This post was originally published on this site
President Joe Biden on Wednesday delivered an economic speech that highlighted cuts to the federal deficit, even as some watchdogs have criticized his rhetoric around reducing red ink.
“The bottom line is the deficit went up every year under my predecessor, before the pandemic and during the pandemic, and it’s gone down both years since I’ve been here. Period. They’re the facts,” Biden said at the White House.
“Why is it important? Because bringing down the deficit is one way to ease inflationary pressures.”
The president has been talking up fiscal deficit reduction as a way to win over a key Democratic senator — West Virginia’s Joe Manchin — who has blocked Biden’s Build Back Better spending plan and wants to see Washington focused on closing the budget gap and fighting high inflation.
Biden’s rhetoric on eliminating red ink has drawn flak from the Committee for a Responsible Federal Budget, a nonpartisan watchdog organization.
“While President Biden’s Fiscal Year (FY) 2023 budget calls for $1.05 trillion of welcomed deficit reduction, the administration has largely been focused on taking credit for the expected $1.3 trillion fall in the deficit between FY 2021 and 2022,” the organization said in a blog post last month.
“The administration touting this victory is highly misleading; deficits are falling mainly because COVID relief is ending, and deficits will remain high even after this decline.”
Biden on Thursday said his administration revealed this week that it’s on track to cut the federal deficit by $1.5 trillion by the end of the current fiscal year, adding that it’s “the biggest decline in a single year ever in American history.”
The president’s remarks come after his Treasury Department on Monday surprised observers by announcing that it plans to pay down $26 billion in debt in the second quarter.
“For the first time since 2016, the Treasury Department is planning to pay down the national debt issued to the public this quarter,” he said on Wednesday. “For all the talk Republicans make about deficits, it didn’t happen a single quarter under my predecessor, not once.”
Biden’s speech initially had been planned for 2 p.m. Eastern, but the White House moved up the scheduled time for his remarks by three hours.
The Federal Reserve at 2 p.m. Eastern is expected to announce its biggest hike in interest rates in 20 years — a half-percentage-point rise — as the American central bank aims to combat the highest U.S. inflation in 40 years. Fed Chairman Jerome Powell is due to speak at a news conference at 2:30 p.m.
DJIA,
lost ground Wednesday, as investors braced for the Fed’s move and Powell’s comments.
