Trump tax bill would widen deficits by $2.8T after factoring in economic
impacts, CBO says
[June 18, 2025]
By FATIMA HUSSEIN and LISA MASCARO
WASHINGTON (AP) — President Donald Trump’s tax cuts package would
increase deficits by $2.8 trillion over the next decade after including
other economic effects, according to a fuller analysis of the
House-passed measure released Tuesday by the Congressional Budget
Office.
The report, produced by the nonpartisan CBO and the Joint Committee on
Taxation, factors in expected debt service costs and finds that the bill
would increase interest rates and boost interest payments on the
baseline projection of federal debt by $441 billion.
The analysis comes at a crucial moment as Trump is pushing the GOP-led
Congress to act on what he calls his “big, beautiful bill." It passed
the House last month on a party-line vote, and now faces revisions in
the Senate. Vice President JD Vance urged Senate Republicans during a
private lunch meeting Tuesday to send the final package to the
president's desk.
“We're excited to get this bill out,” said Senate Majority Leader John
Thune afterward.
Tuesday’s report uses dynamic analysis by estimating the budgetary
impact of the tax bill by considering how changes in the economy might
affect revenues and spending. This is in contrast to static scoring,
which presumes all other economic factors stay constant.
The CBO released its static scoring analysis earlier this month,
estimating that Trump’s bill would unleash trillions in tax cuts and
slash spending, but also increase deficits by $2.4 trillion over the
decade and leave some 10.9 million more people without health insurance.
Republicans have repeatedly argued that a more dynamic scoring model
would more accurately show how cutting taxes would spur economic growth
— essentially overcoming any lost revenue to the federal government.
But the larger deficit numbers in the new analysis gave Democrats, who
are unified against the big bill, fresh arguments for challenging the
GOP position that the tax cuts would essentially pay for themselves.
“The Republican claim that this bill does not add to the debt or deficit
is laughable, and the proof is in the numbers," said Sen. Jeff Merkley
of Oregon, the top Democrat on the Senate Budget Committee.
“The cost of these tax giveaways for billionaires, even when considering
economic growth, will add even more to the debt than we previously
expected,” he said.
Marc Goldwein, senior vice president and senior policy director for the
Committee for a Responsible Federal Budget, said Tuesday on social media
that considering the new dynamic analysis, “It’s not only not paying for
all of itself, it’s not paying for any of itself.”
Treasury Secretary Scott Bessent and other Republicans have sought to
discredit the CBO, saying the organization isn’t giving enough credit to
the economic growth the bill will create.
At the Capitol, Mehmet Oz, who heads up the Centers for Medicaid and
Medicare Services and joined Vance at the GOP Senate lunch, challenged
CBO's findings when asked about its estimate that the bill would leave
10.9 million more people without health care, largely from new work
requirements.
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The U.S. Capitol in Washington, Aug. 3, 2020. (AP Photo/J. Scott
Applewhite, File)
“What will an American do if they’re given the option of trying to
get a job or an education or volunteering their community — having
some engagement — or losing their Medicaid insurance coverage?” Oz
asked. “I have more confidence in the American people than has been
given to them by some of these analyzing organizations.”
Republicans on the Senate Finance Committee unveiled their proposal
Monday for deeper Medicaid cuts, including new work requirements for
parents of teens, as a way to offset the costs of making Trump’s tax
breaks more permanent in their draft for the big bill.
The Senate's version of the package also enhances Trump’s proposed
new tax break for seniors, with a bigger $6,000 deduction for low-
to moderate-income senior households earning no more than $75,000 a
year for singles, $150,000 for couples.
The proposals from Senate Republicans keep in place the current
$10,000 deduction of state and local taxes, called SALT, drawing
quick blowback from GOP lawmakers from New York and other high-tax
states, who fought for a $40,000 cap in the House-passed bill.
Senators insisted negotiations continue.
Bessent said Tuesday that the Senate Republican proposal for the tax
cuts bill “will deliver the permanence and certainty both individual
taxpayers and businesses alike are looking for, driving growth and
unleashing the American economy.”
“We look forward to continuing to work with the Senate and the House
to further refine this bill and get it to President Trump’s desk,”
he said in a news release.
While the House-passed bill exempted parents with dependents from
the new Medicaid work requirements, the Senate’s version broadened
the requirement to include parents of children older than 14, as
part of their effort to combat waste in the program and push
personal responsibility.
The work requirements “demonstrate that you are trying your hardest
to help this country be greater,” Oz said. “By doing that, you earn
the right to be on Medicaid.”
The CBO separately released another analysis on the tax bill last
week, including a look at how the measure would affect households
based on income distribution. It estimates the bill would cost the
poorest Americans roughly $1,600 a year while increasing the income
of the wealthiest households by an average of $12,000 annually.
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