Trump tax bill will add $2.4 trillion to deficit and leave 10.9 million more uninsured, CBO says

Japan Today

2 days ago

By LISA MASCARO
President Donald Trump's big bill in Congress would unleash trillions in tax cuts and slash spending, but also spike deficits by $2.4 trillion over the decade and leave some 10.9 million more people without health insurance, raising the political stakes for the GOP's signature domestic priority.
Republican leaders in Congress, determined to muscle the sweeping package forward, had little to say after the analysis released Wednesday by the nonpartisan Congressional Budget Office. GOP senators were heading for an afternoon meeting with Trump at the White House.
But Democrats laboring to halt the march of Trump's One Big Beautiful Bill Act piled on with relentless opposition.
'In the words of Elon Musk, this bill is a 'disgusting abomination,'' said Rep. Brendan Boyle of Pennsylvania, the top Democrat on the House Budget Committee, reviving the billionaire former Trump aide's criticism of the package.
The analysis comes at a crucial moment as Trump is pushing Congress, where Republicans have majority control, to send the final product to his desk to become law by the Fourth of July. The House passed the bill last month by a single vote, but it's now slogging through the Senate, where Republicans want a number of significant changes.
And the politics are only intensifying.
After Musk blindsided Congress with his all-out assault against the bill this week, House Speaker Mike Johnson rushed to do damage control.
The GOP speaker said he called Musk to discuss the criticism leveled late Tuesday, but had not heard back. Musk has threatened to use his political apparatus to go after Republicans in the midterm elections.
'I hope he comes around,' Johnson, R-La., told reporters.
Hours later, Musk, whose business interests could be impacted by green energy rollbacks in the bill, implored voters to call their representatives and senators: 'Bankrupting America is NOT ok!' he wrote on social media, 'KILL the BILL'
The work of the CBO, which for decades has served as the official scorekeeper of legislation in Congress, is closely watched by lawmakers and others seeking to understand the budgetary impacts of the sprawling 1,000-page-plus package.
Along with $3.75 trillion to extend the 2017 tax breaks and add the new ones Trump campaigned on, including no taxes on tips, it found that the package would reduce federal spending outlays by nearly $1.3 trillion, largely through proposed reductions to Medicaid and rollbacks of green energy initiatives.
Some 7.8 million people would no longer have health insurance with changes to Medicaid, including 5.2 million from the proposed new work requirements on those able-bodied adults up to age 65, with some exceptions, according to the analysis.
As part of those Medicaid changes, 1.4 million people who are in the United States without legal status in state-funded health programs would no longer have coverage. Also, some 400,000 would lose coverage from the termination of a medical provider tax that key Republicans, including Sen. Josh Hawley of Missouri, want to keep in place to ensure rural hospitals can keep paying their bills.
Republicans argue that their proposals are intended to strengthen Medicaid and other programs by rooting out waste, fraud and abuse. They want the federal funding to go to those who most need health care and other services, often citing women and children.
But Senate Democratic Leader Chuck Schumer said those claims are bogus and are simply part of long-running GOP efforts to repeal and replace the Affordable Care Act, or Obamacare, as most states have expanded Medicaid to serve more people under the program.
'They just want to strangle health care,' Schumer said.
Additionally, the CBO had previously estimated that nearly 4 million fewer people would have food stamps each month due to the legislation's proposed changes to the Supplemental Nutrition Assistance Program, known as SNAP. Some would see their benefits reduced by about $15 by 2034, the CBO has said.
Ahead of the CBO's release, the White House and Republican leaders criticized the budget office in a preemptive campaign designed to sow doubt in its findings.
Senate Majority Leader John Thune said the CBO was 'flat wrong' because it underestimated the potential revenue growth from Trump's first round of tax breaks in 2017. The CBO last year said receipts were $1.5 trillion, or 5.6% greater than predicted, in large part because of the 'burst of high inflation' during the COVID-19 pandemic in 2021.
White House Budget Director Russ Vought said when you adjust for 'current policy,' which means not counting some $4.5 trillion in existing tax breaks that are simply being extended for the next decade, the overall package actually doesn't pile onto the deficit. He argued that the spending cuts alone, in fact, help reduce deficits by $1.4 trillion over the decade.
But Democrats and even some Republicans call that 'current policy' accounting move a gimmick, but it's the approach Senate Republicans intend to use during their consideration of the package to try to show it does not add to the nation's deficits. Vought argued that the CBO is the one using a 'gimmick' by tallying the costs of continuing those tax breaks that would otherwise expire.
'Russ is right,' Johnson, the House speaker, posted on social media. 'Our One Big Beautiful Bill will REDUCE the deficit WHILE delivering on the mandate given to us by the American people. Let's get it done!'
White House press secretary Karoline Leavitt has also suggested that the CBO's employees are biased, even though certain budget office workers face strict ethical rules — including restrictions on campaign donations and political activity — to ensure objectivity and impartiality.
The individual income tax breaks that had been approved during Trump's first term in the White House will expire in December if Congress fails to act, in what Republicans warn would be a massive tax hike on many American households.
The package also includes a massive buildup of $350 billion for border security, deportations and national security that is central to the GOP agenda, as well as a $4 trillion increase to the nation's $36 trillion debt limit, which the Treasury Department says is needed by this summer to pay the nation's bills.
Now in its 50th year, the CBO was established by law after Congress sought to assert its control, as outlined in the Constitution, over the budget process.
Staffed by some 275 economists, analysts and other employees, the CBO says it seeks to provide Congress with objective, impartial information about budgetary and economic issues.
Its current director, Phillip Swagel, a former Treasury official in Republican President George W. Bush's administration, was reappointed to a four-year term in 2023.
Associated Press writers Kevin Freking and Joey Cappelletti contributed to this report.
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