 

I strongly support your nominations, and I hope we can work very 

quickly so that you can get to work, not only for yourselves but, 

much more importantly, for the American people. 

Thank you very much. 

[The prepared statement of Chairman Baucus appears in the appendix.] 

The CHAIRMAN. Senator Hatch? 

OPENING STATEMENT OF HON. ORRIN G. HATCH, 

A U.S. SENATOR FROM UTAH 

Senator HATCH. Well, thank you, Mr. Chairman, for holding today’s hearing. I also want to thank our two nominees for joining 

us. 

Governor Raskin, if confirmed as Deputy Secretary of the Treasury, you will be making an interesting transition from the monetary to the fiscal sphere, both of which, in my view, need improvements when it comes to transparency. It is my hope that, if you 

make this transition, you will work with us to improve the lines 

of communication between the Treasury Department and the Congress. 

On the monetary side, the Federal Reserve has, in my assessment, been treading perilously into the sphere of fiscal policy. 

Treasury and the rest of the administration, not to mention many 

in Congress, have been content to outsource decisions, such as the 

maturity structure of our debt, to the Fed and, in the process, have 

anointed the Fed with power over what are essentially fiscal policy 

matters. 

Relatedly, the Fed made a joint pledge with Treasury back in 

March of 2009 that the Fed should not ‘‘allocate credit to narrowly 

defined sectors or classes of borrowers.’’ The pledge went on to proclaim that ‘‘government decisions to influence the allocation of credit are the province of the fiscal authorities.’’ Then, reneging on the 

pledge, the Fed decided in September 2012 to buy $40 billion per 

month in agency mortgage-backed securities and to allocate credit 

in order to ease market conditions in the mortgage and housing 

sectors. 

Remarkably, this came after the Treasury ended its foray into 

mortgage-backed securities investments, citing improved market 

conditions. It also came directly after a prominent Democrat in 

4 

Congress admonished Chairman Bernanke to, quote, ‘‘Get to work, 

Mr. Chairman,’’ on providing more stimulus. 

Unfortunately, the joint Fed and Treasury pledge not to channel 

credit to narrow sectors of the economy ranks right up there on the 

credibility scale with the promise that, if you like your health insurance policy, you can keep it. 

When I ask the Fed and Treasury about the interplay between 

monetary and fiscal policies and some dangerous overlaps, I hear 

conflicting stories. On the one hand, officials assure me that the 

Fed and Treasury are independent and doing their own things. On 

the other hand, I see the Fed and Treasury acting jointly, as when 

Fed officials publicly state that they are helping the government 

lower its financing costs, which is making debt-fueled government 

spending look artificially cheap. 

So, Governor Raskin, my hope is that you would agree to help 

make the Treasury more transparent and to work with Congress 

when members ask for information about Treasury policies or the 

country’s debt or cash management decisions. 

There is plenty available for you to do at the Treasury, and I 

hope you will outline your objectives for us. I further hope that 

these objectives include working to promote clarity about the positions of the administration on issues that are long overdue for action, including comprehensive tax reform, entitlement reform, reforms of Fannie and Freddie, and plans to drive down our Nation’s 

unsustainably high and growing debt. 

Now, turning to the trade side of today’s hearing, Ms. Rhonda 

Schmidtlein is nominated to be a member of the United States 

International Trade Commission. If confirmed, you would have a 

voice in shaping the ITC’s future, including its section 337 process. 

The ITC’s section 337 process is a vital tool for U.S. companies 

facing unfair competition from foreign imports that infringe their 

intellectual property, and I have a longstanding interest in making 

sure this process operates as effectively as possible. 

I am also very interested in ensuring that the ITC is able to continue its role as a nonpartisan source of information regarding U.S. 

trade policies and their effects on our economy. 

Ms. Schmidtlein, I hope you share my belief in the importance 

of an effective 337 process and the need for Congress to be able to 

obtain the highest quality economic analysis from the ITC. 

Mr. Chairman, once again, thank you for holding today’s hearing 

and for your ongoing leadership of this committee. We appreciate 

you. 

[The prepared statement of Senator Hatch appears in the appendix.] 

The CHAIRMAN. Thank you, Senator. 

Now, I would like to introduce our nominees. 

First, Sarah Bloom Raskin is nominated to be Deputy Secretary 

of Treasury. 

Ms. Raskin, this is a good opportunity for you to introduce your 

family, because you are going to be working really hard. This is 

teamwork. We are all in this together. And I know you are very 

happy to have your family accompany you. 

Ms. RASKIN. Well, thank you, Chairman Baucus. And I do have 

quite a number of family members here with me today. 

5 

I have my husband here, Jamie, Jamie Raskin, and my three 

children: Hannah Grace, Tommy, and Tabitha. My parents are 

here, Herbert Bloom and Arlene Bloom. My brother, Kenneth 

Bloom, is here. My niece, Maggie Littlewood, is here. And I think 

there is also my father-in-law, Marcus Raskin, as well as some 

cousins, Jed Bellman and Sarah Bergen. 

The CHAIRMAN. I would like to have you all stand so we can all 

applaud you, although there are not many left for applause. All 

stand up. [Applause.] 

Very nice. We will have other introductions in just a moment. 

Our second witness is Rhonda Schmidtlein. And we would love 

to have you introduce your family too, Rhonda. It is a great opportunity for you. 

Ms. SCHMIDTLEIN. Thank you, Chairman Baucus. 

I have with me today my husband, John Schmidtlein, and my 

daughter Anna, who is taking a day off of kindergarten today to 

be here. We have a 21⁄2-year-old whom we did not bring, for what 

should be obvious reasons. 

My parents are here, Roger and Marilyn Schnare, who will celebrate their 48th wedding anniversary next week. 

The CHAIRMAN. Wonderful. 

Ms. SCHMIDTLEIN [continuing]. And my father-in-law, John 

Schmidtlein. 

The CHAIRMAN. Why don’t you all stand? We want to congratulate you too. [Applause.] 

We are very honored to have with us here Senator Sarbanes, who 

I think would like to introduce one of our witnesses today. We are 

very honored to see you again, Senator Sarbanes. You have been 

a real credit to the Senate and the State of Maryland, and we miss 

you sorely. 

Senator HATCH. Yes. It is great to see you again. We are really 

happy to have you here. 

Senator SARBANES. Well, thank you. Thank you very much, Mr. 

Chairman and Senator. 

Actually, Senator Hatch and I came to the Senate on the same 

day. I took that advice about ‘‘you have to know when to hold them 

and know when to fold them.’’ Senator Hatch is still hanging in 

there. [Laughter.] 

Senator HATCH. Yes. I think I should have followed your advice 

sometimes, and I know a lot of others think I should have followed 

your advice. [Laughter.] 

The CHAIRMAN. There was a breakfast the Senator and I had, 

when I was over in the House, thinking about coming over to the 

Senate. You advised me, and you said, ‘‘Max, I do not know if you 

want to come over here. It is a lot different.’’ [Laughter.] 

Anyway, thank you very much. 

STATEMENT OF HON. PAUL SARBANES, 

FORMER U.S. SENATOR FROM MARYLAND 

Senator SARBANES. Senator Wyden, it is nice to see you, as well 

as my colleagues Senator Cardin and Senator Brown. 

