President Joe Biden has sought to take credit for what he calls a “historic” reduction of the federal budget deficit.
Just last Friday, at a White House briefing, for example, the Democratic president said: “Today, my administration announced that this year the deficit fell by $1.4 trillion — the largest one-year drop in American history — $1.4 trillion decline in the deficit. Let me repeat that: the largest-ever decline in the federal deficit.”
“Let me be clear: This record deficit reduction includes the cost of my student loan plan and everything else we’re paying for,” he added. “The deficit is down $1.4 trillion this year, even after accounting for 30 years of debt relief paid in advance.”
Like so much of what Biden says, it’s not true.
The conservative website CNSNews.com on Wednesday highlighted a report that shreds Biden’s narrative.
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As the outlet reported, “a new analysis finds that 104% of the [deficit] decrease is due to shrinking or expiring COVID relief.”
The report, released the same day as Biden’s speech, came from the bipartisan Committee for a Responsible Federal Budget. And in fact, according to the CRFB, Biden not only does not deserve credit for reducing the deficit, but he’s also actually increasing the national debt by $1.5 trillion between now and 2032.
According to the CRFB, Biden is right on the numbers; it’s the cause that he’s got wrong.
In 2021, the federal budget deficit was $2.78 trillion; this year, it came in at $1.38 trillion — a reduction of $1.4 trillion, as Biden said.
But his “policies” that made that happen were simply to allow a slew of big government pandemic-related spending to just die on the vine.
The “shrinking or expiring COVID relief” that helped slash the federal deficit includes $615 billion from the March 2021 American Rescue Plan, $660 billion from the December 2020 Response & Relief Act and $175 billion from the CARES Act, the Families First Act, and other measures that were enacted in the first half of 2020, according to CRFB.
“All said,” the group concluded, “the decline in the deficit over the past fiscal year is more than entirely the result of waning COVID relief and not of historic deficit reduction by President Biden as the White House claims. In fact, the President’s actions to date have increased deficits by $4.8 trillion through 2031.”
“With inflation at a 40-year high and debt headed to record levels, actual deficit reduction is needed to put the country on solid fiscal ground.”
In a separate statement, also issued on Friday as the Treasury Department released the numbers that Biden crowed about, Maya MacGuineas, president of the Committee for a Responsible Federal Budget, noted that the government borrowed $1.4 trillion last year under Biden.
“That is not an accomplishment – it’s a reminder of how precarious our fiscal situation remains,” said MacGuineas.
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She noted that the “entirety” of the deficit decline was due to expiring temporary COVID relief, and “not due to a renewed era of fiscal responsibility.”
“In fact, she added, “the deficit would have been almost $400 billion lower had the Biden Administration not decided to enact an inflationary, costly, and regressive student debt cancellation plan in August.”
“Despite claims of ‘historic deficit reduction,’ lawmakers and the President have approved nearly $5 trillion of new borrowing over the last two years. It should be no surprise that the Federal Reserve is having a hard time getting inflation under control when fiscal policymakers keep making their job even harder with more borrowing,” MacGuineas continued.
“As we enter the new fiscal year and finish out the calendar year, policymakers need to reverse course. With inflation surging and interest rates rising, we need deficit reduction.” she added.
“Lawmakers should – at the very least – pledge not to add any more debt through the new year. They should at least be able to go two and a half months without adding more to the debt.”
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