[0:00]temporarily uh halt or provide for a tariff exemption process for specific tariffs on home building supplies. It's a broad complex issue. If you want
[0:13]to make furniture in America, you have to protect furniture makers. That that type of question is a very detailed and complex one and worthy of discussion.
[0:23]And I'm glad to sit with you in your office to talk about it. What do we want to make in America? and whatever we don't want to make in America, we should try to do inexpensively to the extent we can.
[0:34]>> Well, thank you. I look forward to the conversation. My concern is that overwhelmingly the supply of things like softwood lumber from Canada and a wallboard or gypsson board from Mexico
[0:46]um are being constrained by tariffs. Um these are close allies that work with us through the USMCA framework. um they've pushed back hard on the tariffs that are being imposed on their products that are
[0:57]exported into our market. Canada's the largest export market from most American states. Uh I think at a time when there's very little we can actually do in the short term to reduce the cost of
[1:08]housing. This is something we might work together on. Um last, a closing comment if I might, Mr. Secretary. Um Senator Van Holland asked about your engagements with your former neighbor, Mr. Epstein.
[1:19]Uh I was encouraged to see your u declaration that in 2005 you concluded he was a disgusting man with whom you should have no contact. Uh I wish many others reached that conclusion upon
[1:30]meeting him. Um but it troubles me that you took your family to lunch on his island that you had appointments with him. Please disclose everything. Put
[1:40]this to rest because this is an issue of grave concern to my constituents. President Trump ran on releasing the Epstein files. You said casually, "Well,
[1:50]I looked at my name and how it appeared in them, as does everyone." No, everyone isn't worried about their names being in the Epstein files. I know he was your neighbor. That was a coincidence, but
[2:01]please disclose everything that's relevant here so that we have a chance to work together and move on. To the best of my memory, I met him when he moved next door to me and I met him
[2:13]two other times in 14 years. None within six years of that first meeting and then a year and a half later and none thereafter. and in the presence of my
[2:24]wife. And as uh Senator Van Holland said, under no circumstances is there a single word that I've done anything
[2:32]remotely wrong in any possible regard. I did not have a anything you could call a relationship, anything you could call an
[2:42]acquaintance. I literally met him three times over 14 years with widespread in between. That's all I can remember. That's all there is in the documents. I
[2:53]didn't look through the documents with any fear whatsoever because I know and my wife knows that I have done absolutely nothing wrong in any possible
[3:04]regard. >> Thank you for answering our questions today. >> Senator Mkeley. >> Uh thank you, Mr. Secretary. Um we are
[3:14]finding in Oregon that at places where we were trying to get microwave relays that it it is now workable to use uh satellite for broadband and in my rural
[3:24]town halls people are starting to give uh reports and strategies are adjusting but still a variety of strategies are appropriate in different places as you've pointed out. uh federal poverty
[3:35]level. My my colleague suggested that the 11% is an overstatement of of people living in poverty. I would suggest the exact opposite. That federal poverty
[3:46]level calculation, are you familiar with how that's put together? >> Not exactly as I said. >> Okay. Well, when it was put together, food was approximately onethird of the
[3:55]cost of basic living. So, it's based on food times three. That's the that's the calculation. So over that time, the other components that are necessary for
[4:06]life like housing and and health care and daycare have gone up enormously. When you take those into account, the 11% really understates dramatically the
[4:18]number of families in America that are are struggling with the the fundamentals. I'd like to encourage you to take a look at that formula. I think it should be rewritten to reflect what the kind of the basket of goods are
[4:30]necessary to have a basic life in America. So we could have a much more accurate picture. This formula explains why
[4:39]folks site well uh not very many people are struggling. Isn't that great? When the reality on the ground, I live in a blue collar community. I travel every part of my state. The reality is a
[4:49]tremendous number of families are struggling. And if we don't adjust our policies to understand that and we don't even have an accurate way of of calculating it, we're really failing to
[4:59]uh understand the basic economics and challenges in families in America. >> I'm happy to sit with you and go through the details of that. I think more
[5:10]knowledge, more specificity is always helpful and I appreciate going through that with you. >> Great. I look forward to that and I just en encourage you to have your team look at that formula and then look at what a
[5:21]much better formula would would would be uh to reflect what's going on in in our in our country. Uh, last time we talked, we talked about the manufacturer
[5:30]extension program and you agreed to get together for a meeting. But before that meeting was planned, the Oregon MEPs were were funded. Uh, which was great
[5:40]because small business striving to do manufacturing is essential to a vibrant uh, economy. Um, but only part of that money has been dispersed in Oregon and I
[5:51]understand some of the grants in other states have not been dispersed at at all. We're now in the situation where in fiscal year 25 we had 175
[6:03]million allocated to the manufacturing extension program. Do you know how much of that's been dispersed now? >> I do not know offhand. >> Can can you try to get the rest of it
[6:14]out the door? What if whatever hasn't been dispersed? >> I'll be glad to look at it and get together with your office and discuss it. Sure. >> Yeah. Thank thank you. And I I really
[6:25]would like to see for what we're we're now doing for FY26. I think I'm not sure where the disconnect is because the president talks about wanting to have
[6:36]manufacturing. I've done a made in America a made in Oregon manufacturing tour of my state done a number of times over different years. And these uh small businesses that do all kinds of
[6:47]different things um are great employers in small towns and medium towns and they they sometimes they become big businesses o over over over time. Why is
[6:57]it that the MEP program hasn't been like a a shining star of like the first thing you that you wanted to get out the door? I think the problem has been that the
[7:08]inspector general's office in many of these locations have had problems with the offices that executed that. There's been
[7:17]more than a than you would expect issues of waste, fraud, and abuse from these offices. And I think the objectives of the program are sound. I think the
[7:29]execution needed better oversight. And I think that's one of the things we are deeply focused on is trying to clean that up and that has been an issue that we've had to address.