I am pleased to be before the committee and to have this opportunity to say just a few words about Sarah Bloom Raskin, who is 

6 

an old and dear friend and for whom I have a tremendous, tremendous regard. 

Sarah has now served on the Board of Governors of the Federal 

Reserve for just over 3 years. I got to know her in a work capacity, 

first, when she was a staff member to the Senate Banking Committee. 

I know Senator Crapo was here with us a few minutes ago. But 

she did an outstanding job. She was with the committee not quite 

5 years and was really one of the—we had a very good staff, if I 

do say so myself, on both sides of the aisle, and she just did an outstanding job as a member of the staff of the committee. 

She showed measured judgment, was extremely hardworking, 

very analytical, very smart, and had a tremendous ability to work 

with people across the aisle, in the Congress, out of the Congress, 

and she made a tremendous contribution. 

Before she went on to the Federal Reserve Board, she was a 

Commissioner of Financial Regulation for the State of Maryland. 

She did an absolutely—and I am sure Senator Cardin will comment about this—an absolutely outstanding job as our Commissioner of Financial Regulation. And she rose very quickly among 

the State bank supervisors. 

She was on their executive committee. She headed up a number 

of other committees and really became, to some extent, a spokesman for the State banking regulators. 

When she went to the Federal Reserve, they were very strong in 

their support of her and her enthusiasm for that nomination. 

The job to which she is going, hopefully, with the approval of this 

committee, is a tremendously important job and very broad in its 

responsibilities as Deputy Secretary of the Treasury. She brings to 

it a tremendous amount of talent, including—and I just want to 

touch on this—some clear administrative abilities. She has been 

the Administrative Governor at the Federal Reserve Board. So she 

has had some responsibilities at the Fed for administering the 

workings of the Federal Reserve Board. 

As Commissioner of Financial Regulation in Maryland, she was 

extremely good in handling that charge. And that will be part of 

her job, as I understand it, as Deputy Secretary of the Treasury, 

and I commend her very strongly in that area. 

Mr. Chairman and members of the committee, I just want to 

make a couple of points. When she was up to go on the Federal Reserve Board, we had a number of the banking associations, including the community bankers, who were in very strong support of 

Sarah, and others who had worked with her when she was Commissioner of Financial Regulation. At the same time, she was very 

strongly supported by the Maryland Consumer Rights Coalition, 

which had given her the Consumer Advocate of the Year Award. 

So she has, obviously, shown an ability to bring people together 

and solve difficult problems, have their endorsement and have 

their support. 

I happen to think that is a very valuable asset, and she has 

manifested it in her previous work, and I am sure she will continue 

to do so at the Treasury. 

7 

So, thank you very much for this opportunity this morning to 

come and say a few words. I have known Sarah and her husband 

for a long, long time, and I have the very highest regard for her. 

The CHAIRMAN. Thank you, Senator. It is a very strong statement, and we deeply appreciate it. 

Senator Cardin, I am sure you have a few words too that you 

would like to add in support of the nominee. 

OPENING STATEMENT OF HON. BENJAMIN L. CARDIN, 

A U.S. SENATOR FROM MARYLAND 

Senator CARDIN. Mr. Chairman, thank you for the courtesy to 

allow me, also, to introduce to the committee Sarah Bloom Raskin. 

We are very proud that she is a Marylander, lives in our State, and 

is a person who has given so much in public service. 

Senator Sarbanes mentioned her husband Jamie. Jamie is a 

member of our State Senate and an incredible person in his own 

right. This is a family of public servants, and we very much appreciate that. 

Senator Sarbanes went over a great deal of the background of 

Sarah Bloom Raskin. She worked in the private sector, very successfully in the private sector, but then returned to the public sector, because she is really dedicated to public service. She is in public service for all the right reasons. 

Her background, her education, her job training, all are wellsuited for the position. As you pointed out, she will become the 

highest-ranking woman in the history of the Department of Treasury. So this is really a moment where I think we all can be very 

pleased that Sarah is coming forward to serve in this extremely 

challenging position. 

Senator Sarbanes mentioned the fact that she was our State Regulator, and that is where I really got to know her. And I remember, 

while she was our State Regulator, sort of underscoring Senator 

Sarbanes’s point—the Maryland bankers come in every year to 

meet with us. I am sure the bankers from your State also come in 

to meet with your delegations. And they do not normally comment 

about our State Regulators, but they did, and they were very complimentary of the manner in which Sarah was conducting the regulatory atmosphere in our State. 

In that same week, just by happenstance, we had consumer 

groups that were in talking to us about some of the legislation that 

was pending in Congress, and they said, ‘‘You know, why can’t you 

get people like Sarah at the Federal level, because they really are 

open to allowing us access to try to work out issues?’’ 

So I really want to underscore that point to the committee. We 

need people in the administration who know how to bring people 

together, and Sarah Bloom Raskin is that type of a person. She 

really knows how to build effective coalitions to get things done. 

I had the honor of introducing her to the Banking Committee 

during her confirmation hearings in 2010, and she was, of course, 

confirmed to be on the Federal Reserve. 

I thank her for her service. And on a personal note, it is really— 

I am very proud of the reasons why you are in public service and 

the differences that you have made. 

Thanks to your family also. 

8 

The CHAIRMAN. Thank you, Senator, very, very much. 

Thank you, Senator Sarbanes. It was good seeing you. 

With that, Ms. Raskin? 

STATEMENT OF SARAH BLOOM RASKIN, NOMINATED TO BE 

DEPUTY SECRETARY, DEPARTMENT OF THE TREASURY, 

WASHINGTON, DC 

Ms. RASKIN. Chairman Baucus, Ranking Member Hatch, and distinguished members of the committee, it is a great privilege to appear before you today as the President’s nominee to be Deputy Secretary of the Treasury. 

I do want to begin by thanking Senator Paul Sarbanes, who has 

served as an exemplary role model and leader for Maryland, the 

Senate, and our Nation throughout his lifetime of public service. 

Let me also thank your colleague and my Senator, Ben Cardin, 

for his kind words and the excellence of his leadership and passionate concern for the people of Maryland. 

I also would like to thank all the members of my family, especially my husband, Jamie, my parents, my brother, and my three 

children for their support, understanding, and good humor. 

I want to mention that Jamie was with me at my confirmation 

hearing when I was nominated for the Federal Reserve Board 3 

years ago, even though he was going through radiation and chemotherapy at the time. Jamie is a law professor and a Senator—although not a real Senator, as my daughter, Tabitha, said when she 

was a little girl—a State Senator, and I am delighted that he is 

again behind me on this day, robustly healthy and fit, 3 years after 

his final treatment. 

I am grateful to President Obama and Secretary Lew for this opportunity. The trust they have placed in me is a humbling honor. 

Finally, I want to thank you, Mr. Chairman, and Ranking Member Hatch for the enormous courtesy you and the members of your 

staff have shown me throughout this process. If confirmed, I look 

forward to working closely with you as the Treasury Department 

continues the essential work of promoting economic growth and accelerating our recovery from the financial crisis of 2008. 

It is a special thrill to be back in the Senate. Although I spent 

half of my career as a lawyer in the private sector, the other half 

has been devoted to public service, and, for me, this gratifying 

phase of my career began right here in this chamber. 

As a former counsel to the Senate Banking Committee under 

three different chairmen, I cherish the time that I spent in this remarkable body, where I learned that the character of our leaders 

and the purposes they bring to public life are far more important 

than their party labels. This is an institution with a great history 

and a great future, and all of America is deeply invested in its success. 

