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Presidential Nomination: Secretary of the Treasury


Steven Andrews

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Thank you, Mr. Fonseca.
Over the last few decades, tax regulations have bypassed the normal requirements of administrative law.
This suggests that tax regulations and other rules by the IRS are not subject to the same public notice and comment period, cost-benefit analysis, OMB Office of Regulatory Affairs Analysis, and Congressional Review Act requirements as other federal agencies.
The Supreme Court in (Mayo 2011), and the Tax Court (Altera 2015) informed the IRS that the IRS is not exempt from administrative law requirements. The IRS is subject to the same administrative law requirements as other federal agencies.

My first question is: as Treasury Secretary, will you make sure that IRS regulations, rules, and guidance comply with administrative law requirements?

 

Congress & Supreme Court Admin


Admin NPCs:
Rep. Derek H. Gray (D-TX-20)

Speaker of the House & Democratic Party Chair

 

The Hon. John Roberts

Chief Justice of the Supreme Court

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Senator Pinnacle,

The Supreme Court has made it abundantly clear that they do not wish to carve out an approach to administrative review for taxes only. Of course, I will work with legal counsel when appropriate. Though I point out where this frequently comes up, at least recently, is in relation to niche tax breaks and rolling back disclosure requires. That is exactly the opposite approach I will advocate as Treasury Secretary.

Thank you

 

Tara McCarthy

D-Michigan

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The cost of producing a penny costs 1.82¢ to make and distribute. If confirmed as Secretary of the Treasurer, would you support the elimination of the penny?

Congress & Supreme Court Admin


Admin NPCs:
Rep. Derek H. Gray (D-TX-20)

Speaker of the House & Democratic Party Chair

 

The Hon. John Roberts

Chief Justice of the Supreme Court

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Mr. Fonseca, thank you for being here today. One of my biggest concerns in regard to the future of our economy is ballooning student loan debt, which to me is starting to look a lot like the irresponsible lending practices that caused the 2008 financial crisis. The difference is the federal government has essentially directed banks to engage in these irresponsible lending practices, and has already established that taxpayers will foot the bill in cases of default. What would your recommendation be to Congress and the President to deal with this looming problem?

Senator Holly Hawthorne (R-AK)

@HollyHawthorne | Join the Freedom Caucus!

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13 hours ago, Pinnacle said:

The cost of producing a penny costs 1.82¢ to make and distribute. If confirmed as Secretary of the Treasurer, would you support the elimination of the penny?

I think the elimination of penny, as far as the physical coin goes, is inevitable. But would I support rounding all transactions to the nearest 5 cents? No. But frankly, I see this is a minor issue in the grand scheme of things. I am more concerns about deficits, middle class tax relief and job growth.

Tara McCarthy

D-Michigan

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12 hours ago, Brady said:

Mr. Fonseca, thank you for being here today. One of my biggest concerns in regard to the future of our economy is ballooning student loan debt, which to me is starting to look a lot like the irresponsible lending practices that caused the 2008 financial crisis. The difference is the federal government has essentially directed banks to engage in these irresponsible lending practices, and has already established that taxpayers will foot the bill in cases of default. What would your recommendation be to Congress and the President to deal with this looming problem?

Thank you for your question. I agree, mounting student loan debt represents a new economic obstacle for millions of young Americans. I would like to take this in two parts.

What to do with the current debt? My recommendation is to allow all students to refinance at 0%. The banks can still service the loans but we must reduce the monthly obligations for those that spend hundreds, sometimes more than a thousand, dollars a month on loan repayments. I think that would be a fair approach that would not lead to resentment from those that took out loans and worked hard, sacrificed, to pay off those loans. Having said  that, the President sets the agenda. And frankly, it far from unreasonable to propose some sort of comprehensive student loan forgiveness program. And if asked, I would implement it. It may seem radical but as you mentioned, if we can bail out the banks, we can bail out the people. 

