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00:00Great to have you here on the program. Let's start off with the bill. I know we are still
00:03awaiting a vote, a vote that is likely to occur today. And of course, a signing that the president
00:08himself has said he would like to get done tomorrow on July 4th. As you then fan out after
00:14July 4th to sell this bill to the public and more importantly, to implement some of the provisions,
00:19what is your number one priority? Number one priority is making sure the American speak,
00:26American people understand that this bill is the route to parallel prosperity. It is the best of
00:33what we saw in the 2017 Tax Cuts and Job Act, along with President Trump's campaign promises,
00:41no tax on tips, no tax on overtime. 85 percent of seniors will not be paying tax on Social Security
00:48and the deductibility of auto loans if the car is made in the United States. It also funds
00:55the president's agenda in terms of defense, border and school choice.
01:00There's salesmanship that you and for that matter, the other cabinet members will have to do to the
01:05public. But there's also salesmanship that you have to do here, Scott, for the markets. There's a lot
01:10of concern about that addition to the federal deficit, the idea of a widening of that deficit
01:15because of some deficiencies in paying for some of those tax cuts. What is your message to the market?
01:20Well, Romain, I'm not quite sure what you mean because the stock market set a new high
01:26and the bond market just had its best six months in five years. So I disagree with that. So I think
01:35the markets are telling us that they like the bill and that they believe that it is fiscally prudent
01:43and stimulant for growth. And importantly, I think we can get back to the kind of growth
01:48that we saw in President Trump's term, 2.8, 3.2 percent non-inflationary growth, which the Biden
01:57administration was not capable of. Mr. Secretary, Matt Miller here. I'm wondering,
02:03as someone who grew up with Alex P. Keaton, watching Milton Friedman on Phil Donahue and always
02:09thinking we were on the wrong side of the Laffer curve, why haven't these kind of massive tax cuts
02:14worked to really stimulate growth in the past? And they certainly haven't worked to replace the
02:20amount of revenue that's taken out. We didn't see that with the Reagan tax cuts. It didn't work out
02:25with the Bush tax cuts. And it didn't work out with the TCJA in 2017 either. Why is it going to work
02:31now? Well, I would disagree with TCJA. TCJA was a work in progress. And then we hit COVID. And I think
02:41what's different here also is we're going to be constraining spending. I spend a lot of time with
02:48the Freedom Caucus members and their constituents should be very proud of them. They should be very
02:54proud of themselves. They changed the center of gravity of the debate. So we are both going to
03:00stimulate the economy, pick up tax revenues, but more importantly, constrain and pull down spending.
03:07So far, though, it looks like we're going to boost deficits up to 7 percent. You ran on this 3-3-3
03:14plan, 3 percent deficit, 3 percent economic growth and 3 million barrels of oil, an increase of 3
03:21million barrels of oil a day in the U.S. Do you expect to get to that by the end of President Trump's
03:26term? I do. And I'm not sure where the 7 percent number is coming from, right? Because I reject the
03:34CBO scoring. But on the other side, the CBO also scored tariff income at $2.8 trillion. So, you know,
03:41that substantially increases government revenues. I think the growth is going to be much higher.
03:50And I believe that what we've done in constraining spending here is just the first bite of the apple.
03:58Do you anticipate, Mr. Secretary, that the U.S. government's financing needs, the Treasury's
04:02financing needs will increase over the next couple of years? I think that we will see what happens to
04:12interest rates. And there could be an increase in financing needs based on yields. But everything
04:20that I'm seeing says that inflation is under control and likely coming down.
04:27There's, of course, the cost to finance that. And we look at where yields have been. And we know there's
04:33been a lot of volatility there, some stability in recent weeks, partly because of some of the things
04:38that you've done and said publicly. But we've also seen a little bit of reticence to buy into longer
04:45dated U.S. Treasuries. I know you have been public about the idea, at least in the short term,
04:51of relying a little bit more on shorter term Treasury issuance. Do you anticipate that will continue?
04:57Well, I think what we're going to see is one of the underreported things of the one big beautiful bill
05:03is it also gets us away from this terrible debt ceiling dilemma. And because of that,
05:11we've had to constrain issuance. So it's likely that initially, we will use bills to refill
05:18the Treasury general account. Do you worry about any potential rollover risk in that strategy?
