Trump and Harris’ proposals would both increase the national debt, but Trump’s plan would add another $4 trillion to the national debt, a study says

CNN
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Both Vice President Kamala Harris and former President Donald Trump are presenting voters with increasing lists of promises, from housing affordability and health care to supporting manufacturers and tax relief for millions of Americans.

However, these proposals come at a high cost, and candidates have not outlined how they would fully cover the costs, a new analysis has found. This would add trillions more dollars to the national debt regardless of who wins the election, further exacerbating the country’s fiscal problems.

Harris’ plan would increase debt According to the Committee for a Responsible Federal Budget report released Monday, spending would amount to $3.5 trillion over the next decade, while Trump’s program would result in an increase of $7.5 trillion.

The watchdog group’s analysis is the latest in a series of reviews of candidates’ plans that generally find Trump’s proposals would have a greater impact on the national debt than Harris’s. The Committee notes that its estimates contain a wide range of uncertainties and involve many assumptions, as none of the candidates have presented detailed proposals. The analysis draws on official campaign announcements and websites, white papers, social media posts, speeches, discussions with campaign staff, similar proposals in presidential budgets, and other sources.

Due to the lack of detailed platforms, the committee presented a number of cost estimates in its analysis. It found that Harris’ actions would not have a significant impact on the debt or increase it by $8.1 trillion. And Trump’s proposals could increase the debt by $1.5 trillion to $15.2 trillion. Also difficult to determine is how Americans and companies might do this Change your behavior when these policies take effect. Almost all require congressional approval.

Neither Harris nor Trump have talked about reducing the country’s heavy debt burden, although both Republicans and Democrats in Congress have repeatedly said they want to rein in the debt, which currently stands at $35.7 trillion. But the federal government continues to spend more money than it takes in revenue, causing debt to continue to rise rapidly. A number of experts, including Federal Reserve Chairman Jerome Powell, said the country is on an unsustainable fiscal path.

“We are already spending more interest rates than Medicare and defense, and that high debt is really crowding out everything else,” Marc Goldwein, the committee’s senior policy director, told CNN. “It crowds out investment in the private sector, so we have less economic growth. This crowds out spending in the public sector, leaving us with less scope for our other priorities.”

The most expensive item in the vice president’s agenda is extending provisions of the 2017 Tax Cuts and Jobs Act to those making less than $400,000 a year – which the committee said would cost $3 trillion. The individual income and inheritance tax provisions of the law expire at the end of 2025.

It follows the expansion of the child and earned income tax credit, which comes with a $1.4 trillion price tag, and the expansion of the Affordable Care Act’s enhanced premium subsidies, which brings in an additional $550 billion.

The committee also considered Harris’ suggestions to support affordable housing, manufacturers and small businesses; Elimination of taxes on tips; improving border security; and strengthening the education and care industries, including establishing a statewide paid family and medical leave program. These proposals would cost a total of $2.3 trillion.

(For some of these points, the committee used the measures contained in the Biden administration’s budgets and packages as models, since Harris has not announced more detailed guidelines.)

Harris would partially offset the costs of her platform by raising the corporate tax and capital gains rate each to 28% and increasing other taxes on wealthier Americans and big corporations — although those measures are unlikely to fully cover the bill. The committee expects she would propose many of the revenue-raising provisions in President Joe Biden’s budget because she said she supported them during her campaign.

The former president wants to extend almost all provisions of the 2017 tax cut law, one of the key achievements of his first term. But he would drive up the price through certain other measures, such as eliminating the $10,000 cap on state and local tax deductions and restoring the ability for companies to immediately deduct investments in equipment and research. In total it would cost almost $5.4 trillion.

Trump has also promised to eliminate taxes on tips, overtime pay and Social Security benefits and to cut the corporate tax rate for domestic manufacturers to 15%. These measures would reduce sales by $3.8 trillion.

Also on the committee’s list are strengthening the military, securing the border and deporting illegal immigrants, passing housing reform and increasing support for health care, long-term care and nursing care.

Trump has repeatedly said that the new tariffs he wants to impose – 10% or more 20% on every foreign import entering the U.S., as well as another tariff of more than 60% on all Chinese imports — would fund his proposals.

However, the committee estimates that these tariffs would raise between $2 trillion and $4.3 trillion over the course of a decade – not enough to cover Trump’s agenda.

There would also be compromises. Most economists agree that tariffs would increase the prices Americans pay for imported goods. This is because it is usually an American company that imports the goods and pays the duty. The costs can then be passed on to consumers.

According to the Peterson Institute for International Economics, a flat 10% tariff with a 60% tariff on goods made in China would cost the average middle-class household about $1,700 annually. And the Tax Policy Center said the impact could be $1,350 a year for middle-income households.

Another compromise would be retaliatory tariffs. Analysts say other countries would almost certainly impose their own tariffs on U.S. products. A trade war could slow the U.S. economy and reduce government revenue.

Trump has also promised to expand energy production, abolish the Department of Education and stamp out waste, fraud and abuse. These measures would raise or save nearly $1.1 trillion, the committee found.

CNN’s Katie Lobosco and Matt Egan contributed to this report.