On Sunday, Treasury Secretary Scott Bessent spoke to CNN's Jake Tapper about President Trump's tariff policies.
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00:00Well, Jake, first of all, the history of rating agencies, by the time they get to a downgrade,
00:05everything's already in the market. Larry Summers and I don't agree on everything,
00:09but in 2011, the last time or two times ago when he had a downgrade, he poo-pooed it.
00:17What I think is important is that President Trump has just come back from this historic
00:23Mideast trip, and there's trillions of dollars coming into the U.S., so we are seeing confidence
00:29from investors, so I don't put much credence in the Moody's. The downgrade comes as Republicans
00:35are trying to pass the big, beautiful bill, as the president calls it. It's a massive bill that has
00:41tax cuts, spending cuts. The nonpartisan committee for a responsible federal budget says that this
00:47bill, if it passes in its current form, will add between $3.3 and $5.2 trillion to the national
00:54debt over the next decade. Now, the debt is a concern of yours. You talked about our debt
00:59being on an unsustainable path earlier this month. Won't this bill just make it worse?
01:05There are several components there, and so if we unpack it, there is the growth, the potential
01:12growth of the debt, but what's more important is that we grow the economy faster, so what we
01:17what we've seen under the past four years, and what we inherited, I inherited 6.7% deficit
01:25to GDP, which was the highest deficit when we were not at war, not in a recession, so we've
01:31been trying to bring down the spending, and we are going to grow the revenue side, so we
01:37are going to grow the GDP faster than the debt grows, and that will stabilize the debt to GDP,
01:44which even Secretary Yellen and I agree is the most important number.
01:49So when in the first Trump administration, you were not a part of it, but obviously President
01:53Trump was, there were tax cuts passed, and the Committee for a Responsible Federal Budget
01:58says that those tax cuts added $2.5 trillion to the national debt and did not, I mean, there's
02:04always a hope that it will bring about so much revenue growth that it will pay for itself,
02:07but that didn't happen. Well, we also had something called COVID, and so there was a rescue plan.
02:15This is separate from that, though. I'm aware of the COVID trillions.
02:18Yeah, but the CBO scoring was about a trillion and a half off, and again, what matters is the
02:27growth, and during President Trump's first term, up until March of 2020, we had very high
02:34non-inflationary growth, and that's what I think we can have again this time.