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Donald Trump’s landmark tax bill will add $2.4tn to the US debt by 2034, the congressional fiscal watchdog has warned, in the latest blow to the president as he urges the Senate to back the legislation.
The Congressional Budget Office said on Wednesday that what the US president has dubbed the “big beautiful bill” would drive up budget deficits over the coming decade, despite the administration’s insistence it would slash them.
The non-partisan estimate comes a day after billionaire Trump backer Elon Musk attacked the bill as a “disgusting abomination”, arguing that it would undo much of the cost-cutting work of his so-called Department of Government Efficiency.
The figures will fuel a fight on Capitol Hill where Trump has sought to cajole fiscal hawks into supporting the bill after some expressed concerns over its potential impact on the country’s already bulging debt pile.
The Treasury bond market has grown from roughly $5tn in 2008 to $29tn today as the US has cut taxes while increasing spending. JPMorgan Chase chief executive Jamie Dimon warned last week that the bond market would “crack” if the country did not get on a more sustainable track.
After meeting Trump at the White House on Wednesday afternoon, John Thune, the Republican Senate majority leader, tried to stay upbeat about the legislation, despite new attacks from Musk who called on lawmakers to “kill the bill”.
“The wheels are in motion on this,” Thune said, shrugging off Musk’s public rebukes. “Failure is not an option. We will get this done one way or other. It’s not going to be easy, it’s complicated.”
The new legislation would extend tax cuts introduced by the president in 2017 while cutting social programmes, including Medicaid, which provides healthcare to low-income and disabled Americans. It would also raise the debt ceiling, or limit on government borrowing, by $5tn.
The CBO said on Wednesday that the bill would reduce tax revenues by $3.75tn over the coming decade, even as it cuts spending by $1.3tn. The number of people without health insurance would rise by 10.9mn.
The bill narrowly passed the Republican-controlled House of Representatives last month but now faces an uphill battle in the Senate. Trump wants to sign the bill into law by July 4.
The president’s Republican party controls the Senate by a 53-47 margin, meaning it can only afford to lose the support of three senators if the bill is to pass the upper chamber of Congress by a simple majority, given all Democratic senators are expected to vote against it.
The Trump administration has insisted that the legislation will trigger an increase in economic growth and says revenues from Trump’s tariffs had not been reflected in estimates of its fiscal impact.
The CBO report did not account for the macroeconomic effects of the legislation, but the watchdog said separately that it estimated the tariffs — as they stood in mid-May — could shrink the country’s debt by $2.8tn over the coming decade.
But it cautioned that the duties would drive up inflation by an average 0.4 per cent this year and next, while reducing real GDP growth by 0.6 per cent by 2035 as trading partners hit back. It said these estimates were subject to “significant uncertainty” as tariff policy could change.
Ahead of CBO’s assessment of the bill, White House press secretary Karoline Leavitt said the watchdog “has been historically wrong” and accused it of bias against Republicans.
“Unfortunately, this is an institution in our country that has become partisan and political, and we are very confident in our own economic analyses of this bill. There is $1.6tn in savings,” Leavitt said.
Democrats used the CBO’s report to slam the legislation. “This bill has gone from bad to worse,” said Ron Wyden, the top Democrat on the Senate finance committee.
“If Senate Republicans truly think this bill is the right direction for America, they owe it to Americans to defend it in public instead of ramming it through under the cover of darkness before they even know what it will do to their constituents,” he said.
