EXCLUSIVE — On Labor Day, Scott Bessent showed up to work just after 9 a.m.
While most of the country was celebrating the holiday on Monday, the treasury secretary made three stops across the greater Washington area to visit with and support restaurant workers who, like him, did not get the day off, and pump up the “no tax on tips” provision nested inside President Donald Trump’s One Big Beautiful Bill Act.
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Bessent has steadily emerged as one of the most influential members of the president’s second Cabinet. His duties have gradually expanded over the past seven months to include tariff negotiations, serving as the acting commissioner of the IRS, and community events such as Monday’s three stops.
The treasury secretary gave the Washington Examiner an exclusive interview during a breakfast stop at McLean Family Restaurant in northern Virginia on Monday. In between bites of a hot sauce-doused meat omelette, his self-proclaimed breakfast of choice, he fielded questions on a number of topics, including no tax on tips, the U.S. housing crisis, and the Trump administration’s general economic ethos.
Though the president maintains broad support from Republicans, a number of his economic policies, including tariffs, wealth distribution via tax cuts, and the seminationalization of critical corporations, look very different than the Reagan-era, trickle-down policies buoyed by the GOP for the past four decades.
However, Bessent rejected the idea that Trump is breaking from conservative economic thought, suggesting that the president’s agenda is looking to specifically help lower- and middle-income workers “catch up” to the wealthiest people and big corporations.
“As we’ve seen for the past two decades, three decades, four decades, working Americans have gotten left behind, and now it’s time for the blue-collar boom,” he said. “I call it parallel prosperity. If you were to say what’s the new economic paradigm — parallel prosperity. Because for the past, since 1980, the stock market’s done great. The high-end Americans have done great. Working Americans have not, and the stock market can continue doing great. Wall Street can do great, but now it’s Main Street’s turn. So it’s not either or, as many people say, it’s Main Street and Wall Street, and now it’s time for a Main Street catch-up.”
BESSENT: TRUMP MAY DECLARE ‘NATIONAL HOUSING EMERGENCY’ THIS FALL
You can watch Bessent’s exclusive interview with the Washington Examiner here:
And read the full interview transcript below:
WASHINGTON EXAMINER: Mr. Secretary, thank you for making time for us today. I understand you’re here at this specific diner, and you’ll be making a few other stops, to talk about the “no tax on tips” —
BESSENT: And “no tax on overtime.” Labor Day might be an overtime day.
WEX: That is true. Speaking of Labor Day, are you a little frustrated that the president has you out here hitting the pavement when so many people are at home enjoying the holidays?
BESSENT: [Chuckling] Look, I love good food. My first job was working in a cafeteria. You might have seen this. We managed to find a photo of it the other day. So there was Hardwick’s Cafeteria in Ocean Drive Beach, South Carolina, when I was 9. It was a lot of hard work.
WEX: You’ve come a long way, I would say. A lot of people, like you mentioned, working on Labor Day are tipped workers. And I think this is one of the most interesting provisions within [the One Big Beautiful Bill Act], but there’s been some confusion. I understand now Treasury is ready to say specifically which industry workers are eligible for no tax on tips and their $25,000 deduction. Could you give us a little insight on who is in and who is out?
BESSENT: Well, it’s a big list. A big list of guidelines. We’ll have it up on the website, but it’s people who have gotten tips. What we don’t want is people to game the system. We want it to be hard-working Americans who depend on tips. Their first $25,000 is tax-free, and that’s going to cover a huge number of American workers, and it’s part of President Trump’s promise: no tax on tips, no tax on overtime, no tax on Social Security, and auto deductibility, auto loan deductibility, if you buy an American car.
WEX: Yeah, that’s right, and I do want to talk about the president’s sort of general economic ethos for a second, because to be quite honest, it looks very different from what conservatives have been preaching for decades now, right? Some people, opponents, are calling it socialism light, socialism for boomers, specifically the provisions he’s given out there to our seniors, particularly the new deductions for people over 65 years old, trying to eliminate taxes on Medicare and Medicaid. So how would you, as, other than the president, perhaps the top economic steward in the country right now, how would you define this new school of economic theory?
BESSENT: Well, I don’t think it’s a new school of economic theory at all, and I also think it’s part of this incredible coalition that the president brought together. Think about this. He got the union vote, and he got the Silicon Valley vote. Who else could have done that except Donald Trump? And it’s a combination. It’s working Americans. The four provisions I just named, and some of the old-line Republican ideologues didn’t like it, but they also like having a Republican president. And I think, as we’ve seen for the past two decades, three decades, four decades, working Americans have gotten left behind, and now it’s time for the blue-collar boom. I call it parallel prosperity. If you were to say what’s the new economic paradigm — parallel prosperity. Because for the past, since 1980, the stock market’s done great. The high-end Americans have done great. Working Americans have not, and the stock market can continue doing great. Wall Street can do great, but now it’s Main Street’s turn. So it’s not either or, as many people say, it’s Main Street and Wall Street, and now it’s time for a Main Street catch-up.
WEX: Wall Street is certainly doing well. I think one of the surprises, to be quite honest with you, through these first seven, eight months of the Trump administration, 2.0, is that these tariffs haven’t necessarily driven inflation the same way that economists might have predicted. And you talked about affordability — what sort of sense can you give consumers that companies won’t be raising their prices, now that we’re through August and the president’s typical tariffs are in place, and that you guys are focusing on doing things to lower costs for working-class families and not just growing the economy for the ultra-rich or for corporations?
