Biden administration touts historic deficit reduction as pandemic programs expire, taxes increase
The federal budget deficit fell an unprecedented $1.4 trillion in fiscal year 2022 to $1.375 trillion, buoyed in large part by the expiration of emergency COVID-19 pandemic aid.
Statistics published by the Department of the Treasury on Friday showed the deficit registering $40 billion lower than the level forecast by President Joe Biden’s fiscal year 2023 budget request, positive news for Democrats with less than three weeks remaining until the November midterm elections.
FEDERAL DEFICIT TOTALED $2.77 TRILLION IN 2021, SECOND HIGHEST AFTER 2020
Overall government spending registered $6.272 trillion. Those figures were $420 billion higher than the levels projected by the administration’s fiscal year 2022 budget request but still represented an 8.1% decrease compared to fiscal year 2021. Meanwhile, incoming revenue rose to $4.896 trillion, driven largely by “higher individual and corporation income tax collections,” according to the administration.
The Treasury Department highlighted that, as a percentage of GDP, the deficit for fiscal year 2022 fell to 5.5%, a decrease of 6.8 percentage points compared to the year prior.
Treasury Secretary Janet Yellen claimed that Friday’s report “provides further evidence of our historic economic recovery, driven by our vaccination effort and the American Rescue Plan” and Biden’s “commitment to strengthening our nation’s fiscal health.”
“President Biden’s recently enacted economic plan will build on the economic gains of the past two years,” she continued. “The Bipartisan Infrastructure Law, CHIPS and Science Act, and Inflation Reduction Act will help put the country on a path to sustained economic growth, create new and good-paying jobs across the country, and strengthen American economic resilience for years to come.”
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Shalanda Young, the White House’s director of the Office of Management and Budget, said Biden remains “focused on growing our economy from the bottom up and the middle out.”
“Under his leadership, more Americans are working today than at any point in our country’s history, our economy has added more than 10 million jobs, manufacturing is booming, and we cut last year’s deficit in half,” Young said in a statement. “With the historic Inflation Reduction Act, the Biden-Harris Administration is going to continue building on this progress and delivering for the American people — cutting everyday costs for families, tackling the climate crisis, and ensuring the biggest corporations pay their fair share.”