In a high-stakes Senate session that extended through the night, Republican Senator JD Vance cast the decisive vote to advance the Trump-aligned GOP megabill on Tuesday afternoon. The bill, now heading back to the House for further deliberation, has been pitched by Republicans as a transformative economic package that would accelerate growth and pay for itself. However, analysis from the nonpartisan Congressional Budget Office (CBO) suggests otherwise. According to their findings, the bill’s economic benefits would be minimal, while adding a staggering $3.4 trillion to the national debt.
Economic Impact Favors Wealthy, Harms Vulnerable Groups
The CBO estimates that the House version of the bill would only boost annual GDP by a mere 0.09%. At the same time, it heavily favors the wealthiest Americans. The top 0.1% of earners are projected to receive an average tax benefit of $390,070, while the poorest households could lose an average of $820 annually due to cuts in vital health and nutrition programs. Critics argue this reinforces a long-standing Republican miscalculation: that tax cuts for the rich will spur widespread economic growth. Decades of research suggest otherwise; such cuts fail to deliver the broad-based prosperity often promised.
Heather Boushey, a senior research fellow at Harvard Kennedy School’s Reimagining the Economy Project, and David Mitchell from the Washington Center for Equitable Growth, emphasize that inequality undermines economic potential. Rather than stimulating demand or investing in the workforce, the GOP megabilll, they argue, rewards capital hoarding and worsens income gaps.
Inequality Seen as Barrier to Long-Term Growth
Beyond being a questionable fiscal strategy, experts view the bill as a moral and structural misstep. Boushey’s research indicates that sustainable economic growth hinges on inclusive prosperity. She notes that in periods when the wealth gap widened significantly, both economic mobility and growth weakened. Inequality, they contend, does more than skew income distribution; it undercuts the very institutions that support a healthy economy.
According to Boushey and Mitchell, when prosperity is concentrated at the top, it distorts market demand, limits the pool of skilled workers, and prevents broader participation in economic progress. They warn that the GOP megabill, rather than unlocking the nation’s economic potential, risks repeating policy failures of the past by prioritizing wealth concentration over equitable growth.
As the bill returns to the House, lawmakers face mounting pressure to reconsider its priorities. With economic data and decades of policy research challenging the GOP’s approach, the debate over how to foster genuine, long-term prosperity in America is far from over.
Visit Enterprise Wired for most recent information.
