Biden’s student loan and bank bailouts caused most of $408 billion deficit increase

The Congressional Budget Office now projects that the federal deficit for fiscal 2024 will total $1.9 trillion, a $408 billion increase from its projection in February that the deficit would amount to $1.5 trillion. The culprit of this 27% increase in the projected deficit? President Joe Biden 's bailouts of student loan debt and failed banks.

More than a third of the projected increase, or $145 billion, results from "revisions that the Administration made to the estimated subsidy costs of previously issued loans and from the Administration’s proposed rule to reduce many borrowers’ balances on student loans," according to the CBO. The Federal Deposit Insurance Corp., which was directed by the White House to foot the bill for a series of bank failures even though not all the compromised accounts were insured by the independent agency, has failed to quickly recoup those losses, increasing projected outlays by another $70 billion. Together, Biden's bailouts of the banks and of student loan debt contribute to a majority of the $408 billion increase.

More pernicious than all the student loan debt Biden is explicitly trying to cancel, often in violation of repeated pushback from the federal judiciary, is the debt taxpayers are clandestinely being forced to take on through the president's income-driven repayment scheme for student loans borrowers are nominally expected to repay again after a multiyear pause.

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Of the more than $1 trillion in student loans the CBO expects the federal government to issue in the next decade, taxpayers will lose nearly $400 billion. Rather than the positive return on investment once promised when the federal government effectively nationalized the student loan system after the Affordable Care Act, taxpayers will lose 20 cents for every dollar spent on new student loans this year.

It is true that Republicans who refuse to reform the entitlement growth fueling the bulk of our projected overall spending growth bear a significant portion of the blame for our growing fiscal crisis, and elected Democrats who have rubber-stamped Biden's trillions in wasteful legislative packages have dramatically more so responsibility. But the abdication of Congress's responsibility to serve as a check and balance to the executive branch is evident in the reality that the majority of the 27% increase in the projected deficit is solely based on Biden's attempt to buy votes and save his failing reelection bid.