The man that Donald Trump has tapped to run the Treasury Department issued a stark warning about tax policy during his confirmation hearing.
Scott Bessent says that if Congress does not extend the tax cuts that are due to expire at the end of the year the U.S. economy will be thrown into chaos.
"If we do not renew, extend, then we will be facing an economic calamity, and always, with economic instability that falls on the middle and working-class people," Bessent says.
"We will see a gigantic middle class tax increase."
The Wall Street billionaire will be in charge of executing Trump's economic policies.
While Trump and Congressional Republicans have pushed for a renewal, and even more tax cuts, critics are warning about their impact on public debt and borrowing costs.
On Wednesday, outgoing Treasury Secretary Janet Yellen warned that extending the 2017 tax cut will add to unsustainable deficits.
"The projected fiscal path under current budgetary policies is simply not sustainable," she said in her final speech at the New York Association for Business Economics.
"The consequences of inaction, or action that exacerbates projected deficits, could be dire," she added.
Estimates claim that extending provisions of the Tax Cuts and Jobs Act could add around $4 trillion to deficits through 2034.
Bessent, who is from South Carolina, attended Yale University and served as chief investment officer of Soros Fund Management, the macroeconomic investment firm of billionaire George Soros.
Bessent has in recent times called for tax reform and deregulation to spur growth.
On Thursday, he told the Senate Finance Committee that Trump has a "generational opportunity to unleash a new economic golden age that will create more jobs, wealth and prosperity for all Americans."
"We can usher in a new, more balanced era of prosperity that will lift up all Americans and rebuild communities and families across the country," Bessent said.
In opening remarks, he took aim at government spending and high budget deficits, while stressing the need to secure vulnerable supply chains and deploy sanctions carefully.
With AFP reporting.
