Speaker Mike Johnson says the Congressional Budget Office is “notorious for getting things WRONG.” History tells a different story.

Congressional Republicans are taking a lot of flak for the One Big Beautiful Bill, a tax and spending package currently making its way through Congress.

Former Trump administration official Elon Musk called the bill an “abomination” that would “massively increase the already gigantic budget deficit.”

Non-partisan economists from the University of Pennsylvania, the Tax Foundation, and even Congress’s own Congressional Budget Office (CBO) all warn the bill would saddle Americans with trillions of dollars of new debt. You can see the forecasts for yourself here.

Even some Senate Republicans are concerned about the bill’s effect on the deficit.

House Speaker Mike Johnson isn’t deterred. He insists that Musk is “way off on this” and that the CBO is “notorious for getting things WRONG.”

So, who’s right? Let’s look at the facts.

The Trump Tax Cuts 1.0

The One Big Beautiful Bill extends the 2017 Trump tax cuts, which were set to expire at the end of this year. The CBO released forecasts about those cuts back in the day, and now – with the benefit of hindsight – we can see how accurate they were.

In 2018, the CBO predicted that the federal government would collect $27 trillion in taxes between 2018 and 2024, $1.4 trillion less than it would have collected without the tax cuts.

According to conservative economist Jessica Riedl, the CBO’s prediction for 2018 revenues was 99.8% accurate and the prediction for 2019 was 99.2% accurate. In both cases, CBO expected the government would collect a few billion dollars more than it eventually took in.

The numbers get dicey after 2020, of course. No one, not even the CBO, could predict the Covid pandemic or the historic levels of inflation that followed. The government ended up collecting $28.5 trillion in revenue between 2018 and 2024, much more than the CBO’s prediction of $27 trillion.

But does that mean the CBO whiffed? Not necessarily. According to the non-partisan Commitee for a Responsible Federal Budget (CRFB), “all of this additional revenue can be explained either by higher inflation or by a temporary one-time revenue surge that came in 2022.”

The spike in 2022, CRFB says, was because the tax brackets weren’t re-adjusted for inflation until 2023. If you adjust for inflation and remove that spike, the CBO’s prediction was off by only $98 billion, an accuracy rate of 99.5%.

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The Inflation Reduction Act

Many of the CBO’s harshest critics on the right are pointing to their projections for the Inflation Reduction Act, Democrats’ signature tax-and-spending act under President Biden.

When it first passed in August 2022, the CBO predicted the Inflation Reduction Act’s clean energy subsidies would add $370 billion to the deficit over a decade. Just a couple of years later, CBO revised its estimate to $786 billion… more than double what it previously expected.

Other sources are even more skeptical. Goldman Sachs pegs the Inflation Reduction act at $1.2 trillion over a decade, while the libertarian Cato Institute predicts its impact will be anywhere from $986 billion to $1.97 trillion… over five times the CBO’s original estimate. CBO director Philip Swagel said costs were higher because more people used the tax credits than they expected.

The American Recovery and Reinvestment Act

In the wake of the Great Recession, Congress passed the American Recovery and Reinvestment Act (ARRA) to stimulate the economy in 2009.

At the time, the CBO expected the ARRA to grow the deficit by $810 billion between 2009 and 2015. In hindsight, they were pretty close: the ARRA ended up adding $833 billion to the deficit.

Most of the misses came from the later years of the projection. In the first three years after the bill was passed, the CBO’s projections were 97% accurate, off by a mere $6 billion.

The CBO underestimated how bad the ARRA would be for the deficit in the later years, which goes to show how forecasting gets more difficult and less reliable the further out the projection goes.

Takeaways

Look carefully: when the CBO is wrong, it’s nearly always because they underestimated just how bad the bill would be for the deficit.

If the CBO is right, the One Big Beautiful Bill in its current form would add $3 trillion to the deficit. If they’re wrong, history suggests the deficit would grow by even more.

Speaker Johnson ought to hope the CBO is right, for our budget’s sake.

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Peyton Lofton

Peyton Lofton is Senior Policy Analyst at No Labels and has spent his career writing for the common sense majority. His work has appeared in the Washington Examiner, RealClearPolicy, and the South Florida Sun Sentinel. Peyton holds a degree in political science from Tulane University.

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