SENATE APPROPRIATIONS COMMITTEE
SUBCOMMITTEE HEARING WITH TREASURY SECRETARY BESSENT
For questions on the note below, please contact the Delta Strategy Group team.
On April 22, the Senate Committee on Appropriations Subcommittee on Financial Services and General Government held a hearing entitled “A Review of the President’s Fiscal Year 2027 Budget Request for the Department of the Treasury.” The witness in the hearing was Treasury Secretary Scott Bessent, with his testimony available here.
Below is a summary of the hearing prepared by Delta Strategy Group. It includes several high-level takeaways from opening statements and discussion.
Key Takeaways
- Subcommittee Chairman Hagerty (R-TN) raised how unequal, nonreciprocal trade policies have handicapped U.S. businesses, contributed to persistent trade deficits, eroded the domestic industrial base, and increased dependence on competitors like China for critical goods. He highlighted that the administration has taken significant steps to reset the global trade market by negotiating a multitude of international trade agreements and continuing to advance an America First agenda.
- Senator Boozman (R-AR) raised concerns from commodity groups that 24/7 trading in commodity derivatives could harm liquidity and price discovery in underlying real-world commodity markets. He called for engagement with stakeholders, especially commodity end-users and financial regulators, which Secretary Bessent agreed on.
- Senator Boozman discussed the designation of clearinghouses as systemically important financial market utilities (SIFMUs), noting that SIFMUs have access to Federal Reserve deposit accounts that help protect margin money collected from farmers and hedgers. In response to whether the needs of non-designated clearinghouses should be considered in such, Secretary Bessent agreed and said that the integrity of non-designated clearinghouses must be maintained.
- Treasury Secretary Bessent stated that the Treasury’s Fiscal Year 2027 (FY27) budget request reflects a commitment to strengthening the economy, boosting growth, and targeting illicit actors that threaten national security, all with a twelve percent decrease in funding from enacted levels. He referenced enhanced investments in cyber capabilities, sanctions, and combating illicit financial activity, including additional resources for the Treasury’s Office of Terrorism and Financial Intelligence to trace, detect, and sanction bad-faith financial networks. He also noted targeted investments to build expertise, particularly on digital assets and for implementation of the Guiding and Establishing National Innovation for U.S. Stablecoins (GENIUS) Act and its stablecoin framework.
- Senator Boozman emphasized the importance of passing bipartisan digital asset legislation, alongside reaching a bipartisan agreement to ensure the Commodity Futures Trading Commission (CFTC) is fully constituted and has adequate resources. Secretary Bessent stated that it is important for the U.S. to lead and that long-term leadership helps secure the primacy of the dollar as the reserve currency. He described how U.S. standards can shape global markets and bring digital assets from dark, unregulated places into a framework where anti-money laundering (AML) and know your customer (KYC) can provide greater oversight. He added that digital assets will be an important payment rail and that the U.S. should lead in both technology and payments.
- Subcommittee Chairman Hagerty stated that effective implementation of the GENIUS Act is vital to strengthening U.S. leadership in digital financial technology, commending Treasury for moving quickly on implementation and for building on the prior advance notice of proposed rulemaking. He emphasized providing clarity to help maintain U.S. leadership in digital assets, financial innovation, and reserve currency status through technology-neutral regulations and transparent decision-making. He highlighted Treasury’s proposed targeted budget resources for rulemaking, governance, innovation, and national leadership in digital assets and stablecoins.
- Subcommittee Ranking Member Reed (D-RI) questioned how higher gas prices and weak consumer sentiment, which he attributed to the Iran war and tariffs, would help solve affordability. Secretary Bessent responded that Americans were already facing a 21.5 percent CPI increase after the Biden years and that crude markets are in steep backwardation, with future prices lower than present levels. He said that gasoline prices should decline as the conflict ends and that the administration’s energy dominance agenda has helped lower prices.
- Senator Coons (D-DE) questioned whether sanctions relief increased oil revenue for Iran and Russia. Secretary Bessent rejected that claim, stating that Treasury’s actions created additional supply and that without the sanctions relief, oil prices could have reached $150. He outlined how the added supply pressured global crude prices lower, reducing Russian export revenues, as discounted Russian barrels at roughly eighty percent of benchmark prices would earn less in a $100 market than in a $150 market.