Progressives rebuff criticism of Biden’s budget

Progressives on Friday pushed back on criticism of President Biden’s budget plan, which would see trillion-dollar deficits for a decade and increase the debt burden past its highest level on record.

“For too long, self-inflicted austerity has been mistaken for fiscal responsibility, to the detriment of American families and our nation’s economy,” House Budget Committee Chairman John Yarmuth (D-Ky.) said.

“The Biden budget ends this era of chronic underinvestment in America’s potential, and addresses deficits in our communities that have been exposed and exacerbated by the pandemic.”

In comparison to Congressional Budget Office (CBO) projections from February, which did not include the latest $1.9 trillion COVID-19 relief bill already enacted into law, Biden’s proposal would increase deficits by $2.3 trillion over a decade and bring the country’s overall debt burden to 117 percent of gross domestic product (GDP).

Deficit hawks watched in horror as the nation’s borrowing increased dramatically during the Trump years, rising from $666 billion to just shy of $1 trillion before the COVID-19 pandemic, and a record $3.1 trillion in 2020 as the government ramped up fiscal support for the ailing economy.

Under Biden’s plans, the deficit would hit a new, $3.6 trillion record this year before dropping to $1.8 trillion next, and remain in the $1.3-$1.6 trillion range through the end of the decade.

Yarmuth says it makes sense to spend on infrastructure and rebuilding the economy.

“Investing in the American people has always been a good bet, but with interest rates low and the need high, it’s a sure thing,” he said.

“As past crises have shown, doing too little will cost us far more in the end.”

While the deficit-watchers praised Biden’s plans to boost investment and raise $2.4 trillion in taxes to cover some of the costs of his major spending proposals, they said the commitments did not go far enough.

“The budget proposes $5 trillion of spending and tax breaks and only pays for three-quarters of the cost, leaving nearly $1.4 trillion of higher debt. Debt under the budget would hit new records almost every year,” said Maya MacGuineas, president of the Committee for a Responsible Federal Budget, which advocates for debt reduction.

“Furthermore, before we enact trillions of dollars in new initiatives, we need a plan to finance or cut back what we’ve already committed to. Any comprehensive plan to invest in the future must address our unsustainable fiscal outlook.”

Biden’s infrastructure proposal, for example, spends money over 8 years, but pays for it over 15 — a scenario that’s unlikely to play out without congressional intervention in the latter years.

“Ensuring an inclusive, fair, prosperous and moral economic system means not only meeting today’s urgent challenges in a responsible way, but securing our fiscal position over the long term,” said Michael Peterson, CEO of the Peterson Foundation, an anti-deficit group.

“In order to have the strength and resources we need to truly tackle our critical challenges over the long run, we need to build our economic future on a sustainable fiscal foundation.”

But progressives are pushing back, questioning the long-held belief that high debts will shift the economy into a lower gear.

The left-leaning Economic Policy institute said the budget “shows what true ‘fiscal responsibility’ means” by making investments to tackle inequality and level the playing field in the labor market.

A variety of progressive groups banded together to counter traditional arguments on fiscal policy, calling themselves “Stop Deficit Squawks.”

“We have heard from a select group of organizations for a decade, more than that, that we constantly need to be worried about the debt and the deficit. They get a lot quieter when it’s a discussion for tax cuts for corporations,” said Maura Quint, executive director of Tax March, one of the progressive groups.

“What we have seen time and time again is that it bears no fruit.”

But the pushback hasn’t satisfied those who warn that the debt is already eating away at growth, and may eventually tip the economy into crisis.

“While emergency government intervention was justified to address the recent health and economic crises, a continuation of such fiscal trends will harm future generations of Americans, who will be left with the burden of both paying increasing interest costs and paying off the growing national debt,” the Bipartisan Policy Center said in a statement responding to the budget.