Biden Releases Budget With $5 Trillion in New Spending

This content leverages data from USAFacts, a non-profit that visualizes governmental data. You can learn more on its website, Facebook, and Twitter.

• The Office of Management and Budget (OMB) on Friday released President Joe Biden’s budget request for fiscal year 2022, which includes $5 trillion in new spending that would increase deficits by about $1.4 trillion compared to current law over the next decade. 
• Presidential budget requests typically don’t share much in common with what Congress approves through its budgeting and appropriations processes, so they’re largely symbolic documents meant to serve as a blueprint for the administration’s vision. Nonetheless, they include detailed projections for government spending, and the national debt, so here’s a look at the numbers.

SPENDING & TAXES

• Biden’s budget proposes about $5 trillion in new federal spending over the next decade that comes in addition to the $1.6 trillion in discretionary spending and $3 trillion in mandatory spending that occurs annually. 
• That would increase total federal spending to more than $6 trillion in FY2022 and over $8.2 trillion by 2031, which is well above the roughly $4 trillion in spending that occurred in the years preceding the pandemic as this USAFacts chart shows: 

• The $5 trillion in new spending includes Biden’s $2.6 trillion trillion “American Jobs Plan” plus his $1.7 trillion “American Families Plan” and a $600 billion increase in non-defense discretionary spending. 
• The new spending would be partially offset by tax hikes ― including $2.1 trillion from increased corporate taxes, $756 billion from higher taxes on high-income earners and on capital gains, and $711 billion from increased tax enforcement ― and by limiting growth in defense spending by $169 billion. 
• Biden’s budget projects that the collection of tax revenue would exceed $4 trillion for the first time ever in FY2022 and rise to $6.6 trillion in 2031. This USAFacts chart shows historic tax revenue dating back to 1980, which has never exceeded $3.6 trillion in a fiscal year to date:

DEFICITS & DEBT

• Biden’s budget projects that the federal budget deficit would be $1.8 trillion in FY2022, which would be the largest budget deficit in history aside from the more than $3.1 trillion deficit caused by pandemic-related spending in FY2020 (and the $3.6 trillion deficit projected for FY2021). 
• This USAFacts chart shows historical budget deficits (or surpluses) dating back to 1980, including the $1.7 trillion deficit in FY2009 caused by stimulus during the financial crisis that was the previous record deficit and the last surpluses in 2000 and 2001:

• Biden’s budget blueprint would result in aggregate deficits of $14.5 trillion over the 2022-2031 period. It would increase the total national debt, which was $26.9 trillion in 2020, to $32.4 trillion in 2022 and $44.8 trillion in 2031. 
• The debt held by the public, a figure which includes debt held by both the U.S. public and foreign entities, was $21 trillion in 2020 and would rise under Biden’s plan to $26 trillion in 2022 and over $39 trillion in 2031. 
• Starting in 2027, the ratio of debt held by the public to the size of the U.S. economy in terms of gross domestic product (GDP) would reach an all-time high of 106.5%, exceeding the 104% of GDP in 1945 and 106% of GDP in 1946 at the end of World War II and demobilization. It would continue to rise to 108.5% of GDP by 2031, which surpasses the Congressional Budget Office’s baseline projection.
• This USAFacts chart shows total U.S. federal debt dating back to 1980 broken down by debt held by the U.S. public, foreign entities, and intragovernmental debt:

— Eric Revell

(Photo Credit: Capitol Money: iStock.com / mj0007 | Biden: cornstalker via Flickr / Creative Commons)