President Biden’s FY 2024 budget proposal, according to the Committee for a Responsible Federal Budget (CRFB), would increase federal spending and borrowing to historic levels. According to the CRFB, the proposal would raise the federal debt to 117% of GDP by 2031, breaking the previous record set during World War II.
I’ve now laid out my budget.
— President Biden (@POTUS) March 10, 2023
Republicans in Congress should do the same.
According to the watchdog group:
- 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 budget assumes 0.4 percent growth this year, 2.1 percent growth next year, and 2.2 percent by the end of the decade – compared to CBO’s 0.1 percent, 2.5 percent, and 1.7 percent, respectively. The budget also assumes ten-year interest rates fall to 3.5 percent by 2033, compared to CBO’s 3.8 percent.
The (CRFB) is a nonpartisan, nonprofit organization dedicated to educating the public about fiscal policy, the budget deficit, and the national debt. The CRFB was founded in 1981 with the mission of promoting long-term fiscal sustainability and encouraging policymakers to make informed and responsible budget and economic policy decisions.
The group wrote, “It is disappointing that the President continues to propose trillions of dollars in new spending and tax breaks without a plan to put our debt on a sustainable path.”
On my watch, millions enrolled in Affordable Care Act coverage got better coverage and lower prices, some saving $800 a year.
— President Biden (@POTUS) March 10, 2023
My budget makes those savings permanent.
The CRFB also warns that relying on tax increases and assumed economic growth to balance the budget is risky and does not address long-term fiscal challenges. The CRFB identifies several policy proposals in the budget that would increase debt, such as expanding Medicare, expanding affordable housing programs, and extending the expanded child tax credit.
“The budget projects inflation will normalize by 2024, with fourth-quarter-over-fourth-quarter Consumer Price Index (CPI) inflation dropping from 7.1 percent last year to 3.0 percent in 2023 and 2.3 percent per year thereafter. This is slightly more optimistic than CBO and the Federal Reserve, both of which expect inflation to normalize around 2025. ”
The CRFB suggests that policymakers address the country’s long-term fiscal challenges by reforming entitlement programs, improving the tax system, and cutting wasteful spending.
The organization, which is made up of budget experts, economists, and former government officials from both parties, is well-known for its fiscal policy research and analysis, as well as its proposals for reducing the deficit and debt. The CRFB has been a leading advocate in the United States for more sustainable fiscal policy.