Ed Murphy is a policy expert whose work focuses on analyzing developments in federal fiscal policy. At PWBM, he is responsible for producing models of federal spending and contributing to analyses of policy proposals. Prior to joining PWBM, he spent seven years with the Peter G. Peterson Foundation, where he created blogs, analyses, and graphics that summarized fiscal and economic policy issues for a general audience, and also managed a portfolio of grants to think tanks working on fiscal and economic policy research. He holds a Master of Public Policy with a concentration in public budgeting and finance from the Edward J. Bloustein School at Rutgers University.
PWBM estimates that the COVID-era Employee Retention Credit (ERC) will have cost more than $300 billion when the IRS finishes processing claims later in 2025, nearly four times the initial projected cost. Most of the ERC was paid retroactively, well after pandemic-related economic disruptions had ended, limiting its effectiveness as a worker retention incentive.
For the final bill, please see our analysis of the President Trump-Signed Reconciliation Bill .
Eliminating taxes on Social Security benefits reduces incentives to save and work while increasing federal debt. Wages and GDP fall over time. The policy primarily benefits high-income households nearing or in retirement while harming households under thirty and all future generations across the entire income distribution.
For more election analysis, check out our Election 2024 page .
For more election analysis, check out our Election 2024 page .
Note: This document was updated on 5/30/2024 to include a discussion of how much of the policy would be paid for by economic feedback effects.
PWBM estimates that President Biden’s FY2025 budget proposal would reduce primary deficits by $1.7 trillion over the 2025-2034 budget window. Accounting for economic feedback effects, GDP falls by 0.8 percent relative to current law in 2034. By 2054, debt falls by 5.4 percent and GDP declines by 1.3 percent relative to current law.
Note: This document was updated on 5/21/2024 to include a conventional distributional analysis and a dynamic distributional analysis of the three policy bundles.
PWBM estimates that the Wyden-Smith tax proposal ( H.R. 7024 ) would reduce revenues by $3 billion over the next decade on a conventional basis.
PWBM estimates that Title I of the Build It in America Act would add $76 billion to the budget deficit over the next decade and reduce deficits by $18 billion during the subsequent second decade. It would temporarily boost business investment and GDP during the next two years while lowering GDP in subsequent years. If lawmakers made the extensions permanent, the budgetary cost would rise to $1.25 trillion over the next two decades and GDP would largely remain unchanged, as the tax incentive effects and debt effects mostly offset.
