The Annual Testimony of the Secretary of Treasury on the State of the International Financial System

Committee on Banking and Currency

2025-05-07

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Source: Congress.gov

Summary

The meeting was a House Committee on Financial Services hearing where Treasury Secretary Scott Bessent testified on various aspects of U.S. economic policy and international finance. The discussions covered concerns regarding Treasury system security, trade policies including tariffs, the future of financial regulations, and international financial relations, frequently highlighting partisan disagreements on the administration's approach.

Themes

  • Treasury Systems and Security Representative Maxine Waters raised serious questions about unauthorized access to Treasury and CFPB computer systems by individuals associated with Elon Musk, specifically inquiring about their clearances and the nature of their access. Secretary Bessent clarified that only two Treasury employees were granted "read-only" access and asserted that no unauthorized persons or Doge employees were involved.[ 00:03:02 ] The issue resurfaced later with Representative Sean Casten, who cited New York Times reports contradicting Bessent's claims regarding "read/write" access and the departure of an official, David Lebrick. Bessent vehemently denied the accuracy of these reports, stating Lebrick resigned and that the role of the individual in question, Tom Krause, was for a "tech upgrade" rather than managing the payment system.[ 02:00:28 ]

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  • Trade Policy and Tariffs Discussions on trade policy were central, with Representative Nydia Velázquez pressing Secretary Bessent for details on ongoing tariff negotiations, which Bessent largely declined to reveal to protect U.S. interests. Republican members like Pete A. Sessions voiced support for President Trump's tariffs, framing them as a necessary measure against unfair Chinese trade practices that have reportedly led to American job growth.[ 00:31:22-00:31:30 ]

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     Conversely, several Democratic members expressed strong opposition, with Representative Sean Casten highlighting the burden of tariffs on rebuilding efforts after natural disasters and increasing costs for essential baby products, for which Bessent noted exemptions were "under consideration." Representative Ritchie John Torres critically argued that tariffs constitute excessive taxation on American manufacturing, weakening competitiveness and driving up inflation, while Bessent maintained that tariffs aim to bring strategic industries back to the U.S.

  • Financial Regulations and Institutions The committee addressed the functioning and regulation of various financial institutions. Representative Frank D. Lucas inquired about Treasury market stability, tools to address volatility, and reforms to regulations like the supplemental leverage ratio, to which Bessent outlined ongoing measures like buyback programs. The future of Community Development Financial Institutions (CDFIs) was debated, with Representative Al Green expressing concern over proposed budget cuts and challenging the administration's stance on their role, despite Bessent's affirmation of their statutory functions and a new award program. Regulatory oversight was also a key theme, with Representative Mr. Scott questioning the vacancy in the FDIC chairmanship and calling for regulatory independence. Secretary Bessent defended acting appointments and assured that candidates were being reviewed, while Representative Daniel Meuser praised Bessent's efforts to streamline beneficial ownership reporting for small businesses and refocus bank supervision away from ideological concerns.[ 01:24:53 ]

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  • International Financial Relations and Geopolitics Several members raised issues concerning the U.S. role in international finance and geopolitical stability. Representative Bill Huizenga emphasized the need for stronger sanctions against Myanmar's military junta and U.S. leadership in digital assets. Discussions included China's "debt trap diplomacy," its influence in international financial institutions like the IMF, and its involvement in money laundering and fentanyl trade with Mexican cartels.[ 01:36:28 ]

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     Secretary Bessent announced upcoming actions against Chinese entities linked to fentanyl and advocated for China to graduate from "developing country" status.[ 01:34:58 ]

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     Concerns were also voiced about Iran's oil sales funding terrorism, the EU's Corporate Sustainability Due Diligence Directive, and Russia's fossil fuel revenues, with Bessent discussing sanctions and promoting "back to basics" for multilateral development banks. Representative Stephen F. Lynch raised alarms about senior officials discussing classified military plans on non-secure apps.

Tone of the Meeting

The meeting's tone was predominantly contentious and highly polarized along party lines. Democratic members frequently interrupted Secretary Bessent, pushed for "yes or no" answers, and accused him of filibustering or being evasive, particularly on sensitive topics like Treasury system access, tariffs, and social programs.[ 00:03:18 ] In contrast, Republican members generally offered commendation, expressed support for the administration's policies, and provided opportunities for Bessent to elaborate on his positions.[ 00:04:54-00:04:54 ]

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 The exchanges were often sharp and accusatory, reflecting deep partisan divides on economic strategy and governance, although some members did express appreciation for the Secretary's presence and efforts.[ 00:37:31 ]

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Participants

Transcript

under your leadership and only received a couple of cursory replies from your staff.  Why don't you respond?
T
The Honorable Scott Bessent
Ma'am?
I guess you don't know why you didn't respond.  Secretary Benson, you worked in finance before, right?  You will find bipartisan support on this committee for small businesses and the institutions that finance them.  I worked with Trump's first treasury secretary to pass $12 billion in support for community development, financial institutions, and minority banks and credit unions.  So I was surprised.   when Trump first tried to eliminate the CDFIs, but it caught you by surprise also.  You said that the CDFI fund plays an important role in expanding financial access.  Unfortunately, you were not very persuasive last week.  Trump proposed to basically cut all CDFI funding.   Let's discuss your job before coming secretary.  Your hedge fund had a secret sauce for how you would make money for investors, a proprietary trading strategy.  As CEO, you guarded that strategy.  You never allowed unrelated persons to access your firm's computer records, data, personnel files, and algorithms, right?  And I'm sure you wouldn't have allowed just anyone unfettered   access to copy, change, or to use those records, right?  I suspect not.  And that makes good sense.  What doesn't make good sense is why, as Treasury Secretary and acting CFPB Director, you would allow those unfettered access   to the government system that handles trillions of dollars in payments, to the proprietary business records of entities regulated by the CFPB, or most alarmingly, to the tax records of hundreds of millions of Americans.  But you still threw up the gates of our finance system open to Elon Musk and his band of 22-year-olds.
Yes or no, do you know the level, type, or nature of the clearances and security training required for individuals to access the information held in the computers of Treasury, IRS, or CFPB?
T
The Honorable Scott Bessent
Yes, I do.  And I think we would have a disagreement over the definition of the word unfettered.
Mr. Secretary, did all the individuals working with Doge who were given access to Treasuries and CFPB's computer databases receive all of the required clearances and security training before they were granted access?
T
The Honorable Scott Bessent
Again, they were granted read only access at Treasury.  There were two.  So let me just say those employees.
You can't filibuster here.  This is not the filibuster playground.  And so what you did was you let these strangers into our treasury with access to all of the data, all of the personnel information, and you just open the door.  Why did you do that?
T
The Honorable Scott Bessent
No, ma'am.  They were Treasury employees.
Are you saying today in front of this committee that all of them were Treasury employees, that the 25-year-old who's being identified, who worked for Elon Musk, was allowed into the Treasury?  Was that person there?
T
The Honorable Scott Bessent
He was a Treasury employee, as was Tom Krause, the senior person on the Doge team.  There were only two people.
There were Doge employees also.  Do you know, were you aware that there were Doge employees coming into our Treasury, getting all of our personal information?
T
The Honorable Scott Bessent
Ma'am, there is no such thing as a Doge employee.  There were Treasury employees.
I tend to disagree with you based on the information I have.  Has any information been downloaded by anyone working with Doge from any of Treasury's or CFPB's computers answered yes or no?
T
The Honorable Scott Bessent
Not to my knowledge.
You better learn.
Gentlewoman yields back.
I yield back.

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