Republican senate tax bill would add $3.3 trillion to the U.S. debt load, CBO says
WASHINGTON — The changes made to U.S. President Donald Trump's big tax bill in the Senate would pile trillions onto the nation's debt load while resulting in even steeper losses in health care coverage, the nonpartisan Congressional Budget Office said in a new analysis, adding to the challenges for Republicans as they try to muscle the bill to passage.
The CBO estimates the Senate bill would increase the deficit by nearly $3.3 trillion from 2025 to 2034, a nearly $1 trillion increase over the House-passed bill, which CBO has projected would add $2.4 to the debt over a decade.
The analysis also found that 11.8 million more Americans would become uninsured by 2034 if the bill became law, an increase over the scoring for the House-passed version of the bill, which predicts 10.9 million more people would be without health coverage.
The stark numbers are yet another obstacle for Republican leaders as they labor to pass Trump's bill by his self-imposed July 4th deadline.
Even before the CBO's estimate, Republicans were at odds over the contours of the legislation, with some resisting the cost-saving proposals to reduce spending on Medicaid and food aid programs even as other Republicans say those proposals don't go far enough. Republicans are slashing the programs as a way to help cover the cost of extending some $3.8 trillion in Trump tax breaks put in place during his first term.
The push-pull was on vivid display Saturday night as a routine procedural vote to take up the legislation in the Senate was held open for hours as Vice President JD Vance and Republican leaders met with several holdouts. The bill ultimately advanced in a 51-49 vote, but the path ahead is fraught, with voting on amendments still to come.
Still, many Republicans are disputing the CBO estimates and the reliability of the office's work. To hoist the bill to passage, they are using a different budget baseline that assumes the Trump tax cuts expiring in December have already been extended, essentially making them cost-free in the budget.
The CBO on Saturday released a separate analysis of the GOP's preferred approach that found the Senate bill would reduce deficits by about $500 billion.
Democrats and economists decry the GOP's approach as 'magic math' that obscures the true costs of the GOP tax breaks.
In addition, Democrats note that under the traditional scoring system, the Republican bill bill would violate the Senate's 'Byrd Rule' that forbids the legislation from increasing deficits after 10 years.
In a Sunday letter to Oregon Sen. Jeff Merkley, the top Democrat on the Senate Budget Committee, CBO Director Phillip Swagel said the office estimates that the Finance Committee's portion of the bill, also known as Title VII, 'increases the deficits in years after 2034' under traditional scoring.
Fatima Hussein, The Associated Press
Hashtags
Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
Globe and Mail
34 minutes ago
- Globe and Mail
Cactus (WHD) Q2 EPS Falls 18.5%
Key Points Earnings per share (non-GAAP) missed estimates at $0.66, down from $0.81 (non-GAAP) in Q2 2024. Below analyst expectations, with non-GAAP EPS of $0.66 (vs. estimate $0.72) and GAAP revenue of $273.6 million (vs. estimate $278.8 million). The quarterly dividend increased 8% to $0.14 per share, even as profits and margins fell. These 10 stocks could mint the next wave of millionaires › Cactus (NYSE:WHD), a key manufacturer of pressure control equipment and spoolable pipe for the oil and gas industry, released its second quarter results on July 30, 2025. The report showed the company missed analyst projections on both non-GAAP earnings and GAAP revenue, reflecting softness in North American oilfield activity and new pressures from tariffs. Earnings per share (non-GAAP) were $0.66 versus the $0.72 that analysts expected, while revenue (GAAP) was $273.6 million, falling short of the $278.8 million consensus. Both top- and bottom-line results declined compared to last year. Segment weakness in Pressure Control and adverse margin effects outpaced strength in Spoolable Technologies and continued strong cash flow. The overall assessment for the quarter: Cactus remains financially stable and is executing on strategic initiatives, but faces operational and margin headwinds in its core markets. Metric Q2 2025 Q2 2025 Estimate Q2 2024 Y/Y Change EPS (Non-GAAP) $0.66 $0.72 $0.81 (18.5 %) Revenue (GAAP) $273.6 million $278.8 million $290.4 million (5.8 %) Adjusted EBITDA $86.7 million $103.6 million (16.4 %) Adjusted EBITDA Margin 31.7 % 35.7 % (4.0 pp) Net Income $49.0 million $63.1 million (22.3 %) Source: Analyst estimates provided by FactSet. Management expectations based on management's guidance, as provided in Q1 2025 earnings report. Business Snapshot and Focus Areas Cactus designs, manufactures, and services wellhead equipment and spoolable composite pipe products that are essential for drilling and pipeline operations. Its Pressure Control segment supplies wellhead and pressure-related equipment. The Spoolable Technologies segment, expanded by the FlexSteel acquisition, provides flexible composite pipes used for transporting oil, gas, and water. The company's success is closely tied to oilfield activity, which fluctuates with energy prices and capital spending by oil producers. Recent management efforts have focused on integrating FlexSteel, strengthening supply chains, and increasing international exposure to reduce reliance on the U.S. market. Key success factors include operational efficiency, manufacturing flexibility, customer relationships, and the ability to manage regulatory and tariff risks. Quarter Review: Revenue, Margins, and Segment Performance Cactus's results were shaped by industry cyclicality and new cost pressures. Total revenue (GAAP) fell 5.8% compared to Q2 2024. This total missed Wall Street's estimate by nearly $5.2 million (GAAP revenue). The