U.S. Congressional Agency Responds to Musk's Warning: Trump's Spending Bill Will Increase Deficit by $2.4 Trillion, Speaker Accuses Musk of Being Inconsistent

The nonpartisan agency of the U.S. Congress has released its latest forecast in response to Tesla CEO Elon Musk's warning, predicting that the Trump administration's massive spending bill will lead to an additional $2.4 trillion increase in the U.S. government's deficit over the next decade. However, Republican leaders suggested that Musk is being inconsistent, having just promised to support the Republican Party before turning around to criticize the bill pushed by Trump and the Republicans.

On Wednesday, June 4th, Eastern Time, the Congressional Budget Office (CBO) released its forecast, showing that compared to the baseline prediction, the Republican tax and spending bill known as the "Big Beautiful Plan" will reduce federal government revenue by $3.67 trillion by 2034, while government spending will decrease by $1.25 trillion, resulting in a net increase of $2.42 trillion in the federal government's budget deficit.

However, some commentators pointed out that the estimated figures do not take into account the potential economic boost that the bill may bring, which could offset some of the losses in government revenue.

The CBO's previous forecasts have indicated that the U.S. debt crisis may arrive faster and more severely than expected. In May, the CBO had estimated that the Big Beautiful Plan could increase the U.S. government's budget deficit by an additional $2.3 trillion over the next decade.

One day before the CBO's latest forecast was released, Wall Street Insight mentioned that Musk publicly criticized the bill on social media, calling it "disgusting" and the lawmakers supporting it "shameful." At that time, Musk posted that the bill would cause the already massive U.S. government budget deficit to surge to $2.5 trillion, burdening the American people with unbearable debt, stating, "Congress is bankrupting America."

On the same day the CBO's forecast was released, Democratic Congressman Brendan Boyle, the Democratic leader of the House Budget Committee, cited Musk's comments from Tuesday, calling the bill "disgusting." He also said, "When Democrats are in power, Republicans shed crocodile tears over the debt issue, but when they are in power, they let the debt explode."

On May 22, after the Big Beautiful Plan narrowly passed a vote in the U.S. House of Representatives, Xinhua News Agency reported that while Trump and senior Republicans welcomed it, Democrats were dissatisfied with the significant cuts to social security funding, and some Republican voters were concerned about the impact. Meanwhile, budget agencies, economists, and officials from the U.S. Federal Reserve expressed deep concerns about the potential for the bill to trigger a surge in federal deficits.

Speaker of the House says Musk promised to support Republicans but criticized lawmakers the next day

House Speaker and one of the Republican leaders, Johnson, expressed this week that Republican leaders were shocked by Musk's criticism on Tuesday, as he seemed to be inconsistent.

Johnson stated that the day before Musk publicly criticized the Big Beautiful Plan and attacked the lawmakers supporting it, he had promised to help the Republicans regain a majority in the House. Johnson said,

"He (Musk) talked to me about the midterm elections, and he said, 'I will help. I will make sure the Republicans keep the majority in the House.'" Johnson also revealed that Musk told him that Trump needs a full four-year presidential term and cannot be threatened by impeachment from the Democrat-controlled House of Representatives.

Johnson stated that he called Musk on Tuesday night, but Musk did not answer the phone.

When asked if he thought Musk was angry about the bill reducing electric vehicle tax credits, Johnson said he did not want to attribute this policy dispute to personal motives.

Trump Administration Criticizes CBO for "Historically Wrong" and Underestimating Government Revenue

Officials in the Trump administration have repeatedly dismissed CBO's forecasts, claiming they are inaccurate and fail to account for the economic growth effects of tax cuts, increased tariffs, and deregulation.

White House Press Secretary Levitt recently stated that the CBO has "historically been wrong" and also mentioned that CBO staff have biases.

Senate Republican Leader John Thune stated that the CBO is "completely wrong" because it underestimated the potential revenue growth from the first round of tax cuts implemented by Trump in 2017. The CBO stated last year that the government's actual revenue was $1.5 trillion higher than the CBO's expectations, exceeding by 5.6%, primarily due to the "inflation surge" during the COVID-19 pandemic in 2021.

U.S. Treasury Secretary Basant previously stated that he is "not worried about U.S. debt dynamics" because the continuously growing U.S. GDP will alleviate the debt burden. He also predicted on May 24 that by this time next year, U.S. GDP growth would "exceed 3%."

However, Deutsche Bank analysts warned in a report on the 2nd of this month that the Trump administration's spending plan "will keep the federal budget deficit as a percentage of GDP between 6.5% and 7% over the next few years, with no progress in reducing the deficit."

CBO Expects Impact on Health Insurance

The "Big Beautiful" bill primarily focuses on: extending the corporate and individual tax cuts introduced during Trump's first presidential term, raising the SALT (State and Local Tax) deduction cap to $40,000, increasing the debt ceiling by $4 trillion, boosting border security spending, imposing work requirements on Medicaid, and eliminating the clean energy tax credits introduced by the Biden administration.

The CBO estimates that by 2034, the "Big Beautiful" bill will result in 10.9 million people losing health insurance, including 1.4 million individuals with "unclear citizenship, nationality, or immigration status," who will no longer be eligible for state-funded insurance programs.

Additionally, the proposed adjustments to Medicaid will cause 7.8 million people to lose coverage under this federal medical assistance program. Federal spending on Medicaid and the Affordable Care Act will decrease by $902 billion over the next decade. Another 1.3 million people will lose insurance due to changes in the Affordable Care Act.

The bill will also affect food assistance programs. The CBO previously estimated that due to changes in the proposed food stamp program SNAP, nearly 4 million people will be unable to access food stamps each month