may be, the government must feign interest. he has a right to be heard and he will be heard. >> i'm fantastically grateful to you, mr. speaker. [laughter] i heard the prime minister on two occasions this afternoon congratulated the new mayor of london and i would like to speak myself. it does not however apologize to those spaces campaign the conservative party chose to run my campaign. will he take the opportunity to apologize for winning cheap votes. >> a great way to end the session getting the election campaign for the democrats. [shouting]

>> order ? book onstory and his the american involvement in the spanish civil war. >> this coup attempt happened right when army officers tried to seize power, and in parts of the country succeeded in 1936. ofsent a soft shockwave alarm throughout the world, because here was a major country in europe, the right wing

military quickly backed by hitler and mussolini, who said arms, airplanes, pilots, takes, take drivers, endlessly this sent 80,000 ground troops. here was the spanish right making a grab for power. people all over the world felt it ought to be resisted. if not here, where, otherwise we are next. >> monday night onto a day. -- on q and a. richspan.org is a video continent to your c-span doing great most of our government related programs like the house, senate and congressional hearings streamlined on the site. if you are away from the delicious you could watch on laptop, even your smartphone or tablets, and in the c-spans video library.

andcan find any program watch at your convenience. c-span video library contains more than 200,000 hours of c-span programs, and its powerful search engine helps you to find and watch programs going back many years. to watch on your television c-span publishes an on-air schedule for all three networks and this radio station. servicerg is a public of your cable and satellite provider. if you are a c-span watcher, check it out. it is on the web and c-span.org. >> treasury secretary jack lew discusses the global economies in a breakfast hosted by the "christian science monitor." he also talked about puerto rico's debt crisis. this is moderated by david cook. it is just under one hour.

mr. cook: ok, we're going to start right on time this morning. i am dave cook from "the monitor." thanks for coming. our guest today is treasury secretary jacob lew. his last visit here was in july 2015, and we appreciate his coming back before his trip next week to anchorage and then to the g-7 foreign ministers' meeting in japan. our guest flirted with a journalism career while he was the editor of the forest hills high school "beacon." he evidently thought better of it and while in college caught the washington bug working for representatives bella abzug and joe moakley, earned a bachelor's degree at harvard and a law degree at georgetown. between 1979 and 1987, he learned politics from a master in his role as principal policy advisor for the house speaker tip o'neill. as a speak assistant to president clinton in 1993 and

1994, our guest played a key role in helping design americorps. he was later deputy director and then director of omb. between 1998 and 2001, when he led the clinton budget team, the united states government posted a surplus for three consecutive years. he was chief operating officer of new york university and then chief operating officer for two different citigroup business units before joining the obama administration in 2009 as deputy secretary of state for management and resources. he became omb director in november 2010, white house chief of staff in january 2012, and treasury secretary in february of 2013. thus endeth the biographical portion of the program. now on to the riveting mechanical details. as always, we are on the record here. please, no live blogging or tweeting. in short, no filing of any kind while the breakfast is under way to give us time to actually listen to what our guest says. the embargo ends when our guest stops speaking. to allow you to file before the market opening, we will stop at 9:20. to help you curb that relentless selfie urge, we will e-mail several pictures at the end of the session to all the reporters here as soon as the breakfast ends, and, as regular attendees know, if you would like to ask a

question, please do the traditional thing and send me a subtle, nonthreatening signal, and i will happily call on as many reporters as we can get to in the time we have this morning with secretary lew. we are going to start by offering our guest the opportunity to make some opening comments, and then we will move to questions around the table. thanks again for doing this, sir. appreciate it. mr. lew: thanks so much. thanks for having me this morning. i feel like i'm 90 years old after hearing that biography. i wanted to touch on two things just at the top and go to questions. and i will start with domestic and talk about the g-7 a bit. domestically, what i want to talk about is puerto rico. we have been working very hard to try and address the growing crisis in puerto rico. it is not a crisis of the future. it is a crisis of the present. i was there on monday, and i saw firsthand with some of you what is going on right now for about 3.5 million americans who live in puerto rico. i mean, there are children's units where 2-week-old babies are waiting for dialysis because

dialysis has to be ordered cash on delivery with wire transfers on a daily basis to keep supplies in the hospital. it is not a future crisis. it is a current crisis. we saw schools that start out in terrible conditions where deferred maintenance is raising questions about basic safety. there is a solution. the solution is that puerto rico needs to restructure its debt. puerto rico does not have the ability to do that without legislative action, and we have been working on a bipartisan basis trying to reach agreement so that puerto rico can get the tools it needs to get its fiscal house in order, to have an

