SENATE FINANCE COMMITTEE
NOMINATION HEARING
For questions on the note below, please contact the Delta Strategy Group team.
On July 16, the Senate Committee on Finance held a nomination hearing. The witnesses in the hearing were:
- Francis Brooke, to be Deputy Secretary of the Treasury
- Erin Browne, to be an Under Secretary of the Treasury
- Sriprakash Kothari, to be an Assistant Secretary of the Treasury
- George (Hunter) McMaster, to be an Assistant Secretary of the Treasury
Below is a summary of the hearing prepared by Delta Strategy Group, which includes several high-level takeaways, followed by summaries of opening statements and discussion.
KEY TAKEAWAYS
Digital Assets & Cryptocurrency Taxation
- Senator Daines (R-MT) described his comprehensive digital asset tax framework, built around reducing complexity, applying existing tax principles such as wash sale and constructive sale rules where digital assets function like securities or commodities, and creating tailored rules for stablecoin payments, staking, and related activity.
- Kothari stated that the absence of clear digital asset tax rules is damaging to U.S. competitiveness and innovation capacity, and said clarity and enforcement are necessary for U.S. leadership in the space.
- Browne emphasized preserving U.S. dollar predominance in the digital finance era as central to U.S. economic leadership and supported anchoring the future of digital finance in the U.S. under U.S. rules.
Agriculture & Trade with China
- Senator Blackburn (R-TN) and Senator Grassley (R-IA) raised China’s soybean purchase commitments. Browne stated China has not lived up to comparable commitments made during the first Trump administration, and the Biden administration failed to hold China accountable.
- Browne committed to monitor China’s soybean purchase commitments on a quarterly basis and to bring transparency and accountability to enforcement of trade commitments generally.
- Browne emphasized ensuring fairness and reciprocity in the global trading system as a top priority, stating the U.S. must no longer allow non-market economies to exploit open markets through subsidies, currency practices, and state-directed policy.
- Brooke noted that partnership with the U.S. carries reciprocal obligations that have not always been upheld by allies and trading partners.
Economic Growth & Tax Policy
- Brooke highlighted economic growth as a top priority if confirmed, citing reduced government spending, deregulation, and tax policy that rewards work and savings, including Trump Accounts, as tools to drive investment and productivity.
AI & Technology
- Senator Warner (D-VA) raised the national security implications of frontier AI models, referencing Anthropic’s Mythos and Fable releases, and asked whether a mandatory pre-release testing regime is needed rather than the current voluntary approach.
- Brooke said it is important that the U.S. remain the leader in AI but said he did not believe it would or should fall to the Deputy Secretary role to resolve the testing framework question and characterized it as a matter for Congress and the administration to work out together.
- Senator Marshall (R-KS) raised quantum computing with Kothari, who said it represents the next frontier in computing speed, noted there are still roadblocks, and said the U.S. should prioritize innovation and entrepreneurship while acknowledging downside risk.
China Investment & CFIUS
- Brooke and Browne both described economic security as national security. Brooke emphasized protecting sensitive capital flows and technologies from adversaries, while Browne said Treasury must ensure U.S. capital does not strengthen the military and strategic capabilities of adversaries.
- Senator Cortez Masto (D-NV) questioned Browne on the administration’s new bilateral investment board with China and on a reported presidential statement suggesting openness to Chinese investment in the U.S. auto industry. Browne said she has not been involved in those discussions and that her focus would be protecting U.S. workers and businesses.
- Browne and Brooke affirmed that the Committee on Foreign Investment in the United States (CFIUS) should continue to have a role in reviewing any national security-related investment, regardless of the new investment board’s determinations.
Rule of Law
- The nominees all affirmed they would follow the law over a Presidential directive to break it.
Financial Crime and Illicit Finance
- Senator Hassan asked Browne how Treasury would use its relationships with foreign finance ministries and central banks to combat international scam networks and money laundering tied to fentanyl trafficking and Southeast Asian scam compounds. Browne pointed to a recently released G20 working paper focused on early intervention and public education as tools against these networks.
