The U.S. Capitol on Oct. 9, 2024. (Photo by Jane Norman/States Newsroom)

WASHINGTON — The nonpartisan Congressional Budget Office released detailed analysis Wednesday showing Republicans’ “big, beautiful bill” would increase federal deficits by $2.4 trillion during the next decade.

CBO projects that if enacted as written, the legislation would result in 10.9 million people losing access to health insurance by 2034, a number that includes “1.4 million people without verified citizenship, nationality, or satisfactory immigration status who would no longer be covered in state-only funded programs in 2034.”

The score is the most up-to-date analysis by Congress’ official scorekeeper on how the sweeping tax and spending cuts package the House approved last month will impact the federal budget in the years ahead.

Republicans have been highly critical of the CBO’s assessment of the legislation’s real-world impacts, arguing that keeping tax rates as they are now, instead of letting them rise at the end of the year when the 2017 GOP tax law expires, will boost economic growth.

House Majority Leader Steve Scalise, R-La., lambasted the CBO during a press conference shortly after the report came out, arguing its economic growth projections haven’t been completely accurate.

“This bill will actually reduce the deficit, if you recognize the historical economic growth that has always been there,” Scalise said. “To say you’re going to get 1.8% growth. At a minimum, we think you can get 2.5 to 4% growth. Scott Bessent, the Treasury secretary, says over 4% economic growth. So I get that we’ve got to play by the rules of the referee, but the referee has been wrong.”

During the last decade, U.S. growth only surpassed 3% during one year, according to data from the U.S. Bureau of Economic Analysis.

Gross domestic product growth measured 2.5% in 2014, 2.9% in 2015, 1.8% in 2016, 2.5% in 2017, 3% in 2018, 2.6% in 2019, -2.2% in 2020 during the beginning of the coronavirus pandemic, 6.1% in 2021, 2.5% in 2022, 2.9% in 2023 and 2.8% in 2024. 

White House budget director Russ Vought posted on social media that the CBO score “confirms what we knew about the bill at House passage.”

“The bill REDUCES deficits by $1.4 trillion over ten years when you adjust for CBO’s one big gimmick–not using a realistic current policy baseline,” Vought wrote. “It includes $1.7 trillion in mandatory savings, the most in history. If you care about deficits and debt, this bill dramatically improves the fiscal picture.”

Disagreement over the ‘big beautiful bill’

GOP lawmakers have also sought to brush aside criticism from some of their own members, including Kentucky Sen. Rand Paul and Wisconsin Sen. Ron Johnson, who both argue the legislation must cut spending more to reduce the federal deficit in the long run.

Billionaire and former Trump administration staffer Elon Musk has also become increasingly vocal about his opposition to the package, writing on social media this week that the “massive, outrageous, pork-filled Congressional spending bill is a disgusting abomination.”

The House voted mostly along party lines in May to send the sweeping spending and tax cuts package to the Senate, which is expected to debate and amend the legislation in the weeks ahead.

CBO’s analysis will likely inform some of that conversation, and help senators better understand how the policy changes proposed by their House colleagues would affect state government budgets and the communities they represent. 

The CBO previously shared analysis of each of the 11 bills that make up the package, but those didn’t reflect several changes GOP House leaders made just hours before the floor vote in that chamber.

Updated numbers

The updated projections show Republicans’ plan to extend the 2017 tax law and make other tweaks to tax policy would increase the deficit by $3.754 trillion during the next decade. That increase to the deficit caused by the tax changes, which CBO has also found would decrease resources for low-income families over the next decade while increasing resources for top earners, would be partly offset by spending reductions on certain programs.

The Armed Services Committee’s bill would increase deficits by $144 billion, more than the $100 billion ceiling Republicans envisioned in the budget outline that was supposed to set guardrails on the package. Homeland Security’s provisions would increase deficits by $79 billion. And the Judiciary Committee’s language would increase deficits by $9 billion during the 10-year budget window.

The section of the package drafted by the Energy and Commerce Committee, which would make substantial changes to Medicaid and several other programs within the panel’s jurisdiction, would decrease spending by $1.086 trillion during the 10-year budget window.

The panel’s bill has four subcategories: energy, environment, communications and health. The health provisions, which include substantial changes to Medicaid, would reduce federal spending by $902 billion between 2025 and 2034.

Language barring Medicaid from covering gender transition procedures for anyone in the state-federal health program would reduce federal spending by $2.6 billion during the next decade.

Requiring some people on Medicaid to work, participate in community service or attend educational programs for at least 80 hours a month would reduce federal spending by $344 billion during the next 10 years.

