How the One Big Beautiful Bill Act could affect the US economy
OBBBA brings modest growth gains while trade policies and rising rates weigh on the economy.
The One Big Beautiful Bill Act (OBBBA) could cause GDP growth to surprise to the upside by 0.1ppt in 2025 and 0.5ppts in 2026.
To quantify the risks to the baseline, we simulated three OBBBA scenarios:
- The OBBBA as passed by House Republicans
- A permanent OBBBA in which new tax cuts and spending increases don’t expire in 2028 and 2029
- A similarly permanent OBBBA, but with fewer budgetary savings
Even in the most optimistic OBBBA scenario, the bill wouldn’t sustainably offset the combined economic drag from the ongoing trade and immigration policies.
The OBBBA adds another wrinkle to the fiscal outlook, with tariffs emerging as a significant new revenue source. Higher tariffs will keep deficits at roughly a similar share of GDP over the next several years.
Treasury yields may fall more slowly in the coming years due to the upfront stimulus under the OBBBA, but the Section 899 tax provision risks applying even more upward pressure on rates.
Fill out the form to access the full scenario modeling results and see what the OBBBA could mean for the US economy.
