GOP beats down key budget office over tax plan projections

The Hill

02-06-2025

Republicans are using Congress's official budget scorer as a whipping boy, as they argue a major package of President Trump's tax priorities is costless, despite multiple projections placing the plan's price tag at trillions of dollars over the next decade.
While the Congressional Budget Office (CBO) has not yet released its final estimate of House Republican's 'One Big Beautiful Bill Act' as it advances on Capitol Hill, Republicans have increased attacks on the nonpartisan office over its cost projections of the party's tax cuts plan — which seeks to permanently lock in expiring provisions in Trump's 2017 tax plan, along with a host of other add-ons.
'The CBO sometimes gets projections correct, but they're always off every single time when they project economic growth,' Speaker Mike Johnson (R-La.) argued during an appearance on NBC's 'Meet The Press' on Sunday, asserting the bill 'is going to reduce the deficit.'
'They always underestimate the growth that will be brought about by tax cuts and reduction in regulations,' he said, while touting Trump's 2017 tax plan as bringing 'about the greatest economy in the history of the world, not just the U.S.'
Trump also fumed about the CBO in a Friday post on Truth Social, while accusing the office of 'purposefully' underscoring economic growth projections of his tax cuts.
'The Democrat inspired and 'controlled' Congressional Budget Office (CBO) purposefully gave us an EXTREMELY LOW level of Growth, 1.8 percent over 10 years — how ridiculous and unpatriotic is that!' he wrote on social media.
'I predict we will do 3, 4, or even 5 times the amount they purposefully 'allotted' to us (1.8 percent) and, with just our minimum expected 3 percent growth, we will more than offset our tax cuts (which will, in actuality, cost us no money!),' he wrote.
The CBO won't release a final growth projection for the GOP bill until later this week. However, the agency projected earlier this year that real gross domestic product (GDP) would grow at an average rate of 1.8 percent annually over the next decade if current law remains unchanged.
The Joint Committee on Taxation (JCT) sees the tax provisions in the bill increasing the average annual growth rate of real GDP by 0.03 percentage points, 'from 1.83 percent in the present-law baseline to 1.86 percent, over the 2025-2034 budget window.'
The Federal Reserve also has a long-term growth projection for the economy of 1.8 percent. In its latest projection summary released in March, the central bank sees the economy growing by 1.8 percent past 2027, which is the same projection it made in December.
Maya MacGuineas, president of the Committee for a Responsible Federal Budget, said Monday that the attacks come as no surprise for Capitol Hill watchers.
'They love CBO when it gives them the score they want or it hurts their opponents, and they don't like it when it tells them the hard truths about their own bill,' she said.
'I think relying on CBO and [JCT] for the guidance of what the likely economic effects are is absolutely the right way to proceed,' MacGuineas said.
Republicans have long touted Trump's 2017 Tax Cuts and Jobs Act as a key contributor to economic growth, while pointing to higher revenues seen in the years since the bill's passage as evidence of the package's success and that the tax cuts have paid for themselves.
But the GOP's 2017 tax law was not, in fact, a significant driver of economic growth and came nowhere close to growing the economy by an amount that would have offset its deficit additions.
The law grew the economy by 0.2 percent in 2018, according to the CBO, which was the year following the tax law change when the effects would have been most pronounced. In order to offset its deficit additions, it would have needed to grow the economy by 6.7 percent, according to the Congressional Research Service — more than an order of magnitude larger than what it actually did.
The 0.2 percent growth resulting from the 2017 Trump tax cuts measured by the CBO was in line with many other forecasters from the time, most of whom have been spared from the same whipping-boy treatment from Republicans that the CBO has received.
Goldman Sachs and the International Monetary Fund each projected 0.3 percent growth, Moody's Analytics projected 0.4 percent growth, Barclays projected 0.5 percent growth and Macroeconomic Advisers projected 0.1 percent growth.
Tax specialists and economists are generally dismissive of Republican growth claims.
'Everybody in my profession agrees with me,' Marty Sullivan, chief economist at Tax Analysts, told The Hill back in October. 'Nobody — 99 percent of economists — believes that there's going to be so much growth that it would offset any cost on any of these tax cuts.'
'You hear people saying, 'Wow, after the Trump tax cuts, we had the biggest economic growth in history' — well, we didn't,' he said.
The meager additions to economic growth made by the 2017 tax law could be even less in the current law, since most of the main production provisions are not new but simply extensions of what is already in place, tax experts told The Hill.
Economic growth effects of tax legislation — sometimes called 'dynamic effects' — are largest when they first appear, giving businesses new money for investment and consumers more money for spending. Over time, the effects of that initial cash infusion abate as new norms are established and additional capital is absorbed into existing production patterns.
The debate over dynamic scoring is one of two major accounting controversies involving the bill, the other being whether the bill should be scored from the point of view of current law or current policy.
From the perspective of current law, which expires at the end of this year, the tax cuts would add more than $5.5 trillion including interest to the national debt, according to the JCT. Republicans prefer to assume the continuation of their last eight years of policy into the future, which would allow that $5.5 trillion price tag to be ignored and for additional scoring to pertain only to changes made on top of it.
More fiscal hawks have raised concern about the potential fiscal impact of the legislation in recent weeks, urging for more aggressive spending cuts to ride alongside the major tax plan.
Republicans in the lower chamber have already approved major reforms to Medicaid and the Supplemental Nutrition Assistance Program, along with other programs, that have been estimated to reduce federal spending by more than $1 trillion over the next decade.
Hard-line conservatives in both chambers are pushing for the party to slash spending even further, while some Senate Republicans have suggested the scope of the tax piece of the bill could be narrowed amid cost concerns.
'Why didn't Trump's 2017 Tax Cuts and Jobs Act make tax cuts permanent? Because the impact of the tax cuts on debt after 2025 was understood by THEM to be too great,' Rep. Thomas Massie (Ky.), one of only two Republicans to vote against the House bill last month, said in a post on the social platform X on Monday.
'Now they're employing new-math to claim that renewing the tax cuts, without cutting spending, won't impact debt.'