Politics

NEW YORK (Reuters) – The United States should keep oversight of potential problems in the U.S. bond market, President-elect Donald Trump’s Treasury Secretary pick Scott Bessent told Congress on Thursday, referring to Wall Street billionaire Howard Lutnick’s plan to clear Treasury futures through a UK firm.

Lutnick’s BGC Group brokerage last year launched a futures exchange and plans to add U.S. Treasury futures in the first quarter this year.

That FMX Futures Exchange has partnered with London Stock Exchange Group’s London Clearing House (LCH), stoking concerns among some U.S. lawmakers that the United States could lose control and oversight of certain Treasury market trades.

With a value of around $28 trillion, the U.S. Treasury market is the world’s biggest bond market and is crucial to the U.S. government’s ability to finance itself, as well as for global financial stability.

During Bessent’s Thursday confirmation hearing, Senator John Cornyn asked him if “a proposal for an entity to clear U.S. Treasury futures at the London Clearing House” could have financial stability repercussions, alluding to FMX.

“Some argue that the Bank of England would have control over a, heaven forbid, a default scenario … in this critical market, instead of the U.S.,” he said.

Bessent said resolution authority over the U.S. Treasury market should remain in the country.

“It is important for the U.S., for U.S. Treasuries, for us to be able to resolve any stress issues in the market in the U.S.,” he said, adding he planned to investigate the issue.

Bessent noted that the bankruptcy of Lehman Brothers in 2008, which caused global markets to plummet, was triggered by issues with its UK subsidiary.

Lutnick is a Trump backer who lost out on the Treasury Secretary role to Bessent but was instead picked to lead Trump’s trade and tariff strategy as head of the Commerce Department.

An FMX spokesperson said the FMX Futures Exchange is fully approved by the Commodity Futures Trading Commission (CFTC), the U.S. derivatives regulator, to list U.S. Treasury futures contracts.

LCH is registered with the CFTC to clear futures contracts, a spokesperson at the London-headquartered company said.

“LCH holds all futures customer collateral in the U.S. onshore, as required by the CFTC for the protection of such funds and assets belonging to U.S. firms,” the spokesperson added in an emailed statement.

(Reporting by Davide Barbuscia in New York; Editing by Nia Williams)

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ST. PAUL, Minn. (AP) — Gov. Tim Walz urged lawmakers Thursday to end a power struggle that has disrupted the first week of Minnesota’s 2025 legislative session, but expressed support for House Democrats’ boycott of the chamber to block Republicans from wielding power.

House Republicans hold a temporary 67-66 majority until a special election to fill a vacant seat on Jan. 28. Democrats, who have refused to attend the session since it opened Tuesday, contend a quorum under the state constitution requires 68 members to be present and that the House cannot conduct any business without a quorum.

“Just work together on a power-sharing agreement,” Walz urged lawmakers as he unveiled his two-year budget proposal. “That’s the way it’s going to end up. And I think that can work out really well.”

House Republicans say they need only 67 members to be present because of the empty seat. In the Democrats’ absence, they have elected their top leader as speaker and appointed committee chairs and other officers. The state Supreme Court will hear oral arguments next Thursday on whether the GOP’s moves are legal.

Walz said he’s confident the special election in a heavily Democratic district will result in a 67-67 tie in the House, and he urged House Republicans to end the fight now.

“I would encourage them, don’t go down this road,” he told reporters. “You’re not going to win in court. You’re not going to win in a court of public opinion. We got a split Legislature. That is acknowledged. Just go with that. You’re not going to overturn an election.”

The main task of the legislative session is to pass a balanced two-year budget to take effect July 1, and that will require bipartisan cooperation. Both sides agree the House can’t pass bills without 68 votes under their rules, so they will eventually have to find ways to worth together.

The governor’s proposed $65.9 billion budget includes a modest cut sales tax cut, from 6.875% to 6.8%, which would mean a 7.5-cent savings on a $100 purchase. The lost revenue would be offset by extending the sales tax to some services that aren’t currently taxed, and the closure of various loopholes. His plan would slow the growth of some programs affecting seniors and special education students. It contains measures to combat fraud in government programs, but few new initiatives.

