America's debt problem just got worse by $2 trillion with the Supreme Court's tariff ruling | Fortune

"It might make the average American consumer happy, but the decision could amount to trillions of dollars worth of lost government revenue over the next decade, and eventually come back to haunt the country's fiscal stability. As evidence mounted that tariffs were taking a toll on American shoppers and companies, the Supreme Court justices ruled 6-3 that Trump had exceeded his authority when he installed sweeping "emergency" tariffs on a number of trade partners. The decision was cheered by business coalitions, and markets surged on the news."

"One group that wasn't so happy was the Committee for a Responsible Federal Budget (CRFB), a nonpartisan organization focusing on fiscal sustainability. While many both in the U.S. and abroad opposed Trump's signature trade policy, his tariff regime had already brought in billions in government revenue, with trillions more baked into the fiscal accounting for the rest of Trump's term and beyond. Those projected receipts evaporated on Friday, and as a result, America's already dramatic fiscal outlook suddenly deteriorated even further."

"For years, the country has been unable to rein in its debt burden. Lawmakers and presidents from both parties have been unwilling to significantly raise taxes or cut essential spending, actions that would help balance the budget. Earlier this month, the nonpartisan Congressional Budget Office projected that national debt as a percentage of GDP, currently sitting at around 100%, would rise to 120% in 10 years. As the burden rises, so too do the required interest payments to service that debt."

Supreme Court invalidated large portions of the Trump administration's emergency tariffs, ruling 6-3 that the tariffs exceeded presidential authority. The decision removed a major source of federal revenue that had produced billions and accounted for trillions in projected receipts over the next decade. Business coalitions welcomed the ruling and markets rose, while fiscal analysts warned of deteriorating budget projections. The Committee for a Responsible Federal Budget estimated the ruling would worsen the deficit by about $2 trillion. Rising national debt, already near 100% of GDP, is projected to reach 120% in ten years, increasing interest costs and straining fiscal stability.

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