Bessent’s deficit plan faces resistance in Congress

Treasury Secretary Scott Bessent’s promised deficit-reduction plan is running into opposition in Congress, where lawmakers show little appetite for net budget cuts, Bloomberg reported.

Republican lawmakers abandoned plans for hundreds of billions of dollars in reductions after pressure from members in swing districts. The House has instead advanced a measure adding $95 billion in spending this year, largely for the Iran war, without offsetting cuts.

House leaders have discussed targeting Medicaid fraud and other entitlement spending after the elections, potentially saving about $200 billion. But a proposed $350 billion increase in defense spending would more than outweigh those savings.

Deficit hawks hope the debate can at least slow the deterioration in the fiscal outlook. Yet the administration is also seeking another $500 billion for defense next year, while budget models warn that larger deficits could weigh on growth later in the decade.