The House of Representatives passed its version of the Fiscal Year 2025 Budget Resolution earlier this week. And through increased spending and forgone revenue, the budget resolution sets the stage for reconciliation, adding trillions of dollars to our nation’s already unsustainable debt.

This is just the beginning of the process. Senate Republicans have already stated that they will take up the “one beautiful bill” but are planning to amend it to reflect their priorities. Which will likely make the package more costly for taxpayers.

But there’s a wonky debate going on that could make the real world price of the package much higher than the cost as advertised in committee press releases: scoring the package under current policy instead of the typical current law.

Let’s break it down.

The budget scorekeeper for federal spending is the Congressional Budget Office (CBO). Their budget baseline is a critical benchmark used to measure the fiscal impact of legislative proposals. But in reality one thing will always be true: less revenue and more spending will drive up our debt regardless of the baseline used.

Current Law vs. Current Policy: What’s the Difference?

The CBO’s official baseline is often described as a “current law” baseline, meaning it projects revenues and spending based on laws currently on the books. For example, if a tax provision or spending program has an expiration date, the current law baseline assumes it ends as scheduled. This approach reflects a strict interpretation of existing statutes and avoids speculative assumptions about future policy changes by future Congresses.

On the other hand, a “current policy” baseline assumes that existing policies—whether temporary or permanent—will continue indefinitely. For instance, if Congress has a history of routinely extending certain tax cuts or spending programs, a current policy baseline would bake those extensions into its projections, assuming they will happen again, and again, in the future. Advocates argue this approach better reflects political realities.

The Hybrid Reality

In practice, the CBO’s official baseline isn’t purely current law or current policy—it’s a hybrid that follows policies set in the Congressional Budget Act of 1974 and the Gramm-Rudman-Hollings Act from the mid-1980s. While tax provisions follow current law assumptions, discretionary spending is adjusted for inflation and certain mandatory programs are assumed to continue even if their funding mechanisms are set to expire. Lawmakers know the rules and can sometimes game the system to make legislation appear less costly.

For example, the 2017 Tax Cuts and Jobs Act (TCJA) made most of the corporate tax cuts permanent, but scheduled most of the individual tax cuts to expire at the end of 2025, two years before the end of the CBO’s ten-year budget window. That made the budget score appear to have less of a deficit impact. Now, under current law estimates, extending these policies beyond 2025 would increase the deficit nearly $5 trillion over ten years. If lawmakers were able to use a current policy baseline that assumes these tax cuts are extended, this same action would register, for scorekeeping purposes, as having no cost at all.

The choice of baseline can profoundly shape how legislation is scored—and ultimately how lawmakers and taxpayers perceive fiscal policy. A hybrid approach often assumes that entitlement programs like Social Security will make full benefit payments even if their trust funds are insolvent under current law, creating an illusion of fiscal stability while masking difficult tradeoffs.

A true current law baseline would provide an objective snapshot of fiscal realities without speculative assumptions about future actions, but would be open to gamesmanship as outlined above. On the other hand, a current policy baseline risks introducing subjective judgments that could bias fiscal projections, influencing budget debates in ways that may not fully reflect underlying fiscal challenges or be accurate. For instance, when the 2001 tax cuts were about to expire, some were modified to be less costly. A current policy baseline would have allowed all the provisions to be extended with a greater deficit impact.

Taking advantage of current law to artificially reduce the deficit impact of the TCJA, then shifting to current policy to extend them, would be a cynical ploy to dupe taxpayers about the price tag.

Debt Dynamics: The Ugly Bottom Line

Regardless of whether policymakers use a current law baseline to mask the deficit impact or current policy baseline, the math remains the same: less revenue plus more spending equals higher debt. If Congress permanently extends the TCJA tax cuts, it must offset nearly $5 trillion in lost revenue over the next decade with equivalent spending cuts—or add to the debt.

Eliminating every dime of annual discretionary spending (defense and non-defense) wouldn’t account for even half of that amount. So, achieving such savings would require significant reductions across both mandatory and discretionary spending, regardless of CBO’s scoring method. This likely means cuts to major entitlement programs like Medicare, Medicaid, and Social Security. Congress would also need to reevaluate other areas of the federal budget, including defense and homeland security (something they should be doing anyway).

The total federal debt already exceeds 120% of GDP and is projected to climb significantly even under current law assumptions. Total debt when the TCJA was enacted was $20 trillion, now less than a decade later it is more than $36 trillion. Extending expiring tax cuts without including offsetting revenue increases or spending reductions will only worsen our budget trajectory. The real issue isn’t which baseline we use—it’s whether lawmakers are willing to confront the unsustainable imbalance between revenues and expenditures.