Tech boss hits out at tax bill

Donald Trump’s big bill in Congress would unleash trillions in tax cuts and slash spending, but also spike deficits by $US2.4 trillion ($3.7 trillion) over the decade and leave some 10.9 million more people without health insurance, raising the political stakes for the GOP’s signature domestic priority.

Republican leaders in Congress, determined to muscle the sweeping package forward, had little to say after the analysis released today by the nonpartisan Congressional Budget Office.

GOP senators spent time at the White House for what one called a robust afternoon discussion with Trump.

“We’re committed to making a law that will make the lives of the American people better,” Senate Majority Leader John Thune of South Dakota said afterwards.

“We will get this done one way or another.”

But Democrats labouring to halt the package, called the One Big Beautiful Bill Act after the president’s own catchphrase, piled on with relentless opposition.

“In the words of Elon Musk, this bill is a ‘disgusting abomination,'” Representative Brendan Boyle of Pennsylvania, the top Democrat on the House Budget Committee, said, reviving the billionaire former Trump aide’s criticism of the package.

The analysis comes at a crucial moment as Trump is pushing Congress, where Republicans have majority control, to send the final product to his desk to become law by the Fourth of July.

The House passed the bill last month by a single vote, but it’s now slogging through the Senate, where Republicans want a number of significant changes.

The politics are only intensifying

After Musk blindsided Congress with an all-out assault against the bill this week, House Speaker Mike Johnson rushed to do damage control.

The GOP speaker said he called Musk to discuss the criticism, but had not heard back.

Musk has threatened to use his political apparatus to go after Republicans in the midterm elections.

“I hope he comes around,” Johnson told reporters.

Hours later, Musk, whose business interests could be impacted by green energy rollbacks in the bill, implored voters to call their representatives and senators: “Bankrupting America is NOT ok!” he wrote on social media, “KILL the BILL”.

Tax breaks, but also cuts to health care

The work of the Congressional Budget Office, which for decades has served as the official scorekeeper of legislation in Congress, is closely watched by lawmakers and others seeking to understand the budgetary impacts of the sprawling 1000-page-plus package.

The bill includes roughly $5.8 trillion in tax cuts — extending the expiring 2017 individual income tax breaks and temporarily adding new ones that Trump campaigned on, including no taxes on tips.

The revenue loss would be partially offset by nearly $2 trillion in reduced federal spending elsewhere, namely through Medicaid and food assistance.

As a result, some 7.8 million people would no longer have health insurance with changes to Medicaid, including 5.2 million from the proposed new work requirements on those non-disabled adults up to age 65, with some exceptions, the analysis said.

With the Medicaid changes, some 1.4 million people who are in the United States without legal status in state-funded health programs would no longer have coverage.

Also, some 400,000 would lose coverage from the termination of a medical provider tax that key Republicans, including Senator Josh Hawley of Missouri, want to keep in place to ensure rural hospitals can keep paying their bills.

Republicans argue that their proposals are intended to strengthen Medicaid and other programs by rooting out waste, fraud and abuse.

They want the federal funding to go to those who most need health care and other services, often citing women and children.

But Senate Democratic Leader Chuck Schumer said those claims are bogus and are simply part of long-running GOP efforts to repeal and replace the Affordable Care Act, or Obamacare, as most states have expanded Medicaid to serve more people under the program.

“They just want to strangle health care,” Schumer said.

Additionally, the Congressional Budget Office had previously estimated that nearly 4 million fewer people would have food stamps each month due to the legislation’s proposed changes to the Supplemental Nutrition Assistance Program, known as SNAP, including new work requirements for some older Americans and parents of school-age children.

Some would see their benefits reduced by about $15 by 2034, the Congressional Budget Office has said.

Republicans criticise the Congressional Budget Office

Ahead of the Congressional Budget Office’s release, the White House and Republican leaders criticised the budget office in a pre-emptive campaign designed to sow doubt in its findings.

Senate Majority Leader John Thune said the Congressional Budget Office was “flat wrong” because it underestimated the potential revenue growth from Trump’s first round of tax breaks in 2017.

The Congressional Budget Office last year said receipts were $2.3 trillion, or 5.6 per cent greater than predicted, in large part because of the “burst of high inflation” during the COVID-19 pandemic in 2021.

White House Budget Director Russ Vought said when you adjust for “current policy,” which means not counting some $6.9 trillion in existing tax breaks that are simply being extended for the next decade, the overall package actually doesn’t pile onto the deficit.

He argued that the spending cuts alone, in fact, help reduce deficits by $2.2 trillion over the decade.

But Democrats and even some Republicans call that “current policy” accounting move a gimmick.

Still, it’s the approach Senate Republicans intend to use during their consideration of the package to try to show it does not add to the nation’s deficits.

Vought argued that the Congressional Budget Office is the one using a “gimmick” by tallying the costs of continuing those tax breaks that would otherwise expire.

“Russ is right,” Johnson, the House speaker, posted on social media.

“Our One Big Beautiful Bill will REDUCE the deficit WHILE delivering on the mandate given to us by the American people. Let’s get it done!”

White House press secretary Karoline Leavitt has also suggested that the Congressional Budget Office’s employees are biased, even though certain budget office workers face strict ethical rules — including restrictions on campaign donations and political activity — to ensure objectivity and impartiality.

The individual income tax breaks that had been approved during Trump’s first term in the White House will expire in December if Congress fails to act, in what Republicans warn would be a massive tax hike on many American households.

The package also includes a massive buildup of $539 billion for border security, deportations and national security that is central to the GOP agenda, as well as a $6.16 trillion increase to the nation’s $36 trillion debt limit, which the Treasury Department says is needed by this summer to pay the nation’s bills.

Congressional Budget Office aims for impartiality

More than 50 years ago, the Congressional Budget Office was established by law after Congress sought to assert its control, as outlined in the Constitution, over the budget process.

Staffed by some 275 economists, analysts and other employees, the Congressional Budget Office says it seeks to provide Congress with objective, impartial information about budgetary and economic issues.

Its current director, Phillip Swagel, a former Treasury official in Republican President George W. Bush’s administration, was reappointed to a four-year term in 2023.