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CBO: Tax Bill Will Increase Deficit By $1.7 Trillion

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The U.S. Congressional Budget Office (CBO) has disclosed that the GOP tax plan would add an overall $1.7 trillion to the national debt over 10 years. The estimate does not factor in projections of economic growth, which Republicans have asserted could offset revenue losses.

On Nov. 8, the CBO released its preliminary analysis of the House Republicans' tax plan, titled the Tax Cuts and Jobs Act. The CBO analysis, after noting that the Joint Committee on Taxation estimated that the tax proposal would reduce revenues by $1.4 trillion, found that debt servicing would cost an additional $300 million, bringing the total figure to $1.7 trillion by 2027, The Hill reports.

GOP lawmakers are hoping to pass their tax plan through budget reconciliation, a Senate procedure that does not require a 60-majority vote, and bypass the need for any Democratic input or support. Republicans had established that they could pass a tax bill through budget reconciliation as long as it did not add over $1.5 trillion to the deficit.

While the additional debt servicing would put the tax plan over the $1.5 trillion benchmark, it would still be able to advance through budget reconciliation.

The CBO analysis also found that while the U.S. debt would reach 91.2 percent of gross domestic product (GDP) by 2027 under current economic conditions, that figure would climb to 97.1 percent if the GOP tax plan was implemented.

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The Trump administration and congressional Republicans have asserted that the tax plan would generate enough economic growth to compensate for the loss in federal revenue.

On Sept. 28, Secretary of Treasury Steven Mnuchin told Fox Business that he believed a GOP tax plan "will cut down the deficits by a trillion dollars."

Senate Republicans have yet to release their own tax proposal. The House plan would slash the corporate tax rate from the current 35 percent to 20 percent and revise the mortgage interest deduction.

On Nov. 8, the Tax Policy Center (TPC) released a revised analysis of the House Republican tax plan. The TPC estimated that the top 1 percent wealthiest Americans would garner 21 percent of the proposal's tax cuts while 25 percent of Americans would actually pay higher taxes by 2027, according to CNBC.

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That same morning, the House Speaker, GOP Rep. Paul Ryan of Wisconsin, asserted during a press event that Republican lawmakers had to pass a tax plan in 2017 if they wanted to hold onto their congressional majority in the 2018 midterms, The Associated Press reports.

"We've got to get on with keeping our promise, and one of the chief promises we made when we ran for office ... in 2016 was that we would do tax reform and tax cuts for families, for people, and so we've got to get on that," Ryan said.

Sources: AP via Syracuse.comCNBC (2), Fox BusinessThe Hill / Featured Image: Gage Skidmore/Flickr / Embedded Images: The White House/Flickr, Gage Skidmore/Flickr

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