The
Congressional Budget Office (CBO)
, a non-partisan budget watchdog, has issued an analysis that has been embraced by the White House as a strong endorsement of President Trump’s economic strategy. The analysis scrutinizes the fiscal impact of the proposed
‘One Big Beautiful Bill Act’
and the tariffs currently in place. While the CBO’s report includes significant long-term warnings, the administration views it as a validation of their economic approach.
According to the CBO, the
‘One Big Beautiful Bill Act’
, a comprehensive package of tax cuts and spending approved by the House of Representatives, would add $2.4 trillion to budget deficits. However, the CBO found that the tariffs President Trump has enforced since May 13 would generate $3 trillion, resulting in a net reduction of deficits by the same amount. This projection holds even after considering how tariffs would drive inflation and slow economic growth.
Despite potential long-term ramifications, the White House has seized upon this finding to support its agenda. In a statement, they claimed that President Donald J. Trump’s
‘One Big Beautiful Bill’
“dramatically improves the fiscal trajectory of the United States and unleashes an era of unprecedented economic growth.” This stance suggests that, from the government’s perspective, the revenue generated by tariffs is sufficient to offset the tax cuts and additional spending outlined in the bill.
Nonetheless, the CBO’s analysis also includes some less favorable long-term forecasts. The office projects that tariffs would increase prices, causing inflation to rise by 0.4 percentage points in 2025 and 2026, and that the U.S. economy would contract by 0.6% by 2035 if tariffs remain. Additionally, the CBO emphasizes that its estimates are subject to a tariff policy that “changes daily” and can be altered by President Trump as he negotiates deals with other countries.
It is noteworthy that the CBO’s conclusion differs from that of other independent economists, such as those at the Tax Foundation, who have warned that tariffs would harm the overall budget outlook by slowing the economy and raising prices. These critics of the bill argue that the legislation exacerbates, rather than helps, the growing national debt and threatens the government’s long-term financial stability.