I have worked extensively in the private sector. These roles in 

business not only gave me invaluable management experience, but 

they also taught me what those in the financial marketplace seek 

most from government—stability, predictability, fairness, a sense of 

proportion, attention to the unintended consequences of regulation, 

pragmatism, and bipartisan effort toward economic prosperity and 

public efficiency. 

9 

From 2007 to 2010, I served as the Commissioner of Financial 

Regulation for the State of Maryland. As Commissioner, I worked 

hard every day to provide stability to our financial sector and opportunity to our businesses and our people through the darkest 

days of the Great Recession. 

I mobilized a great deal of talent to address the devastating effects of spikes in home foreclosures and unemployment that 

shocked so many of our families and communities, and I took action to revise and replace ineffective and counterproductive State 

regulations in order to enhance economic progress, regulatory effectiveness, and access to affordable credit. 

In 2010, I was nominated by the President and confirmed by the 

Senate as a Governor of the Federal Reserve Board. In that capacity, I have worked with my colleagues on the Board and on the 

Federal Open Market Committee to maximize employment, maintain price stability, and restore the underlying strength and vibrancy of the American economy. 

As the executive agency charged with promoting economic prosperity and financial stability, the Department of the Treasury has 

a sacred trust to advance the fortunes and livelihood of our people, 

our businesses, our communities, and our Nation. The government 

does not create wealth and prosperity and innovation in our economy, but it does create the conditions in which our people and businesses can, and, therefore, its role is central and indispensible. 

This is an exciting time to join the Treasury Department. With 

the need for immediate stabilization from the financial crisis behind us, Congress and the administration can increasingly focus 

their attention on longer-term structural reforms that will improve 

conditions for sustainable and meaningful economic growth. From 

housing finance reform and implementing financial regulatory reform to tailored sanction design and implementation, new trade 

agreements, and tax and entitlement reform, we have the chance 

to make important long-term and durable progress for the country. 

If confirmed, I look forward to working closely alongside members of this committee to identify the best bipartisan policy options 

to achieve such progress. I also look forward to helping Secretary 

Lew continue the exemplary and efficient management of the Department and its component bureaus and offices. 

At different points over the last decade, I have dealt with the 

Treasury staff and have been greatly impressed by their skill and 

commitment. If I am so honored to be confirmed, I look forward to 

working every day to build effective policies for a sustained economic recovery and growth that reaches every corner of every State 

in our Nation. 

Let me say, finally, that I have learned plenty from intense study 

of econometric models and academic analyses in my time as a Federal Reserve Governor, but I have learned more than I ever imagined possible from the people I met when I made impromptu visits 

to job fairs and unemployment centers. Talking to people trying to 

avoid falling off the economic ledge reminds us of the urgent public 

purposes that must infuse our work here in Washington if we are 

to be authentically successful. I make it a continuing commitment 

to throw everything I have into seeking ways to broaden the opportunities for prosperity for all Americans. 

10 

Thank you for allowing me to testify here today and for receiving 

me in your offices. I would be happy to respond to any and all 

questions you may have throughout this process and, indeed, 

throughout my tenure at the Treasury Department, if I am fortunate enough to be confirmed for that position. 

Thank you. 

[The prepared statement of Ms. Raskin appears in the appendix.] 

The CHAIRMAN. Thank you very much. 

Ms. Schmidtlein, we are very honored to have you here and 

would love to hear your statement. 

STATEMENT OF RHONDA SCHMIDTLEIN, NOMINATED TO BE A 

MEMBER OF THE UNITED STATES INTERNATIONAL TRADE 

COMMISSION, WASHINGTON, DC 

Ms. SCHMIDTLEIN. Chairman Baucus, Ranking Member Hatch, 

and members of the committee, thank you for this opportunity to 

appear before you today. I am deeply honored and grateful to have 

been nominated by President Obama for the position of Commissioner of the United States International Trade Commission. 

Before I go on, I would like to thank my family members as well, 

who are here and who have been introduced. My husband and my 

daughters, Julia and Anna. My parents, Roger and Marilyn, and 

my father-in-law, John Schmidtlein. I am grateful to each of you 

for your love and support and understanding over the years. I also 

want to acknowledge my friends, many of whom are here today, 

and others who are listening online, and thank them for their 

steadfast support and encouragement. 

I have been privileged to spend my career working in the public 

interest. Starting at the U.S. Department of Justice and then at 

the U.S. Office of the Trade Representative, and later at the U.S. 

Public Company Accounting Oversight Board, I was proud to represent the United States in negotiations and trade-related disputes. 

My work as a trade lawyer has given me a keen appreciation for 

the important work of the ITC. While the ITC may be relatively 

unknown to the general public, it plays an important role in the 

U.S. economy through its administration of U.S. trade remedy 

laws, including title VII and section 337. These laws provide a vital 

tool for U.S. companies that are faced with unfair trade practices, 

and the ITC’s decisions impact the livelihoods of workers, farmers, 

and businesses across America. 

Another important, but perhaps less recognized aspect of the ITC 

is the role it plays in maintaining the credibility of U.S. trade remedy laws. As a lawyer who has represented the United States in 

challenges to the application of U.S. trade remedy laws, both in the 

U.S. courts and at the WTO, I understand firsthand the importance 

of maintaining objectivity in the administration of these laws. 

If confirmed, I intend to apply the law, as written and in accordance with the intent of Congress, in a fair and objective manner. 

The ITC also plays an essential role in supporting policymakers 

by providing objective and high-quality economic and industry 

analysis. Over the course of my career as an advocate and a negotiator, I have depended from time to time upon the work of economists. So I understand the importance of policymakers having reliable and robust reports upon which to base their decisions. 

11 

If confirmed, I would look forward to working with my fellow 

commissioners and ITC staff to ensure that the ITC continues to 

be responsive to Congress and other policymakers and continues to 

provide objective and high-quality reports. 

I believe in the power of a rules-based trading system to expand 

trade, create jobs, and raise standards of living. But simply having 

such a system is not enough. The rules must be enforced, and the 

decision-maker must be independent and objective. Congress has 

charged the ITC with playing this critical role with regard to U.S. 

trade remedy laws. 

If confirmed, I would be honored to participate in this important 

process as a commissioner. 

I thank you for your consideration, and I would be happy to answer any questions. 

[The prepared statement of Ms. Schmidtlein appears in the appendix.] 

The CHAIRMAN. Thank you both very much. 

Ms. Raskin, what is the biggest lesson you learned as a State 

Regulator, or add to that your role as a Fed Governor? What is the 

biggest lesson learned? 

Ms. RASKIN. Well, Chairman Baucus, I have to say that the lessons were many. I have served in both of those capacities during 

the time of really great financial crisis in our country, and the experience of working during the crisis and seeing the effects of the 

crisis on our communities and on our prospects for economic 

growth really has been a searing experience, and one that I have 

wanted to commit myself to never see this country have to go 

through again. 

So the work that I see going forward is a combination of both 

bringing about a strong recovery from that crisis, a set of reforms 

that brings us to a place where we do not have to repeat a crisis 

like that again, and putting our economy on a long-term path for 

sustainability. 

The CHAIRMAN. What can we do to tend to prevent that reoccurrence of the financial crisis? 

