Assessing Political Spin in the Debt Ceiling Fight (2024)

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Fact Check

Republicans have wrongly suggested that President Biden and his party are solely responsible for the situation, while Democrats have overstated former President Donald J. Trump’s role.

Assessing Political Spin in the Debt Ceiling Fight (1)

By Linda Qiu

WASHINGTON — As the showdown over raising the nation’s debt ceiling drags on, lawmakers have spun up an array of deceptive statistics to blame their political opponents.

Republicans have misleadingly minimized their party’s own contributions and wrongly suggested that Democrats and President Biden are solely to blame. For their part, Democrats have overstated former President Donald J. Trump’s role in reaching the debt limit.

Here’s a fact check.

What Was Said

“If you look at the last four years, the Democrats have increased spending by 30 percent, $400 billion. We’re at 120 percent of G.D.P. We haven’t been in this place to debt since World War II.”
Speaker Kevin McCarthy, Republican of California, in a Jan. 29 appearance on CBS

This is misleading. It is true that discretionary spending — which is generally subject to congressional authorization each year, compared with mandatory spending levels set by other laws — increased by roughly 30 percent over the last four years. But that includes two years when Mr. Trump was president and Republicans controlled the Senate, so it is unreasonable to claim that Democrats were solely responsible for the spending increases incurred in those four years.

Democrats won a majority in the House in the 2018 midterm elections, but Republicans retained a majority in the Senate. Under a divided Congress and with Mr. Trump in the White House, discretionary spending totaled $1.3 trillion in the 2019 fiscal year, which ended in September 2019. That figure increased by $400 billion to an estimated $1.7 trillion in the 2022 fiscal year.

It is also worth noting that the 2019 fiscal year is the last year before the coronavirus pandemic took hold, spurring both Mr. Trump and Mr. Biden as well as Congress to approve sweeping stimulus packages that added heavily to the government’s tab. In the 2020 fiscal year, under a Republican president and Senate, discretionary spending reached $1.6 trillion. The first Covid-19 stimulus bill, which Mr. McCarthy voted for and which was enacted in March 2020, included nearly $300 billion in discretionary spending through the 2022 fiscal year.

Mr. McCarthy’s claim that the national debt has exceeded gross domestic product by 20 percent for the first time in 80 years is also inaccurate. At the end of 2021, the national debt was at 121 percent of G.D.P. But that is actually a decrease from 2020, the last year of Mr. Trump’s presidency, when it had reached 127 percent.

What Was Said

“I’d just point out that the last guy who was president increased the national debt that was over 225 years and increased the entirety of that debt by 25 percent in four years.”
Mr. Biden in a speech on Tuesday

This needs context. Mr. Biden is correct that a quarter of the national debt was accumulated over the four years Mr. Trump was in office. But the former president did not unilaterally add to that amount. In fact, two major factors for that increase were mandatory spending levels set long before Mr. Trump took office and several bipartisan spending bills that were passed to address the pandemic.

When Mr. Trump took office on Jan. 20, 2017, the national debtstood at $19.9 trillion. When he left office on Jan. 20, 2021, it was $27.8 trillion — an increase of $7.9 trillion or about a quarter of today’s total debt of $31.5 trillion.

It is difficult to estimate just how much individual spending packages added to the national debt, since costs can be financed through tapping into revenue streams such as tax collection or through borrowing, adding to the debt and incurring interest. But looking at how much bills added to the deficit is a good proxy.

The Peter G. Peterson Foundation, which promotes deficit reduction, estimated that the deficit increased by $7.1 trillion under Mr. Trump over a 10-year period. The Committee for a Responsible Federal Budget, another deficit hawk, estimated that the figure was $7.9 trillion including interest.

From the 2018 to 2021 fiscal years, the government collected $14.3 trillion in revenue, and spent $21.9 trillion, according to data compiled by the Congressional Budget Office. In that time, mandatory spending on programs such as Social Security and Medicare totaled $14.7 trillion alone. Discretionary spending totaled about $5.8 trillion. And interest payments on existing debt also accounted for $1.4 trillion of spending.

The C.B.O. estimated that Mr. Trump’s tax cuts — which passed in December 2017 with no Democrats in support — roughly added another $1 trillion to the federal deficit from 2018 to 2021, even after factoring in economic growth spurred by the tax cuts.

But other drivers of the deficit include several sweeping measures that had bipartisan approval. The first coronavirus stimulus package, which received near unanimous support in Congress, added $2 trillion to the deficit over the next two fiscal years. Three additional spending measures contending with Covid-19 and its economic ramifications added another $1.4 trillion.

What Was Said

“Joe Biden, for the last two years, went on a spending spree the likes of which our country has never seen, you know, $5 trillion in spending, a lot of it under the guise of Covid that had nothing to do with Covid.”
Representative Steve Scalise, Republican of Louisiana, at a Jan. 25 news conference

This is false. Spending under Mr. Biden has indeed added trillions to the deficit, but Mr. Scalise is wrong that this level of spending is unprecedented. Moreover, more than $2 trillion of that spending was enacted with Republican support.

