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Business Insider
2 days ago
- Automotive
- Business Insider
Trump says he and Elon Musk 'had a great relationship,' but it might be over now
"Look, Elon and I had a great relationship," Trump said in the Oval Office on Thursday. "I don't know if we will anymore." Trump said that Musk's criticism of the bill likely stemmed primarily from the phase-out of the electric vehicle tax credit, which would likely impact his company, Tesla. "You know, Elon's upset because we took the EV mandate… which was a lot of money for electric vehicles," Trump said. "And they're having a hard time, the electric vehicles." "Elon knew this from the beginning," Trump added. The president also said that On Tuesday, the tech titan unleashed on the "Big Beautiful Bill," which is set to serve as the centerpiece of Trump's legislative agenda. "I'm sorry, but I just can't stand it anymore," Musk wrote on X. "This massive, outrageous, pork-filled Congressional spending bill is a disgusting abomination." Musk took issue with the bill's projected impact on the federal deficit. The Congressional Budget Office has estimated that in its current form, the bill would add $2.4 trillion to the deficit over the next 10 years, while the Committee for a Responsible Federal Budget has said that number would be $2.5 trillion. Musk previously said that the bill undermined the work of DOGE, which has sought to cut billions of dollars in federal spending. Republicans on Capitol Hill have largely brushed off Musk's criticism. House Speaker Mike Johnson told reporters on Wednesday that Musk is "flat wrong" about the bill, while Senate Majority Leader John Thune said that the tech titan is "entitled to that opinion," but "we're going to proceed full speed ahead."
Yahoo
2 days ago
- Business
- Yahoo
A twist in the debate over Trump's deficit-busting bill: A (long-shot) scenario where tariffs could offset the costs
Congress's top budget scorekeeper released two reports Wednesday suggesting that costs coming from President Trump's "big, beautiful bill" could be at least partially offset by tariffs, even as budget hawks offered caution about relying on trade policy for a permanent revenue stream. What the Congressional Budget Office (CBO) found in one report was that recently passed legislation in the House of Representatives is set to increase deficits by $2.4 trillion over the next decade if it is signed into law. The second report examined Trump's tariffs and found they could reduce primary deficits by $2.8 trillion over that same time frame — but with a significant assumption that current duties stay constant and in place even after Trump is scheduled to leave office. The dual reports offered a new wrinkle in a week focused on Trump's likely budget-busting bill, offering ammunition to both sides of a cost debate currently splitting Republicans, including President Trump and Elon Musk. The CBO's tariff finding even earned it some guarded praise from Trump's team, which has otherwise spent the week trying to discredit the congressional scorekeeper. Meanwhile, questions abounded at the idea of using trade policy, which can change at the stroke of a presidential pen and the president himself has suggested is a negotiating tactic, to offset the costs of permanent tax cuts. "I certainly would not count on $3 trillion of possibly illegal tariffs that may or may not remain for the next 6 months, let alone the next 6 years, to pay for tax cuts that are gonna be put into law and can't be undone without another action of law," Marc Goldwein of the Committee for a Responsible Federal Budget noted on Wednesday. The back-and-forth began Wednesday when the nonpartisan (but recently controversial) CBO offered a new estimate of the cost of Trump's "big beautiful bill" and then dropped a second report looking at the effects of tariffs. The first analysis underlined a consensus view — backed by multiple outside analyses — that the bill making its way through Congress will be deeply expensive. Tax cuts in the bill deeply cut into government revenues and will increase overall deficits by $2.4 trillion over the next decade, the group found. Wednesday's report was also actually on the low end of some other looks at Trump's signature legislation with other analyses offering estimates often topping $3 trillion. Another way of looking at the bill is to assume that many of the short-term goodies in it are made permanent (which Washington has a long history of doing). That would push the price tag north of $5 trillion, according to groups like the Penn Wharton Budget Model and the Committee for a Responsible Federal Budget. Either way, the influential CBO reports have led to a concerted campaign by Trump's White House to try to discredit the scorekeeper. Just on Tuesday, press secretary