this is 2.5 hours. sen. crapo: thank you, secretary bessent, for appearing before

the committee, especially coming from critical trade negotiations with china. you and ambassador greer made progress which we may learn more about during today's hearing. i strongly support this engagement in the president's policy to press china to open up to american trade. nevertheless, the primary purpose of today's hearing is to discuss equally two critical issues. the president's budget for fiscal year 2026 as well as ongoing tax reform efforts. the president's budget and economic agenda aim to put our country back on track by cutting wasteful government spending and unleashing economic growth. simultaneously boosting jobs, wages, and government revenue. the administration has made significant progress in reducing spending by streamlining processes and improving efficiencies across agencies, including the internal revenue service. while some warned fiscal prudence at the irs would harm tax collection, the opposite has

proven true. individual income and payroll tax receipts came in $120 billion higher this year, in line with congressional budget office projections. these numbers are further evidence that washington does not have a revenue problem. it has a spending problem. a critical part of the president's agenda, and my top priority as finance committee chairman, is to permanently extend the successful 2017 trump tax cuts, and prevent a more than $4 trillion tax hike on american families and workers. the 2017 trump tax cuts increased investment, boosted economic growth, and allowed taxpayers to keep more of their hard-earned money. far from a handout to the wealthy, the reforms lowered tax rates for americans of all income levels, and middle-class families reaped the largest proportional benefits. if these tax cuts expire, all

americans will be hit with the largest tax hike in u.s. history. the majority of the increase will fall on those making less than $400,000 per year. the average family will see a $1700 tax increase. small business owners will lose both their lower rates and the small business deduction, facing rates up to 43%. millions of families will see their child tax credit and their death tax exemptions cut in half. republicans are committed to preventing this tax hike, and making the 2017 tax cuts permanent, while delivering additional tax relief to middle-class families. the house passage of the one big beautiful bill was a significant achievement, and we are capitalizing on that momentum to deliver a bill to the president's desk as quickly as possible. this legislation recognizes that extending proven tax reform is

critical for working families. the bill also recognizes the solution to our debt crisis is not to tax americans more. it is to spend less. tax revenues surpassed estimates this filing season, and tax revenue as a percent of gdp has remained consistent over the last 50 years at about 17%. simply extending current tax policy will not increase that deficit. republicans are undertaking significant spending reductions and have targeted more than $1.5 trillion in savings, the single largest reduction in mandatory spending in history. these reforms target waste, fraud, and abuse that proliferated in our spending programs during the pandemic and under the biden administration. i understand some of my colleagues are now raising process concerns that they did not adhere to in the american

rescue plan act in 2021, or the manchin-schumer deal that became the inflation reduction act in 2022. however, congress must act quickly to prevent an over $4 trillion tax hike on virtually all americans, the largest in u.s. history. moreover, senate republicans are committed to providing families and businesses the certainty they need to invest and plan for the future, as well as to provide additional middle-class tax relief and take steps to lower the deficit with serious spending reforms. this is the best approach to restore economic prosperity and opportunity for all americans. thank you again, secretary bessent for being here today, , and i look forward to her -- to our discussion. sen. wyden: this morning's hearing could be the only opportunity democratic senators have to question a top trump official about the truly

disastrous bill republicans are writing behind closed doors. robert kennedy, junior has been invited to appear. it looks like he is ducking us. oz is waffling on the promise he made in this room to hear from rural oregonians about this bill's catastrophic medicaid cuts. there is a legislative wrecking ball about to devastate the lives of millions of americans. that needs to be the focus of this hearing. while senate republicans are making these small tweaks to their bill, countless millions of people across the country feel like they are living on a knife's edge. nurses and firefighters, teachers and machinists -- they are living paycheck-to-paycheck, barely staying ahead of the bills. they are overworked. they are concerned about providing for their kids or

caring for an older loved one. they see a rigged economy that creates enormous prosperity at the top, but denies it to nearly everybody else. the plan? the plan donald trump and republicans are scrambling to pass is going to do virtually nothing for them. in fact, it would make their lives worse. it is no exaggeration to say the republican plan would ruin millions of lives to help the ultra-wealthy buy yachts and vacation homes. their bill is not a tax and spending cut. it is a class war. it is caviar over kids. it is mar-a-lago over the middle class. the version that passed the house, the only text that we have to go on now since this is all unfolding in secret, including the largest cuts to health care and food assistance in american history. more than $800 billion cut out

of medicaid. nearly $300 billion cut from the affordable more than -- from the affordable care act. more than $500 billion in automatic cuts to medicare. for donald trump and republicans to hide behind the flimsy claim that this will not cut benefits is absurd. to say the bill protects seniors and kids and veterans and people with disabilities is absurd. it is insulting to the intelligence of millions of people who have health insurance today and stand to lose it as a direct result of this bill. 16 million americans lose their health care. working-class and middle-class americans will be ensnared in a thicket of red tape, costing them their medicaid and aca benefits, and making health coverage entirely unaffordable. this is going to inflame the mental health crisis in america. it is going to set back our progress against fentanyl

deaths. kids with disabilities will lose homecare and school-based services. the cuts are going to shutter rural hospitals and take nurses out of nursing homes, exposing seniors to abuse and neglect. my view is the $300 billion cut to snap can only be described as cruel. 2 million kids lose some or all of their food assistance they receive today. it is just unthinkable that elected leaders in a country as rich as ours would knowingly inflict hunger on millions of kids. it will set those kids back for years and years. a new study on the health issue found that the bill will cost thousands and thousands of lives, preventable deaths, each year. why make that choice? why ruin all these millions of lives by stripping away their health insurance and jacking up the cost of living? to pay for handouts to big corporations and the wealthy? that is an awful choice that donald trump and republicans

have made. the bill gives big corporations a trillion dollars in new tax breaks and they are hiding the cost once again with budget gimmicks. it will give the top 0.1% of earners a tax break of more than a quarter million dollars each year. looking just at the tax changes, the typical lower income family would be lucky enough to cover groceries for a week in the republican plan. 14 million families, particularly those of modest incomes, are going to get a tax increase. and when you factor in the medicaid cuts, the food assistance cuts, and the tariffs that the secretary who joins us today once denied american families would not pay. nobody outside the fabulously wealthy is going to benefit from the tax changes at all. the overall trump agenda is a big net loser for the vast majority of americans. that is not tax reform. that is not a spending cut. that is a class war. millions of typical families

will be made worse off, and tens of thousands of people will die preventable deaths each year to pay for tax breaks for corporations and the very rich. that is what republicans have to offer. so this committee has a chance now to have a serious debate. i'm sure there are one or two people in the room who may share a different view than i do. let's have a serious debate, because this is a watershed moment that is going to change our country for generations to come, and it should not be playing out in secret. one last point i want to mention , mr. chairman. i think there was questions about the process. we are asking for the kind of open markup, the kind of thing we did on clean energy taxes, where we debated in this room and elsewhere for hours and hours in the open and there were lots of amendments. let's do that for the big issues. we did it on clean energy. chair crapo: before i get to

you, secretary bessent i have to , say the markup you are talking about had nothing to do with what went into the reconciliation bill, and the reconciliation bills that were done in the last administration were done exactly through the same process that we are pursuing today. sen. wyden: mr. chairman, if i could, clean energy is in the reconciliation bill. chair crapo: not the one we mark ed up. sen. wyden: we had a big debate about it, and essentially it is those issues that republicans are against, and we debated it in open session. i want to do that and that is what my colleagues want to do. chair crapo: as you can see, mr. secretary, there are different points of view up here. we are here to hear from you, and you may proceed with your statement. sec. bessent: thank you chair crapo, ranking member wyden, members of the committee.

i am grateful to join you here today. treasury is committed to working with congress to improve our nation's finances, create new jobs, and strengthen the economy. we look forward to coordinating with you on the president's budget and his tax priorities in the coming weeks. as part of this effort, i wish to highlight today the treasury department's efforts to advance president trump's economic agenda on tax and trade. first, tax. i am pleased to report the treasury has just concluded its most successful filing season in years, and we did so by cutting -- did so while improving efficiencies and cutting costs at the irs. critics of the president's efforts to modernize the irs warned that the effort would result in a 10% shortfall in receipts. instead, the opposite happened. april receipts this year were up 9.5% over the previous year, and receipts in may were up 14.7% over the previous year. most remarkably, the president was able to achieve these results while reducing $20

billion in waste on planned i.t. spending at the irs. this success has taken place against a backdrop of one of the most consequential tax proposals ever to come before congress, the one, big beautiful bill act. the one, big beautiful bill will make the 2017 tax cuts permanent. this will provide individuals and businesses with certainty, and build economic momentum. the legislation is clearly and squarely aimed at boosting the working and middle class, and reinvigorating american manufacturing. according to the council of economic advisers, the one, big beautiful bill will raise take-home pay between $7,800 and $13,300 for the average family of four. it will increase wages between

$11,600 for the average worker, and will cement no tax on tips, and tax cuts for seniors. one, big beautiful bill will also incentivize unprecedented investment in u.s. manufacturing. the legislation will provide 100% expensing for new factories as well as existing factories that expand operations and support made in america, and it will streamline burdensome permitting processes that often stand in the way of new manufacturing products. it is time for this country to start building things again, and the one big beautiful bill makes this possible. the administration is grateful for the house's efforts to advance the one big beautiful bill. we now look forward to working closely with this committee and other members of the senate to get this legislation to the president's desk. second, trade is the second topic i wish to highlight. the progress we have made on tax issues over the last four months complements the significant progress we made in rebalancing the global economy. since i last testified before congress in may, the president

announced an historic u.s.-u.k. trade deal. this arrangement, which creates a $5 billion export opportunity for american ranchers, farmers, and manufacturers, is a preview in what is to come. there are offers to improve trade relations with the united states. this includes china. yesterday, in the early hours of the morning, i return from successful negotiations in london with the chinese delegation. i am confident these negotiations will bring balance to the economic relationship between our two economies. china has a singular opportunity to stabilize its economy by shifting away from excess production toward greater consumption. the country needs to be a reliable partner in trade negotiations. if china will course correct by upholding its end of the initial trade agreement we outlined in geneva -- and i believe after our talks in london, they will.

then, rebalancing the world's two largest economies is possible. i would also like to thank his majesty's government for arranging the use of the magnificent lancaster house is a -- as a meeting venue for the united states and chinese delegations to help stabilize our trade. by challenging the decades-old status quo on tax and trade, president trump is bringing new life into the american economy. more than 500,000 private-sector payroll jobs have been added since january. most importantly, inflation in the u.s. is at its slowest pace since 2021, on decelerating cost increases for shelter, food, and energy. after four years of price increases diminishing the u.s. standard of living, inflation is showing substantial improvement, due to the administration's policies. furthermore, the labor market remains strong, with low unemployment and plentiful labor demand, as job openings remain high.

