The Council of Economic Advisers (CEA) has issued a fresh advisory to Capitol Hill, urging lawmakers to take swift action on President Donald Trump’s sweeping tax and spending initiative known as the One Big Beautiful Bill (OBBB), warning of serious consequences if the legislation stalls.
In a memo titled “Ramifications of Not Passing the One Big Beautiful Bill,” shared exclusively with Newsmax ahead of its delivery to Congress on Wednesday, the CEA argues that the proposed legislation “will provide a growth boom to the U.S. economy, helping create millions of jobs, boost families’ take-home pay, spur investment and revitalize rural communities.”
The CEA document cautions that letting the policies from Trump’s first term expire would amount to “a $4 trillion tax hike over 10 years, the largest nominal tax increase in history,” and warned, “An economic downturn would likely follow.”
The memo lays out the anticipated fallout of keeping spending at the levels set by Joe Biden’s administration and failing to lock in the 2017 tax reductions enacted by President Trump. According to the CEA, such inaction could lead to the following:
• A reduction in GDP by as much as 4% over a four-year span.
• A loss of 6.1 million full-time equivalent jobs.
• Potential loss of health insurance for as many as 9.2 million Americans, with no alternatives in place.
• A recession-driven increase in the federal deficit, brought on by declining tax revenue and increased government outlays.
The health insurance projection appeared to take direct aim at Democrat lawmakers who oppose Trump’s budget blueprint. Despite accusing Republicans of threatening Medicaid, Democrats’ unwillingness to vote for GOP-crafted spending bills could, the memo implies, result in the very losses they claim to be preventing.
This isn’t the first such message from the CEA. On Sunday, the White House issued a separate memo through Newsmax flagging similar dangers tied to maintaining Biden-era fiscal levels and permitting the Trump tax provisions to lapse.
However, the latest White House analysis outlines a starkly different outcome should Congress approve the OBBB. “By preventing the 2017 TCJA from expiring and adding the new provisions of the OBBB and the president’s proposals, we would not just prevent an economic downturn but also raise growth, create jobs, boost incomes and ensure the U.S. is the most competitive business landscape in the world,” the memo said.
Should the bill pass, the CEA projects robust economic benefits, including:
• A near-term boost to real GDP of 4.2% to 5.2%, with longer-term gains ranging from 2.9% to 3.5%.
• Creation or preservation of 6.6 to 7.4 million full-time equivalent positions within four years, and 4.2 million jobs over the longer horizon.
• An increase in investment of 9.8% to 14.5% in the short term, and between 4.9% to 7.5% in the long term.
• An immediate lift in wages, with families potentially gaining $6,100 to $11,600 more, and a typical household with two children netting $7,800 to $13,300 in additional income due to tax relief for individuals and businesses alike.
• A revival of underserved areas, driven by enhanced Opportunity Zones that would attract over $100 billion in new capital, generate upwards of 1 million new jobs, and lead to the construction of hundreds of thousands of new homes.
{Matzav.com}