oversight authority that makes sure that puerto rico stays on a fiscally sustainable path. time is very short. the conversations have been making good progress, but they need to go from making progress to crossing the finish line, and that means that there needs to be a restructuring and it has to be a restructuring that works. it cannot be something that is just called a restructuring. let me shift, if i can, to the international and talk a bit about the meetings we are going to be having next week in sendai, japan. you know, it seems like every time we approach these meetings it's the right time for finance ministers around the world to be getting together. i think right now it is particularly so given the tremendous need to make sure that we all stay focused on growing global demand, using all the policy tools that we have to accomplish that and, equally, to refrain from the kinds of things that could be harmful to the

global economy, things like exchange rate policies that are getting the world into a place where you go from market-determined exchange rates to competitive devaluation. we have strong agreement in shanghai where the g-20 countries agreed to refrain from competitive devaluation. it is very important that that be reiterated at the meeting we have with g-7 finance ministers. a number of important and timely issues, ranging from the vote in the united kingdom on brexit to resolution of the greek debt problems, terrorist financing, cyber security, and financial regulation. i look forward to another productive set of meetings, but, as i say, i think it is an important moment for finance ministers to check in with each other personally. why don't i stop there, and happy to go to questions. mr. cook: let me do two quick ones and then we will go around the table. i've got a list of folks i'll read as soon as i do mine. you made your trip to puerto rico, the second of this year, and obviously, you have spoken about it very strongly this morning. do you have any news to share with us this morning about progress in terms of getting

something through congress before the july 1 deadline for their $2 billion payment? mr. lew: look, i think there is progress being made. i think that the discussions continue to go forward. you have democrats and republicans in congress trying to reach agreement, but you have a lot of forces on the process that make it challenging. there are a lot of individual interests that are making their views very clearly known, and i keep stressing to all the decision-makers that this is only going to work as a solution if it is a solution that is in the public interest, if it is in the interest of 3 1/2 million americans who live in puerto rico, if it is in the interest of having a stable financial outcome. i believe that is possible. i do not want to say that we are 100% there because obviously the talks are still underway. our team has provided an enormous amount of technical input, and the leaders,

particularly in the house on both sides, are engaged. i do believe it is a good-faith conversation. i do believe that there is an understanding that there is a crisis in puerto rico, and i hope that this is successful. what i know is the only way to solve the problem is for congress to act. so the time is now, and the stakes are quite high. mr. cook: let me ask you one other -- it won't surprise you -- it will veer into trump land -- you asked -- you said that it's -- the finance ministers should refrain from the kind of things that could be harmful. how much have you heard from your fellow ministers and or how much do you expect to hear about comments regarding renegotiating the u.s. debt and economic downturn, holding down the value of the dollar, or printing dollars to avoid defaulting on the debt? mr. lew: so i'm not going to

comment on the political debate. one of the attributes of being treasury secretary is you do not engage in politics. one of the things you do as treasury secretary is spend a lot of time making sure that we have the deepest, most liquid markets in the world, that our treasuries are the definition of safety. and that is something i have devoted the last three-plus years of my time to doing. it is what i will continue to do. i think the rush to safety when you see it in markets goes to dollars. dollars are the definition of safety. we have spent hundreds of years building that reputation, and is an important element of our economic and national security. mr. cook: we are going to go now to a reporter from bloomberg, sam fleming of the "financial times," kevin hall of "mcclatchy,"

heather scott of market news, jackie needham of "the hill," zack warmbrodt of politico, jon sopel of bbc, john gizzi from newsmax, and don lee from the "l.a. times," and laura barron-lopez of huff post, to start. >> hi. you are heading to china next month for the strategic dialogue for the economic relationship, and i would like to ask, against the backdrop of slowing global growth, china's increasing clout, and the u.s.' slight pivot toward a harder line toward china, what are the challenges you think the u.s. faces in regards to this relationship over the course of the next year? mr. lew: i think that the u.s.-china relationship -- i will limit myself to discussing the economic relationship -- but the u.s.-china economic relationship is one of the most important economic relationships in the world. we are the two largest economies in the world. the global economy will do well if we do well. it will suffer if we suffer. we have made clear in our dealings with china that they have to take steps that are good for china, but also good for the global economy, that there is a responsibility that comes with being one of the two largest

economies in the world. i think we have made progress in the economic discussions, but we have a lot more progress to make. i believe that the chinese economic policymakers understand quite clearly what they need to do to have a strong economic path for the future. i think their challenges, not surprisingly, are political, not analytic. they know that having excess capacity that is distorting both chinese and global markets is not a sustainable economic path. on the other hand, they also have the challenge of how do you reduce that capacity and manage the human consequence of millions of jobs being lost. i am encouraged by the fact that the economic policy experts there are not doing it because they think we want them to do it, they are pushing it because they believe it is in china's economic interest. i do not take enough comfort to stop pressing because i think these are hard -- china is in the middle of one of the most difficult economic transitions that any country has ever gone through. to stay on the course of reform, to stay on the course of opening to market pressures, both in

