The Congressional Budget Office said Monday that the tax cut and policy bill signed into law by President Donald Trump earlier this month will increase the budget deficit by $3.4 trillion over 10 years relative to the budgetary baseline established in January, before the bill passed.
The deficit results from a decrease in revenues totaling $4.5 trillion over a decade, partially offset by a decrease in spending of $1.1 trillion, CBO said in its final cost estimate.
The analysis also estimated that about 10 million more people will lack health insurance by 2034 as a result of the legislation, which imposes new work requirements on Medicaid beneficiaries.
Not popular: Although Republicans say the tax cut-laden legislation was designed to help ordinary Americans — “This is a bill that was written for hardworking Americans, middle- and lower-class earners in particular,” said House Speaker Mike Johnson — polls indicate that it lacks broad support, in part because it will generate so much extra debt.
A CNN poll released last week found that 61% of respondents opposed the legislation, with just 39% supporting it. More (51%) expect the legislation to hurt the economy than help it (29%), with 20% saying it won’t make much difference. And a larger proportion (39%) expect it to make their families worse off rather than better off (16%), though about half think it will have no effect or they’re unsure.
According to the CNN poll, the top reason for opposing the legislation is the amount it adds to the federal budget deficit, with 58% of respondents choosing that option. Other reasons include its elimination of clean energy supports (51%) and the tightening of requirements for social safety net programs (49%).
Other polls have recorded similar overall results, including a Fox News poll conducted shortly before the bill passed that found that 59% of registered voters opposed it and 38% supported it. In an AP-NORC poll released last week, 64% of respondents said they think the tax and spending law will help wealthy people most of all, and 61% said it will harm low-income people.
Critics pounce: The CBO score gave critics an opportunity to rebroadcast their complaints about the new law. Rep. Brendan F. Boyle of Pennsylvania, the top Democrat on the House Budget Committee, said the analysis confirms that the Republican legislation will add trillions to the deficit in order to give tax cuts to the rich. “It’s one of the most expensive bills ever passed,” he said in a statement. “It’s also one of the cruelest. More than 15 million Americans will lose their health care because of the law’s assault on Medicaid and Republican plans to dismantle the ACA.”
Boyle noted that the cost of the bill rises to $4 trillion when the cost of debt service is included, and that an earlier CBO analysis found that about 5.1 million people would lose the health coverage they receive under the Affordable Care Act as a result of expiring tax credits, bringing the total of those losing their health insurance to about 15 million “as a direct result of these Republican policies.”
The budget hawks at the Committee for a Responsible Federal Budget also reiterated their criticism of the legislation. “It’s still hard to believe that policymakers just added $4 trillion to the debt,” CRFB President Maya MacGuineas said in a statement. “Many supporters of this law have spent months or years appropriately fuming about our unsustainable fiscal situation. But when they actually had an opportunity to fix it, they instead made it $4 trillion worse.”
MacGuineas added that while the legislation may provide a short-term “sugar high” for the economy, economists across the political spectrum estimate that the benefits will be modest, and perhaps negative — and no independent analysis finds that the tax cuts and other policy changes will reduce the deficit.