The nonpartisan Congressional Budget Office (CBO) has released its latest analysis of H.R. 1 — President Donald Trump's "One Big Beautiful Bill Act" – and the legislation has now been scored as particularly detrimental to the federal deficit.
On Tuesday, the Wall Street Journal reported that the CBO found that the version of H.R. 1 that the House of Representatives passed in May would balloon the federal deficit by approximately $2.8 trillion over a 10-year period, even when factoring in the projected economic growth from the legislation.
"The CBO’s analysis of the House-passed bill undercuts one of Republicans’ main arguments for the legislation," the Journal's Richard Rubin wrote. "The bill’s authors have argued that critics are ignoring the economic boom that the tax cuts and President Trump’s other policies would create. That larger, faster-growing economy, they contend, would throw off enough extra tax revenue to cover the $2.4 trillion gap between the bill’s tax cuts and spending cuts."
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"The new CBO estimate says the opposite would happen," he continued. "The bill would, effectively, un-pay for itself."
According to the CBO's math, the U.S. economy would actually grow at a faster rate if Congress simply allowed Trump's 2017 tax cut legislation to expire,, rather than extend the tax cuts for another decade as H.R. 1 does. And the higher interest rates the CBO projects would come about as a result of H.R. 1's potential passage would lead to roughly $400 billion more in new costs, which would outweigh any potential economic growth.
While the CBO acknowledged that there would be short-term economic growth as a result of the tax cut extension, both the higher interest rates and higher federal deficits would quickly erase any positive impact the legislation has on the economy. When it downgraded the U.S. credit rating for the first time in history earlier this year, Moody's Analytics specifically cited a fear of higher budget deficits as the main reason investors were losing confidence in the U.S. government.
"Today’s CBO score will disappoint every Republican who hoped tax breaks for billionaires would magically pay for themselves," House Budget Committee ranking member Brendan Boyle (D-Pa.) told the Journal.
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Click here to read the Journal's full report (subscription required).
