The Congressional Budget Office (CBO) projects that the “big, beautiful bill” recently signed by President Donald Trump will increase the federal deficit by $3.4 trillion over the next decade. In a report released Monday, the nonpartisan agency estimated the law’s provisions would impact the federal budget from 2025 through 2034, largely due to sweeping tax cuts and reduced funding for social programs.
The bulk of the deficit increase stems from tax provisions, which the CBO says will reduce government revenue by over $4 trillion. The legislation extends the 2017 Trump-era tax cuts, including lowering the corporate tax rate to 21% and cutting most individual income tax rates. It also raises the state and local tax deduction cap to $40,000, a key demand from blue-state Republicans.
The bill enacts major changes to Medicaid, food assistance programs, student loan repayment, and the Consumer Financial Protection Bureau. CBO estimates 10 million more people could be uninsured by 2034 due to Medicaid reductions.
Despite $150 billion in new defense spending and $160 billion for border enforcement, budget experts say the plan worsens fiscal challenges. “They instead made it $4 trillion worse,” said Maya MacGuineas of the Committee for a Responsible Federal Budget.
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