Scott Bessent: America’s affordability crisis is ending as Trump’s tax plan kicks in
Treasury Secretary Scott Bessent breaks down why inflation’s cooling and how Trump’s tax plan could reignite prosperity.
The Treasury Department is touting progress in lowering federal spending since President Donald Trump returned to the White House in January.
Treasury officials are touting data showing a decline in year-over-year federal spending growth relative to the final full year of the Biden administration. The Trump administration's data shows federal spending was up 7.1% year over year in the second quarter of 2024, before accelerating to 28.5% in the third quarter and 10.9% in the fourth quarter.
In the first quarter of 2025, when the transfer of power between the Biden and Trump administrations occurred, spending was up 8.5% year over year. That slowing trend continued in the last two quarters, with federal outlays up just 0.2% in the second quarter of 2025 and outlays falling 2.5% in the third quarter of the year, according to the Treasury.
"While the full year's budget deficit was a positive surprise, coming in at $1.77 trillion for fiscal year 2025, or $41 billion below the previous year, the figure does not capture the dramatic intra-year improvement, particularly for federal outlays," said Joe Lavorgna, counselor to Treasury Secretary Scott Bessent.
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Treasury Secretary Scott Bessent and counselor Joe Lavornga have touted the Trump administration's spending reduction efforts. (Magnus Lejhall/TT News Agency/AFP/Getty Images / Getty Images)
Lavorgna added that the "underlying trends point to more significant improvement in U.S. finances immediately ahead."
He added that the "last two quarters of Biden's term accounted for an astounding 74% of last year's budget deficit," which "effectively saddled President Trump with a large deficit for the fiscal year" given that the fiscal year was half over when he took office.
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Bessent appeared on Gxstocks Network's "Kudlow" Wednesday and discussed the reduction in the budget deficit and federal spending since Trump took office.
"Contrary to what everyone said, for the fiscal year last year, we had a lower deficit than we did in the previous fiscal year," Bessent said.
"Warren Buffett says, "When people ask you how do you lose weight, you eat less, exercise more.’ How do you control the budget deficit? You spend less or control spending and grow more," Bessent added.
Bessent said he wants to see federal spending restrained to curb deficits. (Elizabeth Frantz/Reuters / Reuters Photos)
"If we can keep the spending flat to down and grow at least a nominal 5%, maybe higher than our deficit to GDP," Bessent said.
"It ended the fiscal year with a five in front of it, down from the 6.4%, 6.5% which was the worst when we weren't in a recession, weren't at war, and I think we could make substantial progress again.
"I would hope we could be in the low fives or something with a four in it for next year."
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Bessent has previously said he would like to see the deficit to GDP ratio at around 3%, which would be a more sustainable level than what has transpired in recent years.
