Debt-Service Effects Derived From H.R. 1, the One Big Beautiful Bill Act

CBO responds to a request from Senator Merkley for information about how federal deficits and debt held by the public would be affected by enacting H.R. 1, the One Big Beautiful Bill Act, as passed by the House of Representatives on May 22, 2025.

CBO and the staff of the Joint Committee on Taxation (JCT) estimate that enacting the bill would increase deficits over the 2025–2034 period by $2.4 trillion, excluding any macroeconomic or debt‑service effects. That change stems from a reduction in revenues of $3.7 trillion and a reduction in outlays of $1.3 trillion over the 2025–2034 period.

CBO estimates that the additional debt-service costs under the bill would total $551 billion over the 10-year period. That change would increase the cumulative effect on the deficit to $3.0 trillion. CBO estimates that the debt-service increase from the change in revenues would amount to $716 billion. Other provisions would, on net, result in a decrease in debt-service costs of $166 billion.

As a result, and net of any changes in borrowing for federal credit programs, the agency estimates that debt held by the public at the end of 2034 would increase from CBO's January 2025 baseline projection of 117.1 percent to 123.8 percent of gross domestic product.

CBO's estimate of the additional amounts that the Treasury would borrow each year under H.R. 1 is determined primarily by the budget deficit. However, other factors, driven mostly by federal credit programs that are not directly included in budget totals, also affect the need to borrow from the public. As required by the Federal Credit Reform Act of 1990, the deficit reflects the net subsidy costs (the expected lifetime costs to the government for loans or loan guarantees) rather than annual cash flows. The estimated increase in debt service and debt held by the public accounts for those changes in cash flows.