The Patriot Post® · Biden's Busted Deficit Boast

Acting as something of a cheering section, The Wall Street Journal trumpeted a Congressional Budget Office assessment that the federal budget deficit should shrink for FY2024, which ends September 30. But both the Journal and Politico reacted to the news with a backhanded compliment, as they also noted the many reasons our fiscal woes will continue.

If you want the “eyes glaze over” truth, the CBO report has a handy eight-page explanation of a simple fact: We spend way too many taxpayer dollars. And considering that the amount of money the feds are taking in has reached an all-time high, one would think we’re climbing our way out of debt. But one would be wrong.

The biggest problem deficit hawks are running into is the high interest rates. Not only have they wreaked havoc on the mortgage and personal credit markets, but according to an analysis by the Committee for a Responsible Federal Budget, the federal government this year will pay more in debt service ($870 billion) than it does for net Medicare spending ($851 billion) and a little constitutionally authorized line item called national defense, which checks in at $822 billion.

For his part, Joe Biden has been lying about his fiscal management from day one. Our late friend Lewis Morris noticed Biden taking deficit-lowering credit for the pre-planned expiration of COVID spending back in 2022, and Nate Jackson reminded us a few weeks back that the Donald Trump/Paul Ryan tax cuts increased revenue significantly. “The entire ‘cost’ formulation for tax cuts depends on two things: accounting gimmicks, and the fundamental statist presupposition that the money belongs to the government in the first place and you’re just allowed to keep some of it,” as Jackson pointed out. “That’s a sinister lie, and too many Americans fall for it.”

But the CBO says the situation is slightly better than it was a year ago. While Joe Biden may try to take credit, the true reason we have ink in a slightly paler shade of crimson is the conservative cadre in the House. As James Freeman writes in The Wall Street Journal:

Though he spent much of last year refusing to restrain federal spending, Mr. Biden did ultimately, begrudgingly have to deal with the demands of House conservatives. One can’t say they entirely won the day, but now the Congressional Budget Office notes changes in its projections since last May, based on the debt-limit agreement extracted by Congress. … This is just the beginning of the work required to avoid crushing our kids with debt. But $100 billion this year is a start and considering how few of Washington’s levers of power are controlled by people who want smaller government, it couldn’t have been easy.

Yet those of us who make the economy run have reason for worry. As economic policy analyst Veronique de Rugy notes: “There is an enormous fiscal challenge coming our way. It starts in 2025 with the expiration of major provisions of the 2017 tax cuts, the reinstatement of the debt ceiling, the end of Fiscal Responsibility Act discretionary-spending limits, and the reinforcement of Statutory PAYGO. Then, within the next decade, Social Security and Medicare will face insolvency.”

In a decade, the CBO projects annual spending will approach $10 trillion, which is mind-boggling when you remember that the annual outlay was just $2 trillion at the dawn of this century. But a lot of money is coming into the government as well, as projected revenue will be close to $5 trillion this fiscal year. Had the pandemic not ruined our economy and had Joe Biden kept federal spending on a modest glide path of perhaps a 3-5% annual increase — an increase reflecting the moderate Democrat he tricked voters into believing he was — we may have indeed had true deficit relief.

Instead, it’s Mr. Cloward, meet Ms. Piven. As Freeman ponders: “We live in a time with no depression, no world war (at least not yet), no banking crisis, no more Covid panic, and low unemployment — and the feds are still spending trillions beyond what they collect in taxes. What are they planning to do if we face an actual emergency?”

Let’s pray for leaders who keep us from finding out.