How does the One Big Beautiful Bill Act (OBBBA) alter CBO 10‑year deficit projections?
Executive summary
The Congressional Budget Office (CBO) estimates that the One Big Beautiful Bill Act (OBBBA), enacted as Public Law 119‑21, will raise the unified budget deficit by $3.4 trillion over the 2025–2034 period relative to CBO’s January 2025 baseline [1], a tally repeated and amplified in multiple post‑enactment CBO products and echoed by both Senate Democratic and health‑advocacy summaries [2] [3]. That headline number masks important technical distinctions—CBO’s static scoring of the bill’s direct effects, separate estimates of primary versus debt‑service impacts, and alternative “dynamic” and permanence scenarios that change the 10‑year picture materially [4] [5] [6].
1. How CBO reached the $3.4 trillion headline
CBO’s formal publication of the “Estimated Budgetary Effects of Public Law 119‑21” reports a net increase in the unified budget deficit of $3.4 trillion for 2025–2034 relative to its January 2025 baseline, driven by an estimated $4.5 trillion of revenue reductions offset in part by $1.1 trillion of net direct‑spending reductions across the window [1]. That $3.4 trillion is the agency’s consolidated “score” for the law as enacted and is the figure most often quoted by congressional offices and advocacy groups [2] [3].
2. Primary deficit vs. debt‑service: the plumbing behind the headline
CBO and JCT separate the bill’s effects into changes in primary deficits (revenues minus noninterest outlays) and additional debt‑service costs from higher borrowing; in an earlier CBO analysis the bill increased primary deficits by roughly $2.4 trillion over ten years excluding macroeconomic and debt‑service effects, with additional debt‑service costs (variously reported by CBO products) adding several hundred billion more to reach the larger totals [4] [7]. CBO’s “debt‑service effects” work shows that interest costs materially amplify the fiscal impact because rising deficits increase the stock of debt and projected interest payments [4].
3. Dynamic scoring and offsetting macroeffects complicate the picture
When CBO applied macroeconomic (dynamic) models, it found that the bill’s positive effects on output would slightly reduce primary deficits—CBO’s dynamic estimate reduced the primary deficit by $85 billion over the decade—yet those same macroeffects raise interest rates enough that net interest payments increase substantially, offsetting and then exceeding the primary improvement [5]. In plain terms, growth induced by tax cuts and other provisions modestly raises revenues, but higher debt and interest rates push net deficits higher overall in CBO’s modeling [5].
4. Scenarios that make the 10‑year impact larger (or smaller)
CBO notes—and outside analysts emphasize—that many OBBBA provisions are temporary; if Congress or a future administration extends certain tax cuts or other temporary measures, the ten‑year and longer‑run cost would expand. CBO estimated that making a subset of ten temporary provisions permanent would add roughly $858 billion over the 2025–2034 window, pushing the law’s cost toward about $5 trillion in some analyses [6]. Third‑party modelers such as the Bipartisan Policy Center and Tax Foundation underline that baseline choices, permanence, and assumptions about interest rates produce materially different deficit and debt‑to‑GDP outcomes [8] [9].
5. Where the consensus lies and where uncertainty persists
There is broad agreement among CBO publications and independent budget analysts that OBBBA meaningfully raises deficits in the coming decade—CBO’s $3.4 trillion unified‑budget increase is the authoritative official score [1]—but the precise tenor of that impact depends on which pieces of analysis are emphasized: static vs. dynamic scoring, whether debt‑service and macrofeedbacks are included, and whether temporary provisions are later extended [5] [4] [6]. Sources also differ on secondary outcomes—insurance losses, interest‑rate paths, and debt‑to‑GDP projections—because those depend on separate modeling choices and future policy actions [3] [10].
6. Bottom line for the 10‑year projection
CBO’s bottom line: compared with its January 2025 baseline, enacting OBBBA increases the unified budget deficit by $3.4 trillion over 2025–2034, with that total reflecting direct revenue reductions partly offset by spending cuts and with additional nuance from debt‑service and dynamic effects that can push headline costs higher under plausible scenarios [1] [4] [5]. Analysts and advocacy groups rightly stress that the figure is a projection—not a law of nature—and that extensions of temporary provisions or different macroeconomic trajectories would change the 10‑year deficit picture substantially [8] [6].