Bessent Forecasts ‘Substantial’ Tax Refunds, Real Wage Increases Next Year

Authored by Jack Phillips via The Epoch Times,

Confirming President Trump’s triumphant comments last night, Treasury Secretary Scott Bessent said this week that an increase in Americans’ tax refunds would enable the United States to “go back to the kind of economy that we had.”

While speaking to Fox Business, Bessent said that “substantial refunds” are coming to Americans after they submit their taxes in the first quarter.

“They will get an increase in real incomes. So I am very optimistic for working Americans, for job growth, for capital formation,” the secretary said.

Later in the interview, the secretary said that after larger increases in tax refunds, some workers will be able to keep “more of their paychecks” and predicted the United States would “go back to the kind of non-inflationary growth where working Americans do better than supervised workers.”

He added that the government shutdown that lasted for a month and a half “was a hit to GDP [and] slowed things down.”

“We’re still going to finish the year probably [with] 3.5 percent GDP growth, which is incredible,” he said.

Regarding inflation, which has been relatively elevated since the COVID-19 pandemic years, Bessent forecast a “substantial drop” in prices during the first six months of 2026, adding that “rents are down” due to a drop in mass illegal immigration.

“President Trump, by enforcing the border, sending home more than 2 million illegals, we’re now seeing … rents coming down substantially,” he said.

However, he warned that a possible government shutdown could be coming at the end of January.

The previous stopgap measure to fund the government will last only until Jan. 30.

“If they try to shut down the government, I believe that the Senate Republicans should immediately forgo the filibuster, keep the government open, and let the economy do its thing,” Bessent said.

His comments come as the Trump administration has sought to push back on relatively lower consumer and small business sentiment, and after Democrats were able to win several key elections in November.

The November job gains were higher than the 40,000 economists had forecast. The October job losses were caused by a 162,000 drop in federal workers, many of whom resigned at the end of fiscal year 2025 on Sept. 30.

A report released on Dec. 16 shows that the United States gained 64,000 jobs in November but lost 105,000 in October as federal workers departed after cutbacks in the federal government. The unemployment rate rose to 4.6 percent last month, the highest since 2021.

Some Democrats, such as Illinois Gov. JB Pritzker, have said that Trump administration policies, such as tariffs, have harmed the economy. They are emphasizing a message of affordability.

Trump has been “doing nothing” to lower grocery or energy prices, Pritzker told Pod Save America earlier this week, adding that “he’s doing the opposite” with tariffs.

Responding to the affordability narrative, President Donald Trump said at an event in Pennsylvania this past week that he has made it a priority to lower costs and accused Democrats of pushing inflationary policies.

“They always have a hoax—the new word is affordability,” he said, adding, “They gave you the highest inflation in history.”