Scott Bessent, President Donald J. Trump's pick as Treasury secretary, will face questions from lawmakers Thursday about how he would lead a department at the heart of the Trump administration's tax, trade and sanctions policies , along with dealing with the country's debt burden. .
Mr. Bessent, a billionaire hedge fund manager with deep experience in financial markets, has met with Senate Republicans and Democrats in recent weeks and is expected to have a relatively smooth confirmation process.
Mr. Bessent, a former top investor of liberal philanthropist George Soros, has given large sums to Democrats and Republicans over the years.
“I firmly believe that, if confirmed, and with your advice and support, we can usher in a new, more balanced era of prosperity that will uplift all Americans and rebuild communities and families across the country,” Mr. Bessent will say. according to a copy of his prepared remarks reviewed by The New York Times.
But several of the lawmakers he will appear before during his confirmation hearing Thursday disagree with him on economic policy. Democrats on the Senate Finance Committee are expected to press Mr. Bessent on Mr. Trump's plans to implement universal tariffs, possibly ease sanctions on Russia, establish a strategic Bitcoin reserve and lower taxes for the rich.
“Bessent spent his life helping the rich get richer,” Senator Elizabeth Warren, a Massachusetts Democrat who met him recently, said in an interview. Ms Warren, who sits on the finance committee, also described him as “smart and thoughtful”.
Here's what you can see during the hearing.
Trump's tax cuts
The Treasury Department will be critical to Mr. Trump's plans to rewrite the tax code and extend the 2017 tax cuts that Republicans passed and Mr. Trump signed into law.
Mr Bessent will warn in his remarks that not extending the tax cuts would mean “the largest tax increase in history”.
Expanding that law is expected to cost $4 trillion over the next decade. Mr. Trump has proposed other tax cuts — including eliminating taxes on tips, overtime and Social Security benefits — that will likely be paid for with borrowed money. As the person in charge of the department that issues and sells government debt to investors, Mr. Bessent would have to figure out how to get investors to buy more government bonds when the national debt already exceeds $36 trillion.
In fiscal year 2024, the federal budget deficit was $1.8 trillion, or 6.4 percent of gross domestic product. Mr Bessent has said he wants to reduce that to 3 percent of GDP by 2028, but it is unclear how the new government will achieve that.
At an event last year hosted by the Manhattan Institute, a right-wing think tank, Mr. Bessent said the cost of extending the 2017 tax cuts should be covered by other cuts, such as eliminating provisions of the Inflation Reduction Act. He also proposed freezing “discretionary” non-defense spending and shifting some Medicaid spending to states.
A rate test
When Trump was looking for a Treasury secretary, it was important for him to find someone who would defend tariffs.
The president-elect wants to impose general import tariffs and strict import duties on goods from China. As finance minister, Mr. Bessent would raise the prospect of tariffs in economic talks with his Chinese counterparts as he sought to calm markets and soften the impact of a trade war that could slow the global economy.
While Democrats also support tariffs as a way to protect American jobs and industries, Trump's plans go much further. The president has said he will use tariffs to force concessions, such as curbing illegal border crossings from Mexico and acquiring Greenland.
Mr Bessent has said it would be sensible for any tariffs to be introduced in phases so that any associated “price adjustments” could be gradually absorbed by the economy.
A blessing for Bitcoin
One of the biggest changes the Trump administration could usher in is the full embrace of cryptocurrencies. While Mr. Trump was skeptical of cryptocurrencies during his first term, he became an advocate of digital assets like Bitcoin during his presidential campaign as the technology became a major source of donations.
Cryptocurrency lobbyists are pushing the new Trump administration to ease regulations on the sector, and Mr. Trump has considered creating a “strategic reserve” of Bitcoin, similar to federal stockpiles of gold and oil.
As Minister of Finance, Mr Bessent would be responsible for ensuring that cryptocurrencies no longer become a magnet for fraud, money laundering and sanctions evasion.
Mr. Bessent's recently released financial disclosure revealed as much as $500,000 in a Bitcoin investment fund. If confirmed, Mr Bessent said he would divest that investment.
Questions about the sanctions against Russia
Most of the new treasury secretaries have little experience in national security and, as administrators of the country's sanctions program, need to get up to speed quickly.
That includes Mr. Bessent, who will oversee a sanctions program that has expanded rapidly in recent years as the United States has increasingly relied on financial warfare rather than direct military conflict.
Mr. Bessent will say in his remarks that the nation must “apply sanctions carefully as part of a whole-of-government approach.”
Mr. Trump said last year that he worried that an overuse of sanctions could lead to the demise of the dollar as the world's reserve currency. The excessive use of sanctions, he said, could lead other countries to turn to other currencies, such as the Chinese renminbi, so they can make transactions beyond the reach of the United States.
Mr. Bessent is likely to face questions from Democrats and Republicans about the series of sanctions the Biden administration has imposed on Russia as punishment for its invasion of Ukraine. President Biden has expanded those sanctions in recent days as his administration tries to create a bulwark against Mr. Trump, who has a more friendly relationship with President Vladimir V. Putin of Russia.
Mr. Trump has suggested he prefers tariffs to sanctions, and lawmakers are likely to press Mr. Bessent on whether he would encourage the president-elect to maintain existing sanctions.
Bessent's business background
Democrats will also question Mr. Bessent's own tax practices. Democratic Finance Committee staffers reviewed Mr. Bessent's tax returns for three years as part of the vetting process.
In a memo seen by The Times, staffers wrote that Mr. Bessent had collected income from his hedge fund in a way that allowed him to avoid paying more than $900,000 in payroll taxes.
The IRS, an agency of the Treasury Department, has tried in recent years to curb the ability of hedge fund managers to avoid payroll taxes, as Mr. Bessent did. The Democratic staffers wrote in the memo that “Mr. Bessent’s position conflicts with the position of the department he hopes to lead.”
The memo, a preview of some of the questions Bessent will face from Democrats, also highlights other ways he reduced his tax bill, including by writing off losses from a publisher he co-owned.
A spokeswoman for Mr. Bessent did not immediately respond to a request for comment.
Andreas Duehren reporting contributed.
