President Trump’s ‘One, Big, Beautiful Bill Act’ was approved with 215 votes in favor and 214 against.

On Thursday, the U.S. House of Representatives has narrowly passed a large-scale tax and spending bill, which have drawn strong outcry from observers and the public for what they say will be heightening the already record-high national debt, and depriving lower income people the scarce resources they enjoy by cutting some programs such as Medicaid.

RELATED:

Trump Renews Attacks on Harvard Over Student Data Dispute

U.S. President Donald Trump’s “One, Big, Beautiful Bill Act” was with 215 votes in favor and 214 against. The bill will extend the corporate and individual tax cuts passed by Trump during his first term in 2017, provide new tax relief for tips, overtime and car loans, increase defense spending, and allocate more funds to combat illegal immigration, fulfilling Trump’s campaign promises on tax cuts and other issues.

The bill will also repeal several clean energy incentives promoted by former President Joe Biden and raise the eligibility thresholds for Medicaid and food assistance for low-income groups, in an attempt to reduce federal spending.

Dean Baker, a senior economist at the Center for Economic and Policy Research, told Xinhua the bill “raises debt by around US$3 trillion compared to the baseline, which assumed Trump’s 2017 tax cuts expire.” It will also throw around 13 million people off Medicaid or the exchanges created by the Affordable Care Act, he noted.

Senate Minority Leader and Democrat Chuck Schumer said on social media that the so-called “big, beautiful” tax cut bill passed by House Republicans is “ugly,” calling it a “billionaire boondoggle.”

Schumer said that cutting funding for Medicaid and food assistance would lead to the closure of food relief stations and rural hospitals. Additionally, Schumer noted that “hard right” Republicans were beholden to oil and gas companies, and the policies to eliminate green energy incentives would harm the development of renewable energy such as wind and solar.

The House Republicans’ decision to cut nearly US$800 billion from the Medicaid program in this massive bill poses a huge political risk, as the program is very popular and nearly one-fifth of Americans rely on it for health insurance, according to The Washington Post.

The bill has been sent to the Senate for consideration. If passed by both chambers, it will be signed into law by the president. The Congressional Budget Office estimates that if the bill becomes law, overall resources for the lowest 10 percent of households will decrease, while resources for the highest 10 percent of households will increase.

Trump campaigned on helping his base — working-class voters who have been hit hard by the record-high inflation that took hold during the previous administration. But critics said the bill will put a dent in the wallets of Trump’s supporters.

“Many of the Medicaid funding cuts are going to hit hard in Republican areas. Those folks rely on Medicaid and large numbers likely will be harmed by the spending reductions. That will be tough for Trump because it will put him in a bad position with people who voted for him,” Brookings Institution Senior Fellow Darrell West said.

Although the bill includes spending cuts, budget groups and economists generally believe these measures will be insufficient to effectively offset the revenue losses caused by tax cuts and other expenditures, such as defense spending. The bill is expected to significantly raise the federal debt.

“The House’s reconciliation framework has been an insult to fiscal responsibility, adding more than 3 trillion dollars to the debt and setting up a massive cliff of tax cuts and spending expirations that could cost trillions more to extend,” Maya MacGuineas, president of the Committee for a Responsible Federal Budget, said in a statement earlier this week.

According to the latest data from the U.S. Treasury Department, the country’s national debt has surpassed US$36.2 trillion. The status of the U.S. national debt has already alarmed the market, prompting the international credit rating agency Moody’s to recently downgrade the U.S. sovereign credit rating to Aa1 from Aaa, citing concerns over rising national debt and increasing interest payments.

The U.S. Treasury market has experienced continued volatility, reflecting widespread concerns about the federal debt. On Thursday, the yield on 30-year Treasury bonds briefly rose to 5.15 percent, an increase of about 0.7 percentage points from the April low, highlighting investor anxiety about the U.S. federal debt situation and its financial outlook.

In an interview with Fox Business, Federal Reserve Governor Christopher Waller said the U.S. deficit has reached US$2 trillion in recent years, and this situation is clearly “unsustainable.” He warned that financial markets expect the U.S. government to adhere more to “fiscal discipline,” and investors may continue to demand higher yields in order to hold U.S. assets.

teleSUR/ JF

Source: Xinhua

IN THIS ARTICLE