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Penn Wharton Budget Model provides nonpartisan, research-based estimates and analysis on the fiscal impact of public policy. Learn more →
PWBM estimates Operation Epic Fury has cost $27–28 billion in the first 32 days, with projected two-month direct costs of $38–47 billion if fighting continues to the end of April, with another $5 billion in indirect costs.
American retirees receive over twice as much in total federal outlays as working-age adults and six times more than children and young adults. These ratios are even larger on a per-capita basis. Expenditures on retirees are projected to rise even more.
Projected per-gallon price drops and two-month revenue losses if states suspend gasoline and diesel taxes.
We project that Social Security's Old-Age and Survivors Insurance Trust Fund will deplete in six years (2032). We consider five different reform options that vary in the amount of tax increases and benefit cuts. Traditional policy analysis that dominates federal policymaking often provides very different — even opposite — insights compared to more comprehensive modeling.
The USITC recently released updated trade and tariff data. We estimate an effective tariff rate (ETR) of 10.3 percent through January 2026. We project that replacing the IEEPA tariffs with a new 10% global tariff rate lowers the ETR to 7.7 percent on a bias-corrected basis appropriate for short-term projections.
Two Senate proposals widen the zero tax bracket — Senator Booker's KYPA through a doubled standard deduction (costing $5.1 trillion) and Senator Van Hollen's WATCA through an alternative maximum tax (costing $1.4 trillion) — illustrating how mechanism determines cost, targeting, and distortions.
Senator Van Hollen's Working Americans' Tax Cut Act would pair a new alternative maximum tax for low- and middle-income filers with a graduated millionaire surtax, increasing federal revenue by $264 billion over a decade, not including economic feedback effects.
We estimate that the Keep Your Pay Act proposed by Senator Cory Booker would reduce federal revenues by up to $6.4 trillion over a decade. Households earning $100,000–$200,000 receive the largest tax cuts. Separately, on social media, Senator Booker proposed a top-rate increase that we estimate would offset about $1.4 trillion.
We analyze how employers could exploit DHS' new H-1B lottery rules by reclassifying positions into closely related occupations with lower prevailing wages to increase their chance of selection. We find that 61 percent of registrations would achieve a higher wage level through reclassification, undoing 42 percent of the expected compensation increase.
We project that reversing the IEEPA tariffs will generate up to $175 billion in refunds. Unless replaced by another source, future tariff revenue collections will fall by half.
The USITC recently released updated trade and tariff data. We estimate an effective tariff rate (ETR) of 10.3 percent through January 2026. We project that replacing the IEEPA tariffs with a new 10% global tariff rate lowers the ETR to 7.7 percent on a bias-corrected basis appropriate for short-term projections.
Two Senate proposals widen the zero tax bracket — Senator Booker's KYPA through a doubled standard deduction (costing $5.1 trillion) and Senator Van Hollen's WATCA through an alternative maximum tax (costing $1.4 trillion) — illustrating how mechanism determines cost, targeting, and distortions.
We analyze how employers could exploit DHS' new H-1B lottery rules by reclassifying positions into closely related occupations with lower prevailing wages to increase their chance of selection. We find that 61 percent of registrations would achieve a higher wage level through reclassification, undoing 42 percent of the expected compensation increase.
The current Social Security program faces a significant shortfall, equal to 4.2 percent of all future covered payroll over the next 75 years. This shortfall persists under alternative and favorable projections of fertility, interest rates, immigration and the projected impact of AI on future wages.
We estimate that AI will increase productivity and GDP by 1.5% by 2035, nearly 3% by 2055, and 3.7% by 2075. AI’s boost to annual productivity growth is strongest in the early 2030s but eventually fades, with a permanent effect of less than 0.04 percentage points due to sectoral shifts.
PWBM estimates Operation Epic Fury has cost $27–28 billion in the first 32 days, with projected two-month direct costs of $38–47 billion if fighting continues to the end of April, with another $5 billion in indirect costs.
American retirees receive over twice as much in total federal outlays as working-age adults and six times more than children and young adults. These ratios are even larger on a per-capita basis. Expenditures on retirees are projected to rise even more.
Projected per-gallon price drops and two-month revenue losses if states suspend gasoline and diesel taxes.
We project that Social Security's Old-Age and Survivors Insurance Trust Fund will deplete in six years (2032). We consider five different reform options that vary in the amount of tax increases and benefit cuts. Traditional policy analysis that dominates federal policymaking often provides very different — even opposite — insights compared to more comprehensive modeling.
Senator Van Hollen's Working Americans' Tax Cut Act would pair a new alternative maximum tax for low- and middle-income filers with a graduated millionaire surtax, increasing federal revenue by $264 billion over a decade, not including economic feedback effects.
