The U.S. Congressional Budget Office (CBO) has revised downward its estimate of the fiscal impact of a major tax-and-spending package backed by former President Donald Trump. The nonpartisan agency now projects the measure would increase the national debt by approximately $2.4 trillion, a reduction from its earlier estimate of $3.8 trillion.
The updated assessment, released on Wednesday, comes shortly after influential Trump ally Elon Musk condemned the legislation as a “disgusting abomination,” bolstering arguments from Republican fiscal conservatives who have expressed growing unease over the bill.
Initially passed by the Republican-controlled House on May 22 without any Democratic votes, the legislation seeks to extend tax cuts from Trump’s 2017 overhaul while implementing deep cuts to federal spending, particularly targeting Medicaid—the government’s health program for low-income Americans.
The revised CBO estimate incorporates last-minute modifications made by House Republican leaders to secure passage of the bill. Those changes appear to have significantly reduced the projected impact on federal liabilities, currently totaling $36.2 trillion.
Despite the revisions, political fallout persists. Elon Musk, who had been part of Trump’s economic advisory circle and pledged to help slash $2 trillion in federal spending, exited the effort last week amid frustration over limited progress.
Republican Senate Majority Leader John Thune addressed Musk’s criticisms on Wednesday, stating,
“We obviously respect everything that Elon did with DOGE. On this particular issue, we have a difference of opinion.”
The Senate, which holds a slim 53–47 Republican majority, is now deliberating on crafting its own version of the legislation. Internal party divisions have emerged, with some senators advocating for reductions to the bill’s $700 billion in Medicaid cuts, while others seek to eliminate Trump-backed tax benefits aimed at workers earning overtime, tips, or drawing Social Security retirement income.
The CBO’s revised projection may influence these negotiations as Senate Republicans attempt to reconcile policy differences and push the legislation closer to final passage.
