May 13, 2022

Biden's Deficit Deceit

WASHINGTON, D.C. – This week, President Biden repeated his delusional claim that his Administration is committed to reducing the deficit. This is the same President Biden who falsely claims his reckless spending is not responsible for the highest inflation in forty years – an inflation crisis he also first denied even existed. The same President Biden who told the American people his Build Back Broke agenda would cost “zero.” “It is painfully obvious that President Biden has not been honest with the American people about his explosive deficit spending,” said House Budget Committee Republican Leader Jason Smith (MO-08). “The massive spike in prices facing every family is the direct result of President Biden’s spending binge, enabled by his Democrat allies in Washington. The President is trying to fool the American people by claiming he’s reduced the deficit this year after having unleashed $2 trillion in new spending last year through his “Rescue Plan”, all while pushing a budget that proposes annual deficits of $1.6 trillion for the next 10 years – which would be the highest sustained deficits in American history. Frankly, had members of his own party not rejected the President’s Build Back Broke agenda, deficits under Joe Biden would be going even higher. Under President Biden, America’s fiscal health is getting worse, not better.” The President has consistently misrepresented, distorted, or outright ignored the facts about his Administration’s deficit spending habits – routinely leaving out important details. For example, the White House has bragged that President Biden reduced the deficit by $354 billion in 2021 compared to 2020 – even rolling out the below graph to make their point:

reduced deficit

What’s missing here? For starters:

  • The deficit in President Biden’s first year in office was the second highest in the history of America.
  • The 2021 deficit was driven in large part by the unpaid-for $2 trillion American Rescue Plan which passed on party lines and pushed government spending to a whopping 30.5 percent of GDP, roughly 10 percentage points higher than its historical average, while sparking the worst inflation crisis in 40 years.

The Biden Administration is trying to mask its deficit increase by falsely comparing the FY 2021 deficit to FY 2020 – a time when Congress passed multiple bipartisan COVID-19 aid packages that resulted in the largest deficit in U.S. history. A more accurate representation:

drove deficit

President Biden’s FY 2021 deficit was $2.78 trillion – $517 billion higher than what the Congressional Budget Office (CBO) projected for 2021 prior to enactment of the President’s partisan $2 trillion spending spree.

biden deficit

The President has also repeatedly claimed that he is reducing this year’s deficit by $1.5 trillion. However, this is the result of a drop-off in spending after the Democrats drove up deficits with their $2 trillion bill last year. There is no display of spending restraint with this Administration. In fact, the President’s budget, supported by Congressional Democrats, proposes annual deficits averaging $1.6 trillion in the years to come, roughly $600 billion higher than the average of the last ten years.

biden historic plan

  The truth is that President Biden’s claims of deficit reduction are insincere at best, and his actions and agenda would only make deficits worse. Right now, only two things are saving the Biden Administration from having an even worse fiscal outlook:

  • A major increase in revenues as a result of the Republican-passed Tax Cuts and Jobs Act (TCJA).
    • Last year, tax revenues grew by 18 percent, the highest in more than 50 years.
    • Revenues for 2022 so far have surged 39 percent, putting it on pace to be the largest growth since 1944 and the largest percentage of GDP ever.
  • The Build Back Broke agenda has failed to get off the ground – an agenda that CBO has confirmed would add $3 trillion to the debt.