A current and former director of the Congressional Budget Office (CBO) said that President Joe Biden has taken credit for lowering the federal deficit, but the reality is a bit more complicated.
According to projections from the CBO, the federal deficit is projected to shrink to $1 trillion in 2022, down from $2.8 trillion last year.
Earlier this month, President Biden said that the administration is positioned for “the biggest decline in a single year ever in American history,” after taking credit for a post-COVID lowering of the federal deficit.
“Let me remind you again: I reduced the federal deficit. All the talk about the deficit from my Republican, friends, I love it. I’ve reduced $350 billion in my first year in office,” said Biden in a speech earlier this month, as reported.
The current director of the Congressional Budget Office, Phillip Swagel said that presidents get the blame, or credit, for what takes place during their administration, but there were many factors that lower the federal deficit.
Swagel also said that the lowering of the deficit was “in part because there was immense emergency spending during the pandemic and that spending is ending.”
He also credited the economic rebound following the COVID lockdowns, saying: “As the economy has come back, so too have tax revenues, and so that is contributing to the lower budget deficit.”
“With the recovery in the economy, it was expected that the deficit would get smaller. We’re seeing the tax revenue and the number of people on unemployment go down, and so there was going to be improvements,” said Former CBO Director Douglas Holtz-Eaken.
“He didn’t really do anything, he was there while it happened. It’s not like his administration went out and said, okay, we’re going to do a big tax increase or we’re doing to do $400 billion of spending cuts. They’ve done neither,” Holtz-Eaken added.
Swagel credited both legislative actions and the rebounding economy, saying: “What CBO would say is the deficit is coming down under current law. It’s natural the president would take credit when the economy is strong. And of course, it’s natural that when the economy is weak or if inflation is high, people will look to the president for that as well.”
The report on Fox News continued: “With the recovery in the economy, it was expected that the deficit would get smaller,” he said. “We’re seeing the tax revenue and the number of people on unemployment go down, and so there was going to be improvements.”
Holtz-Eaken said the expiration of the CARES act and the fact that there was not another American Rescue Plan made the deficit look much smaller.
“He didn’t really do anything, he was there while it happened,” he said. “It’s not like his administration went out and said, okay, we’re going to do a big tax increase or we’re doing to do $400 billion of spending cuts. They’ve done neither.”
“What CBO would say is the deficit is coming down under current law,” Swagel said, crediting both legislative actions and the rebounding economy.“
