Washington, D.C. – June 29, 2025
A recent analysis by the Congressional Budget Office (CBO) has revealed that the Senate version of the Republican-backed tax and spending bill—widely known as the “One Big Beautiful Bill”—would increase the U.S. federal deficit by approximately $3.3 trillion over the next ten years.
This projection adds even more pressure to an already controversial proposal that extends Trump-era tax cuts, boosts defense and immigration enforcement spending, and introduces new fiscal policies benefiting families and small businesses. The updated Senate version is notably more expensive than the House-passed version, which was estimated to raise the deficit by $2.4 trillion.
Why the Cost Is So High
Several changes made in the Senate contributed to the increased cost:
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Expanded Tax Breaks: The bill proposes permanently extending major individual tax cuts introduced in 2017. It also includes new deductions for tip income, overtime wages, and car loan interest, leading to substantial revenue losses.
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Less Aggressive Spending Cuts: Some of the deeper cuts proposed in the House version—such as reductions to Medicaid and federal aid programs—were softened or removed after internal Senate negotiations. This decreased the bill’s ability to offset its tax cuts.
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Interest Costs: As federal debt increases, so do interest payments on that debt. The CBO notes that hundreds of billions in added interest expenses contribute to the long-term financial burden.
Broader Impacts and Concerns
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Healthcare Consequences: Analysts warn that millions of Americans may lose access to Medicaid or subsidized health insurance by 2034 due to tightened eligibility and reduced funding.
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Fiscal Rule Violations: The Senate bill may fail to meet reconciliation rules that require no long-term deficit increases after ten years—meaning certain provisions could be stripped or face procedural challenges.
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Debt Ceiling Pressure: With the federal debt ceiling already strained, a $3.3 trillion increase in borrowing needs could reignite debates over fiscal responsibility.
Political Tensions
Even within the Republican Party, the bill is causing rifts:
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Conservative Skepticism: Fiscal conservatives are concerned about the ballooning deficit and warn that without stronger spending cuts, the bill undermines long-term stability.
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Moderate Resistance: Senators from states with high Medicaid usage or large low-income populations are uneasy about proposed benefit reductions, even in their revised form.
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Timing and Deadlines: Party leaders have set an ambitious goal of passing the bill before July 4, aiming to showcase legislative progress. But disagreements and procedural challenges may delay the timeline.
Final Outlook
As debate continues in the Senate, the future of the “One Big Beautiful Bill” hangs in the balance. The $3.3 trillion debt impact raises serious questions about fiscal sustainability and economic fairness. With political pressure building and public scrutiny rising, lawmakers must decide whether the bill’s promises outweigh its long-term cost.