FINANCIAL SERVICES AND GENERAL 

GOVERNMENT APPROPRIATIONS FOR 2

HEARINGS 

BEFORE A 

SUBCOMMITTEE OF THE 

COMMITTEE ON APPROPRIATION

HOUSE OF REPRESENTATIVES 

ONE HUNDRED EIGHTEENTH CONGRESS 

FIRST SESSION 

SUBCOMMITTEE ON FINANCIAL SERVICES AND GENERAL GOVE

STEVE WOMACK, Arkansas, Chairman 

MARK E. AMODEI, Nevada 

DAVID P. JOYCE, Ohio 

JOHN R. MOOLENAAR, Michigan 

ASHLEY HINSON, Iowa 

MICHAEL CLOUD, Texas 

JERRY L. CARL, Alabama 

JUAN CISCOMANI, Arizona 

STENY H. HOYER, Maryland 

MATT CARTWRIGHT, Pennsylva

MARK POCAN, Wisconsin 

SANFORD D. BISHOP, JR., Geo

NORMA J. TORRES, California 

NOTE: Under committee rules, Ms. Granger, as chairwoman of the full committee, and Ms. DeLau

minority member of the full committee, are authorized to sit as members of all subcommittees. 

LAUREN FLYNN, MARYBETH NASSIF, KATHRYN MAXWELL, 

ROB YAVOR, and NICK GORANITES

Subcommittee Staff 

PART 1 

President Biden’s Fiscal Year 2024 Budget Request 

and Economic Outlook ...................................................

U.S. Securities and Exchange Commission Fiscal Yea

2024 Budget Request .......................................................

Federal Trade Commission Fiscal Year 2024 Budget 

Request ...............................................................................

( 

Printed for the use of the Committee on Appropriations 

U.S. GOVERNMENT PUBLISHING OFFICE 

53–669 WASHINGTON: 2023 

son on DSKJM0X7X2PROD with HEARING
COMMITTEE ON APPROPRIATIONS 

KAY GRANGER, Texas, Chairwoman 

HAROLD ROGERS, Kentucky 

ROBERT B. ADERHOLT, Alabama 

MICHAEL K. SIMPSON, Idaho 

JOHN R. CARTER, Texas 

KEN CALVERT, California 

TOM COLE, Oklahoma 

MARIO DIAZ-BALART, Florida 

STEVE WOMACK, Arkansas 

CHARLES J. ‘‘CHUCK’’ FLEISCHMANN, 

Tennessee 

DAVID P. JOYCE, Ohio 

ANDY HARRIS, Maryland 

MARK E. AMODEI, Nevada 

CHRIS STEWART, Utah 

DAVID G. VALADAO, California 

DAN NEWHOUSE, Washington 

JOHN R. MOOLENAAR, Michigan 

JOHN H. RUTHERFORD, Florida 

BEN CLINE, Virginia 

GUY RESCHENTHALER, Pennsylvania 

MIKE GARCIA, California 

ASHLEY HINSON, Iowa 

TONY GONZALES, Texas 

JULIA LETLOW, Louisiana 

MICHAEL CLOUD, Texas 

MICHAEL GUEST, Mississippi 

RYAN K. ZINKE, Montana 

ANDREW S. CLYDE, Georgia 

JAKE LATURNER, Kansas 

JERRY L. CARL, Alabama 

STEPHANIE I. BICE, Oklahoma 

C. SCOTT FRANKLIN, Florida 

JAKE ELLZEY, Texas 

JUAN CISCOMANI, Arizona 

ROSA L. DELAURO, Connecticut 

STENY H. HOYER, Maryland 

MARCY KAPTUR, Ohio 

SANFORD D. BISHOP, JR., Geo

BARBARA LEE, California 

BETTY MCCOLLUM, Minnesota 

C. A. DUTCH RUPPERSBERGE

Maryland 

DEBBIE WASSERMAN SCHULT

HENRY CUELLAR, Texas 

CHELLIE PINGREE, Maine 

MIKE QUIGLEY, Illinois 

DEREK KILMER, Washington 

MATT CARTWRIGHT, Pennsylva

GRACE MENG, New York 

MARK POCAN, Wisconsin 

PETE AGUILAR, California 

LOIS FRANKEL, Florida 

BONNIE WATSON COLEMAN, 

NORMA J. TORRES, California 

ED CASE, Hawaii 

ADRIANO ESPAILLAT, New Yo

JOSH HARDER, California 

JENNIFER WEXTON, Virginia 

DAVID J. TRONE, Maryland 

LAUREN UNDERWOOD, Illinois 

SUSIE LEE, Nevada 

JOSEPH D. MORELLE, New Yo

ANNE MARIE CHOTVACS, Clerk and Staff Director 

(II)

with HEARING
(1)

FINANCIAL SERVICES AND GENERA

GOVERNMENT APPROPRIATIONS FOR 

THURSDAY, MARCH 23

PRESIDENT BIDEN’S FISCAL YEAR 2024 BUDG

REQUEST AND ECONOMIC OUTLOOK

WITNESSES

HON. JANET YELLEN, SECRETARY, DEPARTMENT OF THE TR

HON. SHALANDA YOUNG, DIRECTOR, OFFICE OF MANAGEME

BUDGET

Mr. WOMACK. Well, the clock shows a couple of minutes 

appointed time, so I am going to call this subcommittee he

order.

Since this is our first hearing, I would like to remind 

that we will follow the 5-minute rule for opening remark

tions, and comments.

Members will be recognized in order of seniority based 

is seated at the beginning of the hearing, going back and 

tween the parties. Latecomers will be recognized in the 

their arrival, going back and forth between the parties.

I will keep my opening statement brief so we can get r

the questions. And I don’t want it to look too much like 

against Mark Pocan, so reinforcements are en route. And 

are taking their seats, the Subcommittee on Financial Serv

General Government has come to order.

Appearing before the subcommittee today is Treasury S

Janet Yellen and Office of Management and Budget 

Shalanda Young. We thank you for joining us today. We w

ing forward to receiving testimony from the Council of E

Advisers’ Chief Chair Cecilia Rouse but wish her well.

We are here today to discuss the administration’s fiscal 

2024 budget request, and our Nation’s economic outlook.

This hearing has not occurred in over a decade, and it c

be more timely than in the midst of a great economic tu

is my opinion that the reckless spending and out-of-cont

latory expansion unleashed by President Biden and Democ

pushed us into a recession. It has been anything but a tr

cycle.

Our unsustainable trajectory is one of the greatest th

American prosperity, security, and future generations.

If we are to be guided by past performance, then I ha

concern about the administration’s budget. This administra

its agencies have failed to help Americans who have seen t

sonal savings crippled.


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It is not only fiscally irresponsible to continue down 

that we have been on, but it is intellectually dishonest 

that it has been working.

The annual inflation rate is 6 percent and out of touch 

contrast to the 3 percent assumed in the President’s bud

disappointing that the administration not only proposes ev

er spending but also incorporates optimistic economic assu

I was hoping that the fiscal 2024 budget request would 

limit Federal spending, but instead, it increases the publi

110 percent of GDP by 2033.

I have consistently advocated for solutions to chart a res

way forward. We must change gears and get going in the 

rection to help Americans get the relief they need.

The committee does not care to hear any excuses toda

want you to focus on how we can turn this economy arou

new and different policies than those that have failed us si

2020.

I would be remiss if I did not mention something that i

Americans’ minds—the current banking crisis and how A

taxpayers are on the hook for it. Whether through fees p

by the banks Americans rely on or taxpayer funded bac

ask you today to be frank with us about the real impact.

In conclusion, I will not be able to support the level of 

included in the President’s budget. Our members are takin

look at the spending request line by line and will determ

level of funding can be appropriated that puts our fiscal h

a sustainable path. I look forward to your testimony to

working with you on these important issues.

I am also excited to welcome the participation of Cha

Granger at our hearing today, and I will now recognize 

league and my friend, the ranking member from Maryl

Hoyer, for his opening statement.

Mr. HOYER. Well, thank you very much, Mr. Chairman

go into a long exposition of how much I disagree with som

points just raised by my dear friend. That is not surprising

of my colleagues to my right, I am sure.

But I am pleased to be back on this subcommittee, on 

served for 23 years prior to my becoming majority leader 

ago. I am glad to be back.

This subcommittee is sometimes not looked at as a s

committee, with issues that galvanize people, but it deals 

the chairman has just noted, some of the most importan

that confront our country and confront the administration 

Congress.

So I am pleased to be back here, in particular, pleased to 

here with my friend Steve Womack, who I believe to be on

most responsible and hardworking and focused Member

Congress of the United States on either side of the aisle, a

pleased to be his friend, and have been his friend, for a v

period of time, since he came to the Congress almost. A

looking forward to us working together very, very well.

But we are going to have very significant differences. Th

doubt about that. I have a chart, and I am going to do a 

Order if anybody wants to see it next week, which out


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some-odd years—plus years since 1948, and it outlines 

nomic progress made under Democratic administrations an

Republican administrations.

And in terms of jobs created, one of the most stunning n

Republicans had six more years during those years from 

2022—or 1949 to 2022.

Under Democratic presidents, 75 million jobs were 

Under Republican Presidents, less than 35 million jobs w

ated during those years.

This President’s economic program has created 12 millio

2 years. Unprecedented. Now, part of that, of course, is be

the pandemic and the loss of—hemorrhaging of jobs clearly

But the economic program that we put in place under th

Plan brought this economy back more quickly, frankly, t

other economy in the world. So I am proud of what we ha

and we are going to defend what we have done.

But we are going to have legitimate differences. We are 

have discussions about the level of funding. There are si

increases in many of the programs that we will confront. 

surprised that we will have a robust debate on that, and 

going to discuss justifications for those increases.

But from investing in American workers and families to 

up Medicare and other vital programs, it truly is a budge

view, for the people.

Additionally, it advances many priorities that fall under 

committee’s jurisdiction. It includes, for example, a 5.2 

cost-of-living adjustment for our Nation’s hardworking Fed

ployees to keep pace with inflation.

I might say as an aside, almost every nation in the world 

perienced inflation, not a result of policies that we adopted 

result of the pandemic, a shortage of supplies, disruption o

chains, all of those issues which make an impact on the e

As someone who has long been an advocate for America’s 

workforce, I will keep working tirelessly with my colleague

committee to ensure that these public servants receive the 

and benefits they have earned.

I was also pleased to see President Biden request a

funding for the IRS. I know that is going to be a big item o

tion. Mr. Womack and I have discussed that. We have a v

substantially different viewpoint.

And, Madam Secretary, I know you are going to be spe

that.

My view is that there is nobody who wants to pay m

their fair share. None of us want to see our taxes increa

every one of us ought to pay our fair share. That is the 

freedom. That is the price of our democracy. That is the 

our serving our people.

We want to give them the highest quality customer se

American taxpayers and rein in tax evasion and fraud 

making more than $400,000 a year.

Similarly, the proposed budget would strengthen the T

Department and other agencies overseeing our financial 

Clearly, we have seen a very recent example of how import

oversight is.


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The recent turmoil surrounding Silicon Valley Bank and 

ful of others reminds us of how crucial it is for the Treasu

ceive the resources it needs to coordinate with the FDIC 

Federal Reserve to safeguard our economy.

I might observe that no one probably in America has h

experience with those agencies than our Secretary of the T

Our subcommittee must see to it that the Treasury 

equipped to tackle these challenges quickly and effectively.

The budget also includes robust funding for our electi

structure, including Election Assistance Commission. I am 

be the author of that Commission, and I am proud that a 

lican President signed the bill, George Bush, that created 

the Help America Vote Act, which Bob May of Ohio, Repu

Ohio, was a critical partner in seeing that adopted.

These HAVA programs must receive the funding they ne

sure that our elections remain secure, accurate, and access

Without evidence, many people have raised the questi

whether the last election was a legitimate election—actu

election 2 years before that. If that premise is adopted, th

how the election may have been done incorrectly, then 

think everybody would want to support the Election A

Commission to give oversight to that very proposition.

These provisions, like the rest of President Biden’s budge

help set our Nation up for success for generations to come.

In this morning’s hearing on the Labor Health Comm

talked about the expenditures, that they are investments

ments in a stronger and better country, in a stronger econ

growth in jobs.

They stand in startling contrast to proposals, frankly, 

heard recently to roll back Federal appropriations to th

year 2022 level. The senior member on our side may ha

words to say about this.

This extreme course of action would lead to a cut of at 

percent for essential programs—essential programs.

These cuts would also deal a severe blow to airport and 

safety. Millions would lose access to healthcare services 

by community health centers. These are just a few of the 

of adverse effects these cuts would have on our country.

One more minute?

Mr. WOMACK. I am going to yield the gentleman another 

and I want to remind him that he does not have magic m

the committee like he is accustomed to in the majority. B

need to move on.

Mr. HOYER. It is such a sad truth that the chairman rem

of. I miss the magic minute more than I miss any other 

being majority leader, and I had that for a long period of 

I have just become accustomed to it, Mr. Chairman. I am g

you will discipline me properly.

It is not fair to put that immense burden on the Ameri

ple, those cuts. Instead, we must make sure that the Am

have the resources, opportunities, and support they nee

ahead.


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I think this budget is subject to oversight, as the Appro

Committee ought to do. We are not the agent of the admini

We are the agent of the American people, as you are.

And I want to say, in closing, how proud I am, I have 

opportunity and pleasure of working with Janet Yellen fo

many years.

Madam Secretary, you are credit to our country, you are 

to this administration, and you are a credit worldwide. Th

very much.

And then Shalanda Young, all of you know Shalanda 

Shalanda Young is one of the great resources of this coun

was a great resource to our committee. She is now a great 

to the Biden administration, but much more than that, 

great resource to the country. Thank you very much, Shala

I hope Charlie is doing well.

Thank you, Mr. Chairman. I yield back the time that I 

have.

Mr. WOMACK. The magic eight words from Steny Hoyer

back the balance of my time.

I would like now to take this time to recognize the h

chairwoman of the full committee, of the Appropriatio

mittee, Ms. Granger, for her opening remarks.

The CHAIRWOMAN. Thank you very much. Thank you, Ch

for yielding, and I would like to give an especially warm 

to Shalanda Young, who I have known since she was the 

rector of this committee, and Ms. Yellen, who is here an

speaks so well. So I thank you both for being here.

Shalanda is a very tough negotiator, but she gets what 

for, and she does it really well.

We are here today to discuss the administration’s fis

2024 budget request and our Nation’s economic outlook i

tremely important topic, and I want to thank the subco

chair, Steve Womack, for calling us all together.

During the State of the Union address, President Biden 

economy is strong. However, I think the numbers tell a 

ferent story. American people are struggling to make ends 

cause of high inflation. Everyday items, such as gas and g

still cost too much.

I look closer at the economic situation, when I do that, 

a cause for alarm. The Congressional Budget Office recen

if current policies continue, more than $20 trillion will be 

our debt over the next 10 years.

This leads me to believe that something has to change. 

afford to continue down this path. Instead of reining in s

the President’s budget proposes that more money be spen

necessary programs.

It is not clear to me how this plan would get the high pr

high debt we are currently experiencing under control.

Well, I have concerns about the proposal. I think it is im

to have an honest conversation about these issues so we 

begin to find common ground.

Secretary Yellen and Director Young, we look forward to 

from you. Thank you.


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Mr. WOMACK. We are also delighted to have the disti

ranking member of the full Appropriations Committ

DeLauro, and you are welcome to give your opening 

ma’am.

Ms. DELAURO. Thank you. Thank you very, very mu

Chairman, and to you and the ranking member, thank 

hosting this important hearing.

Delighted to welcome our guests today, Secretary Yellen 

rector Young, both of whom I have had the honor, as man

have, of working with over the years. And thank you, Mad

retary, and with regard to Shalanda, I worked with her wh

ranking member on Labor-H, but when I got to be the ch

she only spent a very few weeks before she was just, yo

snatched away by the White House.

But on both iterations, it is a delight and a pleasure to w

you, and thank you for the great job you both do.

Like the Appropriations Committee, the Office of Man

and Budget and the Department of Treasury touch every 

our Nation, and impact people at every stage of their live

by preparing the budget request and then distributing fund

after enactment, Treasury, by paying the Nation’s bills 

lecting our revenue.

You directly impact the government programs and serv

our communities rely on and help us to create jobs, lower 

families, improve public safety, support small busines

strengthen economic opportunity.

This committee knows this well because over the past 

with support from you and Democrats and Republicans, in 

House and the Senate, we passed and we enacted gov

funding bills that reversed decades of under investment w

ering drug and energy costs, creating jobs, supporting ou

making our Nation and our communities safer.

To continue this critical work, President Biden’s 2024 b

lows for vital increases in investments in the programs a

ices that hardworking people, small businesses, commu

need rely on.

And with an increase in taxes on big corporations, P

Biden is proposing a plan that rewards work, not wealth

that this budget blueprint would not be possible without 

less and dedicated work of the staff in your agencies th

and respond to the economic challenges of the day.

Secretary Yellen, I am glad to see a request for increased 

to the Department of Treasury. I look forward to discuss

this will ensure that wealthy and large corporations p

taxes, improve taxpayer experience, increase equities for 

nity development, job creation, combat money laundering

to implement a new outbound investment review progr

support sanctions activity related to the war in Ukraine.

I look forward to discussing the requests, and to revie

President’s full request in the coming weeks.

Secretary Yellen, I just have to say a thank you, and I 

for all of the work, your work and the Department’s wor

Child Tax Credit. We would not have been able to implem

Child Tax Credit without the Treasury and without the IRS


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You distributed $93 billion to families of approximately 

lion children around this country in 5 months; 4 million 

lifted out of poverty, the largest decrease in child poverty i

and the largest tax cut for working families in generations.

I have not seen a Federal program that has such a pro

fect in such a short period of time and has worked in such 

period of time. I believe it is really an essential tool to fig

costs and bring people and families to financial stability.

I just have to mention that, as Mr. Hoyer mentioned, I 

ried about the House Republicans’ leadership, the repor

posal to cut 2024 discretionary spending back to the 202

I have received responses to most of my letters to Cabin

taries and to senior leaders, outlining the dangers pose

American people if the cuts were enacted. The numbers a

horrifying.

Cuts cause irreparable damage to communities, gut p

that every single American relies on. The proposals in my 

unrealistic, not sustainable, and put people at risk.

So I look forward to discussing this with our witnesse

During the weeks to come, I will continue to work with 

leagues in both Chambers, on both sides of the aisle, to p

funding bills. We did, we passed final funding bills. Two 

a row we did that, with help from both sides of the aisle 

both Houses.

So we can’t—no Member, no Senator, no party, no cham

do it on its own, so thank you for being witnesses here t

your testimony. It could not be more timely. And again, I 

say thank you to Chairman Womack and to Ranking 

Hoyer and yield back. Thank you.

Mr. WOMACK. Thank you, Ms. DeLauro.

It is time now to hear our testimony today. Let me rem

witnesses that your prepared statements will be entered 

record, and you will each be given 5 minutes to summar

opening statements for the benefit of the committee.

And with that, Madam Secretary, I invite your testim

you are now recognized. Thank you very much for being he

STATEMENT OF HON. JANET YELLEN

Secretary YELLEN. Thank you, Chairman Womack and 

Member Hoyer. Thank you for inviting me to join you to

I would also like to thank you for your leadership of t

committee and support of the Treasury Department.

Two years into this administration, Treasury continues 

at the forefront of our Nation’s response to some of its mos

challenges.

We have advanced our country’s domestic and internati

nomic priorities thanks to the resources that you have pro

Our top priority is to protect the health of the U.S. econom

Two weeks ago, we learned of problems at two banks th

have had significant impacts on the broader banking sys

the American economy. In the days that followed, Treasury 

with the Federal Reserve and the FDIC to take decisive a

ful actions to strengthen public confidence in the U.S. bank

tem.


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We took actions to protect all depositors at the two failed 

tions and provide additional liquidity for banks. This was 

to mitigate risks to the banking system.

It is important to be clear, shareholders and debt holde

failed banks are not being protected by the government

losses from the resolution of these banks are being born

taxpayer.

Deposit protection is provided by the Deposit Insuran

which is funded by fees on insured banks.

As I have said, we have used important tools to act q

prevent contagion, and they are tools we could use ag

strong actions we have taken ensure that Americans’ dep

safe. Certainly, we would be prepared to take additional a

warranted.

Beyond our work on the financial system, Treasury has 

our administration’s broader efforts to recover and stab

economy from a once-in-a-century pandemic shock.

Our Office of Recovery programs help drive the fastest a

inclusive labor market recovery in history by coordinating t

tive implementation of the American Rescue Plan relief.

Today the unemployment rate is near historic lows. Our 

has added over 12 million jobs since the start of 2021. Ou

istration is now building on that progress by effectivel

menting long-term investments enacted by Congress.

Internationally, Treasury continues to mount a swift, b

enduring response to Russia’s illegal war against Ukrain

visit to Kyiv a month ago, Ukrainian officials told me f

about the critical impact of our work.

As part of a broad coalition, we are responsibly disburs

economic assistance to Ukraine. Since last February, Trea

also implemented over 2,500 Russian-related sanctions.

We have degraded the Kremlin’s ability to replace m

9,000 pieces of heavy military equipment that it has los

battlefield, and we have also stabilized global energy mar

cut into the Kremlin’s revenues by implementing innovat

on the price of Russian oil.

The President’s fiscal year 2024 budget requests the n

resources to continue advancing our Nation’s priorities. I w

light three imperatives.

First, the budget requests $14 billion in discretionary r

for the IRS. For too long, the IRS has been woefully unde

We are changing that. Our budget request provides stea

operational funding that will allow taxpayers to receive 

service possible. It will complement the one-time, long-term 

ment in the IRS from the Inflation Reduction Act.

We have already seen our investments pay off. For exam

IRS has answered a million more phone calls during this fi

son than at this time last year, and now is the time to 

this progress.

Second, our budget request shores up our capacity to re

Russia’s immoral war and advance other national securi

ities. It includes $244 million for the Office of Terrorism 

nancial Intelligence to continue to administer, enforce, a

ernize our sanctions regime.


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It also allows the office to expand financial intelligence a

tions-related economic analysis.

Further, the budget requests $229 million for FinCEN to 

its efforts to address deficiencies that illicit actors exploit 

scrutiny.

Third, this request enables us to continue our work to bo

long-term foundations of the American economy.

We are requesting $332 million for Treasury’s departm

fices which craft and implement policies to advance our 

priorities and coordinate government-wide efforts to promo

cial stability and growth.

We are also asking for an increase for the Community 

ment Financial Institutions Fund which expands credit an

cial support to historically underserved communities.

I want to end by thanking the men and women of the T

Department for their service. Their dedication and commit

spire me every day, and I could not be prouder to call them 

leagues. With that, I am happy to take your questions.

[The information follows:]


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Mr. WOMACK. Thank you, Madam Secretary.

Madam Director, Ms. Shalanda Young, the time is yours.

STATEMENT OF SHALANDA YOUNG

Ms. YOUNG. You will be happy to know I cut back. No 

repeat some of the things the Treasury Secretary touched 

thank you for having me here today. I don’t think you s

witnesses who are happy to come and do this, but when 

turns home, it is a very happy day for me to get to come 

this, and I still pinch myself and really because I get to 

to Secretary of the Treasury, Janet Yellen. So thank you fo

me.

President Biden came into this office with a very clear p

you have heard him talk about this—to grow not from 

down, but from the middle out and the bottom up. Over 

2 years, in the face of significant challenges, that strategy 

duced historic results for the American people.

You heard the Secretary of the Treasury talk about th

labor market, and the President’s economic plan promotes 

has fueled a manufacturing boom—close to 800,000 jobs i

facturing added back—and is strengthening parts of the 

that have long been left behind.

And this President has done all of that while being fis

sponsible. During his first 2 years in office the deficit fell 

than $1.7 trillion, the largest decline in American history. 

Inflation Reduction Act will reduce the deficit by hundred

lions more over the next decade.

The President’s 2024 budget details a blueprint to build 

progress and finish the job. It is built around four key val

cause budgets are values—investing in the American peo

ering costs for families, protecting and strengthening Soc

rity and Medicare, and reducing the deficit.

And it does all of this while ensuring that no one earn

than $400,000 per year will pay a penny more in new taxes

The budget more than fully pays for its investments, cutt

cits by nearly $3 trillion over the next decade by ask

wealthy and large corporations to begin to pay their fair sh

cutting wasteful spending to special interests.

The budget builds on the progress made over the last 2 y

proposes additional policies to lower costs for working fam

cluding for health insurance, prescription drugs, childcare, 

housing, college, energy, and more.

When working families have a little bit more breathin

they can help power our economy.

The President believes that Social Security and Medi

more than just programs. They are promises we have mad

erations of America’s seniors. The budget keeps that prom

tecting and strengthening these programs without cutting 

for our seniors that have paid into these programs the

working lives.

It also invests in America and working families by b

manufacturing, making our communities safer, providi

leave, supporting research in cancer, delivering for our v

cutting taxes for families with children, and more.


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These investments will pay dividends for decades to co

in what will be a decisive decade for America and the wo

budget reflects the National Security Strategy by includin

investments in military readiness, our diplomatic and deve

tools, and honors the sacred commitment to our veterans.

I would like to end by saying a few words about OMB’s 

and thank you to the members of this committee for su

OMB in the 2023 omnibus. Those resources have allowed 

critical career staff vacancies, investing in our outstandin

force, and restoring OMB to its historic staffing levels, ov

what had been the second lowest staffing level in 15 y

thank you.

And it comes at a moment when OMB continues to tak

nificant new areas of responsibility. To just list a few of t

are leading the President’s Made in America agenda—that 

based at OMB—implementing the Bipartisan Infrastructu

transforming Federal customer service delivery, and much 

thank you for your support.

Our fiscal year 2024 request will allow OMB to continue 

ing and maintaining our career staff, which is necessary 

advance OMB’s mission. Thank you for the opportunity t

before the committee today, and I look forward to your q

[The information follows:]


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Mr. WOMACK. Thank you, Director Young.

Members are advised that you have a timer in front of 

if that timer is working correctly, when it gets into the yel

means you have got a minute left. In the case of Steny H

are going to start in the yellow.

I am only kidding, Steny. He is my friend.

Mr. HOYER. Everybody else was hoping you were accurat

Mr. WOMACK. But we will start our Q&A now with 

nesses, and I will lead.

First of all, stabilizing the national debt should be a top 

not just this administration, but I think there is a cla

around the country for us to do something about this unsus

trajectory that we are on.

It is my belief that the President’s 2024 budget falls sho

deficit reduction needed to put our country on a sustaina

Director Young, when you testified here last on the 2023 

we discussed the debt and the need for solutions to addr

away spending and the national ledger.

So I have a couple of questions. The first one is a prett

question. Do you believe that government spending contr

inflation?

Ms. YOUNG. I have the Secretary of Treasury here who 

can speak to inflation better than I can, but I will point 

it was mentioned by Mr. Hoyer, we see inflation in most e

across the world. So what tells us is that coming out of 

demic, supply chain shortages have much more to do wi

tionary pressures we see across the globe.

Mr. WOMACK. Secretary Yellen.

Secretary YELLEN. So, I would agree with that. We have 

7 months in which 12-month inflation has been declining

seeing reduced pressures on supply chains, dramatic d

shipping costs, for example. That was an indicator of supp

problems.

The shifts in work—means of work during the pandem

rise to big increases in housing prices and rental pri

that’s—we can see in current indicators, that’s now stabi

coming down, and that will eventually pass through into 

flation.

So it is the first job—it is first the job of the Federal Re

take actions to bring inflation down, but these factors are 

it, and the administration has taken actions to brin

healthcare costs, to bring down energy prices, and to lo

costs that burden American families.

Mr. WOMACK. So it is my opinion that Federal spendin

sive Federal—I mean, we’ve got to spend money to finance 

of government, but excessive Federal spending, in my opin

contribute to inflation.

So the next question is, how much inflation should we 

and at what point will it be necessary for us to roll back 

spending?

Irrespective of the fact that has been suggested by th

and by the two witnesses here today that the entire worl

fering from inflationary spirals, so it is natural that we—

necessarily subscribe to that notion that we have to be like 


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of the world. We have some unique opportunities to contr

selves, to include the Federal budget.

So at what point in time, Ms. Young, does it become n

for us to reduce Federal spending?

Ms. YOUNG. So I will certainly answer that. You asked 

of different ways, should we keep our pressure on to bri

inflation. My answer to that is absolutely. We share that 

should understand what causes it.

As the Secretary has pointed out, the Fed has tools in 

deal with inflation with regards to raising rates. This adm

tion has also taken action through the Inflation Reduction 

But you are right, we share your concerns that Ameri

paying too much for household goods. But I would also p

some of the investments you see here, like in childcare, a

ing, and college, is exactly to help American families hav

more breathing room when they are trying to do their budg

So we agree, and I understand there will be disagreem

how to deal with that and bring that in, but my concern 

under the axe on some of these programs, I think about low

heating assistance, what happens to those families if those 

programs are pulled back so far that they hurt the very 

think all of us want to help?

Mr. WOMACK. Thank you. I am out of time.

I will recognize now the ranking member, Mr. Hoyer.

Mr. HOYER. I will try to stay in my time. First of all, le

serve, Mr. Chairman, nobody likes inflation. Inflation ea

particularly at those with fixed incomes. But.

I have served here, as all of you know, a long time, and 

under Ronald Reagan going into his third year, I believe, w

so—as a comparison. But we need to bring inflation down.

But I want to add something about a broader thing.

Madam Secretary, if we fail to increase the national debt 

headroom so that America can pay its bills, what impact 

have on inflation?

Secretary YELLEN. You’re talking about the debt ceiling?

Mr. HOYER. Yes.

Secretary YELLEN. I think it is utterly imperative that 

the debt ceiling. That is about allowing the government to 

bills it has already incurred. It has nothing to do wit

spending.

And a failure by the government to pay the bills it has 

is something that would be economically and financia

strophic. It would have a horrendous effect on financial 

where the United States is seen as an utterly secure co

which to invest.

U.S. Treasury securities are seen as the safest bedroc

global financial system. The U.S. dollar serves as the wo

serve currency.

We would be undermining that, and even coming clos

debt ceiling without raising it, we saw in 2011 that led to 

grade of the U.S. credit rating, and this will raise borrow

for American households and businesses for a good long tim

If we fail to raise the debt ceiling and had to cut spe

match the inflow of revenues that we had, we would be c


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have a recession or worse. It would be a dramatic cut in s

and the financial market consequences would be disastrous

I strongly urge Congress to raise the debt ceiling, and 

do so would lead to economic and financial chaos.

Mr. HOYER. Madam Secretary, would it be fair to say th

one of your predecessors, whether they be Republicans o

crats, shared that view.

Secretary YELLEN. Absolutely.

