Biden Administration Should Do More Before Taking Credit for Fiscal Responsibility
President Biden gave a speech this morning touting his Administration’s deficit reduction and fiscal responsibility. The following is a statement from Maya MacGuineas, president of the Committee for a Responsible Federal Budget:
It is great to hear the President reiterate that responsible fiscal policy should be a priority. With debt near record levels, inflation at a 40-year high, and unemployment back to its pre-pandemic level, now is the moment to pivot towards reducing deficits and ensuring any new costs are fully paid for. The President’s budget calls for $1 trillion in net deficit reduction over the next decade, which is a good start, though we believe this should be a floor, not a ceiling.
But taking credit for a deficit drop that is largely the result of expiring stimulus and higher inflation makes little sense. (See here for our fact check.)
In order to improve our fiscal position and help temper inflation, the Administration and Congress will need to ensure all new policies are paid for and take proactive steps to reduce the deficit beyond what is happening as a result of the improving economy. Cause for concern is the fact that the pending American competitiveness bill, the retirement security bill, and restaurant relief bill are not paid for. The ongoing student debt payment pause and possible cancellation and enhanced Medicaid match are also continuing to add to deficits and inflation.
Furthermore, if the President really wants to protect Social Security and Medicare, he should put forward a plan to ensure these programs remain solvent. Both are projected to run out of reserves in the coming years, which would require large across-the-board benefit cuts if nothing were done to prevent it.
It is wonderful to have a President in the White House who acknowledges the importance of fiscal responsibility; now we need more policy choices to back that up.
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