US senate budget plan adds $3.3T to deficit, cuts healthcare

By Al Mayadeen English
Source: Agencies
30 Jun 2025 14:07

Lawmakers clash over projections as the Senate’s budget bill faces criticism for its fiscal and social impact, including a rise in the uninsured by 2034.

Listen

US President Donald Trump speaks with reporters upon arriving at Morristown Municipal Airport in Morristown, New Jersey, on June 20, 2025. (AP)

The Senate’s version of the budget reconciliation bill is under growing scrutiny after the Congressional Budget Office (CBO) projected it would add nearly $3.3 trillion to federal deficits over the next decade, substantially more than the $2.8 trillion deficit increase estimated for the House-passed version in May.

The projection has intensified partisan debate in Washington. While the White House maintains that the legislation would ultimately "reduce deficits," that claim contrasts with the CBO analysis and other independent forecasts. Republican lawmakers have challenged the CBO's assumptions, asserting that the long-term fiscal impact may be overstated.

Despite the disputes, the new figures suggest the Senate’s approach would have a broader fiscal footprint, further complicating efforts to reconcile the two versions of the bill.

Beyond its fiscal implications, the Senate bill also proposes major changes to Medicaid and the Affordable Care Act. According to the CBO, these adjustments would result in nearly 12 million more uninsured Americans by 2034, exceeding the 10.8 million additional uninsured projected under the House’s version of the legislation.

The sharp difference in projected health coverage outcomes underscores the stakes of the ongoing negotiations, as lawmakers face mounting pressure to address both the federal deficit and the healthcare needs of millions.

Musk blasts Trump’s spending bill

Elon Musk issued on Sunday a sharp criticism of Trump’s latest tax and spending proposal, labeling the Senate version of the legislation as "utterly insane and destructive."

"The latest Senate draft bill will destroy millions of jobs in America and cause immense strategic harm to our country!" the Tesla and SpaceX CEO posted on Saturday. "Utterly insane and destructive," he reiterated. "It gives handouts to industries of the past while severely damaging industries of the future."

Musk warned that passing the bill would constitute "political suicide for the Republican Party."

This marks a continuation of a growing rift between Musk and the Trump administration, particularly after Musk stepped down from his role as head of the Department of Government Efficiency (DOGE).

His latest comments come just as the Senate opens debate on the nearly 1,000-page bill.

GOP faces split over tax and spending proposal

Earlier in the month, Musk had already denounced the House version of the spending legislation, calling it a "disgusting abomination", adding, "Shame on those who voted for it: you know you did wrong. You know it."

A long-time Republican donor and influential voice in conservative circles, Musk expanded his public pushback on Saturday by amplifying criticism from energy expert Jesse Jenkins.

Jenkins noted that the energy provisions in the Republicans’ proposal were widely opposed by key industry groups, including automakers, electric utilities, and manufacturers. Musk responded, "Good question. Who?"

Despite opposition, Senate Republicans moved forward late Saturday, advancing the bill with a 51-49 procedural vote. Two GOP senators opposed the motion, while several others were persuaded through last-minute negotiations led by Vice President JD Vance.

The proposed bill, a central element of Trump’s legislative agenda, aims to extend the 2017 tax cuts and introduce new breaks such as exempting tips from taxation.

It also allocates increased funding for national security and immigration enforcement, including mass deportation efforts. However, the legislation has stirred internal conflict among Republicans. Some senators have raised concerns about cuts to Medicaid and food stamp programs, while fiscal conservatives are also alarmed about the national debt, which currently stands at $36.2 trillion.

Senate moves forward despite mounting criticism

The Congressional Budget Office (CBO) previously estimated that the House version of the bill would add trillions to the federal debt, eliminate healthcare for nearly 11 million people, and remove food assistance for at least 3 million. The Senate version is expected to make even deeper reductions, though the CBO has not yet released a full analysis.

According to the CBO, under the House plan, the wealthiest Americans would see an average tax cut of about $12,000, while the poorest would lose around $1,600 in benefits.

Democrats have uniformly opposed the measure. Senate Majority Leader Chuck Schumer demanded that the full text be read aloud before debate, accusing Republicans of rushing through a "radical bill".

Trump continues to press for quick passage of the bill ahead of the July 4 deadline, although reports suggest he may be sending mixed signals privately. Meanwhile, the internal GOP divisions and public rebukes, including Elon Musk's criticism of the Trump spending bill, signal a rocky path ahead for the legislation.