Senator Elizabeth Warren has raised pointed questions ahead of Treasury Secretary nominee Scott Bessent’s confirmation hearing before the Senate Finance Committee. Her concerns, outlined in a detailed 31-page letter, focus on Bessent’s stance on crypto regulation, financial deregulation, tax policies, and the challenges faced by small banks.
Senator Elizabeth Warren Presses Treasury Nominee Bessent on Crypto and Tax Policies
In a 31-page letter to Treasury Secretary nominee Scott Bessent, Senator Elizabeth Warren emphasized the need for clear crypto oversight. She questioned whether the Treasury’s Office of Foreign Assets Control (OFAC) should have authority over stablecoins to address risks like money laundering and sanctions evasion.
Warren urged Bessent to provide a plan for regulating crypto companies that pose threats to financial stability.
Moreover, on tax policy, Warren challenged Bessent’s support for the 2017 tax cuts enacted during the Trump administration, which added $4.5 trillion to the federal deficit. She criticized his “3-3-3” strategy, which proposes reducing taxes, lowering the deficit, and boosting economic growth.
The anti-crypto Senator demanded specifics on how Bessent would enforce the Corporate Alternative Minimum Tax (CAMT) and address the carried interest loophole.
Concerns Over Deregulation and Financial Stability
Additionally, Warren scrutinized Bessent’s endorsement of deregulation, linking it to the 2008 financial crisis and the 2023 collapse of Silicon Valley Bank (SVB). She cited the Federal Reserve’s report blaming weakened regulations for SVB’s failure. More so, the anti-crypto Senator asked whether Bessent agreed with the assessment. Senator Warren asked,
“Do you agree with this assessment? What’s your plan to ensure deregulation doesn’t cause another banking crisis?”
Nevertheless, Warren highlighted the importance of upholding the Dodd-Frank Act, which was designed to prevent financial crises. She sought assurance that Bessent would enforce these crypto regulations and avoid policies that could lead to another economic downturn.
Decline of Small Banks and Community Banking
The senator also pointed out the decline of small banks, which dropped from 84% of all U.S. banks in 1994 to 52% by 2022. She raised concerns about the survival of community banks and their role in supporting small businesses. Warren questioned Bessent’s strategy to ensure smaller banks can thrive amid industry consolidation and financial instability.
She also asked for Bessent’s views on proposals to limit the Federal Deposit Insurance Corporation’s (FDIC) ability to sell failing banks to large institutions. Warren emphasized the need for bipartisan measures to raise deposit insurance limits for small businesses.
Similarly, Elizabeth Warren criticized Republican-led efforts to cut $20 billion from the IRS budget. She warned of the impact of enforcing tax compliance for large corporations. More so, the anti-crypto Senator questioned how Bessent would maintain audit quality and recover revenue without adequate funding.
Despite questioning by Senator Warren on crypto policies, Ripple CEO Brad Garlinghouse hailed Scott Bessent as a pro-innovation choice for Treasury Secretary. Garlinghouse expressed optimism for XRP and crypto progress under Bessent, signaling potential clarity on the Ripple-SEC case.
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