Mr. HOYER. Would it be fair to say that the last time w

that limit, it was a bipartisan vote in which the Democra

with Republicans to avoid that irresponsible action?

Secretary YELLEN. There have been many occasions, 90 

occasions in which Democrats and Republicans have jo

gether to raise the debt ceiling which simply allows the 

Department to pay the bills the government has incurred.

Mr. HOYER. Madam Secretary, the last question I woul

you is, we passed an $80 billion—or $87 billion increas

Treasury—excuse me—in the IRS budget in the Inflation R

Act. That was to get them back to a position they had b

a decade ago, while the population of our country has subs

increased and the complexity of our tax system has increas

The proposition was made that we had done so, so th

would be armed guards at everybody’s doorstep demand

they pay their taxes.

Everybody ought to pay their fair share but no more th

fair share. Would you comment on what we need to do w

You mentioned it in your statement, but elaborate on what 

sequences of cutting that increase to get them to a level wh

can service the American people.

Secretary YELLEN. So the IRS needs both discretionar

priations that are adequate to service a base level of spe

an ongoing basis, and that budget for ongoing expendit

fallen by 20 percent in real terms just between 2011 and 20

The staffing levels at the IRS are at 1970 levels in spi

fact that our GDP has risen enormously since that time, 

need for staffing has increased. The consequence of that h

a tax gap that, over a decade, is estimated at $6- or $7 trill

Mr. HOYER. Those are taxes due but not paid?

Secretary YELLEN. Due but not paid. And the money 

spend on the IRS, both discretionary and mandatory, contr

lowering the deficit because it enables more tax collections.

And importantly it is also a question of service to the A

people, of do they get the phone calls they make answered.

I promised that with this additional funding, this tax sea

IRS response rate would be, in customer service, would 

percent from a level under 20 percent last year. And so 

is meeting that.

So Americans can see, as they have contact with the I

the IRS is going to be servicing their needs, and the mo

was allocated for mandatory spending over the next dec

serve to modernize the IRS and transform it into a moder

that will work with businesses, work with households, mak

for them to pay their taxes and——


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Mr. HOYER. Thank you, Madam Secretary. My time is 

pired.

Secretary YELLEN. Thank you.

Mr. WOMACK. Thank you.

Mr. Amodei.

Mr. AMODEI. Thank you, Mr. Chairman, and I also wan

that I would, like, to take up something with the ranking 

offline, but I was told this committee was a sexy commit

so we will need to straighten that out before we go much 

in this process.

Mr. HOYER. Well, I am new to it, maybe I will find 

ferently.

Mr. AMODEI. We would be happy to put you through 

charm school. Thank you, sir.

Madam Secretary, can you tell me how much the IRS bu

increased in this last budget cycle?

Secretary YELLEN. Sir, you mean between 2022 and 2023

Mr. AMODEI. Yes, ma’am.

Secretary YELLEN. Or with the request?

Mr. AMODEI. No. Between 2022 and 2023, the budget you 

erating now, how does it compare to the budget that you w

ating with the year before, if you know generally? And you 

back to me later, but——

Secretary YELLEN. There was $100 million decrease.

Mr. AMODEI. Okay. And so can you tell me, if you have 

ion, on what the IRS’ reputation is amongst the country? H

done any polling or anything like that to see what gener

payers think, middle, wealthy people, bottom—bottom—I m

they kind of like the National Park Service? Are they a l

ferent? What do you think their impression is?

Secretary YELLEN. Well, it is extremely negative because 

has been starved for resources, and so, there are insuffic

ple——

Mr. AMODEI. I don’t mean to cut you off, but I have got e

time than the ranking member does. So you think it is r

related that they have——

Secretary YELLEN. Absolutely.

Mr. AMODEI [continuing]. Have a bad reputation? It is n

do with historical culture in the agency or anything like 

that your testimony?

Secretary YELLEN. The agency has been resource-starved

not been able to invest in the kind of technology that mak

Mr. AMODEI. Is it your testimony that you think it is be

resource starvation that the IRS has an alleged reputation 

taxpayers in this country? Is that your testimony? Is it 

they were starved of resources in order to have a better rep

Secretary YELLEN. People know that if you call the 

phone isn’t answered, and you—it’s difficult to do business 

IRS, and that reflects a shortage of resources.

Mr. AMODEI. I will accept that as your answer.

Can you tell me the specific energy jurisdiction that is h

the Department of Treasury under the United States Code?

Secretary YELLEN. I am sorry?


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Mr. AMODEI. Can you tell me the specific energy jurisdic

is housed in the Department of Treasury under the Unite

Code?

Secretary YELLEN. Energy jurisdiction?

Mr. AMODEI. Yes, ma’am.

Secretary YELLEN. I am not sure I understand what tha

Mr. AMODEI. Okay. Well, then let’s try this one. Can you 

what the election jurisdiction is of the Department of Tre

reflected in the United States Code?

And I am just going off the statements that were made 

ma’am, about, you know, I mean, they ranged—they we

ranging, as well they could. I am just looking for specific 

tion in existing statute for energy policy from the Depar

Treasury, from elections policy from the Department of T

Secretary YELLEN. Well, with respect to energy policy, f

ple, our Office of Tax Policy has responsibility for writing t

lations to implement all of the clean energy tax credits 

part of the Inflation Reduction Act and earlier——

Mr. AMODEI. So that is—do you collaborate with anyb

the Department of Energy, or is that all Treasury’s bailiwi

you are writing those regulations?

Secretary YELLEN. We certainly collaborate with the Dep

of Energy and other agencies that have expertise in this ar

Mr. AMODEI. Okay. And I was listening and I underst

important programs like childcare or low-income energy as

those are all good things. Is there any analysis that take

Because unfortunately a lot of this is multitasking, and so

quite frankly, is value judgments.

But when you talk about, we have got to continue the 

tax credit, and we have got to continue low ener—is th

analysis that takes place in terms of trying to find a sweet 

tween what that costs and what is unfunded in the conte

debt?

Ms. YOUNG. It is okay if I take it?

Mr. AMODEI. Yes, ma’am.

Ms. YOUNG. This is where I say, we have disagreements, 

President believes it is incredibly important, if we put p

forward, like the Child Tax Credit, we should pay for those

Mr. AMODEI. And I get that. I am just saying, we don’t 

luxury, as the Budget Committee—not the Budget Comm

mal, but the funding committee, to say, we are not going 

this competitive in any way, shape, or form with other 

spending whether it be deficit spending or paid for by s

enue stream.

So am I correct that the testimony is, we don’t evalua

that does in the context of the overall appropriations bi

things are untouchable in terms of a budget request?

Ms. YOUNG. So I spent 3

1

⁄2 hours with your colleagues a

budget who you know look at both sides of the ledger, discr

and mandatory revenues——

Mr. AMODEI. Yeah, but Shalanda, that is a B committee.

Ms. YOUNG. Don’t make me do that. I really like C

Arrington. Don’t do that to me.

Mr. AMODEI. I withdraw the comment.


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Ms. YOUNG. But that is the committee, and as the form

man of the Budget Committee sits there, we know jurisd

Congresses are complicated, but what Budget does brin

table is, we look at spending, revenue, all those things in o

and see how our fiscal house is doing.

Mr. AMODEI. Thank you, and because I do not want to 

the esteemed ranking member of the committee’s footstep

yield back, even though I have no time to yield back.

Mr. WOMACK. Thank you, Mr. Amodei.

I was about to have his words taken down about this 

about Budget Committee. You know, that was unaccepta

is next?

Ms. DELAURO. Me.

Mr. WOMACK. Ms. DeLauro, you are recognized.

Ms. DELAURO. Thank you very much, Mr. Chairman. I 

make one quick point. Mr. Amodei’s point, there was neve

connection made in the past about what contributes to th

in terms of $1.7 trillion and a tax cut to the richest one

1 percent of the people in this country and to the biggest 

tions who pay no tax.

With that, Director Young, give us an idea of the real 

of the cuts that are being proposed, with regard to usi

numbers, to the 2024 budget. Describe the human conseq

children, families, seniors, veterans, and millions of peop

the country.

Ms. YOUNG. Ms. DeLauro, you asked the administrat

sent letters. We responded to those, and I will highligh

things we let you know in letter form in response.

We are concerned with budget cuts that would take us b

we would lose 11,000 FBI personnel, that we would lose 

local law enforcement through cutting back on State a

grants at the Department of Justice——

Ms. DELAURO. So we defund the police. Go ahead.

Ms. YOUNG. We are concerned that 11,000 fewer rail s

spections would happen, 30,000 fewer miles of track inspec

down of 125 air traffic control towers, TSA wait times g

cause fewer people, Pell grants for 80,000 students would 

nated and reducing the maximum award by $1,000.

Ms. DELAURO. It goes go on and on and on.

Ms. YOUNG. So there are a lot of examples, and we hig

many of those in response to your letter.

Ms. DELAURO. Thank you, and I thank you for helping m

those response.

Have you heard, either Director Young or Secretary You

my colleagues on the other side of the aisle made any sim

quests for information about the impact of the cuts that 

tend to try to make?

Ms. YOUNG. Well, I certainly don’t monitor everyone w

call. If you are asking, have I entered into this dialogue, no

cally about these cuts.

Ms. DELAURO. You haven’t heard from the other side 

of the implication of the cuts.

Let me move to Director Yellen, because I want to try 

to the amount of time I have, Mr. Chair.


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I appreciate your partnership on the outbound invest

view. Pleased that you, Commerce, et cetera, requested $60 

This is a mechanism, through executive order, that review 

at the outflow of U.S. capital and what effect that would 

our supply chains, our economy, our economy overall.

And so it is my understanding that the executive order 

at artificial intelligence, quantum computing, and semicon

As you know, I want to make this stronger. I have trie

at, that we ought to include in this large-capacity batteries

minerals, active pharmaceutical ingredients.

And that is why I have introduced the National Critical C

ties Defense Act, which I might add is bipartisan, both 

House and in the Senate.

How will the potential executive order on outbound inv

include or add sectors outside of those that will be origin

lined by the administration? What is your plan to expand a

ify the executive order going forward?

Secretary YELLEN. So we are working on this order an

to determine exactly what it should cover. We have been 

on the most sensitive technologies and sectors that are c

our national security.

We think it is important to work with other countries 

these restrictions effective, and these are areas where I t

have the greatest chance of working collaboratively with o

ners.

But we are certainly open to engaging with you to discu

the right coverage is. Would look forward to conversations 

would say, around supply chain issues.

There are many initiatives underway to strengthen ou

chains. That is a very important focus of the Inflation R

Act when it comes to batteries, clean energy, and reducing 

pendence on China, for example, where many of the criti

erals—so we are taking a range of actions on those critica

in any event.

Ms. DELAURO. I would just add, with regard to active 

ceutical ingredients, let me just put it in real terms. We ha

demic where we found that the active pharmaceutical ingr

drugs efforts were not manufactured in the U.S. but manu

in China or in India. We need to bring that back.

Secretary YELLEN. I think supply chain issues are criti

portant.

Ms. DELAURO. I thank you both very, very much for yo

Thank you, Mr. Chairman.

Mr. WOMACK. Mr. Joyce.

Mr. JOYCE. Thank you, Mr. Chairman.

Secretary Yellen, I am sure you know earlier this year t

pean Union’s Corporate Sustainability Reporting Directi

into effect. This EU law has unprecedented scope and wil

ESG-related requirements on many U.S. businesses, requi

they gather detailed information from their suppliers, w

clude American small businesses. These rules go farther th

the most aggressive proposals by our own regulators.

As you know, SEC Chairman Gensler’s proposal would 

disclosure of Scope 3 greenhouse gas emissions for Ameri


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panies. This proposal has been widely criticized for the bur

it imposes on businesses of all sizes.

And as bad as the SEC’s proposal is, the EU has now 

a standard that is much more burdensome in which man

ican businesses are already preparing to comply with.

I am sure you can understand why this proposal is trou

Members of Congress when foreign governments mand

their mandates on U.S. businesses.

On this matter, what is the administration doing to pro

businesses from burdensome foreign regulation and preven

which undermine our sovereignty?

Secretary YELLEN. Well, different countries are movin

ferent speeds and in different ways to address climate cha

we are encountering conflicts with other countries becaus

ferences in our approaches.

I think as a fundamental, we agree with the Europea

that disclosure of climate-related risks is important so th

tors are able to make good choices about where they invest 

derstand the risks in different companies.

So as a general matter, we believe, as the Europeans d

closure, which is behind Chair Gensler’s proposal. I know 

received many comments on.

But we are engaging with the European Commission t

stand the implications of their proposals. We want to avoi

essary market fragmentation which different approac

produce.

We want to maintain a level playing field for U.S. compa

make sure that they are not burdened with incompatible re

requirements around the world. So this is an important is

we are focused on addressing.

Mr. JOYCE. All right. I accept that.

Secretary, also this administration and you just claim

that billions of dollars in additional funding, provided to 

in 2023 for increased enforcement, will somehow not be use

get individuals making less than $400,000 per year.

I got to tell you, I am a little skeptical of that claim, 

know, which specific mechanisms has your Department 

IRS put into place to make sure that this money is not 

burdensome audits for ordinary Americans?

Secretary YELLEN. I have issued a directive to the IRS th

ly prohibits them from using these funds to target indivi

small businesses making under $400,000.

And let’s be clear, the reason—the focus of this, there a

two focuses of this money that has been allocated. One is t

improve customer service, both for individuals and for bu

modernizing the IRS.

And the second is to address the tax gap, and the tax 

related to individuals or small businesses making under 

a year. It is wealthy, very high income individuals, comp

nerships, and corporations that are, by and large, underr

and underpaying their tax.

And the money will go to hiring trained, experienced acc

and techs, professionals who are able to do the complex au

are necessary to recover those funds.


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So there would be no motivation to want to target t

making under $400,000, and I have directed the IRS that t

not do so.

Mr. JOYCE. For 10 years now I have been on this commi

money has been given year after year to automate the pro

the IRS. And now you are saying that they need more m

versus automation?

Secretary YELLEN. They need manpower and automat

there will be, for example, of the resources in the budget 

the lion’s share will go toward technology and operations, 

ward net increases and enforcement.

That will take time, but there will be massive improveme

time in technology, and we will end up with a modern age

people will have much better experience and companies in

with.

Mr. JOYCE. I yield back.

Mr. WOMACK. Mr. Pocan.

Mr. POCAN. Thank you, Mr. Chairman, and thanks for 

this hearing. I appreciate it. And thanks to our witnesses

like to try to get to two areas. So let me start first kind of j

ing about the economy, worried about the debt ceiling tha

facing. So we just talked a little bit about interest ra

Moody’s Analytics. They had economists who predicted 

would have global market panic in the scale of the 2008 

crisis that would result in more than 7 million job loss, an

ployment rate of over 8 percent, elimination of 10 trillion i

hold wealth and decline in real GDP of more than 4 per

that means people are paying more for small business l

cars, for homes.

The second part that I would like to ask Director Young 

cally about that a debt limit breach could disrupt expec

ments to the military, veterans, and seniors, specifically, 6

Americans who receive Social Security and Medicare bene

18 million veterans who could lose access to their benefits

330,000 people in my State. Could you just briefly address 

pect of the debt ceiling?

Ms. YOUNG. Many of us have experienced shutdowns wh

ple don’t get paid until the government reopens, and we

not that. You have heard the Secretary of Treasury lay out 

astrophic economic fallout from a default and what it mea

can get close to flirting with. But it also means those pe

have payments, like our military, like our veterans, like ou

who are on Social Security and Medicare. We will know t

nues we have as Treasury processes those. So we cannot g

what gets paid. And it will be a very chaotic situation whe

who are allowing the government for salaries and services

what default is. That means we cannot guarantee that they 

ceive their paychecks or the services in which many of th

paid into their entire lives.

Mr. POCAN. Thank you. I just think back home people d

about raising the debt limit. That is very Washington-sp

they talk about whether or not they get their Social Securi

their veterans benefit, whether interest rates are going 


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when they buy something. And I think those are the real 

tions that we should be talking about more as we do this.

Second area—and this is I will admit is a little bit ou

field—but I have a real concern where we are at right n

the fed and raising of interest rates. And, Secretary Yellen

specifically for you, I respect your opinion so much. I know 

not in charge of the Fed, but I do respect your opinion.

So the normal business, the normal model, I guess, is if 

is high, the Fed has kind of a singular blunt tool of raising 

rates until people lose jobs. I guess that is best way of p

in a blunt way. But I don’t feel that this is a normal time 

terest rates go up and that works. I feel like—and I am 

business owner for 35 years. And I could tell you what I a

right now.

First of all, our offices—I am guessing everyone has 

dented requests for passports right now, because people af

years of not traveling want to get out and go somewhere. A

is not going to be stopping. And in our business, we deal b

to-business trade association nonprofit, that is not stoppi

haven’t had some of the events for the last 3 years. They a

it no matter what happens. So demand isn’t necessarily goi

at the rate you would expect. Yet, we are affecting the 

market. We are affecting banks right now. We are having 

negative effects by continuing to raise the interest rates

are not—it is not normal model. I just don’t feel like it fro

thing I am seeing and experiencing from being on the p

58 years.

So my question is, in your opinion, are we doing the 

fort—corporate profits are way high. There is a lot of thi

are askew as you look at the model that is happening. I 

ultimately, this could have some really negative reces

ramifications and other ramifications, and I am worried ab

tinuing to raise interest rates.

Secretary YELLEN. So first let me say, I don’t want to 

on the Fed’s interest rate decisions. I respect their indep

While I was over there myself and had to make these de

wear a different hat now and don’t want to comment on th

I have long said, I do believe there is a path by which we c

tain a strong labor market by—and also bring down inflat

I believe that is the path that the Fed would ideally like t

The labor market at the moment is extremely tight. T

roughly two vacancies for every person looking for a job. A

pressure is—it is certainly not the only factor involved in i

but it is contributing to inflation, particularly in services. 

some inflation is coming down because of supply chain or 

and impact of Russia’s war on Ukraine, the Fed is concer

they need to relieve some of that pressure.

That doesn’t mean we have to have a recession. I wou

that it is a risk whenever monetary policy is being tighte

I believe that there was a path that will bring it down 

really damaging the labor market. And that is what I hop

see.

Mr. POCAN. I appreciate it. I yield back, Mr. Chairman.

Mr. WOMACK. Thank you. Mr. Moolenaar.


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Mr. MOOLENAAR. Thank you, Mr. Chairman. Secretary 

Director Young, thanks for being here with us here today.

Secretary Yellen, on February 17, over a month ago, I 

a letter and asked you in your capacity as chair of the Co

on Foreign Investment in the U.S., CFIUS, to provide an 

regarding large foreign investments in Michigan. Are you 

with that letter?

Secretary YELLEN. Yes, I am familiar with the letter.

Mr. MOOLENAAR. To date, I have not received a respon

my constituencies wanted to know that you are reviewin

ments that could pose a possible risk to our country and a

it in a timely manner. When can I expect a response to m

regarding a CFIUS review?

Secretary YELLEN. I apologize that we haven’t respon

promise that we will do so quickly. But I do want you to k

in the work we do in sharing CFIUS, that we are very fo

evaluating foreign investments in the United States that 

pose national security risks. I can’t speak to whether p

transactions are or are not being reviewed by CFIUS. Tha

ject to strict confidentiality. But the issues that you raise 

letter are ones that CFIUS takes very seriously and is atte

Mr. MOOLENAAR. Okay. So I understand you don’t want 

ment on specific situations. But can you comment on what

view, would constitute a risk? You know, if a China-based 

has CCP members on their boards, do you believe that 

with CCP members on its board constitutes a risk in th

States if it is located here?

Secretary YELLEN. I don’t want to make a blanket a

about that. It certainly could. But what CFIUS does is a 

and detailed analysis of whether or not the investment is 

or involves technologies or things that would involve a nat

curity risk.

Mr. MOOLENAAR. Okay. Would a company investing 

United States, if it has in its articles of association the requ

for the company to set up a CCP organization to carry o

activities in accordance with the Constitution of the CCP

you see that as a risk to the United States?

Secretary YELLEN. Well, it certainly could be a risk. I 

would need to know a little bit more about what the activi

what the investment is, but certainly, that is something th

certainly constitute.

Mr. MOOLENAAR. You know, if a company was requirin

cans to adhere to the principles of a hostile foreign gov

would that constitute a risk?

Secretary YELLEN. Well, I think we would need to know 

what the business is of the company and how it impacts 

security, because the focus of CFIUS is really on national 

So we would have to take these concerns to national securi

Mr. MOOLENAAR. And if a foreign company requires its 

aries to promote influence and intelligence operations by 

governments within the U.S., would that constitute a risk?

Secretary YELLEN. Well, that certainly seems to go direct

tional security.


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Mr. MOOLENAAR. You know, as the committee with respo

to oversight, what you are telling me is this is a very im

matter.

Secretary YELLEN. Absolutely.

Mr. MOOLENAAR. But we don’t have the information 

many CFIUS reviews are being conducted, which, you kn

ority projects are being looked at. When communities or S

looking at different projects, how do they know how to ma

decision? You had said earlier how transparency is very im

in making decisions, and I agree with that. What guideline

have for communication of this?

Secretary YELLEN. I can have my staff get back to you 

you more detail on this. And they may be able to offer 

without going into details about——

Mr. MOOLENAAR. Sure.

Secretary YELLEN [continuing]. Specifics that could be he

Mr. MOOLENAAR. And I think it is simply because you kn

I noticed and I appreciated your comments about Russia, t

tion in Ukraine. You mentioned China recently. Obviously

a—you know, new Select Committee on China. I happen to 

of that, as others do. And, you know, in looking at that, 

to make sure we consider the threats posed by the CCP. A

ously, they are doing a lot of investments in the United Sta

you are on point for this with the CFIUS reviews?

Secretary YELLEN. These investments get very detailed 

and serious review. And it is a very thorough process an

very seriously to try to identify national security risks. I w

my staff to give you more details on this.

Mr. MOOLENAAR. Thank you.

Secretary YELLEN. But——

Mr. MOOLENAAR. Thank you, Madam Secretary. Mr. Ch

Mr. WOMACK. Mr. Bishop.

Mr. BISHOP. Thank you very much. Let me welcome our 

nesses, Secretary Yellen, Director Young. The President’

invests in America are lowering costs, strengthening Soc

rity, Medicare, and attacking the deficit. On the other h

proposed unprecedented cuts in fiscal year 2024 to fiscal y

levels that the Republicans have offered, seems to, or will 

seems to have a tremendous effect on education, public sa

search, and nutrition. Would this have a real damaging 

our families, communities, and economy and competitivene

The Treasury provides some critical services that Ameri

ple rely on every day: payments, tax refunds, taxpayer as

It appears to me that if we go back to 2022 levels, it would 

astating to the American people. Treasury is responsible 

enue collection, financial management, borrowing, and deb

tion for the entire government, and promoting internatio

nomic stability.

You protect the integrity of our financial system, and you 

global financial crime and corruption. And, of course, it w

pear that going back to 2022 levels would certainly impair 

ity to monitor risks to ensure an effective and unified app

promoting financial stability as we are faced with right n


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national security would appear to be impacted. And if eith

can comment on this.

The Office of Terrorism and Financial Intelligence would 

ardized—our national security would be jeopardized beca

wouldn’t be able to enforce sanctions, including the sanct

geting Russia and the—when we are supporting Ukra

would appear to send the wrong message to Mr. Putin. So 

like your ability to carry out your functions would be trem

limited. And, of course, looking here domestically, you hav

sponsibility of the community of government financial ins

grants and assistance. And, of course, if you have to cut th

if means that many of America’s most economically disadv

communities would be hurt because there would be fewer 

for small business living, affordable housing, and consum

ucts and services to help with our economic development 

growth. It just seems as if all of this is a big, big proble

step backwards.

Can the two of you comment on what that really mean

American people; what the Republicans are trying to do 

back from the proposed increases that the President has o

the 2022 levels?

Secretary YELLEN. Well, you have given an excellent list 

in which Treasury programs would be impacted. The Inter

enue Service, you would see, is we now are operating wi

percent level of customer service. It would revert to the 

levels we had before funding was increased. And the mo

is allocated to the Inflation Reduction Act for modernizati

agency would have to go for the basics of processing ret

you said, cuts for the Office of Terrorism and Financial Int

would compromise our ability to put in place sanctions. 

FINCEN would mean we are less able to combat corrup

money laundering globally; cuts to the CDFI fund would m

are less able to support disadvantaged communities and f

there. And really, these are all important ways in which T

would be effective.

Mr. BISHOP. Would you say that to do that would really 

in the face of common sense and the protection of the A

people?

Secretary YELLEN. Yes, absolutely. And with respect to 

it would be deficit increasing, not deficit reducing, beca

money that we provide to the IRS has a great impact on i

to collect taxes. And so it would be a false economy.

Mr. BISHOP. I think my time has expired.

Mr. WOMACK. Mrs. Hinson.

Mrs. HINSON. Thank you, Mr. Chairman. Good afternoon

Secretary Yellen, thank you for coming before our committ

It is nice to meet you in person and get the opportunity to 

some questions. And, Shalanda, Madam Director, it is grea

to you. It was great to have a conversation yesterday a

really appreciate your time in answering some of my quest

terday before the committee hearing.

So what I want to start with, Secretary Yellen, is I wa

low up a little bit on your comments that my colleague w

of asking about CFIUS, specific to national security. O


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with Treasury’s role in making sure we are taking a bette

transactions and foreign investments. Specifically, the fo

vestments by entities like the Chinese Communist Party, I 

on the Select Committee on Competition with China. So 

working to, of course, combat their efforts to gain control o

ical areas of our society. It has never been more vital in m

to conduct that critical oversight of our foreign investment

risk our national security.

And so, a hot topic on the Hill today. I want to touch on 

Because for the past several years, TikTok has been nego

national security agreement contract with CFIUS in res

the criticisms that the app is putting American data at r

earlier today, we learned that TikTok had published a vide

was a video on of a date of an Energy and Commerce hea

fore it was publicly noticed. And this video—I have a cli

but it was inciting violence against Members. And I see

mous consent to enter this reporting into the record, if I m

Mr. WOMACK. Any objection? Without objection.

[The information follows:]


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rfrederick on LAP8M 3W LY3PRO D w ith H EARING
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Mrs. HINSON. But I see this as directly threatening, an

something that this platform enabled by the Chinese Co

Party has enabled. So believe the time to act frankly was y

here. And, additionally, the Treasury Department issued 

ment just today that CFIUS will not clear any transactio

it determines that there are no unresolved national secu

cerns.

So will you commit to us today that if CFIUS is aware 

any outstanding unresolved national security concerns

TikTok transaction will not be cleared?

Secretary YELLEN. So I regret that I cannot talk about 

vidual transaction, even to indicate whether or not CFIUS 

ing at it. There are strict confidentiality obligations. Bu

more general point, absolutely, CFIUS looks very carefully 

transactions, and will not clear a transaction if there are 

security concerns. And when it comes to data, we are seein

creasing number of cases that do present risks around th

of the type that have been mentioned in connection with 

Mrs. HINSON. Well, obviously, time is of the essence her

We talked about this post that lived online for over 40 day

taken years to get to a place where we would have a dec

why is it taking so long? We are at 3 years now.

Secretary YELLEN. There is ongoing litigation over Tik

is not yet resolved.

Mrs. HINSON. So if that litigation is playing out, and if y

legitimate concerns about national security, is there any 

you can use to put a stop to this? Is there any tool that y

in your toolbox?

Secretary YELLEN. I mean, yes, there are tools that ar

toolbox.

Mrs. HINSON. What would you use then? I mean, while 

gation is ongoing, what mechanisms could you turn to to h

tect the American people in this case against the Comm

Chinese Communist Party-enabled platform?

Secretary YELLEN. So I am sorry, I really can’t talk abou

tails of this case. But there can be——

Mrs. HINSON. Can you talk about it in generalities in 

the tools that you might use. Maybe let’s take TikTok’s 

of it. If it is, in general, a threatening entity, what woul

tools that you would use?

Secretary YELLEN. Requirements that the business of 

pany be structured in the United States in a way that pro

tional security.

Mrs. HINSON. Okay. While we are on the subject of natio

rity, I will move on, but what is the Department doing 

sure that its core services are protected from cyber attack

hygiene is obviously a very crucial part of protecting Amer

formation. What is the agency doing to make sure that 

hardened?

Secretary YELLEN. So we are greatly enhancing our cybe

investments. We have requested increases to be able to do 

pecially given the role that the Department plays in impos

tions. We are a target of a serious number of cyber atta


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we are investing very heavily in cybersecurity to meet v

standards.

Mrs. HINSON. All right. Thank you, Madam Secretary

back.

Mr. WOMACK. Mr. Cartwright.

Mr. CARTWRIGHT. Chairman Womack, Ranking Membe

thank you for holding this very important hearing. And, S

Yellen, thank you for coming, and Director Young, you as w

Director Young, my question is for you. It was January 

that Medicare part D came into play. And that is when i

to be used in this country. And it meant that the pharma

were provided to seniors on Medicare. But it came with a g

And the gimmick was that Medicare was not able to use 

chasing power. Medicare was not able to talk price. Medi

not able to negotiate with drug companies as it bought it

for the seniors who depended on it. You tell people that, W

a minute, why couldn’t Medicare negotiate with drug com

And the answer is it was part of American law. We made t

of American law here before 2006. And people have a hard 

lieving that that happened. But with the Inflation Reduc

Congress has begun to break that logjam. And, certainly

limited formulary. Formulary being the $50 word, which 

list of medications. It is a limited formulary to start w

Medicare has now been authorized to negotiate prices for 

these drugs. And we have seen the effects. We have seen t

of insulin prices calming, crashing down. And all of thos

who depended on insulin, you know that they appreciate th

My question for you, Director Young, is what next step

think are necessary? And what more can we do to low

prices for seniors in this country?

Ms. YOUNG. You have laid out what the Inflation Reduc

does. I don’t need to repeat that. But you are absolutely ri

law began to change the government’s ability to negoti

prices. I don’t need to tell all of you what this country 

drugs. It is vastly higher than other economies around th

You just have to ask yourself why that is. In this budge

further in the Inflation Reduction Act where more drugs 

brought into negotiation. The timeframe will be brought 

It not only reduces money for seniors; the government wo

$160 billion by doing more drugs in negotiation and bring

forward.

In addition, 40 more billion dollars would be saved for t

by instituting the inflation rebate. Meaning, drug compan

are raising your drug more than inflation, you have to 

American taxpayer back. And it is really using the pu

power of Medicare to do two things: Bring down costs fo

and taxpayers, and extend the life of Medicare. That is pa

proposal to help the insolvency issue for Medicare.

