How the Republican Bill will Add $2.3 Trillion to the Deficit

The Republican House bill’s potential impact on the national deficit is drawing scrutiny, with final cost estimates from the Congressional Budget Office (CBO) pending. Preliminary projections suggest the bill could increase the deficit by approximately $2.3 trillion. The Committee for a Responsible Federal Budget, a non-profit organization, estimates a higher figure, exceeding $3 trillion.

While budget-conscious lawmakers successfully pushed for over $1.5 trillion in spending reductions across agriculture, education, and energy and commerce programs, these cuts come at a cost. According to the CBO, these changes would likely result in roughly 3 million people losing food stamp benefits and 9 million individuals losing health insurance coverage.

The tax cuts, disproportionately benefiting high-income earners, are projected to total $3.8 trillion over the next nine years and are likely to surpass $4 trillion over the next decade. This disparity raises concerns about the bill’s overall fiscal impact and its distributional effects.

Beyond the bill’s direct financial implications, potential trade policies proposed by President Trump add another layer of economic uncertainty. He has suggested a 50% tariff on the European Union as trade negotiations continue and a 25% tariff on Apple if the company does not relocate iPhone production to the United States. These potential tariffs could have significant repercussions for international trade and the U.S. economy.

Taking into account both the Republican budget bill and Trump Tariffs by the end of the year could force the US economy into a rescission.