Latest news with #KarolineLeavitt
Yahoo
an hour ago
- Business
- Yahoo
Can Trump fix the national debt? Republican senators, many investors and even Elon Musk have doubts
WASHINGTON (AP) — President Donald Trump faces the challenge of convincing Republican senators, global investors, voters and even Elon Musk that he won't bury the federal government in debt with his multitrillion-dollar tax breaks package. The response so far from financial markets has been skeptical as Trump seems unable to trim deficits as promised. 'All of this rhetoric about cutting trillions of dollars of spending has come to nothing — and the tax bill codifies that,' said Michael Strain, director of economic policy studies at the American Enterprise Institute, a right-leaning think tank. 'There is a level of concern about the competence of Congress and this administration and that makes adding a whole bunch of money to the deficit riskier.' The White House has viciously lashed out at anyone who has voiced concern about the debt snowballing under Trump, even though it did exactly that in his first term after his 2017 tax cuts. White House press secretary Karoline Leavitt opened her briefing Thursday by saying she wanted 'to debunk some false claims" about his tax cuts. Leavitt said that the "blatantly wrong claim that the 'One, Big, Beautiful Bill' increases the deficit is based on the Congressional Budget Office and other scorekeepers who use shoddy assumptions and have historically been terrible at forecasting across Democrat and Republican administrations alike.' But Trump himself has suggested that the lack of sufficient spending cuts to offset his tax reductions came out of the need to hold the Republican congressional coalition together. 'We have to get a lot of votes,' Trump said last week. 'We can't be cutting.' That has left the administration betting on the hope that economic growth can do the trick, a belief that few outside of Trump's orbit think is viable. Tech billionaire Musk, who was until recently part of Trump's inner sanctum as the leader of the Department of Government Efficiency, told CBS News: 'I was disappointed to see the massive spending bill, frankly, which increases the budget deficit, not just decreases it, and undermines the work that the DOGE team is doing." Federal debt keeps rising The tax and spending cuts that passed the House last month would add more than $5 trillion to the national debt in the coming decade if all of them are allowed to continue, according to the Committee for a Responsible Financial Budget, a fiscal watchdog group. To make the bill's price tag appear lower, various parts of the legislation are set to expire. This same tactic was used with Trump's 2017 tax cuts and it set up this year's dilemma, in which many of the tax cuts in that earlier package will sunset next year unless Congress renews them. But the debt is a much bigger problem now than it was eight years ago. Investors are demanding the government pay a higher premium to keep borrowing as the total debt has crossed $36.1 trillion. The interest rate on a 10-year Treasury Note is around 4.5%, up dramatically from the roughly 2.5% rate being charged when the 2017 tax cuts became law. The White House Council of Economic Advisers argues that its policies will unleash so much rapid growth that the annual budget deficits will shrink in size relative to the overall economy, putting the U.S. government on a fiscally sustainable path. The council argues the economy would expand over the next four years at an annual average of about 3.2%, instead of the Congressional Budget Office's expected 1.9%, and as many as 7.4 million jobs would be created or saved. Council chair Stephen Miran told reporters that when that growth is coupled with expected revenues from tariffs, the expected budget deficits will fall. The tax cuts will increase the supply of money for investment, the supply of workers and the supply of domestically produced goods — all of which, by Miran's logic, would cause faster growth without creating new inflationary pressures. 'I do want to assure everyone that the deficit is a very significant concern for this administration,' Miran told reporters recently. White House budget director Russell Vought told reporters the idea that the bill is 'in any way harmful to debt and deficits is fundamentally untrue.' Economists doubt Trump's plan can spark enough growth to reduce deficits Most outside economists expect additional debt would keep interest rates higher and slow overall economic growth as the cost of borrowing for homes, cars, businesses and even college educations would increase. 'This just adds to the problem future policymakers are going to face,' said Brendan Duke, a former Biden administration aide now at the Center on Budget and Policy Priorities, a liberal think tank. Duke said that with the tax cuts in the bill set to expire in 2028, lawmakers would be 'dealing with Social Security, Medicare and expiring tax cuts at the same time.' Kent Smetters, faculty director of the Penn Wharton Budget Model, said the growth projections from Trump's economic team are 'a work of fiction.' He said the bill would lead some workers to choose to work fewer hours in order to qualify for Medicaid. 'I don't know of any serious forecaster that has meaningfully raised their growth forecast because of this legislation,' said Harvard University professor Jason Furman, who was the Council of Economic Advisers chair under the Obama administration. 'These are mostly not growth- and competitiveness-oriented tax cuts. And, in fact, the higher long-term interest rates will go the other way and hurt growth.' The White House's inability so far to calm deficit concerns is stirring up political blowback for Trump as the tax and spending cuts approved by the House now move to the Senate. Republican Sens. Ron Johnson of Wisconsin and Rand Paul of Kentucky have both expressed concerns about the likely deficit increases, with Johnson saying there are enough senators to stall the bill until deficits are addressed. 