Tag Archives: deficit

US

U.S. 2022 budget deficit halves to $1.375 trillion despite student loan costs

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WASHINGTON, Oct 21 (Reuters) – The U.S. government on Friday reported that its fiscal 2022 budget deficit plunged by half from a year earlier to $1.375 trillion, due to fading COVID-19 relief spending and record revenues fueled by a hot economy, but student loan forgiveness costs limited the reduction.

The U.S. Treasury said the $1.400 trillion reduction in the deficit was still the largest-ever single-year improvement in the U.S. fiscal position as receipts hit a record $4.896 trillion, up $850 billion, or 21% from fiscal 2021.

President Joe Biden touted the deficit reductions in remarks at the White House and at Delaware State University, and said the deficit would shrink by another $250 billion over the next decade, given Medicare’s ability to negotiate lower drug prices.

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Biden chided Republicans for voting against the deficit reduction. While his administration lowered the deficit, it has boosted spending on infrastructure and expanded benefits for middle- and low-income Americans.

“You know, we’ve gone from an historically strong economic recovery to a steady and stable growth, while reducing the deficit,” Biden said.

Outlays for fiscal 2022, which ended Sept. 30, fell by a record $550 billion, or 8% from last year to $6.272 trillion. But the outlays for September, the fiscal year’s final month, included the recognition of $430 billion in costs from the Biden administration’s plan to forgive student debt of up to $20,000 for former college students now earning under $125,000 a year and under $250,000 for married couples.

The move brought the September budget deficit to $430 billion, more than six times the prior-year September deficit of $65 billion. In most years, September is a surplus month due to the payment of quarterly corporate and individual taxes.

The Congressional Budget Office estimated that the plan would cost about $400 billion. It also includes the extension of a COVID-19 moratorium on all student loan payments until the end of 2022, which added about $21 billion in budgetary costs.

Non-governmental budget analysts have estimated that the plan would wipe out a much-touted deficit reduction from Democrats’ recently enacted climate, healthcare and Internal Revenue Service funding bill.

‘RESPONSIBLE PATH’

U.S. Treasury Secretary Janet Yellen told reporters that the Biden administration was maintaining a “credible fiscal policy” despite the unfunded student debt relief that was a Biden campaign promise.

“I do see our debt as being on a responsible path,” she said, adding that net interest on the debt as a share of GDP was forecast to only rise to about 1%, a “low” historical level.

Revenue gains during September started to slow from prior months, growing only 6% from a year earlier to $488 billion.

And the CBO is projecting that with the economy slowing further amid higher Federal Reserve interest rates, revenues will slow further in future years. Rising interest costs also will start to consume a bigger share of the federal budget, the non-partisan fiscal referee agency predicts.

Marc Goldwein, senior policy director for the Committee for a Responsible Federal Budget, a fiscal watchdog group, said the effect of recognizing the student loan forgiveness costs in fiscal 2022 will be to show a steadier decline in deficits from the pandemic – rather than a sharper narrowing to around $1 trillion, followed by an increase to around $1.4 trillion for fiscal 2023.

The CBO had forecast a fiscal 2023 deficit of about $984 billion, with deficits rising steadily thereafter to nearly $2 trillion by 2030.

“I think it’s more appropriate to recognize the costs as the debt is being canceled, and the bulk of that will happen in fiscal 2023. But the government has latitude here,” Goldwein said in a phone interview prior to the release.

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Reporting by David Lawder, Dan Burns and Nandita Bose; Editing by Andrea Ricci and Aurora Ellis

Our Standards: The Thomson Reuters Trust Principles.

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US

Biden aides tout plunging deficit as GOP prepares for spending fights

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The Biden administration said Friday that the federal deficit fell in half from the year before, as Washington girds for new battles over taxes and spending with interest rates rising and Republicans expected to take back at least one branch of Congress in the midterm elections.

In a statement, the Treasury Department and White House Office of Management and Budget said the annual deficit plummeted from $2.8 trillion in 2021 to roughly $1.4 trillion in 2022 — a decline driven primarily by the expiration of trillions in pandemic-era emergency spending. The gap between revenue and spending also shrank in part due to stronger-than-expected tax receipts, as a booming U.S. economy and large corporate profits helped bring in additional funds to federal coffers.

