Thursday 27 October 2022

Biden Continues To Tout The Budget Deficit Reduction. His Policies Have Nothing To Do With It

 The White House has repeatedly pushed that the Biden administration’s policies have resulted in a “historic deficit reduction,” doing a victory lap before the midterms and framing their economic messaging on the seeming historic feat.

Economic data, however, shows the administration’s claim is untrue. The data shows the reduction was not caused by President Joe Biden’s agenda; rather, it was fueled by the cutback on the administration issuing COVID-19 funds.

The president has touted the deficit reduction claim in his speeches, calling it “the largest one-year drop in American history,” and saying “the deficit has come down both years that I’ve been in office.” Biden has also adopted a new messaging campaign before the midterms, warning Republicans will “crash the economy” if they win in November, and that “Republicans in Congress have a very different vision” than that of his deficit reduction. 

The deficit did fall from $2.8 trillion in Fiscal Year (FY) 2021 to $1.4 trillion in FY 2022, but the entirety of that reduction is a “result of shrinking or expiring COVID relief,” the Committee for a Responsible Federal Budget (CRFB) said in a report.

Approximately $1.45 trillion of the deficit reduction, or 104%, “was the result of shrinking or expiring COVID relief” and the other $175 billion, or 13%, “represents declining COVID relief from the CARES Act., the Families First Act, and other legislation enacted in the first half of 2020,” the report authored by the nonpartisan nonprofit stated.

The White House did not immediately respond to a Daily Caller inquiry asking if they could name one thing Biden did to reduce the deficit.

The deficit will also increase by over $1.5 trillion between 2023 and 2032, according to the Congressional Budget Office, partly due to Biden’s student debt “relief” of up to $20,000 for some borrowers.

Marc Goldwein, senior vice president and senior policy director for the CRFB told Check Your Fact, “80% of that $1.8 trillion or so falling deficit is because of expiring or waning COVID relief. The remaining 20% you can explain by economic changes, including a stronger than expected economy and especially higher inflation which leads to higher tax revenue.”

EJ Antoni, a research fellow for Regional Economics in the Center for Data Analysis at The Heritage Foundation, told the Daily Caller: “Because Biden has racked up over a trillion dollars in new excess spending, the deficit has declined by less than it would have. Put simply, the deficit would have shrunk about 86% instead of just 50% were it not for the steady stream of new spending out of D.C.”

A White House official responded to Check Your Fact on the analysis that the end of the pandemic is entirely responsible for the deficit reduction.

“It’s not right to say it’s only about the end of the pandemic spending. Outlays (sending) fell by about $950 billion from 2021 to 2022 but revenues also increased by around $800 billion due to the strong recovery,” the official said.

“In fact, the 2022 deficit as a share of GDP is lower in the May 2022 projection (4.2%) than it was before the Rescue Plan passed (4.6% in the Feb 2021 CBO projection). That shows that the strong recovery under President Biden didn’t just drive a strong recovery but also led to a better fiscal outcome,” the official added.

White House press secretary Karine Jean-Pierre was pressed on the misleading deficit claims Monday, with Fox News’ Jacqui Heinrich saying Biden “has claimed repeatedly that the administration reduced the deficit. But if you break it down, you know, spending was high because of the pandemic.”

“The ‘reduce the deficit’ is real — $1.4 trillion. That’s what he talked about just last week. And that is historic as well. In the — in one year, that’s what we — the president has been able to do. Those are real numbers that matter, as we talk about inflation,” Jean-Pierre answered. 

 Jean-Pierre did not respond when Heinrich asked if she could name “one thing” Biden did that reduced the deficit.

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