The IMF warns Trump’s tax bill will make debt reduction difficult in the medium term

The International Monetary Fund (IMF) warns that President Trump’s tax bill, which is now nearing final approval, could make it more difficult to reduce the US budget deficit and national debt in the coming years.

Speaking at a briefing in Washington, IMF spokesman Julie Kozak said the proposed law appears to violate efforts aimed at curbing federal debt in the medium term.

Kozack emphasized that starting deficit reductions earlier will provide a more progressive and manageable pathway to financial sustainability.

The IMF examines Trump’s bill and potential impact on the US economy

The IMF, which keeps an eye on the global economy, has repeatedly said that the US should reduce public borrowing over time, Kozak said.

To achieve this, the IMF advised the country to effectively reduce its debt compared to gross domestic product, which is widely used to assess debt sustainability.

The term “midterm” can be defined in many ways, but the Washington-based IMF often refers to five years of time. Today, the House voted for the Senate bill. 3.3 trillion dollars.

Meanwhile, the IMF is carefully considering the bill and its potential impact on the US economy, and Kozak said it will release new forecasts for the US and the global economy in an update to the global economic outlook this month.

The eyes of lawmakers see a financial strategy to make Trump’s 2017 income tax cuts permanent

As for that one big beautiful bill, the Congressional Budget Office (CBO) analysis revealed a decline in revenue of $4.5 trillion and spending by 2034 by $1.2 trillion compared to what current laws predict.

The Senate bill was estimated to save $507.6 billion over a decade, at the request of Republicans, compared to current policy baselines.

Party lawmakers are aiming to use financial strategies to make President Donald Trump’s 2017 income tax permanent, claiming that it costs nothing.

Regarding taxation, the Joint Committee estimated that the bill features a tax cut of $4.5 trillion.

Republicans use current policy baselines in ways that have never been done before to pass large-scale laws with a simple majority during the settlement process.

Bill costs are usually measured based on their impact on federal budgets under current law. However, Republicans intend to strike a new process by assuming that current policies will continue indefinitely.

Chuck Schumer warns of the impact of adding tens of trillions to debt

Fiscal conservatives have a major problem with the bill’s costs. The Senate, where lawmakers are demanding a variety of changes, faces hurdles in the Senate. Several spending cuts in that package were subsequently updated as it was determined not to meet Senate rules for settlement.

Meanwhile, current policy baselines will serve as a way for GOP lawmakers to game out rules that limit the bill’s financial impact, according to Democrats and some economists. They say they put the country’s economic future at risk.

Republicans can use their favorite budget tricks to make numbers look good on paper, said Senate minority leader Chuck Schumer. However, he warned that the actual impact of adding tens of trillions to debt cannot be ignored.

At this point, the price of the Senate bill exceeds the $2.8 trillion estimated by the Congressional Budget Office for the House version adopted last month. This calculation also explains the economic impact and higher interest rates due to the large debt levels.

The law includes many of Trump’s economic priorities. In addition to extending the 2017 tax cuts, it will also reduce multiple safety net programs such as Medicaid, Supplementary Nutrition Assistance Programs, or Food Stamps.