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The federal government has enacted four pieces of legislation that provide important relief to individuals and corporations that have been impacted by the COVID-19 pandemic.
Over the weekend President Trump signed executive actions related to unemployment insurance, payroll tax relief, student debt, and housing evictions.
After the unemployment rate shot up from 4.4 percent in March to 14.7 percent in April, it has subsequently dropped to 10.2 percent in July.
During the week that ended on August 1, 1.2 million people filed for regular unemployment insurance, continuing a devastating trend in the labor market. Since March 15, 55 million individuals have filed a claim.
To date, the Paycheck Protection Program (PPP) has disbursed over $500 billion in loans to 5 million businesses, making it the largest component of the U.S.’ legislative response to the coronavirus pandemic. But has it been effective?
The International Monetary Fund (IMF) estimates that real (inflation-adjusted) gross domestic product (GDP) in the United States will fall by 8 percent in 2020, according to the latest update to their World Economic Outlook report.
New economic growth statistics from the Bureau of Economic Analysis (BEA) confirm that the American economy continues to suffer historic damage during the coronavirus pandemic.
The federal government spent $51 billion on housing assistance in 2019, and more than 80 percent of that spending was for three programs in the Department of Housing and Urban Development that provide rental assistance to low-income households.
Medicare is an essential health insurance program serving millions of Americans, and a major part of the federal budget and our fiscal outlook.
“As lawmakers rightly continue to pursue policies that help our nation respond to the immediate health and economic crisis, voters are also showing increased concern about our deteriorating fiscal outlook,” said Michael A. Peterson, CEO of the Peterson Foundation.
“There’s nothing that matters more right now to our physical, fiscal and economic health than defeating this virus,” said Michael A. Peterson, CEO of the Peter G. 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.
Average income among households in the lowest fifth of the income distribution was $21,000, while income for households in the highest fifth averaged $291,000.
Social Security is the largest single program in the federal budget and makes up approximately one quarter of total federal spending.
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.
In June, the federal government spent $10.6 billion on SNAP — a 102 percent increase from the amount spent just three months before.
The outbreak of COVID-19 has become 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.
The coronavirus (COVID-19) pandemic has caused federal spending on Medicaid to rise sharply as millions of Americans seek benefits under the program.
The cost and quality of the U.S. healthcare system is one of the most prominent issues facing everyday Americans. It is a top policy concern for voters, a key indicator of economic efficiency, and a significant driver of the national debt.
The growing cost of prescription drugs presents a significant challenge to the quality and affordability of healthcare in the United States.
To date, policymakers have authorized an estimated $3.6 trillion in federal spending (the budgetary cost of which is only $2.4 trillion) to help counter the economic effects of the coronavirus (COVID-19) pandemic.
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.
The unemployment rate in June 2020 was 11.1 percent, which represents 18 million people unemployed out of a civilian labor force of 160 million individuals.
Overall, coronavirus relief legislation is expected to widen the gap between federal outlays and revenues — increasing federal deficits by $2.4 trillion over the next decade.
It’s going to take at least a decade for the labor market to recover from the coronavirus (COVID-19) pandemic, according to the latest data from the Congressional Budget Office (CBO).
The latest Financial Times-Peterson Foundation US Economic Monitor, released on July 7, 2020, reveals timely data about Americans’ deep concerns about the health and economic effects of the coronavirus (COVID-19) pandemic.
One issue that most lawmakers and voters agree on is that our tax system needs reform.
Without federal intervention, many services could be drastically reduced to meet balanced budget requirements.
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.
“America’s top policy priority right now is defeating this virus and helping the millions of Americans who are suffering economically, but as we look ahead it’s clear that Americans are growing more concerned about how we will deal with our national debt once this crisis ends.” said Michael A. Peterson, CEO of the Peterson Foundation.
The Social Security Board of Trustees has been warning for years that the program faces funding shortfalls. In April, they released their annual report on the trust funds that finance the program.
Federal trust funds bear little resemblance to their private-sector counterparts.
