Trump pushes Senate to pass his tax bill this week to make his first-term tax cuts permanent

The White House, under President Donald Trump, is making an aggressive push to pass a major tax bill this week, while the US current account deficit just exploded to $450.2 billion in the first quarter of 2025, the largest it’s been since late 2006.

This comes as Trump demands the Senate finalize his proposal to make his first-term tax cuts permanent, an effort he claims will wipe out trillions in red ink. The bill is now the administration’s primary answer to the growing pressure over the country’s deteriorating fiscal situation, as Republicans scramble to pass it before the July 4 deadline.

According to the White House Council of Economic Advisers on Wednesday, the Trump bill—backed by expanded tariff revenue and faster growth—would lower debt levels and reverse the trend that has sent the national deficit to historic highs. But that’s far from a universal view.

Independent analysts and several Republican senators are warning that the legislation could worsen the already massive US debt pile, and potentially damage credibility in global credit markets.

Senate faces revolt over debt concerns

Stephen Miran, who chairs the Council of Economic Advisers and advises Trump directly on economic policy, said the bill was “extremely powerful,” predicting it would “create an economic boom” and “bring the deficit and debt ratios down.” But others aren’t buying it.

Ron Johnson, a Republican senator from Wisconsin, voiced serious concerns last week. “What we’re concerned about is an acute debt crisis,” Johnson said. “What we’re trying to avoid is global creditors looking at the United States and saying you’re a credit risk.”

Right now, the Republicans control the Senate with just a 53-47 majority, and a handful of lawmakers are still undecided. Trump, impatient with the pace, posted on his Truth Social page on Tuesday:

“To my friends in the Senate, lock yourself in a room if you must, don’t go home, and GET THE DEAL DONE THIS WEEK. NO ONE GOES ON VACATION UNTIL IT’S DONE.”

The House of Representatives already passed its version of the bill last month. But some Republicans are demanding changes that go further in cutting government spending or tightening future fiscal rules before they commit.

Trump’s team and forecasters clash on projections

At the core of the argument is the long-term impact of Trump’s policies. The Congressional Budget Office (CBO) recently projected that the House version of the tax bill would increase US debt by $2.4 trillion by 2034. When rising interest rates are included, the number jumps to $2.8 trillion.

Even though Trump’s advisers say the bill would unleash growth and investment, the CBO and other institutions like the Wharton School and Committee for a Responsible Federal Budget all say the legislation would widen deficits for years to come.

Miran dismissed the CBO’s estimates as incomplete. “It’s not intended to give a holistic view of where the deficit is going over time because it doesn’t include the other things,” he said, referring to additional economic gains from deregulation and energy policies.

The CEA’s own forecast includes up to $2.3 trillion in deficit savings from tax-fueled growth, $3.7 trillion from regulatory rollbacks and energy policies, $1.8 trillion from reduced discretionary spending, and $3.2 trillion from new tariff revenues. Altogether, the administration says Trump’s full economic plan would lower debt to 94% of GDP by 2034, a number skeptics say relies on optimistic math.

Meanwhile, the real-time numbers are showing a grim trend. The US current account deficit, which tracks the value of goods, services, and investments flowing into and out of the country, soared by $138.2 billion in the first three months of this year.

That’s a 44.3% jump from the previous quarter, putting the deficit at an annualized rate of $1.8 trillion, a figure that hasn’t been seen since the days before the 2008 crash. As a share of GDP, the shortfall hit 6.0%, just shy of the 6.3% record set back in Q3 2006.

The reason for the spike? American businesses flooded ports with foreign goods ahead of new tariffs, trying to beat higher costs. That wave of imports pushed the US trade imbalance into extreme territory, just as the government tries to convince fiscal conservatives it has a grip on the bigger picture.

So while Trump’s tax bill is being sold as a plan to shrink the debt, it’s happening in the shadow of some of the worst trade and investment shortfalls the country’s seen in decades.

Steve Scalise, the Republican House Majority Whip, brushed off the CBO’s warnings, saying: “They’ve always been wrong, and they’ve always ignored what tax cuts will do to grow the American economy.” But even among Republicans, there’s tension.

Without a strong majority, Trump needs every GOP senator to fall in line. If even a couple breaks ranks, the bill collapses, and so does his shot at claiming a fiscal win ahead of the holiday.

The Treasury bond market, which ballooned from $5 trillion in 2008 to $29 trillion today, underscores how much is riding on this moment. With debt at historic levels, the path forward will either confirm or reject Trump’s promise to fix America’s finances through tax cuts, deregulation, tariffs, and aggressive economic engineering. Either way, the deadline is ticking, and the numbers aren’t waiting.

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