Opini | Keburukan faktur ‘besar dan indah’, dalam daftar

Mr. Rattner was counselor to the Treasury secretary in the Obama administration.

July 3, 2025

With unusual speed, and despite an armada of controversial provisions, Congress has birthed a sprawling, nearly 900-page policy bill stuffed with hundreds of changes that will bestow trillions of dollars in tax cuts on the rich and special interests while slicing deeply into social programs relied on by millions of Americans.

Much like President Trump’s 2017 tax bill, it will add substantially to the deficit and the debt without providing any meaningful impetus to economic growth. But this time, it will be much worse. This legislation will pile about $3 trillion onto the deficit over the next 10 years, double the amount its predecessor was expected to generate. And it lacks provisions that could significantly boost economic growth.

Its signature and most expensive components make a slew of individual tax cuts — cuts instituted in 2017 that primarily benefit wealthy Americans — permanent. To help pay for them, the bill makes student loans more expensive, slashes incentives for clean energy and reduces funding for and access to Medicaid. Missing yet again, despite Mr. Trump’s promises, is any effort to raise the tax rate on carried interest earnings, a major win for private equity. But the bill does deliver on one of his campaign promises: serving up tax deductions (albeit not permanently) for overtime pay, tips, car loan interest and for seniors.

The biggest and most damaging cuts are those to Medicaid — cuts that got only more draconian as the bill moved from the House to the Senate. About a third of the savings come from the imposition of a work requirement on recipients. While Republicans claim they are only attacking waste, fraud and abuse, the resulting paperwork to comply with the requirement is expected to daunt many and result in lost coverage. All told, these changes will cost over 10 million Americans their health care, according to the Congressional Budget Office.

The legislation largely guts the Biden administration’s student debt repayment program that offered lower- and middle-income families generous terms. As a result, average monthly obligations for borrowers will surge, with a typical loan recipient with a college degree and an annual income of $80,300 paying an additional $2,929 per year.

The bill rolls back many of the clean energy tax incentives and investments created by the 2022 Inflation Reduction Act, throwing a major roadblock in the way of combating climate change. Since the passage of the act, the United States has been experiencing a boom in clean energy investments, with $321 billion spent and $522 billion more on the way. Many of these projects will very likely be abandoned. Most Republican legislators are supporting this despite the fact that a vast majority of these investments have taken place in Republican congressional districts, where permitting is generally easier and weather can be more conducive to solar and wind power generation.

The package adds to our national debt in a way that dwarfs any of the other packages passed in the eight years since Mr. Trump first took office. His signature 2017 tax cut added a relatively modest $1.5 trillion to the 10-year deficit projection, but it did so by scheduling some of its provisions to expire after eight years, thereby setting the stage for the current legislation, which makes those changes permanent. (The bill uses the same gimmick with some of its tax breaks to keep costs down.)

The resulting deficit puts our economy in a perilous place. Over the past 50 years, federal spending as a percentage of gross domestic product averaged 21.1 percent. But since ballooning during the Covid-19 pandemic, spending has remained stubbornly above this average. With tax increases politically off the table, this means larger deficits.

The bill is just the latest, and worst, example of a policy followed by both Republicans and Democrats in recent years: Take the easy way out and let deficits climb. The costs of Medicare and Medicaid are rising relentlessly and are now just over 5 percent of G.D.P., compared with 1.2 percent in 1975. Social Security’s outlays have also grown. And now, because of increasing debt and higher interest rates, the cost of servicing the national debt has begun to soar. Allowing the 2017 tax cuts to expire, which effectively would have raised taxes on 62 percent of Americans, could have been highly unpopular. But it was also necessary.

Instead of growing to $2.7 trillion in 2035 from $1.9 trillion this year, this legislation will boost the deficit to $3.08 trillion a decade from now, according to one estimate. Exclude the gimmick of scheduling certain tax breaks to expire — an unlikely event, as demonstrated by Congress’s unwillingness to let the 2017 cuts fade — and the projected deficit climbs to $3.21 trillion. This puts total publicly held national debt at as much as 130 percent of G.D.P., materially higher than at any other time in our nation’s history. These higher deficits put upward pressure on interest rates, weakening the economy, and even more important, create an enormous debt burden for future generations to deal with.

The legislation will be far more beneficial for the wealthiest, at the expense of those farther down the economic ladder. The bill makes permanent a regime in which the richest fifth of American households — those with annual incomes of $120,390 and above — will get an average benefit of 2.3 percent of their income, or $6,055. In contrast, the fifth of Americans with the least wealth will suffer an estimated loss of $560, largely because of the effect of the cuts to Medicaid and food stamps.

As for the impact of the legislation on economic growth, the White House is operating in its own universe. Private forecasters generally expect only a small bump to gross domestic product, with the Budget Lab at Yale University projecting even less growth. The White House Council of Economic Advisers, on the other hand, asserts that growth could reach 4.9 percent in 2028, multiples higher than other estimates.

In my 50 years of following tax and budget policy, I don’t believe I have seen another piece of legislation that would have such broad and deep impacts on virtually every American. No important social welfare program like Medicaid has ever been rolled back to this extent. The tax changes will also exacerbate income inequality. It is a result that should embarrass the Republicans — and may well come back to haunt them in 2026 and 2028.