How Tax Expenditures Skew Federal Budgets

The Fiscal Policy Podcast with Fexingo: Government Budgets, Stimulus, and Public Spending · Oct 28, 2026 · 12m · transcript

Most people think of the federal budget as a list of checks written by the government. But a massive chunk of that spending never actually leaves the Treasury. It stays in your pocket, thanks to tax expenditures like the mortgage interest deduction and employer-sponsored health insurance exclusions. In this episode, Lucas and Luna break down how these hidden subsidies distort fiscal reality, why they are politically untouchable, and what happens when you try to measure the true cost of a tax credit versus a direct grant. We look at specific numbers from the Congressional Budget Office and…