Joe Biden, Deficit Hawk is not a thing.
President Biden sprinkles the line “I’m not joking” throughout his public remarks, and it’s reasonable to conclude this is because he’s worried listeners are routinely on the cusp of figuring out he’s not serious.
One way we know he’s not serious is that he keeps claiming to be a deficit hawk.
You can skip ahead to around the 23-minute mark here to listen to the president, in Detroit today, mock Republicans for voicing concern about the deficit impact from profligate spending and then counter: “Guess what? First year in office, we reduced the deficit by $350 billion. Guess what? This year, this year we’re on track at the end of the fiscal year to reduce the deficit by over $1 trillion.”
He’s made this boast in one form or another, in one forum or another, before; Phil Klein’s prior dismantling of it can be found here. But it’s worth posting a reminder that this claim is completely misleading.
The first part, that he reduced the deficit by $350 billion in 2021, is only utterable because the deficit that year technically fell by that much from the year prior. But, to modify a phrase from Barack Obama, he didn’t cut that. To the contrary, Biden increased it.
When he took office, the Congressional Budget Office projected a $2.3 trillion federal deficit for 2021. We ended 2021 with a $2.8 trillion deficit. So yes, it’s a few-hundred billion less than in 2020 — and a half-trillion more than was projected. Plus, to state the obvious, 2020 was the pandemic year, when the government committed unprecedented resources to respond.
The second part of Biden’s rhetorical refrain, that he cut the deficit by over $1 trillion this year, is on somewhat more solid footing. Projections for the fiscal 2022 deficit have not changed drastically since Biden took office, though the honest claim would be that he made no impact whatsoever on the deficit this year, and that it would have been much higher if the Senate hadn’t blocked his agenda. (Doesn’t sound quite as impressive, though.) The cut could end up bigger than Biden said, but again, a projected $1 trillion deficit — which is what the CBO forecasts — is unsustainably high and only small by comparison to that for the Year of Covid. Further, the latest CBO estimate included this fairly significant caveat about the late-breaking student-loan decision (emphasis mine):
On August 24, 2022, the Administration announced plans to forgive certain portions of federal student loans for many borrowers and other changes to the student loan program. CBO’s budget estimates through August do not include outlays related to those actions because the Administration had not recorded any related costs. . . .
Without the changes to student loans, CBO’s projection of the 2022 budget deficit would be about $1.0 trillion, compared with a $2.8 trillion shortfall last year. If significant numbers of student loans are modified in September, the 2022 deficit could be considerably larger than CBO has estimated.
It doesn’t take getting into the weeds, though, to figure out that the fiscal attitude in this administration is not one of austerity. Joe Biden, Deficit Hawk is not a thing.