Tuesday, September 27, 2022

With deficit falling, Biden pivots to fiscal responsibility

WASHINGTON ( Associated Press) — President Joe Biden plans to highlight the shortfall in comments at the White House, noting that the government will pay off the national debt this quarter for the first time in six years.

On Wednesday, Biden will emphasize how strong the job is The increase in total income and increased additional tax revenue has improved the government’s balance sheet, said a White House official, who insisted anonymity to preview the president’s speech.

In addition to the quarterly reduction in the national debt, the Treasury Department estimates this fiscal year’s budget deficit will drop by $1.5 trillion. This reduction marks an improvement from initial forecasts and will likely keep the annual deficit below $1.3 trillion.

Democratic president puts renewed emphasis on deficit reduction in midterm electionsAdministration officials say $1.9 trillion in coronavirus relief explodes That has already paid off in the form of rapid growth approved in 2021 which now makes it easier to stabilize government finances.

Loss reduction also matches West Virginia’s priority for US Sen. Joe ManchinKey Democratic vote in evenly divided Senate that blocked passage of Biden’s domestic and environmental agenda In December. Even with rising interest rates, there is a decrease On US Treasury notes, inflation results in 40-year peak and the Federal Reserve’s efforts to ease price pressure.

It’s unclear whether more fiscal responsibility can deliver politically for Biden as Democrats try to defend control of Congress. His two most recent Democratic predecessors, Bill Clinton and Barack Obama, also cut budget deficits, only to leave office and use the savings on tax cuts to their Republican successors.,

Still, Biden is expected to draw a sharp contrast with former President Donald Trump, whom he defeated in 2020., Trump, among many promises, pledged to reduce the national debt, yet failed to do so during any fiscal quarter of his presidency. Biden has repeatedly hit out at that broken promise.

While unveiling your budget plan In March, Biden said his administration was “reducing the Trump deficit and returning our fiscal house to order,” following the “fiscal mismanagement” of his Republican predecessor.

One of the challenges for Biden is that voters have largely rewarded deficit increases and rarely deficit cuts. Voters may discuss the idea of ​​bridging the deficit with pollsters, yet health care, income and inflation are often top of mind when voting.

Norman Ornstein, an emeritus scholar at the conservative American Enterprise Institute, said the deficit is often “abstract” for voters. The recent low interest rates have also muted any potential economic drag from the higher deficit, which has been exacerbated after the COVID-19 pandemic. and, separately, the 2008 financial crisis, to help the economy recover.

“They are more likely to react to things that are in their wheelhouse or that they believe will have a more direct impact on their lives,” Ornstein said. The deficit is “a step removed for most voters, and we have gone through a period where we have huge deficits and debt and it’s not like it directly devastated people’s lives.”


Nation World News Desk
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