A fresh analysis by the Congressional Budget Office concludes that Republicans’ sweeping tax-cut and safety-net reduction bill would swell federal deficits by nearly $3.4 trillion once higher borrowing costs are included. Minor growth benefits, the C.B.O. says, would not come close to offsetting the legislation’s price tag.
Extends and expands a slate of Trump-era tax breaks set to expire.
Pays for only a slice of the revenue loss with deep cuts to Medicaid, SNAP and other anti-poverty programs.
Analysts estimate the measure would boost annual GDP growth by just 0.09 percentage point in the early years, thanks to lower taxes nudging households and firms to spend more. Yet the added activity would still leave $2.8 trillion in red ink over nine years—and $3.4 trillion once interest payments are counted.
With deficits climbing, investors would likely demand higher yields. The C.B.O. projects a 14-basis-point jump in 10-year Treasury rates, a benchmark that shapes mortgage and consumer-loan costs. Public debt would reach 124 percent of GDP by 2035, well above levels economists view as sustainable.
Republicans argue tax relief will pay for itself, citing White House estimates of a 5 percent output surge. Independent economists—along with the C.B.O. and Congress’s Joint Committee on Taxation—say the math doesn’t work. Most gains, they note, flow to corporations and the wealthy, not lower-income households.
The House measure passed last month, but senators are already crafting significant changes—potentially locking in permanent corporate breaks that the House left temporary. Any compromise will need fresh scoring, setting up another round of fiscal scrutiny.
Even with steeper program cuts, Congress’s scorekeepers say the GOP package would balloon the debt, nudge rates higher and offer only marginal economic upside—casting doubt on claims that it would “pay for itself” or lighten America’s fiscal burden.
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