Karoline Leavitt offered flimsy claims that the CBO was "historically wrong" and "has become partisan and political." The second CBO report looking at tariffs implemented through May 13 offered a sort of mirror image conclusion (as well as a reaction from the White House). That's because it concluded that tariffs could reduce primary deficits by $2.8 trillion over the next decade by accounting for both the revenue coming in, negative economic effects, and reduced debt interest payments. As with pretty much everything in Washington, it's not quite that simple. The report looks at Trump's tariffs through a recently enacted pause on China on May 12 but before recent developments like a court fight over the legality of some of Trump's tariffs as well as new steel tariffs. The analysis also didn't try to weigh Trump's promised additional "reciprocal" duties he says are coming in July. The report also noted the up-and-down nature of tariffs and how long-term effects of tariffs of this magnitude are difficult to predict, as "there is little relevant empirical evidence on their effects" on things like trade volume and consumer behavior. The report also foresees a cost for the US economy, with tariffs set to "reduce the size of the U.S. economy" and also lead to a potential inflation increase of 0.4 percentage points in 2025 and 2026. Read more: What Trump's tariffs mean for the economy and your wallet But the top-line tariff revenue estimate provided some limited new buttressing for the claim Trump has been making since the 2024 campaign that his tariff agenda could fund other priorities. Tariffs have already brought in about $17.4 billion in April and over $20 billion in May, a significant uptick but not yet enough to make a significant piece of the government's revenue picture. And this good news from the Trump team's perspective was noticed and earned some caveated endorsements. It was noted by Trump's budget chief and his deputy chief of staff, among others, even amid the larger campaign against the group. Spokesperson Kush Desai likewise slammed what he called the CBO's "faulty" projections in a statement to Yahoo Finance but quickly added that any overall accounting "should stay consistent and also take CBO's tariff revenue estimate of $2.8 trillion at face value." All in all, the ongoing political spotlight shining on the staid world of budget analysis has done little to change the central conclusion reached again and again that Trump's "big, beautiful bill" would lead to trillions in additional debt if it's passed. And how the back-and-forth over the CBO affects the ongoing Capitol Hill debate remains far from clear. Tesla (TSLA) CEO Musk recently called the bill "a disgusting abomination" over its high cost and has emerged as a new leader of sorts for fiscal conservatives who have voiced objections, often citing the CBO and other findings. The case from the White House, meanwhile, has been to dismiss the CBO, suggesting that passage of Trump's legislation will spur huge economic growth that will quickly swamp the costs of tax cuts. Russell Vought, the director of Trump's Budget Office, said in a call with reporters Wednesday that both the bill and tariffs are "part of a coherent fiscal agenda" and promised that the books would eventually balance because of those factors as well as economic growth, "reforms we can do ourselves" without Congress, and additional plans for spending cuts to come. Overlooked by many in the White House on tariffs is how the next president — or Trump if he changes his mind, as he has done on varied tariffs since taking office — could quickly change the tariff revenue picture dramatically or strike them down entirely with executive actions. Changing tax rates passed into law by Congress is much harder. "These tariffs are highly, highly, highly uncertain, not just in their revenue impact because if they drive us into a recession, for example, or push up interest rates or move people away from the dollar," Goldwein added. Ben Werschkul is a Washington correspondent for Yahoo Finance. Click here for political news related to business and money policies that will shape tomorrow's stock prices Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
New Straits Times
2 days ago
- Business
- New Straits Times
Musk, hardline US Republicans ramp up attacks on Trump tax and spending bill
