Biden goes big on the deficit

“Reagan proved deficits don’t matter,” Dick Cheney is said to have told Paul O’Neill when they were serving as vice president and treasury secretary, respectively. President Joe Biden is testing this theory all over again.

The massive $6 trillion Biden budget proposal projects an eye-popping $1.8 trillion annual deficit even as the pandemic recedes and the economy recovers as people head back to work following the lockdowns. At the center of this blueprint is $4 trillion in new spending Biden has already proposed, even as he promises to scale back his opening infrastructure bill potentially to strike a deal with Republicans. Biden also proposes the biggest tax increases in decades, but they are not sufficient to cover all the spending.