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tv   Treasury Secretary Yellen on COVID-19 Global Economic Recovery  CSPAN  April 5, 2021 11:01am-11:48am EDT

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get a regular flu shot, a covid shot, and if another flu thing comes up in the fall, just like a lot of shots just to satisfy the government. host: this is the headline from politico.com, u.k. to pilot covid certificate for nightclubs . "britain will start granting access to selected venues, including sports stadiums and nightclubs as ministers mull over ways to reopen host lockdown. people who have been vaccinated get a test or have excellent immunity after recovery from last month. sports venues and nightclubs. they go on
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announcer: we will go live to a conversation with treasury secretary janet yellen. live coverage you're on c-span. >> it is a nonprofit, nonpartisan, independent organization and the views expressed by individuals we host our their own and do not represent the institutional positions or views of the council. now to our main program. covid-19's negative effects on the global economy has exacerbated existing inequalities and highlighted the importance of finding solutions through international cooperation. today u.s. secretary of the treasury janet yellen joins us at the chicago council to discuss the u.s.'s role in promoting an inclusive recovery
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ahead of this week's international monetary fund spring meeting. after the secretary's remarks i will introduce council members to pose questions to secretary yellen. right now it is my honor and privilege to introduce today's speaker. janet yellen is the 78th state of the secretary. she took office after almost 50 years in the academy of public service. she is the first and only person to have served both as the head of the council on economic advisors, head of federal reserve, and a secretary of the treasury. secretary yellen, thank you for joining us. we look forward to hearing your remarks. >> thank you so much and thank you to the council for the invitation. america is strongest when we engage with the world. when i was born the united states was still recovering from
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the great depression and world war ii. these tragedies cost countless lives. too many families lost more than everybody but we learned an invaluable lesson. the united states would not go it alone. in the aftermath of the destruction the united states sent strong security alliances that have helped keep our country safe and helped our economies flourish. we created global institutions such as the united nations and financial institutions such as the international monetary fund and world bank to reduce the economic conflict and address global poverty. with strong u.s. leadership and working together with our allies we contained communism and created dynamic world economies
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and growing markets for u.s. exports. america's middle-class prospered, millions across the world were lifted out of poverty. but over the years new problems developed that were not properly addressed. in the push to grow our economies as we embrace new technologies we did not do enough to prepare our workers and our education systems for the changes underway. while we embrace to trade we neglected those that did not benefit. when we might have adopted policies at home to face these issues and joined with our allies to address issues abroad we isolated ourselves and retreated from the international
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order that we created. over the last four years we have seen firsthand what happens when america stepped back from the global stage. america first must never mean america alone. in today's world no country alone can suitably provide a strong and sustainable economy for its people. over time a lack of global leadership and engagement makes our institutions and economy vulnerable. to make matters worse covid-19 struck. the virus has taken over 550,000 american lives. our family members, friends, neighbors, and millions more around the world. we did not respond sufficiently last year to address the devastating health crisis at home and failed to engage in
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early to address the crisis beyond our borders. with the health crisis came the economic crisis. we saw to protect those most vulnerable but millions of workers lost their jobs and all too many small businesses shuttered. women and people of color bore the brunt of the hardship, exacerbating century long inequalities that plague our societies. we can do better, we must do better. the american people elected president biden and vice president harris to tackle these challenges. the pandemic, the economic crisis, the halloween of the middle class -- hollowing of the middle class, deepening inequality and the -- creating a
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prosperous economy for all. credibility abroad begins with credibility at home. how can america help lead the world in a dual crises of pandemic and economic recession if we cannot lead ourselves out of it? it is a fair question and why last month president biden side "the american rescue plan" into law. the rescue plan is easily the largest relief package since the great depression. it includes powerful measures, rental assistance, employment insurance, direct payments, to help americans make it to the other side of this crisis. and this package is designed not only to help our economy survive
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the scars of the pandemic, but to create a foundation for our economy to thrive. the work has already begun. in less than four weeks this administration issued more than 130 million relief payments to individuals and families. we provided more than 100 million vaccine shots in 58 days but we have more to do. last week president biden outlined a plan to rebuild america, creating a more sustainable and resilient economy with a 21st century infrastructure. the plan will fix america's crumbling highways and bridges, upgrade airports, ports, and transit systems, build a new electric grid, deliver
