The nonpartisan U.S. Congressional Budget Office projected on Tuesday that President Donald Trump's sweeping tax-cut and spending bill would lead to a $2.8 trillion deficit increase over a decade, despite an increase in economic output.
The budget watchdog issued its dynamic analysis of the legislation that passed the House of Representatives in May, as Senate Republicans considered a revised version of the measure.
The legislation's tax provisions would boost real gross domestic product by an average 0.5% over the next decade, leading to an $85 billion reduction in the U.S. deficit, the CBO said. But the bill would also lead to higher interest rates, which would boost interest payments on the federal debt by $441 billion, the agency said.
Two weeks ago, the CBO projected that Trump's One Big Beautiful Bill Act would add another $2.4 trillion to the federal government's $36.2 trillion debt over a decade, without considering the potential economic effects. With interest payments from the new debt included, the cost would rise to $3 trillion.
Independent analysts have estimated that the debt increase could reach $5 trillion over a decade under the Senate version, which makes permanent a number of business tax breaks that would sunset under the House bill.
The different House and Senate versions of the bill in the narrowly Republican-controlled Congress could complicate party leaders' goal of passing the bill, which is the centerpiece of Trump's domestic agenda, before a self-imposed July 4 deadline.
The Senate changes have run into early resistance from two separate Republican camps: those who want deeper spending cuts to attack the growing federal deficit and others looking to preserve social-safety nets including the Medicaid healthcare program for lower-income Americans.
