As anticipated, Scott Bessent, President-elect Donald Trump’s nominee for Treasury secretary, faced tough questions on Thursday from both Democrats and Republicans during his confirmation hearing before the Senate Finance Committee.
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Among his responses, the billionaire hedge fund manager said the U.S. dollar should remain the world’s reserve currency, the Federal Reserve should stay independent, and that he’s ready to place tougher sanctions on Russia’s oil sector. Bessent also said he’s against raising the minimum wage on a national basis.
Bessent was introduced by fellow South Carolinian, Republican Senator Lindsey Graham, who said the country needs a Treasury secretary “who knows what he’s doing, has the trust of the president, and loves his country.” Graham added: “Your ship came in with this guy.”
Democrats, including Senators Ron Wyden of Oregon and Michael Bennet of Colorado, predictably trotted out the left’s worn-out canard that Trump’s promise to extend provisions of his 2017 tax cuts, would only benefit the wealthiest taxpayers, and add to the growing national debt that has surpassed $36 trillion.
Ironic, isn’t it, that Democrats love tax increases and deficit spending principally responsible for driving up the national debt.
Before becoming a Trump donor and 2024 campaign adviser, Bessent donated to various Democrat causes in the early 2000s, notably Al Gore’s failed presidential run. He also worked for far-left billionaire mega George Soros, which has raised some Republican hackles.
Then there was Vermont Independent Senator Bernie Sanders who — along with far-left Massachusetts Senator Elizabeth Warren — never saw a wealth redistribution program he didn’t gleefully support. In a predictable exchange with Bessent, Sanders asked him if he would “work with those of us who want to raise the federal minimum wage to a living wage to take millions of Americans out of poverty.” The nominee responded:
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Senator, I believe that the minimum wage is more of a state and regional issue.
“You don’t think we should change the federal minimum wage?” Sanders shot back, adding. “We have $7.25 an hour.”
“No sir,” Bessent replied.
As I reported earlier on Thursday, Bessent’s appointment, if confirmed, would likely steer U.S. economic policy toward a more market-driven approach with an emphasis on reducing the size of the federal government, anathema to congressional Democrats and wisely embraced by Republicans.
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Key among Bessent’s previously-stated position:
Economic Strategy: He has advocated for policies reminiscent of Japanese Prime Minister Shinzo Abe’s “Three Arrows” – a combination of fiscal stimulus, monetary easing, and structural reforms. For the U.S., this might translate into:
Deregulation: Reducing regulatory burdens to stimulate economic growth.
Tax Policy: Extending tax cuts, particularly aiming to extend provisions from the 2017 Tax Cuts and Jobs Act.Energy Policy: Boosting energy production to achieve energy dominance.
Inflation and Deficits: Bessent has criticized current economic policies for exacerbating inflation and deficits, suggesting policies aimed at reducing inflation through increased commodity production and possibly rethinking or scrapping initiatives like the Inflation Reduction Act.
Tariffs: While he has supported Trump’s use of tariffs as a negotiating tool, Bessent has suggested implementing them gradually to monitor and counteract any inflationary effects. This indicates a strategic rather than a blanket approach to trade policy.
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With respect to an independent Federal Reserve, some analysts have previously expressed concern that markets would be scrutinizing Bessent’s comments about keeping the Federal Reserve independent given Trump’s frequent disagreements over the U.S. central bank’s interest rate decisions, along with comments about a “shadow” Fed chair.
Bessent told the committee he thinks “monetary policy decisions and the FOMC should be independent,” in reference to the Fed’s rate-setting panel, the Federal Open Market Committee.
The bottom line in my view is Bessent’s support of fewer regulations and a smaller federal government suggest he would do an excellent job as the Treasury Department’s next secretary.