[7:39]>> Great. Um, so I I I appreciate you taking a close look at that. Uh, and look forward to this. Well, last time we
[7:50]were planning to meet, you took action before we met. That was great. I hope that can happen again. I want to just uh summarize the reason and I can hear the angst in your your voice over the
[8:01]Epstein files. The reason people are bothered is because last year you said you'd cut off all contact. But there are eight
[8:10]instances of interaction uh in the in the files after 2005. Uh in 2009 you wanted to speak with Epstein. You asked for his phone number.
[8:22]In 2011, there was the appointment for for drinks. In 2012, uh you were planning a trip to to uh the private island with your your family.
[8:34]That sounds like, you know, somebody you know well enough to call up and say, "Let's get our families together. Let's visit each other." in 2013.
[8:43]Uh the uh exchange of information about an article relating to intellectual property and gambling topics that you have an interest in. Uh you've both signed up for an an investment. It's not
[8:55]clear if you had conversations about that same investment, but you were neighbors. You made the same investment. Maybe, maybe not. Uh the um
[9:04]uh and then in in uh 15 um Mr. uh Pollson in 2017, Mr. John Pollson
[9:16]wrote and to Epstein saying, "Uh, hey, why don't you contribute to this event? You're a close friend of the Lutnics and it's honoring Lenik." Again, that wasn't may not have been you personally
[9:26]involved in that, but I know from many events um when people are raising money, they say, "Who do all do you know that might be contribute if I'm honored?" And
[9:36]one supplies a list. Uh, and so I guess collectively it suggests that when you said you cut off all contact in 2005, that was probably not a full and complete
[9:47]accounting. And again, no suggestion of wrongdoing on your part in propriety uh, if you will. But I I I do think kind of uh, restating
[9:58]that and clarifying to people that you understand that your statement you made last year might not have accurately portrayed. And then there was also the communication regarding the museum
[10:08]across the street being put up and that action needed to be taken and what should we do. So that's eight different instances. Just encourage you to be completely frank and open with everyone.
[10:19]Correct the record as needed and and u and and again no wrongdoing on your part. Thank you. >> Thank you, Mr. Chairman. Welcome, Mr.
[10:31]Secretary. It is nice to see you here today. I look forward to being able to visit with you about some of the programs in the commerce department. So, thank you for being here. In December, I
[10:42]wrote to NTIA with over a dozen of my Senate colleagues, including Chairman Moran. And this letter urged the agency to ensure that states would be allowed
[10:53]to retain and to maximize their bead funding allocation in compliance with the bipartisan infrastructure law which
[11:02]I supported. I know Chairman Moran has also touched on this in his questions with you this morning, but first and foremost, do you agree that states
[11:12]should be able to retain those broadband infrastructure dollars as is consistent with the law?
[11:21]>> We will hue to the law for sure. I think the best use of those funds I think we need to talk about and try to come up
[11:31]with the best idea. But we have saved the American taxpayers $21 billion. And I think it behooves us to work hard to make sure the next use of those funds
[11:42]are the best they can be for the American taxpayer >> as it um and I I agree uh that you need to follow the law, but with the uh
[11:52]bipartisan infrastructure law, I personally think it was um laid out u pretty pretty clearly on how those funds
[12:01]need to be maximized. And I happen to think that that states are the places that we experiment. I'm a strong supporter of federalism and every state
[12:12]is different to be able to use those funds in a way that address the differences uh in our state. So I look forward to being able to visit with you
[12:22]more about that and um and make a good case to you about it, sir. So thank you. In December, I also wrote a separate
[12:31]letter to NTIA and I encouraged the agency to allow precision agriculture connectivity to be an eligible use of
[12:41]the bead non-deployment dollars. Optimizing last mile deployments with last acre connections is critical for
[12:52]agricultural states like Nebraska. This eligibility would leverage the deployment plans that NTIA has already approved, enhancing networks and driving
[13:04]economic development throughout rural America. And these are goals that the infrastructure law explicitly outlined. So will you work with me to ensure that
[13:15]precision agriculture considerations are addressed within eligible uses for the remaining bead funds? I look forward to talking with you and
[13:26]addressing uh precision agriculture. It sounds something worthwhile and we will spend time together learning it and figuring out the best way to do things. >> Wonderful. I'd love to have you uh host
[13:37]you in Nebraska with the university uh to be able to u see all the really cool stuff that technology can do with
[13:48]precision agriculture and how that's going to not just benefit uh egg producers and states egg state states like mine but how it's going to be able
[13:58]to um manage our resources whether it's water or land and feed the world. So, let me host you in Nebraska. >> Sounds like fun.
