• Treasury Secretary Scott Bessent forecasts major economic stimulus if 2017 tax cuts are made permanent.
  • Proposed policy package combines tariffs, tax cuts, and deregulation to boost U.S. manufacturing and industrial investment.
  • Key provisions include restoring 100% expensing for equipment, lowering corporate tax rates for manufacturers, and expanding small business deductions.

A Push for Permanence

Treasury Secretary Scott Bessent has doubled down on the administration's economic strategy, telling attendees at the Milken conference that making the 2017 tax cuts permanent would deliver significant stimulus to the U.S. economy. The proposed package aims to reinforce America's appeal as a global investment destination while sparking what Bessent called a "building renaissance" focused on domestic manufacturing.

Central to the plan is restoring and expanding 100% expensing for equipment purchases and factory construction—a provision that lapsed after the original tax cuts. The Treasury also wants to lower the corporate tax rate for U.S. manufacturers from 21% to 15%, while introducing new tax credits for research and innovation. Small businesses would see their deductions locked in permanently, avoiding scheduled increases.

Offsetting Costs with Tariffs

To counterbalance potential revenue losses, the administration is leaning on increased tariff revenues. "We're structuring this to be fiscally responsible," Bessent said, though critics in Congress remain skeptical about the long-term deficit impact. Some Republican senators have praised the expensing proposal as a boon for capital investment, while others warn it could strain budget negotiations.

The Treasury's approach appears designed to capitalize on trends toward supply chain reshoring, with Bessent arguing that tax incentives paired with targeted tariffs will accelerate the shift. "This isn't just about maintaining competitiveness—it's about reclaiming leadership in industrial sectors," he told the conference. Market analysts are watching closely to see whether the measures gain traction in Congress, where debates over fiscal discipline could complicate passage.