FISCAL CRISIS: More closures THREATEN Washington

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[00:00:00]Welcome back. A full Senate vote happening today on Capitol Hill to finalize and confirm Kevin Worsh's new position as chairman of the Federal Reserve. The Senate voted yesterday to put him on the central bank's board of governors. That's the rule needed before anyone can be confirmed as chairman.

[00:00:14]First, they go on the board. Jay Powell's term is set to expire on Friday, though he has indicated he will stay on the board as a governor. Joining me now is Arkansas Congressman French Hail. He is the chairman of the House Financial Services Committee. Mr. Chairman, great to see you. Thank you so much for being here. What are you expecting from the Senate vote uh for confir confirming Kevin Worsh?

[00:00:34]>> Well, Maria, it's great to be with you.

[00:00:36]I'm so proud to call Kevin Worsh Governor Worsh this morning and really look forward to a prompt confirmation of Kevin as the next chairman of the Federal Reserve system. He's imminently qualified in his academic experience, his financial market experience over a long career and importantly serving previously as a governor during one of the toughest times in American financial history. So I think Kevin is going to be an able effective chairman of the Federal Reserve >> and and what would you like to see from the new chairman at this point? We was talking so much about, you know, obviously how the president feels about uh the Federal Reserve and and Jay Powell being late to the party in terms of lowering interest rates. What would be your expectation of what uh his first or second uh directives will be?

[00:01:26]Well, first I think he has to settle in and put his imprint both on the open market committee and its operations and its procedures as well as taking the helm of the Federal Reserve Board of Governors at large. So, uh, getting on board with Vice Chairman Mickey Bowman for supervision, the Trump administration's plans for bank supervision, bank growth, considering Basel 3 capital standards, and then put his mark on that Federal Open Market Committee, building a relationship with the 12 uh bank governors, 12 bank presidents that rotate in and out of that FOMC. I think he's going to have uh some time to do that before he has to swing into high gear. He's inheriting, of course, a tough situation with the pressure on inflation from this hopeful short-term engagement in the Gulf.

[00:02:16]>> Meanwhile, the Senate Banking Committee also set to vote on the Clarity Act tomorrow after releasing the latest draft of the bill advancing the crypto market structure measure following all those months of negotiations. This 300 plus page bill aims to integrate the crypto industry into the financial system. and Coinbase CEO Brian Arm Armstrong will be joining me shortly to break down uh what he called compromises made and the bill's potential impact.

[00:02:40]Mr. Chairman, as you know, the major banks still are worried that they're going to be on the losing end of the stable core stable coin reward situation. Uh but Brian says there were compromises made. What can he tell us?

[00:02:53]>> We're still reviewing the document that was posted in the Senate, but I'm very encouraged. I want to congratulate Chairman Tim Scott and those members that have worked so hard, so diligently over the last uh many months, Senator Telis, Senator Osa Brooks, uh Senator Hagerty, Senator Lumis, Senator Gillibrand, all them have worked together to find a bipartisan compromise to move our digital asset ecosystem forward. And it's exciting to see in the House, we passed my Fit 21 bill in the previous Congress. And then last year, we passed the Clarity Act in the House with 78 Democratic votes. So, we've demonstrated over the last 3 to four years that building a blockchain ecosystem, an innovative ecosystem is a bipartisan priority. So, I'm very pleased to see the progress made by the Senate bill and really look forward to how the markup goes this week in the Senate Banking Committee.

[00:03:50]>> Yeah. and I look forward to see how to seeing how this all plays out and how the financial system changes with digital assets thanks to your legislation and and and your framing of this issue. So, we'll wait for that.

[00:04:03]Meanwhile, House and Senate appropriators are warning that uh the plans to funnel a massive portion of the Pentagon's $1 and half trillion dollar budget request is is is not a good idea to do it through reconciliation. I mean, Kentucky Senator Mitch McConnell says the defense priorities, including the Golden Do Missile Defense Shield, need stable, reliable funding. The Senate also preparing to vote on a proposal which would block lawmakers from receiving pay during a government shutdown. Congressman, what are your thoughts on all of this? I mean, isn't it incredible, I find it is, that you have to actually do appropriations through reconciliation. You're doing that with ICE, with with Customs and Border Patrol, and then you're going to do it with defense as well.

[00:04:45]It's bad policy. And I think many people on both sides of the capital understand that we're put in this terrible position principally by Chuck Schumer and the shutdown he instigated last year by voiding uh through uh the Democratic minority in the Senate. All the work done by both the Senate and the House Appropriations Committee. We passed all 12 bills in the House. We voted to fund Homeland Security, for example, in the House no less than four times. And it's really wrong that we have to now fund it uh by reconciliation. It's a bad precedent for the budget system in the country. I think there's no alternative in homeland security. So I voted for that reconciliation approach. But to then go on and try to assume that's how we're going to do defense too. I think again sets that concerning precedent uh going forward. We need to use the appropriations process and senators and house members need to recognize we have regular order. Let's pass our appropriations and let's uh move on and what give each president the chance to propose and the Congress the ability to uh consider and give their advice and consent on what the best spending plan is through the regular process of appropriations.

