Budget office says Trump's tax law will add $3.4 trillion to deficits, leave 10 million uninsured
Republicans are touting the bill as a tax cut for all Americans, yet a recent AP-NORC poll found about two-thirds of US 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 US. 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. 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.
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US, China to resume talks on tariff truce extension ahead of Trump-Xi meeting
Top US and Chinese economic officials will resume talks in Stockholm on Monday to try to tackle longstanding economic disputes at the center of a trade war between the world's top two economies, aiming to extend a truce by three months and keeping sharply higher tariffs at bay. China is facing an August 12 deadline to reach a durable tariff agreement with President Donald Trump's administration, after Beijing and Washington reached preliminary deals in May and June to end weeks of escalating tit-for-tat tariffs and a cut-off of rare earth minerals. Without an agreement, global supply chains could face renewed turmoil from US duties snapping back to triple-digit levels that would amount to a bilateral trade embargo. The Stockholm talks come hot on the heels of Trump's biggest trade deal yet with the European Union on Sunday for a 15 percent tariff on most EU goods exports to the US, including autos. 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We really sort of made a deal with China, but we'll see how that goes,' Trump told reporters on Sunday before European Commission President Ursula von der Leyen struck their tariff deal. The Financial Times reported on Monday that the US had paused curbs on tech exports to China to avoid disrupting trade talks with Beijing and support Trump's efforts to secure a meeting with Xi this year. The industry and security bureau of the Commerce Department, which oversees export controls, had been told to avoid tough moves on China, the newspaper said, citing current and former officials. Reuters could not immediately verify the report. The White House and the department did not respond to Reuters' requests for comment outside business hours. Deeper issues Previous US-China trade talks in Geneva and London in May and June focused on bringing US and Chinese retaliatory tariffs down from triple-digit levels and restoring the flow of rare earth minerals halted by China and Nvidia's H20 AI chips and other goods halted by the United States. So far, the talks have not delved into broader economic issues. They include US complaints that China's state-led, export-driven model is flooding world markets with cheap goods, and Beijing's complaints that US national security export controls on tech goods seek to stunt Chinese growth. 'Geneva and London were really just about trying to get the relationship back on track so that they could, at some point, actually negotiate about the issues which animate the disagreement between the countries in the first place,' said Scott Kennedy, a China economics expert at the Center for Strategic and International Studies in Washington. 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an hour ago
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Europe hopes for ‘no surprises' as US weighs troop withdrawals
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Al Arabiya
2 hours ago
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Starmer to press Trump on ending ‘unspeakable suffering' in Gaza
UK Prime Minister Keir Starmer will press Donald Trump on ending 'the unspeakable suffering' in Gaza, and also talk trade, when they meet Monday at the US president's golf resort in Scotland. The talks will come a day after the US and the European Union reached a landmark deal to end a transatlantic standoff over tariffs and avert a full-blown trade war. Starmer is expected to push Trump on urging a revival of stalled ceasefire talks between Israel and Hamas as a hunger crisis deepens in the besieged Palestinian territory. The meeting at Turnberry, southwestern Scotland, comes as European countries express growing alarm at the situation in Gaza, and as Starmer faces domestic pressure to follow France's lead and recognize a Palestinian state. The leaders will also discuss implementing a recent UK-US trade deal, as well as efforts to end Russia's war against Ukraine, according to a British government statement issued late Sunday. But it is the growing threat of starvation faced by Palestinians in Gaza that is set to dominate the talks, on the third full day of Trump's trip to the land where his mother was born. Starmer is expected to 'welcome the president's administration working with partners in Qatar and Egypt to bring about a ceasefire in Gaza,' a Downing Street spokesperson said. 'He will discuss further with him what more can be done to secure the ceasefire urgently, bring an end to the unspeakable suffering and starvation in Gaza and free the hostages who have been held so cruelly for so long.' Trump told reporters Sunday that the US would give more aid to Gaza but he wanted other countries to step up as well. 'It's not a US problem. It's an international problem,' he said, before embarking on crunch trade talks with EU chief Ursula von der Leyen at the resort south of Glasgow. Starmer and Trump's meeting comes after the UK PM backed efforts by Jordan and the United Arab Emirates to air drop aid to Gaza. Humanitarian chiefs remain skeptical such deliveries can deliver enough food safely for the area's more than two million inhabitants. On Sunday, Israel declared a 'tactical pause' in fighting in parts of Gaza and said it would allow the UN and aid agencies to open secure land routes to tackle the hunger crisis. Tariffs Last week, the United States and Israel withdrew from Gaza truce talks, with US envoy Steve Witkoff accusing Hamas of blocking a deal -- a claim rejected by the Palestinian militant group. Starmer held talks with French and German counterparts on Saturday, after which the UK government said they agreed 'it would be vital to ensure robust plans are in place to turn an urgently-needed ceasefire into lasting peace.' But the Downing Street statement made no mention of Palestinian statehood, which French President Emmanuel Macron has announced his country will recognize in September. More than 220 MPs in Britain's 650-seat parliament, including dozens from Starmer's own ruling Labour party, have demanded that he too recognize Palestinian statehood. Number 10 said Starmer and Trump would also discuss 'progress on implementing the UK-US trade deal,' which was signed on May 8 and lowered tariffs for certain UK exports but has yet to come into force. Trump said Sunday the agreement was 'great' for both sides and that Starmer was doing 'a very good job.' After their meeting they will travel together to Aberdeen in Scotland's northeast, where the US president is expected to formally open a new golf course at his resort on Tuesday. Trump played golf at Turnberry on Saturday and Sunday on his five-day visit that has mixed leisure with diplomacy, and also further blurred the lines between the presidency and his business interests.
