How do 2025 deficit estimates under Trump compare with Congressional Budget Office and Office of Management and Budget projections?
Executive summary
The Congressional Budget Office estimated the federal deficit for fiscal 2025 at roughly $1.8 trillion in its Monthly Budget Review and related outputs [1] [2], while the Trump Administration’s analysts—through the Council of Economic Advisers (CEA) and Office of Management and Budget (OMB)—project a lower 2025 deficit around $1.6 trillion based on dynamic assumptions and discretionary cuts [3]. Independent trackers and budget analysts that incorporate the One Big Beautiful Bill Act (OBBBA), new tariffs, and alternative growth assumptions show a wide range of outcomes, from CBO’s baseline multi‑year shortfall of about $20 trillion over 2025–2034 to CRFB’s adjusted scenario that produces far larger deficits and debt under different policy and legal outcomes [4] [5].
1. CBO’s yardstick: near‑term reality and a hawkish baseline
CBO’s reporting places the fiscal 2025 deficit at about $1.8 trillion based on actual receipts and outlays through September 30, 2025, noting that revenues rose and outlays increased modestly from 2024 [1] [2], and that its January baseline earlier had estimated the 2025 deficit near $1.9 trillion [6] [7]. More broadly, CBO’s ten‑year baseline projects federal deficits of roughly $20 trillion over 2025–2034 and federal debt held by the public reaching about 116 percent of GDP—results driven by current‑law spending and revenue assumptions and conservative economic forecasts [4].
2. The Trump Administration’s view: dynamic growth, tariffs, and discretionary cuts
The Administration’s estimates—summarized in CEA and OMB material tracked by analysts—are materially rosier: CEA projects the deficit falling from $1.8 trillion in FY2024 to $1.6 trillion in FY2025, and OMB’s mid‑session views assume discretionary cuts and dynamic feedback that would allow debt held by the public to begin falling as a share of GDP by 2029 [3]. Those projections rely on stronger near‑term growth assumptions and sizeable dynamic offsets from OBBBA, tariffs, and claimed macroeconomic benefits—assumptions that CBO and many outside analysts explicitly treat as more optimistic than consensus [3] [4].
3. Policy wildcards widen the spread: OBBBA and tariffs
The reconciliation law OBBBA and the Administration’s tariff program are the primary drivers of divergence. CBO scores OBBBA as adding roughly $4.1 trillion conventionally through 2034 (including higher interest costs), while CEA claims substantial dynamic offsets that cut that conventional cost by more than half in their modeling [8] [3]. Tariffs produced a splash of revenue—customs duties surged in 2025—and CBO’s own analysis estimates tariffs could reduce deficits by roughly $3 trillion through 2035 under certain assumptions [8] [4], though enforcement and legal rulings have undercut some tariff authority in practice [5].
4. Independent trackers and the downside scenarios
Non‑governmental trackers that fold in different assumptions show larger fiscal deterioration: the Committee for a Responsible Federal Budget’s August 2025 adjusted/alternative baselines—which include OBBBA’s costs, tariff revenues, and other administrative changes—produce much larger multi‑year deficits and debt paths (CRFB’s adjusted scenario shows deficits far exceeding CBO’s baseline and an alternative scenario with $28.5 trillion in deficits over 2026–2035) [5]. Those analyses highlight that small differences in near‑term economic assumptions, legal outcomes on tariffs, and whether temporary tax cuts are extended can shift decade‑long deficits by trillions [5] [8].
5. What explains the gap and why it matters
The gap between the Administration’s lower 2025 deficit estimate (~$1.6 trillion) and CBO’s $1.8–1.9 trillion figure stems from differing economic assumptions, dynamic scoring of tax and spending changes, and the treatment of proposed discretionary cuts and tariff permanence [3] [6]. CBO’s baseline is deliberately conservative and “current‑law”; OMB/CEA incorporate policy choices and optimistic feedbacks that, if unrealized, would leave actual deficits closer to or above CBO’s estimates—an outcome underscored by independent trackers that model less favorable legal or macroeconomic scenarios [4] [5]. This divergence matters because fiscal planning, interest costs, and debt trajectories are highly sensitive to those assumptions, and disagreement signals risk that policymakers and markets may face larger deficits than the Administration projects if hoped‑for growth and offsets do not materialize [3] [4].