CEOInterviews.AIFULL HEARING: U.S. Treasury Secretary Scott Bessent Faces Senators in Heated Budget Clash

C

Crapo0:00

Over $320 billion was refunded to taxpayers, an 18% increase from the last filing season with an average refund of nearly $3,300, more than an 11% increase on average. Many working-class Americans who owed money when filing in prior years instead received a refund this year because of the working families tax cuts. Treasury's initial guidance has also helped business provisions like full expensing for equipment and factories to drive domestic investment, productivity, and wages higher. Nearly 26 million small businesses now have increased confidence thanks to a permanent pro-growth 20% tax deduction that is estimated to create 1.2 million jobs annually and boost small business GDP by 70 to 75 billion dollars over the next decade. The permanent restoration of full expensing for US research and development will support domestic innovation and growth. Implementing the new provisions proceeded smoothly for tens of millions of Americans in the 2026 filing season. Regarding IRS modernization, Ranking Member Widen and I released the Taxpayer Assistance and Service Act, a bipartisan bill focused on modernizing the IRS, improving taxpayer experience, and strengthening taxpayer rights. I look forward to advancing this legislation and also establishing clear tax rules for digital assets. Mr. Secretary, we are very glad to have you with us today, and I turn to the ranking member for his opening statement.

W

Widen3:41

Thank you very much. Mr. Chairman, there is lots to work on. This hearing is the first opportunity to examine the settlement of Trump's ridiculous IRS lawsuit. Trump sued his own administration for $10 billion over a tax return leak that happened on his watch. A judge was ready to toss the lawsuit, so Trump rushed a settlement for personal gain. The acting attorney general said the $1.8 billion insurrection slush fund is not moving forward, but the part that directly benefits Trump remains: Todd Blanch let Trump off the hook for potentially hundreds of millions in back taxes and canceled a long-running IRS dispute, and let the entire Trump family and organization off the hook for any past tax crimes. As of now, every American is subject to audit except the Trump family. Two former IRS commissioners confirm this is without precedent. Secretary Bessent owes an explanation, as Treasury was involved from beginning to end. This abuse of the IRS goes beyond anything I have seen. Last week, Secretary Bessent said the extra gasoline cost from the Iran war was less than $200 and dismissed concerns. And Trump said he doesn't think about Americans' financial situation. This administration is out of touch. There is also a cover-up of Epstein's financial records. Secretary Bessent is preventing access. The machinery of government works to benefit Donald Trump above all else.

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Crapo10:21

Thank you, Senator Widen. Secretary Bessent, you may make your opening statement.

Could you pull the microphone a little bit closer? Sure.

B

Bessent10:49

Chairman Crapo, Ranking Member Widen, and members of the committee, thank you for convening today's hearing. I last appeared before this committee just before the Senate passed the working families tax cuts. This filing season, over 62 million tax returns claimed at least one of President Trump's new tax cuts: no tax on tips, no tax on overtime, deductibility of American car loan interest, and enhanced deduction for low- and middle-income seniors. The average refund increased by over 11%, with refunds up 18%. This legislation prevented the largest tax hike in history—over $5 trillion. Instead, we have better tax days. President Trump's pro-growth policies also include Trump accounts, which now have nearly 6 million accounts opened, with 1.4 million eligible for the thousand-dollar seed contribution. On trade, the goods trade deficit declined by approximately $370 billion, and the economy added 313,000 net private sector jobs and 13,000 manufacturing jobs in the past two months. Capital expenditures rose at an annual rate of over 17%. Our deregulatory efforts generated more savings last year than the entire prior Trump administration combined. Thank you for your partnership. And I want to add that Senator Widen has menacingly slandered the Treasury Department in an attempt to cover up his son's investment meeting with Jeffrey Epstein to ask for funding.

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Widen15:33

Mr. Chairman.

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Crapo15:34

Yes.

W

Widen15:36

Let's be clear here. Nobody is interested in the ramblings of a capo in the most corrupt regime in American history. We want facts about this deal.

C

Crapo15:50

Well, thank you. I will ask my questions first today.

B

Bessent15:54

And we would like to hear what Adam Widen and Jeffrey Epstein talked about. Your son's largest investment position was Rick's Cabaret. So, did your son and Jeffrey Epstein talk about pole dancing as he begged him for money using your limited credibility?

W

Widen16:14

Should I just proceed?

C

Crapo16:16

I'm going to proceed with my questions. Mr. Secretary, regarding the settlement agreement between the president and the IRS over the leak of his tax returns: the Department of Justice announced it would abide by the district court's ruling on the anti-weaponization fund, and Acting Attorney General Todd Blanch said we are not moving forward with the fund. With respect to other parts, what can you share about Treasury and the IRS's role? Specifically, since IRS CEO Frank Bizano signed the settlement, what can you share about his role?

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Bessent17:26

Thank you, Mr. Chairman. Treasury is following the direction of the Department of Justice. Acting Attorney General Todd Blanch testified that the government will not move forward with the fund, and we intend to comply. I have no additional details; this matter is subject to ongoing litigation. Treasury and IRS were represented by the Justice Department, so further questions should be addressed to DOJ and Acting Attorney General Todd Blanch.

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Crapo18:18

All right. Thank you. With regard to the working families tax cuts, affordability remains top of mind. Last summer, Republicans prevented the largest tax increase in history and delivered pro-growth tax relief. Can you talk about Treasury's work to implement this relief and which parts are most helpful for affordability?

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Bessent18:55

Thank you, Senator. Since the working families tax cut passed on July 4th, I describe the benefits as a barbell. On one side, immediate expensing of capital goods and factories has led to more jobs. On the other side, President Trump's signature policies—no tax on tips, no tax on overtime, reduced taxes on Social Security, and deductibility of American-made car loans—have helped. 99% of filers claiming these deductions had incomes under $200,000, and 90% under $100,000. We saw record refunds, and many people who paid substantial amounts last year received large refunds this year. Importantly, small businesses now have certainty for planning.

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Crapo19:34

Thank you. The Senate Finance Committee is engaged in productive bipartisan discussions on digital asset taxation. There is an increasing need for durable rules that provide certainty, support innovation, and keep the US competitive. Does Treasury support comprehensive digital asset taxation? What are the risks of continued inaction?

B

Bessent19:57

Since President Trump's executive order, Treasury has been working tirelessly on digital assets. Congress passed stablecoin legislation—the Clarity Act—which I encourage everyone to support. It brings US best practices onshore and cements the US as the innovation capital of the world in custody and beyond.

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Crapo21:34

Thank you. My time is expired. Senator Widen.

W

Widen21:41

Thank you, Mr. Chairman. Secretary, yesterday acting attorney general Todd Blanch said the slush fund is not moving forward, but there's no indication on the Trump audit immunity. Does the IRS audit immunity for Trump, his family, and his businesses still stand? I want a yes or no.

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Bessent22:11

You can ask me a question. You can tell me how to answer it.

W

Widen22:15

I have five minutes. I'll use them.

B

Bessent22:20

As I said, unable to comment on ongoing litigation.

W

Widen22:28

Okay. This immunity deal is the biggest scam against taxpayers in American history. Who originated the May 19th addendum cancelling Trump's audits—Trump, DOJ, or Treasury?

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Bessent22:54

As Albert Einstein said, doing the same thing expecting a different answer is the definition of insanity.

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Widen23:02

You've given no answers. Does the DOJ have authority to settle a tax dispute unilaterally?

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Bessent23:13

The DOJ acts as attorney for Treasury and the IRS.

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Widen23:18

The tax code says DOJ can only settle if you first defer the dispute. In this case, unless you referred every one of Trump's tax returns to DOJ, the addendum is invalid. Career IRS attorneys wrote a 25-page memo recommending dismissal of Trump's lawsuit. Did you see that memo?

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Bessent24:12

Again, there is continuing litigation and I cannot answer.

W

Widen24:18

Will you provide the committee a copy of that memo?

B

Bessent24:24

Again, continuing litigation.

W

Widen24:28

Mr. Chairman, I ask you to authorize a 6103 waiver and for the secretary to waive attorney-client privilege.

C

Crapo24:42

I will not ask him to waive privilege. We will get to the bottom of this in a bipartisan way. The Biden administration prosecuted Charles Littlejohn, who leaked Trump's tax returns. Three days before Trump filed his lawsuit, you canceled Booze Allen's contracts. Did you know in advance Trump would sue?

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Bessent25:25

I did not.

C

Crapo25:27

Will you send the committee records documenting this decision?

B

Bessent25:42

Again, ongoing litigation. Senator, how he got here was a violation of President Trump's 6103 rights. 400,000 tax returns were leaked by Littlejohn, and the Biden administration only prosecuted him on two counts, not three.

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Widen26:15

We need a 6103 waiver to investigate properly. This settlement is the most brazen abuse of power in history. Every American is subject to audit except Donald Trump and his family. You cleared the way by canceling contracts. I suspect people at the highest level of Treasury crafted this corrupt gift.

C

Crapo27:29

Senator Grassley. I want to commend the department for protecting the integrity of the conservation easement deduction by holding abusive syndicated easements accountable. These transactions relied on inflated appraisals to save $2 in taxes for every $1 spent. They perverted a charitable deduction. I encourage you and the IRS to stand by recent settlement offers.

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Bessent29:07

Good. Thank you, Senator. In 1981, with growing deficits and inflation, Paul Volcker advised Congress to cut spending and pursue growth policies. The working families tax cut law followed that approach, reducing spending by over $1 trillion while making permanent provisions like full expensing for factories and R&D.

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Grassley30:03

How important has the working family tax law been for economic growth, job creation, and wage growth?

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Bessent30:11

It has been essential. For four quarters, the US economy has grown at 2.6%, despite the Democratic government shutdown and the Iran conflict. On the household side, almost 50% of returns included one of the president's signature policies. On the business side, immediate expensing and 100% R&D expensing provide certainty that allows businesses to plan, hire, and invest. This capital stock increases productivity and real standards of living.

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Grassley31:26

Sir, this will be my last question. You've been a proponent of targeting annual deficits of 3% of GDP. Under Biden we had 6.2% and 6.3%; in 2025, under Trump, it was 5.8%. How does the president's budget and deregulatory agenda get us down to 3%?

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Bessent32:10

We do not have a collections problem; we have a spending problem and a growth problem. By constraining spending and growing the economy, we can pay down debt and get back to a 3% target by the end of President Trump's term.

C

Crapo32:38

Thank you. Senator Warner.

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Warner32:41

Secretary Bessent, yesterday the administration put Bill Pulte as acting director of national intelligence while he remains head of FHFA. Does Mr. Pulte even have a security clearance? Isn’t FHFA a full-time job? The idea of moonlighting as DNI seems insulting to the intelligence community. How would you describe his temperament?

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Bessent34:16

I spoke with Director Pulte yesterday, congratulated him, and look forward to working with him on FHFA matters. Many teams squabble in the locker room and go out on the field.

W

Warner34:55

He has a record of not respecting confidential information and weaponizing mortgage information. Giving him the keys to classified secrets is an embarrassment. On agentic AI, do we need a strong fiduciary regime? The president’s executive order is voluntary.

