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Biden Tells a Deficit Fairy Tale

Biden raised eye brows confused
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By: The Editorial Board – wsj.com – February 9, 2023

President Biden boasted during his State of the Union address about cutting the deficit by a record $1.7 trillion. His putative conversion into a born-again deficit cutter is belied by this week’s Congressional Budget Office federal budget report for January, which shows the deficit has doubled in the first four months of this fiscal year.

CBO reports that the budget deficit from October through January swelled to $522 billion from $259 billion in the same period last year after adjusting for a timing shift in payments. Receipts are tracking $43 billion lower than last year, mostly owing to reduced individual income taxes, while spending is running $220 billion higher.

The Federal Reserve’s remittances to the Treasury from earnings on its portfolio of securities have decreased to less than $1 billion from $37 billion. For most of the last decade, the Fed was a profit center for Treasury owing to the interest paid on its accumulation of Treasurys and mortgage-backed securities. But now the Fed is paying higher interest on bank reserves. Meantime, net interest payments on U.S. debt increased by $58 billion in the first four months of the year.

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Source: Biden Tells a Deficit Fairy Tale – WSJ