Washington (AFP) – Donald Trump’s nominee for Treasury chief defended potential tax cuts and tariffs Thursday, telling lawmakers at his confirmation hearing that the president-elect could usher in “a new economic golden age.” Scott Bessent’s appearance before the Senate Finance Committee, days before Trump returns to the White House, saw him fielding questions on issues that ranged from sanctions to central bank independence and competition with China.
Bessent, a hedge fund manager, faced grilling by policymakers but is expected to see smooth confirmation to the top economic post, where he would play a crucial role implementing Trump’s economic vision. Already, the president-elect has vowed tax cuts, higher tariffs and a slash in federal spending. Bessent said Thursday that Trump has a “generational opportunity to unleash a new economic golden age that will create more jobs, wealth and prosperity for all Americans.”
“We can usher in a new, more balanced era of prosperity that will lift up all Americans and rebuild communities and families across the country,” he added. He took aim at government spending and high budget deficits while stressing the need to secure vulnerable supply chains and deploy sanctions carefully. Bessent, 62, also raised the need to make permanent Trump’s 2017 tax law — of which some provisions are set to expire at the end of the year.
“If Congress fails to act, Americans will face the largest tax increase in history, a crushing $4 trillion tax hike,” Bessent said. “If we do not renew and extend, then we will be facing an economic calamity,” he cautioned, noting the middle and working classes would be hard-hit.
– Tougher sanctions –
If confirmed, Bessent said he would support strengthening sanctions, “especially on the Russian oil majors,” as a means to end war in Ukraine. He suggested that constraints in American energy supplies were a reason the world’s biggest economy was reluctant to apply “muscular sanctions” on Moscow or Tehran — adding that boosting production could squeeze both countries.
On other policies, he disagreed that Trump’s pledges for sweeping tariffs on imports would be paid for domestically. The president-elect sees levies as a means to raise government revenue. While the Treasury has a less direct hand in tariff policy than other agencies, Bessent is anticipated to help shape the administration’s international trade stance. He said tariffs can be used to remedy unfair trade practices or in negotiations on issues like the fentanyl crisis.
– China concerns –
Bessent signaled a hawkish approach on China, emphasizing that Washington should ensure its lead in areas like chips and artificial intelligence. He indicated that he would push China to boost its US agriculture purchases too, enforcing the terms of a deal struck under the first Trump administration. Bessent also took aim at trade imbalances, saying Beijing was trying to export its way out of a downturn: “We cannot allow a player like this to flood our markets.”
Domestically, Bessent clarified that he backs the US central bank’s autonomy on monetary policy, telling lawmakers that the Federal Reserve’s policymaking committee “should be independent” of the president. He emphasized as well that “we must ensure that the US dollar remains the world’s reserve currency.” In November, Trump threatened a 100 percent tariff on the BRICS grouping — which includes Brazil, Russia, India, China and South Africa — if they undercut the US dollar.
– No debt default –
On federal spending, Bessent said: “We do not have a revenue problem in the United States of America, we have a spending problem.” But he stressed that Washington would not default on its debt if he took office. He likened removing the country’s debt ceiling — a limit on government borrowing to pay for bills already incurred — to taking out a car’s handbrake. However, he committed to working with Trump to eliminate the limit if the president wanted to do so.
Trump’s selection of Bessent, who is chief executive officer of investment firm Key Square Group, has been seen as a credible and safe choice. Outgoing Treasury Secretary Janet Yellen warned Wednesday that plans to extend Trump’s earlier tax cuts, which remained in place under President Joe Biden, could worsen the country’s unsustainable fiscal path.
© 2024 AFP
