Fact Check: The One Big Beautiful Bill Act will significantly fuel the US economy.

Fact Check: "The One Big Beautiful Bill Act will significantly fuel the US economy."

What We Know

The claim that the One Big Beautiful Bill Act (OBBBA) will significantly fuel the US economy is nuanced. According to a study by the Budget Lab, the OBBBA is expected to provide a short-term boost to GDP growth, averaging an increase of 0.2 percentage points per year from 2025 to 2027. However, this short-term growth is countered by long-term negative effects, with projections indicating that by 2054, GDP could be nearly 3% smaller than it would have been without the bill. This decline is attributed to increased debt leading to higher interest rates, which in turn crowd out private investment and slow economic growth.

Similarly, the Tax Foundation notes that while the OBBBA could increase economic output, it is likely to worsen deficits. Their estimates suggest that the House version of the bill would increase GDP by 0.8% in the long run, while the Senate version might achieve a 1.2% increase. However, both versions are expected to contribute to a growing deficit, with the Joint Committee on Taxation (JCT) predicting that GDP growth would eventually fall below baseline projections.

Analysis

The evidence suggests that while the OBBBA may provide a temporary boost to the economy, its long-term implications are less favorable. The Budget Lab's analysis indicates that the initial growth is modest and will be offset by negative growth in the following decades due to rising debt and interest rates. The increase in debt-to-GDP ratio is projected to reach 183% by 2054, compared to 142% if the bill were not passed.

The Tax Foundation corroborates this view, indicating that the OBBBA would indeed stimulate short-term economic output but would simultaneously exacerbate the deficit. Their dynamic estimates show that while the bill could lead to some growth, it does not provide sufficient long-term incentives for sustainable economic expansion.

Moreover, the Tax Policy Center highlights that the economic growth from the OBBBA would offset less than 10% of its projected $2.4 trillion net cost, suggesting that the bill's benefits may not outweigh its fiscal burdens. This critical perspective emphasizes the potential for the bill to create a short-lived economic uplift while leading to significant long-term fiscal challenges.

Conclusion

The claim that the One Big Beautiful Bill Act will significantly fuel the US economy is Partially True. While there is evidence supporting a short-term boost to GDP, the long-term outlook is concerning, with projections indicating a decline in economic growth due to increased debt and higher interest rates. The act may stimulate the economy temporarily, but its overall impact on fiscal health and sustainable growth is likely to be negative.

Fact Check: The One Big Beautiful Bill Act will significantly fuel the US economy.