FY 2027 Budget Request for the Department of the Interior

Good morning. Subcommittee's gonna come to order. Um, Senator Reeds just stepped out to to take a quick meeting, and with his permission I'm gonna go ahead and get it started. This is the first hearing of the fiscal year twenty twenty-seven cycle for the Financial Services and General Government subcommittee. Before we begin, I wanna welcome Senator John Huster to the subcommittee, who's recently joined the committee after the confirmation of our former colleague Secretary Mullen, and I'd like to congratulate Senator Fischer, a member of this committee, who's acquired now the gavel of the Legislative Branch Subcommittee. Congratulations to you, Deb. Secretary Scott Besant is here with us today to review the Department of the Treasury's fiscal year twenty twenty-seven budget request. Welcome back, Secretary Besant. Uh, I thank you for being here. The Department's request for fiscal year twenty twenty-seven proposes an eleven point seven percent or a one point five billion dollar reduction from the amount provided in the prior fiscal year. This request appropriately acknowledges that resources are limited and it makes deliberate tradeoffs among competing priorities to advance this administration's pro-growth pro-competition economic agenda. This budget request also reflects a thoughtful effort to balance responsible stewardship of taxpayer resources while continuing to strengthen America's economic and financial leadership, and I appreciate the effort to strike this delicate balance. This budget request proposes solutions to difficult questions that too often some of our predecessors have preferred to avoid. Rather than responding to constraints by simply requesting additional funding, this proposal reflects a focus on improving efficiency and making targeted decisions about where resources can have the greatest impact. Mister Secretary, I appreciate your leadership and your ability to make tough decisions that save taxpayers' money and shape a leaner more efficient government without compromising the department's core mission. That's an important goal, and one I think most members share. As the department works with these resource constraints, it will be important for Congress to understand how Treasury is prioritizing its activities, where efficiencies are being realized, and how performance outcomes are being measured. That understanding will help ensure that this subcommittee aligns resources with the areas of greatest need and greatest impact. This budget request also reflects The consequential legislation Congress passed and the President signed into law last year, the Working Families Tax Cuts Act, which was an incredible victory for all hardworking Americans. Recent IRS data shows that tax refunds this year are substantially higher than years prior, putting more money back into the pockets of hardworking Americans. The Working Families Tax Cuts Act also made adjustments to how certain income is treated, including relief on items like tips and overtime, as well as expanded deductions for seniors and working families. These changes require Treasury and the IRS to create new guidance, to update systems, and to ensure that taxpayers can easily comply with these most welcome changes. In that vein, I was pleased to see that this budget request does not focus on maintaining the status quo. Rather, it addresses the Department's responsibility to implement these major policy reforms. And it ensures that Treasury has the tools needed to carry them out efficiently. Beyond tax administration, This budget also reflects a broader effort to strengthen America's economic position globally. For far too long, unequal, non-reciprocal trade policies have handicapped American businesses, leading to persistent trade deficits and the erosion of our domestic industrial base. Decades of asymmetric policies have also undermined our nation's capacity to produce critical goods like ships and pharmaceuticals, and it's made us increasingly dependent on competitors like China. This administration is taking great strides in resetting the global trade market by negotiating a multitude of international trade agreements, and continuing to push an American first agenda. Digital assets and their related technologies present new opportunities for economic growth for capital formation and for value storage. Properly deployed, these digital technologies will facilitate safe secure and instantaneous payments. America must be the global leader in this sector if we want to retain our position as the reserve. as the world's reserve currency. Our nation has demonstrated that it can lead innovation across any industry when it's provided with the regulatory certainty that's necessary to grow and to invest. That's why last year, President Trump signed into law, my stable coin legislation, the Genius Act, which provided regulatory clarity to help the U. S. remain a leader in digital assets and financial innovation. Your department, Mister Secretary, played a critical role in the success of this legislation. Particularly Luke Pettit and Tyler Williams on the development, joined by Jonathan Greenstein on the implementation. President Trump understands the crucial role that this industry will play in our nation's economic development and international leadership. The President has asked Congress to provide clarity through technology neutral regulations and transparent government decision making, to foster a robust and vibrant digital economy. I am encouraged by the efforts underway at the Department of Treasury to carry out this objective. And I'm grateful for your support for sensh sensible stable coin policy, as we seek to promote US leadership in digital assets and financial technology while protecting the economic liberty of Americans. Our nation also benefits from constructive relationships with our allies. This subcommittee is grateful for your daily work negotiating tariffs that preserve our strong relationships with those allies. The other side of that coin is countering our adversaries through financial intelligence and sanctions. While Treasury's role in the intelligence community is rarely in focus, Its unique capabilities help safeguard the integrity of the American financial system, and ultimately strengthen America's military power. Treasury's responsibilities today extend well beyond traditional finance. I appreciate your work and look forward to continuing to partner with you to ensure that the department has the tools it needs to succeed. And I look forward to your testimony, Mr. Secretary. But before you begin your testimony, I now want to turn to my colleague, the Ranking Member of this subcommittee, Senator Jack Reed.

