27/06/2024 | Press release | Distributed by Public on 28/06/2024 00:58
WASHINGTON, D.C. - This week, the Committee for a Responsible Federal Budget (CRFB) released a report entitled, "Trump and Biden: The National Debt."
The CRFB's report attempts to compare the fiscal impact of the policies of the current Administration with the policies of the previous Administration, yet fails to accurately capture the total cost incurred by both presidencies.
The CRFB's report:
The CRFB states the Biden Administration increased the federal deficit by just $4.3 trillion. In reality, the Biden Administration has increased the federal deficit by $11.6 trillion dollars throughout the last three years and six months, including:
What CRFB Got Wrong on President Biden:
CLAIM: President Biden's executive actions have added just $1.2 trillion to ten-year debt.
FACT:Since taking office, President Biden has proposed and implemented executive actions that have cost taxpayers over $2 trillion.
A list of the Biden Administration's costly executive actions includes:
Thrifty Food Plan Overhaul
When:August 2021
Cost:$300 Billion
Action:Overhauls the Thrifty Food Plan-the formula that determines Supplemental Nutrition Assistance Program (SNAP) benefits-increasing SNAP benefits by 23 percent, breaking partisan precedent and violating the Congressional Review Act of 1996 in the process.
Government Contractor Rule
When:November 2021
Cost:$3 Billion
Action:Requires federal contractors to pay their employees $15 per hour beginning in 2022, indexed to inflation for every year thereafter, increasing the cost of federal contracts at the taxpayer's expense.
* Source: The Congressional Budget Office (CBO)
CLAIM: The American Rescue Plan Act was a COVID relief package.
FACT:While CRFB accurately includesthe American Rescue Plan (ARP) Act of 2021 on President Biden's ledger, elsewhere in the report it inaccurately portrays the entire ARP as COVID legislation. The COVID-19 relief laws enacted in 2020 and 2021 provided more than $5 trillion in funding for pandemic response and recovery. Four of these COVID relief packages were advanced by nearly unanimous, bipartisan and bicameral support under the leadership of President Trump. In contrast, the ARP was adopted by President Biden and Congressional Democrats by an entirely partisan vote.
Further, of the new spending generated by the ARP, $1.7 trillionof that funding was not directly devoted to combatting the public health pressures COVID-19 pandemic.
According to a previous CRFB statement: "Only about 1 percent of the entire package goes toward COVID vaccines, and 5 percent is truly focused on public health needs surrounding the pandemic." Instead, this unprecedented spending was added to an already rapidly growing economy, which predictably fueled the highest spike in consumer prices in 40 years.
CLAIM:President Biden's legislative actions have added $3 trillion to the debt.
FACT:According to CBO, President Biden's enacted legislation increased deficit projections by a total of $4.8 trillion over ten years.
The CRFB analysis errs in several respects:
The CRFB analysis lacks important context:
CLAIM:The $4.3 trillion of deficit spending under President Biden includes interest costs.
FACT:Since the enactment of the American Rescue Plan (ARP) Act of 2021, signed into law on March 11, 2021, President Biden has overseen 11 interest rate hikes to combat the 40-year spike in inflationthat directly resulted from the influx of funding introduced into the U.S. marketplace by the ARP:
According to CBO, since Biden took office,inflation-induced interest rate hikes have increased projected net interest costs by $4.8 trillion over ten years. Even though this cost is attributable to Biden's economic policies, it is not included in the CRFB's calculations. Interest spending has increased by $540 billion, or 153 percent, in the three years since President Biden took office.Interest payments on the federal debt total $892 billion (3.1 percent of GDP) and are now projected to become the second largest item in the federal budget this year, exceeding spending on both national defense and Medicare.
Interest costs are projected to increase further from 9 percent of federal revenue in 2021 to 18 percentof federal revenue in 2024 to 23 percentof federal revenue in 2034. Each dollar spent on servicing our national debt is a dollar wasted.
As the U.S. federal government continues its habit of out-of-control spending, taxpayer funds are needlessly redirected from funding for key legislative priorities, such as critical infrastructure, education, and health care.
What CRFB Got Wrong on President Trump:
CLAIM: The Tax Cuts and Jobs Act increased the federal debt by $1.9 trillion.
FACT: In the first six years after enactment of the Tax Cuts and Jobs Act, the increase in federal revenues accounted for more than $1 trillion dollars higher than originally projected. Even after adjusting for inflation, revenue remains $600 billion higher than projected in the first six years of implementation.
CLAIM: Ending federal appropriations for the Affordable Care Act (ACA) cost-sharing reduction payments in 2017 led insurers to raise premiums on "silver" ACA plans, ultimately increasing the cost of federal subsidies by an estimated $220 billion.
FACT: Premiums for ACA plans have risen significantly since the passage of the ACA, prior to President Trump even entering office. The increasing cost of premiums resulted from the law imposing federal mandates and a subsidy structure that grows dollar-for-dollar with premiums, providing health insurance companies with increased pricing power.
CLAIM:A 2020 rule to restrict prescription drug rebates paid to pharmacy benefit managers (PBMs) and insurance plans was estimated to cost the federal government $177 billion dollars. Ensuing interest costs were estimated to add an additional $59 billion more to the federal deficit.
FACT:Even though the CRFB admits this rule was delayed and ultimately repealed under President Biden, the CRFB stillincludes this assumption in its analysis of costs borne by the Trump presidency. This is misleading. The purported costs nevercame into effect. And it is inconsistent with CRFB's methodology in not counting Biden's student loan executive actions that did not take effect.
The Bottom Line:
The American public deserves transparency and accuracy when it comes to our national debt. The CRFB's analysis significantly underestimates the contribution to the national debt from President Biden's policies and inflates the fiscal impact of President Trump's policies.
By not incorporating the true cost of legislative and executive actions, as well as failing to account for the broader economic consequences (higher interest rates and inflation) of President Biden's policies, the CRFB report is incomplete and inaccurate.