US Passes "Big and Beautiful" Tax Cut Bill, Risks Adding $3.3 Trillion to Deficit Over Decade

On July 4th, US President Donald Trump signed the "Big and Beautiful" tax and spending bill into law.

This legislation is a signature agenda item for Trump following his

return to the White House in early 2025. Its core focus is reducing

corporate tax burdens. Specific measures include extending the corporate and individual income tax cuts enacted during his first term in 2017,

as well as exempting tip and overtime wage income from taxation.

The legislative process is now complete. The US House of Representatives narrowly passed the bill on the afternoon of July 3rd by a vote of 218 to 214. This followed approval by the Senate on July 1st.

However, the "Big and Beautiful" Act has sparked widespread controversy

since its proposal. Critics argue it will lead to reductions in federal

assistance, increase long-term national debt, and provide significant tax benefits to the wealthy

and large corporations. The New York Times commented that the bill steers US finances onto a more perilous path. Preliminary analyses project the legislation will increase the US fiscal deficit by approximately $3.3

trillion over the next decade while reducing tax revenues for decades

to come. Such a massive fiscal gap could fundamentally alter the

established US fiscal trajectory and heighten market concerns over a

debt crisis.

Brian Riedl, a senior fellow at the Manhattan Institute, warned this

could be the most expensive piece of legislation since the 1960s. The

danger lies in Congress adding trillions in new borrowing on top of

already dramatically expanding deficits. Jason Furman, former Chair of

the Council of Economic Advisers under President Obama, also expressed

concern that the bill could weaken lawmakers' ability to control the

national debt.

Currently, the US national debt stands at a historic high of $36.2

trillion. US media analysis suggests the bill will further widen

structural deficits, stating that "America's growing debt burden will

penalize future generations."

The debt issue has already drawn international attention. Due to rising

government debt and interest payments, the international credit rating

agency Moody's Investors Service downgraded the US sovereign credit

rating in May. Moody's became the third major international agency,

following S&P and Fitch, to downgrade the US's top-tier sovereign credit rating.