Scott Bessent: The Argentina Deal Is Not a Bailout and Won’t Cost Taxpayers a Cent

U.S. Treasury Secretary Scott Bessent on Sunday dismissed claims that the new $20 billion agreement with Argentina is a bailout package. According to him, it’s a technical swap operation, not financial aid — and it will not cost American taxpayers anything.

A Swap, Not a Rescue: No Taxpayer Money Involved In an interview with NBC’s Meet the Press, Bessent stressed that the transaction is being carried out through the Exchange Stabilization Fund (ESF) — a reserve fund managed by the Treasury Department, not by Congress. “This is not a bailout. It’s a swap line from the Exchange Stabilization Fund, which has never recorded a loss — and it won’t this time either,” Bessent said. The fund, currently holding around $211 billion, was last used during the COVID-19 crisis and the U.S. banking panic of 2023. Most of its assets consist of Special Drawing Rights (SDRs) from the International Monetary Fund, not taxpayer dollars.

Timed to Support Milei Ahead of Elections The agreement with Argentina was signed just days before the country’s midterm elections, which are crucial for President Javier Milei.

According to officials in both Washington and Buenos Aires, the deal was reached behind closed doors, after which the U.S. bought Argentine pesos on the open market and finalized a $20 billion swap line with Argentina’s central bank. The move aims to help Milei defend his fiscal and market reforms — including deep spending cuts, deregulation, and a downsized state apparatus — from potential repeal by opposition forces. Politically and ideologically, these reforms align closely with Trump’s economic philosophy.

Wall Street Skepticism and U.S. Quiet Diplomacy While Wall Street analysts argue that the Argentine peso is overvalued, the Treasury Department has declined to elaborate on the details of the operation.

Asked about criticism, Bessent was unfazed: “We’re supporting America’s allies in Latin America. This move is as much about politics as it is about economics,” he told NBC. According to Treasury officials, the initiative should be seen as a signal of strength, not a subsidy — a demonstration of U.S. economic and diplomatic power in support of reform-minded governments.

The Trump Administration Aims to “Set the Tone” in Latin America Bessent openly admitted that the Argentina deal carries strategic significance. “We want to set the tone in Latin America. We don’t want Argentina turning into another Venezuela — a failed narco-state,” he declared. He added that other regional governments — including Bolivia, Ecuador, and Paraguay — are closely watching how Washington responds to Milei’s reforms and the support he receives. According to Bessent, this approach could become a model for regional stabilization. “It’s better to use American economic power early — to stabilize a friendly government and show it the way,” he concluded.

The Dollar as a Geopolitical Weapon While the Exchange Stabilization Fund has quietly been used in the past to influence international affairs, this is the first time since 2020 that it has been deployed so openly.

At a moment when the dollar remains strong and the peso under attack, the United States is throwing its monetary weight behind Argentina’s struggle — without making it look like charity. Washington’s message is clear:

America can stabilize its allies without bailouts — and without spending a single taxpayer dollar.

#argentina , #ScottBessent , #JavierMilei , #economy , #USPolitics

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