Interest rates will be higher over the next decade because of the GOP’s megabill and drive up borrowing costs even for the federal government, Congress’ nonpartisan scorekeeper predicts in a new report released Monday.
In a final “dynamic” analysis of the bill President Donald Trump signed into law on July 4, the Congressional Budget Office estimated the measure will increase the federal deficit by $4.1 trillion over a decade. Because the bill’s red ink is not offset by more spending cuts or new revenue, CBO found, the legislation will drive up interest rates.
That increase could affect investors and regular people getting loans for a range of assets, from cars to homes. But it will also hike costs for the federal government in a real way, according to thebudget office — increasing interest payments on the nearly $37 trillion national debt by $718 billion over a decade.
That’s higher than the $440 billion in extra borrowing costs CBO estimated in June, before Republicans reworked many of the bill’s policies to abide by Senate rules and woo the support of GOP lawmakers who were reluctant to vote in favor of the final product.
Congressional Republicans largely dismissed CBO’s deficit and interest rate warnings in the days before clearing the bill for President Donald Trump’s signature, arguing that the legislation would juice the economy far more than forecasters have ultimately predicted.