[00:05:56]>> Exactly. I mean it's totally in step with you know refusing to open the Department of Homeland Security during a war. Gosh. I mean it just feels so >> It's absolutely irresponsible. It is.

[00:06:07]We're echoing each other. No, it is irresponsible. I could I couldn't agree with you more.

[00:06:11]>> Yeah. Meanwhile, the president is urging the House to pass the 21st Century Road to Housing Act, a bipartisan Senate passed bill aimed at improving home affordability. Where do you stand on this? The Senate approved the bill in an 89 to10 vote. It has stalled in the House because of some disagreements. Is the disagreement largely over a provision including a temporary ban on a central bank digital currency until 2030? Uh or is it about uh housing?

[00:06:37]because last I guess Monday night the president renewed his attack on investorowned single family rentals while calling on Congress to enact this bill. Um you know I know this is very important in terms of affordability going into the midterms. Where do you stand?

[00:06:54]>> Well, President Trump and Senate leadership led by my friend Tim Scott, the banking committee chair, and all of us in the House support a housing bill.

[00:07:02]Our housing bill that I introduced got 390 votes in the House. So, there's a consensus that we need a solid housing uh bill that will help increase housing accessibility and affordability, and these bills will do that. But here in the House, we've got concerns with the Senate bill as drafted, and we propose to consider changes to it. First, as you said, some members do not like the Senate language in banning a central bank digital currency because it has just a very short sunset in it, and that's not acceptable to some in the House. They want a permanent ban on central bank digital currency issuance by the Fed. And secondly, yes, we do have concerns about how the Senate wrote a section called section 901 on attempting to ban institutional ownership of single family houses. We think there's some serious legal drafting errors there. And while we support the president in his goal of not having institutional investors competing with moms and dads and buying a house, we want to make sure we get it right legally. want to make sure it encourages capital flowing into the housing industry and does not curtail it.

[00:08:08]>> I mean, I know you are negotiating with California Congresswoman Maxine Waters uh and and you haven't had a compromise yet, but does does President Trump getting involved put the pressure on the House to accept that Senate bill?

[00:08:21]Uh well, I think President Trump is expressing his frustration that he wants a housing bill that includes that institutional uh change to not let them compete against moms and dads for a house. We can deliver that bill to him, but we've got to work out our differences between the House and Senate. I believe we're going to do that and Ranking Member Waters and I are committed to work with our colleagues in the Senate to achieve that. Congressman, real quick before you go, we just had on Andy Ogles, your your colleague uh in the House, and he said there's not going to be a third reconciliation bill. He said we don't have enough time. You're talking about a deadline of the end of July to get everything together. What's your ch because that's where you want to put the defense money and and a a couple of other things. Here's here's Andy was with me just a few minutes ago. Watch this.

[00:09:06]>> I don't think there'll be a reconciliation three. I think ultimately we're going to run out of time. So reconciliation too is incredibly important to the economy. Getting our economy going, getting interest rates and inflation down. So there's a lot here that's at stake and we need the Senate to do quite frankly do their job.

[00:09:23]>> Yeah. But hold on because your reconciliation too is just going to be skinny, right? You're just going to fund CBP and ICE and and have a billion in there for the for the ballroom. So >> I think this is this is really going to be our last opportunity as we go into the summer to get major funding done.

[00:09:40]that again that goes through some sort of appropriations process and this idea that there'll be a reconciliation three.

[00:09:46]I'm skeptical. So, let's focus on the opportunity at hand.

[00:09:50]>> Three.

[00:09:51]>> So, what do you think, Congressman? I mean, I it sounds like you you have a what July 24th deadline because you've got an August recess. So, if you have a July 24th deadline to get all of your other priorities into reconciliation 3, is it doable?

[00:10:06]Well, I'll take the other side of the trade on that for for the moment, which is I think we should do this skinny bill and do it as soon as possible and put the homeland security safety and soundness of America's national security interests behind us. I'm supportive of Jody Arrington's effort, our budget chairman, to try to find a path to a third reconciliation bill, put some other priorities in it that can encourage economic growth. But right now, I think the Congress needs to be focused on fiscal 27 appropriations bills. we hope to bring to the floor this week uh veterans and military construction appropriation bill for fiscal 27. Tom Cole is off to a fast start. Uh and let's try to get this uh first skinny reconciliation bill done.

[00:10:48]And and frankly, I'm supportive of considering a third one, but we need to see what those savings are and how we would invest them beyond the defense department. And that takes some time. I admit that >> you're doing a lot. You think it'll help you in the midterms. Do you expect to to lose the majority in November?

[00:11:05]Absolutely not. I plan to be the chairman of the House Financial Services Committee next year and continuing President Trump's goal to have lower regulatory costs, lower tax costs for American families and American business and take advantage of the trade and foreign direct investment that his policies are encouraging. We are going to have a great economy going forward.

[00:11:22]>> All right. Well, we like hearing that.

[00:11:24]We will be watching it all. Congressman, great to see you this morning, sir.

[00:11:27]Thank you.

[00:11:27]>> Good to see you. Thanks.

[00:11:28]>> All right. French Hill on Capitol Hill.

[00:11:29]We'll be right back.