terms of exchange rates and goods and services, is going to be very hard. i think that we have to continue to press as we meet at the strategic and economic dialogue and in other settings, and, you know, we have made progress, we will continue to make more, but it's going to require ongoing engagement. mr. cook: we are going to go to sam fleming from the "financial times." >> good morning. a couple of questions, if i may. one interpretation -- mr. cook: let's start with one just until we get around, and then have a followup, maybe. >> one interpretation being put on donald trump's comments about the dollar is that he no longer believes in a strong dollar policy and would move to a more competitive approach on currency. would that be the wrong path,

and does that make it harder for you in your dialogue with other ministers when you have a presidential candidate making these kinds of comments? mr. lew: i speak for the administration based on the policy of this administration, echoing policies that have been consistent u.s. policies for quite a long time. you know, i think we have watched over the last couple of years where the u.s. economy's relative strength compared to other economies has led to a stronger dollar. the answer is for other economies to strengthen. it's for regions like europe, countries like china and japan to take the steps that they need to take to have their economies producing enough demand and enough economic activity so that the exchange rates naturally equilibrate through market mechanisms. we have urged -- and "urged" is a soft word -- we have exhorted countries to adhere to the commitments that we have made in the g-7 and the g-20, because if other countries start moving towards competitive devaluation,

it will start a chain reaction, and if country a does it, country b will do it, country c will do it, and pretty soon you are in a battle over shares of a shrinking global pie. that will not help the global economy. it will not help the u.s. economy. i believe that message has been very much embraced at the g-7 and the g-20. really, since 2013, we have had strong agreements, and we have seen countries keep their agreements. we have also been very clear that if we see countries deviate from the agreements, it would be a very damaging thing and it is something that would do real harm to the global economy and to relations. so that's the position we have taken. it's the position we are taking. and as i said earlier, i'm not going to comment on any political things. >> do you want to do a followup before we go ahead, go to the next --

>> if i would, that would be great. it was actually more specifically on japan, if that is possible, and currency policies. clearly, you gave a very strong signal to the japanese at the imf spring meetings that markets were orderly and that it was not an appropriate time for them to be intervening. do you think that message has been heard, and what will your message be at the g-7 meetings on the same topic of the yen-dollar situation? mr. lew: you know, i addressed the issue just a few weeks ago. my view has not changed. i think that the challenge in japan is a much deeper economic challenge. japan needs to bring all of its policy tools to bear. they have had a long period of economic challenge, either negative growth or flat growth. and part of the problem is they have not brought to bear all the tools, fiscal policy, monetary policy, and structural reform. they have used the tools, but have not done them in a coordinated way. you know, we have urged japan over the years to try to bring those efforts together.

i think it is reflected in the policies that prime minister abe has announced in the three arrows. we have seen alternately more emphasis on one arrow than another, but an awful lot of emphasis has been on the monetary arrow. fiscal policy, you know, they have real challenges. they have a deficit -- a debt of roughly 200% of gdp. on the other hand, if they put the brakes on fiscal policy too soon, it will have a very negative impact, and they need to have a medium- and long-term approach to bringing their debt under control, but not to bring on short-term economic decline. structural reform is an area that has been very slow to make progress. one of the major elements of structural reform is really contained in the tpp, the pacific partnership, where they would undertake reform of their agricultural sector as part of

their tpp commitments. i think it is one of the reasons why it is so important to maintain our unity in pressing forward on having the implementation of the agreement, but japan needs to do it for its own sake. they cannot just rely on one of the levers. they need to use all of them. so my view on japan has remained the same. >> kevin hall from mcclatchy. >> i was prepared to ask several questions -- [indiscernible] the two-pronged question about the panama papers and what keeps you up at night, separate from that. on the panama papers, why did you choose -- or, more broadly, beneficial ownership -- why did you choose not to support the existing legislation on the hill that is there, that goes -- most people think goes deeper than what yours does, and who is going to carry it, your water, on the hill, who is going to

push this new obama proposal on the hill? and then on the what keeps you up at night, the front page of "the new york times" today talks about swift, the second breach of the swift code, the swift system, rather. were you aware of this? how concerning is it? and hedge funds losses are also piling up. how much does that trouble you -- mr. cook: that's three. >> three related questions. mr. lew: so let me start with the question about beneficial ownership. we have, i believe, been one of the leaders in the world in making strides towards transparency in tax and beneficial ownership issues. we passed faca with congress and created a standard globally for the sharing of tax information so we could get at the question of tax evasion that is associated with the concern over

