Scott Besant, President-elect Donald J. Trump’s Treasury secretary, will face questions from lawmakers on Thursday about how he will manage a department at the center of the Trump administration’s tax, trade and sanctions policies, as well as It will also manage the debt burden of the country. .
Mr. Besant, a billionaire hedge fund manager with deep experience in financial markets, has been meeting with Senate Republicans and Democrats in recent weeks and is expected to have a relatively smooth confirmation process.
A former top investor in liberal philanthropist George Soros, Mr. Besant has given large sums of money to Democrats and Republicans over the years.
“I strongly believe that, if confirmed, and with your advice and support, we can usher in a new, more balanced era of prosperity that will lift up all Americans and support communities and families across the country.” will rebuild,” Mr. Besant would say, according to a copy of his prepared remarks reviewed by The New York Times.
But during his confirmation hearing he will appear on Thursday, several lawmakers disagree with him on economic policy. Democrats on the Senate Finance Committee are expected to push Mr. Besant to implement Mr. Trump’s universal tariffs, potentially ease sanctions on Russia, establish a strategic bitcoin reserve and cut taxes for the wealthy. Will put pressure on projects.
“Bessant has spent his life helping the rich get richer,” Senator Elizabeth Warren, a Massachusetts Democrat who met with him recently, said in an interview. Ms Warren, who sits on the finance committee, also described him as “smart and thoughtful”.
What to look for in a hearing
Trump’s tax cuts.
The Treasury Department will be key to Mr Trump’s plans to rewrite the tax code and extend the 2017 tax cuts passed by Republicans and signed into law by Mr Trump.
Mr Besant will warn in his remarks that failure to extend the tax cuts would represent the “biggest tax increase in history”.
The expansion of the law is expected to cost $4 trillion over a decade. Mr. Trump has proposed other tax cuts — including eliminating taxes on tips, overtime pay and Social Security benefits — that would be paid for with borrowed money. As the person in charge of the department that issues and sells government debt to investors, Mr. Besant must figure out if investors will buy more Treasury securities when the national debt has already exceeded $36 trillion.
In fiscal year 2024, the federal budget was in deficit. $1.8 trillion, or 6.4 percent of gross domestic product. Mr. Besant has said he wants to bring it down to 3 percent of GDP by 2028, but it is unclear how the new administration will do that.
At an event held last year by the Manhattan Institute, a right-leaning think tank, Mr. Besant said the cost of extending the 2017 tax cuts should be offset by other cuts in the budget, such as inflation. Abolition of the provisions of the Depreciation Act. He also proposed freezing non-defense “discretionary” spending and shifting some Medicaid spending to the states.
Tariff test
When Mr. Trump was looking for a Treasury secretary, it was important to him to find someone who would defend the tariffs.
The president-elect wants to impose blanket tariffs and stiff import duties on imports from China. As Treasury Secretary, Mr. Besant will promote the prospect of tariffs in economic talks with his Chinese counterparts while trying to calm markets and minimize the effects of a trade war that could slow the global economy. .
While Democrats also support tariffs to protect American jobs and industries, Mr. Trump’s plans go much further. The president has said he would use the tariffs to pay for concessions such as reducing illegal border crossings from Mexico and acquiring Greenland.
Mr Besant has said it would be prudent if any tariffs were phased in so that any associated “price adjustments” could be gradually absorbed by the economy.
A boon for Bitcoin
One of the biggest changes the Trump administration could announce is the full acceptance of cryptocurrencies. While Mr Trump was skeptical of cryptocurrencies in his first term, he became a supporter of digital assets such as bitcoin during his presidential campaign as the technology became a major source of donations.
Cryptocurrency lobbyists are pushing the new Trump administration to ease regulations on the industry, and Mr. Trump is considering creating a “strategic reserve” of bitcoin similar to federal reserves of gold and oil.
As Treasury Secretary, Mr Besant will be responsible for ensuring that cryptocurrencies do not become more of a magnet for scams, money laundering and sanctions evasion.
Mr. Besant’s recently released financial disclosure revealed that he had up to $500,000 in a bitcoin investment fund. If confirmed, Mr Besant said he would divest the investment.
Questions about Russia sanctions
Most incoming Treasury secretaries have little national security experience and, as stewards of the nation’s sanctions program, must get up to speed quickly.
That is for Mr. Besant, who will oversee a sanctions program that has expanded rapidly in recent years as the United States has relied more on financial warfare than direct military conflict.
Mr Besant said in his remarks that the nation should “carefully deploy sanctions as part of a whole-of-government approach.”
Mr. Trump said last year that he had concerns that the sanctions could be overused. It leads to the death of the dollar. As the world’s reserve currency. He believes that excessive use of sanctions could cause other countries to turn to other currencies, such as China’s renminbi, to conduct transactions that are beyond the reach of the United States.
Mr. Besant is likely to face questions from Democrats and Republicans about sanctions the Biden administration has imposed on Russia as punishment for its invasion of Ukraine. President Biden has expanded those sanctions in recent days as his administration seeks to build a stronger stance against Mr. Trump, who has a more friendly relationship with Russian President Vladimir Putin.
Mr. Trump has suggested he prefers tariffs to sanctions, and lawmakers are likely to press Mr. Besant on whether he would encourage the president-elect to keep the current sanctions in place.
Besant’s business background
Democrats are also ready to question Mr. Besant’s own tax practices. Democratic staff members on the Finance Committee reviewed three years of Mr. Besant’s tax returns as part of the vetting process.
In memos seen by The Times, staff members wrote that Mr. Besant had pooled earnings from his hedge fund in a way that allowed him to avoid paying more than $900,000 in payroll taxes.
The IRS, an agency of the Treasury Department, has in recent years tried to curb the ability of hedge fund managers to avoid payroll taxes, as Mr. Besant did. “Mr. Besant’s position runs counter to the position of the department he hopes to lead,” Democratic staff members wrote in the memo.
The memo, a preview of some of the questions Mr. Besant will face from Democrats, also outlines other ways to lower his tax bill, including by writing off losses from a publisher he co-owns. were
A spokesman for Mr. Besant did not immediately respond to a request for comment.
Andrew Dohren Cooperation reporting.