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00:00Thank you, Mr. Chairman. So, Secretary Besant, as one of President Trump's top economic advisors,
00:07you have a lot to answer for. Donald Trump campaigned on lowering costs on day one.
00:14Those were his words, over and over. But 381 days into his term, Trump's economic policies have
00:23driven prices up. Grocery prices are up, electricity prices are up, healthcare prices are up.
00:30The cost of building housing is up. President Trump's economic agenda is failing families,
00:36but boy, it is working great for Wall Street and Trump's billionaire buddies. There have been
00:41massive tax cuts for billionaires. Big bank supervision has been cut to the bone and
00:48sidelining the cops who go after white collar crime. Meanwhile, middle class families get the
00:55short end of the stick. Unemployment is growing and prices are up. But American families can't even
01:01get the basic respect of a straight answer from Team Trump. The president lies about prices being lower
01:09when every family who's walked into a grocery store knows that prices are up. Secretary Besant tells
01:16workers that the Trump administration has created a blue-collar boom, while Donald Trump's own Labor
01:23Department reports that manufacturing jobs are down by 71,000 since Trump took office. But American families
01:33aren't fooled. When Secretary Besant and President Trump try to tell them that the sky is not blue and that water
01:41is not wet, hard-working people know in their pocket books just how big those lies are. They also know
01:50that Trump and his team don't have any plans to fix what is broken. Secretary Besant is here today in his
01:57role as chair of the Financial Stability Oversight Council. Congress created FSOC after the 2008 financial crash
02:05to protect families from large financial institutions that load up on debt and then turn around and crash
02:11our economy. Secretary Besant could have used FSOC over the last year to tighten regulations so that we
02:20don't face more bank failures like the Silicon Valley Bank or First Republic Bank that crashed less than three
02:28years ago. Instead, he has helped to get rid of guardrails so that banks can load up on even more risk.
02:37He's boosted profitability for giant banks and pay for CEOs while making it more likely that all of this
02:45ends in yet another taxpayer bailout. And what has he done for consumers? Secretary Besant tried to shut down
02:54the Consumer Financial Protection Bureau, the agency that has returned more than $21 billion
03:01directly to Americans cheated by big banks and giant corporations. He's effectively told the banks,
03:07they can cheat as many people as they want, and he and Donald Trump will look the other way.
03:14But it's not just about rolling back safeguards. Secretary Besant is ignoring emergence risks in the
03:21economy. The private credit market. The private credit market looks like a ticking time bomb. Late
03:27last year, Moody's found that banks had $300 billion of exposure and that the risk posed by these shadowy
03:38holdings is growing. And as Jamie Dimon said, quote, when you see one cockroach, there are probably more.
03:46But Secretary Besant and FSOC have their eyes shut tight and decided they don't see any cockroaches at
03:54all. Here's all you need to know about what's happening under President Trump's and Secretary
04:00Besant's watch. Middle class families are paying higher prices for just about everything, while it
04:07becomes harder and harder to get a raise or find a job. Meanwhile, Wall Street CEOs are getting the
04:14kid glove treatment as Trump policies may be edging the economy closer and closer to another disastrous
04:23financial crash. Now, President Trump is so busy raking in cash from foreign governments and building
04:31his gold-encrusted ballroom that he's completely out of touch with how his economy is making life harder
04:38for millions of Americans. We are only one year into Donald Trump's second term. And if Trump and
04:46Besant don't wake up and change course quickly, the economy may keep delivering for billionaires,
04:54but it's going to get even worse for American families. Thank you, Mr. Chairman.
04:59Secretary Besant. Secretary Besant.
05:04Secretary Besant. Chairman Scott, Ranking Member Warren, and members of the committee,
05:11thank you for inviting me to discuss the Financial Stability Oversight Council's 2025 Annual Report.
05:18This report is the culmination of extensive collaboration among FSOC members. I'd like to
05:24thank them for their hard work and dedication in advancing the President's bold vision for a better
05:29America. Since day one, President Trump has focused on building parallel prosperity, an era of economic
05:37expansion where Wall Street and Main Street grow together. To that end, Treasury has tirelessly
05:43pursued pro-growth policies to unlock the potential available to all Americans when they are free to
05:49save, invest, build businesses, and drive their own economic destinies. The Financial Stability Oversight
05:56Council plays an important role in delivering all this agenda. Too often in the past, we've seen
06:02regulation by reflex. Rather than preempting crises, regulators have frequently reacted to them after
06:08the fact. They played the role of hazmat cleanup team instead of preventing dangerous spillovers in the first place.
