As lawmakers scramble to avert a looming government shutdown, the dark cloud of America’s financial reckoning looms ever larger. New projections indicate that the U.S. federal budget deficit will nearly double to $2 trillion this year. With Joe Biden at the helm, the nation seems set on an unsustainable and perilous fiscal path.
According to the Committee for a Responsible Federal Budget (CRFB), a nonpartisan watchdog, the estimated deficit jump for the 2023 fiscal year is eye-watering. “This would be the highest deficit we’ve ever had outside of a recession or national emergency,” stated Marc Goldwein, a senior policy director at CRFB. There are multiple culprits for this increase, including soaring inflation, pricier interest payments, and dwindling tax receipts. But the lion’s share of the blame lies squarely with the Biden administration’s policy mishaps and financial imprudence.
The surge in the deficit occurs as Biden tries to present himself as a fiscal hawk. During a speech on Labor Day, he boasted of cutting the federal budget deficit by $1.7 trillion — a repeated claim that has failed the fact-checking test time and again. In reality, much of the previous reduction came from the expiration of COVID-19 emergency spending and had little to do with Biden’s initiatives. His audacious declarations become especially hollow when we consider the actual trajectory of federal spending under his watch.
It’s crucial to note that 2022 was an unusual year. It saw a massive surge in revenue through capital gains as Americans cashed in on a booming stock market. However, the market has not sustained its performance, leading to a sharp decrease in capital gains tax revenue this year. A similar windfall in general tax collection in 2022 was primarily due to inflation inflating nominal incomes, not any ingenious policy maneuver by the Biden administration.
Social Security and Medicare costs are also ballooning due to inflation. Goldwein says, “So we went from $500 billion is the normal, to $1 trillion is the normal, to $2 trillion is the normal in less than a decade.” The startling figures don’t even include Biden’s $400 billion student loan cancellation plan, which the Supreme Court thankfully struck down.
To blame Biden alone for the nation’s fiscal woes would be an oversimplification. However, there’s little evidence that his policies are steering America away from the iceberg. His administration seems more concerned with short-term political wins than with addressing the structural deficits that threaten long-term economic stability.
The federal budget deficit will explode to $2 trillion this year – after Biden said it would decrease.
We need to control the runaway spending by this administration – and the budget fight this month is the time to do it.
— Rep. Andy Harris, MD (@RepAndyHarrisMD) September 3, 2023
Congressional Republicans are increasingly vocal about the need for restraint. As Rep. Andy Harris (R-MD) noted on X, formerly known as Twitter, “We need to control the runaway spending by this administration.” Such calls for fiscal responsibility are all the more urgent as the Biden administration pushes for higher taxes, thereby stifling the private sector and further reducing tax revenue.
The consequences of this kind of fiscal irresponsibility are real. Goldwein warns of soaring interest rates across the board, from mortgage to student loan rates. The long-term toll on everyday Americans, already grappling with the worst inflation in four decades, could be devastating.
As lawmakers negotiate to keep the government running, it’s time to reevaluate the nation’s fiscal priorities. But for that to happen, the Biden administration needs to shake off its delusions of budgetary prudence and confront the financial quagmire it is sinking us into. Until then, the clock on America’s fiscal health keeps ticking ominously.