WASHINGTON — President-elect Donald Trump picked Scott Bessent to serve as Treasury secretary Friday, tapping a billionaire hedge fund manager to lead an economic agenda that is expected to be built around raising tariffs and cutting taxes.
Bessent, the founder of the investment firm Key Square Capital Management, has emerged as a central economic adviser to Trump over the past year. He has called for rolling back government subsidies, deregulating the economy and raising domestic energy production. Unlike many on Wall Street, Bessent, 62, has also defended the use of tariffs, which are Trump’s favorite economic tool.
“Scott is widely respected as one of the World’s foremost International Investors and Geopolitical and Economic Strategists,” Trump said in a statement posted on social media. “Scott’s story is that of the American Dream.”
“Together, we will Make America Rich Again, Prosperous Again, Affordable Again, and most importantly, Great Again,” Trump said.
Although Bessent’s policy ideas are in lockstep with conservative economic principles, one aspect of his background could draw questions from Republicans. He rose to prominence in the finance world as a protégé of George Soros, a billionaire Democratic donor and longtime villain of the right wing, and served for years as his top money manager.
The selection came after intensive deliberation by Trump and his advisers, who debated for weeks about who should win the most prominent economic job in his administration. Bessent and Howard Lutnick, the CEO of Cantor Fitzgerald, tussled over the job before Lutnick was picked to be commerce secretary this week. Trump also considered tapping Kevin Warsh, a former Federal Reserve Board governor, and Marc Rowan, the CEO of Apollo Global Management, for the role.
If confirmed by the Senate, Bessent would take over a department with vast responsibilities that is at the core of the federal government. The Treasury Department issues debt to fund the government’s operations and pay its bills, including paying Social Security and veterans benefits.
But the most visible parts of Bessent’s job will be shepherding the administration’s tax plans through Congress, leading economic negotiations with China and overseeing the nation’s sanctions program.
Bessent will be taking over the department at a time when the U.S. economy is the strongest in the world and as years of rapid inflation have finally come under control. However, the national debt is approaching $36 trillion, and the campaign policies proposed by Trump could cost as much as $15 trillion over a decade, according to the Committee for a Responsible Federal Budget.
At Treasury, Bessent will be responsible for turning many of Trump’s unconventional campaign ideas into policy. The president-elect has called for eliminating taxes on tips, overtime pay and Social Security benefits. He also wants to impose blanket tariffs as high as 50% on imports and to enact higher import duties on goods from some countries.
Bessent will be in the middle of what is expected to be a time of growing tension between the Trump White House and the Federal Reserve.
During his first term, Trump raged publicly on social media about the interest rate policies of Jerome Powell, the Federal Reserve chair, and as a candidate this year he has suggested that presidents should have input on interest rates.
Bessent laid out a plan last month to undercut Powell by naming someone else to the position well before Powell’s term expires — a move that would widely be seen as interfering in the central bank’s independence. However, Bessent subsequently downplayed the merits of the idea.
Bessent’s credentials bear some similarities to those of Trump’s first Treasury secretary, Steven Mnuchin. Both are Yale-educated finance titans who are familiar operating in Democratic circles.
In 2011, Bessent was recruited by Soros to be the chief investment officer of his $30 billion Soros Fund Management. Four years later, Bessent took a $2 billion investment from Soros to start his own fund, Key Square.
Bessent and his husband have two children. He has taught classes at Yale University on the history of hedge funds, 20th century “booms and busts” and the 2007 financial crisis.
A longtime Republican donor, Bessent has also given money to some Democrats, including Hillary Clinton and Barack Obama. In 2000, he hosted a fundraiser for the Democratic National Committee in support of Vice President Al Gore, the Democratic candidate for president that year.
Bessent has been one of Trump’s most prominent fundraisers this year.
Despite his previous donations to Democrats, Sen, Ron Wyden of Oregon, the top Democrat on the Senate Finance Committee, criticized the choice of Bessent on Friday.
“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. “When it comes to the economy, the government under Trump is of, by and for the ultrawealthy.”
Sen. Mike Crapo of Idaho, the top Republican on the finance committee, praised the selection, citing Bessent’s “extensive private sector experience and market knowledge.”
As an adviser to Trump, Bessent became a vocal critic of the economic agenda being pitched by Democrats.
At a campaign rally in South Carolina in August, Bessent warned of a “Kamala crash” if Vice President Kamala Harris were elected, and he won the praise of Trump, who described him as “one of the most brilliant men on Wall Street.”
At Treasury, Bessent will have to quickly get up to speed with managing a thicket of challenging issues.
The Biden administration has imposed sweeping sanctions on Russia that the Treasury Department is responsible for enforcing. The debt limit, which caps how much the government can borrow, is suspended until early January, at which time Bessent may need to use so-called extraordinary measures to allow the federal government to keep paying its bills. And if Trump embarks on new trade wars with China, Mexico or Europe, Bessent will be responsible for trying to calm financial markets.
In an interview with CNBC after the election, Bessent was already smoothing out some of Trump’s proposed policies, which economists have said could ignite a new bout of inflation and slow the economy.
Bessent suggested that Trump’s tax-cutting ideas would have to be negotiated in Congress with Republicans, who will not want to widen deficits. He also said that it would be prudent if any tariffs were phased in so that any associated “price adjustment” could be absorbed gradually by the economy.
And Bessent was mindful that high prices were one of the reasons that Harris lost the election and predicted that Trump would want to avoid policies that increase costs.
“President Trump has some very good ideas,” Bessent said. “But I guarantee you the last thing he wants is to cause inflation.”
This article originally appeared in The New York Times.
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