the strength has been exemplified in the recent performance of the stock market. and i would like to respond to the ranking member's charges of the distributional aspects of the one, big beautiful bill. i would note that thanks to his party's policies, the summer of 2024 saw a record amount of european vacations taken by americans and record food bank usage. that's what their policies did. the president's bold leadership on these issues has laid a foundation for a golden age economy. with your help, we can build on that foundation to create even greater prosperity and abundance for the american people. we hope you will join us in this endeavor. thank you. chair crapo: thank you, mr. secretary, and i will start out with questions. before i make a question, i would like to say it is refreshing to hear you talk about the fact that the united states is finally back in the game of trade negotiations.

our former president, president biden, proudly announced in his presidency that he would not engage in bilateral trade negotiations, and refused to have a single one during his term. now, we are engaged in trade negotiations, and other countries are coming to the table to deal with us. i was very pleased to hear your report on that. my first question gets to the tax reform issue you have already referenced. as you know and can tell from what has already been said today, there are two very different views as to what it is that we are doing. nobody can deny that our top focus is to extend the tax cuts and jobs act from 2017. could you tell us for just a minute what would happen if congress does not extend the 2017 tax cuts? sec. bessent: senator, i believe it would be what is known in

economics as a sudden stop. it would be cataclysmic for the economy if this is not extended. and as always, working americans would bear the brunt. there would be job losses, economic losses in markets, a substantial increase in our budget deficit due to a decrease in tax revenues, and it is unthinkable, what would happen. chair crapo: thank you. and let's talk about what would happen if we do extend the tcja and the other provisions in the legislation we are working on right now. can you talk about the importance of the progrowth tax provisions, the economic impact, and some of the existing and new provisions will have on workers? sec. bessent: yes. first, let's examine the extension and permanence of the tcja.

making this permanent will give an economic impetus to the u.s. economy. as households and businesses have greater certainty. i have met with numerous business leaders since i was confirmed on january 28, and while they are confident that the bill would pass, without 100% surety, they are holding back on their capital expenditure plans. even last week, they told me that there is an substantial planned increase that will be -- in capital expenditures -- that will be unleashed by u.s. and foreign corporations that will benefit american workers. in terms of households, we will see the continued increase for working americans from tcja, which led to non-inflationary --

strong noninflationary growth, as opposed to what we saw during the biden years of substantial inflation. furthermore, the president's proposals for no tax on tips and no tax on overtime, with deductions for new american cars and tax savings for seniors, will benefit working americans and the bottom 50% of wage earners. so it is a unique combination. it will provide substantial business stimulus and it will provide substantial relief to the affordability crisis that has been generated over the past four years. chair crapo: thank you. finally, my last question is, critics, as recently as just now, have called this a tax cut for billionaires, even when the data shows that middle income families benefited the most from the trump tax cuts, and have the

most to lose if they expire. can you tell us what the benefits of this legislation are for working families who are still recovering from the costs of record inflation under the administration? sec. bessent: yes, sir. as i outlined in my opening remarks, they will see substantial increases in their household income, and more importantly, they will see real wage growth, as they did under tcja in 2018, 2019, going into january 2020, pre-covid, when hourly workers did better than supervisory workers. the bottom 50% of working americans had household net worth increases that were substantially in excess of the top 10% and 1% of household increases. chair crapo: you may not have this data at your fingertips, but my recollection is at that

time as a result of the tcja, lower and middle income families had a higher percentage rate of income growth than did the wealthy. do you have that statistic? sec. bessent: i don't have it here, but that is captured in what i said, that hourly workers did better than supervisory workers. so, the benefits to the bottom 50% of wage earners. they were much greater than the top 10%. chair crapo: thank you very much. senator wyden. sen. wyden: thank, mr. chairman. around here, we use the joint committee on taxation to analyze key legislation. they took a look at the house bill, the bill that you and the administration are in favor of, and the joint committee on taxation found that under the tax bill high earners who bring

in several million dollars a year will get tax breaks of a quarter million dollars. this comes from the people that we ask to do the analysis. so if we've got to make choices, who are you with? are you with those high earners that the joint committee of taxation found? or do you think it is more important that 2 million kids in america get enough to eat? sec. bessent: i think you are playing a game of semantics here. sen. wyden: why don't you answer the question? sec. bessent: why don't you ask an honest question? we are talking absolutes and the answer is percentages. with tcja, the top 10% share of taxes went from 37% to 45%. sen. wyden: i asked a very simple question. based on the independent scorekeepers, but you are not responding and that is your constitutional right.

let me move on to tariffs. at your nomination hearing, i asked you whether americans would pay the blanket tariffs that president trump wanted to impose, and you said no. since then, a number of analysts have said these tariffs are going to hit american families like a wrecking ball, something like $2500 a year. major companies like walmart, mattel, and ford have all suggested they are going to need to raise consumer prices as the tariffs hit them. some companies have already had to raise prices, like stanley black & decker. here is what you said. nobody is making this stuff up. here is what you said. walmart will be absorbing some of the tariffs. some may get passed on to consumers. your words. so, another chance on the issue. do american consumers pay the tariffs? sec. bessent: again, senator, you are cherry picking, because walmart makes decisions based on

their customers. two other very large retailers -- this is not an advertisement for them -- amazon and home depot have chosen not to pass on tariffs. and there seems to be a new version of tds, which i would call tariff derangement syndrome. many on your side seemed disappointed that there is no inflation today. as a matter of fact, we saw the best inflation numbers since 2020. so there has been nothing passed on. there has been no tariff recession. so no inflation, no recession due to tariffs. sen. wyden: let the record show that once again, the secretary of treasury does not think american consumers are paying the tariffs. we say to all those people who are trying to pay medical bills and food bills and the like that are still going up -- they know they are paying tariffs. let me move on. sec. bessent: i'm sorry, senator

-- chair crapo: it is my time, mr. secretary. sec. bessent: senator, the data does not show that. sen. wyden: we can have a difference of opinion. sec. bessent: it is data. sen. wyden: the senate is coping with health care choices that are enormously important. what do you think is the largest employer in rural america? sec. bessent: sorry? sen. wyden: what you think is the largest employer in rural america? sec. bessent: single employer? sen. wyden: the sector. sec. bessent: the largest industry? i assume it would be agriculture. sen. wyden: it is rural health care. it is why all of us up here disagree so strongly with what this administration is doing. the tax bill is going to accelerate the closure of rural hospitals, people who basically are the key to surviving in rural life. and our colleagues are going to release new data that hundreds

of rural hospitals across the country stand to lose under the republican reconciliation bill, which apparently you guys don't know is going to clobber the big economic engine in rural america. so i would like to hear your thoughts about whether you are willing to make changes to protect a crucial area of the american economy. in fact, i think it is fair to say almost all of us up here, the chairman and i, for example, we have an honor to represent a big chunk of the rural west. >> we are quite satisfied with the healthcare portion of this in the adjustments to medicaid. >> i would just say to colleagues, my time is up. when you're home over the break and in the light, ask your rural hospitals if they are satisfied with what they

will get with the house changes. because i think they will say that they're going to feel like they're getting hit by a wrecking ball. that will happen all across the land. thank you. >> senator bennett. >> thank you mr. chairman and mr. secretary for coming in today. thank you for having this hearing. secretary besson, the last time you were here i asked you about your emphasis on domesticdiscretionary funding in your opening statement. you had stated " we must adjust federal domestic discretionary spending to get our fiscal house in order while striking an urgent tone on our growing deficit". i mentioned to you then that domestic discretionary spending is only 15 % of our budget. i think if you are serious about those reductions you might not push tax cuts that could almost certainly not be offset by discretionary adjustments

alone. and now we know you can't, of course. we have the details of your plan. take healthcare from 10 million americans, 126,000 coloradans, cut nutrition assistance for millions of adults, sunset clean and energy investors are so critical to the american west, give over 40 % of the tax benefits of this bill to the top five %. and it's not even close to being paid for. even my colleagues on the republican side who, for years and years have claimed to be the fiscally responsible party, now are admitting that it's not paid for. this bill adds another $2.4 trillion to our national debt. it will put the deficit to gdp ratio to 7% which you said before when you were here is unsustainable. far from the

3% target that you describe. if you look at your proposals taken together, there is no getting around the fact, there is no getting around the fact that the richest americans would receive an average tax cut of $300,000. which again, we are not paying for with the discretionary cuts that you advertise. so once again, we will have to borrow money in order to assist the people in this country who least need a tax cut at this moment, while the americans who have been made miserable by the economy that they are in actually see income reduced because of cuts to medicaid and to snap. i think mr. chairman, this is really important, meanwhile, interest rates are at 20 year highs. moody's has slashed our credit rating.

because of the fiscally responsibility of this administration. the world bank has cut our gross estimates and half. and the bond markets are screaming at us to stop. we now pay and we are paying this year more and interests and we are in the national defense. secretary besson, how can you swear you're concern with fiscal health with the family any of the top tax cuts the least ? >> we did not get here. we inherited this ffiscal situation, while you inherited from donald trump. you did, mr. besson! yes you did, mr. bustin. you inherited from donald trump. he is the first president to

come back after a four—year hiatus, after we know exactly what the last tax cuts did, which was below a massive hole in our deficit and debt. you can't sit here and lie! it's true! to coin a phrase, the data shows that that is the result. the math shows that that is the result. no one on the side of the aisle admits anymore, or, or claims anymore that they didn't blow a huge hole in deficit. they did! and now you are here saying to the american people, let's double down on that! we are going to give tax cuts for the wealthy. we are going to get tax cuts again to the wealthiest people in america. and we are going to finance it on the backs of the sons and daughters of teachers and firefighters and police officers all over this country because we can't pay for it.

