The Congressional Budget Office (CBO) projects that President Donald Trump's proposed One Big Beautiful Bill Act tax cut package would increase federal debt by over US$3.3 trillion (approximately HK$25.9 trillion) in the next decade, raising fresh concerns about America's fiscal sustainability.
A New York Times analysis warns that the fundamental risk lies in making tax cuts permanent, which would erode the government's primary revenue source. The already troubling U.S. debt situation is expected to worsen significantly.
Republicans are using accounting maneuvers to bypass Senate budget rules requiring legislation to be deficit-neutral over 10 years. By claiming that extending existing tax policies doesn't count as new spending, they've opened the door to substantially raising the debt ceiling while demonstrating declining congressional commitment to fiscal restraint.
This bill is a warning signal for bond markets, said Wharton School economist Kent Smetters. Forward-looking practitioners should be alarmed by both the actual numbers and the dangerous precedent being set.
A senior fiscal policy director at the Center on Budget and Policy Priorities warned that repeated tax cuts are systematically reducing federal revenues: The doomsday scenario is investors losing confidence in the U.S. government's ability to repay debt, which would rapidly increase borrowing costs across the entire economy and severely impact all Americans.
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