The Fitch bond rating agency warned in June that despite the country's "exceptional strengths," the nation's AAA bond rating could be jeopardized by "governance shortcomings," including "failure to tackle fiscal challenges. "We're running off the rails at an alarming rate," she said in a statement. Macguineas said all aspects of the federal budget should be on the table. Remember, the lower the debt-to-GDP percentage, the better. government operated under its largest budget in history, the deficit was estimated to be 4.2 of GDP. Congressional Republicans have rejected any call for tax increases, while the White House has fought proposals to cut spending on major programs such as Medicare and Social Security. According to the Senate Budget Committee, in the fiscal year 2017, the federal deficit was 3.4 of GDP. The ballooning deficit continues to spark political fights. A deal to avoid a government default imposed modest caps on discretionary spending, which is a relatively small part of the overall budget. The recent showdown over the government's debt ceiling brought little meaningful change in the fiscal outlook. "How can anyone possibly think this trend is sustainable?" "We are projected to spend more on interest payments in the next decade than we will on the entire defense budget," said Maya Macguineas, president of the Committee for a Responsible Federal Budget. The government's gusher of red ink brought renewed calls for fiscal restraint. That money will come from the Federal Deposit Insurance Corp.'s deposit insurance fund and a special assessment on other big banks. The government has also paid $52 billion so far to cover deposits at three regional banks that failed this spring. Social Security payouts jumped 11%, thanks in part to an 8.7% cost-of-living adjustment for retirees and other recipients - the largest such increase in four decades. Spending on major health care programs such as Medicare and Medicaid rose sharply. Overall, tax revenues between October and June were 11% lower than the same period a year ago.Īt the same time, government spending jumped 10%. While the index has since rebounded, investors realized fewer capital gains last year, and paid less in capital gains taxes this year. The S&P 500 stock index, for example, fell nearly 20% in 2022, during a period of uncertainty about the economy. Treasury officials blamed the falling revenues on reduced investment gains last year. The deficit ballooned both because of a sharp increase in government spending and a significant drop in tax revenues. Peterson foundation, which promotes fiscal responsibility. Moreover, if lawmakers amended current laws to maintain certain policies now in place, even larger increases in debt would ensue."Unfortunately, interest is now the government's fastest growing quote-unquote 'program,'" said Michael Peterson, CEO of the Peter G. In CBO’s projections, it reaches 110 percent of GDP in 2032 (higher than it has ever been) and 185 percent of GDP in 2052. Relative to the size of the economy, federal debt held by the public is projected to dip over the next two years, to 96 percent of GDP in 2023, and to rise thereafter. Revenues are projected to reach their highest level as a share of GDP in more than two decades in 2022 and then to decline over the following few years but remain above their long-term average through 2032. Outlays are projected to average 23 percent of GDP over that period, a level high by historical standards, boosted by rising interest costs and greater spending for programs that provide benefits to elderly people. The deficit has been greater than that only six times since 1946. The deficit continues to decrease as a percentage of gross domestic product (GDP) next year as spending related to the coronavirus pandemic wanes, but then deficits increase, reaching 6.1 percent of GDP in 2032. The BudgetĬBO projects that the federal budget deficit will shrink to $1.0 trillion in 2022 (it was $2.8 trillion last year) and that the annual shortfall would average $1.6 trillion from 2023 to 2032. This report is the latest in that series. The Congressional Budget Office regularly publishes reports presenting its baseline projections of what the federal budget and the economy would look like in the current year and over the next 10 years if current laws governing taxes and spending generally remained unchanged.
0 Comments
Leave a Reply. |
Details
AuthorWrite something about yourself. No need to be fancy, just an overview. ArchivesCategories |