Hearings to examine the expected nomination of Scott Bessent, of South Carolina, to be Secretary of the Treasury

Treasury and HHS ConfirmationsSenate Finance · January 16, 2025 · 119th Congress
The Senate Finance Committee convened this hearing on January 16, 2025 to consider President-elect Trump's nomination of Scott Bessent, a hedge fund manager and investor, to serve as Secretary of the Treasury. Begins at ▶ 0:20:56
Transcript
Highlights

Title

Confirmation hearing for Scott Bessent as Treasury Secretary

Purpose

The Senate Finance Committee convened this hearing on January 16, 2025 to consider President-elect Trump's nomination of Scott Bessent, a hedge fund manager and investor, to serve as Secretary of the Treasury. Members questioned Bessent on extending the 2017 Tax Cuts and Jobs Act, tariff policy, the federal deficit, Federal Reserve independence, sanctions on Russia and Iran, and his personal tax arrangements. Begins at▶ 0:20:56

Who spoke

• Chair Mike Crapo (R-ID)▶ 0:20:56: Welcomed new members and Bessent, argued the TCJA's expiration would be a $4 trillion-plus tax increase with $2.6 trillion falling on households under $400,000▶ 0:50:48; closed by endorsing the nomination▶ 3:34:14.

• Sen. Ron Wyden (D-OR), Ranking Member▶ 0:25:57: Warned Trump's agenda centers on extending 2017 tax law at over $4 trillion cost while cutting Medicaid and other programs▶ 0:27:13; pressed Bessent on his Medicare tax avoidance strategy and Treasury's litigation against it▶ 0:29:36; sought commitment to keep Direct File operating▶ 0:55:32; challenged Bessent on who pays tariffs▶ 0:57:01 and on funding IRS enforcement against wealthy tax cheats▶ 3:27:02.

• Sen. Lindsey Graham (R-SC)▶ 0:34:41: Introduced Bessent as a fellow South Carolinian, described his rise from Little River to Yale, and argued qualified nominees deserve confirmation regardless of policy disagreement▶ 0:36:49.

• Scott Bessent, Treasury Secretary nominee▶ 0:42:08: Answered the committee's four standard nominee questions▶ 0:42:08; in his opening statement called extending the TCJA "pass-fail" for the economy▶ 0:47:30; testified the U.S. has a spending problem, not a revenue problem, citing ~17% GDP revenue historically▶ 1:04:58; committed to keeping Direct File operative this tax season▶ 0:56:08; said Social Security and Medicare "will not be touched"▶ 1:25:17; disputed a "clean energy race" with China, citing 100 new coal plants planned▶ 1:01:09; said FOMC monetary policy decisions should be independent▶ 1:55:09; disclosed a Treasury Department position that his own Medicare-tax arrangement was under litigation and pledged to escrow disputed amounts if confirmed▶ 3:25:27; described being blocked from the Naval Academy and Foreign Service earlier in life due to his sexual orientation▶ 2:40:59.

• Sen. Chuck Grassley (R-IA)▶ 1:02:27: Argued high tax rates historically fail to raise proportionally more revenue and asked Bessent to affirm a spending, not revenue, problem▶ 1:04:14; sought commitment to fully use the IRS whistleblower program he authored in 2006▶ 1:06:57.

• Sen. John Cornyn (R-TX)▶ 1:07:40: Raised concerns about a London Clearing House proposal to clear U.S. Treasury futures and possible Bank of England control in a default scenario▶ 1:09:35; asked about requiring transparency for U.S. investment in China, citing $2.3 trillion in Chinese company investments as of 2020▶ 1:11:38.

• Sen. Michael Bennet (D-CO)▶ 1:14:14: Said 50% of TCJA benefits went to the top 5% of earners and argued a further $4.6 trillion in tax cuts is unjustified without addressing needs like schools and defense▶ 1:15:25; pressed Bessent on discretionary spending representing only about a third of the budget▶ 1:17:26.

• Sen. John Cassidy (R-LA)▶ 1:20:59: Discussed a "foreign pollution fee" tariff on carbon-intensive Chinese imports▶ 1:21:52; described a bipartisan proposal for a Social Security-adjacent pension investment fund to offset a projected 25% benefit cut in eight years▶ 1:23:55.

• Sen. Mark Warner (D-VA)▶ 1:27:08: Discussed the CDFI Fund and bipartisan work on capital access for underserved communities▶ 1:29:30; pressed for stronger sanctions on Russia over Ukraine, particularly oil majors▶ 1:31:06.

