Senate Republicans push ahead with Trump’s tax cuts bill despite $3.3 trillion debt warning

However, the debate has led some international investors to consider diversifying away from US Treasury bonds.

Democrats are using the cost figures to try and sway conservative Republicans, hoping to create enough concern among them to oppose the bill. Senate Minority Leader Chuck Schumer criticized the bill, saying, “Republicans are using fake math and accounting tricks to hide the true cost. This bill will give tax breaks to billionaires while cutting vital programs like Medicaid and SNAP.”

The Senate recently advanced the bill in a 51-49 vote, opening debate on the 940-page legislation. This bill combines tax cuts with spending increases for military, border security, and immigration, along with the extension of 2017 tax cuts that Trump pushed through during his first term.

In a show of internal division, Senator Thom Tillis of North Carolina announced he would not seek re-election after facing pressure from Trump, who threatened to support a challenger in next year’s elections because of Tillis’s opposition to the bill. Trump described the bill’s progress as a “great victory” on social media, adding, “We will make it all up, times 10, with GROWTH.”

Republicans are aiming to pass the bill before the July 4 Independence Day holiday, although a more pressing deadline will come later this summer when Congress must raise the debt ceiling to avoid a default.

The bill is expected to face significant opposition in the House, where some Republicans are concerned about the bill’s cost and the potential cuts to Medicaid. Republicans can afford to lose no more than three votes in either chamber to pass the bill, which Democrats are united against.

Opposition over debt and borrowing

Some Republican members are also opposing the bill. Senator Rand Paul of Kentucky is against it because it would increase the federal borrowing limit by $5 trillion. The bill would extend Trump’s 2017 tax cuts, reduce taxes further, and increase military and border security spending.

The CBO’s cost estimate is being disputed by Senate Republicans, who plan to use a different method of calculation. This alternative approach does not include the cost of extending the 2017 tax cuts, which critics like Andrew Lautz from the Bipartisan Policy Center have called a “magic trick.” According to this calculation, the bill would appear to cost significantly less and even save $500 billion.