Biden’s new deficit hawk persona has some progressives feeling some bad deja vu

Joe Biden spent the last two years pursuing and enacting massive domestic programs meant to remake the U.S. economy. But as he prepares a run for reelection, Biden is trying out a new economic persona: deficit hawk.

The president has made a fresh effort to sell his administration as a model of fiscal restraint in recent weeks, casting falling deficits as an increasingly central focus of his agenda. Biden now routinely touts a $1.7 trillion drop in the deficit on his watch as a top accomplishment. When the president releases his new proposed budget next week, he is expected to call for another $2 trillion in cuts over a decade.

“My economic plan is working,” Biden said in a speech last week, peppering his remarks with more than a dozen references to the deficit. “It’s reducing the deficit. It’s fiscally responsible.”

The growing fixation on the deficit is notable for a White House that championed an expansive economic agenda, including trillions of dollars in emergency deficit spending that, it says, proved critical to fighting the pandemic and revitalizing the economy.

The rhetorical shift has quietly worried some progressive-minded Democrats who warn it could undermine the case for future crisis aid — or backfire on Biden himself if the U.S. sinks into a recession that results in greater government spending and fewer tax receipts, driving the deficit higher.

But Biden has leaned enthusiastically into the deficit focus, driven by what advisers described in large part as a political calculation aimed at bolstering his economic record, winning over middle-of-the-road voters, and bludgeoning the GOP over its own deficit-busting policies in the process.

“There’s a salience to this right now,” said one White House official. “The political argument over deficits and spending is about two competing visions.”

Part of what’s driving Biden to home in on the deficit are the coming showdowns with the GOP later this year over the debt ceiling and federal budget.

The president has accused the GOP of demanding spending cuts while backing policies that would add $3 trillion to the national debt. In particular, he’s singled out their plans to roll back taxes on the wealthy and prescription drug reforms projected to ease the deficit. And he’s challenged House Republicans to release their own detailed budget proposal.

Biden’s deficit focus also serves as a preview of what advisers hope will be a clear line of attack in a potential 2024 rematch against former President Donald Trump. Biden himself has noted that “in the previous administration, America’s deficit went up every year, four years in a row.”

A White House spokesperson downplayed the recent uptick in deficit rhetoric, calling the issue a longstanding focus for Biden dating back to the Obama administration. And, so far, some progressives are willing to chalk it all up to political gamesmanship.

“It feels like more of a rhetorical point about the absurdity of Republican policies than an agenda,” said Adam Green, co-founder of the Progressive Change Campaign Committee, summing up the approach as, “We’ll steal your argument and make you look foolish.”

Still, Biden’s sharper approach toward the deficit of late has troubled other progressives, who fear it signals a surrender of any future willingness to use government support to help in tough economic times.

They note that most voters don’t vote on deficit concerns, and fear echoes of the Obama administration, when the White House spent precious time and resources making concessions to Republicans in hopes of a deficit reduction deal only to see one never materialize.

“You obviously worry. There’s a history here,” said Dean Baker, senior economist at the progressive Center for Economic and Policy Research. “I don’t think we’re likely to be there again, but if you did have some serious deficit reduction, we could see it really hitting the economy.”

Stephanie Kelton, an economist at Stony Brook University who advised Sen. Bernie Sanders’ 2016 presidential run, said Biden’s deficit rhetoric could complicate his defense of ambitious economic spending down the road. The administration’s student debt relief plan, for example, is projected to balloon the deficit by $400 billion over a decade — more than the entire savings created by last year’s Inflation Reduction Act.

The expiration of Trump-era pandemic relief spending helped drive down the deficit during Biden’s first two years. But much of the major legislation he’s signed since then, including investments in semiconductor manufacturing and infrastructure, are expected to add to the deficit in the coming years.

In addition, if the U.S. does hit a recession, the slowdown would naturally result in higher spending on government programs and lower tax revenue, driving up the deficit on its own.

“This is the most anticipated recession in the history of the country, and if it finally happens, I promise you the deficit is going to go much higher on its own,” Kelton said. “Might as well anticipate that and not talk yourself into a situation where you told everybody to evaluate you on your ability to keep bringing the deficit down.”

The White House has dismissed concerns about the risk of a recession, arguing that all the major indicators show a robust economy. Officials also said the administration draws a distinction between “long-term programmatic spending” that should be paid for, and “emergency spending,” like bills to fight the pandemic and aid Ukraine, that are not. The overarching focus on the issue, they added, is aimed at showing that it’s possible to reduce the deficit while strengthening government programs, rather than gutting them.

“[Biden] wants to reduce the deficit by having a real conversation about reforming the tax code, by cutting wasteful spending that we make to large corporations,” one White House official said. “He’s not interested in having a deficit reduction conversation that’s about cutting programs Americans really count on.”

Indeed, despite broader wariness of deficit talk, Biden’s refusal to abandon the remainder of his far-reaching Build Back Better agenda has eased concerns among most Democrats that Biden’s rhetoric is much more than a political tactic.

Biden is expected to follow through on his State of the Union vow to propose boosting taxes on billionaires, a revenue-raising move that effectively mainstreams an idea long popular in progressive circles. And he’s continued to push for expansive policies like reviving the expanded Child Tax Credit and instituting universal paid leave, even with no path to passing them through a divided Congress.

He has also stood firm on his pledge not to touch entitlements like Social Security and Medicare, more recently expanding his criticism of Republicans’ budget ideas to include warnings that the party might seek cuts to Obamacare or the Medicaid program.

White House allies said they expect the president’s forthcoming budget proposal will only serve to reinforce that more substantive vision — and as long as it keeps Republicans on the defensive, they’re happy to have Biden talk about the deficit as much as he wants.

“This White House is the opposite of chastened from its first two years agenda,” Green said. “They know what’s popular and they want to run on it.”