“The federal deficit went up every year in the Trump administration — every single year he was president,” President Biden told reporters, criticizing the GOP tax law of 2017 that added more than $1.5 trillion to the deficit. “On my watch, things have been different — the deficit has come down both years I’ve been in office, and I’ve just signed legislation that will reduce it even more in the decades to come.”

On Oct. 21, President Biden celebrated the $1.4 trillion drop in the federal deficit seen in 2022, the largest one-year decline in U.S. history. (Video: The Washington Post)

Biden also criticized congressional Republicans for pushing to expand the Trump tax cuts, arguing such a move would dramatically increase federal deficits. He accused the GOP of pushing cuts to Social Security — though Republicans have said their proposed changes to Social Security would not cut benefit amounts. And he criticized his opponents’ push to repeal key parts of the Inflation Reduction Act, his signature economic law that passed over the summer.

“If Republicans get their way, the deficit is going to soar, the burden is going to fall on the middle-class … They’re not going to stop there,” Biden said. “It’s MAGA-mega trickle-down.”

Biden budget pivots to deficit concerns while boosting military, domestic programs

The new deficit estimate — widely expected by budget analysts — could help set the stage for fresh fights on Capitol Hill over taxes and revenue. GOP leaders have suggested in recent days that if they have more power in Congress next year, they may be willing to leverage a government shutdown or breach of the federal borrowing limit to demand spending cuts. That could lead to a reprise of the battles during the Obama administration, when lawmakers came close to triggering a worldwide economic calamity by failing to pay off America’s loan obligations.

While Biden is eager to tout the shrinking deficit, conservatives point out that it dropped relative to last year in large part because of the end of large spending programs he approved.

“It is terribly disingenuous for the White House to take credit for reducing the deficit simply because temporary pandemic spending expired on schedule,” said Brian Riedl, senior fellow at the Manhattan Institute, a libertarian-leaning think tank, and former chief economist to Sen. Rob Portman (R-Ohio). “Especially when they had helped drive up the deficit with the American Rescue Plan.”

The debates over the deficit will be further intensified by rising interest rates, which dramatically push up the cost of federal borrowing. The Federal Reserve has significantly raised interest rates as part of its battle against inflation, and it is expected to continue that campaign for the foreseeable future. That could add trillions to the cost of taking on debt, said Marc Goldwein, senior vice president for policy at the Committee for a Responsible Federal Budget, a think tank that pushes for lower deficits.

The Congressional Budget Office, Congress’s nonpartisan budget scorekeeper, has said interest payments on the debt alone could reach $1 trillion per year — roughly double their current amount — by 2030, and that figure does not account for the Fed’s latest rate hikes. Every one-point increase in projected interest rates translates into $2.4 trillion in additional debt over a decade, Goldwein said.

“This raises the political cost of making the deficit worse,” Goldwein said. “The borrowing we’re doing now and the borrowing we’re doing in future years will bite into higher interest rate debt.”

The response to those rising costs, however, is likely to splinter lawmakers in Washington.

White House officials have repeatedly slammed Republicans this week for wanting to change Social Security and Medicare. GOP officials have denied they are aiming to cut benefits but said they want to ensure the long-term fiscal solvency of the entitlement programs. Republican lawmakers are also weighing whether to try to cut the clean energy spending in Biden’s signature Inflation Reduction Act intended to fight climate change, according to Stephen Moore, a former economic adviser to President Donald Trump who is in touch with GOP leaders. Democrats would fiercely resist those measures, which many experts believe are necessary in the fight against climate change.

“What I’ve been telling congressional leaders is the most important thing is to cut spending as much as possible,” Moore said. “The new deadly virus is out-of-control spending. They have to take a hatchet to the budget.”

Biden has touted the Inflation Reduction Act for lowering the deficit by almost $2 trillion over two decades, according to the Committee for a Responsible Federal Budget. But deficit hawks have criticized him for canceling what the Congressional Budget Office has estimated is roughly $400 billion in student debt payments.

Four takeaways from President Biden’s budget proposal

Still, some economists have warned about the economic danger of cutting government spending at the same time that the central bank is raising rates — two forces that slow growth.

“We’ve already had sharp cutbacks to the deficit. If you make those even sharper at a time the Fed is already contracting the economy, that’s going to be really damaging,” said Dean Baker, an economist at the Center for Economic and Policy Research, a left-leaning think tank. “If you want to throw the economy into a recession, coupling big rate hikes with sharp cutbacks in spending pretty much guarantees it.”

