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Scott Bessent visited the Senate without breaking a sweat and gave a warning, 'We don't have a revenue problem, we have a spending problem'

Donald Trump's nominee for the Department of the Treasury had plenty of viral moments with members of the Senate Finance Committee.

Trump's nominee for the Department of the Treasury visited the Senate/Andrew Caballero- Reynolds.AFP

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Scott Bessent went through the Senate Finance Committee to defend the impending Trump administration's economic agenda. Without breaking a sweat, the nominee to head the Department of the Treasury answered questions from senators of both parties and left many headlines. Prominent among them was his analysis of the current situation in the United States: "We don't have a revenue problem, we have a spending problem."

Bessent, 62, founded the hedge fund Key Square Management, an investment management firm with $600 million in assets in 2023.

Throughout his extensive career, he also worked for George Soros. He joined Soros Fund Management (SFM) in 1991 and remained there until 2000, becoming head of European allocation. After five years as a professor of economic history at Yale University, he returned to SFM in 2011 as chief investment officer. He stayed until 2015 and left permanently to found the aforementioned hedge fund.

Scott Bessent's confirmation hearing

Bessent arrived at the Senate sporting a dark blue suit, matching tie, neatly combed hair and wearing glasses. He was introduced by Senator Lindsey Graham (R-SC), and later, he read his opening statement, which stated that Trump has a "generational opportunity to unleash a new economic golden age for all Americans."

When answering questions, he stood out for his sober and serene style, alternating academic theory with hard data on the current economy.

Senator Ron Wyden (D-OR) initially confronted him on the potential impacts of tariffs, asserting that they would ultimately function as a consumption tax on Americans.

"With all due respect, I disagree. The history of tariffs and the theory of optimal tariffs does not support what you are saying," he responded.

At the same time, he remarked that the Trump administration would use tariffs in three different ways: to remedy unfair trade practices, as revenue generators, and as a negotiating tool with other countries.

"We have a spending problem"

One of the most viral moments of Bessent's confirmation hearing was his comment on the U.S. financial situation.

"We don't have a revenue problem in the United States of America, we have a spending problem. This spending is out of control," he said.

Moreover, when addressing Senators Michael Bennett (D-CO) and Raphael Warnock (D-GA), he made it clear that the public deficit weakens the country in the face of foreign adversaries.

"We must make permanent the 2017 Tax Cuts and Jobs Act"

Trump's nominee also insisted that Congress make the tax cuts the Republican president enacted in 2017 permanent.

"If Congress fails to act [on extending the tax cuts], Americans will face the largest tax increase in history. We must make permanent the 2017 Tax Cuts and Jobs Act and implement new pro-growth policies," he continued, warning that "economic calamity" would otherwise begin.

Minimum wage

Bessent was also tapped to interact with Senator Bernie Sanders (I-VT), who specifically asked him about the possibility of raising the federal minimum wage to $15 an hour.

The federal minimum wage has been $7.25 since 2009. However, 30 states and the District of Columbia have raised it since then.

"I believe that the minimum wage is more of a statewide and regional issue," he responded. Not content with this retort, the progressive senator had to "change the federal minimum wage of $7.25 an hour."

"No, sir," Bessent stated.

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Bessent hits back at Biden for comments about "oligarchy"

Again, in his exchange with Bernie Sanders, Bessent took the opportunity to criticize President Joe Biden for his comments about an "oligarchy" in his farewell address.

The exchange was as follows:

  • Bernie Sanders: "Are Elon Musk, Jeff Bezos, and Mark Zuckerberg too wealthy and powerful? Do you agree with President Biden about an oligarchy?"
  • Scott Bessent: "Those three billionaires all made their money themselves. Mr. Musk came to the country as an immigrant. Jeff Bezos...."
  • Bernie Sanders: "Forget how they made their money... Do you believe it's an oligarchy?".
  • Scott Bessent: "Well, I would note that President Biden gave the Presidential Medal of Freedom to two people who I think would qualify for his oligarchs."

More sanctions for Russia and warning for China

Bessent criticized the Biden administration's sanctions on Russian oil as being too weak and, therefore, not generating the expected result. However, he said the trend would change if the Senate confirms him as the next U.S. Treasury secretary.

"I think if any officials in the Russian Federation are watching this confirmation hearing, they should know that if I'm confirmed, and if President Trump requests as part of his strategy to end the Ukraine war, that I will be 100% on board with taking sanctions up - especially on the Russian oil majors - to levels that would bring the Russian Federation to the table," he said.

Finally, Bessent came down hard on China, calling its economy "the most unbalanced in the history of the world." Without advancing much what his strategy would be, he assured that "the United States could not allow China to flood U.S. or world markets with cheap goods."

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