MYTHBUSTER: The One Big Beautiful Bill Cuts Spending, Deficit — and That’s a Fact

6/4/2025

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Action Summary

Fiscal Improvement Claim: President Trump’s One Big Beautiful Bill is presented as a transformative piece of legislation that dramatically improves the U.S. fiscal trajectory and spurs unprecedented economic growth.
Mandatory Savings Achievement: Delivers nearly $1.7 trillion in mandatory savings, the highest level in history, which are permanent changes to the law and compare favorably with past reconciliation bills.
Reconciliation Bill Limitation: As a reconciliation bill rather than an appropriations bill, it does not address spending reductions for the vast majority (99%) of government operations, which must be tackled in future legislation.
Deficit Reduction Clarification: Counters claims of deficit increases, asserting that forecasts of higher deficits are based on erroneous assumptions about the expiration of the 2017 tax cuts; maintaining current tax rates prevents additional deficit impact.
Offsetting Expenditures: Although there are one-time expenditures on border security and additional tax cuts (e.g., removing tax on tips and overtime), the net deficit reduction is calculated at exactly $1.407 trillion.
Further Deficit Reduction Measures: Combined actions including increased tariff revenues, discretionary spending cuts, and the reversal of Biden-era regulations are projected to reduce the deficit by at least $6.6 trillion over the next decade.

Risks & Considerations

The One Big Beautiful Bill’s focus on mandatory savings and deficit reduction could lead to significant changes in federal funding allocations, potentially impacting programs that rely on government support, including education and research initiatives.
While the bill claims to reduce the deficit, the reliance on extending current tax rates and increased tariffs may introduce economic uncertainties that could affect funding stability for institutions like Vanderbilt University.
The bill’s emphasis on border security and tax cuts could shift federal priorities away from education and research funding, necessitating strategic adjustments by Vanderbilt to secure alternative funding sources.
Vanderbilt University may need to closely monitor the implementation of this bill to assess its impact on federal grants and research funding, particularly in areas related to education and public policy.

Impacted Programs

Vanderbilt’s Financial Aid Office might need to reassess its strategies in response to potential changes in federal funding for student aid programs, ensuring continued support for students.
The Office of Research may face challenges in securing federal grants if funding priorities shift, necessitating a focus on diversifying funding sources and exploring private grants.
Peabody College of Education and Human Development could be affected by changes in federal education funding, requiring adjustments in research and program development to align with new priorities.
The Office of Community Engagement may need to adapt its initiatives to address potential impacts on local communities resulting from shifts in federal funding and policy priorities.

Financial Impact

The bill’s focus on deficit reduction and mandatory savings could lead to reduced federal funding for education and research, impacting Vanderbilt’s financial planning and resource allocation.
Vanderbilt University may need to explore alternative funding sources, such as private grants and partnerships, to mitigate potential reductions in federal support.
Changes in tax policies and tariffs could have broader economic implications, potentially affecting the university’s financial stability and long-term planning.
Vanderbilt’s ability to attract and retain top talent may be influenced by changes in federal funding and policy priorities, necessitating strategic adjustments in recruitment and retention efforts.

Relevance Score: 4 (The bill presents a need for potential major changes or transformations of programs and funding strategies.)

Key Actions

Vanderbilt’s Financial Planning Office should assess the potential impact of the One Big Beautiful Bill on federal funding for education and research. Understanding the long-term fiscal changes and savings could help in strategizing future budget allocations and identifying areas where funding might be reduced.
The Office of Federal Relations should closely monitor the implementation of the bill, particularly the aspects related to discretionary spending cuts and border security spending. This will be crucial in anticipating any shifts in federal priorities that could affect university funding and operations.
Vanderbilt’s Research Departments should explore opportunities to align with national priorities that may arise from the bill’s focus on economic growth and deficit reduction. This could include seeking grants or partnerships that support research in areas like economic policy, fiscal management, and regulatory impacts.
The Department of Economics should conduct research on the broader economic implications of the bill, including its impact on tariffs, tax policies, and deficit reduction. Sharing these insights with policymakers and the public can enhance Vanderbilt’s role as a thought leader in economic policy.
Vanderbilt’s Community Engagement Office should consider hosting forums or discussions on the implications of the bill for local and national economies. Engaging with the community on these topics can strengthen Vanderbilt’s position as a hub for informed discourse on economic policy.

Opportunities

The bill presents an opportunity for Vanderbilt’s Business School to expand its research and teaching on fiscal policy and economic growth. By leveraging its expertise, the school can contribute to the national conversation on effective economic strategies and policy implementation.
Vanderbilt can capitalize on the increased focus on economic growth by developing new programs and partnerships with industries affected by the bill’s provisions. This could include joint research initiatives, student internships, and collaborative projects that enhance Vanderbilt’s reputation and reach in the economic sector.
The emphasis on deficit reduction offers an opportunity for Vanderbilt’s Public Policy Center to engage in policy analysis and advocacy. By providing evidence-based recommendations, the center can influence how fiscal policies are shaped and implemented to support sustainable economic growth.
The bill’s focus on reversing regulations aligns with Vanderbilt’s commitment to innovation and entrepreneurship. The university can develop targeted programs to support startups and businesses navigating the changing regulatory landscape, enhancing their success and impact.
By engaging with the broader economic community and policymakers, Vanderbilt can position itself as a leader in the national conversation on fiscal policy and economic reform. Hosting conferences, workshops, and public forums on the implications of the bill can further establish Vanderbilt as a hub for innovative economic thought and practice.

Relevance Score: 4 (The bill presents the potential for major process changes required for Vanderbilt’s programs due to fiscal impacts and opportunities for economic growth.)

Average Relevance Score: 2.4

Timeline for Implementation

N/A: The text does not provide specific directives or deadlines for implementation; it only discusses fiscal outcomes upon enactment and ongoing impacts over the next decade.

Relevance Score: 1

Impacted Government Organizations

Congressional Budget Office (CBO): Referenced for its forecasts and admissions regarding the deficit impact, highlighting its role in federal fiscal analysis.
Department of the Treasury: Implicated through the discussion of tax policy maintenance (extending current tax rates and tax exemptions on tips and overtime) and the management of tariff revenues.
Internal Revenue Service (IRS): Affected by the legislative changes to tax policy, including modifications to how tips and overtime income are taxed.
U.S. Customs and Border Protection (within the Department of Homeland Security): Impacted indirectly via additional spending for border security measures.
Office of the United States Trade Representative (USTR): Plays a role in tariff policy administration, as increased tariff revenues are a component of the bill’s fiscal impact.

Relevance Score: 2 (Between 3-5 Federal agencies are directly impacted by the provisions referenced in the document.)

Responsible Officials

N/A – The text primarily discusses fiscal outcomes and partisan arguments without assigning implementation tasks to specific officials or agencies.

Relevance Score: 1 (The directives do not designate any implementation responsibility to specific officials.)