because the treasury secretary discovered, somehow, that domestic discretionary spending is only 15 % of the budget, and therefore, you can't balance in their. >> well sir, we had a referendum on november 5. your side lost. i agree with that. >> and i'm a rare democrat that doesn't blame donald trump for winning. i'm sad he won, i don't blame him for winning, but don't come here. go ahead. go ahead. >> higher decibel levels do not give you more veracity. >> my statements are true, that's what you mean by veracity. you blew a massive hole in the deficit when your predecessor was sitting here under donald trump. so the question is, can we think of something better to do with the money then drive up interest rates by borrowing

money from our kids so the richest people in america gangetic tax cut when they don't need it? that is the reality of your plan. >> sir, actually, the high interest rates were achieved during the buying administration in october 2023 and we have not touch those rates since then. >> i am out of time and i appreciate the endorsements of the chairman——indulgence of the chairman. >> senator grassley: >> first of all, i want to thank you for the several times we've had a personal conversation. i appreciate that. you are very open to listening to us as members of the senate. i have made clear that i support president trump's goals of getting better trade deals for us producers. i've heard from many industries and

businesses in iowa, each in a very unique position due to the tariffs but all express one common concern. and that is the need. that is the need for certainty around trade. i have spoken with several trump administration officials and nominees about the importance of finalizing two or three deals to provide some certainty. so would you agree that trade deals need some certainty and at the same time provide fair market access for us goods would benefit the economy and provide much—needed markets? >> yes, sir. as i have said, senator grassley, there are 18 important trading partners and definitionally, our largest trading partners also constitute our largest trade

deficit. so we are moving deliberately, we are trying to decrease uncertainty. but not the expense of a generational opportunity to do trade deals to make up for 40 years of bad trade policies. when these countries come to us with their trade offers, some of them have made very good offers and i look at the list of their tariffs, none tear of trade barriers, the potential currency manipulation and the subsidies of industry and labor. i agree with president trump. i don't blame these countries for getting away with what they could. i blame the preceding government set up and get away with it. so we are moving as quickly as we can to get the best deal that we can and i think we will seemore deals coming quickly. >> just not a reaction to what you said but a supplement to

what you said. i think the sooner we can announce one or two or three agreements, would notify to the country that you are on the right track. i don't question that you're on the right track but i think the public needs some, sooner they can get that message, the better for the economy would be. i want to go to something that is an interest to farmers. and i knowyou've said several times your interest in agriculture. the finance committee has been workingon what will soon be 45 the clean fuels production tax credit. implementing this credit improperly is important for the biofuels industry, especially for farmers. the biden administration failed to meaningfully address and fortify these regulations. they

put some out for not much beyond that. it leads for the for the d sustainable aviation fuel credit demonstrated that treasury officials in that administration to nothing about farming.—— governing 40 5z, we need everybody in the trump administration to take the time to learn about how farming works. so this is kind of a question of working ahead, looking as the president signs this bill. violations will be written on 40 5z. would you be willing to work with the congressional colleagues, ——and even the senator to make sure that we get regulations under 40 5z that work for farmers?

>> as i had my initial meetings back in january with both yourself and senator marshall, you both brought up 40 5z. and as i mentioned, i go home and do my homework so i am familiar with it. i look forward to working with your office and make sure it is implemented in a most robust way, but that it does not allow for foreign actors to have a backdoor into the program. >> ok, thank you very much. a little bit, back to the conversation you just had with the senator from colorado, the 2017 tax law provided tax relief across all incomes, with a focus on the middle class. just as important, the law allowed progrowth reforms to incentivize business investment, boosting production leading to higher wages. the study published by the national bureau of economic research found in 2017 the law boosted

investment 20 %. what will making the 2017 tax law permanent mean in terms of economic growth, job creation and wage growth? that's got to be my last question. >> senator, i believe that the full expensing was one of the most powerful access of tf jj, and that has tapered since over the last few years. i believe that going back to 100 % expensing for equipment and what we have added to the bill will be very powerful is full expensing of factory structures. so not only do we want to make the us the best place to do business in terms of energy dominance and in terms of regulation, we are also going to increase the after—tax return capital, which will allow companies to thrive

here, hire more american workers for good wages. >> senator langford. >> mr.'s chairman, thank you, mr. secretary think you. i want to make a comment on the full cleansing you just mentioned. i worked on something like this for several years.——to say to folks that they are buying more equipment, if you are adding it in they are investing in their workers and more productivity that should be able to not be depreciated over years. that should be taking care of that year. so i appreciate your comments on that. i want to switch subjects and talk a little about sanctions. last year under the biden administration, best we can tell the iranian regime sold about $90 billion in oil. $90 billion. that funded hamas, hezbollah, the houthis continue to be able to equip the russians with iranian weapons to be able to attack

the ukrainians. this administration has been pretty clear on trying to be more aggressive on iran. because of their nuclear program. we have had a report come out in the last 24 hours the international topic energy agency says that you run has about 900 pounds of highly enriched uranium and they seem to not be slowing down at all in their nuclear weapons program. what is your plan at this point for preventing iran from advancing economically until they stop their nuclear weapons program? >> senator, since i arrived in the treasury building, we've implemented a maximum pressure strategy on iran. and more importantly, those who trade with them. we have taken many unique steps towards sanctioning, could be something that had never been done before. refiners in china,

private companies called peapod refiners. willing to sanction those refiners and their families, they have property in the us or western europe. just this morning before coming here i signed two more iranian sanction orders. so we are exercising maximum pressure. we are trying to track down the so—called shadow fleet. because what happens with sanctions when you put on sanctions, you create a new market elsewhere. so each time we make a move, they tried to subvert it. our allies in the middle east during my trip with the president there, i had substantial discussions with their finance ministries and central banks. and they have been very helpful in making sure there is no leakage through other middle eastern banks, trading companies or

financial entities into the iranian regime. >> thanks for doing that. when we first met we talked about sanctions and that authority has been back if you use it wisely. thanks for the wise use of that. i was in the middle east two weeks ago, a week after you were there. i met with multiple heads of states throughout the region and i heard over and over that they said to tell president trump in the treasury thank you for releasing sanctions on syria. smart use of that. a sod is gone where we put the sanctions on a sod. they kept saying thank you for giving syria a fair chance without assad. you have started aggressively putting sanctions on individuals and family members

connected to these violent mexican cartels letter trafficking drugs, murdering mexicans and leading to the death of americans that the way they are pushing drugs and our country. you started engaging in a way that has not been done in the past about pressure on these criminal organizations we now list as terrorist organizations. telling of the plan now. >> so by designating these mexican cartels as fto's, foreign terrorist organizations, it gives us much more sanction and authority to go after them and their compasses both extraterritorial he and to look for them in the us financial system. we are working with institutions in the us on our side of the border, specifically seven counties that are border counties to make sure that there is no leakage. and we are constantly

sanctioning in examining what is going on with the cartels. this fentanyl crisis, the precursor drugs come from overseas. they are made in mexico and they are brought into the us. just imagine if there was a terrorist organization that was killing 100,000 or 200,000 americans a year ? how would we respond to that ? because this is what is happening. these are terrorists. >> thank you. >> thank you, senator whitehouse. >> thanks very much esther chairman. thank you very much mr. secretary for being here. i don't know if you remember, but when we first met i give your staff a fat binder full of economic warnings of what would take place if climate change were not mitigated. and you indicated that you had actually read the economist

magazine cover article. which at least in its current version now says as it's headlined " homeowners facing $25 trillion bill from climate change". to be clear, that is a global effect, not just in the us. since then, a number of other things have happened, starting on the day we met, when the international financial stability board put out a warning report to the world baking system that the climate change problem was coming at them. both in terms of reduced mortgage revenues. if the mortgage markets collapse, ——and other in term of loan—to—value ratios going south, when home values fall because the property is no

longer marketable because it's no longer insurable. so that warning has come out and i would commend it to you and your team to have an honest look at it. then first street, which studies flood risk, came out with a report suggesting that a $1.4 trillion hit to us home values looming, again as a result of the same cascade, that was originally, or best originally presented by the chief economist for freddie mac. who said when climate risk gets uninsurable, then mortgages become unavailable and property values crash. and his prediction was that it would cascade into a 2008 style recession.

that original warning was based on coastal property value risk. now we of course have wild fare adjacent property risk that could be a similar catalyst. so it also urged your team to look at that first street report and evaluate us. also since then, chairman powell of the federal reserve came to the banking committee, and testified that 10 to 15 years there would be whole regions of the country in which mortgages were no longer available because of this insurance/ mortgage problem. allie and, i think is the biggest insurer in the world, $1 trillion company with enormous stakes and getting stuff right in the insurance world. one of their board members wrote an article that i

would also commend to you and your team, highlighting the danger to the danger of the insurance model from climate risk. highlighting the danger to the real estate model, and also predicting damage in the financial system from the cascade of insurance to the financial system. but also because a great number of transactions in the financial system are held together by an insurance component that would no longer be available. i would commend that peace to your attention. and most recently fitch has just warned of danger to mortgage—backed bonds and municipal bonds coming from this climate risk, where the mortgages, we saw before 2008 what happens when mortgages lose their value because the underlying property is not worth it. and it works because

they would fate the underlying value of the property. now it's because natural causes are knocking down the value of those properties recoverable in the case of, for instance, sealevel rise. so i am just continuing to make this warning. i think these are really serious. i come from a coastal state. when you have the storm warnings, you should pay attention. when there are storm clouds on the horizon, you should pay attention. so please, take a look at those different articles that have just mentioned. if your team is there to take notes, you have a tape of this if you're interested. have your federal insurance office and the treasury insurance office take a look at this and if you think this is all wrong, if you think that climate change isn't real or is a hoax, feeling of not having an effect in insurance markets, if you think it doesn't affect

mortgage markets orthe unavailability of a mortgage doesn't damage the value of a middle—class home or that regional hits to real estate values are going to cause a recession, then i would like to have the argument, that conversation with you. but if you agree with me that those things are all true and predicted, then we have to prepare. and i would urge you, prepare. >> thank you, senator. we likely agree on the direction, maybe not the magnitude. i also believe that resiliency must be a component also and we should move towards greater resiliency. >> if you don't mind, when your team has had a look at those 5 articles that i mentioned, and you've got somebody who is on point on this issue, i would like to have a conversation with you. >> i'd be happy to. and we have frequent interactions with the

