Bessent Says Trump Administration to Push Deficit Cuts by End-2026 if Democrats Win Midterms
US Treasury Secretary Scott Bessent said on Tuesday that if Democrats win either chamber in the November midterm elections, the Trump administration would seek to pass legislation by end-2026 to reduce the federal budget deficit. He noted a roughly two-month window from the November 3, 2026 election to the new Congress's swearing-in on January 3, 2027. Republicans currently control both chambers, and a Democratic victory would complicate Trump's legislative agenda. Bessent has also used unconventional measures to influence bond markets amid high long-term yields.
US Treasury Secretary Scott Bessent said on Tuesday that if Democrats win control of either chamber of Congress in the November midterm elections, the Trump administration would work to craft a plan to reduce the federal budget deficit through legislation by the end of 2026. Bessent noted that if Democrats prevail, making Trump a lame-duck president, the White House would need to introduce measures quickly and secure congressional approval within a short window—from the November 3, 2026 midterm election date to the swearing-in of new lawmakers on January 3, 2027, a period of roughly two months.
Republicans currently hold majorities in both the House and the Senate. If the party loses control of either chamber, Democrats would have an opportunity to block Trump's legislative agenda for the remainder of his term. With long-term US Treasury yields near their highest levels in decades, Bessent has resorted to unconventional measures to influence the bond market, including plans to expand the long-dated bond buyback program and an intervention to support the yen. Congress can shape Treasury tax policy through budget legislation and oversees the US debt ceiling, with the country currently carrying USD 40 trillion in debt.
Historically, the Treasury and the White House Office of Management and Budget have cooperated on administrative matters such as non-defense spending, IRS tax increases, anti-fraud efforts, debt issuance, and cash management, while more sensitive cuts to Social Security and Medicare benefits would require congressional action. Bessent has not yet disclosed many details about how the two agencies will cooperate, leaving it unclear how US healthcare and welfare programs and taxes will be affected going forward.