The White House Claims Borrowing $16 Trillion Over the Next Decade Is Fiscally Responsible
If you can't even get close to balancing the budget when unemployment is low, tax revenues are near record highs, and the economy is booming, when can you do it?
The budget plan President Joe Biden unveiled on Monday would hike taxes, increase federal spending to unprecedented levels, and lock in budget deficits that average nearly $2 trillion annually for the next decade.
But possibly the craziest detail is the fact that the White House is trying to frame all of that as being an exercise in fiscal restraint.
No, really. In a "fact sheet" released alongside the budget, the White House touted how the proposal would cut the deficit by $3 trillion over the next 10 years. "Strong and shared growth that benefits all Americans isn't just good for working families and the economy; it will also lead to better fiscal outcomes," the administration claims, adding that Biden believes "long-term investments in our nation and its people should be paid for."
Someone in the White House might want to Google what the phrase "paid for" actually means, because Biden's budget assumes the federal government will keep borrowing at near-record levels for the next decade.
For fiscal year 2025, which begins on October 1 of this year, Biden is asking Congress to spend $7.3 trillion while the federal government will collect just $5.5 trillion in taxes. That will necessitate borrowing $1.8 trillion to make ends meet. Over the 10-year window covered by the president's budget plan, federal revenues would exceed $70 trillion, but Biden is proposing to spend $86.6 trillion.
This is what "paid for" looks like, apparently.
So what about that $3 trillion reduction in deficits that the White House is promising? That number is the result of comparing Biden's 10-year budget plan against the current baseline projections for deficits. It doesn't mean the debt will fall, or even stop rising—we'd have to run a surplus for that to happen. It only means that, if enacted, Biden's plan would result in the national debt being $3 trillion lower in a decade than what's currently projected.
But simply piling up debt at a slightly slower rate shouldn't pass for fiscal responsibility—not when the government is already $34.5 trillion in debt, and when Biden is proposing to borrow more than $16 trillion over the next 10 years. (And keep in mind that those figures don't account for any unexpected crisis—a recession, a war, etc.—that might push the government to borrow even more heavily.)
"The level of borrowing under the President's budget would be unprecedented outside a war or national emergency," notes the Committee for a Responsible Federal Budget, a nonprofit that advocates for lower deficits.
Running annual budget deficits well in excess of $1 trillion makes even less sense when you consider the current economic environment. The unemployment rate in the United States has been under 4 percent for more than two years. America's economy grew faster than any of the world's other major economies over the past year. We are relatively at peace. Tax revenue is hitting levels not seen since the 1960s, and Biden is proposing to raise taxes on corporations and wealthier Americans.
Put simply: If you can't even get close to balancing the budget under those conditions, when can you do it?
The White House should have the intellectual honesty to tell the American people that it expects them to continue financing an unstable pile of debt that will burden their children and sap long-term economic growth. To claim that this budget is fiscally responsibility merely adds insult to injury.
