KRISTEN WELKER: I want to turn now to Treasury Secretary Scott Bessent, who was in the chamber tonight listening to the President deliver his State of the Union address. Secretary Bessent, thank you so much for staying up late with us. We really appreciate it.
SEC. SCOTT BESSENT: Good to see you.
KRISTEN WELKER: Well, it's wonderful to have you here. Get your reaction to everything we just heard. In the run up to this speech, I spoke with a number of Republicans who say they wanted to hear President Trump express his empathy for Americans who don't feel like the economy is working for them, yet. We heard the President say that the economy is roaring. Do you think that he expressed empathy for those Americans who say they are still struggling?
SEC. SCOTT BESSENT: Kristen, I can tell you, the president never stops working for the American people, and I think he made the point that he has brought down prices. He has brought down mortgage rates, the large tax cuts. You know, I'm also the IRS commissioner. I can tell you the 47% of the returns we're getting Kristin have one of his four signature policies, no tax and tips, no tax and overtime, no tax on Social Security, deductibility of auto loans. So Americans are feeling that, and I think we will see we're going to have very large refunds, and Americans will change their withholding, and I think that they are going to see it. We saw a big jump way above expectations and consumer confidence today. Kristen, the important thing was it's in the forward expectations. So if the Democrats want to run on the economy in November. Bring it on, because I think we're going to have a great economy this year. We had a great economy last year. Fourth quarter would have been great if it weren't for the Democratic shutdown.
KRISTEN WELKER: Well and as you know, some prices have come down. Some prices, some groceries, for example, have gone back up. And if you look at the polling, the president's underwater on his handling of the economy, that critical issue. So what do you say to Americans who argue they're not feeling change fast enough?
SEC. SCOTT BESSENT: Well, I get Kristen, the President's numbers have been improving since October. Prices are coming down, and I think we're going to see an acceleration here. We've had real wage gains every month since the President's been in office. And again, of course, Americans are traumatized. They had 21.5% the cost of living increase the in the Biden administration, more for working Americans. That was probably north of 30, a loss of the three or 4% in real purchasing power inflation was up 2.7% last year. I think it's going to come back down to the Fed's target this year, and we're working every day to bring it down.
KRISTEN WELKER: Mr. Secretary, I have to ask you about this announcement that President Trump made. He said that the administration will give what he referred to as often forgotten American workers access to the same type of retirement plan offered to every federal worker vowing, quote, we will match your contributions up to $1,000 each year. Can you tell me, from a practical standpoint: how will this work? Does it need congressional approval, and is that possible in this election year?
SEC. SCOTT BESSENT: Well, we can do it through reconciliation. And again, this is the problem coming back for working those who have been left behind, the ones who don't have the 401(K)s, certainly the federal employees Congress get all these benefits, and we will be rolling that out in the coming weeks and months. The President wanted to preview it in his speech, but I think this is going to be a very big part of working Americans retirement program, because there is a tremendous amount of financial insecurity. The President also talked about his signature policy, Trump accounts $1,000 for every newborn born during his term that's going to be invested in the stock market. Kristen, currently, 38% of Americans have no exposure to the equity market, and we think, over time, this is going to remedy that, so everybody will have a stake in our great, innovative economy and the American dream.
KRISTEN WELKER: All right, let me turn now to tariffs. Obviously, a number of questions swirling around. What happens next after the Supreme Court did strike down the president ability to impose the tariffs? Let me ask you--
SEC. SCOTT BESSENT: Now Kristen, let's be precise here. What the Supreme Court did was rule against the President's ability to use a narrow, the mandate, IEEPA. It did not strike down the 232, or 301, tariffs, and it did not strike down his ability to the it actually reinforce his ability to move those up, and he has the ability to use something else called Section 122, so that's what the Supreme Court did on Friday. It was a very narrow ruling.
KRISTEN WELKER: And it's my understanding that these new tariffs that he's imposed, he can impose them, that the 15% tariffs that he announced over the weekend for 150 days, given the legal challenges, given the Supreme Court ruling, why not go to Congress? Republicans have the majority of both chambers and codify this in Congress?
SEC. SCOTT BESSENT: Because again, Kristen, I think what you the American people have been misled with the 232 and the 301s, Congress did give the president authority to put on tariffs. So what we're going to do is the 122s are a bridge for the 150 days, and then primarily with 301s, USTR will do studies. And those are country studies, and they will see, we will switch over to increase 301s. And I can tell you at Treasury, our estimate is that, using these increased authorities, the temporary bridge of 122, for 2026 the tariff income is virtually unchanged.
KRISTEN WELKER: So are you saying that these tariffs are going to be permanent, and that you think you have the legal authority to make these tariffs permanent? The 15% tariffs?