Well, thank you very much, Mr. Chairman. And, Mr. Secretary, thank you. i look forward to your testimony which comes at a moment uh where the world is in a great deal of turmoil uh prompted in part by the administration's fiscal policy,

mmm

its illegal tariffs and its decision to go to war with iran while president trump upends the economic apple cart americans are paying more to pump and for other everyday necessities at the start of the iran war gas prices averaged about two dollars and ninety eight cents per gallon. Now Americans are forced to shell out over four dollars a gallon at the pump. Inflation hit a nearly two month high in March while grocery and housing costs remained too high. The cost of living is is simply not sustainable for the American people. Mr. Secretary, it seems that President Trump has uh abandoned the interest of regular Americans and your fiscal year twenty twenty seven budget request continues this worrying trend. The fiscal year twenty twenty seven budget request for the treasury department totals eleven point five billion dollars, uh a one point five billion or roughly twelve percent decrease from the the enacted level. While the request provides increases to several treasury offices, it cuts funding for the inspector general, grants for community development, and enforcement of our tax laws. The proposal slashes IRS funding by one point four billion dollars. This is on top of the one point one billion dollar cut sustained in fiscal year twenty twenty six last year. The IRS has pushed out more than twenty eight thousand employees since the start of the Trump administration, and this proposal would shrink the workforce by another four thousand. This is simply irresponsible. You come from the business world and no successful company would underinvest in its revenue collection mechanism. The IRS itself acknowledges that every dollar the agency invests in enforcement brings eleven dollars back from tax cheats. So your own agency admits that cutting IRS staff and funding, particularly its enforcement budget, costs American taxpayers and helps tax dodgers. Indeed, cutting IRS funding is a proven windfall for the rich and puts our country on a dangerous fiscal path. Yet the IRS's budget request proposed is to cut enforcement exams on high-income individuals by fifty percent in fiscal year twenty twenty six, compared to fiscal year twenty twenty three. This will help wealthy taxpayers evade billions of dollars in taxes each year. The IRS should prioritize providing better service to American households, not help rich Americans game our tax system. Secretary Besson, uh suffice it to say the administration's policies, including the IRS's budget request, are clearly putting our economy and the economic security of average Americans at risk. I look forward to your testimony and your candid answers to our questions. Once again, I thank you, Mr. Secretary, for joining us today. Thank you.

Now I'd like to recognize Treasury Secretary Scott Besson. Before becoming our seventy ninth, excuse me, before becoming our seventy ninth Secretary of the Treasury, Secretary Bessent has a successful career as a Fund Manager of one of the world's largest global macro investment funds before creating his own investment firm. Secretary Bessent believes America is unstoppable because its economy is unstoppable, an economy built on the deepest and most liquid markets in the world. Secretary Bessent, if you could please keep your remarks to five minutes, it'll allow more time for questions. Your full written statement will be included in the record. Secretary Bessent.

