Latest news with #CongressionalBudgetOffice
Yahoo
11 hours ago
- Business
- Yahoo
Trump's Disastrous Budget Bill Is Even More Expensive Than We Thought
Donald Trump's 'big, beautiful bill' would increase the total U.S. deficit by nearly $2.8 trillion over the next decade, according to a new analysis from the Congressional Budget Office. Previous estimates suggested that the massive spending bill would add $2.4 trillion to the national deficit over the next 10 years, but a 'dynamic' estimate published Tuesday takes into account how the legislation would affect the U.S. economy—and things got even more dire. The CBO projected that an increase in economic output would decrease the primary deficit by $85 billion over the 2025–2034 period, while also significantly boosting interest rates, which would push the federal debt to a whopping $441 billion. 'Incredible—CBO says the House-passed GOP bill pays for only 3.5% of itself,' Bobby Kogan, the senior director of federal budget policy at the Center for American Progress, wrote on X Tuesday. Despite previous damning reports, MAGA Republicans backing the bill have continued to claim that the CBO is biased, rather than make any concessions, and have claimed that the CBO's evaluations of the legislation's cost don't take the revenue from Trump's sweeping global tariffs into effect. In a letter to Democratic lawmakers earlier this month, the CBO projected that Trump's tariffs, as they were in mid-May, could decrease the deficit by $2.8 trillion—but said any projection came with some uncertainty, as Trump's tariffs are ever-vacillating. The newest analysis suggests that the costs will only go up after taking the economy into account. The CBO estimated that over the next decade, the legislation would affect the economy by increasing gross domestic product by an average of 0.5 percent, increasing the interest rates on 10-year Treasury notes by 14 basis points, and increasing inflation 'by a small amount' through 2030, but not afterward.
Forbes
13 hours ago
- Health
- Forbes
Survey Projects Medicaid Cuts Would Lead To Major Insurance Loss, Increase In Deaths
A new study published Tuesday by researchers from Harvard Medical School and Hunter College projects that the proposed House budget bill would increase the number of U.S. uninsured by 7.6 million due to Medicaid cuts included in it. The additional number of deaths annually was set at 16,642 by a middle estimate from the study. According to the researchers, limiting or eliminating Medicaid provider taxes, Medicaid per capita caps and work requirements for Medicaid enrollment would have the worst effects on both factors. Another analysis from the Congressional Budget Office meanwhile put the number of people who would become uninsured as a result of the bill at a very similar 7.7 million. The more highly publicized number of 13.7 million more uninsured is a combination of the effects of the One Big Beautiful Bill Act and other currently proposed and expiring legislation. While the massive legislation out of the House passed last month proved controversial, the Senate on Monday published a revision that could lead to even deeper cuts, as it proposes very steep reductions of provider taxes that exceed those of the House bill. Provider taxes refer to the taxes states levy on healthcare providers like nursing homes and hospitals, which are then used to fund Medicaid. As these tax incomes are matched with federal funds, limits or bans on these taxes are part of Medicare spending cuts. KFF notes that opponents of these taxes say that states shouldn't receive matches on taxes they took from health care providers, as this is seen as an inflation of Medicaid funds. Medicaid per capita caps are limits to how much of state funds spent on Medicaid can be matched by federal funds. As there currently is no limit, this could have a major effect on Medicaid funding depending on the level of the cap. As the growth of caps would also be determined over the upcoming 10 years, experts think the funding squeeze will get worse over time as limits are expected to rise only slowly. Finally, work requirements have been one of the most contentious proposals from the One Big Beautiful Bill Act. While Republicans have said the rule would only target those who could work, but decide not to, research from states that have implemented work requirements in the past shows that major hurdles to continuing coverage are the inability to find work and issues providing the relevant paperwork showing one has worked or volunteered for 80 hours a month in a format that has often been very frequent, complicated and fraught with technical difficulties. A Brooking Institution analysis found that the group of able-bodied, non-working Medicaid enrollees was actually quite small (around 300,000) and also not very cost-intensive. To actually achieve the desired saving through work requirements, the report concludes that Medicaid would actually need to disenroll a significant number of beneficiaries who are either working but cannot produce the necessary paperwork or are considered able-bodied as they are on the cups of eligability for sickness and disability benefits, which is the case for many enrollees with sustance abuse and mental health issues. Charted by Statista
Yahoo
a day ago
- Business
- Yahoo
Budget Director Claps Back At GOP Critics Of Tax Cut Cost Estimates: ‘I Am A Republican!'