SEC. SCOTT BESSENT: Again, the, not the 15 Kristen. The 15 is 150-day authority. What we have the ability to do is to do studies and the 301s primarily, but also the 232s can move back up to the previous tariff level. And since President Trump's first term, the 301s and the 232s have proven very resilient. They've survived more than 4000 legal challenges,
KRISTEN WELKER: And let me just zoom out, is the goal to make tariffs, writ large, permanent?
SEC. SCOTT BESSENT: The goal is to reassure American industry and stop unfair trade practices.
KRISTEN WELKER: All right, let me ask you, because obviously one of the questions is about potential refunds. The President didn't say whether he's going to refund that what's been estimated to be about 100-- and let me, let me ask the question. Let me just ask you a question, because it's about $134 billion in revenue. You told me in September, quote, we would have to give a refund if the Supreme Court ruled against the tariffs and decided that was necessary, FedEx is now suing the administration for tariff refunds. If the court sides with FedEx, Mr. Secretary, is the administration prepared to offer those refunds?
SEC. SCOTT BESSENT: Well, Kristen, let's be clear here, the Supreme Court remanded the refunds back down to a lower court. There will be, a 42-day period before that even happens. And then we will see what the lower court says, and we will follow what the lower court says to do.
KRISTEN WELKER: So, meaning you, if the lower court says that you do have to issue these refunds. The administration is prepared to issue refunds?
SEC. SCOTT BESSENT: We will follow the ruling of the lower court, Kristen.
KRISTEN WELKER: And your reaction to this FedEx case?
SEC. SCOTT BESSENT: Well, I'll point out a lot of things. The CEO of FedEx is on the U.S.-China Business Council, which I find very interesting, because China that is the largest payer of you at U.S. tariffs. So take that for what you will. And the other thing too is, why don't we see if these corporations, I think all these corporations, should come out and tell everyone, the CEO of FedEx, you should have him on your show and have him explain how he's going to get the money the back to the consumers if he, in fact, passed those costs along.
KRISTEN WELKER: All right, let me ask you, broadly speaking, this speech was historic because it was the longest State of the Union address in history. It was also the first State of the Union address, according to our research, that was delivered against the backdrop of a partial government shutdown. Of course, as you know Mr. Secretary, Department of Homeland Security currently shut down over this battle over reforms to ICE. Now that the president has delivered his State of the Union address, do you think there can be a deal to reopen the government and is the president willing to make some concessions to Democrats to make that happen?
SEC. SCOTT BESSENT: Well we'll have to see Kristen. The Democrats are the party of shutdown. They have the, they were responsible for the longest shutdown in government history. It brought our GDP down in the fourth quarter between one and two percent. They've shown over and over again, they don't care about the American people, they don't care about the economy, they want what they want, and it will be up to the president to negotiate with them.
KRISTEN WELKER: But I guess the question is, and some Democrats say that the White House hasn't been negotiating. How long do you think this shutdown is going to last? Republicans are in control of both chambers and the White House.
SEC. SCOTT BESSENT: Again, you're in control, but are you going to say, Kristen, are you saying that Republicans should break the filibuster?
KRISTEN WELKER: Well you tell me, do you think Republicans? Do you think Republicans should break the filibuster? You tell me.
SEC. SCOTT BESSENT: You are not in control. I published The Washington Post op-ed saying that Republicans should break the filibuster because the Democrats have said they were going to do it. If it weren't for Joe Manchin and Kyrsten Sinema, who the Democrats sent home, they would’ve broken it in President Biden's terms. So in game theory when you have a bad actor who is repeatedly the play, been a bad actor, you should move first. So I actually think we should. I think we should do it for the SAVE Act and I think we shouldn't let the Democrats shutdown the government again.
KRISTEN WELKER: Mr. Secretary, you also sit on the National Security Council. I do want to ask you about Iran. We heard President Trump address that tonight. We know that he is considering whether to launch another military attack against Iran. There are critical talks taking place on Thursday. The president tonight saying his preference is for diplomacy. The President also saying Iran, the concern is working to build missiles that could reach the United States. Does the administration have evidence of that?
SEC. SCOTT BESSENT: Again, let's listen to what the president said, and the president's preference is always through peace. But it's important to realize Iran is the head of the snake for international chaos and disorder. They are the largest sponsor of state terrorism, whether it's in Venezuela, whether it's in the Middle East, and as the President said, and even many of the Democrats who sat on their hands for a lot of very important moments, they agreed with the president that Iran cannot have a nuclear weapon.
KRISTEN WELKER: All right, Mr. Secretary, usually you and I are talking on a Sunday morning. I appreciate your staying up very late with us tonight. Thank you so much.
SEC. SCOTT BESSENT: Okay, thank you.
