CBO's February 2026 Budget And Economic Outlook-Wed, 02/11/2026 - 12:00 | Committee For A...

The Congressional Budget Office (CBO) released its February 2026 Budget and Economic Outlook today, updating its January 2025 baseline to account for the One Big Beautiful Bill Act (OBBBA), tariffs, changes in immigration, recent trends in the economy, and other factors.

CBO's latest projections show: With debt approaching record levels, interest costs exploding, trust funds approaching insolvency, and deficits expected to remain more than twice as large as the oft-discussed 3% of GDP target , lawmakers should come together to enact significant deficit reduction. Debt held by the public is currently around 100% of GDP, roughly double the 50-year historical average.

Under CBO's baseline, debt will surpass the 106% of GDP record set after World War II by FY 2030 – just four years from now – and will continue to grow to 120% of GDP by 2036. In dollar terms, debt held by the public is currently almost $31 trillion and will rise to above $36 trillion in 2028, $47 trillion in 2033, and over $56 trillion in 2036. Actual debt could grow even faster than CBO's baseline projections.

For example, we estimate debt would rise to 131% of GDP by 2036, as opposed to 120%, if the Supreme Court rules that many of the recently-imposed tariffs are illegal , lawmakers make permanent the temporary provisions in OBBBA , and enhanced Affordable Care Act health insurance subsidies are revived on a permanent basis.

High and rising debt levels present significant risks and threats to the economy and the nation as a whole. This includes slower economic growth, higher interest rates , increased inflationary pressure, heightened national security risks, reduced fiscal space, growing debt service payments, and greater risk of a fiscal crisis . Other references and insights: Check here

Nine States Implement Income Tax Cuts For 2025, Increasing Take-Home Pay For Millions

Key Takeaways:

• Nine states have implemented income tax cuts for 2025, increasing take-home pay for millions of residents.
• Many state legislatures are "decoupling" from federal tax provisions, creating a divergence between national and local filing requirements.
• A legislative dispute in Washington, D.C. could force a months-long suspension of the current filing season if federal intervention proceeds.
• Diligent record-keeping and awareness of local audit triggers remain the most effective tools for financial peace of mind.

What if the labyrinthine task of filing your taxes was not merely a burden of citizenship, but a tangible opportunity to witness the benefits of local governance in your own bank account?

As spring approaches, a quiet revolution is unfolding across the American landscape. While the federal government commands the headlines, the real shifts in personal prosperity are happening closer to home. Nine states have moved to reduce income tax rates for 2025. These legislatures are choosing to return resources to the hands of the people. It is a moment of fiscal empowerment. Families gain breathing room.

The Complexity of Autonomy

Divergence brings challenges. While federal law shifted following the major tax and spending legislation signed on July 4, many states have chosen a different path by refusing to conform to these new national provisions. This act of decoupling allows states to preserve their own social safety nets and infrastructure priorities, yet it demands a higher level of precision from the individual filer navigating these conflicting rulebooks. Accuracy saves money. Because states maintain robust audit mechanisms similar to the IRS, the margin for error has narrowed significantly for those attempting to reconcile state obligations with shifting federal standards.

The Brinkmanship in the District

Nowhere is the tension between local intent and federal oversight more palpable than in Washington, D.C. The city council recently passed emergency measures to distance the local tax code from federal changes regarding senior deductions and tip-based income. However, the halls of Congress are vibrating with a different energy. On February 4, the House moved to overturn these local provisions, sending the matter to a Senate that may act within days. This is a precarious friction. Glenn Lee, the District’s Chief Financial Officer, has issued a stark warning that a mid-season legislative reversal would necessitate a total suspension of the filing system for months to update complex digital infrastructure. Clarity is essential for stability.

The Path to Compliance

Vigilance serves the taxpayer. Ken Rios, a tax principal at Kaufman Rossin, notes that states are increasingly proficient at identifying discrepancies through mail-based notifications and data-matching algorithms. Common pitfalls like math errors or incomplete forms can be avoided through a methodical approach to the unique statutes of one’s home state. By embracing the nuances of local law and viewing the filing process as an act of civic precision, Americans can navigate this complex season with confidence. Preparation builds resilience. The reward for this diligence is the preservation of personal wealth and the continued support of the communities we call home.