Good. Chairman Ha- Hagerty, Ranking Member Reid, and members of the subcommittee. I'm grateful to join you today. Treasury is committed to working with Congress to protect our nation's financial system, spur job growth and strengthen the economy. The fiscal year twenty twenty-seven President's budget request for Treasury demonstrates our commitment to boosting growth promoting efficiency with our agency and targeting illicit actors that threaten our natural national security. Treasury's budget request represents a twelve percent decrease from the enacted level while still building on the succe- the success of fiscal year twenty twenty-six to continue strengthening the U. S. financial system. Along with managing our own discretionary budget, Treasury is charged with managing core financial functions and payment operations for the U. S. government. I take that commitment very seriously, not only ensuring that every dollar in our budget is thoughtfully executed but also that every dollar collected, deposited, or dispersed through Treasury is secure and timely. I would like to begin by highlighting the Treasury to ensure accountability and deliver results for the American people. There's no better example of delivering meaningful change for everyday Americans than President Trump's working families tax cuts of which over sixty million returns sixty million claimed at least one of President Trump's signature new tax cuts this filing season by enacting no tax on tips, no tax on overtime, and new tax cuts for seniors and social security. We are delivering tax relief to working families. This season, over seven million filers have claimed no tax and tips, with an average deduction of over seven thousand dollars. Over twenty-eight million filers have claimed no tax and overtime with an average deduction of over thirty-one hundred dollars, and over thirty-four million seniors have claimed the enhanced deduction for seniors with an average deduction of over seventy-five hundred. The legislation not only delivered historic tax relief, but also began building long-term financial security For future generations through initiatives like Trump accounts, of which nearly five point five million accounts have been opened, with over one point three million children eligible for the one thousand dollar pilot program contribution. Trump accounts demonstrate this administration's pledge to invest in the workforce of tomorrow, giving them an ownership stake in the success of the nation. As you know, filing season ended on April fifteenth. I'm have to report that new leadership at the IRS has resulted in improved business and an increased focus on meeting private industry benchmarks for customer service. Our increased focus on digital-first taxpayer experience has resulted in lower call volumes, as taxpayers increasingly find the information they need online, and increased adoption of direct deposit, which will expedite the refun refunds for years to come. The budget request continues to streamline and modernize IRS operations funding to encourage automation and technology investment. while ensuring taxpayers are met where they want to be by offering multiple service options. Although the request for IRS represents a modest decrease, we are still able to maintain current services and implement new initiatives aimed at improving customer experience and making tax compliance easier. We have introduced two new metrics for modernizing how IRS performance is measured, introducing a SIS door service rate and enterprise service completion rate better aligns performance measurement with how people interact with the IRS today. Additionally, the budget request targets inefficiency and duplicative spending through reductions in areas that have been operationally ineffective. I want to ensure that every dollar of taxpayer funding supports mission critical work. By making targeted reductions in specific areas, we can enhance investments in national security by bolstering critical cyber capabilities sanctions and combating illicit financial activity. Treasury's Office of Terrorism and Financial Intelligence is at the forefront of America's fight against foreign adversaries and the additional funding would expand Treasury's ability to trace, detect, and sanction financial networks acting in bad faith. The request also includes a small investment to advanced institutional expertise in digital assets, housing finance, global financial markets within Treasury's

Thank you, Mr. Secretary. I now like to turn to our Committee Chair,

Thank you very much, Mr. Chairman. Mr. Secretary, welcome. You mentioned just now in your testimony the importance of of consumer uh customer service and your efforts to improve it. Along with other members of the Maine delegation, I sent you a letter last month opposing the closures of two taxpayer assistance centers, one in Bangor, Maine, one in Augusta, Maine. The Presque Isle Center in northern Maine has already been closed for some time. These closures mean that someone from my hometown of Caribou, Maine, w- who needs in-person service faces a ten-hour-plus round trip to the nearest taxpayer assistance center in Portland. That's the last remaining TAZ in the entire state of Maine. That's just not reasonable, particularly when you consider that Maine has the oldest population by median age in the country. We have areas of the state where internet service is simply not available. And we have older adults even if it is available, may not have access to computers or to uh the skills that they need to use that method of getting help. Has the and and I will also mention that I met recently with the taxpayer advocate in the state of Maine, and he too w expressed his concerns about what the closures of these centers would mean in terms of providing customer service. Has the IRS evaluated what the impact of closing down all of these taxpayer assistance centers except the one in southern Maine uh would be on people living in other parts of the state particularly our older adults in rural areas?

Good. Senator, thank you for your leadership on this and the entire main delegation. Uh, I have instructed the IRS to look look into this and we will ge be getting back to you. Uh, system-wide, uh, only ten centers were closed. I believe that one of the centers that was closed was already the, uh, un unmanned. Um, but we will get back to you and, um, we will remedy the this ten hour problem. So thank you for bringing it to our attention. We look forward to working with you.

