US Treasury Secretary Bessent urges quick extension of Trump’s tax cuts

Investing.com -- US Treasury Secretary, Scott Bessent, has encouraged Congress to act swiftly on prolonging Trump’s tax cuts, cautioning that any delay could lead to a potential surge in tax rates. Bessent expressed his concerns during an event hosted by the Economic Club of New York.

The Secretary also revealed that the administration is contemplating a plan that would enable immediate expensing of investments in factories that offer well-paid jobs for American workers.

Bessent dismissed the notion that President Donald Trump’s increased tariffs would spark a new wave of inflation. He suggested that the Federal Reserve should perceive them as having a one-time impact. “I would hope that the failed ‘Team Transitory’ could get back together and think that nothing is more transitory than tariffs if it’s a one-time price adjustment,” Bessent stated at the Economic Club of New York.

Bessent’s comments included a focus on the 10-year Treasury yield and actions the administration can take to reduce it. He also emphasized that the US doesn’t have a revenue problem, but a spending one. He further stated that the administration is considering full expensing of factory investments.

The Treasury Secretary also pointed out that a significant part of the affordability crisis is due to high energy prices. He stressed that the longer the delay in extending tax cuts, the higher the likelihood that taxes will increase.

Bessent noted that the income from new tariffs will not be scored for legislative purposes, but it will be substantial. He suggested that tariff policy can finance income tax cuts and income gains for the bottom 50% of wage earners. According to Bessent, President Trump believes tariffs are a good source of revenues, protect US workers, and create negotiating leverage.

The Secretary concluded by stating the administration is taking debt reduction seriously, calling it their last chance to get this done. He also mentioned the need to get regulated banks lending again, describing private credit as ’exciting’.

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