President Donald Trump’s big bill making its way through Congress will cut taxes by $3.7 trillion but also increase deficits by $2.4 trillion over the next decade, according to an analysis released Wednesday by the nonpartisan Congressional Budget Office.
The CBO also said the package would reduce federal outlays, or spending, by $1.3 trillion over that period.
The analysis comes at a crucial moment in the legislative process as Trump is pushing Congress to have the final product on his desk to sign into law by Fourth of July. The work of the CBO, which for decades has served as the official scorekeeper of legislation in Congress, will be weighed by lawmakers and others seeking to understand the budgetary impacts of the sprawling 1,000-page plus package.
Ahead of CBO’s release, the White House and Republican leaders criticized the budget office in a pre-emptive campaign designed to sow doubt in its findings.
White House Press Secretary Karoline Leavitt said CBO has been “historically wrong” and Senate Majority Leader John Thune said the CBO was “flat wrong” because it underestimated the potential revenue from Trump’s first round of tax breaks in 2017. The CBO last year said receipts were $1.5 trillion or 5.6% greater than predicted, in large part because of the “burst of inflation” during the COVID-19 pandemic in 2021.
Leavitt also suggested that CBO’s employees are biased, even though certain budget office workers face strict ethical rules — including restrictions on campaign donations and political activity — to ensure objectivity and impartiality.
Alongside the costs of the bill, the CBO had previously estimated that 8.6 million people would no longer have health care and 4 million fewer would have food stamps each month due to the legislation’s proposed changes to Medicaid and other programs.
The bill, called the “One Big Beautiful Bill Act” after the president’s own catch phrase, is grinding its way through Congress, as the top priority of Republicans, who control both the House and Senate — and face stiff opposition from Democrats at every step in the process.
Democrats call it Trump’s “big, ugly bill.”
All told, the package seeks to extend the individual income tax breaks that had been approved in 2017, but will expire in December if Congress fails to act, while adding new ones, including no taxes on tips. It also includes a massive buildup of $350 billion for border security, deportations and national security.
(AP)
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2 Responses
1. We can always print more money to cover the deficit. Unlike Germany in the 1920s, this will all be done electronically. No messy paper bills. The only way you will know it is happening is from the increase in inflation (which is also not a problem if you are a debtor whose loans are not indexed to anything).
2. This time Trump’s most notable tax cut (SALT – state and local taxation) is designed to subsidize spending by the Democrats in rich states, and to focus the benefit on the richest taxpayers in those states. While advocated by suburban Republicans, in affluent districts, it does nothing for most MAGA supporters (who will continue to take the standard deduction) or for the states which lower taxes (which tend to be the “red” states).
Statistically, whenever taxes are lowered, the US government collects increased revenue. In fact, even Obama acknowledged this in his Presidential debate. So the discussion is moot, and is only the CBO trying to help their beloved Democrats. IMHO