beneficial ownership. countries around the world are adopting that standard. we actually need more legislation in the united states in order for us to be able to exchange information fully, so we have gone from being the leader to now needing to take steps to make sure we can take the meaningful next step to make that regime most effective. on beneficial ownership, we issued rules last week which, using authorities that we have under existing law, do a great deal to give us the ability to get more information on who the ultimate owners of various things are. on the legislative front, it is not a new proposal. we have been proposing legislation for some time. we very much want to work with congress to come up with an approach that will have bipartisan support, and enact it, because there's limits to what we can do using administrative authority. and i hope that the focus on this issue, which is not new for

treasury and it's not new for the administration, but is somewhat expanded in terms of global discussion, creates an opportunity for us to make progress on that issue, even this year. you know, i am asked what keeps me up at night, and i have to say, given the days i lead, i sleep at night. so i never can answer that question in its literal form. i think we live in a world with considerable tail risks, and that is why you see, i think, volatility in so many moments in the markets. i think it is a mistake to focus exclusively on risks, because i think that if you look at the base case, the base case is pretty strong. it's the u.s. economy is doing well. the global economy is continuing to grow. and we cannot define the risks as the base case. on the question of cyber security, we have focused on cyber security very closely. treasury is the lead agency in

the financial sector. we work closely with industry in coordinating with the department of homeland security and other federal agencies as issues arise. we share information and get our hands around it. i am not going to not comment on any specific matter that is under investigation. i am just not going to comment on any specific matter that is under investigation except to say that when i meet with ceo's, you know, it is telling that for myself and for them, this is one of the issues that we are on a daily basis aware of what is going on in the areas of our responsibility. that was probably not the case 10 years ago. i think this has reached a level where it is an issue that leaders of organizations have to focus on, and that is a message that gets down deep into the organizations, that when you have an issue, you have to resolve it. you can build your defenses up to a point, but you also have to have an ability to manage,

because financial institutions like so many others are faced with thousands and thousands of challenges every day. when one gets through, you need to fix it and make it harder the next time. but we have to keep up with it. we do need to make sure that information sharing is in a place where when a problem occurs, it is surfaced and shared so that others do not have the same exposure and so that you get to the root cause as quickly as possible. mr. cook: heather scott of market news. >> thank you. you mentioned that you want to see the g-20 -- or g-7 reaffirm its commitment to avoid competitive devaluations. this is something you said before, including -- mr. lew: we have achieved it, actually, at the last two meetings. >> correct. you said it before, because you mentioned it here in washington after the imf meetings. but you said it needs to be reaffirmed, which indicates you're concerned about possible slippage or -- in that

commitment. what is the level of concern that the economic problems might lead to? mr. lew: look, i think that meetings are not just about communiqués. meetings are about having frank conversations by the people who make these decisions. and in shanghai, there were two elements to the agreement. one was strong language agreeing to refrain from competitive devaluation. the second was an agreement to communicate so that there would be no surprises amongst the g-20 countries. it is very important, because there can be no miscues and missed signals, and there are legitimate concerns that many g-7 and g-20 countries have about their own domestic economies. and we have been clear since the agreement was reached in 2013 that domestic tools that are used for domestic purposes, like our quantitative easing, are different than exchange rate targeting to gain competitive advantage. and that is just a very important conversation to keep fresh, because economic conditions do not remain static, the pressures are not the same from month to month and year to

year. but the concern to have a stable global economy in a system where we are working together to try and increase growth and grow demand and not taking actions that will have a contrary effect is very important, because when we have around the table the key finance ministers and central bankers of the largest economies of the world, the decisions we make actually have an impact. >> thank you -- [indiscernble] drawing in the markets, that that might be a real risk -- mr. lew: you know, i have been focused on this for the last 3 1/2 years. you can fill in the blank as to where the concern is based on what current events are. but it is a deep conviction. you know, one of the things that was part of passing the trade promotion authority in the house was giving us new authority to expand our foreign exchange report to look at the kind of leading indicators of what might be concerns in terms of currency

practices. we put out our first report. it did not find that any country we put out our first report. it did not find that any country had crossed all of the lines. but it put some kind of yellow lights up there which have caused a lot of, i think, constructive international discussion. i suspect i will have conversations about that. mr. cook: vicky needham from "the hill." >> just a quick followup on what dave asked you earlier. are you optimistic about this puerto rico bill going through the house since it kind of keeps getting delayed? and, two, how are things going with the financial services industry on the tpp provision that they have trouble with? are you optimistic that tpp will still get through this year in congress despite all the political rhetoric? mr. lew: so i think the substance is more important than the schedule as long as it gets done in time on puerto rico. i think rather than have a bill that there's not agreement on a day earlier, it is better to wait a day and try to reach agreement. so i would not confuse delaying

