This projection assumes that the provisions of the 2017 Tax Cuts and Jobs Act that are set to expire at the end of 2025 are extended. Without this assumption, the FIM would be more negative in 2026. This projection does not reflect any other changes in legislation, nor does it reflect the impact of President Trump’s executive orders.” Hutchins said.

“The FIM tracks the influence of fiscal policy on GDP growth rates. It measures the direct impacts of fiscal policy on demand (including both discretionary fiscal policy and automatic stabilizers) and also includes our estimates of the supply-side effects of the Inflation Reduction Act and CHIPS and Science Act. It doesn’t include fiscal multipliers. For an analysis that includes multipliers, as well as a more detailed breakdown of the components of the FIM, read our explainer on how pandemic-era fiscal policy affects the level of GDP, which includes a comparison of actual GDP with our estimate of what GDP might have been had fiscal policy failed to respond to the pandemic,” Hutchins said.