BESSENT: There are two ways. And we got left with a mess. The American people got left with a mess. … I came out from behind my desk for two reasons. One were these incredible debts and deficits that the Biden administration was racking up. We’ve never seen anything like this. We inherited a mess, 6.5% deficit to GDP, the highest ever in peacetime or when we weren’t in a recession.
[Server delivers Bessent’s breakfast]
Then, secondly, was the income gap and the two Americas that have been created. Under Biden, the bottom 50% of Americans got crushed. They’ve never — top 10% own 88% of stocks. That’s fun. They always do great, but the bottom 50%, if stated inflation during the Biden era, was 19, 20, 21% — the basket of goods for working Americans was within the 30s. They rent their apartments. They’re buying used cars. Groceries, insurance, medical care, and I, led by the president, we’re going to fix this. So there is this affordability crisis.
The first good step is that we got the lowest gasoline prices in four years, so [as] Americans drive on Labor Day, and we’re going to see low prices at the pump. And energy prices form the basis for everything. A big component of food prices is the transportation. So we’re starting on that. And the other thing we’re not going to do is not listen to the American people, and we know what’s happened. We know that there’s an affordability crisis. The first thing we had to do was stop the inflation. The inflation is down. I think April was the first down inflation reading in four years, under President Trump. So you’ve got to stop the ascent. Now, it’s not getting worse, and we are going to set about fixing that. And as I said, I think energy is a very good start. But the real way is for American workers to have real wage growth, and that is from good, high-paying manufacturing jobs.
WEX: Affordability and blue-collar growth are clearly a big focus of this administration. I’ve seen you tweeting a lot about a CapEx comeback, and I think these are positive indicators. My question is more, at the same time, we’ve heard from this administration that GDP is a flawed statistic. The way that the labor reports are put out, that’s flawed data. So how can you give consumers confidence that this metric that we’re looking at is a really good sign, but the other ones that we’ve looked at for decades, ‘Don’t pay attention to those,’ even if they’re not bad, they’re not quite exactly where we want to be?
BESSENT: Look, I think it’s not the numbers themselves. It’s the way they were constructed. [The Bureau of Labor Statistics] just got very lazy that, I think, the last number, and probably one of the reasons we saw these big revisions, that they received only 20, 30% answers to their questions — then they intuit the rest of the answers. So we just want more robust data. The president is trying to make the data more robust and trustworthy, and we’re on the way to doing that. But again, what are the American people feeling, and what do they feel at the grocery store? What do they feel at the end of the month? What do they see when they look at their credit card bill?
WEX: Just consumer sentiment.
BESSENT: Well, it’s consumer sentiment, but consumer sentiment can be driven by a lot of things. Consumer sentiment — I was being interviewed on Meet the Press right after ‘Liberation Day,’ and the host asked, ‘Can you promise me this?’ Or, ‘What should Americans do?’ And I didn’t want to tell her, ‘Don’t watch NBC. Don’t watch NBC, because it’s fearmongering.’ So a lot of the fearmongering, as you said, with the tariffs, with President Trump’s economic policy, it’s going the other way. I think we’re going to see a big economic pickup in 2026.
[Bessent gestures to a server]
This very, very, very nice young lady here, who’s been at the restaurant for 32 years, she’s going to get a large tax refund because of the no tax on tips. So 2026 is going to be a good year, and the other thing we’re doing is there is the human side that we talked about for blue-collar Americans, but there’s this incredible deduction for people who are forming businesses that you can expense all the equipment and the factories in the first year. So what we are doing is we are making the U.S. the best place to build your factory. So come here, build your factory using your immediate expensing. We’re bringing down the cost of energy, and you’re going to have one of the best tax provisions, if not the best, in the world.
[Off-camera]
WEX: I do have one more question for you.
BESSENT: Of course.
WEX: This is obviously a big issue, regardless of political party: the housing crisis. What more can the president really do here, other than try and sign an executive order to say, ‘Hey, Blackrock, you can’t buy up houses anymore‘?
BESSENT: That’s going to be our biggest focus. We may declare a national housing emergency.
WEX: Oh, wow. Is there a timeline for that?
BESSENT: This fall. There are a lot of things that we can do. One, is interest rates coming down, which I think they will, because what we’ve seen are distributional problems. People with assets like high interest rates, or people who have a lot of cash, and then people with high credit card debt or who want to buy a house, want lower mortgage rates. I was looking back, I was going through some old records, and I got a mortgage in 2007, and it was, it was 5.85 [% interest rate], so now we’re at 6.50 [%].
WEX: That’s not as good as my 2021 2.75 [% rate].
BESSENT: [Chuckling] Well, I think that’s the problem. I think people got used to something that’s not real, and now the prices are higher. So it’s affordability, so we’re trying to figure out what can we do? And we don’t want to step into the business of states, counties, and municipal governments, but I think you’re — we’re sitting in McLean, Virginia. McLean has a different building code than Arlington, which has a different building code than Chevy Chase, [Maryland]. Why is that?
WEX: So, just simplifying zoning codes?
BESSENT: Well, it’s zoning, but it’s also building. The more that can come out of — I grew up in building — the factory and be standardized, the lower the price. And can we free up land?
WEX: On the price of materials, do you think there might be some tariff exemptions coming down the pipe, like you mentioned, because this is going to be such a big focus? I know it’s not the only component, but it is one component that goes into all of this.
BESSENT: I think everything is on the table, and I also think closing costs are on the table.
WEX: Well, thank you, sir. Enjoy the rest of your omelette.
BESSENT: Thank you.