>> we are waiting here for the

confirmation hearing of treasury secretary nominee scott bessent to be underway. he previously worked for the investment fund soros fund management before founding his own firm in 2016. he was a fundraiser for the trump campaign during the 2024 presidential race. other nominees appearing today include housing secretary nominee scott turner, interior secretary nominee dog -- doug burgum and epa administrator nominee lee zeldin. all their confirmation hearings are streaming live on the c-span now video app and online at c-span.org.

>> this hearing will come to order. before we begin our formal business let me extend a welcome to new members, senator marshall on the republican side, welcome, senator. the democrat side we have a senator lujan, smith, kraft, warnock, and welch. welcome to the committee. i am honored to lead the committee alongside wet -- ranking member widen. we have a proven track record of working together to improve the lives of our constituents in the pacific northwest and this community. i look forward to working with you, senator wyden. this committee's jurisdiction,

tax, trade, and health care policy reflects some of the most challenging matters congress confronts. the finance committee will continue a long tradition of addressing these matters in a way that invites bipartisanship and delivers results to create opportunities for americans. turning to today's hearing let me extend a warm welcome to mr. scott bessent president trump's nominee for secretary of the treasury as well as his family. congratulations on your well-deserved nomination and thank you for your willingness to serve and for your extensive cooperation with this community. it has -- committee. it has already been a great pleasure to work with you. you have been transparent, candid, and insightful with me and my colleagues spending countless hours meaningfully answering our questions and according yourself with great courtesy, dignity, and professionalism. throughout the committee's

rigorous vetting process, and i think our finance committee has the most rigorous process of any committee in the congress view -- you have worked tirelessly to make our long-standing diligence standard. it is clear you followed applicable law and provided thousands of pages of documentation that substantiate your positions, positions supported byajoraw and accounting firms. thank you for your transparency and responsiveness throughout the finance committee's exacting process. i look forward to continuing to work together with you. scott bessent has worked for the last three decades as one of the sharpest minds in the global finance industry including as an entrepreneur that started his own asset management firm. he taught economic history at yale university. he is a member of the council on foreign relations. he has served on the board of universities and nonprofits.

he engages in a variety of philanthropic endeavors. mr. bessent based upon your background, experience, and character president trump made an excellent choice in nominating you to be secretary of treasury. as you have described it, the position for which you are nominated, is at the heart of the american economy. which is, in turn, at the heart of global economic growth. a treasury secretary heads the agency charged with supporting economic growth, representing u.s. interest before foreign nations, and global financial markets and organizations. managing the federal treasury and overseeing financial institutions, to name just a few responsibilities. past successful treasury secretary's have understood business and financial markets as well as a policy and national security, budgets, and regulation.

they have worked collaboratively with congress to enact the president's priorities. additionally, they have been forthright and communicative. the next treasury secretary will have to work with congress to preserve and build on the progrowth republican tax policies which have greatly benefited all americans. as well as improve our global competitiveness through trade deals that create market access and combat china's unfair practices. as seen in the results of our most recent election, the american voters resoundingly red-p -- support returning to the robust economy we enjoyed during president trump first term. if you are confirmed, i look forward to working closely with you to achieve these and other essential aims. mr. bessent on behalf of my colleagues i thank you for your willingness to serve and again, congratulate you on your support. and on your nomination that i intend to support. with that i recognize ranking

member wyden for his opening remarks. sen. wyden: i appreciate you introducing all the new members on both sides. as always, very kind comments about me, very appreciated. in a trump economy, the winner'' circle is small and dominated by the ultra-wealthy. working people and in the middle class are on the outside looking in. trump and his advisers are in different to the problem -- in different to the problems they face each day. i have had more than 1100 open to all town hall meetings in my state. i will have several more this weekend. the second word i hear from oregonians in those meetings is almost always bill. medical bill. electricity bill.

americans feel held down by the cost of living. they look at the growing fortunes at the top and they weigh that against their sense that america's middle class just does not have the opportunities to really get ahead. the american people voted for change, and more than anywhere else, they want change in the economy. i do not believe they will get it from mr. bessent or donald trump. the centerpiece of the drug economic agenda is extending his 2017 tax law at a cost of more than $4 trillion. ultra-wealthy individuals that rake in millions each year would get tax breaks of hundreds of thousands of dollars. families who live paycheck-to-paycheck would be lucky if they can adjust get enough to cover the grocery bill for a week.

how do donald trump and republicans plan to pay for their multitrillion dollar giveaways to the ultra-wealthy. for starters, they will be offering, across-the-board tariffs. let's be clear about what that is all about. trillions of dollars in new taxes paid for by working americans and small businesses. to me, the ultimate distillation of the trump agenda is paying for tax breaks for the top by increasing child hunger, putting tens of millions off their health insurance, and laying off hundreds of thousands of manufacturing workers. it feels, to me, like a class war on typical american families. and the nominee, if confirmed, will be right in the middle of it. donald trump will be waging

class war instead of fixing what is broken about the tax code. which is, there is a special set of rules which apply only to the ultra-wealthy. make no mistake about it. the ultra-wealthy people get to pay what they want when they want to. and often little or nothing for years on end. mr. bessent's case in point. the taxes that fund medicare or automatic for the vast majority of americans. they come straight out of every paycheck. it is a civic duty that pays off as earned benefits down the road. but, like a number of wall street fund managers, mr. bessent makes use of a tricky legal maneuver topped out -- maneuver to opt out of paying into medicare, a tax loophole that hurts medicare, but benefits him to the tune of hundreds of thousands of dollars each year.

now, the treasury department has gone to court to argue that taxpayers taking this position are violating tax law. make no mistake about that. that's not me making the judgment. that is the treasury department. they went to court to argue your that taxpayers who take this position are violating the law. i believe it is a big conflict of interest if the nominee is confirmed. either he and his lawyers take the position that treasury policy does not apply to the treasury secretary, or he blesses a loophole that lets wall street titans blow off their fair share of medicare taxes. this is exactly the kind of abusive scheme which leaves americans feeling disgusted with the tax code. they feel it every spring when they file their taxes through big software companies as well. it is absurd that americans get

charged huge amounts of money to file their taxes every year. that is why a number of us in this room were hard to create the new direct file program with resources from the inflation reduction act and the biden administration. it is a free option that allows taxpayers to file returns directly with the irs. no software middlemen picking the pockets or harvesting the data. it launched last year to rave reviews and virtually nowhere in the western industrialized world do we have the kind of bureaucratic costly system we have today. we are trying to change it. 35 million americans across 20 five states -- excuse me, 30 million americans across 25 states will be eligible to use direct file this year. that is if it continues to survive. software giants want direct file killed.

republicans are their side. maybe they will get their way. if they do, it will cost american taxpayers hundreds of millions of dollars this year alone. trump and republicans are not stopping there when it comes to siding with special interest over the typical consumer. the inflation reduction act was the largest investment in clean energy in our history. it was largely developed in this room. it took years to -- to try to find common ground around neutrality. the more you reduce carbon, the bigger your tax savings creating hundreds of thousands of jobs, saving consumers money on energy bills and along with record fossil fuel production it has brought energy security to a level not seen in generations. our country is in a clean energy arms race with china and other powers. but unfortunately, these policies from donald trump and republicans might prevent us

from winning the arms race with china. that is because the trump administration is talking about selling out to special interest and far right ideologues that want to new the privet -- eliminate incentives that put us in the lead on clean energy. from what i have read, that is how the nominee sees it as well. it would be a recipe for higher energy costs, weaker energy security, and surrender to china when it comes to clean energy jobs and investment. in my view, that advice -- that defies common sense. many people, myself included, hoped the president elect would pick a steady hand for treasury of secretary -- secretary of the treasury, a moderating force

that would work with all sides for the interest of all americans, for a tax code gives everybody in america the chance to get ahead, not just the people at the top. this is an important discussion today and i wish i had read something that would indicate this nominee would be the kind of treasury secretary are described. that is why we had the hearing to get his views. thank you, senator. chair crapo: thank you senator wyden. today we are honored to have our good friend and colleague and budget committee chairman senator lindsey graham to introduce the nominee. welcome, senator graham. from the great state of south carolina. i want to thank you for joining us today and i will turn it over to you to introduce mr. bessent. sen. graham: thank you mr. chairman and ranking member at all my colleagues. there are only 100 of us and we know each other pretty well. this is my first appearance in the finance committee and probably last.

y'all work on complicated stuff. i'm glad you like this stuff. it seems kind of boring to me, but it is important what you do. i respect the intellect of the people on the committee because our economy needs the best minds we can find on the finance committee. and we need a secretary of the treasury that knows what he is doing, has the trust of the president, and has the trust of the president. your ship came in with this guy. he is academically gifted and real tested. he went to yale, so nobody is perfect. when he told me that i said i don't know about that. but anyway, he is really really smart and this is a compensated area. why am i here? because trump won. i would not be here if trump had not won. trump won because more people voted for him. and he had to take people to

form his cabinet. when he talked about the secretary of the treasury, i am not the normal person you would go to ask about. because, this is not so much my portfolio. but, when he mentions god, i said o my god, home run, from my point of view. you are talking about somebody that is academically gifted and understands the world. scott, like any republican president, he would pick scott. he understands the president and what the president wants to do. the reason i vote for almost everybody, for every president, is i believe -- my colleague said every president deserves a cabinet they know, trust, and can rely upon. if i had to vote for people based on a green with them, --

based on agreeing with them i would not vote for anybody you pick. i vote for people i disagree with because i think they are qualified. i asked the committee to think, is this man qualified? does he have the background, the intelligence, and the character to serve president trump and our nation's secretary of the treasury? i think any reasonable qualifications beyond the -- he excels, beyond the bare minimum to the highest level of excellence but that is just my opinion. my goal today is to tell you about him. you have heard from the chairman about his success in the financial world. about his academic qualifications. he was born in little river, south carolina. why do they call it little river? because it's little. and it's a river.

it is in ouray county -- horry county. it is between conway and myrtle beach. at nine years old his first job was to set up beach chairs and umbrellas in north myrtle beach. apparently, he did well there. because, north myrtle beach is thriving. he went to north myrtle beach high school and was voted most likely to succeed in 1980. we have a high school classmate of his. what did they see in him? the same thing i see. someone who is really talented and works hard and is a good person. the kind of people you think will succeed, but you hope succeed. so, he lives in charlston. in a really nice place.

going from little river to charleston is about a two and a half hour drive. it's a real change. since i represent south carolina i like them very much. he is married and they have two kids, caroline and cole and they are adorable. from a south carolina point of view we are very proud of scott. i was over-the-top happy when president trump picked him. because i know him. i know where he came from. the rich and powerful do not live in little river. this is truly the american dream. this man has been successful with everything he has ever tried to do. he has worked really hard. why did president pick him? because he believes president trump's economic agenda is good for the country and he wants to help president trump be successful.

here is what scott said. i think it is the building of economic policy with national security, economic policy and national security are now indispensable and a donald trump understands that. i agree. if we go -- do not have energy independence we are less safe. if we do not get our debt in order we are less safe. i am known as a national security guy but i understand that economic policy matters. if you want to clean up the environment, a carbon fee seems to be a good way to do it to punish china and into their bad carbon practices. call it a tariff or whatever you want. president trump won. i am here today because he won. i am here today because scott lives in south carolina. i am here today to tell you if you use qualifications as your test, this isn't the easiest

vote you will ever take. if your goal is to play like the election did not happen, then i guess you will vote no. that is just where we are heading in the senate. when you lose an election, do you get all dashed up and dust yourself off and ready for the elect -- when you lose an election do you get up and dust yourself off and get ready for the next one? i was honored when he asked me to introduce him because i know this man and a miracle will be in good hands if he is our secretary of the treasury. he deserves this job. he is qualified for the job. president trump, thank you for picking him. on behalf of all of us in south carolina, we are extremely proud of you and we wish you well. thank you. chair crapo: thank you, senator graham. we appreciate you giving the introduction and now you are excused, as is our practice. mr. bessent, before we turn it over to you for your opening

statement i have four questions we ask all nominees that come before the committee. the first is, is there anything you are aware of in your background that might present a conflict of interest with the duties of the office to which you have been nominated? mr. bessent: no, sir. chair crapo: second, do you know of any reason, personal or otherwise, that would prevent you from fully and honorably discharging the responsibilities of the office which you have been nominated? mr. bessent: no, sir. chair crapo: third, do you agree without reservation to respond to any reasonable summons to appear and testify before any duly constituted committee of congress if you are confirmed? mr. bessent: yes, sir. chair crapo: finally, do you commit to provide a prompt response in writing to any question addressed to you by any senator on the committee? mr. bessent: yes, sir. chair crapo: welcome to the committee mr. bessent for you to make your opening statement.