WASHINGTON – The director of the Congressional Budget Office pushed back against Republican criticism in a rare interview on Monday. Republicans have claimed the CBO gets things wrong and that its cost estimates of GOP tax and spending cuts are biased in favor of Democrats because the budget office is run by Democrats. It's not. 'I am a Republican,' CBO Director Phillip Swagel said on CNBC. 'This is a nonpartisan organization, and we work for the entire Congress.' It's unusual for a CBO director to come out and defend his agency against critics, but the budget office has been the subject of an unusual amount of bad-faith criticism over its analysis of Republicans' so-called Big Beautiful Bill. Just doing its job, the CBO has pointed out that the tax cuts in the bill are way bigger than the spending cuts, meaning the legislation would enlarge federal budget deficits and add to the national debt. That's embarrassing for Republicans, since they style themselves as champions of fiscal responsibility and haters of debt, so they've been relentlessly attacking the messenger. 'They are historically totally unreliable,' House Speaker Mike Johnson (R-La.) said earlier this month. 'It's run by Democrats. Eighty-four percent of the number crunchers over there are donors to big Democrats. They don't have our best interests in mind, and they've always been off.' White House press secretary Karoline Leavitt also claimed this month that the CBO's staffers are Democratic donors, while President Donald Trump has said the office is controlled by Democrats. It's not clear where Johnson came up with his 84% figure. A Washington Post analysis of federal campaign spending data showed that only 16 people who'd worked for the CBO have made political donations since 2015, all to Democrats. The agency has more than 270 employees, however, and Swagel, who was appointed to his position on a bipartisan basis, once donated $1,000 to a Republican candidate for governor. Republicans' main arguments against the CBO's credibility have been that it fails to account for how economic growth resulting from tax cuts will increase tax receipts, offsetting revenue loss from the cuts, and that the CBO underestimated revenue following Republican tax cuts in 2017. Swagel pointed out Monday that its revenue forecast was correct for 2018 and 2019, and that the 2020 coronavirus pandemic sparked higher government spending and inflation. 'There's very high inflation starting in March of 2021, and that inflated revenues as well,' Swagel said. He also pointed to higher immigration and capital gains revenue resulting from the Federal Reserve's efforts to boost asset prices. He suggested it was weird to fault CBO for not foreseeing cataclysmic global events as part of its cost estimate for a tax bill. 'There are things that the CBO certainly did not predict,' he said. As for the economic feedback on the tax cuts, Swagel said this week the CBO will put out a so-called dynamic score, a cost estimate that accounts for how the bill's macroeconomic effects could juice revenue, though it will likely still disappoint Republicans. Even the conservative Tax Foundation has found that a dynamic score doesn't erase the giant gap between spending and revenue envisioned by Republicans' bill. The CBO has found that the One Big Beautiful Bill Act, which uses $1 trillion in Medicaid and food aid cuts to partially finance nearly $4 trillion in tax cuts,would add $2.4 trillion to the deficit over a decade and that the tax and spending cuts would favor households with higher incomes. Swagel first defended himself from the barrage of Republican criticism earlier this month in an interview with The Wall Street Journal. 'The attacks are coming from so many directions and the kind of misleading talking points have been picked up so widely,' he said. A handful of Republicans, including former White House adviser Elon Musk, have faulted their colleagues for supporting legislation that would worsen the government's fiscal situation. Rep. Thomas Massie (R-Ky.), who voted against the House version of the One Big Beautiful Bill Act last month, told HuffPost he challenged his colleagues to remove Swagel from his position if they thought he was so bad. 'We can go up there today and pass a resolution and remove him from his post,' Massie said. 'If you all are upset and think he's made that big of a math error, he's obviously in the wrong job, let's take him out.' There's been no effort by Republicans to remove Swagel. In February, before the GOP legislation had taken shape, Johnson had trumpeted the CBO's long-term analysis of the country's fiscal situation, in which the office reported annual deficits would reach $2.6 trillion if Congress didn't take action. 'At a time of soaring deficits, high inflation, and sky-rocketing national debt, the nonpartisan Congressional Budget Office's new economic projections confirm the hard truths about the looming fiscal challenges facing our nation,' Johnson said at the time. Trump's Big Bill Will Cut Taxes By $3.7T And Add $2.4T To Deficit, Budget Office Says Senate GOP Strips Contempt Provision From Tax Bill — But Still Lets Trump Be King After Voting For Trillions In Debt, House Republicans Approve A $9 Billion Cut
