CEOInterviews.AIUS News Live | ‘Most corrupt Treasury Dept?’: Sánchez confronts Bessent over Trump IRS deal

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Unknown0:00

Surrounding digital asset taxation. Mr. Secretary, excuse me. I know you are a strong advocate for ensuring Main Street shares in the prosperity of our economy. And I look forward to hearing how Treasury is implementing the working families tax cuts so that Americans who power our economy, workers, small businesses, farmers, manufacturers, and producers, and innovators have a brighter future. I now recognize the gentleman from Massachusetts, the ranking member.

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Richard Neal0:33

Thank you, Mr. Chairman. Mr. Secretary, welcome. As always, the chairman made the point that this is the best committee in Congress. That's likely to be one of the few things we agree upon this morning, as all know. And you hold, as I pointed out in the past, one of the most important jobs in the world as a successor to Alexander Hamilton. We hope that there'll be some explanations this morning about the failures of many of the economic promises that were made by the Trump administration. 70% of the American people disagree with the economic direction that the country has taken. Last time you visited with us, Americans were being socked with price hikes because of the tariffs where you and I met in front of the Supreme Court that day when the Supreme Court took and heard the oral arguments because of the big ugly bill. We fought on our side every step of the way, knowing and predicting what was to come: higher costs, millions kicked off of health care, children going hungry, all in service to the wealthiest amongst us. Despite this, a rosy picture was painted about the Trump economy and what it might deliver. It's safe to say that almost on every front, those predictions from the administration have been wrong. Workers and families are being forced to stretch their dollars further every day. And the pain so clearly stems from many of these projects, including what was supposed to be a cessation of endless wars. We've watched the price hikes that are coming because of his tariff regime. And during testimony last year, you suggested that the Trump policies would lift the working and middle class and reinvigorate American manufacturing. It was stated that take-home pay and wages would increase. You relied upon consumer confidence data to tout the strength of the economy. You pointed out that inflation was improving and that costs including food, energy, and shelter would be coming down. And now we have a chance to reflect upon what actually happened, including the slow walking of the tariff refunds that are due. Families are forced to shell out $1,700 more last year to cover many of the costs that were estimated to be rosy here not that long ago. Between the tariffs, the Iran war, prices are rising faster than they have in years. Last month, the inflation rate ate up paychecks. Appreciated the chairman's position on pointing out that there has been a routine of 3% increases, but when you're paying more for everything else, that quickly goes away. The price of a tank of gasoline in many places has gone up by almost 50%. That's a staggering amount. And despite the bullish assessment in January that economic growth would hit 5.4%, 4% in the fourth quarter, that growth came in at approximately half a percent. Not even a full percentage point. That's not spin. Those are facts. The administration continues to argue that down is up and to convince people that their pain should be subjugated to patriotic causes. Whether celebrating higher credit card delinquencies on households, they're spending more every day because of the economic policies of the administration. As if the $1,700 to cover the tariffs wasn't enough, estimates are now showing that the war in Iran has already cost households another $750. And while an extra $200 in gas costs might not be a lot for some folks in the administration, it sure is for a lot of working families. I'm sure we're going to hear that there are many attempts to save the economy by touting the refunds. Those refunds were eaten up almost overnight because of increases in gasoline prices. Tax refunds fell short of the promises by 65% and have been completely wiped out, as I noted, by price hikes. The president's attention remains everywhere. But what's most important, as he said, he's not thinking about people's financial situations. He tends to be focused on more vanity projects, including a ballroom and an arch and painting the reflecting pool. We are now ready for a cage fight on the south lawn and perhaps a $250 bill with his photograph on it. We look at what has happened recently with a slush fund that was created and our Republican colleagues continue to go wobbly on their defense, perhaps not understanding how this is playing with the American people. I know the administration has been busy trying this week to explain all of it, telling members of Congress that the slush fund is dead. Apparently not consistent with what the president offered but 24 hours ago. Let's be real. The $250 bill maybe might be needed because of the price hikes that are coming to the American people. Americans have made this very clear. 77% say the policies have increased the cost of living and more than half say it's worse than they can previously remember. Consumer sentiment is currently at a record low. The savings rate for American has dropped to 2.6%, cut in half in just a year. When we look at this economy, we see failure upon failure. The policies that have been proposed have really not worked for average Americans. Families are getting crushed and we would suggest today that a new course of action needs to be taken. Republicans have made it clear that they don't want to put a stop to the chaos, but Democrats are unwavering in our fight for American families to lower cost and to end the harm that is being done. Thank you, Mr. Chairman.

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Unknown6:24

Thank you, Ranking Member. Today's sole witness is United States Secretary of the Treasury, Scott Bessent. The committee has received your written testimony and it will be part of the formal hearing record. Secretary Bessent, you have five minutes to deliver your remarks and you may begin when you're ready.

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Scott Bessent6:41

Good. Chairman Smith, Ranking Member Neal, and members of the committee. Thank you for convening today's hearing. I'm grateful for this opportunity to discuss President Trump's 2027 budget, which builds on this administration's progress in unleashing a new era of economic expansion. I last appeared before this committee just a few weeks before the House passed the working families tax cuts. So, on the heels of the most successful filing season in IRS history, I'd be remiss if I did not begin by thanking the committee for helping to deliver this once in a generation bill to the president's desk. This tax day under President Trump, we celebrated how much more money hardworking Americans kept, not how much the government took. Over 62 million tax returns claimed at least one of President Trump's signature new tax cuts: no tax on tips, no tax on overtime, deductibility of American car interest loans, and an enhanced deduction for low and middle income seniors. All told, the average refund increased by over 11% with total refunds increasing by 18%. But as important as what the legislation achieves, it is what it prevented. If opponents of the working families tax cuts had had their way, our economy would have absorbed the largest tax hike in its history, over 5 trillion. 90% of American taxpayers would have seen their standard deduction slashed while 40 million families would have seen their child tax credit halved. Instead, this committee held the line and the American people had a better tax day because of it. Notably, President Trump's pro-growth policies don't stop at putting more money back in the pockets of working and middle-class families. They extend to placing the American dream within closer reach of their children. For context, nearly 40% of Americans have no exposure to US equities, no stakes in the companies they helped to build. Trump accounts represent a profound reimagining of that arrangement. They will ensure that every American child can benefit from private ownership and compound growth, that every American child, in short, is born a shareholder. To date, nearly 6 million Trump accounts have been opened with 1.4 million eligible for the $1,000 seed contribution from Treasury. Of course, as his tax cuts deliver relief for working-class Americans, President Trump's economic agenda is bolstered by two other distinct but reinforcing levers, trade and deregulation. Let me briefly address both of these in turn. First, the president is undeterred in his determination to open markets for US goods and services while rebuilding US manufacturing capacity. Over the 12 months ending March 2026, the trade deficit for goods declined by 370 billion compared to the same time frame ending March 2025. The economy has added 313,000 net new private sector jobs and 13,000 manufacturing jobs in the past two months. Firm capital expenditures rose at an annual rate of over 17% in the final quarter and companies are investing trillions to build and expand here at home. American industry is winning again to the benefit of American workers. A whole of government approach, meanwhile, is coupling our manufacturing revival with a great regulatory reset. Properly calibrated regulation is essential for economic growth, capital formation, employment, and higher wages. So, at the outset of this administration, President Trump set the ambitious benchmark of slashing 10 existing regulations before issuing a new one. In 2025, we shattered that goal with a ratio of 129 to 1. And as a result, the regulatory actions generated more savings last year than in those of the prior Trump administration combined. Separately, any one of these initiatives on trade, tax cuts, and deregulation would be substantial. Taken together, they are transformative. Before President Trump took office, our trading partners exploited America's markets, our regulatory state smothered businesses, and our tax code was poised to punish workers and job creators. Today, his policies are driving lower taxes, bigger paychecks, and broader prosperity. So, I thank this committee for its partnership in this critical work, and I look forward to building upon our strides through the president's budget for the year ahead. Thank you.

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Unknown11:06

Thank you. We'll now proceed to the question and answer session. Mr. Secretary, yesterday in the Senate, you received a lot of questions from the Democrats over the anti-weaponization fund, which acting attorney general Todd Blanche said on the record is dead. You also told the Senate Finance Committee over and over and over and over a few more times again that you cannot discuss the settlement or the case due to ongoing litigation. Can you please set the record straight right at the top of this hearing so members do not need to use their limited time asking you questions you cannot answer. What is the status of the fund, the settlement agreement, and what part did IRS CEO Mr. Bizinano play in both?

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Scott Bessent12:04

Good. Thank you for this question, Mr. Chairman. I said yesterday that Einstein's definition of insanity is asking the same question over and over again and expecting a different answer. Let me be clear, as we've done throughout this matter, the Department of Treasury is following the direction of the Department of Justice. Acting Attorney General Todd Blanche testified on Tuesday that the government will not be moving forward with the fund. We intend to comply with that direction and Attorney General Blanche's direction. I do not have any details into what that means at this time, but I will note that even the acting attorney general Blanche's statement Tuesday, this matter is still subject to ongoing litigation, so I'm unable to comment further on it. That means I'm also not able to discuss any part of the settlement agreement. As with all department litigation, the Department of the Treasury and the IRS are represented by the Justice Department. So any additional questions about the settlement or the fund should be directed to acting attorney general Todd Blanche. To your point about Mr. Biziano, while I cannot speak on his behalf, I will note that the settlement agreement calls for the United States to issue an apology to the plaintiffs for among other things leaking their tax returns. Mr. Chairman, President Trump is a great American who has endured over 10 years of harassment and weaponization from all level of government. No American should be targeted for political reasons.

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Unknown13:30

Thank you, Secretary, for starting out with that information. This tax filing season was the most historic because of the tax relief delivered to working-class families through the working families tax cuts. How much total tax relief did Americans get just this tax season?

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Scott Bessent13:50

Approximately 325 billion, Mr. Chairman.

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Unknown13:54

And how much did the average individual tax refund increase?

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Scott Bessent14:00

The average refund increased by more than 11%. But that does not reflect the dollar value as the ranking member likes to say we overpromised and underdelivered. That is incorrect because so many people owed taxes last year that the dollar increase was actually much larger going from negative to positive. As I travel the country, I have so many taxpayers who thank me because they had to pay last year and they got a refund this year.

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Unknown14:29

So, how many taxpayers claimed at least one of President Trump's priorities of no tax on tips, no tax on overtime, no tax on social security, or the auto loan interest?

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Scott Bessent14:41

Approximately 62 million filers or about 44%, Mr. Chairman.

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Unknown14:48

And so what percent of tax filers who received a tax cut in filing season earned less than $100,000?

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Scott Bessent14:55

Just over 70%, sir.

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Unknown15:00

So what percent of waiters and other tipped workers who received a tax cut thanks to the no tax on tips earned less than $100,000?

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Scott Bessent15:12

90%.

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Unknown15:14

90. That's helping people that need it the most. Funny, Democrats always claim that the working families tax cuts were for billionaires. Mr. Secretary, I'm sure you know a lot of billionaires. Do you know any billionaires that was able to use the no tax on tips deduction?

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Scott Bessent15:36

I have plenty of billionaires I give tips to, but not monetary tips, sir.

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Unknown15:40

Do you know of any billionaires that was able to use the no tax on overtime deduction?

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Scott Bessent15:47

No, sir.

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Unknown15:48

Absolutely not. But you'll hear all day today that this tax cut was for the billionaires. But the evidence proves differently. And so I greatly appreciate that. I'm sure we will hear about inflation in the economy today too. And so at this point during President Biden's term, what was the core inflation rate?

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Scott Bessent16:16

6.2%, which led us to the worst inflation in 49 years, sir.

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Unknown16:20

Absolutely. And was the highest under Biden? What was the highest?

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Scott Bessent16:26

6.6. September of 22.

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Unknown16:31

And so what is core inflation this very second?

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Scott Bessent16:34

2.8%.

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Unknown16:37

2.8%. But at this time during the Biden administration, it was 6.2.

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Scott Bessent16:42

Yes, sir.

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Unknown16:43

Wow. You wouldn't think that was the case based on the rhetoric coming from the other side, but that's what we're going to get. The working families tax cuts renewed and revamped the opportunity zone programs to ensure that rural communities get their share of the benefits. The law provides incentives that will drive an estimated $100 billion in new investments into rural communities, helping small businesses and working families in underserved, often overlooked areas of the country. How is the Trump administration implementing this improved opportunity zone program to ensure rural communities that I represent are in fact benefiting in the way Congress intended? And how is Treasury utilizing the new transparency requirements within the program to reinforce this effort to target those underserved communities?

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Scott Bessent17:49

Mr. Chairman, as someone who grew up in a rural community, I'm very excited by the prospect of these opportunity zones being available there. I think it is new and important seeing the success and I'm also excited by the permanence. And I would also point out that many members from the other side of the aisle have called Treasury. They're concerned about losing opportunity zones in their districts or states in the case of senators and I pointed out to them that they voted against them but we will work with them on these opportunity zones. Congress wanted to reach all levels and we are working on transparency requirements which are critical to make sure that the investment is reaching the rural communities, small businesses and local projects.

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Unknown18:38

Thank you. On January 5th, 2026, through the hard work of both you and your staff, the Treasury Department secured a side-by-side agreement that largely exempts US headquartered multinational enterprises from the OECD's income inclusion rule and undertaxed payments rule. This is a major win for US tax sovereignty. How confident are you that this agreement will be respected and fully implemented by OECD members, particularly in the European Union?

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Scott Bessent19:16

I believe that we have the tools necessary that if our sovereignty is not respected, to counteract any failures to enact this and I believe this is important because with this the money comes into the US Treasury rather than foreign treasuries.

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Unknown19:39

Mr. Secretary, what I would say is you can count on us as working hand and glove as allies because Congress can also move legislation to make sure that they honor this. And we're willing to do that if they do not honor your commitment.

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Scott Bessent19:55

And Mr. Chairman, I will point out that my friend Senator Wyden complimented the side-by-side when he was back in Oregon recently.

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Unknown20:04

It's great to hear. What monitoring has Treasury put in place to ensure that US companies are not still subjected to the discriminatory treatment?

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Scott Bessent20:15

We frequently meet with the companies and we have active engagement with the OECD on this matter.

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Unknown20:23

Thank you. I now recognize the ranking member.

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Richard Neal20:26

Thank you, Mr. Chairman. Reminder that members of the committee, they get to decide how to allocate their five minutes as long as they're within the framework of the questions that they wish to ask. So, Mr. Secretary, were you or any employee of Treasury informed of the settlement that the attorney general entered into with the plan of the fund?

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Scott Bessent20:48

Again, Congressman, there's ongoing litigation and as I said, I'm unable to answer.

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Richard Neal20:53

Fine. So, I think we can agree upon this. There were 400,000 taxpayers that had their tax information leaked when Charles Littlejohn released that information. We all agree no citizen should have their taxpayer information leaked. That's a clear violation. But if we follow the logic of what has been proposed, then the suggestion would be that these 400,000 people would be never subject to any sort of IRS oversight.

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Scott Bessent21:22

Again, I'm unable to comment on that.

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Richard Neal21:27

Okay. So, let me go back to part of the statistical data that's been gathered with Barnstable, Massachusetts, which is a central hub on Cape Cod for commercial and transportation activity. They rely upon tourist dollars. It's a big deal. Over the last year, there's been a 54% decrease in Canadian tourists. We're slow walking the tariff refunds. You and I were there as I reminded the audience today when the Supreme Court heard those arguments and the suggestion was that the tax refunds were going to proceed expeditiously. That is not happening. There have been arguments that somehow that they've been slow-walked on purpose because they did cost $166 billion which would come from revenue that previously had been allocated in Las Vegas. Those who fly into the Harry Reid airport, 4.9 million people flew in last year. That's down by 12%. The positions that we have taken on the tariffs, the positions that we have taken on trade have really been inconsistent with previous presidents and previous administrations. We understand how tariffs might be used to penalize an adversary, but the application of these tariffs are not working for the American family because of the price increases that are being experienced, particularly in the agricultural states where we can see where much of the political turmoil is now playing out. Ground beef is up by 20%, as I noted earlier. Gasoline 51%, airfares have spiked by 20%. And everywhere that we turn, there's a price hike because of the economic policies that the president has embraced. Inflation has hit 3.8%. We've watched how now perhaps we're going to change the independence of the Federal Reserve Board for the purpose of complying with some political suggestions. Let me suggest here that we think that the independence of the Federal Reserve Board and in fact the independence of the former chairman of that board helped to guide us through a very rocky period of time. We watched how that service was denigrated time and again despite the fact that it was an honest patriotic effort that was made by that chairman to get us through again a very very difficult period of time. But if we don't like the outcome with the consumer price index, we get rid of the forecaster. If we don't like the result of what the Federal Reserve Board has said, then we threaten and intimidate the chairman of the Federal Reserve Board. The argument has been since your last visit that lowering cost was something that we all embraced, but there's a fundamental acknowledgement and it is not happening. I cited a previous statistic that I think remains very compelling this morning. 77% of the American people disagree right now with the economic positions that are being embraced by the administration. With that, I yield back my time.

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Unknown24:37

Thank you, Mr. Buchanan.

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Vern Buchanan24:41

Thank you for being here today, Mr. Secretary. Passing the working family tax cuts was a major win for all Americans. In addition to the record tax refunds that millions of Americans have received, I'm especially excited about the law as it pertains to small business. 100% bonus depreciation for business investment will boost the economic growth in manufacturing by encouraging small business to invest in America. Someone that's been in business for a lot of years, I can tell you the reality is very much the case. In addition, the permanent 199A small business deduction will make it easier for small businesses to create jobs and reinvest in their corporations or operations. More than anything else, I'm excited about the fact that we made a lot of this permanent. It'll make a huge difference going forward, and it has already. Working families tax cuts are ensuring that American businesses can thrive and grow in the economy. I had the good fortune of being chairman of the Florida Chamber. We had 130,000 businesses and these tax things I can tell you make a big difference. And the guy who's CEO made that reference to me many times. Mr. Secretary, the small businesses in my district tell me 100% bonus depreciation is so important that that decision is key to their buying equipment and other things. What's your thoughts on that or your experience on the bonus depreciation part?

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Scott Bessent26:12

Congressman, I believe that the bonus depreciation, the full deductibility of the equipment is one of the greatest driving forces we are seeing in our manufacturing and in fact our main street revival. And I think equally important is the permanence. The Republican Congress made this permanent. So great certainty and the 20% pass-through rate is also made permanent is giving small business permanence.

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Vern Buchanan26:48

And can you touch on 199A? That's a big thing for a lot of people in the district. It levels the playing field with the corporations where they got cut 35 to 21 or whatever or 20. But this will give that 20% will make a big difference. But I wanted to get your thoughts and what you're seeing.

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Scott Bessent27:06

Yes, sir. It gives the average small business about $7,000 more per year. And the small business deduction cuts taxes for 8 million small business owners by $4,600. And again, what is important here is the certainty and the permanence. It allows the small businesses to hire, to invest, and plan for the future.

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Vern Buchanan27:30

And then let me just touch on in my district being in Florida, we have a lot of obviously seniors, one of the I think the fifth most seniors in the country in terms of that and they're excited about this cut. I think it's 200,000 seniors that I have in my district but the number is a huge number across the country. Where is that at today? And I think more importantly to me or one of the big things is to making sure we're talking to a lot of our seniors because most of them are taking advantage but my sense of it is not all of them are taking advantage. What are we doing to communicate with the seniors that haven't taken advantage of the opportunity?

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Scott Bessent28:05

Congressman, I was just down at the Villages in Florida, the largest retirement community, not in the United States, but in the world. And I cannot tell you the enthusiastic reception that them being able to keep most of their social security has made. And these are not the well-to-do people maybe at the Villages but in general that when we saw the senior deduction, 68% of the filers made less than $100,000 and 96% of the filers make less than $200,000.

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Vern Buchanan28:44

Yeah. All for many years I'd go to these hearings or different meetings that we'd be involved in many times with senior organizations and they all always complained or thought about what are we going to address. We've paid taxes once on social security. We got to pay it again. So that's a big deal. But I just want to make sure we're doing everything we can to communicate with them so they can take advantage of it. Most have, but there's many that haven't. But thanks for your leadership and all you've done for the country.

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Scott Bessent29:13

Good. Thank you, sir. And Treasury is working with Social Security Administration to make sure everyone is taking advantage of this.

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Vern Buchanan29:21

With that, I yield back.

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Unknown29:22

Thank you, Mr. Doggett.

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Lloyd Doggett29:24

During your tenure as a Treasury Secretary, has the IRS recommended that any taxpayer be granted immunity from an audit for their taxes?

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Scott Bessent29:32

Again, one portion of that is under litigation. So, I'm not able to.

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Lloyd Doggett29:39

Yes, sir. It isn't a question of being not able. It's being not want to but my question is as I said there is litigation reserving my time my question to you again is in the ordinary practice of the Treasury Department has there ever been a recommendation that a taxpayer be granted immunity from an audit of their taxes?

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Scott Bessent30:02

Sorry, what was that?

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Lloyd Doggett30:03

Same question. Has the IRS recommended that any taxpayer be granted immunity from an audit of their taxes?

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Scott Bessent30:10

Again, I'm unable to answer that.

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Lloyd Doggett30:11

You can answer it. You refuse to answer. Can you tell the American people in the history of the Treasury Department, has there ever been a taxpayer who's been recommended to have immunity from an audit of their taxes?

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Scott Bessent30:24

Has there ever been a taxpayer who had his tax returns released, his family and every employee's?

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Lloyd Doggett30:31

Let me ask you, sir, since you say you're relying on the advice of the attorney general, the former criminal defense attorney for Mr. Trump, as you know, the attorney general cannot compromise a tax dispute unless it's referred to him from the IRS for prosecution or defense. Have you ever been involved in any way in a decision to refer a tax dispute to the attorney general?

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Scott Bessent31:01

Again, I cannot comment on that.

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Lloyd Doggett31:04

You can't comment. Your argument here that you can't comment in this case makes as much sense as President Trump saying that he cannot. I understand you want to talk over me, but you're not answering the question because you may have defined insanity by referring to Einstein, but your appearance here today and yesterday in the Senate defines deception. And that's what you're doing to the American people. Isn't it correct, sir, that the Financial Management Service within the Treasury Department must give approval before any payment can be made from the judgment fund?

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Scott Bessent31:35

Sir, we administer the payments.

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Lloyd Doggett31:39

Yes, sir. You give approval to it.

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Scott Bessent31:41

No sir, we administer them.

