money

Fact checked by Suzanne Kvilhaug
Reviewed by Michael J Boyle

There is a lot of money in politics, and Hillary Clinton was able to raise a remarkable amount during the 2016 election cycle. The total amount raised by the official campaign committee, the DNC, super political action committees (PACs), PACs, and joint fundraising committees, was close to $1 billion. 

In six months, Clinton’s official campaign committee, Hillary for America, raised $460 million. Since there is a cap on the amount an individual can contribute to a campaign directly, super PACs remain important to big donors. According to the Center for Responsive Politics, more than half the amount raised by Clinton and her allies that election cycle came from large individual contributions, versus only 15% of Donald Trump’s campaign funds.

Dustin Moskovitz, Donald Sussman, and Jay Robert Pritzker were among the major contributors to Clinton’s campaign. We review these and other big Clinton campaign donors below.

Key Takeaways

• Although Hillary Clinton did not win the 2016 presidential election, she managed to raise millions of dollars in campaign contributions.
• Campaign finance laws state that political donations be reported to the Federal Election Committee, which makes that data public.
• Here, we profile the ten largest contributors to the Clinton campaign.

1. Dustin Moskovitz and Cari Tuna: $35 Million (Including Donations to Non-Partisan Voter Registration Efforts)

Meta (META) co-founder Dustin Moskovitz and his wife Cari Tuna revealed their plans to support the Democrats with donations in two Medium posts, one in the first week of September and one in early October.

They said, “Like many Democratic voters, we don’t support every plank of the platform, but it is clear that if Secretary Clinton wins the election, America will advance much further toward the world we hope to see. If Donald Trump wins, the country will fall backward, and become more isolated from the global community.”

In 2016, Moskovitz said they gave a total of $20 million to pro-Clinton, pro-Democrat organizations including the Hillary Victory Fund, the DSCC, the DCCC, the League of Conservation Voters Victory Fund, For Our Future PAC, MoveOn.org Political Action, Color Of Change PAC, and several nonpartisan voter registration efforts.

In October 2016, Moskovitz contributed $15 million to policy advocacy organizations, including the PUA super PAC, and $7 million to nonpartisan voter registration and get-out-the-vote efforts. He donated $2.5 million to the PUA super PAC in September and again in October, and then $1 million in November.

2. Donald Sussman, Paloma Partners: $21.1 Million

The president of this Connecticut-based hedge fund donated $21 million to the PUA super PAC and $600,000 to the Correct the Record super PAC. Correct the Record collects money to pay for personnel whose job it is to defend Clinton online.

3. Jay Robert Pritzker and Mary Pritzker, Pritzker Group and Pritzker Family Foundation: $12.6 Million

JB, the heir to the Hyatt Hotel (H) fortune and co-founder of an investment firm, donated to the PUA super PAC along with his wife. The Pritzker Family Foundation led by Jay Robert also donated to PUA super PAC.

4. Haim Saban and Cheryl Saban, Saban Capital Group: $10 Million

Chair of Univision Communications Haim Saban has been a long-time friend of Clinton, and his wife Cheryl sits on the board of the Clinton Foundation. Both donated separately to the PUA super PAC.

5. George Soros, Soros Fund Management: $9.52 million

The 85-year-old billionaire was vocal about his disdain for Trump. He donated over $9.52 million to the PUA super PAC and $25,000 to the Ready super PAC.

Note

Priorities USA Action, the main pro-Clinton super PAC, raised over $192.06 million. It raised almost $25 million in September, narrowly beating its August tally, making it the super PAC’s best fundraising month yet. FEC filings showed who was driving the surge in donations.

6. S. Daniel Abraham, SDA Enterprises: $9 Million

The 91-year-old sold his weight loss brand Slim-Fast to Unilever for $2.3 billion in 2000. He advocates for a two-state solution for Israel and Palestine and is the founder of the S. Daniel Abraham Center for Middle East Peace. He donated to the PUA super PAC.

7. Fred Eychaner, Newsweb Corporation: $8 Million

Eychaner is the founder and chair of Newsweb, a Chicago media company. The company includes for-profit companies that are privately held in addition to philanthropic groups. He donated to the PUA super PAC and Clinton’s campaign committee.

8. James Simons, Euclidean Capital: $7 Million

The billionaire hedge fund manager and mathematician donated to the PUA super PAC.

9. Henry Laufer and Marsha Laufer, Renaissance Technologies: $5.5 Million

Henry Laufer is a director at Renaissance Technologies, an investment management firm founded by James Simons. Marsha Laufer served as the chair of the Brookhaven Democratic Party. The Laufers donated to the PUA super PAC and Henry gave $500,000 to the Correct the Record Super PAC.

10. Laure Woods, Laurel Foundation: $5 Million

Laure Woods is the president and founder of Laurel Foundation, a private foundation focused on the education, health, and welfare of children. Woods donated more than $5 million to the campaign.

Other Donors

David E. Shaw, founder of D.E. Shaw & Co., donated $3 million to the PUA super PAC and $50,000 to the Ready super PAC. 

The following all contributed to the PUA super PAC: 

• Herb Sandler, whose foundation has supported the Center for Responsible Lending, ProPublica, and the Centre for American Progress, donated $3 million
• Bernard L. Schwartz, chair of BLS Investments and life-long supporter of the Democratic Party, donated $2.5 million
• Chair of Dreamworks New Media Jeffrey Katzenberg and director Steven Spielberg both donated $1 million each
• Movie producer Thomas Tull, who was responsible for such hits as “The Hangover” and “300”, donated $1.5 million

What Is a Political Action Committee?

A political action committee (PAC) pools donations and contributions from its members and distributes them to different political campaigns. There are limits to how much a PAC can contribute to a candidate’s campaign per election cycle. It must register with the U.S. Federal Election Committee within days of its formation.

How Much Can a Super PAC Fundraise for a Candidate’s Campaign?

Super PACs have no fundraising limits. This means they can raise as much as they want from different entities, including corporations, unions, and individual donors. All donors must be reported to the Federal Election Commission.

How Many Super PACs Are There?

Statistics show that there were 2,485 super PACs during the 2021-2022 election cycle. They received more than $5.02 billion in donations, covering over $2.72 billion in expenses.

The Bottom Line

Corporations aren’t allowed to directly donate money to a candidate’s campaign committee. However, they can sponsor political action committees or donate unlimited amounts to independent expenditure-only committees (super PACs). As per 2025-2026 limits, individuals can donate a maximum of $3,500 per election (the limit was $2,700 for the 2016 election) to a candidate’s campaign committee and unlimited amounts to Super PACs. Super PACs cannot make contributions to candidates, parties, or other PACs but can independently advocate for a certain candidate.

$600 direct individual payments and $300/week unemployment benefits

Reviewed by Charles Potters
Fact checked by Vikki Velasquez

Congress approved a 2,124-page, $2.3 trillion funding package on Dec. 21, 2020 that consisted of a $900 billion end-of-the-year COVID-19 stimulus bill attached to a $1.4 trillion omnibus spending bill intended to fund the government through Sept. 30, 2021. Former President Donald Trump signed the bill six days later.

The CAA stimulus legislation included $300 per week in additional jobless benefits, direct payments of $600 to individuals, $325 billion in small business loans, more than $80 billion for schools, and $69 billion for vaccine development and deployment.

Key Takeaways

• The CAA included direct payments of $600 per person including dependents 16 and under, as well as unemployment benefits of $300 per week.
• The stimulus package provided small business relief funding totaling $325 billion.
• A total of $69 billion was set aside for vaccine development and distribution.
• The plan set aside help for schools, renters, and welfare recipients.
• The CAA preceded the $1.9 trillion American Rescue Plan Act (ARPA) of 2021, signed by President Biden on March 11, 2021.

Direct Payments

The CAA package included Economic Impact Payments (EIPs) of $600 for individuals making up to $75,000 per year. Married couples who filed jointly and earned up to $150,000 per year received $1,200. Dependents age 16 and under were also eligible for $600.

Payments began within a week after the bill was signed into law. Those whose bank information was already with the IRS were paid first.

Warning

CAA legislation prohibited the IRS from disbursing stimulus payments after Jan. 15, 2021. You would have to have claimed it as a recovery rebate tax credit when you filed your 2020 tax return if you didn’t receive your payment by then.

Extra Unemployment Benefits

You would have been eligible for an additional $300 per week through March 14, 2021 if you were receiving unemployment benefits. This included self-employed persons, gig workers, and contract workers under an extension of the Pandemic Unemployment Assistance (PUA) program.

The Pandemic Emergency Unemployment Compensation (PEUC) program was also extended so anyone who had exhausted benefits would be eligible for up to 50 weeks of combined state and PUA benefits or 24 weeks of combined state and PEUC benefits. These programs expired on Sept. 6, 2021.

Small Business Relief

The bill provided $325 billion under the broad category of small business relief:

• $284 billion for forgivable first and second PPP loans
• $20 billion for EIDL grants for businesses in low-income areas
• $3.5 billion for continued SBA debt relief payments
• $2 billion for enhanced SBA lending
• $15 billion for live venues, independent movie theaters, and cultural institutions

Community Development Lending

Community Development Financial Institutions (CDFIs) and Minority Depository Institutions (MDIs) were set to receive $9 billion in additional funding through a Neighborhood Capital Investment program to help low-income and minority communities deal with the economic impact of COVID-19.

