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Working Paper Debt
United States' Federal Indebtedness and Fiscal Policy Trade-Offs
We estimate federal spending and taxes by birth-year, gender, race, and education, by interacting official budget totals with microsimulation demographics to project federal budget imbalances. Future federal spending exceeds tax receipts under current policy. The federal Fiscal Imbalance totals $162.6 trillion in present value, six-fold larger than outstanding debt held by the public. Restoring fiscal balance would require immediately and permanently either raising all federal taxes by 26.1 percent or reducing all federal spending by 33.4 percent, or some combination of the two. Holding harmless some population groups from changes, including people over age 59, increases the required adjustment rate.
Recent Trends in US Multinational Activity
We examine recent trends in the activities of US multinationals and their foreign affiliates using data from the Bureau of Economic Analysisâs annual survey of US direct investment abroad. Since the passage of the Tax Cuts and Jobs Act (TCJA), multinational activity has become more domestically concentrated, continuing a trend that started before the legislation. This has coincided with a decline in the US effective corporate tax rate and relatively stable foreign effective tax rates.
Analysis of President Bidenâs New Plans for Student Loan Debt Relief â April 2024
We estimate that President Bidenâs recently announced âNew Plansâ to provide relief to student borrowers will cost $84 billion, in addition to the $475 billion that we previously estimated for President Bidenâs SAVE plan. Moreover, some debt relief in the New Plans accrues to borrowers in households with income more than the SAVE plan coverage.
U.S. Demographic Projections: With and Without Immigration
U.S. population growth is projected to decline, and the population will become much older over time. Preventing these outcomes will require faster immigration by several multiples of its current rate.
Lifting the SALT Cap: Estimated Budgetary Effects, 2024 and Beyond
For more election analysis, check out our Election 2024 page .
Budgetary Cost of the Wyden-Smith (H.R. 7024) Tax Proposal: Conventional Estimates
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.
Budgetary Effects of Granting Green Cards to Immigrants with Advanced STEM Degrees
PWBM estimates that exempting from immigrants with advanced STEM degrees from numerical limitations on green cards would reduce deficits by $129 billion over the 2025-2034 period and by $634 billion over the 2035-2044 period.
How Does Accounting for Population Change Affect Estimates of the Effect of Immigration Policies on the Federal Budget?
We report estimates from the Penn Wharton Budget Model (PWBM) that exempting employment-based green cards from statutory limits for applicants (and their families) who have earned a doctoral or masterâs degree in a STEM field---similar to Section 80303 in H.R. 4521---would reduce federal budget deficits by $129 billion from 2025 to 2034. In contrast, a conventional budget estimate, which would include projected increases in federal spending but not the effect of a larger population on federal tax revenues, shows an increase in federal deficits of $4 billion.
Explaining the Rise in Prime Age Womenâs Employment
The economic costs of the COVID-19 pandemic were widely expected to fall disproportionally on women. Instead, the employment rate of prime age women recovered faster than menâs and rose to its highest point in U.S. history in 2023. We show that the resilience of womenâs employment is driven by two long-term trends that predate the pandemic and continued through it: 1) the growing share of women who are college graduates, and 2) the rising labor force participation of college-educated mothers with young children.
