March 28, 2022 3:41PM 

# Biden’s Budget Deficits 

By [Chris Edwards](https://www.cato.org/people/chris-edwards) 

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The Biden administration has released its [federal budget](https://www.whitehouse.gov/wp-content/uploads/2022/03/budget_fy2023.pdf) for 2023. One of the themes is deficit reduction. The president [says](https://www.whitehouse.gov/wp-content/uploads/2022/03/budget_fy2023.pdf) the budget “keeps us on track to reduce the deficit this year to less than half of what it was before I took office.” The administration will be “the first in history to reduce the deficit by more than $1 trillion in a single year.”

Finally, someone is taking an axe to the bloated federal budget!

Or maybe not. Under the Biden budget:

- Deficits are currently falling, but would start rising again in 2024, as shown in the chart.
- Spending would rise from $5.85 trillion this year to $8.87 trillion in 2032.
- Debt held by the public would rise from $24.8 trillion this year to $39.5 trillion in 2032, or 102.4 percent of GDP to 106.7 percent.
- Taxes would be increased $2.5 trillion over 10 years, but these hikes likely won’t pass Congress, so deficits would be higher than proposed unless spending is restrained.
- Interest rates on federal debt are projected to remain low, with the rate on 10-year debt only rising to 3.3 percent by 2032. Thus the budget says the “burden of debt would stay low,” which seems very optimistic. Every 1 percentage point increase in average borrowing costs on $25 trillion of federal debt is $250 billion in added annual interest outlays.

![d](/sites/cato.org/files/styles/pubs_2x/public/2022-03/biden%20deficit.png?itok=FdLlg5tt) 

##### Related Tags 

[Economics](https://www.cato.org/economics), [Tax and Budget Policy](https://www.cato.org/tax-budget-policy) 

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