Impact of GOP Budget Bill on U.S. Debt: A $3.8 Trillion Concern

The recent passage of the Republican budget bill vote, passed under cover of a late night vote, has raised significant concerns about the future of U.S. debt levels, with several analyses suggesting a troubling trajectory. Over the next decade, this GOP bill could potentially cost the nation a staggering $3.8 trillion, as highlighted in a report earlier this month by the Joint Committee on Taxation. This report meticulously examined the implications of the proposed tax measures in comparison to spending cuts.

Wall Street is already feeling the tremors of these risks. On Friday, Moody’s Ratings downgraded the nation’s debt, citing the likelihood that the new bill could add an alarming $4 trillion to the federal primary deficit—excluding interest payments—over the next ten years. Economists and policy experts alike warn that this surge in debt could ultimately constrain federal spending, as the U.S. would likely face escalating interest payments. Such a scenario could jeopardize funding for essential programs like Social Security, which is already under strain as baby boomers reach retirement age. Additionally, it could hinder investments in critical infrastructure initiatives that are vital for stimulating economic growth.

While the bill does propose some spending cuts, recent analyses indicate that these reductions are insufficient to counterbalance the extensive tax breaks. The nonpartisan Bipartisan Policy Center estimated in a May 14 analysis that the tax cuts would amount to a staggering $7.7 trillion over the next decade, while the proposed spending cuts would only offset $3.9 trillion during the same period. This results in a significant shortfall of $3.8 trillion—an arithmetic reality that prompted Moody’s to downgrade its rating on U.S. debt from the highest tier of Aaa to Aa1.

Moreover, the implications of the proposed GOP bill raise significant concerns for the lowest-income Americans. According to a May 19 analysis from the Penn Wharton Budget Model, a research group at the University of Pennsylvania that evaluates the fiscal impact of public policies, the bottom 20% of earners—despite potential savings from tax cuts—will face a $1,035 reduction in 2026 when the cuts to Medicaid and other programs are taken into account, affecting middle class earners.

Just remember, Trump has sent a wave of bankruptcy crashing through several of his businesses, and now, against all odds, MAGA has handed over the country’s checkbook to him. God help us all!