It’s been some time since President Joe Biden claimed his policies have reduced the federal deficit. This assertion has always been misleading, but the latest Congressional Budget Office (CBO) report on the government’s fiscal health should dispel any such notion.
On Tuesday, the CBO released an update to the Budget and Economic Outlook, indicating this year’s budget deficit is set to rise from the $1.6 trillion predicted in February to $1.9 trillion. This increase is largely attributed to Biden’s policies, notably his college debt amnesty, which added $145 billion to spending, and bipartisan expenditures on Ukraine, Israel, and the Pacific.
The CBO projects that total federal debt held by the public will reach $50.7 trillion in 10 years, $2.4 trillion higher than estimated five months ago.
Biden’s claim of reducing deficits is contradicted by the fact that the government is spending $2 trillion more than it is taking in. This narrative relies on the assumption that voters will forget about COVID.
In 2020, the federal deficit spiked to $3.1 trillion due to revenue reductions from COVID lockdowns and emergency spending to sustain the economy. This was a one-time crisis, unlike the ongoing fiscal mismanagement seen under Biden, who added $2 trillion in deficit spending this year.
After the lockdowns ended, revenue rebounded, despite Biden’s policies prolonging recovery. According to previous CBO reports, Biden’s COVID stimulus policies significantly increased spending and deficits. Consequently, Biden’s deficits were $1.4 trillion in 2022, $1.7 trillion in 2023, and $1.9 trillion in 2024. By contrast, the highest non-COVID deficit under former President Donald Trump was $980 billion.
The CBO also noted a surge in immigration under Biden, estimating 8.7 million more immigrants will enter the country by 2026 compared to normal immigration policies. Although increased immigration may slightly reduce federal deficits, it will significantly strain state and local budgets. The report states that while federal revenues may rise, state and local costs for education and healthcare will increase.
In February, the CBO reported that Biden’s immigration surge would depress wages. Many additional foreign nationals are expected to work in low-wage sectors, which would exert downward pressure on average wages and reduce the amount of capital per worker, further lowering average real wages.
The CBO attributes higher deficits, higher interest rates, and lower wages to Biden’s economic policies. This aligns with his historically low approval ratings.
