Trump’s Megabill Will Add $3.4 Trillion to Deficits: CBO Final Score

Happy Monday! Politico's Brian Faler noted today that tax experts are struggling with an issue that has at times bedeviled us, too: Just how to refer to the recently passed Republican tax cut law. "In a town that loves clever acronyms, tax pros are struggling to figure out how to talk about the new law, beginning with its name. The official title, at least before Democrats had it deleted from the legislation, is a mouthful: the One Big Beautiful Bill Act." Faler says Treasury Secretary Scott Bessent prefers "O Triple B." Suggestions? Email yrosenberg@thefiscaltimes.com.

Here's your evening update.

CBO Final Score: Trump's Megabill Will Add $3.4 Trillion to Deficits

The Congressional Budget Office said Monday that the tax cut and policy bill signed into law by President Donald Trump earlier this month will increase the budget deficit by $3.4 trillion over 10 years relative to the budgetary baseline established in January, before the bill passed.

The deficit results from a decrease in revenues totaling $4.5 trillion over a decade, partially offset by a decrease in spending of $1.1 trillion, CBO said in its final cost estimate.

The analysis also estimated that about 10 million more people will lack health insurance by 2034 as a result of the legislation, which imposes new work requirements on Medicaid beneficiaries.

Not popular: Although Republicans say the tax cut-laden legislation was designed to help ordinary Americans - "This is a bill that was written for hardworking Americans, middle- and lower-class earners in particular," said House Speaker Mike Johnson - polls indicate that it lacks broad support, in part because it will generate so much extra debt.

A CNN poll released last week found that 61% of respondents opposed the legislation, with just 39% supporting it. More (51%) expect the legislation to hurt the economy than help it (29%), with 20% saying it won't make much difference. And a larger proportion (39%) expect it to make their families worse off rather than better off (16%), though about half think it will have no effect or they're unsure.

According to the CNN poll, the top reason for opposing the legislation is the amount it adds to the federal budget deficit, with 58% of respondents choosing that option. Other reasons include its elimination of clean energy supports (51%) and the tightening of requirements for social safety net programs (49%).

Other polls have recorded similar overall results, including a Fox News poll conducted shortly before the bill passed that found that 59% of registered voters opposed it and 38% supported it. In an AP-NORC poll released last week, 64% of respondents said they think the tax and spending law will help wealthy people most of all, and 61% said it will harm low-income people.

Critics pounce: The CBO score gave critics an opportunity to rebroadcast their complaints about the new law. Rep. Brendan F. Boyle of Pennsylvania, the top Democrat on the House Budget Committee, said the analysis confirms that the Republican legislation will add trillions to the deficit in order to give tax cuts to the rich. "It's one of the most expensive bills ever passed," he said in a statement. "It's also one of the cruelest. More than 15 million Americans will lose their health care because of the law's assault on Medicaid and Republican plans to dismantle the ACA."

Boyle noted that the cost of the bill rises to $4 trillion when the cost of debt service is included, and that an earlier CBO analysis found that about 5.1 million people would lose the health coverage they receive under the Affordable Care Act as a result of expiring tax credits, bringing the total of those losing their health insurance to about 15 million "as a direct result of these Republican policies."

The budget hawks at the Committee for a Responsible Federal Budget also reiterated their criticism of the legislation. "It's still hard to believe that policymakers just added $4 trillion to the debt," CRFB President Maya MacGuineas said in a statement. "Many supporters of this law have spent months or years appropriately fuming about our unsustainable fiscal situation. But when they actually had an opportunity to fix it, they instead made it $4 trillion worse."

MacGuineas added that while the legislation may provide a short-term "sugar high" for the economy, economists across the political spectrum estimate that the benefits will be modest, and perhaps negative - and no independent analysis finds that the tax cuts and other policy changes will reduce the deficit.

Are Congress's Bruising Fiscal Fights Setting Up a Government Shutdown?

A dark cloud looms on the horizon as Congress prepares for its summer break: There's a very real chance lawmakers could be inching toward a government shutdown at the beginning of October. This week could go a long way toward determining how likely a shutdown may be.

The slow-moving 2026 annual appropriations process will continue in both the House and Senate this week. Senate Majority Leader John Thune has teed up a test vote on the bill funding military construction and the Department of Veterans Affairs, a measure that cleared the Senate Appropriations Committee in a 26-3 vote and typically draws strong bipartisan backing. But this time might be different.

Democrats are incensed about the way the White House and congressional Republicans have approached the process of funding the government. The Trump administration has repeatedly challenged Congress's power of the purse and Republicans last week agreed to a White House request to claw back $9 billion in funding that had previously been approved for foreign aid and public media.

"We are going to need to get appropriations done. That will require some cooperation from Democrats, and hopefully they will be willing to make sure that the government is funded," Thune said on Fox News Channel's "Sunday Morning Futures."

Senate Democrats say they have little reason to work with Republicans if the bipartisan spending deals they help reach the necessary 60-vote threshold then get cut via Republican rescission packages that are passed by simple majority votes. On the House side, Republicans have pushed ahead with government funding bills that include spending cuts in line with the president's budget request and a host of conservative policy riders to boot.

Democrats have little power to push back against GOP spending bills or plans for further rescissions packages. The main point of leverage Democrats can wield is the threat of a shutdown. After House Republicans approved the $9 billion package of cuts last week, House Democratic leaders warned that the GOP was choosing a partisan path that would lead to trouble. "Tonight's vote, coming hours after the Trump White House abandoned the bipartisan appropriations process, makes it clear that House Republicans are determined to march this country toward a painful government shutdown later this year," Minority Leader Hakeem Jeffries, Minority Whip Katherine Clark and Democratic Caucus Chair Pete Aguilar said in a joint statement.

