Bescent says we will never default and raise the debt cap.
Treasury Secretary Scott Bescent said they are still unknown for the coming X days when the US violates its debt cap.
WASHINGTON – Treasury Secretary Scott Bescent defended the Trump administration’s economic policies when it first appeared on Capitol Hill since President Donald Trump’s tariffs overthrow the US economy.
During a hearing with the House Subcommittee, which is responsible for turning the Treasury budget proposal into law, Bescent suggested that the Republican administration could announce tariff deals with US trading partners as early as this week. Trump’s ministers admitted that the US has not yet begun negotiations with China, the world’s largest economy, or even if he did.
Here are six takeaways from his testimony.
Customs transactions may be announced this week
Rep. David Joyce of R-Pennsylvania asked Bessent what Americans can expect from tariffs a year from now.
Bessent said it would rely on “trading partners” from 17 other countries the administration is negotiating.
These countries have brought “very good offers” to the table with the US, he said, and negotiations are “going very well.”
The deal could be announced in the same way as this week, he added.
“I would be surprised if 80% or 90% (trade contract) was not concluded by the end of the year,” Bescent said.
There are no negotiations with China
But Bescent said Trump has not spoken to China, one of the country’s 18 biggest trading partners.
That contradicts previous claims from Trump that the US is involved in Beijing about tariffs.
Earlier this year, the Trump administration imposed a total of 145% tariffs on imports from China, urging Beijing to slap a 125% tariff on US exports.
Bescent says it’s up to China to eliminate trade tensions as the US sells more products to the US than China. Trump has signalled multiple times in recent weeks that trade talks with China are underway.
I’ll move forward with the IRS
Bessent told the House Panel that the Internal Revenue Service had spent about $450 million on paper processing by 6,500 full-time staff dedicated to last year’s tasks.
Through “policy change and automation,” the administration is aiming to cut its costs to less than $20 million, he said.
He touted the $2 billion cuts that are already collecting the IRS’ information technology budget “without operational disruption.”
“The IRS still needs significant reforms to deliver efficient and cost-friendly results for Americans,” he said.
“x-date” is still unknown
R-Arkansas Rep. Steve Womack asked Bessent when the “X-Date” was. The date when the US defaults on its obligation if the debt cap is not raised.
Bescent said his agency is still tallying its total revenues from tax day in mid-April.
“We’re on the warning truck,” he said. “And when you’re on the warning truck, that means the wall isn’t far away.”
However, he assured his members that the US government was “not the default” and that they would raise the debt cap.
The debt rise is included in the large party of Congress – Ryne Republicans, working to implement Trump’s agenda. Lawmakers hope to hand it over by July 4th.
There is no recession
Rep. Steny Hoyer, D-MD. We asked Bescent if he believes the United States is currently in a recession.
“I believe in data and there’s nothing in the data that shows us we’re in a recession,” Bessent replied. “The truth is, employment reports are amazed at the benefits.”
An economic report released last week showed that the US GDP was signed at an annual rate of 0.3% in the first quarter. That’s because imports inflated 50%, as companies compete to order foreign goods before tariffs begin.
Bessent claimed that the numbers could be revised and that they expected changes to change after seeing the detailed analysis.
The “scary” country’s debt must be reduced
Rep. Chuck Edwards of R-North Carolina asked Bessent about US debt levels no longer sustainable. At the beginning of April, national debt was $36.2 trillion.
Bescent said the exact moment was “hard to pinpoint” but “it would look like a sudden stop in the economy as markets lose confidence and credit disappears.”
“I’m committed to not happening,” he said.
Debt is “scary,” he said, but the key is to reduce spending during GDP growth.
GDP was signed in the first quarter of the year, and Republicans in Congress are currently working on bills estimated by nonpartisan experts.
Edwards asked: When is the turning point?
“What the market is more concerned about is the trajectory. Are you on an unsustainable trajectory or are you bending the curve?” Bescent added that the goal is to solve the problem using both growth and spending control.
Joey Garrison contributed.
