protecting the american financial system and try to encourage them this ways that didn't put the u.s. taxpayer at risk to try to move more aggressively. i wish -- i wish they'd been able to move more quickly earlier because it did do a lot of damage to us. if you look back to u.s. growth in 2010 and 2011 if you look at the moments where growth started to weaken in the united states, it's when europe was lighting itself on fire. wish it had happened sooner, but we've been very actively engaged and feels better now even though it's going to take a while. >> very quickly. i know that one of the other members of the panel here this morning asked about facta. just a quick question about that. where do you think this is going? i've got three quotes here this morning from japanese banking association, european banking federation, institute of international finance. all are very concerned that we're going to be impacting international investment with

the proposed rules. i know we're not there yet. can you elaborate on where you think it's going to go and are you willing to consider the implications and minimize those. >> mr. speaker, if you can elaborate quickly. >> we acted twice since the law was passed to give people more time to adjust and try to lessen the burden of compliance for the reasons that you stated. we're going to work with financial institutions around the world and their governments to make sure we can attest to the law without an undue burden it would damage other interests of the united states. and i don't think people -- people are not confident we're fully there yet, but we're getting closer. >> thank you, mr. chairman. >> the final of the gentleman has expired. the chair recognizes the gentleman from georgia, mr. scott. >> thank you very much, chairman. welcome, mr. secretary. let me say this is about international monetary policy, we can't leave out what's going on right here at home in the

united states. certainly, i want to touch upon the get a progress report from you and share some information about the heart of the problem that caused this whole problem which was housing and mortgages and where we are. as you know, i've been on a mission myself and thanks to you and your help at treasury and getting folks home safe, with that regard, i do want to say if you would just tell your assistant secretary for financial stability timothy ma saudi that we appreciate the fine soopgs he's given to us alo along with others. i want you to know we're going back and having the second home foreclosure event in atlanta, georgia. i mention all of this because we were able to save 3,827 homes last time. this time our goal is 10,000. and we can do this, mr. secretary. a lot of things have happened

since last time that i want to talk to you about. i certainly want to just ask that whatever you can do to help us, to reach that 10,000 goal and to help make this a successful event is going to be june 1st and 2nd. now, a lot has happened. we know we have some opportunities here to go to the heart of this matter and help many of our struggling homeowners with the writing down of principal. we've had a settlement, mr. secretary as you know of several billion dollars. but there's a lot of cloud there. we don't know. there are many struggling homeowners out there that say isn't this to help us? how does it help? we want to use this event on june 1st and 2nd to really see what we can do to get some of this money out where it helps the most and we can help reach this 10,000 goal. georgia, for example, will get $813 million of this money. i want to ask you what does this

mean? how can we use this money in the billions and every other state gets their share, but there's a lot of cloud of what it can be used for, what it can't. how our struggling homeowners can get a piece of the action. please tell us. >> you're going to see more detail about what the settlement means in the coming weeks. alongside that we're working closely to try to make it easier for people to refinance, to take advantage of lower interest rates. to make it easier for people to stay in their home if they can afford to by having their payment obligation reduced over time. helping them to transition to more affordable options. we're trying to get much more support to communities where they're still devastated by the huge number of unoccupied homes across communities to get more resources into neighborhoods to help stabilize those communities and we're going to keep doing everything we can in this

context. we work very closely with you to make sure we're reaching more people. the settlement's part of it, but it's not the only thing happening. >> exactly. now let me make sure we're clear here. some of this money can be used to help write down principal, is that correct? >> that's correct. banks as part of the settlement agreed they would have to provide some of the assistance by reducing the balance of principal owed by some of their borrowers. >> very good. now the other area we're emphasizing is here. one of the fastest if not the fastest group of homeless people are our retiring veterans. we've set aside a part of this and we're coordinating with the v.a. to really structure what we got going that can help veterans stay in their home. it is the height of shamefulness. in fact, our young men and women go and risk their lives and they're struggling with

homelessness as well as joblessness. what specifically are we doing in treasury to help with that? >> you're exactly right. as part of the settlement and separately from that we've been working with the v.a. and with the other housing bodies to make sure that we have a chance to stay in their home. it's -- it's even worse than what you described, of course. we ask our service members to move a lot. and it's very hard to move if your house is underwater. >> right. >> so apart from making sure they're protected from people taking their home when they're serving our country overseas, we want to make sure it's easier for them to meet their obligation as an armed service member and it's still a very difficult time in the housing market. we have a lot more to do in that area. >> finally hamp. is it succeeding and what are the challenges to making it better? >> hamp has helped modify mortgages for roughly a million homeowners now. less than we had hoped.

