Breaking down Trump’s ‘Big Beautiful Bill’ and its impact on the deficit and national debt

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• Amna Nawaz:

  From how the debt works to the debate over it right now.

  To look at what President Trump's budget bill, which he calls the big, beautiful bill, means for the U.S. debt, congressional correspondent Lisa Desjardins joins us now from the super screen to explain it all.

  So, Lisa, if this passes, it would be the largest bill in dollar terms in U.S. history. Just kick us off with what the money involved is here.

• Lisa Desjardins:

  Right.

  For Republicans, this is part of answering what they see as a potential crisis, the end of the Trump tax cuts. The question is, is this something that adds to a different potential crisis, an American debt crisis?

  So let's look at the money flow in this bill, and let's start with the tax cuts. First of all, Republicans are in fact adding some new tax cuts here. Those are the no taxes on tips, overtime, some benefits for seniors. These tax cuts are significant. However, they pale in comparison to the biggest cost in the bill. That is extending those Trump tax cuts.

  All together, the Congressional Budget Office says, the tax cuts in this bill add up to $3.7 trillion. That's good news, in that that's money taxpayers could keep, but it's also bad news because it comes out of the federal budget and potentially could add to deficits.

  So did Republicans pay for this in the bill? According to CBO, no. The money saved in this bill from the cuts, the spending cuts, is $1.3 trillion. Now, this is a significant, historically large number of spending cuts, health care cuts, we have been talking about Medicaid, green energy, student loans. This is a big number, but it is much smaller than the amount being spent here.

  So, overall, Congressional Budget Office says, this bill would add $2.4 trillion to the deficit, and that is even before you consider interest costs.

• Amna Nawaz:

  So, Lisa, Republicans argue that economic growth will help to pay for some of this, which is harder to forecast. But based on what we do know right now, what's their argument for why this won't add to the deficit?

• Lisa Desjardins:

  Right. It's important, because you're going to be hearing this from that.

  Republicans say, look at this biggest cost here, the extension of the Trump tax cuts. They say, because these are the current tax rates, they argue it shouldn't be counted against the cost of the bill. So let's just go down this road with them for a second. If you take out the cost of extending the tax cuts, then indeed the math flips, and the money they're saving in this bill is more than what they're spending.

  So it would in fact be good for the deficit. However, this ignores the reality that this bill would in fact take all of this revenue out of the federal budget. It is significant in dollar terms, but this is also significant politically. And I'm going to explain to you why.

  Republicans want to pass this bill through something called budget reconciliation. To do that, they have to meet certain rules. One of them, they need a majority vote. That's what they want to get this through. But they also have to have a budget effect. That's clearly in here. But, also one of the rules is they can't increase the deficit over 10 years.

  So this argument that you take out the current Trump tax cuts is important politically as well.

• Amna Nawaz:

  Lisa, we saw Paul Solman there take us through a big picture look at the debt. But what exactly does the trajectory look like right now? And also what does it look like if this megabill passes?

• Lisa Desjardins:

  This is so important. Our debt right now is soaring. This is where we are currently. Right now, about 100 percent of GDP is where our debt is. And this is sort of the rough trajectory, going up to 156 percent if we stay on our current track, in the middle of this century.

  Here's what this bill would do, according to the Congressional Budget Office. It would make this curve even more steep for the first few years. And then it would flatten out. Essentially, it just increases the debt curve, moves it up, so we have an even higher percentage of debt-to-GDP.

• Amna Nawaz:

  Lisa, all the efforts we have seen from the president and Elon Musk to cut the size of government and government spending, how do those compare with the size of the deficit?

• Lisa Desjardins:

  Right. It's so important. We have seen so much about this idea of cutting spending, cutting federal workers.

  Let's talk about what it actually means relatively. So here is our current deficit. I took the liberty of taking the $1.9 trillion, which is this year's deficit, and making it sort of visual so that each of these dots represents $10 billion.

  Elon Musk and DOGE have said so far that they have saved $180 billion. Now, we know this is not verified, and we know some of it is actually unproven. But let's just go ahead and imagine that they did actually save $180 billion. Where does that compare? Look at that. It is just this much out of the entire deficit.

  They have also been firing federal workers. Now, let's talk about if you fired every single federal worker. It'd be about $270 billion that you would save. What does that get you? Just this much.

  One last thing. There's a rescissions package of immediate cuts that President Trump has put forth. We have talked about that. That would include the Corporation for Public Broadcasting. How much would that save? Ten billion dollars, just one dot.

  So it's to say that, as much as President Trump is trying to cut some spending, it really doesn't do that much to the deficit, at least not so far.

• Amna Nawaz:

  All right, Lisa Desjardins, thanks, as always.

• Lisa Desjardins:

  You're welcome.

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