a day with lack of progress. sometimes a delay can be a sign of progress if you're getting close to something. what the jury is still out on is whether we will get to that point where we can all agree that there is a restructuring package that will work. our standard has been quite clear and quite simple. there has to be enough of the credit in the restructuring for the restructuring to work, and the mechanism has to be clear and certain enough that it will work. and there's a lot of technical detail behind it. but that is what we are struggling to achieve. there are a lot of stakeholders out there who do not want to have their debt part of the conversation. if they succeed in pulling their credit out, it might be called restructuring, but there's not enough on the table to effect a restructuring that works. so that is what this is really about, and it is not nothing unusual. i am not shocked that there are individual stakeholders who want to have a provision that protects their interests.

but if those interests get protected, 3 1/2 million american citizens in puerto rico will not have an economic future. and that is what this is about. we have to make sure this is in the public interest, not just in some private interest. that restructuring is not a radical idea. restructuring used to be considered a conservative idea. it is a way to avoid bailouts. it is a way for the people who have taken risks to bear the burden of their own risks. puerto rico is an unusual spot because as a territory it does not have access to any orderly restructuring process. the alternative to an orderly restructuring is a chaotic unwinding. that will hurt puerto rico, but it will also create risks. we have not had a chaotic unwinding of a municipality or a sovereign entity in the united states in a very long time. that is more of a risk to the kind of confidence markets than a restructuring is, because a restructuring will create confidence if there is a clear and sustainable path forward. so that is what we are trying to achieve.

i do believe we're making progress. i do believe that there's a shared understanding that it is urgent. we're not yet at the point where everybody is together. hopefully, we will continue to make progress even over the next days. time is of the essence because july 1, there is $2 billion of debt that comes due. and between now and then, the pain will increase in terms of day-to-day life in puerto rico, but come july 1, that will be a default of tremendous size. getting at credit with a character that is constitutionally protected, which will force the commonwealth to make very dire cuts. if this gets to the point where they cannot pay their police and fire, you will ratchet it to a whole new level of crisis. i did not get your second question -- mr. cook: tpp -- she wanted to ask about tpp -- mr. lew: can i take a minute on that? mr. cook: sure, and especially where you have both hillary

clinton and trump saying negative things about it. mr. lew: on the data localization provision, which is what you are really asking about, let me start by kind of just defining why it is challenging, but i believe there is a pathway forward. there are two competing positive objectives that i believe we share with, certainly, the regulators and most of the financial industry. one is data localization as a general principle is something we oppose because it is a nontariff barrier to try to create local jobs by having server farms in your country. in the financial services sector, there is a real need for domestic regulators to have access to information in real-time. and that is something that the industry recognizes and regulators feel very strongly about. there has been a history of where it has been a problem for regulators to get at data when they need it, even during our

financial crisis. the challenge here is how to find a balance where regulators have the information they need when they need it, and you cannot have frivolous claims of the need for data localization just in order to create a nontariff barrier. i believe there is a path forward. i have been working closely with the regulators. i have been working closely with the industry. you know, this is not a case of a radical difference of objective. it is just hard because it is technically a complicated area. and regulators i think appropriately are concerned that we not open up a space where in the next financial crisis they do not have access to the data that they need when they need it. we are working toward a solution and making real progress, and, you know, i do not believe it will ultimately be an issue that is an obstacle to making progress on tpp, which i believe we will get done this year. mr. cook: zack warmbrodt from politico. >> thank you. could you talk about how the united states is going to allow

more investment in iran without allowing dollar clearing? and do you want to respond to the hsbc legal officers' op-ed in "the journal" yesterday saying they plan to do no new business in iran? mr. lew: i think the policy of the u.s. government has been very clear. we have worked across the u.s. government to put the maximum pressure on iran for a long time to come to the table, to negotiate a resolution of the nuclear issues, and to get iran to step away from developing a nuclear weapon and to close all the pathways. we achieved that in the negotiations, and the purpose of sanctions is you put sanctions in place to get an outcome -- in this case, the nuclear agreement -- and then you have to remove the sanctions, or else there is no incentive for sanctions to produce the policy outcome that you are looking for. we have been very clear. i have been very clear.