B

Bessent36:20

The president’s executive order strikes a good balance between innovation and safety. I’ve met with large language model labs and the largest banks; they are setting strong standards. The rest of industry can learn from them.

W

Warner37:01

I believe a voluntary regime is insufficient and will put our banking and national security at risk. We also need to get CDFI money out. 32 senators have asked; it’s sitting there.

B

Bessent37:59

We have gotten out what was allocated. OMB did not apportion until April 8th, and we are getting the funding out.

C

Crapo38:15

Senator Scott.

S

Scott38:16

Secretary, thank you for being here. Your team has been fantastic on housing issues. I want an update on the Bitcoin strategic reserve established by President Trump’s executive order. Economic security is national security.

B

Bessent39:41

Economic security is national security. I gave a speech at the Reagan Library on that. Under President Trump, we are moving forward quickly on digital assets. The strategic Bitcoin reserve is new ground; we are proceeding with all deliberate speed and best practices. I look forward to the Clarity Act passing this summer.

S

Scott40:33

President Trump signed an executive order on IRA accounts for workers without employer-sponsored plans. Do you have a timeline for Trump accounts 2.0?

B

Bessent41:06

Trump accounts launch on July 4th, go live July 6th. After that, we will focus on IRA accounts.

S

Scott41:28

Great. On opportunity zones, can you update us on streamlining the nomination process and best practices for governors?

B

Bessent42:44

Every Democrat voted against opportunity zones. This bill expanded rural opportunity zones. Treasury is engaging with state officials to provide transition guidance so investors can keep putting capital into communities that need it most.

C

Crapo43:30

Thank you. Senator Hassan.

H

Hassan43:51

Good morning, Secretary. The Treasury Inspector General said moving up business filing deadlines could prevent a billion dollars in fraud. Will you work on a bipartisan basis to advance this proposal to stop identity theft and fraud?

B

Bessent44:36

We look forward to working with both sides on that.

H

Hassan44:40

On the settlement, the acting attorney general said the slush fund is off the table, but the grant of tax immunity for the president and his family still stands. This sweetheart deal could cost at least a hundred million dollars. Secretary, President Trump said he does not think about Americans' financial situation. Do you think about their financial situation?

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Bessent45:54

I do. And as the ranking member distorted my statement, I prefaced that these are challenging times and the average household has paid about $200 more in gasoline. We think about this every day.

H

Hassan46:16

Do you think your boss should think about it too? He said, 'I don't think about Americans' financial situation.' Are you telling him the truth about increased costs?

B

Bessent46:51

I have to disagree. Groceries are going down. Since President Trump took office, food at home is up 2.5%, half the annual rate under Biden.

H

Hassan47:07

When’s the last time you were in a grocery store? Granite Staters have paid $3,000 more since Trump took office, and the country lost 100,000 manufacturing jobs in 2025. Neither you nor the president acknowledge the pain. The administration claims lowering costs is top priority, but Trump requests a billion-dollar ballroom, spent $45 million on a military parade, proposes a $100 million arch, and now a $250 bill with his face. How does that lower costs?

B

Bessent49:15

Senator, you are incorrect. There is no cost to the American people for a new bill. The ballroom’s decorative part is privately funded. The parade goes on outside my office every day; it matters for national security.

H

Hassan49:48

That’s ridiculous.

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Crapo49:55

Senator Johnson.

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Johnson49:56

Mr. Secretary, I don’t recall Democrats being exercised about $5 gas and 9% inflation in 2022. Pyromaniacs like fire. Since President Trump took office, food at home increased 2.5%, moving toward the Fed’s 2% target. We haven’t heard an apology for the massive fraud. GAO estimates $250 billion annual fraud; LexisNexis says about a trillion. What is your estimate?

B

Bessent51:52

At least $500 billion, sir.

S

Scott51:57

Again, this is a range of somewhere between 3.3 and 13.3% of our budget.

A recent story I heard on the radio this morning of a fraudster in California, in one year from May 22nd to April 2023, made $270 million in claims. He was paid $178 million in fraud in California out of Medicaid. Do you have any idea how much of that $178 million was recovered?

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Bessent52:33

Sir, what I can tell you is once the money goes out the door, it's very difficult to recover. The best way to prevent the fraud is to prevent it before it goes out the door. And Senator, I will tell you the other heartbreaking part of this is I did a roundtable in greater Minneapolis, and there were several owners of autism clinics there, valid clinics, who are having trouble getting funded and they are doing the right thing for these families and for those children.

S

Scott53:03

Right, so the fraud prevents the money going to the people who truly need it, that it's really intended for.

B

Bessent53:09

And that's my point. The Department of Justice publishes their list of indictments and prosecutions. About $4.7 billion is being prosecuted out of a total of somewhere between $250 billion and $1 trillion in fraud. So I know Dr. Oz suspended payments to 400 hospice centers in California. Los Angeles has a third of all hospice centers. They suspended payment to 400, and not one of them complained. Why wouldn't one of those 400 hospice centers not complain about losing their funding?

Again, Senator, we can speculate that it's fraudulent. And the key here, Senator, is transparency. We need to be able to see where this money is going. For everything that went on in Minneapolis and Minnesota, there was transparency. There was a list of the learning centers. You were able to see how much they received, the address, the people.

S

Scott54:17

But Democrat government officials ignored that transparency. It was right there, they had access to it, they ignored it.

B

Bessent54:23

Well, they ignored that. But in many states like New York State, Illinois, they refuse any level of transparency. I believe that's true of the governor of Wisconsin as well, refusing to turn over records on some of the welfare benefits of Wisconsin.

S

Scott54:37

This should be a bipartisan issue, sir.

B

Bessent54:40

So what can you do to prevent it? I mean, Dr. Oz obviously just suspended payments. I'd imagine you're somewhat limited there. I know Vice President Vance has got a fraud task force. We've got to get our arms around this and we're not going to get any help from the other side of the aisle. So it's going to have to be done through executive action. What can you actually do?

We are supporting Vice President Vance in this task force. There has been a new assistant attorney general appointed to do this, and this is an all-of-government effort by the Trump administration.

S

Scott55:15

Well, we wish you luck. This is crucial. Thank you, Mr. Chairman.

B

Bessent55:18

Thank you, Senator.

W

Whitehouse55:22

Thanks very much, Secretary. Welcome. Have you identified any precedent in Treasury or IRS history for the agreement not to audit, investigate, or pursue any tax claims against the Trump family or businesses?

B

Bessent55:52

I can't identify any precedent where 400,000 tax returns including the people you just mentioned and all of their employees were leaked in a violation of the most sacred duties of the IRS.

W

Whitehouse56:09

Let me cut to that then.

B

Bessent56:11

The leak was by a contractor.

W

Whitehouse56:14

Can you tell me what contribution is being sought by Treasury or by the IRS for the harm done by the contractor? To a certain extent, your organization and the IRS are the victim of the contractor's malfeasance or negligence. What is being pursued by way of contribution by that contractor?

B

Bessent56:37

Well, the ranking member chastised me for cutting the contractor's contracts off, and we have removed their contracts, their ability to do business with Treasury and the IRS.

W

Whitehouse56:51

But there is no contribution into this particular case?

B

Bessent56:57

Again, Senator, you weren't here earlier, but I'm unable to discuss most of this because of ongoing litigation.

W

Whitehouse57:03

Yeah, I know you, like everybody, likes to say that.

B

Bessent57:07

We like to follow the law, Senator.

W

Whitehouse57:10

The law is that Congress has constitutional oversight functions that do not disappear simply because there is litigation, however convenient it may be by way of providing answers. So we have no precedent for it. No contribution is being sought from the contractor at fault. Was there any consideration to the government in return for the benefits of no audit, no investigation, no challenge or pursuit of refunds or other penalties?

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Bessent57:51

Again, Senator, I'm unable to comment because of litigation. Treasury is represented by the Department of Justice in all matters. They act as our attorneys. So I would suggest that you direct your questions to Acting Attorney General Blanch.

W

Whitehouse58:07

Yeah, well, I've had a lot of times people who are before us invite me to ask my questions of somebody who's not before us, but you're the one who is before us. And I think you ought to know if there was any consideration offered or paid in return for that settlement. It's a very simple fact question. Was there or was there not consideration?

B

Bessent58:32

Again, there's ongoing litigation, and I suggest that you speak with the Treasury attorneys.

W

Whitehouse58:38

If this kind of behavior is okay with the chairman, I'll just pursue other questions. But you know, what goes around comes around in terms of dodging questions.

G

Grassley58:50

I believe it's very clear that witnesses of any kind cannot discuss ongoing litigation. They can certainly discuss a fact that they are aware of. The fact that there is some litigation out there doesn't mean that a witness can't say, 'Yeah, there was no consideration,' or 'Yes, there was consideration.' Was there a defense analysis memo? It's referenced in the judge's decision in Florida. Was there a defense analysis memo prepared by the IRS? And more specifically, did you see it?

B

Bessent59:27

Again, I'm not going to be able to comment on these matters.

G

Grassley59:34

Mr. Chairman, this just makes no sense at all. I've been a lawyer all my life. I have some idea of what is protected when you have ongoing litigation. Whether this individual has seen an official memo from within his own department is a very simple question to answer, and I think it's completely inappropriate to have this game of dodge be pursued without any consequences. Well, last of all, here's another question. Was there any analysis of what harm befell President Trump from having his taxes released when every president since Nixon released their taxes, and he had promised to? Did anybody analyze whether there was actually any harm at all to him in those circumstances?

B

Bessent1:00:43

There was a crime. The president's rights under 6103 of the IRS code was violated, and equally as important, 400,000 taxpayers had that right violated, including every employee of the Trump administration, the housekeepers at DEA, the greenskeepers, the cashiers.

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Grassley1:01:04

You're welcome to all of that, but it doesn't answer the question of whether the president actually suffered harm, and you're not answering that question either.

C

Crapo1:01:16

Senator Cortez Masto.

C

Cortez Masto1:01:20

Welcome, Secretary Bessent. Let me ask you this on a separate subject. Federal law prohibits the image of a living person from appearing on US currency, and that includes the President of the United States. Isn't that correct?

B

Bessent1:01:37

That is correct, Senator.

C

Cortez Masto1:01:39

Thank you. There's reporting that your US Treasurer, Brandon Beach, and his senior adviser, Mike Brown, have been repeatedly urging staff at the Bureau of Engraving and Printing to prepare prototypes of a $250 bill with President Donald Trump's face on it. And in fact, in August and September, Beach provided bureau staff with mockup designs for the note, including one that shows President Donald Trump's face in the center of the $250 bill between the signatures of the president and your signature. It is also reported that the artist who said he designed the mockup told the Post that he had spoken with Trump about it. Is it true that your staff is pursuing a mockup of this bill with President Trump's face on it?

B

Bessent1:02:28

That was in coordination with pending legislation in the Congress to change the requirement that a person must be deceased to be on the currency.

C

Cortez Masto1:02:41

So you're acting before legislation has even passed to authorize it. Is that correct?

