Trump's tax bill can increase US budget deficit by $2.8 trillion

President Donald Trump's tax cut and increased government spending bill, despite its stimulative effect on US economic growth, will lead to a larger federal budget shortfall. According to estimates by the Congressional Budget Office, the deficit will grow by $2.8 trillion over a decade.

Senate Majority Leader John Thune believes that amending the bill next week could have a positive impact on the US economy.

Moreover, CBO data indicates the tax provisions passed by the House of Representatives will increase the country’s real GDP by an average of 0.5% per year over the next decade. This is expected to reduce the budget deficit by $85 billion. However, the agency’s experts highlight negative effects, including higher interest rates and a $441 billion increase in federal debt payments.

Independent analysts suggest that the national debt could grow by $5 trillion over the next ten years due to permanent corporate tax breaks.