The White House Council of Economic Advisers (CEA) is set to submit an analysis report to Congress on Wednesday (June 25) regarding the Senate version of the “One Big Beautiful Bill Act” (OBBBA), as released by the Senate Finance Committee last week.
The report estimates that the economic growth from the OBBBA tax plan will reduce the deficit by $2.1 trillion to $2.3 trillion and help decrease overall debt.
According to the report, the Senate’s tax plan is projected to generate over $100 billion in investments and create over one million new job opportunities during the 10-year budget window.
The report concludes that “OBBBA will lay a solid foundation for economic prosperity by increasing investments, boosting GDP, and enhancing resources for American families through increased wages and reduced tax burdens.”
However, some economists do not agree with the economic outlook painted by OBBBA, expressing skepticism about the Republican tax plan’s impact on economic growth. They argue that the tax cuts for businesses under the Republican plan are relatively small, especially compared to the 2017 legislation. They believe that the Republican tax plan leans more towards individual tax cuts, while increasing debt, which could raise interest rates and impede economic growth.
The nonpartisan Congressional Budget Office (CBO) has not yet released a comprehensive estimate on the Senate legislation, but has analyzed the impact of the House-passed version on the economy. The conclusion drawn was that the government revenue growth from the bill will be offset by higher debt-servicing costs due to rising interest rates.
It is expected that Senate Republicans will use this analysis from the CEA to push for the bill’s passage in the Senate and counter any findings from the CBO’s research.
Senate Majority Leader John Thune (Republican from South Dakota) referenced the CEA’s predictions in a speech last week in the Senate, stating that the legislation would increase federal revenue by $4.1 trillion, completely offsetting the deficit estimates made by the CBO. According to the CBO’s estimates, the bill could potentially increase the federal deficit by $2.8 trillion over the next decade (including interest payments, totaling $3.4 trillion).
(Information sourced from POLITICO)