The Congressional Budget Office (CBO) upped the ante on their estimate for fiscal deficit reduction last week, all due to higher tariffs that kicked into effect this month. Tariffs are offsetting tax cuts signed into law this summer in the One Big Beautiful Bill (OBBB).

The CBO raised its 10 year deficit reduction forecast by a trillion dollars to $4 trillion on Aug. 22. It was last forecast to be a $3 trillion reduction over 10 years back in June. This new update revises the June figures, estimating $3.3 trillion in primary deficit reduction and $700 billion in interest savings, for a combined total of about $4 trillion.

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