Treasury Secretary Bessent: US Budget Deficit Likely Peaked, $40 Trillion Debt "Nothing Special"

Treasury Secretary Scott Bessent said the US budget deficit has "very likely" peaked during President Trump's term.

In an interview with CNBC on Thursday, Bessent said the budget deficit has "very likely" peaked during Trump's tenure. He further stated that he, Trump, and federal government leaders including Office of Management and Budget Director Russell Vought are committed to fiscal consolidation measures. The statement came a day after his department announced unconventional debt buybacks.

Bessent also said these efforts could save tens of billions of dollars. He said: "We will be laser-focused."

Despite challenges, he expects tariff revenue this year to be comparable to 2025, when tariffs were reimposed. He said this time, the revenue will not have to be refunded to businesses.

US Deficit Hits July Record High

The US budget deficit has been a persistent issue, with the federal government posting a record $432 billion deficit in July. The deficit for the fiscal year to date has widened to nearly $1.8 trillion, exceeding the level from the same period last year.

This situation has drawn criticism from various quarters, including Florida Governor Ron DeSantis, who blamed Congress's inability to enact budget cuts for the failure of the Department of Government Efficiency. DeSantis expressed his view, saying: "DOGE fought the swamp, and the swamp won."

Schiff Questions Bessent's Debt View

Meanwhile, US government debt has surpassed a record $40 trillion, more than doubling over the past decade, intensifying concerns about the nation's fiscal health.

The Treasury Secretary said: "The number $40 trillion is nothing special. We can grow our way out of this."

Economist Peter Schiff criticized Bessent's argument that the doubling of US Treasury debt is less concerning because household net worth has also more than doubled. He argued that debt is a permanent obligation that must be repaid and settled, while household wealth can decline rapidly, especially if higher interest rates trigger a drop in overvalued stock and real estate prices.

A @CNBC guest just dismissed the doubling of the national debt by noting household net worth has more than doubled in a decade. But debt is a permanent obligation that must be repaid and settled. Net worth is fleeting, aside from being overly concentrated, because it...

— Peter Schiff August 20, 2026