White House claims $6.7 trillion deficit cut under Trump’s One Big Beautiful Bill

On the morning of June 7, 2025, in Washington, D.C., the White House released a new internal memo outlining the projected fiscal impact of President Donald Trump‘s flagship budget legislation—the One Big Beautiful Bill (OBBB). Issued by the Office of Management and Budget (OMB), the memo states that the Trump administration’s total deficit reduction strategy could cut as much as $6.7 trillion to $6.9 trillion over the next decade, led by $1.7 trillion in permanent mandatory spending cuts included in the OBBB. The document was circulated among White House communications staff and reflects the administration’s strongest defense to date of its 2025 economic policy platform.

How does the OBBB compare to past deficit reduction legislation?

The OBBB is positioned by the Trump administration as the most significant deficit-cutting legislation in modern American history. According to the memo, the $1.7 trillion in permanent mandatory savings surpasses the inflation-adjusted impact of previous landmark budget laws such as the Balanced Budget Act of 1997, the Omnibus Budget Reconciliation Acts of 1993 and 1990, and the Deficit Reduction Act of 2005. Those earlier efforts ranged from $140 billion to $800 billion in inflation-adjusted savings, making the OBBB the highest-magnitude statutory reduction of its kind. White House officials describe these mandatory savings as structural and automatic, in contrast to discretionary measures subject to annual negotiation.

What’s in the Trump administration’s deficit math?

The Office of Management and Budget argues that traditional Congressional Budget Office (CBO) baselines are misleading because they assume that the 2017 Tax Cuts and Jobs Act (TCJA) will expire. The Trump administration considers this a political fiction and asserts that extending the TCJA is inevitable, meaning the $3.8 trillion in assumed revenue from its expiration should not be factored into deficit baselines. When adjusted for the continuation of TCJA and associated changes in debt servicing, the administration calculates a true fiscal baseline of $25.4 trillion in cumulative deficits from fiscal year 2025 to 2034. Within that framework, the OBBB delivers a net deficit reduction of $1.407 trillion.

According to the memo, these savings are primarily driven by $1.675 trillion in net mandatory spending cuts. These reductions are partially offset by $297 billion in new one-time expenditures for border security and defense, alongside $130 billion in new tax relief proposals such as the elimination of taxes on tips and overtime pay. Additional deficit improvement comes from $95 billion in enhanced non-tax revenue streams and $63 billion in lower debt service obligations due to improved fiscal balance. The overall reduction of $1.407 trillion is positioned as a foundational element of the administration’s broader fiscal realignment plan.

What other Trump-era policies contribute to the claimed $6.7 trillion cut?

The One Big Beautiful Bill is just one component of a wider strategy that the Trump administration claims will lead to nearly $7 trillion in deficit reduction over ten years. Among the other key policy elements outlined in the memo are a projected $2.8 trillion in increased tariff revenues through reciprocal trade enforcement, $1.55 trillion in discretionary spending reductions for fiscal years 2025 and 2026, and $759 billion in additional savings on federal debt servicing costs. Regulatory changes, particularly in Medicaid reimbursement models, Medicare drug pricing, and state-directed plan structures, are expected to contribute an additional $170 billion to $400 billion in savings.

When taken together, these measures bring the administration’s ten-year fiscal impact to between $6.691 trillion and $6.921 trillion. White House officials suggest this could increase further if macroeconomic growth exceeds Congressional Budget Office expectations, which the administration believes is likely under its policy regime.

What role does economic growth play in the projections?

The memo states that the Trump administration expects a higher level of real GDP growth than what is currently modeled by the CBO, driven by policy levers such as deregulation, energy sector liberalization, and a simplified tax code. Officials claim that a stronger economy would not only increase tax receipts but also reduce pressure on means-tested federal programs, amplifying the long-term impact of the deficit reduction measures. While these projections are not fully embedded in the official $6.7 trillion estimate, the memo hints at further upside from what it terms a “pro-growth agenda.”

The administration also points to historic underestimations of growth in past CBO forecasts and suggests that new baseline assumptions will eventually align more closely with the results of the Trump economic platform as implemented in 2025.

Why are the deficit reductions considered permanent?

One of the major distinctions highlighted in the memo is the permanence of the mandatory savings embedded in the One Big Beautiful Bill. Unlike discretionary budget cuts, which are subject to annual appropriations and shifting political priorities, these savings come from legal reforms that automatically reduce entitlement spending over time. These include adjustments to Medicaid reimbursement structures, Medicare Advantage plan funding models, and other capped entitlement expenditures. Unless overturned through a separate legislative process, these cuts are set to continue indefinitely.

In contrast, the border security and defense spending increases authorized by the bill are classified as one-time investments intended to secure the southern border and address what the administration calls an “invasion-level” threat to national security.

How are experts reacting to the claims?

While the administration’s memo reflects confidence in its fiscal assumptions, independent economists and budget policy analysts are expected to closely scrutinize the claims. Specific areas likely to receive attention include the assumed scale of tariff revenues, the reliability of projected regulatory savings, and the credibility of long-term debt service calculations. Historically, supply-side forecasts that rely on strong growth assumptions have been contested by nonpartisan institutions and watchdog groups. Critics may also question the impact of new tax cuts on federal revenue, especially in light of potential downward pressure on middle-class income taxes.

Organizations such as the Committee for a Responsible Federal Budget, Brookings Institution, and the Urban Institute are expected to release comparative analyses in the coming days, potentially highlighting discrepancies between White House projections and nonpartisan models.

What happens next in Congress?

Despite the OMB memo’s endorsement, the One Big Beautiful Bill faces political hurdles in both chambers of Congress. While Senate Republicans have expressed support for many elements of the bill, including the continuation of TCJA tax provisions, conservative House members are reportedly pushing for even deeper cuts to domestic discretionary spending. On the other side of the aisle, Democratic leaders have criticized the proposal for embedding permanent reductions in entitlement programs and for introducing new tax policies they argue disproportionately benefit high-income earners.

Bipartisan negotiations are expected to continue through the summer, and the final version of the bill may undergo substantial revisions before reaching a floor vote. However, the memo frames the OBBB as essential for meeting President Trump’s campaign promise to balance the federal budget by the end of his second term, stating that no realistic path to budgetary balance exists without its enactment.