By: Azhar Azam
Joe Biden’s budget proposal for the fiscal year 2024 claimed the US president, during his two years in office, had slashed the budget deficit by more than $1.7 trillion; a large part of the deficit reduction had resulted from the expiring and shrinking expensive spending related to the coronavirus pandemic.
The Congressional Budget Office (CBO)'s most recent non-partisan analysis for the US Congress also torments Biden’s assertion to reduce the deficit by almost $3 trillion over the next decade by projecting the country's deficit will continue to climb and outpace the $20 trillion mark between 2024 and 2033.
Biden, verily, is responsible for much of the deficit America would accumulate over the next few years. In September 22, the Committee for a Responsible Federal Budget estimated his policies through legislation and executive actions were slated to add more than $4.8 trillion to the country’s deficits between 2021 and 2031.
Data from the US Treasury Department – showing America’s deficit has increased 52% to about $723 billion in just five months of October 2022 to February 2023 as compared to the same period last year – doubts Biden will be able to deliver on his commitment as deficit amplifies with public and gross federal debt rising to $43.5 trillion and $52 trillion respectively by 2033, according to the CBO. Biden's own proposal predicts the deficit and federal debt to swell to about $2 trillion in 2024 and $50.6 trillion through 2033.
The Washington Post editorial on March 9 warned “If nothing changes, the United States will soon be in an uncharted scenario that weakens its national security, imperils its ability to invest in the future, unfairly burdens generations to come and will require cuts to critical programs such as Social Security and Medicare,” which Biden's blueprint promises to protect and strengthen but the CBO cautions are heading to insolvency within the ten years.
If three of the major programs – the Highway Trust Fund, Medicare’s Hospital Insurance Trust Fund and Social Security’s Old-Age and Survivors Insurance Trust Fund – are bankrupted, associated benefits to Americans will be cut by up to 45%, per the CBO. Other measures such as 1% payroll tax and raising taxes on gas and diesel may delay the insolvency; they will put Americans, facing tsunami-like inflation, under tremendous financial burden.
The situation requires the Biden administration to combine forces to tackle these pressing issues of public interest but it is overlooking them for speculative security threats from China. Apprehensive about Beijing's successful courtship of the Pacific Island Countries (PICs), Biden has included more than $7 .1 billion in his federal budget proposal for economic assistance to three of these nations – the Marshall Islands, Micronesia and Palau – in exchange of military basing rights and other preferential treatment over the period of 20 years to bring them under its orbit. This is what the US has been negotiating for some time through the Compact of Free Association to retain its military access in the Pacific.
China doesn’t make political interference or consider the Pacific as an arena of strategic competition. Beijing is one of PICs’ leading trading and investment partners as well as a key source of regional infrastructure development under the Belt and Road Initiative. As climate change is the region's top concern, China's role as a “responsible global actor” in the fight against common international challenge and support through launching of the Center for Disaster Risk Reduction Program has earned goodwill and drawn appreciation from the PICs.
The appointment of a special envoy to the PICs, Qian Bo, by the Chinese government has immediately unnerved the former US officials about conceding Washington’s influence to Beijing; it reestablishes China’s commitment to develop infrastructure and financially assist the economically-lagging region. Meeting its pledge to increase the provision of materials and help PICs counter the non-traditional threats, Beijing recently gave $500,000 to Vanuatu in addition to $100,000 donated by the Chinese Red Cross Society to bolster the South Pacific nation efforts to cope with the aftershocks of the twin cyclones, Judy and Kevin, which have affected almost half of the population.
In an attempt to out-compete China and restore US global leadership, Biden’s budget proposal requests billions in spending to reinforce America's role in the Indo-Pacific with a particular focus on PICs and supports the Department of Defense’s $9.1 billion Pacific Deterrence Initiative. This military adventurism in the past contributed to significant economic setbacks to the country's economy, squeezing its ability to invest in public infrastructure. Washington needs to draw a lesson from history for this militaristic approach will endanger the PICs' future and widen the US budget deficit at a much faster pace by draining more national resources to strategic competition with Beijing out of fear later closing the economic, industrial and technological gap with the former.