B

Bessent1:02:46

Just as we did with the Working Families Tax Cut, we were prepared in advance. At Treasury, we do things in advance. My predecessors seemed to scramble to do things at the last minute.

C

Cortez Masto1:02:57

If the law does not pass, do you intend to still move forward without the authorization from Congress?

B

Bessent1:03:04

Of course not. We will follow the law.

C

Cortez Masto1:03:06

Thank you. Let me ask you this question with respect to the agreement and the lawsuit settlement that a lot of my colleagues have been talking about shielding the president, his family, and corporations from any future audits. You are the acting IRS commissioner. Correct.

B

Bessent1:03:24

That is incorrect.

C

Cortez Masto1:03:24

What is your position right now with the IRS?

B

Bessent1:03:27

My term expired.

C

Cortez Masto1:03:28

So you have no position with the IRS whatsoever?

B

Bessent1:03:30

The IRS is a bureau that reports to Treasury. When there is no commissioner, those duties floated up to me.

C

Cortez Masto1:03:37

All right. So there's no interaction that you have right now or responsibility over the IRS other than the commissioner's there? The commissioner has free reign and you don't have any authority to stop anything?

B

Bessent1:03:50

No. There is no commissioner, so I assume those duties.

C

Cortez Masto1:03:54

So you're acting commissioner.

B

Bessent1:03:56

No, that's incorrect.

C

Cortez Masto1:03:57

Okay, so for purposes of the public, let's get it straight so the public knows your involvement. There is no commissioner.

B

Bessent1:04:03

There's somebody that is acting. I had previously been the acting commissioner. Senator Warren, who likes to send me a lot of letters, was kind enough to send me a letter.

C

Cortez Masto1:04:10

I'm just trying to figure out your role with the IRS for the purpose of the public and transparency. What is your role currently with the IRS in your authority?

B

Bessent1:04:20

I am performing the duties of the commissioner.

C

Cortez Masto1:04:23

Oh, okay. Got it. So let me ask you this because you talked about not only Donald Trump and his family, but there were 400,000 taxpayers' information that was also leaked by Mr. Littlejohn, the contractor working for the IRS. Do you intend to give them the same immunity as President Trump and his family received?

B

Bessent1:04:42

Again, you were not here at the beginning. I had a statement that I read to Chairman Crapo that I am unable to provide any additional details due to litigation.

C

Cortez Masto1:04:52

Well, that's not part of the litigation. The 400,000 taxpayers aren't part of the litigation. You have said there were 400,000 taxpayers' information that was also leaked. They're not part of that litigation. Do you intend to give them the same immunity that you gave Donald Trump and his family and corporations that were part of the litigation?

B

Bessent1:05:12

Senator, you may have missed the first part of this, but Treasury does not give any of that. We are represented by the Justice Department.

C

Cortez Masto1:05:21

That's right. You're the acting commissioner. As acting commissioner, you had said earlier you had concerns about those 400,000 taxpayers whose documents were leaked by an independent contractor with the IRS. If you have concerns about those 400,000, do you intend as acting, or whatever role it is you have as the IRS commissioner, do you intend to give them the same type of treatment?

B

Bessent1:05:46

We will follow the instructions and the settlement.

C

Cortez Masto1:05:50

That was not part of the settlement.

B

Bessent1:05:53

That was not part of the settlement. Clearly we will follow.

C

Cortez Masto1:05:56

Let me just say that was not part of the settlement. It's been very clear you're dodging this and you're trying to use it as an excuse. It's just outrageous on behalf of the American public.

B

Bessent1:06:06

And I will follow the law as an excuse, Senator.

C

Cortez Masto1:06:08

When you were going through your confirmation process, you stated that your goal was to get the federal budget deficit to 3% of GDP by the end of President Trump's term. However, in the administration's budget proposal for this year, it projects a deficit of over 5% of GDP by 2029. Do you no longer intend to achieve that 3% goal?

B

Bessent1:06:29

I do. I said something with a three in front of it, and we in fact had a fiscal contraction last year, so we are already in the five range.

C

Cortez Masto1:06:42

You said something with a three in front of it. All right. I appreciate you being here.

C

Crapo1:06:47

Senator Young.

Y

Young1:06:49

Secretary Bessent, great to have you here today. You and I have discussed shipbuilding in the past and the importance of shipbuilding. I've seen you recently offer your thoughts about the importance of this issue and the importance of rebuilding our shipbuilding enterprise here in the United States. The president has also spoken quite forcefully about the threats associated with having a shipbuilding enterprise that is weak and unable to produce enough ships for the needs of our nation. In fact, his executive order on restoring America's maritime dominance and his subsequent maritime action plan highlighted with some specificity the challenges and the opportunities that we face. So I'm grateful for his leadership, grateful for yours. We know China has invested heavily in this industry. They of course have a centrally planned economy and they've overinvested in their capacity. I've been briefed that China can actually build over a thousand oceangoing vessels in a year. The United States built one last year, one oceangoing commercial vessel. For those who are skeptical of industrial policy, and I think that's a healthy skepticism, there's a reason we don't have a centrally planned economy. But from time to time, you need to deviate from the catechism. Adam Smith himself, the father of free market economics, identified shipbuilding as the one industry that a maritime nation cannot be allowed to have offshore. So you and several other members of the cabinet, Mr. Secretary, have highlighted this need to restore our maritime industrial base. But we know we can't do it without giving the president of the United States additional authorities and resources he needs. That is why Congress in a bipartisan way needs to pass the Ships for America Act and pass it now. Mr. Secretary, how are you thinking about these issues and do I have your commitment to work with Congress to start building ships in America again?

B

Bessent1:09:11

Senator, as you know, President Trump signed an executive order to restore US maritime capacity. I gave a speech at the Reagan Library on Friday where I talked about the critical industries that we needed to reshore, and top of mind there was the shipbuilding industry. And as important as the industry is, the reservoir of knowledge that we have should we get into a great power conflict.

Y

Young1:09:35

That's exactly it. We haven't, because of cheerful scenario planning, thought through how we're going to repair all our Navy vessels and, if necessary, build new Navy vessels in a time of long war scenario. A long war is a war that might exceed just a couple of months. So it's an acute issue. I agree with you, Mr. Secretary.

B

Bessent1:09:58

Senator, we look forward to working with you to connect industrial capacity, logistics, resilience, and we want to work with you and your team toward this end.

Y

Young1:10:08

That's highly encouraging. I'll take you up on that, sir. I'm going to pivot very quickly to China's advantage as it relates to critical minerals, not just as it relates to the supply, but they've come up with a way to manipulate our markets. They shape prices, they restrict exports, they absorb losses, they create all this uncertainty that keeps private capital from financing US or allied critical minerals projects. And I've come up with a solution to help address this. We call it the Secure Minerals Act. Mr. Secretary, it's designed to create a strategic resilience reserve. This would be a government corporation and it would employ tools like loans, acquisitions, non-recourse lending, advanced market commitments, contracts for differences, and partner country co-investment. The goal is of course not to compete with or replace private capital, it's to create enough price stability and demand certainty to build domestic and trusted partner capacity. We want people investing in processing and digging new mines and all the rest. So Mr. Secretary, as the administration considers tariffs on processed critical minerals and derivative products, my question is: should those tariffs be paired with a financing mechanism like the strategic resilience reserve to make the capacity we need commercially viable?

B

Bessent1:11:56

Sir, through EXIM Bank we are working on Project Vault to do much of what you are talking about, and it is critical to have critical minerals. And as you said, the predatory pricing that China has done for 25-30 years, just like in shipbuilding, critical minerals is one of the key industries that we're focused on.

Y

Young1:12:17

My hope would be that I can work with you to give more legal certainty to that very important Project Vault you're working on, so that after the Trump administration leaves, which will be in a couple of years, there can be a legacy of enduring law and operations so that we've addressed this challenge related to our critical minerals vulnerability. Might I work with you on that effort?

B

Bessent1:12:40

We look forward to working with you, Senator. It is a priority for this administration and for Treasury and indeed for myself.

Y

Young1:12:48

Thank you, Mr. Secretary.

O

Operator1:12:58

Senator Daines.

D

Daines1:13:10

Mr. Chairman, thank you. Secretary Bessent, it's good to have you here this morning.

B

Bessent1:13:15

Good to see you, Senator.

D

Daines1:13:16

Grateful for all you are doing. A steady hand of wisdom there in the West Wing as you are working and solving some of the difficult challenges we face as a nation. So thanks for your service and appreciate you being here today. And I want to start by emphasizing how pleased I was when I saw the IRS's settlement offer for taxpayers involved with conservation easement tax disputes. For years I've been sounding the alarm here on Capitol Hill on the abusive syndicated conservation easements falsely claiming a charitable donation solely to turn a profit. And I'm an avid outdoorsman, a guy from Montana. Protecting our farmers and ranchers and championing conservation is one of my biggest priorities as I represent the state of Montana here the past 13 years. I know this is a shared priority for you and this administration, which is why I commend you for your help in implementing and enforcing this settlement. So it's a thank you.

B

Bessent1:14:20

Good. Thank you.

D

Daines1:14:20

I also want to thank you for your hard work as we worked together over much of the last year on the Working Family Tax Cuts Act that was passed and signed into law. We're seeing some great results in Montana. In fact, Montana received an average nearly $3,600 tax cut on their tax return this year, and about 105,000 Montana small businesses will benefit from permanent tax relief through that 20% pass-through deduction. And we know the pass-through side of the equation actually supports more jobs than the corporate side. So we did something here that's going to be helpful to create more jobs and importantly job growth and income growth here for so many American people.

B

Bessent1:15:10

Senator, I have very clear recollection of you in the cabinet room expressing to myself, White House staff, and the President the need for permanence. So I think that will be one of your great lasting achievements once you retire.

D

Daines1:15:27

Well, Secretary Bessent, thank you. I know we both knew that permanence was an important part of the equation to remove the uncertainty that's oftentimes found in the tax code with expiring tax provisions. And there's enough uncertainty on Capitol Hill sadly that happens because of whether it's overreach and regulations or uncertain taxes. But to take that off the table I think was one of the great achievements that we faced. But thank you for your kind words. I do think that we're going to see the benefits of this bill for many years to come. On Capitol Hill, anytime we pass something that's 800 pages plus in length, usually the more you dig into something, the worse it gets. Oftentimes with big pork barrel spending bills. In this case, the more you dig into that Working Family Tax Cut bill, the better it gets.

B

Bessent1:16:18

Sir, the statistics are unbelievable. We saw at the IRS that 61 million filers filed for at least one of the signature policies. And we are seeing an industrial renaissance because of the immediate expensing for equipment, factories, and farm structures.

D

Daines1:16:41

Well, it's music to our ears. It's what we predicted would happen. You put that kind of incentive structure in place. And I also believe as we think about our China strategy, having that 100% expensing in the R&D investment to incentivize innovation will be another lasting legacy from what we accomplished together over the course of last year. I'd like just to ask you an open-ended question around how passing that largest tax cut, or set another way, preventing the largest tax increase in American history, and making it permanent, is that making the American taxpayer better off?