06:15Regulation by reflex has led to a regulatory myopia that has undermined safety and soundness. Under President Biden,
06:25the bank regulators preoccupied themselves with reputation risk, now discredited climate-related
06:31financial risk and other risk with no clear nexus to safety and soundness. At the same time, they
06:38centered supervision on management and other governance matters that distracted examiners and banks risk
06:44managers from the real risk to safety and soundness. The result predictably was the second, third, and fourth
06:50largest bank bank builders in U.S. history under his administration. Besides undermining safety and
06:57soundness, regulation by reflex has driven excessive regulation that can lead to economic stagnation
07:04and economic stagnation is itself a threat to financial stability. In calibrating regulations, federal
07:12agencies must avoid the temptation to create a zero-risk financial system which would result in what others have
07:19have called the stability of the graveyard.
07:22FSOC should aim to identify vulnerabilities
07:25that could lead to systemic crises
07:28and encourage the private sector to mitigate those risks
07:30before recommending additional regulation.
07:33FSOC should also work with its members
07:35to support efforts to avoid or pare back existing regulation
07:39that stifles pro-growth lending, capital formation,
07:43and innovation.
07:44And the best way to achieve these goals
07:46is by centering economic growth and economic security
07:50at the heart of FSOC's agenda.
07:54Promoting economic growth and economic security
07:57is essential to ensuring financial stability.
08:00Economic growth strengthens households, business,
08:04and financial institution balance sheets,
08:07creating capital buffers that reduce the risk of defaults
08:11and financial stress.
08:12And economic security reinforces domestic production
08:15capacity, raising living standards,
08:18while reducing vulnerability to external shocks
08:22and supply chain disruptions.
08:24FSOC's annual report prioritizes economic growth
08:28and economic security accordingly,
08:30with a specific focus on our four policy areas,
08:33treasury markets, cybersecurity, regulatory modernization,
08:37and AI.
08:39First, the Council is ensuring that the US treasury market
08:42remains the deepest and most liquid in the world.
08:45The Council is supporting efforts by member agencies
08:47to strengthen this market against future shocks,
08:51including through the Interagency Working Group
08:53on Treasury Market Surveillance and the Market Resilience
08:56Working Group.
08:57Ongoing monitoring and targeted reforms
08:59by individual agencies remain essential to financial stability.
09:03Second, the Council is taking action to protect our financial system
09:07from increasingly sophisticated cyber attacks.
09:10Nation state actors and criminal groups continue to target our financial
09:14institutions and critical infrastructure.
09:16To address this risk, the Council is supporting expanded information sharing,
09:21joint monitoring, and scenario-based exercises.
09:24And it is emphasizing the need for regulated firms to manage cyber risk tied
09:28to third-party service providers.
09:31Third, the Council is committed to supporting efforts to modernize supervisory
09:36and regulatory frameworks for banks and credit unions.
09:39Going forward, regulation and supervision should address material risk, enhance transparency,
09:50and reduce unnecessary burdens, particularly for community banks.
09:54Fourth, the Council is prioritizing the responsible use of artificial intelligence to strengthen financial
10:00stability.
10:01The Council is working with public and private sector partners, including international counterparts,
10:06to enhance system resilience while closely monitoring emerging risk.
10:10I will close by highlighting our progress and enhancing the utility of our annual report.
10:15In this year's report, FSOC shifted away from its past approach, where nearly every major
10:21market and financial sector was described as a financial stability vulnerability.
10:26By introducing a new structure centered on fostering economic growth and security, we are tuning
10:31out the white noise to concentrate on the issues that matter most for U.S. financial stability.
10:37With this overview, I look forward to taking your questions.
10:40Thank you, Secretary.
10:44To all the members, we have essentially full attendance, and it looks like everyone wants
10:49to ask a question, so I will be pretty consistent on calling us to five minutes.
10:55I just want to make sure that you guys have a little time to prepare for that.
10:59Okay.
