HOUSE COMMITTEE ON WAYS & MEANS
HEARING WITH TREASURY SECRETARY BESSENT
For questions on the note below, please contact the Delta Strategy Group team.
On June 4, the House Committee on Ways and Means held a hearing with Treasury Secretary Bessent, with his testimony here.
Below is a summary of the hearing prepared by Delta Strategy Group, which includes several high-level takeaways from opening statements and discussion.
KEY TAKEAWAYS
Digital Assets and Financial Innovation
- Secretary Bessent committed to working with Congress on comprehensive digital asset tax legislation, stating tax certainty is the key to innovation.
- Representative Miller (R-OH) discussed the Digital Asset Parity (PARITY) Act to address phantom income and tax-as-cash hurdles for businesses and investors.
- The Ways and Means Committee will hold a hearing next week on digital asset taxation policy.
- Secretary Bessent expressed support for passing the Digital Asset Market Clarity (CLARITY) Act by the Fourth of July.
OECD Side-by-Side Agreement and International Tax
- The side-by-side agreement largely exempts U.S.-headquartered multinational enterprises from the Organization for Economic Cooperation and Development’s (OECD’s) income inclusion rule and undertaxed payments rule.
- Treasury is pushing back on digital services taxes (DST) in trade negotiations, regardless of the country involved.
Economy, Inflation, and Cost of Living
- The White House asked Congress to eliminate the gas tax through statute.
- Secretary Bessent cited 2.6 percent gross domestic product (GDP) growth over the past four quarters and real wage increases every month except April.
- Bessent said that food at home inflation is up 2.5 percent since President Trump took office, compared to an average of five percent annually under the Biden administration.
- Democratic members cited polling showing over seventy percent of Americans disapprove of the administration’s handling of the economy.
Deficit Reduction and National Debt
- Secretary Bessent reiterated his goal of a deficit at or below three percent of GDP by the end of President Trump’s term.
Iran Sanctions and Geopolitical Risk
- Secretary Bessent confirmed the administration is not considering lifting sanctions on Iran as a concession toward opening the Strait of Hormuz.
- Future sanctions waivers on Russian seaborne oil will likely be country-specific rather than generalized.
Working Families Tax Cuts Act and Tax Administration
- Over 62 million filers claimed at least one of President Trump’s signature tax policies.
- Total refunds increased 18 percent, with the average refund up over 11 percent.
- Permanence in the tax code was cited as a key driver of business investment and job creation.
- Secretary Bessent said the factory expensing provision, set to expire at the end of 2029, should be extended or made permanent.
Trump-IRS Settlement and Congressional Oversight
- Secretary Bessent declined to answer most questions on the settlement, citing ongoing litigation.
- Multiple Democratic members stated that the settlement grants the President, his family, and his businesses unprecedented immunity from audits and tax enforcement.
OPENING STATEMENTS
Chairman Smith (R-MO)
The President’s tax and trade policies work hand in glove to fuel the economic investment that creates great-paying jobs. Reciprocal trade agreements have secured $10 trillion in investment commitments in leading industries, opened new markets formally hostile to U.S. exports, and made our trading relationships fairer for American workers, farmers, manufacturers, and producers. U.S. producers exported a record $3.4 trillion last year, and in the first three months of this year, U.S. exports were over $300 billion each month, the highest in 250 years of our country’s history. The U.S. is becoming less dependent on China. Our trade deficit with China fell 32 percent last year to the lowest level since 2004. The Chinese recently agreed to purchase at least $17 billion annually in U.S. agricultural products through 2028. President Trump and Republicans in Congress repealed the de minimis privilege that benefited Chinese companies shipping products and undercutting U.S. producers and manufacturers. Our economic security is a cornerstone of our national security and must not be abused by bad actors. Our tax policies must continue to make our economy the most competitive for innovative sectors of the future, including digital assets and the over 60 million Americans who own cryptocurrency. The U.S. needs clear, modern tax rules to ensure we remain the crypto capital of the world.
Ranking Member Neal (D-MA)
Seventy percent of the American people disagree with the economic direction the country has taken. Between the tariffs and the Iran war, prices are rising faster than they have in years. When we look at this economy, we see failure upon failure. The proposed policies have not worked for average Americans. Families are being crushed, and we suggest today that a new course of action be taken.
Secretary Bessent
President Trump’s economic agenda is bolstered by two distinct and reinforcing levers: trade and deregulation. Over the last 12 months ending March 2026, the trade deficit for goods declined by $370 billion compared to the same timeframe ending March 2025. The economy has added 313,000 net private-sector jobs and 13,000 manufacturing jobs in the past two months. Firm capital expenditures rose at an annual rate of over 17 percent in the first quarter, and companies are investing trillions to build and expand in the U.S. Properly calibrated regulation is essential for economic growth, capital formation, employment, and higher wages. At the outset of this administration, President Trump set the benchmark of slashing ten existing regulations before issuing a single new one. In 2025, we shattered that goal with a ratio of 129 to one. As a result, the regulatory actions generated more savings last year than the prior Trump Administration did combined. Together, our initiatives on trade, tax cuts, and deregulation are transformative. Before President Trump took office, trading partners exploited America’s markets, our regulatory state smothered businesses, and our tax code was poised to punish workers and job creators. President Trump’s policies are driving lower taxes, bigger paychecks, and broader prosperity.