B

Bessent1:17:23

Sir, I believe that, as you said, giving great certainty whether it's to households, small business, or large business, that provides for them to create capital stock, capital spending, and increase productivity. And increased productivity is what leads to higher standards of living across the country.

D

Daines1:17:49

Last question I have is on digital assets. Digital assets have moved from the margins now more to the mainstream. It's been clear that our tax code hasn't kept up. We bear that responsibility now to put a tax structure in place. I'm taking the lead here in the Finance Committee. That's why we've been developing a framework that could give us clearer rules for digital asset taxation. Following the passage of the GENIUS Act, digital assets are becoming more integrated in our financial system and I believe are going to play a growing role in our economy and the potential to keep driving investment in the United States. The numbers speak for themselves. The total crypto market cap reached $4 trillion for the first time in history. Stablecoin transaction volume was $33 trillion, a 72% increase from 2024. The number of crypto mobile wallet users reached an all-time high, up 20% from last year. I do believe it's important that we provide some clarity as it relates to tax, and that's our responsibility here that I'm working on at the moment.

C

Crapo1:19:02

The time of the gentleman is expired.

D

Daines1:19:05

Could I finish one final question if I could? Secretary Bessent, as the administration continues its work in digital assets, will you commit to working with Congress on implementing digital asset taxation legislation?

B

Bessent1:19:24

I will commit to that. And tax certainty, as we've seen with every other industry, is the key to innovation.

D

Daines1:19:31

Great. Secretary, thank you.

C

Crapo1:19:33

Time of the gentleman's expired. The chairman's return. Senator Smith.

S

Smith1:19:37

Thank you, Mr. Chair and Ranking Member, and welcome to the committee, Secretary Bessent. So, though I've not been in the room, we have this thing called closed circuit television in the Congress. So I've been able to watch the hearing in my office. Many of my colleagues have tried to get at this so-called anti-weaponization fund that was created in a settlement with the president after he sued his own IRS for $10 billion that includes this provision that bars the IRS from auditing or taking any enforcement action on any of the president's tax returns or those of his family. And I understand you've repeated many times that you cannot respond to this because of ongoing litigation. I want to just associate myself with the points that Senator Whitehouse made, which is that I don't quite understand how we're able to do our oversight responsibilities if we can't ask any questions when anything is even in the vicinity of ongoing litigation. So let me see if I can ask a question that I don't think has anything to do with the ongoing litigation. My first question is this: Secretary Bessent, did Brian Moresy, your former general counsel, ever raise concerns over the establishment of the anti-weaponization fund before he left his position, before he resigned?

B

Bessent1:21:00

Again, that's attorney-client privilege, Senator.

S

Smith1:21:04

Pardon me?

B

Bessent1:21:05

That would have been a privileged conversation.

S

Smith1:21:07

Well, let me ask this. Does Treasury agree with the Justice Department in thinking that the court decision blocking payments out of the slush fund was incorrectly decided?

B

Bessent1:21:19

Again, we do not have agency in this. We defer to the Department of Justice, the acting attorneys, and they represent us. So you should refer any of those questions to Acting Attorney General Blanch.

S

Smith1:21:37

Okay, I'm going to come back to that. But do you at least commit to following any and all court decisions regarding the establishment or the administration of this slush fund? Do you see those court decisions as legitimate that you would follow?

B

Bessent1:21:49

We follow the law.

S

Smith1:21:51

You follow the law. So that would mean that you would follow a court decision. You wouldn't have your own opinion about what the law is. You would follow the decision of the court. Am I understanding you correctly?

B

Bessent1:22:00

We will always follow the law.

S

Smith1:22:03

You'll follow the decision of the court.

B

Bessent1:22:05

We will follow the law.

S

Smith1:22:06

That's not what I'm saying. You know, Mr. Secretary, you've said that Acting Attorney General Blanch is representing Treasury and the IRS here. Would you have any... I'm wondering, Mr. Chair, if maybe the committee should call Acting Attorney General Blanch to appear before our committee if Secretary Bessent is unwilling to answer any questions about the IRS, which as my colleague Senator Cortez Masto established, Secretary Bessent is overseeing. I don't expect a response to that, Mr. Chair, but I ask a question just reasonably. How are we going to find answers to these questions if we can't get them from the secretary?

B

Bessent1:22:47

As the secretary has said many times, exactly the attorney-client privilege and the relationship they have with the Justice Department prevents him from answering.

S

Smith1:22:54

So, Senator, you asked if I would follow the law on a court ruling. I am following the law here-

B

Bessent1:22:58

What I noted, Secretary Bessent, is you wouldn't say that you would follow the court and their interpretation of the law. You said you would follow the law, which is different as we know with this administration. But I have just a few minutes, a minute and a half left. I want to get actually to the farm economy. This is something that you and I have discussed many times starting when you first came into my office. You called yourself a soybean farmer. Though I think that Montana farmers would differentiate between wealthy land owners who rent their land versus people who actually do the farming. But I can tell you that in Minnesota, Mr. Secretary, a lot of farmers are really feeling the pain. According to the Farm Bureau, farm bankruptcies were up almost 50% this last year. Minnesota has the most farm bankruptcies in the country in the first quarter of 2026. And the Farm Bureau tells us that six out of 10 farmers are reporting declining financial situations. So it's rough out there. Fertilizer prices are up, diesel prices are up. Could you just explain to me and to farmers in Minnesota how those increased prices driven by the war in Iran are worth the pain that they are feeling right now?

Senator, do you believe that Iran can have a nuclear weapon?

S

Smith1:24:27

Mr. Secretary, this is my time to ask you the questions. How do you respond to Minnesota farmers who cannot afford the fertilizer they need?

B

Bessent1:24:36

Well, I think if you were to look in the dictionary, the definition of a farmer is someone who owns a farm and farms the land. And so as a former farmer, I will tell you that maybe you know that 75% of the fertilizer had already been purchased this year.

S

Smith1:24:54

That is not what my farmers in Minnesota are telling me, sir. They are telling me that they cannot afford their fertilizer and they know the reason why.

B

Bessent1:25:02

There is no doubt that farmers have been struggling. But much of that... there was a record crop last year, Senator. And what do record crops lead to?

S

Smith1:25:11

What my farmers are-

B

Bessent1:25:13

Lower prices.

S

Smith1:25:16

So I'm sure I will take that back. I will take that back to my producers in Minnesota that they have somebody in this Department of Treasury, a former farmer, who is feeling their pain. Thank you.

C

Crapo1:25:31

Senator Lankford.

L

Lankford1:25:33

Mr. Chairman, thank you. Mr. Secretary, thank you. You know, a year later after passing the Working Families Tax Cut Act, I have to tell you, it's been remarkable how fast Treasury has moved on implementation in a lot of the areas. We worked a lot together on things like full expensing and making that permanent and trying to get that established long-term. That makes an enormous difference for our farmers and ranchers that are trying to buy equipment right now to be able to do that expensing. Commodity prices are down, fertilizer prices are up. But I would tell you, fertilizer prices started spiking under the Biden administration, not in the past two weeks here and certainly not in the past two months. Gasoline prices now are what they were during the Biden administration in a spike, and there wasn't a war in Iran, and under the Biden administration we had 9% inflation during that time period. So there's been tremendous amount of growth in the economy here, which I appreciate your partnership on. We've also worked a lot on the charitable donation side of things, and I appreciate the substantiation requirement information that Treasury and IRS has put out that helps a lot of folks that are donating now to nonprofits. And the work that we've done together... there is still work to do on the donor advised funds. There were some Biden administration regulations that came out that were directly targeted at the donor advised funds that have caused real problems. Those are folks that are directly helping nonprofits and charities all over the country, but they're feeling some real pain from some additional changes in regulations. So I know this administration's been very aggressive at reviewing regulations and looking at it. I would only ask you to review as well the Biden administration regulations on donor advised funds, because that's directly taking money away from people that need it the most and folks that want to be able to help.

B

Bessent1:27:23

Senator, I will be happy to instruct our Office of Tax Policy to work with you and your staff on this. I know it's an important issue for you.

L

Lankford1:27:31

It is. Thank you. Look forward to that cooperation together to be able to look at it to be able to make sure the regulations work for every American. I want to talk a little bit about what you've done so far on the sanctions on drug smuggling and specifically targeting all these cartels that are in Mexico and in Central and South America and trying to go after that. You've seen some progress. Some new techniques have been done to target individuals and entities to try to limit the amount of smuggling. I want to just get an update from you. Dollars have been allocated. You've asked for additional dollars directly related to terrorism and drug smuggling cartels. This is a budget hearing. What's happened so far? Have those budget dollars previously been used? What are you asking for additional dollars for in that?

B

Bessent1:28:15

Senator, we have designated the Mexican cartels as foreign terrorist organizations. We have also put in effect on the US-Mexico border in certain counties what are called geographical targeting orders so that we can better identify problems in our banking system and money that is being laundered. This is a combination through FinCEN, the Financial Crimes Enforcement Network, and OFAC. If we use FinCEN to follow the money, then OFAC has been used to sanction... we sanctioned about this time last year two Mexican financial institutions that were riddled with drug money.

L

Lankford1:29:03

So you're doing the same thing to the shadow fleet that's out there moving Iranian oil and others as well. Give me an update on success dealing with that, targeting specific sanctions on Iranian illicit movement of oil and other goods they're trying to move.

B

Bessent1:29:20

We began with a maximum pressure campaign in March of 2025. We have continued that, and approximately seven or eight weeks ago, the president instructed me to take it up to the maximum. We call it Operation Economic Fury. The Iranians... one of the many mistakes they have made was targeting with missiles their Gulf neighbors. We have good partners in the Gulf, but many of them were not completely transparent with us what may or may not have been going on in their banking system. We have achieved a much greater level of transparency, and we have seized a substantial amount of crypto assets. We have sanctioned ships, and in fact the Navy has seized some of these ships, and we are tracking mostly the IRGC funds and we are freezing those for the day that they can be given back to the Iranian people.

L

Lankford1:30:20

Okay, I look forward to that. I know I just got a few seconds left. In Oklahoma, we had a massive influx of Chinese illegal aliens that had moved into our state, set up illegal grow operations for marijuana, and started shipping it literally all over the country. It was a tragic thing to watch what happened with the human trafficking, the labor trafficking, the sex trafficking that these Chinese individuals were doing in my state. Not only trying to purchase land and set up this operation, I want to be able to follow up with your team on ways we can work on following the money of illegal Chinese money coming in to buy American farmland and to also try to control operational locations near some of our sensitive sites. I know you're doing a significant amount of sanctions on drug issues and such, but I want to be able to just follow up on that.

B

Bessent1:31:11

We look forward to working with you on that, Senator.

L

Lankford1:31:13

Thank you.