05:25No, I don't. We've seen very durable and robust Treasury auctions. I see who the buyers are. I
05:36think that we are going to see U.S. banks would take up more of the debt issuance because of the
05:46supplementary leverage ratio relief that they're going to be getting. And we're going to
05:54pass the bill today. President Trump's going to sign that tomorrow. And then probably the following
06:00week, we're also going to have the stable coin legislation, which I think could create at least
06:08two trillion in demand for Treasury bills. We just want to just flag to our viewers right now that
06:14the minority leader in the House of Representatives, Hakeem Jeffries, does appear to be wrapping up his
06:19speech. And based on procedures in the House of Representatives, this means the floor would cede
06:24back to the Republicans, Matt Miller, who are prepared to vote for this bill, a bill that does
06:30appear to have the votes to pass. Right. And a bill that, at least according to the CBO, is going to
06:36add another almost three trillion dollars to the national debt. Right now, we're looking at more than
06:42thirty six trillion dollars, Mr. Secretary. And I know you take issue with the CBO's scoring and
06:47especially the growth rates that they forecast out. Where do you think we're going to see the
06:53national debt? For example, at the end of President Trump's term in January of twenty twenty nine, will
06:58it be lower than it is right now? Well, I think the growth is going to be much slower. And one of
07:04the things that Secretary Yellen and I agree on is not the absolute level of the debt. It's the debt to
07:10GDP. So I think we are going to see the debt to GDP well into the 90s by the end of President Trump's
07:18term. Well, we were talking to Stephen Myron this morning. He expects that this bill will bring down
07:24the national debt by between five and a half and eleven trillion dollars ten years out. Does that make
07:30sense to you that we could see a lower absolute number at the end of the decade after this legislation
07:37has passed? Well, again, I think that it's very difficult to predict ten years out. But, you know,
07:44you just said that CBO expects three trillion at the end of the window. But they've also said that
07:53there's two point eight trillion in tariff income that we didn't get scored. So a lot of moving pieces
07:58here. But I'm confident that we're going in the right direction. So, Mr. Secretary, I do want to get
08:04your thoughts about just broader policies coming out of this administration beyond just this one
08:09big, beautiful bill that is now appears to be advancing in Congress. There's been a lot of
08:15questions in the market about what the administration stance is on the dollar, whether there truly is a
08:22strong dollar policy or whether that policy, a long term policy of strong dollar support has shifted
08:28to something else. I'm not sure why why that is in the market. The price of the dollar has nothing to do
08:37with a strong dollar policy. Current currencies move up and down based on a variety of factors. But a strong
08:45dollar policy means several things. One is what it what is the dollar strong against or is the other is
08:54another currency stronger higher in price at the moment. That doesn't have anything to do with a
09:00strong dollar policy. The strong dollar policy is are we doing the things over the long term to ensure
09:07that the U.S. dollar remains the reserve currency of the world. And we are. We are setting the stage for
09:15economic growth. We are constraining inflation. We are making the United States the best destination
09:22for global capital. And I think that's going to continue to happen. I think, as I said, you know,
09:30many times over since World War Two, the demise of the dollar as reserve currency has been predicted.
09:38And I think once again, the skeptic is going to be wrong. But there is there is no change in policy.
09:44Fair enough. But I'm sure you understand that the weakness that we've seen in the dollar to start the
09:49year is something we have not seen in decades. And there are other countries that have been trying
09:53to take advantage of it. In a speech just this week, we heard from the Chinese central bank governor
09:58who really laid out at least their vision, their Chinese vision for a new global currency order,
10:04which would, of course, mean a reduced role for the dollar and, in their view, a greater role for the
10:09yuan. Now, regardless of whether that is a viable plan, I am curious as to what you think about the idea
10:15that this is even being spoken about publicly. Well, I mean, look, what are the Chinese going
10:21to say? And by the way, it's complete fallacy. They have a non convertible currency. So how are
10:28they going to be a reserve currency? They also have one point four billion people who want to get their
10:34money out of China. They have capital constraints on taking up taking up money. The sine qua non for
10:43a reserve currency is that it trades freely. And I saw my friend Christian Lagarde, president of the ECBs the
10:52other day, said that maybe this is the euro's moment. But I can tell you if the euro hits 120, Europeans are going
10:59to be squawking that it is too strong. They are an export economy. So let's see what happens. They should be careful what
11:06they wish for. Whereas in the United States, we recognize the responsibility that comes with being
11:12a reserve currency. I want to ask about this Republican Party's shift, seeming shift to support
11:19blue collar workers. We've seen a wage boom among those people, an increase of 1.7 percent in the first
11:27five months of President Trump's term. And that's, I think, the fastest growth we've seen for that segment
11:32since 1969. You talk about no tax on tips. You talk about no tax on overtime. Why do you think that
11:41this party has really shifted to become the party of the blue collar? Well, I'm going to correct you on
11:47that because it's the fastest we've seen since 2017. Previous to President Trump was 1969. And look,
11:56that this is the party that delivers for working Americans. The Biden administration wiped the floor
12:04with the bottom 50 percent of wage earners. That the great inflation, the official statistics were
12:12around 20 percent for President Biden's term. But really, for the package of goods and services that
12:18working Americans buy, it was well in excess of 30 percent. So there was a real decrease in purchasing
12:25power. In President Trump's first term, we saw hourly workers, non-supervisory workers, wages increase
12:32faster than supervisory workers. We saw the bottom 50 percent of households have net worth gains in
12:40excess of the top 10 percent. And again, my message here is parallel prosperity. Both sides can do well,
12:48but we are focused on Main Street catching up to Wall Street. But it doesn't have to be one or the other.