Transportation

Although state and local government assistance wasn’t included in this legislation, some local help was provided through $45 billion in transportation funding to include transit agencies, airlines and airline contractors, airports, state departments of transportation (DOTs), the motorcoach industry, and Amtrak as follows:

• $15 billion airline payroll support
• $1 billion airline contractor payroll support
• $14 billion for transit
• $10 billion for state highways
• $2 billion for airports and airport concessionaires
• $2 billion for the private motorcoach, school bus, and ferry industries
• $1 billion for Amtrak

Vaccines

Funding for COVID-19 vaccine procurement and distribution to the tune of $69.5 billion broke down like this:

• $20 billion to the Biomedical Advanced Research and Development Authority (BARDA)
• $9 billion to the CDC and individual states for vaccine distribution.
• $3 billion to build up the Strategic National Stockpile’s supplies of vaccine
• $22 billion direct aid to states for testing, tracing, and COVID mitigation
• $4.5 billion in additional mental health funding
• $9 billion to support healthcare providers
• $1 billion in funding for the National Institutes of Health (NIH) research into COVID-19
• $1 billion in direct funds to the Indian Health Service

Schools

K-12 schools, colleges, and universities were slated to receive $82 billion to help mitigate the impact of the coronavirus pandemic. Following a pattern similar to what was used with the Coronavirus Aid, Relief, and Economic Security (CARES) Act, this funding was divided as follows:

• $818.8 million for the Bureau of Indian Education and outlying areas
• $4.05 billion for the Governors Emergency Education Relief Fund for services to private K-12 schools
• $54.3 billion for the Elementary and Secondary (public K-12 schools) Emergency Relief Fund
• $22.7 billion to the Higher Education Emergency Relief Fund

Rent Assistance

State and local governments were responsible for distributing a reported $25 billion in emergency federal rent assistance. The money is targeted at families impacted by COVID-19 who struggle to pay rent and/or owe past due rent payments. Approximately $800 million of these funds are reserved for Native American housing entities.

Note

The CAA also extended the moratorium on evictions first extended by the CARES Act. This moratorium had been extended several times since then.

Federal and state governments still have several emergency rental programs in place, originally worth $46.55 billion. As of April 3, 2023, $25 billion was disbursed with $23.14 billion going to households.

Nutrition and Agriculture

A 15% increase in SNAP benefits and additional funding for food banks and senior nutrition programs costing $13 billion made up half of the $26 billion set aside in this category. It included $614 million for nutrition assistance for Puerto Rico and other territories, emergency funds for school and daycare feeding programs, and improvements in the P-EBT program.

The second $13 billion consisted of direct payments, purchases, and loans to farmers and ranchers who suffered losses due to the pandemic. These funds would be used to support the food supply chain, purchase food, donate to food banks, and support local food systems.

U.S. Postal Service

A CARES Act $10 billion loan to the USPS was converted to direct funding with no required repayment by the CAA legislation. These funds were designed to be used to offset operational costs and expenses resulting from the pandemic.

Childcare

A Child Care and Development Block Grant of $10 billion was allocated through the legislation to provide childcare assistance to families. The funds were also used to help childcare providers cover increased operating costs during the pandemic. Also included in this allotment was $250 million for Head Start providers.

Broadband

Emergency funds totaling $3.2 billion were appropriated to go to low-income families to provide access to broadband Internet through an FCC fund. Those funds began being disbursed on May 12, 2021 as Emergency Broadband Benefit (EBB) funds.

The CAA broadband appropriation also included a $1 billion tribal broadband fund, $250 million in telehealth funding and $65 million to complete broadband maps to aid in government disbursement of broadband funds. An additional $300 million grant program was set to provide broadband in rural areas. The total set aside for broadband was almost $7 billion.

No Surprises Act

The No Surprises Act contained in Division BB of the Consolidated Appropriations Act (CAA) of 2021 took a federal approach to the problem of surprise medical billing. Most parts of the act went into effect on Jan. 1, 2022. In the meantime, the Department of Health and Human Services, Treasury, and Department of Labor were instructed to issue regulations and guidance.

The main provisions of the No Surprises Act include:

• Protect patients from surprise medical bills due to gaps in coverage for services provided for emergencies and by out-of-network providers at in-network facilities, including by air ambulances.
• Hold patients liable only for their in-network cost-sharing amount but give providers and insurers the opportunity to negotiate reimbursement.
• Allow providers and insurers to access an independent dispute resolution process in the event disputes arise around reimbursement.
• Require providers and health plans to help patients access health care cost information.

Additional Programs and Extensions

The stimulus extended the Coronavirus Relief Fund created by the CARES Act and the Employee Retention Tax Credit. It also provided a special lookback for the Earned Income Tax Credit and Child Tax Credit for low-income individuals and provided a Contractor Pay Extension, allowing federal agencies to reimburse contractors for the cost of paid leave during the COVID pandemic.

It also extended into 2021 two charitable donation benefits that had been introduced for the 2020 tax year by the CARES Act:

• Taxpayers could continue to deduct charitable donations of up to 100% of their adjusted gross income. It’s generally 60% of AGI.
• Individual taxpayers who don’t itemize their deductions and take the standard deduction were allowed up to a $300 deduction for charitable cash contributions. Married couples who filed jointly and who don’t itemize could deduct up to $600, a provision added by the Consolidated Appropriations Act, but the deduction is no longer above-the-line as it was in 2020.

Comparison With CARES Act and American Rescue Plan

This table compares Consolidated Appropriations Act (CAA) funding in several key areas with both the CARES Act, which preceded the CAA, and the American Rescue Plan Act (ARPA), which followed it.

The American Rescue Plan Act

The Democratic majority began taking steps to pass a $1.9 trillion coronavirus relief package to deliver further help, called the American Rescue Plan Act, following the inauguration of Joseph R. Biden as president.

The plan was passed by both houses of Congress and signed into law by President Biden on March 11, 2021. It called for a nationwide COVID-19 vaccination program, $1,400-per-person relief checks, financial support for small businesses, funding to help schools reopen, expanded and extended unemployment insurance payments, rent subsidies, and more.

The American Rescue Plan also includes a provision that student loan forgiveness issued between Jan. 1, 2021, and Dec. 31, 2025, will not be taxable to the recipient.

Does the No Surprises Act Apply to Specific Health Care Providers?

Yes, but it’s a loose, large basket. According to CMS.gov, “any physician or other health care provider who is acting within the scope of practice of that provider’s license or certification under applicable State law may be subject to the rules.”

Does the Consolidated Appropriations Act Affect Medicare?

Yes. The Centers for Medicare & Medicaid Services (CMS) ruled on Oct. 28, 2022 to adopt sections of the Act that will make Medicare enrollment easier and will extend coverage of certain immunosuppressive drugs.

Has Subsequent Legislation Affected the Student Loan Provisions?

Provisions of the Higher Education Relief Opportunities for Students (HEROES) Act for canceling student loan principal debt were overruled by the U.S. Supreme Court on June 30, 2023. The court decided that the ACT did not authorize the U.S. Secretary of Education to grant such relief. But President Joe Biden announced the Saving on a Valuable Education (SAVE) Plan just days later to provide income-driven assistance to student loan borrowers.

The Bottom Line

The Consolidated Appropriations Act of 2021 extended numerous provisions of the Coronavirus Aid, Relief, and Economic Security (CARES) Act, some of which were set to expire at the end of 2020. It addresses issues of hunger and public health, broadband capacity for rural Americans, unemployment, education issues, employee retention measures, and some temporary tax breaks.

Ongoing and future legislation may affect some of these provisions so it can be helpful to keep an eye on the news and ongoing events.

Fact checked by Pete Rathburn
Reviewed by Akhilesh Ganti

The oil industry is driven by booms and busts. Prices rise during periods of global economic strength during which demand outpaces supply. Prices fall when the reverse is true. Meanwhile, oil supply and demand are driven by at least five key factors:

• Changes in the value of the U.S. dollar
• Changes in Organization of Petroleum Exporting Countries (OPEC) policies
• Changes in oil production and inventory levels
• The state of the global economy
• The implementation (or collapse) of international agreements

Notably, 2015 offers an interesting example of how all five factors can conspire to send prices to historic lows. At that time, the price of crude oil fell by more than half in under a year, reaching lows that had not been seen since the last global recession.

At the time, many oil executives believed it would be years before oil returned to $100 per barrel. They were right. Oil topped $100 per barrel in February and March 2022, during the depths of the supply chain disruption caused by the coronavirus pandemic. Prices then dropped well below that level and remain lower as of February 2025.

Five main factors can be identified as having driven crude oil prices down and kept them down in 2015.

Key Takeaways

• The year 2015 was a perfect storm for oil prices.
• The dollar was strong. Inventories were huge. The economy was weak. And production was growing.
• All of these factors drove the price of crude oil to less than $40 per barrel.

1. The Dollar Strengthens

In 2015, the dollar was at a 12-year high against the euro.

That placed pressure on market prices because commodity prices are usually quoted in dollars, and they will fall when the U.S. dollar is strong.

For example, the surge in the dollar in the second half of 2014 caused a rare sharp decline in all of the leading commodity indexes.

2. OPEC Retains Production Levels

OPEC, the cartel of oil producers that sets production levels, was unwilling to prop up the oil markets by cutting its production levels.

The oil ministers said in a statement that they had “concurred that stable oil prices – at a level which did not affect global economic growth but which, at the same time, allowed producers to receive a decent income and to invest to meet future demand – were vital for world economic wellbeing.”

Prices of OPEC’s benchmark crude oil fell by a whopping 50% after the organization decided against cutting production at that 2014 meeting in Vienna.

3. Global Inventory Grows

The prices of crude futures declined in late September 2015 when it became clear that oil stockpiles were growing amid increased production.

The Energy Information Administration (EIA) reported that global oil inventories increased in every quarter of 2015, with a net inventory build of 1.72 million barrels per day. That was the highest rate since at least 1996. By the end of 2015, oil prices were below $40 per barrel, the lowest level since 2009.

Total oil production by the end of 2015 was expected to increase to more than 9.35 million barrels per day—higher than previous forecasts of 9.3 million barrels per day.