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Lloyd Doggett31:43

You make a sign off on them being...

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Scott Bessent31:47

We administer them just like if you tell your bank to wire money, it does not say do not pay, you shouldn't pay your visa bill.

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Lloyd Doggett31:53

Did Brian Marcy who had been only confirmed by the Senate a few months earlier as Treasury General Counsel do a good job for you? Can you answer that just with a yes or no?

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Scott Bessent32:07

Yes.

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Lloyd Doggett32:07

Yes, he did. And as you know, he abruptly resigned rather than be associated with the Trump slush fund deal and didn't sign off on anything. Can you pledge to the committee? I'm asking you a question, sir, if you'd listen to it. Can you pledge to the committee that you will assure that no retaliation occurs against the career IRS employees who wrote the 25-page memo asking the Department of Justice to halt action on this outrageous audit immunity deal?

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Scott Bessent32:36

Sir, we follow the law.

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Lloyd Doggett32:38

Okay. Well, will you follow the law and assure the committee that you won't retaliate against those courageous career employees?

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Scott Bessent32:45

We always follow the law.

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Lloyd Doggett32:46

What's involved here, sir, is the most corrupt deal in American history. Truly incredible that a president of the United States could come in and sue the people of the United States for $10 billion and then walk off with an immunity deal that no other American has ever had nor could they receive and to get that immunity deal from his former criminal defense attorney who he has appointed as acting attorney general. This is the kind of corruption that would permit the Trump family, if the Wall Street Journal is correct, that Trump earned $5 billion from his crypto bills last year, to pay him or not pay him as he feels it's smart to do. He made no complaint about the audits in his petition and yet suddenly out of nowhere he's granted immunity in what some have said in a report would be a $100 million benefit to it. You know that there is a responsibility of your department to do audits of the president every year. A report of this committee indicates that only one was begun during the first term. What are you doing to assure that those annual audits occur this year? The first term, three years, nothing. Has anything been done this year to fulfill that responsibility?

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Scott Bessent34:10

Again, sir, due to IRS rule 6103, which prohibits the discussion of taxpayer information...

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Lloyd Doggett34:17

It doesn't prohibit you indicating what you are doing to assure compliance with the law and with the long-standing practice of the Internal Revenue Service. So, I think we can assume from your deception today that nothing's being done and this president is being treated in a way that no other president, no other American citizen has ever been treated. Incredibly corrupt deal.

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Scott Bessent34:44

I would say he is being treated the way no other person has ever been treated.

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Unknown34:49

Mr. Smith.

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Jason Smith34:51

Thank you, Mr. Chairman, and thank you, Mr. Secretary, for being here today. I think these conversations are certainly enlightening and maybe sometimes even entertaining to hear some of the items that are brought up if it weren't so sad. But I appreciate many of my colleagues whom I respect speaking out against tariffs. Let me remind folks that after all the criticism of President Trump during his first term relating to tariffs, a few other things too, but in this case tariffs, unified Democratic control for two years resulted in no action on tariffs and quite honestly disengagement on trade altogether that I think brought disrespect to our country and I think damaging in many ways. But I'll move on here to talk more about tax and certainly the Treasury's recent interagency agreement with the Department of Education to address the ongoing costs to taxpayers associated with the Biden administration student loan policies. Last year I joined several colleagues in urging Treasury to rescind the waiver which prevented collection on defaulted student loans. So this agreement takes an important step toward restoring accountability and protecting taxpayers. I certainly appreciate your partnership in the effort. You know, the working families tax cut bill was very productive, certainly teed up by the Tax Cuts and Jobs Act from the first Trump term. And it's interesting, you know, in the meantime, we had a bipartisan bill where we had many of my colleagues both sides of the aisle vote for so many things from the Tax Cuts and Jobs Act. And then when we even added more middle class advantages, whether it's Trump accounts, whether it's school choice, whether it's the tax relief for overtime, likewise for seniors, I mean, the list goes on. But because there was no chance that President Biden would sign that, they voted against it. So when there was a chance that President Biden could have signed a bill, now it didn't get through the Senate obviously, but when that seemed to be the situation, they opposed it. So I just get a little frustrated when we can have good discussions here in this room and legislate. I think it's important to note that there were so many inversions happening leading up to the Obama administration that even President Obama advocated for lowering the corporate tax rate. Now, he advocated a rate that didn't have enough support here. President Trump came in, he advocated for a considerably lower rate, and we legislated basically right in the middle and it proved very effective economically, proved effective for growing revenues and growing the economy because the economy grows. So, anyway, I'm excited about the Trump accounts because I think those are going to be consequential, especially teaming up with the federal scholarship tax credit. I appreciate my colleague Blake Moore working with me to make permanent the Trump accounts because I think they are going to be very much appreciated by a lot of folks a few years down the road especially but I think even in the near term as people start thinking more about their financial future. Now, a lot's been said about various things and certainly the president, but I know that there's been quite a bit of chatter from the other side of the aisle regarding the president's investments. I'm just wondering if you could set the record straight on this and explain how there have been mischaracterizations during the process and mischaracterizations of the law perhaps.

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Scott Bessent38:48

Yeah, I want to be very clear on this. All of President Trump's investment holdings are maintained exclusively in fully discretionary accounts managed by independent third-party institutions who have sole and exclusive authority over all investment decisions including asset allocation, trading, rebalancing and portfolio management. They receive no advanced notice of trades, cannot alter or override the manager strategies or models. And unlike Congress, this was intentionally designed to maintain a clear separation between President Trump and the independent third-party investment managers overseeing his account.

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Jason Smith39:29

Thank you, Mr. Secretary. And let me just close by saying that the American people are wanting us to have good conversations, thoughtful conversations, reasonable conversations, and I think thoughtful and reasonable individuals know that what we did with our tax policy has been good. Thank you for your role in that. And I want us to work together for the betterment of our economy moving forward just as the American people would expect us to do. Thank you. I yield back.

U

Unknown40:02

Thank you, Mr. Thompson.

G

Glenn Thompson40:03

Thank you, Mr. Chairman. Mr. Secretary, thank you for being with us today. You were here a year ago. You came before the committee and you closed your testimony by saying the president's bold leadership had laid the foundation for what you called a golden age economy. More recently, you said the economy could grow by at least 3.5% this year and that Americans would see a non-inflationary boom. Mr. Secretary, I've searched hard to find constituents in my district who believe that this economy is golden. In fact, many of them are struggling more today than they were the last time you were in front of this committee. Personal savings are shrinking, disposable income is down and families are paying more and more for basic necessities. So, I would like to ask you a couple of yes or no questions about this golden economy. Electricity bills are up 8.5%. Is that golden?

S

Scott Bessent41:06

Sir, you can ask...

G

Glenn Thompson41:07

Yes or no.

S

Scott Bessent41:08

You can ask a question. You can't tell me how to answer it.

G

Glenn Thompson41:12

So, okay, let me put it this way, Mr. Secretary, because you're obviously not here to answer questions here. It's my time, Mr. Secretary. It's my time. Health insurance costs are up 26%. That's not golden. Child care costs are up 9%. That's not golden. Gas prices are up nearly 50%. That's not golden. Grocery prices are still straining family budgets. That's not golden, Mr. Secretary. Working families don't feel like they're living through a golden age. And while HR1 may have delivered modest tax cuts for some Americans, many families are seeing those savings wiped out by higher costs everywhere they shop. Is that what this administration considers a golden age? And it's rhetorical, so you don't even have to try and talk over me. Secretary, Mr. Secretary, what should I tell my constituents when they ask about these costs? Farmers who are being hit by high costs of fuel and fertilizers who can't get their product to market because of the war in Iran. Tell them it's golden.

S

Scott Bessent42:28

You should tell them that we've had 2.6% economic growth since President Trump took office despite the Democratic...

G

Glenn Thompson42:36

These farmers are pretty smart, Mr. Secretary. Well, the people in California, one person... reclaiming my time. These farmers are pretty smart, Mr. Secretary, and they're not going to fall for that line. I understand your unwillingness to testify and answer questions about details regarding the IRS settlement with the Trump administration due to ongoing litigation. But at the end of the day, your department, the Treasury Department, and specifically the IRS, is going to have to carry out its demands. And let me be very specific about what those demands are. The settlement says the IRS is prevented from raising any and all claims against the president with respect to any tax return filed before May 19th, 2026. So, Mr. Secretary, as the head of the Treasury Department, you will be in charge of carrying out the demands of this settlement. So, let me present a real true scenario for you. If on May 18th, President Trump files an amendment to his 2024 federal tax return and the amendment says, quote, I'm owed an extra $10 billion, that's the amount that he sued the IRS, that I forgot to claim on my tax return. Is it your opinion that the settlement agreement signed by Todd Blanche, the acting attorney general, and President Trump's former personal attorney, would require you to pay President Trump a billion dollars, no questions asked?

S

Scott Bessent44:14

We will follow Justice Department.

G

Glenn Thompson44:16

Okay, you won't answer that either. Do you think this is something that the American people should know? How can you sit here and not provide any answers to the American people? Because it is astonishing to me that the president didn't know about this deal before it was signed. Of course, he knew about it. He directed it. So, why not cash out on his get out of jail free card. As I read it, he can absolutely file an amendment to his tax return and claim a giant tax refund. And you have to sit there and watch while he robs the Treasury. And more important while he robs the American people blind. That's as unacceptable as you refusing to answer questions posed to you by the members of this committee. I yield back.

U

Unknown45:05

Mr. Kelly.

M

Mike Kelly45:07

Thank you, Mr. Chairman. Mr. Secretary, thanks for being here. As you know, the beatings will continue until morale improves. This is the beginning of a Charles Dickens novel, is it not? So, it was the best of times. It was the worst of times. It was the age of wisdom. It was the age of foolishness. It was the epic of belief. It was the epic of incredulity. It was a season of light. It was the season of darkness. It was the spring of hope. It was the winter of despair. How well that describes what we're going through. I will remind my friends on the other side that we had double-digit inflation in the prior administration. The president inherited one of the worst situations he could possibly do. The cost of gasoline, by the way, in June of 2022 was the average was $5.16 a gallon. As of June 4th, it's now $4.51 a gallon. So, facts are a funny thing. Use the ones that actually are true or bend them to anything you want. What I really want to talk to you about though is part of what we did when we first did Tax Cuts and Jobs Act was something called opportunity zones. And I'm going to invite you to come to Erie, Pennsylvania. Erie, Pennsylvania was at one time a thriving city that fell on very very hard times. But when we did the Tax Cuts and Jobs Act with the opportunity zones, this encouraged private investment, not taxpayer dollars, but private investment going into areas where the government would have wasted its money and does often times, but say to private investors, you know what, using the tax code, we're going to give you an opportunity to invest in something while other people would usually walk away from it. I got to tell you in Erie, under the leadership of key stakeholders and local leaders such as the Erie Downtown Development Corporation and the strategy of Erie Refocus plan, the city committed itself to a goal of revitalizing its downtown waterfront while building on its industrial heritage. Using opportunity zones as a catalyst, Erie has leveraged more than $40 million in private investment. This investment created 110 new residential units, revitalized more than 100,000 square feet of commercial space, restored eight historic properties and brought a grocery store to a neighborhood previously designated as a food desert. One of the things I wanted to talk about because under this new plan, we decided, hey, you know what? We did some great jobs when it came to cities. Let's look at rural areas. So, what I'm going to ask you to do, if you would please come to Erie where you can see how these actually things work in living color to real people in real time, how we're revitalizing a community. The job you've done is incredible. By the way, the only thing I question, what keeps you getting up in the morning and committed to things like this when you know all that work that you do, all that time that you spend, all your staff works to make it better for the American people, they help with this idea of it being a Republican idea, a Democrat idea. Why don't we just look like what's best for America?

S

Scott Bessent48:17

Well, the representative, first of all, I have heard that Erie is a poster child in a great way for opportunity zones. So I look forward to coming and visiting and I look forward to visiting the rural areas in your district and also as I said earlier, many representatives, senators from the other side of the aisle have called me to ask for guidance on opportunity zones. I pointed out that they voted against them but that is why I come in to help the American people. We can overcome partisan differences that they voted against them. It is in statute now and we will make it work for all the American people.

M

Mike Kelly48:59

You know what and I appreciate that. So we'll get with you on that because I have two friends in the Senate right now that represent Pennsylvania. They are sometimes would have been described as polar opposites. They're not. So between Senator Fetterman and Senator McCormick, we have two people in the Senate now working together to do the best things that they can do for the state they represent and the nation that they work for. I think if we could twist things around and unfortunately elections get...

U

Unknown49:24

In the way of us doing things that are actually beneficial to the American people, we tend to work on a party spectrum rather than the people we represent. As I said, I represent three-quarters of a million people. None of them are—it's not all red, it's not all blue. And in fact, what discourages me is too many of our people who live in the area no longer have faith and they don't even register to vote. But please, we're going to invite you. We're going to invite Senator Fetterman, Senator McCormick. We will get people there to sit down with you. There is such a wealth of opportunity taking place right now. The figures don't lie. Sometimes the liars can figure, but figures don't lie. Thank you for doing what you're doing in your private life to walk away from that, to walk into this. When they first described it as a swamp, they had no idea how deep the swamp has become. Thank you for being here today and thank you for your dedication to the United States of America.

Thank you, Mr. Larson.

Thank you. And thank you, Secretary, for joining us here today. It's always kind of unusual when you start a hearing and are instructed what you can say or can't say in an open and free democracy. But having said that, you mentioned in your testimony core inflation a couple of times. What's the difference between core inflation and inflation?

S

Scott Bessent50:50

Many people believe, or it is in general, energy prices and food prices which are much more fast-moving. And I would say that energy prices will roll down when this Iran conflict ends.

U

Unknown51:06

So is gasoline considered part of core inflation?

S

Scott Bessent51:14

Yes, sir, it is.

U

Unknown51:16

So those remarks—core inflation reflects gasoline prices?

S

Scott Bessent51:22

Core inflation reflects the underlying trend in inflation and whether that inflation has become endemic to the system as it did during President Biden.

U

Unknown51:34

Has the war in Iran have anything to do with core inflation? Sir, does the war in Iran have anything to do with core inflation? Or you can't answer that, or is that—are we precluded from asking that?

S

Scott Bessent51:55

Well, I'm not sure what the question is.

U

Unknown51:58

Let me make it as simple as I can. Does the war in Iran—has the war in Iran thus far caused—have witnessed the rise in gas prices? Has it caused—

S

Scott Bessent52:14

Well, again, that is the regular inflation, and gas prices have gone up, which I believe will be temporary. The core inflation has dropped 0.5% since President Trump came to office.

U

Unknown52:31

Geez, you know, when I'm home in my district, I'm going to just tell those people, 'Geez, you know what? You've missed this whole thing. Don't you understand core inflation? You guys are better off.' I mean, these gas prices—I don't know what you people are thinking out there. For God's sake, you know, they're just—you should be doing cartwheels in the street over the price of gas. So, what is the administration's plan to lower gas prices?

S

Scott Bessent52:56

We've taken the many—

U

Unknown52:58

Are you in favor of eliminating the gas tax?

S

Scott Bessent53:00

We have moved to—

U

Unknown53:03

Are you in favor of eliminating the gas tax? Are you able to answer that or is that not answerable?

S

Scott Bessent53:08

Well, if I'm not interrupted, I can, Congressman.

U

Unknown53:11

Well, I'm waiting for your answer.

S

Scott Bessent53:13

We have asked Congress to move to eliminate the gas tax. That is done through statute.

U

Unknown53:20

You have moved that. So, you're in favor of eliminating the gas tax? We can join bipartisanly today because you're in favor to eliminate the gas tax. Again, the White House has asked for it, sir. They have. Why isn't it before the committee for a vote?

S

Scott Bessent53:39

I don't run the agenda.

U

Unknown53:43

Well, it's good to hear that we're in favor of something that we can work on bipartisanly that will help relieve people who need it the most. Forgive me, but people in my district aren't doing cartwheels over this economy. They haven't seen the impact that you claim that they're all receiving. People hear a lot of rhetoric, etc., but that doesn't pay their grocery bills, that doesn't pay their heating costs, that doesn't put fuel in their tanks, that doesn't help them get through the day-to-day grind of their lives. And so coming here and filling us with platitudes and telling us how grateful we should be to the Trump administration for everything that it's done—

S

Scott Bessent54:34

Well, Congressman—

U

Unknown54:35

Is this war responsible for—Food at home is up 2.5% since President Trump took office. Are we at war? Which is twice the rate every year under the Biden administration. Are we at war currently?

S

Scott Bessent54:54

The conflict has been halted.

U

Unknown54:58

The conflict has been halted, so we're not at war. So our military is not involved. We're not at war.

S

Scott Bessent55:06

Again, if you would like for me to call the Secretary of War, I can ask. I'm the Secretary.

U

Unknown55:11

So as part of the administration and as part of this, we're not at war. How in God's name, if we can't answer any questions at all—and I don't know, maybe there are some special orders where we're not allowed to ask these questions or not. We ought to make that clear. Are we at war or not? I'm asking as relation to the cost going up for oil and gas that hasn't risen. Has it risen because of the war?

S

Scott Bessent55:39

It did rise because of the conflict. Yes, sir.

U

Unknown55:41

The conflict. So that's what we call it when our people go into battle and lose their lives.

Mr. Larson, your time is expired.

Mr. Schweikert.

Thank you, Mr. Chairman. And just, Mr. Secretary, you were already heading there. As everyone here I'm sure knows, PCE—there's actually trimmed—there's which Kevin, new Secretary or head of the Fed prefers—there's actually four or five ways you do balancing on the calculations. So if any of you want, Joint Economic—actually we have a whole chart of how those calculations work. Those facts, and they're inconvenient, and food prices—food at home has risen 2.5% since President Trump came into office, at average more than 5% under the Biden war economy. And I've got a list here that President Trump posted but no one wants to talk about it. Last year all we heard was eggs, eggs, eggs—eggs are down 90%. Avocados are down 19%.

S

Scott Bessent56:51

Mr. Secretary, you will find—

U

Unknown56:53

Which is probably—avocados probably more popular on the other side of the aisle.

Yeah, Mr. Secretary, you'll find we often choose whatever number works best for the social media posting we're going to do in an hour. So, welcome to Congress. A conversation we've been having actually with some of your staff and some of the Ways and Means staff is something that often never comes up, but we're going to have to understand it and find a better way to document it. We calculate about 17% of the US economy now is in the tax-exempt space. And within that space, those who receive the benefit of tax exemption, the basic concept is here's the community good you're doing for not having to pay taxes. There's something you're an expert on, the 990 form that documents to the IRS, to Treasury, to Congress, what is that community benefit? I know your team has been working on this. I know some of the IRS team we've been working on it. Is there a way to come up with a much more robust universal form so we can understand are these tax-exempt organizations meeting their societal obligation and if they're not, we can help them meet that. But we don't have enough information today.

S

Scott Bessent58:16

It's a great question, Congressman, and there are many tax-exempt organizations. A large part of the economy are hospitals and health care services. So we should look whether they are meeting the needs and are in fact nonprofits. But your question in terms of what is going on with these nonprofits, the IRS has issued guidance for Form 990 that nonprofits, just as banks must KYC—know your customer—we are telling the directors of these foundations, of these institutions, you must know your grantee. So KYG—if your grantee is—if the money is being used for violent activities, you as a trustee, as a fiduciary, are in trouble. If it is being used to take away people's civil rights, you are in trouble and the nonprofit status is in jeopardy.

U

Unknown59:20

My team looks forward to continuing to work with Treasury on making that more robust so we actually understand both those that are using nonprofit tax-exempt as funnels to bad acts, but also are they meeting their community obligations. One that you're probably not going to get as a question from anyone else. We have a fixation of debt management. You know, we're responsible as policy makers. We're responsible for the debt, not the administration. We do make the policy. What can we do as members of Congress, Joint Economic Committee, Ways and Means Committee to help you convince the markets, you know, please buy a 10-year note? Please. Where we have some visibility to see where we're going. I do have some concerns in the future where the entire world is binging on debt that we have some stressed auctions. What do we do as a country to actually not have that happen to us?

S

Scott Bessent1:00:28

So since President Trump came into office, the US Treasury market has been the best performing developed market. But that is not assured. It is assured that the Treasury will have a regular and predictable issuance cadence. But what we must let our borrowers know—people who are buying Treasury bonds, whether it is US households, the foreign central banks, and everyone else in between—is that we are serious about getting our debt and deficit numbers under control.

U

Unknown1:01:07

That is perfect, Mr. Secretary. And with that, I yield back, Mr. Chairman.

Mr. Davis.

Thank you, Mr. Chairman, and thank you, Mr. Secretary. Secretary Bessent, as of April 18th, taxpayers received about 3.4 million delayed refund letters. Illinoisans received 110,000. Texans, Floridians, and New Yorkers each received over 200,000, and Californians received 400,000. Almost three months ago on March 9th, Representative Su and I asked you for basic information to demonstrate that Americans are actually getting their delayed refunds. Last month, I requested a meeting with the appropriate staff at the IRS or Treasury for this information. It was not until this morning that I received a response from Treasury. And although the letter contains some high-level information, it is insufficient to reassure me that Americans are receiving their refunds quickly. For example, the information in this morning's letter is substantially outdated. Today's letter cited 2.2 million CP 553E notices when a separate document you sent me a few weeks ago cited 3.4 million notices as of April 18th. Also, the information in today's letter fails to convey the current number of unique taxpayers whose refunds were delayed. Nor does today's letter give a clear understanding of how quickly taxpayers are waiting on their delayed checks. So, Mr. Secretary, could you tell me when—before June 11th, will you or your staff meet with Representative Su and me to walk us through the evidence that taxpayers with delayed refunds received the funds owed to them?

S

Scott Bessent1:03:42

I have not seen the letter, but I will follow up on this. And the delays that you were talking about are for taxpayers who did not file electronically. We had 98% of taxpayers file electronically; they received their refunds within 21 days. It sounds to me that out of the approximately 134 million tax returns that we received, that the April number would have been the unprocessed, and we are at 2.2. So we are working through it, and much of that has to do with verification, lack of addresses. So we look forward to working with you on that because we are committed.

U

Unknown1:04:24

Well, thank you. Thank you very much. Well, let me just continue. Mr. Chairman, could you assist me to make sure that the American people receive the information—3.4 million delayed notices getting their refunds expeditiously. And also, I'd like to submit for the record a state-by-state breakout provided to me by the Internal Revenue Service where 3.4 million taxpayers live and whose refunds were delayed as of April 18th.

