Treasury Secretary Scott Bessent explains why inflation is cooling and how Trump’s tax plan could revive prosperity.
The Treasury Department is touting progress in reducing federal spending since the presidency Donald Trump returned to the White House in January.
Treasury officials are touting data showing a decline in year-over-year federal spending growth from the last full year of the Biden administration. Trump administration data shows federal spending rose 7.1% annually in the second quarter of 2024, before accelerating to 28.5% in the third quarter and 10.9% in the fourth quarter.
In the first quarter of 2025, when the transition of power between the Biden and Trump administrations took place, spending rose 8.5% year over year. That slowing trend continued over the past two quarters, with federal spending rising just 0.2% in the second quarter of 2025 and falling 2.5% in the third quarter of the year, the Treasury Department said.
‘While all year round budget deficit was a positive surprise, coming in at $1.77 trillion for fiscal year 2025, or $41 billion less than the previous year, but this figure does not reflect the dramatic improvement within the year, especially on federal spending,” said Joe Lavorgna, advisor to Treasury Secretary Scott Bessent.
NATIONAL DEBT EXCEEDS $38 TRILLION MILESTONE FOR FIRST TIME IN U.S. HISTORY, AS SPENDING RISES
Treasury Secretary Scott Bessent and adviser Joe Lavornga have touted the Trump administration’s efforts to cut spending. (Magnus Lejhall/TT News Agency/AFP/Getty Images/Getty Images)
Lavorgna added that the “underlying trends point to a more significant improvement in U.S. finances immediately ahead.”
He added that the “last two quarters of Biden’s term accounting for an astonishing 74% of last year’s budget deficit,” which effectively left President Trump with a large deficit for the budget year, since the budget year was already half over when he took office.
CBO reports a federal deficit of $1.8 trillion, while debt costs reach a record $1 trillion
“Contrary to what everyone said, we had a lower deficit last year than the previous fiscal year,” Bessent said.
“Warren Buffett says, ‘When people ask you how to lose weight, eat less and exercise more.’ How do you manage the budget deficit? You spend less, keep expenses under control and grow more,” says Bessent.
US DEBT WILL RISE TO 120% OF GDP AS FEDERAL DEFICITS SPIRAL OVER THE NEXT DECADE, ACCORDING TO NEW PROJECTIONS
Bessent said he wants federal spending curbed to curb deficits. (Elizabeth Frantz/Reuters / Reuters Photos)
“If we can keep expenses low and grow at least 5%, maybe even higher than ours deficit to GDP‘, says Bessent.
‘The financial year ended with a five, compared to the 6.4%, the 6.5% that was the worst when we were not in a recession, not at war, and I think we can make substantial progress again.
“I hope next year we can be in the low fives or something with a four in it.”
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Bessent has previously said he would like to see the deficit ratio at around 3%, which would be a more sustainable level than what has happened in recent years.