Ms. RASKIN. Well, I think a lot of very good work is underway, 

Chairman Baucus, and the work has involved a lot regarding financial reform. And, as you know, Dodd-Frank is a comprehensive 

statute with many provisions, and a lot of the work that Congress 

envisioned in that statute is underway and I think is moving towards bringing us to a place of greater financial stability. 

I think our economy is doing better than it was certainly in the 

dark days of the crisis. We are seeing moderate growth, and I 

would like to see that growth continue. And I think the work of 

both the committee and Congress, as well as the continued work 

of the Federal Reserve, are important for those efforts. 

The CHAIRMAN. But at Treasury, specifically at Treasury, what 

tools do you have to help bring back the economy and, also, prevent 

further collapse down the road, as opposed to the Banking Committee? 

Ms. RASKIN. That is right. And Treasury, as you know, plays a 

very important role in many facets of our recovery and in our longterm growth prospects. 

12 

The projects currently facing Treasury involve important work 

regarding tax reform, which I know this committee has taken a 

very strong lead in; questions regarding housing finance reform; financial regulatory reform; work moving treaties ahead in an important way; and, at the same time, doing all of this in a way that 

enhances transparency, happens in an accountable way that people 

in the public can understand, and puts our economy on a stronger 

footing. 

The CHAIRMAN. I appreciate you mentioning tax reform, because 

I personally believe that is going to help promote economic growth. 

And I was very pleased, as I mentioned earlier, at Secretary Lew’s 

statement supporting tax reform. 

I urge you, if confirmed, to keep that up, because we have to 

keep our eye on that ball. 

Ms. Schmidtlein, I am a little bit concerned that ITC Chairman 

Irving Williamson reportedly informed the USTR last week that it 

will take ITC at least 150 days from receiving the full text of an 

agreement—that is, a trade agreement, whether it is TTIP or 

whether it is the Trans-Pacific Partnership agreement—and that is 

going to take a long time. 

Just your thoughts on how ITC can speed up that process a little 

bit more quickly. 

Ms. SCHMIDTLEIN. Thank you. 

The CHAIRMAN. Because in the past, we have required reports to 

be provided to this committee in about 90 days. 

Ms. SCHMIDTLEIN. And you are talking about the section 332 report that they would provide? 

The CHAIRMAN. Yes. Right. Right. 

Ms. SCHMIDTLEIN. Yes. I would look forward, if confirmed, to 

working with my fellow commissioners to understand why this is 

taking so long and to ensure that the appropriate resources have 

been allocated to those offices so that they can provide the reports 

in a more timely manner. 

The CHAIRMAN. Because I think these trade agreements are enormously important. They are going to dramatically boost economic 

growth in this country. 

Ms. SCHMIDTLEIN. Absolutely, and that is one of the statutory responsibilities of the ITC, to support the policymakers by providing 

these types of reports. 

The CHAIRMAN. I appreciate that. I just encourage you to double 

down a little bit and see what we can do. Thank you. 

Senator Hatch? 

Senator HATCH. Thank you. 

Governor Raskin, when we approach the statutory debt limit, it 

becomes important for Congress to know about the state of the 

country’s finances, including its cash, public debt issuance, and 

how much time can be bought in terms of remaining below the debt 

limit when Treasury uses its so-called ‘‘extraordinary measures.’’ 

Those measures, by the way, are unfortunately becoming all too ordinary and probably need to be reexamined. 

While Congress needs information, it does not always get it in a 

timely fashion. Will you commit to us here on this committee to respond—and to me personally—to respond to my requests for information about debt issuance, cash balances, and how much room 

13 

Treasury has under the debt limit through use of extraordinary 

measures when we near a debt limit, and will you commit to doing 

so on a weekly basis with me and the Congressional Budget Office 

when we get close to the debt limit? 

Ms. RASKIN. Well, Senator Hatch, as you know, a government default resulting from the breach of a debt limit is an event considered to be one of catastrophic consequences in terms of financial 

stability, economic growth, and employment. 

It has never occurred in the history of our country. Congress has 

always found a way to pay its bills, fortunately. And the work that 

leads up to a government default regarding the balances that come 

in to Treasury or the information that is received regarding the approaching of that limit, I think, is critically important to understand, being a set of numbers, of figures, that is important to have 

accurate. 

Senator HATCH. Well, I appreciate that. The reason I ask that 

question is because we have not gotten responses that we have 

asked for, have not had responses to letters that we have sent, and 

I am just hoping that you will correct that, because we do have an 

obligation here to oversee this. 

And I do not think either of us and most people on the committee 

have any special axes to grind. We just want to make sure we 

know what we are doing. 

So I would appreciate if you will do that. 

Ms. Schmidtlein, as you are no doubt aware, intellectual property 

is an increasingly important part of the U.S. economy. In my home 

State of Utah, for instance, IP is the lifeblood of our industries, 

from information technology to life sciences. And, as I mentioned 

in my opening, the ITC provides a vital tool for U.S. companies 

that face unfair competition from foreign imports that infringe 

their IP. 

Can you share with us your thoughts on the section 337 process 

and what you would do to make it as effective as possible? 

Ms. SCHMIDTLEIN. Thank you, Senator Hatch. 

Of course, the ITC has recently implemented a few changes to 

the procedures for section 337, including discovery and then, also, 

putting in place a pilot program so that potentially dispositive 

issues might be ruled upon early. 

So I would look forward to sitting down with my fellow commissioners, if confirmed, to evaluate the results of those efforts that 

have just been taking place over the last 6 months. 

Senator HATCH. Governor Raskin, if confirmed as Deputy Treasury Secretary, you are likely to be involved in proceedings of the 

non-transparent Financial Stability Oversight Council, or FSOC, 

especially given your background in bank regulation. 

Now, the FSOC is unlikely to be able to spot threats to financial 

stability or guard the world against financial instability, especially 

given that it cannot even define what that means. With the Treasury Secretary at the helm and the Fed at the table, it is highly unlikely ever to warn of any threats to financial stability arising from 

monetary policy or from exploding government debt. Indeed, as the 

debt limit was approached recently and the Treasury Secretary 

warned of calamity, the FSOC chair, who happens to be the Treasury Secretary, remained silent. 

14 

So I think everyone should be clear about this relatively new entity. It is not a stability guardian. Rather, it is a roving regulator 

looking for pockets of the financial system and the economy to ensnare into the regulatory webs of the Fed and other regulators. It 

is a council consisting of an alphabet soup of financial regulators, 

and it is capable of turning pretty much any set of companies into 

regulated public utilities. 

Now, given your financial regulation experience and the possibility that you will be working with the FSOC in the future, I have 

just two questions. 

First, if you are confirmed, will you work to improve the transparency and responsiveness of the FSOC to congressional inquiries; 

and, second, do any firms or sectors of the financial system currently, in your view, meet the test of being systemically important 

financial institutions in need of being designated by the FSOC and 

subsequently regulated by the Fed or others? 

If you could answer those two questions, I would be appreciative. 

Ms. RASKIN. Certainly, Senator Hatch. And let me commend you 

for your articulation of the very important goal of transparency. It 

is one that I share and one that I have been committed to further 

and develop in the public sector positions that I have held. 

In terms of the transparency of the FSOC, yes, I certainly can 

commit to you that I will work to improve its transparency. The 

FSOC, as you described so well, is, in essence, a group—it stands 

for the Financial Stability Oversight Council. 