Mr. CARTWRIGHT. Thank you for that. Of course, we had 

of the Union address not too long ago, and the President c

have made it clearer his commitment to ensuring the bene

vided by Social Security and Medicare. There have been vo

everyone’s voice, but there have been voices that are ca

cuts to those programs, for those insurance programs.


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And my question for you is how can Congress work to r

efforts to cut Medicare and Social Security benefits tha

paid into their whole work lives and that people depend on 

seniority and in times of disability?

Ms. YOUNG. Look, I work for the President of the Unite

who has made clear that he will oppose any reductions to 

in both the Social Security and Medicare programs. He bel

I mention in my opening statements, these aren’t just p

they are promises to generations of America’s seniors, 

941⁄2-year-old grandmother, all of the money they have put 

system should be available to them, and their governme

ised that to them, and this President will keep that promis

Mr. CARTWRIGHT. Well, I thank you both for appearing th

noon. And I yield back, Mr. Chairman.

Mr. WOMACK. Mr. Carl.

Mr. CARL. Oh, thank you, Secretary Yellen and Directo

Thank you for being here and being able to speak in fron

committee. I would like to make a quick statement here, 

I have not heard one single member in the Republican P

anything about cutting Medicare and social benefits he

think that is a falsehood that is being brought up and spu

litical purposes.

With that said, Secretary, in regards to the bailout of th

Valley Bank and Signature Bank, I want to ask you a c

questions. I talked to local bankers. I try to stay in tune wi

And they tell me that the problem of this bank being upsi

for lack of better words, should have been caught by the b

view on the call report 12/31 was it? Was it flagged?

Secretary YELLEN. Well, I am not responsible for super

these banks. So that is a question that should be addresse

appropriate banking——

Mr. CARL. But how about the government overseeing 

committees, did anyone catch it, did anyone review it.

Secretary YELLEN. Well, this is not the job of Treasu

overseeing the regulatory agencies, either the Federal Re

the FDIC.

Mr. CARL. Okay. All right.

Secretary YELLEN. They have supervisory authority here

Mr. CARL. Okay. So I watched quite a few videos on 

night and read a lot. So very impressive, thank you. I watc

question from Senator Lankford from last week, I believ

And, again, it seems the administration is putting itself i

tion to depict the winners and the losers in our business 

nity, and that bothers me. I have been in business for m

close to 40 years, various businesses. And the biggest prob

ways had, especially in the healthcare field, was the gov

itself getting in the way. So I am always very sensitive to t

I developed my opinion about this from a statement 

made, and it said that the board would have to have a supe

ity vote to cover 100 percent of the investors in other bank

future, like you are doing in the Silicon Valley Bank.

Secretary YELLEN. Well, let me be clear in what I said.

Mr. CARL. Okay.


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Secretary YELLEN. In the case of the two banks that w

into resolution, Silicon Valley Bank and Signature Bank

voked a so-called systemic risk exception. And we did that 

we determined—and when I say ‘‘we,’’ I mean super maj

the FDIC—actually the vote was unanimous—the FDIC B

Federal Reserve Board, and myself after consulting with t

dent, we felt that the failure to protect uninsured deposito

create contagion, and that there was a risk of runs on man

that would not only undermine the security of the deposi

also compromise the ability of the American banking sy

meet the credit needs of our country, of households, a

nesses. So we took this step. The Federal Reserve also too

to create a facility that would improve access to liquidity f

that are faced with deposit runs. I believe our tools work

what I have said is that these are tools we could use aga

institution of any size if we judge that its failure would p

tagion that——

Mr. CARL. With all due respect, I am running out of ti

I have got six more questions here I know I won’t get to, so 

gize for this. But, you know, my question is simple with t

time I have got left. I am glad to see that you brought the 

nity banks to the small banks into the conversation, beca

were really feeling like they were being fed to the wolves, 

of better terms, and the big banks were taking over the c

tion. So the small bank—and I appreciate you doing that. A

was something I pulled from that conversation last night.

But let me ask you a question. If a small rural commun

in Alabama that invests into the rich coal mine communi

or our oil drilling in the Gulf of Mexico investments or do

here to the policies of the ESG, the political left-wing poli

are pushed on, do you think they would get 100 percent 

too?

Secretary YELLEN. Really, this has nothing to do with 

ticular business of the bank in question. It really is a j

about whether or not the failure of the bank and the lo

posed on uninsured depositors threaten contagion that coul

mine the broader banking system.

Mr. CARL. And I am out of time. Thank you, ma’am. I 

with you. I think a lot of the voters disagree with you 

thank you for your time, and I yield back.

Mr. WOMACK. Mr. Ciscomani.

Mr. CISCOMANI. Thank you. Thank you, Mr. Chair. A

retary Yellen, thank you for being here. And Director You

to meet you, both. I appreciate your time. And thank you 

ing before the committee to testify today. The state of our 

is one of the most important challenges that we are facing

Congress and everywhere it goes, especially in District S

know well. I am worried about the rampant inflation, un

government spending, and our national debt as well. An

have seen in the past few weeks, information is spreading 

quicker pace than ever before. A much quicker pace than 

fore. And stability is needed in that.

Now, Secretary Yellen, I would like to follow up on som

questions here by my colleagues regarding the recent bank 


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So I have just a series of short questions. And maybe you 

help me answer as many of them as we can get to in th

period of time. Have you determined whether a special ass

will be needed to replenish the FDIC’s deposit insurance fu

Secretary YELLEN. If there are losses, then a special ass

would be needed. It is not clear yet, I believe the FDIC, a

liminary matter, assessed that there would be a $2.5 billio

the case of Signature, but that is not—that is not a fin

mination.

Mr. CISCOMANI. And also to follow up in the question reg

thank you for that—on the regional banks and communit

for example, in Arizona, will Arizona community banks b

hook for this special assessment?

Secretary YELLEN. It would be determined by the FD

mulas and decisions.

Mr. CISCOMANI. I am sorry, is that a yes or a no?

Secretary YELLEN. I think it is a yes.

Mr. CISCOMANI. It is a yes. Okay. And you stated the 

Exchange—that the Treasury’s Exchange Civilization Fu

serve as a backstop. How much money is there currentl

fund?

Secretary YELLEN. Including SDR, I believe there is ab

billion in the fund.

Mr. CISCOMANI. And the funding as depleted in that fun

taxpayers be on the hook to replenish it?

Secretary YELLEN. No.

Mr. CISCOMANI. And do you believe that the Fed’s de

raise interest rates will result in additional bank runs?

Secretary YELLEN. I am not going to discuss the Fed’s 

on interest rates.

Mr. CISCOMANI. How do you think that would impact thi

and the conversation, the raising of the interest rates?

Secretary YELLEN. The Fed is addressing a significant 

problem. Making decisions that in its independent judgm

best. Also, I know taking account of financial stability c

And I am not going to comment on their decisions.

Mr. CISCOMANI. Thank you, Madam Secretary. Mr. Cha

yield back.

Mr. WOMACK. I think Mr. Cloud is on his way back, and 

get to Mr. Cloud when he returns. So we are going to m

round two of our Q&A with the witnesses. And I will lead.

I am going to, Director Young, put my budget hat back o

help but do that. And I want to talk about improper p

And, frankly, it is a subject that causes me to scratch my 

is reported by the GAO that federal agencies disburse an e

$281 billion in improper payments in fiscal year 2021 wit

lative improper payments totaling $2.2 trillion over the 

years. Let’s repeat that. $2.2 trillion in improper paymen

what has always kind of been a mystery to me is if we k

have paid it, and we know it is improper, how do we con

live with that reality?

So, Director Young, help me understand how OMB is fo

reducing improper payments? And I have just given you so

bers, so if I am off base, if I am out of bounds on the su


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me know. But I remember when we were doing, as budg

when we were doing the fiscal year 2019 budget, obviousl

ing improper payments was a critical component of us g

achievable balance. So help me understand this improper 

phenomenon.

Ms. YOUNG. Look, I think this is the place we can fi

monality in wanting to find solutions. You know, not to—

Secretary here not to speak in her stead here, but one th

I have talked to Senator Kennedy from Louisiana about t

is interested in making sure that Treasury has access to th

Security death data to make sure that we are paying livin

beings. That seems common sense to us, and we have tak

to make sure that that happens. Unemployment insurance 

lieve, especially during the pandemic, the poster child fo

this conversation. The budget has a proposal that would 

more tools to go after—look we saw criminal syndicates ta

vantage of programs that American citizens needed during 

demic. We should lock arms, in my opinion, and come toge

make sure they cannot take advantage. Part of the proble

employment insurance is it is 50 different systems. Ea

runs their own system which means it is hard to stabili

systems from a Federal level because each State are in 

places. We have got to do something about that. And I hop

work together on going after fraud, especially in the unemp

system. And we have proposals to do this. And I am happy 

with anyone to go after this, because these programs ne

there for hardworking Americans who need the stopgap 

jobs and should not be taken advantage by fraudsters, and, 

big criminal organizations who have just gotten very good 

ing the system.

Mr. WOMACK. Do we not have the proper controls in plac

vent it?

Ms. YOUNG. Not currently. And part of the problem, as 

this very bifurcated State-led system. It is a federal-fun

gram run by the States. And we have got to do a better jo

getting in the weeds with each State, meeting them wh

are, but it has got to improve.

Mr. WOMACK. Yeah, well, people have testified in this 

today, including my friend, Steny, have indicated—and I ag

we all want people to pay their fair share. And nobody s

asked to pay really more than their fair share. But I t

American public would be just as concerned, if not more co

with the alarming rate of improper payments coming ou

Federal Treasury and going to people who should not be c

that money. Would you not agree with that?

Ms. YOUNG. Yeah, and this is exactly——

Mr. WOMACK. I mean, it is outrageous.

Ms. YOUNG. That is exactly why we ever posed the—

shows that an investment in doing away with the fraud 

talked about has a return on investment of 10-to-on

wouldn’t we do that? And I think that is a place for com

as we work through these—what is going to be a very 

budget and appropriations season. So I look forward to 

with you on that.


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Mr. WOMACK. Last question is regarding the Federal w

and maybe we can just take this for the record and get ba

on it. But the increase in Federal workforce by 82,000 pe

percent, a lot of these people are working from home. I wil

a question for the record on this, because I am curious as t

how we are justifying the work-from-home piece and not 

our footprint, if you will, from a facilities point of view. Bu

submit that for the record later. And I will yield my six 

to the distinguished ranking member, Mr. Hoyer.

Mr. HOYER. Thank you for your generosity. Let me ask 

tion to follow up on the chairman’s question. A, we all agr

on the Federal Government that undermines the ability of 

eral Government to help people who are in need, legi

ought to be ferreted out and prosecuted, period.

Madam Secretary, I want to ask you a question, and 

talked to the chair about it, and it bugs us both. I hear a

ments all the time on TV about people who, for whatever 

didn’t pay their taxes. And this company is going to make s

they cut their taxes in half or a third or a quarter. Now

listening to that ad, and I haven’t paid my taxes, or am 

pay them, and I don’t have the—whatever, that encourage

to pay them and get a better deal. It is not really a quest

you ought to look at that. I am going to ask the IRS Comm

the same question because it is—as if you really don’t hav

your taxes, and we will get you a deal. Whether you are 

$4 or $4 billion, we will make you a deal. And I think tha

mines the voluntary compliance, which the U.S. has been v

on. Let me go back—and you don’t need to answer that 

but it is a concern.

Madam Director, you mentioned a figure in terms of ge

of fraud and what the return is on enforcement. What is th

on money in enforcement on IRS?

Ms. YOUNG. I think the Secretary has spoken to this. W

Inflation Reduction Act did, if that is rescinded, the CBO h

clear that that will add to the deficit to the tune of about 

lion, because they will estimate as much as all budget scor

will, that that will bring in less to close this tax gap. So 

lose money for the Treasury.

Mr. HOYER. The figure I recall from my previous life w

seven-, eight-, nine-to-one return on the investment in enfo

You get $7 or $8 or $9 in return. If that is the case, then 

that has that $100 billion consequence that you just referre

Let me close with this: We won’t have a third round, 

is not a question. But we talked about debt. And I am v

cerned about debt. And I would like to think that we are 

responsible. We need to be fiscally responsible. In the l

gress, we spent a lot of money as a result of the pandemic

me, the Congress before that, the 116th with the signature 

ald Trump, and the agreement of the Secretary of Treasur

Because we had an extraordinary challenge if it was not 

would have cost much more than the money we actual

Notwithstanding the fact it was a large number. And so

we need to work together as we worked together on the d

in the Trump administration, as we worked together on 


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the pandemic in the Trump administration, we need to 

gether to get our country on sound, fiscal footing, while at t

time, investing in making sure that our economy grows as 

which will also reduce the deficit.

Now, lastly, this is not a question. None of these are q

I am pontificating. As it will come as a great shock to e

in this committee, I have a passing interest in where th

going to be located in the future.

Mr. WOMACK. No.

Mr. HOYER. I knew that would shock the chairman.

A consolidated FBI headquarters remains among my t

ities. I remain concerned about the low waiting of the cos

as only 10 percent. If we are concerned about deficit, we 

to be concerned about costs for what we buy. Ten percent b

cribed—this is not a question—is, in my opinion, not ju

The chairman can speak for himself, but we have had c

tions about that.

In 2016, the House resolution authorizing this project, 

made it clear that GSA should consider the total cost of the 

ment relocation site preparation and site acquisition. Cong

made clear that whatever pocket of money comes out of i

be counted as part of the cost of this site, whatever pocket 

out of. I just made that observation. I don’t want a respons

point in time, but I will continue to express my concern 

case. And, Mr. Chairman, you and I have discussed that

will continue to discuss it.

Ms. YOUNG. Mr. Chairman, if I could thank the ranking 

for his passion on this. I appreciate it, and I will take it ba

Mr. WOMACK. I look forward to the conversation. Welcom

Mr. Cloud. Your turn.

Mr. CLOUD. Thank you, Chairman. And thank you, Secre

Director, for being here today. I wanted to ask the Secreta

questions. First of all—and I know you will probably give 

hour lecture on this and still have more to say about it, b

can give us the 30- to 60-second version on how important 

the U.S. remain the world reserve currency?

Secretary YELLEN. Well, I believe we derive significan

from the dollars serving as the reserve currency. It is an im

way in which we lower the costs, the borrowing costs that 

eral Government pays on its outstanding debt. And I w

that in imposing sanctions and trying to address global p

like Russia’s invasion of Ukraine, the fact that the U.S. 

used so widely in transactions, is—facilitates our ability t

those sanctions.

Mr. CLOUD. Now, this week, Russia and China got toget

Russia has said they are going to start using the yuan 

trade deals. Does this concern you? They also said that th

help accelerate the process of establishing a multipolar wor

which, of course, would mean weakened U.S. on the net

global stage.

Secretary YELLEN. Well, I certainly want to see the dolla

as the world’s reserve currency. And there is a motivat

Russia and China have to try to develop another syst

avoids the use of the dollar. But this is something that is 


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dously difficult to accomplish. And I have confidence that t

will remain the world’s reserve currency for a long time to 

spite of there being various efforts to create systems to ge

it.

Mr. CLOUD. Now, in 2008, the U.S. National Intelligence 

said in a report they produced that there is an unpreceden

in relative wealth and economic power from the West to 

now underway, and they expected it to continue; that our 

strength will decline. And they said it was because of th

said the transfer of global wealth and economic power is 

derway. It is unprecedented in modern history. And the

comes from two sources: We are sending oil and gas revenu

seas, and we are sending manufacturing overseas. Yet, a 

of the policies that this administration continues to embr

port ESG, which we have seen. You know, China is not 

that. Russia is not following that. They continue with 

plants. China and Russia are talking about building anoth

line. And yet, we seem to just be hamstringing Western c

on the front when we were producing energy, oil, and ga

leum products more responsibly to be cleaner than anyone 

One of the things I am concerned about is this. We talk

to a number of banks. I realize most of this is the SEC 

this. But from your standpoint, we had European countri

to impose these regulations on U.S. banks that work in th

ket. And, therefore, the U.S. businesses that do companies 

from a diplomatic perspective, it would seem that rega

where you are on the ESG front or again from a diplom

spective, you would be standing up for U.S. banks and U

nesses against what other—any other country’s regulators 

trying to enforce on that. Do you have diplomatic efforts un

or what could be done to combat that?

Secretary YELLEN. Well, we do have frictions with vario

tries, including the European Union when we have differ

our regulations. When it comes to things like disclosure of 

related risks, ideally, we would have a common system g

think that would level the playing field and reduce the bu

businesses of what they are forced to disclose. But coun

making significant efforts to address climate change now, 

regard as a good thing. And tensions arise when we go abo

that in different ways. But we do have conversations——

Mr. CLOUD. I am sorry. I only have 20 seconds left. I w

ask you one more question. You mentioned leveling the 

field. I would think we want the U.S. to be more competit

other countries. Biden has stated policy—he has said him

he is trying to create a multipolar world. It is an obje

shares with Putin and Xi. Do you also share the go

multipolar world?

Secretary YELLEN. I am not sure exactly what it is you 

ing at here, but——

Mr. CLOUD. Well, monetary policy affects global dynam

if the President’s agenda is to help create a multipolar wo

wondering how our financial policies would affect that 

tainly the diplomatic efforts that you were incorporating w

countries?


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Secretary YELLEN. Well, I am not going to comm

multipolar world. Cause I am not sure exactly what you ar

at there. But certainly, we work with other countries in 

make sure that American businesses are treated fairly 

national commerce.

Mr. CLOUD. Okay. Thank you. I yield back.

Mr. WOMACK. Mr. Pocan.

Mr. POCAN. I am going to yield 20 seconds to the ranki

ber.

Mr. WOMACK. Just 20 seconds?

Mr. POCAN. Twenty-two.

Mr. HOYER. Let me make a comment. The entire effo

117th Congress to make sure that the American economy 

American democracy was transcended democracy and eco

the world. That was our whole objective, and I think if we 

it, it will be achieved. Thank you.

Mr. POCAN. Okay. Thank you. Thank you, Mr. Chairm

Secretary Yellen, I understand you are not going to speak 

Fed, but I am going to ask the question in another way, 

as an economist, could it be that there is an economic—

nomic conditions right now are substantially different tha

past, given we just came out of 100-year pandemic, where 

tion was largely disrupted for about 30 full years, before 

getting to, where demand is incredibly resilient. And after 

terest rate hikes, demand has not moved a whole lot, th

economist, could that sort of set of conditions, once-in-a-y

demic be different enough that we should be looking, per

some other measures to reduce demand?

Secretary YELLEN. Look, I am just going to say, of cou

pandemic was a very unique event. And in terms of its 

impact, we have really never seen anything like it before. 

enormous shifts from services, goods and services, away fr

ices toward goods, and then back again away from goods 

services.

We saw enormous supply-chain issues developed that con

to inflation. Because of this shift toward goods, those are 

now, lowering inflation, but we have a shift back in the 

of services. Services are having a hard time reemploying 

force in tight labor markets. This is extremely unique. A

sumer spending has proven to be robust. But GDP gro

slowed. We had a very rapid recovery. It has slowed. And 

back at full employment again. And I think there is a cha

that what the Fed is doing will serve to bring down inflati

maintaining a strong labor market.

Mr. POCAN. I appreciate it. Thank you. I just think so

you know, I know that is their only tool they have. So

when your only tool is a hammer, everything looks like a n

I kind of feel like at this point we need some other app

whether it be a windfall profits tax, because corporate pr

still soaring. Some kind of limited price control. But so

else. But thank you very much for that answer.

Director Young, so here is the question. Before it was 

that no one has ever, ever in the life of Republicans talk

cutting Medicare or Social Security, even though my Sena


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Johnson, has recommended we put it on the chopping blo

single year. At least that is one Republican. I have heard 

Republicans this year said that we should raise the retirem

perhaps to 70.

Now, to me, I think I would call that a cut. If it is not 

cut, it is at least a bait-and-switch. But could you talk jus

bit about if we actually raised the retirement age to 70 h

would impact people who have paid into it, and whether 

is fair to call that a cut or whatever we would exactly c

Ms. YOUNG. Look, and I will be very simple. That is a cu

efits in our estimation. I know there is some disagreem

that, but that is fewer years, receiving benefits from Social 

after people, what, for 20 years of their career, paid into 

and expected to start collecting Social Security at a cert

and then the goal post is moved, that is a benefit cut.

Mr. POCAN. Yeah. Thank you. There is a lot of people w

in the trades, in particular, in my district who I know q

who, you know, at some point, even if we are living young

body isn’t necessarily allowing you still to lay brick or be 

worker. And just to raise that age would be certainly a b

switch to those folks and have a negative effect. And I w

that a cut. So that is the only reason I wanted to put tha

clarification. I yield back, Mr. Chairman.

Mr. WOMACK. Mr. Moolenaar.

Mr. MOOLENAAR. Thank you, Mr. Chairman. Secretary 

first of all, thank you for being willing to brief me at my 

the CFIUS review process and where things are. I apprec

very much.

Director Young, I wanted to ask you a couple of questi

Government Accountability Office reported that as of Jan

2023, there was $90 billion in the American Rescue Plan 

remaining that is unobligated. That is a huge sum of mo

fortunately, we haven’t received timely updates about avail

ances from this recent legislation. Can you confirm that 

Ms. YOUNG. Sir, I am sorry to hear you have not. We h

up to Congress—I will make sure this committee has the b

I have it here. We will put it in the record and make sure 

fice has it. I will say for COVID funding, writ large, the 

total, 98 percent is obligated. Of ARP, specifically, 95 perce

ligated.

[The information follows:]


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Mr. MOOLENAAR. But is $90 billion the amount——

Ms. YOUNG. I will make sure that is the amount, but i

in the range. I want to be exact with you and provide that 

tion.

Mr. MOOLENAAR. No, I appreciate that. But the fact—w

agree that we are no longer in an emergency.

Ms. YOUNG. If I can, I will let you know where the ma

those funds are. And you are right, the public health eme

the administration, the President is lifting that order May 

Mr. MOOLENAAR. So we no longer have a need for a resc

would you agree with that? I mean, the emergency is over

that is what those funds were intended for, right?

Ms. YOUNG. Mr. Moolenaar, I just want to make sure y

where the majority of funds remain unobligated. And, of c

is Congress’ discretion, if they want to go pull those fun

The majority of those funds remain in pensions, which

know, it has a long outlay, and it remains in veterans’ 

And there is some money in HHS that after not receivi

money, we plan on using for next-generation vaccines.

Mr. MOOLENAAR. So what you are saying is you have alr

ured out how you want to spend it next time, rather tha

we have an opportunity to pay down the debt? I mean, $9

would go a long ways to paying down some debt?

Ms. YOUNG. No, I said it is Congress’ decision. I am

know, very attuned to the Appropriations Committee’s 

tional role here. But I am saying that as you make those d

no, that most of the money remains from pensions.

Mr. MOOLENAAR. But unobligated based on an emergenc

no longer there, right?

Ms. YOUNG. Well, pension funding in ARP was always 

to spend out over a longer period of time. So you would b

funding back that a lot of pensioners would depend on. 

care——

Mr. MOOLENAAR. Well, let me ask you this.

Ms. YOUNG. Sure.

Mr. MOOLENAAR. Through the appropriations process—

the expert—couldn’t we fund those pensions as part of th

priations process like we normally do, rather than using em

funding that is no longer for an emergency?

Ms. YOUNG. I will say, typically, multiemployer pension

done by this committee, but I am sure you all will weigh 

we will provide the data, and we will have a robust back-a

to see what makes sense here. I am just simply pointing 

the majority of the money that remains was always int

have a tail. And the question on resources for HHS is do 

next-generation vaccines for COVID.

Mr. MOOLENAAR. Well—and I approve of the idea 

through the appropriations process. I am in the Labor

committee, and we can certainly look at that.

But why would we tell the American people we need to 

trillion of emergency funding in this last Congress, and t

out we are no longer in an emergency and we still are 

spend that money? That, to me, seems like fraud itself.


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Ms. YOUNG. Well, Mr. Moolenaar, I will be just very can

asked Congress multiple times for additional funding for n

eration vaccines and therapeutics. A lot of, as you 

immunocompromised people, current therapeutics do not w

were told no by Congress.

So what we are doing now is looking at the unobligated 

at HHS and going to focus on those things. Now, what w

pen are things like long-term research in long COVID, w

don’t know a lot about. So we will have to relook at our p

here.

Mr. MOOLENAAR. Well, I trust you are very capable in t

ess, and that when you come and talk to our Appropriatio

mittee, you are someone who has tremendous credibility.

Ms. YOUNG. They told me no.

Mr. MOOLENAAR. Well, you know, I think it is a matter 

figure out what the top priority is. There is a lot that w

that wouldn’t be maybe as top a priority, and you might 

agree to cut back on some of that. But I just think taking 

ple’s money that was based on an emergency when the

longer an emergency and spending $90 billion seems irres

to me.

Thank you. I yield back.

Mr. WOMACK. Mr. Cartwright.

Mr. CARTWRIGHT. Thank you, Mr. Chairman.

Well, Director Young, it was—we are coming up on the 

niversary of the Rural Electrification Act. 1936, it was. 

time in our country when we had electricity. We had elec

most places. But we didn’t have electricity in some place

back roads, in the hollows. In the places off the beaten 

did not have electricity, and these places were being left be

We are kind of coming up on a similar thing right now. 

broadband internet access in most places in this country ri

but there are places being left behind. And in the IIJA, 

lated $45 billion to make sure this doesn’t happen, that w

the pattern of the Rural Electrification Act, and that rur

get broadband internet.

And, of course, the President requested an additional $

lion for the ReConnect Program—you are familiar with—w

vides grants and loans to deploy broadband to unserved a

pecially Tribal areas.

What do you see as the most important things to be 

plished so that we can accelerate access to broadband int

rural places?

Ms. YOUNG. Well, the Bipartisan Infrastructure Law wa

changer, so thank you for that. We believe the—in shorth

ACP program at FCC will bring broadband to 15 million h

this country.

You are looking at a caution light girl. I grew up in a to

less than 2,000 with a caution light. So I am very aware 

communities who often don’t have adequate attention fr

Federal Government or State government. This is meant t

that.

And you have my commitment. We have just started t

ment this. If more needs to be done, we will be right here 


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the case, working with Congress, because, you know, this 

luxury. We saw children sitting in the parking lot of Mc

during the pandemic. That should not happen in this co

is a necessity for kids, teachers, parents, to have high-fun

internet. And it is no longer—it is like 20 years ago sayin

a cell phone was a luxury. Now, most people consider it so

they can’t do without in life. I would suggest that intern

same way.

Mr. CARTWRIGHT. Thank you for that.

And now, there was a comment or question made in t

that seemed to imply that this administration is not doin

thing that it could do to outcompete China, to counter Ch

my question to you is, is that a correct narrative?

Ms. YOUNG. Well, look, I am going to be very clear. Th

dent says it over and over again. His Made in America age

manufacturing boom, bringing 800,000 jobs back, that is 

about making sure that the United States of America rem

world leader, not China.

And this budget has several proposals I hope we can w

on a bipartisan basis. I know Mrs. Hinson has an interes

and Mr. Moolenaar is on the China subcommittee. We hav

posal that would put vast resources, $6 billion, into effort

frastructure across the globe.

Look, China goes into these places, like the continent o

throws a little here, a little there, has vast access to 

sources. Where are we? And we have to make sure that th

States remains the beacon I know we are and that we ha

ence in those places and make sure we are investing res

through our Development Finance Corporation, through ou

nium Challenge Corporation. Because if we aren’t there, C

be there. So I certainly hope we can work together to im

these proposals.

Mr. CARTWRIGHT. Thank you, Madam Director.

And I yield back, Mr. Chair.

Mr. WOMACK. Mrs. Hinson.

Mrs. HINSON. All right. Thank you, Mr. Chair.

Some sobering statistics, numbers. $31.6 trillion in debt

about $94,000 per citizen. $246,000 per taxpayer. So I wan

a little bit about what that cost looks like for Iowans.

And so, Director Young, can you speak a little bit toda

rising interest costs, how that fits into these numbers a

seeing the debt balloon? What are some of the tangible im

working families as a result of those rising interest costs?

Ms. YOUNG. Thank you for that. And we like to use—

held debt is about $24 trillion. I believe you are using b

points together. But either way, this is why this President 

ward proposals that bring down the deficit, because we do 

lieve that our investment should be paid for.

And if we don’t go about investing tax cuts in a fiscally 

sible way and pay for them, our deficit and debt problem 

worse, Congresswoman. And I know there is disagreemen

you do that, but this President has put forward a tax ref

would save $3 trillion and nearly $3 trillion over 10 years.


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Mrs. HINSON. I see this as a complete tax shift. But if 

about rising costs and the impact that has, I think on

quickest ways we could address that is energy, and I think 

different perspectives as well on lowering energy costs. Bu

been advocating for that, and I would encourage you to con

look at Iowa’s biofuels as an answer, and please take that 

back to the President. We need an answer on E15, if you ca

I would also like to ask and follow up on the CCP challen

we are facing, since you referenced that again. And it is v

that this committee has a very unified interest in that. S

do have kind of an all-of-government look through OMB

have any recommendations on how we can better leve

spending? You referenced that $6 billion number, but way

we can truly counter the CCP’s aggression through governm

Ms. YOUNG. So I mentioned two agencies in particula

money can be used. The budget authority, the funding amo

also, they have the ability to finance projects. So their mo

a little further.

So I would love to have you talk to us about the Deve

Finance Corporation. They have some innovative ways of f

projects across the globe. Again, I mentioned the Millenniu

lenge Corporation. They go and sign compacts and really 

verage private dollars. So it is not just what we are invest

What programs do we have that are leverage points that w

tract private sector interest? And those two in particular a

interesting in that way.

Mrs. HINSON. Are there any agencies engaged in related 

counter the CCP that you think could be doing a better jo

laborating and finding that—either that outreach within 

vate sector or better outreach within government?

Ms. YOUNG. So those are two agencies, certainly. They 

you they are resource constrained, which is one reason w

here. And we have to—in order to attract private inter

need to know the Federal Government is serious and is 

show up with resources. So that is what we are trying to 

those programs be much more aggressive. And to do that, 

I look at this as capital, especially for DFC, to make sure t

finance tools can be put to use.

You and I also talked about COFA, Compact for Free 

tions. Those tiny little places like Palau in the South Pa

need a presence there. We often talk about COFA in the 

ment of Interior. We put it under the Department of State 

we think it is a strong diplomatic tool to counter China a

sure we have a presence where we know they want to be.

Mrs. HINSON. Finally, I just want to talk a little bit a

regulatory burden and cost on farmers, small businesses, a

lies. What plans do you have in place to more appropri

count for the cost of regulations on people before they are 

implemented?

