The cost of extending the 2017 tax cuts enacted under President Donald Trump has expanded to $3.8 trillion over ten years, putting a massive price tag on what is likely to be a top issue in Washington next year, according to new estimates from Congress’s fiscal scorekeeper.
The Congressional Budget Office’s estimate, released Wednesday, is double the $1.9 trillion cost of the original Trump tax cuts — a more expansive bill which also included permanent reductions in corporate taxes.
The expiring portion of the tax cuts include reductions in individual tax rates and an expansion of the child tax credit. The new CBO cost estimate for renewing just that portion is up from a $3.5 trillion estimate made last year for extending the tax cuts, which are scheduled to sunset at the end of 2025.
Swagel said personal income tax cuts don’t stimulate economic growth as much as the permanent business tax cuts.
Swagel said that CBO raised its projection for this year’s budget deficit upward from the $1.6 trillion estimate issued in February, approaching $2 trillion. The recently enacted $95 billion Ukraine, Israel and Taiwan aid package, an FDIC bank rescue and increased federal student loan forgiveness all are worsening the deficit outlook for the year and decade.
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Given the financial impact of recent global events on the national budget, how should priorities be balanced between domestic needs and international aid?
