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Speaker 1: Bloomberg Audio Studios, podcasts, radio news. A big legislative agenda

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Speaker 1: for President Trump, A legislative agenda Speaker Mike Johnson at

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Speaker 1: somewhere around three a m. This morning, did finally secure

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Speaker 1: enough votes and enough support to move that bill forward.

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Speaker 1: Of course, one of the people who will be in

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Speaker 1: charge for helping to implement a lot of provisions in

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Speaker 1: that bill is the Treasury Secretary of the United States,

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Speaker 1: and I'm pleased to say that he joins us right

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Speaker 1: here on the close. Scott Bessant, Great to have you

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Speaker 1: here on the program. Let's start off with the bill.

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Speaker 1: I know we are still awaiting a vote, a vote

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Speaker 1: that is likely to occur today, and of course the

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Speaker 1: signing that the President himself has said he would like

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Speaker 1: to get done tomorrow on July fourth, as you then

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Speaker 1: fan out after July fourth to sell this bill to

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Speaker 1: the public and more importantly, to implement some of the provisions.

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Speaker 1: What is your number one priority?

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Speaker 2: Number one priority is making sure the American American people

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Speaker 2: understand that this bill is the route to parallel prosperity.

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Speaker 2: It is the best of what we saw in the

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Speaker 2: twenty seventeen tax cuts and job backed along with President

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Speaker 2: Trump's campaign promises no tax and tips, no taxes over time,

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Speaker 2: eighty five percent of seniors will not be paying tax

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Speaker 2: on Social Security and the deductibility of auto loans if

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Speaker 2: the cars made in the United States. It also funds

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Speaker 2: the president's agenda in terms of defense, border, and school choice.

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Speaker 1: There's salesmanship that you and for that matter, the other

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Speaker 1: cabinet members will have to do to the public, but

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Speaker 1: there's also salesmanship that you have to do here, Scott.

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Speaker 1: For the markets, there's a lot of concern about that

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Speaker 1: addition to the federal deficit, the idea of a widening

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Speaker 1: of that deficit because of some deficiencies and pain for

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Speaker 1: some of those tax cuts. What is your message to the.

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Speaker 2: Market, Well, Roman, I'm not quite sure what you mean,

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Speaker 2: because stock markets had a new high and the bond

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Speaker 2: market just had its best six months in five years,

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Speaker 2: so I disagree with that. So I think the markets

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Speaker 2: are telling us that they liked the bill and that

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Speaker 2: they believe that it is fiscally prudent and stimulative for growth,

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Speaker 2: and importantly, I think we can get back to the

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Speaker 2: kind of growth that we saw in President Trump's term.

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Speaker 2: Two point eight three point two percent non inflationary growth,

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Speaker 2: which the Biden administration was not capable of.

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Speaker 3: Mister Secretary Matt Miller. Here, I'm wondering, as someone who

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Speaker 3: grew up with Alex P. Keaton, watching Milton Friedman on

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Speaker 3: Phil Donahue and always thinking we were on the wrong

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Speaker 3: side of the laugh or curve, why haven't these kind

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Speaker 3: of massive tax cuts worked to really stimulate growth in

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Speaker 3: the past, And they certainly haven't worked to replace the

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Speaker 3: amount of revenue that's taken out. We didn't see that

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Speaker 3: with the Reagan tax cuts. It didn't work out with

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Speaker 3: the Bush tax cuts, and it didn't work out with

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Speaker 3: the TCJA and twenty seventeen either. Why is it going

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Speaker 3: to work now?

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Speaker 2: Well, I would disagree with TCJA. TCJA was a work

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Speaker 2: in progress, and then we hit COVID, and I think

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Speaker 2: what's different here also, is we're going to be constraining spending.

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Speaker 2: I spend a lot of time with the Freedom Caucus

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Speaker 2: members and their constituents should be very proud of them.

