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Yahoo
4 days ago
- Business
- Yahoo
GOP bill takes aim at Congress' 'no rules apply' emergency spending
FIRST ON FOX: A House fiscal hawk wants to create a payment plan for congressional emergency spending to create accountability for the "no rules apply" funding stream. Rep. Marlin Stutzman, R-Ind., is set to introduce the Emergency Spending Accountability Act that would add guardrails to last-minute funding meant for national emergencies, like natural disasters, the COVID-19 pandemic or other spending meant to fill the gaps in the appropriations process. Senate Weighs Trump's 'Big, Beautiful Bill' As Policy Group Backs Cbo, Projects $3 Trillion Debt Increase Stutzman told Fox News Digital that lawmakers will go about the usual budgeting process, passing stopgap spending bills or colossal, omnibus spending packages, but that "somewhere in between" there's always extra money pushed out the door for emergencies. "Whenever there's an emergency, Congress always overreacts," he said. "And I believe they pass these big spending bills under the guise of an emergency, national emergency, and spend money that we don't take into consideration through our budget process." White House Insists Fema Is Taking Hurricane Season 'Seriously,' Blasts 'Sloppy' Reporting Read On The Fox News App He said that when he first came to Washington in 2010, the national debt was $9 trillion. After leaving the House and returning during last year's election cycle, that number has since ballooned to more than $36 trillion. And since the early 1990s, more than $12 trillion in emergency spending has added to the ever-growing deficit. The lawmaker said that the money dedicated for emergency use was rarely ever paid back, and he argued that the taxpayer dollars were sometimes not used for actual emergencies. 'He's Not A Big Factor': Trump's Senate Allies Dismiss Elon Musk's Calls To 'Kill The Bill' Stutzman's legislation, which so far has seven House Republican co-sponsors, would require the federal government to pay off the balance of future emergency spending by 20% each year for five years after an emergency following a green-light from lawmakers to open up the cash flow. His bill would also stipulate that any emergency spending would have to comport with the criteria laid out by the Balance Budget and Emergency Control Act of 1985, which laid out a five-point roadmap to justify that emergency spending be necessary, sudden, urgent, unforeseen and not permanent. He understood that there is always a need for emergency spending, giving the examples of the pandemic and of Hurricane Sandy, which blasted through the East Coast more than a decade ago, but he noted there should be offset cuts to account for the spending and better planning on how the taxpayer dollars would be used. "Most companies and family budgets, they always have a rainy-day fund or an emergency fund that they can tap into if they need it for unexpected costs and expenses, but that's not the way Washington works," Stutzman said. "So that's the idea."Original article source: GOP bill takes aim at Congress' 'no rules apply' emergency spending
Yahoo
7 days ago
- Business
- Yahoo
Jamie Dimon warns US debt and deficits are a growing problem
JPMorgan Chase CEO Jamie Dimon warned in a new interview that the U.S. government's rising debt and budget deficits are a problem that will eventually cause bond market issues, and offered his thoughts on how reforms should move forward. Dimon, in an interview aired on Monday on FOX Business Network's "Mornings with Maria," was asked by host Maria Bartiromo how focused he is on the more than $36 trillion national debt and widening budget deficits. "It's a big deal, you know it is a real problem, but one day… the bond markets are gonna have a tough time," Dimon said. "I don't know if it's six months or six years." "The real focus should be growth, pro-business, proper deregulation, permitting reform, getting rid of blue tape, getting skills in schools, get that growth going – that's the best way," he said. House Reconciliation Bill Would Increase Budget Deficits By $2.3 Trillion Over A Decade: Cbo "Then reform some of these programs that everybody knows can be reformed properly," Dimon said, adding that those reforms can be structured in a way to lower the cost of those programs while mitigating the impact on the poor, elderly or those dealing with illnesses while ensuring those programs are sustainable. Read On The Fox Business App "I think some reform can take place. We're not taking benefits out of poor people or sick people or old people," he said. "You're just putting rules in place that make it more reasonable – you know, less fraud, less waste, less abuse." "I think all of those things need to be done, and then we can conquer that problem," Dimon said of the U.S. government's fiscal challenges. Cbo Says Us