Ms. YOUNG. Yeah. So you know a part of OMB is the 

Regulatory Affairs. And it is part of our duty, our executi

that governs us. 12866 says we have to look at cost-benefit 

for regulations. We are committed to continue that. We 

going to change that. What we are doing is looking to m


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Far too many rules come into OR that the amount of 

cally significant has not changed in, I believe, about 30 ye

we need to raise that so that fewer things come in for re

we are modernizing. But what we are is committed to mak

we keep a robust cost-benefit analysis in the regulatory sys

Mrs. HINSON. Director Young, this is one of the num

issues I hear about from my constituents, is the cost of th

tion on doing business, and we can truly unleash this ec

we take that into consideration and reduce that burden 

businesses and our taxpayers.

Thank you. I yield back.

Mr. WOMACK. Mr. Cloud.

Mr. CLOUD. Thank you, Chair.

I wasn’t going to bring this up, but since it was men

wanted to go back to it. It is then Vice President Bide

words. He said, ‘‘We are trying to build a multipolar world

aren’t my words. That is not my interpretation. That is 

quote.

So is it your understanding that now he has joined the 

First movement or does this maintain that continues to be 

cies, and do you endorse that?

Ms. YOUNG. If that is directed at me, I am with Secretar

I tend not to answer things I don’t fully understa

multipolar world—I will leave it at that.

What I do know, and what I have heard this Presiden

that we have to regain footing in several ways. We ha

course, maintain a strong defense. We have to do things in 

matic front, like the programs I talked about. But we als

are we spending in research?

China is growing their footprint in manufacturing of th

are far behind in. That is part of what the Inflation Redu

will change. We will build more of that clean energy here a

jobs back here.

So this President has been crystal clear that he believe

ica’s role is to be first in those places including in research.

Mr. CLOUD. America was already leading in producing c

ergy. We were the best at producing oil and gas. We are 

in what you would call green energy. We are leading the 

that. And so the Inflation Reduction Act was not nece

reaching that goal. We were already leading the world in th

You said, let’s not hold the debt ceiling hostage to real

nian cuts that all help the wealthiest in this country.

And then, Secretary Yellen, you said, I don’t think 

should—you said—in speaking of prioritization in relatio

debt ceiling, you said that prioritization is simply not payin

government’s bills when they come due. That is something 

never done. It is really just default by another name.

And I was kind of puzzled by that because, you know, o

Congress is to prioritize what the spending should be. Th

dent submits a budget, and then we weigh it, and then 

it in. And I am a little puzzled to see some of the thing

spending money on. We are spending money on watching h

fight on steroids, turning mice into binge drinking alcoh

shows in Ecuador. The Biden administration is filtering ta


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to Colombian LGBT groups that back prostitution. We hav

empty Federal buildings. One of the big things going on at 

der is no-bid contracting. That is under investigation now.

So there is a lot of areas, it seems, that we could 

wouldn’t be considered a default. Would you agree?

Secretary YELLEN. No, I wouldn’t agree, because it is 

up to Congress and this committee to decide about the bu

2024 and years after that, what future commitments 

chooses to make about spending levels. But the debt c

about paying bills for programs Congress already approved

Mr. CLOUD. No. But there are some. There are some, f

ple, the COVID funding that was mentioned, it was $90 

think, of funding——

Secretary YELLEN. Well, the bills that come to Treasur

cover expenses that Congress has authorized. And they hav

to the point of services have been provided, whether it i

Federal Government’s own workforce or contractors who h

to pay for workers that they have hired to provide gov

services. And it is about paying those bills when they co

And if you don’t pay bills that come due for services that y

ordered and authorized, that is default.

Mr. CLOUD. I think I get what you are saying, and I am 

running out of time here. If I can move on.

As someone new on this committee, one of the things tha

been doing is I have been trying to go through numbers, 

my team and everything. That has been difficult. The thi

I mentioned, one of the reasons I mentioned them is beca

of them are not line items in a budget. They have to do 

grants and contracting, which is kind of opaque to us eve

is very difficult to find—we send a top line in a budget. Yo

we will appropriate dollars toward a budget. But then t

is—it is really opaque to what is going on. And that is wh

of the policy initiatives are, and really a lot of the nefariou

is going on.

And I would wonder if you would work with us and h

up with some transparency mechanism to where—not jus

the American people can see not only what we are attem

spend money on, but what the actual grants are going to, h

are being approved, where they are going.

Because, as you know, one of the things I mentioned w

ing mice to binge drink. That is an NIH thing. You kno

they were doing gain-of-function and everything else tha

looking into, if we could have had transparency on whe

grants are going, it would have helped.

Is that something that we could work with you on? K

technicality of how to——

Ms. YOUNG. This subcommittee in particular certainl

how to mandate transparency. OMB currently puts every s

tion that authorizes agencies to go out and execute on the

priation. So you have heard a lot about apportion, as I 

in the last administration. This committee in particular 

OMB to put every single last apportionment, which is tran

we have never seen the level of. So this committee has 

led in transparency.


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I will also point to USA spending, which has obligati

There is a lag. So people complained you don’t see it real t

the goal was—and in past Congresses and administrations

sense to put those obligations online, and usaspending.

that.

And I will point out, just at NIH, you know, peer-review 

do pick those research grants. So I am not sure about the 

have mentioned, but I am happy to go back and look at th

you know, we just have to be very careful that we don’t 

thing to insert politics into a peer-review process as we s

search grants.

Mr. CLOUD. I can appreciate that. But peer review is w

us a lot of faulty information during COVID too. So we 

need to look at that as well. But thank you.

I yield back.

Mr. WOMACK. Mr. Ciscomani, bring us home.

Ms. YOUNG. What a tall order.

Mr. CISCOMANI. Yeah. Put the freshman to that task. 

great.

Well, let me just actually close with a bit of a different to

let me touch on Iran real quick. Sanctions in Iran are a ke

nent of the U.S. strategy to increase the pressure on the 

regime to abandon its ambitions for nuclear weapons and 

port for terrorism and cease other illicit activities.

Now, with nuclear negotiations not currently on the age

Iran’s nuclear program continuing to expand, increasing 

nomic pressure on Iran is essential. Given nuclear neg

seem to be at a standstill, is it fair to say that the admin

views maximum enforcement of sanctions as a key comp

our Iran strategy?

Secretary YELLEN. The Treasury Department has lev

tremely tough—the toughest possible sanctions on Iran an

forcing those sanctions and constantly trying to identify 

which they may be violated and taking further enforcem

tions. So Iran is subject to exceptionally tough sanctions

look to strengthen them and continue to take actions to do 

Mr. CISCOMANI. Now, on that, with all due respect on 

you really think that Iran does feel the type of economic 

that would be necessary to force the regime to change th

cies? I don’t get that sense, to be very honest with you, t

feel that pressure at the level that it would actually chan

behavior significantly.

So what do you think—or some examples that that is ha

in your opinion? And if we could be doing better, what a

that we could increase the enforcement of our sanctions?

Secretary YELLEN. So my sense is that our sanctions 

have created a real economic crisis in the country. And 

greatly suffering economically because of the sanctions. I w

the same thing is true of North Korea. On the other han

ask, has that forced change in behavior, the answer is m

than we would ideally like.

Mr. CISCOMANI. Okay. So let’s close with that. What do y

would be the way to increase that—the enforcement on th

more forceful to get the result that we would want?


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Secretary YELLEN. You know, we are constantly looking 

to broaden the sanctions to enable them to better accomp

objectives. But sometimes a regime is so committed to a 

that even when the population of that country is suffe

mensely because of sanctions we have imposed, they con

prioritize activities that are ones that we are trying to s

so my sense is that we need a broader toolkit and do have 

er toolkit to use. You know, sanctions can play a role in 

behavior, but they may not be sufficient in——

Mr. CISCOMANI. I agree with you on that. And I think it 

blesome that that is a reality that we are seeing here. So 

courage Treasury to continue to look for the broader oppor

as you mentioned, and be forceful on those approaches. Th

Mr. WOMACK. Steny, closing word?

Mr. HOYER. I think all of us believe that we want to see 

grow, be successful, and be preeminent. The bipolar worl

multipolar world is a reality. We used to have the Soviets 

selves, and that was a bipolar world. It is now obvious tha

ber of nations have increased their economic opportunity—

particularly China.

So the issue is, in my opinion, Mr. Chairman, whethe

going to continue to invest in America, in basic research, i

facturing. I have had a make-it-in-America agenda for 1

This is all about making it in America. Not only in terms 

ing it physically, but making it in success terms.

So I am hopeful, Mr. Chairman, that we can work tog

I said at the beginning, to achieve the objective that I thin

share, and that America continues to be the greatest and 

tion on Earth and plays a significant role in keeping a wor

at peace, at least at bay.

Mr. WOMACK. Yeah. Well stated. And I think that would 

versal agreement around the table.

To our witnesses, we promised we would get you out o

2.5 hours and in one piece, and we met the objective. So th

Madam Secretary, Director Young. Thank you for your t

here this morning. Well received.

To my colleagues, thank you. If you have questions 

record, you have 7 days to get those to the relevant subco

staff so that we can get those to the relevant agencies.

And if there are no further comments, then this subco

hearing is adjourned. Thank you.


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WEDNESDAY, MARCH 29

U.S. SECURITIES AND EXCHANGE COMMISSIO

WITNESS

HON. GARY GENSLER, CHAIR, U.S. SECURITIES AND EXCHAN

MISSION

Mr. WOMACK. The Subcommittee on Financial Services a

eral Government will come to order.

Good afternoon, everyone.

And, Chair Gensler, welcome back to the subcommittee

leagues and I are looking forward to today’s conversation w

The Nation’s economy remains in a precarious posit

banking sector is in a state of unrest. Prices continue to be 

due to excessive spending, and the country’s debt is 

unsustainable trajectory, yet this administration is pro

budget that is more of the same. Unfortunately, the Secur

Exchange Commission is following suit.

The fiscal year 2024 budget request for the SEC is $26

above fiscal year 2023 enacted levels, which is a double-d

centage increase. Now, some will say the SEC’s budget is 

set by transaction fees. I get that. But that is only part of t

And it completely ignores how bloated our government has 

Simply put, the sheer size and magnitude of our gover

too large, and the SEC’s budget is a prime example. After 

funding increases, we have an SEC that is heavy-handed 

forcement and examinations, and one that doesn’t thin

about proposing new regulations to completely rethink o

kets.

The blistering pace of the SEC rulemaking is a cause for 

We will talk about that today. And this isn’t just com

Members of Congress. The SEC’s own Office of Inspector 

in the fall outlined that SEC division offices raise concer

increased risks and difficulties managing resources and ot

sion-related work because of the increase in the SEC’s rul

activities. Again, this is your own Office of Inspector Gener

This is critically important, especially when the SEC is 

into areas that are not within their expertise and constit

questionable, such as requiring public companies to r

greenhouse gas emissions while claiming private en

wouldn’t be impacted.

Unfortunately, the steps taken by the SEC are more exa

their attempt to shift shareholder and board member res

ities to others that deter from the betterment of these co

The trend is diminishing the authority of boards, continu

pand outward at the agency, and can be truly disruptive.


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Let’s be clear: The SEC’s mission is to protect investors

fair markets, and to support capital formation. However, c

ously absent from all actions taken by the SEC is that o

formation. Why does this continue to be the case? Private 

flourish while public markets stagnate. Examinations, 

ments, and regulations are top of mind for many at the S

serious and practical capital formation conversations see

missing. The SEC must concentrate on all three tenants 

mission, not some over the other.

Additionally, I have mentioned in past hearings, data se

it pertains to the Consolidated Audit Trail, also known as 

mains a top concern. And I am hopeful that, too, can be 

thoroughly in today’s hearing.

Chair Gensler, I look forward to discussing these issues 

ers with you today. And, with that, I will now recognize 

friend and colleague, the ranking member from Maryla

Hoyer, for his opening statement.

Mr. HOYER. I thank the chairman very much.

I will turn this on.

I thank the chairman very much for his comments an

friendship. And, while we will disagree from time to time, 

we are going to work towards what all of us believe to b

best interest of the United States of America and its people

As we discussed in last week’s hearing, the unrest sur

Silicon Valley Bank and others ought to remind us how im

it is that our Federal agencies receive the resources they 

safeguard and strengthen our economy.

The recent bank failures were not simply a product of 

They came on the heels of a previous administration’s effo

back many of the regulations we adopted after the 2008 

crisis. That reckless course of action left our economy vuln

these types of failures. We need to ensure that critical sa

and high standards are in place in order to protect consum

prevent the type of instability that led to the financial 

2008.

Last week, Secretary Yellen made it clear that Congre

provide funding necessary for the Treasury Department a

agencies to work together to prevent this economic une

SEC plays a critical role in that mission.

We oversee a number of regulatory commissions: the 

make sure people pay their taxes that are fairly due; the C

Product Safety Commission, to make sure the consumers 

tected from corporations that they couldn’t possibly overs

selves; the SEC, which tries to keep the market a fair, o

transparent growth factor in our economy; and the Electio

ance Commission, which tries to make sure that we have 

transparent elections.

From supporting cryptocurrency enforcement to promo

mate change disclosures, the SEC is also working to addre

emerging challenges facing our economy. As a firm believ

public’s right to petition their government, I want to ens

the SEC is also providing robust opportunity for public in

its proposals.


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Now more than ever, Mr. Chairman, we must maintain 

tegrity of our markets, protect investors and consumers, 

mote greater accountability in the financial sector. We ca

new shocks derail the economic momentum we built in th

years, especially at a time when Americans are facing risi

As an aside, this economy has created 12 million jobs in 

24 months, more than any other administration in the h

our country. Is inflation too high? It is. Is inflation being 

over the world a reality? It is. But this economy is one of 

robust economies, if not the most robust economy, in th

today. We cannot do that. We cannot achieve those ends 

a fully funded, fully equipped SEC.

We have a hundred-trillion-dollar market, and we canno

that market and make sure it is fair and that confidence 

in the market’s fairness if we do not have the sufficient nu

people. That is why I believe we ought to execute on the Pr

budget proposal, which requests $2.436 billion for SEC. 

mately, as you indicated, more than $200 million addition

paid for, of course, out of fees. But the people necessary to 

are absolutely essential.

Like the rest of his budget, the funding is investment i

ica’s economic future. Conversely, making cuts to the S

other agencies like it would only leave our economy more 

able to turmoil like what transpired in the Silicon Valley B

I think I am over time, and I apologize for that. But I am 

to welcome Gary Gensler. For full disclosure, I have kno

Gensler for probably 40 years, maybe more than that. H

was a good friend of mine. So I am not totally objective 

comes to Mr. Gensler himself. I hope I am totally objective 

lates to the SEC.

I yield back.

Mr. WOMACK. Let the record reflect that he yielded back 

seconds remaining. Only kidding.

Chair Gensler, it is—you have a very important job, a

truly important for you to be here today. And for that, w

you.

And, with that, I am going to recognize you for your 

statement. Your prepared remarks will be entered into th

STATEMENT OF HON. GARY GENSLER

Mr. GENSLER. I thank you so much, Chair Womack, 

Member Hoyer.

A point of personal privilege, it is remarkable to be in 

Representative Hoyer, who was a good friend of my fa

guess. When I was a little kid, I would hear about Steny 

Steny that. That is where I am going to end. But I thank 

is really good to be in front of you and testify the first tim

you.

And, members of this subcommittee, thank you for inv

to testify on behalf—on the SEC’s fiscal year 2024 budget. 

have to say—this is customary—these are my own views, a

not speaking on behalf of my fellow Commissioners or SE

That is just standard language.


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The SEC. What are we? Who are we? We are critica

American public. For 90 years, the Federal securities laws 

work to oversee them have played a crucial role in good ti

in times of stress, and these laws benefit, as the chair sai

tors on one side of the market, issuers, capital formation 

other, and then the markets in the middle. That is our th

mission. But it is about those investors and the issuer

other side, and then trying to ensure that the middle of th

is efficient, competitive, transparent, and, yes, as these 

stress remind us, resilient.

The agency’s clients are 330 million Americans, your 

ents, who invest in their 401(k)s, IRAs, trade through b

apps, take out mortgages, auto loans, and alike. They ar

cans accessing the capital markets to fund their busines

small to large, their new ideas, their innovations, and th

is for the investing public and issuers that our staff must 

to drive efficiencies and protect for financial stability in w

ranking member said is a hundred-trillion-dollar capital ma

We have seen tremendous growth in this market. Mor

than ever participating. Just two quick statistics. Just in 

5 years, since 2017, the number of clients of investment 

has grown 60 percent to 53 million from just about 36 or -7 

Another statistic. The actual transactions in our stock 

equity markets, has doubled in the last number of year

nology also rapidly transforming our markets from electro

ing to cloud to artificial intelligence to predictive data a

Just the dynamism of our markets is a great thing. It is 

like, important to our capital markets, and it shows the in

itself of America.

Further, we have seen the Wild West of the cryptomar

with noncompliance, where investors have put hard-earne

at risk in a highly speculative asset class. Such growth a

change also means more possibility for wrongdoing. As a co

beat—and about a quarter of our workforce is enforcement

quarter is examination, so fully half of our staff—is also—

to be funded enough to meet the match of bad actors. 

makes sense that the SEC grow along with expansion of th

kets.

So, just to put some context on the funding to meet the 

our mission, what we have had is—I am pleased to sup

2024 request for $2.4 billion. We actually shrank in the ye

2016 to 2021 about 4 percent or so. And with this committ

and the full Congress’ help, just in 2023, we have gotten 

about 2 or 3 percent more in head count than we were 7 y

You authorized in your appropriations 400 new positions 

But those positions come on in the latter part of this year 

we have to go out and recruit and hire all those folks. So, 

2024, part of that is to fund those people for the full time.

We are asking for 170 more positions. That is about a 3

growth on where we are. As this committee considers the 

of course, we are deficit neutral. Appropriations are off

transaction fee. It is tiny. It is $8 per million dollars of tra

it is very tiny.


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Nearly 2 years into this role, I am grateful to work along

remarkable staff and fellow Commissioners to help mainta

ica’s capital markets. I truly think the best in the world

want to keep it that way. I thank you. I yield back 22 secon

[The information follows:]


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Mr. WOMACK. I thank the chairman.

And we will begin our round of questions. And let me re

eryone, we are on the 5-minute rule. You guys have got a 

front of you. You know what you have. And we will ackn

people—call on people in the order they were seated at the 

hearing started. We may have some other folks show up a 

later.

Mr. Chairman, at the SEC, enforcement actions, exam

and regulations are at the forefront supported by weekl

daily, actions by your agency. Unfortunately, one of the SE

tenants, capital formation, continues to be an afterthoug

outlier as I said in my opening remarks.

Chair Gensler, how do we ensure that public markets a

ing and that capital formation continues to be a priority at 

ganization?

Mr. GENSLER. It is very much a priority. It is a priori

staff. As I said in my opening remarks, investors on one s

ital formation on the other side. Whether it is small or l

porations, whether it is somebody tapping into the mortg

kets to get capital so they can buy a home or borrow for 

markets, every rule that we put out for public comment ha

nomic analysis and, as Congress has mandated, around e

competition, and capital formations. So we benefit from the 

feedback and this committee’s feedback on efficiency, com

capital formation. So it is at the heart of what we do ev

Mr. WOMACK. Would your Republican Commissioner

they be in agreement on that?

Mr. GENSLER. I think that they would agree that it is co

three-part mission. I think they would agree that it is a 

sional mandate. And I think that—based upon public comm

get feedback as to how we best promote investors on one ha

ital formation, and, as I say, the markets in the middle.

Mr. WOMACK. Would they agree that it is an appropriate 

with the agency?

Mr. GENSLER. Again, I don’t want to speak for them b

am only allowed to speak for myself. I agree it is an app

priority.

Mr. WOMACK. Would you be willing to testify alongside t

commit to doing that in the future?

Mr. GENSLER. I testify whenever Congress calls me.

Mr. WOMACK. Okay. I will take that as a yes.

The SEC budget requests $265 million in new funding, 

a double-digit percentage increase. However, over the 

years, regulations have been on the rise. If the SEC rece

increase, should we expect more of the same? Because h

burdensome reporting requirements and other disclosur

cially those related to the climate, possibly enhance capita

tion and increase American taxpayer wealth?

Mr. GENSLER. We have put out to the public not only ea

rules but also our unified agenda, these 50 or 55 projects 

have, that are very public. We are not planning to add 

based upon this appropriation. This appropriation request 

about making sure we have the examiners, the cops on t

Over half of our staff is examination and enforcement, an


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crease of the 400 positions this current year and the 

year—the vast majority of those are in really four areas: e

tion, enforcement, the Division of Corporate Finance to re

ings, and in our technology area.

Mr. WOMACK. Finally, I want to ask about what you a

with the money that Congress already has provided. An

more of a people question. The SEC is relying almost ex

on an academic fellowship program for the leaders of som

critical divisions.

Is it true that at least four of the SEC’s top six divis

headed by directors that have long been in academics? A

why is that the case?

Mr. GENSLER. Yes, it is true. Four of our divisions are ru

tremely talented individuals that are willing to serve their 

and partake in this great experiment called democracy and 

ally help us. The Division of Economic Risk and Analysi

economist, a world-class economist, from the University of 

vania, and the other three divisions are run by really str

viduals that are committed to the same three-part mission 

Congress has laid out.

Mr. WOMACK. I understand that. But would it not be im

for there to be an experience factor? Folks running these 

sions that have experience.

And let me just quote from the inspector general’s repo

highlighted in my opening statement. It reads, and I quo

reported an overall increase in attrition and difficulties hir

viduals with rulemaking experience. Managers reported re

detailees, in some cases with little or no experience in rule

So—and that is in your own IG report. So help me un

why this is the case and why we should not be expecting 

manding more experience.

Mr. GENSLER. One, the leadership are terrific. These ind

of all six divisions are really quite talented individuals and 

their time and experience to the American public.

Two, in terms of your question about attrition, we run 

percent attrition right now, which is consistent with man

other agencies that you will be reviewing in the Federal w

And we have consistently also ranked as one of the best 

mid-size agencies to work at by outside ranking services 

veys.

So I am really proud of the SEC staff. I am proud to 

I am part of it, these remarkable 4,600 people, and their le

of these divisions.

Mr. WOMACK. Thank you.

And I have gone over my time. I am going to yield to the 

member.

Mr. HOYER. Thank you.

So we can complete the answer to that question, he ask

relying on detailees as opposed to—as I understand it, re

the expertise of the principals involved as opposed to detai

had been sent over and getting their advice. Did you want 

ment on that before I ask my question?

Mr. GENSLER. All right. Thank you.


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The individuals in our divisions, whether it is economists

er it is lawyers in these various divisions, work for the S

there are rule-writing shops in each of these groups, talen

viduals. And we don’t have detailees from outside the SE

are people in the SEC.

What we do do is, each of those units internally find 

people to work on these projects. And they form teams betw

Office of General Counsel, the economists, and they loo

legal authorities. They look at the market data. They loo

economics, and they make their best staff recommendatio

of course, ultimately, it is the five Commissioners, and w

consensus and put things out to public comment.

Mr. HOYER. Thank you. Let me ask you generally bec

chairman has made a point of the increase that has 

quested. And you indicated that you have some 40-percen

in the market that you are looking at. Congress provided 4

tional slots. You have not expanded to that, and you ar

that process.

Can you discuss what limiting SEC funding would do for 

ness of markets and what the real-world impact would be 

tors, including individual retirement accounts?

Mr. GENSLER. Thank you. I think the real world natur

it comes back to human nature. Human nature is such th

people in the markets are good faith and do things well, b

are still some bad actors.

And so we examine nearly 40,000 different registrants on 

and we do about 3,000 examinations a year. So you can 

math. We are not examining all of the registrants on a 

basis. We bring 700 or 800 enforcement actions a year, 

markets are so vast.

So, in terms of real people’s lives, it is protecting them 

fraud. It is protecting them against Ponzi schemes and 

And so that is really the bread and butter of this agency

viewing filings, whether it is a mutual fund filing or othe

Mr. HOYER. So, given the expansion of the market and 

pansion of the participants—which is, I would say, analogo

IRS, who has a lot more taxpayers and a lot more com

questions to resolve—if you do not get the personnel that y

there will be a lack of oversight and a lack of enforcement?

Mr. GENSLER. Yes. Let me give you another statistic. W

tween 2,000 and 4,000 tips, complaints, and referrals a 

25,000 to 40,000 a year. And so our dedicated staff has t

sort through that, be responsive to the public, see what 

and then, where appropriate, follow the facts and the law 

to get money back to the public, you know, through disgor

and penalties and the like if the facts and law deem that 

propriate.

And so less dedicated lawyers and investigators and ec

in an agency like ours means less protection for the public.

Mr. HOYER. And, if there is less protection for the publi

it be reasonable to conclude that the public would have 

fidence in participating in growing the capital markets?

Mr. GENSLER. I think it is. And I think, to the chair’s 

it is about capital formation and investors because investo


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tion means more people are confident in a market. It mean

raising money and have a—in essence, can raise money che

cause there is less of a premium for, you know, misdeeds i

ket.

Mr. HOYER. Thank you.

I yield back.

Mr. WOMACK. Mr. Moolenaar.

Mr. MOOLENAAR. Thank you, Mr. Chairman.

Mr. Gensler, thank you for being with us today.

The Office of Inspector General October 22 report, you 

familiar with that, I understand.

Mr. GENSLER. Yes. I am. And the chair and I just chatt

it.

Mr. MOOLENAAR. Okay. And the concerns raised by m

from the SEC’s various divisions about the increased risks 

ficulties managing resources due to the aggressive rul

agenda at the SEC. Are you familiar with that?

Mr. GENSLER. I have read it. Yes, sir.

Mr. MOOLENAAR. Okay. And you have had 11 Commiss

making—you had to reopen public comment periods for 11 

rules. Is that true?

Mr. GENSLER. I think we have actually reopened more. 

do, from time to time, is we reopen if new items come u

times if new economic information comes up, we might 

Sometimes we reopen for other reasons. And I think it is 

more than 11 that we have reopened.

Mr. MOOLENAAR. Okay. But, anyway, you have had a p

gressive rulemaking——

Mr. GENSLER. Well, actually, let me just put this in con

predecessor, Chair Clayton, during his 4-year tenure, did 

rules. We have put out publicly that we are looking at th

55 projects. I could go back to my fellow Chair Mary J

Chair. Schapiro. Chair Schapiro probably set the record. 

way more than either Chair Clayton or what we are lookin

Mr. MOOLENAAR. Well, in the report, it talks about th

cant attrition rate with senior officers and attorneys b

highest percentage lost. It talks about data entry issues in 

cent of the job postings reviewed; the inability to hire ind

with rulemaking experience, what the chairman had me

dependency on detailees with little or no experience w

making, potentially leading to more errors in decisionmak

ited time available to research and analyze these rules a

effect on other rules; increased odds of litigation against 

eral Government and taxpayers; the inability to comple

core mission-related work due to rulemaking teams borrow

from other areas.

And these appear to be things that have really bled into 

tirety of the day-to-day life at the SEC. And it seems to h

the need for effective resource management and prioritiz

achieving organizational goals.

And, when you think about your mission—and I know y

about that every day—accurate data entry is essential t

that the decisions are made. And, in fact, U.S. financial 

are based on reliable and accurate information.


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And it just appears, from this review by the Office of I

General, that there is a lot lacking there. And it really br

you know, questions. When you increase rulemaking activi

don’t have the staff capable of doing these things. The exp

data entry errors. It really raises questions and confidence 

ability to lead the organization.

And I am just asking, if this aggressive rulemaking age

placed a strain on your staff, are you concerned that the q

the work proposed in final rules is slipping?

Mr. GENSLER. Sir, I am quite confident in the staff. W

a very tight labor market. You all know this. We are in a v

labor market. And the attorneys and the economists and t

folks at the SEC are sought after. They are deeply sought 

law firms and outside folks. But our turnover is consist

what other agencies have been.

And I also would say that our rulemaking agenda is actu

sistent with what Chair Clayton was doing and other cha

doing earlier. But do we look at each of the data entry pie

you said and each of the parts of the inspector general’s 

You betcha. We look at that. And we benefit from having 

inspector general and tell us—give us good advice.

Mr. MOOLENAAR. Well, it seems like it is more of a r

talking about areas that are really lacking. And I am j

dering, do other SEC divisions rely on data entry in their 

efit analysis?

Mr. GENSLER. We look at data, and we absolutely do. We 

benefit analysis or what is technically called efficiency, com

and capital formation analysis in each one of our rules.

Mr. MOOLENAAR. Well, I just wonder, if you have that m

entry issues in the job posting, you know, review those. It 

ates a question of kind of the capabilities and how solid th

are.

Mr. GENSLER. If I might just say, we spend about $380 

$390 million a year on technology. And that is part of 

front of this committee. It is, like—we spend, in a year, wh

large banks or investment banks or investment advisers 

a month. So we are trying diligently to make resources f

for data security, for data analytics work within that pa

budget. And that is an important part as well. We could d

if we had more dollars for technology.

Mr. MOOLENAAR. Thank you, Mr. Chairman. I yield back

Mr. WOMACK. Mr. Cartwright.

Mr. CARTWRIGHT. Thank you, Mr. Chairman.

Chair Gensler, I was listening to Ranking Member Hoye

tioning of you. And forgive us. There was some whispering 

It is not true that he is actually your Godfather, is it?

Mr. GENSLER. We are going to keep that one a little quie

Mr. CARTWRIGHT. But, seriously, I was listening to h

tioning, and he was making some important points ab

fidence in the capital markets and how that flows from p

of the investors. Is that basically what you said?

Mr. GENSLER. Absolutely. And I think it helps capital f

as well as investors because confidence and trust underlie

nancial system.


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Mr. CARTWRIGHT. Part of protecting investors starts at t

of sale with the broker-dealers. Am I correct in that?

Mr. GENSLER. Yes.

Mr. CARTWRIGHT. So what we have is the Financial 

Regulatory Authority, FINRA, that is charged with that. A

ple go to arbitration put together by FINRA. The SEC i

with conducting oversight of FINRA. Am I correct in that?

Mr. GENSLER. That is correct, sir.

Mr. CARTWRIGHT. And certainly ensuring that it acts in 

lic interest for the protection of investors and in furtheran

purposes of the securities laws. That is obviously in the Co

And, if the SEC finds that FINRA has failed to protect i

the SEC may add to or amend FINRA’s rule book or 

changes. And you are aware of that, Chair Gensler?

Mr. GENSLER. Yes. We got those authorities way bac

1930s.

Mr. CARTWRIGHT. Okay. FINRA has the problem of un

awards. You are familiar with that problem, I take it?

Mr. GENSLER. In a general manner, I am familiar with it

Mr. CARTWRIGHT. Right. It does. And in fact, the pr

that—well, it started in a 2000 report from a nonpartisan G

And I do request unanimous consent to enter this report 

record, Mr. Chairman.

Mr. WOMACK. Without objection.

