FACT CHECK: Did Joe Biden Eliminate $1.7 Trillion Of The Federal Debt?
President Joe Biden claimed he cut the federal debt by $1.7 trillion within his first two years in office during remarks delivered on Aug. 16, the anniversary of the Inflation Act.
The debt has increased, not decreased. The reduced deficit can largely be attributed to COVID-19 related spending expiring.
Biden is visiting Maui almost two weeks after wildfires swept through the island and killed more than 100 people, according to Reuters. This follows sharp criticism from Republicans saying that he has not spoken enough about the wildfires, The New York Times reported.
Biden claimed during a speech on Aug. 16 that he cut the federal deficit by $1.7 trillion before saying he cut the debt by $1.7 trillion. Biden said,”Unlike the last president, in my first two years in office, we actually cut the federal debt, the deficit, by $1.7 trillion. The first two years — we cut the debt by $1.7 trillion.”
Biden actually increased the national debt by $3.84 trillion, according to a February 2023 article by the New York Post. The outlet credits the wrongful claim to a confusion of the words “deficit” and “debt.” The White House official transcript of the Aug. 16 speech acknowledges that Biden meant deficit, by running a line through the word debt and putting deficit next to it.
The claim that Biden decreased the deficit is also misleading. While the deficit for fiscal year 2022 is $1.6 trillion, down from $2.77 trillion in 2021 according to Fiscal Data, the cut was mainly due a decrease in spending from the COVID-19 pandemic.
The Committee for a Responsible Federal Budget, a non-partisan budget watchdog, attributed over 100 percent of the deficit reduction to the shrinking or expiring of COVID-19 relief, including the American Rescue Plan and Response & Relief Act. They also claim certain “economic changes,” including higher interest rates, will increase future deficits.
Last year, Check Your Fact debunked a similar claim from Biden, finding that the deficit has decreased largely because of COVID-19 related spending expiring. Biden has made this claim at least 30 times since June 2022, according to The Washington Post Fact Checker, which also reported the deficit was reduced due to a lapse in spending. (RELATED: Joe Biden Claims The Debt Was Reduced Under His Presidency)
“In his battle with congressional Republicans, who claim they are concerned about rising deficits, through sleight of hand, the president repeatedly has claimed he achieved historic deficit reduction because of his policies. Budget numbers often make people’s eyes glaze over and so, from a communications perspective, it’s easy to manipulate the math,” the outlet reported.
A White House official told Check Your Fact in an email that a “strong economic recovery and vaccination program managed by President Biden allowed us to unwind pandemic programs in a way that reduces the deficit.”
“The strong economic recovery and vaccination program managed by President Biden allowed us to unwind pandemic programs and grow our economy in a way that reduces the deficit,” the official said. “Trickle-down tax cuts led by Republican Presidents and Congressional Republicans have contributed more than 90% of the increase in debt-to-GDP since 2001, excluding temporary emergency measures.”
“This bogus talking point keeps coming back again and again, but it doesn’t make it any more true,” Maya MacGuineas, president of the Committee for a Responsible Federal Budget, said in email to Check Your Fact. “The Administration’s policies have added to the debt, not reduced it. The truth matters, and the President should lead efforts to actually reduce the debt, not just pretend he did.”
Check Your Fact has reached out to the Treasury Department, the Institute for New Economic Thinking and other economic experts for comment and will update this piece accordingly if one is received from any of these sources.