50 state insurance regulators as part of the financial stability oversight council. >> mr. secretary, thank you for being here. i appreciate it. mr. secretary, i want to talk about the hotel credit. your hometown of charleston is because usually these. new orleans took some buildings which had historic significance, catalytic upon redevelopment, into making an area of the town that was declining in this company which is vibrant. i think you'll see there's a 5 to 1 ratioof federal investment. if you put one dollar you get five dollars leveraged in private investment in terms of revitalization of communities. but the hcc has not improved for about 40 years since it was put into place by president reagan, and it's lost about 25 % of its value over the last decade. so i'm trying to reform it. any thoughts or experience with htc and

thoughts about that ? and its importance in terms of achieving a more prosperous economy ? >> sir, i have seen, since my childhood, charleston gone from a small coastal town to the number one coastal destination in america. i think for a record of 10 years by travel magazines. so i agree with you, and my team would be happy to work with you on technical assistance for modifications and for how to make this better and increase the multiplayer. >> sounds great. from your lips to the chairman's ears.on hygiene and credit. about 42 billion in hydrogen related investments due to the 45 the credit but the previous biden

administration kind of messed is over. innocence it said you can't take natural gas and make it into so—called blue hydrogen by coupling it with carbon sequestration. so this is just a request. if congress maintains the 40 5z credit, can as you can to commit with working with our office to address the negative treatments that the previous administration did upon blue hydrogen, and something which she really wants and is using in a variety of ways? >> we would be happy to work with your office. >> thank you . ——there are multigenerational forest landowners in south carolina and they will have a tree nearly end of its life growing cycle, maximum value and then a hurricane or flooding events, forest fire goes through, you name it, and they use to see a cumulative value of 20 years. there

insurance does not cover the accumulated value. it covers the initial value of way back when. so it's not really the way to ensure a product. we have senate bill 1111 41 about the reforestation act, which we are hoping can correct this oversight. so as we face both wildfire and hurricane season, my request to you again is if you can help us get technical assistance advanced and otherwise if we get it through congress and help implement. >> senator, i am unfamiliar with that bill but it makes sense that embedded gains should be insured, so my team will be happy to help. >> thank you very much. one thing i have been interested in, in a different tact, is how our federal agencies are using computers often times with the feeling which cobalt. i studied that in 1979 at lsu, and the

federal government is still using there also using that. ——three years later the company has not fulfilled its contract. the people who tell me they know what they are doing and i believe this, say let's let a contract say six months you have to be up and running because that is how you guarantee results from somebody who has previously done it. can you give us an update on the technical update occurring within treasury? > > senator, i learned cobol in 1980 and college also. and i will tell you that these tech updates are both shocking in their efficiency, but more shocking in the waste that's gone into them. the treasury/ irs systems, mainly the irs began a tech update in 1990, has cost

upward, we may be approaching $50 billion. $3.5 billion per year is spent and there is no end in sight. we are working diligently to have that system off of cobol and into a workable, modern programming language by the end of this administration. >> praise god. thank you, sir. >> senator warner. >> thank you mr. chairman. mr. secretary, good to see you. thank you for your service and you your busy travel schedule. you know if it's me i'm going to raise an issue that i share with a lot of folks on this committee, but my particular the chair about cfi's. —— broadly bipartisan. this

should be a no—brainer and i appreciate in private and in these testimonies that you have a reaffirmed the values of cfi's. time little bit more of an surprise since we get 8821 leverage off of every federal dollar that goes into this private public partnership. when the administrations fiscal year 26 year budget to cut the cfi programs by over 50 % and at the same time, the department of treasury seems to be flow welcoming the deployment of existing 25 funds, since 75 % of them have not been actually obligated and spent out. so it should be a really easy no—brainer. can you could met, yes or no, that the admission will follow the

law and obligate the unspent to 75 % of the fiscal year 25 cfi funds? >> senator, this is the first i have heard of it. i will commit to having an answer to you. >> i would you say, i have great respect for you as we know, there's a lot of withhold appropriated funds. you have been supportive of this. we need to coming at the chairman to let you know little bit. it is concerning to me that 75 %. >> senator, this is the first i've heard of it. i've consistently stated. >> you have been great. let me just. >> so we will have an answer by the beginning of next week. >> and that is my next question. >> go to the 26 fiscal year budget, where you are cutting cfi funding by over 50 %. and i guess i don't get it. these are 8 to 1 leverage fund. every federal dollar have a great leverage return in the

private sector, which is fine. of cfi and how they were going and not what is going. ——that the cdf five funds are statutorily sound. so if so and they have an 8 to 1 return on every federal dollar in terms of affecting underserved communities, why are we cutting the whole program by 50 % in fiscal year 26? >> i understand the bipartisan support. we have created a new 100 million reward program for rural communities. so hopefully we can rebuild. >> i know about the rural program. and i support world cdf eyes. there are suburban and urban needs. and i know that you

support what we do. i hope you'll go back and take a fresh look at that. i think this is one of the areas where there is huge bipartisan support and we ought to not walk away. i want to move to another one that we have talked about. one of the things about our system, and we all know we need ways to improve tax payer compliance and make things that are at the irs. but i think our whole system works on voluntary compliance. and we've got about 85 % of our citizens paying taxes on their own. i think that's a lot, contingent upon their trust that their personal data is not going to be manipulated or used elsewhere. so i have raised this with you and have written letters on this. i have been hugely concerned about the doge

boys coming in and potentially accessing this information. and i can tell you that i hear from taxpayers regularly in virginia who are afraid about whether they should work with irs going forward. we wrote to you in april, we wrote to the acting commissioner hawk under on this issue, and he basically said nothing to see here. so this notion that the date is going to be protected but at the same time, the irs doge boys came up here at staff level and briefed about the fact that they are creating these tools to suck out information. i have actually put a villain to try to increase the penalties on misuse of that private information. can youin front of us assure us that the private information of citizens that will get is that 85 % voluntary compliance will not be abused in terms of the

doge process sucking up the information? >> what you are referring to is 6103 of the irs code, which ensures taxpayer privacy. and i have said, some enthusiastic people have the motto to move fast and break things. a treasury we move deliberately and fix things. we have made sure that any access is compliant and we are, i have repeatedly said, collections, privacy and customer service. and on the privacy aspect, there was a leak in the previous had been stationed through a contractor who is now in jail. i cannot remember if he was fined 5000 or $10,000. we do not know the terms of his plea deal, but i would support in increase in both the monetary penalty and the jail time.

>> absolutely. maybe we can work together on my bill. the last one of the time is over. there are huge concerns, at least in my state, that these doge boys are sucking this information out. i think you have this comes from other state senators because it's not you take my state. >> mr. johnson. >> mr. secretary, welcome. it's interesting that our colleagues on the other side of the aisle now, not in charge, are all concerned about massive deficits and spending and the impact it will have on everyday americans. i think it's appropriate to have a little history lesson here. i have put together a report. i can give you a talk on it later. it shows i didn't have time to reallyslowly starts up but the impact is so dramatic, glaring. we have an 11 inch piece of

paper here this shows that under president bush, his eight years, he averaged 250 deficit. ——they blew the lid off of that. for the next four years we averaged deficits of $1.27 trillion. the first time we ever had a deficit over $1 trillion. that sparked the tea party movement and i'm part of a. up put some restraint on spending and deficits. the next seven years we average 606 $1 billion worth of deficits. still way too high, but reasonable compared to today. covid hit, we had a massive bipartisan spending spree. $3.1 trillion deficit. we went from $4.14 and spending to $6.5 trillion. now irresponsible

president, responsible party in power in 2021, as the economy recovered in employment came down. it would've returned to pre—pandemic levels of spending and deficits. but that's not what happened. instead, under president biden and democrats in charge, the average $1.9 trillion worth of deficits so so we went from $661 billion in seven years, covid then have averaged $1.9 trillion in deficit spending the last four years under the biden administration and democrat control. unfortunately, this is the projection, the baseline production over the next 10 years of about $2.220 average.——$2.2 trillion average. i appreciate your opening status in your confirmation hearing. you are repeating what the chairman said in his opening statement. we don't

have a revenue problem but a spending problem. here is the chart that shows that.—— i don't know if any american if they had illness had to borrow $50,000 to pay medical bills. a family number got well, they could keep borrowing $50,000 and spent at that level. but that is what democrats did. we never went back to pre—pandemic levels like our responsible leadership did during world war ii. we entered world war ii ——we went up to 41 %. we are back down to 11.4 % afterwards. they realized you cannot continue spending. we had to get back to prewar levels. so my question is. i giving you this report, i want to release it hopefully next week. i really like your input into this. because these are just the facts. in the facts completely bolster what you said in your confirmation hearing that we do not have a revenue problem.

we have to promote economic growth. it's a primary component of a solution. but we do not have a chance of returning to a balanced budget if we don't return to pre—pandemic levels of spending. i have laid out a number of options going back to clinton in 1998, obama in 2014. president trump in 2019. the social security and medicare as they are. as you spend. but as always, increase them by population growth and inflation. we would have a baseline spinning somewhere between $5.5 trillion and 5.6 drilling dollars. we return to that $6.5 trillion over 10 years, we might get down to something like half $1 trillion deficit again with 3% growth. it is all contained here. you have a comment on that ? could you give me some assurance that you would provide me some feedback and input? >> senator, i always give you

feedback. and thank you for this. as i said, i am committed to changingthe trajectory of this and there are two ways to do it. through spending restraint, cuts and growth. and i think that is a very difficult calculus to achieve. we are trying to navigate that calculus. so as you said 3% gro ——growth will change the trajectory. but we did not get here overnight. i have gained about 10 pounds since migration. i'm not going to cut my arm to get back to my january 20 weight. i'm going to eat less, exercise more, and that is what we are trying to do with the federal government. >> you are left with four year average deficits of $1.9

trillion, now exceeds $7 trillion with just six years. so you inherited an enormous mess. not to even mention the border. but i appreciate your effort here. we want to work with you to solve this massive problem. thank you, mr. chairman. >> senator hassan. >> good morning mr. secretary and thank you for joining us this morning. secretary besson, in your confirmation hearing, i asked you whether any of president trump's policies would increase costs for family. he said that there is " nothing i can immediately think of". have costs for new parents increased or decreased under trump? >> i am not sure how you are defining up. but overall, inflation is down for the first time in two years. >> let me provide you with some

data then. the answer is that costs have gone up for new parents. as a ranking member of the joint economic committee, a recent report this morning showing that costs have gone up nearly 25 % for the most popular baby items since trumps main tariffs were imposed. this includes a price increase of more than $40 for the most popular infant seat, car seat on amazon. mr. chair, with unanimous agreement of the enter this into the record. thank you. with his reckless tariffs, the president has imposed a 10 % national sales tax on imports into our country. so mr. secretary, do americans pay tariffs? >> senator, thus far we have seen no price increases due to tariffs. >> what what i have just asked you is whether americans pay the tariffs. >> again, as i told the ranking

member, walmart has decided to pass along some portion of the tariffs. that's a private decision, amazon and home depot have not. >> let me just tell you what is happened to one small new hampshire business. can we have the charts appear? because you are essentially testifying that americans don't really pay the president's across the board 10 % tariffs. behind me is a receipt from the us customs and border protection. showing that a small distiller in salem, new hampshire, paid the us government $2600 in the president's new tariffs on a single shipment of lemons from italy. i have the same receipt for about the same sized shipment at the had before the tariffs went into effect. and that $2600 was not on the receipt

back in march. so since you testified that americans do not pay the presence tariffs, will the treasury reimburse this new hampshire small business for this tariffs that they paid to the united states government ? >> senator, a luxury product from italy, i think we have to look in the aggregate and the aggregate is showing us that thus far, contrary to many wishes, that there has been no inflation from tariffs. >> so first of all, this is a small distiller in salem new hampshire that employs people. and now it has a monthly or bimonthly expense of $2600 that it didn't have. and it's either going to lay people off, stop producing some of its products, but it's businesses that are not going to grow with the $2600 charge unless it passes on the price to american consumers. so i just want to be clear, you all need to own up to the fact that tariffs our taxes. they are a sales tax. i think you noted in the oval

office recently that the president tariffs would raise $2.8 trillion over a decade. >> i was quoting the cbo. >> so the cbo now says it. that is about a $3 trillion tax that americans will pay. a sales tax. >> no ma'am. much of it is being absorbed by the producers. >> well it certainly is true for new parents. in addition to the five popular products on amazon that new parents need, there is another, we did another analysis on a baby list registry. new parents in america will pay total over the next year about $875 more for their products than they would have paid before the presence tariffs. lastly, i just want to note that the cbo has made clear at the republican budget bill will take away healthcarefrom millions and millions of americans.

both medicaid coverage and the affordable care act coverage. dimension, it will trigger a $500 billion cut to medicare that will impact providers in rural hospitals. and it will add trillions of dollars to the national debt. so, mr. secretary, this is all to pay for massive tax cuts to millionaires and billionaires. why do you need a tax cut at the expense of health care for millions of americans? >> well i would dispute those numbers. 1.4 million illegal aliens receipt medicaid. >> first of all, the cbo, they don't receive several medicaid dollars. and secondly, the cbo says without counting that, it is still 11 million or 12 americans were going to have ippeeiaway so that people in your income bracket can get massive tax breaks. i think that is un—american and i think it's unfair and i think the american people understand that too. thank you, mr. chair.

