Subject: Re: BBB will reduce the deficit!
It's not a no-no. It's what's required.

Except that what results is the kind of pretzel logic that makes people hate accountants and accounting in general.

In 2017, when the original tax rates were scored for budget purposes, the CBO was required to calculate the effect on the budget deficit based on what the bill actually said. The bill said the tax rates were temporary, and would revert back to prior rates in 2025. So the CBO scored it that way. So only 8 years of lower tax rates were included in the calculation, instead of ten years' worth. That lowered the budget impact in the 2017 assessment.

And this made sense. In 2017, when what was being proposed was a significant change in the tax code (via SALT limitations and changes in the marginal rates), and therefore, what revenues the federal government would collect. This year's bill IIRC doesn't propose any significant changes to marginal rates (other than No Tax on Tips or Overtime, neither of which will move the needle much in collections).

Now, the proposed bill would change what the law says - instead of the tax rates reverting in 2025, they would be extended again. Which Congress, can certainly do, but that has a budget impact compared to what the law currently says.

And this is where the pretzel knot-tying comes in: The CBO is going to say "The 2017 law says the original tax cuts expire in 2025, so we're scoring the bill based on taxes going way up and therefore our projections of revenue are X". But that's misleading, because when the bill passes there will be...no change in the tax rates, no change in the equilibrium that's been established for the last 8 years.

Those are the scoring rules. One doesn't get to have it both ways.

The only folks "having it both ways" are the ones claiming the bill would somehow explode federal deficits. COVID was what did that (see below).





BTW, for those curious, this is the data from Treasury for the last ten years. The 10 year period runs from May 31, 2015 to May 31, 2025 (so each "year" is May to May):

In Billions $
Total Outlays Total Receipts Def
2024 $7,086.29 $5,064.90 $(2,021.39)
2023 $6,342.58 $4,716.88 $(1,625.70)
2022 $6,537.16 $4,597.33 $(1,939.83)
2021 $6,088.90 $4,888.50 $(1,200.39)
2020 $7,300.13 $3,717.71 $(3,582.42)
2019 $5,199.74 $3,264.74 $(1,935.00)
2018 $4,288.55 $3,364.13 $(924.42)
2017 $4,100.35 $3,393.60 $(706.74)
2016 $3,856.55 $3,280.78 $(575.77)
2015 $3,779.50 $3,271.77 $(507.73)


In June of 2020 the federal government ran an $864 billion deficit in just that month alone.

For just this year:


Month Outlays Receipts Def
4/30/2025 $592 $850 $258
3/31/2025 $528 $368 $(161)
2/28/2025 $603 $296 $(307)
1/31/2025 $642 $513 $(129)