Treasury Secretary Scott Bessent said on September 8 that President Trump will try to get Congress to do deficit reduction during the 119^th Congress’ lame duck session (November-December of this year) if Democrats gain control of the House, Senate or both in the midterm elections. He said he was in discussions with Office of Management and Budget (OMB) Director Russ Vought to craft a "fiscal consolidation" plan that "could potentially" reduce the federal deficit.

Bessent said that this would be a “hurry-up” initiative because Democrats, if they win control of either or both chambers of Congress, could block the Trump deficit reduction initiative. If, however, Republicans retain control of Congress, Bessent said, then the “fiscal consolidation plan” could take more time, likely not coming to a head until 2027 and the 120^th Congress.

Prospects: Secretary Bessent’s comments suggest the focus of the “fiscal consolidation plan” will be on spending cuts (probably including social safety net programs like Medicare & Medicaid) rather than tax increases. But some Republicans (e.g., House Budget Committee Chair Rep. Tom Cole (R-OK)) have commented that they'd be open to tax increases to address the Social Security shortfall (most likely raising or eliminating the wage base). So taxes are not out of the question if/when a deficit reduction proposal comes to the Hill in November.

NAIFA Staff Contact: Jayne Fitzgerald – Director – Government Relations, at jfitzgerald@naifa.org