It is a group that comes together, consists of the leaders of various financial regulatory agencies, and it has primarily two purposes, as set forth in the statute. One is, it monitors financial market developments, and, two, it looks primarily at the risks to financial stability. 

And the transparency mechanisms that it has used in doing this, 

I think, are there. I hear you and share a concern that they be 

brought forward in a more comprehensible way. But there is, in essence, a statutory standard regarding designation of an institution 

that presents a risk to financial stability. You are absolutely correct that if, in fact, an institution is designated by the FSOC, it becomes an entity that becomes regulated and supervised by the Federal Reserve. 

The FSOC, as I see it, has been issuing annual reports since its 

creation. Those annual reports have taken a step toward identifying risks to financial stability, risks that need to be pursued by 

various regulators, as well as by the FSOC as a whole. 

So the work of the FSOC, I think, is quite significant, and designations of institutions that are considered systemically significant 

have occurred and have been referred to the Federal Reserve for 

supervision. There have been three so far. 

But, yes, I appreciate your comments. I certainly look forward to 

working with you, if I am confirmed, to improve transparency. 

Senator HATCH. Thank you. 

The CHAIRMAN. Thank you, Senator, very much. 

Senator Grassley? 

Senator GRASSLEY. You were born in Washington, IA, it says 

here. 

Ms. SCHMIDTLEIN. I was. 

15 

Senator GRASSLEY. When did you leave? 

Ms. SCHMIDTLEIN. I think shortly thereafter. [Laughter.] 

Senator GRASSLEY. All right. 

Ms. SCHMIDTLEIN. I was raised in Missouri. 

Senator GRASSLEY. I have just one question for you, and I would 

like your comments and thoughts on currency manipulation by foreign governments and how big of an issue you think it is for global 

trade. And I do not know if it would ever reach your commission 

or not, but, if it did, how would you handle it? 

Ms. SCHMIDTLEIN. Well, I suppose if it were the subject matter 

of a case that was brought before the ITC, then, of course, I would 

apply the statutory requirements to the facts of the case in a fair 

and objective manner. 

Senator GRASSLEY. Can you give me your views on what you 

think about currency manipulation and its impact on global trade, 

if you have a view? 

Ms. SCHMIDTLEIN. Well, I have to say, in my role as an ITC Commissioner, I am not sure whether I would be in a position to offer 

a view on that, and I have not studied that myself. 

So I would be happy to get back to you, but, sitting here, I could 

not offer—— 

Senator GRASSLEY. If you would give me your views in writing, 

I would appreciate it. 

Ms. SCHMIDTLEIN. All right. 

Senator GRASSLEY. And, Ms. Raskin, I am going to tell you about 

a conversation I had with Attorney General Holder. I do not want 

you to comment on his conversation. It is just the background for 

a question I have. 

He was before the Judiciary Committee, and we had been hearing and maybe even reading that, before the government might file 

certain criminal charges or some sort of charges against financial 

institutions or people within the financial institutions, there were 

certain so-called ‘‘experts’’ that government would consult about 

what might be the impact of those lawsuits upon the financial system. 

That disturbed me. I asked him if that was true, and he said, 

‘‘Yes, that is true. We do consult with certain experts.’’ 

I am not sure those experts were identified. I am not sure I expected him to identify them. I do not know whether I submitted a 

question in writing for him to tell us who those so-called experts 

are. 

But I am talking about this environment now. Do you share the 

concern that charging large financial institutions or key individuals 

within those large institutions would have some broad ripple effect 

in the economy? And then, if those are concerns of our government, 

does not a refusal to prosecute create a lack of accountability for 

these institutions and the people who run them, like, for instance, 

you can do something wrong and maybe get away with it? 

Ms. RASKIN. Well, thank you, Senator Grassley. I certainly appreciate your concerns about a focus on accountability. I am not 

aware of the conversation with Mr. Holder, and I am not aware of 

the details around it. 

I can tell you that I have looked from the outside at some of the 

contours of these settlements with large financial institutions, and, 

16 

from the perspective that I sit in, certainly, at the Federal Reserve, 

we do look at consequences regarding financial stability, regarding 

the safety and soundness of the institution, as well as improvements towards transparency and, of course, economic growth. 

So I do look at it from those perspectives. 

Senator GRASSLEY. Well, let me give you my opinion, not that 

you would necessarily follow it or that I would expect you to, but 

I think that when we have an environment in which, if somebody 

breaks a law or an institution does something wrong, and somehow 

our government is afraid to charge them and prosecute them or 

pursue whatever the law allows them to pursue because it might 

have an impact on the financial institution, that you are allowing 

people to have an environment where you can get away with murder. 

Not officially murder, but get away with bad things that you 

should not be allowed to get away with, and it gives a certain 

amount of freedom that brings about more risk. It is a riskinducing thing if you tolerate that sort of thing. 

I yield the floor. 

Senator Hatch [presiding]. Senator Cardin? 

Senator CARDIN. Thank you, Mr. Chairman. 

Let me thank both of our witnesses. Ms. Schmidtlein, thank you, 

also, for your willingness to step forward, and we thank your family as well. 

I appreciate in your statement your reference to the remedy laws 

and that the laws provide vital tools for U.S. companies that are 

faced with unfair trade practices and that ITC decisions can impact 

the livelihoods of workers, farmers, and businesses across America. 

I could not agree with you more. 

We are under attack on our remedy laws. There is unity among 

our trading partners. They do not like them and do everything they 

can to undermine them. Multinational companies have invested a 

lot, also, to weaken enforcement of remedy laws. 

The ITC has been one of the strong institutions trying to protect 

congressional intent on the enforcement of our remedy laws. And 

I understand, when a specific case is before you, you have to act 

on the facts and apply the law and do that in a fair manner. 

But my question to you is, are you prepared to work with Congress to make sure that we have effective remedy laws, that we 

look at—particularly when we are in trade negotiations—the experiences that you would have on the Commission, if confirmed, so 

that we can, in fact, protect against unfair trading practices 

against America’s businesses? 

Ms. SCHMIDTLEIN. Yes, of course. I personally would be willing 

to provide whatever insight I could to any members of the committee or Congress when you are looking at how to make the remedy laws more effective. 

Senator CARDIN. Thank you for that, because I have probably 

testified before the ITC more than any other government commission. There seem to be more problems involving industries in our 

State. 

What has always concerned me is, there are technical defenses 

that are made through the applications of the remedy laws that try 

to undermine the congressional intent. And, to the extent that we 

17 

need to strengthen our laws here, I think the views coming from 

someone who has seen the application of these laws in a contested 

setting could help us make sure that Congress, which is responsible for the laws, passes laws that can be enforced. 

So I thank you for that. 

Ms. Raskin, I want to talk about savings and retirement savings. 

During the best of times in America, when our economy was performing as strongly as any in the world, we were dead last among 

the industrial nations on our savings ratios. At that time, we were 

told we do not have to worry about it too much because Americans 

are saving through the equities in their homes. And we saw what 

happened with the equities in their homes. 

I would like to get your view about working with Congress to 

provide effective tools so that Americans save more. This Congress 

has passed many bills, including the Savers Credit, to help lowerincome families, but it seems to me that Treasury should be playing an active role in looking at the fundamentals of the American 

economy. And I hope that you would share with me that Americans 

just do not save enough and we should be looking at ways to increase savings, which not only helps our economy from a macro 

sense, but also protects the security of individuals and government 

programs that are stressed with demographic changes. 

