{"id":168618,"date":"2025-12-05T00:03:10","date_gmt":"2025-12-05T00:03:10","guid":{"rendered":"https:\/\/www.newsbeep.com\/il\/168618\/"},"modified":"2025-12-05T00:03:10","modified_gmt":"2025-12-05T00:03:10","slug":"tariffs-and-38-trillion-national-debt-hassett-sees-deficit-cuts-bessent-sees-shrinking-ice-cube","status":"publish","type":"post","link":"https:\/\/www.newsbeep.com\/il\/168618\/","title":{"rendered":"Tariffs and $38 trillion national debt: Hassett sees deficit cuts, Bessent sees \u2018shrinking ice cube\u2019"},"content":{"rendered":"

Kevin Hassett, director of the National Economic Council and the current favorite to take over as Federal Reserve chair, argued on Thursday that President Donald Trump\u2019s sweeping tariffs are playing a meaningful role in tackling America\u2019s $38 trillion national debt. In conversation with billionaire David Rubenstein<\/a>, a cofounder of the Carlyle Group<\/a>, Hassett said the first step to tackling the debt was to reduce it relative to target: \u201cAnd we clearly are doing that with the big reductions in the deficit right now.\u201d<\/p>\n

Hassett added that he\u2019s not only bullish about growth in the economy but \u201cthe fact that we have tariff revenue and we\u2019ve got a lot more spending restraint than was here in the past.\u201d He noted tariffs are an important part of Trump\u2019s economic policy and that \u201ca lot of the revenue coming into the Treasury\u201d is from tariffs. Hassett cast tariffs as part of a broader supply-side strategy he said he believes can boost growth, widen the tax base, and, over time, ease the debt burden.<\/p>\n

Just a day earlier, at the DealBook Summit in New York, Hassett\u2019s fellow cabinet member Treasury Secretary Scott Bessent had described tariff revenues as more like a \u201cshrinking ice cube<\/a>\u201d than a lasting fiscal fix. This aligned with the recent estimate from the Congressional Budget Office<\/a> that savings on the national debt had shrunk by $1 trillion between August and November, as trade deals resulted in a lower and lower effective tariff rate. Pantheon Macroeconomics found recently tariffs have brought in $100 billion less<\/a> than the White House first expected, with a plummet in imports from China the main reason. <\/p>\n

To be sure, the jump in tariff revenue from 2024 to 2025 is considerable, roughly triple or quadruple the level from the year before, as calculated by Apollo Global Management chief economist Torsten Slok<\/a> in September (as shown below). But Hassett\u2019s claim of spending restraint has been challenged by budget watchdogs, notably the Peter G. Peterson Institute<\/a> and Committee for a Responsible Federal Budget<\/a>, the former of which calculated the debt\u2019s growth by $1 trillion in just two months was the fastest-ever recorded outside of the pandemic. <\/p>\n

\"\"<\/p>\n

Bessent defended the tariff regime in his interview with the New York Times\u2019 Andrew Ross Sorkin, saying tariffs are currently bringing in substantial revenue, and they are \u201cgood for labor.\u201d He stressed the ultimate goal is to rebalance trade and rebuild domestic manufacturing, not to fund government permanently. \u200b <\/p>\n

Supreme Court watching<\/p>\n

The remarks from Bessent and Hassett come as the Supreme Court weighs whether Trump overstepped by using the 1977 International Emergency Economic Powers Act to impose tariffs far beyond past presidents\u2019 use of the law. Bessent said on Wednesday if the Supreme Court succeeds in throwing out many of the tariffs, it would be \u201ca loss for the administration\u201d and \u201ca loss for the American people.\u201d<\/p>\n

Regarding the Supreme Court, Hassett said the use of an economic emergency law was justified by the social damage from decades of large trade deficits and diminished well-being for American labor, as evidenced by \u201cdeaths of despair,\u201d often fentanyl-related. Hassett said the administration is confident the Supreme Court will uphold Trump\u2019s use of emergency powers to levy import charges. He also rejected the idea tariffs are inherently inflationary, calling them a one-time price shock rather than a persistent driver of rising prices, something that was echoed in Bessent\u2019s interview with Ross Sorkin.\u200b<\/p>\n","protected":false},"excerpt":{"rendered":"Kevin Hassett, director of the National Economic Council and the current favorite to take over as Federal Reserve…\n","protected":false},"author":2,"featured_media":168619,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[11],"tags":[114,184,85,46,23743,2635,12981],"class_list":{"0":"post-168618","1":"post","2":"type-post","3":"status-publish","4":"format-standard","5":"has-post-thumbnail","7":"category-economy","8":"tag-business","9":"tag-economy","10":"tag-il","11":"tag-israel","12":"tag-national-debt","13":"tag-scott-bessent","14":"tag-tariffs-and-trade"},"_links":{"self":[{"href":"https:\/\/www.newsbeep.com\/il\/wp-json\/wp\/v2\/posts\/168618","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.newsbeep.com\/il\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.newsbeep.com\/il\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/il\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/il\/wp-json\/wp\/v2\/comments?post=168618"}],"version-history":[{"count":0,"href":"https:\/\/www.newsbeep.com\/il\/wp-json\/wp\/v2\/posts\/168618\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/il\/wp-json\/wp\/v2\/media\/168619"}],"wp:attachment":[{"href":"https:\/\/www.newsbeep.com\/il\/wp-json\/wp\/v2\/media?parent=168618"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.newsbeep.com\/il\/wp-json\/wp\/v2\/categories?post=168618"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.newsbeep.com\/il\/wp-json\/wp\/v2\/tags?post=168618"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}