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US

In Biden’s big bill: Climate, health care, deficit reduction

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WASHINGTON (AP) — The biggest investment ever in the U.S. to fight climate change. A hard-fought cap on out-of-pocket prescription drug costs for seniors in the Medicare program. A new corporate minimum tax to ensure big businesses pay their share.

And billions left over to pay down federal deficits.

All told, the Democrats’ “Inflation Reduction Act” may not do much to immediately tame inflationary price hikes. But the package heading toward final passage in Congress and to the White House for President Joe Biden’s signature will touch countless American lives with longtime party proposals.

Not as robust as Biden’s initial ideas to rebuild America’s public infrastructure and family support systems, the compromise of health care, climate change and deficit-reduction strategies is also a stunning election year turnaround, a smaller but not unsubstantial product brought back to political life after having collapsed last year.

Democrats alone support the package, with all Republicans expected to vote against it. Republicans deride the 730-page bill as big government overreach and point particular criticism at its $80 billion investment in the Internal Revenue Service to hire new employees and go after tax scofflaws.

Voters will be left to sort it out in the November elections, when control of Congress will be decided.

Here’s what’s in the estimated $740 billion package — made up of $440 billion in new spending and $300 billion toward easing deficits— that is up for final approval Friday in the House.

LOWER PRESCRIPTION DRUG COSTS

Launching a long-sought goal, the bill would allow the Medicare program to negotiate prescription some drug prices with pharmaceutical companies, saving the federal government some $288 billion over the 10-year budget window.

The result is expected to lower costs for seniors on medications, including a $2,000 out-of-pocket cap for older adults buying prescriptions from pharmacies.

The revenue raised would also be used to provide free vaccinations for seniors, who now are among the few not guaranteed free access, according to a summary document.

Seniors would also have insulin prices capped at $35 a month.

HELP PAYING FOR HEALTH INSURANCE

The bill would extend the subsidies provided during the COVID-19 pandemic to help some Americans who buy health insurance on their own.

Under earlier pandemic relief, the extra help was set to expire this year. But the bill would allow the assistance to keep going for three more years, lowering insurance premiums for some 13 million people who are purchasing their own health care policies through the Affordable Care Act.

BIGGEST U.S. INVESTMENT ‘BY FAR’ IN CLIMATE CHANGE

The bill would infuse nearly $375 billion over the decade in climate change-fighting strategies that Democrats believe could put the country on a path to cut greenhouse gas emissions 40% by 2030, and “would represent the single biggest climate investment in U.S. history, by far.”

For consumers, that means tax rebates to buy electric vehicles — $4,000 for used vehicle purchase and up to $7,500 for new ones, eligible to households with incomes of $300,000 or less for couples, or single people with income of $150,000 or less.

Not all electric vehicles will fully qualify for the tax credits, thanks to requirements that component parts be manufactured and assembled in the U.S. And pricier cars costing more than $55,000 and SUVs and trucks priced above $80,000 are excluded.

There’s also tax breaks for consumers to go green. One is a 10-year consumer tax credit for renewable energy investments in wind and solar.

For businesses, the bill has $60 billion for a clean energy manufacturing tax credit and $30 billion for a production tax credit for wind and solar, seen as ways to boost and support the industries that can help curb the country’s dependence on fossil fuels.

The bill also gives tax credits for nuclear power and carbon capture technology that oil companies such as Exxon Mobil have invested millions of dollars to advance.

The bill would impose a new fee on excess methane emissions from oil and gas drilling while giving fossil fuel companies access to more leases on federal lands and waters.

A late addition pushed by Sen. Kyrsten Sinema, D-Ariz., and other Democrats in Arizona, Nevada and Colorado would designate $4 billion to combat a mega-drought in the West, including conservation efforts in the Colorado River Basin, which nearly 40 million Americans rely on for drinking water.

HOW TO PAY FOR ALL OF THIS?

One of the biggest revenue-raisers in the bill is a new 15% minimum tax on corporations that earn more than $1 billion in annual profits.

It’s a way to clamp down on some 200 U.S. companies that avoid paying the standard 21% corporate tax rate, including some that end up paying no taxes at all.

The new corporate minimum tax would kick in after the 2022 tax year and raise more than $258 billion over the decade.

There will also be a new 1% excise tax imposed on stock buybacks, raising some $74 billion over the decade.

