Scott Bessent

Treasury Secretary, US Treasury

Treasury Secretary Scott Bessent on DOGE, Dollar, Fed | Balance of Power

🎥 Feb 06, 2025 📺 Bloomberg Podcasts ⏱ 39m

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About Scott Bessent

Treasury Secretary Scott Bessent has promoted the Trump administration’s economic record, citing strong job growth and tax policies. In a June 2026 interview, he said the U.S. created 900,000 private-sector jobs since President Trump took office and described the past three months of job creation as “a blowout,” with 170,000 to 180,000 jobs per month. He attributed a manufacturing “rebirth” to tariffs and tax policy, and said core inflation had surprised on the downside at 2%. Bessent also expressed confidence that energy prices would decline once the conflict with Iran is resolved, stating that oil was already 25 to 30 percent off its peak. Bessent joined First Lady Melania Trump in June 2026 to announce “Fostering the Future” accounts, a savings and investment vehicle for foster youth. He described the accounts as part of the broader “Trump accounts” program, which provides a $1,000 seed contribution from the Treasury for every child born between January 2025 and December 2028. Bessent said that, assuming historical growth rates, the deposit could grow to at least $500,000 by retirement. He stated that the program aims to give foster children the same opportunity for asset ownership and long-term wealth building as other children, and that it would help ensure their futures are shaped by possibilities rather than circumstances. During a House Ways and Means Committee hearing, Bessent defended the administration’s tax cuts, including provisions eliminating taxes on tips, overtime, and Social Security benefits, and said 62 million Americans claimed at least one of those provisions. He also faced questions from Democratic lawmakers about the economic impact of tariffs, the IRS settlement with President Trump, and the administration’s budget deficit projections.

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Transcript (63 segments)

✨ AI-enhanced transcript with speaker attribution

Kaye0:02

Bloomberg Audio Studios, podcasts, radio. News, you're listening to the Bloomberg Balance of Power podcast. Catch us live weekdays at noon and 5:00 p.m. Eastern on Apple CarPlay and Android Auto with the Bloomberg Business app. Listen on demand wherever you get your podcasts, or watch us live on YouTube. Let's get to it without further delay. I'll turn it over to my colleague Kailey Mosen, who is live at the Treasury Department with the new secretary, Scott Bessent.

Kailey Mosen0:33

CA, thank you, Kaye. I'm here with us Treasury Secretary Scott Bessent in Washington. Mr. Secretary, thank you for joining me. So good to see you. Mr. Secretary, we are inside the cash room at the Treasury Department. It is almost impossible to overstate how important the work that is done in this building is to the US financial system. Yet right now there is widespread concern about the Doge team's access to sensitive payment systems. Are you worried at all that that access and that tinkering of the payment systems could affect the Treasuries market or cause any disruption?

Scott Bessent1:07

Good well, CIA, thank you for asking me about that because there's a lot of misinformation out there. First of all, when you say the Doge team, these are treasury employees. Two treasury employees, one of whom I personally interviewed in his final round. There is no tinkering with the system. They are on read only. They are looking, they can make no changes. It is an operational program to suggest improvements. So we make 1.3 billion payments a year and this is two employees working with a group of longstanding employees. The letter that the Treasury Department sent earlier this week talked about how the team currently does not have access to change the system.

Kailey Mosen1:57

Have they at any point this year had the ability to make changes?

Scott Bessent2:02

Absolutely not. This is no different than you would have at a private company. And by the way, the ability to change the system sits over at the Federal Reserve, so it doesn't even lie in this building. So they could make suggestions on how to change the system, but we don't even run the system. If they request the ability to change the system, would you grant that? No, again, they have no ability to change the system. I have no ability to grant that change. They can make suggestions, then it would go to the Federal Reserve. Just like any large ERP system, there would be this and that, and then the Fed will determine whether these changes are robust or not.

Kailey Mosen2:50

As the Secretary of Treasury, you also oversee the IRS. Do you know what kind of access the team has to IRS data or individual taxpayer data?

Scott Bessent3:00

Well, I'm glad you ask that too. The IRS privacy issue is one of the biggest issues. Over the past four years we've seen a lot of leaks out of there. The IRS systems are quite poor. When I started in college in 1980, I learned the program in COBOL. I think there are 12 different systems at the IRS that still run on COBOL. But as of now, there is no engagement at the IRS and customer service.

Kailey Mosen4:09

But do you think that if they ask for access, that is something you would consider signing off on?

Scott Bessent4:13

There are a lot of things I consider. But look, we're in the middle of tax filing season. With the government buyouts expiring at midnight tonight, we have mandated that IRS customer-facing employees are not eligible until May 15th. So I don't imagine anything's going to go on at the IRS until then or beyond.

