Trump Tax Law to Add $3.4T to US Deficit Says CBO | Balance of Power: Late Edition 7/21/2025

US Fiscal Policy & Budget - CBO projects President's tax and spending law will add $34 trillion to US deficits over the next decade, reflecting a $45 trillion drop in revenues and $11 trillion decline in spending through 2034 [6] - Nearly two-thirds of Americans disapprove of the President's handling of inflation, with half saying Trump's policies have left them financially worse off [7] - White House and Congressional Republicans disagree with CBO's estimates, undermining its role as the gold standard for congressional bill estimates [9] - The White House claims the President is fiscally responsible and that the tax cut is the largest for working families and middle-class Americans [10] - CBO's analysis calculates the new legislation would add $34 trillion to the deficit over the next decade [65] - Senate Republicans requested a CBO score including dynamic scoring and the current policy baseline, which would reduce deficits by $366 billion over a decade [73] - The bill will dramatically increase the deficit, impacting future generations [75] Federal Reserve & Monetary Policy - A Republican member of Congress made a criminal referral against Fed Chair Jay Powell [4] - The White House reiterates it has no plans to fire Jerome Powell [4][17] - The Federal Reserve, under the Federal Reserve Act, is responsible for acquiring and maintaining its own buildings, paying for them out of its own revenues [20] - The President is trying to put pressure on Jay Powell, but firing him doesn't make sense as Powell would likely go to court [21][22] - The President's actions may set off market reactions he won't like [23] - The President is playing with fire and risking inflationary expectations by compromising the Federal Reserve's independence [28] - The right approach for the Fed is to wait and see, as the trade war is creating uncertainty [29][31] Trade & Tariffs - EU officials are set to meet to discuss how to respond to a possible no-deal trade scenario with the US [5] - The administration teases the potential for more trade letters as the August 2 deadline approaches [5][13] - Many trade deals have been unbalanced, with countries agreeing to pay no tariffs or, in the case of China, 10% tariffs, while the US puts much higher tariffs on them [12] - The EU has announced plans to retaliate if tariffs go into effect [13] - The trade war is making it harder for the President to lower prices [31] - Tariffs are beginning to show up in the economy [30] - Tariffs are accomplishing the opposite of what they want to accomplish, hurting domestic sectors and making it more expensive to produce [34][35] US Politics & Redistricting - Texas lawmakers are poised to redraw the state's congressional maps in a bid to create five new winnable seats for the Republican Party next year [5] - Republicans are planning to redraw congressional maps in Texas, hoping to secure more seats in the House during the midterms [42] - President Trump endorsed the move as a step to bolster his House majority by ensuring more Republican seats [43] - There is no technical ban on mid-decade redistricting in Texas [47] - Republicans believe they can pick up as many as five seats in Texas [48] - Democrats may consider congressional redistricting if Texas goes through with its plan [85]