main source of underperformance was the Pressure Control segment, where revenue dropped 5.5% sequentially and 4.0% from a year earlier (GAAP). Management cited 'lower frac equipment rental' and 'unexpected doubling of the Section 232 tariff' as key reasons for this segment's revenue and margin declines. These tariffs increased costs for imported steel, and management expects the full impact to roll through the profit statement over coming quarters as pre-tariff inventory is depleted. Pressure Control margins experienced sharp compression. Operating margin for the segment declined to 23.5%, down from 28.6% last quarter and 29.7% in the same period last year. Segment-adjusted EBITDA margin fell by over 5 percentage points year over year. In addition to tariff expenses, legal reserves tied to ongoing litigation added to the cost base. Looking ahead, the company is working to neutralize the tariff impact by moving production to Vietnam, but expects only partial relief until API (American Petroleum Institute) certification for Vietnam manufacturing is completed. In contrast, Spoolable Technologies delivered sequential revenue growth of 3.9%, with operating income up 17.5% sequentially and segment-adjusted EBITDA margin (non-GAAP) improving by 320 basis points. Management noted that international demand, particularly for sour service pipe products to the Middle East, drove the better-than-expected results in this segment. The company also highlighted strong demand from Canadian customers and the first commercial shipment of sour service pipe to the Middle East. Net income margin (GAAP) fell to 17.9%, a drop of 3.8 percentage points from Q2 2024. Adjusted EBITDA margin declined to 31.7% (non-GAAP). The company attributed these declines to lower sales volumes and increased costs, including tariffs and legal expenses. Despite these margin pressures, cash flow remained strong, with cash and equivalents rising to $405.2 million and no outstanding bank debt. Capital expenditures were held in check and full-year 2025 net capital expenditures guidance was trimmed to $40–$45 million, reflecting a more conservative outlook in response to weaker activity. The quarterly dividend was raised 8% to $0.14 per share, payable in September 2025. This marks continued commitment to shareholder returns, even as near-term profitability comes under pressure. Payments and distributions totaled $10.4 million. International Strategy, Tariff Response, and Operational Initiatives Regulatory and supply chain issues were a defining theme this quarter. Tariffs on imported steel, especially from China, increased unexpectedly, directly impacting input costs for Pressure Control products. The company's response involves transitioning manufacturing from China to Vietnam. Management stated, 'expect to neutralize the increased tariff expenses by mid next year. And although our margins may face modest compression between now and then, our inventory on hand and mitigating efforts will allow us to largely preserve our profitability on an absolute basis.' However, with its current inventory accounting methods and supply patterns, the full negative effects will unfold over several future quarters. At the same time, the company's strategy puts emphasis on capturing international growth. Notably, Spoolable Technologies booked its first commercial sale of 'sour service' flexible pipe—a composite pipeline product designed for environments with high hydrogen sulfide (H2S) levels—in the Middle East. These international shipments, together with better factory efficiencies, helped offset domestic market softness. Capital spending remained targeted and measured. Cactus continued investing in supply chain diversification, with planned expenditure at its Baytown manufacturing facility. The company aims to keep spending focused on efficiency and adapting to shifting tariff structures, rather than on major expansions. Cash generation from operations reached $82.8 million, supporting both investments and continued dividends without taking on debt. The acquisition agreement for 65 % of Baker Hughes's Surface Pressure Control business is underway. This transaction is intended to broaden Cactus's international reach and add new products. Transaction-related expenses reached $3.5 million. Management described integration and planning as 'progressing smoothly,' and noted positive initial feedback from key customers. Outlook: Guidance and What to Watch Management guided that revenue will fall modestly in both main segments, reflecting ongoing weakness in North American oilfield activity. No firm revenue or earnings figures for the next quarter or full year were provided. The leadership team noted actions taken to 'right-size our organization to align with expectations for the second half of the year.' Progress in integrating the Baker Hughes Surface Pressure Control business is a key watch-point. The company's strong liquidity and recent dividend increase provide some financial cushion during this period of adjustment. Revenue and net income presented using U.S. generally accepted accounting principles (GAAP) unless otherwise noted. Where to invest $1,000 right now When our analyst team has a stock tip, it can pay to listen. After all, Stock Advisor's total average return is 1,049%* — a market-crushing outperformance compared to 182% for the S&P 500. They just revealed what they believe are the 10 best stocks for investors to buy right now, available when you join Stock Advisor. See the stocks » *Stock Advisor returns as of July 29, 2025 JesterAI is a Foolish AI, based on a variety of Large Language Models (LLMs) and proprietary Motley Fool systems. All articles published by JesterAI are reviewed by our editorial team, and The Motley Fool takes ultimate responsibility for the content of this article. JesterAI cannot own stocks and so it has no positions in any stocks mentioned. The Motley Fool recommends Cactus. The Motley Fool has a disclosure policy.
