Joe Light

Congress's official scorekeeper says the House version of President Donald Trump's Big, Beautiful Bill would cost $2.8 trillion over the next decade, underscoring the heavy toll that the president's signature legislation could take on the federal debt if enacted.

The cost, compiled by the nonpartisan Congressional Budget Office and the Joint Committee on Taxation, is meant to take into account the macroeconomic effects of the bill. An earlier estimate from the CBO, which didn't account for those factors, had estimated the bill would add $2.4 trillion to the national debt between 2025 and 2034.

The CBO estimated that the bill would increase real GDP growth by 0.5 percentage point over the next decade, but also drive up interest rates on 10-year Treasuries by 0.14 percentage point over the period. The costs to the debt of the rate increase more than outweighed the extra revenue from higher growth, leading to the higher cost estimate.

Including the effect of estimated increases in borrowing needs, the CBO said the bill would add $3.3 trillion to debt held by the public by 2034. That would amount to 124% of GDP if the bill is enacted, compared with the CBO's baseline projection of 117%, the agency said.

The White House didn't immediately respond to a request for comment. In the past, White House officials have said the CBO's estimates follow a faulty methodology, and asserted that the bill would reduce the deficit.

The score comes at a critical time as the Senate weighs its own version of the bill, which extends the individual tax cuts originally passed during Trump's first term in 2017 and adds new provisions, such as largely eliminating taxes on tips and overtime. The House passed the bill in May by one vote. Fiscal hawks had been concerned about the cost and moderate Republicans in Democrat-voting states wanted a substantial increase to the cap on the state and local tax (SALT) deduction.

The Senate Finance Committee on Monday revealed the working text of its portion of the Senate bill, which includes the tax provisions and cuts to Medicaid. That version makes permanent business deductions for research and development, write-offs for interest expenses, and full expensing for the depreciation of property costs.

But it also keeps in place a $10,000 SALT cap, far less than the $40,000 maximum cap passed by the House. SALT-supporting Republicans swiftly rejected the decrease, and the Senate says it is still negotiating over the final cap.

Assuming all Democrats vote against the bill, the House and Senate can each lose at most three votes and pass the bill. Congressional leaders have said they want to get the bill to Trump's desk by July 4.

The CBO and Treasury have estimated that the U.S. could hit the debt ceiling by August or September. Since lawmakers are also using the bill to raise the debt ceiling, that creates a de facto deadline at the end of July to pass the bill.

Tuesday's CBO score is significant because the House-passed bill is seen by many analysts as the most fiscally restrained version that lawmakers are likely to consider. The Senate plans to adopt a "current policy baseline" that assumes the 2017 tax cuts were already permanent, and has the effect of masking the overall costs of the bill without having a practical impact on the deficit. That leaves more room for deeper tax cuts.

Write to Joe Light at joe.light@barrons.com

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June 17, 2025 15:20 ET (19:20 GMT)

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