Catherine Cortez Masto Asks Deputy Trade Rep Nom Point Blank If He Will Lift Tariffs If Deemed Illegal In Court

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During a Senate Finance Committee hearing on Tuesday, Sen. Catherine Cortez Masto (D-NV) spoke about court rulings on the legality of President Trump's tariff policies.

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00:00Thank you. Thank you, Mr. Chairman. I, too, want to congratulate all the nominees.

00:05Congratulations to your family. Welcome, all of your family members. Mr. Morrissey, let

00:11me start with you. In 2013, you wrote an article about creating an effective corporate compliance

00:17and ethics program. And you stated individuals with substantial authority in the company

00:25cannot have a propensity to act criminally or unethically. Is that true? Senator, it's

00:32been a while, but it sounds familiar, yes. Okay. So, do you think that principle should

00:37apply to government agencies and the public sector as well? Senator, yes, I think tone

00:43from the top matters. That's often a principle in corporate compliance, which was what I was

00:47talking about there. And yes, I think commitment to the rule of law is even more important in

00:52public service. Thank you. So, do you think taking money

00:54for promoting a fake tax shelter is unethical? Senator, I think it's important for anyone

01:02to comply with all applicable tax laws. Thank you. Ms. Dillon, let me jump back to you, and

01:09I want to talk about pension risk transfers and how you plan to approach them. And as you

01:17well know, it's a process where companies offload their pension obligations to third parties,

01:22typically an insurance company. And there have been a few lawsuits filed by plan participants

01:28over this matter because of concern about more risk for retirees. In the past, it is my understanding

01:35that the PBGC has taken a hands-off approach on this issue. So, if confirmed, would you change

01:43any PBGC policy related to those pension risk transfers? And do you have any views on reporting

01:50and oversight requirements of group annuity contracts? Well, thank you, Senator, for that

01:55question. The PBGC does not have the authority to stop. These transfers are called standard terminations.

02:04The PBGC does audit a certain number of them every year. And if there are errors in the calculations,

02:11it pursues recovery on behalf of the beneficiary of those pension plans. I think your question

02:17raises the broader issue of why is it that sponsors of single employer plans are employing pension

02:26risk transfer techniques. And I think there's a number of reasons, but one of those reasons,

02:31I think, is the size of the premiums that employers are paying on fully funded plans and where they

02:38make an economic decision to transfer these exposures to an insurance company or something

02:46of the like. When that happens, the PBGC no longer receives that premium on behalf of those participants.

02:55It also no longer has that liability on its books. But it is a phenomenon that you've identified that

03:02we are seeing growing in the defined pension space. And because it is growing, do you see any concerns

03:10in the future? Or is it something that you would look at through auditing purposes if you address

03:16some higher risk or concern? Well, as I indicated, the PBGC cannot stop these transfers. However,

03:25part of the PBGC's purpose is defined by ERISA is to promote defined benefit pension plans.

03:33And so the fact that plans are being transferred to insurance companies and the like is of concern.

03:40And again, I think there are a lot of reasons for it. But I think one of the reasons actually that the

03:45PBGC's pension advocate identified was the size of the premiums that employers are paying.

03:50Yeah, thank you. Thank you. Mr. Barloon, as you know, last week, the U.S. Court of International Trade,

03:57as well as a second federal court, ruled that President Trump's IEPA tariffs were illegal.

04:04And the government has appealed this decision at the U.S. Court of Appeals for the Federal Circuit.

04:09But if this decision is upheld, then President Trump would be legally obligated to remove his global

04:16blanket tariffs, including the tariffs he imposed on U.S. allies and partners with whom Trump himself

04:22signed trade agreements in his first term. If the court's decision is upheld on appeal,

04:28do you commit to follow the rule of law and support the removal of these IEPA tariffs?

04:34Thank you for that question, Senator. You know, I believe that the president did have the authority

04:39to take the action that he took. But as you said, courts have ruled differently and those decisions

04:46have been stayed and there is an appeal. I certainly think we need to wait and see what the courts will

04:51do and follow those decisions. But you would follow the ultimate decision of the courts?

04:58Yes. Thank you. Thank you, Mr. Chairman. Thank you.

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