United States President Donald Trump and Tesla owner Elon Musk exchanged attacks on social networks days after the businessman left the US government.
The main reason for the fight was a comprehensive bill supported by Donald Trump on taxes, spending cuts, energy and the border.
The measure was adopted by the House by a vote, but now has an uncertain future in the Senate, no matter how controlled by the Republican Party.
The project extends 2017 tax cuts, adopted in Trump’s first term. The congressional budget office, which is aparti, said this would add $ 3.8 trillion to the $ 36.2 trillion debt of the federal government.
Musk, who was one of Trump’s leading supporters in the 2024 presidential dispute, was invited to take over the government efficiency agency (doge) with the promise of making deep cuts on public machine spending.
In recent weeks, he has criticized Trump’s project, punctuating in an interview that is “disappointed” with the agenda. The businessman stressed that the project would increase “the budget deficit” and impair the work that from the team he commanded while being in government.
Elon Musk’s criticism reached the peak on May 3, when he said on social networks that the proposal supported by Trump is a “disgusting abomination” and that Congress would lead the country “to bankruptcy.”
Trump had called the proposal sent to the “Great and Beautiful Bill” Congress. But the owner of Tesla published on the networks that he is actually the “great and ugly bill”, claiming that his implementation would increase the country’s deficit by $ 2.5 trillion.
Some White House employees and several important republicans have tried to attribute Musk’s criticism to the revocation planned by the legislation of certain subsidies for electric vehicles – and the impact it would have on its own difficult company, Tesla.
But a republican strategist who worked closely with the technology billionaire minimized the situation, telling the CNN that Musk was genuinely concerned about the projections of how much the bill would increase the deficit – the reasoning that Musk quoted publicly on several occasions.
Other people who know Musk agreed that their opposition to the project is not just about electric vehicle credits or solar energy subsidies, noting that he sees the project as a “slap in the face” of what he was trying to do with the department of government efficiency.
But, after all, what provides for the bill?
The House package provides for the permanent application of virtually all individual income tax cuts provided for in the 2017 tax courts.
The project would also grant temporary tax relief to certain elderly and workers who receive tips and overtime, something promised by Trump during the election campaign last year.
In addition, it would temporarily restore two TCJA tax incentives for companies, including the possibility of immediately deducting research, development and equipment costs.
To help compensate for the cost of tax relief, the House Bill would promulgate historical cuts on Medicaid and Food Valley, two of the country’s leading social security programs.
The package would institute work requirements at Medicaid, which provides health insurance for low-income Americans, and would expand the work mandate in the food stamps, known as the supplementary nutritional assistance program, or SNAP.
These provisions would result in the loss of millions of people to health coverage and nutritional care, according to preliminary projections from the Congress Budget Office (CBO) previously released.
The bill would also increase expenses in defense, border security and immigration, which are among Trump’s main priorities.
Great spending cuts, higher tax cuts
The comprehensive package of tax cuts and spending on the Chamber’s Republicans would add $ 2.4 trillion to the deficit in the next decade, according to the analysis of the Apartisan CBO.
In addition, nearly 11 million more people would be uninstated in 2034, largely due to historical package cuts for Medicaid, discovered the CBO.
The chamber package would cut about $ 1.3 trillion in spending over a decade, according to the CBO. But the legislation would reduce revenue by nearly $ 3.7 trillion.
“We have the account that, despite all these difficult choices, it is still dramatically increasing the debt,” said Marc Goldwein, senior director of policies of the committee for a responsible federal budget.
Independent analyzes show that the package tax relief would disproportionately benefit the highest income families, with even more pronounced impact if spending cuts are considered.
Those in the lowest income ranges would have their revenue reduced after tax deduction and certain government benefits, while those who earn the most increase in income, according to the estimated Penn Wharton budget model for the Chamber’s final bill.
