“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 ever in American history,” Biden bragged from the White House last month.
The dropping deficit had become a component of Biden’s economic messaging by this spring, as problems about the increasing cost of living were beginning to shift into serious doubts, even among some Democrats, about the administration’s ability to manage the economy. Biden presented his deficit reduction as an answer to critics on the Left and Right who had blamed the White House’s spending for driving up prices. But Biden’s budget claims were misleading at best.
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Democratic appropriators on Capitol Hill are quietly gearing up to spend even more in fiscal year 2023, even though many of their party’s top economists blame Biden administration spending for the inflationary spike.
In February 2021, the nonpartisan Congressional Budget Office projected that the United States would run a deficit of $2.3 trillion for the fiscal year. That analysis, the CBO said, was based on the assumption that the programs in place as of Jan. 12, 2021, when President Donald Trump was still in office, would remain in place throughout the fiscal year.
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According to the February 2021 report, CBO analysts did this to calculate “a benchmark that policymakers can use to assess the potential effects of future policy decisions” and not because they expected Biden to leave his predecessor’s policies intact.
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“Future legislative action could lead to markedly different outcomes,” the CBO warned.
In November 2021, and the CBO’s analysis had changed. After eight months of Democratic leadership, the U.S. had eventually run a deficit of $2.8 trillion for the fiscal year, meaning Biden oversaw the addition of more than $500 billion to the deficit over what the CBO projected would have been added under Trump.
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Biden’s claims about projected deficit reduction for this fiscal year have also been misleading.
That’s because several pandemic-era relief programs died at the tail end of the last fiscal year and the beginning of this one.
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In early September 2021, a trio of federal jobless programs, including one that gave unemployed people an extra chunk of money every week above the standard unemployment insurance rate, expired. In December 2021, so, too, did a popular (among Democrats, at least) child tax credit program.
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