Kailey Mosen4:40

Elon Musk just a half hour ago tweeted out that treasury needs to stop approving certain payments. Has your staff tried to block any payments here at treasury?

Scott Bessent4:49

Uh, we have not. And I'm glad you asked that too. Just to put in perspective, Elon and I are completely aligned in terms of cutting waste and increasing accountability and transparency for the American people. I believe this DOGE program in my adult life is one of the most important audits of government or changes to government structure we have seen. When I was in my twenties we had the Grace Report, great suggestions never implemented under Clinton and Gore. Nothing happened. So President Trump came in with a big agenda. I think there are gigantic cost savings for the American people here. It is unfortunate the way the media wants to lampoon what is going on. These are highly trained professionals. This is not some roving band. It is methodical and it will yield big savings.

Kailey Mosen5:57

At any point, would you heed what Musk just tweeted and stop payments from coming through treasury?

Scott Bessent6:05

Look, most of that happens above us. It comes from the departments and the agencies. We are doing a complete review. I want to emphasize to you and everyone watching that it is an operational review, not an ideological review. We want to make sure the American people are getting the best practices. These systems here at treasury are known to be a little antiquated but very sensitive, but also they're working.

Kailey Mosen6:36

I'm hearing at Bloomberg we hear a lot about investors being concerned that this could hit markets or start to cause a loss of confidence. As a longtime hedge fund investor, what is your response to those concerns?

Scott Bessent6:55

People shouldn't be concerned. At treasury, we move deliberately and we fix things. That is the way we work. Everyone should know that all the payments are going to be made, they're going to be in good order, and at the end of this review there will be substantial savings for the American taxpayer.

Kailey Mosen7:17

Mr. Secretary, you have experience in currency markets and now you oversee US currency policy. What does a strong dollar mean to you?

Scott Bessent7:28

First of all, the strong dollar policy is completely intact with President Trump. I was very happy at his Economic Club of New York speech in August when he reemphasized the importance of maintaining the dollar's reserve currency status. But what does a strong dollar mean? It really means four things: one, that when we think about a fiat currency, a piece of paper, it is credibility and a rule of law backing it up. Two, it means a composite price on the Bloomberg currency index. Three, it is a bilateral price; the dollar is either weak or strong versus something else. So we want the dollar to be strong, but we don't want other countries to weaken their currencies to manipulate trade. Four, we want the best policies that create the environment for a strong dollar.

Kailey Mosen8:47

Let's talk about other nations and how they manage their currencies. The president has asked for a tariff study due April 1st, and the treasury piece is to assess how to handle when foreign nations manipulate their currencies. Do you see any evidence of manipulation in foreign exchange rate markets right now?

Scott Bessent9:10

Well, we'll wait till the study comes out. But I think intuitively you and I could agree that when you see the accumulation of these large surpluses, there is not a free-form trading system going on. It could be due to the level of the currency, trade restrictions, or interest rate repression policy.

Kailey Mosen9:39

Are there any countries you are monitoring specifically? I know the president has labeled China a currency manipulator. Do you see other nations that need to be closely watched?

Scott Bessent9:50

I think we'll see on April 1st. As you know, China is the most imbalanced economy in the history of the world. They are in a deep recession with deflation and trying to export their way out. We can't allow that. We want fair trade, and part of that is taking a strong position on the currency and terms of trade.

Kailey Mosen10:20

Yesterday the treasury had its first quarterly refunding since you were confirmed. Do you have any plans to look at how the treasury's debt issuance strategy comes together?

Scott Bessent10:32

The good news is that the trajectory of borrowing is dropping. I was very happy to see that—one of the few good surprises left by the previous administration. The government is well financed through the end of the third quarter. As it becomes apparent that the president's agenda is working, we'll see non-inflationary growth, which will help calibrate debt policy. But I don't foresee any changes in issuance for the foreseeable future.

Kailey Mosen11:18

And what about the process? Do you think TAC is the most effective way of getting feedback from markets?

Scott Bessent11:27

I want to thank all the members of TAC who were here this week. Very elite group. Over time we need to think about the style of engagement. It has turned into more of a research think tank than direct market engagement. That will require changes from both sides. When TAC was started, it was a market feedback mechanism, less of a think tank. We've been assigning research projects. Some recalibration is needed, but TAC will still exist.

Kailey Mosen12:12

You said yesterday that the Trump Administration is more focused on long-term yields than what the Fed is doing. How do you plan to keep a lid on yields considering the deluge of debt issuance and inflationary risks?