[The information follows:]


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Mr. CARTWRIGHT. Okay. In 2000, the GAO found that 

percent of arbitration awards from 1998 went entirely u

broker-dealers, and that an additional amount were only 

paid. GAO, at that time, in 2000, recommended that the s

latory organizations, quote, develop procedures addres

problem of unpaid awards caused by failed broker-dealers.

But a generation later, up to now, FINRA has not est

any such procedures. In fact, FINRA’s data show that nea

million in awards went uncollected between 2012 and 20

even now, the latest information shows that, between 2

2021, $94 million in arbitration awards went uncollected.

And so the question is, will the SEC become more active 

tigating this problem and laying down the law with F

make them actually make changes so that—by definition, t

meritorious claims brought by investors who were in some 

fleeced by broker-dealers and didn’t get their awards paid.

Will you undertake to put the hammer down on FINRA

are charged to do in the statute, so that they change the

dures and end this injustice?

Mr. GENSLER. So our oversight of the FINRA, as you s

really important part of our capital markets. It is a self-re

organization that oversees and investigates and registers 

dealers. And part of that is, of course, this matter that 

raised through our examination function and our division 

ing and markets.

And I know that they have already had discussions and 

tinue to highlight the importance of this, the importanc

whether it is through arbitration or through the courts, th

somebody is awarded a disgorgement in penalties and so fo

they are paid. I would note that sometimes those broke

are out of business. So there is some of that that goes on, t

But I couldn’t concur with you more that it is importan

confidence of investors that they are duly awarded somet

cause of their claim.

Mr. CARTWRIGHT. Right. Well, good. We agree, then

Gensler.

And will you undertake to make that more of a priority 

SEC?

Mr. GENSLER. I think it already is a priority. But I wil

to you that I will check with the staff and make sure that 

derstand the importance of this issue.

Mr. CARTWRIGHT. Perfect. Thank you.

I yield back, Mr. Chairman.

Mr. WOMACK. Mrs. Hinson.

Mrs. HINSON. Thank you, Mr. Chairman and Mr. Ranki

ber Hoyer.

And thank you, Chair Gensler, for appearing before o

mittee today.

Iowans care about accountability. They care about focus 

sion, jurisdiction. And you already mentioned the cong

mandate for the SEC in an earlier answer. And so, I thin

it bluntly, we have seen you sprint outside of your congress

risdiction, specifically when it comes to the climate disclos

I see it as a true weaponization of the department, and Iow


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ers, Iowa businesses, and Iowa workers see it that way, 

I think it is high time that you reel it in. That is what I 

to tell you today on behalf of my constituents.

And I dug into the place where you say in statutory au

that you are citing 10 different sections of the Exchange o

ties Act in your proposal. And so my first question to you 

where in here specifically did Congress give you the statu

thority, the jurisdiction, to enact this climate rule?

Mr. GENSLER. I thank you for asking. So our agreemen

way back from the 1930s, is to ensure that investors get 

based on full, fair, and truthful disclosure.

Mrs. HINSON. I am asking you specifically about where y

utory authority is in sections 7, 10, 19(a), 28 of the Secur

sections 3(b), 12, 13, 15, 23(a), and 36 of the Exchange Act.

Can you cite where it gives you the actual authority? B

went through all these sections, and nowhere does it say ‘‘

‘‘emissions,’’ or ‘‘greenhouse gas.’’

Mr. GENSLER. But what it does say is that a company, 

is offering securities and offering sale of security to the pu

the public gets the description of the business, the mater

mation, and that they can’t mislead the public.

And what is happening now is there is hundreds, if not w

a thousand, companies today in the markets that are pu

disclosures about climate risk. And there are investors tha

lying on those disclosures. And all we are doing—we are n

all respect, we are merit neutral. And that is an importan

our capital markets. We are merit neutral——

Mrs. HINSON [continuing]. I think there needs——

Mr. GENSLER. We are trying to bring consistency a

parability to those disclosures.

Mrs. HINSON. Well, it is very clear that—in these secti

not explicit as far as your lane is concerned there. And 

when I say it is time to reel it in. You need to be explic

where your authority is. And I don’t see that in these se

Code that you reference.

And I am also very concerned by the expansive reporting 

ments for scope 3 greenhouse gas emissions, the devasta

pact that that would have for Iowa farmers. Because un

rule—you know, you look at large corporations, they have 

attorneys that can help them comply. Iowa farmers don’t h

So I am very concerned about the precedent that is being 

with these policies and what you are asking for here.

So can you give me some examples of where the Commis

asked for this type of nonfinancial information to be dis

the past?

Mr. GENSLER. So our agreement is just over the public 

nies, the 7,000 or 8,000 companies. It is not the farmers 

are referencing. So that is probably—we share that view.

And what this is about is the disclosures that the publi

nies are making. And we put out a proposal about trying 

consistency to that. We heard a lot of comments back. 

scope 3 disclosures that you referenced is one of the hand

important handful—of areas where people—public comm


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got 15,000 comments—came to us; 49 different farm burea

to us. And so I think that——

Mrs. HINSON. Well, I understand——

Mr. GENSLER. And so I think——

Mrs. HINSON [continuing]. Precedent for this. That is w

asking.

Is there any point in time where you can cite 

precedentwise where you have required this amount of di

Mr. GENSLER. It is just to bring consistency to the disclos

are already making as it relates to this issue about—there 

tent or focus of the Securities and Exchange Commission t

disclosures from private-sector farmers in Iowa or in any 

States.

Mrs. HINSON. Well, what I am hearing here is that th

precedented in your answer because you are not mention

thing precedent. And I do believe that the focus of you

should be on fraud, detecting Ponzi schemes, not on enact

mate agenda, which, again, I believe exceeds your statutory 

ity here.

Thank you, sir. I yield back.

Mr. WOMACK. Mr. Pocan.

Mr. POCAN. Thank you, Mr. Chairman, Mr. Ranking Mem

Thank you, Mr. Chair, for being with us.

First off, just a budget question. Do you, right now with y

rent budget, have adequate resources to investigate e

cryptocurrency issues?

Mr. GENSLER. We are stretched thin, sir. This is a fie

small compared to our vast hundred-trillion-dollar capital 

but it is a field that has a significant amount of noncomp

it, without prejudging any one token or one platform. We 

creased our resources there, but we could always use more.

Mr. POCAN. Yeah. Just with the volatility—I mean, w

about confidence in markets. I think this is one area—I 

cerned when some in the Republican leadership have talk

a cut. Going back to 2022 levels. Or this morning, Mr. Har

ally said pre-COVID levels. Going back even more ye

know, what impact that could have when there are emergin

that you are going to need resources for. So thank you for 

swer.

Also, we have been reminded recently very clearly why 

passed strong banking regulations like the Dodd-Frank 

why it was a mistake in 2018 to roll back some of those pro

We can likely agree that mismanagement and greed on th

the executives at the Silicon Valley Bank led them to ma

risky decisions that endangered their customers.

I am particularly concerned about section 956 of Dod

which required a number of financial regulators, inclu

SEC, to set guidelines around responsible compensation in

for bank executives and even prohibit compensation structu

drive executives to engage in risky behavior that may g

shareholders bigger profits but also endanger the broader e

So, to you and the Commission’s credit, the SEC is the on

lator that has even attempted to fulfill this requirement 


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passed into law a dozen years ago, but the rulemaking w

finished.

Chair Gensler, do you plan on tackling these reckless an

incentives by having the SEC pursue a rulemaking proces

long overdue requirement?

Mr. GENSLER. Yes.

Mr. POCAN. Great. Glad to hear that. I think, in talkin

confidence in markets, this is clearly something front of 

a lot of people.

Let me talk to you a little bit about congressional insider 

I know that New York Times recently said 18 percent of la

or their family members bought or sold financial assets o

year span.

And, you know, again, for confidence in Congress—this i

in the markets. I know we have the 2012 STOCK Act tha

Members to buy and sell individual stocks, provided that th

trade on inside information and disclose transactions ove

within 45 days. There has been bills introduced to change 

make it so we can’t buy individual stock.

And I will tell you, I am not one of the millionaires arou

so I don’t have to buy a lot of individual stock, anyway. 

get a lot of insider information almost on a weekly basis fr

panies and people that come in because of the access to pe

talk to Members of Congress.

How does the SEC conduct oversight on congressional 

And how is a determination made if they believe a Memb

lating the STOCK Act? And how would you define insider 

tion?

Mr. GENSLER. A lot of questions there. But we follow 

and the law. And so insider information—material nonpub

mation that a company has that the public doesn’t have. 

yet disclosed in their press releases, their filings, and the 

not meant to be traded upon by those insiders or people th

that information with, whether it is the broad public or a 

of Congress.

And so we just follow the facts and the law. And we kee

fidential if we have an investigation, as we would whet

somebody in the broad public or, of course, a Member of C

Mr. POCAN. In the minute I have left, just a quick qu

think a lot of us are concerned whether or not we are goi

the debt ceiling and what could happen to markets.

As someone who is watching markets and concerned a

faith in markets, are you concerned? And, if you are co

why? In case we don’t lift the debt ceiling, what type of imp

could have?

Mr. GENSLER. Well, it would be historic, of course. And 

be—I mean, in terms of trust—we were talking about t

confidence in capital markets. The capital markets th

would take a real hit. I mean, we have the gold standard o

markets around the globe. And part of that, at the base, is 

Treasury market. There is 24 trillion, about a quarter of ou

markets. It is called risk-free, but you would add a grea

uncertainty, and it would be frankly one heck of a shock to 

ital markets.


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Mr. POCAN. Great. Thank you, Mr. Chair.

I yield back.

Mr. WOMACK. Mr. Cloud.

Mr. CLOUD. Thank you, Chair, Ranking Member.

And thank you, Chair, for being here today. I wanted to 

on with the line of questioning Mrs. Hinson and other co

have had.

The Securities Act of 1933 and the Securities Exchang

1934—I am sure you are aware—defines what is your 

what the Commission’s role is. You would agree?

Mr. GENSLER. Yes. Very important, it is also the 1940 ac

vestment advisers—investment companies.

Mr. CLOUD. Right. And, of course, the job of the E

Branch is to execute the laws, not create the laws. And 

have the Antideficiency Act that ensures that Federal em

don’t use Federal resources to do things that they are not 

ized and appropriated to do.

I brought them with me today, the Securities Exchang

1933, and, of course, we have 1934 right here. Are you 

how many times—of course, we want good governance. W

concerned right now. When I talk to banks, they are re

cerned about the ESG initiatives that are being enforced. 

good governance.

But do you want to guess how many times ‘‘climate’’ ap

these documents?

Mr. GENSLER. I understand the question. It is about f

and truthful disclosure about the business——

Mr. CLOUD. It is zero. It is zero.

Do you know how many times the word ‘‘social’’ appea

also zero.

Right now, the SEC is currently working a rule that w

quire companies to report on the cost of climate change 

businesses above a certain threshold. It has been talke

scope 3, and you are saying that that is not going to hurt 

But the thing is, when a business is trying to get a loan, 

can’t get a loan until they report on the next person in th

chain who has to report on the next person in the supply 

does get down to the farmers.

And so, you know, I am really concerned about missio

And, you know, it is really hard to see where the SEC 

tainly you, as chair, would have any sort of authority to b

ing these things.

And I would just keep in light of that, that the Democ

House last term passed H.R. 1187 to try to require the c

of this kind of information. It passed by one vote with 

wrangling from Democratic leadership. Speaker Pelosi, at t

had to actually come down and vote herself to give them 

vote to pass. And it would mandate public companies dis

mate information.

My point is, is it didn’t pass. It wasn’t taken up in the 

And, therefore, it is not law. And, therefore, there is no a

to collect this kind of information.

Are you aware of West Virginia v. EPA?


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Mr. GENSLER. It is a Supreme Court case of last year. Y

so.

Mr. CLOUD. Right. There are a number of findings in th

in one of them, the Court held that an administrative ag

no power to make decisions on major questions unless 

clearly gave it such authority. And, as Mrs. Hinson poin

you don’t have clear authority. You may be trying to skew 

ity or find authorities in law somewhere to do it, but yo

have clear authority to implement climate-related data g

on people participating in our markets. And it is very con

And I would just point out, we have watched bank failu

pen, and a lot of it happened because regulators were aslee

wheel. At the same time, we see unauthorized rulemaki

on. And it is very concerning.

And I would point out to the chair’s comments. You ar

for more employees to do your job, but then it seems like 

tasked to doing something that you do not have the aut

do.

And so, you know, we are trying to provide efficient gov

We want you to do your core functions. You are needed. N

debating that. You need to have funding to do your core f

But I am concerned about the argument for plussing up em

when you have employees tasked doing stuff they have no 

ity to do. And it is placing a burden on the American peo

it is trying to enforce policy that has not passed Congress.

And so could you speak to your—can you—will you ret

employees—if you are asking for more employees, will yo

the ones you have working on these sorts of things to do 

their actually authorized core functions?

Mr. GENSLER. So let me speak to the climate rule and to 

ployees. On the employees, most of the staff we are askin

the funding is about our core, and the growth is in exams, 

ment, technology, and disclosure review is the bulk.

But in terms of the climate rule, if I could—if you wish—

is authorized by our statutes. And what we are doing is 

hearing from the public about where we potentially should 

economics, look at authority. We are aware of the Suprem

case that you referenced. And we do everything we do w

authorities as interpreted by the courts. And that is import

Mr. CLOUD. I want to remind you——

Mr. GENSLER. That is an important——

Mr. CLOUD. Public opinion flows through the Represent

Congress, and then we tell you what the public are think

then you go and do it.

And I am out of time, so I will yield back to the chair.

Mr. GENSLER. Thank you.

Mr. WOMACK. Mr. Bishop.

Mr. BISHOP. Thank you very much, Mr. Chairman.

And welcome, Mr. Gensler. And I would like to follow up 

line of questioning. The environmental, social, and governa

that is up for disclosure and up for discussion today, is t

sistent—isn’t that consistent with your mission to protect i

to maintain fair, orderly, and efficient markets, and to 

capital markets? Is that data—would that data be benefic


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vestors to have? Or would it be harmful to investors not 

it, in your capacity as a regulator?

Mr. GENSLER. To answer your question and the oth

resentative Cloud’s question, right now today, hundreds, if 

a thousand, companies are making such disclosures about 

risk. And so our role is not only to help bring consistenc

make sure that folks aren’t misleading the public about t

closures because investors—and we heard from 15,000 com

thousands of investors wrote in and said: We currently use 

formation. We would benefit to ensure that it is at least c

and not misleading. That helps capital formation. That hel

tors. And it helps regardless of whether you are pro-green 

—you know, you want to invest——

Mr. BISHOP. Is this consistent with your obligation?

Mr. GENSLER. It is consistent with what Congress au

and mission that we have.

Mr. BISHOP. Thank you. Chair Gensler, for purp

cryptocurrency, you have the unique experience of chair

the Commodities Futures Trading Commission and the S

and Exchange Commission. It is my understandi

cryptocurrency and the underlying blockchain technology 

defy categorization as either a security or a commodity 

quite frankly, they are neither.

You understand more than most people the interplay 

both Commissions and the extent of their jurisdictions. W

in mind, I would like to hear your thoughts on the regu

the cryptocurrency market and, in particular, how you ens

consumers are protected from fraudulent and predatory act

Can you elaborate on what you think the SEC’s role is 

comes to regulating the cryptomarket? And can you also fo

up by saying whether the SEC has any plans to issue a r

fying how securities law applies to digital assets?

Mr. GENSLER. At its core, when Congress set up the SEC

about protecting the investing public and thus the capita

tion on the other side with this disclosure. And it was a

somebody is raising money and the public is giving them 

based on their efforts—the Supreme Court in 1946 actually 

it, and then Thurgood Marshall wrote it so beautifully a 

ades later. It was—Congress painted with a broad brush t

the investing public when the investing public is basically i

or betting on a group of entrepreneurs.

Now, cryptotokens. Without prejudging any one of them, 

look almost on nearly most of them—I am not going to say 

ber—and you can find a group of entrepreneurs with a Twi

with a website, with individuals. And I bet that most of 

not visited by decentralized, nonexistent management. If 

going to get a meeting with somebody from cryptotokens. 

a human. There is a group of entrepreneurs, or they are 

lobbyist, or they are paying a lawyer to meet with you. 

some—and the public is basically giving up their hard-ear

lars to invest in that token. And that token entrepreneu

give them full, fair, and truthful disclosure.


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That is the core. So, frankly, of the 10,000 or 12,000 

There are very few that don’t have a group of entrepreneu

middle that the public is counting on.

So those are securities, sir, under the securities law.

Mr. BISHOP. So are you going to issue regulations?

Mr. GENSLER. The regulations actually already exist, s

are called the securities regulation. And so they are disclo

ulations for when somebody tries to raise money from th

They are exchanged. The storefronts in this business—th

fronts call themselves either crypto-exchanges or crypto

platforms. But those storefronts should come into complian

And our goal is the investor protection and capital form

have talked about earlier. But, even in the crypto spa

should come into compliance, and they should disaggrega

now, they are commingling with—it is rife with conflicts, t

are taking investors’ funds and trading against the invest

they are saying: Catch us if you can.

That is the nature of this field right now. Or: Excuse me

offshore. Try to find us if we are offshore.

And I have been around finance for 40-plus years. And t

by and large, most folks are trying to comply with the laws 

gress writes them and so forth. But this is a field that, at 

is sort of—it has got a lot of noncompliance and a lot—

with the anti-money-laundering laws and not just the s

laws.

Mr. BISHOP. Mr. Chairman, would you indulge me on

question?

Mr. WOMACK. The chair will indulge you, Mr. Bishop, 

cause your office is right across the street from mine.

Mr. BISHOP. Thank you, sir.

We were approached—Members of Congress were ap

with the proposition that we needed to regulate it by peo

are in that offshore area. I am trying to understand how t

lation would have helped those people in that offshore a

now seem to be accused with wrongdoing.

Mr. GENSLER. Well, whether it is the Commodity Futur

ing Commission—which I was honored to chair, and I l

agency—or the Securities and Exchange Commission, bo

oversee parts of the market. And it is—if you are touching 

vestors, selling these tokens to U.S. investors, then you com

either the securities laws or the laws that are of the Co

Futures Trading Commission.

Mr. WOMACK. Mr. Carl.

Mr. CARL. Welcome, sir.

Mr. GENSLER. Thank you. Good to see you, sir.

Mr. CARL. You are doing a great job so far. You are stayi

water.

Let me read this to you, though, because I am a little c

Congresswoman Hinson and Cloud almost took all my 

and I almost didn’t have anything to ask you. So I am sc

around here.

But the primary purpose of the SEC is to enforce the law 

market manipulation. Easy for you to say. Its three-part 

is to protect investors; maintain fair, orderly, and efficient 


rfrederick on LAP8M 3W LY3PRO D w ith H EARING
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and facilitate capital formation. What in the world has th

do with emissions?

Before you answer that, I am a little confused. Let me b

sarcastic. I have got a friend of mine in the coffee busin

want to know how all these 7,000 companies—what kind 

they use, can I get a question put on there to ask what kin

fee they use so I can give it back to my coffee producer? 

sound fair to me.

So why is SEC getting involved in emissions with this 

change? And I am not a fan of it. I have not hidden that

last 3 days, I have been preaching from the highest rock. 

afford the direction we are going. We cannot afford every

are doing in this.

Now, you have brought your very important group into 

sion asking questions for whom? 10,000 people that w

maybe? You said 10,000. How many people do you repres

million, you said? So can I find out what kind of coffee 

making?

Mr. GENSLER. It really comes down to this. And it is a go

tion. And Representative Cloud and Hinson asked really go

tions, too.

Mr. CARL. Yeah.

Mr. GENSLER. It is a much narrower remit. We are no

based. It is not about what type of coffee you—was it drink

Mr. CARL. Yeah.

Mr. GENSLER. It is that investors today around the glob

ing about the value of those investments that they make, 

ing into consideration climate risk. And companies today 

ready making disclosures.

Now, you could say, well, we shouldn’t be involved. But t

already hundreds of companies making disclosures abo

greenhouse gas emissions.

Mr. CARL. And that is their personal choice to do that. 

arguing. I am talking about your rules and your regulati

you are enforcing.

Mr. GENSLER. So our role is to ensure that those disclo

the extent—there is this concept of materiality as well—b

disclosures that investors are getting are not misleading 

vestors and that those investors are getting full, fair, and 

disclosures.

Mr. CARL. Yeah. I really question your motive there. I a

I am going to have to push back on that one.

Let me ask you this, then. Recently, you said the scope 

sions regulations aren’t well developed. I believe you then 

didn’t want to get ahead of the process when you were ask

getting rid of these regulations. Can you quickly tell me if 

planning to get rid of these scope 3 regulations?

Mr. GENSLER. Again, I don’t want to prejudge. I am a 

of a five-member Commission. It is how we all deliberate a

staff recommendations come up.

Mr. CARL. So what is your personal opinion?

Mr. GENSLER. But, in terms of the comments that we 

ceived, there is a handful of areas that are well known; 

comments are public. But this area of greenhouse gas emi


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a company—scope 1 and scope 2 is their electricity pur

there is much more support in the comment file, both fro

tors and issuers, than there was for so-called scope 3, whic

to the supply chain.

And it is not as well developed. We said this. I said thi

and a half ago. We took a layered approach. Even in their 

we said that that would only be done by fewer companies a

a big—sort of a safe harbor. But we are considering wh

there——

Mr. CARL. I——

Mr. GENSLER. Because we really did get a lot of commen

this——

Mr. CARL. I am sorry. I am running out of time.

When are you going to have an answer on that? Yes or n

Mr. GENSLER. I don’t want to prejudge. Staff is 

through——

Mr. CARL. All right.

Mr. GENSLER. We have never had a comment file as big 

On average, it takes us 12 to 15 months from a proposal 

we finish the rule.

Mr. CARL. Yeah. You know, the idea of forcing these co

to figure out how much they calculated in their disclosure

emissions produced by themselves as well as all their 

partners, and suppliers—is about as antibusiness as I ha

in a long time.

And, given your background, you would think you would 

tle more business friendly. Quite honestly, it goes again

thing that—your bio that I actually read. Because this is 

business-friendly. And we are in the business to help an

companies to produce jobs, to produce a product, to stimu

environment, so it creates taxes, so it pays bills to keep the 

ditioner on in this room.

So do we want to just—and I am out of time, but I w

this last statement. Why would we want to just keep stick

the businesses to just keep on piling on regulations, whe

need to do is leave them alone? There is enough people 

their emissions. We don’t need the SEC doing the same thi

Mr. GENSLER. I concur with you. That is not our role. 

is to help——

Mr. CARL. Then why do we do it?

Mr. GENSLER. So it is those raising money from the pub

companies raising money from the public, are currently 

disclosures. And it is trying to make consistency. It is als

to sort of tamp down greenwashing, if you have heard tha

as well. It is trying to bring some consistency to those dis

And, also, based upon the comments that are coming in

through, but we literally have hundreds of public compan

are supportive of pieces of this rule. And they say, you kn

here——

Mr. CARL. They are supportive, sir, because they know 

getting pressure on them to do this. That is the reason 

doing it. They don’t want any more regulations either.

So, Mr. Chairman, I retire my time. Thank you.

Mr. WOMACK. Mrs. Torres.


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Mr. HOYER. Mr. Chairman, could I have one second?

Mr. WOMACK. Mrs. Torres, if you would pause for just a 

I will yield to the ranking member.

Mr. HOYER. I thank you.

I want to get this straight. What the SEC is to do is 

sure the representations being made by those sellers of a

companies trying to raise capital are accurate. That is y

Mr. GENSLER. Absolutely. Full, fair, and truthful.

Mr. HOYER. What you are saying is that 800, 900, a t

companies have chosen to make a representation based 

mate or other factors, that you have not required that?

Now, there was statute, as Mr. Clyde, I believe, pointed 

failed, but you have not required that. But what I unders

are saying is, once the company makes a representation, i

responsibility to make sure that that representation is 

and true.

Is that what you are saying?

Mr. GENSLER. That it is accurate, but it goes further t

because we put out a proposal that would—and many of th

sures are exactly what you say. But we did put out someth

if it was, for instance, the scope 3 that we were talking ab

proposal—we don’t know where we will end up, but, if it w

rial to the—in essence, to the business, if it was material t

vestors, that you had some mandatory disclosure. And I th

is probably part of this——

Mr. HOYER. I understand.

Mr. GENSLER [continuing]. Discussion.

Mr. HOYER. Okay. Thank you, Mr. Chairman.

Mr. WOMACK. Mrs. Torres.

Mrs. TORRES. Thank you, Chairman, and thank you for 

this flow of information to continue——

Mr. WOMACK. Absolutely.

Mrs. TORRES [continuing]. Even though we are literal

the clock.

Thank you for coming to our subcommittee, Chair Gensle

You know, I understand that my colleagues disagree w

work on climate disclosures. My region, the State that I co

is home to 40 million people. We know that climate change 

ing to an increase in devastating fires, major floods with t

storms that we have had, tornado warnings. We have—do

what a tornado is in California. We know all about eart

but not about tornados.

In most cases—well, in all cases, as property owners ar

to renew their fire insurance to fulfill the commitment t

have made to their—to the bank when they apply for a m

loan, in the last 5 years, our mortgages—our fire insura

doubled in some years, and it has gone up at least 10 to 20 

in other years. It is incredible what is happening.

If—my point is that corporate America knows that 

change is real. Contrary to what some of us may want to 

they are making real business decisions that impact th

that I represent. We must ensure that communities like m

getting the information that they need in order to make 

decisions in light of climate change.


rfrederick on LAP8M 3W LY3PRO D w ith H EARING
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So I urge you to continue to provide this information, b

is critical, at the very least, for the 40 million people in m

State of California.

I want to go back to the issues with Silicon Valley Bank. 

update us on—I know that you are in the midst of an inves

but will there be an, you know, after-action report to find 

sons learned and implement them moving forward as to w

can do? What more can you do to ensure that we try to a

other chaotic event?

Mr. GENSLER. Though I can’t speak to any particular in

tion or any——

Mrs. TORRES. I am not asking that.

Mr. GENSLER [continuing]. Enforcement.

Mrs. TORRES. Yeah.

Mr. GENSLER. But, when market events occur, sort of t

book, if you wish, what we look at is where they are—wha

disclosures companies have made? We have had a lot of d

about disclosures, but were they truthful? Were they accu

full and fair?

We look at were any—we look at, to the extent we can, w

any inside training, material, nonpublic information? We 

whether there was any market manipulation. These are th

that we look at in our enforcement regime.

And we also look at, more broadly, how to—are there 

learned to help make the system more resilient? There i

risk in capital markets. We are not—that is part of the dy

of capitalism. But it is also ensuring that those risks don’t 

to, you know, regular folks.

And let’s just not forget that, in 2008, 8 million to 10 mil

ple lost their jobs. So part of an agency like ours is to tr

at lessons learned; is there resiliency in the capital market

broker-dealers and asset managers and the like?

Mrs. TORRES. In 2009, you know, that many more pe

their homes to foreclosure because of, you know, terrible 

vestments. They were investing against, you know, the pe

they were mortgaging.

So, with the cuts—I know that you oversee so many p

You have had—what is that—numerous comments onlin

than you have ever had over the 5—the last 5 years. Wh

30-percent cut across the board do to you?

Mr. GENSLER. I hope we are not talking about that, C

woman.

Mrs. TORRES. We have to talk about that because it i

table as it relates to the majority’s proposal.

Mr. GENSLER. Okay. I think the investing public would 

changed, and the capital formation—the companies that w

right by their investors and raise money, that the investin

wouldn’t have as much trust in those capital markets.

I think that what we do as an agency on a day-to-day 

really—is responsive to, you know, the world’s gold sta

capital markets.

Mrs. TORRES. Thank you, and I yield back.

Mr. WOMACK. Mr. Ciscomani.

Mr. CISCOMANI. Thank you, Mr. Chairman.


rfrederick on LAP8M 3W LY3PRO D w ith H EARING
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And thank you, Chair Gensler, for coming before the co

today.

You know, as the new guy on this table, I am going to, 

tening to my colleagues here discuss really the scope and t

of the SEC’s rulemaking authority, I am going to start 

broader just to get a better understanding of some questi

I have.

Would you mind outlining for the subcommittee how mu

ing goes towards the activities related to each individua

the SEC’s core mission of protecting investors, free mark

capital formation?

And, additionally, how many FTEs are associated with 

of those missions?

Mr. GENSLER. It is a good question. They are so intert

mean, we promote capital formation by also protecting i

We promote both by having the markets in the middle m

petitive, more transparent.

So we don’t—we don’t keep our books and records and 

out the three missions because they complement each oth

cially the—I think of the first two, the capital formation, i

or investors and capital formation, those—and so we d

don’t—I like your question, but we don’t keep our books t

because they are so intertwined really.

Mr. CISCOMANI. So I will follow up on that, on the s

then. So how much of the budget for the SEC on the req

the increase requested is dedicated to enforcement and e

tions?

Mr. GENSLER. So a little over half our staff is enforcem

examination, and well in excess of half of the growth—I 

thinking—of the 170 more folks, I think about a hundr

from exams enforcement technology to support that.

But, if I am off, we should come back to you.

Mr. CISCOMANI. Yeah. I would love to get some details 

And, even if it can get a little muddy on my first question 

ing a range of, you know, where the resources are being pu

I look at those three core missions, it would help me get 

of where the majority of the efforts are going. So especial

the staff or more is going towards the enforcement side an

aminations.

In your fiscal year 2024 budget request, the SEC is as

elevated FTE levels seemingly across the board, and can yo

outline again, in the same vein of my questioning, which 

will see the largest growth of FTEs and why?

Mr. GENSLER. Okay. The largest growth, which I think w

ally in the—I—we put a little chart in the document, bu

just reference it so I am not mistaken.

But the largest growth was, like—again, it is in enforcem

in exams. But third would probably be—I just want to ma

It is actually the Division of Economic Risk Analysis is 

third.

Mr. CISCOMANI. Uh-huh.

Mr. GENSLER. No. I apologize. Our Division of Corporate 

that reviews the filings of public companies is third, and 

Division of Economic Risk Analysis.


rfrederick on LAP8M 3W LY3PRO D w ith H EARING
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Mr. CISCOMANI. Thank you. I have about a minute an

left. I will ask you one more question.

We had Secretary Yellen here before the subcommittee la

and I asked about how the system of—as a whole is reactin

icon Valley Bank.

And so, Chair Gensler, as a voting member of the Finan

bility Oversight Council, did the SEC identify warning 

garding the banks that recently experienced trouble when 

to rising interest rates, and why or why not?

Mr. GENSLER. So the Financial Stability Oversight Coun

2022 annual report, so late last year, identified interest 

as an important risk in the financial system and withi

There was a whole section in the report. And, when inter

rise, the value of securities and loans can fall, and so t

pressure on the people holding those debt securities. And 

identified, as I say, late in 2022 in our annual report.

