US Treasury Secretary Scott Bessent on Thursday, 5 June mounted a vigorous defence of President Donald Trump's economic agenda before the House Ways and Means Committee, clashing sharply with Democratic lawmakers over inflation, tariffs, and the administration's broader stewardship of the US economy. The hearing, convened to examine the administration's 2027 budget, quickly became one of the most contentious exchanges of the current congressional session.

Key Claims from the Treasury Secretary

In his opening testimony, Bessent declared that Trump's tax, trade, and deregulation policies were delivering tangible gains for working Americans. 'Today his policies are driving lower taxes, bigger paychecks, and broader prosperity,' he told the committee.

Bessent cited USD 325 billion in tax relief delivered during the current filing season, with the average refund rising by more than 11 per cent. He said approximately 62 million filers claimed at least one of the administration's signature measures — including no tax on tips, no tax on overtime, deductions for auto loan interest, and relief for seniors. He added that just over 70 per cent of those receiving tax cuts earned less than USD 100,000 annually.

Democratic Pushback on Inflation and Tariffs

Ranking Member Richard E. Neal offered a starkly different assessment, arguing that American households were being squeezed by rising costs despite the administration's promises. 'Workers and families are being forced to stretch their dollars further every day,' Neal said.

Several Democratic lawmakers linked higher prices to tariffs and to the ongoing conflict involving Iran, pointing to increases in fuel, grocery, and household costs. Representative Judy Chu specifically argued that gas prices had risen sharply and that lower-income households were bearing a disproportionate share of the inflationary burden.

Bessent's Response on Wages and Energy Prices

Bessent rejected those characterisations, pointing to real wage growth. 'We have had real wage increases every month since President Trump took office, except for the month of April,' he said. On energy costs, he attributed near-term price pressures to the Iran conflict and expressed confidence they would subside: 'We are experiencing a short-term elevation of prices due to the Iran conflict that will come down.'

He also repeatedly underscored what he described as structural improvements in the economy. 'The economy is very strong. We are creating jobs. And importantly, Congressman, these are jobs for Americans,' he said.

International Tax and Digital Services

Beyond domestic matters, Bessent addressed Washington's stance on digital services taxes imposed by foreign governments, signalling an aggressive posture. 'We are pushing back on these digital service taxes. They cannot take advantage of our companies,' he told lawmakers.

Hearing Turns Heated

Committee Chairman Jason Smith praised what Republicans have labelled the 'working families tax cuts', crediting them with the USD 325 billion in refunds this season. At several points, exchanges grew heated, with members talking over one another and trading accusations of distorting economic facts. Democratic lawmakers also pressed Bessent on separate matters involving ongoing litigation; he repeatedly declined to comment, citing Justice Department guidance.

The hearing underscores the deepening partisan divide over the US economic outlook as the Trump administration heads into budget negotiations against a backdrop of persistent inflation concerns, contested trade policy, and questions about federal spending priorities.