the nuclear sanctions were lifted on implementation day because iran complied and we complied. we make an agreement, we keep an agreement. that is critically important. we have gone around the world to make clear what that means, what sanctions have been lifted, and what that permits. it is not our job to tell businesses what business decision to make. but it is our job to make sure they understand what the risks of sanctions are and what they are not. now, iran obviously continues to be subject to sanctions for other reasons. they are subject to sanctions for their support of terrorism, for their regional destabilization, for the human rights practices, and those are very important issues. we have continued to designate entities under that even in the last several weeks. that doesn't mean there is not a space where the lifting of the nuclear sanctions opens the possibility for firms to do business. that is the message we are conveying. there are different rules for u.s. firms than there are for international firms because we

have an embargo and other countries do not have an embargo. and it is understandably a complicated terrain. i believe that, you know, we have to keep our part of the bargain in the iran deal as long as iran keeps its part of the bargain, and i think we have to be clear in communicating that, but firms have to make their own decisions as to what level of risk they are willing to take and who they are prepared to do business with. mr. cook: we're going to go next to jon sopel from the bbc. >> can i ask you, your assessment of brexit and whether you think it could tip the u.k. economy into recession, and what headwinds it might produce for the global economy and the u.s. economy. mr. lew: you know, i have been clear in my comments over the last few months. the president was very clear in his comments recently when he was in the united kingdom. it is a decision for the people of the united kingdom to make, but our evaluation is that it is both economically and in terms of geopolitical stability in the

best interests of europe and the united states and the kind of global stability for the u.k. to stay in. we are talking a few minutes ago about the tail risks that are in the world. many of those tail risks are not economic. many of them are geopolitical. europe being stable and strong is a source of strength. europe being more challenged and threatened is a source of anxiety. one can get specific about what the economic consequences are. i know that her majesty's treasury has put out some analysis that i have looked at that suggests on a household basis there is substantial risk, that there will be shrinkage in u.k. economy. whether that drives you from growth to recession, i do not know. but we all in roles like mine

look to try to grow economies and grow household income and to avoid policies that shrink economies and shrink household income. so it seems to me to have a powerful message there. the future of a negotiation like ttip offers a lot of benefit to europe and the u.k. i think there is a host of reasons why, from economic to geopolitical considerations, it is better for the outcome to be the u.k. staying in. but again, it is a decision the people of the u.k. have to make. mr. cook: john gizzi from newsmax for our next -- >> thank you, dave. mr. secretary, i know you said the secretary does not get involved in politics, he stays away. so would it probably be a waste of a question to ask how the credit markets and central banks

internationally would react to a donald trump election? mr. lew: well, now you are in two areas i do not comment on. >> that is what i thought. but give it a try. mr. cook: a sneaky way to get a third question. go ahead. >> third, ok. the other question i did want to ask was, you talked about the u.s. economy, the global economy growing, and yet the simple way of asking questions, why aren't americans shopping more? macy's has had a 60% drop in retail, as you probably have read, and americans are simply not shopping and purchasing right now. why, and will this change? mr. lew: well, first of all, i do not think that is an accurate description of u.s. consumer. we have seen from the beginning of this year a strong u.s. consumer. we have seen very strong automobile sales. we have seen strong retail sales. i am not going to comment on firm-by-firm earnings, but while we have been sitting here, the

retail sales numbers come out, we will see what the latest numbers are. but the trend in retail sales has generally been quite positive. the u.s. economy is 85% consumer driven. the consumer is driving the growth against pretty substantial international headwinds in terms of demand that is weak. so i actually think that both in the united states and globally the description of u.s. consumer as weak is not correct. you know, there are different experiences in different sectors and firm-by-firm experiences based on their businesses. i am not going to comment on that. but i do not think that that is an accurate portrayal of where the u.s. consumer is. >> don lee from the "l.a. times." >> the administration and your department in particular have issued a number of administrative actions, regulations -- [indiscernible] including protection -- mr. lew: i can't quite hear you. >> i wonder if there are more, especially consumer protection

regulations, that you would be rolling out and what kind of legacy the administration would have on terms of defending consumer protection? and then, and if i may, mr. secretary, on puerto rico, i wonder if you have concerns about the rescue package, what implications or what precedent that it may have for a state like illinois, which is in dire financial straits? mr. lew: in terms of consumer protections, there are many parts of the government that address that, but we are particularly focused on at treasury is the consumer financial protection bureau how important the work that it does is. there was not an agency before the creation of cfpb that watched out for consumer interests the way cfpb does. if you get a mortgage today and you see the documents that go along with that mortgage, people can read them and understand them. they could not before.