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Speaker 2: They should be very proud of themselves. They change the

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Speaker 2: center of gravity of the debate. So we are both

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Speaker 2: going to stimulate the economy, pick up tax revenues, but

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Speaker 2: more importantly constrain and pull down spending.

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Speaker 3: So far, though, it looks like we're going to boost

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Speaker 3: deficits up to seven percent. You ran on this three

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Speaker 3: three three plan. Three percent deficit, three percent economic growth,

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Speaker 3: and three million barrels of oil, an increase of three

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Speaker 3: million barrels of oil a day in the US. Do

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Speaker 3: you expect to get to that by the end of

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Speaker 3: President Trump's term.

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Speaker 2: I do. I'm not sure where the seven percent number

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Speaker 2: is coming from, right, because I reject the CBO scoring.

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Speaker 2: But on the other side, the CBO also scored terriff

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Speaker 2: income at two point eight trillion, so you know that

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Speaker 2: substance that substantially increases government revenues. I think the growth

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Speaker 2: is going to be much higher, and I believe that

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Speaker 2: what we've done in constraining spending here is just the

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Speaker 2: first bite of the apple.

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Speaker 1: Do you anticipate, mister secretary, that the US government's financing needs,

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Speaker 1: the Treasury's financing needs will increase over the next couple

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Speaker 1: of years.

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Speaker 2: I think that we will see what happens to interest rates,

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Speaker 2: and there could be an increase in financing needs based

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Speaker 2: on yields. But everything that I'm seeing says that inflation

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Speaker 2: is under control and likely coming down.

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Speaker 1: There is, of course, the costs to finance that, and

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Speaker 1: we look at where yields have been, and we know

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Speaker 1: there's been a lot of volatility there some stability in

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Speaker 1: recent weeks, partly because of some of the things that

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Speaker 1: you've done and said publicly, but we've also seen a

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Speaker 1: little bit of reticence to buy into longer dated US treasuries.

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Speaker 1: I know you have been public about the idea, at

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Speaker 1: least in the short term, of relying a little bit

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Speaker 1: more on shorter term treasury issuance. Do you anticipate that

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Speaker 1: will continue?

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Speaker 2: Well, I think what we're going to see is one

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Speaker 2: of the underreported things of the One Big Beautiful Bill

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Speaker 2: is it also gets us away from this terrible debt

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Speaker 2: ceiling dilemma, and because of that, we've had to constrain issuance.

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Speaker 2: So it's likely that initially we will use bills to

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Speaker 2: refill the Treasury General account.

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Speaker 1: Do you worry about any potential rollover risk in that strategy.

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Speaker 2: No, I don't. We've seen very durable and robust treasury auctions.

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Speaker 2: I see who the buyers are. I think that we

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Speaker 2: are going to see US banks would take up more

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Speaker 2: of the debt issuance because of the supplementary supplementary leverage

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Speaker 2: ratio reliefs that they're going to be getting and were

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Speaker 2: going to pass the bill today. President Trump's going to

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Speaker 2: sign that tomorrow, and then probably the following week, we're

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Speaker 2: also going to have the stable coin legislation, which I

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Speaker 2: think could create at least two trillion in demand for

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Speaker 2: treasury bills.

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Speaker 1: We just want to just flag to our viewers right

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Speaker 1: now that the minority leader in the House of Representative,

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Speaker 1: jakeem Jefferies, does appear to be wrapping up his speech,

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Speaker 1: and based on procedures in the House of Representatives, this

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Speaker 1: means the floor would seed back to the Republicans Matt Miller,

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Speaker 1: who are are prepared to vote for this bill, a

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Speaker 1: bill that does appear to have the votes to.

