CBO Warns Trump’s $3.7T Tax Cut Plan Will Increase Deficit by $2.4T

Washington, D.C. — President Donald Trump’s massive tax and spending bill is now under the spotlight after the Congressional Budget Office (CBO) revealed its full financial breakdown. Named the “One Big Beautiful Bill Act” by Trump himself, the proposed legislation promises major tax relief but could lead to serious long-term consequences for the federal budget.

According to the CBO’s detailed report, the bill would cut taxes by $3.7 trillion over the next 10 years but add $2.4 trillion to the national deficit. The federal government would also reduce spending by about $1.3 trillion during that time. These projections come at a crucial time, as the bill moves through Congress and Trump pushes to have it signed into law by July 4.

What the Numbers Say

The national debt is already close to $36 trillion. The bill would increase the government’s borrowing limit by $4 trillion to avoid a shutdown or default. The Treasury has warned that the limit must be raised this summer to pay current obligations.

The CBO’s analysis indicates a wide gap between the revenue the bill would remove and the savings it claims to create. That gap — $2.4 trillion — is expected to significantly deepen the national deficit.

Cuts to Programs and Changes to Benefits

To offset some of the lost revenue, the bill proposes cuts to key government assistance programs:

• New work requirements for people aged 19 to 65 on Medicaid and SNAP (food stamps) starting in 2026.

• Gradual removal of green energy tax incentives introduced during President Joe Biden’s term.

The CBO estimates these changes would leave 8.6 million people without Medicaid coverage and reduce monthly food assistance for 4 million individuals.

Tax Cuts and Business Benefits

The bill builds on Trump’s 2017 tax law by extending and expanding several tax breaks:

• Making income tax cuts from 2017 permanent.

• Eliminating taxes on tips for service workers.

• Increasing the standard deduction and child tax credit.

• Adding new deductions for businesses to support investment.

Supporters argue that these changes would increase take-home pay and encourage business growth. Critics say the biggest benefits would go to wealthy Americans and corporations.

$350 Billion for Security Spending

The bill also allocates $350 billion to border security, deportation enforcement, and national defense. Plans include hiring thousands of new border agents, expanding detention centers, and improving surveillance technologies.

Political Backlash and Pushback Against the CBO

Even before the CBO’s report was released, Trump’s allies tried to cast doubt on its reliability. White House Press Secretary Karoline Leavitt said the CBO has a history of getting projections wrong, particularly when it underestimated tax revenues after Trump’s 2017 tax cuts.

Senate Majority Leader John Thune criticized the report, claiming that it fails to account for economic growth that could increase future revenues. Despite these attacks, the CBO defended its findings, emphasizing its role as a nonpartisan agency with strict ethical standards.

The CBO’s Role

Created in 1975, the CBO serves as Congress’s official budget watchdog. It provides independent analysis to lawmakers without political influence. The agency has around 275 employees, including economists and policy analysts, who are legally restricted from engaging in political activity.

Its current director, Phillip Swagel, previously worked in the Treasury Department under President George W. Bush. He was reappointed in 2023.

How Everyday Americans Could Feel the Impact

If passed, the bill would affect nearly every household. While some would benefit from lower taxes and higher deductions, others might lose access to Medicaid or food assistance. In the short term, the economy could see a boost in spending, but experts worry about long-term effects like higher interest rates, inflation, and shrinking public services.

Economists are split on the outlook. Some say the tax cuts will drive economic growth. Others warn that the rising debt could lead to financial instability and greater inequality.

Congress Gears Up for a Fierce Fight Over the Bill

Congressional hearings and amendments are expected in the coming weeks. Republicans hope to finalize the bill before Independence Day, turning it into a symbol of economic strength. But with deep partisan divides and growing public concern, the path forward is uncertain.

Democrats have strongly opposed the bill, calling it a giveaway to the rich at the expense of working families. Senate Minority Leader Chuck Schumer said, “This bill is about priorities — and Republicans are clearly not prioritizing everyday Americans.”

Many Americans are watching closely. The decisions made in Washington will shape the country’s financial future — and directly impact lives across the nation.

With the stakes this high, the coming weeks will decide whether Trump’s big bill becomes law or stalls under the weight of its own cost.

Also Read: Trump Criticizes Rand Paul Over Debt Ceiling Standoff Jeopardizing Tax-Cut Bill