WASHINGTON: Hardline conservative Republicans in the US Senate and billionaire Elon Musk showed no sign of softening opposition to President Donald Trump's tax-cut and spending bill on Wednesday, as they pushed for deeper reductions in government outlays. The nonpartisan Congressional Budget Office on Wednesday estimated the bill – which would extend Trump's 2017 tax cuts and step up spending for the military and border security – will add about US$2.4 trillion to the US$36.2 trillion US debt pile. Another nonpartisan forecaster, the Committee for a Responsible Federal Budget said on Wednesday that when taking interest payments into account the bill's cost could rise to US$3 trillion over a decade or to US$5 trillion if temporary tax cuts were made permanent. Musk, the world's richest person who for several months led the Department of Government Efficiency cost-cutting effort, stepped up his attacks on the measure, joining with Senate Republican deficit hawks who said the version passed by the House of Representatives last month did not sufficiently cut spending. "A new spending bill should be drafted that doesn't massively grow the deficit," Musk, the largest Republican donor in the 2024 election cycle, said on his X social media platform. "America is in the fast lane to debt slavery." Top congressional Republicans rejected his criticism and one White House official on Wednesday called the Tesla CEO's moves "infuriating." Another White House official, speaking on condition of anonymity, on Wednesday said Musk's complaints represented "one disagreement" in an otherwise harmonious relationship, adding that Trump was committed to getting the bill passed despite Musk's stance. Asked about Musk's message after a White House meeting with Trump, Senate Majority Leader John Thune promised Congress would get the legislation over the finish line. "We're a long ways down this track," Thune said. "The wheels are in motion on this. As I said before, failure is not an option. We will get this done, one way or the other." Other Senate Republicans downplayed Musk's influence. "I don't think very many senators are that interested in what Elon has to say. It's amusing. But we're serious policymakers. We have to govern, and so we have to deal with reality," Senator Kevin Cramer of North Dakota told reporters. Musk joined Trump's team with brash promises of cutting US$2 trillion in spending from the federal budget, but left last week having accomplished a small fraction of that. The House-passed bill would reduce the federal government's revenues by US$3.67 trillion over a decade, the CBO forecasted, while reducing spending by US$1.25 trillion. The measure would also lift the federal government's debt ceiling, a step that lawmakers must take some time this summer or risk a devastating default. NARROW SENATE PATH With Republicans holding a narrow 53-47 Senate majority, just four "no" votes are enough to scupper any bill that Democrats unite in opposing. The measure named the "big, beautiful bill" faces opposition both from deficit hawks and a handful of rural-state Republicans worried about the scale of cuts to the Medicaid health insurance program for low-income Americans. "We're at US$2 trillion in deficits," said Republican Senator Rick Scott of Florida. "We're not going to get interest rates down or inflation under control if we don't balance the budget." Republican Senator Ron Johnson of Wisconsin criticised the Trump-backed bill as failing to reverse the trajectory of budget deficits and debt. "The CBO score is a distraction," Johnson said to reporters. "You're arguing over twigs and leaves, when you're ignoring the forest that's on fire." 'BAD TO WORSE' The number of people in the United States without health insurance would increase by 10.9 million by 2034 due to policy changes in the House bill, the CBO said. Of that number, an estimated 1.4 million people would be undocumented immigrants who would no longer be covered in programs funded by the states. "This bill has gone from bad to worse," said Democratic Senator Ron Wyden of Oregon, referring to the healthcare cuts. The CBO update does not include a forecast on the potential macroeconomic effects of the legislation, which will be forthcoming. Republicans argue that extending existing tax cuts and adding new breaks, which are included in the House bill, would further stimulate the economy. They made similar arguments in 2017 that tax cuts would pay for themselves by stimulating economic growth, but the CBO estimates the changes increased the federal deficit by just under US$1.9 trillion over a decade, even when including positive economic effects. The 1,100-page bill would extend corporate and individual tax cuts passed in 2017 during Trump's first term in office, cancel many green-energy incentives passed by Democratic former President Joe Biden and tighten eligibility for health and food programs for the poor. It also would fund Trump's crackdown on immigration, adding tens of thousands of border guards and creating the capacity to deport up to 1 million people each year. Regulations on firearm silencers would be loosened. Democrats blast the bill as disproportionately benefiting the wealthy while cutting benefits for working Americans. The measure is now awaiting action in the Senate.