About 10.9 million people would run out of health in 2034, according to CBO estimates. This includes 7.8 million Americans who would lose health insurance due to the provisions of Medicaid and about 1.4 million people without a satisfactory verified citizenship or status, which would not be covered by 2034 by health programs funded with state funds only.
Others would lose their coverage due to the measures of Affordable Care Act (Accessible Medical Assistance Law) in the bill, including reducing the registration period, restricting special periods of registration during the year and increasing verification requirements for prize subsidies, among others.
“This would be the biggest reversal ever seen in federal support for medical care,” posted Larry Levitt, executive vice president of health policy at the KFF Apartisan organization, at X.
In addition, the House Bill would not extend the improvement subsidies of the Affordable Care Act, which the Democrats of Congress and the Biden Government implemented by 2021. Reinforced subsidies should expire at the end of the year.
Allowing the increase to exhibit, combined with the implementation of an Obamacare rule proposed by the Trump administration, would increase the number of unhealthy Americans by another 5.1 million by 2034, according to a separate CBO analysis conducted to Congress Democrats and released on Wednesday (4).
Argument of economic growth and cost cuts
White House authorities defend their projections with the view that the bill will trigger a lasting increase in economic activity that, coupled with the broader economic agenda, will overcome economic predictions.
This, in turn, would increase federal tax revenues and fill most of the hole created for the loss of $ 3.7 trillion in revenues for the government, designed for 10 years, while Trump fares would boost a drastic increase in revenue not included in any budget score linked to the bill.
The $ 1.3 trillion in mandatory spending cuts over a decade would mark the starting point that the White House authorities will lead to the imminent battle of spending in the capitol.
The White House logic is linked to a combination of projections that collide directly with the economic visions.
The White House message is also directed to an audience that has much more influence on Trump’s economic agenda than any politician: title investors, which have become increasingly nervous in recent months.
The growing concern about stratospheric US debt levels led to relegation of Moody’s credit classification last month, which helped trigger another wave of turbulence in the largest and more liquid title market in the world.
Investors had already signaled discomfort with Trump’s “Liberation Day” expansive tariffs in April, but as the House approached the bill vote last month, investors in titles once again became nervous.
This signaled investors ‘willingness to consider whether decades’ warnings about an imminent but theoretical, US fiscal collapse may be approaching reality.
“You’ll see a break in the title market, okay?” Said Jpmorgan CEO Jamie Dimon during a May 30 debate at the California National Economic Forum.
White House officials discard this worst scenario. They insist that the government is not shaken by the high -term costs of long -term loans in the US or the last months tumultuous in the US Treasury Title market.
They claim that fluctuations in the title market are not linked to the realities that support the world’s largest economy.
“I have known Jamie for a long time, and throughout his career he made predictions like this,” said Treasury Secretary Scott Bessent on CBS’s Face The Nation show. “Fortunately, none of them have materialized.”
Appealing to investors in titles
White House officials are aware that they need to defend their arguments aggressively to worried title investors-and do it well.
This reality, more than anything else, raises the question of why authorities insist on declaring that the bill will not increase deficits in even a dollar over 10 years. The main assumptions that support this projection would be:
1) Tariffs will produce trillion dollars in revenue without harming the US economic growth.
2) The courts allow the wide deregulation agenda of the White House, including the doge cuts, continues.
3) Business investment increases, even after early corporate tax incentives expire in a few years.
4) Delayed spending cuts will remain in force for a period of four years and Republicans will guarantee great discretionary spending cuts that will require democratic support.
There are variables, many of them out of Trump’s control in the statements.
This emphasizes the connection between the first and second terms of Trump. Trump’s advisers are still excited by the unshakable belief that economic experts were wrong in Trump’s first term.
They bet this is the case again, with Trump’s economic agenda at stake.
Musk’s outburst on social networks did not help. But there is no discussion about any significant change of direction in the White House regarding the project.
“Nothing has changed in our worldview,” Russell Voght, director of Budget of White House, told reporters outside the Wing Wing, a few hours after Musk’s posting on Tuesday.
With information from e from CNN International.