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Speaker 3: Pass, right and a bill that at least according to

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Speaker 3: the CBO, is going to add another almost three trillion

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Speaker 3: dollars to the national debt. Right now, we're looking at

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Speaker 3: more than thirty six trillion dollars, mister Secretary, and I

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Speaker 3: know you take issue with the CBO's scoring and especially

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Speaker 3: the growth rates that they forecast out. Where do you

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Speaker 3: think we're going to see the national debt, for example,

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Speaker 3: at the end of President Trump's term in January of

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Speaker 3: twenty twenty nine, will it be lower than it is

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Speaker 3: right now?

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Speaker 2: Well, I think the growth is going to be much slower.

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Speaker 2: And one of the things that Secretary Yellen and I

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Speaker 2: agree on is not the absolute level of the debt,

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Speaker 2: it's the debt to GDP. So I think we are

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Speaker 2: going to see the debt to GDP well into the

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Speaker 2: nineties by the end of President Trump's term.

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Speaker 3: Well, we were talking with Stephen Myron this morning. He

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Speaker 3: expects that this bill will bring down the national debt

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Speaker 3: by between five and a half and eleven trillion dollars

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Speaker 3: ten years out. Does that make sense to you that

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Speaker 3: we could see a lower absolute number at the end

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Speaker 3: of the decade after this legislation has passed.

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Speaker 2: Well, again, I think that it's very difficult to predict

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Speaker 2: ten years out. But you just said that CBO expects

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Speaker 2: three trillion at the end of the window. But they've

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Speaker 2: also said that there's two point eight trillion in terraff

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Speaker 2: income that we didn't get scored. So a lot of

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Speaker 2: moving pieces here, but I'm confident that we're going in

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Speaker 2: the right direction.

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Speaker 1: So mister Secretary, I do want to get your thoughts

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Speaker 1: about just broader policies coming out of this administration, beyond

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Speaker 1: just this one big, beautiful bill that is now appears

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Speaker 1: to be advancing in Congress. There's been a lot of

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Speaker 1: questions in the market about what the administration's stances on

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Speaker 1: the dollar, whether there truly is a strong dollar policy,

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Speaker 1: or whether that policy, a long term policy of strong

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Speaker 1: dollar support, has shifted to something else.

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Speaker 2: Yes, I'm not sure why that is in the market.

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Speaker 2: The price of the dollar has nothing to do with

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Speaker 2: a strong dollar policy. Current currencies move up and down

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Speaker 2: based on a variety of factors. But a strong dollar

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Speaker 2: policy means several things. One is what is the dollar

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Speaker 2: strong against or other is another currency stronger higher in

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Speaker 2: price of the moment. That doesn't have anything to do

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Speaker 2: with a strong dollar policy. The strong dollar policy is

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Speaker 2: are we doing the things over the long term to

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Speaker 2: ensure that the US dollar remains a reserve currency of

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Speaker 2: the world. And we are. We are setting the stage

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Speaker 2: for economic growth, we are constraining inflation, we are making

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Speaker 2: the United States the best destination for global capital, and

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Speaker 2: I think that's going to continue to happen. I think

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Speaker 2: as a many times over since World War Two, the

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Speaker 2: demise of the dollar as reserve currency has been predicted,

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Speaker 2: and I think once again the skept is going to

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Speaker 2: be wrong, but there is no change in policy.

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Speaker 1: Fair enough, but I'm sure you understand that the weakness

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Speaker 1: that we've seen in the dollar to start the year

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Speaker 1: is something we have not seen in decades, and there

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Speaker 1: are other countries that have been trying to take advantage

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Speaker 1: of it. In a speech just this week, we heard

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Speaker 1: from the Chinese Central Bank governor who really laid out

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Speaker 1: at least their vision, the Chinese vision for a new

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Speaker 1: global currency order, which would of course mean a reduced

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Speaker 1: rule for the dollar and in their view, a greater

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Speaker 1: role for the Yuon Now, regardless of whether that is

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Speaker 1: a viable plan, I am curious as to what you

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Speaker 1: think about the idea that this is even being spoken

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Speaker 1: about publicly.

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Speaker 2: Well, I mean, look, what are the Chinese going to say?