W

Warren1:31:14

Thank you, Mr. Chairman. Secretary Bessent, let's start with something you and I agree strongly on. Last year, you came out in support of a trading ban for members of Congress, and I have introduced legislation to do exactly that. You explained the need for a ban on our trading stock by saying, quote, 'You look at some of these eyepopping returns, every hedge fund would be jealous of them,' and that quote, 'If any private citizen traded that way, the SEC would be knocking on their door.' Those are strong words from someone who used to run a hedge fund. Last month, President Trump's latest financial disclosures came out, and they show that he made more than 3,400 stock trades worth more than a quarter of a billion dollars in just the first three months of 2026. That's roughly half of what all 535 members of Congress made last year combined. And the value of virtually every one of those stocks that the president traded in is directly affected by President Trump's official actions. So Secretary Bessent, you and I agree that it is a conflict of interest for members of Congress to trade stocks. Do you also agree that it's a conflict of interest for President Trump to trade stocks?

B

Bessent1:32:46

Well, a couple of things, Senator. One, President Trump is not a senator sitting in the Oval Office engaging in a high frequency trading strategy. Clearly, he had an outside manager who was doing that. And I think it's incumbent upon both houses of Congress to get their house in order before you move to the administrative branch.

W

Warren1:33:09

You think it's okay for the president to do this? Because let's be clear, you are a Wall Street guy, so you know better. The investments that President Trump has made are not blind. President Trump literally signed the 113-page document publicly listing all of his individual stock trades at the same time that he is making decisions affecting those stocks. So you're going to sit here with a straight face and say it's not a conflict of interest for the president of the United States to do that?

B

Bessent1:33:41

I am going to say this body needs to get its house in order first.

W

Warren1:33:44

How about we get the White House in order at the same time?

B

Bessent1:33:47

I would encourage you to do that. Lead by example.

W

Warren1:33:49

I don't trade in individual stocks. I don't own any individual stocks. My house is in order. Secretary, others on this committee can't say that.

Let's look at some individual trades. On January 6th, Donald Trump purchased up to a million dollars worth of Nvidia stock. One week later, his administration changed US policy and loosened the rules on export controls so that Nvidia could sell its chips to China. Now the price of Nvidia stock is through the roof. So Secretary Bessent, you said last year if any private citizen traded the way members of Congress do, quote, 'The SEC would be knocking on their door.' So my question is, should the SEC be knocking on President Trump's door to start an investigation over this trade?

B

Bessent1:34:41

Again, if this body wants to ban individual stock trading, which I would advocate for yourselves, start there. And if you want legislative action to continue, that's your prerogative.

W

Warren1:34:54

So it's our prerogative. So you would support saying that President Trump should be investigated over this?

B

Bessent1:34:59

I would support... should be investigated? And President Trump would support you getting your house in order, Senator.

W

Warren1:35:07

And how about the White House getting its house in order to support that investigation?

B

Bessent1:35:11

Please lead by example.

W

Warren1:35:14

I would like to see the president of the United States lead by example. You say there should be an investigation when that kind of activity takes place. How about we start with the White House? You create one statute. The president bought tens of thousands of dollars worth of stock in Robin Hood and the Bank of New York Mellon, known as BNY. On April 6, your Treasury Department announced it had chosen the financial agent to implement the new Trump Accounts program: BNY and its partner Robin Hood. Both stocks of course have risen since then. So Secretary Bessent, let me ask you a different question. If these stock purchases that Trump made were made using inside information, would that be illegal?

B

Bessent1:36:02

Again, I'm not a lawyer, I'm not going to speak to that. And I think-

W

Warren1:36:06

Would it be worth investigating?

B

Bessent1:36:09

You don't have to be a lawyer. Why don't we investigate many people on this committee, Senator?

W

Warren1:36:15

Many people. And why don't we start? My house should have to follow the same set of rules that are already the law.

B

Bessent1:36:22

I think you should get your house in order here.

W

Warren1:36:25

My house is in order. Thank you, Mr. Secretary.

B

Bessent1:36:27

And you should have your fellow committee members, many on your side... I'll do the same.

W

Warren1:36:31

We need stronger anti-corruption rules and conflict of interest rules in Washington for everyone. And that includes the president and it includes Congress. And instead of draining the swamp, what Donald Trump is doing is he is enriching himself by taking advantage of his position. That is not public service. He's the one who should lead by example.

C

Crapo1:36:57

Senator Barasso.

B

Barasso1:36:58

Thanks, Mr. Chairman. Well, talking about draining the swamp... Look, I appreciate what you're doing, Mr. Secretary, because you inherited a very troubling record of misconduct in terms of the IRS politicization, and you moved quickly. You championed the efforts to turn that around. We saw under the Obama administration, the IRS spent years systematically targeting conservative nonprofit groups, Tea Party groups, faith-based organizations, Christians and conservatives. The Biden administration and their IRS continued that same pattern. I think a recent Department of Justice report noted the Biden IRS investigated churches based on what their pastors preached. We can go on and on about the Bible teachings that were typically affiliated with the Republican party. Those were being attacked by previous administrations. So this wasn't tax administration, this was government intimidation. The American people aren't standing for it. Can you tell us what the Treasury Department has done to ensure that something like this, that these targetings by the previous administration and the Obama administration, that these persecutions are going to stop?

B

Bessent1:38:02

Senator, thank you for the question. We are working to ensure that this will never happen again. Never happen again. It was an egregious example by the Biden administration, by the Biden Justice Department, by the Biden IRS, and going back to the Obama IRS. We have made it clear that 6103, which is taxpayer privacy, must be adhered to.

B

Barasso1:38:35

Thanks. You want to talk about the tax cuts we were able to pass last year and you were so helpful in our efforts to get the Working Families Tax Cuts bill passed. We see now with the tax returns this year, over 60 million Americans have claimed at least one of these Republican new tax cuts. No tax on tips, no tax on overtime, the senior deduction refunds are up. Paychecks are bigger. I think it's important for families to know all of the things that are in this legislation. You and I have talked about it, but I continue to travel as do other members around our home states and some people aren't aware of many of the things that are advantageous here. How is the Treasury Department ensuring that families across the country can access everything that this law has to offer them?

B

Bessent1:39:16

Sir, I have traveled across the country as have many people on my staff. We push out to members on both sides the benefits and the breadth and depth of the tax bill which was passed July 4th. We're on what I would call a carousel of pushing out the most important parts of the tax bill. For instance, on school choice, we are working actively with states, red states and blue states, to make sure that dollars can go into those states either for public, private, or additional tutoring.

B

Barasso1:39:59

I want to ask about an issue of retirement security because about 50 million Americans have no access to a workplace retirement plan. In Wyoming, that's about 65,000 independent truckers, contractors, ranchers, other self-employed individuals as we see all across the country. President Trump recently signed an executive order to try to change that. It directs you and Treasury to provide workers with access to low-cost retirement plans with matching federal contributions. Under your leadership, Treasury is working on legislative recommendations to build on this framework to help these individuals. What's your vision for helping close that retirement coverage gap?

B

Bessent1:40:37

We think that these IRAs for independent workers are very important. We are working to finish our guidance on the Trump Accounts to get those up and running by July 4th. Then we will be all hands on deck for this. As you said, the anxiety level for Americans in terms of retirement has never been higher.

building blocks for that and we are working to supplement that. And then a final question, and it's continuing the economic pressure on Iran. The president talks about maximum pressure. How does your budget help ensure that Treasury has the tools that you need to keep that economic pressure?

We have a dedicated staff that has done a fantastic job of outlining the black market and the flow of Iranian oil and energy around the globe. We have frozen assets. We are holding those and we have severely disrupted the Iranian economy and the Iranian war machine. We think that inflation may be over 200%. Their currency has collapsed. We believe that more than 50% of the army is not getting paid and the police are not reporting to the police station.

C

Crapo1:41:59

Thank you, Mr. Chairman.

Thank you, Senator Luhan.

U

Unknown1:42:03

Thank you, Mr. Chairman. Secretary Bessant, should Americans who illegally evade their taxes be investigated and prosecuted?

B

Bessent1:42:11

Yes.

U

Unknown1:42:15

Secretary Bessant, should people and organizations facilitating money laundering for Iran, North Korea, or Hamas be prosecuted?

B

Bessent1:42:24

Yes.

U

Unknown1:42:26

What about laundering money for Mexican drug cartels?

B

Bessent1:42:29

Yes.

U

Unknown1:42:31

Should a person who traded and profited on insider information be prosecuted?

B

Bessent1:42:37

According to the law, they should.

U

Unknown1:42:38

Appreciate that. Mr. Secretary, as a result of President Trump's $10 billion lawsuit, the Department of Justice on behalf of your department settled with President Trump by creating a $1.776 billion slush fund to pay for his supporters and criminals. Were you either directly or through your staff asked to sign the original agreement?

B

Bessent1:42:57

Again, Senator, you were not here at the early part of the meeting.

U

Unknown1:43:03

I saw you on TV.

B

Bessent1:43:04

Well, congratulations. And you would know that I'm unable to answer those questions and they should be referred to Secretary.

U

Unknown1:43:10

What about the addendum to this agreement? Are you familiar with what the addendum is?

B

Bessent1:43:14

I'm not sure what you're referring to.

U

Unknown1:43:16

Are you familiar with this giveaway from the IRS? It says President Trump and anyone that knows him or does business with him or part of a business, they get off scot-free. Are you aware of this?

B

Bessent1:43:26

Again, I would refer you to Attorney General Blanch.

U

Unknown1:43:31

Are you Attorney General Blanch's client?

B

Bessent1:43:34

The IRS and Treasury are a client of the Department of Justice.

U

Unknown1:43:40

So, is that a nice way of saying yes, you're a client? He's your lawyer.

B

Bessent1:43:45

He represents...

U

Unknown1:43:46

You're the Secretary of Treasury?

B

Bessent1:43:50

Yes.

U

Unknown1:43:51

The Department of Justice. Scott Bessant, let me ask you this question, sir. Are you the secretary?

B

Bessent1:43:57

In my personal capacity, Tom Blanch is not my attorney.

U

Unknown1:44:00

Correct, sir. The... are you for the US Secretary? Scott, let me ask you this way. Scott, are you the Secretary of Treasury for the United States government?

B

Bessent1:44:10

Yes.

U

Unknown1:44:11

Appreciate that. The Department of Justice represents the IRS at the Department of Treasury in this lawsuit. Correct.

B

Bessent1:44:17

Correct.

U

Unknown1:44:18

Are you aware of this addendum? You're telling me DOJ gave the president this without you knowing about it?

B

Bessent1:44:26

Again, they settle on our...

U

Unknown1:44:29

That's not how the law works, sir. I'm not a lawyer, but you have a bunch of them behind you. You should see the faces they're making at me behind you. They're all scowling at me back over here.

B

Bessent1:44:36

Well, I think that's a different reason, sir.

U

Unknown1:44:39

Well, for whatever it is, they're doing it. Mr. Secretary, my concern is that this addendum's not been getting a lot of attention. There's colleagues on this panel that think this slush fund is a bunch of... and they've called out to say get rid of it. Now people need to say, 'Are you okay with one person in America?' Because the Secretary of Treasury, I'm guessing, conferred with the Department of Justice because you're named on this lawsuit, sir. These are all the transactions from the president as well that I'm going to ask you this next question as well. You were bragging to one of my colleagues that you've been sanctioning people doing bad things in America. People that get sanctioned like Iran or terrorists, they're told not to do business in the United States with partners. Is that your understanding, sir? Me as a layman,

B

Bessent1:45:29

It is.

