Republicans are advancing Trump tax-cut bill, criticized for increasing debt and benefiting wealthy

From Yahoo Finance: 2025-07-01 12:17:00

Republicans are moving ahead with a tax-cut and spending bill that could add $3.3 trillion to the national debt over the next decade. Independent analysts and investors warn of eroding fiscal health and shaken financial markets following Moody’s downgrade. The bill passed by the Senate aims to raise the debt ceiling by $5 trillion.

Democrats criticize the bill for benefiting the wealthy and burdening lower-income Americans. Republican Senate Finance Committee Chairman Mike Crapo argues that extending the 2017 tax cuts will not add to the debt, providing certainty for businesses and investors. The bond market shows signs of worry about a possible default if the bill doesn’t pass.

Trump has urged Federal Reserve Chairman Jerome Powell to cut interest rates to 1% to dull the bill’s deficit effects. If the legislation is signed into law, Americans can expect growing deficits, rising interest rates, waning economic vitality, and mounting debt. Analysts warn of deficits reaching $4 trillion within a decade. Interest payments on government debt have doubled in recent years.

The Senate bill sets a dangerous precedent for both parties to hide the cost of legislative priorities that expand the debt and deficits. Analysts caution that the lack of consistent facts and transparency in political rhetoric makes it difficult for the public to understand the consequences of legislation. The bill’s impact on the American economy and financial markets remains uncertain.

Read more: Republicans ignore debt worry as they push forward on Trump tax-cut bill