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Speaker 2: And by the way, it's complete policy. They have a

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Speaker 2: non convertible currency, so how are they going to be

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Speaker 2: a reserve currency. They also have one point four billion

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Speaker 2: people who want to get their money out of China.

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Speaker 2: They have capital constraints on taking out taking out money.

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Speaker 2: The Sine Kwannon for a reserve currency is that it

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Speaker 2: trades freely. And I saw my friend Christian Legard, president

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Speaker 2: of the ECBs, the other day, said that maybe this

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Speaker 2: is the Euro's moment. But I can tell you if

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Speaker 2: the Euro hits one twenty, Europeans are going to be

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Speaker 2: squawking that it is too strong. They are an export economy,

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Speaker 2: so you know, let's see what happens. They should be

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Speaker 2: careful what they wish for, whereas in the United States

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Speaker 2: we recognize the responsibility that comes with being a reserve currency.

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Speaker 3: I want to ask about this Republican Party's shift, seeming

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Speaker 3: shift to support blue collar workers. We've seen a wage

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Speaker 3: boom among those people, an increase one point seven percent

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Speaker 3: in the first five months of President Trump's term, and

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Speaker 3: that's I think the fastest growth we've seen for that

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Speaker 3: segment since nineteen sixty nine. You talk about no tax

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Speaker 3: on tips, you talk about no tax on overtime. Why,

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Speaker 3: why do you think that this party has really shifted

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Speaker 3: to become the party of the blue collars.

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Speaker 2: Well, I'm going to correct you on that, because it's

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Speaker 2: the fastest we've seen since twenty seventeen. Previous to President

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Speaker 2: Trump was nineteen sixty nine, and look that this is

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Speaker 2: the party that delivers for working Americans. The Biden administration

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Speaker 2: wiped the floor with the bottom fifty percent of wage

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Speaker 2: earners that the great inflation. The official statistics were around

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Speaker 2: twenty percent for President Biden's term, but really for the

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Speaker 2: package of goods and services that working Americans buy, it

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Speaker 2: was well in excess of thirty percent, so there was

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Speaker 2: a real decrease in purchasing power. And President Trump's first

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Speaker 2: term we saw hourly workers, non supervisory workers wages increase

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Speaker 2: faster than supervisory workers. We saw the bottom fifty percent

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Speaker 2: of households have net worth gains in excess of the

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Speaker 2: top ten percent. And again my message here is parallel prosperity.

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Speaker 2: Both sides can do well, but we are focused on

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Speaker 2: Main Street catching up to Wall Street. But it doesn't

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Speaker 2: have to be one or the other.

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Speaker 3: At the same time, the CBO has projected that this

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Speaker 3: one big, beautiful Bill Act passing would result in seven

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Speaker 3: point eight million people being taken off the Medicaid rules.

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Speaker 3: They would lose their healthcare coverage, and we've seen also

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Speaker 3: projections that millions would lose snap benefits. We're talking about

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Speaker 3: you know, single mothers with children. We're talking about people

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Speaker 3: who have difficulty dealing with the untamable bureaucracy of government.

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Speaker 3: How can you make that kind of move with compassion.

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Speaker 2: Well, let's start at one point four our illegal aliens,

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Speaker 2: so they're not supposed to be receiving Medicaid benefits. The

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Speaker 2: approximately five million to six million are what we believe

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Speaker 2: are able bodied adults. So there's going to be a

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Speaker 2: twenty hour a week work requirement. And we are saying

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Speaker 2: that this needs to get back to the people who

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Speaker 2: Medicaid was meant for. It was meant for pregnant women,

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Speaker 2: it was meant for mothers, it was meant for children.

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Speaker 2: So we are focusing on the benefits for those who

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Speaker 2: need them and not be able bodied.

