Final OBBBA Score Confirms Long Road to Fiscal Recovery

Today, the Congressional Budget Office (CBO) released its final conventional score of the recently-enacted reconciliation bill known as the One Big Beautiful Bill Act (OBBBA). CBO estimates that the legislation will add $3.4 trillion to the primary deficit through 2034. With interest, we estimate it would increase borrowing by $4.1 trillion.

CBO’s score does not account for macroeconomic “dynamic” effects, which would likely result in even more borrowing – as the law’s economic effects are likely to push up interest costs more than revenues. The score also does not account for the fiscal impact of extending various expiring parts of the law; we previously estimated the law would increase borrowing by $5.5 trillion if made permanent.

The following is a statement from Maya MacGuineas, president of the Committee for a Responsible Federal Budget:

It’s still hard to believe that policymakers just added $4 trillion to the debt. Many supporters of this law have spent months or years appropriately fuming about our unsustainable fiscal situation. But when they actually had an opportunity to fix it, they instead made it $4 trillion worse.

We’ll hear a lot of excuses, of course. Claims that economic growth will cover the costs or that spending cuts will wildly exceed expectations, or that they shouldn’t have to pay for extending temporary provisions in the law. None of these excuses pass muster.

Yes, we should expect a shorter-term economic sugar high as stimulus makes its way through the economy. But modelers from across the ideological spectrum universally agree that any sustained economic benefits are likely to be modest, or negative, and not one serious estimate claims this bill will improve our fiscal situation. Rather, positive growth effects are likely to be swamped by the effects of higher debt and interest rates.

Though dwarfed by the amount of lost revenue, the legislation does include a number of important spending reductions. But their savings are multiples short of what is needed, and  there are already galling and irresponsible efforts underway to prevent many of them from taking effect. 

When it comes to temporary provisions, the bill’s advocates are trying to have their cake and eat it too. No one should be fooled by those who quoted the current law cost when the original tax cuts were enacted in 2017 and set to expire to minimize the price tag, but use the “current policy” effect of extension this time, or by their cynical game of using a score that mixes different baselines in this bill – all to try to hide the actual debt run-up they endorsed. If the expiring provisions in this bill are instead extended, it would add another $1.5 trillion to the ten-year cost – up from more than $4 trillion as written. 

This is a dangerous game we are playing. It has been going on for years, and it was brought to new levels with this bill. And it is time to stop. 

If there is another reconciliation bill, it should focus entirely on deficit reduction. 

Meanwhile, lawmakers should hold tight to the modest but important deficit reduction measures that did make it into this bill – making sure they take effect and building on them where possible. If adjustments are necessary, they ought to be paid for twice over, under "Super PAYGO,” which requires that all new spending or tax cuts be paired with both full offsets and a down payment on deficit reduction until our deficit and debt are back down to a manageable level. Anything short of this is going to weaken our economy and our country.

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For more information, please contact Matt Klucher, Assistant Director for Media Relations, at klucher@crfb.org.