- Browne identified protecting the U.S. from illicit finance as part of her economic security priority if confirmed.
OPENING STATEMENTS
Chairman Crapo (R-ID)
Over the past year, the Treasury Department has worked expeditiously to implement the Working Families Tax Cuts signature policies and to provide historic tax relief for working-class Americans.
Ranking Member Wyden (D-OR)
Donald Trump is not picking his nominees based on qualifications or being well-suited to address the American people. He is picking them based on their willingness to enable and carry out, essentially, stonewalling at the expense of the American people.
Francis Brooke
For the U.S. economy to continue to prosper, economic policy needs to create a stronger investment environment that drives productivity and innovation. These policies include reducing government spending, eliminating red tape, advancing tax policy that rewards work and risk-taking, and incentivizing savings with policies like Trump Accounts. Together, these policies will create the conditions for investment in our country that increases productivity and grows the economy, delivering a better quality of life for all Americans. The Working Families Tax Cuts strengthen investment incentives and U.S. competitiveness. We must continue reforming the international economic system so that it benefits the American people as well as our allies. Digital assets, stablecoins, tokenization, and new payment systems will help to shape the future of money. The U.S. should not consign itself to the sidelines while that future is built elsewhere. We should support innovation that cements the dollar’s status as the reserve currency, improves efficiency, expands access, and preserves the integrity of the financial system. We should insist that new technologies meet our standards for transparency, security, and consumer protection. It carries reciprocal obligations which have not always been upheld. On issues ranging from market access and fair treatment of U.S. companies to alignment on supply chain resilience, technology security, and the rules governing strategic sectors, we have made meaningful progress. The U.S. remains the best economic partner in the world.
Erin Browne
For too long the U.S. tolerated an international economic system that rewarded unfair trade practices, weakened U.S. manufacturing, hollowed out critical supply chains, and advantaged strategic competitors at the expense of U.S. workers. Under President Trump’s leadership, the U.S. is no longer accepting economic decline as inevitable. We are rebuilding U.S. industrial capacity, reasserting economic sovereignty, and using our economic leverage to advance the interests of the American people. The U.S. must no longer allow non-market economies to exploit open markets while shielding their own industries through subsidies, currency practices, forced technology transfer, and state-directed economic policies. Maintaining the predominance of the U.S. dollar is central to U.S. economic and geopolitical leadership. The dollar remains the world’s reserve currency because investors trust the stability of U.S. institutions, the rule of law, and the depth of our capital markets. Preserving dollar predominance is not simply an economic priority, it is a strategic national advantage that strengthens U.S. influence, reinforces our sanctions regime, lowers borrowing costs, and underpins global confidence in the U.S. To sustain that leadership in the digital age, the U.S. must lead responsibly in financial innovation while ensuring transparency, accountability, and national security protections. The U.S. must lead international economic institutions with clarity and purpose. Institutions such as the International Monetary Fund (IMF) and the World Bank should serve the cause of stability, transparency, and market reform, not subsidize unsustainable lending practices or increased dependence on strategic competitors.
Sriprakash (SP) Kothari
Americans’ liberty and prosperity depend on Treasury’s ability to protect the integrity of our financial system and our tax code, and to advance policies that foster economic growth.
George (Hunter) McMaster
Investors, domestic and foreign, choose the U.S. because we offer transparency, stability, and rule of law. Our capital markets fuel innovation, support businesses, enable millions of Americans to save for retirement, bolster national security, and raise standards of living. At the core of this system is the U.S. Treasury market, the deepest and most liquid market in the world. The U.S. dollar serves as the world’s reserve currency, and U.S. Treasuries as the world’s reserve asset. This unique position underpins borrowing costs across our economy.