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Speaker 1: We're in conversation right now with the US Treasury Secretary

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Speaker 1: Scott Best In for our viewers worldwide, we should point

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Speaker 1: out that Speaker Mike Johnson is now on the floor

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Speaker 1: of the House of Representatives, presumably to move forward with

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Speaker 1: a formal and final vote on that tax and spend bill.

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Speaker 1: Mister Treasury, Mister Secretary, I am curious about what next

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Speaker 1: after this. We know that we ostensibly have this July

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Speaker 1: ninth deadline on trade, and I know it's going to

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Speaker 1: take several weeks, if not months, following that to really

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Speaker 1: start to hammer out some of these deals. Do you

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Speaker 1: anticipate that we're going to see additional deals and more

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Speaker 1: substantive deals pretty soon within the next few weeks.

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Speaker 2: I think we're going to see a flurry of deals

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Speaker 2: before July ninth. We'll see how the President wants to

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Speaker 2: treat those who are negotiating, whether he's happy that they're

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Speaker 2: negotiating in good faith. I think that we're going to

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Speaker 2: see about one hundred countries who just get the minimum

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Speaker 2: ten percent of reciprocal tariff and we'll go from there.

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Speaker 2: So I think we are going to see a lot

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Speaker 2: of action over the coming days.

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Speaker 1: Have you been directly involved in any of those negotiations

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Speaker 1: and it's so, are there specific provisions that those other

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Speaker 1: countries have been asking the US.

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Speaker 2: I'm not going to negotiate on international television, but.

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Speaker 1: I do want to negotiate.

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Speaker 2: Just tell us, well, yeah, sorry. What I would say

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Speaker 2: is some countries have come with or trading blocks, have

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Speaker 2: come with good deals, some would come with okay, some

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Speaker 2: would come with deals that are unacceptable, and we are

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Speaker 2: going to be announcing several deals. The President has the

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Speaker 2: final say. And what I can tell you is that

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Speaker 2: the career staff, whether it's a Treasury, Commerce USTR, are

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Speaker 2: all saying that they can't believe that these countries are

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Speaker 2: given up things that they haven't seen them offer in

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Speaker 2: the past two or three decades. So this is a

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Speaker 2: win for the American people. It's a win for fair trade.

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Speaker 3: Can I ask, just finally about the pressure the President

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Speaker 3: and others in administration have put on Jerome Palat to

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Speaker 3: cut rates. President Trump has asked now for three full

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Speaker 3: percentage points of cuts, three hundred basis points, and it

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Speaker 3: strikes me that that would either overheat the economy or

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Speaker 3: cause absolute chaos in the treasury market. Don't you think

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Speaker 3: it's important that the Federal Reserve operate with an amount

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Speaker 3: of independence?

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Speaker 2: Well, reserve does operate with the amount of independence, just

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Speaker 2: like a referee does out of the floor of the

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Speaker 2: basketball court. They're independent, but the coaches work the ref

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Speaker 2: all the time. President Trump is the most sophisticated president

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Speaker 2: economically perhaps in the past one hundred years. Perhaps. Ever,

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Speaker 2: I will note that in his first term he was

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Speaker 2: more right than the Fed was on when it was

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Speaker 2: time to cut rates. Bed normally followed later on. So

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Speaker 2: I think he's going to make his views known. And

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Speaker 2: I would also point out that the market agrees with

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Speaker 2: President Trump in terms of the direction, if not the

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Speaker 2: magnitude of the cuts.

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Speaker 3: Do you agree with President Trump that the FED should

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Speaker 3: cut by three percent in July?

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Speaker 2: I believe that I followed the market and the market

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Speaker 2: both for the rest of the year, and the two

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Speaker 2: year market is signaling cuts.

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Speaker 3: Well, we really appreciate your time, mister secretary. Thank you

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Speaker 3: so much for joining us, and I suppose I could

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Speaker 3: take congratulations on the big, beautiful built Treasury or Secretary

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Speaker 3: Scott Bessent talking to us here on an early edition

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Speaker 3: of The Close