Biden’s Deficit Spin
Fast forward to July, when the CBO was able to take into account the new spending approved by Biden. Instead of an $874 billion drop in deficits between 2020 and 2021, the deficit was then projected to drop just $126 billion — from $3.13 trillion to $3 trillion. Moreover, the combined deficits for 2021 and 2022 were projected to total nearly $4.2 trillion — $842 billion more than the February forecast.
“It’s pretty silly,” Marc Goldwein, senior vice president and senior policy director at the Committee for a Responsible Federal Budget, said of Biden’s deficit-cutting claims. “He [Biden] didn’t cut the deficit, he increased it.”
“They are taking credit for the fact that deficits fell in 2021-2022,” Goldwein said. “If they had done nothing, deficits would have fallen by $1 trillion. They fell by much less than they were going to.”
We should also note that while Biden credited “the budget I submitted” last year for reducing deficits, the FY 2022 budget Biden proposed in May 2021 did not become law. As we have explained in the past, president’s budgets are largely symbolic statements of priorities, not legislation on which Congress actually votes.
“Congress never did pass anything like Biden’s budget,” Howard Gleckman, a senior fellow in the Urban-Brookings Tax Policy Center, told us via email. Congress “did finally pass an omnibus appropriations bill half way through the fiscal year,” he said. “But it funded most programs at prior year levels plus a small bump, and included none of Biden’s ambitious tax increases.”
Ultimately, CBO said FY 2021 ended with a deficit of nearly $2.8 trillion—about $360 billion less than the deficit in 2020. That’s similar to the $350 billion figure Biden uses. CBO noted that the deficit for 2021 ended up smaller than it had projected in July “mostly because income tax receipts were greater than CBO projected.”
