CBO: Trump Tax Law to Add $3.4T to Deficits, Leave 10M Uninsured/ Newslooks/ WASHINGTON/ J. Mansour/ Morning Edition/ The Congressional Budget Office projects President Donald Trump’s new tax and spending law will add $3.4 trillion to the federal deficit by 2034. Additionally, more than 10 million Americans are expected to lose health coverage under the law. While Republicans tout the legislation as vital economic relief, Democrats argue it favors the wealthy and guts essential services.
Trump Tax Cuts Impact Quick Looks
- $3.4 trillion in added federal deficits through 2034.
- 10 million Americans projected to be uninsured by 2034.
- Medicaid and food assistance cuts part of the cost-saving strategy.
- CBO projection based on final version of GOP tax bill.
- New tax deductions include tips, overtime, and U.S.-made auto loans.
- Democrats decry bill as a “betrayal” of working Americans.
- Economic growth claims disputed by independent analysts.
- $50 billion rural hospital fund added to secure GOP votes.
Deep Look: CBO Says Trump’s Tax Law Deepens Deficits and Cuts Coverage
President Donald Trump’s sweeping tax and spending legislation, signed on July 4, is projected to increase U.S. deficits by $3.4 trillion over the next decade and leave more than 10 million Americans uninsured, according to a new report released by the nonpartisan Congressional Budget Office (CBO).
The updated CBO forecast, reflecting last-minute changes to the legislation, paints a challenging fiscal future that Democrats say confirms their worst fears — and that Republicans defend as necessary to prevent a tax hike and stimulate growth.
The law extends expiring individual tax rates, and introduces new deductions for tips, overtime, and auto loan interest on U.S.-assembled vehicles. But the law also slashes Medicaid and food assistance funding, and accelerates the phase-out of clean energy tax credits, drawing sharp criticism from progressive lawmakers.
Health Impacts: Millions to Lose Coverage
The CBO estimates that 10 million people will be uninsured in 2034 as a result of changes in the law, including the introduction of work requirements for Medicaid in states that expanded under the Affordable Care Act. This is a slightly improved figure from previous estimates that projected 11.8 million people would lose coverage.
Though the bill includes a $50 billion rural hospital fund, critics say it does little to address the broader healthcare gap it creates.
Republican Defense: Growth Over Projections
Trump and Republican leaders argue that continued economic growth will outpace the CBO’s projections, ultimately reducing the long-term impact on deficits.
“The most important thing is preventing middle-class Americans from seeing their taxes rise next year,” said a White House official.
House Speaker Mike Johnson and Rep. Steve Scalise, both present at the signing, emphasized that the tax breaks are designed to boost domestic consumer spending and reward work — particularly through tip and overtime deductions.
But analysts across the ideological spectrum disagree.
Expert Response: Short-Term Stimulus, Long-Term Drag
Maya MacGuineas, president of the Committee for a Responsible Federal Budget, stated plainly:
“Not one serious estimate claims this bill will improve our fiscal situation.” She warned of a “sugar high” economic boost in the short term, quickly outweighed by rising debt and interest obligations.
Even with some cost savings — about $1 trillion from health-related provisions, according to the CBO — the scale of the tax cuts and corresponding revenue loss dwarfs any offsetting measures.
Democrats Push Back
Senate Majority Leader Chuck Schumer denounced the bill, calling it a “big, ugly betrayal” that enriches the wealthy while undermining programs for the vulnerable.
A recent AP-NORC poll suggests the public agrees: Two-thirds of U.S. adults believe the tax law favors the rich. Democratic messaging has zeroed in on this public perception as they gear up for November’s congressional races.
“The facts are clear,” said Schumer. “This is a reckless, one-sided law that will burden our economy and hurt millions.”
Political Fallout Ahead
Although the bill has been signed into law, its long-term implications are just beginning to take shape. As budget negotiations continue and 2026 election campaigns ramp up, the tax law’s effects on healthcare, economic equity, and deficit spending will likely dominate headlines and debates.
One of the last-minute additions — a $50 billion rural hospital fund — was added to gain support from hesitant GOP lawmakers in rural states. But even that may not be enough to offset the public pushback over rising deficits and healthcare losses.
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