Trump tax law projected to add US$3.4 trillion to US deficits
Trump’s ‘One Big Beautiful Bill’ was signed into law on July 4 after months of negotiations with congressional Republicans
US President Donald Trump’s recently enacted tax and spending law will add US$3.4 trillion to US deficits over a decade and leave millions without healthcare coverage, according to a new estimate from the non-partisan Congressional Budget Office.
The CBO score for the law, released on Monday, reflects a US$4.5 trillion decrease in revenues and a US$1.1 trillion decline in spending until 2034, relative to a current-law baseline.
The new analysis does not incorporate so-called dynamic effects, such as the impact on growth or interest rates over time that the legislation’s measures might have.
Encompassing much of Trump’s economic agenda, it permanently extends his 2017 income-tax cuts and some breaks for businesses, lifts the cap on federal deductions for state and local taxes, and eliminates taxes on tips and overtime on a temporary basis, among other provisions.
Passage of the law triggered warnings from some economists and investors about a widening of America’s budget – already large by historical standards – that could push borrowing costs and inflation up.
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