CBO Estimates One Big Beautiful Bill Will Add $3.4 Trillion to Deficits Over Decade

The Congressional Budget Office (CBO) has released its final estimate for the One Big Beautiful Bill Act, projecting that the legislation will add $3.4 trillion to federal deficits over the next ten years. This figure reflects a $4.5 trillion decrease in tax revenues and a $1.1 trillion reduction in spending through 2034. The CBO calculated this estimate using current law, which assumes that taxes would rise in 2023 due to expiring tax provisions.
However, the CBO also analyzed the bill using a "current policy baseline," which assumes the 2017 Trump tax cuts would remain permanent. Under this alternative method, the bill would reduce the deficit by $366 billion. This novel accounting approach suggests that extending the Trump tax cuts indefinitely would not add to the deficit, a contention disputed by critics.
The One Big Beautiful Bill Act, signed into law by President Donald Trump, primarily expands and makes permanent the expiring tax provisions from the 2017 Tax Cuts and Jobs Act. It also includes funding for border security, defense spending, and cuts to Medicaid and the Supplemental Nutrition Assistance Program (SNAP). The bill allocates $129 billion for immigration enforcement and border security, while defense spending increases by $150 billion over a decade.
White House officials argue that economic growth spurred by the bill will offset its deficit impact. However, independent analyses have generally found the legislation to increase deficits, despite administration claims of deficit reduction through economic expansion.

Published: 7/21/2025