Despite false claims, OBBB Act reduces the deficit

By U.S. Sen. Mike Crapo
R-Idaho

With dozens of estimates, analyses and opinions on the “cost” of the One Big Beautiful Bill (OBBB) Act, the debate can seem complicated and confusing. While critics claim it will increase the deficit by over $3 trillion, the fact is compared to current tax policy, this legislation will reduce the deficit by nearly $400 billion.

Republicans asked our nonpartisan scorekeeper to estimate the cost of the legislation based on a more realistic scenario – that Congress would not allow a $4 trillion tax hike on the American people. According to that more accurate estimate, the legislation cuts federal spending by over $1.5 trillion and reduces the deficit by roughly $400 billion. That number does not include this Administration’s pro-growth agenda, which the Council of Economic Advisers (CEA) estimates will increase federal revenues by more than $4 trillion, totaling nearly $4.5 trillion in deficit reduction.

Opponents of President Trump’s agenda say the refusal to raise taxes on the American people by over $4 trillion will add to the deficit. This logic suggests that if we allowed the largest tax hike in history to go into effect, it would go toward paying down the national debt. Not once in my lifetime has a tax increase in Congress been used to pay down the deficit – it has always been used to increase government spending.

Idahoans intuitively understand that preventing a tax increase – simply maintaining existing tax rates—means the federal government will continue to collect roughly the same amount of revenue from one year to the next. Yet, in Washington, the failure to raise taxes is considered an increase in the deficit.

On the other hand, many federal spending programs are on autopilot – about $2.5 trillion of spending – which never count on government ledgers as increasing the deficit when they are renewed year over year. This intentional bias in our budgeting system was created to encourage more spending and higher taxes, and it needs to end. The OBBB finally levels the budgetary playing field by treating pro-growth tax policy the same way we treat certain spending programs.

Idahoans know the best way to address our national debt is not to tax hardworking Americans more—it is to grow the economy and spend less. The One Big Beautiful Bill Act achieves both.

As the CEA aptly observes, “By preventing the 2017 Tax Cuts and Jobs Act from expiring and adding the new provisions of the OBBB and the President’s proposals, we would not just prevent an economic downturn, but also raise growth, create jobs, boost incomes and ensure the U.S. is the most competitive business landscape in the world.” That means more federal revenue, created the right way.

With $1.5 trillion in mandatory savings, the OBBB exceeds spending reductions of past legislative efforts by hundreds of billions of dollars. Those savings, combined with projected economic growth, will significantly improve our nation’s fiscal trajectory. Over a ten-year window with this legislation in effect, the CEA estimates debt as a share of GDP will fall to 94 percent, compared to 117 percent if the Trump tax cuts had been allowed to expire.

Far from adding to the deficit, this legislation will finally put us on a path to sound financial footing as we power economic growth and curb spending.

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