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CBO sees $2.4 trillion debt impact in House-passed bill

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Elon Musk criticizes bill, supports Republican deficit

hawks

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Senate Republicans divided on House-passed bill

(Recasts lead with hardline opposition, adds new Musk tweets,

Republican senators' quotes)

By Richard Cowan and David Morgan

WASHINGTON, June 4 (Reuters) - Hardline conservative

Republicans in the U.S. Senate and billionaire Elon Musk showed

no sign of softening opposition to President Donald Trump's

tax-cut and spending bill on Wednesday, as they pushed for

deeper reductions in government outlays.

The nonpartisan Congressional Budget Office on Wednesday

estimated the bill -- which would extend Trump's 2017 tax cuts

and step up spending for the military and border security --

will add about $2.4 trillion to the $36.2 trillion U.S. debt

pile.

Musk, the world's richest person who for several months led

the Department of Government Efficiency cost-cutting effort,

stepped up his attacks on the measure, joining with Senate

Republican deficit hawks who said the version passed by the

House of Representatives last month did not sufficiently cut

spending.

"A new spending bill should be drafted that doesn't

massively grow the deficit," Musk, the largest Republican donor

in the 2024 election cycle, said on his X social media platform.

"America is in the fast lane to debt slavery."

Top congressional Republicans rejected his criticism and one

White House official on Wednesday called the Tesla CEO's moves

"infuriating."

Some Senate Republicans downplayed Musk's influence.

"I don't think very many senators are that interested in

what Elon has to say. It's amusing. But we're serious

policymakers. We have to govern, and so we have to deal with

reality," Senator Kevin Cramer of North Dakota told reporters.

Musk 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.

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 measure would also lift the federal government's debt

ceiling, a step that lawmakers must take some time this summer

or risk a devastating default.

NARROW SENATE PATH

With Republicans holding a narrow 53-47 Senate majority,

just four "no" votes are enough to scupper any bill that

Democrats unite in opposing.

The measure named the "big, beautiful bill" faces opposition

both from deficit hawks and a handful of rural-state Republicans

worried about the scale of cuts to the Medicaid health insurance

program for low-income Americans.

"We're at $2 trillion in deficits," said Republican

Senator Rick Scott of Florida. "We're not going to get interest

rates down or inflation under control if we don't balance the

budget."

Republican Senator Ron Johnson of Wisconsin criticized

the Trump-backed bill as failing to reverse the trajectory of

budget deficits and debt.

"The CBO score is a distraction," Johnson said to

reporters. "You're arguing over twigs and leaves, when you're

ignoring the forest that's on fire."

'BAD TO WORSE'

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

"This bill has gone from bad to worse," said Democratic

Senator Ron Wyden of Oregon, referring to the healthcare cuts.

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 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 Republican-controlled Congress so far has not rejected

any of Trump's legislative requests.