• Sen. James Lankford (R-OK)▶ 1:34:04: Cited the top 15% of earners now paying 98% of taxes post-TCJA▶ 1:34:04; criticized the OECD's "Pillar Two" global tax deal as bypassing Congress and hurting American companies▶ 1:35:59; asked about stable bonus depreciation rates for businesses▶ 1:37:51.

• Sen. Maggie Hassan (D-NH)▶ 1:39:33: Pushed Bessent to commit to restoring the full immediate R&D tax deduction▶ 1:41:15; pressed repeatedly on whether he'd advise against Trump policies that raise prices, calling his non-answer a "double standard"▶ 1:44:44.

• Sen. Steve Daines (R-MT)▶ 1:44:57: Argued permanency of tax rates drives certainty, investment, and hiring, citing a post-election jump in small-business optimism▶ 1:48:25; noted 63% of private-sector jobs come from pass-through entities facing expiration▶ 1:50:08.

• Sen. Catherine Cortez Masto (D-NV)▶ 1:50:53: Asked Bessent to commit to opposing removal of enhanced ACA premium tax credits benefiting 80,000 Nevadans▶ 1:51:25; pressed on preserving the 45X manufacturing tax credit for critical minerals▶ 1:53:00; got Bessent's agreement that the Federal Reserve's FOMC should remain independent▶ 1:54:23.

• Sen. Todd Young (R-IN)▶ 1:56:25: Asked for a commitment to impartial CFIUS review if Nippon Steel's U.S. Steel bid reappears▶ 1:57:42; questioned Bessent on tariff strategy and support for farmers▶ 1:59:38.

• Sen. Bernie Sanders (I-VT)▶ 2:03:46: Cited Musk, Bezos, and Zuckerberg's combined wealth exceeding that of the bottom 50% of Americans and asked if Bessent agreed the U.S. is becoming an oligarchy▶ 2:04:59; pressed on raising the $7.25 federal minimum wage▶ 2:07:46 and capping credit card interest rates at 10% as Trump proposed▶ 2:08:15.

• Sen. Tina Smith (D-MN)▶ 2:09:38: Argued the TCJA gave the top 1% a tax cut 852 times larger than the lowest earners'▶ 2:10:48; challenged Bessent on private-equity consolidation in rural hospitals and health care costs▶ 2:13:46.

• Sen. Ron Johnson (R-WI)▶ 2:15:54: Argued TCJA actually generated $1.7 trillion more revenue than CBO projected▶ 2:16:23; proposed resetting spending to pre-pandemic, inflation-adjusted baselines of $5.5–$6 trillion▶ 2:19:31.

• Sen. Maria Cantwell (D-WA)▶ 2:21:11: Pressed on tariffs' effect on Washington's aviation export surplus and supply chains, urging focus on innovation over tariffs▶ 2:23:04; Bessent responded citing labor's declining share of income since the "China shock"▶ 2:24:28.

• Sen. Ben Ray Luján (D-NM)▶ 2:27:21: Sought yes/no commitments on continuing the counter-fentanyl strikeforce▶ 2:27:47, not cutting Medicaid▶ 2:30:03, broadband funding▶ 2:30:53, and Head Start▶ 2:31:54, receiving noncommittal answers on several.

• Sen. John Barrasso (R-WY)▶ 2:33:01: Discussed Wyoming's role as an energy producer and asked about Treasury's role in "energy dominance"▶ 2:35:07; Bessent cited Iran's oil exports rising to 1.7 million barrels under Biden-era sanctions enforcement▶ 2:36:19.

• Sen. Thom Tillis (R-NC)▶ 2:39:01: Asked Bessent to address his lack of government service, prompting Bessent's account of being barred from the Naval Academy and Foreign Service▶ 2:39:41; presented a JCT chart showing 93 million people would see higher taxes if TCJA expires▶ 2:42:49.

• Sen. Raphael Warnock (D-GA)▶ 2:44:35: Cited a Tax Policy Center report showing the top 1% would get roughly a quarter of TCJA extension benefits▶ 2:45:15; repeatedly asked if there was any income level at which Bessent would support letting tax cuts lapse, to which Bessent said no▶ 2:49:25.

• Sen. Marsha Blackburn (R-TN)▶ 2:50:40: Raised concerns about a Biden-era central bank digital currency (CBDC) initiative, which Bessent said he opposed▶ 2:53:33; asked about Treasury cybersecurity after a December breach tied to a Chinese state actor and about 2,800 IRS employees having had TikTok on government devices▶ 2:56:02.