Mr. CISCOMANI. Mr. Chairman, I yield back. Thank you.

Mr. WOMACK. Mr. Joyce.

Mr. JOYCE. Thank you, Chair.

Chair Gensler, it is nice to see you again.

Mr. GENSLER. Good to see you, sir.

Mr. JOYCE. It—I can tell from the questions of my co

that this ESG question is still out there and remains 

ripen.

But I want to ask you: Do you support the double ma

standard which has been adopted by the Europeans in t

porate sustainability reporting directive?

Mr. GENSLER. Congress’ mandate to us is about investor

is really about just what is material to an investor makin

vestment decision, and those decisions are buying or sellin

ing a proxy. And that is—that is our remit, and it doesn’

ther, and that is all we are looking at. So that is what som

would call single materiality.

Mr. JOYCE. Well, the Europeans now believe that not on

rial risk should be disclosed by public firms, but also risk 

the firm’s operations to society and the environment shoul

closed.

What kind of information, if any, that progressive ESG a

demand from public companies do you believe may not f

the materiality standard or constitute a real risk?

Mr. GENSLER. Well, it is really about what investors—

have heard from a remarkable number of investors about 

looking as client—as climate risk in terms of their investm

sion, and that is the extent of our remit, which is differen

said, than in Europe. And it is really about what clim

might mean to their revenues, their profits, their supplie

competitors, what legislative bodies around the world, not j

in the U.S., might do to change their business and requi

So that is what investors have told us. It is really abo

is going to be the effect on the future financials and operat

competitive landscape and supply side of these businesses.

Mr. JOYCE. Well, the Appropriation Committee is serio

ensuring funds provided the SEC will be used to carry 

agency’s mission as directed by Congress.


rfrederick on LAP8M 3W LY3PRO D w ith H EARING
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Last year, we had some discussion on the request for 

that you had with cryptocurrency. I guess that didn’t go 

but I am concerned that the high volume of new rulema

prevented the SEC from fulfilling its basic due diligenc

tions.

For example, the agency’s proposed rule requiring incre

bersecurity disclosures does not consider existing requirem

tablished by Congress and agencies that specialize in cyber

like CISA. As the chairman of the Homeland Security Ap

tions Subcommittee, I am concerned that public report

cyber practice provide a roadmap for bad actors. Investors 

protected by this rule if the firms they invest in are harme

Are you working with CISA to make sure the SEC’s requ

closures don’t reveal sensitive information to cybercriminal

Mr. GENSLER. We have had a good dialogue with Jen 

and her team. She is the head of CISA.

Mr. JOYCE. Oh, I know. She was in before our commi

this week. So that is why—

Mr. GENSLER. Yeah. And our remit, again—and it—we 

discussion about climate. It is really just investors makin

ment decisions. So, if a cyber incident happened at a comp

hypothetically tens of millions of client files have been 

hacked or something, is that material to the company, so

a sense, like a factory were to burn down, but, instead, a 

million files are taken or something, is that material and 

vestors getting that information?

We did put a proposal out, but it is a proposal about s

information. It is the information that would be material 

tors, not the details of how the breach happened or so forth

Mr. JOYCE. But, in order to accumulate that, they are 

have to create the document that somehow a bad actor m

correct?

Mr. GENSLER. Well, they also have to sort of accumula

their board of directors—

Mr. JOYCE. Right.

Mr. GENSLER [continuing]. And discuss it with their boa

rectors. And, if they are discussing it with their senior le

and their board, then to let their owners—the owners of 

pany, the investors, understand if—and our proposal w

material incidents.

Mr. JOYCE. I understand. And I understand I only hav

onds left, or now—and decreasing, but I just want to follow 

on what they were talking about, the small business. Yo

had this exchange last year, and you said it was only the 

held companies.

Yet in some of the comments that were received from NF

cate that they are still concerned that somehow this is goi

fect the small businesses, or, as my colleague, about the 

and other ones.

Have you worked on trying to make sure they are exclu

that requirement because, obviously, they are not—they do

the law firms and the people necessary to report this on 

basis?


rfrederick on LAP8M 3W LY3PRO D w ith H EARING
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Mr. GENSLER. Right. Again, without prejudging what s

ommendations would be or my fellow Commissioners, I th

this has been an important exchange here today, but als

the American public has weighed in as to we oversee th

sures of these 7,000 or so public companies, not other co

that are not. And so sorting through some of these com

part of what the staff is thinking through.

Mr. JOYCE. But, again, that would eliminate the mom a

who are doing business with those publicly held companies 

they fall in that same chain.

But I am out of time, and I will give you 30 seconds ex

I took out. Thank you.

Mr. WOMACK. Thank the gentleman.

We are going to do a quick round two. I know Steny’s g

the most part, has left, but we have got several of our mem

maining.

Let me go back—I am going to close out my last questio

academics. And I got your answer, and I understand that. 

know, academics that want to serve, that is a noble thin

am grateful for that, but I certainly would think that we s

incorporating academics that have some real-world ex

That would be my ultimate goal were I sitting in your seat

I want to follow up on what Mr. Joyce was just talkin

scope 3, notwithstanding the SEC does an evaluation—an 

analysis of rulemaking procedures.

Do the down-the-chain costs—are they considered? I me

are—particularly as it relates to the climate rule, this has 

tial significant effect on small- and medium-sized busines

are part of that whole supply chain, and, in my opinion, th

are large, and may not have had the opportunity to comme

So your response to that?

Mr. GENSLER. If I can, with your permission, the heads o

visions of Investment Management, Trading and Markets, 

porate Finance have served their public well but also ha

world experience. The heads of Investment Management 

porate Finance are leading lawyers. Yes, they were at a

but they were also—one of them was at a big law firm b

was in academia. I mean, they really are true experts on 

ment law and on corporate finance disclosure law.

Our head of Trading and Markets is one of the leading p

what is called micromarket structure, but thinking about a

ly understanding how the details of a market work, and 

are trying to do on our Treasury market reforms and equity 

reforms and the like are so incumbent to, again, promot

formation and investors by trying to get more efficiency in 

dle for the investing public.

So, again, sir, I think they have very real-world economi

ence. We are often told at the SEC to do our economics 

have a world-class economist heading our Division of E

Risk Analysis and Trading and Markets——

Mr. WOMACK. All right. Let’s move to——

Mr. GENSLER [continuing]. I like going into battle with t

Mr. WOMACK. Let’s move to the impact on small business


rfrederick on LAP8M 3W LY3PRO D w ith H EARING
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Mr. GENSLER. So, on small business, again, in the discus

look at the impact on small business across all our rule 

But, in terms of this climate disclosure, again, we are lo

that because it is really about—our remit is just about th

panies that are publicly filing, publicly raising money, and 

mate risk disclosures.

Mr. WOMACK. On the—we have got a very diversified e

We have got a $20-trillion-plus economy.

These disclosures—and you mentioned the consistent, yo

across this diversified economy. These disclosures are 

from company to company. Are they not?

Mr. GENSLER. They can be, because some companies ar

ferent sectors and so forth.

Mr. WOMACK. Well, I guess my question, then, would b

the companies know a lot more about their risks than a 

ment agency like the SEC? I mean, would that not be the c

Mr. GENSLER. What we lay out is rules—and we have 

ades—like on material risk, we laid a rule out in the 1970

close your material risks. We also, in the 1970s, laid o

about environmental disclosures.

What has come along is investors now are getting a lot 

sures about climate risk. And, as we were chatting with Re

ative Hoyer, that they are already making these disclosu

trying to bring consistency to that helps investors make th

sions. And it also helps the companies as well to have some 

ency.

Mr. WOMACK. I just guess my point is that, in your se

consistency, that the SEC is becoming judge and jury ov

risks are important and which risks are not. And that is t

of my argument.

And I am going to—if my team will indulge me he

minute, I wanted to—well, let me just do my data secu

CAT question, I will submit for the record because I am 

time, and I want to be fair to all of the other members.

I want to be fair to you, too, with your time. Thank you 

And I yield back to the ranking member.

Mr. HOYER. I continue to struggle about the chick and 

here, but I will pursue that later because I am not sure I 

deep an understanding, because it could well be a problem.

On the other hand, the persons who determine whethe

there is a risk or—that they are willing to take are the i

based upon the information that is disclosed, which you 

responsibility to make sure is accurate information.

Now, I understand there is a process underway in whi

would be a more active, positive, or some would say not 

step that the SEC would be taking to require certain di

on energy or climate or actions.

Am I accurate so far?

Mr. GENSLER. That is correct. And, also, there was a p

that we proposed that it be put in the annual reports rat

just on your websites and other reports.

Mr. HOYER. Okay. So the concern is that we are makin

requirement. And as I understand the concerns being r


rfrederick on LAP8M 3W LY3PRO D w ith H EARING
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some of my colleagues is that is beyond the scope of your a

to do?

Mr. GENSLER. Well, we think it is——

Mr. HOYER [continuing]. It is their premise.

Mr. GENSLER. And let me say we think it is within our a

We have had mandatory disclosures about material risk

business since the 1970s. We have had mandatory di

about management discussion and analysis since—goin

again, 50 to 60 years. We have had mandatory disclosur

other environmental issues going for about 50 years.

So we do think that it is within our authority. But, in th

in this climate risk disclosure, most of what we have done

of it—is about, if you make a disclosure, for instance, ab

scenario plan or if you make a disclosure about your target

it accurate.

Mr. HOYER. Let me stop you there.

The implication of ‘‘if you make’’ is, if the company mak

termination whether or not they want to make such a di

clearly with the interest of encouraging greater investme

role at that point in time is ensuring that that is accurate 

tion that is being put forward?

Mr. GENSLER. Yes, or not material misleading, in the 

the statute.

Mr. HOYER. Oh, okay.

Mr. GENSLER. But there are parts of it that we propos

mandatory, particularly around what was called scope 1 a

2 greenhouse gas. And then, in scope 3, we took a narrow

and just said it was if material.

Mr. HOYER. All right. I am going to look into that fur

cause I want to understand my colleagues’ real concer

whether I share their view that may have an effect on sma

prises which do not have the ability to respond to that or 

be—may be implicated by association, if you will.

Mr. GENSLER. If I could help the member out, most of th

ments of—by your colleagues and the investing public is 

what is called—so-called scope 3, the suppliers and custom

business and what are their greenhouse gas emissions. A

discussion is an ongoing one by the staff and the Comm

at the SEC because we did get a lot of feedback on that.

Mr. HOYER. So that is not a resolved question at this 

time?

Mr. GENSLER. It was proposed, but you are right. Nothi

solved really in proposal adoptions or, you know, when t

pens.

Mr. HOYER. Okay. Last question, which I know is not yo

responsibility, but I am interested in your thoughts on it. 

extent did the reduction in the level of capital reserves t

passed under the last administration, in your opinion, did 

on the failure of the SVB Bank—SVB?

Mr. GENSLER. I am sorry, sir. Are you talking about the 

was passed in 2018?

Mr. HOYER. 2018, yes. To—what effect, if any, do you th

had on the failure?


rfrederick on LAP8M 3W LY3PRO D w ith H EARING
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Mr. GENSLER. I think it would be better for me to leave 

those questions to the banking regulators that I know 

going to be reporting come May on that. It is probably a m

public record that I was not supportive of that legislative i

back in 2018.

Mr. HOYER. Why?

Mr. GENSLER. I thought at the time—and I have to re

the letter I wrote, but I thought at the time that there w

of correlation, that even these banks that are in this—I 

was raising the limit from 50 billion to a higher number, 

these banks—that there could be a correlation in the mark

There was also some provisions about custodial banks 

eign banks, as I recall, that I raised some questions about.

Mr. HOYER. I will pursue that further.

Thank you, Mr. Chairman.

Mr. WOMACK. Mr. Moolenaar.

Mr. MOOLENAAR. Thank you, Mr. Chairman.

And thank you for your time. You have been very gener

your time.

I am trying to get a better understanding of kind of 

view this role. The way I hear you, it is almost like you 

you are providing a service to the businesses, the public 

nies—service to the investors, I should say, by vetting whe

companies’ statements on climate are accurate, and you v

as a key role for the agency?

Mr. GENSLER. I think Congress set us up that that ke

that disclosures are there about the financials, the descr

the business, as I say, over the decades, key risk.

Mr. MOOLENAAR. Right.

Mr. GENSLER. And investors really get to decide what th

is material.

Mr. MOOLENAAR. Right.

Mr. GENSLER. And, over the last 10 years, investors m

more have been looking for and companies are making the

sures.

Mr. MOOLENAAR. Well, I—no, I get it. There are activist 

with a political agenda. I mean, that is clear. And they w

tain types of information.

But what I hear you saying is this Federal agency rea

the—has the job of vetting to see whether those agendas a

carried out is really what I hear you saying. Almost—an

contrast it because when I hear of a billionaire flying a pr

to Davos to talk about climate risks and then going off to t

Bowl and Hollywood parties and saying they have been ab

set their credits doing some other project that they are inv

I think that person is being hypocritical, but I don’t think 

breaking any laws.

And what I view a Federal agency like the SEC would 

would be responsible for making sure people aren’t breaki

not the fact that they are being hypocrites.

And so that is where I want to understand really what y

losophy is when it comes to evaluating climate as part of y

of an agency.


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Mr. GENSLER. It is far narrower than the word that yo

It is not about vetting. It is about two things. We had thi

sion. It is ensuring that those disclosures being made, par

the material disclosures, are not misleading the public; 

full, fair and accurate.

And there is also a part of our responsibility that, on cer

closures, that they be made, they be required, like the fi

like the executive——

Mr. MOOLENAAR. Right.

Mr. GENSLER [continuing]. Compensation, things like tha

Mr. MOOLENAAR. Right. But, in the case of sort of th

sures, why not have a private entity, like Standard & P

Moody’s or someone who can look at all the stuff these co

are saying to appeal to a certain agenda and let them do t

you stay in the business of the regulation and, you kn

venting fraud, which, in my mind, when you say, you k

SEC has been involved with—when it comes to environm

abilities, you know, let’s say there is a major clean-up tha

pany has to have or a consent decree that they are part of 

EPA that is going to cause them financial risk—I get 

would evaluate that.

But, when it comes to them putting stuff on their web

saying they are following all these sort of social norms, wh

world would you want to expend valuable resources for you

being in that role?

Mr. GENSLER. It is really to protect the public that the

materially misleading disclosures, and it is also to promote 

ital formation that investors get something consistent and 

make a comparative—there is a comparison between thes

ment choices.

Mr. MOOLENAAR. But, if I am an investor in a company l

can’t I hire someone to give me advice on, okay, this com

doing what they say they are going to do, this company is

is it the SEC’s role?

Mr. GENSLER. I think Congress decided many decades 

it is our role because it is a role to help promote capital f

in this country and promoting it by having a Federal age

ours to help bring some consistency. And some of that con

is well established, of course, like generally accepted ac

principles and how you book revenues, and some is more e

in these last dozen years that there is a lot of disclosure

climate risk and how to help bring some consistency. B

merit neutral.

Mr. MOOLENAAR. Well, I do feel like you are—you kno

the administration wanted to create this disinformation go

board—do you remember when the administration want

that through Homeland Security? It feels very much like 

you are putting yourself in this role of evaluating the c

these businesses and really outside of your jurisdiction.

Mr. GENSLER. It is really up to the investors to evalua

our role just to help bring some, as I say, truthfulness i

tising, if you wish, and, yes, some requirements on materi

sures.

Mr. MOOLENAAR. Thank you.


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Thank you, Mr. Chairman.

Mr. WOMACK. Mrs. Hinson.

Mrs. HINSON. Thank you, Mr. Chairman.

And, just to follow up on that briefly, I think it is very cl

with Mr. Cloud’s comments that Congress felt the need 

something in the last—in the 117th Congress to clarify 

tion, that it wanted to give you the authority, which, again

argue you don’t have. And we can disagree on that, but I th

congressional intent could not be clearer there.

I do want to go back to something, though, that, since 

had such a conversation today about the rulemaking proc

know, under Democrat and Republican administrations, 

seen the public comment periods be historically 90 to 120 

to 4 months, for those public comment periods. But all of 

almost all of yours—I should say almost all have been dr

30 days.

Why?

Mr. GENSLER. Our—actually, on average, from the time 

on our proposals and put them on our websites, we have 

78 days for——

Mrs. HINSON. But for public comment, that narrow tim

you are accepting those, 30 days, correct?

Mr. GENSLER. No. We accept comments throughout a p

time when it goes in the Federal Register—it takes some 

get in the Federal Register, but——

Mrs. HINSON. Right, but you are saying average, right? 

is 78 days, but that includes the ones that are longer, so 

am looking at the intent of dropping most of them to 30 

me, that is a transparency problem. It—to me, it says 

want to limit the number of viewpoints that are coming in 

iting it to 30 days.

So that is highly concerning. I am hearing a lot about t

a lot of folks, let’s say, about how much time they have to 

formulate and get their opinions in.

We talk about that climate rule. Making sure that 

enough time for feedback on both sides of an issue, I think

very important.

I want to also go back to the inspector general’s report 

a moment. Have any SEC managers expressed any concern

that, with the reduced comment time in some of these ca

they are having trouble getting data from all stakeholders?

Mr. GENSLER. We—I want to assure the members, too

comments even after the comment period. We take meetin

this discussion today is part of our administrative record on 

ber of rules like the climate rule. And we consider that

member Commission.

So that is just the nature of these things. We have an 

comment period, but we also often receive and consider co

well beyond this——

Mrs. HINSON. So, even though the deadline may have pa

are still actively considering the feedback that you are ge

Mr. GENSLER. Yes.

Mrs. HINSON. Is that fair to say?


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I think it is concerning, though, when, in the report, 

that staff do have concerns, here on page 3, that they hav

ceived as much feedback during the rulemaking processe

ther as a result of shortened timelines during the drafting 

or because of shortened public comment periods.

So I think that is concerning when we are seeing that in 

report directly. There is a direct line there between a s

comment period and this feedback in the report. Would yo

Mr. GENSLER. Well, I think there is a sentence in the d

that says that.

Mrs. HINSON. So, yeah, directly connected. So that is w

concern is specifically with the timing there.

As far as recommendations from the IG, how many of t

withstanding? How many have been resolved?

Mr. GENSLER. We—we work with the Inspector Genera

to resolve comments. Most of—if I recall, were about hu

sources and hiring, and we go through that process with t

would have to get back to you to tell you——

Mrs. HINSON. Yeah. I would appreciate——

Mr. GENSLER [continuing]. That answer.

Mrs. HINSON [continuing]. Within—I think we are as

about 15 business days. If you would get those back to m

the next couple of weeks, I would certainly appreciate that.

Mr. GENSLER. You got that?

Mrs. HINSON. Thank you. I yield back.

Mr. WOMACK. Mr. Cloud.

Mr. CLOUD. Thank you.

Chair, you continue to kind of say over and over that, ok

businesses, they are already producing these reports an

fore—but there is a difference between a company who vo

is doing something of their own initiative because they wan

the strong arm of the Federal Government coming in and r

it for every business because there is a few businesses th

it.

Can you not acknowledge that there is a big difference 

Mr. GENSLER. As we have discussed, there is attribute

disclosure regime for decades that are mandatory and we 

There are some that are——

Mr. CLOUD. Your proposed rule requires businesses to 

not only requires businesses to report it; requires them 

on their entire supply chain and their supply chain’s supp

in a sense. And it really—to anyone looking at this, real

as—I think it as Mr. Moolenaar was saying, you know, re

nizant of a lot of the things we are seeing. And you said t

main job is basically to see if they are accurate and true

right?

Mr. GENSLER. It is to bring efficiency—as Congress’ wo

also to bring efficiency, competition in capital formation, a

vestors——

Mr. CLOUD. If your job is to make sure that these climat

are true, are you planning to hire a bunch of scientists, o

you plan to go about that?

Mr. GENSLER. The same way we do on other disclosur

really to set in place a set of rules, if we were to adopt 


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to set in place a set of rules. And then issuers follow the ru

investors get to make their investment choices.

Mr. CLOUD. The other regulations that you talk about, 

require reporting on, things like executive salary or capita

available, and those kind of things, those are all internal 

that have to do with the financial stability of a company.

To have climate regulations is something—it is a whole 

thing, and you are comparing apples and oranges here 

tending they are the same thing, but they are not at all. I

of a bizarre approach.

There has been values-based investing for a long time, 

people can look at companies and decide whether or not—

the Federal Government to come in and decide that these 

particular values that we want to force reporting on, I 

very, very troubling.

I mean, I am very concerned about human trafficking a

ery, and a number of the Green New Deal energy sou

mined with child labor in countries throughout Africa—th

for example—and solar panels, a lot of them are built w

labor in China.

Are you planning on requiring reporting on that as well?

Mr. GENSLER. Again, this is driven by investors curre

making investment decisions based upon climate risk for th

Mr. CLOUD. But that doesn’t change your mandate at all

business in the country came to you and said, ‘‘We want 

doesn’t change your mandate at all, does it, until Congr

Mr. GENSLER. No——

Mr. CLOUD. You don’t have any new authorities becaus

dred businesses, as you said, want this—want new regulati

Mr. GENSLER. I believe and our lawyers believe it is w

mandate Congress has already granted us.

Mr. CLOUD. Have you considered that a number of busin

tually like regulation because it creates an uncompetitive 

ment, particularly large companies that can afford lawyers 

likes to create these reports and—they are much more able 

pete in that environment, and it squashes the competiti

helps create the wealth gap. Have you considered that i

consideration on whether to promote these rules or not?

Mr. GENSLER. We do consider promoting competition f

business as well as competition among all the issuers as we

Mr. CLOUD. And I only have a minute left, so I wanted 

on this while we can. It is a different topic. And that is th

a mention about people in Congress stock trading. It is 

a concern that is worth looking into.

One thing that is completely overlooked that there is n

parency on—I have an act to—it is called the DIVEST A

look into agency heads at a certain level and up who are i

in stocks in areas that they are regulating as well. Are you 

with The Wall Street Journal report that came out in—I 

was August of last year, August of 2022, that touched on th

Mr. GENSLER. I am—I am generally familiar that there w

reporting—I don’t recall which paper—about investing——

Mr. CLOUD. It highlights 25 percent of Federal officials 

public financial disclosures at the SEC were investing in 


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firms that were lobbying that very agency. And so is that a 

that you are looking into, and would you work with me an

even perhaps support legislation like the DIVEST Act th

make sure that regulators are not investing in the areas t

are overseeing and regulating?

Mr. GENSLER. So, yes, we would work with you on tech

sistance on any—and this is true of any Member, but w

work with you on it.

In terms of the SEC—just in terms of the SEC, we ha

of the highest level of restrictions on any trading, partly 

of the nature of who we are and so forth. And we work 

Office of Government Ethics.

For instance, none of our employees can invest in the—so

individual—the broker-dealers, investment advisers that 

see and so forth, or any of the companies that we might b

tigating or and so forth.

There is a lot of—a lot of restrictions. At my level, it is 

allowed to—you know, the Commissioners, we don’t even 

any individual stocks. It is just the broad-based indexes.

Mr. CLOUD. I apologize.

Mr. WOMACK. Mr. Joyce.

Mr. JOYCE. Thank you, Chair.

Chair Gensler, how has the huge number of 

rulemakings at your agency impacted the quality of these r

your ability to effectively consider comments submitted?

Mr. GENSLER. I think that the quality is quite stron

again, the—what we are doing is fairly consistent with w

predecessors have done.

Mr. JOYCE. Do you think this has affected your attritio

Mr. GENSLER. I think that the attrition rate is driven b

labor market, really talented staff that are taken, but it is 

sistent with other Federal agencies at this roughly 6 perce

Mr. JOYCE. As you know, the markets certainly don’t lik

tainty. Are you concerned that so many transformative ne

likely to be litigated for years, and massive swings in poli

SEC would create uncertainty for many years to come?

Mr. GENSLER. I think of our agenda as helping the A

public, whether they be issuers or investors, for many 

come.

Mr. JOYCE. Okay. Well, I mean, a new collective-ba

agreement with the SEC Employee Union, I understand m

ployees will only be required to be in the office 4 days pe

How do you expect to effectively consider comments and 

adequate analysis on over 50 proposed rules with a workf

barely comes into the office?

Mr. GENSLER. The workforce is fully engaged, and it is—

we have all learned something over these 3 years. We b

we did 3,000 examinations in fiscal year 2022. We did 760 

ment actions. We reviewed thousands of companies’ fili

largely through telework.

It is—I am old enough to think, you know—this just—th

technologies, adapting, and people find different work-life b


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Mr. JOYCE. Well, I think the best work that we do is w

are actually together on the floor and have the, you know

to interact with each other. But I will take your word for it

I am—give you back the remainder of my time, sir.

Mr. WOMACK. For the good of the order, Mr. Hoyer?

Mr. HOYER. I think, for the good of the order, I will say 

we are about at an end, Mr. Chairman.

Mr. WOMACK. We are, indeed.

And, with that, I want to thank the members, both my 

side and on our side. Very good hearing.

I want to remind our members that they have 7 days t

questions for the record with the appropriate subcommitt

Chair Gensler, as I said in my opening, it is a very im

conversation we are having today. You have got a very im

job in this country. We thank you for the time that you ha

us today. We look forward to working with you as we com

fiscal year 2024 FSGG Appropriations process.

Mr. GENSLER. And I look forward to working with you, 

conversation was helpful for me as well.

Thank you.

Mr. WOMACK. Thank you.

And, with that, this subcommittee stands adjourned.


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THURSDAY, APRIL 27

FISCAL YEAR 2024 REQUEST FOR THE FEDERAL T

COMMISSION

WITNESS

HON. LINA KHAN, CHAIR, FEDERAL TRADE COMMISSION

Mr. WOMACK. The subcommittee will come to order. I w

to remind everybody as a reminder, we will follow the 

rule for opening remarks, questions, and comments.

Members will be recognized in order of seniority based 

is seated at the beginning of the hearing, rotating between 

ties. Members that arrive after the gavel will be recognize

order of arrival. So let us begin.

I would like to welcome everybody to the Subcommitte

nancial Services and General Government, and I would lik

come back to the subcommittee chair of the Federal Trade 

sion, Lina Khan.

As we all know, Congress is locked in a fierce debate r

the fiscal trajectory of our Nation. One path, the path that 

been on, leads to the $31 trillion-plus debt mountain t

rocketed inflation to 40-year highs and has most recently 

in a rising interest rate environment.

Excessive spending has consequences.

The other path, which will require constraint, control, 

operation has the makings of fiscal responsibility.

Now during this debate, my colleagues on the other s

said that our plans to examine and potentially limit our 

spending to fiscal year 2022 levels is Draconian, drastic.

I would like to just point out to my friends that the fis

2023 spending bill was settled just a few months ago. Tha

that we just started to operate at 2023 levels. The sky d

for Federal agencies during fiscal year 2022.

Given this debate, it is appropriate for the subcommittee 

fully examine the budget for all of the agencies that fall u

jurisdiction.

Today, we will explore the FTC’s budget request that i

for $160 million more over last year’s enacted levels.

This is, once again, a significant funding level for an inde

agency that has received yearly increases. Requests of th

nitude must be explained and justified thoroughly. Que

whether the FTC is performing its critical mission of p

consumers and promoting competition appropriately nee

asked.

Unfortunately, a once-bipartisan Commission has been 

to one-party rule, and we are witnessing the effects of this 


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The FTC, with a cavalier attitude, is weighing in on ar

are outside of its authority and deciding on issues through 

tive means.

We all agree that the work conducted to protect our sen

our military through the FTC’s consumer protections is 

important, but expanding the scope and following a philo

‘‘big is bad’’ for its antitrust work is dangerous.

Competition has always been measured through pric

product availability, as well as the dynamic nature of bus

novation. Moving beyond the objective to the subjective is 

aging to all kinds of business activity.

Chair Khan, these are important topics, and I look forwa

day’s discussion, but to be clear, to no surprise, I can’t s

massive increase for the FTC’s budget, especially given t

mission’s recent track record and given the Nation’s curre

outlook.

With that, I now recognize my colleague, and sitting in 

ranking member from Maryland, Mr. Hoyer, Mr. Pocan

opening statement.

Mr. POCAN. Thank you, Chairman Womack. I would lik

come Lina Khan, the Chair of the Federal Trade Commi

today’s hearing. I look forward to discussing what the FTC 

complished and the direction it is going, as well as how t

year 2024 budget request will provide the resources they ne

The FTC protects consumers across vast swaths of the e

They set rules and expectations for corporate behavior

Americans have the information they need to make prud

sions and investigate allegations of wrongdoing.

The FTC assesses mergers and acquisitions and other 

tion issues for much of the U.S. economy, including tec

healthcare, energy, and pharmaceuticals.

It also investigates unfair and deceptive practices relate

vacy, cybersecurity, security, credit reporting, misleadin

tising, and numerous other areas.

The FTC has some of the brightest and hardest working 

ees in government, but these broad responsibilities mean 

agency must make hard decisions about what investigation

sue.

We have heard reports that when you go to court, FTC 

out-staffed dramatically by corporations in high profile litig

I appreciate that you have requested substantial fun

creases in the fiscal year 2024 to support the FTC’s enfo

rulemaking, and research priorities.

The FTC is requesting a significant funding increase of $

lion, or 37 percent above the fiscal year 2023 enacted le

total of $590 million. This funding would go towards a

staffing in the areas of competition and consumer prote

well as support IT needs and expert witness testimony.

This increase in resources will further empower the FT

prove fairness in the marketplace and lower costs for A

taxpayers.

Additionally, because of the continuing surge in merger 

quisition activity, as well as changes to the FTC’s fee struc

anticipate the FTC will also increase its revenue by collect


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filing fees, which will offset a portion of the requested fun

crease.

Needless to say, the FTC is one of only a handful of 

whose own fee structure helps to offset taxpayer funding.

We look forward to discussing how the FTC will use the

effectively to support its consumer protection and com

work.

Before I yield back, I would like to note that this week 

leagues from the other side of the aisle have advanced a d

ing bill that would impose drastic cuts to Federal agencies.

For the FSGG bill, that means cuts to agencies like t

which protects Americans from fraudsters and scammers.

The Consumer Product Safety Commission, which keep

products off the market, and the Securities and Exchange 

sion, which protects the financial interest for investors 

IRS, which just received a much-needed increase in fundin

forcement efforts to crack down on wealthy tax cheats.

I hope that my colleagues reject these ill-advised cuts an

work together to protect Americans from those who seek to 

fraud and cheat the system.

Chair Khan, I look forward to your statement and our d

this morning.

Thank you, Mr. Womack, and I will yield back the balan

time.

Mr. WOMACK. I thank the gentleman.

