Trump’s tax bill runs counter to reducing debt, warns IMF

WASHINGTON

The massive tax and spending bill appears to run counter to reducing federal debt over the medium term, IMF spokesperson Julie Kozack said.

“From the IMF side, we have been consistent in saying that the U.S. will need to reduce its fiscal deficit over time to put public debt-to-GDP on a decisive downward path,” she told a regular news briefing in Washington.

It is important to build consensus within the U.S. about how it will address these chronic fiscal deficits, Kozack said.

U.S. President Donald Trump boasted of a "phenomenal victory" to cheering supporters at a rally in Iowa on July 3 after Congress narrowly passed his signature tax and spending bill, cementing his radical second-term agenda.

"Very simply, the one, big beautiful bill would deliver the strongest border on Earth, the strongest economy on Earth, the strongest military on Earth, and ensure the United States of America will remain the strongest country anywhere on this beautiful planet of ours,” he said. 

The bill squeezed past a final vote, 218-214, after a small group of Republican opponents in the House of Representatives finally fell in line.

Many fear that it will balloon the national debt, gut health and welfare support as well as clean energy, and supercharge Trump's migrant crackdown.

It is expected to pile an extra $3.4 trillion over a decade onto the country's fast-growing deficits, while shrinking the federal food assistance program and forcing through the largest cuts to the Medicaid health insurance scheme for low-income Americans since its 1960s launch.

Some estimates put the total number of recipients set to lose their insurance coverage under the bill at 17 million. Scores of rural hospitals are expected to close.