Money in Washington is weird. One day you hear the deficit is shrinking by trillions, and the next day you’re told we’re barreling toward a fiscal cliff. If you’re trying to figure out how much did the deficit increase under Biden, the answer depends entirely on who you ask and which spreadsheet they’re holding.
Honestly, it’s a bit of a shell game. When Joe Biden took the oath of office in January 2021, the country was still reeling from a global pandemic. The deficit that year was a massive $2.8 trillion. By 2024, that number "dropped" to around $1.8 trillion. On paper, that looks like a win. But here’s the kicker: even at $1.8 trillion, we’re still spending way more than we’re bringing in.
The Big Numbers: What Really Happened?
To understand the actual impact, you have to look at the gap between what the Congressional Budget Office (CBO) expected to happen and what actually went down.
The Committee for a Responsible Federal Budget (CRFB) estimates that President Biden approved roughly $4.7 trillion in new net debt through his term ending in early 2025. This isn't just one big check. It’s a pile of laws, executive orders, and interest payments that stacked up over four years.
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You've probably heard of the American Rescue Plan. That was the big one. It added about $2.1 trillion to the deficit right out of the gate. Then you had the Bipartisan Infrastructure Law and the PACT Act for veterans. While these programs do things people generally like—fixing bridges and helping sick soldiers—they aren't free.
The Interest Rate Trap
Here is something people often miss: interest. When the government borrows money, it has to pay interest, just like a credit card. For a long time, interest rates were basically zero. Then inflation hit.
The Federal Reserve hiked rates to stop prices from spiraling, but that made the government’s debt way more expensive to maintain. By fiscal year 2024, interest payments on the national debt actually topped $880 billion. That is more than we spend on the entire Department of Defense. It’s wild to think about—we’re spending nearly a trillion dollars a year just to "tread water" on the money we already borrowed.
Why the Deficit Numbers Keep Shifting
If you watch the news, you’ll see the White House claiming they "lowered the deficit by $1.7 trillion." This is technically true but also kinda misleading.
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In 2020, under the previous administration, the deficit hit an all-time high of $3.1 trillion because of emergency COVID spending. When those one-time emergency programs expired, the deficit naturally fell. It’s like if you spent $5,000 on a surgery one year and then didn't the next—you didn't really "save" $5,000 in your permanent budget; you just stopped having an emergency.
Significant Policy Impacts
- The Inflation Reduction Act: This was a rare moment where a bill actually included "pay-fors." The CBO estimated it would reduce the deficit by about $250 billion over a decade by negotiating drug prices and increasing corporate taxes.
- Student Loan Forgiveness: This caused a massive swing in the books. When the plan was announced, the deficit jumped. When the Supreme Court blocked it, the deficit "shrank" on paper because the government no longer had to account for that cost.
- Social Security & Medicare: These are "mandatory" programs. As more Baby Boomers retire, the cost goes up automatically. No president has a magic wand to stop this without major law changes.
The 2025 Reality Check
As of late 2025, the deficit is still hovering around the $1.8 trillion mark. Revenues—the taxes the government collects—have actually been pretty strong because people are working and wages are up. But spending is staying high. We’re seeing a persistent "structural deficit." Basically, the government has reached a point where even when the economy is good, we still overspend by massive amounts every single month.
What Most People Get Wrong
Most people think the deficit and the debt are the same thing. They aren't. Think of the deficit as your monthly overspending. If you make $4,000 but spend $5,000, your deficit is $1,000. The debt is the total balance on your credit card from all those months of overspending combined.
Under Biden, the national debt climbed from about $27.8 trillion to over $36 trillion by the end of his term. That’s a massive jump. While not all of that is his "fault"—much of it is built-in interest and mandatory spending—his administration's policies certainly accelerated the timeline.
Actionable Insights for Your Wallet
The deficit might seem like a "Washington problem," but it hits your house eventually. Here is what you should keep an eye on:
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- Inflation Pressure: Persistent high deficits can keep inflation sticky. If the government keeps pumping money into the economy, prices for groceries and gas struggle to stay down.
- Interest Rates: As long as the government is borrowing trillions, interest rates for your mortgage or car loan are likely to stay higher for longer. The government is essentially "competing" with you for loans.
- Future Taxes: At some point, the bill comes due. Whether it's through higher tax rates or reduced benefits like Social Security, a high deficit usually means the next generation pays more for less.
To stay ahead, focus on fixed-rate debt for your own finances. If the government’s borrowing costs go up, you don't want your personal interest rates tied to that volatility. Diversifying your investments into assets that hold value during inflationary periods—like real estate or specific stocks—can also help buffer the impact of federal overspending.
Keep an eye on the CBO's Monthly Budget Review. It’s a dry read, sure, but it’s the most honest scoreboard we have for how much the country is actually losing every 30 days.