Properly addressing the nation’s aging infrastructure requires action not only at the federal level, but also at the state and local levels, where most infrastructure spending is carried out.
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.
As of June 9, 2020, the Treasury has disbursed about $18 billion of the total $32 billion allocated to the program.
As of June 9, 2020, the Treasury has disbursed roughly $147 billion, or about 98 percent, of the total $150 billion allocated in the Coronavirus Relief Fund.
Estate and gift taxes are levied on the transfer of assets. Two areas of the tax code that are relatively small in dollar terms, but can generate a significant amount of attention and even controversy in the broader conversation about wealth.
The economic disruption caused by the coronavirus pandemic and the federal government’s response to it has widened the gap between federal outlays and revenues.
Although the debt affects each of us, it may be difficult to put such a large number into perspective and fully understand its implications.
America’s economic rebound from the coronavirus pandemic seems to have begun, depending on location, according to Phillip Swagel, the director of the nonpartisan Congressional Budget Office.
The Internal Revenue Service (IRS) had issued 159 million direct payments to Americans — totaling nearly $267 billion — to help mitigate the financial burden of the COVID-19 pandemic.
New data from the Bureau of Labor Statistics show that the labor market experienced an unexpected improvement in May.
There are three widely used measures of federal debt. What are the important differences between these measurements?
The latest Financial Times-Peterson Foundation US Economic Monitor, released on June 4, 2020, reveals how the coronavirus pandemic continues to have significant financial and economic impacts across wide swaths of American society.
Mesa Community College designs winning campaign to engage Millennial and Gen Z students on the rising $25 trillion national debt.
“As this crisis continues, lawmakers are taking necessary action to confront the pandemic and help our nation recover. At the same time, voters are very concerned about our nation’s fiscal and economic future,” said Michael A. Peterson, CEO of the Peterson Foundation.
So far, federal measures to support small businesses have amounted to $760 billion.
Before the pandemic, the U.S. economy was in its longest expansion since World War II and had notably low unemployment. The pandemic and the resulting reductions in social and economic activity, however, have altered that trajectory.
COVID-19 has spread to nearly every country in the world, and to help reduce the health risk and save lives, many countries have imposed limitations on business activity, congregating, and traveling.
U.S. defense spending increased substantially from 2018 to 2019 relative to other countries.
A large decrease in revenues and a large increase in spending have led the Congressional Budget Office to estimate a deficit of $737 billion in April 2020.
In response to the COVID-19 pandemic, elected leaders have asked the American people to stay at home and have forced businesses to close to mitigate the spread of the virus.
The latest Financial Times-Peterson Foundation US Economic Monitor reveals that the coronavirus pandemic is financially impacting the vast majority of Americans, and there is broad-based support for federal response measures.
The decrease in GDP in the first quarter was driven by a decline in consumption and investment.
“While the most important national priority right now is addressing the significant health and economic impact caused by coronavirus, we all also understand that this crisis has enormous costs and impact on our fiscal position,” said Michael A. Peterson, CEO of the Peterson Foundation.
The new numbers demonstrate the severe economic damage and significant fiscal implications of this unprecedented crisis.
The recent outbreak of COVID-19 has caused a severe public health crisis as well as substantial economic disruption for every American.
Social Security and Medicare are facing serious financial difficulty in the near future.
The largest emergency response bill in history, the CARES Act allocates $2 trillion in emergency funding to provide relief to households, small and large businesses, states and municipalities, and healthcare providers, among others.
The official unemployment rate was 4.4 percent in March 2020, up from 3.5 percent in February. That increase was the largest of any month since January 1975.
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.
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.
Compared to historical trends and other advanced economies, corporate tax revenues in the United States are at very low levels.
“America is going through an unprecedented national emergency, and we need to respond aggressively to address both the public health crisis and the economic risk,” said Michael A. Peterson, CEO of the Peterson Foundation.
“The coronavirus outbreak is an unprecedented national emergency, and we need to respond aggressively to address both the public health crisis and the economic risk,” said Michael A. Peterson, CEO of the Peter G. Peterson Foundation.