mr. bessent: chairman crapo, ranking member wyden, members of the finance committee it is an honor and privilege to be considered as the president's nominee for the secretary of the treasury. i want to thank all of you that took the time to meet with me over the past few weeks. i want to thank my spouse, john freeman, who is here today, and my wonderful children, cole and caroline who are sitting behind me. chair crapo: can you pull the microphone a little closer to you? mr. bessent: who are sitting behind me for the ultimate civics lesson. i want to acknowledge three people that could not be here today. my 98-year-old mother-in-law celine freeman, a world war ii french war bride of an american soldier who lives with us in charleston south carolina making for a three generation household. my sister, page macleod beth sent -- bessent that does not

like crowds, and my recently deceased sister who worked tirelessly as a public defender in one of south carolina's poorest counties. and i want to thank donald trump for having placed his trust and confidence in me for such an important role in his administration. while i have met with many of you, most americans watching at at home may be unfamiliar with my background. i have been blessed with fulfilling and successful career but my presence here today was so far from predetermined. i was born and raised in the south carolina low country. my father fell into extreme financial difficulty and i was young. when i was nine years old i started working to summer jobs and i haven't stopped working since. i eventually made my way to yale , i accepted my first internship and finance because the job came with a pullout sofa and the office to sleep on which allowed me to live in new york city rent

free. i have been involved in the financial markets ever since. i've been fortunate enough to work with some of the world's greatest investors in a career that has taken me to almost 60 countries over 40 years. my life has been the only america story that i am determined to preserve for future generations. i believe president trump has a generational opportunity to unleash the new economic golden age that would create more jobs and -- wealth and prosperity for all americans. my life's work in the private sector has given me a deep understanding of the economy and markets and while this experience will be invaluable in crafting economic policy, i've longed here to the principal you should know what you don't know and lean on those who do. having never served in government, i intend if confirmed to be in close contact

with each of you and your offices and seek your counsel. the treasury department plays a critical role in protecting american national security. we must secure supply chains that are vulnerable to strategic competitors and we must carefully employ sanctions as part of a whole of government approach to address our national security requirements and critically we must ensure that the u.s. dollar remains the world's reserve currency. today, americans face significant challenges in an economy that has not created enough opportunities for working men and women. we have an affordability crisis, a housing shortage and for the first time in my lifetime parents feel as though the american dream is slipping away from their children. the federal government has a significant spending problem, driving deficits that have been at historically high 7% of gdp

during the past four years. we must work to get our fiscal house in order and adjust federal domestic discretionary spending that has grown by astonishing 40% over the past four years. productive investment grows the economy must be prioritized over wasteful spending that drives inflation. as we begin 2025, americans are barreling towards an economic crisis at year end. if congress fails to act, americans will face the largest tax increase in history, a crushing $4 trillion tax hike. we must make permanent the 2017 tax cuts and jobs act and implement new progrowth policies to reduce the tax burden on american manufacturers, service workers and seniors. i have already spoken with several members of the committee as well as leaders in the house about the best approach to

achieving these important goals together. as president trump has said, we will unleash the american economy by implementing progrowth regulatory policies, reducing taxes and unleashing american energy production. the breadth and depth of our capital markets are the predictable progrowth tax policy and smart updated regulation will continue to make america most popular destination in the world for starting growing and taking part in a business. and as we rebuild our economy and lay the foundation for the next generation of american competitiveness, we must use all the tools available to realign the economic system to better serve the interests of working americans. for too long, our nation has allowed unfair distortions in the international trading system. president trump was the first president in modern times to recognize the need to change our

trade policy and stand up for american workers. if confirmed, i would look forward to working with president trump and members of this committee to do just that. members of the committee, these are just some of many important goals president trump has laid out for me and others on his economic team. i firmly believe that if confirmed and with your counsel and support we can usher in a new or balanced era that will lift up all americans and rebuild communities across the country. i humbly thank you for your consideration and in eager to take your questions. chair crapo: thank you mr. bessent. before i begin my questions i want to reemphasize how appreciative i am of your diligence in the process that we are going through vetting he in the senate. i appreciate the more than 3000 pages of supporting material you provided as well as the countless hours you and your staff of offered to respond to

questions from members of this committee. let me be clear, you followed all the applicable law and that the committee's long-standing diligence standards but your process match that which is applied to nominees in every previous administration. in my first question to you i want to go to the tax cuts and jobs act which senator wyden and i have both mentioned already and you mentioned in your remarks. the attack on this statute, of this law, which is law. i will remind everyone it was passed in 2017. is that it was a tax cut for the wealthy. i appreciate you mr. bessent noting that it will be a four plus trillion dollar tax increase if we do not extend this law. and a point that i would remind all of my colleagues. the tax increase happens it's

not just going to be something that impacts the wealthy. it is 2.6 trillion of it. the majority of it falls on people who make less than $400,000 for a family with two taxpayers. under $400,000. that's the number president biden shows to say he wanted to protect 2.6 trillion of this tax cut is those making less than $400,000. moreover, massive amounts of it pass-through entities. small businesses across this country. this is not a tax cut for the wealthy that we are talking about. it is a tax increase on all americans. the majority of whom are in the lower and middle income categories. my question to you is one of our pivotal tax is to make sure this tax increase does not happen.

can you give us your perspective on the impact that would occur in this country if we allowed this for trillion dollar tax increase to happen. mr. bessent: senator, thank you for this and thank you for the meetings over the past few weeks. i've enjoyed working with your staff and this is the single most important economic issue of the day. this is pass fail. if we do not fix these tax cuts, if we do not renew and extend, then we will be facing an economic calamity and as always with financial instability, that falls on the middle and working-class people. we will see a gigantic middle-class tax increase, we will see a child tax credit cap.

we will see the deductions have. so it will be what we call in economics it has the potential for a sudden stop. and as i said, traditionally with these sudden stops, it falls on working americans. chair crapo: you may be aware of this but the tax foundation is indicated that if we do sustain these tax cuts and protect them from expiring and stop this tax increase, the extension of this policy would increase the growth of the gdp in the united states by 1.1% over time. similarly, at a don't know how they came up with the same number of the national association of manufacturers indicates if we do not extend this tax relief, that there will be a 1.1% reduction in growth of

-- of jobs and development in our economy. it seems to me, that as we are talking about what to do for american, that protecting america from a 1% reduction versus a 1% growth in gdp is a critical objective. could you just give a little bit of perspective. i know you just answer this question in another context but could you give a little more -- perspective on those kinds of dynamics. i will try to keep to five minutes and we've only got about 15 seconds left. i want to make sure everybody else stays on time so i will too. mr. bessent: i would just say the power these tax cuts in 18, 19 and going into january of 20 before they were interrupted by covid and the great success we had. mr. bessent: thank -- chair

crapo: thank you. senator wyden: i've got four questions that i will ask and if we both can keep it brief i think we can get to all of them and you can really frame for us what this debate is all about. i will start by talking about the future of direct file. this is the program that helps people who choose it to save hundreds of dollars when they file their tax return. last year, the irs launched it, it was enormously popular among taxpayers, but of course the tax software giants in their big lobby hated it. they want to shut it down. now the filing season starts january 27. so it opens in 10 days and millions of taxpayers around the country have already been notified that they will be eligible to use direct file this year. so i won't do this for every

question, but i would really like a yes or no on this one. will you commit to keeping direct file up and running if you are confirmed? mr. bessent: i will commit that for this tax season, that direct file will be operative and the american taxpayers who choose to use it will and if confirmed i will consult and study the program and understand it better and make sure that it works to serve the irs's three goals of collections, customer service and privacy. sen. wyden: i appreciate the answer. it means that taxpayers will save who choose to use it because it is voluntary, hundreds of dollars and will of a chance to see once again how popular it is with practically everyone except the taxpayer --

tax prep software crowd. donald trump, with no plan and no strategy says he is going to put across-the-board tariffs, blanket tariffs on all imported goods, which means that our workers and small businesses are going to get clobbered with additional taxes on probably everything they buy from other countries. my question here is who would pay these tariffs, americans or foreign countries? mr. bessent: senator wyden, just to understand, so i can frame the answer correctly. do you believe that these tariffs are a consumption tax increase? sen. wyden: i believe these tariffs, you can call it whatever you want in terms of trying to gussy it up, they will be paid for by our workers and small businesses. all through the campaign we heard foreign countries would

pay it. it is going to be paid for by workers and small businesses. mr. bessent: senator, i would respectfully disagree and the history of tariffs and tariff theory does not support what you are saying. traditionally, we see -- if we were to use a number that has been thrown around in the press of 10%. then traditionally the currency appreciates by 4%. so the 10% is not passed through. then we have various elasticities, consumer preferences may change. and finally, foreign manufacturers, especially china, which is trying to export their way out of their current economic malaise. will continue cutting prices to maintain market share. sen. wyden: that is an academic

view of it but what i know is the history of this is it clubbers people of modest means. they are the people who will get hit. all through the campaign there was a big show it would be paid for by foreigners. two other questions i want to get in. and i already made it clear when i talked about this. i am for a tax that gives everybody the opportunity to get ahead. when i talk about my friend bill bradley. and i've been working for this for years. do you believe the tax code should treat wages differently then it treats wealth? mr. bessent: the -- in any tax system they advantages and creates distortions. it is a change -- senator, it is a decision that was made when the tax code were written and --

so every tax code's -- and, involves the trade-offs and distortions and in favor of other --, gains. sen. wyden: it sounds to me like you do believe that is fine to treat wealth more favorably. i couldn't disagree more. the idea that a dollar earned by hedge fund manager is more valuable than a dollar earned by a teacher or factory worker. i just think it is a disconnect with the american people. one last question and that is about the legislation that was written in this room that was the biggest transformation on clean energy in american history. that is our package that basically said the tax code as it relates to energy is a broken down mass. we basically said we will have a technology neutral system, the more you reduce carbon, the bigger tax savings. now there is big effort in the trump administration to reverse

it. i think that will be bad for the economy but it will be good for china because we are in an arms race on clean energy. will you be on the side of people who are looking to unravel this? mr. bessent: senator, senator wyden. just so we can frame this for everyone in the room. china will build 100 new coal plants this year. there is not a clean energy race. there is an energy race. china will build 10 more coal plants this year. that is not solar. i am in favor of more nuclear plants. and i would note that the ira as scored by the cbo, is wildly out of control in terms of spending on the upside. sen. wyden: first of all, the clean energy package does prevent because members on both sides of the aisle wanted to be that way. what if you're going to talk about fossils, the united states

has achieved a greater level of energy security and we have had in generations. oil and gas production is at record highs and it's not just that, it's about clean energy and i'm very troubled by your position denying that we are in an arms race with china on clean energy because we definitely are. chair crapo: i told senator wyden he could have those four questions but i want to remind everybody a five minute time limit. senator grassley. senator grassley: congratulations. i want to start out where you and i talked about something in my office and you remember that tongue-in-cheek comment i made to you that you were going to be asked by the chairman will you answer all of our letters and everybody that comes to the hill says yes they are going to and i said maybe you better say maybe. because most people don't keep that promise. so i just want to remind you if i write you a letter, i would

appreciate it if you would answer it. now my first question. my democratic colleagues -- if you'll put that up, my democratic colleagues believe the only solution to our unsustainable debt and deficit is higher taxes. higher tax rates on and that ends up being on job creators and families alike. however, history proves that high tax rates failed to raise significant revenues, taxpayers workers and investors are smarter than that. and in other words they are smarter than we in congress that thinks at one time a 93% marginal tax rate would bring in more revenue. then a 70% tax rate or a 50% tax rate or a 30% tax rate. or a 43 sent tax rate. and so on, but as you can see from this chart, congresses and

too smart because the taxpayers decide how much money they will bring into the federal treasury. on the others of the ledger, federal spending is at levels we've never seen outside of -- and still growing. so i am making a statement but if you would like to comment on whether or not we have a fiscal balance or a spending problem rather than a revenue problem. mr. bessent: senator, i enjoy visiting you in your office and will remind you that when we were talking about the american agriculture that i may be the first treasury secretary nominee and a long time who knows what a section is, 642 acre. involved in the farming business. yes, we do not have a revenue problem in the united states of america we have a spending problem.

that historically for the past 40 or 50 years, revenues, federal government revenues have averaged about 17 to 17.5% of gdp. and spending has been slightly over that, leading us to 3.5% budget deficit. which is manageable because we have roughly 3.8% nominal growth. 1.8% real growth, 2% inflation rate today, as you stated and to be clear, this is one of the things that got me out from behind my desk and my quiet life and this campaign, was the thought that this spending is out of control. we are spending about 24, 20 5% of gdp. as you said, 6.8 to 7% deficit. we had never seen this before when it is not a recession or not a war.

and i am concerned because several times the treasury of the united states has been called upon to save the nation. whether it was the civil war, the great depression, world war ii, or the recent covid epidemic, treasury along with full government and congress has used its borrowing capacity to save the union, to save the world and to save the american people. and what we currently have now, we would be hard-pressed to do the same. sen. grassley: my last question, all one ask a lot of people come from treasury, while i oppose tax hikes on individuals and families and small businesses, i've long championed sensible policies geared towards shutting down tax loopholes and providing tools to irs to tax cheats,

primary example is my legislation that i authored in 2006, the irs whistleblower law that brought $6 million back to the federal treasury, of this program could raise billions more for irs to its full potential. so i hope i can count on you if you are confirmed to be supportive of this whistleblower program and work to ensure its full use, to its full potential. mr. bessent: senator grassley, we are in complete alignment on this program. chair crapo: next would be senator cornyn. sen. cornyn: welcome to washington, d.c.. forgetting a taste of what it's like here which is an out of body experience for most people who are not acquainted with it.

