Scott Bessent, President-elect Donald Trump‘s nominee for treasury secretary, defended the Trump tax cuts during his confirmation hearing and said it is crucial for middle-class families that the cuts are extended.
Bessent, 62, is a well-known hedge fund manager who founded the New York-based investment firm Key Square Group. He testified before the Senate Finance Committee on Thursday, where he faced several questions about Republicans’ plans to extend the 2017 Tax Cuts and Jobs Act, among other economic questions.
Bessent said passing a new tax bill is a huge economic concern for the country, including for working- and middle-class families.
“This is pass-fail,” Bessent told the committee, highlighting that millions of people would see a tax increase if the tax cuts aren’t extended.
Bessent said small businesses have seen a major increase in optimism about the economy that would be further boosted with a tax cut extention.
“Today, I believe that President Trump has a generational opportunity to unleash a new economic golden age that will create more jobs, wealth, and prosperity for all Americans,” Bessent said.
However, Democrats on the committee expressed aversion to extending the Trump tax cuts. They said they were a giveaway to the ultra-wealthy, a criticism that Republicans in the hearing repeatedly pushed back on.
Sen. Ron Wyden (D-OR), the ranking member on the committee, blasted the Tax Cuts and Jobs Act, which was passed on a partisan basis, in remarks before Bessent. He said extending the tax legislation would disproportionately benefit the wealthy.
“The centerpiece of the Trump economic agenda is extending the 2017 tax law at a cost of more than $4 trillion ultra-wealthy individuals who rake in millions each year would get tax breaks of hundreds of thousands of dollars,” Wyden said. “Families who live paycheck to paycheck would be lucky if they could just get enough to cover the grocery bill for a week.”
However, Finance Committee Chairman Mike Crapo (R-ID) pointed out that the majority of people, including those who are not wealthy, would see their tax burden increase if Congress doesn’t act to extend the cuts.
“This is not a tax cut for the wealthy that we’re talking about,” Crapo said. “It is a tax increase on all Americans, the majority of whom are in the lower- and middle-income categories.”
Bessent also pushed back on the characterization.
“I would respectfully disagree with much of your categorization in terms of the benefits accruing to the richest Americans,” Bessent said.
Republicans plan to pass the major fiscal overhaul through budget reconciliation, a legislative process that allows for bills to bypass the filibuster and pass with only a simple majority in the Senate.
However, extending the Trump tax cuts and adding things such as the elimination of taxes on tips will be a challenge for lawmakers, given the slim margin Republicans have in the House. With only a few votes to spare, small coalitions of lawmakers can hold up the entire tax legislation and exact concessions in exchange for their vote.
There are also some major limitations to using reconciliation because the process is limited to changes that affect taxation and spending. So, moving tax rates up or down can be done, but adding in other policy changes would be outside the remit and could be shot down by the Senate parliamentarian.
Despite the challenges, Bessent told the Finance Committee that extending the existing tax cuts is a key component of Trump’s economic agenda and will spur continued economic expansion.
Bessent faced questions on other hot-button economic matters, too.
During the hearing, Bessent blamed President Joe Biden for not raising sanctions enough against Russia and accused him of failing to punish Moscow because he did not want voters to experience higher energy prices in the lead-up to the election.
“The sanctions were not fulsome enough,” Bessent said. “I believe that … the previous administration was worried about raising U.S. energy prices during an election season. I’m perplexed to see that national security adviser [Jake] Sullivan, on his way out the door, is raising the sanctions level on Russian oil companies, and, indeed, the oil prices in the U.S. are up about 9% this month.”
He also expressed an openness to further hike sanctions against Russia.
“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, I will be 100% on board for taking sanctions up, especially on the Russian oil majors, to levels that would bring the Russian Federation to the table,” Bessent said.
Wyden asked if Bessent would commit to keeping the IRS’s new electronic filing system, Direct File, as treasury secretary. Bessent said the program will be operable for this tax season and that he will examine the matter further.
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Sen. Bernie Sanders (I-VT) asked Bessent about raising the federal minimum wage, which now sits at $7.25. Bessent said the minimum wage is more of a state matter and that he doesn’t support an increase in the federal minimum wage.
Sen. Elizabeth Warren (D-MA) questioned Bessent about the debt ceiling. Warren noted that she, like Trump, wants to see the debt ceiling removed. Bessent called the debt limit “very nuanced.” He told Warren that if Trump pushed to repeal the debt limit, he would work with the president-elect and Warren in doing so.