Republican senate tax bill would add $3.3 trillion to the US debt load, CBO says
WASHINGTON (AP) — The changes made to President Donald Trump's big tax bill in the Senate would pile trillions onto the nation's debt load while resulting in even steeper losses in health care coverage, the nonpartisan Congressional Budget Office said in a new analysis, adding to the challenges for Republicans as they try to muscle the bill to passage.
The CBO estimates the Senate bill would increase the deficit by nearly $3.3 trillion from 2025 to 2034, a nearly $1 trillion increase over the House-passed bill, which CBO has projected would add $2.4 to the debt over a decade.
The analysis also found that 11.8 million more Americans would become uninsured by 2034 if the bill became law, an increase over the scoring for the House-passed version of the bill, which predicts 10.9 million more people would be without health coverage.
The stark numbers are yet another obstacle for Republican leaders as they labor to pass Trump's bill by his self-imposed July 4th deadline.
Even before the CBO's estimate, Republicans were at odds over the contours of the legislation, with some resisting the cost-saving proposals to reduce spending on Medicaid and food aid programs even as other Republicans say those proposals don't go far enough. Republicans are slashing the programs as a way to help cover the cost of extending some $3.8 trillion in Trump tax breaks put in place during his first term.
The push-pull was on vivid display Saturday night as a routine procedural vote to take up the legislation in the Senate was held open for hours as Vice President JD Vance and Republican leaders met with several holdouts. The bill ultimately advanced in a 51-49 vote, but the path ahead is fraught, with voting on amendments still to come.
Still, many Republicans are disputing the CBO estimates and the reliability of the office's work. To hoist the bill to passage, they are using a different budget baseline that assumes the Trump tax cuts expiring in December have already been extended, essentially making them cost-free in the budget.
The CBO on Saturday released a separate analysis of the GOP's preferred approach that found the Senate bill would reduce deficits by about $500 billion.
Democrats and economists decry the GOP's approach as 'magic math' that obscures the true costs of the GOP tax breaks.
In addition, Democrats note that under the traditional scoring system, the Republican bill bill would violate the Senate's 'Byrd Rule' that forbids the legislation from increasing deficits after 10 years.
In a Sunday letter to Oregon Sen. Jeff Merkley, the top Democrat on the Senate Budget Committee, CBO Director Phillip Swagel said the office estimates that the Finance Committee's portion of the bill, also known as Title VII, 'increases the deficits in years after 2034' under traditional scoring.
Hashtags
Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
Yahoo
27 minutes ago
- Yahoo
My dad, the main breadwinner, just lost his job at 61. And he fears he won't find work at his age — what now?
Losing a job can be a huge blow at any age. But when you're in your 60s, it can be an even harder struggle. Although it's illegal for employers to discriminate against job candidates based on age, it happens frequently and it's hard to prove if it happens to you. AARP reports that 74% of job seekers aged 50 and over have concerns that their older age will be an impediment to being hired. If you're in the position in question, it could make for a difficult financial situation. Plus, you're still a year away from being able to claim Social Security benefits. While you're old enough to access a 401(k) or IRA without facing an early withdrawal penalty, tapping one of those accounts at 61 could lead to a savings shortfall later on. There's also the issue of health insurance to think about. If you were covered through your job, you're still four years away from being eligible for Medicare. Here's how to handle this unfortunate situation on a short- and longer-term basis. I'm 49 years old and have nothing saved for retirement — what should I do? Don't panic. Here are 6 of the easiest ways you can catch up (and fast) Thanks to Jeff Bezos, you can now become a landlord for as little as $100 — and no, you don't have to deal with tenants or fix freezers. Here's how Want an extra $1,300,000 when you retire? Dave Ramsey says this 7-step plan 'works every single time' to kill debt, get rich in America — and that 'anyone' can do it Losing a job can be a shock, so you may need a few days or even weeks before you feel ready to dive into a job search. But one thing you should do immediately is file for unemployment benefits. Typically, you're eligible for up to six months of benefits if you lose a job through no fault of your own and meet your state's earnings requirements. Unemployment benefits won't replace your full paycheck, but at least you'll have a portion