A $715 billion tax cut turns into a $4.5 trillion sales job

Tue, Aug 5, 2025, 12:02 PM 5 min read

Republicans minimized the size of their tax cuts when they pushed them through Congress, using a controversial accounting method to make most of them appear to cost the federal government nothing.

But now a new mantra is emerging from lawmakers: Their tax cuts were huge.

As they sell the package to voters, President Donald Trump and other Republicans are emphasizing how big the tax cuts are — often claiming, wrongly, that they are the largest in U.S. history.

Implicit in the shift: Republicans are embracing the conventional budgeting “baseline” they scorned during legislative debate because that now makes their tax cuts appear more impressive.

Under the so-called current policy baseline Republicans used in Congress, their plan was projected to cost $715 billion over a decade — peanuts, in the world of tax cuts and a mere raindrop in the country's $36.8 trillion debt.

But using a conventional yardstick means their tax cuts cost $4.5 trillion — not the largest ever, but sizable enough to at least be in the conversation.

That has Democrats crying foul, with Sen. Jeff Merkley of Oregon, the top Democrat on the Budget Committee, complaining Republicans’ boasts come after they used a “budget gimmick” to “claim that their massive tax giveaway to billionaires cost next to nothing.”

Some Republicans aren’t entirely comfortable with it either.

“I can’t control what other people say,” said Sen. Ron Johnson (R-Wisc.), a member of the tax-writing Finance Committee. He said he instead tells voters Republicans averted a $4 trillion tax increase that would have come if lawmakers hadn’t extended a slew of temporary tax cuts that were slated to expire at the end of this year.

It’s an ironic addendum to the long-running debate in Washington over Republicans using the current policy baseline to help pass their legislation, signed into law a little more than four weeks ago. And it comes as lawmakers now turn to selling their constituents on the package, which also includes controversial cuts in Medicaid and other programs.

Early polling shows the package is not popular, though most taxpayers won’t begin to benefit from the tax cuts until they file their returns next spring. Many are in line for extra-large refunds because Republicans made a number of provisions, including an enlarged Child Tax Credit and a more generous deduction for state and local taxes, retroactively available for the current tax year.

During congressional consideration, Senate Republicans were adamant that the correct way to tally the cost of their plan was by comparing the changes to what the government was currently doing, not what was carved into law, as budget scorekeepers normally do.