Treasury Secretary Scott Bessent Faces Contentious House Financial Services Committee Hearing

A contentious hearing is underway as Treasury Secretary Scott Bessent appears before the House Financial Services Committee for his annual testimony. Bessent on Tuesday initially struggled to get a word in as protesters and a leading House Democrat repeatedly talked over him.

"The strength of our economy has allowed the United States to wage the greatest economic isolation campaign in the history of the world against the Islamic Republic of Iran and its enablers," Bessent said in his opening statement. Bessent touted the success of the Iran war and rising wages for the lowest-income Americans. Protesters objecting to U.S. sanctions against Iran and Cuba broke in repeatedly.

Bessent is fielding questions about issues including artificial intelligence, inflation, and energy prices and will likely be probed on interest rates and the federal debt.

Several leading AI executives have said in recent days they are concerned about the potential for AI to advance beyond their ability to control the technology. Bessent on Tuesday suggested Chinese companies are a greater threat than U.S. firms. Anthropic, creator of Claude, said earlier this month that a Chinese AI model had routed some of its users' queries to Anthropic.

"Kimi had a breach and sent Chinese weapons plans back to Anthropic," Bessent said Tuesday, speaking about the first known example of a Chinese AI model being involved in a breach.

Anthropic didn't immediately respond to a request for comment about Bessent's remarks.

Bessent's testimony is formally part of Congress' oversight of the International Monetary Fund, a Washington-based international organization that was established in 1944 to help ensure global financial stability. Bessent has criticized the organization as subject to mission creep, and his former chief of staff, Dan Katz, became its No. 2 official last year. The U.S. government's priority is "ensuring that American time and resources serve American interests," Bessent said.

Members of Congress used the secretary's appearance to ask questions about other issues.

Bessent defended his management of the U.S. Treasury market during questioning by other lawmakers. The Treasury Department increased its purchases of certain long-dated Treasury bonds that it sees as mispriced. Democrats suggested those buybacks weren't successful because yields on long-dated bonds have continued to rise.

Bessent disagreed, saying bond yields would be yet higher had the department not intervened.

"There was the counterfactual of what it would have done," he said. "And then we proceeded to have two of most successful bond Treasury auctions that we've had in 20 years."

Bessent said he is working on deficit-reduction plans, which would ease Treasury yields.

"I believe that the 10-year yield reflects many things, but the need to address the deficit is one of those," Bessent said.

Yields have risen alongside the price of oil. A barrel is of oil trading above $100 a barrel as the Iran war has heated up again recently. That has pushed the price of gas in the U.S. to an average of $4.32 a gallon as of Monday, up $1.14 from a year ago, according to AAA. Diesel costs $6.23, up $2.54 over the past year.

Bessent has been a full-throated supporter of the war. His department has ratcheted up sanctions on Iran and banks that facilitate its business.

The national debt has ballooned past $40 trillion. The huge supply of debt combined with artificial intelligence spending and the surge in oil prices to hike funding costs for government debt.

Bessent and House Republicans emphasized positive aspects of the Trump economy. Stocks have been volatile lately but remain near highs. The S&P 500 is up about 27% since Trump took office for his second term.

The economy has also continued to produce jobs, while the administration slows immigration. Unemployment is low at 4.1%.

Bessent said wages for the bottom 25% of earners have risen faster than the top group of earners. More than 64 million tax returns have claimed one of the tax cuts passed last year, he said.