The cost of this albatross is astronomical. According to the Congressional Budget Office, it increases the federal deficit by $3.4 trillion over the next decade (actually, $4.1 trillion when you include interest). The Committee for a Responsible Federal Budget, a nonprofit think tank that advocates for a lower federal budget deficit, believes this number could increase to $5.5 trillion if temporary provisions in the bill are extended, driving our debt to 127 percent of GDP.
Not only does this directly hit our bottom line, but it also raises the cost of borrowing for the government, which increases the interest on mortgages held by Americans by thousands of dollars each year.
It goes without saying this exacerbates our already perilous financial path and vastly increases the risk of a full-blown debt crisis. Not only does this legislation add trillions of dollars to our national debt, but it also reduces the amount of our tax revenue for decades.
Worse, it substantially increases our debt and deficit without providing any meaningful boost to economic growth. The White House Council of Economic Advisers declared that, thanks to the One Big Beautiful Bill, growth could reach 4.9 percent in 2028; there will be “$8.5 to $11.1 trillion in total offsetting deficit reduction from Trump economic policies anchored by the OBBB, including discretionary spending reductions and tariff revenue;” and “debt falls as a share of gross domestic product (GDP) to 94 percent in 2034.”
This is straight-up, 1000% delusional.
The Joint Committee on Taxation estimates the impact from the One Big Beautiful Bill on GDP will be 0.4 percent over the next decade – with stronger growth in the first five years versus the second five years – and that investment will marginally decline. The Penn Wharton Budget Model (a nonpartisan, research-based initiative located at the Wharton Business School) and the Tax Foundation (a nonpartisan tax policy nonprofit) estimate an increase of 0.7 percent and 0.8 percent after 30 years, respectively.
What makes this even more frustrating is that, although the bill supposedly cuts federal spending by $1.3 trillion over a decade – among the largest cuts are to Medicaid and the clean energy subsidies from the 2022 Inflation Reduction Act – these cuts don’t make any meaningful reduction to our federal debt because of the federal debt the bill creates.
It seems Republicans still don’t understand (or just don’t care) that it doesn’t matter how deeply you slice into social programs that middle- and low-income Americans rely on, tax cuts for the top five percent still force us to borrow trillions of dollars at high interest rates… and for what? We honestly don’t know how they sleep at night.
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It will come as no surprise that Republicans used super shady gimmicks to artificially reduce the cost of the One Big Beautiful Bill. But the slight-of-hand, hide-the-ball tactics they used to make this legislation look less fiscally damaging are epic.
One of these comes in how the tax cuts are structured and accounted for in the budget. The Republicans declared many of the tax cuts in the bill temporary as opposed to permanent because, if a program is considered temporary, the Congressional Budget Office (CBO) doesn’t calculate it over the requisite ten-year period – obviously lowering the overall cost impact of the legislation. Problem is, these cuts aren’t truly considered temporary by anyone. Things passed by Congress rarely get cancelled; rather they typically get renewed, adding huge additional costs – in this case to the tune of $736 billion.
There was another shady trick involving the tax cuts. The tax cuts Republicans passed in 2017 expire at the end of 2025 and extending them would cost an estimated $3.8 trillion. Historically, extending tax cuts beyond their scheduled expiration is considered a new tax cut.
However, Republicans just decided to ignore this $3.8 trillion by declaring that the old tax cuts would be extended regardless – making them appear in their new numbers to cost nothing.
This is even worse than it sounds because, to achieve this fairytale, the Republicans blatantly disregarded certain rules of reconciliation, the special legislative procedure they had chosen to use to avoid a filibuster in the Senate (meaning, their bill only required a simple majority vote and was not subject to limits on debate that require sixty votes to pass). The rules they chose but ignored – which say that legislation cannot add to the debt for more than a decade – are supposed to help contain how much debt is added by requiring bipartisan support.
But perhaps the shadiest of the shady trick is how the One Big Beautiful Bill is being phased in. Extending the 2017 tax cuts and increasing military and border spending will likely boost near-term growth. The temporary tax deductions for tip income, overtime pay and senior citizens, plus the full expensing of business investment will also help (these provisions, other than investment expensing, phase out after several years). However, painful cuts to Medicaid, SNAP (food assistance), and new rules on health insurance kick in after the 2026 midterm elections. Anyone else find that timing curious?