[14:08]>> Yay. Okay. And um Mr. Secretary, after the benefit of the bargain rounds, there's estimated to be over 20 billion
[14:19]in uncommitted bead funding uh funds that are remaining. And as you imagine, for senders like me who strongly supported the infrastructure law, we
[14:29]believe that funding needs to be put to best use. again by staying in states to close that divide. I know um you've
[14:39]talked about how NTIA has a public listening session tomorrow to inform its determinations, but would you please discuss some of the
[14:50]initial proposals that the department is considering at this time for using those non-deployment funds? >> Sure. The department has received uh
[15:05]ideas for example to invest in polls in locations that don't have sufficient polls to get access directly to uh
[15:17]communities. That would be an example. Another example is to invest in public safety so that the um the police, the firemen, the local community can do a
[15:29]much better job communicating with each other in times of crisis. So that would be another example of how you could do better investment in the communication infrastructure.
[15:40]So those are two examples that just come to mind quickly. Um but tomorrow we will get you know a broad group of examples and I think we'll be much better served
[15:51]just talking to you and uh and yourselves and your staff if they'd like to talk to us we'd be glad to learn their ideas. >> Great. You know I think um tellaalth is
[16:02]a wonderful investment to be able to help um uh communities across the board. uh cyber security. Obviously, you're
[16:12]very well aware of the issues that um businesses, communities, government faces uh with regard to u being hacked
[16:21]uh interfered with on our on our systems. So, cyber security I I think is another great area to be able to look at as well. So, I I look forward to having
[16:33]conversations with you and I appreciate your work. Thank you. >> Thank you, Mr. Chairman. Um, hello, Secretary Lutnik. I I have a uh a couple questions related to the bead program,
[16:44]but I have another question, a couple that I'd like to ask you about what I think is probably one of your principal responsibilities as Secretary of Commerce, and that's the conducting of the US Census. Uh, I'm a ranking member
[16:55]of Homeland Security and Government Affairs. We oversee that. Uh, and it, as you know, it's a monumental undertaking that requires an awful lot of up upfront effort. Uh, and last week, uh, some
[17:06]information came to my attention. I'm concerned about is that the Census Bureau announced that it's going to cancel four of the six sites for the 2026 uh census test uh which was
[17:17]supposed to start uh next month. Cancelelling these tests uh and firing uh the people in your department who are already hired, they're already there, hired to complete it uh with no advanced
[17:28]notice. I think one first off is is wasteful uh at best and worst. Uh it seems as if there could be an effort to sabotage this effort, which I hope is not the case. Um I I believe that we
[17:40]can't have an accurate 2030 census. It's one of the largest, most complicated tasks in our federal government without proper preparation. We've seen that over many, many years. This is a template
[17:51]that we've had to follow. We need an accurate count of everyone who lives in America to ensure that communities and families receive the funding that they need for schools, for health care, for
[18:01]first responders, infrastructure, and so much more. And fully carrying out these tests is a necessary part of making sure that we're able to actually pull that off. So, given these facts, uh I just
[18:12]need a yes or no answer. Will you commit to undoing the cancellations of these four testing sites and commit to completing a complete census test which
[18:22]is an essential step in being able to do the full-blown version uh a few years from now? >> I appreciate the question and I agree
[18:32]with you. The test is vital and important, but I'd like you to understand, we are for the first time
[18:40]ever going to use the post office. The United States Post Office is going to execute the 2026 test. And the survey we're going to use is the American
[18:52]Community Survey. So, we are going to go out with a more sophisticated census and we're going to use the we've made a deal with the post office. So, we're going to
[19:03]pay the post office to execute that. But you can imagine the efficiency of already having hundreds of thousands of people who already work for the federal government, who already have cars, who
[19:14]already pay for the gas, and they already know where everybody lives. So, this is one of my big moves for efficiency. We are testing 2026 to see
[19:24]can the post office do it because our objective is I think the post office can do the census in 2030 do a better job
[19:33]because they go to 169 million homes every day. They should be able to do the census brilliantly and for far more efficiently. And the test as you
[19:44]correctly pointed out is coming very very shortly in 2026. So I think you know I'm happy to talk to you about it and go through it with you together so you can best understand what our plan >> that I appreciate that because obviously
[19:56]this is a big change uh and if it doesn't go well that has catastrophic impact. So so I would hope you would also commit as you're doing this and moving forward is that you will make all
[20:06]the planning results uh of the uh 26 census test available to the public and uh and to Congress so we can fully evaluate this together and that we can perform our oversight function. Would
[20:16]that be something you'd be willing to agree to today? >> Fully transparent with >> I'll certainly take that under advisement, but it makes perfect sense for us to talk about it and make sure
[20:27]this is a test of a new idea. Let's see how it goes. But I'd be happy to meet with you and your staff and go through it because that makes sense. >> Yeah, I'd appreciate it. And if it's not going well, it's hard to time is a
[20:37]wasting. So, it's important for us to really have a good sense of what's going to be going on. >> Well, that's why it's vital. Sorry. But that's why it's vital to do the test in 2026 for the 2030 census, right? That's
[20:48]why this test is vital. >> And it's also vital that we assess it fully to understand it's actually working so we can make a course correction uh if necessary. Also, on the topic of the census, has been reported that your department plans to add a
[20:59]question to the census test asking people their citizenship status. The Supreme Court has already overturned past efforts to include a citizenship question on the census. And it's because
[21:10]the Constitution, it's a great document, the US Constitution requires the Census Bureau count quote the whole number of persons in each state. End of quote.