Time Magazine
a day ago
- Politics
- Time Magazine
Senator Markey: Trump's ‘Golden Dome' is Fool's Gold
Announced with characteristic bravado and little grounding in reality, President Donald Trump's so-called " Golden Dome for America" is the latest reincarnation of President Ronald Reagan's ' Star Wars ' fantasy: a constellation of space-based missile interceptors supposedly capable of stopping a nuclear strike from any adversary. President Trump suggests it could protect the U.S. from a nuclear attack. In truth, it will make us poorer, less secure, and more isolated. It's a gold-plated boondoggle that will enrich defense contractors and ignite a new nuclear arms race. Let's be clear: Golden Dome is a trillion-dollar mistake in the making. On Jan. 27, Trump issued an executive order about continuing Reagan's work by developing a 'missile defense shield.' In response, the nonpartisan Congressional Budget Office issued estimates indicating that even a limited system could cost as much as $542 billion over the next 20 years. And a system to defend against hundreds of missiles from Russia or China would cost much more. My Republican colleague Senator Tim Sheehy from Montana said the quiet part out loud: the system 'will likely cost in the trillions if, and when, Golden Dome is completed.' President Trump has since pitched his Golden Dome as a $175 billion project and has requested an initial $25 billion. But not only does this math not add up, experts say Trump's 'Golden Dome' would be both ineffective and alarmingly easy to defeat. Space-based interceptors would be sitting ducks for anti-satellite weapons. They'd be no match for adversaries who could overwhelm the system by simply building more—and much cheaper—missiles. In fact, Golden Dome would likely push Russia and China to do exactly that: expand their arsenals, reject arms control treaties, and plunge the world into a terrifying new arms race. So instead of making America safer, we'd be inviting catastrophe. And who benefits? Not the American people. Not our troops. Not our allies. The real winners are defense contractors. SpaceX, led by Elon Musk, is reportedly a frontrunner for Golden Dome contracts. Meanwhile, the Pentagon is gutting its independent testing office—the very entity that tells us whether these high-priced systems actually work. The office was reportedly targeted specifically to limit scrutiny over Golden Dome, because, according to one official, the program is 'needed to be successful for Mr. Trump.' That's not national security. That's corruption, pure and simple. History should have taught us this lesson. The original Star Wars program burned through $400 billion without producing an effective defense. Forty years later, despite decades of research, technology still can't deliver on the fantasy of a perfect missile shield. Golden Dome is just Star Wars with a shinier name—and a much higher price tag. What's worse, it violates decades of bipartisan policy. Since 1999, Congress has agreed that U.S. missile defenses should only be designed to stop limited threats—like those from North Korea—not the much larger nuclear arsenals of major powers like Russia and China. Golden Dome blows up that carefully drawn line with no plan, no strategy, and no regard for the consequences. Golden Dome is science fiction, not effective missile defense. Systems like Israel's Iron Dome have proven useful against short-range, conventional rockets. But deploying weapons in space to counter hundreds of strategic nuclear missiles is not only impractical—it's dangerous. And no, space-based weapons will not protect us from the types of small drones Ukraine used in its recent Spider's Web attack on Russia. Instead of chasing an impossible dream that risks bankrupting us and destabilizing the world, we should be investing in what actually works: diplomacy, arms control, and smart defense. President Trump says his Golden Dome will 'complete the job' Reagan started. What it will really do is bury arms control, balloon the deficit, and boost the bottom lines of billionaires like Musk. A Golden Dome would be much more effective at wasting taxpayer dollars than countering missile attacks. Let's not trade real security for a golden illusion. We must put a stop to this reckless plan—before it launches America into the next unwinnable nuclear arms race.
