Budget office says Trump's tax law will add $3.4 trillion to deficits, leave 10 million uninsured
More than 10 million people will be uninsured under the law in 2034 because of the law, CBO found, an improvement from an earlier projection that found 11.8 million people losing coverage over the decade.
The release of the CBO analysis Monday comes at the end of a grueling legislative fight, but at the start of a longer political struggle to come as the two parties clash over the law's impact on the economy, healthcare and government programs. Republicans are touting the bill as a tax cut for all Americans, yet a recent AP-NORC poll found about two-thirds of U.S. adults expect the new tax law will help the rich as Democrats attack the legislation.
The bill Trump signed into law on July 4 extended current tax rates for individuals that were set to expire at the end of this year and temporarily created new tax deductions for tips, overtime and auto interest loans for new vehicles assembled in the U.S. Republicans also used the bill to cut future spending on Medicaid and food assistance, and to phase out certain clean energy tax credits more quickly.
Democrats were quick to highlight the CBO's findings.
'Today's report reminds us of something: facts are stubborn and the facts are clear,' said Senate Democratic leader Chuck Schumer. 'The big, ugly betrayal is a loser for the country and will be a loser for the Republicans.'
Republicans say the bill was critical to ensure most Americans didn't experience a significant tax increase next year. Trump and Republicans have also insisted that economic growth will exceed the CBO's projections for the next decade, erasing the projected deficits as more revenue comes into the Treasury than anticipated.
Nonpartisan fiscal watchdogs also highlighted the CBO's latest projection. Maya MacGuineas, president of the Committee for a Responsible Federal Budget, said there will be a shorter-term 'sugar high' as stimulus makes its way through the economy. But modelers from across the ideological spectrum agree that any sustained economic changes are likely to be modestly beneficial, or negative.
Monday Mornings
The latest local business news and a lookahead to the coming week.
'And not one serious estimate claims this bill will improve our fiscal situation,' MacGuineas said. 'Rather, positive growth effects are likely to be swamped by the effects of higher debt and interest rates.'
The CBO said more than $1 trillion in deficit savings is generated through the health portions of the bill, which includes new work requirements for certain Medicaid beneficiaries in states that expanded the program through the Affordable Care Act.
Some late changes on Medicaid were made to the bill to win over holdouts. One of those changes added a $50 billion fund for rural hospitals.
__
Associated Press writer Mary Clare Jalonick contributed to this report.
Hashtags
Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
CBC
15 minutes ago
- CBC
U.S. slaps 20.56% anti-dumping duties on Canadian softwood lumber
Social Sharing The U.S. Commerce Department has decided to hike anti-dumping duties on Canadian softwood to 20.56 per cent, with B.C. lumber organizations calling them unjustified, punitive and protectionist. The hiked softwood lumber duties come amid the growing trade war between Canada and the U.S., and represent the latest blow to B.C.'s beleaguered forestry industry. B.C. Forests Minister Ravi Parmar described the long-awaited rate hike as a "gut punch" for B.C.'s forestry industry which has seen thousands of workers laid off over the last few years. "U.S. President Donald Trump has made it his mission to destroy Canada's economy, and there is no sector that has faced more of that than the forestry sector," he told CBC News. "This is a big deal for our workers. This is going to have a significant impact. It will lead to curtailments," he added. The B.C. government has been urging the federal government to prioritize the softwood lumber industry in trade discussions with the U.S., and Parmar said the hiked duties would also impact U.S. homeowners needing lumber to rebuild or renovate their homes. "This is going to mean that Americans, in particular middle-class Americans, are going to be paying more to the tune of $15,000 to $20,000 more USD to purchase or to build a home." The B.C. Lumber Trade Council says in a statement that if the U.S. department's pending review on countervailing duties is in line with its preliminary results, the combined rate against Canadian softwood shipped to the United States will be well over 30 per cent. In April, the preliminary combined rate on Canadian softwood lumber was reported to be 34.45 per cent, up from the previous 14.54 per cent. Friday's decision is a final determination, with Parmar saying it would go into effect in the U.S. Federal Register shortly. WATCH | Duties hiked on softwood lumber: U.S. hikes anti-dumping duties on Canadian softwood lumber | Hanomansing Tonight 17 hours ago U.S. lumber producers have long maintained that Canadian stumpage fees, for harvesting on Crown land, are an unfair government subsidy. B.C.'s Independent Wood Processors Association says in a statement that the U.S. Commerce Department's decision this week to raise duties also includes a requirement for Canadian companies to retroactively remit duties for products shipped to the United States since Jan.1, 2023. WATCH | B.C. premier urges feds to prioritze lumber deal: Will a softwood lumber deal be part of Canada-U.S. trade negotiations? | Power & Politics 5 days ago As premiers meet ahead of a briefing from the prime minister on the state of Canada-U.S. trade negotiations on Tuesday, B.C. Premier