Treasury Secretary Oversight Notes

Economic Stability and Predictability

• The Secretary of the Treasury's role is vital for national economic prosperity and financial system stability.
• Executing these objectives requires applying foundational principles that support economic growth, such as:
  • A climate of economic stability and predictability.
  • Ensuring a strong and stable workforce.
  • Supporting science and innovation.

Criticism of Current Policies

• Erratic Tariffs:
  • Caused market instability and reduced consumer confidence.
  • Increased costs for businesses and consumers.
• Immigration Policies:
  • Forced highly skilled talent to seek opportunities outside the U.S.
  • Left businesses without needed workers.
• Budget Cuts:
  • Indiscriminate cuts to libraries, medical research centers, NIH, and NSF.
  • Forced scientific progress backwards.

Disagreement on Economic Data

• Suggestion that the US dollar is not weakening:
  • The Secretary suggested that other countries' currencies are growing stronger.
  • Counterargument: The dollar has weakened against gold.
  • Analogy: Suggesting sea levels aren't rising, but the land is shrinking.
• Demand for treasuries is weakening.

Strategic Uncertainty and Tariffs

• The phrase "strategic uncertainty" is used to justify the tariff mess.
• The assertion is that erratic policies are part of a clever, thoughtful plan.
  • The Reconciliation bill has exploded the deficit by almost $3,000,000,000,000$.
  • The President believes this is fine because, according to the CBO, if all tariff policies remain in place, there will be $2,800,000,000,000$ in new taxes from the tariffs over the next ten years.

Tariff Revenue and Debt

• Claim: Tariff revenue will offset the increase in debt.
• Counterargument: The administration also plans to eliminate tariff revenue by negotiating 90 new deals.
• Question: How can the administration claim tariff revenue will offset the debt while also planning to eliminate the tariffs?

CBO Score Discrepancy

• The CBO is claiming $2,400,000,000,000$ in new debt and $2,800,000,000,000$ in tariff income.
• Even by Washington math, that's a plus of $400,000,000,000$.
  • This misses the $500,000,000,000$ in new interest on the debt, taking it up to $3,000,000,000,000$.

Trade Deals and Tariffs

• Counterpart Secretary Letnick declared that Trump's tariffs are not going away, even with the deal on China.

Negotiation Status

• There are 18 important trading partners.
• The aim is to work toward deals with these partners.
• If countries or trading blocs like the EU are negotiating in good faith, the date will be rolled forward to continue negotiations.
• If someone is not negotiating in good faith, there will be no roll forward.