Globe and Mail
41 minutes ago
- Globe and Mail
From Premium to Plunge: The Unraveling of History's Most Profitable Copper Play
President Trump's surprise 50% tariff on copper semi-finished products—paired with an exemption for refined metal—sent shockwaves through global markets, obliterating the lucrative CME-LME spread and triggering Comex copper's largest intraday plunge on record. The White House's last-minute proclamation annihilated months of fat profits for traders who had front-loaded U.S. warehouses ahead of levy day. Comex front-month futures in New York collapsed over 22%, flipping from a 30% premium to a deep discount against London Metal Exchange benchmarks as LME prices dipped only modestly. 'In a single session, the spread evaporated,' noted Daniel Ghali of TD Securities, capturing the scale of the unwind. With millions of tons of copper now stranded in U.S. depots, the once-profitable trade has become a cautionary tale of policy risk. Market Overview: Trump's tariff twist upends copper arbitrage between Comex and LME Commodity flows reverse as massive U.S. premiums vanish Volatility spikes underline vulnerability to abrupt policy shifts Key Points: 50% duties hit semi-finished copper; refined metals remain untaxed Comex futures tumbled >22%, while LME lost under 1% Goldman Sachs sees fundamentals intact but arbitrage pressures easing Looking Ahead: Speculation mounts over U.S. re-exports as warehouse stocks swell Comex-LME spreads likely to normalize once policy clarity returns Supply-security exemptions hint at ongoing administration focus Bull Case: President Trump's exemption for refined copper—while hitting semi-finished products—could ultimately secure domestic supply and support U.S. manufacturing, incentivizing longer-term investment in refinement capacity as companies adapt to the new trade regime. With the premium on Comex futures wiped out, U.S. copper prices may normalize relative to global benchmarks, helping downstream buyers access material at more competitive rates and reducing distortions in industrial procurement. Goldman Sachs and other analysts note that copper's fundamental supply-demand balance remains intact. Short-term volatility may give way to a more stable environment once the market digests the policy change and arbitrage pressures subside. For sophisticated traders and institutions, the recent dislocation presents new tactical opportunities: those with nimble positioning and robust risk management can profit by arbitraging price moves as spreads re-anchor between Comex and LME. From a broader strategic standpoint, the tariff shock is a wake-up call reinforcing the importance of supply-chain flexibility and geodiversification, prompting firms to reassess storage, sourcing, and trade execution in light of policy risks. If and when policy clarity and exemptions are fully detailed, investor confidence in U.S. copper logistics could rebound, paving the way for renewed investment as the volatility premium dissipates. Bear Case: The sudden imposition of a 50% tariff on semi-finished copper products and the carve-out for refined metal destroyed months of planned arbitrage trades, triggering over 22% declines in Comex prices and stranding millions of tons in U.S. warehouses—an acute market dislocation that could lead to lasting losses and reputational risk for affected stakeholders. Abrupt policy pivots expose the entire copper and broader commodities complex to heightened volatility and policy risk, deterring long-term investment in U.S. base-metal processing, logistics, and infrastructure. Arbitrage profits that once attracted liquidity, inventory, and efficient commodity flows have vanished; market participants may remain gun-shy about building positions due to uncertainty about future regulatory changes or unpredictable tariff timing. The patchwork, phased approach—with delayed refined copper tariffs—unsettles trade partners and global suppliers, who may opt to redirect flows elsewhere or negotiate with alternative buyers, weakening the position of the U.S. as a key copper market. Speculation about re-exports, mounting warehouse stocks, and mismatched price benchmarks could trigger further market inefficiency, raising the risk of forced liquidation sales or additional price shocks if inventory levels become unmanageable. Even if fundamentals broadly stay unchanged, the policy-driven risk premium may linger, discouraging both physical investment and speculative participation—especially from overseas players wary of recurring, unpredictable U.S. interventions in key commodity markets. The administration's patchwork approach—delaying refined copper levies until 2027 at 15%, rising to 30% in 2028—reflects a bid to secure domestic supply amid limited U.S. smelting capacity. Industry veterans caution that abrupt policy pivots could deter long-term investment in critical base-metal infrastructure. Despite the upheaval, analysts at Goldman Sachs argue that the tariff carve-outs leave copper's demand-and-supply dynamics largely intact, forecasting Comex prices to track LME levels over the coming months. For now, traders and producers alike will be bracing for a period of tactical repositioning as the dust settles on one of the commodity world's most spectacular policy-driven reversals.
CTV News
41 minutes ago
- CTV News
CTV National News: Breaking down Trump's tariffs policies
Watch Experts weigh in on U.S President Trump's trade deal approach and the potential legal challenges he could face. Joy Malbon reports.
