Elon Musk called President Trump’s spending bill the “Debt Slavery Bill” on X in June, saying it would raise the debt ceiling by $5 trillion. The debt ceiling sets the legal limit on how much money the federal government can borrow. Senator Rand Paul shared similar concerns about the borrowing increase. On July 4th, Independence Day, Congress passed what Trump calls his “One Big Beautiful Bill“.
The bill provides tax reductions for high earners while cutting government programs for health and food safety. About 60% of the tax benefits go to people earning over $217,000 per year, while the bill reduces Medicaid funding by $1 trillion over ten years. The changes will result in nearly 12 million Americans losing their health coverage. Trump has assured supporters, “You’re not going to feel any of it.” He promises, “your Medicaid is left alone.” Though budget analysts project different outcomes.
Financial analysis shows conflicting expert opinions
Elon Musk’s reactions to this bill that Trump just passed are driven by two main reasons. He says the spending policy will add $3.4 trillion to the national debt over ten years and could cost millions of jobs. The bill also affects his business interests by removing tax credits for electric vehicles and ending clean energy subsidies. These programs help Tesla compete with traditional automakers. Tesla has received about $30 billion in government support since 2010, and losing these programs would make future growth more difficult for the company.
Independent experts looked at what the bill would actually cost. The Congressional Budget Office expects the bill to add $3.3 trillion to the national debt over ten years. But the White House predicts the bill will reduce government debt by $2 trillion over the same period. When Trump said that taxes would rise 68% without the bill, fact-checkers found the actual increase would be 7.5%. Tax expert Elena Patel said the bill “will take money from the poorest and give it to the richest.”
Some economists who see benefits in the short term still worry about future problems. “Most studies find that the bill will help the economy for a short time, but over time it will hurt the economy,” says Bobby Kogan. He works at the Center for American Progress, a policy research group. Mark Zandi from Moody’s Analytics, a financial research firm, agrees. “It will create large budget gaps and a high debt load that keeps growing,” he says. The American Bankers Association supports the bill and wrote a letter to lawmakers saying it provides “much needed tax relief” that would help the economy.
Read More: Trump Threatens to Deport Musk as Their Feud Heats Up
Trump’s “One Big Beautiful Bill” affects millions of Americans
The United States owes $36 trillion in total debt, with the U.S. owing $29 trillion to investors worldwide. With debt this high. Investors worry about getting paid back and charge higher interest rates. These higher rates make home loans and car loans more expensive for American families.
The bill cuts Medicaid funding, which will affect 71 million Americans with low incomes. This includes adults, children, pregnant women, the elderly, and people with disabilities who depend on the program for healthcare. Nearly 12 million Americans will lose their health coverage. Of those losing coverage, only 1.4 million are people without verified citizenship status, while the rest are American citizens.
Political fallout escalates between Musk and Trump
Elon Musk’s response to Trump’s legislation goes beyond this single disagreement. He said lawmakers who voted for the bill should “hang their heads in shame”. Musk also announced plans to start a new political party called the “America Party.” This party would reduce government spending by both Democrats and Republicans while supporting new technology over traditional industries. He has gained support from Republicans like Thomas Massie, who also oppose higher debt and program cuts.
The public disagreement created strong reactions from both sides. Supporters of Musk’s June post agreed that the debt increase posed risks. Critics like Brenden Dilley accused him of lying and “parroting the CBO.” Others said he should discuss concerns privately with Trump instead of making public statements. Musk’s early concerns matched what budget experts later found.
After the bill passed, Trump responded online. He wrote, “I took away his EV Mandate that forced everyone to buy Electric Cars that nobody else wanted… and he just went CRAZY!” The exchange shows that the Musk and Trump alliance is now ending.
Musk continued supporting Senator Rand Paul’s criticism. The White House called the Congressional Budget Office “partisan” when defending against the debt estimates. Officials tried to discredit the agency that provides budget analysis to Congress.
Business consequences hit Tesla and shareholders
Elon Musk’s reaction to Trump’s spending bill shows what happens when business interests clash with political power. Budget experts backed Musk’s warnings about the $3 trillion debt increase, while Republicans struggle between loyalty to Trump and fiscal concerns.
Tesla lost $152 billion in value during the conflict, but the public debate forced Americans to confront hard questions about spending and debt. Musk’s willingness to challenge Trump despite their past partnership proves that even powerful political relationships have limits.
Read More: Trump’s ‘Big Beautiful Bill’: Full Breakdown of What’s Included in the July 4 Legislation