“You’ve got an opportunity here to shrink state spending, to cut taxes, to bring fairness to the system,” Walz said. “I’m not adding any additional programs or anything, (I’m) bringing efficiencies to it. This is pretty uncontroversial.”

House GOP leader Lisa Demuth, of Cold Spring, slammed the governor’s proposal, saying Republicans won’t support any tax increases or cuts affecting seniors in nursing homes, and signaled the GOP would keep fighting.

“I unfortunately have not heard directly from him at all,” Demuth told reporters after a brief Republicans-only floor session Thursday. “If he wanted to encourage the other House members to actually come to work … it would be much appreciated.”

Demuth and the top House Democrat, Melissa Hortman, of Cold Spring, had mostly worked out a power-sharing agreement last month, but it fell apart after a judge ruled that one Democratic member didn’t live in the district he won. That decision gave Republicans their one-seat majority.

Hortman on Thursday renewed an offer to Demuth to recognize a Republican majority through Feb. 3, when the original power-sharing agreement would kick back in. The offer requires Republicans to agree not to try to unseat another Democrat who won election by 14 votes.

“The path you have chosen and the situation currently unfolding in the Minnesota House is deeply concerning,” Hortman wrote to Demuth, adding, “we owe a duty to the state to continue to work together to achieve a resolution of our differences.”

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By David Lawder

WASHINGTON (Reuters) – President-elect Donald Trump’s pick for Treasury secretary, hedge fund manager Scott Bessent, vowed to maintain the dollar’s status as the world’s reserve currency as he prepared to face questions from U.S. senators on Thursday on how he will implement Trump’s tax cut, tariff and deregulation plans.

Bessent’s testimony at a Senate Finance Committee confirmation hearing at 10:30 a.m. EST (1530 GMT) will have financial markets on edge amid worries – reflected in rising bond yields – that Trump’s policy plans could stoke inflation and spark a new global trade war that threatens financial stability.

The 62-year-old founder of Key Square Capital Management will need to present himself as a moderating influence on Trump’s “more extreme” plans, said David Wessel, director of the Brookings Institution’s Hutchins Center on Fiscal and Monetary Policy.

“What the markets and the business community want is to know that there’s a grown-up at the table who doesn’t think that cutting taxes excessively and running up the debt is a good idea,” Wessel said. “And someone who doesn’t think that all of Trump’s tariff campaign promises are good ideas.”

In prepared remarks released on Wednesday night, Bessent laid out a vision for “a new economic golden age” that included prioritizing strategic investments that grow the U.S. economy and making permanent Trump’s 2017 individual and small business tax cuts that are due to expire on Dec. 31, 2025.

“We must secure supply chains that are vulnerable to strategic competitors, and we must carefully deploy sanctions as part of a whole-of-government approach to address our national security requirements,” Bessent also said in the remarks.

“And critically, we must ensure that the U.S. dollar remains the world’s reserve currency.”

TARIFF ADVOCATE

Bessent did not mention China in his prepared remarks, but he has been a strong advocate for Trump’s plans for sweeping tariffs that range between 10% on all imports and 60% on Chinese goods.

In a Fox News opinion piece published a week before he emerged as the winner of a high-drama contest for Trump’s Treasury choice in November, Bessent lauded tariffs as “a means to finally stand up for Americans” after decades of job losses to rising imports.

“Used strategically, tariffs can increase revenue to the Treasury, encourage businesses to restore production and reduce our reliance on industrial production from strategic rivals,” especially China, Bessent wrote.

TAX QUESTIONS

Finance Committee Democrats are expected to hammer Bessent on his plans for extending the 2017 tax cuts for individuals and small businesses that expire at the end of this year. Budget forecasters estimate this would add at least $4 trillion to the federal debt over a decade without savings elsewhere.

Bessent in his remarks called for the Trump administration and Congress to implement “pro-growth policies to reduce the tax burden on American manufacturers service workers and seniors.”

The latter policies refer to Trump’s campaign promises to lower the corporate tax rate to 15% from 21% for companies manufacturing products in the United States, and to exempt income from tips and Social Security from taxation.