Your views? 

Ms. RASKIN. Thank you, Senator Cardin. And I know you have 

done a lot of work throughout your career on the issue of savings 

and pension work, and I think you are correct. 

My view is that this is an important component of our long-term 

sustainability and long-term growth in our economy, both in terms 

of moving through the recovery, as well as putting our economy on 

a path towards greater growth and sustainability. 

I think the proposals that you have mentioned are important, 

and, yes, I do look forward to working with you on them, if I am 

confirmed. 

Senator CARDIN. Thank you. 

Following on Senator Grassley’s point on currency manipulation, 

I certainly support the thrust of his concern. But I am going to ask 

Ms. Raskin that question, because Treasury does have a direct role 

in dealing with currency manipulation. 

We have seen some progress from our trading partners, but still 

any objective review would indicate that American companies have 

been at a disadvantage because of currency manipulation. What efforts can we expect, if you are confirmed, to bring these matters to 

the attention of Congress and to the attention of Treasury to get 

a more level playing field for American companies? 

Ms. RASKIN. Well, thank you, Senator Cardin. And I think both 

you and Senator Grassley have put your finger on a very important 

issue that requires continued diligence and, from my perspective, 

a lot of hard work, and that is the question of really bringing other 

countries into a market-based exchange rate regime. 

And I think that some countries are doing it better than others, 

but I think this is a problem and a set of issues that we need to 

engage in, because these are very important trading partners to us. 

18 

I will go out on a limb here and speak specifically of China, 

which is the world’s second-largest economy, and it is incredibly 

important that we get the relationship with China right. 

My understanding is that there are a number of multilateral and 

bilateral forums that Treasury has been working through in order 

to bring about certain changes in those relationships, one having 

to do with moving towards a more market-based set of exchange 

rates; two, I would say, is leveling the playing field, as you point 

out, so that our businesses and our workers are not disadvantaged 

in that relationship; and the third I would point out is seeing in 

these countries a movement away from being primarily exportbased countries to being ones more where they are feeding and 

growing off of internal consumption and demand. 

Senator CARDIN. I would just underscore, I agree with what you 

said. We want market-based currencies, not manipulated currencies. 

I hope that you can, through the forums you mentioned, get us 

to a level playing field. But do not be shy in asking Congress for 

stronger tools in order to deal with this. We have legislation pending here—and I am disappointed we have not passed it, because I 

think we have the support for it—but, if we can work with Treasury, I think it is vitally important that we get to market-based currencies as quickly as possible. 

Thank you, Mr. Chairman. 

Senator HATCH. Thank you. 

Senator Brown? 

Senator BROWN. Thank you, Senator Hatch. 

Welcome to both of you, and thank you for your public service, 

both of you. 

Governor Raskin, I appreciate your comments about the local job 

fair. Your behavior at the Fed is unusual, in a good way, of course, 

in doing those kinds of things. Abraham Lincoln used to talk 

about—when his staff said, stay in the White House, win the war, 

free the slaves, preserve the Union, he would say, ‘‘I need to go out 

and get my public opinion bath.’’ And I would encourage you to 

continue doing that. It is unusual behavior at Treasury. It was unusual behavior at the Fed, and something that we admire and appreciate. 

Following up on Senator Cardin’s and Senator Grassley’s question, you imply—maybe you imply, or maybe I have read something 

you did not exactly say—that there are signs that it is getting better. 

I have, in recent reports, though, noted that the Japanese government has undertaken a number of interventions in foreign exchange markets. We have failed to identify Japan as a currency 

manipulator. 

This department you want to go to has a history of resistance to 

news reports, analyses, and Senate and House admonitions, if you 

will, on the whole issue of currency. The administration—and 

whether it was Bush Sr. or whether it was Clinton, whether it was 

Bush Jr., whether it is this administration—talks a fairly good 

game on currency, but always falls short in doing this. 

Why is it going to be any better with you there advising Secretary Lew, who seems never to want to use the strategic economic 

19 

dialogues or any other opportunities to move forward, when we do 

know that there is a 20-percent or 25-percent tax one way, a subsidy the other way, on currency? 

Ms. RASKIN. Well, Senator Brown, thank you, first of all, for your 

very nice comments. And I will say that I certainly hope that, if 

I am confirmed to go to Treasury, I do have the opportunity to continue to go out into different neighborhoods and communities and 

learn from what I see there. So thank you for noting that. 

In terms of this administration and other administrations, as you 

say, showing a resistance towards listening, I hope I will be different. I do want to listen. I do want to certainly understand what 

the administration’s efforts are currently regarding putting pressure on countries that are not moving at the pace that we would 

like to see. 

So I would certainly want to understand what the efforts are 

that are underway and, yes, I will listen. I will listen to all of you 

regarding what you are seeing and why you might sense that 

progress is not moving as quickly as we would like. 

Senator BROWN. Thank you. 

Ms. Schmidtlein, there seems to be, in the last 30 years—and I 

think the statistics bear this out—a bias in our government, kind 

of maybe in our country, but it seems to be coming out of our government, towards financial services at the expense of manufacturing. 

I know it is not quite that simple, but, if you look at percentage 

of the GDP, manufacturing as a percentage of GDP, financial services as a percentage of GDP, the percentage of manufacturing has 

dropped precipitously. The percentage of financial services has 

gone up in almost reverse proportions. 

We saw, from 2000 to 2010, a loss of 5 million manufacturing 

jobs in this country, and 60,000 plants closed. In 2010, with the 

auto rescue, we saw, frankly, an administration—and I say an administration, meaning ITC and Commerce—that was significantly 

more aggressive in enforcing trade rules, not quite aggressive 

enough, in my mind, but more aggressive. 

I think that is, in part, why we have seen growth beginning in 

manufacturing, some half-million net job increase since the middle 

of 2010—again, not good enough, but something that is at least in 

the right direction. And I want to ask about the ITC’s role. We 

asked them to analyze the effect of a proposal—of proposed or concluded trade agreements—and these analyses tend to focus on the 

tariff reductions involved and estimated exports that may increase 

as a result. 

It seems they do not discuss the economic impact, though, of 

what these trade agreements mean for a community and for a region. Give us your thoughts on sort of expanding these reports so 

they cover a broader set of economic metrics, including the net effects on trade and employment. 

I do not put at the feet of trade agreements all of the lost manufacturing jobs, by a long shot, but I also do not think that Washington—and whether that is ITC or USTR or Commerce—really 

ever absorbs or discusses enough the impact on communities of 

those lost manufacturing jobs and how the gains are not spread so 

evenly to cover the losses of these trade agreements. 

20 

* The Foreign Investment in Real Property Tax Act of 1980. 

If you would, talk to me about what your plans might be as an 

ITC Commissioner in dealing with that. 

Ms. SCHMIDTLEIN. Well, as you just talked about and as I mentioned, this is one of the statutory responsibilities for the ITC: to 

support policymakers by providing these kinds of reports. And I 

have had the opportunity to work with economists over the course 

of my career. 

So, if I were confirmed, I would be committed to working with 

the Office of Economics and Industry Analysis at the ITC to ensure 

that the reports are looking at the full range of how the trade 

issues under question are impacting people across the country. 

