
The U.S. Senate voted early on Monday to adopt a new baseline for determining the budgetary impact of the “Big, Beautiful Bill” (BBB), potentially obscuring some major costs.
The newly adopted measure is “current policy baseline,” a method that estimates budgetary changes compared to current existing policy, even if that policy is set to expire. This means the proposed extension to President Donald Trump’s 2017 tax cuts would be measured as taking $0 away from the federal budget, since it would be an extension of existing policy and not new policy.
Current policy baseline is new to the legislature, but it is often used to project deficits in consulting. Former President Barack Obama’s budget office also supported the use of current policy baseline to project deficit impacts of some legislation, although it wasn’t used in the legislature itself.
The usual measure, “current law baseline,” is a method that estimates budgetary changes based on current statutory requirements and results in a radically different cost. This measure would include the extension of Trump’s 2017 tax cuts in the budget tally, thus adding an estimated $3.3 trillion in costs to the budget over 10 years, according to the Congressional Budget Office.
Much of the criticism of adopting the current policy baseline comes from concerns about mixing the two measures, since Trump’s 2017 tax cuts were originally passed using current law baseline.
This has major ramifications for reconciliation, the process used to allow budget legislation to bypass the normal 60-vote requirement to pass the Senate. If the Senate used the current law baseline, the BBB could increase the federal deficit to more than what the budget resolution establishing reconciliation accounted for, as well as increase the deficit outside of the 10-year budget window.
This would have violated the rules of budget reconciliation, requiring Republicans to either rework the bill or gain a supermajority to pass it. Senate Democrats tried to force this change, challenging the use of current policy baseline on Monday.
Senate Minority LeaderChuck Schumer (D-NY) said Sunday “Republicans are doing something the Senate has never done before, deploying fake math, accounting gimmicks, to hide the true cost of the bill… …to vote yes on this, make no mistake about it my colleagues, will in a dramatic way further erode the Senate.”
Schumer’s challenge alleges this will set a precedent for watering down the Senate’s 60-vote rule, but the challenge was voted down on partisan lines.
Sen. Lindsay Graham (R-SC) countered that he has the authority as Senate Budget Committee chair to determine the budget baseline, saying “I’ve never felt better. I’ve been wanting to do this for, like, a long time.”
In effect, adopting the current policy baseline will lower the price tag of the bill, but not actually lower the costs. The $3.3 trillion lost due to extending tax cuts will still be lost, making the overall bill cost much more than it says on face value, the Congressional Budget Office found.
The Congressional Budget Office estimates this will result in a 0.3% increase in American household income from 2025 through 2027, but shrink Americans’ incomes overall in 2031 and beyond.
The office also predicts that by roughly 2046, the reduction of income will be larger than the tax cut itself. By 2055, it estimates average income will be 3.3%, or $4,400, in today’s dollars, which is below what it would have been without the tax cuts.
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Author: Kristina Watrobski
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