covered. You should also talk to your employer about severance, if applicable. And if there's no severance package, see if you're entitled to be paid out on accrued vacation or sick days you never used. That could add some extra money in your bank account while you figure out your next steps. Additionally, it's time to assess your emergency fund to see how many months of bills it can cover. If you're able to cut back on spending, between lower expenses, your wife's paycheck and unemployment benefits, you may be able to get away with minimally tapping your emergency fund while you start your job search. You'll also need to figure out next steps regarding health insurance — check to see If you can get onto your wife's job plan (if it offers health benefits). The Consolidated Omnibus Budget Reconciliation Act (COBRA) may be an option, as it allows you to retain your employer coverage for a period of 18 to 36 months. But it can prove to be extremely expensive, since you're effectively paying the unsubsidized rate for your old health plan. You may find that a marketplace plan through is cheaper, especially if you qualify for a subsidy. Read more: You don't have to be a millionaire to gain access to . In fact, you can get started with as little as $10 — here's how This is the time to be aggressively job-hunting. Until you're able to find a full-time job, it's important to preserve your savings — both your emergency fund and your retirement nest egg. If you're still unemployed at the six-month mark, look at gig work, a side hustle or a part-time job when your unemployment benefits run out. That way, you'll have some income coming in while you continue looking for a full-time job. It's also important to look at your retirement portfolio carefully. If you weren't planning to use that money for another five years or longer, you may have a larger portion of your portfolio in stocks. If it's looking like you may need to tap into your nest egg sooner, shift a portion of your portfolio out of stocks and into assets that are stable, such as bonds and CD ladders. The good news is that interest rates are still pretty strong, so you can earn a decent return from a CD ladder without taking on the same risks you do with other investments. You can even keep a chunk of your retirement funds in a high-yield savings account, for added flexibility. It can be discouraging once you've reached the 12-month mark of being unemployed. But keep the faith and don't give up! It could make sense to shift away from seeking a full-time job and see if you can get by with a couple of part-time jobs or expand your side hustle to tide yourself over until retirement. Of course, you may not end up being able to earn the income you want in the coming years, so you'll need to figure out if you can maintain a pared-down lifestyle to avoid draining your nest egg early. By now, your home may be paid off. If so, downsizing is an option. It could allow you to not only lower your housing costs, but walk away with some equity you can use as income. Another option you can look at is claiming early Social Security. You'll face a permanent reduction in benefits if you don't wait until age 67 to claim them, since that's your full retirement age based on your year of birth. But if you're scared to tap your retirement funds and can only reduce your expenses so much, at least it's on the table. Depending on your situation, it could make more sense to tap your savings than to claim Social Security early. If you get a full-time job at the 18- or 24-month mark, you can replenish your savings then. But once you claim Social Security early, you're generally locked into the lower monthly benefit for life. Looking on the bright side, if your financial situation permits, you could leverage your current lower income by converting some retirement funds to a Roth IRA, which offers tax-free withdrawals in retirement. Keep in mind, though, that you'll need to pay taxes on the converted amount in the current tax year. If you're experiencing financial difficulties, adding this tax burden might not be the best choice right now. This tiny hot Costco item has skyrocketed 74% in price in under 2 years — but now the retail giant is restricting purchases. Here's how to buy the coveted asset in bulk Robert Kiyosaki warns of a 'Greater Depression' coming to the US — with millions of Americans going poor. But he says these 2 'easy-money' assets will bring in 'great wealth'. How to get in now Rich, young Americans are ditching the stormy stock market — here are the alternative assets they're banking on instead Here are 5 'must have' items that Americans (almost) always overpay for — and very quickly regret. How many are hurting you? Stay in the know. Join 200,000+ readers and get the best of Moneywise sent straight to your inbox every week for free. This article provides information only and should not be construed as advice. It is provided without warranty of any kind.