Savings from allowing Medicare’s negotiations with the drug companies is expected to bring in $288 billion over 10 years, according to the non-partisan Congressional Budget Office.

The bill sticks with Biden’s original pledge not to raise taxes on families or businesses making less than $400,000 a year.

Yet money is also raised by boosting the IRS to go after tax cheats. The bill proposes an $80 billion investment in taxpayer services, enforcement and modernization, which is projected to raise $203 billion in new revenue — a net gain of $124 billion over the decade.

EXTRA MONEY TO PAY DOWN DEFICITS

With some $740 billion in new revenue and around $440 billion in new investments, the bill promises to put the difference of about $300 billion toward deficit reduction.

Federal deficits spiked during the COVID-19 pandemic when federal spending soared and tax revenues fell as the nation’s economy churned through shutdowns, closed offices and other massive changes.

The nation has seen deficits rise and fall in recent years. But overall federal budgeting is on an unsustainable path, according to the Congressional Budget Office, which recently put out a new report on long-term projections.

WHAT’S LEFT BEHIND?

The package, nowhere near the sweeping Build Back Better program Biden once envisioned, remains a sizable undertaking and, along with COVID-19 relief and the GOP 2017 tax cuts, is among the more substantial bills from Congress in years.

While Congress did pass and Biden signed into law a $1 trillion bipartisan infrastructure bill for highways, broadband and other investments that was part of the White House’s initial vision, the Democrats’ other big priorities have slipped away.

Gone, for now, are are plans for free pre-kindergarten and community college, as well as the nation’s first paid family leave program that would have provided up to $4,000 a month for births, deaths and other pivotal needs. Also allowed to expire is the enhanced child care credit that was providing $300 a month during the pandemic.

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Associated Press writer Matthew Daly contributed to this report.

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Sports

Tottenham 4-1 Southampton: Spurs dominate after early deficit

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Tottenham Hotspur opened the season with a slow start, many knowing that’s how the games go as a Spurs fan. Then the opening goal by Southampton’s James Ward Prowse connected to put the Saints up 1-0.

Oh no, here we go.

Normally it would be a dire fight to get one goal and grab a point to open the season. Not under Antonio Conte. Spurs pulled up their socks and tightened their boots and put on a performance for the home fans and supporters around the world.

Four goals were scored with two coming in each half and some huge contributions by the wing-backs. Yes, the starting XI was the same as the closing matches of last season that pushed the team to the Champions League. Some injuries and others not being fully fit in Conte’s eyes forced him to have Ryan Sessegnon and Emerson Royal to run up the flanks.

They delivered.

Sessegnon scored the opening goal and Royal added an assist (and our best friend own goal) to be the deciding factor in the game.

Eric Dier scored for the other Spurs goal from a defender, his first in over three years (not including his preseason rocket).

Here are a few game notes that came to mind while watching Spurs route to victory

  • Sessegnon is big, in a good way of course. He had great pace and Kyle Walker-Peters was bouncing off the 21-year-old. His goal was great to see and his second one, called offside, was brilliant with the pattern looking to be practiced on kickoffs.
  • After going down 1-0, Spurs took over on both ends of the pitch. They pressed highly with their fitness levels showing off and the defense put in big tackles to stop anything for Southampton.
  • It is frustrating to see Royal take one too many touches inside the box. He is fun to watch and in the second half, he seemed to notice the open spaces with his pass to Dejan Kulusevski for the fourth and final goal.
  • Son Heung-min and Harry Kane were off and normally that means doom for Spurs. Not anymore.
  • Three new faces made their debuts for the club with Ivan Perisic getting 30 plus minutes and Yves Bissouma and Clement Lenglet getting under 10 minutes. Perisic had the most time to create chances and boy can he deliver crosses with ease. The other two didn’t have much to do with the game in the bag, even though Bissouma teed one off in the final seconds.
  • Lucas Moura and Matt Doherty came in during the quadruple subs and didn’t show much but that’s ok.

Game week one is done and Tottenham Hotspur is a force under Conte

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Business

Jobless claims edge up to highest since January; planned layoffs soar; trade deficit hits 2022 low

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A Wendy’s restaurant displays a “Now Hiring” sign in Tampa, Florida, June 1, 2021.

Octavio Jones | Reuters

Weekly jobless claims nudged higher while the U.S. trade deficit hit its lowest level of the year in May as Covid-related shutdowns gripped China, according to economic data released Thursday.

