Treasury Secretary Bessent defends Trump economic record in contentious hearing

A contentious hearing is underway as Treasury Secretary Scott Bessent appears before the House Financial Services Committee for his annual testimony. Bessent on Tuesday struggled to get a word in as protesters and a leading House Democrat repeatedly talked over him.

"The strength of our economy has allowed the United States to wage the greatest economic isolation campaign in the history of the world against the Islamic Republic of Iran and its enablers," Bessent said in his opening statement. Bessent touted the success of the Iran war and rising wages for the lowest-income Americans. Protesters objecting to U.S. sanctions against Iran and Cuba broke in repeatedly.

Bessent is fielding questions about issues including inflation and energy prices and will likely be probed on interest rates and the federal debt.

Bessent's testimony is formally part of Congress' oversight of the International Monetary Fund, a Washington-based international organization that was established in 1944 to help ensure global financial stability. Bessent has criticized the organization as subject to mission creep, and his former chief of staff, Dan Katz, became its No. 2 official last year. The U.S. government's priority is "ensuring that American time and resources serve American interests," Bessent said.

Members of Congress used the secretary's appearance to ask questions about other issues.

Democrats are criticizing the Treasury secretary about the economy. The 10-year Treasury note traded at 5% as the hearing kicked off Tuesday morning. That has raised consumer borrowing costs. The 30-year fixed mortgage rate average topped 7% last week. 

"Despite your feeble efforts, there continues to be a sell-off of U.S. Treasuries," Rep. Maxine Waters, the ranking Democrat on the committee, told Bessent.

Bessent attempted to respond at length, but Waters, of California, held up her hand and said she was reclaiming her time.

Oil prices have risen above $100 a barrel as the Iran war has heated up again recently. That has pushed the price of gas in the U.S. to an average of $4.32 a gallon as of Monday, up $1.14 from a year ago, according to AAA. Diesel costs $6.23, up $2.54 over the past year. Bessent has been a full-throated supporter of the war. His department has ratcheted up sanctions on Iran and banks that facilitate its business.

Democrats may quiz Bessent about the pressure President Donald Trump is putting on Federal Reserve Chairman Kevin Warsh not to raise interest rates to deal with rising costs. The consumer price index is up 3.4% from a year ago, prompting investors to bet heavily on the Fed hiking rates. Trump, by contrast, has said the Fed should cut rates. Bessent is a longtime friend of Warsh's and by tradition meets weekly with the Fed's top official.

Bessent may also face scrutiny for the administration's fiscal track record. The national debt has ballooned past $40 trillion. The huge supply of debt combined with artificial intelligence spending and the surge in oil prices to hike funding costs for government debt.

Bessent and House Republicans can emphasize positive aspects of the Trump economy. Stocks have been volatile lately but remain near highs. The S&P 500 is up about 27% since Trump took office for his second term. 

The economy has also continued to produce jobs, while the administration slows immigration. Unemployment is low at 4.1%.

Bessent said wages for the bottom 25% of earners have risen faster than the top group of earners. More than 64 million tax returns have claimed one of the tax cuts passed last year, he said.

— Karen James Sloan contributed to this report.