President Biden’s 2023 budget request aims shrink the federal budget deficit by $1 trillion over a decade as the administration looks to mitigate the impact of America’s yearslong borrowing binge.
The budget estimates deficits totaling $14.4 trillion over the next decade, down from the current estimate of $15.4 trillion. It also notes that the deficit this year is on track to decline by more than $1 trillion, which would be the largest single-year decline on record.
Some of that winnowing will come from higher taxes on the rich and corporations, with about $1.5 trillion of that revenue directed toward deficit reduction.
The focus on deficits is a shift for Washington, which has spent the past several years borrowing huge sums of money to pay for pandemic aid, additional government spending and huge tax cuts. But the ballooning deficit has started to become a political problem for Mr. Biden, with members of his own party criticizing the gap between what America spends and what it takes in and citing it as a reason to reject spending more to fund on the president’s policy initiatives.
Mr. Biden made quick mention of his deficit reduction efforts in a statement accompanying his budget, saying his policies would further reduce the gap through “economic growth that has increased revenues and ensuring that billionaires and large corporations pay their fair share.”
Still, budget watchdogs warned that the nation’s debt level remains dangerously high as a share of the economy.
“Unfortunately, this budget leaves debt on an unsustainable path, and lacks important details on how it would structure the core of its agenda or address provisions scheduled to expire,” said Maya MacGuineas, president of the Committee for a Responsible Federal Budget.
Ms. MacGuineas did praise the Biden administration for taking deficit reduction seriously, but said that more needed to be done.
“The $1 trillion of net deficit reduction called for under this budget should be a floor, not a ceiling, for how much savings should be enacted this year,” she said.
The budget does not reflect the legislation that is currently being negotiated in Congress, but the White House assumes that such legislation will not add to deficits in its projections.
The emphasis on deficit reduction appeared, at least in part, designed to win over lawmakers such as Senator Joe Manchin III, Democrat of West Virginia, who has repeatedly balked at backing the Biden administration’s spending proposals over concerns about the national debt.
Last year, Mr. Manchin repeatedly forced the White House and Democrats in the Senate to scuttle legislation that would have increased spending for climate change policies and the social safety net.
While economic recovery and decreased stimulus spending following the pandemic account for a large share of the reduction, new proposals, such as increasing taxes on the wealthiest Americans, could help close the gap between what the United States spends and what it brings in through taxes and other revenue.
Besides courting Mr. Manchin and other moderate Democrats, the White House also appeared eager to deflect criticism from Republicans who have worked to frame the White House’s agenda as fiscally irresponsible ahead of the coming midterm elections.
“My administration is on track to reduce the federal deficit by more than $1.3 trillion this year, cutting in half the deficit from the last year of the previous administration and delivering the largest one-year reduction in the deficit in U.S. history,” Mr. Biden said in a statement that accompanied his budget request.
