CBO Report Obscures Negative Impact Of 'Bidenomics': House Budget Committee Chairman

The chairman of the House Budget Committee has cast doubt on a recent Congressional Budget Office (CBO) report, which he says glosses over the failures of President Joe Biden’s economic policies.

cbo report obscures negative impact of bidenomics house budget committee chairman

The White House has said its policies have led to economic growth “from the middle out and bottom up—not the top down.”

The report, released Wednesday, was entitled An Update About How Inflation Has Affected Households at Different Income Levels Since 2019.”

Rep. Jodey Arrington (R-Texas), House Budget Committee Chairman, said in a May 14 press release that the report covers up the downsides of Bidenomics, while taking a “partisan” turn seemingly aimed at bolstering President Biden just six months before an election.

The report by the CBO, a federal agency that describes itself as “strictly nonpartisan,” was requested by Senate Budget Committee Chairman Sheldon Whitehouse (D-RI). An update to a September 2022 report, it shows the cumulative effects of inflation on households since 2019.

However, it does not provide a year-by-year breakdown of the five year period. Further, because it includes the period 2019 to January 2021, before President Biden took office, it conflates the favorable effects of the Trump-era Tax Cuts and Jobs Act “with the destructive economic and fiscal policies of the Biden Administration,” said the press release from the House Budget Committee.

Mr. Arrington said the CBO report “intentionally skewed the results to be more favorable to Biden by including the low inflation, high wage growth, economic benefits of 2019 and the large stimulus of 2020.”

“This CBO report conflates years of low inflation and rising wages with Bidenflation, which began after the passage of the Democrats’ American Rescue Plan (ARP) in March of 2021,” according to the press release.

The CBO analysis looked at the 2019 “consumption bundles” of U.S. households—that is, goods and services representing consumption in a typical year before the COVID-19 pandemic.

It highlighted that in households across all income quintiles, the proportion of income required to cover their 2019 “consumption bundle” decreased on average, because income outpaced prices over the four-year span.

During this period, households in the highest income quintile experienced the most significant reduction in the share of income required for their consumption bundle, the report noted.

Nonetheless, “The fiscal reality under Bidenomics is grim,” said Mr. Arrington.

Pointing to a concerning trend, he pointed out that the cumulative inflation rate is steadily climbing, having increased by 18.9 percent over four years. Inflation once again rose to 3.5 percent in March, its highest level in six months.

The press release also emphasized the erosion of families’ purchasing power. Families have to spend nearly $17,000 per year “to maintain the same standard of living they could afford before President Biden took office,” it said.

Rising Energy Costs Behind Inflation Surge

According to Mr. Arrington, even as the CBO paints a rosy picture, the U.S. economy is bogged down by a surge in general inflation. In an April statement on the rising inflation rate, he attributed the rise primarily to increasing energy expenses, particularly gasoline and electricity.

There were significant increases in clothing prices and transportation services as well, the House Budget Committee noted.

For an average family of four, according to the committee’s April statement, this translates to an additional expenditure of $16,726 per year or $1,393 per month to buy the same products and services they bought in January 2021.

The April report underscored the growing pessimism among Americans regarding future job prospects and income outlook, with 18.2 percent anticipating a decrease in job availability and 13.8 percent foreseeing a decline in their incomes in the short term.

Wednesday’s press release noted that consumer confidence for April fell for the third consecutive month this year, reaching its lowest level since July 2022.

“Despite the blatant attempts to pad Biden’s economic numbers, whether it’s at the gas station or the grocery store, the American people know all too well the cost of Bidenomics,” Mr. Arrington said Wednesday.

Bidenomics Drives Debt, Says Committee Chairman

Promoting “Bidenomics” has also made the country deeply indebted, says Mr. Arrington.

According to his committee’s April statement, on assuming office, President Biden inherited a total gross debt of $27.75 trillion, which has since ballooned by $6.86 trillion.

Experts including the International Monetary Fund (IMF) and the Cato Institute’s Ryan Bourne warn that the U.S. debt position is steadily deteriorating, with the country on the verge of a fiscal disaster unless efforts are taken to lower the federal budget deficit and limit debt growth.

“If current policies were left on autopilot, U.S. debt-to-GDP would near double over the next 30 years. It’s widely understood that this cannot go on,” Mr. Bourne told The Epoch Times in an email in April.

In its latest World Economic Outlook on April 16,  the IMF cautioned that while the United States’ economic performance is “impressive,” its long-term fiscal stance is unsustainable.

Has ‘Bidenomics’ Failed?

“Bidenomics” is the catchphrase for President Biden’s economic agenda, which includes his administration’s policy efforts, gains, and future intentions in the economic domain.

The phrase was coined by the media, but not in a complementary context; rather than dismissing it, President Biden has opted to accept and embrace the term.

Bidenomics has become a cornerstone of President Biden’s narrative about the economy’s strength under his leadership. It is expected to play an important part in his November re-election campaign.

The White House champions Bidenomics as a vision centered on three core pillars. These encompass making focused public investments to attract more private sector involvement, empowering and educating workers to bolster the middle class, and fostering competition to reduce expenses and support the growth of entrepreneurs and small businesses.

However, “the majority of Americans have a drastically lower standard of living thanks to Bidenomics,” according to a December LinkedIn post by Armstrong Economics, a global markets and geopolitical strategy think-tank. “Some estimates believe 63% of Americans now live paycheck to paycheck,” the post said.

According to a February CNN poll, 55 percent of Americans feel Biden’s policies have worsened economic conditions in the United States.

In a CNN survey conducted last May—as President Biden was stressing the achievements of Bidenomics—two-thirds of Americans expressed disapproval of his handling of the economy, while slightly over three-quarters believed that the economy was in poor condition.

According to a May Poll by ABC and market research firm Ipsos Group, the economy and inflation remain the most important issues for Americans when determining who they may support for president in November.

On these matters, more Americans trust former President Donald Trump on most issues than President Biden, and believe they were financially better off under the Trump administration, according to the poll.

“Enough is enough,” said Mr. Arrington in his April comments. “ We need to step back from the fiscal cliff and restore fiscal sanity in Washington by doing two simple things: cutting spending and growing the economy.”

Authored by Indrajit Basu via The Epoch Times May 17th 2024