Initial filings for unemployment benefits totaled 235,000 for the week ended July 2, a gain of 4,000 from the previous period and slightly more than the 230,000 Dow Jones estimate, according to the Labor Department. The total was the highest since Jan. 15 and raised the four-week moving average to 232,500, its highest level since December 2021.

Continuing claims, which run a week behind, also moved up, rising 51,000 to 1.375 million, higher than the 1.337 million FactSet estimate.

Also on Thursday, job placement firm Challenger, Gray & Christmas reported that planned layoffs soared in June to 32,517, a 57% jump from a month ago and the highest total since February 2021.

The firm noted that the auto sector, which typically lays off this time of year, announced 10,198 cuts, bringing the yearly total to 15,578, or a 155% increase from the same period in 2021. Of the 30 industries the company follows, 10 have announced more cuts this year than in 2021.

Layoff announcements have soared in the second quarter after an extremely low level of cuts in the first three months of the year. Through June, the annual total of 133,211 is down 37% from a year ago, but the second quarter is the highest quarterly total since Q1 of 2021.

“Employers are beginning to respond to financial pressures and slowing demand by cutting costs,” said Andrew Challenger, the firm’s senior vice president. “While the labor market is still tight, that tightness may begin to ease in the next few months.”

Markets are watching Friday’s nonfarm payrolls report, which is expected to show a gain of 250,000. If that Dow Jones estimate proves accurate, it will be the lowest monthly gain since December 2020. Federal Reserve officials are watching the jobs numbers closely as they look to cool the labor market and broader economy, which is seeing its highest inflation rate since 1981.

On the trade front, the U.S. imbalance for goods and services declined to $85.5 billion, from $86.7 billion in April, according to government figures. Though it was the lowest of 2022, it was above the Dow Jones estimate of $84.7 billion.

The deficit was still up 38.4% from a year ago as demand for imports has far outstripped U.S. exports to the rest of the world.

As China grappled with a surge in Covid infections, the U.S. trade deficit with that country fell a seasonally adjusted $2.8 billion to $32.2 billion. The deficit with Mexico dropped $1.6 billion while the imbalance with Canada increased $900 million.

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Sports

Edmonton Oilers fight through early deficit, rescinded goals to tie series at 1-1

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CALGARY — The Edmonton Oilers would not be denied.

Not by another bad start. Not by a cascade of tough (stick) breaks or disallowed goals.

In Game 2 of the Oilers’ second-round Stanley Cup playoff series against Calgary on Friday, Edmonton got the 5-3 win it needed to even the Battle of Alberta before shifting to their home ice. And they did it by playing the way coach Jay Woodcroft has been preaching for weeks.

“We had some things not go our way today. But I think it speaks to the resiliency and resolve of our group [that we came through],” said Woodcroft. “It’s something that we’ve been working on for the last three months, the ability to stick with it.

“I think if you walked in our room, you’d find a group of men that are wholly sure of our message, wholly sure of our game plan, wholly sure of what it takes to win come crunch time. And we have a belief. We didn’t feel that we played to that standard in Game 1. We had better tonight.”

It wasn’t easy for Edmonton to get there.

The Oilers endured a terrible start to Game 1, giving up three goals in just over six minutes en route to a 9-6 loss. Friday’s tilt started in an eerily similar fashion for the Oilers, trailing 2-0 only 6:02 into the first period. And after that, Edmonton was twice robbed of goals they felt were deserved.

On the first, Zach Hyman thought he stuffed a 2-2 equalizer under Flames’ netminder Jacob Markstrom before referee Chris Lee blew the play dead.

The call on the ice was no goal. Despite Hyman’s confidence — he even went to the bench for fist bumps — the officials took another look and confirmed: no goal.

Word from the NHL’s Situation Room after the fact was that “the Referee deemed the play dead when he lost sight of the puck under Jacob Markstrom.”

The Oilers were still down 2-1. And a broken stick for Darnell Nurse on an ensuing Edmonton penalty kill helped Tyler Toffoli make it 3-1 Flames early in the second.

Edmonton kept on coming. Right after that play, Connor McDavid — who had a dominant night from start to finish — orchestrated a stunning set-up for Leon Draisaitl to seemingly cut the Flames lead to one. But Edmonton saw that goal called back, too, this time after a successful challenge by Calgary for goaltender interference.

