Trump Spending Plan Would Add $3.8 Trillion To U.S. Deficit, CBO Says

Senate Republicans are preparing to push President Donald Trump’s sweeping tax and spending plan through Congress by July 4, as the federal debt ceiling looms, Barron’s Daily reported.

The plan stops short of fulfilling Trump’s campaign promise to eliminate taxes on Social Security income.

The proposal, which narrowly passed the House, would make Trump’s 2017 tax cuts permanent, lowering the top income tax rate to 37% from 39.6% and increasing the state and local tax deduction cap to $40,000 for households earning under $500,000.

It would also eliminate taxes on tips, overtime pay, and car loan interest for individuals earning under $100,000, and create $1,000 “baby bonds” for children born between 2025 and 2029.

The plan stops short of fulfilling Trump’s campaign promise to eliminate taxes on Social Security income. It offers an additional $4,000 standard deduction for seniors aged 65 and older, temporarily available from 2025 through 2028.

The bill proposes nearly $700 billion in cuts to Medicaid through stricter work and eligibility rules; and reduces food assistance by $267 billion.

The Congressional Budget Office estimates the plan’s tax provisions alone would raise the federal deficit by $3.8 trillion between 2026 and 2034, driving bond yields higher on expectations of more federal borrowing.