U

Unknown1:45:30

You hold these bad people accountable. I congratulate you for that. So this little giveaway to President Trump and his family gets him off scot-free. Does every American become part of this addendum? If someone didn't pay their taxes or violated tax law or did bad things, are they told can't prosecute you? You're good. Everyone going back to the date of this or is this only for President Trump and his affiliates?

B

Bessent1:45:57

Senator, do you have specific knowledge that President Trump's being audited?

U

Unknown1:46:02

Sir, I have specific knowledge of this addendum that you don't know a damn thing about that is for the Department of Treasury that your lawyer at the Department of Justice signed you up for. The reason I'm asking this question is because President Trump's sons signed a deal, as you know, with World Liberty Financial with a bunch of folks you sanctioned. And now as part of this, there's an addendum that says President Trump and his kids and anyone affiliated with him, I don't know if it's current wives, former wives, people that just did transactions with him, they're off scot-free. That has a new ring to it. This scot-free because the Department of Treasury and the IRS is not going to go after him. Sir, this is wrong. This is lawless. I hope our colleagues will look at this addendum. If I could offer this into the record, Mr. Chairman, for those that haven't seen it yet,

C

Crapo1:46:59

Without objection.

U

Unknown1:47:02

Come on, man. There's a better way of doing this, sir. That's all we're saying here. So, look, I appreciate it if you don't want to talk about a lawsuit. That's your prerogative to answer that way. But to say that you as a client, as Secretary of the US Treasury does not know what the Department of Justice is giving away to people, come on, man. That's just not on the up and up, sir.

B

Bessent1:47:21

You don't understand the way the protocol works. We receive advice and accept their settlement.

U

Unknown1:47:31

You're telling me as the secretary of US Treasury, you don't know that the president of the United States, who I think you work for, got a sweetheart deal from the Department of Justice, who's your lawyer.

B

Bessent1:47:43

You're in line for the presidency, Scott. I do know that the president of the United States and 400 many of his employees had the largest tax leak in history and...

U

Unknown1:47:53

I know here's his filing shirt of all the insider trading.

B

Bessent1:47:56

Do you want to apologize on behalf of the American government?

U

Unknown1:47:58

Scott, you should apologize to the American people for fleecing them and giving this away to Donald Trump. Man, that's what you should do.

B

Bessent1:48:05

We can agree to disagree.

C

Crapo1:48:07

Senator Warox, that we'll agree on.

W

Warner1:48:13

Thank you, brother Chairman. Last month, I asked the president's nominee to lead the Federal Reserve what I thought was a simple question, but he tried to dodge it. His answer was cute. I'm not sure the American people who were struggling were laughing. So, I'll ask you the same question to see if I can get a clear answer. President Trump has said that his grade of the economy, his words, is a quote plus plus plus plus plus. He said this before he sent energy and gas prices soaring with this illegal war in Iran, a war that's costing taxpayers billions of dollars, a billion dollars or more per day, turbocharging inflation. So, I'll ask the Secretary of the Treasury the same question. Given all of the challenges facing ordinary Americans, our political differences aside, what grade would you give the US economy right now?

B

Bessent1:49:17

Which challenges other than temporarily elevated prices would you identify, Senator?

W

Warner1:49:24

I'm asking you, what grade would you give the economy?

B

Bessent1:49:27

I think we have the makings of one of the strongest economies in history. We've had 2.6% growth. Core inflation has dropped. Food inflation since President Trump began, as much as you all want to disagree, is 2.5%.

W

Warner1:49:44

So you agree with the president? You would give the economy a plus plus plus plus.

B

Bessent1:49:50

I think we have all the makings for a very strong economy. I think that we have temporarily elevated prices that will come back down.

W

Warner1:50:01

I got it. So, you're telling Americans it's not so bad. Americans give the Trump economy a failing grade. You and I can disagree, but this is not about us. They give the economy a failing grade because they can't afford anything. Folks back at home in Georgia whom I represent are struggling. Let me finish. I'll just make their lives work. And they know President Trump's Iran war and the tariff taxes are only making things worse. Talk to farmers in Georgia. They'll tell you that. But I'm not so sure folks fully grasp the long-term crisis that's also brewing for our children and our grandchildren. Wars do not pay for themselves. And this year, under the Trump administration's economic policies, the $31 trillion national debt exceeded GDP for basically the first time since World War II. Think about that. Now, to be fair, debt did exceed GDP during the COVID-19 pandemic, but that was only briefly as GDP crashed as a result of a once in a century pandemic. The big ugly bill alone will add nearly $5 trillion to the national debt. Something that I do care about and I think it matters. I think it's interesting that Republicans talk about it when Democrats are in charge, but I haven't heard much discussion about the national debt lately. According to our nonpartisan scorekeepers in the Congressional Budget Office, it will add $5 trillion to national debt. Do you still think that driving deeper into debt to extend billionaire tax cuts were a good investment?

B

Bessent1:51:50

Sir, 90% of the filers who availed themselves of President Trump's signature policies make below $100,000. And if you want to know who is responsible for the American people, you all towards them during the Biden administration. I'm not sure if you were part of that, but we had 21.5%...

W

Warner1:52:11

Joe Biden has been out of office two years and the fact that you keep talking about real negative so...

B

Bessent1:52:18

And sir, I'm asking you a basic question: do you think that going into debt to extend billionaire tax cuts was a good investment? Yes or no?

I disagree with the categorization of billionaire tax cuts when in fact most of the tax cuts went to working Americans, according to...

W

Warner1:52:38

Senator, you are quoting the Congressional Budget Office which...

B

Bessent1:52:42

According to the Yale Budget Office, the Yale Budget Lab is a bunch of Biden hacks.

W

Warner1:52:48

Oh yeah, okay. The admin... well, you should talk to the people in Georgia. They will tell you, sir, that whatever tax relief you think you gave them was more than taken up by these tariffs. According to the Yale Budget Lab, the administration's tariffs cost families three times as much as they got back in tax cuts. But I want to talk to folks at Yale. I talked to the folks in Georgia. How about the Iran war, which is costing tens of billions of dollars and counting? You previously said we have plenty of money for the war. Wars increase the national debt. Is that spending still a good idea, sir? Yes or no?

B

Bessent1:53:26

Sir, do you think it's a good idea to spend so... cannot have a nuclear weapon? Sir, I'm not... Sir, sir, do you think it's a good... So, you do think it's a good idea?

I think just as many people historically when President Obama was in office said that Iran may not have...

W

Warner1:53:44

President Obama left office in 2016, sir.

B

Bessent1:53:47

I know, but I'm saying there are many people on this committee who said Iran should never have a nuclear weapon at any cost. And they seem... they should not have a nuclear weapon, and they're closer thanks to this administration's policies. Absolutely.

W

Warner1:54:00

And the Strait of Hormuz is still closed. And you should tell the people in Georgia that this war is a good idea. I think they'll disagree.

C

Crapo1:54:09

Senator Cassidy.

C

Cassidy1:54:10

Hey, Secretary Bessant, thanks for being here. We know Social Security is going insolvent in six years. I asked your predecessor and Trump one what was the plan to do about it? And he said that would be a second Trump administration deal. Now we're in the first half of the president's second term and obviously we're now only six years away. At that time we were like 12 years away from insolvency. Social Security will account for 20% of federal expenditures and I was told once that it accounts for 20% of our long-term accrued liability. What's the president's plan to address Social Security insolvency?

B

Bessent1:54:55

Sir, we have to get our short-term house in order first. We inherited a mess. 6.9...

C

Cassidy1:55:01

If I may interrupt, and I don't mean to be rude. If we wait to get our short-term house in order, we will be three years away from insolvency. I've been working on this. It is amazing. Since I've been working on this over the last five years, it is amazing how much it's already deteriorated. It's just amazing. In five years, it's gotten so worse. Are we really going to wait until we get... I'm not challenging. I'm just asking, are we really going to wait until we're not going to do anything? I'm just not sure about that.

B

Bessent1:55:36

Yeah. And Senator, you got to crawl, walk, run. With these deficits, with this debt that was run up in the previous administration with 6.9% deficit to GDP. But highest ever when we weren't at war, weren't in a recession, we brought it down to 5.4.

C

Cassidy1:55:55

If I may, the Social Security trust fund is funded by the Social Security tax which is segregated from general revenue. Now, if we speak about the debt and deficit, whatever the... I'm not touching that right now except insofar as context, we have to do something that is general revenue. But wherever that comes from, if we're speaking about Social, that is segregated. That is a Social Security revenue problem and expenditure issue. So to me that's segregated again. So is there a plan to do anything about this segregated fund with a segregated revenue stream and a segregated expenditure pattern?

B

Bessent1:56:37

Well, Senator, part of it is the revenues aren't... the source of the revenue is not segregated because the more Americans who work, the more higher paying jobs they have, the more goes into Social Security trust fund.

C

Cassidy1:56:49

I accept that, but that's an indirect effect. And is that the only plan the administration has currently to hopefully increase the number of jobs and the better paying jobs and hope that... because I've run a big spreadsheet on this that is inadequate to address the problem. Every day 10,000 boomers become eligible for Social Security and the drain on this is just incredible. It's just going down. That will not solve the problem. And again, I don't mean to be at all confrontational. I'm just trying to...

B

Bessent1:57:21

I remember my first visit to your office, you were kind enough to share the spreadsheet on a screen with me.

C

Cassidy1:57:27

Yeah. So, I'm gathering that the administration does not have a plan to address... and I'm saying that not in any way except to say by your answers that the only response so far would be the indirect side of it. Now, on a bipartisan basis, we have been working on something that would attempt to address this. It is going to take the president, the administration at some point being involved. At this point, it's in Congress. It involves creating an investment fund, much as we have already done with the federal railroad retirement system, a plan that Senator Widen voted for when he was in the House of Representatives that took the federal railroad retirement system from going insolvent and now it's paying benefits with fewer workers and more retirees and doing extremely well. It's also based upon what the Canadians have done with their Canadian pension fund which was also going insolvent and they've been able to address that. Can you, knowing that you'd have to vet it, but would the administration conceptually be okay working with Congress to find a solution such as this?

B

Bessent1:58:33

Again, Senator, we will work on anything, but we are going to guarantee that the benefits remain as they are.

C

Cassidy1:58:44

I accept that. So in our plan, the senior citizen does not pay more taxes and the senior citizen does not get less benefits. And so we do find a way that again patterned after something that Senator Widen has previously supported on the federal railroad retirement system. And I mentioned Senator Widen because by the way he's a ranking member on the committee, patterned after that that has worked so successfully. So we don't cut benefits and we don't raise taxes for seniors. So that's the criteria I think and hopefully we can get your support as we in Congress attempt to work on this. Thank you, sir.

B

Bessent1:59:16

Thank you, Senator.

C

Crapo1:59:18

Thank my colleague. Next up is Senator Blackburn.

B

Blackburn1:59:23

Thank you, Mr. Chairman, and Secretary, thank you for being here. I wish that everyone on this panel would have seen your speech at the Reagan Library on Friday. I think it would have answered a lot of questions and it lays out your vision for where you think we can head economically.