Senate Finance Committee Democrat Elizabeth Warren released a list of 180 questions for Bessent to answer, including some challenging his past assertions that tax cuts could pay for themselves by generating higher growth.

“Your expertise has been in making already-rich investors even richer, not cutting costs for families or making the economy stronger for all Americans,” Warren wrote in her letter to Bessent.

The Senate panel’s Republican chairman, Mike Crapo, called Bessent “one of the sharpest minds in the global finance industry.”

Crapo added in his own prepared remarks that Bessent would “have to work with Congress to preserve and build on pro-growth Republican tax policies that have greatly benefited all Americans.”

FED INDEPENDENCE QUESTIONS

Bessent grew up in South Carolina and went to Yale University before starting work on Wall Street, where he helped famed investor George Soros earn over $1 billion by betting against the British pound in 1992.

He started Key Square in 2015, quickly raising $4.5 billion in assets, which peaked at $5.1 billion at the end of 2017 but dropped to $477 million six years later. Bessent has pledged to divest his Key Square investments to avoid conflicts of interest.

Markets also will parse Bessent’s comments on Federal Reserve independence, given his past advocacy of appointing a “shadow” chair to the Fed board who would offer alternative policy guidance. Trump has recently complained about interest rates being too high, despite three Fed cuts last year.

(Reporting by David Lawder; Editing by Tom Hogue)

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WASHINGTON (AP) — President Joe Biden used his farewell address to the nation Wednesday to deliver stark warnings about an “oligarchy” of the ultra-wealthy taking root in the country and a “tech-industrial complex” that is infringing on Americans’ rights and the future of democracy.

Speaking from the Oval Office as he prepares to hand over power Monday to President-elect Donald Trump, Biden seized what is likely to be his final opportunity to address the country before he departs the White House to spotlight the accumulation of power and wealth in the U.S. among just a small few.

“Today, an oligarchy is taking shape in America of extreme wealth, power and influence that literally threatens our entire democracy, our basic rights and freedoms, and a fair shot for everyone to get ahead,” Biden said, drawing attention to “a dangerous concentration of power in the hands of a few ultra-wealthy people and the dangerous consequences if their abuse of power is left unchecked.”

Invoking President Dwight Eisenhower’s warnings about the rise of a military-industrial complex when he left office in 1961, Biden added, “I’m equally concerned about the potential rise of a tech-industrial complex that could pose real dangers to our country as well.”

Biden used his 15-minute address to offer a model for a peaceful transfer of power and — without mentioning Trump by name — raise concerns about his successor.

It marked a striking admonition by Biden, who is departing the national stage after more than 50 years in public life, as he has struggled to define his legacy and to steel the country against the return of Trump to the Oval Office. This time, the president, who has repeatedly called Trump a threat to the nation’s system of governance, went even further, warning Americans to be on guard for their freedoms and their institutions during a turbulent era of rapid technological and economic change.

Biden sounded the alarm about oligarchy as some of the world’s richest individuals and titans of its technology industry have flocked to Trump’s side in recent months, particularly after his November victory. Billionaire Elon Musk spent more than $100 million helping Trump get elected, and executives like Meta’s Mark Zuckerberg and Amazon’s Jeff Bezos have donated to Trump’s inaugural committee and made pilgrimages to Trump’s private club in Florida for audiences with the president-elect as they seek to ingratiate themselves with his administration and shape its policies.

Biden’s speech in the Oval Office is the latest in a series of remarks on domestic policy and foreign relations he has delivered that are intended to cement his legacy and reshape Americans’ grim views on his term. Earlier in the day, he heralded a long awaited ceasefire agreement between Israel and Hamas, which could end more than a year of bloodshed in the Middle East.

“It’ll take time to feel the full impact of what we’ve done together but the seeds are planted and they’ll grow and they’ll bloom for decades to come,” Biden said. It was a tacit acknowledgement that many Americans say they have yet to feel the impact of his trillions of dollars spent on domestic initiatives.