Without objection.

Thank you, Mr. Chairman.

And Congressman, what was that number last year?

3.4 million.

No, no, no. I meant for the previous filing season and the year before that.

Well, I don't know the number for either one of those years, but let me move to my last question. I understand that the Southern Poverty Law Center has been indicted. And let me ask, is the Internal Revenue Service involved in that activity in any way?

S

Scott Bessent1:05:43

Again, that's ongoing litigation, but that would have been done—as I read in what I know, is what I've read in the newspaper, and that was the Justice Department and the FBI.

U

Unknown1:05:54

And Internal Revenue is not urging or suggesting to any other entities that they may lose their tax exemption if they contribute to the Southern Poverty Law Center?

S

Scott Bessent1:06:09

Again, there's ongoing litigation, but that's driven by the Department of Justice and the FBI.

U

Unknown1:06:17

Thank you, Mr. Chairman. I yield back.

Thank you, Mr. LaHood.

Thank you, Mr. Chairman. Mr. Secretary, welcome. Thank you for being here today. Thanks for your service. I want to touch on affordable housing. I think collectively, as we travel back to our districts, we continue to hear about the lack of affordable housing. And I would describe it as a rural, suburban, and urban problem. And last year in the working families tax cut bill, we included a number of provisions on affordable housing. And one of those was my bill that was included in there on the affordable housing tax credit. And as you're well aware, one of the most significant barriers to economic success in our communities is housing. And so in the working families tax cut bill, we included the affordable housing tax credit which includes a permanent 12% increase in the 9% allocation of LIHTC credits beginning this year. Independent analysis have estimated that this will lead to the development of more than 1.2 million more affordable homes nationwide over the next 10 years because of what we did. From your perspective and the Department of Treasury, what will the expansion of the affordable housing tax credits mean for working families struggling to afford housing?

S

Scott Bessent1:07:34

The LIHTC provision specifically gives great predictability for investors and builders who want to go into the market, and I think we've already seen a pickup in those areas with this program.

U

Unknown1:07:51

And Mr. Secretary, what do you see as we try to address this problem? Other mechanisms within Department of Treasury or legislatively that we ought to be looking at?

S

Scott Bessent1:08:02

Well, there are two housing bills, one in front of the House and one in front of the Senate, and that seem to be languishing.

U

Unknown1:08:11

I want to switch topics. I also, beyond being on the Ways and Means Committee, I serve on our Select Committee on China, which is a bipartisan committee focused on how do we win the strategic competition against the CCP. And I also serve on our Intelligence Committee. And I want to focus on 45X. And that's a provision in the tax code. And so, last year in the working families tax cut bill, we included the foreign entity of concern restrictions that pertain to curbing Chinese technology by manufacturers and mandating in that bill that they operate fully independent companies here with no reliance on Chinese entities. Despite these clear requirements, recent media reports indicate that many manufacturers continue to depend on the active support of Chinese engineers overseen by the CCP security officers embedded in their US facilities, undermining the objective of fully transferring operational knowledge of these technologies to US companies. So, Mr. Secretary, what is Treasury doing to address and prevent Chinese penetration and involvement in these companies receiving the 45X tax credit?

S

Scott Bessent1:09:25

So we are polling the companies. We are asking for verification that this is not happening, and whenever we receive a report, we investigate it, just as with CFIUS. CFIUS is self-reported. But when we discover transactions that we believe should have been reported, then we can go back and investigate those transactions.

U

Unknown1:09:49

And to your knowledge, have any of those investigations led to a fruitful prosecution or holding somebody accountable?

S

Scott Bessent1:09:56

I can get back to you. I can have my staff get back to you, but I can tell you it has been very robust. And you would have seen that recently the FCC banned Chinese drones and routers, and with the connected auto mandate, electronic systems in American cars cannot be connected to Chinese entities.

U

Unknown1:10:23

Thank you. And I'll look forward to the follow-up with you and your team on this. This is something obviously we got to be heavily focused on. Lastly, in my remaining time, I just want to focus on digital service taxes as it relates to Canada. And maybe obviously we have concerns. We credit the administration for what you've been able to do on DSTs in Europe. But there's still some concerns with our Canadian friends. Can you comment on where we're at with that?

S

Scott Bessent1:10:48

We are pushing—whether it's Europe, whether it's Turkey, whether it's Brazil, whether it's India, whether it is Canada—we are pushing back on these digital service taxes. We have the greatest technology and innovation ecosystem in the world, and they cannot take advantage of our companies for their treasuries. They are very interesting—they are very ripe targets because they are profitable, they are well-run, and they are in demand. But we cannot have this, and in every trade negotiation or every trade discussion with the Canadians, we bring this up.

U

Unknown1:11:31

Thank you, Mr. Secretary. Yield back, Ms. Sanchez.

Thank you, Mr. Chairman. Secretary, nice to have you back before our committee. Mr. Secretary, do you believe that all Americans should follow our tax laws?

S

Scott Bessent1:11:48

Yes, Congressman.

U

Unknown1:11:51

Yes. Good. So do I. And do you believe that for those Americans who break our tax laws, they should be audited or held accountable?

S

Scott Bessent1:11:59

Well, I think there are two things there. An audit is not a result of breaking the law.

U

Unknown1:12:05

Yes or no? Simple question.

S

Scott Bessent1:12:07

Well, no, it's not a simple question. Let me break it into two. If you're asking me—please don't interrupt me.

U

Unknown1:12:13

Please answer that. I came here for answers. If you came here to waste time, I'm going to try to make sure you don't do that. Do you believe that people who lie on their tax return should be audited?

S

Scott Bessent1:12:27

Yes.

U

Unknown1:12:28

Okay. Do you think that people who break our laws should be held accountable, or tax laws?

S

Scott Bessent1:12:32

Yes.

U

Unknown1:12:33

Okay. Thank you. Very simple. Not a hard question. I'm glad we agree. So why is it that you are allowing President Trump to have complete immunity from being audited?

S

Scott Bessent1:12:44

Again, I'm going to have to refer you to my previous statements.

U

Unknown1:12:48

And what was your previous statement, sir?

S

Scott Bessent1:12:50

I am unable to comment on any of the ongoing litigation.

U

Unknown1:12:54

Okay. Can you name the ongoing case concerning President Trump's immunity from audit?

S

Scott Bessent1:12:59

Sorry.

U

Unknown1:13:00

Can you name—there are three cases. Can you name them, please?

S

Scott Bessent1:13:04

That are out there now, and I will be happy to get back to you on those because again, I am not a lawyer. We are represented by the DOJ.

U

Unknown1:13:14

Great. You said that you can't because there's ongoing litigation. You'll get me the name of the ongoing litigation because the only ongoing litigation that I know of is surrounding the $1.8 million slush fund which has already been suspended. The fact is that the judge's ruling in the litigation that references that slush fund only addresses the anti-weaponization fund. It doesn't even address Trump's immunity from audit. So, I would like to ask unanimous consent to enter into the record the judge's order in the Floyd versus Department of Justice case.

Without objection.

Thank you. Now, Secretary, you said you're not an attorney. Is that correct?

S

Scott Bessent1:13:58

Mercifully.

U

Unknown1:14:00

Okay. Well, I am, and I'm actually proud to be an attorney and know the laws and I know how to read a judicial ruling. Furthermore, I know that since 1962, the Supreme Court has held that ongoing litigation does not prevent someone from testifying in a congressional hearing. So, once again, I'm going to ask, why are you allowing President Trump and his family to have complete immunity from being audited?

S

Scott Bessent1:14:27

Again, since you're a lawyer, you will understand that the US Treasury and the IRS are represented by the Justice Department and the acting Attorney General.

U

Unknown1:14:36

Yes. But I just mentioned a Supreme Court case that doesn't bar you from testifying. It's pretty clear to me though, however, that you're not interested in answering questions. You're interested in arguing. Let me ask you this question. If President Biden amended a prior tax return and claimed that he was owed $1 billion, do you think that that would be audited or should it be audited?

S

Scott Bessent1:14:59

I'm not going to talk about any—

U

Unknown1:15:04

Because you're not really here to answer questions. I don't understand why you wouldn't audit that and I don't understand why you wouldn't do the same for President Trump. So, the ruling—do you have the ruling by the Justice Department? Do you have specific knowledge of an audit of President Trump?

S

Scott Bessent1:15:22

Excuse me.

U

Unknown1:15:23

It's my time. You're not here to ask me questions. I'm here to ask you questions and hopefully you're here to try to answer some of them. I'm curious to know who counts as Trump's family for the purposes of this immunity. Is it his children, his in-laws, his grandchildren, his second or third cousin, his great-great-grandchildren? Do you know the answer to that question, Mr. Secretary?

S

Scott Bessent1:15:49

Again, I imagine you have the Justice Department phone number. I suggest you call them.

U

Unknown1:15:54

I'm not the one that runs the Department of the Treasury or that oversees what is happening with this immunity that has—

S

Scott Bessent1:16:02

I'm not the one either. We follow the instructions of our lawyers and we obey the law.

U

Unknown1:16:07

I hope that you're proud of your performance today, Mr. Secretary, because I think—I hope you get some—pretty safe to say that this is probably the most corrupt Treasury Department in our nation's history. And while you dance around questions to protect Trump, Americans are suffering in Trump's spiraling economy. Inflation is now rising faster than average hourly wages. Gas prices are at an all-time high with the war in Iran. The cost of groceries has risen 3.2% over the past years. And prices on most goods have gone up because of Trump's tariffs. So, I don't see how you could call that anything other than a failure of the most corrupt Treasury Department in history.

Your time is expired, Ms. Sanchez.

Thank you. My time is expired. Secretary, I would love for you to respond to the accusations at your department because I think you were due the opportunity for that.

S

Scott Bessent1:17:04

The congresswoman is slanderous. She has nothing but unsubstantiated opinions, and I will not stand for that. There is nothing corrupt. We move at the highest levels, and just because she cannot get the answer she wants—if she would like to give me facts, she seems long on facts—short on facts, long on hot air, and I will not stand for that.

U

Unknown1:17:37

Yeah, that's great.

Mr. is recognized to make a remark like that.

Apparently, my colleagues had a sudden interest in the rule of law. I wonder if you asked her if she thought illegal immigrants should be detained and deported or caught and released what the answer would be.

S

Scott Bessent1:17:56

Well, and Congressman, and two on inflation, I am not going to take firefighting advice from an arsonist.

U

Unknown1:18:02

Well, Mr. Secretary—

S

Scott Bessent1:18:03

Torch the American—

U

Unknown1:18:04

Mr. Secretary, maybe we ought to ask the question. Should the sons of presidents who have multiple felony convictions, should they be held to the same standard of the American people in terms of crime and punishment? I wonder what the answer to that question would be. Let's not veer off. Apparently, wages and take-home pay aren't the only thing up in this country. Irony and hypocrisy at an all-time high among my Democrat colleagues. Now we see why someone leaves California every 2 minutes.

And that hypocrisy and irony starts with questions about price increases. It was the failed economic policies—one self-inflicted failed economic policy after the other that created the worst inflation crisis in a half a century. Unbridled spending. If you add the hikes in interest rates, it would be about $12 trillion in deficit spending. Waiving work requirement for able-bodied adults on welfare. Giving welfare and health care to illegal immigrants with the stroke of a pen by President Biden. Layers of taxes on American competitiveness. Layers of regulation on our small businesses. And you know what? We pay a premium right now, and we will temporarily, to defend our country, our children's future against a nuclear Iran, against a radical terrorist regime where we are under imminent threat. We will pay a premium at the pump. But gas prices were at a two-decade low in terms of disposable income. We had gas prices before the conflict below $3. President Biden and four years of Democrat policies, gas prices went from $3.30 to $5. Now, we pay a premium for national security in times of conflict. And when we have imminent threat, we're trying to stave off another addition of nuclear power to the axis of evil. But the premium that the Democrat policies imposed on the American people was for what? A mandate for electric vehicles. What did we get for that premium? We got hundreds of billions of dollars—it was supposed to be $200 billion—$800-plus billions of dollars in giveaways, corporate subsidies for green energy. That's what the American people got. They got higher energy prices, higher electric bills because of this radical climate agenda, the Green New Disaster. And that was the tradeoff from my Democrat colleagues. So, a little context to this conversation I think is helpful. The results, as you know, Mr. Secretary, were that the American people every year were losing $3,000 in wages. That they had a 21% regressive tax hike. 21%. They were losing $1,500 a year. I mean, are we in the golden age? Well, relative to the dark ages that we were thrust in by these failed policies, we are at the dawn of a golden age because wages are up, take-home pay is up. GDP, you said, is 2.6%. Well, that's a percent over what CBO said after we passed the big beautiful bill. And on an annual average basis in a budget window, that's $3 trillion to reducing the deficit, which may be why the deficit was reduced over 10% in the first six months of this fiscal year compared to last fiscal year because we actually controlled discretionary spending and have saved up to now almost a half a trillion dollars. It's because Republicans actually cared about not frittering away tax dollars. And we rooted out waste, fraud, abuse to a tune of over a trillion dollars because we had quadruple revenue from having restructured world trade order and set a level playing field for our farmers and manufacturers. Because of all of that, plus the growth, we have had a reduction in the deficit to GDP for the first time in almost a decade. I'm out of time. I think you're doing a great job. Keep it up. Don't listen to the noise.

S

Scott Bessent1:22:40

Oh, I don't, sir. Look, they don't want to talk about how they voted to cut the child tax credit in half for 40 million people, voted for higher rates on low and middle-income families for a $5.5 trillion tax hike. And if I were the Democrats this side of the aisle, I would be terrified how many Americans applied for no tax on tips, no tax on overtime, reduced taxes on social security, and deductibility of auto loans. 7.5 million no tax on tips, 29 million overtime. Seniors, 35 million.

U

Unknown1:23:10

Mr. Arrington, your time is expired.

Unbelievable. Keep up the good work, Mr. Secretary.

Thank you, Ms. DelBene.

Thank you, Mr. Chairman. Thank you, Mr. Secretary, for being here. Last year, one of President Trump's first actions was to put his billionaire donor, Elon Musk, in charge of the so-called Department of Government Efficiency. By the end of Musk's short but destructive tenure, DOGE had nearly quadrupled its original budget, lost taxpayers hundreds of millions of dollars in estimated interest and fee revenue, and paid 200,000 federal employees roughly $22 billion to stop working. DOGE was a massive failure. It turns out moving fast and breaking things and having no clue what the heck you're doing is not the most efficient way to govern. Unfortunately, DOGE's destruction wasn't limited to wasting taxpayer dollars and gutting the federal service. DOGE staffers also abused their position to gain access to taxpayers' sensitive private data. Mr. Secretary, on January 31st, 2025, you personally granted DOGE access to one of the Treasury Department's payment systems at the Bureau of the Fiscal Service. This database houses Americans' most sensitive data, including social security numbers and bank account information. Shortly after, my colleagues and I requested the GAO review DOGE's unprecedented access to this critical payment system. GAO completed that report last month and I ask for unanimous consent to insert it in the record.

Without objection.

Thank you. GAO's audit determined that a DOGE employee was inadvertently granted temporary access to create, modify, and delete data from the payment system. Mr. Secretary, you failed to impose basic safeguards that left millions of Americans' personal data vulnerable to unauthorized access and abuse. And so my question for you is do you take responsibility for that? And if what specific measures, if any, have you taken afterwards to protect the affected individual's data and rebuild confidence in your department's handling of sensitive information?

S

Scott Bessent1:25:23

Again, the—would you care to look up what does inadvertent mean?

U

Unknown1:25:28

Did you—have you taken—but you're in charge? Are you—you are responsible for this? Do you take responsibility for that? Do you take responsibility?

S

Scott Bessent1:25:36

I will take responsibility to edit.

U

Unknown1:25:46

What has happened to make sure that never happens again?

S

Scott Bessent1:25:49

We have—they just as we have at the IRS, we have tightened up all protocols on systems.

U

Unknown1:25:56

I guess that's not very specific, but the GAO also found that a DOGE staffer sent an unencrypted file containing USAID payment information and individuals' names to external DOGE personnel at the General Services Administration. Soon after, it was reported no disciplinary action was taken despite the employee's failure to protect federal and non-federal employees' sensitive personal data and comply with security requirements. So again, Mr. Secretary, when employees who violate IT security rules are not held accountable, what does that message send to agents and why don't you hold someone—

S

Scott Bessent1:26:36

Why are you bringing up USAID with me?

U

Unknown1:26:39

Because a DOGE staffer found that payment information—

S

Scott Bessent1:26:44

Payment information USAID, I do not oversee. I wear many hats in this administration, not one. This is still—this is a file containing payment information.

U

Unknown1:26:54

Are you not in charge also of the Treasury?

S

Scott Bessent1:26:58

That has USAID, that has nothing to do with us.

U

Unknown1:27:01

But payment information has nothing to do with it?

S

Scott Bessent1:27:03

Again, it was not sourced at the Treasury. Why are you bringing this up with me?

U

Unknown1:27:08

So GAO provided six recommendations to address identified weaknesses, including ensuring staff agree to comply with IT security rules and configuring systems to detect and prevent the transmission of unencrypted payment data. The report states that the Fiscal Service—again, the Fiscal Service, part of your agency—agreed with three of the recommendations and did not state whether it agreed or disagreed with the other three. So, Mr. Secretary, can you confirm Treasury's position—this is part of your purview—that Treasury's position on all six recommendations. And if you agree that they are warranted, please let us know. And if you disagree with the recommendations, please explain why.

S

Scott Bessent1:27:57

Again, I don't have a copy of the recommendations in front of me. Your office did not share them in advance. We'd be happy to get back to you. We would obviously agree with the ones where we've already agreed.

U

Unknown1:28:07

So I hope that you understand that these are findings from the GAO about ensuring that information is protected. And again, we have seen access to taxpayer information at least. What are you doing to address this and are you taking responsibility? People don't have faith that access has been given against the law.

S

Scott Bessent1:28:29

Well, again, President Trump and his family and employees of the Trump Organization—400,000 people had their tax returns stolen at the IRS.

U

Unknown1:28:39

You are in charge. What are you doing to prevent that? Americans' people's sensitive information has been leaked outside.

Your time has expired.

S

Scott Bessent1:28:49

We have tightened the protocols. We have tightened access.

U

Unknown1:28:52

And you have said nothing specific of what you've done to—

Ms. DelBene, your time is expired. Mr. Estes is recognized.

Good to see you, Congresswoman.

So frustrating.

Thank you, Mr. Chairman. Secretary Bessent, I welcome you to Ways and Means and thank you for being here today. And Mr. Secretary, I want to go back to last year when you were here before the committee and the conversation turned to discussions around OECD Pillar 2. There's much discussion about how Congress and administration could work together to stop the taking of our tax authority by other nations and losing over $120 billion from the US Treasury over the next 10 years. I'm proud to say we're in a much better spot than we were a year ago, thanks to a lot of the hard work by your Treasury folks and the effort we got done there. The side-by-side agreement that you and your team negotiated is an important agreement that protects the American tax base from foreign countries looking to use our economy as an ATM for their own budgets. I know some members of this dais and their allies in the liberal press believe that this agreement gives successful American companies a free ride, but that's simply not true. The reality is President Trump and Republicans in Congress have done so much work on both the working families tax cuts and the Tax Cuts and Jobs Act to make the US tax code more competitive and cement the US as the best place to do business. Mr. Secretary, can you tell us a little bit about how corporate tax revenue has changed since we passed TCJA in 2017 and thanks to our more competitive tax code?

S

Scott Bessent1:30:21

So it's a combination there, Congressman. We are seeing a pickup in corporate revenue, but importantly, where we are seeing the deductions is for the full expensing both for equipment and structures—both factory structures and farm structures. So you can think of that when you see that deduction taken, you are actually creating the future tax revenues by building up the productive capacity of our country, and that increases productivity. So, on that side, and on the other side, Pillar 2—getting this sorted out and making sure that the tax revenue comes into the US Treasury was essential. The US first instituted the global minimum tax, and the Biden administration wanted to supplicate us to other countries and an internationalist tax regime that we were having none of.

U

Unknown1:31:23

Yeah, thank you for doing that. Can you give us a little update on how some of the countries are implementing the side-by-side agreement and how we're keeping to move forward on that?

S

Scott Bessent1:31:33

We're finding a very, very good partnership, and we are implementing it via our partnership with the OECD and our constant interaction with them.

U

Unknown1:31:45

Yep. Well, thank you, and we're going to continue our work to trust but verify that that process continues in other countries to actually provide fair treatment for US businesses. I want to thank you for your comments and your work you're doing on the digital services taxes as well. As you mentioned earlier, a recent analysis I've seen is that American businesses pay nearly $3 billion a year in foreign DSTs as of now. And it would siphon off $117 billion in tax revenue over the next 10 years. And we need to continue that effort and appreciate your work in that regards. You know, we in the United States, both in Congress and Treasury, plan to commit to protect our tax base from foreign attempts to take it. And while we welcome negotiation and engagement based on the foundational principles of taxation, our resolve is absolute. We want to make sure that we continue to provide every tool available, including ones that we may have put on the shelf recently, to ensure we're competitive on a world stage. And this is true whether you're talking about Germany with their Section 49 or whether you talk about Italy or Mexico that have been trying to weaponize tax audits or raiding offices and homes and threatening criminal charges against US companies. I want to switch quickly to domestic tax code. You know, everyday Americans, businesses, and individuals tremendously benefited from our historic tax relief. 97% of taxpayers received a tax cut this past filing season thanks to no tax on tips and no tax on overtime and increased standard deduction and enhanced senior deduction. And these are American first provisions that have put more money in the pockets of hardworking Americans. I want to recognize that some of the changes and as you've mentioned in the working family tax cuts had with manufacturing where there's research and development and capital expenditures that have been able to put in place for long-term growth. Have you—I only have a few seconds. I don't know if there's some comments you want to make about the economy and what you've seen over the last year.

S

Scott Bessent1:33:52

Congressman, I would say the economy is very strong. We are experiencing a short-term elevation in prices due to the Iran conflict. That will come down. What the other side doesn't want to talk about is job growth is strong except for April. We have seen real wage growth every month—every month since President Trump took office. They don't want to talk about that. 2.6% economic growth despite the shutdown in the fourth quarter of last year and despite the Iran conflict. We will get on the other side of this, and we are creating jobs, and importantly, Congressman, these are jobs for Americans, not the 5, 10, 20 million illegals that flooded across the border during the Biden administration.

