Treasury Secretary Says New Law Blocked Potential ‘$4.5 Trillion Tax Hike’

Secretary Scott Bessent made the remarks at a Minnesota event on Thursday.

Treasury Secretary Scott Bessent speaks with reporters outside the West Wing of the White House in Washington on Oct. 22, 2025. Jim Watson/AFP via Getty Images

Treasury Secretary Scott Bessent said a tax cut that was endorsed by the Trump administration prevented a potential “$4.5 trillion tax hike” and will allow Americans to keep thousands of dollars in “real wages” starting this year.

During remarks at a Minnesota Economic Club event on Thursday, the secretary said that the “average American to keep up to $7,200 more in annual real wages and the average family of four to keep up to $10,900 more in take-home pay” under the Working Families Tax Cut under the GOP-backed One Big Beautiful Bill Act.

The IRS has stated that multiple new tax law provisions under the One Big Beautiful Bill Act will take effect this year, according to a January news release. The tax revenue agency anticipates that about 164 million individual returns will be submitted for the 2026 season that starts on Jan. 26.

Over the past several weeks, President Donald Trump, Bessent, and other White House officials have sought to highlight tax provisions under the One Big Beautiful Bill Act and said they would benefit American families.

This week, Trump announced several executive actions targeting the U.S. housing market, including an order that could bar institutional investing companies from purchasing more single-family homes. He framed it as a way for younger Americans to have a better chance at buying a house. The president on Thursday also said that he ordered officials to purchase $200 billion in mortgage bonds.

“I am instructing my Representatives to BUY $200 BILLION DOLLARS IN MORTGAGE BONDS. This will drive Mortgage Rates DOWN, monthly payments DOWN, and make the cost of owning a home more affordable,” he wrote in a post on his Truth Social platform.

The purchase will be executed by Fannie Mae and Freddie Mac, said Federal Housing Finance Agency head Bill Pulte on X.

Bessent also used part of his speech at the event on Thursday to highlight efforts of alleged fraud involving federal entitlements in the state.

“Minnesota, unfortunately, is ground zero for what may be one of the most egregious welfare scams in our nation’s history to date,” Bessent said at the Minnesota Economic Club event on Thursday.

The secretary added that the Treasury Department’s efforts to recover federal funds that were stolen via fraudulent schemes and to prosecute perpetrators will not be limited to just Minnesota.

The department will try to prevent “scandals like this from ever happening again and investigating similar schemes state-by-state,” Bessent said.

Department of Homeland Security Secretary Kristi Noem and FBI Director Kash Patel both announced an increase in operations in Minnesota in recent days, coming in the wake of a social media influencer, Nick Shirley, having posted a video last month alleging he had found that day care centers operated by Somali residents in Minneapolis had committed tens of millions of dollars in fraud.

Bessent said that in the Minnesota case, “billions of dollars intended for families in need, housing for disabled seniors, and services for children were diverted to benefit fraudsters” while adding that he visited the state this week to show the “Treasury’s unwavering commitment to recovering stolen funds” and “prosecuting fraudulent criminals.”

The Associated Press contributed to this report.