CBO projects deficits will sharply rise if Trump tax cuts made permanent

New forecasts from official legislative scorers in Congress will explode if Trump's tax cuts are permanent and simply not expanded.

In response to a survey from David Schweikert (R-Ariz.), a member of the Methods and Means Committee, the Congressional Budget Office (CBO) found on Friday that debt levels would reach 214% of GDP in 2054, as they would maintain tax cuts in 2017 and stabilize other budgetary policies.

This is based on an extension of the 10-year cut, “47 percentage points higher than the long-term baseline projection,” released last March, the CBO said.

The CBO's original forecast found that if the reductions were extended compared to the current level of 99%, public debt would be 166% of GDP.

Schweicart also asked the CBO to consider the deficit effect if interest rates are 1% higher than previous forecasts. In that case, the total public debt in 2054 would be 250% of GDP.

Schweikert has broken off by many Republicans about the accounting methods that should be used to extend the tax cuts currently under consideration.

Senate Republicans want to use the “current policy baseline,” which assumes Trump's tax cuts will simply be extended. At this baseline, expanding cuts above 2025 will not be added to the deficit. CBO estimates that extending all tax cuts that expire at the end of 2025 adds $4.7 trillion to the deficit over the next decade.

Schweikert and other Republicans have denounced this accounting assumption as Intellectually injustice This is because we assume that current policies will continue in the future when they actually expire under US law.

Friday's CBO analysis did not focus on baseline questions for “current policy” and “current law.”

Treasury Secretary Scott Bescent blasted the CBO accounting methodology this week, expanding the debate over budget accounting that is involved at a new level by what official scorers call it “crazy.”

“I'm embarrassed by me,” he said in all of his podcasts. “I've been in the investment business for 35 years. I said with great confidence, “This is what the CBO scores say.” And I see that you didn't know – when you're on this side of the wall, you realize how crazy it is.

Bescent continued to criticize Congress's settlement rules. This is because it avoids the Senate filibuster, avoids the current Republican tax extension being underway, and requires revenue changes to be updated while “we don't need to update spending.”