Trump tax bill would add $2.4 trillion to the deficit over a decade: CBO
President Trump's 'big, beautiful bill' would add $2.4 trillion to the nation's deficit over roughly the next decade, a new cost estimate from the Congressional Budget Office (CBO) shows.
The agency estimated the proposed tax cuts in the plan — which seek to lock in expiring provisions in Trump signature 2017 tax law, along with a host of other add-ons — would decrease revenues by more than $3.6 trillion over that time frame.
Meanwhile, accompanying measures to cut federal spending, including reforms to Medicaid and Supplemental Nutrition Assistance Program, would reduce outlays by $1.2 trillion over the same period, the CBO estimated.
House Republicans have been shooting for a minimum goal of $1.5 trillion for spending cuts to ride alongside the tax component of the plan.
Wednesday's analysis includes more than $174 billion in other deficit additions due to interactive effects of different parts of the legislation that previous estimates hadn't accounted for.
The estimate comes as Trump and other Republicans have ramped up attacks on the nonpartisan budget scorekeeper, while claiming the proposed tax cuts are costless.
'I would love for CBO to put out a report showing how they were off by $1.7 trillion on the 2017 tax cuts,' House Ways and Means Committee Chair Jason Smith (R-Mo.) said Wednesday morning, referring to the last round of GOP tax cuts.
But the accounting criticisms haven't stopped fiscal hawks from raising questions about the cost of the package, while pressing for more aggressive cuts to spending. Some have suggested the scope of the tax portion of the bill could be narrowed in the Senate to reduce the package's costs.
However, other GOP senators have expressed concerns about proposed reforms to Medicaid, which also include work requirements, accounting for a chunk of the savings Republicans hope to generate on the spending side.
The CBO estimated Wednesday that the bill in its current form would 'increase by 10.9 million the number of people without health insurance in 2034.'
'That total includes an estimated 1.4 million people without verified citizenship, nationality, or satisfactory immigration status who would no longer be covered in state-only funded programs in 2034,' it continued.
The CBO found the bill would also 'lower gross benchmark premiums, on average, in marketplace plans established by the Affordable Care Act by an estimated 12.2 percent in 2034.'
The Senate is expected to make changes to the legislation soon, with hopes of pushing the bill out of Congress by early July.
The national debt ballooned after the federal government sent out trillions in fiscal rescue measures in response to the COVID-19 pandemic as various parts of the global economy were shut down.
The overall debt jumped from a plateau of around 100 percent of annual gross domestic product (GDP) up to 120 percent, where it has hovered since 2021. Total U.S. debt is about $36 trillion dollars. The $2.4 trillion addition would be about 6.7 percent of that amount, spread out over the nine-year accounting window.
'This package would leave federal budget deficits as a share of GDP between 6.5 to 7 percent over the next several years, representing no progress on reducing the deficit,' Deutsche Bank analysts wrote in a June 2 note to investors.
Republicans were jazzed Wednesday about the current outlook for second-quarter GDP, which the Atlanta Fed is now forecasting to grow by a sizable 4.6 percent after a contraction in the first quarter spurred by increased imports.
Updated at 10:51 a.m. EDT
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That means a 23% benefit cut would be necessary in 2035. Fortunately, the lawmakers in Washington have several years to find a better solution. Here are four Social Security changes that could prevent deep, across-the-board benefit cuts. 1. Apply the Social Security payroll tax to income above $400,000 Social Security is primarily funded by a dedicated payroll tax, which takes 6.2% of wages from workers and employers. But some income is exempt from the payroll tax. Specifically, the maximum taxable earnings limit is $176,100 in 2025. Income above that threshold is not taxed by Social Security. Importantly, the Social Security program is projected to run a $23 trillion deficit over the next 75 years as it's strained by shifting demographics. But the deficit could be slashed by applying the payroll tax to more income. For instance, including income above $400,000 would eliminate 60% of the 75-year funding shortfall, says the University of Maryland. 2. Gradually increase the Social Security payroll tax rate to 6.5% over six years Under current law, the Social Security payroll tax rate is 6.2% for workers and their employers. But gradually raising that figure would eliminate a portion of the long-term deficit. For example, increasing thetax rate by 0.05% annually over a six-year period would eliminate 15% of the 75-year funding shortfall, according to the University of Maryland. Now that I've discussed two possible changes, let's step back and look at the big picture. There are basically three ways to resolve Social Security's financial problems: (1) increase revenue, (2) reduce costs or (3) some combination of the first two options. The changes discussed so far would increase revenue, but the next two changes would cut benefits. However, they are more subtle cuts than the 23% across-the-board reduction that would follow trust fund depletion. 3. 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