FACT CHECK: Joe Biden Claims Fiscal Responsibility Act Saves $1 Trillion From The Deficit Over Next 10 Years
President Joe Biden claimed the Fiscal Responsibility Act, which he signed after making a deal with then-House Speaker Kevin McCarthy, saves $1 trillion from the deficit over the next 10 years.
The Fiscal Responsibility Act is projected to save $1 trillion and $2 trillion from the deficit over the next 10 years, according to the Committee for a Responsible Federal Budget (CRFB) and the Congressional Budget Office (CBO).
Biden held a campaign fundraiser in Atherton, California, on Sept. 27, according to NBC Bay Area. During the fundraiser, he claimed that he cut a deal with McCarthy that save $1 trillion from the deficit over the next 10 years, referencing the Fiscal Responsibility Act.
“Look, there is — we’re now in a situation where, just a few months ago, the negotiation between the Speaker and me — we shook hands that we were going to keep the government levels at essential domestic spending for — and national security priorities. And that still called for — that still reduces the deficit over 10 years by another trillion dollars — by another trillion dollars. That was the deal we made — and over the next decade,” Biden said, according to the transcript. (RELATED: White House Spokesman Claims Hunter Biden Lived With His Father In 2019)
This claim is true. A White House spokesperson directed Check Your Fact to an analysis from the CBO, which notes that the act would result in a “$1.5 trillion reduction in projected deficits…over the next 10 years reduces projected federal debt held by the public in 2033 by about 3 percent, from $46.7 trillion (or 119 percent of gross domestic product, or GDP) to $45.2 trillion (or 115 percent of GDP).”
The CRFB told Check Your Fact that Biden’s claim was accurate, saying, “CBO scored the Fiscal Responsibility Act at $1.5 trillion in deficit reduction, while the President claims $1 trillion and the Speaker claims $2 trillion. The exact savings depend on a number of assumptions and what ultimately happens next” and pointed to an article written in June 2023 by the organization.
“The deficit reduction in the bill could grow to as high as $2.1 trillion if policymakers adhere to out-year (FY 2026 to FY 2029) appropriations targets in the bill. On the other hand, we estimate savings would fall to roughly $1 trillion if appropriators adopt various adjustments agreed to through ‘side deals’ outside of the FRA,” the CFRB wrote.
Romina Boccia, Director of Budget and Entitlements Policy at the Cato Institute, said in an email to Check Your Fact that the legislation “would save roughly $1 trillion over the next decade, if Congress abided by the spending limits put forth in the Act.” (RELATED: Were There 110,000 Overdose Deaths In 2022?)
“Only two of the six years of discretionary spending limits specified in the Act are binding: levels for fiscal year 2024 and 2025. Beyond that, spending levels are merely suggestions with no legal enforcement. Moreover, Congress already broke its budget when members passed a continuing resolution this week that included $16 billion in emergency-designated spending, not subject to the FRA spending limits. More emergency spending is likely to come with President Biden pushing for more aid to Ukraine and Senate appropriators asking for $37 billion in budget-busting emergency designations in that chamber’s spending bills,” Boccia said.
The continuing resolution, which funds the government from Oct. 1 to Nov. 17, added $16 billion in disaster relief spending, according to Federal Times. Biden pushed for more Ukraine funding, with McCarthy trying to tie it with southern border spending before it passed, USA Today reported.
McCarthy was ousted Oct. 3 following a group of conservatives, lead by Republican Florida Rep. Matt Gaetz, motioning to vacate the chair over the spending bill, according to the Associated Press.