Budget Deficits To Widen, National Debt To Surge To 156% Of Gdp The federal government is projected to run roughly $2 trillion budget deficits annually in the next few years, which is historically large considering the deficit was $1 trillion in fiscal year 2019, the last pre-pandemic fiscal year. Deficits have widened in part due to rising spending on Social Security and Medicare amid the aging of America's population. Higher interest expenses on the national debt, which stem from the size and growth of the debt as well as higher interest rates, are the other primary drivers of the deficit. In the last fiscal year, interest expenses were a larger cost than the Department of Defense's discretionary budget as well as Medicare. Moody's Downgraded Us Credit Rating: What Does It Mean? The challenging budget situation the federal government is in led to a U.S. credit rating downgrade by Moody's Ratings last month, which lowered the rating one notch from the highest tier, Aaa, to Aa1. The firm said the downgrade "reflects the increase over more than a decade in government debt and interest payment ratios to levels that are significantly higher than similarly rated sovereigns." "Successive U.S. administrations and Congress have failed to agree on measures to reverse the trend of large annual fiscal deficits and growing interest costs," the firm said. "We do not believe that material multi-year reductions in mandatory spending and deficits will result from current fiscal proposals under consideration."Original article source: Jamie Dimon warns US debt and deficits are a growing problem
Yahoo
17-05-2025
- Business
- Yahoo
Moody's downgrades US credit rating over rising debt
Moody's Ratings on Friday announced that it downgraded the U.S. credit rating by one notch due to persistent fiscal deficits that it sees as likely to deteriorate in the future. The downgrade moves the U.S. credit rating down one notch from Aaa to Aa1 on Moody's 21-notch rating scale. The firm also changed its outlook for the U.S. from negative to stable. Moody's said that the downgrade "reflects the increase over more than a decade in government debt and interest payment ratios to levels that are significantly higher than similarly rated sovereigns." Cbo Says Us Budget Deficits To Widen, National Debt To Surge To 156% Of Gdp "Successive U.S. administrations and Congress have failed to agree on measures to reverse the trend of large annual fiscal deficits and growing interest costs," the firm explained. "We do not believe that material multi-year reductions in mandatory spending and deficits will result from current fiscal proposals under consideration." Moody's added that it sees the federal government's fiscal outlook worsening in the years ahead, with spending on entitlement programs like Medicare and Social Security continuing to rise amid the aging of the U.S. population and interest payments on the debt rising due to higher interest rates and widening deficits. Read On The Fox Business App Jamie Dimon Says A Recession Is Still A Possibility: 'I Wouldn't Take It Off The Table At This Point' "Over the next decade, we expect larger deficits as entitlement spending rises while government revenue remains broadly flat. In turn, persistent, large fiscal deficits will drive the government's debt and interest burden higher. The U.S.' fiscal performance is likely to deteriorate relative to its own past and compared to other highly-rated sovereigns," Moody's said. While it downgraded the U.S. credit rating by one rung, Moody's also changed its outlook from "negative" to "stable" in conjunction with the move, explaining that it reflects "balanced risks" at the Aa1 tier. "The U.S. retains exceptional credit strengths such as the size, resilience and dynamism of its economy and the role of the U.S. dollar as global reserve currency," the firm explained. "In addition, while recent months have been characterized by a degree of policy uncertainty, we expect that the U.S. will continue its long history of very effective monetary policy led by an independent Federal Reserve." The downgrade comes as President Donald Trump's sweeping tax bill failed to clear a key procedural hurdle on Friday, as hardline Republicans demanding deeper spending cuts blocked the measure in a rare political setback for the Republican president in Congress. The cut follows a downgrade by rival Fitch, which in August 2023 also cut the U.S. sovereign rating by one notch, citing expected fiscal deterioration and repeated down-to-the-wire debt ceiling negotiations that threaten the government's ability to pay its bills. Reuters contributed to this reportOriginal article source: Moody's downgrades US credit rating over rising debt Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
Yahoo
08-04-2025
- Business
- Yahoo
CBO says US budget deficits to widen, national debt to surge to 156% of GDP