How specifically would that work? I would have to see what exactly is being considered in those reports, but I would want to 

make sure that the reports are transparent about what is being 

evaluated, what is not being evaluated, what assumptions are 

being made, and the conclusions that are being drawn. 

Senator BROWN. So would you commit, while the ITC’s behavior 

is not—its traditions are not normally that way—to push your fellow commissioners to begin to broaden these analyses? 

Ms. SCHMIDTLEIN. I would certainly commit to reviewing this 

whole area to ensure that the full range of impact is being considered. 

Senator BROWN. Thank you, Mr. Chairman. 

The CHAIRMAN. Thank you, Senator Brown. 

Senator Menendez? 

Senator MENENDEZ. Thank you, Mr. Chairman. 

Congratulations to both of you on your nominations. 

Ms. Raskin, as you may know, the administration’s infrastructure investment plan calls for reform of FIRPTA* to increase investment in the U.S. and create jobs. It is common sense, in my 

mind, given the current economic circumstances, that we should remove barriers to foreign investment in the United States. It is a 

proposal that has gained broad bipartisan support here in the Senate. I want to thank the chairman for including FIRPTA reform as 

part of his discussion draft release. 

I raised this with Secretary Lew when he was here for his nomination, and he was not quite apprised of it. But I know that your 

predecessor, Mr. Wolin, has spent a fair amount of time on this. 

So I am going to ask you what I asked both of them, which is, if 

we all agree on the merits of reforming FIRPTA—the President put 

it out there himself—which I believe we do, why do we not administratively begin the action by repealing the relevant parts of the 

2007 IRS notice while Congress works on the issue? 

To use the President’s words exactly, ‘‘What are we waiting for?’’ 

Ms. RASKIN. Well, Senator Menendez, I know you have expressed 

strong interest in FIRPTA. I have to say that, in my current role 

at the Federal Reserve Board, I have not had the opportunity to 

become very skilled in the nuances of FIRPTA. I certainly share 

the goals that you have articulated regarding what its reform and 

amendment would do, and I look forward to working with you 

to—— 

21 

Senator MENENDEZ. Well, can you commit to us to create some 

focused attention within the Department? Because the Secretary 

has a big portfolio, right? I mean, through my other role as the 

chairman of the Foreign Relations Committee, I know that he has 

a whole bunch of seats on international financial institutions—I get 

it. He has macroeconomics in the country, he has a whole host of 

issues. 

But we need someone at the Department to follow through on 

what the President himself has said, in his infrastructure plan, is 

a critical element of trying to make sure that we get investment 

in the United States. And there is an administrative procedure, 

which I understand is revenue-neutral by invoking the repeal of 

that section of the IRS. 

So can I get from you at least a commitment that you will create 

some focus in the Department? You are going to be the numbertwo person. 

Ms. RASKIN. Absolutely. And again, if I am confirmed, I look forward to working with you in assuring that there is a focus on it, 

yes. 

Senator MENENDEZ. All right. Now, here is something that you 

may have much more experience with in your role on the Federal 

Reserve Board. The Fed has authority to set capital requirements 

for insurance companies, for example, if they are depository institution holding companies or non-banks, systemically important financial institutions. And I support strong capital requirements and believe they are an important component of both safety and soundness and systemic risk regulation. 

But I have heard from a wide range of insurers about the Fed 

applying bank-specific capital requirements to them, despite the 

fact that many insurance companies have a very different business 

model and, therefore, different balance sheets and risk profiles 

from banks. 

So a one-size-fits-all approach seems to me to be a challenge, 

and, of course, the Financial Stability Oversight Council, which is 

chaired by the Treasury Secretary, has an important role to play 

in making sure that financial regulators are utilizing the right 

tools to regulate industries that might not be as familiar to them 

as institutions that have been historically regulated. 

So, as you move from the Fed to the Treasury, I would like to 

get your commitment to work with this body to make sure that 

capital standards applied to insurance companies are properly tailored, that we understand the difference in the business models, 

and that we do not apply a standard that would be totally appropriate for banks, but in many insurance companies’ cases, would be 

totally inappropriate. 

Ms. RASKIN. And, Senator Menendez, that is exactly right. A onesize-fits-all approach is not going to work here. You are exactly 

dead-on correct that insurance companies have a very different set 

of asset liability structures than do banks, and to regulate them in 

terms of a one-size-fits-all approach is not going to be an effective 

form of supervision or regulation, in my experience. 

So I think you are right about that. Fortunately, the Federal Reserve has not gone ahead and pushed toward regulating these desVerDate Mar 15 2010 16:26 Sep 16, 2014 Jkt 000000 PO 00000 Frm 00025 Fmt 6633 Sfmt 6633 R:\DOCS\89659.000 TIMD
22 

ignated insurance companies in such a way that they are treated 

identically to banks, and I think that that is a good thing. 

And I would go, also, so far as to say that the FSOC—which 

made the designations because particular insurance companies 

were deemed to present a risk to financial stability—the FSOC 

itself has insurance expertise on it. I think three members of the 

FSOC can make good insights on questions of insurance structure. 

And so I think that is a good thing, and I think that that is going 

to work. 

And when these institutions are designated and become regulated and supervised by the Federal Reserve, the Federal Reserve 

is going to have to look at them in a way that obviously regulates 

them for their financial stability concerns, but does not do it in a 

way that imposes a one-size-fits-all approach. 

Senator MENENDEZ. Mr. Chairman, may I have one final, quick 

question to Ms. Schmidtlein on intellectual property rights? 

Ms. SCHMIDTLEIN. Yes? 

Senator MENENDEZ. New Jersey is the pharmaceutical capital of 

the Nation and the world, medicine cabinet to the world, a growing 

biotech sector, increasingly a high-tech sector, with major trade 

publications by the Wiley Company, just to mention a few. 

So, in the context of a national agenda in which intellectual property is, in essence, at the forefront of our competitiveness globally, 

we increasingly face countries, including countries that are, quoteunquote, ‘‘allies,’’ who, with impunity, violate those intellectual 

property rights. India is an example of it, and, of course, other 

countries, China and whatnot. 

I would like to hear your views, if confirmed, on how you will 

pursue this, when there are cases of intellectual property rights 

violations, at the Commission, what your position will be in terms 

of responding to it. 

Ms. SCHMIDTLEIN. Thank you, Senator Menendez. I agree this is 

a very important area and one that I intend to pay close attention 

to, if I am confirmed. 

I would commit that I intend to strictly enforce the laws when 

the evidence shows that one of our companies is facing unfair trade 

practices in the form of infringement of their intellectual property 

rights. 

The CHAIRMAN. Thank you, Senator. 

Senator Wyden? 

Senator WYDEN. Thank you, Mr. Chairman. 

Both of you have given very thoughtful answers on a number of 

issues. 

Let me start with you, if I could, Ms. Raskin. And I was not 

going to start with this, but you obviously have earned great bouquets for your efforts to try to bring people together, and that, obviously, is a skill in short supply here in the Nation’s capitol, if you 

look at the events of the last couple of months. 

