House Ways and Means Democrats took Treasury Secretary Scott Bessent to task over the trillions of dollars Republicans’ “big, beautiful” reconciliation bill would add to the national debt. 

Bessent appeared before the committee Wednesday to justify the administration’s fiscal 2026 budget request, spending much of his time praising and defending the budget reconciliation bill the House passed last month. 

Democrats repeatedly asked Bessent whether the bill would add to the deficit. The Congressional Budget Office estimated last week that the tax-and-spending cuts package would increase deficits by $2.4 trillion over 10 years.

“It remains to be seen” whether the bill will raise the debt, Bessent said. 

Democrats in response listed analysis after analysis from independent outside groups — including the Yale Budget Lab, University of Pennsylvania Wharton School, Bipartisan Policy Center, Committee for a Responsible Federal Budget and the Tax Foundation — that have found the legislation will increase the deficit by trillions of dollars.

“It strikes me that you are hell-bent on ignoring the warnings of any independent expert whose opinions may not serve your goals,” said Rep. Mike Thompson of California, top Democrat on the Ways and Means Tax Subcommittee.

Thompson pressed Bessent to name a single independent study conducted by a Ph.D. economist stating that the legislation would not increase the national debt. The Treasury secretary replied Arthur Laffer, a Reagan administration economist.

The economist is best known for the “Laffer curve” theory that somewhere between 0 and 100 percent there’s a tax rate that allows the government to maximize revenue. Under some circumstances that would mean the government could increase revenue by lowering tax rates and spurring economic growth. 

“I don’t think that one counts,” Thompson replied.

Republicans came to Bessent’s rescue, saying that the reconciliation package would be at least deficit neutral when economic growth is accounted for. Budget Chairman Jodey C. Arrington, R-Texas, said the Congressional Budget Office’s assumption of 1.8 percent economic growth is too conservative. Assuming 2.6 percent growth would yield $2.6 trillion in offsetting revenue, Arrington said. 

“That effect is we reduce the deficit and then some,” he said. 

‘Revenge tax’ defended

House Republicans used Bessent’s appearance as an opportunity to mount a defense of a provision in the reconciliation package that has provoked backlash on Wall Street and among multinational corporations. Business interests are urging Senate Republicans to remove the provision from the bill. 

The provision would increase taxes on foreign individuals, investors and businesses by up to 20 percent if their home countries impose “unfair” taxes on U.S. companies. The provision was intended to deter digital services taxes, as well as a Biden administration-endorsed effort by the Organization for Economic Cooperation and Development to establish a global minimum tax. 

Wall Street and foreign multinational companies have mobilized against the provision, urging Senate Republicans to strike it from the legislation. Business and investor interests have warned the provision would have a chilling effect on investment in the U.S. 

Bessent joined House Republicans in defending the provision, saying it would reclaim U.S. “fiscal sovereignty.”

“This bill will allow us to prevent our corporate revenues from being drained into foreign treasuries,” Bessent said. 

Tax filings up

Bessent also took a victory lap on a successful IRS tax filing season, while Democrats sparred with the Treasury secretary over the reasons behind the success. 

Tax receipts increased 9.5 percent in April and 14.7 percent in May compared to the same time last year. The results refuted predictions that the Trump administration’s cuts to agency staff would hamper tax collection and result in shortfalls of up to 10 percent, Bessent said. 

“Most remarkably, the president was able to achieve these results while reducing $2 billion in waste and planned [information technology] spending at the IRS,” Bessent said. He credited technological improvements for the performance. 

The Trump administration cut the agency’s workers by about 24 percent through the end of April with more staffing cuts planned, according to the IRS inspector general. The White House has proposed cutting the agency’s funding by $2.5 billion in fiscal 2026 compared to the fiscal 2025 discretionary spending level.

Democrats took credit for the agency’s filing season success, citing the boost in funding they provided the IRS through their 2022 budget law.  

“You’re suggesting that the improvements at the IRS have all taken place in the last six months. It’s because of what we did with the Inflation Reduction Act,” said ranking member Richard E. Neal D-Mass., using a common nickname for the 2022 law. “That’s why improvements have taken place.”

Democrats initially appropriated nearly $80 billion for the IRS in the 2022 law. Republicans have since clawed more than half of that spending back through rescissions in appropriations laws, and the Trump administration in its new budget request proposed rescinding another $16.5 billion. ​