U.S. Tax Reform Faces $2.8 Trillion Deficit Challenge

The U.S. Congressional Budget Office (CBO) has released projections indicating that President Donald Trump's ambitious tax-cut and spending bill could swell the nation's deficit by $2.8 trillion over the next ten years. This comes in spite of predictions for economic growth spurred by the legislation.

According to the CBO's analysis, the bill, which passed the House and awaits Senate consideration, would boost the real GDP by an average of 0.5% over the decade. However, this growth yields an $85 billion deficit reduction offset by rising interest payments, which might increase federal debt costs by $441 billion.

The Senate's version of the bill causes contention within the Republican-controlled Congress, with some advocating for deeper cuts and others seeking to protect social safety nets. These divisions threaten to derail the timeline for passing this central piece of Trump's domestic agenda.

(With inputs from agencies.)