Treasury Secretary Scott Bessent Accuses Liberal States of Blocking Federal Tax Cuts

Secretary Bessent Condemns State Actions on Federal Tax Relief

U.S. Secretary of the Treasury Scott Bessent issued a strong statement on December 10, 2025, accusing several Democrat-led states of actively blocking crucial provisions of a recently enacted federal tax relief bill. According to Bessent, these states are preventing their residents from benefiting from what he described as 'historic tax cuts' designed to put more money into the pockets of American families and workers.

Scott Bessent, who was sworn in as the 79th Secretary of the Treasury on January 28, 2025, under President Donald Trump's second administration, highlighted the ongoing refusal by these states to conform to the federal legislation. He characterized their actions as 'a blatant act of political obstructionism' and 'partisan stonewalling,' directly impacting the financial well-being of their citizens.

The 'One Big Beautiful Bill Act' and Its Provisions

The federal tax relief measure at the center of this dispute is colloquially known as the 'One Big Beautiful Bill Act' (OBBBA), officially Public Law 119-21. This comprehensive bill was signed into law by President Donald Trump on July 4, 2025. It encompasses a wide array of tax and spending policies intended to form a core part of the administration's agenda.

Key provisions of the OBBBA, as detailed by the Treasury and other sources, include:

• No Tax on Tips: A new deduction for service industry staff's qualified tips.
• No Tax on Overtime: A new deduction for individuals receiving qualified overtime compensation.
• A new tax deduction for seniors dependent on Social Security.
• Permanent extension of individual tax rates from 2017.
• An increased cap on the state and local tax (SALT) deduction to $40,000 for certain taxpayers.
• An expanded child tax credit.
• A tax deduction on American-made vehicles.
• The creation of 'Trump accounts,' which are tax-deferred accounts for children.

These provisions aim to provide broad financial relief across various segments of the American population.

States' Opposition and Alleged Impact on Residents

Secretary Bessent specifically named Colorado, New York, Illinois, and the District of Columbia as 'liberal strongholds' that are deliberately blocking their residents from receiving these federal benefits at the state level. The mechanism of this obstruction reportedly involves the states' refusal to align their tax codes with the new federal law, or by taking state-level actions that counteract the federal cuts.

For instance, Colorado's Democratic governor reportedly called a special legislative session after the federal tax cuts were estimated to create a $783 million hole in the state's budget. Similarly, officials in Oregon are considering decoupling from some of the federal tax changes to avoid losing state tax revenue, potentially allowing them to continue taxing tips and overtime wages that are now federally exempt. Bessent argued that by denying access to these tax cuts, state governors and legislators are 'forcing hardworking Americans to shoulder higher state tax burdens,' thereby 'robbing them of the relief they deserve.'

Treasury's Call for Conformity

In his statement, Secretary Bessent urged the 'holdout states to immediately conform and stop punishing their citizens for partisan games.' He emphasized that the administration's vision is clear: 'real relief for the forgotten men and women of America, certainty for businesses, and momentum for growth.' The Treasury Department affirmed its readiness to collaborate with any state committed to delivering on this promise, while also stating it 'will not stand idly by as this obstructionism drags down the national recovery.' The dispute underscores a significant federal-state tension over economic policy and its implementation.