Administration Ted Cruz, Tim Scott asking Treasury to approve $200B tax cut without congressional approval by Ashleigh Fields - 03/03/26 6:01 PM ET by Ashleigh Fields - 03/03/26 6:01 PM ET Share ✕ LinkedIn LinkedIn Email Email NOW PLAYING GOP Sens. Ted Cruz (Texas) and Tim Scott (S.C.) are asking the Treasury Department to approve a $200 billion tax cut without prior authorization from Congress.  The two senators have asked the Trump administration to cut capital gains taxes on investors by adjusting the basis for inflation arguing it would boost savings, spur investment and create jobs nationwide.  “This inflation tax unfairly penalizes savers and locks up capital that would otherwise flow back into the economy through new investment and higher wages, which slows economic growth,” Cruz and Scott wrote in their letter to Treasury Secretary Scott Bessent, which was reviewed by The Hill. The Washington Post was the first to report on the development, which follows tax relief cemented by last year’s spending bill.  Republicans have previously backed plans to index capital gains despite concerns that the effort would disproportionately benefit the wealthy. A 2018 Penn Wharton Budget Model forecast found that indexing capital gains to inflation would reduce government revenues by $102 billion over a decade, with 86 percent of the benefits going to the top 1 percent.  Harvard professor Jason Furman said for Cruz and Scott’s proposal to work the tax cut would need to trigger other adjustments based on inflation. “Not good tax policy if you don’t adjust other parts of the system for inflation, most importantly reducing people’s interest deduction to only real interest–no longer allowing deductions for the inflation component of interest,” he wrote in a post on the social platform X, in response to Kyle Pomerleau, a senior fellow at the  American Enterprise Institute, who said the measure is illegal. Pomerleau’s evaluation follows a 1992 opinion by the Justice Department’s Office of Legal Counsel that said such changes to tax policy would require approval from Congress.  While the plan could face severe legal challenges, Cruz and Scott, the latter of whom chairs the Senate Banking, Housing and Urban Affairs Committee, say the tax relief would resolve some instability in the housing market.  “Many Americans are choosing not to sell their homes to avoid substantial capital gains taxes, creating a lock- in effect that discourages downsizing even when their homes no longer meet their current needs,” the two lawmakers wrote.  “Adjusting the capital gains cost basis for inflation incentivizes those who have held property for decades to downsize and list their single-family homes for sale—increasing the supply of family housing,” they added. Last week, mortgage rates fell below 6 percent for the first time in more than three years, marking a new opening for homebuyers. The 10-year Treasury yield also reached its lowest closing level since November, causing some additional relief for mortgage rates. While it’s unclear how Bessent will respond to Cruz and Scott’s proposal, it could be received as a nod to President Trump ’s economic agenda after the leader said he’d give “ special attention ” to the housing market last month.  Add as preferred source on Google Tags Jason Furman Scott Bessent Sen. Ted Cruz Sen. Tim Scott tax cut Ted Cruz Tim Scott Treasury Secretary Scott Bessent Copyright 2026 Nexstar Media Inc. All rights reserved. This material may not be published, broadcast, rewritten, or redistributed. Share ✕ LinkedIn LinkedIn Email Email More Administration News See All Administration Live updates: Key primary elections underway in Texas, North Carolina by The Hill Staff 11 minutes ago Administration  /  11 minutes ago