Biden’s budget aims to cut the deficit
President Biden’s 2023 budget request aims to reduce the federal budget deficit by $1 trillion over a decade as the administration seeks to blunt the impact of America’s years-long borrowing spree.
The budget estimates deficits at $14.4 trillion over the next decade, down from the current estimate of $15.4 trillion. He also notes that the deficit this year is set to shrink by more than $1 trillion, which would be the largest single-year decline on record.
Some of that winnowing will come from raising taxes on the wealthy and corporations, with about $1.5 trillion of that revenue going toward deficit reduction.
The focus on deficits is a game changer for Washington, which has spent the past few years borrowing huge sums of money to pay for pandemic aid, additional government spending and huge tax cuts. But the ballooning deficit has started to become a political issue for Mr Biden, with members of his own party criticizing the gap between what America spends and what it takes in and citing it as a reason to reject additional spending to finance the president’s policy. initiatives.
Mr Biden briefly mentioned his deficit reduction efforts in a statement accompanying his budget, saying his policies would further close the gap through “economic growth that has raised incomes and ensuring that billionaires and big companies pay their fair share.
Still, budget watchdogs have warned that the country’s debt levels remain dangerously high as a share of the economy.
“Unfortunately, this budget leaves debt on an unsustainable path and lacks important detail about how it would structure the core of its agenda or address provisions that are due to expire,” said Maya MacGuineas, chair of the Committee for a Responsible Federal Budget. .
MacGuineas praised the Biden administration for taking deficit reduction seriously, but said more needed to be done.
“The $1 trillion in net deficit reduction requested in this budget should be a floor, not a ceiling, on the amount of savings to be achieved this year,” she said.
The budget does not reflect legislation currently being negotiated in Congress, but the White House assumes such legislation will not add to deficits in its projections.
The focus on deficit reduction seemed, at least in part, intended to win over lawmakers such as Senator Joe Manchin III, a Democrat of West Virginia, who has repeatedly balked at supporting government spending proposals. Biden administration due to concerns over the national debt.
Last year, Mr. Manchin repeatedly forced the White House and Senate Democrats to scuttle legislation that would have increased spending on climate change policies and the social safety net.
While the economic recovery and shrinking stimulus spending in the wake of the pandemic explain much of the reduction, new proposals, such as raising taxes on the wealthiest Americans, could help close the gap. between what the United States spends and what it brings in through taxes and other income.
In addition to courting Mr. Manchin and other moderate Democrats, the White House has also appeared keen to deflect criticism from Republicans who have worked to frame the White House’s agenda as fiscally irresponsible ahead of the upcoming midterm elections. .
“My administration is on track to reduce the federal deficit by more than $1.3 trillion this year, cutting the deficit in half from the last year of the previous administration and delivering the largest deficit reduction on one year in the history of the United States,” Mr. Biden said in a statement accompanying his budget request.