Cramer Questions Treasury Secretary Bessent at Banking Hearing on Adoption Tax Credit, 3% Resolution

BISMARCK, N.D. – Treasury Secretary Scott Bessent vigorously defended President Trump’s financial policies and promoted the administration’s pro-growth agenda when he appeared before the Senate Banking, Housing, and Urban Affairs Committee to deliver the Financial Stability Oversight Council’s Annual Report to Congress.
U.S. Senator Kevin Cramer (R-ND), who focused on affordability and tax relief for adoptive families, asked Bessent to commit to examining the Internal Revenue Service’s (IRS) interpretation of the refundable adoption tax credit which was restored in the Working Families Tax Cuts legislation. The IRS does not align with congressional intent to allow carryforward funds to be eligible for the refundable portion.
Families can still claim up to $17,280 per child, but the newly amended legislation now allows the $5,000 to be refundable as a cash payment even if an adoptive family has no tax liability, and also allows the unused amounts to offset tax liability and carry forward for up to five years, providing direct financial relief for adoptive parents.

“The adoption tax credit always had this carryforward provision that allowed, of course, families to carry over unused portions into the next taxliability,”explained Cramer.“Our intent in the Working Families Tax Cuts was for the carryforward to be eligible for the $5,000 refund as well, and that [Joint Committee on Taxation] actually included that in their score. […] However, the IRS is interpreting the language to mean that the carryforward is not eligible, affecting of course the adoptive families from 2020 through 2024. […] There's a big difference now between Congress's intent here and the IRS's interpretation of it. I don't believe it was the administration's intent to make this what I believe to be a mistake when the President signed it into the law.”
“I believe you're referring to the Section 70402,”responded Bessent.“And my tax office is very happy to work with your staff.”
Cramer pivoted to the3% Resolution, which supports the goal of reducing the federal budget deficit to 3% of gross domestic product (GDP) or less. He said the purpose of it is to reduce,“the federal deficit to 3% of GDP. Now, you referenced in your opening statement, I noticed, it's already been reduced somewhat to 5.4%. And one of the ways we can grow out of a deficit, or we get out of the deficit, or reduce the deficit, is by growing out of it, but I'd like to work on both sides of the ledger with you a little bit because you have said that we don't have a revenue problem, we have a spending problem, and I absolutely 100% agree. So maybe just speak for the remaining time […] to that goal, is 3% by 2030, which is what our resolution would do, is that realistic?”
“Senator, my target is for something that begins with a 3 by the end of President Trump's term, for, as I said, for calendar [year] 2024, we’re at 7.7%, the highest when we weren’t at war, not in a recession,”said Bessent.“We’re at 5.4% and […] for the past three quarters, we've averaged 4.1% GDP growth, and we had a fiscal contraction last year. We brought down the spending, which is one of the reasons our bond market did well, so we're at 5.4%. As we move that down, we will see the economy improved, and everyone could go to the Treasury website, or the X account […] and they can see a study by MIT that shows that the budget deficit that was blown out in [2021] and [2022] created the great inflation of [2022]. So as we bring down government spending, it will bring down rates and bring down inflation.”
Cramer concluded by highlighting how he believes the productivity and growth levels are the beginning of a boom.