Although he didn’t first come up with the name, “Bidenomics,” President Joe Biden is now using it and claiming it works. Bidenomics contrasts with pro-growth supply-side economics and is all about increases—increases in federal spending, taxes, and regulations.  

In a Chicago speech, President Biden made many misleading statements about the ways his administration has improved the economy through Bidenomics. For example, he claimed, 

Just in my first two years in office, my team and I reduced the deficit by $1.7 trillion.
President Joe Biden

Mostly false or misleading. Significant errors or omissions. Mostly make believe.

As opposed to overall debt, the deficit refers to the difference between the amount of money the federal government spends and what it collects in taxes in any single fiscal year. The federal deficits from year to year make up the national debt. 

President Biden’s claim of reducing the deficit is not new. Back in January and during his State of the Union address, he boasted that he lowered the deficit. And he has said the same thing at least 30 times.

Already, many fact checks have been published debunking President Biden’s deficit claim from outlets as diverse as CNN and Fox News. The New York Times, The Washington Post, and Fact Check have also pointed out his deception. 

While the number President Biden cites is correct, he fails to acknowledge the reasons for the decline. President Biden is misleadingly taking credit for reducing the deficit that would have declined if he did nothing. The federal deficit in the fiscal year 2022 was still the fourth-highest ever at $1.38 trillion, according to the Treasury Department.   

The Congressional Budget Office (CBO) explained that the deficit’s decline in 2022 was due to two primary reasons: increased government revenue or taxes—especially from growth in economic activity following COVID-19—and decreased government expenditures or spending on temporary COVID-19-related programs.  

In February 2021, the CBO estimated that given no new changes in federal policy the deficit would drop. According to the CBO’s projections, the combined 2021 and 2022 budget deficits were more than expected.  

Many experts have said the vast majority of the decrease in the deficit came from COVID-19 spending from 2020 that was already scheduled to end. And President Biden’s policies, including the nearly $2 trillion American Rescue Plan and the extension of the student loan payment pause, made the deficit worse than it would have been. 

Dan White, Managing Director of Economics and Supply Forecasting at American Electric Power and previous Senior Director of Economic Research at Moody’s Analytics, declared, 

On net, the policies of the administration have increased the deficit, not reduced it.

And Marc Goldwein, Senior Vice President and Senior Policy Director at the Committee for a Responsible Federal Budget, said, 

He [Biden] didn’t cut the deficit, he increased it. … They are taking credit for the fact that deficits fell in 2021-2022. If they had done nothing, deficits would have fallen by $1 trillion. They fell by much less than they were going to.

Bottom Line: 

The federal deficit decreased because the negative effects of COVID-19 started to end, and President Biden’s policies only made the deficit worse.