• Sen. Peter Welch (D-VT)▶ 2:57:13: Described a Vermont electrician facing a $700/month health-premium increase if enhanced ACA credits expire▶ 2:58:57; raised concerns about Canada tariffs' impact on Vermont exporters▶ 3:00:43 and high U.S. credit card processing fees for small businesses▶ 3:01:45.

• Sen. Roger Marshall (R-KS)▶ 3:02:33: Asked about supporting rural community banks▶ 3:03:31 and preserving the 45Z clean fuel production tax credit while excluding Chinese feedstock producers▶ 3:05:49.

• Sen. Elizabeth Warren (D-MA)▶ 3:08:34: Pressed Bessent on whether he agreed with Trump that the debt limit should be repealed, which he affirmed he'd support if Trump pursued it▶ 3:09:00; cited Moody's estimate that a debt-limit breach would cost the economy $12 trillion and 6 million jobs▶ 3:11:13.

• Sen. Tim Scott (R-SC), Banking Committee Chair▶ 3:14:39: Asked about banking-sector stability and over-regulation benefiting shadow banking over community banks▶ 3:15:57; touted Opportunity Zones, citing $84 billion invested with under 5% gentrification▶ 3:17:44.

• Sen. Sheldon Whitehouse (D-RI)▶ 3:20:18: Warned of a looming insurance-market/property-value crisis from climate change, citing a Freddie Mac economist's 2008-style recession comparison▶ 3:20:50; directly raised Bessent's near-$1 million in avoided Medicare taxes and the ongoing IRS litigation against that structure, prompting Bessent's escrow pledge▶ 3:23:47.

Key moments

• Bessent testified that failing to extend the TCJA would trigger a "sudden stop" and gigantic middle-class tax increase, calling it "the single most important economic issue of the day" and "pass-fail"▶ 0:52:09▶ 0:52:29.

• Wyden and Bessent sparred over who pays tariffs: Bessent argued currency appreciation and elasticities offset most pass-through to consumers, while Wyden called that "academic" and said tariffs "clobber people of modest means"▶ 0:58:04▶ 0:58:54.

• Wyden accused Bessent of using a "tricky legal maneuver" to opt out of Medicare taxes even as the Treasury Department litigates against that exact position▶ 0:29:36; Whitehouse later confirmed the IRS disputes the arrangement, and Bessent pledged to escrow the disputed amount and shutter his firm if confirmed▶ 3:25:27.

• Sen. Sanders asked directly whether concentrated wealth (Musk, Bezos, Zuckerberg holding more than the bottom 170 million Americans) constitutes oligarchy, echoing Biden's warning the prior night; Bessent declined to answer directly, instead noting Biden gave Presidential Medals of Freedom to people who might also "qualify as oligarchs"▶ 2:04:13▶ 2:06:44.

• Sen. Warnock asked repeatedly whether any income level—$1 million, $10 million, $1 billion—should lose TCJA tax cuts; Bessent said "there's no income level" he'd exclude from continuing the cuts▶ 2:49:06▶ 2:49:31.

• Bessent said Iran's oil exports rose from about 100,000 to roughly 1.7 million barrels per day since Trump left office, and pledged to be "100% on board" with raising sanctions on Russian oil majors if Trump requests it▶ 2:36:19▶ 1:33:00.

• Cortez Masto and Lankford both got Bessent to affirm the Federal Reserve's FOMC should remain independent from presidential influence [1:55:17, 0:54:52 as context].

• Sen. Johnson presented data claiming TCJA generated $1.7 trillion more revenue than CBO projected over seven years, using it to argue CBO scores should be taken "with a real grain of salt"▶ 2:16:23.

• Bessent disclosed opposing current Treasury telework policy, saying he would require in-office attendance daily "as a matter of national security," following a December cyberattack via a work-from-home software vulnerability▶ 1:55:38▶ 2:56:27.

• Sen. Cortez Masto and Sen. Welch both pressed on the expiring enhanced ACA premium tax credits — Cortez Masto citing 80,000 affected Nevadans and Welch citing a $700/month hit to a Vermont electrician — with Bessent repeatedly saying he would "get back to" them▶ 1:51:25▶ 2:58:57.

• Bessent stated Chinese purchase commitments from the Phase One trade deal were never enforced by the Biden administration and said he would begin pushing for enforcement "next week" if confirmed▶ 2:00:54.

Metadata

CommitteeSenate Finance
Chamber / CongressSenate · 119th Congress
DateJanuary 16, 2025
TypeMeeting
Witnesses
(none listed in event metadata)
Videosenate-isvp
Transcript577 caption blocks · 26,038 words · 3:35:45 runtime
EventCongress.gov 336521