Regional Economic Revitalization

Prosperity grows locally. States such as Georgia and Iowa are leading this transition toward lower tax burdens by accelerating previously scheduled rate reductions to stimulate local investment and enhance consumer purchasing power. While national discourse often centers on fiscal deficits, these state-level surpluses are being transformed into direct savings for residents who are seeing their effective tax rates drop for the third consecutive year. Efficiency pays dividends.

The Architecture of Fiscal Independence

Freedom requires attention. The choice to decouple from federal standards allows a state to prioritize its specific economic engines, such as agricultural credits in the Midwest or technology incentives in the coastal corridors, regardless of shifting moods in the federal legislature. This independence fosters a laboratory of democracy where successful fiscal experiments in one jurisdiction can serve as a blueprint for neighbors seeking to improve their own citizens' quality of life. Knowledge secures assets.

Technological Adaptation in the District

Patience preserves order. The resolution of the D.C. impasse rests upon the Senate's willingness to prioritize administrative stability over ideological alignment with House-led reversals of local municipal decisions. Modern software platforms are currently integrating these state-specific nuances to ensure that the friction in Washington, D.C. does not prevent taxpayers from claiming every credit to which they are legally entitled. Innovation scales solutions.

People Also Ask

Which states are implementing income tax cuts for the 2025 tax year?
Georgia, Idaho, Iowa, Kentucky, Mississippi, Missouri, Nebraska, North Carolina, and South Carolina are the primary jurisdictions moving toward lower individual income tax rates. These adjustments are designed to increase the competitive advantage of each state while providing immediate financial relief to workers. Savings empower households.

What does "decoupling" mean for the average taxpayer?
Decoupling occurs when a state legislature chooses not to follow specific changes made to the federal Internal Revenue Code, resulting in different rules for state and federal returns. This requires taxpayers to make specific adjustments on their state forms to account for items like depreciation, standard deductions, or business expense limits that may no longer align with federal law. Detail prevents audits.

How will the legislative dispute in Washington, D.C. affect tax refunds?
If Congress successfully overturns the District's local tax laws mid-season, the Chief Financial Officer may be forced to halt all processing to reprogram the digital filing systems, potentially delaying refunds by several months. Residents are encouraged to monitor Senate proceedings closely as the outcome will determine whether the current filing software remains valid or requires a significant technical overhaul. Stability ensures timing.

Why is record-keeping more important during periods of tax law divergence?
As states diverge from federal standards, the likelihood of automated data-matching errors increases, making it vital for individuals to maintain clear documentation of every deduction and credit claimed. Accurate records serve as the primary defense against inquiries from state revenue departments that are increasingly using sophisticated algorithms to flag inconsistencies between state and federal filings. Preparation builds confidence.

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Goldman Sachs Deploys Anthropic's Claude AI To Automate Trade Accounting And Onboarding

Synthesized Wrap-up: Goldman Sachs is deploying Anthropic’s Claude AI to refine trade accounting and onboarding, moving beyond rigid rules-based automation to solve the high-volume exceptions that traditionally require human intervention.

The Machine in the Engine Room

Goldman Sachs is pivotally shifting the front lines of financial operations by integrating Anthropic’s Claude into the core mechanics of trade accounting and client onboarding. Precision matters. While the global banking elite has already embraced large language models for internal queries and coding assistance, this move represents a definitive push into the complex, document-heavy world of operational compliance. By leveraging sophisticated neural networks to interpret the nuanced discrepancies that occur in hundreds of millions of daily transactions, the firm seeks to eradicate the residual manual labor that currently exists within a 99% automated framework.

Beyond the Binary

Traditional systems fail at the edges. Marco Argenti, the Chief Information Officer at Goldman Sachs, identifies the inherent limitation of standard algorithms which excel at binary logic but falter when faced with the "exceptions" that define human commerce. It is not enough to simply collect data; the system must understand why a specific document does not fit a pre-defined template. If the process were entirely mechanical, the thousands of professionals currently managing these workflows would have been replaced by simple scripts decades ago. Generative AI provides the cognitive flexibility required to bridge the gap between a nearly perfect rules-based system and the messy reality of global trade data.

