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There's been a flurry of activity on Capitol Hill in Washington as lawmakers consider President Trump's tax bill, known as the One Big Beautiful Bill. It's called the One Big Beautiful Bill, and it will be the biggest bill ever passed in our country's history. It passed the House in May and is currently being considered by the Senate. In the course of that process, last week, Treasury Secretary Scott
Bessant testified before the Senate Finance Committee. We appreciate you being here with us, and you may proceed with your statement. Thank you, Chairman Crapo, ranking Member Widen. Lawmakers had a lot of questions, including what impact do it have on the deficit and inflation?
So you'll the Secretary of the Treasury, so I'm asking you, what is your view? Will this bill increase or decrease the guests?
It is?
But over several hours of testimony, one thing kept coming up.
The non partisan CBO, Which is certain CBO is one of our advisors. Are the same CBO that got it wrong?
Then this is not the non partisan congressional budgets meant from CBO, I believe is that all the fifteen million people lose the health insurance. Well, your colleagues have a fixation on CBO, and I.
You're And it's not the first time the Congressional Budget Office has been dragged into the spotlight. This non partisan agency puts together projections and analyzes to help Congress determine the impacts of a new budget or new legislation on the economy. And this process brings out a fair share of critics who don't like the math because it chips
away at support for the legislation. But this time around is a little different, and you could hear that in Besson's comments to the Senate Finance Committee.
I am not attacking the people who work at the CBO, Sure, I am attacking their methodology, and the methodology is completely illogical. It assumes base.
The rhetoric around CBO has been heating up. But as the bill gets closer to passage, the agency has an important job to do. And so there was one person I really wanted to talk to, the Director of the Congressional Budget Office himself, Philip Swagel.
When our numbers go the way that someone wants, well, then we're heroes. When the numbers go in the wrong way. You know, we're just the opposite. And the thing about the agency is that we're nonpartisan. Whatever the numbers are, well, that's what we print, that's what we convey to policymakers. That's our job.
I'm Saliah Mosen and this is the Big Take from Bloomberg News Today. On the show, I sit down with CBO director Phil Swagel to find out how his non partisan federal agency focuses on economic forecasts when it's sitting at the center of a political firestorm with Trump's tax bill moving through Congress. I wanted to start by asking Phil about the role of the Congressional Budget Office through the life cycle of a piece of legislation like the one Big Beautiful bill.
So, as the Congress is considering that bill, we are working with them from the very beginning really until the very end. So at the very beginning the two chambers, starting with the House, we're working on the budget resolution and setting out the overall fiscal parameters on which the bill is built. Then as the House considered the legislation, we worked with the committees in the House as each one developed their ideas on medicaid, on snap benefit, the
immigration policies, the Armed services, everything. We work back and forth with the staff of the different committees as they develop their ideas, and we're just giving them feedback. We're saying, here's how much it costs, here's what we think it does, and they fine tune it. Then we do a cost estimate of the whole thing. And that's all for the House. And now the Senate is taking up the bill, and we're doing the same thing again with the Senate.
What did you find from.
The bill has a huge amount in it And if you look on the CBO website, there's a cost estimate for the bill that was passed by the House, and it's actually a spreadsheet and is a spreadsheet with many tabs, one tab for each committee and then a summary and then within each tab there's a huge number of lines. But it gives anyone listening, anyone who goes to our website and gets the spreadsheet, it gives you an indication
of how sprawling the bill is. And it has both tax policy, you know, both new provisions such as the no tax on tips and then extensions of existing provisions from the twenty seventeen Tax Act, and then it has lots on the spending side, some healthcare policy snap benefits, and much more so. There's lots in it. On the tax side. Relative to current law, the tax policy increases the deficit, and on the spending side, the changes that
were made in the legislation generally reduce the deficit. The net of those two comes up to two point four trillion dollars over ten years, and that's a deficit increase.
So right now, what are your Republican critics taking issue with?
I think the most salient criticism is that we the CBO and our colleagues that Joint Committee on Taxation are not optimistic enough on the growth impacts of the legislation. Some members of Congress say, you know, if the twenty seventeen Act provisions were to expire at the end of this year, as is in current law, that would have a very big negative effect on the economy. And so then they say, okay, well, we think therefore this bill should have a big positive effect on the economy because
it prevents that expiration. And you know, we've looked at it and come to a in terms of some agreement some disagreement. You know, we think that the bill does support stronger GDP growth, but it's probably not as big as some of the critics were hoping for or expecting. And so that's a substantive criticism, and it's the kind
of welcome one. I mean, if someone wants to know, well, why aren't you more optimistic on this legislation, Not in the normative sense, not like it's a good idea or bad idea, but why don't you a CBO think there will be a bigger positive growth impact. Well that's a completely substantive discussion that you know, we have within CBO every day.
You're pretty zen about it, though you're getting attacked by a lot of by the President of the United States, by the Treasure secretaries. He's not attacking the people who work at CBO, but attacking the math, the methodology, calling it illogical.
Okay, you know, I look what the Secretary has done is he's made substantive assertions that he thinks the math should be done differently. And I know he said this
in a couple of ways. One is on tariffs, and the Secretary is pointed out there is very substantial revenues coming from the tariffs that President Trump has put in place, you know, since the inauguration of his second term, and in the Secretary's mind, that should be considered as balancing out any deficit increase from the reconciliation legislation, and that arithmetic works. And so we found the reconciliation legislation increased
the deficit by two point four trillion. The terriffs reduced the deficit by two point five trillion, and that is completely reasonable arithmetic. We don't have it in our cost estimate for the legislation just because the tariffs are not part of legislation, but we have a separate analysis that the Secretary has pointed to, and that's completely a reasonable thing and a substantive thing.
