CNBC News Releases

CNBC Exclusive: CNBC Excerpts: United States Treasury Secretary Jack Lew Speaks with CNBC’s Sara Eisen

Following are excerpts from the CNBC EXCLUSIVE interview with United States Treasury Secretary Jack Lew and CNBC's Sara Eisen, which aired today, Thursday, April 14th. Following is a link to the video on

All references must be sourced to CNBC.


JACK LEW: Let me be clear. The goal we've been doing here has been to deal with inversions as a matter of policy. I said several years ago the right way, the best way to do it is for legislation to be passed. It would do serious, comprehensive business tax reform and shut down inversions once and for all. I also said we'll use whatever administrative authority we have and it is a complicated matter because you have – don't have infinite flexibility. We have worked and worked on it. This is third action we've taken. And each time we've slowed down the pipeline. And each time I've said Congress needs to act because we want to make sure that inversions are stopped. I think that it should have been no surprise to anyone that we were working on this because we've been working on it for a long time.

SARA EISEN: I think how aggressive it was came as a surprise. I mean, do you understand the frustration of the companies who say, "We went about it legally. We played by the rules. And the rules got changed after the fact"? Brent Saunders, the CEO of Allergan, told us that it was un-American.

JACK LEW: You know, what I think most Americans understand is here we are in tax season. Most Americans either have or will be filing their tax returns over those next few days. And they know that if you're on a salary you pay your taxes every year. And that's that. The idea that a company could take advantage of all the benefits of being in the United States, the wonderful rule of law that makes us the best environment, the innovation that is supported by publicly supported research and development, the infrastructure that is supported by tax, paid for roads, bridges and tunnels. And the education that's paid for out of our tax code as well.

SARA EISEN: But I don't think it was a question of that.

JACK LEW: So the question – no, but that the question. The question is if you get all the benefits of being in America, doing business in America, to be able to change your address to avoid U.S. taxes is wrong. We said we wanted to stop that, and we are continuing to look at what tools do we have. So I actually don't think that anyone should be surprised. Most Americans are offended by the idea that this can be done.

SARA EISEN: But the issue was sort of the way about going about it retroactively. Even your predecessor—

JACK LEW: No, no, it wasn't retroactive. Let's be clear. It was not retroactive. And that's very important. What we've said all along, and the way these kinds of things are done, is it affects things that are have not yet closed, have not yet taken place. You know, I don't know what else is in the pipeline. And frankly our goal is to stop the pipeline.

SARA EISEN: But the idea that the serial inverters, like Allergan who had made acquisitions, those acquisitions in the previous three years did not count.

JACK LEW: So this question of serial inverters is a really interesting one. It took a while for the pattern to become clear that companies plan over a multi-year time horizon to be able to build up a big enough foreign presence so that the inversion can take place where it meets the technical rules not to be subject to U.S. tax. What I'm really focused on is shutting that pipeline down so this is not available as a matter of policy going forward. And as with all policies, it's effective when you announce it.

SARA EISEN: Even your predecessor Hank Paulson told us he was "troubled and disappointed by the effort." He said, "We're a nation of laws and rules. And you can't change the rules after the facts and keep changing them and changing them."

JACK LEW: I think that we have a well-established practice of issuing guidance based on legal interpretation, based on legal authority. And that's what we've done here. Everyone who engages in business knows that it's subject to changes in law or rulings. And I think the important thing here is that everyone has been on notice for a very long time. It hasn't been a secret that this is an area of deep concern – bipartisan concern. My only frustration is that legislation hasn't been enacted to deal with it in the best way. But we remain focused on what administrative tools do we have to stop the pipeline as much as we can until Congress acts. But Congress needs to act.

SARA EISEN: Is there more to come from your office until Congress acts?

JACK LEW: We are continuing to look at what options there are. I mean, we've obviously now taken a third action. And we have some of the best tax lawyers and tax analysts. And I have to say the people who work on this are the most nonpartisan people you can imagine. They are tax professionals who are broadly respected for their ability and they're integrity.

SARA EISEN: So potentially more rules on inversions?

JACK LEW: Yeah, I'm not going to announce anything else. I'm just saying that what we've said all along, is we will continue to look at what tools we have.

SARA EISEN: And then what would you say to a business who already – executive who already faces so much uncertainty right now about the global economy? They're trying to plan. And now the government can come in and change the rules in a way after the fact. How do you plan in that kind of environment?

JACK LEW: You know, look, I think that to the extent that you're talking about mergers and acquisitions, or foreign direct investment in the United States, we are profoundly in favor of economically productive investments. What we're not in favor of is using tax loopholes to move income around to avoid taxation. If you're working on a deal that has real economic benefit, this is not going to be something that interferes with your plans. If you're trying to structure a deal to avoid taxation, the goal was to make that harder.


JACK LEW: I'm making an economic and foreign policy argument that has been profoundly important in having the United States play the leadership role that's helped make us economically secure and promote our national security interests. You look at something like sanctions. Our power to influence the world with sanctions is not unrelated to our economic centrality. And we have to be aware of that because we want to have all those kinds of levers. It's not just about asking people to do the right things.

SARA EISEN: I was going to mention trade, which is another big part of our engagement with the world economy. Even Democrats like Bernie Sanders and Hillary Clinton have trashed the TPP and other trade policies. Do you worry that there could be some real damage by the next administration to our trade policies? Or is it just campaign bluster?

