Hot Off the Press: "Big Gorgeous Bucks" Legislation: Trump's Tax Bill May Pile On Trillions in US Debt
Research Findings: Trump's Tax Policy Anticipated to Add Trillions to American National Debt - Increasing US debt potential due to proposed tax legislation by Trump
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If you're a fan of Donald Trump's administration, buckle up! The grand tax and spending bill under his leadership could add another $2.8 trillion to the US budget deficit over the next decade, according to a fresh insider's scoop from the bipartisan Congressional Budget Office (CBO). And just to sweeten the deal, they've accounted for some economic growth! They spilled the beans on Tuesday.
Two weeks back, the CBO wasn't feeling as magnanimous in their predictions, with an increase in public debt from the staggering $36.2 trillion to only $2.4 trillion when disregarding economic advancements. But with the economic growth thrown into the mix, the new figure climbs to a whopping $3 trillion.
This revelation bubbles the champagne of Trump's Republicans, who insist their comprehensive package will nudge the US economy into such a splendid state that they'll save on public debt with higher revenues. Senate Republican leader John Thune was quoted on Tuesday, saying, "We think it will lead to a stronger, wealthier America."
The House of Representatives already gave the green light to the bill back in May, christening it the "One Big Gorgeous Bucks Act." Senators are currently conferencing on a revamped version of the bill. But for it to become official, both chambers of Congress need to wrangle a shared version, which will then be tossed to Trump.
The current version extends the Trump-era tax cuts granted during his first term, originally set to expire this year, all the way up to 2021. To compensate, they're planning some draconian cuts to the healthcare program, Medicaid. Mainly serving the less fortunate and retired folks, Medicaid is looking at some major surgery.
- Tax Bill
- Donald Trump
- USA
Enrichment Data:
The main tax provisions of Trump's legislative plan are anticipated to significantly decimate federal tax revenues, with estimated losses approaching $4.8 trillion in revenue between 2025 and 2034 on a conventional basis. However, when considering economic effects, such as GDP growth, the revenue loss narrows to around $3.9 trillion over the same period.[2]
The reduction in federal revenues due to the tax cuts would logically translate into an increase in the federal budget deficit and increased public debt. Among literature consulted, it's projected that incorporating permanent provisions would raise debt-service costs by $687 billion over 2025–2034 and augment the cumulative deficit effect of the bill to approximately $4.5 trillion.[4]
On the other hand, advocates of the bill persist that mandated savings and other measures included in the legislation would reduce spending and offset some deficit increases. For instance, claims have surfaced that the bill delivers nearly $1.7 trillion in mandatory savings and, accounting for offsets like border security spending and other tax changes, may yield a deficit reduction of about $1.4 trillion. Further speculations suggest additional deficit reductions from tariffs and spending cuts could bring the total deficit reduction actions to at least $6.6 trillion over the decade.[3] However, these speculations are more politically-motivated and less in line with CBO's impartial assessments.
The tax law, as proposed by Donald Trump and currently being debated in the USA, could lead to significant financial implications as it may add trillions to the US debt over the next decade, according to the Congressional Budget Office (CBO). This legislation, known as the "One Big Gorgeous Bucks Act," is expected to cause a substantial reduction in federal tax revenues, with losses approaching $4.8 trillion in revenue between 2025 and 2034, potentially impacting the general news and politics landscape of the business world.
