On Nov. 22 President-elect Donald Trump nominated Scott Bessent, founder of hedge fund Key Square Capital Management and former chief investment officer for Soros Fund Management, to be Treasury secretary. While the role is always one of the most important cabinet positions, it could be a particularly vital cabinet position in the second Trump administration as the president-elect promises the most aggressive U.S. trade policy in decades alongside running on lowering prices and major new tax breaks.
If confirmed, Bessent will be expected to assuage markets and the broader financial world of potential disruption from increased tariffs and trade retaliation from Trump’s promised actions while bringing his own ambitions to the role. Bessent has stated an aim for a “3-3-3” plan: 3% annual economic growth, increase domestic oil production by 3 million barrels per day, and decrease the federal deficit to 3% of gross domestic product (it was 6.3% in FY23, according to the Congressional Budget Office).
In a Nov. 25 interview with the Wall Street Journal, Bessent said that delivering on Trump’s various campaign tax cut pledges (permanence of the Tax Cuts and Jobs Act, eliminating taxes on tips, Social Security payments, and overtime pay) would be his priority, and said that offsets to lower the cost to the federal government would be important. He mentioned changes to the electric vehicle tax credit and other parts of the Inflation Reduction Act, which includes hundreds of billions of tax incentives for energy projects, as well as freezing non-defense discretionary spending.
Bessent told the Journal that enacting tariffs and cutting spending would also be among his focuses. This could be a sharpening of his stance since comments he made in June calling tariffs a negotiating tool. In the interview, which did not feature new direct quotes, Bessent appears to build on remarks he made in an October speech calling for tariffs to pre-emptively be placed on countries in order to force them to lower trade barriers, likening trade duties to Treasury’s sanctions powers. While the Treasury secretary often serves as a key economic policy advisor to the president, on a number of economic policies, the Commerce secretary and U.S. Trade Representative hold legally important roles, with direct lines to the president, on trade matters. Howard Lutnick, another candidate for Treasury and vocal proponent for tariffs, was recently nominated to lead the Department of Commerce. President-elect Trump has yet to nominate his U.S. Trade Representative, though he could bring back Robert Lighthizer, the USTR from his first term, another strong supporter of tariffs.
Bessent’s confirmation would notably make him the first openly gay Treasury secretary. While he has a business past with a major Democratic political donor, early indications appear to be that he will not face some of the headwinds blowing against other Trump cabinet picks. In a statement, Senate Finance Committee Chair Mike Crapo, R-Idaho, the likely chair of the committee responsible for confirming the Treasury secretary, said, “Scott Bessent’s extensive private sector experience and market knowledge make him well-positioned for the task, and I look forward to swiftly considering his nomination so that we can begin the important work before us.”
Who leads the IRS — which operates independently but technically exists within the Treasury Department — also remains to be seen. IRS Commissioner Danny Werfel told Bloomberg Tax in September that he intends to serve out his full five-year term, which began in March 2023, and would take him to November 2027. Incoming administrations have typically allowed IRS commissioners to serve out their terms, but Werfel’s term would take up much of Trump’s second term at a time when the IRS is pursuing increased enforcement and free-filing initiatives that are unpopular with Republicans.
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