Congress’ nonpartisan scorekeeper released its final prediction Monday for how President Donald Trump’s signature legislative achievement will grow the national debt and affect U.S. households.
Over the next decade, the megabill Trump signed on July 4 would increase the federal deficit by $3.4 trillion and cause 10 million people to lose health insurance, the Congressional Budget Office forecasts. While the newly enacted legislation would save more than $1 trillion by cutting federal spending on health care — with the majority coming from Medicaid — CBO predicts that the package’s costs will far outweigh its savings.
The bulk of the red ink from the package comes from the GOP’s permanent extension of Trump’s 2017 tax cuts. The analysis finds that the Senate Finance Committee, which has jurisdiction over tax policy, enacted policies that would decrease the incoming federal cash flow from taxes by a total of $4.5 trillion. That sum includes the cost of tax cuts Republicans added during Senate floor debate of the package.
CBO’s new uninsured figure is below itsprior estimate of 11.8 million people. The agency said it will offer details on the differences in the coming weeks, but one source of the reduction is removal of a policy in the final version of the megabill that would have led to an estimated 1.4 million undocumented immigrants losing coverage.
The budget office also recalculated savings from agriculture policies. In the final days before the bill cleared Congress, Sen. Lisa Murkowski (R-Alaska) led negotiations to soften a requirement to make states pay for part of SNAP food assistance, the nation’s largest anti-hunger program.
Cuts to federal agriculture spending and the bill’s overhaul of the food aid program will save $120 billion over the next decade, CBO predicts.
A prior version of the legislation also offset costs with policies intended to penalize states that offer coverage to undocumented immigrants out of their own coffers. Undocumented immigrants are prohibited from getting Medicaid coverage, but a dozen states and the District of Columbia pay for services with their own funds.
The bill originally cut funding for states that had opted to expand Medicaid under the Democrats’ 2010 health law, but the provision was dropped in the final version due to an objection from the Senate parliamentarian.
At the request of Senate Republicans, CBO also included an analysis using a new accounting tactic that zeroes out the cost of permanently extending Trump’s 2017 tax cuts. Senate Republicans have argued that merely extending current tax rates shouldn’t be counted towards the deficit and that traditional accounting used by CBO biases against preventing tax increases.
Under the separate analysis, also released on Monday, the sweeping domestic policy bill would increase the federal deficit by only $366 billion.
Katherine Tully-McManus and Samuel Benson contributed to this report.