Newsweek
28 minutes ago
- Newsweek
The 1600: America Doesn't Have a Conservative Party
The Insider's Track Good morning, I paid $8 for a black iced coffee yesterday in my neighborhood. Eight. Dollars. Sometimes I think most of the underlying rage you see bubbling up around the country can be attributed to this feeling of just being constantly ripped off wherever you go. Speaking of getting ripped off, Congress is in the process of stitching up the votes on President Trump's "Big Beautiful Bill" flagship legislation in hopes of getting it to his desk by the Fourth. Following a narrow 51–49 procedural vote over the weekend, the Senate advanced the bill to the debate stage, with Senators Rand Paul and Thom Tillis joining all Democrats in opposition. Targeted by MAGA for his disloyalty, Tillis immediately announced he's not running for re-election, thus putting NC potentially in play for Senate Dems next year (the modern GOP has no room for actual conservatives). So once the Senate passes the bill, it gets kicked back to the House as part of the reconciliation process before going to Trump. I'd put it at extremely likely that this giant turd of a bill becomes law in time for the fireworks on Friday. So what's in this thing? It's mostly an extension of the 2017 tax cuts, with some deep cuts to the welfare state for good measure. The current Senate version raises the debt ceiling $5 trillion. It'll increase the deficit by some $3 trillion over the next decade, per the Congressional Budget Office. (I've seen lots of Trump supporters attack the CBO for its scoring of this bill as some kind of "lefty" organization. Please. The CBO is run by a Bush appointee). The bill uses this well-worn accounting trick to make it look like Republicans are actually reducing the deficit by $508 billion, as Lindsey Graham falsely claimed over the weekend. But that's based on this little gimmick that lets them basically write off the $4 trillion cost of extending the tax cuts. So when you see Republicans tossing around that $508B number this week, it should immediately set off your B.S. detector. Here's some other random little tidbits that caught my eye in the current manifestation of the bill: A huge cut in SNAP benefits and food assistance for the poor, plus another $1 trillion in cuts to Medicaid, Medicare and Obamacare (but mostly Medicaid). Millions will probably lose their coverage. This is the provision that Dems could run with as a winning message for the midterms, if they aren't too busy fighting for trans girls in sports or whatever. A tax on remittances, which is the money that immigrants send home, has been watered down to effectively be meaningless. House Rs passed a 5% tax on remittance, which was cut to 3.5% by the Senate, and then further to 1%. It also doesn't apply to bank transfers. This is one of those things I don't understand. It's a tax on US dollars flowing out of the country. Who is the lobby pushing Senate Rs against this? Western Union? On the energy front, the bill phases out Biden's tax credits for solar and wind—not surprising—while adding an excise tax on new renewable projects that utilize components made in China. At the same time, there's provisions tucked in there to incentivize domestic coal production. Making Coal Great Again, baby. Our children will be ashamed of us. Thankfully, the bill no longer includes Sen. Mike Lee's provision to sell off millions of acres of pristine federal land in the West to developers after an outcry from (actual) conservative voters. Teddy Roosevelt would've been spinning in his grave. The bottom line is that this legislation acts as a giant wealth transfer from the poor to the rich and the young to the old. Younger earners get nothing from the tax cuts, which are all structured to benefit higher-earners. It adds trillions to the national debt, which means higher taxes and mortgage payments for young Americans trying to start or build their families. One nonpartisan analysis suggests a 40-year-old making the median income will lose $7,500 over their lifetime, while a 70-year-old with the same income nets $17,500. The Boomers win, as always. And then we wonder why young voters turn out in record numbers in our most expensive city to elect a socialist. If this is the alternative, why wouldn't they? If this whole charade does anything, it should finally disabuse Americans of this notion that modern-day Republicans are the conservative party. You simply cannot be an actual conservative while voting to increase the debt, adding to the deficit, all while doing precisely nothing to deal with our spending problem. The Rundown A fierce war of words has erupted between Iran's Supreme Leader Ali Khamenei and President Donald Trump following recent U.S. strikes on Iran's nuclear facilities. Khamenei accused Trump of "exaggerating in order to cover up and conceal the truth," directly responding to Trump's claim that the U.S. had "obliterated" Iran's nuclear sites. Separately, Trump said that he is offering Iran "nothing" and is refusing to engage with Iranian officials, signaling a hardening U.S. stance. Read more. Also happening: US-Canada trade talks: Canada and the United States have resumed trade negotiations after Canadian Prime Minister Mark Carney agreed to rescind the country's digital services tax on U.S. technology companies. The development follows President Donald Trump's announcement on Friday that he was suspending all trade talks with Canada "effective immediately" over the tax policy. Here's the latest. Week in review: President Donald Trump is coming off what may be his most successful week in office—a landmark Supreme Court ruling, a successful NATO summit, a ceasefire that appears to be holding in the Middle East, another peace deal in Africa, a stock market back to setting records and a key trade breakthrough with China. Read more. This is a preview of The 1600—Tap here to get this newsletter delivered straight to your inbox.