still more to come. but the standards we set in hamp have helped encourage another two to three million loan modifications across the united states. so the broad impact of these programs is much larger than the direct programs in hamp. just one thing, it's very important to realize -- >> excuse me, mr. secretary, the time of the gentleman has expired. if you could submit that answer in writing. >> happy to do so. >> thank you, secretary. >> the gentleman from north carolina mr. mchenry is now recognized for five minutes. >> thank you mr. chairman. thank you mr. secretary, for returning. you i know we've got a lot of discussion about our european exposure. the question of international harmonization. you have the fsoc and your role there, has this been a point of discussion and a concern about the stability of our financial

institutions in the united states with our regulators moving much faster than european regulators when it comes to a whole myriad of market regulations? >> absolutely. it's the central focus of our discussions in the council. i spent a lot of time working with the fed on that basic question. i'm not worried that it the fact that moving more slowly is going to do -- is going to undermine our efforts to get our reforms right in the united states. we want to make sure there's a level playing field. so we and this is true in derivatives in particular. we want to make sure that we're moving with them not too far ahead of them because if we move too far ahead without knowledge of where they land things, we may end up shifting that risk outside the united states and that would be against the intent of the law. yes, we're focused on it and we're making progress. europe is actually very close to us on most of the key elements

of derivatives oversight. we want to make sure we're fully aligned. >> okay. you mentioned this with derivatives in title seven with the extraterritorial application of that. you know, is it a risk that would thin out our market make it more volatile and therefore more risky? >> i don't really think so. the real concern, yes. like say, think about a world in which we raise our standards up to here and they stay down here. a bunch of risk would shift to europe even if we felt more comfort in the near term. on the broad strategy of derivatives reform, for example, they have largely embraced the architecture that congress passed in the law to the united states. they're slower than us to adopt it. and not identical in areas they're very close. >> are you asking the sftc to

work with sec more diligently? >> very good point. we want them to bes a close as they can. if they're different, it's harder for the rest of the world to say we want to be like american. we're trying to get them to be alined where we can be. we're in a stronger position to encourage the world to adopt our tougher standards. we're also -- we're also encouraging the fed and sec to work closely with the europeans and with the asians and british to make sure that those reforms largely match ours. >> do you have -- do you have a -- you mentioned the difference in regulations between europe and the united states. if there's that difference for a period of months, you would see -- you'd see a flow out of our markets to theirs. so is it important those dates match up or is it important they get -- they're close. ki speak to that? you've spoken a lot about this

and i appreciate that. that's one area where i think you're saying is matching up with a very wide bipartisan group on capitol hill. >> you're right that we've got to make sure that if we're ahead of them in implementation that doesn't create a huge competitive advantage for their european competitors. we're looking at that now. based on what we know now before the crisis the gap was like this. i think it's much closer on capital, on liquidity, on derivatives on all the material things that matter to the kmibs of running a financial business. it's not perfectly there yet. yes, we're going to make sure that the deadlines are as alynde as we can. but not at the expense of leaving americans more exposed to risk than they need to be. >> my colleague asked about hamp. many of us have grave concern. i sponsored a bill and we passed out of the house trying to eliminate hamp because the impact it has not on those that it's helping, but the over 50%

that enter into the program and left off materially worse off by being kicked out of the program and having to pay fines and accrued interest and penalties for missing payments. would you categorize hamp as a success? >> let me say this bun point. i'd be happy to talk in more detail about this. the performance of modify cases under our programs is much better. much better for the home owner and a much better success rate than the standard outside of those programs. i am very confident, but sounds like we should spend some time together on this, you're better off in a hamp program, the depth of relief is better. the performance rates on those modifications are much higher than many the private market. >> time for the gentleman has expired. the chair now recognizes the gentleman from texas, mr. green for five minutes. >> thank you, mr. chairman. i thank you mr. geithner for appearing today. i want to especially thank you,

specially thank you for speaking up for hard working americans who pay 1.45% of their income -- income in taxes. and for those who are now paying 4.2% for social security. it was 6.2%, but we have a holiday that will end and they pay 6.2% at the end of the holiday and they will do this up to $110,100. so i thank you for speaking up. to them it really is an income tax. we can phrase it and frame it, but it's an income tax. and they pay it. and we ought to appreciate them for what they pay just as we appreciate billionaires for what they pay.