4. The Economy Weakens

While the supply of oil became increasingly abundant in 2015, global demand for oil was decreasing. The economies of Europe and developing countries were weakening. Vehicles were becoming more fuel-efficient.

Meanwhile, China’s devaluation of its currency suggested that its economy might be weakening as well. Since China is the world’s largest oil importer, that was a huge hit to global demand and caused a negative reaction in crude oil prices.

5. Iran Makes a Deal

In July 2015, the U.S. and other world powers signed a deal that lifted economic sanctions against Iran.

The Iran nuclear deal, as it became known, freed Iran to start exporting oil again. Investors feared it would add to the world’s oversupply of oil, dragging down prices even more.

(In 2018, President Donald Trump withdrew the U.S. from the deal. Later, President Joe Biden expressed a willingness to renew talks but no action was taken during his term in office. All terms of the agreement are set to expire by October 2025.)

How Do Global Politics Affect Oil Prices?

Global politics affect oil exports, and that affects oil supply. Lower supply drives up prices. Even the expectation of lower supply drives up prices.

Sanctions on Russia’s oil exports are a recent example. At the end of his term in office, President Joe Biden imposed broader sanctions against Russia’s oil business. On taking office in 2025, President Donald Trump signaled his willingness to impose more sanctions. That immediately caused increased speculation in oil futures trading due to its potential to reduce oil supply and drive up prices.

Can We Expect Higher or Lower Oil Prices in the Near Future?

A forecast from the U.S. Energy Administration predicts lower oil prices in 2025 and 2026.

The agency estimates that the price of Brent crude oil, a benchmark for the oil industry, will fall to $74 per barrel in 2025, from $81 per barrel in 2024. It estimates that the price will fall further to $66 per barrel in 2026.

The forecast is based on strong growth in production outside the OPEC nations and slower growth in demand for oil products.

When Are Gas Prices Cheapest?

Gas prices tend to be cheapest in times of hardship or catastrophe. A side effect of bad times is lower demand for oil products, including gasoline. Some examples from recent history: The COVID-19 pandemic, the 2008-2009 economic collapse, and the 9/11 terrorist attacks.

The Bottom Line

At least five factors combine to influence the price of crude oil and, down the line, the price of gasoline at the pump. They are changes in the U.S. dollar’s value, policy changes by the OPEC nations, changes in oil production and inventory, the state of the global economy, and the status of international agreements.

In 2015, all of these factors turned positive, a rare occurrence that brought oil prices to a historic low.

Fact checked by Marcus Reeves
Reviewed by Doretha Clemon

Net neutrality came to an end in the U.S. in January 2025. This was the Federal Communications Commission (FCC) policy that required internet service providers (ISPs) to deliver content at the same speed regardless of its source.

This meant, among other things, that the Walt Disney Company couldn’t pay extra for a better download speed, and your nephew’s blog wouldn’t get lousy delivery because he couldn’t pay a premium. And, your ISP couldn’t slow down your service unless you paid to upgrade to the best delivery speed.

Now that a federal appeals court has shut down net neutrality in the U.S., it’s important to understand what it was, how we got here, and what could be next.

Key Takeaways

• Net neutrality is a rule that prohibited ISPs from charging businesses or consumers differently for better (or worse) internet delivery speeds.
• The issue of net neutrality was settled in the U.S. in January 2025. A federal appeals court determined that the FCC can’t regulate ISPs in this way.
• Net neutrality is in practice around the world, including the EU and India.

Obama Administration

The Obama administration advocated for a continuation of net neutrality, the FCC rules in place since 2010 that required companies like Verizon (VZ) and Comcast (CMCSA) to handle all content on their networks in an equal fashion, regardless of whether it was a video on a personal blog, a streaming service like Spotify, or a government website.

What the Rules Prevented

More specifically, net neutrality rules prevented:

• Throttling or slowing down the delivery of some websites or online services
• Preferential treatment, better service, or faster service for companies or consumers who paid higher premiums to service providers

In January 2014, under then-chair Tom Wheeler, the FCC proposed new rules for internet traffic that would allow broadband providers to charge companies like Netflix (NFLX) and Google (GOOG) a higher rate to deliver content via the speediest lanes.

Enter John Oliver

Wheeler was a former lobbyist for the cable television industry, which some argued could benefit greatly if new rules were created to allow internet service providers to treat data differently for different clients or customers. Before the initial policy decision on February 26, 2015, HBO’s John Oliver became an unofficial pro-net neutrality spokesman and mocked Wheeler over the issue on more than one occasion.

The Arguments for Net Neutrality

The end of net neutrality would spawn the beginning of net inequality, Oliver and others said. Broadband providers, many of which also offer cable TV services, would be able to charge premiums for an indispensable service for businesses: fast internet service. The providers would be able to selectively pick which companies get access to high-speed internet and how much they should pay, which could be devastating for the streaming industry.

The Legal Fight

Oliver focused the public’s attention on a difficult-to-understand legal fight. During the first round of debates in 2015, the public filed more than 120,000 comments on the issue of “Protecting and Promoting the Open Internet.” That staggering number is almost ten times the next most-commented issue at the time. The FCC site actually crashed after the John Oliver episode aired.

The Blowback

Many of the comments expressed outrage that the FCC would permit a new era of tiered internet service. Consumers and businesses feared that the internet would become a segregated landscape in which some content would be delivered at full speed while others would work more slowly because their owners couldn’t pay the premiums for the biggest bandwidth.

Many social media users noted that in countries without net neutrality, people purchase packages for different types of internet. The practical effect is that a consumer who wants to stream video has to pay for a more expensive package than a consumer who just visits websites.

The Fight Continues

It seemed that the issue was put to rest in 2015 when the regulations that restricted broadband providers from blocking content, slowing down specific services or applications, and receiving payments for favorable treatment stayed in place. The net neutrality advocates won.

Then, in November 2016, Donald Trump was elected president. He installed Agit Pai as the new head of the FCC. 

Rolling Back Regulation

Pai warned against net neutrality in 2015, arguing in a speech, “It’s basic economics. The more heavily you regulate something, the less of it you’re likely to get.”

Note

Pai said that the purpose of the roll-back of policy was to “restore internet freedom,” according to a press release.

After becoming the new FCC head in January 2017, Pai continued to argue that high-speed internet service should not be treated as a public utility and that the industry should police itself instead of being regulated by the government. With that, the same conflict that was put to rest in 2015 began once again.

Alerting Consumers

More than 80,000 websites and organizations, including Google, Facebook, and, perhaps surprisingly, AT&T, joined a protest called the “Day of Action” on July 12, 2017. On that day, websites published alerts encouraging users to send letters to the FCC urging it to keep net neutrality. On December 12, 2017, many web-based companies such as Reddit, Etsy, and Kickstarter posted protests to the FCC’s imminent vote on their websites. Still, the FCC voted to repeal net neutrality on December 14, 2017. The measure took effect on June 11, 2018.

Biden Administration

In 2018, the Senate voted to overturn the repeal of net neutrality but the resolution stalled in the House. The House then put it to a vote again in 2019 under the “Save the Internet Act.” But it was effectively dead in the water.

Joe Biden was inaugurated as President on January 20, 2021. His FCC chair, Jessica Rosenworcel, championed net neutrality. In 2024, the commission reinstated the policy.

However, the Ohio Telecom Association, a trade group representing ISPs, brought a case accusing the FCC of regulatory overreach. In January 2025, a federal appeals court based in Cincinnati agreed, calling net neutrality a “heavy-handed regulatory regime.”

Any substantial change, even at the state level, could be tough to implement. The FCC said that local and state governments cannot pass laws inconsistent with federal net neutrality rules.

What Is Net Neutrality?

As a Federal Communications Commission (FCC) policy that targeted internet service providers (ISP), net neutrality attempted to ensure equal access to the internet, making the internet open and free for everyone. Introduced by the Obama administration, it was gutted by the Trump administration and reinstated by the Biden administration before ultimately being eliminated by a federal appeals court in January 2025, which stated that the FCC couldn’t regulate ISPs in this way.

How Did Net Neutrality Start in the U.S.?

The Federal Communications Commission (FCC) under the Obama administration was the first to vote in favor of net neutrality.

What Did the Trump Administration Do to Net Neutrality?

Agit Pai, the chair of the Federal Communications Commission (FCC) under the Trump administration, called for eliminating net neutrality rules. The commission voted to do just that.

The Bottom Line

Net neutrality was passed back and forth between administrations for 15 years, from 2010 to 2025. A federal appeals court finally closed the issue in January 2025, ruling in favor of a trade group that represented ISPs. Though net neutrality is dead in the U.S., it is alive and well elsewhere in the world, including India and the European Union (EU).

Fact checked by Yarilet Perez
Reviewed by JeFreda R. Brown

Few topics ignite as much acrimony in political debates as the U.S. national debt. More than $36 trillion as of 2025, this figure often becomes a political football, kicked between parties vying for fiscal credibility. But what exactly is the national debt, and what does this have to do with the government bonds that finance it?

The national debt is the amount of money the federal government owes to its creditors, within the government and domestic and foreign investors. The federal debt is not just a number, but a reflection of U.S. fiscal policies and priorities as a nation. The debt accumulates when the government spends more than it collects in revenue, primarily through taxes.

To bridge this gap, the U.S. Department of the Treasury issues various types of bonds, essentially IOUs that promise repayment with interest. These bonds, ranging from short-term Treasury bills to 30-year bonds, are considered among the safest investments in the world, backed by the “full faith and credit” of the U.S. government.

While the raw number for the total federal debt at any time can seem alarming, economists often focus on the debt-to-gross domestic product (GDP) ratio as a more meaningful measure of the country’s financial health. This ratio compares the national debt to the size of the economy, providing context for the debt’s manageability. As of the third quarter of 2024 (the most recent data available), the U.S. debt-to-GDP ratio stands at about 121%, a figure that has sparked intense debate about its long-term implications for economic growth and stability.

