Ted Cruz Urges Scott Bessent to Go Around Congress and Enact $200B Tax Cuts
On Tuesday, Republican Sens. Ted Cruz of Texas and Tim Scott of South Carolina formally urged Treasury Secretary Scott Bessent to enact roughly $200 billion in tax cuts without the approval of Congress.
In a letter obtained by The Washington Post, Cruz and Scott asked the Treasury Department to use what they characterize as its existing executive authority to implement significant cuts in capital gains taxes, the levies on profits from the sale of assets such as stocks, homes, and businesses, arguing that such action would spur investment, job creation, and relief for American taxpayers.
The proposal centers on changing how capital gains are calculated for inflation, a policy often referred to as “indexing capital gains for inflation.” Under the idea, the original purchase price of an asset would be adjusted to reflect inflation before taxable gain is calculated, reducing how much income investors must report to the Internal Revenue Service when they sell that asset. The senators say this adjustment is a prudent and pro-growth step that could invigorate the economy.
Cruz’s office has estimated the shift would reduce tax revenue by about $200 billion. Instead of requiring Congress to pass new legislation, the senators contend that the Treasury Department can take this step unilaterally, using existing regulatory authority. They frame the move as entirely within the purview of executive branch power and urge Bessent to act accordingly.
The push for executive action follows the passage of the One Big Beautiful Bill Act in 2025, a massive tax and spending package enacted by the Republican-controlled Congress and signed by President Donald Trump‘s administration that already made permanent many of the 2017 Trump-era tax cuts. The GOP hopes additional tax relief will bolster its standing with voters ahead of the 2026 midterm elections.
However, legal scholars and some administration officials disagree with Cruz and Scott’s assessment of the Treasury’s authority. A 1992 opinion by the Justice Department’s Office of Legal Counsel historically concluded that significant alterations to how capital gains are taxed would require an act of Congress rather than a unilateral regulatory act by the executive branch.
Analyses from nonpartisan budget models such as the Penn Wharton Budget Model have consistently found that indexing capital gains for inflation would predominantly benefit wealthier taxpayers who hold significant investment assets. One projection during Donald Trump’s first term indicated that roughly 86 percent of the gains would go to the top 1 percent of earners, while the bottom 80 percent of taxpayers would receive only about 1 percent of the benefit.
