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.
“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.
This story was originally featured on Fortune.com
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