President Joe Biden has repeatedly tried to flip the script about the GOP claiming to be the party of fiscal responsibility, saying Republicans’ plans would add $3 trillion to the debt over the next decade. There are some Republican proposals that would add to the debt, but the most recent Republican Study Committee budget proposal also includes deep spending cuts, which would trim deficits far more than Biden proposed doing.
The biggest deficit driver highlighted by Biden is Republican efforts to extend the tax cuts championed by then-President Donald Trump in 2017. They’re set to expire after 2025, and extending them, as the Republican Study Committee budget released last summer proposes, would add $2.7 trillion to the debt over 10 years, Biden says.
But that budget also includes $16.6 trillion in spending cuts, and purports to balance the federal budget in seven years.
In other words, Biden is cherry-picking Republican priorities that would add to the deficit, while ignoring that Republicans are also calling for spending cuts that would more than make up for those losses.
Repealing the Inflation Reduction Act
“The truth is, if you look at their [Republicans’] record, it’s clear they’re not the party who cares about fiscal responsibility,” Biden said at the House Democratic Caucus Issues Conference on March 1.
“Look, folks, let’s be crystal clear about what’s happening,” Biden said in remarks about the economy on Feb. 15. “If you add up the proposals … my Republican friends have offered just so far, what they’ve offered these now — it would add more than $3 trillion to the debt over 10 years. Three trillion dollars.”
By contrast, Biden said the budget he plans to introduce in coming days would “cut the deficit by $2 trillion in 10 years.”
In a speech the day before, and in a fact sheet released by the White House, Biden laid out the details for his claim that Republican proposals would add $3 trillion to the debt. The fact sheet cites the Republican efforts to repeal the Inflation Reduction Act, which included several deficit-reducing provisions that Biden highlighted in his speeches.
First on the fact sheet’s list is the Republican efforts to rescind nearly $80 billion in new funding for the IRS included in the Inflation Reduction Act championed by Biden. In January, Republicans in the House passed a bill to ax that funding.
One of our whoppers of the year for 2022 was the false Republican talking point that the IRS funding paid for “87,000 IRS agents” who were coming after the “middle class.” As we wrote then, most of the new employees would replace retiring or departing workers and most new positions would be in customer service, the Treasury Department told us.
Some IRS hires would be tax enforcers, but their focus would be auditing high-income earners to make sure they pay the taxes they legally owe the government, administration officials have said. The Congressional Budget Office estimates that the enhanced enforcement, less the cost of that enforcement, will result in a net $114 billion reduction in deficits over 10 years.
“They made it clear in legislation they’ve introduced to — the — the investment we’ve made to crack down on tax cheats — billionaires and millionaires,” Biden said. “The CBO says by doing away with that — those extra agents, we’re going to cost the American public another $114 billion in lost revenue.”
Biden also cites a provision of the Inflation Reduction Act that allows the federal government to negotiate prices for some Medicare drugs, starting in 2026. After Biden delivered his State of the Union address, Republican Sen. Rick Scott put out an ad that made the misleading claim that the law would cut Medicare by $280 billion. As we have written, the law seeks to lower prescription drug costs by allowing Medicare to negotiate some prescription drug prices, not by cutting benefits.
The Committee for a Responsible Federal Budget estimated the Medicare provisions in the bill, including a drug price inflation cap, would reduce federal deficits by about $159 billion over 10 years.
“We finally have made Medicare negotiate the drug prices,” Biden said. “Well, they want to repeal that. They want to repeal the prescription drug savings and increase subsidies to Big Pharma. … That’s saving the taxpayers $159 billion a year. That’s — they’re paying that much less out to Medicare recipients. Well, folks, you take that away, it raises the deficit $159 billion.”
“We passed a law to make sure corporations pay at least 15% tax,” Biden said. “They want to repeal, again, that tax. They want to repeal the corporate minimum tax, which is 15%. If they do that, that’ll add $222 billion to the deficit — if they repeal what we passed.”
Extending the Trump Tax Cuts
In order to pass that tax bill through budget reconciliation, a process requiring only a majority vote in the Senate, Republican lawmakers could not propose a law that would add more than $1.5 trillion to the deficit over 10 years. To fit that ceiling, the bill was structured so that most of the individual income tax cuts would expire after 2025, even though Republicans at the time said they fully expected a future Congress to extend those tax cuts.
The Committee for a Responsible Federal Budget, citing CBO data, estimated that “extending the individual income and estate tax provisions that are set to expire after 2025 would cost $2.2 trillion through 2032; also extending business tax provisions that are set to expire or become less generous would increase the cost to $2.7 trillion.”
“They want to extend the Trump tax cuts from the previous four years, which cost $2.7 trillion to the deficit, and extend it,” Biden said. “And guess who gets it? You all don’t.”
