Larry Summers Identifies 3 Key Reasons For Rising US Debt, But Doesn't Think Trump's 'Big Beautiful Bill' Is The Medicine The Country Needs

Former Treasury Secretary Lawrence Summers has sharply criticized the tax bill by the President Donald Trump administration amid the ongoing feud with Elon Musk.

What Happened: Describing the “Big Beautiful Bill” as a “prescription for deadly, dangerous decline,” Larry Summers listed three key reasons for the climbing U.S. debt burden in an X post.

According to him, the government has not introduced any big spending programs lately that could contribute to the debt.

“It's not that we've launched all kinds of big new spending programs,” he said in the post. The reasons for the mounting debt, according to Summers, include;

An increase in the population aged over 65 years, which allows them to draw entitlement benefits.
An increase in the costs of things the government pays for, including health care.
Lastly, the interest payments the Treasury is making.

In a following post, Summers highlighted that the ‘Big Beautiful Bill” takes on debt on a massive scale that the U.S. “can't afford.”

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Why It Matters: The Congressional Budget Office has estimated that tax changes from the “Big Beautiful Bill”, including extending provisions of the 2017 tax act, would lead to an increase in the federal deficit by $3.8 trillion.

The document also stated, "Household resources would decrease by an amount equal to about 2 percent of income in the lowest decile (tenth) of the income distribution in 2027 and 4 percent in 2033, mainly as a result of losses of in-kind transfers, such as Medicaid and SNAP."

On the other hand, resources would increase by an amount equal to 4% for households in the highest decile in 2027 and 2% in 2033, mainly because of "reductions in the taxes they owe."

Meanwhile, it also underscored a $698 billion reduction in federal subsidies from changes to the Medicaid program and $267 billion less in federal spending for the Supplemental Nutrition Assistance Program (SNAP).

Musk also called the bill a “disgusting abomination” earlier this week, which followed a very public spat on social media between President Trump and Musk on Thursday.

Price Action: The SPDR S&P 500 ETF Trust SPY and Invesco QQQ Trust ETF QQQ, which track the S&P 500 index and Nasdaq 100 index, respectively, rose in premarket on Friday. The SPY was up 0.34% at $595.05, while the QQQ advanced 0.29% to $526.30, according to Benzinga Pro data.