So, for purposes of kind of starting in, do you have any thoughts 

on how you might, in this position, help to bring people together 

for pro-growth tax reform and, particularly, pro-growth tax reform 

that would help encourage investment in people? Because it is very 

clear to me that one of the premier economic issues of our time is 

underemployment. We have millions of workers who are underVerDate Mar 15 2010 16:26 Sep 16, 2014 Jkt 000000 PO 00000 Frm 00026 Fmt 6633 Sfmt 6633 R:\DOCS\89659.000 TIMD
23 

employed. We are talking about people who perhaps made $25 an 

hour a couple of years ago and now are maybe making half of that, 

possibly even less. 

So I have been very pleased that Senator Sarbanes and Senator 

Cardin have been talking about how you have a background of 

bringing people together, and that is surely useful on these big 

issues like tax reform. Tell me a little bit about how that bringingpeople-together set of skills could be used particularly on tax reform and especially how pro-growth tax reform could encourage investments in people. 

Ms. RASKIN. Well, thank you, Senator Wyden. And I want to 

start by saying I enjoyed our conversations earlier exactly on these 

topics, and you gave me a lot to think about. 

This is an incredibly important set of issues. I applaud you for 

your focus on pro-growth tax reform. I think tax reform does have 

the potential to be pro-growth. I have not had the chance to delve 

into the details of tax reform in my role as a Federal Reserve Governor or as Commissioner of Financial Regulation, but my instincts 

are that a simpler tax code and a tax code that essentially addresses issues regarding competitiveness could do a lot towards increasing growth in this country. 

And, in particular, you note the problem of underemployment, 

and you are exactly correct. I mean, the data show, the anecdotes 

support that many of the jobs that have been created are not jobs 

that people actually want to have. They are not full-time jobs a lot 

of times. People are sometimes cobbling together different parttime jobs. And the data show this. 

And the question, I think, for the long-term growth of our economy is whether a pro-growth pattern can be sustained when you 

have many people who are underemployed, and I think that this 

is a particular cost and feature of our labor landscape right now 

in the recovery. 

And again, I look forward to working with you to figure out ways 

in which we can—— 

Senator WYDEN. I am especially interested in going back to the 

skills at bringing people together and following up further on your 

ideas for how that could be done. I mean, what happened in 1986— 

and all of us here have been looking back at the lessons of 1986, 

and this is a different time. There are different challenges, but 

there are some lessons there. 

For example, in 1986, Democrats were very interested, rightfully 

so, in going after some of these ridiculous special interest tax 

breaks. Republicans said, we are interested in approaches that particularly promote economic efficiency in the private sector. 

So there are a variety of ways to bring people together. You have 

skills in that particular space. They are much in demand. I want 

to talk to you more about those kinds of approaches. 

Let me just turn to you with one quick question, Ms. Schmidtlein. And, obviously, you have terrific credentials. My colleagues 

were talking about the trade laws. You have expertise particularly, 

as I understand it, in the antidumping/countervailing duty statute 

space, and that is very important for a whole host of issues we are 

concerned about as they relate to renewable energy and a variety 

of different areas. 

24 

Tell us a little bit about what you see is the value of those statutes and how you can use them, again, to help pry open more opportunities for us to generate good-paying jobs in the private sector. 

Ms. SCHMIDTLEIN. Thank you, Senator Wyden. 

As you said, I agree that these are incredibly important statutes, 

and what they do is, they provide an opportunity for U.S. businesses and workers to level the playing field if they are facing unfair trade practices. And that is the purpose of them. 

So, if they are and they can get a remedy to level that playing 

field, then companies can compete to the best of their ability, which 

can, obviously, have the impact of creating jobs and preserving 

jobs. 

Senator WYDEN. I intend to support both of your nominations. I 

thank you today. 

Thank you, Mr. Chairman. 

The CHAIRMAN. Thank you, Senator. 

I have four obligatory questions I have to ask each of you. I will 

ask the questions, and I would like you to indicate whether you 

agree or disagree. 

Is there anything you are aware of in your background that 

might present a conflict of interest with the duties of the office to 

which you have been nominated? 

Ms. RASKIN. No. 

Ms. SCHMIDTLEIN. No. 

The CHAIRMAN. No. Thank you. 

Do you know of any reason, personal or otherwise, that would in 

any way prevent you from fully and honorably discharging the responsibilities of the office to which you have been nominated? 

Ms. RASKIN. No. 

Ms. SCHMIDTLEIN. No. 

The CHAIRMAN. Do you agree, without reservation, to respond to 

any reasonable summons to appear and testify before any duly constituted committee of the Congress, if you are confirmed? 

Ms. RASKIN. Yes. 

Ms. SCHMIDTLEIN. Yes. 

The CHAIRMAN. And this is a fourth that we have added. Do you 

commit to provide a prompt response in writing to any questions 

addressed to you by any Senator of this committee? 

Ms. RASKIN. Yes. 

Ms. SCHMIDTLEIN. Yes. 

The CHAIRMAN. Thank you. That last was—they are all, obviously, very important, but we kind of pride ourselves in this committee on working together. So, when a minority member has a 

question to ask of Treasury or whatever the relevant agency might 

be, we in the committee support it. So long as it is a reasonable 

request, and they are generally reasonable, we work together as a 

team, and I urge you to respond very quickly to those questions. 

Second, we developed a pattern, at least I have, over the years, 

which I think has served us quite well; namely, keeping in close 

contact with the relevant people in the administration and not getting blind-sided. 

For example, I speak weekly with Secretary Lew. We just talk 

to each other about matters that affect the Treasury that I am inVerDate Mar 15 2010 16:26 Sep 16, 2014 Jkt 000000 PO 00000 Frm 00028 Fmt 6633 Sfmt 6633 R:\DOCS\89659.000 TIMD
25 

terested in, and it is very helpful. I just think that getting the communication, getting to know people better, makes a difference. 

In addition, I speak frequently with acting Commissioner Danny 

Werfel, as he is working to get the IRS back up to speed. He is very 

good. He always calls me when there is about to be some news. He 

calls me in advance, and it makes a big, big difference. 

So I urge you both, if something is coming up that is relevant, 

let us know in advance, because we do not like surprises, and you 

will find this committee very much wants to work with you, with 

both the ITC and, also, with the Treasury. 

We are a team. We may not always agree, but the more we can 

talk things out, the more likely it is we are going to find a constructive resolution, and, obviously, that helps serve the American 

people. But it is something I find very helpful and I think is very 

important. 

Senator Hatch? 

Senator HATCH. Well, thank you. I intend to support both of you. 

I think you are excellent choices, and we will do everything we can 

to speed this process up as much as we can. 

With regard to the IRS, though, I have to say that we have to 

continue the cooperation as we investigate these problems that 

have arisen, showing preferences in the department, and I think 

you have to be as interested in that as we are, because you do not 

want that to happen either way. 

If the IRS loses its reputation for decency and honor, it hurts everybody. So we will count on you to help in that regard and to 

make sure that the investigation that we are conducting is completed, and completed properly. 

I think we have handled it rather well. I want to compliment the 

chairman. We have been working well together. Our chairman has 

done a terrific job, but we are about halfway through it, and we 

need to finish it up. So we are going to need your help, Ms. Raskin, 

and I look forward to working with you at the ITC as well. 

Congratulations. 

The CHAIRMAN. Thank you. Well, we wish you both all good luck. 

I know you will work hard. I know you are committed to public 

service, and I wish you all the best. 

The hearing is adjourned. 

[Whereupon, at 11:33 a.m., the hearing was concluded.] 

(27) 

A P P E N D I X 

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