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Brief Entitlements Healthcare Social Security

President Biden’s Proposal to Extend the Medicare Trust Fund

PWBM estimates that President Biden’s 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.

Mar 10, 2023

Felix Reichling · Mar 10, 2023 · 14 min read

President Biden’s Proposal to Extend the Medicare Trust Fund

Brief Tax Policy

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.

Mar 9, 2023

Richard Prisinzano · Mar 9, 2023 · 17 min read

The Excise Tax on Stock Repurchases: Effects on Shareholder Tax Burdens and Federal Revenues

Brief Education

Budgetary Cost of Newly Proposed Income-Driven Repayment Plan

We estimate President Biden’s 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 .

Jan 30, 2023

Kent Smetters · Jan 30, 2023 · 12 min read

Budgetary Cost of Newly Proposed Income-Driven Repayment Plan

Brief Debt Demographics Growth

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.

Dec 19, 2022

Jagadeesh Gokhale, Kent Smetters · Dec 19, 2022 · 14 min read

Long-Term Financial Implications of Current Federal Budget Policies

Brief Debt Education

The Biden Student Loan Forgiveness Plan: Budgetary Costs and Distributional Impact

President Biden’s 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 “static” assumptions. However, depending on future IDR program details to be released and potential behavioral (i.e., “non-static”) changes, total plan costs could exceed $1 trillion.

Aug 26, 2022

Kent Smetters · Aug 26, 2022 · 7 min read

The Biden Student Loan Forgiveness Plan: Budgetary Costs and Distributional Impact

Brief Debt Education Tax Policy

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.

Aug 23, 2022

Kent Smetters · Aug 23, 2022 · 10 min read

Forgiving Student Loans: Budgetary Costs and Distributional Impact

Brief Debt Education Growth Inflation Tax Policy

Senate-Passed Inflation Reduction Act: Estimates of Budgetary and Macroeconomic Effects

PWBM estimates that the Senate-passed version of the Inflation Reduction Act would reduce non-interest cumulative deficits by $264 billion over the budget window. The impact on inflation is statistically indistinguishable from zero. GDP falls slightly within the first decade while increasing slightly by 2050. Most, but not all, of the tax increases fall on higher income households.

Aug 12, 2022

PWBM · Aug 12, 2022 · 13 min read

Senate-Passed Inflation Reduction Act: Estimates of Budgetary and Macroeconomic Effects

Brief Education Inflation Tax Policy

Inflation Reduction Act: Comparing CBO and PWBM Estimates

PWBM and CBO find an almost identical impact of the Inflation Reduction Act of 2022 (“IRA”) on the budget, with small differences stemming from the timing of the corporate minimum tax revenue. The impact on inflation is statistically indistinguishable from zero for either estimate.

Aug 5, 2022

PWBM · Aug 5, 2022 · 6 min read

Inflation Reduction Act: Comparing CBO and PWBM Estimates

Brief Debt Education Entitlements Growth Healthcare Inflation Tax Policy

Inflation Reduction Act: Preliminary Estimates of Budgetary and Macroeconomic Effects

PWBM estimates that the Inflation Reduction Act would reduce non-interest cumulative deficits by $248 billion over the budget window with no impact on GDP in 2031. The impact on inflation is statistically indistinguishable from zero. An illustrative scenario is also presented where Affordable Care Act subsidies are made permanent. Under this illustrative alternative, the 10-year deficit reduction estimate falls to $89 billion.

Jul 29, 2022

PWBM · Jul 29, 2022 · 9 min read

Inflation Reduction Act: Preliminary Estimates of Budgetary and Macroeconomic Effects

Brief Tax Policy

Decomposing the Decline in Estate Tax Liability Since 2000

We estimate that the federal estate tax would have generated 9 times more revenue in 2019 without the tax changes in 2001 and 2017.

Jul 28, 2022

John Ricco, Victoria Osorio · Jul 28, 2022 · 50 min read

Decomposing the Decline in Estate Tax Liability Since 2000