CBO Sees $3.7T Tax Cut and Deficit Rise in Trump Tax Bill with Impact on Health Coverage

The Congressional Budget Office (CBO) has released an analysis projecting that the Trump administration's proposed tax bill will reduce taxes by $3.7 trillion but also increase the federal deficit by $2.4 trillion over the next decade. The CBO further estimates that the legislation will result in 10.9 million more uninsured individuals, including 1.4 million undocumented immigrants excluded from state-funded health programs. The bill aims to reduce federal spending by $1.3 trillion, largely through changes to Medicaid and food assistance programs. The package extends individual income tax breaks from the 2017 law, introduces new tax exemptions like those on tips, and includes a $350 billion allocation for border security and national security. To offset revenue losses, the bill proposes phasing out green energy tax incentives and implementing work requirements for Medicaid and SNAP recipients starting in 2026, which would reduce federal outlays on social programs. Additionally, it includes a $4 trillion increase to the national debt limit to allow the government to meet its payment obligations. Amid political debate, the White House and some Republican leaders have criticized the CBO's findings, citing past inaccuracies, while the CBO continues to provide nonpartisan budget and economic analysis for Congress. This legislation's progress underscores ongoing tensions in federal budget and health policy, particularly on Medicaid, tax policy, and federal spending priorities.