The recent domestic policy package passed by House Republicans could swell the U.S. deficit to $2.8 trillion over the next decade, a significant elevation from previous estimates, according to the latest analysis by Congress' nonpartisan scorekeeper, the Congressional Budget Office (CBO).

Originally, the CBO had pegged the cost of the package at $2.4 trillion. This initial estimate did not account for potential changes in economic growth, inflation, and particularly, interest rates. The Republicans had been optimistic about the new "dynamic" analysis which considered these factors, hoping it would show a reduced fiscal impact due to stimulated economic growth.

However, the report highlighted that any positive economic growth, estimated at an average increase of 0.5% over a decade, would be overshadowed by the detrimental effects of rising interest rates. These are expected to add approximately $440 billion to the national debt payments over the same period. Furthermore, the CBO anticipates a slight increase in inflation over the first five years following the bill's enactment.

As the Senate GOP hurries to amend the House-approved "One Big Beautiful Bill Act" to align with President Donald Trump's campaign promises, they face a tight deadline to get a revised bill on the President's desk by July 4th.

Amid these developments, a "distributional" analysis by the CBO last week shed light on the bill's impact on different income groups. The findings suggest that the lowest-income households in the U.S. could see a reduction of $1,600 annually in federal resources, whereas the highest-income households might gain an additional $12,000.

These revelations have provided Democrats, like Rep. Brendan Boyle of Pennsylvania, the top Democrat on the House Budget Committee, with ammunition to critique the bill fiercely. Boyle expressed disappointment, criticizing the Republican belief that "tax breaks for billionaires would magically pay for themselves."

As debates continue and the bill undergoes further revisions, all eyes will be on the Senate's ability to refine and advance the legislation in a way that aligns fiscal responsibility with economic growth aspirations.