'I think we have enough to stop the process until the president gets serious about the spending reduction and reducing the deficit,' Johnson said on CNN. Trump banking on tariff revenues to help The White House is also banking that tariff revenues will help cover the additional deficits, even though recent court rulings cast doubt on the legitimacy of Trump declaring an economic emergency to impose sweeping taxes on imports. When Trump announced his near-universal tariffs in April, he specifically said his policies would generate enough new revenues to start paying down the national debt. His comments dovetailed with remarks by aides, including Treasury Secretary Scott Bessent, that yearly budget deficits could be more than halved. 'It's our turn to prosper and in so doing, use trillions and trillions of dollars to reduce our taxes and pay down our national debt, and it'll all happen very quickly,' Trump said two months ago as he talked up his import taxes and encouraged lawmakers to pass the separate tax and spending cuts. The Trump administration is correct that growth can help reduce deficit pressures, but it's not enough on its own to accomplish the task, according to new research by economists Douglas Elmendorf, Glenn Hubbard and Zachary Liscow. Ernie Tedeschi, director of economics at the Budget Lab at Yale University, said additional 'growth doesn't even get us close to where we need to be.' The government would need $10 trillion of deficit reduction over the next 10 years just to stabilize the debt, Tedeschi said. And even though the White House says the tax cuts would add to growth, most of the cost goes to preserve existing tax breaks, so that's unlikely to boost the economy meaningfully. 'It's treading water,' Tedeschi said.
Yahoo
an hour ago
- Business
- Yahoo
Can Trump fix the national debt? Republican senators, many investors and even Elon Musk have doubts
WASHINGTON (AP) — President Donald Trump faces the challenge of convincing Republican senators, global investors, voters and even Elon Musk that he won't bury the federal government in debt with his multitrillion-dollar tax breaks package. The response so far from financial markets has been skeptical as Trump seems unable to trim deficits as promised. 'All of this rhetoric about cutting trillions of dollars of spending has come to nothing — and the tax bill codifies that,' said Michael Strain, director of economic policy studies at the American Enterprise Institute, a right-leaning think tank. 'There is a level of concern about the competence of Congress and this administration and that makes adding a whole bunch of money to the deficit riskier.' The White House has viciously lashed out at anyone who has voiced concern about the debt snowballing under Trump, even though it did exactly that in his first term after his 2017 tax cuts. White House press secretary Karoline Leavitt opened her briefing Thursday by saying she wanted 'to debunk some false claims" about his tax cuts. Leavitt said that the "blatantly wrong claim that the 'One, Big, Beautiful Bill' increases the deficit is based on the Congressional Budget Office and other scorekeepers who use shoddy assumptions and have historically been terrible at forecasting across Democrat and Republican administrations alike.' But Trump himself has suggested that the lack of sufficient spending cuts to offset his tax reductions came out of the need to hold the Republican congressional coalition together. 'We have to get a lot of votes,' Trump said last week. 'We can't be cutting.' That has left the administration betting on the hope that economic growth can do the trick, a belief that few outside of Trump's orbit think is viable. Tech billionaire Musk, who was until recently part of Trump's inner sanctum as the leader of the Department of Government Efficiency, told CBS News: 'I was disappointed to see the massive spending bill, frankly, which increases the budget deficit, not just decreases it, and undermines the work that the DOGE team is doing." Federal debt keeps rising The tax and spending cuts that passed the House last month would add more than $5 trillion to the national debt in the coming decade if all of them are allowed to continue, according to the Committee for a Responsible Financial Budget, a fiscal watchdog group. To make the bill's price tag appear lower, various parts of the legislation are set to expire. This same tactic was used with Trump's 2017 tax cuts and it set up this year's dilemma, in which many of the tax cuts in that earlier package will sunset next year unless Congress renews them. But the debt is a much bigger problem now than it was eight years ago. Investors are demanding the government pay a higher premium to keep borrowing as the total debt has crossed $36.1 trillion. The interest rate on a 10-year Treasury Note is around 4.5%, up dramatically from the roughly 2.5% rate being charged when the 2017 tax cuts became law. The White House Council of Economic Advisers argues that its policies will unleash so much rapid growth that the annual budget deficits will shrink in size relative to the overall economy, putting the U.S. government on a fiscally sustainable path. The council argues the economy would expand over the next four years at an annual average of about 3.2%, instead of the Congressional Budget Office's expected 1.9%, and as many as 7.4 million jobs would be created or saved. Council chair Stephen Miran told reporters that when that growth is coupled with expected revenues from tariffs, the expected budget deficits will fall. The tax cuts will increase the supply of money for investment, the supply of workers and the supply of domestically produced goods — all of which, by Miran's logic, would cause faster growth without creating new inflationary pressures. 