The result is that the temporary sugar high from the tax cuts and increased military/border spending are frontloaded while the pain from spending cuts kicks in later – but that’s also about the time we’ll begin to see the longer-term impact of trillion-dollar deficits on interest rates, private investment and growth.
That said, shady gimmicks aren’t unique to Donald Trump and Republicans. When President Biden was pushing the original American Jobs Plan ($2.3 trillion) and the American Families Plan ($1.8 trillion), he claimed they wouldn’t add a penny to the national debt. He insisted that raising taxes on corporations and taxing anyone who makes over $400,000 would pay for both plans.
This was not true. There just wasn’t enough money there to cover it. The largest tax slice of both proposals was taxing multinational corporations but, by the administration’s own calculations, that piece was estimated to only bring in $1 trillion.
To the contrary, the Penn Wharton Budget Model projected the American Families Plan (AFP) alone “would spend $2.5 trillion, about $700 billion more than the White House’s estimate, over the 10-year budget window, 2022-2031.” They estimated that “AFP would raise 1.3 trillion in new tax revenue over the same period. By 2050, the AFP would increase government debt by almost 5 percent and decrease GDP by 0.4 percent.”
The final Congressional Budget Office (CBO) report on AFP, released in November 2021, concluded that the American Families Plan would increase the budget deficit by $160 billion over the next decade.
So, at best the Biden administration was doing the fuzziest of fuzzy math. At worst, they were being straight-up deceitful.
To pay for the American Jobs Plan, the Biden administration planned to raise the corporate tax rate from 21 percent to 28 percent; increase the global minimum tax from 10.5 percent to an average of 21 percent (the exact calculation on this is country specific); impose a 15 percent tax on “book-incomes,” or the amount of income corporations publicly report; end federal tax breaks for fossil fuel companies; crack down on U.S. corporations claiming to be foreign companies; stop deductions for moving jobs overseas; and offer tax credits for bringing jobs back home to America.
But here’s the catch, and it’s a BIG one (and we think it’s super sketchy they even tried this). The Biden administration said that the $2.3 trillion worth of spending in the American Jobs Plan would take place over the next 8 years, but that it will take the next 15 years of higher taxes on corporations to pay for it. Sorry to break it to you, Joe, but that ain’t what we call apples to apples. Do you think no one is going to look into this stuff? C’mon man!
For one, the “spend for 8 years, tax for 15 years” plan couldn’t even logistically work because, back in 2021, Joe Biden had zero control over what would or would not happen over the next fifteen years (as evidenced by the fact that he only served one term, which was definitely not in his plan). When he was making these grand promises, he knew he only had “control” for the next four, possibly eight, years, and even that was a stretch given our practically dead even Congress.
The Biden administration also used the “temporary versus permanent” trick. Take, for example, just four of the “temporary” policies in the original American Families Plan: an increase in the Child Tax Credit; an expansion of the Earned Income Tax Credit; support for childcare and pre-k; and an expansion of the Affordable Care Act.
If these four programs were renewed, it would add $2.18 trillion to the bottom line. This means that the cost of the bill would actually be $4.29 trillion instead of the officially stated $2.43 trillion. Meaning, the total deficit impact would be $2.7 trillion. Shady.
Meanwhile, Biden’s funding strategy for his American Families Plan was no more realistic. This one allocated money for universal pre-K, free childcare, two years of free community college for all, a paid family and medical leave program, Affordable Care Act subsidies, scholarships for teachers, increased Pell Grants, and expanded nutrition programs, among many, many more things. It also claimed to help solve climate change and racial inequities, end child poverty, and ensure world peace (okay, we made that last one up).
For this phase of his plan, President Biden intended to impose new taxes on rich people. This included almost doubling the capital gains tax to 39.6 percent for people earning over $1 million a year (this would have been the highest capital gains tax in a hundred years). Plus, the top marginal income tax rate would increase from 37 percent to 39.6 percent (effectively rolling back the Republican's 2017 tax cut).
What President Biden obviously forgot is that, although it makes good television to say that huge taxes on rich people and corporations will solve every single cash crunch in this country, all that really happens – as we learned from the ProPublica tax exposé – is that uber rich people find ways to wiggle around tax law. Especially when, although the Biden administration talked a big game about “closing tax loopholes” and the like, there was no meaningful tax reform to accompany their tax hikes.
So, what would have really happened is that corporations, rich people, and their teams of financial wizards would have found tax loopholes to exploit, and the astronomical cost of this legislation would have been passed through to consumers and employees through higher prices and lower wages. Like always.