PThe “large and beautiful” tax bill and expenditure of the resident of Donald Trump could have a high, ugly cost, warn economists.
Non -partisan research groups studying the proposal estimated that it would add more than 2.5 billions of dollars to federal debt – obviously at a summit of $ 36.8 billions of dollars – during the next decade.
Despite these projections, the White House press secretary Karoline Leavitt insisted on the fact that the bill would save the federal government $ 1.6 Billion of dollars: “This bill does not add to the deficit,” she told journalists. “This is the greatest economy for any legislation that has ever adopted Capitol Hill in the history of our country.”
The White House and the Management and Budget Office did not respond to a request for comments on how this figure of $ 1.6 Billion was calculated.
Tax surveillance dogs have strongly disputed these complaints, citing abrupt tax cuts in the bill – estimated at 3.8 billions of dollars and relatively modest spending reductions. The non -supporter committee for a responsible federal budget estimates that the House bill in its current form will increase the debt by 3.3 billions of dollars until 2034 and increase the annual deficits to 2.9 billions to 3.3 billions of dollars.
The deficits are raised in the minds of a handful of republican budgetary hawks at the congress whose distrust of the bill could condemn it. Trump’s tax discounts in 2017 are expected to expire at the end of the year, and simply extend them would cost $ 4.6 billions over a decade, according to the Congressional Budget Office. The republican bill also reduces taxes on advice and overtime, and increases spending on military and border security. The Republicans plan to compensate for these expenses in part by Medicaid cuts, food coupons and federal subsidies for clean energy projects.
Republican leaders have struggled to find the right balance between reducing the price of the bill without losing the support of moderates who are too wary of widely used safety lead programs. Trump is expected to attend the meeting of the Conference of Républicains de la Chambre at the Capitol on Tuesday to consolidate the support of the bill.
Bill economy measures include work requirements for Medicaid beneficiaries, reduction in nutrition aid and closer eligibility for undocumented migrants to access federal advantages. Critics argue that these reductions have an impact in a disproportionate manner to low -income Americans. “The structure of this bill is such that low -income and intermediate income households have the weight, while the rich are taking advantage of it,” said Daniel Hornung, former deputy director of the National Economic Council under President Joe Biden, in Time.
He adds that “there is really no way to see this where the deficits are lower because of this bill”.
The debate on the final cost of the measure revealed rifts within the Republican Party. The tax conservatives argue that reductions in the bill’s expenses are too modest and that the promised savings are illusory. “We can and must do better before passing the final product,” said the Texas representative, Chip Roy on social networks late Sunday, after the Chamber’s Budget Committee narrowly advanced the bill during a vote of 17-16 – with four Hawks of deficit voting “present” so that the measure can move forward. Five republican tax hawks of the Committee joined all the Democrats to vote against the bill last Friday.
Chamber Mike Johnson and his management team spent the weekend in frantic negotiations before passing the Budget Committee bill on Sunday. The bill could reach the soil of the House this week, while Johnson is committed to voting the bill before the Memorial Day. After that, he would go to the Senate, where the Republicans would have their own concerns and, as in the House, the Republicans will need the support of almost all their caucus.
“The only big bill will almost certainly add to our deficits and our debts,” republican senator Ron Johnsin wrote in a recent Wall Street Newspaper OP-ED. “I cannot imagine that they want the Republicans to increase annual deficits. This is why I cannot support this bill because it is currently discussed and I doubt that it will adopt the Senate.”
Economists warn that the impact of the deficit bill could be even more serious than current projections, since the bill puts the end of certain tax cuts to maintain the lower cost. Congress has a long history of finally extending temporary tax reductions beyond their expiration dates. The Committee for a responsible federal budget estimated that the extension of the bill’s tax reductions for a full decade could push the total increase in the deficit up to 5.3 billions of dollars.
Budget hawks at Congress are not the only ones concern for deficits. Moody’s notes have recently downgraded the United States AAA note, citing doubts about the country’s ability to maintain budgetary discipline. The adoption of the bill could put pressure on American bond yields, which have already exceeded 5%, signaling an increasing anxiety of investors in the face of American debt.
The Republicans of the Chamber insisted that the bill will stimulate economic growth, which, according to them, will generate enough income to compensate for the increase in debt. Jason Smith, chairman of the tax and means committee of the tax entry chamber, said the economy “would make gangsbusters” as part of Trump’s tax and regulatory day.
