Trump’s Law Expands Deficit, Cuts Social Spending

A new bill signed by U.S. President Donald Trump will increase the federal deficit by $3.4 trillion over 10 years and reduce social welfare programs.

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Australia
Trump

Australia

RBA Holds Interest Rates Steady with Easing Hints
On Tuesday morning, the Reserve Bank of Australia (RBA) released the minutes of its July meeting,
showing the board’s decision to keep the cash rate unchanged at 3.85%, defying market expectations of a 25 basis point cut.

The minutes indicated that the decision was made amid ongoing close evaluation of both global and domestic economic conditions.
The RBA described its current monetary policy stance as “moderately restrictive,”
citing slowing household credit growth and limited signs of consumption recovery.

Regarding the economic outlook, data showed that core inflation remains within the RBA’s target range of 2%–3%,
though near the upper limit. A temporary rise is expected in late 2025 as government energy subsidies phase out.
The labor market remains resilient, despite mixed signals regarding supply and demand balance.

Globally, the RBA noted that U.S.-China trade tensions remain within expected bounds, while geopolitical risks persist.
The U.S. economy continues to show strong growth, though a slowdown is anticipated in the second half of the year.

As for global monetary policy, most advanced economies show limited inclination to cut rates in 2025,
with broader easing expected in 2026. Meanwhile, the Bank of Japan continues its gradual rate hikes.

At the end of the meeting, board members discussed two options: maintaining the current rate or cutting it by 25 basis points.
They agreed that further monetary easing might be necessary later,
depending on evolving data—particularly inflation and labor market conditions.

Trump

Trump’s Spending and Tax Bill Adds $3.4 Trillion to Deficit
On Monday, the U.S. Congressional Budget Office (CBO) reported that the spending and tax bill signed by President Donald Trump earlier in July is projected to add $3.4 trillion to the federal deficit over the next decade.

The detailed report also stated that the new law would increase the number of uninsured individuals by 10 million by 2034.
The legislation includes major changes to social welfare and tax programs.

The Senate passed the bill by a single vote (51 to 50), following last-minute amendments by Republicans to secure majority support.
The House of Representatives later approved the bill by a margin of 218 to 214, and President Trump officially signed it into law on July 4.

The legislative package includes an extension of Trump’s 2017 tax cuts, large allocations for defense spending, and funding for a mass deportation program targeting undocumented immigrants, in line with Trump’s hardline immigration agenda.

According to the CBO report, part of the cost is offset by cuts to programs like Medicaid and SNAP (food assistance),
along with reduced funding for clean energy initiatives.

However, the report concluded that the estimated $1.1 trillion in spending cuts does not compensate for the projected $4.5 trillion drop in revenue, exacerbating the deficit compared to previous projections without the law.

Trump’s Law Expands Deficit, Cuts Social Spending

Trump’s Law Expands Deficit, Cuts Social Spending

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