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The administration and Congress have suggested adding new sources of revenue through various types of taxation of wealth.
While investing in a college education has undeniable, lifelong economic benefits, excessive levels of student debt can impose hefty financial burdens on borrowers.
Last week, President Biden outlined the details of the American Families Plan (AFP), a $1.8 trillion package including major new investments in education, childcare, healthcare, and family leave.
Economists don’t always agree — but there is a wide consensus developing that the United States is in store for rapid economic growth.
“Voters are clearly enthusiastic that lawmakers are finding ways to pay for their priorities rather than add more to the national debt,” said Michael A. Peterson, CEO of the Peterson Foundation.
Beginning in mid-March 2020, the Federal Reserve initiated an aggressive policy of quantitative easing — which involves the purchase of government securities, corporate bonds, and other financial instruments — with the aim of keeping interest rates low and injecting cash into the economy.
The continued economic recovery and reopening of businesses has been fueled by COVID relief programs and an accelerating vaccination effort.
The coronavirus (COVID-19) pandemic has caused federal spending on Medicaid to rise sharply as millions of Americans seek benefits under the program.
“The Biden Administration has put forward thoughtful proposals aimed at creating jobs for working- and middle-class families, increasing our global competitiveness, and addressing important national priorities like infrastructure, climate change, and racial equity," said Michael A. Peterson, CEO of the Peter G. Peterson Foundation.
Compared to historical trends and other advanced economies, corporate tax revenues in the United States are very low.
Despite the consensus among economists that some amount of inflation is likely to occur in the near term, their level of concern varies.
Even before the COVID-19 pandemic, 1 in 7 children were classified as being in poverty.
The outbreak of COVID-19 has been both a public health and an economic crisis. In particular, the closure of many businesses has resulted in an unprecedented surge in unemployment claims in the United States.
Generally, states with larger populations have been receiving more federal dollars from COVID-19 relief programs as such states typically have more unemployed persons, small businesses, and healthcare providers to which that relief has been targeted.
One key component of the $1.9 trillion package is an estimated $362 billion in federal aid to state, local, territorial, and tribal governments to cover expenditures incurred due to the public health emergency.
Here’s an overview of inflation, why it matters, and how it’s managed.
SNAP is the largest federal program aimed at combating hunger and food insecurity among low-income Americans.
The child tax credit (CTC) is a measure administered though the tax code that is designed to make raising children more affordable by easing the financial burden faced by families.
The earned income tax credit (EITC) is a measure administered through the tax code to address poverty. It was first enacted in 1975 on a temporary basis amid broader debates about welfare reform and had the primary goal of encouraging people to obtain employment.
Most working Americans are subject to payroll taxes, which are usually deducted automatically from an employee’s paycheck. Employers are also often subject to these types of taxes.
On March 31, 2021, President Biden released details for a proposed American Jobs Plan — a nearly $2.7 trillion package aimed at addressing a range of issues, including transportation and other infrastructure, climate change, caregiving, and housing.
Cracking down on the tax gap would not only introduce more fairness into the system, but it could be a big help for our nation’s fiscal imbalance — to the tune of hundreds of billions of dollars every year.
The fairness of our federal tax system is a hotly debated issue. Too often, however, those debates confuse or misrepresent important facts because they focus on one type of tax in isolation rather than the various taxes that people face in aggregate.
America’s small businesses have been severely impacted by the economic downturn caused by the pandemic — and lawmakers have focused a significant part of federal relief on helping this critical part of our economy.
There were 916,000 jobs added in March, which suggests that the labor market recovery is accelerating. However, the unemployment rate remains high, especially for non-white workers.
New $1 million research initiative will help inform and improve pandemic relief and recovery policies.
The number of individuals experiencing long-term unemployment (lasting 27 weeks or longer) has quadrupled during the coronavirus (COVID-19) pandemic.
“Voters understand that we are continuing to endure a terrible public health and economic crisis, but they also realize that we are piling on trillions of debt to what was already an unsustainable fiscal outlook,” said Michael A. Peterson, CEO of the Peterson Foundation.
Since April 2020, the federal government has spent an average of $9 billion per month on SNAP — 71 percent higher than the amount spent in March 2020 (before the pandemic was widely recognized).
