A Clash Over Tax Cut Extensions: Economic Catalyst or Debt Burden?

On Sunday, Treasury Secretary Scott Bessent downplayed Moody's recent downgrade of the U.S. sovereign credit rating amid efforts by Republicans in Congress to advance President Donald Trump's ambitious tax-cut bill.

Bessent, during several televised interviews, argued that the bill's provisions to extend the 2017 tax cuts, initiated under Trump's first term, would drive sufficient economic growth to outpace national debt, despite nonpartisan warnings that the measure could add trillions to the federal debt, now at $36.2 trillion. Bessent told CNN's 'State of the Union' program, 'I don't put much credence in the Moody's downgrade.'

On Friday, the House of Representatives Budget Committee rejected the bill, citing concerns from Republican hardliners about insufficient spending cuts. Meanwhile, House Speaker Mike Johnson remains confident in passing the bill, with further discussions scheduled for a rare Sunday night hearing. Previous Republican assertions that tax cuts would spur economic growth were challenged by the Congressional Budget Office's estimate of a $1.9 trillion deficit increase over a decade.

(With inputs from agencies.)