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high-speed broadband to all americans, and invest in basic research and science. it proposes affordable and accessible caretaking options for older americans and our nation's children. and an education system that trains our workers to thrive in the modern global economy. beyond our borders, as the pandemic has made clearer than ever before, the global community is in this together. we will fare better if we work together and support each other. the biden-harris administration is committed to restoring american leadership in the multilateral system to make the world economy stronger and advanced american interests. the united states needs to have a strong person on a level
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playing field. we will cooperate with willing partners to protect and enforce a rules-based order. our economic relationship with china, like our border relationship with china, will be competitive where it should be, collaborative where it can be, and adversarial where it must be. we will defend democracy and the human rights of all people. of women and girls, lgbtq+ individuals, and people of every race, ethnic background and religion. to help ensure those rights are protected at home and abroad. in all our international engagement president biden and i will stand up for the american people and american business as well as these core values that
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define america. i would like to spend time today discussing three key objectives to guide our economic engagement with the rest of the world which i believe are necessary to help her realize the vision of our nation. the first objective is a stable and growing world economy that benefits the u.s. economy. for the united states to prosper our neighbors must prosper. in the modern world recession, instability, and crime abroad find ways to wash upon our shore. strong and stable economies abroad make us safer. we will benefit if countries can maintain or create economic, social, and political conditions favorable to an open society. we will benefit if individuals around the world can pursue
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their aspirations regardless of conditions of birth and if women have truly equal rights and opportunity to be included in the economy, we will benefit while retaining cultural differences, share core values of free speech, free exercise of religion, and respect for diversity. of course, stronger growth abroad also means a stronger economy here at home. as other economies prosper demand for u.s. exports of goods and services increase, creating jobs. when developing countries are economically successful their growing population and rising living standards means a higher consumer base for the united states. in 1990, 40% of u.s. exports
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went to emerging economies. by 2020 it was 60%. this demand for american products creates u.s. jobs that pay better. studies have shown women in particular could earn as much as 20% more in these export-based jobs. at the time of the global financial crisis in 2008 we learned an interconnected economy brings vulnerabilities. postcrisis reforms have strengthened global banks and reduced systemic risks. but vulnerabilities, particularly in the nonbank financial sector remain, so as we pursue a stronger world economy we must pay attention to existing financial stability risks and new risks that may arise.
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to do so rather than retreat we must closely coordinate with our partners. we should aim to mitigate risks and promote sound financial systems at home and abroad so that americans have steady access to the finance needed to build back better, money to start a new business, to buy a home, and to create wealth for themselves and their children. the second objective is to fight poverty and promote a more inclusive global economy that aligns with our values. unless we act now the world is susceptible to the emergence of the deepening global divergence between rich and poor countries. this trend, which is never been more pressing, will likely result from divergent
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capabilities to contain the crisis and bring about economic recovery. like the united states, rich countries in large emerging markets have had the means to support their economies while they pursue a health solution. like the united states, they have gained access to vaccination. of course, it is too early for advanced economies to declare victory. urging our partners to continue a strong fiscal effort and avoid withdrawing support too early, to help you boy the emergent of global imbalances. many middle and low income countries are in a different place. lacking the finance to support their economies and people during covid-19 and constrained in the wherewithal to obtain
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vaccines the result will likely be a deeper and longer lasting crisis with mounting problems of indebtedness, entrenched poverty, and growing inequality. their crises will push as many as 150 million into extreme poverty this year, reversing the trends of the last two decades. with women, youth, unskilled, and informal workers particularly hard-hit. moreover, an additional 120 million became food insecure in 2020 and that trend could worsen. this would be a profound economic tragedy for those countries. one we should care about, but that is obvious. what's less obvious but equally
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true is that this divergence would also be a problem for america. with few exceptions stable and prosperous economies tend to be less of a security threat to the united states and the human crisis of refugees and migrants will only be solved if we have stable and secure growth in the west of the world. -- rest of the world. how do we help the poorest countries get through this crisis? our first task must be stopping the virus by ensuring vaccinations, testing, and therapeutics are available as widely as possible. low income countries may not achieve vaccine coverage until 2023 or 2024 at the current pace.
