President Donald Trump’s flagship tax-cut legislation, dubbed the “big, beautiful” bill, is projected to swell the US budget deficit by $2.4 trillion over the next decade, according to a new analysis from the Congressional Budget Office (CBO).
The CBO report, released Wednesday, estimates that while the bill delivers $3.7 trillion in tax cuts, it offsets only $1.3 trillion through proposed spending reductions. The shortfall will need to be covered by borrowing, which will put further strain on the already stretched bond market. The legislation also raises the US public debt ceiling by an additional $4 trillion, pushing the cap to $40 trillion.
Investors have responded with concern, driving yields on longer-term US Treasury bonds higher as fears mount over America’s growing debt load.
The new forecast is likely to fuel criticism from key Trump ally and billionaire Elon Musk, who has become increasingly vocal in his opposition. Musk used his platform, X, to label the bill a “disgusting abomination” earlier this week. On Wednesday, he returned with another post warning that the US risks falling into “debt slavery” if the legislation, marked by what he called “immense overspending”,passes Congress. His remarks accompanied a video featuring Federal Reserve Chair Jerome Powell.
The bill narrowly passed the House of Representatives in May by a single vote, 215 to 214. Trump now aims to push it through the Senate by July 4, though opposition is expected from fiscally conservative Republican senators.
Ahead of the CBO’s release, Trump press secretary Karoline Leavitt sought to discredit the report, claiming the agency has been “historically wrong” and suggesting its analysts may be politically biased.
The new CBO figures slightly narrow the projected deficit increase from an earlier May estimate of $3.8 trillion, reflecting revisions to the bill and additional spending cuts that have since been included.