At the same time that Biden was criticizing social media companies for retreating from fact-checking on their platforms, Trump’s incoming communications director and press secretary were sharing posts on X that falsely claimed the president had delivered a prerecorded speech. Biden has blamed his poor standing with the public on misinformation on social media and the challenges he has faced reaching voters in the disaggregated modern media ecosystem.

Biden offered his own set of solutions for the problems that he laid out: change the tax code to ensure billionaires “pay their fair share,” eliminate the flow of hidden sources of money into political campaigns, establish 18-year term limits for members of the Supreme Court and ban members of Congress from trading stocks. His policy prescriptions come as his political capital is at its nadir as Biden prepares to exit the national stage, and after he has done little to advance those causes during his four years in power at the White House.

Federal Reserve data shows the wealthiest 0.1% of the country combined holds more than five times the wealth of the bottom 50% combined.

Biden isn’t leaving the White House in the way that he hoped. He tried to run for reelection, brushing aside voters’ concerns that he would be 86 years old at the end of a second term. After stumbling in a debate with Trump, Biden dropped out of the race under pressure from his own party, and Vice President Kamala Harris became the Democratic nominee.

The speech Wednesday night capped not just Biden’s presidency but his five decades in politics. He was once the country’s youngest senator at 30 years old after being elected to represent his home state of Delaware in 1972.

Biden pursued the presidency in 1988 and 2008 before becoming Barack Obama’s vice president. After serving two terms, Biden was considered to be retired from politics. But he returned to center stage as the unlikely Democratic nominee in 2020, successfully ousting Trump from the White House.

As he highlighted his own commitment to ensuring a peaceful transition of power, including holding briefings with Trump’s team and coordinating with the incoming administration on the Middle East negotiations, Biden also called for a constitutional amendment to end immunity for sitting presidents. That came in response to a Supreme Court ruling last year that granted Trump sweeping protections from criminal liability over his role in trying to overturn his 2020 defeat to Biden.

Biden spoke from the Resolute desk, photos of his family visible behind him in the Oval Office. First lady Jill Biden, his son Hunter, some of his grandchildren, Harris and her husband, Doug Emhoff, sat watching.

As Biden spoke about Harris, saying she’d become like family, the first lady reached over and grabbed her hand.

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By Deena Beasley

SAN FRANCISCO (Reuters) – The pharmaceutical industry, grappling with new government limits on drug prices, is focusing its requests for president-elect Donald Trump and Congress on “fixing” a Biden-era law allowing the Medicare health plan to negotiate prices for its costliest medicines along with insurance changes.

The industry, which argues that pharmacy benefit managers contribute to the high price of prescription drugs, is also pushing for curbs on the rebates they pay to PBMs in exchange for favorable placement on insurer coverage lists.

Such changes would likely require Congressional action, either in stand-alone legislation or as part of a wider bill.

CEOs of some of the largest drugmakers said this week they were encouraged after Trump said at a meeting with pharma executives late last year that these middlemen need to be eliminated.

“PBM reform is top of mind with legislators,” Victor Bulto, president of Novartis’ U.S. operations said in an interview this week during the JP Morgan Healthcare Conference in San Francisco.

A prohibition on PBMs getting rebates based on a drug’s Medicare list price was at one point included in a late-2024 stopgap measure aimed at averting a partial government shutdown, but was later stripped out.

The legislative efforts have been fueled by consumer backlash against co-pays linked to the often artificially high list prices drug manufacturers set for their medicines, rather than the net prices they receive after discounts and rebates to entities like PBMs.

“The PBM situation has become quite frustrating,” and is putting upward pressure on prescription list prices, said Biogen CEO Chris Viehbacher.

The largest U.S. PBMs — UnitedHealth Group’s Optum, CVS Health’s CVS Caremark and Cigna’s Express Scripts — say that by negotiating prices with drugmakers, they lower the cost of medications and help patients save money.

Steve Ubl, head of industry lobbying group PhRMA, said it’s pushing for three PBM-related policies that it thinks would make a big difference for patients: de-linking PBM payments from list prices, passing rebates on to patients at the point of sale, and requiring PBMs to be more transparent about rebates and fees.

