Congressional Budget Office says Trump’s new reforms could drastically increase US deficit

The tax and spending bill recently signed by President Donald Trump is projected to increase the US federal deficit by $3.4 trillion over the next decade while leaving roughly 10 million Americans without health care coverage, according to a new estimate from the Congressional Budget Office.

The agency forecasts that the initiative would reduce US revenues by $4.5 trillion and cut spending by $1.1 trillion through 2034. Economists warn that widening the already large budget deficit could drive up borrowing costs and fuel inflation. However, the Trump administration claims that record-high tariffs will fully offset any potential losses.

In an effort to reduce the deficit, US lawmakers have introduced a series of tax measures aimed at cutting costs, including slashing funding for Medicaid, which provides health coverage to low-income Americans. Meanwhile, the new tariffs are expected to drive up prices, hitting lower-income families the hardest. These households spend a significant portion of their earnings on necessities, the Congressional Budget Office says.