i happen to represent a state that has the eighth largest economy in the world. we think we understand the formula for economic growth and prosperity and opportunity. we can lower taxes, a modest regulatory footprint and opportunities for people to prosper and by prospering, invest and create opportunities for other people to pursue their dreams. we think there is a lot washington can learn from that formula and that sounds to me like you agree. one of the strange experiences i've had here is so many of our colleagues, principally on the other side thinks that the money you earn is not actually yours. it's the federal governments and you just get to keep it. conversely, i believe the money people earn is theirs and they have a responsibility to pay taxes, but as you point out, and

overtaxed burden or large tax burden has a way of depressing the economy and reducing standard of living. so i'm grateful for your nomination and i think you are exactly the type of individual that needs to serve in this important position. let me ask you in the short time i have one sort of obscure question and another one that we discussed in our office. as you know, of the market for u.s. treasuries is the largest market in the world at $20 trillion and is critical to the financial stability the united states. there is actually a proposal for an entity to declare u.s. treasury futures at the london clearinghouse, which is overseen by the bank of england. some argue the bank of england would have control over a heaven forbid, a default scenario in

this critical market instead of the u.s.. is this a concern to you? mr. bessent: senator cornyn, i've enjoyed visiting in your office and i would note that while texas has more arrivals due to good economic policies, south carolina has more arrivals as a percent of the population. also driven by our wonderful governor. sen. cornyn: i'm still going to vote for your nomination. i think at 1600 people a day in texas. but go ahead. mr. bessent: i -- everything is bigger in texas. you, you raise a very important question and one that i will investigate further. i was unaware until the past few days of this. what i can tell you is as a student, professor of economic

history, that it is important for the u.s., for u.s. treasuries, for us to be able to resolve any stress issues in the market in the u.s.. we saw this during the lehman brothers bankruptcy. that much -- many of the problems emanated from the u.k. subsidiary. so this is something, thank you for bringing this to my attention. and -- i -- my inclination is the resolution authority must rely here in the u.s. but i will get back to you in writing with an answer on this if confirmed. sen. cornyn: you properly mention china as one of our biggest challenges. and while i believe in free and fair trade, we know some countries, principally the prc and the chinese comet's party do not play by the rules. over the years, by some

estimates u.s. investments in chinese companies totaled $2.3 trillion in market value. that was at the end of 20/20 and that included $21 billion, these are american companies investing in china. 54 billion in military companies and 220 one billion in artificial intelligence. so it's pretty clear to me that u.s. investments have fueled china's economic growth, which has allowed them not only to increase their standard of living which is great for the chinese people, but problematically it is also allowed them to modernize their military and now threaten the peace in the indo pacific and beyond. as we discussed, i've introduced a bill that would require transparency of american companies investing in china and of course the entity that would receive the reports from american companies that do that

and since it is strictly reporting environment would be treasury. what is your view on that investment transparency requirement? mr. bessent: senator cornyn, i believe as we discussed in your office, this is an important issue. that the -- we can, the chinese economy is the most imbalanced, unbalanced economy in the history of the world. they are using their surpluses to fund their military machine in china. but there is a phrase that is two words. military-industrial. military always comes first. we should understand that. and, we should have a very rigorous screening process for as you identified anything that

could be used in ai, quantum computing, surveillance, in chips, the u.s. has to lead and we must make sure that we maintain it, through smart policies such as what you and i discussed. senator bennet: thank you for being here. mr. chairman, congratulations on your position rate i look forward to working with you as i always have. mr. bessent, thank you for your willingness to serve. we are at the beginning of what will be a vigorous conversation about the country's fiscal health and you described your deficit as alarming. and yet you are here with the same trump tax policy that has burdened the american people with another $2 trillion in debt that their kids and grandkids are going to have to pay back, and despite the conversation we have heard over here, clearly the distribution of it was deeply unfair.

50% of it went to the top 5% of americans. 75% of it if you add the salt, which even the wall street journal won't support because it is so unbelievably outrageous will go to the wealthiest 5% of americans. the tax policy is one that is for some reason in this room it makes sense to people. in america i don't think there has been a mayor -- whose tax policy has been to go to the people of new york city or atlantic city, or even of mar-a-lago and said i have an idea i will borrow more money than we have ever borrowed in the history of the community and i'm going to spend it. i would say i'm worried about that. what is it going for print is a going for schools. no. is it going to compete with the chinese and their defense, no. is going to pay for parks, no.

is it going to deal with the mental health crisis that we have in america. no. is it going to pay to secure our border? what are you doing with the money? what were you doing with the money mr. mnuchin. what were you doing with the money. the answer is we were going to give to the richest people in america. the richest people in our community and expected somehow that will trickle down to everybody else. that has been the trump tax policy since the day he showed up and no mayor in america whatever with a straight face say that's what they should do. in fact no american in history has done that. but to add insult to injury you sit here and mr. mnuchin sat here in his time and said it's all going to be paid for by economic growth. we know that is not true. we know it cost $2 trillion. so while the benefit went to the richest people in america, of the cost is being borne by the children of working people all

over this country. that's what's going to happen now. it is $4.6 trillion this time. not $2 trillion. and then you come here and here is my question. you come in and sneak to your opening statement that we have a spending problem and what we have to focus on as you said is discretionary spending. after your crocodile tears about the, how china is out competing us. and as you know because you are smart person and you spent a lot of time on wall street just like your predecessor did. discretionary spending is about one third of our overall spending. 17% of what we spend is domestic. 70% is roughly military spending. dust 70% is military spending. there are so many things i think you owe the american people after we have seen the catastrophe of the result from

the tax cuts the last time and the fact the benefits went to the wealthiest people. don't you at least owe the american people a refund for the $2 trillion they have already incurred because of the last round before you get to the 4.6 trillion. can we think of a better idea in the halls here then cutting taxes for the wealthiest people and expecting that it will trickle down to everybody else when we have the profound needs that you have talked about when we are living in an economy, you had the american dream. we heard you say that. fewer and fewer people can get ahead. where this generation of americans will be the first generation to be less opportunity not more to our kids and grandkids. where we see massive income inequality and wealth inequality when trump was president, when biden was president. can we think of a better idea than that? and at a bare minimum, don't we

owe them an answer about what you are going to do to that 17% of discretionary spending, or even the one third before you come in here and say the most important thing we should do is cut taxes for the richest people in america. mr. bessent: senator, thank you and i would respectfully disagree with much of your categorization in terms of the benefits accruing to the richest americans. the share of taxes paid by the upper percent of americans increased after tea cja. it went from 39 to 46%. the top 50% of americans now pay 98% of taxes. and working families and real wage increases in 2018 and 2019 and going into 2020 pre-covid.

the cbo scoring for the trump tax cuts. rescored by 1.5 trillion. >> we are in the beginning of a long debate. that if you're going to rely on the cbo score for this you will be willing to rely on it for the things that you said it's no good. mr. bessent: i'm not in love with cbo scoring. >> that's why i'm surprised you're relying on it. i'm saying it's not funny money. this is the american people's money per week and do math. every mayor in america has to do that. and we will insist that you do the math as well because we know george soros understands the math, when you worked there and you understand well what's going on here. just like steve mnuchin did. just like donald trump does prude we are not going to let it happen again to the american people. chair crapo: thank you and i again remind my colleagues need to hold our time to five minutes. senator cassidy.

sen. cassidy: i'm always good to pronounce your name with the french, that's what those folks in south carolina do. i will try. let me complement you on some substantial answers. sometimes you get people who just rope a dope and will have a set of statements such as the one just delivered all due respect my colleague. i thank you for that. by the way, lindsey graham alluded to it, going back to terrace when senator wyden spoke of. i've been very concerned countries like china manipulate environmental regulations per you point out there building coal-fired plants. and that whatever we do will not have an impact on global greenhouse gas emissions because china is putting up so many. i believe that is called an externality in economics. when we met to discuss the foreign pollution fee which would put a tariff on those

carbon intensive parts coming from countries like china roughly commensurate with her cost of not controlling it. i would think that -- my democratic colleagues would like that because it's clearly a way that they manipulating the world economy distill jobs in the united states and simultaneously increase global greenhouse gas emissions. any comments on such a foreign pollution fee? mr. bessent: senator cassidy, i greatly enjoyed our discussion and the extensive presentation you gave me when i visited with you and this is a very good question because, and i believe it is one for your democratic colleagues to understand whether they would be in favor of the equivalent of a carbon tariff that senator graham is in favor of it, and i think this is a very interesting idea -- new it

could be part of a entire tariff program because i think -- president trump hasn't taken office yet, but if confirmed i look forward to working with him on various strategies, some that could be specifically aimed towards carbon as you say. others that could be aimed towards unfair trade practices, unfair financing. >> there's externalities that a tariff can address. those in and of themselves are the pocketbook job prospects of the average american. i think you would agree with that. i applaud your goal down to 3%. but you studiously and thinking

about social security this could be a benefit to raising taxes. i and others have a bipartisan plan that would create a pension investment fund and just like we do with our 401(k)s investing in the broader economy and use the proceeds from that to offset the upcoming 25% cut in social security benefits that will occur. and just so folks get that rate under current law when the social security program goes insolvent in eight years for the cbo there'll be a 25% cut in benefits. under the plan we endorsed it's a pension investment fund which would again invest in the broader economy. with all the safeguards to eat the government from interfering. i mention that because it seemed other advisors to the incoming president of spoken of creating an investment fund and benefit.

mr. paulson did on the campaign trail. what are your thoughts about that concept, i think they spoke about it a sovereign wealth fund. we spoke about it as a fund to bailout social. all of this brought by the fund, not borne by the beneficiaries. what are your thoughts on that. >> first of all i want to emphasize the president trump has said. sen. cassidy: and i believe -- a line i'm saying touch in a positive way. and take that 15% cut. mr. bessent: those would not be touched. one of the tragedies of the blowout in the budget deficit is we have to short-term house in order to start -- before we can

start in plumbing a smart plan such as yours. i do believe that there is discussion to leverage the asset side of the u.s. balance sheet as we discussed in your office in favor of a fund whether it's a sovereign wealth fund, something is you discussed, is supplemental fund, so that is very much in the mix. i look forward to giving -- getting back to you on it. president trump hasn't taken office yet. and if confirmed, this is something that i think could be very exciting because we always look at the debt of the united states and we have fantastic assets that could be earning leverage or used for multiple

revenue-generating opportunities. chair crapo: senator warner. sen. warner: good to see you and enjoyed our meeting. i have some specific questions i want to ask. i don't want to litigate this now. but i do feel as someone working with others when we took on -- i just don't think the most comprehensive and we took arrows from each side. and i'm looking at any kind of progrowth policies possible. i just respectfully want to say there is not an industrial nation, first world industrial nation that gets anywhere close to meeting the revenue needs and i'm not proposing america spend anywhere like the europeans at 17 to 18%, it's never happened historically. it's not going to happen in a trump administration, a future democratic administrations. we will have time to talk back and forth on this, but i can't

let some of this go without at least offering something that economists around would concur. we have to bring down spend, but the revenue side alone is not that. excluding that we will never get to a balance. a more positive note, something i worked with the chairman on. and actually with your predecessor. i was proud of that. i just agreed to sector, new show in things but one was a relatively narrow part of the financial sector called cdfi's. we put about $12 billion in. this serves access to capital for underserved communities. we built a bipartisan caucus, it's tough to get 24 bipartisan centers on anything. there are things we can do to

continue to expand this area and create a secondary market. we passed bipartisan legislation there a lot of these institutions now have tier one equity but they have to get patient capital and we worked with the current administration and i will work with yours to help the economic opportunity coalition. can you say a word or two about how you view these and this making sure that communities get the access to capital so they can have their own american dream. mr. bessent: senator warner i enjoyed talking with you about these in our -- in your office. i am -- in the early part of my career was as a financial services analyst. so i have a depth and breath and i believe that the breadth of the u.s. financial services industry is what makes the u.s.

economy -- differentiates the u.s. economy from the rest of the world and i think the addition of these cdfis into underserved communities is important. sen. warner: i appreciate that and it is bipartisan. you understand markets well. if we could spark a secondary market in this if we could leverage, i'm talking about private capital. private capital, if we could leverage it exponentially. one of the things we discussed. and we talked abut this in my office. one of the things i was happy to hear. i feel very strongly that we cannot reward vladimir putin's aggressive, outrageous behavior in ukraine. i think the ukrainians have performed remarkably. they have manpower issues, i see

this from the intel site on a daily basis. one of the areas that i think we have not done as well and candidly, the sanctions regime. i don't think it was as effective as it should be. i think the biden administration waited too late to put additional sanctions on oil and tankers. the ability for russia to retool. i hope president trump can settle this. hallelujah. the world would be better off. one of the things we discussed was the potential to actually increase sanctions regime as a way to help further leverage that. would you care to talk for a moment about that. mr. bessent: yes, senator warner. i believe that the sanctions regime, especially -- first of all i would say in my adult life , that the tragedy going on in ukraine is one of the greatest tragedies of my adult life.

