US Bill Sparks Debate Over Debt Increase and Aid Cuts
The United States House of Representatives has narrowly passed a sweeping tax and spending bill, stirring controversy over its potential impact on the national debt and assistance programs for low-income individuals.
The “One, Big, Beautiful Bill Act,” approved by a slim margin of 215 to 214 votes, aims to extend corporate and individual tax cuts initiated in 2017. It also introduces new tax relief measures for tips, overtime pay, and car loan interest, while increasing defense spending and allocating more funds to combat illegal immigration.
Critics argue that the bill will significantly inflate the already record-high national debt and reduce essential resources for lower-income groups by cutting programs like Medicaid and food assistance. Dean Baker, a senior economist at the Center for Economic and Policy Research, commented that the bill “raises debt by around $3 trillion compared to the baseline, which assumed Trump’s 2017 tax cuts expire.” He also noted that it could result in approximately 13 million people losing access to Medicaid or health exchanges created by the Affordable Care Act.
Senate Minority Leader Chuck Schumer called the bill a “billionaire boondoggle” on social media, stating that it is “ugly” despite its name. Schumer warned that cutting funding for Medicaid and food assistance could lead to the closure of food relief stations and rural hospitals. He also criticized the elimination of clean energy incentives, suggesting it would harm the development of renewable energy sources like wind and solar.
According to a report by The Washington Post, nearly one-fifth of Americans rely on Medicaid for health insurance, and the House Republicans’ decision to cut nearly $800 billion from the program poses a significant political risk.
The bill has been sent to the Senate for consideration. If passed by both chambers, it will become law upon the president’s signature. The Congressional Budget Office estimates that the legislation would decrease resources for the lowest 10 percent of households while increasing them for the highest 10 percent.
Critics point out that while former President Donald Trump campaigned on helping working-class voters, this bill could negatively affect his own supporters. Darrell West, a senior fellow at the Brookings Institution, stated, “Many of the Medicaid funding cuts are going to hit Republican areas. Those folks rely on Medicaid, and large numbers will likely be harmed by the spending reductions.”
Despite including spending cuts, many budget groups and economists believe these measures are insufficient to offset the revenue losses from tax cuts and increased expenditures like defense spending. Maya MacGuineas, president of the Committee for a Responsible Federal Budget, said, “The House’s reconciliation framework has been an insult to fiscal responsibility, adding more than $3 trillion to the debt.”
The U.S. national debt has surpassed $36.2 trillion, according to the latest data from the Treasury Department. This alarming figure has led credit rating agency Moody’s to downgrade the U.S. sovereign credit rating, citing concerns over rising debt and increasing interest payments.
The financial markets have reacted with volatility. On Thursday, the yield on 30-year Treasury bonds briefly rose to 5.15 percent, signaling investor anxiety about the federal debt situation. Federal Reserve Governor Christopher Waller described the $2 trillion deficit as “unsustainable” and warned that investors might demand higher yields to hold U.S. assets if fiscal discipline is not restored.
As the Senate prepares to consider the bill, the nation watches closely to see how these potential changes could impact the economy and the lives of millions of Americans.