U

Unknown1:34:39

Oh great, thank you for being here, Mr. Chairman. I yield back.

Mr. Smucker.

Thank you, Secretary. Yeah, we're here. Thanks for being here. Very much appreciate your leadership, and I think you just cited some figures about the economy that are really important. Real wages have been growing under this administration and after the implementation of the bill that we passed. Very different from what we saw under the Biden administration when people were really feeling the pain of the rising prices because wages didn't keep up. So grateful for, as I said, your leadership. One of my priorities in the big beautiful bill was the Section 199 deduction, making that permanent. Heard from businesses about how that's affected their investment decisions when they have that permanency ahead of them. And how they're doing is really important to every community that they reside in. And so, I'm very proud of what we've been able to accomplish. I do want to very quickly—another of my priorities was direct primary care. Employers in my area using direct primary care as a way to provide better access to health care. We wanted to ensure that contributions to HSAs by employees are tax-deductible. That was in the bill. We also wanted that to extend to employers, and I think there's some question about that as Treasury is putting together their guidance on that. So I just wanted to hear from you whether you agreed and whether you could assure us that Treasury's guidance will allow that to be deductible for businesses as well.

S

Scott Bessent1:36:23

We are working on that, and HSAs have been a very powerful tool, and we've seen that the take-up—30, I think 37, 40-something percent. So we will work on that and get that guidance out, sir.

U

Unknown1:36:38

Yeah, I hope that we go with that initial intent which was to make that deductible for employers as well. Thank you for that. I wanted to—you had to pull this up—a statement you made in regards or during the discussion with Schweikert in regards to the debt and the markets that I thought was really good and I wanted you to expand on that if you would. You said—and I maybe paraphrase just a little bit—but to assure that we have a regular and predictable issuance and cadence, people who are buying Treasury bonds, whether it's US households or foreign central banks, they have to be assured that we're serious about getting our debt and deficit numbers under control. I know you really care about this. I certainly do. I feel at times like the American people don't fully understand the impact of the debt on economic activity today but the threat going forward. So I'd love for you to expand on that a little, talk about why that's important and what steps—what are the steps that we could be taking in Congress to address the debt and the deficit numbers.

S

Scott Bessent1:37:57

Congress, let's look at a little bit of history. And this is MIT's numbers, not my numbers. MIT believes that almost 50% of the inflation we saw during the Biden era was due to the size of the deficits. So, first of all, for the American people, not only does it affect the interest rates, our ability to issue debt, it also affects inflation. When you have these roaring deficits, money goes into the economy. And what the Biden administration did was they injected—you had a demand shock through giveaways, but then you constricted supply with the regulatory state, and that's how you get inflation. And this administration is doing the opposite. We had a fiscal contraction for calendar year 2025, and as I said earlier, we are cutting regulations. So we are increasing supply, whether it is energy or services. So that is why core inflation is down more than half a percent since President Trump came in.

U

Unknown1:39:05

One of the things we're talking about in the Budget Committee with Chairman Arrington is a resolution that would set a goal for Congress to get to a 3% deficit-to-GDP within the next decade. This has bipartisan support. We're hoping to see that support grow. You've talked about this. You've set a goal of wanting to be at a deficit percentage of GDP starting with three by the end of the administration. Wonder if you could talk about the importance of that goal as well in just a few seconds I have remaining.

S

Scott Bessent1:39:43

Yes, sir. I came out from behind my very comfortable desk and here today because I was concerned about that trajectory, and I do believe it is possible to get back to the historical level 3% deficit-to-GDP. And while that is not a balanced budget, if you have nominal growth above that level, you are paying down debt.

U

Unknown1:40:06

Thank you, Mr. Chu.

Secretary Bessent, since President Trump—

Launched his illegal war in Iran, you've repeatedly assured Americans that higher prices would be temporary. In March, you said Americans should expect only 50 days of temporary elevated prices. Secretary Bessent, it's been almost 100 days and inflation is at a three-year high with no indication of going down. In May, you said help is on the way when it comes to skyrocketing gas prices. A month later, Americans are still searching for the relief you promised as they pay more than double at the pump than what they paid before the war started. Later that month, you described rising inflation as a very limited spike. In reality, for the first time in three years, inflation is outpacing Americans' wages and American saving rate has dropped by half since last year. And just yesterday, before the Senate Finance Committee, you again characterized inflation as a short-term blip. Recently, President Trump proudly claimed that he doesn't think about Americans' financial situation when it comes to the war with Iran. So, I want to ask you, Secretary Bessent, do you agree with President Trump that you also do not care about Americans' financial situations?

S

Scott Bessent1:41:35

Congresswoman, who was the president during World War I?

U

Unknown1:41:42

Can you?

S

Scott Bessent1:41:42

No.

U

Unknown1:41:43

Are you refusing to answer my question?

S

Scott Bessent1:41:45

No, I'm asking. Who was the president during World War I?

U

Unknown1:41:49

I don't know. But clearly you are not answering. World War I was... well, let me tell you. I'm clearly getting the idea that you do not want to answer. Why do you agree with President Trump that you do not care about Americans' financial situations?

S

Scott Bessent1:42:01

President Trump does care about Americans' financial situations.

U

Unknown1:42:04

Well, he actually said that he doesn't.

S

Scott Bessent1:42:06

No, that is a truncated thing. He is future-proofing because I can tell you Americans' financial situations would be devastated if Iran got a nuclear weapon and there was a permanent shutdown of the flow of energy out of the Middle East.

U

Unknown1:42:26

Well then let me ask you...

S

Scott Bessent1:42:28

I'm taking my time back. I will promise you that President Woodrow Wilson, who was president during World War I, that the Germans did not attack us, that he got into that...

U

Unknown1:42:41

You're not answering the question. So let me ask this: was your prediction that Americans would face only 50 days of temporary elevated prices wrong? You said that Americans would face only 50 days of temporary elevated prices. Was that wrong since actually, of course, we're at 100 days now? How much have gasoline prices come down from the peak?

S

Scott Bessent1:43:04

7%. Crude prices are down more than 20%. And gasoline prices follow crude prices.

U

Unknown1:43:10

Well, then reclaiming my time. Gas prices are up by 50% since Trump's war started and up nearly 30% from last year. Diesel and jet fuel prices have risen even faster because refining markets are strained. Utility costs have soared due to higher natural gas and fuel input costs. And that means commutes, home heating and electricity, airline tickets, and delivery fees are all more expensive. And how about grocery prices? They jumped more in April than they did in nearly four years since when Biden was president. Beef is up by 15%. Tomatoes are up by 40%. Bread and milk are up 8% and 5% compared to 3 months ago. And it's those lower-income households that are hardest hit by Trump inflation. They're forced to cut back on spending. I know it's an inconvenient... excuse me, it's my time. Inconvenient fact, but I know that it'd be hard for a billionaire like you to imagine how these lower-income households would be hit by inflation. In fact, Trump said he couldn't care less about higher car prices for Americans. Do you agree with that statement?

S

Scott Bessent1:44:25

I believe that food prices are up 2.5% since President Trump took office. I know that's an inconvenient fact for you. You're from California. Maybe you care about avocado prices. Maybe you want them higher, but they're down 19%.

U

Unknown1:44:39

Well, all you have to do is to go to the grocery store to see that beef is up by... tomatoes are up by 40%. Bread and milk are up by 8%.

S

Scott Bessent1:44:50

You don't get to pick and choose. It is a basket. The basket is up 2.5%. During the Biden era, it was up 5%.

U

Unknown1:44:56

Well, you paint such a rosy picture, but I think Americans are not experiencing this rosy picture that you paint. They are asking, 'Are my wages keeping up with costs? Can I afford the things that my family needs?' And I'm afraid the answer is no.

S

Scott Bessent1:45:11

I'm afraid you're incorrect because we had real wage increases every month since President Trump took office except for the month of April. So, I know the facts don't align with your narrative, but please, you're entitled to your opinion.

U

Unknown1:45:24

Your narrative is not lining up with what Americans are experiencing right now.

S

Scott Bessent1:45:28

You're entitled to your opinion, not your own facts.

U

Unknown1:45:32

I yield back.

Mr. Hearn.

Mr. Secretary, it's good to see you. Thanks for being here.

S

Scott Bessent1:45:37

Great to be here.

U

Unknown1:45:38

And I can see you're talking a lot about the facts. The facts are that during the four years of Joe Biden, we had a 25% increase in prices. No way did the wages keep up during that time. The highest gas prices we've seen in the last decade were under Joe Biden. But my colleagues have gotten amnesia. But almost a year ago, President Trump signed the working family tax cuts into law and prevented the largest tax increase in American history. And I want to thank you, Mr. Secretary, for your hard work and for your partnership in getting that across the finish line. A huge part of the working family tax cuts was making permanent many provisions of the 2017 TCJA, including eliminating the lockout effect, encouraging companies to bring intellectual property and profits back to the United States, lower rates for all Americans, the pass-through small business deduction, and immediate expensing provisions, all of which have been proven to drive tremendous growth and job creation. Prior to last year, the lack of permanency in these policies hindered economic growth and job creation. But thanks to the working family tax cut, businesses now have the certainty they need to plan, grow, invest, and create jobs here in America. I now want to shift focus to the expensing of factories, which is a new pro-growth tax policy in the working family tax cuts. After the passage of TCJA, bonus depreciation allowed businesses to deduct the full cost of equipment and machinery immediately. But the factory building that housed the machinery had to be depreciated over a much longer 39-year schedule. This created a major gap in US tax policy. Manufacturers could quickly recover the cost of machines, but the cost recovery for the enormous capital investments in the physical factories lagged far behind. Last year's tax law extended accelerated expensing treatment to the structures of new domestic production facilities, allowing manufacturers to quickly recover the cost of the building and in turn make it significantly more attractive for companies to invest in expanding US manufacturing capacity. And in fact, they have. We see that, we hear about it, we read about it. Those are the facts. Following the passage of the working family tax cuts, 52% of manufacturers surveyed said they intended to use the new provision to immediately expense the cost of the construction or expanding a manufacturing facility over the next four years. Mr. Secretary, my first question is: last year I asked you about the importance of this provision and you said that expensing for factories in a way puts us on a level playing field with countries that heavily subsidize their industries. And as you know, this provision expires at the end of '29. Do you believe this provision should be made permanent or extended to continue incentivizing the expansion of US manufacturing capacity and job creation? And then also in your response, could you also talk about what this does for your 333 plan and how that's part of the integration of that?

S

Scott Bessent1:48:26

I think we should extend or make it permanent. I was able to go and visit Winnebago in Minnesota and they told me that because of the expensing, they were on the fence on whether to do a battery project for their RVs in Florida to build a factory, but because of the full expensing of equipment, full expensing of structures, they were doing it. And I think we are seeing that again and again. But Congressman, what is very important here, and I don't think people really understand, we are creating productive capacity here and productive capacity is what generates future tax revenues. So you get the immediate hit to taxes now but then you create an accelerated stream of income that is much higher, a multiplier effect after that. I call it the slingshot effect. So for one or two years, I think we're going to see this burst of factories and manufacturers that were encumbered under the Biden administration and I think going forward we are going to see a breakout in corporate income tax receipts.

U

Unknown1:49:36

Mr. Secretary, I think what you're describing shows the ignorance of the critics of this policy because it's very easy to shut down a building or a facility but much more difficult to rebuild something and restaff it to move businesses back from abroad. So I applaud you. We're going to build it and they are going to come. And then one final question. I have significant concerns on third-party financing of litigation in the United States, particularly regarding the tax treatment of these profits derived from it. Currently these financiers are claiming capital gains treatment and it's highly questionable that unadjudicated claims of harm constitute capital assets. This activity is distorting our judicial system and turning our court system into a casino. And I'd really love for your team at the IRS to work with me and look into how we have this tax treatment of this practice. There are many people across the nation who are concerned about sovereign wealth funds and others that are gaming our system.

S

Scott Bessent1:50:36

Congressman, I look forward to working with you on that, especially international foreign money that is coming in and gumming up the works and sponsoring these lawsuits in our system and paying no taxes. So, I look forward to working with you on this.

U

Unknown1:50:55

Thank you very much. I yield back.

Mrs. Miller.

Thank you, Mr. Chairman. Secretary Bessent, thank you for being here today. I've found it a little disturbing the animosity and lack of decorum from some of the members of this committee. Common courtesy takes us a long, long way. I'm a lifelong small businesswoman and I want to emphasize the importance of working with business-minded leaders rather than career politicians who may not fully understand the real harm that bad policy inflicts on everyday Americans, especially back home in my state of West Virginia. The working families tax cuts provided much relief to our families, our farmers, and our small businesses across the country, and it fulfilled President Trump's promise of tax relief and certainty. One of my priorities has been saving the Gig Economy Taxpayer Act, which repealed the Biden administration's harmful 1099-K reporting threshold of $600 and restored it back to the proven standard of $20,000 and 200 transactions. Can you speak to how much of an effect that this policy had on the tax filings of our hardworking Americans?

S

Scott Bessent1:52:19

Well, I think that just speaks to the Democrats are not the party of Main Street. They're the... I don't know what they're the party of, but they have been bringing this down. I thought that it was one of the most reckless things that have been done, that you were going to create this paperwork for small businesses. Many of them have service businesses and to do this and the magnitude from 20,000 to 600, it just shows a complete lack of understanding of an administration that probably had a record low of business people involved with the administration and what they viewed as business experience. So I think realigning that for Main Street and small businesses was essential and we have seen no effect at the IRS in terms of the revenues from that.

U

Unknown1:53:10

That's right. If anything, it's better. In your testimony, you mentioned President Trump's signature new tax cuts and specifically the no tax on overtime provision which rewarded hourly workers by allowing them to deduct up to $12,500 or $25,000 for married couples. This pro-growth policy has helped expand domestic manufacturing in our country and helped hourly workers keep more of what they earn. Have you seen that the no tax on overtime policy benefit our tax filers this past tax season?

S

Scott Bessent1:53:49

Representative, I was with President Trump on April 15th in Las Vegas for a rally for tax day for his signature policies and he asked for a show of support from the crowd and we were at the home of the service and the tips income and actually the no tax on overtime got a bigger ovation than the no tax on tips. And it's the American way. We had 75% of the filers make under $100,000. 90% make under $200,000 and the average deduction was $3,100. And it's the American way. If you want to work harder, you get to keep more of your take-home pay. I was with a group of small business owners out in California near the Reagan Library, and they love it. I was in a local Italian restaurant there. The owner loves it because he was having staffing problems. So now he has experienced staff. He's happy to pay the overtime and the employees are happy to work the hours.

U

Unknown1:54:59

Very much so. Thank you so much. I yield back my time.

Thank you. Before I recognize the gentlelady from Alabama, I want to inform members that at the request of our witness, I intend to call a brief recess following Miss Sewell's questions. And I now recognize the gentlelady for 5 minutes.

Thank you, Mr. Chairman. Mr. Secretary, you promised the American people that the big beautiful bill would lead to a big economic boom for the American people. In a statement you made on July 3rd, 2025, after the passage of the so-called one big beautiful bill, you said that the legislation would unleash growth in the American economy. Republicans pledged that it would stimulate economic growth and lead to an additional $2.4 trillion in government revenue. However, the most recent GDP data shows that the economy barely grew in the last quarter of 2025 at a rate of only 0.5% and continues to fall below expectations in the first quarter of 2026. Time and time again, you told the American people not to believe their own eyes or what's in their bank accounts. While families have been hit with higher costs from Trump's illegal tariffs and his costly war of choice in Iran, this administration continues to insist that the economy is thriving. The reality, sir, especially for the folks that I represent in Alabama, is that you forecast a 5.4% growth in GDP for the fourth quarter 2025 and only delivered a 0.5% growth. The reality is that wages have fallen behind rising inflation and that job growth dramatically slowed down since Trump took office. Mr. Secretary, I'm asking you rhetorically the following questions. I ask you why was your analysis so wrong? And I'm asking you rhetorically since you've shown yourself not to be able to answer questions on this side. So, let me try to answer it. Could it be that Trump's illegal tariff or the cost of the war of choice in Iran were the reasons why your analysis was off? Whatever the reason, I want you to know that the people that I represent in Alabama are hurting under this economy. Prices in Alabama have fallen by 3.6% over last year. Energy prices are up 18% and exports of Alabama products and services have dropped by $3 billion since President Trump took office. In addition, the Iran war has cost American households over $100 billion. Grocery prices are rising faster than any times in the last four years and gas is over $4 a gallon in Alabama where last year it was only $3 a gallon. Mr. Secretary, your economy, this economy under this administration is failing the American people and we can and must do better. My second topic I'd like to discuss is what's going on... I haven't asked one single question. I will point out, Mr. Chairman, to reclaim my time. I'm not asking him a question. I'm stating facts.

S

Scott Bessent1:58:27

You're not stating facts. Stating opinion.

U

Unknown1:58:29

Mr. Secretary, black and brown Americans feel like they are under attack by this administration. President Trump has ordered state legislators across the country to redraw maps to dilute black political representation. Moreover, Trump has weaponized the DOJ to go after groups like the Southern Poverty Law Center because of the work that they've done to expose white supremacy groups that are often supporters of President Trump. I am asking you, sir, that if the IRS plays a role in these cases, I ask that you ensure that the IRS is not improperly influenced by the president or this administration during the duration of that case. And I trust that you will make sure that that does happen. Lastly, Representative Davis and I sent several letters to the IRS, and I think that Representative Davis, during his questioning of you, asked you about it. This most recent tax season was the first time that the president signed an executive order in September of last year that ceased paper refund checks from being issued. This decision to upend paper checks has led to a significant delay in refunds for those taxpayers. And I understand in your response to Mr. Davis, you said that 95% of those that receive their refunds get them electronically. Well, I represent the 5% that do not have access to electronic repayment. Those folks need paper checks and they need their refunds now. I trust that this administration will do all that it can to make sure that all Americans, irrespective of whether they're unbanked or have access to electronic payment, that they get their refunds. And Mr. Davis asked a question that you didn't answer, but I'd like to answer it for you. We're asking that you and your office at the Treasury Department work with us to make sure that our constituents get their refund checks.

S

Scott Bessent2:00:26

I will commit to do that.

U

Unknown2:00:27

Thank you, sir. I yield back the balance of my time.

S

Scott Bessent2:00:29

The first I've seen, and to be clear, that number 5.4% was the Atlanta Fed GDP Nowcast, but I know that's inconvenient.

U

Unknown2:00:40

Thanks. As announced, the committee will stand in a five-minute brief recess.

Call the hearing back to order. I'd like to recognize Mr. Gustafson for five minutes.

Thank you, Mr. Chairman. Thank you, Mr. Secretary, for appearing today. I do want to thank you for your service and for your leadership in the working families tax cuts, the one big beautiful bill, which I think is one of the most significant pieces of legislation that we've produced in this institution in a long, long time. If I could, and I know that you've been asked earlier by Congressman Buchanan about section 199A, but I would like if I could go a little bit further with you on that. Obviously, we made permanent in the one big beautiful bill of the working families tax cuts act a provision that gave a 20% deduction for those small businesses. When we looked and were considering the policy, of course we had given a permanent deduction or rate for those C-corps at 21% rate but we were looking at parity as it relates to those small businesses. First, if I can ask you to give in your opinion the effect of the permanency for those small businesses and for the pass-throughs, and then secondly if I could ask your opinion about a bill that I've introduced, the Small Business Tax Cut Act, which would actually increase that deduction from 20% to 23%.

S

Scott Bessent1:52:20

Congressman, we are clearly the party of Main Street and nothing is more Main Street than putting small businesses on par with big business. And what we are seeing is the great certainty for many people in small businesses. Many of them mortgage their homes for these businesses. So it is the certainty that enables them to invest, to hire people, to plan for the future and I think we are going to see that. The other thing that we are doing at Treasury is we are trying to unleash our small banks because small and community banks are the lenders to these companies. So we believe that for many years regulation was not tailored and the small banks, it was too big to fail. Small banks became too small to succeed. So, I think the combination of the certainty and the Main Street lending, we're really going to see the flourishing.

U

Unknown2:20:16

Good. And would there be a benefit to small business to raising that deduction from 20% to 23%?

S

Scott Bessent2:20:23

We're happy, our Office of Tax Policy is happy to engage with you and your staff on that, sir.

U

Unknown2:20:27

Thank you very much. Mr. Secretary, as it relates to rates and yields, think about the bond market. And I was looking at some quotes from the Clinton era, specifically James Carville, if I could quote him. This is him talking about the bond market. He said, 'I used to think that if there was reincarnation, I wanted to come back as the president or the pope or a .400 baseball hitter, but now I'd like to come back as the bond market. You can intimidate everybody.' And then a second quote from President Clinton to your predecessor, Secretary Rubin. He said, 'You mean to tell me that the success of the economic program and my reelection hinges on the Federal Reserve and a bunch of blank bond traders.' Let me ask you if I can to give maybe some certainty or some clarity to those bond traders, those in the bond market and the relative state of our economy.

S

Scott Bessent2:21:40

The state of our economy is strong. We are having a short-term, a level increase in price levels. We will get to the other side of those and I defy this side of the aisle to tell me what is wrong with our economy. We've had 2.6% GDP growth per quarter average since President Trump came in and that's despite the Democratic shutdown in the fourth quarter and this conflict that we're going through. So I'm very optimistic on the other side and my view, and we are going to push this at the G20 this year, and we have the leadership that the biggest threat to financial stability is a lack of growth and I believe that we can grow well in excess of 3% given the deregulation and great tax policy. So, Congressman, back to your initial question, it's all about certainty. So we have permanence. If you want to come, if you're an American or a foreigner, come to the US, build your business. You have tax certainty, you have energy certainty, you have regulatory certainty, and that all flows back into the Treasury. And what comes into the Treasury is stability. We had a fiscal contraction for 2025. And everything we are doing now is creating more productive capacity. It will be tax revenues down the road.

U

Unknown2:23:08

Thank you, Mr. Secretary. I'll yield back.

Thank you. Now, I'd like to recognize Representative Steube for five minutes.

Thank you, Mr. Chairman. Mr. Secretary, thank you for being here. Families in Florida are still focused on affordability. Groceries, housing, cars, child care, and day-to-day bills. Treasury's new analysis shows the working families tax cuts are delivering relief through policies like no tax on tips, no tax on overtime, the enhanced senior deduction, which is huge in my district, and the expanded child tax credit, and no tax on car loan interest for American-made vehicles. Beyond the topline numbers, what tangible steps is Treasury taking to make sure these policies translate into more take-home pay, lower tax bills, and real breathing room for working families, seniors, and small businesses?

