New CBO Analysis Shows Republicans’ Tax Giveaways Add $52 Trillion to National Debt Over 30 Years

New CBO Analysis Shows Republicans' Tax Giveaways Add $52 Trillion to National Debt Over 30 Years

Merkley Requested New CBO Estimate That Shows Republican Budget Proposal Adds Trillions More to National Debt Than Previously Projected

WASHINGTON, D.C. - At the request of U.S. Senator Jeff Merkley (D-OR), Ranking Member of the Senate Budget Committee, the independent, nonpartisan Congressional Budget Office (CBO) released a new projection showing that the tax giveaways in the Senate Republicans' budget proposal will add $52 trillion to the national debt over the next 30 years. The previous projection for the cost of extending the Trump tax law and the Republican leadership's attempt to use a budget gimmick, known as "current policy baseline," was $37 trillion over the 2024-2054 period.

This new projection follows recently released data from the Joint Committee on Taxation showing a new estimate that the Republican plan to extend the 2017 Trump tax law will cost $5.5 trillion including interest over the next decade. The budget resolution Senate Republicans passed last week allocates an additional $1.5 trillion for tax giveaways. This brings the total potential 10-year cost of the Republican tax plan, which will overwhelmingly benefit the wealthy and corporations, to more than $7 trillion.

"It has taken over 249 years, since the Founders signed the Declaration of Independence on July 4, 1776, for the U.S. to accumulate nearly $37 trillion in debt - and today the Republicans want to use a budget gimmick to add an astronomical $52 trillion to our debt with one bill with one intention: to fund massive tax giveaways for billionaires," said Senator Jeff Merkley, Ranking Member of the Senate Budget Committee. "For 30 years, Republicans have been changing the rules to give tax cuts to the wealthy - and families have been stuck paying the bill. Republicans who claim to care about fiscal responsibility should be outraged and doing everything they can to stop it. This is the Great Betrayal of working families across the country."

With this new analysis using the Republicans' preferred budget gimmick of current policy baseline:

• The debt would be 220 percent of GDP in 2055, up from 156 percent under current law, with an additional $1.5 trillion of tax cuts over the next decade and adopting a current policy baseline. In nominal dollars, that would be an increase of $52 trillion.
• If the Republicans' tax plan became law, the debt in 2055 would be 37 percent higher than it would otherwise be.
• The increased debt would shrink the economy under a dynamic analysis. The economy would be $4,375 smaller per person in 2055, in today's dollars, because of new debt crowding out private investments.

Leading up to Senate passage of the Republicans' budget proposal, Merkley slammed Republican leadership's obsession with using current policy baseline to pretend their bill would add $0 to the debt, when in reality it will explode it to levels this country has never seen.

Policymakers and policy experts on both sides of the aisle agree with Merkley: Using a current policy baseline is a budget gimmick that will balloon our national debt.

CBO's response is HERE.

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