>> senator hassan, thank goodness for bringing tariff receipts. >> senator cantwell. >> think you, mr. chairman. good to see you, secretary besson. there was a wall street journal that is doing a aleatory about presence trade policy. maybe it's about the lack of strategy today. i just wanted to see if i couldyet your thoughts on that. in the sense of do you believe in a rules—based trade regime ? >> i believe that the international economic system has failed the american workers, senator. and for too longwe have adhered to a system that does not work. and i believe and i am fine saying that doing the same thing again and again and expecting a different outcome

is the very definition of insanity. >> ok, so i am trying to get a philosophy here. but i think you just gave it to me. i guess you just gave it to me. i don't understand how we in the united states don't win without saying that we are going to have a rules—based system. part of how we win as we get more people on our side about the rulesand set the rules and done make everybody adhere to them. so if it's not rules—based, then it becomes more ad hoc in the process and i think that is why it's troubling and hard to follow. i guess i don't need to ask more about multilateral. i don't know. do you think the industries believes in multilateral's? >> i believe that we attempt to use multilateral's, but i believe that it has failed the american people. we have these

gigantic trade deficits. there is something called the china shock and workers were left behind and working americans have suffered because of this. so china, the second largest economy in the world andthis multi—lateral system that you like is considered a developing country. under what measure are they developing country? >> i personally believe in bilateral, multilateral. but i represent a very trade —dependent state. i want to open more markets i also believe the economy is way bigger outside of the united states been inside. so i am just trying to get what the philosophy is the administration. but you have answer to questions, very helpful in that. can ask a few more to the one, wanted to know whether the investment tax credit, you know, we have an investment tax

credit that we made as part of the chips and lands act, the 40 8d advanced manufacturing tax credit. these are important for us and our competitiveness. do you believe that this 40 8d tax credit should be extended? >> i am unfamiliar with that. i will get back to you. but i will, i would note that i believe it's substantial that it has not worked that we haven't. >> it has been in place very long. so part of chips and signs was that let's attract the sector back into the us. their investment said that that but there was also a tax credit to help level the playing field against those other countries to make sure the united states was receiving that investment in the united states. so just. >> i will get back to you. but i believe it included many bells and whistles that even

secretary rolando experienced great frustration in making this work. >> on the 40 8d tax credit ? i don't think that's right, is it? >> this may be the one that senator wyden and i got in the bill. >> yes. we will give the secretary a little bit more familiarity and then come back. >> i may be conflating it with the chips act. >> tik tok next week is the 90 days are up. and clearly, china's china make it part of the negotiation. but we would like the law to be enforced. we passed it. what is your, where are we with meeting the deadline that was set next week? and what do you think, how does this relate to the broader negotiations? >> i have no visibility into tik tok. i can tell you it was not discussed at the meeting with london.

>> ok. so we will try to get some information from somebody else in the ministration about that. but next friday i believe is the deadline. and the chinese seem to use it as, so it's good to know they didn't bring it up. thank you, mr. chairman. >> senator blackburn. >> thank you, mr. chairman. mr. secretary, thank you for taking the time to be here today and i want to say thank you for the outstanding work that you have done on behalf of our nation as you have tried to help with trade negotiation and you have looked at policy tthat affect each and every one of us. i do want to talk about economic growth and tax fairness, tax relief. i think as we look at

extending the t cja, and of course, it's interesting that many people don't realize that this is really a tax cut and jobs act 2.0 that we are debating and we are getting ready to pass. we all know the cbo is consistently wrong when they give us numbers. they use static scoring, they do not use dynamic scoring. they never assume that taking an action is going to give you a positive reaction. and it causes the cbo to be wrong we repeatedly see this. we chuckle about it sometimes and it's why people like me think we need to have a range and look at what cbo says and what other outside entities have. but when we talk about economic growth and look at

what happens after 2018 and we look forward as to what has happened. we know that tax receipts last year were at their highest. we know that much of that came because of the t cja passage. and we need to make those cuts permanent so that we can continue and spur economic growth. but i would like for you to just talk for a moment about, as you look at this and look at permanents, the difference that will make in giving individuals and mom and pop businesses on main street. in tennessee, most of our jobs are small businesses.

>> i like to congratulate you on what i call the tennessee economic miracle. i was recently in nashville and all of the hallmarks of a boomtown with controlled group, prosperous. the business community, happy citizens and everyone in the income distribution doing well. permanence is essential. when we pass the one big beautiful bill, what will happen here is we will no longer be talking about tax cuts. we will be saying that this is the permanent law of the land. as of now we're not talking about the corporate tax rate. that was made permanent and brought home a huge amountof tax revenue from overseas subsidiaries. we no longer see

the so—called inversions i talked to companies almost daily as the ceos come in to see me and they tell me that they are paying a much higher % of their global income in the united states because of the certainty in the corporate tax rate. once we make these provisions permanents, i believe we can see an acceleration. we will continue to make the united states the best destination for capital to start your business in the country and importantly, i think that now will be an opportunity for main street because unlike big corporations, families and individuals who want to

start——whether it is the increased uncertainty. because whether it is a fortune 500 country, that could threaten their viability. for an individual, for mother to start a business that she needs to know that she has permanence and certainty. i think we can create a whole new age of entrepreneurship. >> i agree with that. i appreciate your comments about nashville. one of the things that has helped us in tennessee is when i was and being given to the

permanence in policy has served our state very well. thank you, chairman. hon. bessent: i would hope you would speak with the governor and the assembly there about doing the same. >> thank you. senator warren. >> i want to ask about the republican big beautiful bill which would not about 16 million people off of their healthcare coverage and cut programs that keep groceries cheaper for millions of families. in order to try to pay for about $4 trillion in tax giveaways that are mostly going to be sucked up by linears, billionaires and wealthy corporations. so secretary bessent, i would like to start with a very simple question. will this bill increase or decrease the deficit?

hon. bessent: there are varying scoring on that. sen. warren: i'm asking you to will this increase or decrease the deficit? hon. bessent: it is my view that over the 10-year window, it will decrease. sen. warren: do you have anybody who agrees with you on this? let me ask my question. every credible independent expert agrees that trump and the republicans big beautiful bill would have billions of dollars to the national debt and would not even come close to paying for itself. the nonpartisan congressional budget office the budget model and the yoke budget land all agree on this and they are looking at 10 a year windows, thank you. and so to the conservative tax foundation and committee for responsible federal budget, conservative groups, even elon musk and wall street journal are

criticizing the bill for ballooning the national debt. the only people who are saying publicly that it is not going to add to the national debt are you, donald trump: the republicans in congress. do you have an independent group that has put forward numbers that disagrees with all of these conservative groups who disagrees with "the wall street journal" on this? hon. bessent: it is interesting to see you along with elon musk. but if i add -- sen. warren: you i know more shocked than i am. hon. bessent: if we want to take the full congressional budget scoring the i don't agree with their methodology. they predict a 2.4 trillion deficit. sen. warren: the answer to the question is yes. hon. bessent: no, but may i finish? include -- they have also scored

2.8 trillion in tariff income. so even in washington, dc, madam, in washington, dc, madam, that is a $400 billion surplus. sen. warren: let me make sure i understand. this bill you admit would increase the deficit by $2.4 trillion. but you think there will be another bill and another set of agreements that somehow materialized, have not materialized so far, don't have any statutory authority but that will make up the difference? so the answer to the original question: will this bill increase or decrease the deficit? i think you just said it will increase. this bill increases the deficit. hon. bessent: i want to use all the cbo scoring and you can't take one without the other. i don't agree. sen. warren: one is the law that we are going. if we don't have a tariff bill in front of us to score. mr. sippi ticket me on the second question. you have said that government spending is "out of control."

you have also called government spending "unsustainable." in fact, ending name of fiscal responsibilities that you are working with their republicans to pass the biggest cuts to medicaid and the affordable care act in american history. so mr. secretary, help me understand here. while the national national debt so very important that you are trying to kick 16 million people of their health insurance but increasing the national debt does not seem to matter if you are cutting taxes for billionaires and billionaire corporations? hon. bessent: well, first of all, a huge portion of this goes to family-owned businesses that are pass-through entities that are low that senator. and i'm sure you share my goals of mainstream prosperity. sen. warren: i'm glad to do tax cuts for people of modest needs. the question i'm asking is, why does the deficit that you would

not matter when we are talking about knocking 16 million people off of their healthcare but it doesn't matter if we are knocking people off their healthcare but not —-dash. hon. bessent: the figure is overstated. that is about -- sen. warren: so you think it is ok -- hon. bessent: it is -- first of all, let's set that straight. work requirements in california for 8 million of cbo's claim number again. we are creating economy. sen. warren: so it is clear, secretary bessent, that you don't want to answer the question. hon. bessent: what i want is for medicaid to be used for mothers and children as it was meant not for 1.4 million in illegal aliens. sen. warren: medicaid is not used for people who are not documented. mr. chairman, i want to say here, the part that troubles me the most is that the secretary is deeply worried about the deficit and is willing to knock

