Get PolitiFact in your inbox.

The deficit has fallen under Joe Biden. It’s still higher than before the pandemic.

(AP) (AP)


Louis Jacobson
By Louis Jacobson March 5, 2024

President Joe Biden has often touted that his administration has cut the federal deficit, sometimes communicating that record more accurately than others.

At campaign fundraisers in December and February, he told audience members that on his watch, the deficit fell by "$7 billion."

The actual decline is more than $1 trillion, not billion. 

He used the more accurate figure in other appearances, including a Dec. 19 fundraiser in Bethesda, Maryland, and in Jan. 19 remarks to the U.S. Conference of Mayors at the White House.

Before Biden’s third State of the Union address, we wanted to take a deeper look into the reasons for the declining deficit.

Biden has presided over smaller deficits than the Donald Trump administration saw in its final year. However, Biden’s remarks omit important context about the unusual federal spending that both presidents approved to stabilize the country during the coronavirus pandemic. 

"President Biden has presided over declining deficits, but that’s because the deficit started staggeringly high because of the pandemic," said Steve Ellis, president of Taxpayers for Common Sense, a group that tracks federal spending. "If you compare the deficit to pre-pandemic levels, they are incredibly high. Some of that is still residual effects from the pandemic response and higher interest rates, but it is also from increased spending and decreased revenues."

What is the deficit? What is the debt?

The deficit isn’t the same as the debt, although the terms are related.

The federal deficit is calculated by subtracting federal spending from federal revenue, primarily tax collections, for a given year. If revenue exceeds spending, there’s a surplus for that year; if spending exceeds revenue, there’s a deficit. (There hasn’t been a federal surplus since 2001.)

The national debt is the accumulation of all past deficits, minus any surpluses. 

A smaller deficit does not mean the federal debt has been reduced; only a surplus can do that. A smaller deficit means only that the debt grows more slowly than it did before.

So, the debt has continued to rise under Biden. When Biden entered office, the broadest measure of the federal debt stood a little below $27.8 trillion. Currently, it’s around $34.4 trillion, an increase of almost one-fourth in just more than three years.

The debt also rose under Trump, by about $7.8 trillion over his four years in office.

How big has the deficit been in recent years?

Biden has spoken mostly about the annual deficit, not the debt, so we’ll consider that metric. 

During Trump’s presidency, the deficit rose from $666 billion in 2017, his first year in office, to $984 billion in 2019, his third year.

But the coronavirus pandemic sent the annual deficit into record territory. In 2020, Trump’s fourth year, the deficit skyrocketed to $3.13 trillion, largely because of government stimulus payments, unemployment insurance expansions, business operation grants and increased funding for public health.

The deficit remained high in 2021, another significant pandemic year. That year, the newly elected Biden signed the American Rescue Plan Act, which provided more money for the pandemic response. In 2021, the deficit fell but remained historically high, at $2.78 trillion.

The deficit declines were greater during Biden’s second and third years in office, as vaccines and therapies cut the risks associated with COVID-19 and the economy opened. The deficit was about $1.38 trillion in 2022 and $1.7 trillion in 2023.

The $1.4 trillion decline in the deficit from 2021 to 2022 was larger than any previous one-year reduction in the deficit. 

How much credit does Biden deserve for reducing the deficit?

Although Biden often touts the federal spending allocated in bills he’s signed — including the CHIPS and Science Act, the Inflation Reduction Act and the Bipartisan Infrastructure Law — he’s also tried to promote the argument that he’s been responsible with the public purse, most recently at the fundraisers.

The White House told PolitiFact that Biden deserves some credit for successfully tamping down the pandemic, which was aided by the administration’s embrace of vaccinations. 

Also, White House officials say that key legislation Biden signed, such as the Inflation Reduction Act, was written in a way to boost federal revenue enough to balance out the spending increases. The Fiscal Responsibility Act, which Biden signed in 2023 as a negotiated way to lift the debt limit, included spending curbs that were designed to reduce deficits from 2024 to 2033 by a collective $1.5 trillion, according to Congressional Budget Office projections.

However, the pandemic was an extraordinary historical occurrence that provoked an aggressive, and temporary, government response. The other bills Biden signed, although large in dollars, are phasing in their spending over a decade.

The Committee for a Responsible Federal Budget, a nonprofit public policy group, told PolitiFact that by their estimate, more than 80% of the reduction in the deficit under Biden can be explained by expiring or shrinking COVID-19 relief.

Even at its reduced levels, the deficit remains higher under Biden than it was pre-pandemic. The deficit in 2022 and 2023 under Biden was higher than in each of Trump’s first three years, partly because of bills such as the 2021 American Rescue Plan.

The same pattern emerges when the deficit is compared with the U.S. gross domestic product, a common measure of the overall size of the economy. The deficit peaked at 14.7% of gross domestic product in 2020 and fell to 5.4% in 2022. That was still bigger than the highest pre-pandemic percentage under Trump, which was 4.6%.

Sign Up For Our Weekly Newsletter

Our Sources

Joe Biden, remarks at campaign fundraisers on Dec. 9 in Pacific Palisades, California, Dec. 12 in Washington, D.C., and Feb. 4 in Las Vegas, Nevada

Joe Biden, remarks at a Dec. 19 fundraiser in Bethesda, Maryland and a Jan. 19 speech  to the U.S. Conference of Mayors.

Congressional Budget Office, "Historical Budget Data: Data on revenues, outlays, and the deficit or surplus from 1962 through the most recent year completed," February 2024

Congressional Budget Office, "How the Fiscal Responsibility Act of 2023 Affects CBO’s Projections of Federal Debt," June 2023

PolitiFact, "Joe Biden leaves out context in ‘60 Minutes’ comment on debt reduction," Sept. 20, 2022

PolitiFact, "Joe Biden blames Donald Trump for one quarter of today’s debt, ignores context," Jan. 25, 2023

PolitiFact, "Fact-checking Joe Biden’s statement about semiconductor investments and CHIPS Act," Feb. 29, 2024

Email interview with Steve Ellis, president of Taxpayers for Common Sense, March 5, 2024

Browse the Truth-O-Meter

More by Louis Jacobson

The deficit has fallen under Joe Biden. It’s still higher than before the pandemic.