S

Scott Bessent2:23:59

Representative, what we did was we had about 98% last year of online filers and we made sure that they got their refunds within 21 days. So the other thing I've encouraged people, one of the reasons for big refunds is you haven't changed your withholding. So that if filers change their withholding, they get an automatic step up in their monthly take-home. And we are constantly refining all of these programs at Treasury and we're trying to educate people because I've been in restaurants and when I talked to the server I said how is no tax on tips going through? You said we didn't know about it. So I think a lot of it is education and I would expect that the take-up this coming year will be even bigger.

U

Unknown2:24:52

So I represent one of the most elderly districts in the nation. I have the most social security recipients of any district in the country. So what should seniors on fixed income feel from this law over the next year? The rebate that we did is just... I've had people at events come up to me and say how impactful that's been to their bottom dollar.

S

Scott Bessent2:25:12

Well, as you may have heard me say earlier, a few weeks ago I was at The Villages with the president and obviously a very warm welcome. The average deduction was $7,500. 68% of the filers make less than $100,000. 94% make less than $200,000. This is very important for people on a fixed budget.

U

Unknown2:25:33

Representative Peltola and I introduced the Taxpayer Protection and Preparer Proficiency Act to crack down on fraudulent and incompetent tax preparers, including ghost preparers who prepare returns for a fee but refuse to sign the return or include a valid PTIN. For a taxpayer who did everything they thought was right, it can be devastating to later find out that their preparer inflated deductions, claimed credits that they did not qualify for, or disappeared after the filing. From Treasury's perspective, how serious and pervasive is the ghost preparer problem? And what additional tools would help Treasury and the IRS hold bad actors accountable while protecting honest taxpayers?

S

Scott Bessent2:26:09

So, we are working on that with the constituents and this is a real problem, especially as you described for our seniors. More than one-third of our seniors have been victims of some kind of fraud and what we don't need is some kind of tax fraud here. So we have pushed out to the preparers to make sure that everyone understands what should be done and we are happy to work with your office on that. Especially for seniors who are subject to fraud.

U

Unknown2:26:46

For many working families, a tax refund isn't just a number on a return. It's money for rent, car repairs, groceries, medical bills, or paying down debt. At the same time, Treasury has to prevent improper payments and fraud. How is Treasury utilizing modernization efforts to get refunds out quickly while balancing the need to protect taxpayers and the Treasury from fraud?

S

Scott Bessent2:27:06

Well, last year approximately 98% of taxpayers filed an electronic return and we were able to, if everything was in good order, we were able to get that return sent electronically within 21 days. The other thing we are doing that is very important, we now have the means to say we don't think your return is correct and this will likely trigger an audit. Do you want to have another shot at this? And that is very helpful in terms of down the road in terms of the number of audit cases and for taxpayers who they or their preparer may have made an honest mistake.

U

Unknown2:27:53

In the 20 seconds I have left, is there anything that you haven't had an opportunity to address from the lies from the Democrat's side that you'd like to address in this time?

S

Scott Bessent2:28:02

Again, we've got a temporary inflation spike. Groceries, as the Democrats or many people like to say, it's up 2.5% since the president came to office. We work on this every day. The underlying economy is very strong. The jobs numbers, they are good. Construction jobs are up. And what I want to say, Congressman, is these are private sector jobs. Private sector jobs. We could have started any government program and put a million more jobs on the board, but it's private sector jobs that enables Americans to have real wage increases and every month except for April, Americans saw real wage increases.

U

Unknown2:28:47

That's a great point. Thanks for being here.

Gentleman's time is expired. Recognize Miss Moore for five minutes.

Thank you so much, Mr. Chairman, and thank you, Mr. Secretary, for appearing and thank you for your patience and indulgence for this very long hearing. I just don't want to get into a big fight with you, sir, but I would have to agree with one of my colleagues who spoke earlier. These are some Dickensian times. And for some people, these are the best of times. And we have heard you reiterate over again about how strong the economy is, how this inflation is very short term, how job growth to you looks promising. Good thing the jobs report comes out tomorrow instead of today.

S

Scott Bessent2:29:50

Representative, I wish it had come out today because I don't have any prior knowledge so I don't want to market.

U

Unknown2:29:55

Okay. So I guess when our colleagues like to attribute the president's confidence that he shouldn't worry about the financial stability or the financial ability of Americans, and your notion is just sort of a little blip, this inflation that people should not be taken seriously. I guess we would have to say that you agree with the president that our economy is strong and that we shouldn't worry about people's situations. Is that the conclusion I can reach?

S

Scott Bessent2:30:32

No, my conclusion is that they understand that things are challenging now because of this conflict and we will get to the other side of this but the underlying economy is quite resilient.

U

Unknown2:30:46

Okay. Well, good. Well, we've heard this before. And it's the worst of times because 76% of Americans are feeling the 40% increase in utility costs. You mentioned groceries. And I guess it just depends on what kind of basket of food you choose. You better not choose something like beef or something. If you're getting some of the ramen noodles or something, I guess that won't affect you as much. But these are the worst of times for a lot of people. Excuse me. And what we have found, and I'd like to place in the record an article I found without objection, which really indicates, and maybe it's no fault of this president, but in fact wages are growing at a much slower rate than inflation. And if we look at data going back to even the beginning of this century, we'll see that inflation has really eaten up about all of the economic benefit people have. And people are experiencing that. When your utility bill goes up 40%. We've already paid, what is it, just since this war, this blip, people have paid $43 billion more in gasoline costs. And people are feeling some pressure from that. I want to just change the subject, Mr. Secretary, and talk a little bit about the tax credit for the private school fund. And this is a program where a taxpayer can get a 100% tax credit for providing monies to the... what do you call these organizations... the school granting organizations. Can you... what other tax credit do we have where people don't have any skin in the game? They get a 100% tax credit for their participation. I just want to be reminded of it because I don't know.

S

Scott Bessent2:33:04

Again, I don't know why you think there's no skin in the game because this can go to students in public schools for tutoring. It can go to handicapped students.

U

Unknown2:33:10

Well, you know, I guess kids in public school don't pay tuition. And so I don't know how...

S

Scott Bessent2:33:18

If you wanted to hire a tutor for your child that you could do that.

U

Unknown2:33:22

But I guess I'm talking about the taxpayer, sir. So I'm talking about me as a taxpayer. If I want to provide money to a school and say it's a school... let me get to the point. What if I want to donate my money to a school that doesn't follow any of the civil rights protections? You know, I don't want to admit LGBTQ students. I don't want to admit black students. And I'm going to get a dollar-for-dollar tax credit for that. What other tax credit program do we have that's similar to that?

S

Scott Bessent2:33:59

Almost nothing.

U

Unknown2:34:02

Nothing. And...

S

Scott Bessent2:34:04

And many of these are for religious schools. Ma'am...

U

Unknown2:34:07

Exactly. And so this is sort of an inequity we're building into the system. My time is expired, but I just want the record to reflect that this is an inequity where we're circumventing the state's right...

S

Scott Bessent2:34:25

Well, will you indulge me? I couldn't disagree more.

U

Unknown2:34:29

Okay. I have a unanimous consent request to put these materials in the record, Mr. Chairman.

Without objection. I'd now like to recognize Mr. Fitzpatrick for five minutes.

Thank you, Secretary Bessent, for being here today. We appreciate it. Sir, since the beginning of Russia's war with Ukraine, many of us have worked to make it unmistakably clear that Russia's illegal campaign of aggression will not be normalized nor rewarded. And that is why several of us have continued to advocate for sanctions that will put economic pressure on Russia and ensure that any peace agreement is durable, is real, and is agreed to by the government of Ukraine. Last year, a large bipartisan group introduced something called the Peace Through Strength Against Russia Act, comprehensive legislation that mandates sanctions on Russian officials and entities supporting Russia's defense, energy and transportation sectors. This bill would close loopholes fueling Russia's war economy, targeting Russia's energy leverage and impose sanctions for war crimes including the kidnapping and wrongful deportation of Ukrainian children. It establishes a 500% tariff on all imports from Russia to the United States as well as on products from any nation which continues to enable this war through the purchase of Russian-origin oil and natural gas. This committee and this Congress, I believe, have an obligation to provide the administration with the tools necessary to deliver lasting peace through strength. On May 18th, the Treasury announced a further 30-day extension of sanctions waivers, permitting the purchase of Russian seaborne oil, citing the need to support energy-vulnerable countries affected by the supply chain disruptions in the Gulf oil markets. While it was intended to address energy shortages, the waiver has the potential to enable continued Russian oil exports that generate revenue for the Kremlin, revenue that could be used to sustain Russia's ongoing war effort. So, Mr. Secretary, again, thank you for being here today. Just on that point, what safeguards are in place to prevent the Kremlin from using this extension to fund its war against Ukraine? Can you expand on the rationale for this waiver and potential for there to be financial benefit to Russia in this war effort? And then lastly, is the Department of the Treasury prepared to implement meaningful sanctions against Russia such as those described in the legislation I just referenced?

S

Scott Bessent2:37:19

You have to step back and think, are you willing to put a 500% tariff on China? Because all I've heard, especially from the other side but many on our side, were how tariffs are inflationary. I don't believe they are but a 500% tariff is an embargo. So I am the highest-ranking US official in this administration to have visited Ukraine. So do not mistake my skepticism for this for a lack of support for Ukraine. And let's go back and look at the sanctions regime. The Biden administration was weak, weak, and weaker on Russia's sanctions. There were exemptions. If I were to score 0 to 10, the sanctions level was 3%. And then probably the worst national security adviser in history, Jake Sullivan, on his way out the door in January of 2025 raised what I would call the sanctions level from a three to a six. So the Trump administration could adhere to those sanctions. And we have, in October of 2025, President Trump asked me how could he really turn the heat up on the Russian Federation. And I said, 'You could do what no one else has done. Sanction Lukoil and Rosneft.' And that has been done. So make no mistake, Congressman, that this administration has been tougher than any country in the world on the Russian Federation. And the Europeans, I believe that they are on their 20th sanctions package now, which they're very proud of. But I believe that means their other 19 have failed.

U

Unknown2:39:09

So just to follow up, Mr. Secretary, do you believe that the... and this is an open-ended question, it's why we're having this conversation, do you believe that the current sanctions structure is sufficient? Do you think any changes need to be made to that? And if you could address the issue of the waiver as well.

S

Scott Bessent2:39:26

Well, with the waiver, the waiver has done two things. It has kept overall global energy prices lower and the other thing it has done, during World Bank IMF week, many of the most vulnerable countries asked me to continue the waiver. Not intended to... and my strong inclination is that if there are further waivers that they will be country-specific and not generalized. And the Russian Federation has seen very little incremental revenue because of the waivers. Their oil was always going to China and now the oil can go to our allies.

U

Unknown2:40:10

Gentleman's time is expired. I'd like to recognize Miss Tenney for five minutes.

Thank you so much, Secretary Bessent, for being here. And while we're on the energy topic, I do come from New York where we've banned natural gas drilling and we're talking about affordability. We still haven't hit the peak gasoline prices in my state that we've had under the Biden administration and we weren't dealing with a conflict in the Middle East. We didn't deal with the Democratic shutdown of our Department of Homeland Security last fall. We also didn't kill the Keystone pipeline, banned all new oil and gas leases, and also restricted leasing on 13 million acres of land in Alaska. And the Biden administration was only able to bring prices down by releasing 50 million gallons in November of 2021, another 180 million gallons a million per day in March of 2022, and that was the only reason our gas prices came down. So, as a New Yorker who's very sensitive about energy prices and really bad energy policy that's driving up the costs in our state, and you can look, I think if you looked at some of the stats you've put out, if you just took out New York and California for example, the prices would probably be substantially lower on average and actually your numbers would look even better. So, I just want to say thank you for recognizing some of those things that I think my colleagues on the other side haven't seen. But I do want to give you...

S

Scott Bessent2:41:30

And Congresswoman, you know, I would say that no one likes paying higher electricity prices, but that is a state issue and it is really a red state-blue state issue because blue states have not built new capacity and red states have. So it is a regulatory morass that we see unfortunately in great states like New York and what the people are subjected to.

U

Unknown2:41:55

Absolutely. It's a transmission issue and a pipeline issue and an access issue and lack of common sense. But let's talk about the positive things because we want to talk about the HR1 and your help in getting that across the finish line. Obviously, it was a monumental piece of legislation building on 2017 tax cuts that I actually was in Congress for and voted for and we are grateful to you and your department for making that happen. I also want to make sure and recognize you talked about some permanency today and I want to make sure that we recognize one of the signature pieces of legislation that I co-authored actually with my colleague Representative Sewell, and it's making the New Markets Tax Credit permanent as part of HR1 and that was something we fought hard for and it was very bipartisan. In my district alone in upstate New York, which is way up in the rural areas, New York 24 stretches from the St. Lawrence Seaway all the way to the Niagara River. The New Markets Credit has delivered over $38 million in total project financing supported by over 350 full-time jobs and has brought real investment to communities in our region that Washington often forgets and we appreciate you for that. And the permanency also really helps our rural communities especially low-income neighborhoods and oddly enough very similar communities that Miss Sewell has in Alabama. So we want to thank you for that. And also want to just thank President Trump. The infrastructure has been significant. You talked about permanency and why that's going to be good for our communities. I do want to ask you a little bit if we could just get into when it comes to the implementation of New Markets, the Community Development Finance program and that fund. Can you just give us an update on that and where we are going to be with that in the future in terms of the CDFI?

S

Scott Bessent2:43:46

Yep. So, the administration, the funding for fiscal year 2025, and we had to restore accountability. Over the last year, my team has reviewed priorities and we are getting CDFIs back to their core business. It's not going to be financial engineering. It's not going to be wasting taxpayer dollars and we think that they are important when used properly. One of the biggest financial frauds of last year, Trickle, was the CDFI.

U

Unknown2:44:20

So are we going to see... when are we going to see a timeline on that for our applicants? We know that. Do we have a... is that coming out of Treasury?

S

Scott Bessent2:44:28

I'll have my staff get back to yours tomorrow.

U

Unknown2:44:30

That'd be great. We appreciate it. I hope you run for president. Thank you.

Thank you. And now recognize Mr. Boyle for five minutes.

Thank you. Mr. Secretary, a few days ago, the White House director of the National Economic Council, Kevin Hassett, said, and I quote, 'People are spending more on gas, but they're also spending more on everything else, not just groceries, but restaurants and so on. I think that's a sign you see when people are optimistic about the future.' I was wondering if you agree with your White House colleague that people spending more on everything else is just a sign of great optimism.

S

Scott Bessent2:45:18

I think high discretionary spending is probably what Director Hassett meant.

U

Unknown2:45:24

And you consider spending on groceries discretionary?

S

Scott Bessent2:45:28

Yeah, I again...

U

Unknown2:45:29

Were gas discretionary?

S

Scott Bessent2:45:31

I didn't say gas. Did he say gas?

U

Unknown2:45:34

Yes, that's correct. I'll read the quote again. 'People are spending more on gas, but they're also spending more on everything else, not just groceries, restaurants, and so on. That's optimism.'

S

Scott Bessent2:45:46

So, the everything else would be discretionary spending, Congressman.

U

Unknown2:45:50

Well, I'll tell you what. I can settle how the American people are feeling about this economy because I have the data on it right here from Fox News just the other week on the president and this administration's handling of the economy. 71% of the American people disapprove, including 40% of Republicans. On the president's handling of inflation, 72% disapprove. They disapprove in fact by a three-to-one margin over approval. So do you agree with the American people or are they just wrong?

S

Scott Bessent2:46:31

Look, the American people were torched under the Biden administration.

U

Unknown2:46:36

Oh my goodness. I wish I had a dollar for every time you or someone on the Republican side brought up Biden's name. If I did, I might have as much money as you have. Mr. Secretary...

S

Scott Bessent2:46:44

You would have lost 22% of your purchasing power because that's what happened.

U

Unknown2:46:48

So the American people are wrong. The fact that by a three-to-one margin they disapprove of this president and your performance on the economy. They're wrong.

S

Scott Bessent2:46:56

The Democratic House has a 17% approval rating.

U

Unknown2:46:59

No, I understand why you don't want to answer the question. So, let me... I forgot to mention, reclaiming my time, I forgot to mention consumer sentiment is at an all-time low. So, the numbers on the approval rating of this president on the economy are the lowest since the Great Recession. But in terms of consumer sentiment, which actually does measure whether or not people are...

optimistic about their future, the lowest in the history of a poll that dates back to 1952.

R

Richard Neal2:47:26

Well, let's look at the underlying data. Two-thirds of those are Democrats.

S

Scott Bessent2:47:31

Two-thirds of those polls, so Fox News, The Economist, all the polls are wrong. You're citing the University of Michigan and

R

Richard Neal2:47:39

There have been other surveys as well, but the Michigan survey

S

Scott Bessent2:47:42

Who listen to this kind of twaddle, they vote in the single digits, teens, whatever. Republicans, they vote much higher. And that's

R

Richard Neal2:47:51

I don't even know what you're saying, Mr. Secretary.

S

Scott Bessent2:47:53

No, I don't think you know what you're saying. I know what I'm

R

Richard Neal2:47:55

I'm citing the facts. Those are the facts that you have a problem with, Mr. Secretary. Well, let me just turn since I only have two minutes left. Let me just turn to this. I think it's unquestioned fact that in the 2024 election, President Trump in my home state, the Commonwealth of Pennsylvania, and throughout the country, especially those seven big battleground states, he promised the American people, and I quote, 'I will lower costs on day one.' Well, Mr. Secretary, as it turns out, today is exactly day 500 of this administration, and costs aren't any lower. They are higher than ever before. Inflation is rising. Gas prices are surging. Consumer confidence again has collapsed. And health care costs are going up thanks to the bill that you helped pass over a year ago. Why won't you just admit that this has been a failed presidency? Because the first step to turning this around would be admitting the problem.

S

Scott Bessent2:48:55

The 2.6% GDP growth, exceptional job growth in the private sector, that's the average since President Trump came into office. Real wage increases every month except for April. So if

R

Richard Neal2:49:08

Once again inflation is eating away at the pocketbooks of the American people. I can tell you this, in the 30 seconds I have left. When I was back home in Northeast Philly a couple days ago and at a gas station, people were paying over $4.50 a gallon. They were feeling a lot of things, a lot of emotions. I guarantee you optimism wasn't one of them. With that, I yield back.

U

Unknown2:49:33

Thank you very much.

Thank you.

Thank you. And I'll recognize Mr. Murphy for five minutes.

You know, memory is a wonderful thing to study how we

I think George Orwell called it memory holing.

Yeah. So, it's really, it's hilarious, I think, actually sad and pathetic on another hand. That people don't remember, you know, I'm sorry that people get triggered when they talk about the former president. But 21% cumulative inflation during four years, which I think maybe you're smarter than I am in this regard, contributes a lot to what's going on. Now that said, I think it's actually pathetic that the other side of this dais places more concern about talking about gas prices. They didn't talk about gas prices during the last administration when they were higher actually than they were now. But they place more concern about that than the fact that their children and grandchildren might get irradiated by a nuclear weapon one day. And they were actually finally doing something about that.

S

Scott Bessent2:50:32

I couldn't agree more, Congressman. As someone with children who hopes to have grandchildren one day, President Trump is future-proofing this Iranian regime against having a nuclear weapon and the short-term challenges that we are seeing now. It would be nothing compared to that.

U

Unknown2:50:51

Yeah. And you know, I totally commiserate those especially lower income individuals where it's harder right now. Absolutely understand. But if we look back on one of the great historical lessons of Britain during the Battle of Britain and the things that they took on to save the fact that they didn't want to be destroyed by Nazi Germany, the same thing that we don't want to be destroyed by a radical Islamic regime which is in their constitution to do so. Then hardships sometimes are challenging.

S

Scott Bessent2:51:18

I think the best analogy here is World War I that Germany hadn't declared war on the US. We just knew that it was a menace, that it was a cancer that had to be stopped and we have cut the head off the snake. Everyone should remember the number of Americans who have died at the hands of the Iranians since 1979. They are the world's leading sponsor of state terrorism. Whether it's the USS Cole

U

Unknown2:51:47

Through their proxies, whether it was the barracks in Beirut and on and on. And yeah, we had a vote yesterday basically that was applauded. Not so much, maybe it was anti-Trump because everything's anti-Trump these days, but it was more pro-Iranian in so many different regards. Nothing against the Iranian people, but the Islamic regime wants to kill Americans and has done so, as you point out, since 1979. Let me just pivot just a little bit here because I would love to have your thought about this. I hear time and time and time again from the other side that the rich are not paying their fair share. Can you tell me, did the working families tax cuts, was it something just for the rich?

S

Scott Bessent2:52:26

Those are under TCJA that the highest income brackets paid 10% higher. And you know, I can see that for especially for the president's signature policy, 99% of the filers on no tax on tips make less than $200,000. No tax on overtime, 96% of the filers, 75% make less than $100,000.

U

Unknown2:52:52

So I've asked them repeatedly, repeatedly, tell me what that percentage is. What is the fair share? The fact that the top 1% donate one-third of all the donations in this country. Yeah. Maybe they should do more. I don't have any issue with that. But that's a voluntary thing. And you've read the book Atlas Shrugged, right?

S

Scott Bessent2:53:18

Yes, sir.

U

Unknown2:53:18

Don't you think we're seeing a lot of lessons from that today?

S

Scott Bessent2:53:21

I think we're seeing more lessons from 1984.

U

Unknown2:53:25

Well, yes, indeed. Indeed. Let me pivot just a little bit to a challenging topic and that's our debt and the fact that I think we've had pro-growth policies put forth in our tax bill which may not be readily apparent right now. Right. So I wonder if you could just give me what you think our projections are going to be, debt to GDP, what's going to happen in the next 5 to 10 years with all the investment that's going to be coming in.

S

Scott Bessent2:53:51

Well, as I said earlier, Congressman, that we are creating highly productive assets that will be generating the high returns that will then go into the tax base. This manufacturing renaissance that we're seeing creates jobs in two ways. The companies will be paying more taxes. They've availed themselves as we wanted them to of the 100% full expensing on equipment for factories, for farm structures, and that will go into the tax base. I call the slingshot effect. Pull it back and then it starts paying off.