Blocking any Medicaid funding from going to Planned Parenthood would cut federal costs by $261 million during the 10-year budget window. Federal law already bars health care programs like Medicaid from covering abortions unless the pregnancy is the result of rape or incest, or it endangers the life of the woman.

Separate analysis from CBO, released later Wednesday, projects that 7.8 million people would lose access to Medicaid because of the policy changes laid out in the House GOP bill. Another 2.3 million would lose access to health insurance due to changes to tax policy and 1.3 million people would no longer be able to purchase health insurance through the Affordable Care Act marketplace.

CBO estimates that about 500,000 people would be impacted by interactions among the various health care policy changes. That number, subtracted from the numbers of those who would lose access, leads  to a total of 10.9 million people losing access to health insurance by 2034.  

Democratic criticism

Energy and Commerce Committee ranking member Frank Pallone Jr., a New Jersey Democrat, wrote in a statement that it’s “shocking House Republicans rushed to vote on this bill without an accounting from CBO on the millions of people who will lose their health care or the trillions of dollars it would add to the national (deficit).

“The truth is Republican leaders raced to pass this bill under cover of night because they didn’t want the American people or even their own members to know about its catastrophic consequences.”

The Agriculture Committee’s provisions, including pushing off some of the cost of the Supplemental Nutrition Assistance Program to states, would reduce federal spending by $238 billion during the next decade.

The Education and Workforce Committee’s language would decrease federal spending by $349 billion. The Financial Services section of the package would reduce federal spending by $5 billion. Natural Resources would lower spending by $18 billion. And Transportation and Infrastructure would reduce spending by nearly $37 billion. 

The Oversight and Government Reform bill would decrease spending by $12 billion, significantly less than the minimum of $50 billion the panel was supposed to cut under the reconciliation instructions included in the budget resolution. 

Ariana Figueroa contributed to this report. 

Phil Tritz, Jeff Schwartz and Matt Swan, left to right, all AmeriCorps volunteers from New Orleans, work with Habitat for Humanity building homes for Hurricane Katrina victims in Rockefeller Plaza on Sept. 23, 2005, in New York City. Habitat for Humanity, along with the NBC News "Today" show and the Warner Music Group, planned to build around 20 homes with thousands of volunteers working 24 hours a day for five days, starting on Sept. 26. (Photo by Michael Nagle/Getty Images)

WASHINGTON — Hillary Kane learned on a Saturday morning in April that within days, she would lose AmeriCorps funding for two programs that match mentors with West Philadelphia high schoolers and first-generation college students — both vulnerable groups at risk of not completing diplomas and degrees.

Kane, director of the Philadelphia Higher Education Network for Neighborhood Development, dreaded calling her AmeriCorps members to say the federal government had just terminated their positions in the nationwide service program. It embeds nearly 200,000 Americans each year in community nonprofits, schools and other organizations.

“My first thought was just a string of expletives, just that sinking feeling in the pit of your stomach,” she said, recalling the April 26 morning.

The federal agency dedicated to community service and volunteerism, which works in close partnership with states, is the latest target since President Donald Trump began his second term with an aggressive campaign to dismantle programs and slash the federal workforce.

The agency abruptly cut $400 million, or 41% of its budget, and placed 85% of its staff on administrative leave last month, according to court records.

AmeriCorps had provided $960 million to fund 3,100 projects across the United States each year, according to general undated figures available on the agency’s website.

Two of Kane’s grants were abruptly canceled as part of the cuts, and as of May 20, she’ll lose nearly 30 AmeriCorps members.

“They’re literally just left stranded,” she said. “You know, I have members who are single moms with kids and suddenly don’t have insurance, or at least by the end of the month they won’t.”

Five of Kane’s members were placed in three high schools in West Philadelphia helping students with career exploration, resumes and college applications. They also provided recreation activities after school.

“We’re in under-resourced schools,” Kane said. “We’ve got schools that have one counselor for 300 students, and they’re not even primarily a college counselor, right? They’re guidance counselors who are dealing with all kinds of other issues.”

Even more short-staffing

The cuts have produced upheaval for many nonprofits.

AmeriCorps members serve various roles in organizations that support environmental conservation projects, rebuild after natural disasters, prepare adults for the GED exam, tutor children and more.

Rick Cohen, of the National Council of Nonprofits, said the announcement was a blow to community organizations that are already stretched thin.

“Groups that were already short-staffed and facing all these other headwinds are now even further short-staffed and trying to figure out how to keep things going and how to keep helping people,” said Cohen, the chief communications officer and chief operating officer for the advocacy organization.