Chris Pope, senior fellow at the Manhattan Institute, said U.S. drug spending is highly concentrated toward Medicare, which is primarily for people over the age of 65, since prescription drug usage increases as people age.

“The drug industry is inevitably very highly politicized,” he said.

IRA FIX

Biopharma companies would also like to see changes to the Inflation Reduction Act of 2022, including parity in its treatment of drugs that are primarily pills and capsules compared with complex biologic medicines.

Under the IRA, oral drugs are eligible for Medicare price negotiation after 9 years, compared with 13 years for biotech medications. The industry is lobbying for 13 years for all drugs.

“We’re going to be very focused on the ‘pill penalty’,” Ubl said. “It incentivizes more expensive medicines.”

That change would require legislative action, but Ubl said PhRMA is also pushing for IRA changes that could be carried out administratively.

The lobbying group does not believe all drugs with the same active ingredient should be up for price negotiation even when they are approved for different indications.

For instance, Novo Nordisk’s diabetes treatment Ozempic, widely expected to be on the next list of drugs up for negotiation, contains the same key ingredient as newer weight loss drug Wegovy. Under the current rules, Wegovy is also expected to be up for a negotiated price.

“A lot of the drug payment policy formula are not very well designed,” Pope said, noting that narrow majorities for Republicans in both the House and Senate means their legislative agenda may require support from Democrats – some of whom were involved in drafting the IRA.

“I think there is bipartisan interest in fixing some of the flaws,” Ubl said. “It’s too early to say in terms of the puts and takes of any legislation.”    

(Reporting By Deena Beasley; Editing by Caroline Humer and Bill Berkrot)

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By Luc Cohen

NEW YORK (Reuters) – Rudy Giuliani, the former New York City mayor who served as Donald Trump’s personal lawyer, heads to trial on Thursday in his bid to block two Georgia election workers he falsely accused of helping steal the 2020 presidential election for Joe Biden from seizing his condominium in Palm Beach, Florida.

The non-jury civil trial before U.S. District Judge Lewis Liman in Manhattan will cap off a difficult month for Giuliani, who has twice been held in contempt of court over his treatment of the workers, Ruby Freeman and her daughter Wandrea Moss. 

Giuliani, 80, already has turned over his Manhattan apartment, a 1980 Mercedes-Benz vehicle and other assets to Freeman and Moss to help pay off a $148 million judgment they won after a jury found that he defamed them.

But Giuliani contends he should be allowed to keep his Palm Beach condominium because it is now his permanent residence, an issue that the judge will have to decide in the trial. Giuliani also has said he cannot honor demands by Freeman and Moss for three New York Yankees World Series baseball championship rings because he gave them as gifts to his son Andrew.

Liman must decide what happens to the condominium and rings after the trial in the same district where the now-disbarred Giuliani served as the top federal prosecutor from 1983 to 1989.

Once praised for his response as mayor to the Sept. 11, 2001, attacks, Giuliani’s reputation has fallen into tatters.

Giuliani has pleaded not guilty to criminal charges in two states for trying to overturn Biden’s 2020 victory over Trump. 

On Jan. 6, Liman held Giuliani in contempt for failing to comply with court orders and obstructing efforts by Freeman and Moss to determine his primary residence. Four days later, U.S. District Judge Beryl Howell in Washington found him in contempt again for continuing to defame the two women. 

In a 2021 lawsuit in Washington, Freeman and Moss accused Giuliani of harming their reputations by falsely claiming that surveillance video showed them concealing and counting suitcases filled with illegal ballots at an Atlanta basketball arena where election votes were processed.

Howell found Giuliani liable for defamation as a sanction after he failed to turn over electronic records to Freeman and Moss.

Jurors in Washington later found that he must pay Freeman and Moss $73 million in compensation and $75 million as punishment. The two women are trying to enforce the judgment in Manhattan while Giuliani appeals.

Giuliani previously conceded that his statements about Moss and Freeman were false and damaged their reputations. But Giuliani opposed Howell’s contempt citation, saying he did not mention Freeman and Moss by name in a November podcast in which he claimed a video showed them “quadruple counting the ballots.” 