B

Bessent1:59:48

Well, Senator, I think it was a very important economic speech, but the mainstream media preferred to report on the $250 bill. So, they're not serious people.

B

Blackburn1:59:57

Well, there are a lot of odd perceptions floating around. I want to talk a little bit about the working families tax cuts because that is something we have all heard from the people we represent. I've heard from so many Tennesseans about this and getting those bigger returns, having lower tax bills has made a difference. And in particular, of course, the enhanced deduction for seniors. That's a provision that I had pushed. And having that $6,000 enhanced deduction, I think was taken by 35 million Americans and I think nearly 70% of them had incomes lower than $100,000. Is that accurate?

B

Bessent2:01:00

Yes, Senator. And 95% of them had incomes under $200,000.

B

Blackburn2:01:06

And that is something that is putting money in the pocket of hardworking Americans and seniors who have saved all their life to be able to retire.

B

Bessent2:01:19

I think it gives them great certainty. It gives them great clarity in terms of the folks who live on a fixed income.

B

Blackburn2:01:32

Well, we certainly have gotten a lot of positive feedback on that and we look forward to seeing that continue. I do want to talk with you about penny production that ended last year and of course we have a company Artisan in Tennessee that made the pennies and now they are... and you had talked about keeping those jobs in Tennessee and Artisan is working on a zinc-based nickel that would save the taxpayer about $140 million a year because right now, the nickel takes 13.3 cents to make. And there's legislation that is moving forward, the Common Sense Act that would allow Treasury to use zinc for the nickel. And what I'd like to know is if the leadership at the Mint is making certain that they're doing the technical work in anticipation of this legislation passing that would allow the use of zinc for the nickel.

B

Bessent2:02:45

Yes, they have begun preparation on that and we look forward to working with you to make sure that there is a smooth transition.

B

Blackburn2:02:55

Thank you. I appreciate that. I also want to talk about the R&D tax credit and I have talked with Mr. Bizignano about this issue also. I've heard from a lot of our manufacturers in Tennessee and they have continued to raise with me some misalignment that they see in this legislation. R&D. The way this tax credit is working, it does not allow manufacturers to do shop floor R&D and it does not allow them to deduct the expense of the products that they are using in shop floor R&D. And we know that China is incentivizing R&D and we have a lot of manufacturers and people that are trying to bring business back and they're doing this R&D work in their plants. So I would hope that you and Mr. Bizignano can work together and get some clarity and provide some certainty for our manufacturers and be certain that these individuals can utilize that R&D tax credit. Will you do that?

B

Bessent2:04:20

I'd be glad to work with you and your staff. As I said at the Reagan Library, I believe that at one level we've lost the reservoir of knowledge by not doing this production. And I did a fireside chat last night for a group called American Compass. And I said the same thing, that somehow we separated R&D from the learning that goes on on the factory floor. And I think that that is a big mistake because so much happens during the process in terms of innovation.

B

Blackburn2:04:54

Thank you for that and I appreciate your attention to it. I'm going to submit for the record one question to you on partnership audits that needs some further attention. Thank you for being with us.

B

Bessent2:05:07

Good to see you.

C

Crapo2:05:09

Thank you, Senator Blackburn. Senator Welch.

W

Welch2:05:12

Thank you very much. Mr. Secretary, I heard your comments earlier when I was watching and I support opportunity zones. They've been helpful to Vermont. But number two, I want to talk about what I think is a looming crisis that gets far too little attention in this Congress, and that's the national debt. And I know you're familiar with this. I'm just going to show the chart for others. The projections of the debt. First of all, January of 2025, it was $36.2 trillion. It's now $39.2 trillion. And as you can see in this chart, the trajectory of this debt is just going up and up and up. And the CBO right now says that debt held by the public is 99% of the gross domestic product, scheduled to go up to by 2030 to 130%. And we're now paying interest, as you know probably better than anybody, of $970 billion. So taxpayer revenues are going $970 billion to debt that exceeds our military budget. And obviously means that we can't spend it on other things that folks in Mr. Crapo's district and folks in my district need. The federal interest payments rose to 18.5% of all of our revenues and the CBO says that's going to go up to 25.8% by 2036. And we don't talk about it at all. It's not even a topic which is astonishing to me because it's such a threat. Now there's three ways to address debt. One is we can cut spending. One is we can raise revenues and I don't want to talk about those two today. But there's one other where I think there should be consensus and that is we can collect the revenues that taxpayers owe. And that's why I want to talk to you a little bit about the staffing cuts that I understand have taken place at the IRS which has reduced their capacity to collect revenues that are owed by taxpayers. In fiscal year 2027, the IRS enforcement funding was cut by 18%... or pardon me, 2,800 staff positions were reduced. And that's in addition to 26% revenue agents lost in 2025. And I've got a revenue chart here that was prepared by the Peterson Foundation and I find them to be extremely credible on debt issues. I don't know if you share my high opinion of...

B

Bessent2:08:14

Not anymore.

W

Welch2:08:17

Well, I think they've lost their way.

B

Bessent2:08:20

Well, all right. We'll disagree on that.

W

Welch2:08:21

I find them to be an extremely credible source. But what this chart shows is that as we increase the cutting of revenue agents, the loss of owed revenue, this is owed revenue. We're not talking about increasing anybody's taxes.

B

Bessent2:08:42

You're talking about the tax gap.

W

Welch2:08:44

That's right. The tax gap is going to be $1.8 trillion. So the obvious question here is why are we cutting the people who we need in the IRS to do the audits to collect revenues that are due to the Treasury?

B

Bessent2:09:02

Well, Senator, couple of things. Let's backtrack to your previous chart. The Peterson Institute of CBO projected we were going to grow at 1.8%. Thus far in this administration we've grown at 2.7%.

W

Welch2:09:16

Let me interrupt. It's 1.8% forever. We've grown at 2.6%.

B

Bessent2:09:20

No, you're... let me just stay on the revenue because whether we grow at 1.8% as they say or 2.8% whatever it is you say. You would agree with me that if I'm a taxpayer and I owe money, I should pay it.

I can tell you that more bodies does not equal better collections.

W

Welch2:09:38

So you just disagree?

B

Bessent2:09:39

Here, let me read you something. So I think that you would agree TITA, which is the IRS internal reporting system, all of these employees who were hired... a whistleblower in Atlanta came out and said a 25-year IRS CI employee who trained 2,700 new IRS agents...

W

Welch2:10:05

I'm going to have to interrupt because my time is running out. I'll be happy to send this to you.

B

Bessent2:10:09

Please, show you why it's a complete fallacy. Last year we had recoveries up, collection...

W

Welch2:10:15

Can I just get a little extra time because... Thank you, Mr. Secretary. Number one, I absolutely believe that the people who owe money should be paying that money and that we should have assertive enforcement in order to get that collected regardless of what the growth rate is. That's number one. Number two, one of the things that is happening is we've withdrawn from the global effort for coordinated organization for economic cooperation and companies are now using these low tax dodge countries like American Express have avoided $423 million in taxes by using the island of Jersey saying that's where they do their work. Black & Decker cut their tax bill by $269 million. Is that something that we should tolerate?

B

Bessent2:11:05

No.

W

Welch2:11:10

Thank you. And will you do something about it?

B

Bessent2:11:13

Again, it's a complicated question and I'm happy to come to your office. Happy to do another phone call as we've done.

W

Welch2:11:21

All right. I will follow up.

B

Bessent2:11:23

But I do want to send this TITA report that shows that new agents were a disaster.

C

Crapo2:11:29

Senator Tillis.

T

Tillis2:11:32

Thank you, Mr. Chairman. Secretary, thank you for being here. You know, you may have heard I've been a little bit critical of a few of the advisers of the president. You're certainly not one of them. I'm glad you're there.

B

Bessent2:11:43

I'm looking to stay on that side of the line, Senator.

T

Tillis2:11:46

And I appreciate the work you're doing and I love the fact that you show good judgment of loving some of the North Carolina mountains with your family just like I do. So, thank you for being here. I do have one awkward question to ask you real quick and then I want to get to some of the trends and how you're going to work on them. Did you actually tell Pauly you were going to punch him in the face?

B

Bessent2:12:13

No, sir. I actually said I was going to kick his ass.

T

Tillis2:12:16

Good. Okay. Good. I share the emotion. Thank you.

B

Bessent2:12:21

And as I said, that was last summer, summer '25. And many teams have fights in the locker room and then go out and win for the team on the field.

T

Tillis2:12:31

Yeah. I was just curious because everybody's going to be showing that. I made it clear I'm not going to support Pauly for DNI, but I'm sure they're going to dredge that up. So, I thought I'd give you an opportunity to...

B

Bessent2:12:42

I had a very good exchange with the director yesterday. Want to keep the momentum going on FISA.

T

Tillis2:12:48

Yeah. Well, he lost me when he went after Powell. So, we can move on to your core job. I know back in 2028 you were trying to target a 3% deficit to GDP. I think that's a laudable goal. There's a lot of work we have to do. So you can put it back on us for maybe not making progress. But now we're at 30-year yields at a 19-year high. You know where we are in 10-year yields and even some of the interest expenses on the 5.3 of GDP. We're not trending in the right direction. What are we going to do or what would be your advice? What is the administration going to do to help Congress focus on the main thing to try and get our deficit to GDP ratios to what most economists think are necessary, which is your laudable target?

B

Bessent2:13:35

Yes. So, Senator, this year, the US has the presidency or the head of the G20. We're actually holding the finance ministers meeting in Asheville. So, maybe you'll join us. And we have outlined to the industrial nations or to the G20 that we believe that the most important factor for financial stability is economic growth, that it is a lack of growth worldwide. And the decision that many trading blocks countries have made... and I believe the most important thing that we can do, as I was trying to tell Senator Welch, that the CBO projections are all at 1.8%. That we have grown at 2.6% thus far. That includes the Democratic shutdown and the Iran conflict, which makes me believe we can grow at three. So if the CBO is wrong in their first year, how can they project out 10 years? So I think that growth, constraining spending, and a growth agenda will do this.

T

Tillis2:14:43

And I may submit a question for the record that... I have to believe that global growth and US growth is somewhat... we are seeing great growth numbers but I do think there's a lot of uncertainty out there and I have to believe that that's keeping some capital on the sidelines. So we could even see greater ones. One of the areas where I think we've had some confusion, I asked Ambassador Greer last year, 'Whose throat do I get to choke if the Liberation Day tariffs didn't work out?' I'm not going to ask you that question. I think I know the answer to it. They didn't work out. But now you're at least working with CBP on the refund process. How does that actually work? I know CBP has stood up a portal. Now they're appealing the decision. So people that were applying for it can no longer while this appeal is occurring. What is Treasury's role about?

B

Bessent2:15:36

Senator, we're just a dispersing agent.

