President-elect Donald Trump’s pick for Treasury secretary testifies Thursday before the Senate Banking Committee, both stating his case for the position and laying out the economic agenda for the new administration.
Businessman Scott Bessent, an investor, hedge fund manager and billionaire political donor who once worked with George Soros, will offer remarks then take questions from the panel.
Highlights so far include:
- Bessent says Trump policies won’t cause inflation.
- He says fiscal spending is “out of control.”
- Heavier Russia sanctions are on the way.
- He emphasizes that Trump said Social Security would not be touched.
- Bessent believes the Fed should remain independent.
The Fed should be independent, Bessent says
Bessent believes that the Federal Reserve should be able to make decisions on interest rates independently from the White House.
“On monetary policy decisions, the FOMC should be independent,” Bessent said.
— Yun Li
Bessent says Trump policies won’t increase inflation
Bessent said he expects inflation to be “much closer” to the Federal Reserve’s 2% target under Trump, while acknowledging that decisions by Congress and the central bank could play a role in the direction of inflation.
When asked if by Democratic Sen. Maggie Hassan if he thought any of Trump’s proposed policies would increase inflation, Bessent responded, “Nothing I can immediately think of.”
The proposed tariffs and government spending from the Trump campaign led to concern among some economists and lawmakers that a Republican win could put upward pressure on inflation.
— Jesse Pound
Bessent says heavier sanctions on the way for Russia
Russia, and particularly oil companies, can look forward to tougher sanctions under the Trump administration.
“If any officials in the Russian Federation are watching this confirmation hearing, they should know that if I’m confirmed, and if President Trump requests as part of his strategy to end the Ukraine war, that I will be 100% on board from taking sanctions up, especially on the Russian oil majors to levels that would bring the Russian Federation to the table,” Bessent said.
—Jeff Cox
Bessent says the U.S. fiscal spending is out of control
The U.S. has a pressing spending problem that’s spiralling out of control, Bessent said at his confirmation hearing.
“We do not have a revenue problem in the United States of America. We have a spending problem,” Bessent said. “This is one of the things that got me out from behind my desk and my quiet life in this campaign, was the thought that this spending is out of control.”
Rising financing costs along with continued spending growth and declining tax receipts have combined to send deficits spiraling and have pushed the national debt past the $36 trillion mark.
The three-month fiscal year 2025 deficit rose to $710.9 billion, some $200 billion more than the comparable period in the prior year, or 39.4%.
“We have never seen this before when it is not a recession or not a war,” Bessent said. “Treasury, along with full government and Congress, has used its borrowing capacity to save the Union, to save the world and to save the American people and what we currently have now, we would be hard pressed to do same.”
— Yun Li
Bessent says social security ‘will not be touched’
Bessent used a question about social security as an opportunity to say that there are no plans to lower the payouts from program under the Trump administration.
“I want to emphasize that President Trump has said social security and Medicare will not be touched,” Bessent said.
Potential cuts to social security next decade, based on current funding projections, is one of the issues looming over the discussion of the deficit in Washington. Bessent did say that the government needs to get its “short-term house in order” before looking at other ideas, such as a supplemental fund, to help support the entitlement spending.
— Jesse Pound
Bessent predicts ‘sudden stop’ for economy if tax cuts not extended
US investor and hedge fund manager Scott Bessent delivers his opening statement during a Senate Finance Committee hearing on his nomination to be Secretary of the Treasury, on Capitol Hill in Washington, DC, on Jan. 16, 2025.
Andrew Caballero-Reynolds | AFP | Getty Images
Extending the so-called Trump tax cuts will be a top economic priority for the new administration, Bessent said in response to early questions at his confirmation hearing.
“This is the single most important economic issue of the day,” he said in response to a question about renewing the 2017 Tax Cuts and Jobs Act. “This is pass-fail. If we do not fix these tax cuts, if we do not renew and extend, then we will be facing an economic calamity, and as always, with financial instability that falls on the middle and working class.”
“We will see a gigantic middle class tax increase. We will see the child tax credit halved,” he added. “We will see the deductions halved. … It has the potential for a sudden stop,”
—Jeff Cox
Bessent says Trump administration policies will ‘unleash the American economy’
Bessent has completed his opening statement and is now taking questions from Senators.
The nominee’s opening statement was light on policy specifics but did generally align with Trump’s campaign points.
“As President Trump has said, we will unleash the American economy by implement pro-growth regulatory policies, reducing taxes and unleashing American energy production. The breadth and depth of our capital markets along with predictable, pro-growth tax policy and smart updated regulation will continue to make America the most popular destination a world for starting, growing and taking public a business,” Bessent said.
— Jesse Pound
Investors cheered selection of Bessent
As Scott Bessent prepares to testify in the Senate on Thursday, he has already gotten a vote of confidence from investors.
The stock market rose in the immediate aftermath of Trump announcing Bessent as his pick in late November, part of an extended rally for the market following the election.
The bond market also rallied, with the iShares 20+ Year Treasury Bond ETF (TLT) climbing 2.6% on Nov. 25, the first trading day after Trump’s announcement. Bond prices move opposite of yields.
Bessent’s past experience in the hedge fund world and familiarity with Wall Street may have helped calm investor worries about Trump’s policies being disruptive to markets.
— Jesse Pound
Bessent reportedly involved in planning gradual tariffs for Trump
U.S. President-elect Donald Trump’s nominee to be Treasury Secretary Scott Bessent arrives for a meeting with Sen. Mike Crapo (R-ID) in the Dirksen Senate Office Building on December 10, 2024 in Washington, DC.
Kevin Dietsch | Getty Images
Scott Bessent, the nominee for Treasury secretary, was one of the advisers working on a plan for President-elect Donald Trump to impose tariffs more gradually, Bloomberg News reported earlier this week.
The plan could involve a schedule of graduated tariffs increasing by about 2% to 5% a month on trading partners, Bloomberg reported, citing people familiar with the matter. The proposal is not finalized yet and has not been presented to Trump, the people told Bloomberg.
Kevin Hassett, set to be director of the National Economic Council, and Stephen Miran, nominated to lead the Council of Economic Advisers, were also involved in the discussions, Bloomberg reported.
— Yun Li
Bessent pledges to defend U.S. supply chains and the dollar
While not mentioning tariffs, Treasury secretary nominee Scott Bessent is pushing for a muscular policy when it comes to defending U.S. interests overseas.
“We must secure supply chains that are vulnerable to strategic competitors, and we must carefully deploy sanctions as part of a whole-of-government approach to address our national security requirements. And critically, we must ensure that the U.S. dollar remains the world’s reserve currency,” Bessent said in remarks prepared for his testimony before the Senate Banking Committee.
President-elect Donald Trump has promised across-the-board levies against U.S. global trading partners, though it’s possible he could tailor the tariffs against certain goods and services.
—Jeff Cox