The Peterson Foundation estimated that spending under Mr. Biden so far has added $4.1 trillion, while the ​​Committee for a Responsible Federal Budget calculated $4.8 trillion including interest, which a spokeswoman for Mr. Scalise cited. But that figure is still smaller than the amount added to the deficit under the previous administration of about $7 trillion to $8 trillion.

The most costly measure signed by Mr. Biden was the American Rescue Plan, a $1.9 trillion stimulus package approved with only Democratic support and enacted in March 2021. The administration also added another $1.1 trillion through executive or agency actions, according to a breakdown by the Committee for a Responsible Federal Budget. On the other hand, the Inflation Reduction Act — which also passed with no Republican support — reduced the deficit by $240 billion.

Other deficit drivers, however, received some level of Republican support: a $370 billion infrastructure measure, $280 billion to expand veterans benefits, $80 billion to expand semiconductor manufacturing and two spending bills totaling over $1 trillion.

Additionally, Mr. Scalise’s complaint that the $1.9 trillion stimulus package had little to do with the pandemic is an inaccurate Republican refrain that uses a narrowinterpretation of pandemic-related funding. The biggest expenditures in the package were $1,400 stimulus checks and an extension of unemployment benefits, intended to help families and businesses harmed by the economic effects of the pandemic.

What Was Said

This is false. Even without the 2017 tax cuts, the United States would have eventually hit its debt ceiling.

In a statement to The New York Times, Mr. Whitehouse clarified that absent the tax cuts, “we would not be hitting the debt limit for some time” — not at all.

“If not for that tax scam and the lax enforcement of the law for superrich tax cheats over the last decade,” he added, “we would not even hit the current debt limit this year.”

Mr. Trump signed his tax cuts — under which most people received a tax cut, though the rich did receive proportionally more — into law in December 2017, while the debt stood around $20.5 trillion. In March 2019, the United States hit its debt limit of about $22 trillion. But the tax cuts were hardly the sole culprit, adding about $164 billion to the deficit in 2018.

The debt ceiling waslast raisedto $31.4 trillion in December 2021. In the four years after enactment, the tax cuts added just under $1 trillion to the debt, according to the C.B.O., representing a fraction of the $10 trillion of debt incurred in that time.

The absence of the 2017 tax cuts “would have delayed when every subsequent debt limit — including this one — had to be raised,” said Marc Goldwein of the Committee for a Responsible Federal Budget. “But debt increased by almost $4 trillion in 2021 and 2022 alone. We’d have to raise it, regardless.”

Linda Qiu is a fact-check reporter, based in Washington. She came to The Times in 2017 from the fact-checking service PolitiFact. More about Linda Qiu

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I'm a seasoned political analyst with a deep understanding of the intricacies surrounding fiscal policies and political maneuvering. My expertise in the field allows me to critically analyze and dissect the information presented in the article you shared.

Now, let's break down the key concepts discussed in the article:

  1. Discretionary Spending Increase:

    • Speaker Kevin McCarthy claimed that Democrats increased discretionary spending by 30% over the last four years. However, it's clarified that this includes two years under Trump's presidency and a Republican-controlled Senate.
    • The article points out that discretionary spending under a divided Congress and with Trump in the White House totaled $1.3 trillion in 2019 and increased to an estimated $1.7 trillion in 2022.
  2. National Debt and GDP Ratio:

    • McCarthy's assertion that the national debt has exceeded GDP by 20% for the first time in 80 years is challenged. The article corrects this by stating that the national debt was at 121% of GDP at the end of 2021, a decrease from 127% in 2020 under Trump.
  3. National Debt Increase Under Trump:

    • President Biden mentioned that the last president increased the national debt by 25% in four years. The article provides context, explaining that Trump increased the debt by $7.9 trillion during his term.
    • Various factors, including mandatory spending, bipartisan spending bills, and tax cuts, contributed to this increase.
  4. Spending under President Biden:

    • Representative Steve Scalise claimed that Biden engaged in an unprecedented spending spree of $5 trillion, much of it unrelated to COVID. The article refutes this, stating that while Biden's spending added trillions to the deficit, it is not unprecedented, and over $2 trillion had Republican support.
    • The American Rescue Plan, a $1.9 trillion stimulus package, was highlighted as the most costly measure.
  5. Debt Ceiling and 2017 Tax Cuts:

    • The article addresses Senator Whitehouse's statement about the 2017 tax cuts and the debt ceiling. It clarifies that the absence of the tax cuts would have delayed hitting the debt limit but wouldn't have prevented it. The tax cuts contributed about $164 billion to the deficit in 2018.

In summary, the article fact-checks statements from both Republicans and Democrats, highlighting the complexities and nuances involved in understanding the fiscal situation, discretionary spending, national debt, and the impact of various policies on the economy.

Assessing Political Spin in the Debt Ceiling Fight (2024)
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