A CNN fact checker went after President Biden for claiming his policies helped reduce the federal deficit.
“Let me remind you again: I reduced the federal deficit,” Biden said last week. “All the talk about the deficit from my Republican friends, I love it. I’ve reduced $350 billion in my first year in office. And we're on track to reduce it, by the end of September, by another 1 trillion, 500 billion dollars -- the largest drop ever."
President Biden: "I reduced the federal deficit. All the talk about the deficit from my Republican friends, I love it. I've reduced it $350 billion in my first year in office. [...] I don't want to hear Republicans talk about deficits and their ultra-MAGA agenda." pic.twitter.com/rhbBkja5E1— The Hill (@thehill) May 4, 2022
One expert told CNN Biden's claim is "almost bizarro world."
The CNN fact checker noted that while the deficit did decline in fiscal year 2021, what Biden personally claimed to do is "distorting reality."
The deficit has been smaller under the Biden administration than it was at the end of President Donald Trump's tenure. But the deficit has been bigger under the Biden administration than the nonpartisan federal Congressional Budget Office had projected it would be if the Biden-era federal government stuck with the laws that were in effect when Trump left office in early 2021. [...]The roughly $2.8 trillion deficit in fiscal 2021, during which Biden was in office for more than eight months, was about $360 billion lower than the roughly $3.1 trillion deficit in fiscal 2020, Trump's last full fiscal year in office.A $360 billion decline is certainly substantial. The Congressional Budget Office, however, had estimated at the beginning of Biden's tenure that the fiscal 2021 deficit would be a decline of more than $870 billion if the Biden administration did not implement new policy. (CNN)
Of course, new policy was implemented under the Biden administration, such as the pandemic relief package.
So why, then, has the federal deficit gotten smaller at all under Biden, even if it has been higher than was originally projected at the time Biden took office?
There are a number of factors at play -- including the economic rebound for which White, Goldwein and others say Biden can fairly take some credit. But the main factor is that temporary pandemic relief spending has been ending, bringing federal spending down from extraordinarily high levels.
There was an explosion of short-term spending under Trump after the pandemic hit in 2020. Combined with the reduction in tax revenue largely caused by the pandemic-related economic crash, that temporary spending caused the deficit to skyrocket to an all-time record in fiscal 2020 -- the roughly $3.1 trillion that was more than triple the deficit of the year prior.
So a decline from unprecedented 2020 deficit levels was always very likely. And even a big decline from those 2020 levels doesn't mean the deficit is low by historical standards. (CNN)
Even Daniel Dale mocked Biden for trying to take credit for cutting the deficit when massive COVID relief measures simply expired under his watch.— Matt Whitlock (@mattdizwhitlock) May 10, 2022
If Biden had his way the deficit would be MASSIVELY higher as a result of his originally proposed $5T Build Back Better. https://t.co/1ja0qHNOC1