I think though we also need to focus on why people are going into debt. Some of this is outside the scope of the office but but I would suggest a focus on financial literacy for high school students. Young people are fed a constant message that if you go to college, you will be better off financially. Overall, that is true but there is a lot more to it. We need to make sure kids are aware that if you want to be a teacher, great. But if you go $150K into debt to get a degree, you will still face financial difficulties. We need to make sure our kids in high school can do a proper cost benefit analysis. We also need to incentivize cost savings in our public universities.  That  can come in a lot of different forms but my generation paid a lot less for  college than my kids' generation, and it isn't just because there are fewer subsidies. If the only pull is to extract more and more funding, then there is zero incentive for colleges to become more efficient.

 

Tara McCarthy

D-Michigan

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Thank you, Mr. Fonseca. If we could, I'd like to take a minute to turn to the issue of currency manipulation. As I'm sure you know, currency manipulation by China and other competitors makes American exporters -- particularly our farmers -- less competitive in the global economy. Foreign currency manipulation not only involves devaluing their own currency, but inflating the value of the dollar through foreign investment. This currency manipulation leads to our exporters having a harder time selling their goods in the global marketplace and drives up our trade deficits. I don't believe tariffs are the answer, but I do strongly believe we need to do more to address currency manipulation.

My question then is what will the Treasury Department's strategy be for combating currency manipulation? And do you believe it would be beneficial to pass legislation empowering the Federal Reserve to impose a fee on foreign investment so we can better manage the value of our own currency, without engaging in the manipulative excesses we've seen from China for example?

Senator Holly Hawthorne (R-AK)

@HollyHawthorne | Join the Freedom Caucus!

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On 9/7/2019 at 4:27 AM, Brady said:

Thank you, Mr. Fonseca. If we could, I'd like to take a minute to turn to the issue of currency manipulation. As I'm sure you know, currency manipulation by China and other competitors makes American exporters -- particularly our farmers -- less competitive in the global economy. Foreign currency manipulation not only involves devaluing their own currency, but inflating the value of the dollar through foreign investment. This currency manipulation leads to our exporters having a harder time selling their goods in the global marketplace and drives up our trade deficits. I don't believe tariffs are the answer, but I do strongly believe we need to do more to address currency manipulation.

My question then is what will the Treasury Department's strategy be for combating currency manipulation? And do you believe it would be beneficial to pass legislation empowering the Federal Reserve to impose a fee on foreign investment so we can better manage the value of our own currency, without engaging in the manipulative excesses we've seen from China for example?

I would not propose a single, stand alone policy to fight currency manipulation. Lets face it, when we talk about currency manipulation, we are talking about China. With China, there are many other grievances we have ranging from copy write infringement to labor abuses. If we are going to tackle it, it needs to be comprehensive response and a deal struck with Beijing. The alternative is a tit for tat approach which I think would end poorly. The Chinese are not our friends but they recognize America as a huge market to send their goods and they want to do business with us and we can achieve "buy in".

Tara McCarthy

D-Michigan

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14 hours ago, Sheridan said:

Can you discuss more how you believe the government could afford to launch a massive debt forgiveness or refinance program? Would you prefer to do this through a massive tax hike or a massive deficit increase? 

There is roughly about 1.5 trillion dollars of  student loan debt held by Americans. That sounds like a lot, and it is, but it needs perspective. That happens to be roughly the same as the cost of the Bush Tax Cuts. So I would say, if we can find a way to cut taxes for the rich, we can find the money to help working Americans get out of debt and build a financial future. It seems to me that  there has been a trend since the 1980s that siphoned money to the tippy top, at the  expense of all others. Each time there is major tax reform, it cuts taxes for the top, exploding the deficit and reducing the amount of investment available for the rest of society. There has been slight corrections to that during the Clinton and Obama eras but we as a nation have not fully corrected this path. A plan to eliminate student loan debt is not radical, what it takes is leadership that dares to say the working and middle class deserve what the rich have gotten for decades; being prioritized in Washington.

Tara McCarthy

D-Michigan

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Mr. President @Steven Andrews,

I thank Mr. Fonseca for coming here today and providing well thought-out answers to our questions. I’d like to move for his immediate consideration.

I yield 

Congress & Supreme Court Admin


Admin NPCs:
Rep. Derek H. Gray (D-TX-20)

Speaker of the House & Democratic Party Chair

 

The Hon. John Roberts

Chief Justice of the Supreme Court

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