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Proposer: Senate Budget Committee

The Macroeconomic Effects of the August 2021 Senate Budget Reconciliation Package

Drafting a budget from the August 2021 Senate reconciliation framework that satisfies the Senate rules of reconciliation (“Byrd Rule”) will require a decrease in new outlays or a large increase in revenues (or both) after the standard 10-year budget window. One such potential reduction in spending would allow the new non-healthcare related discretionary spending provisions to expire after 2031. With this reduced spending in 2031, we project that the reconciliation package will decrease GDP by 4.0 percent in 2050. Without this spending decrease (and where the Byrd Rule is not satisfied), we project a 4.8 percent fall in GDP in 2050. For more information, please see our full analysis.