Trump and Harris’ policies will both raise the national debt but Trump’s plan would add $4 trillion more, study finds

Both former President Donald Trump and Vice President Kamala Harris are presenting voters with ever-expanding lists of promises, ranging from helping manufacturers to giving millions of Americans tax breaks to lowering the cost of housing and healthcare.

However, a new analysis has shown that those initiatives come with large price tags, and the candidates have not explained how they would fully cover the expenditures. Therefore, regardless of the election outcome, the national debt would increase by trillions of dollars, exacerbating the already dire financial situation of the nation.

The Committee for a Responsible Federal Budget released an analysis on Monday that showed that while Trump's program would increase the debt by $7.5 trillion, Harris' proposal would increase it by $3.5 trillion over the next ten years.

The watchdog group's report is the most recent in a string of evaluations of the candidates' policies, all of which conclude that Trump's would likely have a greater effect on the national debt than Harris's. The committee points out that because neither contender has released a detailed proposal, its calculations are subject to a great deal of uncertainty and incorporate numerous assumptions. Its research is based on various sources, including speeches, conversations with campaign workers, official campaign websites and announcements, white papers, social media posts, and similar plans found in presidents' budgets.

Due to the dearth of comprehensive platforms, the committee's research included a range of cost estimates. It was discovered that either Harris's proposals may significantly raise the debt or have no effect at all. Furthermore, the debt might increase by $1.5 trillion to $15.2 trillion as a result of Trump's plans. It's also difficult to predict how Americans and businesses might behave differently if these regulations were implemented. Almost all need permission from Congress.

Trump and Harris have not discussed lowering the nation's enormous debt load, despite frequent statements from both Democrats and Republicans in Congress that they wish to keep the debt, which is at $35.7 trillion, under control. However, because the federal government keeps spending more than it takes in, the debt keeps growing quickly. Many experts, including Jerome Powell, the chair of the Federal Reserve, have declared that the country's fiscal trajectory is unsustainable.

The committee's senior policy director, Marc Goldwein, told CNN that "we're already spending more on interest than on Medicare and defense, and this high debt really kind of crowds out everything else." "It discourages private sector investment, which results in slower economic growth. Spending in the public sector is crowded out as a result, leaving less money for other priorities.

The Trump campaign disputed the committee's findings, claiming to be against the 2017 tax reform legislation.

Senior campaign advisor Brian Hughes stated in a statement, "President Trump's historic tax cuts laid the foundation for robust, non-inflationary growth that fueled more revenue for the federal government, not less." "We can make our economy great again by enacting President Trump's plan, which will curb unnecessary spending, combat inflation, lower interest rates, and spur economic growth that supports government revenue."

The Harris campaign declared that their proposals would lower the deficit and expressed a strong disagreement with the study. It cited other research that suggested, depending on how much of the tax cuts she chooses to keep in place and how many of President Joe Biden's tax ideas she accepts, her proposals would reduce the deficit.

Harris’ proposals Extending the 2017 Tax Cuts and Jobs Act provisions for those earning less than $400,000 annually is the most expensive item in the vice president's program; the committee estimates that this would cost $3 trillion. The estate and individual income tax provisions of the bill will terminate at the end of 2025.

Next comes an extension of the improved Affordable Care Act premium subsidies, which adds $550 billion, and the extension of the earned income tax credit and child tax credit, which have a combined cost of $1.4 trillion.

Additionally, Harris's recommendations for bolstering education and the care economy—including the creation of a nationwide paid family and medical leave program—were included in the committee's agenda. These included helping small companies, manufacturers, and affordable housing, as well as enhancing border security and abolishing tip taxes. The overall cost of these plans would be $2.3 trillion.

(Since Harris hasn't released more thorough ideas, the committee used measures from the budgets and packages of the Biden administration as examples for some of these topics.)

In addition to raising other taxes on wealthy Americans and large corporations, Harris would raise the corporate tax and capital gains rates to 28% in order to partially balance the cost of her agenda. However, it is not anticipated that these measures would cover the entire cost. Since her campaign has stated that she favors the revenue-raising measures in Biden's budget, the committee thinks she would propose many of them.

Trump's actions One of his most notable accomplishments from his first term, the 2017 tax reduction package, is something the former president wants to keep almost entirely in place. However, he would increase the cost by implementing other measures, like doing away with the $10,000 cap on state and local tax deductions and allowing businesses to once again instantly deduct equipment and research investments. Altogether, this would cost roughly $5.4 trillion.

Trump has also pledged to lower the corporate tax rate to 15% for domestic manufacturers and to eliminate taxes on gratuities, overtime pay, and Social Security payments. By taking these actions, revenue would drop by $3.8 trillion.

Strengthening the armed forces, guarding the border and expelling undocumented immigrants, implementing housing changes, and increasing funding for healthcare, long-term care, and caregiving are also on the committee's agenda.

Trump has stated time and time again that his proposed tariffs, which would amount to 10% or 20% on all imports from outside the US and up to 60% on all imports from China, would cover the cost of his policies.

Yet, the group projects that over a ten-year period, these tariffs will generate between $2 trillion and $4.3 trillion in revenue, insufficient to fund Trump's goals.

There would also be compromises. Tariffs, according to the majority of experts, would increase the cost of imported goods for Americans. This is due to the fact that American businesses typically import goods and pay tariffs. Consumers may then be charged for the expense.

The average middle-class household would pay almost $1,700 a year more than a 10% general tariff with a 60% duty on goods made in China, according to the Peterson Institute for International Economics. Additionally, the Tax Policy Center estimated that middle-class households may have an annual impact of $1,350.

Retaliatory tariffs would be an additional compromise. Analysts predict that other nations would almost certainly apply their own levies to US goods. A trade conflict may cause the US economy to contract, lowering government revenue.

Along with increasing energy production, Trump also pledged to abolish the Department of Education and eradicate fraud, abuse, and waste. The committee concluded that these actions would increase or save close to $1.1 trillion.