Thank you so much. It really is a problem given the size of our our state. I want to bring up another persistent problem in the state of Maine, and that is we have been the location for literally hundreds of illegal marijuana grow houses that are linked to transnational criminal organizations based in China. And we really need a whole of government approach. Earlier this year, I secured language, calling for a State Department-led report on PRC-linked criminal syndicates and the illicit drug trade. Where Treasury comes in is there's money laundering involved. And I wanna thank Treasury for providing some expertise through FinCEN, through the IRS, but it still remains a huge problem. And our sheriffs in Maine have been terrific in trying to close down these grow houses but we need more federal help. We've had some from treasury, some from the the Justice Department DEA, uh but this is we're talking about over two hundred of these illegal grow houses. And um as I said it there is a link to money laundering and the fentanyl trade as well. Um could you talk a bit about how the department is working to address this dangerous operation.

Uh, yes, Senator, since you brought this to our attention last year, IRS criminal investigations and FinCEN are both involved in supporting local law enforcement and working with federal agencies to combat uh these problematic operations in Maine uh staff from these team uh have spe as you said they have specialized financial, forensic and intelligence expertise. And we want to help local law enforcement de- dismantle these money laundering operations. So I look forward to ongoing dialogue and the uh per your request I will personally uh look into what is going on, especially with IRS uh criminal investigations, the who are able to move on operations like this very quickly.

Thank you very much, Mr. Secretary. Thank you, Mr. Chairman.

Thank you, Chairman, thank you, Mister Secretary, if that was very encouraging to see your personal engagement on this critical issue, not just for Maine but for the entire nation. Senator Reid.

Mister Chairman, uh, do you wanna go first?

I'll I'll let you, don't, I'll come up to you.

Okay. Thank you, m- uh, Mister Secretary. As I mentioned in my opening statement, uh, your budget uh once again cuts IRS enforcement activities. Your own congressional justification uh states that every dollar spent on enforcement provides an eleven dollar return for the American taxpayer. Uh, so that given that your own request shows this extraordinary return on investment, why does the budget cut enforcement by nearly nine hundred million dollars?

That, uh, sir, that the the data does not support that because we cut the budget and in enforcement recoveries were up twelve percent last year.

Well, If you increase the bu- m- budget, uh, you would presumably have even more. I mean, uh, the obvious point, uh, which I stress in my testimony is that you're basically scheduling fewer and fewer enforcement actions, particularly against those who are, uh, very well endowed and, uh, may have either directly or indirectly, uh, made mistakes on their tax form. So it seems to me obviously that more effort would produce more resources.

Uh well I I think that that that may be the uh one one school of thought, but we haven't seen that in educational outcomes, we sa haven't seen that in healthcare outcomes, uh that more money equals better outcomes. And uh at the RRS thus far uh we believe in outcomes, uh we recovered that an enforcement the top five enforcements recovered two billion dollars and as as I said the enforcements last year they uh are they are up to almost forty one billion so I I think that in uh the during the Biden years in the IRA that there was a the uh scoring gimmick that was used and brought in a lot of enforcement officers and again uh you know the facts on the ground to get to be a senior enforcement officer takes ten or twelve years and to bring in the uh new officers they uh add one year, two years, have almost no expertise and don't they result in better outcomes. What we have found is meeting the taxpayers where they are and uh using technology, we have pushed back their tax returns and said we believe there is an error here, and you will be audited, why don't you fix it in advance.

Well, uh, Mr. Secretary, I I think it's uh not efficiency or even more revenue you're seeking. You're seeking, I think, to disable the ability for the federal government to uh reach all who are not being completely honest with their tax returns, particularly those that have the most to pay, the wealthiest in the country. Uh, as I mentioned also in my testimony, or my statement, I should say, sir. The gas prices are up more than thirty percent and they're above four dollars a gallon. Um and the Nonpartisan Tax Foundation estimates that President Trump's tariffs are were essentially a one thousand dollar tax on American households, and that's a nonpartisan organization. So you have a situation in which, uh, also health care is usually expensive for people about seventeen million Americans are seeing increases because of the big, beautiful bill. Consumer sentiment is a record low. Uh, you recently claimed that in their heart of hearts they consumers feel good. Uh, but, uh, that's not, uh, supported by polling. That is constant and accurate. And, um, the idea that consumer spending is up doesn't recognize, I think, that the top ten percent of the richest families account for fifty percent of consumer spending. So how does all this help families solve the key price of affordability in the United States today?