The Quest for Total Efficiency

Optimization is the ultimate goal. While JPMorgan Chase equips its workforce with LLM suites for data analysis and Bank of America utilizes AI for technical support, Goldman is targeting the high-stakes friction of Know Your Customer (KYC) protocols. Every transaction that fails a standard validation check creates a bottleneck that costs time, capital, and momentum. The beauty of these neural networks lies in their ability to mimic human reasoning across micro-use cases, allowing the bank to approach a state of near-total automation. This transition does not merely replace old tools; it creates a more resilient, intelligent infrastructure capable of handling the massive scale of modern finance with unprecedented accuracy.

Neural Integration and Compliance

Systems learn. The transition toward agentic workflows signifies a departure from static software toward dynamic cognitive partners that manage the sheer entropy of international capital markets. Logic evolves. By utilizing massive context windows, these models maintain a coherent understanding of multi-hundred-page credit agreements, ensuring that every nuance of a client's risk profile is captured during the onboarding phase. Accuracy ascends. The implementation of Anthropic’s Constitutional AI framework ensures that every automated decision-making process adheres to a rigorous set of internal safety principles, preventing the hallucination of trade data during high-velocity market events.

Data Sovereignty and Velocity

Friction dissolves. The architecture of this integration prioritizes the secure processing of proprietary datasets within a protected cloud environment, allowing for the rapid synthesis of information without compromising institutional integrity. Precision scales. By analyzing the historical patterns of trade failures, the system proactively suggests corrections for broken data strings, effectively transforming the back office into a self-healing environment that anticipates regulatory hurdles before they materialize. Momentum builds. This technological adoption enables a shift in human capital, allowing professionals to pivot from repetitive data reconciliation to the high-level strategic oversight of complex financial instruments.

Timeline of Financial AI Evolution

• May 2023: Release of Claude 2, introducing significantly expanded context windows for document analysis.
• April 2024: Goldman Sachs launches the internal "GS AI" platform to facilitate secure developer access to large language models.
• June 2024: Anthropic introduces the Claude 3.5 model family, enhancing reasoning capabilities for technical financial tasks.
• Q3 2024: Goldman Sachs actively deploys Claude for operational exception handling and automated trade accounting refinements.

Places of Interest

• 200 West Street, New York: The global headquarters of Goldman Sachs and the primary site for the firm’s technological strategy development.
• San Francisco Tech Corridor: The location of Anthropic’s headquarters, where the neural architectures for Claude are engineered.
• Plumtree Court, London: A key European operational hub where these AI systems are utilized to navigate diverse regulatory jurisdictions.

Did you know?

• Goldman Sachs employs over 12,000 engineers, representing approximately one-fourth of its entire global workforce.
• Claude 3.5 Sonnet can process and reason across a 200,000-token context window, which is roughly equivalent to a 500-page financial report, in seconds.
• The firm’s AI strategy focuses on "augmented intelligence," where the model serves as a co-pilot rather than a standalone decision-maker.
• Anthropic was founded by former OpenAI executives with a specific focus on "AI safety" and "Constitutional AI."

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America's Fiscal Future Amidst Radical Economic Shifts

The $23 Trillion Calculation

The numbers are massive. Phillip Swagel, the nonpartisan director of the Congressional Budget Office, delivered a projection this Wednesday that indicates the federal government is now on track to run a $23.1 trillion shortfall over the coming nine years. This figure represents an increase from previous estimates, signaling that while the radical restructuring of the American economy under President Trump is underway, the foundational deficit persists. Stability remains the goal for an economy currently navigating a transition toward unprecedented tariff levels and restructured federal spending. The American fiscal engine is vast enough to absorb significant shifts without immediate derailment, though the path toward 2036 suggests a debt-to-GDP ratio of 120 percent.

Balancing Radical Policy and Fiscal Reality

The math changed. By unilaterally canceling federal spending and pushing the Federal Reserve toward lower interest rates, the administration has attempted to offset the costs associated with the highest tariffs seen in nearly a century. Despite these aggressive maneuvers, the C.B.O. data suggests that the net effect of these policies has functioned as a relative wash on the total budget deficit. We are witnessing a unique moment where traditional economic guardrails are being tested by a policy mix that favors domestic manufacturing incentives over immediate debt reduction. Innovation in economic policy often requires a tolerance for short-term friction to achieve a more robust national posture.

