Trust funds for Social Security, military retirement, civil service retirement and disability, and Medicare account for most of that debt. Debt held by government accounts is issued to the federal government’s trust funds and other federal accounts for internal transactions. Such debt is held by outside investors (including individual investors in the United States and other countries), the Federal Reserve System, mutual funds, financial institutions, and foreign governments. 3 Debt held by the public is mostly in the form of securities that the Treasury issues to raise cash to fund operations that cannot be covered by federal revenues. What Constitutes Debt Subject to the Statutory Limit?ĭebt subject to the statutory limit (commonly referred to as debt subject to limit) consists of debt held by the public and debt held by government accounts. To avoid breaching the limit, the Treasury has begun using the extraordinary measures (described below) that allow it to continue to borrow additional amounts for a limited time.Ĭontinued use of those measures, along with regular cash inflows, would, in CBO’s estimation, allow the Treasury to finance the government’s activities until the summer without an increase in the debt ceiling, a delay in payments, or a default. The Treasury has already reached the current debt limit of $31.4 trillion, so it has no room to borrow under its standard operating procedures, other than to replace maturing debt. 2 As a result, the government would have to delay making payments for some activities, default on its debt obligations, or both. If the debt limit is not raised or suspended before the extraordinary measures are exhausted, the government would be unable to pay its obligations fully. income growth slowed by more in early calendar year 2023 than CBO projected-the extraordinary measures could be exhausted sooner, and the Treasury could run out of funds before July. If those receipts fell short of estimated amounts-for example, if capital gains realizations in 2022 were smaller or if U.S.
In particular, income tax receipts in April could be more or less than CBO estimates. The projected exhaustion date is uncertain because the timing and amount of revenue collections and outlays over the intervening months could differ from CBO’s projections. The Congressional Budget Office projects that, if the debt limit remains unchanged, the government’s ability to borrow using extraordinary measures will be exhausted between July and September 2023-that is, in the fourth quarter of the current fiscal year. 1 On January 19, 2023, that limit was reached, and the Treasury announced a “debt issuance suspension period” during which, under current law, it can take well-established “extraordinary measures” to borrow additional funds without breaching the debt ceiling.
On December 16, 2021, lawmakers raised the debt limit by $2.5 trillion to a total of $31.4 trillion. The amount is set by law and has been increased or suspended over the years to allow for the additional borrowing needed to finance the government’s operations. Under either scenario, though, benefit reductions or tax increases will be needed to ensure the program's continued solvency.The debt limit-commonly called the debt ceiling-is the maximum amount of debt that the Department of the Treasury can issue to the public or to other federal agencies. They also projected that outlays would exceed revenues in 2016 and the trust fund would be exhausted in 2037.Īt least part of this difference is due to different assumptions of whether the 2001/2003 tax cuts are allowed to expire or not - since this determines how much revenue is raised from the taxation of Social Security benefits.
The Trustees projected a 75-year shortfall equal to 2 percent of payroll (around 0.75 percent of GDP) and a shortfall of 4.4 percent of payroll (1.5 percent of GDP) in the 75 th year. And a shortfall of 3.6 percent of payroll (1.3 percent of GDP) in the 75 th year.ĬBO's analysis is considerably more optimistic than the Social Security Trustees report, which we analyzed recently. Over the next 75 years, CBO projects Social Security will face a shortfall equal to 1.3 percent of payroll (0.5 percent of GDP). In the absence of legislative changes, spending for the program will climb to 6.1 percent of GDP in 2033."īecause revenues will remain roughly constant (payroll tax revenue will go down, but revenue from taxation of benefits will go up), CBO projects that the system will begin running deficits in 2017, and the trust fund will run out of money in 2043. As the baby boomers age, the number of Social Security beneficiaries will grow considerably.
#Congressional budget office social security report plus#
total outlays (benefits plus administrative costs) equaled 4.4 percent of gross domestic product (GDP) in 2008, whereas the program's dedicated revenues equaled 4.8 percent of GDP. August 8 - Today, the Congressional Budget Office (CBO) released its Long-Term Projections for Social Security.
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