SUMMARY
Digital Assets and Financial Innovation
Chairman Smith announced a hearing next week on digital asset taxation, and Representative Miller discussed his bipartisan bill, the PARITY Act, with Representative Horsford (D-NV) to address phantom income and tax-as-cash hurdles. Secretary Bessent committed to working with both members on the legislation, stated that Treasury’s goal is to onshore digital assets and establish U.S. standards as the global benchmark, and expressed support for passing the CLARITY Act by the Fourth of July, noting he had been on the phone with relevant members that week.
Representative Miller raised the application of Section 1058-like treatment to digital asset lending, asking whether formally recognizing digital asset lending as analogous to securities lending could move digital assets from a speculative asset class to a functional part of institutional financial infrastructure. Secretary Bessent said he would get back to Miller with a data-informed opinion.
Representative LaHood (R-IL) raised concerns about Chinese penetration of companies receiving the Section 45X tax credit, noting reports of Chinese engineers overseen by Chinese Communist Party security officers embedded in U.S. facilities. Secretary Bessent said Treasury is polling companies for verification and investigating any reports received and pointed to the Federal Communications Commission (FCC) action on Chinese drones and routers, as well as the connected vehicle mandate as evidence of the broader effort.
Representative LaHood also raised DSTs with Canada, and Secretary Bessent said Treasury is pushing back in every trade negotiation, whether it is with Canada, Europe, Turkey, Brazil, or India, stating the U.S. cannot allow foreign governments to siphon revenue from U.S. companies.
OECD Side-by-Side Agreement and International Tax
Chairman Smith, Representatives Estes (R-KS) and Moran (R-TX) highlighted the Treasury’s side-by-side agreement with the OECD as a win for U.S. tax sovereignty. Secretary Bessent explained that the agreement ensures tax revenue flows into the U.S. Treasury rather than foreign treasuries and that Treasury is in constant engagement with the OECD to monitor implementation.
Representative Estes also raised concerns about countries, including Germany, Italy, and Mexico, weaponizing tax audits and threatening criminal charges against U.S. companies, and Secretary Bessent said the administration will use every tool available to ensure competitive treatment for U.S. businesses on the world stage.
Economy, Inflation, and Cost of Living
Multiple Democratic members challenged Secretary Bessent on the administration’s economic record. Members raised concerns about rising prices for groceries, gas, energy, and health care, with several citing polling showing over seventy percent of Americans disapprove of the administration’s handling of the economy and consumer sentiment at its lowest level since 1952. Secretary Bessent consistently responded that the U.S. economy has grown at 2.6 percent over the past four quarters, that food at home inflation is up only 2.5 percent since President Trump took office compared to an average of five percent annually under the Biden administration, and that real wage increases have occurred every month except April.
When members raised gas prices, Secretary Bessent acknowledged the Iran conflict has caused prices to rise, but said he believes the increase is temporary and that crude prices are already down more than twenty percent from their peak.
Representative Larson (D-CT) questioned Secretary Bessent on whether the White House supports eliminating the gas tax, and Secretary Bessent stated the White House has asked Congress to move on elimination through statute.
Deficit Reduction and National Debt
Secretary Bessent reiterated his goal of achieving a deficit at or below three percent of GDP by the end of President Trump’s term, noting the deficit came down from 6.9 percent to 5.5 percent in 2025, representing a fiscal contraction even as the economy grew. Representative Schweikert (R-AZ) raised the importance of convincing bond markets that the U.S. is serious about fiscal discipline, and Secretary Bessent said Treasury will maintain a regular and predictable issuance cadence and that assuring both U.S. households and foreign central banks of fiscal seriousness is essential to keeping interest rates manageable.
Iran Sanctions and Geopolitical Risk
Multiple Republican members defended the administration’s conflict with Iran as a necessary national security investment. Secretary Bessent agreed, stating that a nuclear-armed Iran permanently closing Middle East energy flows would cause far greater economic damage than any temporary price increase.
Representative Schneider (D-IL) asked Bessent to confirm that the administration is not considering lifting sanctions on Iran as a concession to open the Strait of Hormuz, and Bessent said the only thing that will be lifted to reopen the strait is the blockade itself, with no sanctions relief being contemplated.
Representative Fitzpatrick (R-PA) raised the Peace Through Strength Against Russia Act and asked about safeguards preventing Russia from using sanctions waivers on seaborne oil to fund its war against Ukraine. Secretary Bessent noted Russia’s oil would go to China regardless, and the current waivers have kept global energy prices lower while helping energy-vulnerable allies. He further added that future waivers will likely be country-specific rather than generalized.
Working Families Tax Cuts Act and Tax Administration
Multiple Republican members outlined how the Working Families Tax Cuts Act is a historic legislative achievement. Secretary Bessent noted throughout the hearing that over 62 million filers claimed at least one signature policy, that ninety percent of filers claiming no tax on tips made less than $100,000, that 75 percent of filers claiming no tax on overtime made less than $100,000, and that 68 percent of seniors claiming the enhanced deduction had incomes under $100,000.
On permanence, multiple Republican members emphasized that making the Section 199A pass-through deduction, full expensing for equipment and factories, and the child tax credit permanent was one of the most important elements of the law. Secretary Bessent described what he called the slingshot effect, explaining that while full expensing reduces near-term tax revenue, it builds productive capacity that accelerates a stream of future corporate income tax receipts.
Trump-IRS Settlement and Congressional Oversight
Secretary Bessent stated that Acting Attorney General Blanche has stated the government will not move forward with the anti-weaponization fund and that Treasury intends to comply with that direction.
Multiple Democratic members repeatedly raised the Trump-IRS settlement, with several Representatives challenging Bessent on the agreement’s substance. Secretary Bessent declined to address most questions throughout, consistently citing ongoing litigation and directing members to Acting Attorney General Blanche and the Department of Justice.