The White House has released its Fiscal Year (FY) 2024 budget proposal, which contains President Biden’s priorities over the next decade, as well as detailed financial information on programs and appropriation accounts.
While the Biden administration touts the budget plan as a “commitment for confronting global challenges” that will reduce “deficits by nearly $3 trillion over the next decade,” a government watchdog organization says the budget proposal will spike U.S. national debt to historic highs.
Analysis from the Committee for a Responsible Federal Budget (CRFB) shows that under the Biden budget plan, federal debt held by the public would soar from 97 percent of gross domestic product (GDP) at the end of FY 2022 to 106 percent by 2027.
By 2033, America’s debt would rise to a staggering 110 percent of GDP, growing from $24.6 trillion today to $43.6 trillion.
“This budget falls well short of the deficit reduction needed to put the nation on a sustainable fiscal path,” CRFB said in a report highlighting their analysis. “We are disappointed that the spending cuts in this budget – given the massive spending growth in recent years – amount to less than 1 percent of the budget and are coupled by four times as much in spending increases.”
According to CRFB’s review, under Biden’s FY 2024 budget plan:
- Debt would hit a new record by 2027, rising from 98 percent of GDP at the end of 2023 to 106 percent by 2027 and 110 percent by 2033. Nominal debt would grow by $19 trillion, from $24.6 trillion today to $43.6 trillion by 2033.
- Deficits would total $17.1 trillion (5.2 percent of GDP) between FY 2024 and 2033, rising to $2.0 trillion, or 5.1 percent of GDP, by 2033.
- Spending and revenue would average 24.8 and 19.7 percent of GDP, respectively, over the next decade, with spending reaching 25.2 percent of GDP and revenue totaling 20.1 percent by 2033. The 50-year historical average is 21.0 percent of GDP for spending and 17.4 percent of GDP for revenue.
- Proposals in the budget would reduce projected deficits by $3 trillion through 2033, including $400 billion through 2025 when it could help fight inflation. The budget proposes $2.8 trillion of new spending and tax breaks, $5.5 trillion of revenue and savings, and saves $330 billion from interest.
- The budget relies on somewhat optimistic economic assumptions, including stronger long-term growth, lower unemployment, and lower long-term interest rates than the Congressional Budget Office (CBO).
“The President deserves credit for putting forward $3 trillion of deficit reduction, which could be an achievable near-term bipartisan goal in upcoming negotiations,” CRFB says. “However, deficit reduction will ultimately need to be nearly three times that large, and it is disappointing the budget has put forward so many costly proposals without first putting the nation’s fiscal house in order.”
A White House fact sheet shows the budget proposal will lower health care costs, reduce prescription drug costs, expand access to early child care, and expand access to affordable healthcare (among other things). However, CRFB and others are criticizing the plan for failing to address social security, which projections show will become insolvent by the year 2033.
“The White House billed one of those tax increases as a way to extend the solvency of another popular program for retirees, Medicare, by 25 years, when combined with new efforts to save the government money on prescription drug costs,” the New York Times noted. “Yet just like Mr. Biden’s previous budgets, his latest proposal made no mention of any tax or spending increases linked to Social Security, which is set to exhaust its trust fund in just over a decade.”