Undeterred, McDavid needed less than a minute from there to dangle through Calgary’s defense and score himself. 3-2 Flames.

By the time Evan Bouchard had tied the game 3-3 with a power play goal late in the second, it felt like Edmonton was in full control.

“We had two goals pulled back and the bounces didn’t necessarily go our way,” said Hyman. “But we stuck with it, and we battled. I think it’s a testament to our team. We’ve had a roller-coaster season where our backs were against the wall and our ability to push back has been second to none.”

And the next time Hyman scored, it would count. Edmonton was killing a penalty late in the third when Hyman lit the lamp shorthanded in what would stand as the game-winning marker for Edmonton.

Draisaitl added an insurance tally to seal the victory. He and McDavid combined for five points on the night, while Mike Smith rebounded from an awful Game 1 performance with a 37-save showing.

Now it’s a best-of-five series for the Oilers — and they have home ice advantage.

“I thought we deserved to win the game tonight based on hard effort alone,” said Woodcroft. “I thought we paid the price required to win a game in the second round. Our competition level was excellent, our execution level coming out of our own end was very good. We found a way to score. Some of the goals that we gave up were a little bit victim of circumstance to [things like] broken sticks. In the end I thought to a man, everyone was more competitive.”

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Sports

Warriors vs. Mavericks score: Golden State overcomes 19-point deficit to comfortably beat Dallas in Game 3

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The Dallas Mavericks owned a 19-point lead over the Golden State Warriors during the second quarter. Luka Doncic eclipsed the 40-point plateau while also contributing eight assists and five rebounds. In the end, it was not enough for the Mavericks to even their series with the Warriors in Game 2 at Chase Center as Stephen Curry and company took over in the second half to come away with a 126-117 victory to take a 2-0 series lead.

As great as Doncic was for the Mavericks, Curry’s 32 points, eight rebounds and five assists coupled with the contributions from Jordan Poole, Kevon Looney and Klay Thompson, who combined for 59 points, 17 rebounds and 12 assists between the three of them, put Dallas away in the end. These two teams will meet again on Sunday night in Game 3 as the Mavericks look to defend their home floor the same way the Warriors just did. 

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US

Biden highlights deficit reduction, says U.S. will pay down national debt for first time in 6 years

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Washington — President Biden highlighted deficit reduction in remarks Wednesday at the White House, noting that the government will pay down the national debt this quarter for the first time in six years.

Mr. Biden emphasized how strong job gains have increased total incomes and led to additional tax revenues that have improved the government’s balance sheet.

Besides the quarterly reduction in the national debt, the Treasury Department estimates that this fiscal year’s budget deficit will decline $1.5 trillion. That decrease marks an improvement from initial forecasts and would likely put the annual deficit below $1.3 trillion.

“The bottom line is that the deficit went up every year under my predecessor before the pandemic and during the pandemic. And it’s gone down both years since I’ve been here. Period,” he said.

The Democratic president has placed renewed emphasis on deficit reduction going into the midterm election, with administration officials saying that the burst of $1.9 trillion in coronavirus relief approved in 2021 has already paid off in the form of faster growth that now makes it easier to stabilize government finances.

Deficit reduction also matches a priority of Sen. Joe Manchin of West Virginia, the key Democratic vote in the evenly split Senate who blocked the passage of Mr. Biden’s domestic and environmental agenda in December. The reduction also occurs amid rising interest rates on U.S. Treasury notes, a consequence of inflation running at a 40-year peak and the Federal Reserve’s efforts to reduce price pressures.

It is unclear if greater fiscal responsibility can deliver politically for Mr. Biden as Democrats try to defend control of Congress. His two most recent Democratic predecessors, Bill Clinton and Barack Obama, also cut budget deficits, only to leave office and see their Republican successors use the savings on tax cuts.

Still, Mr. Biden drew a sharp contrast with former President Donald Trump, whom he beat in 2020. Trump, among a multitude of promises, pledged to lower the national debt yet failed to do so during any financial quarter of his presidency. Mr. Biden has repeatedly taken aim at that broken promise.

Earlier this week, Treasury said that it expects to pay down $26 billion in privately held debt from the April to June quarter this year. However, the hope to reduce the debt may be dampened by Treasury’s expectation to borrow $182 billion in privately held debt from July to September.