His lawyers have also challenged the New York contempt finding, saying Giuliani intended to provide the information that Freeman and Moss sought but the timeline was too tight. 

Giuliani and his son are expected to attend the trial, which could last into Friday, with closing arguments on Tuesday.

(Reporting by Luc Cohen in New York; Editing by Noeleen Walder and Will Dunham)

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WASHINGTON (AP) — With only days left in the White House, President Joe Biden was saving a few surprises for his farewell address Wednesday evening. Instead of simply summing up his term in office, he used the opportunity to issue dire warnings about the future and call for deep changes to the country’s foundational document.

Biden’s term ends Monday, when he’ll be replaced by Donald Trump, a man he has called an existential threat to the nation. Here’s a look at what was likely the last major speech of a political career spanning more than five decades:

The outgoing president used the opportunity to deliver a series of warnings to the American people, much like Dwight Eisenhower did in 1961 when he expressed concerns about the “military industrial complex” in his farewell address.

Biden said “an oligarchy is taking shape in America” as power and money become more concentrated in the hands of the few. He criticized the “tech industrial complex” and social media, where “the truth is smothered by lies told for power and for profit.” He urged the country to continue confronting climate change, saying, “We must not be bullied into sacrificing the future.”

It was a stark assessment for a politician who prides himself on optimism. Still, as if to prove his point about misinformation, Trump’s incoming communications director and press secretary started falsely claiming on social media that Biden’s speech was prerecorded.

Biden used the speech to announce one of his most ambitious proposals. He wants an amendment to the U.S. Constitution “to make clear that no president — no president — is immune from crimes that he or she commits while in office.”

The proposal is related to a landmark Supreme Court ruling from last summer, when justices said former presidents have broad immunity for official acts while they’re in the White House. The ruling had major legal consequences, significantly narrowing the case against Trump for attempting to overturn his 2020 loss. The charges were dismissed following Trump’s win in November because sitting presidents can’t be prosecuted.

In addition to the ruling’s impact on Trump’s case, Biden has been deeply troubled by the possibility that it would turn presidents into unaccountable kings.

Biden had other ideas, too. He said there should be higher taxes on billionaires, stricter rules on campaign contributions, 18-year term limits for Supreme Court justices and a ban on stock trading for members of Congress.

The speech Wednesday evening was one of several events Biden was holding as he winds down his time in the White House. He gave a speech on foreign policy at the State Department on Monday, and he’s granted a handful of interviews. He also named new national monuments, issued new rules on America’s use of artificial intelligence and announced that a ceasefire had been brokered between Israel and Hamas.

His final public appearance before Monday’s inauguration will be on Sunday in South Carolina, where he’s expected to visit the International African American Museum in Charleston. The state was a crucial part of his quest for the White House four years ago, helping him secure the Democratic nomination.

Biden chose to speak from the Oval Office, the most presidential of presidential venues. He sat at the Resolute desk, photos of his family behind him. First lady Jill Biden, son Hunter and other family members, including his 4-year-old grandson, Beau, sat in the office as he delivered his speech.

Not every president gives a speech in the same spot. President Barack Obama went to his home in Chicago for his farewell speech. George W. Bush spoke from the East Room. Donald Trump never conceded his election loss four years ago, but he delivered a pretaped address that was made public Jan. 19, 2021.

Also in the Oval Office were Vice President Kamala Harris and her husband, Doug Emhoff. Harris replaced Biden at the top of the Democratic ticket when he abandoned his reelection bid after a disastrous debate performance. Biden endorsed Harris and hoped she would be replacing him as the country’s first female president.

Instead, Harris was watching as Biden talked about a smooth transition to the next administration.

Biden said Harris has been “a great partner,” adding that she and Emhoff had become “like family.” When he said that, Jill Biden reached over and squeezed Harris’ hands.

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By David Lawder and Lawrence Delevingne

WASHINGTON (Reuters) -Scott Bessent, U.S. President-elect Donald Trump’s choice to head the Treasury Department, on Wednesday vowed to ensure that the dollar remains the world’s reserve currency as he laid out a vision for a “new economic golden age”.

