Scott Bessent Is Wrong About Deficit Reduction
No, Deficits are Not Rapidly Falling
(Originally published in The Dispatch)
One hallmark of the presidencies of Donald Trump is surging budget deficits. Another is repeatedly claiming that drastic deficit reduction is just around the corner. During his 2016 presidential campaign, Trump famously promised to pay off the entire $19 trillion national debt within eight years. Instead, the debt jumped by $8 trillion, thus missing his target by a mere $27 trillion.
A new Trump presidency has brought additional empty deficit reduction boasts. Before the election, he suggested that the budget deficit (and Social Security) could be fixed by selling oil and gas reserves. In a March address to Congress, Trump pledged to eliminate the entire $1.8 trillion budget deficit while offering no path to accomplish such a monumental task. Not to be outdone, DOGE director Elon Musk initially pledged to save $2 trillion from administrative reductions in waste, fraud, and abuse. Over the summer, Trump promised that tariff revenues would leave federal coffers so awash in money that tax rebates would be necessary. And now, Treasury Secretary Scott Bessent is claiming the budget is on “solid footing” toward his deficit target of 3 percent of GDP, thanks to substantial deficit reduction.
Unfortunately, Bessent’s deficit reduction boasts continue the trend of propaganda over progress. Tariffs are providing modest fiscal savings, although the deficit remains on track to continue rising steeply.
When Trump returned to office in January, the Congressional Budget Office was projecting the annual budget deficit to dip slightly, from $1.8 trillion to $1.7 trillion over the next few years, before climbing to $2.5 trillion annually within a decade. The CBO assumed that immediate savings from the scheduled expiration of the 2017 tax cuts, as well as a continued phase-down of pandemic spending, would eventually be overwhelmed by the sharply rising costs of Social Security, Medicare, and interest on the national debt.
Trump’s actions thus far have dramatically worsened these deficit projections. While the pandemic phase-down as well as Trump’s tariffs provided some modest savings, the 2025 deficit still came in at $1.8 trillion—about the level projected at the beginning of the year. Yet the One Big Beautiful Act (OBBBA), which extended those 2017 tax cuts and more, is scheduled to cost a staggering $4.2 trillion over the next decade—or $5 trillion if one assumes that Congress and the White House will once again extend the bill’s purportedly temporary provisions like a $40,000 cap on state-and-local tax deductions and no taxes on tips or overtime. In that likely scenario, the tax bill alone will add $589 billion to the 2034 budget deficit, which even aggressive, permanent tariffs could not come close to offsetting. Thus, the Trump administration has raised—not lowered—current and projected budget deficits relative to the baseline.
Nevertheless, Bessent claims that monthly budget deficits began collapsing in spring because “Revenues are soaring and government spending is under control” in ways that suggest substantial long-term deficit reduction. While it is true that tariffs have provided modest savings, Bessent drastically overstates his case by confusing timing shifts with major policy changes.