During a speech that Joe Biden gave last Wednesday, he repeated a claim that he’s been making quite a bit lately. After seeing some of the only positive financial news to come out during his presidency (a slight reduction in the deficit in 2021), Biden happily took credit for that. He said, “Let me remind you again: I reduced the federal deficit. All the talk about the deficit from my Republican friends, I love it. I’ve reduced $350 billion in my first year in office.” It’s a pretty good line for a president who is struggling to find anything positive in the news about him and it’s a figure that Republicans should be at least somewhat pleased to see, no matter the root causes. Fair enough.
But were Joe Biden’s policies actually responsible for the slip in the deficit? You’ll get a fairly good idea as to the answer when you learn that a fact-checker from none other than CNN was presented with that claim and gave it a resounding thumbs down. That’s akin to seeing Biden’s social justice policies drawing criticism on The View. The fact-checker in question, Daniel Dale, claimed that if anything, Biden’s policies actually slowed the rate of deficit reduction, which could have otherwise gone significantly lower. (NY Post)
CNN’s fact-checker Daniel Dale pushed back on President Biden’s recent claim that his policies had helped to reduce the federal deficit – revealing that one expert told him that the Democrat’s assertion was “almost bizarro world” in its misrepresentation of the situation…
During a Monday appearance on CNN’s “New Day” and in a separate article, Dale noted that the federal deficit had indeed declined during fiscal 2021. However, the deficit decline was originally expected to be even larger than the figure Biden referenced.
Dale added that economic experts “still scoffed at the idea that President Biden is personally responsible for having reduced the deficit.”
Biden’s claim was referred to as sounding like it came from “Bizarro World.” And the numbers that economists are quoting clearly seems to back that up.
There are a couple of points being made here that are worth noting. First of all, we’re talking about the fiscal year 2021, not the calendar year. The deficit was falling as the country began reopening after the emergency approval of the vaccines. And that process began four months before Biden was even sworn in, under Donald Trump’s presidency. So he was only president for two-thirds of the period under discussion.
Even then, while it’s always nice to see the deficit go down (on the rare occasions that it happens), the Congressional Budget Office had earlier predicted that the deficit would decrease by $870 billion. Under that framework, under Biden’s tenure, the predicted deficit reduction was actually more than twice the actual reduction of $360 billion. So if the President wants to take credit for anything, he is free to own the deficit reduction being half a trillion dollars less than what the experts had projected.
So what actually did account for some of the reduction? We went into a massive hole in 2020 with all of the COVID relief plans that were hastily shipped out the door. In the second half of fiscal year 2021, a number of those plans were coming to an end without being immediately renewed. That staunched some of the cash drainage, though it didn’t outweigh all of the rest of the spending that was going on. To get a more accurate picture of where we stand with the deficit for the current fiscal year, keep an eye on how much money has been flushed into relief and military aid to Ukraine. None of that admittedly admirable work is free and the costs are adding up quickly. When we get the final 2022 numbers, be prepared for some additional bad news on the deficit front.