Trump's Trials - The GOP's massive bill would add trillions of dollars to the country's debt

Episode Date: July 3, 2025

The massive tax cut and spending bill passed by the Senate this week is expected to add trillions of dollars over the next decade to an already hefty federal debt. NPR's Scott Horsley reports.Support NPR and hear every episode of Trump's Terms sponsor-free with NPR+. Sign up at plus.npr.org.Learn more about sponsor message choices: podcastchoices.com/adchoicesNPR Privacy Policy

I'm Scott Detro and this is Trump's Terms from NPR. We're going to be doing all sorts of things nobody ever thought was even possible. President Trump has brought back strength to the White House. We can't just ignore the president's desires. This will be an entirely different country in a short period of time. Every episode we bring you one of NPR's latest stories about the 47th president and how he is trying to remake the federal government. Today's story starts right after this.

I'm Elsa Chang. Senate Republicans passed their big tax cut and spending bill by the narrowest of margins. And now Republican leaders are trying to muscle the bill through the House. They're not getting a lot of help from budget watchdogs who warn the measure could add trillions of dollars to the federal debt at a time when the government is already awash in red ink. NPR's Scott Horsley joins us now. Hi, Scott. Hi, Elsa.

Okay, so there's been a variety of scorekeepers who've weighed in on this bill. What are they all saying about its effects on the federal budget? They all say it would push that budget even further out of balance. The bill would extend many of the individual tax cuts from President Trump's first term and then also add some new tax breaks so there would be less money coming into the government's coffers. The bill would also increase government spending on things like defense and immigration enforcement and while there are some deep cuts here to safety net programs like Medicaid and food

stamps, those don't begin to make up for all the lost revenue. So the overall effect would be trillions of dollars in additional debt over the next decade. And just paying interest on that debt is already one of the government's biggest expenses. Interest payments will likely cost taxpayers more than a trillion dollars this year. Dang. Okay, well supporters say the tax cuts will boost the economy, so how much extra growth should we expect? Not a whole lot, at least according to the Congressional Budget Office. The CBO has not yet run the numbers on the Senate bill's economic effects, but when they looked at the earlier House version, CBO forecasters found very modest economic gains, and those were dwarfed by all the added interest costs.

Economists at the Yale Budget Lab came to a very similar conclusion. Martha Gimble, who co-founded the Budget Lab and also worked in the Biden administration, says the U.S. economy is already in pretty solid shape, so more tax cuts and more deficit spending by the government just don't provide much of an economic lift. There's less space in the economy for the spending to fill up and so instead a large part of the impact is just going to be that interest rates are raised and that slows down growth. In other words all that extra government debt that comes from the bill would make it more expensive for families and businesses to borrow money if they want to buy a house

or build a factory or invest in some new equipment. The White House has offered its own forecast of what the bill would do for the economy, and that's much rosier, but most of the independent forecasters have dismissed those White House numbers as wildly optimistic. Remember back in 2017, when the original Trump tax cuts were passed, the administration said those cuts would pay for themselves with higher growth. In fact, they never came close to paying for themselves and instead the deficit soared even before the pandemic. Okay, well with all that said, passing this bill is a top priority for

President Trump. So if Trump is successful, who stands to benefit and who stands to lose out? Everybody who pays taxes stands to see at least a little bit of savings from the bill, but those gains are definitely skewed to the rich. When CBO looked at the earlier House version of the bill, they found the top 10% of earners, that is people making around $700,000 a year on average, would see the biggest tax cuts averaging about $12,000. Middle income families would see a much smaller tax break, $500 to $1,000. And the poorest 30% of families, that is people making less than about $55,000 a year, would likely end

up worse off. Gimble says for those families, the loss of government assistance like Medicaid and food stamps would outweigh any tax savings. Even if you get a tax cut of $50, it's not that helpful if you then lose your Medicaid. So to summarize, rich people get a big tax cut, poor people lose out, and those in the middle see a little bit of savings. Meanwhile, the federal government ends up with a much bigger credit card bill that potentially costs all of us in the long run. That is NPR's Scott Horsley. Thank you, Scott. You're welcome.

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