CBO warns: "Big and Beautiful Act" will increase the U.S. deficit by nearly $3.3 trillion.

According to the latest estimate from the non-partisan Congressional Budget Office (CBO), President Donald Trump's tax and spending plan will increase the U.S. deficit by nearly $3.3 trillion over the next decade. The evaluation of the so-called "One Big Beautiful Bill Act" by the Congressional Budget Office shows that compared to current law, the bill will lead to a decrease in revenue by $4.5 trillion and a decrease in spending by $1.2 trillion by 2034. At the request of the Republicans, this bill in the Senate is evaluated to save $507.6 billion over a decade compared to current policy baseline. Republican lawmakers have been trying to use this accounting practice to permanently extend Trump's 2017 income tax cut policies and assess their cost as zero. According to an estimate by the Joint Committee on Taxation on Saturday, the bill includes $4.5 trillion worth of tax cuts. Republicans are using reconciliation procedures to try to pass this major bill with a simple majority vote, but using the current policy baseline to measure costs in this process is unprecedented. Normally, the cost of a bill is measured based on its impact on the federal budget under current law. However, Republicans are looking to change this process by assuming that current policies will remain unchanged indefinitely. The cost of the bill has been a major issue for fiscal conservatives. The bill has faced heavy resistance in the Senate due to conflicting amendments proposed by lawmakers. Subsequently, several spending cut measures included in the bill were modified as they did not comply with Senate rules on reconciliation procedures. Democrats and some economists believe that using the current policy baseline allows Republican lawmakers to circumvent rules that would otherwise restrict the fiscal impact of the bill. They believe that this could endanger the nation's fiscal trajectory. Senate Minority Leader Chuck Schumer said on Sunday, "Republicans can use whatever budget gimmicks they want to make the numbers work on paper. But you can't hide the real consequences of adding trillions of dollars in debt." The cost of the Senate bill is higher than the $2.8 trillion cost estimate by the Congressional Budget Office for the bill passed by the House last month. The latter also considered the economic impact and rising interest rates resulting from increased debt burden. The Senate bill covers most of Trump's economic agenda. In addition to extending the 2017 tax cut policies, the bill will also cut spending on several social security programs, including Medicare and Supplemental Nutrition Assistance Program. The Senate bill will make three business tax breaks permanent, limit the new tax deductions for worker tips and overtime pay, and modify certain provisions of the Medicare assistance program. Republicans in the House and Senate have also reached an agreement to modify the federal deduction cap for state and local taxes. The cap will remain at $40,000 as specified in the House bill, but the duration will be changed from 10 years to 5 years.