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Short Analysis
April 2018

Tax Cuts, Not Health Care Spending, Are Driving Increased Fiscal Deficits

Today, the Congressional Budget Office (CBO) released a new budget baseline for 2018 to 2028. The baseline report shows a significant increase in projected budget deficits compared to the 2017 baseline.[1]

CBO makes it clear that the primary driver of this deficit increase are the massive tax cuts that were passed into law late last year.[2] This projection is consistent with CBO estimates published before the tax bill was even passed into law, showing the tax cut would add approximately $1.5 trillion to the deficit.[3]

Read our analysis of the new CBO baseline.

The CBO baseline matters because it demonstrates the current and near-term future fiscal health of the federal government. It provides policymakers with a snapshot of the government’s revenue (taxation) and spending trends, which helps them to make choices regarding future policy changes.