What estimates do CBO and Treasury give for the long-term deficit impact of the tax cuts?
Executive summary
CBO’s recent analyses find that permanently extending the 2017 tax cuts would add roughly $4–4.7 trillion to deficits in the first ten years and could raise debt dramatically over the long run — CBO reports primary deficits about $4 trillion larger in 2025–2034 under a full permanent extension and gives alternative scenarios pushing debt well past current-law baselines (examples: debt could reach 214% of GDP in 2054 in one CBO scenario) [1] [2]. Outside analysts and budget groups estimate still larger multi‑decade costs (CRFB’s estimate: >$37 trillion added to debt over 30 years on a dynamic basis) [3].
1. “Ten‑year headline: about $4 trillion to $4.7 trillion”
CBO’s scoring of an unpaid-for, permanent extension of the 2017 Tax Cuts and Jobs Act shows primary deficits in the first decade (FY2025–FY2034) are roughly $4 trillion larger than in its extended baseline; several public accounts summarize that CBO finds extensions would add about $4.6–4.7 trillion to deficits over ten years in its alternative scenarios [1] [2]. Reporting on specific political proposals (the “One Big Beautiful Bill”) cites a CBO analysis that the tax provisions alone would increase the federal deficit by about $3.8 trillion over the decade, with related spending cuts counted separately [4].
2. “Longer horizon: exponentially bigger debt depending on assumptions”
CBO’s long‑range work shows the ten‑year figures are only the start: in the scenario CBO provided, permanently extending TCJA provisions and holding other policies steady pushes debt far above its current‑law baseline — CBO projects debt rising to 214% of GDP by 2054 in one alternative and warns higher interest‑rate assumptions could lift debt even further [2] [5]. CBO’s broader long‑term projections and staff work underpin warnings that deficits and interest costs would climb substantially if tax cuts are made permanent without offsets [1].
3. “Dynamic scoring and other groups: bigger multi‑decade totals”
Analysts who incorporate macroeconomic feedback and longer windows generally produce larger totals. The Committee for a Responsible Federal Budget and outside research summarized by CRFB estimate that, on a dynamic basis that includes effects on GDP and interest costs, extensions could add more than $37 trillion to debt over 30 years (including $4.5 trillion over the next ten years by their accounting) [3]. Bipartisan policy analyses likewise find ten‑year costs in the $4–4.5 trillion range and note shifting the scoring window by one year raises the ten‑year tab [6].
4. “Where numbers diverge: baselines, windows, and interest”
Differences in headline numbers stem from three technical choices: the scoring baseline (current law vs. current policy), the ten‑year window’s start and end years, and whether analyses include added interest from extra borrowing or dynamic macro feedback. Advocates pointing to smaller budgetary effects frequently use a “current policy” baseline that assumes expiring provisions will be extended and thus understates new cost relative to current law; CBO uses current‑law rules for its baseline and reports the larger deficit impacts when tax cuts are assumed permanent [7] [8] [2].
5. “Political framing: accounting choices have agendas”
Actors on both sides invoke different scoring conventions to support policy aims. Supporters of permanent extensions often favor current‑policy baselines to make bills look cheaper; deficit hawks and many budget offices emphasize current‑law scoring to show the fiscal gap. Treasury leadership publicly criticized CBO methods during the debate, illustrating that technical score choices are used as political arguments [2].
6. “Economic effects aren’t a free offset”
CBO explicitly finds that, contrary to some claims, deficit‑financed permanent tax cuts do not pay for themselves through stronger growth; in CBO’s work higher debt raises interest costs and can lower growth over the long run, leaving larger deficits and higher debt‑service burdens [3] [1]. Bipartisan analysts and CBO both conclude dynamic effects reduce but do not eliminate the budgetary cost of large unpaid‑for tax cuts [3] [6].
Limitations and what reporting does not say: available sources document CBO’s alternative scenarios, ten‑year figures, and multi‑decade extrapolations, but they do not provide a single “official” Treasury long‑term dollar estimate in the pieces provided here; Treasury criticisms of CBO are reported, but specific Treasury quantitative long‑term deficit estimates are not found in the current reporting (available sources do not mention a specific Treasury long‑term dollar estimate) [2] [4].