and ending that as soon as possible and dashing any role the treasury can play with that if confirmed, i would like to do. as we discussed, i believe that the sanctions were not fulsome enough. i believe that we -- i believe the previous administration was worried about raising u.s. energy prices during an election season and i am -- perplexed to see that national security advisor sullivan on his way out the door is raising the sanctions level on russian oil companies and indeed the oil prices in the u.s. are up about 9% this month. so what was good for that

administration is being foisted on us. but, having gone from i think low-level sanctions to mid-level, that if any officials in the russian federation are watching this confirmation hearing, they should know that if i am confirmed and if president trump requests, and as part of his strategy to and the ukraine war, that i would be 100% on board for taking sanctions up, especially on the russian oil magnate's to levels that would bring the russian federation to the table. sen. warner: let me just get 30 seconds. thank you for that because i think it is important that we don't take these tools out of the toolkit. what the passivation -- but increasing pressure on putin to bring about resolution. i very much appreciate your willingness and i hope you will be an advocate for keeping those

sanctions on and advancing them even further. thank you mr. chairman bring -- mr. chairman. chair crapo: senator lankford. sen. lankford: i was adjusted to hear the statistic you shared that after the tax cuts and jobs active 2017 now if it several years to see what happens and i believe the statistic you gave is the top 50% of earners in america now pay 98% of the taxes. to hear that correctly. because i've heard over and over again that it's only the wealthy, only the big companies. i would encourage every oklahoma company that's a small business to ask their cpa this year when their filing their taxes what if the tax cuts and jobs acts expires, what would my taxes be next year and have small business owners ask a question of their cpa and i think they will be quite surprised based on the rhetoric to say this is only about big companies and wealthy

people and small businesses will find out it's them as well. the same thing on the child tax credit. it gets cut in half and the child tax credit. and all the inversions happening in the obama administration where american companies were being bought up by foreign entities, now that's switched right now american companies are buying foreign companies in those jobs are coming here. there's been a trim not a benefit. one challenge we've had on this committee has been a conversation with janet yellen aboutng a line it started four years ago, now three years ago where the conversation was about we don't really need congress to act on this we feel like we can do it unilaterally and change america's tax policy for all businesses in america and now they've shifted to say we will have to come back to you at some point. in the meantime a has been negotiated that literally helps european countries and hurts the united states on this. and they negotiated a deal that

exempts china from being affected by this at all. my question is are you going to engage on this issue. have this committee involved in writing taxes which seems to be consistent with the constitution , and what is your message to other countries if they try to implement on american businesses. mr. bessent: thank you senator. as we discussed in your office. i believe that any -- especially european country, but any country in the next few days before president trump takes office is intent on implementing -- will find a great mistake. the taxation of u.s. companies is a sovereign issue and it is -- that authority lies with this congress and i will respect that and work with you to undo what i think has been a terrible

policy. . sen. lankford: which i would agree. not only going around congress violent in the constitution, the liberally hurting american companies. i think that is really terrible policy. it truly was america last policy. on the energy side you've talked a lot abut energy production. i'm oklahoma and unashamedly we are all of the above. we probably have more wind end hydro and solar production in my state than any other state on this with very few exceptions. we also use oil and gas. we are going to produce all of the energy that our state needs to be able to make sure we stay stable. one of the issues that is a business issue for small or large businesses that i've been fighting for is a stable bonus depreciation. this is not about the type of energy nor the type of business, it's if you are investing in your company and trying to grow your company then you would know

what that bonus depreciation but this would help the pipeline productions but also help a pet shop and hair salon and restaurant just as much as well. so thoughts on bonus depreciation and a staple rate for that brain mr. bessent: you are referring to the 100% immediate. sen. lankford: it has been in the past but quite frankly the stable rate period. we have a diminishing rickets unpredictable. >> i think increasing the after-tax return on capital for u.s. companies especially small businesses is one of the greatest forms of job creation. and to go back to your point on energy production, we have heard much here today on a record mode of energy production. we are barely above where we were in 2020 and we were to look at the department of energy projections for 2024 and 2025,

we are well below those. the past four years we've seen u.s. production constrained as part of a fulsome sanctions program that we need more energy production in the u.s. to make up for the loss of sanctioned russian oil. sen. lankford: which is american jobs and american oil, which is one of the things we will have to deal with. driving up the cost for consumers as well. that's another issue this committee needs to take on. chair crapo: senator hassan. sen. hassan: thank you for being here. congratulations on your nomination and for your willingness to serve and welcome your husband and children as well. we are grateful for their dust for them to share you with the country. i appreciate you meeting with me in this process and sharing your

priorities in treasury few are confirmed braid i want to follow up on some of those topics. i also want to associate myself with the comments of my colleague senator bennet and warren warner, i certainly believe we need to cut taxes for working people and make sure the wealthiest pay their fair share. and with regard to senator warner's comments on sanctions. you mentioned to vladimir putin is watching this hearing, he is not the only one watching braid china is watching this hearing and we have talked about the importance of making sure that we are not only competitive, but outperforming china for economic purposes as well as national security reasons. and as important as a resolution in ukraine is. history tells us that appeasing tyrants at the expense of freedom fighters never works. and it is critically important not only for the ukrainian people, but for the freedom of all of us, but it is important

because china and north korea are also watching what we do and this hearing and how we will go forward imposing sanctions. turning to some of the topics we discussed when we met in my office. the research and development tax adduction is critical to helping us outcompete countries like china. china currently provides a 200% super deduction for r&d while american businesses can only immediate deduct 10% for r&d. i worked with senator young on a bipartisan effort to restore the full and immediate r&d deduction. do you support restoring the full and immediate r&d deduction and will you work with me and my colleagues to get this across the finish line in congress. mr. bessent: senator, i enjoyed the meeting in your office. i am not fully versed in this, but by inclination is that this is something that i would support and i will get back to you if confirmed, i will get back to you very quickly on it

and will make it a priority. sen. hassan: do you agree it is an important tool for american companies to improve their competitiveness? mr. bessent: yes senator. sen. hassan: thank you. one of my other top priorities is working on a bipartisan basis to lower cost for families. under president-elect trump's policies, do you believe prices for families will go up or down? mr. bessent: i believe that inflation will be much closer to the federal reserve's target of 2% and i believe that what we've seen over the past few years is that the bottom two income have a very different basket of goods and services. so there are two ways. we can either lower costs or we can get real wages up. i would hope that we would be able to do both. sen. hassan: so you believe president trump's policies will

further increase wages and lower inflation? >> i believe it will increase real wages and lower inflation closer to the federal reserve's 2% target as they did during president trump's first term. sen. hassan: are there any specific policies proposed by the president-elect that you expect will increase prices for families? mr. bessent: there -- nothing i can immediately think of. sen. hassan: if the president-elect were to propose a policy that you believe would increase prices, would you advise against it? mr. bessent: i would advise -- i would speak to president trump about it. it is his decision and i believe that we think that if we look back, that it is a complete composite return in terms of aggregated inflation numbers. i think it is difficult. sen. hassan: if you -- if you

believe that a policy that is proposed by president trump would increase prices, would you advise him against doing it? yes or no. mr. bessent: i can't answer that question because it is a hypothetical. sen. hassan: when we met prior to the hearing, you told me president biden was responsible for increased prices over the past four years. something we can litigate but i do not want to write here. by the same token i assume you would agree that if prices increase in the next four years, president-elect trump would be responsible. mr. bessent: i think there could be a variety of reasons. i think it could be -- we will see the policies of the federal reserve, of the spending policies congress sets the spending policies. sen. hassan: i'm just going to i am going to cut to the chase because i am out of time. at the end of the day, what you are articulating is a double standard and it's disappointing to me. thank you, mr. chairman. chair crapo: senator daines.

sen. daines: i think we are seeing here in this committee we really do have a divide between two very different philosophies about how to go forward and what is best for the american people and this economy, global competitiveness. i remember sitting in this chamber as we were debating whether or not we should launch the multiple trillion dollar massive spending bills, to trillion dollar covid bill, inflation reduction act , massive multi trillion dollar bills that even democrat former secretaries of treasury said could be inflationary, and indeed it was. you compare that outcome to what we are going to return back to the policies of the prior trump administration that when you lower taxes for businesses and the american people, you create more tax revenue, create more economic activity, create more wage growth particularly for minorities as well and you start

to get back to winning in terms of global competitiveness. we stop the inversions. we went from multiple inversions to zero once we move forward with this. i couldn't be prouder of what we did boldly back in the trump administration, we tried to fight against and during this administration, these massive out-of-control spending bills that were inflationary. the american people suffered greatly from these higher levels of inflation, mortgage rates, and so forth. i'm glad to have you as our next cemetery of the treasury to work with you to restore sanity back to where we were under president trump. congratulations on your nomination, willingness to serve. with the expiration coming of these tax rates, facing a $4.3 trillion tax increase if we don't act this year, as we begin drafting this bill, and i applaud chairman crapo.

he brought us together as ranking member last year prior to getting the majority back, anticipating we may have this moment. we talk about what are some key themes? then we got into the details working with several workgroups on this next tax bill to renew and protect, preserve the tax rates, prevent a 4 trillion dollars tax increase. one of the words was permanency. i have expressed my support for the use of current policy baseline. i've expressed my support for permanency because we and uncertainty here in congress with expiring tax code provisions. it is time to make them permanent to take one additional bird away from the american people, wondering what will happen with congress, what are my tax rates will depend on what happens in the next election or if congress acts. let's take that off the table with permanency. esther bessent, you said we need to grow our way out of our current economic situation.

i couldn't agree more. that is just a philosophical divide that we face. reduced rates, unleash capital into the free markets and let those markets decide where the investment decides rather than bureaucrats with wasteful spending. how does permanency and certainty of the tax code affect our ability to grow out of these problems? mr. bessent: senator daines, i've gotten -- enjoyed getting to know you this past year with your work on the national republican senate committee, talking to you and discussing your history in the private sector, both with big companies and small companies. a question like that makes it clear to me that you understand the incentives, that it is incentives that drive everything in tax policy. i can tell you that since november 5 for small businesses,

we have seen the biggest increase in optimism since they have been keeping the metrics. certainty, small business owners, many of whom are pass-through corporations, believe that we will get the tcja across the line. i think we could see a bigger increase in optimism in economics when we have something we cannot define, we call it animal spirits, and i think we are seeing animal spirits, nascent, move up, but permanency and forward guidance gives people confidence, we get hiring, real wages, employers want to keep, train, expand their workforce. everyone wins with permanency,

certainty. a kind of forward guidance for tax policy, i think, could be one of the things that could unleash this new golden age that president trump has talked about. sen. daines: when you look at the private sector jobs in america, about 140 million private sector jobs. 88 million of those jobs are from pass-through entities, about 63%. which tells me -- and that is the part that is expiring. the corporate rates are staying permanent. it is the pass-through rates, those eight 8 million jobs, 63% of private-sector jobs, are taking a look at what is happening in washington over the next eight months. very important we make these rates permanent and prevent a tsunami of four point $3 trillion tax increase that will come if we don't act. chair crapo: senator cortez masto. sen. cortez masto: good to see you, thank you for meeting with

me, mr. bessent. welcome to your family. i will talk a little bit about the aca premium tax credits. over 80,000 of my constituents in nevada receive that premium tax credit to assist them in affording their health care coverage. on average these credits lower and american's health insurance coverage cost by $530. congress provided an enhanced in 2021 but that policy expires this year . without the enhancedptc in place, millions of americans will lose their health coverage. as the person most is possible for tax policy in the incoming administration will you commit to renewing or not renewing these credits? mr. bessent: senator, as we discussed in your office, as it has been a brief time since we just met, i committed to you that i would research this. i have not had time to do it before the hearing.

if confirmed, i would get back to you with all the deliberate speed in investigating this. sen. cortez masto: i appreciate that. let me just say you would agree that these tax credits, because they are current policy, they actually extend current tax policy -- that you agree that extending current tax policy actually costs money? mr. bessent: again, i think i do not understand the nuance of the question but i will get back to you. sen. cortez masto: i appreciate that. you have been supportive of many of president trump's tariff plans. i heard the conversation there. we talked a little bit about it in my office. let me jump back to these credits that were imposed that some of my colleagues are against us, that have benefited nevada. i want to talk a little bit about it. the 45x manufacturing tax credit

supports thousands of jobs in the reno area, billions in investment across my state, also key in reducing dependence up on china for the critical minerals we need for our military and supports mining jobs in nevada. we are a mining state, we are minding critical minerals. will you commit to opposing any effort to repeal or reduce the 45x tax credit which is not just a benefit in nevada but other states as well including alaska? mr. bessent: again, senator, i am unfamiliar with that provision. i do believe it is important for us to mine, accumulate, and move to domestic production for rare earth and other vital minerals. i will get back to you on my thoughts on that program. on an atmospheric, meta thesis,

i agree with the direction of travel. sen. cortez masto: we also talked about this. president trump says he thinks that the president should have influence over the decisions of the federal reserve. we discussed this in my office. i appreciate that opportunity. does it continue to be your view of the federal reserve should be independent of the president? mr. bessent: of course. i actually believe the notion that president trump believes he should have influence, there was, i believe, a highly inaccurate wall street journal saying that he believed something to the effect that p should be in the room. president trump will make his views known, as many senators did. three senators including two on this committee called for, there was a jumbo rate cut in

september, 50 basis points. sen. cortez masto: i get the politics on your side. i am asking you. let me just say, you don't deviate from our conversation that you think there should be independence? mr. bessent: i think on monetary policy decisions, the fomc should be independent. sen. cortez masto: thank you. i appreciate that. for the benefit of our colleagues, you referred, i asked you if there were any regulations, treasury regulations that currently exist that you disagree with. in response, continuing now, you say you are going to get back to me, right? mr. bessent: i believe, i don't know if it is a regulation but it is a policy, as we saw from the december 8 pact by chinese entities into the treasury, which is serious, that was through a work from home software app.

one of the policies i support, i intend to be in the building every day that i'm in washington and i support a return to office which is against the current treasury policy. sen. cortez masto: i appreciate that. if there are any others that you oppose and would share with me, doesn't have to be now, i would appreciate that. mr. bessent: happy to provide that in writing. sen. cortez masto: thank you, mr. chairman. chair crapo: senator young. sen. young: mr. bessent, good to see you, congratulations on your nomination. important position. thank you for your willingness to serve our country. i will tell you what i'm looking for in a treasury secretary. i'm looking for someone who has a clear record of professional accomplishment, distinguished academic record would be a bonus. you have those things. i'm looking for someone who is thoughtful.