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more work in funding are needed to secure vaccine purchases, address manufacturing shortages, and finance and facilitate the domestic labs in low income countries. we also need to help lessen the economic pain in low income countries during a protracted recovery period and use this opportunity, as we are doing in the united states, to facilitate structural transformations to more inclusive and sustainable economies. the imf and world bank have already played an important role on this front and we are working to strengthen their ability to support the poorest countries. we have created a new multilateral framework to help low income countries address unsustainable debt burdens. at the imf we are working to
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issue $650 billion in new drawing rights, an asset that will increase buffers for all members and give low income countries the additional liquidity for greater spending on vaccines and health care. embedded in recovery efforts we have an interest in helping countries pursue sustainable and inclusive growth and strengthen long-term resilience. our response will not be successful if we end up where we were before. a personal objective of mind is to focus our international engagement on fostering full legal rights and greater economic and education opportunities for women and girls. given the clear evidence that
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this will support inclusive economic growth more broadly. speaking for my own experience, we need to do better at reducing barriers for women's economic empowerment. even unconscious ones. in nearly every country in the world, including the united states. finally, there are certain matters where we are in it together and no one country will be successful if it goes at it in isolation. the most evident, immediate example is the need to address global health risks. covid-19 has clearly shown pandemic responses require global cooperation. we are working with our partners to enhance pandemic preparedness against future shocks. we need to learn lessons from
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this pandemic to be better prepared to stop future contagious diseases before they become full-scale pandemics. another global challenge we face is how do we adapt to technological change? which has brought significant benefits but contributed to greater inequality. digitalization is the latest technological advance that provides an opportunity to raise productivity and increase connectivity both at home and globally. even just a year ago i never thought i would be regularly joining meetings with colleagues in london, sydney, and everywhere in between from the comfort of my office in treasury. but the digital divide is also exacerbated inequality and
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digitalization has raised concerns about privacy, illicit activity, and threats of surveillance and cybersecurity attacks from our adversaries. i will be working domestically and closely with our allies to promote digital finance. instantaneous and commercial transactions but also ensure we modernize our regulatory frameworks to take into account the risks and threats inherent in the use of these new technologies. another consequence of an interconnected world has been a 30 year race to the bottom of corporate tax rates. competitiveness is about more than how headquartered companies fair against other companies in
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global merger and acquisitions. it is about making sure the governments have stable tax systems that raise sufficient revenue to invest in a public goods and respond to crises and that all citizens fairly share the burden of financing government. president biden's proposals announced last week call for bold, domestic action including raising the u.s. minimum tax rate and renewed international engagement. recognizing it is important to work with other countries to end the pressure of tax competition and corporate tax based erosion. we are working with g20 nations to agree to a global minimum tax rate that can stop the race to the bottom. to gather we can use a global minimum tax to make sure the
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global economy thrives based on my more level playing field in the taxation of multinational corporations and spurs innovation, growth, and prosperity. let me and by discussing the biggest -- end by discussing the biggest long-term threat we face, climate change. after sitting on the sidelines for four years the united states is committed to doing its part. have a narrow moment to pursue action at home and abroad to avoid the most catastrophic impact of that crisis and to seize the opportunity tackling climate change presents. president biden has released the plan to combat climate change, including rejoining the, paris agreement investing in sustainable infrastructure, and
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creating new green jobs. is committed to releasing and a ambitious strategy this year to eliminate greenhouse gas that coincides with work internationally. domestic action must go hand-in-hand with international leadership aimed at significantly enhancing global action. to this end treasury is working closely with our international partners and international organizations to implement ambitious reduction measures, protect critical ecosystems, build resilience against the impact of climate change, and promote the flow of capital toward climate aligned investments and away from carbon intensive investments. we are also working to ensure the climate risk is integrated in the financial system so that
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financial institutions, regulators, and investors can make informed decisions. i am pleased the treasury is cochairing a newly launched g20 working group where finance ministers and central banks will work together to identify mechanisms for promoting green investments and accelerating transition to a net zero economy. as i prepared to meet with my colleagues from around the world this week at the imf and world bank spring meetings, i find myself thinking back on policymakers who gathered in britain a year before i was born to define our postwar order. it was a different time. i empathized with the enormous
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weight they faced. the pressure to come together after a global catastrophe, building and enduring an interconnected system and promoting peace and prosperity throughout the world. our current juncture is no less significant. what we do in the coming months and years will have profound impacts on the trajectory of our country and on the global economic order. of course, there are key differences from the postwar era. may be most noticeably we will be joined later this week by other female finance ministers, central bank governors, and heads of international financial institutions. not enough, but a start as well as diverse representatives from all corners of the globe.