[21:20]regardless of citizenship status. The Census Bureau's own research, your your own Census Bureau's own research has shown that asking immigrant questions on the Census will make it less accurate by
[21:30]making people, including citizens, less likely to participate. And that will be especially true now given the racial profiling, abuse of power, the violence
[21:40]that Americans are witnessing on the streets of America right now. And so given the hard evidence that asking immigration related questions actually sabotages the success of the census uh
[21:52]and the constitutional questions related to that as well, yes or no. Do you will you commit to leaving a citizenship question off of the questionnaire? Will
[22:01]you take that off? It's a uh Senator, it's a longer answer.
[22:12]I don't know how you'd like me to play it. It's not a yes or no. Sorry. >> Without objection, Mr. Chairman, you could answer the question. It is an important one. >> You correctly point out that citizenship
[22:27]is not in the constitution for the aortionment, right? The most important thing which is the 435 seats and the 435
[22:37]electoral votes are not predicated on citizenship. That is not a It's not a necessary factor to determine
[22:46]aortionment whether what the questionnaire is I don't know and we've not decided but I agree with you citizenship is not in the constitution
[22:58]for aortionment >> but just to the question the other part is that your own department has evidence to show that it has a chilling effect on people even participating in the census
[23:09]including including citizens uh and if they're not participating And then that is going to have an impact on their local community's ability to access public health benefits, education
[23:20]benefits and and the long list which I know you're very well of. It is very troubling and it's based on objective studies done by the Census Bureau. Having that on that test is going to
[23:31]undercount citizens based on research that has done. Doesn't that trouble you? I'm I'm not familiar with that uh being
[23:42]true, but I will look into it. >> Appreciate it. >> Thank you, Mr. Chairman. >> Senator Reid. >> Well, thank you very much, Mr. Chairman. Welcome, Mr. Secretary. Uh Mr. Secretary, you've referred and
[23:53]referenced that dozens of states have submitted complete plans for deployment dollars under Beard and signed final agreements. Uh Rhode Island, my state, has done that. uh they've signed our
[24:05]final agreement uh nearly two months ago but they have not got got any funding and they have no indications of what's lies ahead. Can you clarify the
[24:16]situation? What's the hold up? >> If your state has signed the agreement, they should be able to draw funds. There is nothing. Once we send you the
[24:28]document, if you sign it, uh you can draw funds from the grant uh grant process. There should be nothing in the way. And I'm happy as I leave here
[24:38]>> to go find out how I can help you fix that because if you've signed that, there should be nothing in your way >> to receive the grant proceeds. >> And you if you want a person to deliver
[24:49]it, Newport's a nice place to deliver it. >> Yes, it is. Yes, it is. Um, until you became secary,
[24:59]uh, you led the investment banker Fitzgerald and, uh, Can Fitzgerald is still maintaining significant business
[25:08]ties with Tether uh, a stable coin issuer bombiciled in El Salvador. And under the Genius Act, which was enacted last year, Tether is permitted to freely
[25:19]offer and sell a stable coin token in the United States without needing a license from US regulators and without needing to meet any US anti-money laundering and sanctions compliant
[25:30]requirements or obtain an audit. All it needs to do is demonstrate that El Salvador's stable coin regulations are similar to the United States. Uh and I
[25:42]think this is a huge risk because uh the Tether has been identified as helping to fund Hamas, North Korean WMD uh
[25:51]proliferation, ransomware attacks, Russian arms deals, etc. Now, you said in your confirmation hearing, quote, I believe US dollar backstable coin should
[26:02]be fully audited. Close quote. Does this include Tether, and if so, why is Tether not been audited?