what i care less about is the performative dimension of the job. i have to tell you, there is a lot of chatter in washington about that. but i do appreciate your thoughtful answers here this morning. i'm going to begin by asking you about a dimension of your role as treasury secretary. you will inherit the role of chair on the committee of foreign investment on the united states, also known as cifius, that reviews american investment in foreign industries. recently, president biden blocked nippon steel's acquisition of u.s. steel on national security grounds. yet, he and the administration provided no clear substantiated evidence publicly at least to justify this decision. from my home state, this abrupt

action has instilled a lot of anxiety particularly in the gary, indiana area where there is nearly $1 billion in investments that were promised. if the nippon-u.s. steel deal were to reappear before cfius, sir, do you commit today to an impartial review particularly when political pressure was initially permitted to overshadow an honest assessment of national security vulnerabilities? mr. bessent: senator young, thank you for the question. i understand the imperative for jobs for your constituents in indiana. president trump most recently has also spoken out against the deal. sen. young: the statute indicates, you are charged with

providing impartial review. that is all i'm asking. would you be following that law or not, sir? mr. bessent: impartial reviews. it is currently in litigation. the review is closed. if it reappears, cfius will conduct the same review that it always does. yes, sir. sen. young: thank you. we may have an opportunity to work together on that effort. mr. bessent, your nomination comes at a time when tariffs are essential to our economic debates particularly on issues like inflation, supply chain resilience, job creation. i believe in moderation tariffs for a time strengthen america's negotiating leverage with other nations, and they can strengthen certain national security relevant industries. but overuse of tariffs can

inflate cost and provoke trade retaliation. as hoosier farmers have expressed firsthand over the years, they often bear the impact of these retaliatory measures, leaving already thin margins much more vulnerable. what concrete steps would you take to shield these indiana producers if major trading partners impose student duties, and how do you envision the treasury department's role in supporting them? mr. bessent: thank you, senator young. as i mentioned before, i may have mentioned in your office, our family is involved in farming, soybeans and corn. i am very sensitive to this, very up to date. the american farmers have been very loyal. 90% of rural voters voted for president trump. they should know that their

interests are his interests. when you ask what i would do specifically, i have sent recently, the biden administration kept on all of the trunk tariffs -- trump tariffs but what they did not do in the agreement with china was in the purchase provisions. if confirmed next week, i would begin pushing for the purchase guarantees that were in the china agreement to be enforced, and perhaps push the chinese for a catch-up provision over the past four years. sen. young: just a quick follow-up, in terms of the application of tariffs, a skilled negotiator may sometimes use broad tariffs to gain leverage, in other cases a more sector-specific approach could be effective. what criteria perhaps benchmarks

would you use to inform your decision to go with her measures or more surgical tariffs? do you believe there should be in a in caps or triggers to prevent an unintended escalation ? mr. bessent: senator young, i have not been confirmed yet. president trump is not in office. but i would imagine you, the american people should think about tariffs in three ways under the trump administration. one will be for remedying unfair trade practices either by industry or country a la the chinese tariffs, steel. two, maybe for a more generalized tariff as a revenue raiser for the federal budget. and three, president trump i

think has added a third use of tariffs, as you say, as a skilled negotiator, to -- he believes we have gotten over our skis on sanctions and that sanctions may be driving countries out of the use of the u.s. dollar. so the tariffs can be used for negotiations, whether for mexico on the fentanyl crisis. i think you and the american people should think about those three broad categories. sen. young: we need to move on. chair crapo: next to senator sanders. i don't believe you were here when i welcomed everyone to the committee this morning. as a new member of the committee, i personally welcome you and look forward to working with you. sen. sanders: thank and a pleasure to be here. mr. bessent, thank you for being in the office the other day. mr. bessent, the united states

today has more income and wealth inequality than has ever existed in the history of our country. you have three people on top, mr. maas, mr. zuckerberg, who are now worth almost a trillion dollars. that is more than half the bottom of our society. some 100 70 million people. three people, more wealth in the bottom 170 million. with more concentration of ownership today than we have ever had, we have more concentration of ownership in the media, where a handful of billionaires like musk, jeff bezos, rupert murdoch increasingly own the media and information the american people receive. we have a corrupt campaign finance system in which a small number of billionaires in both political parties make huge contributions into the

presidential and congressional campaigns. when you have a small number of multimillionaires who have enormous economic, media, and political power, would you agree with president biden, who last night stated " an oligarchy is taking shape in america of extreme wealth, power, and influence that threatens our entire democracy, our basic rights, and freedoms?" that is what president biden said last night. i agree with him. do you? mr. bessent: senator sanders. sen. sanders: talk a little closer into the microphone. mr. bessent: i enjoyed our meeting last night. i hope you got my materials on the tariffs in china. look, the three billionaires who you listed all me the money

themselves -- made the money themselves. mr. musk came to the country as an immigrant. sen. sanders: i understand that. i am asking you, when you have a handful of people like musk who will soon be a part of the trump administration and others, when you have three people owning more wealth in the bottom half of american society, when these people have enormous influence over the media, when they spend huge amounts of money in both local parties to elect candidates, what biden said last night as we are moving toward an oligarchy. i'm asking you the question. forget how they made their money. do you think that when so few people have so much wealth and so much economic and political power, that that is an oligarchic form of society? mr. bessent: i would note president biden gave the presidential medal two people who i think would qualify for his oligarchs. sen. sanders: this is not a

condemnation of any one individual. i am just asking you, with so few people having so much wealth and power, do you think that is an oligarchic arm of society? mr. bessent: senator, i think it depends on the ability to move up and down -- sen. sanders: that is not really the answer, even if you had the mobility. no matter who those individuals would be. let me ask you another question. right now in america, we have over 22 million workers who are making less than $15 an hour, and nearly 40 million people in our country earning less than $17 an hour. shamefully, the federal minimum wage despite the efforts of myself and other people here, have not been raised since 2009 and remains an unbelievable $7.25 an hour.

will you work with those of us that want to raise the minimum wage to a living wage take millions out of poverty? mr. bessent: senator, i believe the minimum wage is more of a statewide and regional issue. sen. sanders: so you don't think we should change the federal minimum wage of $7.25 an hour? mr. bessent: no, sir. sen. sanders: mr. bessent, millions of working-class americans who are struggling to keep their heads above water are paying outrageously high interest rates on their credit cards. over half the american people who take out your credit cards are being charged interest rates over 24%. during his campaign, president trump promised that he was going to cap credit card interest rates at 10%. i happen to think that is a very good idea and i will soon be introducing legislation to do just that. will you, if you are confirmed,

be supportive of what president-elect trump said and what i want to see happen, and that is to cap credit card interest rates at 10%? mr. bessent: senator, i think we can both agree that credit card companies have been bad actors throughout history. i will get back to you -- sen. sanders: very simple question. trump says he wants a cap credit card interest rates at 10%. i agree with him. will you be supportive of what trump and i want to do? mr. bessent: when president trump takes office, if i'm confirmed, i will follow what president trump wants to do. chair crapo: thank you. next is senator smith. sen. smith: thank you very much from mr. chair, ranking member. great to be a part of this committee. i appreciate it very much. welcome, mr. bessent. nice to see you again. i want to follow up a bit on the conversation that we had

yesterday, just get into a little more detail, and some of the issues that senator sanders is raising. i am focused on how we can lower cost for americans and how we can make this economy work better for regular people in this country. when we spoke yesterday, we talked generally about this. you said that you think our biggest challenge is to get after the deficit and you said your first priority is to extend the republican trump tax cuts which would add four point $6 trillion to the federal deficit. you have also set the trump republican tax cuts have generated economic growth and that those benefits are going to trickle down to everyone else. but what i see is that these republican tax cuts have delivered massive consolidation of wealth at the top. almost half of those benefits went to the top 5%. the top 1% got a tax cut that was 852 times bigger than the one received by the lowest

earning working families in this country. now these multi people have more money than they know what to do with. you see elon musk buying twitter, now he has an office in the old executive office building and a seat on the platform when the president is inaugurated. these tech billionaires are launching rockets into space and building themselves these lavish doomsday bunkers, buying up newspapers, all of which gives them more power. it seems to me this concentration of wealth is not good for our country and it is certainly not doing anything to lower prices for working families in minnesota or helping them afford a home or childcare. in fact, it seems like it is doing the opposite of that. could you comment on this? mr. bessent: yes. senator smith, i believe president trump, and if confirmed, myself, are committed to addressing this affordability crisis. part of the affordability crisis

stems from this great inflation that we have had since -- it was nascent in 2021, occurred in 22, 23. we are still substantially above target. my hope is we will not see it accelerating again. inflation is one of the great killers for working families. as we talked about in your office, the cpi or pce, statistical numbers may be up about 22% under the previous administration but the basket of goods and services for working families, so getting inflation down, getting interest rates down, addressing this affordability crisis -- sen. smith: as you know, inflation is coming down, and one of the things that we saw during the course of the last couple of years, these big,

consolidated corporations with so much market power jacking up their prices way beyond the amount of money they would have had to raise their prices in order to cover their costs. in my view, this level of corporate consolidation is actually hurting americans, hurting -- costing people more. in fact, the republican trump tax bill, that there is such a move to reinstate, extend, is going to contribute to that problem, not make it better. let me ask you another question. you have also set in order to get our fiscal house in order we need to cut spending, deregulate, and privatize. i want to look at what we are seeing with some privatizing in the private sector that is of great concern to me. let's look at health care. we have seen a move by big corporate investors into health care and especially hospitals, terrible stores we have heard about rural hospitals and clinics getting shuttered,

maternity wards getting shut down, caused in part by this private equity big corporation purchasing and moving in and controlling, concentration in health care. none of this of course has lowered cost for americans. in fact, people's costs have spiked. i wonder, do you see this model a big corporate takeovers of health care working to lower cost for americans? mr. bessent: senator smith, health care, trying to understand health care costs in the drivers of that, that has been on my to do list for 10 years, sitting in a room for a week to understand it. i've never been able to do it. i will tell you that when we see things like health care, higher education, both of which have substantially outperformed any inflation indexed by cost, there

is a problem there. i think what you are identifying could be one of the problems but i think the overall level of health care costs we are seeing is driven by a multi factor -- sen. smith: it is a complicated issue and i know i'm out of time, mr. chairman. we have done work on this. when chair sanders was chair of the health committee, big corporations come in, quality of care goes down, patient costs go up. there was a hospital in massachusetts bought up by one of these big firms and they stopped stocking a common treatment for hemorrhage during pregnancy and they have seen patients die. this is an example of how privatizing is not a solution to our problems in health care or other parts of the economy. chair crapo: senator johnson. sen. johnson: mr. bessent, welcome. i want to start by refuting one

of the false narratives that we hear add nausea from the other side, that the tax cut and jobs act was the primary cause of our deficits. just not true. i will actually use the fax from cbo. this is not confirming cbo numbers, this is why we ought to take cbo numbers with a grain of salt. after it was passed, cbo predicted 10 years, but for seven years that we experience, total revenue of $27 trillion. actual revenue was $28.7 trillion. to do the math, one point $7 trillion more than what cbo estimates. the original score was 1.5 trillion lost revenue. we not only pay for the tax cut in seven years, we generated $200 billion more revenue, even with the covid recession. we need to take cbo scores with a real grain of salt. i hope this committee understands what senator graham

was talking about in terms of your humble beginnings and your tremendous american success story. i want to ask you a hypothetical because you understameca families. if an american family normally spends $100,000, serious health crisis. in one year they have to spend one hundred $50,000 on medical bills. fortunately, that family member gets well. what would that family spend the next year? just real quick. mr. bessent: unless they have more income -- they would spend the same 100 and probably have debt cost associated with that. sen. smith: they certainly wouldn't do what the federal government has done in 2019 before the pandemic we spent $4.4 trillion. 2020 we spent $6.5 trillion. when the pandemic ended, we didn't reduce spending. for the last five years, we have

averaged $6.5 trillion, last year, six .9 trillion dollars. mr. bessent, is there any justification for keeping spending levels at this level? mr. bessent: senator johnson, as i've said repeatedly, the united states does not have a revenue problem, we have a spending problem. sen. johnson: so the question is how do we reset spending levels to a reasonable pre-pandemic level? i wrote a column in the wall street journal, i laid out a couple scenarios. let me give you the guts of it. if you take one of the pre-pandemic years and increased all the spending by population and inflation. either way, that is what families do, as well. but you exempt social security, medicare, interest, use president biden's 2025 budget. you use what we plan on spending this year. if you take bill clinton's 1998 spending, i don't think you spent too little, we would have

a baseline of $5.5 trillion. if you took president obama's 2014 spending levels, $6.2 trillion. the one i like the best, if we use president trump's 2021 budget, his estimates for spending in 2025, use those numbers, but slide in social security, medicare, interest as they are. nobody is touching them. spending about $6 trillion. wouldn't that be a reasonable level, somewhere between 5.5 and $6 trillion is a baseline spending to project our next 10 years? mr. bessent: senator, i look forward to working with you on this. you have clearly done more work than i have. this looks like a very good starting point to me, to figure out how we have gotten into this spending morass. sen. johnson: sounds like a

pretty reasonable approach. i used clinton spending levels for this. i also want to refute this cbo score on extending the tcja. they scored the whole thing as $1.5 trillion. if you just inflate that, according to cpi, it would be $2 trillion. how do they justify a score of 4.3 to four point $6 trillion? it makes no sense. i think we need to take those estimates with a huge grain of salt. i heard the ranking member talk about inflation and the cost of living. because we have incurred these massive deficits, in 1988 dollars today, only $.51. 2014 dollar today is only worth $.74. $2019 is only worth $.80. that was caused by this massive deficit spending, devaluation of the dollar, and a lot of

devaluation has occurred over the last four years because we spent too much money. not because we didn't tax america enough, because we spent way too much money. chair crapo: thank you. senator cantwell. sen. cantwell: thank you, mr. chairman. mr. bessent, congratulations on your nomination. i see your family sitting there in earnest on these economic issues. it is so interesting. our perspectives, you can see from this committee, are arguing about what we think are the right economic policies for the country, and as the treasury nominee with your background and experience, we are still talking about the president's policies and whether we think they are effective or not. real gdp has increased at an annual rate of 3.1% in the third quarter of 2024. that is strong growth, right? mr. bessent: as an aggregate

number, it is strong growth. sen. cantwell: the economy added 16 million jobs in the last four years and unemployment is the lowest it's been in 50 years which has led to better pay and working conditions. we want that, right? mr. bessent: i'm in favor of better pay and working conditions, yes, senator. sen. cantwell: after-tax income increased by 400%. this is good economic news. i personally think that focusing on innovation and building supply chains is a good thing to do. so when you start talking about tariffs, that is when you get the pacific northwest attention. in fact, i would say a recent editorial by one of my newspapers was bracing for the trump tariffs in aviation in general. you can imagine, we have an actual net surplus. we export about $2 billion out

of our state versus importing $1 billion, but this is a big part of it. in the aviation sector, i think i sent you an article about the fact that we think increasing our manufacturing innovation to continue to have markets and sell to those markets is a good economic strategy. mr. bessent: senator cantwell, as i discussed in your office, in my hometown of charleston, south carolina, boeing is also the largest employer. i view aviation as very important. sen. cantwell: great. believe me, i would have the same conversation with joe biden or barack obama or whoever. i want to focus on innovation, not the tariffs. i am worried that the tariffs are going to increase supply chain products, increase prices on our farmers, increase prices

on americans. so, i want to ask you, don't you think we are in an environment where exporting products and growing markets outside the united states is a big economic opportunity, and what are you going to do to build coalitions to help us be able to achieve opening up those markets, as opposed to just the retaliatory tariff environment which may reduce costs on americans and not resolve these issues? mr. bessent: senator cantwell, thank you for that. after our discussion in your office, i went back and looked at some older data. in 2000, in terms of the labor share of aggregate income in the u.s., 69% accrued to labor. to date, that number is 60. you could see a sharp drop after what is called the china shock.

