The fiscal impact of President Trump’s “big, beautiful bill,” which one prominent budget hawk called a “debt bomb,” is becoming a significant political concern among Republican lawmakers who have made little progress toward offsetting the $3 trillion projected cost of the legislation.
Some GOP senators fear that the bill’s failure to rein in federal spending in a substantial way over the next decade is fueling jitters in the bond market, where soft demand for U.S. debt has caused yields to climb in recent weeks.
And they worry that if Republicans pass Trump’s bill on party-line votes in both chambers, they will get blamed for heaping trillions of dollars onto the debt and the economic consequences that may follow in the future.
“I think we’re having trouble selling our long bonds already,” warned Sen. Rick Scott (R-Fla.), who cited the rising interest rates.
Scott is one of at least four Senate Republican conservatives who are sounding the alarm over the long-term fiscal implications of the 1,116-page budget reconciliation bill that passed the House.
They support many of the bill’s components but argue that it falls well short of what is needed to reduce annual federal deficits that are projected to grow from $2.2 trillion a year in 2025 to more than $2.5 trillion in 2035.
“I want to get a deal done; I support the president’s agenda. I support the border; I support the military; I support extending the Trump tax cuts, but we have to live in reality. But we got to live in reality here; we got a fiscal crisis,” Scott said.
“You saw the Japanese bond market is in trouble; you saw the American bond market is in trouble. Inflation is not coming down; interest is not coming down. That means we’ve got to balance the budget,” he added.
The 30-year U.S. Treasury yield rose to 5.15 percent Thursday, its highest level since October 2023, after the House passed the massive package.
Rep. Thomas Massie (Ky.), who was one of only two Republicans to vote “no,” called the bill a “debt bomb ticking.”
He warned it “dramatically increases deficits in the near term” while promising fiscal reforms “five years from now.”
“Where have we heard that before?” he asked.
Christopher Waller, a member of the Federal Reserve board of governors, said Thursday that “markets are looking for a little more fiscal discipline” and are “concerned.”
He called yearly deficits of more than $2 trillion “not sustainable.”
Fears that the deficit would rise dramatically were aired last fall during the presidential race as both candidates made a series of promises. Now those fears are being realized.
Sen. Rand Paul (R-Ky.) is warning colleagues that Trump and Republican lawmakers will “wholly own” future federal deficits if they enact the House-passed legislation without making big changes to offset the cost of the president’s priorities and other expensive items added by House GOP negotiators, such as a proposal to raise the cap on state and local tax (SALT) deductions from $10,000 to $40,000 annually.
“The anticipated deficits per year now will be $2 trillion a year for the next two years,” Paul said.
Paul says he will vote against the House bill because it includes a provision to raise the debt ceiling by another $4 trillion to allow the federal government to keep borrowing through the 2026 midterm election.
“I think the problem for conservatives is they lose their high moral ground. These will be their deficits,” he said. “These will be GOP spending bills, GOP deficits, and there is no change in the direction of the country.
“If anything, the projection is the deficits will get worse. I saw a projection yesterday by some group showing deficits over $3 trillion,” he added.
He said the spending cuts in the package are “wimpy” while stating that “they’re also increasing spending.”
“They got a $300 billion increase in spending for the military and the border,” he said. “We don’t need another $46 billion for a [border] wall,” he said. “There’s nothing conservative about this.”
Even a few centrist Republicans, such as Sen. Thom Tillis (N.C.), who faces a tough reelection battle next year, say there needs to be more deficit reduction in the package.
“We probably still need to do a little more work on finding savings to get close to deficit neutral,” Tillis told reporters Thursday.
Sen. Ron Johnson (R-Wis.) has urged Senate Republican leaders to start over and begin work on a bill that would return the country to prepandemic spending levels adjusted for inflation and population growth.
He called the deficit-reduction measures in the House bill “a joke.”
Johnson said he supports extending Trump’s expiring 2017 tax cuts, but he doesn’t want to provide new tax relief in the pending budget reconciliation package unless negotiators can find a way to fully offset their costs.
“We’re going from $2.2 trillion in annual deficits to averaging between $2.5 trillion and $2.6 trillion. The number one goal of this reconciliation ought to be to reduce that 10-year and those annual deficits, not increase them,” he said.
Johnson said “at a minimum” the bill must “not increase those deficits” for him to vote him to support it.
“Take a look at what’s happening to the bond markets,” he said. “They’re not happy because they realize we’re becoming less and less creditworthy. That’s a very dangerous place.”
Moody’s recently downgraded the nation’s credit rating, citing Congress’s failure “to agree on measures to reverse the trend of large annual fiscal deficits and growing interest costs.”
The Wisconsin senator warned that every 1 percent increase in interest rates costs the U.S. government an additional $360 billion or $370 billion annually to service the national debt.
He said while the reforms to Medicaid and the Supplemental Nutrition Assistance Program are said to reduce spending by $880 billion, he argued the real savings “we’re actually going to realize” is “probably not much.”
“It’s definitely under 1.3 percent” in savings, he said.
Asked about the new work requirements the House drafted for Medicaid, Johnson replied with a dose of sarcasm: “Whoop-de-doo.”
Senate Majority Leader John Thune (R-S.D.) said Thursday there would be a strong push by members of the Senate GOP conference for more deficit reduction in the bill.
But the problem is that many of the proposals to cut spending already face opposition from other Republican senators.
For example, Sens. Susan Collins (R-Maine), Lisa Murkowski (R-Alaska), Josh Hawley (R-Mo.) and Jerry Moran (R-Kan.) have warned against Medicaid reforms that would reduce benefits or threaten the finances of rural hospitals.
And Murkowski, Moran, Tillis and Sen. John Curtis (R-Utah) have warned against the sudden repeal of renewable energy tax breaks and incentives that they say would destabilize the clean energy industry and possibly strand deployed capital, leading to turmoil and job loss.
Senate Republicans control a 53-seat majority, which means that any group of four senators can hold up the package to demand changes. Thune can only afford the defection of three Republican votes and still pass the bill.
But conservatives are warning that they will push for deeper spending cuts and oppose colleagues’ efforts to water down the House-drafted fiscal reforms.
“Conventional wisdom from past decades of previous years might suggest this thing gets watered down in the Senate,” he said of the proposed fiscal reforms. “As surprising as it might seem, I think this bill gets more pro-reform, more conservative, you might say, rather than less.”
