WASHINGTON
Treasury Secretary Scott Bessent said Thursday the U.S. budget deficit under President Donald Trump has likely peaked, citing fiscal consolidation efforts aimed at reducing the national debt.
Bessent made the remarks in an exclusive interview with CNBC following his department's recent debt buyback announcement. The Treasury Department reported the U.S. budget deficit hit $432 billion in July, its highest monthly level in over five years. The fiscal year-to-date gap climbed to almost $1.8 trillion, exceeding the same period a year earlier.
This week, the U.S. government's debt pile reached $40 trillion for the first time. The total has more than doubled over the last decade.
Bessent said he is collaborating with President Trump and Russell Vought, director of the Office of Management and Budget, on fiscal consolidation measures. He estimated these initiatives could generate savings of several hundred billion dollars.
The White House has promoted broad tariffs on trading partners as a revenue source to help shrink the debt. But the administration's tariff policies have faced repeated legal obstacles, including a Supreme Court decision striking down many of the levies.
Despite those setbacks, Bessent expressed confidence that this year's tariff revenue will match 2025's levels after the levies were re-implemented. He added the revenues should not have to be refunded to companies this time.
Vice President JD Vance said Thursday that Bessent has a "very discreet plan" designed to grow the economy out of the $40 trillion debt.
Bessent addressed the record figure directly: "There's nothing magic about the 40-trillion number. We can grow our way out of that." The statement represented his clearest effort to reframe the debt milestone, which had alarmed economists and fueled a selloff in long-dated Treasurys. The gross national debt crossed the threshold just five months after reaching $39 trillion in March.
