Our Top 21 Fiscal Charts of 2021
2021 was a busy year for fiscal policy, which gave us ample opportunities to conduct substantive policy analyses using charts and tables. This year, we published over 210 papers, blog posts, and other products. As we get ready to pop the champagne and ring in the new year, here are our top fiscal charts of 2021.
1. The National Debt is High and Rising
In July, the Congressional Budget Office (CBO) projected debt would rise from 100 percent of Gross Domestic Product (GDP) at the end of Fiscal Year (FY) 2020 to a record 106.4 percent of GDP by 2031. Under an alternative scenario where policymakers extend most expiring tax cuts and grow annual appropriations with the economy instead of inflation, debt would reach 122 percent of GDP by FY 2031.
Since this chart was published, we revised our debt projections to account for the enactment of the Infrastructure Investment and Jobs Act (IIJA), changes to Supplemental Nutrition Assistance Program (SNAP) benefits, and a lower-than-expected deficit in FY 2021. We estimate that under current law debt will reach a record 107.5 percent of GDP by the end of FY 2031.
Debt Will Reach New Record by 2031.jpg
2. The Budget Deficit Totaled $2.8 Trillion in 2021
In July, CBO projected the FY 2021 deficit would total $3.0 trillion. From there, CBO projected the deficit would fall to $1.2 trillion in FY 2022 and $753 billion in 2024 as COVID relief winds down and then rise gradually to $1.9 trillion by 2031. Since this chart was published, CBO updated its FY 2021 deficit figure to reflect the actual year-end deficit of $2.8 trillion.
Deficits Will Remain High.jpg
3. Major Trust Funds Are Approaching Insolvency
In our paper “The Case for Trust Fund Solutions,” we estimated the Highway Trust Fund would become insolvent in FY 2022, the Medicare Hospital Insurance (HI) trust fund in FY 2026, the Social Security Old-Age and Survivors Insurance (OASI) trust fund in calendar year (CY) 2032, and the Social Security Disability Insurance (SSDI) trust fund in CY 2035.
Since this chart was published, the Medicare and Social Security Trustees released their annual reports. Now, the HI trust fund is expected to be insolvent in CY 2026, the OASI trust fund in CY 2033, and the SSDI trust fund in CY 2057. On a theoretical combined basis, the Social Security trust funds will be insolvent in CY 2034. Meanwhile, the insolvency date of the Highway Trust Fund has been pushed back due to enactment of the Infrastructure Investment and Jobs Act.
Insolvenecy Looms for Trust Funds.jpg
4. Trust Fund Solutions Would Be Pro-Growth
Making the Social Security, Medicare, and highway trust funds solvent would not only prevent sharp benefit cuts and improve the fiscal outlook, but would actually grow the economy. We found that trust found solutions would increase economic output by between 3.5 and 9.0 percent and reduce debt by between 65 and 80 percent of GDP by 2051.
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Continue reading this article at CRFB, Committee for a Responsible Federal Budget.
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