The commander-in-chief is running out of runway to get his campaign off the ground. Now it seems doomed to crash.
And Joe Biden is diving for cover after this incriminating bombshell dropped.
The federal budget deficit will hit $2 trillion this year, according to the Congressional Budget Office, which attributes at least some of the blame to President Biden’s generous student loan forgiveness plans.
The good news is that the economy is still humming along, thanks in large part to the record number of migrants entering the United States, legally or illegally. The CBO said that its economic growth and unemployment figures have improved in the last four months.
Inflation is high, eroding some of the advantages.
The CBO said its deficit projection grew by $400 billion over the last four months as Congress approved military funding for Ukraine and Israel, Medicaid expenses rose faster than expected, and Mr. Biden wrote off a major portion of Americans’ outstanding student loan debt.
The end product is a vast sea of red ink.
One major indicator, federal debt held by the public, will exceed 99% of GDP this year and 120% within a decade, breaking the previous high set during World War II.
“Then it continues to rise,” stated CBO Director Phillip L. Swagel.
The dismal estimates come in the midst of a heated political campaign season, as well as an anticipated fight next year over how — or not — to extend the tax-cut package signed into law by then-President Trump in 2017.
Voters currently do not appear to be paying much attention to expenditure and debt, but inflation is a major concern.
Republicans claimed the study is a repudiation of Democrats’ spending ambitions. Democrats hailed the data as ammo against the GOP’s efforts to prolong the tax cuts.
Michael A. Peterson, CEO of the watchdog Peter G. Peterson Foundation, urged voters to demand more from all parties.
“This November, America’s fiscal and economic future is on the ballot, and voters are calling for leaders who will prioritize solutions to our growing debt,” he said.
Voters are not very bothered about spending and debt, but inflation is a concern.
The CBO stated that conditions are unlikely to improve significantly on that score before the election.
The personal consumption expenditures price index will reduce from 2.8% at the end of last year to 2.7% at the end of this year, while consumer price index growth will slow from 3.2% to 3.0%.
Inflation-adjusted GDP will increase by 2% this year, down from 3.1% in 2023, but still remarkable for an economy that was given a 100% risk of entering recession last year.
According to the CBO, a substantial part of such resilience stems from “a surge in immigration that began in 2021” and is expected to endure at least until 2026.
An estimated 2.4 million new immigrants entered the United States last year, and another 2.4 million will enter this year, according to estimates.
The majority of these are classified as “other foreign nationals” by the CBO, meaning they are not here as guest workers or permanent immigrants. They are primarily composed of parolees and immigrants without a legal visa.
Stay tuned to the DC Daily Journal.
