Patrick McHenry Slams Treasury Sec. Janet Yellen For ‘Domestic Failures’ And 'Growing Debt'

2 months ago

On Tuesday, Rep. Patrick McHenry (R-NC) delivered remarks on domestic financial policy during a House Financial Services Committee hearing.

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Transcript

00:00at any time, the hearing is titled the Annual Testimony

00:03of the Secretary of the Treasury on the State

00:05of the International Financial System.

00:08Without objection, all members will have five legislative days

00:11within which to submit extraneous material

00:12to the Chair for inclusion in the record.

00:15I'll note at the outset that this hearing has a hard stop

00:17at 1 p.m., which we'll strictly observe.

00:21I now recognize myself for four minutes

00:22to give an opening statement.

00:24Secretary Yellen, I appreciate you being here today.

00:26From Europe to the Middle East to Asia,

00:30global unrest is creating additional challenges

00:32for the international financial system.

00:34There are also rising risks emerging

00:36from our own domestic failures here at home.

00:39The IMF recently warned that U.S. deficits

00:42and debt now present, quote, a growing risk to the U.S.

00:46and global economy and should be urgently addressed, end quote.

00:50In last year's negotiations surrounding the debt ceiling,

00:55House Republicans secured historic guardrails

00:57and federal spending with the Fiscal Responsibility Act.

01:01Unfortunately, the Biden Administration has undermined

01:03this bipartisan progress at every turn with reckless

01:07and expensive executive action.

01:10But government debt isn't just a challenge for America,

01:13nor is inflation a challenge of America alone,

01:19though it is distinctly worse than the rest of the globe.

01:23Total public debt globally is at a record high.

01:27Much of it is held by emerging market economies

01:30with poor creditworthiness and depressed interest rates

01:32that do not accurately reflect the default risk.

01:36This problem is exacerbated

01:37by opaque Chinese infrastructure lending

01:41through its Belt and Road Initiative.

01:43Communist China is now the largest creditor

01:46for the developing world.

01:48To add insult to injury, it remains one

01:51of the largest annual borrowers from the World Bank,

01:54despite assurances that these loans would be phased out.

01:58The Biden Administration is failing to leverage U.S. standing

02:02as the international financial institutions to block financing

02:05for the Chinese Communist Party.

02:07At the same time, Treasury is proposing a multiyear process

02:11to stand up an entirely new bureaucracy

02:13to regulate private U.S. investment to China.

02:17To be sure, the recently proposed rulemaking is a step

02:20in the right direction and more responsible

02:23than other proposals that have been floated about this town.

02:27However, this approach will take years to implement.

02:31It lacks the urgency necessary

02:33to confront the generational threat posed by the CCP.

02:37We have an existing, time-tested sanctions regime

02:41that can have an immediate impact.

02:43And I urge you, Secretary Yellen,

02:45I urge the Biden Administration to use it

02:47and use it forcefully.

02:49Any serious effort, whether legislative or administrative,

02:53to block global funding

02:54for the Chinese military industrial complex must include

02:58the full blocking sanctions

03:00in Congressman Andy Barr's Chinese Military

03:03and Surveillance Company Sanction Act.

03:05Treasury has also implemented its beneficial ownership

03:09reporting regime as the Administration's principal effort

03:12to crack down on malign foreign actors

03:15in the U.S. financial system.

03:17There is bipartisan support in Congress

03:19for this reporting regime for two reasons.

03:21First, it was supposed to be narrowly targeted

03:24to strengthen our national security tools.

03:26Second, it was supposed to protect small businesses

03:30from duplicative reporting regimes.

03:33Thus far, Treasury has failed to adhere

03:35to congressional intent on both counts.

03:38America faces grave strategic challenges

03:41in Europe and the Middle East.

03:43The Biden Administration has rightly provided historic,

03:45military, and financial support

03:48for Ukraine following Russia's invasion.

03:51Yet Treasury has undermined its own sanctions efforts

03:54by allowing Putin to continue funding his war machine

03:57through a glaring loophole in its so-called oil price cap.

04:03Similarly, this Administration has wavered in both rhetoric

04:06and action after a promising initial response

04:09to Hamas's barbaric terrorist attacks on Israel last October.

04:15To begin to right the ship,

04:16Treasury must redouble its efforts to cut off funding

04:19for Iran and its proxies.

04:22If nonsensical and contradictory policies

04:25like these continue, allies will continue to question America's

04:28and specifically this Administration's leadership

04:31on the global stage.

Patrick McHenry Slams Treasury Sec. Janet Yellen For ‘Domestic Failures’ And 'Growing Debt'

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