The nonpartisan Congressional Budget Office (CBO) recently released its long-term budget outlook and showed that budget deficits are on track to widen in the years ahead, pushing the national debt well above the size of the U.S. economy. The CBO's budget forecasts that the debt held by the public as a percentage of gross domestic product (GDP), a metric favored by economists for comparing debt to economic output, is projected to rise from 100% this year to 156% of GDP in 2055. That would be a full 50 percentage points higher than the current record, which was set in 1946 as the U.S. began its post-World War II demobilization. Growth in the national debt will be driven by budget deficits widening from about 6.2% of GDP in 2025 to 7.3% in 2055 – well above the 1995-2024 average of 3.9%. Federal spending will continue to be driven by mandatory spending programs led by Social Security and Medicare amid the aging of America's population. Social Security spending is projected to rise from 5.2% of GDP this year to 6.1% in 2055, while the CBO sees Medicare spending rising from 3.1% to 5.8% of GDP in 2055. Us Faces Default Risk In August If Debt Limit Isn't Raised, Cbo Estimates Social Security's main trust funds are due to deplete their reserves in less than a decade, CBO found. The Old Age and Survivors Insurance Fund will be tapped out by 2033, though that would be a year later in 2034 if combined with the disability insurance trust fund. Read On The Fox Business App When the Social Security trust fund is depleted, it would trigger an automatic benefit cut for recipients, which CBO estimates would be reduced by 24% in 2034. For a sense of proportion, the Social Security Administration noted that the average monthly benefit as of January 2025 was $1,976 – which would be reduced by $474 a month if a 24% cut to monthly benefits occurred. Medicare's hospital insurance trust fund is now projected to be depleted by 2052 after its outlook improved due to lower projected costs and higher revenue projections, though the projections are sensitive to economic conditions and are highly uncertain. Us Government's Fiscal Strength Deteriorating, Moody's Warns Another major driver of increased spending will be net interest expenses, which are projected to rise from 3.2% of GDP this year to 5.4% in 2055 as the national debt continues to grow. By 2045, CBO projects the average interest rate on the national debt is expected to exceed the U.S. economy's growth rate. U.s. Gdp is projected to grow at slower rates in the decades ahead, with real, inflation-adjusted GDP declining from 2.8% last year and 2.1% in 2025 to 1.4% in 2055. CBO wrote that the "slowdown in the growth of output results from slower growth in the size and productivity of the labor force; the latter stems partly from increased federal borrowing." CBO added that population growth has a "significant effect on the economy" and that without immigration, the U.S. population is projected to begin shrinking in 2033. The CBO's report also notes that its projections are based on its previous demographic, economic and budget projections released between November and Jan. 6, and don't reflect administrative actions or judicial decisions taken since then that affect immigration, tariffs and other policy areas. Federal Budget Deficit Hits Record $1.1T In First 5 Months Of Fiscal Year The nonpartisan Peter G. Peterson Foundation (PGPF) warned that the CBO's report shows the risks of the U.S. government's fiscal trajectory, which could raise the risk of a debt crisis and other bad economic outcomes as the debt burden grows heavier. "The risk of a fiscal crisis – that is, a situation in which investors lose confidence in the value of the U.S. government's debt – would increase. Such a crisis would cause interest rates to rise abruptly and other disruptions to occur," PGPF wrote. "The likelihood of other adverse outcomes would also increase. For example, expectations of higher inflation could erode confidence in the U.S. dollar as the dominant international reserve currency." The Committee for a Responsible Federal Budget (CRFB), a nonpartisan budget watchdog, warned that "high and rising debt and deficits would have many negative consequences for the budget and the economy including slower income growth, higher interest rates and interest payments on the debt, increased geopolitical risks, undue burden on future generations, reduced fiscal space to respond to emergencies, and an increased risk of a fiscal crisis." "The clock is ticking; what was once tomorrow's problem is urgently becoming today's," said CRFB president Maya MacGuineas. "We need to snap out of this fiscal malaise and do the important work of budgeting, getting our fiscal house in order, and securing our nation's future."Original article source: CBO says US budget deficits to widen, national debt to surge to 156% of GDP Sign in to access your portfolio
