The Senate just passed its version of the massive “One Big Beautiful Bill Act,” which combines new and extended tax cuts with other policy priorities for the president and Republicans in Congress. Estimates show that this bill will add between $3 trillion and $5 trillion to America’s national debt.
I understand the appeal; everyone likes a tax cut. However, as in personal finances, we can’t keep swiping the credit card without a plan to pay the bill, and Congress has not figured out a way to pay for any of this. With our existing, massive debt and rising interest rates, this legislation is unlikely to create the economic boom promised, but instead will make the ball and chain of debt around the ankle of our economy and our country even heavier.
The real rub is that the tax cuts at the heart of the OBBBA, which will supposedly drive economic growth, won’t do that because adding this much debt on top of our existing burden will ultimately erase any benefits from growth.
When the House passed its initial version of the bill, Republican members said it would generate so much economic growth that it would largely pay for any deficit spending. However, an official, impartial estimate from the Congressional Budget Office shows the current bill will do the opposite — it will lead to higher debt service costs from rising interest rates, which will swamp any revenue benefits from economic growth.
Our national debt stands at $36 trillion, exceeding the size of our economy. While debt can be a useful tool for nations, our excessive debt is having the opposite effect and is beginning to harm our economy.
Don’t just take my word for it, ask credit rating agency Moody’s, which recently downgraded U.S. long-term sovereign debt from the highest rating of AAA to AA1, and changed its outlook from “stable” to “negative,” specifically citing our continued failure to address annual deficits and the interest we have to pay on debt every year, which now exceeds annual military spending. The warning specifically stated concerns that the OBBBA will continue this worrying trend.
Or you could ask the bond markets where investors buy our debt. Yields on bonds are going up as investors need to be enticed with higher returns to buy our national debt. This alone will cost taxpayers trillions over the next decade. And the higher interest rates caused by this debt affect us all, driving up the rates for mortgages, car loans and credit cards.
Another study from The Budget Lab at Yale shows that we will get an initial boost in GDP growth, but that short-term sugar high turns negative quickly. And, over 10 years, average GDP growth will be essentially zero as the positive effects of the bill are canceled by the economic drag from high interest rates.
Let’s be honest: neither party has clean hands when it comes to the mess we are in. Democrats have a long history of adding to budget deficits and debt, and now Republicans are pulling out every budget gimmick and trick to push through these tax cuts.
Unfortunately, this is nothing new in Washington. I previously served as a member of Congress and saw firsthand how both parties try to wiggle out of a commitment to fiscal responsibility.
People have been concerned for years about the unchecked growth of our national debt, warning about consequences for our economy and our standing as a global economic power. Those consequences aren’t in some far-off future anymore; they are here now, and we need to face them head-on before they get worse. We won’t advance solutions by pointing fingers and passing off this debt problem to the next Congress — or generation — to handle.
It’s clear that we’re not in a good spot, but it doesn’t have to stay that way. We can demand better. Congress needs to work across party lines to bring back some basic principles: If it’s worth doing, it’s worth paying for. No gimmicks, and no hidden costs.
Responsible budgeting isn’t about saying no to everything; it’s about saying yes to the things that matter and being honest about how to pay for them.
What this means in this current moment is that we should all say “no” to OBBBA until Congress has a plan to pay for it — all of it — and ideally leaves some behind for deficit reduction. The House of Representatives has one more chance to block this debt-ballooning bill from advancing. There are many ways Congress could go back to the drawing board to create legislation that extends and fully pays for middle-class tax cuts without crippling our economy with crushing debt.