16 million or he says that nearly 11 million people off their healthcare. it matters so much. but it does matter so much if you are cutting taxes for billionaires. said i think that is wrong. sen. warren: we do have some -- hon. bessent: we do have some doses we do have some differences of opinion. i'm going to ask the remaining senators to stick with the five minutes, please. >> next guest senator smith. >> i will stay within my five minutes. >> thank you. >> i want to start by making an observation which is there seems to be an argument that somehow we can't give middle-class tax cuts without also giving big tax breaks to berliners. i want to be clear. i think i probably speak for everyone in markakis. the democrats want lower taxes for middle-class working class people. we just don't think the price

for that should be getting in this case the top .1% income earners $400,000 of tax breaks while we are taking health care, health insurance only from 16 million americans because of medicaid and because of the affordable care act changes and putting nutrition supports. i just want to be clear about that. the choice does not know tax breaks to the middle class americans because we are in support of that. but i want to ask you, secretary bessent, i want to follow up on the questions that senator warren was as he, one of the features is significantly. i would argue historic cuts to medicaid. you've no doubt know that medicaid is the largest health insurance payer in the united states. get us according to the american hospital association. it is the or just provider of mental health care coverage in this country. what percentage do you think is people on medicaid that can work to work? do you have any thoughts? do you know what that percentage

is. hon. bessent: work requirements and account for 8 million. they seem to think that 8 million people could come off. sen. smith: i will tell you. this is data from the kaiser family foundation. 92% of medicaid adults under age 65 are working already. and so what is happening here is the big beautiful bill is making it so much harder for people to get the healthcare that they deserve. natures gift of. but i want to ask you what impact this you think is going to have on the economy. you got health insurance that is taken away from 16 million americans. up my question to you is, what happens next? because the data shows that when people lose their health insurance, compensated care goes up, that is the issue with rural hospitals, medical debt goes up. people to lay care and they ration their medications. people get sicker. so this has a direct impact on

medical debt. you have an idea what the current medical debt is in the united states. hon. bessent: i do not but i will tell you that i believe that that number even giving is overstated by 5.1 million and it is simply the democrats expiration of subsidies and you should have seen that when you were in control. sen. smith: so i'm not going to argue with you about whether it is how many multiple millions of americans are going to lose their health insurance. hon. bessent: are like position in numbers. sen. smith: i will believe in the precisions of my numbers. but i can give you the precision of what the medical debt is. it is $220 billion. that is a, and according to the american hospital association. so let me ask you, do you -- how do you assess the impact of additional medical debt on american families, minnesota families? what impact do you think it has? it seems to be pretty significant. hon. bessent: we are trying to attend the curve on medical

costs and i believe that the medical expenses are out of control. we have seen -- sen. smith: but you are not controlling medical expenses by taking insurance away from people. you are just shifting the cost to hospitals and individuals and -- hon. bessent: we are trying to make sure that individuals who can't work due to we are trying to get the program back to the mothers and children it was meant for. sen. smith: signatry bessant, the question i want you to hone in on this, can you see that if we take insurance away from people that medical debt is going to go up and if that is bad for families and it is bad for our economy because people are going to be burdened with additional debt. hon. bessent: it will be good for the economy for people to come back into the workforce. sen. smith: but nearly everybody who can read who was on medicaie have seen, i have no doubt i would get in the way of

senator warren who i'm quite sure will want to talk about this as well because of the experience with georgia. you are not saving money. you are just shifting cost to other places by taking health insurance away from people. mr. chair, i will close here and give back my 16 seconds. >> thank you, senator smith. for the remaining senators, we are under a time pressure here and so i have asked all senators to please a stick which rigidly to their five minutes and next is senator lujan. >> thank you. i hope i hope you will help me stick to the five minutes. before i begin i just want to share with you and to the ranking member that i hope this committee will soon welcome secretary kennedy before the committee as well. there are many pressing questions especially from those of us come from states where there has been a measles outbreak. i hope we can work together to

get him here. second bessant, we've talked about the 333 plant a few times and this included if i remember correctly not just with our personal private conversations but also in the committee that it included reducing the deficit to 3% of the gross domestic product as well. secretary bessant, is a truth of bond rating was just downgraded? hon. bessent: one of the agencies did lower the u.s. bond? sen. lujan: so if you need it, i will give me the article. it is right here. the united states rating was downgraded. hon. bessent: the answer is yes and -- sen. lujan: i appreciate that. mr. secretary, if i may. hon. bessent: downgrades -- sen. lujan: can i get an extra minute? can we get that witness to work with us?

>> let's move quickly. sen. lujan: is it still your goal to reduce the deficit to 3% of the gdp? hon. bessent: as i something -- said, something that starts with 83. that would be a yes. sen. lujan: did the nonpartisan congressional budget report that the so-called big beautiful bill would add 2.4 trillion to the deficit? hon. bessent: the cbo did that. sen. lujan: we will get there. is adding $2.4 trillion to the deficit advance your goal of reducing the deficit to 3% of gdp? hon. bessent: i think that is a bold statement. i'm not going to answer it. sen. lujan: you disagree with the cbo score? hon. bessent: aggressively. sen. lujan: here is the score. hon. bessent: i'm not sure how you responded. sen. lujan: mr. secretary, a yes

or no, is it still your goal to reduce the deficit? hon. bessent: as i said, something that starts with a 3.2020. sen. smith: appreciate it. a the steals money from medicaid, almost 300 billion from the affordable care act. will that impact americans' healthcare benefits? hon. bessent: again, it does not give a yes or no answer. it does not lend itself to a yes or no answer. sen. lujan: the answer is yes. i can cite that as well. according to the congressional budget -- hon. bessent: then why ask if you had the answer? sen. lujan: mr. chair, can i get your help. the republican tax camp cuts $285.7 billion from the nutrition assistance program known as snap. yes or no, will those cuts make it easier for children, for children, veterans, seniors, folks with disabilities, parents and grandparents to put food on the table?

hon. bessent: again, that does not lend itself to a yes or no answer. you seem to have the answers. sen. lujan: the american people have told everyone here that is not a billionaire that the answer is no. i would invite you to come on down. hon. bessent: the american people told -- sen. lujan: they said this is not what they signed up for. he promised he would not go after medicare. he said to all of the folks over here that have a vote, keep your hands of the new additional food programs. you know the truth. the american people just want the truth. hon. bessent: we will get to have another referendum. sen. lujan: let me go on here. let me ask you about the tears since you brought that up as well. do you believe the terrorists are going to cover the cost of the big beautiful bill? hon. bessent: you seem to like cbo's goings.

it is 2.8 trillion of tariff impact. sen. lujan: this is not from cbo. is from a conservative think tank. they stay know. i think the american people deserve the truth. that is all that we are trying to get at here. i'm sorry to be so abrupt with this line of questioning here. let's just be honest with folks. people that are on medicaid, medicare beneficiaries, on food programs, let's just be honest with them so that they can make plans. the farmers and ranchers that had that pulled out from under them, be honest with them so that they can plan. there are all these small businesses. businesses. that is all we are asking. >> thank you. >> georges are worried about the economy. costs continue to skyrocket for families, markets are volatile, investors are dumping u.s. treasuries. the running bond market are flashing and gluteus just

downgraded our credit rating for the first time in over 100 years. what this administration's tariffs policies are largely responsible for the $30 trillion national debt is still the biggest long-term threat to our economy. last year, just last year we paid nearly $1 trillion in interests on the debt alone, more than the federal government spent on educating and feeding our children. secretary bessent, are you concerned about the trillions this republican tax bill will add to the debt. hon. bessent: i am concerned about the debt that we inherited and the senator i'm going to have to correct you, costs have not skyrocketed. we had the first decrease in inflation in april. the numbers this week were .1%. .1%. markets are up on the year in the u.s. tariff income is substantial and

the u.s. is the only major bond market where the yield -- the 10-year yield is lower now than it was in january 1st. not germany. sen. warnock: you don't agree that this is going to add trillions? that is your testimony. i'm looking at numbers from the right-leaning tax foundation where it says the bill will increase the debt by $1.7 trillion. that is the right-leaning tax foundation that says that. the conservative committee for responsible federal budget says that the cost is up to $5 trillion in the nonpartisan cbo which served as an inconvenient reality check for both parties. it says that the bill will cost $3 trillion. hon. bessent: it says 2.4 and it says it will be 2.8 trillion in tariff income. sen. warnock: so they all agreed that this is going to add trillions of dollars to the national debt. i think most democrats including

me support extending the 2,017 tax cuts for the middle class and for the working class. in fact, i think we should go further than this republican bill on the child tax credit. you talked earlier about children. i think we ought to -- we ought to take on child poverty in this country which we did when we passed the expanded child tax credit. we are just not willing to i'm certainly not willing to cut 16 million people, up to 60 million people off of healthcare and explode the debt and give tax breaks to millionaires and billionaires 71% of the people on medicaid in georgia our children. 71%. if we extended the tax cut for

those making, for everybody except those making over $40,000, we will not have to be kicking all these people off of healthcare. let me finish. we will not have to quit all of these people off of snap. we will not have to quit all of these people off of healthcare if we would extend the tax cuts for everybody except those making over $400,000 a year. now, that is what congress should do to and that is what it did when it was extending the bush tax cuts in 2012. it was a bipartisan deal, a reasonable. quit taxes for everybody except the wealthiest americans. secretary bessent, if republicans failed to pass their big ugly bill, would you be willing to work with congress on a plan b bipartisan tax bill, one that extends the trump tax

cuts for everybody but the wealthiest so that we don't have to kick 16 million people off of healthcare and take food from children? hon. bessent: i believe the bill will pass. i believe that everything you have talked about does not make small businesses one of the reasons we have seen in street north first is the lack of certainty because the propensity of small business owners make them $400,000 and the file viewed through the 1099 program. so they could be in the 800 to 1.5 village manager. i want to see small business there's not more government dependency. sen. warnock: i think kicking 16 million people off of healthcare is a drag on the economy. it is a drag on small businesses and i can quickly tell you that in georgia, where they are doing this work reporting requirements program to and that is what it is, it is reporting, and they are not incentivizing work. they are kicking people off of

healthcare but most of the costs are going towards the imitation of the program. we got pastor miller people in the healthcare coverage gap. they covered 7,000 people. i think that is pathetic. hon. bessent: i think -- sen. warnock: you -- hon. bessent: i think able party people should work. i think the benefits should go to americans and as you said, it is 75%. sen. warnock: the way to help is not to take their healthcare. thank you so much. chair crapo: i will remind all senators that we are under a time crunch and i'm asking all senators to stay to their five minutes. sera teri welsh. >> thank you, mr. secretary. is the position of the department of the treasury that the cost of these tariffs will not be borne by the consumers of this country? sen. warnock: it is the empirical evidence that they

have not been and we think that it is likely they do not have to be. >> so when walmart says it is raising prices to reflect the increased cost they have to pay for the product as a result of the tariff, you disagree with that? hon. bessent: i agree that walmart will do what is best for their customer and this is not an advertisement for amazon or home depot. have announced that the will not be raising prices. my family will be shopping there. sen. welch: so when i talk to a manufacture in vermont that has 300 employees and they are now paying more for you and aluminum components, the tell me with their margins that they will have to increase their price to the ultimate consumer, you disagree with that manufactured from vermont? hon. bessent: yeah, i agree with

