Important fiscal deadlines will hit the next administration and Congress immediately after the November elections with more big picture economic decisions needed throughout 2025.
Calling the 2024 election, a “fiscal election,” the Peter G. Peterson Foundation details the important decisions facing the new administration and the new Congress in an article on U.S. fiscal deadlines.
In its latest projection, the Congressional Budget Office reports that the federal debt will grow from 97% of GDP in 2024 to 166% in 2054. Congress and the administration will need to make several decisions that will impact the trajectory of this growth:
- Debt ceiling reinstated January 1, 2025: While accounting maneuvers by the Treasury can forestall a default of the debt limit temporarily, Congress will need to find a solution. Both defaulting and flirting with a default have negative economic repercussions.
- Discretionary spending caps expire September 30, 2025: Congress must agree on annual appropriations or face repeating the drama of a potential government shutdown.
- Major tax provisions expire December 31, 2025: Congress will face questions of whether to permanently extend temporary tax credits enacted in 2017.
- Enhanced subsidies for purchase of health insurance expire December 31, 2025: Temporary changes to the ACA expanded eligibility of tax credits for the purchase of health insurance. Congress will be faced with determining whether the credits should be extended and, if so, how to pay for them.
- Estimates anticipate depletion of Social Security trust fund in 2033 and depletion of Medicare’s hospital insurance fund in 2036: The deadlines for these depletions are drawing closer as the U.S. population ages. The question remains whether Congress will have the political will to take action in the near term to address these issues.
Why it matters: Whether and what decisions are made to address fiscal needs, including the debt ceiling; discretionary spending caps; and funding for health care subsidies, the Social Security Trust Fund and Medicare’s hospital trust fund; will impact companies’ benefits strategies and their bottom line.
