Fiscal Policy

The national debt is the public and intragovernmental debt owed by the federal government. It’s also called sovereign debt, country debt, or government debt.

​A budget deficit is when spending exceeds income. The term applies to governments, although individuals, companies, and other organizations can run deficits.

A progressive tax imposes a higher rate on the rich than on the poor. It's based on the taxpayer's income or wealth.

A fiscal year is a 12-month period that an organization uses to report its finances. It starts at the beginning of a quarter, such as Jan. 1, April 1, July 1, or Oct. 1. The organization can be a government, business, or nonprofit.

The public debt is how much a country owes to lenders outside of itself. These can include individuals, businesses, and even other governments. The term "public debt" is often used interchangeably with the term sovereign debt.

The debt ceiling is a limit that Congress imposes on how much debt the federal government can carry at any given time. When the ceiling is reached, the U.S. Treasury Department cannot issue any more Treasury bills, bonds, or notes. It can only pay bills as it receives tax revenues. If the revenue isn't enough, the Treasury Secretary must choose between paying federal employee salaries, Social Security benefits, or the interest on the national debt.

A government shutdown is when non-essential discretionary federal programs close. It occurs when Congress fails to appropriate funds or the president doesn’t sign the appropriations bills.

Tax cuts are reductions to the amount of taxpayers' money that goes toward government revenue. Since they save voters' money, tax cuts are usually popular, while tax increases are not.

The Congressional Budget Office is a nonpartisan federal agency that analyzes the economy for the U.S. Congress. It also assists the House and Senate Budget Committees. It reviews the president's annual budget. It also reports on the deficit impact of every important piece of legislation.