12:54At the same time, the CBO has projected that this one big, beautiful bill act passing would result in
13:027.8 million people being taken off the Medicaid rolls. They would lose their health care coverage.
13:09And we've seen also projections that millions would lose SNAP benefits. We're talking about,
13:15you know, single mothers with children. We're talking about people who have difficulty dealing with the
13:19untamable bureaucracy of government. How can you make that kind of move with compassion?
13:29Well, let's start. 1.4 are illegal aliens. So they're not supposed to be receiving Medicaid benefits.
13:38The approximately 5 million to 6 million are what we believe are able-bodied adults. So there's going
13:46to be a 20-hour-a-week work requirement. And we are saying that this needs to get back to the people
13:56who Medicaid was meant for. It was meant for pregnant women. It was meant for mothers. It was meant for
14:02children. So we are focusing on the benefits for those who need them and not the able-bodied.
14:09We're in conversation right now with the U.S. Treasury Secretary Scott Besson. For our viewers
14:13worldwide, we should point out that Speaker Mike Johnson is now on the floor of the House of
14:18Representatives, presumably to move forward with a formal and final vote on that tax and spend bill.
14:25Mr. Treasury, Mr. Secretary, I am curious about what comes next after this. We know that we ostensibly
14:32have this July 9th deadline on trade. And I know it's going to take several weeks, if not months,
14:37following that to really start to hammer out some of these deals. Do you anticipate that we're going
14:42to see additional deals and more substantive deals pretty soon within the next few weeks?
14:49I think we're going to see a flurry of deals before July 9th. We'll see how the president wants to
14:55treat those who are negotiating, whether he's happy that they're negotiating in good faith.
15:01I think that we're going to see about 100 countries who just get the minimum 10 percent
15:09of reciprocal tariff and we'll go from there. So I think we're going to see a lot of action
15:17over the coming days.
15:20Have you been directly involved in any of those negotiations? And if so,
15:23are there specific provisions that those other countries have been asking the U.S.?
15:28Well, I'm not going to negotiate on international television, but I will say-
15:34You don't have to negotiate. Just tell us.
15:36Well, yeah, sorry.
15:40What I would say is some countries have come with, or trading blocks have come with good deals.
15:47Some have come with okay. Some have come with deals that are unacceptable. And we are going to be
15:55announcing several deals. The president has the final say. And what I can tell you is that the career
16:04staff, whether it's a Treasury, Commerce, USTR, are all saying that they can't believe that these
16:11countries are giving up things that they haven't seen them offer in the past two or three decades.
16:17So this is a win for the American people. It's a win for fair trade.
16:21Can I ask just finally about the pressure the president and others in the administration have
16:26put on Jerome Powell to cut rates? President Trump has asked now for three full percentage points
16:33of cuts, 300 basis points. And it strikes me that that would either overheat the economy or cause
16:40absolute chaos in the Treasury market. Don't you think it's important that the Federal Reserve
16:45operate with an amount of independence? Well, the Federal Reserve does operate with an amount of
16:52independence, just like a referee does out of the floor of the basketball court. They're independent,
16:58but the coaches work the ref all the time. President Trump is the most sophisticated
17:04president economically, perhaps in the past hundred years, perhaps ever. I will note that in his first
17:13term, he was more right than the Fed was on when it was time to cut rates. The Fed normally followed
17:21later on. So I think he's going to make his views known. And I would also point out that the market
17:31agrees with President Trump in terms of the direction, if not the magnitude of the cuts. Do you agree with
17:37President Trump that the Fed should cut by three percent in July? I believe that I followed the
17:44market and the market both for the rest of the year and the two year market is signaling cuts.
17:51Well, we really appreciate your time, Mr. Secretary. Thank you so much for joining us. And I suppose I
17:57could say congratulations on the big, beautiful bill, because it does look like that legislation is
18:01going to go through Treasury Secretary Scott Besant talking to us here on an early edition of the close.
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