Secretary of the Treasury & Michael Knowles: Scott Bessent White House Interview
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It's wonderful to come to the White House. It's always wonderful to interview top administration officials. And it's especially wonderful to interview one of the most important men in the administration and in the world, the Treasury Secretary, Scott Besson. Mr. Secretary, thank you so much for taking the time. Thanks for having me. So I'll just jump right in. You have made a priority, the reduction of long-term interest rates and of mortgage rates.

And since the inauguration, both of those have come down materially. So this has obviously been very effective. Why is it so important for those two objectives to be achieved? Good. It's a great question. And thanks for asking that. The Biden administration created an affordability crisis. And one of the key...

problems in the affordability crisis has been a home affordability. A big component of home affordability is mortgage rates. So the Fed had to go on a very aggressive hiking cycle to bring down inflation. We hope that the Biden inflation is dead. We believe that everything President Trump's agenda is doing on the economy, the

making the tax cuts permanent, bringing down deregulation, or bringing down regulation, cutting regulations, bringing down energy prices will contribute to lower rates. And so what we've seen, we've seen lower tenure rates, and we've also seen the spread between interest rates and mortgages come in as we at Treasury have talked about bank deregulation. So

You mentioned the tax cuts. I know that you've just met with the big six to try to make Trump's tax cuts both extended and expanded. And on the campaign trail, President Trump was proposing no tax on tips, no tax on Social Security. But...

You also have to deal with the fiscal hawks on Capitol Hill who are worried that that could exacerbate the budget deficit. So how are those talks progressing? Where do you think you're going to land, not just on the Trump tax cuts, but on the expansion?

Great. So again, very important question. And for us, it's pass-fail. If we don't get this done, it's going to be the biggest tax cut in the history of the United States, excuse me, biggest tax hike in the history of the United States, $4.5 trillion. And you want to talk about blowing out the budget, the deficit, the long-term projections, there'll be no coming back from that and the economic calamity.

and so when you talk about the big six the big six that i lead it's myself the

Kevin Hassett, who's NEC chair, Leader Thune, Speaker Johnson, Senator Crapo, and Chairman Jason Smith. And we've got a great relationship. We had an incredibly productive meeting the other day. And I think the story that the mainstream media doesn't want to tell, we can see that the Democrats are broken and in disarray, but the Republicans are the opposite. And because of President Trump's leadership, it's

Speaker Johnson did a great job. He got the reconciliation motion through the House first time. We got a clean continuing resolution bill, first vote. Everyone said it couldn't be done. Now the Senate has the House instructions. They are going to put their stamp on it.

and it was a very productive meeting. I was very impressed with Leader Thune's proposed timeline and it looks like this could get done sometime in the early summer. So in other words, with regard to the fiscal hawks, because it's pass/fail, because the Republicans on Capitol Hill don't want to be responsible for the largest tax hike ever, you're confident that the bill will get through?

Look, at the end of the day, there's going to be something for everybody. There's going to be a very growth-in component. We're going to bring back the full expensing. We may put in expensing of factories to reshore manufacturing for the bottom 50% of wage earners who have been killed by the previous administration. As you mentioned, no tax on tips, no tax on Social Security, no tax on overtime. We're going to make auto loans deductible again if your car is made in the United States.

And that will also address the affordability crisis. And then we will have spending cuts. This Green New Deal is out of control. The CBO scored it at about $250 billion over 10 years.

It's up 2.5x and there are people who think it's going to be over a trillion dollars. So it's very easy to rein that in. And if you want to talk about deficit hogs, I'm a deficit hog, but I'm also a realist. Every $300 billion that we cut is 1% of GDP. That's it.

We didn't get here in a year and we're going to bring it down smartly over the next four years, get back to the long-term trend and try to balance the budget in ten. Before I let you go, one question that comes up to my mind because you mentioned reshoring American manufacturing.

probably the single word that people are associating with President Trump's economic plan: tariffs. I think he said that's his favorite word, and his second favorite word is reciprocal. So Trump has run on tariffs, and there have been varying justifications for the tariffs. One, in order to reduce trade barriers from other countries so that we would then reduce our tariffs and we have more trade. Two,

reshoring American manufacturing. Three, raising revenue. All of which sound great to me. However, they do seem to be a little bit in conflict with each other. So if, for instance, if we reduce all the trade barriers, then you're probably not going to get the jobs, you're not going to get the revenue. If you do get the jobs, if we do reshore American manufacturing, that's great, but you're not going to get the revenue. So there are these competing desires that the tariffs could serve. As Treasury Secretary,

How are you ranking those priorities?

Well, I don't do the ranking. President Trump does the ranking. And look, President Trump, if we go back, Alexander Hamilton was the original tariff man. Why did he do it? He did it to raise revenues for the new country, and he did it to protect U.S. industry. President Trump has added a third leg for negotiations, whether it's closing the border to immigration, the fentanyl crisis, or it's

as a way to prevent people from trading with Venezuela. So I think it'll become clearer after April 2nd. And to your part on reciprocal tariffs, the tariff component is just one component. I think if we were to look, a lot of the stated tariffs are lower than one would think. But it's the non-tariff barriers that happen both at the port of entry. It can be

the usage standards, it can be food standards, it can be kind of made up safety standards that they hold our cars or products to that they don't get held to. So the non-tariff barriers are going to be addressed also. It could be the cheap labor, it can be government subsidies, it could be currency manipulation. So all of that is going to be included in the April 2nd.

So, you know, I think what's really going to get the economy going, we're going to have the tariffs, we'll get more certainty on those from April 2nd onward, and then early summer we're going to get this tax bill done. You know, that's a very fitting answer for the Trump administration, which counts as one of its great strengths. Unpredictability is wait and see when we get the announcement on April 2nd. Wonderful. Mr. Secretary, thank you so much for taking the time. Good to see you.