Trump tax bill would add $550 billion in interest payments to national debt

President Donald Trump’s massive tax and immigration proposal would lead the federal government to spend hundreds of billions of dollars extra paying new interest on the soaring national debt, congressional bookkeepers reported Thursday, as lawmakers come to grips with the gargantuan cost of the GOP’s policy agenda.

The Congressional Budget Office projected that new borrowing the legislation would force the government to make would also lead to $550 billion more in interest payments. That would raise the overall price tag of the measure, titled the One Big Beautiful Bill Act, to $3 trillion over the next decade.

The national debt already exceeds $36.2 trillion, and even without the expensive new legislation, debt could top 250% of the U.S.’s annual economic output by 2055 if annual agency spending and federal revenue remain at historical averages, CBO reported last month.

The hefty deficit hit has sparked a rift among Republicans – and with Trump’s former spending czar. Billionaire Elon Musk, until last week the head of the cost-cutting U.S. DOGE Service, this week called the legislation “a disgusting abomination” that would burden the country with “crushingly unsustainable debt.” He has continued to bash the bill dozens of times a day since Tuesday.

“It more than defeats all the cost savings achieved by the @DOGE team at great personal cost and risk,” he wrote on his X social media site.

After members of the tax-writing Senate Finance Committee met with Trump on Wednesday at the White House, some lawmakers began to soften their opposition to the bill.

“We’re a long ways from making the deficit curve bend down,” said Sen. Ron Johnson, R-Wis., who has raised concerns about the legislation’s cost.

He said more significant deficit reduction could come in subsequent legislation, though that could be challenging, as conservatives spend political capital on the heart of Trump’s agenda.

Trump and Republicans’ bill seeks to extend the massive 2017 tax cuts from the president’s first term, as well as making good on new campaign promises – including no taxes on tips and overtime wages – and spending hundreds of billions of dollars on the White House’s mass deportation drive and defense priorities.

To offset the cost, Republicans are considering more than $1.2 trillion in cuts to Medicaid and SNAP, the Supplemental Nutrition Assistance Program formerly known as food stamps, massive changes to President Joe Biden’s student loan programs, and phaseouts for corporate incentives to develop green energy and electric vehicles that were established under Biden’s 2022 Inflation Reduction Act.

“Republicans can’t ignore the trillions of dollars this bill adds to the deficit, and they can’t ignore the interest that comes along with the massive debt they are creating. It is fiscally irresponsible,” said Sen. Jeff Merkley of Oregon, the top Democrat on the Budget Committee, who requested the CBO report.

The bill narrowly passed the House last month over the objections of deficit hawks, many of whom ultimately supported the measure. The Senate is considering the bill now, but members are locked in negotiations over the legislation’s cost.

Any change to the legislation, though, could endanger its future when it returns to the House for final approval. The GOP has a narrower majority there than in the Senate, and blue-state Republicans who have demanded larger deductions for state and local taxes – one of the most expensive policies in the bill – hold tremendous sway.

If Trump and Republican leaders in Congress alter the bill to placate the moderates, they risk losing the support of budget hawks. And if they increase cost-cutting measures to satisfy hard-liners, blue-state Republicans have threatened to sink the legislation.

The White House and some congressional GOP leaders have tried to shrug off deficit concerns, stating without evidence that the CBO’s projections are flawed and that the nonpartisan bookkeeper is aligned with liberals. CBO Director Phillip Swagel served in the George W. Bush administration as assistant treasury secretary for economic policy.

“It will improve the deficit. It will help us deal with debt. It has historic levels of mandatory savings. The fact that the Congressional Budget Office doesn’t agree is not particularly new,” White House budget director Russell Vought told reporters Wednesday.