Biden doubled down on that claim in a speech on Feb. 28, saying Republicans “want to cut taxes for the very wealthy, again.”
But as we have written, the tax cuts passed by Republicans in 2017 benefited taxpayers in all income categories, on average, according to an analysis of the law by the Tax Policy Center. TPC estimated that in 2025, those in the middle 20% of earners would see an average tax decrease of about $910.
For years, Democrats seized on the talking point that 83% of the benefits of the Trump tax cuts went to the top 1% of income earners. That was misleadingly based on looking only at the later years of the tax law, after most of the individual income tax changes were set to expire.
In 2025, TPC estimated the top 1% of income earners would glean 25.3% of the tax cut benefits — a sizable chunk, but far less than the figure cited by Democrats. If the tax cuts were extended, while the biggest percentage gains would still be enjoyed by those with the top incomes, the tax cuts would continue to benefit people of all income levels. For example, most taxpayers benefit from extending the tax law’s reduced individual income tax rates and its doubling of the standard deduction. According to the Tax Policy Center, in 2025, before some of the tax cuts expire, “76 percent of taxpayers would experience a tax cut.”
Biden is correct that the Republican efforts outlined above, if passed, would add to the nation’s debt. But Biden is painting an incomplete picture of the Republicans’ plans.
The Republican Study Committee Budget
The budget for fiscal year 2023 proposed last June by the conservative Republican Study Committee, which is made up of 173 House Republicans, would make dramatic spending cuts to balance the budget within seven years. However, as we noted recently, the group’s spokesperson said the budget and spending task force is made up of only about 10 members. There was no full committee vote on the budget and every task force member is “not required to sign off on every part of the budget.” Nonetheless, it is the latest budget put forth by the committee.
The IRA was not passed before the budget was released, so it did not address some of the issues raised by Biden. But it did include extension of the Trump tax cuts, which is by far the biggest ticket item on Biden’s list of Republican efforts that would “explode” the federal debt.
However, that budget also includes deep spending cuts — $16.6 trillion over 10 years — including the elimination of dozens of federal programs.
“Biden’s statement is a gross misrepresentation of RSC proposals, and conservative policy in general,” RSC spokesperson Miranda Dabney told us via email. “He’s cherry picking a few line items and completely ignoring the fact that we have pay-fors. A budget is bigger than any singular line item, everything in it works together to achieve the final result. The RSC budget balances in just 7 years, because – unlike Democrats – funding our policies is a top priority for conservatives.”
Dabney said the RSC is currently working on a fiscal 2024 budget plan, “which won’t necessarily be a copy & paste repeat of FY 23. The goal is always to balance in less than 10 years, but it won’t be exactly the same.”
Achieving a balanced budget in 10 years will be difficult, though.
In order to reach balance within seven years under the FY 2023 plan, the RSC budget cuts included numerous changes to Social Security and Medicare, including raising the age of eligibility for both programs and reducing Social Security benefits for high-income earners.
Those changes would be at odds with former President Trump’s directive in a Jan. 20 video message that, “Under no circumstances should Republicans vote to cut a single penny from Medicare or Social Security.”
In a Feb. 24 analysis of what it would take to balance the budget within 10 years, the Committee for a Responsible Federal Budget said all spending would have to be cut by 27%.
“The necessary cut would grow to 78 percent if defense, veterans, Social Security, and Medicare spending were off the table,” CRFB wrote.
And that doesn’t even include the additional savings that would be necessary if all of the 2017 tax cuts were extended.
“Wanting to balance the budget is an admirable and desirable goal,” CRFB said. “However, the path to get to balance within ten years is likely infeasible, and it is virtually impossible if major parts of the budget and tax code are exempt from change.”
Biden said the White House will propose a new budget plan on March 9 that would include $2 trillion in savings over the next 10 years. CRFB estimates that it would require $16 trillion of deficit reduction through FY 2033 to achieve balance within 10 years, which is not a goal of the Biden budget.
In October, CRFB proposed a budget blueprint that would shave $7 trillion off deficits over the next 10 years. While it would fall well short of balancing the budget within 10 years, it would “reduce the 2032 deficit to 2.9 percent of GDP (down from 6.6 percent) when incorporating stronger economic growth effects.”
We should caution, as we always do, that budget plans proposed by the White House or the Republican Study Committee are largely symbolic statements of priorities, not legislation on which Congress actually votes.
But when Biden says Republican proposals would add $3 trillion to the nation’s debt, he is not including corresponding deep spending cuts that were part of a recent Republican Study Committee budget. Whether those cuts are realistic or achievable, or whether Republican House leaders seek changes to Social Security or Medicare, remains to be seen. But Biden is cherry-picking Republican plans if he doesn’t mention those proposed cuts.
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