IMF warns that the "big and beautiful" bill is complicating mid-term debt reduction in the United States.

The International Monetary Fund (IMF) has warned that the massive tax cuts and spending bill pushed by US President Trump, known as the "big and beautiful" bill, may complicate the task of reducing the US fiscal deficit and debt burden in the coming years. IMF spokesperson Julie Kozack stated that the organization has consistently emphasized the need for the US to gradually reduce public debt in order to start decisively reducing the debt-to-gross domestic product (GDP) ratio, a common indicator of debt sustainability. Julie Kozack pointed out that the tax reform bill "appears to run counter to reducing federal debt in the medium term," and "the sooner the process of deficit reduction begins, the slower the reduction of deficits will be over time." Although "medium term" can have different definitions, the IMF often uses a timeframe of 3 to 5 years. Julie Kozack stated that the IMF is studying the details of the bill and its possible impact on the US economy, and will provide a new forecast for the US and global economy in the updated World Economic Outlook later this month. On July 3, the US House of Representatives voted on the final passage of the "big and beautiful" bill. The final vote results showed 218 in favor and 214 against, allowing the bill to pass in the House. The bill has been controversial due to its cuts in federal aid, increase in long-term debt, and tax cuts for the wealthy and large corporations. According to analysis from the Congressional Budget Office, just the extension of tax cuts in the bill will cost over $4.5 trillion in expenditure over the next ten years. Additionally, the Senate version of the bill will increase the US deficit by nearly $3.3 trillion over the next decade, and raise the US debt ceiling by $5 trillion.