– The United States deficit is climbing, one year before the presidential election
The United States budget deficit reached $1,695 billion in 2023, or $320 billion more than in 2022. Bad news for Joe Biden.
Published today at 10:41 p.m.
The Biden administration pointed to Donald Trump’s tax reform in 2017 to explain this increase in the deficit.
AFP
The United States budget deficit increased by 23% in 2023 compared to 2022, due in particular to a reduction in taxes paid by both households and businesses, complicating Joe Biden’s task one year from the presidential election.
The deficit reached 1,695 billion dollars (1,510 billion francs) during the 2023 fiscal year, ended September 30, the Treasury Department announced on Friday. This represents 320 billion more than in 2022. Indeed, if federal government spending fell by 2.0% last year, to fall to 6,134 billion dollars, revenues fell even more, plunging by 9.0%, to 4439 billion.
In particular: revenues from taxes paid by businesses and households, which decreased, respectively, by 5 and 456 billion dollars compared to 2022. “After an atypical growth in income in 2022, driven by revenues record capital gains and historic (economic) recovery from the pandemic, income in 2023 fell to 16.5% of gross domestic product (GDP),” the Biden administration commented in a statement.
In 2022, in fact, the United States budget deficit was reduced by half compared to 2021. The interruption of emergency spending linked to Covid-19 had made it possible to reduce spending, while the strong recovery of the market of American employment had increased income tax revenues, by far the primary resource of the federal state.
Donald Trump singled out
The Biden administration pointed to Donald Trump’s tax reform in 2017, noting that tax revenues returned “to low levels in 2023, consistent with projections made after the passage of the 2017 law.” And to emphasize that “this drop in revenue was the main driver of the increase in the deficit as a proportion of GDP”.
The deficit represents 6.3% of gross domestic product (GDP), compared to 5.4% last year. The former Republican president is currently considered the main competitor to Democratic President Joe Biden for the November 2024 presidential election.
“The Biden Administration continues to focus on transitioning our economy to healthy, sustainable growth. In doing so, the President and I are also determined to address the challenges that weigh on our long-term financial prospects,” commented Treasury Secretary Janet Yellen, quoted in the press release.
Historic record in 2020
“President Biden’s economic plan builds an economy that grows the middle class, while reducing the deficit by ensuring the wealthy and big corporations pay their fair share and reducing wasteful spending to benefit special interests,” assured the director of the White House Budget Office (OMB), Shalanda Young, in this joint press release.
The deficit is $31 billion lower than the estimate published in March, in the 2024 budget, but $26 billion higher than a later estimate, published in July, the Biden administration further specifies. The deficit reached a historic record in 2020, exceeding 3,000 billion, due to expenses linked to the Covid-19 health crisis.
AFP
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2023-10-20 20:41:36
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