The One Big Beautiful Bill Act, passed by Republicans and signed by President Donald Trump last year, will add $4.7 trillion to deficits through 2035, according to the Congressional Budget Office.
The numbers were released Wednesday as part of the nonpartisan congressional scorekeeper’s annual budget and economic update, which includes projections for the debt, spending, inflation, and GDP.
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The latest deficit projections for the legislation, enacted in July, are an increase to the CBO’s estimate from when it was passed, an additional $3.4 trillion to deficits through 2034.
“It increases primary deficits by $3.7 trillion from 2026 to 2035,” CBO Director Phillip Swagel said in a note. “Increased debt service adds another $0.9 trillion, and then we account for the effects on the budget from macroeconomic changes to arrive at the total deficit impact of $4.7 trillion.”
The centerpiece of the legislation was extending the 2017 Trump tax cuts for individuals, which were set to expire.
The CBO scored the impact of the legislation against current law, which means a scenario in which the tax cuts did expire.
In contrast, Republicans used a current policy baseline to score their bill. The current policy baseline assumes that the tax cuts were continued, meaning it is cost-free to make them permanent.
Republicans argue that the One Big Beautiful Bill Act, which also included new cuts like no taxes on tips, will spur economic growth, which will in turn raise tax revenues.
But, in the latest report, the CBO argues the opposite. It finds that, by adding to federal deficits, the tax cuts will put upward pressure on inflation and interest rates. The higher interest rates will raise borrowing costs for the federal government, adding to deficits.
House Budget Committee Chairman Jodey Arrington (R-TX) said Wednesday he takes “great exception with CBO’s confoundingly low assumptions for economic growth.”
“As a result of Republicans’ pro-growth policies, interest rates are coming down, business investment is up, and GDP growth is on pace to be 3% or better,” he added in a statement.
Also notable in the report, the CBO projects that Trump’s aggressive tariff agenda will reduce deficits by $3 trillion over the next decade.
In addition to extending the tax cuts, the OBBBA includes other legislative priorities for Trump’s second-term agenda, such as funding for border security and the military, as well as cutting clean energy programs.
The report also included some key macroeconomic forecasts for the coming decade.
The CBO projects that the federal budget deficit in fiscal 2026 will be $1.9 trillion, which will balloon to $3.1 trillion by 2036. The CBO predicts that the deficit will be 5.8% of GDP in 2026 and grow to 6.7% in 2036.
Much of the increase is being driven by rising net interest costs. The primary deficit, which does not include interest costs, is expected to be 2.6% of GDP this year, staying below that level for the next decade.
Federal debt held by the public is also set to rise, according to the CBO. Debt held by the public is expected to be 101% of GDP this fiscal year, before increasing to 120% in 2036. The previous highest ratio was 106%, which was notched in 1946 following World War II.
Swagel added that the CBO does project stronger economic growth this year as a result of the Republican tax legislation outweighing drags resulting from tariffs and lower net immigration.
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Generative AI was also considered in the context of economic growth. That growth is projected to amount to roughly one-tenth of a percentage point each year, according to the CBO.
“That faster growth from AI increases the level of output in the nonfarm business sector by 1 percent in 2036,” Swagel added.
