Can Trump fix the national debt? GOP senators, investors and even Elon Musk have doubts
FILE-President Donald Trump speaks to reporters at the White House on January 30, 2025 in Washington, D.C. (Photo by Chen Mengtong/China News Service/VCG via Getty Images)
President Donald Trump is facing skepticism from Republican senators, global investors, voters and even Elon Musk regarding his capability to improve the nation’s debt.
Trump is attempting to fix the federal debt with a multitrillion-dollar tax breaks package. However, concerns are rising for many about the bill as the tax and spending cuts approved by the House are now moving to the Senate.
The Associated Press reported that four Republican holdouts would be enough to stop the bill in the Senate, where the party holds a three-seat majority.
Trump repairing the national debt is concerning for some
What they're saying:
Elon Musk, who was until recently part of President Donald Trump's inner sanctum as the leader of the Department of Government Efficiency, told CBS News: "I was disappointed to see the massive spending bill, frankly, which increases the budget deficit, not just decreases it, and undermines the work that the DOGE team is doing."
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The Associated Press reported that investors are demanding the government pay a higher premium to keep borrowing as the total debt has crossed $36.1 trillion. Additionally, the interest rate on a 10-year Treasury Note is around 4.5%, up dramatically from the roughly 2.5% rate being charged when the 2017 tax cuts became law.
Some economists expect additional debt would keep interest rates higher and slow economic growth as the cost of borrowing for homes, cars, businesses and even college educations would increase, the AP noted.
Republican Sens. Ron Johnson of Wisconsin and Rand Paul of Kentucky have both expressed worry about the likely national deficit increases, with Paul saying on CBS' "Face the Nation" that there are enough Republican senators to stall Trump’s bill until deficits are addressed.
"I think there are four of us at this point" who would oppose the legislation "if the bill, at least, is not modified in a good direction," Paul said.
He added, "The GOP will own the debt once they vote for this."
Federal debt continues to surge
By the numbers:
The tax and spending cuts that passed the House last month would add over $5 trillion to the national debt in the next 10 years if all of them are allowed to continue, the Associated Press reported, citing the Committee for a Responsible Financial Budget, a fiscal watchdog organization.
According to the AP, investors are demanding the government pay a higher premium to keep borrowing as the total debt has crossed $36.1 trillion. The interest rate on a 10-year Treasury Note is around 4.5%, up dramatically from the roughly 2.5% rate being charged when the 2017 tax cuts became law.
Trump relying on tariff revenues to improve deficits
Dig deeper:
The White House is also banking that tariff revenues will help cover the additional deficits, even though recent court rulings cast doubt on the legitimacy of President Donald Trump proclaiming an economic emergency to impose sweeping taxes on imports.
In April, Trump announced his near-universal tariffs stating that his policies would create enough new revenues to start paying down the national debt. His comments coincided with responses by aides, including Treasury Secretary Scott Bessent, that yearly budget deficits could be more than halved.
The Source: Information for this story was provided by the Associated Press, which cites comments from Republican lawmakers and Elon Musk. The AP also refers to data from the Committee for a Responsible Financial Budget. This story was reported from Washington, D.C.