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The federal government spent $90 billion on housing assistance in 2021, an increase of almost 70 percent from the preceding year, largely due to legislation enacted in response to the coronavirus (COVID-19) pandemic.
The legislative response to COVID-19 has been an essential part of supporting Americans and the economy through the crisis. However, states are now navigating how to avoid a budget shortfall (sometimes referred to as a “fiscal cliff”) once federal aid wanes.
National security is both a vital priority and a significant part of the federal budget.
The growing cost of prescription drugs presents a significant challenge to the quality and affordability of healthcare in the United States.
Higher short- and long-term Treasury rates mean that the federal government’s borrowing costs will also rise, thereby generating significant consequences for the budget and the national debt.
The primary deficit focuses on the difference between government revenues and spending, excluding interest payments. Learn more about the U.S. primary deficit.
At the end of May, the nonpartisan Congressional Budget Office (CBO) released new projections of the nation’s fiscal and economic outlook, their first report since July 2021.
Unlike the federal government, which currently records $30 trillion in debt, most state governments have balanced budget requirements (BBRs) for their operating budgets which only permit borrowing for certain capital projects.
Programs that millions of Americans depend on and care about may be feeling a squeeze from interest costs on our high and rising national debt.
New student debt affordability calculator empowers students as they pursue college and career goals.
Student debt is one of the biggest challenges young people will face as they prepare to enter adulthood, and is often their first encounter with debt.
The depletion dates for Social Security’s Old-Age and Survivors Insurance (OASI) Trust Fund and Medicare’s Hospital Insurance (HI) Trust Fund have been relatively well known for the past 20 years and are now rapidly approaching.
“The writing on the wall couldn’t be any more clear: Social Security and Medicare remain on a dangerously unsustainable path," said Michael A. Peterson, CEO of the Peter G. Peterson Foundation.
The Social Security and Medicare Trustees released their annual reports, which show that these vital programs are on an unsustainable path.
The Social Security Trustees note that the Old-Age and Survivors Insurance (OASI) Trust Fund is now expected to become depleted in 2034, compared to 2033 in last year’s report.
Skyrocketing student debt has generated significant discussion about ways to improve the financing of higher education in the United States.
U.S. defense spending increased substantially from 2020 to 2021 relative to other countries.
The United States spent $754 billion on national defense during fiscal year (FY) 2021 according to the Office of Management and Budget, which amounted to 11 percent of federal spending.
Driven by rising interest rates and the accumulation of federal debt, interest will nearly triple in the next 10 years and reach a historic high relative to the size of the economy by 2032.
“Six months from an important election, and as Americans face the challenges of high inflation, rising interest rates and economic uncertainty, it’s no surprise that voters are deeply concerned about our unsustainable national debt and budget outlook,” said Michael A. Peterson, CEO of the Peterson Foundation.
While this year’s deficit looks much better primarily due to the expiration of pandemic relief programs, CBO projects that the deficit will soon begin to climb again.
“The most important takeaway from today’s CBO report is that interest costs are higher, adding to an already unsustainable fiscal outlook," said Michael A. Peterson, CEO of the Peter G. Peterson Foundation.
The likelihood of a return to higher interest rates is “both reasonably likely at some point and potentially calamitous for the federal government and broader economy.”
Federal spending for international affairs, which supports American diplomacy and development aid, is a small portion of the U.S. budget.
Did you know that the federal government is the direct lender for nearly all student loans in the U.S., lending trillions of dollars to millions of borrowers to help increase access to higher education?
Improving our healthcare system to deliver better quality care at lower cost is critically important to our nation’s long-term economic and fiscal well-being.
President Biden, speaking from the White House today, highlighted deficit reduction as a key way to relieve inflationary pressure and put our nation on a more sustainable economic path.
The federal government finances its operations with taxes, fees, and other receipts collected from many different sectors of the economy. The largest sources of revenues are individual income taxes and payroll taxes.
In 2020, as the coronavirus (COVID-19) pandemic took hold, 28 million people — or 8.6 percent of the population — were uninsured.
Funding Will Support New Research to Analyze Economic Implications of COVID-19 Pandemic, Illuminate Solutions for Policymakers
“As we continue to face significant economic turbulence and uncertainty, fiscal confidence is near a record low, because voters know that our growing national debt makes it more difficult to build a strong and stable future,” said Michael A. Peterson, CEO of the Peterson Foundation.
Healthcare in the United States is very expensive — but we don’t get what we pay for.
Medicaid’s role in state budgets is unique, since the program acts as both an expenditure and the largest source of federal support in state budgets.
One issue that most lawmakers and voters agree on is that our tax system needs reform.
Some lawmakers favor substantial increases to marginal tax rates. Let’s look at how marginal tax rates and brackets work.
