Budget Committee Ranking Member Merkley Statement on CBO Baseline

WASHINGTON, D.C. – Today, Oregon’s U.S. Senator Jeff Merkley – Ranking Member of the Senate Budget Committee – issued the following statement following the annual release of the Congressional Budget Office’s (CBO) Budget and Economic Outlook:

“America’s working families are stretched thin. Over the past few years, inflation pushed the price of basic necessities like groceries and rent or mortgage payments sky high, and for many, wages are simply not keeping pace. Additionally, today’s CBO report confirms our debt is growing unsustainably. We know what works to counter these forces -- investing in working families. That’s why Congressional Democrats and President Biden worked so hard to pass the Inflation Reduction Act to deliver good-paying jobs, more affordable prescription drugs for seniors, and climate investments, all while reducing the deficit.

“America’s working families are clearly telling us that they need more relief. So why are Congressional Republicans and President-elect Trump betraying working families with tax giveaways for the wealthy while adding trillions of dollars to the debt? Extending Trump’s 2017 tax cuts would blow a $4.6 trillion hole in the federal budget over the next ten years – according to the CBO. Trillions of dollars that should fund basic services for all Americans, but instead will go into the pockets of the richest few. The CBO baseline today confirms the nation simply can’t afford the Trump tax giveaways that betray working families across America.

“Republicans must go back to the drawing board and work with Democrats to craft policies that strengthen the foundations America’s working families need to thrive, including lowering the costs of health care, building more affordable housing, improving education, and creating good-paying jobs while not adding trillions to the national debt.”

Key takeaways from the CBO’s Budget and Economic Outlook report include:

Economic growth was stronger in 2024 than previously projected. Inflation and interest rates are projected to continue declining while unemployment remains low.
The national debt, currently at 100 percent of GDP or the same size as the economy, is projected to exceed its previous record by 2029 and climb to 118 percent in 2035. CBO’s baseline represents current law, assuming that Republicans do not pass a new round of Trump tax cuts.
If the Trump tax cuts are not extended, the deficit will gradually decline over the next ten years, from 6.2 percent of GDP in 2025 to 5.8 percent of GDP in 2035. The primary (noninterest) deficit will drop from 3.0 percent of GDP in 2025 to 1.7 percent in 2035.
CBO’s projections show a $1 trillion smaller deficit over 10 years than their last report in June 2024, chiefly because of stronger economic growth, wage growth, and business profits.

Previously at the Budget Committee’s urging, CBO estimated that permanently extending the 2017 Trump tax cuts would add $4.6 trillion to the debt through 2034. It would cost even more now that the 10-year budget window includes 2035.

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