Budget reconciliation + tariffs will leave deficit unchanged

With the House of Representatives today passing the Senate’s bigger version of the budget reconciliation, the Republicans appear to have met President Trump’s timeline – to have the bill reach his desk for signing by the July 4^th Independence Day holiday. The bill avoids any fiscal tightening by extending the original Trump tax cuts that were due to expire at year-end. But, after factoring in the additional revenues from new tariffs, it appears that the budget deficit will remain close to 6% of GDP for the next few years, suggesting that there is little additional fiscal stimulus.