Scott Bessent12:33

One thing I want to emphasize is that we are not focused on whether the Fed cuts or not; we are focused on lowering rates. We are less focused on rate cuts and more on getting the whole curve down. The 10-year is the important price—it affects mortgages and long-term capital formation. With the president's policies of energy dominance, deregulation, and non-inflationary growth, the 10-year will naturally come down. On top of that, if we get big savings from DOGE programs—think of a naive formula: government equals spending minus taxes. Republicans like spending but want to raise it less, Democrats want to raise it more. What nobody is thinking about is what if the spending actually goes down because of everything we are doing right now.

Kailey Mosen14:07

But what about the inflation concerns stemming from tariffs and tariff threats?

Scott Bessent14:12

I'm not sure where this narrative that tariffs are inflationary comes from. We could have a small one-time price adjustment. As we saw in Trump 1.0, deregulation and other policies kept us right around the Fed's target. I'm unconcerned. Especially China, given their excess capacity, will end up eating quite a bit no matter the tariff level.

Kailey Mosen14:49

There is a lot of uncertainty around tariffs—they are threatened, signaled, then taken back. It appears the administration might be unfriendly to businesses. Is that right?

Scott Bessent15:02

I think it's just the opposite. This is the most pro-business administration in history. Everything we are doing will increase the after-tax return on capital. Working Americans will have very high real wage growth. Over the past four years, government and government-adjacent sectors provided employment growth, not real wage growth because they move up with CPI. We will be very friendly for working Americans.

Kailey Mosen15:59

We're seeing companies already under stress from tariff threats. China is investigating Google. Businesses like predictability, but with so much policy uncertainty, that predictability is gone. That points to a tougher environment.

Scott Bessent16:16

The best thing we can do for predictability is make the Tax Cuts and Jobs Act permanent. That would be the single best thing. We can go back to 100% expensing and add new features business will be happy with. The most important thing is that it filters down to working wages. In President Trump's first term, hourly workers did better than supervisory workers.

Kailey Mosen16:48

Let me ask you about the tax plan. On the campaign trail, Trump floated no taxes on tips, cutting the corporate rate, and many proposals. How do you juggle which campaign promises are highest priority for the bill, considering how costly everything would be?

Scott Bessent17:10

We are just starting the process. President Trump will give us his priorities. But the real priority is fixing the affordability crisis for the American people. No tax on tips, no tax on Social Security, no tax on overtime, putting back auto loan deductibility—all those benefits accrue to the bottom 50% of income earners. They have really taken it between the eyes the past four years. That is unsustainable.

Kailey Mosen17:47

Before I let you go, Mr. Secretary, I want to ask if you have had your traditional weekly meeting with Fed Chair Powell yet.

Scott Bessent17:55

We did, at an away game over at the Fed. We had a very nice breakfast. Chair Powell and I don't know each other well, so it was very constructive.

Kailey Mosen18:05

How do you view that relationship evolving? The two agencies are supposed to work closely together, and you've had some criticism in the past of his work.

Scott Bessent18:15

As I said at my hearing, everything I'm going to talk about is things the Fed did in the past. Prospectively, I will not comment on monetary policy. I'm sure he's going to do the right thing. So there will be no criticism.

Kailey Mosen18:29

All right, Mr. Secretary, thank you so much for joining. Kaye, back to you.

Kaye18:32

All right, Bloomberg's Kailey Mosen live at the Treasury Department with the newly minted Treasury Secretary Scott Bessent. Wonderful interview on Bloomberg TV and radio. You're listening to the Bloomberg Balance of Power podcast. Catch us live weekdays at noon and 5 p.m. Eastern on Apple CarPlay and Android Auto with the Bloomberg Business app, or watch on YouTube. As we heard from Treasury Secretary Scott Bessent and the administration's view, the best thing for economic predictability, he says, is to make the 2017 tax cuts permanent. That is one of the legislative objectives of Trump and this Republican Congress. The question is how and when. Trump convened House Republicans at the White House to talk about the budget. It's a complicated process—budget reconciliation can be one big thing or two things as the Senate prefers. Lindsey Graham is losing patience and will pursue a budget resolution on border, defense, and energy first, leaving taxes for later. For more, let's turn to our political panel. Rick Davis is with me from Stonecourt Capital, Republican strategist, alongside Democratic strategist Caitlyn Legaki.

Rick, the Speaker laid out an ambitious timeline for one big package. The more time passes, the greater the likelihood this gets split. What do you think?

Rick Davis20:26

Based on where everybody is, there's literally no chance the House gets the debt limit, the budget, and all the reconciliation work including making the TCJA permanent done by April. The Senate is already moving on their border and defense bill, which Trump wants. They'll leave time later in the year to make those tax cuts permanent.

Kaye21:36

Caitlyn, the difficulty in the House is that hardline conservatives want steep spending cuts, not in line with leadership. If the Senate moves first and gives the border win, why would those conservatives then vote for a tax package that adds to the deficit?

