President Biden on Friday released recent figures showing the federal budget deficit fell by $1.4 trillion in fiscal 2022 from a year earlier as Democrats work to fend off Republican attacks on the economy and inflation. before the midterm elections.
Biden touted the decline as “the biggest one-year drop in American history” in comments to reporters on Friday.
“Let me repeat that. The biggest decline ever recorded for the federal deficit,” he said. “Let me be clear. This record deficit reduction includes the cost of my student loan plan and everything we are paying.”
Treasury Secretary Janet Yellen also marked the numbers as “further evidence of our historic economic recovery” on Friday, shortly after her office released data showing the deficit hit $1.375 trillion in fiscal 2022, which ended last month.
The Biden administration said the figure was $40 billion less than Biden’s 2023 budget and half the 2021 fiscal deficit, which hit $2.8 trillion, the second-largest in history. The new report also found that, as a percentage of gross domestic product, the 2022 fiscal deficit “was 6.8 percentage points lower than the year before.”
“The president’s economic plan is focused on growing our economy from the bottom up and from the middle out,” Shalanda Young, director of the Office of Management and Budget, said in a statement. “Under his leadership, more Americans are working today than at any time in our country’s history, our economy has created more than 10 million jobs, manufacturing is booming, and we’ve cut last year’s deficit in half.”
However, budget hawks and conservatives have seized on the news, sounding a different note by targeting Democratic relief related to the pandemic, such as the American Rescue Plan and the Biden administration’s recent student loan forgiveness plan, which they deemed expensive. amid rising inflation.
“We borrowed $1.4 TRILLION last year. This is not an achievement – it is a reminder of how precarious our fiscal situation remains,” Maya MacGuineas, chair of the Committee for a Responsible Federal Budget, said in a statement.
“The entire decline in the deficit between 2021 and 2022 can be attributed to the expiration of temporary COVID relief, not due to a renewed era of fiscal responsibility,” she said, estimating that the “deficit would have been nearly $400 billion smaller.” if the Biden administration hadn’t decided to enact an inflationary, expensive, regressive student debt cancellation plan in August.”
The news on Friday comes weeks after Biden signed a climate, health and tax bill, dubbed the Inflation Reduction Act, into law.
Democrats touted the plan, a key part of the president’s agenda, as a tool to fight inflation by committing billions to deficit reduction. And while some experts agree the plan could be a step in the right direction to get the country’s finances back on track, many have downplayed the impact the plan would have on rising costs.
The press conference comes as Republicans have been hammering Democrats into the economy to win over voters unhappy with rising prices weeks before the 2022 midterm elections.
At the same time, the Democratic leadership acknowledged that the party has room to improve its messages on inflation, as recent polls show that Republicans are gaining the upper hand in major races.
During Friday’s press conference, Biden noted that “the polls are everywhere” but expressed optimism that Democrats will see “another shift back to our side”. [in] closing days”.
“We are starting to see some of the good news about the economy. Gas prices have dropped sharply in 46 of the 50 states because of what I’ve done. We’re heading in the right direction,” Biden said, before going after Republicans for “mega MAGA trickle down” policies.
“If the Republicans get what they want, the gap will skyrocket, the tax burden will fall on the middle class and the Republicans are working very hard,” the president said, pointing to proposals supported by the Republican Party in areas such as taxes and social policy. . Safety.