By Acting Director Shalanda Young
Today, OMB released the 2022 Mid-Session Review (MSR), which updates the Administration’s budget estimates to reflect economic and technical changes that have occurred since we released the President’s Budget in May and provides updated economic projections.
This year’s MSR confirms what we already knew to be the case: the historic investments detailed in the President’s Budget will help create jobs and grow our economy while improving our country’s long-run fiscal and economic health. And it underscores the importance of passing and implementing both the Infrastructure Investment and Jobs Act and the President’s Build Back Better agenda.
What we’ve seen in the first half of this year is that the President’s economic plan is working. Over the past 6 months, we’ve added 4 million jobs—an average of 700,000 jobs per month, and the most jobs created during the first 6 months of any presidency in history. The unemployment rate has dropped to 5.4 percent. New unemployment claims have declined by more than 50 percent since January. Our economy has already made up the GDP losses of the last 18 months. During the first two quarters of 2021, the economy grew faster than during the first half of any other year in nearly four decades.
Based on these data, and consistent with independent forecasters, the MSR projects that economic growth will now be significantly higher than initially projected in the Budget. After accounting for the full Administration agenda and making other updates, the MSR also projects stronger long-term growth.
Importantly, the type of long-term investments the President has proposed in his Build Back Better agenda and the bipartisan infrastructure bill, which are reflected in both the Budget and the MSR, will help carry forward the economic momentum we’ve seen over the first half of this year—driving higher growth and job creation, a larger labor force, better living standards, and greater equity in the years and decades to come. For example, the MSR projects 2031 real GDP growth that is 0.4 percentage points higher than Blue Chip growth projections. After just five years, a 0.4 percentage point increase in growth leads to $500 billion more annual income, or almost $4,000 per U.S. household.
The MSR also demonstrates that we can make these historic and necessary investments in our people and our future while also reducing long-term deficits and debt and putting our country on a sound fiscal course. The MSR shows the deficit down by more than a half a trillion dollars this year relative to the Budget’s projections—1 percentage point of GDP lower than it was under the final year of the previous Administration. And compared to the projections in the President’s Budget, deficits are now forecast to be $684 billion lower over the next 10 years, largely as a result of higher projected growth.
Under the President’s leadership—and thanks to the grit and resilience of the American people—our economy is getting back on track. And in the weeks and months ahead, we’re looking forward to continuing to work with Congress to advance the President’s agenda and help build our country and economy back better.
Shalanda Young is the Acting Director of the Office of Management and Budget.