Biden Falsely Claimed He Reduced the Federal Deficit. Now It's Three Times Higher Than It Was

The federal budget deficit is wildly out of control. But Joe Biden believes that he can get a better deal to cut the budget if he gets a “clean” debt ceiling bill from Republicans. That’s because the debt ceiling bill passed by Republicans would cut about $4.5 trillion from the budget deficit over the next 10 years. Biden wants the increased debt ceiling and a lot fewer cuts in his budgets.

Biden tried a different tack last year — outright lies.

“Let me remind you again: I reduced the federal deficit,” Biden said last May. “All the talk about the deficit from my Republican friends, I love it.  I’ve reduced $350 billion in my first year in office.  And we’re on track to reduce it by the end of September by another 1 trillion 500 billion dollars — the largest drop ever.”

As Reason‘s Eric Boem points out, this was a wild exaggeration.

Biden had done nothing to reduce the deficit. In fact, policies enacted since he’d taken office had caused the federal government to borrow more, not less, than it otherwise would have. The lower federal deficit total in 2022 relative to the two previous years resulted from expiring one-time emergency expenditures during the COVID-19 pandemic, which had swelled the deficit to record highs.

Now we have a situation where spending is still rising but tax revenue is falling, leading to a budget deficit so far of $928 billion. “That’s nearly three times larger than the $360 billion deficit recorded during the same seven months in the previous fiscal year,” writes Boem.

The Congressional Budget Office (CBO) notes that tax collections are down about 10% compared to last year, while spending has increased by about 8%. Even a Democrat can see that this is a formula for rising budget deficits.

But Biden wants to separate spending from tax collections — a plan that makes no sense unless Biden wants to continue to spend. Raising the debt limit won’t mean anything unless the spending issue is addressed as the GOP plan wants to do.

Raising the debt limit will accomplish nothing of substance unless the wildly out-of-whack federal budget is meaningfully addressed too. That means cutting spending, as the House-passed debt limit proposal aims to do.

A year ago, Biden was eager to talk about the federal budget deficit—his claim about cutting the deficit was not an offhand remark but a central talking point for months—because he could use the apparently smaller deficit to justify his plans to spend and borrow more.

Now that the deficit is raising again—and on pace to keep rising for the foreseeable future—it’s unlikely Biden will be pointing to it when he meets with McCarthy this afternoon. Unsurprisingly, Biden’s interest in deficit reduction was more about political opportunism than fiscal responsibility.

The fight over raising the debt limit is only a symptom. In fact, as long as Biden can keep the conversation about the debt ceiling, he will win. Republicans have to fight harder to show the existential threat to the stability of the U.S. economy that comes from the unending spending plans of Joe Biden.