[26:11]Uh, two things for you. I am I am of course completely divested from all things business. I am just worried about the United States of America. Um,
[26:22]my understanding is that Tether has launched a US fully approved under the Genius Act stable coin. So, I think the only Tether stable coin in America will
[26:34]be the fully approved under the Genius Act stable coin. And generally speaking, I absolutely agree with you. Tether should be audited. I I don't have anything to do with it, but I agree with
[26:45]you that Tether should be audited. >> Well, I I we both agree. And so I think it's an indication perhaps that the Genius Act has to be sharpened up a bit
[26:55]because there is no legal requirement for them to be ordered it and they can still operate freely in the United States. But that's a topic probably for
[27:04]another uh hearing. Let me move on to the value of the dollar. Uh Mrs. Xray, it's hit a four-year low. Uh in fact, it's fallen 10% since the administration
[27:15]took office. And general question, how do we maintain our economic prominence in the world with a weakening dollar? I know some people will point out and say, well, that's good in some respects
[27:27]because it it brings investment to United States jobs. But uh in addition to a weakening dollar, we've seen that manufacturing jobs are falling, too. Uh so what is the what is your response to
[27:38]these issues about the foreign dollar? >> The dollar over many years has been manipulated higher in order to keep the
[27:48]US economy from exporting to the rest of the world. Right? That's that's the idea. It's more expensive for everyone else in the world to buy our products and it's cheaper for us to buy theirs.
[27:58]when uh the Trump administration and the president called out this fact that we were running $1.2 trillion dollar trade deficits. I mean the rest of the world
[28:09]was selling us stuff and using our dollars to buy our country from beneath us, right? They remember in 1985 we owned more of the rest of the world
[28:20]than they owned of us. And now the rest of the world owns 26 trillion more of us than we own of them. So the idea is a the dollar where it is now is just more
[28:31]natural. We are exporting more and that's why our GDP has grown so much right we had 4.4% GDP growth in the third quarter. I think I think
[28:42]personally my opinion is I think the fourth quarter will be over 5% and I think we reasonably could get over 6% in the first quarter because our exports are growing the weaker dollar. Our
[28:53]imports have shrunk because of tariffs and that's GDP growth. >> Well, you say that our economy has been sort of stepping back
[29:03]from foreign investment, purchasing, etc. But the president touts every time he meets with a foreign leader how much money they're going to invest, i.e. buy American property, buy American
[29:14]facilities, etc. Is there a contradiction >> building in America rather than us buying their products that they build overseas? When you build a product
[29:25]overseas, you're employing your these foreign countries people. When you build in American in America, you have to employ Americans to build the product. You build in America and you employ
[29:35]Americans to build your product is something that the president is pushing for. Stop importing. Let's build manufacturing in America. You're going to see enormous manufacturing job growth
[29:46]coming over the course of 2026. In my >> we haven't seen it yet, but I hope you're right. May I ask one more question, Mr. Chairman? >> Senator, >> thank you. Uh, the Trump administration
[29:56]has approved sale of Nvidia H200 chips to China. I can tell you I just came from the armed service committee. I've served on that committee for 30 plus
[30:06]years. Uh, talk to uniform military officers, they are quite concerned. In fact, they believe this is a very dangerous situation of giving China
[30:17]literally a leg up in technology. U and commerce is is requiring Nvidia to selfcertify that the H200 chips sold to
[30:27]China are not for military intelligence end use. Well, how will you at the Department of Commerce track the final end use of these chips to ensure that they're not used military intelligence
[30:39]uses and and how will you enforce these conditions? >> Uh the license terms are very detailed.
[30:49]They've been worked out together with the State Department and um and those terms uh Nvidia must live with and must
[30:59]hue to. Do you believe the Chinese will live with them? Do you trust the Chinese to to follow up and to be uh uh the contract
[31:11]that they've executed with uh Nvidia? >> I'll leave that opinion to the president of the United States. >> Well, I I think it's a tragic difficult
[31:22]and wrong decision. Um because again, not only will the Chinese exploit, as they've demonstrated for the last
[31:33]several decades, any type of intellectual property they get their hands on, but I think also this might apply to the proposed sales the the United Arab Emirates because it's quite
[31:43]easy for them to include in a device, sell the device to China, have the Chinese take apart the device and get the chip and they could say, "Oh, we didn't sell the chips to China." I think
[31:54]you've got a serious problem here and without oversight by the Department of Commerce, real oversight, uh these ships will be misused to the detriment of our military forces. Thank you, Mr. Chairman.
