Despite House Republicans’ insistence for larger spending cuts, White House press secretary Karine Jean-Pierre claimed to reporters this week that President Biden had meaningfully lowered the deficit since taking office.
One reporter said that Democratic leaders “refuse to reduce expenditures,” according to House Speaker Kevin McCarthy (R-CA), who along with the commander-in-chief has been discussing steps to lift the debt limit and enact future spending limits. Jean-Pierre first responded with a straightforward “no” when asked whether she agreed that Democrats “have a spending problem,” but subsequently added that Biden “believes that we must deal with the deficit in a real approach.”
“The President considers this very serious,” she said. “He suggested cutting down on tax incentives for carried interest loopholes, rich retirees, real estate investors, and cryptocurrencies in order to reduce the deficit.”
According to Jean-Pierre, Biden has during the previous two years cut the federal budget deficit, which is the difference between yearly tax receipts and expenditure, by around $1.7 trillion. Similar claims have been made frequently by other top White House officials, who seem to be referring to statistics from the Office of Management and Budget showing that deficits decreased from $3.1 trillion in fiscal year 2020 down to $1.4 trillion in fiscal year 2022.
The deficits in fiscal years 2020 and 2021, however, are the result of stimulus packages designed to boost economic activity during the lockdown-induced recession, one that Biden authorized after the country was no longer in a recession, which administration officials have neglected to mention. The White House also failed to point out that the $1.4 trillion deficit from the most recent fiscal year is still the highest deficit recorded prior to the lockdowns.
Jean-Pierre stated that the budget framework unveiled by the White House earlier in the year would reduce deficits by $3.0 trillion over the next ten years, aside from the references to suggested tax increases for billionaires, harsher tax penalties on company stock buybacks, and decreases in subsidy expenditures. In the meanwhile, House Republicans approved a package that would lift the debt limit until the beginning of the next fiscal year, restrict expenditure at levels from the fiscal year 2022, and permit 1% yearly increments.
The national debt limit, which was set by Congress at $31.4 trillion, was surpassed earlier this year due to legislation that prohibits the government from spending more than that amount. Treasury Secretary Janet Yellen along with other officials have cautioned that further talks might result in a failure to raise the debt limit before June 1 and could trigger a global financial catastrophe if the country defaults on its debts.