Executive summary
President Biden’s tax, spending, and deficit legacy continues to spark debates. Supporters assert that Biden inherited a pandemic crisis and enacted vital stimulus spending to resuscitate the economy, undertook key investments in long-neglected areas, defended Social Security and Medicare against cuts, and still left with a smaller budget deficit than the one he inherited. Biden defenders add that even more could have been accomplished had he maintained a Democratic Congress for the last half of his presidency.
Critics believe that the economy that was already re-opening from the pandemic when Biden took office and that his programs only served to raise inflation. They contend that the new policies reflected special interest giveaways to partisan allies. Finally, critics note that Biden added trillions to budget deficits and argue that keeping deficits below their pandemic-peak levels is a weak criterion.
The end of Biden’s presidency allows for a final assessment of his tax, spending, and deficit record. As the methodology section explains, this analysis begins with the 10-year budget baseline that President Biden inherited in February 2021 and measures all subsequent tax and spending changes through the February 2025 baseline that was released as the president left office. The analysis is based on more than a half-dozen Congressional Budget Office (CBO) baseline updates over these four years, supplemented with the line-item scores of all notable bills and executive orders signed into law by Biden.1
Here are the key findings:
- The cumulative 2021-2031 budget deficits were projected by CBO at $14.5 trillion when President Biden entered the Oval Office. Four years later, he left office with the same period facing a total deficit of $21.2 trillion. The president signed or enacted $6.6 trillion in new initiatives and oversaw economic and technical budget revisions that were nearly budget-neutral over the 2021-2031 period.
- Economic and technical factors added $0.1 trillion in actual and projected deficits over this period. Higher-than-projected inflation and a slight bump in economic growth expanded projected 2021-2031 revenues by $6.9 trillion, and mandatory and net interest costs increased by a combined $6.7 trillion. Technical revisions added roughly $1.4 trillion in revenues, but they also pushed up mandatory and net interest costs by a slightly higher amount. The fiscal effects of these factors largely offset each other, leading to a net addition of just $0.1 trillion to 2021-2031 actual and projected deficits.
- President Biden signed legislation and approved executive actions cumulatively costing $6.6 trillion over the decade—compared to $7.8 trillion for President Trump, $5.0 trillion for President Obama, and $6.9 trillion for President Bush. And like President Trump, Biden enacted these costs in just a single four-year presidential term, compared to Obama’s and Bush’s eight years in the Oval Office. The largest drivers were pandemic response and stimulus legislation ($2.1 trillion), expansions to discretionary spending excluding defense and veterans’ benefits ($1.7 trillion), veterans’ benefit expansions ($837 billion), student loan executive orders ($755 billion), and defense spending hikes ($596 billion).
- President Biden’s four annual budget proposals averaged 10-year tax increases of $3.9 trillion and spending expansions of $2.5 trillion. The proposed tax hikes—overwhelmingly consisting of drastic tax increases on businesses—were largely ignored by Congress. However, spending proposals such as pandemic relief, infrastructure, and family benefits found a receptive legislature.
- Biden left the White House with structural budget deficits of nearly $2 trillion, interest costs surging, and spending at its highest share of the economy in American history outside of world wars and deep recessions. The ongoing failure to address unsustainable Social Security and Medicare costs leaves a projected 30-year baseline deficit of $110 trillion.
As the methodology section explains, most changes in this report are scored over the full 2021 through 2031 period because most policy, economic, and technical changes have at least 10-year budget effects, and they can also be measured against the original February 2021 CBO baseline that covered the 2021-2031 period.
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Footnotes
- See the Appendix for the sources and methodology. Fiscal analyses of Presidents Obama and Bush appear at Jessica Riedl, “Obama’s Fiscal Legacy: A Comprehensive Overview of Spending, Taxes, and Deficits,” Manhattan Institute, October 4, 2017, at https://www.manhattan-institute.org/html/obamas-fiscal-legacy-comprehensive-overview-spending-taxes-and-deficits-10669.html. President Trump’s fiscal analysis appears at Jessica Riedl, “Trump’s Fiscal Legacy: A Comprehensive Overview of Spending, Taxes, and Deficits,” May 12, 2022 at https://manhattan.institute/article/trumps-fiscal-legacy-a-comprehensive-overview-of-spending-taxes-and-deficits.”
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