Trillion-Dollar Deficits

Without budget cuts and reforms, the government will continue to produce large deficits. The deficit is projected to surpass one trillion dollars every year from now on unless Congress changes course.

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Updated June 27, 2024

Source: Congressional Budget Office

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U.S. Cuts Corporate Tax Rate

Tax reform lowered the U.S. federal  corporate tax rate. As a result, the combined federal and state U.S. corporate tax rate fell from almost 40 percent—the highest in the developed world—to below 25 percent. The new rate, slightly above the world average, is making America more competitive in the global economy.

Additional Sources:

Tax Foundation

KPMG

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Source: OECD

Debt Limit Appears Unlimited

The debt ceiling or debt limit is supposed to ensure that Congress is confronted with the consequences of out-of-control spending and borrowing in Washington. Like an alarm clock, the debt ceiling can offer a fiscal check on the government’s finances and encourages congressional deliberation of policies to control spending and debt. However, in recent years Congress has repeatedly suspended the debt ceiling, allowing the debt to rise unchecked. Congress must not suspend the debt ceiling again. Congress should enact fiscal controls to put the budget on a path to balance before raising the debt ceiling further.

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Updated October 17, 2024

Source: OMB

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Funding the Federal Government

Payroll taxes, those taxes paid by wage earners for Social Security and Medicare, have become an increasingly important revenue source for the federal government.

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Updated March 22, 2023

Source: OMB

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Social Security Worker to Recipient Ratio

Social Security’s main programs, the Old-Age and Survivors Insurance and Disability Insurance programs (OASDI), have been expanded to include more beneficiaries. As American society has continued aging, the number of covered workers per OASDI beneficiary has steadily fallen. OASDI is facing persistent deficits and must be reformed before it becomes insolvent in 2034.

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Updated December 7, 2021

Source: Social Security Administration

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What Funds the Federal Budget?

In 2023, individual income taxes comprised 48 percent of all federal revenues. This is followed by payroll taxes, which provided 35 percent of all revenues.

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Updated August 31, 2023

Source: Congressional Budget Office

Social Security Runs Deficits

Social Security runs consecutive and permanent cash-flow deficits. Without program reforms, this gap between what the Treasury is collecting in payroll and Social Security income taxes and what is needed to pay benefits will grow several times over despite strong tax revenue increases.

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Updated July 19, 2024

Source: Social Security Administration

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Unsustainable Budget Deficits

Excessive government spending, especially on autopilot (mandatory) programs, will continue to increase budget deficits if left unchecked. By 2054, the federal budget deficit is projected to be 9.1 percent of GDP. That is over three times the 50-year average, and would represent one-ninth of the economy. Lawmakers must cut spending and pursue structural budget reforms to control these deficits.

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Updated February 8, 2024

Source: Congressional Budget Office

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Social Security Spending

Spending on Social Security already exceeds $1 trillion annually, as spending on both Disability Insurance (DI) and Old-Age and Survivors Insurance benefits (OASI) continues growing.

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