Nonpartisan analysts estimate that the bill would result in an additional $3-5tn added to the nation’s $36.2tn debt over the next decade.
United States President Donald Trump’s comprehensive tax-cut bill has received approval from a crucial congressional committee, moving it closer to potential passage in the House of Representatives later this week.
The unusual Sunday night vote represents a significant victory for Trump and House Speaker Mike Johnson, following a setback on Friday when hardline Republican conservatives obstructed the bill in the House Budget Committee due to disagreements over Medicaid healthcare spending cuts and the repeal of green energy tax incentives.
Four hardline members of the committee’s 21 Republicans abstained from the vote by choosing to vote “present,” allowing the legislation to proceed. The bill passed with a 17-16 vote, with all Democrats opposing it.
Throughout the day, these hardliners engaged in private discussions with House Republican leaders and White House officials.
Before the meeting, Johnson reassured reporters that the negotiated changes were “just minor adjustments. Not a major issue.”
Republican House Budget Chairman Jodey Arrington expects further deliberations into the week, stating that they will continue to discuss the legislation until it is put before the House.
Nonpartisan analysts project that the bill, which seeks to extend the 2017 tax cuts enacted during Trump’s first term, will increase the national debt by $3 trillion to $5 trillion over the next decade.
Credit ratings agency Moody’s acknowledged the growing debt as a factor in its decision to lower the US credit rating on Friday. Moody’s projected the debt could reach 134 percent of Gross Domestic Product (GDP) by 2035.
US Treasury Secretary Scott Bessent, in an interview with CNN on Sunday, stated that the bill would stimulate economic growth sufficient to counterbalance any debt increase, and downplayed the significance of Moody’s credit rating downgrade.
Economic experts contend that the downgrade, combined with previous reductions by Fitch Ratings and S&P, is a clear indication of excessive national debt and the necessity for lawmakers to either increase revenue or reduce spending.
Trump’s Republicans maintain a majority in the House, but they disagree on how to cut spending to compensate for the tax cuts’ cost.
Hardliners advocate for cuts to Medicaid, which some Republican senators have resisted, arguing it would adversely affect Trump’s voter base and hinder their re-election chances in 2026 when Congress is up for reelection.
The proposed cuts would disenfranchise 8.6 million individuals from Medicaid.
The bill also aims to remove taxes on tips and certain overtime income— Campaign pledges made by Trump—while increasing defense spending and providing additional funds for Trump’s immigration enforcement efforts.
Democratic US Senator Chris Murphy from Connecticut stated that the credit rating reduction foretells difficulties for Americans.
“This is significant,” Murphy said during an appearance on NBC’s Meet the Press. “It indicates we are heading towards a recession.”
“These individuals are managing the economy irresponsibly.”