Healthcare in the United States is very expensive — but we don’t get what we pay for.
SNAP is the largest federal program aimed at combating hunger and food insecurity among low-income Americans.
Tax breaks totaled nearly $1.5 trillion in 2019. To put that in perspective, that’s more than the government spends on Social Security, defense, or Medicare.
A number of current and former candidates have suggested adding new sources of revenue through various types of taxation of wealth.
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.
PAYGO is a budget enforcement mechanism intended to prevent passage of legislation that increases deficits.
Some lawmakers favor substantial increases to marginal tax rates. Let’s look at how marginal tax rates and brackets work.
A wealth tax would impose a levy on assets owned by an individual or household — as opposed to, for example, an income tax.
As the 2020 campaign season swings into gear, the national debate about taxes — including tax rates, tax types, and tax fairness — is gaining prominence.
The proportion of the population who are uninsured began increasing in 2017.
The capital gains tax is a highly debated topic, as most presidential candidates have weighed in on how to revise it. Simply put, the capital gains tax is a levy on the profit received from the sale of a capital asset.
A broad, bipartisan majority of voters agree that the national debt is a key issue for the 2020 campaign.
“Voters believe that managing our national debt is a top priority that should play a central role in this year’s election discussion,” said Michael A. Peterson, CEO of the Peterson Foundation.
Heading into 2020, the vast majority of Americans are urging leaders in Washington to address the unsustainable national debt and budget deficit.
Following the pattern of previous years, this budget largely relies on very optimistic projections of economic growth and unlikely budget cuts to reduce the deficit.
The National Flood Insurance Program (NFIP) is run by the federal government to reduce the impact of flooding on private and public structures.
Powell noted that the current economic expansion is the longest on record and emphasized the need to consider the long-term implications of fiscal policy.
Today, President Trump released his fourth budget, which outlines the administration’s policy proposals, budget projections, and economic forecast for the next decade.
“Today’s budget proposal relies on optimistic projections for economic growth and unlikely budget cuts to illustrate deficit reduction,” said Michael A. Peterson, CEO of the Peter G. Peterson Foundation.
Although a range of views exists about optimal near-term fiscal policy, economists agree that America’s mounting debt presents significant challenges for our budget and the economy, particularly over the long term.
The latest report from the non-partisan Congressional Budget Office (CBO) reiterates that the federal budget is on an unsustainable trajectory.
“By any measure, the state of the Union’s fiscal outlook is unsustainable, and getting worse,” said Michael A. Peterson, CEO of the Peter G. Peterson Foundation.
Growth in 2019 was lower than the 2.9 percent growth in 2018. Key factors contributing to this drop include a significant slowing in the growth of nonresidential investment and, to a slightly lesser degree, slower growth in the consumption of goods and services.
“As the 2020 election begins, Americans are looking for leadership and solutions to our growing debt problem,” said Michael A. Peterson, CEO of the Peterson Foundation.
Understanding the United States’ changing labor force can be a key part of understanding larger trends in the overall economy. Here are key characteristics of the foreign-born population and how they compare to the native-born population.
As voting begins for the 2020 election season, the majority of Americans believe that addressing the national debt is a crucial issue that warrants action from policymakers.
“Today’s CBO report shows ten straight years of trillion-dollar deficits. That’s a sad reflection of our nation’s poor fiscal health, and it adds insult to injury that we’re piling on all this debt in a growing economy,” said Michael A. Peterson, CEO of the Peter G. Peterson Foundation.
As one decade ends and another begins, there’s no question that our fiscal outlook is daunting. But as we mark this milestone, it’s also helpful to take a closer look at projections from 10 years ago to assess how decisions by lawmakers and other factors have contributed to our fiscal outlook.
“As another unfortunate year of fiscal irresponsibility comes to a close, voters are sending a clear message to Washington that they want fiscal leadership,” said Michael A. Peterson, CEO of the Peterson Foundation.