i agree with you that opening markets is good, but the free trade must be also balanced against fair trade. clearly what has happened, the trade has not been fair. that has fallen on the american workers. and we cannot allow, as i think i mentioned to you, china is the most unbalanced economy in the history of the world. they are in a severe recession/depression. they may have -4% disinflation, and they are attempting to export their way out of that, as opposed to doing a internal rebalance. i am with you on a need to open markets but we cannot allow a player like this to flood our

markets or to flood the world. sen. cantwell: i am saying i believe in coalitions. we discussed technology at nato. you thought that was a good idea. i could get upset with my colleagues on the other side of the aisle all the time but that doesn't move me forward. . i hope that you will look at what we will do to build allies. these numbers that are basically talking about just the tariffs and what it would do to the price of gasoline given canada is concerning. i want to know that the trump administration will focus as much on innovating our way to success as we are on the tariffs. i do think we are going to see retaliatory tariffs. we saw it in our state, it hurt us in our agriculture. what happened is you lose more farms. there is a lot of people buying farmland. goldman sachs, bill gates, a lot

of people buying farmland, but we are losing farmers in the middle of the trade wars, and that's a concern i have. by the way, thank you for mentioning housing. so appreciate that was in your statement. i look forward to working with you. that is an area, if the president will push forward, is a way for us to lower cost. chair crapo: thank you. senator lujan. sen. lujan: thank you, mr. bessent, for being with us today. appreciated the conversation we had in the office. i will touch on several topics, so i will ask you some yes or no questions. i thank you in advance for your brevity. it may surprise many observing today the immense responsibility that the secretary of treasury has in stemming the flow of fentanyl and other substances. yes or no, will you commit to continuing the biden administration's counter fentanyl strike force which brought together the office of

terrorism and financial intelligence and irs criminal investigation to fight financial crimes? mr. bessent: thank you, senator. i enjoyed our visit. as i mentioned in your office, this is personal for me as two families close to our family lost children to the fentanyl crisis. i will commit. know that it is my belief that president trump is laser focused on this issue. sen. lujan: mr. bessent, yes or no, will you work with me to ensure there is more transparency over suspicious activity reports sars at the financial crimes network for congress? mr. bessent: i believe, as you and i discussed, there is a sleeve of treasury, treasury finance, that deals with this.

i believe that we have to have a 2025 approach to -- you and i talked about digital currencies and all branches of government. yes. sen. lujan: mr. bessent, in your role as treasury secretary, do you agree that you will play an important role in advising president trump and congressional republicans on policy related to the economy including investment in government programs? mr. bessent: yes, senator. sen. lujan: i was pleased in our meeting that you stated, "no cuts will be needed" to achieve your economic goals. that may surprise a lot of my republican colleagues but i appreciate that conversation we had. yes or no, would you recommend cutting medicaid? mr. bessent: i'm sorry, i didn't

hear whether you said medicare or medicaid. sen. lujan: yes or no, will you recommend cutting medicaid? mr. bessent: medicaid? it is the business of congress to do the budget. i am in favor of empowering states. i believe that for some states, that will be an increase, other states, a decrease. sen. lujan: mr. bessent, will you recommend cutting medicaid to president trump? i remind you that you acknowledged one of your responsibilities as secretary of the treasury will be providing this advice. mr. bessent: i will get back to you on this. i have seen the details of the full budget proposal once president trump is in office and was confirmed. sen. lujan: will be recommend

cuts to broadband following the investments we have seen across the country, making immense progress in connecting more people across the country that were included in the bipartisan infrastructure law? mr. bessent: senator, i am unfamiliar with the exact program. it is my understanding that much of the allocated funding has not been dispersed yet. i will get back to you on that. sen. lujan: mr. bessent, a lot of folks back in south carolina, including some of your farming neighbors are getting connectivity because of these programs. you may just need to chat with them about the importance of what this program means. as my time expires, it may surprise many here that they're only a couple of c-span3 my brother in headstart, mr. warnock here. but when we talk about the importance of early education in

america, the economic benefit, yes or no, would you recommend cuts to headstart? mr. bessent: again, i will have to get back to you on this. i don't understand the intricacies of that program. sen. lujan: of headstart? mr. bessent: yes, i don't understand the budget ramifications. sen. lujan: do you know what headstart is? mr. bessent: i believe in earlier childhood education program. sen. lujan: that is fair. i didn't realize you have to qualify to get into the program. the family that i was raised in, we have to qualify to get into the program. it opens up doors, got a couple of us to the united states senate. i hope that we can find some agreement in protecting that program. if someone tries to eliminate debt, early childhood education, that we can count on you on behalf of new mexicans, south carolinians, people across america to say that we are not going to do that. appreciate your time.

chair crapo: senator barrasso. sen. barrasso: thank you,, thank you for your willingness to serve, for being here. enjoyed our discussion talking about the future of the country and the role the treasury secretary and getting our economy back on track. this means lower prices, higher wages, more jobs, stronger economic growth for america. it also means protecting people in states like wyoming from crushing regulations and devastating tax hikes. it means getting wasteful spending under control. i'm greatly encouraged by the meeting that we had. i believe you have a strong vision for america, strong vision for unleashing american energy, for getting tough on china, tough on our adversaries, and forgetting the federal government out of the way for so many of us. i want to talk a bit about energy. in another committee yesterday, secretary of energy, earlier today, sec. of interior, lots of energy questions. i am glad that we agree a key

ingredient in reigniting the economy is unleashing american energy. wyoming, we are an energy superpower as a nation, america's energy breadbasket. energy is the heart of our wyoming economy and the nation's economy. it supports workers as well as schools, infrastructure, the money that comes from that, tax revenue. wyoming is the least populated state but the third largest net energy supplier, producing 12 times more energy than we consume. it is the forefront of oil, natural gas, coal production, carbon capture technology, hydrogen production, many alternative sources of energy. what has happened is energy producers in wyoming and across the country faced the whole of government assault from the biden administration on american energy production. taxes, crippling regulations, weaponized tax code in ways that were just unthinkable to be

against conventional american energy production. the things that joe biden signed into law just made things worse. but the good news is with you there and president trump in the white house, things are about to change. you have talked extensively about boosting american energy production. rockmore role do you see playing as secretary becoming energy, and becoming energy secure as well? mr. bessent: senator barrasso, i very much enjoyed our meeting, wide-ranging discussion. my family and i had a fantastic vacation in wyoming this summer. in terms of within the potential trump administration, i am sure you have heard it from secretary burgum, we refer to it as energy dominance. energy dominance, one of the

reasons that i believe we have not been able to apply as muscular sanctions against the russian federation or unwilling was because the supply of energy was constrained in the u.s. the same with the terrorist regime in iran. i would view that as we can raise u.s. production, we would squeeze down the bad actors, especially iran. i think i am right, maybe not in the exact numbers, but the order of magnitude, i believe iran was down to you 100,000 barrels of oil exports when president trump left office. i believe they are now exporting approximately 1.7 million. so, through sanctions policy, i believe we can again, as i like to say, make iran poor again.

not the iranian people. the government. at the same time, have our domestic producers push that up with the highest energy standards in the world. sen. barrasso: we do it, we are the best stewards of the land, i agree. what we've also seen with iran increasing sales, selling to china, china buying at discount, so they are getting cheap energy. iran is getting tanker loads of cash back essentially and they are using that money for terrorism. one last question in my time remaining. this has to do with the tax cut and jobs act that we passed in 2017. if that were to expire, we are talking about a massive tax hike over $4 trillion. what kind of a tax hike with that mean for small businesses, job creators as well as our global competitiveness if all of a sudden we put the heavy wet blanket of a four trillion dollar tax increase on our

nation? mr. bessent: senator, i think it would be devastating, especially for small businesses. as someone who came from a very small town, lived in new york, big town, came back to a small town, i believe wall street has done great the past few years. and main street has suffered. it is main streets time. wall street can continue to do well, maybe not as well. it is time to have a main street, small business-led recovery, led by small banks, regional banks, as i call it, re-privatizing the economy. as i said, since november 15, since president trump selection, we have seen the biggest jump in the history of the small business confidence index. chair crapo: senator tillis. sen. tillis:, mr. bessent, thank you for being here, time in the

office. congratulation to you, your spouse, john, your children. i leaned over to senator johnson when you were being attacked by one of my colleagues on the other side of the break i own, i said it looks like the guy has a heart rate of 40. you are very composed. thank you for staying on the facts and demonstrating your knowledge you possess. i was not here but somebody put into question your viability of a nominee because of a lack of public service which i find interesting. sometimes i think we have too much public service in people's background and not real world business experience. can you give me an idea of why this nomination may represent your first entry into public service? mr. bessent: yes, senator tillis. again, as an adjacent state, someone who is a homeowner in north carolina, i appreciate our conversation in your office.

i have been in public service, not just in government. when i lived in new york, i was a strong supporter of a charter school called harlem children's zone which takes young residents in a multi block, keeps on getting bigger, area of harlem, takes them from cradle through high school. i have found that my service, anybody can write a check, anyone with my means can write a check. what has been fulfilling for me is mentoring many of these young people. still in touch with them today. i was also a trustee for rockefeller university, one of the great research universities in the world, was on the executive committee, chaired the investment committee. sitting here today is especially meaningful today for me because this is my third try in public

service. in 1979, when i was 17 years old, i wanted to fight for my country. my father had just experienced financial difficulties. i wanted to attend the u.s. naval academy. i was offered by our congressmen in the sixth district of south carolina but was unable to take the appointment because of my sexual preference. i managed to go to yale, worked several jobs to do that. while at yale, i want to do public service and joined the foreign service. i was told also not welcome. so sitting here today is my third attempt at public service. i sit here, knowing that president trump chose me because he believes on the best candidate, not because of my sexual preference, not because treasury secretary's with green eyes do better. i think it is a tribute to president trump that he looks at

people as people. sen. tillis: i agree and i appreciate the answer. i will go into a lightning round here. first off, this is the joint committee on taxation distribution analysis of what happens to the various socioeconomic strata if we don't manage to pass the jobs and tax cut extension. without objection. chair crapo: without objection. sen. tillis: senator johnson does big foam boards. i do handouts. i am giving these to my republican colleagues to say that if we do not extend the tax cut and jobs act, we will own a fiscal crisis for middle america. 93 million people will be affected in terms of an added tax. if we fail to pass an extension of tcja. the last time i checked, there are not 93 million rich people in this country. there are people who struggled

like you did when you were a kid, like you did -- like i did when i was a kid. whenever we had some well-intentioned program from government who made things better for me, it made it harder for me to dig myself out of the economic situation i was born into. so the facts are stubborn things. this tells us what happens if we fail to pass the jobs and tax cuts. and it doesn't even get to the impact that i had. it turns out at that very table, jellyroll was here for a finance committee hearing. he lived in the same trailer park that i did, 20 years later, in south nashville, tennessee. what i found interesting come my own family, we are right on the economic edge. every time government had some well-intentioned program to tax the rich, i went from a house to a trailer park. every time government let us do what we wanted to do, we lived in a house.

i am a living example. ben ray lujan, others have had that experience. you have to look historically that when people like me and you had real opportunities. i look forward to supporting your nomination. mr. chair, i will send some questions for the record, but just to reinforce the message that republicans have to deliver. anyone who says that we should not is advocating for a $5 trillion tax increase that will hurt the people who are on the economic edge, worse than anybody else. thank you, mr. chairman. chair crapo: senator warnock. sen. warnock: thank you, mr. chairman. thank you for joining this committee. i look forward to working -- to protect social security, medicare, medicaid and promote trade policies that work for georgia businesses and boost our

economy. good morning and good to see you again. i enjoyed our conversation earlier this week. in that conversation you outlined ambitious goals for the federal government and deficit reduction. i would like to follow-up on our discussion about your economic plan. according to a new report from the tax policy center, the largest tax cuts from extending the trump tax bill would go to those with the highest income. especially those in the top 1%, making more than $1 million per year. the top 1% of owners will take home roughly 1/4 of the benefits of the law and the top 5% will get almost half of that. do you believe that the wealthiest 1% of americans deserve or need an additional tax cut?