Caitlyn Legaki22:11

It becomes incredibly difficult. If you split into two bills, Republicans will have to trade making tax cuts permanent for other budgetary offsets. Reconciliation bills must be paid for. The biggest spending chunks are Social Security, Medicare, veterans benefits—very popular. Cutting those to pay for corporate tax cuts is politically toxic.

Kaye23:09

Rick, there are a lot of tax ideas—no tax on tips, Social Security, overtime. Could we end up with just an extension of the 2017 package?

Rick Davis23:36

You have to remember the political dynamic. If tax cuts expire, it'll be the biggest tax increase in history. Vulnerable Democrats in Trump districts won't vote against tax cuts. So having a standalone tax bill before the end of the year makes them think twice. You'll need Democratic votes because some Republicans don't support Trump's agenda. Piling everything into one big package complicates it.

Kaye25:00

Remember, the SALT cap looms over all this. Thank you, Rick Davis and Caitlyn Legaki. Now joining me from Capitol Hill is Republican Congressman Mike Flood of Nebraska, Vice Chair of the Main Street Caucus. Congressman, welcome back.

Congressman, can you tell us, is there a one-bill plan making progress?

Mike Flood28:32

We've said for a long time in the House, one bill makes sense. The more bills, the more uncertainty. We're talking about tax cuts, border, energy independence, and spending cuts. In each of those, a million things could go wrong. The president, the speaker, and the appropriations chair all say one big bill. It's frustrating we can't land on an answer. If it's two bills, somebody should make the call. I'm confident we'll get there. It's always messy, but the result will be good.

Kaye29:57

Who is contributing most to the mess? Hardline conservatives or Senator Graham trying to get ahead?

Mike Flood30:11

In my opinion, the House wants deeper spending cuts than the Senate. I'm interested in cutting to change the trajectory of our $36 trillion debt. Not everybody has the same interest. The real question is how deep do we cut, what do we cut, and how do we explain it to the American people.

Kaye31:00

There isn't much appetite to cut mandatory spending, but some want big cuts. Where will it come from?

Mike Flood31:08

We do have to tap into mandatory spending, though reconciliation can't touch Social Security. The president doesn't want cuts to Medicare benefits. I'm now hearing Medicaid might be included. There are provider taxes, different funding for safety net programs, student loan caps. There will be a menu of options in March. Some Americans won't like it, but if we don't sacrifice, nothing will change. As a nation, we have to say no to programs we like but can't afford.

Kaye32:49

DOGE is also cutting spending through executive actions. Is any of this front-running the reconciliation process?

Mike Flood33:01

Some things DOGE can tell us about can be in reconciliation; others are executive branch options. I asked the Treasury Secretary Monday night if Elon Musk or DOGE have direct access to the federal payment system. He said no, only read-only access to past expenditures—no different from a state auditor. I made clear we're counting on him to protect private information. Ultimately, Article I gives Congress the power of the purse.

Kaye33:57

Should Elon Musk testify before Congress about what DOGE is doing?

Mike Flood34:11

Right now he's acting at the behest of the president, who won on cutting government spending. Musk can't change the payment system. People react to what he posts on X, but only President Trump speaks for this administration. There is appropriate oversight, but Musk only has read-only access. Many in my district are glad someone is looking into the bureaucracy. I want to complement what DOGE does by making those cuts permanent through Congress.

Kaye35:16

There are funding measures approaching—a March 14 deadline and a debt ceiling deadline. How do those get done, and can you do it alone?

Mike Flood35:48

We should put the debt ceiling in the reconciliation package and pass it in a timely manner. On the March 14 funding expiration, I want to implement our 2024 budget priorities, not another continuing resolution. If I were an appropriator, a CR would be a slap in the face. We're here to govern. Let's get that done.

Kaye36:48

Recent CRs have required bipartisan support. Are you confident Democrats will still provide votes given the temperature in the House?

Mike Flood37:19

Continuing budget funding isn't a vote on reconciliation. Our appropriations chairman works with counterparts. We can achieve that on a bipartisan basis. Outside of reconciliation, we'll need 53 senators and at least seven Democrats to keep the government running. As Vice Chair of the Main Street Caucus—85 members strong—we come to work every day to keep America open for business. We'll get past March 14, figure out the debt limit, and find a way forward with the Senate and maybe some House Democrats.

Kaye38:36

Thank you, Congressman Mike Flood of Nebraska, joining from Capitol Hill. Thanks for helping us work through these fiscal conversations. Thanks for listening to the Balance of Power podcast. Subscribe at Apple, Spotify, or wherever you get your podcasts, and find us live weekdays from Washington DC at noon Eastern on Bloomberg.com.