The non-partisan Congressional Budget Office (CBO) has released its official analysis of H.R. 1, the “One Big Beautiful Bill Act,” revealing that the sweeping legislation would increase the federal deficit by approximately $2.4 trillion over the next decade. This finding stands in stark contrast to repeated promises from House leaders that the bill would reduce the deficit.
According to the CBO, H.R. 1 would raise the cumulative federal deficit by $2,416,229,000,000 between 2025 and 2034.
- 2026: $484,535 million ($484.5 billion)
- 2027: $536,246 million
- 2028: $475,983 million
- 2029: $367,052 million
- 2030: $151,440 million
- 2031–2034: annual increases from $64.9 billion to $182.8 billion1.
Despite including some spending cuts, particularly in nutrition, Medicaid, and education programs, the bill’s deficit expansion is driven by a combination of major tax cuts and new spending, especially in defense and homeland security.
While there are substantial cuts to Medicaid, nutrition assistance (SNAP), and education programs, totaling over $1.7 trillion, these are dwarfed by the revenue losses from tax provisions. The net effect is a sharp rise in the deficit.
The bill authorizes significant new direct spending for military programs and border security. Defense outlays would increase the deficit by $144 billion, while homeland security provisions would add another $79 billion over the decade.
House leaders had pledged that H.R. 1 would reduce the deficit, citing targeted cuts to federal programs and efforts to eliminate “waste, fraud, and abuse.”
The projected $2.4 trillion addition to the deficit comes at a time of heightened concern over the nation’s fiscal trajectory.
Critics warn that such an increase could put upward pressure on interest rates and limit fiscal flexibility in the years ahead. Republicans argue that extending and expanding the Trump-era tax cuts will boost economic growth by increasing take-home pay, encouraging business investment, and creating jobs.
Independent experts and nonpartisan organizations found the economic effects of the TCJA to be modest. The Congressional Budget Office (CBO) and the Congressional Research Service concluded that the 2017 tax reform did not significantly drive economic growth and did not generate enough growth to offset the resulting increase in the federal deficit. The CBO reported only a 0.2% increase in growth in 2018, far below what would have been needed to pay for the tax cuts. Other economic forecasters, such as Goldman Sachs, the IMF, and Moody’s, similarly estimated growth effects of 0.0% to 0.5%.
Analyses also found that while there was an initial uptick in corporate investment, it was short-lived; most of the tax savings went to share buybacks and dividends rather than to new business investment or wage increases. A survey of corporate economists found that 84% of firms had not changed their investment or hiring plans due to the tax cut.
