The White House claimed that the administration “lowered the deficit with the single largest one-year reduction in American history.” However, a user-generated fact check noted that stimulus packages approved in response to the lockdown-induced recession inflated budget deficits for two fiscal years, producing a significant decline in fiscal year 2022.
The fact check, which cited data from the Treasury Department, also noted that the most recent budget deficit is still the fourth largest in history and is 41% larger than the shortfall witnessed in fiscal year 2019. The federal deficit surged from nearly $1 trillion in 2019 to $3.1 trillion in 2020, according to data from the Office of Management and Budget, while the current deficit of $1.4 trillion exceeds the last pre-recession deficit by roughly $400 billion.
President Joe Biden has nevertheless argued that the supposed tapering of the deficit justifies further spending. He said during a speech ahead of the midterm elections that “record deficit reduction includes the cost of my student loan plan and everything else we’re paying for.” One estimate from the Congressional Budget Office predicts that the overall cost of the student debt cancellation initiative could reach $400 billion.
“On my watch, things have been different. The deficit has come down both years that I’ve been in office,” Biden commented. “And I just signed legislation that’s going to reduce it even more in the decades to come. Now Republicans in Congress are doubling down on their commitment to explode the deficit again. Just this week, Republican leaders said if they get their way, they’re going to extend the Trump tax cuts, which are due to expire in a couple years.”
The White House’s legislative agenda will contribute more than $4.8 trillion in new deficit spending between 2021 and 2031, according to an analysis from the Committee for a Responsible Federal Budget. Removing the effect of the American Rescue Plan, a $1.9 trillion package greenlit weeks after Biden’s inauguration, implies $2.5 trillion of new deficits.
Earlier this month, the White House also claimed on Twitter that senior citizens would receive “the biggest increase in their Social Security checks” in a decade thanks to the leadership of the Biden administration. Another user-generated fact check noted that the larger benefits occur because of the “annual cost of living adjustment, which is based on the inflation rate.” The White House, which has denied that the administration’s spending agenda exacerbated inflationary pressures, subsequently deleted the post.
Inflation rose 7.7% year-over-year as of October, according to data from the Bureau of Labor Statistics, even as prices for categories such as food, energy, and shelter continued to increase. “We are making progress on bringing inflation down, without giving up all of the progress we have made on economic growth and job creation,” Biden said in a statement. “My economic plan is showing results, and the American people can see that we are facing global economic challenges from a position of strength.”
Rising price levels will impact households preparing to celebrate Thanksgiving, as the cost of an eight-pound turkey hen increased from $1.15 per pound last year to $1.47 per pound this year amid an outbreak of the avian flu affecting poultry flocks nationwide. Meanwhile, expected growth in holiday retail sales between 6% and 8% is expected to be completely eclipsed by rising price levels, according to data from the National Retail Federation.