Key Takeaways:

• Scott Bessent confirmed as U.S. Treasury Secretary with a vote of 68-29.
• Bessent will manage tax policies and the nation’s significant $28 trillion debt.
• He faces immediate challenges including rising budget deficits and economic inflation.
• The former hedge fund manager has committed to avoiding a government default.
• His economic agenda aligns closely with Trump's focus on tax cuts and tariffs.

On January 27, 2025, the U.S. Senate confirmed Scott Bessent as the 79th Treasury Secretary, a position that places him at the center of President Donald Trump's economic strategy. The Senate vote concluded with a majority of 68-29, including support from 16 Democratic senators. Bessent's extensive background as a billionaire hedge fund manager positions him to significantly influence tax legislation, management of the $28 trillion Treasury debt, and international economic relationships.

Bessent, aged 62, is expected to advocate strongly for Trump's agenda, which prioritizes substantial tax reductions and the introduction of steep tariffs. His confirmation hearing revealed his apprehensions about the impending expiration of $4 trillion in tax cuts, warning that their lapse would be a "calamity" for middle-class Americans. He argued that tariffs are essential for combating unfair trade practices and enhancing U.S. leverage on the global stage. At the same time, Bessent contended that the administration's initiatives to bolster oil production could counteract inflationary trends.

Addressing concerns over managing federal cash flow, Bessent acknowledged that the government had hit its statutory debt limit on his second day in office, forcing the Treasury to undertake "extraordinary measures" to avert a default—a situation that he assured senators would not happen under his watch. As Treasury Secretary, he will be pivotal in shaping tax reform discussions with Congress, especially in the context of potentially rising budget deficits projected to reach trillions if tax cuts are not counterbalanced by revenue increases or spending reductions.

Complicating matters further, over 60% of the federal debt is due to mature during his tenure, coinciding with unprecedented issuance growth exceeding $2 trillion annually since the COVID-19 pandemic. The market's reaction to growing deficits has also seen long-term bond yields increase, resulting in fixed mortgage rates surpassing 7%, a pressing issue for prospective homebuyers.

Bessent, who described federal spending as "out of control," supports Trump's commitment to preserve key social programs, including Social Security and Medicare, which represent some of the largest expenditures in the federal budget. His background includes a degree in political science from Yale and professional experience with prominent financiers like George Soros. As a historic figure, Bessent will be the highest-ranking openly gay official in U.S. history, positioning him fifth in line for the presidency.

This confirmation positions Bessent at a critical juncture in U.S. economic management—an opportunity to navigate the complexities of fiscal policy as the administration strives to bolster the economy.

For more details, refer to the reports from Voice of America and South China Morning Post.