Congressional Budget Office Director Phillip Swagel discusses America’s fiscal situation as the US faces a $2 trillion deficit for the second year in a row in Cavuto: Coast to Coast.
A new analysis of the tax and spending plans proposed by Vice President Harris and former President Trump finds that both will add billions of dollars to the national debt over the next decade on top of projected budget deficits.
The non-partisan Committee on a Responsible Federal Budget (CRFB) analyzed various tax and spending proposals put forward by Trump and Harris on the campaign trail and on Monday released updated figures detailing the latest policies they want to be elected.
The CRFB found that Harris’ plan would add an estimated $3.95 trillion in additional debt over a ten-year period from 2026-2035 based on their average estimate, with a high estimate of $8.3 trillion and a high estimate of 300 million accounts. because of uncertainty about how his policies will be implemented. In contrast, Trump’s plan would add $7.75 trillion to the debt over that period based on the average CRFB estimate, with a high estimate of $15.55 trillion and a low estimate of $1.65 trillion.
“The debt is expected to reach record levels as a share of the economy if we do nothing, and rather than do nothing, both of these candidates – if their agenda were fully implemented – would actually make the financial situation worse,” Marc. Goldwein, SVP and senior director of policy at CRFB, told FOX Business.
FEDERAL DEFICIT NEAR $2 TRILLION AND GETTING WORSE, EXPERTS WARN
A CRFB analysis of the candidates’ economic plans estimated that Trump’s plan would add $7.75 trillion to the debt over 10 years and Harris’ plan would add $3.95 trillion. (FOX Business / Image Gallery / Fox News)
“Our analysis is not a prediction of what will happen, it is an estimation of what they are proposing to happen, and that first point is very important because it can set the terms of the debate, especially if there is a unified government, but whatever. no,” said Goldwein. “The obvious facts are that the debt is heading towards record levels, interest costs are eating the whole budget alive, interest rates are always high, inflation is also a threat. So policy makers, I hope, will feel pressure to actually control the debt.”
CRFB’s analysis projects that the debt-to-GDP ratio, which compares public debt to the size of the US economy, is expected to rise from 99% of GDP this year to 125% by the end of 2035 based on the Office’s Basis This Congressional budget under current law – passing the record 106% set in 1946 over the next three years.
Based on the median estimate of Harris’ plan, the debt will rise to 134% of GDP by fiscal year 2035, while Trump’s will increase the debt to 143% of GDP by then.
US NATIONAL DEBT DRIVES TO NEW RECORD: $35 TRILLION
Neither Trump nor Harris have offered major plans to address the rapid growth in Social Security and Medicare costs, the two main drivers of rising debt and interest costs. Goldwein explained, “No candidate is really talking about any fundamental changes to Social Security or Medicare or Medicaid, for that matter. So no candidate has any plan that you can expect to delay the primary debt, even for a very long time.”
He added that Trump’s proposal to eliminate taxes on Social Security benefits, which apply to a portion of benefits received by high-income retirees, would worsen the financial outlook for the eligibility program by taking that tax money off the table.
“That’s a source of revenue where costs will increase over time and will reduce Social Security and Medicare funds over time. It’s like increasing Social Security benefits for high-income people in a more expensive way over time,” Goldwein said.
THE ECONOMIST OFFERS A BIPARTISAN PLAN TO AVOID A FINANCIAL CRISIS BY FIXING AMERICA’S RAPIDLY INCREASING NATIONAL DEBT.
Brian Riedl, a senior fellow at the Manhattan Institute who focuses on budget, tax and economic policy, told FOX Business that Trump and Harris’ fiscal plans are focused on trying to woo voters on the cost of dealing with the debt.
“It’s a panderfest for 2024, with both candidates playing Santa Claus hoping to buy off voters with new, expensive benefits without regard to cost,” Riedl said. “Regardless of which candidate wins, we’ll be looking at a 10-year deficit of between $25 trillion and $30 trillion even taking into account peace, prosperity and low interest rates. This is absolutely unsustainable.”
Riedl said it’s a “mathematically impossible gimmick” to use higher taxes on the wealthiest Americans to cut more revenue and noted: “Even when the Democrats held the trifecta in 2021 and 2022, they didn’t bring a big tax cut on top incomes. voted down because they are tricks. These promises of unlimited taxation of the rich are not really serious proposals that the Democrats intend to bring down.”
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He also said that Trump’s plan is heavily reliant on tax revenue as a source of tax revenue, but it is unclear whether it will be implemented or used as a negotiating tactic. If tariffs are implemented, they could raise between $2 trillion and $4.3 trillion in tax revenue over ten years, according to a CRFB analysis.
“Many Republicans in Congress believe that the tax negotiations are a negotiation strategy rather than a real proposal to be implemented, then Trump is looking at about $10 trillion in new costs in addition to the base deficit of $22 trillion, this could accelerate the debt crisis,” said Riedl.
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