When unveiling his budget plan in March, Mr. Biden said that after his Republican predecessor’s “fiscal mismanagement” his administration is “reducing the Trump deficits and returning our fiscal house to order.”

One of the challenges for Mr. Biden is that voters have largely shrugged off deficit increases and seldom rewarded deficit cuts. Voters might discuss the idea of reducing deficits with pollsters, yet health care, incomes and inflation are often top of mind when casting their ballots.

Norman Ornstein, an emeritus scholar at the conservative American Enterprise Institute, noted that deficits are often “abstract” for voters. The recent low interest rates have also muted any potential economic drags from higher deficits, which have risen following the COVID-19 pandemic and, separately, the 2008 financial crisis, to help the economy recover.

“They’re more likely to respond to things that are in their wheelhouse or that they believe will have a more direct effect on their lives,” Ornstein said. Deficits are “a step removed for most voters, and we’ve been through periods where we’ve had the big deficits and debt and it’s not like it devastated directly people’s lives.”

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US

Biden showcases deficit progress in bid to counter critics

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WASHINGTON (AP) — President Joe Biden on Wednesday highlighted new figures showing the government’s red ink will grow less than expected this year and the national debt will shrink this quarter as he tried to counter criticism of his economic leadership amid growing dismay over inflation going into midterm elections that will decide control of Congress.

Biden, embracing deficit reduction as a way to fight inflation, stressed that the dip in the national debt would be the first in six years, an achievement that eluded former President Donald Trump despite his promises to improve the federal balance sheet.

“The bottom line is the deficit went up every year under my predecessor before the pandemic and during the pandemic. It has gone down both years since I’ve been here,” Biden said. “Why is it important? Because bringing down the deficit is one way to ease inflationary pressures.”

The president is placing a renewed emphasis on reducing the deficit — which is the gap between what the nation spends and what it takes in — in order to blunt Republican criticism that the $1.9 trillion coronavirus relief package has left the U.S. economy worse off. It’s an attempt to burnish his credentials as a responsible steward of the economy while trying to fend off criticism about inflation at a 40-year high. The reopening of the economy coming out of the coronavirus pandemic and the commodity squeeze resulting from the Russia-Ukraine war has made high prices a key political risk for Democrats.

But it is unclear if greater fiscal responsibility can deliver politically for Biden as Democrats try to defend their control of the House and Senate. His two most recent Democratic predecessors, Bill Clinton and Barack Obama, also cut budget deficits, only to leave office and see their Republican successors use the savings on tax cuts.

When reporters tried to question Biden about other topics after his remarks, the president prodded, “You don’t want to ask about deficits?”

Bidden is making a nuanced argument about how the financial outlook has improved: Strong job gains over the past 16 months have increased total incomes and led to additional tax revenues. That means that this fiscal year’s budget deficit will decline $1.5 trillion, much better than the $1.3 trillion that was initially forecast. Less government borrowing will, in turn, limit the financial sources of inflation.

But the expected $26 billion drop this quarter in the national debt — which is money the U.S. owes due to accumulated deficits over time — will be short-lived, as the debt already totals $23.9 trillion and will continue to rise in the second half of this year. And while Biden expects his plans will improve the outlook for budget deficits over the next decade, the national debt would continue to climb. The Biden administration believes that the cost of servicing the debt is low enough to sustain the borrowing, while critics say structural changes are needed to improve the long-term outlook.

“There needs to be a real fiscal restructuring because we continue to see these trillion-dollar deficits as far as the eye can see,” said Douglas Holtz-Eakin, a former director of the Congressional Budget Office who now leads the center-right American Action Forum.

Holtz-Eakin said the Biden administration is taking credit for lower deficits over the past two years that largely occurred due to the end of coronavirus-related spending, rather than fixing the finances of Medicare and Social Security that will determine the long-term budget outlook.

“That doesn’t seem to be the right aspiration for a great country,” Holtz-Eakin said. “What they’re doing is essentially deferring the need to do anything real and genuinely fix the programs that are important to people.”

Deficit reduction also matches a priority of Sen. Joe Manchin of West Virginia, the key Democratic vote in the evenly split Senate who blocked the passage of Biden’s domestic and environmental agenda in December. The reduction also occurs amid rising interest rates on U.S. Treasury notes, a consequence of inflation running at 8.5% and the Federal Reserve’s efforts to reduce price pressures.

