Research @ Citi Episode 40: Big Beautiful Bill – Where is it heading?
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Jul 2, 2025 
Rob Sockin, a member of Citi's Global Economics team, dives into the complexities of the Big Beautiful Bill being debated in Congress. He highlights the ongoing debates over tax policies and spending cuts and their potential impact on the national deficit. Sockin addresses the troubling rise of government deficits worldwide, detailing the implications for economies like France and China. He also discusses how the Federal Reserve is navigating these turbulent waters while balancing inflation and growth challenges. It's a fascinating look at fiscal policy's future!
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Uncertainty Around Big Bill
- The "Big Beautiful Bill" is very complex, with multiple versions negotiated between the House and Senate.
- Its passage is likely by the July 4th deadline but with uncertain final details due to many policy disagreements.
Policy Disagreements in Bill
- Key disagreements in the bill involve tax cuts, Medicaid spending cuts, green energy subsidies, and SALT deduction caps.
- These contention points create negotiation challenges between House and Senate versions.
Bill's Impact on Deficits
- The bill is projected to increase deficits to about 6% of GDP annually, unusually high outside crisis times.
- Despite tax cuts, tariff revenues partly offset deficits, but net deficits remain substantial.