Democratic Sen. Chris Murphy of Connecticut, a member of the Appropriations Committee, offered this view of the situation, as quoted by Punchbowl News last week: "They're putting bills on the floor with the promise that, if we vote for them, they will then put a rescissions bill on the floor to strip out all of our stuff? Why on earth would we agree to that? It's insane... We're not patsies. And we shouldn't act like it."

Still, it's not entirely clear that a shutdown would benefit Democrats, as some in the party argued back in March, when Senate Minority Leader Chuck Schumer decided to help pass a Republican spending extension, drawing the ire of many in his party.

"I think the most important thing for us to do is to continue to move the appropriations process as expeditiously as we can, to try and find bipartisan agreement," Democratic Sen. Jeanne Shaheen, a member of the Appropriations Committee, told Politico, "because it's in everybody's interest to do this and to move forward."

Looking ahead: The House is scheduled to leave Thursday for an August recess that will have lawmakers out until after Labor Day. The Senate is scheduled to stick around through next week - though President Trump wants senators to stay in session and keep working on his nominations. "Hopefully the very talented John Thune, fresh off our many victories over the past two weeks and, indeed, 6 months, will cancel August recess (and long weekends!), in order to get my incredible nominees confirmed," Trump posted on social media this weekend.

Staying in session could carry a longer-term cost for Republicans. Lawmakers would lose time back home that they want to spend selling constituents on elements of the tax-cutting megabill they passed or defending against Democratic attacks blaming them for cutting Medicaid.

The bottom line: Republican leaders may opt to package the MilCon-VA funding bill with other bills that cleared the Appropriations Committee with strong bipartisan support. And Democrats could still decide to help pass the bills, especially given that the Senate plans would provide more funding than the House Republican versions. But White House budget director Russell Vought last week notably said that he believes the appropriations process should be less bipartisan. Democrats will soon have to decide how they want to respond. And a senior Republican on the Senate Appropriations Committee told The Hill that the chances of a shutdown in the fall are "a real square 50-50."

Fiscal News Roundup

• GOP Megabill's Final Score: $3.4T in Red Ink and 10 Million Kicked off Health Insurance, CBO Says - Politico
• Thune Seeks to Kick Off Appropriations on Senate Floor - Roll Call
• Congress Democrats Seek Shutdown Strategy as White House Plots to Strip Their Power - Politico
• EPA Eliminates Research and Development Office, Begins Layoffs - ABC News
• Education Department Will Release Some Frozen Grants Supporting After-School and Summer Programs - Associated Press
• Treasury Secretary Bessent Calls for a Review of 'the Entire' Federal Reserve - CNBC
• Judge Rules Trump Administration Broke Law in Takedown of Public Funding Tracker - The Hill
• $50B Rural Health 'Slush Fund' Faces Questions, Skepticism - KFF Health News
• Over Half of Americans Say 'Big, Beautiful Bill' Going to Raise Health Care Costs: Poll - The Hill
• Wall Street Likes the Economy More Than Voters Do - Axios
• Nearly Two-Thirds Disapprove of Trump's Handling of Inflation: Survey - The Hill
• Republicans Are Ready to Revive Stalled Health Care Legislation. Dems Want the GOP to Pay a Price - Politico
• Disabled Americans Fear What Medicaid Cuts Could Do to Them - New York Times
• When Getting Fired Is Only the Beginning for Federal Workers - New York Times
• Stellantis Swings to Loss as Trump Tariffs Hit Fiat and Jeep Maker - Financial Times
• Georgia Shows Rough Road Ahead for States as Medicaid Work Requirements Loom - KFF Health News

Views and Analysis

• How the 2017 Trump Tax Cuts Ballooned the 'Big, Beautiful Bill' - Taylor Miller Thomas, Paula Friedrich and Jonathan Lai, Politico
• Trump's Budget Could Break the Economy - Robert J. Shapiro, Washington Monthly
• Ben Bernanke and Janet Yellen: The Fed Must Be Independent - Ben S. Bernanke and Janet L. Yellen, New York Times
• RFK Jr. Is Making America Sick Again. Republicans Need a Cure - Michael R. Bloomberg, Bloomberg
• HHS Under Kennedy Might Be Moving to Undercut Lifesaving Preventive Care - Karen Tumulty, Washington Post
• An Attack on the Medical Establishment Buried in an 1,800-Page Regulation - Reed Abelson and Margot Sanger-Katz, New York Times
• Is Wall Street Still Too Bearish on the Impact of Tariffs? - Jonathan Levin, Bloomberg
• The U.S. Economy Is Regaining Its Swagger - Rachel Wolfe and Konrad Putzier, Wall Street Journal
• These Are the Long-Term Costs of Trump's Trade War - Washington Post Editorial Board
• Trump's Trade War Hits a New Low With Big Tariffs on Brazil - Max Boot, Washington Post
• Republicans Said They Would Cut Waste. Instead, They Rewarded It - Sen. Amy Klobuchar (D-MN), Washington Post
• Regret, Thy Name Is Hawley. And Murkowski. And Musk - Frank Bruni, New York Times
• 'Fiscal Populism' Is Coming for Central Banks - Andy Haldane, Financial Times
• The Cruelty of Medicaid Work Requirements - Emma Janssen, American Prospect
• New York City Has the Power to Bring Down Grocery Prices. All Cities Do - Zephyr Teachout, New York Times