The Congressional Budget Office has released a new analysis showing that President Trump’s tax-cut plan would raise federal deficits by $2.8 trillion over the next 10 years when economic feedback is included.
That figure is larger than an earlier estimate of $2.4 trillion and reflects an added $441 billion in interest payments on the national debt. The updated total accounts for changes in revenue and spending once projected economic effects are considered.
The measure approved by the House is expected to be revised in the Senate, where Republican lawmakers are discussing deeper cuts to Medicaid and the addition of work requirements as ways to offset some of the bill’s cost.
Democrats counter that the tax reductions will not pay for themselves, as some Republican proponents have suggested. In addition to increasing the deficit, the CBO analysis projects the bill would leave about 10.9 million more people uninsured over the coming decade. The report also indicates the distributional effects would be regressive: lower-income households would see average losses of roughly $1,600 per year, while wealthier households would gain an average of about $12,000 annually.
The analysis highlights trade-offs policymakers face between tax policy, federal borrowing costs and health-care coverage. As the legislation moves through the Senate, debates will likely focus on how to address rising deficits, the implications of proposed changes to Medicaid, and the distributional consequences for households across the income spectrum.