Big Take Doing the Math on Trump’s Tax Bill
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Jun 19, 2025 Phillip Swagel, Director of the Congressional Budget Office, oversees crucial economic forecasts and analysis. In this discussion, he delves into the complexities of Trump’s tax bill and the ensuing political debates surrounding it. Swagel sheds light on the CBO's dual analysis approach, balancing static and dynamic effects. He emphasizes the importance of nonpartisanship in economic assessments while highlighting the challenges posed by the tax bill on the deficit and economic growth.
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CBO's Role in Legislation
- The Congressional Budget Office (CBO) works closely with Congress throughout legislation development to provide cost and economic impact feedback.
- Their extensive cost estimates detail tax and spending effects, focusing on accurate deficit implications.
Growth Impact Disputed
- Critics argue CBO underestimates economic growth spurred by the tax bill.
- CBO acknowledges growth impact but finds it smaller than supporters hope, basing conclusions on substantive analysis.
Tariffs Revenue Not Counted in CBO Deficits
- Treasury Secretary argues tariffs generate substantial revenue offsetting deficits from the reconciliation bill.
- CBO agrees this is valid arithmetic but excludes tariffs from cost estimates as they're not part of the legislation.