The House Financial Services Committee, chaired by Patrick McHenry (NC-10), convened a hearing today with Treasury Secretary Janet Yellen to discuss the state of the international financial system. Republicans emphasized concerns over the Biden Administration's foreign policy strategies, suggesting these approaches undermine America's global leadership.
Chairman McHenry opened his remarks by stating, "Secretary Yellen, I appreciate you being here today. From Europe to the Middle East to Asia, global unrest is creating additional challenges for the international financial system." He highlighted domestic risks and referenced an IMF warning about U.S. deficits and debt posing significant risks to both national and global economies.
McHenry noted that House Republicans had previously secured federal spending guardrails through the Fiscal Responsibility Act during debt ceiling negotiations. However, he criticized the Biden Administration for allegedly undermining this progress with executive actions.
He further discussed global public debt levels, particularly in emerging market economies affected by Chinese infrastructure lending under its Belt and Road Initiative. "Communist China is now the largest creditor for the developing world," McHenry remarked, criticizing China's borrowing from the World Bank despite assurances that such loans would be phased out.
McHenry urged leveraging U.S. influence at International Financial Institutions to block financing for China and called for immediate use of existing sanctions regimes against China’s military-industrial complex. He supported Congressman Andy Barr’s Chinese Military and Surveillance Company Sanctions Act as a legislative measure to address this issue.
On domestic regulatory efforts, McHenry pointed out that Treasury's beneficial ownership reporting regime was intended to enhance national security tools and protect small businesses but argued it has not met Congressional intent.
Addressing strategic challenges in Europe and the Middle East, McHenry acknowledged U.S. support for Ukraine but criticized loopholes in sanctions allowing Russia to fund its war efforts through oil sales. He also expressed concerns over inconsistent policies towards Hamas’ attacks on Israel and funding for Iran's proxies.
"If nonsensical and contradictory policies like these continue," McHenry concluded, "allies will continue to question America’s—and specifically this Administration’s—leadership on the global stage."