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MNI BRIEF: Biden Budget Sees Over 5% Deficit To GDP Thru 2033

President Biden’s third budget proposal released Thursday touts nearly USD3 trillion in new deficit reduction over the next ten years on tax increases, but still manages to average a 5.2% deficit to GDP thru 2033, above the prepandemic path.

The White House budget assumes no recession, a rise in unemployment to 4.3% this year, before peaking at 4.6% next year. The President's budget sees CPI inflation easing to 4.3% this year and 2.4% in 2024, but sees inflation stuck at 2.3% with the Fed failing to reach its 2% target through 2033.

(See: MNI INTERVIEW: Biden Investments Shield Jobs From Fed-Sojourner)

Even as the budget’s economic assumptions anticipate an increase in real interest rates over the coming decade, real interest payments are in line with the historical average, White House officials stressed on a call with reporters. Biden's budget is expected to be dead on arrival on Capitol Hill and Republicans are expected to offer a starkly different budget sometime this spring.

Source: Office and Management and Budget

MNI Washington Bureau | +1 202-371-2121 | evan.ryser@marketnews.com
MNI Washington Bureau | +1 202-371-2121 | evan.ryser@marketnews.com

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