July baseline to fully adopt the One Big Beautiful Bill

The July baseline forecast will fully adopt the Republican tax-and-spending bill, which is poised to become law by the July 4 deadline. Moreover, we will assume that future lawmakers make certain tax cuts and spending increases of the legislation permanent.

• By embracing all of the bill, the July forecast will incorporate more individual income tax cuts and more spending reductions on the social safety net and climate priorities than anticipated.
• All told, the Republican fiscal package will lead us to revise our growth and deficit forecast higher in the near term, but lower these projections in the long run.
• After this week, the focus shifts from fiscal to trade policy, and the likely passage of the bill has implications for the looming July 9 tariff deadline.