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in our interconnected and digital world, and considering the pandemic, i will be logging onto a computer to join these meetings, trekking to a mountain resort in new hampshire. yet the most important difference is a fundamental recognition that our policies at home and abroad must be designed to be inclusive, tackle inequality, and respect our environment. in this context i will use the spring meetings this week to advance discussions on climate change, press our partners to do their part to support a strong global economic recovery, strengthen tools to improve vaccine access, and financing for the world's poorest economies, and increase the focus on inequality, including for vulnerable populations and
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women and girls. i am honored to serve the american people once again. to listen to the underrepresented. to be bold in action and to cooperate with our global partners to solve the challenges we faced together while building the next century of prosperity. thank you. >> thank you, secretary yellen for that insightful speech and a reminder now of what is happening around the world impacts us here at home as well as how, as we move forward together with our partners, we need to find a world that is more inclusive as well as more sustainable. i really appreciate your comments. we would like to turn to some of the members of the council and the first person joining us is dori.
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she is the ceo of the ywca metropolitan chicago. >> thank you. i want to also thank you for acknowledging gender equality for prosperity and you know many studies referenced achieving gender parity and that it can add trillions to the global economy. but how do we get countries to prioritize gender parity as the economic recovery agenda? >> well, i think there is a wide range of steps we need to take to promote gender equality in our own economy. increased involvement of women in the labor force, as you indicated, really promoted
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advances overall for the united states and certainly served to raise family income. but female labor force participation has leveled off at a rate that is lower than we have seen in many advanced economies. and in looking for the reasons it looks as though our failure to provide affordable childcare and paid leave is important. so, as we think about our own policies in the united states moving forward i would say that it makes sense to focus on enhancing benefits in those areas, particularly to promote a more inclusive environment for women to participate in the labor market. and the imf and world bank have
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prioritized similar steps around the world by improving legal rights and equality for women in many countries where they are hindered by legal barriers and social barriers to participate. also supporting them through participation, through greater education for women, and other programs. >> thank you, secretary yellen. the next question is from alex,, a young professional at the chicago council of global affairs. alex? >> thank you. secretary yellen, thank you for taking the time this morning. the pandemic has had an impact on students and younger people in the workforce. from your perspective do you have suggestions for us to become -- not only to thrive in the economy but become more
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affluent and global issues? >> well, i think it is very important for young people to study about the global economy and the ways in which we are interconnected with our neighbors, and to appreciate the importance of the multilateral system we have developed in the postwar period. and the need for cooperation to share global responsibilities and work cooperatively on mutual problems like climate change. i hope young people will focus on, and study, about the global economy and its importance. this pandemic has been particularly tough on young people who are in school and
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have had to study remotely. i am very hopeful that because of the steps we are taking, including speeding vaccinations, dealing with the pandemic, at the economic support that we are providing that the job market is going to become far more robust in the months ahead and that young people will, in the coming months, find a job market where they can find good opportunities to get ahead and get on the ladder to success. >> thank you, secretary yellen. the next question is from regina. she is vice president at goldman sachs as well as alumni of our emerging leadership program. regina? >> thank you, secretary yellen,
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for your leadership. lower income in developing nations in the wake of the 3.5% global economic contraction, how can the u.s. collaborate with other nations to ensure equitable distributions for the most vulnerable populations and accountability and support of democracy for all? >> thank you so much for that question. we are very supportive in allocation of sdr aphis time especially because of its potential to help low income countries bothered by lack of physical space to deal with the pandemic and the economic consequences. when special drawing rights are allocated by the imf they go to
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countries in proportion to their quotas in the imf. they are broadly distributed and the large share and some going to advanced and developed in middle income countries. but a substantial share will go to the poorest countries that are most in need. importantly many advanced countries have indicated a desire and willingness to channel portions of their own allocations back to provide further support to these low income countries. for example, the imf has a poverty reduction and growth fund that many countries are likely to either lend or donate portions of their own sdr
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allocations and that will really multiply the impact of an adr allocation -- sdr allocation. you mentioned accountability. we want to make sure the sdr allocation goes to support relief and economic support in the lowest income countries. we are working with other countries and the imf to design a disclosure and reporting framework that would enable us to see how the sdr's have been used and monitor the ways in which they have been supported. >> wonderful. next question comes from the chair, president, and ceo of
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william blair but more portly the chair of the board of chicago -- more importantly the chair of the board of chicago. >> thank you. . in your letter to the g20's them to take big action. couple related questions to that. how big is big? is there a limit to how much debt the u.s. or g20 can incur?