-- or believe that the economy, is a diverse ecosystem and for the manufacture talking to in vermont that they could be price increases elsewhere and that i was at a rally in pittsburgh and there will be more steel jobs. sen. welch: that is a different issue. i'm talking about who is going to pay the price if there's a 50% increase in the tariff? hon. bessent: sara duke at the spark of the critics of the tariffs first we heard there's going to be a terrible recession and the economic numbers have been robust. and then we heard there's going to be great inflation and the inflation numbers overall are .1%. sen. welch: a question, i'm a manufacture or i'm a former. i'm paying 25% more for fertilizer. matt martin is tiny, three or 4%. and me as a former producer have

to pay more for my imports. you are telling me that i have to eat that cost and i am not going to be absolutely required for my own survival to increase the cost to reflect the tariff that i pay? hon. bessent: i'm happy to send you two articles admitting yesterday that he has been surprised by the lack of inflation in the system in the wall street journal article saying and this has been my position that the chinese business model is full of state subsidies. he did not care what they pay. it is the jobs program. so they will eat the tariffs. now, -- sen. welch: the farmer i'm talking about is buying fertilizer from canada, not from china. i'm hearing basically you are saying everything is going to be fine because the folks on whom the tariffs are imposed are going to eat that initial cost and not pass it onto the consumers.

hon. bessent: borseth fertilizer producer fertilizer producer in canada will eat it to sell to your farmer and i think -- sen. welch: we will see. we disagree on that. hon. bessent: thus far, the empirical data is with me. sen. welch: this is sort of pretty hopeful on your part. second thing, one of the things and from moderates who tell me from farmers to businesses is they need some sustainability and predictability. he went into his knee that predictability and sustainability is essential. hon. bessent: that is why i would encourage you to vote for the tax bill and give great stability and predictability for taxes. sen. welch: i will take that advice into consideration, as they say. but predictability, the trump tariff timelines, february 1, executive order, 10% on china. 25% on mexico and canada. three-day pass on 25% tariffs

from mexico and canada. february 10, 25% tariffs on steel and aluminum. march 4, an additional 10% on china. this goes on and on. 22 different tariffs. and it looks like the president makes up, and checks his mood, and changes the tariff ratio. and i've talked to manufactures where they have had products coming into a port and if they arrive on monday, they are cool. if they arrive on wednesday, it is going to cost them another $75,000. just in terms of implementation, 22 different tariffs over the course of a few months. this will be my last question. hon. bessent: i'm just saying, sincerity, it is called strategic uncertainty. it is also called negotiations. 13 days ago, on a friday,

president trump threaten the eu with 50% tariffs. the eu was not negotiating in good faith. within 10 hours, we had calls from five european leaders and a call with mercer vanderlinden. i call this a negotiating strategy and this is the way negotiating strategies work. sen. welch: it is pretty painful. thank you. chair crapo: i want to remain all senators we are under a strict timeframe. >> good to have you here today. i can't help but listen to my colleagues across the dice here. weeks at right in this very room during the biden administration and we were wondering about you can't be sharp and trillions of dollars in stimulus spending and paid for spreading into the economy without being inflationary. we called it right. they got it wrong.

and that same cpl week that got it wrong then is getting it wrong right now and is in this current battle we are facing this amazing bill that will stop the largest tax increase in american history and will make some of the largest cuts, through spending cuts, this runaway spreading in the federal government and secondary bessant i want to set the record straight on that and thank you for your leadership as we go through this very important process to get this bill on the president's desk. so thank you. i want to talk a bit in dialogue on the china negotiations you have been grateful for your leadership working through this tough negotiation right now with china. you have play a very active role in the ongoing trade negotiations. 42% of the world's economy is comprised by what happens in united states. so this is high-stakes. i recognize the need to hold

china accountable on the key agreements. i remember when senator now ambassador purdue and i were in beijing negotiating that phase one trade deal. thank you for working with china and holding them accountable to commitments made under president trump's first demonstration. safeguarding american ip, curbing force tech transfer to a sharing -- ensuring fair access to key priorities to ensuring we have more fair and balanced trade with china. i want to thank you for the recent de-escalation on tariffs as you reach the geneva consensus as well as the president's efforts to bring china to the negotiating table. i hope the negotiations will continue. secretary bessent, what do you see as the next steps right in the middle of this negotiation to secure a comprehensive deal

with china that puts u.s. farmers to u.s. manufacturers and consumers on a level playing field? hon. bessent: that is in my mind one of the most important economic questions of the next few years. will there be a continued decoupling between the world's two largest economies looks or is it possible to rebalance together? saturday, president trump would like the u.s. economy to rebalance manufacturing, bring down the trade deficit that the chinese continue to add manufacturing capacity. the other 30% of global capacity, up substantially since 2020 under the cover of covid they increased capacity and are under the midst of a substantial real estate downturn. and some would call it a crisis.

they have very low consumer spending. so they need to rebalance to mark consumer spending, address their domestic imbalances. they cannot do that on the workers of the rest of the world. if they are willing to be good partners in approach and negotiation where the u.s. brings back manufacturing precision manufacturing, high-paying jobs in the chinese are willing to open their economy to american products, then we could do that together. there are lot -- there's a lot of one to chop. sen. daines: when i was in meeting, i met with the vice minister. i met with the vice premier and then finished my time there. it was 48 hours. one of the issues that we brought up and president trump had asked me to push hard on this was, and the chinese stop the shipment of fentanyl

precursors into mexico as well as some into canada, even the united states? what are your thoughts? and what are you hearing right now from china in terms of their efforts to stop these precursors? the leading cause of death for 18 to 35-year-old americans today? hon. bessent: cedric, there's a 20% fentanyl tariff on china right now for the first time, that seems to have gotten their attention. what the senator from vermont would have called a flip-flopper, president trump cost negotiating leverage. and so for the first time at both the talks in geneva and the talks in london, they brought someone from the appropriate ministry to address this problem. and it is a real problem. and look at you and i both have a lot of experience in dealing with the chinese. you have more on there and experience. but we know, when they want

their system to do something, it responds. and i believe that if they want to address these precursors as they should, then we will see if we get a serious response. if they want to address it, they can fix it. guest: sc. sen. daines: thank you. chair crapo: 's extreme -- senator marshall. >> to think and one can argue that this will prevent the largest tax cut in american history. no one can argue that. i think beyond that, as is i look at this legislation between the tax savings and other provisions it will mean to thousand dollars a month of hard-working americans being able to keep in their pocket. you mentioned some numbers. when i add them up with a family that is making 50 kips hundred thousand dollars a year, will be able to keep a thousand dollars

a month more. can you add some background what you think it means that middle americans? hon. bessent: let's take the opposite —-dash what happens if he does not pass? it is the largest tax hike in history. it could mean a sudden stop in the economy and as always, working americans would get hit the hardest. they would lose their jobs. we would see a substantial uncertainty in both consumers and the business. what it does mean is that working families have a chance to cure this affordability crisis, this terrible affordability crisis that was brought upon them the past four years by this incredible inflation. so if we think about it, the affordability crisis is two pieces. the accumulated inflation and that is affordability, and the ongoing inflation. so thus far, the trump

administration, we are creating very benign inflation numbers. and interests of the incriminated affordability crisis, there are two ways to address that. we are trying to push down costs, whether it is fuel, healthcare, others. but the best way to address the affordability crisis is exactly what you said, the league higher real after tax incomes and that is what this bill does. hon. bessent: it. sen. marshall: and it seems like that is what is happening. hon. bessent: the april number points -- was outstanding, sir. sen. marshall: i am reminded of an old saying. i'm just disheartened by some of the intellectual dishonesty that i hear going on in this room. i don't think anyone can argue that this bill will prevent the largest tax hike in american history. we are going to quit close to $2 trillion.

we are going to secure the border. the child tax credit, again, taking in your situation it will actually lose child tax -- it will go from 2,000 to 1,000 and we increased -- now to 2500. republicans leading the charge to increase the child tax credit as well. go ahead. hon. bessent: and the important thing here, the child tax credit becomes permanent. sen. marshall: let's talk about the importance. i have ran businesses to yours much bigger than mine. yours are much bigger than mine. we are used to data coming in and out your advisors coming in and cbo's so many advisors. but we are used to taking all this information and based upon every thing out here we think this is what is best for this company in this case, this

country. and i look at this, the trump policy, it spells growth, growth in the economy, it grows like we have never seen before and i just want to give me a moment to talk about how important growth is and then we need to address the expanding in this country. there's no doubt we have a spending problem. the first thing we need is growth. we need to -- again, recent numbers, i think have been pretty good. how is this will go into impact the growth of the economy in this country? hon. bessent: i think the certainty of this will help small and large businesses. i think 100 percent experiencing is going to be very powerful as i'm out on the road companies are telling me that they are holding back on, backs because president trump did say in his address to congress there would be 100 percent experiencing. but they can't be 100 percent sure that this is going to pass.

nothing is 100 percent, especially -- i'm highly confident. and i think that we could see a x-uppercase-letter boom here. sen. marshall: thank you, mr. chairman. i yield back. chair crapo: thank you. thayer young. -- senator young. >> good to see you. i would like to dive in and start asking you about tariffs. wall street journal says today and it was somewhat critical editorial that they encourage a smarter trade strategy, a smarter trade strategy would be to work with allies as a united front to counter china's predatory trade practices. instead, the administration has used tariffs as an economic

scattergun against friends and foes. i will give you an opportunity to respond to this, mr. secretary. there are more than 140 countries that count china as their top trading partner. and china has a massive domestic market and create productive capacity and so they have a measure of leverage and discuss this dynamic that if we use tariffs but not as part of a larger strategy working with allies and partners that we could be doing market share from one another and china will continue to manipulate prices. they will make dependency on their economy hard to reverse and the alternative would be

maybe what the wall street journal proposes, which is we unify large economy, democratic countries, unify and collectively apply a lot of pressure vis-à-vis state capitalist countries, china in particular to bring them into a position of better behavior. a feel like discuss something to be said for the strategy that they encourage and the argument would further be, i will elaborate on it, if you don't adopt that sort of strategy, you just end up increasing input cost for many of our manufacturers in the near-term and behavior does not really change. what say you to this line of critique? hon. bessent: thank you for thank you for at this, senator. i think this is a multistep process. our allies have also taken advantage of us. i would say that the eu has been

very intractable in negotiations. i had a back-and-forth with the eu official who said, your tariffs are terrible. then why do you have a 10% card tariffs on us? when we look at these things, we have, many of our allies, including canada, who is about to enact a retroactive digital tariff, digital service tariff because we have the greatest and really the only outside of china internet companies in the world. so we will deal with our allies. my sister and i fight all the time, but we ironed it out than move forward. we will fire it out with our allies when we put up the tariff ball on china, i told her allies, especially the europeans and the canadians and the australians, this merchandise is

going somewhere. get ready for it. and unfortunately for them, i was right. we are using the oec data with china. and we will see if china can be a reliable partner. so i think it is a two-step. get the deals could get fair trade with our allies and then we can worry about china. sen. young: yes, that is exactly eight, and then you can worry about china. you just articulated what i think the will to journal is encouraging. that is frankly what i've been encouraging for a number of months, which is reset trade relations, used a substantial concessions that the president has commendably been able to get from our trading partners, major non-china trading partners. reset trade relations and then go after the big guy.