Uh, Senator, I I agree, after the Biden years and the twenty-one point five percent CPI level increase, uh the uh Americans were reeling. I I can tell you that it is my belief that when we talk about gasoline uh that the crude market is currently in what it what is known in the energy business is very steep backwardation which means that the the future prices are much lower uh than we are at present I think the conflict will end I think gasoline prices will come back to where they were or perhaps lower uh as they did President Trump has shown that he is good at getting energy prices down and that you know our uh, energy dominance agenda, the, uh, has the, uh, lowered prices.

How fast will the prices of gasoline come down?

Uh, a- again, that is path dependent on when the, when the war, uh, and the conflict end.

Well, uh, from a perspective of the armed service committee, it's not likely end soon. Thank you.

Mr. Secretary, again, welcome. I I'd like to stay on the topic, uh, that the ranking member raised with respect to technology deployment. Uh, your extensive business career, I'm sure you've made a number of investments over your your c your career. And when you've made technology investments, you expect a payback, don't you? And that

Uh, yes, Senator.

that payback would come, for example, in the form of higher service levels, wouldn't it?

Uh, that would be one one of the appropriate metrics.

Greater productivity perhaps?

uh greater pro productivity, higher customer satisfaction

and lower cost to execute.

yes

I just think that fits in and I applaud your efforts to invest in ways that would generate a payback, and I fully expect to see the type of decrease in terms of our outlays over time, assuming the technology is deployed effectively, so thank you for that. Now I'd like to turn to a topic that is uh obviously one that we worked together very very closely on, that's the genius act. Effective implementation of this law is vital for strengthening US leadership in I want to commend the Treasury Department again for moving quickly to propose its first implementing regulation earlier this month. That proposal builds on the advance notice of proposed rulemaking that Treasury issued last September. That notice sought public comment on a wide range of matters related to implementing the Genius Act. In your budget request, I was pleased to see targeted resources dedicated to carrying out the Genius Act. And to support this work, department offices are requesting one point

Senator, to meet our obligations under the Genius Act, Treasury has already made two public requests for comment,

Mm. Mm.

published under two notices of proposed rulemaking and a written report we have delivered to Congress, and to continue to work effectively internally and with our regulatory partners and other agencies, uh, we have requested, uh, this this additional funding.

Ma- make makes total sense. Um, a- as the Genius Act is implemented, I wanna make certain that you'll ensure that the Treasury Department works with my staff on any necessary fixes as rulemaking is carried out.

Uh yes.

Thank you. Um I wanna now turn the discussion to uh your decision to cancel contracts with Booz Allen Hamilton uh regarding concerns about how poorly they safeguarded sensitive taxpayer information I appreciate your leadership on this matter, and I wanna better understand how Treasury and the federal government more broadly should be addressing contractor accountability. If you could just walk us through the factors that led to your determination, that contract termination was the most appropriate response to deal with Booz Allen in this case.

Uh uh uh again, uh this was one of the largest data breaches in IRS history. Have I have I ha as I have repeatedly said, my priorities at the IRS are customer service, collections, and privacy, and this was an egregious the uh attack on the privacy of the uh thousands of American taxpayers many of whom uh this was presented as a leak of uh the very richest taxpayers when in fact their employees' tax returns they were also leaked. Um and we we think that the vetting process uh for this contractor who got into the IRS uh, I believe he went in with the determination, this was premeditated, and his employer failed to screen them and uh we no longer have confidence in that firm's ability to screen, vet and deploy contractors uh within the IRS or indeed the entire treasury department.

