Maya MacGuineas is president of the nonpartisan Committee for a Responsible Federal Budget.
But the administration’s record is, sadly, the opposite of what it argues. Since entering office, the president has approved policies adding $4.8 trillion to the deficit over the next decade. This is an extraordinary sum, which makes it all the more astonishing that the administration would try to pull off this claim.
If ever there were a moment for responsible budgeting, this is it. The debt is at near-record levels. Inflation is soaring, in part because of excessive government spending. The country was already on track to run trillion-dollar deficits before covid hit, and then on a bipartisan basis, Congress borrowed trillions to fight the crisis — a response that made sense but further bloated the debt.
The Biden administration’s first major initiative was to borrow more, ostensibly to fight the covid crisis, though the $1.9 trillion American Rescue Plan was well in excess of what was needed and filled with plenty of non-covid spending. Even if, as the administration argued, it was better to err on the side of too much than too little, the administration should have urged a course correction when it became clear the bill significantly overshot the needs of the economy and that inflation posed a growing risk. Instead, the administration doubled down on this initial borrowing through a series of laws and executive actions.
Specifically, the administration and Congress went on a bipartisan borrowing binge for higher appropriations, infrastructure investments, spending on microchips, veterans’ benefits and aid to Ukraine, adding $1.4 trillion more to the debt. Rather than insisting the bills be paid for, Biden gave them full-throated support.
And that wasn’t all. The White House added to this fiscal irresponsibility by initiating an additional $1.1 trillion of borrowing through the aggressive use of executive actions, including his most recent unpaid-for student debt relief plan. The debt relief alone will cost a half a trillion dollars by my organization’s estimate. Others put the price tag even higher.
All this new borrowing is adding $700 billion more of new interest costs over a decade at a time when interest payments are already the fastest-growing part of the budget.
None of this is to disagree with the substance of any of the individual pieces of legislation. Public infrastructure investment, helping veterans, assuring economic competitiveness, aid to Ukraine and addressing the unaffordability of higher education are all worthy objectives. But given where we are in the economic cycle, our urgent inflation challenge, our dependence on other nations to help pay for our spending and the debt load we have already piled onto future generations, these items should be paid for.
There was a brief moment of fiscal responsibility in the midst of this borrowing spree when Sen. Joe Manchin III (D-W.Va.) managed to wrestle down the excessive, multitrillion-dollar Build Back Better framework into the Inflation Reduction Act, which will reduce deficits by $240 billion. The law represents the first piece of major deficit reduction in more than a decade — and the first in a quarter-century that relied on identified savings, rather than unspecified spending caps. That makes the legislation somewhat of an unheard-of accomplishment: a bill that became more responsible through the negotiation process. But even just the unilateral borrowing from the president far outweighs the savings from this.
Biden is not alone in his fiscal irresponsibility. President Donald Trump added $7.5 trillion to the deficit ($4 trillion excluding bipartisan covid relief). Given the strength of the pre-covid economy, it was particularly reckless for Trump to endorse trillions in tax cuts and spending that were not paid for.
But two damaging fiscal legacies do not cancel each other out. They merely leave the country further in debt and more vulnerable to higher inflation and interest rates, increased risk of recession and geopolitical risks.
A recent paper presented at the Federal Reserve’s meetings in Jackson Hole, Wyo., argues that fighting inflation through monetary policy becomes much more difficult once fiscal authorities lose credibility. The United States is certainly vulnerable to this phenomenon. Our appetite for borrowing seems insatiable. The Social Security and Medicare trust funds are projected to be insolvent in a matter of years. And we have so much debt that even small increases in interest rates lead to huge increases in costs. An increase of just one percentage point above projections adds an average of $270 billion to the deficit every year.
After 19 months and $4.8 trillion in new debt, Biden has done far more to add to our deficits than address them. He can claim the mantle of fiscal responsibility all he wants. The math tells a different story.