'I do want to assure everyone that the deficit is a very significant concern for this administration,' Miran told reporters recently. White House budget director Russell Vought told reporters the idea that the bill is 'in any way harmful to debt and deficits is fundamentally untrue.' Economists doubt Trump's plan can spark enough growth to reduce deficits Most outside economists expect additional debt would keep interest rates higher and slow overall economic growth as the cost of borrowing for homes, cars, businesses and even college educations would increase. 'This just adds to the problem future policymakers are going to face,' said Brendan Duke, a former Biden administration aide now at the Center on Budget and Policy Priorities, a liberal think tank. Duke said that with the tax cuts in the bill set to expire in 2028, lawmakers would be 'dealing with Social Security, Medicare and expiring tax cuts at the same time.' Kent Smetters, faculty director of the Penn Wharton Budget Model, said the growth projections from Trump's economic team are 'a work of fiction.' He said the bill would lead some workers to choose to work fewer hours in order to qualify for Medicaid. 'I don't know of any serious forecaster that has meaningfully raised their growth forecast because of this legislation,' said Harvard University professor Jason Furman, who was the Council of Economic Advisers chair under the Obama administration. 'These are mostly not growth- and competitiveness-oriented tax cuts. And, in fact, the higher long-term interest rates will go the other way and hurt growth.' The White House's inability so far to calm deficit concerns is stirring up political blowback for Trump as the tax and spending cuts approved by the House now move to the Senate. Republican Sens. Ron Johnson of Wisconsin and Rand Paul of Kentucky have both expressed concerns about the likely deficit increases, with Johnson saying there are enough senators to stall the bill until deficits are addressed. 'I think we have enough to stop the process until the president gets serious about the spending reduction and reducing the deficit,' Johnson said on CNN. Trump banking on tariff revenues to help The White House is also banking that tariff revenues will help cover the additional deficits, even though recent court rulings cast doubt on the legitimacy of Trump declaring an economic emergency to impose sweeping taxes on imports. When Trump announced his near-universal tariffs in April, he specifically said his policies would generate enough new revenues to start paying down the national debt. His comments dovetailed with remarks by aides, including Treasury Secretary Scott Bessent, that yearly budget deficits could be more than halved. 'It's our turn to prosper and in so doing, use trillions and trillions of dollars to reduce our taxes and pay down our national debt, and it'll all happen very quickly,' Trump said two months ago as he talked up his import taxes and encouraged lawmakers to pass the separate tax and spending cuts. The Trump administration is correct that growth can help reduce deficit pressures, but it's not enough on its own to accomplish the task, according to new research by economists Douglas Elmendorf, Glenn Hubbard and Zachary Liscow. Ernie Tedeschi, director of economics at the Budget Lab at Yale University, said additional 'growth doesn't even get us close to where we need to be.' The government would need $10 trillion of deficit reduction over the next 10 years just to stabilize the debt, Tedeschi said. And even though the White House says the tax cuts would add to growth, most of the cost goes to preserve existing tax breaks, so that's unlikely to boost the economy meaningfully. 'It's treading water,' Tedeschi said. Josh Boak, The Associated Press 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
Associated Press
an hour ago
- Business
- Associated Press
Can Trump fix the national debt? Republican senators, many investors and even Elon Musk have doubts
WASHINGTON (AP) — President Donald Trump faces the challenge of convincing Republican senators, global investors, voters and even Elon Musk that he won't bury the federal government in debt with his multitrillion-dollar tax breaks package. The response so far from financial markets has been skeptical as Trump seems unable to trim deficits as promised. 'All of this rhetoric about cutting trillions of dollars of spending has come to nothing — and the tax bill codifies that,' said Michael Strain, director of economic policy studies at the American Enterprise Institute, a right-leaning think tank. 'There is a level of concern about the competence of Congress and this administration and that makes adding a whole bunch of money to the deficit riskier.' The White House has viciously lashed out at anyone who has voiced concern about the debt snowballing under Trump, even though it did exactly that in his first term after his 2017 tax cuts. White House press secretary Karoline Leavitt opened her briefing Thursday by saying she wanted 'to debunk some false claims' about his tax cuts. Leavitt said that the 'blatantly wrong claim that the 'One, Big, Beautiful Bill' increases the deficit is based on the Congressional Budget Office and other scorekeepers who use shoddy assumptions and have historically been terrible at forecasting across Democrat and Republican administrations alike.' But Trump himself has suggested that the lack of sufficient spending cuts to offset his tax reductions came out of the need to hold the Republican congressional coalition together. 'We have to get a lot of votes,' Trump said last week. 