Proposed Republican Tax Cuts Could Add $9 Trillion to U.S. Debt, Sparking Fiscal Showdown

As Republicans hold a governing trifecta—controlling the White House, Senate, and House of Representatives—significant tax changes are front and center in U.S. policy debates this year. With the clock ticking toward the expiration of key provisions of the 2017 Tax Cuts and Jobs Act (TCJA), Republican leaders and President Donald Trump are proposing sweeping tax reliefs. But these come with an eye-popping price tag: a potential $9.1 trillion addition to the national debt over the next decade.

According to an analysis by the Tax Foundation, the full extension of the TCJA would cost about $5 trillion through 2034. But that’s just the beginning. Trump’s broader tax agenda includes:

• Elimination of income taxes on Social Security benefits: $1.4 trillion

• Restoration of the entire State and Local Taxes (SALT) deduction: $1.2 trillion

• Elimination of income taxes on overtime pay: $880 billion

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These proposed tax breaks would reduce federal revenues by $7.8 trillion, and once interest on the debt is factored in, deficits could balloon to $9.1 trillion over ten years—if no spending cuts or revenue increases offset the move.

Here’s the catch: The House of Representatives’ budget resolution passed in February allows only $4.5 trillion in tax cuts through reconciliation—far short of the full $7.8 trillion cost. This sets up a fiscal and political conundrum: Which tax cuts can make it into a final package under strict budget rules?

Some lawmakers are floating the idea of a “current policy” baseline to sneak the tax cuts into the budget by pretending extensions are free. But watchdogs and fiscal conservatives warn this is a budget gimmick that could worsen the national debt and weaken accountability in future policymaking.

 Bottom Line: Lawmakers are now faced with a critical decision—stick to budget discipline or give in to sweeping tax reliefs that could jeopardize America’s fiscal future. With the 2025 tax debate heating up, how this issue is handled may define the country’s economic path for decades.

For continued updates on how this affects global markets and Nigerian foreign policy considerations—especially in trade and investment—stay tuned with Newspot Nigeria, your reliable window to international affairs that matter.

-Peter G. Peterson Foundation