JACK LEW: You know, I think that the Trans-Pacific Partnership is an agreement that is very much in the interest of the U.S. economy and American workers. You know, right now, we have a world where markets are more open here than they are in other places. We benefit when we open other markets. We have high standards in terms of labor protections, environmental protections. Other countries have lower standards. Raising their standards makes our products and services more competitive.

SARA EISEN: But that's not the prevailing view right now. I mean, campaigns are really in America.

JACK LEW: Look, we have to make the case why this is good. We accept that. I accept that. But I'm arguing the merits of something that I think are profoundly important to the promoting a strong U.S. economy and strong opportunities for U.S. workers. You know, you look at where the growth in population in the world is. You look at the growing markets in the world. I don't think we should say that we want other people to make the rules of the road. Of who can do business there and what the terms of doing business there are. We want to promote U.S. values. We want them to have high labor standards. And we want them to have high environmental standards. We also want those markets to be open for the best products in the world, which are U.S. products, and the best services in the world, which are U.S. services.

SARA EISEN: On American values, Bernie Sanders recently said that General Electric is destroying the moral fabric of America. Is that problematic to have such an anti-business, negative campaign rhetoric?

JACK LEW: Yeah look, I try to stay away from making comments about individual businesses and I – we don't target our policies for one or another in business to be affected by it. You have to be able to—

SARA EISEN: But the sentiment.

JACK LEW: But you have to be able to advocate policies that make sense in terms of overall, you know, where will we be as an economy and as a country. You know, I think that we've made a case for the kinds of policies that we think are the right ones. And I'm going to leave it to the political process to work through these other issues.

SARA EISEN: Speaking of policy. Do you think Neel Kashkari, the newfound president of the Minneapolis Fed, has a point when he says, "The only way that the U.S. taxpayer can really avoid footing the bill in any future banking crisis is by breaking up the big banks"?

JACK LEW: Look, I think that we have made enormous progress in the last seven years. Building up the capital in our financial institutions, making what they do more transparent so that they can be accountable and we can see where the risks are. And making clear that if they fail, they have to be able to work it out on their own. That there's not going to be the back stop of a government bailout.

SARA EISEN: Would you ever go work for a bank again now that you've been on the other side?

JACK LEW: You know, I have a full time job. I don't think about what I would do next.

SARA EISEN: Well, until next year. There's currently legislation being debated by Congress on Puerto Rico to help solve its debt problems. You know, investors we talk to say that the legislation somewhat undermines the muni markets and sets this precedent that contracts aren't enforceable. Are investor rights taking a back seat in this deal?

JACK LEW: No, I actually think that the argument that has been made on that regard is not a correct one in terms of the structure of the municipal markets. The municipal markets right now have a very clear understanding what the risks associated with different debt issuances are. So as you've seen trouble in Puerto Rico, it hasn't spilled over into other areas. There's a broad understanding that when you have an insolvency, there needs to be a restructuring. What makes Puerto Rico kind of unique is that it's not covered by any kind of an organized process to go through restructuring. And the legislative effort is to create a process where all stakeholder interests will be fairly treated and where there will be a viable economic plan. But everybody has to be involved and you can't have hold-outs. You have to have a process.

SARA EISEN: I know you've been asked this a lot. Can you insure that Alexander Hamilton stays on the new $10? I know you're working on some sort of compromise.

JACK LEW: Sara, people are trying to get me to say what we're going to do before it's all ready to be announced. It's a really exciting process. You know, when we started this conversation not quite a year ago, it wasn't clear to me that millions of Americans were going to weigh in with their ideas. We're not just talking about one bill. We're talking about the $5, the $10, and the $20. We're not just talking about one picture on one bill. We're talking about using the front and the back of the bill to tell an exciting set of stories. What I'm committed to is keeping our currency the safest in the world. So the first principle is going to be we don't do anything that undermines the security of our currency. Secondly is we can't wait. We're going to have a representation of the contribution women have made to our democracy on the next bill that's issued. And that's going to be the $10.

SARA EISEN: So woman on the front, Hamilton on the back.

JACK LEW: I'm not saying who's where or what's where. But it's an exciting – we're going to have an exciting set of announcements.

About CNBC:

With CNBC in the U.S., CNBC in Asia Pacific, CNBC in Europe, Middle East and Africa, CNBC World and CNBC HD, CNBC is the recognized world leader in business news and provides real-time financial market coverage and business information to approximately 386 million homes worldwide, including more than 100 million households in the United States and Canada. CNBC also provides daily business updates to 400 million households across China. The network's 15 live hours a day of business programming in North America (weekdays from 4:00 a.m. - 7:00 p.m. ET) is produced at CNBC's global headquarters in Englewood Cliffs, N.J., and includes reports from CNBC News bureaus worldwide. CNBC at night features a mix of new reality programming, CNBC's highly successful series produced exclusively for CNBC and a number of distinctive in-house documentaries.

CNBC also has a vast portfolio of digital products which deliver real-time financial market news and information across a variety of platforms including:; CNBC PRO, the premium, integrated desktop/mobile service that provides live access to CNBC programming, exclusive video content and global market data and analysis; a suite of CNBC mobile products including the CNBC Apps for iOS, Android and Windows devices; and additional products such as the CNBC App for the Apple Watch and Apple TV.

Members of the media can receive more information about CNBC and its programming on the NBCUniversal Media Village Web site at

For more information about NBCUniversal, please visit