Yahoo
a day ago
- Business
- Yahoo
What is generational wealth, and how do you build it?
Leaving a financial legacy to your kids can give them a significant leg up in life. Data from the Congressional Budget Office shows that 28% of families in the top third of the income distribution received an inheritance, compared to only 17% of those in the bottom third. Building generational wealth may sound like something reserved for the ultra-rich. But the truth is, generational wealth may be more accessible than you think. Whether you want to help your kids pay for college, give them money for their first house, or leave them the family business when you retire, generational wealth can help your children get off on the right financial foot. Passing down generational wealth may not require an enormous net worth, but it does involve strategic planning. Read on to learn more about generational wealth and how to build it. This embedded content is not available in your region. Generational wealth includes assets, such as cash, property, investments, and businesses, that are passed down from one generation to the next. You can leave generational wealth in the form of an inheritance — for example, investments or property — transferring the wealth when you die. But you can also build and pass on generational wealth during your life. For example, parents may build generational wealth by paying for their children's higher education, helping them purchase a home, or giving them a financial gift when they get married. Generational wealth is important because it gives younger generations a financial head start. In extreme circumstances, it can make the difference between living debt-free, owning a home, or simply having a financial safety net — or not. Read more: What happens to a bank account when somebody dies? If building generational wealth is one of your financial goals, you'll need to establish your own financial foundation first. This can mean paying off high-interest debt, creating an emergency fund, and saving for retirement. You may also want to save for goals of your own, such as traveling, buying a home, or starting a business. Once you've got these basics covered, you can shift your focus to the next generation. The following strategies can help you build generational wealth over the decades. Investing is a key wealth-building strategy for reaching any long-term goal, including building generational wealth. Investing allows you to buy assets, such as stocks, bonds, mutual funds, and real estate, that will generate income or grow in value over time. Investing typically allows you to build meaningful wealth much faster than you would by saving money in a bank account. A financial advisor can help you create an investment strategy tailored to your goals and circumstances, but a few tips can help almost anyone: Start investing as early as possible to maximize the power of compound interest. When possible, invest in tax-advantaged accounts. Minimize investment fees, which cut into your returns. Diversify your investment portfolio to lower your risk of major financial losses. According to the Urban Institute, homeownership is the primary wealth-building tool in the U.S., especially for Black families. This makes it a common goal for those who want to pass on generational wealth. Real estate typically appreciates over time, which can make it an especially valuable asset to pass down to your children. Whether you want to buy a primary residence, invest in rental properties, or both, owning real estate can be a useful tool in building generational wealth. Starting a business is one way to grow your own income exponentially, but it's also a valuable generational wealth-building tool. According to the U.S. Small Business Administration (SBA), business equity was the second-largest share of nonfinancial assets in 2019 (after homeownership). Data from the SBA also shows that, on average, self-employed people are wealthier than non-self-employed people. Starting a business has the potential to help you improve your cash flow and build a wealth-building entity to pass down to your kids, creating a major financial advantage for your family. Not only that, but the sale of a business can generate significant income for future generations. Like generational wealth, you may associate estate planning with high-net-worth individuals. But it's a key financial step for anyone who wants to control what happens to their assets after they pass away. Estate planning helps you transfer your wealth according to your wishes after you die. When done well, it helps your heirs minimize unnecessary taxes, other financial losses, and time spent in probate court. To create an estate plan, start by taking inventory of your assets and choosing beneficiaries for each. You'll then need to create a will, which makes up the core of your estate plan. While you can do this yourself, it may be worth meeting with a financial advisor or estate planning attorney to make sure your plan is legally sound. After creating an estate plan, review it every year to make any necessary updates to your assets, beneficiaries, or wishes. Read more: What is wealth management, and is it right for you? If your goal is to make your wealth last for generations to come, financial education should be a focus within your family. Teaching your kids the basic skills of money management, budgeting, and saving money can help them build a foundation of financial responsibility. And going a step further by teaching them how to invest, start a business, or pass down their money can help them continue to build and share their wealth as they age.