DISCUSSION
Digital Assets & Cryptocurrency Taxation
Senator Daines (R-MT): How would a comprehensive digital asset tax framework, reducing complexity while applying traditional tax safeguards and anti-abuse rules, affect compliance, the tax base, and U.S. competitiveness, and what are the consequences of continued inaction? Brooke: Treasury has been working within current law in the interim, but passage of the Digital Asset Market Clarity (CLARITY) Act and related cryptocurrency tax proposals is needed to set global standards, keep innovation onshore, and strengthen tax compliance and illicit finance enforcement. He committed to working with Senator Daines toward passage if confirmed; Kothari: Unclear rules erode both competitiveness and innovative capacity. Maintaining U.S. leadership in digital assets requires a regime that is clear and enforced, and the current lack of clarity is damaging to the development and competitiveness of U.S. markets.
Senator Warner (D-VA): Would you support a CLARITY Act that made illicit finance easier, given a recent Department of Justice (DOJ) assessment that an industry-backed proposal could weaken protections? Brooke: I agree this would be a concern and stated it is vital the CLARITY Act provide Treasury and the administration with tools to counter illicit finance.
Agriculture & Trade with China
Senators Blackburn (R-TN) and Grassley (R-IA): How will Treasury hold China accountable for its commitment to purchase 25 million metric tons of U.S. soybeans annually through 2028, given that a comparable commitment went unmet under the prior administration? Browne: China has not lived up to the commitments it made during the first Trump administration, and those commitments fell by the wayside under the last administration. If confirmed, I would bring transparency, accountability, and certainty to enforcement of trade commitments, monitoring compliance on a quarterly basis.
Economic Growth & Tax Policy
Chairman Crapo (R-ID), Senators Blackburn (R-TN), and Grassley (R-IA): What is the status of working family tax cut implementation, how has the Trump Account rollout gone, and what is being done to expand awareness and enrollment? Brooke: Treasury and the IRS have issued dozens of guidance documents since enactment, delivering the most successful filing season in history, with over 63 million filers claiming at least one signature provision, including no tax on tips, no tax on overtime, the enhanced senior deduction, and no tax on car loan interest. Over 6.5 million Trump Accounts have opened, with nearly 15 million children eligible for the 1,000 dollar seed contribution. A new Social Security Administration enrollment prompt for newborns, coordinated with Senator Cruz (R-TX) on auto enrollment, and partnerships with state and local governments, banks, and other financial institutions have all been vital. Treasury is working to advance 45Z, which Senator Grassley identified as a priority for American farmers.
AI & Technology
Senator Warner: Is a mandatory pre-release testing regime needed for frontier AI, rather than the current voluntary approach, given the national security significance of Anthropic’s Mythos and Fable releases? Brooke: It is important that the U.S. remain the leader in AI, and it was significant that Anthropic voluntarily shared Mythos with the government given that the innovation originated with a U.S. company. I do not believe resolving the testing framework question would or should fall to the Deputy Secretary role but it is an important issue for Congress to work out with the administration.
Senator Marshall (R-KS): What is your outlook on the future of quantum computing? Kothari: Quantum computing represents the next frontier and will dramatically increase computing speed, though significant roadblocks remain. The U.S. should emphasize innovation and entrepreneurship as the path forward, while acknowledging downside risk.
China Investment & CFIUS
Senator Cortez Masto (D-NV): What is Treasury’s role in the administration’s new bilateral investment board with China, including a reported presidential statement suggesting openness to Chinese investment in the U.S. auto industry, and will CFIUS retain a role regardless of the board’s determinations? Browne: The investment board’s purpose is to establish a dialogue channel with China and hold it accountable to trade commitments. I have not been involved in discussions regarding Chinese investment in the auto industry specifically. My focus, if confirmed, will be protecting U.S. workers and businesses. CFIUS should retain a role in any matter touching national security, in conjunction with the new board; Brooke: CFIUS plays a key role and is the law of the land, and the administration will follow the law of the land. Secretary Bessent has described the new investment board as an additional screen on top of, not a replacement for, CFIUS review.