Within an hour of Biden’s remarks, Senate Republicans gathered to challenge Biden’s economic policies. Their core critique is that overspending in response to COVID-19 was paired with restrictions on domestic oil and natural gas production, leading to higher gasoline prices than under Trump.

’The biggest drag on the U.S. economy right now involves the rising energy costs,” said Sen. Dan Sullivan, R-Alaska. “This is purely a self-inflicted wound by the Biden administration.”

One of the challenges for Biden is that voters have largely shrugged off deficit increases and seldom rewarded deficit cuts. Voters might discuss the idea of reducing deficits with pollsters, yet health care, incomes and inflation are often top of mind when casting their ballots.

Norman Ornstein, an emeritus scholar at the conservative American Enterprise Institute, noted that deficits are often “abstract” for voters. The recent low interest rates have also muted any potential economic drags from higher deficits, which have risen following the COVID-19 pandemic and, separately, the 2008 financial crisis, to help the economy recover.

“They’re more likely to respond to things that are in their wheelhouse or that they believe will have a more direct effect on their lives,” Ornstein said. Deficits are “a step removed for most voters, and we’ve been through periods where we’ve had the big deficits and debt and it’s not like it devastated directly people’s lives.”

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Sports

Rangers maul Maple Leafs after erasing early deficit

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The resilient Rangers march on.

Clawing their way out of a two-goal hole they fell into after the first period, the Rangers stormed back with five unanswered goals through the final two frames to secure a telling 6-3 victory over the Maple Leafs Wednesday night at Madison Square Garden.

The win was the Rangers’ third in a row as they prepare for the ultimate litmus test in the Hurricanes on Friday.

Ryan Reaves scored his first and second goal as a Ranger, while Adam Fox led the team with two goals and an assist for a three-point effort. Goalie Igor Shesterkin turned aside 35 of the 38 shots he faced to improve to 18-4-2 on the season.

Resiliency has been a trademark of this Rangers team in recent weeks, having just emerged from their first notable COVID-19 outbreak that sidelined several players game-to-game. And with the game tied 3-3 entering the third period on Wednesday, the Rangers tapped into their new-found resilient nature, buckled down and played to win.

Ryan Strome pulled the Rangers ahead at 10:50, burying a feed from Ryan Lindgren for the 4-3 lead. Less than five minutes later, Chris Kreider net his 25th goal of the season to put the game out of reach. Fox’s empty-netter then sealed the deal.

Ryan Reaves (center) celebrates one of his two goals with Adam Fox (right) and Ryan Lindgren during the Rangers’ 6-3 win over the Maple Leafs.
N.Y. Post: Charles Wenzelberg

After falling behind 3-1 in the first period, in which they were too careless with the puck, the Rangers managed to tighten up their game in the middle frame. Sparked by Reaves’ second goal of the night at 2:58 to make it a one-goal game, the Blueshirts rediscovered their forecheck and exposed some weak points in the Maple Leafs’ structure.

With just over two minutes left in the second, a stellar passing sequence from the Rangers ended with Fox knotting the game 3-3.

Auston Matthews nearly scored toward the end of the third period to tie the NHL’s consecutive goal-scoring record in road games, but referees ruled he kicked it in and overturned the goal.

Igor Shesterkin makes one of his 35 saves in the Rangers’ win.
N.Y. Post: Charles Wenzelberg

The Rangers were straight-up outplayed through the opening 20 minutes. It took Toronto just 3 ½ minutes to put up two goals, with the first one coming on a backhander from winger Ilya Mikheyev after Ryan Lindgren failed to clear the puck.

Mitch Marner doubled the Maple Leafs’ score on the power play less than a minute later, netting his first goal on the man-advantage in nearly two years after Kreider was called for tripping in Toronto’s zone.

The Rangers finally answered later in the period, when Greg McKegg won a puck battle in the corner before dishing it to Reaves, who was all alone in front to cut the deficit to 2-1. Fox also earned an assist on the goal, making him the first Rangers defenseman to reach the 40-point mark in 40 games or fewer since Brian Leetch during the 2000-01 season.

At that point, head coach Gerard Gallant began shuffling the lines in attempt to spark his team. Bumping Artemi Panarin up to the top unit with Mika Zibanejad and Chris Kreider, Gallant loaded up the top of the lineup. That combination was on the ice, however, when Toronto winger Michael Bunting capitalized on an odd-man rush at 17:50 of the first.

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