Deficit Soars Again Under Biden

Among his litany of other bizarre fictions, Joe Biden continues to insist that he’s some sort of deficit disciplinarian.  

Biden’s deficit falsehoods, however, have become so untenable that even notoriously left-leaning pundits have started calling him out on it.  

The issue was brought into new and bolder relief last week when the Congressional Budget Office (CBO) officially projected a 2024 deficit significantly higher than its already-depressing February projection.  

In just four months since that February projection, fiscal conditions have deteriorated so much under Biden’s watch that this year’s deficit will be a whopping $400 billion higher and total approximately $2 trillion:  

The Congressional Budget Office estimates that if no new legislation affecting spending and revenues is enacted, the budget deficit for fiscal year 2024 will total $1.9 trillion.  That amount is $408 billion (or 27 percent) more than the $1.5 trillion deficit the agency estimated in February 2024, when it last updated its baseline budget projections.  Since then, CBO has increased its projection of outlays in 2024 by $363 billion (or 6 percent) and decreased its estimate of revenues by $45 billion (or 1 percent).  

Just as alarmingly, the CBO’s longer-term forecast under Biden’s “new normal” anticipates deficit levels never experienced in American history.  

In CBO’s projections, total deficits equal or exceed 5.5 percent of GDP in every year from 2024 to 2034.  Since at least 1930, deficits have not remained that large for more than five years in a row.  Over the past 50 years, the total annual deficit has averaged 3.7 percent of GDP.  

Part of the problem is lower incoming revenues as a result of a slowing economy.  “Economic growth,” the CBO reports, “is projected to slow from 3.1 percent in calendar year 2023 to 2.0 percent in 2024.”  

That can’t be what Biden meant by “Build Back Better.”  

In any event, the deeper problem is excessive spending.  

A disturbing data point on that note is that rising interest rates mean that payments on existing U.S. debt now exceed defense spending.  “In CBO’s projections,” it says, “net interest outlays total $892 billion in 2024 – surpassing discretionary outlays for defense this year – and rise to $1.7 trillion in 2034, nearly doubling over the period.”  

The largest spending increase since February’s CBO estimate, however, comes by way of Biden’s taxpayer bailout of college students’ loan obligations:  

About 80 percent of the increase in the projected deficit in 2024 is driven by four factors that all boost projected outlays. A $145 billion increase in projected outlays for student loans stems mostly from revisions that the Administration made to the estimated subsidy costs of previously issued loans and from the Administration’s proposed rule to reduce many borrowers’ balances on student loans.  Projected outlays for deposit insurance have increased by about $70 billion because the Federal Deposit Insurance Corporation (FDIC) is not recovering payments it made when resolving bank failures in 2023 and 2024 as quickly as CBO previously anticipated.  (In CBO’s projections, that increase is almost entirely offset by deficit reductions in future years as those payments are recovered.)  Newly enacted legislation increased projected discretionary outlays by $60 billion.  Projected outlays for Medicaid have increased by about $50 billion, mainly because actual outlays thus far in 2024 have been higher than expected.  (Emphasis added.)  

The fact that Biden openly boasts that his student loan bailout violates Supreme Court rulings adds insult to that injury.  

Nevertheless, Biden continues to brazenly champion himself a deficit hawk. Even deeply leftist PolitiFact, however, finally felt compelled to issue a recent corrective.  

First, PolitiFact’s analysis highlights how “the pandemic was an extraordinary historical occurrence that provoked an aggressive, and temporary, government response” to which Biden deceptively compares his own fiscal performance.    

From there, PolitiFact proceeds to compare Biden’s deficit record to his predecessor’s pre-pandemic norm:  

Even at its reduced levels, the deficit remains higher under Biden than it was pre-pandemic.  The deficit in 2022 and 2023 under Biden was higher than each of Trump’s first three years, partly because of bills such as the 2021 American Rescue Plan.  

The same pattern emerges when the deficit is compared with the U.S. gross domestic product, a common measure of the overall size of the economy.  The deficit peaked at 14.7% of gross domestic product in 2020 and fell to 5.4% in 2022.  That was still bigger than the highest pre-pandemic percentage under Trump, which was 4.6%.  

And now, worsening that trend, Biden’s 2024 deficit continues to exceed earlier estimates.  

Whether Biden actually believes the whoppers he tells remains an open question, but the real-world consequences of his presidential mismanagement are increasingly beyond dispute.

Timothy H. Lee is Senior Vice President of legal and public affairs at the Center for Individual Freedom.

Reprinted with Permission from CFIF.org – By Timothy H. Lee

The opinions expressed by columnists are their own and do not necessarily represent the views of AMAC or AMAC Action.