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Study finds that proposed Trump tax legislation could result in a significant increase in the United States' national debt by multiple trillions of dollars. - Boost in National Debt with Trump's Tax Proposal: Billion-Dollar Increase Forecasted
A new analysis from the nonpartisan Congressional Budget Office (CBO) suggests that the tax and spending bill proposed by President Donald Trump could balloon the US budget deficit by a jaw-dropping $2.8 trillion over the next decade. The CBO dropped this bombshell on Tuesday, taking into account positive economic effects. Two weeks ago, without these advantages, the CBO had predicted an increase in public debt of $2.4 trillion. Including interest costs, the figure jumps to a staggering $3 trillion.
Political Disharmony over the Bill
This latest projection contradicts the rosy picture painted by Trump's Republican allies, who claim the comprehensive bill would invigorate the US economy, thereby decreasing public debt through higher revenues. In defiance, Senate Republican leader John Thune reaffirmed the GOP's stance on Tuesday, declaring, "We believe it will lead to a stronger and more prosperous America."
The bill, named the "One Big Beautiful Bill Act," was passed by the House of Representatives in May. The Senate Republicans are currently engaged in heated debates over a revised version. To become law, both chambers of Congress must reach a consensus on a common version, which can then be presented to Trump.
The draft extends the massive tax cuts from Donald Trump's initial term from 2017 to 2021, which were set to expire at year's end. To offset this extension, there are drastic cuts planned for the Medicaid healthcare program, primarily serving low-income and elderly Americans.
- Tax Reform
- Donald Trump
- USA
the big beautiful bill
economic effects
The CBO's latest assessment is a stark reminder of the potential financial repercussions of the One Big Beautiful Bill Act. The bill includes massive tax cuts totaling around $3.7 trillion and spending reductions of approximately $1.2 trillion over the next decade. Despite the spending cuts, the net effect is a significant increase in the deficit due to the larger tax reductions compared to the spending decreases. Changes to Medicaid and the Affordable Care Act embedded in the bill could lead to 11 million more Americans losing their health insurance coverage by 2034, adding to the budget pressure while raising concerns about coverage losses. It's worth noting that the analysis does not yet fully account for potential macroeconomic effects of the bill or the cost of servicing the added debt.
The new analysis from the Congressional Budget Office regarding the One Big Beautiful Bill Act, proposed by President Donald Trump, suggests a potential increase in the US budget deficit by $2.8 trillion over the next decade, due primarily to massive tax cuts and changes in healthcare programs like Medicaid. Underneath the proposed bill, over 11 million Americans could lose their health insurance coverage by 2034, potentially adding more budget pressure and raising concerns about coverage losses. This latest projection from the CBO underscores the financial implications of the bill amid ongoing debates about its impact on business, finance, politics, and general-news in the USA.
