Summary
- Trump's July 4 megabill will add $3.4 trillion to the federal deficit over 10 years according to Congress’ nonpartisan scorekeeper.
- The bill cuts over $1 trillion in federal health spending, mostly from Medicaid.
- It causes an estimated 10 million people to lose health insurance by 2034.
- Most deficit increase results from permanently extending 2017 Trump tax cuts costing $4.5 trillion.
- A Senate GOP accounting method shows the deficit increase could be $366 billion instead.
According to the Congress Budget Office, the megabill that Trump signed on July 4 would result in 10 million Americans losing health insurance and a $3.4 trillion increase in the government debt over the next ten years. CBO estimates that the expenditures of the recently passed law will greatly exceed the savings, even while it would save more than $1 trillion by reducing federal spending on health care, the majority of which would come from Medicaid.
The GOP's permanent extension of Trump's 2017 tax cuts accounts for the majority of the package's negative effects. According to the research, the Senate Finance Committee, which is in charge of tax policy, passed measures that would result in a $4.5 trillion drop in the federal government's incoming tax revenue.
Republicans' tax cuts added during the package's Senate floor discussion are included in that total.
The increased number of uninsured people is less than the 11.8 million that the CBO had previously estimated. The elimination of a provision in the final version of the megabill that would have resulted in an estimated 1.4 million undocumented immigrants losing coverage is probably the reason for the cut, though the agency stated that it will provide more information on the differences in the upcoming weeks.
Why does the GOP megabill have a projected $3.4 trillion deficit impact?
The bill extends the Trump-era tax cuts from 2017, many of which were set to expire, at an estimated cost of around $4.5 trillion over ten years. These cuts significantly reduce federal revenue, especially benefiting top earners.
While the legislation includes spending cuts totaling about $1.4 to $1.7 trillion, primarily from reductions in Medicaid, food assistance, and other social safety net programs, these cuts are not enough to offset the revenue losses from tax reductions.
Additionally, the bill allocates new spending of approximately $300 to $450 billion over the next decade, particularly on defense, immigration enforcement, and other discretionary areas, further increasing expenditures.