there are practices that contributed to the financial crisis that may not have happened if people understood what they were buying and what they were committing to. i think the cfpb in so many areas has done important work, and not just that it has done important work, it has done work that has been widely seen as constructive by both consumer and even business groups, that i find somewhat perplexing and confusing the attacks on the cfpb that continue. we will continue to defend the work that is done there and the agency and resist attempts to roll back something that we think has just been incredibly important, and i think director cordray has done an extraordinary job establishing the cfpb with a high standard of quality of work and outcomes that make a difference in a way that actually, when you talk to people in business privately, they are pretty impressed by. in terms of puerto rico and the

precedents, i do not believe that there is a risk of this being something that triggers the kind of reaction that some of the very deceptive advertising has created fears of. first of all, the markets understand that puerto rico is different than other municipal credits. the spreads for puerto rico credit have not been spilling over into other issues. in the municipal market, credits are looked at really within the four corners of the risk that investors are considering. as far as whether this is a precedent for states, the legislation is territorial legislation. it does not apply to states. the territories are exempt from our current restructuring laws because of a provision that frankly has no legislative history, that it is hard to get

an explanation of why. and i think that the lack of a restructuring authority in puerto rico is something that has to be fixed. if you are a governor, you have quite a lot of tools at your disposal to solve a debt problem and an economic problem. a territory by virtue of its size and the scope of options available is fundamentally different. it has a status that is unique, and at the moment it is neither fish nor fowl. it does not have the tools that a state has. it does not have the tools that his city has. if congress does not respond and give puerto rico the ability to restructure its debt, the only alternative it has is a chaotic unwinding, and then question of a bailout will be presented, and i do not see any support for a bailout, which means the only solution in puerto rico is orderly restructuring. i do not believe there is a governor in this country who would voluntary step in to the kind of oversight and challenges

that is involved in what puerto rico will go through if this legislation, when this legislation is passed, you know, because they have a different kind of tax base, they have a kind of spending base. mr. cook: we've got about eight minutes left -- mr. lew: and excuse me, puerto rico is unique in terms of the amount of debt it has and the extent of the insolvency. mr. cook: got about eight minutes left. we're going to go to laura barron-lopez of huffington post. >> hi, thank you. going back to iran for a second, they suggested that u.s. primary sanctions have prevented them from accessing frozen assets, and i am just wondering is there any consideration of granting them access to u-turn transactions to address that? mr. lew: yeah, we have not given any daylight on this question of u-turns. i think you have to distinguish u-turns from foreign banks doing business in dollars.

the dollar is the world's reserve currency. financial transactions in financial institutions around the world take place in dollars. that is very different than a u-turn where our financial system is part of the transaction. and i think some of the opponents of the iran deal have tried to conflate the two. you know, as long as the dollar is the reserve currency of the world, it will be used in financial systems other than the united states. that is very different than opening the u.s. financial system. mr. cook: david lawder from reuters. >> thanks, dave. i just want to come back to the swift network. is the swift network safe? has the treasury tested it and did you find that it is secure? also, on the g-7, a lot of these countries are having very much difficulty with china's imports from china right now. a lot of their overcapacity is coming to their shores, including ours. what sort of message will the g-7 have for china, given that china really will not be at the table. mr. lew: i am not comment on any of the specific investigations that are going on now regarding

the cyber issues other than to say that every time there is an incident, it is taken very seriously by all of the relevant authorities, and there's no exception here. in terms of china and its impact on markets, we obviously have conversations in different groups at different times. we are going to be meeting at the g-7 next week. just a couple of weeks later, we will be in china for our strategic and economic dialogue, and later in the summer in july, will be back in china for another g-20 meeting. we will have many occasions over the next several months to continue this conversation in appropriate settings. you know, i think that the impact of china on the global economy has different ramifications depending on what your economy is doing.

if you are an emerging market, the impact is largely the slowing of demand for commodities. if you are a manufacturing economy, it is a question of whether chinese economic conditions are distorting global markets like steel. i think there's a pretty broad concern that china's overcapacity in things like steel and aluminum is distorting global markets. that's why there has been so much focus in bilateral conversations with china on the need to continue the reform program and to put in place policies that will start to shrink the excess capacity. and in the week after that g-20 meeting in shanghai, china had a meeting of its national people's congress where they unveiled policies that would shrink their excess capacity. the challenge now is to implement those policies and to do it in a way that is effective.