The national debt has far-reaching consequences for everything from Social Security to international relations, and the U.S. Department of the Treasury is the agency that manages this debt. Below, we’ll learn more about the Treasury’s responsibilities, particularly the reasons for U.S. borrowing, and how it administers the debts of the U.S. government.

Key Takeaways

• The U.S. Department of the Treasury manages the government’s expenditures and its means of raising revenues, including overseeing the Internal Revenue Service (IRS), the country’s tax agency.
• The nation’s national debt is the total amount borrowed and owed by the government and accumulates when the government’s tax revenue is lower than its expenses.
• The primary means by which the government takes on debt is by issuing government bonds to the public. U.S. Treasury bonds are considered the safest investments in the world.
• The debt ceiling is the total amount of money the U.S. Treasury is allowed to borrow. If the money owed by the United States is higher than the debt ceiling, the federal government is in default on its debts.

What Is the National Debt?

From its beginnings, the American government has relied on borrowing. Even before the adoption of the Declaration of Independence, the Continental Congress issued bills of credit to finance the Revolutionary War in 1775.

After Alexander Hamilton became secretary of the Treasury in 1789, the national government took on responsibility for fully repaying all war debts. Since then, the federal debt has been fueled by more wars, economic recession, and inflation. The national debt accumulates when the government spends more money than it collects in revenue, primarily through taxes.

As of 2025, the total money owed by the U.S. federal government to creditors stands at more than $36 trillion, a number so large it can be challenging to comprehend. Each year’s deficit adds to the overall national debt. It’s important to note that the debt isn’t just from one administration or Congress; it’s the result of decades of financial decisions made by both political parties. The roots of these deficits lie in the yearly federal budget process.

The roots of these deficits lie in the federal budget process, which has become increasingly complex (or dysfunctional) in recent years. In theory, each fiscal year (Oct. 1 to Sept. 30), Congress and the president negotiate and pass a comprehensive budget outlining government spending and projected revenues. This budget would cover everything from military spending and Social Security payments to infrastructure projects and education funding. However, in practice, the United States has increasingly relied on continuing resolutions (CRs)—temporary funding measures that maintain spending at previous levels when a full budget can’t be agreed upon.

No one in the political branches or parties thinks these CRs, while allowing the government to continue operating, are anything but stopgap measures that are inefficient and avoid long-term fiscal planning. However, they result from political gridlock and are likely a contributor to the national debt since CRs maintain funding levels that may not align with present economic conditions or revenue projections.

Note

Since the U.S. government has run annual budget deficits much of the time since the 1930s, the extensive sale of Treasurys each year has become a crucial part of global economy. A sudden halt to the sale of this safe-haven asset would disrupt financial markets and cause significant volatility, at least in the short term.

U.S. debt takes two main forms:

1. Public debt: This is owed to individuals, corporations, state and local governments, the Federal Reserve Bank, and foreign governments. When you hear about China or Japan “owning U.S. debt,” this is what’s being referenced. Public debt accounts for about four-fifths of the national debt.
2. Intragovernmental holdings: This is debt that the government owes to itself, primarily to government trust funds like Social Security and Medicare. It represents the remainder of the total debt.

When the U.S. debt is discussed, this isn’t the same as the “public debt,” which is only about 78% of the total of U.S. debt obligations, with the rest owed to specific federal programs. It’s also not the same as the budget deficit, which is the annual amount federal outlays outpace its income.

To finance this debt, the U.S. Treasury issues various types of securities, including the following:

• Treasury bills (T-bills): Short-term debt instruments that mature in one year or less
• Treasury notes: Medium-term securities that mature in two to 10 years
• Treasury bonds: Long-term investments that mature in 20 or 30 years

These securities are considered among the safest investments globally, backed by the “full faith and credit” of the U.S. government.

While the nominal amount of national debt can seem staggering, economists often focus on the debt-to-gross domestic product (GDP) ratio. This compares the national debt to the size of the country’s economy, as measured by GDP.

As of 2025, the U.S. debt-to-GDP ratio is about 124%, meaning the debt is 1.24 times the size of the annual U.S. economy. This ratio helps contextualize the debt’s manageability and allows for historical and international comparisons. Below is a chart of the ratios for countries worldwide (hover over the map to compare the U.S. to other nations).

Understanding the national debt is crucial because it impacts various aspects of the economy and policy making—hence it’s a constant source of discussion in political debates. High levels of debt can lead to higher interest rates, potentially slower economic growth, and reduced fiscal flexibility for the government. However, moderate levels of debt can also promote economic growth by funding investments in infrastructure, education, and research.

In 2025, the federal debt passed the $36 trillion mark. This was an increase of over $14 trillion since December 2018. As of January 2025, the national debt is $36.22 trillion.

The Treasury’s Responsibilities

The U.S. Treasury handles federal spending and revenues, including issuing bonds and debt. The Treasury is divided into two divisions: departmental offices and operating bureaus.

These departments are mainly in charge of policy making and managing the Treasury, while the bureaus’ duties are to take care of specific operations. The table below highlights some of the key bureaus and their roles.

The Treasury’s primary tasks include the following:

• Federal tax regulation, enforcement, and collection
• Paying all liabilities of the federal government
• Prescribing tariff rules and regulations
• Printing and minting U.S. notes and U.S. coinage and stamps
• Supervising national banks, federally chartered banks, and thrift banks
• Advising government officials on both national and international economic, financial, monetary, trade, and tax policy and legislation
• Investigating and prosecuting federal tax evaders, counterfeiters, and forgers
• Managing federal accounts and the national public debt

The Role of Congress

Until World War I, the executive branch needed congressional approval to borrow money. Congress would determine the number of securities that could be issued, their maturity date, and the interest that would be paid on them.

However, with the Second Liberty Bond Act of 1917, the U.S. Treasury was granted borrowing authority up to a debt limit that would act as a ceiling on the total amount it could borrow without congressional approval.

The Treasury was also given the discretion to determine maturity dates, interest rate levels, and the type of instruments offered. The amount of money that the government could borrow without further authorization by Congress is known as the total public debt, subject to a limit. Any amount above this level must receive additional approval from the legislative branch.

264%

The nation with the highest debt-to-GDP ratio is Japan at 264%.

What Is the Debt Ceiling?

This change gave rise to the debt ceiling or debt limit, a ceiling on how much the U.S. Treasury can borrow set by Congress. If government spending, which is also approved by Congress, is greater than tax revenues, then the debt ceiling must be increased or the U.S. will default on its debts.

Once the debt ceiling is reached and not increased, the Treasury Department must find other ways to pay expenses. The debt ceiling has been raised or suspended several times to avoid the risk of default. There have been several political showdowns between Congress and the White House over the debt ceiling amount, some of which have led to government shutdowns.

The debt ceiling is often used as leverage to push budgetary agendas. It was raised in 2014, 2015, 2017, and 2019. In August 2019, then-President Donald Trump signed a bill to suspend the debt ceiling through July 31, 2021.

The drama around the debt ceiling would unfold again just a few years later. In early August 2021, the Treasury Department implemented extraordinary measures, authorized by law, to finance the government temporarily by suspending government investments in certain federal benefit and retirement funds. A month later, the Treasury notified Congress that cash and extraordinary measures likely would be exhausted during October 2021, and urged it to increase or suspend the debt limit or the entire U.S. economy, not just those directly affected by a stoppage in federal government payments, would face a crisis. The debt ceiling was raised again in December 2021 under then-President Joe Biden by $2.5 trillion to $31.4 trillion.

Just two years later, the nation was again on the brink of going past the deadline set by the Treasury for running out of emergency measures to avoid a debt default should the debt ceiling not be raised. With mere days remaining before it would occur, the White House and Congress cut a deal that suspended the debt ceiling until Jan. 1, 2025—notably after the 2024 presidential election, which Trump won.

Who Owns U.S. Debt?

U.S. government debt is sold as securities to both domestic and foreign investors, as well as corporations and other governments: Treasury bills (T-bills), notes, bonds, and U.S. Savings Bonds. There are short- and long-term investment options; short-term T-bills are offered regularly, as well as quarterly notes and bonds.

When a debt instrument matures, the Treasury can pay the cash owed (including interest) and reduce its total debt by the amount of the payment or it can issue new securities, thereby maintaining a corresponding amount of debt.

Debt instruments issued by the U.S. government are considered the safest investments in the world because interest payments do not have to undergo yearly authorization by Congress. In fact, the money the Treasury uses to pay the interest is automatically made available by law.

The public debt is calculated daily. After receiving end-of-day reports from about 50 different sources (such as Federal Reserve Bank branches) regarding the number of securities sold and redeemed that day, the Treasury calculates the total public debt outstanding.

The total debt amount is released the following morning. It represents the total marketable and nonmarketable principal amount of securities outstanding (i.e., not including interest).

What Happens If the U.S. Defaults on Its Debt?

Given the recent history of last-minute negotiations to stave off the Treasury breaking past congressionally imposed debt ceilings and into technical default on the U.S. debt, it’s worth reviewing what the effects would be.

Without beating around the bush, it would be a self-imposed catastrophe that would be hard to compare in the annals of disastrous fiscal mismanagement. A U.S. default would be unprecedented, with consequences severe and far-reaching for each American, as well as the national and global economy.

Should the government fail to make interest or principal payments on its debt, it would shake the foundations of the global financial system, which relies on U.S. Treasury securities as a risk-free benchmark. Take that away, and we would be in an economic world that hasn’t been seen in many decades.

The immediate effects of a default would likely include the following:

1. Market turmoil: Stock markets could plummet, and interest rates could spike across various types of loans.
2. Credit rating downgrade: The U.S. credit rating would likely be downgraded, increasing borrowing costs for the government, businesses, and consumers.
3. Global economic ripple effects: As the world’s largest economy and issuer of the primary reserve currency, a U.S. default could trigger a global financial crisis.

