President Joe Biden on Wednesday positioned himself as a deficit hawk. But don’t believe it.
Biden was attempting to reset the narrative as inflation reached heights unseen in 40 years, the Fed is looking at its biggest rate boost in years, and as the economy actually contracted during the first quarter, touching off fears that the nation is headed into recession.
Florida Republican Gov. Ron DeSantis is among the latter. “I think it’s very likely that Biden is going to plunge this country into a recession,” DeSantis said earlier this week. “Florida has been doing well, and we’re happy about that, but when you have the inflation headwinds when you have the Fed raising interest rates, and some of the other things happening in the markets there is a possibility of seeing a downturn, and unfortunately I think that downturn will be precipitated by bad policy coming out of Washington.”
Biden asserted that he is responsible for cutting the federal deficit by a record amount.
“We’re on track to cut the federal deficit by another — another — $1.5 trillion by the end of this fiscal year, the biggest decline in a single year in American history,” Biden said in comments at the White House, according to CNBC.
But as some analysts noted, and as might be expected, Biden did not give all the facts.
The deficit exploded during the pandemic because the federal government shut down the economy and shoveled trillions out the door to keep things going.
The deficit now went down because some deficit-padding efforts implemented by former President Donald Trump to deal with the pandemic are expiring and won’t be renewed.
Moreover, Biden’s grossly expensive Build Back Better agenda is stalled. CNBC noted that if the whole plan were implemented, BBB would cost $4.7 trillion. Since it got mired in Congress, Biden cut it back to $1.7 trillion and even shaved “some of the programs that would likely be permanent to reduce the price tag on paper.”
The Sinclair Broadcast Group noted in a report that the government has benefited from stronger than expected tax revenues as the country pulls further out of the pandemic.
In his comments, Biden blamed the “reckless” tax cuts passed by former President Donald Trump as the reason for the deficit.
Yet as The Free Press has reported, revenues are up because Biden has not altered Trump’s tax cuts, which have helped produce record income tax revenues for the federal government.
Finally, Biden is misleading because the overall federal debt has shot up under the Democratic president.
On Wednesday, CNSNews.com columnist Terrence Jeffrey pointed out that the national debt rose almost $3 trillion since Biden entered office.
On Biden’s first day in office in January 2021, Jeffrey noted that the national debt was $27.8 trillion.
As of Monday, it had reached $30.4 trillion – an increase of $2.6 trillion.
Jeffrey observed, “So far, the Treasury has published the tax, spending, and deficit numbers for each of the first fourteen full months of Biden’s presidency (February 2021 through March 2022). In 13 of those 14 months, according to the latest Monthly Treasury Statement, federal spending has exceeded federal revenues and the federal government has run a deficit.”
Jeffrey added that just during the first half of this fiscal year, which began in October, and which started eight months after Biden took office, the federal government received $2.1 trillion, but spent $2.8 trillion.
In other words, the deficit was $700 billion so far this year.
But perhaps Biden’s claims are fodder for the new Disinformation Governance Board at the Department of Homeland Security. His assertions were too much event or the Biden-friendly “fact-checkers” at FactCheck.org.
In a blog post last week, the group noted that Marc Goldwein, senior vice president of the Committee for a Responsible Federal Budget, said it was “pretty silly” that Biden could claim he cut the deficit.
“He didn’t cut the deficit, he increased it,” Goldwein said.
The group posted on its blog that “the main source of falling deficits is the expiration of most COVID relief such as enhanced unemployment benefits and recovery rebates. The remaining decrease is largely the result of strong income growth and high inflation.”
“The President’s actions to date have not reduced deficits but instead increased them,” the group added. “Between the American Rescue Plan, the bipartisan infrastructure law, and various executive orders, we estimate at least $2.5 trillion has been added to deficits through 2031 over the President’s term so far.”
A senior economist at the Penn Wharton Budget Model, Jon Huntley, added, “The decline in the deficit between fiscal years 2021 and 2022 was largely expected.”
“Under current law, a huge amount of mandatory spending was scheduled to expire in 2022. Therefore, the federal deficit was going to decline under current law,” he added. “Congress would have needed to explicitly pass an extension of these mandatory spending programs to maintain 2021-levels of federal spending. As no such extension passed, spending declined in excess of a trillion dollars in fiscal year 2022.”
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