Published January 27, 2025

06:13 PM EST

Key Takeaways

  • On Monday evening, the Senate confirmed Wall Street veteran Scott Bessent as the Treasury Secretary.
  • He replaces Janet Yellen in the White House’s top financial job, overseeing the IRS, banking regulations, and managing the nation’s $36 trillion national debt.
  • Bessent will play a key role in trying to make Donald Trump’s proposed economic plans a reality.

President Donald Trump filled a key role in his cabinet Monday when the Senate confirmed Scott Bessent, a Wall Street veteran, as Treasury Secretary.

The Senate confirmed hedge fund manager Scott Bessent to be Trump’s top economic advisor Monday evening with a vote of 68-29. He replaces Janet Yellen, an economist who previously served as chair of the Federal Reserve.

Bessent takes over the Treasury at a critical time for the economy and could play an important role in shaping U.S. trade policy as well as dealing with the expiration of the 2017 Trump tax cuts this year and extending the debt ceiling, which the U.S. breached in January.

Tariffs

Trump has set a Feb. 1 deadline to begin imposing the tariffs he promised on the campaign trail, starting with tariffs targeting Mexico and Canada.

In his confirmation hearing, Bessent faced criticism of the tariffs from senators who said they could raise prices for consumers and hurt the economy, as many economists have warned. Bessent defended Trump’s proposed tariffs, saying they would help national security and protect American manufacturing.

Financial markets have bet he will be a moderating influence on Trump’s trade policy, and could push Trump to the threat of tariffs as a negotiating tool instead of actually implementing them.

Taxes and Debt Ceiling

Bessent could also represent the White House as lawmakers in Congress negotiate how the U.S. will handle two major upcoming deadlines.

At the end of the year, Trump’s 2017 tax cuts will expire. Trump has called to extend them and has asked for new tax cuts, including eliminating income taxes on tips. However, extending the cuts will be costly, according to some analyses, which found the tax cuts could put the federal budget trillions more in the red over the next 10 years. Lawmakers will either have to cut spending or allow the national debt to accelerate to pay for them.

Meanwhile, the clock is ticking for Trump and Congress to deal with the debt ceiling. The U.S. is currently over its congressionally mandated $36 trillion borrowing limit. The Treasury Department is currently buying time through “extraordinary” accounting measures, but at some point later this year will be unable to pay its debts unless Congress acts, possibly kicking off a major financial crisis.

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