David Eby tells Power & Politics there may be 'an opportunity' for Canada to strike a deal on long-standing softwood lumber disputes with the Americans. Association chair Andy Rielly says in a statement that the requirement to pay duties on products shipped in the last 31 months could not only force small B.C. producers to shut down, but may also threaten operators' personal assets as they may have to risk using their homes as collateral to secure bonds to pay. Prime Minister Mark Carney said earlier this month that a future trade agreement with the United States could include quotas on softwood lumber, an area that has caused friction between the two countries for years before the latest trade war. Producer urges province to change conditions The United States has long been the single largest market for B.C. lumber exports, representing over half the market for the approximately $10-billion industry. But amid a series of challenges for the province's forestry industry — including a mountain pine beetle infestation that has killed hundreds of thousands of trees — mills have been closing around the province in recent years, and major forestry companies are opening up new mills in the United States. In 2023, numbers from Statistics Canada showed B.C. had lost more than 40,000 forest-sector jobs since the early 1990s. Kim Haakstad, the CEO of the B.C. Council of Forest Industries, said the B.C. government should work to improve the production environment in the province to prevent future mill closures. In a statement, the council said that by activating timber sales, fast-tracking permits and cutting through regulatory gridlock, the province could send a signal that it is serious about rebuilding a sustainable forest sector. WATCH | B.C.'s forestry industry struggles amid tariff war: Trump's tariff war could collapse B.C.'s struggling forest industry 4 months ago B.C.'s forest industry is already in serious trouble, and U.S. President Donald Trump's tariff war is pushing it closer to the brink of collapse. CBC's Lyndsay Duncombe breaks down what's at stake for lumber producers and how they're looking to adapt. Haakstad argued that if the industry could get production levels back to historic levels, it could help keep forestry-dependent communities vibrant into the future. "That will bring more than $300 million to the provincial government, as well, to help address the deficit situation we're in," Haakstad said. Kurt Niquidet, the president of the B.C. Lumber Trade Council, highlighted that Trump also has initiated a federal investigation into the U.S. imports of lumber and timber citing "national security," which could further impact B.C.'s forestry industry when combined with the tariffs. "Softwood lumber is quite important for the United States. They can only supply about 70 per cent of their softwood lumber demand, and they're importing 30 per cent from elsewhere," he told CBC News.
CTV News
an hour ago
- CTV News
Trump says Japan will invest US$550 billion in U.S. at his direction. It may not be a sure thing
A staff member distributes an extra edition of the Yomiuri Shimbun newspaper reporting that President Donald Trump announced a trade framework with Japan on Tuesday, Wednesday, July 23, 2025, in Tokyo. The headline reads "U.S., a 15% tax on goods imported from Japan." (AP Photo/Eugene Hoshiko) WASHINGTON — U.S. President Donald Trump is bragging that Japan has given him, as part of a new trade framework, US$550 billion to invest in the United States. It's an astonishing figure, but still subject to negotiation and perhaps not the sure thing he's portraying. 'Japan is putting up $550 billion in order to lower their tariffs a little bit,' Trump said Thursday. 'They put up, as you could call it, seed money. Let's call it seed money.' He said 90 per cent of any profits from the money invested would go to the U.S. even if Japan had put up the funds. 'It's not a loan or anything, it's a signing bonus,' the Republican president said, on the trade framework that lowered his threatened tariff from 25 per cent to 15 per cent, including on autos. A White House official said the terms are being negotiated and nothing has been formalized in writing. The official, who insisted on anonymity to detail the terms of the talks, suggested the goal was for the $550 billion fund to make investments at Trump's direction. The sum is significant: It would represent more than 10 per cent of Japan's entire gross domestic product. The Japan External Trade Organization estimates that direct investment into the U.S. economy topped $780 billion in 2023. It is unclear the degree to which the $550 billion could represent new investment or flow into existing investment plans. What the trade framework announced Tuesday has achieved is a major talking point for the Trump administration. The president has claimed to have brought trillions of dollars in new investment into the U.S., though the impact of those commitments have yet to appear in the economic data for jobs, construction spending or manufacturing output. The framework also enabled Trump to say other countries are agreeing to have their goods taxed, even if some of the cost of those taxes are ultimately passed along to U.S. consumers. On the $550 billion, Japan's Cabinet Office said it involves the credit facility of state-affiliated financial institutions, such as Japan Bank for International Cooperation. Further details would be decided based on the progress of the investment deals. Japanese trade negotiator Ryosei Akazawa, upon returning to Japan, did not discuss the terms of the $550 billion investment. Akazawa said he believes a written joint statement is necessary, at least on working levels, to avoid differences. He is not thinking about a legally binding trade pact. The U.S. apparently released its version of the deal while Japanese officials were on their return flight home. 