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CBO lowers debt impact estimate to $2.4 trillion

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Elon Musk criticizes bill, supports Republican deficit

hawks

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Senate Republicans divided on House-passed bill changes

(Adds revenue and spending details, health insurance data,

paragraphs 4-7)

By Richard Cowan

WASHINGTON, June 4 (Reuters) - The nonpartisan

Congressional Budget Office on Wednesday lowered its estimate of

how much President Donald Trump's tax-cut and spending bill will

add to the national debt, saying it would add about $2.4

trillion to the $36.2 trillion pile.

Its assessment comes a day after key Trump ally Elon Musk

blasted the bill as a "disgusting abomination," giving fresh

support to Republican deficit hawks who have been pushing back

against the measure.

An earlier CBO estimate predicted the Republican bill, which

passed on May 22 with no Democratic support, would add around

$3.8 trillion to Washington's debt over the next decade.

The House-passed bill would reduce the federal government's

revenues by $3.67 trillion over a decade, the CBO forecasted,

while reducing spending by $1.25 trillion.

The number of people in the United States without health

insurance would increase by 10.9 million by 2034 due to policy

changes in the House bill, the CBO said. Of that number, an

estimated 1.4 million people would be undocumented immigrants

who no longer would be covered in programs funded by the states.

The CBO update does not include a forecast on the potential

macroeconomic effects of the legislation, which will be

forthcoming. Republicans argue that extending existing tax cuts

and adding new breaks, which are included in the House bill,

would further stimulate the economy.

They made similar arguments in 2017 that the tax cuts

would pay for themselves by stimulating economic growth, but the

CBO estimates the changes increased the federal deficit by just

under $1.9 trillion over a decade, even when including positive

economic effects.

The 1,100-page bill would extend corporate and

individual tax cuts passed in 2017 during Trump's first term in

office, cancel many green-energy incentives passed by Democratic

former President Joe Biden and tighten eligibility for health

and food programs for the poor. It also would fund Trump's

crackdown on immigration, adding tens of thousands of border

guards and creating the capacity to deport up to 1 million

people each year. Regulations on firearm silencers would be

loosened.

Democrats blast the bill as disproportionately

benefiting the wealthy while cutting benefits for working

Americans. The measure is now awaiting action in the Senate.

The new CBO estimate takes into account late changes that

were made to the bill as Republican leaders steered it to

passage.

PLAYING DOWN MUSK

The White House and top congressional Republicans tried to

play down the objections of Musk, who joined Trump's team with

brash promises of cutting $2 trillion in spending from the

federal budget, but left last week having accomplished a small

fraction of that.

Republican Senate Majority Leader John Thune, speaking to

reporters, tried to minimize the damage, saying, "We obviously

respect everything that Elon did with DOGE. On this particular

issue, we have a difference of opinion."

The updated analysis is expected to help guide the

Republican-controlled Senate, which is now grappling with

putting together its own version of the legislation in coming

weeks.

With Republicans holding a narrow 53-47 Senate majority,

warring camps within the party are vying for changes to the

House-passed bill. Some have been pushing to scale back the more

than $700 billion in savings to Medicaid or to remove costly

Trump-backed tax cuts for those earning overtime pay and tipped

wages or income from Social Security retirement payments.