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INDUSTRY RISKS OF THE BIG BEAUTIFUL BILL There’s been a lot of buzz around the recently passed “Big Beautiful Bill” (BBB), and short-term, most of that excitement is warranted. The legislation delivers some big and immediate wins for real estate investors: bringing back 100% bonus depreciation, making the Qualified Business Income (QBI) deduction permanent, expanding Opportunity Zones, and lots more. But while it’s easy for us as real estate investors to get caught up in the euphoria of short-term tax breaks, we’d be doing ourselves a disservice by ignoring the potential long-term consequences of the bill. Here’s the simple fact that too many of us want to ignore: the BBB substantially increases the federal deficit and debt. Enough that it may very well lead to a structural economic shift that could ripple through the economy and hit real estate investors in very real – and very negative – ways.
LET’S START WITH SOME CONTEXT ON THE SIZE OF THE IMPACT… The Congressional Budget Office (CBO) projects that the BBB will increase deficits by $3.4 trillion over the next decade. But that’s just the starting point. Once you factor in the cost of additional
the same. The Cato Institute suggests it could be even higher – potentially closer to $6 trillion – particularly if interest rates rise faster than expected or temporary provisions get extended. Yale’s Budget Lab goes even further, forecasting that the bill could push the long-run federal deficit as a share of GDP up by nearly three percentage points. That’s not just a rounding error; that’s a macroeconomic drag that could last decades.
interest payments on this new debt, the real number climbs above $4 trillion. And other well- respected think-tanks agree. The Committee for a Responsible Federal Budget (CRFB) estimates the total price tag at about
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