President Joe Biden said Thursday night: “I have been delivering real results in fiscally responsible ways.”
“We've already cut the federal deficit — we’ve already cut the federal deficit of over $1 trillion,” he said.
Facts First: Biden’s claim leaves out such critical context that it is misleading. While the annual federal budget deficit was more than $1 trillion lower in the 2023 fiscal year than it was in both the 2020 fiscal year (under President Donald Trump) and the 2021 fiscal year (partially under Trump and partially under Biden), analysts have repeatedly noted that Biden’s own actions, including laws he has signed and executive orders he has issued, have had the overall effect of worsening annual deficits, not reducing them. As in past remarks, Biden didn’t explain that the primary reason the deficit fell by a record amount during his tenure was that it had skyrocketed to a record high at the end of Trump’s term because of bipartisan emergency pandemic relief spending, then fell as expected when that spending expired as planned.
“The deficit is a trillion dollars lower, roughly, than when President Biden took office. That’s true. But that’s driven not because he ‘reduced’ the deficit by a trillion dollars, but because when he took office it was the middle of Covid and we had been temporarily injecting huge sums of money into the economy,” Marc Goldwein, senior vice president at the Committee for a Responsible Federal Budget, an advocacy group that promotes deficit reduction and tracks the issue, said in a February interview.
The deficit hit a record of about $3.1 trillion under Trump amid the hefty pandemic-related spending in fiscal 2020. The deficit then fell under Trump and Biden in fiscal 2021 (to about $2.8 trillion) and again under Biden in fiscal 2022 (to about $1.4 trillion). But it then rose in fiscal 2023 (to about $1.7 trillion). And the jump from 2022 to 2023 would have been much bigger, from about $1 trillion in 2022 to about $2 trillion in 2023, if not for a Treasury Department accounting decision related to the Biden student debt cancellation program the Supreme Court blocked before it came into effect.
The nonpartisan Congressional Budget Office projects that the deficit will decline slightly in fiscal 2024, to about $1.5 trillion. Regardless, all of the Biden-era deficits are among the biggest in US history.
Factors out of a president’s control, like interest rates hikes, have played a role in keeping deficits high under Biden. And Biden has signed some deficit-fighting bills; his signature Inflation Reduction Act of 2022 is expected to bring down deficits by a total of more than $230 billion over a decade, while the Fiscal Responsibility Act of 2023 is expected to cut a cumulative $1.5 trillion from federal deficits over a decade.
Still, Biden’s actions have clearly added to deficits. These actions include a pandemic relief law, a bipartisan infrastructure law, a bipartisan law to spur semiconductor manufacturing, a boost to food stamp benefits and an extension of the Trump-era pandemic pause on federal student loan repayments.
Biden can fairly say that his policies have contributed to a strong economic recovery that has boosted tax revenues and thus eaten into deficits. On the whole, though, Goldwein said deficits under Biden have been “higher than they otherwise would have been because of legislation President Biden has signed into law and executive actions he’s taken.”