WASHINGTON (AP) — President-elect Donald Trump launched a flood of nominees for his Cabinet but took his time before settling on billionaire investor Scott Bessent as his nominee for Treasury secretary.
The Republican not only wanted someone who agreed with him, but also an official who could implement his economic vision while looking directly outside the central appointments. With his Yale University education and pedigree trading for Soros Fund Management before launching his own funds, Bessent faces a dainty balancing act.
Trump expects him to facilitate reshape the global trading order, deliver trillions of dollars in tax cuts, ensure inflation stays under control, get a handle on skyrocketing national debt and still keep financial markets confident.
“Scott will support my policies that advance U.S. competitiveness, stop unfair trade imbalances and work to create an economy that prioritizes growth, particularly through our coming global energy dominance,” Trump said in a statement.
But for all his confidence, Trump was cautious in his selection of the 62-year-old, a sign that he understood the stakes after winning a presidential election largely driven by inflation, which hit a four-decade high in 2022 reached. He felt comfortable making quicker decisions Fox News host Pete Hegseth is defense secretary, Florida Sen. Marco Rubio is secretary of state and Robert F. Kennedy Jr. is health and human services secretary.
His choice of Bessent contradicted the opinion of billionaire Elon Musk, who co-chairs Trump’s advisory board called the Department of Government Efficiency Initiative. The head of Tesla and SpaceX posted on his social media page X before Trump’s election that Bessent was “an election as usual.”
The election also highlighted the internal tensions of a candidate who won by appealing to working-class voters but who relies on a government staffed by people who, like Trump, live a life of extreme wealth.
Senate Finance Committee Chairman Ron Wyden, D-Ore., was unimpressed with Bessent.
“Donald Trump claims to be an economic populist, but it wouldn’t be a Trump Treasury without a wealthy political donor running the show,” Wyden said in a statement issued immediately after the announcement Friday night. “When it comes to the economy, the Trump government is of, by and for the super-rich.”
Bessent caught Trump’s attention during the campaign with his ideas for 3% growth, a reduced budget deficit of 3% of gross domestic product and additional oil production of 3 million barrels per day. Larry Kudlow, the television host and director of the White House National Economic Council during Trump’s first term, supported him. But critics close to Trump said Bessent was frail on tariffs.
Another former contender, Howard Lutnick, the billionaire CEO of investment firm Cantor Fitzgerald, was more of a proponent of tariffs but less reassuring to some business leaders. Trump chose him to head the Commerce Department and lead trade issues.
Trump also considered other candidates, including former Federal Reserve Governor Kevin Warsh, Apollo Global Management CEO Marc Rowan and Sen. Bill Hagerty, R-Tenn.
Trump’s decision on his finance chief is tied in part to most Republican voters’ biggest motivations for his return to the White House: the state of the U.S. economy and pressure from high prices.
About three in 10 voters said they wanted a complete shakeup in the country’s leadership, according to AP VoteCast, an early November poll of about 120,000 voters across the country. Bessent has been deeply critical of President Joe Biden’s economic policies, saying in a speech at the conservative Manhattan Institute that he is “troubled” by the level of government spending and deficits and that Biden has adopted a “central planning” mindset that is similar to his In my opinion, this includes “the scrap heap of history.”
For his part, Biden chose former Federal Reserve Chair Janet Yellen as his Treasury secretary, relying on her credibility as an economist as his administration successfully pushed through $1.9 trillion in pandemic relief in 2021. But inflation soared in the United States as the country recovered from pandemic-related shutdowns caused by supply chain problems, global conflicts and, according to critics of the Biden administration, an excessive amount of pandemic aid.
Administration officials and economists are unsure what Trump’s priorities would be. The Republican campaigned to enhance tariffs against China and other trading partners. But people in his economic circles privately insist that he cares about a fair playing field in which other countries like China do not disadvantage the United States by subsidizing industries, manipulating currencies and suppressing the wages of their own workers.
The president-elect wants to extend and expand his 2017 tax cuts, many of which are set to expire after 2025. He has also proposed a number of tax cuts, such as possible deficit increases.
The Committee for a Responsible Federal Budget, an independent financial watchdog, estimated that Trump could potentially enhance projected deficits by $1.7 trillion to $15.6 trillion over 10 years, a sign of uncertainty over his economic plans.
Economist Olivier Blanchard, a senior fellow at the Peterson Institute for International Economics, laid out the contradictions of “Trumponomics” this week. Deficit-financed tax cuts and tariff increases could be inflationary, but Trump won the November election largely because of voters’ frustration with inflation. There’s also his promise to deport illegal immigrants, which could lead to a decline in employment, although it’s unclear what Trump will do once he’s in office.
“The United States should consider deficit reduction, regardless of Trump,” Blanchard said in a webcast. “Trump will probably make it worse.”
Trump’s treasury secretary could ultimately face the added responsibility of putting pressure on Fed Chairman Jerome Powell to do what Trump wants, as the inflationary pressures outlined by Blanchard would likely mean the Fed would try to sluggish growth to a minimum To prevent inflation from overheating, which would likely anger Trump.
“The risk of conflict between the Trump administration and the Fed is very high,” Blanchard said in a webcast.
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