House Republicans’ sprawling package to cut taxes and slash federal safety-net programs would add about $3.4 trillion to the debt over the next 10 years, according to nonpartisan congressional analysts, who reported on Tuesday that the minor gains in economic growth under the bill would not offset its full fiscal impact.
The updated findings from the Congressional Budget Office amounted to yet another dour report card for the president’s signature legislation, which passed the House last month but now faces the prospect of significant revisions to its core components in the Senate.
In its current form, the House Republican bill would extend and expand a set of expiring tax cuts enacted by Mr. Trump during his first term. It would pay for some of those expensive components with deep cuts to federal anti-poverty programs, including Medicaid and food stamps.
The C.B.O. report issued on Tuesday sought to project the ways the bill would interact with federal spending and the U.S. economy, building on its earlier finding that the House-passed measure carried a roughly $2.4 trillion price tag.
The nonpartisan analysts found that the House approach, if signed into law, would deliver a 0.09 percent boost to average annual growth in the nation’s gross domestic product in the first few years after enactment, compared to current projections.
The budget office said that lower taxes would spur some American families and businesses to spend and invest more. But it also found that the uptick in economic activity would not be sufficient to cover the costs of the legislation. Even after factoring in spending cuts, the proposal would still add nearly $2.8 trillion to federal deficits between now and 2035, according to the official tally from C.B.O. The figure grows to about $3.4 trillion if the full costs of federal borrowing are included.
The gap reflects the stark reality that federal debt is rising, and becoming more expensive for Washington to sustain. It causes investors to demand higher returns to lend money to the United States, which creates a vicious cycle, as the government must then borrow more to pay those higher yields.
As a result, the House Republican tax bill could cause prices to rise and send interest rates higher, particularly on 10-year bonds, which stand to rise by 14 basis points over the next decade, the budget office found. Those bonds are key benchmarks that shape borrowing costs across the economy, even for consumers, raising the odds that the Republican tax measure could make mortgages and other products more expensive.
For the government, the level of debt held by the public would total about 124 percent of the nation’s economic output by 2035 if the House Republican bill were to become law, the budget office found. That is more than the office previously predicted, and much higher than most economists believe to be sustainable for a developed country.
The findings cast fresh doubt on Republicans’ continued assertions that their signature bill is less expensive than it appears. Until now, congressional estimates of the House tax package and its costs had not measured its complex interplay with the U.S. economy, prompting Mr. Trump and his allies to dismiss earlier negative findings as incomplete.
The budget office based its newest estimates in part on a set of projections previously put forward by the Joint Committee on Taxation, another nonpartisan advisory arm of Congress. A White House spokesman did not immediately respond to a request for comment on the latest C.B.O. report.
The official congressional score echoes the conclusions reached by other economists across the political spectrum, who have found one by one that the House Republican tax bill would yield limited growth while conferring its most generous benefits on businesses and the wealthy, rather than the poor.
Administration officials have responded skeptically to such estimates, seeking to discredit experts while presenting a more optimistic view of the president’s economic agenda.
Earlier this spring, the Trump administration put forward its own analysis showing the Republican tax proposal could raise economic output by as much as about 5 percent in the short term, compared with what might happen without the bill.
But the analysis appeared to hinge on Congress extending a set of generous corporate tax deductions on a permanent basis, something that House Republicans did not actually include in their legislation. On Monday, Republicans in the Senate unveiled a version of the bill that would make many of these corporate tax breaks permanent.
Mr. Trump’s top aides also have insisted the House bill, along with Mr. Trump’s global tariffs, would serve to reduce the nation’s debt over the next 10 years. But that would require the United States to maintain steep taxes on imports for the entire decade, outlasting even Mr. Trump, who at times has offered to lower tariffs in exchange for favorable trade concessions around the world.
Tony Romm is a reporter covering economic policy and the Trump administration for The Times, based in Washington.
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