The White House is presenting its final argument in support of President Trump’s “One Big Beautiful Bill Act,” which includes some remarkable projections for the US economy that diverge from those of independent economists. How remarkable? Think economic growth of 4.9% in the short term and up to $11.1 trillion in deficit reduction over the next decade if the Senate bill is passed and Trump’s agenda is implemented.
Acknowledging the magnitude of these numbers, Council of Economic Advisers chair Stephen Miran shared these findings during a call with reporters, backed by a 27-page report. While the report paints a positive picture, it has faced skepticism from economists who hold different views.
Despite differing opinions, the report suggests that Trump’s overall policy initiatives, spanning from the bill to deregulation efforts and tariffs, could result in substantial GDP growth, increased investment activity, and higher real wages and take-home pay.
Miran, who heads Donald Trump’s Council of Economic Advisers, argues that certain provisions in the bill, particularly those related to business deductions like research and development, could spur corporate investment, leading to a potential 4.6% to 4.9% increase in GDP growth over the next four years.
However, this aggressive projection contrasts with more conservative estimates, such as the Tax Foundation’s 1.1% figure. The White House asserts that this growth will then contribute to significant deficit reduction, potentially saving trillions over the next decade and benefiting average families.
These optimistic forecasts have been met with criticism from various economists, some of whom doubt the bill’s deficit reduction claims. Independent analyses have projected lower economic growth and estimated a $3 trillion cost over the next ten years.
The ongoing debate follows the House’s passage of an initial bill last month, with subsequent amendments in the Senate. Majority Leader John Thune aims to finalize these amendments and bring the bill to a vote series starting Friday, a process closely monitored by Wall Street due to its implications for the debt ceiling.
However, challenges remain as Republicans navigate unresolved disputes over different bill components, including concerns over state and local tax deductions.
Recent Senate changes that involve cuts to Medicaid are expected to increase costs, further troubling fiscal hawks. A recent report from the Joint Committee on Taxation reveals a new estimated cost exceeding $4 trillion. The White House report on Wednesday detailed how they aim to achieve a total cost of $11.1 trillion, with about $2.1-2.2 trillion in deficit reductions attributed to the bill itself. Additional savings are projected to come from cuts in discretionary spending (approximately $1.8 trillion) and increased tariff revenue (around $3.2 trillion). However, the tariff revenue projection is contingent on tariffs remaining at current levels for the next ten years. The report also highlights potential deficit reductions of $1.3-3.7 trillion over the next decade from deregulatory and energy policies. These new figures have widened the gap between economists’ projections and the White House estimates. Heather Boushey, a former member of Joe Biden’s Council of Economic Advisors, criticized the bill for not being deficit-neutral and questioned the calculation methods. The disparity in cost projections between economists and the White House has now reached $15 trillion. Ben Werschkul, a Washington correspondent for Yahoo Finance, covers political news related to business and financial policies influencing stock prices. Stay updated on the latest financial and business news from Yahoo Finance.