T

Tillis2:15:40

Okay, good. I guess the only other question I have going forward is how do we reconcile the increased budget requirements with the goal of trying to reduce our deficit to GDP? Is it just something we got to put on hiatus now because we're dealing with high priority items, or how do we talk and chew gum at the same time? Because we have a pretty massive increase in defense spending, which I'm generally supportive of, but we have no way to pay for it. It's one of the reasons a few years ago I was one of only nine people that voted against the trillion dollar veterans bill because it had no pay for. So, how are we going to get to these things that are important but actually pay the bills at the end of the day versus putting my grandkids in debt?

B

Bessent2:16:29

Well, sir, you met my children. I hate to put them in debt. And there are priorities because with the defense budget, if we don't have national security, I think it's very linked to economic security. And I would like to see, as I said, something with a three in terms of deficit to GDP by the time the president leaves. I think one of the things that is the result of the working families tax cut is the immediate expensing of equipment, factories, and R&D. And what we are seeing there is this is not a giveaway. This is creating productive capacity. So the way to think about it now is that as we are not getting the tax revenue because a corporation or small business has immediately written that off, we are increasing productive capacity which I think is almost like the slingshot effect that we will start getting it in the second year, the third year, the fourth year.

T

Tillis2:17:40

Thanks.

C

Crapo2:17:42

Thank you, Senator Cantwell.

C

Cantwell2:17:44

Thank you, Mr. Chairman. I know it's been a long day because I've been in a long hearing on the other side and just on the other side of the hallway, but thank you for holding this hearing. Good to see the Treasury Secretary here. I want to express my concerns about the Trump settlement with the IRS. I think taxpayers need to know that well-connected are not given a free pass. I would love to talk to you about Jones Act waiver tax parity. I'd like to talk to you about the fact that we have an insolvent highway trust fund, but I really want to ask you where you see this landscape now with China, having been very active in the Chinese meetings and this issue of trying to move on from the tariff debate and get the Chinese into a manufacturing purchase specifically of aviation aircraft. And so I know that this is something that the administration and you have been personally involved in and I just hope that as we look at pushing China to make big purchases. I mean I think it's kind of crazy that if they want to be successful, why not do what Emirates is doing in the Middle East? Why doesn't China Air become the big deliverer of an air transportation system in the Far East and do it with a fuel efficient plane? So what do you think the chances of that continuation of getting this on track and getting when the president comes here to have some success?

B

Bessent2:19:17

Yeah. So, Senator, I think after a rocky period that we have very good stability in the relationship. As I've said many times, we don't want to decouple, but we need to derisk. There are many industries we need to bring back whether it's semiconductors, critical minerals, rare earth, our precursor medicines and chemicals. It's unacceptable that we rely on China for many of those. Thus far we have seen a willingness by the Chinese. They are very interested in the Boeing purchases. They agreed to 200 airplanes during the visit. We will see if they commit to a larger number when Xi Jinping arrives in Washington. And the other thing that we are pushing for is for the Chinese to open their economy because what has happened, we have probably the most unbalanced economy in modern history and it is hurting their households to the benefit of their manufacturing sector. China runs a massive budget deficit about 10% of GDP. 4% goes to industrial subsidies and if they move some of that over to the households, which we brought up with Chinese leadership during the visit, then there would be much more demand for not only American industrial products like Boeing airplanes but more American goods. We have formed a Board of Trade and we will be looking at non-critical industries or non-critical things that we can trade with each other tariff-free.

C

Cantwell2:21:06

How will that work? I mean, I'm for the tariff-free part for sure and particularly, another issue we have both very high-end manufacturing like aerospace, but we also have a lot of seafood in the Northwest and China consumes something like 45% of the world's seafood. And I guarantee you that market isn't open wide enough for our products. So, how would the Board of Trade help us with that?

B

Bessent2:21:32

Well, that's exactly what it's going to do. It's going to say if we pick a number, $30 billion by $30 billion, what are $30 billion of things that are non-critical industries, non-critical things: fireworks, Halloween costumes, very low-end consumer items that we do not want to reshore, that we want to buy from them, and what are things that they would like to buy from us: seafood, maybe energy, and then we will both agree that that basket on either side will have no tariffs.

C

Cantwell2:22:08

Well, I hope I think this is a particularly important market with a long-term relationship. I know the challenges that we face in forcing them to open those markets, but I also think that getting off the tariff debate and into open ways to get more product flowing to me is a very important thing. So, thank you, Mr. Chairman. I see my time is expired, but I do want to again emphasize I really am against the Trump settlement with the IRS and I know you have oversight over that. So, I'm mentioning that to you. Thank you, Mr. Chairman.

C

Crapo2:22:44

Thank you. We are informed that Senator Marshall may be back. Senator Widen has asked for a second five-minute round and as the ranking member, I've agreed to that.

So, Senator Widen, why don't you begin and then if Senator Marshall shows he'll be the final chairman?

W

Widen2:22:59

I've got one. I want here, Mr. Secretary, to follow up on your answers about the Booz Allen contracts. Now, you said you didn't know about Trump's lawsuit in advance. So, I gather that for you it was a coincidence. You canceled the contracts three days before Trump's lawsuit.

B

Bessent2:23:23

That would be correct, sir.

W

Widen2:23:25

Okay. And you didn't talk to anybody outside Treasury. I assume that's what you're saying as well.

B

Bessent2:23:32

Again, as I said, I had no knowledge.

W

Widen2:23:34

Okay. Mr. Chairman, I'm going to make a brief closing statement with respect to where we are because I think that this has been a critically important meeting and what it has showed is that almost all of the big questions with respect to immunity from audits remain unanswered. And my own view is that we're going to keep digging into this. I know that I'm going to. And my own view is that somebody broke the law. Either Mr. Bessant or Frank Bizignano, the CEO of the Internal Revenue Service, were illegally involved in the audit immunity granted to Trump through the addendum. Or if Mr. Bessant continues to claim that Treasury and the IRS were not involved, the audit immunity grant in the addendum is against the law because acting attorney general Blanch doesn't have the authority to settle tax disputes that may have not been referred to DOJ. So that's where we are. It's one or the other. And my own view is that as we keep digging, somebody broke the law. And I'm determined to work with my colleagues of both sides of the aisle to get to the bottom of this because we are wrapping up with virtually all of the big issues with respect to how this immunity, which basically nobody else in America gets, that's the important point, came into being. And we've got to get to the bottom of it and make sure that it's corrected and doesn't happen again. And I thank you for the extra time.

B

Bessent2:25:16

And we've never seen anyone in America have their tax returns, the tax returns of all their employees leaked without an apology. Senator, would you like to apologize today?

W

Widen2:25:30

I was very much at the bottom of saying that it was critically important that enforcement action be taken and I worked with my colleagues on both sides to move quickly. That's the fact.

B

Bessent2:25:40

Yeah. Then why was Mr. Little John only charged in two out of three potential charges? He got off.

C

Crapo2:25:50

With that, what we will do is Senator Marshall, you made it in just under the wire. Senator Widen has given his closing remarks. I will forego my closing remarks to allow you to give your five minutes worth of questioning.

M

Marshall2:26:05

Well, thank you, Chairman. That is very kind of you, Secretary Bessant. Welcome. I know it's been a long morning and I know you probably have answered these questions already. One of my favorite quotes from you is 'the table is set and it's time for the banquet.' And I'm sure you could probably credit somebody else, but back in Kansas, we say the table is set and it's time to eat. I want you to know I've been all over the state of Kansas and especially manufacturing is growing. There are new opportunities there and I think a lot of it is from the working family tax cuts bill that has made that very possible. What I love about your background is you're a business person that's come to Washington DC. What are you seeing happening with manufacturing because of that working family tax cuts bill across the country?

B

Bessent2:26:53

Senator, we're having a manufacturing renaissance. We are seeing that we've created about 90,000 new non-residential construction jobs which would tell you that those are some type of manufacturing facilities. In my hometown of Charleston, South Carolina, Boeing is expanding their facility by 50%. And those are construction jobs and then that will become a thousand high-paying manufacturing jobs. And we're seeing that all over the country. We are seeing pharmaceutical companies reshore. We saw John Deere, the CEO told us building a new factory in Indiana and in North Carolina. So it is a real manufacturing renaissance and much of it is a result of the tax bill. I was in greater Minneapolis visiting Winnebago and they told me that because of the tax bill they had a decision whether they were going to create a battery research facility in Florida and the full expensing gave them the internal rate of return that they needed. So that's more jobs in the Sunshine State.

M

Marshall2:28:07

Great. My next question and you don't have to answer it now, you can give us a written one, but the 45Z model again, you put on your farmer's hat for a second. You understand how important 45Z is to our farmers back home. I think the GREET model is waiting for the Treasury to do their little work on that as well. So maybe your staff could give us an update unless you wanted to say something.

B

Bessent2:28:28

No, we'd be glad to do it, but we think it's very important, sir.

M

Marshall2:28:31

Great. I want to talk about child care just a second as well. Under Joe Biden, we saw the cost of health care, housing, child care go up 50%. Inflation's cumulative, but again, our working family tax cuts bill did some incredible things for child care all across the state of Kansas. Again, I'm seeing people being able to invest in this. But I especially not only do the increased monies were given to individuals, but the businesses having an opportunity to expand. Can you speak a little bit about what your vision is on using that benefit?

B

Bessent2:29:04

Look, I think that's a great benefit. The child deduction that is now permanent thanks to you all, $100. So I think that we have seen that the best way to do this is to engage the private sector.

M

Marshall2:29:27

Exactly. Then I'm just going to close with... I was just out at the Reagan Library and he spoke about this bright shining city on a hill and it's hard for me to imagine but the third quarter last year Kansas led the country in GDP growth at 6.5%. And we never lead any type of thing economically. And so I went back and tried to figure out the why of this and certainly the cattle markets are good. Farming income in Kansas was up 80% and a lot of that was government related but certainly a part of that was the cattle industries and of course the cattle eat corn as well. We saw some but we're also seeing expansion in manufacturing. What would be the message of hope you would give America that this economy... it really feels good to me right now and things are not perfect. We've got to work on the price of gas. Inflation's cumulative. We're still feeling a sting but give me that message of hope from your desk.

B

Bessent2:30:31

The underlying economy is extremely resilient. We have had tremendous job growth in the past few months. We saw the ADP numbers which are precursor for non-farm payrolls come out very strong today, above trend. We are seeing trucking surveys do very well. And I think that the underlying economy is very strong. We will get on the other side of this Iran conflict. Prices will come back down and I think that the economy is going to roar, sir.

M

Marshall2:31:03

Okay. Thank you, Secretary, for sticking around. Mr. Chairman, thank you so much.

C

Crapo2:31:09

Thank you, Senator Marshall, and thank you, Secretary Bessant. That concludes all of the questioning and all of the commentary. We appreciate you taking this time. You spent more than two and a half hours with us today. More than that, we appreciate the service that you are giving and that all of those at the Treasury Department are giving and please extend that thanks to them for us. With that, we are concluded. I remind my colleagues that the deadline for submitting any questions for the record is 5:00 p.m. on Wednesday, June 10th, and the Finance Committee stands adjourned.

FULL HEARING: U.S. Treasury Secretary Scott Bessent Faces Senators in Heated Budget Clash | AC15

About Scott Bessent