FROM THE OFFICE OF PUBLIC AFFAIRS

Mr. Chairman and Members of this Committee, thank you for allowing me the opportunity to appear before you concerning my nomination to be the Deputy Secretary of the Treasury. In making this nomination, the President has honored me with his trust, for which I am deeply grateful.

In all of my senior public positions in the Carter and Clinton Administrations, I have made it a watchword to have open, close, respectful, and cordial relations with members of the Senate and House, regardless of party. I have had the privilege of meeting with many Members of this Committee over the years. You will continue to find me responsive to you, and I consider it a high priority to merit your confidence.

At various times in my public career, I have worked on most of the issues, both domestic and foreign, that come before this Committee. I have worked closely with the business and financial communities over several decades.

During the President first term, I served under Secretary of State Warren Christopher as the U.S. Ambassador to the European Union in Brussels. It was then that I helped initiate the New Transatlantic Agenda, through which the United States and the European Union are developing closer ties in this post-Cold War era, and the Transatlantic Business Dialogue, which brings together European and American business leaders to provide advice on removing impediments to transatlantic trade and investment. In 1995, I was named Special Envoy for Property Claims in Central and Eastern Europe, a position I continue to hold. I have encouraged the return to individuals and religious communities of the property that the Nazis had confiscated and the communists had nationalized. For my service while in Brussels, Secretary Christopher conferred on me the highest award the State Department can give to a non-career Ambassador,

the Foreign Affairs Award for Public Service. I returned from Brussels in 1996 to become Under Secretary of Commerce and International Trade. In this position, I established the Compliance Center, which for the first time has given the U.S. government the capacity to monitor foreign government compliance with the trade agreements reached with the United States; we consequently have greater assurance that we are obtaining for U.S. business and workers the full benefits of the trade agreements we have negotiated.

In this second term, under the distinguished leadership of Secretary of State Albright, I have been Under Secretary of Economic, Business and Agricultural Affairs. I have advised Secretary Albright on international economic policy and have led the work of the State Department on issues ranging from trade negotiations to bilateral relations with major partners such as Japan and the European Union. I was named Special Envoy of the President and the Secretary of State for the Promotion of Democracy in Cuba to encourage our allies to condition their relations with Cuba on improvement in human rights and democracy there -- efforts that led to the Common Positions on Cuba by the European Union. In 1997 and 1998, I coordinated two massive government studies on Nazi gold and the role of neutrals on World War II; and I led the Washington Conference on Holocaust-Era Assets, which among other things produced historic principles for the return of the Nazi-looted art, helped solve the Swiss Bank dispute, and contributed to promoting justice for the survivors of the Holocaust and their families before the advent of the new millennium.

My State Department responsibilities; my work as a sous sherpa in the G-8 process; and my service as Alternate Governor of the World Bank, the Inter-American Development Bank, the Asian Development Bank, the African Development Bank, the African Development Fund, and the European Bank for Reconstruction and Development -- all provide experience for the position of Deputy Secretary of the Treasury.

From my various positions in this Administration, I have learned that one of our most fundamental strengths and sources of influence around the world comes from the strength of the U.S. economy, which President Clinton, Vice President Gore, Secretary Rubin, Deputy Secretary Summers have helped to create. They have set the right course with the support of the U.S. Congress. Maintaining a strong U.S. and world economy is our central challenge.

I look forward to working with Deputy Secretary Summers to achieve the five critical objectives that he indicated to this Committee he will focus on if confirmed as Secretary of the Treasury: maintaining a strong economic strategy, which includes both continued fiscal discipline and addressing long-term Social Security and Medicare problems; ensuring that our strong economy means growth in living standards for all Americans; building the sort of global economy that can underpin U.S. security and the prosperity of American workers; striving to ensure the safety, competitiveness, and efficiency of the U.S. financial system; and supporting the excellence and integrity of Treasury=s career staff.

Mr. Chairman, Deputy Secretary Summers has assured me that, if confirmed, we would function as a team in the same productive way he worked with Secretary Rubin. With your support, I look forward eagerly to forming that partnership with him and working closely with you.

In closing, I especially want to thank my family and, most particularly, my wife Fran, for enduring with me the sacrifices and stresses of public service. I could not be here today without her support and that of my sons Jay and Brian, Jay=s wife Jessica, and Brian=s fiancee Erin Grossman.

Mr. Chairman, I wish to express to you my thanks for being able to come before you. Let me now try to respond to questions you and the Committee may have.