Here are the top ten spending categories for the federal budget.
In the coming years, it will be important for policymakers to look for ways to ensure that life-saving and life-improving medications are affordable and available for Americans, and at the same time, ease pressure on our unsustainable fiscal outlook.
“Rising interest rates mean rising interest costs, and Americans understand that’s a major problem for a country that’s $30 trillion in debt,” said Michael A. Peterson, CEO of the Peterson Foundation.
The benefits from tax breaks do not flow equally to households of different income levels.
In an important acknowledgement of our nation’s unsustainable fiscal outlook, the President’s budget for fiscal year 2023 proposes to reduce deficits by $1 trillion over the next decade relative to current law.
“This budget acknowledges the need for deficit reduction, and represents a positive step and starting point for action on stabilizing our national debt" said Michael A. Peterson, CEO of the Peter G. Peterson Foundation.
Tax expenditures can come in the form of exclusions, exemptions, deductions, and credits.
The statutory tax rate is the percentage imposed by law; the effective tax rate is the percentage of income actually paid by an individual or a company after taking into account tax breaks.
“Today’s Fed action is an important reminder that interest rates do not remain low forever, and have significant implications for our national debt," said Michael A. Peterson, CEO of the Peter G. Peterson Foundation.
A continuing resolution is a temporary funding measure that Congress can use to fund the federal government for a limited amount of time.
Today, the Federal Reserve announced an increase in the target for the federal funds rate, the interest rate at which commercial banks lend to each other overnight.
Here’s an overview of inflation, why it matters, and how it’s managed.
The federal government has enacted five pieces of legislation that provide relief to individuals and corporations that have been affected by the COVID-19 pandemic. To finance those provisions, the Treasury Department has ramped up its borrowing.
Since the coronavirus (COVID-19) pandemic began, the U.S. Federal Reserve has significantly ramped up its holdings of Treasury securities as part of a broader effort to counteract the economic impact of the public health emergency.
The percentage of income that Americans pay in taxes can vary widely and depend on many factors.
Currently, more Americans owe a greater average amount of student debt than at any time in U.S. history.
“Far too often, life-saving medications like insulin are unaffordable or unavailable, tragically burdening millions of Americans,” said Michael A. Peterson, CEO of the Peter G. Peterson Foundation, which established the Peterson Center on Healthcare.
Unemployment Insurance can be a critical government tool to ease suffering from economic downturns and hasten a recovery.
“Our economy is grappling with very high levels of inflation and probable interest rate hikes, all on the back of our runaway national debt which hit a staggering $30 trillion this month,” said Michael A. Peterson, CEO of the Peterson Foundation.
High healthcare spending is not necessarily a bad thing, especially if it leads to better health outcomes. However, that is not the case in the United States.
The American Rescue Plan included a one-year expansion of the Child Tax Credit (CTC) and the Earned Income Tax Credit (EITC). Both programs have proven to be popular and effective in reducing child poverty.
Our high and rising debt is “a big burden placed on current citizens, based on our past budgetary irresponsibility,” said Michael Peterson, CEO of the Peter G. Peterson Foundation, in a recent appearance on C-SPAN’s Washington Journal.
Spending on healthcare in the United States has far outpaced other major healthcare systems without yielding better outcomes.
As the national debt surpasses $30 trillion, voter confidence in America’s financial situation and budget outlook tied a 7-year low, according to the Peter G. Peterson Foundation’s newest monthly index.
Although the debt affects each of us, it may be difficult to put such a large number into perspective and fully understand its implications.
“Our high and rising debt makes us less prepared for the next pandemic, less secure against future adversaries, less resilient to the changing climate, and less able to build the strong," said Michael A. Peterson, CEO of the Peter G. Peterson Foundation.
The rise in healthcare spending was largely driven by the federal response to the COVID-19 pandemic.
The strong rebound in 2021 was partially due to the high economic growth experienced in the fourth quarter.
Interest costs on the national debt are expected to rapidly outstrip spending on children in coming years.
Here are some notable trends showing how lower levels of government have spent some of their relief funds.
Federal outlays for Unemployment Insurance are rapidly returning to previous levels. Nevertheless, unemployment remains higher than pre-pandemic levels.
In 2022, America faces key questions about rising inflation, new COVID variants, growing national debt and an uncertain economic recovery. To help shed light on a complex set of factors and indicators, the Peterson Foundation brought together two leading experts for the latest edition of the Economic Forum.
At the start of 2022 with a record $29 trillion in national debt, U.S. voters of all stripes are growing more concerned about America’s unsustainable federal budget outlook, according to the non-partisan Peter G. Peterson Foundation’s newest monthly index.
Although the costliest measures are anticipated to contribute the most to the economy, CBO found those measures are not necessarily expected to provide the most bang for the buck.