Analysis & Indicators

Blog Post

It’s Important to Distinguish Between Short-term Cyclical Deficits and Long-term Structural Deficits

July 27, 2017
Not all deficits are created equal. In designing policy responses, it is important to distinguish between “cyclical” and “structural” deficits. Cyclical deficits are caused by a weak economy. Recessions drive down government revenue because many workers and businesses are no longer earning as much taxable income. At the same time, government spending rises because more people need assistance through programs such as Medicaid, unemployment benefits and food stamps.

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Blog Post

Lawmakers Continue Work on Spending, Tax Plans

December 15, 2015

Congressional negotiators have indicated they are making substantial progress on deals that would cover spending plans for the rest of Fiscal 2016 and the extension of a number of tax breaks for businesses and individuals.

With the fiscal year already two and a half months old, the $1.1 trillion spending plan is long overdue. To avoid a government shutdown, lawmakers last week moved their self-imposed deadline for a deal to this Wednesday, and another delay is likely this week as lawmakers consider whatever legislative proposals emerge from the negotiations.