Lawmakers have announced a negotiated package of business and individual tax breaks costing about $680 billion over ten years. After interest, we project the cost at about $830 billion over ten years. The package is split between two bills, one extending most of the tax breaks, and the omnibus bill providing discretionary spending for the rest of the fiscal year.

The deal largely focuses on reviving tax breaks that expired at the end of 2014, making some permanent and extending others for either two or five years. However, it also permanently extends three refundable tax credit expansions that would have expired in 2017, originally enacted in the 2009 stimulus bill. The bill also pauses or delays three taxes from the Affordable Care Act, opening the door to further delays or possible repeal of the taxes, undermining the health care law's deficit-reduction and cost-control efforts. Specifically, it would pause the medical device tax for 2016 and 2017, pause the health insurance tax for 2017, and delay implementation of the so-called "Cadillac tax" for two years while subsequently making the tax deductible against a company's corporate income tax (and tasking a study of how the tax's thresholds are indexed). If these three taxes are subsequently repealed, it would cost a combined $257 billion over ten years:

The major provisions, as estimated by the Joint Committee on Taxation, are listed in the table.

Policy Ten-Year Cost (billions) Permanent Extensions Research and experimentation tax credit $113 Increased levels of small business expensing (Section 179) $77 Allow taxpayers to deduct sales taxes in lieu of state & local income taxes $42 Lower refundability threshold for the Child Tax Credit so low-income families can get a larger refundable credit $88 Extend American Opportunity Tax Credit for undergraduate tuition $80 Expand the Earned Income Tax Credit to remove the marriage penalty and provide a larger credit for families with three children $30 Active Financing Exception allowing multinational financial companies to defer tax $78 Special 15-year depreciation schedule for restaurant and retail buildings $20 Allow seniors to make tax-free donations from Individual Retirement Accounts (IRAs) $9 Other provisions made permanent ~$25 5-Year Extensions (until 2019) Extend 50% Bonus Depreciation, reducing it to 30% by 2019 $28 Allow multinationals to transfer money between overseas subsidiaries without paying tax $8 Work Opportunity Tax Credit $9 New Markets Tax Credit $3 Phase out renewable energy credits and other energy provisions $26 Other provisions 2-year extension of all other tax extenders (would expire at the end of 2016) ~$20 Delay the "Cadillac Tax" on high-value employer-provided health plans for two years, from 2018 to 2020 $16 Make Cadillac tax penalties deductible against the corporate income tax $4 Pause the health insurance tax for 2017 $12 Pause the medical device tax for 2016 and 2017 $4 Program integrity for refundable credits and other provisions saves $7 Total ~$680 billion Total, With Interest ~$830 billion

Source: Joint Committee on Taxation estimates for the omnibus and tax extenders bills.

Because the bills do not include offsets to cover the cost, the $680 billion cost will grow to $830 billion when interest costs from the deficit-financed bills are included.

Over the past several weeks, we have written in the hypothetical about this deal as it was negotiated, referring to a $700 billion package. Now that we know that it is actually a little less, we will be updating these graphics.

Update 12/16: We have updated this blog with official estimates about 12 hours after publication..

Further Reading (written about a hypothetical $700 billion deal):