U

Unknown2:54:29

Yeah. It's like a slinky. You know, if, God forbid, there was a Democrat that got into the next White House, they're going to come in and claim all the wonderful benefits that we're going to see at that point in time, just kind of like the Biden administration talked about all the job creation after they destroyed all the jobs and then just restored them. So, thank you for the work that you do. You are doing the good Lord's work in a very, very challenging environment. You're deeply appreciated. Thank you. I'll yield back.

S

Scott Bessent2:54:54

Thank you, sir.

U

Unknown2:54:54

Thank you, Miss Fishbach.

Thank you, Mr. Chair, and Secretary. I want to say thank you for being here. Because it's always good to see you and I genuinely appreciate the information that you have and when we have the opportunity to have the discussion and be able to ask questions, but I really am sorry that the other side chooses not to acknowledge any of the good that's come out of this bill. And that's simply because this committee, the Republicans, Chairman Smith and President Trump are the ones that did it. So, they refuse to see any of the good. And I'm sorry about that because I think that they're missing a lot.

S

Scott Bessent2:55:34

Look, I'd be worried because all these tax returns that we got that had one of the president's signature policies, they all voted against them. They all voted for the biggest tax hike. They all voted against increasing the child tax credit. They voted to cut it in half. And I feel like they did it simply because President Trump supported it. And so, I feel sorry and I am sorry about the fact that they believe that being rude is the way to have any kind of discussion and that the only thing that they're seeking is social media clicks. And so I apologize for that because I not only respect your position but also the information you're able to provide. And I think it's important that we have civil discussions as opposed to this kind of yelling at people and not letting them speak.

U

Unknown2:56:26

So I apologize for that. But I just wanted to ask a little bit. My district is very rural, very family oriented and so I wanted you to maybe talk a little bit about particularly those families that benefit from what we've done in the bill, you know, the pro-family provisions and maybe a little bit about that so that people can understand better what we really did for those families.

S

Scott Bessent2:56:54

Well, first of all, permanence is very important. We increased the child tax credit from $2,000 to $2,200. That is permanent and we've done, and that per child, 40 million families have claimed this benefit. And with everything here, you know, as someone who has studied the history of economics, we would have had a cataclysmic event if we'd had a $5 trillion tax hike.

U

Unknown2:57:30

Absolutely. Absolutely. And I think it's incredibly important, like I said, to not only to all of the families and I, like I said, represent a rural area with lots of families and so I think it's incredibly important that we do provide those kinds of tax breaks for those folks. And what would have happened had we not been able to do that is incredible.

S

Scott Bessent2:57:50

And I think we have a barbell here, the representative, that we have on one side, it's the expensing of business equipment, can be farm equipment, structures, and then on the other side the president's four signature policies.

U

Unknown2:58:04

And you anticipated I think some of where I was going to go with that, but I also did want to, with a little bit of time I've got left, talk a little bit about the small businesses because our communities depend so much on those small businesses and I think that 199A has been discussed earlier but I think that if you have anything else to say on how just critical these tax cuts are to those small businesses because I will tell you those small businesses are absolutely the backbone of my district. And so is there anything else you want to add on that?

S

Scott Bessent2:58:40

Well, Representative, the Wall Street Journal accused me of being a populist, a firebrand, because I said it's time for Main Street to do well, which I pointed out to them. That's why it's called the Wall Street Journal, not the Main Street Journal. And this is a Main Street administration. I came from a small town and Wall Street always does well. And everything with 199A, we make sure that Main Street small businesses, as I said earlier, many people put their life savings into these businesses and they are the backbone of many of our communities. We've tried to make sure that they have proper lending but importantly when you're going to take on that kind of financial risk for yourself, your family, you want to have certainty and I think we've given them great certainty and I think permanence in these tax cuts, we will never have to call for tax cuts again because they are permanent.

U

Unknown2:59:30

Well, and with my remaining couple of seconds, I know that you were invited to Pennsylvania, but I'd like to invite you to Minnesota anytime and so that you would get outside of the metro area and into the rural areas where these permanent tax cuts have really, really had an effect. So, I thank you for being here and Mr. Chair, I yield back.

Thank you. Mr. Secretary, there's no need to read that paper. Anyhow, I would just point that out. Mr. Beyer.

Thank you, Mr. Chairman, ranking member. Mr. Secretary, thank you for being here and I have no intention of trying to find something for social media. I share your concern. I'd love to see faster economic growth in America. 3% would be amazing. It would help us begin to unwind the huge deficit that we have right now. What I am much more concerned about is not all the individual statistics. You know, my college statistics textbook was lies, damn lies, and statistics. We can all pick out the ones that we like and the ones we don't like. I'm much more concerned about on a more macro level that on at least five things, like you, I've studied economic history a great deal, that the administration is moving in ways that seem contrary to everything that I've learned about economic growth. Number one, of course, is the tariffs. Tariffs have rarely been a good and we've seen study after study that shown that 96% of the tariff revenue so far has been paid for by American consumers and American businesses. Also has not led to a reshoring of manufacturing. Second is workforce. We know the two drivers of economic growth are workforce participation and technology productivity improvements. With the immigration enforcement, no one here objects to deporting criminals. But we've imprisoned or deported hundreds of thousands of hardworking people paying American taxes with American families that have now, according to the businesses I talked to, the builders can't build, the farmers can't farm, our fast food places are all done. All those workers that are necessary are gone. Number three, the war of choice. You know, it hasn't achieved regime change. It didn't bring democracy to Iran. They still have the missile capabilities which we are seeing every day and they still have the nuclear stuff and I see a Trump administration scrambling to recreate the Joint Comprehensive Plan of Action that he walked away from that actually had nuclear weapons 20 years away in Iran. And we'll be lucky if we can get back to that again. And then there's the disinvestment in research. You know, 20% cuts to almost all university research. National Science Foundation down 55%. The science departments that know and EPA eliminated, cuts to NIH and CDC and what we're seeing is the young scientists in America fleeing to Germany and to France and to England places that they want them. You know, this is back to where does our growth come from. And then I think maybe the most damning thing, half of the growth last year, which by the way according to the Federal Reserve was 2.1% not 2.6%, was a 1.6% according to the Federal Reserve in the first quarter of this year. Those are not anything like the 2.8% that we had in 2024. But that half of the GDP growth last year of that 2.1% came from data centers alone. Okay, there are 831 data centers right now under construction. You know, I live in an area that has half, two-thirds, three-quarters of the data centers in America. You know, I am a big AI optimist, but I promise you so many of the people that I talk to are hating the data centers because of the impact on water, the sound, the particulate matter, the electricity costs, and ultimately the fears about what all that AI may do to their privacy and their concern. So, you know, I want you to be successful because I'm an American and I love my country and I want to have 3% growth. I just worry that so many of those decisions that you have made, the president made, are moving us in the wrong direction. And with that, rather than getting into an argument about you, I know your responses. Let me move to something that I think has not been touched upon today.

S

Scott Bessent3:03:46

Say in a courtroom, ask and answered.

U

Unknown3:03:49

Oh yeah, maybe the president announced that he was appointed, you had plenty of chance today. They appointed a businessman and current head of the Federal Housing Finance Authority with zero background in intelligence gathering and national security to be the acting DNI. Of course, I speak for many of us. We think that Mr. Peltz is wildly unqualified for this job and also misused his limited authority as head of the Federal Housing Finance Association to manufacture bogus mortgage fraud cases against the president's enemies. But I know that you've had some interaction with him before. I think you said to the finance committee yesterday that you told him you were going to kick his rear end, but rather than going through an intensive search and vetting process. We look at you who had to go through all that who had to be vetted, voted in by the US Senate. Doesn't it bother you as a Senate confirmed, deeply vetted cabinet official that you're going to be asked to serve with a character like Bill Peltz?

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Scott Bessent3:04:48

I think the president has chosen a great cabinet. I think he continues to and I think that it's a false assumption when you look at highly credentialized people. If I look, no one had more credentials than Jake Sullivan. And as I just said, I think he was the worst national security adviser of all time. He oversaw the Afghan pullout. Do you think the Afghan pullout was done in a good way? 13 people died at the Kabul airport. He wrote a piece in Foreign Affairs magazine that they had to be redone online. I've still got the hard copy where he said everything's fine in the Middle East and then we got October 7th. So, I don't believe in credentials. I've actually made a lot of my money over the years betting against the status quo. And I think President Trump, you wouldn't have thought that a real estate developer could come down an escalator and become president twice. It had never been done before.

U

Unknown3:05:40

I would point out that the Afghan withdrawal was done on Trump's timeline after it was negotiated at Camp David with Mike Pompeo. All right, Mr. Moore.

Thank you, Chairman. This is a very important hearing and particularly, Mr. Secretary, for being here. I want to commend the work that you and your staff have done over the last 11 months to implement the working families tax cuts. As a father of four and a representative from the youngest state in the country, I'm proud of the fact that we focus so much on supporting families and the next generation through an increased child tax credit, refundability of the adoption tax credit, and of course, the creation of Trump accounts. Mr. Secretary, Treasury has indicated that over 5.5 million Trump accounts have been opened. 5.5 million with 86% of them linked to families making less than $200,000. Can you speak to what this investment in lower and middle income Americans and children will do for their future?

S

Scott Bessent3:06:44

Good. Congressman Moore, thank you for your leadership on this. I think that this is one of the most important benefits for young people maybe since the GI Bill. 38% of American households have no exposure to our great financial markets. They believe that they are on the outside looking in. I grew up in a rural place in South Carolina. I only knew that something bad had happened to Wall Street in 1929. And I have pushed and pushed for financial literacy. And I think this is going to do two things. We're creating a generation of shareholders that when the program goes live, and we're at 6 million as of this morning, when we go live, July 4th is a Saturday, we'll go live on July 6th, that all those families will be able to look at the app and know that they have a share in our great economy, in our great markets. And we have created at Treasury, we've created learning modules, trumpaccounts.gov, and I think this is going to be the ultimate learning experience. And you know, on the back end of this, that when the children turn 18 they can take it out, they can use it for a down payment on a home, they can use it for education, they can roll it into a retirement account that they take out when they're 65. So I think that this, as a supplement to our current programs, is going to prove one of the most durable legacies.

U

Unknown3:08:13

You make a point that not enough people had access to it and I think you and I and many others understand that there was an opportunity to have access and it only requires a little to make a huge impact in your own life but getting started is insurmountable to a lot of people they think oh this isn't for us this isn't for me and what this does is it makes it so it is literally in front of every single, an opportunity for every single child in America to be able to have it there and have it part of it. The other aspect of it that I think is due some of the most, what I think has been the most incredible part that's come in the aftermath of passing it is I don't recall seeing really in my, maybe you got better examples, but over six billion dollars given to one specific initiative of philanthropic dollars from the Dell family and so many others that are involved. Can you help put this into perspective how significant and wide ranging private and philanthropic investment is into Trump accounts?

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Scott Bessent3:09:13

So, a lot of excellent points there, Congressman. First, there's this idea of food deserts that people weren't able to get or still aren't maybe able to get nutritious food because they're in a food desert. There have been financial service deserts that people, they don't have the minimums to open some kind of a non-bank account where they can get access. So I think that this is curing that. This is a free, low-cost, no-cost entry. If your child's born during President Trump's term, you get $1,000. But as you highlight, I think that this is a change in philanthropy. Foundations, great philanthropists like Michael and Susan Dell can donate directly to the children of America. No big foundation buildings, no annual galas, no speakers, straight to the children of America. And what Susan and Michael have done that they are giving to, they have excluded the top 20% of zip codes in America. They're going to give to every eligible child in those zip codes, it will be $250 per account. That's $6.25 billion. And we have more and more philanthropists who are coming on board all over the country. We have major corporations that are doing it for their employees who can adopt school districts, they can adopt zip codes, they could adopt states. I think we're going to see foundations and many state governments are getting on board. So we have created the delivery device and the holding tank for this and I think it's going to explode.

U

Unknown3:10:54

It's galvanized so much more than I think people even expected at the group that's been involved with this, Invest America, from the start getting it to where we are. It's been an absolute honor to be able to work with your team on this and look forward to some of the best opportunities. Like I said, I have four young boys under 13 years old. I was at their age when I learned the concept of a checkbook. They're going to be able to learn the concept of compound interest and how just a little bit now is going to affect them later. And I yield back. Thank you.

Miss Beth Van Duyne.

Thank you very much, Mr. Chairman, and thank you, Secretary, for joining us today. I think it's safe to say that you have probably worked as hard as anyone over the last 18 months and no one has done more for the American people than this administration and this Treasury Department. Mr. Secretary, when President Trump took office, what were the biggest economic challenges facing the administration?

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Scott Bessent3:11:42

Well, we inherited a mess. We had the worst inflation in 49 years and I think in many ways the worst for working people in our nation's history because someone was asking me about the inflation indices earlier, that's the average for working families, that it is thought that many of their goods and services inflated as much as 35% with an 18% wage gain. So the loss in purchasing power was tremendous. We were running the biggest deficit to GDP that we'd ever run. 6.7%, 6.9% when we were not at war, not in a recession, and we had to get that under control. And then everything that was happening to our American workers, you know, from the border being open and, you know, whether it was safety or jobs being taken.

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Unknown3:12:36

So since January of last year, what would you say the largest economic indicators have been showing the greatest improvement?

S

Scott Bessent3:12:42

I would say that every month except this past April, we've seen real wage increases. We've seen on average 2.6% GDP growth for the past four quarters. And the underlying resilience of the economy, we pulled down the fiscal deficit to GDP. We got it down to about 5.5%. So we had a fiscal contraction and still grew. And Representative, everything that we're creating, the jobs we're creating, they're in the private sector and they're for Americans.

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Unknown3:13:17

I appreciate you saying that because the previous administration often pointed to job growth as evidence of economic success, but much of that growth, as you just mentioned, came from the government hiring. So, can you explain the difference between an economy that is driven by government job creation versus that in the private sector?

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Scott Bessent3:13:35

Well, we see the productivity go up, but more importantly for the people who are getting those jobs, it's very difficult to create real wage increases. Traditionally, government jobs are indexed to the CPI. So you're just keeping up. With the private sector, people can move up and we are creating with the Tax Cuts and Jobs Act, we're having a building boom in manufacturing structures. And if someone who's economically illiterate said to me, well where are all these manufacturing jobs, well manufacturing jobs take time. I was up in my hometown of Charleston, South Carolina. Boeing is expanding their facility there by 50%, it's the Dreamliner production facility. So, first you get construction jobs. Then you get a thousand high-paying jobs in the Boeing factory. And we're seeing that again and again.

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Unknown3:14:33

Well, I think the goal of public policy shouldn't be to make government dependency more comfortable, right? But it should be to make economic independence more attainable. And so, would you agree that the most effective way to improve a family's financial situation is not through government assistance, but through higher wages and better job opportunities?

S

Scott Bessent3:14:50

100%. And the opportunity to start your own business. And that's what we're seeing too that in terms of Main Street coming back, that one of the things I spent my career in the financial sector and 45% of our small and community banks disappeared since the great financial crisis. Senator Warren likes to say we might have a bank failure. She killed 45% of the small banks.

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Unknown3:15:14

Yeah. I think the Trump administration is rightly focused on creating the conditions for private sector growth and for private sector hiring because every new private sector job represents an American who is less dependent on government and more empowered into their own future. And I think as Congress considers policies that encourage work and reduce dependency, I do believe that we have a responsibility to connect people with opportunity. So I'm going to ask you, what are you doing on August 6th?

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Scott Bessent3:15:39

I'm not even sure what I'm doing.

U

Unknown3:15:41

Let me tell you, for the fifth consecutive year, I am hosting what has become the nation's largest job fair. Last year, we had over 500 businesses that represented over 33,000 jobs, and we had about 35,000 people came last year to Globe Life Field, and we're going to do it again this year, August 6th. And we would love to have you there. I am formally inviting you right now to attend because if you want to know about economic policy, don't ask anybody in Washington. Ask the single mom who now has a job that pays the bills. Ask a vet who now finds a new career. Ask a worker who can get off government, federal assistance because he's got a job that has given him a new opportunity. These are the real scorecards that I think that we should be looking at.

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Scott Bessent3:16:26

Well, I was just in Texas a few weeks ago. I'm going to be there next week. And that is the land of opportunity.

U

Unknown3:16:34

I appreciate you saying that. I think the clearest measure of a successful domestic policy is whether Americans believe opportunity exists. And I think on August 6th, over 35,000 people are going to walk into Globe Life Field looking for not for government assistance, but looking for jobs. Over 500 businesses will be there because they need workers. And to me, that's the strongest real-world indicator that President Trump's economic agenda is working. And with that, I yield back.

Thank you, Mr. Evans.

Thank you, Mr. Chairman. Thank you for being here, Mr. Secretary. The Trump administration is failing at home and abroad. It is not smart investment for the future and certainly isn't delivering on the affordability agenda American people deserve. The president's policy has left Americans paying more in food and gas and health care and electricity. The electricity price is especially important to me because it's related to the growing concern around the cost of data centers and future investment in energy. Meanwhile, the Trump administration has said he does not care about the financial situation of Americans. He has called the gas price peanuts. While the GOP focuses on policies that make money for Trump and his allies, working families are paying the price. So I say to you, Mr. Secretary, obviously there's concerns that we all have about what is occurring. Though I know you may have a different view, I want to share with you the view that I'm having and living with and hearing my constituents talk about. So as a result, I yield back the balance of my time and thank the chairman and the ranking member for this opportunity of this hearing. Again, I thank you.

Thank you, Congressman.

Thank you, Mr. Tenstra.

Thank you, Chairman and ranking member. Thank you for holding this hearing, Secretary Bessent. I truly enjoy always talking with you. I was a professor of business and economics and when I got my doctorate I actually did some work on what you've done in the past. So always very impressed. I want to just say we've done some historic things over the last year. Obviously the big beautiful bill, the working families tax cuts is just incredible. Can you talk a little bit about that bill? I'm going off script a little bit so I hope I'm okay. But can you talk about international tax and what that is going to do to bring onshore businesses and keep the US competitive around the world. We have so many multinationals and other companies that do jobs around the world. I see a lot of this employment coming back and a lot of the workforce that we're going to have in the US is going to grow. Can you talk a little bit about that?

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Scott Bessent3:19:58

So, couple of things and I enjoyed our trip out to Iowa. I remember being there when everyone says like that the gasoline prices aren't going to come down. I remember the level when we went to that diner. And they will come down. You know what? And they're all happy, you know, compared to what everybody else is saying, all the farmers are happy. So, corporations have a choice globally. And I think with this administration, I've often described that we have a three-legged stool and it is tax, trade, and regulatory certainty. And all of those have worked to push the businesses back into the US to make them want to come here. And it's certainty. Come here, you have tax certainty, you have regulatory certainty, and you have energy certainty. US is an energy superpower. And I am responsible for the US economic dialogue with China. And when I look at like what does China envy the US over? It's our military. It is our economic system and the strength of the dollar. It is our innovation and it is our energy. And we can't take those for granted. And all of that centers around the tax policy and this immediate expensing. It's my belief that in China they spend about 4% of GDP subsidizing industry. So we aren't a command and control economy. What we tell people, I don't go through the S&P 500 and say you need a loading dock, you need a new assembly line. We just give companies 100% expensing and they can do what is best for them. And it's capitalism. I mean it works well and like you said we're not giving anything like China is. I mean it's just phenomenal. Just immediate expensing and that's just a timing issue.

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Unknown3:21:54

I just want to talk about, I was really involved in the ACRE Act. This was borrowing costs for farmers, manufacturers and agricultural businesses and stuff like this. Could you highlight how this will help strengthen America's agricultural economy? If you know a little bit about it or not, what it is, it's the tax on the loans and we have lowered that. We want to continue to lower that and can you just tell how that could incentivize growth in rural America?

S

Scott Bessent3:22:27

Well, I think that deferral and the tax is very important because there is nothing with more fixed assets. Farming is an interesting business. My family's been in the farming business for 250 years. It's an interesting business because you have high fixed income assets or high fixed assets but you have uncertainty based on weather production. So that's right, there is a lot of uncertainty and this brings much more certainty in terms of cash flow to those farms.

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Unknown3:23:03

Yes, absolutely. Then one final thing based on farming and stuff like that. I call it the pillage tax. It's actually government sticking their hand in the grave and wringing some dead person's neck and saying you owe us 40% in death tax. I'm always appalled by this when somebody passes away and all of a sudden we say oh by the way you owe us 40% tax if you pass that land on or that manufacturing or that small business on to the next generation. So we did $15 million, thank you to President Trump and everyone else to get that done. Would you, what is your thoughts on trying to permanently get rid of the death tax? I mean do you tend to agree it's sort of a pillage tax?

S

Scott Bessent3:23:43

Well, all that capital has already been taxed at least once, many times, twice. And to go back to farmland, in many, I've studied tax policy around the world. In many countries, including the UK, farmland is not subject to death duties.

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Unknown3:24:02

That's right. That's right. Thank you so much. Always good to see you. Thank you. I yield back. Oh, Mr. Chair.

Thank you. The chair recognizes the gentlewoman from New York, Miss Malia Takis.

Thank you very much, Secretary Bessent. Thank you very much. Welcome to our committee. It is great to have you here. First I want to say thank you for your words in support of suspending the federal gas tax. I have legislation that would do that. It would suspend it for 90 days, give the president additional authority for 125 days. I'm introducing that with my colleague Max Miller on this committee as well and we hope that we can get that through. Number two, I wanted to say that, you know, in pointing out some of what my colleagues on the other side have been saying about the working families tax cuts, the fact remains that this was a historic tax cut for working Americans, for middle class families, for senior citizens. They are the ones who voted to cut the standard deduction in half, to cut the child tax credit in half, to increase tax rates for Americans across the board. And they also voted against tax cuts for tipped workers for those who work double shifts and overtime for refunding taxes paid on social security to our senior citizens. And so first, the SALT deduction and the senior citizens I believe in addition to the child tax credit which we've seen tens of millions of families take advantage of across the country. I think the SALT and the senior deduction were most beneficial. I was very proud to have authored the bonus senior deduction. And I think essentially it has given back the seniors that qualify the taxes that they paid on social security and they're seeing that money returned to them which is why it is no tax on social security provision. Could you talk a little bit about SALT and senior deduction how that benefited preferably New York but the entire country?

