Trump Tax Law to Add $3.4 Trillion to US Deficits, CBO Says

Washington, D.C. – A sweeping tax and spending overhaul signed into law by President Donald Trump is projected to increase federal deficits by $3.4 trillion over the next decade, according to a new analysis from the nonpartisan Congressional Budget Office (CBO). The legislation, dubbed the “One Big Beautiful Bill Act,” extends key provisions from Trump’s 2017 tax cuts while introducing new deductions and significant reductions in social program spending.

The CBO’s dynamic estimate, which accounts for potential macroeconomic effects, forecasts a $4.5 trillion drop in federal revenues through 2034, largely driven by tax breaks for corporations, individuals, and specific industries. This includes making permanent the reduction of the corporate tax rate from 35% to 21%, increasing the standard deduction, and eliminating personal exemptions. New provisions allow deductions for tips, overtime pay, and interest on loans for U.S.-assembled vehicles, further eroding revenue. On the spending side, the bill achieves $1.1 trillion in savings through cuts to Medicaid and the Supplemental Nutrition Assistance Program (SNAP), imposing stricter work requirements and eligibility checks.

One of the most contentious aspects of the law is its impact on health coverage. The CBO projects that these changes will leave approximately 10 million Americans uninsured by 2034, down slightly from an earlier estimate of 11.8 million due to last-minute adjustments, such as a $50 billion fund for rural hospitals. The bill also phases out tax credits for wind and solar energy, which critics argue could drive up energy costs for consumers.

Additional allocations in the bill include nearly $170 billion for immigration enforcement and border security, funding expansions for Immigration and Customs Enforcement (ICE) and continued construction of a border wall. It also boosts defense spending by $150 billion and imposes new restrictions on student loans while reducing funding for the Consumer Financial Protection Bureau.

Politically, the legislation has deepened partisan divides. Republicans have hailed it as a victory for economic growth, with Trump describing it as “the most popular bill ever signed in the history of the country.” They argue that the tax cuts will stimulate investment and job creation, ultimately offsetting the deficits through higher GDP growth. However, public opinion polls tell a different story: A CBS/YouGov survey found only 25% of Americans believe the bill will benefit their families, while an AP-NORC poll indicated that two-thirds view it as primarily aiding the wealthy.

Democrats have sharply condemned the measure. Senate Democratic leader Chuck Schumer called it a “big, ugly betrayal,” warning that it prioritizes tax breaks for billionaires at the expense of vulnerable populations. Ken Martin, chair of the Democratic National Committee, went further, stating that the bill could lead to “starvation, loss of medical care, job losses, and even deaths”