While the markets scrutinize each gesture of the Fed and the American public debt crosses new records, Donald Trump relaunches a large tax project. Its proposal is to extend and amplify the tax cuts of 2017. Even if its supporters see it as a growth lever, economists fear a massive budgetary drift. This text, nicknamed “One Big Beautiful Bill”crystallizes the tensions between political ambition and financial viability.
In short
- Donald Trump relaunches an ambitious tax reform, aimed at extending and extending the tax cuts of his first mandate.
- According to the Congressional Budget Office (CBO), this “large and beautiful law” could widen the federal debt of $ 2,400 billion by 2034.
- The government defends the reform, ensuring that it will reduce the deficit by $ 1,600 billion thanks to savings and an increase in customs revenues.
- In the medium term, this reform could have profound consequences on American budgetary balances and on the dynamics of the crypto market.
Controversial tax reform: figures and first tensions
While tensions rise between Trump and Musk around the budget bill, the Congressal Budget Office (CBO) published This June 5 an assessment which immediately ignited the economic debate in Washington.
According to this independent body attached to the Congress, the tax bill brought by Donald Trump, presented as an extension of his policy of tax drop in the first mandate, could aggravate the public debt of $ 2,400 billion by 2034.
The text provides for the renewal, but also the expansion of several tax reductions, as well as cuts in social programs. “We prepare your tax cuts”,, poster The White House on its official website, illustrated with a solemn photo of the president.
The project, already adopted in the House of Representatives, is now awaiting a decisive vote in the Senate, hoped by the executive by July 4.
These announcements are involved in a particularly tense budgetary climate, aggravated by the degradation of the United States credit note by Moody's, which in May withdrawn Triple A. Federal debt now reaches $ 37,000 billion, a record level.
The CBO, while emphasizing the potential inflationary effect of the text, detailed the encrypted impacts of the reform:
- +2,400 billion dollars on federal debt by 2034, due to new tax cuts;
- $ 1,200 billion in expected expense discounts over ten years;
- $ 1,600 billion “Mandatory savings” advanced by the administration to partially compensate for costs;
- Significant cuts in Medicaid, likely to impact several million beneficiaries;
- Increased pressure on bond markets, especially on long -term securities.
These data are the subject of divergent interpretations. The White House claims that the reform would allow a historical reduction in the deficit, while CBO experts alert on an unwilling debt dynamic. Between divergent projections and institutional tensions, the fracture line is now clearly visible.
Internal fractures and sharp criticisms: the Trump camp is cracking
Beyond economic estimates, the bill divides up to the republican camp. Several conservative elected officials have publicly expressed their reluctance to the scale of the deficit that this reform could generate.
“I refuse to accept deficits of more than $ 2,000 billion such as the new standard”said the Wisconsin Republican Senator, Ron Johnson, on ABC News. For him, this text compromises the budgetary rigor that the party traditionally claims.
These dissident voices also point to the cups in Medicaid, likely to deprive millions of Americans of their health coverage, a politically sensitive subject.
The sling does not only come from the Senate. Elon Musk, so far close to the president and involved in the Department of Government Efficiency (DOGE), a working group that aims to reduce public spending by $ 1,000 billion, has violently criticized the project.
He described it as “Huge, scandalous and clientelist budgetary bill”going so far as to speak “Repagnant abomination”. At the same time, Stephen Miller, senior manager at the White House, tried to discredit the CBO by calling it as an organization “Left”and questioned the methodology used in its projections.
In the short term, this climate of uncertainty could affect the confidence of investors in American treasury bills like Beijing which is loose on the latter, which would accentuate the pressure on the dollar and interest rates. In the longer term, if the reform was adopted as it is, it could open the way to a new era of structural debt in the United States, with potential contagion effects on international markets, including cryptos, which often react to distrust of traditional monetary policies.
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