'We can't be cutting.' That has left the administration betting on the hope that economic growth can do the trick, a belief that few outside of Trump's orbit think is viable. Tech billionaire Musk, who was until recently part of Trump's inner sanctum as the leader of the Department of Government Efficiency, told CBS News: 'I was disappointed to see the massive spending bill, frankly, which increases the budget deficit, not just decreases it, and undermines the work that the DOGE team is doing.' Federal debt keeps rising The tax and spending cuts that passed the House last month would add more than $5 trillion to the national debt in the coming decade if all of them are allowed to continue, according to the Committee for a Responsible Financial Budget, a fiscal watchdog group. To make the bill's price tag appear lower, various parts of the legislation are set to expire. This same tactic was used with Trump's 2017 tax cuts and it set up this year's dilemma, in which many of the tax cuts in that earlier package will sunset next year unless Congress renews them. But the debt is a much bigger problem now than it was eight years ago. Investors are demanding the government pay a higher premium to keep borrowing as the total debt has crossed $36.1 trillion. The interest rate on a 10-year Treasury Note is around 4.5%, up dramatically from the roughly 2.5% rate being charged when the 2017 tax cuts became law. The White House Council of Economic Advisers argues that its policies will unleash so much rapid growth that the annual budget deficits will shrink in size relative to the overall economy, putting the U.S. government on a fiscally sustainable path. The council argues the economy would expand over the next four years at an annual average of about 3.2%, instead of the Congressional Budget Office's expected 1.9%, and as many as 7.4 million jobs would be created or saved. Council chair Stephen Miran told reporters that when that growth is coupled with expected revenues from tariffs, the expected budget deficits will fall. The tax cuts will increase the supply of money for investment, the supply of workers and the supply of domestically produced goods — all of which, by Miran's logic, would cause faster growth without creating new inflationary pressures. 'I do want to assure everyone that the deficit is a very significant concern for this administration,' Miran told reporters recently. White House budget director Russell Vought told reporters the idea that the bill is 'in any way harmful to debt and deficits is fundamentally untrue.' Economists doubt Trump's plan can spark enough growth to reduce deficits Most outside economists expect additional debt would keep interest rates higher and slow overall economic growth as the cost of borrowing for homes, cars, businesses and even college educations would increase. 'This just adds to the problem future policymakers are going to face,' said Brendan Duke, a former Biden administration aide now at the Center on Budget and Policy Priorities, a liberal think tank. Duke said that with the tax cuts in the bill set to expire in 2028, lawmakers would be 'dealing with Social Security, Medicare and expiring tax cuts at the same time.' Kent Smetters, faculty director of the Penn Wharton Budget Model, said the growth projections from Trump's economic team are 'a work of fiction.' He said the bill would lead some workers to choose to work fewer hours in order to qualify for Medicaid. 'I don't know of any serious forecaster that has meaningfully raised their growth forecast because of this legislation,' said Harvard University professor Jason Furman, who was the Council of Economic Advisers chair under the Obama administration. 'These are mostly not growth- and competitiveness-oriented tax cuts. And, in fact, the higher long-term interest rates will go the other way and hurt growth.' The White House's inability so far to calm deficit concerns is stirring up political blowback for Trump as the tax and spending cuts approved by the House now move to the Senate. Republican Sens. Ron Johnson of Wisconsin and Rand Paul of Kentucky have both expressed concerns about the likely deficit increases, with Johnson saying there are enough senators to stall the bill until deficits are addressed. 'I think we have enough to stop the process until the president gets serious about the spending reduction and reducing the deficit,' Johnson said on CNN. Trump banking on tariff revenues to help The White House is also banking that tariff revenues will help cover the additional deficits, even though recent court rulings cast doubt on the legitimacy of Trump declaring an economic emergency to impose sweeping taxes on imports. When Trump announced his near-universal tariffs in April, he specifically said his policies would generate enough new revenues to start paying down the national debt. His comments dovetailed with remarks by aides, including Treasury Secretary Scott Bessent, that yearly budget deficits could be more than halved. 'It's our turn to prosper and in so doing, use trillions and trillions of dollars to reduce our taxes and pay down our national debt, and it'll all happen very quickly,' Trump said two months ago as he talked up his import taxes and encouraged lawmakers to pass the separate tax and spending cuts. The Trump administration is correct that growth can help reduce deficit pressures, but it's not enough on its own to accomplish the task, according to new research by economists Douglas Elmendorf, Glenn Hubbard and Zachary Liscow. Ernie Tedeschi, director of economics at the Budget Lab at Yale University, said additional 'growth doesn't even get us close to where we need to be.' The government would need $10 trillion of deficit reduction over the next 10 years just to stabilize the debt, Tedeschi said. And even though the White House says the tax cuts would add to growth, most of the cost goes to preserve existing tax breaks, so that's unlikely to boost the economy meaningfully. 'It's treading water,' Tedeschi said.
