Scott Bessent, President-elect Donald J. Trump's nominee for Treasury secretary, defended tax cuts and tariff hikes Thursday, saying Democrats say Trump's policies will enrich the wealthiest Americans and hurt working families. refuted the accusations made during his confirmation hearing.
The clash over redirecting U.S. economic policy is a harbinger of legislative battles to come this year, as Mr. Trump prepares to enact blanket tariffs on imports and Republicans in Congress push to extend tax cuts passed in 2017. Ta.
Bessent outlined the disconnect with the Biden administration in testimony before the Senate Finance Committee. He has taken a more confrontational stance with China and signaled that he would scrap current Treasury Secretary Janet L. Yellen's global tax agreements with more than 100 countries.
In his opening statement, Bessent said Trump's plan represents “a generational opportunity to unleash a new economic golden age that creates more jobs, wealth and prosperity for all Americans.”
Bessent, a billionaire hedge fund manager with extensive experience in financial markets, has been meeting with Senate Republicans and Democrats in recent weeks, and the confirmation process is expected to go relatively smoothly. But Democratic senators blasted Bessent over Trump's plan, warning it could raise inflation and widen income inequality.
“Instead of fixing the flaws in our tax system, special rules that only apply to the ultra-wealthy, Trump is waging this class war,” said Sen. Ron Wyden of Oregon, the committee's top Democrat. I intend to do so.'' . “Mr. Bessent is a perfect example.”
During the hearing, Mr. Bessent stuck to Mr. Trump's preferred policies. He balked at the idea of a U.S. central bank digital currency. He said he would consider lifting the debt limit if Trump asked for it, and that creating a U.S. sovereign wealth fund would be a smart way to raise federal revenue.
Mr. Bessent was once a big donor to the Democratic Party, but it became clear Thursday that he no longer supports many of the party's priorities. Asked by Vermont Independent Sen. Bernie Sanders if he supported raising the federal minimum wage from $7.25 an hour, Bessent said, “No.”
Mr. Bessent frequently emphasized his South Carolina roots and the fact that he owned farmland in North Dakota in an effort to allay any Democratic insinuations that he was part of the American oligarchy. He described himself as the rare Treasury secretary candidate who listens to agricultural radio on weekends.
When pressed on controversial policy debates such as tariffs, Bessent sought to provide perspective showing that the effects are not as bad as critics fear.
Mr. Bessent dismissed Democratic concerns about Mr. Trump's trade policies and suggested exporters such as China could cut prices in the face of higher U.S. tariffs. He reminded lawmakers that President Biden had left in place tariffs enacted by President Trump during his first term, but China has rarely followed through on the trade commitments it made in the 2020 trade deal. .
Bessent said China's economy is the most “unbalanced” in the world, and if confirmed, he would urge China to start buying the U.S. agricultural products it has committed to buying as part of the deal as early as next week. said. He also said he would pressure the Chinese side to buy additional products to supplement what China had planned to buy over the past four years.
As Treasury secretary, Mr. Bessent will oversee America's wide-ranging sanctions program, and he has taken a hawkish approach in this area as well. Mr. Bessent acknowledged that Mr. Trump was concerned that excessive use of sanctions could reduce other countries' dependence on the dollar as the world's reserve currency. He suggested that it could be used for.
Democrats expressed concern that Trump would ease sanctions on Russia, but Bessent said the sanctions were too weak. He suggested that Biden had not done enough because of concerns about rising energy prices, adding that if Trump wanted tougher sanctions as part of his plan to end the war in Ukraine, he would support the idea. Ta.
Bessent also struck a hard line against Iran, saying a new era of US energy dominance would allow the US to apply further sanctions pressure on Iran's oil sector and “make Iran poor again.” insisted.
If confirmed, taxes will likely be the biggest part of Bessent's portfolio this year, as he will help develop and implement tax policy. He asked several questions regarding the tax debate already underway in the Republican-led Congress.
Republicans are preparing legislation that would extend many of the tax cuts passed in 2017 during Trump's first term. If Congress doesn't pass a new tax bill by the end of the year, measures like expanding the standard deduction and lowering individual tax rates will end, resulting in higher taxes for many Americans.
Bessent called the extension of the 2017 tax cut “the single most important economic issue of our time,” and warned that failure to extend it would result in “the largest tax increase in history” for Americans.
Mr. Bessent dismissed the fiscal impact of the tax cuts, which are expected to cost more than $4 trillion over the next decade, according to the Congressional Budget Office.
“In the United States, income is not a problem,” he said. We have a spending problem. ”
Bessent said some specific tax issues needed further consideration, such as allowing companies to immediately write off all research costs. He said he would seek to scrap international tax agreements aimed at preventing companies from reporting profits in low-tax countries.
The deal, negotiated by Yellen but not by the United States, includes provisions that allow European countries to impose new taxes on American companies. That possibility infuriated Republicans.
The hearing revealed that Mr. Bessent's own taxes were in jeopardy after a review of his tax returns by Democratic staffers revealed that Mr. Bessent collected hedge fund earnings in a way that allowed him to avoid paying more than $900,000 in payroll taxes. This came up as a surprising issue.
In recent years, the IRS, the Treasury Department's watchdog, has tried to crack down on the ability of hedge fund managers like Mr. Bessent to avoid payroll taxes. Democratic staffers wrote in the memo: Bessent's position runs counter to that of the department he hopes to lead. ”
At the hearing, Mr. Bessent said he “has up-to-date information” on his own taxes and that his company's tax issues are “ongoing litigation.”
The Biden administration fought to invest billions of dollars to shore up IRS funding, upgrade its technology and strengthen its enforcement powers. Mr. Bessent indicated he would support some of these policies, such as the Direct File program, which allows people to file their taxes for free, and upgrading outdated computer systems.
But Bessent demurred when asked by Wyden whether the IRS should focus on cracking down on tax fraud by the wealthy.
“You seem to believe that rich people cheat more often,” Bessent replied, suggesting that was an assumption that needed further research.
