President Joe Biden‘s fiscal 2023 budget reduces the deficit by $1.3 trillion next year, a fact administration officials have touted in press briefings.
But the deficit is coming down from figures created in part by spending supported by the Biden administration, and the reduction would have been less if the Biden-backed Build Back Better Act had been passed last year.
WHITE HOUSE INSISTS INFLATION WON’T KEEP BIDEN BUDGET FROM HITTING DEFICIT GOALS
“They’re taking credit for the fact that their own massive deficit surge was a surge,” said Marc Goldwein, senior director of the Committee for a Responsible Federal Budget. “If the administration had not passed a single law, we would have a very similar deficit number 2022 to the one we’re expecting in 2023.”
The national debt is projected to rise by $1.2 trillion this year, in contrast with $2.8 trillion last year and $3.1 trillion the year before. Those previous figures are much higher than is normal, mostly due to COVID-19-related spending including the American Rescue Plan, which Biden supported but congressional Republicans opposed. Goldwein described it as “beyond silly” for the administration to take credit for reducing a number that had been inflated by its own policies.
Further, had the Build Back Better Act passed, the 2023 budget deficit would likely be between $150 billion and $250 billion higher.
As expected, conservatives lashed out against the president’s proposals.
“We are already suffering under the worst inflation in 40 years because of the Democrats’ spending spree during his first year in office, and his response is to increase spending and taxes? That’s absurd,” said Tea Party Patriots Action chairwoman Jenny Beth Martin. “Now he wants to pack the budget with fiscally irresponsible junk that will send inflation higher than Jimmy Carter levels. By increasing taxes, the Biden budget will make it harder to get our economy back to pre-COVID levels.”
But Goldwein praised the administration’s proposal for a new 20% tax on all income earned by billionaires and for eliminating tax havens and other loopholes for multinational corporations. The administration claims none of the taxes will affect Americans earning less than $400,000 annually.
Biden’s new taxes will lower the national debt by $1 trillion compared to what it otherwise would have been, which Goldwein described is a deficit “slightly less out of control.”
Overall, the budget proposal envisions the national deficit growing by $14.4 trillion over a decade. The Build Back Better Act could have added up to another $3 trillion to the debt over 10 years if none of its programs sunset, a fact that, along with concerns over inflation, led West Virginia Sen. Joe Manchin to torpedo the proposal in December.
But Manchin has indicated he’s up for debating a new proposal targeting only climate change, prescription drug prices, an updated tax code, and deficit reduction. If the Biden administration pursues the proposals, it could signal a pivot toward placing greater emphasis on balanced budgets.
In releasing the fiscal 2023 budget, Biden emphasized his commitment to fighting crime through investing $30 billion in law enforcement and anti-crime initiatives, calling the budget a “statement of values.”
“The budget makes important investments in the American people,” said Cecilia Rouse, the chairwoman of Biden’s Council of Economic Advisers. “A healthy, cared-for workforce is a productive workforce.
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The White House did not adjust for historically high inflation in crafting the budget request and does not expect elevated prices to affect plans for deficit reduction.
