Trump’s tax cut could mean a nearly half-trillion-dollar cut to Medicare starting in 2027, CBO warns
Key Takeaways
The $3.4 trillion that the tax and spending law adds to the federal deficit over the next decade means that many Medicare programs could see cuts.
Article Overview
Quick insights and key information
3 min read
Estimated completion
personal finance
Article classification
August 16, 2025
05:41 PM
Fortune
Original publisher
·MedicareTrump’s tax cut could mean a nearly half-trillion-dollar cut to Medicare starting in 2027, CBO warnsBy Stephen GrovesBy The Associated PressBy Stephen GrovesBy The Associated Press President Donald Trump at a White House event on July 30 with Health and Human Service Secretary Robert F
Kennedy, Jr., left, and Administrator of the Centers for Medicare and Medicaid Services, Mehmet Oz, right.John McDonnell—AP PhotoThe federal budget deficits caused by President Donald Trump’s tax and spending law could trigger automatic cuts to Medicare if Congress does not act, the nonpartisan Congressional Budget Office reported Friday
The CBO estimates that Medicare, the federal health insurance gram for Americans over age 65, could potentially see as much as $491 billion in cuts from 2027 to 2034 if Congress does not act to mitigate a 2010 law that forces across-the-board cuts to many federal grams once legislation increases the federal deficit
The report from CBO showed how Trump’s signature tax and spending law could put new pressure on federal grams that are bedrocks of the American social safety net
Trump and Republicans pledged not to cut Medicare as part of the legislation, but the estimated $3.4 trillion that the law adds to the federal deficit over the next decade means that many Medicare grams could still see cuts
In the past, Congress has always acted to mitigate cuts to Medicare and other grams, but it would take some bipartisan cooperation to do so
Democrats, who requested the analysis from CBO, jumped on the potential cuts. “Republicans knew their tax breaks for billionaires would force over half a trillion dollars in Medicare cuts — and they did it anyway,” said Rep
Boyle, the top Democrat on the House Budget Committee, in a statement. “American families simply cannot afford Donald Trump’s attacks on Medicare, Medicaid, and Obamacare.” Hospitals in rural parts of the country are already grappling with cuts to Medicaid, which is available to people with low incomes, and cuts to Medicare could exacerbate their shortfalls
As Republicans muscled the bill through Congress and are now selling it to voters back , they have been highly critical of how CBO has analyzed the bill
They have also argued that the tax cuts will spur economic growth and pointed to $50 billion in funding for rural hospitals that was included in the package
Introducing the 2025 Fortune Global 500, the definitive ranking of the biggest companies in the world
Explore this year's list.
Related Articles
More insights from FinancialBooklet