Bessent, who faces questioning before the U.S. Senate Finance Committee on Thursday, said in prepared testimony that the new Trump administration must prioritize productive investment that grows the economy over “wasteful spending that drives inflation.”

“We must secure supply chains that are vulnerable to strategic competitors, and we must carefully deploy sanctions as part of a whole-of-government approach to address our national security requirements,” Bessent said in the remarks.

“And critically, we must ensure that the U.S. dollar remains the world’s reserve currency.”

Bessent, a hedge fund manager who has advocated for Trump’s plans to impose significantly higher tariffs on imports, did not single out China in his remarks, but he has previously said China’s trade practices have hollowed out American industry.

Trump has threatened a 60% tariff on imports from China and a 10% duty on global imports. Trump has also said he would impose 25% duties on Canadian and Mexican imports, until those two countries halt the flow of illegal immigrants and fentanyl into the United States.

$4 TRILLION TAX HIKE

Bessent also said the administration and Congress need to “make permanent” the expiring provisions of Trump’s 2017 Tax Cuts and Jobs Act.

“If Congress fails to act, Americans will face the largest tax increase in history, a crushing $4 trillion tax hike,” Bessent said.

The Trump administration and Congress also need to implement “pro-growth policies to reduce the tax burden on American manufacturers service workers and seniors,” he said.

The latter policies refer to Trump’s campaign promises to lower the corporate tax rate to 15% from 21% for companies manufacturing products in the United States, and to exempt income from tips and Social Security from taxation.

Bessent said that with support from Congress, the Trump administration could usher in a new, more balanced era of prosperity for Americans that he called “a generational opportunity to unleash a new economic golden age”.

(Reporting by David Lawder in Washington and Lawrence Delevigne in New York; Editing by Tom Hogue)

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By Steve Holland

WASHINGTON (Reuters) – U.S. President Joe Biden said on Wednesday that Israel and Hamas have reached a ceasefire-and-hostage deal that will end fighting in Gaza, and added it was reached by working alongside the incoming Donald Trump administration.

“I can announce a ceasefire and a hostage deal has been reached between Israel and Hamas,” Biden said at the White House. The deal was reached after 15 months of suffering, he said, and will be followed by a surge of humanitarian aid in Gaza.

“Fighting in Gaza will stop, and soon the hostages return home to their families,” Biden said.

The deal was reached after months of negotiations by the Biden administration, Biden noted as he thanked his national security adviser Jake Sullivan and other officials.

However, its terms will be mostly implemented by the incoming Trump administration, Biden said.

“In these past few days, we have been speaking as one team,” he said.

Asked by a reporter whether he or Trump deserved more credit for getting the deal done, Biden quipped, “Is that a joke?”

Trump, in a statement on social media, said the deal would not have happened if he had not been elected.

“This EPIC ceasefire agreement could have only happened as a result of our Historic Victory in November, as it signaled to the entire World that my Administration would seek Peace and negotiate deals to ensure the safety of all Americans, and our Allies,” he wrote.

Biden did not provide specifics outside the broad outlines of the deal that were already known, but indicated he thought it could set the stage for an independent Palestinian state.

“For the Palestinian people, a credible, credible pathway to a state of their own. And for the region, a future of normalization, integration of Israel and all its Arab neighbors, including Saudi Arabia,” he said.

In a separate statement, the White House quoted Biden as saying: “Today, after many months of intensive diplomacy by the United States, along with Egypt and Qatar, Israel and Hamas have reached a ceasefire and hostage deal. This deal will halt the fighting in Gaza, surge much-needed humanitarian assistance to Palestinian civilians, and reunite the hostages with their families after more than 15 months in captivity.”

(Reporting by Doina Chiacu and Susan Heavey; Editing by Franklin Paul, Heather Timmons, Deepa Babington and Rod Nickel)

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By Patricia Zengerle, Simon Lewis, Doina Chiacu and Michael Martina

WASHINGTON (Reuters) – Senator Marco Rubio, President-elect Donald Trump’s choice for secretary of state, warned on Wednesday that the U.S. must change course to avoid becoming more reliant on China, as he promised a robust foreign policy focused on American interests.