However, even before an actual default, if the U.S. reaches its debt ceiling and can’t borrow more, the government would face difficult choices about which obligations to meet. As then-Treasury Secretary Janet Yellen noted during one of the debt ceiling dramas, “Failure to pay Social Security or other benefits on time would have obvious political ramifications. … Every Social Security beneficiary, every family receiving a Child Tax Credit, every military family waiting for a paycheck or small business owners receiving a federal loan … [would be] at risk.”

For these reasons, Congress has always acted to raise or suspend the debt ceiling before a default occurs. So, the full consequences of a U.S. debt default remain theoretical. However, even the threat of default can cause market uncertainty and economic stress, though some think the artificiality of the default—it’s not as if the U.S. would really exhaust its ability to pay its debts—would make it less harmful than typically thought. Nevertheless, no one thinks it’s worth testing this theory.

What Is the Current U.S. National Debt?

As of Jan. 30, 2025, the U.S. national debt is $36.22 trillion.

If Households Have to Pay Off Their Debts, Why Is the U.S. Government Different?

The idea that a government should manage its finances like a household is an example of the composition fallacy: assuming that what’s true for a part is true for the whole. While households must eventually pay all their bills or face bankruptcy, the same doesn’t apply to the U.S. government for several reasons. Unlike households, the government has the power to print money and set monetary policy through the Federal Reserve. It can also raise taxes or adjust spending to manage its debt.

In addition, the government has an indefinite life span and can continually refinance its debt, often at favorable rates because of its creditworthiness. Lastly, U.S. government debt plays a crucial role in the broader economy that household debt doesn’t.

What Is an Example of National Debt?

One of the most common examples of the national debt is government bonds. Government bonds are issued by the governments of nations to raise revenue for many expenses that governments incur, such as infrastructure costs, military spending, and salaries for government employees.

How Can I Buy U.S. Government Debt?

The best way to buy Treasury securities is directly from the Treasury’s website, TreasuryDirect.gov. Treasury securities are also available for purchase through most banks and brokers.

The Bottom Line

The debt is a U.S. government liability, and the Bureau of the Fiscal Service (formerly the Bureau of Public Debt) handles the technical aspects of its financing. The only way for the government to reduce debt is to take measures to ensure that revenue raised from federal taxes is higher than the federal budget’s expenditures.

Both the federal budget and the federal debt ceiling must be approved by Congress. U.S. federal debt is considered one of the safest investments in the world. Defaulting on the federal debt would impact the credit rating of the U.S. and decrease the perceived stability of U.S. Treasury bonds.

Depending on the circumstances at the time of budget formulation, running a deficit may be the country’s only choice. The size of a deficit reflects policy choices on tax revenue, federal spending, and setting the debt ceiling.

Complicated FTC rules can create consumer confusion

Reviewed by Erika Rasure

Fulfilling a major campaign promise, President Joe Biden signed a Made in America executive order Monday, Jan. 25, 2021, designed to increase the amount of federal spending on products made by American companies.

A statement, released by the White House prior to the signing said, “With this order, President Biden is ensuring that when the federal government spends taxpayer dollars, they are spent on American-made goods by American workers and with American-made component parts.”

Key Takeaways

• President Joe Biden’s executive order requiring government agencies to “buy American” is designed to promote and help American companies and workers.
• The definition of Made in America, under the Federal Trade Commission, is subject to interpretation, which could make the president’s executive order difficult to enforce.
• “Unqualified Made in America” means produced or assembled in the United States with all or nearly all domestic materials.
• A looser interpretation called “qualified Made in America” allows the inclusion of more foreign materials.
• Any product whose country of origin is not the United States cannot be classified as Made in America, no matter where the materials came from.
• Policing and enforcement of Made in America laws falls to the FTC in response to complaints from the public.

A ‘Buy American’ Executive Order

President Biden’s executive order, titled “Ensuring the Future Is Made in All of America by All of America’s Workers,” imposes rules designed to force government agencies to increase the purchasing of products made in the U.S. instead of overseas. It’s a move toward fulfilling Biden’s Buy American campaign pledge, which he hopes will strengthen domestic manufacturing.

The premise of the order, stated in section 1, is simple: “The United States Government should, whenever possible, procure goods, products, materials, and services from sources that will help American businesses compete in strategic industries and help America’s workers thrive.”

To achieve this the order includes directives to:

• Establish a Made in America Office with a director appointed by the director of the Office of Management and Budget (OMB).
• Tighten government rules and practices, including the waiver process, to make it harder for federal agencies to purchase imported products.
• Promote strict enforcement of the Buy American Act of 1933.
• Ensure that small and medium-sized businesses will have better access to information needed to bid on government contracts. 
• Promote an accountable and transparent procurement policy.

What Is ‘Made in America’?

The Federal Trade Commission (FTC), charged with preventing deception and ensuring fairness in the American marketplace, is responsible for defining “Made in America” or “Made in the USA” and enforcing that standard when it comes to products that claim U.S. origin. Guidelines and rules are laid out in a 40-page FTC publication titled Complying With the Made in the USA Standard.

There are two types of Made in America claims, unqualified and qualified. Unqualified refers to a claim that the product is “all or virtually all” made in the U.S. A qualified claim acknowledges that the product is U.S. made, but not entirely of domestic origin.

Unqualified ‘Made in America’ Claims

An unqualified claim means the manufacturer is purporting that the product is “all or virtually all Made in USA,” meaning the 50 states, the District of Columbia, and all U.S. territories or possessions. Nailing down a precise meaning for ‘all or virtually all’ is where things get tricky.

The FTC further defines the standard to say:

• All significant parts and processing that go into the product must be of U.S. origin.
• There should be no or negligible foreign content.
• The manufacturer needs “competent” and “reliable” evidence to back up the claim.
• Final assembly or processing must take place in the U.S.

Other factors the FTC takes into consideration include:

• How much of the product’s total manufacturing costs, including cost of goods sold or inventory costs of finished products, involve U.S. parts and processing
• How far removed any foreign content is from the finished product

Qualified ‘Made in America’ Claims

A qualified “Made in America” claim must include an additional descriptive element or elements that make it clear the product is not entirely Made in America using only American-made components.

The qualified standard can include the phrase “Made in America,” “Made in USA,” or “Assembled in the USA,” as long as a distinction is made between this product and one that is “all or virtually all” made in the United States. For example:

• Made in the USA of U.S. and imported parts
• Assembled in the USA from materials imported from Mexico
• Made in the USA with 60% U.S. content

As with an unqualified claim of origin, a qualified claim must be truthful. The ultimate deciding factor is whether the claim is deceptive.

Important

If a product’s country of origin is other than the United States, that product cannot be promoted or advertised as “Made in America.”

‘Country of Origin’ Legislation

Any attempt to label certain products “Made in USA” may be impacted by laws that apply to those products. These laws, known as country of origin laws, impose another check on manufacturers or retailers who may try to circumvent the rules. If the country of origin is other than the United States, the product cannot, by definition, be made in America.

The Tariff Act of 1930, Section 304 requires that “unless excepted, every article of foreign origin (or its container) imported into the U.S. shall be marked with its country of origin.”

The Textile Fiber Products Identification Act requires a “Made in USA” label on clothing manufactured in the U.S. with fabric made in the U.S. even if the materials used to create the fabric are of foreign origin.

The Wool Products Labeling Act requires wool products to be accurately labeled with fiber content and country of origin.

The Fur Products Labeling Act requires manufacturers and retailers to label fur products with the name of the animal, manufacturer’s name, and country of origin.

The American Automobile Labeling Act requires that every automobile manufactured on or after Oct. 1, 1994, and sold in the U.S. is labeled to disclose:

• The percentage of U.S./Canadian equipment (parts)
• The names of any countries other than the U.S. and Canada that individually contribute 15% or more of equipment content, and the percent of content for each such country (maximum of two countries)
• The final assembly point by city and state (where appropriate), and country
• The country of origin of the engine and transmission
• A statement explaining that parts content does not include final assembly (except the engine and transmission), distribution, or other non-parts costs

The Buy American Act of 1933 requires that a product be manufactured in the U.S. and contain more than 50% U.S. parts to be considered “Made in USA” for government procurement purposes.

How to Spot a Fake

Rooting out fakes is not easy, given the somewhat vague FTC labeling requirements. Here are some things to look for that might tip you off:

Country of origin is required to be posted conspicuously on any product that originates outside the United States. If the country of origin is not the United States, the product is not made in the USA.

Flag stickers are commonly used to distract consumers. A flag sticker or large USA label is not an indication the product is American made.

Spelling or grammar mistakes on the labels are indicative of foreign manufacture. They might be missed by non-English-speaking workers.

Made in America is not as convincing as Made in the USA. Technically, Made in America could include Canada or Mexico.

Check the websites of companies or products about which you’re not sure. There may be information in the About Us section that explains where the products are actually made.

Bar codes are not helpful indicators. Viral messages and posts saying you can tell the country of origin by the bar code are misleading at best. Bar codes do not necessarily indicate the country of origin of the product but rather the country of origin of the bar code.

Warning

Internet messages and emails suggesting you can tell a product’s country of origin from its bar code are misleading. Bar codes only tell you where the bar code came from—not the product.

What to Do If You Suspect a Fake

If you come across a product claiming to be Made in America or Made in the USA and you suspect the claim is bogus, contact the Division of Enforcement, Bureau of Consumer Protection, Federal Trade Commission, Washington, D.C. 20580; (202) 326-2996 or send an e-mail to MUSA@ftc.gov.

If you have specific information about import or export fraud, call Customs’ toll-free Commercial Fraud Hotline, 1-800-ITS-FAKE. This could include knowledge about someone removing a required country of origin label before the product is delivered.

