Budgetary Effect of âSAVE Students Actâ
PWBM estimates that âSAVE Students Actâ would cost about $276 billion less over the 10-year budget window relative to the Income-Driven Repayment (IDR) plan proposed by President Biden.
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The Fiscal Responsibility Act of 2023: Budget Cost Estimates of the Debt Ceiling Agreement
We estimate the Fiscal Responsibility Act (âFRAâ) of 2023 will reduce noninterest spending by $1.3 trillion over the 10-year budget window using standard scoring assumptions. If discretionary spending in Fiscal Year 2026, after sequestration is no longer in effect, deviates from standard scoring assumptions, the spending reduction could be as low as $234 billion or as high as $1.8 trillion.
Why the Debt Ceiling Deadline is Closer Than Previously Expected
The deadline to raise the nationâs debt ceiling is closer than previously thought because tax receipts in April fell below projections. PWBM estimates that receipts are running $150 billion below government projections for fiscal year 2023, most likely due to aâŻdecline in capital gains income and weakening corporate profit margins.
The Long-Term Budget Effects of Permanently Extending the 2017 Tax Cuts and Jobs Actâs Expiring Provisions
Several revenue and spending provisions in The Tax Cuts and Jobs Act (TCJA) are scheduled to expire (âsunsetâ) by the end of 2025. We estimate that âextendersâ (âno sunsetâ) would increase the federal debt held by the public from 226.0 percent of GDP to 261.1 percent of GDP by 2050.
President Bidenâs Proposal to Extend the Medicare Trust Fund
PWBM estimates that President Bidenâs new Medicare proposal would increase the solvency of the Medicare trust fund from the year 2028 to 2053. However, a significant share of that increase comes from redirecting existing (current law) revenue to the trust fund. Another portion comes from unspecific expenditure reductions that lack the details required to score. Counting only new income without unspecified expenditure reductions, we project, as an illustrative alternative, that the HI trust fund would remain solvent until 2037.
The Excise Tax on Stock Repurchases: Effects on Shareholder Tax Burdens and Federal Revenues
President Biden has proposed raising the current excise tax rate on stock repurchases from 1 percent to 4 percent. We estimate that, for domestic shareholders, this tax increase would eliminate about 85 percent of the current-law tax preference for dividends over stock repurchases.
Budgetary Cost of Newly Proposed Income-Driven Repayment Plan
We estimate President Bidenâs newly proposed Income-Driven Repayment (IDR) Plan will cost between $333 to $361 billion over the 10-year budget window, more than twice as much as the cost estimate released by the Biden Administration. These costs are in addition to the one-time cost of direct loan forgiveness that we previously estimated at $469 billion .
Long-Term Financial Implications of Current Federal Budget Policies
Under current law, we project that national debt will rise to 225% of GDP by 2050 and continue to rise thereafter. Changing demographics will reduce future economic growth.
The Biden Student Loan Forgiveness Plan: Budgetary Costs and Distributional Impact
President Bidenâs new student loan forgiveness plan includes three major components. We estimate that debt cancellation alone will cost up to $519 billion, with about two-thirds of the benefit accruing to households making $88,000 or less. Loan forbearance will cost another $16 billion. The new income-driven repayment (IDR) program would cost another $70 billion, increasing the total plan cost to $605 billion under strict âstaticâ assumptions. However, depending on future IDR program details to be released and potential behavioral (i.e., ânon-staticâ) changes, total plan costs could exceed $1 trillion.
Forgiving Student Loans: Budgetary Costs and Distributional Impact
We estimate that forgiving federal college student loan debt will cost between $300 billion and $980 billion over the 10-year budget window, depending on program details. About 70 percent of debt relief accrues to borrowers in the top 60 percent of the income distribution.
