WASHINGTON – President-elect Donald Trump launched a blitz of picks for his Cabinet, but he took his time before settling on billionaire investor Scott Bessent as his treasury secretary nominee.
The Republican not only wanted someone who jibes with him, but an official who can execute his economic vision and look straight out of central casting while doing so. With his Yale University education and pedigree trading for Soros Fund Management before establishing his own funds, Bessent will be tasked with a delicate balancing act.
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Trump expects him to help reset the global trade order, enable trillions of dollars in tax cuts, ensure inflation stays in check, manage a ballooning national debt and still keep the financial markets confident.
“Scott will support my Policies that will drive U.S. Competitiveness, and stop unfair Trade imbalances, work to create an Economy that places Growth at the forefront, especially through our coming World Energy Dominance,” Trump said in a statement.
But for all the confidence, Trump was cautious in picking the 62-year-old, a sign that he understood the stakes after winning a presidential election largely shaped by inflation hitting a four-decade peak in 2022. He felt comfortable making faster decisions on Fox News host Pete Hegseth for defense secretary, Florida Sen. Marco Rubio for secretary of state and Robert F. Kennedy Jr. for health and human services secretary.
His choice of Bessent went against the opinion of billionaire Elon Musk, who is co-leading Trump's advisory panel known as the “Department of Government Efficiency” initiative. The head of Tesla and SpaceX posted on his social media site X before Trump's selection that Bessent would be “a business-as-usual choice.”
The pick also showed the internal tensions of a candidate who won by appealing to blue-collar voters but who depends on an administration staffed by those, who like Trump, enjoy a life of extreme wealth.
Senate Finance Committee Chair Ron Wyden, D-Ore., was unimpressed by Bessent.
“Donald Trump pretends to be an economic populist, but it wouldn’t be a Trump Treasury Department without a rich political donor running the show," Wyden said in a statement rushed out immediately after the announcement Friday evening. “When it comes to the economy, the government under Trump is of, by, and for the ultra-wealthy.”
Bessent caught Trump's attention during the campaign with his ideas for 3% growth, a reduced budget deficit equal to 3% of gross domestic product and 3 million additional barrels a day of oil production. Larry Kudlow, the TV host and a director of the White House National Economic Council during Trump’s initial term, supported him. But critics in Trump's orbit said Bessent was weak on tariffs.
Another onetime contender, Howard Lutnick, the billionaire CEO of the investment firm Cantor Fitzgerald, was more pro-tariffs but less reassuring to some business leaders. Trump picked him to head the Commerce Department and take the lead on trade issues.
Trump also looked at other candidates, including former Federal Reserve governor Kevin Warsh, Marc Rowan, the chief executive of Apollo Global Management, and Sen. Bill Hagerty, R-Tenn.
Trump's decision on his treasury chief is tied in part to most Republican voters’ biggest motivation for returning him to the White House: the state of the U.S. economy and the pressure from high prices.
According to AP VoteCast, an early November survey of about 120,000 voters nationwide, about 3 in 10 voters said they wanted total upheaval in how the country is run. Bessent has been deeply critical of President Joe Biden's economic policies, saying in remarks at the conservative Manhattan Institute that he was “alarmed” by the size of government spending and deficits and that Biden had embraced a “central planning” mindset that he thought belonged on “the scrap heap of history.”
Biden, for his part, chose Janet Yellen, the former Federal Reserve chair, to be his treasury secretary, relying on her credibility as an economist as his administration successfully pushed for $1.9 trillion in pandemic aid in 2021. But inflation jumped as the United States recovered from pandemic shutdowns, driven by supply chain challenges, global conflict and — according to Biden administration critics — an excessive amount of pandemic aid.
Government officials and economists are uncertain about what Trump would prioritize. The Republican campaigned on jacking up tariffs against China and other trade partners. But people in his economic orbit privately insist that what he cares about are fair terms in which other countries such as China don't disadvantage the United States by subsidizing industries, manipulating currencies and suppressing their own workers' wages.
The president-elect wants to extend and expand his 2017 tax cuts, many of which are set to expire after 2025. He's also proposed an array of tax cuts, such as no taxes on tips or overtime pay or Social Security benefits, that would create possible deficit increases.
The Committee for a Responsible Federal Budget, an independent fiscal watchdog, estimated that Trump could possibly add between $1.7 trillion to $15.6 trillion to projected deficits over 10 years, a sign of the uncertainty regarding his economic plans.
The economist Olivier Blanchard, a senior fellow at the Peterson Institute for International Economics, this week laid out the contradictions of “Trumponomics.” Deficit-funded tax cuts and tariff hikes could be inflationary, yet Trump won November's election in large part because of voter frustration with inflation. There’s also his promise of deportations of unauthorized immigrants that could lower employment, though it’s not clear what Trump will do once in office.
“The U.S. should be thinking about reducing the deficit, quite apart from Trump,” Blanchard said in a webcast. “Trump is probably going to make it worse.”
Trump’s treasury secretary might ultimately face the additional responsibility of trying to pressure Fed Chair Jerome Powell to do as Trump wants, since the inflationary pressures outlined by Blanchard likely mean the Fed would try to slow growth to keep inflation from overheating, likely upsetting Trump.
“The risk of a conflict between the Trump administration and the Fed is very high,” Blanchard said in a webcast.
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