After the break, we dig into the CBO's latest report on the One Big Beautiful Bill and what it's like to work there right now. This week, as the Senate considered the One Big Beautiful Bill, the non partisan Congressional Budget Office estimated the cost of the House version that passed in May. I wanted to dig into that process with CBO's director Bill Swagel.
The first thing we did was a so called static analysis, where a conventional analysis that assumes that the economy is static is unchanged. Now the legislation as I said before is really gigantic. It's sprawling across this massive spreadsheet. One would expect that to affect the size of the economy in lots of different ways. Lower tax rates will give people incentives to work more, for businesses to invest more, their changes in immigration, that will affect the labor supply,
and so on. In the first estimate we did, we essentially ignore all of that and just take the economy as given the dynamic estimate we put out, you know more recently then says, well, let's think about those effects of the legislation on the economy and then the feedback from the changes to the economy back to the budget. And that's the difference.
Between the two, tell me the headline of the report from earlier this week.
So we and our colleagues at the Joint Committee on Taxation look at the legislation at all the many pieces of it. Instead, there's a sense of two types of effects. One is improving incentives more people to work, for businesses to invest more, and that would lead them to hire more, and that increases the size of the economy. On the other hand, the deficit is larger. I mean, this is a tax cut, so revenues go down, and that increase in the deficit has an effect on the economy. It
leads to higher interest rates. Now it's a modest effect, but the higher interest rate then plays out over the very large stock of debt that the US government has, and that goes in the other direction. That higher interest rates over a large debt means interest payments for the US are much larger, and it's nearly a trillion dollars of additional deficits because the impact through interest rates far outweighs the positive impact on the deficit from stronger growth.
I want to talk to you a little bit on a more personal person level on truth social President Trump said, the CBO is Democrat contry, but you have previously served in a Republican administration. You're also an economist. How do you balance or even separate your personal economic philosophies from the job of overseeing a non partisan office.
The non partisan aspect of CBO is really the foundation of the agency. In fact, that's what I tell the new staff when I meet with staff, generally on their first day, I say, take a long view. You're going to work on legislation that you might think is a good idea, something that you might think is bad idea. Most of the people, almost everyone we work with on the Hill is really a very nice and kind of
smart and wonderful person. Occasionally there's some people who are you know, less so, and we're going to support them just as hard and you know, just just the same as the others and just take a long view. It's important for Congress and for the nation to have an agency like us, you know, for me, I start from there and everything else is easier, you know. Criticisms on you know, from the executive brand, from the White House. Again, I understand it. It's part of the political process. I
expected it. I don't get worried about it. So I'm really able to separate the kind of political process from the substance. And I feel like none of it is personal. It's not about me. It's just about the political process.
I do wonder if CBO can weather the storm, though, because that'sn't himself specifically said he's not attacking CBO employees, but the White House Press Secretary Carolyn leave It did say that CBO is a partisan and political agency, and she said that staff haven't contributed to a Republican since two thousand and have for Democrats.
You know, there is some advocacy group that put out a report along those lines that I think she's leaning on. It's just a completely made up number. And the people who work with CBO, you know, our counterparts on the Hill, they know our staff, they know we're nonpartisan, they trust us, they understand our processes. I feel like we're able to focus on our mission, you know, a little bit, tune
out the noise and just keep going. I mean, the thing you mentioned from the White House Press secretary, I mean it made me smile, right in a sense. It's kind of you know, a smile and just keep going. Because right as you said it was she says something like CBO employees haven't donated to Republicans. That was that was it? Since two thousand of course, Well I'm the director now. In twenty fourteen, a friend of mine was running for governor of California as a Republican, and I donated to him.
Now it was any work for President George deb and I worked.
For President Bush, and so you know, again I understand as part of the political process is not personal. It really did just make me smile, make me laugh, and That's just the way to kind of respond to it. That's the way I respond to it. Was just just to keep going and not to let it worry me.
And your staff was their respond.
It's you know, it's harder in a sense because it can feel personal to people. You know, our staff are really dedicated. But again, I think people understand. My colleagues understand this is part of the process and just to tune it out.
You're an economist who's supported economic policy makers during the W. Bush era? Do you support Trump's economic policy agenda?
I look at legislation and I just think about what does it do and what does it cost, and not is this a good idea or a bad idea, because we at CBO just do not think about that, and for us to support the Congress, it's really important for us not to think about that. And in sometimes if I do my job right, members won't know if I think their legislation is good or bad. And I think
I've done a pretty good job of that. And yeah, I'm smiling because there have been instances when members have tried to kind of suss out what I think of their bill, and I have been frustrated just because I say look, I'm sorry, I just I can't tell you. It's just part of the job, and you Eventually they're satisfied with that.
That was Phil Swagel, director of the Congressional Budget Office, talking to us about the Trump Administration's One Big Beautiful Bill and criticism of the CBO's analysis. This is the Big Take from Bloomberg News. I'm Salia Mosen. To get more from The Big Take and unlimited access to all of Bloomberg dot com, subscribe today at Bloomberg dot com slash podcast offer. If you like this episode, make sure to follow and review The Big Take wherever you listen
to podcasts. It helps people find the show. Thanks for listening. We'll be back tomorrow.