00:00North Carolina, Mr. Edwards, for any questions he made.
00:02Thank you, Mr. Chair.
00:02Mr. Secretary, thanks for being with us this afternoon.
00:05Earlier this year, I co-sponsored a bill, the Anti-CBDC Surveillance State Act,
00:14that would prevent the Federal Reserve from issuing central bank digital currency.
00:20Many of the folks that I represent are concerned about the security of such a currency
00:26and the privacy of their information were such a currency to be used.
00:32Can you give me your perspective and maybe the administration's perspective on the place for digital currency?
00:42Sir, we believe that digital assets belong in the private sector,
00:47and my personal view is that having a central bank digital currency is a sign of weakness, not strength,
00:54because really the reason, if there is, say, a reserve manager or a foreign central bank holds U.S. dollars,
01:04then there is a wide variety of U.S. assets they can invest in.
01:09You would create a central bank digital currency just for ease of use
01:13because there are no good choices for underlying assets.
01:17And so you're saying you would not be in favor of the Federal Reserve issuing such a currency?
01:23No, sir.
01:24All right.
01:26Can you tell us real quick, at what point do you believe that our debt levels would no longer be sustainable?
01:35And then the second part of that is what would that look like?
01:40If our debt were no longer sustainable, what would that look like to the American family?
01:46We talk a lot about debt up here.
01:49We put forth some elaborate graphs and charts, and we hear all kind of economists using big, long words.
01:56I need to be able to describe to the people back at home what that might look like in their lives were we no longer sustainable.
02:05Well, it would look like a sudden stop in the economy as the credit would disappear, as markets would lose confidence.
02:14And I am committed to that not happening.
02:17And again, it is a tipping point in debt sustainability is very difficult to pinpoint.
02:25But what is not difficult to pinpoint is a trajectory, and the trajectory is unsustainable.
02:33When and if the markets were to rebel against is very difficult to know.
02:45I think, just as I talked about the warning track for the X date, I think it's very important not to go on the warning track.
02:53And we've got to get to the other side of this and start reducing the debt.
02:59And the debt numbers are indeed scary.
03:02But Secretary Yellen and I both agree that it is the debt to GDP that is the important number.
03:13So we are trying to both control the absolute level of debt, pay it down, but also grow the GDP.
03:23And so I appreciate, I applaud your approach towards the debt.
03:28Give us an idea of, where is that tipping point?
03:33How close do you think that we might be to that?
03:37Again, sir, it's, I think what the market, having been in markets for 35 or 40 years, what the market is more concerned about is a trajectory.
03:47Are you on a trajectory that is unsustainable?
03:51Or are you, as we said during COVID, bending the curve?
03:55So the goal here is to both bend the curve, but to grow the denominator and use growth and spending constraint to solve this problem.
04:08And thank you for that.
04:09And as part of the President's Cabinet and seeing more inside what's taking place than any of the rest of us,
04:16what role would you say that DOGE is playing right now in prolonging that tipping point and reversing our fiscal trend?
04:24Well, I think DOGE or any other measure to constrain the spending is admirable, important, and necessary.
04:34And if we don't do that, you know, as I've said, and ranking member, they mentioned it, we do not have a revenue problem.
04:46We have a spending problem, and we have to bring this spending under control.
04:52I've got just a few seconds.
04:53Can you tell us what keeps you up at night regarding cyber threats to our Treasury system?
04:58Well, it's cyber threats across the entire financial system, sir.
05:04And that's why at Treasury we are leading the effort for more resilience within the entire financial system,
05:14whether it's across the banking system, the payment system, and the Treasury system.
05:19As you would have seen, Treasury was hacked last year.
05:24We've just discovered an OCC hack that discovered last year, so these hacks are real and dangerous.
05:33Thank you, Mr. Chair.
05:34Are you?
05:36The chair now recognizes the ranking member of the full committee.
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