>> i greatly enjoyed visiting with you. i think probably a better way to look at it is on a percentage basis. when i think about the distributional aspects of the tax cuts and job acts that most of the benefits accrue for the working and middle people as opposed to the upper ends. absolute dollars, that is correct but i think it is sen. warnock: you believe the tax cut provided 1/4 of the benefits of the law to the top 1% and the top 5% getting almost half benefited those at the bottom more than the top? is that your testimony? mr. bessent: i believe in 2018 , 2019, households in the bottom 50% of income earners,

the wealth increase for those households was three times higher than the wealth increase for the top 10% of americans. sen. warnock: so we should continue to move in that direction? you talked about deficits as a national defense problem. i think need to be fiscally responsible and bring the national debt under control. in 2013, congress extended the bush tax cuts for everyone except those making more than $400,000 per year. this bipartisan decision saying ved the treasury $600 billion. do you agree ending tax cuts for those making more than $400,000 would help close the deficit? mr. bessent: i do not. i believe you would capture an inordinate amount of small business people who largely are

in that cohort of $400,000 to $1 million. sen. warnock: what about $1 million? mr. bessent: i believe these are small business pass-through owners and, as i said before, wall street has done great. it is time for main street do well. small businesses need to drive what i call the re-privatization -- sen. warnock: i agree it is mainstreet's time. what about those making more than $10 million? would we reduce the deficit by extending those tax cuts for folks making about $10 million? mr. bessent: again, i think it is important to put in incentives for them to invest.

going back to the 100% depreciation for equipment, i think -- sen. warnock: i do not need to keep interrupting but i am a pastor and we are known to be loquacious of speech. what about $1 billion? mr. bessent: i think these are the job creators. sen. warnock: there is no income level for which you would support raising taxes? mr. bessent: there is no income level i don't think we should continue the tcja as it was. sen. warnock: all right. i think our country is facing structural deficits. however i think to contribute to reduce taxes for the wealthy and letting them avoid taxes based on what they already owe will not get us out of that problem

but i look forward to continuing that discussion. thank you very much. >> before we go on to senator blackburn, i want to state there are a lot of facts that have been thrown around today. of this $4.3 trillion tax increase that could happen, this is actual dollars, $2.6 trillion of that goes to families and individuals who make less than $400,000. that is simply the distribution of this tax increase. sen. blackburn: thank you for bringing that clarification because if we do not extend the tax cut and jobs act, it is that $4 trillion tax hike that people will see. i appreciate your comments about

a main street small business recovery. that is something that is so vitally important. we have had much discussion over the last few years with a biden administration over how they determine that $400,000 number. if it is the gross, the adjusted gross, they came up with a term of total positive income, which is everything you make. we know the biden administration approach on this would be a killer for main street businesses. we know that 199-a is vital for them and they need to see that in the trump tax cuts and in that permanent so we can have the main street small business recovery and revival. i appreciate that and that president trump has nominated

you for treasury secretary because you are sensitive to that. and what your work means to main street and to individuals and getting the irs under control and looking at some of these provisions that are going to be in front of you. we appreciate that you would come back a third time and look at public service and that -- by the way, they are behaving so beautifully. whatever they want, they get. [laughter] senate orders. we will be right there to support them. i do want to talk with you for a moment about cbdc's. some of the push that the biden administration -- they did an

executive order for treasury to research development for a cbdc in the united states. this causes a lot of us heartburn because we looked at what the ccp did in connection with the olympics. upon confirmation, how would you approach this discussion of cbdc's and are you for them or against them? could you end the biden administration project to create a u.s.-based cbdc? mr. bessent: senator blackburn, thank you for your remarks. i may have a little trouble disciplining the two behind me. a u.s. senator has vouched for their behavior. on cbdc's, i see no reason for

the u.s. to have a central bank digital currency. a central bank digital currency is for countries that have no other investment alternatives. if we think about a reserve manager, a high surplus country, wherever it is saudi arabia, singapore, who ends up with the currency, if you own that currency, you have to have something to invest in. there is very little to invest in if you want to hold the currency. to invest in if you want to ho you can hold chinese government bonds. sen. blackburn: your view of that would be negative? mr. bessent: many of these countries are doing it out of necessity where if if you hold u.s. dollars, you can hold a variety of secure u.s. assets. sen. blackburn: i appreciate that. i appreciated your comments

earlier about the pillar to negotiations. this is something we would be well served to extract ourselves from this. currently, the preliminary data we have, 40% -- right at 40% of the total pillar 2 tax burden is on us. china has found a way to exempt themselves from this. that is in need of a revisit and i look forward to you doing that and standing with our companies. i think you can just submit this to me in writing. advanced persistent threat, apt, which is china, they were able to override treasury security systems and access workstations where they reported access to unclassified documents.

and of course, this is chinese communist party work again. this is -- we found this out after finding out from the treasury inspector general that 2800 irs employees still had tiktok on their government devices. if confirmed and when confirmed, will you take steps to improve treasury security systems? mr. bessent: senator blackburn, i actually -- one of the earlier questions was, what policies of the current treasury secretary do you disagree with? as you noted, the december 8 hack ended treasury was via a -- into treasury was via a work from home system. i as treasury secretary, if confirmed, plan to be in the office every day i am in washington, d.c. and i expect all the other employees to do

that too. as a matter of national security for everyone to be at 1500 pennsylvania avenue. sen. blackburn: thank you. that is well received. sen. welch: thank you very much. it is delightful to be a new member of the committee. i look forward to working with you and all of our colleagues. mr. bessent, thank you for your visit yesterday and welcome to your family. as we discussed, the situation for a lot of vermonters who work incredibly hard is very tough. vermont actually has one of the widest gaps between what people can earn and what their expenses are. it is tough at the end of the month to pay all the bills. the grocery bills, the health care bills, all of these things. we are talking abstractly about this tax plan and the reality for most folks in this country

is that for the past 40 years, working americans have actually had a pay cut, not a pay increase. my hope is that whatever tax policy we have will start with a commitment to making lives better for the main street folks that you mentioned and i am glad you did. but there is going to be a lot of negotiation on how to pay for these tax cuts. one of the things that will be on the block is very important to vermonters, and that is the affordable tax care credits that we have now. in vermont, health care is incredibly expensive for everyone. if we have an electrician in bennington, vermont, making $67,000 a year with the tax credits set to expire, that family would have a $700 a month

increase in their health care bill. that will hammer them. that is like $9,000. my question to you is when putting together this tax proposal where you will have to make recommendations about how to pay for it, will we continue to provide this help to vermonters, like this electrician in brattleboro, so he does not get hammered on health care premiums going well beyond what he can afford? mr. bessent: senator, as we discussed in your office and i have not had time to do my homework on this, i think i told you my family, friends, business colleagues often get sick of hearing my phrase, "no data, no opinion," so i will get up to speed. sen. welch: i appreciate that but there are a couple of things that make a difference for

working americans in south carolina and vermont. the child tax cut. when we had that it reduced , poverty for children by 50%. that is elemental for hard-working families and the premium support where health care is just a brutal expense for employers, too, by the way. i am hoping the design we will start to do no harm to working vermonters and working south carolinians. second, on the tariffs, i am in support of the china tariffs. that is defending us against unfair trade practices by china. i am concerned about the impact of tariffs on canada and what that does to us in vermont. our major business porter -- export partner is canada. from what we have seen, it would raise the cost to businesses,

probably cost jobs and the cost to consumers. what reassurance can we get from the trump administration that there will be a do no harm policy to american consumers in vermont workers and small businesses with the tariff policy? mr. bessent: senator, it is very difficult for me to isolate vermont. but in terms of working americans, i believe that president trump understands it is working america -- he had a very unique coalition. sen. welch: he does, and my hope is the policy will reflect that. i appreciate the opportunity to work with you on that. mr. bessent: i look forward to working with you. i think he understands it is the affordability crisis. sen. welch: it is. just the last thing, very little time. we were talking about credit card rates for consumers. credit card fees for our small businesses are the highest in the whole world.

the highest in the whole world. why can't we bring them down? pay what europe pays? small businesses, it is five for second or third highest expense for them. you will have some impact there. those costs on our small businesses, including the pass-through businesses, i would like to get them down and get your help in doing that. mr. bessent: i look forward to working with you on this issue. if confirmed. sen. welch: thank you. chair crapo: thank you. senator marshall. several marshall thank you. it is great to join the finance committee. it seems to me like so many of us share the same goal. we want americans to be prosperous, to be able to live their american dream. we disagree how to get there but we all have the same goal -- we want americans to be prosperous. mr. bessent, welcome and congratulations on your nomination as well. i think it could be said that

rural america in many ways is president trump's base. of the 77 million people who voted for president trump a lot , came from rural america. i could argue that 90% of rural americans voted for president trump and no one has suffered more the last four years than rural america has. my question is may be geared up about that. what can we do to help main street, small businesses and help rural america? everyone knows you are a financial wizard and you have been successful on wall street. i want to understand your commitment to small-town america. you are from a small town and i think you understand agriculture from our conversations and even some background in community banks. how important our community -- are community banks to those small towns and what is your commitment to rural america? mr. bessent: senator marshall, i think i may be one of the few treasury secretary nominees in a

recent period that occasionally listens to farm radio on xm on weekends. i can tell you that after the silicon valley debacle, farm radio was intensely focused on the potential loss of small and community banks. they are important pillars for those communities. i think examining in terms of what is a regulation, what is the supervision, that -- are they being unduly burdened? they are not able to help their communities. what are the -- what is the supervisory edict there? as i said earlier, too, i think china has not made good on their

ag purchases for four years. if confirmed, next week, i would start pushing for them to resume the purchases and then i would conference with president trump on whether he believes there should be a makeup provision. sen. marshall: thank you. i want to stay on rural america and talk about tax credits. 45z is the tax credit, i am not sure if you are familiar with it or not but it would really help rural america. we help take some of our feedstocks, whether it is soybeans or corn and turn it into renewable diesel, it will lead to cleaner air for all of us but it is important to rural america. i asked you would look into it. what we cannot do is let china benefit from it. any tax credit should not impact foreign entities. i wanted to get a few background thoughts on this 45z tax credit from you.

mr. bessent: as we discussed in your office -- and you gave me a very good overview of how the chinese backdoor into this program and that is obviously uncomfortable. -- unacceptable. i look forward to working with you on the 45z. sen. marshall: great. i want to finish up on the trump tax cuts and how important it is to make them permanent. i do not understand what $4.6 trillion is, but i know families in kansas were able to keep about $1000 in their pocket after the trump tax cuts took effect. i think that would be going forward. if we lost these trump tax cuts, i would assume those same families would be giving the federal government another $1000. this issue to me is vitally important to rural america to the tune of $1000 a month. i guess my question for you is beyond making the current trump , tax cuts permanent, what else

would be on the menu that would help the economy as far as other tax cuts? mr. bessent: i think president trump talked about -- it is not specifically a rural issue -- but it is something that affects of the were two quintiles of the income distribution more. no tax on tips, no tax on social security, no tax on overtime. perhaps making auto loans tax deductible again. that would go a long way to addressing affordability. sen. marshall: that is a great start. i hope we can come back and talk about secord tax coming down with martin. that is permanent as it is but i think there is opportunity there. thank you, chairman. >> one sentence. i very much appreciate our colleague mentioning 45z, the clean fuels production tax credit. that is part of the clean energy tax credits.

i look forward to working with you on that. chair crapo: mr. bessent, so you understand how we are going here -- i know it has been a long time and thank you for your patience. we have senator warren, followed by senator scott, then senator whitehouse and then senator wyden would like to ask one more question. he gets the only extra question of the day. then he and i will probably make a few brief remarks as we wrap up and we will be finished at that point. senator warren? sen. warren: thank you, mr. chairman and welcome, mr. bessent and your family. last month, president trump said he supports repealing the debt limit. so do i. there we are. donald trump and elizabeth warren are singing from the same hymnal. mr. bessent, let's make it a trio. do you agree with president

-elect trump that the debt limit should be repealed? mr. bessent: senator warren, first of all, i enjoyed our visit in your office and appreciate the fact when i walked in you said let's talk about what we have in common, our love of cape cod, the red sox, and addressing the affordability crisis and the housing shortage. the debt limit is a very nuanced convention. what i would like to do is get back to you and president trump. i would like to do a survey of market participants with this amount of debt. it is a very fragile equilibrium. sen. warren: forgive me for just a minute here. i am not asking you whether we ought to increase the debt. i am asking a very different

question. that is whether or not we should have a statute in place that says there is a debt limit? that if we do not increase the debt limit that would cause us to default. that is not an economic analysis. in fact, let me ask you -- i understand earlier you were citing the congressional budget office. have you seen the congressional budget office projections of what would happen if the united states government defaulted on its debt? that is if we hit the debt limit and just kept on going without raising it or eliminating it. mr. bessent: the united states is not going to default on its debt if i am confirmed. but i will tell you for people who do not understand the debt limit, it might be like taking out your hand brake in your car. you can still hit the brakes,

but it is one less feature and -- sen. warren: i thought you said you would never use it. you are talking about a hand brake that appears to be there but in fact is not connected to a braking system. it is literally never used, right? mr. bessent: i have never pulled the hand brake going 60 miles per hour in my car. i hope never to. sen. warren: it is the enormous cost of the debt default. moody's estimated that a debt limit bridge would cost the u.s. economy $12 trillion and cost 6 million people their jobs. i think this is the reason president-elect trump said eliminating the debt limit is "the smartest thing congress could do." i would like congress to do the smartest thing and that is eliminate the debt limit so we do not have this problem. mr. bessent: once president

trump takes office and i am confirmed, if he wants to eliminate the debt limit, i will work with him and you on that. sen. warren: great. great. because i agree with president-elect trump that the debt limit should be repealed. i note however that is not what congressional republicans plan to do. last month they committed to raising the debt limit by another $1.5 trillion. why do republicans want to raise the debt ceiling? because their plan is to shovel new tax cuts to billionaires and that would increase the debt by more than $1 trillion in the next four-year period. during his first term, president trump's only major legislative achievement was his 2017 tax cuts that mostly got sucked up by millionaires, billionaires and giant corporations. most of these cuts were only good for eight years so that

republicans who were designing them could claim the cost was only $2 trillion. eight years of cuts that added $2 trillion to the debt. now we are talking about republicans and president trump want to give the same rich people and giant corporations more years of tax cuts. i want to be clear that we understand each other here that i think it was senator warnock who asked you about, is there any billionaire rich enough that you would not support a tax cut for going forward? mr. bessent: i think it is unwise to single out -- sen. warren: rich people? is there a group of billionaires? you can pick a dollar figure and it could be one above that.