Well, uh I I would absolutely agree with you, the cancellation of these contracts is wholly warranted and given Booz Allen's role in facilitating politically motivated criminal acts, breaches of sensitive information, it's a disgrace. Um, that firm uh obviously failed miserably. And if you think about it, this isn't the only time. Employment of a government contractor has done something malicious, politically motivated, with the intent to weaponize the information that they have access to. And I think building on your leadership at Treasury, I'm gonna continue to work with officials across the administration to ensure that adequate safeguards are in place to prevent this type of politically motivated breach of public trust further we're gonna have to ensure that outside contractors as well as career personnel are held accountable when they do violate the public trust or otherwise attack or undercut. America's elected representatives. Um, now I'd like to turn to to another topic, um and that's the Working Families Tax Cuts Act and and the refunds and the economic interest that have been promoted there. Um, the act delivered on the President's commitment to put more money into the pockets of hard-working everyday Americans. It not only prevented the largest tax increase in our nation's history, it also delivered the largest tax cut on record. It advanced President Trump's agenda by removing taxes on tips, overtime, Now, we're a week past the conclusion of the filing season, I just would like you to please share with us how the average refund for calendar year twenty twenty five compares to the prior year and what that means for our working Americans.

Well, the average refund, uh, a as we collate the final numbers is up between eleven and thir thirteen percent. Uh, we do not have the numbers now, but my inclination is going to be that the uh those filers who use schedule A that their refunds would be up more than the average. And just to give you the some numbers, Senator, uh this year we h received over a hundred and fifty-fif fifty, a hundred and fifty-five million returns, uh over sixty million filers, uh used schedule A for one of the president's four signature policies, uh y- you also the uh the deductibility of interest on auto loans for American made cars uh the average tax cut for filers benefiting from the signature uh over seven million filers the uh uh no tax and tips received an average deduction of over seven thousand, no tax and overtime over thirty one hundred, car interest loan deduction eighteen hundred, and the seniors deduction seventy five hundred. So and uh importantly we are now up to ninety eight percent of taxpayers who file electronically and those who filed electronically ninety percent of them these refunds within twenty-one days.

That great news. Senator Coons.

Thank you, Chairman Hagerty, Ranking Member Reid, thank you, Secretary Besant. Uh, I'll have three questions for you this morning about sanctions, CDFIs and direct file. We're about seven weeks into the war with Iran uh and I wondered uh, Mister Secretary, given that your department enforces sanctions, if you have a sense just how much Iran has gained through sanctions relief since the war began. I'll tell you, estimates are fourteen billion dollars. Now, President Trump's described the Obama-Iran deal as a disaster and a scandal because of the money Iran got, which was about one point seven billion. I don't know how you describe fourteen billion, but you don't have to read The Art of War to know that helping your adversaries gain money while you're at war is a terrible idea and it's shocking to me that the countries currently profiting from the release of sanctions are our enemies. No country has profited more from this war than Russia. Oil and gas prices are up nearly fifty percent since February, and it'd be bad enough if Russia were just profiting from higher global oil prices. Uh, but your Treasury Department lifted sanctions on Russian oil, giving them an extra hundred and fifty million a day in revenue. And those funds are going not just to kill Ukrainians, But Russia is using its profits to support Iran with drones and intelligence to kill our troops. So, look, to summarize, uh, I find it hard to believe that we are continuing to relieve sanctions pressure on Russia and Iran. I was encouraged uh when last week you said that the department would not extend um the sanctions relief for Russia, yet the next day that was reversed. Can you give me any brief idea why it's a good idea to relieve sanctions on Iranian and Russian oil.

Good. With with pleasure, Senator, the fourteen billion dollar is a myth and unfortunately a DNC talking point that I've been subjected to many times. Uh, if anyone would like to show me where that fourteen billion comes from,

I look forward to an exchange of details on that,

I I yeah, I we we can exchange it in a very public forum.

Mr. Secretary. I'm not the DNC.

But

I'm the senator from Delaware.

The uh well, I I on every talk show And every senator seems to have that poor key to look.

Do you disagree that Iran has received significant additional revenue from their sales of oil because of sanctions relief?

I I couldn't disagree more

Okay.

that the a a threat

Do you disagree that Russia has received significant additional revenue from the sanctions relief?

Uh, I couldn't disagree more.

Okay. Why did you relieve the sanctions against Russian and Iranian oil?

Uh, think of it this way, sir. There's the straight of formless.

Familiar with it?

There there there is oil To the left?

Yep, left and to the right.

There is. There is to the right. The Treasury was able to the just as you are concerned about gasoline prices for the American consumer and for our Asian allies as are we,

Yep.

we Treasury was able to create the uh more than two hundred and fifty million barrels on the water, and the way to think about this is as they came in today, the uh oil prices are at a hundred dollars. If we had not done that sanctions early, they might have been at one fifty. Because the the world became very well supplied. So the if Russia was getting selling their oil at a twenty percent discount, I can tell you that a hundred percent of hundred is less than eighty percent of one fifty, and the American consumer has been better off.

