Trump’s Tax Plan Faces GOP, Investor Skepticism Over National Debt/ Newslooks/ WASHINGTON/ J. Mansour/ Morning Edition/ President Donald Trump’s sweeping tax and tariff plans are facing strong skepticism from Republican senators, investors, and economists. Critics say the proposals would significantly deepen the national debt while relying on overly optimistic growth forecasts. Even allies like Elon Musk are voicing concern, warning the bill undermines previous fiscal responsibility efforts.
Trump’s Economic Plan Quick Looks
- Massive tax cuts could add over $5 trillion to the national debt
- Elon Musk and GOP senators voice alarm over deficit impact
- Trump relies on tariffs and growth forecasts to offset spending
- Economists call the assumptions unrealistic and risky
- Senate GOP support faltering amid budget hawk pushback
Trump’s Tax Plan Faces GOP, Investor Skepticism Over National Debt
Deep Look
Trump’s Tax Pitch Meets Fiscal Headwinds
President Trump is pushing a multitrillion-dollar tax cut and tariff plan he says will supercharge growth and reduce the national debt — but many in Washington, on Wall Street, and within his own party aren’t buying it. Skepticism is mounting over whether the president can deliver economic expansion large enough to justify the cost.
The proposal includes sweeping tax breaks set to expire to artificially lower their cost on paper, a tactic also used in the 2017 tax cuts. If made permanent, as Trump suggests, the cost would soar to more than $5 trillion over the next decade.
Investors and Economists Flash Warning Signs
Economists warn that rising deficits would push interest rates even higher, making it more expensive to borrow for homes, education, and business investments. As it stands, the federal debt has surpassed $36 trillion, with Treasury yields hovering near 4.5% — nearly double the rates at the time of Trump’s last major tax bill.
Most analysts doubt the administration’s forecasts of 3.2% annual GDP growth and millions of new jobs, which Trump officials insist will balance the budget. Outside experts say that’s unlikely, and even many Republicans privately admit it.
GOP Senators Break Ranks
Republican Senators Rand Paul and Ron Johnson have both spoken out against the plan. Paul warned on national television that at least four GOP senators are prepared to block the bill unless it’s revised to rein in deficits — enough to potentially stall it in the narrowly divided Senate.
“The GOP will own the debt once they vote for this,” Paul warned. His comments reflect a broader anxiety among fiscal conservatives who believe the plan is fiscally reckless.
Elon Musk Joins the Critics
Tech billionaire Elon Musk, once a close Trump ally and a former leader of the government’s efficiency task force, criticized the proposal, calling it a “massive spending bill” that undercuts deficit control. His departure from the fold signals broader unease among high-profile business leaders who had once backed Trump’s economic agenda.
White House Attacks Critics, Doubles Down on Growth
Despite mounting opposition, the White House remains defiant. Press secretary Karoline Leavitt dismissed the Congressional Budget Office’s scoring as “shoddy” and blamed inaccurate economic modeling for the deficit projections. Administration officials claim the combination of tax cuts and deregulation will unleash a new wave of economic expansion.
Stephen Miran, chair of the White House Council of Economic Advisers, defended the plan, stating it would increase productivity, create jobs, and ultimately shrink the deficit relative to GDP.
Tariff Revenue: Risk or Relief?
Another central pillar of Trump’s plan is a controversial expansion of tariffs. The administration claims tariffs on imports will raise enough revenue to offset the tax cuts and even begin paying down the debt. But recent court rulings have blocked some of Trump’s emergency tariff powers, and legal uncertainties remain.
Even if fully implemented, experts doubt tariff income could match the scale of the tax cuts. Higher import taxes also risk triggering retaliatory tariffs and increasing consumer prices, potentially dampening economic growth.
Political Stakes High as Senate Fight Looms
With a three-seat Republican majority in the Senate, just a few defectors could derail the legislation. Trump has been lobbying hard to keep the GOP unified, but public and private resistance is growing.
House Speaker Mike Johnson echoed Trump’s talking points, attacking the CBO’s credibility and insisting that growth would pay for the cuts. But some senators remain unconvinced, worried that voters will hold them responsible for ballooning the debt.
Long-Term Outlook: More Growth or More Debt?
The Trump administration insists the bill is a long-term growth engine. Critics say it’s a fiscal time bomb. Many economists argue the real test will come in future years when the short-term stimulus wears off but the cost of servicing debt remains high.
With key tax provisions from Trump’s 2017 law set to expire next year, Congress will soon face another fiscal cliff. Analysts warn that a future showdown over Social Security, Medicare, and expiring tax cuts could create a perfect storm for deficit hawks.
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