The US Senate confirmed Scott Bessent as Secretary of the Treasury on Monday, giving the billionaire hedge fund manager a central role in the new administration’s ambitions to cut taxes and spending and manage economic relations with allies and adversaries.
As the 79th Secretary, he will have influence over the country’s tax collection and its $28 trillion debt market, with enormous influence over fiscal policy, financial regulations, international sanctions and foreign investment.
He was voted for by 68 senators, 29 against, and the nomination was supported by 16 Democrats. Bessent, who is 62 years old, is already an advocate of Trump’s economic agenda, which focuses on tax cuts and imposing high tariffs that Democrats. Some economists argue that it could undo some of the progress the Federal Reserve has made in controlling inflation.
At the confirmation hearing, Bessent warned that failure to renew $4 trillion in tax cuts expiring later this year would be bad news for middle-class Americans, and said tariffs would help fight unfair trade practices, boost revenue and strengthen the United States’ influence in international negotiations.
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He also rejected the idea that Trump’s policies would be inflationary and said the administration’s intention to increase oil production would actually help lower prices. As Trump’s top economic official, Bessent will have many problems, the biggest of which will be managing federal cash flow after the government reached the legal debt limit on the second day of Trump’s term.
Even before he was sworn in, the Treasury Department used emergency measures to avoid breaching the limit and causing a catastrophic default. He will also have to deal with the possibility of rising budget deficits and additional national debt estimated to be in the trillions of dollars if tax cut extensions and other promised tax breaks cannot be offset by increased revenue or spending cuts.
Concerns about rising budget deficits and rising inflation in recent weeks have pushed up yields on long-term bonds as investors seek higher compensation for risk. This has pushed the average rate on 30-year fixed-rate mortgages to over 7%, a pain point for Americans looking to buy real estate.
He supported Trump’s promise not to touch the Social Security retirement program and the Medicare health insurance plan for seniors, among the largest items in the state budget, along with interest expenses, set at market rates that the Treasury does not control.
Born and raised in South Carolina, Bessent says he still listens to farm radio. He graduated with a degree in political science from Yale University, and spent his career in finance, working for investors George Soros and Jim Chanos, and running his own firm Key Square. Bessent is the fifth most important official in the US, and at the same time also the highest openly gay official in history. He is married and has two children.
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Source: Glas Amerike, Foto: Reuters