S

Scott Bessent3:26:01

Well, I think in high tax jurisdictions, you know, high income high tax like yours, bringing back some level of the SALT deduction was appropriate. I think that no one negotiated harder. Well, maybe a couple people, but it was a group effort from some of the Northeast and California delegations. And I think we got to a very good spot on that SALT that if this tax bill had expired, the SALT deduction would have come back, but so would the AMT, which would have devastated everyone in those states. So, and look, as I travel around, that whether it is the social security deduction, when I look at these numbers, 99% of the filers claiming the no tax on tips incomes under $200,000, 90% under $100,000, or the senior deductions, 94% under $200,000, 68% under $100,000. So these are people on fixed incomes and they need certainty.

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Unknown3:27:09

Yeah. And the SALT deduction again was not for billionaires. It was targeted to families of incomes of less than $500,000.

S

Scott Bessent3:27:17

I think it was very well tailored.

U

Unknown3:27:19

It certainly was. And I know that

S

Scott Bessent3:27:22

Tailored and tapered.

U

Unknown3:27:24

And I can tell you that in my district we have many people have saved thousands of dollars because of that SALT deduction and seniors who have saved thousands of dollars because of the other deduction as well. And I just want to turn to some of these organizations that we've been talking about. Our committee has investigated. These organizations that we're seeing a lot of foreign influence. We continue to see examples of foreign actors exploiting nonprofit organizations to interfere in our political process to fuel anti-semitism, in some cases even support or promote terrorism. We have also seen an increase in these organizations coordinating with and receiving support from individuals connected to the Chinese Communist Party. One of these organizations is Code Pink, which Department of Treasury, your department as well as justice have launched an investigation into. I mean, the Code Pink founders and groups there. They've been meeting with Cuba's communist regime, the Iranian regime in the past. They've met with leadership of Hamas. I would like to have an update on your investigation and do you see the potential for some of these organizations to have their 501c3 status stripped?

S

Scott Bessent3:28:28

So, I'm going to have to say it to this side of the room now. I can't comment on ongoing investigations, but they are wholesome.

U

Unknown3:28:36

Okay. Well, we appreciate your efforts and I yield back my time and thank you for coming here and thank you for putting up with some of the nonsense that we're hearing.

Thank you. The chair now recognizes the gentleman from Carmel Valley, Mr. Petta.

Thank you, Mr. Chair. I appreciate that. Secretary Bessent, thanks for being here. And I guess you go by Dr. Bessent based on that South Carolina degree that was conferred on you.

S

Scott Bessent3:29:03

Yeah, only for the working press.

U

Unknown3:29:05

Understood. Look, as you heard, I come from, I hail from Carmel Valley, the place I grew up, place my Italian immigrant grandfather settled, thank God. We have a lot of beauty. We got a lot of bounty. But unfortunately, that means a lot of people want to live there. So, housing affordability does remain a major challenge in my district. And one of the reasons people aren't selling their homes is because they're going to take a huge hit on taxes, as I'm sure you're aware of, based on the fact that there is a capital gains exclusion, but that's from 1997, and it remains capped at the fact that it's only $250,000 for individuals, $500,000 for couples, and it has not kept up with inflation. As a result, many people who have grown out of their home just aren't selling because they want to protect their nest egg. Now, I got a simple bipartisan bill that actually has 18 members of the Ways and Means Republicans on my bill. And in fact, except the chair at this point, but I'm trying to get him as well. That being said, the president has actually supported this idea as well. And so not just because the president supported this type of legislation for doubling those numbers, making it $250,000 to $500,000 and $500,000 to $1 million and then tagging it to inflation. Would you support that type of solution when it comes to dealing with our affordability crisis, affordable housing crisis?

S

Scott Bessent3:30:24

I haven't seen studies that would show how many openings that would create, but I'd be happy to work with you on it. I remember it's a Clinton era program.

U

Unknown3:30:34

Yeah.

S

Scott Bessent3:30:35

And I remember when the Clintons changed it previously, you were allowed a one-time deduction over some age 60, 65. Or one-time tax-free sale.

U

Unknown3:30:46

You could roll your appreciation up to that sale. So I think there are a lot of things that we can look at. I don't want it to seem, I'm older than you are and I'm constantly told that the boomers get too much. I don't want it to seem like something that it's a giveaway to the boomers.

S

Scott Bessent3:31:05

Completely understood and look forward to talking to you and continuing negotiations on this, but I appreciate your acceptance of being open to the concept.

U

Unknown3:31:14

So, I appreciate that and look forward to working with you. But look, I think as you know and as you've heard, it's not just housing that makes it tough when it comes to affordability. Over the last year, inflation has rose 3.8%. Energy has rose 17.9%. Gasoline prices have rose 28.4%. Food has rose by 3.2%. And core inflation is still elevated at 2.8%. And look, I know you got some good numbers. I understand that. But the fact is is that when you speak to people on the ground, including the polling that Mr. Beyer referred to, prices are a major financial concern. Now, the costs have been exacerbated clearly by the Iran war, but also tariffs. Two areas I just want to hit on quickly. I realize you said the war is temporarily paused. I think you said that or you said that at the press conference you had last week. And you said that once it's resolved and there is a deal, gas prices will drop. Got it. But the president recently said that the Strait of Hormuz will be closed through Labor Day. Is that your definition of temporary and are gas prices going to remain high through the summer?

S

Scott Bessent3:32:16

Yeah, I didn't see that from the president and every indication I have is that they should be open sooner.

U

Unknown3:32:22

Okay. And we've already seen oil prices are down, Mr. Secretary, and I don't like saying this, but claiming my time. Tariffs are also affecting these prices and many people in small business in my district tell me that it's not just tariffs, but the constant change in the tariff policy that we've seen over the last year. Just yesterday, the administration announced another change in tariff policy and another tariff regime. 14 countries subject to 10%, 56 countries subject to 12.5% tariffs. Has Treasury done any sort of assessment on the impact of these frequent changes to the tariff policy and what they're having on small businesses? And is there an exclusion process planned to help these small businesses because of these types of changes in tariff policy?

S

Scott Bessent3:33:06

Well, I would have to dispute that the cost increases were due to tariff policy because last year the inflation was in services and we don't tariff services.

U

Unknown3:33:18

Got it. But have you done any sort of assessment as to whether or not you can help small businesses get through these types of tariffs?

S

Scott Bessent3:33:24

Well, I think we've already done a lot with small businesses in the working families tax cut.

U

Unknown3:33:30

Okay. All right. So, you have it. That's fine. What I'm getting, I'm going to reclaim my time just because you're not getting to the point. Just let, I'm reclaiming my time, Mr. Secretary. Thank you. But please know I think that should be done in regards to our small businesses. Now, also in regards to Mr. Peltz, I'm an intelligence, I was an intelligence officer. I served in Afghanistan. And I served proudly and I dealt with the intelligence community. I know what you say about not having experience in the job, but please know that that's offensive to people in the intelligence community and worse, it's dangerous to

our national security to have someone like that at that position. Thank you, Mr. Secretary, for being here. I yield back.

S

Scott Bessent3:34:07

Thank you, Congress.

U

Unknown3:34:08

Thank you, the gentleman from Buckeye State, Mr. Kerry.

V

Vern Buchanan3:34:11

I want to thank the chair. I want to thank the ranking member, but also, Mr. Secretary, it's great to see you again. Thank you for being with us. And again, I want to touch upon a lot of the facets with the working families tax cuts and how it has affected the average American, but first I do want to highlight some of the successes within this monumental piece of legislation. This landmark legislation was drafted with every American in mind. It didn't matter their race, their gender, their income level, their marital status. This affected all Americans. The overall share of taxes paid by the top 1% went up. At the end of the day, this is a fact. This isn't disputed. A family with two children saw their tax returns increase an average 11%. That's a fact. For our small businesses, the backbone of the American economy, we permanently extended, Mr. Secretary, that's big. That's big for our seniors and coming off of the social security fairness that we did in the previous administration, but for our firefighters and our postal workers and our police officers. But just what we did within the Social Security space, a $6,000 tax deduction, which is greater than the Social Security taxes the average senior household currently pays. For our manufacturers who built this country, we implemented 100% immediate expensing for equipment, machinery. That's what we did. Now, there's been a lot of talk about energy. There's been a lot of talk about fuel prices for our country. And I want to just highlight a couple numbers because we've heard a lot of numbers. And energy happens to be something I do know a little bit about. But today the average gallon of gas is $4.24 per gallon. Into the previous administration same time average price was $5.16 without the sort of Damocles of a nuclear warhead in Iran. You have to understand history to understand how terrible that regime and the threat that that would have been for all Americans. But let's talk about the pro-family policies that this monumental piece of legislation did. It permanently extended a $2,200 tax credit and tied it to inflation. That's every working family that has kids, folks. Every working family. Extended the adoption tax credit. Expanded education savings accounts to include additional K through 12 additional expenses. Expanded the health savings accounts, great things. Improved employer provided child care tax credits and made permanent paid family leave and medical leave tax credit. Our children will recap the benefits of the Trump accounts in which five million children have already been enrolled. Now, this legislation didn't pick winners and losers. It didn't prioritize certain segments of the American population over the others. And it's not a government handout to any particular economic sector. This is sound tax policy focused on tax certainty for all American businesses, putting more money in the pockets of hardworking Americans and putting our country on a trajectory for economic success. Now, Mr. Secretary, I know that you've had to listen to a lot of things today, and we do appreciate your service. We do appreciate you leaving the private sector to do something that in many ways is a very difficult position to be in. But Mr. Secretary, your time, your staff's commitment and this commitment of the administration to make America a better place. We appreciate that. So with that, thank you again for being here today. And with that, Mr. Chairman, I yield back.

U

Unknown3:38:50

Gentleman yields.

S

Scott Bessent3:38:51

Congressman, thank you.

U

Unknown3:38:52

Also from the Buckeye State, Mr. Miller was recognized.

M

Mike Kelly3:38:56

Thank you, Mr. Chairman. Mr. Secretary, it's great to see you again.

S

Scott Bessent3:38:59

Good to see you.

M

Mike Kelly3:38:59

And to note, chairman, just a better part of the Buckeye State. For the record, but thank you, Mr. Chairman. Thank you to Secretary Bessent for your testimony before this committee today. It is much appreciated. Since we last discussed digital assets in this room, the landscape has shifted from a conversation about the rise of these technologies to a question of how we successfully integrate them into our regulatory tax infrastructure. We've seen meaningful progress. The Senate Banking Committee has advanced the Clarity Act to build a market structure framework. Additionally, I along with my colleague to my left over here, Rep. Horsford, have introduced the Digital Asset Parity Act to finally provide the common sense tax certainty our businesses and investors truly require throughout our country. We are no longer debating whether digital assets are here to stay any longer, but rather how we define the rules of the road. And we believe that this is necessary now at this time in our history. I truly look forward to discussing how Treasury can collaborate with Congress to ensure these dual frameworks provide the economic stability and tax fairness the American people deserve. Mr. Secretary, the PAR Act was introduced to solve the phantom income and tax as cash hurdles that currently plague American businesses and everyday investors. We've seen that without tax parity, companies are hesitant to adopt these tools. Individuals are burdened by the reporting requirements that feel more like friction tax than truly a fair system. So, I'll just get right to it. As the Treasury Department looks at the current tax code, how do you see the Parity Act, specifically its provisions for stable coin payments and the elective deferral of staking and mining rewards as a catalyst for keeping digital asset innovation within the United States rather than forcing it offshore?

S

Scott Bessent3:40:47

So, Congressman, thank you for those questions. This administration and Treasury's goal is to onshore digital assets both because of the innovation that we're seeing and US standards and practices. So we would like to work with both of you on this to perfect the right balance between how this should be done. But I do think look whenever we get to these new technologies there is an adjustment period. We have to think about them in a different way and I believe not only for the technology for the payment rails it's essential for us to be the leader to maintain dollar dominance and we want to have the best standards in the US that we can export to the rest of the world. So we'd be happy to work with you on that.

M

Mike Kelly3:41:39

Thank you very much. We've been working extremely hard over the last, I'd say, 15 to 16 months to bring a framework. And truly what we're seeking here really is, you know, besides the name of the legislation, clarity and parity and just stability for the tax code for these individuals. And I very much thank you for your answer and you willing to work with both of us on committee and all of us. Our bill also...

S

Scott Bessent3:41:59

Congressman, I would say let's get clarity done by the 4th of July and then we move on to the how.

M

Mike Kelly3:42:04

Mr. Secretary, I would love that. I just if you could help me with some of those individuals up there.

S

Scott Bessent3:42:09

I've been on the phone with them this week.

M

Mike Kelly3:42:11

All right. Well, if that thing gets moving, then yes, it makes our job much easier and I would prefer that way as well. But thank you and any more guided push would be awesome on our committee and very grateful. A critical piece of this legislation is the application of section 1058 like treatment to digital asset lending. If the Treasury Department were to formally recognize digital asset lending as analogous to the securities lending covered under section 1058, what is your assessment of the impact on the domestic market liquidity? And specifically, does Treasury agree that extending this established tax treatment of nonrecognition is one of the most efficient levers to move digital assets from a speculative asset class to a functional transparent part of our institutional financial infrastructure.

S

Scott Bessent3:42:56

Congressman, you obviously feel strongly about this. I have a motto in life, no data, no opinion. But I will get back to you with an opinion.

M

Mike Kelly3:43:04

I very much appreciate that. This has been one of the tougher subject matters that we've discussed on the committee because I believe that this country for a long time has been stuck in the analog era and we are now in the digital age and you know this framework altogether just provides guidelines and stability for the cryptocurrency network within our country and I appreciate you saying you'll work with us but I truly believe now is the right time for this with President Trump and the Federal Crypto Reserve and him wanting the United States to be the crypto capital. My concern is that if people like you and I and others right now, who don't have a good understanding aren't the ones really steering this to its final destination, then we may never get there and it may get screwed up in a different way. But I truly appreciate you being here, working with Rep. Horsford, myself, and I yield back.

S

Scott Bessent3:43:55

Thank you.

U

Unknown3:43:55

Gentleman yields. The chair now recognizes the gentleman from Vegas, Mr. Horsford.

L

Lloyd Doggett3:43:58

Thank you to the chairman and to the ranking member and I look forward to working with Congressman Miller and the other members of the committee on the Parity Act, which is a true bipartisan bill. Before I begin though, I want to thank Chairman Smith for his commitment to working with me also on the full house act. Prior to the Senate pass bill, gaming patrons could deduct 100% of their gambling losses. They were taxed on what they actually earned, nothing more, nothing less. The Senate changed that. This provision was included without meaningful debate and creates a fundamentally unfair outcome for taxpayers who participate in legal gaming activities. Under the new provision, patrons can deduct only 90% of their losses. That means someone who breaks even or even loses money overall could still face a federal tax bill. So, Mr. Secretary, will you work with Chairman Smith and me to fix this issue and to protect gaming jobs and tourism dependent economies like Nevada?

S

Scott Bessent3:45:04

We'd be glad to, sir.

L

Lloyd Doggett3:45:06

Thank you. Now, Mr. Secretary, you talked a lot about permanency throughout today's hearing. For the tip worker, for the warehouse worker, for the teacher, for the nurse, and for the small business owners in Nevada, they don't need a temporary tax gimmick. They need permanently lower cost and permanently higher take-home pay. Yet, when Republicans wrote their bill, they made a choice. That the tax cuts for billionaires and large corporations would be made permanent while making the tax relief for working people temporary. To me and to the workers, that tells them exactly who they were thinking about when they wrote it. That's why I have introduced the TAPS Improve Tips Improvement Act as well as the Overtime for All Workers Act because I believe workers who earn tips or who work overtime should receive permanent tax relief not temporary. If Republicans are serious about helping working families, they should join me in making tax relief for workers permanent, just like they did for billionaires. Now, Mr. Secretary, I want to discuss tariffs, which are hidden taxes that American consumers pay, including businesses. The Supreme Court ruled that this administration's broad tariff policy was unlawful, but American families already paid the price. Small businesses paid it through higher costs. Consumers paid it through hidden higher prices. And according to the Yale Budget Lab, the average household paid roughly $1,800 more because of these tariffs. So at a time when you talk about giving relief to workers, temporary relief, on the other hand, they are feeling the effect of higher prices. So, let me ask you directly. Do Americans deserve refunds for money collected through tariffs that the Supreme Court ruled illegal? Yes or no?

S

Scott Bessent3:47:16

Congressman, the American people had the money. It was in the US Treasury and it didn't take away.

L

Lloyd Doggett3:47:22

Do you agree that they deserve the money back that the Supreme Court ruled is illegal? Yes or no?

S

Scott Bessent3:47:28

It's not a yes or no question because every Democratic attorney general applied the...

L

Lloyd Doggett3:47:33

Supreme Court ruled that they were illegal. Mr. Secretary...

S

Scott Bessent3:47:36

I know. And but they applied for them to go back to the companies to the...

L

Lloyd Doggett3:47:41

So do the companies deserve the money back...

S

Scott Bessent3:47:43

to the payers of record.

L

Lloyd Doggett3:47:44

So do they deserve their money back?

S

Scott Bessent3:47:46

That is an issue for the Customs and Border Patrol.

L

Lloyd Doggett3:47:50

No, no, no. Mr. Secretary, while the Homeland Security Act of 2002 may have transferred a number of custom functions from Treasury to DHS, Treasury retains oversight over trade policy and the protection of revenue functions. Treasury can delegate those functions, but it cannot delegate that statutory authority. Just last week, the Justice Department appealed a court order that would have accelerated refunds to importers and to businesses. Mr. Chairman, I ask unanimous consent to submit for the record the May 29th article US to appeal judge's order for broad refund of Trump tariffs.

U

Unknown3:48:33

Without objection.

L

Lloyd Doggett3:48:34

Thank you. Secretary Bessent, yes or no. Did you participate in discussions about appealing efforts to speed up tariff refunds?

S

Scott Bessent3:48:42

No.

L

Lloyd Doggett3:48:44

Treasury helps shape major fiscal policy. Returning roughly $165 billion dollars to businesses and consumers is a major fiscal decision. So why wasn't the Treasury involved?

S

Scott Bessent3:48:59

Again, we act as the payment agent. Your bank does not tell you which bills to pay. You tell your bank with.

L

Lloyd Doggett3:49:06

Well, from the public's perspective, taxpayers perspective, the administration is fighting harder to keep their money than to return it. That's why I've introduced the Relief Act to give automatic refunds within 90 days to the people who paid the tariffs and that once the refunds are made that the benefit goes to the consumers that ultimately paid the price in higher cost. The Relief Act creates an automatic refund process, something that this administration has not been working to accomplish. And this would actually address the economic uncertainty that has been caused by these across-the-board tariffs. Not strategic, not in the best interest of American consumers. And it's time that we give the money back to the people who paid it. With that, I yield back.

S

Scott Bessent3:49:56

And many foreign companies, and I think we're going to see that the payers of record, many of them are overseas entities. So I...

L

Lloyd Doggett3:50:04

Well, Mr. Secretary, families in America don't experience the economy through GDP reports or stock market indexes. They experience it through rent and groceries. They experience utility bills, tariffs...

S

Scott Bessent3:50:19

because they're paying... That's exactly right. What does it have to do? It has to do with the average family not being able to meet their monthly budget obligations because this administration...

L

Lloyd Doggett3:50:32

is so aloof to the reality majority of Americans are facing.

U

Unknown3:50:37

Mr. Bean.

J

Jason Smith3:50:38

Thank you very much, Mr. Chairman. Good afternoon to you. Good afternoon, Ways and Means. Good afternoon, Mr. Secretary. Welcome back to Ways and Means. 4 hours ago is when this hearing started, but a year ago we were in the middle of debate of the one big beautiful bill. You, Chairman Smith, this president were all architects. You made some big bold predictions. Pass this bill, Congress, and we will see a reverse of manufacturing jobs closing or fleeing the country. You made a big bold statement that you'll put more money in Americans pockets than ever before should we pass this bill. We passed the bill and Mr. Secretary, everything you said is coming true. How about that? There's more money in Americans pockets. The 4.5 million manufacturing jobs that we've lost since the year 2000 are coming back. And from me speaking across Northeast Florida, people are excited, business owners are excited and making that happen. A year ago also we were doing something else. We were debating fraud, waste, and abuse. You would think that would unite this committee. But you can see today we disagree on so many things. That's something that should unite us. I want to brag on something that you're doing. And Treasury Department, you're a core pillar of President Trump's anti-fraud task force. Your subcommittees and your initiatives of the Office of Terrorism and Financial Intelligence, FinCEN and the Office of Payment Integrity are leading the way of supplying that task force. Let's fight fraud once and for all. Something else you're doing. A year ago, we talked about it of how fast we pay. The United States pays our bills very fast, sometimes too quickly, because we pay people who shouldn't get paid. Scammers don't have to rob banks anymore. They can just bill the United States. We pay them and then this pay and chase we figure it out. So you and I, you know this, you and I and your team have created a bill to codify what you're doing now which is to verify to use the data and statistics to making sure it's a legit bill that hasn't been paid by anybody else. So hats off to you. What else can we do, Mr. Secretary to assist you? Maybe it's just get out of the way to assist you in fighting fraud.

S

Scott Bessent3:52:57

Congressman, you are exactly right that once money goes out the door that anything other than a partial recovery is unlikely. I was out in Minneapolis and saw what was going on there. And I think in terms of the US is a high trust society and in terms of maintaining the trust that American citizens or that we have in each other and our visitors. It's important to prosecute and of course prosecute but the recoveries are going to be very...

J

Jason Smith3:53:32

it's almost they're bad guys. They hide and chase those. So your efforts don't give up on our bill that's in Mr. Comer's committee. I'm still lobbying it. You weighing in would be a big deal. You're already doing it, but we want to codify it. It's the best practice of paying our bills. Scammers also are targeting older folks and Americans. There's these scam calls, spam and scam calls. I get eight to 10 a day. Now, the FTC, it's already against the law. We put your number on the do not call list. I want to plant a seed with you. The FTC is responsible for it. It's against the law. But what if they don't have the teeth or muscle that Treasury has? I want to plant the seed with you. What do you think about the idea of Treasury getting involved and chasing and kicking out these scammers that are calling us? What do you think, Mr. Secretary?

S

Scott Bessent3:54:22

We are, Congressman. FinCEN is actively involved and many of these come from overseas.

J

Jason Smith3:54:28

Right? And you've got the tools to go after them.

S

Scott Bessent3:54:31

So, we've worked very well with the FBI in Southeast Asia to break up these I think they're called scammer cities.

