President Joe Biden on Wednesday tried to cast his administration as spending hawks, touting sizable reductions in the federal deficit this fiscal year as a key departure from what he characterized as rampant spending by his Republican predecessor.
While the Treasury Department estimates that this year’s budget deficit will decline by $1.5 trillion, the reason for the smaller deficit is a matter of debate.
Under former President Donald Trump, the U.S. poured trillions into the economy to lessen the impact of Covid-19 lockdowns at the height of the pandemic and to develop and manufacture vaccines, masks and other gear needed to protect health-care workers and others from the virus.
As those pandemic-era programs end, the federal government will spend less — even as the Biden administration works with Sen. Mitt Romney, R-Utah, on legislation providing another $10 billion in Covid relief.
The president’s more-modest budget proposal doesn’t include a majority of the cost of Biden’s massive Build Back Better agenda, a transportation and technology infrastructure program that Democrats haven’t been able to pass. The administration priced the plan at $1.75 trillion, but it phased out some of the programs that would likely be permanent to reduce the price tag on paper. The Congressional Budget Office estimated its costs at around $4.73 trillion if the programs were permanent.
The plan also would have included significant tax increases on high-income households to help pay for the programs.
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