You can also contact your state attorney general and the Better Business Bureau to report a company. Or you can refer your complaint to the National Advertising Division (NAD) of BBB National Programs by emailing nad@bbbnp.org.

What Does a “Made in America” Label Mean?

In order to be sold as “Made in America” or “Made in U.S.,” a product must be manufactured from parts that are “all or virtually all” produced in the U.S., and final assembly must also be completed in the U.S. For that designation, the U.S. includes not only the fifty states and the District of Columbia, but also overseas territories and possessions.

What Does Assembled in USA Mean?

In consumer sales, a product labeled “Assembled in the U.S.A.” is an example of a qualified claim of American origin. Similar phrasings are used for products that use a significant amount of American components but do not meet the standards for an unqualified “Made in America” label. Although the standard is lower than the requirements for a “Made in America” label, manufacturers must nonetheless exercise care and ensure that qualified claims are truthful and substantiated.

Does a “Made in America” Label Avoid Sweatshops?

No. While foreign sweatshops are commonly used as an argument in favor of buying American-made products, there’s no shortage of labor law violations in domestic production. A CBS investigation into Los Angeles garment factories found high incidences of labor law violations, with workers paid as little as $0.05 cents for each article of clothing they completed. On an hourly basis, that meant some workers were earning less than $3 per hour.

The Bottom Line

In manufacturing industries, phrases like “Made in America” or “Made in the U.S.A.,” can sometimes seem difficult to parse, considering how many goods include imported components. The Federal Trade Commission has strict rules about what can be labeled as American-made, and what percentage of foreign components it can include.

Reviewed by Ebony Howard
Fact checked by Michael Rosenston

President Donald Trump signed the Executive Order “Deferring Payroll Tax Obligations in Light of the Ongoing COVID-19 Disaster” during his first term on Aug. 8, 2020. The order allowed employers to defer the employee portion of Social Security payroll taxes for certain individuals in the final four months of 2020. The intention behind the order was to provide additional relief for employees working through the coronavirus pandemic.

The Internal Revenue Service (IRS) issued Notice 2020-65 on Aug. 28, 2020 which provided additional guidance for employers on the implementation of the Executive Order.

According to the Presidential Memorandum, Trump directed “the Secretary of the Treasury to use his authority to defer certain payroll tax obligations with respect to the American workers most in need. This modest, targeted action will put money directly in the pockets of American workers and generate additional incentives for work and employment, right when the money is needed most.”

Key Takeaways

• President Trump’s payroll tax Executive Order allowed employers to defer the employee portion of Social Security taxes for certain individuals in the last four months of 2020.
• The action was taken to forestall hardship during the COVID-19 pandemic.
• The order applied only to the employee portion of Social Security payroll taxes.
• The postponed taxes were those that would have been payable from Sept. 1 through Dec. 31, 2020.
• They had to be paid in 2021, however.

Who Was Covered?

“The deferral shall be made available with respect to any employee the amount of whose wages or compensation, as applicable, payable during any bi-weekly pay period generally is less than $4,000, calculated on a pre-tax basis, or the equivalent amount with respect to other pay periods,” according to the Presidential Memorandum. This equated to an approximate $104,000-a-year salary: $4,000 biweekly * 26 pay periods per year.

IRS Notice 2020-65 further clarified that the determination of total wages was made on a pay-period-by-pay-period basis. This may have disqualified the same employee in certain pay periods based on overtime wages or other bonus pay. The $4,000 threshold was also recalculated as an “equivalent amount with respect to other pay periods” if an employer paid wages on a basis other than biweekly.

Which Taxes Were Deferred?

The Executive Order applied only to the employee portion of Social Security payroll taxes (6.2%).

Employee Medicare payroll taxes (1.45%), employer Medicare payroll taxes, (1.45%) and the employer portion of Social Security payroll taxes (6.2%) weren’t included in the Executive Order. The deferral didn’t apply to the parallel Social Security taxes owed by self-employed individuals via self-employment taxes.

When Was the Effective Date?

The employee portion of Social Security payroll taxes on wages that were paid from Sept. 1 through Dec. 31, 2020 were allowed to be deferred without incurring any penalties, interest, additional amounts, or addition to the tax. Employers who deferred these taxes wouldn’t withhold the funds or pay the taxes to the IRS as typically scheduled.

The deferred taxes were postponed until Jan. 1 to April 30, 2021. Interest, penalties, and additions to tax began “to accrue on May 1, 2021, with respect to any unpaid applicable taxes,” according to the supplemental detail in IRS Notice 2020-65.

Was It Optional or Mandatory?

This guidance was optional for private-sector employers and it was likely that the administrative costs would be a deterrent for many small businesses. It takes time to process changes in a payroll system and there was additional manual tracking required to ensure that specific situations were accounted for correctly.

The federal government, the United States’ largest employer, deferred employees’ portions of their Social Security taxes to provide immediate relief during the pandemic. There was no option to opt out for federal employees. The plan was to implement these deferrals as of the second pay period in September. This included all branches of the military as well as civilian jobs with the federal government.

Important

The Executive Order was written as a deferral. Payroll taxes that were deferred by an employer would be due at a future date.

The deferred taxes from September to December 2020 would be taken out in January through to April 2021, posing specific risks to anyone planning on or forced to change jobs during that time frame. Employer A might have deferred the employee portion of your Social Security taxes. You could run into some issues because the deferred taxes weren’t able to be withheld from your paychecks from January to April 2021 if you left your job in November 2020 and started another job with Employer B in January 2021.

Supplemental IRS Guidance

Notice 2020-65 providing supplemental IRS guidance was issued on Aug. 28, 2020. It was brief and it didn’t answer all the questions that business owners and tax professionals had about implementation.

One of the issues that wasn’t covered was how employers should collect deferred payroll taxes from employees who separated from the company before the end of April 2021 when deferred payroll taxes were to be fully recouped. IRS Notice 2020-65 stated that employers could make arrangements to otherwise collect the taxes from employees if necessary.

Criticism of the Executive Order

Critics of the Executive Order claimed that deferring certain payroll taxes did nothing to help those who were hardest hit by the coronavirus pandemic: individuals who had been furloughed, laid off, or were otherwise unemployed. These individuals didn’t pay payroll taxes so the deferral didn’t affect or benefit them.

The House Committee on Ways and Means stated that the Executive Order does not affect the Social Security Trust Funds, as the taxes are only deferred. The tax wasn’t eliminated so the brief deferral should have no impact on the Social Security Trust Fund.

How Are Social Security Taxes Normally Paid?

Employees and employers are each legally obligated to pay 6.2% of the employee’s wages to Social Security for a total of 12.4%. The employee’s share is withheld from their paychecks and the employer must forward the total of both shares to the government. Self-employed individuals must pay the entire 12.4% because they’re effectively their own employers.

This rate is not expected to change in 2025.

What Is the Social Security Trust Fund?

The U.S. Treasury holds two Social Security accounts, one for Social Security and one for disability insurance. Social Security taxes are placed into the appropriate account and current benefits to those collecting are paid from it. These payments don’t deplete the account or trust fund as long as Social Security taxes continue to be paid in by active workers. The unused balance is reserved for future beneficiaries.

How Much Did the Executive Order Save Workers Per Paycheck?

A worker with annual earnings of $50,000 would be paid approximately $961 per week before taxes were withheld from that income. The Social Security tax rate for the employee’s half is 6.2% so this would work out to almost $60 per paycheck, reducing their take-home pay to about $900 a week. President Trump’s Executive Order saved them this debit but only temporarily. The tax had to be paid later.

The Bottom Line

President Trump signed the “Deferring Payroll Tax Obligations in Light of the Ongoing COVID-19 Disaster” in August 2020 during his first term in office. The intention was to give American workers and employers a bit of a financial break while they were dealing with the fallout of the pandemic. They were permitted to postpone payment of their Social Security taxes from the last quarter of 2020 to the first quarter of 2021.

These taxes came due eventually, however, and it ultimately caused hardship for some.

The legacy and lessons of Apple’s co-founder

Reviewed by Margaret James

Apple is one of the most popular and powerful companies in the world. Not only that, it revolutionized how we communicate and more. Starting by creating computers, Apple surged to the forefront of the most important companies in history with the creation of the iPod, the iPhone, and the iPad. All of this success stemmed from the mind of its co-founder, Steve Jobs.

On October 5, 2011, Steve Jobs passed away at the age of 56. He had just left the CEO post at Apple, the company he co-founded, and returned to for a second period as its head. Jobs was an entrepreneur through and through, and the story of his rise is the story of Apple as a company, along with some very interesting twists.

In this article, we’ll look at the career of Steve Jobs and the company he founded, as well as some of the lessons Apple offers for potential entrepreneurs.

The fact that Apple was the first company to surpass the $1 trillion market capitalization mark, and later the $2 trillion and $3 trillion marks, is in no small part connected to the legacy and lessons learned from Steve Jobs.

Key Takeaways

• Steve Jobs and Steve Wozniak co-founded Apple in 1976, introducing first the Apple I and then the Apple II.
• Apple went public in 1980 with Jobs the blazing visionary and Wozniak the shy genius executing his vision.
• Executive John Scully was added in 1983; in 1985, Apple’s board of directors ousted the combative Jobs in favor of Scully.
• Away from Apple, Jobs invested in and developed animation producer Pixar and then founded NeXT to create high-end computers; NeXT eventually led him back to Apple.
• Jobs returned to Apple in the late 1990s and spent the years until his death in 2011 revamping the company, introducing the iPod, iPhone, and iPad, and transforming technology and communication in the process.

From Blue Boxes to Apple

Steve Jobs got his start in business with another Steve, Steve Wozniak, building the blue boxes phone phreakers used to make free calls across the nation.

