The amount of money spent by President Joe Biden and Democrats is one of the biggest complaints Republicans have with them. The President of the United States signed the American Rescue Plan, a $1.9 trillion relief package, just weeks after taking office. The assistance arrived just a few months after former President Donald Trump approved another relief package that included direct payments to US citizens. There was some speculation as to why Biden signed the law since the prior legislation’s funds had not yet run out.
Despite the federal government’s massive expenditure since 2020, Biden has begun to take credit for deficit reductions. Not only is that a precarious position, but the Congressional Budget Office (CBO) just delivered awful news to the American people.
The CBO Report
The CBO issued a study warning that the deficit is out of control. The deficit is the amount of money spent by the government that exceeds its receipts. Simply explained, if the government receives $5 per year but spends $35, the deficit is $30.
In the case of the United States, the federal budget deficit in 2023 was $1.4 trillion. Today, the deficit is at 5.3% of GDP in 2023. Based on the policies passed, the agency expects to grow in the future years. The CBO forecasted a $2.7 trillion budget deficit in 2033. The deficit is predicted to be 6.1% of GDP in 2024 and 2025, before declining in 2026 and 2027.
Government outlays (expenditures) will rise from 23.7% of GDP this year to 24.9% in 2033, while revenue will be just about 18.1% in 2033. This is due, in part, to higher spending on America’s aging population.
At an address on MLK Day, Just The News reported Biden said, “This year, government deficit is down $1 trillion-plus. That is a proven fact.” Republicans, he said, are “fiscally demented.” The CBO estimates that the federal deficit for the fiscal year 2021 will be $2.8 trillion. Nonetheless, the Treasury Department reported a $1.38 trillion national deficit in the fiscal year 2022.
During 2021 and 2022, the deficit shrank by $1.40 trillion. According to the CBO, if no legislative adjustments are done, the deficit would continue to grow and the debt will reach 118% by 2033, posing a challenge for Biden. He hasn’t actually enacted any deficit-reduction plans. The only reason it has plummeted is that government relief spending has decreased — and this is likely to continue as America recovers from the healthcare crisis.