Source: Chip Somodevilla via Getty ImagesScott Bessent, the current US Treasury Secretary, told Congress on Wednesday that this year’s ballooning deficit is the direct result of Democratic overspending, not Republican tax cuts.
Speaking at a House Ways and Means Committee hearing, Scott said the deficit for the 2025 fiscal year is expected to fall somewhere between 6.5% and 6.7% of GDP—the third straight year the figure has sat above 6%. “What we are seeing here is a blowout in the spending,” he said.
Scott made clear he’s not interested in hearing critiques from the other side of the aisle. “I find it very difficult to be lectured to by people who created the largest deficit in history,” he said, calling out Democrats for backing policies that pushed federal expenditures past historical thresholds.
The 2024 fiscal year, which ended in September, recorded a 6.4% deficit, following 6.2% in 2023. He accused Democrats of abandoning any pretense of financial restraint, slamming their policies as the main force behind America’s worsening fiscal health.
Scott Bessent clashes with Democrats over tax policy and debt concerns
Democratic Representative Mike Thompson pushed back against Scott during the hearing, arguing that it’s not just spending but Republican-led tax cuts that have piled on to the national debt. “Every expert will tell you that the proposed Trump tax cuts will also add to our debt,” Thompson said.
But Scott refused to link the Trump administration’s tax policy to the deficit and instead placed the blame back on rising discretionary spending.
Tension flared again when Republican Congressman Thomas Massie, who opposed the GOP tax bill, suggested that concerns over rising deficits had pushed bond yields higher.
“Representative Massie doesn’t understand the bond market,” Scott said. He called it “incorrect” to judge the market based on a single day of trading and argued that US 10-year yields are actually lower than they were at the start of the year—unlike Germany and Japan, where yields have risen.
Richard Neal, the ranking Democrat on the committee, tried to shift attention to tax revenue. He claimed it was on the rise due to President Joe Biden’s boost to the IRS budget, but Scott laughed and shut that down immediately. He said the real reason for improved revenue collection is that the IRS is still using outdated systems, not because of increased staff.
“They focused on hiring more people instead of fixing the tech,” said Scott, adding that the agency’s infrastructure was in such bad shape that any efficiency gain was coming in spite of Democrat-led efforts, not because of them.
Bessent denies Fed rumor and defends industrial policy
The conversation took a turn when speculation over Scott possibly replacing Jerome Powell as Fed Chair was raised. That rumor’s been bouncing around Wall Street, but Scott denied it under oath. “If those conversations are happening, I’m not in them,” he said.
The White House has also dismissed the idea publicly, but the buzz hasn’t stopped. Still, Scott didn’t spend much time on it, choosing instead to double down on his policy goals.
He quickly pointed to US industrial capacity as another priority, saying, “There are strategic industries in the US where we must have an industrial base, and I would put steel in the top three.” He argued that the Offshore Balanced Budget Bill (OBBB) is the only way for the US to stay competitive with other countries that subsidize their industries. But that claim didn’t go unchallenged.
Linda Sanchez, a Democrat on the committee, brought in a report by the Yale Budget Lab, which predicts the OBBB will increase the national debt by $3.4 trillion by 2034. Scott shot back, “The Yale Budget Lab is staffed by former Biden officials,” clearly dismissing the report as politically biased despite it being labeled nonpartisan.
Before wrapping up, Republican Lloyd Smucker from Pennsylvania asked Scott about his 3-3-3 plan—a strategy that promises 3% GDP growth, a 3% deficit-to-GDP ratio, and 3 million more barrels of oil per day in production. When asked if the plan was still on track, Scott didn’t blink. “Yes,” he said.
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