Debunking Biden’s deficit claims, one by one

The story told by President Joe Biden is that his “Bidenomics” had a positive impact on the economy by reducing the budget deficit and controlling inflation.

The problem is, that's not true.

On the one hand, there are the claims of the White House and the Treasury; on the other hand, We have a cold hard truth.

Unfortunately for the White House, Final budget data The 2023 fiscal year report tells the story of out-of-control spending outpacing revenue increases and the potentially devastating impact it could have on the economy through inflation.

Federal spending last year was nearly $1 trillion higher than predicted before President Biden took office. Remember the next time you hear President Biden claim he has reduced the budget deficit.

When examining the president's economic policy influence, a key tool is the nonpartisan Congressional Budget Office (CBO). forecast. This is what was expected based on the law that existed just before President Biden took office in January 2021. Comparing that to the actual fiscal situation allows us to assess the president's impact.

This outcome is not good for Biden or for taxpayers.

Fiscal year 2023 deficit shockingly exceeded CBO's pre-Biden baseline forecast 76 percent.

The administration claimed that “reduction in revenue” was the cause. statement From Treasury Secretary Janet Yellen and Office of Management and Budget (OMB) Director Shalanda Young. After reaching record levels in 2022, tax collections declined in 2023 due to lower capital gain realizations and increased tax credit claims.

However, compared to CBO's pre-Biden projections, actual revenues were $237 billion higher than expected. Sales exceeded expectations by 6%, but the deficit did not widen.

The increase in the overall deficit compared to pre-Biden projections for fiscal year 2023 is due to spending being $970 billion (19%) higher than expected.

The spending increase was led by $659 billion in interest expenseswhich exceeded initial expectations by a whopping 137 percent.

Interest costs were significantly higher than expected as both interest rates and loan amounts surged more than expected in 2021.

CBO originally estimated that the interest rate on the 10-year Treasury note at this point would be just 1.58%. But that rate is now over 4%.

Food stamp spending in 2023 was 73% higher than originally predicted, and average monthly benefits were 61% higher than predicted. In 2021, the Biden Department of Agriculture changed the calculations used to determine food stamps. payment of benefits. C.B.O. Estimation The increase in welfare benefits will cost taxpayers up to $300 billion over 10 years.

Biden's American Rescue Plan Act contributed to a surge in spending, including expanded Obamacare subsidies for the wealthy and tens of billions of dollars in relief for struggling union pensions.

Other legislation increased spending on green infrastructure, veterans benefits, subsidies for chip manufacturing, and aid to Ukraine, none of which were considered to offset other spending cuts in the budget.

Of course, these spending increases stem from Congress as well as the president, but the primary driver was the Biden administration's priorities and signature legislation, and the inflation and interest rate increases they caused.

The national debt is now $2.5 trillion higher than the CBO predicted before Biden's extravagance.

The country's fiscal trajectory is unsustainable, and the Biden mix is ​​making things worse by increasing spending and making the budget deficit wider than it should be.

American families suffer from high inflation and low real wages as a direct result of irresponsible government spending.

House Speaker Mike Johnson (R-Louisiana)'s refusal to accept further spending increases is a common-sense first step toward restoring fiscal responsibility. To get the economy and budget back on track, lawmakers must continue their determined efforts to reverse the curse of overspending and national debt.

Matthew Dickerson is the Director of Budget Policy at the Economic Policy Innovation Center (EPIC). He was previously a senior staff member on the House Budget Committee.