The deficit has been less of a contentious political issue during the Joe Biden presidency than during some others. But the president has come up with a plan to reduce it.
The politics of the deficit and the national debt are often very strange. The national debt, for the most part, always rises, while the deficit tends to rise and fall, largely depending on economic conditions, or on whether there’s any kind of major crisis (like the 2008 economic crash or COVID-19) that requires massive, sudden government expenditures.
Often, the deficit has disappeared as a political issue during Republican presidencies, only to suddenly re-emerge again once a Democrat is in office, especially if Republicans are in control of Congress. This is the case currently, with new House Speaker Kevin McCarthy calling for the “elimination” of budget deficits in the upcoming debt ceiling talks.
Meanwhile, figures in both parties have said in the past that deficits aren’t worth worrying about. Then-Vice President Dick Cheney once said “Reagan proved deficits don’t matter.” There’s an entire, albeit controversial, the body of thought on the left, known as Modern Monetary Theory, which argues, among other things, that everything you think you know about deficits is wrong.
Now, a report says President Joe Biden has a plan for deficit reduction.
According to Axios, Biden “plans to make deficit reduction a centerpiece of his 2024 budget and aims to pressure Republicans to focus on government revenue — not just spending.”
What does Joe Biden’s budget plan propose?
“The White House is seeking a tactical advantage in its looming showdown with congressional Republicans on the debt limit — and wants to test Republicans’ commitment to lowering annual deficits over the next decade.”
The president plans to propose tax increases on wealthy people and corporations, while also claiming $238 million in deficit reduction from the Inflation Reduction Act, which passed last year. He also plans to “slow the rate of growth” for some programs.
“Instead of cutting the number of audits of wealthy taxpayers, I signed a law that will reduce the deficit by $114 billion by cracking down on wealthy tax cheats,” the president said earlier this week in his State of the Union address, per the White House’s transcript. “In the last two years, my administration cut the deficit by more than $1.7 trillion – the largest deficit reduction in American history.”
That claim about deficit reduction is technically true, although it has more to do with the expiration of massive amounts of COVID-era aid than with anything else.
Elsewhere in the speech, Joe Biden said that he will offer his “fiscal plan” next month, which “will lower the deficit by $2 trillion,” without cutting Social Security or Medicare.
The Hill reported earlier this month that Biden will introduce his budget on March 9, with an eye towards encouraging House Republicans to release their own budget proposal and let voters compare the two.
It’s important to note when discussing budget talks, that the “president’s proposed budget” is not, for all intents and purposes, real, and that is the case across essentially all presidencies. The budget is merely a messaging document that will not be signed into law as is, and everyone involved with the process knows this. This was also true of former Rep. Paul Ryan’s “Path to Prosperity” budget, which was much more of a messaging document than something meant actually to become law.
At best, the president’s budget represents the first offer by the White House in budget negotiations with Congress. The House, under Republican leadership, will not be agreeing to the tax increases that Biden proposes and will almost certainly call for greater spending cuts.
As is nearly always the case, the actual budget that passes will end up being a compromise between the parties, often in the form of a continuing resolution that prevents a government shutdown and keeps the government funded for some period of time.
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Expertise and Experience: Stephen Silver is a Senior Editor for 19FortyFive. He is an award-winning journalist, essayist and film critic, who is also a contributor to the Philadelphia Inquirer, the Jewish Telegraphic Agency, Broad Street Review and Splice Today. The co-founder of the Philadelphia Film Critics Circle, Stephen lives in suburban Philadelphia with his wife and two sons. Follow him on Twitter at @StephenSilver.
February 10, 2023 at 10:50 pm
Republican trickle down economics has never worked, but trickle up is still working just fine.
February 10, 2023 at 10:55 pm
Just another one liner taught in how to win in politics.
Just like we need an investigative committee…or should I say another financial boondoggle to buy my new car.
February 11, 2023 at 5:33 pm
Raising taxes to cut the deficit is akin taking a better camera to Loch Ness to capture a photo of Nessie. Neither will work.
The truth of the mater is this: It is spending, and only spending that causes the deficit.
I have a spreadsheet that graphs Federal spending and revenue from 1940 to the present. All of the numbers are adjusted for inflation AS WELL AS population. IOW, it is constant dollars per person. Population is there because taxes and spending go up over time because the population is always increasing.
What the numbers show is in all of the years since 1961 only in 1968 and 1998-2001 did revenue exceed spending. What is notable here is the period of 1998-2001. In this period spending declined over all 4 years. This was due to the deal Bush-41 and Gingrich made to hold spending level. The result was a balanced budget.
In 2001, the lowest debt year, every American sent $10243 to the Treasury. In 2021, every American sent $11,031 — adjusted for inflation. OTOH, looking at spending, in 2001 the Federal Government spent only $9039. In 1021 it spent $18295.
My point here each American has been sending every more money to the feds (as measured in constant dollars) in almost every year. It is the government who spends more, and more, and MORE each year.
Raising taxes does not close the deficit, only reducing spending works.
February 11, 2023 at 7:08 pm
Since you are an expert in taxation and deficits, how would you fix the Trump tax cuts that increased the deficit by $1.9 trillion over 11 years? Any chance that the tax burden has increased for individuals due to the reduced taxes being paid by the rich? Duh.
February 13, 2023 at 2:29 am
February 13, 2023 at 5:37 pm
It is clear that Americans want a high benefit society similar to European societies.
This will require general tax increases on the rich and the not so rich.
High benefit, low tax societies do not exist.
However low tax low benefit societies can prosper see America 1870.
The Social security tax should have its income limit removed, the medicare tax should be increased to 15% to cover the yearly 2 trillion for Medicare and Medicaid.
Alternatively benefits could be cut, but not without agreement from the American people.
February 13, 2023 at 8:00 pm
Economies under Trump and Reagan soared. Trickle down works. If you ‘tax the rich’ the rich will just take their money and leave. Tax cuts allow them to invest which creates jobs.
February 14, 2023 at 9:01 pm
The rich don’t spend tax cuts, but poor do. Do you have any idea what the multiplier effect is as it relates to the economy?
February 15, 2023 at 2:18 pm
I’m not going to argue with you kids about trickledown (it does work, by the way), but instead take issue with the stupid title that Biden wants to tax the rich.
Who does he really want to attack? The poor. 87,000 new IRS agents? New laws regarding the reporting of tips for people in the service industry? Like all leftists, Biden’s crew doesn’t want people to move up the economic ladder.
And he doesn’t give a rat’s rear end about slashing a deficit. If he did he would have spend an additional 9 trillion bucks we didn’t have.
February 17, 2023 at 3:23 am
If you took 100% of the money of every millionaire in the US, it would fund the government for a few months. Do the math. You also cannot pay down the debt through taxation. The only way out is to grow the economy out of it. Almost all tax cuts have been accompanied by a growth in revenue to the government.
If Biden wants to run on fiscal responsibility he needs to start with telling us which program he intends to reduce. The Dems have never seen a program they want to cut other than defense, so its not going to fly. They basically run on sending out stimulus checks.
All you have to do is look at the finances of Illinois, California, and New York to see what Dems fiscal plans look like.
February 17, 2023 at 6:55 am
so much good information on here, : D.