Trump's budget bill gets a new, bigger price tag
Add Axios as your preferred source to
see more of our stories on Google.
Photo: Chip Somodevilla/Getty Images
The Congressional Budget Office released a new "dynamic" score of President Trump's "one, big beautiful bill" on Tuesday, estimating that it would increase budget deficits by as much as $2.8 trillion over the next decade.
Why it matters: The fresh score, which factors in the effect of both higher GDP growth and higher interest rates, exceeds CBO's previous estimate of $2.4 trillion in deficit costs.
- Republicans and Democrats will both seize on parts of the new analysis.
- But expect more GOP squabbling with the CBO's math, which effectively undermines the White House argument that many of the tax cuts will pay for themselves.
Zoom in: Republicans will likely agree the bill will increase real GDP growth, which the CBO puts at 0.5% higher over the decade, bringing in an additional $124 billion in revenue.
- But Democrats are expected to seize on its impact on interest rates, which CBO estimates will increase by an average of 14 basis points, resulting in an additional $441 billion in interest payments.
Between the lines: The new CBO analysis actually includes two estimates for how much the deficit would increase as a result of Trump's "big, beautiful bill."
- At the low end of the dynamic score, the deficit would increase by $2.8 trillion.
- After accounting for all costs associated with servicing the additional debt and other credits, CBO estimates that the bill would increase public debt by $3.3 trillion by 2034.
Zoom out: Scoring the effects of a given piece of legislation is always a matter of controversy.
- In 2022, Republicans argued the CBO underestimated the cost of President Biden's Inflation Reduction Act, which was originally credited with $238 billion in deficit reduction over a decade.
- But due to the popularity of some of the electric vehicle tax credits, a 2024 CBO analysis calculated the IRA would actually increase the deficit by $300 billion.
Democrats tend to be more skeptical of so-called dynamic scoring, which takes into account the effect of the tax and spending cuts across the entire economy, typically by boosting GDP.
- But they have embraced it when it suits them.
Go deeper: Earlier this month, the White House all but demanded that reporters use a CBO score that estimated Trump's tariffs would decrease the deficit by $2.8 trillion over 10 years.
- Kevin Hassett, the director of the National Economic Council, has suggested that Trump's budget bill will boost GDP growth to over 4% and lead to substantial deficit reduction.