11:00Got it.
11:01Just so long as it's everybody else.
11:02Well, of course.
11:03Yes, yes, yes.
11:04Yes.
11:05We'll work on that.
11:06Okay.
11:07Secretary, I'd love to give you a couple minutes to respond to some of the things the
11:12ranking member said, starting with the fact that two of the three largest bank failures
11:20in American history happened under President Biden, not President Trump.
11:25Correct?
11:26Yep.
11:27Correct.
11:28Number two.
11:29Under President Biden, we saw devastation in household after household after household.
11:38He dug a big hole where the average family was losing, at the end of his term, over $1,000
11:46a month in spending power.
11:49Accurate?
11:50I would say workers suffered under policies championed by the Biden-Warren economy.
12:00And President Trump has had to fill that hole.
12:03As a matter of fact, we've seen some of the strongest GDP growth that we've seen in decades.
12:14of many, but not all, of the members on the right or my right side of the room voting for the longest government shutdown in history.
12:23Despite that, we have seen extremely strong economic growth.
12:27And if you look at the success, and this doesn't get a lot of attention, but let's make sure that it gets more today.
12:31If you look at the success of the working families tax cut bill, for those folks in blue collar America, for the folks who are working every single day,
12:39sometimes two jobs, trying to make sure that their ends meet, when they look at sitting down at the kitchen table wondering if anyone is paying attention to Washington,
12:49to the suffering and the challenges around the country in their household, the answer today is absolutely, positively, unequivocally yes.
12:58We know that because in the working families tax cut bill, we saw tips.
13:04If you earn tips in America, your taxes went down significantly.
13:09Is that an accurate statement?
13:11Yes, yes, sir.
13:13No tax in tips, no tax in overtime, no tax in Social Security, deductibility of auto loans for American-made cars,
13:21and every Democrat voted against that in favor of the largest tax hike in history.
13:26On top of that, because we understand that raising children have never been more expensive,
13:32and frankly, if you looked at the attempt of my friends on the left on childcare,
13:38some of their proposals would have taken childcare from average of $15,300 to $29,000 in some of the estimates given by their bill that they wanted to get passed under President Biden.
13:52We actually increased the child tax credit to $2,250, $2,200.
13:59$2,200, right? $2,200.
14:00So when you compare the two economies and compare the two levels of leadership that we're seeing, in great contrast, back-to-back leadership,
14:08there's no question that if you're looking for someone focusing on working-class Americans undeniably,
14:15that would be the Trump economy and the Trump administration.
14:21Mr. Chairman, during Joe Biden's tenure, CPI was 4.7% on an annualized basis.
14:29Cumulative, cumulative CPI was 21.5%.
14:33There was a loss of real purchasing power for working families.
14:37Thus far, we've seen an increase in real wages, CPI for 2025.
14:46That's 2.7%.
14:47And we have seen it fall for the past three months to 2.1%.
14:52And there is an index called Truflation, which is observed inflation, not measured inflation,
14:58which comes with a lag that just fell below 1%.
15:02Wow.
15:03I only have a minute left, so I'm holding everyone to the same standard, including myself.
15:07So here's my, probably not my last question, but I'm getting close to the end.
15:13When inflation in 2021 hit 9%, bad or good for the American economy?
15:21Terrible.
15:22Terrible for the American economy, terrible for the American people.
15:26Number two, when President Trump has been able to keep inflation under 3%, still heading towards our goal of 2%,
15:33much, much better for our economy.
15:35And as a result, interest rates have been able to come down consistently.
15:40Yes.
15:41We've seen the interest rates come down this year.
15:45And the 10-year U.S. Treasury had its best year since 2020 when the bond markets and our G7 colleagues actually had rate hikes.
15:56We had rate decreases.
15:58I only have 10 seconds.
16:00At the end of the day, home ownership and affordability is more likely now in the Trump economy than it ever would have been under the Biden economy.
16:08Frank, a member?
16:10Thank you, Mr. Chairman.
16:12So for a solid year while he ran for president, Donald Trump promised pretty much every day that he was going to lower costs on day one, on day one, if he was elected.
16:22Those were his words, not mine.
16:24So, Secretary Bessing, you are one of the president's top economic advisors.
16:29Let's just start with a little truth-telling about the Trump economy one year in.