Yahoo
30 minutes ago
- Yahoo
Last-minute changes to Senate's 'big, beautiful bill' stun clean energy industry (and Elon Musk)
The Senate is making a final push to advance President Trump's signature legislation with a flurry of last-minute changes that stunned Elon Musk and the already besieged clean energy industry while offering new support for fossil fuels. The controversy surrounding the bill's energy approach is just one front in a frenzied final push with plenty of additional attention on the price tag after a new weekend tally found that bill has grown by nearly $1 trillion since the Senate took it up. Meanwhile a grueling final Senate push to approve the package cleared a key procedural hurdle over the weekend, with consideration continuing and an amendment process expected to take up much of Monday before a final vote later Monday or perhaps Tuesday. The energy provisions of the 900-plus page bill have come in for particular scrutiny after last minute changes phased out clean energy tax credits faster than expected and also added new taxes on wind and solar projects. At the same time, new last minute inducements were unveiled for fossil fuels, including one classifying coal as a critical mineral when it comes to a government manufacturing credit. "We're doing coal," Trump said in an interview released over the weekend on Fox News's "Sunday Morning Futures" where he also called solar energy projects "ugly as hell." The mix left fossil fuel advocates celebrating and clean energy advocates slamming the bill at a new higher volume. Tesla (TSLA) CEO Musk — who worked in the White House before his dramatic falling out with the president — was perhaps the loudest voice in the latter group. He issued a series of weekend posts calling the bill "utterly insane and destructive [with] handouts to industries of the past while severely damaging industries of the future." The energy changes came as top-line costs of the deal remained a key point of contention. A nonpartisan Congressional Budget Office tally released over the weekend showed the revised bill would add at least $3.3 trillion to the national debt. That assessment, which does not include additional interest costs, comes after a similar analysis of the House package found a $2.4 trillion tab. Trump suggested Republicans look past the deficit implications in one of his weekend posts, urging passage as soon as possible saying he also wants to cut costs but adding to lawmakers: "REMEMBER, you still have to get reelected." He also made a case that White House projections of blockbuster economic growth (dismissed by many economists as fantastical) will make the math add up in the end. The focus on energy comes after weeks of debate over Biden-era energy credits. The initial Senate blueprint had offered a slower rollback of clean energy credits for things like solar panels and electric vehicles but last minute changes to the bill put it more in line with the harder line House version which seeks to eliminate the credits sooner. Some provisions are even more immediate with the Senate version proposing to eliminate EV credits by September 30 of this year. And on top of that, a new tax was unveiled when the bill was released that would not just eliminate government help for renewable energy projects — but add a new cost for wind and solar projects completed after 2027 if a certain amount of supplies came from China. The changes stunned many clean energy advocates — not just Musk — with a statement from the American Clean Power Association saying the effect would be to "strand hundreds of billions of dollars in current investments." What that could means for consumers down the road — some concluded — are higher utility bills as currently under construction AI data centers are set to increase electricity demand in the years ahead. Some are even projecting double digit price increases in some utility bills by 2029. An analysis from the left-leaning Center for American Progress found that the bill would exacerbate existing upward pressure on utility prices, with Democratic Senator Brian Schatz adding "we are literally going to have not enough electricity because Trump is killing solar." Fossil fuels advocates meanwhile were largely ebullient at the last minute changes which saw existing fossil fuel focused provisions — around issues like permitting, lease sales, and methane emissions fees — joined by some new credits for these producers including for coal. Senate Republicans say the bill will generate over $15 billion in new federal revenue through expanded oil, gas, and coal leasing with leaders with Senator John Barasso of Wyoming saying "America is an energy superpower and once again, we are going to act like it." The bill is also set to be even more expensive after weeks of negotiations saw expensive compromises on issues like state and local tax (SALT) deductions, more generous business tax credits, and the adjustment of some cost savings around Medicaid. The fullest accounting came over the weekend when the CBO estimated the Senate bill would increase the debt by nearly $3.3 trillion from 2025 to 2034. The analysis also found that 11.8 million additional Americans would become uninsured by 2034 because of the health care provisions — an increase over the findings for the House-passed version that tallied that 10.9 million people would be without health coverage of that version passed. The bill is projected to be even more expensive after things like interest costs are included, with the Committee for a Responsible Federal Budget protecting the current total tally as in the neighborhood of $3.5 to $4.2 trillion over the next decade. "The debt impact could rise as high as $4.5 trillion if various rumored adjustments are made," the group added of potential additional changes still to come. The findings also come as Senate Republicans push forward on a budget gimmick that is set to hide $3.8 trillion in red ink using a "current policy baseline" that Democrats say violated Senate rules but appears set to proceed. Either way the sky-high debt findings could imperil the bill politically, with two GOP senators already likely to vote no and others not yet saying they will back Trump's effort to get this over the line in the coming hours. The bill will also need to be approved by the House if the amended package advances and is then considered by a bloc of fiscal conservatives there who say they barely voted in May for that less expensive version. One initial comment from the House Freedom Caucus was negative, with the group writing that the new tally was above "our agreed budget framework." Ben Werschkul is a Washington correspondent for Yahoo Finance. Click here for political news related to business and money policies that will shape tomorrow's stock prices Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