to use your analogy, when there's a bully outside to your sisters together and make sure they are with you as we work to make them in position. i hope we see more of that moving forward. it is good to know that that is the policy we are pursuing. hon. bessent: and i will say that i was with the president in his trip to the gulf states and the president of the united states travels and comes back with substantial investment commitment from saudi arabia, from uae, from qatar, when the chinese leader travels, and he has to give money out. so the chinese can only buy -- they buy friends. the americans have inbound investment. we want to make this the best location. sen. young: and we also want to make sure that as we ask for concessions from our friends that we don't alienate them. this is always a balance.

they will continue to come with bags of money and invest in the united states, knowing that it is not only financial incentives that drive them to invest in the u.s. and partner with us. i'm already a minute past my time. it is funny how this happens. thank you for indulging me, chairman. chair crapo: and you are in deep trouble. >> thank you, mr. chairman. mr. secretary, there's no doubt we have had this conversation. your fiscal policy is quite unconventional. and time will tell that history will tell whether you were right or wrong about it. let me ask you about this. you think the administration's tariff policy is an efficient way? hon. bessent: i think it has several features. is a sufficient revenue generator.

>> was your intent to impose those tears to counter the $2.4 trillion deficit that the reconciliation bill would impose. hon. bessent: i don't agree with that number. sen. masto: was your intent? hon. bessent: the intention and part of the intention with the tears has been to raise revenues. sen. masto: but as my colleagues are talking to you, you keep coming to visit with the 2.8 saying that. they are not related or they are related. hon. bessent: of your colleagues have a fixation on cbo. sen. masto: listen, i don't want to get into an argument with you. i'm just trying to understand what you are saying. so they are not related?

hon. bessent: they are coincident, not causal. sen. masto: that is all i needed. you think that tears are taxes? hon. bessent: no. sen. masto: and you keep talking about realizing tariffs to bring jobs back to this country. but i have not heard from the administration or from you what types of jobs in manufacturing are you looking to bring back? hon. bessent: i would like to bring in position high in manufacturing. sen. masto: what type? hon. bessent: it could be semiconductors. semiconductors. we want to bring back steel. i think what we have seen, senator, i think a good way to think about it. there are strategic industry is that we discovered during covid. sen. masto: such as -- hon. bessent: semiconductors, steel. sen. masto: you want to bring those jobs back here but

anything else? hon. bessent: sure that there's a whole array. sen. masto: could you give me a whole array? we should all be working together to focus on that. but i have not heard this administration identify the types of manufacturing. i will look forward to that. hon. bessent: i'm happy to send you that. sen. masto: let me ask you this. hon. bessent: this is not the soviet union. we don't have a list of what is going to happen. sen. masto: but you are talking about moving into the 21st century. i think these should be high-value jobs and i think there should be a strategy around it. any business needs that, right, including government. : . in a letter to investors that you sent in january 2024, you said that he wrote that tariffs are inflationary and will strengthen the dollar. hardly a good starting points mac for the u.s. industrial renaissance. do you still agree with that.

hon. bessent: no cat that has been completely wrong. sen. masto: ok. there's been a lot of talk about small businesses and whether they are being impacted or not. if you would like to know the true impact, i welcome you to come to nevada and see the small businesses. they are being impacted. there is uncertainty and kiosk. the a concern whether they can keep their doors open for not. i have heard from the trade ambassador that this admission has made the decision to look at short-term paying for long-term gain quoted by the administration. and i don't think my small businesses are going to be around for that long because their doors are going to shudder. so what do i tell them as they are being squeezed by the tariffs because high cost are impacting them, the fact that they can't keep their doors open and the fact that this

demonstration is not looking out for small businesses across the country? what do i tell them? hon. bessent: i would disagree with the idea that we are not looking out after small businesses and small business optimism just hit a new record. sen. masto: it is not helping them to say the secretary said that this policy is out there and you should be optimistic. hon. bessent: this is my wish with you cavorting for the tax bill. sen. masto: the tax bill will give them tax certainty and the tariffs do not give them tax certainty because of the tears are going tears are going to continue and that is the problem. if they cannot afford the goods for their products, if they cannot afford to keep their doors open this reconciliation bill that you are pushing through has nothing to do with the fact that they still have to pay for those goods. i know i've gone over my time. thank you, mr. chairman. chair crapo: thank you, and i have to insert here that if we don't pass this tax bill and

extend it, those small businesses fire tax rates are going to go up massively. sen. masto: i understand that, mr. chairman, but we have to recognize that they are going to lose access to their health care. chair crapo: we will argue on that one. senator sanders. >> thanks. help me out here. my understanding is the trump administration has i think 13 billionaires in office right now meeting government agencies. is that about right? hon. bessent: i have no idea, the senators. sen. sanders: do you think it is a coincidence given the large number of pillars that this particular piece of legislation provide $235 billion in tax breaks to the top two tenths of 1% by expanding the exemptions in the state tax? hon. bessent: senator, i will tell you when the job acts passed, my tax rate went up.

sen. sanders: i don't know your exact situation but how many people do you think or in the top two tenths of 1%? hon. bessent: sorry? sen. sanders: top 10 people who would benefit from this particular $235 billion tax break? hon. bessent: the top, under the top 10% is now paying seven -- sen. sanders: that is not the question. my question is, why do you think at a time of unprecedented income and wealth inequality when people like yourself economically have never ever had it so good, why do you think it is a good idea to cut medicaid for low-income and working-class people by $700 million to give $235 billion in tax breaks the very, very, very richest people in this country, perhaps a few hundred families? please justify that. hon. bessent: i don't know, but

the democrats had a trifecta and there is no tax increase. sen. sanders: i'm not talking about -- i'm not talking about a wealth tax. explain to a few hundred of the wealthiest families in this country, $235 billion tax break. explain to the american people why you think that is a great idea. hon. bessent: i think that this bill would increase small businesses substantially. most small businesses pay -- sen. sanders: come on, you are smarter than that. this is the top two tenths of 1%. this is not a mom and pop store. resort multibillionaires, and that savings go to their kids after they pass away. this is nothing more than a gift to billionaires in this country. hon. bessent: that is just not correct. the top 10% pay a bigger share of taxes. sen. sanders: i'm talking about one provision. i don't want to argue with you

on taxes in general. you can't justify that because morally, it is totally unjustifiable. i will ask another question. if you guys want to cut a trillion dollars in medicaid and the affordable care act, the estimate from cbo i believe is over 50 million people lose their health insurance. at yale university, university up -- pennsylvania estimated that when you throw those people off of healthcare, some 50,000 people a year will die. tell me what you think it is a good idea to give tax breaks to billionaires and allow 50,000 low income people to die unnecessarily? hon. bessent: that is overstated by 5.1 billion, that is not attributed to this bill. sen. sanders: it is a combination, that is true.

hon. bessent: you had the obama care subsidies and he did not extent that when you were in charge. 1.4 million illegal aliens on medicaid. and there are work requirements and our goal is to get more money to children. sen. sanders: your goal is to give more money to children and working people? really? come on. do you know how many people and i was surprised to hear this. how many people lose their jobs every year get fired or whatever? hon. bessent: to discuss something called the quit rate. when the job market is strong because more people quit. sen. sanders: i just research centers. i was surprised. 12 million people leave their jobs a year. so some guy leaves a job. maybe the move. maybe something happened in their life. there's a lot of transition in

the labor market. hon. bessent: maybe to get a better job. sen. sanders: maybe they do, or maybe they have to stay home. whatever, we don't know. 20 million people lose their jobs in any given year, leave their jobs in a given year. are those people lazy? what happens when i leave my job and i have to move to another state to take care of my ill mother and i desperately need medicare? am i too lazy to get medicaid? hon. bessent: i think there is a mischaracterization of the work requirement. sen. sanders: i'm not quite so sure it is. thank you very much, mr. chair. chair crapo: thank you, senator. i've been trying to keep everyone right at five minutes. i was supposed to get to the floor. that is why i was brushing everybody. that is not going to happen. i will just take another minute or two with you. mr. best in, before we wrap up. you have received a lot of

questions today about the $2.4 trillion score of the cpl. and you have explained very well that the president has raised a number of dollars in tariff revenue and we need to be looking at the combined activity in my opinion of what the president and the congress are doing together including this one big deal as well as many other actions of the president in congress. hon. bessent: and to show that i also interrupt republicans, it is that the cbo i am not attacking the people who work at the cbo. i am attacking their methodology and it is completely ideological. it assumes based on growth, 1.7 or 1.87 for the economy, if the tax bill what to expect that we would have the biggest tax increase in history. the belief we are going to go 1.8%. i think we could see, there is a chance that we could see

something maybe even approaching double-digit. i don't think it would be that severe. on the other side, when we get permits to this bill, when we reiterate and reinstate the expensing, we get no credit for the acceleration that we are going to see. that is why i reject the cbo scoring that the 2.8 trillion in tariff revenue is as i told the center coincidence. chair crapo: thank you. you anticipated my question. i'm going to elaborate a little bit more. the final characterization here. the cbo does not use dynamic scoring, at least not very well. and as you indicated, in the cbo score that shows $2.4 trillion deficit, it assumes that the economy is not impacted by the

bill, that the bill -- i'm reading from a ce eight report. i think you might be familiar with this report. but i'm reading from the cea's analysis of this. the cbo's economic projection assumes real gdp growth will average 1.8% over the next 10 years. assuming an average growth rate of 3% however which is what is at the predicted to be with regard to what the impact of this bill will be, it implies a $4.1 trillion additional revenue to be collected over that 10-year period. so i guess my question is, if we were to look down and up -- dynamically rather than statically and start with the cbo score that is a static score and thenations on privacy and

national security, the senate judiciary committee hearing is an hour and 40 minutes.