The tale President Joe Biden tells is that his “Bidenomics” had a positive impact on the economy by reducing the budget deficit and getting inflation under control.
The problem is that it’s just not true.
On the one hand, we have the claims made by the White House and the Treasury, but on the other hand, we have the cold hard facts.
Unfortunately for the White House, the final budget data for fiscal year 2023 tells the story of out-of-control spending, even outpacing rising revenues, and the devastating effects that can have on an economy through inflation.
Federal spending last year was nearly $1 trillion higher than projections made before the Biden presidency. Remember that the next time you hear President Biden claim that he has reduced the deficit.
As we examine any president’s impact on economic policy, a key tool is the non-partisan Congressional Budget Office (CBO) forecast. It shows what was projected under the laws that existed immediately before Biden’s inauguration in January 2021. When we compare that to the actual fiscal situation, we can assess the impact a president has had.
The results are not good for Biden — or the taxpayers.
The deficit for fiscal year 2023 exceeded the CBO’s pre-Biden baseline projections by a staggering 76 percent.
The administration blamed “falling revenues” in a statement from Secretary of the Treasury Janet Yellen and Office of Management and Budget (OMB) Director Shalanda Young. After hitting record levels in 2022, tax collections dipped in 2023 because of reduced capital gains realizations and higher tax credit claims.
But compared to the pre-Biden CBO projections, actual revenues were $237 billion higher than anticipated. Revenues that outperformed expectations by 6 percent did not grow the deficit.
The entire increase in the deficit relative to the pre-Biden projection for fiscal year 2023 is due to spending being $970 billion, or 19 percent, higher than predicted.
Leading the way in driving spending higher were $659 billion in interest payments, which exceeded the original forecast by an astonishing 137 percent.
Interest costs surpassed expectations significantly due to both interest rates and the amount of debt being financed surging past what was anticipated back in 2021.
The CBO initially estimated that the interest rate on 10-year Treasury Notes at this point would be a mere 1.58 percent. However, rates now exceed 4 percent.
Food stamp spending in 2023 exceeded the initial projections by 73 percent, with the average monthly benefit surpassing estimates by 61 percent. In 2021, the Biden Department of Agriculture altered the calculation used to determine food stamp benefit payments. The CBO estimated that the increase in welfare benefits will cost taxpayers up to $300 billion over 10 years.
Biden’s American Rescue Plan Act contributed to the surge of spending, including expanded ObamaCare subsidies for the wealthy and tens of billions in bailouts for poorly run union pensions.
Other laws increased spending on green infrastructure, veterans’ benefits, subsidies for chip manufacturing, and aid to Ukraine, all without even considering offsetting spending reductions elsewhere in the budget.
Of course, these spending increases are just as attributable to Congress as the president, but the primary drivers were high priorities and signature legislation of the Biden administration — and the higher inflation and interest costs they caused.
The national debt is now $2.5 trillion higher than the CBO projected it would be before Biden’s spending binge.
The nation’s fiscal trajectory is unsustainable, and Bidenomics has made things worse by growing spending and driving the deficit higher than it would have been.
American families are suffering from high inflation and lower real wages, direct consequences of irresponsible government spending.
House Speaker Mike Johnson’s (R-La.) refusal to accept further spending hikes is a commonsense first step to restoring fiscal responsibility. To get the economy and the budget on track, lawmakers must remain steadfast in their efforts to reverse the curse of overspending and the national debt.
Matthew Dickerson is director of Budget Policy at the Economic Policy Innovation Center (EPIC). He was previously a senior staff member of the House Budget Committee.
https://thehill.com/opinion/4408989-debunking-bidens-deficit-claims-one-by-one/
