Senate excludes trillions in debt to make Trump’s tax bill seem cheaper
Senate Republicans slapped a price tag on their tax package that is nearly 90% lower than the version that recently passed the House. They didn’t bring the price down by changing the policies in the One Big Beautiful Bill. Instead, the Senate changed the way they did the math.
Senate Republicans are using a new method to estimate the costs of their tax package that ignores the price of continuing any tax policy in effect when the bill is passed. That method of accounting, called the “current policy” baseline, lets the Senate advertise President Donald Trump’s tax package at one-tenth of its impact on the nation’s finances as estimated by Congress’s usual way of counting costs. If the costs were estimated in the traditional way, the Senate’s proposed tax package would add $4.2 trillion to the national debt, according to preliminary estimates from the nonpartisan Committee for a Responsible Federal Budget.
“This would be the biggest and maybe most economically costly gimmick in American history,” said Marc Goldwein, vice president of the Committee for a Responsible Federal Budget, in a post on X.
The most expensive part of the tax package is maintaining the status quo. If Congress doesn’t act, most of Trump’s signature 2017 tax cuts will expire this year. Extending those cuts through 2034 accounts for the vast majority of the bill’s estimated impact on the national debt. But the Senate’s method of cost-counting compares the cost of extending the tax cuts against the government’s finances with the cuts in place, not against the government’s finances if the cuts expire.
To get a better sense of how the Senate’s “current policy” baseline method works, think about going to the movies. Your ticket costs $10, the same as it did last week. This week, you decide to also buy a bucket of popcorn for $5. How much are you spending?
By traditional congressional accounting, you’re spending $15. But by the Senate’s new estimation method, you will only be spending $5. While that accurately represents how much your costs changed from one week to the next, it’s not a good prediction of the amount you will need to pay at checkout.
How cost estimates could determine the future of the bill
Switching to the “current policy” baseline method of estimating costs omits a staggering amount of borrowing. Preliminary estimates from CRFB show that over 10 years, the tax package would raise the national debt by $4.2 trillion — or more, if some temporary new tax cuts were extended into the future.
Despite its tiny official sticker price, the Senate’s tax proposal is actually more expensive than the House’s tax bill when both are measured the same way. There are some differences between them: For instance, the Senate’s version has more generous corporate tax cuts and includes a permanent, smaller version of the child tax credit. Still, the bills are broadly similar, and the differences between them do not account for the disparity in price tags.
The tax bills in the Senate and the House essentially do the same big things. And despite its tiny official sticker price, the Senate’s tax proposal is actually more expensive than the House’s tax bill when both are measured the same way. There are some differences between them: For instance, the Senate’s version has more generous corporate tax cuts and includes a permanent, smaller version of the child tax credit. Still, those differences do not account for the disparity in price tags.
“Taken as a whole, the structures of the two bills are actually more similar than they’re different,” said Joseph Rosenberg, senior fellow at the Tax Policy Center.
While this isn’t the first time the “current policy” baseline has been discussed — the Obama administration used it to argue for extending President George W. Bush’s tax cuts in 2012 — it’s the first time Congress has used it to estimate the cost of legislation. It’s also the first time the method would be used to avoid a Senate filibuster.
Republicans are trying to use what’s known as the budget reconciliation process, which only needs a majority vote, to pass their tax and spending bill.
But Republicans can’t use the reconciliation process if their bill increases the deficit beyond the 10-year window. That’s why the method of calculating the tax bill’s costs matter so much. If they are forced to put the bill to a normal vote, Senate Democrats could use a filibuster to block its passage.
Who gets to decide which baseline to use? It’s complicated. Traditionally, it should be the Senate parliamentarian, the nonpartisan official tasked with upholding the chamber’s legislating rules. The presiding officer of the Senate — Vice President JD Vance — can overrule the parliamentarian. He can also fire her, though Senate Majority Leader John Thune (R-S.D.) has said Republicans will not purse that option. The Senate as a body can also overrule the parliamentarian by a simple majority vote.
Republicans are arguing now that the chair of the Budget Committee, Sen. Lindsey Graham (R-S.C.), determines the baseline, effectively circumventing the parliamentarian. She can’t rule on the matter, GOP lawmakers reason, if she’s never asked for an opinion. If Democrats challenge Republicans’ determination, Thune can put the matter to a vote of the Senate, where Republicans hold a three-seat majority.
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• Jacob Bogage contributed.