The Congressional Budget Office (CBO) said that President Donald Trump’s signature spending and tax break legislation will add trillions to the federal deficit, triggering billions of dollars in automatic cuts to federal programs. Among the cuts: $491 billion to Medicare over the next decade.
The recent analysis, which was conducted in response to a request by Democratic Senate and House of Representatives budget and finance leaders, reveals that the enactment of the 2025 reconciliation act will increase the federal deficit by $2.1 trillion over the next five years and by $3.4 trillion over the next 10 years.
Although Republican lawmakers did not include Medicare cuts in the mega tax bill, by adding trillions to the national debt, the legislation automatically triggers the Statutory Pay-As-You-Go (PAYGO) Act of 2010, requiring the Office of Management and Budget (OMB) to make cuts to Medicare over the next decade.
Although the OMB has not yet released deficit projections, the CBO said in its report that the average increases in the deficits stemming from the One Big Beautiful Bill Act will total $415 billion over the next five years and $339 billion over the 10-year period. As a result, CBO estimates that would trigger $45 billion in spending cuts to Medicare in fiscal year 2026 and $76 billion in 2034 and would total $491 billion over the 2027–2034 period.
To prevent these cuts, Congress can either pass legislation to offset the deficit increase, waive OMB’s requirement to record the bill’s effect on the five- and 10-year scorecards, or take other action to mitigate or eliminate the statutory requirements.