President Donald Trump’s proposed legislation, advancing through the corridors of Congress, is set to enact a tax reduction totaling $3.7 trillion but may simultaneously cause an increase in deficits by $2.4 trillion over the next ten years, according to an analysis by the Congressional Budget Office (CBO) released on Wednesday.
The CBO report predicts that the plan could leave 10.9 million more people uninsured with health coverage. This figure includes 1.4 million individuals without legal status who are participating in state-funded programs. Furthermore, federal spending, or outlays, would see a reduction by approximately $1.3 trillion over the decade, the office notes.
As Congress hurries to put the final touches on the legislation before President Trump’s desired deadline of Fourth of July, the CBO’s analysis emerges at a pivotal phase in the bill’s legislative trajectory. Often recognized as an authoritative scorekeeper for legislative endeavors, the CBO’s findings are likely to significantly influence the perspectives of lawmakers and concerned parties evaluating the financial implications of the hefty thousand-page legislation.
In anticipation of the CBO’s publication, White House representatives, coupled with Republican leadership, cast doubts on its results—seen as a strategic maneuver intended to shadow credibility on anticipated findings. White House Press Secretary, Karoline Leavitt, labeled CBO’s historical accuracy as questionable, while Senate Majority Leader John Thune criticized the office for underestimating the fiscal returns from Trump’s 2017 tax reform. Indeed, the CBO had calculated that receipts were $1.5 trillion higher than expected due to inflation surges during the COVID-19 pandemic.
Leavitt also implied a potential bias among CBO employees, despite the strict ethical standards imposed on budget office staff to ensure impartiality—inclusive of restrictions on political contributions and activities.
Beyond budgetary particulars, the CBO previously estimated the proposed legislative changes could displace about 8.6 million people from health care benefits, with another 4 million potentially losing access to monthly food stamps due to impending adjustments to Medicaid and related programs.
Termed the “One Big Beautiful Bill Act,” a nod to the President’s signature rhetoric, the legislation marks a top Republican agenda, advancing through a Congress dominated by the GOP yet facing intense resistance from Democratic counterparts.
While Republicans work to sustain individual income tax breaks enacted in 2017, currently set to expire in December absent legislative intervention, the bill introduces additional tax exemptions, such as untaxed gratuities. It also earmarks $350 billion toward reinforcing border security, deportations, and enhancing national defense.
To mitigate revenue shortfalls, Republicans discuss curbing federal expenditures, including phasing out incentivized green energy initiatives introduced during President Joe Biden’s term. New work stipulations for certain adults up to 65 using Medicaid and the Supplemental Nutrition Assistance Program (SNAP) would commence in December 2026, bringing anticipated reductions to program costs.
The legislation also envisions augmenting the national debt ceiling by $4 trillion, pushing it from $36 trillion, thus accommodating further borrowing. The U.S. Treasury signals the necessity of elevating the debt limit this summer to cover the nation’s outstanding financial obligations.
The CBO, now celebrating its 50th year, was inaugurated as a legislative initiative for bolstering Congress’s constitutional role over fiscal policy—creating a new independent entity from the White House’s Office of Management and Budget.
Boasting a workforce of approximately 275 experts, including economists and analysts, the CBO’s goal remains to furnish Congress with neutral and analytical insights on budgetary and economic matters. Its current head, Phillip Swagel, previously served in positions within President George W. Bush’s administration and was reappointed to steer the office for a subsequent four-year term in 2023.