The One Big Beautiful Bill Act (OBBBA) 30-year Price Tag is Really Alarming

Committee for a Responsible Federal Budget, June 16, 2025- The House-passed One Big Beautiful Bill Act (OBBBA) would add $3 trillion to the debt through Fiscal Year (FY) 2034 as written and $5 trillion if made permanent. Over the long run, it would add far more to the debt.

We estimate that by FY 2054 the bill would:

• Increase debt by $15 trillion as written, or $31 trillion if made permanent.
• Increase debt to 172 percent of Gross Domestic Product (GDP) as written, or 190 percent of GDP if made permanent.
• Increase deficits to 8.4 percent of GDP as written, or 9.6 percent of GDP if made permanent.
• Increase interest costs to 6.0 percent of GDP as written, or 6.6 percent of GDP if made permanent.

These estimates likely understate the fiscal impact of OBBBA, as they assume interest rates that are significantly lower than today’s levels and don’t account for OBBBA’s effects on growth and interest rates. Most modelers have found that after boosting near-term output, OBBBA would reduce long-term output and increase interest rates as a result of additional borrowing.

OBBBA Will Increase Long-Term Borrowing

According to the Congressional Budget Office (CBO), the House-passed OBBBA would add roughly $3 trillion to the debt through 2034, including interest, boosting total deficits by 0.8 percent of GDP. Over 30 years, we estimate OBBBA would increase debt by over $15 trillion, boosting deficits by 1.0 percent of GDP.

Although new spending and tax cuts are smaller over the long run than in the early years, a number of offsets expire after 2034, while interest costs continue to accrue as a result of rising debt. We find the primary deficit impact of OBBBA would decline from a peak of 1.6 percent of GDP in 2027 to a low of 0.2 percent of GDP by 2031 before rising to 0.5 to 0.6 percent of GDP between 2035 and 2054. Interest costs will rise gradually to 0.6 percent of GDP by 2054. As a result, OBBBA as written would add about 1.2 percent of GDP to the deficit in 2054.

If temporary provisions in OBBBA are made permanent, we estimate the deficit impact would total $31 trillion through 2054, or 1.9 percent of GDP.

Most significantly, OBBBA sets numerous tax provisions to expire arbitrarily in 2028 or 2029, including temporary enhancements to the standard deduction and Child Tax Credit, tax exemption for tips and overtime, and various business tax breaks. OBBBA also includes significant one-time appropriations for defense, border security, and immigration enforcement, and it includes a number of offsets – mainly related to the delay of Biden Administration rules – that end after the budget window.

With all these provisions made permanent, the primary deficit impact of the bill would remain relatively stable at 1.2 to 1.3 percent of GDP per year over the long run. Meanwhile, interest costs will rise gradually to 1.2 percent of GDP by 2054. As a result, OBBBA with extensions would increase the deficit by 2.4 percent of GDP in 2054.

These estimates, if anything, likely understate the deficit impact of OBBBA. Long-term dynamic estimates from Penn Wharton Budget Model, Yale Budget Lab, and the Joint Committee on Taxation find that OBBBA would slow long-term economic growth and boost interest rates as a result of the higher debt. Assuming interest rates remain around their recent levels – either due to OBBBA or for other reasons – debt would be $55 trillion higher in 2054 under a permanent OBBBA, with more than $34 trillion of that increase due to OBBBA itself.

Deficits and Debt Will Surge under OBBBA

As a result of the additional $15 to $31 trillion of 30-year borrowing under OBBBA, debt levels will surge. CBO already projects debt to rise from 100 percent of GDP today to 154 percent by 2054 under current law. We estimate debt would further rise to 172 percent of GDP under OBBBA as written and 190 percent of GDP if OBBBA were made permanent.

Debt could rise even higher with heightened interest rates. If interest rates remain around their current levels while output grows as projected, debt would reach 218 percent of GDP assuming permanent OBBBA.

Deficits would also rise under these scenarios. Even under current law, annual deficits are projected to rise from 6.2 percent of GDP in 2025 to 7.2 percent by 2054. Under OBBBA deficits would rise to 8.4 percent of GDP, under a permanent OBBBA they would rise to 9.6 percent, and under a permanent OBBBA with current interest rates they would reach 12.0 percent of GDP.

Interest costs alone are projected to grow from 3.2 percent of GDP in 2025 to 5.4 percent by 2054 under current law. Interest costs would climb further to 6.0 percent of GDP by 2054 under OBBBA as written, 6.6 percent under a permanent OBBBA, and 8.9 percent under a permanent OBBBA and current interest rates. Assuming permanent OBBBA and today’s interest rates, interest would consume half of all revenue by 2054.

Rod's Comment: For those of you not familiar with The Committee for a Responsible Federal Budget, it is a is a nonpartisan, non-profit organization committed to educating the public on issues with significant fiscal policy impact. The leadership of the organization includes some of the nation's leading budget experts, including many past heads of the House and Senate Budget Committees, the Congressional Budget Office, the Office of Management and Budget, and the Government Accountability Office. 

CRFB was founded in 1980. It is one of the organizations that has been on my giving list for many years. They have always been non-partisan but were sometimes referred to as a conservative organization, I assume because it used to be that conservatives were more concerned, or at least more outspoken in their concern, about fiscal responsibility than liberals and anyone questioning rising debt and deficit spending was considered a conservative.  Critics of CRFB used to primarily be liberals, and champions of CRFB used to be conservatives. In this Trump era that is reversed.

The Trump critics of CRFB contend that the organizations predictions are inaccurate because they say Trump's policies are going to unleash rapid economic growth which will produce much more revenue that is forecast in CRFB models. 

I think the Trump critics are wildly mistaken and see Trump tariff policies and uncertainties surrounding tariff policy and also Trump's immigration policies which will rob America of both low-end workers we need to keep the economy humming as well as high-end tech expertise and innovators necessary for innovation and growth. I think the Trump critics are living in a dream world and have faith and are deluding themselves. 

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