Biden to tout falling U.S. budget deficit in speech

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U.S. President Joe Biden salutes as he boards Air Force One to return to Washington from Maxwell Air Force Base in Montgomery, Alabama, U.S. May 3, 2022. REUTERS/Jonathan Ernst/File Photo

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May 4 (Reuters) – U.S. President Joe Biden on Wednesday will address his efforts to reduce the nation’s budget deficit, noting that it is expected to fall for the second straight year amid a recovering economy and waning emergency spending, according to the White House.

Biden and his fellow Democrats have come under fire from Republicans for a historic rise in inflation that some critics say stems from overspending in Washington amid the COVID-19 pandemic as well as global supply constraints.

The president is scheduled to deliver his economic speech at 2 p.m. (1800 GMT).

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He will discuss “his commitment to reducing the deficit going forward while making critical investments to boost the capacity of our economy and lower costs for American families – essentials like prescription drugs, health care, and utility bills”, a White House official said.

Biden is still seeking a nearly $2 trillion bill to expand the social safety net and tackle climate change, but Democratic U.S. Senator Joe Manchin has effectively blocked it, citing spending concerns.

The United States has reported budget deficits every year since 2001. Beginning in 2016, increases in spending on Social Security, healthcare and interest on federal debt have outpaced the growth of federal revenue.

In the past few years, the annual deficit has ballooned to around $3 trillion due to pandemic spending and loss of revenue. In 2017, Republicans ushered in a massive tax-cut bill under former President Donald Trump that by some estimates has added more than $1 trillion to the debt.

Biden would note that the budget deficit fell by more than $350 billion in his first year and that new U.S. Treasury estimates showed it would fall by more than $1.5 trillion this year – the largest deficit reduction in a single year on record and a revision up from the $1.3 trillion projected in the president’s budget released earlier this year, the official said.

The Treasury Department also estimates that it will pay down the national debt this quarter for the first time since 2016.

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Reporting By Jarrett Renshaw; Editing by Sam Holmes, Susan Heavey and Alex Richardson

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