Well, the look,

We we we also

the folks in Delaware are buying four dollar a gallon gas today. I don't see that we've seen a significant reduction in the price of the pump or the price on the world markets but I have two more questions I want to get to. And I look forward to disputing with you the details.

Uh, but but but Okay.

I believe that Russia and Iran have benefited from the release of sanctions. And when you said we're not going to extend sanctions relief and then were reversed, I was deeply disheartened because we shouldn't be funding Putin's war machine.

I I would like to take that was as a result last week was Bank Week, World Bank and IMF Week. And on Wednesday, it was my belief we would not do it. I was approached by more than ten of the most vulnerable and poorest countries in terms of the uh of energy, and they ask us to extend that sanction, and it's only for thirty days.

Thirty days, four point five billion to Putin's war machine. Two quick more questions. The CDFI funds, um, I was encouraged by your comments in support of CDFI last year. I am one of thirty-two senators, bipartisan senators, who are co-sponsors of the Daines Warner Afford Act, which strengthens the CDFI fund. Delaware, like most states, has a housing affordability crisis. Every dollar provided by Treasury to CDFIs crowds in eight dollars in private investment. Um, I think they are a proven bipartisan effective way to help build affordable housing in rural and urban communities. I'm perplexed by your budget proposal, which would cut over two hundred million, a more than sixty percent cut, to this successful program. Could you tell me briefly why?

First of all, that was an OMB apportionment. Uh, the funding

So you don't support it?

The the the funding is now two hundred and eighty million, and I do support the new one hundred million program on the in rural areas. And, you know, I can tell you that part of the CDF uh program had lost its way in terms of a partisan agenda and we can see you know, for instance,

Mister Secretary,

it

I have one last question for you, and I don't think funding affordable housing is a partisan agenda. Direct file. Um, you spoke compellingly about an interest in making the IRS uh easier to access, more efficient, um, yet you shut down the direct file program. Uh, I was very disappointed by that. More than three hundred thousand taxpayers used it last year. It is a quick, free, um, US government provided way to file taxes. The average American who has simple tax filing spends two hundred and seventy dollars and thirteen hours filing their taxes through paid services. Direct file saved the average participant a hundred and sixty bucks, ninety percent rated it favorably, um and the alternatives are run by for-profit tax prep companies designed to steer filers towards paid alternatives. Why'd you shut down direct file when it was free and easy to use?

Uh Well, it w- it wasn't free and the

Direct file was free to taxpayers.

Uh, not to to the American people, it's a hundred and thirty-eight dollars per per pers- so seventy-two million dollars uh for, as you said, about three hundred thousand taxpayers. There is an alternative, which is a public-private partnership, free file, which is free to the American people. The uh hand filers, over three million people use that, and for a direct file, more than sixty percent of the people who started their their application didn't finish it.

Thank you for those answers, Mister Secretary.

Thank you.

Thank you. And now I'd like to turn it to Senator Fischer.

Thank you, Mister Chairman, how much time do we have for questions? Thank you. Welcome, Mister Secretary. I know that Treasury and IRS have been busy working on new guidance for the many great policies that are contained in the Working Families Tax Cut Act. And one of those policies is my paid family medical leave program, that tax credit. This credit provides a general business tax credit to employers to meaningfully offset the cost of providing paid family and medical leave to their employees and I was proud to champion this back in twenty seventeen as the first federal paid family and medical leave policy in this country in the United States and I also was particularly proud that it happened under republican leadership. I was also proud that the working family's tax cuts, I was able to enhance it and make it permanent now. This is a big deal, and I think we should tout it. My team's been working with yours, and we are eager for the updated IRS guidance to be released. That'll be critical to ensuring that employers can accurately claim tax credits and deductions and employers are eagerly awaiting the publication of this guidance. Mister Secretary, do you have an estimate on when this guidance will be published, and can you work to ensure it is prioritized to expand access to paid family and medical leave for American workers?

