OAN Staff Gabriella Sable
1:39 PM – Wednesday, July 23, 2025
Equipment and capital expenditures (CapEx) surged 11% in the second quarter of this year following a 23% spike in quarter one. According Treasury Secretary Scott Bessent, this marks the strongest back-to-back growth since 1997. CapEx refers to the investments businesses make to acquire or maintain long-term assets.
Joe Lavorgna, Counselor to Secretary Bessent, told One America News that the sharp rise in CapEx is largely driven by the One Big Beautiful Bill (OBBB).
“It’s a function of the One Big Beautiful Bill, which was retroactive to inauguration day,” Lavorgna explained. “Companies anticipating its passage started investing in their business. We saw that continue in quarter two, and now you’ve got a great setup for the rest of the year and beyond because the bill now is actually legislated.”
Lavorgna stated that this investment boom translates directly to rising productivity and better pay for American workers.
“It all started the CapEx, with the One Big Beautiful Bill,” Lavorgna said. “But now that this bill is law, we expect the CapEx or the investment story broadly defined to accelerate, to deepen, to strengthen. And ultimately that means faster productivity, which means rising living standards. And most important of all, to the average American, it means bigger take-home paychecks.”
A major incentive in the bill allows businesses to write off manufacturing facilities as physical structures. This could also help to lower inflation because if there is more of something, then it becomes cheaper.
“Think about how much more efficiently a business can operate if it’s incentivized to buy this new equipment,” Lavorgna added. “And again, the one thing I should highlight within the One Big Beautiful Bill, you could now expense plants like physical structures, that was not part of the original bill.”
“This is a new innovative part of the bill,” he continued. “Which will help spawn a reindustrialization, a manufacturing renaissance, or as the president broadly says, a golden age, golden era of U.S. manufacturing. And your manufacturing jobs pay higher than average wage rates.”
Lavorgna emphasized that the CapEx surge is likely just the beginning, noting that the OBBB only went into effect three weeks ago.
“This benefits companies that decided to invest already, but now the fact that you’re gonna build a plant now, you know, for certain it’s in place,” he said. “You’re not worried about the biggest tax hike coming in 2026. You could plan accordingly. You could start to hire at a faster rate. This is all really good news and it just continues what we thought would happen anyway.”
“And, the Secretary (Bessent) worked very closely with Leader Thune and Speaker Johnson to get it done,” Lavorgna added. “But really it rests on President Trump’s vision as a builder, knowing what it’s going to take to actually produce, produce something of value. And I think this bill is certainly already paying off, and I’m looking forward to the numbers getting even better as we move through time.”
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