Treasury Secretary Scott Bessent said there is a “very good chance” the U.S. budget deficit under President Donald Trump has peaked.
In an interview with CNBC on Thursday, Bessent stated that there’s a “very good chance” the budget deficit has peaked under Trump. He further stated that he, Trump, and Russell Vought, the director of the Office of Management and Budget, are among the federal government leaders working on fiscal consolidation measures. This announcement came a day after his department’s extraordinary debt buyback announcement.
Bessent also indicated that these efforts could potentially save several hundred billion dollars. “We are going to be laser focused,” he said.
Despite the challenges, he anticipates this year’s tariff revenue to be around the same level as 2025’s, after levies were re-implemented. This time, he said, the revenues should not have to be refunded to companies.
US Deficit Hits Record July High
The U.S. budget deficit has been a concern, with the federal government posting a record July deficit of $432 billion. The fiscal-year-to-date deficit widened to nearly $1.8 trillion, exceeding the level recorded at the same point last year.
This situation has led to criticism from various quarters, including Florida Governor Ron DeSantis, who attributed the Department of Government Efficiency (DOGE) ‘s failure to Congress’s inability to enact budget reductions. DeSantis expressed his views on the matter, stating, “DOGE fought the Swamp and the Swamp won.”
Schiff Challenges Bessent’s Debt View
The U.S. government debt, meanwhile, surpassed a record $40 trillion, more than doubling over the past decade and intensifying concerns about the country’s fiscal health.
“There’s nothing magic about the 40-trillion number,” The Treasury Secretary said. “We can grow our way out of that.”
Economist Peter Schiff criticized Bessent’s argument that the doubling of U.S. national debt is less concerning because household net worth also more than doubled. He argued that debt is a permanent obligation that must be serviced and repaid, while household wealth can quickly decline, particularly if higher interest rates trigger a drop in overvalued stocks and real estate.
Disclaimer: This content was partially produced with the help of AI tools and was reviewed and published by Benzinga editors.
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