Treasury Secretary Scott Bessent said the Trump administration would try to plan to lower the federal budget deficit through Congress by the end of this year if Democrats are able to flip either chamber in the November midterm elections.
Bessent said he is working with Office of Management and Budget Director Russ Vought to put together a fiscal consolidation plan that could potentially lower the U.S. federal budget deficit.
If Democrats win in the midterms, "we would have to rush that through a lame duck as opposed to being able to take more time," Bessent said, referring to the roughly two-month period between the elections on Nov. 3 and Jan. 3, 2027 — when new members of Congress take their seats.
U.S. deficits have risen in recent years including from Covid-era spending under the first Trump administration and the Biden administration that followed, as well as from the enactment of President Donald Trump's legislative priorities including his signature tax law.
Yet while Republicans currently control both the House and Senate, losing control of either chamber would mean Democrats could block President Donald Trump's legislative agenda for the remainder of his presidency.
With yields on longer-dated U.S. treasuries at their highest level in recent decades, Bessent has taken unorthodox moves to influence the bond markets, including the planned expansion of a buyback program of longer-dated bonds. He has also intervened to support the Japanese yen.
Bessent has not offered many public details about the consolidation plan, including if it would include cuts to U.S. health and entitlement programs like Medicare and Social Security, or plans to increase taxes. The U.S. government is on track to spend nearly $2 trillion more than it takes in revenue this year, according to the Congressional Budget Office.