i think anybody that pays taxes ought to be appreciated. somehow we tend to believe that poor people who pay a tax on all of their income somehow they're not paying as much of what they make in taxes. when in fact, on a percentage basis they're paying more. because they can pay the 1.45% and owl of their income, others will, too, but when it comes to social security, if they make say $30,000, they're going to pay that 4.2% on everything that they make. whereas a person who makes $110,001 will pay it only on the first $110,000. if you make a billion dollars you pay it on the first $110,000. >> it's even worse than that as any businessman will tell you, the employer's side of the payroll tax comes out of the

wages they pay their workers so the tax to the individual to cover social security and medicare is not just the 6.5% after the temporary holiday, it's another 6.5% on the employer's side which comes at of their wages. it is true to say that the vast majority of americans pay taxes against their income to help support the broad programs americans have supported. >> well, again, i thank you for making these comments clear. because poor people merit some appreciation for the taxes they pay, too. continuing along this line, i don't intend to go this way, but now i must continue. a certain millionaire made about $3 million one year. i'm happy for it. i'm proud. it would take a minimum wage

worker to make $3 billion about 198,000 years. i'm happy for the billionaire who made his $3 billion. i do think that it's fair for the billionaire who made the $3 billion to pay a fair amount of taxes on it. and i somehow cannot grasp the argument that the billionaire pays too much taxes. how did he become a billionaire? if he's paying too much taxes? >> well, nobody likes to pay taxes whether they're rich or poor. the stunning thing about the united states today is the effective tax rate you pay is a share of income is very low historically, low relative to other countries. particularly for the most fortunate americans. we have proposed as you know to raise modestly that effective tax rate on the most fortunate americans because we can't afford to go out and borrow the

trillions over ten years it would take to maintain programs and we're not prepared to cut medicare to finance the tax cuts. as i said earlier, i don't see a way to solve our nation's problems economic and fiscal without raising that effective tax rate on the richest americans modestly back to where it was at periods in our history where we did very well in our country. >> finally, there seems to be a notion afoot that you can cut -- you cut the corporate tax rate which doesn't mean that you're necessarily cutting corporate taxes, than if you do this, you're going to get more money in revenue automatically. does that automatically happen in if you cut -- the you cut the corporate tax rate, there's an effective tax rate and the rate that we have, the corporate tax rate, so cutting it, are that automatically bring in more rev snu. >> not in a material way. most economists would say if you did seasonally designed rate

lowering, base broadening tax reform that that might have a small effects on improving economic growth, but they're very small and do not come close to paying for the cost of the tax cut. >> time of the gentleman has expired. the chair now recognizes the gentleman from michigan. >> i appreciate that, mr. chairman, and mr. secretary, thank you for being here. i just wanted to head in a slightly different direction regarding some of our debt and our debt structuring. first, i did want to address something. one of our colleagues i wanted to gently correct her when she had indicated that europe is our largest trading partner. in fact, it's canada. i checked on the -- double-checked on the u.s. census bureau website dealing with foreign trade. year to date canada accounts for 16.2% of all of our trade both exports and imports. china is at 14.2%. and all of european nations

singularly are in the single digits collectively are much more significant than that. i had run out to meet with the gentleman who's the chair of the standing committee on international trade who is a member of parliament. from canada. and we had a little conversation about this. we talked about what's happening in canada. with their budgets they are actually going to be introducing an austerity budget. they have lowered their tax rates. they believe that they are on firm ground. and certainly prime minister harper who has been here and other places around the world is looking for those trade partnerships. we know that when we're talking about america, we're talking about an expanded north american envelope of influence really. and canada being so tied directly to europe they're also affected by that. i wanted to talk a little bit

about -- you were starting -- two things, you were starting to head down a bath, i believe we've run out of time about the brits separating their retail versus institutional spending. you said it's much more radical. i wanted to give you a brief time to expand on that. then i've got a very s fiwell. >> i'm not sure i can really do justice to the reform. broad outlines what they proposed to do over time is to separate the retail deposit taking activities of their big banks, require them to be very substantially capitalize, and leave the wholesale parts of the banking system separately planninged with lessregulation. they have to choose what's right for them. but i could not conceive of why we'd want to adopt that in the united states. we just went through a crisis in 2008 and 2009 it was caused significantly not really by traditional banking activities, although a lot of banks took too

much risks, but because of what happened in the capital departments. it was that collapse of the shadow banging system in the united states the broader wholesale system that caused so much pressure and trauma, and so much damage to the industry. so i say this with respect to them, theirs is a much more sweeping separation and i do not think it makes sense for our country. >> i'm not saying that it does either. i think the point that you were making earlier and certainly i track with is that there's a number of solutions being talked out there and whether it's basil discussions and greece, germany and others within the eu. the very specifically though it brought to my attentions looking at our debt structure and looking at the british debt structure there is a -- there is a chart out there that i saw

that indicated the amount of debt that great britain has and when that debt is coming up to be renewed. they have much more effectively in my mind back loaded this. their ten-year debt window is very different than our ten-year debt window. we have gotten and maybe you have the exact figure it's somewhere around 60%, i believe or 70% of our total debt that is going to be needing to get refinanced here in the next 36 months at historic, some would argue artificially low interest rates. and what is going to happen with those? it seems to me we need to expand this out. i talked to former state treasurer in michigan about this exact issue. that is how so many whether states or countries have gotten themselves into trouble. we need to lock into longer term interest rates. that's going to have an impact on the day-to-day budget.