I now recognize Chair Lina Khan. Your full written t

will be placed in the record, and the floor is yours, ma’am.

STATEMENT OF HON. LINDA KHAN

Ms. KHAN. Chairman Womack, Ranking Member Ho

members of the subcommittee, thank you for inviting me 

today. It is an honor to be here. In my remarks, I will sh

you some of the tremendous accomplishments by FTC staff 

last year and discuss the Commission’s budget request f

year 2024.

We are grateful for the increased funding Congress has 

in recent years, particularly in this current fiscal year.

We put the resources that Congress gives us to take on 

the pressing challenges that Americans face in our economy

As the Commission’s written testimony lays out, the FTC 

complished an enormous amount over the last year, despit

cant hurdles. These accomplishments are a testament to 

work and creativity of the FTC staff who, day after day, a

ing to protect American consumers, workers, and hone

nesses, even when it means taking on some of the most 

corporations in our economy.

The FTC is small but mighty. During fiscal year 2022, 

returned $497 million to consumers and to the U.S. Treas

eral Fund.

To continue to fight for consumers and fair competition, t

mission is requesting $590 million for this upcoming fis

This would increase our budget by $160 million and fund 

tional 310 FTEs over our planned fiscal year 2023 level.


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For fiscal year 2022, every dollar of the FTC’s costs retu

estimated $30 in FTC-provided benefits to the American pu

expect that a larger budget would position us to further 

this return on investment.

We are making this request because Congress has given 

a critical job, but our resources have not kept up. Despite 

the recent increases in our budget, the agency today remain

er than we were in 1980, even as the Nation’s economy ha

six-fold since then.

Demands on the FTC continue to grow as we review mu

dollar corporate mergers, tackle major litigations against 

deceptive practices, review millions of consumer complaint

and respond to a steady stream of requests from Congres

search and investigation of various economic sectors.

Additional resources would allow us to expand the criti

that the FTC staff is doing. On the consumer protection 

have been redoubling our efforts in traditional areas of 

ment, like protecting Americans’ privacy, and combatin

while also activating additional authorities that Congress h

us.

In the last year alone, we have used, for the first time, a 

of authorities that Congress has given us, including t

health privacy breaches and ‘‘Made in U.S.A.’’ fraud.

We have also been racking up record monetary judgm

cluding the largest ever judgment to protect children’s priv

largest monetary judgment in a fair lending case, and th

administrative judgment ever.

The Commission is also using all of its authorities pro

Congress to tackle illegal mergers and anticompetitive p

Over the past 16 months, the FTC has moved to challen

transactions in critical sectors of the economy, includin

conductors, defense, energy, healthcare, and digital market

This includes filing suit to block eight mergers outright

as 11 other anticompetitive deals that the parties abandon

the FTC indicated concerns.

We have also been partnering up with the States to tac

competitive practices, including a lawsuit that we filed l

against two large pesticide manufacturers, Syngenta and 

whose pay-to-block schemes have been inflating the pri

farmers have to pay for pesticides.

The Commission is also using its authorities to en

marketwide inquiries, including studies that are taking a c

at the practices of pharmacy benefit managers, the middlem

sit in between the pharmaceutical supply chain.

We have also launched a study looking closely at the fac

contributed to the supply chain disruptions and trying t

stand whether potential unlawful practices exacerbated th

of those disruptions.

We are also continuing to invest in our expertise. We 

launched an Office of Technology so that we can keep pace 

increasingly digitized economy.

This new office is hiring data scientists and engineers, A

and technologists with expertise across a range of additio


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cialties. These talented individuals would partner up with 

torneys and economists to strengthen our enforcement work

In short, the FTC is on the front lines of some of the mo

ing challenges that Americans face. Ensuring that we can f

cute on the mandate that Congress has given us requires a 

commitment of resources.

Thank you for the opportunity to appear before you toda

forward to your questions.

[The information follows:]


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Mr. WOMACK. Thank you, Chair Khan. We will move no

questions and answers, and I will lead. My first questio

going to cut to the chase here, and I am going to use a 

term in so doing.

We continue to hear that there is a command-and-cont

at the FTC, from anecdotal conversations, to abysmal e

survey results, to an Inspector General audit that cited t

mission’s limited controls in place for consultants, to new

of a mass exodus of senior staff over the last 2 years, as 

the resignation of the only Republican on the Commiss

year.

I have to ask, Chair Khan, what is going on at the agenc

I am interested in the steps that you will take to correct 

more interested in frankly how we got to this place. To en

never happens again, please detail for us how we got he

turn.

Ms. KHAN. Thanks for the question, Congressman. Look, 

credibly proud of the work that the FTC staff is doing day 

out. We are on the front lines of some of the most criti

lenges that Americans face.

There is no question that there are things early in m

that we could have done better, and since then, we have be

ly trying to understand some of the source of the decline i

and identifying ways to improve that.

Since then, we have been working closely with the sta

prove on those fronts, and are already seeing significant pa

As for the Commission, look, it is my firm belief that t

mission is at its best when we have five commissioners, a

really looking forward to additional colleagues as soon as t

dent nominates them and the Senate confirms them.

Mr. WOMACK. Do you encourage collaboration? Do you 

open-door policy? Do people use your—do you have one?

Ms. KHAN. Absolutely.

Mr. WOMACK. Is it stated? Is it published? I mean, peop

they can come talk to you?

Ms. KHAN. Absolutely. In fact, one of the things we ha

duced under my tenure is open Commission meetings. So 

first time the Commission is conducting some of its bus

public.

Each Commission meeting, people can sign up. You kn

ular members of the public can sign up and come speak di

the Commission. And so in addition to this, we have also b

ularly opening public dockets.

And so on many fronts, the FTC is increasingly hearing 

public at greater levels than we ever have before, and w

benefit from hearing directly from the public and learni

hand what are some of the key issues that Americans ar

Mr. WOMACK. Do you encourage candor?

Ms. KHAN. Absolutely.

Mr. WOMACK. I want to turn attention now to the FTC’s 

tivity levels over the last few years. Specifically, how mu

are you spending on consumer protection enforcement ac

compared to antitrust actions?


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Your budget reflects a larger request for the competit

when compared to your mission for protecting consumer

walk the subcommittee through your levels of productiv

should we anticipate that this trend of more dollars being 

mergers and antitrust will continue?

Ms. KHAN. It is an important question, and currently, ou

are organized by a Bureau of Consumer Protection that 

than the Bureau of Competition. What we have seen in pr

that bringing antitrust cases is more resource-intensive tha

ing consumer protection cases.

So on average, we can bring a consumer protection ca

say, around 8 to 10 FTEs. On the antitrust side, bringing 

case requires at least 15 people, oftentimes 20 or 25. So we 

a significant resource asymmetry in terms of the number 

needed to bring these law enforcement actions.

We have also seen an asymmetry in the level of expert 

expert costs, on the consumer protection side, can sometim

the tens-of-thousands or hundreds-of thousands-of-dolla

whereas expert costs on the antitrust side are routinely in 

lions-of-dollar range.

And so we just see, at a basic level, an asymmetry of 

needed to even bring antitrust cases in the first place, an

what accounts for some of the discrepancy in the request.

Mr. WOMACK. Yeah. Finally, Chair Khan, the $160 m

crease, as I state in my opening, it is on top of significant i

in previous years.

As we know, part of your budget is offset by merger fil

Walk the subcommittee through your take on the level o

activity taking place in the country.

Ms. KHAN. So the merger activity that we saw over the 

years was off the charts. We saw about a 70 percent incre

on year, and that was as our staff levels remained the sa

so, our staff were under enormous strain to be investigatin

matic expansion in number of merger filings that have been 

in.

We have more recently seen some of these merger filing 

decline, but they are still somewhat higher than year-on-y

ages historically.

It is true that our budget is partly offset by money we 

lecting through the merger filing fees, as well as fees 

through our Do Not Call Registry. And so, the amount tha

dependent on the General Fund is quite a bit smaller.

Mr. WOMACK. Mr. Pocan.

Mr. POCAN. Thank you, Mr. Chairman.

First, let me just ask about the conversation that there 

to be 22 percent cuts to the budget coming forward. For yo

cy in particular—and I would argue antitrust is consume

tion by the way—what would that type of budget cut mean

And even though your agency is a little different, that 

some funding from fees, what would that have as an impac

sumers?

Ms. KHAN. In short, it would be devastating. You know

on the front lines of hearing about fraud and scams day 


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day out. This includes crypto fraud. It includes fraud an

that are targeted at elderly Americans, at veterans.

We have, you know, significant resources devoted to p

Americans from these types of behaviors, and if we were 

mately see the types of cuts that have been proposed, it w

quire potentially us to—you know, at the very least, woul

a hiring freeze, and ultimately could even see a reduction 

where from 140 to 180 FTEs.

Again, we are already at a stage where we can barely 

with the work that is coming in, and so any further cuts w

quite devastating.

Mr. POCAN. Thank you. Chair Khan, many of my colleag

I guess the word I would use is, obsessed with cracking 

an apparently pressing issue of our time, the social media p

TikTok.

While I think there is a target out there about data p

social media platforms that is broader than just TikTok

come as no surprise to my colleagues that the largest FTC 

ever levied happened not too long ago on this broader issu

privacy.

In fact, just last year the FTC found that Twitter deceiv

and sold data that was meant to protect their accounts.

In 2019, the FTC slapped Facebook, now Meta, with a r

billion penalty and required them to modify their pract

now know that 87 million Americans were affected by this 

selling of user data.

These companies aren’t owned by the CCP. These are A

social media companies. With regard to these platforms, w

vacy concerns do you think exist for consumers, and w

fair—and is it fair to say this is a widespread issue?

Ms. KHAN. I think it is absolutely fair to say that this is 

spread issue. As you have mentioned, there have been 

major social media companies that have received FTC scru

that the FTC had determined had potentially violated the l

I think if you step back, we see that some of this stem

tially from business models that are incentivizing 

vacuuming up of user data.

I think especially when you have business models that a

on behavioral ads, the businesses can be incentivized to e

collect, and that can clearly come into tension with consu

vacy.

Mr. POCAN. Great. Thank you. And Chair Khan, nume

ports indicate that health data collected by mobile apps is 

for sale widely and at very affordable prices.

I am concerned that this type of sensitive data collected 

by the apps, that is meant to help consumers find cheaper 

tion drug prices, or get access to behavioral of mental hea

ices, is being sold en masse to data brokers.

What actions has the FTC taken to reduce the amount 

personal data that is being collected and resold by mobile 

pecially behavioral and mental health-related, often w

user’s knowledge, and often this data is sold on a aggregat

But researchers have found that it is often not difficult to 

a specific person within that.


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How does the FTC factor the risk that personally identi

formation could be easily revealed through its enforcemen

Ms. KHAN. This is a huge area of concern for us. We 

cently brought several enforcement actions focused on the 

sensitive health information, including two cases that we 

against GoodRx and BetterHelp.

In both of these instances we saw that companies had 

sensitive health information and then made it available 

geted advertising.

And it is fair to say, I think, consumers are not expect

when they are handing over this sensitive data, it is goi

made available for those purposes.

So we brought an enforcement action, made it clear th

types of practices can be unlawful.

We also, last summer, sued a major data broker, Koch

making available very sensitive geolocation information th

be easily purchased and used to identify whether people we

to sensitive locations, be it places of worship, addiction fac

other health services.

And so, that litigation is ongoing, but needless to say, I t

explosion in user data that is available for sale, oftentim

sensitive data, is a top area of concern for us.

Mr. POCAN. Great. Thank you, Chairman.

In my remaining seconds, the fact that they recently ha

fice to advise to technology, Congress had that prior to 19

you know, given our workshop yesterday on AI, all the

technology issues, this might be interesting to revisit whe

tually have the full Appropriations Committee meet.

Thank you. I yield back.

Mr. WOMACK. Mrs. Hinson.

Mrs. HINSON. Thank you, Mr. Chair, for holding this 

today.

Chair Khan, thank you so much for coming before us to

answering our questions. Obviously, the FTC serves a ver

tant role in making sure that competitive practices can con

exist in this country in the marketplace while still protec

sumers.

But I am going to focus today on just some of my conce

rounding what I perceive to be maybe going a little bit fa

of your jurisdiction on some of the rules and the process th

it comes to regulations is driving up the cost of doing bu

this country.

And when we talked yesterday, we talked about big busi

small business and making sure we can protect our sm

nesses, and so one rule that I am concerned about and is 

forward, is the Commission’s proposed Motor Vehicle Deale

Regulation Rule.

Obviously, the rule’s intent is to help consumers, but ma

new paperwork provisions associated with the rule really 

been tested, and from my count, there is at least four ne

sures that car buyers will have to both read and sign.

And, you know, I have bought a vehicle myself. I know h

plicated it can be, and we are adding a layer of complicat


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so I just want to know why. Why are you enacting this 

that really puts that onus on the consumer?

Ms. KHAN. Thanks, Congresswoman, and I really enjo

conversation yesterday about the importance of small busin

So the FTC’s work in this area and the proposed rule r

lows years and years of enforcement activity. We all kn

buying a car is one of the most significant and expensive p

that an American makes, and unfortunately, we have seen 

practices persist.

This can include certain bait-and-switch practices so tha

nies may be representing one set of commitments, but t

mately switching what consumers are ultimately on the h

Mrs. HINSON. But aren’t those things already illegal? 

where do you not feel that you don’t already have the 

ment—that the enforcement capability doesn’t already exis

I mean, when you look at the amount of time and effort 

is going to take on the consumer side, I just see this as an 

ible burden, not only to our dealers who are now going to 

dedicate more additional staff time there, but to the consum

I have been in and bought a car, right? I understand ho

papers you already have to sign, and now we are putting t

on the consumer.

Do you not feel that you already have that enforceme

bility, that things are already illegal that you are describin

Ms. KHAN. So it is true that under section 5 of the FTC 

are able to reach some of those practices. I think in practi

we have seen is that this case-by-case approach is not e

deterring these illegal business practices. And so, codifying 

gality of these practices through a rule, we think, will both 

businesses much clearer notice about what is unlawful, 

crystal clear, and then also, give us more remedial auth

that if companies violate these rules and engage in thes

practices, we can actually get money back to consumers

that is——

Mrs. HINSON. With all due respect, I believe that is Cong

to decide what needs to be in code here, not—this shouldn’

pening through the rulemaking process.

And another question I have in this regard, what is th

consumers? Have you actually accounted for that cost of a

time with this mandated rule and the paperwork here?

Ms. KHAN. So our proposed rule lays out some prelimina

ysis, but it is just a proposed rule. We put out the proposal 

ment. We received somewhere between 10- to 11,000 comm

cluding commenting on some of these issues, and so our 

currently looking closely at some of the input and will d

how to move forward.

I will say, the rulemaking is pursuant to the authority 

gave us in Dodd-Frank where they authorized us to issue a 

dressing practices by auto dealers.

Mrs. HINSON. Have you done any qualitative research 

case?

Ms. KHAN. Our economists have been doing quantit

search, which is in the rule. I believe some of the input we 

ting is more on the qualitative side.


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Mrs. HINSON. Yeah, I would say it is prudent to consu

when you look at the paperwork requirements before you 

them to see if they are working as intended. So I would 

to seriously consider that before any further movement 

rule.

And since we don’t know if they will actually work, a

haven’t been tested in practical application, if you wind 

fusing customers and this doesn’t work going forward, wh

are you prepared to take at the FTC to reverse course o

it is a damaging rule?

Ms. KHAN. Yeah, look, we all share the goal of making s

this is improving the process for consumers, not adding 

of confusion. And so if ultimately we ended up getting 

input or research that suggested it wasn’t working as inte

course we would revisit that.

Mrs. HINSON. Well, I would like to submit, Mr. Chair

record, a letter that I, along with many other Members, bi

Members, wrote to the chair and the FTC to ask her to 

this rule.

And I believe it is going to be damaging to consumers in 

run, and really will hurt our small businesses, right? Man

auto dealers are small businesses. From my district, I ha

who employ dozens and dozens of people from techs to sale

So, they are supporting a lot of families, and this will creat

challenging process on the consumer side.

So without objection, Mr. Chair, I would ask that this 

mitted for the record.

Mr. WOMACK. Without objection.

[The information follows:]


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Mrs. HINSON. Thank you, Mr. Chair. I yield back.

Mr. WOMACK. Mrs. Torres.

Mrs. TORRES. Hello, good afternoon, Chair Khan. It is re

to see you, and thank you for responding to my most rece

about reducing gasoline prices. As you know, Californian

district have been hit hard by high gas prices this last win

I look forward to continuing to work with you to address th

I also want to follow up on an important issue of compan

iting off of people’s sensitive location data. As you know, 

concerned that companies’ unfair data practices can allo

tunists and extremists to hunt down women seeking aborti

It is why a sent a letter last year, joined by 71 of my co

urging you to do everything in your power to protect wom

extremists.

In State after State in this country, conservative activi

gone after women, trying to stop them from receiving sa

tions and threatening to punish them with prison if they do 

If these conservative operatives have access to a woma

they could track her, know if she Googled ‘‘abortion,’’ kno

went to an abortion clinic, know if she missed her perio

app.

This is the world that we live in, where a woman told by 

tor that her fetus won’t live outside of the womb, some

needs an abortion now has to worry about being hunted 

a criminal. No one should be hunted down and persecuted 

ing an abortion.

The FTC must continue doing everything in its power t

Americans from unfair data practices, and stealing sensit

also has real-world consequences for people visiting a c

temple, an addiction center, or trying to evade a stalker, 

a victim of domestic violence.

Can you talk about the actions the FTC has taken to re

amount of highly personal data being collected and resold 

bile apps, especially geolocation data often without th

knowledge.

Ms. KHAN. Yeah. Cracking down on the abuse and misus

sitive personal information is a top priority for us. Last 

brought a lawsuit against a major data broker that was 

some of this very sensitive information, including geolocati

mation, available for sale quite easily.

And that data could actually be used to precisely identi

specific individuals were traveling.

So as you noted, that could reveal whether they were 

church or temple, whether they were seeking healthcare

we have a lawsuit——

Mrs. TORRES. Or if they are a targeted Member of C

where they are going.

Ms. KHAN. Exactly. We have also brought cases ad

stalkerware, instances in which this data is being abused 

know, perpetuate stalking. So this is a top priority.

We also currently have a rulemaking ongoing that wo

sider whether we need marketwide rules to address some 

practices head on.

Mrs. TORRES. Thank you, I appreciate your response.


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I also believe that the FTC plays a tremendously impor

protecting people from scams. I hear a lot from my con

how they invested, you know, hard-earned money, wh

thought was in a safe way, and later lost all of it becaus

a scam.

These scam artists target vulnerable people. They find a

veteran, a very young person, status family, and they lie 

their money.

If I use a credit card for one of these scams, most lik

able to get the money back, but if I use an ATM card, I 

be able to get any of that money back.

We know that both scams and hate crimes are under

often because the victim is afraid or ashamed that—or do

lieve that there is anyone out there, you know, who cares t

them.

The FTC actually, you know, doesn’t cost taxpayers a

The work that you do saves our taxpayers money. In lookin

cuts proposed by the Republican Congress majority, can 

a little bit about how that will impact day-to-day consum

are often targets of scams?

Ms. KHAN. So it is absolutely true, we receive huge am

complaints about ongoing fraud and scams. We receive a

million complaints a year. Around 4 million of those oftent

late to fraud in particular.

We have also seen particularly that fraud targeting elder

ple of color may be underreported, and so even the data 

derstate the degree to which these practices are ongoing.

It is absolutely true that the types of cuts that are be

posed would come at a serious expense of our being able 

hard to go after those practices, and also to critically 

money for consumers.

We have current rulemakings in place that would go aft

like imposter scams, or fake earnings claims that exagge

amount of money people can make, that make it easier 

get that money back, but some of these cuts would certai

at the expense of that work.

Mrs. TORRES. Thank you. I appreciate it and I yield back

Mr. WOMACK. Mr. Cloud.

Mr. CLOUD. Thanks for being here today. I wanted to ta

about a proposed rule about noncompetes. And I know it w

tioned in the State of the Union about noncompetes wit

chains.

I am not sure that is a huge deal, but some small busine

very concerned about the proposed rule in the sense of, yo

they want to be able to bring on new workers, they want 

on and be able to train people into a new career or profes

also do have the need to be able to protect their intellectu

erty, their business practices, and especially non-solicitatio

sense of having someone come in, study the business, l

business for 5 years and then, you know, go off start their 

call on their customers immediately.

You know, we are all for fair competition in the marketp

if they want to build their own business and do whateve

the sense of using a business simply to abuse the privilege


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erything you learn at that business to undermine the very 

that taught you those things.

So could you speak to that and address those concerns 

you will take them into account?

Ms. KHAN. Yeah, we absolutely are interested in hear

small businesses. Our comment period on this proposed r

ally closed just last week, and we received around 26,0

ments, including from small businesses, and so, we are kee

closely at those comments and determine where to land.

Interestingly, we have also heard from small business

the ways that noncompetes can impede their ability to g

and expand.

So one thing that we have heard is that businesses th

been able to secure financing, that have been able to build 

and are looking to enter markets that are quite concentrat

ultimately realized that they are not able to access the n

workers because those workers are all locked up in noncom

Mr. CLOUD. But isn’t that a solution of the marketplace 

know, if a business is having a problem finding workers, t

behooves them to adjust their practices and how they addr

own noncompetes.

It doesn’t require a top-down approach to manipulate th

if that is the concern you are trying to address.

Ms. KHAN. So in instances where it is new businesses 

that don’t currently have the workers with the relevant 

it is really in their competitors’ interest to keep those 

locked up. And so I don’t think we have seen the type o

response we would.

One thing that our proposed rule asked was wheth

natives——

Mr. CLOUD. Businesses will generally respond to their 

tive interests. It doesn’t need the government intervening 

a business find its competitive edge.

Ms. KHAN. So one thing that we asked in the propose

whether alternatives to noncompetes, like tailored nond

agreements or trade secrets laws, can help account for som

concerns that you mentioned, and so that will be one are

we will be looking closely in the comment record.

Mr. CLOUD. Okay. Well, I would urge you to be very c

lot of States also regulate this on their own, and as we 

a Federal system, you know it is best left to States to mana

they can manage and then us to take on the rest.

One other issue I wanted to talk about is the concern, br

cern, bipartisan, on data collection, specifically, you know

really concerned with COVID and the data collection on kid

And, you know, many of the—I remember trying to log 

I had data protection on my kids’ computers and all those 

privacy protections on my kids’ computers and everything. 

erally to log on to one of the educational apps, I had to t

password 50 times just to get them into what they need

for the couple weeks, you know, they were distance learnin

I am curious as to what you are doing to look into thes

nies—a lot of these parental applications seemed designed 


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yers, not really for the benefit of the kid or the parent—a

we can do to protect those kids.

And also, I think one of the things, when we talk about 

vacy, is, we kind of assume that the data is owned by the 

as opposed to the person who is creating the data, and wh

not this should be addressed as almost a property rights 

where if you are creating the data, it is your data, it is yo

mation, as to whether or not we should even not accept the 

of the question, and whether or not we should look at this 

the individual has more rights in this space.

Ms. KHAN. Yeah, it is a really interesting question, and 

some of the proposals that Congress is considering to furth

protections in this area would hopefully address that. For u

FTC, we are working hard to protect children’s data, incl

the EdTech context that you mentioned.

Early in my tenure, we put out a policy statement, 

EdTech providers on notice, that they are not permitt

under existing children’s privacy law, to require that kids, 

parents, surrender to endless data collection in order to u

critical technologies because I saw——

Mr. CLOUD. And it is also just the pragmatics of, you k

a parent, they almost get in the choice of, I get to try to 

to this Byzantine process that protects the company and 

yers, and the Big Tech company or software company 

Look, we have these protections.

But they are so impractical to use that the parent is act

ting there with their kid and like, Okay, I either have to o

up so they can actually use this, or I can’t really practic

this tool. And that is kind of the choice sometimes paren

to have.

Ms. KHAN. That is exactly what we have seen, and that 

we put EdTech providers on notice that even under exist

they can’t require parents to just surrender to endless da

tion because we saw, absolutely, especially during the p

when overnight, kids were having to use these apps to 

homework, those privacy concerns really went off the chart

We also recently brought an enforcement action agai

Games for engaging these practices that were really putt

data—exposing kids’ data and leading to all sorts of very t

practices. So this is a big area of focus for us.

Mr. CLOUD. Thank you.

Mr. WOMACK. Mr. Bishop.

Mr. BISHOP. Thank you very much, Mr. Chairman, and 

Ms. Khan. Thank you for the courtesy call we had earlie

week.

The FTC is an independent agency with two major respo

areas, of course one of which is the promoting competition 

ity which administers the pre-merger notification program

proposed mergers and acquisitions, and enforces the antitr

along with the DOJ.

You also have the responsibility of protecting consumer

tigating unfair and deceptive acts or practices that aff

merce.


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In December of last year, the FTC issued an administrat

plaint to block the merger of Microsoft and Activision Blizz

of the large U.S. video game companies.

And I understand that FTC has opposed the Microsoft 

tion of Activision, which the U.K.’s competition regul

nounced yesterday they would block.

Microsoft and Activision have said that they will appe

course, the European Union Commission has not yet ruled

der if this whole process is losing sight of a more importa

which is U.S. competitiveness in the global marketplace.

American jobs depend on American global competitiven

as I understand it, Sony dominates gaming, and blocking 

seems virtually certain to ensure that Sony will dominate 

to come.

Surely there has to be some room for a more pragmatic a

that allows the benefits of the deal while simultaneously p

competition.

I understand that you can’t discuss the details of the M

Activision merger, but I am interested to understand how 

rect your staff to approach merger remedies.

Am I correct that the FTC takes into account a transact

tential to promote or to restrict competition against foreig

and to foster fair and equitable economic opportunity fo

cans?

Ms. KHAN. It is an important question, and I think his

what we have seen, is that strong, robust competition dom

has been what has best positioned America on the inter

front.

Historically, we saw that, you know, when other compan

doubling down on protecting their national champions, the 

stead took a different route, be it with AT&T or IBM. And 

taking strong antitrust enforcement in those contexts wa

for unleashing innovation, including the multi trillion-do

ware industry that we have.

So stepping back, we have seen how strong competition 

cally is best positioning us for competition internationally 

ly key to promoting innovation.

Mr. BISHOP. Well, that merger would probably limit com

domestically if you block it.

Let me move on to another area, and that is the pharm

efit managers. I have been hearing from my constituents n

complaints about the practices of pharmacy benefit m

which they say drive up the prices of drugs, are making i

for the small, independent pharmacists to stay open, par

in rural areas where pharmacies are few and far between.

Last year, FTC announced it would look into the indu

the impact of the vertically integrated pharmacy benefit m

on the access and affordability of prescriptions drugs.

Can you let us know the status of this inquiry, and d

have sufficient resources to address what appears to be 

issue of affordability of prescriptions drugs? And can we, 

gress, help you with those resources?

Ms. KHAN. Yeah, this is a key initiative for us. Early in 

ure, we opened a public docket to hear about potentially un


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tract terms, and we heard an enormous amount from pha

as well as patients who suspect that the practices by the b

are depriving them of access to critical medicines.

So this study is underway. Candidly, additional resourc

be a big boon to us here. This is definitely one of the proje

if we were to ultimately get a cut in funding, could poten

compromised.

Mr. BISHOP. Thank you. My final question has to do w

petitiveness in the grocery and pharmacy business. You h

moted revival of the Robinson-Patman Act as a means of 

competitiveness in independent grocers and pharmacies.

And you know that it is an antitrust law preventing la

chises and chains from engaging in price discrimination 

small businesses.

If a wholesale supplier sells products to a franchise a

counted price not available to the smaller business, such 

ume price, well, they could in violation of the Robinson

Act.

Can you discuss how this tool might help our rural comm

which often rely on family-owned groceries and ph

forhousehold necessities? What kinds of challenges does F

in managing a law that hasn’t been enforced for more t

decades?

Ms. KHAN. It is a great question, and one of my top p

when I came into this job was making sure that the FTC 

enforcing all of the laws that Congress has charged us with 

istering. Robinson-Patman is one of these laws, it is on th

and so we take enforcing it very seriously.

We have certainly heard concerns from independent gr

particular, including those in rural areas, about how price 

nation, particularly by the big wholesalers or big retailers, 

coming at the expense of independents, and really leadin

deserts and exacerbating supply shortages that we are see

cially in rural areas.

So we take that very seriously. We have a terrific staff 

looking closely at what it would take to reactivate the R

Patman muscle, and we are hoping that we will be able 

some of that publicly in the coming months.

Mr. BISHOP. Thank you very much. My time is expired.

I thank you, Mr. Chairman.

Mr. WOMACK. Mr. Carl.

Mr. CARL. Thank you very much, Mr. Chairman.

Chair Khan, the proposed Motor Vehicle Dealers Trade 

tion Rule—that is a mouthful—is expected to cost over $

by the FTC’s own estimates, and these extra costs will li

up being paid for by the car buyers, as we all are fully a

Any time a government rules and regulations makes 

more expensive for the consumers, there are fewer people 

afford them. That is common sense, right?

I am also concerned with how this rule will affect the 

as a whole, including the distributors who play a uniqu

that difference from manufacturers and dealers.


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The question is, with all that said, have you taken all t

tors into consideration, and can you tell me how much 

posed rule will increase the price of a new car for consumer

Ms. KHAN. So that is certainly something that we take 

count when we are proposing these rules. We have to do a 

efit analysis, and the proposal we put out offers some of th

bers.

Stepping back, you know, this rule would really addr

and-switch tactics, and also hidden fees that ultimately en

flating the cost that consumers are paying for cars. So in o

making sure the companies are not able to engage in thes

fees and surprises fees would ultimately help consumers, i

by reducing the cost of the cars that they are paying.

As I said, this has been an ongoing proposal. We receive

comments, and so we are looking closely at them to determ

steps.

Mr. CARL. But the buyer does have a responsibility. They 

no and walk away. I mean, you are talking about the hid

I mean, that come out at some point, place, and time. We 

away from the deal.

I don’t see where the government getting involved in t

enforce this, and more regulations on top of regulations, co

consumer more money on the other end, is any better th

we have got now, I guess is what I am trying to get at.

Speaking of the price of vehicles, I am concerned about th

proposed rule that would increase the average, up-front c

electric vehicle by $1,400 in just a few years.

I am not at all against electric vehicles. In fact, I woul

buy one if it was more dependable for use in rural areas

little tough where I am at to have electric vehicles.

Although I have a huge problem with this administratio

to force ‘‘go electric’’ on everybody, despite the fact the 

price of an EV is already about $59,000 per vehicle.

These cars are already expensive enough, and now the B

ministration wants to make them even less affordable wi

more fees on top.

Is anyone at the administration looking at the bigger 

here regarding how these rules and regulations impact th

cans when buying a new car?