The two were members of the HomeBrew Computer Club, where they quickly became enamored with kit computers and left the blue boxes behind. Founding Apple in 1976, the next product the two sold was the Apple I, which was a kit for building a PC. In order to do anything with it, the customer needed to add their own monitor and keyboard.

With Wozniak doing most of the building and Jobs handling the sales, the two made enough money off the hobbyist market to invest in the Apple II. It was the Apple II that made the company, which was incorporated in 1977. Jobs and Wozniak created enough interest in their new product to attract venture capital. This meant they were in the big leagues and the company would continue to grow.

The Roller Coaster Ride Begins

By 1979, Apple was making over $5 million in net income solely on the strength of the Apple II. The Apple II wasn’t state of the art, but it did allow computer enthusiasts to create and sell their own programs. Among these user-generated programs was VisiCalc, a type of proto-Excel that represented the first software with business applications.

Although Apple did not profit directly from these programs, they did see more interest as the uses for the Apple II broadened. This model of allowing users to create their own programs and sell them would reappear in the app market of the future but with a much tighter business strategy around it.

By the time Apple went public in 1980, the dynamic of the company was more or less set. Steve Jobs was the fiery visionary, with an intense and often combative management style, and Steve Wozniak was the quiet genius who made the vision work.

Apple’s board of directors wasn’t too fond of such a power imbalance in the company, however. Jobs and the board agreed to add John Sculley to the executive team in 1983. In 1985, the board ousted Jobs in favor of Sculley.

$10.2 Billion

Steve Jobs’ net worth at the time of his death in 2011.

The Gap Years

Steve Jobs was rich and unemployed. Although he wasn’t working at Apple, he was far from idle. During this time, from 1985 to 1996, Jobs was involved in two big deals; the first of which was an investment.

In 1986, Jobs purchased a controlling stake in a company called Pixar from George Lucas. The company was struggling, but its eventual success in digital animation led to an initial public offering (IPO) that earned Jobs around $1 billion.

The second was a return to his old obsession with computers, founding NeXT to create high-end computers. These were expensive machines with an operating system representing the best attempt yet at making the power of UNIX fit into a graphical user interface. When Tim Berners-Lee created the World Wide Web, he did so using a NeXT machine.

Of these two deals, NeXT proved the most important, as it turned out Apple was looking to replace its operating system. Apple bought NeXT in 1996 for its operating system, bringing Steve Jobs back to the first company he founded.

Getting Apple Back on Track

When Jobs returned, the company wasn’t in a good place. Apple had begun to flounder as cheap PCs running Windows flooded the market. Jobs found himself in the driver’s seat again and took some drastic steps to turn around Apple’s decline.

The company asked for and received a $150 million investment from Bill Gates. Jobs used the money to ramp up advertising and highlight the products Apple already offered while choking off research and development (R&D) money in non-producing areas.

The NeXT operating system was used to create the iMac, Apple’s first hit PC in a long time. Jobs followed this up with a list of successes from the iPod in 2001 to the iPad in 2010.

The years between saw Apple dominate the smartphone market with the iPhone, open up an e-commerce store with iTunes, and launch branded retail outlets called, what else, the Apple Store. When Jobs stepped down as CEO, Apple was scrapping with Exxon for the world’s largest market cap.

How Much of Apple Did Steve Jobs Own?

Surprisingly, at the time of his death, Steve Jobs only owned 0.24% of Apple. The bulk of his wealth came from the shares he owned in Disney, which was approximately 7% of the company.

Why Did Steve Jobs Create Apple?

There are a few reasons why Steve Jobs created Apple. One being his entrepreneurial spirit, another being his interest in computers, and also his and Wozniak’s vision of making computers accessible to the larger public by making them small enough to fit into homes and offices.

How Long Did Steve Jobs Leave Apple?

Steve Jobs was fired from Apple in 1985 and was brought back in 1996 when his company, NeXT, was purchased by Apple. This means he was gone from Apple for 11 years.

The Bottom Line

It’s impossible to sum up Jobs’s career in a single article, but a few lessons stick out. First, innovation counts for a lot, but innovative products fail without proper marketing. Second, there are no straight paths to success.

Jobs did get wealthy early on, but he would be a footnote today if he hadn’t returned to Apple in the 90s. At one point, Jobs was kicked out of the company he helped create for being hard to work with. Rather than change, he bided his time, then took over again, and this time his attitude was seen as part of his genius.

There is much more to be learned from the life of Steve Jobs, as there is in the life of every successful entrepreneur. The sheer hubris of the entrepreneurial spirit, the idea that you can do something bigger and better than it has ever been done before, always bears watching and studying, whether to imitate or just to marvel at.

Growth stocks can be a good way to build wealth. These are some of the best growth stocks for February 2025

Growth stocks are companies that investors expect to outperform industry peers or the broader market in earnings, revenue, and share price increases. Unlike more established firms, which may return these profits to shareholders in the form of dividends or use them to buy back stock, growth stocks tend to reinvest these gains in expansion, research, development, and similar areas. However, although growth stocks may generate sizable returns for investors, they also carry a higher degree of risk as a result of market volatility. Growth is one key factor investors consider, along with others such as value and momentum.

Below, we explore the best growth stocks to watch this month and offer a detailed explanation of our methodology for compiling this list. All data are current as of Jan. 30, 2025.

Growth Stocks in the Current Market Environment

In general, growth stocks tend to perform better in periods of economic expansion when the cost of borrowing is low. Though inflation is lower than it has been in recent years, higher interest rates and slowing economic growth mean that the current environment may not be ideal for these firms.

That said, not all growth stocks benefit from the same market conditions. For example, companies that enjoy a particular competitive edge within their industries or a dominant position in the market may be more likely to grow regardless of the macroeconomic environment. Similarly, firms in a hot industry that is experiencing significant growth may also outperform independently of other factors. A recent example has been technology stocks focused on AI, although an industry sell-off following the unveiling of a competitive AI platform by Chinese firm DeepSeek in January 2025 is a reminder that these conditions may change suddenly.

Health technology and biotech firms are often present in lists of top growth stocks thanks to their potential for massive breakouts following strong data about a new product or launches of a blockbuster drug or piece of equipment. Despite turbulence due to inflation and a slowdown in product launches, this sector may still be poised for significant growth due to an aging population and increased health care spending, with national health expenditures climbing to $4.9 trillion in 2023.

How We Chose the Best Growth Stocks

In our growth stocks screen, we focused on companies listed on either the Nasdaq or the New York Stock Exchange. To ensure that the firms we screened are well-established, we excluded stocks trading under $5 per share, those with a market capitalization under $300 million, and any with a daily trading volume under 100,000. Additionally, companies with growth in excess of 1,000% were excluded as outliers.

From this list, we selected the stocks with the highest 30-day returns to complete our ranking. In many cases, companies with a strong recent history of outperformance relative to industry peers or the broader market have built momentum thanks to positive company or external news, favorable market sentiment, or appealing technicals. If these conditions remain the same, these companies may experience continued growth in the future, though past performance is not an indicator of future returns.

How to Invest Wisely in Growth Stocks

Besides 30-day return, there are many key financial ratios that are helpful to use to identify potential growth stock investments. Using multiple metrics provides a fuller picture of the benefits different candidates offer, their financial positions, and how the market views them with respect to potential future gains.

Earnings Per Share (EPS) Growth

Earnings per share (EPS) growth is a measure of the percentage increase in a company’s earnings per share over a given period, typically year-over-year. Positive or accelerating EPS growth indicates underlying financial health and suggests the potential for future returns.

Price-to-Earnings (P/E) Ratio

Price-to-earnings (P/E) ratio is a comparison of a company’s stock price and its EPS. Higher P/E ratios suggest that investors are bullish about a company but may also signal that it is overvalued. On the other hand, a low P/E ratio may mean that a stock is undervalued relative to the industry or the broader market, or that investors are not especially optimistic about its prospects.

Price-to-Book (P/B) Ratio

Price-to-book (P/B) ratio is a measure of a firm’s market value against its book value, or the net value of the assets on its balance sheet. Some contrarian investors believe that a low P/B ratio indicates an undervalued stock that may have growth potential. However, P/B ratios can vary significantly from industry to industry, so it’s important to take stock of how a particular company compares with its peers.

How to Find Growth Stocks

Investors don’t have one single method for identifying promising growth stocks. Factors such as financial health, management, returns, and market position relative to industry peers are all helpful to consider.

Looking at a prospective growth stock investment, you should consider the company’s revenue, EPS, and profit margin history. Companies with a consistent record of increasing earnings may be likely to continue to grow into the future. It’s best to avoid stocks paying a dividend if you’re interested in growth potential—companies paying a dividend are opting to not reinvest profits back toward investment in company growth.

Identifying firms with a relative industry advantage over their peers depends upon the specific sector and industry. For instance, some industries—like health care—may be quite opaque to investors without special expertise. In other cases, it may be easier to identify a sustainable competitive edge in the form of a unique product, technology, or service that a company offers. An example of a competitive edge is NVIDIA Corp.’s (NVDA) data center processors, widely viewed as advantageous over rival products thanks to their system-scale integration capabilities.

A company’s management and corporate governance can also be helpful clues to its growth potential. How have the firm’s leaders navigated challenges and taken advantage of opportunities in the past? Looking to historical earnings reports can show whether a firm has been able to meet its goals, including in the area of forecasted EPS and revenue performance.

Lastly, share price performance can be an indicator of future growth potential. Look for companies that have higher stock price gains than their industry or the broader market. When making a comparison, it’s helpful to benchmark a firm’s performance against the Russell 1000 Index. As of Jan. 30, 2025, the Russell 1000 had returned 2.6% in the last 30 days. The stocks in our screen above have all significantly outperformed this level, potentially suggesting the prospect of future growth as well. A metric like compound annual growth rate (CAGR) can also help to compare two companies more directly.