Straits Times
2 days ago
- Business
- Straits Times
Musk, hardline US Republicans ramp up attacks on Trump tax and spending Bill
Hardline conservative Republicans in the US Senate showed no sign of softening opposition to President Donald Trump's tax-cut and spending Bill. PHOTO: BLOOMBERG WASHINGTON - Hardline conservative Republicans in the US Senate and billionaire Elon Musk showed no sign of softening opposition to President Donald Trump's tax-cut and spending Bill on June 4, as they pushed for deeper reductions in government outlays. The nonpartisan Congressional Budget Office on June 4 estimated the Bill – which would extend Mr Trump's 2017 tax cuts and step up spending for the military and border security – will add about US$2.4 trillion (S$3.1 trillion) to the US$36.2 trillion US debt pile. Another nonpartisan forecaster, the Committee for a Responsible Federal Budget said on June 4 that when taking interest payments into account the Bill's cost could rise to US$3 trillion over a decade or US$5 trillion if the tax cuts were made permanent. Mr Musk, the world's richest person who for several months led the Department of Government Efficiency cost-cutting effort, stepped up his attacks on the measure, joining with Senate Republican deficit hawks who said the version passed by the House of Representatives in May did not sufficiently cut spending. 'A new spending Bill should be drafted that doesn't massively grow the deficit,' Mr Musk, the largest Republican donor in the 2024 election cycle, said on his X social media platform. 'America is in the fast lane to debt slavery.' Top congressional Republicans rejected his criticism and one White House official on June 4 called the Tesla CEO's moves 'infuriating'. Another White House official, speaking on condition of anonymity, on June 4 said Mr Musk's complaints represented 'one disagreement' in an otherwise harmonious relationship, adding that Mr Trump was committed to getting the Bill passed despite Mr Musk's stance. Some Senate Republicans downplayed Mr Musk's influence. 'I don't think very many senators are that interested in what Elon has to say. It's amusing. But we're serious policymakers. We have to govern, and so we have to deal with reality,' Senator Kevin Cramer of North Dakota told reporters. Mr Musk joined Mr Trump's team with brash promises of cutting US$2 trillion in spending from the federal budget, but left last week having accomplished a small fraction of that. The House-passed Bill would reduce the federal government's revenues by US$3.67 trillion over a decade, the CBO forecasted, while reducing spending by US$1.25 trillion. The measure would also lift the federal government's debt ceiling, a step that lawmakers must take some time this summer or risk a devastating default. Narrow Senate path With Republicans holding a narrow 53-47 Senate majority, just four 'no' votes are enough to scupper any Bill that Democrats unite in opposing. The measure named the 'big, beautiful Bill' faces opposition both from deficit hawks and a handful of rural-state Republicans worried about the scale of cuts to the Medicaid health insurance program for low-income Americans. 'We're at US$2 trillion in deficits,' said Republican Senator Rick Scott of Florida. 'We're not going to get interest rates down or inflation under control if we don't balance the budget.' Republican Senator Ron Johnson of Wisconsin criticized the Trump-backed bill as failing to reverse the trajectory of budget deficits and debt. 'The CBO score is a distraction,' Mr Johnson said to reporters. 'You're arguing over twigs and leaves, when you're ignoring the forest that's on fire.''BAD TO WORSE' The number of people in the United States without health insurance would increase by 10.9 million by 2034 due to policy changes in the House bill, the CBO said. Of that number, an estimated 1.4 million people would be undocumented immigrants who would no longer be covered in programs funded by the states. 'This bill has gone from bad to worse,' said Democratic Senator Ron Wyden of Oregon, referring to the healthcare cuts. The CBO update does not include a forecast on the potential macroeconomic effects of the legislation, which will be forthcoming. Republicans argue that extending existing tax cuts and adding new breaks, which are included in the House bill, would further stimulate the economy. They made similar arguments in 2017 that tax cuts would pay for themselves by stimulating economic growth, but the CBO estimates the changes increased the federal deficit by just under US$1.9 trillion over a decade, even when including positive economic effects. The 1,100-page bill would extend corporate and individual tax cuts passed in 2017 during Trump's first term in office, cancel many green-energy incentives passed by Democratic former President Joe Biden and tighten eligibility for health and food programs for the poor. It also would fund Mr Trump's crackdown on immigration, adding tens of thousands of border guards and creating the capacity to deport up to 1 million people each year. Regulations on firearm silencers would be loosened. Democrats blast the Bill as disproportionately benefiting the wealthy while cutting benefits for working Americans. The measure is now awaiting action in the Senate. The Republican-controlled Congress so far has not rejected any of Trump's legislative requests. REUTERS Join ST's Telegram channel and get the latest breaking news delivered to you.