'If we find differences of understanding, we may have to point them out and say 'that's not what we discussed,'' Akazawa said. The U.S. administration said the fund would be invested in critical minerals, pharmaceuticals, computer chips and shipbuilding, among other industries. It has said Japan will also buy 100 airplanes from Boeing and rice from U.S. farmers as part of the framework, which Treasury Secretary Scott Bessent said would be evaluated every three months. 'And if the president is unhappy, then they will boomerang back to the 25 per cent tariff rates, both on cars and the rest of their products. And I can tell you that I think at 25, especially in cars, the Japanese economy doesn't work,' Bessent told Fox News' 'The Ingraham Angle.' Akazawa denied that Bessent's quarterly review was part of the negotiations. 'In my past eight trips to the United States during which I held talks with the president and the ministers,' Akazawa said. 'I have no recollection of discussing how we ensure the implementation of the latest agreement between Japan and the United States.' He said it would cause major disruptions to the economy and administrative processes if the rates first rise to 25 per cent as scheduled on Aug. 1 and then drop to 15 per cent. 'We definitely want to avoid that and I believe that is the understanding shared by the U.S. side,' he said. On buying U.S. rice, Japanese officials have said they have no plans to raise the current 770,000-ton 'minimum access' cap to import more from America. Agricultural Minister Shinjiro Koizumi said Japan will decide whether to increase U.S. rice imports and that Japan is not committed to a fixed quota. Trump's commerce secretary, Howard Lutnick, has suggested that the Japanese agreement is putting pressure on other countries such as South Korea to strike deals with the U.S. Trump, who is traveling in Scotland, plans to meet on Sundayv with European Commission President Ursula von der Leyen to discuss trade. 'Whatever Donald Trump wants to build, the Japanese will finance it for him,' Lutnick said Thursday on CNBC. 'Pretty amazing.' Yamaguchi reported from Tokyo. Josh Boak And Mari Yamaguchi, The Associated Press
Vancouver Sun
2 hours ago
- Vancouver Sun
U.S. Christian musician Sean Feucht show set for Alberta legislature grounds in Edmonton
A pro-Trump and Christian singer whose events on his east coast Canadian tour have had to be moved to alternate venues after being cancelled is slated to play at the Alberta legislature grounds in August. U.S. musician Sean Feucht has faced protests and cancellations this week on the first leg of his cross-country tour which is slated to stop on Aug. 22 in Edmonton for a performance at the grounds' south bandshell. A spokesperson for Alberta Infrastructure said in a statement tour organizers had submitted an incomplete event permit application for the event. Start your day with a roundup of B.C.-focused news and opinion. By signing up you consent to receive the above newsletter from Postmedia Network Inc. A welcome email is on its way. If you don't see it, please check your junk folder. The next issue of Sunrise will soon be in your inbox. Please try again Interested in more newsletters? Browse here. 'We are taking steps to help organizers submit a complete application,' it reads, noting the event must comply with 'security protocols, public safety, and venue guidelines.' The statement did not address questions about if the show would go ahead or the possible need for heightened security. The guidelines for use of the Alberta Legislature Grounds state applications must be submitted four weeks in advance, with applicants mandated to have at least $2 million in liability insurance, a security plan, and proof of permits and licences, among other requirements. Feucht describes himself as a musician, missionary, author and activist, and has drawn opposition for his affinity for U.S. President Donald Trump and the Make America Great Again Movement as well as his views on abortion, gender, and the LGBT community. He was scheduled to play at the York Redoubt National Historic Site in Halifax last Wednesday but Parks Canada revoked the event's permit, citing 'evolving safety and security considerations' amid potential protests and following consultation with police. The event later went ahead when a local farmer opened his field for the singer and his audience. Since then, events in Charlottetown, Fredericton, Quebec City, Moncton, and Gatineau, Que. have been cancelled with organizers citing security concerns, permitting issues, or local codes of conduct. On social media, Feucht said his shows went on after alternate venues were found. 'Venues have now been replaced and these cities will hear from lawyers soon,' he posted late Thursday. On Friday night, his event in Montreal went ahead amid protests and a smoke bomb being thrown on stage despite a warning from the city that the church he was performing at hadn't secured the proper permit. He stated on social media that organizers had secured a permit that was later cancelled, and claimed to be bringing his experience to the attention of the U.S. president. 'I've been in touch with senior White House officials and they are watching what is unfolding with blatant Christian persecution in Canada,' he posted. Feucht was scheduled to play Sunday in Vaughn, Ont., outside of Toronto but the city told Postmedia that it had cancelled the event's permit 'on the basis of health and safety as well as community standards and well-being.'
