Instant view: U.S. House approves Trump’s mega budget bill
(Reuters) -The Republican-controlled U.S. House of Representatives passedPresident Donald Trump’s massive tax-cut and spending bill on Thursday.
The megabill, which makes permanent the lower individual and business tax rates in Trump’s 2017 tax cut package, will add $3.4 trillion to the nation’s $36.2 trillion debt over the next decade.
It also reduces the reach of the Medicaid health plan and eliminates incentives for clean energy while increasing spending in immigration enforcement and on the military.
Trump will sign the bill he championed on Friday at 5 p.m., the White House said.
QUOTES:
RICHARD FRANCIS, SENIOR DIRECTOR, FITCH, NEW YORK:
“Fitch has long expected significant tax cuts in its baseline fiscal projections and the passage of the bill won’t significantly change our baseline. We expect the general government deficit to rise next year to above 7% of GDP and debt to approach 120% of GDP by 2026.”
RICK MECKLER, PARTNER, CHERRY LANE INVESTMENTS, NEW VERNON, NEW JERSEY:
“It was certainly expected. The administration has shown they were able to marshal the votes in both the Senate and the House for their plans. Investors who have driven this market higher are betting that the potential for growth in the economy from the bill exceeds the potential for inflation. It’s probably a process that has to play out as the tariff policies move forward and as the tax policy is put into place. I don’t know if it’s possible, particularly in light of the labor numbers today, to provide this level of stimulus and not have it be inflationary. The one wild card could be a significant drop in energy prices.”
JED ELLERBROEK, PORTFOLIO MANAGER, ARGENT CAPITAL MANAGEMENT, ST LOUIS, MISSOURI:
“It’s positive for GDP growth next year, for corporate earnings next year, and for the stock market near term as well, as economist projections show like a 30 to 50 basis point benefit to GDP growth next year, which would boost probably corporate earnings by a couple percent.”
“I don’t think that this final vote is going to be treated by the market like a huge event in itself. The event has been unfolding over weeks and has been priced in along the way.”
(Reporting by Caroline Valetkevitch, Davide Barbuscia and Carolina Mandl; Editing by Cynthia Osterman)