Yahoo
3 days ago
- Business
- Yahoo
Tariffs will reduce deficits by $2.5 trillion over 10 years: CBO
President Trump's tariffs will take a major bite out of U.S. deficit levels, reducing them by $2.5 trillion over the next decade and shrinking the size of the U.S. economy, the Congressional Budget Office (CBO) found in a Wednesday analysis. The deficit reduction is almost exactly the same size as the deficit addition that would result from the GOP's 'big, beautiful bill.' The CBO found that the bill would add $2.4 trillion to deficits through 2034, according to a separate analysis released Wednesday. The tariffs measured by the CBO are those implemented from Jan. 6 to May 13, which includes the trade truce with China announced May 12. The CBO included in its calculation a menu of tariffs that Trump has announced since taking office: a 30 percent tariff on imports from China and Hong Kong; 25 percent tariffs on imports from Canada and Mexico that started March 7; 25 percent tariffs on steel and aluminum from March 12; 25 percent tariffs on most automobile imports starting April 3; 10 percent tariff on imports from most countries that began April 5; and 25 percent tariff on imports of most auto parts, as of May 3. Trump has said since the start of his term that he would implement tariffs to balance trade with other countries and to try to spur a manufacturing boom in the U.S. He has routinely announced tariffs, then paused them in an effort to strike a trade deal with a particular nation. But several tariffs have stuck and the overall tariff rate is now between 10 percent and 15 percent, the highest level in decades. The boosted projections for federal revenue will likely raise long-term economic confidence, especially since the bond market has been quaking in recent weeks. Bond yields have popped in response both to tariffs and proposed GOP legislation. Republican arguments about the fiscal health of the U.S. economy are likely to get a jolt from the new CBO scores, as well. Democrats asked the CBO to score the president's tariffs. Marc Goldwein, policy director of the nonpartisan Committee for a Responsible Federal Budget, described the tariff offsets of the cost of the Republican's budget bill as 'pretty coincidental.' The main reasons for the higher deficit reductions than in other forecasts are lower interest rate payments on the debt along with higher tax revenues from increased inflation. The decrease in primary deficits from less spending on interest would reduce total deficits by an additional $500 billion, the CBO projected. 'Total deficits over the 2025-2035 period would be $3.0 trillion lower than projected in CBO's January 2025 baseline,' the agency said. Higher nominal prices from a 0.4-percent boost to inflation from the tariffs will increase federal revenues, since taxes are taken out of income. 'The net result of those effects will be an increase in federal revenues,' the CBO said. The estimate is in line with some previous projections by Washington policy groups. The Tax Foundation estimated in April that a 10 percent universal tariff similar to the one imposed by the White House would raise $2.2 trillion over the 2025-to-2034 budget window. The Yale Budget lab predicted $2 trillion in revenues, including dynamic effects. Without $347 billion in losses due to economic shrinkage, the tariffs would have pulled in $2.4 trillion through 2035, the group found. Penn Wharton, basing its analysis on the much more expansive 'Liberation Day tariffs' that have since been walked back, projected that the tariffs would bring in more than $4.5 trillion when accounting for their economy-shrinking effects. The CBO score does not include economic growth or shrinkage effects, which the agency said will be included at a later date. The CBO also found that the tariffs are likely to have a more negative effect on poorer Americans due to the fact that their expenses are concentrated in the goods sector, which is more affected by the tariffs than service products. Tariffs will hit hardest in durable goods — things like cars and home appliances — and the price increases are likely to be greatest in those sectors. Updated at 1:09 p.m. EDT Copyright 2025 Nexstar Media, Inc. All rights reserved. This material may not be published, broadcast, rewritten, or redistributed.