they will have to worry about the human impact, you know, just as when we talk about trade policies, we talk about things like trade adjustment assistance. they will have to take some measures to cushion the blow for workers, but it cannot be by propping up industries that are producing excess capacity or it will backfire. now, they have to take the steps in their system, which is complicated, because the state- owned enterprises and the local governments and the social structure are all closely connected. but it is not all that complicated. if they do not reduce excess capacity, they won't stop distorting global markets. mr. cook: we're going to go next to ian talley of "the wall street journal." >> thank you. there has been some disagreement, it seems, between tokyo and washington over the yen's movement. you have said it is orderly. tokyo has said it is disorderly. "disorderly" is the appropriate term for intervention under the g-7 agreement. do you think if tokyo were to

intervene now, would it be an inappropriate intervention? would it be competitive devaluation? and, secondly, on greece and its debt, the imf has been pushing for a credible program that adds up. is there risk that a compromise between germany and athens could breach this credibility exercise, not getting enough debt relief, not having credible exercises on a fiscal policy? is the u.s. going to support only a credible exercise? mr. lew: i think on the question of exchange rate policy, we have been crystal clear about our views, and, more importantly, we have strong agreements in the g-7 and the g-20. japan is a signatory to those understandings. they have kept their commitments. it is important for all

countries who make commitments in the g-7 and g-20 to keep them, and we will continue to have discussions. it is important, as i said earlier, that one of the things we agreed to was to consult with each other so there would be no surprises. on the question of greece, i believe that debt relief is a critically important part of the conversation. the time for that is now. it should not be put off. greece is enacting legislation to implement very difficult provisions of the program that they agreed to. they have more steps to take. i have made it clear to greece that they need to continue to take the steps that they have committed to. but i have very much indicated to all of the parties that we believe that debt relief is necessary. i think the imf has been advocating a number of things, both in terms of the need for debt relief, but also they have argued that the targets for savings are too high, that you

have a tension here where some of the europeans are looking for very high savings, resisting debt relief, and in that world it is a hard problem to solve. there will have to be some give in these conversations. i think that there is a space where the parties could agree. there is some optimistic news coming out of conversations that happened at the finance ministers' meetings this week, but, frankly, one of the topics that i will be talking to people about on the sidelines of the g-7 meeting next week is exactly where they are, because one of the things we have made clear is that it is just not going to be

a good thing for the global economy or for geopolitical stability for there to be a repeat of the kind of dramatic crisis that we have seen in greece in the past. you know, particularly at a time when you are approaching a vote in the u.k. on brexit, it would be a very unfortunate moment to have another round of high-wire negotiations on greece. all the parties have said that they believe this can be resolved in may. i have yet to see where that point of agreement is, but, obviously, i hope next week to -- that we see the signs of progress there. mr. cook: we are at the time we agreed to stop. i want to apologize to colleagues who did not get a question, and i want to thank you, mr. secretary, for taking the time to do this. we really appreciate it. mr. lew: thank you. good to be with you. mr. cook: hope you come back. thank you, sir. [indiscernible]

>> we will have more on puerto rico's debt crisis on this week's newsmakers with our guest congressman rob bishop during the natural resources committee which is drafting a debt relief bill. here's a preview. >> you have tried several different versions of legislation to try to leave the territory with $70 billion in debt. is this something you think that you can get past? rep. bishop: yeah, all the versions that have been out

there that people are referencing, the fundamental issue has always been the same. there needs to be some way of providing security so there will be an oversight board that will go down there, work with the government to come up with a plan in which they will get their financial house in order, they will be able to pay off their debt and then they will work with the creditors who, by and large want to save puerto rico. they want to get their money back so they will be able to come up with that plan. the board will have the ability of making sure that plan is it hereto and followed through. that gives the security to the creditors so they can stay involved and they may have some readjustments or restructuring of the debts they have, most of it will be voluntary. we can get some kind of financial order going forward. that is based on precedent. it has been done in the past. i'm confident it will work here. the basic concept of what we want to do has been agreed to by everybody that is a player. i think regardless of what the final version is, that basic

structure will be there. >> is the something -- you have had a lot of opposition from different sides and it has been not to the central structure of the bill but to smaller parts. creditors are concerned they will not be a priority. democrats in congress are concerned about a couple of provisions involving lowering minimum wage for younger workers. what compromises have you made to some of these people who are concerned about this bill and do you think that your final version will be able to make it through congress? >> each draft was a compromise. the common bond is the underlying assumptions that there will be no bailout, there will not be government money going down there, taxpayers will be held harmless but everyone will get paid.

the investors will get paid whether it is pensions or the bonds, the ones that are general obligation bonds, all those will be made whole and property rights will be respected and the constitution of puerto rico will be respected at the same time. all those things have not changed and that will be the basis of what is going on. >> you can watch the risk of our interview with congressman rob bishop on a newsmakers on sunday here on c-span. russell service. the senate foreign relations committee holds a hearing. in about 45 minutes, we will talk to amy goodman about the role the end of the media in the

campaign. judicial watch will discuss the lawsuit. host: good morning. it is saturday, may 14. our topic today is unity in the democratic party. there is about two months to go before the convention in philadelphia. hillary clinton has an almost insurmountable lead. bernie sanders has vowed to stay in the race. will they be able to come together? let's get your thoughts this morning. we are taking democrats only for this segment. if you are a bernie