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>> congress recently passed a $1.9 trillion package, the american rescue plan, to address the pandemic and its economic consequences. i would describe that is going big. the purpose of the package is to address the needs of american households, families, companies that have been adversely affected by the pandemic to avoid scarring, to avoid damage that could permanently impact the ability of individuals and families to get to the other side of the pandemic and get back on track with their lives.
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and to avoid the failure of small businesses that are the lifeblood of their communities and this provides so many jobs to americans. we have designed the package to direct support, to make sure that people, especially the minority and low wage workers who have been so adversely affected by this crisis, to make sure they have income during the time that they are jobless, to make sure they have enough food to eat, to make sure they can keep a roof over their head, and don't lose a family home. it provides money to state and local governments for a variety of programs to address the
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burdens of the pandemic, to get their local economies on track, and to begin to address infrastructure needs that were highlighted by the pandemic such as the absence of broadband that penalized so many rural families and families in low income areas when their children needed that in order to participate in school. can we afford this? well, i believe we do have fiscal space to be able to afford it. in part because we have been in a low interest rate environment in the united states and that has been true among developed countries in recent decades. and for reasons that i believe are not just transitory but reflect longer-term structural problems.
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in spite of the fact that u.s. debt has risen quite a bit relative to the economy if you go back as far as 2007 when the u.s. debt to gdp ratio was 35%, it has risen around 100% but because of the interest rates has been unchanged. will it be inflationary? i strongly doubt it is going to cause inflationary pressures. we are in a deep hole with the u.s. economy is still down around 9 million jobs and if we were to count individuals who have dropped out of the labor force to take care of children and because of health concerns,
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the truth u.s. unemployment rate is close to 9%. the congressional budget office estimated that without the american rescue plan the economy would probably take until 2024 to get back to full employment. but i am hopeful if the vaccination program proceeds as it has been and is a successful, we can get back to full implement next year. we had before the pandemic and unemployment rate of 3.5%. the problem has always been inflation is too low. if the package did prove to be inflationary we have the tools to address it. i see the risk as asymmetric. i worry more about long-term
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adverse consequences from not doing enough then problems that would result from doing too much. i believe we have the fiscal space to act boldly. i think it is important in mitigating the suffering of the pandemic and the long-term adverse consequences to u.s. potential output if we failed to do so. it is important to learn lessons from the 2008 financial crisis. we had a slow recovery after that crisis and it took almost a decade to get the economy fully back on track. it is important we not repeat that experience. i think that we are doing the right thing and longer-term,
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president biden and vice president harris have proposed a recovery plan that addresses longer-term challenges facing the u.s. economy. slow growth is a package that will, over a decade, invest in our crumbling infrastructure and our roads, bridges, highways, broadband structures, the electric grid, invest in people giving them the tools and training they need to be productive in research and development over the long-term. these investments are the cornerstone of making our economy competitive. >> secretary yellen, i know you have a hard stop at quarter to the hour so thank you for joining us today.
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honoring us with your virtual presence, for your first big international speech. we appreciate you being part of our counsel family. we hope to see you in person in chicago in the not-too-distant future. in the meantime, i join everyone here in thanking you for your remarks and for being with us. thank you so much. >> thank you so much and thank you for hosting me. much appreciated. ♪ announcer: c-span is your unfiltered view of government. created by america's cable television companies in 1979. today we are brought to you by these television companies who provide c-span to viewers as a public service. ♪ announcer: the u.s. house will be gaveling in shortly. we will have live coverage at

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