The cost of Trump’s ‘big, beautiful bill’

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0:33Today is Friday, July 4th, and this is your FT News Briefing. U.S. President Donald Trump's signature budget bill got the green light. And the American jobs market is looking better than expected. Plus, can the U.K. Labor Party save the National Health Service? I'm Sonia Hudson, and here's the news you need to start your day.

1:03The U.S. Congress gave final approval yesterday to President Trump's massive budget legislation. That means the so-called Big Beautiful Bill is just a signature away from becoming law. Now, getting here wasn't easy. Democrats slammed the bill for its spending cuts on welfare programs. And some Republicans were worried about its fiscal impact. It passed the House of Representatives by just four votes. So what's in the bill anyway? Here to tell us is my colleague, Miles McCormick. He's our U.S. economics correspondent. Hi, Miles. Hey, Sonia. Okay, so every budget bill has two parts, impacts on taxation and then impacts on spending.

1:49Let's start with the first one. How does the Big Beautiful Bill change the U.S. tax code? So the fundamental purpose of this bill is to extend these sweeping tax cuts that Donald Trump brought in in 2017 during his first term and which were due to expire at the end of this year. And it also ends taxes on tips and overtime pay, which were key pledges by Donald Trump on the on the campaign trail. And by doing that, it pushes through roughly$4.5 trillion of net tax cuts, totally kind of overhauling the U.S. tax code in so doing. All right. Well, let's talk about changes to spending, the other half of this puzzle.

2:37What are the big changes there? So on one side, it increases spending for the military and for border security. And then on the other side of the column to pay for some of those increases and to pay for the tax cuts, it cuts spending big time in health care. We've got a 1.1 trillion reduction there over the next decade on welfare programs like the SNAP food aid scheme for lower income Americans. and it dials back support for clean energy that had been brought in by Trump's predecessor, Joe Biden, under his Inflation Reduction Act. So taken together, the tax cuts and some of the changes to spending, what is the overall fiscal impact of this new law?

3:28So altogether, the nonpartisan Congressional Budget Office estimates this is going to add $3.4 trillion to US debt levels over the next decade. Now that's disputed a little bit with the Trump camp arguing that the impact on deficits won't be as bad when taking account things like economic growth and tariff revenue. But the implication would be that there'll be a significant impact to the US's already swollen debt pile, pushing it above even World War II highs. And that was one of the most kind of controversial aspects of this bill that caused a lot of Republicans to hesitate before signing off on it.

4:11Well, Miles, this bill is hardly the first one to raise the U.S. debt. So what's the big deal this time around? I mean, why did we see such strong criticism from the Republican Party? I suppose it comes down to the fact that U.S. debt levels have swollen so exorbitantly over the last 20 years. And there's just fears among some in the Republican Party and more broadly, that it's putting the US on an unsustainable path, that by pushing up US debt levels, it's going to push up the amount of interest that the US has to pay on its debt going forward. And the warning from many economists and nonpartisan analysts has been that it just puts the U.S.

4:59debt and the bond market on an unsustainable path, leading to what some on Wall Street have warned could ultimately be a crack in the bond market and leave the U.S. in a position where it could struggle to actually fulfill its debt obligations. Miles McCormick is the FT's U.S. economics correspondent. Thanks, Miles. Thanks, Tonya.

5:26Well, here's some good news for the U.S. economy. Employers added way more jobs than expected last month, around 147 ,000. Analysts had estimated that all of the trade tariff uncertainty would cause companies to chill out on hiring, but they seemed to be moving forward anyway. And the unemployment rate also beat expectations. It fell slightly to 4.1%. The new data should lighten the pressure on the Federal Reserve to lower interest rates. And in turn, investors scaled back their bets on cuts after the data was released. The S &P 500 jumped 0.8 % yesterday.

6:14The UK National Health Service has become extremely unpopular, and that could have dire consequences for the health care system's future. More and more Brits say they want to find a way to fix it or they're going to look for alternatives in the private sector. So UK Health Secretary Wes Streeting announced a 10-year plan yesterday to try and address its most glaring faults. Here to tell us about the announcement and the reaction to it is Sarah Neville. She's the FT's Global Health Editor. Hi, Sarah. Hi, Sonia. It's good to be here. Good to have you. So just to take a step back for a moment, why are people so upset with how the NHS is run these days?

6:58Well, it's basically very simple. People are having such long waits for care. So about seven and a half million people are waiting for routine procedures, things like hip and knee replacements or cataracts, which don't feel at all routine if you're the person actually living with them. And it's also very hard in some parts of the country to get an appointment with a family doctor. So I think really the disenchantment is very directly linked to many people's experience of the National Health Service at the moment. So, Sarah, you've spoken to patients about this. Did they share any stories that really stuck out to you?

7:41I interviewed a young woman called Megan Riley, who was a champion skier. and she injured her hip while she was training for the London Marathon. And she approached her doctor's office and just got a text back telling her to take two paracetamol, you know, like Advil painkillers, and to rest it. And her physio said to her, you know, this isn't right. Somebody's got to look at this properly. And it did turn out to be a fairly serious injury. and she wouldn't have found that out if she hadn't paid privately to have a scan. Meghan is emblematic of her generation in that way. All those who can afford it are going private, leaving the service as no longer the universal service it once was, but perhaps potentially only serving the poorer Britons.

8:35Well, obviously the NHS wants to avoid a situation like that and they came out with this 10-year plan yesterday How is that supposed to transform the service? It's supposed to deliver three key shifts. Moving care from hospitals into the community, moving the NHS from an analogue to a digital service, and moving from a service focused on sickness to one focused on prevention. It's all intended to deliver more efficient care and treat people much earlier, and obviously as far as possible to prevent them getting sick in the first place, the NHS swallows up an absolutely enormous amount of public money and it's getting harder and harder to sustain that.

9:24Well, what will happen to the NHS if this plan doesn't convince the public that this is still a good system? The NHS is something that we Britons have always felt very strongly about and have seen it as a kind of repository of our national values. But I think if the next 10 years don't see a really significant improvement in people's day-to-day experience of the service, I really think that the case may become increasingly strident to move away from taxpayer funding and to perhaps look at another model of funding. Obviously, the plan that was launched yesterday, the government is very much betting on that being as transformative as they hope.

10:06We can only hope it is because I think if care continues to deteriorate as it has really over the last 15 years, then, as I say, I think that the service is going to fragment or rather the country is going to fragment to a degree because those who can afford to use the private sector will try to, and that's the very thing that was so triumphantly abolished in 1948 when our service was introduced. Sarah Neville is the FT's Global Health Editor. Thanks so much, Sarah. Thanks very much.

10:44Before we go, Hong Kong residents love traveling to Japan, but they're visiting a lot less this summer. The reason involves a prophecy. Four years ago, a Japanese graphic novel suggested the country would suffer an unspecified disaster around July 5th, 2025. There's history here. A 1999 version of the comic predicted a disaster in March 2011, which is the same month that Japan suffered a devastating earthquake and tsunami. So this summer, nervous tourists from Hong Kong canceled travel plans. So much so that airlines have cut flights and slashed the cost of package tours. You can read more on all these stories for free when you click the links in our show notes.

11:34This has been your daily FT News Briefing. Check back next week for the latest business news. The FT News Briefing was produced this week by Fiona Simon, Katya Kumkova, Ethan Plotkin, Kasia Brasalian, and me, Sonia Hudson. Our intern is Michaela Sia. We had help this week from Michael Lello, Peter Barber, and Gavin Kallman. Our acting co-head of audio is Topher Forges, and our theme song is by Metaphor Music.

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