if you could comment on that, please. >> you're right. thank you for raising that and extending the maturity of debt is the smart thing to do in this environment. we're doing it quite aggressively. over a short period of time we moved from an average maturity of -- and we're going further. as you said it makes sense to do that we're at a time of exceptionally low long-term interest rates. we've keep moving and do it in a carefully balanced way. >> will this administration be willing to take a short-term higher interest payment on it. >> of course. >> the time has expired. >> of course. and it makes sense to do it. >> the chair now recognizes the gentleman from minnesota, mr. ellison for five minutes. >> hello, how are you mr. secretary? thank you for being here. i have a question about the somali remittances. i know your office has been working on this and i want to thank you for it. could you just talk a little bit

about what the department of treasury is doing and might be able to do to help facilitate and come up with a permanent solution for somalis in america to be able to remit money back to relatives at home. just for the record, there have been a number of banks that have refused to facilitate the remittances. perhaps you could take it from there. >> you're right. i appreciate you drawing attention to this issue. we're working on it. you're right to say it's hard and we're not having enough impact yet. the basic problem is that banks are reluctant to do business in parts of the world where they cannot satisfy their obligations under u.s. law to make sure they're not fa sit dating terrorists. it's acute in the context you site cite. we're going to keep working with you on it. we're not making enough progress. but we'll keep at it. >> i'll be continuing to work with you on the issue.

just to make the point for the record, you know, estimates that i found showed that american somalis spend about $100 million in remittances that basically are lifeline to their families. at a time when we're worried about foreign aid and staving off, you know, hunger and starvation, these remittances actually help fill the gap and i think it's in everybody's interest to come up with some solutions. >> i agree with you. >> could you talk a little bit about switching to the housing context. could you take a little bit about what fannie and freddie might do given that they own or guarantee about 60% of residential mortgages to look at principal reductions on some of those mortgages and in cases where it's advisable. at this point the agency that is the conservator for those two

gses has pretty much said we're not doing that. my question is could we be doing it and when can we? >> we think they can. and we're encouraging them to do it and they're working with us. they have a meet a very tough standard the law set. they have to make sure they're working for the interest of the taxpayer not just to help the housing market. they have to be careful how they do it. we think there's a strong case for some homeowners and we're trying to make that case as convincing and compelling to them. i hope that we'll have a better feel for what they think they're prepared to do in the next couple of weeks. >> good. i'd like you to talk about the volker rule. as people have debated there seems to be a strong emphasis on the reasons it can't work rather than the essential importance of

recognizing that perhaps a bank that wants to buy, for example, a mortgage backed security shouldn't do it with government guaranteed money. and then when things go wrong, look for the taxpayer to bail them out. can you talk about the essential importance of why the volker rule is a good thing and why maybe we recollected have an eye more on make it work than figuring out why it can't? >> we had a crisis caused by some institutions taking too much risk. taking advantage of the safety net where it existed. we're going to be living with the legacy of that damage for a long time to come still. it is very -- it makes a lot of sense to try to make sure we're doing things to protect against that risk. the volker rule is a broad sense of laws to do that. banks shouldn't be able to run internal hedge funds and take a huge risk relative to capital

that could put us in a situation where their farms cause too much damage to the innocent. the law also protected i think appropriately so some exemptions for market making and for hedging things that they need to do and markets to work well. i am -- i am reasonably confident that the rule writers in this context are going to find the right balance. we want to be careful that the exceptions don't undermine the broader safeguards. we want to smak thur those safeguards achieve what they're supposed to achieve and don't cause other damage. we're going to take the time necessarily to get that right. >> thank you very much. i yield back. >> gentleman from wisconsin mr. duffy is recognized. >> thank you, mr. chairman. thank you for coming in mr. secretary. quickly, so i'm clear, it is the role of a secretary to implement the policies of the administration. is that correct?

>> yes. >> i come from the northwest corner of wisconsin it's a larger rural district. my concerns are the skyrocketing prices of late. they've nearly doubled since the president has taken office. to you is it your position that the administration has supported policies that would lore energy cost? >> i do. as the president said many times there's no quick fix to this. you said prices have doubled but there's really unfair to history they were really low in 2008 because -- >> but i don't have a whole lot. your position is yes, the administration is supporting lower gas price policies. i just want to run through some quotes that you may recall in 2008 as the president was a candidate in san francisco in regard to cap and trade he said quote, if somebody wants to build a coal powered plant they can, it will bankrupt them because they're going to be charged a huge sum for all that greenhouse gus