The remarks from the Republican senator, who is expected to comfortably win confirmation as the nation’s top diplomat, sent a stark message about changes in U.S. policy.

Rubio, 53, addressed major international issues in a friendly hearing before a committee where he has served for 14 years. He said an end to the war in Ukraine was essential with both sides having to make concessions, but spoke most strongly about the need to confront China. Rubio’s nomination is expected to be confirmed by the full Senate as soon as Jan. 20, the day Trump is inaugurated for a second term.

Rubio said confronting China would involve building U.S. domestic industrial capacity.

“If we stay on the road we’re on right now, in less than 10 years, virtually everything that matters to us in life will depend on whether China will allow us to have it or not. Everything from the blood pressure medicine we take, to what movies we get to watch, and everything in between, we will depend on China for it,” Rubio said.

“That’s an unacceptable outcome.”

The outgoing Biden administration has taken measures to block China’s access to semiconductor technology and kept in place some policies toward China from Trump’s first term, but Trump has said he will impose many more tariffs on Chinese goods.

Rubio has long been one of Congress’ leading advocates for stronger China policy. His support for Hong Kong democracy protesters earned him Chinese sanctions in 2020, meaning he could be the first secretary of state under active Chinese travel restrictions.

He also said Washington must help the self-governing island of Taiwan with its so-called porcupine strategy to discourage an invasion by making it harder for China to attack.

Unless Washington makes “dramatic” changes, Rubio said, it would have to deal with the prospect of a “cataclysmic military intervention” in the Indo-Pacific before the end of the decade.

“We need to wrap our head around the fact that unless something dramatic changes, like an equilibrium where they conclude that the costs of intervening in Taiwan are too high, we’re going to have to deal with this before the end of this decade,” Rubio said.

WORLD IN CHAOS

In his opening statement, Rubio said he sees a world in chaos where it will not be easy to restore order.

“It will be impossible without a strong and a confident America that engages in the world, putting our core national interests once again above all else,” Rubio said.

The son of immigrants from Cuba, Rubio would be the first person of Hispanic origin serving as the top U.S. diplomat.

He also said strong U.S. backing for Israel would continue. “I’m confident in saying that President Trump’s administration will continue to be perhaps the most pro-Israel administration in American history,” he told the senators, who learned about the Gaza ceasefire deal during the five-hour hearing.

Senators from both parties praised his nomination.

“You’ve earned yourself one of the hardest jobs in America. But after serving with you for so many years, I’m confident you are the right person. We need to take on these threats,”

said Senator Jim Risch, the committee’s Republican chairman.

“I believe you have the skills and are well qualified to serve as Secretary of State,” Senator Jeanne Shaheen, the top foreign relations Democrat, said.

Rubio’s friendly hearing contrasted sharply with the grilling of some other Trump nominees, such as former Fox News host Pete Hegseth, whose confirmation hearing on Tuesday focused on culture war issues, not international policy.

UKRAINE WAR

Some core Trump supporters had seen Rubio as out of step with Trump’s “America First” approach to government. Rubio was a Trump rival in the race for the 2016 Republican presidential nomination.

But his views recently have aligned more closely with the party leader’s.

Last year, Rubio was one of 15 Republican senators to vote against a big military aid package to help Ukraine resist Russia, after voting in favor of aid in 2022. Trump has been critical of Democratic President Joe Biden’s military assistance for Ukraine as it fights Russia and Rubio said he voted against the legislation because it did not include money to address immigration over the border with Mexico, a top Trump concern.

Rubio said it should be U.S. policy that the war must end, and said reaching an agreement to stop the fighting would involve concessions from both Moscow and Kyiv, suggesting Ukraine would have to give up its goal of regaining all the territory Moscow has taken in the last decade.

“I think it’s important that the Ukrainians have leverage, but they also will have to make concessions to reach this agreement,” Rubio said.

(Reporting by Patricia Zengerle, Simon Lewis, Doina Chiacu and Michael Martina; Editing by Don Durfee, Deepa Babington, Alistair Bell and Nick Zieminski)

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