Uh, Senator, thank you for your leadership. The uh o- on this fantastic program and uh it's an important part of the working family's tax cut. So, issuing the guidance to implement the uh section forty-five S the the paid family medical leave credit is a treasury and administrative priority. Uh, as you mentioned, our Office of Tax Policy have worked very well with your staff on outstanding section forty-five, uh, S issues. We've also met with the various stakeholders and we are working diligently, and hope to issue guidance the early this summer.

Thank you. I know our our teams have been in touch with each other and I'd like to have a meeting if we could as soon as possible on that. Do you think our teams can work to get something set up on that?

With pleasure.

Thank you, sir. I uh recognize the department's budget request. It decreases funding for the community development financial institutions, the CDFI uh fund that's there, and I want to take a moment to point out uh the good work that the eleven CDFIs in my state do. in investing in those rural communities in the vastness of the state of Nebraska. Uh the institutions, they take on the risk to serve those who are otherwise often overlooked, or cannot be served by bigger financial institutions. Um they're sustaining daycares in small communities of just over three hundred people they're keeping retail stores in rural downtowns. initia initiating new businesses on the Winnebago and the Omaha reservations in northeast Nebraska and they're supporting efforts to increase that rural housing developments which is so needed last year treasury certified CDFI's programs were statutory and earlier this month announced plans for a new program rules to ensure compliance with federal law. Uh, can you talk about your plan for CDFI uh moving forward?

Sure. So, uh, again, we wanna make sure that it is doing what it is designed and not uh loaded with uh a partisan wish list we al- also wanna make sure that the uh that the CDFI program is free of of waste, fraud and abuse there is a CDFI trickle-or uh which has been a very uh turn turned out it was fraud auto lending uh to minority communities so we want to avoid that and i think what would be uh what will be very um engaging for the people in nebraska will be the new hundred million uh that has been allocated for rural areas.

i appreciate uh your focus on that because many time these rural communities are are left out. And so I appreciate that focus and your acknowledgement of that sort of. Thank you.

Senator, I'm from a rural community, so I appreciate it.

I know that. You have a good understanding of what's involved.

Yep.

Uh, as you know, my colleagues on the other side of the aisle, they provided IRS with eighty billion dollars in a one-time funding as part of the inflation reduction act. However, since then Congress has agreed on a bipartisan basis to rescind over half of those funds, most recently in January with the enactment of the FY twenty-six appropriations bills. Your budget request notes that the IRS expects to exhaust the IRA funding in FY twenty-eight. Can you talk about the department's plans for transitioning back to a place where the IRS is budgeting and relying on the regular appropriations process rather than through this one-time really massive infusion of funds.

Well, it w- it was really a scoring gimmick for for the the uh misnamed I IRA. It was the uh uh Inflation Inflation Acceleration Act. Uh, and we we are bringing it down. Uh, a large part of it we have found uh was in the the data processing system, which is fifty billion dollars, the upgrade is fifty billion dollars over budget. So using common sense, lowering the number of outside contractors, and the refocusing the efforts, we now have the data processing under control about two billion of the reduction there is in that area. So we think it is going to be more efficient, we are meeting the taxpayers where they are, And the, uh, on- online inquiries, they are up sixty percent this year.

Thank you for your work on that. Thank you, Mr. Chairman.

Senator Van Hollen.

Uh, thank you, Mr. Chairman. Uh, Mr. Secretary, I wanted to ask you a little bit about your recent conversations with folks in the government of the UAE. Uh, as I'm sure you probably know, President Trump and his family have done a very brisk business with the UAE over the last few years. There was the five hundred million dollars that Sheikh Tahnoon, the UAE's National Security Advisor and brother, the President, invested in World Liberty Financial, which is the Trump family crypto venture, right before the President's inauguration. There was the two billion dollars in World Liberty stable coin that Sheikh Tahnoon used to invest in Binance a deal that effectively handed world liberty, two billion dollars in cash at the same time that the United States government relaxed our export controls on high-end AI and ships to UAE companies. And now, I understand that the UAE is looking for a swap line. The war in Iran has already cost us dearly. In my view, it's been a huge mistake, made us less safe and a lot worse off. In addition to lives lost, we're talking about over a billion dollars a day in taxpayer money. We're talking about higher gas prices, higher prices overall. And now we understand that the UAE is asking you to provide them a swap line. through the exchange stabilization fund. Mister Secretary, can you talk about this request and whether or not uh y- you expect to support it?