mr. bessent: i could give you a glib answer but i won't. that is not where the money is. at one point when president obama was debating mitt romney, the moderator said, but, sir, that would make collections go down and he said it was about fairness. i am about collection. sen. warren: i understand but i like to think fairness is about billionaires paying their fair share. thank you, mr. chairman. chair crapo: thank you, senator scott. sen. scott: welcome to our committee. good to see you again and thank you for your willingness to serve. it is a sacrifice to you and your family. i think it is an investment for the country. we need folks who are willing to sacrifice on behalf of a greater cause. the greater cause is generations of americans you are unlikely to ever meet be better off because we do the right thing. one of the things i think about is the right thing, you grew up

in a working class family, is having stability in our financial system. one of the places where we need the greatest amount of stability. think about silicon valley bank and other banks that failed recently. as you can imagine chairman of the banking committee i care about the stability and strength of our banking system. from your vantage point can you provide your assessment of the current safety and soundness of the u.s. banking industry and what steps you believe are necessary to ensure long-term stability? mr. bessent: good to have two south carolinians in the room. i think the strength of the u.s. economy, our financial markets is the depth and breadth of our financial system. i believe that we have likely seen the top five tanks become too big a share of banking assets.

we have seen, because of undue regulation, the shadow banking system get larger and larger. and to the detriment of community banks, small banks, and the small regional banks. i think we have to take a look at both regulatory and supervisory conditions in those. i think the banking system as well-capitalized. perhaps over-capitalized. this comes from someone -- my background is as a financial institutions analyst. i have also taught the history of financial crises, so i am very attuned to the idea that financial stability is important. the pendulum tends to swing one way and going to overshoot. from 1999 to 2008 that was an over-shoot.

since then the regulation, our banking system has been constrained, and if we are going to have the kind of, the generalized mainstream prosperity that i would like to see over the next few years it is going to be driven by community small banks and small regionals. sen. scott: if i had more time, another five or six minutes, that would be great. i don't think i'm getting it. thank you very much. i would spend more time on basel 3. there is less capital to loan for mortgages and small businesses. where i will go is towards opportunity zones. as you know, i wrote the legislation and opportunity zones was a bipartisan piece of legislation although it is only supported by republicans. in the results of the opportunity zones has been astounding. my friends who are mayors, democratic mayors supported and

celebrated, and my friends who are republican governors celebrate it, because the fact is a simple that $84 billion committed and invested in opportunity zones have led to real help coming into some distressed communities. it has only had less than a 5% gentrification rate, which is really important. but for the housing questions, so many folks, mayors around the country for the first time because of opportunity zones they are seeing affordable housing in their downtown areas and they have not seen john gettys in three decades. we know they have been effective without gentrification. i hope the administration will spend some time encouraging and supporting the next iteration of opportunity zones. mr. bessent: senator scott, i think they have been a resounding success, and they recently read data that in terms of affordable housing the opportunity zones have created more affordable housing within the zones than any other federal

government program since opportunity zones were created. i think it is a fantastic way to address the housing crisis. i think the inner city redevelopment, we can talk about opportunity zones more in rural areas. i look forward to expanding and continuing the discussion. sen. scott: thank you. my last thoughts will be a comment, not a question. as a result of the tcja, we saw the richest americans' tax burden as a percent of revenues coming in go up. and we saw the poorest americans as a percent of revenue coming into the government go down. i think the easiest way to say that is to recognize that a single mother, like the one who raised me in 2017 made and on

average $30,000 year. her tax rate went down by 71%. that is a result of good policy being good politics, and i hope we keep our eye on the ball of helping the average american have more of their money in their pockets. thank you. chair crapo: thank you, senator scott. senator whitehouse. sen. whitehouse: welcome, mr. bessent. thank you for the meeting we had in my office. i understand that colleagues have already raised the urgency of more sanctions on russia's shadow fleet, particularly as it is sabotaging our allies' infrastructure in the baltic. and urge that it is unfair for chinese manufacturers to be able to under-price u.s. manufacturers by virtue of lower environmental standards. i just want to give two big thumbs up to both of those notions. as we talked about in my office, i think the most immediate

danger of a major economic collapse is going to come through the insurance industry. we are seeing signs of it in florida already. the fires in l.a. are making it worse in california, but it is occurring nationwide, and as we discussed, where you cannot get insurance you cannot get mortgages and you cannot get mortgages, you cannot sell properties at value and that cascades according to the chief economist of freddie mac, into a 2008-style massive economic recession. so, i would like to ask first that you get somebody on your team to take a look at this report, which i would ask to put into the record. from the senate budget committee. chair crapo: without objection, so ordered. sen. warren: on the non-renewables and availability problem, county by county across the country. and if somebody on your team looks at it and can give you a summary, i would be grateful,

and i would ask you personally to read this economist magazine article. i don't think it is complicated. mr. bessent: senator whitehouse, you gave it to me in your office and i did read it. sen. whitehouse: i just want to make sure. mr. bessent: i will point out to my children behind me, doing your homework is important. sen. whitehouse: i think you are the first person in a nomination that has done the reading that has been proposed. so, i just think that all of us need to be alert to this problem. i think it is actually started, ernest hemingway said famously that bankruptcies happen gradually but then suddenly. i think we are in gradually on a climate change-driven crisis that will cascade into the whole economy. i gave my environment public works colleagues a book this thick. i gave your team a similar book

of all the many high-level, serious, peer-reviewed studies that have shown these economic risks. i don't think we are ready for it and i think it is important we be ready for it. i don't want anybody to say they were not warned. so, there is my warning. last question to you, and i'm going to be treading into an area where i don't know a thing because i just heard about this this morning and i have been the ranking member in the epw hearing. so, what i did here this morning is that the manner in which you have structured your partnership has enabled you to avoid the payment of nearly $1 million in medicare taxes, and that the irs has taken the position that the manner in which you structured your partnership to avoid those medicare taxes does not actually

support avoiding medicare taxes. and it is probably more complicated of an issue that you or i are going to get through in the next minute and 13 seconds, so we will follow-up with a question for the record, but i just think that when we are dealing with these massive issues of income inequality and threats to medicare and all of the concerns that i think helped propel president trump to the presidency, it would be extremely awkward if the secretary of the treasury were taking advantage of a supposedly avoidance mechanism that the irs, which you oversee, has determined actually does not produce that result. and somehow those things need to come into alignment. i don't know why. i suppose the easiest thing would be to go back and pay the medicare taxes. but again, this is way more complicated than you and i can dispose of in the next half-minute.

but i do think it is important. i think it is important to send a message as an incoming treasury secretary that everything you do with respect to personal taxes aligns with irs guidance. mr. bessent: senator whitehouse, thank you for the question. so, it is my -- the firm's taxes and we are up-to-date on all of our taxes. this matter is not bios, but it is in continuing litigation. if confirmed, i would agree to shutter my firm, and i have also been informed that the ranking member and the chairman, that i will provision the amount that is lower than the amount stated in the press release that went out last night, and i will hold that until the final case makes its way through the courts. sen. warren: that seems like an -- sen. whitehouse: that seems like

an attentive response to the problem and i'm glad you respect it. this actually is a problem that needs to be attended to, so thank you. chair crapo: thank you, and senator wyden has asked if he can ask one final question. you get one final one, senator wyden. sen. wyden: i gather that after this at some point you and i will have some closers, so i appreciate that, and i'm going to be short on that as well. mr. bessent, i want to ask about the double standard with respect to tax enforcement in america. the working person, a firefighter or nurse or somebody who works for a wage pays taxes with every single paycheck. and the government gets that information. and to a great extent the ultra-wealthy can have a very different system. they can bring in this whole battery of accountants and lawyers and the like and say,

you know, make sure that i don't have a lot of income this year. and then they don't have the same reporting system. and what i have always felt is that ensuring that the government, the irs, can do tax enforcement to prevent wealthy tax cheating is absolutely crucial to limiting this double standard with respect to enforcement, where you have all of this information from people who are working for a wage, and trying to figure out what is going on with lots of wealthy people because, to me, this scam is in what is legal. i want it understood. i'm talking about people using their accountants and lawyers. my question to you is, do you believe that it makes sense for the congress to give the irs the resources to collect taxes from people who may be cheating?

and we don't even know because it is so hard to run down all this information. do you believe it is important for the congress to fund the irs for that kind of enforcement? mr. bessent: senator wyden, i believe that collections are very important. i believe that the irs and, again, i have not been confirmed. i have had no meetings. this is all external. i believe that a large amount of it can be solved by data processing, and we are on the verge of an ai revolution and i would hope that the ai revolution, much as it has in medical technology, you know, it is pattern recognition. my understanding now is that the agency runs on 12 different systems. on cobol, which, the programming

language when i went to yale in 1980, so i am 100% in favor of that. of updating those systems. sen. wyden: you talk to me about this in the office and i appreciated the comments. it is still resources. it is going to be computers, perhaps. not people. but i showed up in the united states senate when only one person, pat lahey, knew how to use a computer. we have seen these dramatic developments, and i think you are right. ai is going to shape the debate, but it still leaves the question, we are going to need resources. and, again, what you have seen, because we don't have the resources to go after the wealthy tax cheats, people who use the earned income tax credit or something, they are the ones who get the audits and the like. i want to see in this position somebody make a commitment to making sure we will have the

resources to go after the wealthy tax cheats who have this unique kind of system, and i would knowledge your point -- acknowledge your point that certainly it is going to be a challenge in the years ahead with respect to ai and other technologies, but you're still going to need resources. are you going to support that? mr. bessent: if confirmed, i will come back to you with a plan for upping collections. sen. wyden: on wealthy tax cheats? mr. bessent: you seem to believe that the wealthy cheat more, but i think across the entire income spectrum -- so, you are saying that the wealthy have this special cachet and if there is some large mother load there, then to figure out how to crack that, whether it is through ai or some other means, that i will commit to coming back to you. sen. wyden: let me tell you why

it is so important. former irs commissioner reading, who was president-elect trump's last irs commissioner, testified here that the irs needed additional multi-year funding because it was "outgunned" when it came to auditing wealthy individuals and large corporations. the view i have stated today is not just one that i offer, one -- but a former trump appointee said specifically that the agency was outgunned with respect to resources. you have indicated you will continue the discussion. it is an important one. thank you, mr. chairman. chair crapo: why don't you go ahead with any closing remarks he would like to make and we will wrap it up? sen. wyden: i'm going to spare everybody and especially the nominee a filibuster. it has been a long morning. mr. bessent, we started off with your confirming that you were going to protect taxpayer's ability to file their taxes for free directly with the irs.

i think that is constructive, because i think when it works for a second straight year we are going to join the rest of the western industrialized world in making sure that our people have a chance to have a system that works for them, that empowers them if they choose it. with respect to some other issues, i'm concerned about a number of other matters, and we may need to have some additional conversations about it. what concerned me was your response to my question about wealth rather than work with respect to being favored in the tax code. i think today that is a reality. that is just plain fact. the people i represent know it, because they pay taxes with all of their paychecks and they are paying a higher rate, and people -- higher rate than people that

have good lawyers and good accountants. i continue to be very troubled by that. some of the past reforms have tried to minimize those differences between tax rates for wealthy people and tax rates for workers. but i remain concerned about that. with respect to some of the other issues, i leave you with the proposition that i have not really heard you touch on, and it is the proposition bill bradley and i have believed in, lo these many years. we want a tax code that gives everybody in america a chance to get ahead. with differences like the ones i have asked about. between the rates for the wealthy and for workers, there is a long way to go to get it done. so, i will look forward to continuing some conversations. thank you, mr. chairman. chair crapo: thank you, senator wyden. we are towards the very end here. i will be brief myself. i want to end where i started

out. i think that it is very clear that you have acted in your dealing with the vetting of this committee in a very, very straightforward, courteous, and honorable way. when it comes to your qualifications to be the next secretary of the treasury there is no room for debate, and you have shown that today here in the hearing. your background, your training, everything is tailor-made for this role, and your character and demeanor are self-evident. have satisfied our due diligence process. in prior congresses i have joined with many of my republican colleagues in voting for well-qualified treasury secretary candidates put forward by a democratic president. even though i didn't agree with all of the positions they advocated. your candidacy ought to enjoy similar support, and i'm going to encourage my colleagues on both sides of the aisle to join with me in advancing your nomination.

i appreciate your taking the time -- the time you have taken to work with us over the past few weeks to get this processed -- this process to this point. i would like to remind my colleagues that the deadline for submitting any questions for the record is 5:00 p.m. today. and without anything else, this hearing stands adjourned. [gavel] [crowd talking] [captioning performed by the national captioning institute, which is responsible for its caption content and accuracy. visit ncicap.org] [captions copyright national cable satellite corp. 2025] [crowd talking]

>> office of managand budget nominee russell vought watch eari live at 10:00 a.m. easten3, span now, or online at c-span.org. >> democracy. it isn't just an idea. it is a process shaped by leaders, elected to the highest offices and entrusted to a select few guarding its basic printable. it is where debates unfold, decisions are made, and the nation's course is charted.