The decline in purchasing power has important implications for the federal budget and our nation’s infrastructure, and has led some to call for a new effort to address the gas tax.
Three sets of stimulus checks have been issued to eligible recipients as part of the pandemic relief. Each set of payments have been slightly different.
The coronavirus pandemic has caused a severe public health crisis as well as substantial economic disruption for every American. So far, lawmakers have enacted five separate pieces of legislation.
Here's a breakdown of the major programs in the American Rescue Plan and how much they cost.
The report highlights the structural misalignment in the country’s budget and the resulting unsustainable fiscal trajectory.
“Today’s report provides a troubling snapshot of America’s fiscal outlook, which we know will only get worse from here,” said Michael A. Peterson, CEO of the Peter G. Peterson Foundation.
Although the debt affects each of us, it may be difficult to put such a large number into perspective and fully understand its implications.
Setting a higher minimum wage would affect family incomes in a variety of ways, including increasing earnings for most low-wage workers and lifting some families out of poverty.
“As overcoming this pandemic continues to be a top priority, voters are also becoming more concerned about America’s rapidly worsening fiscal condition,” said Michael A. Peterson, CEO of the Peterson Foundation.
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.
After a promising decline in recent years, the number of Americans without health insurance is back on the rise.
The primary deficit focuses on the difference between government revenues and spending, excluding interest payments. Learn more about the U.S. primary deficit.
The debt growing to double the size of GDP is, in many respects, a symbolic milestone — but it is a clear indicator of the monumentally unsustainable path of our fiscal trajectory.
The CBO released new baseline projections today, which show that the nation will face daunting fiscal challenges over the next decade resulting from the existing structural mismatch between revenues and outlays as well as the enormous amount of borrowing necessary to address the pandemic and its economic effects.
“This new report provides the latest evidence that our fiscal condition has worsened significantly since the pandemic began, and will need to be addressed once we’re through the COVID crisis,” said Michael A. Peterson, CEO of the Peter G. Peterson Foundation.
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.
As of January 29, 2021, the Department of the Treasury has disbursed over $34 billion of the total $48 billion allocated to air carriers through the PSP1 and PSP2.
As lawmakers continue to explore policies to help the nation recover from the economic damage caused by the pandemic, a key part of the discussion is how stimulus checks should be structured and targeted for maximum effectiveness. Looking at recent spending and saving trends offers some clues.
The economic recovery is expected to continue and gross domestic product (GDP) will return to its pre-pandemic level by the middle of this year, according to the latest data from the Congressional Budget Office (CBO).
Reconciliation provides for expedited consideration of certain legislation; its use is particularly important in the Senate because it limits the time allowed for debate and prevents the inclusion of non-budgetary provisions.
As the nation continues to battle the devastating effects of the pandemic, new data from the Bureau of Economic Analysis (BEA) shows a sharp drop in the rate of economic growth at the end of last year, while the nation’s economy overall remains significantly below pre-pandemic levels.
One key part of the CARES Act was the Coronavirus Relief Fund, which provided $150 billion in direct federal fiscal support to governments in states, territories, and tribal areas to cover expenditures incurred due to the COVID-19 public health emergency.
“With the nation still in the grips of a devastating public health and economic crisis, President Biden and the new Congress are right to explore additional relief and recovery legislation, but it’s also critical that we remain mindful of our long-term fiscal outlook, which has gotten far worse as our debt now exceeds the size of our economy,” said Michael A. Peterson, CEO of the Peterson Foundation.
As the United States borrows a significant amount of money to respond to the COVID-19 pandemic, let’s take a closer look at a few key characteristics of Treasury borrowing that can affect its budgetary cost.
This budget explainer describes what Medicaid is, how it is financed, and who benefits from it.
Putting our economy on a path to recovery continue to be the most pressing priorities for our nation. At the same time, our fiscal outlook has worsened considerably.
The United States spent $686 billion on national defense during fiscal year (FY) 2019 according to the Office of Management and Budget, which amounts to 15 percent of the federal budget.
“The nation remains in the grips of a devastating health and economic crisis caused by the pandemic. Overcoming the virus remains the nation’s top priority, but the vast majority of Americans also recognize the need to address our unsustainable fiscal outlook once this crisis is over,” said Michael A. Peterson, CEO of the Peterson Foundation.