Biden’s deficit-reduction claims are hogwash, so much so that even CNN had to call him out.
The president's policies aren't the reason for the deficit decline, and if he had gotten his way, the debt would be higher.
S urging inflation is hitting American families hard and is quickly becoming a top concern for voters ahead of the November midterms. So, it’s no surprise that President Biden is on the defensive — but his latest attempt at political spin is so absurd that even CNN had to call him out.
When asked at a recent press conference if he takes any responsibility for inflation, Biden said no, explaining that his spending policies are blameless.
“I think our policies have helped, not hurt,” Biden replied. “We brought down the deficit. The bottom line is, how much does America owe?”
There are several problems with this answer, but let’s begin with Biden’s claim that he “brought down the deficit,” a claim he has repeated on social media.
There are two major problems with this claim. The first is the benchmark Biden is using.
For obvious reasons, in 2020 the federal government ran the largest funding gap in U.S. history in nominal dollars — a $3.1 trillion deficit, more than triple the previous fiscal year. The deficit was equivalent to 15 percent of the entire economy (the highest percentage since World War II), in large part the result of massive “stimulus” spending passed with near-unanimity of both parties during the initial Covid-19 outbreak.
In its first year in office, the Biden administration did indeed bring this deficit “down”—to $2.8 trillion, a deficit still nearly triple that of 2019 and the second largest in history.
The story doesn’t end there, however. As even CNN pointed out, Biden’s claim that his policies “helped” the deficit is simply not true.
The president made it one of his first orders of business to push a $1.9 trillion “Covid relief” bill along party lines, despite warnings from economists within his own party that this could lead to an inflation uptick. Biden’s legislation, the so-called American Rescue Plan, was largely focused on partisan pet projects and expansions of the welfare state. Only about 10 percent of the spending actually directly addressed the health impacts of Covid-19. The plan failed to create the promised jobs, and even left-leaning economists have now admitted that it did “stimulate” inflation.
It also “stimulated” the same budget deficit that Biden’s now trying to take credit for reducing. In fact, a Congressional Budget Office analysis concluded that the federal deficit would have fallen more than twice as fast — a decline of more than $870 billion — if the White House had not implemented new spending programs.
Budget experts told CNN that Biden’s claim to be a deficit warrior doesn’t hold water.
“[It’s] almost bizarro world,” Committee for a Responsible Federal Budget senior vice president Marc Goldwein told the network, adding that the budget deficit would have fallen much faster “had President Biden come to office and not done anything.”
Adding to the absurdity of Biden’s claim is that he would have spent even more if he could have.
The White House has pushed additional multitrillion-dollar spending legislation, the Build Back Better Act, that senators from his own party mercifully rejected. (Thanks, Joe Manchin!) Contrary to the president’s claims that the Build Back Better Act was deficit-neutral, an analysis from the Wharton School of Business found that it would have increased federal debt by more than 25 percent over the long run, given a series of reasonable assumptions about the spending being extended.
Of course, it’s true that President Biden isn’t solely to blame for the federal government’s huge budget deficits or our current high inflation levels.
On the first count, Republicans and former president Donald Trump also passed large levels of spending. (Although they did so at the very height of the crisis in 2020, and Biden did so much later, after the widespread availability of a Covid vaccine.) And the Federal Reserve’s reckless money-printing and loose monetary policy played a huge role in our inflation woes, something the president doesn’t have direct control over. (Although he did renominate Fed chairman Jerome Powell, despite Powell’s overseeing such a drastic policy failure.)
So, it’s not fair to lay all the blame on Joe Biden for the historic inflation that Americans are experiencing. But it is entirely fair to point out that his deficit-reduction claims are hogwash, so much so that even CNN had to call him out.
Jon Miltimore is the managing editor at the Foundation for Economic Education (FEE.org). Brad Polumbo is opinion editor at the Foundation for Economic Education and host of the Breaking Boundaries podcast.