Ms. KHAN. So I can’t speak directly to some of the in

being taken by other agencies. I will say for the FTC, any

propose a rule or initiative, we are thinking about the 

benefits as well as the cost. So that is kind of baked into o

esses.

Mr. CARL. Well, I understand you are taking the same m

as most engineers I have had to work with. They want to 

just as tough as it possibly can, but when they get throu

it, nobody can afford it.

And I think that is where the Federal Government is g

just keep compiling all these rules and regulations on the 

of taking care of the consumer. In reality, we are just cr

nightmare here with our independent car companies.


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I live in a small town. I know—I knew, before I got in 

the owners of these companies. So it is my responsibility

go car shopping, to know their reputation.

So I think the Federal Government getting more and 

volved is wrong. I am just—I am being quite honest with y

And I appreciate your phone call yesterday, by the wa

you. I can’t get some of your other colleagues to even 

phone call, much less take the initiative to make one.

But I think we have got some real problems here. I do

this has been thought through. I think the car dealers a

to take the brunt of it, because they are going to be respon

that $1,400 price increase.

In reality, it is your department, not the car dealers the

And with that said, Chairman, I think my time is up. Th

Mr. WOMACK. Mr. Moolenaar.

Mr. MOOLENAAR. Thank you, Mr. Chairman.

Chair Khan, thank you for being with us today, appreci

testimony.

I received a copy of an article, Perspectives. It is an a

George S. Ford, who is a Ph.D. It is called, ‘‘An Agency i

Employee Satisfaction At the FTC Continues to Decline.’

it was recently released. Are you familiar with this articl

Ms. KHAN. Not specifically with that one, no.

Mr. MOOLENAAR. Okay. What it does is, it looks at the b

of your chairmanship. It says the FTC was the highest ra

eral agency on employee satisfaction.

It says, largely due to Chair Khan’s mismanagem

politicization of the once highly respected agency, surv

ducted by both the Office of Management and Budget 

places to work in the Federal Government rankings revea

employee satisfaction at the agency sharply declined in 

following her confirmation.

Are you familiar with those surveys at all?

Ms. KHAN. Yes, I am.

Mr. MOOLENAAR. Okay. I would just like to, with unanim

sent, ask that this could be read into the record.

Mr. WOMACK. Without objection.

[The information follows:]


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Mr. MOOLENAAR. Thank you.

Do you have any comments on that? Early on, you h

tioned maybe there were some rough steps at the initia

your chairmanship and that has been corrected, or how do 

dress these concerns?

Ms. KHAN. Yeah, absolutely. I take those concerns seriou

staff of the FTC is our greatest asset. We can’t, without 

any of this really important work. So since then, we ha

working closely to hear directly from staff about what w

to make it easier for them to do their jobs.

We have put in practice certain processes to be better at 

information with them more regularly, streamlining proc

decisions can be made more quickly, and so all of that is 

derway, and I think it is having results inside.

Mr. MOOLENAAR. Okay. Thank you.

I wanted to follow up on Representative Bishop’s questi

the Microsoft-Activision merger. What strikes me is, you 

multiple jurisdictions involved. I wonder if you or your staf

or have consulted with the U.K. Competition and Markets 

ity in something like this. Is that something you communic

them on?

Ms. KHAN. So as a general matter, we have information

and cooperation in place with authorities around the world

Actually, a lot of this work was initiated under my pre

Republican Chair Debbie Majoras, who launched our 

International Affairs, and has enabled the FTC to be a wo

er, both on the competition and consumer protection fronts

Mr. MOOLENAAR. So I would take that to mean you h

sulted with the British agency on that?

Ms. KHAN. As a general matter, we are in touch about co

investigations where our authorities allow for us to do so.

Mr. MOOLENAAR. Okay. So that is a yes, right?

Ms. KHAN. Yes. As a general matter, yes.

Mr. MOOLENAAR. Okay. All right. Thank you.

Do you get concerned that, you know, those jurisdiction

get clouded, and that their authority might supersede, and 

almost delegating authority to them?

Ms. KHAN. I am not worried about that, because at th

the day, every enforcer is making its own independent j

about how the laws of that jurisdiction apply to the fac

them.

The facts can vary, based on how a particular merger is 

one country versus another. As you noted, our laws and au

differ as well. And so, while we have information-sharing 

that is not coming at the expense of any enforcer making t

independent judgment and determination.

Mr. MOOLENAAR. Okay. Thank you. In July of 2022, y

asked by a bipartisan couple of Senators regarding TikT

had mentioned protecting children’s privacy is an importan

your mandate. Since that request in July, what has the FT

have you done relative to TikTok?

Ms. KHAN. So as you know, I can’t entirely share non-p

formation but would be happy to see what we can provid


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a non-public basis. As a general matter I will note that T

already under FTC order.

The FTC, before I even arrived, found that TikTok had 

in potentially unlawful practices, and so now, if they furthe

that order, that could lead to even more relief and remedie

Mr. MOOLENAAR. Okay.

Ms. KHAN. And so obviously we follow some of the new

very closely, and, again, happy to see what more we can 

on a non-public basis.

Mr. MOOLENAAR. Okay. And then just quickly, one of 

cerns, protecting older consumers, it seems that there is 

cant increase in investment scams, imposter scams, consum

ing a lot of money.

Shouldn’t your resources be devoted more to that fron

posed to some of the other areas you are involved?

Ms. KHAN. We absolutely have resources devoted to that

fact, what we have been doing is looking to make our enfo

on the fraud front more efficient. So by codifying some 

rules against, say, imposter scams, it means that we will 

to expedite how we can bring these enforcement actions a

ally return money back to the elder Americans that are b

frauded.

Mr. MOOLENAAR. Just one of the concerns raised was the 

of fraud was more than double the amount report lost in 2

amount in 2022, $3.8 billion was double the amount repo

in 2021. Are you familiar with that statistic?

Ms. KHAN. Not specifically. I will say, we did see a sur

in crypto fraud, as well as COVID-related fraud, over the 

years.

Mr. MOOLENAAR. Thank you, Mr. Chairman. I yield back

Thank you.

Mr. WOMACK. Mr. Joyce.

Mr. JOYCE. Thank you, Chair. Madam Chair, your bu

quest includes a $90 million increase for actions relating 

moting competition. However, I have concerns how the Com

would deploy these resources.

For example, the FTC has undertaken a multiyear effort 

the Illumina-Grail acquisition, even after its chief admin

law judge issued an opinion that this acquisition would 

competition, following an extensive trial on the merits.

FTC’s actions to block this merger are delaying technol

could save lives in pursuit of a speculative antitrust the

lack legal support.

What assurance do we have that the Commission will 

balance the need to promote competition with the need t

innovative companies from speculative antitrust litigat

delays important technologies from reaching the public?

Ms. KHAN. So, look, we enforce the laws that Congress h

us. Congress has noted that competition is critical to a 

economy and best promotes innovation. And so whenever 

a deal before us, we just see how a law applies in that cont

I think historically we have seen that innovation is b

moted by actually allowing more robust competition, and th

assertive on the merger front and merger enforcement f


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best enable new technologies and new innovations to com

market.

Mr. JOYCE. If no one else is in the space and it is savi

and it is 5 to 7 years before you are actually going to get 

else to be in competition with it, how is that anticompetitiv

Ms. KHAN. Yeah, this proceeding is ongoing, so I am no

speak publicly on it, but I will say that the Commission i

opinion a few weeks ago that lays out in full our reasoning

ing on some of these innovation topics.

Mr. JOYCE. Your request includes an increase of 300 

equivalents for fiscal year 2024. Part of the justification fo

crease is the need for additional staff to further your re

agenda.

I believe it is critically important for every Federal re

agency to develop regulations that are clear and durab

harmful to our economy and the American people when reg

are poorly developed and their impacts are not accurate

ated ahead of time.

The FTC is pursuing an extremely active regulatory ag

you believe the regulations that the Commission is develo

thoughtful in design?

Ms. KHAN. Yes.

Mr. JOYCE. And durable?

Ms. KHAN. Yes.

Mr. JOYCE. If the Commission’s goal is to create last

FTC regulation I have heard from many of my constituen

Motor Vehicle Dealers Trade Regulation Rule, also called 

shopping law.

Concerns have been raised to me regarding the substan

regulation, but also process by which it was developed. If t

mission’s goal is to create lasting and impactful regulation, 

the Commission deny the request to extend the comment p

this rule, especially because there was no opportunity to 

feedback from stakeholders through an Advanced Notice 

posed Rulemaking or Request for Information process?

Ms. KHAN. So we closely followed the process that is 

under the Administrative Procedure Act. That includes pu

a proposed rule and leaving an open comment period wher

can give us input.

We have now received somewhere between 10,000 an

comments. So I have full confidence that this is a robust 

and we are really getting all the input that we need here.

Mr. JOYCE. Have there been any instances under your te

Commission has extended a comment period?

Ms. KHAN. Yes.

Mr. JOYCE. I have also heard from constituents that th

lack of clarity regarding the assumption that, as a resul

regulation, customers will spend 3 fewer hours shopping 

new vehicle.

Could you provide us with additional background and an

how the Commission developed this 3-hour figure used in 

to help assess its cost and benefits?

Ms. KHAN. Yeah. So the proposed rules lays out that an

in-house economists who do fantastic work. Because this 


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posal, we actually include in some of our questions requ

feedback on some of the assumptions that are made, incl

that topic. So I am hopeful that some of the comments we 

ceived will give us more insight on that.

Mr. JOYCE. I appreciate the work that the FTC is 

strengthen the ‘‘right to repair’’ policies. Unfortunately

have indicated the price of auto repairs have increased m

14 percent since January of 2023. What more can Congre

help strengthen these protections for consumers?

Ms. KHAN. I am so glad you mentioned this because ‘‘rig

pair’’ is a big priority for us. Shortly after I joined, the Com

unanimously issued a policy statement recommitting our r

to fight unlawful restrictions on repair. We brought a who

of enforcement actions in this area, and more work is un

Clearly, any time that Congress is legislating to prov

clearer instruction and clearer direction about how these r

strictions may be unlawful, that will always boost our abil

after them.

We do existingly have authority that allows us to addre

practices, but any clarity from Congress would be useful.

Mr. JOYCE. Thank you.

I yield back, Mr. Chairman.

Mr. WOMACK. Mr. Amodei.

Mr. AMODEI. Thanks, Mr. Chairman.

Hi, Madam Chair. Thank you for reaching out the oth

appreciate that.

You know, this kind of came up in a little bit of w

Moolenaar said, and we spoke the other day about follo

some requests from committee members on, you know, th

related to actions that your agency has taken.

And so, I kind of like, when I am listening to your d

with Mr. Moolenaar, and you talk about, Hey, we would li

what we can provide you in response to him, public versus 

When you say to a member of any committee exercising 

sight function, we would like to see and get back to you, 

put some more meat on those bones? What exactly does th

or, for instance, what are you going to do in response 

Moolenaar to see what you can provide for the inform

asked you?

Like, I am going to talk to this person, we are going to w

let me give you a time frame. Can we put some specificity 

Ms. KHAN. Yeah, happy to. So whenever that type of e

happens, our terrific staff then make contact with either co

staff or the staff of the Member and engage in a discussion

Oftentimes we are able to, at minimum, offer a non-pub

ing to bring members up to speed about what we are 

House. If we are also then able to share some paper, we 

as well, but, absolutely, there is always follow-up.

Mr. AMODEI. Okay. And then the last part of that is, g

speaking, what parameters do you put on that? Like, is t

week, is that next month, is that 90 days?

I know it depends on the request, but since Mr. Moolena

guinea pig, when do you expect to get back to Mr. Moolena

Ms. KHAN. We will endeavor to do it as quickly as we can


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Mr. AMODEI. So——

Ms. KHAN. At the very least, our staff will make sure th

out to you in the next couple of days and see what more 

provide you.

Mr. AMODEI. Thank you.

Now I would like to go back to our conversation where y

asked by Mr. Duncan, I believe it is about a letter that you

zation sent to the U.S. Trade Commission about an issue 

ever.

And so, I had checked back with him today and said, H

you heard anything? And he had indicated to me—we hap

be in the same location yesterday about 4:30, you know, v

birthday card salutations and stuff like that—and I said, H

you heard back from those guys yet? And he had indicated 

hadn’t.

And so—and I took the liberty of getting the transcrip

exchange or whatever, and your response was, Happy to 

with your staff to see what we can share with you. Have 

gaged with his staff to see what you can share with him?

Ms. KHAN. My understanding is that, yes, our staff has 

touch with them about the request that they made and——

Mr. AMODEI. And who would that be on your staff, when 

back to Mr. Duncan, that he is unaware of what is going 

office—which doesn’t make him unique—me included—wh

I tell him—it is, like, Well, according to our hearing to

chair said that John Smith has been in contact with someb

answers the phone in your neighborhood?

Ms. KHAN. Yeah. It is the Office of Congressional Rela

the FTC which is headed up by Jeanne Bumpus.

Mr. AMODEI. Okay. Great. And then one last thing is, I h

independent insurance agents in my office recently. Th

talking about the anti-competition rule and so—or the——

Mrs. HINSON. Noncompete.

Mr. AMODEI. Yeah, thanks for that help.

And can you get me some blogs on who is calling who, to

can keep track of that?

And so my concern is this. There are instances when non

agreements are appropriate. It starts to sound, though, li

take a broad brush on that and just say they are nasty thi

top to bottom, in between, everything else, that we are 

have some unintended consequences.

And so I would like somebody from your Office of Cong

Relations to get a hold of us to give a briefing on, Hey, are 

ing at where the problem areas are, instead of one-size-fits

I am concerned about, so it is real clear, I don’t want to 

one-size-fits-all if there is not a problem that needs fixing

aren’t victims in certain areas where actually these may b

and by the way, if they are not, then there is also nothin

with, you know, your training and other folks in this roo

like, Hey, sometimes you got to go see somebody in th

branch, which is the judicial branch to see what is appropr

We don’t want to encourage that any more than we nee

I want to make sure that we don’t start out on the prem

they are all bad.


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Who would be the person that we would like to hear 

terms of the scope of what that is all about?

Ms. KHAN. Yeah. We are happy to have our Office of 

sional Relations follow up. I will say, our proposed rule la

very comprehensive review of the available empirical liter

understand what the effects of these noncompetes have bee

are now affecting not just high-wage workers, but also l

workers.

We have also seen that over the last couple of decades, 

States have gone into different directions with this, and as 

we now have effectively a natural experiment on the nation

which has allowed researchers to study and isolate what 

effects of noncompetes.

What they have found is that even when these noncomp

applied in, say, States that have prohibited them or limit

they are still being applied at a very high rate—companie

abiding by that—and that there can also be significant e

innovation and new business formation. So that is why we 

that at this stage it was important for us to address those 

across the board.

Mr. AMODEI. Well, then let me help you. My time is e

want to hear specifically about problems in the insurance 

where books of business and things like that, I want to kno

victims, and I want to know about why this area needs so

in that area.

Thank you, Mr. Chairman.

Mr. WOMACK. Mr. Ciscomani.

Mr. CISCOMANI. Thank you, Mr. Chairman, and thank 

Chair Khan, for coming before the committee to testify.

From my fresh perspective here on the committee and 

gress, it seems clear to me that the FTC has two distinc

lated missions; first, to protect consumers, and secondly, to 

competition as well.

One of the most important constituencies in my dist

needs protection is that of our more than 200,000 senior

have in my district. And many of my constituents have com

of signing up for the Do Not Call Registry, but still receivin

calls.

I understand this is likely because scammers don’t car

on this registry or not. So my question is going to be aro

area and actually following up to one of my colleague’s co

on this.

Can you speak to the efficiency of the registry, specif

stopping criminals and scammers?

Ms. KHAN. Yeah, it is a great question. And one of 

sources of consumer complaints that we get are about robo

unwanted calls. As you noted, there is a Do Not Call Regi

what we have seen is that companies engage in spoofing, t

cally conceals where they are calling from, and they are 

evade some of those processes that we have in place.

Nonetheless, we have been bringing enforcement actions

ing, recently, enforcement actions against VoIP service p

which are the upstream providers that can, in some insta

able millions and millions of robocalls.


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So what we have seen is that rather than just go after t

by-night scammers and fraudsters that are doing the cal

after the providers that are enabling this activity to con

more effective, and so that is what we have been doing.

Mr. CISCOMANI. Can you speak to that, how effective it h

Have you seen data of this getting better or not? I keep 

about this issue from my constituents, so I would like to s

trending in the right direction, or are we seeing any resu

those actions yet?

Ms. KHAN. Yeah. Based on the data that we have, we h

around a 19 percent reduction in the complaints that are 

in. So that, to us, suggests that there is some impact here

course, it is possible that data isn’t fully reflecting what 

pening, but that is what we are seeing in the numbers.

Mr. CISCOMANI. Okay. And how long did you start apply

How long of a process has that been in place, of that action

Ms. KHAN. Of these enforcement actions?

Mr. CISCOMANI. Uh-huh, those enforcement actions.

Ms. KHAN. I mean, the FTC has been active in this spa

least the last two decades. You know, the Do Not Call Regi

put in place in the early 2000s.

Mr. CISCOMANI. No, but I mean the registry is there, 

we are finding problems with it. And what I am trying 

is, what more can we be doing if this 19 percent decrea

long has that action been happening, because, again, I ke

ing about it from my constituents. So I am not sure if it 

moving the needle in this sense.

And if that is all that is being done, has done for a ye

years, I am trying to get a sense of when that interven

happened.

The registry itself, on its own, doesn’t do the job comp

think we can agree on that—because scammers don’t care, 

just going to continue to call.

So what I was asking is, what else, on top of the reg

what other methods of enforcing the registry—and your 

was what it was. So my question following up to that is, h

have you been doing that part of it, to see the 19 percent d

Because I am just not seeing, anecdotally at least, I am no

that feedback.

Ms. KHAN. Yeah, so the efforts to go after some of the V

ice providers have been in place for the last few years, a

lieve that is the same period over which we have seen som

decrease.

I will note this is also an area where we share jurisdict

the Federal Communications Commission that is also able 

some of these practices that are outside of our jurisdiction.

Mr. CISCOMANI. You know, it seems, in several areas 

definitely being one of them, that we are kind of playing 

with the criminals and the people committing fraud on th

they seem to have a leg up on us, and specifically in the 

area.

Consumer protection should continue to be an important 

and one that is not pushed aside while the FTC goes after 

is bad’’ antitrust work.


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You know, the fiscal year 2023 funding for protecting co

was above promoting competition, but in your fiscal year 

quest, this is reversed. Is there a trend that we should con

expect on this?

Ms. KHAN. So the main motivation here is to make sure 

competition mandate is better resourced because the com

enforcement actions require more people, and they requ

money because the experts are more expensive.

So that is really what is motivating some of that uneven

currently, our Bureau of Consumer Protection is alread

than our Bureau of Competition, and even the increases 

would be making would fully equip us to be active in this a

Mr. CISCOMANI. Well, thank you. My time is up, but I 

just strongly encourage you to please continue to keep th

tion side of it, specifically for seniors, as a top priority and 

to look into ways to make the registry more effective.

Thank you. I yield back, sir.

Mr. WOMACK. Thank you, Mr. Ciscomani.

We have—I want to be respectful of the chairwoman’s t

we have time maybe for another question per member. I 

going to put the timer on it, but just let everybody know 

are going to go back around on round 2 and give everybod

portunity to ask another question, and I will lead.

I mentioned earlier the concerns about the independen

tisan Commission operating under one party right now, 

have already indicated that you are ready and willing an

welcome a couple of new members when nominated.

Can you help me understand, have there been any 

learned when you are operating specifically with one-pa

Are there lessons that can be taken that will help you, 

Commission, help our country, when you do get new part

to the Commission?

Ms. KHAN. Well, I will say as a general matter, you k

Commission is governed by what is known as the Suns

which can limit, especially when you just have three mem

ability for commissioners to talk directly to one another. S

just day-to-day a handicap that we are facing right now.

More generally, I think we have seen, including from t

mittee, strong bipartisan concern about some of the mon

practices in our economy, some of the unfair practices, espe

it relates to data privacy and protection.

So I am hopeful that once we get new members, we wil

to continue our strong work in both of these areas.

Mr. WOMACK. Mr. Pocan.

Mr. POCAN. Thank you, Mr. Chairman.

Just a follow-up from a question I believe I asked you 

around defense contractors. We know in 1990, Departmen

fense could turn to 13 different contractors for tactical 

eight to make fixed-wing aircraft, another eight to bui

Today, there is three missile and three aircraft makers 

two surface shipbuilders.

Similarly, there were eight satellite manufacturers 

Today there is four. I know that we have talked about t

in trying to bring sense to it. So I am just wondering if 


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just give us an update on this particular area, and specifi

the DOD continued to supply all the relevant information 

Commission has needed to work on this?

Ms. KHAN. Yeah, it is a great question, and I think we h

public statements from DOD indicating that the degree of 

dation that we have seen, that you just mentioned, is actu

ing impairing and undermining our national security.

We have seen also reporting more recently suggesting 

consolidation is impairing the war effort in Ukraine.

Just this morning there was actually an article in T

Street Journal also noting how the consolidation has mean

some cases, DOD is just dependent on a single factory, a

you have one outage, the effects can be devastating.

More generally, you know, we were able to sue to blo

heed’s attempted acquisition of Aerojet last year. We were 

that the parties ended up walking away. DOD was a terr

ner in that instance.

I know you have raised concern about some of the prior 

dation more generally. I will just say as a general matter, 

for us to be able to unwind some of those acquisitions, w

end up being very dependent on any representations fro

since they are the main customer in those cases.

Mr. POCAN. Great.

Thank you, Mr. Chair.

Mr. WOMACK. Mrs. Hinson.

Mrs. HINSON. Thank you, Mr. Chair.

I want to quick, Madam Chair, point to something in th

tor General’s report that was brought up specifically a

Commission’s use of unpaid consultants and outside expert

According to the Inspector General’s report, there are ma

where this approaches the proximity of policy function tha

posed to be reserved for Federal employees only.

So my concern is over scope. So what guidance is in plac

to make sure that that scope of work done by nongovernm

sultants is there, and what guardrails are in place to ens

they are not conducting work that should be done by gov

employees?

Ms. KHAN. Yeah. So the IG report was helpful in unde

some of the process improvements that we could have in 

be better guarding for that.

Since that IG report came out, we have taken steps to m

that, you know, when the experts are coming on board, th

work that we are putting in place is clearly identifying w

are able to work on, who they will be reporting to. And so

recommendations that the IG made in that report have 

lowed.

Mrs. HINSON. Right. If you would give us some example

you have done that in practical application, I would certa

preciate that.

Ms. KHAN. Sure. Happy to.

Mrs. HINSON. Thank you.

Mr. WOMACK. Mr. Carl.

Mr. CARL. Thank you. I was going to say——

Mr. CLOUD. Go, go.


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Mr. WOMACK. I was under the——

Mr. CLOUD. Yeah, no, I know.

Mr. WOMACK. I was under the impression Mr. Cloud did 

a second question.

Mr. CLOUD. I do now.

Mr. WOMACK. You do. Well, Mr. Cloud, you are recognize

Mr. CLOUD. I wanted to touch on something that the 

sioner had—you talked about us wanting to protect mon

practices in the economy. We are also concerned about th

FTC at the moment under one-party rule, and especially if 

not able to work or talk with other commissioners, then 

comes down to you on a lot of these matters.

In 2020, there was a Federal employee viewpoint surve

FTC employees are asked basically in the integrity, if they 

the integrity and operations, if they think that their high-l

cials are working with integrity. And it was at 87 percent 

and right now, it is at 49 percent.

Now, you mentioned some early mistakes coming in. I am 

the inside to know what it is. I would certainly like to kn

you think that drop has happened, what lessons have you 

from it, what changes you are making, and what we can 

store the trust in the FTC.

Ms. KHAN. Yeah. As I said, you know, I am enormous

of our staff. Day in, day out, they are going up against som

most powerful companies in our economy. They are sign

out-resourced by the other side.

After looking at those results and working closely to un

from our staff, you know, what was driving it, we have b

to put in place better processes to share information mor

across the agency, streamline processes for decision mak

identify some other ways in which we can make it easie

FTC staff to do their jobs.

Mr. CLOUD. And they had an issue with integrity as w

sounded like a nice, well-worded answer, but it didn’t pro

details. Can you provide some details of lessons learned a

you are doing to change the culture?

Ms. KHAN. Yeah. As I mentioned, you know, one of th

that came up was just making sure that we were sharing 

tion more widely across the agency. We have been doing 

now have regular meetings with the senior staff, make s

information is being shared broadly.

There were also concerns about delays in decision makin

put in place more streamlined processes that are expedit

Mr. CLOUD. Thank you.

Mr. WOMACK. Mr. Carl.

Mr. CARL. Thank you, Chairman.

The FTC has clearly taken an interest in franchising 

unique American business model. In Alabama alone, 

12,000 franchisees, and it is very important to our local e

I understand FTC is reviewing the franchise rules. Tha

last fall, we sent a letter, 67 of us and our colleagues, sent 

asking the Commission to do no harm to extend the FTC f

rules.


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Recently, the Commission stated it has growing concern 

unfair and despicable practices in franchise industry. Can 

me evidence of that?

Ms. KHAN. So we recently launched a request for inf

that was responding to the fact that at our open public Com

meetings which I mentioned earlier, month after month, 

been hearing from franchisees, this includes owners of hot

ers of fast-food franchises, and they have raised a set of 

that are quite troubling.

So we launched this effort to make sure that we were 

hearing anecdotally but actually were able to systemical

are there issues in this industry that really should be on ou

Mr. CARL. Can you provide me with those facts and that 

tion?

Ms. KHAN. Sure. Some of what we have heard about, f

ple, are instances——

Mr. CARL. In writing. In writing.

Ms. KHAN. Sure. Happy to.

Mr. CARL. I understand you are trying to explain it, but 

love to see those numbers in writing, because if it is 10 

mean, it is a big country. You know, if it is 12 into 1,500, w

really have a problem.

I just have a feeling that it is a very small issue that we 

ing to get involved in, and I promise you, I have started 

different companies, and the government has never helped 

a company. I have always had to work against the governm

So the Federal Government saying we are trying to help 

the truth. It is not the truth.

Thank you for your time.

Thank you, Mr. Chairman.

Mr. WOMACK. Mr. Moolenaar.

Mr. MOOLENAAR. Thank you, Mr. Chairman. I want to th

Chair Khan for your prompt response based on Mr. Amod

efforts.

So one area that I want to ask you for a prompt respo

Select Committee on the Weaponization of the Federal 

ment, and previous FTC Commissioner Wilson, and countl

sources have said the FTC has abused its statutory and 

ment authorities.

Chairman Jordan issued a subpoena to the FTC. My qu

what is your timeline for complying with that subpoena, o

not intend to comply?

Ms. KHAN. So we have been in touch with the House J

Committee about their various requests. In some cases, we 

ready handed over significant documents to them. I believe 

in response to their subpoena, just sent over a letter y

morning. So the back-and-forth between our staff and t

mittee staff are ongoing.

Mr. MOOLENAAR. Is there a time that you feel you will 

compliant with their request?

Ms. KHAN. Their request is quite extensive, so I would

to prejudge that ahead of time, but, you know, I think 

sional oversight is important, and our staff is fully comm

complying and engaging with the committee where we can.


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Mr. MOOLENAAR. So just in line, like Mr. Amodei said

have, like, how soon are we talking here?

Ms. KHAN. So I know that we have already repeatedly of

committee non-public briefings to get them up to speed. T

mittee has not taken us up on that, so we are still waiting 

to actually get back to us on that.

Mr. MOOLENAAR. And could you update us with that? W

have complied, will you let us know?

Ms. KHAN. Sure. Happy to. As I said, we have made ce

formation available to the committee that they have not y

us up on. So if and when they do, we are happy to let y

about that as well.

Mr. MOOLENAAR. Okay. Thank you.

Ms. KHAN. Great.

Mr. WOMACK. Mr. Ciscomani, bring us home.

Mr. CISCOMANI. I will do that with just a quick simple 

here.

Can you walk the subcommittee through the coordinat

takes place between the FTC and the Department of Just

it comes to the antitrust actions, please?

Ms. KHAN. Happy to. So we share, with the Justice Dep

oversight of certain antitrust laws. That includes the Sher

and the Clayton Act. In those areas, we basically divide 

quer.

So there are some industries where the FTC has historic

tise, like the defense industries or hospitals. There are 

stances where DOJ has expertise, like airlines. And so 

areas we really divide and conquer.

There are additional authorities that the FTC has that 

doesn’t. So our statute prohibits unfair methods of com

under section 5 of the FTC Act, so we enforce that, DOJ 

DOJ, unlike the FTC, also has criminal antitrust autho

they are able to use those in ways that we are not.

Mr. CISCOMANI. Thank you.

Yield back, sir.

Mr. WOMACK. Very good.

Mr. Pocan, any final thoughts?

Mr. POCAN. Just it was nice to fill in for Mr. Hoyer, so th

very much.

Mr. WOMACK. Give him our regards.

That is going to conclude our subcommittee hearing toda

Chair Khan, I speak on behalf of this entire subcommit

the members on both sides of the aisle, in thanking you 

knowledging the fact that you are very accessible and re

Now, there may be some questions about timelines on 

the Requests for Information, but in terms of being able 

interaction with the chairwoman on matters of importanc

FTC, I want to thank you for your willingness to engage 

the members that are up here today.

I think I would also be remiss if I didn’t congratulate 

licly on the birth of that bouncing baby boy. I take it h

bouncing around and getting a—giving you a good 8 hours 

every night, but that said, we won’t press on that particul


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It goes without saying that the appropriations process i

way. There will be some fits and starts as we go. I think e

pretty well understands that, and we do look forward to 

with you and your team as we complete the process for fi

2024. And prayerfully, hopefully, we can get this done on 

basis, but thank you today for your time.

Ms. KHAN. Thanks so much, and as always really keen t

with you all, so please don’t hesitate to be in touch if we 

in any way.

Mr. WOMACK. With that, this subcommittee hearing st

journed.


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rfrederick on LAP8M 3W LY3PRO D w ith H EARING
WITNESSES 

Gensler, Hon. Gary, Chair, U.S. Securities and Exchange Commission ....

Prepared statement .................................................................................

Answers to submitted questions .............................................................

Khan, Hon. Lina, Chair, Federal Trade Commission ..................................

Prepared statement .................................................................................

Answers to submitted questions .............................................................

Yellen, Hon. Janet, Secretary, Department of the Treasury ......................

Prepared statement .................................................................................

Answers to submitted questions .............................................................

Young, Hon. Shalanda, Director, Office of Management and Budget ........

Prepared statement .................................................................................

Answers to submitted questions .............................................................

(i)