[32:05]>> Uh thank you, Senator Reid. Uh Mr. Secretary, just I'm going to ask a question or two and so is Senator Manaland and then we'll be done. Um, you have used the phrase allowed by law
[32:17]sufficiently num a number of times that had caused me to look to see what the law says when talking about how the unspent money uh will be spent. And
[32:28]there is a long list of of uh items under use of funds. The last one is number six. any use determined necessary by the
[32:40]assistant secretary to facilitate the goals of the program. Is that what you refer to when you say anything allowed
[32:48]by law? Is is that discretion? >> I think the idea is to meet with the constituencies yourselves and try to
[32:58]come up with the smartest use of the funds. Um, make sure it stays within the statute of course, but what is the smartest use? We have proven, I think,
[33:08]to this committee that we are good stewards of the American taxpayers's dollar and we will continue to do that. So, we will work together to come up with the best ideas. I suggested a few
[33:20]that had just come to us, but I I think we will work it out in a way that is uh is smart. Do you have any u doubt but what they'll still be significant
[33:30]portions of the country and consumers that when bead is fully implemented absent the quote unspent funds there'll still be plenty of opportunities to
[33:41]provide broadband to the American consumer or will you do you think that bead with the money that's been made available will meet the needs of the country for broadband services
[33:52]>> my understanding is each state gave gave us the complete list uh the complete total of those who needed to be served and we are serving universal
[34:04]broadband access. So this is to cover every single person as of the date we did it. That that is the objective and that is what I think we are going to
[34:13]achieve. We are going to give broadband internet connectivity to every single person that every state said was in need. we will deliver
[34:23]>> and that does not uh necessitate the use of the unspent funds to reach that goal. >> It does not and each of the broadband states that the broadband offices of the
[34:34]states agrees. >> So in my opening statement I talked about the amount of money allocated to Kansas originally and then with the change in the the the direction the
[34:43]policy that uh it was much less was demanded. So that less money presumably meets the goal of providing
[34:53]everything that Kansas needs. It's just took less money to do it. >> Correct. Because we used competition rather Biden administration had selected
[35:03]one way to do it and there was very little competition and a huge amount of red tape. If you bring competition in between fiber, fixed wireless and
[35:14]satellite, you get much better economics as we all know. So we got much better economics for solving the same
[35:23]performance standards and covering every single person. This is universal coverage at a much better deal. >> Uh my I think my final question then
[35:33]I'll turn to Senator Van Holland. um the bead program or any federal broadband deployment program, those resources, those grant dollars are
[35:45]taxable to the provider that receives the funds. And under current law, when a broadband deployment, a provider is initiating uh the plan to rely upon
[35:56]federal funds, that that provider has to account for 21% of that award being paid back in federal taxes. And I introduced
[36:08]uh with a number of my colleagues the broadband grant tax treatment act which excludes certain grants including bead from those dollars being taxable.
[36:19]I think you've testified or indicated before you support that legislation. Uh I'm back at the uh at the making the effort to see we get it passed and I want to get your reaction and see if if
[36:30]my understanding is that you're supportive of eliminating the tax on the proceeds of grants to those providers. Uh you still support that position if you previously did. I
[36:41]>> I think that kind of opinion is best served with yourselves, right? Whether you choose on a on an appropriation that you've given, we've executed it. Whether you think we should tax it or not, I'll
[36:53]leave to your committee. Uh I think it is best served by >> Well, unfortunately, we have to leave it to another committee than this one, at least initially. But, uh it does diminish the dollars that are available
[37:03]and the interest in participating in the program is disinished as you try to figure out how you make uh this this profitable for the provider. >> If you let us give it out tax-free, I
[37:15]promise you I could do it for less than 21 billion. >> It's another option. Senator Van Allen. >> Uh, thank you, Mr. Chairman. I I just
[37:25]want to start by sharing the concerns and statement made by the chairman. I think you've heard it from other members of this uh committee as well. Yeah, the benefit of the
[37:35]bargain was struck at the time we passed the infrastructure bill. I I've heard you refer on a number of occasions to new ideas. Um, having worked with the states, including
[37:46]my state of Maryland, for a long time on this, Mr. secretary. I think the important thing is to make sure that they get the benefit of the bargain and uh I think you're hearing on a
[37:58]bipartisan basis this committee is going to scrutinize that very closely. Um there just a couple of questions I I
[38:06]have um before we close. One is just to follow up on one of your responses with respect to the Epstein files, specifically the visit you and your
[38:17]family uh took to Epstein's private island in 2012. And I think you also said you went on his yacht. Is that right? Or boat. No. >> No. >> Okay.
[38:27]>> Um at at that time, I think you mentioned that uh you were accompanied by your wife and kids and and nannies. Uh, my question is, do you know whether
[38:38]the nanny that you had on that trip was the same nanny that Jeffrey Epstein expressed interest in meeting?
[38:48]>> No, I I have no idea about that whole thing. I mean, I don't recall it having anything to do with me, >> and I don't know that. >> It's just, you know, this this guy was a
[38:59]convicted sex offender and obviously not a a great place for kids and nannies. Was Gelain Maxwell at the on the island at that time?