Subtleties You Missed

The gap widened. While a $1.4 trillion increase in the projected shortfall sounds substantial, it represents a fractional shift when viewed against the total $23.1 trillion landscape, suggesting a degree of resilience in the underlying tax base. Lower immigration rates and the pressure on interest rates create a complex feedback loop that economists are still attempting to model in real-time. The trajectory is clear. The sustainability of this path depends heavily on the ability of newly incentivized domestic sectors to generate enough productivity to outpace the interest costs of the national debt. We are seeing a historic experiment in whether a nation can grow its way out of a deficit by fundamentally altering its trade and tax relationship with the rest of the globe.

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Uncovering The Truth About Salaried Workers' Rights To Overtime Pay

The Great Overtime Myth

You work late. The office is empty. You assume your salary is a flat fee for your life. You are wrong. Many Arizona workers are currently operating under a costly delusion that receiving a fixed salary automatically forfeits their right to overtime pay, yet federal law tells a remarkably different story. The law is sharp. While employers often hide behind the "salaried" label to avoid extra costs, the Department of Labor's Wage and Hour Division successfully clawed back $274 million in unpaid wages during the 2024 fiscal year alone.

The Triple-Lock Test

The rules are rigid. To deny you overtime, an employer must prove you pass three distinct federal hurdles known as the salary basis test, the salary level test, and the job duties test. It is not a choice. A manager cannot simply hand you a contract and declare you exempt; instead, they must ensure your role aligns perfectly with specific criteria regarding your actual daily tasks and the level of independent judgment you exercise. Titles are cheap. A "Director of First Impressions" or a "Junior Executive Lead" often performs the same manual or clerical tasks as hourly staff, making them eligible for every cent of time-and-a-half pay they accrue after forty hours.

The Job Duties Trap

Reality matters more than ink. The Fair Labor Standards Act (FLSA) mandates that your specific job duties must be primary and consistent with "white-collar" exemptions to qualify for overtime exclusion. Do not be fooled. Even in 2026, many salaried professionals in Phoenix and Tucson find themselves performing repetitive administrative work that legally entitles them to overtime compensation despite what their business cards might suggest.

Paper Trail

• The Fair Labor Standards Act (FLSA) official guidelines.
• Department of Labor (DOL) Wage and Hour Division enforcement data for Fiscal Year 2024.
• Recent 2026 updates to federal salary threshold requirements.
• Arizona state-specific labor compliance documentation.

What’s Next

Clarity is coming. Federal regulators are expected to continue adjusting salary thresholds to keep pace with the modern economy, ensuring fewer workers fall through the cracks of outdated pay scales. Check your pay stub. As more employees recognize their rights, the shift toward transparent compensation models will likely force a massive recalibration of how Arizona businesses structure their work weeks.

Are You Owed Money?

Answer these questions to evaluate your status:

1. Do you earn less than the current federal salary threshold per year?
2. Is more than fifty percent of your day spent on manual or clerical tasks rather than management?
3. Do you lack the authority to hire or fire other employees?
4. Does your boss deduct pay for partial-day absences?

If you answered "Yes" to any of these, your "exempt" status might be a legal fiction.

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MrBeast's Billion-Dollar Bet: Turning Views Into Financial Empire

A teenager in a quiet suburb scrolls through a YouTube feed where a creator gives away a private island, and minutes later, that same creator effectively becomes his new banker. This isn't just another viral stunt or a temporary endorsement deal designed to flicker and fade in the fast-moving digital attention economy. It is the moment Jimmy Donaldson, known globally as MrBeast, moved from being a tenant on social platforms to owning the financial plumbing of his massive audience. By acquiring the teen banking startup Step, the world’s most-watched creator is testing whether a billion views can be converted into a billion-dollar balance sheet.

