By Caitlin Reilly
CQ-Roll Call
(TNS)
WASHINGTON — Taxes and tariffs took center stage Thursday at the Senate Finance Committee’s confirmation hearing for President-elect Donald Trump’s intended Treasury secretary nominee, Scott Bessent.
Republicans and Democrats sparred over who would benefit most from extending more than $4 trillion in tax cuts enacted during the first Trump administration. Bessent warned of “devastating” consequences if they are allowed to expire at the end of the year.
The hearing is the opening salvo in a debate about the fiscal health of the country that is likely to dominate this year, as Republicans pursue extending the tax cuts using the filibuster-proof budget reconciliation process, offsetting some of the cost with spending cuts. The two parties have long debated the impact of the 2017 law, and old arguments are resurfacing as the GOP pursues a party-line extension of expiring provisions.
Bessent also fielded questions on his stance on the tariffs Trump has vowed to impose from Democrats and at least one skeptical Republican. Ranking member Ron Wyden, D- Ore., also made reference to an investigation by the committee’s Democratic staff into Bessent’s tax returns, but other Democrats largely stuck to policy questions.
Bessent defended the expiring tax cuts in his opening remarks, saying the country was “barreling toward an economic crisis” if the tax breaks expire at the end of the year. In a hat tip to Trump’s campaign pledge to waive taxes on tips and Social Security benefits, as well as lowering the corporate rate to 15% on domestic manufacturers, Bessent also said Congress must implement new policies to reduce taxes on “manufacturers, service workers and seniors.”
Senate Finance Chairman Michael D. Crapo, R- Idaho, also defended extending the tax cuts, saying of the more than $4 trillion cost, $2.6 trillion would go to households making less than $400,000.
“This is not a tax cut for the wealthy that we’re talking about. It is a tax increase on all Americans, the majority of whom are in the lower- and middle-income categories,” Crapo said.
Wyden and other Democrats criticized the cuts for disproportionately benefiting the wealthy. Wyden sought to draw a direct line from those in line to benefit from the tax cuts and the billionaires Trump surrounds himself with.
“In a Trump economy the winners’ circle is small, and it’s dominated by the ultra-wealthy,” Wyden said. “Ultra-wealthy individuals who rake in millions each year would get tax breaks of hundreds of thousands of dollars. Families who live paycheck to paycheck would be lucky to get enough to cover groceries for a week.”
Bessent’s taxes
Wyden also sought to paint Bessent, a billionaire hedge fund manager, as emblematic of a tax system that has one set of rules for the wealthy and another for the working class. A confidential memo prepared by the committee’s Democratic staff accused the nominee of avoiding more than $900,000 in self-employment taxes and taking other deductions staff deemed questionable.
“This is exactly the kind of abusive scheme that leaves Americans feeling disgusted with our tax system,” Wyden said.
Crapo opened the hearing with a defense of Bessent, saying he had cooperated with the committee’s vetting process and done nothing wrong. Representatives from the Trump transition team also previously denied any impropriety.
“It is clear that you followed applicable law and provided thousands of pages of documentation that substantiate your positions—positions supported by major law and accounting firms,” Crapo said.
In response to a question from Sen. Sheldon Whitehouse, D- R.I., Bessent said if confirmed he would wind down his hedge fund and set aside money to pay the additional taxes if ordered by a court. The amount in question is lower than figures cited by Democratic staff, he said.
“It is my firm’s taxes, and we are up-to-date on all our taxes,” Bessent said. “This matter … is in continuing litigation. If confirmed, I have agreed to shutter my firm, and I have also informed the ranking member and the chairman that I will provision the amount … and I will hold that … until the case makes its way through the court.”
Despite some sparring, Democrats and Bessent found areas of agreement. Wyden secured a commitment from Bessent that he would allow the IRS Direct File program, which allows taxpayers to file for free online directly with the agency, to continue for the upcoming tax season. Republicans want to end the program, which will be available in 25 states this filing season.
In response to a question from Sen. Mark Warner, D- Va., Bessent said he supported more aggressive sanctions on Russia. Sen. Elizabeth Warren, D- Mass., sought Bessent’s commitment that he would support ending the statutory debt ceiling, but came up short, despite Trump’s urging Congress to put an end to the mechanism last month.
Tariffs
Bessent also defended the president-elect’s tariff agenda. During the campaign, Trump pledged to impose across-the-board tariffs on goods coming into the U.S., and higher trade duties on imports from China.
Democrats criticized the tariffs as a tax increase. Bessent disagreed, saying currency appreciation would negate some of the tariffs’ effect. On top of that, consumer habits would change in response to higher prices, and China would cut prices to maintain its market share, he said.
“That’s an academic view of it. But what I know is the history of this is it clobbers people of modest means,” Wyden responded.
Sen. Todd Young, R- Ind., who declined to endorse Trump during the campaign, pressed Bessent on tariffs and sought assurances the administration would protect farmers from adverse effects.
“The American farmers have been very loyal. Ninety percent of rural voters voted for President Trump, so they should know that their interests are his interests,” Bessent said, adding that he would enforce purchase guarantees included in a 2020 trade agreement between the U.S. and China.
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©2025 CQ-Roll Call Inc., All Rights Reserved. Visit cqrollcall.com. Distributed by Tribune Content Agency LLC.
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Tags: Income Tax, Legislation, Taxes
