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Key Square Group founder Scott Bessent speaks at a campaign event for Republican presidential nominee and former US President Donald Trump in Asheville, North Carolina, US on August 14, 2024. REUTERS/Jonathan Drake/File Photo
US President-elect Donald Trump on Friday (November 23) picked hedge fund billionaire Scott Bessent as his pick for Secretary of the Treasury. If confirmed by the Senate, Bessent would be the first openly gay Treasury secretary.
In a statement posted on social media, Trump said, “Scott is widely respected as one of the World’s foremost International Investors and Geopolitical and Economic Strategists… 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”.
What is the role of Treasury secretary?
As the administration’s top economic official, the Treasury secretary is responsible for formulating and recommending domestic and international financial, economic, and tax policy.
They also participate in conceptualising fiscal policies that are significant for the country’s economy, and managing the public debt.
The Treasury secretary leads the Treasury Department, which oversees national banks, printing and minting all paper currency and coins, collecting taxes, enforcing tax and financial laws, and prosecuting tax evaders and financial criminals. They also serve on the President’s National Economic Council.
Who is Scott Bessent?
Bessent, a Yale graduate, is the CEO and Chief Investment Officer of New York-based hedge fund Key Square Capital Management. “He has also taught at Yale University, offering classes on economic booms and busts in the 20th century and the history of hedge funds”, according to a report by CBS News.
Notably, before becoming a fervent Trump supporter and his adviser, he donated to various Democratic initiatives in the early 2000s, including Al Gore’s presidential run. Bessent had also financially supported Barack Obama and Hillary Clinton.
In 2011, he was recruited by George Soros — a billionaire Democrat donor — to be the chief investment officer of his $30 billion Soros Fund Management. In fact, in 2015, Bessent took a $2 billion investment from Soros to start his Key Square fund.
How will Bessent lead the US Treasury?
If confirmed, Bessent is expected to immediately extend the provisions of the Tax Cuts and Jobs Act of 2017, which Trump signed into law during his first term — reports suggest that the costs of the various tax cuts range between $6 trillion and $10 trillion over 10 years.
In his recent interviews, Bessent has defended tariffs, which are on the top of Trump’s protectionist agenda, saying opposition to them is rooted in political ideology and not “considered economic thought”, according to a report by the BBC.
“But he has also characterised Trump’s support for such border taxes as a negotiating tool, suggesting the president-elect isn’t necessarily committed to aggressively raising duties. That stance makes him more moderate than others whose names were floated for the treasury role,” the report said.
Bessent has advised Trump to formulate a “3-3-3” policy, which includes slashing the budget deficit to 3% of GDP by 2028, pushing GDP growth to 3% through deregulation and extracting an extra 3 million barrels of oil each day, according to the Wall Street Journal.
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Bessent has also supported Trump’s embrace of the crypto industry and is expected to help the president-elect realise his goal of establishing the US as the “crypto capital of the planet”.
