Hassett: CBO's 1.8% growth score is very conservative

Hassett: CBO's 1.8% growth score is very conservative

WASHINGTON, May 21, 2025 - The Congressional Budget Office (CBO) has released a detailed analysis of the One Big Beautiful Bill Act, highlighting its potential economic impacts on different income groups. The CBO's findings suggest that the legislation would significantly reduce economic resources for the poorest Americans while increasing them for the wealthiest.

The CBO estimates that by 2027, the legislation would decrease household resources for the lowest-income households by 2%, and by 2033, this reduction would increase to 4%. Conversely, resources for households in the highest income decile would increase by 4% in 2027 and 2% in 2033. These changes are primarily due to cuts to health and nutrition programs, as well as reductions in taxes owed by wealthier Americans [1].

The legislation aims to fund $3.8 trillion in tax cuts, mainly benefiting higher-income individuals, through cuts to Medicaid and the Supplemental Nutrition Assistance Program (SNAP). The CBO estimates that this could result in a reduction of Medicaid enrollment by over 7 million people, including through increased eligibility checks and limits on benefits for unemployed individuals [1].

The analysis comes as Democrats have been criticizing the bill for its economic impacts, arguing that it benefits the wealthy at the expense of the poor and middle class. House Speaker Mike Johnson (R-La.) has faced challenges in balancing the demands of conservative Republicans who want steeper Medicaid cuts with moderate Democrats seeking bigger tax benefits for wealthy homeowners in their districts [1].

Despite these challenges, the bill is set to undergo a key House committee vote in the early hours of Wednesday, ahead of a possible final vote later this week. However, it remains uncertain whether enough Republicans will support the bill to pass it with all Democrats opposed [1].

Separately, CAVA Group, Inc. (NYSE:CAVA) has seen an increase in its stock price forecast by a securities analyst. Sara Senatore of BofA Securities raised her price forecast for CAVA from $112 to $121 while maintaining a Buy rating. The increase was driven by the company's strong first-quarter revenue growth of 28.2% year-over-year, which beat analyst estimates. CAVA's first-quarter adjusted EPS also exceeded expectations, with the company expecting full-year same-restaurant sales (SSS) growth to be between 6% and 8% [2].

References:
[1] https://www.yahoo.com/news/economic-analysis-shows-big-beautiful-033352297.html
[2] https://finance.yahoo.com/news/cavas-traffic-driven-growth-price-171237802.html