He argued that reducing the deficit reduces inflationary pressures on the economy.
President Joe Biden said Wednesday that the federal government will pay off the national debt this quarter for the first time in six years.
His comments on economic growth came before the Federal Reserve announced an interest rate hike on Wednesday afternoon in a bid to rein in runaway inflation.
“Reducing the deficit is a way to relieve inflationary pressures in an economy, where, as a result of a war and the prices of gasoline and oil, food and everything, it’s just a different world right now because of Ukraine and Russia,” Biden said. saying.
Inflation is a big political issue for him and his fellow Democrats ahead of the midterm elections as Republicans try to capitalize on rising energy prices.
“For all the Republican talk about deficits, it didn’t happen a single quarter with my predecessor, not a single time,” Biden said. “The bottom line is that the deficit increased every year under my predecessor, before the pandemic and during the pandemic, and has decreased the two years since I’ve been here. Period. The facts are there.”
Biden’s comments from the White House come after the Treasury Department updated estimates this week to project that the US deficit will shrink by more than $1.5 trillion this year, a revision from the $1.3 trillion projected in Biden’s budget.
He credited the American Bailout for growing the economy, though that relief bill has also been criticized for contributing to current inflation problems.
“Going forward, I plan to reduce the deficit even more, which will help reduce inflation measures and reduce the cost for everyone’s families,” Biden said, as he tries to revive a stalled legislative agenda in Congress.
A White House official said: “This deficit reduction is because the strong economic recovery means profits and revenues are higher, which increases revenue, and because the Administration is cutting emergency spending.”
“There is no reason why a billionaire should be paid a lower tax rate than a teacher or a firefighter,” Biden said Wednesday. “That’s a stark contrast to what the Republican Party offers today.”
Raising a plan released by Florida Republican Sen. Rick Scott, Biden criticized what he called “this ultra-MAGA agenda,” which he said would increase costs for American families.
The budget deficit was cut by more than $350 billion in Biden’s first year, according to the White House, but with inflation at a 40-year high, Republicans are hitting Biden on the economy as the election cycle begins. 2022 midterm and Americans are still paying more at the pump.
In an effort to rein in inflation, the Federal Reserve is expected to raise the short-term interest rate by half a percentage point on Wednesday, twice the usual amount and the biggest rate hike since 2000, meaning they will soon it will cost more for Americans to buy expensive items like cars and houses.
The annual deficit has expanded to around $3 trillion due to the pandemic hitting the economy, and gross national debt topped $30 trillion for the first time earlier this year. Former President Donald Trump’s massive tax cut in 2017 has added more than $1 trillion to the debt for some estimates — a point Biden hit head-on.
Justin Gomez of ABC News contributed to this report.
Reference-abcnews.go.com