Deccan Herald
12 hours ago
- Politics
- Deccan Herald
Iran minister says Oman presented elements of a US proposal for nuclear deal
White House press secretary Karoline Leavitt said later on Saturday that US President Donald Trump's special envoy Steve Witkoff "has sent a detailed and acceptable proposal to the Iranian regime, and it's in their best interest to accept it."
Fox News
12 hours ago
- General
- Fox News
White House urges Iran to accept nuclear deal as IAEA reports uranium enrichment spike
The White House on Saturday said it is in Iran's "best interest to accept" its proposal on a nuclear deal following a report from the International Atomic Energy Agency saying the country is swiftly increasing its stockpile of near weapons-grade enriched uranium. "President Trump has made it clear that Iran can never obtain a nuclear bomb," White House press secretary Karoline Leavitt said in a statement. "Special Envoy [Steve] Witkoff has sent a detailed and acceptable proposal to the Iranian regime, and it's in their best interest to accept it. Out of respect for the ongoing deal, the administration will not comment on details of the proposal to the media." The IAEA's report said Iran had increased its stockpile to 900.8 pounds of uranium enriched by up to 60% as of May 17, a nearly 50% increase since the agency's last report in February, which put the stockpile at 605.8 pounds. The report said Iran is "the only non-nuclear-weapon state to produce such material," which is a "serious concern." The IAEA added that just 92 pounds of 60% enriched uranium is enough to produce an atomic bomb if it is enriched to 90%. Iran maintains that its nuclear program is for peaceful purposes, but U.S. intelligence agencies say the country has "undertaken activities that better position it to produce a nuclear device, if it chooses to do so." Iran's Foreign Ministry and the Atomic Energy Organization of Iran said in a joint statement that the report was based on "unreliable and differing information sources," claiming that it was biased and unprofessional. The statement added, "The Islamic Republic of Iran expresses its disappointment about the report, which was prepared by imposing pressure on the agency for political purposes, and expresses its obvious objection about its content." On Thursday, Iran Foreign Minister Abbas Araghchi wrote on X that he was unsure a U.S.-Iran nuclear deal could be imminently reached. "Iran is sincere about a diplomatic solution that will serve the interests of all sides. But getting there requires an agreement that will fully terminate all sanctions and uphold Iran's nuclear rights — including enrichment," he wrote. Oman Foreign Minister Badr al-Busaidi presented the Trump administration's first formal proposal in Tehran Saturday, which calls for Iran to cease all uranium enrichment and for a regional consortium that includes Iran, Saudi Arabia and other Arab states and the U.S. for producing nuclear power, The New York Times reported, citing people familiar with the document. Israeli Prime Minister Benjamin Netanyahu's office also put out a rare statement on a Saturday about the IAEA's report, calling it "grave." "The agency presents a stark picture that serves as a clear warning sign: Despite countless warnings by the international community, Iran is totally determined to complete its nuclear weapons program," Netanyahu's office said. "The report strongly reinforces what Israel has been saying for years — the purpose of Iran's nuclear program is not peaceful. This is evident from the alarming scope of Iran's uranium enrichment activity. Such a level of enrichment exists only in countries actively pursuing nuclear weapons and has no civilian justification whatsoever. "The report clearly indicates that Iran remains in non-compliance of its fundamental commitments and obligations under the Non-Proliferation Treaty (NPT) and continues to withhold cooperation from IAEA inspectors. The international community must act now to stop Iran."
