Effects on Deficits and the Debt of Enacting H.R. 1 and of Making Certain Tax Policies in H.R. 1 Permanent

CBO responds to a request from Senator Merkley for information about how federal deficits, debt held by the public, and debt-service costs would be affected by enacting H.R. 1, the One Big Beautiful Bill Act, as passed by the House of Representatives on May 22, 2025, and of permanently enacting 16 provisions in that bill.

CBO and the staff of the Joint Committee on Taxation (JCT) estimate that enacting the bill would increase deficits over the 2025–2034 period by $2.4 trillion, excluding any macroeconomic or debt‑service effects.

H.R. 1 would make numerous changes to tax provisions and spending programs. Although many of the changes would be permanent, expiration dates are indicated for some tax and spending provisions. Also under the bill, certain aspects of some other provisions would change over the next decade.

JCT has estimated that permanently enacting 16 of the tax provisions that would sunset under H.R. 1 at the end of 2028 or 2029 would increase primary deficits over the 2025–2034 period by an additional $1.4 trillion.

CBO estimates that if those provisions were made permanent, the additional debt-service costs would total $687 billion over the 10‑year period. That change would increase the cumulative deficit to $4.5 trillion. As a result, and net of any changes in borrowing for federal credit programs, CBO estimates that debt held by the public at the end of 2034 would increase from the January 2025 baseline projection of 117.1 percent to 127.7 percent of gross domestic product.

CBO's estimate of the additional amounts that the Treasury would borrow each year under H.R. 1 is determined primarily by the budget deficit. However, other factors, driven mostly by federal credit programs that are not directly included in budget totals, also affect the need to borrow from the public. As required by the Federal Credit Reform Act of 1990, the deficit reflects the net subsidy costs (the expected lifetime costs to the government for loans or loan guarantees) rather than annual cash flows. The estimated increase in debt service and debt held by the public accounts for those changes in cash flows.