The Distribution Moat

Attention is the new currency. For the better part of a decade, fintech startups focused on shaving seconds off onboarding times and stripping away traditional fees to lure younger users into their ecosystems. They built sleek interfaces. They succeeded on product design. Yet, they hit a wall built by rising digital advertising costs and the tightening of privacy controls like Apple’s App Tracking Transparency, which made finding new customers an increasingly expensive gamble. While venture capital flowed freely, these costs were a secondary concern, but as the market shifted toward sustainability in 2023 and 2024, the inefficiency of renting an audience through paid ads became an existential threat.

Ownership changes the math. Rather than paying platforms to reach potential users, a creator with hundreds of millions of followers controls the entire funnel from awareness to acquisition. This strategy transforms distribution from a recurring expense into a permanent competitive advantage that traditional banks find nearly impossible to replicate. The shift is logical because the economics of consumer finance are being rewritten by those who do not have to pay for the privilege of being noticed.

Catching the Next Generation Early

Financial habits are sticky. Data from Javelin Strategy & Research indicates that nearly 50 percent of Gen Z consumers opened their first financial account before they turned 18. Capturing a user at 13 or 15 years old creates a decades-long runway for growth as those teenagers eventually require car loans, mortgages, and investment portfolios. MrBeast is not just offering a debit card; he is embedding himself into the formative financial years of a generation that views traditional banking institutions with skepticism. This move represents a preview of a future where financial services are not sought out at a brick-and-mortar branch but are discovered through the content that shapes a person's digital identity.

The Trade-off

Trust is fragile. While owning the channel reduces the cost of entry, it also ties the stability of a regulated financial product to the volatile reputation of a single public figure. If the creator’s brand faces a downturn, the financial infrastructure could see immediate ripples in user confidence and deposit stability. There is also the challenge of scaling a product beyond the initial fan base, as those outside the creator's sphere of influence may view the platform as a novelty rather than a serious financial tool. Balancing viral entertainment with the somber reliability required by banking regulators remains the ultimate hurdle for this new model of "creator-fintech."

The Bottom Line

The era of the "product-first" startup is being challenged by the "audience-first" enterprise. Distribution is now the most defensible moat in a saturated market. If this acquisition proves successful, the divide between media and finance will continue to vanish until the two are indistinguishable.

Questionnaire

• Do you believe a content creator can provide the same level of security as a traditional bank?
• Would you trust a financial app more if it was owned by someone whose content you watch daily?
• Is the convenience of a creator-led app worth the potential risk of brand volatility?
• Do you think financial education is more effective when delivered through entertainment platforms?
• Will traditional banks be forced to acquire media companies to stay competitive in the next decade?

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Navigating The Complex 2025 Tax Landscape: Challenges And Opportunities For Citizens

The Divergent Fiscal Landscape

Coherence vanishes. The fundamental disconnect between newly enacted federal provisions and individual state mandates creates a jurisdictional labyrinth that demands unprecedented vigilance from every citizen attempting to navigate the 2025 filing season. While federal legislation signed on July 4 recalibrated the national fiscal landscape, many states have exercised their sovereign right to reject specific provisions, necessitating a granular analysis of local codes to avoid administrative friction. Precision is mandatory.

A Dividend for the Diligent

Nine states lead. According to the Tax Foundation, nine jurisdictions have proactively reduced income tax rates for the 2025 cycle, empowering individuals to retain a larger share of their earnings amidst the broader complexities of national fiscal reform. This strategic reduction offers a tangible financial reprieve for millions. Success requires awareness.

The Capital Confrontation

Washington faces turmoil. The Congressional intervention on February 12 to overturn the District of Columbia’s emergency tax decoupling has forced an immediate reconciliation with federal senior deductions and tip tax exemptions, a move that Chief Financial Officer Glenn Lee warned could necessitate a suspension of the current filing season. This sudden legislative reversal requires the District to overhaul forms and guidance in real-time, placing a premium on taxpayer patience as administrative systems align with the new federal reality. Accuracy remains essential.

Precision as Protection

Audits follow error. Tax experts at Kaufman Rossin emphasize that state authorities utilize sophisticated mechanisms to monitor compliance, meaning that minor mathematical discrepancies or incomplete documentation can trigger formal inquiries that mirror the intensity of federal scrutiny. Maintaining meticulous records ensures that citizens can confidently claim their rightful deductions while contributing to the stability of their local economies. Transparency ensures peace.

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