By Richard Cowan
WASHINGTON (Reuters) -The nonpartisan Congressional Budget Office on Wednesday lowered its estimate of how much President Donald Trump’s tax-cut and spending bill will add to the national debt, saying it would add about $2.4 trillion to the $36.2 trillion pile.
Its assessment comes a day after key Trump ally Elon Musk blasted the bill as a “disgusting abomination,” giving fresh support to Republican deficit hawks who have been pushing back against the measure.
An earlier CBO estimate predicted the Republican bill, which passed on May 22 with no Democratic support, would add around $3.8 trillion to Washington’s debt over the next decade.
The House-passed bill would reduce the federal government’s revenues by $3.67 trillion over a decade, the CBO forecasted, while reducing spending by $1.25 trillion.
The number of people in the United States without health insurance would increase by 10.9 million by 2034 due to policy changes in the House bill, the CBO said. Of that number, an estimated 1.4 million people would be undocumented immigrants who no longer would be covered in programs funded by the states.
The CBO update does not include a forecast on the potential macroeconomic effects of the legislation, which will be forthcoming. Republicans argue that extending existing tax cuts and adding new breaks, which are included in the House bill, would further stimulate the economy.
They made similar arguments in 2017 that the tax cuts would pay for themselves by stimulating economic growth, but the CBO estimates the changes increased the federal deficit by just under $1.9 trillion over a decade, even when including positive economic effects.
The 1,100-page bill would extend corporate and individual tax cuts passed in 2017 during Trump’s first term in office, cancel many green-energy incentives passed by Democratic former President Joe Biden and tighten eligibility for health and food programs for the poor. It also would fund Trump’s crackdown on immigration, adding tens of thousands of border guards and creating the capacity to deport up to 1 million people each year. Regulations on firearm silencers would be loosened.
Democrats blast the bill as disproportionately benefiting the wealthy while cutting benefits for working Americans. The measure is now awaiting action in the Senate.
The new CBO estimate takes into account late changes that were made to the bill as Republican leaders steered it to passage.
PLAYING DOWN MUSK
The White House and top congressional Republicans tried to play down the objections of Musk, who joined Trump’s team with brash promises of cutting $2 trillion in spending from the federal budget, but left last week having accomplished a small fraction of that.
Republican Senate Majority Leader John Thune, speaking to reporters, tried to minimize the damage, saying, “We obviously respect everything that Elon did with DOGE. On this particular issue, we have a difference of opinion.”
The updated analysis is expected to help guide the Republican-controlled Senate, which is now grappling with putting together its own version of the legislation in coming weeks.
With Republicans holding a narrow 53-47 Senate majority, warring camps within the party are vying for changes to the House-passed bill. Some have been pushing to scale back the more than $700 billion in savings to Medicaid or to remove costly Trump-backed tax cuts for those earning overtime pay and tipped wages or income from Social Security retirement payments.
(Reporting by Richard Cowan and Bo Erickson; Editing by Scott Malone and Alistair Bell)
