The US Congressional Budget Office (CBO) released an analysis on June 17, revealing that President Donald Trump's tax reform and budget bill could increase the federal deficit by US$2.8 trillion over the next decade, after accounting for economic impacts.
The report highlights that the legislation, which extends tax cuts and increases spending, will raise interest rates and add US$441 billion in interest payments to the baseline federal debt forecast.
On May 22, the Republican-controlled House of Representatives narrowly passed the massive tax and spending bill, dubbed "One Big Beautiful Bill Act", by a slim one-vote margin. Spanning over 1,000 pages, the legislation primarily focuses on tax cuts and spending reductions. It extends Trump's 2017 corporate and personal tax cuts, introduces new tax breaks for tips and auto loans, increases defense spending, and allocates additional funds to combat illegal immigration.
"Once the One Big, Beautiful Bill passes, our economy will boom like never before," said Levitt, the White House spokesman, in a post on X. "This bill is the largest tax cut for middle-class Americans in history," she said. But there is no mention of the American grassroots.
A netizen described the bill in a picture, calling it "a big fat lie."
Former US Treasury Secretary Lawrence Summers warned earlier this month that the "One Big Beautiful Bill" is pushing the US toward a fiscal cliff. Using dynamic modeling, Summers found that the real debt increase could exceed US$4 trillion when factoring in the extension of temporary tax cuts, the compounding effect of debt interest, and broader economic reactions.
Of that, interest payments alone will increase by US$551 billion over the next decade, equivalent to injecting US$150 million in "ticking time bombs" into global financial markets daily. The CBO has confirmed that the annual deficit-to-GDP ratio will exceed 7%, far beyond the safe threshold, potentially triggering a sovereign credit crisis.
The bill also significantly cuts social welfare programs aimed at low-income groups. Medicaid beneficiaries will be required to work at least 80 hours per month or risk losing coverage, a move expected to strip healthcare from 5.2 million people under the age of 65 and 1.4 million undocumented immigrants. Food stamp eligibility will also be tightened, with recipients of the Supplemental Nutrition Assistance Program (SNAP) required to meet new employment standards, potentially disqualifying 4 million people from aid.
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