US President-elect Donald Trump's policies will help bring inflation back down and allow workers' wages to rise, and the increases will be closer to the Federal Reserve's 2% target, as it did during Trump's first administration, said nominee for Treasury Secretary Scott Bessent at a Senate hearing on his nomination on Jan 16.
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00:00One of my other top priorities is working on a bipartisan basis to lower costs for families.
00:15Under President-elect Trump's policies, do you believe that prices for families will
00:19go up or down?
00:21I believe that inflation will be much closer to the Federal Reserve's target of 2%.
00:30And I believe that what we have seen over the past few years is that the bottom two
00:36income quintiles have a very different basket of goods and services.
00:42So there are two ways.
00:43We can either lower costs or we can get real wages up.
00:47I would hope that we would be able to do both.
00:50So you believe that President Trump's policies will further increase wages and lower inflation?
00:59I believe that they will increase real wages and lower inflation closer to the Federal
01:04Reserve's 2% target as it did during President Trump's first administration.
01:09Are there any specific policies proposed by the President-elect that you expect will increase
01:14prices for families?
01:18Something I can immediately think of.
01:22Can you give us your perspective on the impact that would occur in this country if we allowed
01:28this $4 trillion tax increase to happen?
01:33And this is the single most important economic issue of the day.
01:38This is pass-fail.
01:40That if we do not fix these tax cuts, if we do not renew and extend, then we will be facing
01:52an economic calamity and as always with financial instability that falls on the middle and working
02:01class people.
02:03We will see a gigantic middle class tax increase.
02:08We will see the child tax credit halved.
02:11We will see the deductions halved.
02:15So it will be what we call in economics, it has the potential for a sudden stop.
02:21Yes, we do not have a revenue problem in the United States of America.
02:26We have a spending problem.
02:28That historically for the past 40 or 50 years, revenues, federal government revenues have
02:35averaged about 17 to 17 and a half percent of GDP.
02:40I am concerned because several times the Treasury of the United States has been called upon
02:46to save the nation, whether it was the Civil War, the Great Depression, World War II, or
02:54the recent COVID epidemic, Treasury along with full government and Congress has used
03:03its borrowing capacity to save the union, to save the world and to save the American
03:10people and what we currently have now, we would be hard pressed to do the same.
03:17First of all, I would say in my adult life that the tragedy going on in Ukraine is one
03:26of the greatest tragedies of my adult life and ending that as soon as possible and entering
03:34role that Treasury can play in that if confirmed, I would like to do.
03:40As we discussed, I believe that the sanctions were not fulsome enough.
03:47I believe that the previous administration was worried about raising U.S. energy prices
03:58during an election season.
04:00I think low-level sanctions to mid-level that if any officials in the Russian Federation
04:08are watching this confirmation hearing, they should know that if I'm confirmed and if President
04:14Trump requests and as part of his strategy to end the Ukraine war, that I will be 100%
04:22on board for taking sanctions up, especially on the Russian oil majors to levels that would
04:30bring the Russian Federation to the table.