In a surprising twist, the same Congressional Budget Office (CBO) recently dismissed by Republicans as “totally unreliable” is now providing them with a potential fiscal lifeline. New data from the CBO suggests that tariffs implemented during President Donald Trump’s administration could reduce the U.S. deficit by $2.8 trillion — a figure that could reshape the ongoing budget debate in Washington.
Released Wednesday, the CBO’s projections claim that the tariffs, which took effect in May, could help shrink the federal deficit significantly over the next decade. As Bloomberg reports, “this estimate could provide a talking point for Republicans who have argued the tariffs could help offset the cost of a multi-trillion-dollar spending bill under negotiation in Congress.”
This comes at a time when Republicans have been heavily critical of the CBO. Just last week, House Speaker Mike Johnson (R-LA) took aim at the office during a Fox News appearance, saying, “It’s historically, totally unreliable. It’s run by Democrats. 84 percent of the number-crunchers over there are donors to big Democrats. They don’t have their best interests in mind, and they’ve always been off.”
The recent CBO estimates were requested by Democratic congressional leaders. Accompanying the release of the data, CBO Director Phillip Swagel cautioned that the projections come with notable caveats. “Estimates are subject to significant uncertainty,” Swagel stated, pointing to the unpredictable nature of tariff enforcement and implementation.
Bloomberg noted that this “uncertainty” stems from “how [the Trump administration] conducts its tariff policies.” Swagel added, “Moreover, because the United States has implemented no increases in tariffs of this size in many decades, there is little relevant empirical evidence on their effects.”
According to the CBO, while tariffs could reduce the fiscal deficit, they would come at an economic cost. Summarizing the CBO’s findings, Bloomberg reported that the “tariffs would pose a modest hit to economic growth, reducing the level of GDP by 0.6% by 2035.” In addition, the report predicts a temporary increase in inflation. “After 2026, the tariffs will not have additional significant effects on prices,” Swagel clarified.
Despite their earlier skepticism, Republicans may now find themselves leaning on the same CBO projections to justify their fiscal positions — a turnaround that underscores the complex and often contradictory politics surrounding economic policy and federal spending.