Congressional budget experts released their final assessment on Monday regarding how President Trump’s major legislative efforts will impact the national debt and American households.
According to the forecast, the recently signed Mega Building law is expected to raise the federal deficit by $3.4 trillion over the next decade, with predictions that around 10 million individuals could lose health insurance. Interestingly, while the new law aims to save over $1 trillion by cutting healthcare spending—mostly by targeting Medicaid—analysts believe the overall costs of the legislation will outweigh these savings.
Many of the financial burdens stem from the permanent extension of tax cuts initiated by Trump and the GOP in 2017. The Senate Finance Committee, which oversees tax policies, has enacted measures that will reduce federal tax revenues by approximately $4.5 trillion. This total accounts for additional tax cuts negotiated during the Senate discussions on the package.
The most recent estimates from the budget office indicate fewer uninsured people than previously thought. In fact, the new estimate suggests about 1.4 million undocumented immigrants may lose benefits due to changes made in the final draft of the legislation.
Earlier drafts of this bill included measures that would penalize states financially for providing support to undocumented immigrants using their own funds. While Medicaid benefits are ordinarily not extended to undocumented residents, 12 states, along with D.C., have been funding some services independently.
The initial plan aimed to reduce funds for states that opted to expand Medicaid under the Affordable Care Act of 2010, however, that part was dropped in the final version after pushback from various senators.
At the behest of Senate Republicans, the budget office also incorporated a fresh accounting method which would show the costs of Trump’s tax cuts as negligible going forward. The Republicans argue that merely extending existing tax rates shouldn’t count against the deficit, suggesting that conventional accounting methods might be unfairly biased against them.
Additionally, a different analysis released on Monday indicates that the domestic policy bill could lead to an increase in the federal deficit of around $366 billion.