[39:09]>> No. >> So, turning now to the um issues of the
[39:18]highspeed internet and broadband. Um let me just say I appreciated your very emphatic response to Senator Shaheen about Starlink, SpaceX, or any other
[39:28]entity not being a able to change the terms of the deal after the fact. I thought that was a really clear and and defined statement. So, I do want to ask you about another writer. You described
[39:40]that as a writer. Um that seems to have, you know, been referenced at least in the president's executive order with respect to AI. Um the order directs you,
[39:51]the Secretary of Commerce, to study whether the department can withhold federal rural broadband funding from states with unfavorable AI laws. Mr.
[40:01]Secretary, that would be a writer. Is there any place in the law that you've seen that that could be a condition of providing the funds that we're talking about here today?
[40:13]>> I'm not sufficiently familiar to answer unfortunately. >> Okay. Well, I appreciate if you can get back to us because um you properly described what Starling's trying to do
[40:24]as a rider after the fact. this would be a clear rider after the fact and there's just no justification or or legal
[40:32]grounds for applying this conditions when the condition did not exist in the underlying law. Uh let me ask you about
[40:42]um the GAO. The GAO has informed um the committee that uh Department of Commerce is declining to answer questions
[40:52]regarding certain investigations and audits. As you know, GAO is sort of empowered by the Congress as a congressional watchdog to look into
[41:04]broad waste and abuse. Um, they have very broad jurisdiction. I'm just asking, Mr. Secretary, can you commit that your department will comply and
[41:13]work with GAO and cooperate with GAO in their work? My understanding is driven by our general counsel who's uh instructed us
[41:25]how to respond and we will respond according uh to whatever the rules are as as informed by my general counsel. >> Okay. Well, I think I I hope Mr.
[41:36]Chairman that we have a shared interest in making sure that GAO can conduct the proper uh oversight of the department. It comes with every administration. Um
[41:46]and so it seems to me that's something that the department should should comply with. Um let me just briefly um follow up on questions from Senator Coons and
[41:56]Senator Reid regarding um the export of very high-end US technologies, high-end chips, which of course are important to power
[42:08]AI and uh I was very concerned well first of all I I was very I was happy to see early in the
[42:18]administration the adoption of the affiliate iates rule, right? So when you say we are not going to allow the export of a high-end technology to one entity
[42:28]that we also make sure that we don't export those same high-end technologies to their subsidiaries or other related entities because it made sense that if you're going to close the front door,
[42:39]you shouldn't open the back door. For the life of me, Mr. Secretary, I can't understand why that was repealed. Could you take a moment and
[42:50]let me know why and whether you plan to reinstate the affiliates role? >> The complex relationship between the United States and China is in the hands
[43:00]of the president of the United States and Secretary of State and they help us and instruct us and um and we follow
[43:11]their lead. >> So it's interesting, Mr. Secretary, we had the um our our trade ambassador here and uh I asked him questions uh about
[43:22]this and he said to ask you uh now you're telling me I should ask Secretary Rubio or the president. Um you you're you are in charge ultimately
[43:33]of well the president of course is ultimately in charge but the export controls uh policies of this administration frankly have been very confusing when it comes to chips. I mean, we all know about the episode that
[43:45]the president went to the UAE after his sons traveled there and the the deal that went down, but I am focused now on China. Um,
[43:57]so you're you're you're asking me to go ask the Secretary of State about why the affiliates rule was dropped. >> What I what I'm saying is it is a very
[44:06]nuanced and complex relationship with between the United States and China. Uh the president is driving that relationship. Um we all are familiar
[44:18]with the weaponization of critical minerals and rare earths and magnets and so the resolution of those topics is really with the president of United
[44:29]States and the Secretary of State as they work through the nuance of the broad relationship between China and the United States. And that's what I'm saying.
[44:40]It's not a particular topic. It's a broad very nuanced topic that rests uh in the hands of the president of the United States and I think he has done
[44:49]it. He has handled uh that situation I think brilliantly. >> Well, we'll have to disagree on that. I see the chairman has his finger on on the button. I'm going to submit some
[44:58]questions regarding the issue of the um Trump administration's decision to take a stake in the rare earth sector. Um, I think it was US rare earth. Uh, and I
[45:10]will be following up for the record on on that, Mr. Secretary. Thanks, Mr. Chairman. >> Senator Marowski. >> Thank you, Mr. Chairman, and welcome to the committee, Mr. Secretary. Good to
[45:21]see you. Um, I want to talk about the um the uh pending bead final proposal. Uh
[45:29]Alaska is one of the one of the states that um uh has not yet been approved by
[45:38]NTIA for the final final bead decision. I'm told that uh we've got until February 11th, so this week to get three
[45:48]um undecided projects uh under the the BSL threshold. So, uh, just a couple
[45:57]questions in this vein this morning. Um, as as I have shared with you in the communications and the conversations we've had in my office, Alaska kind of
[46:07]has looked at the bead uh program as this one-time opportunity for us to to really try to address um the the digital
[46:16]divide that we see in very rural spaces. the restructuring notice that came out last year um
[46:25]uh has um has made it a little bit difficult. I'll just say for the Alaska broadband officer, this is what they're telling me in terms of just what they feel are are some of the the changing
[46:36]goalposts. And so they're trying to figure out how we again get maximum yield out of this very important
[46:45]program. Um, as as you know, construction seasons are not 365 days a year. I need your commitment that uh uh
[46:56]that we will see approval of Alaska's proposals um promptly so that we can get to work um in this upcoming construction season.
