President Donald Trump’s big tax bill, which promises trillions in tax cuts and spending reductions, is drawing significant controversy after a report from the Congressional Budget Office (CBO) estimated it would add $2.4 trillion to the deficit over the next decade.
Despite these concerns, Republican leaders in Congress remain determined to push the bill forward, which is also expected to leave 10.9 million more people without health insurance.
Details of the Bill and CBO’s Findings
The bill, known as the One Big Beautiful Bill Act, includes $3.75 trillion in tax cuts aimed at extending the 2017 tax breaks and introducing new tax cuts, such as exemptions on tips.
While Republicans argue these cuts will boost the economy, the CBO estimates that the bill will increase the federal deficit by $2.4 trillion over the next 10 years. This includes $1.3 trillion in spending cuts, largely targeting Medicaid and food assistance programs, which will significantly affect vulnerable populations.
Key provisions in the bill include:
- $3.75 trillion in tax cuts, with new cuts for overtime pay and tips.
- A $350 billion increase for border security, deportations, and national security.
- An increase in the debt limit by $4 trillion, which is needed to keep the government running and pay off bills.
However, Republicans are pushing back on the CBO’s assessment, claiming that their tax cuts will lead to economic growth, which the CBO allegedly fails to account for. Senate Majority Leader John Thune dismissed the CBO’s findings, asserting that the bill would not exacerbate the deficit in the long term.
Impact on Health Care and Food Assistance
A significant aspect of the bill is its impact on healthcare and food assistance. The CBO reports that 7.8 million people would lose health insurance, mainly due to changes to Medicaid, including new work requirements for non-disabled adults.
Additionally, the bill is set to reduce benefits under the Supplemental Nutrition Assistance Program (SNAP), which could affect nearly 4 million people by reducing food stamp assistance.
These cuts are at the center of the Democratic opposition, with Senate Democratic Leader Chuck Schumer accusing Republicans of attempting to undermine healthcare systems and calling the bill an effort to repeal the Affordable Care Act (ACA).
Musk’s Criticism and Political Fallout
Adding another layer of controversy, Elon Musk recently joined critics of the bill, calling it a “disgusting abomination”. This came as a surprise to many, particularly since Musk has had a closer relationship with Republicans in recent years.
House Speaker Mike Johnson scrambled to downplay Musk’s criticism, stating that he had called the billionaire to discuss the issue, though he had not received a response. Musk, however, continued to urge voters to call their representatives and senators to oppose the bill.
Musk’s stance also raised concerns due to the bill’s green energy rollbacks, which could impact his business interests, particularly in the electric vehicle and renewable energy sectors. His strong opposition could affect the GOP’s midterm election prospects, as Musk has significant influence with certain conservative voters.
Republican Push and Democrats’ Relentless Opposition
Despite opposition from Democrats, who have strongly criticized the bill for its impact on healthcare and social services, Republicans remain firm in their commitment to passing the legislation. Senate Republicans are hoping to modify the bill, making significant changes before it reaches Trump’s desk.
The House passed the bill last month by a single vote, but it’s now facing more resistance in the Senate, where Republicans are negotiating specific aspects, including the tax cuts and the spending reductions.
The Politics of the Bill
The tax cuts in the bill, specifically the individual income tax breaks approved during Trump’s first term, are set to expire in December, making their extension a critical issue for Republicans. They argue that if the cuts are not extended, it would result in a massive tax hike for many American households.
However, even some Republicans have expressed concerns about the bill’s long-term financial impact, particularly the increase in the deficit. Trump is determined to pass the bill by the Fourth of July, and Republican leaders are pushing forward with a message that the bill will lead to a reduced deficit—though critics remain skeptical.