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E-mail Xinhua, April 12, 2025
U.S. President Donald Trump's so-called "big, beautiful bill" may fail to address the nation's mounting debt and deficit, experts have said.
On Thursday, House Republicans narrowly approved their budget framework that paves the way for Trump's sweeping legislative package, which includes expanded military spending, major tax cuts, new energy policies, and more.
However, analysts warned that the bill could actually worsen the situation, potentially adding to already record-high deficits and the ballooning national debt.
"It clearly will make the debt/deficit worse than the baseline," Dean Baker, a senior economist at the Center for Economic and Policy Research, told Xinhua. "With the budget bill, we are likely at deficits of more than 7.0 percent of GDP, and possibly quite a bit higher if the rich decide they don't have to pay taxes."
"There is no way the savings they are talking about will offset the cost of the tax cuts. Deficits are definitely going higher, not lower," he added.
Gary Clyde Hufbauer, a non-resident senior fellow at the Peterson Institute for International Economics, said that the deficit will grow and the debt/GDP ratio will continue to rise, while the Republicans will "use various accounting gimmicks to mask the deficit."
"Savings will be modest, at best. There will be strong pressure to increase defense spending," he said.
Earlier this week, Trump said the military's budget would be "in the vicinity" of 1 trillion U.S. dollars -- a hefty increase from the 2025 budget of 850 billion dollars.
Thursday's approval of a budget framework is a major victory for Trump and Republicans, who are riding the momentum from November's sound defeat of Democrats in the presidential elections.
But this is a mere first step in a long, tedious process toward the implementation of Trump's proposed bill.
Republican lawmakers are seeking a minimum of 4 billion dollars in savings over ten years from new policies created by committees that deal with health, energy, labor policy and education.
They also plan to continue Trump's 2017 tax cuts, in addition to enacting up to 1.5 trillion dollars in new tax relief.
Maya MacGuineas, president of the Committee for a Responsible Federal Budget, said in a statement that the budget's reconciliation instructions would allow for legislation to add 5.8 trillion dollars to deficits through Fiscal Year 2034 -- including a permanent extension of the expiring 2017 tax cuts using the "current policy" gimmick.
"This budget sets the stage for the largest deficit increase in history -- an unprecedented bill that requires just 4 billion dollars in savings to offset up to 5.8 trillion dollars in deficits. What an absolute disgrace," said MacGuineas.
The U.S. budget deficit for the first six months of fiscal year 2025 reached a record 1.3 trillion dollars, the second-highest six-month level on record, according to Treasury Department data released Thursday.