[47:06]>> I'm happy to make such a commitment. >> Great. I appreciate that. Um the the non-stutory uh cost threshold per BSL in Alaska has shifted multiple times in in
[47:18]my communications with with NTIA. Can you tell me what um per BSL cost threshold is being used in Alaska uh
[47:29]with regard to the final bead proposal? Um what what what we need to know is what's the threshold and and can we count on the fact that it's not going to
[47:39]be changing on us yet again. >> Okay. >> My my understanding is that actually Alaska is on the one yard line. I mean we're just about there. I think the only
[47:49]issue was that island. >> There's three islands. Um St. Paul, St. Lawrence. Oh, and McGrath. McGrath is not an island. It may as well be an island because it's
[48:00]>> my understanding was the conversations were with respect to the island and that we were very very close to a solution okay between us. So my expectation was
[48:11]in fact >> uh it may be resolved today or tomorrow. >> Okay, that would be great. And I'm sure your your your teams will be working with us uh to to give more information.
[48:22]Um uh let's talk just a sec about um the the unspent funds. Um it's my understanding that the um the final
[48:31]provisional awards approved by NTIA are going to award the states much less than the their original bead allocations. Um I don't know how much is actually left
[48:43]on the table. The question that I have is is um what what happens to it? Is it
[48:52]returned to the treasury? Uh uh uh how much is is intended to return to the treasury? What are the plans for the funds? We're looking at it from the
[49:04]perspective of look, everything in Alaska and and you know this, everything is just so high cost. Every dollar matters. We get it. Um we were were
[49:14]operating under the assumption that Congress intended all these funds to be dispersed in a smart and a wise way. We
[49:22]get that. Um but a question for you in terms of what the plans are for unspent
[49:29]funds and and and just a commitment that these remaining funds um uh be allocated
[49:40]in a way that are used to do exactly what we intended with this program which is to strengthen strengthen all aspects of communication particularly when it
[49:51]comes to our emergency our public safety communication in in these rural areas where you just have these incredible gaps um uh but also within the the
[50:00]critical uh mile infrastructure. So we we know we want to be smart with our with our money, but these were funds
[50:10]that were directed for a very specific reason. The need is huge and in many cases it's just a little more expensive than maybe
[50:20]in the lower 48. We have no plans for recision. >> Okay. There's a difference though between recision and unspent funds.
[50:30]>> So we have $21 billion. So we have executed universal broadband gotten every state covering each and every
[50:39]person that every state asked to cover yours included. We will have 21 billion remaining. So we are starting tomorrow a
[50:49]listening tour. We have 900 people signed up for tomorrow. We will meet with your office and your staff if you would like. What are your best ideas? You've said it, I think, very, very
[50:59]well. Let's do it smart. Let's do it efficiently. Let's do it effectively. We have covered everybody who needed it in the United States universally at that
[51:09]high performance standards that you set for 21 billion less. We have now a great opportunity. We have $21 billion. Let's
[51:20]design together the smartest thing to do with that money for the benefit of your state and for all of the states of America. I think that is our objective and we start that tomorrow.
[51:30]>> Okay. Well, I I will look forward to those follow-on conversations um both with regards to the Alaska specific projects and then uh on the on the going forward. Uh again, I recognize that we
[51:42]are um uh the way I say it is we've never been the benefit of of the bargain in many cases because we're just so high
[51:51]cost and it's not because it's waste fraud or abuseful. It is just far out there. So, um this is an
[52:01]opportunity that we have to to really uh do right by all Alaskans even in the most remote of remote places. and uh we look forward to working with you to address their needs as well. Thank you,
[52:12]Mr. Chairman. >> Mr. Secretary, anything you'd like to add? >> I just appreciate you having me here and thank you. >> Thank you. Thank you for being here.
[52:23]Thanks for accepting our invitation. Thanks for your attention to issues that are really important to our constituents in the country. There are no further questions. Senators may submit additional questions for the
[52:33]subcommittee's official hearing record. We request that NIA's the secretary's responses occur within 30 days and the subcommittee stands in recess subject to
[52:43]the call of the chair.