Biden’s figures for both the 2021 fiscal year (which ran through last September) and the ongoing 2022 fiscal year (which runs through the coming September) are accurate, though the $1.5 trillion figure for 2022 is a projection. But some experts on fiscal policy say Biden is distorting reality when he claims that he is personally responsible for the deficit going down.
A smaller deficit than before — but a bigger deficit than expected
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.
Expiring pandemic spending has been the main factor
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?
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.
And even with a $1.5 trillion decline from fiscal 2021, the fiscal 2022 deficit is still expected to be significantly higher than the deficit the Congressional Budget Office had projected for fiscal 2022 at the time Biden took office. Running a higher-than-expected deficit in fiscal 2021 provided more room for dramatic-sounding deficit reduction in fiscal 2022.
The quick rebound has helped, too
The deficit has a spending component and a revenue component. And it would be fair for Biden to boast about putting more revenue in government coffers through economic growth.
Joel Friedman, senior vice president for federal fiscal policy at the liberal Center on Budget and Policy Priorities think tank, said in an email that the deficit has fallen under Biden in part because pandemic measures have expired but also “because of strong economic growth” Friedman said is “related” to the pandemic measures.
The deficit did increase under Trump
While claiming credit for the deficit falling during his own presidency, Biden has also taken aim at Republicans’ fiscal stewardship — saying in his Wednesday speech that the deficit “went up every year under my predecessor, before the pandemic and during the pandemic.”