Press Release: 2025-01-17
Warren Presses Treasury Secretary Nominee on Eliminating the Debt Limit, Tax Cuts for Billionaires
Warren: “[A debt default] would cost the U.S. economy $12 trillion and cost 6 million people their jobs… President-elect Trump said eliminating the debt limit is ‘The smartest thing Congress can do.’ And I would like for Congress to do the smartest thing.”
Warren: “[Republicans’] plan is to shovel new tax cuts to billionaires, and that would increase the debt by more than one trillion dollars, just in the next four-year period.”
Washington, D.C. – U.S. Senator Elizabeth Warren (D-Mass.), Ranking Member of the Senate Committee on Banking, Housing, and Urban Affairs and member of the Senate Committee on Finance, questioned Mr. Scott Bessent, nominee-designate for Secretary of the Treasury, on his views on repealing the debt limit and taxing the ultra-rich.
Mr. Bessent committed to working with Senator Warren and President-elect Trump on eliminating the debt limit if confirmed and if “[Trump] wants to eliminate the debt limit.” President-elect Trump said last month that he supports repealing the debt limit.
Senator Warren underscored that the cost of the United States defaulting on its debt would be “enormous,” cost the U.S. economy $12 trillion, and cause 6 million people their jobs.
Senator Warren also called out Republicans for their plan to raise the debt ceiling, instead of eliminating it altogether, to shovel new tax cuts to billionaires and increase the debt by more than one trillion dollars, just in the next four-year period.
Mr. Bessent refused to commit to raising taxes on any group of billionaires, even though the 2017 Trump tax cuts were mostly sucked up by millionaires, billionaires, and giant corporations.
“I like to think that fairness is about billionaires actually paying their fair share,” concluded Senator Warren.
Transcript: Hearing to Consider the Anticipated Nomination of Scott Bessent, of South Carolina, to be Secretary of the Treasury
Senate Committee on Finance
January 16, 2025
Senator Elizabeth Warren: Thank you, Mr. Chairman and welcome, Mr. Bessent, and welcome to your family. It’s good to see everyone here today.
So last month, President Trump said he supports repealing the debt limit. So do I. So there we are: Donald Trump and Elizabeth Warren are singing from the same hymnal.
Mr. Bessent, let’s make it a trio. Do you agree with President-elect Trump that the debt limit should be repealed?
Mr. Scott Bessent, nominee for Secretary of the Treasury: Senator Warren, first of all, I enjoyed our visit in your office and appreciate the fact that when I walked in, you said “let's talk about what we have in common”: our love of Cape Cod, the Red Sox, and addressing the affordability crisis and the housing shortage.
So, the debt limit is a very nuanced convention. What I would like to do is get back to you and President Trump. I would like to do a survey of market participants with this amount of debt. It is a very fragile equilibrium that we sell bonds in.
Senator Warren: Mr. Bessent, forgive me for just a minute here. I'm not asking whether or not we ought to increase our debt. I’m asking a very different question, and that is whether or not we should have a statute in place that says there’s a debt limit that if we don't increase the debt limit, would cause us to default. That’s not an economic analysis.
In fact, let me ask you. I understand earlier, you were citing the Congressional Budget Office. Have you seen the Congressional Budget Office projections of what would happen if the United States government defaulted its debt? That is, if we hit the debt limit and just kept on going without raising it or eliminating it.
Mr. Bessent: Look, Senator Warren, the United States is not going to default on its debt, if I'm confirmed, but, you know, I will tell you that for people who don't understand the debt limit, it might be like taking out your hand brake in your car. That you can still hit the brakes, but it is one less feature –
Senator Warren: But I thought you just said you’d never use it? So you’re talking about a hand brake that appears to be there, but in fact is not connected to a braking system. It is literally never used, right?
Mr. Bessent: I've never pulled the handbrake going 60 miles an hour in my car. I hope never to.
Senator Warren: And the reason for that, I assume, is the enormous cost of a debt default. In fact, Moody’s estimated that a debt limit breach would cost the U.S. economy $12 trillion and cost 6 million people their jobs. I think this is the reason that President-elect Trump said eliminating the debt limit is “The smartest thing Congress can do.” And I would like for Congress to do the smartest thing, and that is eliminate the debt limit, so we don't have this problem.
Mr. Bessent: Senator Warren, I will tell you that once President Trump takes office, and if I’m confirmed, if he wants to eliminate the debt limit, I will work with him and you on that.
Senator Warren: Great. Great, because I agree with President-elect Trump that the debt limit should be repealed. I know, however, right now that's not what congressional Republicans plan to do. Last month, they committed to raising the debt limit by another 1.5 trillion dollars.
So why do Republicans want to raise the debt ceiling? Because their plan is to shovel new tax cuts to billionaires, and that would increase the debt by more than one trillion dollars, just in the next four-year period. During his first term, President Trump's only major legislative achievement was his 2017 tax cuts, that mostly got sucked up by millionaires, billionaires, and giant corporations. Now, most of these cuts were good for only eight years, so that Republicans, who were designing them, could claim that the cost was “only” $2 trillion. Eight years of cuts that added $2 trillion to the debt. Now we’re talking about Republicans and President-elect Trump who want to give the same rich people and giant corporations more years of tax cuts.
And I just want to be clear that we understand each other here, that I think it was Senator Warnock who asked you about, is there any billionaire rich enough and who you wouldn’t support a tax cut for going forward?
Mr. Bessent: I think it’s unwise to single out –
Senator Warren: Rich people?
Mr. Bessent: Any individual.
Senator Warren: Ok. Is there any group of billionaires? You can just pick a dollar figure and there can be more than one of that.
Mr. Bessent: I could give you a glib answer, but I won’t. But again, that is not where the money is. At one point, when President Obama was debating Mitt Romney, the moderator said, “but sir, that would make collections go down,” and he said, “Yeah, but it’s about fairness.” And I have to tell you, Senator Warren, I’m about collections.
Senator Warren: I understand, but I like to think that fairness is about billionaires actually paying their fair share, too.