Trump Tax Cuts: $2.4T Deficit Increase
President Trump’s tax bill is poised too dramatically increase the national deficit by $2.4 trillion over the next decade,according to the Congressional Budget Office (CBO). This “One Big Lovely Bill Act,” which includes $3.7 trillion in tax cuts, faces fierce opposition as Republicans race to pass it by July 4. Democrats already condemn the bill as a regressive measure. The proposed legislation could have widespread effects, proposing notable spending cuts and changes to social programs. Lawmakers are scrutinizing the budgetary impacts embedded within the complex, 1,000-plus-page package. Read the detailed report from News Directory 3 to understand the specifics, including the potential impact on individual income tax breaks and a proposed debt limit increase. Discover what’s next with this sweeping tax overhaul.
CBO: Trump Tax Bill to Boost Deficit, Faces Opposition in Congress
President Donald Trump’s proposed tax bill, dubbed the “One Big Beautiful Bill Act,” is projected to increase the national deficit by $2.4 trillion over the next decade, according to the congressional Budget office (CBO). The nonpartisan analysis, released Wednesday, also estimates $3.7 trillion in tax cuts and a $1.3 trillion reduction in federal spending during the same period.
The CBO’s findings arrive as Trump pushes Congress to pass the sweeping legislation by July 4. Lawmakers are closely examining the budgetary impacts of the 1,000-plus page package. The bill extends individual income tax breaks approved in 2017 and introduces new measures, including tax-free tips. It also allocates $350 billion for border security and national security enhancements.
Republicans, who control both the House and Senate, face strong Democratic opposition. Democrats have criticized the bill, calling it Trump’s “big, ugly bill.”
To offset revenue losses, the bill proposes phasing out green energy tax credits established during President joe Biden’s term.It also introduces new work requirements for adults up to age 65 on Medicaid and the Supplemental Nutrition Assistance Program (SNAP), starting in December 2026.These changes are projected to decrease spending on those programs.
The legislation also seeks a $4 trillion increase to the national debt limit, currently at $36 trillion. The Treasury Department anticipates the debt limit will need to be raised this summer to cover existing financial obligations.
Prior to the CBO’s report, the White House and Republican leaders preemptively criticized the budget office.White House Press Secretary Karoline Leavitt claimed the CBO has been “historically wrong.” Senate Majority Leader John Thune said the CBO underestimated revenue from the 2017 tax cuts. The CBO reported that receipts were 5.6% higher than predicted last year,largely due to inflation during the COVID-19 pandemic in 2021.
Leavitt also suggested potential bias among CBO employees, despite strict ethical guidelines that restrict campaign donations and political activity to ensure impartiality. The CBO had previously estimated that the bill’s proposed changes to Medicaid and other programs would result in 8.6 million fewer people having health care and 4 million fewer receiving food stamps each month.
What’s next
The bill faces continued debate and amendment as it moves through Congress. Negotiations between Republicans and Democrats are expected to continue as the July 4 deadline approaches.