Topline
The Trump-backed budget and spending package making its way through Congress will increase the federal deficit by $2.8 trillion by 2034, the nonpartisan Congressional Budget Office said in a report released on Tuesday—about $400 billion higher than its previous estimate.
The nonpartisan Congressional Budget Office predicted the megabill would spur economic growth, but … More
Key Facts
The “Big Beautiful Bill,” a megabill extending tax cuts passed during President Donald Trump’s first term and enacting some of his campaign promises, is under review in the Senate, where it faces opposition from Democrats and some Republicans.
In a separate report issued last week, CBO estimated the bill would increase the deficit by $2.4 trillion in the next 10 years—and cuts proposed by House Republicans to programs like Medicaid and SNAP would not offset the revenue loss from tax cuts.
The CBO estimates the bill would grow the economy, increasing real GDP growth by 0.5% on average over the next 10 years.
However, the economic growth would be offset by a sharp rise in interest payments—costing the government an estimated $441 billion in interest payments over the next 10 years.
The new report, issued Tuesday by the nonpartisan office alongside staff from the Joint Committee on Taxation, analyzes how the bill would impact “key macroeconomic variables,” including GDP growth, inflation and interest rates.
Republican leaders in Congress and the White House have argued that the extensions of the tax cuts passed during the first Trump administration would fuel economic growth, and income from tariffs would help cover the revenue loss.
The White House previously lashed out at the CBO after its initial report on the bill, attacking an office traditionally seen as nonpartisan that provides budget analysis for lawmakers in both parties.
Key Background
Earlier this year, Trump asked Congress to pass a bill combining extensions on his 2017 tax cuts with a spending package, and get it ready for him to sign into law by July 4. The bill includes several key legislative priorities for Trump, including his promises to eliminate taxes on tips and overtime. The massive spending package immediately drew criticism from fiscal conservatives, including legislators like Rep. Thomas Massie, R-Ky., as well as billionaire Elon Musk, who called it “a disgusting abomination” in a post on X. Musk’s opposition to the bill drove a wedge between him and the president, coinciding with his departure from the Department of Government Efficiency. The House narrowly passed its version of the bill in May after a 215-214 vote.
Tangent:
Senate Republicans unveiled their own version of the “Big Beautiful Bill” Monday, which includes $800 billion in cuts to Medicaid to help offset the cost of the tax cuts. The CBO has not released an estimate on how this would impact the deficit, and Tuesday’s report only analyzes the proposal passed by the House.
Big Number:
$1,600. That’s how much the CBO estimates the bill would cost the lowest income Americans per year, according to a separate report last week. These extra costs would rise due to cuts to safety net programs, including Medicaid and the Supplemental Nutrition and Assistance Program, or SNAP.
Further Reading
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