Are These the Best Growth Stocks?

It is difficult to assess which growth stocks are the “best.” In reality, growth stocks in general—and these companies in particular—may not be suitable for each type of investor. Growth stocks may exhibit a higher degree of volatility than some more established, larger peers. Because many growth stocks are companies making aggressive maneuvers to expand operations, and because these moves may or may not succeed, investing in growth stocks can carry certain risks. Further, it can be difficult to predict which stocks exhibiting growth characteristics, such as the metrics identified above, will successfully generate outsized returns.

Investors interested in growth stocks should keep in mind that recent performance history is not a guarantee of future returns.

The comments, opinions, and analyses expressed on Investopedia are for informational purposes only. Read our warranty and liability disclaimer for more info.

As of the date this article was written, the author does not own any of the above securities.

The CARES Act and new CAA Act temporarily extended unemployment benefits

Reviewed by Somer Anderson
Fact checked by Kirsten Rohrs Schmitt

The U.S. Department of Labor’s unemployment insurance (UI) program provides cash benefits to eligible workers who become unemployed through no fault of their own. The program is administered by individual states, but the law itself is a federal one.

Benefits, which are funded by payroll taxes, are paid weekly by individual state governments to those who qualify. But there are specific regulations about which unemployed workers qualify for this type of insurance.

The federal government made changes to the eligibility for unemployment benefits because of the outbreak of the COVID-19 virus. They were initially put in place after the Coronavirus Aid, Relief, and Economic Security (CARES) Act was signed into law in March 2020. The benefits were extended with the passing of the Consolidated Appropriations Act, 2021 (CAA) and again after President Joe Biden was elected with the American Rescue Plan Act in 2021. Many of these benefits expired on Sept. 5, 2021.

Here’s a look at who does and doesn’t qualify for unemployment insurance under normal circumstances and how the rules were amended during the coronavirus pandemic in 2020 and 2021.

Key Takeaways

• You can’t collect unemployment benefits under normal circumstances if you quit your job or if you’re self-employed.
• To collect UI benefits, you must file a claim with the UI program in the state where you worked.
• The CARES Act expanded unemployment insurance benefits through three programs to help workers affected by the 2020 novel coronavirus pandemic.
• The Pandemic Unemployment Assistance (PUA) program extended benefits to the self-employed, freelancers, and independent contractors.
• People who left their jobs due to a risk of COVID-19 exposure or infection or to care for a family member may also qualify for UI benefits.

Who Qualifies for Unemployment?

While each state sets its own guidelines for UI benefits eligibility, you usually qualify if you:

• Are unemployed through no fault of your own. In most states, this means you left your last job because of a lack of available work.
• Meet work and wage requirements. You must meet your state’s requirements for time worked or wages earned during an established base period.
• Meet additional state requirements.

Important

To find details about your state’s unemployment insurance program, visit CareerOneStop, a job resource website sponsored by the U.S. Department of Labor.

How Do I Apply for Unemployment?

To collect UI benefits, you must file a claim with the UI program in the state where you worked. Depending on your state, you may be able to file a claim in person, by telephone, or online. When you apply, you need to provide certain information, including your Social Security number and the addresses and dates of your previous job.

In general, you should contact your state’s UI program as soon as possible after you become unemployed and file your claim in the state where you worked. However, if you worked in multiple states or in a different state than where you now live, contact the state UI agency where you reside for guidance on how to file your claim with other states.

Who Doesn’t Qualify for Unemployment?

Of course, there are other ways to get disqualified, depending on where you live. In most states, you can’t get UI if you:

• Are dismissed for workplace misconduct. What constitutes misconduct varies by state, but in general, intentionally violating safety rules, theft, embezzlement, violence, and other criminal activities disqualify you from receiving benefits. A failed drug test may also constitute misconduct.
• Are dismissed for misconduct outside of work. Some states don’t allow employers to terminate employees for misconduct outside of work, but some do. If so, it may also disqualify you from collecting UI benefits. 
• Turn down a suitable job. If you pass on a job that’s comparable to the one you lost, you will probably no longer qualify for benefits. Your state may consider factors like pay, your training and background, and safety when it determines what constitutes a suitable job.
• Don’t look for work. You must report to your state’s UI program that you’ve applied to a certain number of jobs each week. If you don’t report this information on time, or if you stop looking for a job, you may lose your benefits.
• Are unable to work. If you’re on maternity leave, dealing with a family emergency, temporarily disabled, or otherwise unable to work, you may lose your eligibility. However, in some states, you may qualify for benefits if you quit a job for medical reasons or to care for an ill family member.
• Receive severance pay. In some states, you can’t collect UI benefits if you also have severance pay. If you get eight weeks of severance pay, for instance, your UI eligibility starts nine weeks after you lost your job.
• Commit fraud. If you don’t report income or a new job, you are disqualified from receiving benefits. You may even have to repay your benefits or go to jail for fraud.

COVID-19 Unemployment Relief

The unemployment rate increased to its highest level since data was first collected when the coronavirus pandemic first hit the United States, peaking at 14.8% in April 2020 before dropping down to 6.7% in December 2020. It affected almost every industry and individual across the country, regardless of their age, gender, or employment status.

The federal government took steps to alleviate the burden on unemployed individuals, especially those who wouldn’t otherwise qualify for unemployment benefits. On March 27, 2020, President Donald Trump signed the $2 trillion coronavirus emergency stimulus package, referred to as the CARES Act. It temporarily expanded UI benefits through three programs, one of which allowed certain workers normally left out to collect benefits.

The CARES Act created the Federal Pandemic Unemployment Compensation (FPUC), which provided an additional $600 benefit each week to the uninsured. That benefit expired on July 31, 2020. The passage of the Consolidated Appropriations Act, signed by President Trump on Dec. 27, 2020, included new funding for the FPUC at a lower rate of $300 per week, through March 14, 2021.

President Joe Biden extended these benefits when he signed the American Rescue Plan Act on March 11, 2021. Additional provisions were put into place, allowing unemployed individuals to continue receiving benefits. All three of these programs expired on Sept. 5, 2021.

Note

Workers are not eligible for PUA benefits if they can telework with pay. Unemployed individuals also must be authorized to work to be eligible for PUA, so undocumented workers will not qualify.

Pandemic Unemployment Assistance (PUA)

Under normal circumstances, you can’t collect unemployment benefits if you quit your job or if you’re self-employed. This includes freelancers, independent contractors, and gig workers.

The program temporarily extended unemployment benefits to certain workers affected by the COVID-19 pandemic and eligible self-employed workers through Sept. 5, 2021. Workers who qualified included:

• Freelancers and independent contractors
• Workers seeking part-time work
• Workers without enough work history to qualify for state unemployment insurance benefits
• Workers who otherwise wouldn’t qualify for benefits under state or federal law 

Individuals were required to provide self-certification they were able to work and were available for work. They were also required to prove they were unemployed, partially employed, or unable or unavailable to work due to one of these COVID-19-related situations:

• They were diagnosed with COVID-19 or had symptoms and were trying to get diagnosed.
• A member of the individual’s household was diagnosed with COVID-19.
• The individual provided care for someone diagnosed with COVID-19.
• The individual provided care for a child or other household member who couldn’t attend school or a care facility because it was closed due to COVID-19.
• The individual was quarantined or was advised by a health care provider to self-quarantine.
• The individual was scheduled to start a job, didn’t have one, or couldn’t reach it due to COVID-19.
• The individual became the primary earner because the head of the household died as a result of COVID-19.
• The individual had to quit their job as a direct result of COVID-19.
• The individual’s place of employment closed as a direct result of COVID-19.
• The individual met other criteria set forth by the labor secretary.

Benefit amounts were calculated based on previous earnings, using a formula from the Disaster Unemployment Assistance program under the Stafford Act. The PUA had a minimum benefit equal to 50% of the state’s average weekly UI benefit (about $190 per week).

Other Unemployment Programs

The CARES Act, and the Consolidated Appropriations Act, the American Rescue Plan Act extended unemployment benefits through two other initiatives: the FPUC program and the Pandemic Emergency Unemployment Compensation (PEUC) program:

Keep in mind that the FPUC and the PEUC programs both expired on Sept. 5, 2021, along with the PUA.

What Disqualifies You From Unemployment?

Each state has its own rules for unemployment. Generally, in order to be eligible for unemployment, a worker must lose their job through no fault of their own, such as through involuntary termination or layoffs. They must also meet certain requirements for income and length of employment, which vary by state. Voluntarily quitting, absenteeism, or insubordination may disqualify a worker from receiving unemployment benefits.

What Is Constructive Dismissal?

Constructive dismissal occurs when an employee resigns due to unacceptable working conditions or a breach by the employer. For example, an employee who quits because the employer did not pay them on time, provided an unsafe working environment, or did not schedule them for upcoming shifts could be considered to have been constructively terminated, even though the employer did not formally fire them. Unlike other types of resignation, labor agencies will typically grant unemployment benefits to victims of constructive dismissal.

How Do Employers Pay for Unemployment?

Employers pay for unemployment insurance through payroll taxes, which are used to fund state unemployment programs. The state tax rate is typically based on the number of people a company employs, how much they’ve paid into the program, and how many employees have filed for benefits. Although a single employee is unlikely to make a big difference, a large number of unemployment claims could raise a company’s effective tax rate. When a former employee makes a claim, employers have the opportunity to dispute the claim and argue that the employee does not qualify for benefits.

The Bottom Line

Unemployment insurance represents one of the basic benefits of the modern welfare state. In exchange for a small tax deducted from one’s weekly paycheck, workers are granted the temporary assurance that they will continue receiving an income even if they lose their jobs. The benefits and requirements vary from state to state, so it is important to understand the exact rules to qualify for unemployment.