Just in the week before the 60 Minutes interview, the president mentioned cutting the budget deficit six times by $350 billion, sometimes saying he wants to counter accusations that he is increasing the federal bill.
“By the way, when you hear your Republican friends or anyone else say, ‘Wow, they’re spending a lot of money,’ guess what? We cut the budget [deficit] $350 billion last year,” hey said at an infrastructure event in Boston on September 12. a fundraising event around town, Biden said, “Our Republican friends talk about, well, ‘Big Spendin’ Biden.’ Well guess what? I reduced his deficit by $350 billion the first year and over $1 billion this year.”
And when the president unveiled his plan for student loan forgiveness on August 24, which according to some estimates it would cost at least $500 billion more than ten years, hey commented“There is a lot of deficit reduction to pay for the programs, cumulative deficit reduction, to pay for the programs many times over.”
Biden never quite says that his policies reduced the deficit. But when he says things like “I lowered your deficit,” he certainly points it out.
The president is playing a game of rhetorical shells. He is trying to dazzle listeners with impressive sounding numbers. But the reality is that he increased the budget deficit, not reduced it.
Budget deficit numbers are complicated and often boring. So we’ll try to keep this as simple as possible.
The best way to determine a president’s impact on budget deficits is to look at what was forecast before he arrived and then what happened after his policies were enacted.
The Congressional Budget Office, the official annotator, in February 2021 Estimate the budget deficit would fall sharply in fiscal years 2021 and 2022 as emergency spending from the pandemic expires. Budget deficits would be high in both years, but the red ink would start to fade.
When Biden says he cut the deficit by $350 billion in 2021, it’s a real number. In your last reportthe CBO says the figure is $360 billion.
But here is the shell game.
Before Biden took office, the CBO said in its early 2021 projection that the budget deficit was expected to shrink by $875 billion in 2021. But then Biden signed additional covid relief funding and other new policies into law, which resulted in a more modest decline of $360 billion.
The budget deficit was expected to fall further in 2022, and it has under Biden. But the CBO projected the combined 2021 and 2022 budget deficits to be $3.31 trillion. Now CBO He says it will be 3.81 trillion dollars.
In other words, Biden boasts of cutting budget deficits even as he increased the national debt by some $500 billion more than originally projected.
Of course, budget projections are not set in stone, especially in the long term. Technical factors, such as inflation that increases tax revenues, can change the underlying mix of spending and revenue. A White House official emphasized to the Fact Checker that outlays (spending) fell by about $950 billion between 2021 and 2022, but revenues also increased by about $800 billion.
The official noted that the deficit’s share of gross domestic product (GDP), the broadest measure of the economy, fell to 4.2 percent, compared with 4.6 percent in the February 2021 projection of the CBO. “That shows that the strong recovery under President Biden not only fueled a strong recovery, but also led to a better fiscal outcome,” the official said.
but marc goldweinsenior vice president of the nonpartisan Committee for a Responsible Federal Budget (CRFB), estimates that the deficits would have been about 3.3 or 3.4 percent of GDP if everything had been equal to the projection February 2021. The big difference was the impact of inflation, according to the CBO, and an unexpected $80 billion windfall in 2021 for the government in the sale of telecommunications licenses.
In other words, again the data shows that the deficit picture has worsened under Biden.
Furthermore, any suggestion that this supposed deficit reduction will help pay for student loan relief is false. The budget deficit skyrocketed in the first place due to a national emergency. “This is like a family that goes into debt for a one-time medical expense of $100,000 and then the following year claims they can afford to borrow $50,000 for a sports car because the medical expense is over,” he said. brian riedlbudget expert at the Manhattan Institute.
Now that we’ve examined the budget impact of the first two years of the Biden presidency, let’s move on to the future.
Unexpected emergencies, like the war in Ukraine, often put pressure on the federal budget. Biden managed to win passage of an infrastructure bill long sought after by members of both parties. We take no position on whether certain programs are necessary or desirable. We’re just looking at the numbers, and they also show future increases in the deficit.
According to a new accounting Per the CRFB, an additional $4.8 trillion in loans were added under Biden in the 2021-2031 period.
“This $4.8 trillion is the net result of approximately $4.6 trillion of new spending, approximately $500 billion of tax cuts and exemptions, and $700 billion of additional interest costs, partially offset by $400 billion of spending cuts and $600 billion of revenue-enhancing policies. CRFB said.
Policies that have increased deficits include:
- Biden’s covid relief bill ($1.85 trillion added to deficits).
- The fiscal year 2022 spending bill ($625 billion).
- The bipartisan infrastructure bill ($370 billion).
- Health and disability benefits for veterans exposed to toxic substances ($280 billion).
- Increase Supplemental Nutrition Assistance Program (SNAP) benefits by 21 percent ($185 billion).
- Health-Related Executive Orders ($175 billion).
- CHIPS Act for the expansion of semiconductor manufacturing in the United States ($80 billion).
- Help Ukraine in its war with Russia ($55 billion).
- Student loan debt relief and payment breaks ($750 billion).
On the other side of the ledger, the health and energy bill called the Inflation Reduction Act was crafted to show about $240 billion in reducing the deficit for ten years. But the bill would reduce deficits by just $90 billion if a three-year extension of expanded health care subsidies were made permanent, Estimated CRFB.
You know how it works in Washington: A temporary measure is often extended further if the benefits remain popular. And from a budget standpoint, extending a program for just three years costs less, on paper, than one running for ten years.
Biden cites actual deficit reduction numbers, but he does so in a way that misleads listeners.
The president is missing important context. The budget deficit was supposed to shrink as the massive spending caused by the pandemic fades.
In fact, the picture of the budget deficit, now and in the future, would have been better were it not for Biden’s policies. He has every right to argue that those policies were necessary. But he can’t suggest that they reduced the budget deficit.
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