Hearing of the House Financial Service Committee - Transcript
Copyright 2004 The Federal News Service, Inc.
Federal News Service
HEADLINE: HEARING OF THE HOUSE FINANCIAL SERVICES COMMITTEE
SUBJECT: THE STATE OF THE INTERNATIONAL FINANCIAL SYSTEM
WITNESS: TREASURY SECRETARY JOHN SHOW
CHAIRED BY: REP. MICHAEL OXLEY (R-OH)
LOCATION: 2128 RAYBURN HOUSE OFFICE BUILDING, WASHINGTON, D.C.
BODY:
REP. OXLEY: The committee will come to order. We're pleased today to have the distinguished secretary of the Treasury, Mr. John Snow, testify.
Mr. Secretary, welcome back to the committee. It's always good to have you here and to hear from you. We look forward to your testimony on the state of the international financial system.
This hearing has its origins in the emerging-market financial crises of the late 1990s and subsequent reform of the international financial institutions. The goal was to make the International Monetary Fund, the World Bank and the regional development banks more effective at promoting and delivering economic growth, particularly in the emerging markets.
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REP. OXLEY: The committee will reconvene, and I'm pleased to recognize the gentle lady from California, Ms. Waters, for five minutes.
REP. MAXINE WATERS (D-CA): Thank you very much. Mr. Secretary, I thank you for coming. And I have-I want to try to get in a number of questions in a short period of time, and some of them just require yes or no answers so I'll know what to talk with you about later beyond this committee.
As I understand it, you defend, basically, the administration's position on outsourcing, and you do not think that that is the cause of the loss of jobs in this country, is that right?
SEC. SNOW: Well, no. I certainly would acknowledge that outsourcing has had some effect on U.S. jobs.
REP. WATERS: Do you have any creative proposals to deal with this outsourcing problem? Would you in any way penalize corporations that we give contracts to, that we give loan guarantees to, who are basically using the taxpayers' money? Do you think it's severe enough that we should do something about penalizing companies that are outsourcing jobs?
SEC. SNOW: I think we have to be very careful there, Congresswoman Waters, because by penalizing U.S. companies that engage in trade in any way, I think we undermine our ability to keep American enterprises dynamic and competitive.
REP. WATERS: Do you have any creative ideas, any thoughts about what we can do about it, other than what I may be proposing, penalizing companies who get government contracts? Do you have any new ideas that we can talk about later?
SEC. SNOW: Yeah, well, I'd be happy to --
REP. WATERS: Okay. Sure.
SEC. SNOW: -- you. As you think about your legislation, though, I'd ask you to think about the fact that 70 percent of all the companies that are engaged in exports in the United States have fewer than I think it's 20 employees. So, an awful lot of small businesses are engaged in exports. That's a surprising statistic, but we don't want to do anything to hurt small business because they're really the engine of job creation.
REP. WATERS: Well, I do want to talk about this more with you-not today. Let me ask about-part of your statement you talk about creating industrial parks and encouraging business growth in Afghanistan. But recent reports show that 50 percent of African- American males in New York are unemployed, and I understand that a very devastating report is going to come out about the same in California. Do you have any creative proposals to deal with this kind of business development in America's urban or rural areas such as that which you are proposing in Afghanistan?
SEC. SNOW: Yes, Congresswoman Waters. There are a number of governmental programs that are not administered by Treasury but through other-other agencies of the federal government that address those issues.
REP. WATERS: But there is nothing in Treasury, such as what you are doing in Afghanistan, is that correct?
SEC. SNOW: No-Treasury does not administer any program directly like that, with the possible exception of something called the New Market Tax Credit --
REP. WATERS: Yeah, I know about those. Okay.
Let me ask you about-you know, some of us on this committee have been involved with trying to recover stolen assets by dictators and leaders in other countries. We've had several hearings. We've talked about Saddam. I've been after trying to get money back for Nigeria. The Abacha regime, as you know, stole a lot of money, and we have been able to talk about recapturing some of that in other countries-in Switzerland, Britain, Luxembourg, and on and on-but nothing from Citibank in the United States. Have you been involved in this issue at all?
SEC. SNOW: I regret to say that I haven't.
REP. WATERS: Will you please-I want to talk with you about that at a later date-take a look at that and see if we still have some kind of efforts to do that?
I also want to ask about debt cancellation, about the New Millennium Act, where I'm asking for 100 percent cancellation of the debt of the world's most impoverished countries. Do you support that?
SEC. SNOW: We-we certainly support the HIPC initiative very, very strongly, yes.
REP. WATERS: And finally, let me ask you a very tough one. Last night I spent part of my evening reading the accounts of the assistance that we gave to members of the royal family of the Saudis and getting them out of this country after 9/11. And it's amazing, and absolutely extraordinary what we did. We have-do you know of any involvement that we've had in also protecting their assets that we, in addition to helping to escort them out of the country after 9/11, arranging the airplanes and getting the royal family and their associates out, are we doing the same thing-or did we do the same thing for protecting their financial assets in this country?
SEC. SNOW: Congresswoman, I am not privy to any information on that subject. I'm not aware of what actions we may have taken or may not have taken. I'm just not aware of it.
REP. OXLEY: The gentle lady's time has expired. The gentleman from --
REP. WATERS: Thank you very much.