J

Jason Smith3:54:39

Amen. And you know a lot of it comes out of huge amount out of North Korea. And unfortunately many of our seniors I think one out of every three seniors has been the subject of a financial scam that averages about $300. There's a special place in the afterlife for anybody that rips off an older American or anybody old. I just I hate that. Mr. Secretary, we still have to solve healthcare. That's something that maybe we do agree on both sides of the aisle says we have to do better. What if Americans took charge of their own health care by having the money to do so? I've got a bill, HSAs for all health savings account where people just like their retirement they can put money aside for health expenses to make that happen. Mr. Secretary, is that bill is that a good idea or a great idea? The Bean bill of health savings accounts for all.

S

Scott Bessent3:55:32

I think it's a great name and a great bill.

J

Jason Smith3:55:34

That's the right answer, Mr. Secretary. And look when you give people agency they can tailor it to their own needs and what we are seeing with the employee employer credits where employers can give credits. We're seeing a big uptake in that.

S

Scott Bessent3:55:51

Love it. Love it.

J

Jason Smith3:55:53

Mr. Secretary, you could be doing anything. Thank you for your service to your country. We appreciate you. All the best, Mr. Chairman. I yield back. Thank you, Mr. Moran.

R

Richard Neal3:56:02

Thank you, Mr. Chairman. Good afternoon, Secretary Bessent. Thanks for being here today. I know it's a long day. Thanks for your service to our country as well. You're doing a fabulous job. By the way, we appreciate your willingness to appear before the committee and provide updates on the important work being done at the US Treasury Department. I'd like to build on some of the successes my Republican colleagues have already highlighted by focusing on two direct results from the working families tax cuts, both substantially improving Americans lives and financial futures. First, I want to discuss the opportunity zone program. You mentioned this in earlier testimony, specifically the new rural opportunity zone provisions. Last year, Ways and Means Republicans strengthened and modernized this program to ensure that investment reaches some of the most economically distressed communities in America. As someone who represents a large rural district in East Texas, I've seen firsthand the challenges that many communities face when it comes to attracting capital, creating jobs, and expanding economic opportunity. Too often, rural communities are overlooked despite their tremendous potential. Here's my question. As we move closer to the nomination process, can you walk us through what comes next after census tracts are nominated by the states?

S

Scott Bessent3:57:14

I can't do that. So, I'm happy to have my team get back to yours. We are working with red state and blue state governors and we're encouraging them to get ahead of it. I had a call, I can't remember it was yesterday or the day before with the father of opportunity zones, my hometown senator Senator Tim Scott and we were talking about he's a city guy. I'm a country guy in South Carolina and we were talking I was telling him what a great move this is for the rural opportunity zones and how it's going to be transformational.

R

Richard Neal3:57:48

Yeah, I agree with you. That's what we see in these provisions as well that it gives certainty and long-lasting opportunity for economic growth in areas in America where traditionally businesses or investors are looking and saying you know I'm not quite sure if I can make that investment there but this is the incentive that's needed for that. Question number two involves the no taxes on overtime provision. I want to turn to this provision because I was proud to help champion this policy because it recognizes a simple principle Americans who work harder and put in extra hours should be able to keep more of what they earn. We've now learned that more than 29 million filers have claimed that deduction this year and notably 96% of those taxpayers earn less than 200,000 annually. Here's my question, Mr. Secretary. Do these results demonstrate that this law is delivering meaningful tax relief to working Americans? The men and women who are keeping our economy moving every day and that the benefits are reaching middle class families rather than the wealthy as Democrats have falsely claimed.

S

Scott Bessent3:58:51

Congressman, I tell someone asked me earlier why do you do this job and the highlight is going out and meeting with hardworking Americans being out with the people and whether I'm in Texas at a barbecue place outside of Dallas which I enjoyed. I was in an Italian restaurant in Simi Valley near the Reagan Museum this weekend and that all I hear from both the employees and the employers is what a home run this has been. And you know I tell you I told the story earlier tax day April 15th I was with the president in Las Vegas. He had a big rally and he asked for the room to he went through each one of the provisions and we're in the tip capital of the world in Las Vegas, but it was the no tax on overtime that got the roar of approval over no tax on tips.

R

Richard Neal3:59:46

Yeah, I'm finding the same thing as I go through my district. That's the number one provision that people are citing to me.

S

Scott Bessent3:59:52

It's the American way. If you want to work harder, you should get to keep more of your money. And you know, I think one of the congressmen said, well, you know, we've got to let in these workers that we've got to have what if Americans want to work more and keep more of their money. That's right. You know, I think that's a concept we need to continue to propagate and find policies that support letting hardworking Americans keep more of their money. We forget sometimes in DC, and we shouldn't forget this, that it's their money. It's not ours. And I know you know that. I think you're doing, as I mentioned earlier, a great job. We really appreciate I want to mention your successful negotiation of the side-by-side agreement that's helping to place the United States in a much stronger and more competitive position in the global tax landscape, digging us out of the Biden tax surrender effectively and really putting us back on the footing we need to get on. So, thank you for that work. I know you got a great team behind you as well. Keep up the hard work and let us know what we can do. Thank you. I yield back.

R

Richard Neal4:00:50

Good. Thank you, Congressman.

U

Unknown4:00:52

Mr. Schneider.

L

Lloyd Doggett4:00:54

Thank you. And Mr. Secretary, thank you for your patience staying here. I actually want to give you a chance to correct the record on something you said. You earlier commented somewhat off-handedly that the conflict with Iran had ended. Do you truly believe that we are no longer in conflict with Iran and that they are no longer a threat to Israel or allies in the Gulf? That their nuclear program has been destroyed, that they no longer have a ballistic missile program and drone program threatening its neighbors in the region, that they will no longer sponsor terrorism in the region around the world.

S

Scott Bessent4:01:23

So are you saying you're in agreement with the president's decision to be...

L

Lloyd Doggett4:01:29

You said the conflict was over. I'm asking, do you believe the conflict's over and everything is on pause?

S

Scott Bessent4:01:35

So everything's good with Iran now?

L

Lloyd Doggett4:01:37

No, don't be absurd. I'm asking...

S

Scott Bessent4:01:41

that as the president said yesterday unless an American life is lost he does not believe that he will have to restart the kinetic asset.

L

Lloyd Doggett4:01:50

Okay. So you're I'm reclaiming my time and I'm just trying to help you clear the record. I'm reclaiming my time. Mr. Secretary, can you promise because this is your jurisdiction that you and the Trump administration are not considering lifting sanctions on Iran as a concession towards opening the Straits of Hormuz.

S

Scott Bessent4:02:06

We've made it clear that the Straits of Hormuz, the blockade is the only thing that will be lifted to reopen the straits.

L

Lloyd Doggett4:02:16

So no sanctions relief whatsoever.

S

Scott Bessent4:02:18

I'm not part of the negotiating team but I am told by the negotiating team and I strongly believe that it will be the blockade will be lifted.

L

Lloyd Doggett4:02:28

Okay. And I'm going to just reclaim because there's a lot of things I want to cover. My hope is you'll keep Congress informed of any such considerations if they do come up. Also, in your opening remarks, Mr. Secretary, you said Americans have more money in their pockets. That's not what I'm hearing from my constituents. Are you saying the overall cost of living is lower today than it was 16 months ago when you came into office? Because what I'm hearing from my constituents is that the cost of groceries are up. For example, beef, coffee, tomatoes are at record or near record highs. The cost of housing is up. And for too many, the American dream of buying a home is out of reach. I'll let you answer. Healthcare premiums continue to rise and millions of Americans have either already lost or expect to lose their health insurance altogether because of HR1, the bill you so joyously celebrate. Energy costs, gas for our cars, electricity for our homes are all rising through the roof, and family care, child care, and elder care is prohibitively costly. Are you saying that cost of living is lower today than it was a year ago?

S

Scott Bessent4:03:23

I am saying that we are much closer to the Fed's target rate of 2% on core inflation than we were when President Trump came into office. We are at 2.8%. And you can list off the most expensive groceries that have had the biggest price increases. I got...

L

Lloyd Doggett4:03:39

I think you're just out of touch with what American families are facing. As my colleague noted, I'm reclaiming my time. Tariffs are a tax on American families. This is my time, Mr. Secretary. This is my time. I will speak and then...

S

Scott Bessent4:03:52

higher grocery prices are taxes on American families. Higher gas and electricity prices Democrats should know. No wonder so many people are leaving Illinois. Why don't you come see me in South Carolina?

L

Lloyd Doggett4:04:03

They're not leaving. They're coming to Illinois. Just a quick question, Mr...

S

Scott Bessent4:04:05

You're saying Illinois doesn't have net outbound migration.

L

Lloyd Doggett4:04:08

All right, let me take it to a different topic. And I know you don't want to address it, but my constituents are outraged and want me to talk to you about the absurd illegal self-dealing settlement between President Trump and his family with the Justice Department and the IRS over which you have jurisdiction. The administration apparently believes that there should be two systems of justice, two sets of laws, one for the president, his family, and his rich friends like you, and one for the rest of us. Nothing demonstrates this more than the so-called settlement with its slush fund for insurrectionists and tax immunity for the president and his family. Mr. Secretary, simple question. Do you believe that there should be only one legal system in this country and that no one, even the president, should be above the law?

S

Scott Bessent4:04:46

I believe that no one is above the law, but you all have put the president beneath the law and you have weaponized the system against him. Whether it is the leak of his taxpayer records...

L

Lloyd Doggett4:04:56

His taxes should never be leaked. No taxpayers information should be leaked. I agree with you on that. But no, let me ask you a separate question. Would you like to apologize to the president right now on behalf of the...

S

Scott Bessent4:05:07

I have nothing to apologize to this president for his taxes should not have been leaked but it was leaked by a contractor and you keep trying to dissemble here and avoid the questions. I believe that all Americans should pay the taxes they owe and not a penny more.

L

Lloyd Doggett4:05:21

100%. Yes or no? All right. So do you think it applies to the president of the United States irrespective of whether the president is a Democrat or Republican?

S

Scott Bessent4:05:29

Yes.

L

Lloyd Doggett4:05:30

Okay. So, we agree on this and we should have a tax system that is fair and should be applied fairly to all people. But I can tell you that my constituents are outraged by the agreement the president made with himself and his own justice department that excluded him from ever having an audit over his taxes.

S

Scott Bessent4:05:48

No one should be targeted. No one should be targeted by the administration. Whoever is in the White House in them...

L

Lloyd Doggett4:05:56

No one should be targeted by the administration.

S

Scott Bessent4:05:58

And whoever's in the White House, their taxes should be paid and they should be confident that that information will be kept confidential with the IRS and not used to target them, their families or their business.

L

Lloyd Doggett4:06:08

Couldn't agree more. Couldn't agree more.

U

Unknown4:06:10

Mr. Yakym.

M

Mike Kelly4:06:12

Thank you, Mr. Chairman, for holding this hearing today and Secretary Bessent, it is great to see you again. Thanks for being here.

S

Scott Bessent4:06:17

Good to see you, Congressman.

M

Mike Kelly4:06:18

There's been a lot of talk about the cost of groceries lately here in this committee room. A lot of numbers thrown around, but I think it's worth putting eyes on the Democrats inflation. I had my staff whip up this chart behind me, and it shows that CPI numbers from what economists call quote food at home, but most Americans just simply call it groceries. These are the cumulative inflation numbers for the first 16 months of a presidential term of every presidential term since 1993. Mr. Secretary, the title most likely gives it away, but I'd like you to just play a little game with me here. Can you guess which one of these lines represents the Biden administration?

S

Scott Bessent4:06:55

Oh, probably the one that's red for torching the American people.

M

Mike Kelly4:06:59

That would be correct. Well done, Mr. Secretary. It is the red one. 16 months into the Biden administration, or as we now call it, Biden, grocery prices were up almost 12%. That far outpaced anything that any American had seen in recent history. And you can clearly see from the chart that that red line is as detached as the Democrats rhetoric is from reality today on this particular topic. So thank you for playing along here today. Switching gears, let's talk about tax priorities.

S

Scott Bessent4:07:29

And Congressman, I would note that the inconvenient truth for this side of the room, food at home since President Trump came into office is up 2.5%. That is half of what it averaged over four years of the Biden administration.

M

Mike Kelly4:07:48

That's right. And that stands in stark contrast of the 12% that you saw on the chart here a few moments ago. So, thank you for pointing that out. A 2019 New York Times story said that most taxpayers got a tax cut under the first Trump tax cuts, but most Americans didn't believe it because, quote, a sustained and misleading effort by liberal opponents of the law to brand it as a middle class tax increase. Here we are a few years later and Republicans cut taxes again for working families and working Americans. But yet again, my Democrat colleagues are rolling out the same tired playbook of bad faith attacks and misinformation. The working families tax cuts cut taxes for working families. It's just that simple. I can't tell you, Mr. Secretary, how many people have come up to me, whether it's at church or in the grocery store or just anywhere around the community, and they've said, Hey, thank you. Because my tax refund that I got was much bigger than what I expected. It's that working families tax cuts is just simply putting real money back in the pockets of working families.

S

Scott Bessent4:08:50

And Congressman, I can tell you when the 2017 tax bill was passed, I lived the I was one of the people who now fled New York, but I lived in Manhattan. My taxes went up. So for many upper end people in high tax states, taxes actually went up.

M

Mike Kelly4:09:10

That's right. And let's talk about some of the actual numbers and move beyond what some of the Democrats rhetoric has been today. Mr. Secretary, you recently said that 90% of filers claiming no tax on tips made less than $100,000, they had an average deduction of $7,000. 75% of filers claiming no tax on overtime made less than $100,000 with an average deduction of $3,100. And 68% of seniors claiming the enhanced deduction had incomes under $100,000 with an average deduction of $7,500. Does that sound directionally correct?

S

Scott Bessent4:09:47

That sounds pretty precise, Congressman.

M

Mike Kelly4:09:50

And, Mr. Secretary, are you aware of any millionaires or billionaires that claim no tax on tips or no tax on overtime or the enhanced senior deduction?

S

Scott Bessent4:09:59

No, sir.

M

Mike Kelly4:10:01

No billionaires claiming any of this stuff. Again, this is the ultimate working family. These are the ultimate working family signature tax cuts put through by this side of the room and President Trump.

S

Scott Bessent4:10:17

That's right.

M

Mike Kelly4:10:18

Well, thank you for clearing that up. Let's now consider what happened when Democrats had the pen and when they were able to craft their own tax law. A 2024 analysis of households claiming the green giveaways in Democrats Inflation Reduction Act found that only 47% made less than $100,000. In fact, over a quarter of the households who took those deductions made over $200,000. And households making over a million dollars got nearly 100 million taxpayer dollars worth of Democrats green giveaways. Even Mother Jones had to admit that when it comes to Democrats green giveaways, quote, Working class Americans are missing out. But if you think about it, it kind of makes sense, doesn't it? Mr. Secretary, do you think that a family making less than $100,000 cares more about no tax on tips or putting solar panels on their roof?

S

Scott Bessent4:11:06

I think they're no tax on tips or the subsidy for a high-priced EV.

M

Mike Kelly4:11:12

And do you think that they would care more about no tax on overtime or solar panels on the roof?

S

Scott Bessent4:11:17

Everyone I've spoken to loves no tax on overtime, sir.

M

Mike Kelly4:11:22

So while Democrats gave millions to millionaires and while the Republican working families tax cuts simply cut taxes for working families. Is that correct?

S

Scott Bessent4:11:30

100%.

M

Mike Kelly4:11:31

Thank you, Mr. Secretary. Mr. Chairman, I yield back.

U

Unknown4:11:33

Thank you, Mr.

L

Lloyd Doggett4:11:38

Thank you, Mr. Chairman. And thank you, Mr. Secretary, for sticking it out for over four hours here today. We appreciate your time and we appreciate your service to the nation.

S

Scott Bessent4:11:46

Good to see you, sir.

L

Lloyd Doggett4:11:48

So, earlier today, Mr. Kelly from Pennsylvania was quoting from Charles Dickens. He said it was the best of times. It was the worst of times. Would you happen to know what the name of that book was that that came from?

S

Scott Bessent4:12:00

Tale of Two Cities.

L

Lloyd Doggett4:12:02

A Tale of Two Cities. Which is very appropriate for what we I think see happening at this hearing here today.

S

Scott Bessent4:12:06

We might say Manhattan and Dallas.

L

Lloyd Doggett4:12:08

I wouldn't say that, but okay.

S

Scott Bessent4:12:10

I would.

L

Lloyd Doggett4:12:10

So, let's think about it. You said earlier today, and I'm sure you stick by this, the economy is very strong.

S

Scott Bessent4:12:19

It is.

L

Lloyd Doggett4:12:19

Okay. So, you say it's very strong, but we've heard consistently throughout the course of this day and in reports regularly that over 70% of Americans think the economy is bad and getting worse. Are you familiar with that polling?

S

Scott Bessent4:12:33

I am.

L

Lloyd Doggett4:12:35

So, that would seem to be a tale of two cities. You saying the economy is very strong and the people of the United States of America saying the economy is bad and getting worse. Now, the Biden administration, which we've heard a lot from you guys today, I think made a similar mistake to what your administration is making because the stock market was booming under the Biden administration. There was job creation under the Biden administration. Unemployment was low under the Biden administration and the stock market is booming under this administration. That's true. And unemployment remains relatively low and there is some but much reduced job creation. But you're making a mistake, I think, to not listen to what the American people are saying, which is that they're very unhappy with the economy because of the way it's affecting them. So, have you heard the expression the K economy or the K recovery?

S

Scott Bessent4:13:27

Yes, sir. But I think we're probably moving to a C economy where the top...

L

Lloyd Doggett4:13:33

Okay. But I want to talk about the K economy for a second. We can get to C a little bit later. Is that okay? Okay. So the K economy has one group of people going up and another group of people going down. It's the K economy. So in the K economy, the top group sees a booming stock market. But as you mentioned earlier, one of the reasons you wanted to do the what you call Trump accounts is because 93% of the stock holdings in America are held by the top 10%. But the lower income Americans, 50% of Americans have only 1% of the stock holdings. So while the stock market may be booming for much of the people in the United States of America, they have booming gas prices and booming grocery prices. In the K economy, we have your friends and some of friends of the people here that talk about buying second homes. But in the other part of the K economy that's going downwards, people can't afford to buy a home. Young people especially are foreclosed from being able to buy a home in this K economy. In the K economy, you have a group of people that are their friends are talking about the great vacations they're going on. They're going to these exotic places. They're doing these interesting things. In the other part of the K economy, people have a hard time paying their bills. So, there's these two tale of two cities that's taking place in the K economy here in the United States of America right now. Now, Mr. Secretary you attended the president's inauguration. Were you?

S

Scott Bessent4:14:59

I did.

L

Lloyd Doggett4:15:00

Yes. And at his inauguration, he said, We're going to rapidly reduce prices. That was one of the quotes the president made during his inauguration. He made many quotes like that during his campaign as well. Do you think that the prices in the United States of America have been rapidly reduced?

S

Scott Bessent4:15:17

I think before the Iran conflict began that the rate of change for inflation both headline and core had come down substantially.

L

Lloyd Doggett4:15:27

Well, people don't think that prices have been rapidly reduced. So, you do admit though that the war has caused prices to go up for gasoline, for example.

S

Scott Bessent4:15:35

100%.

L

Lloyd Doggett4:15:35

And you also agree? Well, they didn't go up 100%. They only went up 50%.

S

Scott Bessent4:15:38

No, no, no. I...

L

Lloyd Doggett4:15:39

You agree with me 100%. Okay, that's better.

S

Scott Bessent4:15:41

I'm glad to see somebody on this side is funny.

L

Lloyd Doggett4:15:43

Okay. So the second thing is that the tariffs do you think tariffs have caused prices to go up?

S

Scott Bessent4:15:50

Negligibly.

L

Lloyd Doggett4:15:53

You don't think prices have gone up significantly because of you just reduced tariffs the other day on farm equipment because you wanted to reduce prices on farm equipment because you thought it caused the prices to go up.

S

Scott Bessent4:16:03

Again overall the levels what we saw last year was goods inflation was down.

L

Lloyd Doggett4:16:08

Well, I would argue that tariffs have caused prices to go up and there's a lot of economists and groups such as the Yale Budget Lab, which you used to teach at Yale, didn't you?

S

Scott Bessent4:16:17

The Yale Budget Lab is a bunch of Biden era second stringers.

L

Lloyd Doggett4:16:21

Okay. Well, you taught at Yale. I understand. You taught three classes. The 20th Century Financial Booms and Bust, hedge funds, and a seminar on financial panic of 2000 to 2009. So, I don't know why you're not knocking Yale. You used to teach at Yale. You went to Yale. Didn't you go to Yale?

S

Scott Bessent4:16:34

That's why I get to knock Yale.

L

Lloyd Doggett4:16:36

Okay. So tariffs have caused prices to go up. The war has caused prices to go up. Do you think the deficits that were created by the big beautiful bill are causing interest rates to stay artificially high?

S

Scott Bessent4:16:46

No. But what I can tell you is that let's fight MIT. MIT said that 50% actually let's be precise like they are 44% of the 21.5% inflation we saw during the Biden years came from the Biden deficit.

L

Lloyd Doggett4:17:01

No, but I'm asking you, do you think the deficits that were created by the big beautiful bill are causing interest rates to stay artificially high? Yes or no? That's simple. I'm out of time. Come on.

S

Scott Bessent4:17:09

No, Congressman, we had a fiscal contraction last year. So, the deficit went down.

L

Lloyd Doggett4:17:15

So, I you should... Okay. I'm just going to argue, Mr. Secretary, I'm just going to argue, Mr. Secretary that prices are up, gas prices are up, grocery prices are up, energy prices are up, health care prices are up, interest rates are high, all specifically related to the policies of this administration. Mr. Secretary, thank you again for your service. I really appreciate it.

S

Scott Bessent4:17:36

Good to see you, Congressman. I want to invite you to South Carolina to see all your former constituents.

U

Unknown4:17:41

Mr. Secretary. Being a cattle farmer, I would say that the reason why the beef prices are high is the result of a very reduced herd. We don't have as many cattle today as what we had decades ago. I know everyone keeps talking about beef prices around here, but it's a simple fact that we've had droughts and people had to sell their herd to be slaughtered and say that they no longer have the reproduction status quo and that is why the beef prices are high regardless of what anyone wants to say. With that, Mr. Secretary, thank you for being here with us today. Thank you for the over four hours. Please be advised that members have two weeks to submit written questions to be answered later in writing. Those questions and your answers will be made part of the formal hearing record. With that, the committee stands adjourned.

a car. Republicans targeted tax relief to the Americans whose paychecks were stretched thin by Democrat inflation.

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About Scott Bessent