Key Points – President Trump’s “Big, Beautiful Bill,” aimed at extending tax cuts and implementing new spending priorities, is projected to significantly increase the US national debt by trillions over the next decade, according to analyses from the Congressional Budget Office and the Joint Committee on Taxation.
-This prospect is reportedly causing concern among bond investors.
-House Republicans, holding a slim majority, are struggling to unify around a final version, with ongoing internal disagreements over issues like the SALT cap deduction and the depth of spending cuts.
-Recent negotiations reportedly “went south overnight,” making passage by Speaker Johnson’s Memorial Day target increasingly challenging.
The Big, Beautiful Bill Has a Giant Problem: It Will Increase America’s Debt Dramtically
Republicans in Congress are still negotiating over what Donald Trump calls the “Big Beautiful Bill,” consisting of tax cuts, spending cuts, and possibly such Trump campaign promises as “no tax on tips,” as well as Social Security benefits.
The final form of the bill is still being negotiated, as one report stated that negotiations “went south” overnight, and the bill is unlikely to pass on Wednesday.
But one thing we do know now is that the bill, if passed, is likely to increase the national debt.
Per The Hill, the Congressional Budget Office has determined that the tax provisions of the bill, referred to as the One Big Beautiful Bill Act, would “ slash federal revenues by roughly 10 percent of the current national debt over the next 10 years.”
The Joint Committee on Taxation, meanwhile, projected that the bill will add trillions to the national debt.
“If the bill moves forward without significant changes, the U.S. would likely find its debt levels spiraling higher in order to finance the tax cuts, according to several analyses,” CBS News reported his week, citing the Joint Committee report. “Over the next decade, the GOP bill could cost the U.S. $3.8 trillion, according to a report earlier this month by the Joint Committee on Taxation that examined the impact of the tax measures versus spending cuts.”
Per the New York Times, there’s also a lot of worry among bond investors.
“Tax cuts pushed by the Trump administration are amplifying debt and deficit concerns among bond investors, a powerful group of market players who strongly influence how much it costs for the government to finance its budget,” the Times said. “The buying and selling of government debt, known as Treasuries, also influences interest rates on a wide variety of debt extended to American households and businesses, including mortgages, credit cards and car loans.”
Where the Bill Stands
Trump wants to extend his tax cuts from his first term in 2017 that are due for expiration, while also delivering on a long list of campaign promises.
However, the GOP has had trouble coming up with a version of the bill that can grab a majority in the House, while meeting the demands of their caucus, which has few votes to spare. Some House Republicans are demanding a high cap for the SALT (state and local tax) deduction that was introduced in the 2017 law, while others want steeper spending cuts. And even if a version passes the House, it would still have to get through the Senate, which is said to have different priorities.
The latest, per Politico on Wednesday morning, is that a deal has been reached on the SALT issue, but that conservative hard-liners object to that deal, and have launched a late revolt.
“I think actually we’re further away from a deal because that SALT cap increase, I think, upset a lot of conservatives,” Rep. Andy Harris of the Freedom Caucus said in a Wednesday interview. “The conservatives are pushing for some balancing spending reductions.”
“This bill actually got worse overnight,” Harris said in the Newsmax interview, as reported by Politico. “There is no way it passes today. … We may need a couple of weeks to iron everything out.”
House Speaker Mike Johnson has wanted to get the bill passed through the House by Memorial Day, but that’s looking like a big challenge at this point.
Do Deficits Matter?
No matter what form it takes, any Trump reconciliation bill is likely to increase the deficit and debt significantly. And there’s little indication that Trump cares much.
The need to cut the deficit and national debt has never been a particularly prominent part of Trump’s pitch, although some Republicans in Congress feel differently. Not even DOGE was pitched in the language of reducing the deficit, nor did it succeed in doing so.
Trump talks a great deal about trade deficits — although he exhibits not much understanding of how those work, either — but less about budget deficits.
About the Author:
Stephen Silver is an award-winning journalist, essayist and film critic, and contributor to the Philadelphia Inquirer, the Jewish Telegraphic Agency, Broad Street Review and Splice Today. The co-founder of the Philadelphia Film Critics Circle, Stephen lives in suburban Philadelphia with his wife and two sons. For over a decade, Stephen has authored thousands of articles that focus on politics, technology, and the economy. Follow him on X (formerly Twitter) at @StephenSilver, and subscribe to his Substack newsletter.
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