Biden budget to trim $1T from deficits over next decade

WASHINGTON (AP) — President Joe Biden plans to propose a fiscal 2023 budget Monday that would cut projected deficits by more than $1 trillion over the next decade, according to documents obtained by The Associated Press.

The lower deficits reflect the economy's resurgence as the U.S. emerges from the pandemic, as well as likely changes to the tax code that would raise more than enough revenue to offset additional investments planned by the Biden administration. It's a sign that the government's balance sheet will improve after a historic burst of spending to combat the coronavirus.

The fading of the pandemic and the growth has enabled the deficit to fall from $3.1 trillion in fiscal 2020 to $2.8 trillion last year and a projected $1.4 trillion this year. That deficit spending paid off in the form of the economy expanding at a 5.7% pace last year, the strongest growth since 1984. But inflation at a 40-year high also accompanied those robust gains as high prices have weighed on Biden's popularity.

Biden inherited from the Trump administration a budget deficit that was equal in size to 14.9% of the entire U.S. economy. But the deficit starting in fiscal 2023 will be below 5% of the economy, putting the country on a more sustainable path, according to people familiar with the budget proposal who insisted on anonymity to discuss forthcoming details.

The lower deficit totals will also be easier to manage even if interest rates rise.

The expected deficit decrease for fiscal 2022 reflects the solid recovery in hiring that occurred in large part because of Biden's $1.9 trillion coronavirus relief package. The added jobs mean additional tax revenue, with the government likely collecting $300 billion more in revenues compared to fiscal 2021, a 10% increase.

Still, the country...