Scott Bessent, the newly confirmed Secretary of the Treasury, has made significant headlines in the last few days following his Senate confirmation on January 27, 2025. Bessent, a 62-year-old billionaire investor and founder of the Connecticut-based hedge fund Key Square Group, is notable for being the first openly gay Cabinet member in a Republican administration.
Bessent's confirmation was the result of a bipartisan vote in the Senate, with a 68-29 margin, including over a dozen Democrats supporting his nomination alongside the Republican majority. During his confirmation hearings, Bessent outlined his economic vision, emphasizing the extension of President Donald Trump's 2017 Tax Cuts and Jobs Act, which he believes is crucial for economic growth and preventing what he terms "economic calamity" if the tax cuts are allowed to expire. He also expressed his commitment to reducing deficits, achieving 3% annual economic growth, and increasing domestic oil production by 3 million barrels a day.
Bessent's extensive career in finance is marked by his time as a leading executive at George Soros's firm, Soros Fund Management, where he was instrumental in a successful $1 billion bet against the British pound in 1992. Despite his past affiliations with Democratic causes, Bessent has recently aligned himself with conservative policies, particularly during his role as an economic adviser for President Trump’s 2024 campaign.
One area of concern during his confirmation process was Bessent’s use of the limited partnership exception under IRC Section 1402(a)(13) to avoid Self-Employment Contributions Act (SECA) taxes related to his limited partnership interest in Key Square Group. Bessent maintained that his distributive share of the hedge fund’s income was not subject to SECA tax due to the limited partner exception. He has committed to winding down Key Square Group, establishing a reserve fund to address any contingency related to the SECA tax issue, and amending his returns if the IRS’s position is upheld on appeal.
As Treasury Secretary, Bessent is expected to champion several key policies, including the extension of Trump's tax cuts and the implementation of tariffs, particularly those focused on carbon fuel spent to produce imported goods. He has also committed to maintaining the IRS’s Direct File program for the current tax season.
In a recent and contentious decision, Bessent granted representatives from DOGE, an Elon Musk-led entity within President Trump's administration focused on cutting costs and bureaucracy, access to the federal payment system. This move has been met with strong criticism from watchdog groups and Democratic lawmakers, who argue that it represents a "blatant attack on democracy" and jeopardizes the sensitive information of millions of Americans, including tax returns, Social Security checks, and Medicare data. The Revolving Door Project and Congressional Progressive Caucus have called for Bessent's impeachment over this decision, citing concerns about the unaccountable nature of DOGE and the potential risks to public funds and personal data.
Bessent's ability to navigate complex political landscapes has been a key factor in his rise to the Treasury position. He has managed to gain support from both MAGA populists and Wall Street, a feat that has been described as a tricky political balancing act. His performance at Treasury will be closely watched as he navigates critical intraparty policy disputes and manages relations with an often impulsive President Trump, all while aiming to maintain calm in global markets.
