Washington (AP). President Donald Trump is facing the challenge of convincing Republican senators, global investors, voters and even Elon Musk, that he will not pass the federal government debtors with their Dollaroni tax benefits.
The answer has so far been skeptical of financial markets because it seems that Trump is unable to cut the deficit as promised.
“All this rhetoric to reduce trillion dollars costs, nothing has come-and tax account codifies it,” said Michael Strain, Director of Economic Policy Studies at the Right-wing Minister of Enterprise Group. “There is anxiety about the competence of the congress and this administration, so a whole bunch of money is added to the risk deficit.”
The White House brutally broke into all who expressed concern about the debt at the Trump Snowball, even though this was what did the first term after 2017. Tax reduction.
Karoline Leavitt, secretary of the White House press, opened his briefing on Thursday, saying he wants to “deny some false claims” about his tax reduction.
Leavitt stated that “the obviously wrong claim that” one, big, beautiful account “increases the deficit based on the Congress Budget Office and other points owners who use gloomy assumptions and historically were scary forecasting both Democrats and Republican administrations.”
However, he himself proposed that there would be no sufficient cost to compensate for his tax reduction, and the need to organize a Republican Congress coalition together.
“We have to get a lot of voices,” Trump said last week. – We can’t cut.
This allowed the administration to bet that economic growth could make deception, the belief that few outside the short orbit are promising.
Technical Billionaire Musk, who has been a part of Trump’s internal Sanctum so far, as a leader of the Government Efficiency Department, said CBS News: “I was disappointed with a huge expenditure account, frankly, which increases the budget deficit, not just reduced and damaged by the Doge team.”
Federal debt is increasing
Last month, the cost of reducing tax and reduction of costs would be added for more than $ 5 trillions over the next decade if they were all allowed to continue, according to the committee, responsible financial budget, fiscal standby groups.
Various parts of the legislation will expire to make the account price label look lower. The same tactic was used with Trump 2017. Tax reduction and it found this year’s dilemma, where many of the tax reduction in that previous package will be sunset next year unless the congress renews them.
But debt is now a much bigger problem than it was eight years ago. Investors require the Government to pay a larger bonus to maintain borrowing, as the total debt has exceeded $ 36.1 trillion. The ten -year Treasury banknote interest rate is about 4.5%, dramatically increased by about 2.5%. Tax reduction has become a law.
The White House Economic Advisory Council states that its policy will release so much rapid growth that the annual budget deficit will decrease in the overall economy and that the US government will be directed to a fiscal sustainable path.
The Council states that the economy will grow over the next four years in the next four years, with an annual average of about 3.2%, rather than the Congress Budget Bureau expected 1.9%, as much as $ 7.4 million. Jobs will be created or preserved. Many economists believe that the non -partisan CBO is the basic standard for policy assessment, although it does not make costs for actions taken by executive, such as Trump’s unilateral rates.
Council chairman Stephen Miran told reporters that the planned budget deficit will decrease when the White House forecast to grow in the tariff revenue. Tax reduction will increase money supply to investment, supply of employees and supply of domestic goods produced – all of which, based on Miran’s logic, would grow faster without creating new inflation pressure.
“I want to assure everyone that a deficit is very concerned about this administration,” Miran recently told reporters.
Russell Vought, director of the White House budget, told reporters the idea that the draft law “in any way is harmful to debts and defects is not true.”
Economists question
Many external economists expect additional debts to maintain higher interest rates and slowly overall economic growth as it will increase at home borrowing, car, business and even colleges training.
“It only increases problematic future policy makers,” said Brendan Duke, a former assistant budget and political priority center in the liberal group of thoughts. The Duke said that in 2028 Reduction of the draft tax reduction law, lawmakers will at the same time decide social security, Medicare and after tax reduction. “
Kent Smeters, director of the Penn Wharton Budget Faculty, said Trump’s economic growth forecasts are a “Fiction Literature.” He said the bill would encourage some employees to work fewer hours to get to Medicaid.
“I do not know any serious forecast, which has significantly increased their growth forecast for these legislation,” said Jason Furman, a professor at Harvard University, who was chairman of the Obama Administration’s Economic Advisory Council. “This is usually not the growth and competitiveness -oriented tax reduction.
The inability of the White House to calm the deficit concerns causes a political blow to the Trump, as the reduction of taxes approved by the palace is now moving to the Senate. Republican Ron Johnson from Wisconsin and Rand Paul from Kentucky both expressed concern about the possible increase in the deficit, as Johnson says the senator is enough to prevent the bill until the deficit is resolved.
“I think it is enough for us to stop the process until the president seriously selects the cost reduction and reduction deficit,” Johnson said CNN.
Trump Banking for Tariff’s Income to Help
The White House is also banking that tariff revenue will help to cover additional deficiencies, although the latest court decisions have caused doubt as to the brief legality that declared the economic emergency to determine high taxes.
When April Trump announced his almost universal rates, he specifically stated that his policy would earn enough new income to start paying national debt. His comments presented with the comments of assistants, including the Treasury Secretary Scott Bessent, that the annual budget deficit could be greater than half.
“Our queue for Prosper and when doing so, use trillions and trillions to reduce our taxes and pay our national debt, and everything will happen very quickly,” Trump said two months ago when he talked about his import taxes and encouraged legislators to accept a separate fee and expenses.
Trump’s administration is correct that growth can help reduce deficit pressure, but that is not enough to complete the task, according to new economists Douglas Elmendorf, Glenn Hubbard and Zachary Liscow studies.
Ernie Tedeschi, Director of Economics at Yale University Budget Laboratory, said the extra “growth does not even come to where we need to be.”
The government will need a $ 10 trillion deficit reduction over the next 10 years to stabilize debt, Tedeschi said. And while the White House says tax reduction will increase growth, most of the costs need to be saved by existing tax benefits, so it is unlikely to make a meaningful increase in the economy.
“It’s water,” said Tedeschi.