White House cuts 2023 US deficit forecast after court blocks student loan forgiveness

White House cuts 2023 US deficit forecast after court blocks student loan forgiveness

The White House has revised its fiscal 2023 U.S. budget deficit forecast to $1.543 trillion, which is $26 billion lower than the March budget forecast. This decrease is primarily due to a reduction in outlays after the Supreme Court invalidated President Joe Biden’s student loan forgiveness program in June.

According to the Office of Management and Budget (OMB), the student loan decision will result in a $259 billion reduction in fiscal 2023 outlays. This partially reverses the Biden administration’s upfront charge of $430 billion against fiscal 2022 results to cover the program’s costs.

Although the Supreme Court blocked the student loan forgiveness program, President Biden announced revisions to an income-driven student loan repayment program. These revisions aim to reduce the amount that low-income workers pay by approximately $1,000 per year and shorten their repayment period.

However, these changes, along with other modifications, will lead to an additional $74 billion in costs in 2023. As a result, the overall savings from the court’s decision will be reduced. OMB also projects that these changes will increase outlays by $85 billion through 2033.

The OMB’s Mid-Session Review update estimates a net reduction in 2023 outlays of $242 billion, taking into account the student loan savings, as well as lower unemployment compensation, increased costs for Social Security and Medicare, and clean energy tax credits.

Estimates for credits associated with Biden’s Inflation Reduction Act, such as those for electric vehicle purchases and investments in battery production, are $4 billion higher for 2023 and $120 billion higher over a decade compared to previous forecasts.

The reduction in outlays for 2023 is largely offset by a $215 billion net reduction in receipts. This is primarily due to lower collections to date and technical revisions based on new tax reporting data, according to the budget office.

Changes in economic forecasts have minimal impact on the budget forecast revisions, increasing 2023 receipts by only $4 billion compared to March forecasts. OMB maintains its forecast for 2023 U.S. real GDP growth of 0.4% and lowers its 2024 growth forecast to 1.8% from 2.1%, based on data as of June 1.

However, OMB does forecast lower unemployment rates in 2023 at 3.8% compared to 4.3% in March. The unemployment rate is also projected to be 4.4% in 2024, down from 4.6% in March.

Over the 10-year budget window, OMB estimates that if Biden’s fiscal 2024 budget proposals are enacted, including significant tax increases on the wealthy and corporations, cumulative deficits would be $107 billion higher than the March estimate. Nevertheless, the 10-year deficits would still be approximately $2.6 trillion lower than OMB’s current-law baseline.

About News Team

Hi, I'm Alex Perez, an experienced writer with a focus on lifestyle and culture news. From food and fashion to travel and entertainment, I love exploring the latest trends and sharing my insights with readers. I also have a strong interest in world news and business, and enjoy covering breaking stories and events.

Have a tip we should know? tips@rhd.news

Most Read

  1. News
    Pandora Papers Financial Leak Shows Us the Secrets of the World’s Rich and Powerful
    3 years ago
  2. Health
    US Supreme Court Rejects J & J TALC Cancer Case Appeal
    3 years ago
  3. Lifestyle
    9 Habits that Drain your Daily Focus and How to Avoid Them
    3 years ago
    Women’s Demand for Shapewear – the big Trends
    3 years ago
    Valentino Launches its Cosmetics Line
    3 years ago
  6. Health
    US Promises to Share 60 million Doses of AstraZeneca Vaccines
    3 years ago
  7. Health
    UK Offers Aid Amid Surging COVID-19 Cases in India
    3 years ago
  8. Sports
    Thousands of fans welcome Charlton funeral cortege at Old Trafford
    7 months ago
  9. News
    Brit left fighting for life after train derails in Argentinia
    7 months ago
    Dubai faces down airline rivals with $50 bln jet orders
    7 months ago
  11. Sunak
    UK’s Sunak brings back Cameron, sacks Braverman
    7 months ago
  12. Sports
    Man United’s Hojlund, Eriksen withdrawn from Denmark team duty
    7 months ago
  13. Health
    Autumn Sneezing Syndrome is on the rise… here’s what you can do
    7 months ago
  14. Canada
    Canada beat Italy to win Billie Jean King Cup for first time
    7 months ago

Follow @rushhourdaily: