How the CBO got it wrong again: Trump's economic bill set to generate trillions in surplus, not debt

Fox News ^ | 7/11/2025 | Peter Navarro

[Pete Dovgan]

The Republican Congress and President Donald Trump just delivered a major victory to the American people by passing and enacting into law the historic One Big Beautiful Bill Act (OBBB). Predictably, liberal media outlets – led by CNN, MSNBC, the New York Times and the Washington Post – continue to insist the OBBB will add trillions of dollars to our national debt.

The truth – backed by both historical experience and robust economic analysis – is the exact opposite. President Trump’s OBBB will not only boost jobs and take-home pay for America’s working-class families. It will slash deficits by trillions of dollars even as its targeted expenditures will strengthen our national defense and secure our borders. As a bonus, OBBB will rapidly accelerate the deportation of millions of illegal aliens now stealing jobs from American citizens and driving down wages.

At the center of the Fake News misinformation storm is the Congressional Budget Office. For years, the CBO has been trapped in a stale left-wing Keynesian mindset and stubbornly committed to static scoring models that fail to grasp how real-world economies respond to bold, pro-growth policies. As someone who has witnessed President Trump craft his economic agenda from inside the West Wing, I can tell you firsthand: when you cut taxes, slash job-killing regulations, achieve energy dominance, defend America’s manufacturing base with tariffs and fight for fair trade, the economy doesn’t just inch forward – it takes off.

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TOPICS: Chit/Chat
KEYWORDS: economy

[Pete Dovgan]

The CBO is left wing biased. They are the ones saying that Trump will add to the deficit. If it’s wrong again, for the same reasons it’s been wrong since Obama, it needs to be reorganized and defunded. The constant politics from Federal employees and agencies damages the national. At least make it accountable, and them accountable.

[SaveFerris]

[the economy doesn’t just inch forward – it takes off.]

I pray this is true - at least for awhile - I could use to get back to making money again in a decent way

Prayers up!

[SaveFerris]

(Though I still hold to my long-term forecast for the world, America has LONG been the economic victim)

[Redmen4ever]

This isn’t Peter Navarro’s first go as tariff czar. He had the position in 2020.

That year, most prominently, Trump made a deal with China involving tariffs on certain Chinese goods and a commitment by China to buy so much American farm product. (All things considered, I thought this was a good deal.) There were other initiatives, but for various reasons these other initiatives were mostly muted.

In the end, Trump made no progress in closing the trade deficit and raised only a small amount of money on the Chinese tariff.

https://www.politico.com/news/2020/10/06/trump-trade-deficit-426805

To be sure, the budget deficit ballooned (to a level relative to GDP not see since WWII), but the budget deficit was mostly because of paycheck protection and other COVID-related spending. (To be sure, Trump, most Republicans and practically every Democrat were for the spending. Only Freedom Caucus-type Republicans were opposed.)

Now Navarro is back, and it looks as though Trump means business. There’s a lot of uncertainty about this, as Trump has been postponing big tariff increases. But, assuming Trump finally pulls the trigger, we’ll have our big beautiful text of tariffs.

[econjack]

Finally, a news story that shows what is likely to happen under tariffs. People don’t understand how tariffs work in the marketplace and they don’t see how they affect economic growth, especially in the long run.

[linMcHlp]

bttt

[econjack]

Trump needs to quit stalling on implementing tariffs. He’s trying to capture the market effects of tariffs by threat rather than by implementation. That can only work in the short run. Time to start banging some economic heads...

[Hyman Roth]

The economy is only booming for the 1% will gramps and granny choose between meds and dog food. Hakeem Jefferies. 3……2……1

[central_va]

The decades of one sided trade and no tariff protection is radical. Trump is going back to normal economic policy and protection.

[The Louiswu]

If we’re still trillions in debt how is it a “surplus”. EILIF please

[central_va]

Even when the tariffs restores the manufacturing base and reduces or eliminates the deficit Libertarians will NEVER admit they were wrong.

[central_va]

You are confusing the debt with the deficit. They are different things.

[deport]

Eilif Philipsen (21 July 1682 – 20 June 1785) was a Norwegian
farmer known for his longevity: he was the first accurately
documented centenarian ever, ...

[Vermont Lt]

I really doesn’t much matter. If revenues come in “trillions” above budget, Congress will merely look at that as if it’s a windfall. They will spend 130% of any surplus, rather than applying it to the National Debt.

Congress IS the problem.

[hal ogen]

So many problems...so little time.

[Owen]

This sort of article tends to be full of English words and not so full of specific numbers. The words are intended to get people to punch the air in excitement about . . . Whatever.

There are not a lot of numbers there to stand the test of time as regards predictions versus reality.

The concept of tariffs is that they have a purpose. They are supposed to bring manufacturing back to the US. They are, if they fail to do that, supposed to generate revenue.

So impact on the deficit in a favorable way only takes place if the manufacturing does not return to the US. If it did then you’re not collecting tariffs anymore on that manufacturing output.

This is just straightforward math. If in one’s first paragraph one says that manufacturing will return to the US and generate enormous numbers of jobs then that output does not generate tariffs anymore since it is domestic manufacturing. If you are successful in bringing manufacturing home you will fail at collecting tariffs. This is just math.

As for the jobs, who is it that is out of work that is going to suddenly start working? What usually happens in this discussion is pointing at the workforce participation rate and how it declines and announce that this is where those jobs will manifest. That shrinking participation rate will stop shrinking because those people will go to work at manufacturing jobs.

But that’s not how the measurement works. The workforce participation rate derives from demographics. The workforce total has a minimum age but no maximum age. The workforce is actually including 85 year olds. As the population ages and those people stop working, of course the participation rate declines. It’s not some mystical economic effect causing this. It’s just the mathematics of the aging population.

So no. There’s no magic. If you bring manufacturing back to the US and the people who will work at those jobs are currently working now at some other job. Nothing wrong with that, but you can’t claim a double count in the math. If they leave another job to take the manufacturing job you don’t get to double the count of the jobs.

[OHPatriot]

BINGO!!!!

[SharpRightTurn]

A tip of the hat to Navarro. I am glad he is on the team.

[God luvs America]

when has the CBO got it right??? They underestimated the costs of obummercare, overestimated the enrollment and claimed it would cut the deficit...

[Emcane]

You failed to mentioned the wage rates for manufacturing vs the jobs the workers currently hold. My guess is that rate is higher, so those workers will have more $ to spend and pay more in income and sales taxes. Why is that not included in your summary of what tariffs will do?