“It’s a very difficult time for a lot of people in the nonprofit sector because you never want to have to tell somebody that’s coming to you for help that you can’t help them, and that there’s not somewhere else for them to turn,” Cohen said.

Aaron Gray, who helped run an AmeriCorps program serving at-risk youth in Pennsylvania’s Allegheny County from 1997 to 2017, said “it’s a shame.”

Over the years as an assistant director, Gray placed thousands of service members with community organizations, faith-based programs and schools.

“I think this is gonna be detrimental. AmeriCorps has been around since the 90s, and it took a long time to build up to this, and it’s just being eviscerated overnight. If it survives, or if it’s brought back at some later point, it’s going to take a generation to rebuild.”

Clinton administration

Congress created AmeriCorps in 1993 when President Bill Clinton was in office. Then titled the Corporation for National and Community Service, the agency absorbed other government service programs including Volunteers in Service of America, or VISTA, created in 1964 to combat poverty, and the National Civilian Community Corps, referred to as NCCC, created in 1992 to assist natural disaster recovery.

The agency grew to include FEMA Corps in 2012 and Public Health AmeriCorps in 2022, among other specialized programs.

Service members, who are not federal employees, are provided a meager stipend of a few hundred dollars a week and receive an education award to pay for college or student loans upon completion of service, which typically lasts just under a year. As of 2024, the award was roughly $7,300.

Members, who range in age from young adults to senior citizens, can also receive health insurance while serving. While participants are not allowed to apply for unemployment, some can seek food assistance.

The administration terminated all NCCC programs in mid-April. Then, late on Friday, April 25, more than 1,000 grantees were told to pull their members from service immediately, according to court filings.

AmeriCorps did not respond to questions about the cuts.

Lawsuits filed

Two lawsuits challenging the cuts are working their way through the federal courts. Fourteen organizations, the union representing AmeriCorps staffers and three individual plaintiffs who were AmeriCorps members filed suit in U.S. District Court for the District of Maryland on May 5.

The nonprofits bringing the lawsuit are based in California, the District of Columbia, Illinois, Iowa, Maine, Maryland, Michigan, Minnesota, New Jersey, New York, North Carolina, Pennsylvania, South Dakota and Virginia.

Plaintiffs say the immediate termination of grants has caused irreparable harm to nonprofits and AmeriCorps members who have now lost income, health insurance and large portions of their education awards, according to the complaint.

Plaintiff J. Doe 3 relocated to Fayetteville, North Carolina, for a second year of service, embedded with the Kingdom Community Corporation, a nonprofit that helps first-time homebuyers learn how to avoid foreclosure and that provides counseling certified by the Department of Housing and Urban Development.

According to the 55-page complaint, Doe 3 began service in February and was engaging with community members on a daily basis, answering anywhere from 25 to 75 calls. Doe 3 planned to use the education award to continue higher education.

“The sudden cancellation of Doe 3’s AmeriCorps position has left them in a new city, without a job, lacking the experience, skill building, and community they signed up for,” according to the complaint.

States left reeling

States are also affected by the cuts.

AmeriCorps’ structure puts the agency in close connection with states. Each state government establishes its own commission to determine which priorities and organizations receive the annual federal dollars.

For example, in Kane’s state of Pennsylvania, more than 8,500 members were placed in various roles at 1,000 nonprofits in 2024. The state’s commission received $38.8 million in federal dollars, while local dollars supplemented the rest, reaching $54.8 million in total funding for the year, according to the latest AmeriCorps annual state-by-state reports.

On April 29, state attorneys general from nearly two dozen states and the District of Columbia sued the administration, alleging the cuts were illegal.

The 123-page complaint details how U.S. DOGE Service officials arrived at AmeriCorps offices in D.C. on April 8 and began working with the interim agency head, Jennifer Bastress Tahmasebi, to plot program cuts.

“This case presents only the latest chapter in an ongoing saga, as the Administration attempts to dismantle federal agencies without Congressional approval,” according to the court filing.

States that brought the legal challenge include Arizona, California, Colorado, Connecticut, Delaware, Hawaii, Illinois, Kentucky, Maine, Maryland, Massachusetts, Michigan, Minnesota, Nevada, New Jersey, New Mexico, North Carolina, Oregon, Pennsylvania, Rhode Island, Vermont, Washington and Wisconsin.

White House response

In a statement provided to States Newsroom Thursday, the White House defended the cuts.

“AmeriCorps has failed eight consecutive audits and identified over $45 million in unaccounted for payments in 2024 alone. President Trump is restoring accountability to the entire Executive Branch,” said spokesperson Anna Kelly.

Editor’s note: D.C. Bureau Senior Reporter Ashley Murray served in AmeriCorps in 2011.