In 2022, Americans did not see much, if any, relief from the economic pain inflicted by the Biden administration in 2021. In fact, things got much worse in several areas. Gas prices hit their all-time highs over the summer as Americans struggled to make ends meet while inflation's lasting effects drained savings, drove up debt balances, and workers' real wages remained negative. Biden's chronically underwater approval — and even worse rating on handling the economy — reflects how unhappy Americans are with Biden's tenure in the Oval Office.
For those who may have hoped that things may turn around — a pivot toward the positive that Biden already claims has happened — a new report from the Congressional Budget Office has bad news, especially as Biden has pledged that he's not going to do anything differently despite Republicans narrowly retaking control of the House of Representatives.
The CBO's top line conclusion of the U.S. economy for 2023 and 2024 is...bleak:
[E]conomic growth will probably be slower in 2023 than the agency projected in May 2022, reflecting recent developments (including higher interest rates), and faster in 2024, as the economy recovers. Rates of unemployment, inflation, and interest will probably be higher over the next two years than CBO projected in May 2022. Slower economic growth and higher rates of unemployment, inflation, and interest increase federal deficits and debt.
That is, in terms of good economic news as we look to the new year, there is no good news — at least according to the Congressional Budget Office.
Within the six page forecast for the U.S. economy and its impacts on the federal budget over the next two years are some scary-looking numbers.
Among them, a projection that we could see Real GDP growth sink to -2.0 percent in 2023, which House Budget Committee Republicans noted would be a 200 percent reduction from the CBO's estimate for next year when Biden first took office.
They also noted that the CBO's forecast for inflation could go as high as double what the congressional scorekeeper previously projected — a fearsome reality for Americans that would likely in turn trigger even more aggressive interest rate hikes from the Federal Reserve.
On Fed interest rate hikes, the CBO projects a 4.8 average for 2023, a 4,700 percent increase from the February 2021 estimate in the early days of Biden's presidency.
As the economy is expected to struggle under even more inflation, projected interest rate hikes, and negative GDP growth as a result, the CBO's estimates for unemployment in the next two years are more bad news.
At present, according to the November jobs report, unemployment sits at 3.7 percent. But in 2023, CBO projects a 5.1 percent average unemployment rate with a potential high-water rate of 6.4 percent and the low end still 0.1 percent above the current rate. In 2024, CBO forecasts a 4.8 percent average rate. Both averages are between 30 and 38 percent higher than the current unemployment situation.
And when it comes to the Biden economy's effect on the federal budget, CBO expects the federal deficit to continue spiking by hundreds of billions of dollars despite Biden's dubious claims that he's doing more to reduce deficits than anyone in modern political history.
In 2023, the CBO projection is for an increase in deficits between $200 and $300 billion. In 2024, the scorekeeper expects another $210 to $480 billion worth of increases in deficits.
Commenting on the CBO's projections for 2023, House Budget Committee Republican Leader Jason Smith (MO) said "that unless better policies are put in place to strengthen America's economy, grow jobs and wages, and rollback reckless spending, Americans will continue to feel the effects of the Democrats' failed economic policies for years to come."
"The last two years of Democrat one-party rule have been a disaster for working families who are struggling just to put food on the table," Rep. Smith continued. "President Biden and Washington Democrats’ $10 trillion spending spree sparked inflation, forcing the Federal Reserve to raise interest rates to combat the highest spike in prices in 40 years, and have set our economy on a course for more pain to come."
As the GOP prepares to take control of the lower chamber, Smith reiterated House Republicans' commitment "to use our new majority to stop the bleeding, fight back against wasteful spending, support higher wages, a stronger economy, energy independence, and to stop surrendering American jobs and supply chains to China."