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CBO director: reconciliation changes, tariff policy and demographic trends will raise uninsured and weigh on growth
Summary
CBO Director Phil Swagel told the House Budget Committee that the 2025 Reconciliation Act would raise the number of uninsured Americans by millions, tariffs increase prices and reduce GDP over time, and long‑term debt trajectories are unsustainable; CBO will publish a February update with 10‑year impacts.
Congressional Budget Office Director Phil Swagel told the House Budget Committee that CBO's analysis of recent legislation and policy shows large near‑term and long‑term fiscal and coverage consequences.
On coverage, Swagel said CBO projects the Medicaid-related provisions in the 2025 Reconciliation Act would increase the number of uninsured Americans by about 7.8 million. He also said expiration of the enhanced Affordable Care Act premium tax credits would raise the uninsured by about 4 million — together producing a sizable rise in the uninsured population over the coming years. "Our estimate was that the reconciliation bill will increase the number of uninsured through Medicaid by 7,800,000," Swagel said; he added that the expiration of enhanced PTCs "would be about another 4,000,000." Committee members echoed concern about hospital and state budget impacts.
On fiscal effects, members and Swagel discussed CBO's estimate that the reconciliation package would add roughly $3.4 trillion to deficits over ten years (about $4.1 trillion including debt service, as described in testimony). Swagel said CBO will report a full 10‑year budget and economic outlook in February that will include effects of the reconciliation legislation, tariff changes and immigration assumptions.
On tariffs, Swagel told members that tariffs act like a tax on imports and "raise prices for families and businesses," reduce business investment and lower productivity, and therefore slow economic growth over time. He said CBO is updating its tariff analysis to incorporate recent tariff changes and will publish the tariff model publicly.
Swagel also discussed the debt outlook: CBO projects debt held by the public at just over $30 trillion at the end of the year in its January projection and said gross debt (which includes intragovernmental obligations) is larger. He described the long‑term trajectory as unsustainable but said CBO cannot predict precisely when a fiscal shock might occur.
Swagel emphasized CBO's practice of documenting uncertainty in cost estimates and revisiting estimates when new evidence emerges; he cited a recent instance where CBO revised an orphan‑drug provision after outside academics flagged an omission.
Next steps: Swagel said CBO will publish a detailed February update that includes a 10‑year assessment of the reconciliation act, tariffs, immigration assumptions and other recent policy changes. He also said several longer reports (on opioids, hepatitis C, and budget options) are forthcoming.