16:36Affordability is the top concern for Americans across the country.
16:41Donald Trump has called affordability, I want to get this right, a hoax.
16:45He's called it a scam.
16:47He's called it a con job.
16:49You're the Secretary of Treasury.
16:51You know the numbers.
16:53Is affordability a hoax, a scam, or a con job?
16:59Senator, it may be a bit nuanced for you, but what President Trump is referring to is the media saying that the affordability crisis was generated by this administration when it was you and President Biden who destroyed the buying power of the American people.
17:15So there is an affordability crisis and you were front and center in it.
17:19So let me make sure that I understand.
17:22Donald Trump is not saying that affordability, what's happening to families right now, is a hoax?
17:28He is saying that trying to lay the blame at this administration rather than the Biden-Warren economy is a hoax.
17:35Okay, so it all happened before he got it.
17:38And everything that's happened since then, nothing is a hoax here.
17:4221.5% cumulative inflation.
17:45Let me just ask about what's happened in the one year that Donald Trump has been president.
17:51Last week, President Trump said, quote, we have the groceries going down.
17:58Did grocery prices drop in 2025?
18:02Numerous prices have.
18:04Did grocery prices drop in 2025?
18:08Numerous grocery prices have gone down.
18:10I'm sorry.
18:11I don't know if you can't hear me.
18:13Did grocery prices drop in 2025?
18:17Numerous grocery prices have gone down.
18:19Some of them.
18:20And in fact, we have seen inflation at 2.1% for the past three months.
18:26Have you seen the Bureau of Labor Statistics, that is Donald Trump's own Bureau of Labor Statistics numbers,
18:33that report that grocery prices were 2.4% higher at the end of 2025 than they were at the end of 2024.
18:45Trump's own Department of Agriculture has projected that those prices would climb higher in 2026.
18:54And under Donald Trump, families are paying more and more for groceries.
18:59So if you're just going to insult people by denying the facts that are out there and tell people they're doing great when they're struggling,
19:09I think that's just another way to say you don't have a plan to bring down these prices.
19:15You're not willing to admit the failures of the Trump administration.
19:20I will ask you a question in just a sec here.
19:23It's not just groceries.
19:25The numbers from Trump's own economic agency show that Americans are paying more for utility bills,
19:32more for health care, more for housing construction.
19:36Families aren't fooled by these lies.
19:39Mr. Secretary, you owe it to American families to own up what's going on.
19:44And Secretary Besson, I have one more question for you while I have you here.
19:49You ran the search for Donald Trump's Fed chair nominee.
19:53And Trump promised, quote, anyone that disagrees with me will never be Fed chairman.
19:59Kevin Warsh got the nod last Friday.
20:02And then over the weekend, Donald Trump joked that he would sue Mr. Warsh if he failed to lower interest rates.
20:10At least, I think it was a joke.
20:12But just in case, this should be an easy one, Mr. Secretary.
20:17Can you commit right here and now that Trump's Fed nominee, Kevin Warsh, will not be sued,
20:23will not be investigated by the Department of Justice if he doesn't cut interest rates exactly the way that Donald Trump wants?
20:32I, I, that, that is up to the president.
20:36Can you commit that you will-
20:38I'm sorry, you can't say that he won't be sued if he doesn't drop interest rates?
20:43Can you-
20:45And he won't be criminally investigated?
20:47The president also made a joke about you that I won't repeat, Senator Warren.
20:51That was the easy one.
20:52Oh, actually I will.
20:53He said he had reservations.
20:54You know, if this was a joke, why not just say so?
20:57You can't commit-
20:58It was a joke.
20:59And he made a joke about you too, Senator Warren.
21:01Yes, he did.
21:02He got a lot of laughs.
21:03Yeah.
21:04So, I don't know if you want to respond to that.
21:06You know, I do want to respond.
21:07But what I can't tell you to-
21:08I don't think the American people are laughing.
21:10But what I can't tell you to-
21:11I don't think the American people are laughing.
21:12They're the ones who are struggling with affordability.
21:13They're the ones who are struggling with affordability.
21:14And why don't you tell, why don't you tell the nation what you told me, that you held up Chair Powell's renomination.
21:19Secretary- We're going.
21:20We're going.
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