GOP Revives Trump-Era Tax Cuts as Bessent Shrugs Off Credit Downgrade

• The Republican-controlled U.S. Congress is pushing to pass President Trump’s tax-cut bill, projected to add $3 trillion to $5 trillion to the $36.2 trillion national debt over a decade, despite Moody’s downgrading the U.S. credit rating due to a projected debt-to-GDP ratio of 134% by 2035.
• Treasury Secretary Scott Bessent dismissed the Moody’s downgrade, arguing on CNN that the tax cuts will spur economic growth to offset the debt, while the 2017 tax cuts increased the deficit by just under $1.9 trillion, per the Congressional Budget Office.
• House Speaker Mike Johnson, facing resistance from hardline Republicans like Representatives Chip Roy and Ralph Norman, remains confident in passing the bill, with the House Budget Committee scheduling a rare Sunday-night vote at 10 p.m. ET.

The Republican-controlled U.S. Congress is intensifying efforts to advance President Donald Trump’s tax-cut bill, which seeks to extend the 2017 tax cuts, despite warnings from economic experts and a recent Moody’s downgrade of the federal government’s credit rating, as reported by nonpartisan analysts cited in discussions around the legislation. The bill, a cornerstone of Trump’s first-term economic agenda, is projected to increase the nation’s $36.2 trillion debt by $3 trillion to $5 trillion over the next decade, pushing the debt-to-GDP ratio to 134% by 2035, according to Moody’s, which cited this trajectory as the basis for stripping the U.S. of its top-tier credit rating. Treasury Secretary Scott Bessent, however, downplayed the downgrade’s significance on CNN’s “State of the Union,” arguing that the tax cuts would drive economic growth sufficient to offset the added debt, a claim that echoes the White House’s dismissal of the credit agency’s decision.

Meanwhile, Reuters reports that the push for the tax bill has faced resistance within the Republican Party, with hardline members, including Representatives Chip Roy of Texas and Ralph Norman of South Carolina, blocking a procedural vote on Friday, demanding deeper spending cuts to offset the bill’s fiscal impact. House Speaker Mike Johnson remains optimistic, stating on “Fox News Sunday with Shannon Bream” that the chamber is “on track” to pass the legislation, with the House Budget Committee scheduling a rare Sunday-night session at 10 p.m. ET to advance the bill. Johnson emphasized ongoing negotiations with dissenting Republicans, signaling a commitment to resolving internal party divisions to secure passage.

The debate over the tax cuts revives arguments from 2017, when Republicans asserted that the tax reductions would be self-financing through economic growth. However, the Congressional Budget Office later estimated that those cuts contributed just under $1.9 trillion to the federal deficit over a decade, even when accounting for positive economic effects, challenging the notion that tax reductions alone can neutralize their fiscal impact. Moody’s downgrade, the last of the three major credit agencies to take such action, underscores the growing concern among analysts that the U.S. debt burden is unsustainable, urging lawmakers to either raise revenue or curtail spending to restore fiscal balance.

The current legislative effort reflects broader tensions between economic growth strategies and fiscal responsibility. Proponents of the tax cuts, led by figures like Bessent, argue that reducing tax burdens stimulates investment and job creation, potentially increasing government revenue over time. Critics, however, point to the 2017 experience and the projected $3 trillion to $5 trillion debt increase as evidence that such policies exacerbate the nation’s fiscal challenges without guaranteed economic benefits. The Moody’s downgrade serves as a stark warning, highlighting the risks of further debt accumulation in an already strained economic environment.

As the House prepares for its late-night committee vote, the outcome will hinge on Speaker Johnson’s ability to unify his party. The resistance from Representatives Roy and Norman reflects a broader conservative push for fiscal discipline, a priority that could shape the final form of the legislation. With the national debt already at $36.2 trillion, the stakes are high, as lawmakers grapple with balancing Trump’s economic vision against the long-term implications of an escalating debt-to-GDP ratio. The resolution of this debate will not only determine the fate of the tax-cut bill but also signal the direction of U.S. fiscal policy under the current administration.

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